TIDMOSI
RNS Number : 1283H
Osirium Technologies PLC
22 November 2022
The information contained within this announcement is deemed by
the Company to constitute inside information pursuant to Article 7
of EU Regulation 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 as amended.
22 November 2022
Osirium Technologies plc
("Osirium" or the "Company" or, together with its subsidiary,
the "Group")
Proposed Placing and Subscription, Board Changes and Notice of
General Meeting
Osirium Technologies plc (AIM: OSI), a UK-based leading vendor
of cloud-based cybersecurity software, is pleased to announce that
it has conditionally raised GBP1.53 million before expenses by way
of:
-- a placing of 63,750,000 new ordinary shares of 1p each in the
capital of the Company (the "Placing Shares"), at a price of 2
pence per share (the "Issue Price") to raise GBP1,275,000 (the
"Placing"); and
-- an issue of 12,750,000 new ordinary shares of 1p each in the
capital of the Company (the "Subscription Shares") to certain
Directors of the Company and others at the Issue Price to raise
GBP255,000 (the "Subscription").
The Company also announces a number of Board changes that will
take effect on 1 January 2023, conditional on the completion of the
Placing and Subscription, including the appointment of Stuart
McGregor, current Sales Director, as Chief Executive Officer of the
Company.
Placing and Subscription highlights
-- Placing to raise GBP1,275,000 (before expenses), by way of a
proposed placing of 63,750,000 new Ordinary Shares with existing
and new institutional investors at the Issue Price. The Placing
will be carried out in two tranches:
-- 9,209,700 Placing Shares (the "First Placing Shares") will be
allotted and issued utilising the Company's existing share
allotment authorities granted at its 2022 annual general meeting
held on 7 June 2022 (the "2022 AGM"); and
-- 54,540,300 Placing Shares (the "Second Placing Shares") to be
allotted and issued conditional, inter alia, upon the passing of
the Resolution (the "Resolution") to grant authority to the
Directors to allot new ordinary share of 1p each in the capital of
the Company ("Ordinary Shares") otherwise than on a pre-emptive
basis at the Company's General Meeting expected to be held at 10:00
am on 12 December 2022 (the "General Meeting").
-- Subscription for an aggregate of 12,750,000 new Ordinary
Shares in the Company by certain Directors and others at the Issue
Price, to raise an additional GBP255,000, conditional on the
passing of the Resolution.
-- The Issue Price represents a discount of 50% to the closing
mid-market share price of an existing Ordinary Share on 21 November
2022, being the last business day prior to this announcement.
-- The Placing Shares and the Subscription Shares will in
aggregate represent approximately 62% of the Company's enlarged
share capital.
-- The net proceeds of the Placing and Subscription receivable
by the Company, which are expected to total approximately GBP1.36
million, will be used for general working capital purposes.
-- Allenby Capital Limited is acting as nominated adviser and
sole broker to the Company in respect of the Placing.
-- A Circular, containing further details of the Placing and
Subscription and a notice convening the General Meeting, will
shortly be made available to Shareholders and a copy will be
available on the Company's website, www.osirium.com .
Operational highlights
-- The Board's strategic focus is to reduce the timeframe to the
Company becoming cash flow break-even by maintaining the positive
growth achieved in the year to date, combined with a
rationalisation of the Group's cost base.
-- The Board has identified GBP1 million of annualised cost
savings, GBP650,000 of which have been implemented in the year to
date and the balance of which are expected to be implemented by the
start of 2023.
-- The following Board changes will be taking effect from 1
January 2023 conditional on completion of the Placing and
Subscription:
o Stuart McGregor, current Sales Director, will be appointed as
Chief Executive Officer
o David Guyatt, current Chief Executive Officer, will become
Executive Chairman in a part-time capacity
o Simon Lee, current Chairman, will be appointed as Senior
Independent Non-Executive Director and step down as Chairman
o Steve Purdham, Non-Executive Director, will step down from the
Board in order to pursue other business interests and Simon Hember
will be appointed chair of the Remuneration Committee.
David Guyatt, Chief Executive Officer, commented:
"We have made considerable strides against our financial and
strategic objectives over the course of the year, with our annual
recurring revenue indicating record growth for the year. Our
customer acquisition continues apace and, through the maturing of
our product suite, we are now in an even greater position to expand
our engagement with existing customers. Through the proposed
fundraise and the intended further rationalisation of our cost
base, we expect to accelerate the time to cash flow break-even and
fuel our long-term growth ambitions. I would like to thank all
shareholders for their support in helping us unlock the Group's
potential.
