Disposal of Viewpoint and Rosslyn, Notice of GM

 

TIDMIQH 
 
RNS Number : 7033E 
IQ Holdings plc 
24 December 2009 
 
? 
24 December 2009 
 
 
 
 
IQ Holdings plc ("IQ Holdings", "IQH" or the "Company") 
(AIM: IQH) 
 
Proposed disposal of Viewpoint Field 
 Services Limited & Rosslyn Research 
Limited, 
Proposed cancellation of Share Premium Account, 
cancellation of Capital Redemption Reserve and 
 reduction of Share Capital, 
 
 Change in Investing Policy 
Notice of General Meeting 
 
 
 
 
IQ Holdings is pleased to announce that, subject inter alia to Shareholders' 
approval, it has entered into a conditional agreement to dispose of Viewpoint 
Field Services Limited ("Viewpoint" or "Viewpoint Field Services") and Rosslyn 
Research Limited ("Rosslyn") to Rivington Street Holdings plc ("RSH"), for a 
consideration of approximately 5,200,000 shares in RSH and the assignment from 
IQH to RSH, Viewpoint or Rosslyn of liabilities to the value of approximately 
GBP1.8million. 
 
 
Following the Disposal, the Company will have no remaining trading business and 
its principal asset will be its holding of RSH shares. It is intended that the 
majority of the RSH shares shall be distributed to IQ shareholders pro rata in 
relation to their existing holdings. The Company will retain approximately 
GBP50,000 of RSH Shares. 
 
 
IQ will then become an Investing Company under the AIM rules, with the proposed 
strategy to acquire or take an interest in a company or asset involved primarily 
in the real estate, manufacturing or marketing sectors. RSH is to make a loan of 
GBP50,000 to IQH to give it sufficient working capital to remain as an Investing 
Company on AIM for the next 12 months. 
 
 
A circular will be sent to shareholders today convening a general meeting of the 
Company for the purpose of seeking Shareholders' approval to the proposed 
disposal. 
 
 
 
 
For further information, please contact: 
+-------------------------------------------+----------------------------+ 
| IQ Holdings plc                           |                            | 
+-------------------------------------------+----------------------------+ 
| Julian Green                              |   Tel: [phone] | 
+-------------------------------------------+----------------------------+ 
 
 
+-------------------------------------------+----------------------------+ 
| Nominated Adviser:                        |                            | 
| Grant Thornton Corporate Finance          |                            | 
+-------------------------------------------+----------------------------+ 
| Gerry Beaney                              |  Tel: [phone] | 
+-------------------------------------------+----------------------------+ 
 
 
+-------------------------------------------+----------------------------+ 
| Nominated Broker:                         |                            | 
| Rivington Street Corporate Finance        |                            | 
+-------------------------------------------+----------------------------+ 
| Monisha Varadan                           |   Tel: [phone] | 
+-------------------------------------------+----------------------------+ 
 
 
+-------------------------------------------+----------------------------+ 
| Financial PR:                             |                            | 
| Bishopsgate Communications                |                            | 
+-------------------------------------------+----------------------------+ 
| Gemma O'Hara                              |  Tel: [phone] | 
+-------------------------------------------+----------------------------+ 
 
 
  Introduction 
 
 
It was announced on 20 November 2009 that, as a result of continuing difficult 
trading conditions, the Board had commenced a strategic review of the Company's 
operations. The Company has today announced that, subject amongst other things 
to Shareholders' approval, IQH has entered into a conditional agreement to 
dispose of Viewpoint Field Services and Rosslyn Research to PLUS quoted RSH. 
 
 
This is deemed to be a disposal resulting in a fundamental change of business 
for the purpose of AIM Rule 15 and therefore is subject to Shareholder approval. 
 
 
Background 
 
 
IQH reported unaudited interim figures for the six months to March 2009 showing 
turnover of GBP980,000 and a loss before tax of GBP298,000. As announced on 20th 
November 2009, continuing difficult trading conditions and the postponement of 
certain contracts means that the results for IQH for the year ended 30 September 
2009 will be significantly below market expectations. 
 
 
RSH currently owns 20,000,000 shares in IQ Holdings representing 1.58% of the 
equity. The SF t1ps Smaller Companies Growth Fund currently owns 110,000,000 
shares in IQ Holdings representing 8.70% of the equity and in September 2009 the 
SF t1ps Smaller Companies Growth Fund participated in a fundraise and acquired 
GBP75,000 convertible loan notes in IQ Holdings paying a coupon of 10%. Tom 
Winnifrith, CEO of RSH holds 250,000 shares in IQH representing 0.02% of the 
issued share capital. As the SF t1ps Smaller Companies Growth Fund is managed by 
T1M, a wholly owned subsidiary of RSH, even though the fund is a separate legal 
entity, the combined holdings of the fund, Tom Winnifrith and RSH are treated as 
a joint holding, therefore classifying the Disposal as a related party 
transaction under the AIM Rules. 
 
 
In order to grow the business, IQH would need to make acquisitions and at this 
current point in time, it does not have the cash resources to do. 
 
 
Accordingly the Independent Directors are recommending the Disposal to be in the 
best interests of the Company and the Shareholders as a whole. 
 
