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Nanoco – “Commercial Supply and License Agreement”, but no financials when they’re desperately needed

By Steve Moore | Friday 8 September 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Nanoco (NANO), describing itself as “a world leader in the development and manufacture of cadmium-free quantum dots and other nanomaterials”, has announced a “Commercial Supply and License Agreement”. Oooh, “commercial” hey – what’s the detail?...

The agreement is noted to be “with a US corporation in the field of medical devices” and will see the company “supply film product and other technologies for light therapy products for the treatment of pain, soft tissue injury and dermatologic conditions such as acne and skin anti-aging”. Er ok, what about any financial insight?

None is provided – despite it being particularly pertinent as a trading update last month included that cash burn was £2.6 million since the 31st January half-year, to a £5.7 million net cash position. That, together with it also admitted “the market continuing to develop more slowly than originally anticipated”, saw me conclude that the company continues to look firmly on route to cash crunch ahoy (again) and ask at what price an attempted discounted fundraising?

I also note a note on that trading update from paid researcher Edison, which slashed now current year forecasts. The new forecasts included a loss of more than £7 million and the current cash running out during the year and the note stated that to reach break-even even on a bullshit earnings (EBITDA) basis, “the company will almost certainly need to raise more cash”.

Er, yep! The latest announcement from the company currently sees the shares bouncing a bit having been heading below 20p. However, with the key current question remaining when’s the fundraising?, the stance remains bargepole / sell.

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