"With our initial product vision now established and gaining
market momentum, it is the right time to transition our leadership
team and see the Group through its next stage of growth. Stuart
McGregor possesses a deep knowledge of the Group's product suite
and customers, together with a wealth of experience in IT sales in
the UK and internationally, and represents an excellent fit for the
Group's strategic aims. At the same time, I would like to thank
Steve Purdham for his contribution to the Board over the past few
years. As Executive Chairman as of January 2023, I look forward to
continuing my active involvement on the Osirium Board, with a
strategic focus on scaling the market demand for Privileged
Security."
Background to and reasons for the Placing and Subscription
Osirium is a UK-based leading provider of cloud-based
cybersecurity and IT automation software to organisations in the UK
and internationally. The Group's complementary product portfolio
has been purposely built from the ground up to blend powerful
functionality with simple deployment - a key aspect of the Group's
differentiation. This is gaining increased brand value and
appreciation within the core mid-market space.
In 2022 year-to-date, the Company has made significant financial
and strategic progress, reporting bookings for the first nine
months of the year in excess of the total bookings achieved in any
prior year and delivering robust ARR SaaS growth. This is alongside
average contract values also increasing, reflecting the return to,
and increase in demand for, Osirium's products and the
stabilisation in its end markets.
This growth is underpinned by not only its Privileged Access
Management solution, but also its Privileged Process Automation and
its Privileged Endpoint Management solutions, which have emerged as
standalone products in 2022. As a result, its product suite can be
sold independently or as a bundled package. This offering enables
the Group to cross-sell and upsell to customers as part of its
stated 'Land, Expand and Renew' growth model. The Directors believe
this model is validated by the Group's rate of customer acquisition
throughout 2021 and in 2022 to date.
Current trading and prospects
As set out in its Q3 2022 trading update, announced on 1
November 2022, the Company achieved bookings for the nine months to
September 2022 of GBP2.52 million, which is in excess of the total
bookings recorded in any prior full year. The Company's annual
recurring revenue ("ARR") at September 2022 was GBP1.74 million, an
increase of 30.0% over the 12 months to 30 September 2022.
Managing costs remains one of the most important priorities for
the business, and the growth in revenues experienced during the
period is steadily bringing forward the Group's cash flow
break-even point. The Group has implemented measures which are
delivering material cost savings within the business without
affecting the Company's ability to continue to grow its business.
The Board has implemented GBP650,000 of annualised cost savings in
the business so far in 2022 and has identified a further GBP350,000
of annualised cost saving measures which will be taking effect from
1 January 2023 conditional on completion of the Placing and
Subscription. The Directors consider that this total GBP1 million
of annualised cost savings will contribute towards shortening the
timeframe by which the Company will become cash flow
break-even.
Notwithstanding the progress made in the year to date, as
announced at the time of the fundraise in February of this year,
the Company requires to raise additional working capital. The
Directors believe that the momentum seen in the past 12 months
demonstrates the market opportunity for the Group's suite of
products and therefore considers that it is appropriate to conduct
the Placing and Subscription in order to enable to the Company to
continue to pursue its growth strategy.
The Placing and Subscription
Further details of the Placing and Subscription are set out
below.
The first tranche of the Placing will not be conditional upon
the passing of the Resolution or the allotment and issue of the
Second Placing Shares and the Subscription Shares.
The second tranche of the Placing and the Subscription is
conditional, inter alia, upon the passing of the Resolution at the
General Meeting. Shareholders should be aware that if the
Resolution is not approved at the General Meeting, the second
tranche of the Placing and the Subscription will not proceed and
the Directors would immediately have to re-evaluate the strategy
and outlook of the Group. Shareholders are therefore urged to vote
in favour of the Resolution, which the Directors consider to be in
the best interests of Shareholders and the Company as a whole.
Use of Proceeds
The net proceeds of the Placing and the Subscription (being
approximately GBP1.36 million, assuming that all Placing Shares and
Subscription Shares are subscribed for) will be used for general
working capital purposes.
The Directors consider that the Placing and Subscription will
position the Group to capture the substantial market opportunity
available to deliver long term shareholder value.
Proposed Board Changes
In order to align the management team with the Group's strategy
of driving top line growth and conditional on the completion of the
Placing and Subscription, the Company has appointed Stuart McGregor
as Chief Executive Officer and as a member of the Board of
Directors. The appointment will take effect 1 January 2023 to
provide an orderly handover.
