REG - Nuformix PLC - Subscription to raise £1.65 million

NuformixAnnouncement

14/12/2021 07:05

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RNS Number : 5124V  Nuformix PLC  14 December 2021

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET
ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK
MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

 

 

14 December 2021

 

Nuformix plc

("Nuformix" or the "Company")

 

 

Subscription to raise £1.65 million and Sharing Agreements

 

Nuformix plc (LSE: NFX), a pharmaceutical development company targeting unmet
medical needs in fibrosis and oncology via drug repurposing, announces a
conditional subscription to raise £1.65 million (the "Subscription") through
the issue of 110,000,000 new ordinary shares of 0.1 pence each in the Company
("Ordinary Shares") at a price of 1.5 pence per Ordinary Share with Lanstead
Capital Investors L.P. ("Lanstead"), an institutional investor, together with
related sharing agreements.  The Subscription is being conducted in two
tranches as further described below.

 

Highlights

 

·    Subscription for 110,000,000 new Ordinary Shares by Lanstead at an
issue price of 1.5 pence per Subscription Share (the "Issue Price") to raise
gross proceeds of approximately £1.65 million.

 

·    The Issue Price represents a 7.14 per cent. premium to the closing
mid-market price of the Company's Ordinary Shares on 13 December 2021, the
business day prior to the Subscription being announced.

 

·    The Subscription is being conducted in two tranches.  The first
tranche of the Subscription comprises 22,000,000 Ordinary Shares (the "First
Subscription Shares") for gross proceeds of £330,000 and is being issued
utilising the Company's existing authorities to allot Ordinary Shares.  The
second tranche of the subscription comprises 88,000,000 Ordinary Shares (the
"Second Subscription Shares") for gross proceeds of £1,320,000. The issue of
the Second Subscription Shares is subject to the approval of the Company's
shareholders at a General Meeting to be convened in due course, together with
the Company not being required to issue a prospectus for the admission of the
Second Subscription Shares to trading on the London Stock Exchange. The
Company currently anticipates that, subject to the approval of the Company's
shareholders, the Second Subscription Shares will be issued in April 2022.

 

·    The gross proceeds of the Subscription will be pledged by the Company
pursuant to two sharing agreements with Lanstead (the "Sharing Agreements").
The Sharing Agreements, details of which are set out below, together entitle
the Company to receive back those proceeds on a pro rata monthly basis over a
period of 20 months, subject to adjustment upwards or downwards each month
depending on the Company's share price at the time.  The Sharing Agreements
provide the opportunity for the Company to benefit from positive future share
price performance.

 

·    The net proceeds of the Sharing Agreements received by the Company
will be used primarily to provide funding for:

 

o  Further research and development activities on its main assets NXP002 and
NXP004;

o  Business development activities with potential licensees for both assets;
and

o  General working capital.

 

Commenting, Nuformix's Executive Chairman, Dr Alastair Riddell, said: "I am
delighted by the confidence shown by Lanstead in the future prospects of the
Company's products. Their investment will enable the Company to invest in the
formal development of NXP002 to be Phase I ready within the 20 month period
and to continue the strengthening of the IP around NXP004. Both products
address large market opportunities. Importantly, this enables us to hire
experienced business development expertise to build on our licensing
opportunities for these products to pharmaceutical companies."

 

Background to and reasons for the Subscription and use of proceeds

 

The encouraging results from the set of pre-clinical studies recently
announced on NXP002 and NXP004 have increased the Board's confidence in the
prospects for its products. These prospects will be further enhanced by
further pre-clinical development, including formulation work, toxicology
studies and regulatory preparations for Phase I trials. In parallel, business
development discussions with prospective partners will help further refine
these plans and increase the likelihood of successful deals. The Company's
existing resources would not be sufficient to support all the work required to
make NXP002 Phase I ready. The Lanstead investment will provide regular
monthly funds over 20 months which the Board of Nuformix believe should cover
these pre-clinical activities.

The Subscription proceeds will be pledged to Lanstead under the Sharing
Agreements pursuant to which the Company is entitled to receive back those
proceeds on a pro rata monthly basis over a period of 20 months, subject to
adjustment upwards or downwards each month depending on the Company's share
price at the time.

A significant factor in Nuformix's decision to enter into the Subscription is
that the Sharing Agreements provide the opportunity for the Company to benefit
from positive future share price performance. There is no upper limit placed
on the additional proceeds receivable by the Company as part of the monthly
settlements and the amount available in subsequent months is not affected.
Whilst the Company notes the corresponding risk that a fall in Nuformix's
share price could reduce the amount of proceeds received, as explained below,
the Directors expect the Company's pre-clinical progress of its products and
business development strategy to make considerable positive advances over the
20-month term of the Sharing Agreements. If these advances are successful, and
if the success of these advances is reflected in Nuformix's share price, the
Company expects the proceeds to be received back from Lanstead to exceed the
amount pledged under the Sharing Agreements although there can be no guarantee
that this outcome will occur.

