KRM22 plc

("KRM22", the "Group" or the "Company")

New Debt Facility

KRM22 plc (AIM: KRM.L), the technology and software investment company, with a particular focus on risk management in capital markets, is pleased to announce that, after a competitive process, it has entered into an agreement for a new £5.0m convertible loan facility (the "Facility") arranged by Trading Technologies International, Inc. ("TT"), the Company's largest shareholder. The Company will draw down an initial amount of £4.0m under the Facility on satisfaction of the conditions precedent set out in the loan agreement in a single tranche and will replace the Company's existing debt facility provided by certain affiliates of Kestrel Partners LLP ("Kestrel"). It is intended that the balance of the outstanding debt and charges of approximately £3.1m under the existing Kestrel debt facility will be repaid early using the proceeds of the Facility.

The Facility is being provided to strengthen the Company's balance sheet and access both working capital and growth capital in order to support the short to mid-term opportunities available to the Company.

Terms of the Facility

The Facility will be for a maximum of £5.0m and will be secured on certain Group assets and includes covenants based on the Group's financial performance, based on annualised recurring revenue, recognised revenue and solvency and will also be guaranteed by certain members of the Group.

The interest rate payable on debt drawn down is the aggregate of the SOFR average and a margin of 5.5 per cent. provided that the minimum amount per annum of such aggregate percentage rate per annum shall be 9.25 per cent. The interest will be payable quarterly in arrears however the Company has the ability to defer interest payments for the initial 18 months (the "Initial Interest Period"), with the total deferred interest in the Initial Interest Period being paid in two equal instalments on the calendar quarters ending after the 18^th and 21^st month anniversary of the Facility. The Facility carries an arrangement fee of 1 per cent. of the amount of debt drawn down payable by deduction/retention from the drawn proceeds. The term of the Facility is 3 years with the option to extend by a further year to 4 years.

Immediately following entry into the Facility TT can request conversion of the Facility into up to a maximum number of 3,566,630 new ordinary shares in the Company at any time at the lowest conversion price of: £0.46; the volume weighted average price of the Company's ordinary shares for the 3 month period prior to service of conversion notice; or the lowest daily closing price for the 30 completed calendar days prior to service of conversion notice. TT has the right to prevent any conversion which would trigger a Rule 9 event under the Takeover Code.

Pursuant to the Facility, the Company has agreed that it will as soon as practicable convene a general meeting to approve the allotment of new ordinary shares sufficient to convert the full amount of the Facility at the conversion price set out above. Full conversion of the Facility at a conversion price of £0.46 would result in the issue of 10,869,565 new ordinary shares to TT. If the Company's share price falls below £0.46 then conversion of the Facility could result in the issue of a greater number of shares.  Pursuant to Rule 9 of the Takeover Code, TT cannot acquire 30 per cent or more of the voting rights in the Company without being required to make a mandatory cash offer for all the shares in the Company not already held by it. No waiver from Rule 9 is being sought in connection with the conversion right under the Facility.

Related Party Transaction

TT is considered a "related party" as defined under the AIM Rules as a result of its substantial shareholding of 25.0 per cent. in the Company. The provision of the Facility by TT constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules.

The Independent Directors, being Stephen Casner, Kim Suter, Garry Jones, Sandy Broderick and Steve Sparke, consider, having consulted with the Company's nominated adviser for the purposes of the AIM Rules, finnCap, that the terms of the Facility are fair and reasonable insofar as the Company's shareholders are concerned.

Stephen Casner, Chief Executive Officer commented: 

"We are very pleased to announce this new debt facility which will continue to fuel the strong revenue growth that KRM22 has experienced over the past 18 months.  Trading Technologies continues to demonstrate what an exceptional partner they are for KRM22 as together we bring a new generation of risk systems to the capital markets industry."

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

For further information please contact:

KRM22 plc                                                                                 [email protected]

Keith Todd CBE, Executive Chairman

Stephen Casner, CEO

Kim Suter, CFO

finnCap Ltd (Nominated Adviser and Broker)                +44 (0)20 7220 0500

Carl Holmes / George Dollemore

Alice Lane / Sunila de Silva (ECM)

About KRM22 plc

KRM22 is a closed-ended investment company which listed on AIM on 30 April 2018.  The Company has been established with the objective of creating value for its investors through the investment in, and subsequent growth and development of, target companies in the technology and software sector, with a focus on risk management in capital markets.

Through its investments and the Global Risk Platform, KRM22 helps capital market companies reduce the cost and complexity of risk management.  The Global Risk Platform provides applications to help address firms' trading and corporate risk challenges and to manage their entire enterprise risk profile.

Capital markets companies' partner with KRM22 to optimise risk management systems and processes, improving profitability and expanding opportunities to increase portfolio returns by leveraging risk as alpha.

KRM22 plc is listed on AIM and the Group is headquartered in London, with offices in several of the world's major financial centres.

See more about KRM22 at www.krm22.com