REG - Trackwise Designs - Fundraising and Open Offer
16/12/2021 07:00
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RNS Number : 8138V Trackwise Designs PLC 16 December 2021
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 STATES, CANADA, JAPAN, AUSTRALIA, THE
REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT
JURISDICTION. THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY. FURTHER
DETAILS OF THE FUNDRAISING ARE SET OUT BELOW.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT CONSTITUTE AN
OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE FOR
OR OTHERWISE ACQUIRE ANY NEW ORDINARY SHARES OF TRACKWISE DESIGNS PLC.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE
MARKET ABUSE REGULATION NO. 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
Terms not otherwise defined herein shall have the meanings given in the
section entitled "Definitions" at the end of this Announcement.
TRACKWISE DESIGNS PLC
("Trackwise", the "Company" or the "Group")
Placing, Subscription and
Open Offer
and
Notice of General Meeting
The Board of Trackwise Designs plc, a provider of specialist products using
printed circuit technology, is pleased to announce that it has conditionally
raised gross proceeds of £6.0 million by way of the issue of an aggregate of
up to 7,500,000 New Ordinary Shares pursuant to a Placing of up to
7,487,500 New Ordinary Shares and a Subscription of 12,500 New Ordinary
Shares at an Issue Price of 80 pence per New Ordinary Share.
In addition, the Company proposes to raise up to a further approximately £1
million by the issue of up to 1,250,336 New Ordinary Shares pursuant to an
Open Offer to Qualifying Shareholders, also at the Issue Price (the Placing,
Subscription and Open Offer, together the "Fundraising").
The Fundraising, save for the First Tranche Shares, as defined below, requires
Shareholder Resolutions to be passed by the Company's Shareholders.
Highlights:
· Oversubscribed Placing and Subscription with new and
existing institutional and other investors to raise gross proceeds of £6.0
million plus an Open Offer to raise an additional £1 million.
· The Company is continuing the fit out of its Stonehouse
property in Gloucestershire (the "Stonehouse Site") to increase the Group's
production capacity to meet the expected demand for its IHT (Improved Harness
Technology(TM)) products pursuant to the Company's significant contract with
an EV OEM, as announced previously.
· The Stonehouse Site is expected to be in production at the
end of Q1 2022 and fully operational by June 2022.
· The Fundraising has been sought to fund capital expenditure
and provide additional growth working capital.
· The Company has received the 2022 production forecast from
its EV OEM customer and the Q1 2022 purchase order has also been received.
· Trackwise continues to have a strong pipeline of IHT and
APCB revenue opportunities, prioritising IHT primary target markets of EV,
Medical and Aerospace.
· The Open Offer is being made available to provide an
opportunity for existing Qualifying Shareholders, who are not participating in
the Placing and Subscription, to participate in the Fundraise. Funds raised
from the Open Offer will provide additional growth working capital, further
strengthening the Company's balance sheet.
Philip Johnston, CEO of Trackwise, commented:
"We appreciate and recognise the continuing support shown by existing
investors and welcome new shareholders to Trackwise. 2021 has been a
challenging economic environment for businesses who are delivering innovation;
nevertheless 2021 will be a record year for IHT sales by a considerable
margin. Having received the 2022 production forecast from our EV OEM customer,
together with the purchase order for Q1 2022, and with our Stonehouse facility
progressing well, we look forward to commencing production. This fundraise
will enable the delivery of a step change in our IHT commercial proposition."
Circular and General Meeting
A Circular to Shareholders in respect of the Placing, Subscription and the
Open Offer is expected to be posted to shareholders later today giving notice
of a General Meeting of the Company. The meeting will be held on 5 January
2022 at 10:00 a.m. at the offices of the Trackwise at 1 Ashvale, Alexandra
Way, Tewkesbury GL20 8N. A copy of the Circular will later today be available
on the Company's website www.trackwise.co.uk (http://www.trackwise.co.uk) .
The Directors consider the Resolutions to be set out in the Circular and
Notice to be in the best interests of the Company and the Shareholders as a
whole. The Directors who hold Ordinary Shares intend to vote in favour of the
Resolutions in respect of their shareholdings, representing in aggregate
approximately 24.1 per cent. of the Company's current issued share capital as
at the date of this announcement.
Open Offer
The Open Offer is specifically structured to provide an opportunity for
participation in the Fundraising by the Company's existing Shareholder base.
Qualifying Shareholders are reminded that Shareholders taking part in the
Placing and Subscription will not be entitled to take part in the Open Offer
and that therefore the up to 1,250,336 Open Offer Shares, raising up to
approximately £1 million, are only available to a smaller pool of Existing
Ordinary Shareholders. If there are no applications under the Excess
Application Facility, not all of the £1 million would be raised. The Excess
Application Facility is part of the Open Offer and not available to those
taking part in the Placing and Subscription.
