REG - Trackwise Designs - Proposed Placing and Open Offer
14/12/2022 07:00
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RNS Number : 6613J Trackwise Designs PLC 14 December 2022
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 via Accelerated Bookbuild, Subscription and Open Offer
Issue of Warrants and Capital Reorganisation
Board Changes
and
Notice of General Meeting
Trackwise Designs (AIM: TWD), a leading manufacturer of specialist products
using printed circuit technology, is pleased to announce a proposed
conditional placing to raise gross proceeds of £3.65 million by way of the
issue of an aggregate of up to 364,524,700 New Ordinary Shares pursuant to a
Placing of up to 364,224,700 New Ordinary Shares and a Subscription of 300,000
New Ordinary Shares at an Issue Price of 1 pence per New Ordinary Share.
finnCap is acting as sole Bookrunner in connection with the Placing. The
Placing will be conducted by way of an accelerated Bookbuild, which will be
launched immediately following this Announcement, in accordance with the terms
and conditions set out in the Appendix to this Announcement.
In addition, the Company proposes to raise up to a further approximately £1.5
million by the issue of up to 149,999,860 New Ordinary Shares pursuant to an
Open Offer to Qualifying Shareholders, on the basis of 1 Open Offer Share for
every 0.250054 Existing Ordinary Shares held on the Record Date, also at the
Issue Price (the Placing, Subscription and Open Offer, together the
"Fundraising").
The Company also proposes to issue Warrants to subscribers in the Placing,
Subscription and Open Offer granting rights to subscribe for 1 additional
Ordinary Share for each Warrant held in the ratio of 1 Warrant for every 2 New
Ordinary Shares issued to those subscribers (the "Warrants"). The Warrants are
exercisable at a price of 6 pence per Ordinary Share during the three year
Warrant Exercise Period.
The Fundraising requires Shareholder Resolutions to be passed by the Company's
Shareholders.
Highlights:
· Placing and Subscription with new and existing institutional and
other investors to raise gross proceeds of £3.65 million plus an Open Offer
to raise up to an additional £1.5 million.
· If (assuming full take up under the Open Offer) all Warrants are
exercised in due course, the Company would receive additional gross proceeds
of up to £15.44 million.
· As previously announced, a New Commercial Order was entered into
with Trackwise's EV OEM customer in October 2022. This New Commercial Order
provided for a £3.99 million advanced payment, which was received in October
2022, with the balance of the contract value (being an additional £3.99
million) due to be satisfied by standard payments on delivery of the products
in 2023.
· The Stonehouse Site factory refurbishment and fit out is now largely
complete. Equipment installation and commissioning is nearing completion. The
Company expects to commence volume production at the Stonehouse Site for the
EV OEM customer in Q1 of 2023, with first cash receipts for production parts
expected in early April 2023. Production of the New Commercial Order is
planned to be complete by July 2023.
· The Placing proceeds will give the Company an expected cash runway
through to start of production of the New Commercial Order, and then upon
completion of this production a further runway to August 2023. Funds from the
Open Offer will help provide some contingency cover to deal with any potential
risks associated with start of production.
· Trackwise continues to have a significant pipeline of identified
IHT sales opportunities, which includes >£1 billion(1) of potential demand
for EV battery cell connection systems ("CCS") for OEMs, with Trackwise as a
Tier 1 or a Tier 2 supplier, and also for other Medical and Aerospace sales
opportunities.
· The prospects for IHT and for the Company are dominated by the EV CCS
pipeline; in particular cell-to-pack and securing one or more supplier
nominations is a key business objective. According to information available to
the Company, Q1 and Q2 2023 will see supplier nominations for two major
programs (OEMs B and C), with Trackwise in each case having summitted a
submission to a Tier 1 in response to a request for proposal ("RFP") received
by Trackwise.
· Trackwise is actively exploring longer term strategic investment
partnerships with larger global businesses in order to support development and
conversion of the significant pipeline of identified IHT sales opportunities.
· At Admission, Andrew Lapping and Chris Pennison are to join the Board,
with Ian Griffiths and Susan McErlain stepping down at the same time in order
to maintain Board numbers and to control the cost base. Further details,
including their intended investment, is detailed below. In addition, Charles
Cattaneo intends to step down from the Board at the end of January 2023, and
the Company will shortly commence a recruitment process for an additional
non-executive director.
Philip Johnston, CEO of Trackwise, commented:
"It is of course a matter of deep regret that we have found ourselves forced
to come to the market on these terms. We very much appreciate the support
shown by existing investors and welcome new shareholders to Trackwise. We look
forward to commencing production at Stonehouse for our EV OEM customer, and
continue to work hard to convert our IHT sales pipeline into new production
contracts.
