OND Overnet Data

RNS Number:9082Y
OverNet Data PLC
20 May 2004

Press Release

OverNet Data plc ("OverNet Data" or the "Company")

Acquisition and Placing

The Board of OverNet Data announce that the Company has entered into a
conditional merger agreement to effect the acquisition of the entire issued
share capital of FuturaGene, Inc ("FuturaGene"), to effect the Placing and that
it intends to effect a share capital reduction and apply for the Enlarged Share
Capital of the Company to be admitted to trading on AIM. In addition, the
Company intends to change its name to FuturaGene plc.

The Proposals are conditional upon, inter alia, the passing of the Resolutions
to be proposed at an EGM.


Background to and reasons for the Proposals

Following the Company's admission to trading on AIM in July 2000, the market in
which the Company then operated suffered a severe downturn. As a result of its
financial performance in the year ended 31 December 2002, the Company had a
change in both strategy and board composition.

The Company took action at that time to reduce its operating costs and its
actual and contingent liabilities to a minimum whilst maintaining its existing
operations. These decisions were taken against a background of uncertain stock
market conditions and the Company's belief that there was limited investor
appetite for technology companies which were not already cash generative.

In the year ended 31 December 2003, the Company reduced administrative costs to
#148,000 (2002: #1,500,000). The loss after tax for the same period was #140,000
(2002: #1,387,000) and diluted loss per share was 1.4p (2002: 56.0p) and cash
resources declined to #28,000 by the year end. The Company accordingly became a
shell company with few liabilities other than ongoing administrative expenditure
of a company quoted on AIM.

On 20 October 2003, following a rapid increase in the price of the Ordinary
Shares on AIM, trading on AIM in the Ordinary Shares was suspended. The Company
announced on 21 October 2003 that it had received preliminary indications of
interest in a reverse transaction from a number of third parties.

The Company has two subsidiaries, OverNet Data (UK) Limited ("ONDL") and Project
Greenfield Acquisition Corp. ("PGAC"). ONDL receives licence fees in respect of
software developed by it and has limited operating costs. ONDL is not making any
expenditure on the promotion or further development of its software. PGAC is a
wholly owned Delaware Corporation, incorporated solely for the purpose of the
Acquisition. Following the Acquisition PGAC will merge into FuturaGene and shall
cease to have a separate corporate identity.

New business proposal

After careful consideration and discussion, the Directors of OverNet Data have
concluded that the most appropriate opportunity to enhance shareholder value at
this time is to acquire FuturaGene. The Acquisition will result in the business
of the Company becoming the acquisition, development and commercialisation of
intellectual property licensed from a number of universities and research
institutes, in the field of agricultural bio-technology. FuturaGene has obtained
worldwide exclusive licences over patents on genes capable of improving crop
yields under a-biotic stress, that is cold, drought and salt stress and pathogen
attack.



FuturaGene

History and background to FuturaGene

FuturaGene was founded in March 2001 as an Indiana business corporation for the
purpose of developing specific commercial products from the research of leading
plant geneticists working at Purdue University, the University of Arizona and
the University of Illinois Champaign-Urbana. The aim of FuturaGene is to
research and develop environmentally friendly genetic solutions to solve crop
production problems. To this end FuturaGene has signed exclusive license
agreements with Purdue Research Foundation and the University of Arizona and
consequently, has obtained the worldwide exclusive commercial rights to several
allowed patent applications and provisional patent applications on a portfolio
of genes. FuturaGene is advised by a Scientific Advisory Board comprising four
professors of plant biology, further details of whom are set out below. In the
opinion of the Scientific Advisory Board these genes could have the potential of
significantly improving crop yields under a-biotic stress including salt, cold,
drought and fungal stress. These genes are acknowledged by the scientific
community through many publications in the most prestigious journals to have
significant potential.

The predominant focus of FuturaGene is the research into and commercial
exploitation of newly discovered genes, which can promote or enhance tolerance
to a-biotic stress in commercial crops. The target is to improve both crop yield
and quality, whilst reducing farm costs and enabling the cultivation of marginal
croplands by improving plant tolerance to these stresses.