Admission and Total Voting Rights
Application has been made by the Company for 1,421,285 new Ordinary Shares
("First Tranche Shares") to be admitted to trading on AIM ("First Tranche
Admission"). It is expected that First Tranche Admission will occur and
dealings in the First Tranche Shares will commence at 8:00 a.m. on 20 December
2021.
Following First Tranche Admission, the total number of Ordinary Shares in
issue will be 30,179,014. There are no Ordinary Shares held in treasury.
Accordingly, the total number of voting rights in the Company on First Tranche
Admission will be 30,179,014. This figure may be used by Shareholders as the
denominator for the calculations to determine if they are required to notify
their interest in, or a change to their interest in, the Company under the
FCA's Disclosure Guidance and Transparency Rules.
Further information on the Fundraising, including the Open Offer, is set out
below. This announcement should be read in its entirety.
Enquiries:
Trackwise Designs plc +44(0)16 8429 9930
Philip Johnston, CEO www.trackwise.co.uk (http://www.trackwise.co.uk)
Mark Hodgkins, CFO
finnCap Ltd +44(0)20 7220 0500
NOMAD and Broker
Ed Frisby / Kate Bannatyne / Tim Harper - Corporate Finance
Andrew Burdis / Barney Hayward - ECM
Alma PR +44(0)20 3405 0205
Financial PR and IR
Caroline Forde / Josh Royston / David Ison
Notes to editors
Trackwise is a UK-based manufacturer of specialist products using printed
circuit technology.
The full suite includes: Improved Harness Technology™ ("IHT") and Advanced
PCBs - Microwave and Radio Frequency ("RF"), Short Flex, Flex Rigid and Rigid
Multilayer products.
IHT uses a proprietary, patented process that Trackwise has developed to
manufacture multilayer flexible printed circuits of unlimited length. While
the technology has many applications, the directors expect that one of its
primary uses will be to replace traditional wire harness in a variety of
industries.
The Company manufactures on two sites, located in Tewkesbury and Stevenage
(following the acquisition of Stevenage Circuits Ltd in April 2020). It serves
customers in Europe and North America. The Company has acquired a third site
in Stonehouse Gloucestershire initially for its EV programme.
Trackwise Designs plc was admitted to trading on AIM in 2018 with the ticker
TWD. For additional information please visit www.trackwise.co.uk
The following text has been taken from the Circular to be sent to
Shareholders.
LETTER FROM THE CHAIRMAN
1. Introduction
The Company announced on 16 December 2021 that it had conditionally raised £6
million (before expenses) by the issue of up to 7,487,500 New Ordinary Shares
pursuant to the Placing and the Subscription of a total of up to 12,500 New
Ordinary Shares both at 80 pence per share (the "Issue Price"). In addition,
the Company announced an Open Offer providing an opportunity for Qualifying
Shareholders, to raise gross proceeds of approximately £1 million by the
issue of up to 1,250,336 New Ordinary Shares also at the Issue Price.
The issue if the Second Tranche Shares is conditional on, inter alia, the
passing of the Resolutions by the Shareholders at the General Meeting. If the
Resolutions are passed, the Second Tranche Shares are expected to be allotted
immediately after the General Meeting, conditional on Admission, which is
expected to occur at 8.00 a.m. on 6 January 2022. Should Shareholder approval
not be obtained at the General Meeting, neither the issue of the Second
Tranche Shares nor the Open Offer will proceed. The issue of the First Tranche
Shares is not conditional on the passing of the Resolutions as it is being
carried out under the Board's existing share capital authorities. None of the
Placing, the Subscription nor the Open Offer has been underwritten.
The purpose of this letter is to outline the reasons for the Fundraising,
details of the Open Offer and explain why the Board considers the Resolutions
to be in the best interests of the Company and Shareholders as a whole, and
why the Directors unanimously recommend that you vote in favour of the
Resolutions, as they intend to in respect of the Ordinary Shares held by them,
which represent in aggregate approximately 24.1 per cent. of the Existing
Ordinary Shares.
2. Background to and reasons for the Fundraising
The Trackwise business has been trading since 1989 and was historically a
provider of large antennae for the mobile phone industry. The business was
acquired by the Company (formerly called Bremhold Limited and incorporated in
2000). The Company began the development of Improved Harness Technology (IHT),
being flexible multilayer printed circuit boards of unlimited length, in 2012.
In 2014, a patent was granted to the Company in relation to the IHT
manufacturing process in the United Kingdom. Patents have since been granted
to the Company in the United States of America, Canada, the European Union and
China with an impending grant expected from Brazil.
IHT is a disruptive process technology that enables the replacement of wire
and wire harnesses in a wide variety of applications. Its key benefits, which
are built on the longstanding and well-known benefits of flexible PCBs of
short length, are that: it can reduce weight by up to 75 per cent. when
replacing incumbent technology; improve precision, reliability and
performance; and its ability to support distributed electronics or 'smart
harness'. IHT is positioned to satisfy the demand for lighter, smaller and
more functional connectivity across a range of applications, including in the
EV, aerospace and medical industries.