"I would like to thank Ian, Susan and Charles for their contribution to
Trackwise and I am very much looking forward to working with Andrew and
Chris."
Open Offer
Further details are provided below.
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 on 15 December 2022 giving
notice of a General Meeting of the Company. The meeting will be held on 6
January 2022 at 10:00 a.m. at the offices of the Trackwise at 1 Ashvale,
Alexandra Way, Tewkesbury GL20 8NB. Following posting, a copy of the Circular
will available on 15 December 2022 on the Company's website
www.trackwise.co.uk (http://www.trackwise.co.uk) .
In proposing the terms of the Fundraising, the Board has pursued a number of
routes to raising funds including agreeing the advance payment from the UK EV
OEM. However, the Board believes it has now exhausted any potentially more
attractive routes that could have been capable of delivering sufficient funds
in time with sufficient certainty and has been left with no alternative but to
proceed with the Fundraising at a very significant discount and with the issue
of the Warrants. The Board understands the implications for Shareholders and
has given Shareholders who have not participated in the Placing the
opportunity to participate in the fundraising through the Open Offer.
Shareholders should be aware that if the Resolutions are not approved at the
General Meeting, the Fundraising will not occur and the net proceeds will not
be received by the Company. If this were to happen, to continue to trade, the
Group would have to find urgent alternative funding and the Board do not
believe that sufficient funding would be available in time to avoid an
insolvency event.
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 all of the Resolutions in respect
of, in aggregate, 6,854,143 Existing Ordinary Shares, representing
approximately 18.27 per cent. of the Existing Ordinary Shares.
Accelerated Bookbuild
The timing for the close of the Bookbuild and allocation of the Placing Shares
shall be at the absolute discretion of finnCap, in consultation with the
Company. The final number of Placing Shares to be issued pursuant to the
Placing will be agreed by finnCap and the Company at the close of the
Bookbuild. The result of the Placing will be announced as soon as practicable
thereafter. The Placing is not underwritten. The Placing Shares are not
subject to clawback and are not part of the Open Offer.
(1) Based on Directors' expectations of OEMs A, B, C, E , F & G demand and
pricing
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)1684 299 930
Philip Johnston, CEO www.trackwise.co.uk (http://www.trackwise.co.uk/)
Paul Cook, CFO
finnCap Ltd +44 (0)20 7220 0500
NOMAD and Broker
Ed Frisby/Fergus Sullivan - Corporate Finance
Andrew Burdis/Barney Hayward - ECM
Alma PR +44 (0)20 3405 0205
Financial PR and IR
David Ison/Caroline Forde/Josh Royston/Kieran Breheny
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 harnesses in a variety of
industries.
The Company operates from three sites, located in Tewkesbury, Stonehouse and
Stevenage. It serves customers in Europe and North America.
Trackwise Designs plc was admitted to trading on AIM in 2018 with the ticker
TWD. For additional information please visit www.trackwise.co.uk
(http://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 14 December 2022 that it had conditionally raised
£3.65 million (before expenses) by the issue of up to 364,224,700 New
Ordinary Shares pursuant to the Placing and the Subscription of a total of up
to 300,000 New Ordinary Shares both at 1.0 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 £1.50 million by the issue of up to 149,999,860 New Ordinary
Shares also at the Issue Price.
The Company proposes to issue Warrants to subscribers in the Placing,
Subscription and the Open Offer, granting rights to subscribe for additional
Ordinary Shares held in the ratio of one Warrant for every two New Ordinary
Shares. The Warrants are exercisable at a price of 6 pence per Ordinary Share
during the three year Warrant Exercise Period.
The Fundraising is conditional on, inter alia, the passing of the Resolutions
by the Shareholders at the General Meeting. If the Resolutions are passed, the
New Ordinary 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
9 January 2023. Should Shareholder approval not be obtained at the General
Meeting, neither the Placing, the Subscription nor the Open Offer will
proceed. 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 all of the
Resolutions, as they intend to in respect of the Ordinary Shares held by them,
which represent in aggregate approximately 18.27 per cent. of the Existing
Ordinary Shares.
Shareholders should be aware that if the Resolutions are not approved at the
General Meeting, the Fundraising will not occur and the net proceeds will not
be received by the Company. If this were to happen, to continue to trade, the
Group would have to find urgent alternative funding and the Board do not
believe that sufficient funding would be available in time to avoid an
insolvency event.
2. Background to and reasons for the Fundraising
History and background
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). In 2012 the Company began the development of Improved Harness
TechnologyTM (IHT), being flexible multilayer printed circuit boards of
unlimited length.
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,
China and 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 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 the Tewkesbury site on IHT.
