REG - Deltex Med Grp PLC - Placing, Subscription and Retail Offer
14/07/2023 18:15
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RNS Number : 1368G Deltex Medical Group PLC 14 July 2023
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14 July 2023
Deltex Medical Group plc
("Deltex Medical", the "Company" or the "Group")
Placing, Subscription and Retail Offer
Capital Reorganisation to change the nominal value of the Existing Ordinary
Shares
and
Notice of General Meeting
Highlights
· Equity raise of £1.67M to enable restructuring and balance sheet
strengthening
· Supported by existing Institutional investors and Board
contribution of £100k
· Identification of up to approximately £1.0 million of annualised
costs savings predominantly through headcount reduction
· £350k of debt converted to equity at the Issue Price
· Next generation TrueVue System now CE marked and released in the
UK and EU; revenues expected from November 2023
1. INTRODUCTION
Deltex Medical Group plc (AIM: DEMG) announces that it has conditionally
raised approximately £1.67 million (before expenses) by way of a placing of
(the "Placing") and subscription to (the "Subscription"), in aggregate,
833,000,000 new ordinary shares of 0.01 pence each in the Company ("New
Ordinary Shares") at 0.20 pence per New Ordinary Share (the "Issue Price").
The net proceeds of the Placing and Subscription will provide the Company
with, inter alia, additional working capital and funding for non-recurring
internal restructuring costs, creditor payments and to implement the Company's
restructuring and updated strategy.
In addition to the Placing and the Subscription, the Company is seeking to
raise up to a further £0.5 million (before expenses) via a REX retail offer
to existing shareholders in the Company ("Shareholders") at the Issue Price
(the "Retail Offer", and together with the Placing and the Subscription, the
"Fundraising"). The Retail Offer will provide existing UK retail shareholders
in the Company with an opportunity to participate in the Fundraising. Those
investors who subscribe for New Ordinary Shares pursuant to the Retail Offer
(the "Retail Offer Shares") will do so pursuant to the terms and conditions of
the Retail Offer which will separately be announced by the Company today. The
Retail Offer will be conditional on completion of the Placing and
Subscription, but the Placing and Subscription are not conditional on the
Retail Offer.
Allenby Capital Limited ("Allenby Capital") is acting as sole broker in
connection with the Placing.
The Fundraising is subject to the satisfaction of the Conditions, which are as
set out below and explained in this announcement:
i. completion of the Capital Reorganisation;
ii. passing of the Fundraising Resolutions;
iii. the Placing and Subscription becoming unconditional in all respects;
iv. Admission becoming effective by 8.00 a.m. on 2 August 2023 (or such
later time and date not being later than 8.00 a.m. on 16 August 2023 as the
Company and Allenby Capital may agree); and
v. the restoration of trading in the Company's Ordinary Shares on AIM.
In order to implement the Fundraising, the Directors will require further
authorities, under sections 551 and 571 (respectively) of the Companies Act,
to issue and allot the Fundraising Shares and the Loan Conversion Shares and
to disapply statutory pre-emption rights in respect of such allotments.
Separately to the Fundraising and the Loan Conversion, and as a result of the
Capital Reorganisation, the Directors are also proposing additional
Resolutions which would (subject to certain restrictions) grant the Directors
authority to allot further equity securities wholly for cash in the future up
to a certain amount, without pre-emption rights applying, in respect of the
allotment authority granted pursuant to Resolutions 4 and 7 proposed at the
General Meeting.
Further, the Company's Existing Ordinary Shares have a nominal value of 1
penny per share and under the Companies Act, the Company is unable to issue
new shares at less than the nominal value of those shares. Given that the
Issue Price is set at 0.20 pence per share, the Company is required to
undertake a Capital Reorganisation, so that the nominal value of each New
Ordinary Share to be issued pursuant to the Fundraising will be less than the
Issue Price, details of which are set out in paragraph 7 below. The Capital
Reorganisation is subject to the passing of the Fundraising Resolutions at the
General Meeting and is conditional upon Admission.
These matters will require the approval of Shareholders and accordingly, the
Proposals are conditional, inter alia, on the passing of the Fundraising
Resolutions at the General Meeting. The General Meeting will be convened for
9:30 a.m. on 1 August 2023 and will take place at the offices of the Company
at Terminus Road, Chichester, West Sussex PO19 8TX for the purpose of seeking
such approvals. A notice convening the General Meeting, at which the
Resolutions will be proposed, is set out in the Circular to be posted to
Shareholders on 15 July 2023.
In order for the Proposals and Admission to proceed, Shareholders will need to
approve the Fundraising Resolutions set out in the Notice of General Meeting.
If the Fundraising Resolutions to be proposed at the General Meeting are not
approved by Shareholders, the Placing Shares, the Retail Offer Shares, the
Subscription Shares and the Loan Conversion Shares will not be able to be
allotted and consequently the Fundraising will not proceed and therefore the
Company's performance, financial position and prospects will be adversely
affected. In the absence of availability of any alternative funding solutions,
the Directors consider that it is highly likely that the Company would be
required to appoint an administrator in that instance in order to protect the
interests of creditors. Accordingly, the Directors consider that it is very
important that Shareholders vote in favour of the Resolutions, in order that
the Proposals and Admission can proceed.
The purpose of this announcement is to: (i) give further details on the
Proposals, including the background to and reasons for the Resolutions; (ii)
explain why the Board considers the Proposals to be in the best interests of
the Company and the Shareholders as a whole and why the Directors unanimously
recommend that the Shareholders vote in favour of the Resolutions, as they
intend to do in respect of their own interest in Existing Ordinary Shares; and
(iii) convene the General Meeting to obtain Shareholder approval for the
Resolutions. If the Fundraising Resolutions are passed at the General Meeting
on 1 August 2023, completion of the Proposals and Admission are expected to
take place on or around 2 August 2023.
