TIDMEQT
RNS Number : 5281X
EQTEC PLC
27 November 2017
27 November 2017
EQTEC plc
("EQTEC" or the "Company")
Final Results and Notice of AGM
EQTEC (AIM: EQT) the technology solution company for waste
gasification to energy projects, today announces its audited final
results for the year ended 30 June 2017.
Summary of Acquisition as announced today
-- The Enlarged Group would combine Eqtec Iberia's patented
gasification technology with a strong pipeline of projects and
solid relations with some of the market leaders in the energy
sector
-- The total consideration for the Acquisition is GBP14 million,
based on the suspension price, which will be satisfied by the issue
of 833,864,531 Ordinary Shares on Admission
-- The Company is proposing to raise GBP1.6 million (before
expenses) through the issue of 246,153,847 Ordinary Shares
("Placing Shares") at 0.65 pence which will be used to fund
additional working capital for the enlarged group as well as the
immediate pipeline of projects
Prospective pipeline of projects
-- The Directors believe that the Acquisition represents a
transformational step in refocusing the Group's strategy to the
Energy from Waste ("EfW") market in the UK and Europe
-- Eqtec Gasifier Technology ("EGT") enables project developers
to construct waste elimination plants converting the waste into
electrical and thermal energy. The high energy efficiency also
provides project developers with a competitive advantage allowing
them to quote more competitive gate fees for the waste supply
-- The combined group will have five near term UK projects with a total of 66.4MWe:
o Reliable Melton Hull and Reliable Seal Sands, in which EQTEC
will supply its patented gasification technology as well as
supervise the assembly and commissioning of the plant
o Catfoss Newcastle and Renewables (Catfoss) Hull in which EQTEC
will supply its patented gasification technology as well as
supervise the assembly and commissioning of the plant
o Zebec Energy located in the municipality of Usk, Wales in
which EQTEC will provide a turnkey solution including, design,
supplying gasification technology, and commissioning the plant
o The existing project pipeline which includes Newry Biomass
Limited will be converted where possible to use of Refuse Derived
Fuel as the feedstock source in line with Eqtec Iberia's pipeline
of UK based projects
Notice of AGM
EQTEC also announces that the Annual General Meeting of the
Company will be held at the Cork International Hotel, Cork, on 20
December, 2017 at 11.30 a.m.
The Notice of the AGM is being posted to shareholders today and
copies are available on the Company's website www.eqtecplc.com.
The Annual Report is available for viewing on the Company's
website www.eqtecplc.com.
For further information:
+353 (0)21
EQTEC plc 2409 056
Gerry Madden / Brendan Halpin
Northland Capital Partners Limited +44 (0)20 3861
- Nomad and Joint Broker 6625
Tom Price / Dugald J. Carlean
+44 (0) 20
SVS Securities Plc - Joint Broker 3700 0093
Tom Curran / Ben Tadd
+44 (0)20 3005
VSA Capital Limited - Joint Broker 5000
Andrew Monk / Andrew Raca
+44 (0)20 7618
Luther Pendragon - Financial PR 9100
Harry Chathli / Alexis Gore / Ana
Ribeiro
About EQTEC plc:
The Enlarged Group's business model will involve sourcing and
providing assistance in developing waste elimination projects to
which it will ultimately sell its gasification technology EGT and
O&M services. EGT enables project developers to construct waste
elimination plants converting the waste into electrical and thermal
energy. The high energy efficiency also provides project developers
with a competitive advantage allowing them to quote more
competitive gate fees for the waste supply.
EQTEC will source projects that have a local supply of waste in
need of conversion. It will build relationships and bring together
the developers, the waste owners, the building contractors and
funders and provide the technology and engineering services to the
projects. Furthermore, the Enlarged Group will provide O&M
services to the operating projects generating recurring revenues
over the life of the projects.
The Company is quoted on AIM and trades as EQT. Further
information on the Company can be found at www.eqtecplc.com.
