Proposed issue of £1.325 million of Fixed Rate Unsecured Convertible Redeemable Loan Notes
The Company announces that it is proposing to raise in aggregate £1.325 million (before expenses) by way of the issue of £1.325 million of Fixed Rate Unsecured Convertible Redeemable Loan Notes (“Convertible Loan Notes”) (“the Proposed Transaction”). The 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.
· Proposed issue of £1.325 million of Fixed Rate Unsecured Convertible Redeemable Loan Notes
· The net proceeds of the Proposed Transaction of £1.235 million will provide much needed additional working capital to facilitate the continued implementation of the Company’s growth plan and will be applied entirely towards meeting the Company’s ongoing working capital requirements.
· The Convertible Loan Notes are unsecured and non-transferable 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 £0.10 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 4 November 2023.
· The Conversion Price represents a premium of approximately 98 per cent. to the closing middle market price of 5.05 pence per Ordinary Share on 16 October 2020, 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 Convertible Loan Notes following the passing of the resolutions by Shareholders at a general meeting of the Company ( “General Meeting” ) ( “Resolutions” ) 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 Proposed Transaction is the only viable available option for securing the investment that is necessary to support the Company in the immediate to medium term, having regard to its current financial and trading position, and the need for certainty of funding 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 Convertible Loan Notes.
Simon Crowther, CEO of Solution, commented:
“I would like to take this opportunity to thank shareholders for their continued support during this period of economic uncertainty. The Board maintains its conviction that the market opportunity for enterprise-level strategy execution software is significant. The pressures COVID-19 has placed on businesses has brought this even more into focus, as management teams realise they need a more rigorous approach to organisation-wide strategy execution. The feedback we have received from customers for our recent major product release is encouraging and we continue to build positive momentum in our sales pipeline. The funds now being raised provide us with much-needed working capital and are expected to allow us the flexibility to operate throughout this extended period of uncertainty.”
N+1 Singer, 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 Transaction and will not be responsible to any person other than the Company for providing the regulatory and legal protections afforded to clients of N+1 Singer nor for providing advice in relation to the contents of this announcement or any matter, transaction or arrangement referred to in it. N+1 Singer has not authorised the contents of, or any part of, this document and no liability whatsoever is accepted by N+1 Singer for the accuracy of information or opinion contained in this announcement or for the omission of any information.
A copy of this announcement will be available on the website of Solution Group plc at (http://www.i-nexus.com) .
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 document. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this document 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 document that may occur due to any change in the Directors’ expectations or to reflect events or circumstances after the date of this document.
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