Source - LSE Regulatory
RNS Number : 4466B
Osirium Technologies PLC
11 February 2022
 

The information contained within this announcement is deemed by the Company to constitute inside information pursuant to Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended.

 

11 February 2022

 

Osirium Technologies plc

("Osirium" or the "Company")

 

Proposed placing and subscription to raise £1 million and Notice of General Meeting

 

 

Osirium Technologies plc (AIM: OSI), a leading vendor of cloud-based cybersecurity software, is pleased to announce that it has conditionally raised £1 million before expenses by way of:

 

·      a placing of 10,592,618 new ordinary shares of 1p each in the capital of the Company (the "Placing Shares"), at a price of 6 pence per share (the "Issue Price") to raise £635,557 (before expenses) (the "Placing"); and

 

·      an issue of 6,074,049 new ordinary shares of 1p each in the capital of the Company (the "Subscription Shares") to certain individuals including a number of Directors of the Company (including their families) and a member of senior management at the Issue Price to raise £364,443 (the "Subscription").

 

The Issue Price represents a discount of 40 per cent. to the closing mid-market share price of an existing ordinary share of 1p each in the capital of the Company ("Ordinary Shares") on 10 February 2022, being the last business day prior to this announcement.

 

The Placing will be carried out in two tranches:

 

·      5,175,950 Placing Shares (the "First Placing Shares") will be allotted and issued utilising the Company's existing share allotment authorities granted at its 2021 annual general meeting held on 22 July 2021 (the "2021 AGM"); and

 

·      5,416,668 Placing Shares (the "Second Placing Shares") to be allotted and issued conditional, inter alia, upon the passing of the resolution to grant authority to the Directors to allot new Ordinary Shares otherwise than on a pre-emptive basis at the Company's General Meeting expected to be held at 11.00 am on 7 March 2022 (the "General Meeting").

 

The allotment and issue of the First Placing Shares will not be conditional upon the passing of the proposed resolution to be considered at the General Meeting or the allotment and issue of the Second Placing Shares.

 

The allotment and issue of the Subscription Shares will be conditional upon the passing of the proposed resolution to be considered at the General Meeting and the allotment and issue of the Second Placing Shares.

 

Highlights

 

·      Placing and Subscription to raise £1 million (before expenses), by way of a proposed placing of 10,592,618 new Ordinary Shares with existing and new institutional investors at the Issue Price and a Subscription of an aggregate of 6,074,049 new Ordinary Shares in the Company by certain individuals including a number of Directors of the Company (including their families) and a member of senior management at the Issue Price.

 

·      The net proceeds of the Placing and the Subscription (being approximately £0.88 million) will be used to scale the Group's business through:

 

more digital sales and marketing;

driving upselling and cross selling to existing customers to "expand" the relationships in line with the "land and expand" strategy;

retaining the recurring licence renewals;

developing the Group's channel partner network to broaden reach; and.

further product innovation to decrease time to market.

 

·    The Placing and Subscription, along with an anticipated R&D tax credit due in 2022, ensures that the Group remains in a position to capture the substantial market opportunity available and enables the Board to continue to assess the Company's go-to-market strategies in order to deliver long term shareholder value. To achieve this, the Board considers that the Company will be required to raise additional capital during the second half of 2022.

 

David Guyatt, Chief Executive Officer, commented:

 

"Privileged access is increasingly recognised as a core requirement for IT security, and Osirium's privileged solutions, which offer enterprise grade security but without unnecessary complexity and protracted implementation, continue to represent a compelling proposition for organisations across the public and private sectors.

 

"The proceeds from this Placing and Subscription will enable us to fulfil the next stage of our growth strategy. Through investments into our operations, these funds will allow us to capture this growing demand in the UK and internationally and deliver long-term shareholder value.

 

"We start the new year with continued positive momentum following a record year of customer acquisition, coupled with an innovative product portfolio, growing global partner network and high customer retention across a growing and diversified customer base. We believe the market rationale is clear and we have a strong business platform from which to capitalise on the significant growth opportunity."

 

Background to and reasons for the Placing and Subscription

 

The Company continues to make significant progress on its strategic goals, underpinned by its privileged access management solution, 'Land, Expand and Renew' growth model and robust SaaS growth. The Directors believe that this has been validated by the Group's record customer acquisitions in 2021, doubling the Company's customer base, reflecting the return to, and increase in demand for, Osirium's products and the stabilisation in its end markets.

