TIDMCCS
RNS Number : 4382U
Crossword Cybersecurity PLC
22 November 2019
Crossword Cybersecurity Plc
Publication of Circular
22 November 2019 - London, UK - Further to its announcement of
21 November 2019, Crossword Cybersecurity Plc (AIM:CCS,
"Crossword", the "Company" or the "Group"), the technology
commercialisation company focused solely on cyber security and
risk, has today published a circular convening a general meeting to
take place on 10 December 2019 (the "Circular") at which a special
resolution will be proposed in connection with a proposed technical
adjustment to the borrowing limits in the Company's articles of
association (the "Articles") to the greater of GBP1,500,000 and an
amount equal to 20% of the Adjusted Capital and Reserves (as
defined by the Articles). Amending the borrowing powers in the
Articles will enable the Company to enter into three year
convertible loan agreements to the value of GBP1,275,000, as
previously disclosed.
The general meeting will be held at the offices of Shakespeare
Martineau LLP at 60 Gracechurch Street, London EC3V, United Kingdom
at 3:00 p.m. on 10 December 2019. A copy of the Circular will be
available on the Company's website,
https://www.crosswordcybersecurity.com/.
Tom Ilube, Chief Executive Officer, commented:
"We are grateful to our investors for their support, and are
confident this will help us in achieving our growth
objectives."
An extract from the Circular is set out below.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Contacts
Crossword Cybersecurity plc - Tel: +44 (0) 20 3953 8460
Email: info@crosswordcybersecurity.com
Tom Ilube, Chief Executive Officer
Mary Dowd, Finance Director
Grant Thornton UK LLP (Nominated Adviser) - Tel: +44 (0) 20 7383
5100
Colin Aaronson / Jamie Barklem / Niall McDonald
Hybridan LLP (Broker) - Tel: +44 (0)203 764 2341
Claire Louise Noyce
About Crossword Cybersecurity plc
Crossword Cybersecurity plc focuses on the development and
commercialisation of university research-based cyber security and
risk management related software and cyber security consulting. The
Group's specialist cyber security product development and software
engineering teams work with its university partners to develop the
research concept into a fully-fledged commercial product that it
will then take to market. The Group's aim is to build up a
portfolio of revenue generating, intellectual property based, cyber
security products. Rizikon Assurance, Crossword's leading product,
is a SaaS platform that enables medium to large companies to assess
and manage all risks from their suppliers. Nixer CyberML,
Crossword's most recently launched product, is a new tool for
businesses that want to solve advanced security and cybercrime
problems, such as detecting and dealing with compromised accounts,
fraud and in-application denial of service attacks.
For media enquiries contact:
Lorena Duke, GingerPR
lorena@gingerpr.co.uk, 01932 485 300
LETTER FROM THE CHAIRMAN OF CROSSWORD CYBERSECURITY PLC
Dear Shareholder,
Proposed issue of debt securities
Proposed amendment to the Company's Articles of Association
and
Notice of General Meeting
1 INTRODUCTION
As noted in the Company's Trading Update and Financing
announcement on 24(th) October 2019, Crossword is moving forward
with entering into loan agreements, having had GBP1m committed from
third parties and current shareholders and Directors, at the time
of that announcement. Since then, Crossword has signed non-binding
term sheets of GBP1,275,000 to date.
I am therefore writing to provide you with details of the
proposed GBP1,2750,000 loans and to give you notice of the General
Meeting at which the resolutions to approve an amendment to the
Company's Articles of Association to increase the cap set on the
Company' borrowing authorities. The General Meeting is to be held
at the offices of Shakespeare Martineau LLP, 6(th) Floor, 60
Gracechurch Street, London EC3V 0HR at 3.00 p.m. on 10(th) December
2019. The formal notice of General Meeting is set out at the end of
this document.
2 INFORMATION ON CROSSWORD CYBERSECURITY PLC
Crossword Cybersecurity plc focuses on the development and
commercialisation of university research-based cyber security
related software and cyber security consulting. The Group's
specialist cyber security product development and software
engineering teams work with its university partners to develop the
research concept into a fully-fledged commercial product that it
will then take to market. The Group's aim is to build up a
portfolio of revenue generating, intellectual property based, cyber
security products.
