REG - Eden Research plc - Placing and Retail Offer

Eden ResearchAnnouncement

28/07/2023 17:00

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RNS Number : 6231H  Eden Research plc  28 July 2023

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28 July 2023

 

Eden Research Plc

("Eden" or "Company")

 

Proposed Firm Capital Raising of £1.1 million, Minimum Conditional Capital
Raising of £7.9 million & Retail Offer to raise up £0.5 million

 

Eden Research plc (AIM: EDEN), the AIM-quoted company that develops and
supplies breakthrough biopesticide products and natural microencapsulation
technologies to the global crop protection, animal health and consumer
products industries, today announces that it has raised £1.1 million (before
expenses) through a firm placing and subscription of new Ordinary Shares
("Firm Capital Raising") and has conditionally raised a minimum of £7.9
million (before expenses) by way of a Placing of new Ordinary Shares
("Conditional Capital Raising").  The Conditional Capital Raising is subject
to the conditions set out below, including receipt of EIS Advance Assurance
from HMRC and a Reduction of Capital (the "Conditions"). The Directors may
increase the Conditional Capital Raising to a maximum of £9.4 million prior
to Second Admission.

 

The Firm Capital Raising and the Conditional Capital Raising (together the
"Capital Raising") will be at the Issue Price of 6.5 pence per share (the
"Issue Price") to certain institutional and other investors. Furthermore, to
enable other Shareholders not able to participate in the Capital Raising an
opportunity to subscribe for additional Ordinary Shares, the Company is
proposing to raise up to an additional £0.5 million (before expenses) by way
of a retail offer to its existing shareholders via the Bookbuild Platform (the
"Retail Offer") of up to 7,692,308 new Ordinary Shares at the Issue Price.

Eden is currently the only UK-quoted company focused on biopesticides for
sustainable agriculture and is well positioned to capitalise on the rapidly
growing biopesticides market, which is projected to be worth over £11 billion
by 2027. The Company expects to apply the net proceeds of the Firm Capital
Raising and any proceeds from the Retail Offer principally to fund materials
to build up stocks for its new seed treatment. Subject to the satisfaction of
the Conditions, the Conditional Capital Raising will be used to advance the
development, registration and commercialisation of new key product categories,
including new insecticide formulations and seed treatments.

Transaction Highlights

·      Firm Placing and Firm Subscription of 16,923,077 new Ordinary
Shares at the Issue Price with new and existing investors to raise £1.1
million (before expenses), comprised of a Firm Placing of 13,945,076 ordinary
shares and a Firm subscription for 2,978,001 new Ordinary Shares by Sipcam
Oxon S.p.A. and certain Directors (intend to subscribe) at the Issue Price.

·      Conditional Capital Raising of a minimum of 121,538,462 new
Ordinary Shares at the Issue Price with new and existing investors to raise
£7.9 million (before expenses) with potential to raise up to an additional
£1.5 million prior to Second Admission.

·      Retail Offer at the Issue Price to raise up to an additional
£0.5 million (before expenses)

·      The Directors intend to use the net proceeds from the Firm
Capital Raise and any proceeds from the Retail Offer for the following
purposes:

o  Working capital to fund stock purchase for the Company's new seed
treatment product

o  Territory expansion (e.g. India, LATAM, SEA) for Mevalone and Cedroz

o  Label expansion through lab screening, pot and field trials, formulation
development etc for the Company's new seed treatment

o  Expand commercial team with commercial director and market development
/Product Manager

The Directors intend to use the net proceeds from the Conditional Capital
Raise for the following purposes:

o  Additional seed treatment label expansions

o  Insecticide label expansions

o  New product development

o  US based team

The Company will shortly be posting a Notice of General Meeting and an
accompanying circular (the "Circular") to existing shareholders following this
announcement. All relevant documents will be available to download at
https://www.edenresearch.com/ (https://www.edenresearch.com/) .

 

 

Sean Smith, Chief Executive Officer of Eden, said:

"Just over three years ago, with the support of a strong group of new and
existing investors, Eden successfully refinanced the Company which facilitated
the building of a highly effective team capable of accelerating the pace of
innovation and commercial progress.  Subsequently, we have demonstrated the
progress that can be made when resourced adequately to support advancement and
growth.  There is no better example of this than the recent announcement of
our new seed treatment product, Ecovelex, which was developed in close
collaboration with Corteva Agriscience. Ecovelex represents not only an
entirely new category of products for Eden, but it demonstrates what a
focussed, experienced and motivated team can achieve in a relatively short
period of time.  Ecovelex was invented by Eden's team working in our
facilities just south of Oxford.

 

Today, with the encouragement of a good number of new and existing investors,
we are pleased to take the next step along our journey, with an accelerated
pace and purposeful stride.  With the support of investors, we will be able
to fulfil an order that represents an opportunity to jump-start the
commercialisation of a new product.  Moreover, in response to strong investor
interest, we will be providing the Company with the financial strength to grow
our addressable market and business overall.

 

As I said three years ago, the outlook for the biopesticides market remains
undoubtedly positive, with a clear, growing demand from a consumer market for
sustainably grown produce and a notable shift towards greener farming
practices. Eden's biopesticide solutions combine high levels of efficacy that
are comparable to synthetic pesticides and are aligned with the direction of
regulatory travel, which has seen restrictions and, in some cases, the removal
of conventional products from the market, such as we have seen in the bird
repellent seed treatment market, the target for Ecovelex."

 

 

The information contained within this announcement (the "Announcement") is
deemed by the Company to constitute inside information as stipulated under the
Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this
Announcement via Regulatory Information Service, this inside information is
now considered to be in the public domain.

