[Nick Hargrave]

I attended the BIDS’ general meeting this morning. As the only shareholder there I was able to ask some questions to the board (all of whom were in attendance other than Bryan Neider, in addition to 3 Stifel brokers and 2 advisors from the company’s NOMAD, Spark Advisory). Having had to assert my right to ask questions and after a brief opening remark, I asked the questions I set out below. I also set out a summary of the brief answers I received and my view on the responses. While I remain confident in the potential of the business and its strategy, the meeting served to confirm my belief that the board lacks a director with serious finance expertise and is not receiving good advice. The board has no, at the very least, heard the concerns on shareholders directly and without a coating of sugar

Opening remark:
I would firstly like to say to Mr Draper that I think you’ve done a fantastic job operationally and strategically in bringing the business to where it is today. I don’t think anyone should underestimate what it takes to effectively birth a new industry and attract the exceptional talent that you have. So, thank you.

Question 1: Can the board elaborate on the process they went through to exhaust all non-dilutive funding options before pursuing this dilutive equity raise?
Response 1: From James Draper, CEO. They began talking to Irdeto in May and fairly quickly decided that they liked the idea of aligning themselves with a strategic investor with complementary technology. They did not, therefore, explore any other form of financing other than the equity raise
View 1: It is astonishing that the board did not explore all available options and highlights a complete lack of financial expertise and understanding of per share value among the directors

Question 2: The company released an RNS on 20th September titled Revised Market Forecasts. Can the board please explain what regulatory requirement or advice it received that led to the release of that RNS?
Response 2: The chairman offered this question to Mark Broady of Spark (the company’s NOMAD) to answer, and he stammered and declined. Donald Stewart then defensively responded that AIM required them to make the announcement
View 2: This is simply false. I have never seen such an announcement and having read the AIM rules thoroughly over the years I know that no such announcement was required by these rules. This RNS was, therefore, either the result of poor advice or for another purpose that the company do not wish to disclose. There was a brief further discussion around this issue and Mr Stewart was highly defensive, suggesting that I was able to access the Stifel note if I wanted. I agreed and he was surprised to find that I had explored the possibility but at a cost of £5,000 to access the research that I believe to have no greater insight to my own, I didn’t feel it was a good investment. I then had to re-make the point that the issue was the spurious reasoning for the RNS rather than the value of the research itself

Question 3: Following the previous dilutive 2p raise, the board approved a new option scheme to reduce exercise prices and effectively provide an anti-dilution mechanism for insiders, ensuring it was only public shareholders that felt the pain of that dilution. Can the board now assure shareholders that they will not approve further option packages following this raise?
Response 3: From David Reeves, Chairman. The company cannot provide this assurance
View 3: The entirely expected response and obviously they cannot tie their hands and rule out incentives for key employees going forward, but hopefully they understood the point of the question

Question 4: The company appears to have made enormous progress and clearly has a plan for exponential growth. What is the board’s plan for improving investor communications and sharing its targets in more detail with the market?
Response 4: From James Draper, CEO. This is a discussion that they have had at board level, and they agree that they can certainly improve investor communications
View 4: This is what I have previously heard from David Reeves and with no improvement since his appointment, the proof really will be in the pudding on this

Question 5: Mr Stewart. In the RNS of 17th June announcing the appointment of Dr Reeves as chairman designate, it was stated that you would remain on the board to provide your skills, “which lie in capital markets and financial regulation”. During your tenure as chairman, the share price fell 95% from over 31p to under 2p, two hugely dilutive equity raises were concluded, someone questionable governance decisions were taken, and you are party to this dilutive raise. Please can you give us with more background as to your capital markets qualifications, experience and expertise?
Response 5: After Mr Stewart had interrupted my question and explained to the current Chairman that as a board member, Mr Stewart had a fiduciary duty to act in shareholder interests and part of being on the payroll was answering the questions of owners at general meetings. I then received a long-winded response from Mr Stewart that I was not able to transcribe, but essentially, he is a lawyer with some background in financial regulation
View 5: I recognise that I have not done his response justice here. Given his combative and defensive responses I was simply listening for any evidence that he had any background or understanding of finance, which I did not hear

Topic

[Nick Hargrave]

Sadly not, as that announcement continued “On David’s becoming Chairman Donald will move to a Non-Executive Director role and will serve on the Audit and Remuneration Committees”

He is happy to continue taking fees until he can be removed

[Michael Taylor]

Isn’t Mr Steward supposed to be gone? He was the same effortlessly unlikeable chap at the AGM.

From 17th June:

“Bidstack Group Plc (AIM: BIDS.L), the in-game brand activation platform, is pleased to announce the appointment of David Reeves to its Board as Chairman Designate. To ensure an orderly handover he will succeed Donald Stewart as Chairman on the 1st September 2022”

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