Rizikon Assurance, Crossword's leading product, is a SaaS
platform that enables medium to large companies to assess the cyber
maturity and GDPR readiness of their suppliers and to assess
compliance with their requirements across a range of criteria. The
Group's second principal product, Nixer CyberML was launched on
14th November 2019. Nixer CyberML is a new tool for businesses that
want to solve advanced security and cybercrime problems, such as
detecting and dealing with compromised accounts, fraud and
in-application denial of service attacks.
Crossword's team of expert cyber security consultants leverages
years of experience in national security, defence and commercial
cyber intelligence and operations to provide bespoke advice
tailored to its clients' business needs.
3 BACKGROUND TO, AND REASONS FOR, THE LOANS
Crossword was admitted to AIM in December 2018 in order, inter
alia, to access a wider range of investors and to give the Group
the flexibility to raise capital to fund its growth strategy. The
Group's objective is to be the European leader in commercialising
cyber security research originating from universities. It aims to
achieve this by building up a portfolio of revenue generating cyber
security products and becoming a leading supplier of cyber
security-focussed risk and compliance products and services in what
the Directors believe to be a rapidly growing and increasingly
complex market environment. They believe that organisations will
need to put in place software, systems, procedures and practices
that will enable them to demonstrate that they meet the necessary
standards and continuously to test their compliance with those
standards.
Since admission to AIM, Rizikon Assurance has gained traction
with some notable client wins and a large increase in its pipeline.
Rizikon Assurance 2.0 was launched in Sept 2019, incorporating a
Third-party Assurance Framework Dashboard.
To continue with growth plans, Crossword requires additional
funding. With the current market turmoil due to economic
uncertainty exacerbated by Brexit and international trade wars, the
Board concluded that a convertible loan would be the most
appropriate means of attracting investors and of satisfying the
Group's near to mid-term working capital needs and to fund its
growth plans. The interest payments will be serviced from current
cashflows.
The Loans, for which the Company has received commitments of
GBP1,275,000, have the following terms:
Term Three years from the date of the loan agreement
Interest rate 12 per cent., payable quarterly in arrears
------------------------------------------------------
Early repayment At the Company's sole option, subject to a minimum
repayment amount of GBP10,000
------------------------------------------------------
Form of repayment In cash, save that each lender may opt to convert
part or all of their loan into Ordinary Shares
at a price the closing mid-price per Ordinary Share
on the last practicable date before the date of
the Loan Agreement
------------------------------------------------------
Warrants On repayment of the Loans in cash, each lender
will be issued warrants valid for three months
to subscribe for Ordinary Shares representing 10
per cent. of the value of the Loan at the Conversion
Price
------------------------------------------------------
The terms of the loans will allow lenders who have accepted
repayment of the loans in cash (rather than elected for conversion
before repayment) to be issued warrants at the same price per share
as the conversion price within three months after repayment.
4 USE OF PROCEEDS
The proceeds of the loans will be used for near to mid-term
working capital requirements and to fund the Group's growth plans
including continued sales of products and further product
development.
5 RELATED PARTY TRANSACTION
Included among the commitments is one from Tom Ilube, CEO, for
an amount of GBP250,000. Tom Ilube has agreed to make a loan to the
Company on the same terms as the other Lenders as described above.
By virtue of its size, Mr Ilube's loan constitutes a related party
transaction under Rule 13 of the AIM Rules for Companies. The
Independent Directors, being the Directors other than Tom Ilube
consider, having consulted with the Company's Nominated adviser,
that the terms of Mr Ilube's Loan are fair and reasonable insofar
as the Company's Shareholders are concerned.
6 GENERAL MEETING
Set out at the end of this document is a notice convening the
General Meeting to be held at the offices of Shakespeare Martineau
LLP, 6(th) Floor, 60 Gracechurch Street, London EC3V 0HR at 3.00
p.m. on 10(th) December 2019, at which the following Resolution
will be proposed for the purposes of amending the existing articles
of association of the Company to remove the current article 113.2
in its entirety and replacing it with the following article 113.2
which increases the existing cap on the Company's borrowing
powers:-
THAT the Articles be amended by deleting the current Article
113.2 in its entirety and replacing it with the following Article
113.2:
"The Board shall restrict the borrowings of the Company and
exercise all voting and other rights and powers of control
exercisable by the Company in respect of its subsidiary
undertakings so as to procure (as regards its subsidiary
undertakings in so far as it can procure by such exercise) that the
aggregate principal amount at any one time outstanding in respect
of monies borrowed by the Group (exclusive of monies borrowed by
one Group company from another and after deducting cash deposited)
shall not at any time, without the previous sanction of an ordinary
resolution of the Company, exceed the greater of GBP1,500,000 and
an amount equal to 20% of the Adjusted Capital and Reserves."