Chairman and Chief Executive's Report
The Company presents the 2017 Annual Report, which is issued in
conjunction with an Admission Document which details the proposed
acquisition (the "Acquisition") of Eqtec Iberia SL ("Eqtec
Iberia"), a proposed placing of 246,153,847 new ordinary shares
(the "Placing Shares") at 0.65p per share (the "Placing Price"),
admission of the resulting Enlarged Share Capital to trading on AIM
(the "Admission") and a Notice of Extraordinary General Meeting.
The Admission Document will be posted to Shareholders at the same
time as this Annual Report.
The Group was established with a view to take advantage of the
growing opportunities in the clean energy sector and is now a
diversified renewable energy company with assets in the UK and
Ireland. The Group, to this point, focused on projects in the
Biomass, Electricity and Heat sector in the UK. The Group also has
assets in the wind sector in Ireland and has focused on the
delivery of projects from green field opportunities, through the
planning, grid and construction phases and into cash generating
assets.
We believe that the Acquisition represents a transformational
step in refocusing the Group's strategy to the EfW market in the UK
and Europe. Pursuant to the Acquisition the Enlarged Group would
combine Eqtec Iberia's patented gasification technology with a
strong pipeline of projects and solid relations with some of the
market leaders in the energy sector. Together with a combined
experienced management, resulting from the Acquisition, and solid
knowledge in the UK and Europe of the renewable energy marketplace,
it will place the Enlarged Group in an advantageous position to
become a leading technology provider in the EfW sector using its
progressive energy recovery technology.
The current project portfolio of the Company will be assessed
and dealt with in light of the revised strategy as set out in the
Admission Document. The Company's existing project pipeline which
includes Newry Biomass Limited will be converted where possible to
use of Refuse Derived Fuel as the feedstock source in line with
Eqtec Iberia's pipeline of UK based projects. The Company will not
pursue the Enfield Biomass Limited project under this revised
strategy. The Company will seek to exit its Biomass Heat only
projects in the UK and its Wind Electricity Generation projects in
Ireland as these are now seen as non-core. With this in mind the
Company is at the final stages of completing the disposal of the
Pluckanes single wind turbine in Ireland.
Strategy of the enlarged group
The Enlarged Group's business model will involve sourcing and
providing assistance in developing waste elimination projects to
which it will ultimately sell its technology and O&M services.
It will source projects that have a local supply of waste in need
of conversion. It will build relationships and bring together the
developers, the waste owners, the building contractors and funders
and provide the technology and engineering services to the
projects. Furthermore, the Enlarged Group will provide O&M
services to the operating projects generating recurring revenues
over the life of the projects.
EGT enables project developers to construct waste elimination
plants converting the waste into electrical and thermal energy. The
high energy efficiency also provides project developers with a
competitive advantage allowing them to quote more competitive gate
fees for the waste supply.
The Enlarged Group intends to position itself as the key party
providing:
-- assistance to the developer in appraising the site's suitability;
-- guidance in the selection of the fuel provider and in turn
the specification to which this fuel will be subject to;
-- highly efficient energy recovery technology;
-- EPC contractor to construct the plant;
-- financial model for the project;
-- support in obtaining funding to finance the construction and commissioning; and
-- O&M services to operate and maintain the plant once commissioned.
It is further anticipated that the Enlarged Group will generate
revenues by selling its technology and engineering and design
services to the project company or SPV and also selling its O&M
services for a five-year period after project commissioning.
