Wrong and misleading info yet again as the vultures circle the set up on either side of the current SP trading price, suddenly another appears, has sold his shares ? can only have done so last Friday, but now does the slam dunk post on Sunday being the day before the market re-opens, for last days tax selling and does so with incorrect information. One can?t but help be suspicious as to why, because incorrect damage continues to be done ? (As always, just in case I?m wrong, if you are genuine apologies, but please read and interpret announcements correctly and post them correctly, no matter what your opinion may be).
Re STI and Temedcare Purchase. Did not cost $ 7 mil.
Don?t confuse announcements nor facts. Initial announcements (not final) occurred on 2/7/10 and 3/8/10,
but the final/correct Purchase Conditions announcement occurred on 10/8/2010 :
STI?s purchase of 65% controlling interest in Telemedcare Pty Ltd (Aust) who in turn owned 80% of it?s U.K. subsidiary, was purchased for
1. Payment of $511,302 over the next 12 months, being full settlement of creditors who had the Deeds of Company Arrangement. Telemedcare then in administration due to losses.
2. STI were then to provide $3 mil in working capital over the next 18 months, (unsure how much has been provided to date, being 12 months into the 18months and given the slam dunking of share price and current financial position may not be much)
3. STI (MUST) allow for repayment of (original Telemedcare) shareholder loans of $3.66 million EXCLUSIVELY from Telemedcare profits. Subject to profitability, the distribution (repayments) to be through distribution of 20% of profit for the first two years, and 40% of the profits thereafter until repaid. NO INTEREST PAYABLE. (EG : STI is not paying for this)
Then announcement dated 28/2/11, being condensed half year financial report ending 31/12/2010 at Page 16 :
Period 8/10/10 ? 31/12/10 : Telemedcare added Revenues (to STI) of $280 thousand, and an operating loss of $1.1 mil.
And further states they estimated if STI did have Telemedcare from 1/7/10 ? 31/12/10 it would have produced revenues of about $1.6 mil and a loss of about $1.7 mil, just getting close to breaking even ?
Hence whilst neither you nor I know the exact position currently, one might reasonably presume that :
1. The $511,302 may have been paid or partially paid given the financial state 2. Certainly not likely they have received the full $3 mil in funding at this point 3. Original Telemedcare shareholders not likely being paid from profits yet
4. Closely followed by the announcement on 16/3/11, re the $3 mil in funding over subscribed was to be concentrated on Pharmaceutical Plant, Pharmacy sales 3M , Kidney Vital, HAD and in the same announcement the first mention of spin off of Telemedcare Interests, not likely sinking too much more money into it currently.
Hence :
1. Worst case (and very doubtful given financial and SP problems), cost $3.5 mil 2. Mid case : Cost somewhere between $511 thousand and $3 mil 3. Best case : Cost $511 thousand or less
As a reference 80% of $3.5 mil is $2.8 mil, 80% of $511 thousand is $408.8 thousand. I suggest somewhere in between is likely.
To then sell 80% ONLY, interest in Telemedcare for $3 mil. Retaining 20% of their 65% interest, which further down the track, when Telemedcare does become profitable, (but obviously this will take some time and be limited by the repayments of the original Telemedcare shareholder loans), will subsequently add small but the growing amounts of capital to STI?s revenue.
Either way represents a profit, not a loss. Hence as posted I have no problem with this as Telemedcare was unlikely to become a substantially profitable short term investment anyway, given the above financial structure and repayments, the need for huge order?s to generate huge incomes, requiring huge expenditure in expansion and product manufacture, marketing, supply etc., ( presuming a point comes where they just buy and do not test for some time, as most seem prone to do). It will have it?s time and it?s place and probably it?s financial hay day too, because of it?s leading edge technology in on line doctor appointments savings costs and overcoming inaccessibility?s, but it still has it?s limitations and is competing against other e-health, tele-health products and technologies.
Regardless STI cannot afford the long drawn out wait and cost involved in getting to that stage, given it?s badly slighted share price and financial state, the most viable substantial future lies in other products being the 3M, Kidney Vital, Pharmaceutical plant contracts, HAD, immunoxel and another 24 odd products to come.
For info have wasted yet more time re-researching all the Telemed care announcements, none effect the facts as above. Re the different announcements re amounts to be capital raised for it, this has been covered many times before on this forum, whilst the company is being bad mouthed and slam dunked share price, (as it currently still is), larger capital raising becomes impossible. Perhaps that?s why it?s being bad mouthed and slam dunked?.
Understand the basis of many of the gripes and groan?s, although some have been venomously wrong, misinterpreted, one sided, or concentrations on past mistakes without any regard to the forced change in the multifaceted potential future earnings of STI.
Slow, wrong, bad start, jumping tall buildings without a safety net, overdone and over sold forecasting and not enough information or explanation in the past (although often obvious with the changing circumstances, the slam dunking of the share price and therefore inability to substantially capital raise), yes I agree. Add to this even now a very poor declining market with many suggesting anything down to a double dip recession and then trading side ways for most of the rest of the year, and tax loss selling, end or year.
However, and especially given the time or year and market condition/restraints, I believe STI is finally trying to work within practical limitations in earning sales, and getting revenue in to now start generating a healthy future.
Hence it will shareholder approval of all the share issues at the next meeting for STI?s profitability to become close to a reality and that is why I can only encourage all to contemplate framing any questions they may have in a forward looking fashion to establish where we go from here, not where we nearly went. Should approval be given, then I believe we will slowly but surely see STI?s profitability become reality in the medium and long term. I look forward to that future.
In that respect I agree with Intell2 & Megimite (trust they will forgive my plagiarism their posts?
Intell2 : Either way STI doesn't have the capacity to fund Telemedcare. Happy to concentrate on national sales division, pharma plant, HDA, animate etc.
Megimite : A positive in my book. Focus needed and responsible management as well. Finally PB seems intent on living within STI's means. A reputation with an opportunity to be rebuilt with a little hard work. Let's see if he can turn this around after eating his humble pie. My sentiment has gone up to Hold for the time being.
As always do your own research, make your own decisions.
STI Price at posting:
0.2¢ Sentiment: Buy Disclosure: Held
