TIDMXSG
RNS Number : 3173R
Xeros Technology Group plc
05 March 2021
For immediate release
THIS ANNOUNCEMENT, INCLUDING THE INFORMATION CONTAINED HEREIN,
IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION,
IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE
UNITED STATES, CANADA, JAPAN, AUSTRALIA, THE REPUBLIC OF SOUTH
AFRICA, THE REPUBLIC OF IRELAND OR ANY OTHER JURISDICTION WHERE TO
DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF THAT JURISDICTION. PLEASE SEE THE IMPORTANT NOTICES
AT THE OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT
CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN
OFFER TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY NEW ORDINARY
SHARES OF XEROS TECHNOLOGY GROUP PLC IN THE UNITED STATES, CANADA,
JAPAN, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF
IRELAND OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE,
PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN
ARTICLE 7 OF THE MARKET ABUSE REGULATION EU NO. 596/2014, AS
RETAINED AND APPLICABLE IN THE UK PURSUANT TO S3 OF THE EUROPEAN
UNION (WITHDRAWAL) ACT 2018 ("MAR"). UPON THE PUBLICATION OF THIS
ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN
THE PUBLIC DOMAIN.
TERMS NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS GIVEN
TO THEM IN THE COMPANY'S ANNOUNCEMENT RELEASED AT 07:00 A.M. 5
MARCH 2021.
Xeros Technology Group plc
("Xeros", the "Group" or the "Company")
Result of Oversubscribed Placing
and Proposed Open Offer
Xeros Technology Group plc (AIM: XSG), the developer and
licensor of technologies which reduce the environmental impact and
cost of clothing and fabrics, is pleased to announce that further
to the Company's announcement released at approximately 07.00 a.m.
this morning (the "Launch Announcement"), the Bookbuild has closed
and the Company has conditionally raised gross proceeds of
approximately GBP8.0 million, through the successful placing of
3,333,333 Placing Shares at the Issue Price of 240 pence per
Ordinary Share.
The Placing Shares represent approximately 16.7 per cent. of the
Company's Existing Ordinary Shares. The Issue Price represents a
discount of approximately 1.23 per cent. to the closing price on
the London Stock Exchange of 243 pence per Ordinary Share on 4
March 2021.
In addition to the Placing, the Company intends to provide all
Qualifying Shareholders with the opportunity to subscribe for an
aggregate of up to 416,586 Open Offer Shares at the Issue Price, to
raise up to approximately GBP1.0 million (before expenses), on the
basis of 1 Open Offer Share for every 48 Existing Ordinary Shares
held on the Record Date. Qualifying Shareholders subscribing for
their full entitlement under the Open Offer may also request
additional Open Offer Shares through an excess application facility
(the "Excess Application Facility").
The Placing and Open Offer are conditional upon, inter alia, the
passing of the Resolutions at the General Meeting and upon the
Placing Agreement becoming unconditional in all respects. The
Placing is not conditional on the Open Offer proceeding or on any
minimum take-up under the Open Offer.
General Meeting and Shareholder Approval
For the New Ordinary Shares to be admitted to trading on AIM,
Shareholder approval is required:
a) by way of ordinary resolution to give the Directors authority
to allot the New Ordinary Shares; and
b) by way of a special resolution to dis-apply statutory
pre-emption rights in respect thereof.
The authorities referred to above are in addition to the
Company's existing general shareholder authorities to allot
Ordinary Shares for cash on a non-pre-emptive basis.
In order to obtain the necessary shareholder approval, a General
Meeting is to be held at the offices of Squire Patton Boggs (UK)
LLP at Premier Place, 2 & A Half Devonshire Square, London EC2M
4UJ at 10.00 a.m. on 25 March 2021 at which the Resolutions will be
proposed. A Circular containing a notice of General Meeting is
expected to be sent to shareholders on 8 March 2021. The
shareholder Circular and notice of General Meeting will be made
available on the Company's website at www.xerostech.com .