 

Throughout 2021, the Company expanded its market presence through a number of significant new contract wins and 'land-and-expand' orders from existing accounts, whilst maintaining more than 95 per cent. customer retention levels by value.

 

The Group expanded its footprint within existing customer sectors, most notably NHS and 'blue light' customers proving to be a particularly fertile market, with a number of new business wins in the healthcare market, and strengthened its position in other sectors including telecoms, retail, childcare services and higher education.

 

Business wins of note included deals with customers in the financial services, food & beverage, legal and semiconductor markets, as well as two more separate regional ambulance services. As the Company continues to win new business, it is becoming further entrenched in its customers' organisations as its solutions touch end users across a business's operations. The Group has a significant opportunity in both the privileged access management ("PAM") and the Digital Process Automation ("DPA") markets, estimated to be valued by 2026 at $5.4 billion and $16.1 billion, respectively.

 

The Directors believe that a growing awareness of PAM as mission-critical IT infrastructure for upper mid-market clients and growth in associated automation markets underpins the market opportunity for Osirium, driving booking levels for the Company's solutions.

 

The Directors believe that growth will be driven by continued customer wins coupled with expanded engagement with existing customers, which will require product enhancements within the privileged access suite to drive value for customers and investment in the Group's international partner network to expand the Group's addressable market and address the circa $21 billion market opportunity in PAM and DPA.

 

It remains a strategic priority of the Group to maintain its activities to drive growth and the Directors therefore consider that it is in the best interests of the Company and its Shareholders to undertake the Placing and Subscription at this time.

 

Use of Proceeds

 

The net proceeds of the Placing and the Subscription (being approximately £0.88 million, assuming that all Placing Shares and Subscription Shares are subscribed for) will be used to scale the Group's business through:

 

·      more digital sales and marketing;

·      driving upselling and cross selling to existing customers to "expand" the relationships in line with the "land and expand" strategy;

·      retaining the recurring licence renewals;

·      developing the Group's channel partner network to broaden reach; and

·      further product innovation to decrease time to market.

 

The Placing and Subscription, along with an anticipated R&D tax credit due in 2022, ensures that the Group remains in a position to capture the substantial market opportunity available and enables the Board to continue to assess the Company's go-to-market strategies in order to deliver long term shareholder value. To achieve this, the Board considers that the Company will be required to raise additional capital during the second half of 2022.

 

Current trading and prospects

 

As announced in its recent trading update on 14 January 2022, subject to completion of audit the Company expects to report bookings and revenue for the 12 months to 31 December 2021 of at least £1.6 million (2020: £1.57 million) and £1.45 million (2020: £1.43 million) respectively, in line with the prior year. Deferred revenue at 31 December 2021 was £1.66 million, providing visibility as the Group starts the new year. Debtors and cash balances as at 31 December 2021 were £0.7 million.

 

Home working has laid bare many of the risks to cyber security among organisations, and the Directors believe that many organisations have now made PAM a priority to ensure their company data, privileged accounts and regular business processes remain secure. The ease of implementation of the Group's platform, and professionalism of customer engagement continue to be key competitive advantages. Osirium provides the ideal solution for organisations wanting great quality security but without unnecessary complexity and protracted implementation. While acknowledging the ongoing uncertainty and disruption caused by COVID-19, the trading momentum the Group experienced in its record customer acquisitions in 2021 has carried through to the early part of the current financial year, and Osirium remains focused on new orders and expanding the pipeline of opportunities domestically and overseas through its direct and indirect channels. In particular, the Group has a number of opportunities in not only existing customer renewals of £1.5m in 2022, but additional 'upsell opportunities' in the healthcare sector as a result of NHS Digital funding for PAM projects and, in Q1 2021, the Group secured a substantial number of NHS trusts as new customers, including hospitals, regional trusts and ambulance services.

 

With privileged access now widely recognised as a core requirement of IT security, the Group is confident in its future prospects and the Board is optimistic that the Group will deliver a year of material progress in 2022. Since the start of the year, the Company has closed five new customer contracts, two of which exceeded the largest single new customer order achieved in 2021.

 

Further details of the Placing

 

Under the Placing, the Company has conditionally raised £635,557 (before expenses) through a placing of 10,592,618 Ordinary Shares at 6 pence per share with institutional and other investors. The Company has entered into a Placing Agreement with Allenby Capital under which Allenby Capital has agreed to use its reasonable endeavours to procure Placees for the Placing Shares at the Issue Price. The Placing has not been underwritten.

