THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (596/2014/EU) AS THE SAME HAS BEEN RETAINED IN UK LAW AS AMENDED BY THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN UK MAR) WERE TAKEN IN RESPECT OF CERTAIN OF THE MATTERS CONTAINED WITHIN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF INSIDE INFORMATION (AS DEFINED UNDER UK MAR). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THOSE PERSONS THAT RECEIVED INSIDE INFORMATION IN A MARKET SOUNDING ARE NO LONGER IN POSSESSION OF SUCH INSIDE INFORMATION, WHICH IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Distil PLC

(the "Company")

Placing and Subscription for, in aggregate, 541,666,675 new Ordinary Shares at 0.12 pence per share with Placing Warrants at 0.36 pence per share; Related Party Transactions; Notice of General Meeting; Change of Broker

High proportion of fundraising committed from two leading investors: Grain GmbH,  and Dr Graham Cooley

Transaction Highlights:

·    Placing and Subscription to raise £0.65 million (before expenses) through the issue of 541,666,675 new Ordinary Shares at the Issue Price

·    Grain GmbH, which is connected to Roland Grain, a non-executive director of the Company, has agreed to invest £200,000 for 166,666,600 new Ordinary Shares in the Subscription

·    Dr Graham Cooley is investing £90,000 for 75,000,000 new Ordinary Shares via the Placing

·    First Tranche of fundraising of £0.108 million allotted from existing authorities

·    Second Tranche of fundraising of £0.542 million subject to approval at General Meeting

·    Appointment of Allenby Capital as broker to the Company

Distil plc (AIM:DIS), owner of premium drinks brands RedLeg Spiced Rum, Blackwoods Gin and Vodka, TRØVE Botanical Vodka and Blavod Black Vodka, is pleased to announce it has conditionally raised £0.65 million (before expenses) through a Placing and Subscription (together, the "Fundraising").

The Fundraising will provide working capital, including to fund production and promotion for the important Christmas season, production of promotional Limited Edition stock; development of brand range extensions; major account listings for On & Off Trade; and Ready to serve developments.

The Company has conditionally placed through its new joint broker, Allenby Capital Limited, 358,333,475 new ordinary shares of 0.1p each ("Ordinary Shares") in the capital of the Company (the "Placing Shares") at a price of 0.12p per Placing Share (the "Issue Price") to raise £0.43 million, before expenses (the "Placing").

The Company also announces a conditional subscription of 183,333,200 new Ordinary Shares (the "Subscription Shares", and together with Placing Shares, the "Fundraising Shares") at the Issue Price with existing shareholders to raise £220,000, before expenses (the "Subscription").

Participation in the Subscription by Grain GmbH and Don Goulding (Executive Chairman) are related party transactions under the AIM Rules. The Independent Director, having consulted with SPARK Advisory Partners, the Company's nominated adviser, considers that the terms of the Subscription by Grain GmbH and Mr Goulding are fair and reasonable insofar as Shareholders are concerned.

The Fundraising Shares will represent approximately 37.28 per cent. of the Enlarged Share Capital following Second Admission.

The Issue Price represents a discount of approximately 40 per cent. to the Closing Price of 0.20 pence per Ordinary Share on 20 September 2024, being the last practical date prior to the date of this announcement.

Don Goulding, Executive Chairman of the Company, commented:

"I am pleased to announce a successful round of fundraising and thank our shareholders for the continued support shown to the business.

This funding will support working capital and brand activation over the key trading period October through December and enable us to compete as we seek to expand distribution in 2025.

Fee Shares

In addition to the Fundraising Shares, 6,250,000 new Ordinary Shares are to be issued at the Issue Price, conditional upon Second Admission, to an adviser in settlement of amounts owed by the Company.

Change of Broker

The Company announces the appointment of Allenby Capital Limited as broker, with immediate effect.

Notice of General Meeting

A General Meeting to approve the resolutions (the "Resolutions") required to implement the Fundraising is to be held at Temple Chambers, 3-7 Temple Avenue, London EC4Y 0DT at 10.00 a.m. on 9 October 2024. A detailed timetable of events is set out at the bottom of this announcement.

Copies of a Circular convening a General Meeting for 10.00 a.m. on 9 October 2024 will be sent to shareholders later today and will shortly be available on the website of the Company at http://www.distil.uk.com/investors.

