TIDMNSCI
RNS Number : 2486G
NetScientific PLC
25 May 2017
THIS ANNOUNCEMENT (INCLUDING THE APPIX) AND THE INFORMATION
CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE
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PLEASE SEE THE IMPORTANT INFORMATION AT THE OF THIS
ANNOUNCEMENT.
THIS ANNOUNCEMENT (INCLUDING THE APPIX) IS NOT AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY OR SUBSCRIBE FOR ANY
ORDINARY SHARES OR OTHER SECURITIES OF THE COMPANY AND NEITHER THIS
ANNOUNCEMENT NOR ANYTHING HEREIN FORMS THE BASIS FOR ANY CONTRACT
OR COMMITMENT WHATSOEVER. ORDINARY SHARES OR OTHER SECURITIES OF
THE COMPANY MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OF
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THE ORDINARY SHARES DESCRIBED HEREIN WILL BE SOLD IN ACCORDANCE
WITH ALL APPLICABLE LAWS AND REGULATIONS.
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INVESTED.
25 May 2017
NetScientific plc
Proposed Placing and Subscription to raise approximately GBP8.1
million
Additional Fundraising to raise up to approximately GBP1.5
million
Notice of General Meeting
NetScientific plc (AIM:NSCI) (the "Company"), the transatlantic
healthcare IP commercialisation Group, announces a conditional
Placing and Subscription to raise approximately GBP8.1 million and
a conditional Additional Fundraising to raise up to approximately
GBP1.5 million, before expenses. The net proceeds of the Placing,
Subscription and Additional Fundraising (together the "Offer") are
principally to continue the acceleration of the development of its
actively managed Portfolio Companies, and advance these toward
commercialisation and potential exit opportunities. NetScientific's
actively managed portfolio companies are Vortex, Glycotest, Wanda
and ProAxsis. The Company also holds a minority position in PDS
Biotechnology. The Offer is not underwritten.
A General Meeting to approve the necessary resolutions for the
issue and allotment of the New Ordinary Shares and to permit
disapplication of pre-emption rights is to be convened for 11.00
a.m. on Monday 12 June 2017 at the offices of DLA Piper UK LLP, 3
Noble St, London EC2V 7EE.
Details of the Offer
-- Placing and Subscription - Proposing to raise GBP8.1 million
(before expenses) by way of: (i) a Placing by Stifel and Liberum of
14,083,332 Placing Shares with existing and new institutional
investors at the issue price of 45.0 pence per Ordinary Share (the
"Issue Price"); and (ii) a Subscription of 3,833,330 Subscription
Shares with certain other investors at the Issue Price
-- Additional Fundraising - Up to 3,333,333 New Ordinary Shares
at 45.0 pence per Ordinary Share to raise up to approximately
GBP1.5 million. The Additional Fundraising will be by way of a
private placing or subscription at the Directors' discretion, and
is not open to the public
-- Issue Price - The Issue Price per New Ordinary Share,
represents a discount of 15.1 per cent. to the closing middle
market share price of 53.0 pence of the Company's Ordinary Shares
on 24 May 2017
-- Notice of General Meeting - Due to the size of the Offer,
Shareholder approval is required which will be sought at the
General Meeting
-- Recommendation - The Directors unanimously recommend
Shareholders to vote in favour of the Resolutions
-- Admission - Admission is expected to occur at 8.00 a.m. on 13
June 2017 (or such later date as the Company, Stifel and Liberum
may agree, provided that such date shall not extend beyond 8.00
a.m. on 30 June 2017).
Francois R. Martelet, M.D., Chief Executive Officer of
NetScientific, said:
"We are aiming to become a significant force in IP
commercialisation with a focus on disruptive technologies in
digital healthcare, diagnostics and therapeutics. The finance we
have raised will allow us to continue to accelerate the investment
into our portfolio of companies, several of which are approaching
key commercial inflection points. More broadly, it will allow us to
invest in new pipeline opportunities and further develop our
infrastructure. NetScientific's mission is to support life-changing
innovation and deliver value to shareholders and we look forward to
the next stage of our journey."
-Ends-
Inside Information
This announcement contains inside information. The person
responsible for arranging for the release of this announcement on
behalf of the Company is Ian Postlethwaite.
A copy of this announcement has been posted on the Company's
website at www.netscientific.net
For more information, please contact:
NetScientific plc
François R. Martelet, M.D., Tel: +44 (0)20
CEO 3514 1800
Ian Postlethwaite, CFO
Stifel Nicolaus Europe Limited Tel: +44 (0)20
(NOMAD, broker and bookrunner) 7710 7600
Jonathan Senior / David Arch /
Ben Maddison
Liberum Capital Limited (placing Tel: +44 (0)20
agent) 3100 2000
David Parsons / Christopher Britton
Consilium Strategic
Communications Tel: +44 (0)20 3709 5700
Mary-Jane Elliott /
Jessica Hodgson / Chris
Welsh / Laura Thornton
netscientific@consilium-comms.com
Stifel Nicolaus Europe Limited ("Stifel") is authorised and
regulated by the FCA in the United Kingdom and is acting
exclusively as nominated adviser and bookrunner to the Company (for
the purposes of the AIM Rules for Companies) and no one else in
connection with Admission, the Placing and the matters set out in
this announcement. Stifel will not regard any other person as its
customer or be responsible to any other person for providing the
protections afforded to customers of Stifel nor for providing
advice in relation to the transactions and arrangements detailed in
this announcement for which the Company and the Directors are
solely responsible and, without limiting the statutory rights of
any recipient of this announcement, no liability is accepted by
Stifel for the accuracy of any information or opinions contained in
this announcement or for omissions of any material information for
which it is not responsible. Stifel is not making any
representation or warranty, express or implied, as to the contents
of this announcement. The responsibilities of Stifel as the
Company's nominated adviser and bookrunner solely for the purposes
of the AIM Rules for Nominated Advisers are owed solely to the
London Stock Exchange and are not owed to the Company or any
Director or to any other person in respect of his decision to
invest in the Company in reliance on any parts of this
announcement.
Liberum Capital Limited ("Liberum"), which is authorised and
regulated in the United Kingdom by the FCA, is acting exclusively
for the Company and no other person in connection with the Placing.
Liberum will not regard any other person as its customer or be
responsible to any other person for providing the protections
afforded to customers of Liberum nor for providing advice in
relation to the transactions and arrangements detailed in this
announcement for which the Company and the Directors are solely
responsible and, without limiting the statutory rights of any
person to whom this announcement is issued, no liability is
accepted by Liberum for the accuracy of any information or opinions
contained in this announcement or for the omission of any material
information for which it is not responsible. Liberum is not making
any representation or warranty, express or implied, as to the
contents of this announcement.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Announcement of the Offer Thursday 25 May
2017
Publication and posting of Friday 26 May 2017
the Circular and Form of Proxy
Latest time and date for receipt 11.00 am on Thursday
of completed Forms of Proxy 8 June 2017
to be valid at the General
Meeting
Additional Fundraising Close 11.00 am on Friday
General Meeting 9 June 2017
11.00 am on Monday
12 June 2017
Admission and commencement 8.00 am on Tuesday
of dealings in the New Ordinary 13 June 2017
Shares
New Ordinary Shares credited Tuesday 13 June
to CREST members' accounts 2017
(where applicable)
Despatch of definitive share within 10 days of
certificates for the New Ordinary Admission
Shares in certificated form
(where applicable)
1. The dates and times given in this announcement are based on
the Company's current expectations and may be subject to change. If
any of the details contained in the timetable above should change,
the revised times and dates will be notified by means of an
announcement through a Regulatory Information Service.
2. Certain of the events in the above timetable are conditional
upon, amongst other things, the approval of the Resolutions to be
proposed at the General Meeting.
3. All references are to London time unless stated otherwise.
PART 1: Letter from the Chairman
Proposed Placing and Subscription of 17,916,662 New Ordinary
Shares at 45.0 pence per share, Additional Fundraising of up to
3,333,333 New Ordinary Shares to raise up to approximately GBP1.5
million, and Notice of General Meeting
1. Introduction
The Company announced today that it was proposing to raise
GBP8.1 million (before expenses) by way of: (i) a Placing by Stifel
and Liberum of 14,083,332 Placing Shares with existing and new
institutional investors at the Issue Price; and (ii) a Subscription
of 3,833,330 Subscription Shares with certain other investors at
the Issue Price and to raise up to a further GBP1.5 million through
the Additional Fundraising. The Issue Price of 45.0 pence
represents a 15.1 per cent. discount to the closing mid-market
price of the Company's Ordinary Shares on 24 May 2017, being the
latest practicable date prior to the date of this announcement.
The Directors believe that there are significant opportunities
to enhance returns to shareholders through:
a) additional investment into the Portfolio Companies to
accelerate them towards significant value inflection milestones,
initially being the completion of series A financings, and
ultimately exits;
b) investment in new pipeline opportunities; and
c) the exploration of potential transformational M&A
activity within the IP commercialisation sector.
The Directors propose to use the majority of the net proceeds
receivable by the Company under the Offer:
a) principally to continue the acceleration of the development
of the Portfolio Companies, seeking to meet funding requirements
needed to achieve completion of external series A fundraisings, to
take the companies further toward commercialisation and ultimately
potential exit opportunities, in particular its actively managed
assets in Vortex, Glycotest, Wanda and ProAxsis;
b) to invest in new pipeline opportunities;
c) to explore transformational M&A opportunities for the
Company with a view to gaining critical mass in the IP
commercialisation sector; and
d) for general corporate purposes.
The Directors also intend to use any proceeds received through
the Additional Fundraising as disclosed directly above.
Currently, the Company does not have sufficient authority in
place to allot the New Ordinary Shares on a non-preemptive basis.
Accordingly, it is proposed that the following resolutions will be
proposed at the General Meeting in order that the Offer can
proceed:
-- to authorise the Directors to allot and issue up to
21,249,995 New Ordinary Shares for the purposes of the Offer;
and
-- to disapply pre-emption rights in connection with the
proposed allotment and issue of the New Ordinary Shares pursuant to
that authority.
The Offer is conditional, amongst other things, on the passing
of the Resolutions by Shareholders at the General Meeting, notice
of which is set out in a circular expected to be posted to
Shareholders ("Circular") on Friday 26 May 2017. If the Resolutions
are passed, the New Ordinary Shares will be allotted after the
General Meeting. The Offer is not being underwritten.
2. Background
NetScientific is a transatlantic healthcare investment group
with a differentiated investment strategy focused on building
transformative businesses within the digital health, diagnostics
and therapeutics sub-sectors. The Company's objective is to source,
fund and commercialise healthcare companies that significantly
improve the lives of people with chronic diseases.
Following Francois Martelet's appointment as CEO in May 2015 and
a subsequent review of its portfolio, the Group has re-aligned its
portfolio to focus strategically solely on the three healthcare
sub-sectors of digital health, diagnostics and therapeutics. As a
result of the review, the Group divested or discontinued its
investments in a number of its portfolio assets. The Directors
believe these healthcare sub-sectors are in attractive growth
markets with large commercial potential, where demand from people
living with chronic diseases is growing and the costs associated
with dealing with such diseases are high.
The Group's aim is to maintain a portfolio of a limited number
of actively managed companies and a seed portfolio of smaller
investments.
NetScientific's business strategy is based on advancing the
Portfolio Companies towards significant value inflection points,
including private funding rounds with third party investment and
eventual exit through a trade sale or public listing. The Group is
an active investor, providing extensive management support and
typically taking board representation in its Portfolio Companies.
