It was recently announced that MyHealthChecked (MHC) - in which we own shares - lost £2.5 million on sales of £50,000 last year. Yes that is dreadful but this company is now about the future of its Covid and other DNA tests and thus it has raised £3.4 million at 1.75p. It was not completely out of cash so, after costs, it probably has c£3.5 million in the bank. We are told that this was massively oversubscribed which tells you that the sounding out process by the broker was bungled and that it should have priced it at 2p.
But the broker does not care for it gets its 5% whatever the price, so it has £170,000 to spend on coke and hookers. That is a great reward for lazy broking. The cash to the company will be used to launch its current products into the retail sector and develop a pipeline of new products, alongside a smartphone app in order to capture data. MyHealthChecked is looking to increase its headcount to support these commercial activities, more than doubling its team by December 2022 and increasing the required marketing investment to accelerate commercial growth.
The good news is that there are NO spiv flippers in the placing with most shares going to VCTs and others who - for tax reasons - will hold. II Mercia GP and directors Adam Reynolds, Penny McCormick, Lyn Rees and Maddy Kennedy are ponying up £346,500 in aggregate in the Subscription for 19,800,000 new ordinary shares. And Mercia’s EIS fund will put in another £500,000. It should be said that Mercia is doing all bar £46,500 of that and that the board’s contribution is not exactly gobsmacking. But the company now has sound finances and folks should not now worry about that. Moreover, its shareholder list is now really pretty tight and sensible so if there is any retail demand the shares really could motor. I sense more news on the Covid test and its applications in the test to fly scheme will come very soon indeed and that could trigger that excitement as could news of additional DNA test launches.
A few days ago I reminded you all of my explicit average down advice at 0.8p and noted that I had drunk my own medicine heavily in this regard. As then, my view is that when this share hits 3p as it likely will again soon (the shares are already 2p+ mid) you should consider a top slice. But please do not sell all as, in the current climate, the shares could go much higher. Very sensible people are talking about 5p within months, if not sooner.
Filed under: MyHealthChecked plc, Versarien, Zoetic, Castillo Copper, Eden Research, HotStockRockets
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