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Business Update
Company’s liquid assets (cash/liquid investments) at the end of the quarter were €24.5m, evidencing the strong performance of ISX across its operations.
Flykk and ISXMoney are ISXplc's main revenue drivers, with card acquiring now representing less than 2% of our revenue.
As flykk is scaling, and to facilitate further growth, we have deployed this service under a new Bank Identification Code (BIC) ISEMCY22FLY, allowing us to separate our retail vs commercial operations across separate BIC’s.
The focus this quarter will be on flykk® with public release of our Diners Card, whilst preparing for additional features to be added to the flykk product.
The flykk app is available from the Apple and Google stores.
Admission to List Update
The Company has commenced the process for admission to list on a regulated market.
Shareholders should note that the process is still very fluid, and subject to change as to approach and timing.
Prospectus & Listing Exchange
An EU Directive compliant prospectus allows for admission to any EU-Regulated market, which markets provide regulatory consistency with the core of our operations. The EU prospectus requires our Cypriot securities regulator, CySEC, and the regulator of our target exchange, to jointly review and approve. CySEC adheres to the requirements of the European Securities and Markets Regulator (ESMA)
ISX has made further progress on its listing and has entered into preliminary discussions with the following EU-regulated markets:-
- Frankfurt Stock Exchange (FWB)
- NASDAQ Nordics (Main Market)
- Euronext (Amsterdam or Oslo)
The Company at this stage is evaluating the costs, liquidity, advantages and disadvantages of each exchange.
Subject to satisfactory Clearing and Settlement process resolution, the Company intends to submit its prospectus for admission to list by the end of Q4 2024. The prospectus will be lodged with CySEC as our home regulator, and passported via the European Securities and Markets Authority (ESMA) to the home state of our selected exchange. The CySEC prospectus review and passport process will take around two months from the Company's submission.
The Company will not likely be in a position to submit a prospectus to CySEC before end Q4 2024, as Clearing and Settlement arrangements need to be finalised in advance and included in the Prospectus (or at least satisfy the relevant exchange that these are in place).
'Clearing and Settlement'
Clearing and Settlement of securities in the EU is complex, and requires securities to be held by an EU-Regulated Central Securities Depositary (CSD).
Usually, the CSD is co-located with the primary listing exchange.
NASDAQ Nordics however cannot trade Cypriot securities directly, and Swedish Depositary Receipts (SDR’s) would need to be issued to all holders to permit trade. NASDAQ Nordics trades in either EUROS (€ or Swedish Kroner (SEK), however, all capital raises are conducted in Swedish Kroner.
FWB’s CSD is not legally pre-cleared to allow for trade of Cypriot depositary receipts or securities, having pre-cleared only 13 of the 27 EU member states. However, the Cyprus Stock Exchange CSD links via Clearstream to FWB for Clearing and Settlement, and this approach is being explored.
Euronext Oslo is able to onboard Cyprus securities directly, however, the exchange trades and capital is raised in Norwegian Kroner (NOK), not EUROS (€. However, Euronext Oslo has the largest number of Cypriot companies listed as an EU Regulated market.
Euronext Amsterdam is able to onboard via Depositary Receipts, however, these would not be transparent to holders or the Company, except via the Listing Agent’s (Sponsor Broker’s) register.
Neither Euronext options are considered optimal due to these factors, however, discussions are ongoing to establish if there are alternatives.
The Company is reasonably confident that it will be able to establish Clearing and Settlement via the Cyprus CSD with at least one of the above exchanges.
London Stock Exchange
A primary listing on LSE is cost prohibitive given its declining market share and liquidity. However, there are prospects that the LSE may improve following the FCA’s July 2024 revised listing rules.
The UK FCA’s July 2024 revised listing rules present an opportunity for the streamlining of EU listed companies to be admitted to list onto the London Stock Exchange. This approach, coupled with a primary EU listing, may represent the optimum solution for shareholders, outside of a North American listing.
‘Spread'
For liquidity and spread, the Company will require 25% of the shareholdings (other than those shares held by Directors and insiders) to be onboarded to an EU broker.
Whilst a direct entry/listing is considered desirable by many of our shareholders, if the company is unable to formalise Clearing and Settlement of Cypriot securities and/or it cannot achieve 25% free float via registration of shareholders, it may need to look at alternatives outside of EU Regulated market’s and/or direct entry.
The alternative may include an Initial Public Offering (IPO) to provide 10% free float on the assumption that the 15% required to achieve 25% will be possible via the TOP20 shareholders.
Top Hat
As an Australian prospectus will be required to Top Hat the Company in advance of any EU-Regulated market listing, the Top Hat process will be deferred until post listing, when Australian requirements may be less onerous as a consequence of being listed on a ‘premium exchange’.
Any secondary listing would take place post the Top-Hat. The Top Hat remains important to separate our operating companies from our listed holding company.
Stock Brokers
At this stage for our retail holders, we recommend onboarding either to our Cyprus Listing Agent who has been appointed under securities regulations, www.globalcapital.com.cy or to the pan European broker https://www.interactivebrokers.co.uk/en/home.php
ASIC Case
The case has concluded with Judgment having been handed down.
A summary of the case is here (Southern Cross statement) and here
Further Updates
ISXPlc will provide updates via our email, website, twitter feeds and LinkedIN pages with news as it occurs.
ISXPlc Investor relations can be contacted via email at [email protected] (note that we can not / do not respond to queries re Southern Cross Payments SP1)
Regards
N Karantzis
Managing Director & CEO
ISX Financial EU Plc
© Copyright 2022 ISX Financial EU Plc, Makrasykas 1, KBC North, Strovolos, 2034, Nicosia, Cyprus
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