2. BACKGROUND TO AND REASONS FOR THE PROPOSALS
On 26 June 2023, the Group announced, amongst other matters, that its
cashflows had come under pressure, with the result that working capital
projections indicated a need for additional funding by mid-July 2023. This
additional cashflow pressure was the result of a combination of factors,
including a delay in the launch of the Group's next generation TrueVue monitor
due to, inter alia, supply chain issues and delays in testing and
evaluation. In addition, no material order from the national tender in Latin
America for haemodynamic monitoring equipment has been forthcoming as expected
and trading in the second quarter of 2023 was weaker than expected, which the
Directors believe is due in part to customers waiting for the new monitor to
be available (now launched). Accordingly, on 26 June 2023, the Ordinary Shares
were suspended from trading on AIM pending clarification of the Company's
financial position and are expected to remain so at least completion of the
Proposals.
On 6 July 2023, the Group announced, inter alia, that it was exploring a
potential equity fundraise and provided a trading update for the half year to
30 June 2023. Unaudited revenues for the first half ("H1") of 2023 were
£1.1 million (H1 2022: £1.2 million) and cash at hand on 30 June 2023 was
£0.1 million (H1 2022: £0.6 million).
More recently, on 10 July 2023, the Group announced that its new next
generation TrueVue System was now CE marked and released in the UK and EU. The
Group is now able to deploy the device for in-hospital evaluations to ensure
that there are no "teething" issues with the launch and will therefore not
fulfil any sale orders until this is completed. It is anticipated that this
will take approximately three months. As a result, the Group is forecasting
revenue from new monitor sales to commence in November 2023. This is
normal practice for most medical device companies, as companies are not
permitted to use a device in a hospital until it has been CE marked, unless
that device has received ethical approval from the hospital and the Medicines
and Healthcare Products Regulatory Agency as part of a clinical trial.
The Board is now pleased to put forward the Proposals in order to refinance
the Company, enable a restructuring of the Group and implement a focused
strategy, details of which are set out below.
3. STRATEGY AND RESTRUCTURING
Notwithstanding the challenging trading conditions experienced by the Group
and the cash flow problems, the Board have identified the opportunity to
turn-around the business. At the centre of this turn-around strategy, the
Group intends to adopt a "zero-based budgeting" approach, whereby the Group
will conservatively allocate funding based on programme efficiency and
necessity rather than budget history.
Accordingly, the Board has identified up to approximately £1.0 million of
annualised costs savings that can be implemented in the near-term, which will
contribute towards aligning the business to operate in a streamlined fashion
and in particular, in line with post-COVID-19 operating conditions (such as
the limited physical sales access to hospitals that prevails). These cost
savings include a significant reduction in headcount across the Company, as
well as the Company's executive directors having agreed to changes in their
remuneration to further conserve cash. Accordingly, the Chief Executive
Officer and the Finance Director have agreed to an approximately 40 per cent.
and 20 per cent. reduction in salary respectively for the next 18 months.
The Board also intends to review its Board composition in the near future,
which may result in a reduction in the number of Directors (currently 7) and
therefore additional potential cost savings.
In addition, Imperialise Limited (a company controlled by Nigel Keen, Chairman
of the Board) has agreed to restructure its £1.0 million short-term loans to
the Company. As a result, the originally scheduled repayment by the Company of
£0.25m from 25 July 2023 and £0.75 million by 30 June 2024 will now be
postponed as to £0.25 million by 30 June 2025 and £0.4 million by 31
December 2025. The remaining £0.35 million due to Imperialise Limited will be
repaid by the issue of 175,000,000 New Ordinary Shares at the Issue Price on
Admission. Further details of the Company's debt restructuring are set out in
paragraph 6 below.
The Directors believe that taking into account these cost reductions and
necessary restructuring, the Company's strategy should be to focus on
maintaining revenues from existing single use probes, seeking to achieve
positive EBITDA. As well as providing Group working capital, these revenues
are expected to provide finance for the technical resources needed to continue
development of and future upgrades to the new monitor, as well as to complete
the development of the non-invasive Suprasternal device.
The Directors believe that the launch of the next generation TrueVue monitor,
coupled with the potential for additional sales of the existing monitor,
represents further revenue upside to this strategy, although the Group has
assumed that sales of the new monitor will commence in November 2023 (and
assuming in-hospital assessments are successful over the next three months).
The new next generation TrueVue monitor has a significantly improved user
interface than the existing model and is battery backed and portable, so can
be used anywhere in a hospital. As the TrueVue monitor requires single patient
use probes and the new monitor is easier to use, the Directors expect that
existing hospitals that upgrade to the new monitor are likely to increase
their current usage of probes, and this could provide additional revenue from
that currently forecast.
Critically, the Board believes that the new monitor facilitates the launch of
the new non-invasive Suprasternal device, which is currently under
development. This new disposable device will be complementary to the current
minimally invasive single patient use ultrasound transducer (probe) and is
anticipated to have significantly broader applications, such as for awake
patients, A&E, wards and paramedics. It is anticipated to provide an
immediate assessment of haemodynamic instability by external means, such as
for ICU patients with Covid, sepsis and heart failure. Developing the new,
non-invasive Doppler-based haemodynamic monitoring device is a key part of the
Group's future growth and long-term strategy.
The new next generation TrueVue monitor is expected to help increase activity
levels in all territories, with the Board expecting orders in the short term
from international distributors. The Group is planning to make submissions for
regulatory approval to sell the new next generation TrueVue monitor outside
the UK and EU, targeting to obtain these approvals in the first half of 2024
for the USA, South Korea and certain countries in Latin America. The new
next generation TrueVue monitors are in production at the Group's headquarters
in Chichester, West Sussex, in anticipation of customer demand.
