REG - NetScientific PLC - DeepTech Recycling secures £1 million investment

NetscientificAnnouncement

01/12/2023 07:00

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RNS Number : 3073V  NetScientific PLC  01 December 2023

For release on RNS: 07.00, 1 December 2023

 

 

 

 

NetScientific plc

("NetScientific" or the "Company")

 

Plastic recycling technology company DeepTech Recycling secures £1 million
investment

NetScientific Plc (AIM: NSCI), the deep tech and life sciences VC investment
group, announces that its portfolio company DeepTech Recycling Limited
("Deeptech Recycling") has successfully closed a £1 million fundraising
("Fundraising").

DeepTech Recycling is a UK deep tech company born out of a global
environmental crisis caused by insufficient and unsustainable management of
plastic waste. Its mission is to make plastic sustainable and support the
critical global drive towards a circular economy for plastics through chemical
recycling of plastic waste. DeepTech Recycling has a unique, patented and
proven technology platform, which was developed over more than 10 years of
structured and accelerated development and commercialisation, and offers
unique and innovative solutions to the environmental challenges of plastic
pollution.

The Fundraising, carried out via an advance subscription agreement,
constitutes the first closing of a target investment programme of c.£3
million, with further investment anticipated within the next six months. The
Fundraising was led and syndicated by EMV Capital, the Company's wholly owned
venture capital and corporate finance firm.

In December 2022, DeepTech Recycling, in which the NetScientific group holds a
30 per cent. stake, acquired the majority of assets of Recycling Technologies
Limited out of administration. Since the acquisition, the value creation team
of EMV Capital has worked closely with DeepTech Recycling to consolidate
assets and IP, embark on further research and development programmes, and
start on the commercial roadmap of the business.

The proceeds of the Fundraising will, inter alia, support DeepTech Recycling
in the completion of a development phase for its pilot plant, development and
adaption of its targeted technology and licensing strategy, as well as the
set-up of its operating base and development of its core team.

The advance subscription funds will only be applied for shares in the capital
of Deeptech Recycling upon, inter alia, Deeptech Recycling raising at least
£1.5 million (or such lower amount as may be agreed between the parties)
within six months of the first closing of the Fundraising. Such subscription
shares are anticipated to be priced at a 20 per cent. discount to the issue
price of such £1.5 million fundraising, with an agreed valuation cap of £6
million. Given the subscription price is not yet known, and no new shares in
DeepTech Recycling have yet been issued, following completion of the first
closing of the Fundraising, the total equity holding of NetScientific in
DeepTech Recycling remains at 30 per cent. The capital under advisory of EMV
Capital in respect of investors introduced by it to DeepTech Recycling has
increased by £1 million.

Related Party Transaction

EMV Capital has agreed with DeepTech Recycling terms of engagement for
advising on the Fundraising and the continued investment programme, including
the provision of value creation services over up to a three year term
("Engagement Terms"). Pursuant to the Engagement Terms, EMV Capital will
charge customary fees to DeepTech Recycling, including a commission of 6 per
cent. of investment monies introduced by EMV Capital to DeepTech Recycling,
and annual fees for value creation and management support services anticipated
to be c.£100,000 for an initial 12 month period. Such fees may, at the
election of EMV Capital, be converted into shares in the capital of DeepTech
Recycling at a 25 per cent. discount to the prevailing issue price of such
shares.

DeepTech Recycling is currently owned as to 70 per cent. of its shares by AB
Group Limited, a company owned by Melvin Lawson who is a substantial
shareholder of NetScientific. As such the Engagement Terms constitute a
related party transaction under Rule 13 of the AIM Rules for Companies. The
Directors, excluding Dr Ilian Iliev by reason of his concert party
relationship with Melvin Lawson, consider, having consulted with the Company's
nominated adviser, Panmure Gordon (UK) Limited, that the Engagement Terms are
fair and reasonable in so far as shareholders of NetScientific are concerned.

