Member Info for Inthetin

You two won't be seen for dust once the 10.44p (or less) goes through.

From yesterday's RNS (apart from the £37.5M inserted in case anyone had forgot):

"Having considered the Revised Proposal carefully with its Financial Adviser, the board of directors of CyanConnode (the "Board") has confirmed to Esyasoft that the Revised Proposal is at a level (£37.5M) that the Board would be willing to recommend unanimously to CyanConnode shareholders, should a firm intention to make an offer pursuant to Rule 2.7 of the Code be announced on such financial terms, subject to agreeing other key terms of Esyasoft's proposal and definitive transaction documentation."

Let's just keep to the facts. The BoD and Strand Hanson (Financial Adviser) would be happy to accept £37.5M.

It is over 12 months since the company has received an order (excluding the piddling £1M order in Aug'25).

Have they given up?

Hi tonyj

I have contacted a 'national' and made progress re finding a firm to deal with a derivatives claim. Re claim, waiting to hear back (i). Is it a runner (ii) Initial costs.

Don't think we've got the numbers re 5% (i.e. 18M shares) and I'm not wasting my time persuading people if they can't see for themselves what's gone on and going on here.

I see gizmo555 has now dropped the 'regs' angle and is now on the Takeover Panel are going to stop it spin.

Under the UK Companies Act 2006, there is NO legal distinction between the duties of an executive director and a Non-Executive Director (NED).

If a board is sued for negligence or breach of fiduciary duty via a derivative claim, the NEDs are just as exposed to personal liability as the CEO.

In the case of CyanConnode, if shareholders believe the board failed to explore other financing options (like a placing) and instead "walked" the company into an Esyasoft takeover, the NEDs could be central targets of a claim.

1. The "Duty of Skill and Care"Under Section 174 of the Companies Act, a director must exercise reasonable care, skill, and diligence. The Standard: For an NED, the law expects the care and skill that would be exercised by a person with their specific knowledge and experience.

The Exposure: If an NED on the CyanConnode board has a background in finance or the Indian energy sector, the court would expect them to have critically challenged the Esyasoft loan terms. If they simply "rubber-stamped" Cronin's strategy without pushing for a placing, they could be found negligent.

2. Why NEDs are often targeted in Derivative Claims.

A derivative claim is brought by shareholders on behalf of the company when the directors refuse to sue themselves. NEDs are often the focus because their primary role is oversight:

Failure to Supervise: Shareholders might argue that the NEDs failed to act as a "check and balance" against the executive team.

Conflict of Interest: If an NED was aware of a conflict of interest regarding the Esyasoft deals and did nothing to mitigate it, they are personally liable for the resulting loss to the company.

3. The "Good Faith" Defense

The main protection for an NED is Section 172 (promoting the success of the company). To beat a derivative claim, an NED must prove they acted in good faith.

The NED's Defense: "We looked at a placing, our brokers told us it would fail or be too dilutive, so we approved the loan to keep the company alive."The Shareholder's Attack: "You didn't actually conduct a formal 'beauty parade' for other investors because you wanted the easy path provided by Esyasoft."

4. Indemnity and D&O Insurance

Most directors are protected by Directors & Officers (D&O) Insurance. However, insurance often doesn't cover "gross negligence" or "dishonesty.

"The Cost: If a derivative claim proceeds, the company's insurance premiums spike, and the directors' reputations are permanently tarnished, even if they aren't forced to pay out of pocket.

If you are a shareholder looking at legal options, the NEDs are often the "weak link." Their job was specifically to prevent the situation you're describing (the "strategic capture" by a single partner). If they failed to document their objections to the loan agreements, they are highly vulnerable.

Plenty for us to get stuck into.

Has a cash crisis been hidden from shareholders?

If so, that is extremely 'naughty' and should be punished. Should we be using the 'F' word to describe it?

FCA should be checking this. It's an easy job.

If it's 50% + 1%, Cyan does stay listed on AIM.

Depending on what happens later, our 5% (if we have it) should strive to get the BoD removed.

If the bid fails/doesn't arrive, the $5.25M ES Loan Note (07/11/25) should be paid off ASAP, using any funds that we hold plus a fundraise from existing shareholders.

IMO, we need to fight with all we've got against this stranglehold ES have over us (thanks to the incompetence or worse) of those in charge.

Hi tonyj

It's really not about "nailing" anyone - it's about righting a wrong.

As there's so far to go for things to start working in our favour, I can't see it happening. However, if I'm wrong I will be the first in the queue to apologise.

I do believe that they are going to try and push this through at 10.44p.

Hi SG

I'm sure you're right.

To be honest, we need to chuck everything at this. A discussion with the solicitor should point us in the right direction. It might require a multi-pronged approach.