The Company financed the development of the IHT process technology using the
retained profits of its traditional antenna business as well as debt finance
during the period up to 2018. In July 2018, the Company's shares were admitted
to trading on the London Stock Exchange AIM market by way of an IPO, raising
£5.5 million of new money.
The funding provided at the time of IPO enabled the Company's development of
the capacity and capability to manufacture IHT and since then the Company has
advanced the roll-to-roll manufacture of IHT to facilitate larger scale
production of IHT.
In April 2020, the Company acquired Stevenage Circuits Limited (CRN: 01059497)
("SCL"). The Company has subsequently transferred its traditional antenna
business to SCL, thereby allowing it to focus its production capacity at
Tewkesbury on IHT products.
In September 2020 the Company announced the culmination of 2 years'
development work with an EV OEM for the supply of flexible battery harnesses
made using the technology and know-how developed by the business for its IHT
product. The contract was extended in June 2021 to a 4 year contract and has
the potential to generate revenues of up to £54 million over that period
(previously up to £38 million). The contract includes material compensation
payments from the EV OEM if minimum order volumes are not placed. The Board
has now received the FY 2022 production forecast from the EV OEM which is H2
biased as the EV OEM's UK and US manufacturing capacity comes online. The Q1
2022 purchase order from this EV OEM has also been received, with raw
materials now on order by the Company. The EV OEM is starting to roll out its
innovative modular micro factories in the UK and US, and the Directors
consider that it is well funded. There remains in future the potential for
volumes to be in excess of current expectations and a potential for expansion
into additional new parts.
Pursuant to the contract with the EV OEM, demand from the EV OEM is expected
to outstrip the capacity that the Company has in Tewkesbury and with growing
interest from medical device customers, aerospace and other industrial users,
this necessitated further production capacity to be enabled to meet the demand
foreseen.
In April 2021, the Company completed the acquisition of a 77,000 sq. ft.
freehold property in Stonehouse, Gloucestershire, for £2.8 million
("Stonehouse Site"). The property will enable the Company to significantly
increase its production capacity to meet the expected demand for its IHT
products. The factory refurb and fit out are underway with equipment
deliveries commencing, however there have been some supply chain delays to
machine deliveries in Q1 2022.
It is expected that the new Stonehouse Site will be in production at the end
of Q1 2022 to meet production demand with the first production shift now
recruited and being trained. It is anticipated that the Stonehouse Site will
be fully operational by June 2022.
The Fundraising has been sought to fund capital expenditure and provide
additional growth working capital. The Company has identified the following
funding requirement pursuant to this:
· Working capital impact of raw material supply chain issues of
£2.125 million; advanced payments are required to secure supply and there are
longer lead times on this;
· EV customer revenues - the move of these to the year ending 31
December 2022 has cost £1.125 million of contribution compared to the
Company's original forecast;
· The slow delivery of a surface mount machine experienced by the
Company will mean longer use of subcontractor component assembly, with an
incremental cost of £0.45 million;
· Additional increase in capacity that was not in its previous
budget of £0.9 million for an additional laser direct imaging machine;
· An additional £0.35 million in solar PV panels which are
predicted to save c. £0.1 million per annum; and
· An additional £1.0 million contingency working capital buffer.
The Company sets out herein, an Open Offer for Qualifying Shareholders to
subscribe for Ordinary Shares at the Issue Price to enable non-institutional
shareholders to participate as they may wish.
3. Use of proceeds
The Company is proposing to raise gross proceeds of approximately £6 million
from the Fundraising to meet the funding requirements described above. The use
of proceeds are expected to comprise:
Growth working capital £4.75m
Capital expenditure: additional laser direct imaging machine £0.90m
Capital expenditure: solar PV roofing (3.5 year forecast payback expected) £0.35m
£6.00m
In addition, Open Offer for additional growth working capital Up to £1.00m
4. Information on the Fundraising and terms of the Placing Agreement
The Company proposes to raise approximately £6 million (before expenses)
through the issue of the Placing Shares at the Issue Price. The Issue Price
represents a discount of 44.8 per cent. to the closing mid-market price of
an Ordinary Share of 145 pence on 15 December 2021, being the
Business Day prior to the announcement of the Fundraising.
Pursuant to the terms of the Placing Agreement finnCap, as agent and broker
for the Company, has conditionally agreed to use its reasonable endeavours to
place the Placing Shares with certain institutional and other investors. In
relation to the First Tranche Shares, the Placing Agreement is conditional
upon, amongst other things, First Tranche Admission. In relation to the Second
Tranche Shares, the Placing Agreement is conditional upon, amongst other
things, the Resolutions being duly passed at the General Meeting and Second
Tranche Admission becoming effective on or before 8.00 a.m. on 6 January 2022
(or such later time and/or date as the Company and finnCap may agree, but in
any event by no later than 8.00 a.m. on 31 January 2022).
The Placing Agreement contains warranties from the Company in favour of
finnCap in relation to, amongst other things, the accuracy of the information
in this document and other matters relating to the Company and its business.
