REG - Blue Star Capital - Posting of Circular and Notice of General Meeting

Blue Star CapitalAnnouncement

17/12/2024 07:00

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RNS Number : 3157Q  Blue Star Capital plc  17 December 2024

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RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OR OTHERWISE
ACQUIRE, ANY SECURITIES OF THE COMPANY.

 

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ABUSE REGULATION (EU) 596/2014 WHICH FORMS PART OF UK LAW BY VIRTUE OF THE
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DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE
INFORMATION.

 

17 December 2024

 

Blue Star Capital plc

 

("Blue Star" or the "Company")

 

Posting of Circular and Notice of General Meeting

Proposed Capital Reorganisation

Conditional Subscription for 7,500,000 New Ordinary Shares at an Issue Price
of £0.02 per New Ordinary Share

Proposed Amendment to the Articles of Association

Surrender and Issue of Warrants

 

Blue Star Capital plc (AIM: BLU), the investing company with a focus on
esports and blockchain and its applications within gaming and payments, today
announces the posting of a circular to all Shareholders  containing a notice
of general meeting and form of proxy, seeking shareholder approval for a
capital reorganisation, proposed amendment to the Articles of Association, and
conditional subscription to raise £150,000 via the issue of 7,500,000 New
Ordinary Shares of £0.001 per ordinary share at an Issue Price of £0.02 per
share (the "Subscription") (together the "Circular").

 

The General Meeting is due to be held at the offices of Cairn Financial
Advisers LLP, at 80 Cheapside, London, EC2V 6EE , at 10:00 a.m. on 6 January
2025.

 

Background to the Capital Reorganisation and Subscription

 

On 28 September 2022 the Company announced that it had undertaken a review of
its investments and operating structure.  From the review, the Board noted
the significant difference between the share price and the net asset value
("NAV") per share being reflected in the market. The Board, therefore,
considered that it should seek to exit from its two larger investments, being
Let's Play Live (then, Dynasty Gaming and Media PTE Ltd. ("Dynasty")) and
SatoshiPay Limited ("SatoshiPay"), cut all non-essential costs and fund the
Company in the interim, insofar as possible, from the sale of non-core assets.

 

The Company announced its full year results for the 12 months to 30 September
2023 in March 2024. In these results, the Company reported a £6.3 million
loss for the year, predominantly due to the write down the value of its
investment in Dynasty and Sthaler Limited. Whilst these impairments did not
affect the Company's cash position, the price of the Company's shares
continued to fall.

 

In the period since the publication of its annual results to 30 September
2023, the Company has provided further market updates on its investee
companies, primarily developments with Dynasty and SatoshiPay. On 7 October
2024, the Company provided an update on its portfolio of investee companies
and a trading update, which highlighted that the sale process of SatoshiPay
had suffered continual delays in 2024. Further to this, Vortex, a
decentralised exchange platform incubated by SatoshiPay, required additional
funding. Whilst the Board still believes that a successful launch and funding
round for Vortex could materially enhance the valuation of SatoshiPay, there
is no certainty of when this may be completed.  The Board has indicated its
interest in participating in any fundraising undertaken by SatoshiPay subject
to it being able to raise sufficient funding to allow it to do so.

 

In the Half-yearly Results for the six months ended 31 March 2024, announced
on 27 June 2024, the Company stated that it had approximately £40,000 in cash
and cash equivalents. Since that date, the Company has not raised any further
capital and, in line with its public statements, has been operating from a
severely financially constrained position. The Board has been carefully
monitoring the Company's cash position, minimising the expenses of operating
the Company wherever possible, including the Directors forgoing taking any
salaries in cash from the period 1 February 2024 to 30 September 2024  with
the hope of reaching a position of greater certainty regarding SatoshiPay's
value

 

Under the Companies Act 2006, the Company is prohibited from issuing new
shares below their nominal value of 0.1 pence per share. With the Company's
current share price trading at approximately 0.02 pence (as at  16 December
2024), this restriction will prevent the Company from raising additional
equity investment to meet working capital needs and support its portfolio of
investments. The Capital Reorganisation seeks to reduce the number of shares
in issue by consolidating the number of ordinary shares in issue and
subsequently separating the consolidated shares into ordinary shares and a
class of deferred shares with minimal rights.  The effect of this Capital
Reorganisation will be to reduce the share is issue, repricing the current
share price to a higher level and maintaining the nominal value of the
Company's ordinary shares.

