By Tom Winnifrith, The Sheriff of AIM | Wednesday 14 December 2016
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Cloudtag (CTAG) lied not once but twice by RNS last week so it repeatedly lied to investors. Either Nomad Cairn was in on the lies (plural) in which case it should lose its license or it too was lied too in which case it must resign. For the avoidance of doubt Cloudtag are liars and its CEO Amit Ben Haim signed off on the release. So he is a liar too. I invite both to sue me for libel and if Cairn won't quit it is then complicit in the lying so it can sue me too. Over to you liars... On Wednesday 7th Cloudtag Inc issued the following lie via an RNS titled “Movement in Share Price”
The Company confirms that there is no further information to be updated to the market since its announcement of 5 December 2016. The definitions used in this announcement are taken from the Company's announcement dated 7 November 2016 and the Circular issued on 24 November 2016 unless otherwise stated below.
On Friday, shortly after an article appeared on Shareprophets insinuating that the company was, in fact, sitting on a notice of conversion of a loan note (which we now know was into 19,166,666 shares, just shy of 5% of the outstanding shares at 6p per share, a huge discount to the share price at the time,) and that the above statement was therefore clearly false,
Cloudtag issued an afterhours RNS on Friday 9th stating:
CloudTag, the company that brings personal monitoring to the wellbeing, fitness and digital health markets hereby announces that after market closing on 7 December 2016 it received a notice of conversion in respect of £1,150,000 of Tranche 1 Notes (based on the nominal value of such notes) issued to L1 Capital Global Opportunities Master Fund ("L1").
It also stated:
Under the terms of the Conversion the Company has also issued L1 with a warrant over19,166,666 new ordinary shares in the Company with an exercise price the lower of:-
a) 90% of the closing bid price per ordinary share on the day immediately prior to the date of exercise of such warrants, or
b) 9.6875 pence per share. The terms of the Warrants are as stated in the Notes Announcement. (This last a misprint for the Nov 7th Announcement?)
The problem for Cloudtag is that under the terms of the warrants announced on Nov 7th
Warrant Issue: The terms of the Note provides for one Warrant to be issued for each Conversion Share issued on each conversion (in whole or in part) of the Notes. Each Warrant may be exercised within three years from the date of issue at the lesser of (a) 90% of the closing bid price per Share on the day immediately prior to the date of exercise or (b) 125% of the closing bid price per Share on the day immediately preceding the date of issue of the relevant conversion notice in relation to conversion of either the Tranche 1 Notes or the Tranche 2 Notes as the case may be.
The 9.6875p referred to in the Friday announcement amounts to 125% of 7.75, which happens to be the closing price on Monday 5th Dec, meaning that for that exercise price to be valid the company MUST HAVE RECEIVED THE NOTICE OF CONVERSION TUESDAY 6TH DECEMBER. (Had it received the notice on Wednesday 7th,as claimed then the exercise price would have been 11.5625p, 125% of the 9.25p tuesday close. Ie £360,000 more for the company and less for the profit of L1 in the event of exercise.)
It therefore appears that in order to protect the lie on Wed 7th that the company was not in possession of material information, it told a further lie on Friday 9th by falsely claiming it had received the notice of after the their statement was made.
That the company received the conversion notice on Tuesday rather than Wednesday could easily be checked by regulators. Presumably it was sent by email by L1.
This may all seem like nit picking to the believers who are expecting some sort of explosive announcement imminently but it does suggest that the company has a lot of explaining to do, both to the regulators and to its NOMAD.
The absurd "counting down " clock on the website (finally and belatedly in compliance with AIM rule 26) is more and more resembling one of those ticking time bomb countdowns you get at the end of Bond films. Whether Amit Ben Haim can 007-like save this one from blowing up is doubtful. He seems to me more of a Bond villain.
Time will tell and there is not much left.
Companies that lie to both investors and to their Nomad twice in one week tend to find that the Nomad walks. To Cloudtag go ahead and sue me for libel or admit via RNS that you are serial liars. To Cairn: RESIGN.
Never miss a story.
This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.
Comments are turned off for this article.
Search ShareProphets |
Stock market news |
Recent Comments |