TIDMINX
RNS Number : 3632D
i-nexus Global PLC
21 June 2023
THIS ANNOUNCEMENT, INCLUDING THE APPIX, AND THE INFORMATION
CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION
OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN,
INTO OR FROM THE UNITED STATES, CANADA, JAPAN, RUSSIA, THE REPUBLIC
OF SOUTH AFRICA, AUSTRALIA, NEW ZEALAND OR ANY OTHER JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF THAT JURISDICTION. PLEASE SEE THE IMPORTANT NOTICES
AT THE OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMATION,
OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE
OR DISPOSE OF ANY SECURITIES IN I-NEXUS GLOBAL PLC OR ANY OTHER
ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT
OF ITS DISTRIBUTION, SHALL FORM THE BASIS OF, OR BE RELIED ON IN
CONNECTION WITH ANY INVESTMENT DECISION IN RESPECT OF I-NEXUS
GLOBAL PLC.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF EU REGULATION 596/2014 as retained as part of UK
law by virtue of the European Union (Withdrawal) Act 2018 as
amended ("MAR"). . Upon the publication of this Announcement, this
inside information is now considered to be in the public
domain.
i-Nexus Global PLC
("i-Nexus", the "Company" or the "Group")
Proposed issue of GBP0.5 million of Fixed Rate Unsecured
Convertible Loan Notes; and
Extension of 2020 and 2021 Convertible Loan Notes
The Company announces that it is proposing to raise in aggregate
GBP0.5 million (before expenses) by way of the issue of GBP0.5
million of Fixed Rate Unsecured Convertible Redeemable Loan Notes
("2023 Convertible Loan Notes") (the "Proposed Transaction"). The
2023 Convertible Loan Notes will be unlisted and non-transferable
and no offer or invitation is being made to shareholders more
generally to purchase, acquire or subscribe for any of the
Convertible Loan Notes in conjunction with the Proposed
Transaction.
Furthermore, the Company also announces today that it has agreed
with the holders of both the 2020 Convertible Loan Notes and the
2021 Convertible Loan Notes (having passed the necessary written
resolutions) to extend the nal redemption dates from 4 November
2024 to 4 November 2025 in respect of the 2020 Convertible Loan
Notes and from 29 September 2024 to 29 September 2025 in respect of
the 2021 Convertible Loan Notes. Other than the final redemption
dates, the terms of the 2020 Convertible Loan Notes and the 2021
Convertible Loan Notes, as previously announced, remain
unchanged.
Highlights
-- Proposed issue of GBP0.5 million of Fixed Rate Unsecured Convertible Redeemable Loan Notes
-- The net proceeds of the issue of the 2023 Convertible Loan
Notes of GBP0.5 million will provide much needed additional working
capital to allow the emerging sales and pipeline momentum to be re
ected within operating results and cash ow and will be applied
entirely towards meeting the Company's ongoing working capital
requirements.
-- The Convertible Loan Notes are unsecured and
non-transferrable and no application will be made for their
admission to trading on any recognised securities exchange.
-- The holders will have the right to convert the Convertible
Loan Notes they hold into ordinary shares of GBP0.10 each in the
capital of the Company ("Ordinary Shares") at a price of 10 pence
per Ordinary Share (the "Conversion Price") at any time on or prior
to 7 July 2025.
-- The Conversion Price represents a premium of approximately
166.7 per cent. to the closing middle market price of 3.75 pence
per Ordinary Share on 20 June 2023, being the latest practicable
trading day prior to the publication of this Announcement.
-- Richard Cunningham, the Non-Executive Chairman, has agreed to
participate in the Proposed Transaction and has agreed to subscribe
for the 2023 Convertible Loan Notes following the passing of the
resolutions by Shareholders at a general meeting of the Company
("General Meeting") ("Resolutions") as proposed in a circular,
which will shortly be despatched to Shareholders ("Circular").
-- The Directors other than Richard Cunningham (the "Independent
Board") are strongly of the belief that the issue of the 2023
Convertible Loan Notes is the best available option for securing
further investment in the near term, having regard to the
desirability of demonstrating increased funding headroom and
exibility within a limited timeframe.
