REG - Summerway Cap PLC - Unaudited Interim Report
30/11/2021 07:00
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RNS Number : 9571T Summerway Capital PLC 30 November 2021
30 November
2021
Summerway Capital Plc
Second Unaudited Interim Report for the twelve months ended 31 August 2021
London, 30 November 2021 - Summerway Capital Plc ("Summerway" or the
"Company") announces its unaudited condensed interim results for the twelve
months ended 31 August 2021.
Over the period, Summerway incurred a loss after taxation for the twelve
months to 31 August 2021 of £473,007 (2020: £174,511), reflecting operating
expenses of £276,957 (2020: £186,552), share based payment expense of
£105,749 (2020: Nil), one-off costs relating to the January 2021 placing of
shares and change in investment strategy of £92,159 (2020: Nil) and finance
income of £1,858 (2020: £12,041).
As at 31 August 2021, Summerway held £6.805 million cash (31 August 2020:
£5.488 million).
The Interim Report is also available on the Company's website at
www.summerwaycapital.co.uk (http://www.summerwaycapital.co.uk) .
Enquires:
Summerway Capital Plc
Tony Morris
020 7440
7520
Canaccord Genuity Limited (Nominated Adviser and Broker)
Andrew Potts
020 7523 8000
CHAIRMAN'S STATEMENT
I am pleased to present to shareholders the Interim Condensed Consolidated
Financial Statements of Summerway Capital Plc for the twelve months ended 31
August 2021.
As announced on 29 November 2021, Summerway extended its current financial
year end to 31 December 2021 in order to align its accounting period end with
that of its proposed acquisition, Vertigrow Technology Ltd ("Vertigrow"), a UK
based pharmaceutical company specialising in the researching, growing and
supply of medicinal cannabis.
The unaudited, second interim results incorporate results for the unaudited
twelve month period to 31 August 2021 and are set out below. All comparisons
are against Summerway's audited results for the year ended 31 August 2020.
The Company's audited results for the 16-month period ending 31 December 2021
will be published no later than 30 April 2022.
Strategy
On 20 October 2021 and post period end, the Company amended its investing
policy and is now focused on investment and acquisition opportunities across
the healthcare and pharmaceutical sectors, particularly in new and emerging
therapeutic areas.
The Directors believe there are numerous opportunities to invest in, or
acquire businesses that can be organically or acquisitively grown to become
leading healthcare and pharmaceutical companies, and the Company continues to
progress its previously announced proposed acquisition of Vertigrow.
As part of the change in strategy, we were delighted to welcome Elizabeth
("Liz") Shanahan to the Board of Summerway as an Independent Non-Executive
Director. Liz is a life sciences entrepreneur with extensive experience
advising leading global pharmaceutical and healthcare organisations, and her
skill set will be a valuable addition to the Board as we execute the Company's
new growth strategy.
Results in the Period
The Group's loss after taxation for the twelve months to 31 August 2021 was
£473,007 (2020: £174,511), reflecting operating expenses of £276,957 (2020:
£186,552), share based payment expense of £105,749 (2020: Nil), one-off
costs relating to the January 2021 placing of shares and change in investment
strategy of £92,159 (2020: Nil) and finance income of £1,858 (2020:
£12,041). As at 31 August 2021, Summerway held £6.805 million cash (31
August 2020: £5.488 million).
Developments post Period End
On 21 September 2021, the Company announced its proposed change in strategic
focus to that of the healthcare and pharmaceutical sectors, where the Board
considered there to be attractive options for the Company's existing
Shareholders, many of which invested at the Company's original AIM Admission.
At the same time, the Company noted it was in discussions with an immediate
opportunity within these alternative sectors, and as the acquisition would be
classified a reverse takeover transaction pursuant to the AIM Rules, its
shares would be suspended, which continues to be the case.
In conjunction with the change in strategy, a number of directorate changes
occurred, including the resignations of Vin Murria OBE as Chairman of the
Company, and Paul Gibson and Tony Morris as Non-Executive Directors, as well
as the appointment of Liz Shanahan as a Non-Executive Director, with Benjamin
Shaw assuming the role of Interim Chairman of the Company.
On 20 October 2021, Shareholders approved the Company's proposed change in
investing policy, and on the 28 October 2021, the Company announced the
proposed acquisition of Vertigrow for £80 million consideration and a
proposed £7 million placing. Concurrently, the Company also made available to
Vertigrow a loan of up to £4.25 million in order to accelerate Vertigrow's
capital expenditure in its Midlands based facility ahead of completion of the
proposed acquisition. As at 29 November 2021, £2.125 million is drawn under
the facility.
