CloudBuy plc (AIM:CBUY) announced a private placement of new, secured 10-year convertible and non-convertible loan notes for minimum gross proceeds of £3,274,300 and a maximum gross proceeds of up to £5,750,000 on March 24, 2016. The transaction will include participation from existing investor, Robert Sella. The transaction will comprise of 4,172,562 secured 10-year convertible loan notes at £1 per note 1,577,438 secured 10-year non-convertible loan notes at £1 per note. The notes will be issued at its par value. The notes will have a term of 10 years with an early repayment option on 5th anniversary of the instrument. The notes will carry a minimum of £3,274,300 in first draw down then in increments of a minimum of £1,000,000 in size. The notes will be convertible at a fixed conversion price of £0.065 per share if the conversion at any time in full or in part at the election of the holder of the loan notes or at £0.01 in the event that the outstanding amount of the convertible loan notes including principal and interest has not been repaid or converted by the final redemption date. The loan notes will be secured, by way of a secondary charge over the company's assets with the charge ranking behind the company's clearing bank facility provider from time to time where the priority charge over the company's assets will be limited to £300,000 in value.

The loan notes when issued and outstanding shall rank pari passu, equally and rateably, without discrimination or preference among themselves and as secured obligations of the company. The loan notes will be freely transferable by Roberto Sella as the holder of the loan notes subject always to him transferring all and not some only of the loan notes. Until the notes are repaid by the company or, in the case of the convertible loan notes, repaid by the company or converted into ordinary shares, interest shall accrue and be paid on the principal amount of the loan notes outstanding and, in respect of the convertible loan notes, so far as not converted into ordinary shares at a rate of 2.33% per annum and shall become due and payable by the company to the holder on each 6-month anniversary of the date of issue. If the company fails to pay redemption monies or interest when due, interest shall continue to accrue on the unpaid amount at a rate of 2.33% per annum. On any date on which interest on the notes is payable, the company may at its own option issue to Roberto Sella as the holder of the notes that number of additional payment in kind loan notes in satisfaction of the company's obligation to pay interest on any such date of £1 nominal amount that equals every £1 of interest due to Roberto Sella as the holder of the loan notes. The company's obligations in respect of the loan notes shall be secured by a debenture over the company's assets in favor of Roberto Sella. The notes can be redeemed at its 5th anniversary or a date not less than 20 business days following a material breach by the company of any of the terms and conditions, date not less than 20 business days following the occurrence of certain events of default, and a date not less than 20 business days following a change of control of the company. The transaction is subject to approval from the Panel on Takeovers and Mergers as well as approval by the company's independent shareholders at a General Meeting.