REG - Ocean Harvest Tech. - Secured Loan Notes & Warrants and Notice of GM

Ocean Harvest TechnologyAnnouncement

30/09/2024 07:15

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RNS Number : 1618G  Ocean Harvest Technology Group PLC  30 September 2024

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM THE UNITED
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DISTRIBUTION WOULD BE UNLAWFUL.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION
(EU) 596/2014 AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM BY
VIRTUE OF THE EU (WITHDRAWAL) ACT 2018 ("MAR"). THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

 

 

Ocean Harvest Technology Group plc

("OHT", the "Company", or the "Group")

 

Proposed issue of Secured Loan Notes and Warrants to raise £1.5 million

 

Approval of a waiver under Rule 9 of the City Code on Takeovers and Mergers

and

Notice of General Meeting

 

Ocean Harvest Technology Group plc (AIM: OHT), a leading researcher, developer
and supplier of proprietary blended seaweed products as functional additives
for the global animal feed industry, is pleased to announce that it has
conditionally raised £1,500,000, before expenses, by way of the issue of
Secured Loan Notes and Warrants to certain existing Shareholders (the
"Fundraising").

 

A circular, containing further details of the Fundraising and Notice of
General Meeting to be held at 10.00 a.m. on 17 October 2024 is expected to be
published and despatched to Shareholders on 30 September 2024 (the
"Circular").

 

A copy of the Circular and the Notice of General Meeting is available on the
Company's website at
https://oceanharvesttechnology.com/results-reports-presentations/
(https://oceanharvesttechnology.com/results-reports-presentations/) and
defined terms used in this announcement are set out at the end of the
announcement.

 

The General Meeting has been called in order to put to Shareholders the
Resolutions required to approve the Rule 9 Waiver and complete the
Fundraising.

 

Transaction Summary

 

·      Subscription by Noteholders to raise £1,500,000, before
expenses, by way of the issue of Secured Loan Notes and Warrants to
Noteholders.

 

·      The Fundraising is conditional upon the passing of the
Resolutions. If the Resolutions are not passed, the Fundraising will not
proceed.

 

·      Each warrant entitles the Noteholder to subscribe for one
Ordinary Share at the Exercise Price of 11 pence each, increasing to 14 pence
each from and including the fifth anniversary of the Warrant Instrument.

 

·      Four-year term with early redemption permitted in whole (but not
in part) on giving three months' notice (or on shorter notice with three
months' interest).

 

·      The Secured Loan Notes provide for the grant of security to the
Noteholders over certain of the Company's assets.

 

·      Interest on the principal amount of the Secured Loan Notes shall
accrue at the rate of 12.5 per cent. per annum.

 

·      The Company shall, on the date of the Secured Loan Note
Instrument (the "Issue Date"), pay to each Noteholder an arrangement fee equal
to 3.5 per cent. of the principal amount of each Secured Loan Note issued to a
Noteholder on the Issue Date.

 

·      The Company shall, on each Anniversary Date, pay to each
Noteholder a commitment fee equal to 0.75 per cent. per annum of the principal
amount of the outstanding Notes held by such Noteholder.

 

·      Following completion of the Fundraising, the Company may, if
there is demand, issue up to a maximum of an additional £500,000 of Secured
Loan Notes (together with Warrants) to other investors who may wish to
subscribe.

 

 

The Independent Directors, having been so advised by Cavendish, consider the
terms of the Proposals are fair and reasonable as far as the Shareholders and
the Independent Shareholders are concerned and therefore in the best interests
of Shareholders and the Independent Shareholders taken as a whole.
Accordingly, the Independent Directors unanimously recommend that Shareholders
vote in favour of the Resolutions to be proposed at the General Meeting, as
the Independent Directors have undertaken to do in respect of their own
beneficial holdings, amounting as at the Reference Date in aggregate to
187,334 Ordinary Shares, representing approximately 0.2% of the Existing
Ordinary Shares.

