Circ re. Disposal and General Meeting

 

                                                                                                                                12 November 2014

 

 

C A Sperati plc

("CAS" or the "Company")

 

 

Proposed Disposal

Proposed adoption of the Investing Policy

Change of Name

Approval of the grant of Options as a Related Party Transaction

Notice of General Meeting

 

 

Further to the announcement of 23 September 2014, the Company has today entered into a conditional sale agreement with BFS Buttons Limited for the sale of the Existing Buisness and Assets for the Consideration ("Disposal").

 

The Company is also taking this opportunity to seek Shareholder approval to the grant of options under the Company's share option scheme to the Board as a Related Party Transaction and to change the name of the Company to Teathers Financial Plc (in part, as a consequence of the Company's current name C A Sperati comprising part of the assets being sold to BFS Buttons Limited).

 

The Company is today sending a circular to Shareholders which provides details on the proposed Disposal, proposed Investing Policy, Change of Name, grant of options and Notice of General Meeting (the "Document") to be held at 11.00 a.m. at the offices of Beaumont Cornish, 2^nd Floor, Bowman House, 29 Wilson Street, London EC2M 2SJ on 3 December 2014. The explanatory letter from the Executive Chairman of the Company included in the Document has been set out in full in the Appendix to this announcement below (without material adjustment).

 

The Disposal will constitute a fundamental change of business of the Company under Rule 15 of the AIM Rules, which requires the approval of the Shareholders. The Disposal will result in the Company becoming an Investing Company, as a consequence of which Rule 15 of the AIM Rules further requires the Company to obtain the approval of its Shareholders for its proposed Investing Policy going forward. Further details of the Investing Policy are set out in paragraph 6 of the Appendix below.

 

Following approval of the Investing Policy by the Shareholders at the General Meeting, the Company will be required to make an acquisition or acquisitions which constitute a reverse takeover under the AIM Rules or otherwise implement its Investing Policy within 12 months of the General Meeting, failing which, the Company's Ordinary Shares would then be suspended from trading on AIM. If the Company's Investing Policy has not been implemented within 18 months of the General Meeting the admission to trading on AIM of the Ordinary Shares would be cancelled and the Directors will convene a general meeting of the Shareholders to consider whether to continue seeking investment opportunities or to wind up the Company and distribute any surplus cash back to Shareholders.

 

Shareholders should note that on 19 November 2014 the Registered Office of the Company will change to The Plaza, 535 King's Road, London SW10 0SZ.

 

A copy of the Document is available from the Company's website, being www.casperatiplc.com.

 

Defined terms used in this announcement are set out at the end of this announcement.

 

 

For further information please contact:

 

C A Sperati plc
Jason Drummond, Executive Chairman	Tel: 0207 148 3008
Beaumont Cornish Limited (Nominated Adviser & Joint Broker)
Roland Cornish	Tel: 0207 628 3396
Emily Staples
Peterhouse Corporate Finance (Joint Broker)
Lucy Williams	Tel: 020 7469 0936

 

 

Appendix

 

Letter from the Executive Chairman of the Company

 

The Company is today sending the Document to Shareholders, which provides details on the proposed Disposal, proposed Investing Policy, Change of Name, grant of options and Notice of General Meeting. The letter from the Executive Chairman of the Company included in the Document is reproduced below (without material adjustment):

 

 

1.             Introduction

 

On 23 September 2014 the Company announced that it had raised £400,000 before expenses through an institutional placing of 13,333,333 new Ordinary Shares at a price of 3 pence per such share with an attached warrant to subscribe for one new Ordinary Share until 19 September 2015 at a price of 3 pence per Ordinary Share. In addition, the Company informed Shareholders of its intention to seek approval from Shareholders to the disposal or realisation effectively of the Company's Existing Business and Assets (with the effect of the Company ceasing to own, control or conduct all, or substantially all, of its existing trading business) and the adoption of an investing policy which is more in line with market trends and which could include oil and gas and the resources sector in general. The Company also informed Shareholders of its intention to acquire approximately 4 per cent. of Kentucky Oil and Gas plc through a subscription of £150,000 in cash for 3,333,333 new ordinary shares (being 4.5 pence per share) in KOG valuing KOG at approximately £3.77 million post investment.

 

Further to such announcement, the Company has today entered into a conditional sale agreement with the Purchaser for the sale of its Existing Business and Assets for the Consideration. Completion is conditional upon approval by Shareholders at the General Meeting to Resolutions 1 and 4. Further details of the Sale Agreement are set out in paragraph 4 of this Part I.

