TIDMODX
RNS Number : 5377K
Omega Diagnostics Group PLC
06 May 2022
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014. Upon the publication
of this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
OMEGA DIAGNOSTICS GROUP PLC
("Omega" or the "Company" or the "Group")
Placing of 50,000,000 New Ordinary Shares and Warrants
Subscription of 2,125,000 New Ordinary Shares
Open Offer of up to 49,860,515 New Ordinary Shares
and
Notice of General Meeting
Omega (AIM: ODX), the specialist medical diagnostics company
focused on industry-leading Health & Nutrition and Global
Health products, announces that it has raised gross proceeds of
GBP2.0 million via a Placing of 50,000,000 new ordinary shares of
4.0 pence each ("New Ordinary Shares") and 90,000,000 warrants to
subscribe for Ordinary shares (the "Warrants") to institutional
investors at an issue price of 4.0 pence per New Ordinary Share
(the "Issue Price").
Furthermore, the Company also announces a conditional raise of
up to an additional GBP2.0 million by the issue of up to 49,860,515
New Ordinary Shares pursuant to an Open Offer to Qualifying
Shareholders at the Issue Price ("Open Offer"), and a subscription
by Directors for an additional 2,125,000 New Ordinary Shares (the
"Subscription", together with the Placing and Open Offer the
"Fundraising"). Subscribers to the Placing have also been issued
Warrants to subscribe for one additional Ordinary Share at the
Issue Price in the ratio of nine Warrants for every five Placing
Shares issued to those subscribers. The Issue Price is the same as
the closing mid-market price of 4.0 pence on 5 May 2022, being the
latest practicable date prior to this announcement.
The net proceeds of the Fundraising, amounting to between
GBP1.75 million and GBP7.25 million, depending on the take up of
the Open Offer and the number of Warrants exercised, will be used
to initially fund the CD4 business to divestment and provide
additional working capital.
Summary:
-- Placing of 50,000,000 New Ordinary Shares ("Placing Shares"),
at the Issue Price and 90,000,000 Warrants to raise gross proceeds
of approximately GBP2.0 million.
-- The Placing Shares and Warrants have been placed by finnCap
Ltd with institutional investors (the "Placees"). The Placing was
undertaken by means of a non pre-emptive cashbox placing.
-- Open Offer of up to 49,860,515 New Ordinary Shares ("Open
Offer Shares") for Qualifying Shareholders on the basis of three
New Ordinary Shares for every fourteen Existing Ordinary Shares
held (with excess application facility) to raise up to GBP2.0
million.
-- The New Ordinary Shares issued under the Fundraising will
represent approximately 55.83 per cent of the Company's existing
issued share capital (assuming full take-up of the Open Offer).
-- Application has been made to the London Stock Exchange for
the Placing Shares to be admitted to trading on AIM. It is expected
that Admission will become effective and that dealings in the
Placing Shares will commence on 9 May 2022.
-- Subject to passing of the Resolutions at the General Meeting,
application will be made to the London Stock Exchange for the
Subscription Shares and Open Offer Shares to be admitted to trading
on AIM. It is expected that Admission will become effective and
that dealings in the Subscription Shares and Open Offer Shares will
commence on 8 June 2022.
-- In respect of the Warrants, application has been made to the
London Stock Exchange for a block admission of 90,000,000 new
Ordinary Shares to be admitted to trading on AIM ("Block
Admission"). It is expected that the Block Admission will become
effective on 11 May 2022. These New Ordinary Shares may be issued
and allotted from time to time pursuant to the exercise of the
Warrants. The new Ordinary Shares issued pursuant to the exercise
of the Warrants, when issued, will rank pari passu with the
existing Ordinary Shares of the Company.
-- Further details of the Placing, Open Offer and Subscription are set out below.
A Circular to Shareholders in respect of the Open Offer is
expected to be posted on 13 May 2022 giving notice of the General
Meeting to be held on 6 June 2022 at 11:00 a.m. at the offices of
Shepherd & Wedderburn, 1 Exchange Crescent, Conference Square,
Edinburgh, EH3 8UL. A copy of the Circular will be available on the
Company's website:
http://www.omegadiagnostics.com/Investor-Relations/Corporate-Information
Jag Grewal, CEO of Omega, commented:
"Following the outcome of the General Meeting in March, the
Board reflected on the ongoing strategy and explored alternative
options to fund future growth. In this process we concluded that
the best opportunity to deliver shareholder value lies with a clear
focus on our Health & Nutrition division, where we believe we
have substantial opportunities in both China and the US. We have
already confirmed that ongoing COVID income is expected to be
minimal and, having considered strategic options for CD4 and the
funding available to realise that opportunity, we have made the
decision to divest the CD4 business and have begun the process of
seeking an acquirer for it.
"As set out in last month's trading update, our Health &
Nutrition division contributed to the strong growth seen in the
previous financial year. We are very excited about the future
prospects that we have in this area and delighted to have secured
fresh investment from new shareholders to allow us to deliver on
our new focussed growth strategy, enabling the Company to deliver
personalised nutrition to the global market."
