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NSCI - Sale or liquidation may be on the cards...

Medical related share discussion
SKYSHIP
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NSCI - Sale or liquidation may be on the cards...

#184458

Postby SKYSHIP » December 3rd, 2018, 11:41 am

Interesting developments afoot at NetScientific (NSCI)

Who? I hear you collectively say, as I suspect no-one will have heard of NSCI!
===============
About NetScientific - NSCI is a transatlantic healthcare technology group with an investment strategy focused on sourcing, funding and commercialising technologies that significantly improve the health and well-being of people with chronic diseases. For more information, please visit the website at www.NetScientific.net
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The ski-slope chart shown on ADVFN’s PE thread (see link at the bottom of this post) tells its own story; but it has also prompted the BoD to be realistic as to its prospects. Accordingly we saw this statement last week (edited for brevity):

“Strategic review including formal sale process under the Takeover Code:

NSCI, the transatlantic healthcare IP commercialisation group, announces today that it has decided to conduct a review of the various strategic options open to it (the "Strategic Review"), one of which is a sale of the Company.

The Company has made recent significant progress against strategic milestones in its portfolio companies………The Board believes that the market is undervaluing NetScientific's portfolio. Therefore, the Board has determined that it is appropriate to evaluate all options, including a sale of the Company or certain of its portfolio companies, to maximise value for shareholders.”

<a href='https://uk.advfn.com/stock-market/london/netscientific-NSCI/share-news/NetScientific-PLC-Announcement-of-Strategic-Review/78757626' target='window'>https://uk.advfn.com/stock-market/london/netscientific-NSCI/share-news/NetScientific-PLC-Announcement-of-Strategic-Review/78757626</a>

I’ve bought a few this morning, having patiently sat on my hands over recent months waiting for a base to form. With the likely NAV well over double the current 28p share price, a small speculative position may well reward. Worth a look at any rate…

https://uk.advfn.com/cmn/fbb/thread.php3?id=26570589

flyer61
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Re: NSCI - Sale or liquidation may be on the cards...

#184476

Postby flyer61 » December 3rd, 2018, 12:43 pm

Thanks Skyship, have bought 15000 having had a quick look. If your hunch is correct re asset value the market has reacted rather benignly IMHO. Let’s hope for a positive outcome.

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Re: NSCI - Sale or liquidation may be on the cards...

#193044

Postby SKYSHIP » January 12th, 2019, 4:15 pm

Flyer - I'm so, so sorry about flagging up NSCI. Personally sorely tempted to average down as the current sp looks rather bizarre. See these posts over at ADVFN, starting with one by me:
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I'm surprised that the Market is quite so negative - obviously the possibility of a delisting has really upset the applecart.
In November when the shares traded at 27p, the Board stated:
"Against these recent developments, the Board believes that the market is undervaluing NetScientific's portfolio. Therefore, the Board has determined that it is appropriate to evaluate all options, including a sale of the Company or certain of its portfolio companies, to maximise value for shareholders."
Bearing in mind that the implied valuation on just one of their holdings (Glycotest) is 13p/share, the current 6p-7.5p looks totally absurd.
Hopefully they will be able to raise more cash around the 10p level; so even with dilution they will then buy time for an orderly exit and still deliver somewhere around the 20p level.
"The Company has received indications of interest in a potential acquisition of certain of the Company's portfolio companies."
============================

Skyship,
I held a position in this Co. in the past, and, I freely confess I got it wrong and so do not profess to be a soi disant expert on this outfit.. With hindsight, I was mistaken in my interpretation of commercialisation prospects of some of the portfolio Co's/products. Be that as it may, i very recently have taken a relatively modest stake in the single digits though, even at these levels, there is considerable risk in terms of an existential threat to my stake, offset by an equally rewarding prospect to the upside. I say this on the following basis:
Currently it is capitalised at below £5 million (78,561,866 at around 6p) – it has around 3 million in cash, having raised around £6 million at 52p in April with Neil Woodford taking a big chunk in addition to what he already owned. He currently holds around 46% having originally bought the bulk of his holding at 120p.
Plus points:
a) It has 5 portfolio investments – Vortex, Glycotest, ProAxsis, PDS & Wanda. Glycotest recently agreed a transaction with Fosun who agreed to pay $10 million funding for 40% of Glycotest only, not 40pc of NSCI) implying a $25 million valuation for Glycotest alone

