TIDMRTOP
RNS Number : 8000V
RegTech Open Project PLC
06 December 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC
LAW IN THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND
("UK") PURSUANT TO THE MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS
(SI 2019/310) ("UK MAR").
6 December 2023
RegTech Open Project plc
("RTOP" or the "Company" and, together with its subsidiaries and
subsidiary undertakings from time to time, as the context requires,
the "Group")
Change of Company Secretary and Compliance Officer
Financial and Business Updates
RegTech Open Project plc (LSE: RTOP), the technology business
specialised in the automation, management, and optimisation of
regulatory compliance operations provides the following operational
and business updates.
Change of Company Secretary and Compliance Officer
Following the commencement of Paul McFadden's employment as
Chief Financial Officer of the Company (as previously notified to
the market on 7 September 2023), the board of directors of RTOP
(the "Board"; the "Directors") has approved his appointment as
Company Secretary with effect from 12 December 2023, succeeding OHS
Secretaries Limited.
Mr. McFadden has separately been appointed by the Board as
RTOP's Compliance Officer with effect from 12 December 2023,
succeeding Ian Halliday-Pegg.
Financial update
Since completion of Company's direct listing on 25 August 2023,
the Company has served drawdown notices for a total of GBP3,500,000
(comprising GBP2,000,000 drawdown by 1 September 2023, GBP500,000
by 30 September 2023 and, since 1 October 2023, two tranches of
GBP500,000 each) under the English law governed fixed term
unsecured working capital loan agreement, and made between the
Company and RegTech Open Project S.p.A. (a corporate entity
ultimately beneficially wholly-owned by Alessandro Zamboni)
("RegTech Italy"), dated 21 August 2023 (the "Shareholder Loan
Agreement") , of which:
-- GBP1,046,000 in funds have been received (GBP437,000 in funds
being received prior to 29 September 2023) by the Company, accruing
non-compounding interest rate of 10% per annum (calculated on a
360-day basis) due to RegTech Italy ; and
-- GBP2,454,000 remains to be advanced by RegTech and is
accruing compounding interest rate of 15% per annum, pursuant to a
n English law governed side letter agreement entered into between
the Company and RegTech Italy, on 28 September 2023 (the "Side
Letter Agreement").
The Company has to date agreed with RegTech Italy to set-off
approximately GBP612,500 in payables of the Company on a
GBP-for-GBP basis to be settled by RegTech Italy, and the Company
has today entered into an amendment to the Shareholder Loan
Agreement with RegTech Italy (the "SLA Deed of Amendment"), whereby
the Company and RegTech Italy have agreed to:
-- increase the maximum amount of such payables that may be
set-off on a GBP-for-GBP basis from "up to GBP2,000,000" to "up to
GBP3,600,000", thereby increasing the maximum amount of the loan
made available by RegTech Italy to the Company by way of the
Shareholder Loan Agreement from "up to GBP8,000,000" to "up to
GBP9,600,000"; and
-- to extend the period during which such set-off may be made
from a long-stop date "ending on 31 March 2024" to "ending on 31
December 2024".
As at the date of this announcement, the Company has identified
up to GBP2,952,000 in potential payables which it may elect to
set-off to be settled by RegTech Italy by 31 December 2024 (which,
together with the approximately GBP612,500 in payables already
set-off, would equate to up to GBP3,564,500 in aggregate, which
will provide the Company with up to GBP35,500 in remaining headroom
to set-off payables under the Shareholder Loan Agreement). Amounts
set-off attract a non-compounding interest rate of 5% per annum
(calculated on a 360-day basis) due to RegTech Italy.
In connection with the discussions held between Alessandro
Zamboni and the other Directors ("Independent Directors") , Mr.
Zamboni has acknowledged the amounts currently outstanding under
the Shareholder Loan Agreement, and has made representations to the
Company that RegTech Italy will be in a position to fulfil its
payment obligations in full, and specifically that GBP1,400,000
will be paid to the Company by 31 December 2023. The Independent
Directors did not deem it necessary to further amend the
Shareholder Loan Agreement to re-align RegTech Italy's payment
obligations in accordance with the representations made by Mr.
Zamboni, given the amounts outstanding are already accruing
compounding interest rate of 15% per annum under the Side Letter
Agreement. No other amendments have been made to the terms of the
Shareholder Loan Agreement pursuant to the terms of the SLA Deed of
Amendment.
The entry by the Company and RegTech into the SLA Deed of
Amendment constitutes a material change to the terms of the
Shareholder Loan Agreement and therefore, the Independent Directors
(which excludes Alessandro Zamboni, who constitutes a "related
party" (as such term is defined in International Financial
Reporting Standards as adopted in the UK)) have complied separately
with the material related party transaction requirements under DTR
7.3. Accordingly, the Independent Directors approved the SLA Deed
of Amendment, and such Independent Directors consider such material
related party transaction in respect of the SLA Deed of Amendment
to be fair and reasonable from the perspective of the Company and
holders of ordinary shares of nominal value GBP0.20 each in the
capital of the Company ("Ordinary Shares") who are not a related
party.