 

Given that the Existing Business is the only operating business of the Company, the Disposal will result in the Company becoming an Investing Company, as a consequence of which Rule 15 of the AIM Rules requires the Company to state its Investing Policy in the Document and to obtain the approval of Shareholders of that Investing Policy at the General Meeting. The Board is therefore seeking Shareholder approval of the Investing Policy set out in paragraph 6 below, which although different from that anticipated in the announcement made on the 23 September 2014, will not preclude the proposed investment in KOG.

 

The Company is also taking this opportunity to seek Shareholder approval to the grant of the Options under the Option Scheme to the Board as a Related Party Transaction and to change the name of the Company to Teathers Financial Plc (in part, as a consequence of the Company's current name C A Sperati comprising part of the Assets being sold under the Sale Agreement).

 

The purpose of the Document is to provide Shareholders with further information on the Proposals and the grant of the Options to the Directors under the Option Scheme.

 

Following approval of the Investing Policy by the Shareholders at the General Meeting, the Company will be required to make an acquisition or acquisitions which constitute a reverse takeover under the AIM Rules or otherwise implement its Investing Policy within 12 months of the General Meeting, failing which, the Company's Ordinary Shares would then be suspended from trading on AIM. If the Company's Investing Policy has not been implemented within 18 months of the General Meeting the admission to trading on AIM of the Ordinary Shares would be cancelled and the Directors will convene a general meeting of the Shareholders to consider whether to continue seeking investment opportunities or to wind up the Company and distribute any surplus cash back to Shareholders.

 

2.             Information on the Existing Business

 

CAS supplies buttons, buckles and trimmings to the clothing and allied trades and its Ordinary Shares are currently admitted to trading on AIM.

 

For the six months ended 30 April 2014 the unaudited management accounts attributed a loss of approximately £69,000 on revenues (as reported in the Company's interim accounts for the six months ended 30 April 2014) of approximately £88,891 to the Existing Business. For the year ended 31 October 2013 the unaudited management accounts attributed a loss of approximately £137,000 on revenues (as reported in the Company's audited accounts for the year ended 31 October 2013) of approximately £200,700 to the Existing Business. As at 30 April 2014 the net assets of the Existing Business were approximately £122,150. For the purposes of this net asset calculation debtors and creditors arising as a result of the activities of the Existing Business have been included.  However it must be noted that such debtors and creditors will remain in the balance sheet of the Company following Completion.

 

Further information on CAS can be found on its website, www.casperatiplc.com.

 

3.             Background to the Disposal

 

On joining AIM, from the premium segment of the Main Market, on 24 March 2014, the Board intended to build upon the Company's "heritage brand" under the 'C A Sperati' name, as a combination of organic growth and selective complementary acquisitions, with an emphasis on the Company's authentic British heritage and the expanding consumer interest in "affordable luxury" brands. CAS does not manufacture its products, and simply acts as an intermediary between the manufacturer and end users. The Board has found that the Company's Existing Business is declining and given time it is feared that with increased competition from Internet vendors margins will be squeezed. Given the continuing costs associated with affordable luxury fashion, combined with the anticipated and actual decline in the Existing Business, organic growth is likely to prove to be challenging going forward.  The Board recognises that in this more demanding current market environment the trading of the Company's Existing Business is not sufficiently strong to attract sufficient development capitalfor either organic or acquisitive growth.  In addition, the Company has been unable to find any suitable acquisition targets which offer synergies with the Existing Business. 

 

The Board has therefore been considering its options regarding the best way to maintain and grow Shareholder value. Whilst the Board believes that the opportunity did exist to develop a substantial and profitable business complementary to the Existing Business, it is now of the view that the prospects of delivering on this opportunity are limited. The Board is also now of the view that through implementing its Investing Policy, by investing in AIM quoted companies and in unquoted companies, joint ventures or projects which the Board believes will be seeking a quotation on AIM within 12 to 18 months of such investment, with a focus on those companies which have market appeal from time to time, the Board would be better positioned to increase Shareholder value.

 

To this end, the Company is pleased to report that the sale of the Existing Business and Assets to the Purchaser has been achieved conditional on Shareholder approval and that, subject to Completion, the Company should be in a position to proceed with the Investment as the first step towards implementing its Investing Policy.