While the Directors expect that revenues will materialise from the national
tender with its Latin American distributor and from the non-invasive
Suprasternal device currently under development, to maintain prudence, these
factors have not been included in the Company's current forecasts and
therefore represent potential upside.
Although the Group is facing challenging cashflow issues, the Directors
believe that on completion of the Proposals and the restructure of the
Company, the Group will be well positioned for growth.
Bridge loan
On 26 June 2023, the Company announced that working capital projections
indicated a need for additional funding by mid-July. The Group's cash balance
is currently approximately £0.1 million and the Company is managing its
cashflows to remain a going concern until completion of the Fundraising and
receipt of the net proceeds by the Company. In order to bridge working
capital requirements until then, Imperialise Limited (a company controlled by
Nigel Keen, the Chairman of the Board) has agreed to provide a short-term
bridge loan facility of up to £50,000 to be drawn upon should the Company
require (the "Bridge Loan"). The Bridge Loan will be repayable, to the
extent drawn, immediately after receipt of the net proceeds of the Fundraising
by the Company shortly after Admission. The Bridge Loan will be unsecured
and will carry interest at 15 per cent. per annum. The provision of this
loan is a related party transaction pursuant to rule 13 of the AIM Rules and
as further set out in paragraph 6 below.
Non-executive director fees
The annual equity-settled fee for each of the non-executive directors of
Deltex Medical (excluding the Chairman) ("NEDs") is £24,000 and £33,333 for
the Chairman. These fees have not changed since 2009. At 30 June 2023 the
total accrued liability on the balance sheet relating to these deferred
equity-settled fees was £170,000.
As announced by the Company on 21 December 2020, Deltex Medical intends to
satisfy the Chairman's and the NEDs' (save for Tim Irish) emoluments through
the issue of Ordinary Shares at the prevailing mid-market price on a
semi-annual basis. The most recent tranche of Ordinary Shares issued in this
regard was announced on 11 April 2023 in respect of fees for the year ended 31
December 2021. As part of the Proposals, the NEDs (save for Tim Irish) have
agreed to waive fees due to them for the year ended 31 December 2022 and
accordingly no Ordinary Shares will be issued in this regard.
However,18,966,477 New Ordinary Shares will be issued at the Issue Price to
Imperialise Limited (a company controlled by Nigel Keen, the Chairman of the
Board) on Admission in lieu of the Chairman's fees of £33,333 plus employer
national insurance contributions for the year ended 31 December 2022.
4. USE OF FUNDRAISING PROCEEDS
The Placing and the Subscription will raise £1,666,000 gross and the net
proceeds receivable by the Company are estimated to be approximately £1.48
million. The Company intends to use these proceeds, along with the net
proceeds from the Retail Offer, to provide near-term working capital, fund
non-recurring restructuring costs associated with the cost savings plan of
approximately £0.3 million, repay approximately £0.5 million to creditors,
and implement the Company's restructuring plan and updated strategy as set out
above.
The net proceeds of the Retail Offer will be deployed for the same purposes as
outlined above.
5. THE FUNDRAISING
The Placing and Subscription
The Placing will result in the issue of a total of 620,500,000 Placing Shares
and the Subscription will result in the issue of 212,500,000 Subscription
Shares, in each case at the Issue Price. Together the Placing and the
Subscription has conditionally raised £1,666,000 before expenses for the
Company. The Placing Shares and the Subscription Shares will, in aggregate,
represent approximately 48 per cent. of the Enlarged Share Capital assuming no
Retail Offer Shares are issued.
The Placing Shares and the Subscription Shares will be issued conditional on
the satisfaction of the Conditions, which include, inter alia, the passing of
the Fundraising Resolutions at the General Meeting as well as restoration of
trading in the Company's Ordinary Shares on AIM.
The Placing Shares and the Subscription Shares, when issued and fully paid,
will rank pari passu in all respects with the New Ordinary Shares and
therefore will rank equally for all dividends or other distributions declared,
made or paid after the issue of the Placing Shares and the Subscription
Shares.
Allenby Capital has entered into the Placing Agreement with the Company
pursuant to which Allenby Capital has, on the terms and subject to the
conditions set out therein (including the occurrence of Admission), agreed to
act as the Company's agent in respect of the Placing and to use its reasonable
endeavours to procure subscribers for the Placing Shares at the Issue Price.
The Placing is not being underwritten by Allenby Capital or any other person.
The Placing Agreement contains warranties and indemnities from the Company in
favour of Allenby Capital. Allenby Capital has the right to terminate the
Placing Agreement in certain circumstances, in particular in the event of a
breach of the warranties or the occurrence of a force majeure event. The
Placing Agreement is conditional, inter alia, upon Admission having occurred
no later than 8.00 a.m. on 2 August 2023 (or such later time and date as the
Company and Allenby Capital may agree, not being later than 8.00 a.m. on 16
August 2023).
Should the Resolutions not be passed at the General Meeting, the Placing, the
Subscription and the Retail Offer will not proceed.
Completion of the Retail Offer is conditional upon, inter alia, completion of
the Placing and the Subscription. However, completion of the Placing and the
Subscription is not conditional on the completion of the Retail Offer and
there is no minimum fundraising for the Retail Offer. The Retail Offer is
available only to Shareholders of the Company resident in the United Kingdom.
