TIDMNNN
RNS Number : 2974X
Nanosynth Group PLC
26 August 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL)
ACT 2018, AS AMED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO
BE IN THE PUBLIC DOMAIN. IN ADDITION, MARKET SOUNDINGS WERE TAKEN
IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE
RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE
INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH
PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE
INFORMATION.
26 August 2022
nanosynth group plc
("nanosynth", the "Company" or the "Group")
Lanstead Subscription and Sharing Agreement
nanosynth, the AIM quoted company specialising in the synthesis
and application of nanoparticles to create new and improve existing
products, is pleased to announce a conditional subscription to
raise GBP2,942,500 (the "Subscription") through the issue of
535,000,000 new ordinary shares of 0.01 pence each in the Company
("Ordinary Shares") at a price of 0.55 pence per Ordinary Share
(the "Issue Price") to institutional investor Lanstead Capital
Investors L.P. ("Lanstead"), together with a related sharing
agreement ("Sharing Agreement") pursuant to which the Company
pledges the gross proceeds of the Lanstead Subscription.
Highlights
-- Subscription for 535,000,000 new Ordinary Shares (the
"Lanstead Subscription Shares") by Lanstead at an Issue Price of
0.55 pence to raise GBP2,942,500 (the "Lanstead Subscription")
-- The Issue Price of 0.55 pence represents a 20.9 per cent.
premium to the closing mid-market price (of 0.455 pence) of the
Ordinary Shares on 25 August 2022, the latest business date prior
to the announcement of the Subscription
-- The GBP2,942,500 gross proceeds of the Lanstead Subscription
will be pledged to Lanstead by the Company pursuant to a Sharing
Agreement with Lanstead. The Sharing Agreement, details of which
are set out below, entitles the Company to receive back those
proceeds on a pro rata monthly basis over a period of 24 months,
subject to adjustment upwards or downwards each month depending on
the Company's share price at the time relative to the Benchmark
Price of 0.7333 pence per share . The monthly settlement amounts
for the Sharing Agreement are structured to commence approximately
one month (or earlier by agreement with Lanstead) following
Admission
-- The Sharing Agreement provides the opportunity for the
Company to benefit from positive future share price performance; an
underlying reason for undertaking the fund raise in this way
-- The proceeds of the Sharing Agreement, will be used primarily
to fund its working capital requirements as the Company looks to
commercialise its bespoke nanoparticle technology
Mark Duffin, Chief Executive of nanosynth, commented: "We are
delighted to have entered into these funding arrangements with
Lanstead at a particularly exciting time in the development of our
business. The business is continuing to see significant levels of
interest across the seven new verticals in which the Company is
focusing its efforts and it will update the market on further
developments in due course."
Introduction
Lanstead has conditionally agreed to subscribe for the Lanstead
Subscription Shares at the issue price of 0.55 pence for gross
proceeds of GBP2,942,500. The Subscription proceeds will be pledged
to Lanstead under the Sharing Agreement pursuant to which the
Company is entitled to receive back those proceeds on a pro rata
monthly basis over a period of 24 months, subject to adjustment
upwards or downwards each month depending on the Company's share
price at the time.
A significant factor in nanosynth's decision to enter into the
Subscription is that the Sharing Agreement provides the opportunity
for the Company to benefit from positive future share price
performance. There is no upper limit placed on the additional
proceeds which could be received by the Company as part of the
monthly settlements and the amount available in subsequent months
is not affected. Whilst the Company notes the corresponding risk
that a fall in nanosynth's share price could reduce the amount of
proceeds received, as explained below, the Directors expect the
Company's strategy to make considerable positive advancements over
the 24-month term of the Sharing Agreement. If these advancements
are successful, and if the success of these advancements is
reflected in nanosynth's share price, the Company expects the
proceeds to be received from Lanstead to exceed the amount pledged
under the Sharing Agreement.
