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Over the Edge

Sophisticated and complex high-risk tax-sensitive investments in small companies: handle with care
127tolmers
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Re: Over the Edge

#304531

Postby 127tolmers » April 30th, 2020, 2:54 pm

Well the board may have gone quiet on their planned Feb 2020 GM to decide on the Boards' recommendations for the future of the company but the investment manager is not silent. We are going to have an update on the portfolio before the auditors have even finished checking the valuations.

Edge Performance VCT - I Share valuations and update | IMPORTANT VIDEO CALL 11am Friday 1st May 2020 - PLEASE READ

I am writing to you as an I Shareholder in Edge Performance VCT in these extraordinary circumstances and at a time when COVID-19 is having an unprecedented impact on our lives and on business.
First, all of us at Edge hope you’re keeping well during this unsettling time, as many people across the country are fearing for their health, their families and their livelihoods. Edge’s purpose is to Solve Problems, Improve Lives and Advance the World. It is this purpose which drives why we come to work and this crisis is a call to action for all of us to show leadership. Right now, it couldn’t be clearer that we are all in this together. This is a health crisis, an economic crisis and a human tragedy. As leaders, we believe it falls to us to help build a better, fairer world. There is an opportunity, and we have a responsibility to rebuild our society and the economy. We face many challenges and it is our opportunity, our responsibility, our duty as leaders to improve what comes next.

Edge Performance VCT’s I Share portfolio comprises a very concentrated portfolio of two companies, comprising mainly of Coolabi, together with a small investment in Mirriad Advertising (a listed company). Both will be impacted to some extent by the current crisis but we are not able to support these businesses as a consequence of State aid rules.

As the value of formal reporting has become limited by the speed at which the pandemic is escalating, and all written reports will inevitably be out-of-date by the time delivered, we would like to invite you to join a video call with our senior investment management team to discuss and report on the portfolio.

This video-call is set for 11:00am on Friday 1st May. Please confirm your availability and we will provide you with an individual link to access the call.

We will be addressing a selection of questions from Shareholders which are asked in advance. If you have any questions you would like to raise with the Investment Manager please add these to your response when confirming your attendance.

Please let me know if it is your intention to join the video-call.

Regards David

David Glick | http://www.edge.uk.com | │ Direct: +44 20 7317 1317 │ Tel: +44 20 7317 1300

127tolmers
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Re: Over the Edge

#304698

Postby 127tolmers » May 1st, 2020, 9:24 am

Video calls cancelled!

Dear xxx,
With apologies for the short notice, as a consequence of a late arising technical issue we have decided to postpone the video calls scheduled for today (Friday 1 May) we will intend to reschedule and will provide details in due course.

Regards,
David
David Glick | http://www.edge.uk.com | │ Direct: +44 20 7317 1317 │ Tel: +44 20 7317 1300

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Re: Over the Edge

#305291

Postby 127tolmers » May 3rd, 2020, 12:05 pm

The video calls have (surprisingly) been rescheduled for Wednesday 13 May (I class 11am and H Class midday) for anyone interested.

Shareholders can contact David Glick or his PA Victoria Mills-Saunders at victoria.mills-saunders@edge.uk.com or 0207 317 1317 or
Victoria.Mills@edge.uk.com for dial in details.

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Re: Over the Edge

#306553

Postby 127tolmers » May 7th, 2020, 9:43 pm

https://www.londonstockexchange.com/exc ... XSSQ3.html

This would appear to replace the planned GM which is no longer mentioned.

Edge Performance VCT plc (the "Company")

Video Calls to Discuss Share Valuations and Portfolio Updates

11.00am and Noon, Wednesday 13 May 2020

The Company's board of directors (the "Board") is pleased to invite the Company's shareholders (the "Shareholders") to join either or both of the video calls to be hosted by Edge Investments Limited, the Company's investment manager (the "Investment Manager") on Wednesday 13 May 2020 at 11.00am (I share portfolio) and noon (H share portfolio). During each video call, members of the Investment Manager's senior investment management team will discuss and report on the respective portfolios.

The I share portfolio is a very concentrated portfolio comprising mainly of Coolabi, together with a small investment in Mirriad Advertising
(a listed company).

The H Share portfolio has been performing well recently and includes a number of highly regarded creative economy businesses.

1. Wednesday 13 May, 11.00am: I share portfolio call

2. Wednesday 13 May, noon: H share portfolio call

The Investment Manager intends to address a selection of questions from the Shareholders which have been submitted in advance of the calls. If you have any questions you would like to raise with the Investment Manager, please add these to your response when confirming your attendance on the video call.

