Stack BTC PLC - Proposed acquisition of Direct Bullion

Stack BTC Plc

Proposed transformational 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, is pleased to announce that it has entered into non-binding heads of terms 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").

HIGHLIGHTS

·   Aggregate consideration of up to £12 million, consisting of cash, new equity and deferred equity consideration

·     Share consideration to be issued at minimum of 6p per share, and subject to four-year lock-in

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

·     The Proposed Acquisition constitutes a reverse takeover for the purposes of the Aquis Growth Market Access Rulebook (the "Reverse Takeover")

The Proposed Acquisition constitutes a related party transaction pursuant to Rule 4.6 of the Aquis Growth Market Access Rulebook, 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.

David Galan, Brendan Kearns and Melisa Lawton, the directors of the Company who are independent of the Proposed Acquisition (the "Independent Directors") are satisfied that sufficient information is included in this announcement about the Reverse Takeover such that an informed assessment can be made as to the financial position and prospects of Stack BTC as enlarged by the Reverse Takeover. 

DETAILS

The Company announces that:

·     this announcement includes audited financial information on the Target for the financial year ended 31 January 2026 and 31 January 2025 (being, the last two financial years of Direct Bullion (including all elements cited in the guidance of rule 3.6 of the Aquis Growth Market Access Rulebook);

·   this announcement includes a description of Direct Bullion's key non-financial operating or performance measures appropriate to the Target's business operations;

·     the Independent Directors consider that this announcement contains sufficient information about the business to be acquired to provide a properly informed basis for assessing its financial position; and

·     it has made the necessary arrangements with the Target's vendor to enable it to keep the market informed without delay of any developments concerning Direct Bullion that would be required to be released were the Target part of the Company.

The Reverse Takeover remains conditional upon the publication of an MTF Admission Prospectus reflecting the final terms of the Reverse Takeover, but this does not qualify any of the statements set out above.

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. 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 Growth Market Access Rulebook. There can be no certainty that the Reverse Takeover will complete.

Strategic Rationale

The Proposed Acquisition represents the first execution of the Company's M&A strategy.

Stack BTC's strategy differs from the standard Bitcoin treasury strategy playbook because it does not rely solely upon continued access to the capital markets to provide cash resources to increase its Bitcoin holdings. Stack BTC is focused on acquiring profitable and cash generative businesses, which then provide an ongoing source of liquidity to increase the Company's Bitcoin per share.

Stack BTC is targeting businesses that are thematically aligned to Bitcoin and the wider related ecosystem but are not necessarily directly in the Bitcoin industry. Gold, like Bitcoin is often regarded by investors as 'hard monetary asset' and a hedge against inflation and fiscal uncertainty. Bitcoin is also often referred to as 'digital gold' and therefore, the Company considers its first acquisition of a business in the gold industry to be fully in-line with its strategy.

The Proposed Acquisition

Under the current proposed terms, the aggregate consideration for the Proposed Acquisition is expected to be approximately £12 million, comprising:

·     £3 million payable in cash on completion of the Reverse Takeover ("Completion");

·     approximately £4 million to be satisfied by the issue of new ordinary shares of the Company, subject to a four-year lock-in (the "Consideration Shares"); and

·   an earn-out of approximately £1 million, payable in cash after the Target's financial year ending 31st January 2027 ("Year One"), subject to the Target achieving EBITDA of at least £2.5 million in Year One, calculated before the cost of Bitcoin purchases; and

an earn-out of approximately £4 million, payable over years three to five, subject to the Target achieving EBITDA of at least £2.5 million in each of years three, four and five, calculated before the cost of Bitcoin purchases. If the EBITDA target is achieved in a particular year, the Target's vendor will receive one of three equal earn-out payments of approximately £1.33 million payable in cash.

The Company expects the cash element of the consideration to be funded from the Company's balance sheet.  The Company is presently well funded with £4.27 million having been raised in 2026.

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 announcement of this RNS, and (ii) the issue price of any new Ordinary Shares issued by the Company before completion of the Proposed Acquisition.  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 the completion of the Proposed Acquisition will not form part of the calculation.

The Independent Directors consider the proposed structure to be aligned with the long-term interests of the Company and the Target's shareholder, as a significant proportion of the consideration is deferred and/or in equity.

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.

Information on the Target

Direct Bullion was founded in 2015 by Paul Withers. The Target vendor is Eleven Intl Limited ("Target Vendor").  Paul is the sole shareholder and sole director of the Target Vendor, which owns 100% of the share capital of Direct Bullion, and is also the sole director of Direct Bullion. He is also a director of, and a significant shareholder in, Stack BTC.

Direct Bullion is a London-based precious metals dealer, selling gold coins and bars direct to the public and to pension funds.  It has grown into one of the United Kingdom's leading specialist precious metals dealers, growth which has been recognized through Direct Bullion's inclusion in the Financial Times FT 1000 European fastest-growing companies in 2024, ranked 506^th in Europe, 81^st in the UK and No. 1 in the metals and mining sector. 