 

For further information contact:

 Eden Research plc                                              www.edenresearch.com (http://www.edenresearch.com)
 Sean Smith                                                     01285 359 555

 Alex Abrey

 Cenkos Securities (Nominated advisor and broker)
 Giles Balleny / Max Gould (corporate finance)                  020 7397 8900

Michael Johnson / Dale Bellis / Tamar Cranford-Smith (sales)

 Hawthorn Advisors (Financial PR)
 Simon Woods                                                    eden@hawthornadvisors.com (mailto:eden@hawthornadvisors.com)

Felix Meston

 

 

 

1.     Introduction

On 28 July 2023, the Company announced a proposed Fundraising, pursuant to
which it proposes to raise, subject to certain conditions up to £11.0 million
(before expenses) by (i) the Firm Capital Raising of £1.1 million at the
Issue Price with certain institutional and other investors, including Sipcam;
(ii) the Conditional Capital Raising of a minimum £7.9 million at the Issue
Price to certain institutional investors with the potential to increase the
Conditional Capital Raise by up to £1.5 million; and (iii) up to
approximately £0.5 million (before expenses) by way of a Retail Offer made to
existing Shareholders of up to 7,692,308 new Ordinary Shares at the Issue
Price.

The net proceeds of the Firm Capital Raising and any proceeds of the Retail
Offer will be used principally to fund materials to build up inventory for the
new seed treatment.  Subject to the satisfaction of the Conditions, the
Conditional Capital Raising will be used to advance the development,
registration and commercialisation of new key product categories, including
new insecticide formulations and seed treatments, as well as to provide
additional working capital for the Group associated with the new development
areas, as described in more detail in paragraph 4 of the Circular.

The Conditional Capital Raising is conditional (amongst other things) upon (i)
the approval of the Resolutions at the General Meeting; (ii) the Advanced
Assurance being obtained from HMRC; (iii) the Capital Reduction becoming
effective; and (iv) Second Admission.

The Issue Price equates to a discount of 13.3 per cent. to the closing middle
market price of 7.5 pence per Ordinary Share on 27 July 2023 (being the last
Business Day before announcement of the Fundraising).

 

In addition to the Fundraising, the Company is proposing to carry out a
capital reduction through the cancellation of the Company's share premium
account. This would have the effect of creating distributable reserves, which
would be used to eliminate any accumulated deficit on the Company's profit and
loss account and to the extent that the balance arising upon completion of the
proposed reduction exceeds such deficit, to create distributable reserves.

 

The background to and reasons for the Capital Reduction are set out in
paragraph 3 of the Circular. The Capital Reduction is conditional upon,
amongst other things, the approval of the Court and of the Shareholders at the
General Meeting.

2.      Background and rationale for the Placing and Retail Offer

 

The Company's vision is for the Group to become the leader in sustainable
bioactive products and the Board believes that the Group is well positioned to
capitalise on the global shift towards more environmentally friendly methods
of crop protection.  The Company is currently the only UK quoted company
focused on biopesticides for sustainable agriculture. The Group develops and
supplies innovative biopesticide products to the global crop protection
market, using the Company's patented microencapsulation technology,
Sustaine®.  Sustaine microcapsules are naturally sourced, plastic-free,
biodegradable micro-spheres derived from yeast extract.  Importantly, the
Sustaine microencapsulation technology enables the technical viability of
naturally occurring terpenes for use in commercial crop protection. The
Company's current products include biofungicide, Mevalone; bionematicide,
Cedroz; and bird repellent seed treatment, Ecovelex™.

The Group's presence grew in 2020-23 through new authorisations for both
Cedroz and Mevalone, including in the USA in September 2022 and in Poland and
New Zealand in 2023. The Directors anticipate further approvals in Europe and
further abroad in 2023, with various submissions pending including in Brazil,
South Africa, Chile and Argentina.  The Directors expect the UK and a range
of other Central EU countries to approve Mevalone in 2023.

The Company is pursuing the Fundraising to continue to drive commercial
progress on the back of recent approvals and expected further overseas
approvals; to expand the Company's product portfolio; and to commercialise the
first seed treatment product.

 

Market Opportunity for Biopesticides

 

While the use of effective pesticides has been fundamental to the farming
revolution over the last 100 years, governments and consumers have
increasingly begun to acknowledge the risk to the environment and human health
posed by some conventional pesticides. This has led to the banning or
restriction (especially in Europe) of some common pesticides such as
Neonicotinoids and Chlorothalonil.

 

This has subsequently increased the use of biopesticides and, as a result, the
biopesticides market is growing at a compound annual growth rate (CAGR) of
approximately 15% per annum and is projected to be worth more than $11 billion
by 2027.  The global seed treatment market is projected to be worth more than
$12.5 billion by 2027.

 

The Group's biopesticide solutions solve a number of the issues of
conventional pesticides. Using plant derived active ingredients that are
generally accepted as safe by regulators around the world means that the
products are not subject to residue limits or long pre-harvest intervals, and
can be used to treat post-harvest storage diseases on some produce, subject to
regulatory approval.

 

In addition, the Group's yeast based Sustaine encapsulation technology allows
the Group's products and conventional pesticides to be used without the
addition of micro-plastics. There are currently global concerns regarding the
volume of micro-plastics in the environment and the impact their presence has
on human health and wildlife. In response, there have been new regulations
proposed which could restrict the intentional addition of plastic to crop
protection and health products, which has created a need for the major
pesticide producers to actively look for alternative approaches to the
encapsulation of existing chemical treatments. In addition, the time and cost
of bringing new agrochemical products to market has increased to around 10 to
12 years and approximately $300 million respectively.