Pursuant to the Stay at Home Order introduced by the UK
Government on 6 January 2021 to manage the Covid-19 virus
(coronavirus), public gatherings of more than two people and
non-essential travel are currently prohibited. The Company will
therefore convene the General Meeting with the minimum quorum of
two shareholders necessary to conduct the meeting, and it is
expected that the Company's Chairman, Klaas de Boer, and Mark
Nichols (Chief Executive) will form the necessary quorum. All other
Shareholders must not seek to attend the General Meeting in
person.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2021
Announcement Launch of ABB 5 March
Announcement of Result of ABB 5 March
Record date of Open Offer 6:00 p.m. 5 March
Ex-entitlement date for Open Offer 7:00 a.m. 8 March
Publication of Circular & Form of Proxy 8 March
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts 8:00 a.m. 9 March
of Qualifying CREST Shareholders in CREST
Latest recommended time and date for requesting withdrawal of Open Offer entitlements from 4:30 p.m. 17 March
CREST
Latest time and date for depositing Open Offer entitlements into CREST 3:00 p.m. 18 March
Latest time and date for splitting application forms (to satisfy bona fide market claims only) 3:00 p.m. 19 March
Latest time and date for receipt of Forms of Proxy and CREST voting instructions 10:00 a.m. 23 March
Latest time and date for receipt of Application Forms and payment in full under the Open Offer 11:00 a.m. 23 March
and settlement of relevant CREST instructions (as appropriate)
Announcement of results of Open Offer 24 March
General Meeting 10:00 a.m. 25 March
Announcement of results of General Meeting 25 March
Admission of the New Ordinary Shares 08:00 a.m. 26 March
New Ordinary Shares credited to CREST Members' accounts in respect of the Placing Shares and 26 March
Open Offer Shares
Dispatch of definitive share certificates in certified form By 9 April
Notes
1. Each of the times and dates set out in the above timetable
and mentioned in this Document is subject to change by the Company
(with the agreement of finnCap), 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 Document are to London time (unless otherwise stated).
Background to and reasons for the Fundraising
Following on from the successful independent evaluation of the
efficacy of the XFiltra design in July 2020, the Company continues
to develop the commercial opportunity for this proprietary
microfibre filtration technology. The Company is working with a
leading product design consultancy to produce, in Q2 2021, a
standardised product design which can be integrated into all
domestic washing machines with a view to then running consumer
field trials during 2021 with a number of OEMs with whom the
Company is already in discussion. With successful field trials
completed by the end of 2021, the Directors would anticipate being
in a position to secure first commercial licensing revenues in a
domestic application in 2023.
Commercialisation of the XFiltra represents an additional
strategic development for Xeros, incremental to the Company's XDrum
and XOrb related activities. Given this, the Board intends to use
approximately GBP2.5m of the Net Proceeds to action the
commercialisation process, as envisaged above. Funds will be
deployed in employing additional technical capability to work with
OEM partners, to further increase the patent portfolio around
XFiltra and to extend its work on filtration standards with
regulatory bodies in Europe to India, China and the United States,
as well as significantly increasing the Company's marketing
activity.
As previously reported, the continuing disruption of the
COVID-19 pandemic has impacted the physical activities required for
the Company's licensees to enter their markets with Xeros'
technology in India and China. Progress has, however, been
significant with XDrum machine designs now ready for full
production with licensees planning to enter their markets over the
next nine months. Ramsons, the Company's garment finishing partner,
has already entered the garment finishing market in South Asia in
late 2020. Market validation for the Company's technologies has
also advanced significantly with an independent third party
evaluation in India confirming the benefits case of the technology.
With evidence of successful market entries, the Company plans to
increase revenues further by entering into licenses with leading
incumbents in additional geographies.
Whilst the Company's technology transfer activities have
continued on a remote-working basis, the effect of COVID-19 has
been to delay receipt of license income, as explained above, so
whilst the Company has reduced the monthly rate of cash burn to its
target of approximately GBP400,000 per month, in line with
previously stated expectations, the Directors believe that further
funding is needed to ensure that the Company is sufficiently
capitalised to absorb the impact of these delays and any further
COVID-19 related impacts. Approximately GBP1.5m of the Net Proceeds
will be deployed in this regard. The balance of the Net Proceeds
will also serve to meet the expectations of the Company's current
and prospective licensees, all of whom are large enterprises, to
ensure the Company meets its medium-term contractual
commitments.
Details of The Fundraising
The Company is undertaking the Fundraise to raise up to GBP9.0
million (before fees and expenses) from new and existing investors,
through the Placing to raise GBP8.0 million plus the Open Offer to
raise up to an additional GBP1.0 million.
The Issue Price represents a discount of approximately 1.23 per
cent. from the Closing Price. It is anticipated the New Ordinary
Shares will represent approximately 15.8 per cent. of the Enlarged
Share Capital following Admission (assuming full take up under the
Open Offer).