Extracts from the Circular are set out below.

For further information:

Extracts from the Circular:

"Letter from the Chairman of Distil

1.    Introduction

The Company announced on 23 September 2024 that it had conditionally raised £650,000, before expenses, by way of a placing of 358,333,475 Placing Shares and subscription for 183,333,200 Subscription Shares, all at a price of 0.12 pence per New Ordinary Share. The fundraising comprises:

·      a firm placing of 90,511,381 First Tranche Placing Shares to raise £108,614 (before expenses) to be issued pursuant to the Company's existing authorities to issue and allot equity securities on a non-pre-emptive basis: and

·      a conditional placing of 267,822,094 Second Tranche Placing Shares to raise £321,387 (before expenses) and a conditional subscription for 183,333,200 Subscription Shares to raise £220,000, which are subject to Shareholders' approval at the General Meeting.

The Issue Price represents a discount of approximately 40 per cent. to the Closing Price of 0.20 pence per Ordinary Share on 20 September 2024, being the last practical date prior to the date of the Announcement. Placing Warrants over 1,095,833,350 shares will also be issued to, inter alia, participants in the Placing and the Subscription.

The Placing Shares and Subscription Shares will represent approximately 37.28 per cent. of the Company's Enlarged Share Capital. The First Tranche Placing Shares have been placed conditional on First Admission (which is expected to become effective, with dealings in the First Tranche Placing Shares to commence, on or around 26 September 2024). The Second Tranche Placing Shares have been placed, and the Subscription Shares have been subscribed for, conditional, inter alia, on the passing of the Resolutions being proposed at the General Meeting and upon Second Admission (which is expected to become effective, with dealings in the Second Tranche Placing Shares and Subscription Shares to commence, on or around 11 October 2024). Neither the Placing nor the Subscription have been underwritten.

For the Second Tranche Placing and the Subscription to proceed, the Company requires Shareholders' approval to authorise the Directors to allot the Second Tranche Placing Shares, the Subscription Shares and the Fee Shares, to issue the Placing Warrants and to disapply statutory preemption rights in relation to the issue of the Second Tranche Placing Shares, the Subscription Shares, the Fee Shares and the Placing Warrants.

I am therefore writing to provide you with details of the Proposals, and to give you notice of the General Meeting at which the resolutions to authorise the Directors to allot and issue, and disapply the statutory pre-emption provisions in respect of ,inter alia, the Second Tranche Placing Shares, the Subscription Shares, the Fee Shares and the Placing Warrants will be put to Shareholders. The General Meeting is to be held at 10.00 a.m. on 9 October 2024 and the formal notice of the General Meeting is set out at the end of this document.

2.    Background to and reasons for the fundraising

On 14 August 2024 the Company issued a trading update in which the Board advised that:

"The business had anticipated lower sales in the first four months of the year due to phasing trends, however the results achieved sit below expectations. In light of this, we have revised our expectations for the full year which, despite the disappointing performance year to date, still anticipate revenue growth versus 2023.

The global alcohol market has been facing persistent challenges in recent years, with global drinks industry data service, IWSR, recording a decline in global beverage alcohol volumes in 2023 for the first time in 30 years, with difficulties continuing into 2024.

The decline has been driven by an extraordinarily challenging economic environment, as consumers are faced with ongoing inflationary pressures which are putting a strain on spending. While this is an issue affecting all global markets, for 2024, this has been exacerbated in the UK by the poor weather, leading to further curbs on socialising both in and out of home.

The effects of these changes to consumer spending have been felt throughout the drinks industry, across all arms and at all levels, including our business.

Q1 and July trading was considerably softer than expected and has required the business to pivot in order to drive volumes across our brands through increased consumer facing activity. This has included an increase in promotional activity to drive awareness and trial, as well as to secure key on-trade listings, the benefits of which we expect to begin to see once the market shows signs of recovery.

This backdrop has created an immediate short-term funding need within the business and the Board is currently exploring funding options to address this need."

Having consulted with major shareholders and brokers the Company has been able to agree to raise £650,000 by way of an issue of new Ordinary Shares in the Company. The Company has obtained the support of major shareholders Roland Grain (via Grain GmbH) and Dr Graham Cooley, who have each agreed to subscribe in the Placing or Subscription.

