TIDMDFX
RNS Number : 0405K
Defenx plc
06 April 2018
NEITHER THIS ANNOUNCEMENT NOR ANY PART OF IT CONSTITUTES AN
OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY,
SUBSCRIBE OR ACQUIRE ANY NEW ORDINARY SHARES IN ANY JURISDICTION IN
WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE
INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR
PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, THE
REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH
PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL. PERSONS
INTO WHOSE POSSESSION THIS ANNOUNCEMENT COMES ARE REQUIRED BY THE
COMPANY TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH
RESTRICTIONS.
Defenx plc
Proposed Subscription and Open Offer to raise, in aggregate,
approximately GBP1.2 million
Defenx Plc (AIM: DFX), the cyber-security software group,
announces proposals to raise GBP1.2 million (gross) (approximately
EUR1.38 million) by way of the issue of, in aggregate, 14,962,899
New Ordinary Shares at a price of 8 pence per share for general
working capital purposes (the "Fundraising").
The Fundraising comprises a Subscription and an Open Offer. BV
Tech, the Company's strategic partner and substantial shareholder,
has conditionally on, inter alia, approval of the Company's
Shareholders at a General Meeting, subscribed for all 10,564,676
Subscription Shares at the Issue Price raising up to GBP0.85
million (gross) (approximately EUR0.97 million). In addition, the
Company's Open Offer of 4,398,223 Open Offer Shares at the Issue
Price, the completion of which is also conditional on, inter alia,
Shareholder approval, will raise GBP0.35 million (gross)
(approximately EUR0.41 million). The Open Offer is available to all
Qualifying Shareholders and BV Tech has conditionally agreed to
acquire any Open Offer Shares not subscribed for by Qualifying
Shareholders.
The Circular containing details of the proposed Fundraising,
including the Notice of General Meeting, Form of Proxy and
Application Form will be posted to Shareholders today. The General
Meeting is scheduled for 11.00 a.m. on 23 April 2018 at the offices
of Trowers & Hamlins LLP, 3 Bunhill Row, London EC1Y 8YZ.
The definitions set out in the Circular apply in this
announcement unless the context otherwise requires. The Circular
and this announcement have been posted on the Company's website
https://investors.defenx.com/.
For more information, please contact:
Defenx PLC 020 3769 0687
Alessandro Poerio - Chief Executive Officer
Philipp Prince - Chief Financial Officer
IFC Advisory (Financial PR and IR) 020 3934 6630
Tim Metcalfe / Graham Herring / Heather Armstrong
Strand Hanson Limited (Nominated and Financial Adviser) 020 7409 3494
Angela Hallett / Richard Tulloch / James Bellman
WH Ireland (Broker) 020 7220 1666
Adrian Hadden / Alex Bond
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014.
1. Introduction
Defenx has today announces proposals to raise approximately
GBP1.2 million (gross) (approximately EUR1.38 million) by way of
the issue of, in aggregate, 14,962,899 New Ordinary Shares at a
price of 8 pence per New Ordinary Share for general working capital
purposes.
The Fundraising comprises a Subscription and an Open Offer. BV
Tech, the Company's strategic partner and substantial shareholder,
has subscribed for all of the Subscription Shares at the Issue
Price raising up to GBP0.85 million (gross) (approximately EUR0.97
million). In addition, the Company's Open Offer of 4,398,223 Open
Offer Shares at the Issue Price will raise GBP0.35 million (gross)
(approximately EUR0.41 million). The Open Offer is available to all
Qualifying Shareholders and BV Tech has agreed to acquire any Open
Offer Shares not subscribed for by Qualifying Shareholders.
The Issue Price of 8 pence represents a discount of
approximately 15.8 per cent. to the closing middle market price of
9.5 pence per Ordinary Share on 5 April 2018, the latest
practicable date prior to the date of this announcement.
Although the Company has certain on-going Shareholder
authorities granted at the general meeting of the Company held on
23 August 2017, these are not sufficient to implement the
Fundraising and issue of the New Ordinary Shares. Accordingly, the
Company is seeking further Shareholder approval to grant the
Directors authority to allot equity securities and to dis-apply
statutory pre-emption rights in respect of an allotment of equity
securities for cash in connection with the Fundraising, as well as
renew the general on-going Shareholder authorities.
BV Tech is currently interested in 3,636,638 Existing Ordinary
Shares, representing approximately 27.6 per cent. of the Existing
Ordinary Shares. Accordingly, on completion of the Fundraising,
depending on the participation in the Open Offer by Qualifying
Shareholders, BV Tech's interest in the Company would increase to,
in aggregate, between approximately 54.7 per cent. and 66.1 per
cent. of the Enlarged Share Capital.
Accordingly, the Board is also seeking the approval of the
Independent Shareholders for the Rule 9 Waiver (which the Panel has
agreed to grant, subject to the passing of the Whitewash Resolution
by the Independent Shareholders on a poll at the General Meeting)
of any requirement of BV Tech to make a mandatory general offer
under Rule 9 of the City Code as more fully set out in paragraph 6
below.
The Proposals are conditional upon, inter alia, Shareholder
approval of the Fundraising Resolutions and the Whitewash
Resolution, which will be sought at the forthcoming General Meeting
to be held at the offices of Trowers & Hamlins LLP, 3 Bunhill
Row, London EC1Y 8YZ at 11.00 a.m. on 23 April 2018.
The recommendations of the Directors and Independent Directors
in relation to the relevant Resolutions, are set out in paragraph
12 below.
2. Current activities, strategic partnership with BV Tech and trading and prospects
Business activities
Defenx is a cyber security company that offers a range of
products for the mobile, PC and network security markets. Defenx
has built a product portfolio of security and protection solutions
to which cloud-based backup was added with the acquisition of
Memopal S.r.l. (since renamed Defenx Italia S.r.l.) in 2016.
The Defenx Group's products fit into three complementary
segments:
-- security - anti-malware software
-- backup - cloud-based backup and synchronisation
-- protection - applications to monitor, manage and secure online activities
The Board is now looking to implement a strategic plan, Defenx
2020, which aims to narrow the focus of the Defenx Group's short to
medium- term development and sales efforts on cloud backup for the
corporate market. This strategy reflects the changing competitive
landscape, growing demand for cloud-based services, feedback from
existing and potential customers and the support of BV Tech, the
Defenx Group's strategic partner.
Strategic partnership with BV Tech
In 2017, the Company entered into a long-term strategic
partnership with BV Tech, a leading independent Italian corporate
IT and cyber security solutions provider, comprising, in part, a
software acquisition by Defenx and cash subscription by BV Tech,
with the intention to enhance Defenx's product portfolio and enable
the Company to penetrate the European corporate market to generate
high-quality, recurring revenues in the medium term.