The Company currently has board representation in all five of its
Portfolio Companies. Where available, the Group seeks additional
grant funding for its Portfolio Companies, thereby reducing the
need for dilutive equity funding.
As at 24 May 2017, the Company had four actively managed
Portfolio Companies in which it owns a majority holding on a fully
diluted basis: Vortex Biosciences, Wanda, ProAxsis and Glycotest.
It also holds a minority interest in PDS Biotechnology. To date the
Portfolio Companies have received a total investment of
approximately GBP29.5 million from the Company and a further
GBP19.5 million in grant funding.
The Group is now primarily concentrating on accelerating the
development of Vortex, Glycotest, Wanda and ProAxsis. It also
intends to manage its minority investment in PDS Biotechnology. The
point at which optimum value has been reached will be a matter of
discretion for the Company.
NetScientific will continue to actively manage its Portfolio
Companies, seeking to maximise shareholder return in the form of
capital growth. However, there are no fixed targets for the length
of time during which an investment may be held (as opposed to a
traditional VC company), as this will be dependent both on progress
within each Portfolio Company, and availability of funding. The
Group's strategy means that no realisation of assets will be
attempted until optimum value has been developed through
achievement of key technical and commercial milestones usually
reflected in regulatory approvals or demonstrable commercial
traction.
Each of the Portfolio Companies has currently begun the process
of targeting external funding through series A fundraising rounds,
including formal engagement of third party brokers to run each
process, with completion of each of these aimed for during the
course of 2017.
In addition, the Company has identified four new potential
pipeline investments that are currently in the process of extended
due diligence. The potential pipeline companies are focused on
pre-proof-of-concept, proof-of-concept and Phase I staged assets,
across therapeutics and medical technology sub-sectors, such as
cell extract and imaging, centred on chronic diseases within
oncology, auto-immunology and cardiovascular conditions.
The Group is also actively working on sourcing new relationships
with both universities and institutes, with early stage discussions
ongoing with a number of parties. It is aiming to formalise such
relationships during the course of the 2017 and 2018.
3. Current trading and prospects
On 3 April 2017 the Company announced its audited full year
results for the year ended 31 December 2016. For that period the
Company reported audited revenues of approximately GBP0.5 million
and a loss after tax of GBP13.1 million. Cash used in operations
totalled GBP12.9 million during the 2016 financial year, and cash
and cash equivalents on the balance sheet as at 31 December 2016
were approximately GBP9.5 million.
On 24 April 2017 the Company announced the sale of Wanda's
shareholding in OncoVerse to BTG plc for an undisclosed amount. The
sale represented the first exit for the Group since its inception,
delivering a strong return on the Group's initial investment and
constituting a successful exit from the first downstream
application generated from Wanda.
On 22 February 2017 Vortex announced that it had begun
commercial launch of its VTX-1 Liquid Biopsy System, on 31 March
2017, it further announced the publication of two papers further
validating its circulating tumour cell capture technology and, on
24 May 2017, it announced that it had initiated two clinical
research studies with UCLA in patients with Non-Small Cell Lung
Cancer (NSCLC).
The Company has started series A fundraising rounds for each of
the Portfolio Companies and is satisfied with the current progress
being made. The Glycotest series A fundraising has already
attracted indicative term sheets from a number of interested
parties as set out in more detail below.
Outlook
The Board is encouraged by the Group's and the Portfolio
Companies' progress over the 2016 financial year and the first four
months of 2017 and remains confident that each of the Portfolio
Companies offers the potential to generate significant shareholder
returns over the coming years, beginning with the completion of
series A fundraisings.
In addition, as indicated by the near term pipeline
opportunities, the Group continues to see a healthy stream of new
investment opportunities derived from the management team and the
Board's extensive transatlantic networks.
4. Summary of Portfolio Companies
Vortex Biosciences
Vortex Biosciences is a US based cancer diagnostic company with
a novel liquid biopsy diagnostic instrument for isolation and
enrichment of circulating tumour cells for further diagnostic
analysis. The technology enables researchers and clinicians to
capture, analyse, and enumerate tumour cells for use in downstream
clinical applications such as treatment selection, monitoring
disease progression and drug treatment effectiveness that are
important in precision medicine. Vortex has entered into an
exclusive licence for a series of four patents covering cell
electroporation technology from Harvard.
At the beginning of 2016, Gene Walther joined Vortex as CEO
having previously spent several years in the global health sector,
most recently as a Consultant to the Paul G. Allen Family
Foundation where he advised on their Ebola strategy with a
particular focus on the role of diagnostics. Prior to this, he was
the Deputy Director, Diagnostics, for the Bill & Melinda Gates
Foundation, Executive Chairman of the Board of GenturaDx and
President and Global Head of Diagnostics at Novartis.
During 2016 Vortex also appointed a number of prominent advisers
to its Scientific Advisory Board, led by Massimo Cristofanilli,
M.D., and appointed Deborah Neff, formerly the Chief Operating
Officer of Complete Genomics, as a non-executive director to its
board.
In addition, Vortex gained a CE Mark for its liquid biopsy VTX-1
system and registered it with the FDA in August 2016 as a Class 1
device. The Company has 18 peer reviewed publications and over 45
abstracts validating the performance of the Vortex technology. This
technology has processed tests in under one hour, recovers over 60
per cent. of circulating tumour cells and captures under 100 white
blood cells per processed millilitre. The Directors believe that
Vortex is well placed to exploit current market dynamics based on
VTX-1 displaying industry-leading ease of use, collection
efficiency, CTC purity, isolation of intact and viable CTCs across
a diverse set of cancer types.
Vortex is initially focused on the research market with a medium
term strategy to move into the larger clinical oncology diagnostic
segment once it has received FDA approval, with first clinical
sales forecast in 2019. Vortex is targeting to finalise discussions
with strategic medical diagnostic partners in 2017, allowing
clinical trials to be launched in 2018 using a partner's approved
clinical assays. Collaborations and clinical research studies have
begun, focused on lung cancer diagnosis and drug selection for
immunotherapy drugs.
Having achieved the commercial launch of VTX-1 in February 2017,
some of the key milestones for Vortex during 2017 will be the
completion of PD-L1 and EGFR assays utilising CTCs, aiming to close
a series A financing and achieving its first commercial sale of
VTX-1.
As at 31 December 2016 the Company had invested GBP13.2 million
in Vortex and on an undiluted basis holds 95 per cent. of its share
capital (65 per cent. on a fully diluted basis). It expects to
invest a further GBP5.5 million within 2017 ahead of completion of
the series A financing, which the Company and Vortex aim to close
during the second half of 2017.
Glycotest
Glycotest is a US based diagnostics company, developing
biomarkers for clinical laboratory services used in the diagnosis
of liver cancers and fibrosis-cirrhosis, which the Directors
believe represents a $1 billion market opportunity. Its blood-based
biomarkers take advantage of sugar-related disease signals and the
company has issued patents to over 50 serum proteins with sugar
structures that are altered in liver disease. The biomarkers are
being developed into tests and test panels intended for the
surveillance of patients with serious liver disease.
Based on separate 208 and 127 patient head-to-head clinical
studies, completed in May 2015 and May 2016 respectively, and as
published in 2017 and disclosed in 2016 respectively, Glycotest's
HCC diagnostic panel demonstrated superior performance versus the
current dominant blood test (AFP) for the discrimination of
early-stage and AFP-negative HCC from cirrhosis and other chronic
liver diseases.
Commercialisation of Glycotest's lead product in the US, the HCC
Panel for the predominant form of primary liver cancer, is
progressing well and remains on track. In 2016 Glycotest formed a
Medical Advisory Board, which comprises prominent experts in liver
disease, to advise on the development of diagnostic tests for liver
related diseases. In addition, it has strengthened its intellectual
property portfolio with a Japanese Patent grant. Also in 2016 it
has developed an HCC Panel clinical validation study plan and
identified investigators and sites.
A key milestone aimed for in respect of Glycotest in 2017 is the
closing of its series A financing, which is progressing well.
Glycotest is aiming to sign the relevant documentation by the end
of June 2017. It has already attracted indicative, non-binding term
sheets from a number of interested parties, with investment being
subject to conditions including clinical validation tests being
successful. The indicative pre-money valuations within the term
sheets represent an uplift to the current implied valuation of
Glycotest based on the Company's investment to date and its
undiluted 87.5 per cent. shareholding (67 per cent. on a fully
diluted basis) in it. Additional broad deliverables for Glycotest,
which are conditions to the completion of the current investment
round, include the opening of a CLIA lab to perform analytical
testing, the commencement of its validation study and completing
the method development of specific biomarkers for use in the HCC
Panel. As at 31 December 2016 the Company had invested GBP2.4
million in Glycotest. It expects to invest a further GBP0.5 million
within 2017 ahead of completion of the series A financing.
Wanda
Wanda is a US located company which provides a cloud based
clinical decision support software solution to help healthcare
providers improve the quality of outpatient care and reduce the
costs associated with managing chronic diseases.
Its software as a service aims to reduce the economic burden of
hospital readmissions by providing tools to monitor and manage
patients with chronic diseases, including congestive heart failure
and chronic obstructive pulmonary disease. The platform technology
builds upon a patented predictive analytics and knowledge engine
based on 15 years of research at UCLA that utilises information
from in-home and remote monitoring devices used by patients.
Wanda has generated principally software development revenues of
approximately GBP0.5 million in the 2016 financial year which
represented sales made to OncoVerse for the development of its
oncology platform. Wanda has successfully validated its product for
the home health market by delivering an end to end product for case
management workflow. In 2016, Wanda entered into contracts with
several home care agencies in addition to the collaboration
agreement with Dignity Health, one of the biggest hospital groups
in the US, to launch OncoVerse.
On 24 April 2017, the Company announced the sale of Wanda's
holding in OncoVerse to BTG plc for an undisclosed amount. The sale
represented the first exit for the Group since its inception
delivering a strong return on the Group's initial investment and
constitutes a successful exit from the first downstream application
generated from Wanda.
Wanda has also formed channel partnerships and entered into
reseller agreements, including with Konnect Patient, Inc and
Rainmakers US Inc. Out of a portfolio of nine pending patents, the
first patent was granted during the 2016 financial year.
During 2016, despite an upgraded product suite, Wanda achieved
only limited business traction and revenues in the market have been
below expectations. The Group took the decision to restructure
Wanda to refocus on its core capabilities and to progress the
company through its commercialisation phase. This resulted in the
appointment of Dr Foad Dabiri as Chief Executive Officer of Wanda
in December 2016 and the subsequent realisation of value through
the sale of Wanda's shareholding in OncoVerse. In addition, a
Scientific Advisory Board was formed for Wanda under the leadership
of Dr. M. Sarrafzadeh, Ph.D, UCLA, and which is comprised of
distinguished physicians, health economics scientists, and
technologists. Due to these factors, an in-house impairment review
was conducted and a provision was taken by the Group on the debt
provided to Wanda, reducing the outstanding debt from GBP8.8
million to GBP3.8 million.
Wanda's key objectives for 2017 include:
-- Utilising, testing and expanding channel partnerships and resellers;
-- Signing up ten new commercial contracts;
-- Targeting $800,000 in recurring revenue for the 2017 financial year;
-- Delivering new product modules on mobile and analytics fronts; and
-- Building a sales pipeline for Health Systems and Accountable Care Organisations.
As at 31 December 2016 the Company had invested GBP10.0 million
in Wanda and on an undiluted basis holds 71 per cent. of its share
capital (60 per cent. on a fully diluted basis). It expects to
invest a further GBP1.5 million ahead of completion of the series A
financing, which the Company and Wanda aim to close during the
second half of 2017.
