TIDMGDR
RNS Number : 5537H
Genedrive PLC
16 November 2018
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014. Upon the publication
of this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
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16 November 2018
genedrive plc ("genedrive" or the "Company")
Proposed placing to raise GBP3.5 million, issue of GBP2.5
million Loan Notes and a broker option of up to GBP0.5 million
Cornerstone investment of GBP3.5 million and Business Update
genedrive plc (AIM: GDR), the near patient molecular diagnostics
company, today confirms its intention to raise GBP6.0 million
(before expenses) (the "Fundraising") by way of a conditional
placing (the "Placing") with new and existing investors through the
issue of 15,217,391 new ordinary shares ("Placing Shares") at a
price of 23 pence per Placing Share (the "Placing Price") and the
issue of GBP2.5 million convertible Loan Notes. BGF has
conditionally agreed to subscribe for the GBP2.5 million unsecured
convertible Loan Notes and GBP1 million of Placing Shares subject
to, inter alia, a total of GBP3.5 million being raised through the
Placing.
The Company also announces a proposal to raise up to a further
GBP0.5 million by way of a broker option through the issue of up to
2,173,913 additional new Ordinary Shares (the "Broker Option
Shares") at the Placing Price in order to allow existing and other
investors to participate in this Fundraising (the "Broker
Option").
The net proceeds will fund the working capital needs of the
Company in relation to the launch of the Genedrive(R) HCV-ID Kit
for hepatitis C diagnosis and support projects to enhance the gross
margin for this assay. The net proceeds will also go towards
funding the Company's assay development programmes in antibiotic
induced hearing loss ("AIHL") and tuberculosis ("mTB") and the
continued development of the Genedrive(R) system. The net proceeds
of the Placing and Loan Note will also fund a renegotiated deferred
consideration liability of GBP300,000 in connection with the
purchase of the company that initially conceived of
Genedrive(R).
The Placing Price equates to the closing mid-market price of the
Company's Ordinary Shares on 15 November 2018, being the last
practicable date prior to the date of this announcement.
The Company has recently received advance assurance from HMRC
that the ordinary shares in the Company represent a qualifying
investment for a VCT and are capable of qualifying for EIS tax
reliefs. Accordingly, the Placing Shares and Broker Option Shares
will rank as "eligible shares" and will be capable of being a
"qualifying holding" for the purposes of investment by VCTs, and
that the Company can issue EIS 3 "compliance certificates" for the
purposes of EIS.
The Fundraising including the Broker Option are conditional,
inter alia, on the passing of the Resolutions to be considered by
the Company's existing shareholders at the General Meeting to be
held at 12 noon on 7 December 2018 at The Incubator Building, 48
Grafton Street, Manchester, M13 9XX. A circular will be posted to
shareholders in due course.
Admission is expected to occur at 8.00 a.m. on 10 December 2018
(or such other date as the Company, Peel Hunt and Stanford Capital
Partners may agree, being no later than 31 December 2018).
Peel Hunt LLP ("Peel Hunt") and Stanford Capital Partners
Limited ("Stanford Capital") are acting as joint Bookrunners
(together, the "Joint Bookrunners") in respect of the Placing and
Broker Option. Neither the Placing nor the Broker Option have been
underwritten.
The Company is also pleased to announce the following
developments across its business:
Genedrive(R) Commercialisation
- Encouraging progress on Genedrive(R) HCV-ID Kit commercialisation
o Approximately 50 Genedrive(R) units and 1,600 assays purchased
by Sysmex to support registrations
o Registration and import licenses progressing in approximately
30 countries by 30 June 2019
o First registrations expected by the end of the calendar year
2018 with sales following thereafter
- Application made for World Health Organisation prequalified
status for Genedrive(R) HCV-ID Kit - decision expected in 6 -12
months
- New $0.9 million order from US Department of Defense for Genedrive(R) instruments and assays
Genedrive(R) Development
- Genedrive(R) AIHL test progressing well - targeting NHS market
of c. GBP3.5 million and an estimated GBP35 million market
opportunity in Western i.e. non LMIC markets. Targeting UK launch
and first commercial revenues in the financial year ending June
2021
- Proposed relaunch of mTB assay in the financial year ending June 2021
Placing and Broker Option
- The Placing is being conducted via an accelerated Bookbuild,
pursuant to which the Company intends to raise GBP3.5 million
through the issue of the Placing Shares at the Placing Price. The
accelerated Bookbuild will be launched immediately following this
announcement and will be subject to the terms and conditions set
out in the Appendix to this announcement
- The Company has also granted to the Joint Bookrunners the
Broker Option to raise up to a further GBP500,000 through the issue
of up to 2,173,913 Broker Option Shares at the Placing Price in
order to allow existing and other investors to participate in the
Fundraising. The exercise of the Broker Option shall be at the
discretion of the Joint Bookrunners (with the agreement of the
Company) and the Joint Bookrunners are under no obligation to
exercise the Broker Option
BGF Loan Notes
- Subscription agreement signed with BGF to provide GBP2.5
million unsecured convertible loan notes and a non-binding
commitment to invest a further GBP1 million in new equity via the
Placing conditional, amongst other things, on the Company raising
an additional GBP2.5 million in new equity.
GHIF Bond
- Conditional on, inter alia, Admission the Global Health
Investment Fund ("GHIF") and the Company have agreed to make
certain amendments to the terms of the $8 million convertible
bond
o Maturity date extended to December 2023 from December 2021
o Roll up of interest payments extended from January 2019 to
January 2022
o Strike price of first $2 million tranche reduced to 28.75p
from 150p
o Strike price of the remaining $6 million tranche reduced to
150p from 489p
Financial Update
- Company continues to trade in line with management expectations post July trading update
- Unaudited cash balance at 30 September 2018 of GBP2.0 million
which provides sufficient runway through to Q1/Q2 calendar year
2019
- The Company published its unaudited preliminary results for
the year ended 30 June 2018 this morning
- R&D tax claim of GBP980,000 to be made post the Company
being able to evidence it is a going concern - the Placing and Loan
Note proceeds will satisfy this requirement
David Budd, Chief Executive Officer of genedrive plc, said: "The
HCV market is significant with many millions of people affected by
the disease in low and middle-income countries but low diagnosis
rates. We have the first to market point-of-need molecular test, a
strong commercial platform and a clear strategy to deliver revenue
growth. A test for antibiotic induced hearing loss, a first product
aimed at non-LMIC markets, and the re-launch mTB provide further
potential to benefit from the capabilities of our Genedrive(R)
diagnostics platform."
"Securing BGF as a cornerstone investor and the fundraising we
have announced today will put us in a strong position to deliver on
these opportunities."
- Ends -
For further details please contact:
genedrive plc
David Budd: CEO
Matthew Fowler: CFO +44 (0)161 989 0245
Peel Hunt LLP
James Steel
Oliver Jackson +44 (0)207 418 8900
Rory James-Duff (Equity
Capital Markets)
Stanford Capital Partners
Limited
Patrick Claridge +44 (0)203 815 8880
John Howes
Consilium Strategic Communications +44 (0) 203 709 5700
Chris Gardner genedrive@consilium-comms.com
Matthew Neal
Laura Thornton
The person who arranged for the release of this announcement on
behalf of genedrive plc was Matthew Fowler, Chief Financial
Officer.
Notes to Editors
About genedrive
genedrive plc is a molecular diagnostics company developing and
commercialising a low cost, rapid, versatile, simple to use and
robust point of need molecular diagnostics platform for the
diagnosis of infectious diseases and for use in patient
stratification (genotyping), pathogen detection and other
indications. The Genedrive(R) HCV-ID test has received CE-IVD
Certification and has been launched in Africa and Asia Pacific.
genedrive has distribution agreements with subsidiaries of Sysmex
Corporation for the distribution of the Genedrive(R) platform in
the EMEA and SE Asia (ex-India), and with ARKRAY Healthcare pvt Ltd
for the distribution of the Genedrive(R) HCV-ID Kit and
Genedrive(R) platform in India. Further details can be found at:
www.genedriveplc.com and www.genedrive.com. The Company also has
tests in development for tuberculosis (mTB) and Antibiotic Induced
Hearing Loss (AIHL).
Important notice
This announcement may not be published, distributed or
transmitted by any means or media, directly or indirectly, in whole
or in part, in or into the United States (including its territories
and possessions, any State of the United States and the District of
Columbia) or any other jurisdiction where to do so would constitute
a violation of the relevant laws of such jurisdiction. This
announcement does not constitute or form a part of any offer to
sell, or a solicitation of an offer to buy or subscribe for,
securities in the United States. The securities in this
announcement have not been, and will not be, registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act").
Securities may not be offered or sold within the United States
absent (i) registration under the Securities Act or (ii) an
available exemption from registration under the Securities Act. All
offers and sales of securities outside of the United Sates will be
made in reliance on, and in compliance with, Regulation S under the
Securities Act. There is no intention to register the securities
mentioned herein in the United States or to make a public offering
of such securities in the United States.
Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated
in the United Kingdom by the Financial Conduct Authority ("FCA")
and Stanford Capital Partners Limited ("Stanford Capital"), an
authorised representative of MJ Hudson Advisers Limited (which is
authorised and regulated by the FCA) are acting exclusively for the
Company and for no--one else in relation to the proposed
Fundraising (as defined below), and will not be responsible to any
other person for providing the protections afforded to their
respective clients nor for providing advice in connection with the
matters contained in this announcement. No representation or
warranty, express or implied, is or will be made as to, or in
relation to, and no responsibility or liability is or will be
accepted by Peel Hunt or Stanford Capital nor by any of their
affiliates or agents (or any of their respective directors,
officers, employees or advisers), as to or in relation to, the
contents, accuracy or completeness of this announcement or any
other written or oral information made available to or publicly
available to any interested party or its advisers, or any other
statement made or purported to be made by or on behalf of Peel Hunt
or Stanford Capital.
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 New Ordinary Shares have been subject to a product approval
process, which has determined that the New Ordinary Shares are: (i)
compatible with an end target market of (a) retail investors, (b)
investors who meet the criteria of professional clients and (c)
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 New Ordinary Shares may decline
and investors could lose all or part of their investment; the New
Ordinary Shares offer no guaranteed income and no capital
protection; and an investment in the New Ordinary 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, Peel Hunt and
Stanford Capital 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 New Ordinary Shares. Each
distributor is responsible for undertaking its own target market
assessment in respect of the New Ordinary Shares and determining
appropriate distribution channels.
Certain statements in this announcement may be forward-looking.
Although the Company believes that the expectations reflected in
these forward looking statements are reasonable, it can give no
assurance or guarantee that these expectations will prove to have
been correct. Because these statements involve risks and
uncertainties, actual results may differ materially from those
expressed or implied by these forward looking statements.
Background to and reasons for the Fundraising
Background
genedrive has continued to make progress in the
commercialisation and development of its range of near patient
molecular diagnostics products. The Company has continued to
utilise its cash balances in accordance with the Board's
expectations and therefore requires additional capital in order to
execute on its business plan. The Directors are focused on
delivering sustainable revenue growth and continuing to advance the
Company's portfolio of additional tests which, if successful, are
expected to increase shareholder value and evidence the strategic
value of the Company's diagnostic technologies more broadly. The
Company is therefore pleased to confirm further details on the
Fundraising which has been cornerstoned by BGF.
BGF
BGF is the UK and Ireland's most active investor in small and
medium sized companies. The Company has entered into the BGF
Subscription Agreement for the subscription by BGF and issue by the
Company of the Loan Notes. The BGF Subscription Agreement, and the
obligations of BGF to subscribe for the Loan Notes is subject to a
number of conditions, including, inter alia, the issue of the
Circular, the passing of the Resolutions, the Placing Agreement
having become unconditional in all respects and BGF participating
in the Placing. On the assumption that the Resolutions are passed
at the General Meeting and Admission occurs on 10 December 2018,
the Company expects the conditions to be satisfied and the Loan
Notes to be issued on or around 10 December 2018.
The proposed terms of the Loan Notes include a coupon of 7%
(with a higher default rate) which will be rolled up for the first
three years and become payable on 31 December 2021 and the
principal amount of the Loan Notes will be convertible at 125% of
the Placing Price equating to 28.75 pence per Ordinary Share. The
Loan Notes cannot be converted within the first six months of being
issued and thereafter can be converted at BGF's option. The
conversion price will be adjusted downwards in certain
circumstances (subject to certain exceptions), including if the
Company issues new Ordinary Shares at less than 80% of the
prevailing conversion price. The Loan Notes will mature on 30 June
2025 when they will be redeemed at par together with any unpaid
interest if not previously converted. Accrued interest will not be
converted into Ordinary Shares and therefore requires to be paid in
cash on 31 December 2021. In the event of default, the principal on
the notes together with unpaid interest shall be repayable by the
Company on demand. The Loan Notes can be redeemed early at the
request of the Company on payment of an early redemption fee equal
to 48 months interest (if prior to the third anniversary of the
issue of the Loan Notes) or 12 months interest if redeemed after
the third anniversary of the issue of the Loan Notes. The Directors
believe that the terms of the Loan Notes (together with the funds
raised through the Placing) provide the Company with the cash
runway and financial flexibility to execute the business plan and
ultimately evidence the strategic value of the Company's diagnostic
technologies more broadly.