Immediate pipeline of projects
A series of projects have been secured by way of an EPC contract
and/or a MOU including:
-- Reliable Energy Melton Hull and Reliable Energy Seal Sands
projects in which Eqtec Iberia will supply EGT, as well as
supervise the assembly and commissioning of the plant. EPC
Contracts were recently signed by Energy China on both of these
plants which will generate an anticipated c. 32 MWe and are
expected to have a total capital cost of c. EUR210 million
-- Catfoss Newcastle and Renewables (Catfoss) Hull projects,
with an anticipated total installed capacity of c. 28 MWe, and the
6.4 MWe Zebec Energy project located in the municipality of Usk,
Wales in which Eqtec Iberia will provide a turnkey solution
including, design, supplying gasification technology, and
commissioning the plant
Relationship with Energy China
The Enlarged Group will also benefit from the Collaboration
Framework Agreement signed by Eqtec Iberia and the major
shareholder of both EQTEC and Eqtec Iberia, EBIOSS, with Energy
China in May 2016 to develop the pipeline of EfW projects in the
UK, as set out above, other than the Zebec project in Usk. Energy
China, a Global Fortune 500 company, is a Chinese state-owned
enterprise with more than 140,000 employees, specialising in
engineering and construction. The company developed the 22.5 GW
Three Gorges Dam, the largest hydroelectric power plant in the
world, which became operational in 2012.
Outlook
Combining EQTEC and Eqtec Iberia will create a leading company
with proprietary advanced gasification technology which is used in
industrial size power plants to convert waste into synthetic gas to
generate electricity. The combined group has patented gasification
technology, a strong pipeline of projects and a management team
with extensive knowledge of energy markets, clean technologies and
project delivery. As a result, the Directors look to the future
with confidence.
EQTEC plc (Formerly REACT Energy plc)
Consolidated statement of profit or loss
for the financial year ended 30 June 2017
Notes 2017 2016
EUR EUR
Revenue 40,762 46,188
Cost of sales - -
Gross profit 40,762 46,188
Operating expenses
Administrative expenses (1,007,363) (597,022)
Impairment of property,
plant and equipment (180,640) (307,759)
Impairment of amounts due (151,722) -
under construction costs
Foreign currency gains/(losses) 42,096 (163,721)
Operating loss (1,256,867) (1,022,314)
Finance costs and income (559,978) (559,700)
Loss before taxation (1,816,845) (1,582,014)
Income tax - -
Loss for the year from continuing
operations (1,816,845) (1,582,014)
Profit for the year from
discontinued operations 24,575 41,970
(1,792,270) (1,540,044)
Loss attributable to:
Owners of the company (1,590,914) (1,041,035)
Non-controlling interest (201,356) (499,009)
(1,792,270) (1,540,044)
2017 2016
EUR per EUR per
share share
Basic loss per share:
From continuing operations 2 (0.014) (0.016)
From continuing and discontinued
operations 2 (0.013) (0.015)
Diluted loss per share:
From continuing operations 2 (0.014) (0.016)
From continuing and discontinued
operations 2 (0.013) (0.015)
EQTEC plc (Formerly REACT Energy plc)
Consolidated statement of other comprehensive income
for the financial year ended 30 June 2017
2017 2016
EUR EUR
Loss for the financial year (1,792,270) (1,540,044)
Other comprehensive loss
Items that may be reclassified
subsequently to profit or
loss
Exchange differences arising
on retranslation
of foreign operations (389,829) (603,466)
(389,829) (603,466)
Total comprehensive loss
for the financial year (2,182,099) (2,143,510)
Attributable to:
Owners of the company (1,815,266) (1,327,723)
Non-controlling interests (366,833) (815,787)
(2,182,099) (2,143,510)
EQTEC plc (Formerly REACT Energy plc)
Consolidated statement of financial position
At 30 June 2017
Notes 2017 2016
ASSETS EUR EUR
Non-current assets
Property, plant and equipment 9,464,911 9,524,726
Investments in associate and - -
joint ventures
Financial assets - -
Total non-current assets 9,464,911 9,524,726
Current assets
Amounts due under construction
contracts - 150,847
Trade and other receivables 293,482 137,108
Cash and cash equivalents 286,769 193,741
580,251 481,696
Assets included in disposal
group classified as held for
resale 1,344,503 1,426,519
Total current assets 1,924,754 1,908,215
