REG - Deepverge PLC - Update; exclusivity agreement with Microsaic

DeepvergeAnnouncement

20/12/2023 12:30

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RNS Number : 4962X  Deepverge PLC  20 December 2023

20 December 2023

 

DeepVerge plc

 

("DeepVerge" or "the Company")

 

Update; exclusivity agreement with Microsaic

 

Further to the previous notification on 13 December 2023, the Company has
today entered into an agreement with Microsaic Systems plc ("Microsaic")
granting Microsaic a period of exclusivity ("Exclusivity Period") in respect
of the potential sale of certain assets currently held within subsidiaries
relating to  its Modern Water business ("the 'Business").

The assets broadly comprise equipment for the laboratory-based manufacturing
of bio-reagents used in related water testing equipment currently based at the
Company's York laboratory and include all IP and rights to the related water
testing equipment including LX, FX and Continuous Toxic Measuring ("CTM")
machines and water membrane technology.

The Business specifically excludes the voltammetry technology and equipment
manufactured by B3 Electronic Design Pty Ltd in Perth, Australia.

The granting of the Exclusivity Period follows the receipt of an indicative
outline proposal from Microsaic to purchase the Business for £100,000 in cash
payable on completion ('the Proposal').

 

In addition upon completion Microsaic Systems is willing to discharge all
intra company debt (sum to be verified) between DeepVerge and Microsaic as
part of the consideration for the acquisition.

( )

The Exclusivity Period runs until the earlier of (a) 16 January 2024, (b) the
signature of a legally binding sale & purchase agreement between the
DeepVerge and Microsaic for the Business ("the Transaction") and (c)
withdrawal of the Proposal by Microsaic.

No consideration has been received by DeepVerge for the granting of the
Exclusivity Period.

During the Exclusivity Period DeepVerge shall not solicit, advertise, market
or enter any other negotiations, arrangements or options with any third
parties relating to the sale of the Business and shall not complete the
Transaction other than with Microsaic.

The Exclusivity Period may, at its sole discretion, be extended by Deepverge
for a further period for the Transaction to be finalised.

The Exclusivity Period is designed to provide Microsaic with time to conclude
its due diligence, obtain binding commitments for a fundraising, including
working capital for the enlarged Microsaic business,  and consideration for
the Transaction, and to negotiate and sign a detailed sale and purchase
agreement. There is no guarantee that the Transaction will occur, or that the
outline terms indicated in the Proposal will be those on which a binding
agreement is signed. As previously notified on 13 December 2023, any proceeds
from a disposal transaction is likely to realise insufficient value to avoid
the closure or administration of the relevant Group subsidiaries.

DeepVerge director Dr Nigel Burton is also a director of Microsaic. Given his
conflict of interest, Dr Burton is not involved in the DeepVerge board's
consideration of the Transaction. Ross Andrews is the only independent
director ("Independent Director").

As previously notified, the cancellation of the admission of the Company's
shares to trading on AIM ("Cancellation") is expected therefore to take place
with effect from 7.00 a.m. on 27 December 2023.

If the Transaction occurs before the date of Cancellation it would constitute
a related party transaction under the AIM Rules for Companies (the "AIM
Rules") and would require treatment in accordance with AIM Rule 13 (related
party transactions) and AIM Rule 15.

The Company will no longer be subject to the AIM Rules once Cancellation has
occurred.  In the event that Cancellation occurs before a binding agreement
is entered into for the sale of the Business to Microsaic, the requirements of
AIM Rule 13 and 15 would cease to apply to the transaction.

The Independent Director expects that if the Transaction occurs, it is likely
to occur at a point following Cancellation.

Further updates will be given as appropriate.

 DeepVerge plc                                   Nigel Burton, Interim CEO  +44 (0) 7785 234447
 SPARK Advisory Partners Limited                 Neil Baldwin               +44 (0) 113 370 8974

 (Nominated Adviser)
 Turner Pope Investments (TPI) Limited (Broker)  Andy Thacker/James Pope    +44 (0) 20 3657 0050

 

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version of the Market Abuse Regulation No 596/2014 which is part of English
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publication of this announcement via a Regulatory Information Service, this
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