TIDMBIOM

RNS Number : 9409Z

Biome Technologies PLC

24 September 2020

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, INTO OR FROM THE UNITED STATES, RUSSIA, CANADA, AUSTRALIA, REPUBLIC OF IRELAND, REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 ("MAR"). IN ADDITION, MARKET SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

24 September 2020

Biome Technologies plc

("Biome", "the Company" or "the Group")

Proposed Fundraise of GBP1.1 million

Notice of General Meeting

Biome Technologies plc, a leading bioplastics and radio frequency technology business, is pleased to announce that it has conditionally raised GBP1.1 million before expenses (the "Fundraise") by way of a placing of and subscription for 916,667 new ordinary shares in the Company ("New Ordinary Shares") at a price of 120 pence per share (the "Issue Price").

Highlights

-- Biome proposes to raise gross proceeds of GBP1.1 million via the Fundraise to accelerate Biome Bioplastics' growth and development

   --      Net proceeds of the Fundraise are expected to be used for: 

-- Growth capital needed to support revenue growth with existing customers and new bioplastics projects that are scaling up and are expected to drive a significant increase in revenues over the next 18 months, and the associated working capital requirements

-- Maintaining an increased investment in sales activities, development and logistics spending to support and further accelerate the growth of the Bioplastics business

-- Undertaking the Financing now will enable the Company to capture and support the momentum of the Bioplastics division

-- Market drivers in favour of bioplastics include the continued focus by leading brands as well as the public on environmental issues caused by non-biodegradable oil-based plastics and the need for alternatives

-- Pipeline of projects underway with a range of mid-sized and multi-national businesses expected to drive growth in the coming years from existing customers as well as new customers and new products

-- Key customers are based in the US - with the Group's internationally outsourced manufacturing, the business is not anticipating major disruption during withdrawal from the European Union

The Fundraise comprises a placing of 875,000 new ordinary shares (the "Placing") and a subscription for 41,667 new ordinary shares (the "Subscription"). Of the New Ordinary Shares, 256,997 will be issued pursuant to the Company's existing share authorities (the "First Placing Shares"). The issue of 618,003 New Ordinary Shares (the "Second Placing Shares") pursuant to the Placing and the issue of 41,667 New Ordinary Shares pursuant to the Subscription (the "Subscription Shares") are conditional on, inter alia, the approval of Shareholders at a general meeting of the Company to be held on 12 October 2020, further details of which are set out below.

Paul Mines, Chief Executive Officer of Biome, commented:

"Biome Bioplastics had a tremendous first half, notwithstanding the need to overcome issues arising from the pandemic and associated lockdowns. This Fundraising will enable the business to expand its customer and product base, accelerating its growth further for the benefit of shareholders.

"

Total Voting Rights

Application has been made to the London Stock Exchange for the First Placing Shares to be admitted to trading on AIM ("First Admission"). It is expected that First Admission will become effective and that dealings in the First Placing Shares on AIM will commence on or around 1 October 2020. On First Admission, the Company will have 3,055,522 ordinary shares of 5p each in issue, each with one voting right. There are no shares held in treasury. Therefore, the Company's total number of ordinary shares and voting rights will be 3,055,522 and this figure may be used by Shareholders from First Admission as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

Application will be made to the London Stock Exchange for the Second Placing Shares to be admitted to trading on AIM ("Second Admission"). It is expected that Second Admission will become effective and that dealings in the Second Placing Shares on AIM will commence on or around 14 October 2020. On Second Admission, the Company will have 3,673,525 ordinary shares of 5p each in issue, each with one voting right. There are no shares held in treasury. Therefore, the Company's total number of ordinary shares and voting rights will be 3,673,525 and this figure may be used by Shareholders from Second Admission as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

Application will be made to the London Stock Exchange for the Subscription Shares to be admitted to trading on AIM ("Third Admission"). It is expected that Third Admission will become effective and that dealings in the Subscription Shares on AIM will commence on or around 11 December 2020. On Third Admission, the Company will have 3,715,192 ordinary shares of 5p each in issue, each with one voting right. There are no shares held in treasury. Therefore, the Company's total number of ordinary shares and voting rights will be 3,715,192 and this figure may be used by Shareholders from Third Admission as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

Certain of the Directors and Persons Discharging Managerial Responsibilities have participated in the Fundraise, pursuant to the Placing. John Standen, Non-Executive Chairman, and his wife Kathleen Standen have subscribed for 12,500 New Ordinary Shares in aggregate, which represents an amount of GBP15,000 at the Issue Price. Paul Mines, Chief Executive Officer, has subscribed for 12,500 New Ordinary Shares, which represents an amount of GBP15,000 at the Issue Price. Sally Morley, the Managing Director of Biome Bioplastics, has subscribed for 4,167 New Ordinary Shares, which represents an amount of GBP5,000.40 at the Issue Price. The FCA notifications, made in accordance with the requirements of the EU Market Abuse Regulation, are appended below.

A Circular containing the Notice of General Meeting will be posted to Shareholders later today and will be made available shortly on the Company's website at www.biometechnologiesplc.com .

The above summary should be read in conjunction with the full text of this announcement and the Circular, extracts from which are set out below. All capitalised terms used throughout this announcement shall have the meanings given to such terms in the Definitions section of this announcement and as defined in the Circular.