Contacts:
Omega Diagnostics Group PLC www.omegadx.com
Jag Grewal, Chief Executive Officer via Walbrook PR
Chris Lea, Chief Financial Officer
finnCap Ltd Tel: 020 7220 0500
Geoff Nash/Edward Whiley/George Dollemore (Corporate
Finance)
Alice Lane/ Harriet Ward (ECM)
Walbrook PR Limited Tel: 020 7933 8780 or omega@walbrookpr.com
Paul McManus Mob: 07980 541 893
Lianne Applegarth Mob: 07584 391 303
Sam Allen Mob: 07502 558 258
About Omega Diagnostics Group PLC
Omega manufactures and distributes high quality in-vitro
diagnostic products for use in hospitals, clinics, laboratories and
healthcare practitioners in over 70 countries and specialise in the
areas of health and nutrition and global health.
www.omegadx.com
1. Introduction
The Company today announces that it has raised GBP2.0 million
(before expenses) by means of the Placing of 50,000,000 Ordinary
Shares at 4.0 pence per share and that it intends to make an Open
Offer of a further 49,860,515 Ordinary Shares to give Qualifying
Shareholders the opportunity to invest (up to GBP2.0 million) in
the Company at the same Issue Price. Subscribers to the Placing
have also been issued with Warrants to subscribe for one additional
Ordinary Share at the Issue Price in the ratio of nine Warrants for
every five Placing Shares issued to those subscribers.
Following Shareholders voting against the resolutions required
to proceed with the proposals announced on 11 February 2022 to
raise growth capital of up to GBP7.0 million, the Board reassessed
the Company's strategy, including reflecting on alternative options
for funding. During this time the price of Ordinary Shares has
gradually declined due to continued uncertainty and a lack of
capital required to move the business forward. Accordingly, the
closing mid-market price was 4.0 pence on 5 May 2022, being the
last practicable date prior to this announcement. As the nominal
value of 4.0 pence for each Ordinary Share establishes the minimum
issue price for new Ordinary Shares, the options for the Company
were extremely limited. As a result, the Board determined that the
Fundraising could only proceed through the issue of the Warrants to
the small number of new investors in the Placing. If all 90,000,000
Warrants issued under the Placing are exercised during the Warrant
Exercise Period, the Company will receive gross proceeds of a
further GBP3.6 million.
Given the Company has now exited the Alva site and further
reduced its cost base, the proceeds of the Placing will be used as
detailed below. The Issue Price is the same as the closing
mid-market price of 4.0 pence on 5 May 2022, being the last
practicable date prior to the announcement of the Placing.
The Placing is conditional only on admission of the Placing
Shares to trading on AIM, expected on 9 May 2022. On 9 May 2022 the
Warrants will also be issued to subscribers under the Placing at
the 9:5 ratio described above. The Open Offer is however
conditional on, amongst other things, the passing of the
Resolutions at the General Meeting and Admission taking place. It
is expected that, subject to passing the Resolutions, the Open
Offer Shares will be admitted to trading on AIM on 8 June 2022.
The net proceeds of the Fundraising, amounting to between
GBP1.75 million and GBP7.25 million, depending on the take up of
the Open Offer and the number of Warrants exercised, will be used
to initially fund the CD4 business to divestment and provide
additional working capital. Should the Warrants be exercised, this
will allow the planned investment in Health and Nutrition to be
accelerated.
The Company will publish a Circular to Shareholders to explain
the background to and reasons for the Fundraising, to explain why
the Board considers the Fundraising to be in the best interests of
the Company and its Shareholders, and why the Directors unanimously
recommend that you vote in favour of the Resolution to be proposed
at the General Meeting, as they intend to do in respect of the
760,746 Ordinary Shares held, directly or indirectly, by them
representing approximately 0.33 per cent. of the total voting
rights of the Company.
2. Background to and Reasons for the Fundraising
As detailed in the trading update issued on 7 April 2022, the
Company reported a 41% increase in revenues to GBP12.3 million for
the year ended 31 March 2022 (2021: GBP8.7 million), with the
Health and Nutrition ("H&N") division contributing GBP8.6
million of revenue (2021: GBP6.8 million). Prior year H&N
division sales are skewed by a large stocking order worth
approximately GBP1.2 million placed by the Company's largest
partner in China to seed the market in 2021. Excluding this
stocking order from last year, underlying H&N sales grew by
54%, driven by strong Food Print(R) product sales, up 82%. This
division remains the key area of strategic focus, and one where the
Directors believe there to be substantial growth opportunities in
both China and the US.
The Global Health division also saw substantial growth in the
period, up 97% to GBP3.8 million (2020: GBP1.9 million). CD4
revenues increased to GBP1.0 million (2021: GBP0.1 million), as
further progress is made to implement CD4 testing in high HIV
prevalence countries and demand from aid agencies and
non-governmental organisations continues to grow. Order intake is
running well ahead of available production and the long-term
prospects remain undiminished for the roll-out of the VISITECT(R)
CD4 Advanced Disease test. Following on from the placing, which
shareholders voted against at the general meeting held on 7 March
2022, the Company has evaluated the strategic options for its CD4
business. The conclusion of this strategic review is that the
Company intends to divest of this business unit and to focus solely
on its fast-growing Health & Nutrition business unit
contributing the majority of revenues.
The Company has appointed advisors to manage the sale of the CD4
business and has already received strong expressions of interest
from a number of potential acquirers. Following the divestment of
the Alva site in March, the cash costs of operating the CD4
business under the Transitional Services Agreement ("TSA") with
Accubio Limited are significantly reduced, however the cash funding
requirement remains approximately GBP300,000 per month. Whilst the
Board are prepared to continue to fund the CD4 business in the
short term, the TSA requires the whole Alva site to be returned to
Accubio by 31 December 2022 at the latest. When sufficient time is
allowed for an acquirer to complete the technical transfer of the
product into a new facility, this implies that a sale should be
closed in early summer.