3.      Details of the Placing

The Placing has conditionally raised approximately £430,000 (before expenses) for the Company by the issue of the Placing Shares at the Issue Price with investors.

The Placing

The Placing is being conducted in two tranches because the Company currently has limited shareholder authority to issue new Ordinary Shares for cash on a non-pre-emptive basis. Details of the two tranches of the Placing are set out below.

First Tranche Placing

The conditional placing of the First Tranche Placing Shares at the Issue Price has raised  £108,614 (before expenses) for the Company, within the Company's existing share allotment authorities which were granted at the Company's annual general meeting held on 9 July 2024.

The First Tranche Placing is conditional, inter alia, upon:

(a)         the Placing Agreement not having been terminated in accordance with its terms; and

(b)        admission of the First Tranche Placing Shares to trading on AIM becoming effective by no later than 8.00 a.m. on 26 September 2024 (or such later time and/or date as the Company, SPARK and Allenby Capital may agree (being no later than 8.00 a.m. on 10 October 2024)).

Second Tranche Placing

The conditional placing of the Second Tranche Placing Shares at the Issue Price has raised £321,387 (before expenses).    

The Second Tranche Placing is conditional, inter alia, upon:

(a)         the passing of the Resolutions at the General Meeting;

(b)        the Placing Agreement not having been terminated in accordance with its terms;

(c)         completion of the Subscription; and

(d)        admission of the Second Tranche Placing Shares, the Subscription Shares and the Fee Shares to trading on AIM becoming effective by no later than 8.00 a.m. on 11 October 2024 (or such later time and/or date as the Company, SPARK and Allenby Capital may agree (being no later than 8.00 a.m. on 25 October 2024)).

The Placing is not being underwritten.

The Placing will result in the issue of 358,333,475 New Ordinary Shares representing approximately 24.66 per cent. of the Enlarged Share Capital. The Placing Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares on Second Admission.

4.      Details of the Subscription

The Subscription has raised £220,000 for the Company by the conditional issue of a total of 183,333,200 New Ordinary Shares at the Issue Price to (1) Grain GmbH and (2) Don Goulding as set out in section 10 below.

The Subscription is conditional upon, inter alia:

·        the Resolutions being duly passed at the General Meeting by 9 October 2024, or such later time and/or date as the Company, Allenby Capital and SPARK may agree in the event of an adjournment of the General Meeting, but in any event by no later than 8.00 a.m. on 23 October 2024; and

·        Second Admission becoming effective on or before 8.00 a.m. on 11 October 2024 or such later time and/or date as the Company, Allenby Capital and SPARK may agree, but in any event by no later than 8.00 a.m. on 25 October 2024.

The Subscription will result in the issue of 183,333,200 New Ordinary Shares representing approximately 12.62 per cent. of the Enlarged Share Capital. The Subscription Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares on Second Admission.

5.    Fee Shares

6,250,000 New Ordinary Shares are to be issued at the Issue Price, conditional upon the Resolutions being duly passed at the General Meeting and Second Admission, to an adviser in settlement of amounts owed by the Company. The Fee Shares, when issued, will rank pari passu in all respects with the Existing Ordinary Shares on Second Admission and will represent approximately 0.43 per cent. of the Enlarged Share Capital.

6.    Placing Warrants

Placees and subscribers in the Placing and Subscription will be issued with Placing Warrants (each Placing Warrant giving the right to subscribe for one Ordinary Share) on the basis of two Placing Warrants for every 1 new Ordinary Share subscribed in the Placing or Subscription. The Placing Warrants will be exercisable at a price of 0.36 pence per Ordinary Share at any time up to two years following the date of Second Admission. Placing Warrants are also being issued to the recipient of the Fee Shares (see above). In aggregate, 1,095,833,350 Placing Warrants will be issued which, if exercised in full, would result in proceeds of £3.945 million.

The Placing Warrants will be unlisted, and no application will be made to admit the Placing Warrants to trading on any stock exchange.

7.    Settlement and dealings

Application has been made to the London Stock Exchange for the Placing Shares, the Subscription Shares and the Fee Shares to be admitted to trading on AIM.

