24SevenOffice Group AB - Update on the Convertible Loan from Lugar Road Capital

24SevenOffice has received several questions regarding the convertible loan in the company after the 4th quarter presentation and would like to share an update on the convertible loan. Please note that the terms of the loan remain unchanged from when it was established, this update is for information purposes only.

The convertible loan is from a strategic US investor, Lugard Road Capital and has a maturity date at 31st December 2027. The loan will carry an annual interest of 1.5 percent. From 1st January 2025 to 31st December 2025 the loan will carry an annual interest of 3.5 percent and from 1st January 2026 to 31st December 2027 the loan will carry an annual interest of 5.5 percent. The interest can be paid either in cash or accumulated to loan.

The sole financial covenant is that the Group at all times shall maintain a minimum of unrestricted cash (and cash equivalents) in an amount of at least 10 MSEK.

The conversion price is SEK 44.00 per share, which represents approximately 260 percent premium to the price for the Company's shares as quoted at closing price 12th March 2024 on Spotlight Stock Market. If Lugard Road Capital decides to convert the loan partly or fully, 24SevenOffice has the option to pay up to 50 percent of the value of the converted loan in cash opposed to converting to shares by paying an extra interest rate calculated based on the share price exceeding the conversion price of 44 SEK.

The loan has primarily been allocated to developing new technology, new modules, and expansion into new markets. The revenue from these new initiatives amounts to more than 45 MSEK in ARR building a solid foundation for 24SevenOffice´s profitable growth strategy.

With a maturity date of the convertible loan of approximately 4 years from now the Company intends to repay the loan based on the free cash flow from the profitable growth strategy as communicated in the Q4 report for 2023.