REG - Deltex Med Grp PLC - Subscription and extension of Debt Facility

Deltex MedicalAnnouncement

08/02/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220208:nRSH9475Aa&default-theme=true

RNS Number : 9475A  Deltex Medical Group PLC  08 February 2022

08 February 2022

 

Deltex Medical Group plc

Subscription to raise approximately £1.4 million and extension of Standby
Debt Facility

 

Deltex Medical Group plc (the "Group", the "Company" or "Deltex Medical")
(AIM: DEMG), the global leader in oesophageal Doppler monitoring, today
announces:

i)    subscription for 111,720,000 new Deltex Medical ordinary shares (the
"Subscription Shares") at a price of 1.25 pence per share (the "Issue Price")
(the "Subscription")

ii)    extension of the Standby Debt Facility previously announced on 20
September 2021

Subscription

The Board has concluded that it is now appropriate to raise a total of
approximately £1.4 million by way of subscription for 111,720,000
Subscription Shares at a price of 1.25 pence per Deltex Medical ordinary share
("Share"). This represents a 9% discount to the closing mid-market Share price
on 07 February 2022.

Certain directors of the Company, namely Nigel Keen, Julian Cazalet, Mark
Wippell, Natalie Wettler and Andy Mears, intend to participate in the
Subscription for, in aggregate, 32,610,400 new Shares at the Issue Price.

 

 Director / PDMR  Current Shares held  Pre-transaction shareholding  Subscription Shares  Post transaction holding  Post transaction %
 Nigel Keen       79,852,821           13.60%                        20,000,000           99,852,821                14.28%
 Julian Cazalet   17,153,971           2.92%                         10,000,000           27,153,971                3.88%
 Mark Wippell     10,237,875           1.74%                         800,000              11,037,875                1.58%
 Andy Mears       5,858,731            1.00%                         800,000              6,658,731                 0.95%
 Natalie Wettler  -                    -                             1,010,400            1,010,400                 0.14%

 

The participation of each of Nigel Keen, Julian Cazalet, Mark Wippell, Natalie
Wettler and Andy Mears in the Subscription constitutes a related party
transaction under Rule 13 of the AIM Rules for Companies. The independent
directors, being Christopher Jones and Tim Irish, having consulted with the
Company's nominated adviser, consider that the terms of the transaction are
fair and reasonable insofar as Deltex Medical's shareholders are concerned.

Admission of the Subscription Shares to trading on AIM ("Admission") is
expected to take place on or around 14 February 2022.

Reasons for the Subscription and use of proceeds

The proceeds from the Subscription will be used: (i) to launch, market and
commercialise the next generation TrueVue monitor as well as a new
non-invasive Doppler probe; (ii) to provide the financial resources required
to support the substantial grant funding already won by the Group to enhance
and advance its haemodynamic monitoring technology; and (iii) for the general
working capital needs of the business.

The next generation TrueVue haemodynamic monitor replaces the current version
which was launched in 2012. This next generation monitor will utilise modern
electronics, benefits from a significantly improved user interface,
incorporates battery power, is light-weight and highly portable, enabling it
to be used in any area within the hospital. The Board believes that these new
and improved features should significantly increase the addressable market for
the Group's technology.

In addition to the next generation TrueVue monitor, the Group has also
developed a new non-invasive Doppler device that can be used on awake
patients. The development of this technology draws upon the substantial body
of published research relating to the Group's minimally-invasive haemodynamic
monitoring device which is already in use in surgery as well as intensive care
units around the world.

The new non-invasive device has been designed and is intended to be sold into
a broad range of hospital departments where the Group is not currently
present, including: Accident & Emergency; pre-surgical assessment;
obstetrics; cardiology and general medical wards.

The Group believes that this new technology, used in conjunction with the
appropriate treatment protocols, will improve patient outcomes, reduce
hospital stays, help increase the efficiency of healthcare workers and deliver
significant savings to health systems. It should also help facilitate the
rapid diagnosis of serious illness in COVID-19 patients and also enable rapid
identification of patients with sepsis.