 

From a broader perspective, concerns regarding the impact on human health of
some pesticides has increased the consumer desire for sustainable and organic
products and encouraged regulators to put stricter controls around spraying of
crops and the residue limits that are applied to farm produce.

 

Eden's Current Products and Technology

 

Mevalone® - Fungicide Product

 

Eden's first biopesticide, Mevalone, is a fungicide used in the prevention and
treatment of botrytis in table and wine grapes, as well as the control of
powdery mildew on grapevines and, in certain territories, the treatment of
botrytis on a range of crops ranging from kiwis to onions.

 

In the last 12 months the Company has received regulatory approvals for use on
a range of new crops in countries such as Italy, the USA (now approved in 17
states), New Zealand and Poland. Approval in the state of California, a key
market for Mevalone, is expected in time for the 2024 growing season.  Cedroz
has already received approval in California.

The Company recently signed a distribution agreement with large agriscience
business, Corteva, which allows Corteva to market, distribute and sell the
Group's fungicide product, Mevalone®, in France on an exclusive basis. There
are existing distribution agreements for Mevalone with Sipcam and Sumi Agro
for other major territories, and the Company recently announced Anasac
Colombia Ltd as its exclusive distributor of Mevalone in Colombia.

Given the recent flow of regulatory approvals and the distribution agreements
now in place, the Directors believe the Group is well placed to begin
delivering material sales of the product.  Proceeds from the Fundraising will
be deployed to further commercialise this product for new uses and for as-yet
untapped markets such as India and S.E Asia.

Cedrozä - Nematicide Product

In addition to Mevalone, Eden has developed a nematicide product which is used
to tackle nematode infestations which can damage crops and affect yield.
Nematodes are parasites that affect a wide range of crops grown in open fields
and in greenhouses.

 

In 2016, Eden signed an exclusive distribution agreement with Eastman Chemical
for the nematicide product which has since been branded Cedroz. Eastman
acquired the rights to register and sell Cedroz in 29 countries.  Sales of
Cedroz began in the EU in 2020.  Cedroz is approved in South and Central EU
on a wide range of high value crops. In September 2022, Cedroz™ received
approval for use in various states in the USA, including Florida and
California. Further submissions for approvals in various additional key
markets around the world have been made.

 

Given recent progress and approvals, the Directors expect a return to sales
growth for Cedroz™ in 2023.

 

Ecovelex™ - Bird repellent seed treatment

 

Ecovelex™ is a biological bird repellent seed treatment initially for use on
maize. Subject to regulatory approvals, Ecovelex™ represents a new entrant
into the seed treatment market and is intended to replace conventional
chemicals banned in the EU and UK. It was developed to tackle crop destruction
caused by birds - a major cause of losses in maize and other crops.
Ecovelex™ works by affecting the bird's olfactory system, creating an
unpleasant taste or odour that repels the bird, leaving the seeds safely
intact and the bird unaffected and free to find alternative food sources. The
product is based on plant-derived chemistry and formulated using the Group's
Sustaine microencapsulation system, supporting farmers as they strive to meet
consumer demands for more sustainable agriculture.

 

Ecovelex™ has been developed over three years through a collaboration with
Corteva, for which a development agreement was signed in May 2021. Field
trials undertaken by both parties were successful and demonstrated efficacy.
An application for regulatory authorization has been submitted to the EU and
UK regulatory authorities, with the approval process expected to take between
18 and 24 months, and therefore the possibility of sales in time for the 2024
growing season, subject to emergency use authorisations. Initial markets
targeted are the EU plus the UK.

 

It is expected that the product will be commercialised in additional regions
and further developed for use on additional crops in due course and part of
the proceeds from the Fundraising will be utilised to progress these aims.

 

Sustaine® - Microencapsulation Technology

 

The Group proposes to use part of the proceeds from the Conditional Placing to
continue actively developing formulations with traditional chemical products
using its Sustaine microencapsulation technology.

 

By 2025 in the EU, pesticides containing synthetic polymer microplastics are
likely to be severely restricted or banned entirely and removed from the
market. The Directors believe that the only acceptable alternative is the
substitution with biodegradable formulations. Reformulated products will
likely need to be evaluated and registered within the five-year transition
period.

 

The Group has developed a natural formulation technology, Sustaine®, using
particles derived from natural yeast cells. The technology was originally
developed as a drug delivery method for human health applications before the
Group adapted it for use in the encapsulation of pesticides. By creating a
stabilised aqueous emulsion, Sustaine® enables the formulation of pesticides
using a number of terpene-based active ingredients which would not be suitable
without being encapsulated. The encapsulation provides for the sustained
release of these ingredients when in contact with water slowing or stopping
release in dry conditions, enabling their safe, more efficient use. The
benefit of Sustaine® is that it is cost effective, useful for a wide range of
active ingredients, plastic-free, high capacity, robust, sustainable and
facilitates reduced phytotoxicity.

Sustaine® is a proven, commercially-used solution to the microplastics
problem in formulations requiring encapsulation. The Group currently has a
number of projects underway where it is testing the compatibility of
Sustaine® with third-party active ingredients to determine whether benefits
such as formulation stability, dose reduction or resistance management could
be achieved. The regulatory restriction of microplastics used as components of
crop protection and many other products contributes significantly to the
opportunity for Eden to deploy its Sustaine® technology on a very large
scale.

3.      Background and rationale for the Capital Reduction

The Company had accumulated losses of £43.3 million and £39.3 million
standing to the credit of its share premium account shown by its audited
accounts for the period to 31 December 2022.

The Company's share premium account will be increased by up to approximately
£1,353,846 on the issue of the Firm Shares and the Retail Offer Shares,
assuming an aggregate maximum of £1,600,000 raised following First Admission.