 

The Purchaser, BFS Buttons Limited, is a family owned and run company based near Shoreditch in London which specialises in the wholesale of buttons, buckles, hook and eyes, sew on snap fasteners, D-rings and similar garment trimmings to the garment trade. Historically it has specialised in ladies' fashion and ladies' outerwear but also supplies products for menswear and children's wear. The Purchaser currently sources products from across the world, primarily in Europe and China.

 

If the Disposal is approved by Shareholders, the Company will not hold any tangible operating assets (other than a server, certain limited equipment not required by the Existing Business as well as a motor vehicle which, under the Sale Agreement, the Company will allow the Purchaser to use for no charge and which will revert to the Company on 31 January 2015) following Completion. Given that the Purchaser is only acquiring the Assets, and the Employees of the Existing Business will transfer to the Buyer on Completion as a matter of law, all other current liabilities within the balance sheet of the Company as at Completion will remain with the Company following Completion. It is estimated by the Board that immediately following Completion, the net assets of the Company will be approximately £400,000 (taking into account the Company's existing cash resources, cash received from the Disposal on Completion and the transaction costs).

 

Following the Disposal, the Company will no longer be involved in the sale and distribution of buttons, buckles and trimmings and will pursue new investment opportunities in accordance with its Investing Policy, further details of which are set out in paragraph 6 below.

 

4.             Summary of the Sale Agreement

 

Pursuant to the Sale Agreement the Company has agreed to sell the Existing Business and Assets (excluding any liabilities existing prior to Completion) conditionally upon Shareholder approval of the Disposal, to the Purchaser for:

 

1.     an initial cash consideration, payable on Completion, of £10,000; plus

2.     an additional sum (depending on the type of stock) in cash equal to 65 per cent. or 100 per cent of the lower of cost or net realisable value of the stock comprised in the Existing Business at Completion sold by the Purchaser for the period from Completion until 30 November 2015 less £10,000 but where such deduction results in a negative value CAS shall not be liable to pay or repay any monies to the Purchaser ("Additional Sum").

 

Stock forming part of the Additional Sum at 100 per cent. of the lower of cost or net realisable value shall be RAF No.1 Buttons supplied by a named supplier or any other stock of a similar nature and type.  The remainder of the stock will form part of the additional consideration at 65 per cent of cost or net realisable value.

 

The Additional Sum (if any) is to be received by CAS by 10 December 2015. The stock value as per the internal records of the Company as at the date of the Document is approximately £40,000 (including stock not yet paid for of approximately £14,000 which will remain as a liability on the balance sheet of the Company following Completion until payment is made). It is estimated by the Directors that due to the obsolete nature of the stock the Additional Sum receivable by the Company is likely to be zero.

                                                                                

BFS Buttons Limited has also agreed to collect in book debts relating to the Existing Business prior to Completion on behalf of CAS for a commission of 6 per cent. of debts recovered.

 

CAS will warrant under the terms of the Sale Agreement that there are no claims or disputes with its Employees, no litigation from 1 November 2013 to exchange of the agreement being 12 November 2014, and there are no product liability claims.

 

Under the terms of the Sale Agreement the brand name of "C A Sperati" will transfer to the Purchaser following Completion. In addition the Company will allow the Purchaser use of a motor vehicle for no charge until 31 January 2015 at which time it will revert to the Company.

 

Conditions of the Sale

The Disposal is conditional upon, amongst other things, the approval of Shareholders in accordance with AIM Rule 15 by no later than a longstop date of 19 December 2014.

 

5.             The Company's operations following the Disposal

 

Immediately following Completion the Company will be an Investing Company and its assets will comprise the cash from the Disposal (net of transaction costs of approximately £13,500) of minus £3,500 plus 94 per cent. of any book debts recovered by the Purchaser prior to Completion and existing cash resources of the Company (having deducted the investment made to date in KOG of £100,000) of approximately £260,000. In addition, given that the Purchaser is only acquiring the Assets, and the Employees of the Existing Business will transfer on Completion as a matter of law, all other current liabilities within the balance sheet of the Company as at Completion will remain with the Company following Completion. It is estimated by the Board that immediately following Completion net assets of the Company will be approximately £400,000 (taking into account the Company's existing cash resources, cash received from the Disposal on Completion and the transaction costs).

 

Any Additional Sum payable under the Sale Agreement by the Purchaser is to be received by CAS by 10 December 2015.

 

The lease that the Company currently has on the premises at 54 Westcombe Hill, Greenwich will expire on 19 November 2014 and will not be renewed. On 19 November 2014 the Registered Office of the Company will change to The Plaza, 535 King's Road, London SW10 0SZ and this will also be the principal operating location of the Existing Business until Completion.