Director participation in the Subscription
The following Directors and their closely associated persons (as defined in UK
MAR) have conditionally subscribed for a total of 50,000,000 New Ordinary
Shares at the Issue Price in the Subscription:
Director Existing beneficial shareholding of Existing Ordinary Shares Number of Subscription Shares subscribed for Beneficial shareholding of New Ordinary Shares on Admission Percentage of Enlarged Share Capital**
Nigel Keen 103,301,172 35,000,000 332,267,649* 19.14%
Mark Wippell 13,219,693 5,000,000 18,219,693 1.05%
Julian Cazalet 29,335,789 5,000,000 34,335,789 1.98%
Andrew Mears 6,658,731 5,000,000 11,658,731 0.67%
*includes 175,000,000 New Ordinary Shares issued pursuant to the Loan
Conversion and 18,966,477 Fee Shares
**excludes the Retail Offer Shares
The participation in the Subscription by Nigel Keen, Mark Wippell, Julian
Cazalet and Andrew Mears is deemed to be a related party transaction pursuant
to rule 13 of the AIM Rules for Companies. Accordingly, Chris Jones, Tim
Irish and Natalie Wettler (being the Directors not taking part in the
Subscription) consider, having consulted with the Company's nominated adviser,
Allenby Capital, that the terms of the other Directors' participation in the
Subscription are fair and reasonable insofar as the Company's Shareholders are
concerned.
The Retail Offer
The Retail Offer will open at around 18:05 on 14 July 2023 and will be closed
at 15:00 on 19 July 2023 and the result of the Retail Offer will be announced
via an RIS shortly thereafter.
Conditional upon, inter alia, completion of the Placing, the Subscription and
the passing of the Resolutions, up to 250,000,000 Retail Offer Shares will be
issued through the Retail Offer at the Issue Price to raise gross proceeds of
up to approximately £0.5 million (before expenses).
Pursuant to the terms of the Retail Offer, the Company will make the Retail
Offer to existing holders of Ordinary Shares resident in the United Kingdom
and only through financial intermediaries via the REX Retail Platform. Those
investors who subscribe for New Ordinary Shares pursuant to the Retail Offer
will do so pursuant to the terms and conditions of the Retail Offer contained
in the Retail Offer Announcement. The Retail Offer is not subject to any
minimum fundraising. The Retail Offer will be conditional on completion of the
Placing and Subscription and satisfaction of the Conditions.
The Retail Offer Shares, when issued and fully paid, will rank pari passu in
all respects with the New Ordinary Shares, the Placing Shares and the
Subscription Shares.
6. LOAN CONVERSION AND AMENDMENTS
The Company has £1.0 million of short-term loans with Imperialise Limited (a
company controlled by Nigel Keen, Chairman of the Board) whereby £0.25
million is due for repayment on demand from 25 July 2023 and £0.75 million is
due for repayment by 30 June 2024. In order to improve the Company's working
capital position, Imperialise Limited has agreed to restructure these
short-term loans to the Company. As a result, £0.25 million will now be
repayable by 30 June 2025 and £0.4 million by 31 December 2025. The remaining
£0.35 million due to Imperialise Limited will be repaid by the issue of
175,000,000 New Ordinary Shares at the Issue Price on Admission.
The aggregate of the Loan Conversion and above amendments and the Bridge Loan
are deemed to be a related party transaction pursuant to rule 13 of the AIM
Rules. Accordingly, Chris Jones, Tim Irish and Natalie Wettler (being the
Directors independent of the Loan Conversions and above amendments and the
Bridge Loan) consider, having consulted with the Company's nominated adviser,
Allenby Capital, that the terms of the Loan Conversion and above amendments
and the Bridge Loan are fair and reasonable insofar as the Company's
Shareholders are concerned.
As a result of the Loan Conversions, the Fee Shares and following completion
of the Fundraising, the interests of Nigel Keen (Chairman of the Board) in New
Ordinary Shares on Admission will be 332,267,649, representing approximately
19.14 per cent. of the Enlarged Share Capital assuming no Retail Offer Shares
are issued, and 16.73 per cent. of the Enlarged Share Capital assuming all the
Retail Offer Shares are issued.
7. CAPITAL REORGANISATION
The Issue Price is below the nominal value of the Existing Ordinary Shares.
The Companies Act prohibits a company from issuing shares at a discount to the
nominal or par value of its shares. Therefore, in order to ensure that the
Proposals can be carried out, it is necessary to effect the Capital
Reorganisation to change the nominal value of the Company's Existing Ordinary
Shares. The Directors therefore propose to effect the Capital Reorganisation
on the following basis:
· each of the Existing Ordinary Shares of 1 penny each will be
subdivided into and reclassified as one New Ordinary Share and one Deferred
Share;
· each New Ordinary Share will be an ordinary share in the capital
of the Company with a nominal value of £0.0001 (0.01 pence) and having those
rights set out in the Amended Articles (further details of which can be found
below);
· each Deferred Share will be a deferred share in the capital of
the Company with a nominal value of £0.0099 (0.99 pence) and having those
rights set out in the Amended Articles. The intention is that Deferred Shares
would be cancelled in due course following a court approved reduction of
capital or other means, if available; and
· the Company's articles of association require to be amended to
include certain provisions including relating to the Deferred Shares, via the
Amended Articles.
The Amended Articles
The proposed Capital Reorganisation will necessitate certain alterations to
the Company's Existing Articles. Alteration of the Existing Articles is
proposed as Resolution 1 and the alterations, including establishing the
Deferred Shares and setting out the limited rights proposed for the Deferred
Shares, are reflected in the changes to the Existing Articles as set out in
Resolution 1.
The New Ordinary Shares created upon implementation of the Capital
Reorganisation will have the same rights as the Existing Ordinary Shares
including voting, dividend, return of capital and other rights, save that
their nominal value will be 0.01 pence per share as opposed to 1 penny per
share. Existing Ordinary Share certificates will remain valid following the
Capital Reorganisation and the New Ordinary Shares will have the same ISIN as
the Existing Ordinary Shares.