 

 

For more information please contact:

 Ocean Harvest Technology Group plc                                   Tel: +44 (0) 1737 735018

 Ashley Head, Executive Chairman

 Chris Scott, CFO

 Cavendish Capital Markets Ltd (Nominated Adviser and Sole Broker)    Tel: +44 020 7220 0500
 Geoff Nash / Seamus Fricker / Trisyia Jamaludin (Corporate Finance)

 Tim Redfern / Harriet Ward (ECM)

 

Notes to Editors

 

Ocean Harvest Technology Group plc is a global leader in the development and
commercialisation of value adding proprietary products from blending multiple
species of seaweed. The Company provides a range of natural additives focused
on improving animal performance and the sustainability of the feed chain,
through its unique and proven proprietary seaweed blends. The Company sources
its seaweed globally, utilising sustainable and socially responsible
harvesting of largely wild blooming seaweed species.  Its products are
produced in its facility in Vietnam and sold into the $40bn animal feed
additive sector in multiple markets across the world.

 

For more information, please visit www.oceanharvesttechnology.com
(http://www.oceanharvesttechnology.com) .

 

 

BACKGROUND TO, REASONS FOR AND DETAILS OF THE FUNDRAISING

 

Business overview of the Company

Founded in the UK, the Company is a leading researcher, developer and supplier
of proprietary blended seaweed products as functional additives for the global
animal feed industry. The Company sources raw seaweed for its products
globally and has operations spanning the UK, Ireland and Vietnam.

The Company has demonstrated that its products, blended from red, green and
brown seaweeds, have a pre-biotic effect in animals which has been shown to
lead to higher growth rates, lower mortality and improved feed efficiency in
multiple species of animals. The company has been granted a patent which
protects these performance claims for a wide range of seaweed blends and for
use in a wide range of animals. The granting of this patent demonstrates that
OHT is the innovator in this area and has first mover advantage.

OHT sells its OceanFeed blended seaweed additive to customers globally who use
the product in a range of animal species. Examples include:

·        the use of OceanFeed in piglet diets to help support the
animal in its early life without having to rely on antibiotics;

·        in dairy cattle diets to improve milk production and milk
quality; and

·        in layer hen diets to increase egg production and increase
eggshell strength.

All of these lead to improvements in profitability for our customers and an
improvement in the sustainability of their animal production practices.

The global animal feed additive market is worth over US$40bn per annum
providing OHT with significant growth opportunities as customers seek out new
products which are natural and help to deliver improvements in performance and
sustainability in their animal production systems.

OHT sources wild harvested seaweed from Southeast Asia, Africa (seaweed
blooms) and the North Atlantic (sustainably harvested wild seaweed). The
seaweed blooms, often invasive, are harvested to restore the biodiversity in
the environments from which they are collected. Unlike most other ingredients
in animal feed, seaweed uses no arable land, fresh water or fertilisers and
hence it has a much lower carbon footprint than other ingredients and
additives which they can replace.

OHT continues to invest in its research and development to demonstrate
additional benefits of using its OceanFeed products. The company will continue
to report the results of these trials and then leverage them to further grow
its addressable markets.

OHT has strong growth opportunities as it on-boards new customers in this
large global market. Its customers are looking for natural products which can
help them deliver improved animal performance, improve the sustainability of
their production systems and address their profitability issues. OHT's
OceanFeed blended seaweed product is a unique solution for these customers as
it is 100 per cent. natural and has a pre-biotic effect with demonstrated
results which have been patented. The products also have a lower carbon
footprint than most other animal feed ingredients and improves the
sustainability of production animals when included in their diets.

 

Reasons for the Fundraising

On 23 July 2024, and further detailed in paragraph below, the Company
announced that it would deliver full year revenue materially below
expectations which in turn would have a knock on effect on the Company's cash
flow for the same period. Notwithstanding the Company's access to capital
through its largely undrawn receivables facility of EUR 2 million, since the
date of the trading update the Company has recognised a more urgent need for
additional capital to provide a more permanent solution to meet the Company's
short-medium term working capital requirements.

The Company currently holds a significant level of inventory (€1.7 million)
following lower H1 sales, with this inventory required to meet increasing
demand in H2. There are no conventional options to borrow using seaweed as
collateral and this has contributed to the need for funding. The Company has
therefore taken the decision to carry out the Fundraising to provide a more
permanent solution to meet the Group's short-term working capital
requirements.

 

The Fundraising and Terms of the Secured Loan Notes and Warrants

The Company has conditionally raised £1,500,000, before expenses, by way of
the issue of Secured Loan Notes and Warrants to the following existing
Shareholders:

 

 Shareholder              Aggregate amount of Secured Loan Notes  Aggregate number of Warrants

 Heaton Holdings Ltd      £550,000                                2,750,000
 Ashley Head              £200,000                                1,000,000
 Terance Butler Holdings  £750,000                                3,750,000

 Total                    £1,500,000                              7,500,000

 

 

The Fundraising is conditional on the passing of the Resolutions.

