It is intended that the price at which the new ordinary shares are to be issued (the "Placing Price") will be 35 pence per new ordinary share (the "Placing Price"). It is intended that the new ordinary shares to be issued in connection with the Placing (the "Placing Shares") will be issued on a non-pre-emptive basis, within the Company's existing share allotment authorities.
The Placing will be conducted by way of an accelerated bookbuild ("Bookbuild"), which will be launched immediately following this announcement, led by Allenby Capital Limited ("Allenby Capital") with Optiva Securities Limited ("Optiva Securities") acting as joint bookrunners (collectively the "Bookrunners") in relation to the Bookbuild. The number of Placing Shares and the aggregate proceeds to be raised through the Placing will be finally determined following completion of the Bookbuild process. The Placing is conditional on the Company raising gross proceeds of at least £1 million. A further announcement in respect of these details will be made following completion of the Bookbuild process. The timing of the closing of the book and allocations are at the discretion of the Bookrunners, after discussion with the Company. Additional information on the Placing is included further below.
Background to the Placing
Tekcapital was originally established with the objective to develop a systematic and scalable approach to assist companies in acquiring and commercialising university and research institution generated intellectual property. Since its establishment, Tekcapital has become a business of four main complimentary components.
At present, the Company's primary activities involve:
· the identification and acquisition of scientifically screened and immediately available IP through the Company's Invention Discovery Network;
· undertaking objective analysis of the market potential of new intellectual property, through its Science Advisory Board;
· providing placement services to strengthen in-house, technology transfer teams and access to niche industry contacts to determine market potential and identify out-licensing candidates, through Invention Evaluator; and
· using Vortechs Group to recruit executives to commercialise intellectual property and identify sale opportunities for intellectual property which Tekcapital owns.
The Group's client base currently includes many well-known 'blue chip' clients and a number of universities and research institutes.
Tekcapital has in-licensed or acquired 53 intellectual property to date, which includes the acquisition of the exclusive license to a new salt reduction technology for topical applications, µSaltTM. On 4 January 2017, the Company announced that µSaltTM had completed a successful test-production and independent taste testing. Out-license negotiations in respect of this technology are currently ongoing with several leading companies.
The Company holds the exclusive license to the Crackle-baked® process, which enables baked foods to have similar attributes, in terms of taste and texture, to those of fried foods but with approximately 60 per cent. less fat content in the finished product. This technology was originally developed by the University of Arkansas. Out-license negotiations in respect of this technology are currently ongoing with several leading companies.
The Company has the exclusive license to a portfolio of 13 optics patents enabling head mounted displays and virtual reality, licensed from the University of Central Florida. Out-license negotiations in respect of this technology are currently taking place.
Tekcapital has the licensing rights to two technologies to enable the commercialisation of energy harvesting from human movement to power mobile technologies from the University of Michigan and Georgia Institute of Technology. The Company is developing a prototype to demonstrate that this technology can effectively generate battery power from human movement.
The Company has also expanded into the medical device market with the establishment, launch and funding of Belluscura Ltd ("Belluscura"), which provides premium proprietary medical devices at affordable prices, to address part of the global unmet need for inexpensive, superior medical devices. Since establishment, Belluscura has acquired 19 intellectual properties covering four developed and approved medical devices from Stryker Corporation Inc. Belluscura has raised a total of $2,175,000 in June 2016 and October 2016 respectively. The Company is currently exploring an IPO of Belluscura in 2017. If this IPO proceeds, then the Directors believe that this should represent a value inflexion point for Tekcapital's shareholders. Tekcapital owns approximately 65% of the share capital of Belluscura.
The Board believes that the Company would benefit from additional finance to enable it to accelerate its growth strategy. The Placing is expected to allow the Company to continue to fund acquisitions of additional new potentially disruptive university intellectual properties, and complete further out-licenses of intellectual properties that are already under exclusive license to Tekcapital, several of which are currently in negotiation. The Board believes that this strategy, coupled with the future growth of sustainable income streams from corporate services, out-licenses, and the potential IPO of Belluscura, should facilitate the creation of material shareholder value over the longer term.
Use of Proceeds
The Company intends that the net proceeds of the Placing will be predominantly used to:
· launch IP-related software applications;
· expand the Company's sales programme in Latin America;
· acquire and market new intellectual properties; and
· for general working capital purposes.
