Placing and Employee Benefit Share Incentive Plan

Gunsynd PLC

("Gunsynd" or the "Company")

Placing and Conditional Placing to Raise £1,130,000 and Employee Benefit Share Incentive Plan

Gunsynd (AIM: GUN, AQSE: GUN) announces that it has placed, through its broker, Peterhouse Corporate Finance ("Peterhouse"), 113,000,000 new ordinary shares (the "Placing") at a price of 1 pence per share (the "Placing Price") to raise gross proceeds of £1,130,000. The Placing will occur in two tranches as the Company does not have sufficient shareholder authority to issue the shares in full.

Tranche 1 - Firm Placing

56,606,789 new ordinary shares have been placed at the Placing Price, representing approximately a 4.8% discount to the closing mid-market price of the Company on 12 November 2020, raising gross proceeds of £566,067 (the "Firm Placing"). 

Tranche 2 - Conditional Placing

The balance of 56,393,211 new ordinary shares have been placed, conditional on shareholder approval being given for requisite authorities at a general meeting of the Company (the "General Meeting") to be held on or around 1 December 2020, at the Placing Price raising gross proceeds of £563,932 (the "Conditional Placing").

A circular convening the General Meeting will be sent to shareholders shortly and a further announcement will be made accordingly.

Subject to shareholder approval at the General Meeting for the requisite authorities, placees will also receive one warrant for every two ordinary shares subscribed for, exercisable at 2 pence (the "Placing Warrants") and expiring on the 18 month anniversary of the date of issue. In aggregate, 56,500,000 Placing Warrants have been conditionally issued.

The net proceeds of the Placing will provide the Company with additional funding to progress its activities and make investments in line with its stated investing policy.

Related Party Transactions

Peter Ruse and Donald Strang, Directors of the Company, have, on the same terms as the placees above, subscribed for £30,000 in aggregate, being 3,000,000 new ordinary shares in the Placing representing 2.7% of the total Placing ("Director Participation"). The Director Participation shares will be issued as part of the Conditional Placing. Further, as participants in the Placing on the same terms as the placees above, Peter Ruse and Don Strang will each receive Placing Warrants, issued conditionally at one warrant for every two ordinary shares subscribed for on the same terms as the placees.

The shareholdings of the Directors in question both prior to and subsequent to the Director Participation, if the Conditional Placing proceeds, are as follows:

The Director Participation described above, including the issue of the Placing Warrants, are deemed to be related party transactions for the purposes of Rule 13 of the AIM Rules. Hamish Harris, being deemed to be independent of the related party transactions for the purposes of the Director Participation, considers, having consulted with the Company's Nominated Adviser, that the terms of the Director Participation and the issue of the Placing Warrants are fair and reasonable insofar as shareholders are concerned.

The Firm Placing Shares will rank pari passu with the existing Ordinary Shares and an application has been made to the London Stock Exchange for admission of the 56,606,789 Firm Placing Shares to trading on AIM ("Admission"). Admission is expected to occur at 8.00 a.m. on or around 19 November 2020. A further announcement will be made regarding the Conditional Placing in due course.

Total voting rights

Following Admission, the Company's issued share capital will comprise 310,973,836 Ordinary Shares with voting rights.  The Company does not hold any Ordinary Shares in treasury. The figure of 310,973,836 Ordinary Shares may therefore be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Options and Warrants

There are currently 62,717,950 warrants over ordinary shares in the Company which were granted to placees and Peterhouse as part of the placings announced by the Company on 11 June, 6 July and 7 July 2020, all of which have an exercise price of 1.3 pence, and all of which are due to expire between 13 July 2021 and 30 June 2022. The total number of warrants following the issue of the Placing Warrants above will be 119,217,950.

There are currently 29,251,399 options over ordinary shares in the Company at various exercise prices from 1 pence to 446 pence, all of which are due to expire between 30 November 2020 and 26 August 2023.

Employee Benefit Trust and Share Incentive Plan

In September 2014, the Company notified shareholders of its intention to adopt and establish a share incentive plan ("SIP") under which it may award new ordinary shares for no cost to reward and incentivise directors, employees and consultants. New ordinary shares under this plan will not exceed 10 per cent. of the Company's issued share capital from time to time without the prior approval of the Shareholders.

To implement the SIP, the Company is currently in the process of establishing an employee benefit trust called the Gunsynd Employee Benefit Trust ("EBT"). The EBT may hold up to a maximum of 10 per cent of the Company's issued share capital from time to time for the beneficiaries of the EBT. The EBT is a discretionary trust for the benefit of directors, employees and consultants of the Company and any investee company or subsidiary. The ordinary shares held in the EBT are intended to be used to satisfy awards made by the Company's Remuneration Committee under the terms of the SIP. 

Awards of ordinary shares to beneficiaries under the SIP are subject to appropriate vesting and other performance conditions in line with normal market practice, which are to be set by the Remuneration Committee. 

Awards of ordinary shares under the SIP will not, in any 2-year rolling period, exceed 10 per cent of the Company's issued share capital from time to time without the prior approval of shareholders of the Company. Prior to this announcement no shares under the SIP have been awarded to any current directors, employees or consultants. 

Subject to the passing of an increased share authority resolution at the General Meeting and subsequent to the admission to trading on AIM of the Conditional Placing Shares, the trustees of the EBT, LGL Trustees Jersey, intend to subscribe for 15,000,000 new ordinary shares ("New Ordinary Shares") in the Company, at par value per New Ordinary Share at an aggregate cost to the Company of £12,750.  Such New Ordinary Shares will represent approximately 3.9% of the issued share capital of the Company following admission of the New Ordinary Shares. A further announcement will be made in due course.

Peter Ruse, Director, commented: "It is pleasing to see such strong support shown from both UK and Australian investors following our recent suite of investments. We continue to be highly encouraged by the progress made by Rincon Resources, and look forward to supporting this company as it undertakes its Initial Public Offering and capital raising on the ASX. The additional funds raised will allow us to pursue further complimentary investments to add to the portfolio."

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

The Directors of Gunsynd accept responsibility for this announcement.

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