It is proposed to cancel the Company's share premium account which would have
the effect of leaving it with distributable reserves of an estimated £0.5
million to £1.0 million, depending on the outcome of the Retail Offer.

Whilst the Board and management remain focussed on the continued execution of
the Company's stated growth strategy as the primary means of delivering
shareholder value in the near term and has no current intention of declaring
dividends, the proposed Capital Reduction would provide greater scope to do so
in the future if the Board determined that the declaration of dividends were
appropriate.

In addition, the Capital Reduction would provide the Board with the option,
should it so wish, and should it be appropriate to do so, of purchasing the
Company's own Ordinary Shares pursuant to the power granted at the Company's
annual general meeting on 29 June 2023, which requires sufficient
distributable reserves to do so.

4.      Use of proceeds

The Directors intend to use the net proceeds from the Firm Capital Raising and
Retail Offer of approximately £1.35 million and net proceeds of the
Conditional Capital Raising, assuming full take up, of approximately £8.8
million for the following purposes:

 

Firm Capital Raising and Retail Offer:

·      c. £0.5 million for the launch of the new seed treatment and
label expansion;

·      c. £0.2 million to expand the Group's commercial team; and

·      c. £0.3 million to expand territories for Mevalone and Cedroz
products.

 

Conditional Capital Raising:

·      c. £2.5 million for the further development of the seed
treatment product and additional label expansions;

·      c. £2.5 million for insecticide label expansion into new
territories;

·      c. £2.5 million for new product development;

·      c. £0.5 million to expand the Group's commercial team; and

·      c. £0.5 to 1.5 million for general working capital

 

There can be no certainty that the Conditions will be satisfied and the
Conditional Shares will be issued.  If that is the case, the proceeds of the
Conditional Capital Raising will not be received.

5.      Current Trading and Prospects

The first half of 2023 has seen a modest increase in product sales. Though it
is relatively early in the season to know with any certainty, early
indications from southern Europe, in particular, are that the sales of
Mevalone are developing well.  Sales of Cedroz have also shown a strong
return to growth in the first half of the year.

The Company also believes that there is a reasonable opportunity to gain
emergency authorisations for Ecovelex, and if this is granted it is possible
that product sales revenue overall may exceed the current forecast, although
it is, of course, too early to say at this stage.

In 2024, the Company expects to see further, strong product sales growth off
the back of approvals for both Mevalone and Cedroz in the US and Central
Europe, as well as label extensions for Mevalone in various countries. Sales
in the US for Mevalone are, however, materially influenced by the timing of
receipt of the approval in California, which is currently expected before the
end of 2023.

In addition and subject to the receipt of regulatory clearance, the Company
expects sales of Ecovelex to contribute significantly to the top line in 2024.

Subject to successful field trials undertaken by several interested parties,
the Company expects to move into commercial negotiations for its insecticide
product towards the end of 2023 and into early 2024. It is currently expected
that the insecticide will be ready for sale in 2024/25 in the US and 2025/6 in
the EU, subject to regulatory timing and approvals.

6.      Related parties' participation

Directors' participation in the Firm Capital Raising

As part of the Firm Capital Raising, all of the Directors have subscribed
(either personally or through a nominee) for an aggregate of 2,398,077 Firm
Shares at the Issue Price. Details of the Firm Shares for which the Directors
have subscribed (either personally or through a nominee) are set out below:

 

 Name                  Title     Number of existing Ordinary Shares#  Number of Firm Shares subscribed for#  Value of Firm Shares to be subscribed for#  Resulting shareholding following subscription
 Lykele van der Broek  Chairman  929,500                              692,308                                 £45,000.02                                 1,621,808
 Sean Smith            CEO       731,039                              461,538                                 £29,999.97                                 1,192,577
 Alex Abrey            CFO       1,620,346                            153,846                                 £9,999.99                                  1,774,192
 Robin Cridland        NED       130,167                              615,385                                 £40,000.03                                 745,552
 Richard Horsman       NED       0                                    475,000                                 £30,875.00                                 475,000

 

# The number of Ordinary Shares presented in this table as being held or
subscribed for by Directors refers to the number of Ordinary Shares held or
subscribed for by them either personally or through a nominee.

The participation by the Directors referred to above in the Firm Capital
Raising is classified as a related party transaction for the purposes of the
AIM Rules. As all of the Directors are participating in the Firm Capital
Raising, Cenkos Securities confirms that it considers that the terms of the
transaction are fair and reasonable insofar as the Company's Shareholders are
concerned.

7.      Details of the Placings

The Company has raised approximately £1.1 million before expenses by the
issue of the Firm Placing Shares at the Issue Price to certain Shareholders
and new investors. The Firm Placing Shares will, when issued, rank pari passu
with the Existing Ordinary Shares.

 

Institutional and other investors have conditionally agreed to subscribe for
the Firm Placing Shares at the Issue Price. The Firm Placing has not been
underwritten. The issue of the Firm Placing Shares is conditional, inter alia,
upon First Admission becoming effective on the First Admission Date (or such
later date as the Company and Cenkos Securities may agree, being not later
than the First Admission Long Stop Date).

 

The Placing of the Conditional Placing Shares is conditional, inter alia, on
(i) the approval of the Resolutions at the General Meeting, (ii) the Advanced
Assurance being obtained from HMRC, (iii) the Capital Reduction becoming
effective and (iv) Second Admission. It is expected that Second Admission will
occur on the third Business Day from the Conditional Placing becoming
unconditional in all respects (save for Second Admission), and in any event
not later than the Second Admission Long Stop Date. The Conditional Placing
has not been underwritten.