The Placing Shares will represent approximately 23 per cent. of the enlarged share capital of the Company following Second Admission.

The Company currently has limited authority to issue new ordinary shares for cash on a non-pre-emptive basis. Accordingly, the Placing is being conducted in two tranches.

The first tranche to raise a total of £310,557 by the issue of 5,175,950 Placing Shares (being the First Placing Shares) at the Issue Price, has been carried out within the Company's existing share allotment authorities granted at the 2021 AGM. The allotment of the First Placing Shares is conditional, inter alia, upon First Admission and the Placing Agreement becoming unconditional in respect of the First Placing Shares and not being terminated in accordance with its terms prior to First Admission. The First Placing is not conditional on the second tranche of the Placing and will proceed whether or not the Second Placing Shares are allotted and Second Admission occurs. Application has been made for the First Placing Shares to be admitted to trading on AIM and it is expected that First Admission will take place on 17 February 2022.

The second tranche of the Placing, to raise a total of £325,000 by the issue of 5,416,668 Placing Shares (being the Second Placing Shares) at the Issue Price, is conditional upon, inter alia, the passing of the Resolution to be put to Shareholders at the General Meeting (granting the Directors authority to allot new ordinary shares otherwise than on a pre-emptive basis). In addition, the allotment of the Second Placing Shares is conditional, inter alia, on the Placing Agreement becoming unconditional in respect of the Second Placing Shares and not being terminated in accordance with its terms prior to Second Admission. It is expected that Second Admission will take place on 10 March 2022. 

The Placing is conditional, so far as concerns the Second Placing Shares upon, inter alia, Second Admission occurring by no later than 8.00 a.m. on 10 March 2022 (or such later time and/or date as the Company and Allenby Capital may agree, not being later than 8.00 a.m. on 30 March 2022). If such condition is not satisfied or, if applicable, waived, the placing of the Second Placing Shares will not proceed.

The Placing Shares will be issued credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive dividends and other distributions declared on or after the date on which they are issued.

It is expected that CREST accounts will be credited on the relevant day of Admission and that share certificates (where applicable) will be despatched within five working days of Admission.

The Placing will entitle holders of the Company's £2,700,000 convertible unsecured 7.5% notes, due in 2024 and created by the loan note instrument dated 21 October 2019 (the "Convertible Loan Notes"), to elect to convert the principal amount of their loan notes into fully paid Ordinary Shares ranking pari passu in all respects with the Ordinary Shares of the Company in issue on the date of conversion. Conversion will be at a rate equal to 22 pence per share, being the placing price of the Company's last placing announced on 23 April 2021. Notice of conversion may be given by holders of the Convertible Loan Notes at any time within 20 business days of First Admission.

Further details of the Subscription and Director dealings

 

Concurrent with and conditional on the Placing, certain individuals including a number of Directors (and their families) and a member of senior management have agreed to subscribe for an aggregate of 6,074,049 new Ordinary Shares at the Issue Price to raise an additional £364,443. Following the Subscription, the Directors (and their respective spouses) will hold an aggregate of 6,362,502 Ordinary Shares, representing approximately 13.8 per cent. of the enlarged share capital of the Company following Second Admission.

 

The following Directors of the Company have subscribed for Subscription Shares pursuant to the Subscription:

 

Director

Existing number of Ordinary Shares

Number of Subscription Shares

Total number of Ordinary Shares following the Subscription

Simon Lee

406,083

500,000

906,083

David Guyatt*

1,579,776

3,333,333

4,913,109

Rupert Hutton*

137,142

116,667

253,809

Steve Purdham

102,597

83,333

185,930

 

* and spouse

 

Further details of the Subscription are set out in the table below.

 

Related party transactions

 

The participation of certain Directors in the Subscription constitutes a related party transaction pursuant to the AIM Rules for Companies. The Directors (excluding Simon Lee, David Guyatt, Rupert Hutton and Steve Purdham, each of whom has participated in the Subscription), having consulted with the Company's nominated adviser, Allenby Capital Limited, consider the terms of the Subscription to be fair and reasonable insofar as the Company's shareholders are concerned.