 

Capital Reorganisation

 

The Directors are proposing a capital reorganisation by way of:

(i)            Rounding Share Capital: The issue of five (5) new
ordinary shares ("Rounding Shares"), resulting in an issued ordinary share
capital of 5,092,773,000 ordinary shares

(ii)           Share Consolidation: consolidate every 200 Existing
Ordinary Shares held into one ordinary share of £0.10 each (the "Consolidated
Shares"); and

(iii)          Share Subdivision and Share Reclassification:
subdivide and reclassify each Consolidated Share into 199 Deferred Shares and
one New Ordinary Share of £0.001 each.

The effects of the capital reorganisation will be to consolidate the number of
shares in issue from 5,092,773,000 to 25,463,865, which will increase the
Company's share price by a factor of 200, whilst maintaining the current
nominal value per share of £0.001 each.

 

Conditional Subscription

 

Contingent on the Resolutions being passed at the General Meeting, the Company
has conditionally raised £150,000 via a subscription for 7,500,000 New
Ordinary Shares of £0.001 each at an Issue Price of £0.02 per New Ordinary
Share. The proceeds of the Subscription will be used to participate in further
funding rounds both for either SatoshiPay Limited ("SatoshiPay"), or Vortex, a
decentralised exchange platform incubated by SatoshiPay, and support general
working capital costs of the Company.

 

Surrender and Issue of Director Warrants and Fee Warrants

 

Contemporaneously with the Capital Reorganisation, the Board of the Company
has elected to cancel all warrants over ordinary shares in the Company
currently granted to the Directors ("Existing Director Warrants"). In order to
maintain sufficient levels of cash during this constrained period, the Board
has elected to grant 2,500,000 warrants over ordinary shares to the Directors,
in lieu of Director cash salaries for the period from 1 October 2024 to 31
December 2025 ("New Director Warrants"). The details of the New Director
Warrants are set out below. The figures have been calculated on a post Capital
Reorganisation basis:

 Warrantholder    No. of warrants cancelled  No. of new warrants granted  New warrant exercise price (£)   Warrants granted as percentage of proposed enlarged issued share capital
 Anthony Fabrizi  170,000,000                2,000,000                    £0.02                            6.07%
 Sean King        30,000,000                 500,000                      £0.02                            1.52%

 Total            200,000,000                2,500,000

 

In addition, the Board of Directors has elected to grant 750,000 warrants over
ordinary shares in the Company to a certain adviser to the Company ("Adviser
Warrants") at an exercise price of £0.02p. These have been issued in lieu of
retainer fees.

 

Both the New Director Warrants and the Adviser Warrants allow the holder to
subscribe for ordinary shares in the Company, on a one to one basis, at an
exercise price of £0.02 for an exercisable period of two years from the date
of the General Meeting. The New Director Warrants and the Adviser Warrants are
not subject to any other performance criteria.

 

Existing Warrants

 

Following the Capital Reorganisation, the warrants granted to shareholders
following the capital raise in January 2024 ("Existing Warrants") will be
amended on the basis as set out in the table below:

 

                              At present*  Proposed     Nominal

 Number of Existing Warrants  100,000,000  100,000,000  £0.001
 Exercise price               0.1p         20p          £0.001
 Exercise ratio               1:1          200:1†       £0.001

 * does not include the Existing Director Warrants or New Director Warrants

 † exercise ratio denotes the number of warrants following the Capital
 Reorganisation required to be exercised in order to grant one new ordinary
 share

 

Related Party Transaction

 

Nick Slater, a substantial shareholder in the Company, who currently holds
approximately 11.44% of the Company's issued share capital, has subscribed to
purchase 1,750,000 ordinary shares as a part of the Subscription. As a
substantial shareholder, that being a person who holds over 10% of an issuer's
issued share capital, this subscription is a related party transactions
pursuant to the AIM Rules for Companies. The Directors of the Company
consider, having consulted with its nominated adviser, Cairn Financial
Advisers LLP, that the terms of the subscription by Nick Slater is fair and
reasonable, insofar as its shareholders are concerned.

 

Prospective Admission to AIM and Total Voting Rights

 

In the event that all of the Resolutions are passed at the General Meeting,
application will be made for Admission of the 7,500,000 Subscription Shares,
which will rank pari passu with the Company's existing ordinary shares. It is
expected that Admission will become effective and that dealings will commence
at 08.00 am on or around 8 January 2025.

