Rat's rant: What's hot, what's not and ... Jimi Hendrix

By Rat's Rant. Published at Sep 19, 2019, in Market Wrap

Do you know that on this day in 1970 the great American rock guitarist, singer, and songwriter Jimi Hendrix passed away.

James Marshall 'Jimi' Hendrix’s mainstream career lasted only four years, but he is widely regarded as one of the most influential guitarists in history and one of the most celebrated musicians of the 20th century.

Some of today’s stocks would love to be as hot as Jimi in his prime. That’s certainly what they are aiming for.

What’s hot

Azumah Resources Limited (ASX:AZM)

Azumah closed up 100% to finish at 2.8c on $4.6m stock traded. They received an unconditional all-cash offer to acquire all outstanding AZM shares for 2.8c. The offer came from IGIC Pte Ltd, (Ibaera) who own 9.21% of Azumah already.

This includes a relevant interest in 32,381,683 Azumah Shares (approximately 3.31% of Azumah Shares on issue) acquired on-market, and 36,629,810 Azumah Shares (approximately 3.74% of Azumah Shares on issue) acquired as a result of entering into a pre-bid acceptance agreement with Ausdrill International Pty Ltd.

Ibaera Capital provides the funding to help management teams advance new mines to construction through enabling the acceleration of business strategies by removing the funding challenge.

Founded in 2012 by executives from some of Australia's leading mining companies, Ibaera Capital works with existing management teams to take projects from exploration through to construction.

It's not one I follow, but details on the bid are listed below for those that are interested.

IGIC Pte Ltd (Ibaera) launches A$0.028 unconditional all-cash Offer for all Azumah Resources Limited shares

Ibaera has lodged a Bidder’s Statement today with the ASX for an unconditional all-cash Offer to acquire all outstanding shares in Azumah Resources Limited (Azumah) (ASX:AZM) for A$0.028 per share (Offer).

Offer Highlights:

  1. The Offer represents a significant premium to Azumah’s historical trading prices. Based on the price of Azumah Shares up to and including 17 September 2019, the Offer represents a premium of:
    • 100% to $0.014, the closing price of Azumah Shares on 17 September 2019;
    • 84% to $0.015, the 1 month Volume Weighted Average Price (VWAP) 1 of

Azumah Shares;

  1. The all-cash Offer provides Azumah shareholders with certain value;
  2. The Offer is unconditional and provides Azumah shareholders with payment certainty;
  3. As part of the Offer, Ibaera already has a relevant interest in 90,169,123 Azumah Shares, representing approximately 9.21% of Azumah Shares on issue. This includes a relevant interest in 32,381,683 Azumah Shares (approximately 3.31% of Azumah Shares on issue) acquired on-market, and 36,629,810 Azumah Shares (approximately 3.74% of Azumah Shares on issue) acquired as a result of entering into a pre-bid acceptance agreement with Ausdrill International Pty Ltd;
  4. Accepting the Offer removes the material risks associated with remaining an Azumah shareholder, including likely material ownership dilution.

The Offer also represents a 100% premium to the recent capital raise completed by Azumah on 12 July 2019, in which a total of 196,428,739 fully paid ordinary shares, or approximately 20% of the pro-forma Azumah share register, were issued at A$0.014 per share.

The Wa Gold Project (the Project) and its prospects for development have been improved materially in the short time that Ibaera has been involved as a joint venture partner in the Project.

Ibaera currently holds a 42.5% interest in the Project and as announced by Azumah on 11 September 2019, has agreed to contribute an additional US$2.25 million of funding for Azumah Resources (GH) Limited (AZG) and the Wa Gold Project in exchange for a further 4% interest in AZG upon the additional funds being fully expended.

Antisense Therapeutics Limited (ASX:ANP)

ANP closed up 64% to finish at 7.7c on $3.1m stock traded. The reason was because they have advised that a review of the preliminary data from the 6 patients who have completed their 24 weeks of dosing in the Phase II clinical trial of ANP’s immunomodulatory therapy, ATL1102 for Duchenne Muscular Dystrophy (DMD) therapy, is indicative of a positive drug effect of ATL1102 at the dose tested both at an immunomodulatory (i.e. effects on relevant immune cells) and disease progression (i.e. effects on muscle strength and function) levels.

In layman’s terms it sounds as though the drugs do work....

It's not one I follow, nor do I have much value add, but some details on the news are listed below for any doctors, biotech lovers or phase 2 flippers.