-- The Proposed Transaction is conditional on the passing of the
Resolutions by Shareholders at the General Meeting, including a
special resolution which will give the Directors the required
authority to disapply statutory pre-emption rights in respect of
the potential future issue of new Ordinary Shares upon conversion
of the 2023 Convertible Loan Notes.
Simon Crowther, CEO of Solution, commented:
" Having made good progress on increasing our sales pipeline,
adding new logos and expanding the use of our software within
existing customers, we felt that the time was right to provide the
business with a cash buffer to enable a greater focus on the
execution of the strategy. We are once again very grateful for the
support of our investors in providing us with this funding and look
forward to continued steady progress in the months ahead. These
growing proof points of success underline our confidence in our
offering and ability to play a leadership role in the maturing
market for strategy execution ."
Capitalised terms used but not defined in this announcement
shall have the meanings set out in the Circular.
1. Introduction
On 28 April 2023, the Company issued its interim results, which
included a statement that the Board was considering the available
options at its disposal in order to strengthen the Group's cash
position.
The Company announces today that it has concluded this review
and is proposing to raise in aggregate GBP0.5 million (before
expenses) by way of the issue of 2023 Convertible Loan Notes to the
Investors. The 2023 Convertible Loan Notes will be unlisted and
non-transferable, and no offer or invitation is being made to
Shareholders more generally to purchase, acquire, or subscribe for
any of the 2023 Convertible Loan Notes in conjunction with the
issue of the 2023 Convertible Loan Notes. The Company completed
previous issues of convertible loan notes in November 2020 and
September 2021 and the 2023 Convertible Loan Notes now proposed to
be issued carry substantially equivalent terms to those previously
issued.
The Company also announces today that it has agreed with the
holders of both the 2020 Convertible Loan Notes and the 2021
Convertible Loan Notes (having passed the necessary written
resolutions) to extend the nal redemption dates from 4 November
2024 to 4 November 2025 in respect of the 2020 Convertible Loan
Notes and from 29 September 2024 to 29 September 2025 in respect of
the 2021 Convertible Loan Notes (both referred to as the
Extensions). Other than the nal redemption dates, the terms of the
2020 Convertible Loan Notes and the 2021 Convertible Loans Notes,
as previously announced, remain unchanged.
Richard Cunningham, the Non-Executive Chairman and Herald, both
of whom hold 2020 Convertible Loan Notes and 2021 Convertible Loan
Notes and both of whom signed the written resolutions agreeing to
the Extensions, have also agreed to participate in the issue of the
2023 Convertible Loan Notes and, subject to the passing of the
Resolutions by Shareholders at the General Meeting, will subscribe
for 2023 Convertible Loan Notes. Both Richard Cunningham and
Herald's agreement to the Extensions and their participation in the
issue of the 2023 Convertible Loan Notes (referred to as the
Proposed Transactions) are related party transactions for the
purposes of Rule 13 of the AIM Rules and, as a result, Richard
Cunningham has not been involved in the decisions taken by the
Board to proceed with the Proposed Transactions and, for the
purposes of the Proposed Transactions, David Firth is the Company's
Independent Non-Executive Director and is issuing this letter to
the Company's Shareholders.
As further explained under paragraph 2 below, the Independent
Board is strongly of the belief that the issue of the 2023
Convertible Loan Notes is the best available option for securing
further investment in the near term, having regard to the
desirability of demonstrating increased funding headroom and
exibility within a limited timeframe.
The issue of the 2023 Convertible Loan Notes is conditional on
the passing of the Resolutions by Shareholders at the General
Meeting, including a special resolution which will give the
Directors the required authority to disapply statutory pre-emption
rights in respect of the potential future issue of new Ordinary
Shares upon conversion of the 2023 Convertible Loan Notes.
The purpose of the Circular is to outline the reasons for, and
provide further information on, the Proposed Transactions and to
explain why the Independent Board believes this to be in the best
interests of the Company and its Shareholders as a whole.
In the Circular, you will nd a notice of the General Meeting at
which the Resolutions will be proposed to approve the issue of the
2023 Convertible Loan Notes. The General Meeting is expected to be
convened for 11.00 a.m. on 7 July 2023 at Saffery Champness, 71
Queen Victoria Street, London, EC4V 4BE.
