Anteo Diagnostics - Looking to raise between $3.5m - $7m at 12.5cents to Accelerate Developments
Two words - ACCELERATE DEVELOPMENT
New holders,existing holders and potential new investors need to realize just like a gold mine has a mine life - ADO has a "mine life" with their patents.
What I am saying is :
Lets just round it to say 20 years of patent protection for the Mixngo technology.
So each year that ticks by that revenues are not at full tilt the company hasn't maximised the full value of the patents.
My view is this capital raising being undertaken now does 2 main things.
1. Institutions come on board as shareholders - This is what the registry has been missing - If 2 or more support ADO then this will be great moving forward.
2. Accelerate progress - Lets use these two big deals with the POC's as an example - Geoff has stated "In excess of $10m pa" for each one of these - so a combined MINIMUM $20m pa in annual royalties to Anteo Diagnostics.
What if this money now brings forward these big revenues so that we get 3-5 more years at full profits at the back end of the patent life?
This compounding effect of revenue growth over time is very important.
This tells me that BIG deals are being finalized and the company is very confident they will go ahead and by raising money now will help bring those revenues forward and give shareholders a much greater return on their investment in a shorter period of time and for a very small short term dilution.
So for a few million raised now - which is next to nothing you get a tiny amount of dilution and institutions on board and greatly improves the return on that money invested now over the longer term.
Fast forward 6 months and IMO there will be multiple deals in place and the share price will be much higher and with much greater support.
Lets just wildly speculate for a moment - Imagine that in the final 3 years of patent life the revenues for ADO are $100m pa - Now it may sound crazy to some but a capital raising now for say $5m that accelerates the developments of projects now could see a longer term return of $300m more in royalties to ADO (Final 3 years at $100m per year). I know this is extreme long term forecasting on modeling for potential deals but this is how I am looking at the long term strategic value of this raising.
This will also bring with it research reports to help new investors understand the potential for the company and a better understanding of the science behind the technology.
Thoughts and comments?
Disclosure : The author holds shares in this company. This research is not a recommendation to buy or sell shares in this company. The author may at any time buy or sell shares without notice. Please do your own research