In addition, the Company has agreed to indemnify finnCap and their affiliates
in relation to certain liabilities they may incur in respect of the Placing.
finnCap can terminate the Placing Agreement at any time prior to Admission in
certain circumstances, including in the event of a material breach of the
warranties given in the Placing Agreement, the failure of the Company to
comply with its obligations under the Placing Agreement, the occurrence of a
force majeure event which in finnCap's opinion make it inadvisable or
impractical to proceed with the Placing, or a material adverse change
affecting the financial, operational or legal condition of the Company. If
this right is exercised the Placing will not proceed. None of the Placing,
Subscription or Open Offer are being underwritten by finnCap. The Company has
agreed to pay certain fees and commissions to finnCap in respect of the
Fundraising.
Application will be made for the New Ordinary Shares to be admitted to trading
on AIM. It is expected that First Tranche Admission will become effective and
that dealings in the First Tranche Shares will commence at 8.00 a.m. on 20
December 2021. It is expected that, subject to the passing of the Resolutions,
Second Tranche Admission will become effective and that dealings in the Second
Tranche Shares will commence at 8.00 a.m. on 6 January 2022. The New Ordinary
Shares will, if and when issued, rank pari passu in all respects with the
Existing Ordinary Shares including the right to receive dividends and other
distributions declared following Admission.
5. Effect of the Placing, Subscription and Open Offer
Applications will be made for the First Tranche Shares and the Second Tranche
Shares to be admitted to trading on AIM. It is expected that Admission of the
First Tranche Shares will occur on or around 8.00 a.m. on 20 December 2021.
Conditional upon, inter alia, the passing of the Resolutions, it is
anticipated that Admission of the Second Tranche Shares will occur on or
around 8.00 a.m. on 6 January 2022.
Following Admission, the Company's Enlarged Share Capital will comprise
37,508,065 Ordinary Shares, each with voting rights in the Company. This
figure may 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 the interest in, the share capital of the Company
under the FCA's Disclosure Guidance and Transparency Rules.
6. Current trading and financial position
On 15 September 2021, the Company announced its interim results for the six
months ended 30 June 2021 and the Company has a 31 December financial year
end. For the ten months to 31 October 2021, the Company, has achieved:
· Total revenue of approximately £6.64 million (unaudited) (year
to 31 December 2020: £6.07 million)
· IHT revenue of £1.08 million (unaudited) (year to 31 December
2020: £0.60 million)
· Gross profit of £1.08 million (unaudited) (year to 31 December
2020: £1.72 million)
· Adjusted* EBITDA of £0.86 million (unaudited earnings before
interest, tax, depreciation and amortization) (year to 31 December 2020:
£0.77 million)
· Adjusted* operating loss before tax of £0.46 million (unaudited)
(year to 31 December 2020: £0.19 million)
· Adjusted* loss before tax of £0.70 million (unaudited) (year to
31 December 2020: £0.38 million)
· Reported loss after tax of £1.34 million (unaudited) (year to 31
December 2020: profit of £1.23 million)
*Before exceptional costs and share based payments (10 months ending 31
October 2021: £870k)
The Company has a total order book of £3.28 million (unaudited) (of which
£1.27 million is for delivery in the year ended 31 December 2021. Of this,
the IHT order book is £0.51 million (of which £0.12 million is for 2021
delivery) and the APCB order book is £2.74 million (of which £1.09 million
is for 2021 delivery). Total Group revenue for the year ended 31 December 2021
is expected to be approximately £8.0 million.
The Company has an IHT sales pipeline with 81 customers and opportunities in
total (excluding any early stage opportunities) including, but not limited to:
IHT opportunities: UK EV OEM customer - opportunities beyond the current
contract described above; EV and Aerospace: potential with other battery
management customers, including a pre-development phase opportunity with an
automotive large EU OEM potential customer; Medical: Cathprint, and several
other manufacturers and Motor Windings.
APCB opportunities: Within the existing customer base and the Company has also
been qualified by a global consumer electronics OEM.
Net debt (cash and cash equivalents less plant and machinery asset financing
debt and mortgage; excludes IFRS16 lease debt) at 31 October 2021 was
approximately £2.44 million (unaudited). The Company has an invoice
discounting facility with HSBC of up to £0.75 million available (undrawn as
at 31 October 2021) which is increasing to £2.25 million (c. 60 per cent. of
which is expected to be utilizable continually) which has been credit
approved. In addition to this, the Company has a £1.0 million asset financing
facility, of which
£0.3 million was drawn as at 31 October 2021), and also an undrawn new £2.49
million asset financing facility, expecting lender approval before 31 December
2021. The Company received an R&D tax credit of £270,000 in November 2021
with a total of £610,000 received in the year to date.
As also announced on 15 September 2021, Mark Hodgkins, Chief Financial
Officer, has indicated his intention to step down from the Board at the next
annual general meeting in 2022. The Board recruitment
process for Mark's successor is well progressed with the intention that a new
joiner will be with the Company well in time for a suitable hand over period.
