Source - LSE Regulatory
RNS Number : 3215F
Ilika plc
06 March 2020
 

THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) 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, AUSTRALIA, NEW ZEALAND, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS NOT AN OFFER FOR SALE OR SUBSCRIPTION IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. THIS ANNOUNCEMENT IS NOT AN OFFER OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

For immediate release

6 March 2020

Ilika plc

Proposed Placing to raise up to approximately £15.0 million
and
Open Offer to raise up to approximately £2.0 million

Introduction

Ilika plc (AIM: IKA), the advanced solid-state battery company ("Ilika", the "Company" or, together with its subsidiary undertakings, the "Group"), today announces a placing of new ordinary shares of one penny each ("Ordinary Shares") in the capital of the Company (the "Placing Shares") at a price of 40 pence per Placing Share (the "Issue Price") to raise gross proceeds of up to approximately £15.0 million (the "Placing").

The Placing Shares represent approximately 37.2 per cent. of the existing issued ordinary share capital of the Company and the Issue Price represents a discount of approximately 10.1 per cent. to the closing mid-market price of 44.5 pence per Existing Ordinary Share on 5 March 2020, being the latest practicable date prior to the publication of this Announcement.

Ilika also intends to raise up to approximately £2.0 million through the issue of 5,000,000 new Ordinary Shares (the "Open Offer Shares") pursuant to an open offer (the "Open Offer") to allow Ilika shareholders, including those who are not participating in the Placing, to subscribe for new Ordinary Shares at the Issue Price.

Liberum Capital Limited ("Liberum") is acting as sole bookrunner in connection with the Placing. The Placing Shares are being offered by way of an accelerated bookbuild (the "Bookbuild"), which will be launched immediately following this Announcement, in accordance with the terms and conditions set out in Appendix 3 to this Announcement.

The timing of the closing of the Bookbuild and the allocation of Placing Shares to be issued at the Issue Price are to be determined at the discretion of the Company and Liberum.

A further announcement will be made following the close of the Bookbuild, confirming final details of the Placing.

Transaction highlights

·      Conditional placing to raise gross proceeds of up to approximately £15.0 million and an associated Open Offer to raise up to approximately £2.0 million through the issue of an aggregate of up to 42,500,000 new Ordinary Shares at an Issue Price of 40 pence per share.

 

·      The net proceeds of the Placing and the Open Offer are expected to be utilised to drive Ilika's roadmap across its portfolio of solid-state battery projects.

 

·      In particular, the net proceeds of the Placing and the Open Offer will support the transfer of Stereax® into a third party fabrication facility (£4.0 million), with the remainder of the net proceeds providing the following benefits:

 

(1)  strengthening the balance sheet and providing additional working capital; and

 

(2)  providing the option for investing in further growth in Stereax® production capability, including implementing a dual source production capability in the future.

·      It is currently envisaged that the fabrication facility will start producing wafers in the second half of FY2022 and will be able to produce c.500 wafers in that financial year, with forecast revenues of c.£3.4 million. Production will continue to be scaled-up through FY2023 allowing the fabrication facility to produce approximately 3,000 wafers, producing forecast revenues of c.£12.5 million.

 

·      The Directors believe that the funds raised from the Placing and the Open Offer will provide sufficient working capital to support Ilika's planned operations until the Company reaches cash flow break even.

·      General Meeting to approve the resolutions required to implement the Placing and the Open Offer to be held on 25 March 2020 at 12.30 p.m. at the offices of Eversheds Sutherland (International) LLP, One Wood Street, London EC2V 7WS. A detailed timetable of events is set out in Appendix 1 of this Announcement.

 

Graeme Purdy, Chief Executive of Ilika, said: "We are extremely pleased with the support shown by both existing and new investors enabling us to progress further along our roadmap of solid-state battery projects, and, in particular, to support the transfer of Stereax® into a third-party fabrication facility.

 

"Ilika believes it has the opportunity to benefit from its strong market position and lead the market in commercial sales of solid-state batteries."

 

For more information contact:

 

Ilika plc

 

 

 

www.ilika.com

Graeme Purdy, Chief Executive

Via Walbrook PR

Steve Boydell, Finance Director

 

 

 

Liberum Capital Limited

Tel: 020 3100 2000

Andrew Godber, Cameron Duncan, William Hall, Nikhil Varghese

 

 

 

Walbrook PR Ltd

Tel: 020 7933 8780 / Ilika@walbrookpr.com

Tom Cooper

Mob: 0797 122 1972

Lianne Cawthorne

Mob: 07584 391 303

Nick Rome

Mob: 07748 325 236

 

Note:

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain. If you have any queries on this, then please contact Steve Boydell, Finance Director of the Company (responsible for arranging release of this announcement) on 023 8011 1400.

 

IMPORTANT NOTICES

This Announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward- looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "forecasts", "plans", "prepares", "anticipates", "projects", "expects", "intends", "may", "will", "seeks", "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Announcement and include statements regarding the Company's and the Directors' intentions, beliefs or current expectations concerning, amongst other things, the Company's prospects, growth and strategy. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual performance, achievements and financial condition may differ materially from those expressed or implied by the forward-looking statements in this Announcement. In addition, even if the Company's results of operations, performance, achievements and financial condition are consistent with the forward-looking statements in this Announcement, those results or developments may not be indicative of results or developments in subsequent periods. Any forward-looking statements that the Company makes in this Announcement speak only as of the date of such statement and (other than in accordance with their legal or regulatory obligations) neither the Company, nor Liberum nor any of their respective associates, directors, officers or advisers undertakes any obligation to update such statements. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

Liberum is authorised and regulated by the Financial Conduct Authority (the "FCA") in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Placing or any other matters referred to in this Announcement, and Liberum will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other 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 Liberum 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, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The price of shares and any income expected from them 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 New Ordinary Shares to be issued pursuant to the Placing, Open Offer and the Director Subscriptions will not be admitted to trading on any stock exchange other than the AIM market 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.

 

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 "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the New Ordinary Shares the subject of the Placing have been subject to a product approval process, which has determined that such securities 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, Distributors should note that: the price of the securities may decline and investors could lose all or part of their investment; the securities offer no guaranteed income and no capital protection; and an investment in the securities is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Bookrunner will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of 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 securities.

Each distributor is responsible for undertaking its own target market assessment in respect of the securities and determining appropriate distribution channels.

The following is an extract from the Chairman's letter to be set out in substantially the same form in the Circular.

 

Proposed Placing to raise up to approximately £15.0 million
and
Open Offer to raise up to approximately £2.0 million

Introduction

The Company is pleased to announce a conditional Placing by Liberum, as agent for the Company, at a price of 40 pence per New Ordinary Share to raise gross proceeds of approximately £15.0 million and an associated Open Offer at the Issue Price to raise gross proceeds of up to approximately £2.0 million. The net proceeds of the Placing and the Open Offer are expected to be utilised to drive Ilika's roadmap across its portfolio of solid-state battery projects. In particular, the net proceeds of the Placing and the Open Offer are expected to support the transfer of Stereax® into a third party fabrication facility (£4.0 million), with the remainder of the net proceeds providing the following benefits; (i) strengthen the balance sheet and providing additional working capital; and (ii) provide the option for investing in further growth in Stereax® production capability, including implementing a dual source production capability in the future.

 

The Placing and the Open Offer are conditional upon, inter alia, the passing of the Resolutions at the General Meeting. As part of the Placing, the Directors consider that up to £10.0 million of the gross proceeds of the Placing should qualify for EIS Relief and VCT Relief. Applications will be made in due course to the London Stock Exchange for the EIS/VCT Placing Shares and the General Placing Shares and Open Offer Shares and the Director Subscriptions to be admitted to trading on AIM. EIS/VCT Admission is expected to become effective and dealings in the EIS/VCT Placing Shares are expected to commence at 8.00 a.m. 26 March 2020. General Admission is expected to become effective and dealings in the General Placing Shares, the Open Offer Shares are expected to commence at 8.00 a.m. on 27 March 2020.

 

If the conditions relating to the issue of the Placing Shares are not satisfied or the Placing Agreement is terminated in accordance with its terms, the Placing Shares will not be issued and the Company will not receive the related placing monies. In this scenario, the Open Offer will similarly not proceed.

 

The Issue Price represents a discount of approximately 10.1 per cent. to the closing mid-market price of 44.5 pence per Existing Ordinary Share on the Latest Practicable Date.

 

Background to, and reasons for, the Placing and the Open Offer

Ilika is a world-renowned independent expert in the design and manufacture of solid-state batteries.

There are a number of sectors where original equipment manufacturers are interested in accessing Ilika's solid state battery technology to power their products. These include electric vehicles ("EVs"), industrial sensors (otherwise known as the Industrial Internet of Things), medical technology ("MedTech") and consumer electronics.

Ilika has patented expertise in solid-state battery materials, cell designs and processes for manufacturing. It has developed and launched miniature batteries (Stereax®) for the IIoT and MedTech sectors, and is currently selling cells which are manufactured on a pilot line in Southampton, UK. Ilika forecasts the demand for its Stereax® cells will exceed the capacity of this pilot line by calendar year 2021 and, therefore, intends to design and build bespoke equipment which it will install in a third party fabrication facility provided by Semefab Limited ("Semefab"), targeting a 70-fold increase in Ilika's current production capacity.