Stuart is a Sales leader with over 20 years in the IT industry.
Stuart has a breadth of experience in leading direct and channel
sales teams of SaaS and on premise solutions into mid-market and
enterprises across EMEA. As Sales Director for Privileged Access
Management vendor, Bomgar, where he established an EMEA operation
and led the UK and Northern Europe sales teams. Stuart saw local
revenues grow significantly and sales operations created in the UK,
Netherlands, Germany and France.
Stuart was also a member of Bomgar's Global Leadership team and
managed the integration of sales operations of the acquired
Lieberman, Avecto and BeyondTrust businesses. Stuart has also held
successful sales and consulting management positions at EMC, UK
start-up software company Thunderhead, BroadVision and Oracle.
Most recently he has spent over three years building and leading
the Group's sales teams as Osirium's Sales Director. During this
time he has worked closely with the executive team in implementing
the Group's go-to-market strategy, building key client
relationships and building new business pipeline.
Also effective 1 January 2023 (and conditional on the completion
of the Placing and Subscription), David Guyatt, the Company's
existing Chief Executive Officer will assume the position of
Executive Chairman in a part-time capacity. Simon Lee, the Group's
current Chairman, will stand down as Chairman and take on the role
of Senior Independent Non-Executive Director and current
Non-Executive Director, Steve Purdham will be stepping down from
the Board to pursue other business interests and Simon Hember will
be appointed chair of the Remuneration Committee. Steve was
principally involved in the Company's admission to AIM on the
London Stock Exchange in 2016 and has been with the Company since.
The Company takes this opportunity to thank him for his
contributions. Following these Board changes, the composition of
the Company's Board of Directors will be as follows:
-- Stuart McGregor, Chief Executive Officer
-- David Guyatt, Executive Chairman
-- Rupert Hutton, Chief Financial Officer
-- Simon Lee, Senior Independent Non-Executive Director
-- Simon Hember, Independent Non-Executive Director
The following information is provided pursuant to Rule 17 and
Schedule 2(g) of the AIM Rules: Stuart Lindsay McGregor, aged 54,
does not have any current directorships and has not held any
directorships in the past five years.
Further details of the Placing
Under the Placing, the Company has conditionally raised
GBP1,275,000 (before expenses) through a placing of 63,750,000
Ordinary Shares at 2pence per share with institutional and other
investors. The Company has entered into a Placing Agreement with
Allenby Capital under which Allenby Capital has agreed to use its
reasonable endeavours to procure Placees for the Placing Shares at
the Issue Price. The Placing has not been underwritten.
The Placing Shares will represent approximately 52% of the
enlarged share capital of the Company following completion of the
Placing and the Subscription.
The Company currently has limited authority to issue new
ordinary shares for cash on a non-pre-emptive basis. Accordingly,
the Placing is being conducted in two tranches.
The first tranche to raise a total of GBP184,194 by the issue of
9,209,700 Placing Shares (being the First Placing Shares) at the
Issue Price, has been carried out within the Company's existing
share allotment authorities granted at the 2022 AGM. The allotment
of the First Placing Shares is conditional, inter alia, upon
admission to AIM (First Admission) and the Placing Agreement
becoming unconditional in respect of the First Placing Shares and
not being terminated in accordance with its terms prior to First
Admission. Application has been made for the First Placing Shares
to be admitted to trading on AIM and it is expected that First
Admission will take place on 25 November 2022. The First Placing is
not conditional on completion of the second tranche of the Placing
or completion of the Subscription.
The second tranche of the Placing, to raise a total of GBP
1,090,806 by the issue of 54,540,300 Placing Shares (being the
Second Placing Shares) at the Issue Price , is conditional upon,
inter alia, the passing of the Resolution to be put to Shareholders
at the General Meeting (granting the Directors authority to allot
new ordinary shares otherwise than on a pre-emptive basis). In
addition, the allotment of the Second Placing Shares is
conditional, inter alia, on the Placing Agreement becoming
unconditional in respect of the Second Placing Shares and not being
terminated in accordance with its terms prior to admission to AIM (
Second Admission). It is expected that Second Admission will take
place on 14 December 2022.
The Placing is conditional, so far as concerns the Second
Placing Shares upon, inter alia, Second Admission occurring by no
later than 8.00 a.m. on 14 December 2022 (or such later time and/or
date as the Company and Allenby Capital may agree, not being later
than 8.00 a.m. on 30 December 2022). If such condition is not
satisfied or, if applicable, waived, the placing of the Second
Placing Shares will not proceed.
