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On
July 15, 2024, Diginex Limited and Diginex Solutions (HK) Limited (“DSL”) completed
a Transaction pursuant to a share exchange agreement (the “Share Exchange Agreement”),
whereby the then existing shareholders of DSL (the “Original Shareholders”) transferred
all of their shares in DSL to Diginex Limited, in consideration for Diginex Limited’s
issuance of substantially the same securities to such shareholders in exchange for the securities
of DSL held by Original Shareholders (the “Exchange”). Prior to the Exchange
there were 16,756 ordinary shares of DSL issued and outstanding, 3,151 preferred shares of
DSL issued and outstanding and 10,172 warrants of DSL issued and outstanding. In the Exchange,
each of the securities of DSL were exchanged for substantially the same securities of Diginex
Limited at an exchange ratio of one (1) ordinary share of DSL for four hundred and ten (410)
Ordinary Shares of Diginex Limited, one (1) preferred share of DSL for four hundred and
ten (410) Preferred Shares of Diginex Limited and one (1) warrant of DSL for four hundred
and ten (410) warrants of Diginex Limited.
In
connection with the Exchange, Diginex Limited and security holders of DSL consummated the following transactions (the “Ancillary
Transactions”): (i) Diginex Limited issued $4.35
million new convertible loan notes to certain
Original Shareholders in consideration
for the
cancellation of the then existing convertible
loan notes issued by DSL and held by such Original Shareholders; (ii) Diginex Limited granted certain share options under the new
share option plan that was adopted by Diginex Limited to the holders of the unexercised share options granted by DSL (the “Original
Share Options”), in consideration for the cancellation of the Original Share Options held by such holders. At time of the Exchange
there were 629,760 vested but unexercised share options and unvested share options exercisable for such number of Ordinary Shares
equal to 1.3% of the issued and outstanding shares of the Company at the time of vesting and (iii) Diginex Limited granted certain
warrants to purchase Ordinary Shares of Diginex Limited to the holders of the then existing warrants to purchase ordinary shares
of DSL (the “Original Warrants”), in consideration for the cancellation of the Original Warrants held by such holders.
The convertible loan notes will automatically convert into Ordinary Shares of Diginex Limited upon the effectiveness of this
registration statement and whilst there is no automatic vesting of any unvested share options upon completion of this Offering the
board of directors, at their discretion, do have the ability to accelerate vesting at any point. At the time of this registration
statement there was no confirmation if the board of directors will accelerate vesting. The fair value of all unvested ESOP as of
the date of this audit report is $1.8
million of which $0.5
million has been recognized in the financial statements at September 30, 2024.
Accordingly,
upon consummation of the Exchange and the Ancillary Transactions (collectively the “Restructuring”), DSL became a wholly
owned subsidiary of Diginex Limited, and the prior shareholders of DSL became shareholders of Diginex Limited. The remaining DSL
security holders became security holders of Diginex Limited, in that they held Diginex Limited convertible loan notes, share options
and warrants. Following, the closing of the Restructuring there is 6,869,961 Ordinary Shares of Diginex Limited issued and outstanding,
1,291,910 preferred shares of Diginex Limited issued and outstanding, 4,170,520 warrants issued and outstanding, $4.35 million
new convertible loan notes issued and outstanding and 629,760 vested but non exercised shares options and unvested share options
exercisable for such number of Ordinary Shares equal to 1.3% of the issued and outstanding shares of the Company at the time of vesting.
Following
the Restructuring, on July 26, 2024, the Company completed a share subdivision (the “Share Subdivision”) such that, the
authorized share capital of the Company was revised to be US$50,000 divided into 960,000,000 Ordinary Shares of US$0.00005 par value
each and 40,000,000 preferred shares (the “Preferred Shares”), par value US$0.00005 per share. Prior to the Share Subdivision
there were 6,869,961 ordinary shares and 1,291,910 preferred shares issued and outstanding, and after the Share Subdivision there
are 13,739,922 Ordinary Shares and 2,583,820 Preferred Shares issued and outstanding.
During
the Restructuring, a $1 million loan due from DSL to a related company, Diginex Holdings Limited, a company controlled by Rhino Ventures
Limited, was converted into a $1 million convertible loan note of which Rhino Ventures Limited holds $517,535 of the principal amount
of the convertible loan note and Working Capital Innovation Fund II L.P. holds $482,465 of the principal amount of the convertible
loan note. The loan between DSL and Diginex Holdings Limited charged interest at 8% per annum and had a maturity date of December 31, 2024. The terms of the new convertible loan notes also charge interest at 8% per annum and had a maturity date of December 31, 2024. This $1 million convertible loan note forms part of the $4.35 million loan notes issued by Diginex Limited post the Restructuring.
On
August 6, 2024 certain Employee Share Option Plan (“ESOP”) holders exercised their options and converted their options
into Ordinary Shares. 501,840
employee share options were converted into
1,003,680
Ordinary Shares whilst 109,470
employee share options lapsed without being
exercised. In addition, 368,826
employee share options were issued on July
31, 2024 with a fair value of $773,723.
On August 21, 2024 employee share options were issued equating to 0.5%
of the issued and outstanding shares of the Company at the time of vesting with a fair value of $182,660
The fair value of the options will be expensed
on a straight-line basis over the vesting period, or earlier if the vesting period is accelerated by the board of directors, with
a corresponding increase in equity (share option reserve). As of the date of these combined financial statements, the remaining employee
share options are 41,945
vested but not exercised, 368,826
unvested employee share options and unvested
employee share options exercisable for such number of Ordinary Shares equal to 1.7%
of the issued and outstanding shares of the Company at the time of vesting and the aggregate fair value of all unvested employee
share options is $1.8
million of which $0.2
million was recognized in the statement of
profit or loss as of March 31, 2024. Prior to the exercise of 501,840
options on August 6, 2024 there were 13,739,922
Ordinary Shares and 2,583,820
Preferred Shares issued and outstanding,
and after such exercise of 501,840
options there are 14,743,602
Ordinary Shares and 2,583,820
Preferred Shares issued and outstanding. |