TIDMNSCI
RNS Number : 3372J
NetScientific PLC
29 March 2018
THIS ANNOUNCEMENT (INCLUDING THE APPIX) AND THE INFORMATION
CONTAINED HEREIN IS RESTRICTED AND NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM THE UNITED
STATES, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR
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OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION
PLEASE SEE THE IMPORTANT NOTICES WITHIN THIS ANNOUNCEMENT
THE CONTENT OF THIS PROMOTION HAS NOT BEEN APPROVED BY AN
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INVESTED
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
29 March 2018
NetScientific plc
Proposed Placing and Subscription to raise GBP5.0 million
(before expenses) and proposed Additional Fundraising to raise up
to approximately GBP1.0 million (before expenses)
Proposed waiver of Rule 9 of the Takeover Code
and
Notice of General Meeting
NetScientific plc (AIM:NSCI) (the "Company"), the transatlantic
healthcare IP commercialisation group, announces a conditional
Placing and Subscription to raise GBP5.0 million (before expenses)
and an Additional Fundraising targeted to raise up to approximately
GBP1.0 million (before expenses).
The Directors propose to use the majority of the net proceeds of
the Placing, Subscription and any Additional Fundraising (together,
the "Proposals"):
-- principally to continue the acceleration of the development
of its actively managed Portfolio Companies to seek to meet the
funding requirements needed to take the Portfolio Companies further
towards commercialisation, progress towards the completion of
external series A fundraisings and, ultimately, potential exit
opportunities;
-- to explore potential transformational acquisition
opportunities for the Company with a view to gaining critical mass
in the IP commercialisation sector, gaining access to new
shareholders and adding additional investments to its current
portfolio; and
-- for general corporate purposes.
If the Proposals do not proceed and additional financing does
not become available to the Company, the Board is of the opinion
that the Group will only have sufficient finances to fund its
business, based on the Board's current plans, until the end of June
2018.
The Proposals are conditional (amongst other things) upon the
passing of Resolutions by the Shareholders or Independent
Shareholders (as applicable) at the General Meeting.
A circular setting out (amongst other things) further details on
the Proposals and the Resolutions (including the Whitewash
Resolution) to be proposed at the General Meeting (the "Circular")
is expected to be posted to shareholders today and in any event no
later than 3 April 2018. Admission is expected to occur no later
than 8.00 a.m. on Tuesday 17 April 2018 (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 Thursday 31 May 2018).
Notice of the General Meeting of the Company, to be held at the
offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London
EC2A 2AG at 10.00 a.m. on Monday 16 April 2018, is set out at the
end of the Circular
The Company has today separately released its preliminary
results for the year ended 31 December 2017. For this period the
Company is reporting audited revenues of GBP0.4 million and an
after tax loss of (GBP9.4) million. Cash on the balance sheet as at
31 December 2017 was GBP6.9 million.
Details of the Proposals
-- Placing and Subscription - Proposing to issue an aggregate of
9,523,809 New Ordinary Shares to raise GBP5.0 million (before
expenses) by way of: (i) a Placing by Stifel and Liberum with
existing and new institutional investors at the Issue Price and a
(ii) a Subscription by certain other investors at the Issue
Price.
-- Additional Fundraising - The Company is targeting a maximum
further raise of up to GBP1.0 million (before expenses) by way of
an Additional Fundraising of up to 1,904,761 New Ordinary Shares at
the Issue Price. The Additional Fundraising will be by way of a
private placing or subscription at the discretion of the Directors,
and is not open to the public.
-- Issue Price - The Issue Price per New Ordinary Share
represents the closing middle market share price of 52.5 pence of
the Company's Ordinary Shares on 28 March 2018, being the Last
Practicable Date.
-- Notice of General Meeting - The Company does not have
sufficient authority in place to allot all of the New Ordinary
Shares to be issued in accordance with the Proposals on a
non-pre-emptive basis. Accordingly Shareholder approval is required
which will be sought at the General Meeting.
-- Rule 9 Waiver - Woodford has agreed to subscribe for
5,714,285 Placing Shares, which would result in Woodford owning
more than its current holding of 45.01 per cent. of the total
voting rights of the Company immediately following completion of
the Proposals, which, without a Whitewash, would oblige Woodford to
make a general offer to the Shareholders of the Company under Rule
9 of the Takeover Code. The Panel has agreed to such a waiver,
subject to the Whitewash Resolution being approved at the General
Meeting by the requisite majority of Independent Shareholders. Such
approval will be sought at the General Meeting.
-- Recommendation - The Directors unanimously recommend
Shareholders to vote in favour of the Resolutions at the General
Meeting as they intend to do in respect of their own beneficial
holdings in the Company.
-- Underwriting - The Proposals are not being underwritten.
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. In recent months
several of our portfolio companies have reached the
commercialisation stage, and we are hoping to move the remaining
ones in our portfolio towards commercialisation in the next 18-24
months.
"The additional finance we have raised today will allow us to
continue to advance development of investment into our portfolio of
companies to provide support at this critical time. We are
expecting further consolidation in the IP commercialisation sector,
and expect to be a significant player in this process.
"NetScientific's mission is to deliver value to shareholders by
supporting life-changing innovation. I would like to personally
thank our existing investors for their continued support for this
sector, and we look forward to the next stage of our journey."
For more information, please contact:
NetScientific plc Tel: +44 (0)20 3514
François R. Martelet, 1800
M.D., CEO
Ian Postlethwaite, CFO
Legal identification number:
213800N5WD46G1Y7I458
Consilium Strategic Communications Tel: +44 (0)20 3709
Mary-Jane Elliott/Jessica 5700
Hodgson netscientific@consilium-comms.com
Chris Welsh/Laura Thornton
Stifel Nicolaus Europe Limited Tel: +44 (0) 20 7710
(NOMAD and Bookrunner) 7600
Jonathan Senior/David Arch/Ben
Maddison
Liberum Capital Limited (Placing Tel: +44 (0)20 3709
Agent) 5700
David Parsons/Christopher
Britton/Bidhi Bhoma/Euan Brown
Important Notices
This announcement is issued by and is the sole responsibility of
the Company.
This announcement (including the appendix) and the information
contained herein is restricted and not for release, publication or
distribution in whole or in part in, into or from the United
States, Canada, Australia, Japan, the Republic of South Africa or
any other jurisdiction where to do so would constitute a violation
of the relevant laws or regulations of that jurisdiction.
This announcement does not constitute an offer to sell or an
invitation to subscribe for, or solicitation of an offer to
subscribe for or buy, New Ordinary Shares to any person in any
jurisdiction to whom it is unlawful to make such offer or
solicitation. In particular, this announcement must not be taken,
transmitted, distributed or sent, directly or indirectly, in or
into, the United States, Canada, Australia, Japan or the Republic
of South Africa, to any national, resident or citizen of such
countries or to a US person.