Marvine Besong, Managing Director and CTO of DeepTech Recycling, said:

"This investment represents a significant vote of confidence in our mission to
transform non-recyclable plastic waste into high value oil products, a process
that is a key lever in achieving substantial reductions in plastic waste
disposal and greenhouse gas emissions. The oil products generated can be used
by the petrochemical industry as the feedstock for producing virgin-quality
plastics, further re-enforcing our passionate support for the drive towards a
circular economy.

"As the business continues to make strong progress, we will leverage this new
capital injection to scale up our operations and accelerate the realisation of
our robust pipeline of opportunities. EMV Capital has played a key role in
facilitating our fundraising initiatives, as well as the relaunch of the
business. We are grateful for the insightful contributions of their value
creation team."

Dr Ilian Iliev, CEO of NetScientific, and Chair and Investment Director of
DeepTech Recycling added:

"We are pleased with the outcome of this pivotal fundraising for DeepTech
Recycling. The company's innovative chemical recycling platform can be
integrated and scaled into the existing waste management value chain
internationally. It is a balanced approach, addressing the global plastic
waste crisis, while recognising the importance of plastic in the modern
economy. We look forward to continuing to work with DeepTech Recycling as it
actively contributes to a cleaner, more sustainable future.

"This transaction is a further example of our capital efficient investment
model, where the NetScientific group was able to secure a 30 per cent. stake
for nominal value. In turn our subsidiary EMV Capital was able to secure
investor support for the company's growth strategy. We look forward to
reporting on the company's fundraising programme, and the impact on the net
asset value and fair value of our shareholding, upon the company issuing new
shares in due course."

 

The person responsible for arranging the release of this announcement on
behalf of the Company is Edward Hooper, General Counsel and Executive
Director of the Company.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH IS PART OF UK LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

-Ends-

 

NetScientific

 NetScientific
 Ilian Iliev, CEO                                                            Via Belvedere Communications

 Panmure Gordon (UK) Limited (NOMAD and Broker)
 Emma Earl / Freddy Crossley / Will Goode / Mark Rogers (Corporate Finance)  +44 (0)20 7886 2500

 Rupert Dearden (Corporate Broking)

 Belvedere Communications

 John West / Llew Angus / Lily Pearce                                        +44 (0)20 7653 8702

 

About NetScientific

NetScientific plc (AIM: NSCI) is a deep tech and life sciences VC investment
group with an international portfolio of innovative companies.

NetScientific identifies, invests in, and builds high growth companies in the
UK and internationally. The company adds value through the proactive
management of its portfolio, progressing to key value inflection points, and
delivering investment returns through partial or full liquidity events.

NetScientific differentiates itself by employing a capital-efficient
investment approach, making judicial use of its balance sheet and syndicating
investments through its wholly owned VC subsidiary, EMV Capital. The group
secures a mixture of direct equity stakes and carried interest stakes in its
portfolio of companies, creating a lean structure that can support a large
portfolio.

NetScientific is headquartered in London, United Kingdom, and is admitted to
trading on AIM, a market operated by the London Stock Exchange.

www.netscientific.net (http://www.netscientific.net)

About DeepTech Recycling Limited

DeepTech Recycling is a UK-based technology company born out of a global
environmental crisis caused by insufficient and unsustainable management of
plastic waste. The company's mission is to make plastic sustainable and
support the critical global drive towards a circular economy for plastics.

DeepTech Recycling has a unique, patented and demonstrated technology
platform, which was developed over more than 10 years of structured and
accelerated development and commercialisation, and offers a unique innovative
solution to the environmental challenges of plastic pollution.

The technology converts currently unrecyclable plastic waste, that would
normally be landfilled or incinerated, into oil that can be used by the
petrochemical industry as the feedstock for producing virgin quality plastic.

https://www.deeptech-recycling.co.uk/ (https://www.deeptech-recycling.co.uk/)

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