Falanx plc LON:FLX CEO, John Blamire said: “Receiving an unsolicited approach to invest in Falanx at the market price and without the requirement for incentives such as Warrants or discounts, provides further proof Falanx has turned the corner as a highly investible business and Cyber Security is an extremely attractive growth area”.
Falanx Group (AIM:FLX) announced this morning the placing of new ordinary shares of no par value in the capital of the Company raising total gross proceeds of £0.75 million and the immediate repayment of senior unsecured zero coupon convertible loan notes.
Placing
On 30 Sept 2016, Falanx agreed to place 18,750,000 of new Ordinary Shares following an unsolicited approach by Turner Pope Investments on behalf of their clients, at a price of 4 pence per Ordinary Share, raising gross proceeds of £750,000. No Warrants are attached to this Placing. Turner Pope Investments will receive 468,750 Ordinary Shares as Fees, which are subject to a 6 month ‘Lock-in’ period from the date of issue.
The total Ordinary Shares to be issued pursuant to the Placing represent approximately 18.20% of the Company’s existing issued share capital and will represent, in aggregate, approximately 15.4% of the Company’s enlarged issued share capital.
Early Redemption of Loan Notes
Falanx will use proceeds from the Placing to fund the redemption of the Loan Notes issued to Darwin Capital Limited on 5 May 2016 and provide further working capital for the Company.
The Loan Notes, which carry a fixed and floating senior charge over the assets of the Company, fall due for redemption on 5 November 2016 (“Redemption Date”) in the sum of £495,000 (“Principal Amount”) will be redeemed immediately in cash.
Repayment of Loan Notes – further terms
Under the term of the loan, the Company can redeem the Loan Notes for cash at any time prior to the Redemption Date of 5 November 2016, in which case the Company may elect to cancel or enforce exercise of half of the Warrants issued to the Loan Note Holder.
The Company has elected, under these terms, to cancel half of the Warrants issued to the Loan Note Holder.
Admission of the new Ordinary Shares to trading on AIM
Application will be made for admission of the 19,218,750 new Ordinary Shares to be issued pursuant to the Placing to trading on the AIM Market of the London Stock Exchange, which is expected to take place on or around 8.00 a.m. on 10th October 2016 (“Admission”). The Placing is conditional on Admission becoming effective. The new Ordinary Shares will, when issued, be credited as fully paid and will rank equally in all respects with the existing Ordinary Shares, including the right to receive any dividend or other distribution declared, made or paid after Admission.
Following Admission, the Company’s enlarged issued share capital will comprise 124,830,904 Ordinary Shares carrying one vote per share. The Company does not hold any Ordinary Shares in treasury.
Chairman of Falanx, Mike Read said: “I am delighted to announce this placing at the market price and the repayment of the convertible loan. We are grateful to Darwin Capital Limited for providing the loan to assist us in the acquisition of ASC. When Turner Pope Investments approached the company the Board felt the timing was right to repay the loan and move the business forward on a debt free basis.”
Turner Pope Investments, Director, Ben Turner said: “We have been observing Falanx for some time and have historically invested in other successful companies under the stewardship of Mike Read. Our clients were keen to attain an equity holding in Falanx but were unable to make the level of investment they required through the secondary market and so we decided to approach the company directly. We are extremely pleased Falanx have accepted our offer and our shareholders look forward to supporting the growth of this exciting company”