ProAxsis
ProAxsis is a UK based medical diagnostics company developing a
range of products for the capture, detection and measurement of
active protease biomarkers of respiratory disease. Smart molecules
- known as ProteaseTags(R) - trap an active protease within a
complex biological sample to enable visual readout of its presence,
providing a novel tool to identify and quantify active protease
biomarkers. Management estimates ProAxsis to have the potential to
achieve revenues of GBP70-80 million per annum by 2022 (and
potentially GBP300 million in 2025) based on an assumption of 12
million patients worldwide and ProAxsis capturing approximately 30
per cent. of the estimated market.
Since launching its ProteaseTag Active Neutrophil Elastase
Immunoassay kit for CF, bronchiectasis and COPD to research
laboratories in 2015, ProAxis has initiated collaborations with key
academic centres, including the University of Oxford. In September
2016, ProAxsis successfully registered a CE Mark for the
immunoassay, enabling an expansion of its usage into a clinical
setting. Separately, the company has reached late stage development
of a clinical point of care test for neutrophil elastase to allow
ongoing monitoring of a range of respiratory diseases.
In 2016 it established a prominent Scientific Advisory Board,
under the leadership of Professor Stuart Elborn, ex-European
President of the Cystic Fibrosis Society, to support the
development of its Protease Tag(R) activity-based immunoassays and
point-of-care tests.
ProAxsis will continue to focus on building its academic and
pharma customer base and developing other products for different
indications. Key milestones for 2017 include aiming to close a
series A fundraising in the second half of 2017, and launching
NEATstik(R) point of care test following grant of a CE Mark for
this.
As at 31 December 2016 the Company had invested GBP1.2 million
in ProAxsis and on a fully diluted basis holds 57 per cent. of its
share capital. It expects to invest a further GBP1.0 million in
2017 ahead of completion of the series A financing, which the
Company and ProAxsis aim to close during the second half of
2017.
PDS Biotechnology
In 2016 PDS Biotechnology, a US company developing a new
generation of cancer and infectious disease immunotherapies,
continued to see progress with its T-cell activating technology
platform, Versamune(R). Versamune(R) combines three critical
attributes for an effective immunotherapy: effective presentation
of the disease-specific antigen (protein, DNA or RNA) to the immune
system to prime both helper and killer T-cells, induction of T-cell
activating stimuli, and reduced tumour immune suppression leading
to a potent anti-tumour response without the conventional
associated toxicities. The Company expects that the PDS
Biotechnology's oncology pipeline will include seven primary
trials, based on milestones and subject to sufficient funding being
raised for the trials, including immunotherapies for pancreatic,
ovarian, breast and colorectal cancers, in addition to its lead
PDS0101 programme for several HPV-related cancers.
PDS Biotechnology made some important advances through the 2016
finanial year in progressing Versamune(R), and presented results at
a number of conferences (most recently PDS0101 Phase l/lla data for
HPV-induced cancers and pre-cancers at the Society for
Immunotherapy of Cancer meeting in May 2016). A key event for PDS
Biotechnology was meeting with the FDA in August 2016 regarding the
design of the Phase IIb clinical studies in several HPV related
cancers.
Currently, pre-cervical, anal, vaginal and vulvar cancers may be
treated by surgical removal of lesions, however PDS0101 could offer
an effective non-surgical alternative. Preliminary results show
that it primes and activates the body's defence mechanisms
(T-cells) to recognise, target, and kill precancerous and cancerous
cells that display HPV viral proteins, which are detected in over
99 per cent of cervical cancers. The results represented an
important milestone for PDS Biotechnology.
Key milestones planned for 2017 include the completion of a
pharma partnership and a series A financing, to be followed up by a
scaling up PDS0101 manufacturing and the initiation of multiple
Phase IIb clinical trials.
The Company has to date invested GBP2.7 million in PDS
Biotechnology and on an undiluted basis holds 17.4 per cent. of its
share capital (14.5 per cent. on a fully diluted basis). It does
not currently expect to invest further capital in PDS Biotechnology
in the next funding round but the Board continues to see the
potential of PDS Biotechnology to create significant shareholder
value for the Group's shareholders.
5. Reasons for the Offer and use of proceeds
The Directors believe that there is significant embedded value
within the Portfolio Companies, although the four majority held
Portfolio Companies all require additional capital investment in
order to reach value inflection points, initially being the
completion of external fundraisings. The Group will look to
replenish its pipeline investments through investments across its
core sectors (digital health, diagnostics and therapeutics), with
four UK and European opportunities which are currently in active
due diligence. The Group will also explore transformational M&A
opportunities at the Group level with a view to gaining critical
mass within the IP commercialisation sector and thus benefit from
synergies in corporate costs across an enlarged group and further
increase its access to sourcing opportunities for its pipeline.
Since the GBP18.0 million fundraising announced in September
2015 and completed in November 2015, the Group has invested
approximately GBP15.8 million in its Portfolio Companies to bring
them closer to commercialisation and it expects to invest a further
GBP8.5 million in 2017 ahead of completion of their various funding
rounds.
Accordingly, the Directors propose to use the majority of the
net proceeds receivable by the Company under the Placing and
Subscription:
a) principally to continue the acceleration of the development
of the Portfolio Companies, seeking to meet funding requirements
needed to achieve completion of external series A fundraisings, to
take the companies further toward commercialisation and ultimately
potential exit opportunities, in particular its actively managed
assets in Vortex, Glycotest, Wanda and ProAxsis;
b) to invest in new pipeline opportunities;
c) to explore transformational M&A opportunities for the
Company with a view to gaining critical mass in the IP
commercialisation sector; and
d) for general corporate purposes.
The Directors also intend to use any proceeds received through
the Additional Fundraising as disclosed directly above.
The Company believes that, on the completion of the GBP8.1
million Placing and Subscription, it will have sufficient working
capital to deliver its strategy until beyond the end of the 2018
financial year. The total cash requirement of the Company over that
period is GBP18.4 million, GBP9.5 million of which will be met by
the Company's existing cash balances (GBP9.5 million as at 31
December 2016), with the remainder to be funded with expected net
proceeds from the Placing and Subscription of approximately GBP7.5
million and anticipated exit proceeds from the realisation of
investments of approximately GBP1.4 million.
The fundraising requirement has been calculated as below:
Requirement GBP(m)
-------------------------------- ---------
Investment required to GBP9.5m
complete Series As
-------------------------------- ---------
Central costs GBP5.5m
-------------------------------- ---------
Investment in new opportunities GBP3.4m
(including the costs of
exploring transformational
M&A activity)
-------------------------------- ---------
Forecast cash requirement GBP18.4m
-------------------------------- ---------
Audited cash/cash equivalent GBP9.5m
balance (as at 31 December
2016)
-------------------------------- ---------
Estimated exit proceeds GBP1.4m
from investments
-------------------------------- ---------
Net fundraising requirement GBP7.5m
-------------------------------- ---------
The Directors believe that the flexibility provided by a
non-preemptive placing and subscription makes it the most
appropriate fundraising structure for the Company at this time. It
would allow a number of existing and new institutional and
individual investors to participate in the Offer.
If Shareholders do not vote in favour of the Resolutions at the
General Meeting, the Placing and Subscription cannot be implemented
by the Company. If the Placing and Subscription do not proceed and
additional financing does not become available to the Company by
the end of April 2018, the Company may be forced to cease trading,
in which case Shareholders could lose their entire equity
investment.
6. Principal Terms of the Placing and Subscription
The Company has conditionally raised GBP8.1 million before
expenses by way of: (i) a Placing by Stifel and Liberum of
14,083,332 Placing Shares with existing and new institutional
investors at the Issue Price; and (ii) a Subscription of 3,833,330
Subscription Shares with certain high net worth individuals and
companies at the Issue Price.
The Offer is conditional, among other matters, upon:
a) the passing of all of the Resolutions by Shareholders;
b) the Placing Agreement becoming or being declared
unconditional in all respects (except, in respect of the
Subscription only, in so far as the Placing Agreement is
conditional on the Subscription Agreement becoming unconditional)
and not having been terminated in accordance with its terms before
Admission; and
c) Admission occurring no later than 8.00 am on 13 June 2017 (or
such later time and/or date (being no later than 8.00 am on 30 June
2017) as Stifel, Liberum and the Company may agree).
If any of the conditions are not satisfied (or waived), the New
Ordinary Shares will not be issued and all monies received from the
Placees and the Subscribers will be returned to them (at their own
risk and without interest) as soon as possible thereafter.
The New Ordinary Shares are not being allotted subject to
clawback. The New Ordinary Shares will be issued free of all liens,
charges and encumbrances and will, when issued and fully paid, rank
pari passu in all respects with the Existing Ordinary Shares,
including the right to receive all dividends and other
distributions declared, made or paid after the date of their
issue.
Application will be made in due course to the London Stock
Exchange for the Admission of the New Ordinary Shares to trading on
AIM. Upon Admission it is also expected that the New Ordinary
Shares will be enabled for settlement in CREST.
7. Principal Terms of the Additional Fundraising
In addition to the Placing and the Subscription, the Company is
targeting a maximum further raise of GBP1.5 million (before
expenses) by way of an Additional Fundraising of up to 3,333,333
New Ordinary Shares at the Issue Price. The Additional Fundraising
will be by way of a private placing or subscription at the
Directors' discretion, and is not open to the public. The
Additional Fundraising will be available only to existing
institutional or other investors which the Directors are satisfied
can lawfully invest on a private placement basis.
The Additional Fundraising is not underwritten and neither
Stifel nor Liberum is acting for the Company, or any other person,
in connection with the Additional Fundraising.
The Additional Fundraising Shares will be allotted and issued
fully paid and will, on issue, rank pari passu with the Existing
Ordinary Shares in issue, including the right to receive, in full,
all dividends and other distributions thereafter declared, made or
paid after the date of issue together with all rights attaching to
them and free from all liens, charges and encumbrances of any
kind.
8. Related Party Transaction
The participations of Woodford and Invesco in the Placing
constitute related party transactions under the AIM Rules for
Companies by virtue of Woodford and Invesco each being a
substantial shareholder in the Company. The Directors consider,
having consulted with Stifel, the Company's nominated adviser, that
the terms of the transactions are fair and reasonable in so far as
the Company's Shareholders are concerned.
9. Risk Factors
The attention of Shareholders is drawn to the risk factors set
out in part 2 of this announcement, which provide additional
information on the risks associated with ownership of the Ordinary
Shares.
10. Recommendation
The Directors believe that the Offer and the passing of the
Resolutions are in the best interests of the Company and
Shareholders, taken as a whole. Accordingly, the Directors
unanimously recommend Shareholders vote in favour of Resolutions 1
and 2, as the Directors intend to do in respect of their aggregate
beneficial holdings of 98,858 Ordinary Shares, representing 0.19
per cent. of the Existing Ordinary Shares..
The Placing, Subscription and Additional Fundraising are
conditional, among other things, upon the passing of the
Resolutions at the General Meeting. Shareholders should be aware
that if the Resolutions are not approved at the General Meeting by
the Shareholders, the Offer and Additional Fundraising will not
proceed.
PART 2: Risk Factors
Overview
This section should be carefully considered by anyone evaluating
whether to invest in the Company. As necessary, you should consult
a personal adviser authorised under the FSMA specialising in
advising on acquiring shares.
