Stack BTC PLC - Revised terms of proposed acquisition of DB London

Stack BTC Plc

Revised terms of proposed acquisition of DB London Ltd t/a Direct Bullion

Related Party Transaction

Stack BTC Plc ("Stack BTC" or the "Company"), the UK-based company focused on building a portfolio of high-quality, cash-generative businesses, alongside a Bitcoin treasury, announces that, further to its announcement of 15 September 2026 (the "Original Announcement"), it has entered into revised non-binding heads of terms with Eleven Intl Limited (the "Target Vendor") in relation to the proposed acquisition of DB London Ltd, trading as Direct Bullion ("Direct Bullion" or the "Target"), a UK-based precious metals dealer (the "Proposed Acquisition").

Capitalised terms used in this announcement have the same meanings as those given in the Original Announcement, unless otherwise defined.

HIGHLIGHTS

·           Aggregate consideration unchanged at approximately £12 million

·       Consideration now to be satisfied entirely in new ordinary shares of the Company. The £3 million cash payment on Completion and all cash earn-out payments, set out in the Original Announcement, have been removed

·           £7.6 million payable in new ordinary shares on Completion, with up to £4.4 million in deferred share          consideration payable over years two to five, subject to the Target achieving EBITDA of at least £2.5 million    in each relevant year

·             The Consideration Shares to be issued at a minimum of 6p per share, and subject to a four-year lock-in

·            The Company's existing cash resources will be retained in full to support the Company's stated acquisition strategy, Bitcoin treasury strategy and general working capital requirements

·             Direct Bullion achieved audited revenues of £52.1 million for the year ending 31 January 2026 and profit after tax of £2.15 million

·             The Proposed Acquisition continues to constitute a reverse takeover for the purposes of the Aquis Growth Market Access Rulebook (the "Reverse Takeover") and a related party transaction pursuant to Rule 4.6 of the Aquis Growth Market Access Rulebook (the "Aquis Rules")

The Proposed Acquisition constitutes a related party transaction pursuant to Rule 4.6 of the Aquis Rules, as Paul Withers, a Director and substantial shareholder of the Company, is also the sole director of Direct Bullion and the sole director and shareholder of the Target Vendor.

DETAILS

The Reverse Takeover remains conditional upon the publication of an MTF Admission Prospectus reflecting the final agreed terms of the Proposed Acquisition.

In addition, the Reverse Takeover remains subject to, among other things, completion of due diligence, entry into definitive transaction documentation, the approval of AQSE, and the requisite corporate approvals. The definitive acquisition agreement will be conditional upon shareholder approval in accordance with Rule 3.6 of the Aquis Rules, which the Company will seek at a general meeting.

As the Reverse Takeover will result in the cancellation of the Company's admission to trading on the AQSE Growth Market, completion of the Proposed Acquisition is also conditional upon the Company's re-admission to trading on the Access Segment of the AQSE Growth Market in accordance with Rule 3.6 of the Aquis Rules. There can be no certainty that the Reverse Takeover will complete.

The audited financial information on the Target for the financial years ended 31 January 2026 and 31 January 2025, the description of the Target's key non-financial operating or performance measures and the other information required in accordance with the guidance to Rule 3.6 of the Aquis Rules were set out in the Original Announcement, which remains available on the Company's website at www.stackbitcoin.co.uk. Save as set out in this announcement, there have been no changes to the information contained in the Original Announcement.

Revised Terms of the Proposed Acquisition

Under the revised terms, the aggregate consideration for the Proposed Acquisition remains approximately £12 million ("Consideration"), to be satisfied entirely by the issue of new ordinary shares of the Company ("Ordinary Shares"), comprising:

·      approximately £7.6 million to be satisfied by the issue of new Ordinary Shares on completion of the Reverse Takeover ("Completion") (the "Completion Consideration Shares");

·      no consideration payable, and no earn-out, in respect of the Target's financial year ending 31 January 2027 ("Year One");

·      an earn-out of approximately £0.2 million, to be satisfied by the issue of new Ordinary Shares, after the Target's financial year ending 31 January 2028 ("Year Two"), subject to the Target achieving EBITDA of at least £2.5 million in Year Two, calculated before the cost of Bitcoin purchases (the "EBITDA Target"); and

·      an earn-out of approximately £4.2 million, to be satisfied by the issue of new Ordinary Shares over years three to five, subject to Direct Bullion achieving the EBITDA Target in each of Direct Bullion's financial years ending 31 January 2029, 31 January 2030 and 31 January 2031 ("Year Three", "Year Four" and "Year Five" respectively). If the EBITDA Target is achieved in a particular year, the Target Vendor will receive one of three equal earn-out payments of approximately £1.4 million, to be satisfied by the issue of new Ordinary Shares (such New Ordinary Shares to be issued pursuant to the earn-out being the "Deferred Consideration Shares" and, together with the Completion Consideration Shares, the "Consideration Shares").

