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Koovs PLC (KOOV)

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Tuesday 19 December, 2017

Koovs PLC

Half-year Report

RNS Number : 7168Z
Koovs PLC
19 December 2017
 

19 December 2017                                          

 

 

Interim Results for the six months ended 30 September 2017

Koovs plc ("Koovs" or the "Company")

 

Focus on high quality sales delivering continued margin improvement

 

Koovs plc (AIM: KOOV), ("Koovs" or the "Company") the fashion-forward business focused on the young Indian e-commerce market, today announces its interim results for the six months to 30 September 2017.

 

Business Highlights

 

·      Gross Sales* at £7.9m for the period (H1 FY17: £7.9m); in line with India's ecommerce market which was flat, impacted by Demonetisation, the introduction of the Goods and Services Tax, and heavy discounting and marketing expenditure by sector peers

·      Quality of sales improved with markdown sales reduced to 20% of Sales (H1 FY17: 29%) in a market driven by high discounting

·      Trading Margin increased significantly to 18% (H1 FY17: 2%)

·      Average Order Value increased by 21% £17.00 (H1 FY17: £14.70)

·      Brand awareness increased to 21% (March 2017: 15%)

·      Sales and increase in brand awareness with significantly reduced marketing spend

·      International distribution agreements with Souq.com in Middle East and Simply Be in UK

·      Recent Forrester survey for customer experience ranked KOOVS.COM No.1 for "Best Customer Experience" among online-only retailers in India

·      Social media presence grew by 29% to 2.2 million followers (H1 FY17: 1.7m)

Financial Overview

 

·      Group Revenues at £3.9m for the period (H1 FY17: £4.0m)

·      Group gross margin improved from -20% to 0% (H1 FY17: -20%)

·      Operating costs reduced by 9% to £7.7m (H1 FY17: £8.4m)

·      Loss for the period reduced by 15% to £7.8m (H1 FY17: £9.1m)

·      Cash utilised in the period reduced by 44% to £6.8m (H1 FY17: £12.2m - included a £3.2m media prepayment)

·      Funding of £8.9m received in the period through the issuance of 6% convertible loan notes

 

* Gross Sales (Gross Order Value) order value placed through the KOOVS.COM website including taxes

 

 

Trading Update & Outlook

 

With modest additional marketing spend, the important month of November delivered a significant year on year improvement across key metrics, with Sales up by 17% to £1.7m and website traffic up 43%. However, marketing expenditure is currently significantly down due to the ongoing funding requirements of the Group, which the Company expects to affect FY18 sales overall. Additional marketing expenditure is conditional upon the timing of closure of the funding programme announced in July 2017, which the Company continues to expect to close shortly.

 

Koovs remains well placed to maximise the future growth of the Indian ecommerce market and expects the market to return to growth in the next financial year.

 

Mary Turner, CEO, said: 

"I am pleased with the progress we have made in our business fundamentals. Year on year Trading Margin has been improved from 2% to 18% and Brand Awareness is up from 15% to 21%. In addition, Koovs is now ranked No1 for customer experience by Forrester Research and has the highest Net Promotor Score in the fashion vertical (RedSeer) ahead of Amazon and Flipkart.

"It has been a challenging year generally for the market, however with these strong business fundamentals, Koovs is well positioned to capitalise further on the growth opportunity."

 

 

Definitions

Sales (Gross order value):     Total value of orders placed by consumers on the KOOVS.COM website for products supplied by the Group.

Performance marketing:        Pay per click marketing e.g. Google, Facebook

Trading margin:                    Implied retail gross margin that would be reported in the companies accounts if Koovs India were able to ship products directly to the end consumer

Notes:

Gross Order Value is the value of the orders placed on KOOVS.COM.  Group Revenues are after returns, tax and the discount paid to Marble E-Retail Pvt Ltd. to cover delivery, warehousing and customer care.  Marble is used by Koovs in compliance with India's foreign direct investment rules to deliver and provide customer support for the goods purchased on KOOVS.COM.

Sterling equivalent of Indian Rupee values at exchange rates ruling in the relevant period or on the relevant date.

The information presented in this report has not been audited by the Company's auditors.

 

 

Notes to Editors

The Company is headquartered in London, where the majority of its design and buying team is based, with all other operational functions based in India.