The New Ordinary Shares have not been and will not be registered
under the US Securities Act of 1933, as amended, or under the
securities laws of any state or other jurisdiction of the United
States, and may not be offered or sold, directly or indirectly, in
the United States or to, or for the account or benefit of, a US
person absent registration except pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of
the Securities Act and otherwise in accordance with any applicable
securities laws of any state or other jurisdiction of the United
States. There will be no offering of New Ordinary Shares in the
United States.
The Company has not been and will not be registered under the
Investment Company Act and investors will not be entitled to the
benefits of that act. No offer, purchase, sale or transfer of the
Ordinary Shares may be made except in circumstances which will not
result in the Company being required to register as an investment
company under the Investment Company Act.
The New Ordinary Shares will only be available to qualified
investors for the purposes of the Prospectus Rules or otherwise in
circumstances not resulting in an offer of transferable securities
to the public under section 102B of FSMA. The Proposals do not
constitute an offer to the public requiring an approved prospectus
under section 85 of FSMA and accordingly this announcement does not
constitute a prospectus for the purposes of the Prospectus Rules
and has not been pre-approved by the FCA pursuant to sections 85
and 87 of FSMA, the London Stock Exchange, any securities
commission or any other authority or regulatory body. In addition
this announcement does not constitute an admission document drawn
up in accordance with the AIM Rules for Companies.
This announcement does not constitute an issue prospectus within
the meaning of, nor have they been prepared without regard to, the
disclosure standards for issue prospectuses under article 652a or
article 1156 of the Swiss Code of Obligations or the disclosure
standards for listing prospectuses under article 27 ff. of the
listing rules of the SIX Swiss Exchange Ltd or the listing rules of
any other stock exchange or regulated trading facility in
Switzerland.
The New Ordinary Shares will not be listed on the SIX Swiss
Exchange Ltd. or on any other stock exchange or regulated trading
facility in Switzerland. The New Ordinary Shares may only be
distributed to qualified investors in accordance with the Swiss
Federal Act on Collective Investment Schemes and its implementing
ordinances and the applicable guidelines of the Swiss Financial
Market Supervisory Authority ("FINMA") and will not be distributed
to non-qualified investors in or from Switzerland. Neither this
announcement nor any other materials relating to the Company will
be made available to non-qualified investors for distribution in or
from Switzerland.
Neither this announcement, nor any other offering or marketing
material relating to the Placing and the Subscription, nor the
Company nor the New Ordinary Shares have been or will be filed
with, registered or approved by FINMA or any other Swiss regulatory
authority. In particular, the Company has not been authorised, and
will not seek authorisation from FINMA for distribution to
non-qualified investors in or from Switzerland.
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of the Commission Delegated Directive (EU) 2017/593
supplementing MiFID II; and (c) local implementing measures
(together, the "MiFID II Product Governance Requirements"), and
disclaiming all and any liability, whether arising in tort,
contract or otherwise, which any "manufacturer" (for the purposes
of the MiFID II Product Governance Requirements) may otherwise have
with respect thereto, and the Placing Shares have been subject to a
product approval process, which has determined that they each are:
(i) compatible with an end target market of retail investors and
investors who meet the criteria of professional clients and
eligible counterparties, each as defined in MiFID II; and (ii)
eligible for distribution through all distribution channels as are
permitted by MiFID II (the "Target Market Assessment").
Notwithstanding the Target Market Assessment, distributors should
note that: (a) the price of the Placing Shares may decline and
investors could lose all or part of their investment; (b) the
Placing Shares offer no guaranteed income and no capital
protection; and (c) an investment in the Placing Shares is
compatible only with investors who do not need a guaranteed income
or capital protection, who (either alone or in conjunction with an
appropriate financial or other adviser) are capable of evaluating
the merits and risks of such an investment and who have sufficient
resources to be able to bear any losses that may result therefrom.
The Target Market Assessment is without prejudice to the
requirements of any contractual, legal or regulatory selling
restrictions in relation to the Proposals. Furthermore, it is noted
that, notwithstanding the Target Market Assessment, Stifel and
Liberum will only procure investors who meet the criteria of
professional clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness
for the purposes of MiFID II; or (b) a recommendation to any
investor or group of investors to invest in, or purchase, or take
any other action whatsoever with respect to the Placing Shares.
Each distributor is responsible for undertaking its own Target
Market Assessment in respect of the Placing Shares and determining
appropriate distribution channels.
This announcement does not identify or suggest, or purport to
identify or suggest, the risks (direct or indirect) that may be
associated with an investment in the New Ordinary Shares. Any
investment decision to buy New Ordinary Shares in accordance with
the Proposals must be made solely on the basis of publicly
available information, which has not been independently
verified.
This announcement contains (or may contain) certain
forward-looking statements with respect to the Company and certain
of its goals and expectations relating to its future financial
condition and performance which involve a number of risks and
uncertainties. No forward-looking statement is a guarantee of
future performance and actual results could differ materially from
those contained in any forward-looking statements. Such
forward-looking statements may use words such as "aim",
"anticipate", "target", "expect", "estimate", "plan", "goal",
"believe", "will", "may", "should", and other words having a
similar meaning. By their nature, forward-looking statements
involve risk and uncertainty because they relate to future events
and circumstances, including, but not limited to, economic and
business conditions, the effects of changes in interest rates and
foreign exchange rates, changes in legislation, changes in consumer
habits and other factors outside the control of the Company, that
may cause actual results, performance or achievements to be
materially different from any results, performance or achievements
expressed or implied by such forward-looking statements. All
forward-looking statements contained in this announcement are based
upon information available to the Directors at the date of this
announcement and the posting or receipt of the document does not
give rise to any implication that there has been no change in the
facts set out herein since that date.
Any indication in this announcement of the price at which the
Ordinary Shares have been subscribed for, or bought or sold, in the
past cannot be relied upon as a guide to future performance. 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 New Ordinary
Shares and the income from them may go down as well as up and
investors may not get back the full amount invested on disposal of
the New Ordinary Shares.
The Existing Ordinary Shares are currently admitted to trading
on AIM. Application will be made to the London Stock Exchange for
the New Ordinary Shares to be admitted to trading on AIM. It is
expected, subject to matters including the passing of the
Resolutions at the General Meeting, that Admission will become
effective, and dealings for normal settlement in the New Ordinary
Shares will commence, at 8.00 a.m. on Tuesday 17 April 2018. The
New Ordinary Shares will not be admitted to trading on any other
investment exchange. The New Ordinary Shares will, on their
admission, rank pari passu in all respects with the Existing
Ordinary Shares and will rank in full for all dividends and other
distributions thereafter declared, made or paid on the ordinary
share capital of the Company.
AIM is a market designed primarily for emerging or smaller
companies to which a higher investment risk tends to be attached
than to larger or more established companies. AIM securities are
not admitted to the Official List of the United Kingdom Listing
Authority (being the FCA acting as competent authority for the
purposes of Part V of FSMA) ("UKLA"). A prospective investor should
be aware of the risks of investing in such companies and should
make the decision to invest only after careful consideration and,
if appropriate, consultation with an independent financial adviser.