Outlook
As a Board, we remain excited about the opportunity for securing the Group's
inaugural transaction, and in doing so, establish a position within the
substantial and rapidly growing pharmaceutical medical cannabis sector. We
look forward to updating Shareholders in due course as the Company's proposed
acquisition with Vertigrow progresses towards completion.
Benjamin Shaw
Interim Chairman
SUMMERWAY CAPITAL PLC
Consolidated Statement of Comprehensive Income
For the year ended 31 August 2021
Year ended Year ended
31 August 2021 31 August 2020
Note
£ £
Administrative expenses 4 (474,865) (186,552)
Operating loss (474,865) (186,552)
Finance income 1,858 12,041
Loss before income tax (473,007) (174,511)
Income tax - -
Loss for the year (473,007) (174,511)
Total other comprehensive income - -
Total comprehensive loss (473,007) (174,511)
Attributable to:
Ordinary equity holders of the Company (473,007) (174,511)
Loss per ordinary share
Basic and diluted loss per share attributable to ordinary equity holders of 5 (6.46)p (2.85)p
the Company
The Group's activities derive from continuing operations.
The notes form part of these financial statements
SUMMERWAY CAPITAL PLC
Consolidated Statement of Financial Position
As at 31 August 2021
As at As at
31 August 31 August
2021 2020
Note
£ £
Assets
Current assets
Cash and cash equivalents 6,805,175 5,487,991
Other receivables 7 14,755 9,779
Total current assets 6,819,930 5,497,770
Total assets 6,819,930 5,497,770
Current liabilities
Trade and other payables 9 35,833 29,715
35,833 29,715
Non-current liabilities
Incentive shares 10 20,300 12,000
Total liabilities 56,133 41,715
Net Assets 6,763,797 5,456,055
Capital and reserves attributable to equity holders of the parent
Share capital 8 80,334 61,300
Share premium reserve 7,367,052 5,711,086
Capital redemption reserve 49,500 49,500
Accumulated losses (733,089) (365,831)
Total Equity 6,763,797 5,456,055
SUMMERWAY CAPITAL PLC
Consolidated Statement of Changes in Equity
For the year ended 31 August 2021
Notes Share Share Capital Accumulated Total
capital Premium Redemption losses equity
reserve reserve
£ £ £ £ £
Balance as at 31 August 2019 61,300 5,711,086 49,500 (191,320) 5,630,566
Loss for the year - - - (174,511) (191,320)
Balance as at 31 August 2020 61,300 5,711,086 49,500 (365,831) 5,630,566
Issue of shares 19,034 1,655,966 - - 1,675,000
Warrants - share based payment expense - - - 105,749 105,749
Loss for the year - - - (473,007) (473,007)
Balance as at 31 August 2021 80,334 7,367,052 49,500 (733,089) 6,763,797
SUMMERWAY CAPITAL PLC
Consolidated Statement of Cash Flows
For the year ended 31 August 2021
Year ended Year ended
31 August 2021 31 August 2020
Note
£ £
Cash flows from operating activities
Operating loss (474,865) (186,552)
Adjustment for share based payment expense 105,749 -
Adjustments to reconcile loss before income tax to operating cash flows:
(Increase)/decrease in other receivables 7 (4,976) 5,891
Increase in trade and other payables 9 14,418 8,774
Bank interest received 1,858 12,041
Net cash used in operating activities (357,816) (159,846)
Cash flows from financing activities
Proceeds from issue of share capital 8 1,675,000 -
Net cash generated from financing activities 1,675,000 -
Net increase/ (decrease) in cash and cash equivalents 1,317,184 (159,846)
Cash and cash equivalents at beginning of the period 5,487,991 5,647,837
Cash and cash equivalents at the end of the period 6,805,175 5,487,991
The notes form part of these financial statements
SUMMERWAY CAPITAL PLC
Notes to the Financial Statements
For the year ended 31 August 2021
1. GENERAL INFORMATION
Summerway Capital Plc is an investing company (for the purposes of the AIM
Rules for Companies) and is incorporated in England and Wales and domiciled in
the United Kingdom (company number: 11545912). It is a public limited company
and the address of the registered office is 32-33 Cowcross Street, London EC1M
6DF. The Company is the parent company of Summerway Subco Limited (company
number: 11565845). The activity of the Company is the investment, acquisition
and subsequent development of companies across the healthcare and
pharmaceutical sectors, where the Directors believe there are tangible
opportunities to drive strategic, operational and performance improvement,
either as a standalone entity or as a result of broader initiatives.