 
If approved, following the Disposal, the Company would become an Investing 
Company under the AIM Rules, with the proposed strategy to acquire or take a 
controlling interest in an asset or a company involved primarily in the real 
estate,manufacturing or marketing sectors as detailed in the Investing Policy 
section below. Under the AIM Rules the Investing Policy is subject to 
Shareholder approval. 
 
 
Consideration for the Disposal 
 
 
The consideration for the Disposal is 5,200,000 ordinary shares in RSH 
("Consideration Shares") (subject to possible variation as detailed in the 
paragraph titled "Principal Terms of the Disposal" below). At the closing market 
price of 29.50 pence per share as at 23 December 2009, being the latest 
practicable date prior to the posting of this document, the consideration is 
valued at GBP1,534,000. 
 
 
In addition, liabilities of approximately GBP1.8 million are to be assigned from 
IQH to RSH, Viewpoint or Rosslyn (including loans from and monies due to Bibby, 
HSBC and Media Square as further explained below) and RSH is to make a loan of 
GBP50,000 to IQH to give it sufficient working capital to remain as an Investing 
Company on AIM for the next 12 months. The loan is unsecured and will carry an 
interest of 4% above base rate on default. Further information regarding this 
loan can be found in the 'IQH Position following the Disposal'section below. 
 
 
Proposed distribution of RSH shares to Shareholders 
 
 
Following completion of the Disposal, the Company will have no remaining trading 
business and its principal asset will be its holding of RSH Shares. It is 
intended that the majority of the RSH Shares shall be distributed to 
Shareholders pro rata to their holdings (the Company will retain approximately 
GBP50,000 worth of RSH Shares). The result of this distribution is that 
Shareholders will themselves become shareholders in RSH. 
 
 
It is proposed that this distribution takes place in part by way of a 
distribution in specie to Shareholders and in part by way of a return of 
capital. 
 
 
RSH has agreed to waive its right to receive RSH Shares following the Reduction. 
 
 
In order to be able to make the proposed distribution of the RSH Shares to 
Shareholders, the Company needs to have distributable reserves. As explained 
below, the Company currently has a deficit on its profit and loss account. In 
order to create the necessary distributable reserves, the Company proposes to 
cancel its share premium account and its capital redemption reserve. It also 
proposes to reduce its share capital and to return part of the capital paid up 
on the Ordinary Shares to the Shareholders. The necessary Resolutions to effect 
the Reduction are to be proposed at the General Meeting, and are thereafter 
subject to the consent of the Court. 
 
 
Shareholders should note that share prices can go up or down and that the 
current share price of the RSH Shares may not be the price at which a 
Shareholder may eventually realise any RSH Shares they receive. 
 
 
A General Meeting has been convened for 10 am on 12 January 2010 for 
Shareholders to consider the Proposals. 
 
 
Principal Terms of the Disposal 
 
 
On 23 December 2009 IQH entered into a Sale and Purchase Agreement with RSH for 
the sale of the entire issued share capital of Rosslyn and Viewpoint Field 
Services, both wholly owned subsidiaries of IQH. 
 
 
The initial consideration for the purchase of the shares is 5,200,000 ordinary 
1p shares in RSH. At the closing market price of 29.5pence per RSH Share as at 
23 December 2009, being the latest practicable date prior to the posting of this 
document, the consideration is valued at GBP1,534,000. The final consideration 
payable is dependent on a creditors' statement to be produced 20 business days 
from the date of completion. The consideration payable will be adjusted as 
follows: 
 
 
     1)     If the specified creditors are more than GBP1,830,800 - the 
consideration shares shall reduce by 2 
 

            ordinary shares of 1p 
each for every pound that the specified creditors exceed GBP1,830,800 or 
 
2)     If the specified creditors are less than GBP1,830,800 - the consideration 
shares shall increase by 2 
 

            ordinary shares of 1p each for every 
pound that the specified creditors are less than GBP1,830,800 
 
 
The sale and purchase of Rosslyn and Viewpoint Field Services is conditional on 
a number of conditions being fulfilled including: 
 
 
     1)     the release 
of IQH from certain creditors including guarantees to Bibby and HSBC, the 
2009 
 

            convertible loan note holders and entry into the Media 
Square Settlement Agreement; 
     2)     cancellation of the 2007 warrants 
granted by the Company 
     3)     cancellation of the 2008 warrants granted 
by the Company; and 
     4)     Shareholder approval. 
 
 
IQH has also agreed for a period of two years following completion, not to 
compete with Rosslyn and Viewpoint Field Services in relation to the two 
businesses as carried on at completion and in relation to the brands represented 
by the two companies as at the date of such completion. 
 
 
Furthermore, in accordance with the terms of the SPA, IQH has undertaken, as 
soon as reasonably practicable, to apply to the Court for a confirmation of the 
Reduction to enable IQH to distribute the majority of the RSH Shares to 
Shareholders by way of a return of capital and/or dividend in specie. No later 
than 2 business days following confirmation by the Court, IQH will hold a board 
meeting at which it will declare the dividend in specie and effect the return of 
capital to Shareholders. 
 