Neither the London Stock Exchange nor the UKLA has examined or
approved the contents of this announcement. The AIM Rules for
Companies are less demanding than those of the Official List of the
UKLA. It is emphasised that no application is being made for
admission of the Existing Ordinary Shares or the New Ordinary
Shares to the Official List of the UKLA.
This announcement does not constitute a recommendation
concerning any investor's options with respect to the Proposals.
Each investor or prospective investor should conduct his, her or
its own investigation, analysis and evaluation of the business and
data described in this Announcement. The price and value of
securities can go down as well as up. Past performance is not a
guide to future performance. The contents of this announcement are
not to be construed as legal, business, financial or tax advice.
Each investor or prospective investor should consult his, her or
its own legal adviser, business adviser, financial adviser or tax
adviser for legal, financial, business or tax advice.
A copy of this announcement will be available on the Company's
website at www.netscientific.net. Neither the content of the
Company's website nor any website accessible by hyperlinks on the
Company's website is incorporated in, or forms part of, this
announcement.
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 any Additional
Fundraising Shares placed through it) 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
(and any Additional Fundraising Shares placed through it) as a
placing agent. 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 Proposals Thursday 29 March
2018
Publication and posting of Thursday 29 March
the Circular and Form of Proxy 2018
Additional Fundraising Close 8.00 a.m. on Wednesday
11 April 2018
Latest time and date for receipt 10.00 a.m. on Thursday
of completed Forms of Proxy 12 April 2018
or CREST Proxy Instructions
(as applicable) to be valid
at the General Meeting
General Meeting 10.00 a.m. on Monday
16 April 2018
Admission and commencement 8.00 a.m. on Tuesday
of dealings in the New Ordinary 17 April 2018
Shares
New Ordinary Shares credited Tuesday 17 April 2018
to CREST members' accounts
(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.
LETTER FROM THE CHAIRMAN
(EXTRACTED FROM THE CIRCULAR)
Placing, Subscription and Additional Fundraising of up to
11,428,570 New Ordinary Shares at 52.5 pence per share, approval of
a waiver of Rule 9 of the Takeover Code and Notice of General
Meeting
1. Introduction
1.1 The Company announced today that it was proposing to raise
GBP5.0 million (before expenses) by way of: (i) a Placing by Stifel
and Liberum with existing and new institutional investors at the
Issue Price and (ii) a Subscription by certain other investors at
the Issue Price. In addition, the Company is targeting a maximum
further raise of up to GBP1.0 million (before expenses) by way of
the Additional Fundraising. The Issue Price of 52.5 pence
represents the mid-market price of the Company's Ordinary Shares on
28 March 2018, being the Last Practicable Date.
1.2 The Proposals will not proceed if the Resolutions are not
passed at the General Meeting. In these circumstances, the Board
considers that the Group will only have sufficient finances to fund
its business, based on the Board's current plans, until the end of
June 2018. Shareholders are strongly advised to read in full
paragraph 4 of this part 1, which describes the reasons for the
Proposals and the use of the proceeds and paragraph 5 of this part
1 which describes the importance of the vote and the implications
of the Resolutions not being passed at the General Meeting.
1.3 The Directors believe that there are significant
opportunities to enhance returns to shareholders through additional
investment in the Portfolio Companies in order to help advance them
towards significant value inflection milestones, through continued
progression towards commercialisation by focusing on next
generation technology and building relationships with strategic
partners. The Directors continue to work towards both the
completion of series A financings and, ultimately, exits. The
Directors also intend to explore potential transformational
acquisition opportunities within the IP commercialisation
sector.
1.4 The Directors propose to use the majority of the net
proceeds receivable by the Company under the Proposals:
(a) principally to continue to advance the development of the
Portfolio Companies (in particular Vortex and Wanda, with minimal
further direct cash requirements expected for Glycotest and
ProAxsis), to seek to meet the funding requirements needed to take
the Portfolio Companies further towards commercialisation, progress
towards the completion of external series A fundraisings and,
ultimately, potential exit opportunities (in particular the
Company's actively managed assets in Glycotest, Vortex, ProAxsis
and Wanda);
(b) to explore potential transformational acquisition
opportunities for the Company with a view to gaining critical mass
in the IP commercialisation sector, gaining access to new
shareholders and adding additional investments to its current
portfolio; and
(c) for general corporate purposes.
1.5 Woodford is currently a beneficial holder of approximately
45.01 per cent. of the Company's current issued share capital.
Woodford has agreed to subscribe for 5,714,285 Placing Shares,
being an amount that would increase its percentage holding of the
Company immediately following completion of the Proposals to a
maximum of 46.83 per cent. (assuming no New Ordinary Shares are
issued pursuant to the Additional Fundraising) which, without a
waiver of the obligations under Rule 9 of the Takeover Code
(commonly referred to as a "Whitewash"), would oblige Woodford (and
any persons acting in concert with it) to make a general offer to
Shareholders of the Company under Rule 9 of the Takeover Code (a
"Rule 9 Offer"). As is customary, the Panel has agreed to such a
waiver, subject to the Whitewash Resolution being approved at the
General Meeting (on a poll) by Independent Shareholders who hold in
excess of 50 per cent. of the votes cast on the Independent
Shares.
1.6 Currently, the Company does not have sufficient authority in
place to allot all of the New Ordinary Shares on a non-pre-emptive
basis. Accordingly, the following Resolutions will be proposed at
the General Meeting in order that the Proposals can proceed:
(a) to authorise the Directors to allot and issue up to
11,428,570 New Ordinary Shares for the purpose of the Proposals;
and
(b) to disapply pre-emption rights in connection with the
proposed allotment and issue of the New Ordinary Shares pursuant to
that authority.
1.7 The Proposals are conditional, amongst other things, on the
passing of the Resolutions at the General Meeting, notice of which
is set out at the end of this document. If the Resolutions are
passed, the New Ordinary Shares will be allotted after the General
Meeting. Admission is expected to occur no later than 8.00 a.m. on
17 April 2018 or such later time and/or date as Stifel, Liberum and
the Company may agree (provided that such date shall not extend
beyond 8.00 a.m. on 31 May 2018). The Proposals are not being
underwritten.
1.8 The purpose of this document is therefore to: (a) explain
the background to, and reasons for, the Proposals; (b) explain why
the Directors believe that the Proposals will assist in promoting
the success of the Company for the benefit of the Shareholders as a
whole; (c) provide further detail in relation to the Whitewash
Resolution and the implications to Shareholders of Rule 9 of the
Takeover Code being waived; and (d) recommend that, where you are
entitled to do so, you vote in favour of the Resolutions to be
proposed at the General Meeting.
2. Business strategy
2.1 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 remains to
source, fund and commercialise healthcare companies that
significantly improve the lives of people with chronic
diseases.