To confirm your attendance on either video call, please email dglick@edge.uk.com specifying which video call(s) you would like to attend. The Investment Manager will send out invitation links.

7 May 2020

127tolmers
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Re: Over the Edge

#307113

Postby 127tolmers » May 10th, 2020, 6:37 am

https://www.sharesoc.org/blog/corporate ... -may-2020/

ShareSoc Action Group commentary excerpts.

EDGE Performance VCT Update 9 May 2020

At the 2019 AGM of Edge Performance VCT, all 3 directors who stood for re-election were not re-elected; nor were the auditors Grant Thornton. Subsequent to the 2019 AGM, the Company’s sole remaining director, Terry Back, re-appointed 2 of the 3 former directors.

ShareSoc launched a campaign in Jan 2020
to improve the performance of Edge Performance VCT Plc (consisting of H and I share classes) and reduce the fees charged by its investment manager, Edge Investments Limited.

Although we have not communicated formally with the campaign members since then, we have been working hard behind the scenes. But up to now there was no information which we thought was appropriate, or timely, to communicate, or that we could make public. We now note there is a webinar on 13 May, where hopefully the directors and manager will provide a useful update.............................................

A Shareholder Action group was formed in December 2019 and made contact with most of the larger shareholders. ShareSoc launched a formal campaign in Jan 2020 to improve the performance of Edge Performance VCT Plc (consisting of H and I share classes) and reduce the fees charged by its investment manager, Edge Investments Limited....................................


Edge Performance VCT has performed badly:

Funds in the limited life share class(es) (the majority of the money raised) were due to have been returned to shareholders between 2 and 7 years ago; shareholders who need to liquidate these holdings are faced with a very unpalatable bid price of about 11.5p. per I share.

The costs of what should be a very simple VCT to run are amongst the highest in the industry.

I and H shares rank 61 and 62 out of 62, over the past five years in TSR (total shareholder returns) terms, according to AIC stats. Note this statement was true when we made it January 2020. The data was before an H class exit which has subsequently improved the H class performance.................................


Our proposals

Progress with exiting the major investment (Coolabi) at a fair price should be the major priority for the Board.

A reduction in the operating expenses would help avoid yet further losses to shareholders in the meantime and will be essential to ensure the viability of the VCT once any proceeds from Coolabi are distributed to shareholders. Indeed, we think that a reduction from the current £1.5 million to an absolute maximum of £400,000 should be achievable for the whole company, whilst the I shares still have value, and even less thereafter.

We think 3 directors on a VCT of this size is sufficient.........................................


We should also remind you that I Class shareholders paid £595k of management fees and £624k of other expenses (of which £255k were administration services fees paid to the manager) in 2019 to manage the Edge VCT I class which effectively consisted of one investee company Coolabi, on whose board two Edge managers sat and were paid fees by Coolabi. This exorbitant cost and the long delay in selling Coolabi whose value has halved over the last 2 years formed the main platform for the ShareSoc Action Group’s concerns and case for action.

Clearly the meeting on 13 May will be crucial to the Action Group in deciding what we do next. We urge all shareholders to listen in.

We hope the announcement will present the work of the current Edge VCT Board’s promised review, but which has been strongly influenced and supported by continued pressure from ShareSoc, not least by proposing resolutions at the originally planned GM in Feb to replace several directors and to nominate 2 new more shareholder friendly directors which so many large shareholders supported.

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Re: Over the Edge

#308164

Postby 127tolmers » May 13th, 2020, 8:26 am

The gravy train continues for the manager for one more year but then a big fee cut proposed. As my American friends would say "One year to shape up or ship out"

https://www.investegate.co.uk/edge-perf ... 00036983M/

The Board is proposing to call a general meeting in order to discuss its plans with the Company's shareholders ("Shareholders"). In order to prevent a duplication of costs and given the proximity of the Company's 2020 annual general meeting ("AGM"), the Board has decided to bring forward the AGM, which will be immediately preceded by the proposed general meeting, to July.

