RCS - Tekcapital plc - Belluscura Update

TekcapitalAnnouncement

05/10/2023 07:00

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RNS Number : 7425O  Tekcapital plc  05 October 2023

 

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5 October2023

Tekcapital Plc

("Tekcapital")

 

Portfolio Company Update: Belluscura plc

 

Tekcapital plc (AIM: TEK), the UK intellectual property investment group
focused on transforming university technologies into valuable products that
can improve people's lives, is pleased to provide a comprehensive overview of
Belluscura plc's ("Belluscura") recent significant developments.

Highlights:

 

·    Belluscura has reached agreement which could potentially secure circa
£8m growth capital to meet the demands of recent orders and licensing royalty
agreements totalling up to potentially US$85m

·    Interest in DISCOV-R™ portable oxygen concentrator now exceeds
10,000 units with a potential sales value guidance of over US$30m

·    Exclusive License, Marketing and Distribution Agreement signed with
its manufacturing partner, Innomax Medical Device Technologies ("InnoMax"). If
minimum sales quantities set out in the agreement are achieved the cumulative
royalties will be worth US$55m over ten years

·    Simon Neicheril has been appointed as CFO, bringing extensive
experience in manufacturing

·    The Hong Kong Department of Health - Medical Device Division has
approved the distribution of the X-PLOR® portable oxygen concentrator

·    Belluscura has received the first purchase order from a Hong Kong
based distributor

 

Dr Clifford Gross, CEO of Tekcapital, commented:

 

"We are very pleased to see the significant progress of Belluscura with
enhancements to their balance sheet, regulatory approvals, personnel, and
sales pipeline.   Together we view these recent developments as
transformative for Belluscura."

 

Orders of over 6,500 DISCOV-R™ received

 

On 16 August 2023, Belluscura announced that it had received 6,500 preliminary
purchase orders for its DISCOV-R™ portable oxygen concentrator representing
approximately $15 million of potential revenue to Belluscura. Further to the
initial preliminary purchase order announced 16 August, on 3 October,
Belluscura announced it had now received interest exceeding 10,000 units with
a potential sales value of over $30 million.

 

Exclusive licence, marketing and distribution agreement

 

On 30 August 2023, Belluscura announced it had entered into a ten-year
exclusive License, Marketing and Distribution Agreement with its global
manufacturing partner, InnoMax Medical Technology covering China, Hong Kong,
Macau and Singapore. The InnoMax Agreement will range from $27.5m if the
license is converted to non-exclusive from year six and up to $55m in
cumulative royalties if the license remains exclusive for the entire ten-year
term. Belluscura will receive increasing minimum royalty payments over the
life of the agreement and a share of net profits on sales of accessories.

 

In September 2023, Belluscura received its first approval for the distribution
of X-PLOR® portable oxygen concentrator from the Hong Kong Department of
Health - Medical Device Division, and received its first purchase order from a
Hong Kong distributor.

 

To facilitate Belluscura's delivery on these opportunities and developments,
they have reached agreements that could potentially secure a total funding
package worth circa £8m as detailed below.

 

Growth Capital Funding Package

 

Belluscura has raised circa £8m growth capital by means of a conditional
equity placing, a conditional issue of 10% Unsecured Convertible Loan Notes
and a proposed share-for-share offer for TMT Acquisition plc ("TMT
Acquisition"). TMT Acquisition is listed on the Main Market of the London
Stock Exchange.

 

Belluscura and TMT Acquisition announced 3 October that they have reached an
agreement on the key terms of a possible share-for-share offer for TMT
Acquisition by Belluscura. TMT Acquisition has cash and near cash of
approximately £4.7 million on its balance sheet. Belluscura will deploy the
cash to enhance manufacturing operations and for working capital.

 

The proposed terms of the Possible Offer comprise the issuance of 15 new
ordinary shares of Belluscura in exchange for every 22 ordinary shares of TMT
Acquisition equalling 18,750,000 Belluscura Shares. The agreement implies a
valuation of 21.82 pence for each TMT Acquisition Share and a 24.7% premium to
the three-month volume weighted average price for TMT Acquisition Shares
calculated for the period ending on 2nd October 2023.

 

Unsecured Convertible Loan Notes & Equity Placing

 

On 3 October, Belluscura raised approximately $4.02 million (£3.32 million)
through the conditional issue of approximately £2.72 million (approximately
$3.29 million) of 10% Unsecured Convertible Loan Notes 2026 and the
conditional issue of approximately £0.60 million new ordinary shares of 1
penny each at an Issue Price of 32 pence per Belluscura share.

 

CFO Appointment

 

To align Belluscura's financial base with future operations, Simon Neicheril
has been appointed Belluscura's Chief Financial Officer (CFO) and will be
based at Belluscura's U.S. headquarters in Texas. Simon brings extensive
experience in large-scale manufacturing operations having joined from Pace
Industries LLC, a $600m revenue manufacturing company with nine locations
across the US and Mexico. He previously held the role of CFO at GlobalStep, a
high growth global software testing company with operations in Canada, the
United Kingdom, Romania, and India.

Tekcapital owns 15,138,767 shares of Belluscura plc (representing
approximately 11.0% of the issued share capital of Belluscura).

About Tekcapital plc

Tekcapital creates value from investing in new, university-developed
discoveries that can enhance people's lives and provides a range of technology
transfer services to help organisations evaluate and commercialise new
technologies. Tekcapital is quoted on the AIM market of the London Stock
Exchange (AIM: symbol TEK) and is headquartered in the UK. For more
information, please visit www.tekcapital.com (http://www.tekcapital.com) .

 

LEI: 213800GOJTOV19FIFZ85

For further information, please contact:

 Tekcapital Plc                                                    Via Flagstaff IR
 Clifford M. Gross, Ph.D.

 SP Angel Corporate Finance LLP (Nominated Adviser and Broker)    +44 (0) 20 3470 0470
 Richard Morrison / Charlie Bouverat (Corporate Finance)

 Rob Rees (Corporate Broking)

 Flagstaff Strategic and Investor Communications                  +44 (0)207 129 1474

 Tim Thompson/Andrea Seymour/Fergus Mellon

This press release is for informational purposes only. The information herein
does not constitute investment advice nor an offer to invest and may contain
statements related to our future business and financial performance and future
events or developments involving Belluscura and/or Tekcapital that may
constitute forward-looking statements. These statements may be identified by
words such as "expect," "look forward to," "anticipate" "intend," "plan,"
"believe," "seek," "estimate," "will," "project" or words of similar meaning.
We may also make forward-looking statements in other reports, in
presentations, in material delivered to customers, stakeholders and in press
releases. In addition, our representatives may from time to time make oral
forward-looking statements. Such statements may be based on the current
expectations and certain assumptions of Belluscura and/or Tekcapital's
management. Please note that these are subject to a number of risks,
uncertainties and factors, including, but not limited to those described in
various disclosures. Should one or more of these risks or uncertainties
materialize, or should underlying expectations not occur or assumptions prove
incorrect, actual results, performance or achievements of Belluscura or
Tekcapital may vary materially from those described explicitly or implicitly
in the relevant forward-looking statement. Neither Belluscura nor Tekcapital
intends, nor assumes any obligation, to update or revise these forward-looking
statements in light of developments which differ from those anticipated.

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