The approach of the research is to study how plants protect themselves from the
major environmental stresses and to enhance the natural plant defence systems by
amplifying the plant gene expression via the insertion of a more efficient
version of the gene into the plant genome.

The entire portfolio of discoveries which has been licensed to FuturaGene is
comprised of US patents and US and international patent applications, with each
of the original patents being held by the relevant University. It is the policy
of FuturaGene to sponsor early patent applications, in order to secure
ownership, on all its discoveries in partnership with the relevant University.



Current Activities of FuturaGene

To date FuturaGene has raised in excess of $600,000 of external capital for
working capital which has allowed FuturaGene to continue with both its research
and commercial activities. FuturaGene is currently working on the development of
transgenic plants which, it is hoped, will exhibit enhanced yields under extreme
salt and drought stress. A full prototype tomato plant is currently in
development at Purdue University. The excellence of this work has been recently
recognised by the nomination of FuturaGene for a Small Business Innovation
Research grant from the U.S. Department of Agriculture.

FuturaGene is also currently collaborating with an international humanitarian
project sponsored by a not for profit organisation to develop a rice plant which
is better able to perform under a-biotic stress conditions.



Business strategy

The development strategy is to enhance the value of the genes in the current
portfolio by developing commercial crop plant prototypes tolerant to a-biotic
stress, and to seek regulatory approval for their commercial use. At the same
time FuturaGene will maintain an active R&D programme in order to increase the
portfolio of intellectual property which it licenses. In addition to the
pipeline of new discoveries being generated by members of the Scientific
Advisory Board, FuturaGene will seek to license similar technologies in the
domain of stress tolerance from other academic institutions. In December 2003
FuturaGene licensed a gene from INIA (Instituto Nacional de Investigacion y
Technologia Agaria y Alimentaria) in Spain.

In order to continue its current activities and commence the regulatory approval
process, FuturaGene now needs further capital and its board has decided to seek
a quote on the AIM through a merger with OverNet Data.

In addition, FuturaGene will seek to enter into partnerships and strategic
alliances with major companies which will also enable it to expand its
commercial strength and breadth, and share research and development costs.

In the opinion of the directors of FuturaGene, FuturaGene has the rights to the
key technology necessary to develop a new generation of transgenic plants of
significant agricultural importance. As exclusive licensees of the technology
FuturaGene has a strong position from which the Enlarged Group can enter into
joint agreements with other agricultural biotech and seed companies to
commercialise these transgenic plants.



The Potential Market

According to the International Service for the Acquisition of Agri-biotech
Applications, the global GM crop area continues to grow for the seventh
consecutive year at a sustained rate of more than 15 per cent. The estimated
global area of transgenic or GM crops for 2003 is 67.7 million hectares.

Environmental stresses on crop production inflict serious and increasing yield
diminutions which are being exacerbated by environmental change. In the United
States alone, these stresses are estimated to cost approximately $12-$14 billion
a year in crop production losses (Source: Estimating the Economic Impact of
Drought: University of Nebraska).



Continuity of OverNet Data Business

The Directors and Proposed Director intend to continue the business of OverNet
Data (UK) Limited although they do not intend to invest material funds in this
activity.

The Company does not have any employees other than the Directors, however, the
Directors and Proposed Director have confirmed that the existing employment
rights, including any pension rights of current employees will be fully
safeguarded.



The Acquisition and the Placing

Acquisition Agreement

The consideration for the Acquisition is a maximum of 45 million Ordinary
Shares.



Financing the new business

The Company has raised #1.9 million (before expenses) via the Placing, which is
conditional upon, inter alia, the passing of the Resolutions. The placing will
provide additional working capital for the Enlarged Group for the next 12
months.



Change of name

To reflect the new direction of the Company, it is proposed that the Company
changes its name to FuturaGene plc. The change of name is conditional upon the
passing of the Resolutions by shareholders at the EGM.



