REG - Cloudified Holdings - Subscription & Notice of General Meeting

Cloudified HoldingsAnnouncement

28/10/2024 12:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241028:nRSb8942Ja&default-theme=true

RNS Number : 8942J  Cloudified Holdings Limited  28 October 2024

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

28 October 2024

Cloudified Holdings Limited

("Cloudified" or the "Company")

Subscription &

Notice of General Meeting

 

Cloudified, an AIM quoted cash shell is pleased to announce that it has
conditionally raised £500,000 (before expenses), through a subscription for
9,615,385 new Ordinary Shares at an issue price of 5.20 pence per new Ordinary
Share. The Company intends to use the net proceeds of the Subscription,
together with the Company's existing cash resources to pursue the Acquisition
which will constitute a reverse takeover, pursuant to Rule 14 of the AIM Rules
("RTO").

 

The Company, in conjunction with Salonica Capital has identified an
acquisition target in the media and entertainment sector, and indicative
relative valuations between the acquisition target and the Company have been
agreed. However, no formal transaction process will commence until the
completion of the Subscription and, as in any transaction process, there can
be no absolute certainty that it will be successfully completed.

 

Salonica GP has conditionally agreed to subscribe for the Subscription Shares
pursuant to the Subscription Letter, to support the execution of a possible
RTO introduced by Salonica Capital. Salonica GP is the general partner of
Salonica Play and Salonica Capital is the investment adviser to Salonica GP.

 

Pursuant to the terms of the Subscription, Salonica GP is entitled to appoint
two directors to the board of the Company and has nominated the Proposed
Directors. Subject to completion of the Subscription, the Company intends to
appoint Othman Shoukat Majid and Richard Collett, further details are set out
below.

 

The Subscription Shares will represent approximately 64.6 per cent. of the
Enlarged Share Capital. The Issue Price of 5.20 pence represents a 131 per
cent. premium to the closing mid-market price of 2.25 pence per Ordinary Share
on 12 June 2024, being the latest practicable business day prior to the
suspension of trading in the Company's Ordinary Shares ("Suspension").

 

Following completion of the Subscription, Salonica GP and its connected
parties will hold 9,615,385 Ordinary Shares representing approximately 64.6
per cent. of the Enlarged Share Capital. Cloudified, as a company registered
in the British Virgin Islands, is not subject to the Takeover Code. The
Company's Articles nevertheless contain certain provisions similar to those of
the Takeover Code, including a provision that any parties acquiring greater
than 30 per cent. of the Company's issued share capital should make an offer
to all shareholders, unless waived by Independent Shareholders by way of a
resolution of Independent Shareholders. All existing Shareholders are
considered to be Independent Shareholders for this purpose. As a result, the
Subscription is subject to the passing of Resolution 1 of the Shareholders on
a poll at a General Meeting of Shareholders to be convened and held on 13
November 2024.

 

In addition, the Company will require a disapplication of the pre-emption
rights contained within the Articles to allot the Subscription Shares.
Accordingly, the Subscription is conditional, inter alia, upon Shareholders
approving Resolution 2 at the General Meeting. Subject to the passing of the
Resolutions, the allotment is expected to occur  on or around 14 November
2024 (or such later time and/or date as maybe agreed, being not later than 30
November 2024).  Assuming the Resolutions are passed by Shareholders at the
General Meeting, the Subscription Shares will rank pari passu in all respects
with the Existing Ordinary Shares and will rank in full for all dividends and
other distributions declared, made or paid on the Ordinary Shares after the
Allotment. Admission of the Subscription Shares to trading on AIM is expected
to occur on the earlier of the lifting of the Suspension or when the Company
is re-admitted following completion of a reverse takeover.

 

The Subscription is conditional upon, inter alia, Shareholders approving the
Resolutions 1 and 2 at the General Meeting, compliance by the Company and
Salonica GP in all material respects with their respective obligations under
the Subscription Letter and Allotment.

 

The Company is seeking an additional limited and routine authority to issue
Ordinary Shares on a non pre-emptive basis, over approximately 20 per cent. of
the Enlarged Issued Share Capital, by way of Resolution 3.

