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Changes To Executive Directors Pay

CyanConnode Holdings plc (AIM:CYAN), the world leader in narrowband radio mesh networks, announces changes to Executive Directors' remuneration, with effect from 1 July 2018.

At the Company's AGM on Monday 18 June 2018, the Executive Directors announced that there were ongoing discussions relating to a reduction to their total remuneration package, including their bonuses. The changes which have been agreed with the company's Remuneration Committee are as follows:


John Cronin
Remuneration to be paid in cash GBP170,000
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*Remuneration to be paid in ordinary GBP70,000
shares
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Total Annual Remuneration GBP240,000
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Harry Berry
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Remuneration to be paid in cash GBP100,000
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*Remuneration to be paid in ordinary GBP50,000
shares
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Total Annual Remuneration GBP150,000
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* The terms relating to the remuneration paid in ordinary shares are as follows:-

i) The remuneration to be paid in ordinary shares will only proceed if the Company's revenues for the year ended 31 December 2018 exceeds GBP7M.

ii) The shares will be allotted 10 days after the January 2019 trading update, (should the Company be in a close period at that time, the allotment will be as soon as the close period comes to an end).

iii) The price of the allotted shares will be calculated as the average mid-market closing price for the five days prior to the day that the allotment of the shares becomes due.

These changes are aligned with the Company's strategic focus which, in the last year, has resulted in order book increases, with orders won from a range of customers opening up new territories. The Board and management team were also streamlined and strengthened, with the Group firmly focused on converting its order book into revenue.

In respect of these reductions in Director remuneration, Paul Ratcliff, Chairman of the Remuneration Committee commented:

"The Committee has listened to shareholders' feedback and taken decisive cost-saving action. This payment reduction has seen the remuneration for these two Executive Directors significantly reduced when compared to their remuneration for 2017.

Furthermore, the share element of the Executive Directors remuneration will only be made on the achievement of the Company achieving revenues of GBP7M in 2018. This performance related target provides a clear metric of success for both the Company and its investors. This is a clear statement of intent that the Directors remain focused on the sustainable long-term delivery of the business plan."

The

Hi Vascular,

Looks like a potential competing tech for not spots, but we don't know how cost effective the solution would be and any other supporting infrastructure that would be needed to make it work.

Also what may be cost effective and applicable in London with its population and building density, network demand may not be needed in most parts of the UK.

Tech will continue to evolve and that brings us a nice problem to solve through our Omninesh IoT solution- interoperability of legacy systems with newer tech. Not every country has the finances to keep updating tech infrastructure on a regular basis, though they may sweep out old tech every decade or two.

Good morning all :)

In a chat that I had at the AGM, it transpired that we are also "talking" to companies dealing with the SMETS2 rollout in the North of England and Scotland...it could be that they are having "not spot" issues that CYAN could potentially "help out" with.

I did not get the impression that it was anything more than discussion of possible CYAN tech solutions, but if North of England and Scotland are not able to sort it out in the timeframes that the Govt expects, then maybe we could be in business in those territories as well.

Hopefully for us given the geography and population density of Scotland, there could be a higher percentage of "not spots" ?

Hi Emptyend, it's a shame that we didn't meet up at the AGM. Maybe next time....

I had a brief chat with Mr Kosmas Galtos from Inmesh Solutions after the Omnimesh demo - he's the Aussie that emptyend is referring to. He seemed to know what he was talking about and was apparently dealing with Vietnam, Thailand and Indonesia (if I remember correctly).

Hi Sunil, From Trading Update: 04 Jan 2018 "This momentum is expected to accelerate as the Company continues to develop new products, such as communication technology for battery powered water and gas meters..." So there is life after the post -Connode "exodus" after all ;) Good luck whatever you choose to do...sell/buy/hold :)

Hi Sunil, You raise a valid query re the technical skills / people retained to deal with the legacy Connode products and support of the same. You also seem to wonder what is left of the technical side of things if 5-6 VPs have moved on / been moved on by JC ? What Connode offered that CYAN did not have was the IPv6 solution that suddenly became a must have for the Indian contracts and could have costed £1.8m (can't remember the exact figure and 2 years to develop). This was an important consideration in the takeover decision - I recall that the RNSs from that period did reflect that. Having acquired Connode about 2 years ago and despite the exodus of technical staff ( as you seem to suggest) we have moved on with development of the Omnimesh product which was trailed at the AGM last October and then formally launched. At the AGM recently, were were informed about the a more advanced Omnimesh version for IoT that is going to be launched at Asian Utility Week in Bangkok towards the end of the month. So we are creating new products and generating interest in our offer from "white label" potential customers. There was also some other new product being developed that was announced recently and I'll post the details when I get back home. So as Vascular pointed out it seems to be more of a rationalisation of the R&D function/workforce given its cost implications at this point rather than a cause for despair in my view. So I don't share your view that they the 5-6 VPs were deserting a sinking ship.....but I would say that wouldn't I ? ;)

Good morning LTI and all :) Let's see what the day brings !

