On Monday Nov 11 FBR went into a trading halt pending an “announcement regarding the completion of the Hadrian X program”. No doubt many are wondering if FBR are the real deal or just another hype machine.
Background For the totally new viewers, FBR started out as Fastbrick Robotics which first listed in Nov 2015 after raising ~$6m @ 2c per share in a backdoor listing via DMY capital (almost double its $3m target). Their goal was to produce a bricklaying robot that could build a four bedroom house in two days. A search of the DMY Capital prospectus will provide valuable detailed background info including risks.
The product(s) - The Hadrian X is the latest iteration of the robotic bricklayer that they are aiming to bring to the market
- Dynamic Stabilisation Technology (DST) - is the tech that is supposed to make this so special. Essentially it’s a self correcting guidance system that measures and compensates movements caused by wind, vibrations or counter-movements in real time - making it ideal for robotic applications OUTDOORS… going well beyond just bricklaying.
What have they done in the last three years FBR have kicked a lot of impressive goals. They have formed partnerships with some very big names and have had no shortage of backers for fundraising which they have executed brilliantly at ever increasing prices. They appear to be aiming to build a robust and sustainable company, while avoiding pointless announcements to purely inflate the share price for short term traders or satisfy the curiosity of the 0.1% of impatient HC posters with inflated senses of shareholder entitlement. Major milestones include: - Dec 16 - $8m funding raised through Hunter Hall at 8.1c
- Apr 17 - relocation to new fit-for-purpose facility
- Jul 17 - USD$2m funding raised through Caterpillar at 10c along with an MOU establishing a strategic alliance to develop how best to offer FBRs Technology to Caterpillar’s construction customers. The 12 month MOU had an option to invest a further USD$8m at 20c.
- Aug 17 - MOU with the Kingdom of Saudi Arabia - in relation to a potential project for Saudi Arabia to utilise 100 Hadrian X construction robots to build a minimum of 50,000 new homes by 2022
- Nov 17 - $35m funding raised at 19c with a small group of international and domestic institutional investors. The announcement stating Fastbrick would be funded for 2 years including Hadrian X launch and seeding new IP applications.
- Jun 18 - entered Strategic Collaboration with GP Vivienda to discuss potential pilot testing programs for Hadrian X robots in Mexico, as well as opportunities for future applications of DST
- Jul 18 - CAT MOU extended in order to allow FBR additional time to demonstrate the technology. New option condition updated also - USD$10m at increased price of 24c.
- Aug 18 - DST testing successfully completed on the layhead of the Hadrian X robot
- Sep 18 - Global Partnership Agreement with block-making giant Wienerberger AG to develop, manufacture and test clay blocks optimised for the Hadrian X
- Sep 18 - $7.4m R&D rebate received
- Sep 18 - Fully operational completion of Hadrian X build milestone achieved. Successful completion of testing program in relation to DST. Noted - the Company remains on track to complete Build1, the first build of a 3-bedroom, 2-bathroom structure by the Hadrian X in the second half of the 2018 calendar year.
Key highlights and stats: - Cash and cash equivalents at end of Sep 18 quarter - $21.7m. Estimate next quarter outflows - $7m. Although check the latest 4C for a breakdown as some of this is unlikely not ongoing. Further CAT funding and exercise of other options are also on the cards.
- Shares on issue at 30 June 2018 - 1,061,098,827. Performance shares at 30 June 2018 - 499,999,998. Options outstanding at 30 June 2018 - 23,937,500. Performance rights at 30 June 2018 - 24,416,664. Check annual reports and investor presentations for more detail info on vesting conditions.
- Growing team of staff - 140+
Concerns - Many questions the sizeable performance rights outstanding - citing dilution. IMO it’s a moot point, as the milestone achievements would likely push the share price higher than any dilution impact.
- Some complain the performance plan is too generous - I doubt they’ve read the original prospectus which explains just how committed to delivering this project the Pivacs are.
- There could be delays - it’s a complex technology project - assuming there won’t be hiccups is nonsense.
- Those that bought in the 20s are waiting to sell out - run a Volume Profile chart and you’ll see very few shares have traded at those levels
The trading halt - Trying to deduce outcomes from wording - pointless noise. All the whining about the typo! Good god! Hopefully the Hadrian can build a bridge for these guys! GTFOI.
- Successful, prices increases, risk decreases - potential upside remains huge. Sentiment - BUY.
- Delay, price decreases, arguably risk is unchanged - potential upside remains huge. Sentiment - BUY.
- Catastrophic failure, move onto the next stock.
So is FBR worth an investment? - Ridiculously huge addressable market
- Potentially multiple and extremely scalable revenue streams
- Capable team, partnering with global leaders
Good luck trying to calculate an accurate market cap. The emotion of retail investors, traders, or more likely the manipulation abilities of larger holders will likely have a much greater influence on the share price at this time. Plenty of companies are seemingly less risky than FBR and have lower market caps, and plenty have achieved very little compared to FBR and are valued at significantly more.
The path to commercialisation may not be immediate, although for those patient enough to buy and sit back and enjoy the ride, there’s little to suggest FBR won’t deliver. New investors just need to decide whether they want to risk missing out on a potentially huge run waiting to save a few cents for a lower entry.
Please excuse any errors or omissions. Apologies for the long post, although hopefully will help new guys get a reasonable snapshot to date.
(20min delay)