Semefab was established in 1986 and is a commercial foundry with approximately 110 employees. It produces over 500 million die and devices per annum from its single site in Glenrothes, Scotland, servicing the automotive, security, medical, industrial, energy and consumer sectors. It has three fab lines with its third fab having a capacity of 25,000 6 inch wafers per year (with the potential for 75,000). For its financial year ended 31 October 2018, Semefab generated revenues of approximately £12.2 million with a profit after tax of approximately £1.0 million and had fixed assets of approximately £10 million and a cash balance of approximately £2.6 million.

It is currently envisaged that the fabrication facility will start producing wafers in the second half of FY2022 and will be able to produce approximately 500 wafers in that financial year, with forecast revenues of c.£3.4 million. Production will continue to be scaled-up through FY2023 allowing the fabrication facility to produce c.3,000 wafers, producing forecast revenues of c.£12.5 million.

The cost of specifying, fabricating, installing and commissioning the equipment and associated infrastructure is expected to amount to approximately £4.0 million. These costs can be fully funded by the Placing and the Open Offer, although the Company also intends to leverage other sources of funding including commercial sources, regional development and grant funding. On completion of the Placing and the Open Offer, Ilika expects to place orders for the long lead time equipment, which it expects to commission by September 2021. Ilika expects that this production capacity will be used to sell Stereax® cells to the IIoT and Medtech sectors. Ilika's forecast is made up of expected demand from a portfolio of around 15 customers. In the period until 2023, the majority of this expected demand will come from IIoT customers.

The adoption of electric vehicles is being driven by legislation around the world in order to reduce carbon emissions and tackle climate change. The EV industry has a roadmap to improve the characteristics of batteries. In the UK, the Automotive Council has published a set of market needs, setting out the improvements in the principal characteristics required over the coming 15 years. Solid-state batteries have the promise of being able to deliver performance improvements aligned with the industry EV roadmap over and above what the incremental improvements in traditional, liquid-electrolyte-based lithium-ion cells are expected to deliver.

In September 2019, under Ilika's large format cell programme, Goliath, Ilika announced that it had opened a large format battery facility for the development and initial production of solid-state batteries for EVs. Establishing this facility formed part of the activities covered by the scope of three Goliath projects being carried out on a collaborative basis with the support of the Faraday Battery Challenge, which is managed by Innovate UK. To date, Ilika has been awarded over £5.0 million of grant funding on a 70:30 basis, where 70 per cent. of Ilika's qualifying project costs are reimbursed by Innovate UK. These grants and funds currently on the Company's balance sheet will cover Goliath development activities until Q1 CY2021. The Company expects to be able to raise further grant funding to leverage this investment.

The three Goliath projects are enabling Ilika to interact with leading companies in the UK automotive sector. In the PowerDrive Line project, Ilika, as the lead partner, is working with Honda Europe and Ricardo to develop battery modules that can be charged in under 20 minutes. As part of a consortium led by McLaren Automotive, Ilika is participating in the Multi Optimal Solutions for Energy Storage Systems project to develop battery systems for performance cars. The consortium considers that current electric technology is not sufficiently mature for the demands of high performance cars due to high weight, range limitations and battery management challenges. Through the development of new materials for cells and a modular- designed battery, the consortium aims to deliver the advances it considers are needed to achieve improved levels of functionality and performance, which may one day benefit volume car buyers. Ilika's third project, Granite, for which it most recently received an award of funding from the Faraday Battery Challenge, is being led by Jaguar Land Rover and is designed to assess the compatibility of Ilika's process with established lithium-ion production techniques. The Goliath programme is closely aligned with UK government industrial strategy and is supported by government bodies tasked with encouraging the UKs' EV industry, including the Faraday Battery Challenge.

Ilika intends to raise capital by means of the Placing and the Open Offer to drive its roadmap across its portfolio of solid-state battery projects. The net proceeds of the Placing and the Open Offer are expected to support the transfer of Stereax® into a third party fabrication facility (£4.0 million), with the remainder of the net proceeds providing the following benefits; (i) strengthen the balance sheet and providing additional working capital; and (ii) provide the option for investing in further growth in Stereax® production capability, including implementing a dual source production capability in the future.

The Directors believe that the funds raised from the Placing and the Open Offer will provide sufficient working capital to support Ilika's planned operations until the Company reaches cash flow break even.

Current trading and prospects

Ilika's half-year report for the six months ended 31 October 2019 announced on 23 January 2020 contained the following statements:

Operating Highlights

Ilika has continued to develop and commercialise its thin-film miniature solid-state batteries for powering wireless sensors, as well as progressing its development of large format Goliath cells for EVs.

·           Launched the latest of the Company's miniature batteries, the Stereax® M50 in April 2019, designed for medical implants;

 

·           Continued the commercialisation of its Stereax® batteries for industrial wireless sensors, which is the Company's second significant addressable market opportunity and part of the industrial Internet of Things ecosystem;

 

·           Executed other demonstration deployments including wind turbines, rail networks and environmental pollution monitors and process control;

 

·           Third Goliath alliance, project "Granite", launched in September 2019 and led by Jaguar Land Rover. This project is supported by grant funding from the UK Government's Faraday Battery Challenge;

 

·           Total grant support offered to Ilika for its Goliath programme to date is £5.0 million; and

 

·           In September 2019, the Company opened its new large format battery facility, the Goliath pilot line, to support its portfolio of industrial collaborations.

Financial Summary

·           Total revenue for the period £1.5m (H1 2018: £1.0m)

 

·           Loss per share 1p (H1 2018: 1p per share)

 

·           EBITDA loss £1.0m (H1 2018: £1.3m)

 

·           Cash balance at period end £1.9m (H1 2018: £5.8m) with £0.7m banked post period end

Outlook

Ilika intends to intensify the commercial scale up of its miniature Stereax® technology, through investments with a third party manufacturing facility. Further technical progress is also expected with Goliath, including the evaluation of cell data by Ilika's collaboration partners. In the second half of the current financial year, Ilika expects to continue to deliver revenue growth relative to the previous year as its funded Goliath development programmes proceed and commercial revenues from Stereax® sales have a positive impact."

The Directors expect revenues for the financial year ending 30 April 2020 of approximately £3 million and net EBITDA losses of approximately £2.2 million.

The Directors expect the proposed third party manufacturing facility referred to above, once fully utilised and operating at full capacity, to deliver revenues of approximately £15.0 million per annum and a gross margin of approximately 40 per cent.

 

Details of the Placing

The Company is proposing to raise, in aggregate, up to approximately £15.0 million (before commissions and expenses) by means of the Placing, which comprises the EIS/VCT Placing and the General Placing. The Placing Shares, in aggregate, will represent approximately 37.2 per cent. of the Existing Ordinary Shares. The aggregate net proceeds after costs related to the Placing are expected to be approximately £14.1 million.

Liberum's obligations under the Placing Agreement in respect of the EIS/VCT Placing are conditional, inter alia, upon:

(i)     the Placing Agreement becoming unconditional in all respects (save for any condition relating to EIS/VCT Admission) and not having been terminated in accordance with its terms prior to EIS/VCT Admission;

 

(ii)    the passing of the Resolutions at the General Meeting (or any adjournment thereof); and

 

(iii)   EIS/VCT Admission becoming effective by no later than 8.00 a.m. on or around 26 March 2020 (or such later time and/or date (being no later than 8.00 a.m. on the Long Stop Date) as Liberum and the Company may agree).

If any of the conditions above are not satisfied, the EIS/VCT Placing Shares will not be issued.

Liberum's obligations under the Placing Agreement in respect of the General Placing Shares are conditional, inter alia, upon:

(i)     EIS Admission becoming effective;

 

(ii)    the passing of the Resolutions at the General Meeting (or any adjournment thereof);

 

(iii)   the Placing Agreement becoming unconditional in all respects (save for any condition relating to General Admission) and not having been terminated in accordance with its terms prior to General Admission; and

 

(iv)   General Admission becoming effective by no later than 8.00 a.m. on 27 March 2020 (or such later time and/or date (being no later than 8.00 a.m. on the Long Stop Date) as Liberum and the Company may agree).

If any of the conditions above are not satisfied, the General Placing Shares will not be issued. The EIS/VCT Placing is not conditional on the issue of the General Placing Shares and General Admission, nor is the EIS/VCT Placing (or the General Placing) conditional on the Open Offer.

The Placing Shares are not subject to clawback. The Placing is not being underwritten.

The Placing Shares will be issued free of all liens, charges and encumbrances and will, when issued, be fully paid, and rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive dividends and other distributions declared, paid or made after the date of their issue.