Saudi Arabia going through "modernisation" by the new ruler and will have some money to spend potentially (not withstanding funding their involvement in the Yemen war). Indonesia has a massive population and potentially similar "loss and pilferage " issues like India.

Hi Vascular, I did not hear/ may have missed Jamaica being mentioned at the AGM, though it may have filtered through in private conversations. The ones I recall were Saudi Arabia Indonesia Phillipines

Many thanks LTI - much appreciated :)

Thanks 2cvguy....

You are right Vascular about today being an amazing day in terms of SP. Strangely, I don't feel elated but more a sense of relief and hoping that market sentiment is turning. I guess a large number of long term holders averaging down on the back of reassuring news from the AGM could be the driver. The receding threat of yet another fund raise may also have helped. Let's hope we can hold on to the gains and not slip back ! LTI, there were definitely hints about more news - like the Omnimesh new product release at Asian Utility Week (we are a Silver sponsor) in Bangkok on 28/29 June that John Stamp can't attend as he is back in the UK at that time. We seem to be doing work in Thailand with PEA (don't know what it stands for) Some more news re CESC Mysuru also due it appears....I get the feeling that there will be decent newsflow. Let's hope there is revenue to match and exceed :)

The issue of paying vendors in shares as opposed to in cash was discussed as a "cash sparing" method for the company. I think it was Resolution 5 and it was passed. Can be profitable if you are selling products or services to CYAN. I seem to remember the painter/decorator who was paid in Facebook shares for his work pre IPO and ended up with something like $200million plus on floatation of FB !!

Hi Tonyj, It's a shame that it was not passed, as it would have allowed all PIs to potentially participate in any fund raising and not just allocated to the favoured few... Here is Resolution 6 in all its resplendent legalese.... 6. THAT, subject to the passing of resolution 5 above, the Directors be and they are hereby generally and unconditionally empowered pursuant to section 570 of the Act to allot equity securities (as de ned in section 560 of the Act) for cash pursuant to the authority conferred by resolution 5 above (or where the allotment constitutes an allotment by virtue of section 560(3) of the Act) as if section 561(1) of the Act did not apply to such allotment, provided that this power shall be limited to allotments of equity securities: (a) in connection with an offer for equity securities (but in the case of an allotment pursuant to the authority granted under resolution 5, such power shall be limited to the allotment of equity securities in connection with an offer by way of a rights issue only), where the equity securities respectively attributable to the interests of all shareholders are proportionate as nearly as may be to the respective number of ordinary shares held or deemed to be held by them, subject to such exclusions or other arrangements as the Directors may deem necessary or expedient to deal with fractional entitlements or legal or practical problems arising under the laws of any overseas territory or the requirements of any regulatory body or stock exchange; and (b) otherwise than pursuant to paragraph (a) above, up to an aggregate maximum nominal amount of £256,893.22, and such power shall (unless previously renewed, varied, or revoked by the Company in general meeting) expire upon expiry of the general authority conferred by the fth resolution set out in the Annual General Meeting notice of which this resolution forms part or, if earlier, on the date 15 months after the passing of such resolution, save that the Company may, before such expiry, make offers or arrangements which would or might require equity securities to be allotted or rights to subscribe for or convert any security into shares after such expiry, and the Directors may allot equity securities or grant rights to subscribe for or convert any security into shares in pursuance of any such offer or agreement as if the power conferred by this resolution had not expired. The authority granted by this resolution shall replace all existing authorities previously granted to the Directors to allot equity securities or to grant rights to subscribe for or convert any security into shares for cash as if section 561(1) of the Act did not apply (but without prejudice to the validity of any allotment of equity securities already made or agreed to be made pursuant to such previous authorities).

Yesterday too it was going to periodic auction call. I know as I was checking up on Level 2 as my son and I were driving down to the AGM. Though it can be easy to get excited with a 30% rise, sadly it is only lost ground that we are trying to recover. It could be just hot money tracking momentum. Let's see how today and next few days go...good luck all :)

Yes agree with you fully LTI - JC said that 100k modules were manufactured but not shipped to Ukraine, though NIK offered to take them but were not willing to pay for them !! NIK were dangling the carrot of huge future orders etc, but rightly JC stuck to his guns and said that if you want them, you pay for them. They are being re-deployed to meet/part meet Indian orders. If NIK want them now, they will have to wait their turn....

NOT too worried I must emphasise - my typo causing frayed nerves...sorry I took another 230k shares yesterday at 10.40p around 0806hrs yesterday morning...had to be a negotiated trade as it was quoting at 9.5p at that time. After sinking in £ several hundred k a couple of tens of thousands is not going to hurt. Gone against my usual strategy and averaged down.

Re my previous post - Sorry that should read as " my impression was that JC was NOT too worried about any imminent fundraising. Sorry for my unfortunate typo !

Hi Overfiend1981 ! I have checked with my son (24, a doctor/shareholder) who also attended and also checked the notes that I made contemporaneously....JC said £5.2m but basically left it to the audience to do the maths (as the NOMAD did not allow forward looking statements). He did not qualify the date as to when the £5.2m was - I took it to mean that it was current. As I said earlier - my impression was that JC was too worried about any imminent fundraising