Positive preliminary results from ATL1102 for DMD Phase II trial

·Data Safety Monitoring Board recommends continuation of the trial with no safety concerns

·Preliminary data from 6 month dosing is indicative of positive drug effect at dose tested

Antisense Therapeutics is pleased to advise that a review of the preliminary data from the 6 patients who have completed their 24 weeks of dosing in the Phase II clinical trial of ANP’s immunomodulatory therapy, ATL1102 for Duchenne Muscular Dystrophy (DMD) therapy, is indicative of a positive drug effect of ATL1102 at the dose tested both at an immunomodulatory (i.e. effects on relevant immune cells) and disease progression (i.e. effects on muscle strength and function) levels.

ATL1102 is an inhibitor of CD49d expression on certain immune cells (e.g. T cells). It has been reported that patients with DMD who have a greater number of T cells with high levels of CD49d on their surface have more severe and rapid disease progression. ATL1102 is being developed as a novel treatment for the inflammation that exacerbates muscle fibre damage in DMD patients, currently treated with corticosteroids. Corticosteroids have a range of serious side effects when used for a prolonged period as required in DMD.

The primary endpoints of the trial relate to the safety and tolerability of ATL1102 with the efficacy of ATL1102 in DMD assessed in terms of its effects on disease processes and progression. With respect to the safety related trial data, no Serious Adverse Events have been reported to date. The Data Safety Monitoring Board have recently evaluated the safety data and have recommended continuation of the trial with no safety concerns. It is important to note that this is the first occasion ATL1102 has been dosed for an extended duration (6 months) in this patient population of non-ambulant DMD patients and so the Company expects such safety observations will be important support for the proposed longer dosing in a Phase IIb trial.

DXN Limited (ASX:DXN)

DXN closed up 28% to finish at 7.4c on $510k stock traded. There was no news in the market, but they were issued a speeding ticket from the ASX. The company said this could be due to the opening of one of it's Data Centres which was announced a few days ago, otherwise they have no idea why the stock was up so much on much larger volume than usual.

DXN Limited designs, builds, owns and operates data centres. Offering integrated, customised and tailored solutions to clients, DXN provides businesses with the option of delivering solutions to site through containerised modules, or space in DXN’s modular colocation facilities to suit technical specifications and operational requirements.

Some details on the Sydney Data centre are listed below:

Sydney Data Centre Officially Opened

Pre-fabricated modular data centre specialist, DXN Limited is pleased to announce the data centre at Sydney Olympic Park was officially opened on Friday 13 September 2019 by the Hon Paul Fletcher, Minister for Communications, Cyber Security and the Arts.

Mr Matthew Madden, CEO of DXN Limited, said “ the world-class data centre, dubbed DXN-SYD01, is a great example of the application of the prefabricated modular techniques developed by DXN to meet the growing demand for modular data centre space in an environment that is scalable, flexible and affordable.

“DXN-SYD01 caters for the spectrum of computing densities in an environment designed for world class reliability, telecommunications and cloud connectivity and state of the art security. Our modular building block approach allows us to build to any density and quickly scale to meet demand without any compromises on reliability or quality.”

Commenting on the opening of the Sydney Data Centre, Federal Minister for Communications, Cyber Safety and the Arts, the Hon Paul Fletcher MP, said: “The Morrison Government is focused on connecting Australians so they can benefit from innovations enabled by the completion of the rollout of the National Broadband Network next year, and emerging technologies including 5G. The building of this new DXN data centre has the potential to provide considerable benefits for consumers of data services in terms of greater speed, efficiency and reliability.”

DXN-SYD01 was built using a prefabricated construction method that reduces the on-site labour requirements, time to deploy and improves quality. This approach is extremely well suited for the construction of Edge data centres and is also flexible enough to be used on a larger scale. The modules were all prefabricated in DXN’s manufacturing facility in Perth, Western Australia using a vertically integrated manufacturing process.

Mr Madden said, “The modules produced by DXN are the perfect solution for Edge data centres. In fact, we have several deployments of Edge DC’s in Australia, Africa and the Asia Pacific region, which use the same technology, construction techniques and leverage the experience we have gained in building DXN- SYD01.

“The use of modular technology to build a data centre of this size validates the concept of scaling to meet demand in a typically capital-intensive industry. Taking a modular approach also allows the company to match capital requirements with capacity sold.

“Because we own and control the design and build of our DC's and Modules through an integrated supply chain, we enable a ‘capital light’ approach, which delivers the lowest cost per MW in the industry and allows us to efficiently deploy more data centre solutions on the Edge,” said Mr Madden.

Betmakers Technology Group Limited (ASX:BET)

Betmakers closed up 23% to finish at 9.8c on $369k stock traded. There was no news, however earlier in the week they released an announcement about a deal they have done with another listed punting stock called Points Bet Limited (ASX:PBH).