 

Following Admission, the Company's enlarged issued share capital ("Enlarged
Issued Share Capital") will comprise 32,963,865 ordinary shares of £0.001
each with voting rights in the Company. This figure may be used by
shareholders in the Company as the denominator for the calculations by which
they will determine if they are required to notify their interest in, or a
change in the interest in, the share capital of the Company under the FCA's
Disclosure and Transparency Rules.

 

An extract from the circular can be found at the end of this announcement,
comprising the Expected Timetable of Events and the Letter from the  Chairman
of the Company. The full Circular, together with supporting documents, will be
available from the Company's website, https://bluestarcapital.co.uk/
(https://bluestarcapital.co.uk/) , later today.

 

Capitalised terms in this announcement have the meaning ascribed to them in
the Definitions section of the Circular.

 

This announcement contains inside information for the purposes of the UK
Market Abuse Regulation. The Directors of the Company take responsibility for
this announcement.

 

For further information please contact:

 

 Blue Star Capital plc                +44 (0) 777 178 2434
 Tony Fabrizi

 Cairn Financial Advisers LLP         +44 (0) 20 7213 0880
 (Nominated Adviser)
 Jo Turner / Liam Murray / Ed Downes

 Axis Capital Markets Limited         +44 (0) 20 3026 0449
 (Sole Broker)
 Ben Tadd / Lewis Jones

 

About Blue Star

Blue Star is an investing company with a focus on new technologies. Blue
Star's investments include SatoshiPay Limited, an experienced blockchain
company with a strong track record in innovative payment solutions; Lets Play
Live, whose B2B white label platform is a full-stack gaming ecosystem; Paidia,
a female focussed gaming platform; and Sthaler Limited, an identity and
payments technology business which enables a consumer to identify themselves
and pay using just their finger.

 

 

Extracts from the Circular

 

 

EXPECTED TIMETABLE OF EVENTS

 

 Publication and posting to Shareholders of this document                    17 December 2024

 Latest time for receipt of Forms of Proxy for the General Meeting           10:00 a.m. on 2 January 2025

 General Meeting                                                             10:00 a.m. on 6 January 2025

 On or around:

 Record date for the consolidation, subdivision and reclassification of the  6:00 p.m. on 6 January 2025
 Existing Ordinary Shares

 Admission of the New Ordinary Shares and the Subscription Shares            8:00 a.m. on 8 January 2025

 CREST accounts credited with the New Ordinary Shares                        Shortly after 8:00 a.m. on 8 January 2025

 Dispatch of definitive share certificates in respect of the New Ordinary    No later than 20 January 2025
 Shares

 

 

The dates and times given are indicative only and are based on the Company's
current expectations. As at the date of posting, certain dates above need to
be agreed and, therefore, may be subject to change. If any of the expected
times and/or dates above change, the revised times and/or dates will be
notified to the Shareholders by announcement through a Regulatory Information
Service.

 

All references to time in this document are to London (UK) time.

 

 

 

LETTER FORM THE CHAIRMAN OF THE COMPANY

 

1.    Introduction

 

The purpose of this document is to explain the details of, and reasons for,
the Capital Reorganisation and Subscription that the Directors are proposing
to undertake. To be implemented, both the Capital Reorganisation and the
Subscription will require the approval of Shareholders at the General Meeting.
Accordingly, at the end of this document, is a notice convening a general
meeting of the Company to consider and, if thought fit, approve the Capital
Reorganisation , the making of consequential amendments to the Articles and
the granting of share authorities in order to allow the Directors to complete
the Subscription.

 

2.    Background to and reasons for the Capital Reorganisation and
Subscription

 

On 28 September 2022, the Company announced that it had undertaken a review of
its investments and operating structure.  From the review, the Board noted
the significant difference between the share price and the net asset value
("NAV") per share being reflected in the market. The Board, therefore,
considered that it should seek to exit from its two larger investments, being
Let's Play Live (then, Dynasty Gaming and Media PTE Ltd. ("Dynasty")) and
SatoshiPay Limited ("SatoshiPay"), cut all non-essential costs and fund the
Company in the interim, insofar as possible, from the sale of non-core assets.