The Placing Shares will be issued credited as fully paid and
will rank pari passu in all respects with the Existing Ordinary
Shares, including the right to receive dividends and other
distributions declared on or after the date on which they are
issued.
It is expected that CREST accounts will be credited on the
relevant day of Admission and that share certificates (where
applicable) will be despatched within five working days of
Admission.
The Placing will entitle holders of the Company's GBP2,700,000
convertible unsecured 7.5% notes, due in 2024 and created by the
loan note instrument dated 21 October 2019 (the "Convertible Loan
Notes"), to elect to convert the principal amount of their loan
notes into fully paid Ordinary Shares ranking pari passu in all
respects with the Ordinary Shares of the Company in issue on the
date of conversion. Conversion will be at a rate equal to 6 pence
per share, being the placing price of the Company's last placing
announced on 11 February 2022. Notice of conversion may be given by
holders of the Convertible Loan Notes at any time within 20
business days of First Admission.
Further details of the Subscription and Director dealings
Concurrent with and conditional on the Placing, certain
Directors (including their families) and others have agreed to
subscribe for an aggregate of 12,750,000 new Ordinary Shares at the
Issue Price to raise an additional GBP255,000.
The following Directors and proposed Director of the Company
have subscribed for Subscription Shares pursuant to the
Subscription:
Director/proposed Existing number Number of Subscription Total number
Director of Ordinary Shares Shares of Ordinary Shares
following the
Subscription
Simon Lee 906,083 750,000 1,656,083
David Guyatt* 4,913,109 5,000,000 9,913,109
Rupert Hutton* 253,809 500,000 753,809
Stuart McGregor 146,523 750,000 896,523
*includes spouse
Further details of the Subscription by the Directors are set out
in the table below ( Notification and public disclosure of
transactions by persons discharging managerial responsibilities and
persons closely associated with them ) .
Related party transactions
The participation of certain Directors in the Subscription
constitutes a related party transaction pursuant to the AIM Rules
for Companies. The Directors (excluding Simon Lee, David Guyatt and
Rupert Hutton, each of whom has participated in the Subscription),
having consulted with the Company's nominated adviser, Allenby
Capital Limited, consider the terms of the Subscription to be fair
and reasonable insofar as the Company's shareholders are
concerned.
Admission to trading and total voting rights
Application has been made for the admission of the First Placing
Shares to trading on AIM ("First Admission"), which is expected to
occur on 25November 2022. Following First Admission, the number of
Ordinary Shares in issue and number of voting rights will be
55,258,318. The above figure may be used by shareholders as the
denominator for the calculations by which they will determine
whether they are required to notify their interest in, or a change
to their interest in, the Company under the Financial Conduct
Authority's Disclosure Guidance and Transparency Rules
Posting of Circular and notice of General Meeting
The Company will shortly be making available to Shareholders a
circular (the "Circular") containing a notice of the General
Meeting, to be held at the Company's offices at Theale Court, 11-13
High Street, Theale, RG7 5AH at 10:00 a.m. on 12December 2022. A
copy of the Circular will be available on the Company's website,
www.osirium.com .
Expected timetable
2022
Posting of the Circular and the 22 November
Form of Proxy
Admission and commencement of dealings
in the First Placing Shares 08:00 a.m. on 25 November
Latest time and date for receipt
of completed Forms of Proxy or electronic
proxy appointment for use at the 10.00 a.m. on 8 December
General Meeting
General Meeting 10.00 a.m. on 12 December
Announcement of the results of the Before 2.00 p.m. on 12 December
General Meeting
Admission and commencement of dealings
in the Second Placing Shares and 08:00 a.m. on 14 December
the Subscription Shares
Words and expressions defined in the Circular have the same
meanings where used herein.
- Ends -
Contacts:
Osirium Technologies plc Tel: +44 (0)1183 242 444
David Guyatt, CEO
Rupert Hutton, CFO
Allenby Capital Limited (Nominated adviser and broker) Tel: +44 (0)20 3328 5656
James Reeve / George Payne (Corporate Finance)
Tony Quirke (Sales and Corporate Broking)
Alma PR (Financial PR adviser) Tel: +44 (0)20 3405 0205
Hilary Buchanan osirium@almapr.co.uk
Kieran Breheny
Will Ellis Hancock
About Osirium Technologies Plc
Osirium Technologies plc (AIM: OSI) is a leading UK-based
cybersecurity software vendor delivering Privileged Access
Management (PAM), Privileged Endpoint Management (PEM) and Osirium
Automation solutions that are uniquely simple to deploy and
maintain.
