SJH.L Regulatory News (SJH)

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

15 February 2019

BOXHILL TECHNOLOGIES PLC

 ("Boxhill", the "Group" or the "Company")

Notice of General Meeting and Issue of Equity

Further to the announcement of 30 January 2019, the Board is pleased to announce the publication and posting of the Circular to Shareholders containing:

· The notice of General Meeting; and

· A notice of the previously adjourned AGM.

A copy of the circular has been published on the Company's website (https://boxhillplc.com), and material elements are extracted below. Both the GM and AGM will be held on 4 March 2019.

Letter from the Chairman

1. Introduction

The General Meeting is being convened for the purpose of asking Shareholders to consider and, if thought fit, to pass the Resolutions. The Notice can be found in Part II of this document.

Full details of the Resolutions are provided within this document.

You will also find included the AGM Notice re-convening the previously adjourned AGM. The Company's AGM for the year to 31 January 2018 was held on 31 July 2018 but was adjourned solely in relation to the resolution to lay the accounts before the members. Following the publication of the Company's audited annual report and accounts on 30 January 2019, that resolution will now be put before Shareholders. Resolution 1, the sole resolution in the AGM Notice, relates to the ordinary business to be considered at the re-convened Annual General Meeting namely the receipt and adoption of the annual accounts of the Company for the year ended 31 January 2018. The AGM Notice can be found in Part III of this document.

2. Background to the Proposals

Prior to the Suspension the Ordinary Shares were trading at a 55 per cent. discount to their nominal value. While the Ordinary Shares have recovered somewhat since their return from Suspension, the mid-market price is still 30 per cent. below the nominal value (based on the closing mid-market price as of 13 February 2018).

Following discussion with the Company's financial adviser, the Board propose the Restructuring, alongside a similar authority to allot equity securities of the disapplication of pre-emption rights as was passed at the AGM but adjusted for the Restructuring. The Board believe that this will result in improved liquidity and perception of the Company as an investment, as well as create greater future flexibility for capital raising.

Similarly, to reflect the change in ongoing strategy of the Group and the significant changes that have occurred during the last year, the Board believes that a change of the Company's name is appropriate.

3. Share Capital, Issue of Ordinary Shares and Related Party Transactions

At the AGM, Shareholders approved the following resolutions:

Ordinary Resolution

THAT, in accordance with section 551 of the Act, the Directors be generally and unconditionally authorised to exercise all the powers of the Company to allot equity securities (as defined by section 560 of the Act), up to an aggregate nominal amount of £2,500,000 provided that this authority shall, unless renewed, varied or revoked by the Company, expire on the fifth anniversary of its passing save that the Company may, before such expiry, make offers or agreements which would all might require equity securities to be allotted and the Directors may allot equity securities in pursuance of such offer or agreement notwithstanding that the authority conferred by this Resolution has expired. This Resolution revokes and replaces all unexercised authorities previously granted to the Directors to allot equity securities but without prejudice to any allotment of shares or grant of rights already made, offered or agreed to be made pursuant to such authorities.

Special Resolution

THAT, subject to the passing of Resolution 6, the Directors be generally and unconditionally authorised and granted the power to allot equity securities (as defined by section 560 of the Act) for cash, either pursuant to the authority conferred by Resolution 6 or by way of sale of treasury shares, as if section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities up to an aggregate nominal value of £2,500,000.The power granted by this resolution shall expire on the first anniversary of its passing or, if earlier 31 December 2019, unless renewed varied or revoked by the Company prior to or on such date, save that the Company may, before such expiry, make offers or agreements which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred by this Resolution has expired. This Resolution revokes and replaces all unexercised powers and authorities previously granted to the directors to allot equity securities as if section 561(1) of the Act 2006 did not apply, but without prejudice to any allotment of equity securities already made or agreed to be made pursuant to such authorities

The Board proposes to replace the above resolutions passed at the AGM with similar authorities, subject to Shareholders approving the Restructuring, which adjust the aggregate nominal amount to £20,000 for both Resolutions to reflect the changes in the Restructuring, in relation to the New Ordinary Shares so as to provide the necessary flexibility to make acquisitions, settle liabilities and undertake equity fundraisings. This is laid out in Resolution 2 and Resolution 3 in the Notice.

The Board yesterday resolved to issue the following Ordinary Shares, totalling 200,000,230 Ordinary Shares, in settlement of amounts owed:

1. 30,000,000 Ordinary Shares at a price of 0.1 pence per share in settlement of invoices for director and consultancy fees totalling £30,000 from RT Associates, a partnership controlled by Lord Tim Razzall, a director of the Company, in relation to his contracted services as Executive Chairman of the Company.