Total assets 11,389,665 11,432,941
EQUITY AND LIABILITIES
Equity
Share capital 17,563,409 17,453,246
Share premium 28,678,913 21,863,190
Retained earnings/(deficit) (41,954,438) (40,139,172)
Equity/(capital deficiency)
attributable to the owners
of the company 4,287,884 (822,736)
Non-controlling interests 1,377,947 1,639,780
Total equity 5,665,831 817,044
Non-current liabilities
Borrowings 893,622 3,379,621
Total non-current liabilities 893,622 3,379,621
Current liabilities
Trade and other payables 1,143,755 5,366,550
Borrowings 2,606,203 694,880
3,749,958 6,061,430
Liabilities included in disposal
group classified as held for
resale 1,080,254 1,174,846
Total current liabilities 4,830,212 7,236,276
Total equity and liabilities 11,389,665 11,432,941
EQTEC plc (Formerly REACT Energy plc)
Consolidated statement of cash flows
for the financial year ended 30 June 2017
Notes 2017 2016
EUR EUR
Cash flows from operating activities
Loss for the financial year (1,816,845) (1,582,014)
Adjustments for:
Depreciation of property, plant
and equipment 24 138
Impairment of property, plant
and equipment 180,640 307,759
Impairment of amounts due from
customers under construction
contracts 151,722 (1,246)
Unrealised foreign exchange movements 20,706 (583,265)
Operating cash flows before working
capital changes (1,463,753) (1,858,628)
Decrease/(Increase) in:
Amounts due from customers under (875) -
construction contracts
Trade and other receivables (158,014) 134,099
Increase in:
Trade and other payables 206,464 160,354
Cash used in operating activities
- continuing operations (1,416,178) (1,564,175)
Finance costs 559,978 559,700
Net cash used in operating activities
- continuing operations (856,200) (1,004,475)
Net cash generated from operating
activities - discontinued operations 124,298 154,069
Cash used in operating activities (731,902) (850,406)
Cash flows from investing activities
Additions to property, plant
and equipment - (311,490)
Net cash generated from/(used
in) investing activities - continuing
operations - (311,490)
Net cash generated from investing
activities - discontinued operations 11 15
Net cash generated from/(used
in) investing activities 11 (311,475)
Cash flows from financing activities
Proceeds from borrowings 293,000 2,101,631
Loan issue costs (33,750) (484,476)
Proceeds from issue of ordinary 1,142,690 -
shares
Share issue costs (259,351) (128,081)
Interest paid (206,081) (156,286)
Net cash generated from financing
activities - continuing operations 936,508 1,332,788
Net cash used in financing activities
- discontinued operations (125,864) (58,599)
Net cash generated from financing
activities 810,644 1,274,189
Net increase in cash and cash
equivalents 78,753 112,308
Cash and cash equivalents at
the beginning of the financial
year 323,649 211,341
Cash and cash equivalents at
the end of the financial year 402,402 323,649
Cash and cash equivalents included
in disposal group (116,899) (130,454)
Cash and cash equivalents for
continuing operations 285,503 193,195
EQTEC plc (Formerly REACT Energy plc)
Extract from the notes to the consolidated financial
statements
for the financial year ended 30 June 2017
1. Basis of Preparation and Going Concern
The Group's consolidated financial statements have been prepared
in accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union ('EU') and effective at 30
June 2017 for all periods presented as issued by the International
Accounting Standards Board.
The consolidated financial statements are prepared under the
historical cost convention except for certain financial assets and
financial liabilities which are measured at fair value. The
principal accounting policies set out below have been applied
consistently by the parent company and by all of the Company's
subsidiaries to all periods presented in these consolidated
financial statements.
The financial statements of the parent company, EQTEC plc have
been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union ('EU') effective
at 30 June 2017 for all periods presented as issued by the
International Accounting Standards Board and Irish Statute
comprising the Companies Act, 2014.
The Group incurred a loss of EUR1,792,270 (2016: EUR1,540,044)
during the year, and had net current liabilities of EUR2,905,458
(2016: EUR5,328,061) and net assets of EUR5,665,831 (2016:
EUR817,044) at 30 June 2017.