 
Rationale for the disposal 
 
 
IQ Holding has been loss making since being admitted to trading on AIM and the 
expected benefits of a public listing have not been forthcoming. The economic 
downturn and difficult trading conditions have exacerbated the position. IQ 
Holdings does not have the critical mass to justify the cost of an AIM listing. 
Moreover, it does not have the cash to take advantage of the acquisition 
opportunities which exist in a fragmented market and with current market 
conditions, the Company is unable to raise sufficient funds to allow it to grow 
as it would wish. Therefore the directors have concluded that as an independent 
company it cannot generate meaningful returns for Shareholders. 
 
 
The consideration for the Disposal is to be RSH Shares but, as RSH is a quoted 
entity, Shareholders may be able to realise the RSH Shares they are to receive 
should they wish to do so. Shareholders will also be keeping a stake in IQH as 
an Investing Company with potential future upside if a suitable acquisition is 
identified and completed. 
 
RSH is believed to be an attractive acquirer. t1ps.com, the forerunner of RSH 
was established in April 2000 and has since then grown from a company employing 
one person to one employing 53. RSH has a consistent track record of 
profitability, cash generation and of adding value for shareholders. It also has 
a track record of buying smaller businesses and helping them grow. As part of a 
larger media group, it is expected that there will be cost savings and synergies 
following completion. Moreover RSH has cash which will allow the Rosslyn and 
Viewpoint operations to be expanded via acquisition thereby delivering further 
economies of scale and reaching critical mass. Further details of RSH are 
provided below. 
 
 
Based on an independent valuation report, the Independent Directors believe the 
consideration offered by RSH for Viewpoint and Rosslyn to be fair. The Directors 
believe Shareholder value can now best be delivered through the investment 
policy as set out in this document. 
 
 
Information about Rosslyn, Viewpoint and RSH is set out below. 
 
 
Rosslyn Research 
 
 
Rosslyn was acquired by IQH on 29th November 2007. Rosslyn was founded in 1979 
as a specialist agency for market research, opinion polling and business and 
management consultancy. Whilst Rosslyn has remained a relatively small and 
independent research agency, operating through an international call centre 
covering the major business languages of the world and via a network of partner 
agencies, it has been able to conduct research in countries in North America, 
South America, Europe and Asia. A proportion of Rosslyn's revenue is derived 
from traditional quantitative and qualitative research of an international 
nature. 
 
 
For the 12 month audited period to 30 September 2008, Rosslyn delivered turnover 
of GBP517,385 (2007: GBP497,000) and a loss before tax of GBP116,807 
(2007:GBP296,032). Unaudited management figures for the year to September 2009 
show turnover of GBP508,240 and a profit before tax of GBP45,388. 
 
 
 
 
Viewpoint Field Services 
 
 
Viewpoint Field Services comprises two divisions: Viewpoint Field and Viewpoint 
Studios. 
 
Viewpoint Field Services Limited was acquired by IQH on 29 January 2009. 
Viewpoint Field was established in 1990. It is a field force recruitment company 
which specialises in sourcing and recruiting respondents, who go on to attend a 
focus group, or another type of market researching session, such as a depth 
interview. Viewpoint Field can also provide suitable freelance moderators, whose 
role is to oversee focus groups, facilitate discussion and steer the structured 
conversation away from distracting themes. Viewpoint Field aims to offer a 
quality service, which involves monitoring respondent lists to ensure that 
respondents are not overly familiar with the market research process. Viewpoint 
Field has access to over 1,000 interviewers nationwide, including 50 medical 
interviewers and an in-house telephone unit. Viewpoint Field also provides 
quantitative face-to-face data collection services. Viewpoint Field operates 
from a large house in East Molesey, which also houses studios which are used for 
conducting focus groups as part of Viewpoint Studios' 'Studio' business. 
 
Viewpoint Studios was established in 1989. The business is based in two 
locations - East Molesey and Sunbury - both of which are conveniently located 
near to excellent transport links to central London, major motorways and 
Heathrow and Gatwick airports. The East Molesey complex includes three air 
conditioned studios, demonstration kitchens, flexible meeting spaces and access 
to a large garden. Sunbury has three air conditioned studios and two 
demonstration kitchens.Both sets of studios are equipped with what the Directors 
consider to be leading edge technology including wireless broadband, video 
conferencing, web streaming and facilities where the respondents can evaluate 
the 'usability' of internet sites. 
 
 
Unaudited figures provided in IQH's admission document in January 2009, show 
Viewpoint Division (the business of Viewpoint Field Services) achieving turnover 
for 12 months to 29 February 2008 of GBP3,450,000  and profit before tax of 
GBP393,000. Unaudited management figures for the 8 months to September 2009, the 
period under ownership of IQH, show turnover of GBP1,663,398 and profit before 
tax of GBP41,311. 
 
 
Rivington Street Holdings Plc 
 
 
RSH is a media and financial services group founded in 2004 and quoted on PLUS 
since November 2008. RSH provides a range of services to over 100 companies 
quoted on AIM and PLUS. It operates and generates revenues through 6 
subsidiaries. 
 