 

For further information, please contact:


Koovs plc

Mary Turner/Rob Pursell

 

Tel: +44 (0) 20 7151 0170

Peel Hunt LLP


Dan Webster / George Sellar /

Jock Maxwell Macdonald (ECM)

 

Tel: +44 (0) 20 7418 8900

Media Enquiries - Headland


Lucy Legh / Rob Walker / Charlie Twigg

Tel: +44 (0) 20 3805 4822

 

 

The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.


 

 

CHAIRMAN'S STATEMENT FOR THE SIX MONTHS TO 30 SEPTEMBER 2017

Koovs occupies a market leading position within India's e-commerce market, which is forecast to grow five-fold to $3.5 billion over the next few years.

While the short-term disruption created by demonetisation and the introduction of India's Goods and Services Tax caused the Indian online fashion market to remain flat in the current financial year, I am more excited than ever about the company's long-term growth prospects.

Koovs is in the right place at the right time, underlined by the fundamental demographic and macroeconomic progress India will make over the coming years and the remarkable digital transformation it is undergoing.

In the six months to 30 September 2017 we have continued to build on the key strengths of the business in its brand, products and customer service. It is a credit to the team that in a flat market with high levels of discounting we have been able to increase our brand awareness and customer satisfaction at the same time as substantially increasing our margins.

Koovs remains well placed to maximise the future growth of the Indian ecommerce market and deliver its strategic objectives set out in the Annual report dated March 2017.

 

Fund raising

During the period £8.9m out of a total possible £18.9m of convertible loan notes has been raised as part of the funding programme announced in July 2017.

The Company remains in advanced negotiations and expects to announce the successful conclusion of this additional funding in due course.

 

Outlook

We expect the market to return to growth in the next financial year.  As such we intend to remain resolutely focused on our strategy in order to capitalise on the opportunity represented by the ecommerce market in India. 

 

 

 

Waheed Alli

Chairman

19 December 2017

 

 

INTERIM REVIEW

 

Strategy

Koovs' commercial strategy and goal to become India's number one international fashion destination is aimed at rapidly building scale in the business.  We will do this by following the strategic objectives detailed in the latest annual report for the year to March 2017 and listed below.

 

Ø Expand product range

Ø Engage customer though content

Ø Amplify the brand

Ø Extend territories

 

We will provide the most engaging customer experience through fashion and lifestyle related content and develop a seamless experience across web, mobile and tablet.

Further, we will become the undisputed brand for affordable international style for the fashion lover in India by amplifying our voice to become "famous for fashion" through extensive and targeted marketing campaigns across multiple channels in India's major cities.   

 

Trading performance [and KPIs]

Sales generated on the KOOVS.COM website during the six months to 30 September 2017 were in line with H1 FY17 at £7.9m (INR 651.7m). An improved product offering with more efficient buying has increased full price and promotional sales by 11% to £6.3m (INR 522.2m), and reduced markdown sales by 31% to £1.6m (INR 129.5m).

With more focus on profitable sales the trading margin (for sales generated on Koovs.com) for the six months to 30 September 2017 was 18.4%, an increase from 1.6% in H1 FY16.  Allowing for the discount on wholesale sales to Marble, to cover delivery and warehousing costs, the gross margin for the Group for the six months to 30 September 2017 was -0.3%, a significant improvement from -20.1% in H1 FY16

Marketing activities in the period delivered strong results:

·      With a limited increase in costs (£0.3m) brand marketing programs lifted Koovs' brand awareness from 13% at the end of last financial year to 21% by 30 September 2017.   

·      Performance marketing (pay per click) efficiency also improved. With improved bidding strategies, and supported by the increased brand awareness, average cost per order reduced by 36%.

 

Other costs in the period were in line with last year. During the six months to 30 September 2017 a number of cost saving initiatives were introduced.  Key amongst these were the full outsourcing of warehouse operations as well as a restructuring which reduced staff numbers by 21%.  The full financial impact of these initiatives will be seen in the second half of the year. 

Customer satisfaction has continued to improve with two surveys published in November showing Koovs has the highest customer satisfaction ratings in the online fashion sector.  A widely reported survey by Forrester had Koovs rated higher than all competitors including Amazon and Flipkart.  This was also corroborated by a separate survey conducted by Redseer consulting on behalf of the Company. 

