TIDMNANO
RNS Number : 1335T
Nanoco Group PLC
15 July 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, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA,
AUSTRALIA, THE REPUBLIC OF IRELAND, NEW ZEALAND OR ANY OTHER
JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMATION,
OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE
OR DISPOSE OF ANY SECURITIES IN NANOCO GROUP PLC OR ANY OTHER
ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT
OF ITS DISTRIBUTION, SHALL FORM THE BASIS OF, OR BE RELIED ON IN
CONNECTION WITH ANY INVESTMENT DECISION IN RESPECT OF NANOCO GROUP
PLC.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF EU REGULATION 596/2014 ("MAR").
UNLESS OTHERWISE INDICATED, CAPITALISED TERMS IN THIS
ANNOUNCEMENT HAVE THE MEANING GIVEN TO THEM IN THE DEFINITIONS
SECTION SET OUT BELOW.
15 July 2020
FOR IMMEDIATE RELEASE
Nanoco Group plc
("Nanoco", the " Company" or the " Group ")
Trading Update &
Proposed Fundraising a minimum of GBP2.2 million
by way of PrimaryBid Offer
Nanoco Group plc (LSE: NANO), a world leader in the development
and manufacture of cadmium-free quantum dots and other specific
nanomaterials emanating from its technology platform, today
announces a trading update and proposed fundraising at a price of
17.5 pence per share (the "Issue Price") to raise a minimum of GBP
2.2 million (before expenses) by way of an offer for subscription
for 12,571,428 new Ordinary Shares via PrimaryBid (the "PrimaryBid
Offer" or the "Fundraising"). The Fundraising is fully subscribed
subject to potential clawback in the event of additional demand
from both new and existing investors.
Trading Update
-- Excellent progress in delivery of services under the recently
announced development agreement with ST Microelectronics on
nano-materials for use in infra-red sensing applications.
-- Recently won development contract for a new technology
application in the Display sector.
-- Our development work in the Sensing and Display sectors both
have the potential to lead to medium term commercial production
utilising our Runcorn facilities.
-- Recently announced third-party funding for the Company's
lawsuit against Samsung ensures that the Company retains the
benefit of the claim which, if successful, could significantly
exceed the current market capitalization of the Company, whilst
allowing Company resources to be focused on targeted organic
business activities.
-- The Company continues to trade in line with the Board's
expectations with a cash runway that extends through Q2 in calendar
year 2021.
Fundraising Highlights
-- PrimaryBid Offer of 12,571,428 new Ordinary Shares
("PrimaryBid Shares") to raise gross proceeds of a minimum of
GBP2.2 million.
-- Lombard Odier has undertaken to subscribe for GBP2.14 million
of PrimaryBid Shares, such amount being subject to clawback
depending on accepted applications received from new and existing
investors under the PrimaryBid Offer.
-- All directors of the Company and/or persons closely
associated with them have given written undertakings to the Company
to subscribe for PrimaryBid Shares at the Issue Price with a total
value of GBP61,000 as shown in the Additional Information section
of this announcement.
-- A further announcement launching the PrimaryBid Offer will be
made shortly. The PrimaryBid Offer, via the PrimaryBid.com
platform, will be open to individual and institutional investors
until 9:00 p.m. on 15 July 2020.
-- The Issue Price represents a discount of 2.8 per cent. to the
Closing Price of 18.00 pence on 15 July 2020, being the last
practicable trading day prior to release of this announcement.
-- The net proceeds of the Fundraising will be used to extend
the Company's cash runway at least to the end of calendar year 2021
while supporting its core IP assets and its business operations
during the ongoing lawsuit against Samsung.
Chris Richards, Chairman of Nanoco Group said:
"We are pleased to launch this Offer of Shares via PrimaryBid.
It reflects the excellent recent progress we have made in a number
of areas. We have secured third-party funding for our lawsuit
against Samsung. The extensive due diligence exercises carried out
by the third-party funder, our strategic IP adviser, and our US
Counsel all serve to enhance our confidence in a successful outcome
to the lawsuit, which could be transformational for shareholder
returns given the scale of the QD TV market.
"We have also recently delivered new commercial revenues from
our underlying business activities in both the Sensing and Display
sectors. These wins support the Company's short term cash position
and also hold out the prospect of significant future revenue from
commercial production in both of these sectors in the short to
medium term.
"The Fundraise will enable the Company to address further new
commercial opportunities, while also maintaining our balance sheet
during the lawsuit against Samsung. The Fundraise will also add
stability to the business and allow us to retain many members of
our highly skilled team. All of these factors combined will deliver
enhanced value for the Group and are in the best interests of all
stakeholders."