Your attention is also drawn to the summary of the key terms of
the Convertible Loan Notes in the Appendix of this
announcement.
The Independent Board strongly believes that the Proposed
Transactions are in the best interests of the Company and its
Shareholders as a whole. The Independent Board also stresses that
it is very important that Shareholders vote in favour of the
Resolutions proposed at the General Meeting, as those Directors who
hold Ordinary Shares intend to do. The Independent Board believes
that if the Resolutions are not passed at the General Meeting and
so the issue of the 2023 Convertible Loan Notes does not proceed,
then in the absence of available alternative sources of funding, it
is likely that the Company will be required to employ mitigating
actions to ensure it continues to operate within the cash resources
currently available to it. This would increase the liquidity risk
posed should any customer delay payment and would constrain
management's ability to focus their efforts on more strategic areas
of the business.
2.Background to and reasons for the Proposed Transactions
The Company saw an improvement in new business generation in
FY22, securing a record nine new customers alongside a considerable
improvement in renewal rates with existing customers. As a result
of this positive progress, the Board took the decision within the
second half of the financial year to accelerate a select number of
essential investments, both in its existing employee base to
preserve retention and in additional resources needed for
operational delivery. While this increased the Company's recurring
cost base and subsequently reduced cash reserves, these investments
ensured the successful delivery and deployment of the new logos,
several of which have since extended their use of the i-nexus
software highlighting the speed of value being derived from the
product alongside the increased market need for digitalised
strategy solutions.
These extensions, combined with the delivery of a further five
new logos during H1 of FY23, saw the Company's MRR grow by 25 per
cent. to GBP281,000 on an annualised basis for the 12-month period
to 31 March 2023. Following the conclusion of this essential
investment plan in early FY23, there are no further plans to
increase the cost base of the Company until such time as revenue
growth delivers a position of at least Adjusted EBITDA breakeven,
with the strategic objective to build a cash buffer thereafter.
Pipeline activity and in particular the number of prospects that
are undertaking trials or pilots continues to be encouraging,
providing confidence in continued revenue growth with an
increasingly remote or hybrid workforce across multiple industries
driving the need for scalable, robust, digital strategy execution
tools.
Nevertheless, prior to the Company achieving a position of at
least Adjusted EBITDA breakeven, the seasonality of customer
renewals means that continued careful cash management is required
as the Company approaches the end of its financial year, a
forecasted cash low point, increasing the risk posed should any
customer delay payment. Were delays to arise, the Company would
need to implement potentially operationally harmful mitigating
actions.
The Company's Outlook statement within the Interim Results,
released on 28 April 2023, stated that whilst the business has
clear visibility of its cash runway, the Board recognised that the
continued efforts in managing our cash resources required
consideration of the available options at its disposal in order to
strengthen the Group's cash position. The Board is mindful of
ensuring suf cient liquidity within the business should a downside
scenario emerge in order to relieve pressure at the end of the FY23
nancial year, and provide the management team with the ability to
focus their efforts on more strategic areas of the business such as
delivering on its pipeline opportunities and realising the growing
expansion opportunities within its customer base, without the need
to employ potentially operationally harmful mitigating actions.
The Independent Board have concluded that, in view of the
continued challenges in the Group's current and near term forecast
cash position, that it is desirable to create additional working
capital headroom and that the issue of the 2023 Convertible Loan
Notes is the best available option for securing such investment
within a limited timeframe.
The Independent Board also concluded that the Extensions would
similarly assist the Group with its working capital headroom in the
near future and would enable the Group to focus its efforts on
delivering on its pipeline opportunities and realising the growing
expansion opportunities within its customer base.
3. Current Trading & Prospects
At the time of its Interim Results, the Company stated that it
was on track to deliver improved double-digit net MRR growth in
FY23, capitalising on the increased opportunities within its
installed user base and strong prospect pipeline. Subsequent to
this announcement, whilst the current expectation is that this
statement will hold true, new revenue delivery during Q3 has
moderated against forecast levels with most H2 new business and
expansion opportunities now anticipated to land during Q4.
