Funding Update: Refinancing of existing facility

The board of EQTEC plc (AIM: EQT), is pleased to confirm that they have secured a refinancing of its existing secured lending facility. The new funding replaces the previous funding with a non-convertible secured term loan facility with no scheduled repayments until 21 May 2026.

As announced on 20 November 2023 (the "Refinance Announcement"), the Company refinanced the historic debt facilities with YA II PN Ltd and Riverfort Global Opportunities PCC Limited (the "Lenders"). The Lenders agreed to provide a secured facility of up to £10.0 million, as detailed in the Refinance Announcement (the "Previous Funding"). Since the date of the Refinance Announcement, no further funds have been advanced and no further fees have accrued pursuant to the Previous Funding. The outstanding balance on the Previous Funding as at the close of business on 21 May 2024 was £4.9 million, including accrued interest.

The board has now agreed a new non-dilutive funding with the Lenders with effect on 22 May 2024 with no conditions to the refinance (the "Term Loan"). The Term Loan replaces the Previous Funding and removes any fixed repayment schedule during the term, whilst ensuring that the outstanding debt will only reduce proportionally to future capital inflows prior to the 24-month maturity date. The Term Loan is designed to reduce the Group's short-term liabilities and to enable the Company to focus on funding immediate and ongoing working capital obligations. The new funding also remove convertible rights as a primary repayment obligation.

The Company and the Lenders entered into an amended and restated facility agreement on 22 May 2024 to refinance the Term Loan, the key terms of which are:

• A 24 month term ("Term"), with repayment of the principal and interest of each advance due at the expiry of the Term (subject to agreed prepayments as detailed below).
• 9.5% fixed coupon of principal outstanding accruing on the commencement of each 12-month period.
• No fixed monthly payment or conversion rights. Outstanding amounts will only be converted into shares in the Company in the case of an event of default.
• Arrangement fee of 5% for each advance.
• Maximum facility amount reduced to £5.5m, withc. £0.3m undrawn (after costs).
• Repayment of principal and interest secured by the Debenture previously granted (as detailed in the Refinance Announcement).
• Agreed prepayments, save as waived in full or part by the Lenders, during the Term:
• 20% of net funds received by the Company of any certain future equity fundraisings;
• 25% of any cash inflows excluding operational turnover or equity placements. This will include the anticipated proceeds of the Logik settlement, details of which were announced by the Company on 3 April 2024; and
• 10% of net revenue (after costs of sales) earned, paid quarterly in arrears.
• The above repayment terms supersede other repayment obligations to the Lenders that were previously announced.

David Palumbo, CEO of EQTEC, commented:

"We are pleased to secure a new term loan with our secured lenders which we believe is a positive development for EQT. The material reduction in anticipated cash payments to the lenders , combined with the anticipated cash inflows from the Logik settlement payment, will provide a good foundation for EQT to move into a growth phase with increasing recurring monthly revenues from operations. The new facility structured as a 24-month bullet loan evidences the increased confidence from our secured lenders in the business model of the Company through the implementation of our "strategic pivot". We appreciate the continued support from our lenders and shareholders."

Further information on the Company can be found at www.eqtec.com.