LONDON, UK: Insig AI plc (AIM: INSG), the data science and machine learning group, announced the disposal of its legacy subsidiaries, Sport in Schools Limited and The Elms Group Limited for a total consideration of £500,000, as well as a new project win.
On 14 November 2023, the company’s 85.87% owned subsidiary, Pantheon Leisure plc, entered into a sale agreement for Sports in Schools and Elms Group with Haygreen Limited for a total cash consideration payable of £300,000. Haygreen Limited is a newly incorporated company wholly owned by Jason O’Connor, a current director of Sports in Schools.
Sports in Schools generated a profit before tax of approximately £31,000 during the year ended 31 March 2023 whilst Elms Group generated a loss before tax of approximately £12,000 during the same period.
Pursuant to the Disposal and in addition to the Cash Consideration, Sports in Schools has declared a dividend payable to Patheon of approximately £262,000 of which approximately £210,000 will be used by Pantheon to partially settle an intra-group loan provided by Insig AI plc. The remaining £52,000 will be used by Pantheon to fully settle an intra-group loan directly with Sport in Schools.
Insig AI will use the cash consideration for general working capital purposes.
As previously announced on 12 September 2022, Richard Bernstein entered into a convertible loan agreement with the Company for a total consideration of £0.75 million, secured against the ordinary shares of Westside Sports Limited owned by the Company, which had interests in Ultimate Player Limited, Pantheon Leisure plc, Sports in Schools Limited and The Elms Group Limited. Upon completion of the Disposal, Richard Bernstein has agreed to revise the terms of the Convertible Loan including releasing the security held over West Sports Limited.
The disposal to Haygreen Limited, a company controlled by a related party of the Company will constitute a related party transaction under the AIM Rules. Under AIM Rule 13, all the directors of Insig AI are considered to be independent in respect of the Disposal. Having consulted with the Company’s nominated adviser, the Directors consider that the terms of the Disposal are fair and reasonable insofar as the Company’s shareholders are concerned.
Following the Disposal, the Company and Mr Bernstein have agreed to revised terms for the Convertible Loan which includes the release of security over Westside Sports Limited and a new conversion price of 20.0 pence per ordinary share of 1 pence each in the Company (“Ordinary Share”), being a 21.2 per cent. premium to the closing price on 14 November 2023. The Directors (excluding Richard Bernstein), having consulted with Zeus Capital Limited, the Company’s nominated adviser, consider that the terms of the Convertible Loan are fair and reasonable insofar as the Company’s shareholders are concerned.
