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Okay, so assuming ICON brought in OTT so they could participate in an emergency rights issue, which would enable the 19.99% rights issue, it doesn't add up:
1. Why would OTT accept this - knowing that his equity will be diluted after the placing?
2. I can understand the BoD wanting extra cash - but Shard Merchant Capital providing a debt facility for £1m surely gives confidence in ICON paying this facility + interest? i.e. a sound business mdoel?
3. Who bought the placing shares?
4. What is OTT gonna do with the 18.4%... what's in it for him? Surely he is not interested in making 10%, 20%, 30%?? I'd have thought he's want to be making 100%, 500%+++

yes it is high volume so far....

Something weird happened on my live feed - the share price had a quick burst of +444% up...

Probably 'fat finger' trade...

Missilee - it was a purchase of c.5.7bn shares (18.4% of 31bn).

Would be great to see some of OTT’s many business ventures using ICON for its marketing / data solutions!!
Would be a good way to hedge his investment in ICON...

Blades - we don’t know how much OTT paid for the EHGOS shares... so no way of knowing what profit margin they could make.

Also, wouldn’t it be easier for ICON to just continue using EHGOS for funding?

I just re-read the financing update and appendices (!) and the BoD state that they consulted the major shareholders to agree the placing. At that time, OTT would have been consulted - why would OTT agree to a 20% discount placing just after buying 18.4% of the company?!

Will be interesting to see where this goes tomorrow. Probably flat ;/

Okay, I've analysed this a little further:
- EHGOS TR-1 RNS (released 10 Nov) states EHGOS reduced their holding from 21.35% to 2.95%, with date threshold was crossed 10 Nov. This is a change of 18.4% of the 31bn shares in issue.
- Jean-Francois Ott TR-1 RNS (today) states that they bought 18.4% of 31bn shares, with date threshold was crossed 10 Nov.

Coincidence??

The daily volumes and lack of individual large trades back in early November always left me thinking that the EHGOS TR-1 on 10 Nov was out of the ordinary. My initial prediction was an II buying the EHGOS shares... Maybe I was right.

After the 10 Nov, the share price started to steadily rise from 0.013p to 0.016p until ICON released the 'Placing' RNS, when it dropped.

I don't know what this means, but I will mull it over, and research more on OTT.

Redhammy

Yes, the dilution has been awful over the last 18 months.
Yes, during that time the BoD and David Sefton have said things that may have been misleading.
Yes, the legacy issues / debts have continued and the details are not clear...
People lost money (me being one) - hopefully they have learned and put their emotions aside.
You seem to be stuck in the past and unable to get over it.

But the 'happy clappers' are looking at the current situation and the potential of this company now.
ICON is a very different company now compared to even 6 months ago! It is changing every week, evolving.
This is what we should be discussing on this board.

You say this may "be an excellent opportunity for anyone buying in for the first time".
I want to hear your rationale for this? What are your positive thoughts as well as the negative?

RT003 - the financial report for 18 month period ending 30 June 2019 states total salary cost of £1,473,681. This is over 18 months so an average monthly salary cost of c.£82k.

Albeit this was over a year ago so we can expect this to be higher. But the revenues ICON are now receiving should easily cover salary costs.

I can’t remember in which RNS but there was a statement that the directors were taking a 33% cut in salary - down to £120k ish.

Redhammy
A lot of your issues are with David Sefton and process, and frankly the dilution from EHGOS. Mostly not applicable to the company now.

Regarding the legacy issues, when re-structuring a failing company a lot of issues will arise. There were many debtors and creditors that were discovered post re-structure. Albeit frustrating, it is part and parcel of the re-structuring process. And I believe they dealt with the legacy debt as well as they could. The figures from the June 2019 accounts clearly show a huge reduction in the debt.

The 'floor' price was a David Sefton statement... As was the buying of Social Alchemist. He has a poor reputation, and that is why shareholders subsequently voted him off the BoD.

I agree it's disappointing to lose the £1m contract (which was likely inked but never signed). I don't believe this was fabricated just unlucky to not close it.