Extracts from the Circular

(The information below has been extracted from the Circular without amendment. Therefore, references to pages or paragraphs below refer to the relevant pages or paragraphs of the Circular.)

Proposed Placing and Subscription

Notice of General Meeting

   1.     Introduction 

The Company announced today that it proposes to raise GBP1.1 million (before expenses) by way of the Fundraise, comprising a Placing of a total of 875,000 Placing Shares in two tranches as to (i) 256,997 First Placing Shares; and (ii) 618,003 Second Placing Shares, and the Subscription for 41,667 Subscription Shares, all at the Issue Price of 120 pence per New Ordinary Share.

The allotment of the Second Placing Shares is conditional, inter alia, upon First Admission having occurred and the Company obtaining approval of Shareholders of the Resolutions to be proposed at the General Meeting, to provide sufficient authority to enable allotment of the Second Placing Shares, disapply statutory pre-emption rights which would otherwise apply to the allotment of the Second Placing Shares and to renew the allotment authority and disapply statutory pre-emption rights which were previously approved at the Company's annual general meeting. The Subscription is conditional on First Admission, the passing of the Resolutions at the General Meeting, Second Admission and the admission of the Subscription Shares to trading on AIM.

It is intended that the net proceeds of the Fundraise will be used to fund the growth and development of the Group's Biome Bioplastics division. The purpose of this letter is to explain to Shareholders the background to and reasons for the Fundraise and to seek their approval of the Resolutions.

The Company is seeking the approval of Shareholders to the Resolutions which are to be put to the General Meeting of the Company to be held at Starpol Technology Centre, North Road, Marchwood, Southampton, Hampshire SO40 4BL at 2.30 p.m. on 12 October 2020. The Notice of General Meeting is set out at the end of this Circular.

All shareholders are encouraged to vote by proxy in accordance with the instructions set out in the Notice of General Meeting. It is particularly important that shareholders vote by proxy as they will be unable to attend in person. All shareholders are encouraged to appoint the Chairman of the meeting as their proxy rather than a named person, as they will not be permitted to attend the physical meeting. The Form of Proxy must be received by our Registrar as soon as possible and by no later than 2.30 p.m. on 10 October 2020. Shareholders' attention is drawn to paragraph 7 of Part I of this document in respect of the COVID-19 pandemic.

   2.     Background to and reasons for the Fundraise 

Biome is a growth-oriented, commercially-driven technology group that comprises two divisions, Biome Bioplastics and Stanelco RF Technologies. Biome Bioplastics is a leading developer of highly-functional, bio-based and biodegradable plastics. Biome Bioplastics' mission is to produce bioplastics that challenge the dominance of oil-based polymers. Stanelco RF Technologies designs, builds and services advanced radio frequency (RF) systems, with a particular focus on the fibre-optics market.

Under the glare of environmental concerns, brands are changing the plastics that they use, and revenues from Biome Bioplastics are accelerating, particularly in the US market.

Biome Bioplastics is building its short and longer-term product line and its customer base and the Board believes that its outlook for 2021 and beyond shows excellent potential with an increased diversity of customers. There is now an opportunity for significant further growth of the Biome Bioplastics business via the deployment of additional resources.

The Company therefore proposes to raise gross proceeds of GBP1.1 million via the Fundraise to secure the exciting bioplastics growth opportunity.

The bioplastics market and opportunity

Over the last year, the 'plastics problem' has remained in the global spotlight, and the enormity of the issues associated with oil-based plastic waste continues to garner attention. It has become evident that recycling alone is not the solution, and although multi-faceted, the crux of the issue often lies with the molecular structure of the materials themselves.

Bio-based and biodegradable/compostable plastics are being seen as an important part of the solution to the oil-based persistent plastics problem, with bio-based materials made from renewable biomass being replacements for fossil-oil based materials. Studies show that bio-based materials can play a role in reducing carbon emissions from the manufacture and the lifecycle of plastic products.

Compostable plastics also have a role to play, particularly in food packaging, in terms of both collection of food waste and thus diverting food waste away from landfill and in providing a suitable end-of-life for such materials via composting (organic recycling). The UK Government is in the process of mandating universal food waste collection by 2023, indicating that there is a developing pathway to disposal of compostable plastics.

The global market for bioplastics is predicted to grow by around a 20 per cent compound annual growth rate over the next five years ([1]) , and the Bio-based and Biodegradable Industries Association (BBIA) has reported that the UK market for bioplastics has doubled since 2017. Although there are a number of factors that prevent ubiquitous immediate adoption of bioplastics, the Board has identified a variety of fast-growing, non-commodity niches in which Biome Bioplastics can prosper.

The Biome Bioplastics Business

Biome Bioplastics develops and manufactures bioplastic compounds, using bio-based/biodegradable polymers, natural materials and other additives. Biome Bioplastics deploys a low capital expenditure manufacturing model, using contracted manufacturing facilities in Europe/the US to make its finished products at scale. This allows for a rapid scale-up in the production of new materials close to their point of use.

Biome Bioplastics has a strong focus on the US market where brand interest, volumes of scale and supportive industrial composting infrastructure are already in place. Biome Bioplastics currently has a pipeline of approximately 20 key development projects underway with a customer group that ranges from mid-size to multi-national companies.