ADDITIONAL INFORMATION
Background to the Fundraising
The Company announced its Interim Results for the six months
ended 31 January 2020 (H1 FY20) on 30 April 2020. During the
period, Nanoco delivered revenues of GBP 2.9 million and an
Adjusted EBITDA Loss of GBP 1.4 million. The first half included
the completion of a major contract with the US Customer. Subsequent
to the half year end, l ike many businesses, the Group has
experienced significant business interruption as a result of the
Covid-19 pandemic, including absence of key personnel, disruption
to supply chains and customer measures leading to shipping delays
and delays on raising new purchase orders. However, paid for
customer work and critical activities have continued where
possible. The Group also terminated the Formal Sale Process due to
the ongoing uncertainty in the capital markets.
The Company's cash balance was GBP4.2 million as at 31 January
2020. This was sufficient to create a cash runway through Q2
calendar year 2021, subject to the potential need for a major
restructuring of the Group ' s operations if no new commercial
business or other sources of funding were forthcoming in the near
term.
The Board took prompt action to reduce costs with a number of
measures including salary reductions for all Directors, making use
of the UK Government's Coronavirus Job Retention Scheme, a
temporary company-wide pay cut and close monitoring and control of
all other categories of costs. These actions, accompanied by
material new revenues in the Sensing sector, have helped to
maintain the cash runway for an operational business through Q2
calendar year 2021.
The Company also announced on 13 July 2020 that third-party
funding had been secured for the lawsuit against Samsung for
willful infringement of the Group ' s IP. This third-party funding
prevents a drain on the Group ' s cash position for a number of
years. The Funder will only receive a return of their capital in
the event of a successful outcome to the lawsuit. The Board
considers that a successful outcome to the lawsuit will have a
potentially transformational impact on shareholder value.
The Fundraising, combined with recent commercial wins, will
ensure that the Group has ade quate funding to retain operational
capabilities of R&D, scale-up and production in its Sensing and
Display product lines at least until the end of calendar year 2021,
in parallel with the third party funding of the Samsung
lawsuit.
Use of proceeds of the Fundraising
The Company is proposing to raise minimum gross proceeds of
GBP2.2 million (net GBP2.0 million) from the PrimaryBid Offer. The
net proceeds (after deducting the costs and expenses of the
Fundraising), along with the Company's existing cash resources,
will be used to:
(i) extend the Company ' s cash runway;
(ii) protect its IP and company operations during the previously
announced litigation against Samsung, which is being funded by a
third-party, and which could last two years or more;
(iii) support the Group ' s R&D, scale-up and production
capabilities of novel nanomaterials for use in infra-red sensing
and CFQD (R) display applications with short to medium term
prospects for commercial production revenues; and
(iv) retain key skilled personnel.
The Company intends to use any net proceeds in excess of GBP 2.0
million to further extend the Company's cash runway, maintain a
reasonable balance sheet and to support business development
activity with a number of new potential customers and opportunities
in a range of applications.
Details of the Fundraising and Lombard Odier participation
Under the PrimaryBid Offer, 12,571,428 new Ordinary Shares (the
"PrimaryBid shares") will be offered for subscription by existing
and new investors at a price of 17.5 pence per share (the "Issue
Price") to raise a minimum of GBP 2.2 million (before expenses).
The Group greatly values its retail investors who make up a very
significant proportion of the share register today. By using the
PrimaryBid platform, the Group is able to offer the same terms and
parallel opportunity to its retail investors and its institutional
investors.
A further announcement launching the PrimaryBid Offer will be
made shortly. The PrimaryBid Offer, via the PrimaryBid.com
platform, will be open to individual and institutional investors
until 9:00 p.m. on 15 July 2020. Further details of the terms and
conditions of the subscription will be set out in that
announcement.
The Issue Price represents a discount of 2.8 per cent. to the
Closing Price of 18.00 pence on 15 July 2020, being the last
practicable trading day prior to release of this announcement.
Lombard Odier has undertaken to subscribe for GBP 2.14 million
of the PrimaryBid shares at the Issue Price, which subscription
shall be subject to claw back depending on the amount of the other
aggregate applications received from other investors under the
PrimaryBid Offer. Lombard Odier will receive, conditional upon
Admission (as defined below), a subscription commission equivalent
to approximately 3.0 per cent of its subscription. In the event
that Admission does not occur, Lombard Odier will not receive any
commission payment.