2. BASIS OF PREPARATION
These Interim Condensed Consolidated Financial Statements and accompanying
notes have neither been audited nor reviewed by the auditor, do not constitute
statutory accounts within the meaning of Section 434 of the Companies Act 2006
and do not include all the information and disclosures required in annual
statutory financial statements. They should be read in conjunction with the
Group's Annual Report and Accounts for the year ended 31 August 2020 which are
available on the Group's website. Those statutory accounts were approved by
the Board of Directors on 1 February 2021 and have been filed with Companies
House. The report of the auditors on those accounts was unqualified.
These Interim Condensed Consolidated Financial Statements were approved by
the Board of Directors on 29 November 2021.
3. ACCOUNTING POLICIES
The accounting policies applied by the Group in these Interim Condensed
Consolidated Financial statements are the same as those applied by the Group
in the audited consolidated financial statements for the year ended 31 August
2020 and which will form the basis of the 2021 Annual Report.
There have been no new accounting standards or changes to existing accounting
standards applied for the first time since 1 September 2020 which have a
material effect on these interim results. The Group does not currently expect
any material impact of any other standards issued by the IASB, but not yet
effective.
4. ADMINISTRATION EXPENSES
Year ended 31 August Year ended 31 August
2021 2020
£ £
Group expenses by nature
One-off costs related to the issue of shares and change in investing strategy 92,159 -
Staff related costs 76,552 54,780
Office costs - 21,890
NOMAD, registrar and Stock Exchange costs 67,230 46,391
Audit, accountancy & professional costs 116,162 50,997
Share based payment expense 105,749 -
Other expenses 17,013 12,494
474,865 186,552
5. LOSS PER SHARE
Basic loss per ordinary share is calculated by dividing the loss attributable
to equity holders of the Company by the weighted average number of ordinary
shares in issue during the period.
Year ended 31 August 2021 Year ended 31 August 2020
Loss attributable to the owners of the Company £ (473,007) £ (174,511)
Weighted average number of ordinary shares in issue 7,318,979 6,130,000
Basic and diluted loss per share (6.46) p (2.85) p
6. INVESTMENTS
Principal subsidiary undertakings of the Group
The Company directly owns the ordinary share capital of its subsidiary
undertakings as set out below:
The issued share capital of the subsidiary comprises 1 A ordinary share of
£0.01 and 1,450,000 B ordinary shares of £0.01.
Subsidiary Proportion of A ordinary shares held by Company Proportion of B ordinary shares held by Company
Nature of business Country of incorporation
Summerway Subco Limited Incentive vehicle England and Wales 100% 0%
As the Company's total investment holding in the subsidiary is £0.01, no
investment value is presented in the statement of financial position.
The address of the registered office of Summerway Subco Limited (the
"Subsidiary") is 32-33 Cowcross Street, London EC1M 6DF. The subsidiary was
incorporated on 12 September 2018 and so prepares its own financial statements
for the period ended 30 September each year. The subsidiary was dormant
throughout the year to 30 September 2021 and it is therefore exempt from audit
by virtue of s479A of Companies Act 2006.
The A ordinary shares have full voting rights, full rights to participate in a
dividend and full rights to participate in a distribution of capital.
The B ordinary shares do not have voting rights. No dividends shall be
declared in relation to any of the B ordinary shares without the consent of
the Parent company. The B ordinary shares are not to be redeemed and are not
liable to be redeemed.
Further details of the Subsidiary Incentive Scheme can be found on pages 42
and 43 of the Company's Placing and Admission document published on 16 October
2018, pages 6 and 7 of the Company's Circular issued to Shareholders on 23
December 2020, in Note 12 of the Company's Interim Report for the six months
ended 28 February 2021, and in Notes 12 and 14.
7. OTHER RECEIVABLES
All receivables are current. There is no material difference between the book
value and the fair value of receivables.
As at As at
31 August 31 August
2021 2020
£ £
Amounts falling due within one year
Prepayments 4,334 9,180
Other receivables 10,421 599
14,755 9,779
8. CALLED UP SHARE CAPITAL
As at As at
31 August 31 August
2021 2020
£ £
Issued
8,033,409 (2020: 6,130,000) ordinary shares of 1p each 80,334 61,300
80,334 61,300
On 15 January 2021 1,903,409 ordinary shares of £0.01 each were issued to Vin
Murria at a placing price of 88 pence per share and were admitted to trading
on AIM.
