TIDMTEK
RNS Number : 5759L
Tekcapital plc
01 May 2020
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED
STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA OR ANY
OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR
DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY
SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR
CONTAIN ANY INVITATION, SOLICITATION, RECOMMATION, OFFER OR ADVICE
TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY
SECURITIES OF TEKCAPITAL PLC IN ANY JURISDICTION IN WHICH ANY SUCH
OFFER OR SOLICITATION WOULD BE UNLAWFUL.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
1 May 2020
Tekcapital plc
("Tekcapital" or the "Company")
Conditional Placing to raise GBP925,000
Notice of General Meeting
Tekcapital plc, (AIM: TEK) the UK intellectual property
investment group focused on creating marketplace value from
investing in university technology, announces that it has
conditionally raised a total of GBP925,000 (US$1.15 million)
(before expenses) by way of the issue of, in aggregate, 9,250,000
new ordinary shares of 0.4 pence each in the Company (the "New
Ordinary Shares"), at 10 pence per share (the "Placing Price")
(together, the "Placing").
Key Highlights:
- GBP925,000 (US$1.15 million) (before expenses) raised by means
of a conditional fundraise through the issue of, in aggregate
9,250,000 Placing Shares at 10 pence per share.
- Funds raised will primarily be committed to Tekcapital's
portfolio of companies and to provide additional working capital
for the Company.
- The Placing Price represents a discount of approximately 13
per cent. to the closing mid-market price of 11.5 pence on 30 April
2020, being the last trading day prior to the release of this
announcement of the Placing.
- The Placing Shares will represent approximately 11.78 per
cent. of the Existing Ordinary Shares and will, when issued,
represent approximately 10.54 per cent. of the Enlarged Share
Capital.
- The Placing, details of which are set out below, was
undertaken by the Company's broker SP Angel Corporate Finance
LLP.
- The Placing will be subject to Tekcapital's shareholders'
approval at a general meeting (the "General Meeting") to be at
10.00a.m. on 19 May 2020.
- A Circular which sets out details of the conditional Placing
and also includes a Notice of General Meeting will be sent to
shareholders later today (the "Circular").
- Certain Directors who hold Existing Ordinary Shares have
irrevocably undertaken to vote in favour of the Resolutions, in
respect of their shares, representing 11 per cent of the Existing
Ordinary Shares.
Clifford M. Gross Ph.D., Executive Chairman of Tekcapital plc
commented:
"We are pleased to announce the completion of this placing as it
will enable us to accelerate the further development of our
portfolio companies."
Tekcapital Plc Via Flagstaff
Clifford M. Gross, Ph.D.
SP Angel Corporate Finance LLP
(Nominated Adviser and Broker) +44 (0) 20 3470 0470
Richard Morrison/Charlie Bouverat (Corporate
Finance)
Abigail Wayne / Rob Rees (Corporate Broking)
Flagstaff Strategic and Investor Communications +44 (0) 20 7129 1474
Tim Thompson/Andrea Seymour/Fergus Mellon
The Circular, extracts of which are included below, will also be
available later today via the Company's website:
www.tekcapital.com
Background to and Reasons for the Placing
The Company has interests in four portfolio companies that the
Directors believe can be disruptive in their markets and improve
the health, safety and quality of life of their customers. The
financial objective of the Company is to generate significant
growth in the Company's net assets and returns on invested capital
resulting from the commercialisation of university generated
Intellectual Property ("IP").
On 6 February 2020, the Company announced an equity placing of
14,800,000 Ordinary Shares at a price of 5 pence per Ordinary Share
to raise GBP0.74 million (approximately $0.962 million as at that
time) to fund investment in key activities, to further develop and
progress with the commercialisation of its portfolio of IP
technologies and for working capital purposes. This equity placing
utilised the majority of the remaining share allotment
authorities which were granted at the annual general meeting held on 5 April 2019.
Since the last fundraise, each of the portfolio companies has
made progress and there are other near-term potential catalysts for
further growth in the offering.
Belluscura plc ('Belluscura'), in conjunction with its research
partner Separation Design Group LLC, filed a patent application in
February 2020 covering novel integrated portable extracorporeal
oxygenation and carbon dioxide removal systems for treating
patients suffering from acute respiratory distress ('ARDS'),
including ARDS caused by Coronavirus.
In addition, Belluscura anticipates receiving clearance from the
US Food and Drug Administration ('FDA') clearance for the X-PLO(2)
R(TM) portable oxygen concentrator in H1 2020 with manufacturing
and sales of their device commencing in H2 2020. The device is
designed for people requiring respiratory treatment for lung
disease. Globally, more than 250 million people suffer from chronic
obstructive pulmonary disease ('COPD'), the third leading cause of
death. Additionally, as a result of the COVID-19 pandemic, a recent
study has shown that recovered patients may suffer residual lung
damage, potentially necessitating supplemental oxygen.