2.2 Following François Martelet's appointment as CEO in May 2015
and the subsequent review and rationalisation of its portfolio,
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's
strategy is to be an active investor in its Portfolio Companies,
providing extensive management support and typically taking board
representation. 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.
2.3 As at 31 December 2017, the Company had four actively
managed Portfolio Companies in which it owns a majority holding on
a fully diluted basis: Glycotest, Vortex, ProAxsis and Wanda. It
also holds a minority interest in PDS Biotechnology. To date, the
Portfolio Companies have received a total investment of GBP33.4
million from the Company and a further GBP16.3 million in grant
funding.
2.4 The Group continues to concentrate on advancing the
development of Glycotest, Vortex, ProAxsis and Wanda. It also
intends to manage actively its minority investment in PDS
Biotechnology.
2.5 The Portfolio Companies (other than ProAxsis and Wanda) are
all currently in the process of raising external capital or
building relationships with strategic partners. ProAxsis, which has
reached commercialisation and is revenue generating, will assess
its capital requirements towards the end of 2018.
3. Current trading and prospects
3.1 In 2017, the Group delivered various development milestones critical to enhancing the competitiveness and value of the Portfolio Companies.
3.2 The focus of the Group during 2018 will be to continue
progress across its Portfolio Companies by pursuing, where
relevant, corporate deals and fundraises to help progression from
technology success to commercial success. ProAxsis expects to reach
over GBP1.0 million in revenue during 2018 and will review its
financing requirements in the second half of 2018. Glycotest is
continuing its series A discussions with a potential investor and
is aiming to close a series A in H1 2018 following an encouraging
149 patient study with its Chinese partner. Vortex is planning for
a potential fundraise or commercial partnership in H2 2018. Health
Resource Solutions agreed to extend the use of Wanda's digital
health technology to all of its patients, which the Directors
expect to complete in H1 2018.
3.3 NetScientific continues to believe that it has a world-class
portfolio of companies with high-quality science and technology,
experienced and relevant management teams, alongside business and
financing strategies that support the ongoing development of these
companies and enables them to attract third-party capital. In
addition, NetScientific intends to explore potential
transformational acquisition opportunities for the Group with a
view to gaining critical mass in the IP commercialisation sector,
gaining access to new shareholders and adding additional
investments to its current portfolio. The Board and management team
remain committed to bolstering the Group's opportunities and
delivering products and services supporting the next generation of
healthcare opportunities. NetScientific's overall mission remains
to support life-changing innovation and deliver value to its
shareholders.
Outlook
3.4 The Board is encouraged by the Group's and the Portfolio
Companies' progress over the 2017 financial year and the first
quarter of 2018. The Board remains confident that each of the
Portfolio Companies offers the potential to generate significant
shareholder returns over the coming years, with financing events,
commercial sales and strategic partnerships constituting the key
ways in which value is built within the Portfolio Companies. The
Company does not propose to invest in new opportunities until at
least some of its Portfolio Companies have completed their external
fundraising rounds. The Board is aiming to close series A
financings for Glycotest in H1 2018 and for Vortex and Wanda in
late 2018.
4. Reasons for the Proposals and use of proceeds
4.1 The Company raised GBP8.1 million (before expenses) through
a placing and subscription in June 2017 in order to continue
to:
(a) advance the development of the Portfolio Companies; and
(b) take the companies further towards commercialisation and,
ultimately, potential exit opportunities.
4.2 The cash balance of the Company as at 31 December 2017 was GBP6.9 million.
4.3 The Company is proposing to raise GBP5.0 million (before
expenses) by way of the Placing and the Subscription and a maximum
further raise of up to GBP1.0 million (before expenses) by way of
the Additional Fundraising. The proceeds of the Proposals are to
part fund an anticipated GBP11.5 million funding requirement for
the 2018 and 2019 financial years.
4.4 The Company intends to use the GBP5.0 million raised under
the Placing and the Subscription to fund its business and deliver
its strategy beyond the 2018 financial year. The Company would use
any funds raised under the Additional Fundraising to continue to
fund its business and deliver its strategy on the same basis
detailed in this document. If the Proposals do not proceed and
additional financing does not become available to the Company, the
Board considers that the Group will only have sufficient finances
to fund its business, based on the Board's current plans, until the
end of June 2018.
4.5 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, most pertinently being
the completion of external fundraisings. An exit at this stage may
also be considered for any of the Portfolio Companies, if
appropriate. The Group will also explore potential transformational
acquisition 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. Whilst the Group retains close ties with strategic
partners and continues to review potential new investment
opportunities, it does not intend to invest in new opportunities
until at least some of its Portfolio Companies have completed their
external fundraising rounds.
4.6 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 invested a further GBP8.5
million in 2017 to continue their commercial development. The
Company proposes to use the proceeds of the Proposals to further
advance its Portfolio Companies ahead of completion of their
various funding rounds (with the exception of ProAxsis).
4.7 Accordingly, the Directors propose to use the majority of
the net proceeds receivable by the Company under the Proposals:
(a) principally to continue to advance the development of the
Portfolio Companies (in particular Vortex and Wanda, with minimal
further direct cash requirements expected for Glycotest and
ProAxsis), to seek to meet the funding requirements needed to take
the Portfolio Companies further towards commercialisation, progress
towards the completion of external series A fundraisings and,
ultimately, potential exit opportunities (in particular the
Company's actively managed assets in Glycotest, Vortex, ProAxsis
and Wanda);
(b) to explore potential transformational acquisition
opportunities for the Company with a view to gaining critical mass
in the IP commercialisation sector, gaining access to new
shareholders and adding additional investments to its current
portfolio; and
(c) for general corporate purposes.
As set out at paragraph 4.4 above, the Company would use any
funds raised under the Additional Fundraising to continue to fund
its business and deliver its strategy on the same basis detailed in
this document.
4.8 The Directors believe that the flexibility provided by a
non-pre-emptive 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 Proposals.
5. Importance of vote
5.1 Your attention is drawn to the fact that the Proposals are
conditional and dependent on each of the Resolutions being passed
at the General Meeting. Accordingly, if the Shareholders or the
Independent Shareholders (as applicable) do not vote in favour of
the Resolutions at the General Meeting, the Proposals cannot be
implemented by the Company.
5.2 If the Proposals do not proceed and additional financing
does not become available to the Company, the Board considers that
the Group will only have sufficient finances to fund its business,
based on the Board's current plans, until the end of June 2018.
This highlights the significance of the current financial position
if any of the Resolutions in the Notice of General Meeting are not
approved.