On 11 April 2017, BV Tech subscribed GBP982,299 for a 9.1%
shareholding in the Company. At the same time, Defenx acquired a
bespoke version of BV Tech's encrypted voice and messaging software
for EUR2.65 million (GBP2.26 million) that was settled through the
issue of 1,982,222 ordinary shares, which together with 300,000
ordinary shares acquired from holders of deferred shares upon their
conversion, meant BV Tech's shareholding in the Company was
increased to 26.7%.
On 22 June 2017, Defenx, via its subsidiary Defenx Italia
S.r.l., entered into a software distribution contract with BV Tech
(the "Software Distribution Contract"), which was in line with the
terms offered to other major Defenx channel partners. Under the
Software Distribution Contract, which was for an initial term of
three years subject to 180 days' notice by either party, the
Company offers its product range for sale by BV Tech on a global,
non-exclusive basis.
On 7 August 2017, BV Tech invested a further GBP250,000 in the
Company by way of a subscription to increase its then shareholding
to 28.6% as part of a wider equity placing and the issue of the
Secured Convertible Bonds.
On 26 September 2017, Defenx entered into a master services
agreement with BV Tech (the "Master Services Agreement"), a
framework agreement to govern the process by which Defenx may
assign work to BV Tech as a related party in accordance with the
AIM Rules. The Master Services Agreement acknowledges that BV Tech
will act in the best interests of Defenx and on an arm's length
basis in relation to the provision of any software development
services to the Company and that, notwithstanding that fact, BV
Tech is a preferred supplier of such services to the Company given
its expertise and relationship with Defenx.
On 10 January 2018, Defenx entered into a contract with BV Tech,
in accordance with the Master Services Agreement, for support
services relating to technological and systems insourcing including
the provision of an interim-CTO for the Defenx Group.
Current trading and prospects
In its interim results for the six months ended 30 June 2017,
released on 27 September 2017, the Company announced revenues of
EUR3.13 million and an operating loss (before transaction costs) of
EUR1.31 million.
On 28 February 2018, the Company announced that revenues would
be materially below those in the prior year ended 31 December 2016
and, accordingly, that the Defenx Group would report a significant
loss, including one-off impairment charges, for the full year ended
31 December 2017.
The revenue shortfall initially arose from delays in the
delivery of product updates to address performance issues in the
Defenx Group's security products, back-end integration with certain
customers' systems and other commitments made by the sales team.
This resulted in the cancellation of confirmed orders, the return
of some invoiced sales from the first half of 2017, and customer
claims for further returns and compensation. The Company has
received some claims in relation to these issues, but does not yet
have full clarity on the likely quantum of claims or of how likely
these are to succeed against the Company.
In addition, PC Security Suite sales were reduced by one-off
incentives ahead of the launch of its in-house product. The PC
Security Suite Windows client and network versions, which were due
to be launched together in early 2018, have been delayed due to
limited resources.
Due to the uncertainty relating to security segment sales
returns and compensation, the Defenx Group is not yet able to
report its revenues for the year ended 31 December 2017; however,
the Company is committed to reporting its results for the full year
ended 31 December 2017 in accordance with the AIM Rules by 30 June
2018.
Whilst management is actively seeking to resolve customer
claims, balancing short term cash collections with longer term
customer retention and sales opportunities, the collection of trade
debtors remains difficult with limited collections since
mid-November 2017. All options to collect amounts due to the Defenx
Group including, where appropriate, legal proceedings are being
pursued.
At the same time, progress in addressing the performance issues
has been slow due to the constrained resources of the Defenx Group
and because it has not been possible to agree continued development
and support from the Defenx Group's existing external developer in
Romania on acceptable terms. Support work is therefore being
undertaken by the Defenx Group's internal development team with
support from BV Tech, although this is proceeding more slowly than
originally expected due to significant staff losses. Recruitment
plans are in place and budgeted to rebuild the team once the
Company's financial position is secure.
In addition, an external review is underway to understand the
performance and back-end integration issues and determine how best
to deliver value from the Defenx Group's investment in security
products.
A number of staff, notably in the Group's support and
development team based in Rome, have tendered their resignations
since the year end. This has limited the Group's ability to manage
certain of its operations. Recruitment plans are in place and
budgeted to rebuild the team once the Company's financial position
is secure. In the interim, existing staff are providing cover for
vacant roles with the support of staff from BV Tech.
The Company announced on 28 February 2018 that it had EUR760,000
of undrawn loan facilities available. Following the withdrawal of
the supply chain facility, as at 5 April 2018 (being the latest
practicable date prior to the date of this announcement) undrawn
facilities stood at EUR270,000, consisting of EUR250,000 invoice
discounting facilities and an overdraft of EUR20,000.
3. Background to and reasons for the Fundraising
The Defenx Group now needs to rebuild its operations and
development teams following the departure of the majority of its
Rome based team. This has resulted in a knock-on delay in the
broadening of the Defenx Group's product portfolio, notably to
address the corporate sector. Accordingly, the conversion of new
corporate opportunities into firm orders is taking longer and
requiring more investment than was initially anticipated. These
factors combined have resulted in the Defenx Group having
insufficient funding to continue trading and start to implement its
revised strategy, Defenx 2020.
4. Use of proceeds
The net proceeds of the Fundraising are required:
-- in order for the Defenx Group to rebuild its team and
continue to operate its business in the short term;
-- to service the Defenx Group's outstanding debt obligations;
-- to fund the operations of the Defenx Group as it implements
the new strategy set out above; and
-- for general working capital requirements.
The funds raised will be used to progress the Defenx 2020
business plan. However, there can be no certainty that the net
proceeds of the Fundraising will be sufficient to meet the working
capital requirements of the Defenx Group in returning it to
profitable trading.
5. Information on the Fundraising
5.1 The Subscription
The Company has conditionally raised gross proceeds of GBP1.20
million (approximately EUR1.38 million) through the issue by the
Company of 10,564,676 Subscription Shares at the Issue Price to BV
Tech pursuant to the terms of the Subscription Letter. The Issue
Price of 8 pence represents a discount of approximately 15.8 per
cent. to the closing middle market price of 9.5 pence per Ordinary
Share on 5 April 2018, the latest practicable date prior to the
date of this announcement.
The Subscription is, inter alia, conditional upon the passing of
the Fundraising Resolutions and the Whitewash Resolution at the
General Meeting and Admission.