The Directors believe the following risks to be the most
significant. However, they do not necessarily comprise all risks
associated with an investment in the Company and are not in any
particular order of priority. Additional risks and uncertainties
not currently known to the Directors or which the Directors
currently deem immaterial may also have an adverse effect on the
Group and the information set out below does not purport to be an
exhaustive summary of the risks affecting the Group.
If any of the following risks were to materialise, the Group's
business, financial condition, results, future operations, the
commercialisation of technology, or prospects could be materially
adversely affected, the Company's share price could decline and an
investor may lose part or all of their investment.
The Group's financial position may be adversely affected if the
Resolutions are not passed
If Shareholders do not approve the Resolutions to be proposed at
the General Meeting, the Offer cannot be implemented. If the
Placing and Subscription do not proceed and no alternative third
party funding becomes available to the Company by April 2018, the
Company would seek to manage the Group's ongoing cash requirements
and investment activities to decrease any additional amounts being
invested in the Portfolio Companies by the Company and/or ceasing
to invest in new opportunities. This would constitute a change in
the Company's current investment strategy. Alternative scenarios
may include the sale of Portfolio Companies to fund the ongoing
funding requirements of other Portfolio Companies. However, there
can be no assurances that such change in strategy would be
successful and/or that any sales by the Company of any interests in
any Portfolio Companies can be achieved on terms commercially
acceptable to the Company and on a timely basis or at all.
Therefore, if the Offer does not proceed and no such alternative
third party funding becomes available to the Company, it may not
have sufficient capital to maintain its current investment
strategy. This could results in delays in the commercialisation of
the products of the Portfolio Companies and/or larger amounts being
sought from third parties pursuant to series A fundraisings,
thereby diluting the Company's interest more than currently
anticipated. Any such failure to obtain sufficient working capital
to fund its current investment strategy may therefore have a
material adverse effect on the value of the Group and the share
price of the Ordinary Shares. In such case Shareholders could lose
part of or all of their investment in the Company.
The Glycotest series A fundraising is contingent on successful
validation results which may be delayed or may not be achieved
The Company and Glycotest are currently in discussions with
third parties which are progressing well in connection with the
series A fundraising for Glycotest. Any such fundraising is
contingent on due diligence that includes successful investor led
clinical validation results from trials conducted by a third party
using the Glycotest's HCC Panel. Such due diligence is in progress
and Glycotest is aiming to sign the relevant documentation for the
series A fundraising by the end of June 2017. However, there can be
no assurances that the validation results are successful and/or
that negotiations will be completed by that time and that legally
binding agreements will be entered into. To the extent that the
negotiations are not successful, the Glycotest series A fundraising
may not proceed in its current form and it will seek to enter into
further negotiations with other interested parties, which will,
even if conducted in a timely fashion and successful, result in a
time delay in the series A fundraising and the commercialisation of
the HCC Panel. This in turn would have an adverse effect on the
Company's financial position and the share price of the Ordinary
Shares.
The Group cannot guarantee that its strategic aim to develop new
collaborative relationships with strategic partners, universities,
teaching hospitals and other research institutions will be
successful
The Group is strategically aiming to develop new collaborative
relationships with strategic partners, universities, teaching
hospitals and other research institutions, directly or indirectly,
from which the Group could source future investment opportunities.
If the Group fails to secure new relationship agreements with these
institutions and organisations this could adversely impact the
Group's ability to source new opportunities which are in keeping
with its investment criteria.
The Group is subject to foreign currency fluctuations,
especially the USD/GBP exchange rate
Four of the Group's five Portfolio Companies are based in the US
and have a functional currency in US dollars. In addition, the
Company intends to allocate the majority of the proceeds of the
Placing (which will be denominated in sterling) to its US Portfolio
Companies whose functional currency is US dollars. Foreign exchange
risk could affect any licensing and royalty payments or other
income in US dollars. Accordingly, the Group may experience adverse
fluctuations in revenues and expenses because of fluctuations in
currency exchange rates. The Company does not currently hedge
against all currency exposures, but does buy US dollars to mitigate
its primary currency exposure.
The Group's Portfolio Companies may not complete their target
funding rounds within the expected timeframe, or at all
The Group has invested in early-stage research and technology
companies that are generally regarded as higher risk than many
other forms of investment. Currently, the Portfolio Companies are
loss making and do not generate net cash inflow. The Group's
Portfolio Companies are all currently engaged with fundraising
rounds, targeting external third party capital investment to take
them forwards towards commercialisation. There can be no guarantee
of success, with the stated target timeframes, or at all. Should
the fundraising rounds be delayed, or not complete at all, the
requirement for NetScientific to invest further capital in the
Portfolio Companies will increase. This could ultimately lead to
the Group requiring additional capital beyond what is raised within
the Offer, or the Group may have to liquidate one or more of its
Portfolio Companies, impacting the overall value of the Group.
Competition in the digital health, diagnostic and therapeutic
industries is intense
There is intense competition among digital health, diagnostic
and therapeutic companies. The Group is aware of competitors who
have developed or are developing products that address the same
areas that the Portfolio Companies are targeting. These companies
may be significantly better resourced, or their products or
services could be more effective than and/or differently regulated
from any products developed by the Group.
The Group has identified the following risks to commercialising
their technology successfully and which may affect the Group's
value and return on investments:
Demand for the Group's products is unpredictable
Demand for any of the Portfolio Companies' products will depend
in large part on the development and expansion of the digital
health, diagnostic and therapeutic markets. The size and rate of
growth of these markets may in the future fluctuate
significantly.
Clinical trials of products may not be successful
Products may not proceed from proof of concept to clinical
trials. Clinical trials of the Portfolio Companies' products may
not begin on time, may not be completed on schedule, or at all, or
may not be sufficient for registration of the products or result in
products that can receive necessary clearances or approvals.
Numerous unforeseen events during, or as a result of, clinical
testing could delay or prevent commercialisation of such
products.
Third-party reimbursement may not be available for products
developed by the Group
The Group's ability to commercialise the Portfolio Companies
successfully or to attract potential strategic partners will depend
in part on the price levels and the extent to which reimbursement
for the costs of treatment relating to the Group's products will be
available from government health administration authorities,
private health insurers and other third-party payers, as well as
government health care programmes. Governments and other third
party payers are increasingly attempting to contain healthcare
costs, in part by challenging the price of medical products and
services and restricting eligibility for reimbursement.
The Group's portfolio depends on new and innovative
technologies
The digital health, diagnostic, and therapeutic industries are
characterised by rapid technological changes, frequent new product
introductions and enhancements, and evolving industry
standards.
The Group is subject to competing intellectual property and
rapid technology change
The market sectors in which the Portfolio Companies participate
are highly competitive and constantly subject to rapid
technological changes. Intellectual property licensed to the Group
may become obsolete or uneconomical if there are any advances in
technology or if the Group's competitors succeed in developing
alternative approaches to the same technology.
The Group's intellectual property could become the subject of
litigation
Litigation involving intellectual property is expensive, complex
and lengthy, and its outcome is difficult to predict. Were any of
the Portfolio Companies to become involved in an infringement
claim, such involvement may consume significant time, financial and
other resources, and may result in key technical and management
personnel of such Portfolio Company diverting their attention and
focus away from their normal duties and operations. In an
infringement proceeding, a court may decide that a patent is not
valid or is unenforceable, or may refuse to stop the other party
from using the intellectual property at issue. An adverse
determination in any litigation or other proceedings could impair
the ability of the relevant Portfolio Company to exploit any
intellectual property licensed to it. If such Portfolio Company is
unsuccessful in defending any such claims, it may have to pay
substantial damages and/or legal costs to the successful third
party, and may be required to obtain a licence for, or cease, the
manufacture, use or sale of infringing intellectual property.
Further, because of the substantial amount of discovery required in
connection with intellectual property litigation or other
proceedings, there is a risk that confidential information could be
compromised by disclosure during discovery.
The Group may not be able to exit its investments
The ability of the Company to exit its equity shareholdings
depends in part on the market's appetite for investments in
technology companies with limited or no trading history, as well as
valuations in the market sectors in which the Group
participates.
The Group's licensing agreements have limitations
The Group typically licences intellectual property that it is
seeking to commercialise and, where licenced, usually does so
exclusively with rights to use certain patents and/or patent
applications by the intellectual property owners and therefore may
enforce only the rights it receives under licensing agreements from
the intellectual property owners, such as the first right to bring
and/or defend infringement claims. These rights, in particular, do
not typically include the right to control the preparation, filing,
prosecution or maintenance of patent applications or patents except
under separate agreement, although in practice the Group often
works closely with its licensors about these matters.
Protection of intellectual property licensed to the Group
The intellectual property licensed to the Group is protected by
patent, trademark, trade dress, copyright, unfair competition and
trade secret laws, as well as confidentiality procedures and
contractual restrictions. These laws, procedures and restrictions
provide only limited protection and any such intellectual property
rights may be challenged, invalidated, circumvented, infringed or
misappropriated. In particular, patents might not contain claims
that are sufficiently broad to prevent others from utilising the
technology in question. Third parties may independently develop
similar or superior technology which does not infringe any
protection afforded by the intellectual property available to the
Group. Unauthorised use, disclosure or reverse engineering of that
intellectual property may occur.
Patents pending may not be granted
Most of the intellectual property licensed to the Group is
covered by patent applications that have not yet had their claims
approved. Though the Group only invests in projects and businesses
that have submitted or will submit patent applications that the
Directors believe have a reasonable probability of being granted,
there is significant risk the patent applications may not be
granted, or, if they are granted, may be granted with claims
significantly less desirable than those originally sought.
The Group's insurance coverage may not be adequate
The Group's business exposes it to potential product liability,
professional indemnity and other risks which are inherent in the
research and development, pre-clinical studies, clinical trials,
manufacturing, marketing and use of digital health, diagnostic and
therapeutic products. Necessary insurance cover may not be
available to the Group at an acceptable cost, if at all, or, if
there is any claim, the level of the Group's insurance cover may
not be adequate.
The Group is subject to extensive government regulation and
legal uncertainty
The products being developed by the Group are subject to
extensive and frequently changing legislation, regulation and
taxation, including that of the FDA, federal and state governmental
authorities in the United States and other comparable regulatory
authorities in the United Kingdom and European Union. Adverse
regulatory rulings may lead to technologies in which the Group has
invested becoming obsolete.
The Group relies on key executives and personnel
A significant part of the Group's value and the key to its
future technology creation also lies with the scientists and
engineers who partner with the Group and take up senior positions
within the Portfolio Companies. These individuals are key to the
Group's ability to develop and commercialise its technologies.
Retention of top executives and personnel in both its investee
companies and at Group level, and the maintenance and attraction of
such a qualified workforce, is a high priority for the Group.
The Company's development plans are subject to review and
change
The development plans for different Group companies as at the
date of this announcement comprise forward-looking information
including a mixture of targets, milestones and other planned
project management steps. These plans are subject to periodic
review, change and reprioritisation by reference to the development
of one or more Group companies.
It may be difficult to realise an investment on AIM. The market
price of the Ordinary Shares may fluctuate widely in response to
different factors
The New Ordinary Shares will be quoted on AIM rather than the
Official List. The AIM Rules for Companies are less demanding than
those of the Official List and an investment in a share that is
traded on AIM may carry a higher risk than an investment in shares
listed on the Official List. The share price of publicly traded
companies can be highly volatile. It may be more difficult for an
investor to realise his or her investment in the Company than to
realise an investment in a company whose shares or other securities
are listed on the Official List or other similar stock exchange.
