REG - RegTech Open Project - Interim results

REGTECH OPEN PROJECTAnnouncement

29/09/2023 07:00

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RNS Number : 0880O  RegTech Open Project PLC  29 September 2023

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

29 September 2023

 

 

Unaudited interim results for the six months ending 30 June 2023 and entry
into Side Letter Agreement

 

RegTech Open Project plc ("RTOP" or the "Company"), the technology business
specialised in the automation, management, and optimisation of regulatory
compliance operations, is pleased to announce its unaudited interim results
for the six months ending 30 June 2023 ("H1 2023") and entry by the Company
into a side letter agreement, cast as a deed, with RegTech Open Project S.p.A.
(an entity ultimately beneficially owned by Alessandro Zamboni, Founder and
Non-Executive Director of RTOP) ("RegTech Italy") on 28 September 2023 (the
"Side Letter Agreement").

 

H1 2023 highlights:

 

·      Firmly established software-as-a-service (SaaS) platform, with a
unique offering and significant market opportunity in operational resilience.

·      Historical performance of the newly contributed business shows a
50% year-on-year growth on an invoiced basis to £588,000 in H1 2023 (versus
£391,000 in the six months ending 30 June 2022), indicating the strength of
the business model supported by strong partnerships and expanding customer
base.

 

Subsequent events:

 

·      Successful admission of the Company's ordinary shares to listing
on the standard segment of the Official List of the Financial Conduct
Authority and to trading on the main market for listed securities of London
Stock Exchange plc on 25 August 2023 (the "Direct Listing").

·      As previously announced, RTOP has, post-Direct Listing,
strengthened its senior management team, with the appointment of Paul McFadden
as Chief Financial Officer, with an effective start date of 5 December 2023.

·      Since completion of the Direct Listing a total of £2.5 million
funds have been drawn under the English law governed fixed term unsecured
working capital loan agreement, cast as a deed, between the Company and
RegTech Italy (the "Shareholder Loan Agreement") and £437,000 of funds have
been received by the Company, the difference is accruing 15% compounding
interest ("Late Drawdown Fee").

·      The board of directors (the "Board") have reviewed the cashflow
on a prudent basis and acknowledge that funding from the Shareholder Loan
Agreement is required to meet its liabilities over the next 12 months. The
Board is therefore working on mitigation of the risks relating to delays in
receipt of the outstanding principal under the Shareholder Loan Agreement and
is confident this will not affect the ultimate growth of the business.

·      Accordingly, the Company and RegTech Italy entered into the Side
Letter Agreement, pursuant to which the parties agreed the following payment
schedule for the outstanding funds and any accrued Late Drawdown Fee:

 

 £515,750                   By 5 p.m. (London time) on 4 October 2023
 £515,750                   By 5 p.m. (London time) on 11 October 2023
 £515,750                   By 5 p.m. (London time) on 18 October 2023
 £515,750                   By 5 p.m. (London time) on 25 October 2023
 Accrued Late Drawdown Fee  By 5 p.m. (London time) on 1 December 2023

 

·      The Side Letter Agreement further provides an option for the
Company, on three business days' notice, to transfer the 2,250,000 warrants
(each exercisable into one new ordinary share of nominal value £0.20 each in
the capital of the Company at an exercise price of £0.20, or a cashless
exercise basis) held by RegTech Italy to the Company or a third party
designated by the Board (independent of Alessandro Zamboni), and any net
proceeds realised shall reduce the outstanding principal under the Shareholder
Loan Agreement.

·      The entry by the Company and RegTech into the Side Letter
Agreement constituted a material related party transaction for the purposes of
DTR 7.3 and was, accordingly, voted upon by the independent Directors
(excluding Alessandro Zamboni, who, in each case, constituted a "related
party" (as such term is defined in International Financial Reporting Standard
as adopted in the UK)), and such independent Directors consider each such
material related party transaction in respect of the Side Letter Agreement to
be fair and reasonable from the perspective of the Company and its
Shareholders who are not a related party.

 

Ian Halliday-Pegg, Chief Executive Officer of RTOP, said:

 
"The Direct Listing of RTOP represented a significant moment for the business as it looks to rapidly scale its customer base and presence geographically. We are confident that the strong momentum achieved to date will translate into further new long-term partnerships and adoption of our unique operational resilience focused SaaS platform."
 