The Deferred Shares will not have any voting rights and will not carry any
entitlement to attend general meetings of the Company; nor will they be
admitted to trading on AIM or any other market. They will carry only a right
to participate in any return of capital on a winding up as to one penny in
aggregate for the entire class of Deferred Shares (which payment shall be
deemed satisfied by distribution to any one holder of Deferred Shares), but
only after holders of Ordinary Shares have together received the nominal
amounts paid up on such shares. In addition, they will not carry any right to
participate in any dividend or other distribution. In each case a payment, on
a return of capital, to any one holder of Deferred Shares shall satisfy the
payment required. The Company will be authorised at any time to effect a
transfer of the Deferred Shares without reference to the holders thereof and
for no consideration pursuant to and in accordance with the Companies Act.
Accordingly, the Deferred Shares will, for all practical purposes, be
valueless and it is the Board's intention, at an appropriate time, to have the
Deferred Shares cancelled, whether through an application to the Companies
Court or otherwise in accordance with the Companies Act. No share certificates
will be issued for the Deferred Shares.
The draft Amended Articles proposed, along with a set highlighting the
alterations and comparing the Amended Articles with the Existing Articles,
will be available for inspection by Shareholders at the General Meeting until
the conclusion of the General Meeting and on the Company's website,
www.deltexmedical.com (https://www.deltexmedical.com/) .
In summary, it is proposed that each Existing Ordinary Share of 1 penny in the
capital of the Company will be subdivided and redesignated into one New
Ordinary Share and one Deferred Share. This will result in 709,057,601 New
Ordinary Shares and 709,057,601 Deferred Shares being in issue immediately
following the Capital Reorganisation but before the issue of Fundraising
Shares pursuant to the Fundraising and the Loan Conversion Shares pursuant to
the Loan Conversion.
8. GENERAL MEETING AND CIRCULAR
A circular including a notice of General Meeting will be sent to Shareholders
on 15 July 2023. A copy of the Circular will also be made available on the
Company's website at: www.deltexmedical.com.
A notice convening a General Meeting of the Company to be held at 9:30 a.m. on
1 August 2023 at the offices of the Company at Terminus Road, Chichester, West
Sussex PO19 8TX will be set out in the Circular. The purpose of the General
Meeting is to seek approval of Existing Shareholders for the Resolutions in
order to, inter alia, implement the Proposals. The Proposals are conditional
upon the passing of the Fundraising Resolutions.
9. ADMISSION AND RESTORATION OF TRADING ON AIM
Subject to, inter alia, the Existing Shareholders' approval of the
Resolutions, application will be made to the London Stock Exchange for the New
Ordinary Shares (including the Fundraising Shares, the Fee Shares and the Loan
Conversion Shares) to be admitted to trading on AIM. In addition, the Company
intends to request that the current suspension of trading in the Company's
Ordinary Shares on AIM is lifted upon Admission. Assuming the Resolutions
are passed at the General Meeting, it is anticipated that Admission will
become effective and that dealings in the New Ordinary Shares (including the
Fundraising Shares, the Fee Shares and the Loan Conversion Shares) will
commence on AIM at 8.00 a.m. on or around 2 August 2023.
10. RECOMMENDATION
In order for the Fundraising and Admission to proceed, Shareholders will need
to approve the Fundraising Resolutions set out in the Notice of General
Meeting. If the Fundraising Resolutions to be proposed at the General Meeting
are not approved by Shareholders, the Placing Shares, the Retail Offer Shares,
the Subscription Shares and the Loan Conversion Shares will not be able to be
allotted and consequently the Proposals will not proceed and therefore the
Company's performance, financial position and prospects will be adversely
affected. In the absence of availability of any alternative funding solutions,
the Directors consider that it is highly likely that the Company would be
required to appoint an administrator in that instance in order to protect the
interests of creditors. Accordingly, the Directors consider that it is very
important that Shareholders vote in favour of the Resolutions, in order that
the Proposals and Admission can proceed.
The Board considers the Proposals and the Resolutions to be in the best
interests of Shareholders as a whole. Accordingly, the Directors unanimously
recommend that Shareholders vote in favour of the Resolutions as they intend
to do in respect of their own interests in Ordinary Shares of, in aggregate,
163,026,105 Existing Ordinary Shares (representing approximately 22.99 per
cent. of the Existing Ordinary Shares).
11. EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Announcement of the Placing, Subscription and Retail Offer 14 July 2023
Posting of the Circular and Form of Proxy 15 July 2023
Result of Retail Offer announced through an RIS 20 July 2023
Latest time and date for receipt of completed Forms of Proxy 9:30 a.m on 28 July 2023
Latest time and date for receipt of CREST Proxy Instructions for the General 9:30 a.m on 28 July 2023
Meeting
Record time for those Shareholders on the Register of Members entitled to 6:30 p.m on 28 July 2023
attend or vote at the General Meeting
General Meeting 9:30 a.m on 1 August 2023
Capital Reorganisation is effective* after close of business on 1 August 2023
Admission of, and commencement of dealings in, the New Ordinary Shares 8.00 a.m on 2 August 2023
(including the Fundraising Shares, the Fee Shares and the Loan Conversion
Shares)*
New Ordinary Shares (including the Fundraising Shares, the Fee Shares and the 2 August 2023
Loan Conversion Shares) credited to CREST stock accounts*
Despatch of definitive share certificates for the Fundraising Shares, the Fee Within 14 days of Admission
Shares and the Loan Conversion Shares in certificated form*
Note:
If any of the details contained in the timetable above should change, the
revised time and dates will be notified to Shareholders by means of a
Regulatory Information Service announcement. All references to times and dates
in this announcement are to time and dates in London, United Kingdom.