7. Director participation in the Placing, Subscription and Open Offer
The following Directors have agreed to subscribe for an aggregate of 87,500
Placing Shares and 12,500 Subscription Shares as set out below.
Director Board Position Amount (£) Number of Placing Shares at the Issue Price Number of Subscription Shares at the Issue Price Holding of Ordinary Shares post-Admission* % of Enlarged Issued Share Capital*
Phillip Johnston CEO £40,000** 50,000 - 6,738,394 17.97%
Mark Hodgkins CFO £25,000 31,250 - 200,119 0.53%
Susan McEarlain Non-Executive Director £5,000 6,250 - 13,750 0.04%
Charles Cattaneo Non-Executive Director £10,000 - 12,500 27,500 0.07%
*Assuming the Open Offer is fully taken up.
**Subscription for these Placing Shares by the wife of Philip Johnston
8. Related Party Transaction
The Directors' aggregate participation in the Fundraising, as set out above,
constitutes a related party transaction pursuant to Rule 13 of the AIM Rules.
The Company's independent director (being Ian Griffiths) considers, having
consulted with the Company's nominated adviser, finnCap, that the terms upon
which the Directors are participating in the Fundraising are fair and
reasonable insofar as the Company's shareholders are concerned.
9. General Meeting
The Directors do not currently have sufficient authority to allot in full the
New Ordinary Shares. Accordingly, the Board is seeking the approval of
Shareholders to allot the Second Tranche Shares at the General Meeting,
together with approval to disapply pre-emption rights.
Shareholders should be aware that if any of the Resolutions are not passed,
the issue of the Second Tranche Shares and the Open Offer will not proceed.
A notice convening the General Meeting, which is to be held at 10.00 a.m. on 5
January 2022 at the offices of the Company at 1 Ashvale, Alexandra Way,
Tewkesbury, Gloucestershire GL20 8NB, is set out at the end of this document.
A Form of Proxy for use by the Shareholders in connection with the General
Meeting is also enclosed. At the General Meeting, the following Resolutions
will be proposed:
Resolution 1 is an ordinary resolution and requires a simple majority of those
voting to vote in favour of that Resolution 1. Resolution 2 is a special
resolution and will require not less than 75 per cent. of those voting in
person or on a poll by proxy to vote in favour of this Resolution 2.
The authorities to be granted pursuant to Resolution 1 and Resolution 2 shall
expire on the date which is 15 months from the date of the Resolutions or if
earlier the conclusion of the next annual general meeting of the Company
(unless renewed, varied or revoked by the Company prior to or on that date).
10. Open Offer
In order to provide Shareholders with an opportunity to participate, the
Company is inviting all Qualifying Shareholders to subscribe at the Issue
Price for an aggregate of 1,250,336 Open Offer Shares at the Issue Price. This
allows those Shareholders to participate on a pre-emptive basis whilst
providing additional capital for the Company. Any Placees who are existing
Shareholders of the Company will not be entitled to take part in the Open
Offer.
The Open Offer is specifically structured to provide an opportunity for
participation in the Fundraising by the Company's existing Shareholder base.
Qualifying Shareholders are reminded that Shareholders taking part in the
Placing and Subscription will not be entitled to take part in the Open Offer
and that therefore the up to 1,250,336 Open Offer Shares, raising up to
approximately £1 million, are only available to a smaller pool of Existing
Ordinary Shareholders. If there are no applications under the Excess
Application Facility, not all of the £1 million would be raised. The Excess
Application Facility is part of the Open Offer and not available to those
taking part in the Placing and Subscription.
The Directors of the Company who hold Ordinary Shares, representing in
aggregate approximately 24.1 per cent. of the Company's current issued share
capital as at the date of this announcement, will not be participating in the
Open Offer.
Qualifying Shareholders are being given the opportunity to apply for
additional Open Offer Shares in excess of their pro rata entitlements. The
Open Offer Shares have not been placed subject to clawback and have not been
underwritten.
The latest time for application under the Open Offer to be received is 11.00
a.m. on 4 January 2022. The procedure for application and payment depends on
whether, at the time at which application and payment is made, you have an
Application Form in respect of your Open Offer Entitlements or have Open Offer
Entitlements credited to your stock account in CREST in respect of such
entitlement. Further details of the Open Offer are set out in Part II of this
document.
11. Actions to be taken
Please check that you have received the following with this document:
• A reply-paid Form of Proxy for use in respect of
the General Meeting;
You are strongly encouraged to complete, sign and return your Form of Proxy in
accordance with the instructions printed thereon as soon as possible, but in
any event so as to be received, by post or, during normal business hours only,
by hand, by no later than 10.00 a.m. on 31 December 2021 (or, in the case of
an adjournment of the General Meeting, not later than 48 hours before the time
fixed for the holding of the adjourned meeting).
If you hold your shares in the Company in uncertificated form (that is, in
CREST) you 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
this document). Proxies submitted via CREST must be received by the Company's
Registrar (Equiniti) by no later than 10.00 a.m. on 31 December 2021 (or, in
the case of an adjournment, not later than 48 hours before the time fixed for
the holding of the adjourned meeting).