Consequently, the delays experienced by the Company in realising
these opportunities increases the pressure on cash flow,
particularly as the Company approaches the forecasted low point at
the end of the financial year, and highlights the essential need
for the management team to focus their efforts on strategic areas
of the business.
4.The 2023 Convertible Loan Notes
The Company has entered into the Convertible Loan Note
Instrument pursuant to which the Company has created 2023
Convertible Loan Notes of an aggregate principal amount of GBP0.5
million. The issue of the 2023 Convertible Loan Notes is
conditional only upon the passing of the Resolutions at the
proposed General Meeting.
The 2023 Convertible Loan Notes are unsecured and
non-transferrable, and no application will be made for their
admission to trading on any recognised securities exchange.
The Convertible Loan Note Instrument gives the holders of the
2023 Convertible Loan Notes the right to convert the 2023
Convertible Loan Notes they hold into Ordinary Shares at a price of
10 pence per Ordinary Share, equal to the nominal value of each
Ordinary Share (which represents a premium of approximately 166.7
per cent. to the closing middle market price of 3.75 pence per
Ordinary Share on 20 June 2023, being the latest practicable
trading day prior to the date of this announcement) at any time on
or prior to 7 July 2025.
Further details of the key terms and conditions attaching to the
2023 Convertible Loan Notes are set out in the Appendix of this
announcement.
The Investors have entered into irrevocable undertakings with
the Company whereby each Investor has agreed irrevocably and, save
only for the passing of the Resolutions at the General Meeting,
unconditionally to subscribe for an aggregate amount of GBP500,000
of 2023 Convertible Loan Notes:
Subscriber Aggregate Issue Price
Herald GBP420,000
Richard Cunningham GBP30,000
Financiere de l'Audiovisuel GBP30,000
Siobhan Adele Robinson GBP20,000
Total GBP500,000
Upon the passing of the proposed Resolutions, the Company shall
issue the 2023 Convertible Loan Notes to the Investors and execute
and deliver certificates in respect of the 2023 Convertible Loan
Notes in the aggregate amounts finally subscribed for.
Following publication of the Circular, a copy of the draft
Convertible Loan Note Instrument will be available for inspection
at the Company's registered office until the time and date of the
General Meeting.
5. Related Party Transactions
Richard Cunningham is a Director of the Company and its
Non-Executive Chairman, whilst Herald is currently, prior to the
issue of the 2023 Convertible Loan Notes and as at the date of this
announcement, interested in (in aggregate) 4,031,490 Ordinary
Shares, representing approximately 13.6 per cent. of the existing
Ordinary Share capital of the Company, and is therefore regarded as
a "Substantial Shareholder" for the purposes of the AIM Rules. Both
Richard Cunningham and Herald agreed to the Extensions and Richard
Cunningham has agreed to subscribe for 2023 Convertible Loan Notes
with an aggregate par value of GBP30,000 and Herald has agreed to
subscribe for 2023 Convertible Loan Notes with an aggregate par
value of GBP420,000. Richard Cunningham and Herald's respective
participations in the Proposed Transactions constitute related
party transactions under Rule 13 of the AIM Rules.
The Independent Board considers, having consulted with Singer
Capital Markets, that the terms of Richard Cunningham's and
Herald's respective participations in the Proposed Transaction are
fair and reasonable in so far as Shareholders are concerned.
Herald's participation in the issue of the 2023 Convertible Loan
Notes along with their participation in the 2020 Convertible Loan
Notes and 2021 Convertible Loan Notes, would, if the total number
of shares in issue remain the same, represent a fully diluted
holding in excess of 29.9 per cent. should all of the loan notes
they hold and the accrued interest thereon under all of the
convertible loan note instruments be converted. However, contained
in each of the convertible loan notes instruments pertaining to the
2020 Convertible Loan Notes, 2021 Convertible Loan Notes and 2023
Convertible Loan Notes, there is a contractual provision that
neither Herald nor the Company can invoke a conversion of such
number of loan notes held by Herald (or individuals or entities
acting in concert with Herald) that could result in Herald's
interest in the Company (including individuals or entities acting
in concert with Herald) exceeding 29.9 per cent. of total voting
rights.