BGF has also agreed (conditional upon, amongst other things, the
BGF Subscription Agreement not being terminated for any reason) to
subscribe for new Ordinary Shares in the Placing with an aggregate
value of GBP1.0 million and has indicated an intention to subscribe
for 4,347,826 Placing Shares, which would represent 28.6 per cent.
of the Placing Shares. On Admission, the issue of these Placing
Shares to BGF would amount to 12.8% of the Enlarged Share
Capital.
The maximum number of shares to be issued to BGF on conversion
of the Loan Notes, when aggregated with the Ordinary Shares held by
BGF and persons acting in concert with BGF, is capped at 29.9% of
the issued share capital of the Company.
Certain warranties have been granted by the Company and the
Executive Directors to BGF, certain matters require the prior
consent of BGF and certain information is required to be provided
to BGF under the terms of the BGF Subscription Agreement.
Genedrive Diagnostics Limited will grant a guarantee of the
Company's obligations under the Loan Note Instrument and this is
subject to, and payments under the BGF Loan Notes and GHIF Bond are
regulated by, the Intercreditor Deed so that all the payments are
made in proportion to the amounts outstanding to BGF and GHIF.
GHIF Convertible Bond
The Company has, in issue, a five year $8.0 million convertible
bond with GHIF. Following the Company and GHIF entering into a Deed
of Amendment and Restatement in June 2016, the principal terms of
the Bond were amended and the full details are set out in Note 18
to the Company's 2017 Report and Accounts. The Company has entered
into the Second Deed of Amendment and Restatement. Subject to
completion of the Placing and issue of Loan Notes, GHIF and the
Company have agreed to further amend the terms of the GHIF Bond, by
way of the Second Deed of Amendment and Restatement, as
follows:
i) Maturity date to be extended from July 2021 to December 2023;
ii) The roll up of interest payments will be extended from January 2019 to January 2022;
iii) The strike price of the first $2 million of the GHIF Bond
will be reduced from 150p to 28.75p, being a 25% premium to the
Placing Price and the same conversion price as the Loan Notes;
iv) The strike price of the remaining $6 million of the GHIF
Bond will be reduced from 489p to 150p; and
v) The rolled up interest on the first tranche of $2million of
the GHIF Bond would be converted at 28.75p per share and the
remaining tranche of $6million of the GHIF Bond would be converted
at 150p per Ordinary Share.
The Directors believe that the terms of the Second Deed of
Amendment and Restatement provide the Company with additional
financial flexibility to execute the business plan and ultimately
evidence the strategic value of the Company's diagnostic
technologies more broadly.
The maximum number of Ordinary Shares to be issued to GHIF on
conversion of the GHIF Bond is 7,100,000. Additional changes have
also been made to reflect the Company entering into the Loan Note
Instrument and issuing the Loan Notes to BGF and to regulate the
ranking of payments under the GHIF Bond and Loan Note Instrument.
Following the completion of the Placing and anticipated admission
of the Placing Shares and such number of Broker Option Shares as
may be subscribed for on 10 December 2018, the Company expects the
Second Deed of Amendment and Restatement to become unconditional on
10 December 2018.
Visible Genomics Limited
The Company has entered into a Fifth Deed of Amendment in
relation to the Visible Genomics SPA. Note 17 of the Company's 2017
Report and Accounts details the deferred consideration potentially
due to the vendor of VGL of an aggregate value of GBP1.25 million
to be satisfied by the issue of new Ordinary Shares upon the
achievement of certain milestones with one such milestone being
connected to the revenues the Company earns from the Genedrive(R)
device and assays. As the revenues the Company earns from the
Genedrive(R) device and assays continue to grow, this milestone is
expected to be achieved. When it is achieved the Company would be
obliged to issue such number of new Ordinary Shares, at the
relevant market price at that time, as have a value of GBP1.25
million to the former owner of VGL. The issue of this number of new
Ordinary Shares, if at the Placing Price, would equate to around
28.9% of the Company's current issued share capital (before
completion of the Fundraising) and therefore Shareholders would
experience significant dilution of their current shareholdings.
Subject to completion of the Fundraising, and certain other
obligations, the Company and the former owner of VGL agreed to
enter into the Fifth Deed of Amendment in order to reduce the
number of Ordinary Shares and to provide an element of the
consideration in cash to the shareholder of VGL. The Fifth Deed of
Amendment varies the remaining deferred consideration to (i) the
payment of GBP300,000 in cash on the 20th Business Day following
Admission, (ii) the allotment and issue of such number of new
Ordinary Shares, at the Placing Price as have a value of GBP200,000
with such Ordinary Shares (which will equate to 869,565 new
Ordinary Shares) being issued on the first anniversary of the date
of Admission and (iii) the allotment and issue of 500,000 new
Ordinary Shares on the third anniversary of the date of Admission.
Such Ordinary Shares to be issued on the first anniversary of
Admission will be subject to an orderly marketing arrangement and
represent 2.56% of the Company's Enlarged Share Capital. The
500,000 Ordinary Shares to be issued on the third anniversary of
Admission would be subject to a 24 month lock-in and represent
1.47% of the Company's Enlarged Share Capital. The changes
reflected in the Fifth Deed of Amendment would also effectively
reduce the overall outstanding consideration payable by the
Company. The changes to the Visible Genomics SPA set out in the
Fifth Deed of Amendment are conditional on, inter alia, the
announcement of the Placing, a minimum raise (before expenses)
under the Placing of GBP3.5 million and conclusion of the Placing
and Admission of the Ordinary Shares to trading by no later than 20
December 2018. In the event that less than GBP3.5 million is raised
pursuant to the Placing, the Company has, in its absolute
discretion, the rights to waive the conditions and continue to
complete the payment of deferred consideration on the amended
terms. Shareholders should note that in the event that the Placing
is not completed and other conditions satisfied by 20 December 2018
then, based on the Company's share price of 23 pence on the day
before the announcement of the Fundraising, the Company would be
required to issue around 5.4 million new Ordinary Shares in the
Company to the former owner of Visible Genomics.
On the basis of the Placing raising the minimum of GBP3.5
million and on the assumption the Resolutions are passed by
shareholders at the General Meeting, the changes to the Visible
Genomics SPA set out in the Fifth Deed of Amendment will come into
effect.
The Market
Genedrive(R) HCV-ID Assay
The Directors continue to see the growing Hepatitis C (HCV)
testing market as a very attractive opportunity for the Company,
driven in part by the Genedrive(R) HCV-ID Kit being the first
approved and the first to market point-of-need molecular test in
low and middle-income countries ("LMICs"), which account for 72% of
persons living with HCV. Of an estimated 50 million people in LMICs
infected with HCV, fewer than 20% have been diagnosed and, in 2015,
7.4% of those diagnosed with HCV infection had started treatment,
presenting a significant opportunity in the market. The Company has
been working with its distribution partners and is very encouraged
by the active level of engagement and promotion in this early
commercial phase, and believes that the Company will be able to
generate attractive revenues from this opportunity over time.
The Company made its first commercial shipments of the
Genedrive(R) HCV-ID Kit in March 2018 and since then the Company's
distribution partner, Sysmex, has purchased approximately 50
Genedrive units and 1,600 accompanying assays and has continued to
support registrations and engage with regulatory authorities and
key opinion leaders. The divestment of the Company's Services
division (including the right to use the name "Epistem") earlier in
2018 has resulted in some delays to the registration process as it
was required to change the registration name from Epistem Ltd to
Genedrive Diagnostics Ltd. The Company is currently progressing
registration and import licenses with the support of its
distribution partners targeting approximately 30 countries by the
end of the financial year ending 30 June 2019. Three registrations
are expected by the end of the calendar year 2018. Generally, post
completion of registration processes in a particular country it is
expected that product and assay sales can commence between one
month and twelve months later.
The Company applied for the Genedrive(R) HCV-ID Kit to be added
to the World Health Organization (WHO) list of pre-qualified In
Vitro Diagnostics in August 2018 which, if successful, would result
in the product being eligible for UN and other procurement tenders.
The Company believes, if it is successful, it will be the first
point-of-need molecular HCV test to receive this WHO endorsement,
which would be expected to further drive and accelerate the
commercial availability of the assay. The company has been granted
an accelerated review process, and so a decision is expected in the
next 6-12 months.
Finally, the Company is targeting a field launch of Genedrive(R)
Connect, an android-based mobile app, providing wireless data
management to a single Genedrive(R) device or a larger network
installation. Phase 1 release is being targeted for selected
distribution in Q4 FY2019 and in field launch in early FY2020. The
Directors believe added data management flexibility and results
transmission could help drive wider adoption.
The Company is pursuing a number of other initiatives to drive
further longer-term commercialisation opportunities for the HCV
assay including seeking additional distribution partners in
territories including South America as well as engaging with
pharmaceutical companies to support the availability of Direct
Acting Antivirals for HCV treatment.
Antibiotic-Induced Hearing Loss ("AIHL")
In June 2018 the Company announced the receipt of a
multi-partner grant award from the UK National Institute for Health
Research's Invention for Innovation programme with a total value of
approximately GBP900,000, of which GBP550,000 was received by the
Company. The grant was for the development and implementation of a
point-of-care pharmacogenetic test designed to identify a genetic
predisposition which can cause antibiotic-related hearing loss in
infants.
Due to this identified genetic predisposition, certain
individuals can develop irreversible hearing loss when exposed to
gentamicin, a widely used antibiotic to treat several types of
bacterial infections. In the UK, approximately 90,000 babies per
year are admitted to intensive care units ("ICU"). Antibiotic
treatment should start within the first hour after admission to an
ICU, but current lab-based genetic tests are not able to return
actionable results within that timeframe leading to gentamicin
being prescribed in the absence of any genetic information. A
Genedrive(R) test is targeted to allow test results to be available
within an hour, allowing alternative antibiotics to be prescribed
for infants where the genetic predisposition is identified and
therefore avoiding the potential life changing adverse reaction to
gentamicin.
A prototype proof of principle non-invasive assay has already
been established and verification of the test and assay is planned
to be complete by June 2019 with prospective studies to commence in
hospitals in Manchester and Liverpool, around the same time or
ahead of planned CE certification in Q1 of calendar year 2020.
Commercialisation is expected to commence during calendar year
2020.
The Directors estimate that the size of the UK market is around
GBP3.5 million per annum. With the cost of bilateral cochlear
implants exceeding GBP50,000 per individual the Company believes
that its AIHL test will provide health economic benefits to the
NHS. The Directors are considering both a distributor led
commercialisation model as well as direct sales via a niche sales
force. At the appropriate time the Company would look to find ways
to extend the potential for sales of the Genedrive(R) instrument
and this assay outside the UK. The Directors estimate that the size
of the Western market (i.e. non LMIC) is approximately GBP35
million per annum.
Tuberculosis ("mTB")
In February 2018, the Company announced it had been awarded
GBP1.1 million in grant funding by Innovate UK for product
development of its Genedrive(R) mTB/RIF test. The test is designed
to diagnose patients with mTB as well as to provide clinicians with
information on their drug resistance status. The grant is part
funding the development of an automated high-sensitivity bacterial
sample preparation module for the Genedrive(R) instrument, which
would replace the manual process that manifested storage and
performance issues ahead of withdrawing the previous test from
Indian market in 2017.
The Directors continue to believe that the mTB market is an
attractive one for the Company to seek to penetrate, with the WHO
estimating over 10 million new cases each year (based on 6.2
million reported or diagnosed cases), 1.6 million deaths per annum
from the disease and 600,000 new cases per annum being drug
resistant. The Directors estimate over eight million tests per year
are needed to bridge the gap between incidence and effective
treatment with a drug resistance test. The testing market is well
defined and the Company has the potential to move diagnosis closer
to the real point of care, which could be transformative for the
market. The Directors are targeting commercial revenues using
existing distributors in the financial year ending 30 June 2021
with investment to be targeted on sample preparation and
manufacturing costs reduction.
US Department of Defense ("US DoD")
The Company is pleased to announce that it has received from the
US DoD a new order of $0.9 million for 74 Genedrive instruments and
associated assays. Subject to manufacturing and shipping, this
order is expected to be recognised as revenue in the first half of
the current financial year. This constitutes the first order placed
by the US DoD since the end of the $6.7 million development
contract which has resulted in the sale of around 185 Genedrive(R)
units since 2014. The Company continues to have limited visibility
of future potential demand from the US DoD but this latest order,
whilst not incremental to the Board's view for the sales outlook
for the current financial year as a whole, follows on from the
final testing order of $0.4 million received in the six months to
31 December 2017. The Company is encouraged by this recent order
and believes there is potential for further engagement with the US
DoD in 2019.