The New Ordinary Shares will be free of all liens, charges and
encumbrances and will, when issued and fully paid, be identical to
and rank pari passu in all respects with the Existing Ordinary
Shares, including the right to receive all future distributions,
declared, paid or made in respect of the Ordinary Shares following
the date of Admission.
The Placing Agreement
In connection with the Placing, the Company has entered into the
Placing Agreement pursuant to which finnCap has agreed, in
accordance with its terms, to use reasonable endeavours to procure
placees ("Placees") for the Placing Shares at the Issue Price. The
Placing is not underwritten.
In accordance with the terms of the Placing Agreement, the
Placing is conditional upon, amongst other things, the passing of
the Resolutions, the conditions in the Placing Agreement being
satisfied or (if applicable) waived and the Placing Agreement not
having been terminated in accordance with its terms prior to
Admission occurring on or before 26 March 2021 (or such later date
as finnCap may agree).
The Placing Agreement contains certain warranties given by the
Company in favour of finnCap concerning, amongst other things, the
accuracy of information given in this Announcement and the Circular
made by the Company in respect of the Placing as well as other
matters relating to the Group and its business.
The Placing Agreement is terminable by finnCap in certain
circumstances up until the time of Admission, including, inter
alia, should there be a breach of a warranty contained in the
Placing Agreement or a force majeure event takes place or a
material adverse change occurs to the business of the Company or
the Group. The Company has also agreed to indemnify finnCap against
all losses, costs, charges and expenses which finnCap may suffer or
incur as a result of, occasioned by or attributable to the carrying
out of its duties under the Placing Agreement.
The Placing is not conditional on the Open Offer proceeding or
on any minimum take-up under the Open Offer.
Admission of the New Ordinary Shares
Application will be made to the London Stock Exchange for the
New Ordinary Shares to be admitted to trading on AIM. Subject,
inter alia, to the passing of the Resolutions at the General
Meeting it is expected that Admission will become effective in
respect of, and that dealings on AIM will commence in, all of the
New Ordinary Shares, on or around 26 March 2021.
It is expected that CREST ("CREST") accounts of the investors in
the New Ordinary Shares who hold their Ordinary Shares in CREST
will be credited with their New Ordinary Shares on 26 March 2021.
In the case of investors in the New Ordinary Shares holding their
Ordinary Shares in certificated form, it is expected that
certificates will be dispatched by 9 April 2021. Pending dispatch
of the share certificates or the crediting of CREST accounts, the
Registrar ("Registrar") will certify any instruments of transfer
against the register.
Open Offer
In order to provide all Qualifying Shareholders with an
opportunity to participate, the Company is intending to conduct an
Open Offer to provide those shareholders the opportunity to
subscribe at the Issue Price for an aggregate of 416,586 Open Offer
Shares. This will allow Qualifying Shareholders to participate on a
pre-emptive basis whilst providing the Company with the flexibility
to raise additional equity capital to further improve its financial
position.
Qualifying Shareholders will also be offered the opportunity to
apply for additional Open Offer Shares in excess of their pro rata
entitlements to the extent that other Qualifying Shareholders do
not take up their entitlements in full. In the event applications
exceed the maximum number of Open Offer Shares available, the
Company will decide on the basis for allocation, however if this
scenario occurs, preference is likely to be given to Qualifying
Shareholders with smaller shareholdings (who historically may have
had less opportunity to participate in placings conducted by the
Company). The Open Offer Shares will not be placed subject to
clawback nor will they be underwritten. Consequently, there may be
fewer than 416,586 Open Offer Shares issued pursuant to the Open
Offer.
The Open Offer is conditional upon, inter alia, the approval of
Shareholders of the Resolutions at the General Meeting and upon the
Placing Agreement becoming unconditional in all respects.
Application will be made to the London Stock Exchange for
admission of the Open Offer Shares to trading on AIM. Admission of
the Open Offer Shares is expected to take place, and dealings on
AIM are expected to commence, at 8.00 a.m. on 26 March 2021.
Open Offer Entitlement
On, and subject to the terms and conditions of the Open Offer,
the Company invites Qualifying Shareholders to apply for their Open
Offer Entitlement of Open Offer Shares at the Issue Price. Each
Qualifying Shareholder's Open Offer Entitlement has been calculated
on the following basis:
1 Open Offer Share for every 48 Existing Ordinary Shares held at
the Record Date
Open Offer Entitlements will be rounded down to the nearest
whole number of Ordinary Shares.