Pursuant to the Side Letter Agreement, the Board retains the
option, on three business days' notice, to transfer the 2,250,000
existing warrants (each exercisable into one new Ordinary Share at
an exercise price of GBP0.20, or a cashless exercise basis) held by
RegTech Italy to the Company or a third party designated by the
Board (independent of Alessandro Zamboni), and any net proceeds
realised shall reduce the outstanding principal under the
Shareholder Loan Agreement.
As explained in the Company's announcement of 29 September 2023
(RNS Number: 0880O), the Board continues to review and monitor the
cashflow and working capital requirements of the Group on a prudent
basis and acknowledge that amount of funding drawn and outstanding
under the Shareholder Loan Agreement is required in relation
thereto . The Board is continuing to work on mitigation of any
risks relating to delays in receipt of the amount of funding drawn
and outstanding under the Shareholder Loan Agreement. The Board is
actively exploring alternative financing options for RTOP to
mitigate the potential impact on the Group's working capital
position that may arise from further delays in receipt of the
amount of funding drawn and outstanding under the Shareholder Loan
Agreement.
Business update
UK prospects:
Prior to launching UK marketing in 2024, RTOP has engaged with a
number of prospective UK clients and reached an advanced stage with
one in the Information Communications and Technology ("ICT")
industry - targeting a contract win of our first UK customer. The
traction the Company has received in initial meetings with
prospective UK clients demonstrates the market fit of the Orbit
Open Platform to help organisations with the challenge of going
beyond risk management and business continuity, to develop
resilient operations.
Market developments:
RTOP has been working closely with ABI Lab (European
Commission-funded banking consortium) and the Big-Four consultants
to develop a comprehensive Business Resilience Framework ("BRF").
RTOP's team has been responsible for providing expert input into
the BRF and creating a quick-start reference tool. The full BRF is
supported inside the Orbit Open Platform, thereby, in RTOP's view,
positioning the Orbit Open Platform as the leading solution for
operational resilience in banking Europe-wide.
RTOP continues to see significant momentum and enquiries driven
by Digital Operational Resilience Act (EU 2022/2554) ("DORA")
across Europe, the UK and also for US financial services entities
with operations in Europe, or ICT companies supplying services to
European financial services entities. RTOP has been working closely
with customers and major consultancies to ensure its clients can
meet their obligations under DORA using the Orbit Open Platform -
both refining methods and supporting functionality, and at the same
time, reinforcing RTOP's position as the leading solution for
operational resilience under DORA.
Partnerships:
RTOP has been showcasing its uniquely powerful, tight
integration with Everbridge Europe Limited ("Everbridge") for both
Emergency Mass Notification, and for Risk Intelligence, through
their Virtual Command Centre. Together, RTOP and Everbridge have
been providing unparalleled capabilities for dynamic management of
crisis and recovery situations, and have jointly hosted events in
Italy, with presentations from BPER, Unicredit and NEXI, and are
expanding our collaboration across Europe and into the UK, to
further showcase this solution to the large Everbridge customer
base and new prospective clients.
Whilst RTOP continues to work with Big-Four consultancies to
provide client solutions, in the UK the Company is expanding its
services through collaboration with Cyber Risk Management Group
(CRMG), a leading provider of cyber risk assessment, cyber
resilience and third-party risk management services. This ability
to support UK clients with methodology, onboarding and managed
services provides a complete service for operational resilience,
backed-up by a highly reputable, local services firm.
Competitive developments:
Further proving the importance of our proposition: the need for
a specialised and comprehensive operational resilience solution,
RTOP has in the last three months added a number of prospects to
our pipeline that have been attempting to use operational
resilience offerings (in particular, one of the most prevalent
information technology service management tools, and well-known
governance, risk and compliance platform) but have failed to
achieve a successful implementation. These prospective clients have
subsequently approached RTOP to evaluate Orbit Open Platform as a
leading dedicated solution. One of these is in advanced stages of
discussions.
For the purposes of UK MAR, the person responsible for arranging
release of this announcement on behalf of RTOP is Ian
Halliday-Pegg, Chief Executive Officer.
- Ends -
Enquiries:
RegTech Open Project plc
Ian Halliday-Pegg, CEO c/o Instinctif Partners
Instinctif Partners (Financial regtech@instinctif.com
PR) +44 (0)79 1717 8920
Guy Scarborough +44 (0)75 0002 7181
Bryn Woodward
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