Result of Fundraising and Total Voting Rights

Certain information contained within this Announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ("MAR") as applied in the United Kingdom. Upon publication of this Announcement, this information is now considered to be in the public domain.

5 August 2022

Cornerstone FS plc

("Cornerstone" or the "Company" or the "Group")

Result of Fundraising and Total Voting Rights

Cornerstone FS plc (AIM: CSFS), the cloud-based provider of international payment, currency risk management and electronic account services to SMEs, is pleased to announce that, further to its announcement at 6.14 p.m. on 4 August 2022, (the "Launch Announcement"), it has completed the Placing and issue of a new convertible loan note (together the "Fundraising"), which is now closed. The Fundraising totalled approximately £1.085 million.

A total of 13,230,765 new ordinary shares of one penny each in the capital of the Company (the "Placing Shares") have been placed with existing and new investors at a price of 6.5 pence per Placing Share, raising gross proceeds of approximately £860k.

In addition, the Company has raised £225,000 by the issue of an unsecured convertible loan note ("Loan Note") to a placee. The Loan Note has a term of two years and does not bear interest.  Application will be made to the FCA to allow the placee to increase their shareholding to over 10%, at which time the Loan Note will automatically convert into new ordinary shares of one penny each at an exercise price of 6.5 pence per share (being the Placing Price).  Application will be made to admit these new ordinary shares to trading on AIM upon conversion.  Further announcements will be made in due course.

Issue of shares pursuant to share incentive arrangements

Further to the agreement to amend the terms of certain share incentive arrangements made between the Board and Robert O'Brien, as described in the Launch Announcement, the Company confirms that Mr O'Brien is entitled to £2,940,000, to be paid over the next three years and to be satisfied as follows:

1.    the issue of 4,286,818 new ordinary shares in the capital of Cornerstone (the "CSFS Shares") at a price of 10 pence per share for an aggregate value of £428,682, equivalent to 9.9% of the enlarged issued share capital of Cornerstone;

2.    the issue of 5,113,182 new ordinary shares at a price of 10 pence per share (being the sum calculated by deducting from £940,000 the value of the CSFS Shares issued in 1, above), such shares to be issued following receipt from the FCA of permission for Mr O'Brien to increase his holding to more than 9.9% of the issued share capital of the Company); and

3.    the issue of a loan note to Mr O'Brien with a value of £2 million, carrying a coupon of 6% and being repayable by the Company on 31 July 2025.

Any shares issued to Mr O'Brien as described above are subject to a 12-month lock-in from the date of issue and, for a further period of 12 months thereafter, the disposal of any interests in the shares can only be effected on an orderly market basis through the Company's broker.

In addition, and as described in the Launch Announcement, the three senior members of Mr O'Brien's team have also agreed to amend the terms of their incentive arrangements in line with the changes agreed with Mr O'Brien and will receive £210,000 in aggregate to be shared between them, and which will be satisfied by the allotment and issue to them of 2,100,000 new ordinary shares (the "Team Shares").

Admission and Total Voting Rights

Application will be made for the Placing Shares, the CSFS Shares and the Team Shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will take place on or around 8.00 a.m. on 12 August 2022. The Placing Shares,  the CSFS Shares and the Team Shares, which will rank pari passu with the existing ordinary shares, will be issued under the Company's share allotment authority and shareholders pre-emption disapplication granted at its Annual General Meeting held on 25 July 2022.

Following Admission, the Company's issued share capital will comprise 43,301,199 ordinary shares, with no shares held in treasury, and therefore the total number of voting rights in the Company will be 43,301,199. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Disclosure Guidance and Transparency Rules of the FCA.

Elliott Mannis, Cornerstone Chairman, commented:

"We are pleased to have successfully raised £1.085 million in this Fundraising which will provide additional working capital for the Group. We thank our existing shareholders for their continued support and we welcome our new investors to our shareholder register. Moving forward we remain focused on executing upon our strategy and generating value for shareholders."

Enquiries

About Cornerstone FS plc

Cornerstone FS plc is a payments focused fintech business that makes managing currency simple for SMEs. It provides international payment, currency risk management and electronic account services using a proprietary cloud-based multi-currency payments platform. These services are delivered directly and via white label partners on a SaaS basis to UK-based SMEs that engage in international trade. Cornerstone also serves some high-net worth individual clients.

Headquartered in the City of London with offices in Tunbridge Wells and Dubai, Cornerstone is admitted to trading on AIM under the trading symbol 'CSFS'. For more information, please visit www.cornerstonefs.com.