I disagree that the BoD wrecked the share price. Yes, the dilution is probably record breaking, but all investors knew this was going to happen. The financing agreement inherited from WDC, then the updated financing agreement and Prospectus that shareholders had to approve or else the business goes bankrupt. It was all in the public domain.

And lastly I totally agree that investor relations are poor. But this is not going to impact my investing decision.

Redhammy - my heart agrees with you in that the BoD salaries are too high.
But look at this factually, and from their perspective:
- They were brought into the Board early 2019 to re-structure a failing business (WDC) into a new media tech company
- They inherited a horrible financing agreement (EHGOS) which diluted the share price
- They inherited unknown 'legacy' debt and had to react - which unfortunately meant continuing with EHGOS or going bankrupt
- They started to get a foothold in the market then Covid struck
- Since Covid, they have managed to grow the business 1400%
- Now they have a viable business with conventional financing and a good balance sheet

I would also love to see the BoD buying shares and having a major stake in the business.
But I would argue that their salaries are low / fair for executives in a London media agency. Also, they may not have loads of savings to purchase stock - they are relatively young and need money to live...

My guess is that the deferred salaries may go towards stock purchases down the line when the business is showing a net profit.

Just to add to the MCAP analysis.
I believe the market discovered the 'baseline' value in MCAP terms in March / April 2020. It went down to c.£340k - which was when it was a 50/50 between survival and bankruptcy.
Since then, ICON has started to win work, get retainer contracts, employ some high calibre staff, and even achieve a profitable balance sheet.

The market clearly sees a growth company in ICON.
Since the baseline value, the market now values ICON at c.£4.7m which is growth of c.1400%.

Unfortunately, during this period shareholders have not enjoyed this rise due to the variable convertible loan agreement with EHGOS and subsequent dilution.

When Institutional Investors and Equity Buyers (Shard Capital) look at companies to invest into, they will look at the 3-year ROCE. For ICON, I believe this will be based on growth potential using multiples of Price / Sales. We know that ICON's revenues are c.£2.1m per annum.
Using a growth rate of 100%-200% (typical for JOE) an Investor would apply a multiple of 10-25 times sales.
Using a growth rate of 1400%, this multiple would be far higher...
If ICON can continue to grow as they are now, and sustain this over the next 12-24 months, we are looking at a significant company, and with no EHGOS shareholders may finally see a reflective rise in sp...

MCAP analysis since March 2020. Updated at TR-1 issuance or other changes in share capital.

30/03 - 1,637,129,905 shares total (after suspension)
30/03 - sp of 0.021p = MCAP of £343k
07/04 - 2,192,685,460 shares total
07/04 - sp of 0.0185p = MCAP of £405k
17/04 - 2,748,241,015 shares total
17/04 - sp of 0.035p = MCAP of £961k
05/05 - 3,248,241,015 shares total
05/05 - sp of 0.0275p = MCAP of £893k
14/05 - 4,048,241,015 shares total
14/05 - sp of 0.031p = MCAP of £1.25m
29/05 - 4,548,241,015 shares total
29/05 - sp of 0.0274p = MCAP of £1.24m
16/06 - 6,248,241,015 shares total
16/06 - sp of 0.0155p = MCAP of £968k
25/06 - 6,248,241,015 shares total
25/06 - sp of 0.02p = MCAP of £1.25m
03/07 - 8,248,241,015 shares total
03/07 - sp of 0.015p = MCAP of £1.24m
30/07 - 9,803,796,569 shares total
30/07 - sp of 0.01025p = MCAP of £1m
17/08 - 11,660,939,426 shares total
17/08 - sp of 0.01325p = MCAP of £1.5m
25/08 - 14,089,510,854 shares total
25/08 - sp of 0.01175p = MCAP of £1.65m
08/09 - 17,518,082,282 shares total
08/09 - sp of 0.00925p = MCAP of £1.62m
18/09 - 22,518,082,282 shares total
18/09 - sp of 0.0155p = MCAP of £3.5m
06/10 - 27,073,637,837 shares total
06/10 - sp of 0.015p = MCAP of £4.2m
08/10 - 31,173,637,836 shares total
08/10 - sp of 0.0135p = MCAP of £4.2m
10/11 - 31,173,637,836 shares total
10/11 - sp of 0.01325p = MCAP of £4.1m
13/11 - 37,405,248,039 share total
13/11 - sp of 0.014p = MCAP 0f £5.2m

dvh - MCAP assuming enlarged chare capita from placing is £5.2m (37,405,248,039*0.00014)

