26 Mar 2020 07:00
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
26 March 2020
Zoetic International plc
("Zoetic" or the "Company")
Issue of Equity
Zoetic, the London listed vertically integrated CBD company, is pleased to announce that Ox Distributing, LLC ("Ox Distributing") has subscribed for 23,750,000 new ordinary shares of 1 pence each in the capital of the Company ("Ordinary Shares") at a price of 5 pence each for a total consideration of £1,187,500 (the "Subscription").
Ox Distributing, which is owned by the Schrader family, is Zoetic's primary distribution partner in the United States and is part of the same group that owns the Schrader Oil convenience stores through which Zoetic's Chill products are sold. The Subscription was facilitated by the exercise of 23,750,000 warrants by Robert Price, the Company's former CEO, at 5 pence each. Mr Price agreed that the Company could issue the ordinary shares to Ox Distributing in lieu of payment by him for the warrant exercise.
In recognition that Zoetic's share price has been volatile during the current Covid-19 crisis and that the Company's Ordinary Shares have traded at below 5 pence this week, Zoetic and Ox Distributing have entered into a loan note instrument pursuant to which Ox Distributing will settle the consideration for the Subscription in 10 equal instalments of £118,750 each between 30 April 2020 and 31 January 2021. Ox Distributing may, at its discretion, elect to settle the consideration more quickly. The loan note instrument provides that interest will accrue on the outstanding consideration until such time as it is settled and, furthermore, a penalty interest rate will apply in the event that any monthly instalments are missed or delayed.
In a separate transaction, a second warrant holder has exercised 60,000 warrants, also at 5 pence each. Zoetic has also agreed with this warrant holder that he may pay for the resulting 60,000 ordinary shares over 10 months on similar terms to the loan note with Ox Distributing.
A further 2,750,000 warrants have expired unexercised. The Company now has no further warrants or options in issue aside from 7,155,000 share option awards to staff, exercisable at 10 pence per Ordinary Share, and 1,000,000 share options granted to Stephen Goldman, exercisable at 12 pence per Ordinary Share.
Application will be made for an additional 23,810,000 ordinary shares in the Company (the "New Ordinary Shares") to be admitted to trading on the Official List of the UK Listing Authority by way of a Standard Listing and to trading on the London Stock Exchange's Main Market for listed securities ("Admission"). Admission is expected to take place on 1 April 2020.
Following Admission, the New Ordinary Shares will rank pari passu in all respects with the existing Ordinary Shares in issue, including the right to receive all dividends and other distributions declared, and the total number of Ordinary Shares with voting rights will be 172,920,034. This figure may be used by Zoetic International shareholders as the denominator for calculations to determine if they have a notifiable interest in Zoetic International under the Disclosure and Transparency Rules, or if such interest has changed.
Following Admission, the Schrader family's holding of 24,750,000 ordinary shares will represent 14.31% of the Company's total voting rights and Robert Price's existing holding of 11,440,000 ordinary shares will represent 6.62% of the Company's total voting rights.
Director remuneration and staff responsibilities
Following on from the cost savings announced last week, Paul Mendell, Zoetic's Chairman, has informed the Company that he will continue to waive any remuneration for his role. Furthermore, for the duration of the Covid-19 crisis and whilst the Company is running on a lower headcount and at a lower cost, several members of staff have been asked to take on additional responsibilities to cover work done by former members of the team. No one is receiving any additional remuneration for these additional responsibilities.
Nick Tulloch, Chief Executive of Zoetic, said:
"On behalf of the entire Zoetic team, I would like to thank Ox Distributing and the Schrader family for their support. In the midst of one of the greatest economic and health crises in memory, and when many investors are being highly cautious about entering into new commitments, the confidence they are showing in our ability to succeed in our business plan is truly flattering.
"As I mentioned in our update last week, with our two CBD brands and inventory of feminised hemp seeds, we were poised to make significant advances in our business this month. The challenges presented by Covid-19 mean that we need to reassess our timing, but we continue to work on the basis that it is a case of when and not if. This new financial support has given us far greater scope to navigate our Company through these difficult times."
**ENDS**
Enquiries
Zoetic International plc +44 (0) 1738 472 029
Nick Tulloch
Allenby Capital Limited (Financial Adviser and Broker) +44 (0) 20 3328 5656
Nick Harriss
Nick Naylor
IFC Advisory Ltd (Financial PR and IR) +44 (0) 20 3934 6630
Tim Metcalfe
Graham Herring
Florence Chandler