*assuming the Fundraising Resolutions are passed
All capitalised terms used throughout this announcement shall have the
meanings given to such terms in the Definitions section in the Appendix to
this announcement.
Enquiries:
For further information, please contact:
Deltex Medical Group plc 01243 774 837
Nigel Keen, Chairman investorinfo@Deltexmedical.com (mailto:investorinfo@Fitbitmedical.com)
Andy Mears, Chief Executive
Natalie Wettler, Group Finance Director
Allenby Capital Limited - Nominated Adviser & Broker 020 3328 5656
Jeremy Porter / Vivek Bhardwaj (Corporate Finance) info@allenbycapital.com (mailto:info@allenbycapital.com)
Tony Quirke / Stefano Aquilino (Sales & Corporate Broking)
Appendix - Definitions
The following definitions apply throughout this announcement unless the
context requires otherwise:
Admission admission of the New Ordinary Shares (including the Fundraising Shares, Fee
Shares and Loan Conversion Shares) to trading on AIM becoming effective in
accordance with the AIM Rules;
AIM the market of that name operated by the London Stock Exchange;
AIM Rules the AIM Rules for Companies governing the admission to and operation of AIM
published by the London Stock Exchange as amended from time to time;
Allenby Capital Allenby Capital Limited, the Company's Nominated Adviser and Broker;
Amended Articles the Company's new Articles of Association following the amendments proposed to
be approved via Resolution 1, including the amendments to establish the
Deferred Shares and set out the limited rights proposed for the Deferred
Shares;
Articles of Association the articles of association of the Company, as amended from time to time;
Business Day any day on which banks are generally open in London for the transaction of
business other than a Saturday or Sunday or public holiday;
Capital Reorganisation the proposed reorganisation of the share capital of the Company as described
in paragraph 7 above;
Certificated or in certificated form a share or other security which is not in uncertificated form (that is, not in
CREST);
Circular the circular with details of the Proposals including a notice of General
Meeting to be sent to Shareholders on 15 July 2023;
Companies Act the Companies Act 2006, as amended, modified or re-enacted from time to time;
Company or Deltex Medical Deltex Medical Group plc, incorporated in England and Wales with number
03902895 and with its registered office at Terminus Road, Chichester, West
Sussex, PO19 8TX;
Conditions (a) completion of the Capital Reorganisation; (b) the passing of the
Fundraising Resolutions; (c) the Placing and Subscription becoming
unconditional in all respects; (d) Admission becoming effective by 8.00 a.m.
on 2 August 2023 (or such later time and date not being later than 8.00 a.m.
on 16 August 2023 as the Company and Allenby Capital may agree); and (e) the
restoration of trading in the Company's Ordinary Shares on AIM;
Convertible Loan Notes the £1,100,000 unsecured convertible loan notes issued by the Company in
February 2016, as amended;
CREST or CREST System the computer-based system (as defined in the CREST Regulations) operated and
administered by Euroclear enabling securities to be evidenced otherwise than
by certificates and transferred otherwise than by written instruments;
CREST member a person who has been admitted by Euroclear as a system participant (as
defined in the CREST Regulations);
Deferred Shares the Deferred Shares of 0.99 pence each in the capital of the Company as
created by virtue of the Capital Reorganisation;
Directors, Board or Board of Directors the current directors of the Company or the board of directors from time to
time;
EBITDA earnings before interest, taxes, depreciation, and amortisation;
Enlarged Share Capital the ordinary share capital of the Company immediately following Admission;
Euroclear Euroclear UK & International Limited;
Existing Articles the articles of association of the Company currently in force;
Existing Ordinary Shares the 709,057,601 ordinary shares of 1 penny each in issue as at the date of
this document;
Existing Shareholders the holders of Existing Ordinary Shares;
FCA the Financial Conduct Authority of the United Kingdom or any successor body or
bodies carrying out the functions currently carried out by the Financial
Conduct Authority;
Form of Proxy the form of proxy accompanying the Circular for use by Existing Shareholders
at the General Meeting;
FSMA the UK Financial Services and Markets Act 2000, as amended;
Fundraising together the Placing, the Subscription and the Retail Offer;
Fundraising Resolutions each of Resolutions 1, 2, 3, 5 and 6;
Fundraising Shares together the Placing Shares, the Subscription Shares and the Retail Offer
Shares;
General Meeting the general meeting of the Company to be held at the offices of the Company at
Terminus Road, Chichester, West Sussex, PO19 8TX, as set out in the Notice of
General Meeting;
Group the Company and each of its subsidiaries and subsidiary undertakings;
ISIN International Securities Identification Number;
Issue Price 0.2p per Fundraising Share;
Loan Conversion the conditional conversion of £250,000 of the loan outstanding under the
facility made available to the Company by Imperialise Limited on 24 April 2023
and of £100,000 of the loan outstanding under the facility made available to
the Company by Imperialise Limited on 18 September 2021 into Ordinary Shares;
Loan Conversion Shares the 175,000,000 New Ordinary Shares to be allotted and issued pursuant to the
Loan Conversion;
London Stock Exchange London Stock Exchange plc or its successor(s);
MAR the UK version of the EU Market Abuse Regulation (2014/596/EU) (incorporated
into UK law by virtue of the European Union (Withdrawal) Act 2018), as amended
and supplemented from time to time;
New Ordinary Shares the issued and to be issued ordinary shares of 0.01 pence each in the capital
of the Company as created by virtue of the Capital Reorganisation and the
Fundraising Resolutions;
Notice of General Meeting the notice of general meeting set out at the end of the Circular;
