REG - Fragrant Prosperity - New CLN Issued

Fragrant Prosperity HoldingsAnnouncement

17/04/2025 07:00

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RNS Number : 4388F  Fragrant Prosperity Holdings Ltd  17 April 2025

 

For immediate
release
17 April 2025

 

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, WITHIN,
INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA,
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PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL.

 

Fragrant Prosperity Holdings Limited

("FPP" or the "Company")

Issue of New Convertible Loan Note

 

Fragrant Prosperity Holdings Limited (the "Company"), announces it has issued
convertible loan notes for £125,000 and the refinancing of existing
convertible loans notes.

 

Issue of Convertible Loan Notes

 

The Company has created a new convertible loan note instruments of up to a
maximum of £200,000.  Notes issued under this instrument ("Notes") carry an
interest rate of 5% per annum, which is to be rolled up and added to principal
quarterly until the earlier of conversion or repayment of the relevant Notes.
The Notes must be repaid as a bullet payment on the second anniversary of
issue but Company has an option to repay the Notes at any time after the
earlier of (i) 31 December 2015 and (ii) the Company has announced it has
agreed the key commercial term of a reverse takeover of the Company under the
UK Listing Rules.

 

Conversion of the Notes into equity becomes unconditional upon the publication
of a Prospectus for a fund raise over and above the 19.99% permitted in any 12
month period without the issuance of a Prospectus. The Notes upon conversion
convert into ordinary shares of the Company ("Shares") at a 10% discount to
the price of a fundraise undertaken by the Company alongside the issuance of a
Prospectus issued under the UK Prospectus Regulation Rules (or any successor
legislation or rules). Pursuant to the subscription agreements for the Notes
the Company provided a number of warranties and undertakings in respect of the
Company to the investors.

 

Issue of Warrants

 

Holders of the Notes will receive 1 warrant for every share received at the
placing price of the relevant Qualifying Fundraise, should the Notes
automatically convert into shares upon the publication of a prospectus for a
qualifying equity raise.

 

Refinancing of existing convertible loan notes

 

The Company has reached agreements with the holders of its existing
convertible loan notes representing £400,000 of the total issued of £515,000
or 78% to enter into a stand still arrangement as follows:

 

·       Holders agree to a stand still arrangement to preventing
enforcement action until 3 September 25;

·       All past accrued interest to be waived

·       No applicable future interest should conversion happen prior to
the end of the stand still period

·       Repayment of 75% of the original principle amount advanced from
the proceeds of the Note issue; and

·       Automatic conversion into equity of sums owed under the loan
note at the placing price upon Qualifying Fundraise of a minimum of £250,000

·       Agree to a standard form lock in prohibiting the disposal of
any shares received under the conversion until the earlier of 12 months from
date of conversion or 6 months following the completion of a reverse take over
by the Company

 

Use of proceeds

 

The Company intends to use the proceeds to repay an existing convertible loan
note holder which alongside the refinancing of the remained of the existing
convertible loan notes as noted above, would result in a significantly
improved and recapitalised balance sheet with no other convertible loan notes
in existence.

 

Related party transaction

 

Of the £125,000 Notes that have been issued, £25,000 have been subscribed
for by Stonedale Management & Investments Ltd a company controlled by
Simon Retter a Director of the Company.

 

 

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) 596/2014 which is part of UK law by virtue of the European
Union (Withdrawal) Act 2018. Upon the publication of this announcement this
information is considered to be in the public domain.

 

ENDS

 

 

 Fragrant Prosperity Holdings Limited
                                       +44 (0) 20 3137 1902

FPP Broker: Optiva Securities

Vishal Balasingham
     +44 (0) 20 3137 1903

 

 

 

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