 

Ian Selby, Director of Cloudified, commented: "We have spent several months
reviewing suitable candidates for a transaction, and I am delighted to be
working with Salonica on an exciting opportunity. Its initial investment is at
a 131% premium to the current share price, and should the Acquisition proceed
as envisaged, the total uplift will be approximately 536%.  I am looking
forward to Othman and Richard joining the board shortly and working with them
on their exciting plan to bring a growth opportunity to the AIM market by way
of an RTO in early 2025"

 

Othman Shokat Majid (Salonica and Proposed Director) said: "We have identified
an acquisition target which operates in the international events, broadcast
and technology sectors, and the team involved includes high profile industry
figures.  Our focus is now on completing the necessary workstreams for the
RTO.  We believe that this Acquisition will generate significant shareholder
value over the medium to long term and I look forward to joining the board in
November 2024."

 

Enquiries:

 

 Cloudified Holdings Limited      Via IFC

 Ian Selby (Director)

 Zeus                             + 44 (0) 203 829 5000

 Mike Coe/ Sarah Mather (Nomad)

 IFC Advisory Limited             +44 (0) 203 934 6630

 Financial PR & IR

 Graham Herring / Zach Cohen

 

Background and reasons for the Subscription

 

On 12 December 2023, the Company completed the disposal of Falanx Cyber
Defence Limited and Falanx Cyber Technologies Limited (the "Disposal") which
was approved at the general meeting held on 27 November 2023. As a result the
Company became a cash shell pursuant to Rule 15 of the AIM Rules on 13
December 2023. The Company's remaining subsidiaries have been closed or are in
the process of being closed.

 

On 13 June 2024, the Company was suspended as it was not in a position to make
an acquisition or acquisitions which constituted a reverse takeover under Rule
14 of the AIM Rules, within six months of becoming an AIM Rule 15 cash shell,
in accordance with Rule 15 of the AIM Rules.

 

Since the Disposal, the Company's strategy has been to identify another
company or business to acquire in exchange for the issue of Ordinary Shares in
a single transaction (a "reverse takeover" or "RTO") or, if no suitable
acquisition could be identified on a timely basis, to appoint a liquidator and
enter a members voluntary liquidation ("MVL") and return any remaining cash to
Shareholders. In considering the Company's future strategy, the Directors have
sought to identify opportunities offering the potential to deliver value
accretion to Shareholders over the medium to long-term in the form of capital
and/or dividends.

 

Prior to the introduction to the Acquisition, the Directors have considered
numerous opportunities across multiple sectors which did not meet the
criteria. Alongside this, Directors also carried out the necessary preparatory
work to rapidly execute an MVL, if it became clear it was the optimum means of
preserving value for Shareholders. The Directors anticipate that in  a  MVL
process the distribution to Shareholders would be approximately 2.25p per
share after taking into account closure costs and liquidators fees.

 

The Directors therefore believe that the Subscription on its own at an issue
price of 5.20 pence per Subscription Share followed by a 7:4 bonus issue of
Ordinary Shares should the Acquisition  complete (as described below), should
deliver an effective value of 14.30 pence per Ordinary Share, creating a
better outcome for Shareholders than an MVL. This excludes the potential for
the Company to create further value from the Acquisition over the medium to
long term.

 

To support the execution of the Acquisition, Salonica GP has conditionally
agreed to subscribe for 9,615,385 Ordinary Shares at an Issue Price of 5.20
pence per Ordinary Share, raising £500,000 (before expenses). The net
proceeds of the Subscription, expected to be approximately £410,000
 together with the Company's cash balance of £286,255 as at 28 October 2024,
is expected to fund the non-contingent costs associated with the execution of
the Acquisition and, if appropriate, re-admission to trading on AIM.