Over the period, compared with the previous period, we have achieved the following:

 


H1 FY18

H1 FY17

%

Visits to Koovs.com site

32.1m

38.0m

-15%

Active customers

446,000

431,000

+4%

Social Followers

2.2m

1.7m

+29%

 

 

Financial results, cash flow and funds

Revenue in the period, representing the wholesale price of products sold was £3.94m / INR 328.7m (Six months to 30 September 2016: £3.99m / INR 366.7m). Gross loss in the period was £0.012m / INR 1.1m (Six months to September 2016: £0.80m / INR 73.7m).  Gross loss % in the period was -0.3% (Six months to September 2016 -20.1%).

After cost of sales and overhead costs, the net loss before tax in the period was in line with expectations at £7.77m / INR 647.4m (Six months to 30 September 2016: £9.09m / INR 835.2m). The reduction in net loss resulted from the improvement in gross loss together with reduced operating expenses due to increased efficiencies in marketing spend.

At 1 April 2017, including both short- and long-term deposits, the business had access to £7.47m / INR 606.0m (2016: £2.54m / INR 241.5m) for the purposes of funding the business.

During the period, £6.77m / INR 564.4m (Six months to 30 September 2016: £12.16m / INR 1,118.2m) was utilised in funding losses and additional working capital.  £8.90m (£9.3m in cashflow due to movement in exchange rates) / INR 779.6m of additional funds was raised in the period through the issuance of convertible loan notes.

At 30 September 2017, including both short- and long-term deposits, the business had access to INR 802.9m / £9.16m (30 September 2016: INR 667.9m /£7.74m) for the purposes of funding the business. The funds are held in term deposits or current accounts, mainly in India.  Additionally, £5.90m (INR 516.8m) of marketing funds have been prepaid to secure significantly reduced media rates, and been recorded in the Statement of Financial Position under "Trade receivables, other receivables, prepayments and other assets". 

 

Principal risks and uncertainties

The Company's business activities, together with the factors likely to affect its future development, financial position, financial risk management objectives, details of its financial instruments and its exposures to price, credit, liquidity and cash flow risk are described in the Chairman's Statement and the Strategic Report published in the annual report for the period ended 31 March 2017.

The board considers the principal risks and uncertainties facing the Group to be unchanged from those set out in the Annual Report and Accounts for the period ended 31 March 2017, summarised as follows:

·      Funding risk, including the ability of the Board to secure the funding required to implement its plans - see note 1.2 below;

·      Market and economic risks, including the economic climate and competition in India;

·      Financial risks, including interest rate and currency risk;

·      Technological risk;

·      Warehouse disruption; and

·      Reliance on key personnel.

These are set out in detail in the Group's Annual Report and Accounts for the period ended 31 March 2017, a copy of which is available on the Group's website.

Capital Raising

In July 2017 the Board announced its intention to raise up to £18.9m in convertible loan notes.  As at the date of this report £8.9m has been raised (Note 7) and the Company remains in advanced negotiations and expects to announce the successful conclusion of additional funding in due course.

 

 

On behalf of the board of directors    

 

 

Mary Turner                                                      Robert Pursell

Director                                                            Director

19 December 2017                                            19 December 2017


Consolidated Income Statement

for the six month period to 30 September 2017

 








MEMORANDUM


Notes

1 April 2017 to 30 Sept 2017

Unaudited


1 April 2016 to

30 Sept 2016

Unaudited



1 April 2017 to 30 Sept 2017

 


1 April 2016 to 30 Sept 2016

 



INR million


INR million



£000


£000











Revenue

3

328.7


366.7



3,944


3,989

Cost of sales


(329.8)


(440.4)



(3,956)


(4,791)

Gross loss


(1.1)


(73.7)



(12)


(802)











Operating expenses


(638.8)


(776.7)



(7,664)


(8,449)











Operating loss


(639.9)


(850.4)



(7,676)


(9,251)





















Finance income


9.2


19.1



110


208

Finance expense


(16.7)


(3.9)



(200)


(42)











Loss for the period before tax


(647.4)


(835.2)



(7,767)


(9,085)











Tax expense

4

-


-



-


-











Loss  for the period


(647.4)


(835.2)



(7,767)


(9,085)











Loss attributable to:










Equity holders of the Company


(647.4)


(806.4)



(7,767)


(8,772)

Non-controlling interests


-


(28.8)



-


(313)

Loss for the period


(647.4)


(835.2)



(7,767)


(9,085)











Loss per share










Basic and diluted

5

INR(3.7)


INR(5.7)



(4.4)p


(6.2)p

 

All results relate to continuing operations.



