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Highlights

  • Chill Brands raises £1 million via convertible loan notes at a 30% discount to last share price.

  • Funding will support vape product launch, sales expansion, and potential acquisitions.

  • Legal disputes resolved and financial reporting underway as company eyes trading resumption.

Chill Brands Group PLC (LSE:CHLL, OTCQB:CHBRF) has taken decisive steps to stabilise its financial position and resume trading in its shares, securing £1 million through a new fundraising round and renegotiating a prior funding agreement with its largest shareholder.

The consumer goods group announced on Friday that the funds were raised via convertible loan notes subscribed to by a group of investors including Jonathan Swann, the company’s largest shareholder, through his vehicle Denstone Investments.

The newly issued loan notes carry a 10% annual interest rate and mature in three years. They are convertible into ordinary shares at a price of 1.5 pence, reflecting a 30.2% discount to Chill Brands’ last trading price before its shares were suspended on 3 June 2024. Alongside the notes, investors were granted warrants to purchase one new share for each loan note held. The warrant exercise price will be set at 1.25 times the 10-day volume-weighted average share price prior to each drawdown. For the current suspension period, this price is set at 1.5 pence, resulting in the issuance of an initial 15.7 million warrants.

Proceeds from the raise will be directed towards developing and marketing Chill’s new pod-based vaping products, expanding its sales infrastructure, and bolstering working capital. The company also confirmed its intention to explore strategic acquisitions to accelerate growth.

Chill Brands restructured the terms of a £1.6 million convertible loan issued in 2023. Under the revised terms, the conversion price has been slashed from 8 pence to 2.15 pence per share—aligned with the company’s share price at the time of suspension. The maturity date has been extended by two years, from April 2026 to May 2028, and £215,000 in accrued interest will now be settled through the issuance of new shares once trading resumes.

The Chill Brands board described the new terms as “favourable,” noting that they reduce short-term cash obligations while improving the company’s financial outlook without triggering immediate shareholder dilution.

The company is making progress on the audit of its full-year results to 31 March 2024, and confirmed that interim financial statements for the six months to 30 September 2024 will follow shortly. These reports are key prerequisites for the planned reinstatement of Chill’s shares to public trading.

Separately, Chill Brands reported a legal resolution in the United States concerning a dispute with former directors over the ownership of the Chill.com domain, intellectual property, and a contested cash sum. A settlement was reached in December, restoring full control of the domain and associated trademarks to Chill Brands. The case has now been dismissed with prejudice, ensuring it cannot be reopened.