 

Subject to approval by the Shareholders at the General Meeting of Resolutions 1, 2 and 4, the Board intends to use the consideration from the Disposal, in excess of the anticipated transaction costs of approximately £13,500 (if any), and its existing cash resources to make investments in accordance with the proposed Investing Policy including completing the investment in KOG as detailed in paragraphs 1 and 7 of Part I of the Document. The Board will review and assess potential new investments in accordance with the proposed Investing Policy, further details of which are set out in paragraph 6 below.

 

Further details regarding the Investment will be provided to Shareholders in accordance with the AIM Rules in due course.

 

6.             Proposed Investing Policy

 

On Completion, the Company will have disposed of all of its trading businesses and therefore (under Rule 15 of the AIM Rules) it will be re-classified as an Investing Company and will be required to adopt an investing policy, which must be approved by Shareholders.

 

The Company's Investing Policy, which is subject to Shareholder approval at the General Meeting, is set out below:

 

Investing Policy

To invest in AIM quoted companies either on flotation, through secondary offerings or by purchasing shares in the market and unquoted companies, joint ventures or projects which the Board believes will be seeking a quotation on AIM within 12 to 18 months of such investment. The Directors intend to focus primarily on AIM traded companies which they believe have good liquidity and are undervalued hence providing an opportunity for them to create Shareholder value. Although the Board will consider investing in companies of all sectors they intend to focus on sectors which have market appeal from time to time.  It is the Board's opinion that currently such sectors include the technology sector and certain areas of natural resources with a specific emphasis on the oil and gas sector. Such investments are likely to be made in companies which have a permanent place of business in the UK. However the Company will not be limited by geography and companies operating anywhere in the world may be considered.

 

The Directors may consider it appropriate to take an equity interest in any proposed investment which may range from a minority position to 100 per cent. ownership. Proposed investments may be structured as an acquisition, joint venture or as an interest in a project.

 

The Company intends to be an involved and active investor. Accordingly, where necessary, the Company may seek participation in the management or with the board of directors of an entity in which the Company invests or, in the event that it is acquired, in the on-going enlarged entity. Where appropriate, the Board intends to add their expertise to the management of the business, and utilise their industry relationships and access to finance. 

 

New investments will be held for the medium to longer term, although a shorter term disposal of any investments cannot be ruled out.

 

There will be no limit on the number of projects into which the Company may invest, and the Company's financial resources may be invested in a number of propositions or in just one investment, which may be deemed to be a reverse takeover pursuant to Rule 14 of the AIM Rules. Where the Company builds a portfolio of related investments it is possible that there may be cross-holdings between such investments. The Company does not currently intend to fund any investments with debt or other borrowings but may do so if appropriate.  Investments may be made in all types of entities and there will be no investment restrictions.

 

The Company's primary objective is that of securing for the Shareholders the best possible value consistent with achieving, over time, both capital growth and income for Shareholders through developing profitability coupled with dividend payments.

 

Following on from adopting an Investing Policy, the Company will be required to make an acquisition or acquisitions which constitute a reverse takeover under the AIM Rules or otherwise implement its Investing Policy within 12 months of the General Meeting, failing which the Ordinary Shares would then be suspended from trading on AIM. If the Investing Policy has not been implemented within 18 months of the General Meeting the admission to trading on AIM of the Ordinary Shares would be cancelled and the Directors will convene a general meeting of the Shareholders to consider whether to continue seeking investment opportunities or to wind up the Company and distribute any surplus cash back to Shareholders.

 

The Directors believe that their broad collective business experience in the areas of acquisitions, accounting, corporate and financial management (as further described in paragraph 9 of the Document) will assist them in the identification and evaluation of suitable opportunities and will enable the Company to achieve its investing objectives.  In addition, to aid its investment process, the Board intends to develop a software application service which will help identify market fundraisings of which they would otherwise not be aware.

 

The Directors may undertake the initial project assessments themselves with additional independent technical advice as they judge may be required. The Company will not have a separate investment manager.

 

7.             Potential investment in KOG

 

Further to the announcement made on 23 September 2014, in order to provide KOG with some immediate funding ahead of the proposed equity investment, on 2 October 2014 CAS lent £100,000 to KOG by way of a convertible loan note.  No interest is payable and the loan note shall mature on 2 April 2015.  The loan note is convertible upon the service of a conversion notice at a price per each share to be issued at an average market price over a period yet to be specified or, where such average market price is lower than the nominal value, at 4.5 pence per such share.  The loan note is therefore only convertible on KOG's shares being admitted to trading. As drafted, there is a risk that the loan note may not be convertible.