Approximately US$225,000 of the funds raised in this Placing will
be used to invest in Belluscura (at the current valuation of
approximately US$9.0m (15p/share). The Company will receive one
warrant for every two shares purchased, exercisable at 15p for a
period of three years from the date of its investment. If the
Company elects to exercise all these warrants, it would invest
approximately a further US$111,000 in Belluscura. The Company will
also receive an additional option to invest up to GBP1.0m at a
maximum price of 23p per share within 30 days following receipt of
clearance from the FDA to launch and commence production of the
X-PLO2R(TM) portable oxygen concentrator.
In March 2020, Salarius Limited ('Salarius') announced that it
had signed its first distribution deal with one of North America's
largest natural food wholesalers to launch its new SaltMe!(R)
natural potato crisps in North America. SaltMe! Crisps utilize
Salarius' patented MicroSalt(R) to deliver full flavour with
roughly 50% less sodium. Sodium consumption is a leading risk
factor for hypertension which is linked to the development of
cardiovascular disease, the leading cause of premature death in the
world. Subsequently, on 22 March 2020, this distribution partner
made an initial order to launch sales of the SaltMe!(R) natural
potato crisps in 71 stores starting in May 2020. A further
agreement was reached iLevel Brands Inc ('iLevel Brands') as part
of its launch of North American sales of its new SaltMe! (R)
natural potato crisps, to expand market penetration and brand
awareness for its new potato chip snack line. This agreement is
expected to enhance market penetration and accelerate sales growth
for the SaltMe!(R) product line in the second half of 2020. These
agreements follow quickly on from agreements with two US food
ingredient brokers, Hanks Brokerage Inc, and Accurate Ingredients
Inc, announced in January 2020 and December 2019, respectively, to
sell MicroSalt(R) to snack food companies which are expected to
generate sales in H1 2020 or soon thereafter. With the pace of
commercialisation increasing, the Company will use approximately
US$250,000 of funds raised in the Placing to support Salarius'
growth and development.
In January 2020, Lucyd Limited ('Lucyd') launched its Loud 3.0
Bluetooth enabled upgraded tech eyewear in two styles, with
Bluetooth. These prescription compatible, audio glasses offer
enhanced sound quality, comfort and style at an attractive price.
In March 2020, Lucyd filed a new patent and a trademark on its
forthcoming Vyrb(TM) app. Vyrb users will be able to activate
smartphone actions with their voice beyond what is currently
available with voice assistants, such as social media posting, with
Vyrb's flexible and intuitive user experience. By using the app
along with Lucyd Bluetooth glasses, the user will be able to spend
less time looking at their phone, and keep more of their focus on
the real world. This is especially pressing given the rise in
pedestrian fatalities due to smartphone distraction. Every seven
minutes, a pedestrian is struck by a vehicle in the U.S.. More
pedestrians and cyclists were killed in 2018 than in any year since
1990. Deaths of pedestrians have jumped by 42% in the last decade,
and pedestrian and bicyclist fatalities continue to rise, with
deaths of those on foot climbing 3.4% to 6,283 last year in the
U.S. The number of people killed on roads while using bicycles and
other non-motorized vehicles rose 6.3% to 857. The launch of the
Vryb app is targeted for December 2020. The Company will use
approximately US$50,000 of funds raised in the Placing to support
Lucyd in the development of the Vyrb(TM) app.
In March 2020, Guident Limited ('Guident') announced significant
progress in the development of both its management team and its
intellectual property portfolio. Guident appointed Harald Braun as
the Company's Chairman and CEO, Daniel Grossman as the Company's
Chief Revenue Officer, Michael Trank as VP Software Development and
Dr. Gabriel Castaneda as Lead Architect, Artificial Intelligence
Software. At the same time, it announced that it has received a
Notice of Allowance from the United States Patent and Trademark
Office for its patent application #16/386,530 entitled "Methods and
Systems for Emergency Handoff of an Autonomous Vehicle" and has
filed an additional patent entitled, "Intelligent Remote Monitoring
and Control of Autonomous Vehicles." This brings Guident's IP
portfolio to five intellectual properties, of which four have been
allowed or granted. All of these patents are focused on improving
the safety of Autonomous Vehicles and land-based delivery drones.
The Directors believe that these developments will enable Guident
to potentially make a meaningful contribution to the safety of
Autonomous Vehicles and ground-based delivery drones. According to
Allied Market Research the autonomous vehicle ('AV') market is
expected to reach $556 billion by 2026 with a CAGR of 39%. The
Company will use approximately US$50,000 of funds raised in the
Placing to support Guident's growth and development.