"With regulatory change driving the requirement for a more rigorous approach to business management across financial services industry and international markets, we are well positioned to continue to deliver the growth strategy outlined at the time of the Direct Listing."
 
- Ends -

 

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 of RTOP.

 

For further enquiries:

 

 RegTech Open Project plc

 Ian Halliday-Pegg, CEO              c/o Instinctif Partners

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

 Victoria Hayns                      0207 457 2020

Guy Scarborough

 Bryn Woodward

CHIEF EXECUTIVE OFFICER'S REPORT AND INTERIM FINANCIAL STATEMENTS
 
CHIEF EXECUTIVE OFFICER'S REPORT
 
It has been a momentous year for RegTech Open Project plc ("RTOP"), highlighted by the admission of the Company's ordinary shares to listing on the standard segment of the Official List of the United Kingdom Financial Conduct Authority ("FCA") and to trading on the main market for listed securities of London Stock Exchange plc (the "London Stock Exchange") on 25 August 2023. The direct listing marked a turning point for the organisation as we reached 'the end of the beginning' for the business. We were delighted that market opening event was attended by members of our Board, and representatives from Unicredit HVB - one of our most established customers, our global partners, the broker community and Summer Atlantic Capital, our joint venture partner in respect of RegTech China, demonstrating the strength of support we have for the business.
 
With the increased global visibility and access to the capital markets now available, and highly experienced Board and management team in place, we are very well positioned for our next phase of growth. In the background, we have continued to increase trading performance in our traditional market, and in the foreground, the Board and I have built the strategic plan and the investment plan. I have my feet firmly under the desk and started work with my established and talented senior leadership team on developing and executing the operational plan to make all that happen. As I have done so, I am excited to learn more about our customer and partner projects and the forces and movements in the marketplace, and to report on what I have experienced this last period.
 
Strong and Increasing Demand for Operational Resilience

We continue to see increasing demand for our products and services in the
markets we serve. The European Digital Operational Resilience Act (DORA),
FCA's PS6/21, applicable to Banking, financial services, Insurance, and their
information, communications and technology (ICT) service providers are now
firmly in their 'implementation periods' and affected organisations are
beginning to understand the associated challenges and seeking solutions and
expertise. This process is driving an increasing number of specific enquiries
from financial services firms and 'big-4' consultants serving this market.

 
Supplier of Choice in Core Market

In pursuit of our mission to be the 'Must-Have' Operational Resilience
solution, our unique focus, and comprehensive SaaS platform has firmly
established us as the leading provider in our core market, Italy.

 

With 60% of domestic banks in our primary geography now dependent on the Orbit
Open Platform to demonstrate compliance, the major global consultants serving
this market now develop and maintain knowledge and expertise in the platform
and align methods with the supporting software capabilities to provide
comprehensive solutions for their clients.

 

Healthy Customer Base

Following our first Corporate Value: "Solve for the Customer", we continue to
deliver significant value to our customers, with not only very high retention
rates, but continued expansion of products within our customers, generating
over half our revenues from our installed base in this and previous periods.
Our partnership-style approach with our customers continues to strengthen our
expertise and products within our core market, where customers, third parties,
and RTOP collaborate and combine knowledge to extend the power and value of
the Orbit Open Platform, benefitting all our customers.

 

Strong Partnerships and Alliances

In combination with major consultants and partners, such as Pricewaterhouse
Coopers Business Services S.r.l.: RTOP is able to offer its clients
significant value-add in the form of the methodology and change management
that is required to support the implementation and successful roll-out of
Operational Resilience across both local and multinational institutions.

 

With mature relationships and successful projects delivered with each partner,
this year we have seen an increasing number of requests to 'joint-bid'
requests for proposal, with Orbit Open Platform as the recommended software at
the outset. We have started work on expanding this model more widely across
Europe and in the UK as a key strategy for growth.

