REG - Substrate Artificial Substrate AI-Class B - Extraordinary General Meeting Results

Substrate Artificial Inteligence SAAnnouncement

29/07/2024 15:15

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RNS Number : 2595Y  Substrate Artificial Inteligence,SA  29 July 2024

 

29 July 2024

SUBSTRATE ARTIFICIAL INTELIGENCE SOCIEDAD ANONIMA

 

("Substrate AI" or the "Company")

 

EXTRAORDINARY GENERAL MEETING RESULTS

 

Substrate AI (AQUIS: SAI/SAI.B) is pleased to announce that the resolutions
put to shareholders at the Extraordinary General Meeting held on 26 July 2024
were duly passed, as detailed below.

I.   Distribution of reserve for share premium in kind in a maximum amount
of €1,500,000.00 through the delivery of ordinary shares of the share
capital of the wholly-owned subsidiary Subgen AI Limited, or alternatively,
the cash payment equivalent to the reserve distribution for share premium in
kind proposed, at the choice of the shareholders; as well as any acts
necessary for its complete execution.

The following proposed resolution was submitted for approval by the
shareholders:

 

"To approve the partial distribution of the existing reserve in the Company's
balance sheet corresponding to the share issue premium for a maximum amount of
€1,500,000, through, at the option of the Company's shareholders: (i) the
transfer and delivery of ordinary shares of the share capital of the
wholly-owned subsidiary Subgen AI Limited  or, alternatively, (ii) the cash
payment equivalent to the proposed in-kind share premium reserve distribution
(the "Distribution").

 

It is proposed to carry out the Distribution under the terms and conditions
set out below, in accordance with the report of the Board of Directors dated
24 June 2024 in relation to it.

 

1.    Amount of share premium reserve to be distributed, shares of the
Subsidiary to be delivered and cash alternative.

Subgen AI Limited is an English private company limited by shares, with its
registered office at 100 Avebury Boulevard Milton Keynes, United Kingdom, MK9
1FH, and registered in the United Kingdom Companies House under number United
Kingdom 15374966 (the "Subsidiary"). The share capital of the Subsidiary
consists of 150,000,000 ordinary shares, fully paid-up, with a nominal unit
value of £0.01 each, i.e. with a share capital of £1,500,000.

 

In accordance with the valuation report issued on 21 June 2024 by Checkpoint
Partners S.L.U. on the shares of the Subsidiary, and on the basis of generally
accepted valuation criteria, the maximum value of the shares of the Subsidiary
subject to the Distribution is €1,500,000 (€0.01 for each share of the
Subsidiary, the "Reference Price").

 

The Distribution will be made in favour of the shareholder of the Company on
the cut-off date to be established, and including those shareholders who on
that date have such status (without prejudice to the fact that their shares
are not yet registered in the registers of the Management Company of the
Registration Systems,  Compensación y Liquidación de Valores S.A.U.) (the
"Reference Date"), which is scheduled to be 31 July  2024. In accordance with
Article 148 of the Capital Companies Act, the economic rights inherent in the
Class A Shares and Class B Shares (as defined below) owned by the Company on
the Reference Date shall be attributed proportionally to the rest of the
Company's shares. In this regard, the Company's shareholders will receive the
cash amount corresponding to these shares in treasury stock.

 

Both the Class A Shares and the Class B Shares of the Company participate in
the Distribution, and will receive shares of the Subsidiary in proportion to
the nominal value of their participation in the share capital of the Company,
with the ratio of the Class A Shares being 1:1 and taking into account that
the nominal value of the Class B Shares is 100 times lower than that of the
Class A Shares. Thus, the number of shares of the Company, for each class,
that it will be necessary to hold in order to be entitled to receive one share
of the Subsidiary (the "Distribution Ratio") will be:

 

-      1 share of the Subsidiary for every 1 Class A Share; and

-      1 share of the Subsidiary for every 100 Class B Shares.

 

The shares of the Subsidiary that are not distributed will remain under the
ownership of the Company.

 

The exact distribution amount of the issue reserve will be set by the Board of
Directors in accordance with the above Distribution Ratio within the maximum
amount, based on the number of Class A Shares and Class B Shares of the
Company outstanding on the Reference Date and taking the Reference Price as a
reference.

 

It is also approved to provide an alternative so that shareholders of the
Company who consider that the shares of the Subsidiary are potentially a less
liquid asset than their current stake in the Company may choose to receive in
cash the amount equivalent to the reserve distribution for share premium in
kind, which would amount to an amount per share of the Subsidiary equivalent
to the Reference Price. The Company's shareholders will have a period of time
to choose between the receipt of shares in the Subsidiary or the equivalent
amount in money, based on the valuation determined by Checkpoint Partners
S.L.U. in its valuation report.

