REG - T42 IOT Tracking Sol - $1.3 million raise through Convertible Loan

t42 IoT Tracking SolutionsAnnouncement

26/07/2023 12:30

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RNS Number : 2880H  T42 IOT Tracking Solutions PLC  26 July 2023

26 July 2023

 

t42 IoT Tracking Solutions plc

 

T42 raises $1.3M through a convertible loan from a strategic customer

t42 IoT Tracking Solutions plc (AIM: TRAC) ("t42" or the "Company") is pleased
to announce that it has raised $1.3m (before expenses) to support both
existing orders and the Company's new lease-based order strategy and to repay
certain existing loans. The funding is in the form of a secured convertible
loan ("Loan") provided to t42 Limited by Ewave Mobile Ltd.) ("Lender"), an
international group providing solutions across a range of sectors, including
supply chain management. Companies within Lender's group have been long-time
key customers of t42 in the supply chain market.

 

The Loan, which carries interest at 10% per annum, payable quarterly on the
principal drawn, will be drawn down as to $600,000 immediately, $300,000 in
three equal tranches during August 2023, and the balance of $300,000 by 30
September 2023.

 

The Company will apply approximately $0.55 million of the Loan to repay in
full the outstanding loan from CSS Alpha Global Pte Ltd ("CSS"), together with
interest accrued, which was announced on 15 December 2022 and carried a
substantially higher interest rate compared to the new Loan.

 

The remaining funds from the Loan are anticipated to assist the Company in
advancing several pending orders by supporting the upfront payment to
suppliers and the new financing leasing structure for other existing orders,
and to support taking advantage of the expected growth in business
opportunities during 2023.

 

The Loan, together with accrued interest at the time of conversion, may be
converted, at the discretion of the Lender, at any time prior to the Loan
repayment date of 20 January 2025, into such number of new t42 ordinary shares
as corresponds to 29.5% of the Company's issued ordinary share capital
immediately following such conversion. The Loan may be converted in part, on a
pro rata basis to the above terms.

 

Based on the Company's current issued share capital, being 54,026,822 ordinary
shares, and prevailing exchange rates, the conversion rate corresponds to
approximately 4.46p per new t42 ordinary share and full conversion would
result in the issue of 22,606,968 shares.

 

For so long as (i) the Loan is outstanding, or (ii) the Lender holds 15% or
more of the Company's issued ordinary shares, the Lender shall have the right
to appoint a director or observer to the t42 Board. The appointment of such
director shall be subject to completion of customary satisfactory regulatory
due diligence by the Company's nominated adviser.

 

Security is provided by way of parent guarantee and charges over the assets of
t42. The Loan agreement includes anti-dilution provisions to protect the
equity interest percentage of the Lender, so that in the event of the exercise
or conversion of existing warrants, options or other instruments convertible
into new t42 ordinary shares (subject to certain exceptions), the Lender will
be issued for no additional consideration such number of t42 shares such that,
together with the t42 shares  already held, the Lender's percentage
shareholding shall remain the same. Under these provisions, a maximum of
9,061,870 additional new shares would be issued to the Lender, assuming full
exercise or conversion of existing warrants, options and convertible
securities (save for a limited number of dilutive instruments excluded from
this calculation).

 

In the event the Loan is converted and the Lender's resultant shareholding
exceeds 20% of the Company's issued ordinary share capital, the Lender shall
enter into a relationship agreement with the Company and its Nominated Adviser
on customary terms.

 

Confirmation of Total Voting Rights

 

The Company notes that the 3 million Deposit Shares, as detailed in the
announcement of 15 December 2022, are now not being issued to CSS. Therefore,
as of the date hereof there are 54,026,822 ordinary shares in issue, each with
one voting right. The Company does not hold any ordinary shares in treasury.
This figure may be used by shareholders in the Company as the denominator for
the calculations by which they will determine if they are required to notify
their interest in, or a change to their interest in, the share capital of the
Company under the FCA's Disclosure Guidance and Transparency Rules.

 

 

 

Avi Hartmann, CEO of t42, commented: "We have full confidence in our new
lease-based business model, which we believe will help us grow and expand our
business even further. The funds raised will enable us to deliver new orders
to our customers more efficiently and enhance our service quality. We look
forward to increased commercial cooperation between the parties in line with
our common strategies."

 

Contacts:

 

 t42 IoT Tracking Solutions PLC

 Michael Rosenberg, Chairman                                      07785 727595

 Avi Hartmann, CEO                                                +972 5477 35663

 Strand Hanson Limited (Nominated Adviser and Financial Adviser)  020 7409 3494

 James Harris/ Richard Johnson/ Robert Collins

 Peterhouse Capital Limited                                       020 7469 0930

 Lucy Williams/Charles Goodfellow/Eran Zucker

 

Notes to Editors

 

t42 IoT Tracking Solutions plc (AIM: TRAC), formerly Starcom Systems plc,
provides real-time tracking, analysis, monitoring, and security IoT solutions
for the global container and freight market and covers 55 countries, over 100
distributors, and 50 logistics and support partners.

 

t42's multi-sensor IoT tracking devices use a wide range of detection
capabilities with cloud-based analytics and alerts, with real-time data
transmission, analysis, and actionable insights. Its devices are used by
ports, cargo owners, shipping companies, freight forwarders, insurance
companies, customs authorities, homeland security, and police for end-to-end
global container tracking and digital transformation of shipments.

 

For more information on the Company, please visit: www.t42.co.uk/
(http://www.t42.co.uk/) .

 

The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.

 

 

 

 

 

 

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