Further information on the Lanstead Subscription
Pursuant to the subscription agreement between the Company and
Lanstead (the "Lanstead Subscription Agreement"), 535,000,000 new
Ordinary Shares have today been allotted and will be issued,
conditional upon Admission, to Lanstead at 0.55 pence per Lanstead
Subscription Share for an aggregate subscription value of
GBP2,942,500.
The Lanstead Subscription proceeds of GBP2,942,500 will
immediately following Admission be pledged to Lanstead under the
Sharing Agreement under which Lanstead will then make, subject to
the terms and conditions of that Sharing Agreement, monthly
settlements (subject to adjustment upwards or downwards) to the
Company over 24 months, as detailed below. As a result of entering
into the Sharing Agreement, the aggregate amount received by the
Company under the Lanstead Subscription and the Sharing Agreement
may be more or less than GBP2,942,500, as further explained below.
Notwithstanding the Subscription Price of 0.55 pence, shareholders
should note that the share price of the Company needs to be on
average over the 24 months of the Sharing Agreement at or above the
Benchmark Price of 0.7333 pence per share for the Company to
receive at least, or more than, the gross Subscription of
GBP2,942,500.
The Lanstead Subscription Shares will be issued credited as
fully paid and will rank pari passu in all respects with the
Company's existing issued Ordinary Shares. The Lanstead
Subscription is conditional, inter alia, on admission of the
Lanstead Subscription Shares to trading on AIM, and there being:
(i) no breach of certain customary warranties given by the Company
to Lanstead at any time prior to Admission (which is expected on or
around 01 September 2022); and (ii) no force majeure event
occurring prior to Admission.
The Sharing Agreement
In addition to the Lanstead Subscription, the Company has
entered into the Sharing Agreement, pursuant to which nanosynth
will pledge the GBP2,942,500 gross proceeds of the Lanstead
Subscription to Lanstead. The Sharing Agreement will enable the
Company to share in any share price appreciation over the Benchmark
Price (as defined below). However, if the Company's 20 day Volume
Weighted Average Share Price is less than the Benchmark Price then
the amount received by the Company under the Sharing Agreement will
be less than the gross proceeds of the Lanstead Subscription which
were pledged by the Company to Lanstead at the outset.
The Sharing Agreement provides that the Company will receive 24
monthly settlement amounts as measured against a benchmark share
price of 0.7333 pence per Ordinary Share (the "Benchmark Price").
The monthly settlement amounts for the Sharing Agreement are
structured to commence approximately one month (or earlier by
agreement with Lanstead) following Admission.
If the measured share price (the"Measured Price"), calculated as
the average of each day's volume weighted share price ("VWAP") of
the Company's Ordinary Shares over a 20-day period prior to the
monthly settlement date, exceeds the Benchmark Price, the Company
will receive more than 100 per cent. of that monthly settlement due
on a pro rata basis according to the excess of the Measured Price
over the Benchmark Price. There is no upper limit placed on the
additional proceeds receivable by the Company as part of the
monthly settlements and the amount available in subsequent months
is not affected. Should the Measured Price be below the Benchmark
Price, the Company will receive less than 100 per cent. of the
monthly settlement calculated on a pro rata basis and the Company
will not be entitled to receive the shortfall at any later date. As
such, the final determination of the total amounts to be received
under the Sharing Agreement will only be known after the 24 months
have elapsed.
For example, if on a monthly settlement date the calculated
Measured Price exceeds the Benchmark Price by 10 per cent., the
settlement on that monthly settlement date will be 110 per cent. of
the amount due from Lanstead on that date. If on the monthly
settlement date the calculated Measured Price is below the
Benchmark Price by 10 per cent., the settlement on the monthly
settlement date will be 90 per cent. of the amount due on that
date. Each settlement as so calculated will be in final settlement
of Lanstead's obligation on that settlement date.
Assuming the Measured Price equals the Benchmark Price on the
date of each and every monthly settlement, nanosynth would receive
24 monthly settlement amounts (23 monthly amounts of GBP122,604.17
and the final month of GBP122,604.09) totalling in aggregate
proceeds of GBP2,942,500 (before expenses) from the Lanstead
Subscription and Sharing Agreement. Examples of the proceeds from
the Sharing Agreement to be received each month, based upon varying
levels of average share price in the month, are shown in the
Appendix to this announcement.