 
T1ps.com Limited 
 
 
T1ps.com, a company authorised by the Financial Services Authority is the oldest 
subsidiary and was set up in 2000 as a single tipsheet providing investment 
ideas to private investors. t1ps.com has grown both organically and through 
acquisition over the last 5 years. It currently owns 14 subscription websites 
and newsletters which provide investment ideas and research on various areas of 
the market. It also owns an independent research brand, Growth Equities and 
Company Research, which provides research on AIM and PLUS quoted companies. In 
addition, t1ps.com generates revenue through whitelabel sites, conferences and 
advertising. 
 
 
Bishopsgate Communications Limited 
 
 
Bishopsgate Communications Limited is a financial PR advisor to both AIM and 
PLUS quoted companies. It advises clients on PR strategy, drafts press releases 
and seeks to manage press coverage for its clients. 
 
 
Rivington Street Corporate Finance Limited 
 
 
Acquired in July 2007 as Lion Capital Corporation Limited, FSA authorised RSCF 
currently advises a number of companies quoted on AIM and PLUS. It provides 
broking services to its AIM clients, advisory services to its PLUS clients and 
acts as corporate finance advisor on one-off M&A and corporate restructuring 
projects. RSCF currently acts as AIM broker to the Company. In March this year 
RSCF acquired JP Jenkins Limited which provides an execution only share dealing 
service to its private clients and owns a match bargain trading facility for 
unquoted companies. The downturn in the market has resulted in an increase in 
the number of companies moving away from AIM and PLUS towards JP Jenkins Limited 
as a trading facility. 
 
 
T1ps Investment Management Limited 
 
 
T1ps Investment Management is an FSA authorised subsidiary providing investment 
management services to a range of funds. T1M manages 2 unit trusts focused on 
smaller quoted companies and gold exploration and production companies, a PLUS 
quoted investment vehicle investing in PLUS quoted companies and on 13 November 
2009 it launched its first EIS fund. The SF T1ps Smaller Companies Growth Fund 
was launched on 19 November 2007 and for the period up to 21 December 2009, the 
fund increased in value by 80.3% outperforming the UK Smaller Companies Index 
significantly, the benchmark index rose by 49.7%. (source: trustnet.com) 
 
 
Sharecrazy.com 
 
 
Sharecrazy.com is an internet portal that provides data and information on 
companies quoted on the London Stock Exchange and AIM. It provides an online 
'execution-only' share dealing service to its clients. Sharecrazy hosts a 
popular internet TV platform that showcases a range of shows. Sharecrazy.com is 
an authorised representative of Rivington Street Corporate Finance Limited. 
 
 
Commodity Watch and Oil Barrel 
 
 
In November 2008, Rivington Street Holdings Limited completed its IPO through a 
reverse into Commodity Watch Plc ("Commodity Watch"), then a PLUS quoted 
company. Commodity Watch is the owner of resources focused investor relations 
websites like Minesite.com. Minesite.com has successfully run investor 
conferences in London, Paris, Geneva and Zurich. It also hosts a website which 
provides news, information and independent commentary on mining companies across 
the world. In November 2008 RSH acquired Oilbarrel.com, a similar oil and gas 
focused website providing news and independent commentary on quoted and unquoted 
oil stocks across the world. Like Minesite.com, Oilbarrel.com runs successful 
investor focused conferences in London every month. 
 
 
Current Trading and Prospects 
 
 
For the 12 months to 31 August 2008, prior to the acquisition of Commodity 
Watch, RSH delivered group turnover of GBP3,774,343 (2007: GBP2,532,013) and 
EBITDA of GBP1,103,574 (2007: GBP337,459). 
 
 
Subsequently in the interim financial statement to 28 February 2009 published in 
April, RSH recorded net cash of GBP1,050,178. For the six months to 28 February 
2009 RSH posted group turnover of GBP1,899,519 (2008: GBP1,953,454). At the 
EBITDA level, RSH reported earnings of GBP236,581 (2008: GBP522,553). At the 
half year, RSH had a strong balance sheet reflecting its cash position, debtors 
of GBP1,209,437 and investments of GBP314, 578. The interim statement included a 
contribution of just three months from the newly acquired subsidiaries Commodity 
Watch and Oilbarrel.com and no contribution at all from the acquisition of JP 
Jenkins Limited which was announced on 10 March 2009. 
 
 
The directors of RSH are confident about the prospects for the company going 
forward and intend to publish the year end results of RSH to August 2009 
shortly. 
 
 
Agreement with main IQH creditors - HSBC, Bibby, Media Square 
 
 
Bibby 
 
 
Bibby Factors Slough Limited, an invoice factoring supplier to IQH, has provided 
both IQH and RSH an indicative term sheet, outlining the terms on which it will 
deal with Viewpoint and Rosslyn after completion. The terms are acceptable by 
both parties and at the time of completion, once approval has been sought from 
Shareholders, both IQH and RSH intend to enter into legally binding agreements 
with Bibby. The term sheet confirms that IQH will be released of all its 
obligations and guarantees as per the terms of the transfer to RSH. 
 