5.2 The Open Offer
In addition, in order to provide Shareholders with an
opportunity to participate in the Fundraising, the Company is
providing all Qualifying Shareholders with the opportunity to
subscribe, at the Issue Price, for an aggregate of 4,398,223 Open
Offer Shares, raising gross proceeds of GBP0.35 million
(approximately EUR0.41 million). BV Tech has agreed to subscribe
for its own Open Offer Entitlement and any additional Open Offer
Shares not subscribed for by other Shareholders. This both allows
Qualifying Shareholders to participate in the Open Offer on a
pre-emptive basis whilst providing the Company with the certainty
that the Open Offer will raise gross proceeds of GBP0.35
million.
Subject to fulfilment of the conditions set out below, and in
the Circular, the Open Offer provides Qualifying Shareholders with
the opportunity to apply to acquire Open Offer Shares at the Issue
Price pro rata to their holdings of Existing Ordinary Shares as at
the Record Date on the following basis:
1 Open Offer Shares for every 3 Existing Ordinary Shares
and in proportion for any other number of Existing Ordinary
Shares then held.
Entitlements to apply to acquire Open Offer Shares will be
rounded down to the nearest whole number and any fractional
entitlements to Open Offer Shares will be disregarded in
calculating an Open Offer Entitlement and will be aggregated and
made available to Qualifying Shareholders pursuant to the Excess
Application Facility.
The Open Offer is conditional upon, inter alia, the passing of
the Fundraising Resolutions and the Whitewash Resolution and
Admission. If the Conditions are not satisfied, the Open Offer will
not proceed and any Open Offer Entitlements admitted to CREST will
thereafter be disabled and application monies under the Open Offer
will be refunded to the applicants, at the applicant's risk either
as a cheque by first class post to the address set out on the
Application Form or returned direct to the account of the bank or
building society on which the relevant cheque or banker's draft was
drawn in the case of Qualifying Non-CREST Shareholders and by way
of a CREST payment in the case of Qualifying CREST Shareholders,
without interest, as soon as practicable thereafter.
Excess Applications
The Open Offer is structured to allow Qualifying Shareholders to
subscribe for Open Offer Shares at the Issue Price pro rata to
their holdings of Existing Ordinary Shares. Qualifying Shareholders
may also make applications in excess of their pro rata initial
entitlement up to an amount equal to 10 times the total number of
Existing Ordinary Shares held in such Qualifying Shareholder's name
as at the Record Date. If however Qualifying CREST Shareholders
wish to apply for more than 10 times the total number of Existing
Ordinary Shares held in such Qualifying Shareholder's name as at
the Record Date, the Qualifying CREST Shareholder should contact
Equiniti who will arrange for the additional excess Open Offer
Shares to be credited to the relevant CREST account of the
Qualifying CREST Shareholder. Any such applications will be granted
at the absolute discretion of the Company. If applications under
the Excess Application Facility are received for more than the
total number of Open Offer Shares available following take-up of
Open Offer Entitlements, such applications will be scaled according
to the Independent Directors' discretion to the number of excess
Open Offer Shares applied for by Qualifying Shareholders under the
Excess Application Facility. As noted above, BV Tech has undertaken
to apply for all of the Open Offer Shares available under the
Excess Application Facility, together with the Open Offer Shares
which it has undertaken to take up in respect of its own pro-rata
entitlements under the Open Offer. Applications under the Excess
Application Facility may be allocated in such manner as the
Independent Directors may determine, in their absolute discretion,
and no assurance can be given that any applications under the
Excess Application Facility by Qualifying Shareholders will be met
in full or in part or at all.
Qualifying Shareholders should note that the Open Offer is not a
rights issue. Qualifying Non-CREST Shareholders should be aware
that the Application Form is not a negotiable document and cannot
be traded. Qualifying Shareholders should also be aware that in the
Open Offer, unlike in a rights issue, any Open Offer Shares not
applied for will not be sold in the market nor will they be placed
for the benefit of Qualifying Shareholders who do not apply under
the Open Offer.
Overseas Shareholders
Certain Overseas Shareholders may not be permitted to subscribe
for Open Offer Shares pursuant to the Open Offer and should refer
to the Circular for details.
CREST instructions
Application has been made for the Open Offer Entitlements and
Excess Open Offer Entitlements for Qualifying CREST Shareholders to
be admitted to CREST. It is expected that the Open Offer
Entitlements will be admitted to CREST on 9 April 2018. The Excess
Open Offer Entitlements will also be enabled for settlement in
CREST on 9 April 2018. Applications through the CREST system will
only be made by the Qualifying Shareholder originally entitled or
by a person entitled by virtue of a bona fide market claim.
Admission, settlement and dealings
Application will be made to the London Stock Exchange for the
Open Offer Shares, together with the Subscription Shares, to be
admitted to trading on AIM. It is expected that Admission will
become effective and that dealings in respect of the New Ordinary
Shares will commence at 8.00 a.m. on 24 April 2018. Further
information in respect of settlement and dealings in the Open Offer
Shares will be set out in the Circular.
Upon Admission:
-- the Subscription Shares will represent approximately 37.52
per cent. of the Enlarged Share Capital; and
-- the Open Offer Shares will represent approximately 15.62 per
cent. of the Enlarged Share Capital.
The New Ordinary Shares will represent, in aggregate,
approximately 113.4 per cent. of the Company's Existing Ordinary
Shares and approximately 53.14 per cent. of the Enlarged Share
Capital.
The New Ordinary Shares will, upon Admission, rank pari passu
with the Existing Ordinary Shares, including the right to receive
dividends and other distributions declared following Admission. The
New Ordinary Shares are not being made available to the public and
are not being offered or sold in any jurisdiction where it would be
unlawful to do so.
5.3 Secured Convertible Bonds
The Company has issued the Secured Convertible Bonds, the terms
of which include provision for the adjustment of the conversion
price at which the Secured Convertible Bonds may be converted into
Ordinary Shares. Upon the issue of the New Ordinary Shares, the
original conversion price of GBP2.00 would be adjusted to GBP1.81
and the number of Bond Conversion Shares from the current number of
625,000 to 691,371.
5.4 Removal of EIS relief
If completed on the terms set out in the Circular, the
Fundraising will result in BV Tech's shareholding in the Company
being in excess of 50 per cent. This will mean that the Company
will be controlled by BV Tech and cease to be a qualifying company
for the purposes of the enterprise investment scheme (EIS) and the
venture capital trusts (VCT) regime. Accordingly, existing
Shareholders who have invested within three years of the date
whereby it is considered by HMRC that BV Tech has entered into
arrangements to exercise control will lose the EIS or VCT reliefs
in respect of their Existing Ordinary Shares. This will include a
claw back of any reliefs already claimed. Investors who have held
their shares for more than three years from that date should not
have their EIS or VCT reliefs affected.