The Company will pay Lanstead's legal costs of up to GBP20,000
incurred in connection with the Lanstead Subscription and in
entering into the Sharing Agreement and, in addition, has agreed to
issue to Lanstead 37,450,000 new Ordinary Shares ("Value Payment
Shares") in connection with entering into the Sharing
Agreement.
In no event will fluctuations in the Company's share price
result in any increase in the number of Lanstead Subscription
Shares issued by the Company or received by Lanstead. The Sharing
Agreement allows both Lanstead and the Company to benefit from
future share price appreciation.
In total, Lanstead will be issued with 535,000,000 new Ordinary
Shares pursuant to the Lanstead Subscription which, when issued,
will equate (together with the 37,450,000 Value Payment Shares) to
approximately 21.59 per cent. of the Company's enlarged issued
share capital following Admission.
No shares, warrants or additional fees are owed to Lanstead at
any point during this agreement other than those disclosed
above.
The Directors believe that the Sharing Agreement potentially
provides a number of benefits to the Company and its shareholders
including: the certainty of additional investment, albeit the
amount of proceeds to be received under the agreements is wholly
dependent on the Company's share price each month over the term of
the Sharing Agreement; the opportunity to benefit from positive
future share price performance; and that the amount of shares
issued is fixed, together with the cost of their issue.
Authority to allot shares
The allotment of the Lanstead Subscription Shares, and the Value
Payment Shares is being made pursuant to existing authorities to
allot shares and other relevant securities and to disapply
pre-emption rights under section 551 of the Companies Act 2006,
which the Directors were given at the Company's Annual General
Meeting held on 26 July 2022.
Admission and Total Voting Rights
Application will be made for the Lanstead Subscription Shares
and the Value Payment Shares to be admitted to trading on the AIM
market of the London Stock Exchange ("Admission"). It is
anticipated that Admission to AIM will occur at 8.00 am, on or
around 01 September 2022.
Following Admission the Company will have 2,651,521,986 Ordinary
Shares in issue. The figure of 2,651,521,986 may be used by the
Company's shareholders as the denominator for the calculations by
which they will determine if 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.
About Lanstead
Lanstead is a global investment firm that provides funding for
ongoing business objectives to listed small and mid-cap growth
companies. In London, Lanstead focus on equity investments in
companies already listed or quoted on the London Stock Exchange or
European exchanges and on management teams with a clear growth
strategy.
Lanstead's extensive experience allows it to invest in most
industries, focusing on providing supportive, longer term capital
that rewards company growth. Companies with Lanstead on the
shareholder register via an equity placement to Lanstead with an
accompanying sharing agreement can benefit from a unique and
flexible approach to finance growth. This provides the opportunity
for companies to benefit from additional cash beyond the original
placing proceeds without having to issue additional shares.
Further information is available at www.Lanstead.com
Appendix - example returns from the Lanstead Sharing
Agreement
In relation to each of the months in the 24 month calculation
period:
Average 20 Day VWAP 0.55p 0.73p 0.92p
Benchmark Price 0.7333p 0.7333p 0.7333p
------------- ------------- -------------
20 day VWAP as %
of Benchmark Price 75% 100% 125%
------------- ------------- -------------
Settlement from Lanstead GBP91,954 GBP122,606 GBP153,257
in the month
------------- ------------- -------------
Proceeds over 24 GBP2,206,908 GBP2,942,500 GBP3,678,180
month period if Average
20 Day VWAP is at
this level for the
entire period
------------- ------------- -------------
ENQUIRIES :
nanosynth group plc via IFC Advisory
Mark Duffin (Chief Executive Officer)
SP Angel Corporate Finance LLP +44 20 3470 0470
Nominated Adviser and Broker
Stuart Gledhill
Caroline Rowe
IFC Advisory Ltd +44 20 3934 6630
Graham Herring
Tim Metcalfe
Zach Cohen
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END
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