Lombard Odier is a substantial shareholder in the Company for
the purposes of chapter 11 of the FCA's Listing Rules. Lombard
Odier is therefore, considered to be a related party for the
purposes of chapter 11 of the FCA's Listing Rules. Under Listing
Rule 11.1.10R, the participation in the the PrimaryBid Offer by
Lombard Odier constitutes a "smaller" related party transaction and
as such does not require the approval of independent ordinary
shareholders of the Company. The transaction falls within Listing
Rule 11.1.10R (smaller related party transactions) and this
announcement is made in accordance with Listing Rule
11.1.10R(2)(c).
Details of the Directors participation
The Directors have given written undertakings to purchase
PrimaryBid S hares as shown in the table below:
Director Current Shareholding PrimaryBid Resulting shareholding*
Shares
No. % No. Value No. %
(GBP)
-------------- ------- -------- ------- ---------------- --------
Chris Richards 571,587 0.20% 57,143 10,000 628,730 0.21%
-------------- ------- -------- ------- ---------------- --------
Alison Fielding 210,586 0.07% 28,571 5,000 239,157 0.08%
-------------- ------- -------- ------- ---------------- --------
Chris Batterham 125,000 0.04% 28,571 5,000 153,571 0.05%
-------------- ------- -------- ------- ---------------- --------
Michael Edelman 1,324,734 0.46% 5,714 1,000 1,330,448 0.45%
-------------- ------- -------- ------- ---------------- --------
Nigel Pickett 11,074,119 3.87% 171,429 30,000 11,245,548 3.76%
-------------- ------- -------- ------- ---------------- --------
Brian Tenner 535,232 0.19% 57,143 10,000 592,375 0.20%
-------------- ------- -------- ------- ---------------- --------
Total 13,841,258 4.84% 348,571 61,000 14,189,829 4.75%
-------------- ------- -------- ------- ---------------- --------
*Director subscriptions shall not be subject to scaling back in
the event that the issue is oversubscribed; calculated based on the
minimum subcription amount so will change based on actual
subscriptions.
Application for admission to trading
Application will be made to the FCA for admission of the
PrimaryBid Shares to listing on the Official List and to the London
Stock Exchange for admission of the PrimaryBid Shares to trading on
its main market for listed securities.
The PrimaryBid Offer is conditional on the new Ordinary Shares
to be issued pursuant to the PrimaryBid Offer being admitted to
trading on the main market of the London Stock Exchange
("Admission").
It is expected that Admission will take place no later than
8:00a.m. on 20 July 2020 and that dealings in the PrimaryBid Shares
will commence at the same time.
Expected Timetable of Principal Events
Launch of the Fundraising As of the time of this announcement
PrimaryBid Offer open from Immediately after this announcement
PrimaryBid Offer closed at 9:00p.m. on 15 July 2020
Announcement of the result of the 16 July 2020
Fundraising
Admission of PrimaryBid Shares to 8:00a.m. on 20 July 2020
trading and commencement of dealings
CREST accounts to be credited for 8:00a.m. on 20 July 2020
PrimaryBid Shares to be held in uncertificated
form
Dispatch of definitive share certificates by 24July 2020
for PrimaryBid Shares to be held in
certificated form
All references to time in this document are to London time,
unless otherwise stated.
For further information, please contact:
Nanoco Group PLC :
Michael Edelman, CEO +44 (0) 161 603 7900
Brian Tenner, COO & CFO +44 (0) 161 603 7900
Caroline Watson, Investor Relations Manager
cwatson@nanocotechnologies.com
Peel Hunt (Sponsor and Corporate Broker):
Edward Knight +44 (0) 20 7418 8900
Nick Prowting
PrimaryBid Limited:
Kieran D'Silva +44 (0) 20 3026 4750
James Deal
MHP Communications : +44 (0) 203 128 8570
Reg Hoare
Giles Robinson
Pete Lambie
nanoco@mhpc.com
The person responsible for arranging for the release of this
announcement on behalf of Nanoco is Brian Tenner, Chief Financial
Officer.
Important Notice
Peel Hunt is acting as sponsor and broker for and on behalf of
the Company. Peel Hunt is authorised and regulated by the FCA in
the United Kingdom. Peel Hunt is not acting for the Company in
relation to the PrimaryBid Offer. In acting as sponsor and broker
for and on behalf of the Company, Peel Hunt is acting exclusively
for the Company and no one else and Peel Hunt will not be
responsible to anyone other than the Company for providing the
protections afforded to its clients or for providing advice in
relation to any of the matters referred to in this
announcement.