 
HSBC 
 
 
IQH has an outstanding loan facility with HSBC. HSBC has provided an indicative 
term sheet which outlines the terms on which HSBC is willing to transfer the 
loan facility to Viewpoint Field Services and Rosslyn. The terms are indicative 
and both IQH and RSH intend to enter into legally binding agreements with HSBC 
at the time of completion. The term sheet confirms that IQH will be released 
from all its obligations and guarantees as per the terms of the transfer to RSH. 
 
 
Media Square 
 
 
RSH, IQH, Viewpoint, Illuminas, Media Square and Turnbegin Limited intend to 
enter into the MSQ Settlement Agreement. The deed will deal primarily with the 
transfer of obligations of the Deferred Consideration to RSH following the 
acquisition of Viewpoint and Rosslyn. RSH will also agree to take on a number of 
liabilities in respect of the acquisition agreements signed at the time of the 
acquisition of Viewpoint and Wire in December 2008, including but not limited to 
rent on properties occupied by Viewpoint and unpaid creditors. 
 
 
RSH will also agree with Media Square that following the distribution of the 
Consideration Shares and in the event of a share buy back by RSH, RSH will be 
allowed to reduce the Deferred Consideration payable in accordance with the 
level of buy back. The terms, payment schedule and conditions of this agreement 
will be detailed in the MSQ Settlement Agreement. RSH, Illuminas and Viewpoint 
will also sign a Supply Agreement which outlines the terms upon which Viewpoint 
will provide its services to Media Square following the Disposal by IQH. 
 
 
Since Media Square is a substantial shareholder in IQH, the MSQ Settlement 
Agreement is deemed to be a related party transaction under AIM Rule 13. The 
directors, having consulted Grant Thornton Corporate Finance, consider the terms 
of the MSQ Settlement Agreement to be fair and reasonable in so far as the 
Shareholders are concerned. 
 
 
Proposed change of IQH Directors 
 
 
The following directors will remain on the board of IQH following completion of 
the proposed Disposal 
 
 
Timothy Michael Hearley (Non-Executive Chairman) 
John Mitchel (Director) 
 
 
Upon completion Julian Green, Neil McGowan, Joe Seydel and Gale Blears will 
resign as directors of IQH. The directors of Rosslyn and Viewpoint will keep 
their positions. 
 
 
IQH position following the Disposal 
 
 
Following the Disposal, IQH will have no remaining business and its principal 
asset will be its holding of RSH Shares. 
 
 
In order to allow the Company to meet its liabilities associated with 
maintaining its AIM trading facility and otherwise as they fall due, conditional 
upon the Disposal, RSH has agreed to make a loan of GBP50,000 to the Company 
which will be repayable upon the Company completing an acquisition. The loan is 
unsecured and interest is payable at 4% above base rate from default. The loan 
will be made available in two equal tranches of GBP25,000, one on completion of 
the Disposal and the second on demand. The loan will be repayable on completion 
of a reverse transaction by IQH. As this loan is being provided by RSH, it is a 
related party transaction for the purposes of the AIM rules. The Independent 
Directors having consulted with Grant Thornton Corporate Finance, consider that 
the terms of the transaction are fair and reasonable insofar as Shareholders are 
concerned. 
 
 
 
 
Proposed Investing Policy 
 
 
Following the Disposal, the Company will be classified under the AIM Rules as an 
Investing Company. Accordingly, the Company's new Investing Policy, details of 
which are set out below, is subject to the approval of Shareholders at the 
General Meeting. The Company will be required to make an acquisition or 
acquisitions which constitute a reverse takeover under the AIM Rules or 
otherwise implement its Investing Policy within 12 months of the General 
Meeting, failing which, the Company's Ordinary Shares would then be suspended 
from trading on AIM. If the Investing Policy is still not implemented within a 
further six months, the admission of the Ordinary Shares to AIM would be 
cancelled. 
 
 
IQH's proposed strategy is to seek acquisition opportunities in the real estate, 
manufacturing or marketing sectors. It will seek to make investments directly in 
real estate or acquire controlling interests in property, manufacturing or 
marketing companies. In particular, the Independent Directors believe that the 
Indian property market may offer attractive opportunities. They also consider 
that there may be attractive opportunities in the manufacturing or marketing 
sectors in the UK. 
 
 
These investments will be actively managed and it is anticipated will be held 
for the long term. 
 
 
 The Company will seek to raise further capital to deliver on its business plan 
either by way of equity or debt subject to the cash requirements appropriate for 
growing the business. 
 
 
 
 
Capital Reduction 
 
 
Introduction 
 
 
The Company's statutory accounts for the year ended 30 September 2008 show an 
accumulated deficit of GBP511,000 on its profit and loss account. Further 
difficult trading conditions mean that since the year end, the deficit on the 
Company's profit and loss account has continued to increase. 
 
 
At the same time, the Company's accounts showed a sum of GBP984,000 standing to 
the credit of the Company's share premium account. Since the year end, as a 
result of further allotment of shares, the Company's Share Premium Account has 
risen to GBP1,813,915.52. 
 