The Independent Directors appreciate that the withdrawal of EIS
and VCT will have significant tax consequences for affected
Shareholders. However, the Independent Directors believe that given
the Defenx Group's current circumstances, the interests of the
Independent Shareholders as a whole are not best served by acting
in a way that preserves the Company's EIS and VCT qualifying
status, and that the Company's current financial position requires
the Fundraising to complete as a priority.
5.5 City Code on Takeovers and Mergers
The Company is subject to the City Code and the requirements of
Rule 9, which requires that any person who acquires, whether by a
series of transactions over a period of time or not, an Interest in
Securities (as defined in the City Code) which, taken together with
shares in which persons acting in concert with him are interested,
carry 30 per cent. or more of the voting rights of a company which
is subject to the City Code, will normally be required to make a
general offer to all of the remaining shareholders to acquire their
shares.
Similarly, when any person, together with any persons acting in
concert with him, is interested in shares which, in aggregate,
carry not less than 30 per cent. of the voting rights of such a
company but not more than 50 per cent. of such voting rights, a
general offer will normally be required if any further interests in
shares are acquired by any such person, or any person acting in
concert with him.
An offer under Rule 9 of the City Code must be made in cash and
at the highest price paid by the person required to make the offer,
or any person acting in concert with him, for any interest in
shares in the company during the 12 months prior to the
announcement of the offer.
Rule 9 of the City Code further provides, inter alia, that where
any person who, together with persons acting in concert with him,
holds over 50 per cent. of the voting rights of a company and
acquires an interest in shares which carry additional voting
rights, then they will not normally be required to make a general
offer to the other shareholders to acquire their shares. However,
the Panel may deem an obligation to make an offer to have arisen on
the acquisition by a single member of a concert party of an
interest in shares sufficient to increase his individual holding to
30 per cent. or more of a company's voting rights, or, if he
already holds more than 30 per cent. but less than 50 per cent, an
acquisition which increases his shareholding in that company.
Under the City Code, a concert party arises where persons acting
together pursuant to an agreement or understanding (whether formal
or informal) co-operate to obtain or consolidate control of, or to
frustrate the successful outcome of an offer for a company, subject
to the City Code. Control means an interest, or interests, in
shares carrying, in aggregate, 30 per cent. or more of the voting
rights of a company, irrespective of whether such interest or
interests give de facto control.
5.6 Participation by BV Tech in the Fundraising
The Company's largest Shareholder is BV Tech, which is
interested in 3,636,638 Existing Ordinary Shares, representing
approximately 27.6 per cent. of the Existing Ordinary Shares.
BV Tech has subscribed for 10,564,676 Subscription Shares and
has also undertaken to apply for all of its Open Offer
Entitlements. In addition, BV Tech will apply for all of the
remaining Open Offer Shares under the Excess Application Facility,
other than the Open Offer Shares which it has undertaken to take up
in respect of its pro-rata entitlements under the Open Offer.
Accordingly, BV Tech has undertaken to apply for, in aggregate,
4,398,223 Open Offer Shares.
On completion of the Fundraising, depending on the participation
in the Open Offer by Qualifying Shareholders, BV Tech's interest in
the Company would increase to, in aggregate, between a minimum of
approximately 54.7 per cent. and a maximum of approximately 66.1
per cent. of the Enlarged Share Capital.
Furthermore, on completion of the Fundraising, BV Tech's
shareholding in the Company would remain above 50 per cent. on a
fully diluted basis (i.e. following the issue of new Ordinary
Shares subsequent to the exercise of all outstanding options and
warrants and the conversion of the Secured Convertible Bonds).
As BV Tech will be interested in over 50 per cent. of the voting
rights in the Company, it will be free to increase its aggregate
holding of Ordinary Shares (and to acquire further interests in the
same) without any obligation to make a general offer for the
Company under the provisions of Rule 9 of the City Code.
5.7 Information on the BV Tech Group
Founded in 2005, BV Tech is a leading independent corporate IT
solutions provider in Italy, and the parent of a group of companies
operating in the management consulting and information &
communication technology sectors. The BV Tech Group operates across
multiple industry verticals including finance, telecoms, media,
healthcare, defence and homeland security and has gained
significant experience in design, implementation and transformation
projects of complex ICT infrastructures with particular focus on
information security management, fraud prevention and cyber
security.
In 2016, BV Tech generated a production value (valore della
produzione)(1) of approximately EUR32 million and it employed 193
employees on average during the course of the year, including
engineers and IT experts. In the same year, the BV Tech Group
generated a production value (valore della produzione) of
approximately EUR56 million. BV Tech expects to invest over EUR30
million in R&D over the next three to four years, including
through its collaboration with the Massachusetts Institute of
Technology (MIT). Significant customers of the BV Tech Group
include the Lombardy and Veneto regional governments, the Italian
Ministry of Justice, TIM (Telecom Italia Mobile), American Express,
Alcatel-Lucent, NATO, Bulgari, Eni and Saipem.
(1) Under the Italian Civil Code (Article 2425), valore della
produzione, includes: net sales revenues, change in the inventory
of work in progress, increases in assets due to own work
capitalised, and other revenues and income.
Additional information on the BV Tech Group is set out in the
Circular.
5.8 Related Party Transaction
The participation in the Fundraising by BV Tech, and the entry
into the Subscription Letter, will constitute a related party
transaction for the purposes of Rule 13 of the AIM Rules for
Companies, as Mr Boccardo is a Director of the Company, Mr
Francione was a Director of the Company within the last 12 months,
BV Tech is a substantial shareholder in the Company and the
aggregate subscription by BV Tech pursuant to the Fundraising for
up to 14,962,899 New Ordinary Shares will exceed 5 per cent. in
certain of the class tests (as that term is defined in the AIM
Rules for Companies).
Accordingly, the Independent Directors confirm that, having been
so advised by the Company's nominated adviser, Strand Hanson, they
consider the terms of the participation by BV Tech in the
Fundraising, and the entry into the Subscription Letter, to be fair
and reasonable insofar as Shareholders are concerned, and in the
best interests of Shareholders and of the Company as a whole.
6. Rule 9 Waiver and Whitewash Resolution
BV Tech's participation in the Fundraising will increase its
aggregate percentage shareholding of the Company's issued share
capital to over 30 per cent. of the Company's issued share capital
and as such mean BV Tech would be required to make a mandatory
offer for the remainder of the Company's issued share capital under
Rule 9 of the City Code.
Under Note 1 of the Notes on the Dispensations from Rule 9 of
the City Code, the Panel may waive the requirement for a general
offer to be made in accordance with Rule 9 of the City Code if,
inter alia, the shareholders of the company who are independent of
the person who would otherwise be required to make an offer, and
any person acting in concert with him, pass an ordinary resolution
on a poll at a general meeting.