5.3 In the event that any of the Resolutions in the Notice of
General Meeting are not approved and the Proposals fail to proceed,
the Directors will seek to immediately implement the actions
detailed below:
(a) the Company would seek to sell one or more of its Portfolio
Companies before the end of June 2018. However, although it is
possible that the proceeds from such sale could increase available
funds, the Directors cannot be certain that such cash would be
received within the specified timeframe, if at all, and the receipt
of such funds lies outside the full control of the Company;
(b) the Group would seek to reduce its cost base by suspending
all discretionary spend. Since the Group is already carefully
controlling its cash management, the Directors believe that the
benefit of further discretionary spend suspensions is very limited
in terms of extending working capital and do not anticipate that
the quantum of such savings would be sufficient to prevent a
working capital shortfall; and
(c) the Company would seek to execute M&A transactions with
its peers in the IP commercialisation sector. However, the
Directors cannot guarantee that terms could be agreed within the
timeframe required to prevent a working capital shortfall.
If the Company was unsuccessful in pursing these alternative
courses of action by the end of June 2018, the Directors would be
obliged to cease operations, the consequences of which could
include administration or receivership, or liquidation or other
insolvency proceedings. In such circumstances, Shareholders could
lose all or a substantial amount of the value of their investment
in the Company. Accordingly, it is important that Shareholders or
the Independent Shareholders (as applicable) vote in favour of the
Resolutions at the General Meeting in order that the Proposals may
proceed.
6. Principal terms of the Proposals
6.1 The Company intends to issue in aggregate 9,523,809 New
Ordinary Shares to raise GBP5.0 million before expenses by way of:
(i) a Placing by Stifel and Liberum with existing and new
institutional investors at the Issue Price and (ii) a Subscription
with certain individuals at the Issue Price. In addition, the
Company is targeting a maximum further raise of up to GBP1.0
million (before expenses) by way of the Additional Fundraising.
6.2 The Proposals are conditional, among other matters, upon:
(a) the passing of the Allotment Resolutions by the Shareholders;
(b) the passing of the Whitewash Resolution by the Independent Shareholders;
(c) the Placing Agreement becoming or being declared
unconditional in all respects subject only to Admission (except, in
respect of the Subscription only, in so far as the Placing
Agreement is conditional on the Subscription Agreements becoming
unconditional in all respects subject only to Admission) and not
having been terminated in accordance with its terms before
Admission; and
(d) Admission occurring no later than 8.00 a.m. on 17 April 2018
(or such later time and/or date (being no later than 8.00 a.m. on
31 May 2018) as Stifel, Liberum and the Company may agree).
6.3 If any of the conditions are not satisfied (or, where
capable of being waived, waived), the New Ordinary Shares will not
be allotted and issued and all monies received to date from the
Placees will be returned to them (at their own risk and without
interest) as soon as possible thereafter.
6.4 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.
6.5 Application will be made to the London Stock Exchange for
the Admission of the New Ordinary Shares to trading on AIM. It is
expected that Admission will occur and that dealings will commence
at 8.00 a.m. on 17 April 2018.
7. Overview of the Additional Fundraising
7.1 In addition to the Placing and the Subscription, the Company
is targeting a maximum further raise of up to GBP1.0 million
(before expenses) by way of an Additional Fundraising of up to
1,904,761 New Ordinary Shares at the Issue Price. The Additional
Fundraising will be by way of a private placing or subscription at
the discretion of the Directors and will not be open to the public.
The Additional Fundraising will be available until the Additional
Fundraising Close and only to institutional or other investors who
the Directors are satisfied can lawfully invest on a private
placement basis.
7.2 The Additional Fundraising is not being underwritten.
7.3 The Additional Fundraising 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.
8. The Takeover Code
8.1 The Proposals give rise to certain considerations under the
Takeover Code. Brief details of the Panel, the Takeover Code and
the protections they afford are described below.
8.2 The Takeover Code is issued and administered by the Panel.
The Takeover Code applies to all takeover and merger transactions,
however effected, where the offeree company is, among other things,
a listed or unlisted public company resident in the United Kingdom
(and to certain categories of private limited companies). The
Company is a public company whose Ordinary Shares are admitted to
trading on AIM, and its Shareholders are entitled to the
protections afforded under the Takeover Code.
8.3 Under Rule 9 of the Takeover Code, where any person
acquires, whether by a series of transactions over a period of time
or not, an interest in shares which (taken together with shares
already held by him and any interest in shares held or acquired by
persons acting in concert with him) carry 30 per cent. or more of
the voting rights of a company which is subject to the Takeover
Code, that person is normally required to make a general offer to
all the holders of any class of equity share capital or other class
of transferable securities carrying voting rights in that company
to acquire the balance of their interests in the company.
8.4 Rule 9 of the Takeover Code also provides, among other
things, where any person who, together with persons acting in
concert with him, is interested in shares which in aggregate carry
not less than 30 per cent. but not more than 50 per cent. of the
voting rights of a company which is subject to the Takeover Code,
and such person, or any person acting in concert with him, acquires
an additional interest in shares which increases the percentage of
shares carrying voting rights in which he is interested, then such
person is normally required to make a general offer to all the
holders of any class of equity share capital or other class of
transferable securities carrying voting rights of that company to
acquire the balance of their interests in the company.
8.5 An offer under Rule 9 of the Takeover Code must be in cash
(or with a cash alternative) and at the highest price paid within
the preceding 12 months for any shares in the company by the person
required to make the offer or any person acting in concert with
them.
8.6 Immediately following Admission, Woodford will have acquired
interests in the Ordinary Shares carrying a maximum of 46.83 per
cent. of the voting rights of the Company (assuming no New Ordinary
Shares are issued pursuant to the Additional Fundraising) which,
without a waiver of the obligations under Rule 9 of the Takeover
Code, would oblige Woodford (and any party deemed to be acting in
concert with it) to make a general offer to Shareholders under Rule
9 of the Takeover Code. Woodford is an investment fund manager
which actively invests as agent for its clients in companies
seeking development capital. Accordingly, Woodford will subscribe
for its Placing Shares using its clients' available cash
resources.
9. Dispensation from the requirement to make a general offer under the Takeover Code
9.1 The Company has applied to the Panel for a waiver of Rule 9
of the Takeover Code in order to permit the Proposals to proceed
without triggering an obligation on the part of Woodford to make a
general offer to Shareholders.
9.2 Under Note 1 on the Notes on the Dispensations from Rule 9
of the Takeover Code, the Panel will normally waive the requirement
for a Rule 9 Offer if, among other things, the shareholders of the
company who are independent of the person who would otherwise be
required to make an offer and any person acting in concert with him
(the "Independent Shareholders") pass a resolution approving such a
waiver.
9.3 Accordingly, the Panel has agreed to grant a waiver of Rule
9 of the Takeover Code subject to the Independent Shareholders
approving the Whitewash Resolution on a poll at the General
Meeting. To be passed, the Whitewash Resolution will require a
simple majority of the votes cast on a poll by the Independent
Shareholders.
9.4 Shareholders should note that, following completion of the
Proposals, Woodford will not be entitled to increase its interest
in the voting rights of the Company without incurring a further
obligation under Rule 9 of the Takeover Code to make a general
offer (unless a dispensation from this requirement has been
obtained from the Panel in advance).