 

 

Reinforced Strategy

Over the last period, we formulated a reinforced strategy for growth,
including listing on the London Stock Exchange, and defining our investments
strategy to drive performance in four key areas, our 'Four Pillars' strategy:

 
1.   Consolidate our current business

a.   Customer Success - to protect revenues, especially the portfolio of
Annual Contract Value (PACV) and grow our business within our portfolio of
clients, targeting >110% net retention and a Customer Lifetime Value (LTV)
>£500k.

b.   Marketing & Sales - to expand our outbound sales and inbound
generation in our core markets to drive consistent, increased new business
with a low customer acquisition cost and high win-rates, and ultimately exceed
our targets for Customer Acquisition Cost to Lifetime Value ratio.

c.   Partnerships - proactive management of partnerships to provide
compelling joint solutions to the market and produce sustainable and
consistent revenues, with the opportunity to expand the model to new verticals
and geographies.

d.   New verticals - to leverage the success of Banking and Financial
services and target a wider audience of 'essential services' such as
utilities, public administration and healthcare, within our mature
geographies.

 
2.   Market Expansion

Since the direct listing in August 2023, in order to capitalise on the
significant global market opportunity for our solutions, we have begun to
establish go-to-market capabilities in the UK and China (via our joint
venture, RegTech China, with Summer Atlantic Capital). In the US we continue
to seek our first customers and partners.

a.   UK - Focusing on our initial Banking and Financial Services target
market, and both DORA and FCA regulation, leveraging our historical strength,
reference customers and global partners, we have begun to recruit a direct
sales team for target accounts and to 'sell with' our global partners, as well
as an experienced partner manager to help to foster local relationships with
global partners and maximise our opportunities together.

b.   APAC - we have begun working on a program of knowledge transfer and
software localization to support RegTech China in their go-to-market, focusing
on the enormous (>10x Europe) opportunity within manufacturing.

c.   US - We have begun to explore potential partnerships, joint product
development and mutual initial customers. Our initiatives will be aimed at
addressing the need for Operational Resilience as a competitive advantage, and
upcoming regulation which is likely to follow the Federal Reserve SR20-24
Interagency Paper on Sound Practices to Strengthen Operational Resilience
(2020).

 
3.   Product differentiation

To maintain and extend our competitive advantage in the marketplace, we have
begun to undertake a program of investment in the product to further
differentiate our solutions and create compelling solutions. This program
focuses on four areas:

a.   Leverage strength of customer base to solve the client's biggest
challenges and continuously add increased value in the customer solution.

b.   Further develop the user experience to provide not only the best
workflow, but also innovate with the user interface to present engaging,
insightful and indispensable insights across all stakeholders.

c.   Advantageously exploit technologies to increase customer value,
especially in the areas of automation analytics and AI, enhance the
distribution of the software, and enable scale through access via digital
marketplaces.

d.   Expand the product portfolio to incorporate via development,
integration or acquisition (or any combination) Cyber security assessment and
management and third-party risk assessment and management.

 
4.   Build for Scale

We are investing in developing a scalable world-class in-house sales and
marketing team that can generate demand and close business consistently,
predictably and at an increasing scale and reduced customer acquisition costs.
In particular, business transformation in the following areas:

a.   The introduction and embedding of value-based sales methodology and
solution selling processes and supporting technologies for automation,
forecasting, reporting and analysis.

b.   The clear segmentation of the target markets and messaging to enable
content and social media marketing to drive demand and generate consistent
leads that share our vision and are seeking the value that we provide.

c.   Proactively managed and supported partnerships for market entry in new
geos, and the ability to scale: supporting local implementation, professional
services, and first-line support.

d.   Enhancing the platform for distribution through digital marketplaces:
technically, non-functionally (self-service and support) and commercially
(billing).

 

Summary and outlook

 

On the back of a successful listing on the London Stock Exchange and strong
growth of the historical business in the first half of the year, we find
ourselves in an exciting position with a proven business model, a talented
team, a strong offering, established partnerships, and a healthy customer
base.

 

Looking forward to future growth, we have a mature revenue-generating base
from which to start, and a progressive 'four-pillars' strategy for expansion
and transformation. The delayed receipt of post-listing funds that were drawn
has meant a delay in the execution of the full strategy, and an adaptation of
the capital plan as mitigation. The board continues to work on resolving and
returning to plan in the coming months and we continue to develop the business
in line with the remainder of the strategy.