9. TRADE AND OTHER PAYABLES
There is no material difference between the book value and the fair value of
the trade and other payables.
As at As at
31 August 31 August
2021 2020
£ £
Trade payables 1,051 315
Accruals 33,225 28,800
Other tax and social security payables 1,557 600
35,833 29,715
10. NON-CURRENT LIABILITIES
As at As at
31 August 31 August
2021 2020
£ £
Incentive shares 20,300 12,000
20,300 12,000
The incentive shares liability is estimated at fair value through profit and
loss using level 3 fair value measurement techniques.
Fair values are categorised into different levels in a fair value hierarchy
based on the degree to which the inputs to the measurement are observable and
the significance of the inputs to the fair value measurement in its entirety:
· Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or liabilities.
· Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices).
· Level 3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
The B shares issued by the subsidiary under the incentive scheme were deemed
to have an implied aggregate subscription price of £20,300, based on the
nominal value per B share plus a premium. The initial subscription price of
the incentive shares remains the best estimate of the fair value of the
liability associated with the incentive shares as none of the criteria for
potential value creation have been met as at 31 August 2021. The fair value of
the liability is assessed at each reporting date with any changes accounted
for as a fair value gain or loss and recognised directly in the statement of
comprehensive income.
11. SHARE-BASED PAYMENTS
On 15 January 2021, the Company granted Vin Murria a warrant providing for a
right to subscribe for an additional 3,246,062 new ordinary shares at 88 pence
per share. The warrant instrument was exercisable at any time from grant
date up to and including the eighteen-month anniversary of grant date. As at
31 August 2021, all of the 3,246,062 warrants remained outstanding, and the
share-based payments expense for the period to 31 August 2021 was £105,749.
The fair value of the outstanding warrants has been estimated using the
Black-Scholes option pricing model. Volatility has been estimated at 19.75
per cent. using the arithmetical mean of both the 1 year AIM All Share
volatility index and the 3 year AIM All Share volatility index as at 31 March
2021. Additional assumptions used in the calculation of fair value are
outlined as follows:
31 August
2021
Net asset value per share at grant date £0.88
Exercise price £0.88
Expected volatility 19.75%
Dividend yield 0%
Expected life of option 1.5 years
Risk free rate 0.003%
12. RELATED PARTY DISCLOSURES
Parties are considered to be related if one party has the ability to control
the other party or exercise significant influence over the other party, or the
parties are under common control or influence, in making financial or
operational decisions.
In conjunction with the corporate events announced on the 15 January 2021, the
Company continued with, entered into, amended and terminated a number of
related party arrangements. These are set out below.
Service agreements
Under the terms of the Chairman and Non-Executive Director service agreements,
the Chairman and the Non-Executives were each paid a monthly fee of £1,500
per calendar month in arrears.
Administrative and accounting services
The Company engaged Fraser Real Estate, a company in which Alexander Anton is
an indirect shareholder to provide administrative and accounting services
throughout the period. The Company paid Fraser Real Estate £2,964 during the
period for the provision of these services.
Placing agreement and issue of warrants
On 15 January 2021, the Company raised gross proceeds of £1,675,000 through
the issuance of 1,903,409 new ordinary shares of the Company to Vin Murria at
a placing price of 88 pence per share. At the same time, the Company issued
Vin Murria with 3,246,062 warrants which provided for a right to subscribe for
an addition 3,246,062 additional new ordinary shares of the Company at an
exercise price of 88 pence per share. The warrants were exercisable in whole
or in part during an exercise period commencing on the date of issue of the
warrants and terminating 18 months after the date of issue. Vin Murria also
purchased 500,000 existing ordinary shares at 85 pence per share from a
shareholder on 15 January 2021.
Share capital and Directors' holdings
Following completion of the placing and the issuance of 1,903,409 new ordinary
shares, the Company's total issued share capital is 8,033,409 ordinary shares
of 1p each.
On 8 April 2021, Vin Murria sold 1,000,000 ordinary shares of the Company to a
UK institutional investor at a price of £1.65 per share. Following this
secondary share trade, Vin Murria continued to hold 1,403,409 ordinary shares
of the Company.