 

In the event that the Conditions have not been fulfilled prior to the Second
Admission Long Stop Date (or at such time as HMRC has informed the Company the
Advanced Assurance will not be obtained), then the Conditional Placing will
not complete and the funds from the Conditional Capital Raising will not be
received.

 

It should be noted that First Admission is not conditional upon Second
Admission. However, Second Admission is conditional on First Admission.

 

The Directors believe that, following the Capital Reduction, the Conditional
Placing Shares to be issued pursuant to the Conditional Placing will meet the
requirements of section 173 ITA for the purposes of the EIS and the Company
will be a Qualifying Holding and the Conditional Placing Shares will be
eligible shares for the purposes of investment by VCTs.

 

Under the terms of the Placing Agreement, Cenkos Securities has agreed to use
its reasonable endeavours to procure subscribers for the Placing Shares at the
Issue Price. The Placing Agreement contains certain warranties and indemnities
from the Company in favour of Cenkos Securities.

 

Under the Placing Agreement, the Company has agreed to pay to Cenkos
Securities a fixed sum and commissions based on the aggregate value of the
Fundraising, and the costs and expenses incurred by it in relation to the
Fundraising.

 

The Placing Agreement contains customary warranties given by the Company in
favour of Cenkos Securities in relation to, amongst other things, the accuracy
of the information in this Document and other matters relating to the Group
and its business.  In addition, the Company has agreed to indemnify Cenkos
Securities (and their respective affiliates) in relation to certain
liabilities which they may incur in respect of the Fundraising.

 

Cenkos Securities has the right to terminate the Placing Agreement in certain
circumstances prior to First Admissions and in respect only of the Conditional
Capital Raising (but not the Firm Capital Raising or the Retail Offer) prior
to Second Admission, in particular, in the event of breach of the warranties,
the occurrence of a material adverse change in circumstances material to the
Fundraising, or if the Placing Agreement does not become unconditional.

 

8.      Details of the Firm Subscription

In addition, Eden has entered into a conditional Subscription Agreement with
Sipcam, one of its commercial partners, pursuant to which Sipcam will
subscribe for 1,670,308 Firm Subscription Shares conditional on First
Admission.

 

Please see paragraph 6 above for details of the Directors' participation in
the Firm Capital Raising.

 

The Issue Price of 6.5 pence per share equates to a discount of 13.3 per cent.
to the closing price of 7.5 pence on 27 July 2023, the latest Business Day
prior to the announcement of the Fundraising.

9.      The Retail Offer

The Company values its Shareholder base and believes that it is appropriate to
provide eligible retail Shareholders in the United Kingdom the opportunity to
participate in the Retail Offer. The Retail Offer will allow retail
Shareholders to participate in the Fundraising by subscribing for Retail
Shares at the Issue Price.

 

Eligible retail Shareholders can contact their intermediary (normally a
broker, investment platform or wealth manager) to participate in the Retail
Offer. In order to participate in the Retail Offer, each intermediary must be
on-boarded onto the BookBuild Platform, have an active trading account with
Cenkos Securities (who is acting as the Retail Offer Coordinator) and have
been approved by the Retail Offer Coordinator as an intermediary in respect
the Retail Offer, and agree to the final terms and the Retail Offer terms and
conditions, which regulate the conduct of the Retail Offer on market standard
terms and provide for the payment of commission to any intermediary that
elects to receive a commission and/or fee (to the extent permitted by the FCA
Handbook Rules) from the Retail Offer Coordinator (on behalf of the Company).

Any expenses incurred by any intermediary are for its own account. Eligible
retail Shareholders who wish to participate in the Retail Offer should confirm
separately with any intermediary whether there are any commissions, fees or
expenses that will be applied by such intermediary in connection with any
application made through that intermediary pursuant to the Retail Offer.

The Retail Offer will be open to eligible retail Shareholders in the United
Kingdom at 5.00 p.m. on 28 July 2023 on the following website:
https://www.bookbuild.live/deals/VZ7ZE7/authorised-intermediaries. The Retail
Offer is expected to close by no later than 10.00 a.m. on 2 August 2023.
Eligible retail Shareholders should note that financial intermediaries may
have earlier closing times. The Retail Offer may close early if it is
oversubscribed.

To be eligible to participate in the Retail Offer, applicants must meet the
following criteria before they can submit an order for Retail Shares: (i) be a
customer of one of the participating intermediaries listed on the above
website; (ii) be resident in the United Kingdom; and (iii) be a shareholder in
the Company  (which may include individuals aged 18 years or over, companies
and other bodies corporate, partnerships, trusts, associations and other
unincorporated organisations and includes persons who hold their Ordinary
Shares directly or indirectly through a participating intermediary).

The Company reserves the right to scale back any order at its discretion. The
Company reserves the right to reject any application under the Retail Offer
without giving any reason for such rejection.

It is vital to note that once an application for Retail Offer Shares has been
made and accepted via an intermediary, it cannot be withdrawn.

The Retail Offer is an offer to subscribe for transferable securities, the
terms of which ensure that the Company is exempt from the requirement to issue
a prospectus under Regulation (EU) 2017/1129 as it forms part of UK law by
virtue of the European Union (Withdrawal) Act 2018. The aggregate total
consideration for the Retail Offer will not exceed £500,000 and therefore the
exemption from the requirement to publish a prospectus, set out in section
86(1) FSMA, will apply.

The Retail Shares are not being offered generally in the UK or elsewhere. It
is expected that the proceeds of the Retail Offer due to the Company will be
received by it soon after Admission.

The Retail Announcement was made on 28 July 2023 and contains further
information on how investors can participate in the Retail Offer.

 

The Retail Offer remains conditional on, inter alia:

 

·      the Firm Placing being or becoming wholly unconditional;

·      Admission of the New Ordinary Shares becoming effective by no
later than 8.00 a.m. on 3 August 2023 or such later time and/or date as
Cenkos Securities and the Company may agree.