Appointing a proxy in accordance with the instructions set out above will
enable your vote to be counted at the General Meeting. The action to be taken
by Qualifying Shareholders in connection with the Open Offer is set out in
Part II of this document.
If you are in any doubt as to what action you should take, you should
immediately seek your own personal financial advice from your stockbroker,
bank manager, solicitor, accountant or other independent professional adviser
duly authorised under the FSMA if you are resident in the United Kingdom or,
if not, from another appropriately authorised independent financial adviser.
12. Recommendation
Shareholders should be aware that if the Resolutions are not approved at the
General Meeting, admission of the Second Tranche Shares will not occur and
only part of the net proceeds will be received by the Company. If this were to
happen, the Group would have to find urgent alternative funding. The Directors
believe that the Resolutions to be proposed at the General Meeting are in the
best interests of the Company and Shareholders as a whole and unanimously
recommend that Shareholders vote in favour of the Resolutions.
The Directors intend to vote in favour of the Resolutions in respect of, in
aggregate, 6,919,049 Existing Ordinary Shares, representing approximately 24
per cent. of the Existing Ordinary Shares.
Yours faithfully
Ian Griffiths
Chairman
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Record date for entitlements under the Open Offer close of business on 14 December 2021
Ex-entitlement date for Open Offer 8 a.m. on 16 December 2021
Publication of this document, Form of Proxy and Application Form 16 December 2021
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to 8 a.m. on 17 December 2021
stock accounts of Qualifying CREST Shareholders
Admission and commencement of dealings in the Tranche 1 Placing Shares and 8 a.m. on 20 December 2021
Subscription Shares on AIM
CREST accounts credited in respect of Tranche 1 Placing Shares and On or soon after 8 a.m. on 20 December 2021
Subscription Shares in uncertificated form
Recommended latest time for withdrawal of Open Offer Entitlements from CREST 4:30 p.m. on 24 December 2021
Latest time for depositing Open Offer in to CREST 3:00 p.m. on 29 December 2021
Latest time and date for splitting of Application Forms (to satisfy bona fide 3:00 p.m. on 30 December 2021
market claims only)
Latest time and date for receipt of Forms of Proxy 10:00 a.m. on 31 December 2021
Latest time and date for receipt of completed Application Forms and payment in 11:00 a.m. on 4 January 2022
full under the Open Offer
General Meeting 10:00 a.m. on 5 January 2022
Announcement of the results of the General Meeting and Open Offer 5 January 2022
Admission and commencement of dealings in the Tranche 2 Placing Shares and the 8:00 a.m. on 6 January 2022
Open Offer Shares on AIM
CREST accounts credited in respect of Tranche 2 Placing Shares and Open Offer On or soon after 8 a.m. on 6 January 2022
Shares in uncertificated form
Dispatch of definitive share certificates for Placing Shares, Subscription 18 January 2022
Shares and Open Offer Shares in certificated form
ISSUE STATISTICS
Number of Existing Ordinary Shares 28,757,729
Issue Price 80 pence
Number of Placing Shares 7,487,500
Number of Subscription Shares 12,500
Number of Open Offer Shares* 1,250,336
Proceeds of the Fundraising (before expenses)* £7.0 million
Enlarged Share Capital following First Tranche Admission 30,179,014
Enlarged Share Capital following Second Tranche Admission (1)* 37,508,065
Percentage of Enlarged Share Capital represented by the Placing Shares, the 23.3 per cent.
Subscription Shares and the Open Offer Shares(1)*
Market Capitalisation of the Company at the Issue Price upon Admission(1)* £30.0 million
Notes:
1.