COVID-19 related revenues contributed GBP2.6 million last year
(2020: GBP1.7 million); however the Company no longer intends to
support COVID-related products. The Company remains in dispute with
the Department of Health and Social Care (DHSC) and has still to
receive a response to the Company's latest correspondence sent on 8
February 2022. At the Company's request, the DHSC is making
arrangements to remove the government-funded equipment from its
former Alva site.
The Board will now focus Omega's efforts solely and
strategically on its core Health & Nutrition business,
maintaining its leadership position and targeting significant
organic growth through embracing digital technologies and related
marketing activities. The Company's growth strategy in this segment
will also focus on geographic expansion in the USA, a
health-conscious and mature personal health and well-being market,
as well as expansion of the Company's current menu of tests
available to healthcare professionals, with the introduction of
complementary tests, allowing customers to more comprehensively
manage their patients and thus enabling the Company's vision of
delivering personalised nutrition for better health.
US Growth Opportunity
The US Food Sensitivity testing market is estimated to be the
largest and most established market in the world. It is the leading
market for functional medicine laboratory testing with an
increasing demand for personalised medicine.
The Board believes the best route to market would be to
replicate the Company's CNS Laboratory service direct to health
care professionals and ultimately direct to consumer. Omega
differentiates itself from established players by taking the
Group's tried and tested market leading approach with education and
support, coupled with its digital strategy, to engage and empower
patients and healthcare professionals.
The total US market size is estimated by the Directors to be
$50-$100 million and the Board believes that US revenues could
potentially be between GBP3 million and GBP6 million over the next
three to five years.
Product Menu Expansion
Microbiome
The Group's intention is to build a wider menu of complementary
gut health tests and to sell these through its well-established
channels from a market leading position.
Understanding the microbiome is the new frontier of
understanding chronic inflammatory conditions arising from poor gut
health. Over recent years the gut microbiome in particular has been
linked to a plethora of diseases and conditions, from diabetes and
anxiety to obesity. The Group has recently seen a growing demand
from its existing customer base in this segment.
Nutrigenomics
Defined as the relationship between nutrients, diet, and gene
expression, Nutrigenomics allows the healthcare professional to
understand genetic strengths and weaknesses making specific
improvements that help achieve better health.
Combining all three provide a compelling value proposition that
will offer true personalised nutritional assessment. The Board
believes that menu expansion has the potential to generate material
revenue growth over the medium term. The Directors believe that
menu expansion from microbiome and nutrigenomics combined has the
potential to increase revenues by GBP2 million to GBP5 million p.a.
over the next five years.
Operational efficiency
The Group is well underway with its planned relocation to the
new facility in Ely, Cambridgeshire, with access to the new site
expected in the next few months. This represents a small delay from
the anticipated timing of late Q1. The Group is currently in
discussion with the developer, Riverside Capital, as to how a
number of critical outstanding construction issues are to be
completed prior to the lease being signed. The anticipated cost of
such construction work is GBP0.5 million, which Riverside Capital
is expected to fund. The Group is also seeking to recover
liquidated damages in excess of GBP0.3 million from the developer
arising from the late delivery of the building. The new facility is
a 35,000 ft(2) state-of-the-art manufacturing space and will
accommodate the Group's future expansion plans. In addition, the
new site will be temperature and humidity controlled to facilitate
key manufacturing processes and will be compliant to ISO 13485 and
ISO 9001.
The Company intends to use the net proceeds of the Placing as
follows:
Estimate Use of Proceeds GBPm
Funding the CD4 business to divestment 1.2
-----------
Working Capital/costs 0.8
-----------
Total GBP2.0*
-----------
*Excludes the proceeds derived from the Open Offer to Qualifying
Shareholders. To the extent that the Open Offer generates
additional funds, the working capital element will be increased.
This also excludes any proceeds received from the exercise of the
Warrants, which if exercised in full, would generate gross proceeds
of GBP3.6 million.
The net cash balance at 5 May 2022 was GBP1.4 million and whilst
an overdraft facility of GBP2.0 million remains in place and
unutilised, the facility is subject to renewal in June 2022. At
this time, there is no certainty that the overdraft will be renewed
or that it will be renewed at the same level.
Assuming the Resolution is passed at the General Meeting and the
Open Offer proceeds then, subject to the level of take up of the
Open Offer, the Board anticipates that additional net funds raised
through the Open Offer will be used for working capital and to
accelerate investment in the Health & Nutrition business.
Proceeds from the sale of the CD4 business and/or the exercise of
Warrants will be used to accelerate investment in H&N product
range and US expansion as detailed above.
3. Group Segments
3.1. Health and Nutrition
The Group offers products to test for food sensitivity, a
condition when there is a non-immediate adverse physiological
response to particular foods as distinct to an allergic reaction to
food. The Food Detective(R) product is designed for use by health
practitioners and is believed to be the world's only established
Point-of-Care food specific IgG test. FoodPrint(R) is a microarray
technology used by over 140 laboratories worldwide offering
significant benefits over traditional plate-based ELISA tests. The
Group also provides a laboratory testing service from its UK base
near Cambridge serving health care professionals and the consumer
directly. The division's products have a widespread coverage and
brand reach in over 70 countries.