 

The Company, in conjunction with Salonica Capital, has identified an
acquisition target in the media and entertainment sector and indicative
relative valuations between the acquisition target and the Company have been
agreed. If the Acquisition completes, it has been agreed that Shareholders
will each receive by way of a bonus issue a further 7 Ordinary Shares for
every 4 Ordinary Shares they hold.  This would result in an equity value of
approximately 14.30 pence per Ordinary Share, delivering an uplift of 536 per
cent. on the closing mid-market price of 2.25 pence per Ordinary Share on 12
June 2024.

 

The Company and Salonica GP intend to complete the Acquisition as soon as
possible. However, it is unlikely that the Acquisition will be finalised by 13
December 2024, being the date by which the Company needs to have completed a
RTO in accordance with Rule 41 of the AIM Rules. If the Company has not
completed a RTO by that date, its admission to trading on AIM is expected to
be cancelled on 14 December 2024. Should the Acquisition be successfully
completed, the Company can expect to be readmitted to AIM in early 2025.
Assuming Shareholders adopt the Resolutions, the audit for the year ended 31
March 2024 will commence and the annual report and the interim results for the
six months to 30 September 2024 will be published on or before the completion
of the Acquisition.

 

The Subscription

 

The Company has entered into a Subscription Letter with Salonica GP, in
relation to the Subscription to purchase 9,615,385 Subscription Shares at the
Issue Price. The Subscription Letter contains customary conditions. The
Subscription Shares are expected to be allotted on or around 14 November 2024.

 

The Subscription is conditional upon, inter alia, Shareholders approving the
Resolutions 1 and 2 at the General Meeting, and compliance by the Company and
Salonica GP in all material respects with their respective obligations under
the Subscription Letter and Allotment.

 

Following completion of the Subscription, Salonica GP and its connected
parties will hold 9,615,385 Ordinary Shares representing approximately 64.6
per cent. of the Enlarged Share Capital. As a result Salonica GP has entered
into the Relationship Agreement with the Company and Zeus.

 

Information on the Salonica Group

 

Salonica GP is the general partner responsible for the management of Salonica
Play.  Salonica Play is the investment entity that, through its general
partner, has conditionally agreed to participate in the Subscription.
Salonica GP also acts as the general partner for Salonica Maroon, a limited
partnership registered in Jersey which holds investment interests in Creams
Café, the UK's market-leading dessert chain with approximately 100 locations,
Allegro Foodservice, a prominent UK food manufacturer and distributor, Aaron
Wallace, a men's afro-haircare and skincare brand, and Wahed Invest, a
consumer fintech company.

 

Salonica Capital, an FCA authorised and regulated entity, is an independent
corporate finance firm providing financial advisory as well as both buy and
sell side M&A advisory services. Salonica Capital has been appointed as
the investment adviser to Salonica GP.

 

Information on the Proposed Directors

 

Othman Shoukat Majid, aged 37

Othman is a seasoned corporate financier and private equity professional with
extensive experience in M&A and strategic advisory, specialising in the
consumer, sports, entertainment, and leisure sectors. Before joining Salonica
in 2016, Othman spent nearly a decade at KPMG in London, where he advised
clients on high-profile mergers and acquisitions as part of the deal advisory
team. Starting his career at KPMG in 2007, he qualified as a Chartered
Accountant. Othman holds a BSc from Bayes Business School and a Master of
Studies (MSt) from the University of Cambridge.

 

Othman will not be considered an independent director on appointment.

 

Richard Collett aged 48 -Proposed Director

Richard brings a wealth of financial expertise and experience from various
sectors, including corporate finance, operational management, and compliance.
Richard is currently Chief Financial Officer, and Director, at main market
listed World Chess Plc. His career includes roles as COO at Ellwood Atfield
Ltd, Head of Finance at Ten Group, where he oversaw finance, legal, and
compliance matters, and as Client Finance Director at FD Solutions, providing
financial advisory services to SMEs. Richard is a member of the Chartered
Institute of Management Accountants and holds a Bachelor of Arts in Economics
from the University of Leeds, along with a Graduate Diploma in Law from City
University, London.

 

Richard will be considered an independent director on appointment.