Current Trading
Since publication of the trading update on 13 July 2018, the
Company has continued to trade in line with the Board's
expectations. Revenues for the remainder of the current financial
year will comprise the US DoD order detailed above, approximately
GBP1.5 million of grant funding and revenue from further HCV
sales.
The US DoD order and HCV sales further the Company's transition
to a commercial stage enterprise as the revenue mix shifts from
predominantly development income to unit and assay sales while also
attracting grant income. As of 30 June 2018, genedrive had
generated a total of GBP8.4 million of revenues from its
Genedrive(R) diagnostics platform.
Unaudited cash balances at 30 September 2018 were GBP2.0 million
compared to GBP3.5 million as at 30 June 2018 and based on its
current financial plans (and excluding the Fundraising) the
Directors estimate that the Company has cash resources through to
Q1/Q2 calendar year 2019.
Final Results and Report and Accounts to 30 June 2018
The Company has today issued its unaudited preliminary results
for the year ended 30 June 2018.
The Company expects to publish its report and accounts for the
year ended 30 June 2018 shortly, which will include an unqualified
audit opinion with a matter of emphasis on going concern. Subject
to the report and accounts being published on a going concern basis
(which the Placing and Loan Note proceeds is expected to achieve),
the Company expects to be able to claim a R&D tax credit worth
approximately GBP980,000 which has not been included in the
Directors' estimate as to the Company's current cash runway
detailed in the above paragraph.
Future News Flow
In addition to the above update, the Company expects to announce
expansion of its distributor network beyond that of EMEA, Asia and
India in the next 6 months along with registrations achieved for
its HCV assay, commercial traction and sales of HCV.
Working to the WHO guidelines for pre-qualification, the Company
would expect to announce successful pre-qualification status within
6-12 months.
Within the next 6-12 months the Company also expects to be able
to publish the results of two 'intended setting' studies in Georgia
and Cameroon. Both studies are sponsored by FIND and are expected
to provide validation of the Genedrive(R) HCV-ID Kit assay in small
clinic settings.
The Company's three to four year objective is to have all three
assays on market with material revenues, significant market
potential and a fully established commercial footprint. Successful
execution of this plan is expected to increase shareholder value
and evidence the strategic value of the Company's diagnostic
technologies more broadly.
Details of the Placing and Broker Option
Structure
The Directors gave careful consideration as to the structure of
the Fundraising and concluded that the Placing and Broker Option
was the most suitable option available to the Company and its
Shareholders at this time.
The Directors considered that the accelerated bookbuilding
process enabled the Placing to be carried out quickly and at the
most suitable price for the Company. The Placing was made available
to certain eligible existing institutional shareholders and certain
new institutional investors. The Company understands that BGF has
indicated an intention to subscribe for 4,347,826 Placing Shares
(conditional upon, amongst other things, the BGF Subscription
Agreement not being terminated for any reason).
Certain Directors namely David Budd, Matthew Fowler, Ian Gilham,
Tom Lindsay and Chris Yates have indicated an intention to
subscribe for, in aggregate, Placing Shares with an aggregate value
of GBP100,000 in the Placing. The Company has also granted to the
Joint Bookrunners the Broker Option to raise up to a further
GBP500,000 through the issue of up to 2,173,913 Broker Option
Shares at the Placing Price in order to allow existing and other
investors to participate in the Fundraising.
The Broker Option may be exercised by the Joint Bookrunners
between 8.00 a.m. on 16 November 2018 and 16.30 p.m. on 6 December
2018 and, if exercised in full, shall require the Company to issue
up to a further 2,173,913 Broker Option Shares. The exercise of the
Broker Option shall be at the discretion of Peel Hunt and Stanford
Capital (with the agreement of the Company) and the Joint
Bookrunners are under no obligation to exercise the Broker
Option.
The New Ordinary Shares are not being made available to the
public and none of the New Ordinary Shares are being offered or
sold in any jurisdiction where it would be unlawful to do so.
The allotment and issue of the Placing Shares (and any Broker
Option Shares) is conditional on, amongst other things, the
approval by Shareholders of the Resolutions required for the
Directors to allot the New Ordinary Shares and for statutory
pre-emption rights to be disapplied in respect of such allotments.
The Resolutions contain the relevant approvals required for the
Fundraising. The Resolutions also contain the relevant authorities
required for the Directors to allot Ordinary Shares on conversion
of the Loan Notes and the adjusted number of Ordinary Shares to be
issued in respect of the GHIF Convertible Bond and for the
statutory pre-emption rights to be disapplied in respect of such
allotments. The Directors authority to allot shares to the
shareholder of VGL has also been updated to reflect the Visible
Genomics SPA as proposed to be amended by the Fifth Deed of
Amendment.
Reasons for the Fundraising and Use of Proceeds
The Placing and Loan Note proceeds alongside the Company's
existing cash and the expected R&D tax claim are intended
to:
(i) support the working capital needs of the Company in relation
to the launch of the Genedrive(R) HCV-ID Kit and support projects
to help enhance the gross margin of the assay;
(ii) fund the Company's development programmes relating to AIHL
and mTB assays, as well as enhance the Genedrive(R) system in terms
of data, data sharing and connectivity; and
(iii) fund the GBP300,000 cash payment to VGL as part of an
existing deferred consideration liability as varied by the Fifth
Deed of Amendment.
Any monies raised via the Broker Option are expected to be
allocated to items (i) and (ii) above.
Principal Terms of the Placing
The Joint Bookrunners as agents for the Company have severally
agreed to use their respective reasonable endeavours to procure
Placees by way of an accelerated Bookbuild process on the terms of
the Placing Agreement (further details of which are set out in the
Appendix to this announcement). Placees are required to subscribe
for the New Ordinary Shares on the basis of the Terms and
Conditions of the Placing set out in the Appendix to this
announcement. The Placing and the Broker Option is not being
underwritten.
The issue of the Placing Shares is intended to raise GBP3.5
million (before expenses). If the Broker Option is exercised in
full, the Company would raise a further GBP0.5 million by the issue
of the Broker Option Shares. It is expected that the net proceeds
of the Placing and any Broker Option Shares subscribed for will be
received by the Company by 12 December 2018.
Under the Placing Agreement, the Company has agreed to pay to
Peel Hunt and Stanford Capital commission based on the aggregate
value of the New Ordinary Shares placed at the Placing Price and
the costs and expenses incurred in relation to the Placing together
with any applicable VAT.
No commissions will be paid to Placees or by Placees in respect
of any New Ordinary Shares.
Application will be made to the London Stock Exchange for the
admission of the New Ordinary Shares (including the Broker Option
Shares (if any)) to trading on AIM. Subject to, amongst other
things, Shareholder approval of the Resolutions at the General
Meeting, it is expected that dealings will commence, at 8:00 a.m.
on 10 December 2018.
EIS / VCT
The following information is based upon the laws and practice
currently in force in the UK and may not apply to persons who do
not hold Ordinary Shares as investments.
The Company has recently received assurance from HMRC that the
ordinary shares in the Company represent a qualifying investment
for a VCT and are capable of qualifying for EIS tax reliefs.
Accordingly, the New Ordinary Shares will rank as "eligible shares"
and will be capable of being a "qualifying holding" for the
purposes of investment by VCTs and that the Company can issue EIS 3
"compliance certificates" for the purposes of EIS.
Shareholders and investors who are in any doubt as to their tax
position or who are subject to tax in jurisdictions other than the
UK are strongly advised to consult their own independent financial
adviser immediately.
The information below is intended only as a general guide to the
current tax position under UK taxation law and is not intended to
be exhaustive. Shareholders and investors who are in any doubt as
to their tax position or who are subject to a tax jurisdiction,
other than the UK, are strongly advised to consult their
professional advisers. The Company is a knowledge intensive company
and knowledge intensive companies can raise up to GBP10 million
under the combined VCT, EIS, SEIS, social investment tax relief or
any other state aid risk capital investment in any 12 month
period.
EIS
The Company intends to operate so that it qualifies for the
taxation advantages offered under EIS. The main advantages are as
follows:
-- Individuals can claim a tax credit reduction of 30% of the
amount invested in the Company against their UK income tax
liability, provided they have a sufficient tax liability to reclaim
this amount, thus reducing the effective cost of their investment
to 70 pence for each GBP1 invested. However, there is an EIS
subscription limit of GBP1 million in each tax year, or GBP2
million in each tax year providing at least GBP1 million is
invested into shares in a company which qualifies as a knowledge
intensive company, and, to retain the relief, the EIS Shares must
be held for at least three years.
-- UK investors (individuals or certain trustees) may defer a
chargeable gain by investing the amount of the gain in the Company.
There is no limit to the level of investment for this purpose and,
therefore, to the amount of gain which may be deferred in this way.
Note that the deferred gain will come back into charge when the EIS
Shares are disposed of or if the Company ceases to qualify as an
EIS company within the three year qualifying period.
-- There is no tax on capital gains made upon disposal after the
three year period (the "Qualifying Period") of shares in an EIS
qualifying company on which income tax relief has been given and
not withdrawn.
-- If a loss is made on disposal of the EIS Shares at any time,
the amount of the loss (after allowing for any income tax relief
initially obtained) can be set off against either the individual's
gains for the tax year in which the disposal occurs, or, if not so
used, against capital gains of a subsequent tax year, or against
the individual's net income of the tax year of the disposal or of
the previous tax year.
-- Provided a Shareholder has owned EIS Shares for at least two
years and certain conditions are met at the time of transfer, up to
100% business property relief will be available, which reduces the
inheritance tax liability on the transfer of EIS Shares to nil.
-- The amount of relief an investor may gain from an EIS
investment in the Company will depend on the investor's individual
circumstances.
Qualifying Period
In order to retain the EIS reliefs, an investor must hold their
shares for at least three years. A sale or other disposal (other
than an inter-spousal gift or a transfer on death) will result in
any income tax relief that has been claimed being clawed back by
HMRC. Additionally, any capital gains deferred will come back into
charge and the capital gains tax exemption will be lost. It is the
investor's responsibility to disclose a disposal to HMRC.
An individual can only be eligible for EIS relief on the
purchase of shares if all shares held by that investor are either
risk-based shares (that is, shares for which an EIS 3 compliance
statement has been or will be issued) or the original subscriber
shares which the investor has continued to hold.
Additionally, if the Company ceases to meet certain qualifying
conditions within three years from the date of the share issue, the
tax reliefs will be lost. This will be shown as the "Termination
Date" on the EIS3 certificate which the Company will issue to
investors following formal approval of the share issue by HMRC.
Advance Assurance of EIS Status
In order for investors to claim EIS reliefs relating to their
shares in the Company, the Company has to meet a number of rules
regarding the kind of company it is, the amount of money it can
raise, how and when that money must be employed for the purposes of
the trade, and the trading activities carried on. The Company must
satisfy HMRC that it meets these requirements and is therefore a
qualifying company. Although the Company currently expects to
satisfy the relevant conditions for EIS investment, neither the
Directors nor the Company gives any warranty or undertaking that
relief will be available in respect of any investment in the EIS
Shares.
VCT
The status of the New Ordinary Shares as a qualifying holding
for VCTs will be conditional, inter alia, upon the Company
continuing to satisfy the relevant requirements.
Although the Company currently expects to satisfy the relevant
conditions for VCT investment, neither the Directors nor the
Company gives any warranty or undertaking that an investment in New
Ordinary Shares by a VCT will be a qualifying holding.
As the rules governing EIS and VCT reliefs are complex and
interrelated with other legislation, if Shareholders and investors
are in any doubt as to their tax position, require more detailed
information than the general outline above, or are subject to tax
in a jurisdiction other than the United Kingdom, they should
consult their professional adviser.
Conditionality
The Placing is conditional upon the Placing Agreement becoming
unconditional and not having been terminated in accordance with its
terms. The Placing Agreement is conditional, amongst other things,
upon the following:
-- the passing, without amendment, of the Resolutions at the General Meeting;
-- none of the warranties contained in the Placing Agreement, in the opinion of the Joint Bookrunners (acting
jointly and in good faith), being untrue or inaccurate or misleading at the date of the Placing Agreement or
becoming untrue or inaccurate or misleading at any time between such date and Admission by reference to the facts
and circumstances from time to time subsisting;
-- the Company having complied with all of its obligations under the Placing Agreement which fall to be performed or
satisfied on or prior to Admission;
-- the BGF Subscription Agreement: (a) having been duly executed by all the parties thereto, and not having been
terminated or rescinded prior to Admission; and (b) becoming unconditional in all respects and having been
completed in escrow (subject to the sole condition to release from escrow being any condition equivalent to
Admission occurring as described below);
-- each of the Fifth Deed of Variation relating to the Visible Genomics SPA, and the Second Amendment and
Restatement Agreement relating to the GHIF Bond: (a) having been duly executed by all the parties thereto, and
not having been terminated or rescinded prior to Admission; and (b) becoming unconditional in all respects (save
for any condition equivalent to Admission occurring as described below, or which otherwise will be satisfied on
Admission); and
-- Admission occurring by no later than 8.00 a.m. on 10 December 2018 (or such later time and/or date as may be
agreed between the Company and Peel Hunt, being no later than 8.00 a.m. on 31 December 2018).
