Cordlife Group

[boonsong]

https://links.sgx.com/FileOpen/CGL%20-%2...eID=800986

I extracted the following from the doc : (bold added)

"8. As stated in the Company’s replies to SGX’s queries (announced on 10 December 2023), “certain members of the management team” were alerted by a Company employee in June 2022 that one of its cryogenic storage tanks had been exposed to irregular temperatures for several days in June 2022 (“Incident”). 

9. The members of the management team that were alerted to the incident were laboratory and management staff dealing with the day-to-day operations of the Company. As it pertained to an operational matter, the management team did not notify the Board of Directors."

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I wonder if there is a company SOP specifying what matters need to be escalated to BOD. For such in-depth operational issues of the company, it isn't likely that OPMI is able to assess this type of risk.

Perhaps there is merit in Annual Reports adapting the Risk section of 10-K filing :
https://www.sec.gov/answers/reada10k.htm
"Item 1A - “Risk Factors” includes information about the most significant risks that apply to the company or to its securities. Companies generally list the risk factors in order of their importance. In practice, this section focuses on the risks themselves, not how the company addresses those risks. Some risks may be true for the entire economy, some may apply only to the company’s industry sector or geographic region, and some may be unique to the company."

right now, the management, the board, and even NJXJK could say anything.
but I think now the matter have affected and indulged enough members of the public ... and the CAD and Home Team would do their best and provide us clarity in the end.

[boonsong]

@boonsong,
Trying to save some money on the CEO search? I hope it is just a front for something else because if it isn't, it reflects much worst on the company as a whole. Penny foolish or pound foolish?

@dreamybear,
Putting in "risk factors" making 1st time reading, is a god-send. But if one has been reading the past 10 years of AR showing the same stuff, it becomes quite pointless. Understanding risk and avoiding it altogether are different things. We try to focus on the later to minimize risk.

that and the private placement... I do not have much love for the current board.

[weijian]

This is an interesting fund raise. Based on Cordlife balance sheet ending FY23:

- Zero borrowings with ~82mil cash/investments and 10mil of net receivables/payables. The cash is mainly coming from 73mil of customer prepayments (total contract liabilities), basically customers who paid upfront.
- On its balance sheet, it has recognized 62mil worth of contract assets - future billings for customers who pay in instalments. The company also recognizes a financing income from this, since customers are paying via instalments.

The company gets a float (upfront customer payments) like insurance firms and will be able to earn a return from the float, and the returns are further boosted in a high interest rate environment. On paper, the balance sheet looks robust since they are only waiving off future fees for ~20% of damaged cord blood units - paying back some of the contract liabilities (cash cost) and also derecognizing contract assets (non cash cost). Hence if the company is raising 8mil at "current depressed prices", it does signal some sign of desperate I suppose, even though the financiers came unsolicited. Or would this placement actually help to boost voting power for certain sides since there is an EGM fight in the horizon?

PROPOSED PLACEMENT OF UP TO 51,195,478 NEW ORDINARY SHARES IN THE CAPITAL OF THE COMPANY AT AN ISSUE PRICE OF S$0.16 PER SHARE

Subscribers have agreed to subscribe for an aggregate of up to 51,195,478 new ordinary shares in the capital of the
Company ("Subscription Shares" and each a "Subscription Share") at an issue price of S$0.16 ("Issue Price") for an aggregate cash consideration of S$8,191,276 ("Aggregate Consideration") ("Proposed Subscription").

Each of CGE and Mr Ng had reached out to the Company in March and April 2024 respectively, separately expressing interest in subscribing for new shares in the Company.

https://links.sgx.com/FileOpen/CGL%20-%2...eID=796879

So it does make sense to raise money as Spore ops probably gonna use up much more than it is going to earn in the next few years. With uncertainties towards the future survival of its Spore business and reputation, it wouldn't make sense to repatriate foreign earnings and get the other subsidiaries involved.

Company's Response: 
More than half of the Group's cash and cash equivalents and fixed deposits are situated in India and Malaysia. As most of the cash collected in these two countries relates to advance payments collected from clients based in those countries, the Company considered that it was prudent for the Group to not exhaust the cash in the respective jurisdictions, in order to maintain its ongoing obligations to these clients as well as to ensure sufficient working capital for their ongoing operations. In addition, the repatriation of funds back to Singapore is subject to regulations in the respective jurisdictions.

Despite the current suspension of the Company's operations in Singapore by MOH, the Company continues to incur fixed running costs in Singapore, and is therefore not expected to generate positive cash flow until the suspension is lifted. Given this, the Company is not inclined to compromise the Group's operations in other regions by diverting cash solely to address immediate needs in Singapore. As at 31 December 2023, the Company has cash and cash equivalents of S$7.1 million and fixed deposits of S$6.1 million.

The capital raised by the Proposed Private Placement will be used in part to fund the Company's working capital, which includes ongoing fixed running costs incurred in the Singapore operations, as well as to support the rebuilding of the Singapore brand. It will also serve as contingency reserves for the refund and waiver of annual fees for all affected active clients from High-Risk Tanks and Tank A.

[boonsong]

They don't have exacting plans, they just throw up a nice percentage, and the application to put aside the interim injunction has failed. They receive a notice from MOH this morning as well, but it seems immaterial for now.

After reading their (non) answers, in that announcement, I think my decision to vote them out is already casted in stone.