The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Hypothetically:
I do not know 100% that ForCrowd have sold any of their 54,218,847 shares. I can “guess” that some sales in December and January could have been sold by ForCrowd and I could “guess” that they have sold 13,609,317 and they would have received £34,998. I can also “guess” that if my guess is correct then on paper they would have had a loss of £12,390 and as per the agreement then their loss will be capped at 10% so we have to issue shares for 90% of their loss which is £11,151. If shares are issued at nominal value which is 0.25p or our current bid which is also 0.25p and believe it or not for each of the past 12 business days we have closed at 0.25p
I do not need to “guess” that shares will be issued to ForCrowd at 0.25p for their “loss”. This would mean 4,460,271 would be issued.
So would we see a change on our Shareholder Register? Well we do not do TR1’s so we either wait for an RNS saying FowCrowd have sold some and we have issued some.
FowCrowd had 54,218,847 less “guess” of 13,609,317 add 4,460,271 = 45,069,801 and shares in issue would be 666,831,718 (on the assumption that no other shares are issued at the same time like FG salary sacrifice)
This would mean ForCrowd would have 6.76% (6.7588%) so they would go down from their current 8.19% (8.1856%) There would be no major shareholders dropping below the 3% threshold (Vidacos Nominees Ltd, Luke Johnson or An Idea Lives on Ltd)
Now it has always taxed me as to why we agreed to the ForCrowd “get out of jail free card.” When re-reading the extension RNS from 16th December 2019 FG said “due to the increasingly close working relationship between the two companies, the directors of Clear Leisure have agreed that this extension will be of benefit to both parties.”
Taking a step-back and looking again, let us assume that whoever sold us the 20% of ForCrowd, did not have any cash (spare cash that they could put their hands on) they accepted shares in Clear Leisure and did not really want to sell any of their shares but if they did sell a few and got a few back along with some cash (like £34,998) then they would be able to take almost 10% of the Milan Digital Project (assuming you are an Italian Tax Payer) as per the rules of investing in this Crowd Funding Project of €500,000 (initial funding) Or they could take about 5% each of London & Milan digital twins project and technically they would not have had to dip into their Swiss Bank Account.
RKB
PS I estimate about 30% to 35% of the current shares in issue are with private investors and 65% to 70% are with Very Long Term Holders. You can’t always assume that AIM Rule 26 is accurate or up-to-date because the onus is on the shareholder to inform the Company that they have a disclosable shareholding and some people or companies do not think they need to abide by rules as they are only for the little guys.