If the conditions set out above are not satisfied or waived
(where capable of waiver), the Fundraising will lapse and the New
Ordinary Shares will not be allotted and issued and no monies will
be received by the Company from investors in respect of the New
Ordinary Shares. In addition the BGF Subscription Agreement will
not become unconditional and the Loan Notes will not be issued.
Effect of the Placing
The New Ordinary Shares will, following Admission, rank pari
passu in all respects with the Existing Ordinary Shares in issue at
the date of this announcement and will carry the right to receive
all dividends and distributions declared, made or paid on or in
respect of the Ordinary Shares after Admission.
The issue of the Placing Shares, upon completion of the Placing
pursuant to the terms of the Placing Agreement, will represent
approximately 44.8 per cent. of the Enlarged Share Capital assuming
no take-up of the Broker Option.
The Placing Agreement
Pursuant to the terms of the Placing Agreement, Peel Hunt and
Stanford Capital, as agents for the Company, have agreed to use
their reasonable endeavours to procure Placees to take up the
Placing Shares on the terms and subject to the conditions set out
therein, at the Placing Price. The Placing Agreement is conditional
upon, amongst other things, the conditions set out above (please
see 'Conditionality' noted above).
The Placing Agreement contains customary warranties given by the
Company in favour of Peel Hunt and Stanford Capital in relation to,
amongst other things, the accuracy of the information in this
announcement and other matters relating to the Group and its
business. In addition, the Company has agreed to indemnify Peel
Hunt (and its affiliates) and Stanford Capital in relation to
certain liabilities which they may incur in respect of the
Placing.
Peel Hunt and Stanford Capital each have the right to terminate
their obligations under the Placing Agreement in certain
circumstances prior to Admission. In particular, in the event of
breach of the warranties or a material adverse change or if the
Placing Agreement does not become unconditional. Where both Peel
Hunt and Stanford Capital terminate their obligations under the
Placing Agreement, the Placing Agreement will cease and
terminate.
General Meeting
The Directors do not currently have authority to allot all of
the New Ordinary Shares and, accordingly, the Board is seeking
approval of Shareholders, at the General Meeting, to allot the New
Ordinary Shares, the Ordinary Shares to be issued on conversion of
the Loan Notes, the GHIF Bond and the VGL Consideration Shares.
The General Meeting of the Company is to be held at 12:00 noon
on 7 December 2018 at The Incubator Building, 48 Grafton Street,
Manchester, M13 9XX. The General Meeting is being held for the
purpose of considering and, if thought fit, passing the Resolutions
in order to approve, inter alia, the authorities required to allot
and issue the New Ordinary Shares.
A summary and explanation of the Resolutions is set out
below.
Resolution 1: Authority to allot New Ordinary Shares (to be
passed as an ordinary resolution)
Conditional on the passing of Resolution 2, Resolution 3 and
Resolution 4, this ordinary resolution will grant the Directors
authority to allot up to 17,391,304 New Ordinary Shares for the
purposes of the Placing and the Broker Option. The authority given
by this Resolution will expire 90 days after the date of the
passing of the Resolution. This authority will be in addition to
the authorities given to the Directors at the annual general
meeting of the Company which took place on 29 November 2017.
Resolution 2: Disapplication of pre-emption rights in respect of
the Placing and Broker Option (to be passed as a special
resolution)
Conditional on the passing of Resolution 1, Resolution 3 and
Resolution 4, this special resolution disapplies statutory
pre-emption rights in respect of the allotment up to 17,391,304 New
Ordinary Shares to be allotted pursuant to Resolution 1 in
connection with the Placing and Broker Option. The authority given
by this Resolution will expire 90 days after the date of the
passing of the Resolution. This authority will be in addition to
the authorities given to the Directors at the annual general
meeting of the Company which took place on 29 November 2017.
Resolution 3: Authority to allot shares in relation to BGF, GHIF
and Visible Genomics SPA (to be passed as an ordinary
resolution)
Conditional on the passing of Resolution 1, Resolution 2 and
Resolution 4, this ordinary resolution will grant the Directors
authority to allot
(a) up to 8,695,652 Ordinary Shares on conversion of the Loan Notes;
(b) up to 7,100,000 Ordinary Shares on conversion of the GHIF Bond; and
(c) 1,369,565 Ordinary Shares to the seller of Visible Genomics
to reflect the amended terms of the Visible Genomics SPA.
This authority will be in addition to the authorities given to
the Directors at the annual general meeting of the Company which
took place on 29 November 2017.
Resolution 4: Disapplication of pre-emption rights in relation
to BGF and GHIF (to be passed as a special resolution)
Conditional on the passing of Resolution 1, Resolution 2 and
Resolution 3, this special resolution disapplies statutory
pre-emption rights in respect of the allotment of Ordinary Shares
for cash up to 15,795,652 Ordinary Shares which represents the
maximum number of Ordinary Shares which may be issued in connection
with conversion of the Loan Notes and the GHIF Bond.
This authority will be in addition to the authorities given to
the Directors at the annual general meeting of the Company which
took place on 29 November 2017.
Recommendation
The Directors consider that the Fundraising and the passing of
the Resolutions are in the best interests of the Company and its
Shareholders as a whole. Accordingly, the Directors unanimously
recommend that Shareholders vote in favour of all of the
Resolutions, as they intend to do in respect of their beneficial
holdings of an aggregate of 163,065 Existing Ordinary Shares,
representing approximately 0.87 per cent. of the Existing Ordinary
Shares.
The Fundraising is conditional, inter alia, upon the passing of
the Resolutions at the General Meeting. Shareholders should be
aware that if the Resolutions are not passed at the General
Meeting, the Fundraising will not proceed.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Announcement of the Placing, the Loan 16 November 2018
Note subscription and the Broker Option
Posting of the Circular and Form of Proxy 19 November 2018
Latest time and date for receipt of Forms 12 noon on 5 December
of Proxy for the General Meeting 2018
General Meeting 12 noon on 7 December
2018
Admission of the New Ordinary Shares to 8 a.m. on 10 December
trading on AIM 2018
New Ordinary Shares to be held in uncertificated 10 December 2018
form credited to CREST stock accounts
Expected date of dispatch of definitive 17 December 2018
share certificates for New Ordinary Shares
to be held in certificated form
Notes
1. Each of the times and dates set out in the above timetable
and mentioned in this announcement is subject to change by the
Company (with the agreement of the Joint Bookrunners), in which
event details of the new times and dates will be notified to London
Stock Exchange plc and the Company will make an appropriate
announcement to a Regulatory Information Service.
2. References to times in this announcement are to London times unless otherwise stated.
DEFINITIONS
The following definitions apply throughout this announcement,
unless the context requires otherwise:
"Act" the Companies Act 2006, as amended
"Admission" admission of the New Ordinary
Shares (including such number
of Broker Option Shares as may
be subscribed for) to trading
on AIM becoming effective in
accordance with the AIM Rules
"AIM" the market of that name operated
by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies
and/or the AIM Rules for Nominated
Advisers (as the context may
require)
"AIM Rules for Companies" the rules of AIM as set out
in the publication entitled
"AIM Rules for Companies" published
by the London Stock Exchange
from time to time
"AIM Rules for Nominated Advisers" the rules of AIM as set out
in the publication entitled
"AIM Rules for Nominated Advisers"
published by the London Stock
Exchange from time to time
"Announcement" this RIS announcement, including
the Appendix
"Appendix" the appendix to this Announcement
setting out the terms and conditions
of the Placing
"BGF" BGF Investments LP (a limited
partnership with registered
number LP14928), acting by its
manager BGF Investment Management
Limited (company number 10608481)
"BGF Subscription Agreement" the conditional subscription
agreement entered into among
(i) the Company (ii) the Executive
Directors, (iii) BGF Investments
LP and (iv) BGF Investment Management
Limited dated 15 November 2018
in respect of the proposed subscription
by BGF for the convertible Loan
Notes
"Board" or "Directors" the board of directors of the
Company
"Bookbuild" the accelerated bookbuild process
conducted in relation to the
Placing which established the
demand for the Placing Shares
to be issued pursuant to the
Placing at the Placing Price
"Broker Option" the option granted by the Company
to Peel Hunt and Stanford Capital
to procure the subscription
of the Broker Option Shares,
pursuant to the terms of the
Placing Agreement
"Broker Option Shares" the up to 2,173,913 new Ordinary
Shares to be subscribed for
by existing and other investors
at the Placing Price, to the
extent the Broker Option is
exercised under the terms of
the Placing Agreement
"Business Day" any day (excluding Saturdays
and Sundays and public holidays
in England and Wales) on which
banks are open in London for
normal banking business and
the London Stock Exchange is
open for trading
"certificated" or "in certificated an Ordinary Share or other security
form" recorded on a company's share
register as being held in certificated
form (that is not in CREST)
"Circular" this circular of the Company
giving (amongst other things)
details of the Placing, the
convertible Loan Note subscription
and also incorporating the Notice
of General Meeting
"Company" or "genedrive" genedrive plc, a public limited
company incorporated in England
and Wales under registered number
06108621
"CREST" the relevant system (as defined
in the Regulations) which enables
title to units of relevant securities
(as defined in the Regulations)
to be evidenced and transferred
without a written instrument
and in respect of which Euroclear
is the Operator (as defined
in the CREST Regulations)
"CREST Manual" the compendium of documents
entitled "CREST Manual" published
by Euroclear from time to time
and comprising the CREST Reference
Manual, the CREST Central Counterparty
Service Manual, the CREST International
Manual, the CREST Rules (including
CREST Rule 8), the CREST CCSS
Operating Manual and the CREST
Glossary of Terms
"CREST member" a person who has been admitted
to CREST as a system-member
(as defined in the CREST Regulations)
"CREST participant" a person who is, in relation
to CREST, a system-participant
(as defined in the CREST regulations)
"CREST Regulations" or "Regulations" the Uncertificated Securities
Regulations 2001 (SI 2001/3755)
(as amended from time to time)
"CREST sponsor" a CREST participant admitted
to CREST as a CREST sponsor
"CREST sponsored member" a CREST member admitted to CREST
as a sponsored member
"EIS" Enterprise Investment Scheme
"Enlarged Share Capital" the entire issued share capital
of the Company following Admission,
assuming no other Ordinary Shares
are issued between the date
of this announcement and Admission
and assuming the 15,217,391
Placing Shares are issued but
no subscription for new Ordinary
Shares under the Broker Option
"EU" the European Union
"Euroclear" Euroclear UK & Ireland Limited,
the Operator of CREST (as defined
in CREST Regulations)
"Executive Directors" means David Budd and Matthew
Fowler
"Existing Ordinary Shares" the 18,783,115 Ordinary Shares
in issue on 15 November 2018,
(the latest practicable date
before issue of this announcement)
all of which are admitted to
trading on AIM
"Fifth Deed of Amendment" the conditional fifth deed of
amendment entered into between
the Company and Dr Ben Cobb
to vary the terms of the Visible
Genomics SPA and which also
terminates and replaces the
Fourth Deed of Amendment
"First Amendment and Restatement the first amendment and restatement
Agreement" agreement of the GHIF Convertible
Bond entered into between the
Company and GHIF dated 23 June
2016
"Form of Proxy" the form of proxy which will
accompany the Circular for use
by Shareholders in relation
to the General Meeting
"Fourth Deed of Amendment" the conditional fourth deed
of amendment entered into between
the Company and Dr Ben Cobb
to vary the terms of the Visible
Genomics SPA
"FSMA" the Financial Services and Markets
Act 2000 (as amended)
"Fundraising" the Placing and Broker Option
and the issue of the convertible
Loan Notes pursuant to the BGF
Subscription Agreement and Loan
Note Instrument
"Genedrive(R)" the Company's point of care
instrument
"General Meeting" the general meeting of the Shareholders
of the Company to be held at
The Incubator Building, 48 Grafton
Street, Manchester, M13 9XX
at 12 noon on 7 December 2018,
convened by the Notice of General
Meeting
"GHIF" Global Health Investment Fund
I LLC, a Delaware limited liability
company, whose registered office
is at 2711 Centerville Road,
Suite 400 in the City of Willmington,
Delaware 19808 USA, a private
investment fund structured by
JP Morgan Chase & Co and the
Bill and Melinda Gates Foundation.