Further information on the Lanstead Subscription

 

Pursuant to the subscription agreement between the Company and Lanstead, the
22,000,000 First Subscription Shares will be issued to Lanstead at 1.5 pence
per Subscription Share for an aggregate subscription price of £330,000 before
expenses (the "First Subscription").

 

The First Subscription proceeds of £330,000 will be pledged to Lanstead under
a Sharing Agreement under which Lanstead will then make, subject to the terms
and conditions of that Sharing Agreement, monthly settlements (subject to
adjustment upwards or downwards) to the Company over four months, as detailed
below.

 

The First Subscription Shares will rank pari passu with the existing Ordinary
Shares and application has been made to the London Stock Exchange for
admission of the First Subscription Shares and the First Value Payment Shares
(as defined below) to trading on the Standard Segment of the Official List and
the Main Market of the London Stock Exchange ("Admission"). The First
Subscription is conditional, inter alia, on Admission and there being: (i) no
breach of certain customary warranties given by the Company to Lanstead at any
time prior to Admission; and (ii) no force majeure event occurring prior to
Admission.  Admission and dealings in the First Subscription Shares and the
First Value Payment Shares is expected to commence at 8.00am on 17 December
2021.

 

Subject to shareholder approval at a General Meeting, expected to be convened
in January 2022, and the Company's ability to issue the Second Subscription
Shares and have them admitted to trading on the London Stock Exchange without
requiring the publication of a prospectus, the 88,000,000 Second Subscription
Shares will be issued to Lanstead at 1.5 pence per Subscription Share for an
aggregate subscription price of £1,320,000 before expenses. The Company
currently anticipates that, subject to the approval of the Company's
shareholders, the Second Subscription Shares will be issued in April 2022. As
such an application for admission of the Second Subscription Shares to trading
on the Standard Segment of the Official List and the Main Market of the London
Stock Exchange is expected to be made in April 2022.

 

The proceeds of £1,320,000 received from the issue of the Second Subscription
Shares will be pledged to Lanstead under a Sharing Agreement under which
Lanstead will then make, subject to the terms and conditions of that Sharing
Agreement, monthly settlements (subject to adjustment upwards or downwards) to
the Company over 16 months, as detailed below.

 

As a result of entering into the Sharing Agreements the aggregate amount
received by the Company under the Lanstead Subscription and the related
Sharing Agreements may be more or less than £1,650,000, as further explained
below.

 

The Sharing Agreements

 

As part of the Subscription, the Company will enter into the Sharing
Agreements with Lanstead, pursuant to which Nuformix will return the gross
proceeds of the Subscription to Lanstead. The Sharing Agreements will enable
the Company to share in any share price appreciation over the Benchmark Price
(as defined below).  However, if the Company's share price is less than the
Benchmark Price then the amount received by the Company under the Sharing
Agreements will be less than the gross proceeds of the Subscription which were
pledged by the Company to Lanstead at the outset.

 

The first Sharing Agreement (the "First Sharing Agreement") provides that the
Company, in return for pledging the £330,000 proceeds from the First
Subscription Shares, will receive four equal monthly settlement amounts as
measured against a benchmark share price of 2.0 pence per Ordinary Share (the
"Benchmark Price"). The monthly settlement amounts for the First Sharing
Agreement are structured to commence approximately three months following
Admission of the First Subscription Shares.

 

The second Sharing Agreement (the "Second Sharing Agreement") provides that
the Company, in return for pledging the £1,320,000 proceeds from the Second
Subscription Shares, will receive 16 equal monthly settlement amounts as
measured against the Benchmark Price. The monthly settlement amounts for the
Second Sharing Agreement are structured to commence one month following the
receipt of the final settlement due under the First Sharing Agreement.

 

If the measured share price (the "Measured Price"), calculated as the average
of each day's volume weighted share price of the Company's Ordinary Shares
over a 20 day period prior to the monthly settlement date, exceeds the
Benchmark Price, the Company will receive more than 100 per cent. of that
monthly settlement due on a pro rata basis according to the excess of the
Measured Price over the Benchmark Price. There is no upper limit placed on the
additional proceeds receivable by the Company as part of the monthly
settlements and the amount available in subsequent months is not affected.
Should the Measured Price be below the Benchmark Price, the Company will
receive less than 100 per cent. of the monthly settlement calculated on a pro
rata basis and the Company will not be entitled to receive the shortfall at
any later date.