 
Following the capital reorganisation in January 2009, the Company also had 
3,370,643,640 Deferred Shares in issue. The rights attaching to the Deferred 
Shares on issue included, as set out in the Company's Articles of Association as 
Article 6.1.3 thereof, a right for the Company to appoint any person to execute 
on behalf of the holders of such Deferred Shares, a transfer of such shares to 
the Company without any payment therefore and without the sanction of the 
holders of the Deferred Shares. 
 
 
The Company proposes now to exercise its right under Article 6.1.3 to appoint a 
person to execute a transfer of the Deferred Shares to the Company. The Deferred 
Shares so transferred will be cancelled and the value of the share capital 
cancelled carried to a capital reserve in the Company's books called the Capital 
Redemption Reserve. This will result in a credit to the capital redemption 
reserve of GBP337,064.364. 
. 
Both the share premium account and the capital redemption reserve are 
undistributable reserves. Accordingly, the purposes for which a company can use 
any sums credited to those reserves are very limited. However, with the approval 
of Shareholders and the consent of the Court, a company may reduce or cancel its 
share premium account and capital redemption reserve. The reserves arising on 
such a reduction of capital may be used, inter alia, in diminishing or 
extinguishing a deficit on the Company's profit and loss account and, to the 
extent that they exceed such a deficit, in creating a distributable reserve 
which, subject to the protection of creditors, the Company may apply for the 
purpose of paying dividends to Shareholders and for other corporate purposes. 
 
 
The Company therefore proposes to cancel both of its share premium account and 
its capital redemption reserve and to apply the reserve arising on such 
cancellation first in eliminating the deficit on its profit and loss account and 
then in creating a substantial distributable reserve. 
 
 
At the same time, the Company also proposes to reduce its share capital by 
returning part of the capital paid up on the ordinary shares to the holders 
thereof. The proposed return of capital will be satisfied by the distribution to 
the holders of the Ordinary Shares (other than RSH which has agreed to waive its 
entitlement to receive RSH shares on return of capital) RSH shares currently 
held by the Company save for the GBP50,000 worth of RSH shares which the Company 
is obliged to retain in order to maintain sufficient net assets on its balance 
sheet. 
 
 
It is proposed that the Company's share capital be reduced to GBP50,559.47 (such 
sum representing an amount required to maintain the Company's status as a public 
company and to ensure that the Company can satisfy its liabilities for the 
following 12 months. As with the cancellation of the share premium account and 
of the Capital Redemption Reserve, the reduction of capital requires the 
sanction of a special resolution of shareholders and the confirmation of the 
Court. 
 
 
The Court application 
 
 
The cancellation of the Company's share premium account, the cancellation of the 
Capital Redemption Reserve and the reduction of the Company's share capital will 
only take effect if sanctioned by the Shareholders at the GM and confirmed by 
the Court and upon the appropriate documents being lodged with the Registrar of 
Companies. 
 
 
If Shareholders approve the Resolutions approving the reduction, at the GM, the 
Company intends to present an application to confirm the Reduction promptly 
thereafter. 
 
 
The Directors have been advised that, having regard to the circumstances at the 
date of this document the Court should confirm the Reduction. The Directors are 
not, however, able to guarantee the Court's confirmation of the Reduction. It is 
important to note that the Reduction will not take effect unless it is confirmed 
by the Court. 
 
 
The Directors have also been advised that the Court is likely to require that 
the Company give undertakings for the protection of the Company's creditors at 
the date that the reduction of capital becomes effective. The Company will give 
such undertakings to the Court for the protection of creditors as it may be 
advised are appropriate to be given. 
 
 
The application to the Court will be made as soon as practicable after the 
passing of the Resolutions and the procedure is expected to be completed within 
six to eight weeks. The Court order confirming the Reduction will then need to 
be registered at Companies House, which it is anticipated will be done 
immediately upon the Court Order being made. 
 
Summary of proposed changes to the Articles of Association 
 
 
Under the provisions of the Companies Act 2006, the concept of an authorised 
share capital is no longer recognised and, in particular, a company can increase 
its share capital simply by allotting shares. Further, the provisions of what 
was the Memorandum of Association have automatically become provisions of the 
Articles of Association as the position of the Memorandum of Association as a 
constitutional document has also been effectively abolished by that Act. 
 
 
The existence of an "authorised capital" clause of the sort which currently 
appears in clause 6 of the Company's Memorandum of Association consequently acts 
only as a limit or "cap" on the amount of capital which the Company is able to 
allot. Accordingly, the Company intends to remove the authorised capital 
provision which appeared in its Memorandum of Association and now forms part of 
its Articles so as to remove that limit. 
 
 
Recommendation 
 
 
Your Independent Directors believe that the Disposal is in the best interests of 
the Company and, having consulted with Grant Thornton Corporate Finance, 
consider that the terms of the proposed Disposal are fair and reasonable in so 
far as the Shareholders are concerned. 
 
 
The Directors believe that the Disposal, the proposed Capital Reduction and the 
approval of the Resolutions set out in the notice of the GM to be in the best 
interests of the Company and Shareholders as a whole. 
 