Shares held on AIM are perceived to involve higher risks. AIM has
been in existence since 1995 and is a market designed for small and
growing companies but its future success and liquidity as a market
for the Ordinary Shares cannot be guaranteed. The price at which
the Ordinary Shares are traded and the price at which investors may
realise their investment are influenced by a large number of
factors, some specific to the Company and its operations, and some
which may affect quoted companies generally. Admission to AIM does
not imply that there will be a liquid market for the Ordinary
Shares. Consequently, the price of Ordinary Shares may be subject
to fluctuation on small volumes of shares, and the Ordinary Shares
may be difficult to sell at a particular price.
Definitions
The following definitions apply throughout this announcement,
unless the context requires otherwise:
"Act" means the Companies Act 2006 (as amended);
"Additional Fundraising" means the issue, separate to the
Placing and Subscription, of up to a further 3,333,333 New Ordinary
Shares to institutional or other investors to whom such shares can
lawfully be offered on a private placement basis from the date of
this announcement to the date of the Additional Fundraising Close
by way of a placing or subscription at the Directors'
discretion;
"Additional Fundraising Close" means the final date for receipt
of applications to subscribe for New Ordinary Shares under the
Additional Fundraising being 11.00 am on 9 June 2017 (or such later
time as the Company may agree);
"Additional Fundraising Shares" means the New Ordinary Shares to
be issued pursuant to the Additional Fundraising;
"Admission" means the admission of the New Ordinary Shares to
trading on AIM in accordance with the AIM Rules for Companies;
"AIM Rules for Companies" means the AIM Rules for Companies and
guidance notes as published by the London Stock Exchange from time
to time;
"AIM" means the AIM market operated by London Stock
Exchange;
"Announcement" means this announcement;
"Board" or "Directors" means the directors of the Company as at
the date of this announcement;
"Business Day" means a day other than a Saturday, Sunday or
public holiday in England when banks in London are open for
business;
"Capita Asset Services" means Capita Asset Services Limited, of
The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4ZF,
registrars to NetScientific;
"CF" means Cystic Fibrosis;
"Company" or "NetScientific" means NetScientific plc;
"COPD" means Chronic Obstructive Pulmonary Disease;
"CREST member" means a person who has been admitted to CREST as
a system-member (as defined in the CREST Manual);
"CREST Regulations" means the Uncertificated Securities
Regulations 2001 (SI 2001/3755) (as amended);
"CREST" means the relevant system in respect of which Euroclear
is the operator (each as defined in the CREST Regulations);
"CTC" means circulating tumour cells;
"Enlarged Share Capital" means the entire issued share capital
of the Company immediately following the issue of New Ordinary
Shares pursuant to the Offer, assuming the maximum number of
Additional Fundraising shares are issued;
"Existing Ordinary Shares" means the 51,075,695 Ordinary Shares
in issue on the date of this announcement;
"FCA" means the Financial Conduct Authority of the UK;
"FDA" means Food and Drug Administration of the US;
"Form of Proxy" means the form of proxy for use in relation to
the General Meeting enclosed with this announcement;
"FSMA" means Financial Services and Markets Act 2000 (as amended
from time to time);
"General Meeting" means the General Meeting of the Company,
notice of which will be set out in the Circular;
"Glucosense" means Glucosense Diagnostics Limited;
"Glycotest" means Glycotest, Inc.;
"Group" means the Company, its subsidiaries, the Portfolio
Companies and the investments in certain other companies;
"HPV" means human papillomavirus;
"Issue Price" means 45.0 pence per New Ordinary Share;
"Invesco" means Invesco UK Limited or any holding company of
Invesco UK Limited or any subsidiary of such holding company;
"Liberum" means Liberum Capital Limited;
"London Stock Exchange" means London Stock Exchange plc;
"NetScientific Group" means the Company and its
subsidiaries;
"New Ordinary Shares" means up to 21,249,995 new Ordinary Shares
being issued in relation to the Offer;
"Notice of General Meeting" means the notice convening the
General Meeting;
"Offer" means the Placing, the Subscription and the Additional
Fundraising;
"OncoVerse" means OncoVerse LLC, a company in which Wanda
previously held an interest;
"Ordinary Shares" means ordinary shares of 5p each in the
capital of the Company;
"PDS Biotechnology" means PDS Biotechnology Corporation;
"Placees" means subscribers for New Ordinary Shares pursuant to
the Placing;
"Placing" means the placing of the Placing Shares at the Issue
Price, the details of which are set out in this announcement;
"Placing Shares" means the 14,083,332 New Ordinary Shares to be
allotted and issued by the Company at the Issue Price pursuant to
the terms and conditions of the Placing Agreement;
"Placing Agreement" means the agreement entered into between the
Company, Stifel and Liberum in respect of the Placing dated 25 May
2017, as described in this announcement;
"Portfolio Companies" means Vortex, Wanda, ProAxsis, Glycotest
and PDS Biotechnology;
"ProAxsis" means ProAxsis Ltd;
"Prospectus Rules" means the rules made by the FCA pursuant to
sections 73A(a) and (4) of FSMA;
"Regulatory Information Service" means a service approved by the
FCA for the distribution to the public of regulatory announcements
and included within the list maintained on the FCA's website;
"Resolutions" means the resolutions to be proposed at the
General Meeting as set out in the Notice of General Meeting;
"Restricted Jurisdiction" means United States of America, the
Republic of Ireland, Canada, Australia, Japan and the Republic of
South Africa and any other jurisdiction where the extension or
availability of the Placing would breach any applicable law;
"Securities Act" means the US Securities Act of 1933 (as
amended);
"Shareholders" means the holders of Existing Ordinary
Shares;
"Stifel" means Stifel Nicolaus Europe Limited;
"Subscription" means the conditional direct placement of the
Subscription Shares to certain other investors at the Issue Price,
the details of which are set out in this announcement;
"Subscription Agreements" means the agreements entered into
between the Company and certain individuals and companies in
respect of the Subscription dated 25 May 2017, as described in this
announcement;
"Subscription Shares" means the 3,833,330 New Ordinary Shares to
be allotted and issued by the Company at the Issue Price pursuant
to the terms and conditions of the Subscription Agreement;
"United Kingdom" or "UK" means the United Kingdom of Great
Britain and Northern Ireland;
"United States", "United States of America" or "US" means the
United States of America, its territories and possessions, any
state of the United States of America and the District of Columbia
and all areas subject to its jurisdiction;
"Vortex" or "Vortex Biosciences" means Vortex Biosciences,
Inc.;
"VTX-1" means a system, comprised of a bench-top instrument and
disposable microfluidic cartridge, for use in circulating tumour
cell enrichment, collection and analysis;
"Wanda" means Wanda, Inc.; and
"Woodford" means Woodford Investment Management LLP and, where
the context requires, the clients and funds managed by it.
APPIX I - TERMS AND CONDITIONS
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES
ONLY
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING. THIS ANNOUNCEMENT (WHICH IS FOR INFORMATION PURPOSES ONLY)
AND THE TERMS AND CONDITIONS SET OUT IN THIS APPIX ARE DIRECTED
ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA
("EEA") WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE
2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE
2003/71/EC, AS AMED FROM TIME TO TIME, INCLUDING DIRECTIVE
2010/73/EC, AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE
MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE")
("QUALIFIED INVESTORS"); AND (B) PERSONS IN THE UNITED KINGDOM WHO
ARE QUALIFIED INVESTORS AND (I) HAVE PROFESSIONAL EXPERIENCE IN
MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(1) OF THE
FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER
2005 (THE "ORDER") (II) ARE PERSONS FALLING WITHIN ARTICLE 48(2)
("CERTIFIED HIGH NET WORTH INDIVIDUALS") OF THE ORDER; (III) ARE
PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH
COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (IV)
ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED; OR
(C) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL
SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THIS APPIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT
BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS.
PERSONS DISTRIBUTING THIS ANNOUNCEMENT (INCLUDING THIS APPIX) MUST
SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR
INVESTMENT ACTIVITY TO WHICH THIS APPIX AND THE TERMS AND
CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT
PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS
APPIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION
OF ANY SECURITIES IN THE COMPANY.
THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, THE REPUBLIC
OF IRELAND, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH
AFRICA. THIS DOCUMENT (AND THE INFORMATION CONTAINED HEREIN) DOES
NOT CONTAIN OR CONSTITUTE AN OFFER OF SECURITIES FOR SALE, OR
SOLICITATION OF AN OFFER TO PURCHASE SECURITIES, IN THE UNITED
STATES, THE REPUBLIC OF IRELAND, AUSTRALIA, CANADA, JAPAN OR THE
REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE SUCH AN
OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE SECURITIES REFERRED TO
HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMED (THE "SECURITIES ACT"), AND MAY NOT
BE OFFERED OR SOLD IN THE UNITED STATES UNLESS THE SECURITIES ARE
REGISTERED UNDER THE SECURITIES ACT, OR PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. NO PUBLIC OFFERING OF THE
SECURITIES WILL BE MADE IN THE UNITED STATES.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL,
TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN THE PLACING
SHARES. THE PRICE OF SHARES IN THE COMPANY AND INCOME FROM THEM (IF
ANY) MAY GO DOWN AS WELL AS UP AND INVESTORS MAY NOT GET BACK THE
FULL AMOUNT INVESTED ON DISPOSAL OF THEIR SHARES.
By participating in the Placing, each person who is invited to
and who chooses to participate in the Placing (a "Placee") will be
deemed to have read and understood this Announcement in its
entirety, to be participating, making an offer and subscribing for
Placing Shares on the terms and conditions contained herein and to
be providing the representations, warranties, indemnities,
acknowledgements and undertakings contained in this Appendix.
Persons (including, without limitation, nominees and trustees)
who have a contractual or other legal obligation to forward a copy
of this Appendix I or the Announcement of which it forms part
should seek appropriate advice before taking any action.
Details of the Placing Agreement and of the Placing Shares
Stifel and Liberum (together the "Banks" and each a "Bank") have
today entered into a placing agreement (the "Placing Agreement")
with the Company under which, on the terms and subject to the
conditions set out in the Placing Agreement, each of the Banks, as
agent for and on behalf of the Company, has agreed to use their
reasonable endeavours to procure Placees for the Placing Shares at
the Placing Price.
The Placing is conditional, inter alia, upon the approval by
shareholders of the Resolutions to be proposed at the General
Meeting (which will grant authority to the directors of the Company
to allot the Placing Shares and disapply pre-emption rights in
respect of the Placing Shares).
Application will be made for the Placing Shares to be admitted
to trading on AIM. The Placing Shares to be issued pursuant to the
Placing will, following Admission, rank pari passu in all respects
with the existing Ordinary Shares and will carry the right to
receive all dividends and distributions declared, made or paid on
or in respect of the ordinary shares after Admission.
As part of the Placing, the Company has agreed that it will not
for a period of 90 days after Admission (save pursuant to the
Additional Fundraising as defined in this Announcement), offer,
issue, sell, contract to sell, issue options in respect of or
otherwise dispose of any securities of the Company (or any interest
therein or in respect thereof) or any other securities exchangeable
for, or convertible into, or substantially similar to, Ordinary
Shares or enter into any transaction having substantially the same
effect or agree to do any of the foregoing other than with the
prior written consent of the Stifel and Liberum (such consent not
to be unreasonably withheld or delayed) or in relation to certain
existing share schemes.
No Prospectus
No prospectus or other offering document has been or will be
submitted to be approved by the FCA in relation to the Placing or
the Placing Shares, and Placees' commitments will be made solely on
the basis of the information contained in this Announcement
(including this Appendix I) and any information publicly announced
through a Regulatory Information Service (as defined in the AIM
Rules for Companies (the "AIM Rules")) by or on behalf of the
Company on or prior to the date of this Announcement (the "Publicly
Available Information") and subject to any further terms set forth
in the contract note to be sent to individual Placees.