The initial Exercise Price for the Warrants represents an approximate 4.8 per
cent. premium to the closing middle market price of 10.5 pence per Existing
Ordinary Share on 27 September 2024 (being the last practicable date prior to
the date of the announcement of Fundraising, as announced by the Company on 30
September 2024).

Following completion of the Fundraising, the Company may, if there is demand,
issue up to a maximum of an additional £500,000 of Secured Loan Notes
(together with Warrants) to other investors who may wish to subscribe.

Details of the terms of the Secured Loan Notes and Warrants are set out below.

 

Secured Loan Notes

The key terms of the Secured Loan Note Instrument are as follows:

(a)    Four-year term with early redemption permitted in whole (but not in
part) on giving three months' notice (or on shorter notice with three months'
interest).

(b)   The Secured Loan Notes provide for the grant of security to the
Noteholders over certain of the Company's assets.

(c)    Interest on the principal amount of the Secured Loan Notes shall
accrue at the rate of 12.5 per cent. per annum.

(d)   The Company shall, on the date of the Secured Loan Note Instrument
(the "Issue Date"), pay to each Noteholder an arrangement fee equal to 3.5 per
cent. of the principal amount of each Secured Loan Note issued to a Noteholder
on the Issue Date.

(e)    The Company shall, on each Anniversary Date, pay to each Noteholder
a commitment fee equal to 0.75 per cent. per annum of the principal amount of
the outstanding Notes held by such Noteholder.

 

Further details of the terms of the Secured Loan Notes are set out in
paragraph 8.2 of Part II of the Circular.

The Secured Loan Notes will be issued following approval of the Resolutions by
Shareholders at the General Meeting and the satisfaction of all conditions
precedent. In order to meet the short-term cash requirements of the Company
prior to the General Meeting and the satisfaction of all conditions precedent,
it is intended two of the Noteholders will make up to £0.4m available
immediately through an on-demand term loan at an interest rate of 12.5%.
Following Shareholder approval of the Resolutions, the Secured Loan Notes will
be issued along with the Warrants and the balance of the £1.5 million will be
available to be drawn down.

 

Warrants

Each warrant entitles the holder to subscribe for one Ordinary Share at the
Exercise Price. The Warrants may be exercised at any time up to 11.59 p.m. on
the date falling 10 years from the date of the Warrant Instrument.

Further details of the terms of the Warrants are set out in paragraph 8.3 of
Part II of the Circular.

 

CURRENT TRADING

 

On 30 September 2024, the Company published its interim results for the 6
months ended 30 June 2024 which contained the following statement:

In its trading update of 23 July 2024 ("Trading Update"), OHT detailed
multiple new initiatives that were implemented in early 2024 to drive growth
of its OceanFeed product into its substantial target markets.  Whilst the
major benefits of these initiatives are not immediate, the Company has already
seen a number of early indications of success including greater momentum in
onboarding new customers from a wider range of species, geographies and sales
channels and enabling shorter sales cycles.

OHT has a highly concentrated customer base that means the actions of a
handful of customers have had a material impact on revenues.  As detailed in
the trading update of July, neither the Company's largest OceanFeed customer
nor its largest single seaweed customer from 2023 had placed any orders in
1H2024. In addition to existing customer revenues, the Company's previous FY
2024 outlook was reliant on quickly commercialising successful trials outcomes
and expanding distribution channels which have been slower to realise than
forecast.

Reflecting the impact on FY 2024 of existing customer ordering patterns and
slower onboarding of new customers, the Company now expects to report full
year revenue of circa €2.4 million.  Within that there is an expectation of
positive organic revenue growth in OceanFeed excluding the one-year impact
from the largest customer. The Company is pleased to now report that this
customer resumed orders in August 2024.

Gross margin from the sale of OceanFeed is expected to continue to increase
and is expected to be over 40% for the full year. The Company is adequately
funded through the loan note facility announced today which gives it
sufficient capital (alongside the receivables purchase facility it put in
place at the start of 2024) to drive revenue growth into 2025.