A summary of the original and revised terms is set out below:

Each earn-out payment remains subject to Direct Bullion achieving the EBITDA Target in the relevant financial year.

The Consideration Shares will be issued at the higher of (i) 6p, being the Company's mid-market price at the close of business on 14 September 2026, being the last practicable date prior to the Original Announcement, and (ii) the issue price of any new Ordinary Shares issued by the Company before Completion. For the avoidance of doubt, any Ordinary Shares issued to related parties or Ordinary Shares issued as a result of the exercise of warrants prior to Completion will not form part of the calculation. The Deferred Consideration Shares will be issued at the same issue price as the Completion Consideration Shares.

At the minimum issue price of 6p per share, the maximum number of Consideration Shares to be issued would be 199,999,998 Ordinary Shares, comprising 126,666,666 Completion Consideration Shares and up to 73,333,332 Deferred Consideration Shares (3,333,333 in respect of Year Two and 23,333,333 in respect of each of Year Three, Year Four and Year Five). The Consideration Shares will be subject to a four-year lock-in from the date of their issue and will rank pari passu with the existing Ordinary Shares.

As the Consideration is now to be satisfied entirely in new Ordinary Shares, the Company will no longer be required to fund any element of the Consideration from its cash resources. The Company's existing cash resources will therefore be available to support the Company's stated acquisition strategy, Bitcoin treasury strategy and general working capital requirements.

Vendor Repurchase Right

The revised terms also include a new provision under which, in certain limited circumstances, the Target Vendor will have the right to repurchase Direct Bullion from the Company (the "Repurchase Right"). The events of default under which the Repurchase Right may be exercised will include insolvency events of the Company, and cessation of the Company's Ordinary Shares trading on Aquis or another recognised investment exchange. The Repurchase Right may be exercised by the Target Vendor for the period from the date of Completion until the expiry of Year Five of the earn out period.

The consideration to be paid by the Target Vendor on exercise of the Repurchase Right will be agreed between the parties with an appropriate valuation mechanism and documented in the definitive share purchase agreement.

Full details of the Repurchase Right including the agreed consideration will be set out in the MTF Admission Prospectus.

The Repurchase Right is intended to protect the Target Vendor's position given that the Consideration for the Proposed Acquisition is now to be satisfied entirely in Ordinary Shares subject to a four-year lock-in and over a five-year period. The Repurchase Right will not be exercisable in the ordinary course of business and will not affect the Company's ownership or control of Direct Bullion other than in the specified events of default set out in the definitive share purchase agreement.

Rationale for the Revised Terms

The Independent Directors, David Galan and Melisa Lawton, believe that the revised terms are in the best interests of the Company and its shareholders as a whole. The removal of all cash consideration preserves the Company's cash resources for its Bitcoin treasury strategy and future growth initiatives, while the move to an all-share structure further aligns the interests of the Target Vendor with those of the Company's shareholders. The aggregate consideration and the EBITDA performance targets attached to the deferred consideration remain unchanged, and a greater proportion of the earn-out is now weighted towards years three to five.

Rule 9 Waiver

The Proposed Acquisition continues to be expected to require a waiver under Rule 9 of the Takeover Code ("Rule 9 Waiver"). As a result of the revised terms, the number of Consideration Shares to be issued to the Target Vendor will be greater than under the original terms. The MTF Admission Prospectus will include the requisite disclosure requirements for the grant of a Rule 9 Waiver, including details of the Concert Party and its maximum potential interest in the Company's issued share capital following the issue of the Consideration Shares (including the Deferred Consideration Shares). In accordance with discussions with the Takeover Panel, the Rule 9 Waiver will be conditional upon approval by the independent shareholders on a poll at a General Meeting, with the Concert Party abstaining from voting on the relevant resolution. The granting of the Rule 9 Waiver is at the sole discretion of the Takeover Panel.

Related Party Transaction

The Proposed Acquisition, including the revised terms and the Repurchase Right, constitutes a related party transaction pursuant to Rule 4.6 of the Aquis Rules, as Paul Withers, a Director and substantial shareholder of the Company, is also the sole director of Direct Bullion and the sole director and shareholder of the Target Vendor.

Paul Withers has not participated, and will continue to refrain from participating, in any Board discussions or decisions relating to the Proposed Acquisition, including the revised terms.

In accordance with Rule 4.6, David Galan and Melisa Lawton, being the directors of the Company who are independent of the Proposed Acquisition (the "Independent Directors"), will consider whether the terms of the Proposed Acquisition, as revised, are fair and reasonable insofar as the Company's shareholders are concerned. Their opinion will be set out in the shareholder circular to be published in due course.

Board and Management

The Reverse Takeover will not result in any changes to the composition of the Board or the senior management team of the Company. Following Completion, the existing Board will remain in place and will continue to be responsible for the management and strategic direction of the Company.

Further announcements

A further announcement will be made in due course when appropriate. This will include updates on, inter alia, the Proposed Acquisition and the publication of the MTF Admission Prospectus, as applicable.

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