The Board also announces that, following a tender process for the position of the Company's investment manager, it has appointed, subject to Shareholder approval, Edge Investments Limited ("EIL") under a substantially revised agreement that includes, inter alia: (i) with effect from 1 March 2021, a reduction of 'I' Share Class annual management fees from 1.75% of NAV to nil and (ii) with effect from the date of signing the revised contract, a removal of the cost cap, the exclusion of any performance incentive fee relating to the I shares and a change from a rolling 12 month notice period to a minimum 12 month notice period ending on the Company's year-end, the end of February each year. EIL is a related party of the Company under the Listing Rules and the revised investment management agreement requires the approval of Shareholders. A new Administration Agreement will also be entered into, subject to Shareholder approval, with Lupfaw 318 Limited trading as Fund Administration Services, a company of which David Glick is both a director and shareholder. Under this agreement the annual administration fees of £324,429 payable to EIL in 2020/21 will be reduced to £50,000 for year commencing 1 March 2021 and a rolling 12 month notice period will be changed to a minimum 12 month notice period ending on the Company's year-end.

The revised contracts are aligned with the Board's intention of seeking an early determination of the 'I' Share Class and a reduction in the ongoing administrative burden of the business whilst retaining the services of an investment manager with enormous sector experience and the ability to co-invest the VCT's funds alongside the Edge Creative Enterprise Fund.

In this context, the Board also now announces that, following the progress made by Coolabi (the Company's largest investment) over the past few years, Coolabi has appointed an adviser to consider the strategic opportunities open to it, including an outright sale of the business. As a consequence, a number of expressions of interest in acquiring Coolabi have been received. This process is ongoing but has been delayed by the COVID crisis. Coolabi has been doing well despite the crisis. Its target audience is at home so reading, watching and online consumption are all up and its nine months YTD trading results position it for a full year profit ahead of last year's. EIL is heavily engaged in the process and this was a significant factor in the Board's decision to re-appoint Edge Investments Limited subject to shareholder approval.

Festicket, another of the Company's significant investments, has been hit by the COVID crisis. The first two months of the current year showed continued growth, but the lockdowns around the world have heavily reduced its revenues. Nevertheless, Festicket is fundamentally a very good business and is finalising a new business plan which suggests that it may require additional funding in 2020. EIL has advised the Board that it is working with Festicket's management and other shareholders to finalise the amount of the funding requirement and an appropriate investment structure so that the Company could support the business if required and subject to VCT rule compliance.

The video calls to be hosted by EIL on Wednesday 13 May 2020 will include reports on Coolabi and Festicket but will not include discussion of the Board's plans and the recently concluded tender process. Shareholders will be asked to approve the appointments of Edge Investments Limited and Lupfaw 318 Limited trading as Fund Administration Services at the forthcoming general meeting before which the Board will circulate its plans together with the Company's 2020 Annual Report & Financial Statements.

The Board's earlier intention was to complete its strategic and cost review and hold a general meeting prior to the Company's year-end of 29 February 2020. The Board apologises to Shareholders for the delay in reaching this stage. This was caused by the volume of work involved in considering the significant number of options that the Board had open to it prior to finalising its strategy, followed by the inevitable delays caused by the COVID-19 lockdown. The Board felt very strongly, however, that Shareholders' interests were best served by carefully considering all options open to it.

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Re: Over the Edge

#308169

Postby BusyBumbleBee » May 13th, 2020, 9:08 am

Very interesting 127tolmers, Thank-you :)

Could this bit actually mean nearly two years notice?

127tolmers wrote:... and a change from a rolling 12 month notice period to a minimum 12 month notice period ending on the Company's year-end, the end of February each year.

The bit about Koolabi augurs well for Chrysalis.

kind regards - BBB

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Re: Over the Edge

#308406

Postby 127tolmers » May 13th, 2020, 8:08 pm

BBB, the Chrysalis board obviously took note.

https://www.londonstockexchange.com/exc ... 39287.html

The Company notes the comments made in an announcement today by Edge Performance VCT plc (“Edge”) about one of its investments, Coolabi plc, in which Chrysalis VCT also has a holding.

Edge’s announcement included the following:
“Coolabi has appointed an adviser to consider the strategic opportunities open to it, including an outright sale of the business. As a consequence, a number of expressions of interest in acquiring Coolabi have been received. This process is ongoing but has been delayed by the COVID crisis. Coolabi has been doing well despite the crisis. Its target audience is at home so reading, watching and online consumption are all up and its nine months YTD trading results position it for a full year profit ahead of last year's.”

At 31 October 2019, the investment in Coolabi represented approximately 27% of Chrysalis VCT’s net assets and comprises mainly of loan stock.

The Chrysalis VCT board and manager are monitoring developments with Coolabi and will update shareholders in due course when there are any significant developments or, in any event, in the Company’s Half Yearly Report for the period ended 30 April 2020 which is expected to be published in early July.