 

Consolidated Statement of Comprehensive Income

for the six month period to 30 September 2017







MEMORANDUM

 


1 April 2017 to 30 Sept 2017

Unaudited


1 April 2016 to

30 Sept 2016

Unaudited



1 April 2017 to 30 Sept 2017

 


1 April 2016 to

30 Sept 2016

 


INR million


INR million



£000


£000

 










 

Loss for the period

(647.4)


       (835.2)



(7,767)


(9,085)

 










 

Other comprehensive income









 

Items that may be reclassified to income statement in subsequent periods:









 

Currency translation differences from operations denominated in currencies other than Rupee - equity holders of the parent, net of tax

1.7


(11.0)



21


(120)

 

Items that will not be reclassified to income statement in subsequent periods:









 

Re-measurement of defined benefits plan, net of tax

-


-



-


-

 

Other comprehensive income, net of tax

 

1.7

 


(11.0)



21


(120)

 










 

Total comprehensive loss for the period

(645.7)


(846.2)



(7,747)


(9,205)

 










 










 

Total comprehensive loss attributable to:









 

Equity holders of the Company

(645.7)


(817.4)



(7,747)


(8,892)

 

Non-controlling interests

-


(28.8)



-


(313)

 

Total loss recognised in the period

(645.7)


(846.2)



(7,747)


(9,205)

 











All results relate to continuing operations.

 


Consolidated Statement of Financial Position

at 30 September 2017






MEMORANDUM


30 September 2017

Unaudited


31 March

2017

audited


30 September 2017


31 March

2017

 


INR million


INR million


£000


£000

Non-current assets








Intangible assets

627.9


627.5


7,166


7,736

Property, plant & equipment

22.2


18.5


254


228

Non-current financial assets

6.8


8.7


78


107









Current assets








Inventories

219.5


187.9


2,505


2,316

Trade receivables, other receivables, prepayments and other assets

662.2


710.8


7,557


8,762

Bank deposits

327.0


445.5


3,732


5,492

Cash and cash equivalents

493.0


200.5


5,626


2,472

















Non-current liabilities








Loans and Borrowings

(603.2)


-


(6,884)



Other Long-term liabilities

(13.5)


(11.7)


(155)


(144)









Current liabilities








Bank short-term borrowing

(23.9)


(48.7)


(273)


(600)

Trade and other payables

(337.7)


(310.2)


(3,854)


(3,824)

















NET ASSETS

1,380.2


1,828.8


15,753


22,545









Capital and reserves








 

All results relate to continuing operations.                                  


Consolidated Statement of Cash Flows

for the six month period to 30 September 2017







MEMORANDUM


1 April 2017 to 30 Sept 2017

Unaudited


1 April 2016 to 30 Sept 2016

Unaudited



1 April 2016 to 30 Sept 2017


1 April 2016 to 30 Sept 2016


INR million


INR million



£000


£000

Operating activities



               






Loss for the period

(647.4)


(835.2)



(7,767)


(9,085)

Adjustments to reconcile profit for the period to net cash flow from operating activities









Depreciation and amortisation

5.6


6.8



67


73

Share based payments

                   25.1


                   12.6



301


138

Other non-cash items

0.2


                      1.1



                    3


                 12

Interest income and finance expense

7.5


                  (15.2)



90


(166)

Working capital adjustments:









(Increase)/ Decrease in inventories

(31.5)


3.0



(378)


33

Decrease/(Increase) in trade and other receivables

48.6


(363.9)



583


(3,959)

Increase in trade and other payables

27.5


72.6



330


790

Cash flows from operations

(564.4)


(1,118.2)



(6,771)


(12,164)

Income tax paid

-


-



-


-

Net cash out flow from operating activities

(564.4)


(1,118.2)



(6,771)


(12,164)

Investing activities









Acquisition of remaining shares in Koovs India

-


(869.7)



-


(9,039)

Withdrawals: original maturity greater than 12 months

1.9


-



22


-

Deposits: original maturity less than 12months

118.5


(372.2)



1,422


(4,049)

Purchase of plant and equipment

                    (4.5)


                  (32.8)



                (54)


              (357)

Purchase of intangible assets

(2.8)


                    (0.5)



                (34)


                  (5)

Interest income received

9.2


14.4



   110


   157

Net cash in/(out) flow from investing activities

122.3


(1,260.8)



1,467


(13,293)










Net cash in flow from financing activities

748.1


2,447.6



8,976


25,259










Net change in cash and cash equivalents

306.1


68.6



3,672


(198)


Notes

1.    Basis of preparation and accounting policies

1.1.       Basis of preparation

These interim consolidated financial statements have been prepared using accounting policies based on International Financial Reporting Standards (IFRS and IFRIC Interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 31st March 2017 Annual Report. The financial information for the half years ended 30th September 2017 and 30th September 2016 does not constitute statutory accounts within the meaning of Section 434 (3) of the Companies Act 2006 and both periods are unaudited.