Biome Bioplastics has gained significant pace to its growth in the last two years, as brands have increasingly selected its compostable bio-based materials. This momentum has continued to grow in 2020, despite the current COVID-19 crisis, with H1 2020 showing 71 per cent. revenue growth relative to the comparable period in 2019.

A number of projects launched in 2019 and 2020 have contributed significantly to Biome Bioplastics' growth, which are described below:

-- a contract for a new material for a coffee pod used in the US coffee market that is heat stable. Revenues started in Q3 2019 as anticipated and are now consistently ahead of the Board's earlier expectations.

-- a new material for a single serve nutrition pod being manufactured in Switzerland and launched in the US market. Revenues started in Q2 2019 and were expected to step-up in FY 2020. However, the closure of gyms resulting from the COVID-19 pandemic has stopped progress in the last six months. The Board understands that the end customer is refocusing to online sales.

-- a contract for a new material for disposable cutlery for a customer in the US market. Revenues began to accelerate in late 2019, were paused during the US COVID-19 restaurant shutdowns of spring 2020 and are now gaining traction again. This material has broader market applicability.

-- existing materials manufactured in Germany are being deployed in a number of plastic film products for a US customer. Revenues commenced in Q2 2019 and these materials have made consistent progress with a broader set of customers.

In addition, the Board has a clear growth trajectory for Biome Bioplastics in 2021 that rests, in the most part, on substantial extensions of positions with existing customers. Key projects for 2021 and beyond include:

-- Continued growth from existing customers with existing products, especially flexible film in both industrial and particularly home compostable formats, for the North American market.

-- Filtration mesh: the Company envisages growth with a second end-customer with a material that has been proven with an existing customer over the last three years. Implementation of this project is underway.

-- Coffee pod material: the Company launched a project for a heat stable material for coffee pods within the US at the end of 2019. Commercial sales of this product are gaining momentum.

-- Packaging film: the Company is working on seven new customer projects that focus on the conversion of flexible packaging to compostable formats. Six of these projects are for the North American Market.

Biome Bioplastics continues its extensive Research and Development on the production of its novel bio-based and biodegradable hetero-aromatic polyesters, in order to further differentiate its product range. Over the last seven years, Biome Bioplastics has coordinated over GBP6 million of research and development funding in conjunction with leading universities, in pursuit of bringing novel bio-based polyesters to market. In August 2020, Biome Bioplastics was awarded GBP253,000 from the UK Government's Innovate UK organisation, to support a collaborative project with the University of Nottingham to scale-up its novel materials over the next 18 months. The Board believes that Biome Bioplastics' development pipeline represents an opportunity to further differentiate the Group's product offering in the medium-term, based on proprietary technology.

The Stanelco RF Technologies market and opportunity

Stanelco RF Technologies is a specialist Original Equipment Manufacturer (OEM) engineering business that develops radio frequency (RF) welding, heating and furnace technology-based equipment, which uses the heating effect of electromagnetic waves to heat and weld materials. The business operates in a variety of international markets, with India and China as markets of scale. The business has an international market-leading position in the furnace market for fibre-optic cable production. These furnaces are an important part of the fifth generation of cellular mobile data technology (5G) rollout and the demand for the infrastructure underpinning the global data capacity of the internet.

Stanelco RF Technologies saw a significant expansion in the capacity of its customers during increased fibre-optic rollout in 2018 and 2019. This was followed by a softening in demand as Fibre to the Premises (FTTP) and 5G roll-outs have been delayed as a result of overcapacity compounded by geopolitical events. In addition, COVID-19 has affected demand, as telecommunication companies have slowed their fibre-optic deployment. Whilst COVID-19 is expected to enhance fibre-optic infrastructure requirements in the longer-term, there is currently limited visibility on the timing of such investment.

The Group continues to make a concerted effort to increase Stanelco RF Technologies' geographic footprint and range of applications and Stanelco RF Technologies already benefits from recurring revenue from power generation, medical and general industrial markets, primarily in the UK.

The Board recognises that further diversified revenues will take time to develop and are unlikely to be of the scale enjoyed in the fibre-optic furnace market, and as such, considers that Stanelco RF Technologies' revenues will be modest in the foreseeable future. The Group's current approach is to keep Stanelco RF Technologies' costs and cashflows tightly controlled during this time of limited demand.

   3.     Current trading and prospects 

On 24 September 2020, the Company announced its unaudited interim financial results for the period ended 30 June 2020. Group revenues for the interim period were GBP2.5 million (H1 2019: GBP3.4 million). The Biome Bioplastics division continued its strong growth trajectory despite the impact of COVID-19, delivering an increase in revenues of 71% on the comparable period, and has now become the principal revenue generator for the Group. Revenues in the Stanelco RF Technologies division sharply reduced by 82% due to weak market demand and the impact of COVID-19. Vigorous cost cutting measures reduced administrative expenses in the interim period to GBP1.7 million (H1 2019: GBP2.2 million). The Group recorded a loss before interest, depreciation, amortisation and share option charges for the six months to 30 June 2020 of GBP0.5 million (H1 2019: GBP0.2 million loss).

In 2018 the Board adopted ambitious Key Performance Indicators (KPIs) for the Group's 2018 - 2020 objective cycle, which will now be adjusted and extended to the end of 2023 reflecting the continued progress of the Biome Bioplastics division, the headwinds facing the Stanelco RF technologies division and the impact of the COVID-19 virus to date . Further details of the Board's adjusted KPIs can be found in the Company's unaudited interim financial results announcement for the period ended 30 June 2020.