Assuming full issuance of the Placing Shares, Subscription Shares and Open Offer Shares
*Assuming the Open Offer is taken up in full
DEFINITIONS
The following definitions apply throughout this document (including the Notice
of General Meeting) and the Form of Proxy unless the context requires
otherwise:
"Admission" the admission of the Placing Shares and the Open Offer Shares to trading on
AIM becoming effective in accordance with the AIM Rules
"AIM" AIM, a market operated by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies published by the London Stock Exchange from time
to time
"Application Form" the personalised application form to be posted to Qualifying Shareholders for
use in connection with the Open Offer
"Board" or "Directors" the directors of the Company whose names are set out on page 6 of this
document
"Business Day" any day on which banks are usually open in England and Wales for the
transaction of sterling business, other than a Saturday, Sunday or public
holiday
"certificated" or "in certificated form" a share or other security not held in uncertificated form (that is, not in
CREST)
"Chairman" the chairman of the Board
"Company" or "Trackwise" Trackwise Designs plc, a company incorporated in England and Wales with
registered number 03959572
"CREST" a relevant system (as defined in the CREST Regulations) in respect of which
Euroclear is the Operator (as defined in the CREST Regulations)
"CREST Manual" the CREST Manual referred to in agreements entered into by Euroclear and
available at www.euroclear.com
"CREST member" a person who has been admitted to CREST as a system-member (as defined in the
CREST Regulations)
"CREST member account ID" the identification code or number attached to a member account in CREST
"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 payment" shall have the meaning given in the CREST Manual
"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001/3755) as amended from
time to time
"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
"Enlarged Share Capital" the issued share capital of the Company immediately after Admission as
enlarged by the issue and allotment of the Placing Shares, Subscription Shares
and the Open Offer Shares
"Excess Application Facility" the arrangement under which Qualifying Shareholders may apply for any number
of Open Offer Shares in excess of their own Open Offer Entitlement
"Excess CREST Open Offer Entitlement" in respect of each Qualifying Shareholder the entitlement (in addition to
their own Open Offer Entitlement) to apply for Open Offer Shares pursuant to
the Excess Application Facility
"Existing Ordinary Shares" the issued share capital of the Company as at the date of this document, being
28,757,729 Ordinary Shares
"Euroclear" Euroclear UK & Ireland Limited
"Financial Conduct Authority" or "FCA" the Financial Conduct Authority (and its predecessor, the Financial Services
Authority) in its capacity as the competent authority for the purposes of Part
VI of FSMA
"First Tranche Admission" admission of the First Tranche Shares to trading on AIM becoming effective in
accordance with the AIM Rules
"First Tranche Shares" 1,421,285 New Ordinary Shares to be issued pursuant to the first tranche of
the Placing and the Subscription
"Form of Proxy" the enclosed 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 Placing, the Subscription and the Open Offer
"General Meeting" the general meeting of the Company to be held at 10:00 a.m. on 5 January 2022
(or any reconvened meeting following any adjournment of the general meeting),
notice of which is set out in this document
"IHT" Improved Harness Technology, being flexible multilayer printed circuit boards
of unlimited length
"Issue Price" 80 pence per New Ordinary Share
"London Stock Exchange" London Stock Exchange plc
"Money Laundering Regulations" the money laundering and terrorist financing provisions of the Criminal
Justice Act 1993, the Terrorism Act 2000, the Proceeds of Crime Act 2002, the
Terrorism Act 2006 and the Money Laundering Regulations 2007, the Money
Laundering, Terrorist Financing and Transfer of Funds (Information on the
Payer) Regulations 2017
"New Ordinary Shares" the new Ordinary Shares to be issued by the Company pursuant to the
Fundraising
"Notice" or "Notice of General Meeting" the notice of the General Meeting set out in this document
"Open Offer" the offer to Qualifying Shareholders, being an invitation to apply for Open
Offer Shares on the terms and conditions set out in this document and, where
applicable, the Application Form
"Open Offer Entitlement" an entitlement of a Qualifying Shareholder pursuant to the Open Offer to apply
for 1 Open Offer Share for every 23 Existing Ordinary Shares held by them at
the Record Date
"Open Offer Shares" the 1,250,336 New Ordinary Shares which are the subject of the Open Offer
"Ordinary Shares" ordinary shares of 4 pence each in the share capital of the Company
"Overseas Shareholders" shareholders who are resident in or a citizen of a country outside the United
Kingdom
"Placees" subscribers for the Placing Shares
"Placing" the conditional placing by finnCap, as agent of and on behalf of the Company,
of the Placing Shares on behalf of the Company on the terms and subject to the
conditions contained in the Placing Agreement
"Placing Agreement" the conditional placing agreement dated 15 December 2021 between the Company
and finnCap relating to the Placing
"Placing Shares" the New Ordinary Shares to be issued to Placees pursuant to the Placing
"Proposals" the Placing, Subscription and the Open Offer and other matters contained in
this document
"Prospectus 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
"Qualifying CREST Shareholders" Qualifying Shareholders holding Existing Ordinary Shares in uncertificated
form via CREST
"Qualifying non-CREST Shareholders" Qualifying Shareholders holding Existing Ordinary Shares in certificated form
"Qualifying Shareholders" shareholders whose Ordinary Shares are on the register on the Record Date with
the exception of Overseas Shareholders
"Resolutions" the resolutions to be proposed at the General Meeting, as set out in the
Notice of General Meeting
"Restricted Jurisdiction" United States of America, Canada, Australia, Japan, New Zealand and the
Republic of South Africa and any other jurisdiction where the extension or
availability of the Fundraising would breach any applicable law
"Shareholders" holders of Ordinary Shares
"Subscriber" the subscriber for the Subscription Shares pursuant to the Subscription
"Subscription" the subscription of 12,500 New Ordinary Shares by the Subscriber pursuant to
the Subscription Letters
"Subscription Letter" the conditional subscription letter dated 15 December 2021 between the Company
and the Subscriber in connection with the Subscription
"Subscription Shares" the 12,500 New Ordinary Shares allotted and to be issued pursuant to the
Subscription Letter and which are expected to be admitted to trading on AIM in
First and Second Tranche Admissions
"stock account" an account within a member's account in CREST to which a holding of a
particular share or other security in CREST is credited
"Second Tranche Admission" admission of the Second Tranche Shares to trading on AIM becoming effective in
accordance with the AIM Rules
"Second Tranche Shares" the Placing Shares and Subscription Shares (other than those forming part of
the First Tranche Shares) and the Open Offer Shares
"uncertificated" or "in uncertificated form" recorded on the register of members of the Company as being held in
uncertificated form in CREST and title to which, by virtue of the CREST
Regulations, may be transferred by means of CREST
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland
"UK Listing Authority" the FCA acting in its capacity as the competent authority for the purposes of
Part VI of FSMA
"United States" or "US" the United States of America
"£", "pounds sterling", "penny" or "pence" UK pounds sterling, the lawful currency of the United Kingdom
In addition, pursuant to the split First and Second Tranche Admissions, the
participating Directors will complete their First Tranche Admission
participation. Their remaining investment will follow at the time of Second
Tranche Admission.