2. 20,000,000 Ordinary Shares at a price of 0.1 pence per share in settlement of invoices for consultancy fees totalling £20,000 from FS Business Limited, a company controlled by Andrew Flitcroft, the company secretary and a former director of the Company, in relation to his contracted services as Finance Director and company secretary of the Company.

3. 50,000,000 Ordinary Shares at a price of 0.1 pence per share in settlement of salaried amounts outstanding totalling £50,000 for Cath McCormick, a director of the Company, in relation to her contracted employment with the Company.

4. The Board has agreed contractual terms with John Botros t/a St. James Street Chambers in relation to the legal work involved in the issues surrounding Net World Ltd and its impact on the delayed audit of the Company (as announced on 30 January 2019) for a total consideration of £100,000.23 (the "Legal Services"). The Board and Mr Botros have agreed to the issue of 100,000,230 Ordinary Shares at a price of 0.1 pence per share in settlement of the invoice for the Legal Services. John Botros is a director of a Group company.

(Collectively, the "Fee Shares")

The Board believes that the issue of the Fee Shares will be significantly positive for the Company's working capital position and has today approved the issue and allotment of the Fee Shares; an application will be made to admit the Fee Shares to trading on AIM with effect from 21 February 2019. The Fee Shares are being issued at a 43 per cent premium to the closing mid-market price of the Ordinary Shares on 13 February 2019.

The issue of the Ordinary Shares to Lord Tim Razzall is a related party transaction under the AIM Rules for Companies. The Board, other than Lord Razzall and Cath McCormick, consider, having consulted with Allenby Capital, the Company's nominated adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

The issue of the Ordinary Shares to settle the invoices from FS Business Limited is a related party transaction under the AIM Rules for Companies. The Board, other than Lord Razzall and Cath McCormick, consider, having consulted with Allenby Capital Limited, the Company's nominated adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

The issue of the Ordinary Shares to Cath McCormick is a related party transaction under the AIM Rules for Companies. The Board, other than Lord Razzall and Cath McCormick, consider, having consulted with Allenby Capital Limited, the Company's nominated adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

The Legal Services and the issue of the Ordinary Shares to settle the invoices for the Legal Services are related party transactions under the AIM Rules for Companies. The Board, other than Lord Razzall and Cath McCormick, consider, having consulted with Allenby Capital Limited, the Company's nominated adviser, that the terms of the transactions are fair and reasonable insofar as its shareholders are concerned. 

At a general meeting held on 30 July 2018, Shareholders approved the sale of Emex. As part of the terms of the Disposal, the MDC Shares were to be issued, but due to the Suspension, these were not issued at the time of the Disposal. The Board has today approved the issue and allotment of the MDC Shares and an application will be made to admit the MDC Shares to trading on AIM with effect from 21 February 2019.

The issue of the Fee Shares and the MDC Shares will be undertaken with the allotment authorities approved by Shareholders at the AGM. Following the issue of the Fee Shares and the MDC Shares, the Company will have 3,115,830,000 Ordinary Shares in issue, each with one voting right per share.

4. The Restructuring

The Board proposes a share capital restructuring that will consist of a sub-division of each Ordinary Share followed by a consolidation at a ratio of 1:1,000. The Board considers that having nearly three billion shares issued has created a negative perception of the Company and also exposes Shareholders to undue volatility.

It is proposed that each Ordinary Share of the Company will be sub-divided into one new ordinary share of 0.001 pence each ("Interim Ordinary Shares") and one deferred share of 0.099 pence each ("Deferred Shares"), followed by a consolidation of every 1,000 Interim Ordinary Shares into one consolidated new ordinary share of 1 pence each ("New Ordinary Shares"). Therefore, the existing 3,115,830,000 Ordinary Shares will become 3,115,830 New Ordinary Shares and 3,115,830,000 Deferred Shares (the "Restructuring"). Fractional entitlements arising from the Restructuring will be aggregated and sold in the market for the benefit of the Company. The value of any individual Shareholder's fractional entitlement will be less than £1.00 at the closing mid-market price of the Ordinary Shares on 13 February 2019. There will be 3,115,830 New Ordinary Shares in issue, each with one voting right per share, if the Restructuring is approved. Shareholders whose Ordinary Shares are in certificated form will receive replacement certificates for the New Ordinary Shares.