Capital Reduction

The Company has from time to time issued shares at a premium and at 31 December
2003, the sum of #3,532,000 stood to the credit of the share premium account. In
addition, the Company has a non-distributable capital redemption reserve arising
on the cancellation of deferred shares of #2,415,000 as at 31 December 2003. The
Company's  audited balance sheet as at 31 December 2003 showed an accumulated
deficit of #5,962,000 on its profit and loss account. The Company will be
unable, under the Act, to pay dividends or make any other distributions until
this deficit is eliminated. In view of the size of the deficit the Board
believes that it is unlikely that the deficit will be eliminated by the
generation of earnings for some years.

The Board therefore considers it appropriate (subject to Shareholders' approval
and confirmation by the Court) to eliminate the share premium account of the
Company and the capital redemption reserve account to enable the Company to
reduce the deficit on the Company's profit and loss account.



Lock-in Arrangements

Each of Mr Knifton, Mr Weller, Mr Ruggiero and Ms Zgagacz each of whom is a
Director or Proposed Director, their families and associates, and certain other
current and future shareholders of the Company has undertaken to Insinger de
Beaufort not to dispose of any interest in Ordinary Shares for a period of one
year from the date of Admission, except in certain specified circumstances.

The total number of shares subject to the lock-ins are 17,500,000 representing
69.57 per cent of the enlarged share capital immediately after Admission.



Admission, settlement and dealings

Application has been made to the London Stock Exchange for all the Ordinary
Shares in issue following approval of the Proposals to be admitted to trading on
AIM. It is expected that Admission of the Ordinary Shares will become effective
and dealings will commence in such shares on 15 June 2004.



Directors, Proposed Director and key management

The Board of Directors of the Company is currently Leo Knifton, Bruno Ruggiero
and Nigel Weller. Nigel Weller proposes to resign immediately prior to
Admission.



At Admission the Board will comprise three Directors all of whom will be
Executive Directors. The Chairman of the Board is an executive Director. The
biographies of the Directors are set out below:



Leo Knifton (aged 50), Executive Chairman

Fellow of the Securities Institute and former member of the London Stock
Exchange.

Currently working with Alfred Henry Corporate Finance Ltd helping companies
raise finance, Leo is Chairman of Oakgate Plc, SBS Plc and Voss Net plc all of
which are quoted on AIM.



Bruno Ruggiero (aged 36), Chief Executive Officer

Mr Ruggiero is one of the founders of FuturaGene. He received his Doctor of
Biological Sciences degree in 1994 from University of Rome, "La Sapienza". In
1996 he passed the national board exam as a professional in biological sciences.
He has spent many years researching Molecular Biology and Plant Physiology at
the Viterbo University, the Agostino Gemelli Hospital in Rome, National Center
of Research (CNR), and Purdue University. His research included testing of the
new pharmacological drug for Polycystic Ovarian Syndrome, developing transgenic
strawberries, mint, kiwi, olive trees and other plants of agricultural interest.
In 2004 Bruno was awarded a PhD in plant genetics from Viterbo University. Bruno
founded FuturaGene after his discovery of a DNA sequence able to improve plant's
tolerance to salinity and drought. Bruno continues his work for FuturaGene as
the Chief Executive Officer and the Director of Research and Development.



Marta K. Zgagacz (aged 26), Chief Operations Officer

Marta K. Zgagacz is one of the founders of FuturaGene. She received her Master
of Science in Physics from Purdue University. She has worked at Rutgers
University, Fermi National Accelerator Laboratory and Purdue University as a
researcher and instructor. She designed, built, tested and wrote the manual for
the cooling system for a research project to test the new particle detector at
Collider Detector at Fermi National Accelerator Laboratory. Marta developed and
wrote the first FuturaGene Business Plan that resulted in over $500,000 in
series A investment, and identified and negotiated additional investments to
help the company's growing research needs.



Nigel Weller (aged 55), Non-executive Director

Member of the Securities Institute and a member of the Institute of Directors.
Currently working with Alfred Henry Corporate Finance Limited assisting
companies to raise finance. Nigel currently sits on the Board of various
companies including Oakgate Plc and Vossnet Plc both of which are quoted on AIM.