On 20 December 2021, Deltex Medical disclosed a successful application for the
UK Smart Award by Innovate UK (£0.5 million gross). This Innovate UK Smart
Award relates to the development of the innovative, hand-held, non-invasive
Doppler device (described above) for improved haemodynamic management of
hospitalised patients. During 2021, the Group was also awarded two other
grants by Innovate UK (£0.1 million gross in aggregate) including one to help
with the development of its new, real-time, easy-to-use, non-invasive
haemodynamic monitoring technology working collaboratively with the UK's
National Physics Laboratory.

Financial update and future prospects

As previously disclosed in the pre-close announcement of 11 January 2022,
Group revenues for the year ended 31 December 2021 were £2.3 million (2020:
£2.4 million).  2021 revenues continued to be adversely affected by the
impact of COVID-19 and the resulting significant reduction in elective
surgical procedures globally. Deltex Medical's business experienced
disruptions associated with the pandemic for the entire year unlike trading in
2020 when the business in the first quarter was not so severely affected.
Although the Group's direct business in the USA and the UK has not yet
returned to pre-pandemic levels, the performance of the International division
significantly improved during the year.

On 26 January 2022 the Group announced a US$0.2 million contract win from one
of its distributors in the Americas for the purchase of the current generation
TrueVue monitor. This contract award also provides for on-going contracted
monthly revenues for single-use Deltex probes, which are used with these
devices.

The backlog in elective surgical cases continues to build around the world and
this is increasingly becoming a political issue in many territories. The Board
continues to believe that this backlog represents a key opportunity as the
Group's TrueVue Doppler technology can be used to help minimise patient length
of stay, and associated costs, following elective surgery and hence increase
capacity for hospitals.

Principal risks and uncertainties

A description of the principal risks and uncertainties associated with the
Group and its activities is set out on pages 20 and 21 of Deltex Medical's
Annual Report and Accounts for the financial year ended 31 December 2020. The
Board believes that the description of these principal risks and uncertainties
remains relevant and applicable to the Group at the date of this Announcement.

Extension of Standby Debt Facility

On the 20 September 2021 the Board announced that it had entered into an
agreement with Imperialise Limited, a company controlled by Nigel Keen,
Chairman of Deltex Medical, for a £0.5 million standby loan facility (on
arm's length commercial terms) until 31 December, 2022. During the period of
the loan, the Group could draw down on the facility as and when required.

Imperialise Limited has agreed to extend this debt facility for an additional
year. The facility is repayable in full on or before 31 December 2023.

The interest rate remains unchanged on the facility at 8% per annum, and it is
unsecured.

Nigel Keen is a director of both Imperialise Limited and Deltex Medical, and
accordingly, this transaction constitutes a related party transaction under
Rule 13 of the AIM Rules for Companies. The independent directors, being Andy
Mears, Natalie Wettler, Julian Cazalet, Mark Wippell, Christopher Jones and
Tim Irish, having consulted with the Company's nominated adviser, consider
that the terms of the transaction are fair and reasonable insofar as Deltex
Medical's shareholders are concerned.

 

Commenting on the Subscription, Nigel Keen, Chairman of Deltex Medical said:

"This fund raising enables Deltex Medical to develop and launch the next
generation of its technology, including the new non-invasive TrueVue Doppler
with significantly broader applications throughout hospitals."

"We believe that Deltex Medical will benefit this year from a combination of
the world learning to live with COVID-19 and pressure continuing to build on
health systems to reduce the substantial backlog of elective surgical
procedures."

"The Group's next generation monitor and new, novel non-invasive haemodynamic
monitoring technology should help position Deltex Medical to build market
share as the backlog in elective surgery is tackled around the world."