 

The Company announced its full year results for the 12 months to 30 September
2023 in March 2024. In these results, the Company reported a £6.3 million
loss for the year predominantly due to the write down the value of its
investment in Dynasty and Sthaler Limited. Whilst these impairments did not
affect the Company's cash position, the price of the Company's shares
continued to fall.

 

In the period since the publication of its annual results to 30 September
2023, the Company has provided further market updates on its investee
companies, primarily developments with Dynasty and SatoshiPay. On 7 October
2024, the Company provided an update on its portfolio of investee companies
and a trading update, which highlighted that the sale process of SatoshiPay
had suffered continual delays in 2024. Further to this, Vortex, a
decentralised exchange platform incubated by SatoshiPay, required additional
funding. Whilst the Board still believes that a successful launch and funding
round for Vortex could materially enhance the valuation of SatoshiPay, there
is no certainty of when this may be completed.  The Board has indicated its
interest in participating in any fundraising undertaken by SatoshiPay subject
to it being able to raise sufficient funding to allow it to do so.

 

In the Half-yearly Results for the six months ended 31 March 2024, announced
on 27 June 2024, the Company stated that it had approximately £40,000 in cash
and cash equivalents. Since that date, the Company has not raised any further
capital and, in line with its public statements, has been operating from a
severely financially constrained position. The Board has been carefully
monitoring the Company's cash position, minimising the expenses of operating
the Company wherever possible, including the Directors forgoing taking any
salaries in cash from the period 1 February 2024 to 30 September 2024 with the
hope of reaching a position of greater certainty regarding SatoshiPay's value.
As stated in previous announcements, the value of the Company is inextricably
linked to the value of SatoshiPay, as it accounts for approximately 90% of the
Company's NAV.

 

Despite its recent challenges and the write-down of some of its investments in
the portfolio, the Board recognised  that the Company's NAV per share
remained significantly higher than the current market capitalisation.  At the
time of publication of this document, the close price was 0.02 pence per
share, representing a market capitalisation of approximately £1.1 million. As
of the latest reporting period ended 31 March 2024, the NAV was approximately
£5.27 million, representing a NAV per share of approximately 0.1 pence,
highlighting a material disconnect to the current share price.

 

Under the Companies Act 2006, the Company is prohibited from issuing new
shares below their nominal value of 0.1 pence per share. With the Company's
current share price trading at approximately 0.02 pence (as at  16 December
2024), this restriction will prevent the Company from raising additional
equity investment to meet working capital needs and support its portfolio of
investments. The Capital Reorganisation seeks to reduce the number of shares
in issue by consolidating the number of ordinary shares in issue and
subsequently separating the consolidated shares into ordinary shares and a
class of deferred shares with minimal rights.  The effect of this Capital
Reorganisation will be to reduce the number of shares in issue, repricing the
current share price to a higher level and maintaining the nominal value of the
Company's ordinary shares.

 

Subscription

 

Conditional on the Resolutions being passed at the General Meeting, the
Company has raised £150,000 via a Subscription for 7,500,000 new ordinary
shares of £0.001 each at an subscription price of £0.02 per New Ordinary
Share ("Subscription Shares").

 

Warrants

 

Contemporaneously with the Capital Reorganisation, the Board has elected to
cancel all warrants over ordinary shares in the Company currently granted to
the Directors ("Existing Director Warrants"). In order to maintain sufficient
levels of cash during this constrained period, the Board has elected to grant
2,500,000 warrants over ordinary shares to the Directors, in lieu of Director
cash salaries for the period from 1 October 2024 to 31 December 2025 ("New
Director Warrants").

 

 Warrantholder    No. of warrants cancelled  No. of new warrants granted  New warrant exercise price (£)   Warrants granted as percentage of enlarged issued share capital

 Anthony Fabrizi  170,000,000                2,000,000                    £0.02                            6.07%
 Sean King        30,000,000                 500,000                      £0.02                            1.52%

 Total            200,000,000                2,500,000

 

 

Note that the figures have been calculated on a post Capital Reorganisation
basis. The 50,000,000 warrants granted to Brian Rowbotham on 30 January 2023
have also been cancelled.

 

Board Opinion

 

The Board believes that the successful implementation of the Capital
Reorganisation and Subscription will help stabilise the Company's financial
position through raising funds and allow it to participate in follow-on
funding rounds for SatoshiPay and Vortex, in addition to providing the Company
with further working capital.