Terms have been agreed for the proposed acquisition of the
entire issued share capital of Eqtec Iberia. The total
consideration for the Acquisition is GBP14 million, based on the
suspension price, which will be satisfied by the issuance of
833,864,531 New Ordinary Shares on Admission. In addition, in order
to fund the working capital needs of the Enlarged Group and the
continued development of its near term pipeline the Company is
undertaking a Placing to raise GBP1.6 million (before expenses) by
the issue of the Placing Shares. Given the scale of the
Acquisition, when compared to the existing Group, the transaction
is a reverse takeover under the AIM Rules and therefore requires
the Company to issue a new admission document and obtain
Shareholder approval for the Acquisition. Under the Irish Takeover
Rules (Rule 40) it is also a Reverse Takeover requiring that a
circular be posted to EQTEC shareholders. Accordingly, the
Acquisition is conditional, inter alia, on the approval by
Shareholders of the Resolutions (as required by the AIM Rules) to
be proposed at the Extraordinary General Meeting, which is being
convened for 11.30 a.m. on Wednesday 20(th) December 2017.
In conjunction with the Acquisition, the Company is proposing to
raise approximately GBP1.6 million, before expenses, through the
issue of the Placing Shares at the Placing Price. The Placing
Shares will represent approximately 18 per cent of the Enlarged
Share Capital on Admission. The Placing and the Acquisition are
conditional upon, inter alia, the Resolutions being passed at the
Extraordinary General Meeting and Admission of shares on AIM stock
exchange.
The Directors have given careful consideration to the
appropriateness of the going concern basis in the preparation of
the financial statements. The validity of the going concern basis
is dependent upon the approval by Shareholders of the Resolutions
being passed at the Extraordinary General Meeting approving the
acquisition of Eqtec Iberia and placing of new shares in order to
fund the working capital needs of the Enlarged Group and the
continued development of its near term pipeline The Directors are
highly confident that the shareholders will approve same and the
Group will have adequate resources to continue in operational
existence for the foreseeable future. For these reasons the
Directors continue to adopt the going concern basis of accounting
in preparing the financial statements. The financial statements do
not include any adjustments that would result if the Group was
unable to continue as a going concern.
EQTEC plc (Formerly REACT Energy plc)
Extract from the notes to the consolidated financial
statements
for the financial year ended 30 June 2017
1. Basis of Preparation and Going Concern - continued
The Group continues to invest capital in developing and
expanding its portfolio of clean energy projects. The nature of the
Group's development programme means that the timing of funds
generated from developments is difficult to predict. Management
have prepared financial forecasts to estimate the likely cash
requirements of the Group over the next 12 months. The forecasts
include certain assumptions with regard to the costs of ongoing
development projects, overheads and the timing and amount of any
funds generated from developments. The forecasts indicate that
during this period the Group will have funds to continue with its
activities and its planned development program.
Whilst the strategy is to build, own and operate plants, once a
site has been secured and planning and permitting obtained the
Group would be in a position, if it so chose, to monetise the value
of the project.
2. LOSS PER SHARE 2017 2016
Basic loss per share EUR per EUR per
share share
From continuing operations (0.014) (0.016)
From discontinued operations 0.001 0.001
Total basic loss per share (0.013) (0.015)
Diluted loss per share
From continuing operations (0.014) (0.016)
From discontinued operations 0.001 0.001
From continuing and discontinued
operations (0.013) (0.015)
The loss and weighted average number of ordinary shares used in
the calculation of the basic and diluted loss per share are as
follows:
2017 2016
EUR EUR
Loss for year attributable to
equity holders of the parent (1,590,914) (1,041,035)
Profit for the year from discontinued
operations used in the calculation
of basic earnings per share
from discontinued operations 24,575 41,970
Losses used in the calculation
of basic loss per share from
continuing operations (1,615,489) (1,083,005)
Weighted average number of ordinary
shares for
the purposes of basic loss per
share 118,378,906 69,684,580
Weighted average number of ordinary
shares for
the purposes of diluted loss
per share 118,378,906 69,684,580
Dilutive and anti-dilutive potential ordinary shares
The following potential ordinary shares were excluded in the
diluted earnings per share calculation as they were
anti-dilutive.