 

 

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

 Nominated Adviser and Broker                                    0207 614 5900

 Arden Partners plc
 Paul Shackleton                                                  info@arden-partners.com (mailto:info@arden-partners.com)
 Benjamin Onyeama-Christie

 Joint Broker
 Turner Pope Investments (TPI) Ltd                               0203 657 0050
 Andy Thacker                                                     info@turnerpope.com (mailto:info@turnerpope.com)

 James Pope

 

Notes for Editors

Deltex Medical manufactures and markets haemodynamic monitoring technologies
which are primarily used in critical care and general surgical procedures.
Deltex Medical's proprietary oesophageal Doppler monitoring (TrueVue Doppler)
measures blood flow velocity in the central circulation in real time. The
technology generates a low-frequency ultrasound signal which is highly
sensitive to changes in blood flow and measures such changes in 'real time'.
Deltex Medical is the only company in the enhanced haemodynamic monitoring
space to have built a robust and credible evidence base demonstrating both the
clinical and economic benefits of its core technology: TrueVue Doppler. This
technology has been proven in a wide range of clinical trials to reduce
complications suffered by patients after surgery and consequently can save
hospitals money.

Clinicians would like to be able to monitor the haemodynamic status of awake
patients not only in the operating room and intensive care departments.  Our
R&D programmes will provide the capability for Deltex Medical devices to
be used in A&E, including, for example, for the rapid detection of sepsis,
as well as on lower acuity wards or outside the hospital setting.

Deltex Medical is designing the next generation of non-invasive Doppler
ultrasound devices that will be released onto the TrueVue platform and will
accurately measure a non-sedated patient's haemodynamic status anywhere within
the hospital and not just for elective surgical patients.

Group goal

Haemodynamic management is now becoming widely accepted as a vital part of the
anaesthesia protocols for surgical patients, as well as treating ventilated
intensive care patients, including ventilated COVID-19 patients. There is also
a desire to start measuring haemodynamics on awake patients outside of the
operating room or intensive care departments, such as in lower acuity units or
in A&E. Our R&D programmes are targeting these broader applications.
Consequently, the Group's focus is on maximising value from the opportunities
associated with: the COVID-19 pandemic; the elective surgery backlog; the
risks associated with sepsis; awake patients and the higher profile of
haemodynamic monitoring which has arisen from recent consolidation in the
sector.

The Group aims to provide clinicians with a modern, next generation, single
'haemodynamic workstation' platform which offers them a range of technologies
from simple to sophisticated to be deployed according to the patient's
clinical condition as well as the skill and expertise of the user. Doing this
will enable the Group to partner with healthcare providers to support modern
haemodynamic management across the whole hospital.

The Group is currently in the implementation phase of achieving this goal in a
number of territories worldwide, operating directly in the UK and the USA, and
via agreements with approximately 40 distributors overseas.

Notification of transactions by Directors, Persons Discharging Managerial
Responsibilities ("PDMRs") and persons closely associated with them.

 

 1.  Details of the person discharging managerial responsibilities / person closely
     associated
 a)  Name                                                         a)   Nigel Keen

                                                                  b)   Julian Cazalet

                                                                  c)   Mark Wippell

                                                                  d)   Andy Mears

                                                                  e)   Natalie Wettler
 2.  Reason for the Notification
 a)  Position/status                                              a)   Non-Executive Director

                                                                  b)   Non-Executive Director

                                                                  c)   Non-Executive Director

                                                                  d)   CEO

                                                                  e)   Finance Director
 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 1 p each
     Identification code                                          GB0059337583
 b)  Nature of the Transaction                                    Subscription for new shares
 c)  Price(s) and volume(s)                                       Price(s)      Volume(s)
                                                                  a)   1.25p    20,000,000
                                                                  b)   1.25p    10,000,000
                                                                  c)   1.25p    800,000
                                                                  d)   1.25p    800,000
                                                                  e)   1.25p    1,010,400
 d)  Aggregated information                                       n/a - single transaction
 e)  Date of the transaction                                      08 February 2022
 f)  Place of the transaction                                     London Stock Exchange, AIM Market (XLON)

d)

Aggregated information

n/a - single transaction

e)

Date of the transaction

08 February 2022

f)

Place of the transaction

London Stock Exchange, AIM Market (XLON)

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  IOEUBUWRUOUURAR