BetMakers will provide its racing channel, featuring customised pricing technology, data display overlays and live vision, for PointsBet to offer their wagering customers the ability to watch over 2,000 races each week on its website and mobile app.

I know the CEO pretty well so it's nice to see it's all starting to come together for him and the rest of the team.

Some details on yesterday's news are listed below:

POINSTBET LAUNCHES BETMAKERS’ LIVE INTERNATIONAL RACING CHANNEL

  • Customised ‘POINTSBET RACING CHANNEL’ live on website and App
  • BetMakers International racing solution includes races from the US, UK, Ireland, Mexico and Canada
  • Up to 2,000 International races per week live streamed on PointsBet’s Australian platfor

The Board of BetMakers Technology Group Ltd is pleased to announce it has launched its customised racing channel with wagering operator PointsBet Holdings Limited (ASX:PBH).

BetMakers will provide its racing channel, featuring customised pricing technology, data display overlays and live vision, for PointsBet to offer their wagering customers the ability to watch over 2,000 races each week on its website and mobile app.

BetMakers’ racing channel, which is currently live streaming more than 2,000 races per week from international jurisdictions including the US, UK, Ireland, Mexico and Canada has now been fully integrated with PointsBet’s web platform and digital apps and is now available to their punters in Australia.

As revenue is generated depending on customer turnover, the Company is unable to establish if this agreement would have a material impact on the Company.

PointsBet CEO, Sam Swanell commented: “We are excited to see the new racing channel on our Australian platforms. We are always looking for ways to improve the offering to our clients and now our punters are able to watch and wager on a vast array of international racing events directly from our website and app.

“BetMakers are our preferred racing supplier and they have proven over many years they are leaders in innovative wagering technology for the global racing industry.”

BetMakers Technology Group, CEO Todd Buckingham commented: “We are very happy to see PointsBet go live with their new PointsBet Racing Channel. They have built in the customised solution very quickly which is testament to their tech team and how quickly they can get a product to market.

“PointsBet is one of Australia’s fastest growing bookmakers and it’s great to be working with them to deliver their racing solution.

“BetMakers work with Rights Holders from around the world to deliver racing content to their contracted operators. Commercially, BetMakers is remunerated by the Rights Holders, while the operator has a commercial agreement with Rights Holders. It’s easy to understand how this is winning solution for all parties involved.”

I may or may not be in the Points Bet corporate box at Randwick this Saturday with my little mate The Captain and maybe even ‘Dan Dan the punting man’. Who knows maybe even Todd from Betmakers might receive a call now.

Cynata Therapeutics Limited (ASX:CYP)

Cynata closed up 22% to finish at $1.73c on $2.69m stock traded. The reason: they announced that FUJIFILM Corporation has exercised its license option in graft-versus-host disease (GvHD).

The exercise of the license option follows the successful completion of the Phase 1 clinical trial of CYP- 001 in GvHD (announced to ASX on 30 August 2018), where all safety and efficacy endpoints were achieved.

It looks like pretty bloody good news for CYP shareholders and I do know the CEO Dr McDonald has been working on this for a long time. From what I have read about the deal, the wait has been well worth it.

So well done to Ross, Doyley, The Weed Window Washer, JP & anyone else that owns a few.

Some details on today's news are listed below:

Fujifilm Exercises License Option in GvHD

Cynata Therapeutics Limited, a clinical-stage biotechnology company specialising in cell therapeutics, is pleased to announce that FUJIFILM Corporation has today exercised its license option in graft-versus-host disease (GvHD).

The exercise of the license option follows the successful completion of the Phase 1 clinical trial of CYP- 001 in GvHD (announced to ASX on 30 August 2018), where all safety and efficacy endpoints were achieved.