The H&N division revenues were GBP8.6 million (2021: GBP6.8
million). Prior year H&N sales are skewed by a large stocking
order worth approximately GBP1.2 million placed by the Company's
largest partner in China to seed the market in 2021. Excluding this
stocking order from last year, underlying H&N sales grew by
54%, driven by strong Food Print(R) product sales, up 82%. This
division remains one of the key areas of strategic focus, with
substantial growth opportunities in both China and the US. Growth
during the period was driven by sales in North America, Europe and
the Middle East. Omega's team have worked incredibly hard to
educate consumers and drive awareness of nutritional therapy
through its Health and Nutrition Academy webinars. These webinars
have also focused on naturopathic therapies, functional medicine
and sports nutrition and Omega remains confident that this will
drive demand once markets fully open back up. Comparative sales
from China in the first half of the year are skewed by a large
stocking order placed the previous year with Omega's partner
utilising that inventory in 2021 to seed the market. Sales ramp up
in China is taking a little longer than expected due to local
market conditions and the challenges that face any company looking
to introduce a relatively new concept into the Chinese consumer
market.
During the period, the Health and Nutrition team have begun
marketing in a number of new and significant European territories,
but the focus on future growth outside of China remains with the US
and, as travel opens up with the US, Omega's team have more
opportunities to engage with key partners in this market.
In readiness for a future growth in this division the Company
expects to relocate this division to a new purpose-built facility
in Ely in 2022, which will improve operational efficiencies and
provide the additional capacity required to support this division's
growth expectations.
3.2 Global Health
The Group's VISITECT(R) CD4 products are disposable, lateral
flow Point-of-Care tests for determining CD4 levels in people
living with HIV. Omega believes VISITECT(R) CD4 is the only
instrument-free Point-of-Care established test in the market. Its
strengths include the fact there is no requirement for refrigerated
storage and that, relative to other CD4 tests that require an
accompanying desktop instrument, it is affordable and easy to
use.
CD4
The long-term prospects remain undiminished for the roll-out of
the Company's VISITECT(R) CD4 Advanced Disease test, the first and
the world's only instrument-free Point-of-Care test for monitoring
CD4 levels, essential for the effective management of advanced HIV.
Omega recorded CD4 sales of GBP1.0 million for the year ended 31
March 2022 and is encouraged by the progress being made to
implement CD4 testing in high HIV prevalence countries. At the end
of March 2022 Omega had confirmed orders worth over GBP1.1 million
which are expected to be delivered in the year ending 31 March
2023, and the Company has an encouraging sales pipeline.
Key to the success of this roll-out is the Company's
relationship with agencies such as the Clinton Health Access
Initiative ("CHAI") and Unitaid, as they implement the WHO Advanced
HIV Disease strategy in a number of low and middle-income
countries. Following successful WHO prequalification last year,
Omega is seeing a growing number of implementation partners engage
through CHAI's Early Access Market Vehicle. Omega continues to
receive strong feedback from external clinical studies and
evaluations in key countries and can see positive indications that
long term funders are supporting the roll out of the Advanced
Disease initiative. The Company is now cleared to supply into 21
countries, up from the 15 country approvals announced in its 2021
year end results in July.
The Company has received a number of purchase orders via the
procurement and logistics partners of the US President's Emergency
Plan for AIDS Relief ("PEPFAR"), the world's largest funding
contributor to the global HIV response. The Company's VISITECT(R)
CD4 Advanced Disease test has been included in the PEPFAR 2022
Country and Regional Operational Plan Guidance for all
PEPFAR-supported countries. The Company's test has again been
highlighted as a semi-quantitative lateral flow assay which is able
to differentiate CD4 value above and below 200 cells/mm(3) and
therefore should be used where existing instruments are not
available or are available and without existing or planned service
and maintenance and/or resource support, but not functional.
The Company continues to make progress with Médecins San
Frontier ("MSF") which has a six-country deployment plan for the
introduction of CD4 Advanced Disease in Africa, and it has
commenced product deliveries and is currently supporting
implementation with in-country training of MSF health workers.
The Company also continues to engage with a number of UN
operation agencies to roll out its CD4 test and the ongoing
momentum and progress made in implementation means that it remains
confident in the market potential for its product. The addressable
market is estimated to be in excess of $20 million, with the
potential to generate revenues of GBP6-GBP10 million per annum in
3-5 years' time.
The Company now wishes to focus solely and strategically on its
Health & Nutrition business and has concluded that the CD4
business is likely to be more successful under new ownership, with
an owner with a greater capacity to invest in production
capabilities and product development/improvement.
COVID-19
The market for COVID-19 lateral flow tests has changed
dramatically over the last 12 months. The anticipated volumes under
the Company's contract with the Department for Health and Social
Care did not materialise and the contract lapsed in late 2021. The
Company has had very limited success in gaining the necessary
product approvals in a timely fashion and during this time, product
pricing had reduced significantly, with a large quantity of UK
testing requirements being sourced from high volume manufacturers
in China. With the current surplus of products on the market,
selling prices are now substantially below the Company's cost of
raw materials therefore making Omega's COVID-19 business unit
unviable. In light of these circumstances, the Company will no
longer pursue any COVID-19 opportunities and no further revenue is
expected from COVID-19.
