REG - MicroSalt PLC Tekcapital plc - Oversubscribed Fundraising of £2.3Million

TekcapitalAnnouncement

03/02/2025 07:15

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RNS Number : 6138V  MicroSalt PLC  03 February 2025

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as imported into the laws of England and Wales by virtue of
the European Union (Withdrawal) Act 2018 (as amended) and certain other
enacting measures ("UK MAR"). With the publication of this announcement via a
Regulatory Information Service ("RIS"), this inside information is now
considered to be in the public domain.

 

3 February 2025

MicroSalt Plc

("MicroSalt" or the "Company")

Subscription to raise £2.3 million (c.US$2.9 million)

PDMR Dealing

Total Voting Rights

MicroSalt plc (AIM:SALT), a leading provider of full-flavour, natural salt
with approximately 50% less sodium, is pleased to announce it has closed the
oversubscribed fundraising of £2.3 million (c.US$2.9 million) through a
subscription for 3,316,122 new ordinary shares of £0.001625 each in the
Company ("Subscription Shares") at the current market price of £0.70 per
Subscription Share (the "Subscription" or "Fundraising").

Key Highlights:

-      £2.3 million (US$2.9 million) before expenses was raised pursuant
to the Subscription.

-      Grant of a total of 6,875,102 premium priced warrants (as defined
below) to participants of the Fundraising ("Subscribers").

-      Funds raised will be utilised as follows:

o  £1.2m to build inventory to support expected growth in orders from
leading snack manufacturers

o  £0.6m for sales and marketing efforts related to newly launched Quick
Service restaurant ("QSR") product, targeting initially the very significant
"French fry" market where the Company sees tremendous opportunity for growth;

o  £0.4m for general working capital purposes; and

o  £0.1m for R&D efforts associated with further line extensions of
Microsalt to address market demand in the substantial ramen and noodle market
segment.

 

The proceeds of the Subscription will be mainly used investing in inventory to
satisfy expected B2B customer demand in 2025 from leading snack manufacturers,
as well as general working capital purposes. The Company has received
commitments for an additional 290 metric tonnes ("mT") in bulk orders for 2025
and expects this to further increase as MicroSalt is rolled out over new
product lines. Based on existing orders for Q1 2025 and expected orders for
the rest of 2025 for existing product lines, B2B volumes are projected to
increase more than 10 times than manufactured in 2024.

The Company also launched its QSR product in January 2025 aimed primarily at
multinational fast-food chains. Since launch, the Company has already received
positive early interest from a leading global fast-food chain for application
to a number of their products including French fries. The proceeds from the
Fundraising will contribute to the Company accelerating its commercial rollout
of the QSR product into this market.

The net proceeds of the Subscription will substantially strengthen the
Company's balance sheet, and based on management forecasts, are expected to be
sufficient to fund the business for the next 12 months.

Whilst the exercise of the newly issued warrants is not guaranteed, they will,
if exercised, further strengthen the Company's balance sheet at appreciating
valuations. The exercise of all of these warrants would contribute an
additional £5.5 million in cash to the Company.

 

Subscriber Warrants

Subscribers are being granted two warrants in respect of each Subscription
Share that they are subscribing for as part of the Fundraising. One of the
warrants will entitle the holder thereof to subscribe for new ordinary shares
of £0.001625 each ("Ordinary Shares") at a price of £0.77 per Ordinary Share
(the "10% Warrant"), the other warrant will entitle the holder thereof to
subscribe for Ordinary Shares at a price of £0.84 per Ordinary Share (the
"20% Warrant" and together with the 10% Warrants, the "Warrants")(or in each
case such adjusted price as may be determined from time to time in accordance
with the provisions of the Warrant Instrument pursuant to which they are
granted (one reflecting the terms of the 10% Warrants and another reflecting
the terms of the 20% Warrants, together the "Warrant Instruments")). A total
of 3,437,551 10% Warrants and 3,437,551 20% Warrants are to be granted on
Admission (as defined below).

The Warrants are granted conditional on the Subscription Shares being admitted
to trading on the AIM market of the London Stock Exchange plc ("AIM")
("Admission"), subject to the articles of association of the Company and
otherwise on the terms of the relevant Warrant Instrument. Subscribers are not
required to pay for the granting of any Warrant, but will be required to pay
the exercise price in full on exercise of each Warrant.

The Warrants are exercisable in whole or in part (subject to a minimum of 50
per cent. of the Warrants held by the Warrant holder being exercised) at any
time between the date of Admission and the earlier of:

(i)            the date that no further rights being conferred by
the Warrants to subscribe for Shares are exercisable;

(ii)           the forty fifth business day following notification
by the Company that the closing price of the Shares (as shown in the FTSE AIM
All-Share Index) has exceeded £1.30 (in respect of the 10% Warrants) and
£1.60 (in respect of the 20% Warrants) on any trading day; or

(iii)          31 January 2028.