1 Details of the person discharging managerial responsibilities ("PDMR") /
person closely associated ("PCA")
a) Name Philip Johnston
2. Reason for the Notification
a) Position/status Chief Executive Officer
b) Initial notification/Amendment Initial notification
3. Details of the issuer, emission allowance market participant, auction
platform, auctioneer or auction monitor
a) Name Trackwise Designs plc
b) LEI 549300KQIX5EWTJMFK75
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 4 pence each
Identification code GB00BFYT9999
b) Nature of the transaction Purchase of Ordinary Shares
c) Price(s) and volume(s) Price(s) Volume(s)
80p 9,475
d) Aggregated information: See 4c) above
· Aggregated volume
· Price
e) Date of the transaction 20 December 2021
f) Place of the transaction London Stock Exchange, AIM Market (XLON)
d)
Aggregated information:
· Aggregated volume
· Price
See 4c) above
e)
Date of the transaction
20 December 2021
f)
Place of the transaction
London Stock Exchange, AIM Market (XLON)
1 Details of the person discharging managerial responsibilities ("PDMR") /
person closely associated ("PCA")
a) Name Mark Hodgkins
2. Reason for the Notification
a) Position/status Chief Financial Officer
b) Initial notification/Amendment Initial notification
3. Details of the issuer, emission allowance market participant, auction
platform, auctioneer or auction monitor
a) Name Trackwise Designs plc
b) LEI 549300KQIX5EWTJMFK75
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 4 pence each
Identification code GB00BFYT9999
b) Nature of the transaction Purchase of Ordinary Shares
c) Price(s) and volume(s) Price(s) Volume(s)
80p 5,922
d) Aggregated information: See 4c) above
· Aggregated volume
· Price
e) Date of the transaction 20 December 2021
f) Place of the transaction London Stock Exchange, AIM Market (XLON)
d)
Aggregated information:
· Aggregated volume
· Price
See 4c) above
e)
Date of the transaction
20 December 2021
f)
Place of the transaction
London Stock Exchange, AIM Market (XLON)
1 Details of the person discharging managerial responsibilities ("PDMR") /
person closely associated ("PCA")
a) Name Susan McErlain
2. Reason for the Notification
a) Position/status Non-Executive Director
b) Initial notification/Amendment Initial notification
3. Details of the issuer, emission allowance market participant, auction
platform, auctioneer or auction monitor
a) Name Trackwise Designs plc
b) LEI 549300KQIX5EWTJMFK75
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 4 pence each
Identification code GB00BFYT9999
b) Nature of the transaction Purchase of Ordinary Shares
c) Price(s) and volume(s) Price(s) Volume(s)
80p 1,184
d) Aggregated information: See 4c) above
· Aggregated volume
· Price
e) Date of the transaction 20 December 2021
f) Place of the transaction London Stock Exchange, AIM Market (XLON)
d)
Aggregated information:
· Aggregated volume
· Price
See 4c) above
e)
Date of the transaction
20 December 2021
f)
Place of the transaction
London Stock Exchange, AIM Market (XLON)
1 Details of the person discharging managerial responsibilities ("PDMR") /
person closely associated ("PCA")
a) Name Charles Cattaneo
2. Reason for the Notification
a) Position/status Non-Executive Director
b) Initial notification/Amendment Initial notification
3. Details of the issuer, emission allowance market participant, auction
platform, auctioneer or auction monitor
a) Name Trackwise Designs plc
b) LEI 549300KQIX5EWTJMFK75
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 4 pence each
Identification code GB00BFYT9999
b) Nature of the transaction Purchase of Ordinary Shares
c) Price(s) and volume(s) Price(s) Volume(s)
80p 2,368
d) Aggregated information: See 4c) above
· Aggregated volume
· Price
e) Date of the transaction 20 December 2021
f) Place of the transaction London Stock Exchange, AIM Market (XLON)
d)
Aggregated information:
· Aggregated volume
· Price
See 4c) above
e)
Date of the transaction
20 December 2021
f)
Place of the transaction
London Stock Exchange, AIM Market (XLON)
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