Biome Bioplastics

Revenues in the Biome Bioplastics division continued to grow during the first half of 2020, reaching GBP2.1 million for the period (H1 2019: GBP1.2 million). Revenue in the second quarter of 2020 was GBP1.2 million and represented a new record for the Biome Bioplastics division, despite the disruption caused by the pandemic. Despite the lockdown and supply chain constraints in both Europe and the US, the Biome Bioplastics division's workflows proved resilient and production output met customer requirements throughout the first half.

The Biome Bioplastics division's orderbook remains strong with a range of products with a more predictable and improving growth profile, particularly in the US market. An encouraging list of prospects for 2021 has enabled the Board to form its expectations of continued vigorous growth in this division for 2021.

Stanelco RF Technologies

Revenues for the first half of 2020 in the Stanelco RF technologies division were GBP0.4 million (H1 2019: GBP2.2 million). The expectation is that, in time, the fibre optic market will benefit from the pandemic through the enhanced pace of global digitisation required to meet the demands of, for example, increased home working and the 5G roll-out. However, in the short term, demand is likely to remain weak. The Stanelco RF technologies division also provides induction heating and welding equipment to various end markets in the UK and continental Europe. Activity in these markets in the second quarter of 2020 was very weak, with many facilities closed and customers deferring the purchase of capital goods. The Stanelco RF technologies division has accordingly reduced costs and cash outflows where possible as well as reviewing possible alternative markets for its technologies.

The Board is pleased that in the last few weeks, the enquiry level has increased and there have been some small contract wins, albeit overall demand levels remain subdued.

Looking further forward, the Board believes that the Stanelco RF technologies division's prospects for 2021 will remain influenced by continued overcapacity in the fibre optic cable market and COVID-19 related uncertainties around demand and capital expenditure in the industrial markets that the division serves.

   4.     Reasons for the Fundraise and use of proceeds 

Revenues from Biome Bioplastics are already growing at pace and the Board believes that its outlook for 2021 and beyond shows excellent potential with an increased diversity of customers.

To maintain and build on this growth, the expected use of the net proceeds of the Fundraise is set out below:

 
 Item                                        Timing                Approximate 
                                                                    deployment 
 A. Growth capital needed to support         FY 2021               GBP0.4 million 
  revenue growth with existing customers 
  and new bioplastics projects that 
  are scaling up and will drive 
  a significant increase in revenues 
  over the next 18 months, and the 
  associated working capital requirements. 
                                            --------------------  --------------- 
 B. Maintaining an increased investment      FY 2020 and FY 2021   GBP0.6 million 
  in sales activities, development 
  and logistics spending to support 
  and further accelerate the growth 
  of the Biome Bioplastics business. 
                                            --------------------  --------------- 
 Total                                                             GBP1 million* 
                                            --------------------  --------------- 
 

* Net of the estimated costs associated with the Fundraise.

   5.     Details of the Fundraise and Admission 

The Fundraise will result in the issue of a total of 916,667 New Ordinary Shares, representing, in aggregate, approximately 24.67 per cent. of the issued share capital of the Company as enlarged by the issue of the New Ordinary Shares.

Applications will be made to London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM and First Admission is expected to occur on 1 October 2020 in respect of the First Placing Shares and, subject to approval of the Resolutions, Second Admission is expected to occur on 14 October 2020 in respect of the Second Placing Shares. Admission of the Subscription Shares to trading on AIM is expected to occur on 11 December 2020, subject to, inter alia, First Admission, the passing of the Resolutions at the General Meeting and Second Admission.

The New Ordinary Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares and therefore will rank equally for all dividends or other distributions declared, made or paid after the admission of the New Ordinary Shares to trading on AIM.

Allenby Capital has entered into the Placing Agreement with the Company under which Allenby Capital has, on the terms and subject to the conditions set out therein (including Admission), undertaken to use its reasonable endeavours to procure subscribers for a total of 875,000 Placing Shares at the Issue Price. The Placing Agreement contains certain warranties and indemnities from the Company in favour of Allenby Capital. The Placing is not being underwritten by Allenby Capital or any other person.

The Placing is conditional, inter alia , upon First Admission in respect of the First Placing Shares and, First Admission having occurred, upon the passing of the Resolutions and Second Admission in respect of the Second Placing Shares and the Placing Agreement not being terminated prior to First Admission or Second Admission.

The First Placing is not conditional on the Second Placing. Therefore, should the Resolutions not be passed the Second Placing will not proceed, which will have an impact on the ability of the Group to pursue its growth strategy.

Neither the First Placing nor the Second Placing are conditional on the Subscription. The Subscription is conditional on First Admission, the passing of the Resolutions, and Second Admission and the admission of the Subscription Shares to trading on AIM.

   6.     Significant shareholder and management participations 

Details of the subscriptions by certain of the Directors in the Placing at the Issue Price and their resultant shareholdings immediately following the admission of the New Ordinary Shares to trading on AIM, are as follows:

 
Name                Second Placing          Value of the      Ordinary Shares        Percentage of 
                      Shares being         subscriptions       held following       Enlarged Share 
                        subscribed          at the Issue        completion of              Capital 
                                                   Price        the Fundraise 
Paul Mines                  12,500             GBP15,000               44,025                1.18% 
John Standen*               12,500             GBP15,000               70,836                1.91% 
 

* John Standen's participation in the Placing includes 6,250 Second Placing Shares subscribed for by his wife, Mrs K M Standen.