6. Effect of the issue of the 2023 Convertible Loan Notes and
Use of Proceeds
After taking into account the receipt of the expected net
proceeds from the issue of the 2023 Convertible Loan Notes of
GBP0.43 million, the Directors are of the opinion that the Group
has sufficient working capital for its present requirements, that
is for at least 12 months from the date of this document. In
reaching this conclusion the Directors have modelled a downside
scenario under which they assume, inter alia, a material decrease
in monthly recurring revenues during the FY24 financial year, an
increase in churn and reduced renewals and an increase in working
capital requirements as a result of delays to receipt of client
funds. Under this downside scenario the net proceeds would still
provide the business with sufficient working capital headroom to
continue to operate. Under this scenario, no measures were applied
to the Group's existing cost base despite a number of potential
mitigating actions being available through the discretionary nature
of certain costs incurred. Whilst the internal modelling
demonstrates continuing cash headroom, the Company's viability in
the longer term remains critically dependent on its ability to
capitalize on current positive momentum by securing a modest level
of new sales to existing and potential customers. In the event the
net proceeds are received and in the unlikely scenario the business
trades to a downside case modelled by management over a twelve
month period and beyond, the then management would have to employ
mitigating actions available to ensure the business remains
solvent.
7. Potential Dilutive Effect Resulting From The Proposed
Transaction
The 2023 Convertible Loan Notes are capable of being converted
into new Ordinary Shares at a price of 10 pence per Ordinary Share.
In the circumstances whereby all of the principal amounts of the
2023 Convertible Loan Notes are converted and all of the rolled-up
interest attributable to the 2023 Convertible Loan Notes is also
converted on the same basis they will upon full conversion
represent an increase in the issued ordinary share capital of the
Company (assuming there has not been any other share issuance in
the meantime) of approximately 19.6 per cent.
The previous issue of convertible loan notes pursuant to the
2020 Convertible Loan Notes and 2021 Convertible Loan Notes are
also capable of being converted into new Ordinary Shares at a price
of 10 pence per Ordinary Share. In the circumstances whereby all of
the principal amounts of the previous issue of convertible loan
notes are converted and all of the rolled-up interest attributable
to such notes is also converted on the same basis they will upon
full conversion represent an increase in the issued ordinary share
capital of the Company (assuming there has not been any other share
issuance in the meantime) of approximately 91.7 per cent.
Accordingly, when the effect of the issue of the 2023
Convertible Loan Notes is added to the effect of the previous issue
of convertible loan notes pursuant to the 2020 Convertible Loan
Notes and 2021 Convertible Loan Notes, then the maximum number of
new Ordinary Shares issued to satisfy full conversion of all
tranches of convertible loan notes, including rolled-up interest,
would represent an increase in the issued ordinary share capital of
the Company of approximately 111.4 per cent., and so existing
Shareholders would experience aggregate dilution of approximately
52.7 per cent. As well as dilution there is the potential that
convertible loan notes that are converted into Ordinary Shares may
be sold in the market impacting the Company's share price.
8. General Meeting
The Company will shortly dispatch the Circular to Shareholders
convening a General Meeting of the Company at which the Resolutions
summarised below will be proposed:
Resolution one - authority to allot securities
Resolution one is proposed as an ordinary resolution. This means
that, for the Resolution to be passed, more than 50 per cent. of
the votes cast must be in favour of the Resolution. Resolution one
grants the Directors authority to allot Ordinary Shares, or grant
rights to subscribe for or convert any security into Ordinary
Shares, up to an aggregate nominal value of GBP580,000. This will
enable the Directors to issue the 2023 Convertible Loan Notes to
the Investors and any further subscribers. The authority granted by
this resolution shall expire on 8 July 2025.
Resolution two - disapplication of pre-emption rights
Resolution two is proposed as a special resolution. This means
that, for the Resolution to be passed, at least 75 per cent. of the
votes cast must be in favour of the Resolution. Resolution two
shall disapply the statutory pre-emption provisions set out in the
Companies Act in respect of the allotment of Ordinary Shares, or
granting of rights to subscribe for or convert any security into
Ordinary Shares, up to an aggregate nominal value of GBP580,000.
This disapplication shall expire on 8 July 2025.
Resolution two is conditional on Resolution one being passed so
that, if Resolution one is not passed, neither of the Resolutions
will become effective and the issue of 2023 Convertible Loan Notes
will not be implemented.