Accordingly, the Company proposes that the Independent
Shareholders be asked to waive the obligation on BV Tech to make a
mandatory offer under Rule 9 of the City Code, which would
otherwise arise as a result of BV Tech's participation in the
Fundraising.
The Panel has agreed, subject to the passing of the Whitewash
Resolution by the Independent Shareholders on a poll at the General
Meeting, to waive the requirement under Rule 9 of the City Code for
BV Tech to make a mandatory offer for the Ordinary Shares not
already owned by it or persons connected with it as would otherwise
arise on BV Tech's participation in the Fundraising.
As a result of the Fundraising, BV Tech will be interested in
over 50 per cent. of the voting rights in the Company, and it will
therefore be free to increase its aggregate holding of Ordinary
Shares (and to acquire further interests in the same) without any
obligation to make a general offer for the Company under the
provisions of Rule 9 of the City Code.
7. Intentions of BV Tech
BV Tech believes that it is the ideal long-term strategic
partner for the Company and is well positioned to support the
Company's executive management in implementing the Company's
revised strategy, Defenx 2020 and to strengthen the Company's
technology offering. As such, BV Tech is prepared to support the
Company by participating in the Fundraising as described herein, in
order to ensure that the Company raises sufficient funds in order
to enable management to effectively address the current
circumstances and to implement Defenx 2020.
The Fundraising will allow the Company to focus on key areas of
its business, addressing the issues that have arisen with its
security products, and driving growth and development of the
services provided by the Company in connection to cloud backup for
the corporate market. BV Tech recognises the value in the Company's
products, and intends that these products shall remain the core
products following implementation of the Offer. BV Tech does not
intend to change the Company's research and development
functions.
BV Tech attaches great importance to the skills, experience and
industry knowledge of the employees of the Company, and values the
Company's employees as they will play an important role in the
future of the business.
In relation to the Board, on or shortly after completion of the
Fundraising, it is proposed that the following changes will be made
to the Board:
-- BV Tech will appoint a new director to the Board as its
second nominated director on the Board (in accordance with the
terms of the Relationship Agreement);
-- the Founder and Executive Director, Andrea Stecconi, will
resign from the Board of the Company, following the General
Meeting;
-- the Chief Financial Officer, Philipp Prince, will resign as
Chief Financial Officer with effect from the earlier of i) 30 June
2018; ii) publication of the Annual Financial Results; or iii)
appointment of a suitable new CFO to the Board. An external search
for a successor has now commenced and further announcements will
follow in due course; and
-- the independent non-executive Director, Leonard Seelig, will
resign from the Board, once an appropriate successor has been
appointed.
Other than these Board and executive director changes, BV Tech
does not intend to make any changes to the balance of the skills
and functions of the employees and management of the Company, or
the continued employment of its employees (including any material
change in conditions of employment).
BV Tech does not intend to redeploy any of the Company's fixed
assets or make any changes to the locations of the Company's
headquarters, places of business, or R&D facilities, or to the
Company's headquarters' functions.
BV Tech confirms that, following the implementation of the
Fundraising, the existing contractual and statutory employment
rights, including in relation to pensions, of all the Company's
employees, will be fully safeguarded and honoured.
As required by the City Code, BV Tech confirms and has confirmed
to the Company that except as described above, it is not proposing,
following the increase in its Shareholding as a result of the
Fundraising, to seek any change in the general nature or strategy
of the Company's business, including its research and development
functions, and has also confirmed that no party acting in concert
with it intends to take any action (whether acting in its capacity
as a Director or a Shareholder) to effect any such change or to
alter: the continued employment of its employees (including any
material change in conditions of employment); the balance of the
skills and functions of the employees; employer contributions into
the Company's pension schemes; the location of the Company's places
of business, including the location of its headquarters, nor any
changes to its headquarters functions; and the deployment of the
Company's fixed assets.
Save as described above, the Board intends to continue to
conduct the business of the Company in the same manner as it is
currently conducted and there are no plans to introduce any
material change to the business of the Company.
BV Tech has no intention to cause the Company to cease to
maintain any of the trading facilities in respect of the Ordinary
Shares.
In the event that the Fundraising and Rule 9 Waiver are approved
at the General Meeting, BV Tech will not be restricted from making
an offer for the Company.
8. Relationship Agreement
On 11 April 2017, the Company and BV Tech entered into the
Relationship Agreement, pursuant to which, inter alia:
-- BV Tech was granted the right to appoint two Directors to the
Board, and to continue to be entitled to have two Directors on the
Board for so long as it continues to hold at least 20 per cent. of
the issued share capital of the Company; and
-- on the basis that BV Tech held (at that time) approximately
24.8 per cent. of the Company's issued share capital, various
provisions were agreed between the Company and BV Tech in order to
regulate the relationship between the Company and BV Tech.
The Relationship Agreement provides for the Company to be able
to carry on its business independently of BV Tech and for
transactions and relationships between BV Tech and the Company to
be at arm's length and on normal commercial terms. To this end,
pursuant to the Relationship Agreement, for so long as BV Tech and
its associates continue to be interested in at least 20 per cent.
of the Company's issued share capital, inter alia:
-- the parties shall procure that all transactions and
relationships between any member of the Defenx Group on the one
hand and BV Tech and any of its associates on the other, are
conducted at arm's length and on a normal commercial basis;
-- the Board shall at all times be comprised of a majority of
Directors who have not been nominated by BV Tech, with the parties
procuring that an appropriate number of independent Directors are
on the Board at all times in order to ensure that this remains the
case; and
-- BV Tech and its associates shall, inter alia:
o not prevent the Company and the Defenx Group from due
compliance with all laws, rules and regulations applicable to it
and them;
o ensure the Company's nominated adviser is consulted as
appropriate in respect of the Company's conduct and activities;
and
o not, without the agreement of all of the Independent Directors
seek to procure or vote on any resolution to cancel the Company's
admission to trading on AIM, terminate or vary the terms of the
Relationship Agreement, or remove or replace Strand Hanson as the
Company's nominated adviser.
Under the Relationship Agreement, BV Tech also agreed to
customary lock-in restrictions whereby neither BV Tech nor its
associates are to sell or transfer any Ordinary Shares held by them
for:
-- 12 months following the date of the admission to trading of
the new Ordinary Shares issued pursuant to the Relationship
Agreement (which took place on 9 May 2017); and
-- a further 12 months subject to customary orderly market arrangements.
Shareholders should note that the lock-in will expire in May
2018 and BV Tech is not entering into any new lock-in restrictions
as part of the Fundraising.