 

As we move into this next period, the existing ingredients for success give us
the platform and the right conditions for future growth. Our customer base,
current trading, strong partnerships and talented team give us an excellent
foundation on which to execute our 'four pillars' growth strategy.

 

While we target growth and accelerate performance operationally, it is vital
that we build the right conditions to scale rapidly during 2024 whilst
managing costs as we strive towards profitability to ensure sustained, and
value-creation growth trajectory.

 

Directors' responsibility statement

 

The Directors are responsible for preparing the unaudited condensed
consolidated interim financial statements in accordance with applicable law
and regulations. A list of current Directors is maintained on RTOP's website:
https://regtechopenproject.co.uk/ (https://regtechopenproject.co.uk/)

 

The Directors confirm that, to the best of their knowledge, the unaudited
condensed consolidated interim financial statements have been prepared in
accordance with IAS 34 ("Interim Financial Reporting"), as issued by the
International Accounting Standards Board as contained in UK-adopted
International Financial Reporting Standards, and give a true and fair view of
the assets, liabilities, financial position and profit or loss of the Company,
or the undertakings included in the consolidation as a whole as required by
DTR 4.2.4 R of the FCA's Disclosure Guidance and Transparency Rules ("DTRs").

 

The Directors further confirm that the unaudited condensed consolidated
interim financial statements include a fair review of the information required
by DTR 4.2.7 R and DTR 4.2.8 R.

 

In accordance with the DTR 4.2.9(2) R, the Directors confirm that these
unaudited interim condensed consolidated financial statements have not been
audited or reviewed by auditors pursuant to the Financial Reporting Council
guidance on Review of Interim Financial Information.

 

The Directors have shared all the relevant working papers with their advisers.

 

By order of the Board

 

 

Ian Halliday-Pegg

Chief Executive Officer

 

 

Financial Review

 

REGTECH OPEN PROJECT PLC

UNAUDITED STATEMENT OF COMPREHENSIVE INCOME

 

FOR THE PERIOD ENDED 30 JUNE 2023

                                                                        10 March 2023 to

                                                                        30 June 2023
                                                                        Unaudited
                                                             Notes      £ '000

 Revenue                                                                -
 Cost of sales                                                          -
 Gross loss                                                             -

 Administrative expenses                                                -
 Other operating income / (costs)                                       -
 Operating profit                                                       -

 Finance costs                                                          -

 Profit before tax                                                      -

 Taxation                                                               -

 Profit for the period                                                  -

 Other comprehensive income                                             -

 Total comprehensive loss for the period                                -

 Loss per share
 Basic and diluted loss per share - continuing operations

                                                                        (0.00)
 Basic and diluted loss per share - discontinued operations

                                                                        (0.00)
 Basic and diluted loss per share - total                               (0.00)

 

The above unaudited condensed statement of comprehensive income should be read
in conjunction with the accompanying notes.

 

 

REGTECH OPEN PROJECT PLC

UNAUDITED CONDENSED STATEMENT OF FINANCIAL POSITION

 

AS AT 30 JUNE 2023

 

                                       30 June 2023

                                       Unaudited
                            Notes      £ '000

 Current assets
 Other receivables                     50
 Total current assets                  50
 Total assets                          50

 Current liabilities
 Other payables                        -
 Total current liabilities             -
 Net current liabilities               -

 Net assets                            50

 Equity
 Share capital              4          50
 Share premium                         -
 Retained losses                       -
 Total equity                          50

 

The above unaudited condensed statement of financial position should be read
in conjunction with the accompanying notes.

 

 

REGTECH OPEN PROJECT PLC

UNAUDITED CONDENSED STATEMENT OF CHANGES IN EQUITY

 

FOR THE PERIOD ENDED 30 JUNE 2023

 

                                                     Share capital  Retained earnings  Total
                                                     £ '000         £ '000             £ '000

 As at 10 March 2023                                 -              -                  -

 Result for the period                               -              -                  -
 Loss for the period and total comprehensive income  -              -                  -

 Issuance of new shares                              50             -                  50
 As 30 June 2023                                     50             -                  50

 

The above unaudited statement of changes in equity should be read in
conjunction with the accompany notes.