As announced on 10 December 2021, the Company is in dispute with
the DHSC regarding the potential repayment of a pre-production
payment of GBP2.5 million (net of VAT). The Board of Omega, having
taken legal advice, do not believe that the Company is required to
repay the pre-production payment and that it is entitled to recover
additional losses incurred under the contract. Discussions with the
DHSC are ongoing and the Company has yet to receive a response to
the Company's latest correspondence sent on 8 February 2022. At the
Company's request, the DHSC is making arrangements to remove the
government-funded equipment from the Alva site.
4. Warrants
As detailed above, the Company has also agreed to issue Warrants
to investors in the Placing on the basis of nine Warrants for every
five Placing Shares subscribed. Accordingly, there will be
90,000,000 Warrants in issue under the Block Admission, with the
each having the right to subscribe for one new Ordinary Share. The
Warrants are exercisable at a price of 4.0 pence per Ordinary Share
during the Warrant Exercise Period.
The issue and validity of the Warrants is not conditional on the
passing of the Resolution at the General Meeting, as the Warrants
are issued using the same cashbox structure as the allotment and
issue of the Placing Shares described above. Only subscribers for
Placing Shares will receive Warrants, and participation in the Open
Offer or the Subscription does not entitle the subscriber to any
Warrants. None of the Warrants will be admitted to trading on AIM
or any other stock exchange.
The other key terms and conditions of the Warrants are set out
in the table below:
Subscription Each Warrant issued will confer on the holder
Rights the right to subscribe for one new Ordinary Share
at a price of 4.0 pence per Ordinary Share by
notice to the Company during the Warrant Exercise
Period.
Warrant Exercise The exercise period for a Warrant is the period
Period from the date of issue of the Warrant to (and
including) 5.00 p.m. on 9 November 2023 (unless
terminated earlier in accordance with the terms
of the Warrants)
Exit Holders may elect to exercise Warrants conditionally
on the occurrence of an "Exit" event before expiry
of the Warrant Exercise Period
Adjustment The subscription rights conferred by the Warrants
to Subscription and/or the exercise price of the Warrants shall
Rights be adjusted by the Board in its sole discretion
on the occurrence of certain events in relation
to the Company, including
(a) a subdivision, consolidation or reclassification
of the Ordinary Shares;
(b) a reduction of capital or any other reduction
in the number of Ordinary Shares in issue from
time to time;
(c) an issue of Ordinary Shares by way of dividend
or distribution or by way of capitalisation of
profits or reserves; or
(d) a consolidation, amalgamation or merger of
the Company with or into another entity in certain
circumstances
with the intention, in broad terms, that any
such adjustment will leave the holder(s) of the
Warrant(s) in a similar position to the position
they were in immediately before the event giving
rise to the adjustment.
Transfer The Warrants are, subject to certain conditions,
freely transferable by the holders.
Security The Warrants are not secured.
Modifications The Company may amend the provisions of the instrument
constituting the Warrants without the consent
of the holders of the Warrants where such amendment
is of a minor nature or to correct a manifest
error. Otherwise no amendment or abrogation to
the terms of the instrument are permitted without
the consent of holders of at least 75% of the
Warrants in issue at the time.
Information The Warrants entitle holders to receive the Company's
Rights annual report and accounts and all accompanying
documents, together with every other document
sent to the holders of the Ordinary Shares, in
each case at the same time as it is sent to the
holders of Ordinary Shares.
Administration The Warrants are in certificated form and the
Company has established and will maintain a register
of the holders of Warrants. There are also provisions
in the instrument constituting the Warrants for
meetings of the holders of Warrants.
5. Current Trading
The Company continues to trade in line with management
expectations, albeit cash resources do not allow the Board to
execute on its growth strategy. As at 5 May 2022, the Company had
cash balances of GBP1.4 million and the overdraft facility remains
undrawn.
As detailed in the trading update on 7 April 2022, the Company
remains in dispute with the Department of Health and Social Care
(DHSC) and has yet to receive a response to the Company's latest
correspondence sent on 8 February 2022. At the Company's request,
the DHSC is making arrangements to remove the government-funded
equipment from the Alva site.
6. Details of the Placing and Subscription
The Company is raising, in aggregate, GBP2.0 million (before
expenses) by means of the Placing, with the Placing Shares
representing approximately 27.4 per cent. of the Existing Ordinary
Shares prior to the Placing. The Placing is being undertaken by
means of a non pre-emptive cashbox placing, in terms of which
monies received from Placees will be applied by finnCap (acting as
principal) in subscribing for redeemable preference shares in a new
company incorporated in Jersey ("JerseyCo"). The Company will then
allot and issue the Placing Shares and Warrants to the persons
entitled thereto in the Placing in consideration for the transfer
of finnCap's holding of ordinary shares and redeemable preference
shares in the JerseyCo to the Company. Accordingly, instead of
receiving cash consideration for the issue of Placing Shares and
Warrants, following completion of the Placing, the Company will own
the entire issued share capital of JerseyCo, whose principal assets
will be its cash reserves, which will represent an amount
approximately equal to the net proceeds of the Placing. The Company
will then be able to access those funds by redeeming the redeemable
preference shares it will hold in JerseyCo. The Placing Shares will
be admitted to trading on AIM at 8.00 a.m. on 9 May 2022.
