New banking facility and Loan Note issue

Snacktime plc ("Snacktime or "the Company")

5 April 2013

New banking facility and £1.01m loan note issue

Further to its announcement of 2 April 2013, the Company is pleased to announce the successful conclusion of a revised banking agreement ("New Bank Facility") with the Co-operative Bank (the "Bank") covering both its term loan and overdraft facilities. Furthermore, the Company has also received irrevocable commitments from certain existing shareholders and other persons ( the "Loan Note Subscribers") to subscribe for £1.01 million of new 5 year unsecured loan notes, the principal terms and conditions of which are set out below. Proceeds of the loan note issue will be used to ensure that the Company has sufficient facilities to complete the turnaround commenced in the middle of 2012 and meet its future obligations to lenders.

New Bank Facility

The New Bank Facility comprises a two-year £3.40 million term loan, with a revised repayment schedule and covenants, and a one-year £0.75 million overdraft facility. These new banking arrangements follow an extensive review by the Bank of SnackTime's business and reflect both the current and projected performance of the Company. The New Bank Facility replaces a loan of £3.05 million and an overdraft facility of £1.10 million, originally set up in September 2010.

The revised loan repayments schedule has established a minimum loan repayment of £180,000 in the financial year ending 31 March 2014, and £890,000 in the financial year ending 31 March 2015. The repayments required to be made by the Company will increase if the Company outperforms its projections. £2.0m of the loan attracts an interest rate of 6% over LIBOR, plus mandatory costs (expected to add approximately 0.04%). The amount subject to this rate may reduce at the Bank's discretion by reference to the Company's net asset position. Loan repayments first reduce this segment of the borrowings. The balance of the term loan will attract interest at either 5.35% or 4% over LIBOR plus mandatory costs. The new overdraft facility has an interest rate of 3.25% above the Bank's base rate (currently 0.5%).

New financial covenants have been agreed based on two specific criteria. First, the Company's EBITDA, which is to be measured monthly from June 2013 against a rolling 3 monthly target. The second financial covenant measures the Company's asset base against its borrowings using a specific formula to ensure the Bank's security does not drop below a target level.

Loan Note issue

A condition of the New Bank Facility is the raising of at least £1.0 million, which the Company has arranged through the issue of 5 year unsecured loan notes (the "Loan Notes"). The Loan Note Subscribers have unconditionally agreed to subscribe for £1,010,000 in principal of Loan Notes.

The Board has explored various options, including a deep discount rights issue, and is of the opinion that the issue of the Loan Notes is the best available option for all shareholders. Therefore the Company is today writing to shareholders on the share register as at 27th March 2013 to offer them the opportunity to subscribe for Loan Notes on the same terms as the Loan Note Subscribers, pro rata to their shareholding in the Company, on the basis of £1 Loan Note for every 16.35 ordinary shares held at that date. This offer shall be available until Monday 29 April 2013. To the extent that shareholders elect to subscribe for Loan Notes, Michael Jackson and his family trusts and Michiel Slinkert have agreed to reassign such number of Loan Notes from their subscriptions (which the Board believes are more than sufficient to cover any such elections, based on discussions with shareholders who do not wish to subscribe for Loan Notes) as is required to satisfy demand from shareholders.

The principal terms and conditions of the Loan Notes are as follows:

- the nominal amount of the Loan Notes shall be £1;

- one half of each Loan Note will be convertible at any time during the period of five years and one day from the date of issue into new ordinary shares of 2p each in SnackTime ("Shares") at a conversion price of 10p per Share (a 25% premium to the Company's share price at the time terms were agreed). Interest on this portion of the Loan Note shall accrue at 7% per annum, before conversion, and shall be paid semi-annually;

- the other half of each Loan Note will have no right of conversion and will be redeemed with a 30% redemption premium five years and one day from the date of issue. Interest on this portion of the Loan Note shall accrue at 12% per annum, and shall be paid semi-annually;

- subscribers will only be allotted Loan Notes with an equal portion of the redeemable and convertible elements ; and

- the Loan Notes will not be listed or traded on any stock exchange.

The Company's existing authority, granted to the Board at the Company's last annual general meeting held on 24 September 2012, to allot equity securities other than in proportion to existing holdings of Shares satisfies the convertible portion of £326,980 of the Loan Notes (being 10% of the issued Ordinary Shares at the date of that meeting). The convertible portion of the balance of £683,020 of the Loan Notes is being issued under the existing pre-emptive authority because shareholders who have not been included in the original commitment to subscribe for Loan Notes are being offered the right to participate in proportion to the number of ordinary shares held by them. 

2008 Convertible Loan Notes

In satisfaction of a further condition of the New Bank Facility, Unicorn AIM VCT plc and Elderstreet VCT plc, holders of £550,000 and £50,000, respectively, of the Company's £600,000 2008 convertible loan notes ("2008 CLS"), which were due for redemption on 16 December 2013, have agreed to defer the redemption date for 2 years, until 15 December 2015 ("Extension Period"). Interest shall continue to accrue at 8% per annum during the Extension Period, and be paid semi-annually. However, a redemption premium of 6% per annum of the principal amount of the loan notes will now be paid on redemption up to a maximum of 12%. The 2008 CLS are now specifically redeemable or convertible at the option of the holders on a change of control of the Company. All other material terms of the 2008 CLS remain unchanged.

Related Party Transactions

Certain of the Loan Note Subscribers are related parties (as defined by the AIM Rules for Companies of the London Stock Exchange ("AIM Rules")) and their subscriptions for Loan Notes, and the redemption deferral by Elderstreet VCT plc on the 2008 CLS, are classified as related party transactions for the purposes of the AIM Rules, as follows:

- Jeremy Hamer, Executive Chairman, is subscribing for £40,000 of Loan Notes

- Michael Jackson, Non-executive Director, together with his children's family trust, is subscribing for £135,000 of Loan Notes (a portion of which may be reassigned to satisfy demand from shareholders, as outlined above);

- Tim James, Finance Director, is subscribing for £10,000 of Loan Notes;

- Michiel Slinkert, Non-executive Director, is subscribing for £50,000 of Loan Notes (a portion of which may be reassigned to satisfy demand from shareholders, as outlined above);

- Elderstreet VCT plc, a substantial shareholder of which Michael Jackson is a non-executive director, is subscribing for £400,000 of Loan Notes. In addition, Elderstreet VCT plc holds £50,000 of 2008 CLS; furthermore, David Brock, Chairman of Elderstreet VCT plc, is subscribing for £50,000 of Loan Notes.

(together, the "Related Parties").

In accordance with the AIM Rules, the Independent Directors, comprising Ian Forde and Steven Garner, each a non-executive Director of the Company, having consulted with the Company's nominated adviser, Westhouse Securities, consider that the terms of the transaction (namely the Loan Notes subscriptions by the Related Parties and the redemption deferral by Elderstreet VCT plc on their £50,000 principal of 2008 CLS) to be fair and reasonable insofar as shareholders are concerned.

Jeremy Hamer, Executive Chairman of Snacktime, commented: "The revised covenants, rescheduled loan repayments and £1m of new funding all give the company a genuine opportunity to complete the turnaround process begun 9 months ago."

For further information:

SnackTime PLC

Jeremy Hamer, Chairman

Tim James, Finance Director 0208 879 8300

Westhouse Securities

Tom Griffiths 020 7601 6100