LETTER FROM THE CHAIRMAN
ANGELFISH INVESTMENTS PLC
(Incorporated and registered in England and Wales with No. 06400833)
Directors: Registered Office:
Andrew Flitcroft, Chairman and Chief Executive Officer Kings Court
Richard Ian Walker, Non-Executive Railway Street
6 December 2013
Proposed creation of Cumulative Redeemable Preference Shares 2021
Proposed Capital Reduction
Notice of General Meeting
The Company is proposing to create a class of Preference Shares and to raise up to £4.2 million (equivalent
at current exchange rates to 5 million, the limit for which funds can be raised without a prospectus).
The Company has accumulated losses on its profit and loss account of approximately £3.63 million as at 30
June 2013. While this deficit exists, the Company is not able to make distributions to Shareholders, and
would not be able to pay preferential dividends on the Preference Shares. Your Board considers that it is
in the interests of Shareholders to eliminate this deficit, and the Company proposes to carry out the
Capital Reduction as described below. The Capital Reduction is subject to approval by Shareholders in
general meeting, and to confirmation by the court.
Notice of a General Meeting to create the Preference Shares and make consequential changes to the Articles
of Association, and to approve the Capital Reduction, is set out at the end of this document. The General
Meeting is to be held at 12.05 p.m. on 23 December 2013 or, if later, immediately following the annual
general meeting convened for the same date at Kings Court, Railway Street, Altrincham, Cheshire WA14 2RD.
2. Preference Shares
It is proposed to create a class of Preference Shares carrying a preferential dividend and repayable in
2021. In order to widen the attraction of the Preference Shares to potential investors, it is proposed to
apply for the Preference Shares to be admitted to trading on the ISDX Growth Market. It is also proposed
that subscribers for Preference Shares will be granted Warrants to subscribe for Ordinary Shares.
The creation of the Preference Shares is subject to the approval of Shareholders in General Meeting, and
resolution 2 set out in the notice at the end of this document is a special resolution to be proposed for
this purpose. The grant of authorities to allot the Preference Shares (and Ordinary Shares arising on the
exercise of Warrants) is sought by resolution 3 set out in the notice at the end of this document.
It is proposed that the Preference Shares will be issued at £1 per share, and that they will have the
following principal terms:
- a cumulative preferential dividend at a rate equivalent to 7.1% on the issue price
- no rights to vote, unless the preferential dividend is in arrears for at least six months, and in
certain other limited circumstances
- redeemable at the issue price in 2021.
The rights to the Preference Shares will be contained in the Company's Articles of Association, and are set
out in full in the notice of General Meeting at the end of this document.
No agreement has been entered into for the placing or subscription of Preference Shares. The Company has
held discussions with Solutions Associate as to the development of preference shares as an asset class
capable of being held in self invested pension plans ("SIPPs"). Solutions Associate is a company whose
network has been established to help companies access fundraising markets, and it has agreed to facilitate
introductions to various counterparties in connection with subscriptions for Preference Shares. The
Company has agreed in principle that fees for their services would be paid to Solutions Associate. If the
full amount of £4.2 million is raised, such fees would amount to £1.05 million which, spread over seven
years, is equivalent to an interest rate of approximately 3.6% per year, and means that the cost of this
capital would be approximately 10.7% per year. On full subscription, the net proceeds received by the
Company would be £3.15 million.
The Company intend to issue Preference Shares once the Capital Reduction described below has become
effective. At that time, application would be made for the Preference Shares to be admitted to trading on
the ISDX Growth Market. Subscriptions for Preference Shares would be conditional upon such admission
It is anticipated that the net proceeds of the issue of Preference Shares would principally be made
available for investment in One Media, to fund the development and manufacture of computer tablets, and in
particular the funding gap between deposit and balance payments on order of products from the manufacturer
and receipt of deposit and balancing payment from the end customer to One Media together with any shipping
and associated delivery costs. It is anticipated that this should help accelerate the development of One
As described above, it is proposed to grant Warrants to subscribers for the Preference Shares. Warrants
will be granted to each subscriber on receipt of the subscription monies for their Preference Shares. The
Warrants would entitle the holder to subscribe for Ordinary Shares an amount equal to up to 25% of the
amount subscribed by the holder for their Preference Shares. The exercise price for each Warrant will be
the offer market price for an Ordinary Share (as derived from the ISDX Growth Market) on the date when
subscription monies from the issue of the relevant Preference Shares are received by the Company. In each
case, the Warrants would be exercisable until 31 March 2021.