The Company is also conditionally raising, in aggregate,
GBP85,000 by means of the Subscription, with the Subscription
Shares expected to represent approximately 0.75 per cent. of the
Enlarged Issued Share Capital following Admission. The Subscription
will be conditional upon the Resolution being passed at the General
Meeting and upon Admission. The Directors (and certain of their
connected persons) are participating in the Subscription as
follows:
Director Position Current Number of Current % Holding Number of Resultant
Ordinary Shares Subscription Shares percentage holding
of Enlarged Issued
Share Capital
Simon Douglas Chairman 0 0 625,000* 0.22%
-------------------- ------------------- ----------------- ------------------- ------------------
Jag Grewal CEO 235,746 0.13 500,000 0.26%
-------------------- ------------------- ----------------- ------------------- ------------------
Chris Lea CFO 0 0 500,000 0.18%
-------------------- ------------------- ----------------- ------------------- ------------------
Non-Executive
Jeremy Millard Director 525,000 0.29 500,000 0.36%
-------------------- ------------------- ----------------- ------------------- ------------------
* Includes 125,000 Subscription Shares applied for by relatives
of Simon Douglas
Each of the Directors is a related party of the Company for the
purposes of the AIM Rules by virtue of their status as Directors of
the Company. finnCap, the nominated adviser of the Company,
considers that the terms of their participation in the Subscription
to be fair and reasonable insofar as Shareholders are
concerned.
7. Details of the Open Offer
The Company considers it important that Shareholders have an
opportunity (where it is practicable for them to do so) to
participate at the same price per Ordinary Share as the Placing and
Subscription and, accordingly, the Company is proposing to make the
Open Offer to Qualifying Shareholders. The Company is proposing to
raise a maximum of approximately GBP2.0 million (before expenses)
(assuming full take up of the Open Offer but being less than the
EUR8 million maximum amount permitted without requiring the
publication by the Company of a prospectus under the Prospectus
Regulation Rules) through the issue of up to 49,860,515 Open Offer
Shares.
The Open Offer Shares will be available to Qualifying
Shareholders pursuant to the Open Offer at the Issue Price of 4.0
pence per Open Offer Share, payable in full on acceptance. Any Open
Offer Shares not applied for by Qualifying Shareholders will be
available to Qualifying Shareholders under the Excess Application
Facility.
Qualifying Shareholders will be able to apply for Open Offer
Shares under the Open Offer at the Issue Price on the following
basis:
3 Open Offer Shares for every 14 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 the 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 Entitlement. Not all Shareholders will be Qualifying
Shareholders. Shareholders who are located in, or are citizens of,
or have a registered office in certain 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 as shown on the
Application Form (for Qualifying Non-CREST Shareholders) and as
credited to stock accounts in CREST (for Qualifying CREST
Shareholders). 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. If applications
under the Excess Application Facility are received for more than
the total number of Open Offer Shares available following take up
of Open Offer Entitlements, such applications will be scaled back
pro rata to existing shareholdings. It should be noted that
applications under the Excess Application Facility may not be
satisfied in full.
Application will be made for the Open Offer Entitlements to be
admitted to CREST. It is expected that such Open Offer Entitlements
will be credited to CREST at 8.00 a.m. on 16 May 2022. The Open
Offer Entitlements will be enabled for settlement in CREST until
11.00 a.m. on 31 May 2022. 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
claims. The Open Offer Shares must be paid in full on application.
The latest time and date for receipt of completed Application Forms
or CREST applications and payment in respect of the Open Offer will
be 11.00 a.m. on 31 May 2022. The Open
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 the Qualifying Shareholders who do not
apply under the Open Offer. The Application Form is not a document
of title and cannot be traded or otherwise transferred.
Further details of the Open Offer and the terms and conditions
on which it is being made, including the procedure for application
and payment, will be contained in Part IV of the Circular and (for
Qualifying Non-CREST Shareholders) on the accompanying Application
Form.
The Open Offer Shares will be issued free of all liens, charges
and encumbrances and will, when issued and fully paid, rank pari
passu in all respects with the New Ordinary Shares, including the
right to receive all dividends and other distributions declared,
made or paid after the date of their issue.
8. Effect of the Fundraise
Upon Admission, and assuming full take up of the Open Offer
Entitlements, the Enlarged Issued Share Capital is expected to be
284,667,919 Ordinary Shares. On this basis, the New Ordinary Shares
will represent approximately 18.3 per cent. Of the Company's
Enlarged Issued Share Capital.
Following the issue of the Placing Shares and the New Ordinary
Shares pursuant to the Fundraising, assuming full take up of the
Open Offer Entitlements, Qualifying Shareholders who do not take up
any of their Open Offer Entitlements will suffer a dilution of
approximately 55.83 per cent. To their interests in the Company
(prior to Placing). If a Qualifying Shareholder takes up his Open
Offer Entitlement in full they will suffer (by reason of the issue
of the Placing Shares and the New Ordinary Shares) a dilution of
approximately 22.42 per cent. To their interest in the Company. In
addition, the issue of new Ordinary Shares following the exercise
of Warrants will have a dilutive effect on the interests of other
Shareholders. If all Warrants issued under the Placing are
exercised in full, this will further dilute Shareholders'
proportionate ownership and voting interest in the Company by
approximately 31.62 per cent.