Looking forward, OHT believes that 2025 will be a year of substantial revenue
growth with greater revenue visibility from the changes made in its sales and
marketing strategy which are resulting in:

·              targeting the highest opportunity segments in
each specific region and market

·              significant investment in sales and marketing
resource and headcount in target regions

·              increasing breadth of customer base with reduced
customer concentration risk

·              improved customer intelligence and longer term
visibility of usage / demand requirements

·              increased use of distributors with faster
customer onboarding and reduced reliance on long trial periods

 

The trial data and customer feedback remain extremely positive as regards
OceanFeed and the Company looks forward to returning to significant growth
given the substantial size of the market opportunity.

 

DETAILS OF CONCERT PARTY'S PARTICIPATION IN THE FUNDRAISING

 

Certain members of the Concert Party have agreed, conditional on the passing
of the Resolutions, to subscribe for the following aggregate amount of Secured
Loan Notes and Warrants:

 

 Shareholder          Aggregate amount of Secured Loan Notes  Aggregate number of Warrants
 Heaton Holdings Ltd  £550,000                                2,750,000
 Ashley Head          £200,000                                1,000,000

 Total                £750,000                                3,750,000

 

 

INTENTIONS OF CONCERT PARTY FOR THE COMPANY

 

The Concert Party has confirmed there is no agreement, arrangement or
understanding for the transfer of their Ordinary Shares to any third party.

The Concert Party has no intention of making any change in relation to:

1.    the continued employment of the employees and management of the
Company and its subsidiaries, including any material change in the conditions
of employment or in the balance of the skills and functions of the employees
and management;

2.    the Company's future business including its research and development
functions;

3.    the location of the Company's headquarters or headquarter functions
or the location of the Company's places of business;

4.    the redeployment of the Company's fixed assets;

5.    employer contributions into the Company's pension schemes, the
accrual benefits of existing members and the admission of new members; or

6.    the maintenance of any existing trading facilities for the relevant
securities including the maintenance and admission of the Ordinary Shares to
trading on AIM.

 

The Concert Party also confirms that Heaton Holdings Limited, Kivalina Two Ltd
and Marwal Holdings Limited do not intend to change their own business
strategy or any other matter referred to in paragraph above as a result of the
Proposals.

In considering whether to recommend that Independent Shareholders vote in
favour of the Rule 9 Waiver, the Independent Directors have also given due
consideration to the intentions of the Concert Party with respect to the
future operation of the business and welcome the assurances made by the
Concert Party that it does not seek to make any changes to the Company's
future business, fixed assets, headquarter functions, research and development
functions, employees or management, pension schemes or the trading facilities
on which the Company's Ordinary Shares currently trade.

 

USE OF PROCEEDS OF THE FUNDRAISING

The gross proceeds of the Fundraising are £1.5 million.

The net proceeds of approximately £1.3 million will be used to meet the
Company's immediate working capital requirements and provide the capital to
drive revenue growth into 2025.

In addition, the Company would receive a further £825,000 to £1.05 million
in the event that all of the Warrants are exercised in full , although there
can be no certainty all or any of such Warrants will be exercised. If
received, these funds would also be used to build out additional seaweed
supply and drive sales growth.

 

APPLICATION OF THE TAKEOVER CODE AND RULE 9 WAIVER

 

Takeover Code

The Takeover Code is issued and administered by the Takeover Panel. The
Takeover Code applies to all takeover and merger transactions, however
effected, where the offeree company is, among other things, a listed or
unlisted public company resident in the United Kingdom, the Channel Islands or
the Isle of Man (and to certain categories of private limited companies). The
Company is a public company whose Ordinary Shares are admitted to trading on
AIM, and its Shareholders are therefore entitled to the protections afforded
by the Takeover Code.

Under Rule 9 of the Takeover Code, any person who acquires an interest in
shares (as defined in the Takeover Code) which, taken together with any shares
in which that person or any other person acting in concert with that person is
interested, carry 30 per cent. or more of the voting rights of a company which
is subject to the Takeover Code, is normally required to make an offer to all
of the remaining shareholders to acquire their shares in the company.

Similarly, when any person, together with persons acting in concert with him,
is interested in shares which in aggregate carry not less than 30 per cent. of
the voting rights of such a company, but does not hold shares carrying more
than 50 per cent. of such voting rights, a general offer will normally be
required if any further interest in shares is acquired by any such person, or
persons acting in concert with him, which increases the percentage of shares
carrying voting rights held by such persons.

An offer under Rule 9 would have to be made in cash at a price not less than
the highest price paid for any interest in shares in the Company by that
person or by any person acting in concert with it within the 12 months prior
to the announcement of the offer.