The Company received advance assurance on 26 February 2020 from HMRC that it is a qualifying company for the purposes of the Enterprise Investment Scheme ("EIS Advance Assurance"). Accordingly, whilst the Company currently expects to satisfy the relevant conditions for EIS Relief and VCT Relief in respect of the issue of the EIS/VCT Placing Shares, and the Directors are not aware of any subsequent change in the qualifying conditions or the Company's circumstances that would prevent the EIS/VCT Placing Shares from being eligible for EIS and VCT investments on EIS/VCT Admission, neither the Directors nor the Company give any representation, warranty or undertaking that relief will be available in respect of the EIS/VCT Placing Shares nor is any representation, warranty or undertaking given that the Company will continue to conduct its activities in a way that qualifies for, or preserves, its eligibility status. HMRC does not consider VCT advance assurance applications where the details of the potential qualifying holding are not given.

Subject to, inter alia, the passing of the Resolutions, application will be made to the London Stock Exchange, by means of the EIS/VCT Application, for the admission of the EIS/VCT Placing Shares to trading on AIM. EIS/VCT Admission is expected to occur and dealings are expected to commence in the EIS/VCT Placing Shares at 8.00 a.m. on 26 March 2020. Application will be made to the London Stock Exchange, by means of the General Application, for the admission of the General Placing Shares and the Open Offer Shares to trading on AIM. General Admission is expected to occur and dealings are expected to commence in the General Placing Shares and the Open Offer Shares at 8.00 a.m. on 27 March 2020. Shareholders and potential investors should be aware of the possibility that EIS/VCT Admission may occur but General Admission may not take place. If any Admission does not occur, then the Company will not receive the relevant net proceeds in respect of such Admission and the Company may not be able to finance the activities it intends to utilise the net proceeds of the Placing for, as described in this document, and may have to seek additional funding.

Director Subscriptions

The following Directors intend to subscribe for New Ordinary Shares in the following amounts and pursuant to the Director Subscription Agreements:

Director

Existing beneficial shareholding

New Ordinary Shares subscribed for

Shareholding on completion of the Placing

Shareholding as a percentage of the Enlarged Issued Share Capital

Prof. Keith Jackson

70,000

25,000

95,000

0.1 per cent.

Monika Biddulph

Nil

12,500

12,500

0.0 per cent.

In addition, Steve Boydell, Brian Hayden and Graeme Purdy intend to exercise options entitling them to 20,000 new Ordinary Shares each in accordance with the terms of the  Company's bonus scheme as soon as reasonably practicable following the General Meeting, conditionally on the Placing and the Open Offer becoming unconditional.

Details of the Open Offer

The Company considers it important that Qualifying Shareholders have an opportunity (where it is practicable for them to do so) to participate at the same price per New Ordinary Share as investors in the Placing and, accordingly, the Company is making the Open Offer to Qualifying Shareholders. The Company is proposing to raise a maximum of £2.0 million (before expenses) (assuming full take up of the Open Offer but being less than the €8.0 million maximum amount permitted without requiring the publication by the Company of a prospectus under the Prospectus Regulation Rules Sourcebook) through the issue of up to 5,000,000 Open Offer Shares.

 

The Open Offer Shares are available to Qualifying Shareholders (including Qualifying Shareholders who are also participants in the Placing) pursuant to the Open Offer at the Issue Price of 40 pence per Open Offer Share, payable in full on acceptance. The Issue Price represents a discount of approximately 10.1 per cent. to the closing mid-market price of 44.5 pence per Existing Ordinary Share on the Latest Practicable Date. Any Open Offer Shares not applied for by Qualifying Shareholders will be available to other Qualifying Shareholders under the Excess Application Facility.

Qualifying Shareholders may apply for Open Offer Shares under the Open Offer pro rata to their holdings of Existing Ordinary Shares as at the Record Date at the Issue Price on the following basis:

1 Open Offer Share for every 21 Existing Ordinary Shares
held by the Qualifying Shareholder on the Record Date

Entitlements of Qualifying Shareholders to apply for Open Offer Shares will be rounded down to the nearest whole number of Open Offer Shares. Fractional entitlements which would otherwise arise will not be issued to Qualifying Shareholders but will be aggregated and made available under the Excess Application Facility. The Excess Application Facility enables Qualifying Shareholders to apply for Excess Shares in excess of their Open Offer Entitlements. Not all Shareholders will be Qualifying Shareholders. Shareholders who are located in, or are citizens of, or have a registered office in, Restricted Jurisdictions will not qualify to participate in the Open Offer.

 

Valid applications by Qualifying Shareholders will be satisfied in full up to their Open Offer Entitlements. Applicants can apply for less or more than their entitlements under the Open Offer but the Company cannot guarantee that any application for Excess Shares under the Excess Application Facility will be satisfied as this will depend, in part, on the extent to which other Qualifying Shareholders apply for less than or more than their own Open Offer Entitlements. The Company may satisfy valid applications for Excess Shares of applicants in whole or in part but reserves the right not to satisfy any excess above any Open Offer Entitlement. The Board may scale back applications made in excess of Open Offer Entitlements on such basis as it reasonably considers to be appropriate.

 

Qualifying Shareholders should note that the Open Offer is not a rights issue and therefore the Open Offer Shares which are not applied for by Qualifying Shareholders will not be sold in the market for the benefit of Qualifying Shareholders who do not apply under the Open Offer. The Application Form will not constitute a document of title and will not be able to be traded or otherwise transferred.

The Open Offer is subject to the satisfaction, inter alia, of the following conditions on or before 27 March 2020 (or such later date (being no later than the Long Stop Date) as Liberum and the Company may agree):

 

(i)  the Placing becoming unconditional in all respects (save for any condition relating to General Admission);

 

(ii) the passing of the Resolutions at the General Meeting (or any adjournment thereof);
 

(iii) General Admission becoming effective by 8.00 a.m. on or around 27 March 2020 (or such later time and/or date (being no later than 8.00 a.m. on the Long Stop Date) as Liberum and the Company may agree)

 

Accordingly, if the above conditions are not satisfied the Open Offer will not proceed and the Open Offer Shares will not be issued and all monies received by the Receiving Agent will be returned to the applicants (at the applicant's risk and without interest) as soon as possible but, in any event, within 14 days thereafter. Any Open Offer Entitlements admitted to CREST will thereafter be disabled.

 

The Open Offer Shares will be issued free of all liens, charges and encumbrances and will, when issued, be fully paid, and rank pari passu in all respects with the Placing Shares and the Existing Ordinary Shares, including the right to receive dividends and other distributions declared, paid or made after the date of their issue.

 

Application will be made to the London Stock Exchange, by means of the General Application, for the admission of the Open Offer Shares to trading on AIM. General Admission is expected to occur and dealings are expected to commence in the Open Offer Shares at 8.00 a.m. on 27 March 2020.

 

Application has been made for the Open Offer Entitlements to be admitted to CREST. It is expected that such Open Offer Entitlements will be credited to CREST stock accounts on 10 March 2020. Application has also been made for the Excess CREST Open Offer Entitlements to be admitted to CREST and it is also expected that such Excess CREST Open Offer Entitlements will be credited to CREST stock accounts on 10 March 2020. The Open Offer Entitlements and Excess CREST Open Offer Entitlements will be enabled for settlement in CREST until 11.00 a.m. on 24 March 2020.

 

Applications through the CREST system may only be made by the Qualifying CREST Shareholder originally entitled or by a person entitled by virtue of bona fide market claim. The Open Offer Shares must be paid in full on application.

 

The latest time and date for receipt of completed Application Forms or CREST instructions and payment in respect of the Open Offer is 11.00 a.m. on 24 March 2020. The Open Offer is not being made to certain Overseas Shareholders.

 

The procedure for application and payment depends on whether, at the time at which such application and payment is made, a Qualifying Shareholder has an Application Form in respect of their Open Offer Entitlement or has their Open Offer Entitlement credited to their stock account in CREST.

 

Sources and uses of proceeds

The net proceeds of the Placing and the Open Offer are expected to be utilised to drive Ilika's roadmap across its portfolio of solid-state battery projects.

 

In particular, the net proceeds of the Placing and the Open Offer will support the transfer of Stereax® into a third party fabrication facility (£4.0 million), with the remainder of the net proceeds providing the following benefits:

 

(1)  strengthening the balance sheet and providing additional working capital; and

 

(2)  providing the option for investing in further growth in Stereax® production capability, including implementing a dual source production capability in the future.

The Directors believe that the net proceeds raised from the Placing and the Open Offer will provide sufficient working capital to support Ilika's planned operations until the Company reaches cash flow break even.

Effects of the Placing, the Open Offer and the Director Subscriptions

Upon General Admission, and assuming full take up of the Open Offer Entitlements, the Enlarged Issued Share Capital is expected to be 143,278,600 Ordinary Shares. On this basis, the New Ordinary Shares will represent approximately 29.7 per cent. of the Company's Enlarged Issued Share Capital.

Following the issue of the New Ordinary Shares pursuant to the Placing and the Open Offer and the Director Subscriptions, assuming full take up of the Open Offer Entitlements, Qualifying Shareholders who do not take up any of their Open Offer entitlements nor participate in the Placing will suffer a dilution of approximately 29.7 per cent. to their interests in the Company. If a Qualifying Shareholder takes up his, her or its Open Offer Entitlement in full, and does not participate in the Placing, he, she or it will suffer a dilution of approximately 26.2 per cent. to his, her or its interest in the Company.