Ordinary Shares the ordinary shares in the capital of the Company from time to time;
Overseas Shareholders Shareholders with registered addresses in, or who are citizens, residents or
nationals of, jurisdictions outside the UK;
Placee any person that has conditionally agreed to subscribe for Placing Shares in
the Placing;
Placing the proposed placing by Allenby Capital of the Placing Shares on the terms and
subject to the conditions of the Placing Agreement, including inter alia on
passing of the Fundraising Resolutions and on Admission;
Placing Agreement the conditional agreement dated 14 July 2023 between the Company and Allenby
Capital relating to the Placing;
Placing Shares the issue and placing of 620,500,000 New Ordinary Shares at the Issue Price by
Allenby Capital with institutional and other investors in accordance with the
terms of the Placing;
Proposals the Fundraising, Loan Conversion and the Capital Reorganisation;
Regulatory Information Service or RIS one of the regulatory information services authorised by the FCA to receive,
process and disseminate regulatory information from listed companies;
Registrars Equiniti Limited;
Resolutions the resolutions to be put to the Existing Shareholders at the General Meeting
as detailed in the Notice of General Meeting and Resolution means any of the
Resolutions;
Restricted Jurisdiction(s) the United States, Russia, Australia, Canada, Japan, New Zealand, the Republic
of South Africa and any other jurisdiction where the extension or availability
of the Fundraising would breach any applicable law;
Retail Offer the retail offer to the Company's Shareholders run by REX;
Retail Offer Shares up to 250,000,000 New Ordinary Shares to be issued pursuant to the Retail
Offer;
REX the Peel Hunt LLP Retail Capital Markets REX portal;
REX Retail Platform a platform operated by REX;
Fee Shares the 18,966,477 New Ordinary Shares to be allotted and issued to Imperialise
Limited on Admission in lieu of the Chairman's fees of £33,333 plus employer
national insurance contributions for the year ended 31 December 2022;
SEC the US Securities and Exchange Commission;
Securities Act the US Securities Act of 1933, as amended;
Shareholders the holder(s) of the Ordinary Shares from time to time;
Subscribers the persons entering into the Subscription Agreements;
Subscription the conditional subscription for the Subscription Shares at the Issue Price by
the Subscribers pursuant to the Subscription Agreements;
Subscription Agreements the agreements dated on or around 14 July 2023 between the Company and each
Subscriber pursuant to which each such Subscriber has agreed to subscribe for
Subscription Shares;
Subscription Shares the 212,500,000 New Ordinary Shares to be allotted and issued pursuant to the
Subscription Agreements;
Sterling or pound or £ or penny or pence pounds sterling or pence, the basic units of currency in the UK;
Subsidiary has the meaning given in section 1159 of the Companies Act;
Subsidiary undertaking has the meaning given to it in section 1162 of the Companies Act 2006;
TrueVue monitor CardioQ-ODM+ Oesophageal Doppler Monitor;
Uncertificated or uncertificated form recorded on the relevant register or other record 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;
United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland;
United States or US the United States of America; and
US Persons has the meaning provided in Rule 902(k) of Regulation S under the Securities
Act.
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 1. Nigel Keen
2. Mark Wippell
3. Julian Cazalet
4. Andrew Mears
2 Reason for the notification
a) Position/status 1. Chairman
2. Non-executive Director
3. Non-executive Director
4. Chief Executive Officer
b) Initial notification /Amendment Initial notification
3 Details of the issuer, emission allowance market participant, auction
platform, auctioneer or auction monitor
a) Name Deltex Medical Group Plc
b) LEI 213800XN34P6LI8J6M39
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 Ordinary shares of 1p each in Deltex Medical Group Plc
Identification code
Identification code (ISIN) for Deltex Medical Group Plc ordinary shares:
GB0059337583
b) Nature of the transaction Purchase of shares
c) Price(s) and volume(s) Price(s) Volume(s)
1. 0.20p 1.35,000,000
2. 0.20p 2. 5,000,000
3. 0.20p 3. 5,000,000
4. 0.20p 4. 5,000,000
d) Aggregated information: N/A
- Aggregated volume
- Price
e) Date of the transaction 14 July 2023, to be completed on 2 August 2023
f) Place of the transaction Outside a trading venue
d)
Aggregated information:
- Aggregated volume
- Price
N/A
e)
Date of the transaction
14 July 2023, to be completed on 2 August 2023
f)
Place of the transaction
Outside a trading venue
IMPORTANT NOTICES
Notice to Distributors
Solely for the purposes of the product governance requirements contained
within: (a) EU Directive 2014/65/EU on markets in financial instruments, as
amended and as this is applied in the United Kingdom ("MiFID II"); (b)
Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593
supplementing MiFID II and Regulation (EU) No 600/2014 of the European
Parliament, as they form part of UK law by virtue of the European Union
(Withdrawal) Act 2018, as amended; and (c) local implementing measures
(together, the "MiFID II Product Governance Requirements"), and disclaiming
all and any liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the MiFID II Product Governance
Requirements) may otherwise have with respect thereto, the Ordinary Shares
have been subject to a product approval process, which has determined that
such securities are: (i) compatible with an end target market of retail
investors who do not need a guaranteed income or capital protection and
investors who meet the criteria of professional clients and eligible
counterparties, each as defined in MiFID II; and (ii) eligible for
distribution through all distribution channels as are permitted by MiFID II
(the "Target Market Assessment"). The Ordinary Shares are not appropriate for
a target market of investors whose objectives include no capital loss.
