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Ann: Response to ASX Query Letters, page-149

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Ryzie

3,795 Posts.

1980

23/02/18

14:13

Post #: 31291921
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Originally posted by Warnie ↑

Consequently, BRTV has not had to pay any Cancellation Fees to FC pursuant to the Agreement.

That's because BIG relies upon the number of new signups and deposits taken being a higher number than the number of SB's who don't take up the final deal on the other end.

Once the number of SB's that don't take up the deal is greater than the number of new onboard clients coming in, BIG will not only lose their upfront costs (to which has now been not only spent on their costs, but needs to be repaid) but will also incur a substantial fee in consideration.

They have managed so far to replace new clients with non accepting clients, but this is no way to run a business IMO.

BIG are certainly playing a risky game.

You need more and more coming in the front end to cover those leaving the backend.
Also, the cost (amount to be paid back or out) is far greater at the backend (client loss) than deposits $$ received per client at the front end.

Almost sounds like a .....oh I won't say it.

Lastly as per the FCC agreement:

Events of Default 28

The Agreement includes customary events of default including any change in the Control of BRTV, BRTV committing an offence under the Corporations Act 2001......

Depending on ASIC, If BIG are made to pay a fine for non disclosure, to which they have agreed to the offence in the Aware letter, then they have committed an offence under the Corporations Act 2001, technically could put the entire funds held by FC under dispute.

You could say the agreement is with BRTV and not BIG, and BIG committed the offence and not BRTV, anyway... views?

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Regarding the last part about committing an offence under the corporations act. I had the same thought however I had another read.

The parties to the Sponsorship Agreement dated 9 August 2017 are First Class Securities Pty Ltd (FC), BRTV and Transact Payments Pty Ltd (Processing Agent) (Agreement). BIG is not a party to the Agreement.

I take that to mean Big Un Limited is not a party to the agreement and therefore any breach of the Corp. Act committed by Big Un Limited will not affect the agreement. That's just imo from reading it.

I'm still trying to get my head around the cash flow management side of the deal...

BIG Price at posting: $2.22 Sentiment: Buy Disclosure: Held
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