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Re: Over the Edge

#308667

Postby BusyBumbleBee » May 14th, 2020, 4:03 pm

Somebody else took note too and bought 20,000 at 40 pence at 11 a.m. : not sure that was wise really.

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Re: Over the Edge

#329531

Postby timbo003 » July 29th, 2020, 11:16 pm

The Edge annual report was published today along with an RNS concerning a directorate change :)

https://www.rns-pdf.londonstockexchange ... 0-7-29.pdf

https://www.investegate.co.uk/edge-perf ... 59265258U/

There hasn't been a Sharesoc update on this campaign for the last couple of months, but I would assume that Cliff will be writing something in the next day or two reflecting this section of the AR (page 6):

At the half year, I was looking ahead to holding a General Meeting in February 2020 to discuss the results of a strategic and cost cutting review. Unfortunately, there was much more work involved in these matters than I first envisaged and I apologise to shareholders for not completing on time. A significant feature of that work was extensive and robust dialogue with representatives of ShareSoc which, albeit that not all of their proposals were accepted, I am pleased to report, helped shape the terms of the agreements which will be presented to shareholders at a general meeting to be held on 28 August 2020.

The Board recommends that you vote for these agreements which have been endorsed by ShareSoc. I thank ShareSoc for its constructive engagement and welcome the agreement of one of its members, Robin Goodfellow, to serve as a director of the Company (see below).

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Re: Over the Edge

#329622

Postby sinterklaas » July 30th, 2020, 10:26 am

So there’s been an RNS, stating a new IMA is proposed:

https://www.investegate.co.uk/edge-perf ... 45276058U/

The body of the proposal is not included therein. It directs you to Edge Investments’s website, where unsurprisingly the document cannot be found.

Anyone seen a copy?

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Re: Over the Edge

#329679

Postby timbo003 » July 30th, 2020, 12:56 pm


sinterklaas
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Re: Over the Edge

#329810

Postby sinterklaas » July 30th, 2020, 6:20 pm

Ah thanks Tim!

What do you think of the proposal? They clearly havent fully given in to shareholder desires but… Enough amelioration, all things considered?

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Re: Over the Edge

#331784

Postby timbo003 » August 8th, 2020, 6:46 pm

See links below for ShareSoc's latest communication's regarding the forthcoming Edge VCT AGM which will be held on August 28th and a ShareSoc Webinar on Edge VCT which will be held on August 14th to discuss the issues around Edge VCT and should assist shareholders in making their decision on how to vote at the AGM

ShareSoc Seminar: https://www.sharesoc.org/sharesoc-news/ ... +-+Blog%29

Campaign letter to Shareholders: https://www.sharesoc.org/wp-content/upl ... 020-v6.pdf

The Proxy forms for the AGM don't need to in until August 26th, so shareholders will have up to 10 - 11 days after the seminar to ruminate before submitting their votes.

Shareholders will need to register with ShareSoc (a quick and painless process), if they wish to attend the seminar on the 14th.

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Re: Over the Edge

#332567

Postby CliffW8 » August 12th, 2020, 9:01 am

Crunchtime at EDGE Performance VCT as ShareSoc Campaign send letter to shareholders . Join our Webinar on 14 August 2020, at 4pm to hear more.
Further background is in this blog below and our letter.

to read the blog and register for the webinar goto https://www.sharesoc.org/sharesoc-news/ ... 20-at-4pm/
to download the letter goto https://www.sharesoc.org/wp-content/upl ... 020-v6.pdf

to find out more about the campaign https://www.sharesoc.org/campaigns/edge-vct-campaign/
to join the ShareSoc VCT Investor Group goto https://www.sharesoc.org/campaigns/vct-investors-group/

to join ShareSoc goto https://www.sharesoc.org/membership/full-membership/

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Re: Over the Edge

#334711

Postby timbo003 » August 20th, 2020, 4:55 pm

A recording of the Webinar and the Webinar slides are now available here:
https://www.sharesoc.org/seminar/shares ... -aug-2020/

After a brief introduction from Cliff Weight, there were short presentations from Richard Roth (ShareSoc Action group) , Robin Goodfellow (ShareSoc Action group and newly appointed Edge VCT Director), Aubrey Brocklebank (Edge VCT Director) and Terry Back (Edge VCT Director), this was followed by Q&As.

Robin and Richard played good cop/bad cop when presenting the arguments for voting for and against the new administrative services agreement (ASA), the new investment management agreement (IMA) and the re-election of certain directors.

