Investor's Champion Blog
Provides refreshingly forthright, independent comment on predominantly small cap companies and specialist investment funds. Informed opinion, based on first-hand research, but pulls no punches in exposing management weaknesses.

Smart Implant Holdings –it doesn’t look like a very smart investment to me

Another one of these pre-IPO offerings came through the post recently.

Smart Implant Holdings has apparently developed a new generation of breast implants that is believed to be safer than those presently available whilst also maintaining a natural feel.

This pre-IPO offering is being promoted by Arc Fund Management.

Why market this to the UK investor

I know nothing about this market and the product may have merit, but there really doesn’t appear much to commend this investment to the UK investor. The business itself is based in South Africa and the so I’m not quite sure why they are looking to raise funds over here anyway.

For investments of this nature it is normal to expect some kind of tax relief to mitigate the risk, however, being an overseas operation there is obviously none in this case.

Ambitious plans

In the face of stiff competition from the giants of the medical world the company has ambitious plans to capture a 9% share of the world market in 3 years. Without having even applied for FDA approval at present this really is ambitious, especially as USA or FDA countries have a c41% of the total market!

Great language

There is some cracking terminology in the introductory note prepared by Company Eye, ‘the small company specialist’.

How about this:

‘The Company plans to implement above line marketing activities based on an overall blue print strategy’-what on earth does this mean!

and

‘Smartplant will be represented either directly or through an outsourced medical representative’-so which is it?

Work is only in process on the application for CE Mark. I question how one can assign a value to a business of c£12m when it hasn’t yet received any regulatory approval. At this stage it is simply an idea!

Apparently Smart Implants are already available in South Africa and are distributed through the company’s subsidiary over there. With a growing reputation in South Africa I can’t understand why they don’t raise funds in that country; surely it would be a lot easier.

‘Company Eye’ also states that the Company has received a number of endorsements from leading cosmetic surgeons and industry commentators, however, none of these are given.

Valuation

The suggested market capitalisation of £12.5m appears to have been plucked from thin air!

The valuation is apparently based on 8 times 2008 pre tax projected forecasts and 3.2 times 2009;why?

Projected turnover for 2007 is £2.7m and for 2008 £6.8m, however, there is no explanation how these numbers have been arrived at.

No new money being raised

Like me, you might be forgiven for thinking that this business is raising more money to develop and commercialise its unique offering. Unfortunately this is not the case and one single shareholder is simply seeking to raise c£1.6m through selling its 12.98% stake.

Why on earth are they selling if the potential is so great?

Discount Offer

The opportunity comes with potential investors benefiting from a 20% to the price investors invested in August 2006 with seemingly an additional 10% bonus from Arc as an ‘expression of appreciation’ to their clients.

Intellectual property (‘IP’) concerns

I am a bit confused about the strength of the IP. The company’s IP is protected through a series of International Patent Cooperation Treaty (PCT) patents, South African provisional patens (Provisional doesn’t sound very final to me!) and South African registered design applications.

It looks a quick premium for Arc

A browse through the accounts section reveals that on 1st March 2007 Arc Growth VCT were allotted 10,257,481 shares in consideration for £150,000 i.e. they paid only 1.46p share only at the beginning of March 2007. A few days later the shares are now being offered at 2.5p and even after all the wonderful bonuses it’s still at 1.80 or a 30% premium to what Arc paid.

On 5th March the Company also allotted a load of shares in consideration for writing off existing debts in Smart Implant. These debts aren’t quantified.

Just to complicate things further there is the usual Isle of Man company in the loop as well.

Exorbitant pay for the Chief Exec

For a company of its small size that is not yet profitable, the Chief Exec’s pay is, in my opinion, ridiculous.

Not only does he collect £120,000 per annum from the Company but he also appears to be receiving a further £48,000 from the Company’s South African subsidiary.

Shareholders should take a stand against pay of this level for a small business like this.


The product may have potential but the investment proposition really doesn’t look very attractive to me.

Author: Blogger AllHomeSecurity | Posted: 8:44 am  
Fellow bloggers, here is an interesting article I found for beginners in the Forex trade industry – hope you find it as useful as I did:

Not sure about what Forex trading means and about the ways of using it and benefiting from its wide range of advantages? Here is a simple FAQ guide that explains the main things you need to know when dealing with Forex trading.

What Is Forex Trading ?

Forex trading, also known under the names of Foreign exchange or FX market is the widest currency market in the world, with transactions summing more than one and a half million dollars every day. Regarding the "location" of the Forex trading market, it should be mentioned that it is an actual over-the-counter market, since trades are conducted between two counterparts.

How Many Trades Can I Make Per Day?

Many traders ask themselves this question, but the answer depends on the amounts of money involved. For example, in the case of small trades, traders can make up to 10-12 transactions per day. Forex trading works quite fast and can be easily operated, plus, it implies no fees and no commissions, so traders are welcomed to operate as often as they want.

Which One Is the Best Trading Strategy?

This is a relative matter, considering the wide range of traders that operate with Forex trading and use diverse strategies. For example, there are the traders who are basically following the economical aspects and who pay a lot of attention to the economical trends of the moments. On the other hand, there are the technical traders, who operate regarding various mathematically-based charts and analysis that help them identify the surest ways to the desired profits.

What about the Risks?

First of all, we are dealing with a currency market, so you should know from the start that there are certain risks involved. But the most common tool that is used in order to get protection from risks is represented by the stop-losses. What is a stop-loss? It basically refers to the fact that a position is automatically liquidated as a safety measure, to avoid dramatic changes of the position. The Forex trading market is the most liquid of all, so executing both stop-losses and limit orders is quite easily. Still, these stop-losses are not guaranteed if dealing with sums over one million dollars.

Who Can Use the Forex Trading Market?

Forex trading market is mainly dominated by powerful investors, banks, brokers and international companies. Besides, these, more and more private investors, dealers and private traders seem to use the Forex trading market.

When Can I Use Forex Trading?

The main advantage of this currency market is the fact that it is a 24-hour market. This means that it can be accessed at any time, from various parts of the world. This helps the investors significantly, considering that they can respond to transactions quite fast and operate with trades when they desire.

Now you know the main things you need in order to start considering operating with Forex trading. Besides great accessibility and rapidity, plus the fact that it is a 24-hour market, Forex trading is also a currency market that implies no commissions and no additional fees, which is always a substantial plus for any trader.
Author: Blogger invest | Posted: 7:58 am  
hi,You have a very good blog that the main thing a lot of interesting and useful! UK investors
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