The fund finances the development
of drugs, vaccines, diagnostics
and other interventions against
diseases that disproportionately
burden low and middle income
countries
"GHIF Bond" the US$8million convertible
bond entered into between GHIF
and the Company pursuant to
the GHIF Bond and Collaboration
Agreement
"GHIF Bond and Collaboration the collaboration and convertible
Agreement" bond purchase agreement entered
into between the Company and
GHIF dated 21 July 2014, as
amended and restated by the
First Amendment and Restatement
Agreement and the Second Amendment
and Restatement Agreement
"Group" the Company, its subsidiaries
and subsidiary undertakings
"Intercreditor Deed" the intercreditor deed to be
entered into among the Company
BGF and GHIF in the form agreed
and pursuant to the BGF Subscription
Agreement
"Loan Notes" the GBP2,500,000 convertible
loan notes to be issued to BGF
in accordance with the Loan
Note Instrument
"Loan Note Instrument" the convertible loan note instrument
in the form agreed pursuant
to the BGF Subscription Agreement
"London Stock Exchange" London Stock Exchange plc
"New Ordinary Shares" means, together, the Placing
Shares and the Broker Option
Shares
"Notice of General Meeting" the notice of General Meeting
to be set out at the end of
the Circular
"Ordinary Shares" ordinary shares of GBP0.015
each in the capital of the Company
"Peel Hunt" Peel Hunt LLP, a Limited Liability
Partnership incorporated and
registered in England with No.
OC357088 whose registered office
is Moor House, 120 London Wall,
London EC2Y 5ET, the Company's
nominated adviser, joint bookrunner
and joint broker
"Placees" eligible institutional investors
procured by Peel Hunt and Stanford
Capital and subscribing for
Placing Shares in the Placing
"Placing" the conditional placing by Peel
Hunt and Stanford Capital (on
behalf of the Company) of 15,217,391
Placing Shares pursuant to the
Placing Agreement to raise GBP3.5
million before expenses
"Placing Agreement" the conditional placing agreement
dated 16 November 2018 relating
to the Placing and Broker Option
made between the Company, Peel
Hunt and Stanford Capital
"Placing Price" means 23 pence per Placing Share
"Placing and Loan Note Proceeds" the gross proceeds of the issue
of the Placing Shares pursuant
to the Placing and the issue
of the Loan Notes
"Placing Results Announcement" means the RIS announcement of
the results of the Placing dated
16 November 2018
"Placing Shares" the 15,217,391 Ordinary Shares
to be issued pursuant to the
Placing
"Registrars" or "Neville" Neville Limited Registrars of
Neville House, Steelpark Road,
Halesowen B62 8HD
"Regulatory Information Service" a regulatory information service
or "RIS" operated by the London Stock
Exchange as defined in the AIM
Rules for Companies
"Resolutions" the resolutions to be proposed
at the General Meeting as set
out in the Notice of General
Meeting
"Second Amendment and Restatement the second amendment and restatement
Agreement" of the GHIF Convertible Bond
and ollaboration Agreement entered
into between the Company and
GHIF dated 15 November 2018
"Shareholders" the holders of Ordinary Shares
for the time being, each individually
a "Shareholder"
"Stanford Capital" Stanford Capital Partners Limited,
incorporated and registered
in England with No 11192616
whose registered office is at
Warden House, 37 Manor Road,
Colchester, Essex, CO3 3LX,
the Company's joint bookrunner
and joint broker
"UK" or "United Kingdom" the United Kingdom of Great
Britain and Northern Ireland
"uncertificated" or "uncertificated recorded on the register of
form" members of the Company as being
held in uncertificated form
in CREST and, title to which,
by virtue of the CREST Regulations,
may be transferred by means
of CREST
"US" or "United States" the United States of America,
its territories and possessions,
any state of the United States
and the District of Columbia
"VCT" Venture Capital Trust
"VGL" or "Visible Genomics" Visible Genomics Limited which
was a company incorporated under
the Companies Acts in England
and Wales with registered number
07116987
"VGL Consideration Shares" the 869,565 Ordinary Shares
proposed to be issued to the
shareholder of VGL in accordance
with the terms of the Visible
Genomics SPA on the assumption
that the Fifth Deed of Amendment
becomes unconditional, expected
to be issued on the first anniversary
of the date of Admission and
the 500,000 Ordinary Shares
proposed to be issued to the
shareholder of VGL in accordance
with the terms of the Visible
Genomics SPA on the assumption
that the Fifth Deed of Amendment
becomes unconditional, expected
to be issued on the third anniversary
of the date of Admission
"Visible Genomics SPA" the share sale and purchase
agreement entered into by the
Company and the shareholder
of VGL and dated 28 July 2010
as amended by deeds of variation
dated 9 May 2013, 5 March 2014
and 7 September 2016 and proposed
to be amended by the Fifth Deed
of Amendment
All references in this announcement to "GBP", "pence" or "p" are
to the lawful currency of the United Kingdom and all references to
"US$" or "$" are to the lawful currency of the United States.
All references to time in this announcement are to London
APPIX
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES
ONLY.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING. THIS ANNOUNCEMENT, INCLUDING THIS APPIX AND THE TERMS AND
CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") (WHICH IS
FOR INFORMATION PURPOSES ONLY) ARE DIRECTED ONLY AT: (A) PERSONS IN
MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (THE "EEA") WHO ARE
QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF
DIRECTIVE 2003/71/EC, AS AMED FROM TIME TO TIME, INCLUDING BY
DIRECTIVE 2010/73/EC TO THE EXTENT IMPLEMENTED IN THE RELEVANT
MEMBER STATE AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE
MEASURE IN ANY MEMBER STATE (THE "PROSPECTUS DIRECTIVE")
("QUALIFIED INVESTORS"); AND (B) IN THE UNITED KINGDOM, QUALIFIED
INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN
MATTERS RELATING TO INVESTMENTS WHO FALL WITHIN ARTICLE 19(5) OF
THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION)
ORDER 2005 AS AMED (THE "ORDER") (INVESTMENT PROFESSIONALS); (II)
PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH
COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC) OF THE ORDER; OR (III)
ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL
SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON
OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS
DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS
LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH
THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND
WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT
DOES NOT ITSELF CONSTITUTE AN OFFER FOR THE SALE OR SUBSCRIPTION OF
ANY SECURITIES IN THE COMPANY.
The New Ordinary Shares have not been and will not be registered
under the US Securities Act of 1933, as amended (the "US Securities
Act") or under any securities laws of any state or other
jurisdiction of the United States and may not be offered, sold,
resold, transferred or delivered, directly or indirectly, in or
into the United States or to, or for the account or benefit of, US
persons (as defined in Regulation S under the US Securities Act
("Regulation S")) except pursuant to an applicable exemption from
the registration requirements of the US Securities Act and in
compliance with the securities laws of any state or other
jurisdiction of the United States. There will be no public offer of
the securities mentioned herein in the United States.
This announcement and the information contained herein is
restricted and is not for release, publication or distribution, in
whole or in part, directly or indirectly, in or into or from the
United States, Australia, Canada, Japan, the Republic of South
Africa or any other jurisdiction in which such release publication
or distribution would be unlawful.
Each Placee should consult with its own advisors as to legal,
tax, business and related aspects of a purchase of New Ordinary
Shares.
The distribution of this Announcement and/or the Placing and/or
the issue of the New Ordinary Shares in certain jurisdictions may
be restricted by law. No action has been taken by the Company, the
Bookrunners or any of their respective affiliates, agents
directors, officers or employees that would permit an offer of the
New Ordinary Shares or possession or distribution of this
Announcement or any other offering or publicity material relating
to such New Ordinary Shares in any jurisdiction where action for
that purpose is required. Persons into whose possession this
Announcement comes are required by the Company and the Bookrunners
to inform themselves about and to observe any such
restrictions.
This Announcement or any part of it does not constitute or form
part of any offer to issue or sell, or the solicitation of an offer
to acquire, purchase or subscribe for any securities in the United
States, Australia, Canada, Japan or the Republic of South Africa or
any other jurisdiction in which the same would be unlawful. No
public offering of the New Ordinary Shares is being made in any
such jurisdiction.
The relevant clearances have not been, nor will they be,
obtained from the securities commission of any province or
territory of Canada, no prospectus has been lodged with, or
registered by, the Australian Securities and Investments Commission
or the Japanese Ministry of Finance; the relevant clearances have
not been, and will not be, obtained for the South Africa Reserve
Bank or any other applicable body in the Republic of South Africa
in relation to the New Ordinary Shares and the New Ordinary Shares
have not been, nor will they be registered under or offered in
compliance with the securities laws of any state, province or
territory of Australia, Canada, Japan or the Republic of South
Africa. Accordingly, the New Ordinary Shares may not (unless an
exemption under the relevant securities laws is applicable) be
offered, sold, resold or delivered, directly or indirectly, in or
into Australia, Canada, Japan or the Republic of South Africa or
any other jurisdiction outside the EEA.
Persons (including without limitation, nominees and trustees)
who have a contractual right or other legal obligations to forward
a copy of this Announcement should seek appropriate advice before
taking any action.
This Announcement should be read in its entirety. In particular,
you should read and understand the information provided in the
"Important Notice" section of this Announcement.
By participating in the Bookbuild and/or the Placing, each
Placee will be deemed to have read and understood this Announcement
in its entirety, to be participating, making an offer and acquiring
New Ordinary Shares on the terms and conditions contained herein
and to be providing the representations, warranties, indemnities,
acknowledgements and undertakings contained in this Appendix.
In particular, each such Placee represents, warrants,
undertakes, agrees and acknowledges (amongst other things)
that:
1. it is a Relevant Person and undertakes that it will acquire,
hold, manage or dispose of any New Ordinary Shares that are
allocated to it for the purposes of its business;
2. in the case of a Relevant Person in a member state of the EEA
which has implemented the Prospectus Directive (each, a "Relevant
Member State") who acquires any New Ordinary Shares pursuant to the
Placing:
(a) it is a Qualified Investor within the meaning of Article
2(1)(e) of the Prospectus Directive; and
(b) in the case of any New Ordinary Shares acquired by it as a
financial intermediary, as that term is used in Article 3(2) of the
Prospectus Directive:
(i) the New Ordinary Shares acquired by it in the Placing have
not been acquired on behalf of, nor have they been acquired with a
view to their offer or resale to, persons in any Relevant Member
State other than Qualified Investors or in circumstances in which
the prior consent of the Bookrunners have been given to the offer
or resale;
(ii) where New Ordinary Shares have been acquired by it on
behalf of persons in any Relevant Member State other than Qualified
Investors, the offer of those New Ordinary Shares to it is not
treated under the Prospectus Directive as having been made to such
persons; and
3. it is acquiring the New Ordinary Shares for its own account
or is acquiring the New Ordinary Shares for an account with respect
to which it has authority to exercise, and is exercising,
investment discretion and has the authority to make and does make
the representations, warranties, indemnities, acknowledgements,
undertakings and agreements contained in this Announcement; and
4. it understands (or if acting for the account of another
person, such person has confirmed that such person understands) the
resale and transfer restrictions set out in this Appendix;
5. except as otherwise permitted by the Company and subject to
any available exemptions from applicable securities laws, it (and
any person on whose account it is acting, as referred to in
paragraph 4 above) is not a US Person (as defined in Regulation S)
and is located outside the United States and is acquiring the New
Ordinary Shares in an "offshore transaction" as defined in, and in
accordance with, Regulation S;
6. it has not offered, sold or delivered and will not offer to
sell or deliver any of the New Ordinary Shares to persons within
the United States, directly or indirectly, or to, or for the
account or benefit of, US Persons; neither it, its affiliates, nor
any persons acting on its behalf, have engaged or will engage in
any directed selling efforts (as defined in Regulation S) with
respect to the New Ordinary Shares; and it is not taking up the New
Ordinary Shares for resale in or into the United States.
No prospectus
The New Ordinary Shares are being offered to a limited number of
specifically invited persons only and will not be offered in such a
way as to require any prospectus or other offering document to be
published. 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 New Ordinary Shares and Placees' commitments will be
made solely on the basis of their own assessment of the Company,
the New Ordinary Shares and the Placing based on the information
contained in this Announcement, the announcement of the pricing of
the Placing (the "Placing Results Announcement") (together, the
"Placing Documents") and any other information publicly announced
through a regulatory information service ("RIS") 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 sent to individual Placees.
Each Placee, by participating in the Placing, agrees that the
content of the Placing Documents 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 the
Bookrunners or the Company or any other person and none of the
Bookrunners, the Company nor any other person acting on such
person's behalf nor any of their respective affiliates has or shall
have any responsibility or 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. No Placee should consider any
information in this Announcement to be legal, tax or business
advice. Each Placee should consult its own attorney, tax advisor,
and business advisor for legal, tax and business advice regarding
an investment in the New Ordinary Shares. Nothing in this paragraph
shall exclude the liability of any person for fraudulent
misrepresentation.