As at 29 November 2021, the Directors and their connected persons hold a total
of 500,000 ordinary shares in the Company, representing 6.2% of the Company's
total issued share capital.
Subsidiary Incentive Scheme
On 15 January 2021, the Company made certain adjustments to the Subsidiary
Incentive Scheme in order to recognise the proposed change in strategic
direction of the Company at that stage and the expectation that the incoming
team and others will be instrumental in leading the execution of this revised
strategy, and in turn, the anticipated creation of Shareholder Value.
A summary of the key amendments compared to the original Subsidiary Incentive
Scheme as at Admission are set out in the following table.
Item Previous Subsidiary Incentive Scheme Amended Subsidiary Incentive Scheme
Percentage of Shareholder Value available to Scheme Participants (pre 10 per cent. Up to 20 per cent.
acquisition of, or investment in operating company)
Target compound annual growth rate hurdle 13.5 per cent. 7.5 per cent.
Commencement date On Admission 15 January 2021
Initial Value Market capitalisation on Admission Unchanged
Vesting period Three- to five-year period or upon a change of control of the Company or the Unchanged
Subsidiary
Scheme Participants, respective B Share holdings Alexander Anton - 333,333 Alexander Anton - 75,000
and current aggregate Shareholder Value participation Benjamin Shaw - 333,333 Benjamin Shaw - 75,000
Mark Farmiloe - 333,333 Mark Farmiloe - 75,000
Tony Morris - 175,000
Vin Murria - 1,000,000
Paul Gibson - 50,000
Aggregated - 1,450,000
Under the Subsidiary Incentive Scheme, participants are only rewarded if a
predetermined level of Shareholder value is created over a three-year period,
a five-year period, or upon a change of control of the Company (whichever
occurs first), which is calculated by reference to the growth in market
capitalisation of the Company, following adjustments for the issue of any new
ordinary shares and taking into account dividends and capital returns.
From 15 January 2021, participants are entitled to up to 20 per cent. of the
Shareholder value created, subject to such Shareholder value having increased
by 7.5 per cent. per annum compounded over a period of between three and five
years from 15 January 2021 or following a change of control of the Company or
the Subsidiary.
Under the amendments to the Subsidiary Incentive Scheme, Alexander Anton's,
Benjamin Shaw's and Mark Farmiloe's original B share allocations were subject
to a buyback by the Company at their original subscription price of £0.012
per B share for a total consideration of £4,000 each (£12,000 in aggregate).
Following this buyback, the articles of Summerway Subco Limited were amended
in order to implement the proposed changes to the Subsidiary Incentive Scheme.
Alexander Anton, Benjamin Shaw, Mark Farmiloe, Tony Morris, Vin Murria and
Paul Gibson subscribed for newly issued B shares at a revised subscription
price of £0.014 per B share.
The allocations of B shares in issue as at 31 August 2021 are set out below.
Name B
Shares held
Alexander Anton 75,000
Benjamin
Shaw 75,000
Mark
Farmiloe 75,000
Tony
Morris
175,000
Vin
Murria 1,000,000
Paul
Gibson
50,000
Total 1,450,000
Corporate advisory agreements
On 15 January 2021, the Corporate Advisory Agreement entered into between the
Company and AFS Advisors LLP (an entity wholly-owned by Alexander Anton,
Benjamin Shaw and Mark Farmiloe) was terminated at nil cost to the Company.
On 15 January 2021, the Company entered into a new agreement with Tessera
Investment Management Limited ("Tessera") pursuant to which Tessera has agreed
to provide strategic and general corporate advice, and M&A and capital
raising transaction support services to the Company. Tessera charge £12,500
per month (plus VAT) payable monthly in arrears from the date of the
agreement. In order to align the parties' collective interests and ensure the
parties share in the risk and reward of certain successful transactions, a
discretionary bonus may be awarded to Tessera by the Board in the event of the
successful completion of certain transactions. Tony Morris, Non-Executive
Director of the Company during the period, is a director and shareholder of
Tessera.
13. COMMITMENTS AND CONTINGENT LIABILITIES
There were no commitments or contingent liabilities outstanding at 31 August
2021 that require disclosure or adjustment in these financial statements.
14. POST BALANCE SHEET EVENTS
Amendment to Company investing policy and directorate changes
On 20 October 2021, the Company announced that following a vote by
Shareholders at the General Meeting held on the same date, the Company's
investing policy was changed to a focus on investment and acquisition
opportunities across the healthcare and pharmaceutical sectors, particularly
in new and emerging therapeutic areas.
