@SimonGr, It is important to note that no shareholder (or you or ASX either) has any right to object to the earning of the milestone shares or the dilution of shares from earning the milestone shares in 2018. The terms in which the shares could be earned were clearly explained to Otis Energy Shareholders (OE) in the notice of the general meeting in 2014. Appended to that notice was the RSM Bird Cameron Independent Expert Report which stated:
“The Milestone shares are not linked to profitability. As such, the incentive to grow revenue could come at the expense of profits”. RSM’s Conclusion on Reasonablenesswas “In our opinion, the position of the Shareholders if the Proposed transaction is approved is more advantageous than the position if it is not approved. Therefore, in the absence of any other relevant information and/or a superior offer, we consider that the Proposed Transaction is reasonable for the Shareholders of Otis.”
"This was considered an advantage for several reasons. One was that from Oct 2013 to October 2014 the share prices had oscillated between.001 to .004. The report also pointed out the OE revenue was projected to go down in 2015. The value of ISX was assessed in this report as being between $6.7m and $7.9m. "
Furthermore, it states:
"If the milestone shares are issued to the Vendor then its interest in Otis will increase to 73.7%"
See the disadvantages pages of the report below.
Additionally, ASX approved the terms of the milestone shares in a letter of 2 December 2014, in which ASX states:
1.1. Considers that the terms of the 112,222,222 Class A performance shares, 112,222,222 Class B performance shares, 112,222,222 Class C performance shares prepared to be issued to iSignthis (together, the “Performance Shares”) as part of the Acquisition are appropriate and equitable for the purposes of listing rule 6.1 subject to the following conditions:"
Nowhere in its conditions does ASX attempt to define revenue as anything "tighter" than turnover. Nor does it specify that the turnover must be profitable to any extent. See the applicable part of the letter below.
ISX sold a business valued at between $6.7m and $7.9m for initial shares plus performance shares. Clearly this was a good deal for OE shareholders. Clearly, no-one cared how JK, advisors, and early investors earned their milestone shares or they would have objected to the terms having had it clearly pointed out. Therefore they explicitly gave the ISX management the right to earn them as they did in 2018 since 99% voted to approve.
It begs the question of why negative posters, ASX (who approved the terms), or any existing shareholder has any right to object to the earning of these shares or the level of ownership that JK, advisors, and early investors have in ISX.
On the matter of moving to another exchange: I do not want to leave the ASX, but will vote for it providing the ISX management believes it is best for the company considering the continued attack by ASX. I would also be willing to vote to stay where we are if the ASIC accepted the application by ISX under the Corporations regulations 7.2.16 where ISX asks ASIC to pick up and complete the investigation due to the fact that ISX is in competition with ASX.
For the sake of confidence in the Australian Financial and Equities Systems, ASIC needs to do this.