 

REGTECH OPEN PROJECT PLC

NOTES TO THE UNAUDITED INTERIM FINANCIAL STATEMENTS

 

FOR THE PERIOD ENDED 30 JUNE 2023

 

1.   Company information

 

Regtech Open Project plc (the "Company" and, together with its subsidiaries
and subsidiary undertakings, the "Group") is a public limited company
incorporated in England and Wales. The address of its registered office 9(th)
Floor 107 Cheapside, London EC2V 6DN, United Kingdom. The Company's ordinary
shares are admitted to listing on the standard segment of the Official List of
the Financial Conduct Authority and to trading on the main market for listed
securities of London Stock Exchange plc.

 

These unaudited interim financial statements of the Company were approved for
issue by the Company's board of directors (the "Board" or "Directors") on 28
September 2023.

 

2.   Basis of preparation

 

Accounting convention

 

These unaudited interim financial statements for the half-year reporting
period ended 30 June 2023 has been prepared in accordance with Accounting
Standard IAS 34 ("Interim Financial Reporting"), and relate only the Company,
which was incorporated on 10 March 2023.

 

It should be noted that, given the events which occurred after the reporting
date during the interim reporting period, specifically the contribution of the
entire business and assets of RegTech Open Project S.p.A. ("RegTech Italy"),
principally comprising a proprietary software platform focussed on operational
resilience (the "Orbit Open Platform"), and transferred all its liabilities to
the Company, which completed on 14 August 2023, this interim report does not
include all the notes of the type normally included for a newly listed
company.

 

Rather, this interim report is to be read in conjunction the Group's
historical information which was reported under International Financial
Reporting Standard as adopted in the UK ("IFRS") and included in the Part XII
- Historical Financial Information of the Company's prospectus, approved by
the FCA, and issued on 22 August 2023 (the "Prospectus") which is available on
https://regtechopenproject.co.uk/ (https://regtechopenproject.co.uk/) .

 

The accounting policies adopted are consistent with those of the previous
financial year and corresponding interim reporting period.

 

New and amended standards adopted by the Company

 

No new or amended standards became applicable for the current reporting period
that impacted the Company. The Company did not have to change its accounting
policies or make retrospective adjustments as a result of adopting any new or
amended standards in the current interim reporting period.

 

3.   Going Concern

 

At the 30 June 2023, the Company had cash balances of £Nil and net current
liabilities of £Nil. This is the first period of trading for the Company.

 

Since completion of the Direct Listing a total of £2.5 million funds have
been drawn under the English law governed fixed term unsecured working capital
loan agreement, cast as a deed, between the Company and RegTech Italy (the
"Shareholder Loan Agreement") and £437,000 of funds have been received by the
Company, the difference is accruing 15% compounding interest ("Late Drawdown
Fee").

The Board have reviewed the cashflow on a prudent basis and acknowledge that
funding from the Shareholder Loan Agreement is required to meet its
liabilities over the next 12 months. The Board is therefore working on
mitigation of the risks relating to delays in receipt of the outstanding
principal under the Shareholder Loan Agreement and is confident this will not
affect the ultimate growth of the business.

 

Accordingly, the Company and RegTech Italy entered into the Side Letter
Agreement, pursuant to which the parties agreed the following payment schedule
for the outstanding funds and any accrued Late Drawdown Fee:

 

 £515,750                   By 5 p.m. (London time) on 4 October 2023
 £515,750                   By 5 p.m. (London time) on 11 October 2023
 £515,750                   By 5 p.m. (London time) on 18 October 2023
 £515,750                   By 5 p.m. (London time) on 25 October 2023
 Accrued Late Drawdown Fee  By 5 p.m. (London time) on 1 December 2023

 

The Side Letter Agreement further provides an option for the Company, on three
business days' notice, to transfer the 2,250,000 warrants (each exercisable
into one new ordinary share of nominal value £0.20 each in the capital of the
Company at an exercise price of £0.20, or a cashless exercise basis) held by
RegTech Italy to the Company or a third party designated by the Board
(independent of Alessandro Zamboni), and any net proceeds realised shall
reduce the outstanding principal under the Shareholder Loan Agreement.