 

The Board is committed to carefully managing the Company's cash, however,
wishes to reiterate that should the Company be unable to complete the Capital
Reorganisation and the Subscription, it would be left with a limited pool of
alternative options and would likely result in the Existing Ordinary Shares
ceasing to trade and subsequently, the Company withdrawing from AIM. The Board
does not believe that this would be in the best interest of Shareholders.
Against this background, the Company is, therefore, seeking Shareholder
approval now for the Capital Reorganisation as set out in this document.

 

3.     The Capital Reorganisation

 

Companies Act 2006 prohibits the issue of shares at a price below their
nominal value. In such situations, companies typically seek to reorganise
their capital structures with the effect of lowering the nominal value of
their shares. In this instance, the Company is also looking to increase its
share price, maintain the nominal value of its ordinary shares and reduce the
number of shares in issue.  At present, the issued ordinary share capital of
the Company comprises 5,092,772,995 Ordinary Shares of £0.001 each.

 

The Directors are proposing a capital reorganisation by way of:

 

(i)            Rounding Share Capital: The issue of five (5) new
ordinary shares ("Rounding Shares"), resulting in an issued ordinary share
capital of 5,092,773,000 ordinary shares

(ii)           Share Consolidation: consolidating every 200 Existing
Ordinary Shares held on the Record Date into one ordinary share of £0.20 each
(the "Consolidated Shares")

(iii)          Share Subdivision and Share Reclassification:
subdivide and reclassify each Consolidated Share into 199 Deferred Shares and
one New Ordinary Share of £0.001 each

 

Each of the proposals set out in (i) and (ii) above is to be effected by the
passing of Resolution 1 to be proposed at the General Meeting.

 

To illustrate the effect of the Capital Reorganisation and the Subscription
see the table below:

 

                                        At present*                            Proposed       Nominal

 Issued Share Capital                   5,092,772,995                          -              £0.001

 Adjusted Issued Share Capital          -                                      5,092,773,000  £0.001

 Consolidated Issued Share Capital      -                                      25,463,865     £0.020

 Number of Deferred Shares              -                                      5,067,309,135  £0.001

 Reclassified Issued Share Capital      -                                      25,463,865     £0.001

 Indicative share price                 0.02p                                  4.0p           £0.001

 Subscription

 Number of Subscription Shares          -                                      7,500,000      £0.001

 Enlarged Issued Share Capital          -                                      32,963,865     £0.001

 Number of Existing Warrants            100,000,000                            100,000,000    £0.001
 Exercise price                         0.1p                                   20p            £0.001
 Exercise ratio                         1:1                                    200:1          £0.001

 *does not include the Existing Director Warrants or New Director Warrants

 

The number of Warrants will be subject to individual holdings and the
deduction of fractional entitlements.

 

The New Ordinary Shares will have the same rights as the Existing Ordinary
Shares including voting, dividend and other rights.

 

It is likely that the Consolidation will result in fractional entitlements to
a New Ordinary Share where any holding is not precisely divisible by 200. No
certificates will be issued for fractional entitlements to New Ordinary
Shares. Shareholders with a shareholding of less than 200 Existing Ordinary
Shares will not be entitled to any Consolidated Shares and Shareholders with a
holding in excess of 200 Existing Ordinary Shares, but which is not exactly
divisible by 20 will have their holding in the Consolidated Shares rounded
down to the nearest whole number. For example, a Shareholder holding 220
Existing Ordinary Shares would receive 1 Consolidated Share with his
fractional entitlement of 20 Existing Ordinary Shares being aggregated with
fractional entitlements from other Shareholders and sold in the marketplace
with the proceeds being retained by the Company.

 

The Deferred Shares will have no right to vote and a very limited right to
participate in the capital of the Company save in respect of insolvency and
the Company will not issue any certificates or credit CREST accounts in
respect of them. The Deferred Shares will not be admitted to trading on any
exchange.

 

4.    Amendment to the Articles

 

As a consequence of the Share Capital Reorganisation, a resolution will be
proposed at the General Meeting to amend the Articles by the inclusion of the
share rights attaching to the Deferred Shares.

 

Resolution 3 has been proposed to Shareholders as a special resolution to
amend the Articles and a copy of the Company's existing articles and proposed
amendment to the Articles can be found on the Company's website,
https://bluestarcapital.co.uk/ (https://bluestarcapital.co.uk/) .