7 ACTION TO BE TAKEN
A Form of Proxy for use at the General Meeting accompanies this
document. Whether or not you intend to be present at the General
Meeting, you are asked to complete the Form of Proxy and return it
to the Company's registrars, Share Registrars Limited at The
Courtyard, 17 West Street, Farnham, Surrey, GU9 7DR so as to be
received not less than 48 hours (excluding any part of a day that
is not a Business Day) before the time and date fixed for the
holding of the meeting or any adjournment thereof (as the case may
be). For the avoidance of doubt, the last possible date for the
submission of forms of proxy will be 3.00 p.m. on 6(th) December
2019 (or in the case of an adjournment of the General Meeting, not
later than 48 hours before the time fixed for the holding of the
adjourned meeting (excluding any part of a day that is not a
Business Day)).
If you hold your Ordinary Shares in uncertificated form in
CREST, you may vote using the CREST Proxy Voting Service in
accordance with the procedures set out in the CREST Manual. Further
details are also set out in the notes accompanying the Notice of
General Meeting at the end of this document. Proxies submitted via
CREST must be received by the Company's agent (ID 7RA36) by no
later than 3.00 p.m. on 6(th) December 2019 (or if the General
Meeting is adjourned, 48 hours (excluding any part of a day that is
not a Business Day) before the time fixed for the adjourned
meeting).
The completion and return of a Form of Proxy will not preclude
Shareholders from attending the General Meeting and voting in
person should they so wish.
8 RECOMMENDATION
The Directors unanimously consider that the Placing is in the
best interests of the Company and its Shareholders as a whole.
Accordingly, the Directors unanimously recommend that Shareholders
vote in favour of the Resolution.
Yours faithfully
Sir Richard Dearlove
Chairman
DEFINITIONS
The following definitions apply throughout this document, unless
the context requires otherwise:
AIM the market of that name operated by the London Stock
Exchange.
AIM Rules for Companies the AIM Rules for Companies published by the London Stock
Exchange for the time being.
Board the board of directors of the Company for the time
being.
Business Day any day on which banks are open for business in
London other than a Saturday, Sunday or statutory holiday.
CA 2006 the Companies Act 2006, as amended.
Company or Crossword Crossword Cybersecurity plc, a public
limited liability company incorporated and registered in England
and Wales (with registration number 08927013) whose registered
office is at 6th Floor 60 Gracechurch Street, London, United
Kingdom, EC3V 0HR.
Conversion Price the closing mid-price per Ordinary Share on the
last practicable date before the date of the Loan Agreement
CREST the computerised settlement system (as defined in the
CREST Regulations) operated by Euroclear which facilitates the
holding and transfer of title to shares in uncertificated form.
CREST Regulations the Uncertificated Securities Regulations 2001
(SI 2001 No.
3755) as amended.
Directors the directors of the Company as at the date of this
document whose names are listed on page 3 of this document.
Form of Proxy the form of proxy for use at the General Meeting.
General Meeting the general meeting of the Company convened
pursuant to the Notice and to be held at the offices of Shakespeare
Martineau LLP, 6(th) Floor, 60 Gracechurch Street, London EC3V 0HR
2EW at 3.00 p.m. on 10(th) December 2019.
Group the Company and its subsidiary undertakings from time to
time
Lender Provider of loan
Loan/Loan Agreement Contract under which funds are provided
London Stock Exchange London Stock Exchange plc.
Notice the notice of General Meeting which is set out at the end
of this document.
Ordinary Shares ordinary shares of GBP0.05 each in the capital
of the Company
Resolutions the resolutions set out in the Notice which are to
be proposed at the General Meeting.
Shareholders the registered holders of Ordinary Shares.
UK or United Kingdom the United Kingdom of Great Britain and Northern Ireland.
uncertificated recorded on the relevant register of the share or
security concerned as being held in uncertificated form in CREST
and title to which, by virtue of the CREST Regulations may be
transferred by means of CREST.
This information is provided by RNS, the news service of the
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contact rns@lseg.com or visit www.rns.com.
END
MSCCKBDQOBDDNDB
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November 22, 2019 12:47 ET (17:47 GMT)
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