Product Manufacture and Supply Agreement with EV OEM
In September 2020 the Company announced the culmination of 2 years'
development work with a UK EV OEM (the "EV OEM") for the supply of flexible
printed circuit boards for use in high voltage battery modules, made using the
technology and know-how developed by the business for its IHT product. The
contract (a product manufacture and supply agreement, the "PMSA") was extended
in June 2021 to a 4 year contract and had the potential to generate revenues
of up to £54 million over that period (previously up to £38 million).
Stonehouse Site acquisition
In April 2021 the Company acquired a 77,000 sq. ft. freehold property in
Stonehouse, Gloucestershire ("Stonehouse Site") to enable the Company to
significantly increase its production capacity to meet expected demand for its
IHT products; with the Stonehouse Site to become a roll to roll flexible
printed circuit manufacturing and assembly facility set up for high volume,
low mix, and with the Tewkesbury site remaining an engineering led facility
focused on IHT product development and new product introduction.
New Agreement with EV OEM
The Company's performance is closely linked to that of its first IHT
production customer and the EV OEM announced on 11 August 2022 that it
expected lower production volumes in 2022 compared to previous estimates. The
announcement of the lower production volumes had a knock-on impact on the
availability, to the Company, of the planned asset-backed debt funding for the
remaining pieces of capital expenditure at the new Stonehouse Site and, in
addition, increased the Company's short-term cash requirements. Accordingly,
the Company entered in to discussions with the EV OEM and on 21 October 2022
replaced the PMSA with a new contractual agreement.
The new agreement (the "New Commercial Order") was entered into for a fixed
quantity of flexible printed circuit boards due to be delivered through to
July 2023. This New Commercial Order provided for a £3.99 million advanced
payment, which was paid in October 2022, with the balance of the contract
value (being an additional £3.99 million) satisfied by standard payments on
delivery of the products.
The advanced payment is secured by a legal charge over various manufacturing
assets involved in the production of the circuit boards at the Stonehouse
Site. The charge will be released upon completion of the supply of the full
contracted quantity. Completion of the new contract and release of the charge
will conclude contractual arrangements between the two companies. Any further
supply of existing parts, or development of new parts for the EV OEM, will be
under new arrangements to be agreed with the EV OEM.
Stonehouse Site investment
Total investment at the Stonehouse Site is expected to total £24 million by
the time of start of production. The Stonehouse Site factory refurbishment and
fit out is now largely complete which, together with its purchase, has cost
£6 million. Equipment installation and commissioning is nearing completion,
with total spend at completion expected to be £13 million. Stonehouse Site
project start-up costs will have totaled £5 million.
The Company expects to commence volume production at the Stonehouse Site for
the EV OEM customer in Q1 of 2023, with first cash receipts for production
parts expected in early April 2023. The first production shift are being
recruited and trained although that has been delayed by the necessary fund
raising process we have been going through, and production is planned to be
complete by July 2023.
The Fundraising, together with cashflows from the New Commercial Order, are
expected to fund the Company through to completion of the New Commercial Order
in July 2023.
The Company sets out in this document, an Open Offer for Qualifying
Shareholders to subscribe for Ordinary Shares at the Issue Price to enable
shareholders to participate as they may wish.
3. Use of proceeds
The Company is proposing to raise gross proceeds of £3.65 million from the
Placing and Subscription to meet the funding requirement described above. The
use of proceeds are expected to comprise:
Growth working capital, Stonehouse Site start-up costs, and
contingency
£0.40 million
Completion of Stonehouse Site capital
expenditure
£0.72 million
Interest and
borrowing
£2.53 million
Total
£3.65 million
In addition, the proceeds of the Open Offer to provide headroom
and
Up to
additional growth working
capital
£1.50 million
In the interim results for the six months ended 30 June 2022, the Company
reported a loss before and after tax. The Board does not anticipate the Group
to be cash generative in the second half of its 2022 financial year. It is
anticipated that the Placing proceeds would give the Company an expected cash
runway through to start of production of the New Commercial Order, and then
upon completion of this production a further runway to August 2023. Any cash
received from the Open Offer helps provide some contingency cover to deal with
any potential risks associated with start of production. However, following
completion of delivery of the parts pursuant to the New Commercial Order, and
in the absence of significant new orders, the final four months of 2023 and
beyond is expected to see further cash out flow from the business due to the
Group's forecast cost base.
Therefore, the Fundraising is not expected to be sufficient to fund the cash
requirements of the Group through to a position where it is able to fund
itself from its own cashflow. It is likely that the Group will need to raise
additional funding by the end of the third quarter of 2023 and, whilst the
Directors believe that future funding may be available, potentially in the
form of a strategic investment from an industry -based investor, there can be
no guarantee that sufficient funds could be raised at a later date. Any
additional equity financing, if available, may be dilutive to Shareholders.