The Directors have concluded that proceeding with the Placing and the Open Offer is the most suitable option available to the Company for raising additional funds through the issue of New Ordinary Shares and that issuing the New Ordinary Shares at a discount is fair and reasonable so far as all existing Shareholders are concerned. The Issue Price has been set by Liberum, after consultation with the Company, following its assessment of market conditions and following discussions with a number of institutional investors.

General Meeting

The Directors currently have existing authorities to allot shares and dis-apply pre-emption rights under section 551 and section 570 of the Act which were obtained at the Company's Annual General Meeting held on 26 September 2019.  However, these are insufficient to enable the Company to allot and issue the full amount of New Ordinary Shares pursuant to the Placing and Open Offer and the Director Subscriptions.  Accordingly, in order for the Company to allot and issue the New Ordinary Shares, the Company needs to first obtain approval from its Shareholders to grant to the Board additional authority to allot the New Ordinary Shares and to dis-apply statutory pre-emption rights which would otherwise apply to such allotment.  The Company is therefore also seeking Shareholder authority to increase the Director's general authority to allot securities and dis-apply pre-emption rights pursuant to sections 551 and 570 of the Act, respectively.

A Notice of the General Meeting to be held at the offices of the Company's solicitors, Eversheds Sutherland (International) LLP at One Wood Street, London EC2V 7WS at 12.30 p.m. on 25 March 2020, at which the Resolutions will be proposed, will be set out in the Circular.

If any Resolution is not passed by Shareholders at the General Meeting, the Placing, Director Subscriptions and Open Offer will not proceed.  The Resolutions can be summarised as follows:

·           an ordinary resolution (requiring a simple majority of votes in favour) to seek the approval of Shareholders to authorise the Directors to allot the New Ordinary Shares in connection with the Placing, the Director Subscriptions and the Open Offer; and

·           a special resolution (requiring the approval of at least 75 per cent. of the votes cast) to seek the approval of Shareholders to authorise the Directors to dis-apply pre-emption rights in connection with the allotment of the New Ordinary Shares in connection with the Placing, the Director Subscriptions and the Open Offer. This authority will be sought to allow the Directors to issue New Ordinary Shares on a non pre-emptive basis in connection with the Placing, the Open Offer and the Director Subscriptions. Whilst Shareholders may apply for Open Offer Shares under the Open Offer pro rata to their holdings of Existing Ordinary Shares, this resolution is nevertheless required to deal with, inter alia, Excess Open Offer Entitlements and other practical issues in the context of the Open Offer, in particular, in relation to fractional entitlements to Open Offer Shares and legal and/or practical restrictions under the laws of certain territories or the requirements of relevant regulatory bodies or stock exchanges.

Save in respect of the allotment of the Placing Shares, the Director Subscription Shares and the Open Offer Shares, the grant of options to employees under employee share plans or other similar incentive arrangements and pursuant to any exercise of existing options in respect of Ordinary Shares (including in relation to the proposed exercise of options by certain Directors referred to in the paragraph headed "Director Subscriptions" above), the Directors have no current intention to allot shares, or rights to subscribe or convert into shares, in the capital of the Company.

 Appendix 1

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Open Offer Record Date

6.00 p.m. on 6 March 2020

Announcement of the Placing and the Open Offer

6 March 2020

Date Existing Ordinary Shares marked 'ex-entitlement' by the London Stock Exchange

8.00 a.m. on 9 March 2020

Date of Circular and posting of Circular, Application Forms and Forms of Proxy

9 March 2020

Open Offer Entitlements and Excess Open Offer Entitlements credited to CREST stock accounts of Qualifying CREST Shareholders or as soon possible thereafter

8.00 a.m. on 10 March 2020

Recommended latest time and date for requesting withdrawal of Open Offer Entitlements and Excess Open Offer Entitlements from CREST

4.30 p.m. on 18 March 2020

Latest time and date for depositing Open Offer Entitlements and/or Excess Open Offer Entitlements into CREST

3.00 p.m. on 19 March 2020

Latest time and date for splitting Application Forms (to satisfy bona fide market claims in relation to Open Offer Entitlements only)

3.00 p.m. on 20 March 2020

Latest time and date for receipt of completed Forms of Proxy and receipt of electronic proxy appointments via CREST

12.30 p.m. on 23 March 2020

Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of the relevant CREST instructions (as appropriate)

11:00 a.m. on 24 March 2020

General Meeting

12.30 p.m. on 25 March 2020

Results of the General Meeting and the Open Offer expected to be announced through a Regulatory Information Service

25 March 2020

Expected date for EIS/VCT Admission and commencement of dealings in the EIS/VCT Placing Shares

8:00 a.m. on 26 March 2020

Expected time and date on which CREST accounts to be credited with the EIS/VCT Placing Shares in uncertificated form 

On or after 8:00 a.m. on 26 March 2020

Expected date for General Admission and commencement of dealings in the General Placing Shares, the Open Offer Shares and the Director Subscription Shares

8:00 a.m. on 27 March 2020

Expected time and date on which CREST accounts to be credited with the General Placing Shares and the Open Offer Shares in uncertificated form 

On or after 8:00 a.m. on 27 March 2020

Expected date for despatch of definitive share certificates in respect of New Ordinary Shares to be issued in certificated form

By 1 April 2020

Long Stop Date

8:00 a.m. on 15 April 2020

 

Notes:

(1)  Reference to times in this Announcement are to London time unless otherwise stated.

(2)  Each of the times and dates above are indicative only and are subject to change. If any of the above times and/or dates change, the revised times and/or dates will be notified by the Company to the Shareholders by announcement though a Regulatory Information Service.

(3)  Admission and the commencement of dealings in the New Ordinary Shares on AIM are conditional on, inter alia, the passing of the Resolutions at the General Meeting.

 

 

APPENDIX 2

DEFINITIONS

The following definitions apply throughout this Announcement, unless the context otherwise requires:

"Admission"

EIS/VCT Admission, in the case of the EIS/VCT Placing Shares, and/or General Admission, in the case of the General Placing Shares, as the context requires

"AIM"

the market of that name operated by the London Stock Exchange

"AIM Rules"

the AIM Rules for Companies published by the London Stock Exchange from time to time

"Announcement"

this announcement

"Applications"

the EIS/VCT Application and/or the General  Application, as the context requires

"Application Form"

the personalised application form accompanying the Circular (where appropriate) pursuant to which Qualifying Non-CREST Shareholders (other than certain Overseas Shareholders) may apply to subscribe for Open Offer Shares under the Open Offer

"Board" or "Directors"

the board of directors of the Company

"Bookbuild"

accelerated bookbuild

"Circular"

the circular to shareholders in connection with the Open Offer (and containing the Notice of General Meeting) to be published and posted on or around 9 March 2020

"Company" or "Ilika"

Ilika plc

"CREST" or "CREST system"

the relevant system (as defined in the CREST regulations) for the paperless settlement of trades and the holding of uncertificated securities operated by Euroclear

"CREST Participant"

a person who is, in relation to CREST, a system-participant (as defined in the CREST regulations)

"CREST Proxy Instruction"

has the meaning ascribed to it in paragraph 9 of the notes to the Notice of the General Meeting

"CREST regulations"

the Uncertificated Securities Regulations 2001 (SI2001/3755)

 

"Director Subscriptions"

the subscriptions to be made at the Issue Price by, or on behalf of the following Directors:

1.            Prof. Keith Jackson, in respect of 25,000 new Ordinary Shares; and

2.            Monika Biddulph, in respect of 12,500 new Ordinary Shares

"Director Subscription Agreements"

the subscription agreements dated on or about the date of this Announcement between the Company and each of the Directors subscribing for Director Subscription Shares

"Director Subscription Shares"

the 37,500 new Ordinary Shares to be issued pursuant to the Director Subscriptions

"EIS"

Enterprise Investment Scheme under the provisions of Part 5 of the ITA 2007 (as amended)

"EIS/VCT Admission"

the admission of the EIS/VCT Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules

"EIS/VCT Application"

the application to the London Stock Exchange for EIS/VCT Admission as required by Rule 29 of the AIM Rules

"EIS/VCT Placing"

the conditional placing of the EIS/VCT Placing Shares by Liberum, as agent on behalf of the Company, pursuant to the Placing Agreement

"EIS/VCT Placing Shares"

such number of new Ordinary Shares which are proposed to be allotted and issued to certain persons seeking to invest in "eligible shares" for the purposes of the applicable legislation in relation to EIS or VCT for cash pursuant to the terms and subject to the conditions set out in the Placing Agreement

"EIS/VCT Relief"

the relief claimed by any holder of the EIS/VCT Placing Shares under Part 5 of the ITA 2007 or exemption or relief available under sections 150A, 150C and Schedule 5B Taxation of Chargeable Gains Act 1992

"Enlarged Issued Share Capital"

the issued ordinary share capital of the Company immediately following Admission

"Euroclear"

