Board Response to Announcement by OTT Holdings

RNS Number : 9373L

Iconic Labs PLC

18 January 2021

 

Iconic Labs Plc ("Iconic Labs" or the "Company")

Board Response to Announcement made by OTT Holdings

Iconic Labs Plc (LSE:ICON), a multidivisional new media and technology business, notes the content of a press release issued by OTT Holdings Limited ("OTT Holdings") on 15 January 2021 ("Press Release") which makes various allegations against the Company and its board of directors ("Board").

The Board do not accept the allegations and assertions made in the Press Release which are wholly denied and wish to draw shareholders attention to the following points:

· To date the Company has not received a valid requisition notice to convene a general meeting

· The Board has not called a general meeting of its shareholders and no general meeting is scheduled to take place

· Notwithstanding OTT Holding's claim in the Press Release, that they are the "holder of 5,735,555,554 shares" in the Company, OTT Holdings is not registered as a holder of any shares in the Company by the Company's share registrar

· Initial enquiries suggest that OTT Holdings is a Cyprus based developer of hotels, and which does not appear to have any commercial interest or experience in the social media and publishing industry in which the Company conducts its operations

· As part of the process of being satisfied as to who is the ultimate owner of these shares (and whether there are any connected parties acting in concert), the Company is seeking to clarify how the ultimate owner of these shares acquired them, on what basis and whether they are acting in concert with other shareholders

Further, the Board notes the allegations made by OTT Holdings in the Press Release concerning an alleged lack of commercial progress which is completely refuted by the Board. The Company has continued to make substantial progress in increasing the revenues and developing the operations of the Company, enabling it to move towards its aim of being profitable. In the last 22 months the Board has had to restructure the previous WideCells business that was close to insolvency and has built a new media business from zero revenues to now running at an annual revenue run rate of over £1m a year. The large majority of these revenues come from management service agreements which Iconic was only able to obtain because of the skills and experience of the Board in managing digital media businesses. It should also be noted that during the last 20 months, the Board members and the Company's advisors have deferred substantial parts of their salaries and fees in order to invest in the growth of the Company.

The Company agrees that OTT is correct in identifying that the involvement of European High Growth Opportunities Securitization Fund ("EHGOF") in the Company pre-dates the involvement of any of the current board members or David Sefton. 

It is also noted that the Board inherited the convertible financing structure put in place by the previous management team with EHGOF and subsequently the Board has been very clear that it believes the share price of the Company has been negatively affected by this type of facility

The facility with EHGOF was terminated by the Company when EHGOF refused to provide the investment monies due under a loan note for which it had subscribed. The Company considers the obligation to provide investment monies was, following a subscription for the loan notes by EHGOF, unconditional and was the sole purpose of the Company entering into the facility. This followed several instances of EHGOF being late in providing investment monies when obliged to do so, but the Company does not know the reason why monies were being withheld by EHGOF. Following the termination of the facility with EHGOF, Alpha Blue Ocean ("ABO"), on behalf of EHGOF, then, in the Company's view, reneged on an agreement in principle for settlement of all outstanding loan notes. The Company has always been and remains open to reaching a settlement agreement with EHGOF on commercially practical and sensible terms.

The Board is aware that if the proposals referred to in the OTT Holdings Press Release in respect of changing the composition of the Board at a general meeting were ever to be effected, this would give Greencastle Capital a right (which it can exercise at its sole discretion) to terminate either or both of the management services agreements that exist between Greencastle Capital and the Company, and which are in respect of the JOE Media and TheLondonEconomic businesses.  Given that the management services agreements constitute the large majority of the revenues the Board does not believe this would be in the best interests of its shareholders as a whole.

It should be noted that the Board is united in respect of these matters and were the proposals suggested by OTT Holdings in its Press Release as to the changing of the composition of the Board to be effected then all of the members of the Board would resign. 

Finally, despite the allegations made by OTT Holdings in the Press Release, the Board remains resolute that it will seek to act in the best interests of its shareholders and stakeholders as a whole.  For the avoidance of any doubt, the Board as a collective will seek to protect the reputation of the Company and its Board and take all actions that are necessary to do so.

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information for the purposes of the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

**ENDS**

For further information, please visit the Company's website www.iconiclabs.co.uk or contact:

Damon Heath

Shard Capital Partners LLP

Tel: [phone]

Iconic Labs [e-mail]

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