          The annual financial statements of Koovs plc are prepared in accordance with IFRS as adopted by the European Union. The comparative financial information for the year ended 31st March 2017 included within this report does not constitute the full statutory Annual Report for that period. The statutory Annual Report and Financial Statements for 2017 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for the year ended 31st March 2017 was unqualified, but did include a reference to the uncertainty surrounding going concern, to which the auditors drew attention by way of emphasis and did not contain a statement under 498(2) - (3) of the Companies Act 2006.

           Going Concern for the six-month period to 30th September 2017 is considered in note 1.2.

          The same accounting policies, presentation and methods of computation are followed in these interim consolidated financial statements as were applied in the Group's 31st March 2017 annual audited financial statements. In addition, the IASB have issued a number of IFRS and IFRIC amendments or interpretations since the last Annual Report was published. The directors have not yet considered whether any of these will have a material impact on the Group. The Board of Directors approved this interim report on 22nd December 2017.

1.2.       Going concern

This Interim Report has been prepared on the assumption that the business is a going concern.

The Company's business activities, together with the factors likely to affect its future development, financial position, financial risk management objectives, details of its financial instruments and its exposures to price, credit, liquidity and cash flow risk are described in the Chairman's Statement and the Strategic Report set out in the Annual Report for the year ended 31 March 2017.

In May 2017 the Board announced its intention to raise up to £18.9m in convertible loan notes.  As at the date of this report £8.9m has been raised (Note 7) and the Company remains in advanced negotiations and expects to announce the successful conclusion of this additional funding in due course.

The directors have concluded that as the additional funding has not been contractually secured at the date of this report, there exists a material uncertainly which may cast doubt as to the Groups ability to continue as a going concern. 

However, given the existing negotiations and the Company's track record of raising funding when required, the directors believe the Group will to continue as a going concern for the foreseeable future.  The interim financial statements do not include the adjustments that would be required if the Group were unable to continue as a going concern.   

1.3.       Reporting currency

To assist UK-based readers of the accounts, translations into Sterling have be supplied on a memorandum basis to allow a clear understanding of the results and financial position of the business.  The memorandum information does not form part of the financial reporting of the Group representing, as they do, simple translations of the Rupee information.  The exchange rates used are shown in the table below. 


6 Months to 30 Sept 2017

INR/£

6 months to 30 Sept 2016

INR/£

Year to 31 Mar 2017

INR/£

Balance Sheet

87.6

86.3

81.1

Trading statements

83.4

91.9

87.7

2.    Revenue

All of the Group's revenue is generated by the Group's subsidiary in India through its operations as a supplier of branded fashion products.  The chief operating decision maker is the Chief Executive Officer who makes resource allocation decisions based on Group management accounts and operating reports for the entire Group.  The Group therefore represents a single cash generating unit and a single operating segment.

All of the Group's revenue in both periods was generated in the Republic of India.

3.    Taxation

No income tax liability arose during the six months to 30 September 2017 and 2016, or the year ended 31 March 2017.  There is no tax charge or credit relating to items charged or credited to other comprehensive income.

4.    Earnings Per Share

Basic earnings per share is calculated by dividing the earnings attributable to the owners of the Parent Company by the weighted average number of ordinary shares in issue during the period.  Diluted earnings per share is calculated by amending the weighted average number of ordinary shares in issue during the period for the effect of dilutive share options in issue.


6 months to

30 Sept 2017

Unaudited

6 months to

30 Sept 2016

Unaudited

Weighted average shares in issue for basic earnings per share

175,383,691

142,630,139

Effect of convertible loan notes

22,250,000

-

Weighted average shares in issue for diluted earnings per share

197,633,691

142,630,139




Earnings attributable to the owners of the Parent (INR million)

(647.4)

(806.4)




Basic loss per share (Rupees)

(3.7)

(5.7)




Memorandum basic loss per share (pence)

                    (4.4)

                    (6.2)




 

The effect of the share options in issue and the convertible loan notes are anti-dilutive and therefore no adjustment has been made to the weighted average shares in issue when calculating diluted earnings per share.   