9. General Meeting
A General Meeting of the Company, notice of which will be set
out at the end of the Circular, is to be held at the offices of
Trowers & Hamlins LLP, 3 Bunhill Row, London EC1Y 8YZ on 23
April 2018 at 11.00 a.m. at which the Resolutions will be proposed.
Please note that the summary and explanation set out below is not
the full text of the Resolutions and Shareholders should review the
full text of the Resolutions before returning their Forms of
Proxy.
The Resolutions can be summarised as follows:
-- Resolution 1, which will be proposed as an ordinary
resolution, seeks the approval of the Independent Shareholders to
waive the obligation on BV Tech which would otherwise arise under
Rule 9 of the City Code to make an offer for the Company as a
result of the participation of BV Tech in the Fundraising and the
consequent shareholding in the Company that will be held by BV
Tech.
-- Resolution 2, which will be proposed as an ordinary
resolution, and which is subject to and conditional upon the
passing of Resolution 1, is to authorise the Directors to allot
relevant securities up to an aggregate nominal value of
GBP269,332.18 in connection with the Fundraising.
-- Resolution 3, which will be proposed as an ordinary
resolution, is to authorise the Directors to allot equity
securities up to an aggregate nominal amount of GBP168,945.41
(being 33.3 per cent. of the Enlarged Share Capital).
-- Resolution 4, which will be proposed as a special resolution
and which is subject to and conditional upon the passing of
Resolution 1 and Resolution 2, disapplies statutory pre-emption
rights, provided that such authority shall be limited to the
allotment of equity securities in connection with the
Fundraising.
-- Resolution 5, which will be proposed as a special resolution
and which is subject to the passing of Resolution 3, disapplies
statutory pre-emption rights, provided that such authority shall be
limited to, inter alia, the allotment of equity securities up to an
aggregate nominal amount of GBP50,683.63 (being 10 per cent. of the
Enlarged Share Capital).
In the case of Resolutions 3 and 5 proposed to renew and refresh
the standing share authorities, is considered prudent to maintain
the flexibility that such authorities provide and therefore to
refresh the authorities that were approved at the Company's last
annual general meeting.
Only the Independent Shareholders will be entitled to vote on
Resolution 1 which will be conducted on a poll at the General
Meeting.
10. Irrevocable undertakings
The Company has received irrevocable undertakings to vote in
favour of the Resolutions to be proposed at the General Meeting as
follows:
Whitewash Resolution
A total of 1,954,341 Ordinary Shares equating to 14.81 per cent.
of the Existing Ordinary Shares currently in issue, which have been
received from the Directors.
BV Tech will not vote on the Whitewash Resolution.
Other Resolutions
A total of 5,590,979 Ordinary Shares equating to 42.37 per cent.
of the Existing Ordinary Shares currently in issue.
Details of these irrevocable undertakings are as follows:
-- BV Tech in respect of 3,636,638 Existing Ordinary Shares,
representing approximately 27.6 per cent. of the Existing Ordinary
Shares; and
-- the Directors in respect of 1,954,341 Existing Ordinary
Shares, representing approximately 14.81 per cent. of the Existing
Ordinary Shares.
11. Importance of vote
The Fundraising is required in order for the Defenx Group to be
able to continue to operate its business in the short term and in
order to service the Defenx Group's outstanding debt obligations.
Shareholders should note that, in the event the Fundraising
Resolutions and the Whitewash Resolution are not approved, the
Fundraising will not proceed, in which case, the Directors believe
that:
-- the Company and the Defenx Group will be unable to continue
to fund its ongoing business activities in accordance with its
business plan. The inability to carry on business as planned or
disruption to the ongoing business activities of the Defenx Group
would be likely to have a material adverse effect on the Defenx
Group's results of operations and financial condition;
-- the Company will be unable to repay the Secured Convertible
Bonds and other debt facilities in accordance with their terms, and
thus will become in default pursuant to their terms;
-- the Company would need immediately to seek alternative
sources of funds to be able to carry on its business operations and
service its debt obligations. The Directors are unable to provide
any assurance that alternative financing or re-financing could
immediately be secured or, that if it were secured, it would be on
terms as favourable to the Company as the Fundraising, or would not
result in a substantial dilution of Shareholders' interests;
-- the Company's obligations pursuant to the Secured Convertible
Bonds have been secured over the assets of the Company and the
Defenx Group. If the Company is in default pursuant to the terms of
the Secured Convertible Bonds and a demand for payment is made by
the Security Trustee that the Company is unable to meet, the Defenx
Group's assets would be at risk of being subject to enforcement
action. Any such risk could materially affect the ability of the
Company to trade and continue its business as planned, and result
in the Defenx Group's results of operations and financial condition
being materially and adversely affected.
The Directors are therefore of the view that the Defenx Group's
future viability is dependent upon the passing of the Fundraising
Resolutions and the Whitewash Resolution.
12. Recommendations
12.1 The Independent Directors, who have been so advised by the
Company's financial adviser, Strand Hanson, consider the terms of
the Proposals to be fair and reasonable and in the best interests
of the Independent Shareholders and of the Company as a whole.
Accordingly, the Independent Directors recommend that the
Independent Shareholders vote in favour of the Whitewash Resolution
(Resolution 1) at the General Meeting as they intend to do in
respect of their entire holdings which amount to interests in
1,954,341 Ordinary Shares, representing approximately 14.81 per
cent. of the Existing Ordinary Shares.
This advice was provided by Strand Hanson to only the
Independent Directors and, in providing such advice, Strand Hanson
has taken into account the Independent Directors' commercial
assessments.
12.2 The Directors consider that the Fundraising is in the best
interests of the Company and Shareholders as a whole. Accordingly,
the Directors recommend that the Shareholders vote in favour of the
Fundraising Resolutions at the General Meeting as they intend to do
in respect of their entire holdings which amount to interests in
5,590,979 Ordinary Shares, representing approximately 42.37 per
cent. of Existing Ordinary Shares.
Voting on the Whitewash Resolution will be by means of a poll at
the General Meeting of Independent Shareholders. BV Tech will not
vote on the Whitewash Resolution at the General Meeting.
APPIX I
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2018
Record Date for entitlements under 6.00 p.m.
the Open Offer on 3 April
Announcement of the Fundraising 7.00 a.m.
on 6 April
Existing Ordinary Shares marked
'ex-entitlement' by the London Stock 8.00 a.m.
Exchange on 6 April
Publication and posting of the Circular,
the Form of Proxy and, to Qualifying
Non-CREST Shareholders only, the
Application Form 6 April
Open Offer Entitlements and Excess
CREST Open Offer Entitlements credited
to CREST stock accounts of Qualifying
CREST Shareholders 9 April
Latest recommended time and date
for requesting withdrawal of Open
Offer Entitlements and Excess CREST 4.30 p.m.
