REG - Cornerstone FS PLC - CLN, Issue of Equity, Strategic Partnership, TVR

Cornerstone FSAnnouncement

29/09/2022 07:00

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RNS Number : 0777B  Cornerstone FS PLC  29 September 2022

Certain information contained within this Announcement is deemed by the
Company to constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014 ("MAR") as applied in the United Kingdom. Upon
publication of this Announcement, this information is now considered to be in
the public domain.

 

29 September 2022

 

Cornerstone FS plc

("Cornerstone" or the "Company" or the "Group")

 

Statement re Convertible Loan Facility, Issue of Equity and Strategic
Partnership

 

Further to the Company's announcement of 4 March 2022 announcing the variation
of terms attached to the Convertible Loan note between the Company and Mr.
William Newton ("BN"), Cornerstone FS plc (AIM: CSFS), the cloud-based
provider of international payment, currency risk management and electronic
account services to SMEs, announces that on 28 September 2022 BN assigned to
Atlantic Partners Asia ("APA"), a strategic partner of the Group, the
convertible loan instrument (the "Facility") originally executed between BN
and the Company on 17 March 2021 (the "Assignment"). Concurrent with the
Assignment, under the terms of the Facility the Company gave notice to draw
down on the Facility and APA has 5 working days to transmit £350,000. Upon
receipt of funds the Company will contemporaneously issue APA with Loan Notes
immediately convertible into 4,375,000 new ordinary shares ("New Shares") in
the Company at a conversion price of 8 pence per share.

 

Strategic Partnership

 

Headquartered in Singapore, APA provides currency and payments solutions to
high-net-worth individuals, SMEs and multinational companies around the globe,
and specialises in Asian currencies. APA has been a partner of Cornerstone
since April 2019 primarily undertaking transactions on behalf of the Group
(with Cornerstone receiving commission) in cases where the Group does not have
the requisite regulatory authority, such as accessing funds in local Asian
jurisdictions while also cross-referring business to Cornerstone.

 

This strategic investment into Cornerstone by APA represents the expansion of
the relationship between the two parties, with the intention of diversifying
payment solutions, creating a wider global reach and leveraging Cornerstone's
flexible and scalable technology. This also creates some additional commercial
opportunities and efficiencies across both parties.

 

Convertible Loan Note Facility

 

The Assignment included amending certain terms of the Facility - namely, that
in the event of a drawdown and the Company issuing APA with unsecured
convertible loan notes (the "Loan Notes"), the Loan Notes could be converted
at a subscription price reduced from 26.5 pence to 8.0 pence. (This represents
a 6.7% premium to the closing mid-market price of 7.5 pence on 28 September
2022, and a 23.1% premium to 6.5 pence placing price at which shares were
issued in the Placing notified on 5 August 2022). All other details of the
Facility were unchanged and were as set out previously.

 

On 28 September 2022, Cornerstone drew down on the Facility and APA has 5
working days to transmit £350,000. Upon receipt of funds the Company will
contemporaneously issue APA with Loan Notes immediately convertible into
4,375,000 New Shares in the Company at a conversion price of 8 pence per
share. The proceeds will be used for working capital purposes.

 

Upon receipt of funds application will be made for the admission of the
4,375,000 New Shares to trading on AIM ("Admission"). A further announcement
confirming the  expected Admission Date will be made at that time. On
Admission, the New Shares will rank pari passu in all respects with the
Company's existing ordinary shares.

 

Total Voting Rights

 

Following Admission, the total issued share capital of the Company will
consist of 48,036,199 ordinary shares, with no shares held in treasury. As
such the total number of voting rights in the Company will be 48,036,199
ordinary shares. This figure may be used by shareholders as the denominator
for the calculations by which they will determine if they are required to
notify their interest in, or a change to their interest in, the Company under
the FCA's Disclosure Guidance and Transparency Rules.

 

James Hickman, Chief Executive Officer of Cornerstone, said: "We are delighted
to have received this strategic investment from Atlantic Partners Asia and to
be deepening our partnership with them. They have played an important role in
the growth of our Asia business to date, and with their expansive Asian
currency network, we look forward to working together to drive more progress
in a region that offers a significant cross-border payments opportunity."

 

Jeremy Brown, Chief Operating Officer of APA, added: "We are thrilled to
announce the expansion of our partnership with Cornerstone. This will mean
significantly improved payment options in and out of Asia at a time when SMEs
need it most. This partnership enhances strong growth, provides access to
scalable technology capabilities, and aligns with our core mission of
delivering premium Asian Currency Solutions

 

Related Party Transaction

 

As BN is a substantial shareholder (as defined in the AIM Rules) of the
Company and an Executive Director of the Company, the Assignment is classified
as a related party transaction under Rule 13 of the AIM Rules.

 

All the directors of the Company excepting BN and Phil Barry (being Dan
Mackinnon, Gareth Edwards, James Hickman and Judy Happe) are considered to be
independent directors for the purposes of Rule 13 ("Independent Directors").

 

The Independent Directors, having consulted with the Company's Nominated
Adviser, SPARK Advisory Partners Limited, consider that the terms of the
Assignment are fair and reasonable insofar as shareholders are concerned.

 

 

Enquiries

 

 Cornerstone FS plc                       +44 (0)203 971 4865
 James Hickman, Chief Executive Officer

 Judy Happe, Chief Financial Officer

 SPARK Advisory Partners Limited (Nomad)  +44 (0)203 368 3550
 Mark Brady, Adam Dawes

 SP Angel Corporate Finance LLP (Broker)  +44 (0)203 470 0470
 Jeff Keating, Harry Davies-Ball

 Gracechurch Group (Financial PR)         +44 (0)204 582 3500
 Harry Chathli, Claire Norbury

 

 

About Cornerstone FS plc

 

Cornerstone FS plc is a payments focused fintech business that makes managing
currency simple for SMEs. It provides international payment, currency risk
management and electronic account services using a proprietary cloud-based
multi-currency payments platform. These services are delivered directly and
via white label partners on a SaaS basis to UK-based SMEs that engage in
international trade. Cornerstone also serves some high-net worth individual
clients.

 

Headquartered in the City of London with offices in Tunbridge Wells and Dubai,
Cornerstone is admitted to trading on AIM under the trading symbol 'CSFS'. For
more information, please visit www.cornerstonefs.com.

 

 

About Atlantic Partners Asia

 

Atlantic Partners Asia provides premium, personalised currency and payments
solutions to high-net-worth individuals, SMEs and multinational companies
around the globe and specialises in Asian currencies. From its head office in
Singapore, APA has offices in key locations across APAC, and APA is well
positioned to service the needs of clients wanting to make payments in and out
of Asia.

 

www.atlanticpartnersasia.com (http://www.atlanticpartnersasia.com)

 

 

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