The Board intends to appoint a non-executive director in due course.



Scientific Advisory Board

Dr. Ray Bressan is a Distinguished Professor of Plant Physiology in the
Horticulture Department at Purdue University. Professor Bressan has taught at
Purdue since 1978. He holds a Ph.D. in Plant Physiology from Colorado State
University. His research program involves establishing cell systems to study the
physiology and biochemistry of variants with increased tolerance to water and
salt stress and isolate and study genes involved in cellular tolerance. In
addition, he is working on regenerating plants from variant cell lines to
recover agriculturally useful phenotypes and study the genetic basis of the
phenotype of variants.

Dr. Paul Hasegawa was selected to be the President of the Gordon Conference on
salt stress held in July 2002 in Oxford, UK. He received his Ph.D. in Botany in
1976 and has been a Professor at the Department of Horticulture at Purdue
University since 1977. Much of his research has focused on the identification of
plant salt tolerance determinants and isolation of plant genes involved in this
process. His research has included the transformation of sorghum, lily and mint
and resulted in the first peppermint and lily transformations.

Dr. Jian-Kang Zhu is a leading researcher in the area of a-biotic stress in
plants. He spent seven years as a Professor at the Department of Plant Sciences,
University of Arizona. In January 2004 he took up the post of Professor of Plant
Cell Biology at the University of California, Riverside and directorship of the
UCR Institute for Integrative Genome Biology. In 2003, Dr. Zhu was awarded the
Charles Albert Schull award from the American Society of Plant Biologists for
outstanding investigations in the field of plant physiology. Dr. Zhu's interests
lie in the molecular mechanisms underlying plant responses to salt, drought,
cold stresses and ABA. Current research involves genetic and molecular
characterisation of Arabidopsis mutants that are hypersensitive to NaCl stress.

Dr. Hans Bohnert received his Ph.D. from UniversitAt Heidelberg, Germany, in
1972. He is a Professor of Plant Biology at University of Illinois,
Champaign-Urbana. His research is directed towards the dissection of plant
responses to the environment. Prof. Bohnert is studying physiological mechanisms
that lead to water stress (salinity, drought, low temperature) tolerance in
higher plants, to understand the biochemical basis of these reactions, and gene
expression and genetic requirements for the multi-genic trait of stress
tolerance. Mechanisms/traits that are identified (or hypothesised) are modelled
by gene transfer in stress-sensitive plants, tobacco, Arabidopsis, rice or into
yeast.



Consultant

Julian Gresser is a distinguished international attorney. From 1976-1983 he was
twice Visiting Mitsubishi Professor at the Harvard Law School and also taught
courses as a Visiting Professor at MIT on the legal issues of strategic
industries. He has been a Visiting Professor at Beijing University, where he
taught seminars on Japanese and U.S. environmental law, and also helped the
Chinese environmental authorities draft China's Marine Pollution Control Law. He
has served as legal advisor to numerous U.S., Japanese, and European companies,
and has served as a senior consultant to the U.S. State Department, The World
Bank, The Prime Minister's Office of Japan, The People's Republic of China, and
the European Commission.

Following this announcement and the posting of the Company's report and accounts
for the year ended 31 December 2003 the London Stock Exchange have readmitted
the Company's Ordinary Shares to trading on AIM.  Further copies of the AIM
Admission Document are available from the company's registered office Finsgate,
5-7 Cranwood Street, London  EC1V 9EE.


Further enquiries:

OverNet Data plc            Leo Knifton                       Tel: 020 7251 3762

Insinger de Beaufort        Stephen Goschalk/Nandita Sahgal   Tel: 020 7377 6161


- ends -



This press announcement has been issued by Insinger de Beaufort on behalf of
OverNet Data Plc
Insinger de Beaufort is a subsidiary of Bank Insinger de Beaufort N.V.
Regulated by the FSA
Registered in England and Wales No. 2479169


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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