Details of the Placing Agreement and the New Ordinary Shares
The Bookrunners are acting as joint bookrunners in connection
with the Placing and have today entered into the Placing Agreement
with the Company under which, on the terms and subject to the
conditions set out in the Placing Agreement, the Bookrunners, as
agents for and on behalf of the Company, have severally (and not
jointly or jointly and severally) agreed to use their respective
reasonable endeavours to procure placees for up to 15,217,391
Ordinary Shares (the "Placing Shares").
The final number of Placing Shares will be set out in a share
placing supplement agreed between the Bookrunners and the Company
following the Bookbuild (the "Placing Supplement"). The price
payable by placees will be 23 pence per Ordinary Share (the
"Placing Price").
The Company will also grant an option to the Brokers which shall
be exercisable jointly at their discretion (acting with the
Company's consent) to procure subscribers for up to a further
2,173,913 Ordinary Shares at the Placing Price (the "Broker
Option") (and any Ordinary Shares placed in connection with the
exercise of the Broker Option being the "Broker Option Shares"),
such shares being in addition to the Placing Shares. The placing of
the Placing Shares and any Broker Option Shares (such shares
together, the "New Ordinary Shares") is not underwritten by the
Bookrunners.
The New Ordinary Shares will, when issued, be credited as fully
paid up and will be issued subject to the Company's articles of
association and 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 on or in respect of the
Ordinary Shares after the date of issue of the New Ordinary Shares,
and will on issue be free of all claims, liens, charges,
encumbrances and equities.
Application for admission to trading
Application will be made to the London Stock Exchange plc (the
"London Stock Exchange") for the admission of the New Ordinary
Shares (including the Broker Option Shares, if any) to trading on
AIM ("Admission").
It is expected that Admission of the New Ordinary Shares will
occur at or before 8.00 a.m. (London time) on 10 December 2018 (or
such later time and/or date as the Bookrunners may agree with the
Company) and that dealings in the New Ordinary Shares will commence
at that time.
Bookbuild
The Bookrunners will today commence the accelerated bookbuilding
process to determine demand for Placing Shares by Placees (the
"Bookbuild"). This Announcement gives details of the terms and
conditions of, and the mechanics of participation in, the Placing.
No commissions will be paid to Placees or by Placees in respect of
any New Ordinary Shares.
The Bookrunners shall be entitled to effect the Placing by such
alternative method to the Bookbuild as they may, in their absolute
discretion following consultation with the Company, determine. In
particular, the Bookrunners may (subsequent to allocating Placing
Shares pursuant to the Bookbuild), procure further placees for
Broker Option Shares pursuant to the Broker Option.
Participation in, and principal terms of, the Placing
1. The Bookrunners are arranging the Placing severally, and not
jointly, or jointly and severally, as bookrunners and placing
agents of the Company. Participation in the Placing will only be
available to persons who may lawfully be, and are, invited to
participate by either of the Bookrunners. Each of the Bookrunners
may itself agree to be a Placee in respect of all or some of the
New Ordinary Shares or may nominate any member of its group to do
so.
2. The number of Placing Shares will be agreed by the
Bookrunners (in consultation with the Company) following completion
of the Bookbuild. Subject to the execution of the Placing
Supplement, the number of Placing Shares to be issued will be
announced on an RIS following the completion of the Bookbuild via
the Placing Results Announcement. The number of Broker Option
Shares (if any) to be issued will also be announced following the
exercise (or expiry) of the Broker Option.
3. Allocations of the New Ordinary Shares will be determined by
the Bookrunners after consultation with the Company (the proposed
allocations having been supplied by the Bookrunners to the Company
in advance of such consultation). Subject to the execution of the
Placing Supplement, allocations in respect of Placing Shares (and,
if the Broker Option is exercised at that time, any Broker Option
Shares) will be confirmed orally by the Bookrunners and a contract
note will be despatched as soon as possible thereafter. A
Bookrunner's oral confirmation to such Placee constitutes an
irrevocable legally binding commitment upon such person (who will
at that point become a Placee), in favour of the Bookrunners and
the Company, to acquire the number of New Ordinary Shares allocated
to it and to pay the Placing Price in respect of such shares on the
terms and conditions set out in this Appendix and in accordance
with the Company's articles of association. Except with the
relevant Bookrunner's consent, such
commitment will not be capable of variation or revocation after
the time at which it is submitted.
4. Each Placee's allocation and commitment will be evidenced by
a contract note issued to such Placee by the relevant Bookrunner.
The terms of this Appendix will be deemed incorporated in that
contract note.
5. Irrespective of the time at which a Placee's allocation
pursuant to the Placing is confirmed, settlement for all New
Ordinary Shares to be subscribed for pursuant to the Placing will
be required to be made at the same time, on the basis explained
below under "Registration and Settlement".
6. All obligations under the Bookbuild and/or the Placing
(including with respect to any Broker Option Shares) will be
subject to fulfilment or (where applicable) waiver 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".
7. By participating in the Placing, each Placee agrees 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.
8. To the fullest extent permissible by law, neither the
Bookrunners, nor the Company, nor any of their respective
affiliates, agents, directors, officers or employees shall have any
responsibility or liability to Placees (or to any other person
whether acting on behalf of a Placee or otherwise). In particular,
none of the Bookrunners, nor the Company, nor any of their
respective affiliates, agents, directors, officers or employees
shall have any responsibility or liability (including to the extent
permissible by law, any fiduciary duties) in respect of the
Bookrunners' conduct of the Placing or of such alternative method
of effecting the Placing as the Bookrunners and the Company may
determine.
9. The New Ordinary Shares will be issued subject to the terms
and conditions of this Announcement and each Placee's commitment to
subscribe for New Ordinary Shares on the terms set out herein will
continue notwithstanding any amendment that may in future be made
to the terms and conditions of the Placing and Placees will have no
right to be consulted or require that their consent be obtained
with respect to the Company's or the Bookrunners' conduct of the
Placing.
10. All times and dates in this Announcement may be subject to
amendment. The Bookrunners shall notify the Placees and any person
acting on behalf of the Placees of any changes.
Conditions of the Placing
The Placing is conditional upon the Placing Agreement becoming
unconditional and not having been terminated in accordance with its
terms. The Bookrunners' obligations under the Placing Agreement are
conditional on customary conditions including (amongst others) (the
"Conditions"):
1. certain announcement obligations;
2. Admission occurring no later than 8.00 a.m. (London time) on
10 December 2018 (or such later time and/or date, not being later
than 8.00 a.m. (London time) on 31 December, as the Bookrunners may
otherwise agree with the Company) (the "Closing Date");
3. none of the warranties contained in the Placing Agreement, in
the opinion of the Bookrunners (acting jointly and in good faith),
being untrue or inaccurate or misleading at the date of the Placing
Agreement or becoming untrue or inaccurate or misleading at any
time between such date and Admission by reference to the facts and
circumstances from time to time subsisting
4. the Company having complied with all of its obligations under
the Placing Agreement which fall to be performed or satisfied on or
prior to Admission;
5. the execution and delivery of the Placing Supplement; and
6. the BGF Subscription Agreement: (a) having been duly executed
by all the parties thereto, and not having been terminated or
rescinded prior to Admission; and (b) becoming unconditional in all
respects and having been completed in escrow (subject to the sole
condition to release from escrow being any condition equivalent to
item 2 above);
7. each of the deed of variation of the share purchase agreement
with Dr Benjamin Cobb, and the note amendment deed between the
Company and Global Health Investment Fund I LLC: (a) having been
duly executed by all the parties thereto, and not having been
terminated or rescinded prior to Admission; and (b) becoming
unconditional in all respects (save for any condition equivalent to
item 2 above, or which otherwise will be satisfied on
Admission);
8. in the good faith opinion of the Bookrunners (acting jointly
and in good faith), there having been no material adverse change
in, or any development involving a prospective material adverse
change in, or affecting, the condition (financial, operational,
legal or otherwise) or the earnings, management, business affairs,
solvency, credit rating or prospects of the Company, or of the
Group (taken as a whole whether or not arising in the ordinary
course of business ("Material Adverse Change").
The Bookrunners (if they both agree) may, at their discretion
and upon such terms as they think fit, waive compliance by the
Company with the whole or any part of certain of the Company's
obligations in relation to the Conditions or extend the time or
date provided for fulfilment of certain such Conditions in respect
of all or any part of the performance thereof. The conditions in
the Placing Agreement relating to (amongst other things) Admission
taking place, and the BGF Subscription Agreement becoming
unconditional, may not be waived. Any such extension or waiver will
not affect Placees' commitments as set out in this
Announcement.
If: (i) any of the Conditions are not fulfilled or (where
permitted) waived by the Bookrunners by the relevant time or date
specified (or such later time or date as the Company and the
Bookrunners may agree); or (ii) the Placing Agreement is terminated
in the circumstances specified below under "Right to terminate
under the Placing Agreement", the Placing will not proceed and the
Placees' rights and obligations hereunder in relation to the New
Ordinary Shares shall cease and terminate at such time and each
Placee agrees that no claim can be made by it or on its behalf (or
any person on whose behalf the Placee is acting) in respect
thereof.
None of the Bookrunners, nor the Company, nor any of their
respective affiliates, agents, directors, officers or employees
shall have any liability 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
Bookrunners.
Right to terminate under the Placing Agreement
Each of the Bookrunners is entitled, at any time before
Admission, to terminate its obligations under the Placing Agreement
in accordance with its terms in certain circumstances, including
(amongst other things):
1. where there has been a breach by the Company of any of its
material obligations contained in the Placing Agreement;
2. it comes to the knowledge of either Bookrunner that any of
the warranties contained in the Placing Agreement was untrue,
inaccurate or misleading either when made and/or would be if such
warranties were deemed to be repeated at any time before Admission
by reference to the facts and circumstances then subsisting;
3. if any of the Conditions have (i) become incapable of
satisfaction or (ii) not been satisfied before the latest time
provided in the Placing Agreement and have not been waived if
capable of being waived by the Bookrunners; or
4. the occurrence of certain force majeure events.
Upon termination, such terminating Bookrunner shall be released
and discharged (except for any liability arising before or in
relation to such termination) from their respective obligations
under or pursuant to the Placing Agreement, subject to certain
exceptions. If both Bookrunners terminate their obligations under
the Placing Agreement, then the Placing Agreement shall cease and
terminate and the Placing will not proceed.
By participating in the Placing, each Placee agrees that (i) the
exercise by either of the Bookrunners of any right of termination
or of any other discretion under the Placing Agreement shall be
within the absolute discretion of such Bookrunner and that it need
not make any reference to, or consult with, Placees and that it
shall have no liability to Placees whatsoever in connection with
any such exercise or failure to so exercise and (ii) its rights and
obligations terminate only in the circumstances described above
under "Right to terminate under the Placing Agreement" and
"Conditions of the Placing", and its participation will not be
capable of rescission or termination by it after oral confirmation
by the Bookrunners of the allocation and commitments following the
close of the Bookbuild (or otherwise, in respect of Broker Option
Shares, following exercise of the Broker Option).
Lock-up Arrangements
The Company has undertaken to the Bookrunners that, between the
date of the Placing Agreement and 12 months after Admission, it
will not offer, issue, sell or otherwise dispose of (or announce an
intention of doing so) any shares of the Company, or any securities
convertible into or exchangeable or carrying rights to acquire
other shares of the Company, whether settled in cash or otherwise,
without prior consent from the Bookrunners. However, this
undertaking shall not prevent or restrict the grant of options
under, or the allotment and issue of shares pursuant to options
under, any existing employee share schemes of the Company (in
accordance with its normal practice).
By participating in the Placing, Placees agree that the exercise
by any Bookrunner of any power to grant consent to the undertaking
by the Company of a transaction which would otherwise be subject to
the lock-up provisions under the Placing Agreement shall be within
the absolute discretion of that Bookrunner and that it need not
make any reference to, or consult with, Placees and that it shall
have no liability to Placees whatsoever in connection with any such
exercise of the power to grant consent.
Registration and Settlement
Settlement of transactions in the New Ordinary Shares (ISIN:
GB00B1VKB244) following Admission will take place within the system
administered by Euroclear UK & Ireland Limited ("CREST"),
subject to certain exceptions. The Bookrunners reserve the right to
require settlement for, and delivery of, the New Ordinary Shares
(or any part thereof) to Placees by such other means that they may
deem necessary if delivery or settlement is not possible or
practicable within the CREST system or would not be consistent with
the regulatory requirements in the Placee's jurisdiction.