Excess Application Facility
Qualifying Shareholders are also invited to apply for additional
Open Offer Shares (up to the total number of Open Offer Shares
available to Qualifying Shareholders under the Open Offer) pursuant
to an Excess Application Facility. Any Open Offer Shares not issued
to a Qualifying Shareholder pursuant to their Open Offer
Entitlement will be apportioned between those Qualifying
Shareholders who have applied under the Excess Application Facility
at the sole discretion of the Board, provided that no Qualifying
Shareholder shall be required to subscribe for more Open Offer
Shares than he or she has specified on the Application Form or
through CREST.
The Open Offer Shares will, when issued and fully paid, rank
pari passu in all respects with the Ordinary Shares in issue at
that time, including the right to receive all dividends and other
distributions declared, made or paid after the date of Second
Admission.
Qualifying Shareholders should note that the Open Offer is not a
"rights issue". Invitations to apply under the Open Offer are not
transferable unless to satisfy bona fide market claims. Qualifying
non-CREST Shareholders should be aware that the Application Form is
not a negotiable document and cannot be traded. Qualifying
Shareholders should also be aware that in the Open Offer, unlike in
a rights issue, any Open Offer Shares not applied for will not be
sold in the market nor will they be placed for the benefit of
Qualifying Shareholders who do not apply for Open Offer Shares
under the Open Offer.
Settlement and dealings
Application will be made to the London Stock Exchange for
admission of the Open Offer Shares. It is expected that Admission
will become effective and that dealings will commence at 8.00 a.m.
on 26 March 2021.
Overseas Shareholders
The Open Offer Shares have not been and are not intended to be
registered or qualified for sale in any jurisdiction other than the
United Kingdom. Accordingly, unless otherwise determined by the
Company and effected by the Company in a lawful manner, the
Application Form will not be sent to Shareholders with registered
addresses in any jurisdiction other than the United Kingdom since
to do so would require compliance with the relevant securities laws
of that jurisdiction. The Company reserves the right to treat as
invalid any application or purported application for Open Offer
Shares which appears to the Company or its agents or professional
advisers to have been executed, effected or despatched in a manner
which may involve a breach of the laws or regulations of any
jurisdiction or if the Company or its agents or professional
advisers believe that the same may violate applicable legal or
regulatory requirements or if it provides an address for delivery
of share certificates for Open Offer Shares, or in the case of a
credit of Open Offer Shares in CREST, to a CREST member whose
registered address would not be in the UK.
Notwithstanding the foregoing and any other provision of the
Circular or the Application Form, the Company reserves the right to
permit any Qualifying Shareholder to apply for Open Offer Shares if
the Company, in its sole and absolute discretion, is satisfied that
the transaction in question is exempt from, or not subject to, the
legislation or regulations giving rise to the restrictions in
question.
This Announcement and the Circular together with the
accompanying Application Form, in the case of Qualifying non-CREST
Shareholders, contains the terms and conditions of the Open
Offer.
If a Qualifying Shareholder does not wish to apply for Open
Offer Shares he should not complete or return the Application Form
or send a USE message through CREST.
Qualifying non-CREST Shareholders
If you are a Qualifying non-CREST Shareholder you will receive
an Application Form which gives details of your Open Offer
Entitlement (as shown by the number of the Open Offer Shares
allocated to you). If you wish to apply for Open Offer Shares under
the Open Offer you should complete the Application Form in
accordance with the procedure for application set out in the
Circular and on the Application Form itself. The completed
Application Form, accompanied by full payment, should be returned
by post to Neville Registrars Limited, Neville House, Steelpark
Road, Halesowen B62 8HD, so as to arrive as soon as possible and in
any event no later than 11.00 a.m. on 23 March 2021.
Qualifying CREST Shareholders
Application will be made for the Open Offer Shares of Qualifying
CREST Shareholders to be admitted to CREST. It is expected that the
Open Offer Shares will be admitted to CREST on 26 March 2021.
Applications through the CREST system may only be made by the
Qualifying CREST Shareholder originally entitled or by a person
entitled by virtue of a bona fide market claim. If you are a
Qualifying CREST Shareholder, no Application Form will be sent to
you but you will receive credits to your appropriate stock account
in CREST in respect of your Open Offer Entitlements. You should
refer to the procedure for application set out in the Circular. The
relevant CREST instruction must have settled by no later than 11.00
a.m. on 23 March 2021.
