We welcome the swiftly convened general meeting announced by Bidstack this morning, allowing all shareholders the opportunity to exercise their rights and directly impact the future of the business that they own.
We welcome that the company has committed to reducing the size of its 8 strong board.
We welcome that the Board has recognised that it can, and has committed to, greatly improve investor communications.
We welcome that the Board is reviewing its advisory relationships to ensure the company and board is receiving the best advice and investor access.
While these are all actions that we advocated for, with the share price at all-time lows, we do not believe that this morning’s announcement goes far enough and raises additional questions, alongside those that remain unanswered as the basis for our EGM requisition:
- If this board recognise the board is unnecessarily large, why did they not already take action to reduce it given the cash requirements of the business?
- Why has this board not previously felt that engaging with investors and maintaining strong sentiment is valuable to the company and driving per share intrinsic value?
- Why has this board been unable to provide a measurable plan and timeframe for the actions it has proposed to take?
- If this board has recently been able to action a reduction in average monthly cash burn of 40%, why were they allowing such a high level of cash burn to continue at elevated levels for so long given their cash runway?
- How is this board able to justify bonus payments of £226,815 in 2022 and £577,473 in 2021 while the business needed to raise cash from shareholders to fund operations?
- If this board is comfortable with market expectations, why is it not able to provide its own guidance that it can be accountable for?
- Why did this board allow the selective disclosure of material information to certain shareholders?
- Why was this board not able to organise its AGM within the legally permitted timeframe?
- Why is this board not live streaming the upcoming AGM to allow all shareholders not able to travel to participate?
These questions are the foundation of our belief that not only does the board need reducing in size, it needs additional expertise and fresh perspectives. It is disappointing that the announcement this morning did not contain this board’s thoughts on the actions I proposed to pursue as a director of the company and, instead, focused on preserving the status quo rather than demonstrative, positive change. Does this board believe:
- It has explored all financing options in their current raising to ensure minimal dilution for shareholders?
- It has explored all options for resolving the Azerion dispute and allowing for the commercial agreement to be re-ignited?
- The share-based incentive structure cannot be improved to make it not only more aligned with shareholders but also more incentivising for participants?
- Share-based payments for directors until the company is cash generative aren’t aligned with the interests of shareholders?
- It has the capital markets and investor communications expertise to turn around sentiment and drive shareholder value creation?
This board has announced support from certain shareholders, including themselves, to vote against the EGM resolutions. Namely, 19.26% to vote against all resolutions and 28.49% to vote against my appointment to the board. With a 50% majority required to carry an ordinary resolution they are a long way from having the required support. If many shareholders choose not to vote, shareholders representing just 28.5% of the outstanding capital would be required to pass all resolutions on a 50% majority. Every vote is equal. Choose to make it count.
Fortunately, the company’s AGM is being held on 21st July, ahead of the 27th July EGM. It is not only an opportunity for shareholders to vote on a number of the current board members, but also an opportunity to hear answers to the above questions directly from this board. We encourage all shareholders get a letter of representation from their nominee broker and attend where possible. I will also be happy to discuss my nomination with any shareholder who wishes outside of the meeting.
We also encourage the company to live stream the AGM to ensure that all shareholders have access to the meeting rather than keeping it closed to those able to travel. This service is readily available and would surely be in the interests of all shareholders and indicate that this board truly intends to actively engage with shareholders from this point forward.
I also encourage those institutional investors that have indicated their support of this board’s positions, and those considering doing so, to contact me directly and make a personal decision on whether I can add the expertise and oversight that the many shareholders already supporting my nomination believe. I am more than happy to be questioned on my experience, proposals and judged on my merits.
The upcoming AGM and EGM allow all shareholders the opportunity to exercise their rights and directly impact the future of the business that they own. They get to choose whether the track record of this board merits the continued service of all the directors or whether there is a need for change and a measurable plan for realising the enormous value potential of the business.
It is for the owners of the business to now decide, not this board.