Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
PART III
The problem the Remuneration Committee have created is that all five of the non-executive directors on the Board, including the Chairman, appear malleable by the two executive directors, or are incredibly naïve in business matters. Consequently, they are incapable in leading the Company in the correct direction. The credibility of the executive directors is also questionable, given the failure to correctly commercialise Parsortix. Hence the decline in the SP from 150 to 24p since May 2022 when the Company obtained a World First with the FDA clearance of the Parsortix system!
The lack of drive in commercialising the Parsortix system demonstrates to the investment market that collectively the directors do not really believe it has a real future, or are incapable of commercialisation! Furthermore, setting the performance level of the LTIP at levels lower than the previous award demonstrate to the investment market that the Chairman and fellow non-executives either have no confidence in the company’s future, or cannot act properly in holding the executive directors to account.
How can the problem be resolved?
Firstly, immediate withdrawal of the LTIP and Staff Share Options awards. A future replacement award must reflect the progress made by the Company since the FDA clearance. Such an award should be placed before shareholders – the next AGM might be suitable. Despite being advisory, if less than 50% of share-holders support the intended awards, it should be appropriately revised.
Secondly, review the composition of the board. Has it the correct balance, particularly commercial and marketing skills and expertise? Should it include, possibly, an executive director with the professional experience and expertise to properly commercialise the Parsortix system? Should the present CEO remain as such, even though he should continue to contribute as an influential Board member? In any event the non-executive element needs strengthening to restore its ability to hold the executive element to account at all times and support the commercialisation effort. Additionally, the Board needs to acquaint themselves with LTIP in other companies if they wish to regain credibility in the investment market and correctly incentivise all employees.
END OF PART III
PART II
There are two main problems to be faced by share-holders caused by the action of the current Remuneration Committee, consisting of the Chairman Garth Selvey, (Chairman of both the Board and Remuneration Committee) and the Non-executive Directors Brian Howlett and Jan Groen, in making the latest award.
Firstly, the company, shareholders are led to believe, is in a far better position than it was in December 2018 when they made the original LTIP award. However, the share price is two thirds of what it was then. Why?
Secondly, the Remuneration Committee have made a new LTIP award of which they cannot honestly claim that, performance conditions, targets and weightings to acquire these free share options will STRETCH the recipients and thus align them with the Company’s strategy to BUILD SHAREHOLDER VALUE?
Analysis shows that previously a GAGR of 40% (SP 104p) was required to obtain 20% of the free shares. Currently, it is only necessary to achieve a GAGR of 20% (SP 44.5p) to acquire the same number of free shares.
That is only 6p over the December 2018 share price some 4 years plus ago, and the potential recipients have until March 2026 to achieve this!
Similarly, with the other levels of the Remuneration Committee’s stretching performance criteria. Previously a GAGR of 55% (SP 143p) attracts 50% of the shares, whilst now only a GAGR of 25% (SP 50p) is required.
To get a 100% of the shares, previously a GAGR of 75% (SP 208p), currently a knock down-offer of a GAGR of only 30% (SP 57p) - close to a quarter of the previous 2018 performance target.
The Renumeration Committee’s stretch criteria is as taut as that of a recumbent elastic band!
END OF PART II
Apologies this is split into three parts.
PART I
In 2018 the Company proposed to introduce a LTIP as a means of further encouraging ownership and aligning the interests of management and external shareholders to achieve key strategic goals and build long-term value. The LTIP provides for awards of options to acquire shares for NIL consideration subject to performance conditions, Performance conditions, targets and weightings to acquire these free share options would be set by the Remuneration Committee at the time of an award to ensure they are STRETCHING and aligned with the Company’s strategy to BUILD SHAREHOLDER VALUE. Awards would vest only to the extent that the performance conditions and targets had been met at the end of the relevant performance period and the holding period is completed
The Long-Term Incentive Plan (LTIP) was “approved” (it was an advisory vote only) as Resolution 2 at the June 2019 AGM.
The first award made under the LTIP was dated 20 December 2018. The Remuneration Committee approved a grant of nil-cost options to Executive Directors over a maximum of 6,000,000 Ordinary shares of £0.10. The LTIP Options had a performance period of three years and an additional holding period of two years.