Sally Morley, the Managing Director of Biome Bioplastics, who is a person discharging managerial responsibilities, has subscribed in the Placing at the Issue Price and her resultant shareholding on Second Admission is as follows:

 
Name               Second Placing          Value of the      Ordinary Shares        Percentage of 
                     Shares being         subscriptions       held following       Enlarged Share 
                       subscribed          at the Issue        completion of              Capital 
                                                  Price        the Fundraise 
Sally Morley                4,167           GBP5,000.40                4,521                0.12% 
 

Assuming completion of the Fundraise, the Company is aware of the following persons that will be interested in three per cent. or more of the Enlarged Share Capital:

 
Name                   Ordinary Shares           Ordinary Shares         Percentage of Enlarged 
                             currently            held following                  Share Capital 
                                  held             completion of 
                                                   the Fundraise 
Mr V Pereira*                  600,689                   667,356                         17.96% 
Mr JM Rushton-Turner           364,717                   406,384                         10.94% 
 

*Mr V Pereira's holding includes 82,416 Ordinary Shares held by his wife, Mrs G Pereira.

   7.     General Meeting 

A notice convening a General Meeting of the Company, to be held at Starpol Technology Centre, North Road, Marchwood, Southampton, Hampshire SO40 4BL at 2.30 p.m. on 12 October 2020 is set out at the end of this Circular. At the General Meeting, the following Resolutions will be proposed:

1. Resolution numbered 1 is proposed as an ordinary resolution to grant authority to the Directors to allot Ordinary Shares up to an aggregate nominal amount of GBP32,983.50. This resolution will give the Directors sufficient authority to allot the Second Placing Shares and the Subscription Shares; and

2. Resolution numbered 2 is proposed as a special resolution to dis-apply statutory pre-emption rights in respect of the allotment of up to 659,670 new Ordinary Shares for cash. This number represents 618,003 Second Placing Shares and the 41,667 Subscription Shares.

3. Resolution numbered 3 is proposed as an ordinary resolution to grant authority to the Directors to allot Ordinary Shares up to an aggregate nominal amount of GBP61,919.87, representing approximately one third of the nominal value of the issued ordinary share capital of the Company as enlarged by the Fundraise, renewing and replacing the authority granted at the Company's annual general meeting. There are no treasury shares in issue in the Company as at the date of this letter. The Directors do not have any present intention of exercising the authorities conferred by this resolution but they consider it desirable that the specified amount of authorised but unissued share capital is available for issue so that they can more readily take advantage of possible opportunities. Unless revoked, varied or extended, this authority will expire at the conclusion of the next annual general meeting of the Company or the date falling 18 months from the passing of the resolution, whichever is the earlier.

4. Resolution numbered 4 is proposed as a special resolution to dis-apply statutory pre-emption rights in respect of the allotment of new Ordinary Shares for cash, up to a maximum nominal amount of GBP18,575.96. This amount represents approximately ten per cent of the nominal value of the issued ordinary share capital of the Company as enlarged by the Fundraise, renewing and replacing the authority granted at the Company's annual general meeting. Unless revoked, varied or extended, this authority will expire at the conclusion of the next annual general meeting of the Company or 18 months after the passing of the resolution, whichever is the earlier.

Resolutions 1 and 3 will be proposed as ordinary resolutions and Resolutions 2 and 4 as special resolutions.

At the time of writing, the UK has in force governmental measures restricting physical public gatherings. In view of these measures and the overriding health and safety concerns, we are currently planning that the General Meeting (convened pursuant to the notice at the end of this circular) will be held as a closed meeting and convened with the minimum quorum of two shareholders present.

As a result, we regret that shareholders will not be permitted to attend the meeting in person and, in the interests of safety, anyone seeking to attend in person will be refused entry.

We will continue to monitor developments closely and if circumstances change such that physical attendance is possible, we will communicate such change through public announcement and publication on our website.

   8.     Action to be taken by Shareholders 

The General Meeting will consist of the formal business set out in the Notice of General Meeting, and no trading update or other presentation will be given. Voting on the Resolutions will take place by way of a poll.

Shareholders will find enclosed with this document a Form of Proxy for use at the General Meeting. Shareholders are strongly encouraged to complete, sign and return the Form of Proxy in accordance with the instructions printed on it to Neville Registrars Limited, Neville House, Steelpark Road, Halesowen B62 8HD as soon as possible and, in any event, so as to arrive no later than 2.30 p.m. on 10 October 2020 .

All shareholders are encouraged to vote by proxy in accordance with the instructions set out in the Notice of General Meeting. It is particularly important that shareholders vote by proxy as they will be unable to attend in person. All shareholders are encouraged to appoint the Chairman of the meeting as their proxy rather than a named person, as they will not be permitted to attend the physical meeting.

Instructions for voting by proxy through CREST are set out in paragraphs 9 to 11 of the notes to the notice of General Meeting.

In the case of non-registered Shareholders who receive these materials through their broker or other intermediary, the Shareholder should complete and send a letter of direction in accordance with the instructions provided by their broker or other intermediary.