 
Accordingly the Independent Directors unanimously recommend that you vote in 
favour of Resolutions 1 to 7 to be proposed at the General Meeting as they 
intend to do so in respect of their own aggregate holdings of 8,854,167 Ordinary 
Shares in which they are interested representing approximately 0.7%% of the 
existing issued ordinary share capital of the Company. 
  DEFINITIONS 
The following definitions apply throughout this announcement unless the context 
requires otherwise: 
+-----------------------+---------------------------------------------------+ 
| "2007 Warrants"       | the warrants issued by the Company on 28 October  | 
|                       | 2007 to subscribe for shares in the capital of    | 
|                       | the Company pursuant to the 2007 warrant          | 
|                       | instrument;                                       | 
+-----------------------+---------------------------------------------------+ 
| "2008 Warrants"       | the warrants issued by the Company on             | 
|                       | 5 December2008 to subscribe for shares in the     | 
|                       | capital of the Company pursuant to the 2008       | 
|                       | warrant instrument;                               | 
+-----------------------+---------------------------------------------------+ 
| "Act"                 | the Companies Act 2006;                           | 
+-----------------------+---------------------------------------------------+ 
| "AIM"                 | AIM, a market operated by the London Stock        | 
|                       | Exchange;                                         | 
+-----------------------+---------------------------------------------------+ 
| "AIM Rules"           | the rules governing the admission to, and         | 
|                       | operation of AIM contained in the document        | 
|                       | entitled the "AIM Rules for Companies" published  | 
|                       | by the London Stock Exchange;                     | 
+-----------------------+---------------------------------------------------+ 
| "Articles"            | the Company's articles of association;            | 
+-----------------------+---------------------------------------------------+ 
| "Bibby"               | Bibby Factors Slough Limited;                     | 
+-----------------------+---------------------------------------------------+ 
| "Capital Redemption   | the Company's capital redemption reserve of       | 
| Reserve"              | GBP337,064.364 which will arise on the purchase   | 
|                       | by the Company of the Deferred Shares as more     | 
|                       | particularly described in this announcement;      | 
+-----------------------+---------------------------------------------------+ 
| "Circular"            | this GM circular dated 23rd December 2009         | 
+-----------------------+---------------------------------------------------+ 
| "Company" or "IQ      | IQ Holdings plc and its relevant subsidiaries as  | 
| Holdings" or "IQH" or | the context requires;                             | 
| "Group"               |                                                   | 
+-----------------------+---------------------------------------------------+ 
| "Court"               | the High Court of Justice in England and Wales;   | 
+-----------------------+---------------------------------------------------+ 
| "Deferred             | the total sum of GBP600,000 payable to Media      | 
| Consideration"        | Square under the terms of the acquisition         | 
|                       | agreement signed at the time of the acquisition   | 
|                       | by the Company of Viewpoint and The Wire in       | 
|                       | December 2008, payable as per the schedule in the | 
|                       | MSQ Settlement Agreement                          | 
+-----------------------+---------------------------------------------------+ 
| "Deferred Shares"     | 3,370,643,640 deferred shares of 0.01p each in    | 
|                       | the capital of the Company in issue at the time   | 
|                       | of this announcement;                             | 
+-----------------------+---------------------------------------------------+ 
| "Directors" or the    | the directors of the Company, whose names appear  | 
| "Board"               | in the Circular posted today;                     | 
+-----------------------+---------------------------------------------------+ 
| "Disposal"            | the proposed sale of Viewpoint and Rosslyn as     | 
|                       | explained in this announcement;                   | 
+-----------------------+---------------------------------------------------+ 
| "EBITDA"              | earnings before interest, tax, depreciation and   | 
|                       | amortisation;                                     | 
+-----------------------+---------------------------------------------------+ 
| "Form of Proxy"       | the form of proxy enclosed with this document for | 
|                       | use at the                                        | 
|                       | General Meeting;                                  | 
+-----------------------+---------------------------------------------------+ 
| "GM" or "General      | the general meeting of the Company convened for   | 
| Meeting"              | 10 a.m. on                                        | 
|                       | 12th January 2010 by the Notice of GM and any     | 
|                       | adjournment thereof;                              | 
+-----------------------+---------------------------------------------------+ 
| "Grant Thornton       | the corporate finance division of Grant Thornton  | 
| Corporate Finance" or | UK LLP which is authorised by the FSA to carry on | 
| "Nominated Adviser"   | investment business;                              | 
+-----------------------+---------------------------------------------------+ 
| "Grant Thornton UK    | A limited liability partnership registered in     | 
| LLP"                  | England and Wales whose principal place of        | 
|                       | business is Grant Thornton House, Melton Street,  | 
|                       | Euston Square, London, NW1 2EP and which is the   | 
|                       | UK member firm of Grant Thornton International;   | 
+-----------------------+---------------------------------------------------+ 
| "HMRC"                | Her Majesty's Revenue and Customs;                | 
+-----------------------+---------------------------------------------------+ 
| "HSBC"                | HSBC Bank Plc;                                    | 
+-----------------------+---------------------------------------------------+ 
| "Illuminas"           | Illuminas Limited, a wholly owned subsidiary of   | 
|                       | Media Square, incorporated in England and Wales   | 
|                       | with registered number 4273580;                   | 
+-----------------------+---------------------------------------------------+ 
| "IQ Research"         | IQ Research Limited, a wholly owned subsidiary of | 