 

The Deferred Shares will have limited rights which will be set out in the
amended Articles. The amended Articles will also be available for inspection
at the General Meeting at least 15 minutes prior to the start of the General
Meeting and up until the close of the General Meeting.

 

5.    Dealing and Settlement

 

The Capital Reorganisation will be effected by reference to Shareholders and
their holdings of Existing Ordinary Shares on the register as at the close of
business on the Record Date and is conditional on permission being granted by
the London Stock Exchange for the New Ordinary Shares to be admitted to
trading on AIM.

 

Subject to the Resolutions being passed, it is expected that dealings in and
settlement in CREST of the Existing Ordinary Shares will continue until the
close of business on 6 January 2025 when, in the case of Existing Ordinary
Shares held in certificated form, the register will be closed for transfers.
The registration of uncertificated holdings in respect of Existing Ordinary
Shares will be disabled. It is expected that Admission of the New Ordinary
Shares will become effective and that dealings in the New Ordinary Shares will
commence at 8:00 a.m. on 8 January 2025.

 

It is intended that new share certificates will be sent to Shareholders, who
hold their shares in certificated form, following Admission. These new share
certificates will set out the number of New Ordinary Shares owned by a
Shareholder on completion of the Capital Reorganisation and will replace
existing share certificates. Definitive certificates for the New Ordinary
Shares to be issued in certificated form are expected to be dispatched by post
no later than 20 January 2025. Temporary documents of title will not be
issued. Pending dispatch of definitive share certificates, transfers of New
Ordinary Shares held in certificated form will be certified against the
register held by Link Group. Shareholders who hold their Existing Ordinary
Shares in uncertificated form are expected to have their CREST accounts
credited with the New Ordinary Shares as soon as possible after 8:00 a.m. on 8
January 2025.

 

In the event the Resolutions are passed and the Company is required to apply
for a new ISIN and SEDOL, the details of this will be announced by a
regulatory news service in due course.

 

6.    Overseas Shareholders

 

The implications of the Capital Reorganisation on Overseas Shareholders may be
affected by the laws of their respective jurisdictions. Overseas Shareholders
should inform themselves about and observe all applicable legal requirements
in such jurisdictions. It is the responsibility of Overseas Shareholders to
satisfy themselves as to the full observance of the laws of each relevant
jurisdiction in connection with the Capital Reorganisation, including the
obtaining of any governmental, exchange control or other consents which may be
required, compliance with other necessary formalities which are required to be
observed and/or the payment of any taxes due in each jurisdiction. Overseas
Shareholders who are in any doubt about their position should consult their
professional advisers in the relevant territory.

 

7.    Taxation

 

The Directors have been advised that for the purposes of UK taxation of
chargeable gains, the receipt of the New Ordinary Shares arising from the
Capital Reorganisation should not be treated as a shareholder having made a
disposal of all or part of his holding of Existing Ordinary Shares by reason
of the Capital Reorganisation.

 

8.    General Meeting

 

Your attention is drawn to the notice convening the General Meeting of the
Company, set out at the end of this document, to be held at 10:00 a.m. on 6
January 2025. At the General Meeting the following Resolutions will be
proposed, of which, Resolutions 1, 2 and 4 shall be proposed as ordinary
resolutions and Resolution 3 and 5 shall be proposed as special resolutions.

 

1.    Resolution 1: Issue and Consolidation of Share Capital

THAT, subject to the approval of Resolutions 2 and 3, in accordance with
section 618 of the Act, five (5) New Ordinary Shares will be issued, having a
nominal value of £0.001 (0.1p) each in the capital of the Company. The
resultant 5,092,773,000 shares in issue be consolidated into 25,463,865
ordinary shares having a nominal value of £0.20 (20p) (such that every, 200
ordinary shares having a nominal value of £0.001 each, will be consolidated
into one ordinary share having a nominal value of £0.20 each), such shares
having the rights and restrictions set out in the Articles and that
fractions of issued shares arising on consolidation be aggregated and sold and
the proceeds retained by the Company.

2.     Resolution 2:  Sub-Division and Reclassification of Shares

 THAT, subject to the approval of Resolutions 1 and 3, in accordance with
section 618 of the Act, each ordinary share of £0.20 each in the capital of
the Company be and it is sub-divided and reclassified into one (1) ordinary
share of £0.001 each and one hundred and ninety-nine (199) deferred shares of
£0.001 each in the capital of the Company, with each share having the rights
and restrictions set out in the Articles.