No representation or warranty, express or implied, is or will be
made as to, or in relation to, and no responsibility or liability
is or will be accepted by Peel Hunt or by any of its affiliates or
agents as to, or in relation to, the accuracy or completeness of
this announcement or any other written or oral information made
available to or publicly available to any interested party or its
advisers, and any liability therefor is expressly disclaimed.
No statement in this announcement is intended to be a profit
forecast or estimate.
The price of shares may go down as well as up and investors may
not get back the full amount invested upon disposal of the shares.
Past performance is no guide to future performance, and persons
needing advice should consult an independent financial adviser.
The PrimaryBid Shares will not be admitted to trading on any
stock exchange other than the main market for
listed securities of the London Stock Exchange.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this announcement.
This announcement may contain and the Company may make verbal
statements containing "forward-looking statements" with respect to
certain of the Company's plans and its current goals and
expectations relating to its future financial condition,
performance, strategic initiatives, objectives and results.
Forward-looking statements sometimes use words such as "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "seek", "may", "could", "outlook" or other words
of similar meaning. By their nature, all forward-looking statements
involve risk and uncertainty because they relate to future events
and circumstances which are beyond the control of the Company,
including amongst other things, United Kingdom domestic and global
economic business conditions, market-related risks such as
fluctuations in interest rates and exchange rates, the policies and
actions of governmental and regulatory authorities, the effect of
competition, inflation, deflation, the timing effect and other
uncertainties of future acquisitions or combinations within
relevant industries, the effect of tax and other legislation and
other regulations in the jurisdictions in which the Company and its
respective affiliates operate, the effect of volatility in the
equity, capital and credit markets on the Company's profitability
and ability to access capital and credit, a decline in the
Company's credit ratings; the effect of operational risks; and the
loss of key personnel. As a result, the actual future financial
condition, performance and results of the Company may differ
materially from the plans, goals and expectations set forth in any
forward-looking statements. Any forward-looking statements made in
this announcement by or on behalf of the Company speak only as of
the date they are made. Except as required by applicable law or
regulation, the Company expressly disclaims any obligation or
undertaking to publish any updates or revisions to any
forward-looking statements contained in this announcement to
reflect any changes in the Company's expectations with regard
thereto or any changes in events, conditions or
circumstances on which any such statement is based.
DEFINITIONS USED IN THIS ANNOUNCEMENT
"Admission" the admission of the PrimaryBid Shares
to listing on the Official List by the
Financial Conduct Authority and to trading
by the London Stock Exchange on its main
market for listed securities
"Board" or "Directors" the board of directors of the Company
"certificated" or an Ordinary Share which is not in uncertificated
"in certificated form (that is, not in CREST)
form"
"Closing Price" the closing price of an Ordinary Share
"Company" or "Nanoco Nanoco Group plc, a public limited company
Group" (incorporated and registered in England
and Wales with registered number 05067291)
whose registered office is at 46 Grafton
Street, Manchester, Greater Manchester,
M13 9NT
"CREST" the computerised settlement system operated
by Euroclear which facilitates the transferring
of title to shares in uncertificated
form
"Directors" the directors of the Company
"FCA" The Financial Conduct Authority
"Fundraising" the PrimaryBid Offer
"Issue Price" 17.5 pence per PrimaryBid Share
"Lombard Odier" Lombard Odier Asset Management (Europe)
Limited
"London Stock Exchange" London Stock Exchange plc
"MAR" the Market Abuse Regulation (EU/596/2014)
"Ordinary Shares" the ordinary shares of 10 pence each
in the capital of the Company
"Peel Hunt" Peel Hunt LLP (registered number OC357088),
which is authorised and regulated by
the FCA with register number 530083
"PrimaryBid" PrimaryBid Limited (registered number
08092575), which is authorised and regulated
by the FCA with register number 779021
"PrimaryBid Offer" the PrimaryBid offer of new Ordinary
Shares made to private and other investors
on the PrimaryBid platform
"PrimaryBid Shares" new Ordinary Shares to be issued in connection
with the PrimaryBid Offer
"Shareholders" holders from time to time of Ordinary
Shares
"uncertificated recorded on a register of securities
" or "in uncertificated maintained by Euroclear in accordance
form" with the CREST Regulations as being in
uncertificated form in CREST and title
to which, by virtue of the CREST Regulations,
may be transferred by means of CREST
"United Kingdom" the United Kingdom of Great Britain and
or "UK" Northern Ireland
"United States" the United States of America, its territories
or "US" and possessions, any state of the United
States and the District of Columbia and
all other areas subject to its jurisdiction
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCQELFFBDLFBBL
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July 15, 2020 12:17 ET (16:17 GMT)
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