Euroclear UK & Ireland Limited, the operator of CREST

"Excess Application Facility"

the arrangement pursuant to which Qualifying Shareholders may apply for any number of Open Offer Shares in excess of their Open Offer Entitlement provided that they have agreed to take up their Open Offer Entitlement in full in accordance with the terms and conditions of the Open Offer

"Excess CREST Open Offer Entitlement"

in respect of each Qualifying CREST Shareholder, the entitlement (in addition to his, her or its Open Offer Entitlement) to apply for Open Offer Shares pursuant to the Excess Application Facility, which is conditional on him, her or it taking up his, her or its Open Offer Entitlement in full and which may be subject to scaling back in accordance with the provisions of the Circular

"Excess Open Offer Entitlement"

in respect of each Qualifying Shareholder, the entitlement (in addition to his, her or its Open Offer Entitlement) to apply for Open Offer Shares pursuant to the Excess Application Facility, which is conditional on him, her or it taking up his, her or its Open Offer Entitlement in full and which may be subject to scaling back in accordance with the provisions of the Circular

"Excess Shares"

Open Offer Shares applied for by Qualifying Shareholders under the Excess Application Facility

"Ex-entitlement Date"

the date on which the Existing Ordinary Shares are marked ''ex'' for entitlement under the Open Offer, expected to be 8:00 a.m. on 9 March 2020

"Existing Ordinary Shares"

the 100,778,600 Existing Ordinary Shares in issue as at the Latest Practicable Date

"FCA"

the Financial Conduct Authority

"Form of Proxy"

the form of proxy for use by Shareholders in connection with the General Meeting and which will accompany the Circular

"FSMA"

the Financial Services and Markets Act 2000

"General Admission"

admission of the General Placing Shares and the Open Offer Shares to trading on AIM becoming effective in accordance with the AIM Rules

"General Application"

the application to the London Stock Exchange for General Admission as required by Rule 29 of the AIM Rules

"General Meeting"

the general meeting of the Company to be held at the offices of Eversheds Sutherland (International) LLP at One Wood Street, London EC2V 7WS at 12.30 p.m. on 25 March 2020, or any adjournment thereof, notice of which will be set out at the end of the Circular

"General Placing"

the conditional placing of the General Placing Shares by Liberum, as agent on behalf of the Company, pursuant to the Placing Agreement

"General Placing Shares"

such number of new Ordinary Shares which are proposed to be allotted and issued to certain persons for cash pursuant to the terms and subject to the conditions set out in the Placing Agreement which are not EIS/VCT Placing Shares and the Director Subscription Shares

"Group"

the Company and its subsidiary undertakings from time to time

"HMRC"

HM Revenue & Customs in the UK

"Issue Price"

the price at which the New Ordinary Shares are to be allotted and issued pursuant to the Placing (including the Director Subscriptions) and Open Offer, being 40 pence per New Ordinary Share

"ITA 2007"

Income Tax Act 2007

"Latest Practicable Date"

close of business (5.00 p.m. London time) on 5 March 2020, being the latest practicable date prior to the date of this Announcement

"Liberum"

Liberum Capital Limited, the Company's nominated adviser and broker in connection with the Placing and Open Offer

"London Stock Exchange"

London Stock Exchange plc

"MAR" or the "Market Abuse Regulation"

the Market Abuse Regulation (EU Regulation No. 596/2014

"Money Laundering Regulations"

the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended), the money laundering provisions of the Criminal Justice Act 1993, the Proceeds of Crime Act 2002 and the Criminal Finances Act 2017

"New Ordinary Shares"

the Placing Shares, the Open Offer Shares and the Director Subscription Shares

"Notice of the General Meeting"

the notice of the General Meeting to be set out at the end of the Circular

"Open Offer"

the conditional invitation to be made by the Company to Qualifying Shareholders to subscribe for the Open Offer Shares at the Issue Price on the terms and subject to the conditions to be set out in the Circular and, in the case of Qualifying Non-CREST Shareholders, in the Application Form that will accompany the Circular

"Open Offer Entitlement"

the pro rata basic entitlement of a Qualifying Shareholder, pursuant to the Open Offer, to apply to subscribe for 1 Open Offer Share for every 21 Existing Ordinary Shares registered in its name as at the Record Date

"Open Offer Record Date" or "Record Date"

the record date in relation to the Open Offer, being 5:00 p.m. on 6 March 2020

"Open Offer Shares"

up to 5,000,000 New Ordinary Shares to be issued by the Company to Qualifying Shareholders pursuant to the Open Offer

"Ordinary Shares"

ordinary shares of £0.01 each in the capital of the Company

"Overseas Shareholders"

Shareholders with registered addresses in, or who are citizens, residents or nationals of, jurisdictions outside of the UK

"Participant ID"

the identification code or membership number used in CREST to identify a particular CREST Member or other CREST Participant

"Placing"

the conditional placing by Liberum, as agent for the Company, of the Placing Shares at the Issue Price on the terms and conditions set out in the Placing Agreement

"Placing Agreement"

the placing agreement dated 6 March 2020 between the Company and Liberum

"Placing Shares"

the EIS/VCT Placing Shares and the General Placing Shares

"Prospectus Regulation Rules Sourcebook"

the prospectus rules made by the FCA in exercise of its functions as competent authority pursuant to Part VI of FSMA, as amended from time to time

"Qualifying CREST Shareholders"

Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company on the Record Date are held in uncertificated form

"Qualifying Non-CREST Shareholders"

Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company on the Record Date are held in certificated form

"Qualifying Shareholders"

Shareholders on the register of members of the Company on the Record Date with the exclusion (subject to exemptions) of persons with a registered address or located or resident in a Restricted Jurisdiction

"Receiving Agent" or "Registrar"

Computershare Investor Services PLC

"Regulatory Information Service"

a service approved by the FCA for the distribution to the public of regulatory announcements and included within the list maintained on the FCA's website

"Resolutions"

the resolutions to be set out in the Notice of General Meeting

"Restricted Jurisdiction"

any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure for the Company if information or documentation concerning the proposals set out in this document is sent or made available to Shareholders in that jurisdiction including, without limitation, the United States of America, Canada, Australia, New Zealand, Japan and the Republic of South Africa

"Shareholders"

holders of Ordinary Shares

"Share Option Schemes"

the Company's existing share option schemes

"uncertificated" or "in uncertificated form"

recorded on the relevant register of Ordinary Shares as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST

"United Kingdom" or "UK"

the United Kingdom of Great Britain and Northern Ireland

"United States" or "US"

the United States of America, each state thereof, its territories and possessions (including the District of Columbia) and all other areas subject to its jurisdiction

"US Securities Act"

the US Securities Act of 1933, as amended from time to time and the rules and regulations promulgated thereunder

"VCT"

a Venture Capital Trust under Part 6 of the Income Tax Act 2007

"VCT Relief"

the relief claimed by any holder of the EIS/VCT Placing Shares under Part 6 of the ITA 2007 (as amended) or exemption or relief available under sections 151A, 151B and Schedule 5C Taxation of Chargeable Gains Act 1992 or Chapter 5 of Part 6 of the Income Tax (Trading and Other Income) Act 2005

"£", "pounds sterling", "pence" or "p"

are references to the lawful currency of the United Kingdom

"€" or "Euros"

are references to the lawful currency of the European Union.

 

 

Appendix 3

 

Terms and Conditions of the Placing

 

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING.  THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX 3) AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA") OR THE UNITED KINGDOM, QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(e) OF REGULATION (EU) 2017/1129 (THE "PROSPECTUS REGULATION"); (2) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS) OR (B) FALL WITHIN ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS.  PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.  ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.  THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN ILIKA PLC.

THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE  UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES.  THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS.  NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE.

THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX 3) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, NEW ZEALAND, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

The distribution of this Announcement, the Placing and/or issue or sale of the Placing Shares in certain jurisdictions may be restricted by law.  No action has been taken by the Company, Liberum or any of their respective affiliates, agents, directors, officers or employees that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required.  Persons into whose possession this Announcement comes are required by the Company and Liberum to inform themselves about and to observe any such restrictions.

This Announcement or any part of it is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, New Zealand, Canada, the Republic of South Africa or Japan or any other jurisdiction in which the same would be unlawful.  No public offering of the Placing Shares is being made in any such jurisdiction.

All offers of the Placing Shares in the EEA and the United Kingdom will be made pursuant to an exemption under the Prospectus Regulation from the requirement to produce a prospectus.  In the United Kingdom, this Announcement is being directed solely at persons in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 (as amended) (the "FSMA") does not apply.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement.  Any representation to the contrary is a criminal offence in the United States.  The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained for the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Placing Shares and the Placing Shares have not been, nor will they be, registered under or offering in compliance with the securities laws of any state, province or territory of Australia, New Zealand, Canada, the Republic of South Africa or Japan.  Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, New Zealand, Canada, the Republic of South Africa or Japan or any other jurisdiction outside the United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any action.

This Announcement should be read in its entirety.  In particular, you should read and understand the information provided in the "Important Notices" section of this Announcement.