Let's see what tomorrow brings.

Hi tonyj

OK, wait until Tuesday, but this is where we might find ourselves going:-

A derivative claim is a lawsuit filed by a shareholder on behalf of a company, typically against directors for negligence, default, breach of duty, or trust. Governed by Part 11 of the Companies Act 2006, these claims seek to recover losses for the company rather than the individual shareholder.

Key Aspects of Derivative Claims:

Purpose: To fight back against director misconduct, such as misappropriation of assets, mismanagement, or breaches of fiduciary duty.

Permission Required: Shareholders must obtain court permission to proceed. The court will check for a prima facie case and that the action is taken in good faith.

Scope: Actions can be brought against current or former directors, and sometimes third parties.

Benefits: If successful, remedies can include damages paid to the company, setting aside fraudulent transactions, or removing directors.

Steps to Initiate a Claim:

Investigation & Evidence: Gather evidence showing the company (not just the shareholder) has suffered harm.

Notify the Company: The company must be informed of the potential claim.

Apply for Permission: The shareholder must apply to the court. The court will hold a hearing to decide if the claim is valid enough to proceed.

Claim Proceeding: If allowed, the claim proceeds, and the company is often indemnified for legal costs.

Derivative claims are a vital tool, particularly for minority shareholders, to hold directors accountable when corporate governance fails.

hi sandgrounded

not sure that we've got time to wait.

imo, what has gone on here is 'criminal'.

at best it's negligence by a bod with hundreds of years of experience in business between them to enter into these types of loans with es and putting our company at risk. it's no good the two at the top claiming that they have been hoodwinked by es. one is a qualified accountant, the other has decades of experience. they have been paid £600k combined for years while there has been nothing to do. now, when a bit more is demanded of them, we're very badly let down. they would have been aware of what they were doing when the first loan agreement was signed. i will never believe otherwise.

at worst, this action to leave us where we are (i.e. losing our company for a pittance) was deliberate.

imo, if the company needed cash, the bod should have asked existing shareholders first via a placing and then explored extensively other funding options. instead of a bilateral deal with es, they could have looked for a syndicated loan. relying on one customer for 25% of your revenue and 100% of your emergency debt is a massive governance red flag.

if we do go down the legal route, us 5% need to be clear what it is that we want ultimately.

cronin & pea**** have a lot of explaining to do.

Hi tonyj

I'm happy to go with an alternative solution that would work, but my suggestion is:-

* Solicitor named (they will know the process).

* Holders who would be happy to form a unified 5% email solicitors with proof of their holding (confidential between holder & solicitor).

* Solicitor tots up combined total of holding details emailed in to see if 5% threshold has been hit and lets holders know.

That would be stage 1.

As far as the new regs are concerned, my guess is Cronin & ES knew they were coming and ES's £37.5M value was what they came up with as a result.

Until the BoD issues an RNS saying otherwise, they would be happy to receive and approve a bid of 10.44p per share. That is the fact of the matter.

We need to find out if we have the necessary 5% by Tuesday.

Hi Bordersman

I think that there has been a cash crisis (late 2025), which has been kept from shareholders. There should have been a quarterly TU for Q/E 31/12/25 as promised - they shouldn't be allowed to change the rules to fit.

If we get through this, the BoD has to go.

Have a fun weekend all.

Cheers

ITT

Hi sandgrounded

I don't think the ES bid will be for 8p, I think the 8p is simply the mid-price while we wait.

If there is a bid, the 8p buyers might make 25%-30%.

If ES walk, the market is suggesting that the SP will drop to 5.5p'ish, losing the 8p buyers 30%.

Well, that's how I see it.

Hi tonyj

Remember, they do wear two hats.

1. Nomad.

2. Financial adviser.

IMO, the level of policing (Nomad) is influenced by the fee income from a deal (Financial adviser). The system stinks.

The BoD's credibility is shot to pieces. If ES walk, there is no way that they or Strand Hanson can stay in position.

Love it!

Strand Hanson have their role too.

A Nomad's Key Responsibilities:

Due Diligence: Conducts thorough investigations into the company’s business, prospects, and management TO PROTECT INVESTORS.

Market INTEGRITY: Ensures the company maintains HIGH STANDARDS, acting EFFECTIVELY as a regulator to uphold the MARKET's REPUTATION.

Guidance: Helps directors understand their RESPONSIBILITIES.

Hi 2cvguy

Long time no hear. Hope you're well.

Every share will count. Thanks for agreeing to go for it (and thanks also to Mel, Jake, Gizmo555 & tonyj).

I will make a couple of phone calls today. The first to the solicitor and the second one to someone for some advice on who to parachute in, if that is what is decided to do (that second person really knows their onions).