 

Admission to trading and total voting rights

 

Application has been made for the admission of the First Placing Shares to trading on AIM ("First Admission"), which is expected to occur on 17 February 2022. Following First Admission, the number of Ordinary Shares in issue and number of voting rights will be 34,557,964. The above figure may be used by shareholders as the denominator for the calculations by which they will determine whether they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

 

Posting of Circular and notice of General Meeting

 

The Company will shortly be posting to Shareholders a circular (the "Circular") containing a notice of the General Meeting, to be held at the Company's offices at Theale Court, 11-13 High Street, Theale, RG7 5AH at 11:00 a.m. on 7 March 2022. A copy of the Circular will be available from the Company's website, www.osirium.com.

 

Expected timetable

 

 

2022

Posting of the Circular and the Form of Proxy

 

14 February

Admission and commencement of dealings in the First Placing Shares

 

08:00 a.m. on 17 February

Latest time and date for receipt of completed Forms of Proxy or electronic proxy appointment for use at the General Meeting

 

11.00 a.m. on 3 March

General Meeting

 

11.00 a.m. on 7 March

Announcement of the results of the General Meeting

 

Before 2.00 p.m. on 7 March

Admission and commencement of dealings in the Second Placing Shares and the Subscription Shares

 

08:00 a.m. on 10 March

 

Words and expressions defined in the Circular have the same meanings where used herein.

 

- Ends -

 

 

Contacts:

 

 

 

Osirium Technologies plc

Tel: +44 (0)1183 242 444

David Guyatt, CEO

 

Rupert Hutton, CFO

 

 

 

Allenby Capital Limited (Nominated adviser and broker)

Tel: +44 (0)20 3328 5656

James Reeve / George Payne (Corporate Finance)

 

Tony Quirke (Sales and Corporate Broking)

 

 

 

Alma PR (Financial PR adviser)

Tel: +44 (0)20 3405 0205

Hilary Buchanan

osirium@almapr.co.uk

Kieran Breheny

 

Josh Royston

 

 

 

About Osirium Technologies Plc

 

Osirium Technologies plc (AIM: OSI) is a leading UK-based cybersecurity software vendor delivering Privileged Access Management (PAM), Privileged Endpoint Management (PEM) and Osirium Automation solutions that are uniquely simple to deploy and maintain. 

 

With privileged credentials involved in over 80% of security breaches, customers rely on Osirium PAM's innovative technology to secure their critical infrastructure by controlling 3rd party access, protecting against insider threats, and demonstrating rigorous compliance. Osirium Automation delivers time and cost savings by automating complex, multi-system processes securely, allowing them to be delegated to Help Desk engineers or end-users and to free up specialist IT resources. The Osirium PEM solution balances security and productivity by removing risky local administrator rights from users, while at the same time allowing escalated privileges for specific applications.

 

Founded in 2008 and with its headquarters in Reading, UK, the Company's shares were admitted to trading on AIM in April 2016. For further information please visit www.osirium.com.

 

Notice to Distributors

 

Solely for the purposes of the temporary product intervention rules made under sections S137D and 138M of the Financial Services and Markets Act 2000 and the FCA Product Intervention and Product Governance Sourcebook (together, the "Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, as defined under the FCA Conduct of Business Sourcebook COBS 3 Client categorisation, and are eligible for distribution through all distribution channels as are permitted by the FCA Product Intervention and Product Governance Sourcebook (the "Target Market Assessment").

 

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Allenby Capital Limited 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 the FCA Conduct of Business Sourcebook COBS 9A and 10A respectively; 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 Placing Shares.

 

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

 

 

Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them.

 

1

Details of the person discharging managerial responsibilities / person closely associated

a)

Name

PDMRs:

Simon Lee

Chairman

David Guyett

CEO

Rupert Hutton

CFO

Steve Purdham

NED

 

2

Reason for the notification

a)

Position/status

See 1a) above

b)

 

Initial notification /Amendment

Initial notification

3

 

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name

Osirium Technologies plc

b)

LEI

213800CTPGYQ4POIC338

4

 

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

 

Description of the financial instrument, type of instrument

Identification code

Ordinary Shares of nominal value 1 pence each


GB00BZ58DH10

b)

Nature of the transaction

Subscription for new ordinary shares

 

c)

Price(s) and volume(s)

Price: 6 pence

 

Volumes:

 

Simon Lee

500,000

David Guyett

3,333,333

Rupert Hutton

116,667

Steve Purdham

83,333

 

   

d)

Aggregated information

- Aggregated volume

- Price

N/A

 

e)

Date of the transaction

10 February 2022 to be completed 10 March 2022

f)

Place of the transaction

Outside a trading venue

 

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