|                       | the Company;                                      | 
+-----------------------+---------------------------------------------------+ 
| "Independent          | Timothy Michael Hearley, Neil Grant McGowan and   | 
| Directors"            | Joachim (Joe) Eberhard Seydel;                    | 
+-----------------------+---------------------------------------------------+ 
| "Investing Company"   | any AIM company, which has as its primary         | 
|                       | business or objective, the investing of its funds | 
|                       | in securities, business or assets of any          | 
|                       | description;                                      | 
+-----------------------+---------------------------------------------------+ 
| "Investing Policy"    | The investing policy proposed to be followed by   | 
|                       | the Company following the Disposal as explained   | 
|                       | in this announcement;                             | 
+-----------------------+---------------------------------------------------+ 
| "London Stock         | London Stock Exchange plc;                        | 
| Exchange"             |                                                   | 
+-----------------------+---------------------------------------------------+ 
| "Media Square"        | Media Square Plc incorporated in England and      | 
|                       | Wales with registered number 4006884;             | 
+-----------------------+---------------------------------------------------+ 
| "MSQ Settlement       | The agreement to be entered into by Media Square, | 
| Agreement"            | Illuminas, Viewpoint, Wire, RSH, IQH and          | 
|                       | TurnBegin Limited detailing the proposed plan     | 
|                       | with regards to the repayment of the deferred     | 
|                       | consideration and assumption of certain           | 
|                       | liabilities by RSH;                               | 
+-----------------------+---------------------------------------------------+ 
| "Notice of GM"        | the notice of GM set out at the end of this       | 
|                       | document;                                         | 
+-----------------------+---------------------------------------------------+ 
| "Ordinary Shares"     | ordinary shares of 0.01pence each in the capital  | 
|                       | of                                                | 
|                       | the Company;                                      | 
+-----------------------+---------------------------------------------------+ 
| "PLUS" or "PLUS       | the PLUS-quoted market operated by PLUS Markets   | 
| Markets"              | Group PLC which allows trading of shares in       | 
|                       | unquoted companies                                | 
+-----------------------+---------------------------------------------------+ 
| "Proposals"           | the Disposal, the Reduction and the change in     | 
|                       | Investing Policy;                                 | 
+-----------------------+---------------------------------------------------+ 
| "Prospectus Rules"    | the prospectus rules made by the Financial        | 
|                       | Services Authority                                | 
|                       | pursuant to section 73A of the Financial Services | 
|                       | and Markets                                       | 
|                       | Act 2000, as amended;                             | 
+-----------------------+---------------------------------------------------+ 
| "Reduction"           | together, the cancellation of the Company's share | 
|                       | premium account, the cancellation of the Capital  | 
|                       | Redemption Reserve the reduction of share         | 
|                       | capital;                                          | 
+-----------------------+---------------------------------------------------+ 
| "Resolutions"         | the resolutions set out in the Notice of GM;      | 
+-----------------------+---------------------------------------------------+ 
| "Rosslyn" or "Rosslyn | Rosslyn Research Limited, a wholly owned          | 
| Research"             | subsidiary of the Company;                        | 
+-----------------------+---------------------------------------------------+ 
| "RSCF"                | Rivington Street Corporate Finance Limited, a     | 
|                       | wholly owned subsidiary of Rivington Street       | 
|                       | Holdings Plc;                                     | 
+-----------------------+---------------------------------------------------+ 
| "RSH"                 | Rivington Street Holdings Plc;                    | 
+-----------------------+---------------------------------------------------+ 
| "RSH Shares" or       | Approximately 5.2 million shares of 1p each in    | 
| "Consideration        | RSH to be issued to the Company pursuant to the   | 
| Shares"               | SPA                                               | 
+-----------------------+---------------------------------------------------+ 
| "Shareholders"        | holders of Ordinary Shares;                       | 
+-----------------------+---------------------------------------------------+ 
| "SPA" or "Sale and    | the conditional agreement dated 23rd December     | 
| Purchase Agreement"   | 2009 relating to the Disposal, further details of | 
|                       | which are set out in this announcement;           | 
+-----------------------+---------------------------------------------------+ 
| "The Wire Services"   | The Wire Services (UK) Limited incorporated in    | 
| or "The Wire"         | England and Wales with registered number 6518386, | 
|                       | formerly a wholly owned subsidiary of the         | 
|                       | Company;                                          | 
+-----------------------+---------------------------------------------------+ 
| "T1M" or "T1ps        | T1ps Investment Management Limited, a wholly      | 
| Investment Management | owned subsidiary of RSH;                          | 
| Limited"              |                                                   | 
+-----------------------+---------------------------------------------------+ 
| "Turnbegin Limited"   | A company incorporated in England and Wales       | 
|                       | (company number 3346228), the sole director of    | 
|                       | which is John Green; and                          | 
+-----------------------+---------------------------------------------------+ 
| "Viewpoint" or        | Viewpoint Field Services Limited, a wholly owned  | 
| "Viewpoint Field      | subsidiary of the Company                         | 
| Services"             |                                                   | 
+-----------------------+---------------------------------------------------+ 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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