The Retail 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
Existing Ordinary Shares, including the right to receive all dividends and
other distributions declared, made or paid after the date of their issue.

Application will be made to the London Stock Exchange for Admission of the
Retail Shares to trading on AIM. It is expected that Admission will occur and
that dealings will commence at 8.00 a.m. on 3 August 2023, at which time it is
also expected that the Retail Shares will be enabled for settlement in CREST.

 

If you are in any doubt as to what action you should take, you should
immediately seek your own personal financial advice from your stockbroker,
bank manager, solicitor, accountant or other independent professional adviser
duly authorised under the Financial Services and Markets Act 2000 (as amended)
if you are resident in the United Kingdom or, if not, from another
appropriately authorised independent financial adviser.

10.   The Capital Reduction

Under the Act, with the sanction of a resolution of the Shareholders and the
confirmation of the Court, the Company may reduce or cancel its share premium
account.

In seeking this approval, the Court will need to be satisfied that the
interests of the Company's creditors will not be prejudiced as a result of the
Capital Reduction. The Court may require the Company to put in place
protection for the benefit of the Company's creditors at the date of the Court
application. The Board anticipates that the Company will provide such
protection as so required.

The Board reserves the right to abandon or to discontinue (in whole or in
part) any application to the Court in the event that the Board considers that
the terms on which the Capital Reduction would be (or would be likely to be)
confirmed by the Court would not be in the best interests of the Company
and/or the Shareholders as a whole. The Directors will, prior to the making of
any application to the Court for the approval of the Capital Reduction,
undertake a careful review of the Company's liabilities (including contingent
liabilities) and consider the Company's ability to satisfy the Court that, as
at the date (if any) on which the Court Order relating to the Capital
Reduction and the statement of capital in respect of the Capital Reduction
have both been registered by the Registrar of Companies at Companies House and
the Capital Reduction therefore becomes effective, the Company's creditors
will be sufficiently protected.

11.   General Meeting

 

The Directors do not currently have authority to allot the Conditional Shares
and, accordingly, the Board is seeking the approval of Shareholders to allot
the Conditional Shares at the General Meeting.

A notice convening the General Meeting, which is to be held at the offices of
Milton Park Innovation Centre, 99 Park Drive, Milton Park, Oxfordshire, OX14
4RY at 9:00 a.m. on 17 August 2023, is set out at the end of the Circular. At
the General Meeting, the following Resolutions will be proposed:

·        Resolution 1, which is an ordinary resolution, to authorise
the Directors to allot relevant securities for cash up to an aggregate nominal
amount of £1,446,153.85, being equal to 144,615,385 Conditional Shares;

·        Resolution 2, which is conditional on the passing of
Resolution 1 and is a special resolution, to authorise the Directors to allot
144,615,385 Conditional Shares on a non-pre-emptive basis; and

·        Resolution 3, which is conditional on the passing of
Resolution 1 and Resolution 2 and is a special resolution, to authorise the
directors, subject to approval from the Court, to cancel the share premium
account of the Company.

The authorities to be granted pursuant to Resolutions 1 and Resolution 2 will
expire on whichever is the earlier of (a) the conclusion of the next Annual
General Meeting of the Company; and (b) the date falling six months from the
date of the passing of the Resolutions (unless renewed, varied or revoked by
the Company prior to or on that date) and shall be in addition to the
Directors' authorities to allot relevant securities and dis-apply statutory
pre-emption rights granted at the Company's Annual General Meeting held on 29
June 2023.

For the purposes of section 571(6)(c) of the Act, the Directors determined the
Issue Price after consideration of applicable market and other considerations
and having taken appropriate professional advice.

Shareholders will find instructions within the Circular on how to complete a
Form of Proxy for use in connection with the General Meeting. The Form of
Proxy should be completed and returned in accordance with the instructions
thereon so as to be received by Link Group, PXS 1, Central Square, 29
Wellington Street, Leeds, LS1 4DL, as soon as possible and in any event not
later than 48 hours (excluding any part of a day that is not a working day)
before the time of the General Meeting. Completion and return of the Form of
Proxy will not prevent a Shareholder from attending and voting at the General
Meeting.

12.   Recommendation

The Directors believe the Capital Reduction, the Fundraising and the passing
of the Resolutions to be in the best interests of the Company and its
Shareholders as a whole. Accordingly, the Directors unanimously recommend
Shareholders to vote in favour of the Resolutions as they intend so to do in
respect of their beneficial shareholdings amounting to 3,411,052 Ordinary
Shares, representing approximately 0.9 per cent. of the existing issued
ordinary share capital of the Company.

 

 

 

PLACINGS AND SUBSCRIPTIONS STATISTICS

Issue Price (per
share)
6.5 pence

Number of Existing Ordinary
Shares
381,108,607

Total number of Firm Placing Shares and Firm Subscription
Shares
16,923,077

Gross proceeds of the Firm Capital Raising
 
£1.1 million

Minimum number of Conditional
Shares
121,538,462

Maximum number of Conditional
Shares
161,538,462

Minimum gross proceeds of the Conditional Capital Raising
 
£7.9 million

Maximum number of Firm Shares and Conditional Shares as a percentage of the
Enlarged Share Capital*        31.5%

Maximum gross proceeds of the Capital Raising
 
up to £10.5 million

 