4. Information on the Fundraising and terms of the Placing Agreement
The Company proposes to raise £3.65 million (before expenses) through the
issue of the Placing Shares and Subscription Shares at the Issue Price. The
Issue Price represents a discount of 92.09 per cent. to the closing mid-market
price of an Ordinary Share of 12.65 pence on 13 December 2022, 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
through an accelerated bookbuild. The Placing Agreement is conditional upon,
amongst other things, the Resolutions being duly passed at the General Meeting
and Admission becoming effective on or before 8.00 a.m. on 9 January 2023 (or
such later time and/or date as the Company and finnCap may agree, but in any
event by no later than 5.30 p.m. on 27 January 2023).
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.
5. Admission of the Placing, Subscription and Open Offer to AIM
Application will be made for the Placing Shares, the Subscription Shares and
the Open Offer Shares to be admitted to trading on AIM. Conditional upon,
inter alia, the passing of the Resolutions, it is anticipated that Admission
will occur on or around 8.00 a.m. on 9 January 2023. 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.
6. Financial position, current trading and outlook
Net debt position
Net debt (cash and cash equivalents less plant and machinery asset financing,
invoice discounting, and mortgage; excludes IFRS16 right of use lease
liabilities) as at 30 November 2022 was approximately £8.48 million
(unaudited) (31 December 2021: £2.10 million). Once the charge under the New
Commercial Order is released the Company will have unencumbered assets with a
cost of at least £4.0 million that would be available for refinancing. The
Company expects to receive an R&D tax credit of £631,000 in cash in
January 2023, and SCL expects to receive an R&D tax credit of £251,000 in
cash in December 2022.
Current financial year trading
On 30 September 2022, the Company announced its interim results for the six
months ended 30 June 2022 and the Company has a 31 December financial year
end. The interim results included other operating income (not included in
revenue) of £729,000, of which £698,000 was partial recognition of the
estimated compensation which at the time was expected to be subsequently due
as a result of the EV OEM's order shortfall against the guaranteed minimum
volumes set out in the original contract; this was an estimate and subject to
a significant degree of judgement in respect of the commercial negotiations.
Following the publication of the interim results the commercial negotiations
were concluded and the New Commercial Order was entered into. Under the terms
of the New Commercial Order the Company will recognise revenue from the
contract upon delivery of products, which is expected to begin in Q1 of 2023.
As a result the Company will be unable to recognise any other operating income
related to the New Commercial Order in the financial year ending 31 December
2022.
For the ten months to 31 October 2022, the Company, has achieved:
· Total revenue of approximately £6.10 million (unaudited) (year
to 31 December 2021: £8.01 million)
· IHT revenue of £0.78 million (unaudited) (year to 31 December
2021: £1.48 million)
· Adjusted* EBITDA of £0.17 million (unaudited) (earnings before
interest, tax, depreciation and amortization) (year to 31 December 2021:
£0.81 million)
· Adjusted* operating loss of £1.50 million (unaudited) (year to
31 December 2021: loss of £0.58 million)
· Loss before tax of £5.7 million (unaudited) (year to 31 December
2021: £1.98 million)
*Before share based payments (10 months ended 31 October 2022 of £0.03
million (unaudited) (year to 31 December 2021: £0.15 million) and exceptional
costs (10 months ended 31 October 2022 of £3.83 million (unaudited), being
new facility set up costs and inefficient production of initial volumes at the
Ashvale facility (year to 31 December 2021: £0.94 million).
In the APCB division based in Stevenage at SCL, following a disappointing
first half in 2022, a new managing director was appointed in July 2022; the
business has started to see improved operations and performance, and this is
expected to continue to improve in the medium term.
Orderbook, sales pipeline, and outlook
In addition to 2023 orders from the EV OEM pursuant to the New Commercial
Order totaling £7.99 million, the Company has a further order book (IHT and
APCB combined) of £2.75 million (unaudited) (of which £0.69 million is for
delivery in the year ended 31 December 2022).
The Company's IHT sales pipeline includes potential new EV customers for
Battery CCS (cell connection systems), including both cell-to-pack, and
battery packs, including modules including the following:
Electric Vehicles (EV):
· As shown in the table below there are CCS opportunities for six
EV OEMs, totaling more than £1 billion of potential demand (based on
Directors' expectations of OEMs A, B, C, E, F & G demand and pricing),
with the Company as a Tier 1, or Tier 2 supplier.
· CCS opportunity with one battery storage business.
Within an EV, individual cells (cylindrical, pouch, prismatic) need to be
combined in parallel and/or in series to provide the required electrical
performance and this combination can be done via intermediate building blocks
- modules - with the modules subsequently built into a battery pack, or
directly into a pack; cell-to-pack. From a vehicle perspective, cell-to-pack
provides higher mass and volume integration efficiencies and from the
Company's perspective, the cell-to-pack CCS are long - vehicle size (approx.