 

Adviser Shares

The Company has issued, subject to Admission, 121,429 Subscription Shares to
advisers to the Fundraising. The issue of the Subscription Shares was in lieu
of cash payments to the advisers for services provided. As with the
Subscription Shares issued to the Subscribers, the advisers have received one
10% Warrant and one 20% Warrant for each Subscription Share issued to them.
The Warrants granted are subject to the terms of the relevant Warrant
Instrument.

 

SP Angel Corporate Finance LLP acted as sole agent to the Company in
connection with the Subscription.

 

Details of the participation in the Subscription by Persons Discharging
Managerial Responsibilities

Pursuant to the Subscription, Konrad Dabrowski, CFO of the Company has
subscribed for 7,143 Subscription Shares. His resultant aggregate shareholding
is 53,655 Ordinary Shares. Further details provided in the PDMR dealing table
at the end of this announcement.

Rick Guiney, CEO of MicroSalt, commented:

"We are pleased to close this oversubscribed fundraising at the current market
price, at a time when many other fundraisings are consummated at substantial
discounts. This additional capital will enable us to further scale our B2B
sales to snack manufactures and help us meet anticipated customer demand in
the QSR segment since our January 2025 product launch. I am very optimistic on
the upside potential for anticipated rapid growth in 2025, particularly at a
time when governments are increasingly focused on initiatives to reduce Sodium
consumption in manufactured foods. Indeed, only last month the US FDA proposed
new short form nutritional labels to be applied to the front of packaged foods
where the levels of (i) Saturated Fat; (ii) Sugars; and (iii) Sodium are to
clearly labelled as Low, Medium or High. For MicroSalt, this is potentially
game-changing and we already have food companies engaging with us to actively
address the need to lower Sodium levels in their products."

 

Admission and Total Voting Rights

Application has been made for the Subscription Shares and Adviser Shares to be
admitted to trading on AIM, which is expected to become effective on or around
6 February 2025 ("Admission").

Following the issue of the 3,437,551 Subscription Shares and Adviser Shares,
which, on Admission, will rank pari passu with the existing Ordinary Shares,
the total number of Ordinary Shares in issue with voting rights in the Company
will be 51,654,685. There are no shares held in treasury.

The above figure of 51,654,685 Ordinary Shares may therefore be used by
shareholders as the denominator for the calculation by which they may
determine if they are required to notify their interest in, or change to their
interest in, the Company under the FCA's Disclosure Guidance and Transparency
Rules.

 

For more information, please visit MicroSalt's website
(https://microsaltinc.com/home-uk/) , follow on Twitter @MicroSaltPLC
(https://twitter.com/MicroSaltPLC)  or contact:

 

 MicroSalt plc                                         Via Flagstaff PR
 Rick Guiney, CEO

 Zeus Capital Limited (Nominated Adviser and Broker)   +44 (0)20 3829 5000
 David Foreman / James Edis (Investment Banking)
 SP Angel Corporate Finance LLP (Agent)                +44 (0)20 3470 0470
 Richard Morrison / Charles Bouverat

 Flagstaff PR (Financial PR/IR)                        +44 (0)20 7129 1474
 Tim Thompson / Alison Allfrey / Anna Probert           microsalt@flagstaffcomms.com

 

 

Notes to Editors

 

MicroSalt® produces a patented full-flavour, low-sodium salt for food
manufacturers and consumers.

 

MicroSalt is a major potential disruptor in the food market, thanks to its
micron-sized particles which deliver the same sense of saltiness to a wide
range of foods but with approximately 50% less sodium. Excess sodium
consumption is a significant contributor to cardiovascular disease and
MicroSalt's solution meets the rising demand for healthier alternatives to
traditional salt. The WHO has set a target for reducing global sodium intake
by 30% by 2025, which it estimates will save 7 million lives by 2030.

 

Each year, cardiovascular disease costs the UK £19 billion - if the
average salt intake was reduced by one gram per day, it has been estimated
that 4,147 lives and £288 million would be saved each year in the UK. As a
nation, the UK consumes 183 million kilograms of salt each year, and 70% of
the typical person's sodium intake is hidden in processed foods.

 

MicroSalt owns a patent-protected technology which we believe helps create
high barriers to entry within the reduced-sodium salt market. MicroSalt has
two main products: (1) MicroSalt - the traditional product primarily targeting
the B2B market as a low sodium alternative to traditional salt, used as an
ingredient in manufactured foods, and (2) MicroSalt Premium - an additional
product line, released in January 2025, with increased density allowing for
industry specific product application. The line targets the B2C market and
Quick Service Restaurant (e.g. Fast Food) markets.