DEFINITIONS
The following definitions apply throughout this announcement
unless the context otherwise requires:
"Admission" the admission of the Subscription Shares and the Open
Offer Shares to trading on AIM becoming
effective in accordance with the AIM Rules
"AIM" the market of that name operated by London Stock Exchange
"AIM Rules" the AIM Rules for Companies, published by London Stock
Exchange
"Application Form" the application form for use by Qualifying Non-CREST
Shareholders in connection with the Open
Offer
"Block Admission" the block admission applied for in respect of the
90,000,000 new Ordinary Shares to be admitted
to trading on AIM pursuant to the Warrants
"Board" the board of directors of the Company
"Circular" the circular, containing further details of the
Fundraising and convening the General Meeting
in order to pass the Resolutions to be published by the
Company on 13 May 2022
"Company" or "Omega" Omega Diagnostics Group plc
"CREST" the relevant system (as defined in the Uncertificated
Securities Regulations 2001) for the
paperless settlement of trades and the holding of
uncertificated securities operated by Euroclear
"CREST Regulations" the Uncertificated Securities Regulations 2001 (S.I. 2001
No. 3755)
"Dealing Day" a day on which the London Stock Exchange is open for
business in London
"Directors" the directors of the Company
"Enlarged Issued Share Capital" all of the Ordinary Shares in issue (including the New
Ordinary Shares) upon Admission
"Euroclear" Euroclear UK & International Limited, the operator of
CREST
"Excess Application Facility" the arrangement pursuant to which Qualifying Shareholders
may apply for additional Open Offer
Shares in excess of their Open Offer Entitlement in
accordance with the terms and conditions
of the Open Offer
"Excess CREST Open Offer" in respect of each Qualifying CREST Shareholder, his
Excess Open Offer Entitlement
"Excess Open Offer Entitlements" an entitlement for each Qualifying Shareholder to apply to
subscribe for Open Offer Shares
in addition to his Open Offer Entitlement pursuant to the
Excess Application Facility which
is conditional on him taking up his 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 will be
marked "ex" for entitlement under the
Open Offer, being 8:00 a.m. 13 May 2022
"Existing Ordinary Shares" The 232,682,404 existing ordinary shares of 4.0 pence each
in issue at the date of the Circular,
all of which are admitted to trading on AIM
"FCA" the Financial Conduct Authority
"finnCap" finnCap Limited
"Form of Proxy" the form of proxy for use by Shareholders in connection
with the General Meeting
"FSMA" the Financial Services and Markets Act 2000
"Fundraising" together the Placing, the Subscription and the Open Offer
"General Meeting" the general meeting of the Company to be convened for
11.00 a.m. on 6 June 2022
"Group" the group comprising the Company and its subsidiary
undertakings
"Issue Price" 4.0 pence per New Ordinary Share
"JerseyCo" means the company incorporated in Jersey in connection
with the Placing
"JerseyCo Subscriber" means finnCap in its capacity as a subscriber for the
JerseyCo Subscriber Shares
"JerseyCo Subscriber Shares" the ordinary and preference shares in JerseyCo initially
held by the JerseyCo Subscriber
"London Stock Exchange" London Stock Exchange plc
"Money Laundering Regulations" Terrorist Financing and Transfer of Funds (Information on
the Payer) Regulations 2017, the
Criminal Justice Act 2003 and the Proceeds of Crime Act
2002
"New Ordinary Shares" together, the Subscription Shares and the Open Offer
Shares
"Open Offer" the conditional invitation to be made by the Company to
Qualifying Shareholders to apply to
subscribe for the Open Offer Shares at the Issue Price on
the terms and subject to the conditions
set out in the Circular and, in the case of Qualifying
Non-CREST Shareholders, in the Application
Form
"Open Offer Entitlement" the individual entitlements of Qualifying Shareholders to
subscribe for Open Offer Shares
allocated to Qualifying Shareholders pursuant to the Open
Offer
"Open Offer Shares" the up to 49,860,515 new Ordinary Shares to be issued by
the Company pursuant to the Open
Offer
"Option Agreement" means the option agreement dated on or about the date of
this announcement entered into by
the Company, JerseyCo and the JerseyCo Subscriber granting
the JerseyCo Subscriber the option
to sell and granting the Company the option to buy
ordinary shares in JerseyCo
"Ordinary Shares" ordinary shares of 4 pence each in the capital of the
Company
"Overseas Shareholders" Shareholders with a registered address outside the United
Kingdom
"President's Emergency Plan for AIDS Relief" or "PEPFAR" the US President's Emergency Plan for AIDS Relief, the
world's largest funding contributor
to the global HIV response
"Placing" the placing of the Placing Shares and the Warrants
pursuant to a placing agreement dated 5
May 2022 between the Company and finnCap
"Placing Shares" the 50,000,000 Ordinary Shares to be issued pursuant to
the Placing
"Prospectus Regulation" Regulation (EU) 2017/1129 on the prospectus to be
published when securities are offered to
the pubic or admitted to trading on a regulated market, as
it forms part of the domestic law
of the United Kingdom by virtue of the European Union
(Withdrawal) Act 2018
"Prospectus Regulation Rules" the prospectus rules and regulations made by the FCA
pursuant to section 73A of FSMA (as emended
from time to time)