2metres) in length. The Company understands its long FPC manufacturing
capability to be a key competitive advantage and therefore the cell-to-pack
CCS opportunities (OEMs B, C and G) are a key focus for the business.
Lifetime contract Supplier
Customer revenue
OEM location value(1)(3) SoP(() (1)(2)) nomination date((1)(4)) Status
OEM A UK £275 million 2024 Nov. 22 Quote submitted
Nov. 22 supplier selection
remains outstanding
OEM B - via Tier 1 EU £220 million - Q4 24 Q1 or Q2 23 Cell-to-pack
£525 million 2m long circuit
Quote submitted
OEM C - via Tier 1 EU £380 million - £1 billion July 2026 Q2 23 Cell-to-pack
1.5m long circuit
Quote submitted
OEM E - via Tier 1 EU £28 million 2023 Tier 1 already under contract Quote submitted
Under review
OEM F - via Tier 1 EU Est. £250 million 2026 End 2023 In RFQ loop; design improvement for cost down
OEM G - via Tier 1 EU Est. £100 million 2025 TBC Cell-to-pack
1m-2m long circuits
In RFQ loop
OEM H - via Tier 1 US Est. £1-2 million 2023 TBC Energy Storage
1m long circuit
In RFQ loop
(1) In Directors' opinion
(2) SoP - Start of Production. Nominated supplier will be required to be
'off production tools' some months earlier
(3) Following a Tier 1 nomination, any contract awards to the Company
would not be expected to include volume commitments from the customer
(4) A supplier nomination achieved by a Tier 1 supplier and potential
customer is a key step in the process towards the Company working with the
Tier 1 to enter into a Tier 2 supply contract
Aerospace:
Current Aerospace IHT development contracts include:
Project:
For:
Status:
Entry Into Service - estimated
Aircraft cabin harness EU OEM
- Development
contract Approx. 2025
via Tier1 Milestones through to TRL6
In flight aircraft deicing EU OEM
- R&D program Innovate
UK Approx. 2025
via GKN Plan through to prototype
system verified ("TRL 6")
On ground aircraft deicing US Developer
Development orders with 2023-2024
planning through to flight
ready design
Business jet cabin harness US
OEM Pre-production order
with 2024
planning through to flight
ready designs
Electric aerospace UK
and Development
orders TBC
battery packs EU
OEMs
Spacecraft Solar Array EU
OEM Development
orders Approx. 2024
transfer harness
These Aerospace developments utilise the Double Belt Press (DBP), envisaged
within the original IHT patent application in 2012 and now installed and
commissioned at Stonehouse.
Subject to successful progress in-house and with our customers, 2023 will see
IHT flight-qualified.
Medical:
As one of the three main market verticals that are the main focus for IHT for
the Company, Medical has not progressed as far or as fast as expected.
However, the multi-year agreement signed in April 2021 with CathPrint AB, the
Stockholm-based company with expertise in the development and manufacturing of
medical device products, is progressing to plan.
APCB Division:
The APCB Division sales pipeline includes:
· New opportunities totaling £1.6 million with existing customers
for heater rings, nuclear research, wireless technology and cyber security;
and
· Opportunities totaling £4.9 million with new customers for
satellite dishes, nuclear research and medical devices.
Outlook
The prospects for IHT and for the Company are dominated by the EV CCS
pipeline; in particular cell-to-pack and securing one or more supplier
nominations is a key business objective. According to information available to
the Company, Q1 and Q2 2023 will see supplier nominations for two major
programs (OEMs B and C), with the Company in each case having summitted a
submission to a Tier 1 in response to a request for proposal ("RFP") received
by the Company.
These are large-scale programs and, as detailed above, the Company is seeking
longer term strategic investment partnerships with larger global businesses,
both to enhance our chances of securing and delivering these programs.
Strategic investment partnerships
The Company is actively exploring longer term strategic investment
partnerships with larger global businesses in order to support development and
conversion of the significant pipeline of identified IHT sales opportunities,
notably for EV battery cell connection systems (CCS) for UK and EU OEMs, with
the Company as a Tier 1 or Tier 2 supplier, and also for other Medical and
Aerospace sales opportunities.
7. Board changes and share options
Subject to completion of the Fundraising, it is proposed that Andrew Lapping
and Chris Pennison will join the Board, as non-executive chairman, and
non-executive director respectively; and in order to maintain the Board
numbers and also to control the cost base, Susan McErlain and I have agreed to
step down from the Board at the same time. Charles Cattaneo intends to step
down from the Board at the end of January 2023. The new appointments are
subject to satisfactory completion of the required AIM regulatory due
diligence and completion of the Fundraising. Given the forthcoming departure
of Charles Cattaneo, the Company will shortly commence a recruitment process
for an additional new non-executive director.