In conjunction with the change in strategy, a number of directorate changes
occurred on 21 September 2021, including the appointment of an existing
non-executive director, Benjamin Shaw, as Interim Chairman of the Company and
Liz Shanahan as a Non-Executive Director, as well as the resignations of Vin
Murria OBE, Paul Gibson and Tony Morris as directors of the Company.
Following these directorate changes, the current Board of Directors for
Summerway is set out below.
Benjamin Shaw - Interim Non-Executive Chairman
David Firth - Independent Non-Executive Director
Elizabeth ("Liz") Shanahan - Independent Non-Executive Director
Acquisition Agreement
On 28 October 2021, the Company entered into a conditional agreement to
acquire the issued share capital of Vertigrow for total consideration of £80
million (the "Acquisition Agreement"). The proposed acquisition will be
subject, inter alia, to Summerway shareholder approval at a general meeting,
customary regulatory approvals and re-admission of the share capital of
Summerway (as enlarged by the proposed acquisition and proposed placing) (the
"Enlarged Group") to AIM, or admission to another stock exchange within the
UK, North America or other certain territories.
The total consideration of £80 million will be satisfied by the issue of
approximately 48.5 million new ordinary shares in the capital of the Company
at 165 pence per ordinary share to the shareholders of Vertigrow (the
"Consideration Shares").
The Consideration Shares issued to the founders of Vertigrow will be subject
to a lock in arrangement for a period of 12 months following completion of the
proposed acquisition, and customary orderly market provisions for a further
12 months following the expiry of the lock in arrangement.
Related Party Disclosures
In conjunction with the corporate events announced on the 21 September 2021,
the Company at the same time entered into, amended and terminated a number of
related party arrangements. These are set out below.
Service agreements
Under the terms of the Non-Executive Director service agreements which were
entered into on 21 September 2021, the Non-Executives (comprising David Firth
and Liz Shanahan) are each paid a monthly fee of £3,333 per calendar month in
arrears. Benjamin Shaw entered into a new Interim Chairman's service
agreement, and his monthly fee remained at £1,500 paid in arrears.
Subsidiary Incentive Scheme
Under the agreed amendments to the Subsidiary Incentive Scheme, Vin Murria
(former Chairman of the Company) agreed with the Company the buyback of her
1,000,000 B Shares at the original subscription price of £0.014 per B Share.
In addition, Tony Morris (former Non-Executive Director of the Company) agreed
with the Company the buyback of 50,000 B Shares at the original subscription
price of £0.014 per B Share. Both buybacks and certain amendments to the
Subsidiary Incentive Scheme shall be undertaken ahead of completion of the
proposed acquisition of Vertigrow.
The current and revised B share holdings reflective of the related party
transactions noted above is shown in the table below.
Name B Shares held Revised B Shares to be held
Alexander Anton 75,000 75,000
Benjamin Shaw 75,000 75,000
Mark Farmiloe 75,000 75,000
Tony Morris 175,000 125,000
Vin Murria 1,000,000 -
Paul Gibson 50,000 50,000
Resignation Letters
On 21 September 2021, Vin Murria, Paul Gibson and Tony Morris resigned as
directors of the Company. Under the terms of the resignation letters, each
exiting director received a compensation payment for loss of office of
£9,000. In addition, Vin Murria's warrant instrument issued on 15 January
2021 lapsed and was cancelled, and Vin Murria also agreed to the buyback of
her B Shares acquired under the Subsidiary Incentive Scheme. In addition,
Tony Morris agreed to the buyback of 50,000 of his B Shares acquired under the
Subsidiary Incentive Scheme. Both buybacks will be at the original
subscription cost of £0.014 per B Share.
Irrevocable Undertakings
Vin Murria also entered into an irrevocable undertaking with the Company under
which, as beneficial owner of 1,403,409 ordinary shares of the Company, agreed
to vote those shares in favour of the Company's change of investing policy and
also in favour of the Company's proposed acquisition of Vertigrow and other
related resolutions to be tabled to Shareholders as part of the AIM reverse
takeover transaction approval process.
Corporate Advisory Agreement
The Corporate Advisory Agreement entered into between the Company and Tessera
pursuant to which Tessera has agreed to provide strategic and general
corporate advice, and M&A and capital raising transaction support services
to the Company, will terminate in full with effect from admission of the
enlarged share capital of the Company to trading on AIM following shareholder
approval of the Company's acquisition of Vertigrow.
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