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The earn outs are the biggest problem, not just with MJH but other companies as well. If investors are to make informed decisions about the company, they need to be informed on the liabilities. All reports should have details on existing earnouts and progress reports on potential payouts.
NFC acquired a company, Mach49 and apparently agreed an earn out with no financial limit, what was the Nomad doing? Got found out because the acquisition is doing well in the US. In February, they came to agreement to settle at $300m max. Wiped out NFC's profit for the year, still paid a dividend though.

The article came out last Monday, which explains the sp rise on the day, slipped back since. Rising interest rates and other worries, likely to put some sort of brake on housing starts. Have got some BRCK, but not that bothered about adding to yet, as the sp could well go even lower before a recovery.

https://www.thisismoney.co.uk/money/investing/article-11069685/SMALL-CAP-IDEA-Brickability-laying-foundations-future-expansion.html

Article by William Farrington At Proactive Investors For This Is Money

Level of bankruptcies now already at its highest since the 2008 crash. Excepting that crash, worse than at any other time in the last 25 years. The worry is that the number will be even higher by the year end and into next year. Click on 25Y above the graph.

Safer to invest in companies that deal with insolvency.

https://tradingeconomics.com/united-kingdom/bankruptcies

Am out with a decent profit, as it looks as if the company is soaking up cash. When is the next fundraise going to happen? I think the company is heading for an eventual breakup, even if no takeover happens. Good luck to those staying on board.

Actually £4.3m

A £4.3m increase in inventories held on 30 April 2022 to £10.5m (30 April 2021: £6.2m). This increase was primarily in order to secure surety of critical electronic components for delivery of FY 2023 revenues in response to supply chain pressures. As such, the Group sourced component inventory when available, rather than in accordance with normal supply lead times. There was significant component price inflation caused by the constrained market supply, which also contributed to the increased spend on inventories;

From memory about £4.6m spent on increasing inventory to avoid supply chain issues. That should mean no excuses for order shipment delays.

A trading update?

Soon

Charles Stanley are no longer a PLC, having been taken over last year by Raymond James Financial, Inc. A US Financial company listed on the NYSE ticker: RJF .

I wonder who the actual holder is.

A news item on the Beeks website from April 14, I missed. A bespoke, (multi-tenanted?), private cloud system for an outstanding UK payments technology infrastructure provider.

https://beeksgroup.com/news/form3-appoints-beeks-to-underpin-their-payments-technology-platform/

About Form3

Form3 design, build and run the technology that powers the future of payments. Founded In 2016, Form3 set out to revolutionize the world of payment processing and disrupt the traditional payment infrastructure model, with an always on, cloud-native, Payments-as-a-Service platform.

Today, Form3 is trusted by some of the UK and Europe’s biggest Tier1 banks and fastest-growing fintechs to handle their critical payments architecture. Form3 was named Best Cloud Payments Platform 2021 by Paytech and Fintech Finance, Most Influential Fintech Company in 2021 by The Financial Technologist and ranked in the Top European Fintechs to Watch by Sifted 2020.

There could well be the possibility of future Beeks collaboration with Form3. As this company is expanding into the US payments market. They have also advised, on Jul 7, that they been invited by the US Federal Reserve to participate in the pilot program for FedNow, which launches next year.

Beeks are likely to issue an update, on their Full Year, within the next few weeks.

NU, I was tempted to buy back in when the TU came out but decided against it. That said would have got out quickly as I regard CSFS as a hot potato stock now.
The Asia guy, who's looking after the shop for now is on a high enough package. Then there is the presumably previous owner of Capital Currencies, Craig Strong and his staff. Plenty of fixed outgoings, no room for investment it would appear. If Capital Currencies are doing well within Cornerstone, the possible earn out could put somebody in a much more powerful position within the company, meaning more changes to the board. The FD really needs to go in any case, when the timing is right.

A review came out on UK company fundraising and the need to amend the current rules.

https://general-advice.com/uk-review-recommends-overhaul-to-company-fundraisings.html

With a market cap of around £2m, when it should be higher, really does make life difficult for Cornerstone. Anybody know how much JW was earning? Perhaps his departure might have been necessary just to conserve working capital.