The First Tranche Placing Shares have been allotted conditional upon First Admission and it is expected that they will be admitted to trading on AIM at 8.00 a.m. on 26 September 2024 (or such later time and/or date as the Company, SPARK and Allenby Capital may agree (being no later than 8.00 a.m. on 10 October 2024)).

Following the passing of the Resolutions at the General Meeting, the Second Tranche Placing Shares, Subscription Shares and Fee Shares will be allotted conditional upon Second Admission. It is expected that the Second Tranche Placing Shares, Subscription Shares and Fee Shares will be admitted to trading on AIM at 8.00 a.m. on 11 October 2024 (or such later time and/or date as the Company, SPARK and Allenby Capital may agree (being no later than 8.00 a.m. on 25 October 2024)).

8.    Placing Agreement

The Company, SPARK and Allenby Capital have entered into the Placing Agreement, pursuant to which Allenby Capital has agreed, subject to certain conditions, to use its reasonable endeavours to procure placees for the Placing Shares.

The Placing Agreement is conditional, inter alia, upon First Admission becoming effective at 8.00 a.m. on 26 September 2024 (or such later time and/or date as the Company, SPARK and Allenby Capital may agree (being no later than 8.00 a.m. on 10 October 2024)) and Second Admission becoming effective at 8.00 a.m. on 11 October 2024 (or such later time and/or date as the Company, SPARK and Allenby Capital may agree (being no later than 8.00 a.m. on 25 October 2024)).

The Company has agreed to pay all costs and expenses relating to the Placing and the applications for Admission, including a fee and commission payable to Allenby Capital, and a corporate finance advisory fee to SPARK.

The Placing Agreement contains certain customary warranties given by the Company in favour of SPARK and Allenby Capital in relation to, inter alia, the accuracy of the information in this document and the Announcement and other matters relating to the Group and its business. In addition, the Company has agreed to indemnify SPARK and Allenby Capital in respect of certain liabilities they may incur in respect of the Placing or Admission. It also contains provisions entitling SPARK and Allenby Capital to terminate the Placing Agreement if, inter alia, a breach of any of the warranties occurs, a force majeure event occurs or an event occurs which is material in the context of the Placing.

9.    Use of Proceeds

The gross proceeds amount to £650,000. The expenses of the Proposals amount to approximately £74,600, of which approximately £67,100 will be settled in cash, and £7,500 will be satisfied by the issue of the Fee Shares on the same terms as the Placing and Subscription. The net proceeds  of the Placing and the Subscription will be applied by the Company as follows:

●         Working capital (including production, promotional and Limited Edition

            & Christmas Stock production                                                                           £354,900

●        Promotional Limited Edition for Xmas Season                                                         £88,000

●        Brand range extensions                                                                                          £55,000

●         On & Off Trade - major account listings                                                                 £50,000

●        Ready to serve developments                                                                                £35,000

Unencumbered cash reserves stood at £15,000 as at 31 August 2024 and so the net proceeds of the fundraising will provide Distil with sufficient liquidity as the Company enters the build up to crucial Christmas season and its busiest trading period of the year.

10.  Related Party Transactions

Roland Grain is a non-executive Director of the Company and is currently interested (via Grain GmbH) in 213,619,107 Existing Ordinary Shares (representing 23.60 per cent. of the Company's current issued share capital). As a Director and as a substantial shareholder in the Company, Roland Grain is a related party under the AIM Rules.

Don Goulding is Executive Chairman of the Company, and as such  is a related party under the AIM Rules.

The participation of Grain GmbH and Don Goulding in the Subscription are related party transactions under AIM Rule 13 of the AIM Rules.

Neither Mr Grain nor Mr Goulding are considered independent in relation to the consideration of these related party transactions under AIM Rule 13. Therefore, Shaun Claydon, being the Independent Director, has considered the participation of the related parties in the Subscription in line with the AIM Rules.

Grain GmbH's and Don Goulding's participation in the Subscription

*       Grain GmbH is a company to which Mr Roland Grain is connected.

†      in addition two Placing Warrants will be issued for every one Subscription Share subscribed .

The terms of the Subscription are essentially the same as the terms of the Placing.

The Independent Director has considered the participation of Grain GmbH and Mr Goulding in the Subscription. Having consulted with SPARK Advisory Partners, the Company's nominated adviser, the Independent Director considers that the terms of Grain GmbH's and Mr Goulding's participation in the Subscription are fair and reasonable insofar as Shareholders are concerned.

