registerme
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Post by registerme on Jul 18, 2018 13:29:34 GMT
I've had a quick run through the docs and have three initial questions I'd like to hear people (including ablrate ) opine on:- 1. Whats the value of our security if the patent application is challenged or rejected? 2. What sort of product guarantees are offered and how many times have units needed replacing? 3. What sort of buildings / contents insurance reductions are associated with the product being installed?
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Post by Deleted on Jul 18, 2018 13:32:14 GMT
interesting docs, looks like a previously bankrupt guy and his mate have a growing business that is in danger of overtrading. The company's market is based on largish customers and if any one walked away or they hit a quality problem it could be nasty. There are a lot of players in this field eg
etc but after Grenfell the market is focused
The real question for me is "is the patent worth £2m?" Clearly the document in the enclosures thinks it is worth £1.5 to £2.0m.
Thoughts anyone?
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Post by westcountry on Jul 18, 2018 13:37:58 GMT
I have another question on this loan for ablrate - what is the net worth of the personal guarantors please? Previous loans have had this info in the borrowing proposal, but I can't find it in this one.
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Post by westcountry on Jul 18, 2018 13:49:00 GMT
Also ablrate, the borrowing proposal mentions on page 15 that Natwest has charges over i**** Ltd as part of providing the company with an overdraft & credit cards. Does ABLRate's charge over i**** Ltd rank second behind NatWest's charge?
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snowmobile
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Post by snowmobile on Jul 18, 2018 13:53:28 GMT
ablrate the document 'Financials - FY Accounts 2017 i***** Ltd' appears to be blank without numbers.
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jsmill
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Post by jsmill on Jul 18, 2018 13:54:14 GMT
I've had a quick run through the docs and have three initial questions I'd like to hear people (including ablrate ) opine on:- 1. Whats the value of our security if the patent application is challenged or rejected? 2. What sort of product guarantees are offered and how many times have units needed replacing? 3. What sort of buildings / contents insurance reductions are associated with the product being installed? Agreed on those questions registerme although I think the answer to the first depends on whether they have been able to scale the company sufficiently to have significant first mover cost advantage at that point. Couple of other points on the patent process. The report states "Typically it takes around 18 months for the patent to be published". This is misleading. It happens automatically after 18 months. Government's basic guide to the process below. Also worth noting that once it has been published this doesn't mean you can sue anybody for using it. Within six months of the publication the company has to ask for a "Substantive Examination" of the patent application, the process by which you basically have to convince the UK IP office that the invention is worthy of a patent. From my research it typically takes around 4 years from the date of application to obtain a patent although can be as quick as 18 months if the business is proactive in its responses and the invention isn't complicated. No idea whether this particular one constitutes "complicated" or not!
link
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seb8072
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Post by seb8072 on Jul 18, 2018 13:55:58 GMT
I would have thought valuing a patent is more a black art than valuing most other types of security. If someone thinks they can make a successful business of it or stop someone else from doing so I suppose it could be worth a fair bit. On the other hand if no-one has a use for it or some new technology renders it obsolete then it's probably worth nothing.
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Greenwood2
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Post by Greenwood2 on Jul 18, 2018 14:07:06 GMT
It's only a pending patent, so may never happen.
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sj
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Post by sj on Jul 18, 2018 14:11:19 GMT
I feel that relying on the hypothetical future value of a (pending!) patent is far too high a risk to take - I am taking the value of the patent to be zero and looking at the remaining package as the security. Despite my feelings about the patent I will still be investing a small sum for the sake of diversification.
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Post by Deleted on Jul 18, 2018 14:15:45 GMT
Sure, I understand the patent application process, thanks
I found this which gives a hint at the size of the fire suppresent water mist market
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sapphire
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Post by sapphire on Jul 18, 2018 14:17:02 GMT
I have some questions on the basis of the 'Interest Payable' amounts mentioned in the 3 year financial projections.
The 3 year financial projections state 'Interest Payable' of £38.4K, £57.6K and £57.6K for years ending Mar 19, Mar 20 & Mar 21 respectively.
1. What are the assumptions as regard the amount of loans outstanding towards which this interest is expected to be paid?
On the basis of a £1 million loan being funded via Ablrate and an overall expense of 20% p.a. in servicing this loan, the above amounts for 'Interest Payable' do appear to be under budgeted - and so ostensibly the Net Profit overstated. (The loan terms in the 'Borrowing proposal' states that the borrower is paying 13% p.a. to lenders and 0.583% per month i.e. 7% p.a. 'Service fee' to ablrate so overall the borrower is paying 20% p.a. towards servicing the loan. Plus an Admin fee of 3.2% - presumably one off, initially?)
2. Is the Ablrate 'Service Fee' included in the 'Interest Payable' amounts mentioned?
3. I understand that the Ablrate loan is amortising, so expect the interest payable to decline over the years (assuming no additional loans are raised elsewhere) so why is the 'Interest Payable' amount for Mar 21 (£57.6K) the same as Mar 20? Are other loans to be raised elsewhere assumed in these Financial projections? If so, details (Interest rates, seniority etc.) of these other loans would be helpful.
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blender
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Post by blender on Jul 18, 2018 14:37:41 GMT
I feel that relying on the hypothetical future value of a (pending!) patent is far too high a risk to take - I am taking the value of the patent to be zero and looking at the remaining package as the security. Despite my feelings about the patent I will still be investing a small sum for the sake of diversification. This is a wise approach, imo. The valuation of the IP is not based on an independent assessment of the potential market and competing products, but just on the projected performance of the company. The holding company simply holds the IP. If the company fails, which is what the security is for, then there is just the value of it's IP to others - plus the unquantified value of the guarantees of the two directors and shareholders. However, the business opportunity is there in the current climate. With a great deal more info it could be an interesting venture capital opportunity. It is good to see a new borrower and a radically different business.
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macq
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Post by macq on Jul 18, 2018 15:22:48 GMT
Has to be said that the London office on the web site looks less impressive when seen on google maps unless a lot of work has been done in the last few months since picture or i am looking in the wrong place
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sarahcount
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Post by sarahcount on Jul 18, 2018 15:25:41 GMT
With a great deal more info it could be an interesting venture capital opportunity.
Which would be fine if we were getting venture capital returns.
I might take a small punt but would be treating it as a FC style unsecured loan.
Pleased to see a new borrower but what we really need is sound security that would cover the loan in the event of default.
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baldpate
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Post by baldpate on Jul 18, 2018 15:30:36 GMT
Also ablrate , the borrowing proposal mentions on page 15 that Natwest has charges over i**** Ltd as part of providing the company with an overdraft & credit cards. Does ABLRate's charge over i**** Ltd rank second behind NatWest's charge? As I understand it, the Ablrate loan is to the holding company, i**** (H*******) Ltd, which owns the IP (effectively its only asset, and our main security). There are at present no other registered charges against this company, so Ablrate's should be a 1st charge. It is over the trading company - i**** Ltd - that existing charges are held by the banks.
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