9.5 If the Whitewash Resolution is passed by the Independent
Shareholders at the General Meeting, Woodford will not be
restricted from making an offer for the Company.
9.6 Shareholders should also note that, following completion of
the Proposals, Woodford will control approximately 46.83 per cent.
of the voting rights of the Company (assuming no New Ordinary
Shares are issued pursuant to the Additional Fundraising) and that
this will increase the percentage of the Ordinary Shares that are
not in public hands (as defined in the AIM Rules). This may in turn
have the effect of reducing the liquidity of trading in the
Ordinary Shares on AIM. Woodford's stake in the voting rights of
the Company will also mean that Woodford will be able, if it so
wishes, to exert significant influence over resolutions proposed at
future general meetings of the Company. Although it is not the
current intention of Woodford to seek a resolution at a general
meeting of the Company to de-list the Ordinary Shares from AIM,
Woodford could, if it so wishes in the future, propose and exert
significant influence over the result of such a resolution.
10. Independent advice provided to the Board
10.1 The Takeover Code requires the Board to obtain competent
independent advice regarding the merits of the transaction which is
the subject of the Whitewash Resolution, the controlling position
which it will create, and the effect which it will have on the
Shareholders generally.
10.2 Accordingly, Stifel, as the Company's financial adviser,
has provided formal advice to the Board regarding the Proposals.
Stifel confirms that it is independent of Woodford and has no
commercial relationship with Woodford.
11. Related Party Transaction
11.1 The participation of Woodford and Invesco in the Proposals
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, its nominated adviser, that the terms
of the transactions are fair and reasonable in so far as the
Company's Shareholders are concerned.
12. Director participating in the Placing and Subscription
The following Directors intend to subscribe for New Ordinary
Shares in the Placing and Subscription as follows:
No. of No. of
Ordinary New Ordinary No. of Percentage
Shares Shares Ordinary of enlarged
as at 28 intended Shares share capital
March 2018 to be subscribed as at Admission* as at Admission*
------------ ------------------ ------------------ ------------------
Sir Richard
Sykes 62,500 30,952 93,452 0.12%
Barry Wilson 36,358 30,952 67,310 0.09%
Professor Stephen
Smith - 28,571 28,571 0.04%
* Assuming the issuance of no New Ordinary Shares pursuant to
the Additional Fundraising.
13. General Meeting
13.1 At the 2017 AGM, the Directors were granted authority to
allot and issue up to an aggregate nominal value of GBP851,261
(17,025,220 Ordinary Shares) and up to an aggregate nominal value
of GBP127,689 (2,553,780 Ordinary Shares) of such amount on a
non-pre-emptive basis. Accordingly, the Directors do not currently
have authority to allot all of the New Ordinary Shares on a
non-pre-emptive basis and the Board is seeking the approval of
Shareholders to allot the New Ordinary Shares on a non-pre-emptive
basis at the General Meeting. In addition, the Panel's waiver of
Rule 9 of the Takeover Code has been granted subject to the
Independent Shareholders approving the Whitewash Resolution on a
poll at the General Meeting.
13.2 A notice convening the General Meeting, which is to be held
at the offices of Ashurst LLP, Broadwalk House, 5 Appold Street,
London EC2A 2AG at 10.00 a.m. on 16 April 2018, is set out at the
end of this document. At the General Meeting, the following
Resolutions will be proposed:
(a) Resolution 1, which is an ordinary resolution to authorise
the Directors to allot relevant securities pursuant to the
Proposals up to an aggregate nominal amount of GBP571,428.50, being
equal to 11,428,570 New Ordinary Shares (which is the maximum
number of New Ordinary Shares available under the Proposals);
(b) Resolution 2, which is conditional on the passing of
Resolution 1, and is a special resolution to authorise the
Directors to issue and allot up to 11,428,570 New Ordinary Shares
pursuant to the Proposals on a non-pre-emptive basis; and
(c) Resolution 3, which is conditional on the passing of
Resolution 1 and Resolution 2, and is an ordinary resolution to
approve the Panel's waiver of Rule 9 of the Takeover Code. This
resolution will be taken on a poll of the Independent Shareholders
only, and must be approved on a poll by the Independent
Shareholders who together represent a simple majority of the issued
Ordinary Shares held by the Independent Shareholders being voted
(whether in person or by proxy) at the General Meeting.
13.3 The authorities to be granted pursuant to Resolution 1 and
Resolution 2 will expire on the date falling six months from the
date of the passing of the Resolutions (unless renewed, varied or
revoked by the Company before or on that date) and would be in
addition to the Directors' authorities to allot relevant securities
and disapply statutory pre-emption rights granted at the 2017
AGM.
13.4 The Resolutions are set out in full in the Notice of
General Meeting at the end of this document.
14. Action to be taken
General Meeting
You will find enclosed with this document a Form of Proxy for
use by Shareholders at the General Meeting. Whether or not you
intend to be present at the General Meeting, you are requested to
complete and return the Form of Proxy in accordance with the
instructions printed thereon. To be valid, completed Forms of Proxy
must be received by Link Asset Services, The Registry, 34 Beckenham
Road, Beckenham, Kent BR3 4ZF as soon as possible and in any event
not later than 10.00 a.m. on 12 April 2018, being 48 hours before
the time appointed for holding the General Meeting. Completion of a
Form of Proxy will not preclude you from attending the meeting and
voting in person if you so choose.
15. Further information
Before deciding what action to take in respect of the
Resolutions, you are advised to read the whole of this document and
not merely rely on certain sections of this letter.
16. Recommendation
16.1 The Directors, who have been so advised by Stifel, consider
the Proposals to be fair and reasonable and in the interests of
Independent Shareholders, Shareholders and the Company, taken as a
whole.
Accordingly, the Directors unanimously recommend Shareholders
vote in favour of Resolutions 1 and 2, and, where they are entitled
to do so as Independent Shareholders, Resolution 3 as the Directors
who hold, or are otherwise beneficially interested in, Ordinary
Shares intend to do in respect of the beneficial holdings which are
under their control of, in aggregate, 98,858 Ordinary Shares
representing approximately 0.14 per cent. of the Existing Ordinary
Shares as at the Last Practicable Date.
16.2 The Proposals 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 Proposals will not
proceed.
16.3 If the Proposals do not proceed and additional financing
does not become available to the Company, the Board considers that
the Group will only have sufficient finances to fund the business,
based on the Board's current plans, until the end of June 2018.