But looking at there earnings:
- £1.2m from JOE
- £120k from Lovin
- assume £120k from TLE
- assume £60k from GSN
- assume £600k from 4 one-off campaigns per year (i.e. Yoga, grocers at £150k each)

That would give an annual revenue of c.£2.1m per year
As a fast growing start-up in a great sector (digital ads + data) we should expect 100%-200% growth per year.
This would allow a future valuation of 10-25 times revenue (three year forward looking).

MCAP = £21m - £52m

dvh - MCAP assuming enlarged chare capita from placing is £5.2m (37,405,248,039*0.00014)

But looking at there earnings:
- £1.2m from JOE
- £120k from Lovin
- assume £120k from TLE
- assume £60k from GSN
- assume £600k from 4 one-off campaigns per year (i.e. Yoga, grocers at £150k each)

That would give an annual revenue of c.£2.1m per year
As a fast growing start-up in a great sector (digital ads + data) we should expect 100%-200% growth per year.
This would allow a future valuation of 10-25 times revenue (three year forward looking).

MCAP = £21m - £52m

wolves - also, what 'profit' are they talking, gross, net, operating profit...?
To be honest, I can't see the 25% profit share being significant. It is a nice to have.

Dimitry - you may want to read the Half Year Report (RNS 1st April 2020).
Also, the figures you are stating are for the 18 month period ending 30 June 2019 so they are slightly better when you annualise them (only slightly :/)... Not last year's as you suggest.

Updated figures (annualised estimates taken from published figures up to Dec 2019):
- Pre-tax p/l -£1.7m (-£4m previous)
- Revenue £5k (transition period and re-structuring)
- Working capital will be significantly worse due to financing / debt costs

They have insignificant revenue because they were transitioning from WDC to ICON and essentially setting up and structuring a new company. They also had significant legacy issues. And the financing agreement with EHGOS wasn't good.
ICON's balance sheet should be viewed as a tech start-up - ergo, you should expect them to have minimal current assets, high debt costs, and high growth sales (which have only really started this year 2020 and so not reflected in published figures).

I agree it would be great for the BoD to invest in the company but as you say, they are young, they've been taking a reduced salary, and I don't know their financial situation - they may not have money to invest... Remember they didn't create this company from scratch, they inherited WDC (with its EHGOS financing agreement and previous BoD).

And the age of the BoD is irrelevant - they have credentials and good previous experience - my only worry is the involvement of David Sefton!

I can't find any details of the CCJ you mention, but it may be the outstanding £1.5m tax due from the 'sale' of UniLad...

So, Dimitry - what would need to happen for you to invest in ICON?

There may be a very large trade being processed.
If EHGOS are not selling (or have already sold into market!) there will be low liquidity.
Also, I expect a lot of holders are sticky hands as they are anticipating an imminent sp rise.
Just my thoughts.

Hopingforbags - please can you inform me what RNS stated that there will be more dilution?
As far as I’m aware, the total share ceiling has already been reached and they can only issue more shares with shareholder approval?! Ie another prospectus...

Let me know your thoughts.

To state the obvious - the BoD didn't buy any shares because of the Financing Agreement in place. They knew the sp would be diluted significantly until the facility from EHGOS was all drawn down. It was in the Prospectus.

We are now in a position where the BoD, IIs, PE are able to invest.
There are a few other things to bear in mind:
- ICON cannot issue further share capital (new shares) unless voted for by shareholders (we are at the limit within the prospectus)
- EHGOS likely haven't sold any of their 21% - why? What is being worked on behind the scenes?
- They are intent on moving to traditional forms of finance

STFCsam - yes. The news was that ICON were intending to terminate their agreement with EHGOS, early.