 

Information on the Acquisition

 

Salonica Capital has introduced the Company to the Acquisition. The
Acquisition would be of a newly incorporated company which is being
established with a management team to acquire the global distribution rights
of certain media assets from an established international media company.
Consideration for the Acquisition is expected to be settled via the issue of
new Ordinary Shares in the capital of the Company. A fundraising may be
undertaken immediately prior to readmission to accelerate the development and
growth of the Company. As referenced previously, should the Acquisition
complete as envisaged, Shareholders will each receive a further seven new
Ordinary Shares by way of bonus issue for every four Ordinary Shares they
hold.

 

 

General Meeting

 

The Circular convening the General Meeting is today being posted to
Shareholders and will be shortly available on the Company's website:
https://cloudified-holdings.com/aim-rule-26.

 

Set out in the Circular is a notice convening a General Meeting of the Company
to be held at the offices of Blake Morgan LLP, Apex Plaza, Forbury
Road, Reading RG1 1AX  at 9.00 a.m. on 13 November 2024. The Notice of
General Meeting sets out the proposed Resolutions to approve the Subscription
upon which Shareholders will be asked to vote.

 

Resolution 1 - is a resolution to disapply certain takeover provisions in the
Articles necessary to implement the Subscription.

 

Resolution 2 - is a resolution to disapply certain pre-emption rights in the
Articles necessary to implement the Subscription.

 

Resolution 3 - is a routine resolution to disapply certain pre-emption rights
in the Articles to issue a limited number of Ordinary Shares

 

To become effective the Resolutions require passing by a simple majority at a
meeting of such Shareholders. In accordance with the Company's Articles,
Resolution 1 shall be taken on a poll of Independent Shareholders. All
existing Shareholders are considered to be Independent Shareholders for the
purpose of Resolution 1.

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 

                                                           2024
 Announcement of the Subscription               28 October

 Publication of the Circular and Form of Proxy  28 October

 Latest time for receipt of Form of Proxy       9.00 a.m. on 11 November

 General Meeting                                9.00 a.m. on 13 November

 Completion of Subscription                                           on or around 14 November

 

Notes:

i.    References to times in this announcement are to London time (unless
otherwise stated).

ii.    If any of the above times or dates should change, the revised times
and/or dates will be notified by an announcement to an RIS.

iii.   The timing of the events in the above timetable and in the rest of
this announcement is indicative only.

 

SUBSCRIPTION STATISTICS

 

 Share price on 12 June 2024 being the last trading day prior to its suspension  2.25p
 Issue Price                                                                     5.20p
 Premium                                                                         131 per cent.
 Number of Ordinary Shares in issue at the date of this announcement             5,264,212
 Number of Subscription Shares                                                   9,615,385
 Number of Ordinary Shares in issue following the allotment of the Subscription  14,879,597
 Shares
 Percentage of the Enlarged Share Capital represented by the Subscription        64.6 per cent.
 Shares
 Gross proceeds of the Subscription                                              £500,000
 Estimated Net Proceeds of the Subscription                                       c.£410,000

 

 

DEFINITIONS

 

The following definitions apply throughout this announcement, unless the
context requires otherwise or unless it is otherwise specifically provided:

 

 "Acquisition"                             the proposed acquisition of a target company introduced to the Company by
                                           Salonica Group which if undertaken will constitute a reverse takeover,
                                           pursuant to Rule 14 of the AIM Rules, although at this stage there is no
                                           certainty that this opportunity will lead to a transaction

 "AIM''                                    the market of that name operated by the London Stock Exchange

 "AIM Rules"                               the AIM Rules for Companies published by the London Stock Exchange from time
                                           to time

 "Allotment"                               the allotment of Subscription Shares by the Registrar

 "Articles"                                the memorandum and articles of association of the Company

 "Circular"                                the Circular to Shareholders dated 28 October 2024, regarding the Subscription
                                           and containing the Notice

 "Company" or "Cloudified"                 Cloudified Holdings Limited, a company incorporated in the British Virgin