By participating in the Placing, each Placee will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix 3.

In particular, each such Placee represents, warrants, undertakes, agrees and acknowledges (amongst other things) that:

1.            it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

2.            in the case of a Relevant Person in a member state of the EEA or the United Kingdom (each, a "Relevant State") who acquires any Placing Shares pursuant to the Placing:

(a)        it is a Qualified Investor within the meaning of Article 2(e) of the Prospectus Regulation; and

(b)        in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 5(1) of the Prospectus Regulation:

 

(i)    the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in a Relevant State other than Qualified Investors or in circumstances in which the prior consent of Liberum been given to the offer or resale; or

 

(ii)    where Placing Shares have been acquired by it on behalf of persons in a Relevant State other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Regulation as having been made to such persons; and

 

3.            it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the representations, warranties, indemnities, acknowledgements, undertakings and agreements contained in this Announcement;

4.            it understands (or if acting for the account of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in this Appendix 3; and

5.            except as otherwise permitted by the Company and subject to any available exemptions from applicable securities laws, it (and any account referred to in paragraph 4 above) is outside the United States acquiring the Placing Shares in offshore transactions as defined in and in accordance with Regulation S under the Securities Act.

No prospectus

The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require any prospectus or other offering document to be published.  No prospectus or other offering document has been or will be submitted to be approved by the FCA in relation to the Placing or the Placing Shares and Placees' commitments will be made solely on the basis of the information contained in this Announcement and subject to any further terms set forth in the contract note to be sent to individual Placees.

Each Placee, by participating in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any information, representation, warranty or statement made by or on behalf of Liberum or the Company or any other person and none of Liberum, the Company nor any other person acting on such person's behalf nor any of their respective affiliates has or shall have any liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement.  Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing.  No Placee should consider any information in this Announcement to be legal, tax or business advice.  Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Details of the Placing Agreement and the Placing Shares

Liberum has today entered into the Placing Agreement with the Company under which, on the terms and subject to the conditions set out in the Placing Agreement, Liberum, as agent for and on behalf of the Company, has agreed to use its reasonable endeavours to procure Placees for the Placing Shares. 

The Placing Shares will, when issued, be subject to the articles of association of the Company and credited as fully paid and will rank pari passu in all respects with the existing issued ordinary shares of one penny each ("Ordinary Shares") in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the Placing Shares.

As part of the Placing, the Company has agreed that it will not for a period of 90 days after (but including) Admission, allot, issue, offer, sell, contract to sell or issue, grant any option, right or warrant to subscribe or purchase or otherwise dispose of or create any interest or equity of any person (including any right to acquire, option or right of pre-emption or conversion) or any mortgage, charge, pledge, lien, assignment, hypothecation, security interest, title retention, or any other security agreement or arrangement, or any agreement to create any of the foregoing over, directly or indirectly, any "equity securities" (as defined in the Companies Act) (or any securities convertible into or exchangeable for equity securities or which carry rights to subscribe or purchase equity securities) or any interest in any equity securities or agree to do any of such things or undertake any other transaction with the same economic effect as any of the foregoing or announce an offering of Ordinary Shares or any interest therein or to announce publicly any intention to enter into any transaction described above.  This agreement is subject to certain customary exceptions and does not prevent the allotment and issue of the Open Offer Shares pursuant to the Open Offer, the grant or exercise of options under any of the Company's existing share incentives and share option schemes, or following Admission the issue by the Company of any Ordinary Shares upon the exercise of any right or option or the conversion of a security already in existence.

Conditions to the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.

Liberum's obligations under the Placing Agreement in respect of the EIS/VCT Placing Shares are conditional, inter alia, upon:

(i)     the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms prior to EIS/VCT Admission;

 

(ii)    the passing of the Resolutions at the General Meeting (or any adjournment thereof); and

 

(iii)   EIS/VCT Admission becoming effective by no later than 8.00 a.m. on or around 26 March 2020 (or such later time and/or date (being no later than 8.00 a.m. on the Long Stop Date) as Liberum and the Company may agree).

 

Liberum's obligations under the Placing Agreement in respect of the General Placing Shares are conditional, inter alia, upon:

(iv)   EIS/VCT Admission having occurred;

 

(v)    the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms prior to General Admission; and

 

(vi)   General Admission becoming effective by no later than 8.00 a.m. on or around 27 March 2020 (or such later time and/or date (being no later than 8.00 a.m. on the Long Stop Date) as Liberum and the Company may agree).

 

(all conditions to the obligations of Liberum included in the Placing Agreement being together, the "Conditions").

If any of the Conditions set out in the Placing Agreement is not fulfilled or, where permitted, waived in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as the Company and Liberum may agree), or the Placing Agreement is terminated in accordance with its terms, the Placing will lapse and the Placee's rights and obligations shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.

By participating in the Placing, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Termination of the Placing" below and will not be capable of rescission or termination by it.

Liberum may, in its absolute discretion and upon such terms as it thinks fit, waive fulfilment of all or any of the Conditions in the Placing Agreement in whole or in part, or extend the time provided for fulfilment of one or more Conditions, save that certain Conditions including the Conditions relating to Admission referred to in paragraphs (iii) and (vi) above may not be waived.  Any such extension or waiver will not affect Placees' commitments as set out in this Appendix 3.

Liberum may terminate the Placing Agreement in certain circumstances, details of which are set out below.

Neither Liberum nor any of its affiliates, agents, directors, officers or employees nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision any of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Liberum.

In consideration for their services in relation to the Placing and Admission and conditional upon completion of the Placing, Liberum will be paid a commission based on the aggregate value of the Placing Shares at the Issue Price.

Termination of the Placing

Liberum may, in its absolute discretion, by notice to the Company, terminate the Placing Agreement at any time up to either Admission if, inter alia:

(a)        there has, in opinion of Liberum (acting in good faith), been a breach of the warranties given to it;

(b)        there has, in the opinion of Liberum (acting in good faith), been a material adverse change;

(c)        any statement contained in this Announcement or any other document or announcement issued or published by or on behalf of the Company in connection with the Placing is or has become or has been discovered to be untrue or inaccurate in any respect or misleading in any respect; or

(d)        in the opinion of Liberum (acting in good faith), there has been a force majeure event.

Following EIS/VCT Admission, the Placing Agreement is not capable of termination to the extent that it relates to the Placing of the EIS/VCT Placing Shares. Following General Admission, the Placing Agreement is not capable of termination to the extent it relates to the Placing of any of the General Placing Shares. For the avoidance of doubt, EIS Admission is not conditional on General Admission taking place.

If the Placing Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in this Announcement shall cease and terminate at such time and no claim can be made by any Placee in respect thereof.

By participating in the Placing, each Placee agrees with the Company and Liberum that the exercise by the Company or Liberum of any right of termination or any other right or other discretion under the Placing Agreement shall be within the absolute discretion of the Company or Liberum or for agreement between the Company and Liberum (as the case may be) and that neither the Company nor Liberum need make any reference to such Placee and that none of the Company, Liberum nor any of their respective affiliates, agents, directors, officers or employees shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.

By participating in the Placing, each Placee agrees that its rights and obligations terminate only in the circumstances described above and under the "Conditions of the Placing" section above and will not be capable of rescission or termination by it after the issue by Liberum of a trade confirmation email confirming each Placee's allocation and commitment in the Placing.

Applications for admission to trading

Applications will be made to the London Stock Exchange for admission of the Placing Shares to trading on AIM.

It is expected that EIS/VCT Admission will take place on or before 8.00 a.m. on 26 March 2020 and that dealings in the EIS/VCT Placing Shares on AIM will commence at the same time. It is expected that General Admission will take place on or before 8.00 a.m. on 27 March 2020 and that dealings in the General Placing Shares on AIM will commence at the same time.

Principal terms of the Placing

1.            Liberum is acting as bookrunner to the Placing, as agent for and on behalf of the Company.

2.            Participation in the Placing will only be available to persons who may lawfully be, and are, invited by Liberum to participate.  Liberum and any of its affiliates are entitled to participate in the Placing as principal.

3.            The price per Placing Share (the "Issue Price") is fixed at 40 pence and is payable to Liberum (as agent for the Company) by all Placees.

4.            Liberum will, following consultation with the Company, determine in its absolute discretion the extent of each Placee's participation in the Placing, and this will be confirmed orally or in writing (including by email) by Liberum as agent of the Company. Such confirmation will constitute a legally binding commitment on the Placees to acquire the Placing Shares.

5.            Each Placee's allocation and commitment will be evidenced by a trade confirmation email issued to such Placee by Liberum.  The terms of this Appendix 3 will be deemed incorporated in that contract note.

6.            Each Placee's allocation and commitment to acquire Placing Shares will be made on the terms and subject to the conditions in this Appendix 3 and will be legally binding on the Placee on behalf of which it is made and except with Liberum's consent will not be capable of variation or revocation after the time at which it is submitted.  Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to Liberum (as agent for the Company), to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Issue Price and the number of Placing Shares such Placee has agreed to acquire and the Company has agreed to allot and issue to that Placee.