Further details regarding the Placing
The Placing Shares will not be offered generally to the Company's existing shareholders on a pre-emptive basis. Participation in the Placing will be limited to certain qualifying institutional investors who are invited, and who choose, to participate. Certain of the Company's existing significant shareholders have indicated their intention to participate in the Placing. The Placing Shares are not being made available to the public and are not being offered or sold in, into or from the United States of America, Canada, the Republic of South Africa, Australia, Japan or any other jurisdiction where it would be unlawful to do so.
The Company anticipates that the entirety of the Placing will be raised within the Company's existing share allotment authorities. A further announcement in respect of the total number of Placing Shares to be issued, the aggregate proceeds to be raised through the Placing and the timing of the admission of the Placing Shares to trading on AIM will be made in due course, as soon as is practicable, once these details have been finally determined. The Placing is not being underwritten.
Following admission to trading on AIM, the Placing Shares will be issued credited as fully paid and will rank pari passu with the Company's existing ordinary shares, including the right to receive all dividends and other distributions declared, made or paid on or in respect of such shares after the date of issue.
Advance assurance has been applied for and received from HMRC that the Company's business qualifies for enterprise investment scheme (EIS) relief and is a qualifying business for venture capital trust (VCT) relief. Although qualifying investors should obtain tax relief on their investments under EIS relief or VCT relief, neither the Company nor the Directors can provide any warranty or guarantee in this regard. Investors must seek independent advice on which they are able to rely.
Neither the Company nor the Directors give any warranties or undertakings in this document that EIS relief or VCT relief, if granted, will not be withdrawn. Investors must take their own advice and rely on it. If the Company carries on activities beyond those disclosed to HMRC, then Shareholders may cease to qualify for the tax benefits.
Market Abuse Regulation
The Market Abuse Regulation ("MAR") became effective from 3 July 2016. Market soundings, as defined in MAR, were taken in respect of the Placing, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
This announcement does not constitute, or form part of, a prospectus relating to the Company, nor does it constitute or contain any invitation or offer to any person, or any public offer, to subscribe for, purchase or otherwise acquire any shares in the Company or advise persons to do so in any jurisdiction, nor shall it, or any part of it form the basis of or be relied on in connection with any contract or as an inducement to enter into any contract or commitment with the Company.
The content of this announcement has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 ("FSMA").
This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States. This announcement is not for release, publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, the Republic of South Africa, Japan or any jurisdiction where to do so might constitute a violation of local securities laws or regulations (a "Prohibited Jurisdiction"). This announcement and the information contained herein are not for release, publication or distribution, directly or indirectly, to persons in a Prohibited Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction. This announcement has been issued by and is the sole responsibility of the Company.
Allenby Capital Limited is acting solely as nominated adviser and joint-broker exclusively for the Company and no one else in connection with the contents of this announcement and will not regard any other person (whether or not a recipient of this announcement) as its client in relation to the contents of this announcement nor will it be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the contents of this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on Allenby Capital Limited by FSMA or the regulatory regime established thereunder, Allenby Capital Limited accepts no responsibility whatsoever, and makes no representation or warranty, express or implied, for the contents of this announcement including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on behalf of it, the Company or any other person, in connection with the Company and the contents of this announcement, whether as to the past or the future. Allenby Capital Limited accordingly disclaims all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of the contents of this announcement or any such statement.
Optiva Securities Limited is acting solely as joint-broker exclusively for the Company and no one else in connection with the contents of this announcement and will not regard any other person (whether or not a recipient of this announcement) as its client in relation to the contents of this announcement nor will it be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the contents of this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on Optiva Securities Limited by FSMA or the regulatory regime established thereunder, Optiva Securities Limited accepts no responsibility whatsoever, and makes no representation or warranty, express or implied, for the contents of this announcement including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on behalf of it, the Company or any other person, in connection with the Company and the contents of this announcement, whether as to the past or the future. Optiva Securities Limited accordingly disclaims all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of the contents of this announcement or any such statement.
FORWARD LOOKING STATEMENTS
This announcement includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding the Company's business strategy, plans and objectives of management for future operations, or any statements proceeded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or similar expressions or negatives thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based, unless required to do so by applicable law or the AIM Rules.