 

Rule 9 Waiver Resolution

The Concert Party is currently beneficially interested in 56,071,458 Ordinary
Shares, representing approximately 44.6 per cent. of the Existing Ordinary
Shares.

If the Concert Party exercises the Warrants held by it in full, the Concert
Party will be interested in shares carrying more than 30 per cent. of the
voting rights of the Company but will not hold shares carrying more than 50
per cent. of the voting rights of the Company.

The interests of the Concert Party in relevant securities of the Company, as
at the Reference Date and as they would be assuming exercise of the Warrants
held by the Concert Party in full, are set out below:

 

 Concert Party Member  Existing Ordinary Shares  Current holding as a percentage of Existing Ordinary Shares  New Ordinary Shares*  Maximum potential holding of the concert party**  Percentage of Enlarged Share Capital**

 Ashley Head           14,068,078                11.2%                                                         1,000,000             15,068,078                                       11.6%
 Stuart Waring         1,358,293                 1.1%                                                         0                     1,358,293                                         1.0%
 Heaton Holdings Ltd   15,721,628                12.5%                                                        2,750,000             18,471,628                                        14.3%
 Marwal Holdings Ltd   7,368,940                 5.9%                                                         0                     7,368,940                                         5.7%
 Kivalina Two Ltd      17,224,157                13.7%                                                        0                     17,224,157                                        13.3%
 Daniel Waring         165,181                   0.1%                                                         0                     165,181                                           0.1%
 Zoe Mongey            165,181                   0.1%                                                         0                     165,181                                           0.1%

 Total                 56,071,458                44.6%                                                        3,750,000             59,821,458                                        46.2%

 

* assuming the Concert Party exercises all the Warrants issued to it

** Assuming that: (i) the Concert Party exercises in full the Warrants issued
to it; and (ii) TBH does not exercise any Warrants

 

The Takeover Panel has agreed, subject to the passing of the Rule 9 Waiver
Resolution by the Independent Shareholders on a poll at the General Meeting,
to waive the obligation of the Concert Party that would otherwise arise as a
result of the exercise of all of the Warrants held by it. Accordingly, the
Company is proposing the Rule 9 Waiver Resolution at the General Meeting,
which will be taken on a poll.

The Rule 9 Waiver will be invalidated if any purchases are made by the Concert
Party or any party acting in concert with the Concert Party in the period
between the date of the Circular and the General Meeting.

Shareholders should note that any further increase in the interests of the
Concert Party in the Ordinary Shares of the Company that increases the
percentage of the voting rights in the Company in which they are interested,
whether collectively or individually, will be subject to the provisions of
Rule 9. Whether or not the Rule 9 Waiver Resolution is passed by the
Independent Shareholders, members of the Concert Party will not be restricted
from making an offer for the Company.

 

RELATED PARTY TRANSACTION

 

The participation of Ashley Head, Heaton Holdings Ltd and TBH in the
Fundraising is a related party transaction for the purposes of Rule 13 of the
AIM Rules. For the purposes of the AIM Rules, the Independent Directors of the
Company consider, having consulted with the Company's nominated adviser,
Cavendish, that the terms of the Fundraising are fair and reasonable insofar
as Shareholders are concerned.

GENERAL MEETING

The Notice of General Meeting is set out at the end of the Circular. The
General Meeting is to be held at 41 London Road, Reigate, RH2 9RJ at 10.00
a.m. (UK time) on 17 October 2024.

The Company has called the General Meeting in order to (i) put to Independent
Shareholders the Rule 9 Waiver Resolution required to approve the Rule 9
Waiver and to (ii) put to Shareholders the other Resolutions set out in Part
III (Notice of General Meeting) of the Circular. Your attention is drawn to
the fact that all of the Resolutions must be passed by Shareholders at the
General Meeting in order for the Fundraising to proceed.

The Rule 9 Waiver Resolution will be proposed in accordance with the Takeover
Code and will be taken on a poll of Independent Shareholders present and by
proxy voting at the General Meeting.

The Takeover Code requires the Rule 9 Waiver Resolution to be passed by the
Independent Shareholders only.

At the General Meeting the following additional Resolutions will be proposed:

Resolution 2 - Authority to allot shares

Resolution 2 is an ordinary resolution to authorise the Directors to allot
relevant securities with an aggregate nominal value of up to £100,000 being
equal to 10,000,000 New Ordinary Shares (i.e. the maximum number of Ordinary
Shares that may be allotted pursuant to or in connection with the Warrant
Instrument).