                                         Islands with registered number 1730012 and with its registered office at PO
                                           Box 173, Maples Corporate Services (BVI) Limited, Kingston Chambers, Road
                                           Town, Tortola, British Virgin Islands

 "CREST"                                   the relevant system (as defined in the CREST Regulations) in respect of which
                                           Euroclear UK and International is the Operator (as defined in the CREST
                                           regulations) in accordance with which securities may be held and transferred
                                           in an uncertificated form

  "Directors" or "Board"                   the directors of the Company

 "Enlarged Share Capital"                  the 14,879,597 Ordinary Shares in issue immediately following the Allotment

 "Existing Ordinary Shares"                the 5,264,212 issued Ordinary Shares of the Company as at the date of this

                                         announcement

 "Form of Proxy"                           the form of proxy for use in connection with the General Meeting, copies of
                                           which are available on the Company's website:
                                           https://cloudified-holdings.com/aim-rule-26

 "Group"                                   the Company and its subsidiaries and subsidiary undertakings at the date of
                                           this announcement

 "General Meeting"                         the general meeting of the Company convened for 9.00 a.m. on 13 November 2024

 "Independent Shareholders"                has the meaning given to it in the Articles

 "Issue Price"                             5.20 pence per new Ordinary Share

 "Long Stop Date"                          8.00 a.m. on 30 November 2024

 "MVL"                                     members voluntary liquidation

 "Net Proceeds"                            the net proceeds of the Subscription

 "Notice"                                  the notice of the General Meeting of Shareholders set out at the end of the
                                           Circular

 "Ordinary Shares"                         ordinary shares of nil par value in the capital of the Company

 "Proposed Directors"                      Richard Collett and Othman Shoukat Majid

 "Registrars" or "Share Registrars"        Computershare Investor Services (BVI) Limited, The Pavilions,

                                           Bridgwater Road BS99 6ZY
 "Regulatory Information Service"          has the meaning given to it in the AIM Rules

 "Relationship Agreement"                  the agreement between (1) the Company, (2) Salonica GP and (3) Zeus Capital
                                           Limited to manage the corporate governance of the Company

 "Resolution of Independent Shareholders"  has the meaning given to it in the Articles

 "Resolutions"                             the resolutions to be proposed to the Company's Shareholders at the General
                                           Meeting

 "RTO"                                     a reverse takeover, pursuant to Rule 14 of the AIM Rules

 "Salonica Capital"                        Salonica Capital Limited, a company registered in England and Wales (company

                                         registration no. 09811258) whose registered office is Level 2 6 Conduit
                                           Street, Mayfair, London, United Kingdom, W1S 2XE) which has been appointed as
                                           the investment adviser to Salonica GP

 "Salonica GP"                             Salonica GP Limited, a company registered in Jersey (company registration no.
                                           132630) whose registered office is Third Floor, Gaspe House, 66-72 The
                                           Esplanade, St. Helier, JE1 2LH, Jersey) acting in its capacity as general
                                           partner of Salonica Play

 "Salonica Group"                          Salonica GP and Salonica Capital

 "Salonica Play"                           Salonica Play LP, a limited partnership registered in Jersey with registration

                                         number 4587. Its registered office is 3rd Floor Gaspe House 66-72 Esplanade St
                                           Helier Jersey JE1 2LH

 "Salonica Concert Party"                  Salonica Group and its connected parties

 "Shareholders"                            registered holders of Ordinary Shares

 "Subscription"                            the proposed direct subscription of the Subscription Shares as described in
                                           this announcement

 "Subscription Letter"                     the subscription letter containing customary conditions entered into between
                                           the Company and Salonica GP relating to the Subscription

 "Subscription Shares"                     the 9,615,385 new Ordinary Shares to be issued by the Company pursuant to the
                                           Subscription Letter

 "Takeover Code" or "City Code"            the City Code on Takeovers and Mergers

 "Zeus"                                    Zeus Capital Limited, the Company's nominated adviser and broker

 "£", "pounds sterling", "pence" or "p"    are references to the lawful currency of the United Kingdom

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  NOGEAFEPASFLFFA