7.            Except as required by law or regulation, no press release or other announcement will be made by Liberum or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

8.            Irrespective of the time at which a Placee's allocation(s) pursuant to the Placing is/are confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".

9.            All obligations under the Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing".

10.          By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

11.          To the fullest extent permissible by law and applicable FCA rules, neither:

(a)        Liberum;

(b)        any of its affiliates, agents, directors, officers, consultants or employees; nor

(c)        to the extent not contained within (a) or (b), any person connected with Liberum as defined in the FSMA ((b) and (c) being together "affiliates" and individually an "affiliate" of Liberum);

shall have any liability (including to the extent permissible by law, any fiduciary duties) to Placees or to any other person whether acting on behalf of a Placee or otherwise.  In particular, neither Liberum nor any of its affiliates shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of Liberum's conduct of the Placing or of such alternative method of effecting the Placing as Liberum and the Company may agree.

Registration and settlement

If Placees are allocated any Placing Shares in the Placing they will be sent a trade confirmation email which will confirm the number of Placing Shares allocated to them, the Issue Price and the aggregate amount owed by them to Liberum.

Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed as directed by Liberum in accordance with either the standing CREST or certificated settlement instructions which they have in place with Liberum.

Settlement of transactions in the Placing Shares (ISIN: GB00B608Z994) following Admission will take place within the CREST system, subject to certain exceptions.  Settlement through CREST is expected to occur, in respect of the EIS/VCT Placing Shares on 26 March 2020, and, in respect of the General Placing Shares on 27 March 2020 (each a "Settlement Date") in accordance with the contract notes.  Settlement will be on a delivery versus payment basis.  However, in the event of any difficulties or delays in the admission of the Placing Shares to CREST or the use of CREST in relation to the Placing, the Company and Liberum may agree that the Placing Shares should be issued in certificated form.  Liberum reserves the right to require settlement for the Placing Shares, and to deliver the Placing Shares to Placees, by such other means as it deems necessary if delivery or settlement to Placees is not practicable within the CREST system or would not be consistent with regulatory requirements in the jurisdiction in which a Placee is located.

Subject to the conditions set out above, payment in respect of the Placees' allocation is due as set out below. Each Placee should provide its settlement details in order to enable instructions to be successfully matched in CREST. The relevant settlement details for the EIS/VCT Placing Shares are as follows:

 

CREST Participant ID of Liberum:                                              ENQAN

Expected Trade time & date:                                                      08.00 a.m. on 9 March 2020

Settlement Date:                                                                         26 March 2020

ISIN code for the Placing Shares:                                               GB00B608Z994

Deadline for Placee to input instructions into CREST:                12.00 p.m. on 25 March 2020

 

The relevant settlement details for the General Placing Shares are as follows:

 

CREST Participant ID of Liberum:                                              ENQAN

Expected Trade time & date:                                                      08.00 a.m. on 9 March 2020

Settlement Date:                                                                         27 March 2020

ISIN code for the Placing Shares:                                               GB00B608Z994

Deadline for Placee to input instructions into CREST:                12.00 p.m. on 26 March 2020

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above, in respect of either CREST or certificated deliveries, at the rate of three percentage points above prevailing base rate of Barclays Bank plc as determined by Liberum.

Each Placee is deemed to agree that if it does not comply with these obligations, Liberum may sell any or all of their Placing Shares on their behalf and retain from the proceeds, for Liberum's own account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due.  The relevant Placee will, however, remain liable for any shortfall below the Issue Price and for any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of its Placing Shares on its behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees must ensure that, upon receipt, the conditional contract note is copied and delivered immediately to the relevant person within that organisation.  Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to United Kingdom stamp duty or stamp duty reserve tax.  Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations, warranties and further terms

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) represents, warrants, acknowledges and agrees (for itself and for any such prospective Placee) that (save where Liberum expressly agrees in writing to the contrary):

1.         it has read and understood this Announcement in its entirety and that its acquisition of the Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained herein and that it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Placing, the Company, the Placing Shares or otherwise, other than the information contained in this Announcement;

 

2.         it has not received a prospectus or other offering document in connection with the Placing and acknowledges that no prospectus or other offering document:

 

(a)        is required under the Prospectus Regulation or other applicable law; and

(b)        has been or will be prepared in connection with the Placing;

 

3.         the Ordinary Shares are admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules and the Market Abuse Regulation (EU Regulation No. 596/2014 (the "MAR")), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;

 

4.         it has made its own assessment of the Placing Shares and has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing and neither Liberum nor the Company nor any of their respective affiliates, agents, directors, officers or employees nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company or any other person other than the information in this Announcement or any information publicly announced through a Regulatory Information Service (as defined in the AIM Rules) by or on behalf of the Company on or prior to the date of this Announcement (the "Publicly Available Information"); nor has it requested Liberum, the Company, any of their respective affiliates, agents, directors, employees or officers or any person acting on behalf of any of them to provide it with any such information;

 

5.         neither Liberum nor any person acting on behalf of it nor any of its affiliates, agents, directors, officers or employees has or shall have any liability for any Publicly Available Information, or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

 

6.        

(a)        the only information on which it is entitled to rely on and on which it has relied in committing to acquire the Placing Shares is contained in this Announcement, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on this Announcement;

(b)        neither Liberum, nor the Company (nor any of their respective affiliates, agents, directors, officers and employees) have made any representation or warranty to it, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of the Publicly Available Information;

(c)        it has conducted its own investigation of the Company, the Placing and the Placing Shares, satisfied itself that the information is still current and relied on that investigation for the purposes of its decision to participate in the Placing; and

(d)        it has not relied on any investigation that Liberum or any person acting on its behalf may have conducted with respect to the Company, the Placing or the Placing Shares;

 

7.         the content of this Announcement and the Publicly Available Information has been prepared by and is exclusively the responsibility of the Company and that neither Liberum nor any persons acting on its behalf is responsible for or has or shall have any liability for any information, representation, warranty or statement relating to the Company contained in this Announcement or the Publicly Available Information nor will they be liable for any Placee's decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement, the Publicly Available Information or otherwise.  Nothing in this Appendix 3 shall exclude any liability of any person for fraudulent misrepresentation;

 

8.         it and/or each person on whose behalf it is participating:

 

(a)        is entitled to acquire Placing Shares pursuant to the Placing under the laws and regulations of all relevant jurisdictions;

(b)        has fully observed such laws and regulations;

(c)        has capacity and authority and is entitled to enter into and perform its obligations as an acquirer of Placing Shares and will honour such obligations; and

(d)        has obtained all necessary consents and authorities (including, without limitation, in the case of a person acting on behalf of a Placee, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix 3) under those laws or otherwise and complied with all necessary formalities to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto and, in particular, if it is a pension fund or investment company it is aware of and acknowledges it is required to comply with all applicable laws and regulations with respect to its acquisition of Placing Shares;

 

9.         it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are acquired will not be, a resident of, or with an address in, or subject to the laws of, Australia, Canada, the Republic of South Africa or Japan, and it acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of Australia, Canada, the Republic of South Africa or Japan and may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;

 

10.        it and the beneficial owner of the Placing Shares is, and at the time the Placing Shares are acquired will be, outside the United States and acquiring the Placing Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S under the Securities Act;

 

11.        it understands that the Placing Shares have not been, and will not be, registered under the Securities Act and may not be offered, sold or resold in or into or from the United States except pursuant to an effective registration under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in accordance with applicable state securities laws; and no representation is being made as to the availability of any exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;

 

12.        it (and any account for which it is purchasing) is not acquiring the Placing Shares with a view to any offer, sale or distribution thereof within the meaning of the Securities Act;

 

13.        it understands that:

 

(a)        the Placing Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act and will be subject to restrictions on resale and transfer subject to certain exceptions under US law;

(b)        no representation is made as to the availability of the exemption provided by Rule 144 for resales or transfers of Placing Shares; and

(c)        it will not deposit the Placing Shares in an unrestricted depositary receipt programme in the United States or for US persons (as defined in the Securities Act);

 

14.        it will not offer, sell, transfer, pledge or otherwise dispose of any Placing Shares except:

 

(a)        in an offshore transaction in accordance with Rules 903 or 904 of Regulation S under the Securities Act; or

(b)        pursuant to another exemption from registration under the Securities Act, if available,

and in each case in accordance with all applicable securities laws of the states of the United States and other jurisdictions;

15.        it understands that the Placing Shares are expected to be issued to it through CREST but may be issued to it in certificated, definitive form and acknowledges and agrees that the Placing Shares will, to the extent they are delivered in certificated form, bear a legend to the following effect unless agreed otherwise with the Company:

"THESE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE APPLICABLE SECURITIES LAWS OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (C) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES.  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THE SECURITIES MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF THE COMPANY'S SECURITIES ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK.  EACH HOLDER, BY ITS ACCEPTANCE OF THESE SHARES, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS.";

16.        it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it, or any other presentational or other materials concerning the Placing in or into or from the United States (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;

 

