Ann: Revised Payment Arrangements with DIAsource Vendors, page-149

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jak444

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18/07/17

20:24

Post #: 25940757
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Originally posted by dubspec ↑

Ok. Ive had a little read over the announcements. Here is my summary.

> Purchase Price of €15.4m + earn out (ended up being €4.322m).
> to be paid 50% in cash up-front (€7.7m) and the balance (€7.7m) to be paid via a deferred payment plan of Eight (8) instalments, each equal to €962,500
> Earn out was to be paid Jan 11th. Was deferred to July 11th. As part of the vendor agreeing to the defereal, they reduced the amount of the earn-out that could be paid via equity from 20% to 15% and now to 5% (as in diasource wanted cash not ADO shares). the earn out was for 2015 and 2016. Was the earn-out at the floor price of 15c? if so, Anteo are giving up a lot just to survive.
> Now the earnout payment also attracts 8% interest (ie, more cashflow pressure). Has to be paid by October.

I also trawled the Annual Report and cant really see what diasource contributed to the bottom line. It looks to me that if Diasource is making a profit then all of it and more is being sucked up in Anteo expenses. Last cashflow report shows that even if ADO didnt have the ~€962k repayments the business would only be wiping its face (ie, no free cashflow). I would love to know more details about the earn out as it seems very high.

With more repayments due, cashflow would be getting awefully tight and i wonder how close they are to calling in administrators (cash at end of qrt was €1066k and they had €962k to pay back). If I were ADO, id either try and sell some of the MnG business pronto. or i'd totally stop unnecessary expenditure. When I mean unnecessary, I mean any expenses that don't contribute immediate to cashflow (more than the expense).

They have to pay back €4.322 (with only 5% being able to be repaid with equity) and another installment payment by Oct 2017. So as I see it, they effectively need to raise ~€5.0m by Oct with ~€200k to be paid in equity.

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To make a decision to cut off Bergen and then a few months later call in administrators?

Not sure that could be construed as acting responsibly and in the best interests of the company.

Based on that, I'm sure the Board has options - even if not altogether palatable.

ADO Price at posting: 1.8¢ Sentiment: Hold Disclosure: Held
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Ann: Revised Payment Arrangements with DIAsource Vendors, page-149

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