Chill Brands Group PLC (LSE:CHLL, OTCQB:CHBRF) has raised £1 million through the issue of convertible loan notes and restructured the terms of an earlier funding agreement with its largest shareholder as the consumer goods group seeks to stabilise its finances and restart trading in its shares.
The London-listed company said on Friday that Jonathan Swann, its largest shareholder, subscribed to the fundraising alongside other investors.
The loan notes, which carry 10% annual interest and mature in three years, convert to shares at 1.5 pence each. That represents a 30.2% discount to the closing price on the day before the suspension of the company’s shares on 3 June 2024.
As part of the package, investors were issued warrants allowing them to buy one new share for each loan note held.
The exercise price for those warrants will be 1.25 times the volume-weighted average price of the shares over ten trading days prior to each drawdown. During the suspension of trading, this average is set at 1.5 pence. An initial 15.7 million warrants will be issued.
The funds will be used to develop and market Chill’s new pod-based vaping products, expand sales infrastructure and support working capital. Chill Brands said it also intends to pursue potential acquisitions.
Swann, who participated through his company Denstone Investments, has also agreed to revised terms on a previous £1.6 million investment made via convertible loan notes in 2023.
The conversion price on those notes has been reduced from 8 pence to 2.15 pence a share, in line with the price at the time of the suspension. The maturity date has been extended from April 2026 to May 2028, and £215,000 of accrued interest will be settled in shares following the resumption of trading.
Chill said the board considered these revised terms “favourable” as they reduce near-term cash outflows and improve the balance sheet without immediate dilution.
The company confirmed that the audit of its full-year results to 31 March 2024 is near completion, and that interim accounts for the six months to 30 September 2024 will follow shortly. Chill intends to seek reinstatement of trading in its shares once the financial reports are published.
In a separate development, the company said it had concluded all legal proceedings in the United States against former directors. The case related to ownership of the Chill.com domain, intellectual property and a disputed sum of cash.
A settlement was reached in December, returning control of the domain and trademarks to Chill. The claim has now been dismissed with prejudice, meaning it cannot be refiled.
“This brings the legal proceedings to a definitive conclusion,” Chill said, adding that it now intends to focus fully on executing the company’s strategy.