The evidence of deliberate lying and criminality by the Directors and Auditors of Quantexa is now shown to be incontrovertible and rock-solid by the latest accounts.
Evidence from the just published accounts:
- Where is Sarah?
There are two lists of directors, neither of which includes Sarah Diamond. Frontispiece and Page 7.
Evidence that she is a Director:
23 February 2023: Quantexa Press Release https://www.quantexa.com/de/press/new-appointments/
Sarah Diamond in her own words with direct confirmation from Quantexa and many of its employees and staff. https://www.linkedin.com/posts/sarah-diamond-044a99_im-delighted-to-be-joining-the-board-of-activity-7034251665088073730-Cq9X/?trk=public_profile_like_view
30 September 2024: Audited accounts of Dubber Corporation listed on ASX. Page 24 https://www.dubber.net/wp-content/uploads/2024/10/2785944.pdf
BUT what were the BDO auditors doing? (except increasing fees by nearly 100%)
Page 14: "Our procedures included....review of minutes of meetings of those charged with governance for any instances on non-compliance with laws and regulations". The odds of Sarah not being present, named or cc'd on those documents and agendas - NIL
Page 13: "....the Directors report [has] been prepared in accordance with applicable legal requirements"
---------------------------------------------------------------------------
- The Directors lied, and are still lying, about the Series E share issue:
Page 1 Para 5. Last accounts stated "Series A Shares" now it is "Ordinary A".
Neither statements are true.
Ordinary shares are founder shares, Series A are Preference shares that were said to have been sold by holders (Albion VCTs per Confirmation Statement) in the last accounts.
The money does not add up in either case. Many £millions are missing in both cases per the precise evidence given to the FCA. Why? What is the real truth?
--------------------------------------------------------------------------
- "Treasury" shares.
I have had to bite my tongue since 22nd October 2024..... not an easy thing for me to do!
Now you might think that this is one for the Nerds but quite the contrary.
The accounts state that 34,367 Ordinary B shares were bought for "Treasury" for £155,177.
References on Pages 18, 19, 20, 21, 22, 30, Notes 19 and 21.
The law is quite clear: Companies without distributable reserves are prohibited from buying their own shares unless the consideration is the lower of £15,000 or 5% of nominal value of all issued shares at the start of a financial period (in Quantexa's case that is a total of a mere £82.95).
The Directors "forgot" to include these shares in the Confirmation Statement filed on 26 March and only "remembered" 7 months later. Hmmm!
Now the problem gets worse.
All those shares were issued to employees under the EMI Option scheme
If that seller was a Bad Leaver then the Articles provide that the mandatory transfer price of those shares is the nominal value - £34.37 - or a >99% discount to the Fair Value of £733.70 per share used by everyone since the Series E pricing just 10 months earlier.
If the shares were acquired from a Good Leaver then the price is either agreed or an independently determined Fair Value.
The Directors had lawful authority to pay only a maximum of £82.95 but paid nearly 2,000 times more than the law permitted.
This might seem like "chump change" but bear with me.
- Someone didn't read Part 18 Companies Act 2006
Treasury Shares have to be registered in the name of the Company
and not squirreled away in some offshore "repository"
of the UK LSE Listed but Channel Islands based "JCT Group"
as finally revealed on 22nd October 2024.
So what is going on? Even if lawfully acquired by the company (which they were not), why would employees accept a 99% discount to Fair Value? Who or what is behind the cloak of secrecy of a Guernsey company? Why didn't any other shareholder buy the shares under existing pre-emption rights? Was it actually a sale at all, or a very dodgy deal altogether with reservation of title or similar?
Perhaps the employees knew that the "writing was on the wall" and that it was their only chance to salvage anything from Quantexa's rapidly deteriorating financial situation........
---------------------------------------------------------
... which neatly segues to the Financials.
A mere 4 months after securing a £35,000,000 ("emergency"?) secured credit line from HSBC (Page 2) 2024 Vishal was puffing to the global media the £80m ARR and the mythical "Centaur" status.
Since then the independent firm of Hays Macintyre has prepared a formal valuation report for one shareholder - the Albion VCTs - but contrary to all laws and the Listing Rules of the FCA this has not been made available to the members of the VCTs. Why? What does it show that all involved are frightened to reveal?
It seems to me that the accounts show that the maximum Fair Value of the Enterprise value of Quantexa is in reality no-more than 40% of the US$1.8bn so publicly pronounced.
How do I reach that conclusion? Just read and apply the principles in:
The heady days of a 20 times multiple on ARR for loss making companies still in development have long gone in this era of ever higher interest rates. Even then that was based on year-on-year growth of >50%.which Quantexa doesn't reach (page 3)
The new reality for mature but still loss making entities is neatly summarised in
https://firstpagesage.com/business/saas-valuation-multiples/
So let's be generous to an ever increasingly loss making Quantexa (now employing 760 people or 15% more than in FY 2024), and even though it's major shareholder and secured Lender HSBC has scaled-back its own purchases by one-third (Note 24):-
US$1.8bn implies an 18 times ARR Multiple. That is pie-in-the-sky.
Unicorn status of US$1bn implies a 10 times ARR multiple which is equally "optimistic".
The above link indicates a current multiple of less than 8. "Bye Bye Unicorns".
That leaves a very large 60% "impairment charge" to those shareholders
who have declared and relied on the 18 times multiple.
-------------------------------------------------------------------
PS
Delighted to note yestarday's change of Registered Office to Baker Mckenzie and it's (hopefully) highly professional Company Secretarial operation. That might just stop post being returned as "Gone Away" or was the Royal Mail sending a message about Quantexa's very existence?
Comments
Post a Comment