Each Placee, by participating in the Placing, agrees that the
content of this Announcement is exclusively the responsibility of
the Company and confirms that it has neither received nor relied on
any information (other than the Publicly Available Information),
representation, warranty or statement made by or on behalf of any
Bank or the Company or any other person and none of the Banks, the
Company nor any other person acting on such person's behalf nor any
of their affiliates has or shall have any liability for any
Placee's decision to participate in the Placing based on any other
information, representation, warranty or statement. Each Placee
acknowledges and agrees that it has relied on its own investigation
of the business, financial or other position of the Company in
accepting a participation in the Placing. Each Placee should
consult its own solicitor, tax adviser and financial adviser for
independent legal, tax and financial advice regarding an investment
in the Placing Shares. Nothing in this paragraph shall exclude the
liability of any person for fraudulent misrepresentation.
Participation in, and principal terms of, the Placing
1. Stifel is acting exclusively as nominated adviser, broker and
bookrunner to the Company (for the purposes of the AIM Rules for
Companies) and no one else in connection with Admission, the
Placing and the matters set out in this document.
2. Liberum is acting exclusively as placing agent for the
Company and no other person in connection with the Placing.
3. Participation in the Placing will only be available to
persons who may lawfully be, and are, invited by the Banks to
participate. The Banks and any of their Affiliates are entitled to
participate in the Placing as principal.
4. The Banks are arranging the Placing severally (and not
jointly nor jointly and severally) as agents of the Company.
Participation in the Placing will only be available to persons who
are Relevant Persons and who may lawfully be, and are, invited to
participate by either of the Banks. Each Bank and their respective
affiliates are entitled to enter bids as principal in the
Placing.
5. The price per Placing Share is fixed at 45 pence (the
"Placing Price") and is payable by the Placees to the relevant Bank
(or as it may direct).
6. No fee or commission will be paid to Placees or by Placees in
respect of any Placing Shares.
7. Each Placee's allocation is determined by the Banks in their
discretion following consultation with the Company and has been or
will be confirmed orally by the relevant Bank and a contract note
will be dispatched as soon as possible thereafter. That oral
confirmation will give rise to an irrevocable, legally binding
commitment by that person (who at that point becomes a Placee), in
favour of the Banks and the Company, under which it agrees to
subscribe for the number of Placing Shares allocated to the Placee
at the Placing Price and otherwise on the terms and subject to the
conditions set out in this Appendix I and in accordance with the
Company's articles of association. Except with the relevant Bank's
consent, such commitment will not be capable of variation or
revocation at the time at which it is submitted.
8. Each Placee's allocation and commitment will be evidenced by
a contract note issued to such Placee by the relevant Bank. The
terms of this Appendix I will be deemed incorporated in that
contract note.
9. Each Placee will have an immediate, separate, irrevocable and
binding obligation, owed to the relevant Bank (as agent for the
Company), to pay to it (or as it may direct) in cleared funds an
amount equal to the product of the Placing Price and the number of
Placing Shares such Placee has agreed to acquire and the Company
has agreed to allot and issue to that Placee.
10. Irrespective of the time at which a Placee's allocation(s)
pursuant to the Placing is/are confirmed, settlement for all
allocated Placing Shares to be acquired pursuant to the Placing
will be required to be made at the same time, on the basis
explained below under "Registration and Settlement".
11. All obligations of the Banks under the Placing will be
subject to fulfilment of the conditions referred to below under
"Conditions of the Placing" and to the Placing not being terminated
on the basis referred to below under "Right to terminate under the
Placing Agreement".
12. By participating in the Placing, each Placee will agree that
its rights and obligations in respect of the Placing will terminate
only in the circumstances described below and will not be capable
of rescission or termination by the Placee.
13. To the fullest extent permissible by law and applicable FCA
rules, save in the event of fraud on their respective parts, none
of (a) Stifel , (b) any of Stifel's affiliates, agents, directors,
officers, consultants, (c) to the extent not contained within (a)
or (b), any person connected with Stifel as defined in the FSMA
((b) and (c) being together "affiliates" and individually an
"affiliate" of Stifel), (d) any person acting on Stifel's behalf,
(e) Liberum, (f) any of Liberum's affiliates, agents, directors,
officers, consultants, (g) to the extent not contained within (e)
or (f), any person connected with Liberum as defined in FSMA ((f)
and (g) being together "affiliates" and individually an "affiliate"
of Liberum) or (h) any person acting on Liberum's behalf shall have
any liability (including to the extent permissible by law, any
fiduciary duties) to Placees or to any other person whether acting
on behalf of a Placee or otherwise. In particular, neither the
Banks nor any of their respective affiliates shall have any
liability (including, to the extent permissible by law, any
fiduciary duties) in respect of their conduct of the Placing or of
such alternative method of effecting the Placing as the Banks and
the Company may agree.
Registration and Settlement
The Banks will confirm the final allocations of Placing Shares
to be issued to Placees (each a "Final Placing Participation")
pursuant to the Placing orally or in writing to Placees and will
issue a contract note or trade confirmation in respect of such
Final Placing Participations. The contract note or trade
confirmation will include the payment and settlement procedures to
be followed by Placees in connection with their subscriptions for
the Placing Shares comprised in their Final Placing
Participations.
Settlement of transactions in the Placing Shares following
Admission will take place within CREST, subject to certain
exceptions. The Banks and the Company reserve the right to require
settlement for, and delivery of, the Placing Shares (or any part
thereof) to Placees by such other means that they deem necessary if
delivery or settlement is not possible or practicable within CREST
by the expected time for settlement and delivery set out in the
contract note or trade confirmation or would not be consistent with
the regulatory requirements in the Placee's jurisdiction.
Each Placee agrees that it will do all things reasonably
necessary to ensure that delivery and payment is completed in
accordance with the instructions set out in the contract note or
trade confirmation, and in accordance with the standing CREST
instructions in respect of the Placing Shares that it has in place
with the relevant Bank.
If allocated Placing Shares are to be delivered to a custodian
or settlement agent, Placees must ensure that, upon receipt, the
conditional contract note is copied and delivered immediately to
the relevant person within that organisation. Insofar as the
allocated Placing Shares are registered in a Placee's name or that
of its nominee or in the name of any person for whom a Placee is
contracting as agent or that of a nominee for such person, such
Placing Shares should, subject as provided below, be so registered
free from any liability to United Kingdom stamp duty or stamp duty
reserve tax. Placees will not be entitled to receive any fee or
commission in connection with the Placing.
Conditions of the Placing
The Placing is conditional upon, amongst other things:
(a) the satisfaction of each condition necessary to enable the
Placing Shares to be admitted as a participating security in CREST
(other than Admission) on or before Admission;
(b) the Company performing all its obligations under the Placing
Agreement so far as the same falls to be performed prior to
Admission;
(c) the delivery to the Banks of a certificate in the form set
out in the Placing Agreement duly signed by a director on behalf of
the Company not later than 5.00 p.m. on the dealing day immediately
prior to the date of Admission;
(d) Admission becoming effective by not later than 8.00 a.m. on
13 June 2017 (or such later time and/or date as the Banks and the
Company may agree, not being later than 8.00 a.m. on 30 June
2017);
(e) the Placing Agreement becoming unconditional in all
respects; and
(f) the Resolutions being passed at the general meeting to be held on 12 June 2017.
If any of the conditions set out in the Placing Agreement are
not fulfilled or, where permitted, waived in accordance with the
Placing Agreement within the stated time periods (or such later
time and/or date as the Company and the Banks may agree), or the
Placing Agreement is terminated in accordance with its terms, the
Placing will lapse and the Placee's rights and obligations shall
cease and terminate at such time and each Placee agrees that no
claim can be made by or on behalf of the Placee (or any person on
whose behalf the Placee is acting) in respect thereof.
By participating in the Placing, each Placee agrees that its
rights and obligations cease and terminate only in the
circumstances described above and under "Right to terminate under
the Placing Agreement" below, and will not otherwise be capable of
rescission or termination by it.
The Banks may, in their absolute discretion and upon such terms
as it thinks fit, waive fulfilment of all or any of the conditions
in the Placing Agreement in whole or in part, or extend the time
provided for fulfilment of one or more conditions, save that
certain conditions including the condition relating to Admission
referred to in paragraph (a) above may not be waived. Any such
extension or waiver will not affect Placees' commitments as set out
in this Announcement.
The Banks may terminate the Placing Agreement in certain
circumstances, details of which are set out below.
Neither the Banks nor any of their respective affiliates,
agents, directors, officers or employees nor the Company shall have
any responsibility or liability, save in the event of fraud on
their respective parts, to any Placee (or to any other person
whether acting on behalf of a Placee or otherwise) in respect of
any decision they may make as to whether or not to waive or to
extend the time and/or date for the satisfaction of any condition
to the Placing nor for any decision they may make as to the
satisfaction of any condition or in respect of the Placing
generally and by participating in the Placing each Placee agrees
that any such decision is within the absolute discretion of the
Banks.
Right to terminate under the Placing Agreement
Either Bank may terminate the Placing Agreement at any time on
or before Admission if, inter alia:
1. in the sole judgement of either Bank there has been a breach
of or there has taken place or arisen any event rendering untrue or
incorrect in any material respect any of the warranties given to
it;
2. in the sole judgment of either Bank a general moratorium on
commercial banking activities in London or New York has been
declared by the United States, the United Kingdom, the New York
authorities or the European Central Bank or a suspension or
material limitation in trading in securities, generally on the
London Stock Exchange, the New York Stock Exchange or NASDAQ has
occurred, or is likely to occur;
3. in the sole judgment of either Bank the trading in any
securities of the Company or trading generally on any stock
exchange or in any over-the-counter market is disrupted, or minimum
or maximum prices for trading have been fixed, or maximum ranges
for prices have been required, by any governmental authority, or a
material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States,
Asia or in Europe;
4. in the sole judgement of either Bank there has occurred any
material adverse change in, or any development reasonably likely to
involve a prospective adverse change in, or affecting, the
condition (financial, operational, legal or otherwise), earnings,
business, management, properties, assets, rights, results of
operations or prospects of the Company which is material in the
context of the Company as a whole, whether or not arising in the
ordinary course of business ("Material Adverse Change") since the
date of the Placing Agreement or there is a fact, circumstance or
development reasonably likely to include a Material Adverse
Change;
5. it shall come to the notice of the either Bank that any
statement contained in this Announcement or any other document or
announcement issued or published by or on behalf of the Company in
connection with the Placing is or has become untrue, inaccurate,
incomplete or misleading in any material respect;
6. in the sole judgement of the Banks, any matter or
circumstance arises which is likely to give rise to an indemnity
claim against the Company under the Placing Agreement;
7. the Company fails to comply with any of its obligations under the Placing Agreement;
8. the subscription proceeds in respect of the Subscription
Shares have not been received by the Company prior to
Admission;
9. the Application is refused by the London Stock Exchange; or
10. there has been a force majeure event which in the sole
judgement of either Bank is likely to prejudice the success of the
Placing, dealings in Ordinary Shares or make it impractical to
proceed with the Placing. Force majeure events include (but are not
limited to) any outbreak of hostilities or escalation thereof or
act or incidence of terrorism or other calamity or crisis, national
or international emergency at war, or any change (or development
involving a prospective change) in national or international
monetary, political, financial market or economic conditions or
currency exchange rates or foreign exchange controls.