Andrew Lapping and Chris Pennison represent a number of underlying new
investors who, including Andrew and Chris, intend to invest in total
approximately £1.21 million in the Placing, via Hamilton Capital Partners
LLP. Included within this £1.21 million is Andrew's intention to invest
£75,000 and Chris' intention to invest £25,000. The aggregate of these new
beneficial interests would represent approximately 29.9 per cent. of the
Enlarged Issued Share Capital at Admission assuming there is no Open Offer
take up. The proposed annual remuneration for each new director is £30,000.
Neither Andrew nor Chris would be considered as independent due to this
investment in the Company.
Andrew Lapping, as well as founding Hamilton Capital Partners LLP, and
previously being a non-executive director of Netplay TV plc, Legend
Communications plc, Maven Income & Growth VCT 4 plc and SRT Marine Systems
plc, was chairman and lead investor of Hyperdrive Innovation Holdings Ltd
("Hyperdrive"). Hyperdrive was successfully sold to the Turntide Technology
group ("Turntide") in 2021. He was also lead investor and a director in CV
Travel Holdings Ltd/Ski Verbier Ltd, which was sold to Kuoni, and automotive
business DPE Auto Engineering Group Limited which was sold to Arlington
Automotive.
Chris Pennison was the CEO of Hyperdrive, a developer and manufacturer of
lithium-ion battery systems and helped lead the sale of Hyperdrive to Turntide
in 2021. His current role is senior vice president strategic operations for
Turntide working with all the business verticals across the Turntide group. He
has held a number of senior positions in automotive tier 1 & 2 businesses,
and has over 35 years of multi sector industrial experience.
Steve Hudson, currently Chief Operating Officer of the Company (non Board) is
due to leave the Company at the end of the year and on behalf of the Board I
would like to thank him for his contribution to the delivery of the Stonehouse
Site and the negotiations with the EV OEM.
Following Admission the Board intends to conduct a review and re-incentivise
all executive Directors, including CEO Philip Johnston, and senior members of
staff with suitable equity based rewards.
8. Director participation in the Placing, Subscription and Open Offer
The following Directors have agreed to subscribe for an aggregate of 5,300,000
Placing Shares and 300,000 Subscription Shares as set out below.
Director Board 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*
Position
(£)
Phillip Johnston CEO £25,000** 2,500,000 - 9,238,394 1.67%
Paul Cook CFO £25,000 2,500,000 - 2,535,213 0.46%
Charles Non-Executive £3,000 - 300,000 327,500 0.06%
Cattaneo Director
Susan McErlain Non-Executive £3,000 300,000 - 313,750 0.06%
Director
*Assuming the Open Offer is fully taken up
**Subscription for these Placing Shares by the wife of Philip Johnston
The Directors will not be participating in the Open Offer.
9. 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.
10. Proposed Capital Reorganisation of Ordinary Shares
The Company is not permitted by law to issue Ordinary Shares at an issue price
which is below their nominal value, currently 4 pence per Ordinary Share. In
order to enable the Company to issue shares at an issue price which is below
their current nominal value, the Company is proposing to complete a Capital
Reorganisation of the Ordinary Share capital of the Company. Each of the
Existing Ordinary Shares will be subdivided into one New Ordinary Share of 0.1
pence each and one Deferred Share of 3.9 pence each.
The Capital Reorganisation will not of itself affect the value of the shares
held by Shareholders. After the Capital Reorganisation, there will be the same
number of Ordinary Shares in issue as there are Existing Ordinary Shares in
issue (prior to completion of the Fundraising) and therefore your current
shareholding will not be diluted by the Capital Reorganisation, unless a
further equity fundraising is completed by the Company.
The New Ordinary Shares will have the same rights as those currently accruing
to the Existing Ordinary Shares in issue under the Current Articles, including
those relating to voting and entitlement to dividends. New share certificates
for New Ordinary Shares will not be issued and the existing share certificates
will remain valid.
The Deferred Shares will have no significant rights attached to them and carry
no right to vote or participate in distribution of surplus assets and will not
be admitted to trading on the AIM market of the London Stock Exchange plc.
Therefore, the Deferred Shares will effectively carry no value.
Holders of Warrants or options over Existing Ordinary Shares will maintain the
same rights as currently accruing to them and will not be issued with new
warrant or option certificates.
Resolution 1 in the Notice of General Meeting, contained within the Circular,
is proposed to sub-divide the Existing Ordinary Shares and Resolution 7 is
proposed to adopt new Articles of Association, to include the rights attaching
to the new Deferred Shares relative to the New Ordinary Shares. A copy of the
New Articles will be available for inspection throughout the General Meeting.