RETAIL OFFER STATISTICS

Issue Price (per
share)
6.5 pence

Number of Retail Offer
Shares
up to 7,692,308

Gross proceeds of the Retail
Offer*
up to

£0.5 million

Enlarged Share Capital following the
Fundraising*
up to 567,262,454

Retail Offer Shares as a percentage of the Enlarged Share
Capital*
up to 1.4%

* on the assumption that the maximum number of New Ordinary Shares are issued
pursuant to the Capital Raising and that the Retail Offer is fully subscribed

7

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

                                                                                                                                2023
 Announcement of the Placings                                                   28 July

 Announcement of the Retail Offer                                               28 July

 Announcement of the results of the Retail Offer                                2 August

 First Admission effective and dealings in the First Placing Shares and Retail  8.00 a.m. on 3 August
 Offer Shares expected to commence on AIM

 CREST accounts credited in respect of the First Placing Shares and Retail      8.00 a.m. on 3 August
 Offer Shares to be held in uncertificated form (subject to First Admission)

 Where applicable, expected date for dispatch of definitive share               within 10 Business Days following First Admission
 certificates  First Placing Shares and Retail Offer Shares to be held in
 certificated form

 Latest time and date for receipt of completed Forms of Proxy and receipt of    9 a.m. on 15 August
 electronic proxy appointments via the CREST system

 General Meeting                                                                9 a.m. on 17 August

 Announcement of result of General Meeting                                       17 August

 Expected date for final hearing and confirmation of the Capital Reduction by   12 September
 the Court

 Expected date that the Capital Reduction become effective                      14 September

 Second Admission Long Stop Date                                                8.00 a.m. on 20 October

Notes:

(i)    References to times in this annoucement are to London time (unless
otherwise stated).

(ii)   If any of the details contained in the timetable above should change,
the revised times and dates will be notified by means of an announcement
through a Regulatory Information Service.

 

DEFINITIONS

The following definitions apply throughout the announcement and Circular
unless the context otherwise requires:

Act
the Companies Act 2006 (as amended)

Admissions
together the First Admission and the Second Admission and "Admission" shall
mean either of them as the context may require

Advanced Assurance                         the
assurance from HMRC issued under the Income Tax Act 2007 in a form and on
terms satisfactory to Cenkos that, for investors who themselves meet the
conditions, an investment by them in the Conditional Placing Shares would
qualify for relief from taxation under the enterprise investment scheme regime

AIM
the market of that name operated by the London Stock Exchange

AIM
Rules
the AIM Rules for Companies published by the London Stock Exchange from time
to time

Bookbuild Platform                          a
technology platform providing issuers and their advisers access to primary
capital markets deals and is owned BB Technology Ltd, a private limited
company incorporated in England and Wales with registered number 13508012.

Business
Day                                     a
day (other than a Saturday or Sunday) on which commercial banks are open for
general business in London, England

Capital
Raising                                  the
Firm Capital Raising and the Conditional Capital Raising

Capital Reduction
means the reduction of the Company's share capital by means of the reduction
of some of its share premium as more particularly described in this circular

Cenkos or Cenkos Securities              Cenkos Securities plc

certificated form or in                      an Ordinary
Share recorded on a company's share register as being certificated
form       held in certificated form (namely, not in CREST)

Company or Eden                              Eden
Research plc, a company incorporated and registered in England and Wales under
the Companies Act 2006 with registered number 03071324

Conditional Capital Raising               the Conditional
Placing together with any additional Conditional Shares issued pursuant to
subscriptions

Conditional Placing                          the
conditional placing of the Conditional Placing Shares pursuant to the Placing
Agreement and conditional on, amongst other things, satisfaction of the
Conditions

Conditional Placing Shares               the minimum 121,538,462
new Ordinary Shares to be allotted and issued by the Company pursuant to the
Conditional Placing

Conditional Shares                           up to
144,615,385 New Ordinary Shares issued pursuant to the Conditional Capital
Raising

Conditions
the conditions set out in the Placing Agreement for allotment and issue of the
Conditional Shares being, inter alia, receipt of Advanced Assurance and the
Capital Reduction becoming effective

CREST
the relevant system (as defined in the CREST Regulations) in respect of which
Euroclear is the operator (as defined in those regulations)

CREST
Manual                                   the
rules governing the operation of CREST, consisting of the CREST Reference
Manual, CREST International Manual, CREST Central Counterparty Service Manual,
CREST Rules, Registrars Service Standards, Settlement Discipline Rules, CREST
Courier and Sorting Services Manual, Daily Timetable, CREST Application
Procedures and CREST Glossary of Terms (all as defined in the CREST Glossary
of Terms promulgated by Euroclear on 15 July 1996 and as amended since) as
published by Euroclear

CREST member
a person who has been admitted to CREST as a system-member (as defined in the
CREST Manual)

CREST participant                             a
person who is, in relation to CREST, a system-participant (as defined in the
CREST regulations)

CREST Regulations                            the
Uncertificated Securities Regulations 2001 (SI 2001/3755) (as amended)

CREST
sponsor                                  a
CREST participant admitted to CREST as a CREST sponsor

CREST sponsored member                 a CREST member admitted
to CREST as a sponsored member

Dealing
Day
a day on which the London Stock Exchange is open for business in London

Directors or Board                            the
directors of the Company whose names are set in the Circular, or any duly
authorised committee thereof

Document
the Circular document which, for the avoidance of doubt, does not comprise a
prospectus (under the Prospectus Regulation) or an admission document (under
the AIM Rules)

EIS
Enterprise Investment Scheme (as defined in Part 5 ITA 2007)

Enlarged Share Capital                      the entire
issued share capital of the Company following completion of the Fundraising on
Second Admission

EU
the European Union

Euroclear
Euroclear UK & International Limited, the operator of CREST

EUWA
the European Union (Withdrawal) Act 2018 as amended and supplemented from time
to time (including, but not limited to, by the EU (Withdrawal) Act 2020)

