MediaZest Plc - Fundraising of £130,000 via Convertible Loan Notes

Market soundings, as defined in the EU Market Abuse Regulation (MAR), were taken in respect of the Fundraise with the result that certain persons became aware of inside information, as permitted by MAR.  That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR.  Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.

7 August 2023

MediaZest Plc

("MediaZest", the "Company” or the “Group”; AIM: MDZ)

 Fundraising of £130,000 via Convertible Loan Notes and Repayment of £150,000 3 Year Convertible loan notes issued 5 August 2020

MediaZest (AIM: MDZ), the creative audio-visual company, announces that it has raised £130,000 (before expenses) via the issue of new 3-year unsecured convertible loan notes (the “New CLNs") to existing investors (the “Fundraise”). The Company has also repaid £150,000 of unsecured convertible loan notes previously issued on 5 August 2020, which had a maturity date of 5 August 2023 (the “Existing CLNs”).  

The gross amount raised via the Existing CLNs was £150,000 via subscriptions from four different shareholders. Of these, three shareholders have agreed to enter into the New CLNs via subscriptions totalling £130,000 and one shareholder has been repaid £20,000 in full from free cashflow.

Pursuant to the terms of the Existing CLNs, a total of 28,571,429 warrants over the Company’s ordinary shares of 0.01p (“Ordinary Shares”) have been granted to holders of the Existing CLNs (the “Existing CLN Warrants”). The Existing CLN Warrants have an exercise price of 0.0525p, being the closing mid-market price of MediaZest’s Ordinary Shares on 4 August 2023 and have a twelve month term, expiring on 4 August 2024.  

The net proceeds of the Fundraise will provide the Group with additional working capital.

New CLN Terms

The terms of the New CLNs are as follows:

-          3-year CLN (the “Term”), with interest of 10% per annum, payable quarterly in arrears;

-          MediaZest will make a bullet repayment to each investor at the end of the Term if the CLN (in whole or in part) remains unconverted;

-          The Company may repay in full the CLN at any time, including accumulated interest on a pro-rata basis;

-          Each investor can convert the CLNs (in whole or in part) into new Ordinary Shares by serving written notice 14 days after each annual anniversary during the Term;

-          The CLN conversion rate will be calculated by dividing the principal amount of the CLN by the mid-market price of the Ordinary Shares, on the last business day before the relevant anniversary date of the CLN, less a discount of 10%; and

-          If the CLN is repaid at the end of the Term then warrants over new Ordinary Shares will be granted to each investor (the “Warrants”). The number of Warrants granted will be calculated by dividing a sum equal to 10% of the principal amount of the CLN by the mid-market price of the shares in MDZ at on the last business day before the closing of the CLN. The Warrants’ exercise price will be the mid-market price of the shares in MDZ on the last business day before the closing of the CLN and the Warrants will expire 12 months from the date of grant.

Geoff Robertson, MediaZest’s CEO said: “We are delighted to announce the Fundraise and the Board is grateful for the continued support of our existing shareholders. The Fundraise provides further confidence as we seek to build on the Group’s encouraging recent performance during the second half of the current financial year.”

Related Party Transaction

Certain existing shareholders have subscribed for New CLNs as part of the Fundraise.

City and Claremont Capital Assets Ltd (“CCCAL”) is a substantial shareholder in the Company and has subscribed for £100,000 of New CLNs pursuant to the Fundraise (the “CCCAL Subscription”).

The CCCAL Subscription therefore constitutes a related party transaction in accordance with AIM Rule 13 of the AIM Rules for Companies. The Directors, who are all considered to be independent Directors for these purposes, having consulted with the Company's nominated adviser consider the terms of the CCCAL Subscription to be fair and reasonable insofar as the Company’s shareholders are concerned.

CCCAL has been granted 19,047,619 Existing CLN Warrants pursuant to the terms of the Existing CLN.

Notes to Editors:

About MediaZest

MediaZest is a creative audio-visual systems integrator that specialises in providing innovative marketing solutions to leading retailers, brand owners and corporations, but also works in the public sector in both the NHS and Education markets. The Group supplies an integrated service from content creation and system design to installation, technical support, and maintenance. MediaZest was admitted to the London Stock Exchange's AIM market in February 2005. For more information, please visit www.mediazest.com