There are multiple risks i see fundamentally and sentiment vise.

1. Management ability and willingness to reduce cost of business is minimum- and happy to raise capital at distress price to fund delayed contracts

2. Kate mentioned that procurement approach has changed for EMR and it went into tender process and not every NHS trust going in FY24.

3. Risks are two fold now, probability of them winning the contracts x probability of them winning in required timeframes till balancesheet allow to fund employees.

4. Management and Boards ability to navigate potential difficult macro environment.

5. There were no high hopes for Q2 and Q3 results - sentiments isn't going to turn anytime soon

I would have preferred them to reduce the cost base somehow instead of dilution. History of dilution is very poor...makes it difficult to increase any KPI per share

I just sold my shares at loss and will come back at higher prices once i have confidence that it is self funded.

Wow! This has become wealth transfer machine from shareholders to employees.

Management decision not to reduce staff cost even after delayed contracts is costing balance sheet and shareholders.

https://www.talkinghealthtech.com/podcast/386-what-is-a-fhir-event-platform-vivek-krishnan-alcidion

In the episode of Talking HealthTech, Kate and Martin ( Founder of Olinqua) discuss how their partnership can reduce hospital wait times and overall make things more efficient and Why this is the right time for this partnership.

https://www.youtube.com/watch?v=SDjGrXj5KYU

Doing research to figure out Alcidion's chances of winning NHS contracts for EPR. ( Putting all the info that I can find here and then will see how it all relates and figure out chances - That's the idea anyway!!)

https://www.digitalhealth.net/2023/07/epr-frontline-digitisation-target-declared-unachievable/

https://www.digitalhealth.net/2023/04/what-to-expect-from-epr-transitions-in-2023-and-beyond/

https://www.digitalhealth.net/2023/04/us-firm-cerecore-brings-its-emr-implementation-expertise-to-the-uk/

https://www.uhsussex.nhs.uk/news/early-market-engagement-for-electronic-patient-records-epr-solution-procurement/

https://www.digitalhealth.net/2018/10/hancock-tech-revolution-mandatory-open-standards/

https://htn.co.uk/2023/08/25/news-in-brief-neonatal-epr-launch-in-calderdale-new-funding-for-tech-enabled-care-qualification-in-scotland-patient-support-websites-in-london-and-more/

Alcidion reported its FY23 report

Revenue:

Receipt from Customers

Expense

Operating Cash

No. of Shares

My view:

In the absence of an NHS contract, Alcidion currently looks like a slow growth company. However, I get a sense that Alcidion has significantly hired in anticipation of NHS contracts and because of those contract delays, expense has grown fast compared to revenue.

In one of the calls, Kate mentioned that it would be very shortsighted of her if she started cutting costs and suddenly had NHS contracts and struggled to find the resources to fulfill them.

Although Alcidion hasn't performed that poorly in the absence of NHS contacts - However, I anticipate there will be significant pressure on Alcidion's share price for some time because one of the co-founders ( Ray Blight) seems to be selling his portion after his resignation. He resigned on 30 June 2021 and also Alcidion's previous CFO Collin MacKinnon who retired last year is selling down his portion. ( Highlighted yellow in the screenshot below).

So If Alcidion wins large NHS contact sometime in the next 6 months, that will provide significant liquidity for them to get out ( if they completely want to) and then there will be more buyers than sellers hopefully.

Seems like some sort of process is starting. I am not an expert but wording suits ALC.

https://www.uhsussex.nhs.uk/news/early-market-engagement-for-electronic-patient-records-epr-solution-procurement/

Alcidion announced today that it had signed two Silverlink PCS contract renewals.

Along with this signing, these two contracts also trigger the earnout payment of A$2.8m agreed upon during the acquisition.

An interesting new update is that their current cash on hand is $15.6m Which is $4.5m more than the last disclosed figure as of 31 March 2023 in their 3Q 4C.

So two months of 4th Q have passed and their general expense of Q is ~11.5m so I think it indicates to me that 4th Q receipt will be in the vicinity of ~$15m.

So if we exclude this $2.8m payout, their FY23 operating cash outflow will be roughly 2m or thereabout.

Essentially, if it manages to sign a few big NHS contracts by the end of FY24, the Probability of them being cash flow positive in FY24 is very high.

sentiment currently for this business is very low.

Seems like the perfect setup for better performance compared to the index in my opinion for the next 2 years.

Alcidion released Q3 cash flow and commentary.

I was looking for Cumulative new sales graph which is obviously missing. ( Edit : I will take this as missed by mistake rather than intention as I could see this graph in presentation that was delivered in zoom meeting)

From Q3 FY22

From Q2 FY23

Another issue I find that, It advised the market in Q2 following,

I would expect Q3 to be huge if $5.2m of Q2 is delayed and landed in Q3.

FY23 EBITDA positive will not be achieved.

The only shining light is :

EDIT:

Kate seems a very open and transparent CEO and knows what she is doing. This is more of a confidence in management to deliver what they say. When Kate says that they is delay in NHS contracts - I am more inclined to believe her rather than be cynical.

I will hold my position because of strong and capable management

Just going through Annual report and few things stands out

I am very optimistic about Alcidion's future, but I like to note down the following thoughts for future reference.

1. I always like to see that some component of acquisition by way of issuing shares and escrow it for 2 years to key personal, which in my opinion keeps them honest and gives enough time should handover needed. ( There is an earn-out component for contract resign but a very small portion ) . Need to monitor if Silverlink personals leave after the acquisition.
2. An interesting fact is that, in the last SPP, retail shareholders over-subscribed at $0.32 ( $30m) which they scaled back potentially means that there was no intention of needing that much capital at that point in time ( May 2021). After 6 months of SPP, happy to raise at a steep discount (~22%) which probably means that Management sees it worth rushing through this acquisition even if we have to raise at a heavy discount. ( if that's the case, it can be justified by a quick win by the way of cross-selling or it makes sense in some other way - it should become clear in future - thing to look at probably for next couple of years)