Following the close of the Bookbuild (or otherwise, in respect
of Broker Option Shares, following exercise of the Broker Option),
each Placee to be allocated New Ordinary Shares in the Placing will
be sent a contract note in accordance with the standing
arrangements in place with the relevant Bookrunner stating the
number of New Ordinary Shares allocated to them at the Placing
Price, the aggregate amount owed by such Placee to the Bookrunner
and settlement instructions. Each Placee agrees that it will do all
things necessary to ensure that delivery and payment is completed
in accordance with the standing CREST or certificated settlement
instructions in respect of the New Ordinary Shares that it has in
place with the relevant Bookrunner.
The Company will deliver the New Ordinary Shares to a CREST
account operated by the relevant Bookrunner as agent for the
Company and the relevant Bookrunner will enter its delivery
instruction into the CREST system. The input to CREST by a Placee
of a matching or acceptance instruction will then allow delivery of
the relevant New Ordinary Shares to that Placee against
payment.
It is expected that settlement in respect of the New Ordinary
Shares will take place on 10 December 2018 on a delivery versus
payment basis.
Interest is chargeable daily on payments not received from
Placees on the due date in accordance with the arrangements set out
above at the rate of two percentage points above LIBOR as
determined by the Bookrunners.
Each Placee is deemed to agree that, if it does not comply with
these obligations, the relevant Bookrunner may sell any or all of
the New Ordinary Shares allocated to that Placee on such Placee's
behalf and retain from the proceeds, for the Bookrunners' account
and benefit, an amount equal to the aggregate amount owed by the
Placee plus any interest due. The relevant Placee will, however,
remain liable for any shortfall below the aggregate amount owed by
it and will be required to bear any stamp duty or stamp duty
reserve tax or other taxes or duties (together with any interest or
penalties) imposed in any jurisdiction which may arise upon the
sale of such New Ordinary Shares on such Placee's behalf.
If New Ordinary Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that the contract note is
copied and delivered immediately to the relevant person within that
organisation. Insofar as New Ordinary Shares are issued 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 New Ordinary Shares should, subject as provided
below, be so registered free from any liability to UK stamp duty or
stamp duty reserve tax. If there are any circumstances in which any
stamp duty or stamp duty reserve tax or other similar taxes or
duties (including any interest and penalties relating thereto) is
payable in respect of the allocation, allotment, issue, sale,
transfer or delivery of the New Ordinary Shares (or, for the
avoidance of doubt, if any stamp duty or stamp duty reserve tax is
payable in connection with any subsequent transfer of or agreement
to transfer New Ordinary Shares), none of the Bookrunners nor the
Company shall be responsible for payment thereof.
Representations, warranties, undertakings and
acknowledgements
By participating in the Placing each Placee (and any person
acting on such Placee's behalf) irrevocably acknowledges, confirms,
undertakes, represents, warrants and agrees (as the case may be)
with the Bookrunners (in their capacity as bookrunners and placing
agents of the Company in respect of the Placing) and the Company,
in each case as a fundamental term of their application for New
Ordinary Shares, the following:
General
1. it has read and understood this Announcement in its entirety
and its subscription for New Ordinary Shares is subject to and
based upon all the terms, conditions, representations, warranties,
acknowledgements, agreements and undertakings and other information
contained herein and 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 the
Placing, the Company, the New Ordinary Shares or otherwise other
than the information contained in the Placing Documents and the
Publicly Available Information;
2. the 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 rules and practices of
AIM, which includes a description of the Company's business and the
Company's financial information, including balance sheets and
income statements, and that it is able to obtain or has access to
such information without undue difficulty, and is able to obtain
access to such information or comparable information concerning any
other publicly traded companies, without undue difficulty;
3. the person whom it specifies for registration as holder of
the New Ordinary Shares will be (a) itself or (b) its nominee, as
the case may be. None of the Bookrunners nor the Company will be
responsible for any liability to stamp duty or stamp duty reserve
tax or other similar taxes or duties imposed in any jurisdiction
(including interest and penalties relating thereto) ("Indemnified
Taxes"). Each Placee and any person acting on behalf of such Placee
agrees to indemnify the Company and the Bookrunners on an after-tax
basis in respect of any Indemnified Taxes;
4. neither the Bookrunners nor any of their respective
affiliates agents, directors, officers and employees accepts any
responsibility for any acts or omissions of the Company or any of
the directors of the Company or any other person (other than the
relevant Bookrunner) in connection with the Placing;
5. time is of the essence as regards its obligations under this Announcement;
6. any document that is to be sent to it in connection with the
Placing will be sent at its risk and may be sent to it at any
address provided by it to the Bookrunners;
No distribution of Announcement
7. it will not redistribute, forward, transfer, duplicate or
otherwise transmit this Announcement or any part of it, or any
other presentational or other material concerning the Placing
(including electronic copies thereof) to any person and represents
that it has not redistributed, forwarded, transferred, duplicated,
or otherwise transmitted any such materials to any person;
No prospectus
8. no prospectus or other offering document is required under
the Prospectus Directive, nor will one be prepared in connection
with the Bookbuild, the Placing or the New Ordinary Shares and it
has not received and will not receive a prospectus or other
offering document in connection with the Bookbuild, the Placing or
the New Ordinary Shares;
Purchases by Bookrunners for their own account
9. in connection with the Placing, the Bookrunners and any of
their affiliates acting as an investor for its own account may
subscribe for New Ordinary Shares in the Company and in that
capacity may retain, purchase or sell for its own account such New
Ordinary Shares in the Company and any securities of the Company or
related investments and may offer or sell such securities or other
investments otherwise than in connection with the Placing.
Accordingly, references in this Announcement to the New Ordinary
Shares being issued, offered or placed should be read as including
any issue, offering or placement of such shares in the Company to
each of the Bookrunners or any of their affiliates acting in such
capacity;
10. each of the Bookrunners and their affiliates may enter into
financing arrangements and swaps with investors in connection with
which each of the Bookrunners and any of their affiliates may from
time to time acquire, hold or dispose of such securities of the
Company, including the New Ordinary Shares;
11. the Bookrunners do not intend to disclose the extent of any
investment or transactions referred to in paragraphs 9 and 10 above
otherwise than in accordance with any legal or regulatory
obligation to do so;
No fiduciary duty or client of the Bookrunners
12. the Bookrunners do not owe any fiduciary or other duties to
any Placee in respect of any representations, warranties,
undertakings or indemnities in the Placing Agreement;
13. its participation in the Placing is on the basis that it is
not and will not be a client of any of the Bookrunners in
connection with its participation in the Placing and that the
Bookrunners have no duties or responsibilities to it for providing
the protections afforded to their respective clients or customers
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 their respective rights and obligations
thereunder including any rights to waive or vary any conditions or
exercise any termination right;
No responsibility of the Bookrunners for information
14. the content of the Placing Documents and the Publicly
Available Information has been prepared by and is exclusively the
responsibility of the Company and neither Bookrunner nor their
respective affiliates agents, directors, officers or employees nor
any person acting on behalf of any of them is responsible for or
has or shall have any responsibility or liability for any
information, representation or statement contained in, or omission
from, the Placing Documents, the Publicly Available Information or
otherwise 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 the Placing
Documents, the Publicly Available Information or otherwise,
provided that nothing in this paragraph excludes the liability of
any person for fraudulent misrepresentation made by such
person;
Reliance on information regarding the Placing
15.
(a) the only information on which it is entitled to rely on and
on which such Placee has relied in committing itself to subscribe
for New Ordinary Shares is contained in the Placing Documents, or
any Publicly Available Information (save that in the case of
Publicly Available Information, a Placee's right to rely on that
information is limited to the right that such Placee would have as
a matter of law in the absence of this paragraph 15(a)), such
information being all that such Placee deems necessary or
appropriate and sufficient to make an investment decision in
respect of the New Ordinary Shares;
(b) it has neither received nor relied on any other information
given, or representations, warranties or statements, express or
implied, made, by any of the Bookrunners or the Company nor any of
their respective affiliates, agents, directors, officers or
employees acting on behalf of any of them (including in any
management presentation delivered in respect of the Bookbuild) with
respect to the Company, the Placing or the New Ordinary Shares or
the accuracy, completeness or adequacy of any information contained
in the Placing Documents, or the Publicly Available Information or
otherwise;
(c) none of the Bookrunners, nor the Company, nor any of their
respective affiliates, agents, directors, officers or employees or
any person acting on behalf of any of them has provided, nor will
provide, it with any material or information regarding the New
Ordinary Shares or the Company or any other person other than the
information in the Placing Documents or the Publicly Available
Information; nor has it requested any of the Bookrunners, the
Company, any of their respective affiliates or any person acting on
behalf of any of them to provide it with any such material or
information; and
(d) none of the Bookrunners or the Company will be liable for
any Placee's decision to participate in the Placing based on any
other information, representation, warranty or statement,
provided that nothing in this paragraph excludes the liability
of any person for fraudulent misrepresentation made by that
person;
Conducted own investigation and due diligence
16. it may not rely, and has not relied, on any investigation
that the Bookrunners, any of their affiliates or any person acting
on their behalf, may have conducted with respect to the New
Ordinary Shares, the terms of the Placing or the Company, and none
of such persons has made any representation, express or implied,
with respect to the Company, the Placing, the New Ordinary Shares
or the accuracy, completeness or adequacy of the information in the
Placing Documents, the Publicly Available Information or any other
information;
17. in making any decision to subscribe for New Ordinary Shares it:
(a) has such knowledge and experience in financial and business
matters to be capable of evaluating the merits and risks of
subscribing for the New Ordinary Shares;
(b) will not look to the Bookrunners for all or part of any such
loss it may suffer;
(c) is experienced in investing in securities of this nature in
this sector and is aware that it may be required to bear, and is
able to bear, the economic risk of an investment in the New
Ordinary Shares;
(d) is able to sustain a complete loss of an investment in the
New Ordinary Shares;
(e) has no need for liquidity with respect to its investment in
the New Ordinary Shares;
(f) has made its own assessment and has satisfied itself
concerning the relevant tax, legal, currency and other economic
considerations relevant to its investment in the New Ordinary
Shares; and
(g) has conducted its own due diligence, examination,
investigation and assessment of the Company, the New Ordinary
Shares and the terms of the Placing and has satisfied itself that
the information resulting from such investigation is still current
and relied on that investigation for the purposes of its decision
to participate in the Placing;
Capacity and authority
18. it is subscribing for the New Ordinary Shares for its own
account or for an account with respect to which it exercises sole
investment discretion and has the authority to make and does make
the acknowledgements, representations and agreements contained in
this Announcement;
19. it is acting as principal only in respect of the Placing or,
if it is acting for any other person, it is:
(a) 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) and will remain liable to the Company and/or the Bookrunners
for the performance of all its obligations as a Placee in respect
of the Placing (regardless of the fact that it is acting for
another person);
20. it and any person acting on its behalf is entitled to
subscribe for the New Ordinary Shares under the laws and
regulations of all relevant jurisdictions that apply to it and that
it has fully observed such laws and regulations, has capacity and
authority and is entitled to enter into and perform its obligations
as a subscriber of New Ordinary Shares and will honour such
obligations, and has obtained all such governmental and other
guarantees, permits, authorisations, approvals and consents which
may be required thereunder and complied with all necessary
formalities to enable it to commit to this participation in the
Placing and to perform its obligations in relation thereto
(including, without limitation, in the case of any person on whose
behalf it is acting, all necessary consents and authorities to
agree to the terms set out or referred to in this Announcement) and
will honour such obligations and that it has not taken any action
or omitted to take any action which will or may result in the
Bookrunners, the Company or any of their respective directors,
officers, agents, employees or advisers acting in breach of the
legal or regulatory requirements of any jurisdiction in connection
with the Placing;
21. where it is subscribing for New Ordinary Shares for one or
more managed accounts, it is authorised in writing by each managed
account to subscribe for the New Ordinary Shares for each managed
account;
22. it irrevocably appoints any duly authorised officer of each
Bookrunner as its agent for the purpose of executing and delivering
to the Company and/or its registrars any documents on its behalf
necessary to enable it to be registered as the holder of any of the
New Ordinary Shares for which it agrees to subscribe for upon the
terms of this Announcement;
Excluded territories
23. the New Ordinary Shares have not been and will not be
registered or otherwise qualified and that a prospectus will not be
cleared in respect of any of the New Ordinary Shares under the
securities laws or legislation of the United States, Australia, New
Zealand, Canada, Japan or the Republic of South Africa, or any
state, province, territory or jurisdiction thereof;
24. the New Ordinary Shares may not be offered, sold, or
delivered or transferred, directly or indirectly, in or into the
above jurisdictions or any jurisdiction (subject to certain
exceptions) in which it would be unlawful to do so and no action