 

However, despite the wording of the agreement, it is the intention of CAS to convert the £100,000 loan note into 2,222,222 new shares in KOG at 4.5 pence per such share shortly following Completion effectively as part of the intended investment as announced on 23 September 2014.  The Directors intend to make the remainder of the intended £150,000 investment (being the sum of £50,000), by means of a subscription of £50,000 for 1,111,111 new shares in KOG at 4.5 pence per such share (as detailed in paragraph 1 of Part I of the Document and which will take CAS's total investment in KOG to approximately 4 per cent. of the enlarged issued share capital of KOG) following Completion.

 

Further details regarding the Investment will be provided to Shareholders in accordance with the AIM Rules in due course.

 

8.             Dividends

 

The initial focus of the Company will be the achievement of capital growth for Shareholders and therefore the Company will only consider the payment of dividends as and when it is appropriate to do so. As such, it is not possible at this stage to give an indication of the likely level or timing of any future dividends. To the extent that any dividends are paid they will be paid in accordance with any applicable laws and regulations to which the Company is subject. The amount of the dividends paid to Shareholders will fluctuate according to the levels of profits earned by the Company and will be dependent on sufficient distributable reserves being available to the Company.

 

9.             Board

 

The Board consists of myself, as Executive Chairman, Nilesh Jagatia as Finance Director and Oliver Fattal as Non-Executive Director. It is not proposed to make any changes to the Board at this stage, however the Board will keep the Board structure under review as the Company's Investing Policy is implemented and as the Company grows.

 

As demonstrated below the Board has a broad collective business experience in the areas of acquisitions, accounting, corporate and financial management, skills which the Board consider to be essential in order that the Company may be in a position to implement its Investing Policy.

 

I am a technology related entrepreneur who, since the age of 18, has founded, grown, run, and brought to market a number of successful technology related companies. Nilesh Jagatia, the Company's Finance Director has over 10 years of AIM quoted company experience and is also currently the chief financial officer of a number of AIM quoted companies including Inspirit Energy Holdings plc.  Oliver Fattal, the Company's Non-Executive Director, has been involved in CAS in both an executive and non-executive capacity and has a successful track record in making investments, particularly in the property sector.

 

10.           Change of Name

 

It is proposed that the Company's name be changed to Teathers Financial Plc as the Directors consider that this name better reflects the Company's Investing Policy. In addition, under the Sale Agreement, the Purchaser has the right to the brand name of "C A Sperati".  It is therefore necessary for the Company to adopt a new name as a consequence of the Sale Agreement.  It is proposed and anticipated that the Company's name will change to Teathers Financial Plc shortly following the General Meeting.  Shareholders will be notified of the date of such change by an announcement on an RIS.

 

11.           Option Scheme

 

On 7 August 2014 the Board formerly adopted the Option Scheme which was announced to Shareholders via an RIS on the same day.  No options have been granted under the Option Scheme to date. However, the Board is now seeking Shareholder approval to grant options over a total of 5,131,269 Ordinary Shares, representing approximately 15 per cent. of the current issued share capital of the Company (being the maximum authority currently available for grant under the Option Scheme), to be split equally between the three Board members. The grant of the Options to each of Nilesh Jagatia, Jason Drummond and Oliver Fattal, as set out in the table below, is a Related Party Transaction under the AIM Rules. Given that all of the Directors are recipients of the Options, all Directors are related parties for the purposes of the grant of the Options and as such there are no independent Directors for the purposes of the AIM Rules to provide an opinion on the grant of Options or to provide a recommendation to Shareholders as to how to vote on Resolution 3. However, Beaumont Cornish, the Company's nominated adviser, considers that the grant of the Options to the Directors is fair and reasonable in so far as the Company's Shareholders are concerned.

 

The Directors believe that the grant of the Options will provide them with an incentive over a number of years to increase Shareholder value particularly where, in the case of Oliver Fattal, he agreed not to receive a salary from 1 October 2013 to 1 July 2015.

 

On 17 December 2013 Jason Drummond and Nilesh Jagatia agreed not to receive their salaries but to let them accrue until 1 July 2015, however following the equity fundraising announced on 23 September 2014 (as further detailed in paragraph 1 of Part I of the Document) the Directors passed a board resolution to pay the accrued salaries (and outstanding fees to Jason Drummond) amounting to approximately £63,333, and to continue to pay such salaries on a monthly basis going forward.