Action to be taken
Open Offer
Qualifying non-CREST Shareholders wishing to apply for Open
Offer Shares must complete the Application Form in accordance with
the instructions set out in the Circular (Terms and Conditions of
the Open Offer) and on the Application Form and return it with the
appropriate payment to Neville Registrars Limited, at Neville
House, Steelpark Road, Halesowen B62 8HD, so as to arrive no later
than 11.00 a.m. on 23 March 2021.
If you do not wish to apply for any Open Offer Shares under the
Open Offer, you should not complete or return the Application Form.
If you are a Qualifying CREST Shareholder, no Application Form will
be sent to you. Qualifying CREST Shareholders will have Open Offer
Entitlements and Excess CREST Open Offer Entitlements credited to
their stock accounts in CREST. You should refer to the procedure
for application set out in the Circular (Terms and Conditions of
the Open Offer). The relevant CREST instructions must have settled
in accordance with the instructions in the Circular by no later
than 11.00 a.m. on 23 March 2021.
Qualifying CREST Shareholders who are CREST sponsored members
should refer to their CREST sponsors regarding the action to be
taken in connection with this Announcement, the Circular and the
Open Offer.
Related Party Transactions
Entrepreneurs Fund L.P., a Related Party (as defined by the AIM
Rules), will be participating in the Placing as follows:
Current Holding % of Existing Number of Holding % of Enlarged
Ordinary Placing Shares post Admission Share Capital
Shares
Entrepreneurs
Fund L.P. 5,142,535 25.7% 625,000 5,767,535 24.3%
The participation of Entrepreneurs Fund in the Placing
constitutes a related party transaction under the AIM Rules, by
virtue of Entrepreneurs Fund (and its affiliates) being classified
as significant shareholders in the Company.
The Directors (excluding Klaas de Boer) consider, having
consulted with finnCap (as the Company's nominated adviser), that
the terms of the participation in the Placing by Entrepreneurs Fund
are fair and reasonable insofar as the Company's Shareholders are
concerned.
Posting of Circular
The Company will post a Circular to Shareholders on 8 March
2021, containing a Notice of General Meeting, proxy form and full
details of the Open Offer including the Open Offer application
form. The Circular will also be available on the Company's website
at www.xerostech.com .
Recommendation
The Directors consider the Resolutions being proposed at the
General Meeting to be in the best interests of the Company and the
Shareholders as a whole. Consequently, the Directors are
recommending in the Circular that Shareholders vote in favour of
the Resolutions to be proposed at the General Meeting, as they
intend to do in respect of the 462,482 Existing Ordinary Shares
held, directly or indirectly, by them representing approximately
2.3 per cent. of the total voting rights of the Company.
Enquiries:
Xeros Technology Group plc Tel: 0114 321 6328
Mark Nichols, CEO
Paul Denney, CFO
www.xerostech.com
finnCap
Julian Blunt, Teddy Whiley (Corporate Finance)
Andrew Burdis, Sunila de Silva (ECM)
www.finncap.com +44 (0) 20 7220 0500
Notes for editors:
Forward-Looking Statements
This announcement contains forward-looking statements. These
statements relate to the Group's future prospects, developments and
business strategies. Forward-looking statements are identified by
their use of terms and phrases such as "potential", "estimate",
"expect", "may", "will" or the negative of such terms and phrases,
variations or comparable expressions, including references to
assumptions. The forward-looking statements in this announcement
are based on current expectations and are subject to risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by those statements. These
forward-looking statements speak only as at the date of this
announcement. No statement in this announcement is intended to
constitute a profit forecast or profit estimate for any period.
Neither the Directors nor the Company undertake any obligation to
update forward-looking statements other than as required by the AIM
Rules or by the rules of any other securities regulatory authority,
whether as a result of new information, future events or
otherwise.
Market Abuse Regulation
Market soundings, as defined in MAR, were taken in respect of
the Placing, with the result that certain persons became aware of
inside information, as permitted by MAR. That inside information is
set out in this announcement and has been disclosed as soon as
possible in accordance with paragraph 7 of article 17 of MAR.
Therefore, those persons that received inside information in a
market sounding are no longer in possession of inside information
relating to the Company and its securities.
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END
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(END) Dow Jones Newswires
March 05, 2021 03:48 ET (08:48 GMT)
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