The performance conditions for the LTIP Options related to the compound annual growth rate (CAGR) of the share price over the three-year performance period. The mid-market share price on 20 December 2018 was £0.385 per Ordinary share. As different levels of performance are achieved the number of free shares that vested increased up to the maximum.
This award period was set to expire in December 2021 (SP 125p) however the June 2021 AGM sought to extend this period – resolutions 4 & 5 the vote was ineffective as it was only advisory and in-any-event the AGM was a closed affair.
The new end date of the extended period is unknown, but whenever it was, unless the share price was above 104p (last achieved c 22 June 2022) the award was worthless.
I wonder if anyone regrets that advisory only resolutions 4 & 5 were passed at the closed June 2021 AGM? They missed out in participating in a freebie of 1.2 million shares!
END OF PART I
The two executive directors get 6 million!
But the undisclosed number of staff, get 9 million?
So two fifths of the share dilution go to the two executive directors that are / have failed the company, whilst the remaining three fifths go to a undisclosed number of staff, who may have been working hard, to make the company a success.
An excellent example of corporate leadership and management style – I don’t think!
Where are you, non-executive directors? Heads above the parapet please – or you might experience considerable difficulty at the next AGM.
This LTIP options award to the executive directors’ stinks, and the non-executive directors appear complicit in agreeing to it!
Have the non-executive directors failed in their duty to hold the executives to account? Clearly, beneficiaries of the collapse of the share price are the executive directors responsible for it!
Reason for the collapse – lack of commercialisation of the product. Caused by - failure of the executive directors to drive forward imperative commercialisation. Are they incompetent or incapable regarding commercialisation?
To be sure, the executive directors are now, unreasonably, incentivised and may now “extractum digitum” with regard to commercialisation. In which case the share price may return back to the July 22 levels, when investors last supported the company’s plea for capital. Are the institutional and private investors happy with that scenario?
I would expect this scheme to be reviewed, at the very latest by the next AGM, with the intention that it either be cancelled, or more reasonably, be replaced with one where the option price is set to reflect that at which capital was raised in July 22.
Happy to be corrected, with explanations, if I am considered wrong.
I believe that the product is incredible, as it is, inter alia, capable of detecting the presence of certain cancers from a blood sample, rather than by an invasive and painful biopsy. That the product has been cleared by the FDA is indicative of its existence. As to where it is made, I cannot say.
Ralph Waldo Emerson, was in the late nineteenth century, attributed with the phrase "Build a better mousetrap, and the world will beat a path to your door." – the inference being that the world knows of the existence of the better mousetrap.
Likewise, with the Parsortix system, until the wider world, rather than the limited academic world, knows of its existence, successful commercialisation will not occur.
It would appear from the adverse comments that there is, rightly, growing dissatisfaction with the lack of progress of this company – despite the incredible product it has produced.
Clearly the fault may lie with the direction given, by the Board of Directors, to the executive management.
From the company’s web-site, the information there claims that Angle plc has a clear strategy to commercialise its Parsortix® technology. This would indicate that Board direction has been given to executive management.
So, what is that strategy?
Setting aside the brief description of the product, its successful evaluation in major cancer research centres, and the FDA clearance, all of which are laudable past achievements, there is nothing in the strategy to enthuse investors, or promote hope in cancer patients.
The undertaking of further pilot and patient studies in developing the technology into potential new areas is to be expected, once initial commercial success has been achieved. Then the effort and expense can be justified on the basis of continually increasing the size and income of the company, and therefore the value of a shareholder’s investment.
There is nothing in the strategy that provides direction to company executives to focus on generating cash-flows from current achievement. Such cash flows provide future working capital, increases the ability to raise further capital, if needed, and demonstrates to shareholders the wisdom of their investment decision.
It is not the key opinion leader and peer reviewed publications that will provide the cash flows generated by purchases of the Parsortix® system! It will be the demand by patients, who are aware that there is a better solution to cancer detection than a painful and invasive biopsy!