2017 2016
Share warrants in issue 39,088,960 35,245,833
Convertible loans in issue 10,000,000 9,166,667
Total anti-dilutive shares 49,088,960 44,412,500
EQTEC plc (Formerly REACT Energy plc)
Extract from the notes to the consolidated financial
statements
for the financial year ended 30 June 2017
3. EVENTS AFTER THE BALANCE SHEET DATE
Update on Newry Biomass Project
The Company announced on 6 July 2017 in relation to the Newry
Biomass project that it continues to work towards exporting
electricity to the grid by the revised deadline of 31 March 2018
("deadline") agreed with Ofgem. EQTEC remains in regular dialogue
with the local authority to confirm its application for a planning
amendment following the decision made to repower the project using
EBIOSS Energy SE's ("EBIOSS") gasification technology.
EQTEC continues to provide the local authority with information
in relation to the planning amendment and the Company hopes to
successfully conclude this process in the near term, so that it is
able to can commence the necessary Civil, Electrical and Mechanical
works in order to meet the deadline of 31 March 2018. However,
should there be a continued delay in receiving the amended planning
permission, it is likely that the Company will not be able to meet
the 31 March 2018 deadline for the repowering of the project. As a
result, the Company has started to consider contingency plans for
the project.
The contingency plans take into account the Company's revised
business strategy to focus on taking advantage of the significant
opportunities in the Energy from Waste sector using, among other
things, Refuse Derived Fuel ("RDF"). The contingency plans being
considered include the possibility of converting the plant from
using wood biomass to RDF. The Company would, in this event, seek
to monetise the value of equipment already on site through the sale
of this equipment to other projects the Company is seeking to
develop together with its major shareholder EBIOSS.
Extension of the Altair Loan Notes
On 17 July 2017, the Company also announced that it has reached
agreement with Altair Group Investment Limited ("Altair") to extend
the repayment of the GBP2.0 million, 7.5% Convertible Secured Loan
Notes ("CSLNs") issued by the Company, from 14 July 2017 to the
earlier of three business days following the completion of the
Proposed Transaction ("Completion") or 31 October 2017 ("the
Standstill Period").
During the period prior to the revised repayment date, the
Company and Altair will seek to agree further changes to the terms
of the CSLNs. In the event that Completion does not occur by 31
October 2017, all sums due under the CSLNs, including accrued
interest, will be payable immediately, unless Altair and the
Company have agreed new terms.
Convertible Loan 17 July 2017
On 17 July 2017, the Company also announced that it had entered
into an agreement with an existing shareholder (the "Lender"),
pursuant to which the Lender has agreed to make an interest free
unsecured loan of GBP300,000 to EQTEC (the "Convertible Loan").
Such loan will convert into new Ordinary Shares on the earlier of
the date of Completion and 31 October 2017 (the "Longstop
Date").
Where the Convertible Loan converts on the date of Completion,
the Conversion Shares shall be issued at a 10% discount to the
price at which any such shares are issued to investors pursuant to
the Placing (the "Placing Price"). Where the Convertible Loan
converts on the Longstop Date, the Conversion Shares shall be
issued at a 10% discount to the mid-market closing price of an
Ordinary Share on the trading day immediately prior to the Longstop
Date (the "Market Price").
EQTEC plc (Formerly REACT Energy plc)
Extract from the notes to the consolidated financial
statements
for the financial year ended 30 June 2017
3. EVENTS AFTER THE BALANCE SHEET DATE - continued
Convertible Loan 17 July 2017 - continued
On the date of conversion of the Convertible Loan the lender
will also be granted warrants to subscribe for such number of new
Ordinary Shares ("Warrants") as is equal to the number of
Conversion Shares issued. The Warrants will be exercisable for a
period of two years from the date of grant at a price of either
150% of the Placing Price or 150% of the Market Price, depending on
the applicable conversion event.
