@stephank (reply-to on HC is giving me grief too!).Merely...

@stephank (reply-to on HC is giving me grief too!).

Merely suggesting it’s a possibility, by Akili or by a neuroscience unit of a diversified healthcare/pharma company with digital aspirations. The new CEO is well positioned to woo.

Given:

• ~1.2 billion shares on issue,
• $200m+ in accumulated losses,
• Directors holding only around ~5%,
• Current market cap just ~$6m,
• Presently illogical market valuations across biotech, tech & healthcare stocks (many listed small & microcaps in the US, for example, are trading at less than their cash on hand!),
• Likelihood imo that more operating cash (further dilution) will be required before FDA conclusion is known,

...it’s hard to put a dollar value on a takeover in today’s madness. The most promising revenue potential at present (in which to estimate value) is AU$51m in future milestone payments from Akili should FDA approval be forthcoming. Anyone trying to buy this out after FDA approval would find it more expensive of course.

However, if Akili (or anyone else in the know) is sufficiently convinced of the technology’s value & patent protections during the clinical development phase we’re in then they would surely consider accumulating and buying out the business at these sorts of levels now for cash or scrip (e.g. Akili perhaps immediately post their IPO). Anything up to their existing commitment to us of $51m would seem to me to be logical for them, as the premium gained for no additional outlay would be full control of global rights. For another buyer, anyone’s guess what they would value the patents (plus the Akili milestones) at.

To get us from today to say a $51m market cap (just equivalent to what Akili is already on the hook for if FDA approves) would require a ~730% appreciation in share price (i.e. from 0.5c to ~4.2c per share). Sounds easy if you think “simply back to around Aug 2021 levels” (such is the rapid hammering we’ve taken!). But with current macro conditions, and short of another big catalyst, do we really think the potential for FDA approval way down the track is going to be enough to springboard us back to last year’s ranges anytime soon? I’m don’t.

And I really wouldn’t want to be the CEO looking for more capital in 6-12 months time - we saw what the last raise did to underlying SP and the number of shares on issue - I’d think we were heading into reverse split territory soon.

Everything here hypothetical of course.