News blog

Imaginatik

  • BY: Andrew Hore |
  • POSTED: 21/12/2010 |

On Wednesday (22 December) collaborative software developer Imaginatik is holding the EGM requisitioned by founder Mark Turrell in order to get himself back on the board.

Turrell also wants to remove chairman Matt Cooper and finance director Shawn Taylor from the Imaginatik board. They were instrumental in removing Turrell from the board back in June. Like many board departures “by mutual consent” it was not as agreeable as the statement would suggest. The background to the dispute is covered on Turrell’s blog (http://markturrell.wordpress.com/) starting back in August.

Turrell signed an agreement with the company at the time of his departure but he argues he was put in a position where he was forced to sign it. He also complains that he was unable to vote at a general meeting which passed a resolution that allowed Imaginatik to issue shares for a rescue fundraising. Imaginatik claims that many shareholders were unwilling to put additional funds into the company while Turrell was involved with the company.

Turrell is claiming unfair dismissal and taking Imaginatik to an employment tribunal in January.

Turrell owns 35% of Imaginatik. That puts him in a strong position. At the time of the announcement of the date of the EGM the board said it had the backing of shareholders with more than 50% of the company’s share capital. However, there is no official information that these shares will definitely be voted in support of the board.

The directors own 12% of Imaginatik and they will undoubtedly vote in favour of the board position. As Cooper is also a director of Octopus Investments, and it suggested that he became chairman of Imaginatik, that block of shares can be counted on. As Artemis bought a large chunk of its 13.6% stake in the rescue fundraising following Turrell’s departure it should also side with the board. These stakes alone take the board backing to over 30%.

That means that what the other shareholders decide to do will be key to the outcome. Major customer Pfizer was diluted by the rescue fundraising but it still has a significant stake. 

Turrell is critical about how the business is being run. Imaginatik started to disappoint in the six months to March 2010 and he was in charge for two months of the subsequent six month period to September 2010 when a loss of £1.42m was reported - which was similar to the loss for the previous 12 months. This may have been a convenient period to get rid of all of the nasties so that the second half can be better.

Imaginatik had net cash of £1.28m at the end of March 2010. In September, Imaginatik raised £800,000 at 1.5p a share - the board had earlier talked about having promises of £1m of investment. By the end of September 2010, the net cash position was £563,000. This shows just how fast cash has been flowing out of the business. 

Turrell believes he could have turned the business around. Cooper and Taylor disagree and argue that they have laid the foundations of an improvement in sales with new appointments in this area. 

The quicker the dispute is sorted out the better it will be for the company.

At 1.38p a share, Imaginatik is valued at £2.92m. 

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