Ann: Clarification on Share Buyback, page-30

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Artvandelay01

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25/10/20

18:58

Post #: 48369963
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Originally posted by Artvandelay01: ↑

Just to close this out/for completeness.

VOR had $2.4m cash at 30 June 2020- refer to extract below from June Quarter 2020 Update released on 30.07.2020. VOR paid ~$0.76m ($0.59m in principal and $0.16m in interest) to the noteholders on redemption of the convertible notes leaving a cash balance of ~$1.64m. With $0.5m of EBIT forecast in the September quarter, the cash balance is likely c. $2.1-2.2m right now. Looking now at the 30 June balance sheet, there is very little that I can see that could be argued to be debt like, noting the con notes have been redeemed and i'm assuming the $200k in shares issued to Richard Tomkinson to buyout his earnout rights announced on 24 September eliminate the non-current liability owing to Cloud10 vendors (please correct me if im wrong).

The deal, assuming it goes ahead, wont complete until mid December so add another $0.5m of free cash generation. Assuming a normalised level of working capital is retained within the business (let's call it $0.5m) there should be a minimum of $2m of net cash to add to the $25m purchase price consideration. Divided by 140m SOI, that means cash backing of ~19.3c per share before attributing any value to TSI.

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Apols, forgot to deduct the tax and transactions costs. So call it $24.5m net cash / 140 SOI = $0.175 in cash backing. The buy-back range provided is $0.185-$0.195 which is stated to be "supported by NTA backing post sale of cyber assets" so maybe there's more cash in there somewhere-or my maths is off. In any case, there's near term upside here in the order of ~20% IMO

edit: not advice, DYOR etc

Last edited by Artvandelay01: 25/10/20

VOR Price at posting: 15.5¢ Sentiment: Buy Disclosure: Held
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