Open Offer Entitlements from CREST on 16 April
Latest time and date for depositing
Open Offer Entitlements and Excess
CREST Open Offer Entitlements into 3.00 p.m.
CREST on 17 April
Latest time and date for splitting
Application Forms (to satisfy bona 3.00 p.m.
fide market claims only) on 18 April
Latest time and date for receipt
of Forms of Proxy for the General 11.00 a.m.
Meeting on 19 April
Latest time and date for receipt
of completed Application Forms and
payment in full under the Open Offer
or settlement of relevant CREST 11.00 a.m.
instructions (as appropriate) on 20 April
General Meeting 11.00 a.m.
on 23 April
Results of the General Meeting and
the Fundraising expected to be announced 23 April
Admission and dealings in the Subscription
Shares and the Open Offer Shares 8.00 a.m.
expected to commence on AIM on 24 April
Expected date for CREST accounts
to be credited with Subscription
Shares and Open Offer Shares in
uncertificated form 24 April
Expected date for despatch of share
certificates in respect of Subscription
Shares and Open Offer Shares to
be issued in certificated form by 1 May
Notes:
Each of the times and dates above are subject to change.
References to time in this announcement, the Circular, the
Application Form and the Form of Proxy are to London time unless
otherwise stated. If any of the above times and/or dates change,
the revised time(s) and/or date(s) will be notified to Shareholders
by announcement through a Regulatory Information Service.
APPIX II
DEFINITIONS AND GLOSSARY
The following definitions and technical terms apply throughout
this announcement, unless the context otherwise requires:
"Act" the Companies Act 2006 (as
amended);
"Admission" the admission of the New Ordinary
Shares to trading on AIM becoming
effective in accordance with
Rule 6 of the AIM Rules for
Companies, expected to be on
or around 24 April 2018;
"AIM" the AIM market of the London
Stock Exchange;
"AIM Rules" the AIM Rules for Companies
and the AIM Rules for Nominated
Advisers;
"AIM Rules for the AIM Rules for Companies
Companies" (including the guidance notes)
published by the London Stock
Exchange from time to time;
"AIM Rules for the AIM Rules for Nominated
Nominated Advisers" Advisers published by the London
Stock Exchange from time to
time;
"Application Form" the personalised application
form which accompanies the
Circular (where appropriate)
on which Qualifying Non-CREST
Shareholders (other than certain
Overseas Shareholders) may
apply for Open Offer Shares
under the Open Offer;
"Bond Conversion the Ordinary Shares to be issued
Shares" by the Company upon conversion
of Secured Convertible Bonds;
"Business Day" a day (other than a Saturday
or Sunday or public holiday)
on which commercial banks are
open for general business in
London;
"BV Tech" BV Tech S.p.A;
"BV Tech Group" the group of companies of which
BV Tech is the parent company;
"certificated form" not in an uncertificated form;
"Circular" the circular to be sent to
Shareholders dated 6 April
2018, setting out details of
the Subscription, the Open
Offer, the Rule 9 Waiver, and
containing the Notice of General
Meeting;
"City Code" the City Code on Takeovers
and Mergers;
"Company" or "Defenx" Defenx plc;
"Conditions" the conditions, which are set
out in full in the Circular,
which have to be satisfied
to enable the Fundraising to
be completed in accordance
with their terms and which
include, inter alia, the passing
of the Fundraising Resolutions
and the Whitewash Resolution;
"CREST" the electronic systems for
the holding and transfer of
shares in uncertificated form
operated by Euroclear UK &
Ireland Limited;
"CREST Manual" the rules governing the operation
of CREST consisting of the
CREST Reference Manual, the
CREST International Manual,
the CREST Central Counterpart
Service Manual, the CREST Rules,
the CREST Courier and Sorting
Services Operations Manual,
the Daily Timetable, the CREST
Application Procedures and
the CREST Glossary of Terms
(as updated in November 2001);
"CREST member" a person who has been admitted
to CREST as a system member
(as defined in the CREST Manual);
"CREST member account the identification code or
ID" number attached to a member
account in CREST;
"CREST participant" a person who is, in relation
to CREST, a system-participant
(as defined in the CREST Regulations);
"CREST participant shall have the meaning given
ID" in the CREST Manual;
"CREST payment" shall have the meaning given
in the CREST Manual;
"CREST Regulations" the Uncertificated Securities
Regulations 2001 (SI 2001 No.
3755), as amended from time
to time;
"CREST sponsor" a CREST participant admitted
to CREST as a CREST sponsor;
"CREST sponsored a CREST member admitted to
member" CREST as a sponsored member;
"Dealing Day" a day on which AIM is open
for business, other than a
day on which AIM is scheduled
to or does close prior to its
regular weekday closing time;
"Defenx Group" the group of companies of which
the Company and its subsidiary
undertakings are members;
"Directors" or the directors of the Company;
"the Board"
"Enlarged Share the Existing Ordinary Shares
Capital" as enlarged by the issue of
the New Ordinary Shares;
"Euroclear" Euroclear UK & Ireland Limited,
the operator of CREST;
"Excess Application the arrangement pursuant to
Facility" which Qualifying Shareholders
may apply for any number of
Open Offer Shares in excess
of their Open Offer Entitlement
provided that they have agreed
to take up their Open Offer
Entitlement in full;
"Excess CREST Open in respect of each Qualifying
Offer Entitlement" CREST Shareholder, the entitlement
(in addition to his/her Open
Offer Entitlement) to apply
for Open Offer Shares pursuant
to the Excess Application Facility,
which is conditional on him/her
taking up his/her Open Offer
Entitlement in full;
"Excess Open Offer in respect of each Qualifying
Entitlement" Shareholder, the entitlement
(in addition to his/her Open
Offer Entitlement) to apply
for Open Offer Shares pursuant
to the Excess Application Facility,
which is conditional on him/her
taking up his/her Open Offer
Entitlement in full;
"Existing Ordinary the 13,194,671 Ordinary Shares
Shares" in issue at the date of this
announcement;
"FCA" the Financial Conduct Authority
of the United Kingdom;
"Form of Proxy" the form of proxy for use in
relation to the General Meeting
which will accompany the Circular;
"FSMA" the UK Financial Services and
Markets Act 2000 (as amended
from time to time);
"Fundraising" together, the Subscription
and the Open Offer;
"Fundraising Resolutions" together, the resolutions to
grant the Directors authority
to allot the Subscription Shares
and the Open Offer Shares and
the related disapplication
of statutory pre-emption rights,
to be proposed at the General
Meeting and set out in the
Notice of General Meeting as
the resolutions numbered 2
and 4;
"General Meeting" the general meeting of the
Company to be held at the offices