Resolution 3 - Disapplication of statutory pre-emption rights

Resolution 3, which is conditional on the passing of Resolution 2, is a
special resolution to authorise the Directors to allot up to 10,000,000 New
Ordinary Shares (i.e. the maximum number of Ordinary Shares that may be
allotted pursuant to or in connection with the Warrant Instrument) for cash on
a non-pre-emptive basis.

The authorities given by the Resolutions 2 and 3 will be in addition to any
existing similar authorities which the Directors may have.

If the Resolutions are not approved by Shareholders at the General Meeting,
the Fundraising will not proceed. As such, the anticipated net proceeds of the
Fundraising would not become available to the Company. There is no certainty
that other funding would be available on suitable terms or at all.
Accordingly, in light of the Group's reducing cash position, in such
circumstances it would be likely that the Company would have to seek
alternative funding which may come at a significantly greater cost.

 

ACTION TO BE TAKEN BY SHAREHOLDERS

 

Whether or not Shareholders intend to be present at the General Meeting, they
are asked to complete and return the Form of Proxy (enclosed with the
Circular) in accordance with the instructions printed on it as soon as
possible and, in any event, by no later than 10.00 a.m. on 15 October 2024
(or, in the case of an adjourned General Meeting, no later than 48 hours
before the time of such meeting, excluding any part of a day that is not a
working day).

Alternatively, Shareholders can submit their vote electronically at
www.sharegateway.co.uk. Shareholders will need to use their personal proxy
registration code which is printed on their Form of Proxy to facilitate this.
Electronic proxy appointments must be received by no later than 10.00 a.m. on
15 October 2024 (or, in the case of an adjournment of the General Meeting, not
less than 48 hours before the time fixed for the holding of the adjourned
General Meeting (at the discretion of the Directors, excluding any part of a
day that is not a working day)).

If Shareholders hold Existing Ordinary Shares in uncertificated form (that is,
in CREST) they may vote using the CREST proxy voting service in accordance
with the procedures set out in the CREST Manual (please also refer to the
accompanying notes to the Notice of the General Meeting set out at the end of
the Circular). Proxies submitted via CREST must be received by the Company's
Registrar, Neville Registrars Limited (ID: 7RA11), by no later than 10.00 a.m.
on 15 October 2024 (or, in the case of an adjournment of the General Meeting,
not less than 48 hours before the time fixed for the holding of the adjourned
General Meeting (at the discretion of the Directors, excluding any part of a
day that is not a working day)).

If Shareholders require help with voting online or if they have any queries in
relation to voting, they should contact the Company's Registrar, Neville
Registrars Limited, on Tel: +44 (0) 121 585 1131 or by email at
info@nevilleregistrars.co.uk (mailto:info@nevilleregistrars.co.uk) . Calls are
charged at the standard geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the applicable international
rate. Lines are open between 9.00 a.m. - 5.00 p.m., Monday to Friday
(excluding public holidays in England and Wales).

 

INDEPENDENT ADVICE IN RESPECT OF THE WAIVER

 

The Takeover Code requires the Independent Directors to obtain competent
independent advice regarding the merits of the Proposals. Cavendish has
provided financial advice to the Directors regarding the Proposals and in
providing such advice, Cavendish has taken into account the Directors'
commercial assessments. Cavendish confirms that it, and any person who is or
is presumed to be acting in concert with it, is independent of the Noteholders
and has no personal, financial or commercial relationship, or arrangements or
understandings with the Noteholders. Cavendish has given and has not withdrawn
its written consent to the inclusion in the Circular of its name and the
references to it in the form and context in which they are included.

 

RECOMMENDATION AND IRREVOCABLE UNDERTAKINGS

 

The Concert Party is considered to be interested in the outcome of the General
Meeting. Accordingly, no Director who is also a member of the Concert Party
(being Ashley Head) has participated in the Independent Directors'
recommendation and no member of the Concert Party will vote on the Rule 9
Waiver Resolution.

In addition, given that TBH is a Shareholder and is considered to be
interested in the outcome of the General Meeting, TBH will not vote on the
Rule 9 Waiver Resolution. In addition, given that Stephen Walker is a board
representative of TBH, Mr Walker has also not participated in the Independent
Directors' recommendation and will also not vote on Rule 9 Waiver Resolution.

