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Poor Corporate Governance
Todays RNS does not add up.
We are informed that the BoD have continued to issue “Shares for Debt”
Shares issued today 160,136,800 total debt reduced £1,601,368 but when you add up Tony Calamita’s fees £250,000 Ian Munzberger’s fees £252,800 Thomas Roland’s £50,000 Andrew Male’s £129,847 and Antony Joshua’s £268,334 this comes to £950,981. This leaves a balance of £650,387 not accounted for. It is not cash in the bank it is debt reduced but what debt?
Going back to the Interims which were issued on 31/03/22 (for period 6 months to31/12/21) under “Current Liabilities” there were “Borrowings” of £359,216 and under “Non-Current Liabilities” there were “Borrowings” of £152,256 (£511,472)
Now the balance of £650,387 could have been allocated to clear the “Borrowings” of £511,472 but we are not informed what debt was exchanged for shares!
As the BoD have exchanged £650,387 of debt for shares you have to look at what has been RNS’d since the 31/12/21
RNS 4/02/22 Fund Raise of £2,060,00
RNS 22/02/22 Shares for Debt £505,557 but no details of what debt was exchanged for shares, could this have been the £511,472 from the Interims? If it was then there would have been no debt on the balance sheet after the £2 million fund raise three weeks earlier.
RNS 3/05/22 One of the “Investors” in the Feb 2022 fund raise failed to hand over £1.2 million and the Companies Broker resigned (I am not allowed by LSE to mention the Brokers name because if I do my post will be removed) For the record the Broker got Love Hemp to issue an RNS to clarify that they resigned before the 3/05/22 (obviously so they can be seen to have acted honourably, which they always do and never forward sell as that’s against the rules and as the shares were suspended that option on this occasion was not available to them)
RNS 25/08/22 £70,000 fine by AQUIS Exchange because the Company “The Company failed to update the market on the investor’s failure to make payment on the due date and its ongoing attempts to secure the unpaid funds until 3 May 2022. As such, investors had a false impression of the Company’s cash position from the beginning of February until early May 2022.”
RNS 20/09/22 Company pays the £70,000 fine TODAY to AQUIS Exchange. Why 3 weeks later? Short of cash? Also updates shareholders that now not able to list on Main Market, reason being the passage of time that the application has lapsed.
My view would be because the BoD have poor Corporate Governance.
Hopefully the BoD will think about how they have been running the Company and reflect as to why in the last year to June 2021 they can justify their fees. If the BoD were to take a step-back they would have paid the Aquis Fine by reducing their fees.
RKB
Poor Corporate Governance
You have to know which Brokers to avoid, often because in my opinion, they are not working on behalf of ordinary shareholders and they take guidance from their paymasters (the BoD)
An RNS was issued on 13/12/21 headed “Full Year Results for year ended 30th June 2021”
The Final Results were lacking in vital information. They had some bullet points like:
1 Revenue £4.33 million
2 Gross Profit £1.25 million
3 Cash Balance £925K
This RNS was only one page of financial information, you had to visit the Company Website to access the full results.
So why did the RNS not say that the loss for the year was £4.4 million? The BoD presented (along with the Broker’s approval) a Gross Profit of £1.25 million but in reality the Company lost £4.4 million and the only way to discover this is to access this information on the website. This is poor corporate governance in my opinion.
On page 34 of the Annual Results, you will see that “Promotional & Marketing Costs” of £1.4 million. That is excessive for the amount of revenue generated and at the low margin rate. It a child at primary school with basic arithmetic skills could work-out that this is not sustainable (spending this amount to generate sales and visibility)
On page 35 you will see the Directors fees of £205K (watch out for this year’s increase)
An RNS was issued on the 31/03/22 at 17:17 headed “Interim Results”
The RNS was issued after hours when most PI’s have ‘switched off’.
If the BoD were adhering to good Corporate Governance, then the Interim Results would (should) have had at least more detail and released during the day when the Market was fully open.
The Interim Results were not the full picture, only some bullet points like:
1 Revenue £1.7 million down from £2.4 million previously
2 Gross margin 20% down from 48%
3 Increase in Operating Loss £5 million from £1 million
There were a few other bullet points but the point I am trying to convey is that for 6 months, the margin goes down substantially and the Revenue did not increase (it went down by £700K) and the big red flag is the Operating loss increasing by over £4 million to £5 million. (They give reasons for this substantial increase in loses but will the loses continue to increase?)
RKB
RKB
Thanks for those posts, I will look through the figures and try and get my head round them. But yes, the RNS's are/have been very opaque and the financial situation (at first glance) looks dire.
When I have a moment and a calculator I will calculate dilution of my holding. (Oh Joy)
All the best for the New Year
PS Tony Calamita, Group CEO is 'delighted' so that's all good then!!
Such a shame for Mullis and Dyer that they have joined a business from which they will not be able to pay themselves a contrived bonus.
Oh well, the Government will still be pursuing you for your past corporate failings.
Happy new year and let's hope you receive what you deserve; a prison term for starters.