REG - RegTech Open Project - Financial and Funding Update

REGTECH OPEN PROJECTAnnouncement

04/01/2024 07:00

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RNS Number : 5959Y  RegTech Open Project PLC  04 January 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC LAW IN THE UNITED KINGDOM OF
GREAT BRITAIN AND NORTHERN IRELAND ("UK") PURSUANT TO THE MARKET ABUSE
(AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR").

 

4 January 2024

 

 

RegTech Open Project plc

 
("RTOP" or the "Company" and, together with its subsidiaries and subsidiary
undertakings from time to time, as the context requires, the "Group")

 

Financial and Funding Update

 

RegTech Open Project plc (LSE: RTOP), the technology business specialised in
the automation, management, and optimisation of regulatory compliance
operations, provides the following financial and business updates.

 

Summary

 

·    As at 31 December 2023 the Company had received £1,046,000 in funds
from RegTech Open Project S.p.A. (a corporate entity ultimately beneficially
wholly-owned by Alessandro Zamboni) ("RegTech Italy") under the English law
governed fixed term unsecured working capital loan agreement made between the
Company and RegTech Italy, dated 21 August 2023 (the "Shareholder Loan
Agreement"). At the date of the announcement, the Company has served drawdown
notices for a total of £4,000,000; of that amount, £2,954,000 remains to be
advanced by RegTech Italy.

·   On 3 January 2024 the Company received bank confirmations of payments of
£100,000 from The AvantGarde Group S.p.A. (an entity ultimately beneficially
wholly-owned and controlled by Mr Alessandro Zamboni) ("TAG") on behalf of
RegTech Italy following additional funding arrangements put in place by TAG
with a third-party provider. Mr Zamboni, on behalf of RegTech Italy,
furthermore confirmed to the Directors that RegTech Italy would continue to
make payments to the Company ultimately to fulfil its obligations under the
Shareholder Loan Agreement.

·     The Company announced on 6 December 2023 that it had identified
£3,564,500 of payables to transfer to RegTech Italy for set-off on a
£-for-£ basis under the Shareholder Loan Agreement.  The Company is
actively working with RegTech Italy to complete the set-off process.

 

Further details of each of these are set out below.

 

Financial and funding update

 

The Company provides an update on the status of its funding.

 

Since completion of the Company's direct listing on 25 August 2023, the
Company has served drawdown notices for a total of £4,000,000 (comprising
£2,000,000 drawdown by 1 September 2023, £500,000 by 30 September 2023 and,
since 1 October 2023, three tranches of £500,000 each) under the Shareholder
Loan Agreement, of which:

 

·     £1,046,000 in funds have been received (£437,000 in funds being
received prior to 29 September 2023) by the Company, accruing non-compounding
interest rate of 10% per annum (calculated on a 360-day basis) due to RegTech
Italy; and

·     £2,954,000 remains to be advanced by RegTech Italy and is accruing
compounding interest at a rate of 15% per annum (calculated on a 360-day
basis) payable to the Company, pursuant to an English law governed side letter
agreement entered into between the Company and RegTech Italy, on 28 September
2023 (the "Side Letter Agreement").

·   On 6 December 2023 the Company announced that Mr. Zamboni on behalf of
RegTech Italy had acknowledged the amounts currently outstanding under the
Shareholder Loan Agreement and had made representations to the Company that
RegTech Italy would be in a position to fulfil its payment obligations in
full, and specifically that £1,400,000 would be paid to the Company by 31
December 2023. However, as at 31 December 2023 no additional funding had been
received. On 3 January 2024 RTOP received bank confirmations of payments of
£100,000 from TAG on behalf of RegTech Italy following additional funding
arrangements put in place by TAG with a third-party provider. Furthermore, Mr.
Zamboni on behalf of RegTech Italy confirmed to the Directors that RegTech
Italy would continue to make payments to the Company ultimately to fulfil its
obligations under the Shareholder Loan Agreement.

 

The Board continues to review and monitor the cashflow and working capital
requirements of the Group on a prudent basis and is continuing to work on the
mitigation of risks relating to delays in receipt of the outstanding sums
under the Shareholder Loan Agreement. The Board continues to actively explore
alternative financing options for RTOP should there be continued delays in
receipt of outstanding principal under the Shareholder Loan Agreement.

 

The Directors have reviewed the current status of interest payable on funds
received under the Shareholder Loan Agreement which accrues at 10% against
interest receivable against funds requested under the Shareholder Loan
Agreement which have not been received which accrues at a rate of 15%. Based
on the amounts drawn and outstanding, there is a net interest receivable of
approximately £100,000 as at 31 December 2023 which will be deductible
against the current principal loan amounts received as at 31 December 2023.

 

As announced on 6 December 2023, the Company has identified £3,564,500 of
payables to transfer to RegTech Italy for set-off on a £-for-£ basis under
the Shareholder Loan Agreement. Amounts set-off attract a non-compounding
interest rate of 5% per annum (calculated on a 360-day basis) due to RegTech
Italy. The Company is actively working with RegTech Italy to complete the
set-off process.

 

For the purposes of UK MAR, the person responsible for arranging release of
this announcement on behalf of RTOP is Ian Halliday-Pegg, Chief Executive
Officer.

 

- Ends -

 

Enquiries:

 

 RegTech Open Project plc

 Ian Halliday-Pegg, CEO              c/o Instinctif Partners

 Instinctif Partners (Financial PR)  regtech@instinctif.com (mailto:regtech@instinctif.com)

 Guy Scarborough                     +44 (0)79 1717 8920

 Bryn Woodward                       +44 (0)75 0002 7181

 

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