9. Irrevocable Undertakings
Each of the Directors and each of the Investors have given an
irrevocable undertaking to vote in favour of the Resolutions in
respect of their own beneficial holdings (and that of their
associates) of Ordinary Shares, together totalling 10,914,595,
representing in aggregate 36.9 per cent. of the issued Ordinary
Shares.
10. Importance Of The Vote
IT IS VERY IMPORTANT that Shareholders vote in favour of the
Resolutions at the General Meeting. The Independent Board believes
that if the Resolutions are not passed at the General Meeting and
so the issue of the 2023 Convertible Loan Notes does not proceed
and in the absence of available alternative sources of funding, it
is likely that the Company will require to operate with careful
cash management processes in the short term, increasing the
liquidity risk posed should any customer delay payment and
constraining management's ability to focus their efforts on more
strategic areas of the business.
11. Recommendation
The Independent Board strongly believes that the issue of the
2023 Convertible Loan Notes is in the best interests of the Company
and its Shareholders as a whole. Accordingly, the Independent Board
recommend that Shareholders vote in favour of the Resolutions to be
proposed at the General Meeting as those members of the Board (and
their associates) intend to do in respect of their entire
beneficial holdings of 2,071,575 Ordinary Shares representing 7.01
per cent. of the current issued Ordinary Share capital.
The person responsible for arranging the release of this
Announcement on behalf of the Company is Drew Whibley, Chief
Financial Officer.
For further information please contact:
i-nexus Global plc Via: Alma PR
Simon Crowther, CEO
Drew Whibley, CFO
Singer Capital Markets (Nominated Tel: +44 (0)207 496
Adviser and Broker) 3000
Sandy Fraser
Alex Bond
Jake Humphrey
Alma PR Tel: +44 (0)203 405
Caroline Forde 0205
Important Notices
Singer Capital Markets Advisory LLP (Singer Capital Markets),
which is authorised and regulated in the United Kingdom by the
Financial Conduct Authority, is acting for the Company and no one
else in connection with the Proposed Transactions and will not be
responsible to any person other than the Company for providing the
regulatory and legal protections afforded to clients of Singer
Capital Markets nor for providing advice in relation to the
contents of this announcement or any matter, transaction or
arrangement referred to in it. Singer Capital Markets has not
authorised the contents of, or any part of, this announcement and
no liability whatsoever is accepted by Singer Capital Markets for
the accuracy of information or opinion contained in this
announcement or for the omission of any information.
A copy of the Circular will be available on the website of
i-nexus Global plc at (http://www.i-nexus.com).
Forward-Looking Statements
This announcement includes statements that are, or may be deemed
to be, "forward-looking statements" which reflect the Directors'
current views, interpretations, beliefs or expectations with
respect to the financial performance, business strategy and plans
and objectives of management for future operations of the Group.
These statements include forward-looking statements with respect to
the Group and the sector and industry in which the business
currently operates. Statements which include the words "believes",
"estimates", "plans", "projects", "anticipates", "expects",
"intends", "may", "aims", "targets", "will", "should" or, "future",
"opportunity", "potential" or, in each case, their negatives, and
similar statements of a future or forward- looking nature identify
forward-looking statements. These forward-looking statements
include matters that are not historical facts. They appear in a
number of places throughout this announcement. Forward-looking
statements may and often do differ materially from actual results.
Any forward-looking statements in this announcement are based on
certain factors and assumptions, including the Directors' current
view with respect to future events and are subject to risks
relating to future events and other risks, uncertainties and
assumptions relating to the Company's operations, results of
operations, growth strategy and liquidity. While the Directors
consider these assumptions to be reasonable based upon information
currently available, they may prove to be incorrect. Save as
required by law or by the AIM Rules, the Company undertakes no
obligation to publicly release the results of any revisions to any
forward-looking statements in this announcement that may occur due
to any change in the Directors' expectations or to reflect events
or circumstances after the date of this announcement.
APPIX
SUMMARY TERMS OF THE CONVERTIBLE LOAN NOTE
The key terms and conditions of the Convertible Loan Note
Instrument are as follows:
a) The issue of the 2023 Convertible Loan Notes is conditional
only on the passing of the Resolutions at the General Meeting.
