Understanding Anteo's Platform Technology, page-8

Hi there smilez

Your point is valid about getting cash coming in. The flow has started in smaller ways; my interpretation is that the major part so far comes from consulting revenues, and that is an increasing source. Just before Xmas last, two new initiatives with consulting attached were announced, and then we were told of ongoing work with POC1; there may be others emerging from the partnership with IMRA for example - remember their parent company is Toyota, which makes me wonder about all kinds of automotive liquids, electric cars . . .

Yes, one can put those in the "maybe" basket, but the key point is that smaller revenues emerge to begin with, eventually to be followed by sales either directly or through others' products. With more deals in the pipeline already, we'll see more such announcements, I suspect.

For some time I hadn't looked at that diagram Twinvest reproduced for us at the start of this thread. It made me wonder about some of the next areas that Anteo will be working in. It was some years back now on one of my earlier visits to the lab, that Nevin Abernethy (the then Head of Product Development and Research), commented that it was important for Joe to have his time freed as much as possible, to concentrate "on what he's good at" - Nevin was of course talking about development of new IP. So we've been seeing more of that emerge in new patents. I consider that we should look at any fresh patent applications in the light of that diagram, as doing so will show very clearly the next areas emerging for Anteo.

You're asking quite reasonably for demonstrable growth in revenues, as are many; so am I, and of course we're all wanting to see the huge endorsement arising from formal announcement of the POC1 product and partnerships. My own reading of it all is that we'll see more of that growth in the next 4c. We won't be seeing any contribution from the Veritas deal for some time, but it's another significant example of foundation laying for new partnerships - which is exactly part of Veritas' charter - they want to act as mid-wives, and have some share in the continuing profitability of these new births.

Cases such as IMRA and Veritas are really very important: they demonstrate an increasing public endorsement of Anteo's technology, and they are fore-runners of substantial activity to follow.

Now all of this is just in that tiny field of "biomarkers" highlighted in a yellow-bordered rectangle on Twinvest's diagram.

Before progressively committing so much to Anteo, I wanted to be satisfied about IP protection, and the quality of the company's management and Board. Since my initial investment (over four years ago), the Board has been considerably strengthened, and the company has remained strongly focussed on the health field. That's where its efforts have remained, to make sure it secures its financial base, before investing in these other fields. I think it was at the 2013 AGM that we were told that only 10% of research effort was given over to the non-health field. The company has not allowed the "blue sky" visions to obstruct the immediate imperatives. The consistent and careful management of cash flows demonstrates that control.

If we were to use the analogy of 19th century warfare (and that is not to belittle what war involves - it's just a way of painting what I'm getting at), we've helped fund a war, and we're observing how our side is going. There's a big township called POC1 we want to capture. We have some big guns trained on it, and we're all waiting for the town to lay down its arms and accept our authority. When it does, a great cheer will go up, and many will flock to invest in our war chest. Meanwhile, a lot of other skirmishes are being fought around the perimeter of our territory, and we're actually gaining ground in those, taking a village here, a shepherd's hut there. And the villagers now in our orbit are telling neighbouring villages and towns that "these invaders from the Island of Anteo have great technology, and do much good for us". Now a lot of potential investors don't properly realise the significance of those successful skirmishes - they're all waiting for the Big Township to fall.

Twinvest has reminded us there are a great number of other Big Townships, some closer, many quite over the horizon. But they are there.