DEFINITIONS
The following definitions apply throughout this announcement,
unless the context requires otherwise:
"2017 AGM" means the Company's annual general meeting held on 21
June 2017;
"Act" means the Companies Act 2006 (as amended);
"Additional Fundraising" means the issue, separate to the
Placing and the Subscription, of up to a further 1,904,761 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 the Circular to the date of the Additional Fundraising
Close by way of a placing or subscription at the discretion of the
Directors;
"Additional Fundraising Close" means 8.00 a.m. on 11 April 2018
(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;
"Allotment Resolutions" means Resolution 1 and Resolution 2 to
be proposed at the General Meeting as set out in the Notice of
General Meeting;
"Board" or "Directors" means the directors of the Company from
time to time;
"Company" or "NetScientific" means NetScientific plc;
"CREST" means the relevant system in respect of which Euroclear
is the operator (each as defined in the CREST Regulations);
"CREST Proxy Instruction" has the meaning given to this term in
the notes to the Notice of General Meeting;
"CREST Manual" means the CREST manual issued by Euroclear;
"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);
"Euroclear " means Euroclear UK & Ireland Limited;
"Existing Ordinary Shares" means the 69,038,057 Ordinary Shares
in issue on the date of this announcement;
"FCA" means the Financial Conduct Authority of the UK;
"Form of Proxy" means the form of proxy for use in relation to
the General Meeting enclosed with the Circular;
"FSMA" means the Financial Services and Markets Act 2000 (as
amended from time to time);
"General Meeting" means the General Meeting of the Company,
convened for 10.00 a.m. on 16 April 2018 or at any adjournment
thereof, notice of which is set out at the end of the Circular;
"Glycotest" means Glycotest, Inc.;
"Group" means the Company, its subsidiaries, the Portfolio
Companies and the investments in certain other companies;
"Independent Shareholders" means all Shareholders other than
Woodford (and anyone acting in concert with it) and the
Placees;
"Independent Shares" means the Ordinary Shares held by
Independent Shareholders;
"Invesco" means Invesco Asset Management;
"Investment Company Act" means the US Investment Company Act of
1940, as amended;
"Issue Price" means 52.5 pence per New Ordinary Share;
"Last Practicable Date" means 28 March 2018 (being the last
practicable date prior to the publication of this announcement;
"Liberum" means Liberum Capital Limited;
"Link Asset Services" means Link Asset Services Limited, of The
Registry, 34 Beckenham Road, Beckenham, Kent BR3 4ZF, registrars to
NetScientific;
"London Stock Exchange" means London Stock Exchange plc;
"New Ordinary Shares" means up to 11,428,570 new Ordinary Shares
to be issued in relation to the Proposals;
"Notice of General Meeting" means the notice convening the
General Meeting as set out at the end of the Circular;
"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;
"Placing" means the placing of New Ordinary Shares at the Issue
Price, the details of which are set out in the Circular;
"Placing Agreement" means the agreement entered into between the
Company, Stifel and Liberum in respect of the Placing (and any
Additional Fundraising Shares placed through either of them) dated
29 March 2018, as described in the Circular;
"Placing Shares" means 8,595,239 New Ordinary Shares to be
allotted and issued by the Company at the Issue Price;
"Portfolio Companies" means Vortex, Wanda, ProAxsis, Glycotest
and PDS Biotechnology;
"ProAxsis" means ProAxsis Ltd;
"Proposals" means the Placing, the Subscription and the
Additional Fundraising;
"Prospectus Rules" means the rules made by the FCA pursuant to
sections 73A(a) and (4) of FSMA;
"Regulation S" means Regulation S under the Securities Act;
"Regulatory Information Service" has the meaning given in the
AIM Rules for Companies;
"Resolutions" means the three resolutions to be proposed at the
General Meeting as set out in the Notice of General Meeting;
"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 investors at the Issue Price, the
details of which are set out in the Circular;
"Subscription Agreements" means the agreements entered into
between the Company and certain high net worth individuals and/or
companies in respect of the Subscription;
"Subscription Shares" means the 928,570 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(s);
"Takeover Code" means the City Code on Takeovers and
Mergers;
"United Kingdom" or "UK" means the United Kingdom of Great
Britain and Northern Ireland;
"United States" 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;
"US person" has the meaning set out in Regulation S;
"Vortex" means Vortex Biosciences, Inc.;
"Wanda" means Wanda, Inc.;
"Whitewash Resolution" means the ordinary resolution to approve
the Panel's waiver of Woodford's obligation to make an offer under
Rule 9 of the Takeover Code on completion of the Proposals, which
is set out in Resolution 3 of the Notice of General Meeting in the
Circular, and is required to be passed on a poll at the General
Meeting by the Independent Shareholders; and
"Woodford" means Woodford Investment Management Limited, a
private company limited by shares incorporated in England and Wales
with company number 10118169 and having its registered office
address at 9400 Garsington Road, Oxford Business Park, Oxford OX4
2HN, which is authorised and regulated by the FCA.
THE CONTENT OF THIS PROMOTION HAS NOT BEEN APPROVED BY AN
AUTHORISED PERSON WITHIN THE MEANING OF THE FINANCIAL SERVICES AND
MARKETS ACT 2000. RELIANCE ON THIS PROMOTION FOR THE PURPOSE OF
ENGAGING IN ANY INVESTMENT ACTIVITY MAY EXPOSE AN INDIVIDUAL TO A
SIGNIFICANT RISK OF LOSING ALL OF THE PROPERTY OR OTHER ASSETS
INVESTED.
APPIX - TERMS AND CONDITIONS OF THE OFFER
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 I 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; OR (III) ARE
PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH
COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (C)
PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH
PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THIS APPIX I 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 I) MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY
INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPIX I 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 I DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR
SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.
THE INFORMATION CONTAINED IN THIS APPIX I IS NOT FOR RELEASE,
DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA,
AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA, OR ANY
OTHER JURISDICTION WHERE SUCH RELEASE WOULD BE UNLAWFUL. THIS APPIX
I (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, 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"), OR ANY OTHER STATE OR JURISDICTION OF THE UNITED
STATES AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, OR TO
OR FOR THE ACCOUNT OR BENEFIT OF, US PERSONS (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT) ABSENT REGISTRATION EXCEPT
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.
THE COMPANY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
INVESTMENT COMPANY ACT AND INVESTORS WILL NOT BE ENTITLED TO THE
BENEFITS OF THAT ACT. NO OFFER, PURCHASE, SALE OR TRANSFER OF THE
ORDINARY SHARES MAY BE MADE EXCEPT IN CIRCUMSTANCES WHICH WILL NOT
RESULT IN THE COMPANY BEING REQUIRED TO REGISTER AS AN INVESTMENT
COMPANY UNDER THE INVESTMENT COMPANY ACT.
EACH PLACEE (AS DEFINED HEREIN) SHOULD CONSULT WITH ITS OWN
ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN
INVESTMENT IN THE PLACING SHARES. THE PRICE OF ORDINARY 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 I.
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.