Notwithstanding the Target Market Assessment, distributors should note that:
the price of the Ordinary Shares may decline and investors could lose all or
part of their investment; the Ordinary Shares offer no guaranteed income and
no capital protection; and an investment in the Ordinary Shares is compatible
only with investors who do not need a guaranteed income or capital projection,
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 Fundraise. Furthermore, it is noted that, notwithstanding the
Target Market Assessment, Allenby Capital 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 MiFID II; 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 Ordinary
Shares. Each distributor is responsible for undertaking its own target market
assessment in respect of the shares and determining appropriate distribution
channels.
Forward Looking Statements
This announcement includes statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would", "could" or
"should" or, in each case, their negative or other variations or comparable
terminology. These forward-looking statements include matters that are not
facts. They appear in a number of places throughout this announcement and
include statements regarding the Directors' beliefs or current expectations.
By their nature, forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances. Investors should not
place undue reliance on forward-looking statements, which speak only as of the
date of this announcement.
Notice to overseas persons
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.
This announcement is not for release, publication or distribution, in whole or
in part, directly or indirectly, in or into Australia, Canada, Japan or the
Republic of South Africa or any jurisdiction into which the publication or
distribution would be unlawful. This announcement is for information purposes
only and does not constitute an offer to sell or issue or the solicitation of
an offer to buy or acquire shares in the capital of the Company in
Australia, Canada, Japan, New Zealand, the Republic of South Africa or any
jurisdiction in which such offer or solicitation would be unlawful or require
preparation of any prospectus or other offer documentation or would be
unlawful prior to registration, exemption from registration or qualification
under the securities laws of any such jurisdiction. Persons into whose
possession this announcement comes are required by the Company to inform
themselves about, and to observe, such restrictions.
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, 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.
General
Neither the content of the Company's website (or any other website) nor the
content of any website accessible from hyperlinks on the Company's website (or
any other website) or any previous announcement made by the Company is
incorporated into, or forms part of, this announcement.
Allenby Capital, which is authorised and regulated by the FCA in the United
Kingdom, is acting as Nominated Adviser and Broker to the Company in
connection with the Placing. Allenby Capital will not be responsible to any
person other than the Company for providing the protections afforded to
clients of Allenby Capital or for providing advice to any other person in
connection with the Fundraising or the Retail Offer. Allenby Capital has not
authorised the contents of, or any part of, this announcement, and no
liability whatsoever is accepted by Allenby Capital for the accuracy of any
information or opinions contained in this announcement or for the omission of
any material information, save that nothing shall limit the liability of
Allenby Capital for its own fraud.
ABOUT DELTEX MEDICAL'S TECHNOLOGY
Deltex Medical's TrueVue System uses proprietary haemodynamic monitoring
technology to assist clinicians to improve outcomes for patients as well as
increase throughput and capacity for hospitals.
Deltex Medical has invested over the long term to build a unique body of
peer-reviewed, published evidence from a substantial number of trials carried
out around the world. These studies demonstrate statistically significant
improvements in clinical outcomes providing benefits both to patients and to
the hospital systems by increasing patient throughput and expanding hospital
capacity.
The Group's flagship, world-leading, ultrasound-based oesophageal Doppler
monitoring ("ODM") is supported by 24 randomised control trials conducted on
anaesthetised patients. As a result, the primary application for ODM is
focussed on guiding therapy for patients undergoing elective surgery. The
Group's new, next generation monitor makes the use of the ODM technology more
intuitive and provides augmented data on the status of each patient.
Deltex Medical's engineers and scientists carried out successful research in
conjunction with the UK's National Physical Laboratory ("NPL"), which has
enabled the Group's 'gold standard' ODM technology to be extended and
developed so that it can be used completely non-invasively. This will
significantly expand the application of Deltex Medical's technology to
non-sedated patients. This new technological enhancement, which will be
released on the new next generation monitor, will substantially increase the
addressable market for the Group's haemodynamic monitoring technologies and is
complementary to the long-established ODM evidence base.
Deltex Medical's new non-invasive technology has potential applications for
use in a number of healthcare settings, including:
§ Accident & Emergency for the rapid triage of patients, including the
detection and diagnosis of sepsis;
§ in general wards to help facilitate a real-time, data-driven treatment
regime for patients whose condition might deteriorate rapidly; and
§ in critical care units to allow regular monitoring of patients post-surgery
who are no longer sedated or intubated.
One of the key opportunities for the Group is positioning this new,
non-invasive technology for use throughout the hospital. Deltex Medical's
haemodynamic monitoring technologies provide clinicians with beat-to-beat
real-time information on a patient's circulating blood volume and heart
function. This information is critical to enable clinicians to optimise both
fluid and drug delivery to patients.
Deltex Medical's business model is to drive the recurring revenues associated
with the sale of single-use disposable ODM probes which are used in the
TrueVue System and to complement these revenues with a new incremental revenue
stream to be derived from the Group's new non-invasive technology.
Both the existing single-use ODM probe and the new, non-invasive device will
connect to the same, next generation monitor launched in July 2023. Monitors
are sold or, due to hospitals' often protracted procurement times for capital
items, loaned in order to encourage faster adoption of the Group's technology.
Deltex Medical's customers
The principal users of Deltex Medical's products are currently anaesthetists
working in a hospital's operating theatre and intensivists working in ICUs.
This customer profile will change as the Group's new non-invasive technology
is adopted by the market. In the UK the Group sells directly to the NHS. In
the USA the Group sells directly to a range of hospital systems. The Group
also sells through distributors in more than 40 countries in the European
Union, Asia and the Americas.
Deltex Medical's objective
To see the adoption of Deltex Medical's next generation TrueVue System,
comprising both minimally invasive and non-invasive technologies, as the
standard of care in haemodynamic monitoring for all patients from new-born to
adult, awake or anaesthetised, across all hospital settings globally.
For further information please go to www.deltexmedical.com
(http://www.deltexmedical.com)
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