 

Given the interest of the Directors in the outcome of Resolution 3 which, if approved, will permit the grant of the Options made under the Option Scheme the shareholding Directors will abstain from voting on this Resolution.

 

Number of Options granted to each Director	Price	Exercise dates
482,087	4p	3 December 2015, being the first anniversary of grant until 3 December 2024, being the tenth anniversary of grant
88,054	*	3 December 2015, being the first anniversary of grant until 3 December 2024, being the tenth anniversary of grant
570,141	*	3 December 2016, being the second anniversary of grant until 3 December 2024, being the tenth anniversary of grant
570,141	*	3 December 2017, being the third anniversary of grant until 3 December 2024, being the tenth anniversary of grant

*being the closing mid-market price of the Ordinary Shares traded on AIM for the preceding 30 business days the day before grant.

 

Following the grant of the Options, the interests of the Directors in the issued Ordinary Share capital of the Company will be as follows:

 

Name	Number of Ordinary Shares held	% of issued share capital (%)	Number of options / Warrants held	Options as a % of issued share capital (%)
Jason Drummond	1,557,200	4.55	2,642,623	7.73
Nilesh Jagatia	nil	nil	1,710,423	5.00
Oliver Fattal	2,260,500	6.61	1,710,423	5.00

 

 

A summary of the Option Scheme Rules is set out below for information purposes:

 

Eligibility

All officers and employees of the group or such other persons as the Company may decide from time to time.

 

Grant of options

Options may be granted at any time provided they are not granted in breach of any law, regulation, the AIM Rules, the Model Code or the share dealing code adopted by the Company from time to time.  They may also not be granted more than ten years after the date of adoption of the Option Scheme (such date of adoption being 7 August 2014).  No consideration is payable for the grant of an option.  Options granted under the Option Scheme are personal to a participant and, except on his death, may not be transferred, assigned or charged.

 

Exercise price

The price at which participants in the Option Scheme may acquire Ordinary Shares shall not be less than the nominal value of an Ordinary Share but the Company shall be able to first grant Options over Ordinary Shares where the exercise price shall be 4 pence provided the number of such optioned shares in existence with such exercise price does not exceed in number 1,446,261 and, thereafter, the exercise price  shall instead be the closing mid-market price of the Ordinary Shares traded on AIM for the preceding 30 business days the day before grant.

 

Individual limits

No option to subscribe for Ordinary Shares may be granted pursuant to the Option Scheme on any date if the number of Ordinary Shares comprised therein, when aggregated with the number of Ordinary Shares issued or remaining capable of being issued under the Option Scheme or under any other employee share scheme (put in place or effected from the date after the adoption of the Option Scheme) would exceed the number of Ordinary Shares representing six and a half per cent. of the issued share capital of the Company.

 

Exercise, lapse and exchange of options

Options may normally be exercised in whole or in part as set out in the option certificate prior to the tenth anniversary of their grant (unless specified otherwise in the option certificate).  Options may be satisfied by the issue of Ordinary Shares or the transfer of existing Ordinary Shares.

 

Options will normally lapse on any charge or other security interest being granted over them by the option holder or on cessation of office or employment where such cessation does not result from illness, disability, injury, death, redundancy, retirement or good cause as determined by the Board.  In the event of a takeover or winding up of the Company, options may be exercised within certain time limits.  Options immediately lapse on the tenth anniversary of the date of grant (unless otherwise specified in the option certificate) and in the event of the participant's bankruptcy.

 

Limits on the issue of shares

No option to subscribe for Ordinary Shares may be granted pursuant to the Option Scheme on any date if the number of Ordinary Shares comprised therein, when aggregated with the number of Ordinary Shares issued or remaining capable of being issued under the Option Scheme or under any other employee share scheme (put in place or effected after the date of adoption of the Option Scheme) would exceed the number of Ordinary Shares representing fifteen per cent. of the issued share capital of the Company from time to time.

 

Adjustments

With the prior written approval of HMRC, the number of shares comprised in an option and/or exercise price may be adjusted if any capitalisation issue, offer by way of rights or any sub-division, reduction or consolidation of the Company's share capital occurs.