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 New Ordinary Shares at the General Meeting, together
with approval to disapply pre-emption rights. Specific authorities are being
sought at the General Meeting in respect of the New Ordinary Shares.
In addition, general authorities are being sought in substitution for those
authorities given at the Company's Annual General Meeting in August 2022.
Shareholders should be aware that if any of the Resolutions are not passed,
the Fundraising will not proceed. A notice convening the General Meeting,
which is to be held at 10.00 a.m. on 6 January 2023 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:
Resolutions 1,2 and 3 are an ordinary resolution and require a simple majority
of those voting to vote in favour,. Resolutions 4, 5, 6, 7 and 8 are special
resolutions and will require not less than 75 per cent. of those voting in
person or on a poll by proxy to vote in favour.
11. Issue of Warrants
The Company proposes to issue Warrants to subscribers in the Placing, the
Subscription and the Open Offer, granting rights to subscribe for additional
Ordinary Shares held in the ratio of one Warrant for every two New Ordinary
Shares. The Warrants will be issued pursuant to the Warrant Instrument and
will be exercisable at a price of 6p per Ordinary Share during the Warranty
Exercise Period.
If (assuming full take up under the Open Offer) all of the Warrants are
exercised in full the Company will receive gross proceeds of a further £15.44
million.
The issue and validity of the Warrants is conditional, amongst other things,
on the passing of the Resolutions and Admission becoming effective on or
before 8.00 a.m. on 9 January 2023 (or such later date as finnCap and the
Company may agree being not later than 5.30 p.m. on 27 January 2023).
12. 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 149,999,860 Open Offer Shares at the Issue Price.
The Directors who hold Ordinary Shares, representing in aggregate
approximately 18.27 per cent. of the Company's current issued share capital as
at the date of this document, 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 applications under the Open Offer to be received is 11.00
a.m. on 5 January 2023. 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.
13. 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 4 January 2023 (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 4 January 2023 (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.
14. Recommendation and Importance of the vote
In proposing the terms of the Fundraising, the Board has pursued a number of
routes to raising funds including agreeing the advance payment from the UK EV
OEM. However, the Board believes it has now exhausted any potentially more
attractive routes that could have been capable of delivering sufficient funds
in time with sufficient certainty and has been left with no alternative but to
proceed with the Fundraising at a very significant discount and with the issue
of the Warrants. The Board understands the implications for Shareholders and
has given Shareholders who have not participated in the Placing the
opportunity to participate in the fundraising through the Open Offer.
Shareholders should be aware that if the Resolutions are not approved at the
General Meeting, the Fundraising will not occur and the net proceeds will not
be received by the Company. If this were to happen, to continue to trade, the
Group would have to find urgent alternative funding and the Board do not
believe that sufficient funding would be available in time to avoid an
insolvency event.
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 all of the Resolutions in respect
of, in aggregate, 6,854,143 Existing Ordinary Shares, representing
approximately 18.27 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
12 December 2022
Ex-entitlement date for Open
Offer
8.00 a.m. on
14 December 2022
Publication of this document, Form of Proxy and Application
Form
15 December 2022
Open Offer Entitlements and Excess CREST Open Offer
Entitlements
8.00 a.m. on
credited to stock accounts of Qualifying CREST
Shareholders
16 December 2022
Recommended latest time for withdrawal of Open Offer
Entitlements
4.30 p.m. on
from
CREST
29 December 2022
Latest time for depositing Open Offer in to
CREST
3.00 p.m. on 30 December 2022
Latest time and date for splitting of Application
Forms
3.00 p.m. on 3 January 2023
(to satisfy bona fide market claims only)
Latest time and date for receipt of Forms of
Proxy
10.00 a.m. on 4 January 2023
Latest time and date for receipt of completed Application
Forms
11.00 a.m. on
and payment in full under the Open
Offer
5 January 2023
General
Meeting
10.00 a.m. on
6 January 2023
Record date for sub-division and creation of Deferred
Shares
6.00 p.m. on
6 January 2023
Announcement of the results of the General Meeting and Open
Offer
6 January 2023
Admission and commencement of dealings in the Placing
Shares,
8.00 a.m. on
Subscription Shares and the Open Offer Shares on
AIM
9 January 2023
CREST accounts credited in respect of Placing Shares,
Subscription
On or soon after 8.00 a.m.
Shares and Open Offer Shares in uncertificated
form
on 9 January 2023
Dispatch of definitive share certificates for Placing Shares,
Subscription
19 January 2023
Shares and Open Offer Shares in certificated form
Notes:
1. Each of the times and dates above are indicative only and are
subject to change. If any of the above times and/or dates change, the revised
times and/or dates will be notified by the Company to Shareholders by
announcement through a regulatory information service.