 

The entry by the Company and RegTech into the Side Letter Agreement
constituted a material related party transaction for the purposes of DTR 7.3
and was, accordingly, voted upon by the independent Directors (excluding
Alessandro Zamboni, who, in each case, constituted a "related party" (as such
term is defined in IFRS)), and such independent Directors consider each such
material related party transaction in respect of the Side Letter Agreement to
be fair and reasonable from the perspective of the Company and its
Shareholders who are not a related party.

 

Acknowledging the facts outlined above, the source of the funding for the
Shareholder Loan Agreement has taken longer than anticipated and the Directors
therefore have prudently identified uncertainty in the cash flow model. This
uncertainty arises with respect to both the future timing and quantum of
funding from the Shareholder Loan Agreement. In this regard, if these future
funds are not secured as the Directors envisage, it is possible that the
Company would have a shortfall in cash and require alternative funding during
the forecast period. On the basis of the above, the Directors believe there
are material uncertainties which may cast significant doubt upon the entities'
ability to continue as a going concern.

 

The Directors do however remain confident in the business model, which
includes the original funding, and believe the Company could be managed in a
way to allow it to meet its ongoing commitments and obligations through
mitigating actions including cost saving measures and securing alternative
sources of funding the board continues to investigate should it be required.

 

As such the Directors consider it appropriate to prepare these interim
financial statements on a going concern basis, taking into account the
material uncertainties noted above, and have not included the adjustments that
would result if the Company were to be unable to continue as a going concern.

 

4.   Share capital

 

Allotted, called up and fully paid shares

                                      30 June 2023

                                      Unaudited
                                      No. 000  £ '000
 Ordinary shares of £1 each           50       50
 Total                                50       50

 

50,000 shares were issued on incorporation dated 10 March 2023.

 

5.   Subsequent events

 

On 22 August 2023, the Company issued the Prospectus in connection with the
admission of its ordinary shares to listing on the standard segment of the
Official List of the Financial Conduct Authority and to trading on the main
market for listed securities of London Stock Exchange plc. Admission became
effective, and that unconditional dealings in the ordinary shares commenced,
at 8.00 a.m. (London time) on 25 August 2023 ("Admission").

 

Pursuant to an English law governed contribution agreement between the Company
and RegTech Italy (a wholly-owned subsidiary of The AvantGarde Group S.p.A.
("TAG")), dated 14 August 2023, RegTech Italy contributed its entire business
and assets, principally comprising a proprietary software platform focussed on
operational resilience (the "Orbit Open Platform"), and transferred all its
liabilities to the Company, in consideration for which, the Company allotted
and issued 11,950,000 new ordinary shares of nominal value £1.00 each to
RegTech Italy. Following the Contribution, the Company subdivided is entire
issued share capital of 12,000,000 ordinary shares of nominal value £1.00
each into 60,000,000 ordinary shares of nominal value £0.20 each ("Ordinary
Shares"). Prior to Admission, TAG (directly and via RegTech Italy) was the
ultimate beneficial owner of 60,000,000 existing Ordinary Shares.

 

Pursuant to certain English and Italian law governed sale and purchase
agreements between RegTech Italy and 12 independent third-parties
("Purchasers"), entered into prior to the date of the Prospectus (the "SPAs"),
conditional on Admission, RegTech Italy irrevocably agreed to sell, and the
Purchasers irrevocably agreed to buy, in aggregate 17,483,000 existing
Ordinary Shares at a price of £1.00 each (the "Purchase Price"; the reference
price per Ordinary Share on Admission, the "Reference Price").

 

Pursuant to certain Italian law governed acquisition agreements between TAG
and two selling independent third-parties, entered into prior to the date of
the Prospectus, conditional on Admission, TAG irrevocably agreed to purchase
shares in an unlisted private company and will procure that RegTech Italy
transfers 650,000 existing Ordinary Shares in aggregate as consideration to
the selling independent third parties, using the Purchase Price as a
denominator.

 

Pursuant to certain English law governed settlement agreements between TAG and
four settlor independent third-parties, entered into prior to the date of this
Prospectus, conditional on Admission, TAG irrevocably agreed to procure that
RegTech Italy transfers 2,864,000 existing Ordinary Shares to settle
outstanding debts between TAG and such independent third-parties, using the
Purchase Price as a denominator.