 

2. Liquidation of the "peaks".

 

In application of the Distribution Ratio, shareholders of Class B Shares who
hold shares in a number that do not reach this proportion or their multiples
will generate surplus shares, called "peaks". In this case, the Company will
pay in cash the amount equivalent to the fraction resulting from dividing the
remaining Class B Shares by the aforementioned multiple, and multiplying said
fraction by the Reference Price, rounding the result to the nearest euro cent.

 

3. Procedure.

 

An option period is granted to shareholders of the Company who are entitled to
participate in the two-month Distribution (the "Option Period"), which is
scheduled to take place from 1 August 2024 to 30 September 2024, inclusive.
During the Option Period, the Company's shareholders may contact the Company
and its depositary institution and communicate their option to receive the
Distribution that corresponds to them in shares of the Subsidiary or, instead,
the value of the shares in cash or for the cash alternative.

 

The option mechanism will be articulated through a form for this purpose that
will be made available on the website to the shareholders of the Company, and
which must be sent completed, in which it is stated that the respective
shareholder is aware of the adoption of the Distribution agreement and its
terms, which confirms either the choice to receive cash or shares from the
Subsidiary,  as well as any other data that is necessary for the delivery of
the shares of the Subsidiary.

 

After the end of the Option Period, payment will be made by transfer to those
shareholders who have opted to receive the equivalent amount in cash, in
accordance with the bank details they have provided, which is expected to take
place on or before 14 October 2024. At that time, the payment to the Company's
shareholders in cash of the "peaks", as appropriate, and of the amount derived
from the right of accrual of the treasury stock existing in the Company, will
also be made, regardless of whether or not the receipt of the amount of the
cash distribution has been chosen, in the same way.

 

Likewise, after the end of the Option Period, for those other shareholders who
have chosen to receive shares of the Subsidiary, the transfer and delivery in
their favour of the shares of the Subsidiary will be effected through the
subscription of any documents that may be required in accordance with the laws
applicable to the transfer of shares,  which is expected to take place on or
before 31 October 2024.

 

Shareholders entitled to participate in the Distribution who do not complete
and submit the form within the Option Period may, for an additional period of
approximately one month after the end of the Option Period, contact the
Company to complete the transfer and delivery of the shares of the Subsidiary
if they so wish. After this period, the Company will make available to the
shareholder the equivalent amount in money that would have corresponded to the
respective shareholder at the time.

 

Subsequently, the market will be notified of the effective amount of the
Distribution, including the final number of shares of the Subsidiary that are
distributed to the Company's shareholders, as well as the equivalent cash
amount that is paid, as part of the final result.

 

4. Tax treatment in Spain.

 

From a tax point of view, there will be no obligation for the Company to
withhold or pay on account in the distribution of share premium to
shareholders, regardless of whether it chooses to receive shares or cash and
the tax residence and nature of the shareholder. This is established by the
regulations governing Personal Income Tax, Corporation Tax and Non-Resident
Income Tax in Spain.

 

Shareholders who are tax residents in Spain for the purposes of Personal
Income Tax and Corporation Tax, which are applicable to them under the
regulations of the common territory in Spain, will generally reduce their
acquisition value and, once exhausted, the excess will be taxed as income from
movable capital or income depending on whether they are natural or legal
persons. For the purposes of Non-Resident Income Tax, it will also reduce the
acquisition value, taxing the excess at 19%, unless the exemption provided for
in article 14.1.h) of Royal Legislative Decree 5/2004, dated 5 March 2004,
approving the revised text of the Law on Non-Resident Income Tax is applicable
or any reduced rate provided for in an agreement signed by Spain to avoid
double taxation.

 

It should be noted that this analysis of the tax regime does not make explicit
all the possible tax consequences of the distribution of the share premium for
shareholders. The consequences that may occur in their countries of residence
for those shareholders who are not residents in Spain for tax purposes are not
detailed herein, nor is the possible application of exemptions or reduced
rates provided for in Spanish regulations and agreements to avoid double
taxation. Equally, any particularities that may be applicable to shareholders
resident in the Historical Territories of the Basque Country or the Autonomous
Community of Navarra are not analysed herein. Shareholders should consult
their tax advisors on the tax consequences specific to their own
circumstances.

 

5. Delegation of powers.

 

Each of the members of the Board of Directors of the Company is jointly and
severally empowered, with express powers of substitution in the Legal Advisor
of the Board and his Professional Firm, to the fullest extent that is
necessary in law, to execute this agreement, and that any of them may carry
out any legal acts or transactions that are necessary or convenient for the
fullest execution thereof.  In particular, and without limitation, the
following may be included:

 

-        To develop, extend, clarify, specify, interpret, complete and
correct this agreement, setting the terms and conditions thereof in all
matters not provided for in this agreement and, in particular and without
limitation, to establish, within the maximum amount agreed by the
Extraordinary General Meeting of shareholders, the amount of the share premium
reserve that will be the subject of the Distribution,  the number of shares
of the Subsidiary that will be part of it and that correspond to each
shareholder of the Company in accordance with the Distribution Ratio, and the
relevant dates of the Distribution and the details of its procedure.