 

Rights attaching to shares

All Ordinary Shares allotted under the Option Scheme will rank pari passu with all other Ordinary Shares for the time being in issue, save as regards any rights arising by reference to a record date prior to the date of allotment.  Application will be made for permission for any such Ordinary Shares to be admitted to trading on AIM.

 

Income tax and national insurance

The participant agrees to pay to the Company any income tax, national insurance or similar tax which he may be subject to in relation to the scheme.  The Option Scheme does not, however, cover class II (employer) national insurance which will arise for the Company on any amounts chargeable on the option holders as income.

 

12.           General Meeting

 

Completion of the Proposals and the ability of the Board to grant Options to Board members are conditional upon the passing of the Resolutions at the General Meeting. You will find set out at the end of the Document a notice convening the General Meeting to be held at 11.00 a.m. on 3 December 2014, at which the Resolutions will be proposed.

 

At the General Meeting, the following Resolutions will be proposed of which Resolutions 1, 2 and 3 will be proposed as ordinary resolutions and Resolution 4 will be proposed as a special resolution.  Resolutions 1 and 4 are inter-conditional:

 

Resolution 1:

 

That the Disposal, in accordance with the terms of the Sale Agreement, be approved.

 

Resolution 2:

 

That the Investing Policy be approved.

 

Resolution 3:

 

That the grant of Options under the Option Scheme be approved as a Related Party Transaction.

 

Resolution 4:

 

That the Change of Name be approved.

 

Given the interest of the Board in the outcome of Resolution 3 which, if approved, will permit the grant of the Options made under the Option Scheme the shareholding Directors will abstain from voting on this Resolution.

 

13.           Action to be taken by Shareholders

 

A Form of Proxy for use in connection with the General Meeting accompanies the Document. The Form of Proxy should be completed in accordance with the instructions printed thereon and returned by hand, by courier or by post to the Company's registrars, Share Registrars Ltd, Suite E, First Floor, 9 Lion & Lamb Yard, Farnham, Surrey GU9 7LL, by fax to +44 (0) 1252 719232 or by e-mail to [email protected], as soon as possible, but in any event so as to be received by 11.00 a.m. on 1 December 2014.

 

The completion and return of a Form of Proxy will not preclude Shareholders from attending the General Meeting and voting in person, should they so wish. Shareholders who hold their Ordinary Shares through a nominee should instruct the nominee to submit the Form of Proxy on their behalf.

 

14.           Documents for inspection

 

Copies of the Document will be available to the public, free of charge, at the offices of Beaumont Cornish, 2^nd Floor, Bowman House, 29 Wilson Street, London EC2M 2SJ, during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) for one month from the date of the Document.  The Document will also be available on the Company's website www.casperatiplc.com.

 

15.           Recommendation

 

Completion of the Disposal and the adoption of the Investing Policy will provide the Board with the flexibility to actively seek out and acquire new investment opportunities, which the Board believes, with the Company's management expertise, has the potential to create significant value for Shareholders.

 

The Board therefore considers the approval of the Proposals to be in the best interests of the Shareholders as a whole. Accordingly, the Board recommends that Shareholders vote in favour of Resolutions 1, 2 and 4 to be proposed at the General Meeting as the shareholding Directors intend to do in respect of their own beneficial shareholdings amounting, in aggregate, to 3,817,700 Ordinary Shares representing approximately 11.16 per cent. of the Company's issued share capital.

 

The grant of the Options to each of Jason Drummond, Nilesh Jagatia and Oliver Fattal, is a Related Party Transaction under the AIM Rules. Given that all of the Directors are recipients of the Options, all Directors are related parties for the purposes of the grant of the Options and as such there are no independent Directors for the purposes of the AIM Rules to provide an opinion to Shareholders on the grant of the Options or to provide a recommendation to Shareholders as to how to vote on Resolution 3. However, Beaumont Cornish, the Company's nominated adviser, considers that the terms of the grant of the Options to the Directors are fair and reasonable in so far as the Company's Shareholders are concerned.

 

Given the interest of the Directors in the outcome of Resolution 3 which, if approved will permit the grant of the Options under the Option Scheme, the shareholding Directors will abstain from voting on this Resolution.