The Independent Directors, having been so advised by Cavendish, consider the
terms of the Proposals are fair and reasonable as far as the Shareholders and
the Independent Shareholders are concerned and therefore in the best interests
of Shareholders and the Independent Shareholders taken as a whole.
Accordingly, the Independent Directors unanimously recommend that you vote in
favour of the Resolutions to be proposed at the General Meeting, as the
Independent Directors have undertaken to do in respect of their own beneficial
holdings, amounting as at the Reference Date in aggregate to 187,334 Ordinary
Shares, representing approximately 0.2 per cent. of the Existing Ordinary
Shares.

 

DEFINITIONS AND GLOSSARY

 

The following definitions and glossary apply throughout this document
(including the Notice of General Meeting) unless the context otherwise
requires:

 

"Act"
the Companies Act 2006 (as amended);

"acting in concert"                        has the
meaning attributed to it in the Takeover Code;

"Admission Document"                the admission document
published on 30 March 2023 in connection with the IPO;

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

"AIM
Rules"
the AIM Rules for Companies and the AIM Rules for Nominated Advisers;

"AIM Rules for Companies"          the AIM Rules for Companies, as
published and amended from time to time by the London Stock Exchange;

"AIM Rules for Nominated Advisers" the AIM Rules for Nominated Advisers, as
published and amended from time to time by the London Stock Exchange;

"Approval"
approval of the Rule 9 Waiver;

"Australia"
the Commonwealth of Australia, its states, territories and possessions;

"Board" or "Directors"                   the directors of
the Company as at the date hereof;

"Business Day"                              any
day (excluding Saturdays and Sundays) on which banks are open in London for
normal banking business and the London Stock Exchange is open for trading;

"Canada"
Canada, its provinces, territories and all areas subject to its jurisdiction
and any political sub-division thereof;

"Cavendish"
Cavendish Capital Markets Limited, a private limited company incorporated in
England and Wales under registered number 06198898 and having its registered
office at 1 Bartholomew Close, London, EC1A 7BL, the Company's nominated
adviser and sole broker;

"certificated" or "in certificated   an ordinary share recorded on a
company's share register as being

form"
held in certificated form (namely, not in CREST);

"Chairman"
the chairman of the Board;

"Circular" or "this document"       this document;

"Company" or "Ocean Harvest     Ocean Harvest Technology Group plc, a
company incorporated in

Technology"
England and Wales with registered number 13411717;

"Concert Party"
Kivalina Two Ltd, Ashley Head, Stuart Waring, Heaton Holdings Ltd, Marwal
Holdings Ltd, Daniel Waring and Zoe Mongey;

"CREST"
the relevant system (as defined in the CREST Regulations) for paperless
settlement of share transfers and holding shares in uncertificated form, in
respect of which Euroclear is the operator (as defined in the CREST
Regulations);

"CREST Manual"                              the
rules governing the operation of CREST as published by Euroclear;

"CREST member"                            a person
who has been admitted by Euroclear as a system member (as defined in the CREST
Regulations);

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

"CREST participant ID"                    shall have the
meaning given in the CREST Manual;

"CREST
Regulations"
the Uncertificated Securities Regulations 2001 (SI 2001/3755) including any
enactment or subordinate legislation which amends or supersedes those
regulations and any applicable rules made under those regulations or any such
enactment or subordinate legislation for the time being in force;

"CREST sponsor"                            a CREST
participant admitted to CREST as a CREST sponsor;

"CREST sponsored member"           a CREST member admitted to CREST
as a CREST sponsored member;

"Daily Official List"                           the
daily official list of the London Stock Exchange;

"Enlarged Share Capital"                 the entire issued
share capital of the Company following exercise of the Warrants issued to the
Concert Party;

"Euroclear"
Euroclear UK & International Limited;

"Exercise
Price"
11 pence per New Ordinary Share (increasing to 14 pence per New Ordinary Share
after 5th anniversary of the Warrant Instrument);

"Existing Ordinary Shares"              the 125,855,697 Ordinary
Shares in issue at the date of this announcement;

"FCA"
the UK Financial Conduct Authority;

"Form of Proxy"
the hard copy form of proxy for use by Shareholders in connection with the
General Meeting;

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

"Fundraising"
the issue of the Secured Loan Notes and Warrants to the Noteholders;