b) PDS raised over £1 million in bridge financing this year which values it around £6 million & has recently agreed a merger with Nasdaq listed Edge therapeutics with PDS holders retaining 70% of it. Net asset value for NSCI approx £15 million on transition to IFRS 9
c) Proaxsis has started to generate revenues and is expected to become self financing next year.
d) A month ago at 27p the Co. put itself up for sale on the basis that at 27p the market did not appreciate the value of the above investments and was “undervaluing NetScientific's portfolio”. A few weeks later, notwithstanding expressions of interest, no formal bid has yet emerged and the shares dropped to the current 6p – so much for the market not valuing it properly at 27p a month ago!
e) I think at 6p, despite the risks, not least funding requirements (see below) due to substantial cash outflows this is undervalued and any bid could be at multiples of the current price.
Negatives:
a) Although it has cash of around £3 million, the Co. will require around £5 million per year running/funding costs going forward – so, it remains open to sale of any or all of the core portfolio companies, or external financing or even a fundraising.Raising funds by way of issuoing equity is a bit of a non starter at these levels.
b) They have mentioned in the options available to them the prospect of delisting. That is not god news, especially when it comes to the track record of Woodford. A very similar exercise happened with Sphere (SPHR) in which i had no interest, but, upon delisting, notwithstanding the Co averring at the time of delisting insofar as I am aware, there has been very little progress since going private and the cost base has continued to be ridiculous for a firm doing very little. I am not sure what Woodford's gameplan was with Sphere, but, whatever it was/is, it is inconceivable that he or the Co had any regard for minority holders. They did allude to the prospect of a matched bargain facility post listing but, in the end, failed to operate such a service to enable shareholders to trade, indicating that MiFID II did not allow them to operate such a service. Those holders are, in my view, all but wiped out although I have not followed it with much interest since I have no investment in it. I do not know if the plan of NSCI is to do a Sphere 'stunt', but I do not dismiss the possibility. It seems rather odd how they suddenly decided it was undervalued at around 30p and put themselves up for sale, and only gave it a few weeks before stating there was no formal interest, and then we have seen no sign of any reduction in the cost base (I mean, what on earth are they doing with all the PR agencies and top heavy Board/Senior Management) and so on.
Summary: Cash £3mln, 5 core projects, one project alone last month agreed 10 mln funding that valued it at $25mln, other project agreed merger with Nasdaq listed Edge m/c 6 million, put itself up for sale at 27p few weeks ago saying market undervaluing its projects-have bought. But, I have done so mindful of the fact that is is a binary double/treble or bust.
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Worth noting the news from Angle yesterday (and the share price reaction) which has some relevance when trying to assign a value to Vortex
My notes (from November 2016 and July 2018) regarding the NSCI directors view on Angle vs Vortex
Oct 2016: https://uk.advfn.com/cmn/fbb/thread.php ... #firstpost
July 2018: https://uk.advfn.com/cmn/fbb/thread.php ... #firstpost
I have held Angle passively for a number of years now and have recently bought a few NSCI, but I am wary of Woodford delisting them (as happened with Sphere Medical) and issuing prefs that could leave ordinary shareholders with ords which are (in effect) just out of the money call options.

flyer61
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Re: NSCI - Sale or liquidation may be on the cards...

#196582

Postby flyer61 » January 26th, 2019, 3:59 am

SKYSHIP...you win some you lose some. This was very speculative on my part. I managed to get out at 13p as I caught the announcement about 5 minutes after it was made. The sell button was pressed the moment I read about possible delisting.


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