Placing to raise £1.4m & Publication of Prospectus

GSTechnologies Limited (LSE: GST), the integrated information and communication technology infrastructure solutions provider, is pleased to announce that the Company has raised gross proceeds of £1.415m through a Placing of 141,500,000 Shares of no par value in the Company ("New Shares") at a price of 1p per share. The Placing was arranged by Optiva Securities Limited.


The issue of the New Shares pursuant to the Placing are within the Company's existing allotment authorities and require the publication of a Prospectus, as detailed below.

Background to and reasons for the Placing

The Company's strategy is to continue to develop its existing ICT and IoT offerings serving major governmental and private organisations worldwide while at the same time expanding its range of fintech services using blockchain technology.


On 5 March 2021 the Board announced that it intended to expand its focus into new higher-growth businesses based on blockchain technology, particularly those applicable to the banking and financial services sectors. The Company has set up two new wholly owned subsidiaries, GS Fintech Ltd ("GSF UK") in the UK and GS Fintech Pte Ltd ("GSF Singapore") in Singapore to develop this strategy and has taken the first steps on this path with the Collaboration Agreement with Wise MPay as announced on 28 May 2021 under which Wise MPay has agreed to provide the Company with software and services to develop products and services based on blockchain technology for the banking and financial services sector in exchange for the issue of new Shares.


The Group's goal is to enable its customers to conduct peer-to-peer payments cheaply and globally. The Group will be able to facilitate moving value from the traditional banking system into the Group's stablecoin network and applications, and vice-versa.


GSF UK intends to seek an Authorised Payment Institution ("API") licence from the Financial Conduct Authority in the UK ("FCA"). Should that licence be obtained, the Group will be able to connect to traditional banking payment systems and agent networks and operate a remittance business in the UK.


The Directors believe the Group will be well positioned to leverage a variety of neobanking business models and monetization strategies, including deposit/withdraw fees, FX spread, and transaction fees. The Group will seek to obtain any further licenses that may become necessary by applicable law at a future point in time.


The Group's neobanking products are expected to be B2C and provide domestic remittance (P2P) payments, international remittances, multicurrency wallet services and domestic and international online retail solutions. However, initially, the Group will only conduct B2C transactions and not B2B transactions until further notice.


The Group also intends to seek an authorized electronic money institution ("AEMI ") licence in the UK or an electronic money institution ("EMI") licence in the EU or both which will empower the Group to offer a much broader scope of financial services to its customers.


The funds raised from the Placing will be principally used to cover sales and marketing costs and the costs of development and implementation of the Wise MPay technology. GST also intends to use the proceeds of the fundraising to take advantage of further strategic opportunities as they arise.

Collaboration Agreement with Wise MPay

The Company announced on 21 April 2021 that it had signed a Memorandum of Understanding with Wise MPay Pte Ltd ("Wise MPay") with a view to enhancing its blockchain and new technology development capabilities. The provision of services and software by Wise MPay to the Company is governed by a Collaboration Agreement (the "Agreement"), the signing of which was announced on 28 May 2021. The consideration for the Agreement is to be satisfied by the issue and allotment to Wise MPay of 100,000,000 New Shares ("Consideration Shares"). The issue of the Consideration Shares is conditional, inter alia, upon Admission, as described below.


Under the Agreement, Wise MPay will supply the Company with a number of standard and bespoke software packages which include, inter alia, software to enable the Company to establish a remittance portal (GSend), an eWallet app (GS Money), Know Your Client (KYC) administration and an encryption engine. Additionally, Wise MPay will supply four enterprise blockchain consensus nodes that come with 25 million stake tokens each, based on the Coalculus blockchain platform, to enable transaction validation on the Coalculus network for transactions undertaken by GST's proposed customers in US dollars, Euros, Sterling and Chinese Yuan.


These software packages being supplied by Wise MPay will be integrated on the Company's cloud server, together with software supplied by the Company and third party payment gateway packages. Wise MPay has agreed to provide reasonable ongoing support and training to the Company in respect of the software and systems it is supplying, together with software and Coalculus platform upgrades when available.

Tone Goh, Chairman of GST, commented: "I am delighted to announce this successful fundraising and welcome a number of new shareholders to GST. The Placing will provide funds for us to progress our fintech plans, in particular in conjunction with our collaboration partner, Wise MPay. I look forward to providing further updates in due course as we seek to rapidly build a blockchain enabled neobanking business."

The Prospectus

In order for the Company to issue the New Shares pursuant to the Placing and the Agreement, and for them to be admitted to trading on the Standard Segment of the Official List and on the Main Market of the London Stock Exchange the Company is required to publish a prospectus approved by the FCA. The prospectus has been approved by the FCA, as competent authority under Regulation (EU) 2017/1129 as it forms part of retained direct EU legislation (as defined in the European Union (Withdrawal) Act 2018, as amended). The Prospectus is available for inspection at the National Storage Mechanism (https://data.fca.org.uk/#/nsm/nationalstoragemechanism) and on the Company's website at https://www.gstechnologies.co.uk.

GSTechnologies Ltd Prospectus 21 09 06
.pdf
Download PDF • 917KB

Admission and Total Voting Rights

The Placing has been conducted utilising the Company's existing share authorities. The New Shares will rank pari passu in all respects with the Existing Shares. The Placing is conditional, inter alia, on admission of the Placing Shares to trading on the Main Market of the London Stock Exchange ("Admission") becoming effective. Application will be made to the London Stock Exchange for the Placing Shares and the Consideration Shares to be admitted to trading on the Main Market of the London Stock Exchange and the Standard Segment of the FCA Official List. It is expected that Admission will become effective and that dealings in the Placing Shares and the Conside


ration Shares on the Main Market of the London Stock Exchange will commence on or around 13 September 2021.

On Admission, the Company will have 1,434,982,002 Shares in issue, each with one voting right. There are no shares held in treasury. Therefore, the Company's total number of Shares and voting rights will be 1,434,982,002 and this figure may be used by shareholders from Admission as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.


Placing Statistics

Number of Existing Shares 1,193,482,002

Number of New Shares to be issued pursuant to the Placing 141,500,000

Number of New Shares to be issued pursuant to the Agreement 100,000,000


Number of Shares in issue on Admission 1,434,982,002

New Shares as a percentage of the Enlarged Share Capital 16.8%

Placing Price 1p

Gross Proceeds of the Placing £1.4m

Net Proceeds £1.1m

Defined Terms

Defined terms in this announcement which are not otherwise defined herein shall have the same meanings as in the Prospectus.


Enquiries:

The Company

Tone Goh, Executive Chairman

+65 6444 2988


Financial Adviser

VSA Capital Limited

+44 (0)20 3005 5000

Simon Barton / Pascal Wiese

Placing Agent

Optiva Securities Limited

+44 (0) 20 3137 1902

Vishal Balasingham

Financial PR & Investor Relations

IFC Advisory Limited

Tim Metcalfe / Graham Herring / Florence Chandler

+44 20 (0) 3934 6630