-        Carry out on behalf of the Company any action, declaration or
management that is required before any public or private, Spanish or foreign
body or entity or registry in relation to the Distribution.

-        To execute on behalf of the Company as many public or private
documents as may be necessary or appropriate for the execution of the
Distribution and this agreement, as well as to correct any omissions, defects
or errors, in substance or form, contained in said documents.

-        Determine all other circumstances that may be necessary,
adopting and executing the necessary agreements, formalising the necessary
documents and completing all the appropriate procedures, proceeding to comply
with all the requirements necessary for the fullest execution of the
agreement.

Vote on the agreement: It was approved unanimously.

 

Consequently, this resolution was approved with the favourable vote of the
entire share capital present and represented, thereby complying with the
requirement established by article 18 of the Bylaws in force.

 

II.   Delegation of powers.

 The following proposed resolution is submitted to the shareholders:

 

"To specially and expressly empower the Managing Directors, on behalf of the
company, indistinctly and jointly and severally, to carry out and grant the
public and/or private acts or documents that are necessary for the full
formalization, execution and good completion of the agreements adopted, being
able to appear before a Notary Public and make public,  in whole or in part,
the corporate resolutions adopted until they are registered in the Commercial
Registry, may also grant as many public or private documents as may be
necessary for the correction, rectification, ratification or clarification of
the same, and to carry out any procedures and declarations necessary for their
registration in the relevant registers.

 

Without prejudice to the delegations of specific powers contained in the
preceding paragraphs, it is agreed to empower and authorise both Mr JOSE IVAN
GARCIA BRAULIO and Mr LORENZO SERRATOSA, in their respective capacity as
Secretary and Chairman of the Board of Directors, as broadly as the law
allows, to authorise and authorise without distinction, as broadly as is
applicable by law,  so that they can execute the above agreements, carrying
out all the actions and procedures for this purpose and granting the public or
private documents that are necessary or convenient, being also empowered for
this purpose to complete, clarify, correct or correct said documents, if they
suffer from any error, imprecision or omission, especially if this is cause to
suspend or prevent their registration or effectiveness in the Commercial
Registry or in any other public Registry; and, in particular, by way of
indication and not limitation, for:

 

-        Draft, subscribe and submit, as the case may be, to BME Growth
(or to any governing bodies of those markets, national or foreign, official or
not, in which the Company's shares may be admitted to trading) or any other
supervisory authorities that may be appropriate, in relation to the issuances
and listings to trading of the new shares issued under this agreement,  as
many supplements as may be necessary or convenient, assuming responsibility
for them, as well as the other documents and information that are required in
compliance with the provisions of the applicable regulations; and

-        To execute on behalf of the Company as many public or private
documents as may be necessary or convenient for the successful completion of
this agreement and, in general, to carry out as many procedures as may be
necessary, as well as to correct, clarify, interpret, specify or supplement
this resolution adopted by the General Shareholders' Meeting and, in
particular, any defects, omissions or errors,  of substance or form,
resulting from the verbal or written classification, prevent access to the
agreements and their consequences to the Commercial Registry, or any other"

Vote on the agreement: It was approved unanimously.

 

Consequently, this resolution was approved with the favourable vote of the
entire share capital present and represented, thereby complying with the
requirement established by Article 18 of the Bylaws in force.

 

III.   Drafting, reading and, where appropriate, approval of the Minutes of
the session, or delegation for signature.

As the Minutes of the General Shareholders' Meeting have been drawn up by the
Secretary, the following proposal for resolution was submitted to the
shareholders:

 

"Approval in its entirety of the Minutes of this Extraordinary General Meeting
of Shareholders"

Vote on the agreement: It was approved unanimously.

The option forms for shareholders are available on the Company's website at
https://substrate.ai/en/detalles-corporativos/

The Directors of the Company accept responsibility for the contents of the
announcement.

This announcement contains information which, prior to its disclosure, was
inside information as stipulated under Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310 (as amended). Upon the publication
of this announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain.

 

For further information, please contact:

 Substrate AI
 Lorenzo Serratosa                     accionistas@substrate.ai (mailto:info@substrate.ai)

 Chairman
 First Sentinel Corporate Finance

 Corporate Advisors
 Brian Stockbridge                     +44 (0) 7858 888 007

 

About Substrate AI: Substrate AI is an artificial intelligence company based
in Spain that creates, buys and scales companies around AI in diverse sectors
such as fintech, agritech, energy, human resources, or health. All of them
sell products and services built on the bio-inspired reinforced learning
technology developed and patented by Substrate AI.

 

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