In order for the Second Placing and the Subscription to proceed, Shareholders will need to approve certain of the Resolutions set out in the Notice of General Meeting. If Resolutions 1 and 2 are not passed at the General Meeting, the Second Placing and the Subscription will not proceed which will have an impact on the ability of the Group to pursue its growth strategy. Accordingly, it is important that Shareholders vote in favour of the Resolutions.

   9.        Irrevocable Undertakings 

The Company has received irrevocable undertakings from certain of its Shareholders to vote in favour of the resolutions to effect the Fundraise at the General Meeting in respect of a total of 667,817 Ordinary Shares, being 23.86 per cent. of the Existing Ordinary Shares, and 21.86 per cent. of the Company's issued share capital immediately following First Admission.

   10.     Directors' Recommendation 

The Board of Biome considers the Fundraise to be in the best interests of the Company and its shareholders as a whole and therefore the Directors unanimously recommend that shareholders vote in favour of the Resolutions as they intend to do in respect of their own shareholdings (and the shareholdings of their connected parties) of, in aggregate, 93,932 Ordinary Shares (representing approximately 3.36 per cent. of the Company's existing issued share capital).

FUNDRAISE STATISTICS

 
    Issue Price                                                120 pence 
    Number of Existing Ordinary Shares                         2,798,525 
    Total number of New Ordinary Shares                          916,667 
    Number of First Placing Shares                               256,997 
    Number of Second Placing Shares                              618,003 
    Number of Subscription Shares                                 41,667 
    Enlarged Share Capital following the Fundraise             3,715,192 
    Percentage of the Enlarged Share Capital comprised   24.67 per cent. 
     by the New Ordinary Shares 
    Estimated gross proceeds of the Fundraise             GBP1.1 million 
    Estimated expenses of Fundraise                       GBP0.1 million 
    Estimated net proceeds of the Fundraise                 GBP1 million 
    ISIN                                                    GB00B9Z1M820 
    SEDOL                                                        B9Z1M82 
    LEI                                                   213800B9QI14B1 
                                                                  2TAO51 
 

DEFINITIONS

   "Act"                                              the Companies Act 2006 (as amended); 

"Admission" together, or separately, the First Admission and/or the Second Admission and/or the admission of the Subscription Shares to trading

on AIM, as the context requires;

"AIM Rules" the AIM Rules for Companies, as published and amended from time to time by the London Stock Exchange;

"Allenby Capital" Allenby Capital Limited, the Company's nominated adviser and broker pursuant to the AIM Rules;

"Articles" the existing articles of association of the Company as at the date of this Circular;

"Biome Bioplastics" Biome Bioplastics Limited, a wholly owned subsidiary of the Company which operates in the field of bio-based and

biodegradable plastics;

"Business Day" any day (other than a Saturday or Sunday) upon which commercial banks are open for business in London, UK;

   "Circular"                                      this document; 
   "Company" or "Biome"                 Biome Technologies plc; 

"CREST" the relevant system for the paperless settlement of trades and the holding of uncertificated securities operated by Euroclear

UK and Ireland in accordance with the CREST Regulations;

"CREST member" a person who has been admitted by Euroclear UK and Ireland as a system-member (as defined in the CREST Regulations);

   "Directors" or "Board"                   the directors of the Company; 

"Enlarged Share Capital" the issued ordinary share capital of the Company immediately following the admission to trading on AIM of the New Ordinary

Shares;

   "Euroclear UK & Ireland"                Euroclear UK & Ireland Limited, the operator of CREST; 
   "Existing Ordinary Shares"            the existing Ordinary Shares as at the date of this Circular; 

"FCA" the Financial Conduct Authority of the United Kingdom;

"First Admission" the admission to trading on AIM of the First Placing Shares at the Issue Price, in accordance with the terms of the Placing

and the AIM Rules;

"First Placing" the placing of the First Placing Shares at the Issue Price, in accordance with the terms of the Placing;

"First Placing Shares" the 256,997 new Ordinary Shares which have been conditionally placed with investors pursuant to the First Placing;

"Form of Proxy" the form of proxy for use by Shareholders in connection with the General Meeting;

   "Fundraise"                                         together, the Placing and the Subscription; 

"FSMA" the Financial Services and Markets Act 2000 (as amended);

   "FY"                                                    financial year; 

"General Meeting" or "GM" the general meeting of Shareholders to be held at Starpol Technology Centre, North Road, Marchwood, Southampton,

Hampshire SO40 4BL at 2.30 p.m. on 12 October 2020 ;

   "Group"                                                  the Company and its subsidiaries ; 

"ISIN" International Securities Identification Number;

   "Issue Price"                                      120   pence per New Ordinary Share; 
   "London Stock Exchange"               London Stock Exchange plc; 

"Member Account ID" the identification code or number attached to any member account in CREST;

"Notice of General Meeting" the notice of General Meeting set out at the end of this Circular;

"New Ordinary Shares" together the First Placing Shares, the Second Placing Shares and the Subscription Shares;

"Ordinary Shares" the ordinary shares of 5p each in the capital of the Company;

"Placing" together, or separately, the proposed First Placing and/or the Second Placing, as the context requires and as described

in this Circular;

"Placing Agreement" the conditional agreement dated 24 September 2020 between the Company and Allenby Capital relating to the Placing;

"Placing Shares" the 875,000 new Ordinary Shares which have been conditionally placed by Allenby Capital with institutional and other investors pursuant to the First Placing and the Second Placing;