The Company therefore believes that it is the right time to
raise further funds to primarily support the growth and development
of its investee companies.
Details of the Placing
The Company has conditionally raised GBP925,000 (US$1.15m),
before expenses, by way of a conditional Placing to new and
existing investors of 9,250,000 Placing Shares each at the Placing
Price.
The Placing Price represents a discount of approximately 13 per
cent. to the closing mid-market price of 11.5 pence on 30 April
2020, being the last trading day prior to the release of this
announcement of the Placing.
Assuming the issue of all of the Placing Shares, the Placing
Shares will represent approximately 11.78 per cent. of the Existing
Ordinary Shares and will, when issued, represent approximately
10.54 per cent. of the Enlarged Share Capital.
Application will be made to the London Stock Exchange for the
Placing Shares to be admitted to trading on AIM. It is expected
that Admission of the Placing Shares will become effective and that
dealings will commence on 20 May 2020 following the General
Meeting.
The Placing Shares will, following Admission, rank in full for
all dividends and distributions declared, made or paid in respect
of the issued Ordinary Share capital of the Company and otherwise
rank pari passu in all other respects with the Existing Ordinary
Shares.
The Placing and the Placing Agreement
In connection with the Placing, on 1 May 2020 the Company
entered into the Placing Agreement pursuant to which SP Angel have
agreed to act as agents for the Company and use their reasonable
endeavours to place the Placing Shares with certain new and
existing investors. The Placing is conditional, among other things,
upon: (i) the passing of the Resolutions; and (ii) Admission
occurring as soon as practicable following the General Meeting or
by such later time and/or date as SP Angel and the Company may
agree but not later than 8.00 a.m. on 30 June 2020 (being the long
stop date).
The Placing Agreement contains customary warranties from the
Company in favour of SP Angel in relation to (amongst other things)
the accuracy of the information in the Circular and other matters
relating to the Company and its business. In addition, the Company
has agreed to indemnify SP Angel in relation to certain liabilities
they may incur in undertaking the Placing. SP Angel have the right
to terminate the Placing Agreement in certain circumstances prior
to Admission. In particular, SP Angel may terminate in the event
that there has been a breach of any of the warranties, the
conditions of the agreement have become incapable of fulfilment or
for force majeure. The Placing will not be underwritten.
Use of Proceeds
The net proceeds of the Placing, which are estimated to be
GBP820,000 (US$1.0m), will be used to invest in the Company's
portfolio companies and for working capital purposes.
The Company intends to invest approximately US$225,000 in
Belluscura, through the purchase of 1,200,000 shares at 15p per
share and it will receive a warrant to acquire 600,000 additional
shares exercisable at 15p for a period of three years from the date
of its investment. The Company also intends to invest US$250,000 in
Salarius to support Salarius' growth and development and US$50,000
each in Lucyd and Guident to advance their commercialisation
programs.
The remaining US$425,000 will be used to further support the
Group's portfolio companies or as required for working capital
purposes.
Current Prospects and Outlook
The Group expects to release its audited results for the year
ended 30 November 2019 during May 2020.
General Meeting
The Directors do not currently have the authority to issue all
of the Placing Shares simultaneously so the Placing will be subject
to TekCapital's shareholders approving the Resolutions to, amongst
other things, increase the Directors' authority to allot the
Placing Shares, and to disapply statutory pre-emption rights, at
the General Meeting. Application will be made for the Placing
Shares to be admitted to trading on AIM as soon as practicable
following the General Meeting.
The Company will also use this opportunity to refresh the
general authority to allot Ordinary Shares and to disapply
statutory pre-emption rights (in the same proportions as at the
Annual General Meeting in 2019), as the Company has used up all of
its general authority to issue Ordinary Shares. This will provide
the Board with adequate headroom to raise new capital should the
opportunity arise between the date of the General Meeting and the
next Annual General Meeting. The Board are maintaining the same
percentage authorities as per the last Annual General Meeting.
These authorities will be refreshed at the next Annual General
Meeting. The Board is keeping the date of the next Annual General
Meeting under consideration, in light of COVID-19 and in line with
many other quoted companies, the Board is likely to delay holding
the AGM until later in the summer in the hope that it can hold a
meeting at which shareholders can physically attend.
THE BOARD STRONGLY ENCOURAGES ALL SHAREHOLDERS TO VOTE ON THE
RESOLUTIONS BY PROXY BEFORE THE DEADLINE OF 10.00 A.M. ON 15 MAY
2020.