11.  General Meeting

The Directors do not currently have sufficient existing authorities to allot shares and dis-apply pre-emption rights under section 551 and section 570 of the Act to enable the Company to allot and issue the Second Tranche Placing Shares, the Subscription Shares, the Fee Shares and the Placing Warrants. Consequently, the Company needs to first obtain approval from its Shareholders to grant to the Board additional authority to allot the New Ordinary Shares and to dis-apply statutory pre-emption rights which would otherwise apply to such allotment or grant. The Company is also seeking Shareholder authority to increase the Directors' general authority to allot securities and dis-apply pre-emption rights pursuant to sections 551 and 570 of the Act, respectively.

A summary and brief explanation of the resolutions to be proposed at the General Meeting is set out below. Please note that this is not the full text of the Resolutions and you should read this section in conjunction with the Resolutions contained in the Notice at the end of this document. The following resolutions will be proposed at the General Meeting:

Resolution 1, which will be proposed as an ordinary resolution, is to authorise the Directors to allot or issue the Second Tranche Placing Shares, the Subscription Shares, the Fee Shares, the Placing Warrants and further new Ordinary Shares (representing approximately 33 per cent. of the Enlarged Share Capital) up to an aggregate nominal value of £479,500; and

Resolution 2, which will be proposed as a special resolution, and which is subject to the passing of Resolution 1, dis-applies statutory pre-emption rights, provided that such authority shall be limited to the Second Tranche Placing Shares, the Subscription Shares, the Fee Shares, the Placing Warrants and further Ordinary Shares (representing approximately 20 per cent. of the Enlarged Share Capital) having an aggregate nominal value of £290,606.

The General Meeting will be held at 10.00 a.m. on 9 October 2024 at Temple Chambers, 3-7 Temple Avenue, London EC4Y 0DT.

12.  Irrevocable Undertaking

Grain GmbH (213,619,107 Ordinary Shares) has  irrevocably undertaken to vote its Ordinary Shares (which amount to 23.60% of the issued share capital) in favour of the Resolutions at the General Meeting.

13.  Action to be taken by Shareholders

A form of proxy for use at the General Meeting is enclosed. Whether or not you intend to attend the General Meeting in person, you are requested to complete and sign the form of proxy and return it to the Company's Registrars at 3 The Millennium Centre, Crosby Way, Farnham, GU9 7XX, so as to arrive no later than 10.00 a.m. on 7 October 2024. The return of the form of proxy will not prevent you from attending the General Meeting and voting in person should you wish to do so.

14.  Importance of the vote

The First Tranche Placing is not conditional on the Second Tranche Placing nor the Subscription. Should the Resolutions not be passed at the General Meeting, the Second Tranche Placing and the Subscription will not proceed. The First Tranche Placing will not be affected by any or all of the Second Tranche Placing and the Subscription failing to complete for any reason.

In order for Second Admission to proceed, Shareholders will need to approve both Resolutions set out in the Notice of General Meeting.

If either of the Resolutions to be proposed at the General Meeting are not approved by Shareholders, the Second Tranche Placing Shares and the Subscription Shares will not be able to be allotted and the Placing Warrants will not be able to be issued and consequently the Company will receive significantly less money than anticipated from the Placing and Subscription.  In such circumstances, unless the Company was able to raise potentially more expensive and/or dilutive funds from alternative sources in the immediate short term, the Company will have to adapt its business plans, strategy and cost base accordingly and it is highly likely that the Company's performance, financial position and prospects will be adversely affected. Accordingly, the Directors consider that it is very important that Shareholders vote in favour of the Resolutions in order that Second Admission can proceed.

15.  Board Recommendations

In relation to the Resolutions, as Mr Grain (via Grain GmbH) and Mr Goulding have participated in the Subscription, they are not considered independent and as such have not participated in the recommendation.

The Independent Director considers that the Placing, the Subscription, the issue of the Fee Shares and Placing Warrants and the Resolutions are in the best interests of the Company and its Shareholders as a whole.

Accordingly, the Independent Director recommends that you vote in favour of the Resolutions.

Yours sincerely

EXPECTED TIMETABLE OF PRINCIPAL EVENTS