Business Update

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

20 May 2022

TINTRA PLC

 ("Tintra", the "Group" or the "Company")

Business Update

The board of directors (the "Board") of Tintra, the fast-growth FinTech & RegTech business, announces an update to its business activities as it continues to progress the strategy that was first outlined to shareholders at last year's annual general meeting. 

Update on proposed sale of Lottery Business

The proposed sale of certain assets (the "Lottery Administration Business") of Prize Provision Services Limited ("PPS") to Sterling Management Centre Ltd ("Sterling"), which was first announced on 21 October 2021, has taken far longer to complete than either party expected.  Both Sterling and Tintra are working closely together, on an almost daily basis, and it is fully expected the transaction will close broadly as originally anticipated.

Despite this close collaboration, the transaction remains some eight to twelve weeks from completing all of its regulatory hurdles. Consequently, the Company and its advisors have created an interim solution that allows the Company to achieve its dual goal of completing the transaction with Sterling and freeing up the Company to complete its funding round as outlined in earlier announcements.

A special purpose vehicle, PPS Asset Realisation Co Limited, has been incorporated as a company limited by guarantee (the "SPV"), which yesterday purchased Prize Provision Services Limited for £1 (the "Transaction").  The director of the SPV and a majority of the members of the SPV are independent third parties, with the Company holding a minority (one-third) of the voting rights.  As the SPV is a company limited by guarantee, the members, including the Group company, hold no shares.

This structure allows for the continued operation of PPS so that it can continue its good work in communities across the country whilst the SPV, under the guidance of these third parties, will continue to progress the sale of the Lottery Administration Business to Sterling.

The nature of the structure is such that once the Transaction with Sterling completes, the eventual proceeds of the sale will be received by the Company after settling the liabilities of PPS. The Board expects the proceeds received from the Transaction, will be equal to, or materially the same as, that outlined in the announcement of 21 October 2021.

As a result of the Transaction, PPS will no longer be consolidated in the Group accounts and an estimated net benefit of around £140k is expected to be reflected in the current year's Group accounts.  The sale of PPS completes the disposal of the non-core activities of the Group and leaves Tintra as a focused FinTech & RegTech business.

FinTech & RegTech Business

With the change in strategy for its UK business that was announced on 29 March 2022, the Group's UK FinTech activities will in future be undertaken by the subsidiary established for the Small Bank Licence and Electronic Money Institution ("EMI") authorisation applications set out in that announcement. 

The activities of the Company's legacy subsidiary in the sector, St Daniel House Limited, will be moved into either this new subsidiary, the Group's Mauritian unit, or wound down as part of this process as is appropriate.

The Company continues to make faster than projected progress with its technology stack and in its discussions with regulators around the world.

As part of this the Company, further to its announcement (19 April 2022) of a Mauritius payment licence, has recently incorporated a new subsidiary in Singapore as the latest development in its growth strategy. This subsidiary, named Tintra Consult (Singapore) PTE, is in the process of hiring a small team that will begin the process of understanding the regulatory landscape prior to the Company making its fourth bank licence application there during 2023.

Funding

The development of the Company's FinTech & RegTech business as described above is moving along across all verticals and the various teams continue to scale at pace. Following the change in strategy from acquisition of a UK EMI to the new application, as announced previously and explained above, the Company may require less capital in H122 than projected, as this change in strategy has an immediate cash saving of circa £3,000,000-£4,000,000. 

The Middle Eastern investor (announced 10 January 2022) has reconfirmed in the past week their interest in continuing with an investment into the Company. However, the Board is currently evaluating whether to pursue further subscriptions under its current Funding Round on terms, as originally set out in its announcement of 10 January 2022, or to amend this strategy. A decision on this is expected to be made toward the end of June and a further update on this will be made when that decision is made.

The Company's website, www.tintra.com, is being relaunched over this weekend to reflect these significant developments in the Company's evolution and should have completely finished propagation by Monday 23 May 2022.

Richard Shearer, the Company's Chief Executive said "The disposal of PPS marks a giant step in our evolution into the world's pre-eminent provider of banking infrastructure to the emerging world.

We are now solely focused on our core business with all legacy business divested. This watershed moment now allows us access to capital that we were unable to access due to cultural sensitivity and means we can focus on our passion: building technology that others can't, to do things in territories that others won't.

I'd like to thank the team at Sterling for their immense assistance and patience in the sale of PPS and I very much look forward to hearing that the Transaction has completed and that the good people at Sterling can continue to manage the lotteries for those hundreds of charities around the country following its acquisition of PPS business.

As I've discussed previously, the current 90-Day Project, which completes on June 15^th, is moving the business along at a rate of knots that is quite something to behold. Two of the teams believe they are already closing in on patentable processes and technology, whilst others that are building the deep banking core are starting to illustrate practically the things we have been saying theoretically for some time now.

We plan to publish parts of the results of the 90-Day Project in a document that will act as our North Star, and I look forward to sharing it. This next step will be another watershed moment as it will for the first time allow the market to see in detail the vision and the plan we are executing on.

I say this as I'm very aware that until this point, we have been moving exceptionally fast and at times making a lot of announcements that might not in a silo appear to naturally tie together.

The publishing of this document will tie all of those strings together for our shareholders and the broader marketplace and articulate our full and complete vision as we continue to strive to make real fiscal inclusion in emerging markets a reality as we build banking infrastructure that is truly beyond borders, culture and geography."

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