With privileged credentials involved in over 80% of security
breaches, customers rely on Osirium PAM's innovative technology to
secure their critical infrastructure by controlling 3(rd) party
access, protecting against insider threats, and demonstrating
rigorous compliance. Osirium Automation delivers time and cost
savings by automating complex, multi-system processes securely,
allowing them to be delegated to Help Desk engineers or end-users
and to free up specialist IT resources. The Osirium PEM solution
balances security and productivity by removing risky local
administrator rights from users, while at the same time allowing
escalated privileges for specific applications.
Founded in 2008 and with its headquarters in Reading, UK, the
Company's shares were admitted to trading on AIM in April 2016. For
further information please visit www.osirium.com .
Notice to Distributors
Solely for the purposes of the temporary product intervention
rules made under sections S137D and 138M of the Financial Services
and Markets Act 2000 and the FCA Product Intervention and Product
Governance Sourcebook (together, the "Product Governance
Requirements"), and disclaiming all and any liability, whether
arising in tort, contract or otherwise, which any "manufacturer"
(for the purposes of the Product Governance Requirements) may
otherwise have with respect thereto, the Placing Shares have been
subject to a product approval process, which has determined that
the Placing Shares are: (i) compatible with an end target market of
retail investors and investors who meet the criteria of
professional clients and eligible counterparties, as defined under
the FCA Conduct of Business Sourcebook COBS 3 Client
categorisation, and are eligible for distribution through all
distribution channels as are permitted by the FCA Product
Intervention and Product Governance Sourcebook (the "Target Market
Assessment").
Notwithstanding the Target Market Assessment, distributors
should note that: the price of the Placing Shares may decline and
investors could lose all or part of their investment; the Placing
Shares offer no guaranteed income and no capital protection; and an
investment in the Placing Shares is compatible only with investors
who do not need a guaranteed income or capital protection, who
(either alone or in conjunction with an appropriate financial or
other adviser) are capable of evaluating the merits and risks of
such an investment and who have sufficient resources to be able to
bear any losses that may result therefrom. The Target Market
Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the Placing. Furthermore, it is noted that, notwithstanding the
Target Market Assessment, Allenby Capital Limited 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 the FCA Conduct
of Business Sourcebook COBS 9A and 10A respectively; or (b) a
recommendation to any investor or group of investors to invest in,
or purchase, or take any other action whatsoever with respect to
the Placing Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the Placing Shares and determining
appropriate distribution channels.
Notification and public disclosure of transactions by persons
discharging managerial responsibilities and persons closely
associated with them.
1 Details of the person discharging managerial responsibilities
/ person closely associated (PCA)
a) Name
PDMRs: Simon Lee Chairman
David Guyatt CEO
----------------------
Rupert Hutton CFO
----------------------
Stuart McGregor Sales Director (PDMR)
----------------------
PCAs: Emma Hutton PCA with Rupert Hutton
-------------------------- ---------------------------------------------
2 Reason for the notification
-------------------------------------------------------------------------
a) Position/status See 1a) above
-------------------------- ---------------------------------------------
b) Initial notification Initial notification
/Amendment
-------------------------- ---------------------------------------------
3 Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
-------------------------------------------------------------------------
a) Name Osirium Technologies plc
-------------------------- ---------------------------------------------
b) LEI 213800CTPGYQ4POIC338
-------------------------- ---------------------------------------------
4 Details of the transaction(s): section to be repeated for
(i) each type of instrument; (ii) each type of transaction;
(iii) each date; and (iv) each place where transactions have
been conducted
-------------------------------------------------------------------------
a) Description of the Ordinary Shares of nominal value 1
financial instrument, pence each
type of instrument
Identification code GB00BZ58DH10
-------------------------- ---------------------------------------------
b) Nature of the transaction Placing for new ordinary shares
-------------------------- ---------------------------------------------
c) Price(s) and volume(s) Price: 2 pence
Volumes:
Simon Lee 750,000
David Guyatt 5,000,000
----------
Rupert Hutton 250,000
----------
Stuart McGregor 750,000
----------
Emma Hutton 250,000
----------
-------------------------- ---------------------------------------------
d) Aggregated information N/A
- Aggregated volume
- Price
-------------------------- ---------------------------------------------
e) Date of the transaction 21 November 2022 to be completed 14
December 2022
-------------------------- ---------------------------------------------
f) Place of the transaction Outside a trading venue
-------------------------- ---------------------------------------------
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