TIDMSTAR
RNS Number : 4697H
Starcom PLC
25 March 2020
25 March 2020
Starcom Plc
("Starcom" or the "Company")
Loans from Directors and Employee
and Grant of Warrants
Starcom (AIM: STAR), which specialises in the development of
wireless, Internet-Of-Things (IoT) based solutions for the remote
tracking, monitoring and protection of a variety of assets,
announces that the Company has, on 24 March 2020 entered into loan
agreements (the "Loan Agreements") with certain directors and an
employee of the Company (the "Lenders"), pursuant to which they
have provided loans to the Company totalling approximately
GBP243,600 (the "Loans"). Under the terms of the Loan Agreements,
the Lenders have also been issued warrants (the "Warrants") to
subscribe for ordinary shares in the Company ("Ordinary
Shares").
Background to and reasons for the Loans
Although it is too early to predict what the full impact of the
global Covid-19 pandemic will be on the Company and its operations,
the Board is pleased to report that to date the Company has
remained under pressure from customers to fulfil existing orders
and continue supply of its products. Since the majority of the
Company's products are utilised in the movement of cargo rather
than people, activity has remained at a high level. There has
however been some delay in the fulfilment of certain orders by the
Company as a result of international restrictions being imposed on
the Company and its own suppliers. The Company has taken the
necessary measures to ensure that it can continue to operate
effectively whilst keeping its staff safe.
Given the current uncertainty caused as a result of the Covid-19
pandemic, the Board of the Company considers that it is prudent to
strengthen the Company's balance sheet at this time through the
entry into the Loans. Further, the provision of the Loans by
certain directors demonstrates the Board's confidence in the
business despite the global economic turbulence.
Details of the Loans
The Company has entered into the Loan Agreements with the
following parties:
Lender Value of Loan provided Number of Warrants
granted
Montrose Securities Limited,
a company controlled by
Michael Rosenberg
(Non-Executive Chairman) GBP100,000 1,600,000
----------------------------- -------------------
Avi Engel 429,330 Israeli Shekels
(Non-Executive Director) (approximately GBP100,000) 1,600,000
----------------------------- -------------------
Igor Vatenmacher 100,000 Israeli Shekels
(Chief Financial Officer) (approximately GBP21,800) 400,000
----------------------------- -------------------
100,000 Israeli Shekels
Starcom Employee (approximately GBP21,800) 400,000
----------------------------- -------------------
Under the terms of the Loan Agreements, interest is payable on
the principal Loan amount at a rate of 8 per cent. per annum
payable quarterly in arrears and the Loan principal is repayable on
30 September 2021. Each of the Loans are convertible into new
Ordinary Shares, at the sole discretion of the Lender, at a
conversion price of 1.25p per Ordinary Share (being a premium of
25% to the closing mid-market share price on 24 March 2020) at any
time up until the Loan repayment date. In addition, the Loans can
be repaid early at the election of the Company, although not before
30 September 2020, with an early redemption fee of 8% of the
principal Loan amount.
Of the Loan proceeds, NIS 165,453 (approximately GBP39,000) will
be used to satisfy a historic outstanding debt owed to Avi Engel in
respect of past fees. The remainder of the Loan proceeds will be
used to fund the growth in inventory as needed to meet anticipated
sales orders, as well as for the continued development of the
Company's sales and distribution infrastructure and for general
working capital purposes.
Under the Loan Agreements, Avi Hartman, CEO, is providing a
personal guarantee to the Lenders against 50% of the principal Loan
value.
The Warrants
Pursuant to the Loan Agreements, the Company has granted
4,000,000 Warrants to subscribe for Ordinary Shares to the Lenders,
as set out in the table above.
The Warrants are exercisable at a price of 1.5p pence per
Ordinary Share, being a premium of 50% to the closing mid-market
share price on 24 March 2020. The Warrants are exercisable from the
date of grant and expire on the second anniversary of the grant.
Following the grant of the Warrants, the Company has 53,293,947
options and warrants to subscribe for Ordinary Shares in issue,
representing 15.4% of the Company's current issued share
capital.
The FCA notifications, made in accordance with the requirements
of the EU Market Abuse Regulation, are appended below.
Related Party Transactions
The entering into the Loan Agreements with directors of the
Company being, Avi Engel and Igor Vatenmacher, as well as a company
controlled by Michael Rosenberg, and the associated grant of
Warrants, constitute related party transactions under rule 13 of
the AIM Rules for Companies. The director of the Company
independent of these transactions, being Martin Blair, considers,
having consulted with the Company's Nominated Adviser, that the
terms of the Loan Agreements and grant of Warrants are fair and
reasonable insofar as the Company's shareholders are concerned.
Enquiries:
Starcom Plc
Michael Rosenberg, Chairman 07785 727 595
Avi Hartmann, CEO +972 5447 5663
Allenby Capital Limited (Nominated Adviser and
Broker) 020 3328 5656
James Reeve / Jeremy Porter / Asha Chotai
Peterhouse Capital Limited (Joint Broker) 020 7469 0930
Lucy Williams / Charles Goodfellow / Eran Zucker
Leander PR (Financial PR) 07795 168 157
Christian Taylor-Wilkinson
1 Details of the person discharging managerial responsibilities
/ person closely associated
a) Name Michael Rosenberg (Chairman)
Avi Engel (Non-executive Director)
Igor Vatenmacher (Chief Financial Officer)
------------------------- -----------------------------------------------
2 Reason for the notification
--------------------------------------------------------------------------
a) Position/status See 1 a) above
------------------------- -----------------------------------------------
b) Initial notification Initial notification
/Amendment
------------------------- -----------------------------------------------
3 Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
--------------------------------------------------------------------------
a) Name Starcom plc
------------------------- -----------------------------------------------
b) LEI 213800XVU7WF3QMF4826
------------------------- -----------------------------------------------
4 Details of the transaction(s): section to be repeated for
(i) each type of instrument; (ii) each type of transaction;
(iii) each date; and (iv) each place where transactions have
been conducted
--------------------------------------------------------------------------
a) Description of Warrants to subscribe for Ordinary Shares
the financial of no par value
instrument, type
of instrument Identification code (ISIN) for Starcom
Identification plc ordinary shares: JE00B8WSDY21
code
------------------------- -----------------------------------------------
b) Nature of the Grant of warrants to subscribe for ordinary
transaction shares in the Company
------------------------- -----------------------------------------------
c) Price(s) and volume(s) Director/PDMR Price(s) Volume(s)
Exercisable
Michael Rosenberg at 1.5p 1,600,000
------------- ----------
Exercisable
Avi Engel at 1.5p 1,600,000
------------- ----------
Exercisable
Igor Vatenmacher at 1.5p 400,000
------------- ----------
------------------------- -----------------------------------------------
d) Aggregated information Price(s) Volume(s)
- Aggregated volume 1.5p 2,775,000
- Price ----------
------------------------- -----------------------------------------------
e) Date of the transaction 24 March 2020
------------------------- -----------------------------------------------
f) Place of the transaction Outside a trading venue
------------------------- -----------------------------------------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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