has been or will be taken by any of the Company, the Bookrunners or
any person acting on behalf of the Company or the Bookrunners that
would, or is intended to, permit a public offer of the New Ordinary
Shares in the United States, Australia, New Zealand, Canada, Japan
or the Republic of South Africa or any country or jurisdiction, or
any state, province, territory or jurisdiction thereof, where any
such action for that purpose is required;
25. unless otherwise specifically agreed with the Bookrunners,
it is not and at the time the New Ordinary Shares are subscribed
for, neither it nor the beneficial owner of the New Ordinary Shares
will be, a resident of, nor have an address in, Australia, New
Zealand, Japan, the Republic of South Africa or any province or
territory of Canada;
26. it may be asked to disclose in writing or orally to the Bookrunners:
(a) if he or she is an individual, his or her nationality; or
(b) if he or she is a discretionary fund manager, the
jurisdiction in which the funds are managed or owned;
Compliance with US securities laws
27. it, and any prospective beneficial owner for whose account
or benefit it is purchasing the New Ordinary Shares, is (i) located
outside the United States and is acquiring the New Ordinary Shares
in an "offshore transaction" as defined in, and in accordance with,
Regulation S; (ii) has not been offered to purchase or subscribe
for New Ordinary Shares by means of any "directed selling efforts"
as defined in Regulation S;
28. it understands that the New Ordinary Shares have not been,
and will not be, registered under the US Securities Act and may not
be offered, sold or resold in or into or from the United States or
to, or for the account or benefit of, US Persons (as defined in
Regulation S) except pursuant to an effective registration under
the US Securities Act, or pursuant to an exemption from the
registration requirements of the US Securities Act and in
accordance with applicable state securities laws;
29. it will not distribute, forward, transfer or otherwise
transmit this Announcement or any part of it, or any other
presentational or other materials concerning the Placing in or into
or from the United States (including electronic copies thereof) to
any person, and it has not distributed, forwarded, transferred or
otherwise transmitted any such materials to any person;
Compliance with EEA selling restrictions and the Prospectus
Directive
30. if in a member state of the EEA, unless otherwise
specifically agreed with the Bookrunners in writing, it is a
Qualified Investor;
31. it has not offered or sold and will not offer or sell any
New Ordinary Shares to persons in the EEA except to Qualified
Investors or otherwise in circumstances which have not resulted in
and which will not result in an offer to the public in any member
state of the EEA within the meaning of the Prospectus
Directive;
32. if a financial intermediary, as that term is used in Article
3(2) of the Prospectus Directive, the New Ordinary Shares
subscribed for 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 prior
consent of the Bookrunners has been given to each proposed offer or
resale;
Compliance with FSMA, the UK financial promotion regime and
MAR
33. if in the United Kingdom, that it is a person (i) having
professional experience in matters relating to investments who
falls within the definition of "investment professionals" in
Article 19(5) of the Order or (ii) who falls within Article 49(2)
(a) to (d) ("High Net Worth Companies, Unincorporated Associations,
etc") of the Order, or (iii) to whom it may otherwise lawfully be
communicated;
34. it has not offered or sold and will not offer or sell any
New Ordinary Shares to persons in the United Kingdom, 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 Financial Services and Markets Act 2000, as
amended ("FSMA");
35. it has only communicated or caused to be communicated and
will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
section 21 of FSMA) relating to the New Ordinary Shares in
circumstances in which section 21(1) of FSMA does not require
approval of the communication by an authorised person and it
acknowledges and agrees that the Placing Documents have not and
will not have been approved by either Bookrunner in its capacity as
an authorised person under section 21 of the FSMA and it may not
therefore be subject to the controls which would apply if it was
made or approved as a financial promotion by an authorised
person;
36. it has complied and will comply with all applicable laws
with respect to anything done by it or on its behalf in relation to
the New Ordinary Shares (including all applicable provisions in
FSMA and Regulation (EU) No. 596/2014 of the European Parliament
and of the Council of 16 April 2014 on market abuse ("MAR")) in
respect of anything done in, from or otherwise involving, the
United Kingdom);
Compliance with laws
37. if it is a pension fund or investment company, its
subscription for New Ordinary Shares is in full compliance with
applicable laws and regulations;
38. it has complied with its obligations under the Criminal
Justice Act 1993 and Articles 8, 10 and 12 of MAR and in connection
with money laundering and terrorist financing under the Proceeds of
Crime Act 2002 (as amended), the Terrorism Act 2000, the Terrorism
Act 2006 and the Money Laundering, Terrorist Financing and Transfer
of Funds (Information on the Payer) Regulations 2017 and any
related or similar rules, regulations or guidelines, issued,
administered or enforced by any government agency having
jurisdiction in respect thereof (the "Regulations") and the Money
Laundering Sourcebook of the FCA and, if making payment on behalf
of a third party, that satisfactory evidence has been obtained and
recorded by it to verify the identity of the third party as
required by the Regulations;
39. in order to ensure compliance with the Regulations, each
Bookrunner (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 relevant
Bookrunner or the Company's registrars, as applicable, of evidence
of identity, definitive certificates in respect of the New Ordinary
Shares may be retained at the relevant Bookrunner's absolute
discretion or, where appropriate, delivery of the New Ordinary
Shares to it in uncertificated form may be delayed at the relevant
Bookrunner's or the Company's registrars', as the case may be,
absolute discretion. If within a reasonable time after a request
for verification of identify the relevant Bookrunner (for itself
and as agent on behalf of the Company) or the Company's registrars
have not received evidence satisfactory to them, either the
relevant Bookrunner and/or the Company may, at its absolute
discretion, 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;
Depositary receipts and clearance services
40. the allocation, allotment, issue and delivery to it, or the
person specified by it for registration as holder, of New Ordinary
Shares will not give rise to a stamp duty or stamp duty reserve tax
liability under (or at a rate determined under) any of sections 67,
70, 93 or 96 of the Finance Act 1986 (depositary receipts and
clearance services) and that the New Ordinary Shares are not being
acquired in connection with arrangements to issue depositary
receipts or to issue or transfer New Ordinary Shares into a
clearance service;
Undertaking to make payment
41. it (and any person acting on its behalf) has the funds
available to pay for the New Ordinary Shares for which it has
agreed to subscribe and acknowledges and agrees that it will make
payment in respect of the New Ordinary Shares allocated to it in
accordance with this Announcement on the due time and date set out
herein, failing which the relevant New Ordinary Shares may be
placed with other subscribers or sold as the Bookrunners may in
their sole discretion determine and without liability to such
Placee, who will remain liable for any amount by which the net
proceeds of such sale falls short of the product of the relevant
Placing Price and the number of New Ordinary Shares allocated to it
and will be required to bear any stamp duty, stamp duty reserve tax
or other taxes or duties (together with any interest, fines or
penalties) imposed in any jurisdiction which may arise upon the
sale of such Placee's New Ordinary Shares;
Money held on account
42. any money held in an account with the relevant Bookrunners
on behalf of the Placee and/or any person acting on behalf of the
Placee and/or any person acting on behalf of the Placee will not be
treated as client money within the meaning of the relevant rules
and regulations of the FCA made under the FSMA. Each Placee
acknowledges that the money will not be subject to the protections
conferred by the client money rules: as a consequence this money
will not be segregated from the relevant Bookrunner's money in
accordance with the client money rules and will be held by it under
a banking relationship and not as trustee;
Allocation
43. its allocation (if any) of New Ordinary Shares will
represent a maximum number of New Ordinary Shares which it will be
entitled, and required, to subscribe for, and that the Bookrunners
or the Company may call upon it to subscribe for a lower number of
New Ordinary Shares (if any), but in no event in aggregate more
than the aforementioned maximum;
No recommendation
44. none of the Bookrunners, nor any of their respective
affiliates, nor any person acting on behalf 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;
Inside information
45. if it has received any 'inside information' (for the
purposes of MAR and section 56 of the Criminal Justice Act 1993) in
relation to the Company and its securities in advance of the
Placing, it confirms that it has received such information within
the market soundings regime provided for in article 11 of MAR and
associated delegated regulations and it has not:
(a) used that inside information to acquire or dispose of
securities of the Company or financial instruments related thereto
or cancel or amend an order concerning the Company's securities or
any such financial instruments;
(b) used that inside information to encourage, require,
recommend or induce another person to deal in the securities of the
Company or financial instruments related thereto or to cancel or
amend an order concerning the Company's securities or such
financial instruments; or
(c) disclosed such information to any person, prior to the
information being made publicly available;
Rights and remedies
46. the rights and remedies of the Company and the Bookrunners
under the terms and conditions in this Announcement 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; and
Governing law and jurisdiction
47. these terms and conditions of the Placing and any agreements
entered into by it pursuant to the terms and conditions of the
Placing, and all non-contractual or other obligations arising out
of or in connection with them, shall be governed by and construed
in accordance with the laws of England and it submits (on behalf of
itself and on behalf of any person on whose behalf it is acting) to
the exclusive jurisdiction of the English courts as regards any
claim, dispute or matter arising out of any such contract
(including any dispute regarding the existence, validity or
termination of such contract or relating to any non-contractual or
other obligation arising out of or in connection with such
contract), except that enforcement proceedings in respect of the
obligation to make payment for the New Ordinary Shares (together
with any interest chargeable thereon) may be taken by either the
Company or the Bookrunners 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 foregoing representations, warranties, confirmations,
acknowledgements, agreements and undertakings are given for the
benefit of the Company as well as each of the Bookrunners and are
irrevocable. The Bookrunners, the Company and their respective
affiliates and others will rely upon the truth and accuracy of the
foregoing representations, warranties, confirmations,
acknowledgements, agreements and undertakings. Each prospective
Placee, and any person acting on behalf of such Placee, irrevocably
authorises the Company and the Bookrunners to produce this
Announcement, pursuant to, in connection with, or as may be
required by any applicable law or regulation, administrative or
legal proceeding or official inquiry with respect to the matters
set forth herein.
Indemnity
By participating in the Placing, each Placee (and any person
acting on such Placee's behalf) agrees to indemnify on an after tax
basis and hold the Company, the Bookrunners and their respective
affiliates, agents, directors, officers and employees harmless from
any and all costs, claims, liabilities and expenses (including
legal fees and expenses) arising out of or in connection with any
breach of the representations, warranties, acknowledgements,
agreements and undertakings given by the Placee (and any person
acting on such Placee's behalf) in this Announcement or incurred by
the Bookrunners, the Company or each of their respective
affiliates, agents, directors, officers or employees arising from
the performance of the Placees' obligations as set out in this
Announcement, and further agrees that the provisions of this
Announcement shall survive after completion of the Placing.
Taxation
The agreement to allot and issue New Ordinary 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 New Ordinary Shares
in question. Such agreement also assumes that the New Ordinary
Shares are not being acquired in connection with arrangements to
issue depositary receipts or to issue or transfer the New Ordinary
Shares into a clearance service. If there are any such
arrangements, or the settlement relates to any other dealing in the
New Ordinary Shares, stamp duty or stamp duty reserve tax or other
similar taxes or duties may be payable, for which neither the
Company nor the Bookrunners will be responsible and the Placees
shall indemnify the Company and the Bookrunners on an after-tax
basis for any stamp duty or stamp duty reserve tax or other similar
taxes or duties (together with interest, fines and penalties) in
any jurisdiction paid by the Company or the Bookrunners in respect
of any such arrangements or dealings. If this is the case, each
Placee should seek its own advice and notify the Bookrunners
accordingly. Placees are advised to consult with their own advisers
regarding the tax aspects of the subscription for New Ordinary
Shares.
The Company and the Bookrunners are not liable to bear any taxes
that arise on a sale of New Ordinary Shares subsequent to their
acquisition by Placees, including any taxes arising otherwise than
under the laws of the United Kingdom. Each prospective Placee
should, therefore, take its own advice as to whether any such tax
liability arises and notify the Bookrunners and the Company
accordingly. Furthermore, each prospective Placee agrees to
indemnify on an after-tax basis and hold each of the Bookrunners
and/or the Company and their respective affiliates harmless from
any and all interest, fines or penalties in relation to stamp duty,
stamp duty reserve tax and all other similar duties or taxes in any
jurisdiction to the extent that such interest, fines or penalties
arise from the unreasonable default or delay of that Placee or its
agent.
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, whether
inside or outside the UK, by them or any other person on the
subscription, acquisition, transfer or sale by them of any New
Ordinary Shares or the agreement by them to subscribe for, acquire,
transfer or sell any New Ordinary Shares.
No statement in the Placing Documents is intended to be a profit
forecast or estimate, and no statement in the Placing Documents
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. Past performance is no guide to future performance and
persons needing advice should consult an independent financial
adviser.
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 New Ordinary Shares to be issued pursuant to the Placing
will not be admitted to trading on any stock exchange other than
AIM, a market operated by the London Stock Exchange.
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, the Placing Documents.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IOEFMMMMGVNGRZG
(END) Dow Jones Newswires
November 16, 2018 02:00 ET (07:00 GMT)
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