 

 

 

 

DEFINITIONS

The following definitions apply throughout this announcement unless the context requires otherwise:

 

"£"	the Great British Pound, the lawful currency of the UK;
"Additional Sum"	has the same meaning as given in the definition of Consideration;
"AIM"	AIM, a market operated by the London Stock Exchange;
"AIM Rules"	the AIM Rules, incorporating guidance notes, published by the London Stock Exchange governing, inter alia, admission to AIM and the continuing obligations of companies admitted to AIM, as amended or reissued from time to time;
"Assets"	the Existing Business's goodwill (including the ongoing use from Completion by the Purchaser, and not CAS, of the name C A Sperati), contracts, stock, plant and machinery, equipment, fixtures and fittings belonging to CAS, desktop computers, spare parts and tooling;
"Beaumont Cornish"	Beaumont Cornish Limited, the Company's Nominated Adviser, authorised and regulated by the Financial Conduct Authority;
"Change of Name"	the proposed change of name of the Company to Teathers Financial Plc;
"Company" or "CAS"	C A Sperati plc;
"Completion"	completion of the Disposal;
"Consideration"	the total consideration receivable by the Company in respect of the Disposal being an initial cash consideration, payable on Completion, of £10,000 plus an additional sum (depending on the type of stock as per paragraph 4 of Part 1 of the Document) in cash equal to 65 per cent. or 100 per cent, of the lower of cost or net realisable value of the stock comprised in the Existing Business at Completion sold by the Purchaser for the period from Completion until 30 November 2015 less £10,000 but where such deduction results in a negative value CAS shall not be liable to pay any monies to the Purchaser ("Additional Sum");
"Directors" or the "Board"	the directors of the Company whose names are set out on page 6 of the Document;
"Disposal"	the conditional sale of the Existing Business and Assets to the Purchaser pursuant to the Sale Agreement;
"Document"	the document, being a circular to Shareholders and accompanying Notice of General Meeting dated 12 November 2014;
"Employees"	the employees of the Existing Business, excluding any Directors;
"Existing Business"	the current business of CAS being the sale and distribution of buttons, buckles and trimmings;
"Form of Proxy"	the form of proxy accompanying the Document for use by the Shareholders in relation to the General Meeting;
"FSMA"	the Financial Services and Markets Act 2000 and all regulations promulgated thereunder, as amended from time to time;
"General Meeting"	the general meeting of the Company, convened by the Notice of General Meeting, to be held at 11.00 a.m. at the offices of Beaumont Cornish, 2nd Floor, Bowman House, 29 Wilson Street, London EC2M 2SJ on 3 December 2014, or any adjournment of that meeting, which is being held to consider the Resolutions;
"HMRC"	Her Majesty's Revenue and Customs in the UK;
"Investing Company"	has the meaning given in the glossary to the AIM Rules;
"Investing Policy"	the proposed investing policy of the Company, to be pursued by the Company following Completion, further details of which are set out in paragraph 6 of Part I of the Document;
"Investment"	the potential investment in KOG by the Company, as further detailed in paragraphs 1 and 7 of Part I of the Document;
"KOG"	Kentucky Oil and Gas plc, a company incorporated and registered in England and Wales with registered number 07362976;
"London Stock Exchange"	London Stock Exchange plc;
"Main Market"	the market for Officially Listed securities operated by the London Stock Exchange;
"Notice of General Meeting"	the notice convening the General Meeting set out at the end of the Document;
"Official List"	the list maintained by the UKLA in accordance with section 74(1) of FSMA for the purposes of part VI of FSMA;
"Option Scheme"	the unapproved share option scheme adopted by the Board on 7 August 2014;
"Option Scheme Rules"	the rules of the Option Scheme;
"Options"	the options over a total of 5,131,269 Ordinary Shares proposed to be granted to the Board under the Option Scheme;
"Ordinary Shares"	the ordinary shares of 0.5 pence each in the capital of the Company;
"Proposals"	together the Disposal, the Change of Name and the adoption of the Investing Policy as set out in the Document;
"Purchaser"	BFS Buttons Limited, a company incorporated and registered in England and Wales with company number 06635376;
"Related Party Transaction"	has the meaning given in the AIM Rules;
"Resolutions"	the resolutions set out in the Notice of General Meeting;
"RIS"	Regulatory Information Service;
"Sale Agreement"	the conditional sale agreement between the Company and the Purchaser, relating to the Disposal, dated 12 November 2014, which is more particularly described in paragraph 4 of Part I of the Document;
"Shareholders"	holders of the entire issued ordinary share capital in the Company;
"UK" or "United Kingdom"	the United Kingdom of Great Britain and Northern Ireland;
"UKLA"	the United Kingdom Listing Authority, being the FCA in exercise of its functions as competent authority pursuant to Part VI of FSMA; and
"Warrants"	warrants over Ordinary Shares in the Company.