"Qualifying CREST Shareholders" Qualifying Shareholders holding Existing Ordinary Shares
in uncertificated form
"Qualifying Non-CREST Shareholders" Qualifying Shareholders holding Existing Ordinary Shares
in certificated form
"Qualifying Shareholders" holders of Existing Ordinary Shares on the register of
members of the Company at the Record
Date but excluding certain Overseas Shareholders
"Receiving Agent" or "Registrar" Share Registrars Limited
"Record Date" close of business on 12 May 2022
"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
"Resolution" the Resolution to be set out in the Notice of General
Meeting forming part of the Circular
"Shareholders" holders of Ordinary Shares
"Subscribers" the subscribers pursuant to the Subscription
"Subscription" the conditional subscription of GBP85,000 in aggregate by,
Simon Douglas, Jag Grewal, Chris
Lea and Jeremy Millard, Chairman, CEO, CFO and
Non-Executive Director of the Company respectively
for the Subscription Shares
"Subscription Shares" the 2,125,000 New Ordinary Shares (in aggregate) to be
issued to the Subscribers
"Transfer Agreement" means the subscription and transfer agreement dated on or
about the date of this announcement
entered into by the Company, JerseyCo and the JerseyCo
Subscriber providing, inter alia, for
the acquisition by the Company from the JerseyCo
Subscriber of the JerseyCo Subscriber Shares
"UK" the United Kingdom of Great Britain and Northern Ireland
"uncertificated" or "in uncertificated form" an Ordinary Share recorded on a Company's share register
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
"US" or "United States" 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
"Warrants" the warrants to subscribe for new Ordinary Shares granted
to subscribers of Placing Shares
and exercisable at a price of 4 pence per Ordinary Share
during the Warrant Exercise Period
"Warrant Exercise Period" the period up until 5.00 pm on 9 November 2023
"GBP", "pounds sterling", "pence" or "p" are references to the lawful currency of the United
Kingdom
"EUR" or "Euros" are references to a lawful currency of the European Union
PLACING AND OPEN OFFER STA TISTICS
Issue Price 4.0 pence
Number of Ordinary Shares in issue on the date of the
Circular (incl. the Placing Shares) 232,682,404
Number of Placing Shares to be issued under the Placing 50,000,000
Number of Warrants to be issued under the Placing 90,000,000
Number of Subscription Shares 2,125,000
Number of Open Offer Shares ** up to 49,860,515
Enlarged Issued Share Capital upon Admission ** 284,667,919
New Ordinary Shares as a percentage of the Existing up to 22.34 per cent.
Ordinary Shares
Gross proceeds of the Placing* GBP2.00 million
Gross proceeds of the Subscription GBP0.08 million
Gross proceeds of the Open Offer** up to GBP2.0 million
Gross proceeds of the Fundraising*** GBP4.1 million
Net proceeds of the Fundraising*** GBP3.8 million
Open Offer Statistics
Open Offer basic entitlement 3 Open Offer Shares for every 14 Existing Ordinary
Shares
Open Offer Shares as a percentage of the Enlarged Issued 17.5 per cent.
Share Capital
Open Offer Basic Entitlements ISIN GB00BN7T6X57
Open Offer Excess Entitlements ISIN GB00BN7T6Y64
* Representing the gross proceeds from the Placing Shares but
not the issue of any new Ordinary Shares following exercise of
Warrants. If all 90,000,000 Warrants are exercised, the Company
will receive gross proceeds of a further GBP3.6m.
**Assuming take-up in full of the Open Offer by Qualifying
Shareholder
*** Excluding any proceeds from the exercise of Warrants.
EXPECTED TIMET ABLE
2022
Announcement of the Fundraising 7:00 a.m. 6 May
Admission of the Placing Shares 8.00 am on 9 May
Record Date for entitlements under the Open Offer Close of business on 12 May
Publication and posting of the Circular, the Form of Proxy and, to Qualifying Non-CREST 13 May
Shareholders
only, Application Forms
Ex-entitlement date for the Open Offer 8:00 a.m. 13 May
Basic Entitlements and Excess Entitlements credited to stock accounts of qualifying 16 May
CREST
Shareholders
Recommended latest time for requesting withdrawal of Basic Entitlements and Excess 4:30 p.m. 25 May
Entitlements
from CREST
Latest time and date for depositing Basic Entitlements and Excess Entitlements into 3:00 p.m. 26 May
CREST
Latest time and date for splitting of Application Forms (to satisfy bona fide market 3:00 p.m. 27 May
claims
only)
Latest time and date for receipt of completed Application Forms from Qualifying 11:00 a.m. 31 May
Non-CREST
Shareholders and payment in full under the Open Offer or settlement of relevant CREST
instructions
(as appropriate)
Announcement of the results of the Open Offer 1 June
Latest time and date for receipt of Forms of Proxy or electronic proxy appointments for 11:00 a.m. 4 June
use
at the General Meeting
General Meeting 11:00 a.m. 6 June
Announcement of the results of the General Meeting 6 June
Admission and commencement of dealings in the Offer and Subscription Shares on AIM 08:00 a.m. 8 June
New Ordinary Shares in uncertificated form expected to be credited to accounts in CREST 8 June
(uncertificated
holders only)
Expected date of despatch of definitive share certificates for the New Ordinary Shares Week commencing 13 June
in
certificated form (certificated holders only)
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END
IOEZZGGKGKKGZZZ
(END) Dow Jones Newswires
May 06, 2022 02:00 ET (06:00 GMT)
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