Existing Ordinary Shares                   the 381,108,607
Ordinary Shares in issue at the date of this announcement, all of which are
admitted to trading on AIM

FCA
the UK Financial Conduct Authority

First
Admission
admission of the Firm Shares and the Retail Offer Shares to trading on AIM
becoming effective in accordance with the AIM Rules

First Admission Date                         3 August
2023, or such later date as the Company and Cenkos may agree in writing, being
in any event, not later than 8.00 a.m. on the First Admission Long Stop Date

First Admission Long Stop Date         31 August 2023

Firm Capital Raising                          the Firm
Placing and Firm Subscription

Firm Placing
                                    the
placing of the Firm Placing Shares pursuant to the Placing Agreement

Firm Placing Shares                          the
13,945,076 new Ordinary Shares to be allotted and issued by the Company
pursuant to the Firm Placing

Firm
Shares
the Firm Placing Shares and the Firm Subscription Shares

Firm Subscription                             the
subscription of the Firm Subscription Shares by Sipcam and certain directors

Firm Subscription Shares                  the 1,670,308
Ordinary Shares to be allotted and issued to Sipcam on the terms of the Sipcam
Subscription Agreement pursuant to the Firm Subscription and 1,307,693
Ordinary Shares to be allotted and issued to certain Directors under
subscription agreements

Form of
Proxy                                   the
form of proxy for use in connection with the General Meeting which accompanies
the Document

FSMA
the Financial Services and Markets Act 2000 (as amended)

Fundraising
the Placings, Firm Subscription and the Retail Offer

General Meeting
the general meeting of the Company to be held at the offices of Milton Park
Innovation Centre, 99 Park Drive, Milton Park, Oxfordshire, OX14 4RY at 9 a.m.
on 17 August 2023 (or any adjournment of that general meeting)

Group
the Company and its subsidiaries

HMRC
His Majesty's Revenue and Customs (which shall include its predecessors, the
Inland Revenue and HM Customs and Excise)

Intermediaries
broker or wealth manager to an eligible retail Shareholder in the Retail Offer
and "Intermediary" shall mean any one of them

ISIN
International Securities Identification Number

Issue
Price
6.5 pence per Placing Share, per Subscription Share and per Retail Offer Share

ITA
UK Income Tax Act 2007

Link Group or Link                             a
trading name of Link Market Services Limited

London Stock Exchange                    London Stock
Exchange plc

MAR
the UK version of the Market Abuse Regulation ((EU) No 596/2014) which is part
of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended
and supplemented from time to time

Money Laundering Regulations         The Money Laundering, Terrorist
Financing and Transfer of Funds (Information on the Payer) Regulations 2017,
the Criminal Justice Act 1993 and the Proceeds of Crime Act 2002

New Ordinary Shares                        together,
the Ordinary Shares to be issued pursuant to the Fundraising

Notice of General Meeting                the notice convening
the General Meeting which is set out at the end of the Circular subject to the
conditions set out in Part III of the Circular and, where relevant, in the
Application Form

Ordinary Shares
ordinary shares of £0.01 each in the capital of the Company

Placee
the subscribers for the Placing Shares pursuant to the Placings

Placing Announcement                     the Regulatory
Information Service announcement of the Company announcing the Fundraising

Placings
the Firm Placing and the Conditional Placing

 

 Placing Agreement  the agreement entered into between the Company and Cenkos in respect of the
                    Placings and Retail Offer dated 28 July 2023, as described in this Document

Placing
Shares                                  the
Firm Placing Shares and the Conditional Placing Shares

Prospectus Regulation                      the UK version
of commission delegated regulation (EU) 2017/1129 of the European Parliament
and of the Council, which is part of UK law by virtue of EUWA

Qualifying Holding
means a qualifying holding for the purposes of Chapter 4 of Part 6 of ITA
Restricted Jurisdiction)

Regulatory Information Service        has the meaning given in the AIM
Rules

Resolutions
the resolutions set out in the Notice of General Meeting

Restricted Jurisdiction                      each and any
of Australia, Canada, Japan, New Zealand, the Republic of South Africa or the
United States and any other jurisdiction where the Offer would breach any
applicable law or regulations

Retail Offer
 
means the retail offer to be made by the Company on the day of the Placing
Announcement via the Bookbuild Platform to retail investors situated in the
United Kingdom to subscribe for Retail Offer Shares at the Issue Price

Retail Offer Shares                           up to
7,692,308 new Ordinary Shares being made available pursuant to the Retail
Offer

Second Admission
admission of the Conditional Shares to trading on AIM becoming effective in
accordance with the AIM Rules

Second Admission Date                     The to be
determined date post the Capital Reduction, or such later date as the Company
and Cenkos may agree in writing, being in any event, not later than 8.00 a.m.
on the Second Admission Long Stop Date

Second Admission Long Stop Date    20 October 2023

Shareholders
holders of Ordinary Shares

Sipcam
 
Sipcam Oxon S.p.A.

Sipcam Subscription Agreement       the subscription agreement entered
into by the Company and Sipcam on or around the date of this announcement and
as referred to in the Placing Announcement

UK or United Kingdom                       the United
Kingdom of Great Britain and Northern Ireland

 

Uncertificated or Uncertificated       recorded on the relevant register
or other record of the shares or

form
other security concerned 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
Person
has the meaning given in the United States Securities Act 1933 (as amended)

VCT
Venture Capital Trust (as defined in Part 6 ITA 2007)

voting
rights
means all voting rights attributable to the share capital of the Company which
are currently exercisable at a general meeting

£ and p United Kingdom pounds sterling and pence respectively, the lawful
currency of the United Kingdom

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