NOR 0.00% 2.5¢ norwood systems limited

Analysis of priority offer and the future of NOR

  1. 1,225 Posts.
    lightbulb Created with Sketch. 108
    Wow that's been fun day.

    Even had a cameo from Nooze and sad to see Arthur cashing in his chips.

    Ok so where are we now

    On the 15th of June NOR hit the market with CR planed for 3.5 Million dollars

    The aim was to fil " targeted baseline budgets until mid 2017 "

    http://www.asx.com.au/asxpdf/20160615/pdf/437x16lfbdtp31.pdf

    A closer read of the prospectus indicated that NOR intended to raise 4-4.5 million.

    3.5 with 1/3 5.5 options was issued to sophisticated investors on the 23rd of June and this amount has been received and was even oversubscribed at the time ( just before brexit thank god )

    An additional 1 million will be raised as according to priority section 4.4 of the prospectus a minimum of 1 million must be raised through the priority offer ( read retail investors ) within 4 months of the issued prospectus date or the minimum float has not been achieved and " all applicants monies will be returned to them " .

    http://www.asx.com.au/asxpdf/20160615/pdf/437xh9dj639gky.pdf

    I am assuming the 2 offers would not affecting each others viability.  Billy or @shanem would value some input here. According to the release on the 23rd of June 100 million shares have been awarded at 33 million options.

    So lets break this down. Its absolutely vital that NOR fill at least 1 million bangers although they can take up to 1.5 ( fully oversubscribed ) for the future of NOR.

    On the 11th of July NOR released an announcement that stated that the minimum subscription has not been met from the priority ( mum and pop ) offer and that the deadline has been extended to  22 of July with shares set to hit the market on the 27th of July

    http://www.asx.com.au/asxpdf/20160711/pdf/438h414b1dzy3b.pdf


    Well whoop de doo

    How will this play out ?

    There seemed to be a little bit of stress on the forum today. Let's start with the good news.

    NOR has 3.5 in the kitty now thanks to our friendly sophisticated investors.

    If we assume it's nearly dry at present ( some say its better with r and d etc ) and they can cut their advertising cash burn it seems even with no revenue on cash burn of 2 million a quater they should last well into October /November. So lets not hit the big red panic button just yet. There are at least 3-5 months of NOR fully being able to meet it's obligations so it's not crashing just yet and there ann states that it will be enough for " baseline budgets until mid 17 " although one does wonder if base line budget means toilet paper and directors salaries.

    Ok back to the rest of us plebs.

    I wrote recently that even if your remotely bullish on NOR good value can be found with any at market SP over 3 cents by taking up the offer. The problem is that right now the bulls here are a dwindling minority. Extending the priority offer without giving investors a reason to get excited about NOR is not going to help.

    So now we are back to NOR.

    Is NOR a good buy at it's current price  ?

    On the downside WP has not been the viral consumer app we had all hoped and arguably costing more to run than the revenue it generates, Corona is delayed 5 months now and although in Beta still not yet out to market, the VNPT MOU which first hit us on the 21st of March with a 60 day target is now 20 days overdue with no further updates, Android is still having a few minor bugs by the google play reports, they have missed a many key ann deadlines and the communication has been on the lighter side of the detail needed to make informed investments decisions.

    On the upside Corona is now very close as ever to launching with some large companies expressing interest with many great features such as BYOD, cost splitting and a level of control of big data not yet seen in a corporate communications solution, NOR has confirmed the OTT's are progressing well and the presentation on the 1st of July still featured the VNPT logo and they seem to be responding well to market forces to concentrate more on the teleco's and corporate side of their tech. They still have a good niche with commercialising short haul voip tech and their compression algorithms are truly first class. I also think mastering global dynamic pricing puts them in the take over target box as well.

    It comes down to market cap. Is NOR worth 30 million plus right now ? ( remember there are performance shares and options that will also dilute our equity when triggered).

    It also pays to do your own research on what you think the IP of NOR's tech is worth in the event that they cant walk the path by themselves. I maintain it's got to be 15-20 million, big leon thinks its closer to 2 million.

    So back to NOR's immediate future ?

    In my mind it comes down to either NOR's ability to lock in some well paying OTT's next quarter or be able to sell it's short haul voip tech to a teleco in some form. Corona will still be there cash cow but like a cow it will be a slow starter. They need something more juicy to come along next quater. Fortunately the play with big fish. VNPT has a market cap well over 6 Billion dollars.

    Both Bulls and Bears here agree that another CR this year is neither politically or economically possible on revenue promises alone so this will be NOR's last chance to lock in some revenue contracts.

    So by my rational those that are selling over the next few days/ weeks are punting on the OTT's all falling flat, Corona not stable or getting market interest next quarter.

    Those buying or holding are punting on the OTT's coming through next quarter and Corona getting some earnest interest from the market, selling their tech or seeing a take over bid if market cap falls any lower.

    My personal thoughts ?

    I think the NOR will make the priority offer succeed. Mates of management with large holdings could sell a small proportion at market what they own already and buy back on the offer. They would loose investor confidence if they let it fail and they now have 2 weeks to come up with some more detailed information and that coupled with brexit calm should get it over the line.

    So now we are looking at NOR with at least 4.5 million in the bank which should see them financially viable up to at least 2017.

    I maintain the sophs must have been sold a very good story. . At least a few of the Sophs have reason to believe NOR is worth holding for a little longer yet. If they were convinced the options at 5.5 where a good sweetner they must also have been convinced NOR will get there this year.

    There is still the wild card that world wifi and messaging may have something to offer the market too. I think Wifi in particularly if get the price right and structure right could do very well.

    Good luck to all investors that are batshit crazy enough to play with any spec stocks whatever you choice
    Last edited by brentv: 11/07/16
 
watchlist Created with Sketch. Add NOR (ASX) to my watchlist
(20min delay)
Last
2.5¢
Change
0.000(0.00%)
Mkt cap ! $6.512M
Open High Low Value Volume
0.0¢ 0.0¢ 0.0¢ $0 0

Buyers (Bids)

No. Vol. Price($)
1 47924 2.4¢
 

Sellers (Offers)

Price($) Vol. No.
2.5¢ 311095 1
View Market Depth
Last trade - 16.12pm 03/03/2021 (20 minute delay) ?
NOR (ASX) Chart
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.