17.        none of Liberum, its affiliates and any person acting on behalf of any of them is making any recommendations to it or advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of Liberum and that Liberum has no duties or responsibilities to it for providing the protections afforded to its clients or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any Conditions or exercise any termination right;

 

18.        it will make payment to Liberum for the Placing Shares allocated to it in accordance with the terms and conditions of this Announcement on the due times and dates set out in this Announcement, failing which the relevant Placing Shares may be placed with others on such terms as Liberum determines in its absolute discretion without liability to the Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this Announcement) which may arise upon the sale of such Placee's Placing Shares on its behalf;

 

19.        its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that the Company may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;

 

20.        no action has been or will be taken by any of the Company, Liberum or any person acting on behalf of the Company or Liberum that would, or is intended to, permit a public offer of the Placing Shares in the United States or in any country or jurisdiction where any such action for that purpose is required;

 

21.        the person who it specifies for registration as holder of the Placing Shares will be:

 

(a)        the Placee; or

(b)        a nominee of the Placee, as the case may be, 

 

22.        Liberum and the Company will not be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement.  Each Placee and any person acting on behalf of such Placee agrees to acquire Placing Shares pursuant to the Placing and agrees to indemnify the Company and Liberum in respect of the same on the basis that the Placing Shares will be issued to a CREST stock account of Liberum who will hold them as nominee on behalf of the Placee until settlement in accordance with its standing settlement instructions with it;

 

23.        the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a stamp duty or stamp duty reserve tax liability under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depository receipts and clearance services) and that it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability;

 

24.        if in the United Kingdom, represents and warrants that it is a Qualified Investor and a person: (i) who is an investment professionals within the meaning of Article 19(5) of the Order; (ii) who falls within Article 49(2)(A) to (D) ("High Net Worth Companies, Unincorporated Associations, etc.") of the Order; or (iii) to whom this Announcement may otherwise be lawfully communicated;

 

25.        it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom or in the EEA prior to the expiry of a period of six months from Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes Prospectus Regulation of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA or an offer to the public in any member state of the EEA within the meaning of the Prospectus Regulation;

 

26.        if in a Member State of the European Economic Area, unless otherwise specifically agreed with Liberum in writing, represents and warrants that it is a Qualified Investor within the meaning of the Prospectus Regulation;

 

27.        if in the United Kingdom, it has only communicated or caused to be communicated and it will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person and it acknowledges and agrees that this Announcement has not been approved by Liberum in its capacity as an authorised person under section 21 of the FSMA and it may not therefore be subject to the controls which would apply if it was made or approved as financial promotion by an authorised person;

 

28.        it has complied and it will comply with all applicable laws with respect to anything done by it or on its behalf in relation to the Placing Shares (including all relevant provisions of the FSMA in respect of anything done in, from or otherwise involving the United Kingdom);

 

29.        if it is a financial intermediary, as that term is used in Article 5(1) of the Prospectus Regulation, the Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the EEA or the United Kingdom other than Qualified Investors, or in circumstances in which the express prior written consent of Liberum has been given to the offer or resale;

 

30.        if it has received any inside information (for the purposes of the MAR and section 56 of the Criminal Justice Act 1993 or other applicable law) about the Company in advance of the Placing, it has not:

 

(a)        dealt (or attempted to deal) in the securities of the Company;

(b)        encouraged, recommended or induced another person to deal in the securities of the Company; or

(c)        unlawfully disclosed such information to any person, prior to the information being made publicly available;

 

31.        neither Liberum, the Company nor any of their respective affiliates, agents, directors, officers or employees nor any person acting on behalf of Liberum or its affiliates, agents, directors, officers or employees is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing nor providing advice in relation to the Placing nor in respect of any warranties, acknowledgements, agreements, undertakings, or indemnities contained in the Placing Agreement nor the exercise or performance of any of Liberum's rights and obligations thereunder including any rights to waive or vary any Conditions or exercise any termination right;

 

32.        Liberum and its affiliates, acting as an investor for its or their own account(s), may bid or subscribe for and/or purchase Placing Shares and, in that capacity, may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise.  Accordingly, references in this Announcement to the Placing Shares being offered, subscribed, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by, Liberum and/or any of its affiliates acting as an investor for its or their own account(s).  Neither Liberum nor the Company intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so;

 

33.        it:

 

(a)      has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017;

 

(b)      is not a person:

(i)         with whom transactions are prohibited under the US Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury;
(ii)         named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or
(iii)        subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations or other applicable law,

(together, the "Regulations") and if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to Liberum such evidence, if any, as to the identity or location or legal status of any person which it may request from it in connection with the Placing (for the purpose of complying with the Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by Liberum on the basis that any failure by it to do so may result in the number of Placing Shares that are to be acquired by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as Liberum may decide at its sole discretion;

34.        in order to ensure compliance with the Regulations, Liberum (for itself and as agent on behalf of the Company) or the Company's registrars may, in their absolute discretion, require verification of its identity.  Pending the provision to Liberum or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at Liberum's absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed at Liberum's or the Company's registrars', as the case may be, absolute discretion.  If within a reasonable time after a request for verification of identity Liberum (for itself and as agent on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, either Liberum and/or the Company may, at its absolute discretion, terminate its commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;

 

35.        it acknowledges that its commitment to acquire Placing Shares on the terms set out in this Announcement and in the trade confirmation will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or Liberum's conduct of the Placing;

 

36.        it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of acquiring the Placing Shares.  It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing.  It has relied upon its own examination and due diligence of the Company and its affiliates taken as a whole, and the terms of the Placing, including the merits and risks involved;

 

37.        it irrevocably appoints any duly authorised officer of Liberum as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares for which it agrees to acquire upon the terms of this Announcement;

 

38.        the Company, Liberum and others (including each of their respective affiliates, agents, directors, officers and employees) will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements, which are given to Liberum on its own behalf and on behalf of the Company and are irrevocable;

 

39.        it is acting as principal only in respect of the Placing or, if it is acquiring the Placing Shares as a fiduciary or agent for one or more investor accounts, it is duly authorised to do so and it has full power and authority to make, and does make, the foregoing representations, warranties, acknowledgements, agreements and undertakings on behalf of each such accounts;

 

40.        time is of the essence as regards its obligations under this Appendix 3;

 

41.        any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to Liberum;

 

42.        the Placing Shares will be issued subject to the terms and conditions of this Appendix 3; and

 

43.        the terms and conditions contained in this Appendix 3 and all documents into which this Appendix 3 is incorporated by reference or otherwise validly forms a part and/or any agreements entered into pursuant to these terms and conditions and all agreements to acquire Placing Shares pursuant to the Placing will be governed by and construed in accordance with English law and it submits to the exclusive jurisdiction of the English courts in relation to any claim, dispute or matter arising out of such contract except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with interest chargeable thereon) may be taken by the Company or Liberum in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify and hold the Company, Liberum and each of their respective affiliates, agents, directors, officers and employees harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings given by the Placee (and any person acting on such Placee's behalf) in this Appendix 3 or incurred by Liberum, the Company or each of their respective affiliates, agents, directors, officers or employees arising from the performance of the Placee's obligations as set out in this Announcement, and further agrees that the provisions of this Appendix 3 shall survive after the completion of the Placing.

The agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the United Kingdom relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct by the Company.  Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service.  If there are any such arrangements, or the settlement related to any other dealings in the Placing Shares, stamp duty or stamp duty reserve tax may be payable.  In that event, the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax and neither the Company nor Liberum shall be responsible for such stamp duty or stamp duty reserve tax.  If this is the case, each Placee should seek its own advice and they should notify Liberum accordingly.  In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares and each Placee, or the Placee's nominee, in respect of whom (or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such non-United Kingdom stamp, registration, documentary, transfer or similar taxes or duties undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company and Liberum in the event that either the Company and/or Liberum have incurred any such liability to such taxes or duties.

The representations, warranties, acknowledgements and undertakings contained in this Appendix 3 are given to Liberum for itself and on behalf of the Company and are irrevocable.

Liberum is authorised and regulated by the FCA in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Placing or any other matters referred to in this Announcement, and Liberum will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other matters referred to in this Announcement.

Each Placee and any person acting on behalf of the Placee acknowledges that the Liberum does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings, acknowledgements, agreements or indemnities in the Placing Agreement.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that Liberum may (at its absolute discretion) satisfy its obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any connected or associated person to do so.

When a Placee or any person acting on behalf of the Placee is dealing with Liberum, any money held in an account with Liberum on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the relevant rules and regulations of the FCA made under the FSMA.  Each Placee acknowledges that the money will not be subject to the protections conferred by the client money rules: as a consequence this money will not be segregated from Liberum's money in accordance with the client money rules and will be held by it under a banking relationship and not as trustee.

References to time in this Announcement are to London time, unless otherwise stated.

All times and dates in this Announcement may be subject to amendment.  Placees will be notified of any changes.

No statement in this Announcement is intended to be a profit forecast or estimate, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The price of shares and any income expected from them 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 New Ordinary Shares to be issued pursuant to the Placing and the Open Offer will not be admitted to trading on any stock exchange other than the AIM market 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 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.
 
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