 

The Directors believe that MicroSalt is well positioned to capture growth in
the low sodium market, which is expected to grow exponentially, and that there
is also scope to enter the larger salt market.

 

 

ENDS

 

IMPORTANT INFORMATION

 

The information contained in this announcement ("Announcement") does not
constitute an offering of securities for sale in the United States of America
and no securities have been or will be registered under the United States
Securities Act 1933, as amended (the "Securities Act") or under the securities
laws of any state or other jurisdiction in the United States of America nor
will they qualify for distribution under any of the relevant securities laws
of Australia, Canada, Japan or the Republic of South Africa. The securities
may not be offered or sold in the United States of America. This Announcement
is not for distribution directly or indirectly in or into the United States of
America, Australia, Canada, Japan or the Republic of South Africa or in any
other jurisdiction in which such publication or distribution is unlawful.

 

This Announcement, does not constitute a prospectus or prospectus equivalent
document for the purposes of the prospectus rules and has not been, and will
not be, approved by, or filed with, the Financial Conduct Authority ("FCA").
It does not constitute or form part of, and should not be construed as, an
offer to sell or issue, or a solicitation of any offer of or invitation to buy
or subscribe for, any securities, nor shall it (or any part of it), or the
fact of its distribution, form the basis of, or be relied on in connection
with, or act as an inducement to enter into, any contract or commitment
whatsoever. Any failure to comply with these restrictions may constitute a
violation of the applicable securities laws in such jurisdiction. This
Announcement does not constitute a recommendation regarding any securities.

 

This Announcement contains (or may contain) certain forward-looking statements
with respect to certain of the Company's plans and its current goals and
expectations relating to its future financial condition and performance, which
involve a number of risks and uncertainties. The Company cautions readers that
no forward-looking statement is a guarantee of future performance and that
actual results could differ materially from those contained in the
forward-looking statements. These forward-looking statements can be identified
by the fact that they do not relate only to historical or current facts.
Forward-looking statements sometimes use words such as "aim", "anticipate",
"target", "expect", "estimate", "intend", "plan", "goal", "believe", or other
words of similar meaning. By their nature, forward-looking statements involve
risk and uncertainty because they relate to future events and circumstances,
including, but not limited to, economic and business conditions, the effects
of continued volatility in credit markets, market-related risks such as
changes in the price of commodities or changes in interest rates and foreign
exchange rates, the policies and actions of governmental and regulatory
authorities, changes in legislation, the further development of standards and
interpretations under International Financial Reporting Standards (IFRS)
applicable to past, current and future periods, evolving practices with regard
to the interpretation and application of standards under IFRS, the outcome of
pending and future litigation or regulatory investigations, the success of
future explorations, acquisitions and other strategic transactions and the
impact of competition. A number of these factors are beyond the Company's
control. As a result, the Company's actual future results may differ
materially from the plans, goals, and expectations set forth in the Company's
forward-looking statements. Any forward-looking statements made in this
Announcement by or on behalf of the Company speak only as of the date they are
made. Except as required by the FCA, the London Stock Exchange plc or
applicable law, the Company expressly disclaims any obligation or undertaking
to release publicly any updates or revisions to any forward-looking statements
contained in this Announcement to reflect any changes in the Company's
expectations with regard thereto or any changes in events, conditions or
circumstances on which any such statement is based.

 

This Announcement is for information purposes only and shall not constitute an
offer to buy, sell, issue, or subscribe for, or the solicitation of an offer
to buy, sell, issue, or subscribe for any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification, or exemption,
under the securities laws of any such jurisdiction.

 

This Announcement has been issued by and is the sole responsibility of the
Company. No representation or warranty, express or implied, is or will be made
as to, or in relation to, and no responsibility or liability is or will be
accepted by Zeus Capital Limited ("Zeus") or SP Angel Corporate Finance LLP
("SP Angel") or by any of their affiliates or agents as to, or in relation to,
the accuracy or completeness of this Announcement or any other written or oral
information made available to or publicly available to any interested party or
its advisers, and any liability therefore is expressly disclaimed.

 

Zeus is authorised and regulated by the FCA. Zeus is acting for the Company
and for no-one else in connection with the Subscription, and will not be
responsible to anyone other than the Company for providing the protections
afforded to its customers or for providing advice to any other person in
relation to the Subscription or any other matter referred to herein.