 

Pursuant to an English law governed loan agreement, cast as a deed, between
the Company and RegTech Italy, dated 21 August 2023 (the "Shareholder Loan
Agreement"), conditional on Admission, RegTech Italy agreed to provide a
facility of up to £8,000,000 to the Company, drawable at the Company's
request, to cover the Company's working capital requirements, comprising: (i)
up to £2,000,000 in cash, to be drawn by 1 September 2023, which shall
attract a non-compounding interest rate of 10% per annum (calculated on a
360-day basis); (ii) up to £500,000 in cash, to be drawn by 30 September
2023, which shall attract a non-compounding interest rate of 10% per annum
(calculated on a 360-day basis); (iii) during the period commencing on 25
August 2023 and ending on 31 March 2024, up to £2,000,000, which may, at the
election of the Company, be set-off on a £-for-£ basis against certain
payables of the Company (where such payables shall be transferred to RegTech
Italy to be settled), and which shall attract a non-compounding interest rate
of 5% per annum (calculated on a 360-day basis); and (iv) save to the extent
that the Company receives unrestricted cash amounts from the exercise of any
outstanding Warrants and/or alternative equity, debt or hybrid financing and
such unrestricted cash amounts are in the opinion of the Board sufficient to
enable the Company to meet the Company's working capital obligations under the
Prospectus Regulation Rules, during the period commencing on 1 October 2023
and ending on 31 December 2024, up to £3,500,000 in cash, which may be drawn
by the Company by giving RegTech Italy no less than 20 business days' written
notice and subject to maximum monthly drawings of £500,000 (until fully
drawn), and which shall attract a non-compounding interest rate of 10% per
annum (calculated on a 360-day basis) (the "Shareholder Facility"). Funds
available under the Shareholder Facility are fully committed as at the date of
this Prospectus, and any outstanding conditions to drawdown post-Admission are
within the Company's control and/or are customary. The due date for repayment
by the Company of amounts drawn and outstanding under the Shareholder Facility
is 31 December 2026. Any principal amount (excluding accrued interest) drawn
and outstanding on 31 December 2026 shall attract a compounding interest rate
of 15% per annum thereafter.

 

Pursuant to an English law governed warrant instrument, cast as a deed, by the
Company, dated 21 August 2023, 7,500,000 warrants ("Warrants") were
constituted, each exercisable into one new Ordinary Share ("Warrant Shares")
at the option of the holder by a final exercise date of 25 August 2026 at an
exercise price equal to the nominal value of £0.20 (subject to any adjustment
for any variation of capital of the Company) per Warrant Share, or on a
cashless basis. The Company issued, conditional on Admission, 2,250,000
Warrants to RegTech Italy as a commitment fee in connection with the
Shareholder Facility, 3,750,000 Warrants to TAG relating to conversion of
historic TAG shareholder loans to the Company and 1,500,000 Warrants to
Westcott Hill Capital Limited in relation to pre-Direct Listing business
advisory services.

 

Cautionary statement

 

These unaudited interim results for the six months ending 30 June 2023
("Interim Results") have been prepared in accordance with the requirements of
the Companies Act 2006 (as amended) and the liabilities of the Directors in
connection with these Interim Results shall be subject to the limitations and
restrictions provided by such law.

 

These Interim Results are prepared for and addressed only to the Shareholders
as a whole and to no other person. The Company, its Directors, employees,
agents, or advisers do not accept or assume responsibility to any other person
to whom these Interim Results are shown or into whose hands it may come, and
any such responsibility or liability is expressly disclaimed.

 

These Interim Results contain forward looking statements, which are
unavoidably subject to risk and uncertainty because they relate to events and
depend upon circumstances that will occur in the future. It is believed that
the expectations set out in these forward-looking statements are reasonable,
but they may be affected by a wide range of variables which could cause future
outcomes to differ from those foreseen. All statements in these Interim
Results are based upon information known to the Company at the date of this
report. Except as required by law, the Company undertakes no obligation to
publicly update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise.

 

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