4. Capital Reduction
Based on the Company's audited accounts for the year ended 30 June 2013, the Company has accumulated losses
on profit and loss account of approximately £3.63 million.
In order to eliminate this accumulated deficit (together with any additional losses incurred in the period
up until the date when the Capital Reduction takes effect) and to enable distributions to be made in future
(including in particular, the dividends that will become due on the Preference Shares), it is proposed to
cancel the Deferred Shares and the balance standing to the credit of the share premium account of the
It is anticipated that the Capital Reduction will be sufficient to write off the entirety of the deficit on
its profit and loss account and create reserves of approximately £330,000, which would be distributable.
The Company is not currently trading and the accumulated deficit is not likely to alter materially up to
the date upon which the Capital Reduction takes effect.
The Capital Reduction requires the approval of Shareholders by special resolution and, under the CA 2006,
the subsequent confirmation of the Court and registration at Companies House of the relevant Court order,
together with a statement of capital. If resolution 1 set out in the notice at the end of this document is
passed, it is proposed to commence proceedings to obtain the confirmation of the Court as soon as possible.
It is expected that the final Court hearing at which the Court will confirm the Capital Reduction will take
place on 29 January 2014.
The Court will require to be satisfied that there is no real likelihood that the Capital Reduction would
result in the Company being unable to discharge any debt or claim as it fell due. It is for the Court to
determine whether any protection is required for creditors. The Company will put in place such form of
creditor protection as the Court may require in order to permit dividends to be paid following the capital
reduction taking effect.
Following the Capital Reduction, there will be no change in the number of Ordinary Shares in issue.
The Directors reserve the right not to seek confirmation of the Capital Reduction if they believe it ceases
to be in the best interests of the Company.
4. One Media
Under a memorandum of understanding dated 18 January 2013 and subsequent subscription agreement entered
into on 30 April 2013, the Company has invested an aggregate of US$210,000 in secured convertible loan
notes to date, and a further US$290,000 may be invested into One Media under the subscription agreement
subject to the satisfaction of certain conditions. The ability to provide additional funding through the
issue of Preference Shares should enhance One Media's ability to secure product orders.
The Company has an option to acquire the entire issued share capital of One Media, subject inter alia to
agreement being reached as to the terms of such acquisition.
5. General Meeting
A notice is set out at the end of this document convening a General Meeting to be held at Kings Court,
Railway Street, Altrincham, Cheshire WA14 2RD, at 12.05 p.m. on 23 December 2013, or as soon thereafter as
the Company's annual general meeting convened for the same date has been concluded or adjourned. At the
General Meeting, special resolutions will be proposed:
(a) to approve the Capital Reduction;
(b) to change the Articles to create the Preference Shares; and
(c) to grant general authority to allot securities, and specific authority to allot securities for
cash, disapplying statutory pre-emption rights, for the purposes of the Preference Shares and the
issue of Ordinary Shares on the exercise of the Warrants.
If the Preference Shares are all issued, the exercise of the Warrants in full would, if granted at an
exercise price equal to the current offer price on the ISDX Growth Market, result in the issue of 210
million Ordinary Shares, and the receipt of additional cash of £1.05 million. Such Ordinary Shares would
represent approximately 22.8% of the ordinary share capital as enlarged by the exercise of the Warrants.
6. Action to be taken
Shareholders will find enclosed with this document a form of proxy for use at the General Meeting. Whether
or not you intend to be present at the meeting, you are requested to complete, sign and return the form of
proxy to the Company's registrars, Share Registrars Limited, Suite E, 1st Floor, 9 Lion & Lamb Yard,
Farnham, Surrey GU9 7LL, as soon as possible but, in any event, so as to arrive by no later than 12.05 p.m.
on 19 December 2013. The completion and return of a form of proxy will not preclude you from attending the
meeting and voting in person should you wish to do so.
The Directors consider that the creation of the Preference Shares, grant of Warrants, the Capital Reduction
and the Resolutions to be proposed at the General Meeting of the Company to be in the best interests of the
Company and its Shareholders as a whole and accordingly unanimously recommend that Shareholders vote in
favour of the Resolutions, as I intend to do in respect of my own beneficial holding which amounts to
4,077,844 Ordinary Shares (representing approximately 0.57 per cent of the existing issued ordinary share
capital of the Company).