There are no other conditions to the issue of the 2023 Convertible
Loan Notes.
b) The aggregate nominal value of the 2023 Convertible Loan
Notes is GBP500,000 and there is a minimum subscription amount of
GBP2,500 by an Investor for 2023 Convertible Loan Notes.
c) The 2023 Convertible Loan Notes are unsecured and
non-transferrable and no application will be made for their
admission to trading on any recognised securities exchange.
d) The Investors have irrevocably agreed to subscribe for the
amount of the 2023 Convertible Loan Notes as set out against their
names in Part I of the Circular immediately upon the passing of the
Resolutions at the General Meeting.
e) Following the issue of the 2023 Convertible Loan Notes, the
Investors may issue a conversion notice before the date on which
the 2023 Convertible Loan Notes are to be redeemed (see h below)
notifying the Company that they wish to convert part or all of
their 2023 Convertible Loan Notes into Ordinary Shares at a
conversion price of 10 pence per Ordinary Share.
f) The Investors may convert the 2023 Convertible Loan Notes
they hold, in whole or in part, at their sole discretion, provided
that the conversion will not result in a holder of 2023 Convertible
Loan Notes, together with any persons acting in concert with them,
being interested in Ordinary Shares carrying in aggregate more than
29.9 per cent. of the voting rights of the Company and, in the
event of any election to convert being made following an offer that
is made to all holders of Ordinary Shares in the Company to acquire
such number of Ordinary Shares that would give an offeror (and
those acting in concert with them) to cast more than 50 per cent.
of the votes, then this limitation shall continue to apply, but any
2023 Convertible Loan Notes held in excess of 29.9 per cent. on
conversion can be redeemed at the higher of their par value and the
highest offer price made by the offeror during an offer period.
g) The Company is entitled at any time following the date which
is 12 months after the date of issue of the 2023 Convertible Loan
Notes to require the Investors to convert, in whole or in part,
their 2023 Convertible Loan Notes on a pro-rata basis into Ordinary
Shares at the conversion price of 10 pence per Ordinary Share,
provided the closing bid price of an Ordinary Share as shown in the
Daily Official List of the London Stock Exchange for a period of at
least 60 consecutive days is equal to or exceeds GBP0.79 per
Ordinary Share.
h) Any 2023 Convertible Loan Notes not converted shall be redeemed on 7 July 2025.
i) Interest shall accrue on the 2023 Convertible Loan Notes at a
fixed rate of 8 per cent. per annum and shall roll up, but shall
not be compounded, and all accrued interest that is outstanding
shall be payable in full on the date the 2023 Convertible Loan
Notes are redeemed or, alternatively, the Investors may choose to
convert the rolled up interest into Ordinary Shares at the same
conversion price of 10 pence per Ordinary Share.
j) In the event that the Company is in default of any payment
obligation under the Convertible Loan Note Instrument, default
interest shall accrue (compounded quarterly) at the higher of 10
per cent. per annum and the base rate for the time being of
Barclays Bank plc.
a. The Convertible Loan Note Instrument sets out certain events
of default, on the occurrence of which the holders of 2023
Convertible Loan Notes may, in their sole discretion, require
immediate repayment of the amounts due to them in respect of the
2023 Convertible Loan Notes. These include:
b. the Company failing to make any payment due under the
Convertible Loan Note Instrument within seven days of such payment
becoming due;
c. material breach by the Company of the Convertible Loan Note
Instrument which is not cured within 30 days;
d. a breach of warranty given by the Company pursuant to the Convertible Loan Note Instrument;
e. the Company ceasing or threatening to cease or becoming
unable to pay its debts as they become due or ceasing to carry on
all or substantially all of its business;
f. an encumbrancer taking possession or a receiver,
administrative receiver, administrator or similar of cer being
appointed in respect of the whole or any substantial part of
the
g. Company's undertaking, property or assets; or
h. the Company initiating or consenting to bankruptcy, insolvency or composition proceedings.
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MSCFFFSIRLIIFIV
(END) Dow Jones Newswires
June 21, 2023 02:00 ET (06:00 GMT)
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