Key highlights of the transaction

  • Fujifilm is granted an exclusive, worldwide license to develop and commercialise Cynata’s lead mesenchymal stem cell (MSC) product, CYP-001, for the prevention and treatment of GvHD in humans
    • CynatawillreceiveUS$3mcashfromFujifilmasanupfrontfee.
    • Fujifilm will bear responsibility for all costs of any further product development activities in relation to GvHD, along with responsibility for regulatory submissions and commercialisation.
    • Then on-dilutive up front payment of US$3m will lengthen Cynata’s cash runway and support further investment in the upcoming Phase 2 trials in critical limb ischemia (“CLI”) and in osteoarthritis, along with other potential future clinical programs.
    • Cynata will potentially receive additional future milestone payments from Fujifilm totalling up to US$43m based on successful attainment of certain industry standard product development and commercial milestones, the first of which is US$2m on completion of the first Phase 2 clinical trial in USA, UK or Japan. Subsequent milestones are completion of Phase 3 clinical trials (US$3m), submission of applications for regulatory approvals (US$12m), acceptance of geographic marketing authorisations and first sales (US$16m) and extending the indication (US$10m).
    • Cynata will receive a 10%royalty on all future product sales if the licensed product is successfully commercialised in any country in which any licensed patents are granted or pending.
    • Having sub-licensed certain patent rights licensed-in from the Wisconsin Alumni Research Foundation (“WARF”) in respect of Cynata’s CymerusTM technology to Fujifilm, Cynata will be required to make a one-off cash payment to WARF of US$10,000. Cynata is also required to pay WARF a mid-single digit percentage royalty on Fujifilm product sales and 30% of other amounts received from Fujifilm, including in respect of milestone payments.
    • Both Fujifilm and Cynata have rights to terminate the license under certain conditions such as material breach and bankruptcy and failure to use reasonable efforts to achieve certain specified milestones. The agreement also includes limited mechanisms for potential royalty adjustment on termination of the WARF Head License, entry of a generic competitor or in-licensing third party enabling technology.

·Fujifilm and Cynata will enter into a separate agreement for the supply of product by Cynata for certain future product development activities at cost plus a moderate doubt digit manufacturing margin

·The endorsement by Fujifilm of Cynata’s Cymerus platform supports the continued commercialisation of Cynata’s cell therapeutic products in other indications, including CYP- 002 for critical limb ischemia (CLI) and CYP-004 for osteoarthritis.

To facilitate Cynata’s ongoing partnering efforts certain amendments have been made to the license agreement between Cynata and WARF, particularly in relation to sub-sublicensable sub-licenses under the WARF patents and extending certain interim development milestones, whilst not changing the current milestone for obtaining approval from the U.S. Food and Drug Agency (or an equivalent foreign agency) in 2026.

Dr Ross Macdonald, Cynata’s Chief Executive Officer, said, “Fujifilm’s decision to exercise its license option in GvHD is a clear validation of our Cymerus platform technology solution for manufacturing MSCs at scale. We now look forward to Fujifilm taking this product through further clinical development activities and subsequently to market.”

What’s not

In case you are wondering I am the only thing that's Not Hot today, a few stocks were down but nothing outrageous and I've had a long few days.

What’s doing?

I caught up with the CEO of a company called Crowd Media Limited (ASX:CM8), Domenic Carosa.

Domenic has recently conducted a restructure of his business and is hoping to kick a few goals in the not too distant future.

Crowd Media Holdings Limited (ASX:CM8 & FWB:CM3) is a digital media, content and technology platform company with two platforms;

Crowd Media

- Crowd Media manages more than 250 social media marketing campaigns each month reaching millions of social media users leveraging the Company's proprietary technology platforms

- Crowd Media reaches millions or social media users through popular channels and social media influencers with vast following.

Crowd Mobile

- Crowd Mobile sells mobile phone related services and apps on social media to over 50 countries worldwide, successfully operating for over 7 years.

Revenue for FY19 from ordinary activities was A$23,918,776

In the past 6 months, Crowd Media has:

- Completed a restructure aimed at returning the Company to profitability

- Signed a binding Heads of Agreementt with an alliance of strategic European investors, Invincible Consortium (IIC) to fund existing operations as well as develop new businesses. IIC will invest up to A$3.7M across two tranches. The Consortium includes the co-founders of Invincible Brands, Bjoern Keune and Gennadi Tschernow. The Invincible Brands marketing platform reaches over 100 million women and men on social media every month

- Signed up its first client in fast developing cannabis cultivation and CBD oil sector; Elixinol (ASX:EXL)

- Made significant additions to the Crowd Board and Management, with Steven Schapera (co-founder of BECCA Cosmetics, exited to Estee Lauder for AUD $300m) and Robert Quandt (former COO/CFO at Berlin-based Invincible Brands, Europe’s largest and fastest growing influencer marketing company in the beauty and nutrition space). Both Steven and Robert are key contributors to the investment consortium

Crowd Media has released an updated Investor presentation today that's worth checking out.

In summary they have:

  • Executed a major restructure to reduce their cost base to move the company back to profitability
  • Two new Directors including new Chairman Steven Shepera are joining the board. Steven sold his last company Becca Cosmetics to Estee Lauder for $300m a few years ago – so he is well credentialed.
  • Robert is the ex COO/CFO of brand and influencer company Invincible Brands in Germany who helped grow revenue from EUR7m to EUR100m this year
  • Replaced the old VWAP convertible note with a fixed price convertible note so got rid of the “death spiral” convertible note
  • They will present a new plan late November at the AGM which I may or may not be attending.

Go hard.

The Rat.

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