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Can Oscillate’s turnaround strategy take it on the comeback trail?


Oscillate [AQSE:MUSH], the Aquis-listed, London-based investment company has been living up to its moniker as it has a diverse range of business lines that include investment in psychedelics and medicinal cannabis, natural resources, as well as ‘special situations’.

The company is going through something of a major reorganisation, and recently appointed Steven Xerri, as executive director, who is overseeing the change management process.

Oscillate has been around in one form or another since 2006, having had three name changes. Initially known as Valiant Investments, the company renamed itself Eurocann International in August 2019, and then was known as Discovore between November 2020 and August 2021, before settling on Oscillate.

Fund raising experience

The company was founded by Conrad Windham, who remained as director until 2022. Xerri joined the investment firm in November 2023 and was formerly of Heathrow Airport, where he was Airfield Duty Manager, overseeing the day-to-day operations of the airport. Xerri brings experience of raising funds for both private and publicly listed UK companies and held 4.81% of the company’s share capital when he joined.

In November, on Xerri’s appointment, the company reiterated its investment mandate focusing on special situations: “[…] where it can make a clear contribution to the progress and development of the investment, through acquiring meaningful share holdings and being able to effect board changes.”

Oscillate also said that it was open to the idea of a Reverse Take Over, something it pursued in 2023 with FinTech Hi55 Ventures, but after due diligence walked away from in March.

Subsequently Oscillate changed its auditor from PKF Littlejohn LLP to Edwards Veede, to, as Xerri said: “[a] suite of advisers [that] are suitable for a company of our size and relative simplicity.”

The company from the start of the year cut its cash costs by freezing director’s wages and rewarding its management in shares as opposed to cash to reduce corporate expenditure. Its directors had already committed to buy shares in the open market, in order to closely align management interests with shareholder interests.

Oscillate trimming operational costs

Oscillate has also been trimming other operational costs to preserve as much capital as possible for potential transactions and started the process of liquidating some of its minor investments and placing its treasury in interest-bearing accounts.

The company exited its position in Igraine Plc for GBP66,068 last July. Another investment, LaunchMyCareer Holdings PLC presented a winding up petition to court in August last year. Oscillate had purchased 2.5 million warrants to subscribe for shares in LMCH, with an exercise price of 1p per share in July 2022.

Drawing a line in the sand

In August, to draw a line in the sand, Oscillate proposed voluntary liquidation and dispersal of assets at its Annual General Meeting in August. As it was, the proposal to liquidate the company did not pass and Oscillate continued to operate and execute its reorganisation plan.

Formerly the company had a mandate to seek investments in the developing market for medicinal or therapeutic cannabis derivates, and in biotech companies that seek to find pharmaceutical and therapeutic applications for psychedelic compounds.

Psychedelics are commonly considered to be derived from, but not limited to compounds derived from organisms like the naturally-occurring psilocybin fungus, commonly known as magic mushrooms; ayahuasca, derived from the banisteriopsis caapi vine and psychotria viridis shrub; or mescaline, a naturally occurring psychedelic from the Mexican peyote cactus, which have been used in traditional medicine and religious rituals for centuries. Psychedelics can also be synthesised in laboratory conditions, such as lysergic acid diethylamide.

It is hoped that study of psychedelics could lead to breakthrough treatments in drug-resistant depression, anxiety, addiction and Post-Traumatic Stress Disorder.

Oscillate holds 12.98% of Psych Capital [AQSE:PSY], also traded on Aquis, an incubation and investment firm focused on the emerging psychedelic science and healthcare industry. Part of Psych’s portfolio is data, insights and networking platform for the psychedelic science and healthcare industry ‘Psych’, which the company says has become the industry’s leading portal used by policy makers, scientists and investors.

Psychedelic acquisitions

In November, Psych Capital acquired Israel-based, Short Wave Pharma for GBP3.5m, Short Wave is developing breakthrough therapies using psilocybin fungus and other compounds to address unmet medical needs in mental health, particularly in the field of eating disorders. Oscillate said: “[We] will continue to assess this investment to ascertain an exit opportunity should it feel appropriate and within the planning of [our] own future. In the meantime, [we] remain optimistic at the advances that the Short Wave acquisition represents in the innovative psychedelics space.”

Xerri added: “For the shareholders of Oscillate, the Psych investment represents a solid and meaningful investment in the innovative medical science space and provides an exciting opportunity for what this investment can bring in the short term.”

Oscillate investment revaluation

In it last published results, at the end of August for the period to end-May 2023, Oscillate reported a loss of GBP508,310, up 46% year-on-year, mainly due, the company said, to a revaluation of its investments. The company had around GBP1.2m cash on account, down 38% y-o-y.

Oscillate opened trading at 0.6p on 16th January, down 20% from 0.75p a year ago, but had fallen as low as 0.2p at the end of November.

Oscillate share price chart

Communication has certainly been much improved since the management overhaul and Xerri seems to be laser-focused in getting the company back on an even keel. The company’s announcements about simplicity and focus can only be encouraged, and management’s desire to align their interests as closely as they can with shareholders is a good sign that the new team want to turn the company around.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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