Insig AI PLC shares fell on Monday, as it confirmed a new financing agreement to solve its short-term working capital needs.

The London-based data science and machine learning said it has agreed a £750,000 convertible loan note to be provided by Non-Executive Chair Richard Bernstein.

Shares in Insig AI were down 8.5% to 30.20 pence each in London on Monday morning.

The loan will be repayable by June 30, 2023, with interest accrued from the date of draw down at an annual rate of 5.0%. The conversion price, if converted, will be 35.0 pence per share, which is a premium of around 62% to the closing share price on Thursday, before the loan was first announced.

Last Friday upon the release of its annual results, Insig AI said it was considering such a proposal. It explained it needed further working capital over the short term, and potentially the medium term.

‘The board notes that despite no adverse news announcements, since the end of May, the share price has halved. Therefore, the board believes that it would not be in the best interests of all stakeholders to carry out an equity raise in the very short term,’ it explained at the time.

The facility will be secured on the full share capital held by Insig AI in Westside Sports Ltd, and drawn down in tranches as required.

‘This facility is expected to provide sufficient working capital through to [the second quarter of the calendar year] 2023, by which time, the company will hopefully have secured and announced substantial contracts providing the necessary visibility of the company’s sales growth trajectory,’ it said last Friday.

This is based on its cashflow projections, which include the expected receipt of a ‘substantial’ Research & Development tax credit.

The facility is in addition to the previous £1.0 million facility previously provided by Bernstein, announced back in May.

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