 

SP Angel is authorised and regulated by the FCA. SP Angel is acting as agent
for the Company and for no-one else in connection with the Subscription, and
will not be responsible to anyone other than the Company for providing the
protections afforded to its customers or for providing advice to any other
person in relation to the Subscription or any other matter referred to herein.

 

The distribution of this Announcement and the offering of the Subscription
Shares in certain jurisdictions may be restricted by law. No action has been
taken by the Company, Zeus or SP Angel that would permit an offering of such
shares or possession or distribution of this Announcement or any other
offering or publicity material relating to such shares in any jurisdiction
where action for that purpose is required. Persons into whose possession this
Announcement comes are required by the Company, Zeus and SP Angel to inform
themselves about, and to observe such restrictions.

 

Persons (including, without limitation, nominees and trustees) who have a
contractual or other legal obligation to forward a copy of the Appendix or
this Announcement should seek appropriate advice before taking any action.

 

The Subscription Shares to which this Announcement relates may be illiquid
and/or subject to restrictions on their resale. Prospective purchasers of the
Subscription Shares should conduct their own due diligence on the Subscription
Shares. If you do not understand the contents of this Announcement you should
consult an authorised financial adviser.

 

Neither the content of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms part of, this
Announcement.

 

All times and dates in this Announcement may be subject to amendment. The
Company and SP Angel shall notify the Subscribers and any person acting on
behalf of the Subscribers of any changes.

 

Each distributor is responsible for undertaking its own target market
assessment in respect of the Subscription Shares and determining appropriate
distribution channels.

 

Solely for the purposes of the product governance requirements contained
within the following, each as imported into the laws of England and Wales by
virtue of the European Union (Withdrawal) Act 2018 (as amended) and certain
other enacting measures: (a) EU Directive 2014/65/EU on markets in financial
instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission
Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local
implementing measures (together, the "MiFID II Product Governance
Requirements"), and disclaiming all and any liability, whether arising in
tort, contract or otherwise, which any "manufacturer" (for the purposes of the
Product Governance Requirements) may otherwise have with respect thereto, the
Subscription Shares have been subject to a product approval process, which has
determined that the Subscription Shares are: (i) compatible with an end target
market of: (a) retail investors; (b) investors who meet the criteria of
professional clients; and (c) eligible counterparties, each as defined in
MiFID II; and (ii) eligible for distribution through all distribution channels
as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding
the Target Market Assessment, Distributors should note that the price of the
Subscription Shares may decline and investors could lose all or part of their
investment; the Subscription Shares offer no guaranteed income and no capital
protection; and an investment in the Subscription Shares is compatible only
with investors who do not need a guaranteed income or capital protection, who
(either alone or in conjunction with an appropriate financial or other
adviser) are capable of evaluating the merits and risks of such an investment
and who have sufficient resources to be able to bear any losses that may
result therefrom. The Target Market Assessment is without prejudice to the
requirements of any contractual, legal or regulatory selling restrictions in
relation to an offer of securities such as the Subscription Shares.

 

For the avoidance of doubt, the Target Market Assessment does not constitute:
(a) an assessment of suitability or appropriateness for the purposes of MiFID
II; or (b) a recommendation to any investor or group of investors to invest
in, or purchase, or take any other action whatsoever with respect to the
Subscription Shares.

 

Each distributor is responsible for undertaking its own target market
assessment in respect of the Subscription Shares and determining appropriate
distribution channels.

 

 

 Notification of a Transaction pursuant to Article 19(1) of Regulation (EU) No.
 596/2014
 1   Details of the person discharging managerial responsibilities/person closely
     associated
 a.  Name                                                         Konrad Dabrowski
 2   Reason for notification
 a.  Position/Status                                              Chief Financial Officer
 b.  Initial notification/                                        Initial Notification

     Amendment
 3   Details of the issuer, emission allowance market participant, auction
     platform, auctioneer or auction monitor
 a.  Name                                                         MicroSalt plc
 b.  LEI                                                          213800L7WRHP8CCEEQ48
 4   Details of the transaction(s): section to be repeated for (i) each type of
     instrument; (ii) each type of transaction; (iii) each date; and (iv) each
     place where transactions have been conducted
 a.  Description of the financial instrument, type of instrument  Ordinary Shares of £0.001625 each

Identification Code

                                                                  ISIN: GB00BQB6FF85
 b.  Nature of the transaction                                    Subscription of new Ordinary Shares
 c.  Price(s) and volume(s)                                       Price(s)  Volume(s)

                                                            70.0p     7,143

 d.  Aggregated information                                       N/A

 e.  Date of the transactions                                     31 January 2025
 f.  Place of the transaction                                     London

d.

Aggregated information

 

N/A

e.

Date of the transactions

31 January 2025

f.

Place of the transaction

London

 

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