The Battle For Lift Global Ventures
One of the more exciting eventualities on the stock market is that of an EGM – an extraordinary general meeting called by shareholders. Or as in the case of Lift Global Ventures (AQSE:LFT), a General Meeting (GM) in the title of the RNS announcement, but an EGM if you cared to click on the news. Few did. Therefore, even close watchers of the company of which I am CEO, did not notice that the week before last, that shareholders of Lift had moved to remove three directors of the company for various reasons as described in https://www.londonstockexchange.com/news-article/market-news/lift-global-ventures-egm-re-voting/17426348
One can read the gripes the Shareholder Action Group (SAG) in the link above, which was published as a RNS Reach, rather than a full RNS. It also did not tag the company, (some inexplicable issue with the London Stock Exchange), so unless you knew it was coming, or someone sent the link, you as a shareholder of the company would be unaware that there may be two sides to this story.
The three requisitioned directors published the still referred to a “GM” aka EGM RNS on January 14, and the reconvened (long story which I will return to) AGM RNS on January 16. But interestingly enough, the reconvened AGM is to be held 15 minutes before the EGM on February 10. This could mean in theory that the “Lift Three” are given the thumbs up at 11.30am, then the thumbs down minutes later. Or could be given the thumbs down, and then the thumbs up. This is more excitement than a Roman Amphitheatre with Emperor Nero. The SAG are insisting that the EGM should have been first, as it was announced first. More on this later.
At the heart of the bunfight, which is certainly the biggest one since Ernie, (The Fastest Milkman in the West) vs Two Ton Ted From Teddington (on the basis that we are talking a £400k market cap company, is the future strategy of the company. It was founded 4 years ago as a fintech investment SPAC. Ordinarily within 6-12 months there would have been a reverse takeover, and the current melodrama would never have happened. Unfortunately, it would appear that subsequently even if Elon Musk were to bid £10m for Lift, the board would not accept a deal. It just wants control of the vehicle.
Instead of “Zak’s SPAC”, Lift became an operating company with the well known Zaks Traders Café based financial PR company Miriad being acquired, and bringing home the bacon and avoiding fundraises / dilution, until a deal arrived. Soon after, in January 2023, a Ghana gas pipeline project was bought into, as can sometimes happen even if you are a fintech investment SPAC.
At the end of July last year, the cavalry arrived in the form of a couple of City heavyweights, fund manager Mark Horrocks, Lift’s largest shareholder, and David Richards, of Wandisco fame. This should have been transformational for the mini-microcap Lift and its sub £0.5m market cap, especially given the advertised AI investment strategy at a time when AI is hot. To further the strategy the Horrocks, Richards and existing director Sandy Barblett announced that in the December 12 AGM there would be a vote on a name change to Yorkshire AI Labs, raise up to £5m, and be able to issue as many shares as necessary to carry out the AI strategy. The long and short of this is that it was likely that existing shareholders would be significantly diluted, something that the company had hitherto taken great steps to avoid.
However, before High Noon on December arrived, the AGM was adjourned to give more for the “Lift Three” to take soundings as to what level of dilution / fundraising would be acceptable. The new level that is being put forward on February 10th is £1m and up to £0.5m worth of share issuance. Given the £400k market cap, one can once again do the math on a turkeys voting for Christmas basis, if you do not like dilution. If you do, of course, knock yourself out. This is especially the case that those who believe AI could turn Lift / Yorkshire AI, into the next SoftBank.
But there is more to the Lift EGM (not a GM, because that would be embarrassing). This is a story of the City Establishment closing ranks, all the more disappointing as I thought having gone to Harrow I was one of the Establishment. In fact, in recent weeks, I have had the kind of tellings off and wraps over knuckles that I managed to escape both at prep and public schools. It is really interesting to be classed as an errant schoolboy at the age of 59. Why? Because I am on the side of the shareholders who backed Lift and myself at the IPO in April 2022, many of whom are well known investors and brokers on the London small cap market.
An EGM is perhaps the most embarrassing thing that can happen to a listed company director. I would have to say that if I had been included in the Lift EGM, sorry GM, I would have resigned before it was called, or remedy whatever was being complained about. And yes, I might even have called it a GM rather than an EGM. Instead, I will be voting against the AGM (dilution) and in favour of the EGM on the basis that I know this is what the non-board shareholders of Lift want.
It is a no-brainer, and I will not be affected by the collusion against me by the City “Establishment”. This is especially the case in terms of members “Establishment” who are being paid for by revenues in Lift that have been generated myself. Presumably, these parties are betting on the “Lift Three” winning the EGM / AGM and them keeping their retainers.
I would have preferred a less partisan approach in the run up to February 10th, rather than obvious bias cloaked in language such as “we have taken legal advice”, “there are inaccuracies” and related snooty fobbing off in order to get rebels back on side. Of course, the Establishment never makes mistakes, like calling an EGM a GM, or relaying the views of all the members of a board of directors accurately. It makes no mistakes because it makes up the rules.
We are in a situation where the question is “whose company is it anyway?” and whether in appointing directors to a board one risks a Trojan Horse situation. At least Troy only had one. Shareholders in Lift will be voting on three, and whether their company has been hijacked by people who have saved the up to £500,000 it now costs to list a company.
This Week’s Small Cap Share Risers
One of the small cap explorer / developer aficionados that I used to interview most regularly was Colin Bird, of many small cap vehicles, including Bezant (BZT), Galileo (GLR) and Xtract Resources (XTR). Ironically, since the space Bird is in, explorer / developers, have rocketed as commodity prices have soared.
This week I interviewed the great man regarding his Kendrick Resources (KEN), and the company’s move into rare earths in Namibia. The result was a 83% share price rise on the week, something which is a good counterpoint to all the amateur hour, used car salesman with fictitious following than many listed company CEOs fall victim to.
It was a proper interview with a proper result. It was conducted on a platform which has more X followers than the Investors Chronicle, with someone who is actually a NUJ journalist, has been in the market 35 years, and is currently enjoying lots of high octane listed company experience themselves.
A company which managed to admit that it is having an EGM, and managed to fit this information into the top line of a RNS, was Goldstone (GRL). While we have know the potential of the company for quite some time, the clue is kind of in the name, the missing ingredient was funding, and this looks to have been sorted in the wake of news this week regarding a conditional £2m subscription. GRL shares jumped 113%, so yes, fundraises / dilution does not always kill a share price.
Another positive transformation came in the form of Amigo (AMGO) with its new focus on gold and rare earth mining opportunities in Africa, principally in Tanzania and Mauritania. Amigo is working with AK Corporation, a Dubai-based geological exploration technical partner, and its shares jumped 60% this week off the back of a corporate update.
Ajax Resources
At the other end of the scale in terms of age from the aforementioned Colin Bird, I also interviewed Ippolito Cattaneo, CEO of Ajax Resources (AQSE:AJAX). The AJAX example is an example of what happens when everything goes right for a small cap company in terms of management, corporate structure, sector, and perhaps that great mystery factor, luck.
Certainly the strategy of buying undervalued assets, many of whom have already had a lot of cash spent on them, has blended well with soaring commodities prices in recent months. The shares rose 125% on Aquis last year, and have already jumped 20% this year, helped along by aspects such as gold knocking on the door of $5,000.
Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.