Convertible Loan 16 October 2017
On 16 October 2017, the Company announced that it has entered
into agreements pursuant to which an existing lender (the "Existing
Lender") and a new lender (the "New Lender") have agreed to make
interest free unsecured loans of an aggregate amount of GBP225,000
to EQTEC (the "Convertible Loans"). Such loans will convert into
new Ordinary Shares on the earlier of the date of Completion (as
defined above) and 31 December 2017 (the Longstop Date"). The
Company will also grant warrants over Ordinary Shares ("Warrants")
to the lenders at the time of conversion of the Convertible
Loans.
The Company and the Existing Lender, who is an existing
shareholder of the Company, are parties to a loan agreement dated
17 July 2017 (the "Original Loan Agreement") pursuant to which the
Existing Lender has lent the Company GBP300,000. The Company and
the Existing Lender have agreed to terminate the Original Loan
Agreement and have entered into a new agreement pursuant to which
the parties have agreed the original GBP300,000 is treated as
having been advanced pursuant to the terms of that agreement and
the Existing Lender has agreed to make an additional GBP200,000
loan to the Company on 19 October 2017. The Company has also
entered into an agreement with the New Lender, who is not an
existing Shareholder of the Company, pursuant to which the New
Lender has agreed to make a GBP25,000 loan to the Company on 19
October 2017.
The Convertible Loans are unsecured and non-interest bearing.
The Convertible Loans will convert into Conversion Shares on the
earlier of the date of Completion and 31 December 2017 (the
"Longstop Date"). The Convertible Loans will automatically convert
into the Conversion Shares at 0.065 pence per share.
On the date of conversion of the Convertible Loans the lenders
will also be granted Warrants for such number of new ordinary
shares as is equal to the number of Conversion Shares issued. The
Warrants will be exercisable for a period of two years from the
date of grant. The exercise price of the Warrants will be 2.2 pence
per share if the conversion event is Completion or 1.5 pence per
share if the Convertible Loans convert on the Longstop Date.
Extension of the Altair Loan Notes
On 31 October 2017, Altair agreed with the Company the
following:
(i) to extend the Standstill Period until 31 December 2017 and,
accordingly, it agrees to forbear from exercising its rights and
remedies under the CSLNs until the expiry of the Standstill
Period;
(ii) to extend the date for payment of the CSLNs to the expiry of the Standstill Period; and
(iii) that conditional on Admission becoming effective on or
before the expiry of the Standstill Period, Altair agrees to
further extend the date for payment of the CSLNs together with
accrued interest thereon until 14 July 2020 ("Extension Date")
subject to the following terms:
(A) that the interest rate set out in the CSLNs shall be
increased from 7.5% to the rate of 15% per annum for the period
between (but excluding) 31 October 2017 and the Extension Date on
the outstanding principal amount of the Notes;
(B) that in the event that the Company repays the entire amount
due under the CSLNs in full prior to the Extension Date the
interest set above shall be reduced as follows:
1. if the CSLNs are repaid in full between 1 November 2017 and
30 April 2018 the interest rate shall be 9% per annum; and
2. if the CSLNs are repaid in full between 1 May 2018 and 31
October 2019 the interest rate shall be 12% per annum.
In consideration of Altair's agreement to the extension of the
payment of the Notes, the Company agrees that, conditional on
Admission:
(i) the Company shall pay GBP300,000 to Altair within five
business days following Admission in satisfaction of accrued
interest on the Notes;
(ii) the Company will amend the Instrument to provide that up to
GBP1 million of outstanding principal amount of the Notes may be
converted at the election of Altair into new ordinary shares in the
Company ("Ordinary Shares") at a 10% discount to the price at which
such shares are issued to investors pursuant to the fundraising
undertaken in connection with Admission ("Placing Price");
(iii) the Company will grant Altair with warrants over Ordinary
Shares at an exercise price of 150% of the Placing Price ("Exercise
Price"), exercisable for five years from the date of grant. The
number of Ordinary Shares subject to the warrant will be such
number which, when multiplied by the Exercise Price, equals GBP1
million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BFBLTMBJTBTR
(END) Dow Jones Newswires
November 27, 2017 02:00 ET (07:00 GMT)
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