Where in the strategy do Angle plc tell the World that there is a better alternative in cancer detection and treatment? How does Angle plc intend to make Parsortix® synonymous with cancer detection as Hoover did with vacuuming
So why has the Board of Directors not focused on commercialisation and the generation of cash flow – it is not mentioned in the current publicly available strategy.
The current board of directors has 7 members 5 of whom are non-executives. Non executives are charged with preserving the interests of shareholders by holding the executive too account.
Perusal of the web-site biographies of the Board of Directors indicates that there is a worthwhile amount of experience, and expertise, at Board level, sufficient to make this company fly – that it has a world-beating solution in cancer detection with the potential of much more to come.
Either the non-executives are failing in their duties or cannot function properly, possibly being in awe of the CEO and, or, the Finance Director, or for some other reason?
I look forward to a proper focus, by the Board of Directors, on generating cash flow in the very near future.
Otherwise, it will have to be considered a
Change of Holdings in CRS.
Relevant?
Reported in the DT - 25 February
A new blood test for prostate cancer could be the most accurate yet, sparing tens of thousands of men from invasive procedures.
Experts said the breakthrough offered “great promise” for the detection of the disease, which is the most common cancer among men in Britain.
These tests, which work by detecting circulating tumour cells that are released by malignant growths, were able to correctly identify 91 per cent of cases of the disease, without any cases being wrongly found positive.
Researchers said the test called the Trublood Prostate developed by Datar Cancer Genetics had a high detection capability across all stages of the cancer, with the strongest capability shown in the most aggressive types of disease.
CSVP
You can’t have three chief executives!
You have one chief executive – responsible to the Board for the correct discharge of the company’s chief executive’s duties. The chief executive could also be a director of the company in which case they would be an executive director.
Likewise, you can have company employees directly exercising control over the company’s activities who are also directors of the company, and they are therefore also executive directors.
The board, if proper governance is being followed, should have directors who are not employees, and do not exercise managerial control over the company. These are non-executive directors. Their main purpose is to hold the executive directors to account in regard to managing the company in the best interests of the company owners – the shareholders.
Hope this provides some clarification. Happy to be corrected by any pedant!
Hypocrisy?
That wasn't a recommendation.
It was a simplistic explanation that even the simplest of investors could understand, that buying HUR on Monday would entitle the purchaser to any dividend. Time for you to take a holiday back in Stanley before you destroy all your credibility; we-thinks!
From the DT
"the deployment of Enhertu, a breakthrough breast-cancer drug which has been shown to extend life expectancy in the sickest patients by binding to tumour cells and delivering precision chemotherapy."
https://www.telegraph.co.uk/business/2023/01/27/meet-scientist-working-eliminate-terminal-cancer/
From the DT. - What might be the impact on TRMR?
Google is being sued by the US government, which wants to break up the company’s core advertising business.
Unveiled on Tuesday night, the US federal government lawsuit alleges Google abuses its dominance of the £488bn global online advertising industry.
“Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies," said the 149-page complaint, filed by the Department of Justice in a federal court in eastern Virginia.
Deputy US attorney general Lisa Monaco added: “In pursuit of outsized profits, Google has caused great harm to online publishers and advertisers and American consumers”.
Google has faced repeated accusations for years that its sheer size, at $1.27 trillion (£1.02 trillion), means it can exert undue influence on global digital advertising markets.
A Google spokesman responded to the lawsuit by saying the US government was “doubling down on a flawed argument that would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow”.
Google’s online advertising business accounts for about 80pc of its total income. Those digital ads are mostly displayed on its search engine as well as its YouTube video streaming website.
The DoJ lawsuit is the first to explicitly seek a break-up of Google and will draw comparisons with the EU’s pursuit of Microsoft under the bloc’s competition laws in the 2000s.
Britain’s Competition and Markets Authority is among other global regulators with active investigations into the company’s business practices. UK regulators are investigating whether Google, together with Apple, are distorting competition in internet browsers.
https://www.telegraph.co.uk/business/2023/01/24/us-government-sues-google-attempt-smash-advertising-dominance/
?
Labour will end North Sea investment, says Sir Keir Starmer
https://www.telegraph.co.uk/business/2023/01/19/labour-will-end-north-sea-investment-says-sir-keir-starmer/