Issue of loan stock

2 Dec 2005 13:50

Brainspark PLC02 December 2005 For immediate release 2 December 2005 Brainspark plc ("Brainspark" or the "Company") £850,000 Loan Stock The Company announces that (in accordance with an in principle decision by theBoard on 28 September 2005) it has agreed to issue a further £545,000 tranche ofthe Loan Stock, the initial issue of which was announced on 22 July 2005. Thisis in order to provide the Company with necessary additional working capital tobe used for potential investments, the repayment of £111,229 of debt to CrossAtlantic which, in accordance with its terms, is overdue and the terminationsettlement of £176,000 including tax (in accordance with contractual terms) withMr Agosta who has today resigned from the Board as referred to below. Brainsparkis today a debt free company. The total raised by both tranches of loan stock is therefore £850,000. The LoanStock is interest free and is repayable if not converted by 31 March 2006. Inaccordance with the formula announced in 22 July 2005, the Loan Stock isconvertible into ordinary shares of 0.01p each in Brainspark at a price of 0.46pper share. The ordinary shares to be so issued will rank pari passu in allrespects with the existing ordinary shares in issue It is a term of the LoanNotes that the holders agree on lock-in arrangements such that they will notsell or otherwise dispose of any shares arising from conversion for a period of12 months from the date of such conversion. The subscribers to the secondtranche also have agreed that such lock-in arrangements apply to the loan stockthey subscribed for in the first tranche. The final date for the payment ofsubscription monies for the loan stock is 10 December 2005. The subscribers for the loan stock (including both tranches) include thefollowing Directors of Brainspark and associated parties: Amount subscribed Number of shares on £ Conversion Francesco Gardin, Chairman 378,850 82,358,695 Alfredo Villa, Director 236,390 51,389,130 Luigi Fogliani, relative of theChairman by marriage 135,246 29,401,304 Dennis Bailey, proposed Director 50,000 10,869,565 Accordingly the transaction is a related party transaction under AIM Rule 13. The Directors, other the Messrs. Gardin and Villa, having consulted with theCompany's Nominated Adviser, believe that the terms of the issue of the loanstock are fair and reasonable in so far as the Company's shareholders areconcerned. Following the issue of the loan stock, the following will be the changes in theinterests of the Directors: At present At present Assuming full Assuming full conversion under the loan conversion stock under the loan stock Francesco 31,903,278 16.59% 114,261,974 30.25%Gardin Alfredo 0 0 51,389,130 13.61%Villa Brainspark announces that Alberto Agosta resigned as a director of the Companyearlier today for personal reasons. Commenting on his departure, Executive Chairman, Professor Francesco Gardin said "Mr Agosta has made a considerable contribution to Brainspark PLC over the last three and a half years. We wish him well for his future plans." This information is provided by RNS The company news service from the London Stock Exchange