Direct Bullion's key non-financial operating performance measures are total customers, new customers and average deal size. These metrics are used by management to monitor customer growth and transaction activity.

The sale of gold coins and bars to the public has experienced significant growth in recent years due to a number of factors, including the sharp increase in the price of gold and other commodities and its effectiveness as an inflation hedge, whilst also not being subject to VAT. Direct Bullion also sells British gold coins, such as Sovereigns and Britannias, which are classified as legal tender and exempt from capital gains tax, providing an additional attraction for investors.

The business has grown from a founder-led operation into a team of 16 employees and 22 contractors and has been funded entirely through the resources of the founder. It has not taken on any external investment to date.

Direct Bullion believes that what sets it apart from its competitors is its people-led approach to its clients. Rather than an execution-only online retailer, Direct Bullion has an in-house team of trained specialists who support clients through what is, for most, a significant and considered purchase. The team provides detailed product information and education rather than regulated financial advice. The focus on building strong client relations is what Direct Bullion believes is the single biggest reason for its high levels of repeat custom and regular instances of client referrals.

Direct Bullion also believes that demand for physical precious metals is rooted in long-term wealth preservation, portfolio diversification and the appeal of tangible assets held outside the banking system. Furthermore, it considers that these drivers are durable. Whilst precious metal sales is a high-trust, high-value, fundamentally human business, Direct Bullion will look at ways to use technology to both enhance the services it provides and make the business more efficient to support future growth opportunities.

Further information on the Target can be found on its website at www.directbullion.com.

Financial information on the Target

Direct Bullion's financial performance for the three years ended 31 January 2024, 31 January 2025 and 31 January 2026 is summarised below:

Direct Bullion generated gross profit of £5.09 million in the year ended 31 January 2026 and gross margin was approximately 9.8 per cent. Direct Bullion has achieved revenue growth of 288 per cent over the three-year period disclosed above and its business model is centered on the sale of physical gold and other precious metals, with strategic opportunities including dealer consolidation, SIPP/SSAS-related activity, vaulting and storage, and related adjacent services.

Direct Bullion has a secured loan with a UK high street bank, which was originally £1.5 million, with approximately £1 million outstanding. The loan matures on 17 April 2029. The loan will be assumed by Stack on completion of the Proposed Acquisition. The bank holds two registered charges over the Target's assets, each comprising fixed and floating charges over the Target's assets.

The Company's accounting policies and those used to prepare the Target's historical financial information are materially consistent. The summary audited financial statements for the two years ended 31 January 2025 and 31 January 2026 are contained in an appendix to this announcement. The full audited financial statements are available on the Company's website at the following links: 

https://www.stackbitcoin.co.uk/api/regulatory-filings/86/document

https://www.stackbitcoin.co.uk/api/regulatory-filings/85/document

The auditor's report on DB London Ltd's financial statements for the years ended 31 January 2025 and 2026 contains qualified opinions. The auditor was appointed after 31 January 2025 and was therefore unable to observe the physical inventory count held at that date. Consequently, the auditor was unable to determine whether any adjustment to that balance, or any consequential adjustment to cost of sales for the year ended 31 January 2026, was necessary.

The Company has confirmed that, pending completion of the Proposed Acquisition, the financial position of Direct Bullion will remain substantially the same as reflected in its balance sheet as at 31 January 2026. In addition, Direct Bullion has confirmed that no dividends or other distributions will be declared or paid prior to completion of the Proposed Acquisition.

Rule 9 Waiver

The Proposed Acquisition is expected to require a waiver under Rule 9 of the Takeover Code. The MTF Admission Prospectus will include appropriate disclosure of this waiver, including details of the Concert Party, and in accordance with discussions with the Takeover Panel, the 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 waiver is at the sole discretion of the Takeover Panel.

Related Party Transaction

The Proposed Acquisition constitutes a related party transaction pursuant to Rule 4.6 of the Aquis Growth Market Access Rulebook, 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.

In accordance with Rule 4.6, the Independent Directors will consider whether the terms of the Proposed Acquisition 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.

Post acquisition strategy

The Company's strategy is to combine a profitable precious metals business with a Bitcoin treasury strategy. The Independent Directors believe the Proposed Acquisition offers the potential to generate operating cash flow from the Target's business to support the Company's treasury strategy and future growth initiatives.

The Company intends to pursue a broader platform strategy following completion, including potential bolt-on acquisitions and adjacent revenue opportunities in the precious metals sector.

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.

For further information please contact:

Appendix:

DB London Ltd's Audited Accounts for the year ended 31 January 2026

Profit and Loss Account

Balance Sheet

Statement of Cash Flows