EKOBOT AB (publ) (the "Company" or "EKOBOT") has entered into a letter of intent with HH Agriculture Investments B.V. ("HH Agriculture" or "Buyer") through which EKOBOT will transfer its entire business to HH Agriculture (the "Transaction"). The Transaction is conditional upon, inter alia, that the general meeting of EKOBOT resolves to approve the completion of the Transaction and that the Purchaser has found that tests of the Company's product have been satisfactory. Notice of an extraordinary general meeting to approve the Transaction will be published in a separate press release. Provided that an asset transfer agreement is entered into and completed, that a satisfactory due diligence is carried out and that customary conditions are met, the Transaction is intended to be completed during May 2024.
The transaction in brief
- EKOBOT has entered into a letter of intent with HH Agriculture to enter into a so-called asset transfer agreement regarding a transfer of all of EKOBOT's current assets. However, the Company will still retain the services required to fulfil the listing requirements under the Nasdaq First North Growth Market rules.
- The purchase price for the Transaction amounts to EUR 260,000 and will be paid partly in the form of an amount of EUR 25,000 relating to the exclusivity granted to the Buyer to negotiate with the Company on the Transaction, and partly in the form of an amount of EUR 235,000 which will be paid on the date of closing. The payment of EUR 25,000 shall be paid by the Buyer on the date of the conclusion of the letter of intent and cannot be refunded by the Company unless the Transaction is not approved by the Company's shareholders at an extraordinary general meeting. The Buyer shall also reimburse EKOBOT for the Company's salary costs during April 2024 (including social security contributions) up to EUR 35,000.
- In addition to the purchase price, the Buyer has undertaken to take over one of the Company's existing bank loans as well as another of the Company’s existing debt obligations, amounting to a total of approximately EUR 540,000.
- The Transaction is, inter alia, conditional upon (i) the Buyer taking over the bank loan as set out above and that the bank approves the debtor swap, (ii) the Buyer taking over the Company's existing debt obligation to and that the creditor approves the debtor swap, (iii) the Buyer conducting tests of the Company's product during the period 20-25 April in the Netherlands and finding these satisfactory and (iv) the Buyer conducting a due diligence with satisfactory results. Furthermore, the Transaction is conditional upon an extraordinary general meeting of the Company voting in favour of approving the Transaction.
- The Transaction also includes the right to the Company's current company name "EKOBOT". Therefore, upon completion of the Transaction, the Company shall undertake to convene a new general meeting to change the company name and the objects of the Company.
Financial impact for EKOBOT
- The transaction will have a positive short-term cash flow impact for EKOBOT.
- The accounting loss will preliminarily amount to approximately SEK 14.3 million, mainly through the impairment of intangible assets.
- Due to the fact that the Buyer assumes liabilities from EKOBOT, the Company estimates that the total consideration for the Transaction, from an accounting perspective, amounts to approximately SEK 8.9 million.
- From 2 May, the Company is expected to have a net cash position and very low operating costs, which is considered sufficient for the purpose of evaluating and executing a reverse takeover.
Background to the Transaction and the Company's continued operations
During the first quarter of 2024, EKOBOT carried out a rights issue. The outcome of the rights issue meant that the Company did not receive sufficient capital to continue operating the business to the extent required. The board has therefore carefully considered various options and found that a divestment of the business through the Transaction is the best option for the Company's shareholders. The Company retains the resources required to continue to fulfil the listing requirements and the Board's intention is to continue to explore the possibilities of carrying out a reverse takeover.