   "Registrars"                                          Neville Registrars Limited; 

"Resolutions" the resolutions set out in the Notice of General Meeting to be proposed at the General Meeting;

"Restricted Jurisdiction" each and any of the United States of America, Australia, Canada, Japan, New Zealand, Russia, the Republic of Ireland and the Republic of South Africa and any other jurisdiction where extension or availability of the Fundraise would breach any applicable law or regulations;

"Second Admission" the admission to trading on AIM of the Second Placing Shares at the Issue Price, in accordance with the terms of the

Placing and the AIM Rules;

"Second Placing" the placing of the Second Placing Shares at the Issue Price, in accordance with the terms of the Placing;

"Second Placing Shares" the 618,003 new Ordinary Shares which have been conditionally placed with investors pursuant to the Second Placing;

   "Shareholder(s)"                                     holder(s) of Existing Ordinary Shares; 

"Stanelco RF" Stanelco RF Technologies Limited , a wholly-owned subsidiary of the Company which is an equipment manufacturer in

the specialised field of radio-frequency heating;

"sterling", "pounds sterling", the lawful currency of the United Kingdom; "GBP", "pence" or "p"

"Subscription" the conditional subscription for the Subscription Shares at the Issue Price pursuant to the Subscription Letter;

"Subscription Letter" the conditional subscription letter between the Company and the participant in the Subscription;

"Subscription Shares" the 41,667 new Ordinary Shares which have been subscribed for pursuant to the Subscription;

"US Person" a US person as defined in Regulation S promulgated under the US Securities Act; and

"US Securities Act" the United States Securities Act of 1933 (as amended).

For further information please contact:

Biome Technologies plc

Paul Mines, Chief Executive Officer

Donna Simpson-Strange, Company Secretary

info@biometechnologiesplc.co.uk

Tel: +44 (0) 2380 867 100

www.biometechnologiesplc.com

Allenby Capital

David Hart/Alex Brearley (Nominated Adviser)

Kelly Gardiner (Broker)

Tel: +44 (0) 20 3328 5656

www.allenbycapital.com

About Biome

Biome Technologies plc is an AIM quoted, growth-orientated, commercially driven technology group. Our strategy is founded on building market-leading positions based on patented technology and serving international customers in valuable market sectors. We have chosen to do this by developing products in application areas where the value-added pricing can be justified and are not reliant on government legislation. These products are driven by customer requirements and are compatible with existing manufacturing processes. They are market rather than technology-led.

The Group comprises two divisions, Biome Bioplastics Limited and Stanelco RF Technologies Limited.

Biome Bioplastics is a leading developer of highly-functional, bio-based and biodegradable plastics. The company's mission is to produce bioplastics that challenge the dominance of oil-based polymers.

Stanelco RF Technologies designs, builds and services advanced radio frequency (RF) systems. Dielectric and induction heating products are at the core of a product offering that ranges from portable sealing devices to large furnaces for the fibre optics markets.

www.biometechnologiesplc.com

   www.biomebioplastics.com       and     www.thinkbioplastic.com 

www.stanelcorftechnologies.com

Information to Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "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 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 retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, investors should note that: the price of the New Ordinary Shares may decline and investors could lose all or part of their investment; 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 Fundraise. Furthermore, it is noted that, notwithstanding the Target Market Assessment, only investors who have met the criteria of professional clients and eligible counterparties have been procured. 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.

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 
 a)   Name                             John Standen 
     -------------------------------  ------------------------------------ 
 2.   Reason for the Notification 
     --------------------------------------------------------------------- 
 a)   Position/status                  Director - Non-Executive Chairman 
     -------------------------------  ------------------------------------ 
 b)   Initial notification/Amendment   Initial Notification 
     -------------------------------  ------------------------------------ 
 3.   Details of the issuer, emission allowance market participant, 
       auction platform, auctioneer or auction monitor 
     --------------------------------------------------------------------- 
 a)   Name                             Biome Technologies plc 
     -------------------------------  ------------------------------------ 
 b)   LEI                              213800B9QI14B12TAO51 
     -------------------------------  ------------------------------------ 
 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 5p in Biome 
       Financial instrument,            Technologies plc. Identification 
       type of instrument               code (ISIN) for Biome Technologies 
                                        plc ordinary shares: GB00B9Z1M820 
      Identification code 
     -------------------------------  ------------------------------------ 
 b)   Nature of the transaction        Participation in placing of new 
                                        ordinary shares 
     -------------------------------  ------------------------------------ 
 c)   Price(s) and volume(s)            Price(s)    Volume(s) 
                                         120 
                                          p          6,250 
                                                    ---------- 
     -------------------------------  ------------------------------------ 
 d)   Aggregated information: 
       --Aggregated volume               N/A 
       --Price 
     -------------------------------  ------------------------------------ 
 e)   Date of the transaction          24 September 2020 
     -------------------------------  ------------------------------------ 
 f)   Place of the transaction         Outside a trading venue 
     -------------------------------  ------------------------------------ 
 