"FY23"
the financial year ended 31 December 2023 of the Company;

"General Meeting" or "GM"
the General Meeting of the Company convened for 10.00 a.m. (UK time) on 17
October 2024 or any adjournment thereof, notice of which is set out at the end
of the Circular;

"Group"
the Company and its subsidiaries (as defined in the Act);

"Independent Directors"                   the Directors,
save for Ashley Head and Stephen Walker;

"Independent Shareholders"        all Shareholders other than the
Concert Party, TBH and Stephen Walker;

"IPO"
the admission of the Company's Ordinary Shares to trading on AIM which became
effective on 4 April 2023;

"London Stock Exchange"           London Stock Exchange Group plc;

"New Ordinary Shares"                  the new ordinary
shares to be issued pursuant to the exercise of the Warrants;

"Non-Executive Directors"            the non-executive directors of
the Company, being Stephen Walker, David Frank Tilston, Christine Adair Maggs,
Gerina Eberl-Hancock and Riaan Van Dyk;

"Noteholders"
the proposed holders of the Secured Loan Notes being Terance Butler Holdings
Limited, Heaton Holdings Ltd and Ashley Head;

"Notice of General Meeting"         the notice convening the General
Meeting as set out at the end of the Circular;

"Official
List"                                 the
Official List of the FCA;

"Ordinary Shares"                          the
ordinary shares of £0.01 each in the capital of the Company in issue from
time to time;

"Proposals"
the recommended proposals by the board for the (i) Fundraising; and (ii) the
Rule 9 Waiver;

"Prospectus Regulation Rules"   the rules made by the FCA under Part VI of
FSMA in relation to offers of transferable securities to the public and
admission of transferable securities to trading on a regulated market;

"Reference Date"                           27
September 2024, being the latest practicable date prior to publication of this
announcement;

"Registrar"
Neville Registrars Limited, the Company's registrar;

"Regulatory Information Service" a service approved by the FCA for the
distribution to the public of regulatory announcements and included within the
list maintained on the FCA's website;

"Republic of South Africa"           the Republic of South Africa,
its territories and possessions;

"Resolutions"
the resolutions to be proposed at the General Meeting, details of which are
set out in the Notice of General Meeting;

"Rule
9"
Rule 9 of the Takeover Code;

"Rule 9 Waiver"                              the
waiver granted by the Takeover Panel, conditional upon the approval by the
Independent Shareholders of the Rule 9 Waiver Resolution at the General
Meeting, of an obligation which would otherwise be imposed on the Concert
Party to make a general offer to all Shareholders under Rule 9 of the Takeover
Code, as a result of the issue of New Ordinary Shares following the exercise
of Warrants by the Concert Party;

"Rule 9 Waiver Resolution"          the ordinary resolution numbered
1 in the Notice of General Meeting to approve the Rule 9 Waiver;

"Secured Loan Notes"                  the secured loan notes
to be issued by the Company to the Noteholders pursuant to the Secured Loan
Note Instrument in the aggregate principal amount of £1,500,000;

"Secured Loan Note Instrument" the secured loan note instrument under which
the Company has constituted the Secured Loan Notes;

"Securities Act"                             US
Securities Act of 1933 (as amended);

"Senior Independent Director"     David Frank Tilston;

"Shareholders"                              the
holders of Existing Ordinary Shares, and the term "Shareholder" shall be
construed accordingly;

"Share Options"
existing share options granted under the Company's existing share option
plans;

"Subscription Letter"                    the subscription
letter under which each Noteholder has subscribed for Secured Loan Notes and
Warrants and "Subscription Letters" shall be construed accordingly;

"Takeover Code"                           the City
Code on Takeovers and Mergers issued by the Takeover Panel, as amended from
time to time;

"TBH"
Terance Butler Holdings Limited;

"Takeover Panel"                           the Panel
on Takeovers and Mergers;

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

"United States" or "US"                 the United States of
America, each State thereof, its territories and possessions (including the
District of Columbia) and all other areas subject to its jurisdiction;

"£", "pounds sterling", "sterling"   the lawful currency of the United
Kingdom; "pence" or "p"

"Warrants"
the warrants to subscribe for the New Ordinary Shares at the Exercise Price;

"Warrant Holders"                          the
holders of the Warrants;

"Warrant Instrument"                    the instrument
under which the Company has constituted the Warrants;

"working day"
has the meaning given in section 1173 of the Act.

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