THE MOST RECENT "STAY AT HOME" MEASURES ADOPTED BY THE
GOVERNMENT PROHIBIT, UNLESS ESSENTIAL FOR WORK PURPOSES, PUBLIC
GATHERINGS OF MORE THAN TWO PEOPLE. THE COMPANY'S VIEW, WHICH IS
SUPPORTED BY THE CHARTERED GOVERNANCE INSTITUTE (ICSA) IS THAT
ATTANCE AT A GENERAL MEETING BY A SHAREHOLDER, OTHER THAN ONE
SPECIFICALLY REQUIRED TO FORM THE QUORUM FOR THAT MEETING, IS NOT
ESSENTIAL FOR WORK PURPOSES. THE COMPANY HAS ARRANGED FOR A QUORUM
TO BE PRESENT IN PERSON AT THE MEETING. ACCORDINGLY, WE HEREBY
NOTIFY SHAREHOLDERS THAT ANYONE SEEKING TO ATT THE MEETING IN
PERSON WILL BE REFUSED ENTRY.
SHAREHOLDERS ARE ASKED INSTEAD TO VOTE BY PROXY BY COMPLETING
THEIR FORM OF PROXY IN ACCORDANCE WITH THE INSTRUCTIONS SET OUT
BELOW
Resolution 1 authorises the allotment of such number of Placing
Shares as are necessary for the Placing, as well as providing the
Directors with a standing authority to allot equity securities up
to 43,889,021 Ordinary Shares (being an aggregate nominal value of
GBP175,556.08 and 50 per cent. of the Enlarged Share Capital)
otherwise than in connection with the Placing.
Similarly, Resolution 2 authorises the disapplication of
statutory pre-emption rights in respect of such number of Placing
Shares as are necessary for the Placing as well as providing the
Directors with a standing authority to allot equity securities
otherwise than in accordance with statutory pre-emption rights up
to 43,889,021 Ordinary Shares (being an aggregate nominal value of
GBP175,556.08 and 50 per cent. of the Enlarged Share Capital)
otherwise than in connection with the Placing.
RECOMMATION AND IRREVOCABLE UNDERTAKINGS
The Directors consider the Placing to be in the best interests
of the Company and its Shareholders as a whole and accordingly
unanimously recommend that Shareholders vote in favour of the
Resolutions to be proposed at the General Meeting as all of the
Directors who hold Existing Ordinary Shares have irrevocably
undertaken to do so in respect of their own beneficial holdings of
Existing Ordinary Shares, representing, in aggregate, approximately
11 per cent. of the Existing Ordinary Share capital.
Yours faithfully
Clifford M. Gross Ph.D.
Chief Executive Officer
About Tekcapital plc
Tekcapital creates value from investing in new,
university-developed intellectual properties and provides a range
of IP investment services to make it easy for organisations to
commercialise university-developed technology. Tekcapital is quoted
on the AIM market of the London Stock Exchange (AIM: symbol TEK)
and is headquartered in Oxford, in the UK. For more information,
please visit www.tekcapital.com
LEI: 213800GOJTOV19FIFZ85
For further information, please contact:
Forward-Looking Statements:
Certain statements in this announcement are or may be deemed to
be forward-looking statements. Forward-looking statements are
identi ed by their use of terms and phrases such as "believe"
"could" "should" "envisage" "estimate" "intend" "may" "plan" "will"
or the negative of those variations or comparable expressions
including references to assumptions. These forward-looking
statements are not based on historical facts but rather on the
Directors' current expectations and assumptions regarding the
Company's future growth results of operations performance future
capital and other expenditures (including the amount. nature and
sources of funding thereof) competitive advantages business
prospects and opportunities. Such forward-looking statements re ect
the Directors' current beliefs and assumptions and are based on
information currently available to the Directors. Many factors
could cause actual results to differ materially from the results
discussed in the forward-looking statements including risks
associated with vulnerability to general economic and business
conditions, fluctuations in portfolio company net asset values,
competition environmental and other regulatory changes actions by
governmental authorities the availability of capital markets
reliance on key personnel uninsured and underinsured losses and
other factors many of which are beyond the control of the Company
such as the COVID-19 pandemic. Although any forward-looking
statements contained in this announcement are based upon what the
Directors believe to be reasonable assumptions. The Company cannot
assure investors that actual results will be consistent with such
forward-looking statements.
SP Angel Corporate Finance LLP, which is a member of the London
Stock Exchange, is authorised and regulated in the United Kingdom
by the Financial Conduct Authority and is acting as financial
adviser, nominated adviser and broker for the purposes of the AIM
Rules for Companies. SP Angel Corporate Finance LLP is acting
exclusively for the Company in connection with the matters referred
to in this announcement and for no-one else and will not be
responsible to anyone other than the Company for providing the
protections afforded to its clients nor for providing any advice in
relation to the contents of this announcement or any transaction,
arrangement or matter referred to herein.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IOEURUWRRSUSOAR
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