Having listened to the arguments, I have now cast my votes (as an i class shareholder) in favour of the new ASA and the new IMA and I have voted against the re-election of two of the Directors (Terry Back and Sir Robin Miller)

The AGM and GM will be held on Friday 28th August

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Re: Over the Edge

#337538

Postby timbo003 » September 2nd, 2020, 8:01 am

The proxy results from the AGM and GM were announced yesterday

All resolutions were passed, but there were quite significant votes against three of the four directors, which exceeded 20% in the case of Sir Robin Miller

22.38 per cent of votes were cast against the Board's recommendation that Sir Robin Miller be re-elected as a director of the Company. Under the UK Corporate Governance Code, when 20 per cent or more of votes have been cast against a resolution recommended by the Board, the Company should explain what actions it intends to take to consult shareholders in order to understand the reasons behind the result.

The Chairman's Statement in the 2020 Annual Report & Financial Statements reported that Sir Robin had signalled his intent to step down from the Board shortly after the appointment of Sir Peter Bazalgette who will be invited to join the Board in Autumn 2020. Such developments will be reported to the market as they occur.

The Board, through Directors' direct contact with shareholders and discussions with ShareSoc before the annual general meeting, was aware that there may be a significant vote against the re-election of Sir Robin and had heard the arguments for such a vote. It is the Board's view, therefore, that it understands the reasons behind the result and no further consultation on this point is required.


GM: https://www.investegate.co.uk/edge-perf ... 54536588X/

AGM: https://www.investegate.co.uk/edge-perf ... 55166583X/

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Re: Over the Edge

#341957

Postby timbo003 » September 22nd, 2020, 2:10 pm

Edge VCT released a NAV update for the "h" shares yesterday afternoon

https://www.londonstockexchange.com/new ... s/14693211


The Company is pleased to announce that subsequent to Unity Software Inc's ("Unity") Initial Public Offering to the New York Stock Exchange on Friday 18 September 2020, the value of the Company's holding in Unity has increased from £1.78m to £4.43m. This is an increase of £2.65m (148.88%) on the valuation underlying the Company's updated (unaudited) NAV as at 31 March 2020 (as notified in RNS Number 3780k of 21 April 2020). This increase is based on Unity's IPO price of $52 per share, and an exchange rate of $1: £0.77.

Unity is held as part of the Company's H share class investment portfolio, increasing the unaudited Net Asset Value ("NAV") of this class of share from £7.69m as at 31 March 2020 to £10.34m (an increase of 34.46%), and the Company's unaudited NAV from £27.69m as at 31 March 2020 to £30.34m (an increase of 9.57%), prior to any other revaluation of assets for the Company's half-yearly report to the end of August 2020.

The Board emphasises that the above NAVs as at 31 March 2020 and again at 18 September 2020 are unaudited. The preparation of the Company's half-yearly report for the six month period ended 31 August 2020 is currently underway.


Since the IPO on Friday, Unity's share price has increased from $52/share to around $75/share
https://finance.yahoo.com/quote/U?p=U

I assume that one of the main reasons for a strong start for the Unity share price is due to the news this week that Microsoft are to buy the Games developer Bethesda for $7.5Bn
https://www.bbc.co.uk/news/54233235

With the Unity share price at around $75, the Edge "h" share NAV should stand at around 106p/share (every $1 change in the share price of Unity corresponds to a 0.73p change in the "h" share NAV/share), the "h" shares are currently quoted at 47p - 57p which is quite a hefty discount given that it seems reasonably likely that the VCT will soon resume share buybacks in preparation for a fund raising some time in the current tax year.

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Re: Over the Edge

#356291

Postby 127tolmers » November 13th, 2020, 5:32 pm

Unity Software now trading over $114.

3Q results out yesterday. Worth a read.

https://investors.unity.com/news/news-d ... fault.aspx

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Re: Over the Edge

#360259

Postby timbo003 » November 26th, 2020, 12:48 pm

It looks like we will have to wait until mid December for the interim results which should include an update on Koolabi and the NAVs of the two share classes (see yesterday's announcement)
https://www.investegate.co.uk/edge-perf ... 43564829G/

Also I see that this morning they have declared a 4p/share dividend for the H shares which is welcome
https://www.investegate.co.uk/CompData. ... ouncements

Meanwhile the share price of the largest asset in the H share portfolio (Unity Software) goes from strength to strength, last night it stood at $138.5/share (up from $52/share at the IPO in September), so assuming nothing else has changed since the last NAV update and he manager hasn't sold any Unity yet, the NAV of the H shares should now be 152 pence or thereabouts. The current quote is 65-76p, so that's quite a chunky discount.


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