For example, if on a monthly settlement date the calculated Measured Price
exceeds the Benchmark Price by 10 per cent., the settlement on that monthly
settlement date will be 110 per cent. of the amount due from Lanstead on that
date. If on the monthly settlement date the calculated Measured Price is below
the Benchmark Price by 10 per cent., the settlement on the monthly settlement
date will be 90 per cent. of the amount due on that date. Each settlement as
so calculated will be in final settlement of Lanstead's obligation on that
settlement date.

 

Assuming the Measured Price equals the Benchmark Price on the date of each and
every monthly settlement, Nuformix would receive aggregate proceeds of £1.65
million (before expenses) from the Subscription and Sharing Agreements.

 

The Company will pay Lanstead's legal costs incurred in the Subscription and
in entering into the Sharing Agreements and, in addition, has agreed to issue
to Lanstead 2,000,000 new Ordinary Shares (the "First Value Payment Shares")
in connection with entering into the First Sharing Agreement and 5,700,000
shares in connection with entering into the Second Sharing Agreement (the
"Second Value Payment Shares"). The Second Value Payment Shares are expected
to be issued in April 2022 at the same time as the issuance of the Second
Subscription Shares.

 

In no event will fluctuations in the Company's share price result in any
increase in the number of Subscription Shares issued by the Company or
received by Lanstead. A decline in the Company's share price would not result
in any advantage accruing to Lanstead and the Sharing Agreements allows both
Lanstead and the Company to benefit from future share price appreciation.

 

In total, assuming the issue of the First Subscription Shares, the Second
Subscription Shares, the First Value Payment Shares and the Second Value
Payment Shares, Lanstead will be issued with 117,700,000 new Ordinary Shares
pursuant to the Subscription which, when issued, will equate to approximately
16.59per cent of the Company's then enlarged issued share capital.  No
shares, warrants or additional fees are owed to Lanstead at any point during
this agreement other than those disclosed above.

 

General Meeting

 

The issue of the Second Subscription Shares and the Second Value Payment
Shares are subject to the approval of the Company's shareholders at a General
Meeting.  A circular convening the General Meeting will be sent to
shareholders in due course and the Company anticipates that the General
Meeting will be convened during January 2022.

 

Total Voting Rights

 

Following Admission of the First Subscription Shares and the First Value
Payment Shares the Company's enlarged issued share capital will comprise
615,609,368 Ordinary Shares with voting rights.  The figure of 615,609,368
Ordinary Shares may therefore be used by shareholders in the Company as the
denominator for the calculations by which they will determine if they are
required to notify their interest in, or a change in their interest in, the
share capital of the Company under the FCA's Disclosure and Transparency
Rules.

 

Enquiries

 

 Nuformix plc                                        via Walbrook
 Dr Alastair Riddell, Executive Chairman
 Dr Anne Brindley, CEO

 Allenby Capital Limited                             +44 (0) 20 3328 5656
 Nick Athanas / George Payne (Corporate Finance)
 Stefano Aquilino / Matt Butlin (Sales and Corporate Broking)

 Walbrook PR       nuformix@walbrookpr.com or +44 (0)20 7933 8780
 Anna Dunphy / Phillip Marriage      Tel: +44 (0)7876 741 001 / +44 (0)7867 984 082

 

Notes to Editors

 

About Nuformix

 

Nuformix is a pharmaceutical development company targeting unmet medical needs
in fibrosis and oncology via drug repurposing. The Company aims to use its
expertise in discovering, developing and patenting novel drug forms, with
improved physical properties, to develop new products in new indications that
are, importantly, differentiated from the original (by way of dosage, delivery
route or presentation), thus creating new and attractive commercial
opportunities. Nuformix has an early-stage pipeline of preclinical and Phase
I-ready assets with potential for significant value and early licensing
opportunities.

 

About Lanstead

 

Lanstead is an institutional investor that since 2007 has provided funding for
ongoing business objectives to listed small and mid-cap growth companies.
Lanstead focuses on equity investments in listed companies with management
teams with a clear growth strategy.

 

Lanstead's extensive experience allows it to invest in most industries,
focusing on providing supportive, longer term capital that rewards company
growth. Companies with Lanstead on the shareholder register via an equity
placement to Lanstead with an accompanying sharing agreement benefit from a
unique and flexible approach to finance growth. This provides the opportunity
for companies to benefit from additional cash beyond the original placing
proceeds without having to issue additional shares.

 

Further information is available at www.Lanstead.com (http://www.Lanstead.com)
 

 

 

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