 

6.    Cash and bank deposits

Cash and bank deposits




MEMORANDUM


30 Sept 2017

Unaudited

30 Sept 2016

Unaudited


30 Sept 2017

 

30 Sept 2016

 


INRm

INRm


£000

£000

Current assets:






Bank deposits with an original maturity of more than 12 months

1.0

-


11

-

Bank deposits with an original maturity of not more than 12 months

326.0

477.3


3,721

5,532

Cash at bank and in hand

493.0

204.7


5,626

2,373


820.0

682.0


9,358

7,905







Non-current assets:






Security deposits

6.8

8.7


78

100







Bank overdrafts

(23.9)

(22.8)


(273)

(265)

Total net cash and bank deposits

802.9

667.9


9,164

7,740

 





MEMORANDUM


30 Sept 2017

Unaudited

30 Sept 2016

Unaudited


30 Sept 2017

 

30 Sept 2016

 


INRm

INRm


£000

£000

Cash and cash equivalents






Cash at bank and in hand

493.0

204.7


5,626

2,373

Bank overdrafts

(23.9)

(22.8)


(273)

(265)

Total cash and cash equivalents

469.1

181.9


5,353

2,108

 

Cash and cash equivalents comprise cash in hand and cash held in bank accounts from which deposits can be drawn without any substantial delay and which have not been deposited under any agreement for a fixed term, net of any bank overdrafts which are utilised for operational cash flow purposes.

7.    Convertible Loan Note

 

On the 18th August 2017, the Company issued a 6% convertible loan note at a nominal value of £8.9m. 

The value of the liability component and the equity conversion component were determined at the date the instrument was issued. The fair value of the liability, including non-current borrowings, at inception was calculated using an assumed market interest rate of 22.5% for an instrument without a conversion option. 

 

A Summary of the key terms of the loan notes is as follows

 

Term

24 months from completion of the issue of the Convertible Loan Notes

Conversion Price

The Convertible Loan Notes can be converted into Koovs Ordinary Shares at a conversion price of £0.40 per share

Redemption

 

The Convertible Loan Notes can be redeemed:

·      at the election of the noteholders following a material breach by the Company of the terms of the Convertible Loan Note instrument;

·      automatically on the occurrence of certain insolvency events; and

·      otherwise, automatically at the end of the two year term

Conversion Rights

The Convertible Loan Notes can be fully converted at any time by the debenture holder giving to the Company 3 months' prior written notice

Security

All amounts falling due under the Convertible Loan Notes will be secured by a debenture constituting a first-ranking fixed and floating charge over all the assets of the Company (the "Debenture")

Coupon & Payment

3-month sterling LIBOR + 6% per annum, calculated monthly and rolled up (but not compounded) with payment at the end of the Term unless previously converted, in which case accrued interest is paid in kind in Ordinary Shares at the Conversion Price or at the point of conversion.

Conversion by the Company

The Company will have the right to require the holder to convert the Convertible Loan Notes into equity at the Conversion Price if:

a)   During the Term the 3-month volume weighted average price of Koovs Ordinary Shares is equal to, or in excess of, £0.75; or

b)   At the end of the Term if the 5-day volume weighted average price of Koovs Ordinary Shares is equal to, or in excess of, £0.45.

"Most Favoured Nation" basis

Following the issue of the Convertible Loan Notes, if the Company proposes to issue any convertible debt securities or instruments ("New Convertibles") on terms as to either the Coupon or the Conversion Price that are more favourable to subscribers of the New Convertibles than to the holders of the Convertible Loan Notes, the holders of the Convertible Loan Notes shall have the right to require the Company to amend the terms of the Convertible Loan Notes so as to be at least equivalent in those aspects to the New Convertibles subject in all cases to all requisite approvals from shareholders and regulatory authorities.

 

 

8.    Cautionary statement

This document contains certain forward-looking statements relating to Koovs plc ('the Company'). The Company considers any statements that are not historical facts as "forward-looking statements". They relate to events and trends that are subject to risk and uncertainty that may cause actual results and the financial performance of the Company to differ materially from those contained in any forward-looking statement. These statements are made by the directors in good faith based on information available to them and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

 


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