Need to read beyond the reported H1 2020 revenue to get a feel for what's going on, operationally. To keep their exclusivity agreements with Atomo, various pharma/OEM have entered into minimum supply agreements.
From prospectus:
Each distribution and supply agreement includes a minimum annual volume which the distributor or OEM customer, as applicable, is required to order to maintain their respective rights to remain as exclusive distributor for their products in their respective territories. The cumulative minimum payments under contracts entered into with distributors and OEM customers exceed $105 million for the term of each contract, including existing sales to date
The IPO slide deck makes a comment:"...including US$33m over the next five years.
"So minimum, base case, of A$50m over the next five years.
Should point out that it's made clear that none of this is binding on either party. So you're investing based on the assumption that the pharmas and OEMs have done their due diligence (and Atomo on them as customers) and that they see commercial value in maintaining an exclusive distributor status in their territory.
From p.109 of the prospectus, you can see the details of the Material Agreements and the calibre of clients, like Mylan ($8b mc).
So the magic word "binding" isn't a feature of the contracts and you're essentially backing the veracity of the parties involved, like the Bill and Melinda Gates backed fund: http://www.ghif.com/and what they're trying to achieve.
This is all base case and doesn't include any additional distribution agreements or existing agreements exceeding the minimum requirements. They have some other potential revenue channels, viral and bacterial screening being the most interesting I think
If you work back from the number of shares generated from the convertible note and money raised, you get 16c. So no escrow on those but no cheap 10c round either - choose your poison.
Apparently it was mainly an insto-funded round and the IPO seems to be the same. I think most punters are hearing the same story about how hard it will be getting stock.