 
 1.   Details of the person discharging managerial responsibilities 
       / person closely associated 
 a)   Name                             Kathleen Standen 
     -------------------------------  ------------------------------------------ 
 2.   Reason for the Notification 
     --------------------------------------------------------------------------- 
 a)   Position/status                  PCA of John Standen, PDMR - Non-Executive 
                                        Chairman 
     -------------------------------  ------------------------------------------ 
 b)   Initial notification/Amendment   Initial Notification 
     -------------------------------  ------------------------------------------ 
 3.   Details of the issuer, emission allowance market participant, 
       auction platform, auctioneer or auction monitor 
     --------------------------------------------------------------------------- 
 a)   Name                             Biome Technologies plc 
     -------------------------------  ------------------------------------------ 
 b)   LEI                              213800B9QI14B12TAO51 
     -------------------------------  ------------------------------------------ 
 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 5p in Biome 
       Financial instrument,            Technologies plc. Identification 
       type of instrument               code (ISIN) for Biome Technologies 
                                        plc ordinary shares: GB00B9Z1M820 
      Identification code 
     -------------------------------  ------------------------------------------ 
 b)   Nature of the transaction        Participation in placing of new 
                                        ordinary shares 
     -------------------------------  ------------------------------------------ 
 c)   Price(s) and volume(s)            Price(s)   Volume(s) 
                                         120 p      6,250 
                                                   ---------- 
     -------------------------------  ------------------------------------------ 
 d)   Aggregated information: 
       --Aggregated volume               N/A 
       --Price 
     -------------------------------  ------------------------------------------ 
 e)   Date of the transaction          24 September 2020 
     -------------------------------  ------------------------------------------ 
 f)   Place of the transaction         Outside a trading venue 
     -------------------------------  ------------------------------------------ 
 
 
 
 1.   Details of the person discharging managerial responsibilities 
       / person closely associated 
     ----------------------------------------------------------------------------- 
 a)   Name                             Paul Mines 
     -------------------------------  -------------------------------------------- 
 2.   Reason for the Notification 
     ----------------------------------------------------------------------------- 
 a)   Position/status                  Director - Chief Executive Officer 
     -------------------------------  -------------------------------------------- 
 b)   Initial notification/Amendment   Initial Notification 
     -------------------------------  -------------------------------------------- 
 3.   Details of the issuer, emission allowance market participant, 
       auction platform, auctioneer or auction monitor 
     ----------------------------------------------------------------------------- 
 a)   Name                             Biome Technologies plc 
     -------------------------------  -------------------------------------------- 
 b)   LEI                              213800B9QI14B12TAO51 
     -------------------------------  -------------------------------------------- 
 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 5p in Biome Technologies 
       Financial instrument,            plc. Identification code (ISIN) for 
       type of instrument               Biome Technologies plc ordinary shares: 
                                        GB00B9Z1M820 
      Identification code 
     -------------------------------  -------------------------------------------- 
 b)   Nature of the transaction        Participation in placing of new ordinary 
                                        shares 
     -------------------------------  -------------------------------------------- 
 c)   Price(s) and volume(s)            Price(s)    Volume(s) 
                                         120 
                                          p          12,500 
                                                    ---------- 
     -------------------------------  -------------------------------------------- 
 d)   Aggregated information: 
       --Aggregated volume               N/A 
       --Price 
     -------------------------------  -------------------------------------------- 
 e)   Date of the transaction          24 September 2020 
     -------------------------------  -------------------------------------------- 
 f)   Place of the transaction         Outside a trading venue 
     -------------------------------  -------------------------------------------- 
 
 
 
 1.   Details of the person discharging managerial responsibilities 
       / person closely associated 
     ----------------------------------------------------------------------------- 
 a)   Name                             Sally Morley 
     -------------------------------  -------------------------------------------- 
 2.   Reason for the Notification 
     ----------------------------------------------------------------------------- 
 a)   Position/status                  PDMR - Managing Director of Biome 
                                        Bioplastics Limited 
     -------------------------------  -------------------------------------------- 
 b)   Initial notification/Amendment   Initial Notification 
     -------------------------------  -------------------------------------------- 
 3.   Details of the issuer, emission allowance market participant, 
       auction platform, auctioneer or auction monitor 
     ----------------------------------------------------------------------------- 
 a)   Name                             Biome Technologies plc 
     -------------------------------  -------------------------------------------- 
 b)   LEI                              213800B9QI14B12TAO51 
     -------------------------------  -------------------------------------------- 
 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 5p in Biome Technologies 
       Financial instrument,            plc. Identification code (ISIN) for 
       type of instrument               Biome Technologies plc ordinary shares: 
                                        GB00B9Z1M820 
      Identification code 
     -------------------------------  -------------------------------------------- 
 b)   Nature of the transaction        Participation in placing of new ordinary 
                                        shares 
     -------------------------------  -------------------------------------------- 
 c)   Price(s) and volume(s)            Price(s)    Volume(s) 
                                         120 
                                          p          4,167 
                                                    ---------- 
     -------------------------------  -------------------------------------------- 
 d)   Aggregated information: 
       --Aggregated volume               N/A 
       --Price 
     -------------------------------  -------------------------------------------- 
 e)   Date of the transaction          24 September 2020 
     -------------------------------  -------------------------------------------- 
 f)   Place of the transaction         Outside a trading venue 
     -------------------------------  -------------------------------------------- 
 

[1] Source: Hasso von Pogrell , MD European Bioplastics, BIOPLASTICS MARKET GROWTH, TRS, AND FORECAST (2019-2024), Mordor Intelligence.

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(END) Dow Jones Newswires

September 24, 2020 02:05 ET (06:05 GMT)