The Deferred Shares will have no right to vote, attend or speak at general meetings of the Company and will have no right to receive any dividend or other distribution and will have only limited rights to participate in any return of capital on a winding-up or liquidation of the Company. No application will be made to the London Stock Exchange for admission of the Deferred Shares to trading on AIM. There will be 3,115,830,000 Deferred Shares in issue if the Restructuring is approved.

The outstanding options over 60,000,000 Ordinary Shares exercisable at 0.1 pence per Ordinary Share (as announced 24 April 2018), all held by Board members, will be adjusted for the Restructuring to become option over 60,000 New Ordinary Shares, exercisable at 100 pence per share. The life of the options remains unchanged at 5 years from 23 April 2018.

5. Change of Name and Change of Registered Office

It is proposed that the Company changes its name to St James House plc, due to the Group's strategy having changed significantly since becoming Boxhill Technologies in September 2013 and for the reasons outlined below. It is proposed that the change of name would take effect from the admission of the New Ordinary Shares to trading on AIM.

While the lottery business, operated by PPS was the foundation of the Group and a continuing element of the business throughout, it was somewhat restrained in its potential, due to historic difficulties that went back almost a decade. Due to the hard work of James Rose, the Managing Director of PPS, and his team, those problems are now firmly in the past and the outlook for the lottery business has materially improved, as evidenced by the contract to operate a lottery for one of the UK's largest membership organisations, announced on 1 November 2018.

Following establishment of Market Access (as announced on 28 March 2018) and the sale of Emex, the Group has refocused its payments business, now led by Mark Harris, towards foreign exchange transactions and mainstream payment processing, and away from Non-Conforming Customers (as outlined in the general meeting circular published 12 July 2018). 

With the Group's new executive management team led by Graeme Paton and Cath McCormick now firmly focused on the twin-track of PPS and Market Access, the Board believes the proposed name of St James House plc is more appropriate for the future.

The Company has from today moved its registered office to 30-35 Pall Mall, London SW1Y 5LP.

6. The Board, Management and Major Shareholdings

The Shareholdings of the Board, other Persons Discharging Managerial Responsibilities (as defined in the Market Abuse Regulation) and Significant Shareholders (as defined in the AIM Rules for Companies) as at the date of this document (including the Fee Shares and the MDC Shares), to the best of the Company's knowledge, and assuming the Restructuring is completed are/will be as follows:

1. Includes Ordinary Shares held by Bluedale Corporate Limited, a company controlled by Mr Botros, MDC Nominees Limited, a company controlled by Mr Botros (the MDC Shares) and 46,236,391 held by J M Malone, Mr Botros' wife. Mr Botros is a director of a subsidiary of the Company.

2. Includes Ordinary Shares held by Management Express Limited, a company controlled by Mr Rose. Mr Rose is a director of a subsidiary of the Company.

3. Includes Ordinary Shares held by Moorhen Limited, a company controlled by Mr Jackson.

* Directors of the Company

Following the appointment of Graeme Paton as Chief Executive Officer of the Company on 30 January 2019, Lord Razzall confirms he will return to Non-Executive Chairman with effect from the date of the General Meeting, having temporarily held the role since 20 May 2016.

7. Action to be taken

The Form of Proxy for use in connection with the General Meeting and the AGM Proxy for use in connection with the re-convened AGM are enclosed with this document. Whether or not you intend to be present at the General Meeting and/or re-convened AGM, you are requested to complete, sign and return the Form of Proxy and AGM Form of Proxy in accordance with the instructions printed thereon to the Company's Registrars, as soon as possible and, in any event, not later than 12.00 midday on 28 February 2019, being 48 hours (excluding the weekend) before the time of the General Meeting and 12.30 p.m. on 28 February 2019, being 48 hours (excluding the weekend) before the time of the re-convened AGM respectively. The completion and return of a Form of Proxy and AGM Form of Proxy will not preclude you from attending the General Meeting and re-convened AGM respectively and voting in person should you subsequently wish to do so.

8. Recommendation

The Directors consider that the Proposals are 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 Resolutions to be proposed at the GM.

The Board, Andrew Flitcroft (company secretary), John Botros (subsidiary director), James Rose (subsidiary director), Phil Jackson (senior manager) and certain other shareholders have given irrevocable undertakings that they and persons closely associated (as defined in the Market Abuse Regulation) with them will vote in favour of the Resolutions. These irrevocable undertakings represent a total 1,231,587,656 Ordinary Shares, equivalent to 39.53 per cent. of the issued Ordinary Shares.

For further information, contact:

Expected Timetable of Events

Statistic Relating to the Restructuring

Definitions

The following definitions apply throughout this document unless the context otherwise requires:

PDMR Dealings

Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them: