Liquidity injection and subsequent share issue
Company announcement no 110
This announcement contains internal knowledge, as the company has been provided with an additional loan of DKK 10 million. DKK, and the Company has renegotiated existing loans and obtained better terms for the Company.
The agreements entered were necessary to operate the Company and according to plans now provide sufficient funding for operations through 2025.
As informed in Company announcement 104 of 18 July 2024, the Board has worked to secure the necessary funding to support the continuation of the business and its growth plan. This is because the Company was not able to meet the relevant milestones for the release of Milestone 2 funding as per the funding support that was raised in Q4 2023 as announced in Company Announcement no. 81 of 29 November 2023.
The need for liquidity for the day-to-day operation of the Company since the announcement in July 2024 has been supported by monthly interim funding from a subsection of the funders (the Funders) that supported the Company in Q4 2023 with a share issue and loans under milestone commitments. Due to the severity of the situation, and time constraints, and to ensure necessary commercial actions, those interim fundings were needed until a coherent solution with creditors and Funders was reached.
After dialogues with the largest creditor to alleviate the liquidity burden on loan repayment as well as dialogues with the Funders, the Board has now secured necessary funding.
The Board has secured a loan of DKK 10 million from the Funders with the intention of repaying this facility with a share issue with subscription rights for existing shareholders to ensure that all shareholders will have the opportunity to participate in the share issue on equal terms.
Agreement with the largest creditor
The Company has loan facilities with its largest creditor of DKK 5.3 million at Company level and DKK 2.0 million in the operational entity, LED iBond A/S.
The facility at operational entity level of DKK 2.0 million has been extended to be un-amortized and does not carry any interest until 1 July 2028. All security and guarantees will be released.
The facility at Company level of DKK 5.3 million is still a subordinated and convertible loan. But the terms have been renegotiated so that the loan is interest free, and repayment will be made over 15 years with payments of 5% of positive accrued EBITDA from approved annual accounts calculated as from 1.1.2024. All security and guarantees will be released. These changes were contingent on the present conversion rate on the DKK 5.3 million subordinated and convertible loan to be re-set to market level during the decision process of the Board. The market price is set based on the trading in the period of October 2024 results in weighted average share price at DKK 0.17 per share. The share fluctuated from DKK 0.195 per share to DKK 0.145 per share. The change from DKK 0.35 per share to DKK 0.17 per share will need to be approved formally by the Shareholders at a general meeting.
Loan facility of DKK 10 million
The Funders that have provided the interim loan facilities and now the DKK 10 million loan facility are existing shareholders HCS 82 ApS, Stokbro Invest ApS, Houmøller Group ApS and Michael Brag (chairman)
The DKK 10 million loan will be split in two: DKK 6.3 million in accordance with the Board’s authority to issue convertible loans at market rate, to be set at DKK 0.17 per share, and the remaining DKK 3.7 million to be a simple loan. Both loans will accrue interest at 15 % p.a. to be paid quarterly and both loans to be repaid at the latest on 31 December 2026. The loans will be secured by floating charges, pledges over patents and pledge over shares in the operational entity, LED iBond A/S.
The Funders expect these loans to be repaid by a share issue with subscription rights for existing shareholders to ensure that all shareholders will be able to participate in the share issue on equal terms. The Funders will provide a subscription guarantee for this share issue. The Board will summon an extraordinary general meeting to this end.
Existing loan facility of DKK 2.75 million
The Company secured a DKK 2.75 million loan in April 2024 as part of the funding in Q4 2023. The loan is convertible and is to be repaid over 4 years starting 1 January 2026.
The Board has renegotiated the terms of this loan and has achieved a 3-year extension contingent on the conversion rate to be re-set from presently DKK 0.35 per share to market level DKK 0.17 per share set by the Board under its present mandate.
Extraordinary general meeting
The Board will summon an extraordinary general meeting on 9 January 2025 to seek approval of the relevant items above by the shareholders and mandate to conduct relevant capital increases.