of Trowers & Hamlins LLP, 3
Bunhill Row, London EC1Y 8YZ,
on 23 April 2018 at 11.00 a.m;
"Independent Directors" means Anthony Reeves, Alessandro
Poerio, Andrea Stecconi, Philipp
Prince and Leonard Seelig;
"Independent Shareholders" means the Shareholders, other
than BV Tech;
"ISIN" International Securities Identification
Number;
"Issue Price" 8 pence per New Ordinary Share;
"London Stock Exchange" London Stock Exchange plc;
"member account the identification code or
ID" number attached to any member
account in CREST;
"Money Laundering the Money Laundering, Terrorist
Regulations" Financing and Transfer of Funds
(Information on the Payer)
Regulations 2017 (SI 2017/692);
"New Ordinary Shares" together, the Subscription
Shares and the Open Offer Shares;
"Notice of General the notice convening the General
Meeting" Meeting which will be set out
at the end of the Circular;
"Open Offer" the conditional invitation
made by the Company to Qualifying
Shareholders to subscribe for
the Open Offer Shares at the
Issue Price on the terms and
subject to the conditions set
out in the Circular and, in
the case of Qualifying Non-CREST
Shareholders, in the Application
Form;
"Open Offer Entitlement" the pro rata entitlement of
a Qualifying Shareholder, pursuant
to the Open Offer, to apply
to subscribe for 1 Open Offer
Shares for every 3 Existing
Ordinary Shares registered
in their name as at the Record
Date;
"Open Offer Shares" 4,398,223 new Ordinary Shares
to be issued by the Company
pursuant to the Open Offer
subject, inter alia, to the
passing of the Fundraising
Resolutions and the Whitewash
Resolution;
"Ordinary Shares" ordinary shares of GBP0.018
each in the capital of the
Company;
"Overseas Shareholders" Shareholders with registered
addresses in, or who are citizens,
residents or nationals of,
jurisdictions outside the UK;
"Panel" the Panel on Takeovers and
Mergers;
"participant ID" the identification code or
membership number used in CREST
to identify a particular CREST
member or other CREST participant;
"Proposals" the Subscription, the Open
Offer and the Rule 9 Waiver;
"Prospectus Rules" the Prospectus Rules made in
accordance with EU Prospectus
Directive 2003/71/EC published
by the FCA pursuant to Part
VI of FSMA, as amended;
"Qualifying CREST Qualifying Shareholders holding
Shareholders" Existing Ordinary Shares which,
on the register of members
of the Company on the Record
Date, are in uncertificated
form;
"Qualifying Non-CREST Qualifying Shareholders holding
Shareholders" Existing Ordinary Shares which,
on the register of members
of the Company on the Record
Date, are in certificated form;
"Qualifying Shareholders" holders of Existing Ordinary
Shares on the register of members
of the Company at the close
of business on the Record Date
with the exclusion (subject
to exemptions) of persons with
a registered address or located
or resident in a Restricted
Jurisdiction;
"Receiving Agent" Equiniti Limited, Aspect House,
Spencer Road, Lancing, West
Sussex BN99 6DA;
"Record Date" the record date for the Open
Offer, being 6.00 p.m. on 3
April 2018;
"Registrars" or SLC Registrars, 42-50 Hersham
"SLC Registrars" Road, Walton-on-Thames, Surrey
KT12 1RZ;
"Relationship Agreement" the relationship agreement
between the Company and BV
Tech dated 11 April 2017;
"Resolutions" the resolutions proposed to
be passed at the General Meeting
as numbered 1 to 5 in the Notice
of General Meeting;
"Restricted Jurisdiction" any jurisdiction where local
laws or regulations may result
in a significant risk of civil,
regulatory or criminal exposure
for the Company if information
or documentation concerning
the Fundraising is sent or
made available to Shareholders
in that jurisdiction including,
without limitation, the United
States, Canada, Australia,
the Republic of South Africa
and Japan;
"Rule 9 Waiver" means the waiver by the Panel
of any obligation which would
otherwise be imposed on BV
Tech under Rule 9 of the City
Code, as a result of its participation
in the Fundraising;
"Secured Convertible the GBP1.25 million 10% secured
Bonds" convertible bonds of the Company
due 2020 issued pursuant to
a bond instrument dated 31
August 2017;
"Securities Act" the US Securities Act of 1933,
as amended from time to time
and the rules and regulations
promulgated thereunder;
"Security Trustee" the trustee to whom security
has been granted in order to
secure the Company's and its
subsidiaries' obligations under
the Secured Convertible Bonds,
being Jade State Wealth Limited;
"Shareholder" a holder of Ordinary Shares;
"Strand Hanson" Strand Hanson Limited, the
Company's nominated adviser
and financial adviser;
"Subscription" the conditional subscription
for the Subscription Shares
pursuant to the Subscription
Letter;
"Subscription Letter" the letter of subscription
entered into between the Company
and BV Tech in connection with
the Subscription;
"Subscription Shares" 10,564,676 new Ordinary Shares
to be conditionally subscribed
for by BV Tech for cash pursuant
to the Subscription Letter
and whose allotment and issue
is conditional, inter alia,
on the passing of the Fundraising
Resolutions and the Whitewash
Resolution at the General Meeting;
"UK" or "United the United Kingdom of Great
Kingdom" Britain and Northern Ireland;
"UK Listing Authority" the UK Listing Authority, being
or "UKLA" the FCA acting as competent
authority for the purposes
of Part VI of FSMA;
"uncertificated recorded on the relevant register
form" or other record of the share
or other security confirmed
as being held in uncertificated
form in CREST, and title to
which, by virtue of the CREST
Regulations, may be transferred
by way of CREST;
"United States" the United States of America,
its territories and possessions,
any State of the United States
and the District of Columbia;
"USE" unmatched stock event; and
"Whitewash Resolution" the ordinary resolution of
the Independent Shareholders
concerning the waiver of obligations
under Rule 9 of the City Code
to be proposed at the General
Meeting in connection with
BV Tech's participation in
the Fundraising and set out
in the Notice of General Meeting
as the resolution numbered
1.
In this announcement:
-- all references to "pounds", "GBP", "pence" or "p" are to the
lawful currency of the United Kingdom;
-- all references to "euros", "EUR", "cents" or "c" are to the
lawful currency of the European Union;
-- words importing the singular shall include the plural and
vice versa, and words importing the masculine gender shall include
the feminine or neutral gender;
-- all references to legislation are to English legislation
unless the contrary is indicated, and any reference to any
provision of any legislation includes any amendment, modification,
re-enactment or extension thereof; and
-- all times referred to are London time unless otherwise stated.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IOEDBGDSUXGBGIU
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