NewUncle,

The terms of the acquisition are below.

CSFS said at the time of the proposed acquisition:

>The Acquisition is anticipated to be earnings accretive from the current financial year. It is also expected to expand Cornerstone's presence in its core target market and, in line with the Group's stated strategy, increase revenue generated by direct clients.<

Do you not agree that investors should be aware of how much business Capital Currencies are doing within Cornerstone? The average price that the convertible loan notes can be exchanged for shares is based on the 20 days before their issue. Any qualifying shares to be issued at the same time. An end of year update in January, is likely to involved in these 20 day periods. Do you hope for CSFS to be economical with the truth again, in an attempt to push the share price up before a qualifying earn out?

Terms of the Sale and Purchase Agreement



The consideration payable for the Acquisition consists of £0.586 million in cash on completion subject to customary working capital adjustments with further earn-out consideration payable over the next two years, in a mixture of new ordinary shares and convertible loan notes; the value of which will be dependent on performance and is capped at a maximum total consideration of £3 million.



The earn-out consideration is payable in two tranches:

· on the first anniversary of completion, two times Capital Currencies' revenue for the 12-month period leading up to 31 January 2023, less the amount already paid to the sellers in respect of the Acquisition. One half of the earn-out will be satisfied in the issue of convertible loan notes to the sellers with a 6% coupon interest and the remaining half shall be satisfied by the issue of consideration shares to the sellers.

· on the second anniversary of completion, three times Capital Currencies' revenue for the 12-month period leading up to 31 January 2024, less the amounts already paid (or deemed paid) to the sellers in respect of the Acquisition. The final earn-out payment shall be satisfied by the issue of consideration shares to the sellers.

Any convertible loan notes issued to the sellers under the earn-out payment is for a term of 2 years from the date of issue and the sellers may elect to convert at any time prior to termination date. Any interest is payable quarterly in arrears with the principal repayable at the end of the two-year term. The conversion price per share is at the mid-market price of the Company's share in the 20 dealing days preceding the issue of the convertible loan notes.

The background to this appears to be the purchase of Maxims Casino Club in Mar 2019. Was underperforming, even before pandemic lockdowns. Nothing for EQLS shareholders to be concerned about, imho.

https://www.casinonewsdaily.com/2019/03/23/genting-sells-underperforming-maxims-casino-in-london/

The TU rns looked better with revenue growth of 129% on the previous year. There was a significant omission, however, with no mention of organic growth. For me necessary because of the acquisition of Capital Currencies and the agreed earn out consideration. (see the Jan rns). Any investor concerned about possible future dilution regarding fundraising, would have to factor any implication from the earn out.

Debt is going up thanks to the slow pace of litigation. Critical now against the background of high inflation and rising interest rates. Am not surprised that the decision on an interim dividend is being held back until the H1 results come out. If it was reduced or suspended, would not bother me, as I came round to the thought dividend payment was too high, when money is being borrowed.

RBGP have made a decision to no longer mention any cases as it may interfere with the outcome. That said, it would be extremely beneficial if some cases are concluded with a positive outcome. I believe that the historical success rate is around 86-87%.

Not sure how low the sp could go, below 80p intraday perhaps. With market sentiment currently against the company and with AIM in bear market territory. It could be a while before the sp recovers to anywhere near the highs of last year.

The CA Fund is being liquidated. Has nothing to do with shareholder dissatisfaction as EQLS was a very good investment for the fund. The sale is being well managed by Canaccord Genuity who are finding buyers for the stock. The good news is that the selling of this holding is steadily moving towards completion, without unduly affecting the share price. It is possible that the sale will be completed in the next six months. Assuming that Equals are continuing to grow at a high rate, the demand for shares is likely to exceed the supply. Market forces should then apply, with a significant rise in the sp.

Some very good news

We have had notification of the party involved in buying a very large block yesterday. Let's hope we get a notification from the seller soon.