If the Placing Agreement is terminated in accordance with its
terms, the rights and obligations of each Placee in respect of the
Placing as described in this Announcement shall cease and terminate
at such time and no claim can be made by any Placee in respect
thereof.
By participating in the Placing, each Placee agrees with the
Company and the Banks that the exercise by the Company or the Banks
of any right of termination or any other right or other discretion
under the Placing Agreement shall be within the absolute discretion
of the Company or the Banks and that neither the Company nor the
Banks need make any reference to such Placee and that none of the
Banks, the Company, or any of their respective affiliates, agents,
directors, officers or employees shall have any liability to such
Placee (or to any other person whether acting on behalf of a Placee
or otherwise) whatsoever in connection with any such exercise, save
in the event of fraud on their respective parts,.
By participating in the Placing, each Placee agrees that its
rights and obligations terminate only in the circumstances
described above and under the "Conditions of the Placing" section
above and will not be capable of rescission or termination by it
after the issue by the relevant Bank of a contract note confirming
each Placee's allocation and commitment in the Placing.
Representations, Warranties and Further Terms
By participating in the Placing, each Placee (and any person
acting on such Placee's behalf), provided that a Placee may be
acting as agent for and on behalf of discretionary managed clients
and in that case will be agreeing as agent and not as principal,
for its own part only, represents, warrants, acknowledges and
agrees (for itself and for any such prospective Placee) that (save
where the Banks expressly agree in writing to the contrary):
1. it has read and understood this Announcement, including the
Appendices, in its entirety and that its acquisition of the Placing
Shares is subject to and based upon all the terms, conditions,
representations, warranties, indemnities, acknowledgements,
agreements and undertakings and other information contained herein
and that it has not relied on, and will not rely on, any
information given or any representations, warranties or statements
made at any time by any person in connection with Admission, the
Placing, the Company, the Placing Shares or otherwise, other than
the information contained in this Announcement and the Publicly
Available Information;
2. it has not received a prospectus or other offering document
in connection with the Placing and acknowledges that no prospectus
or other offering document: (a) is required under the Prospectus
Directive; and (b) has been or will be prepared in connection with
the Placing;
3. insofar as, the existing Ordinary Shares are admitted to
trading on AIM, and that the Company is therefore required to
publish certain business and financial information in accordance
with the AIM Rules, which includes a description of the nature of
the Company's business and the Company's most recent balance sheet
and profit and loss account and that it is able to obtain or access
such information without undue difficulty, and is able to obtain
access to such information or comparable information concerning any
other publicly traded company, without undue difficulty;
4. it has made its own assessment of the Placing Shares and has
relied on its own investigation of the business, financial or other
position of the Company in accepting a participation in the Placing
and none of the Banks, the Company or any of their respective
affiliates, agents, directors, officers or employees or any person
acting on behalf of any of them has provided, and will not provide,
it with any material regarding the Placing Shares or the Company or
any other person other than the information in this Announcement,
or the Publicly Available Information; nor has it requested either
of the Banks, the Company, any of their respective affiliates,
agents, directors, officers or employees or any person acting on
behalf of any of them to provide it with any such information;
5. neither the Banks, nor any person acting on behalf of them
nor any of their respective affiliates, agents, directors, officers
or employees has or shall have any liability for any Publicly
Available Information, or any representation relating to the
Company, provided that nothing in this paragraph excludes the
liability of any person for fraudulent misrepresentation made by
that person;
6. the only information on which it is entitled to rely and on
which it has relied in committing to subscribe for the Placing
Shares is contained in this Announcement and the Publicly Available
Information, such information being all that it deems necessary to
make an investment decision in respect of the Placing Shares and it
has made its own assessment of the Company, the Placing Shares and
the terms of the Placing based on Publicly Available Information;
(b) none of the Banks, the Company or any of their respective
affiliates, agents, directors, officers or employees has made any
representation or warranty to it, express or implied, with respect
to the Company, the Placing or the Placing Shares or the accuracy,
completeness or adequacy of the Publicly Available Information; (c)
it has conducted its own investigation of the Company, the Placing
and the Placing Shares, satisfied itself that the information is
still current and relied on that investigation for the purposes of
its decision to participate in the Placing; and (d) has not relied
on any investigation that the Banks or any person acting on their
behalf may have conducted with respect to the Company, the Placing
or the Placing Shares;
7. the content of this Announcement and the Publicly Available
Information has been prepared by and is exclusively the
responsibility of the Company and that neither the Banks nor any
persons acting on behalf of either of them is responsible for or
has or shall have any liability for any information,
representation, warranty or statement relating to the Company
contained in this Announcement or the Publicly Available
Information nor will they be liable for any Placee's decision to
participate in the Placing based on any information,
representation, warranty or statement contained in this
Announcement, the Publicly Available Information or otherwise.
Nothing in this Appendix I shall exclude any liability of any
person for fraudulent misrepresentation;
8. the Placee acknowledges that as the Placing Shares have not
been registered or otherwise qualified, and will not be registered
or otherwise qualified, for offer and sale nor will a prospectus be
cleared or approved in respect of any of the Placing Shares under
the securities laws of the United States, or any state or other
jurisdiction of the United States, the Republic of Ireland,
Australia, Canada, Republic of South Africa or Japan, subject to
certain exceptions, they may not be offered, sold, taken up,
renounced or delivered or transferred, directly or indirectly,
within the United States, the Republic of Ireland, Australia,
Canada, South Africa or Japan or in any country or jurisdiction
where any such action for that purpose is required;
9. it and/or each person on whose behalf it is participating:
(A) is entitled to acquire the Placing Shares pursuant to the
Placing under the laws and regulations of all relevant
jurisdictions;
(B) has fully observed such laws and regulations;
(C) has capacity and authority and is entitled to enter into and
perform its obligations as an acquirer of Placing Shares (or as
agent where applicable) and will honour such obligations; and
(D) has obtained all necessary consents and authorities
(including, without limitation, in the case of a person acting on
behalf of a Placee, all necessary consents and authorities to agree
to the terms set out or referred to in this Appendix I) under those
laws or otherwise and complied with all necessary formalities to
enable it to enter into the transactions contemplated hereby and to
perform its obligations in relation thereto and, in particular, if
it is a pension fund or investment company it is aware of and
acknowledges it is required to comply with all applicable laws and
regulations with respect to its subscription for Placing
Shares;
10. it is not, and any person who it is acting on behalf of is
not, and at the time the Placing Shares are subscribed will not be,
a resident of, or with an address in, or subject to the laws of,
Australia, Canada, Japan, the Republic of Ireland or the Republic
of South Africa, and it acknowledges and agrees that the Placing
Shares have not been and will not be registered or otherwise
qualified under the securities legislation of Australia, Canada,
Japan, the Republic of Ireland or the Republic of South Africa and
may not be offered, sold, or acquired, directly or indirectly,
within those jurisdictions;
11. the Placing Shares acquired by it, to the best of its
knowledge, have not been, and will not be, registered under the
Securities Act and may not be offered, sold or resold in or into or
from the United States except pursuant to an effective registration
under the Securities Act, or pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and in accordance with applicable state securities
laws; and no representation is being made as to the availability of
any exemption under the Securities Act for the reoffer, resale,
pledge or transfer of the Placing Shares;
12. it and the beneficial owner of the Placing Shares is, and at
the time the Placing Shares are acquired will be, outside the
United States and acquiring the Placing Shares in an "offshore
transaction" not involving any directed selling efforts, in each
case as defined in, and in accordance with, Regulation S under the
Securities Act;
13. it (and any account for which it is purchasing) is not
acquiring the Placing Shares with a view to any offer, sale or
distribution thereof within the meaning of the Securities Act;
14. it will not distribute, forward, transfer or otherwise
transmit this Announcement or any part of it, or any other
presentational or other materials concerning the Placing in or into
or from the United States (including electronic copies thereof) to
any person, and it has not distributed, forwarded, transferred or
otherwise transmitted any such materials to any person;
15. none of the Banks, their respective affiliates, agents,
directors, officers or employees and any person acting on behalf of
any of them is making any recommendations to it, advising it
regarding the suitability of any transactions it may enter into in
connection with the Placing and that participation in the Placing
is on the basis that it is not and will not be a client of either
of the Banks and neither of the Banks has any duties or
responsibilities to it for providing the protections afforded to
its clients or for providing advice in relation to the Placing nor
in respect of any representations, warranties, undertakings or
indemnities contained in the Placing Agreement nor for the exercise
or performance of any of its rights and obligations thereunder
including any rights to waive or vary any conditions or exercise
any termination right;
16. it has the funds available to pay for the Placing Shares for
which it has agreed to subscribe and acknowledges and agrees that
it will make payment to the relevant Bank for the Placing Shares
allocated to it in accordance with the terms and conditions of this
Announcement on the due times and dates set out in this
Announcement, failing which the relevant Placing Shares may be
placed with others on such terms as the Banks may, in their
absolute discretion determine without liability to the Placee;
17. the Placee acknowledges that no action has been or will be
taken by any of the Company, the Banks or any person acting on
their behalf that would, or is intended to, permit a public offer
of the Placing Shares in the United States or in any country or
jurisdiction where any such action for that purpose is
required;
18. the person who it specifies for registration as holder of
the Placing Shares will be: (a) the Placee; or (b) a nominee of the
Placee, as the case may be. Neither the Banks nor the Company will
be responsible for any liability to stamp duty or stamp duty
reserve tax resulting from a failure to observe this requirement.