Information to Distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II; and (c) local implementing measures (together, the "MiFID
II Product Governance Requirements"), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the MiFID II Product
Governance Requirements) may otherwise have with respect thereto,
the Placing Shares have been subject to a product approval process,
which has determined that such Placing Shares are: (i) compatible
with an end target market of investors who meet the criteria of
professional clients and eligible counterparties, each as defined
in MiFID II; and (ii) eligible for distribution through all
distribution channels as are permitted by MiFID II (the "Target
Market Assessment"). Notwithstanding the Target Market Assessment,
Distributors should note that: the price of the Placing Shares may
decline and investors could lose all or part of their investment;
the Placing Shares offer no guaranteed income and no capital
protection; and an investment in the Placing Shares is compatible
only with investors who do not need a guaranteed income or capital
protection, who (either alone or in conjunction with an appropriate
financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources
to be able to bear any losses that may result therefrom. The Target
Market Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the Placing. Furthermore, it is noted that, notwithstanding the
Target Market Assessment, Stifel and Liberum will only procure
investors who meet the criteria of professional clients and
eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness
for the purposes of MiFID II; or (b) a recommendation to any
investor or group of investors to invest in, or purchase, or take
any other action whatsoever with respect to the Placing Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the Placing Shares and determining
appropriate distribution channels.
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 Issue Price.
The Placing is conditional upon , inter alia, (i) the Panel
providing a waiver pursuant to Rule 9 of the Takeover Code in
connection with the Placing, subject to the Whitewash Resolution
being approved by Independent Shareholders; (ii) the approval by
the Company's shareholders of the Resolutions to be proposed at the
General Meeting (which will, inter alia, grant authority to the
directors of the Company to allot the Placing Shares and the
Subscription Shares and disapply pre-emption rights in respect of
the Placing Shares and the Subscription Shares); (iii) the
Subscription Agreements having become unconditional in all respects
(other than in respect of Admission); and (iv) Admission occurring
by 8.00 a.m. on 17 April 2018.
Application will be made for the Placing Shares and the
Subscription Shares to be admitted to trading on AIM. The Placing
Shares to be issued pursuant to the Placing and the Subscription
Shares to be issued pursuant to the Subscription 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
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, 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 fraud or 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 52.5 pence (the
"Issue Price") and is payable by the Placees, or in circumstances
where a Placee is acting as agent, the Placee shall procure the
payment of such amount, 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 or in writing by the relevant Bank and a
contract note will be dispatched as soon as possible thereafter.
That 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 Issue 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, or to procure the payment, to it (or as it may
direct) in cleared funds an amount equal to the product of the
Issue 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 (and save in the
event of fraud), 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 written contract note or written 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 Panel on Takeovers and Mergers providing a waiver
pursuant to Rule 9 of the Takeover Code in connection with the
Placing, subject to the Whitewash Resolution being approved by
Independent Shareholders;
(b) Admission becoming effective by not later than 8.00 a.m. on
17 April 2018 (or such later time and/or date as the Banks and the
Company may agree, not being later than 8.00 a.m. on 31 May
2018);
(c) the Placing Agreement becoming unconditional in all respects; and
(d) the Resolutions being passed at the general meeting to be held on 16 April 2018.
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. it comes to the knowledge of either Bank that any of the
warranties was untrue inaccurate or misleading in any respect which
either Bank in (acting in good faith) believes is material when
made and/or that any of the warranties would be untrue, inaccurate
or misleading in any respect which either Bank in its sole and
absolute discretion believes is material if it were to be repeated
at any time prior to Admission by reference to the facts, matters
and circumstances then subsisting;
2. 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 incorrect or has become untrue,
inaccurate, incomplete or misleading in any respect which either
Stifel or Liberum in its opinion (acting in good faith) believes is
material;
3. the Company fails to comply, in any respect which either Bank
in its opinion (acting in good faith) believes is material, with
any of its obligations under the Placing Agreement;
4. the subscription proceeds in respect of the Subscription
Shares have not been received by the Company prior to
Admission;
5. the Application is refused by the London Stock Exchange; or
6. there has been a force majeure or market disruption event the
effect of which is such to make it, in Stifel's or Liberum's
opinion (acting in good faith) impracticable or inadvisable to
proceed with the Placing.
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, undertakes,
acknowledges and agrees (for itself and for any such prospective
Placee) to each of the Company, the Banks and their respective
directors, officers, employees, agents and affiliates 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. 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
(including the Appendices), 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 fraud or 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 (including the Appendices)
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 (including the Appendices)
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 (including the Appendices)
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(including the Appendices), the Publicly Available
Information or otherwise. Nothing in this Appendix I shall exclude
any liability of any person for fraud or 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, 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, 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 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 or the Republic of South
Africa and may not be offered, sold, or acquired, directly or
indirectly, within those jurisdictions;
11. the Placing Shares have not been and will not be registered
under the Securities Act and may not be offered, sold or resold in
or into the United States or to or for the account or benefit of US
persons except pursuant to an effective registration statement
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 not a
US person (as defined in Regulation S under the Securities Act) and
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 as a result of 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 (including the
Appendices), 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, or procure payment, for
the Placing Shares for which it has agreed to subscribe and
acknowledges and agrees that it will make or procure payment to the
relevant Bank for the Placing Shares allocated to it in accordance
with the terms and conditions of this Appendix I on the due times
and dates set out in this Appendix I, 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 and it will remain liable for any shortfall below the
net proceeds of such sale and the placing proceeds of such Placing
Shares and may be required to bear any stamp duty or stamp duty
reserve tax (together with any interest or penalties due pursuant
to the terms set out or referred to in this Appendix I) which may
arise upon the sale of such Placee's Placing Shares on its
behalf;
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 other country
or jurisdiction;
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, or procure payment, 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 or as agent, (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. neither it, nor the person specified by it for registration
as holder of Placing Shares is, or is acting as nominee or agent
for, and the Placing Shares will not be allotted to, any person is
or may be liable to stamp duty or stamp duty reserve tax 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);
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. 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 (including the
Appendices) 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 (including the Appendices)
or elsewhere, provided that nothing in this paragraph shall exclude
any liability of any person for fraud;
28. 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;
29. 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;
30. 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;
31. 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 2017 (together, the "Regulations")
and, if making or procuring 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;
32. it is aware of the obligations regarding insider dealing EU
Regulation 596/2014 on Market Abuse ("MAR") and section 56 of the
Criminal Justice Act 1993 and confirms that it has and will
continue to comply with those obligations;
33. it has neither received nor relied on any "inside
information" as defined in MAR concerning the Company in accepting
this invitation to participate in the Placing;
34. in order to ensure compliance with the Money Laundering
Regulations 2017, 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;
35. 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;
36. 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;
37. 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, undertakings, acknowledgements and
agreements, which are given to the Banks, each on their own behalf
and on behalf of the Company and are irrevocable;
38. 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, undertakings, acknowledgements, agreements and
undertakings on behalf of each such accounts;
39. time is of the essence as regards the obligations under this Appendix I;
40. 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 the
address provided by it to the Banks;
41. the Placing Shares will be issued subject to the terms and
conditions of this Appendix I and the Company's articles of
association; and
42. 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
or procure 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 the 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 such 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 of 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
MSCJLMATMBITMAP
(END) Dow Jones Newswires
March 29, 2018 02:02 ET (06:02 GMT)
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