3.     Resolution 3:  Amendment to the Articles

 THAT, subject to and conditional upon the passing of Resolutions 1 and 2
above, with effect from the conclusion of the General Meeting, the Articles by
amended by the insertion of a new Article 146 which sets out the rights
attaches to the Deferred Shares.

4.     Resolution 4:  Share Authorities

That, the Directors be and are hereby generally and unconditionally authorised
pursuant to section 551 of the Act to exercise all or any part of the powers
of the Company to allot shares and grant  rights to subscribe for, or convert
any security into, shares of the Company up to an aggregate nominal amount of
£500,000 such authority (unless previously revoked or varied) to expire at
the conclusion of the annual general meeting of the Company to be held in
2025, save that the Company may before such expiry make offers or agreements
which would or might require relevant securities to be allotted after such
expiry and the directors may allot relevant securities in pursuance of such
offers or agreements as if the authority conferred hereby had not expired.

5.     Resolution 5:  Share Authorities

That, subject to the passing of Resolution 4, the Directors be and are hereby
granted power pursuant to section 570(1) of the Act to allot equity securities
(as defined in section 560(1) of the Act) for cash pursuant to the authority
conferred on them by Resolution 5 above as if section 561 of the Act did not
apply to such allotment, provided that such power be limited to:

i)      the allotment of equity securities which are offered to all the
holders of equity securities of the Company (at a date specified by the
directors) where the equity securities respectively attributable to the
interests of such holders are as nearly practicable in proportion to the
respective number of equity securities held by them, but subject to such
exclusions and other arrangements as the directors may deem necessary or
expedient in relation to fractional entitlements and any legal or practical
problems under any laws or requirements of any regulatory body or stock
exchange in any territory or otherwise; and

ii)     the allotment (otherwise than pursuant to subparagraph (i) above)
of equity securities up to an aggregate nominal amount of £500,000, and
provided that this power shall expire on the conclusion of the next annual
general meeting of the Company to be held in 2025, save that the Company may
make an o'er or enter into an agreement before the expiry of that date which
would or might require equity securities to be allotted after that date and
the directors may allot equity securities in pursuance of such an offer as if
the power conferred hereby had not expired

9.    Action to be taken

 

You will find enclosed with this document a Form of Proxy in respect of the
General Meeting.

 

Whether or not you propose to attend the General Meeting in person, you are
asked to complete the Form of Proxy and return it to the Company's registrars,
, Link Group at PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL or
by email at shareholderenquiries@linkgroup.co.uk
(mailto:shareholderenquiries@linkgroup.co.uk) , so as to arrive as soon as
possible, but in any event, so as not to be received any later than 10:00 a.m.
on  2 January 2025.

 

Completion and return of the Form of Proxy will not preclude you from
attending and voting at the General Meeting in person if you wish.

 

10.  Recommendation

 

The Directors unanimously consider that the Capital Reorganisation and the
Subscription is in the best interests of the Company and the Shareholders as a
whole.

 

Accordingly, your Directors unanimously recommend that you vote in favour of
the Resolutions to be proposed at the General Meeting, as they intend to do in
respect of their own beneficial holdings which, in aggregate, amount to
18,250,000 Existing Ordinary Shares, representing approximately 0.36 per cent.
of the Company's existing issued ordinary share capital.

 

 

Yours faithfully,

 

Anthony Fabrizi, Executive Chairman

 

 

 

 

 

 

Forward looking statement disclaimer

Certain statements made in this announcement are forward-looking statements.
These forward-looking statements are not historical facts but rather are based
on the Company's current expectations, estimates, and projections about its
industry; its beliefs; and assumptions. Words such as 'anticipates,'
'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar
expressions are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject to known
and unknown risks, uncertainties, and other factors, some of which are beyond
the Company's control, are difficult to predict, and could cause actual
results to differ materially from those expressed or forecasted in the
forward-looking statements. The Company cautions shareholders and prospective
shareholder holders not to place undue reliance on these forward-looking
statements, which reflect the view of the Company only as of the date of this
announcement. The forward-looking statements made in this announcement relate
only to events as of the date on which the statements are made. The Company
will not undertake any obligation to release publicly any revisions or updates
to these forward-looking statements to reflect events, circumstances, or
unanticipated events occurring after the date of this announcement except as
required by law or by any appropriate regulatory authority.

 

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