Cloudbreak Discovery PLC (LSE:CDL, OTC:CDBDF) has agreed to sell non-core assets and convert outstanding debts into shares after a review of the business following the appointment of Andrew Male as interim chief executive in June.
First, the company has agreed to sell its £907,710 debt related to management charges over the past two years to Cronin Capital and Cronin Services, companies associated with former CEO Kyler Hardy.
Current directors Male and Paul Gurney have agreed to assign the debt, and will pay Hardy’s vehicles £136,156.50 in consideration for the assignment.
Male and Gurney have also agreed to convert the debt into ordinary shares in the company following the annual shareholder meeting taking place a week on Friday.
Then, under a share purchase agreement, Cloudbreak has struck a deal to sell assets it has decided are “not core to the company's business strategy” due to their association with Cronin.
These, including 100% of Kudu Resources, the Foggy Mountain property in British Columbia, the Le Blache royalty agreement, and shares in Buscando Resources Corp (CSE:BRCO) and Temas Resources (CSE:TMAS, OTCQB:TMASF) Corp, will be sold to a newly incorporated company called The Galleon 20223 Ltd for £102,000.
Galleon, which has a single director, Canadian James Douglas Rogers, will then transfer the assets to the Cronin vehicles plus an additional £207,000 in cash and in turn will receive all the Cronin vehicles’ 112,717,328 ordinary shares in Cloudbreak, becoming an 18.5% shareholder.
Galleon has agreed with Cloudbreak that it will not dispose of its shareholding in the company for a 12-month period.
Male said: "We are happy to have agreed to these arrangements and agreements with the Cronin parties and former management and we look forward to updating our shareholders in the near future."
Cloudbreak said it will provide shareholders with a comprehensive update on all assets, opportunities and capital structure once all the deals have closed, expected by 21 November.