Each Placee and any person acting on behalf of such Placee agrees
to acquire the Placing Shares pursuant to the Placing and agrees to
pay the Company and the Banks in respect of the same (including any
HMRC interest or penalties) on the basis that the Placing Shares
will be allotted to a CREST stock account of either of the Banks or
transferred to a CREST stock account of either of the Banks who
will hold them as nominee on behalf of the Placee until settlement
in accordance with its standing settlement instructions with
it;
19. it is acting as principal only in respect of the Placing or,
if it is acting for any other person, (a) it is duly authorised to
do so and has full power to make the acknowledgments,
representations and agreements herein on behalf of each such person
and (b) it is and will remain liable to the Company and the Banks
for the performance of all its obligations as a Placee (and as an
agent if applicable) in respect of the Placing (regardless of the
fact that it is acting for another person);
20. the allocation, allotment, issue and delivery to it, or the
person specified by it for registration as holder, of Placing
Shares will not give rise to a stamp duty or stamp duty reserve tax
liability under (or at a rate determined under) any of sections 67,
70, 93 or 96 of the Finance Act 1986 (depository receipts and
clearance services) and that it is not participating in the Placing
as nominee or agent for any person or persons to whom the
allocation, allotment, issue or delivery of Placing Shares would
give rise to such a liability;
21. it and any person acting on its behalf (if within the United
Kingdom) falls within Article 19(5) and/or 48(2) and/or 49(2) of
the Order and undertakes that it will acquire, hold, manage and (if
applicable) dispose of any Placing Shares that are allocated to it
for the purposes of its business only;
22. it will not make an offer to the public of the Placing
Shares and it has not offered or sold and will not offer or sell
any Placing Shares to persons in the United Kingdom or elsewhere in
the EEA prior to the expiry of a period of six months from
Admission except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their business or otherwise
in circumstances which have not resulted and which will not result
in an offer to the public in the United Kingdom within the meaning
of section 85(1) of the FSMA or an offer to the public in any other
member state of the EEA within the meaning of the Prospectus
Directive;
23. it is a person of a kind described in: (a) Article 19(5)
(Investment Professionals) and/or 48(2) (Certified high net worth
individuals) and/or 49(2) (High net worth companies etc.) of the
Order, as amended, and/or an authorised person as defined in
section 31 of FSMA; and (b) section 86(7) of FSMA (Qualified
Investor), being a person falling within Article 2.1(e) the
Prospectus Directive. For such purposes, it undertakes that it will
acquire, hold, manage and (if applicable) dispose of any Placing
Shares that are allocated to it for the purposes of its business
only;
24. it has only communicated or caused to be communicated and it
will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
section 21 of the FSMA) relating to Placing Shares in circumstances
in which section 21(1) of the FSMA does not require approval of the
communication by an authorised person and it acknowledges and
agrees that neither of the Banks has approved this Announcement in
their capacity as authorised persons under section 21 of FSMA and
it may not therefore be subject to the controls which would apply
if it was made or approved as financial promotion by an authorised
person;
25. it has complied and it will comply with all applicable laws
with respect to anything done by it or on its behalf in relation to
the Placing Shares (including all relevant provisions of the FSMA
in respect of anything done in, from or otherwise involving the
United Kingdom);
26. if it is a financial intermediary, as that term is used in
Article 3(2) of the Prospectus Directive (including any relevant
implementing measure in any member state), the Placing Shares
acquired by it in the Placing will not be acquired on a
non-discretionary basis on behalf of, nor will they be acquired
with a view to their offer or resale to, persons in a member state
of the EEA which has implemented the Prospectus Directive other
than Qualified Investors, or in circumstances in which the express
prior written consent of the Banks has been given to the offer or
resale;
27. it has neither received nor relied on any confidential price
sensitive information about the Company in accepting this
invitation to participate in the Placing;
28. save in the case of fraud on their respective parts, none of
the Banks, any of their respective affiliates, agents, directors,
officers or employees or any person acting on behalf of any of them
has or shall have any liability for any information, representation
or statement contained in this Announcement or for any information
previously published by or on behalf of the Company or any other
written or oral information made available to or publicly available
or filed information or any representation, warranty or undertaking
relating to the Company, and will not be liable for its decision to
participate in the Placing based on any information,
representation, warranty or statement contained in this
Announcement or elsewhere, provided that nothing in this paragraph
shall exclude any liability of any person for fraud;
29. none of the Banks, the Company, any of their respective
affiliates, agents, directors, officers or employees or any person
acting on behalf of the Banks, the Company or their respective
affiliates, agents, directors, officers or employees is making any
recommendations to it, advising it regarding the suitability of any
transactions it may enter into in connection with the Placing nor
providing advice in relation to the Placing nor in respect of any
representations, warranties, acknowledgements, agreements,
undertakings, or indemnities contained in the Placing Agreement nor
the exercise or performance of each of the Banks' rights and
obligations thereunder including any rights to waive or vary any
conditions or exercise any termination right;
30. it acknowledges and accepts that the Banks may, in
accordance with applicable legal and regulatory provisions, engage
in transactions in relation to the Placing Shares and/or related
instruments for their own account for the purpose of hedging their
underwriting exposure or otherwise and, except as required by
applicable law or regulation, neither of the Banks will make any
public disclosure in relation to such transactions;
31. the Banks and each of their respective affiliates, each
acting as an investor for its or their own account(s), may bid or
subscribe for and/or purchase Placing Shares and, in that capacity,
may retain, purchase, offer to sell or otherwise deal for its or
their own account(s) in the Placing Shares, any other securities of
the Company or other related investments in connection with the
Placing or otherwise. Accordingly, references in this Announcement
to the Placing Shares being offered, subscribed, acquired or
otherwise dealt with should be read as including any offer to, or
subscription, acquisition or dealing by the Banks and/or any of
their respective affiliates, acting as an investor for its or their
own account(s). Neither the Banks nor the Company intend to
disclose the extent of any such investment or transaction otherwise
than in accordance with any legal or regulatory obligation to do
so;
32. it has not offered or sold and will not offer or sell any
Placing Shares to persons in the EEA prior to the expiry of a
period of six months from Admission except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purpose of
their business or otherwise in circumstances which have not
resulted and which will not result in an offer to the public in any
member state of the EEA within the meaning of the Prospectus
Directive;
33. it has complied with its obligations in connection with
money laundering and terrorist financing under the Proceeds of
Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and
the Money Laundering Regulations 2007 (together, the "Regulations")
and, if making payment on behalf of a third party, that
satisfactory evidence has been obtained and recorded by it to
verify the identity of the third party as required by the
Regulations;
34. it is aware of the obligations regarding insider dealing
Market Abuse Regulation EU No 596/2014 (MAR) and section 56 of the
Criminal Justice Act 1993 and confirms that it has and will
continue to comply with those obligations;
35. in order to ensure compliance with the Money Laundering
Regulations 2007, the Banks (each for itself and as agent on behalf
of the Company) or the Company's registrars may, in their absolute
discretion, require verification of its identity. Pending the
provision to the Banks or the Company's registrars, as applicable,
of evidence of identity, definitive certificates in respect of the
Placing Shares may be retained at the relevant Bank's absolute
discretion or, where appropriate, delivery of the Placing Shares to
it in uncertificated form may be delayed at the Banks or the
Company's registrars', as the case may be, absolute discretion. If
within a reasonable time after a request for verification of
identity the Banks (each for itself and as agent on behalf of the
Company) or the Company's registrars have not received evidence
reasonably satisfactory to them, the Banks and/or the Company may
terminate its commitment in respect of the Placing, in which event
the monies payable on acceptance of allotment will, if already
paid, be returned without interest to the account of the drawee's
bank from which they were originally debited;
36. it acknowledges that its commitment to acquire Placing
Shares on the terms set out in this Announcement (including this
Appendix I) will continue notwithstanding any reasonable amendment
that may in future be made to the terms and conditions of the
Placing and that Placees will have no right to be consulted or
require that their consent be obtained with respect to the
Company's or the Banks conduct of the Placing;
37. it has knowledge and experience in financial, business and
international investment matters as is required to evaluate the
merits and risks of subscribing for the Placing Shares. It further
acknowledges that it is experienced in investing in securities of
this nature and is aware that it may be required to bear, and is
able to bear, the economic risk of, and is able to sustain, a
complete loss in connection with the Placing. It has relied upon
its own examination and due diligence of the Company and its
affiliates taken as a whole, and the terms of the Placing,
including the merits and risks involved;
38. the Company, the Banks and others (including each of their
respective affiliates, agents, directors, officers or employees)
will rely upon the truth and accuracy of the foregoing
representations, warranties, acknowledgements and agreements, which
are given to the Banks, each on their own behalf and on behalf of
the Company and are irrevocable;
39. if it is acquiring the Placing Shares as a fiduciary or
agent for one or more investor accounts, it has full power and
authority to make, and does make, the foregoing representations,
warranties, acknowledgements, agreements and undertakings on behalf
of each such accounts;
40. time is of the essence as regards its obligations under this Appendix I;
41. any document that is to be sent to it in connection with the
Placing will be sent at its risk and may be sent to it at any
address provided by it to the Banks;
42. the Placing Shares will be issued subject to the terms and
conditions of this Appendix I; and
43. these terms and conditions in this Appendix I and all
documents into which this Appendix I is incorporated by reference
or otherwise validly forms a part and/or any agreements entered
into pursuant to these terms and conditions and all agreements to
acquire shares pursuant to the Placing will be governed by and
construed in accordance with English law and it submits to the
exclusive jurisdiction of the English courts in relation to any
claim, dispute or matter arising out of any such contract, except
that enforcement proceedings in respect of the obligation to make
payment for the Placing Shares (together with any interest
chargeable thereon) may be taken by the Company or the Banks in any
jurisdiction in which the relevant Placee is incorporated or in
which any of its securities have a quotation on a recognised stock
exchange.
The representations, warranties, acknowledgements and
undertakings contained in this Appendix are given to each of the
Company and the Banks (for their own benefit, and where relevant,
the benefit of their respective affiliates) and are irrevocable.
The Company and the Banks will rely upon the truth and accuracy of
the foregoing acknowledgements, undertakings, representations and
warranties.
Miscellaneous
The agreement to allot and issue Placing Shares to Placees
(and/or to persons for whom such Placee is contracting as agent)
free of stamp duty and stamp duty reserve tax relates only to their
allotment and issue to Placees, or such persons as they nominate as
their agents, direct from the Company for the Placing Shares in
question. Such agreement also assumes that the Placing Shares are
not being acquired in connection with arrangements to issue
depositary receipts or to issue or transfer the Placing Shares into
a clearance service. If there are any such arrangements, or the
settlement relates to any other dealing in the Placing Shares,
stamp duty or stamp duty reserve tax or other similar taxes may be
payable, for which neither the Company nor any of the Banks will be
responsible and the Placees shall indemnify the Company and the
Banks on an after-tax basis for any stamp duty or stamp duty
reserve tax paid by them in respect of any such arrangements or
dealings. If this is the case, each Placee should seek its own
advice and notify the Banks accordingly.
The Company and the Banks are not liable to bear any transfer
taxes that arise on a sale of Placing Shares subsequent to their
acquisition by Placees or for transfer taxes arising otherwise than
under the laws of the United Kingdom. Each Placee should,
therefore, take its own advice as to whether any such transfer tax
liability arises and notify the Banks accordingly.
In addition, Placees should note that they will be liable for
any stamp duty and all other stamp, issue, securities, transfer,
registration, documentary or other duties or taxes (including any
interest, fines or penalties relating thereto) payable outside the
United Kingdom by them or any other person on the acquisition by
them of any Placing Shares or the agreement by them to acquire any
Placing Shares.
Other than as stated in the terms and conditions, each Placee
and any person acting on behalf of the Placee acknowledges that the
Banks do not owe any fiduciary or other duties to any Placee in
respect of any representations, warranties, undertakings,
acknowledgements, agreements or indemnities in the Placing
Agreement.
Other than as stated in these terms and conditions, each Placee
and any person acting on behalf of the Placee acknowledges and
agrees that the Banks may (at their absolute discretion) satisfy
their obligations to procure Placees by itself agreeing to become a
Placee in respect of some or all of the Placing Shares or by
nominating any connected or associated person to do so.
Unless the context otherwise requires, all references to time
are to London time. All times and dates in this Announcement are
subject to amendment by the Banks (in their absolute discretion).
The Banks shall notify the Placees and any person acting on behalf
of the Placees of any changes.
No statement in this Announcement is intended to be a profit
forecast, and no statement in this Announcement should be
interpreted to mean that earnings per share of the Company for the
current or future financial years would necessarily match or exceed
the historical published earnings per share of the Company.
The price of shares and any income expected from them may go
down as well as up and investors may not get back the full amount
invested upon disposal of the shares. Past performance is no guide
to future performance, and persons needing advice should consult an
independent financial adviser.
The Placing Shares to be issued or sold pursuant to the Placing
will not be admitted to trading on any stock exchange other than
AIM, a market on the the London Stock Exchange.
The contents of the websites of the Company (including any
materials which are hyper-linked to such websites) do not form part
of this Announcement and prospective investors should not rely on
them.
The rights and remedies of the Banks and the Company under these
terms and conditions are in addition to any rights and remedies
which would otherwise be available to each of them and the exercise
or partial exercise of one will not prevent the exercise of
others.
Where a Placee is acting as agent for and on behalf of its
discretionary managed clients, then its participation and its
acceptance of these terms and conditions are as agent and not as
principal.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCAAMMTMBITBAR
(END) Dow Jones Newswires
May 25, 2017 06:51 ET (10:51 GMT)
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