2. All of the above times refer to London time unless otherwise
stated.
3. The admission and commencement of dealings in the Placing,
Open Offer and Subscription Shares on AIM are conditional on, inter alia, the
passing of the Resolutions at the General Meeting.
4. If you have any further questions, please call the
Shareholder Helpline on 0371-384 2050. The Shareholder Helpline will be open
between 8.30 a.m. and 5.30 p.m. (London time), Monday to Friday (excluding
public holidays in England and Wales). 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. Different charges may
apply to calls to the Shareholder Helplines from mobile telephones and calls
may be recorded and randomly monitored for security and training purposes. For
legal reasons, the Shareholder Helpline will only be able to provide
information contained in this document and information relating to the
Company's register of members and will be unable to give advice on the merits
of the Fundraising or provide legal, financial, tax or investment advice.
5. Shareholders should take independent advice if they wish to
consider the suitability of these risks with regard to their own particular
circumstances and investment criteria.
6. Copies of this document will be available for inspection free
of charge at the registered office of the Company and at Gateley plc (at One
Eleven Edmund Street, Birmingham, B3 2HJ) during normal business hours on any
Business Day from the date of this document up to and including the date of
Admission.
ISSUE STATISTICS
Number of Existing Ordinary
Shares
37,508,065
Issue
Price
1 pence
Number of Placing
Shares
364,224,700
Number of Subscription
Shares
300,000
Number of Open Offer
Shares(1)
149,999,860
Proceeds of the Fundraising (before
expenses)(2)
£5.15 million
Enlarged Share Capital following
Admission(2)
552,032,625
Percentage of Enlarged Share Capital represented by the Placing
Shares,
93.21 per cent.
the Subscription Shares and the Open Offer Shares(2)
Market Capitalisation of the Company at the Issue Price upon
Admission(1)
£5.52 million
Notes:
1. Assuming the Open Offer is taken up in full
2. Assuming full issuance of the Placing Shares, Subscription
Shares and Open Offer Shares
DEFINITIONS
The following definitions apply throughout the Letter from the Chairman unless
the context requires otherwise:
"Admission"
the admission of the Placing Share, the Subscription 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 7 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
a share or other security not held in uncertificated form (that is, not
certificated
form"
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 (http://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
in respect of each Qualifying Shareholder the entitlement (in addition
Offer
Entitlement"
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
37,508,065 Ordinary Shares
"Euroclear"
Euroclear UK & International Limited
"Financial
Conduct
the Financial Conduct Authority (and its predecessor, the Financial
Authority" or
"FCA"
Services Authority) in its capacity as the competent authority for the
purposes of Part VI of FSMA
"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 6 January 2023
(or any reconvened meeting following any adjournment of the general meeting),
notice of which is set out in this document
"IHT"
Improved Harness Technology(TM), being flexible multilayer printed circuit
boards of unlimited length
"Issue
Price"
1 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, being ordinary shares of £0.01 each to be issued by the Company
pursuant to the Fundraising
"Notice" or "Notice of the notice
of the General Meeting set out in this document General Meeting"
"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 0.250054 Existing Ordinary Shares held by
them at the Record Date
"Open Offer
Shares"
the 149,999,860 New Ordinary Shares which are the subject of the Open Offer
"Ordinary
Shares"
existing 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 14 December 2022 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
Qualifying Shareholders holding Existing Ordinary Shares in
Shareholders"
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
"Stevenage
Circuits"
Stevenage Circuits Limited, a subsidiary of Trackwise Designs plc, company
registered number 01059497.
"Subscriber"
the subscriber for the Subscription Shares pursuant to the Subscription
"Subscription"
the subscription of 300,000 New Ordinary Shares by the Subscriber pursuant to
the Subscription Letter
"Subscription
Letter"
the conditional subscription letter dated 14 December 2022 between the Company
and the Subscriber in connection with the Subscription
"Subscription
Shares"
the 300,000 New Ordinary Shares allotted and to be issued pursuant to the
Subscription Letter
"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
"uncertificated" or
"in recorded
on the register of members of the Company as being held
uncertificated
form"
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
"Warrant Exercise Period"
the period of three years from the date of Admission
"Warrant
Instrument"
the instrument creating the Warrants, to be approved at General Meeting
"Warrants"
warrants to subscribe for New Ordinary Shares, details of which are set out in
this document
"£", "pounds sterling", "penny" UK pounds
sterling, the lawful currency of the United Kingdom or "pence"
Important information
This Announcement is for information purposes only and does not itself
constitute an offer or invitation to underwrite, subscribe for or otherwise
acquire or dispose of any securities in the Company and does not constitute
investment advice.
Neither this Announcement nor any copy of it may be taken or transmitted,
published or distributed, directly or indirectly, in or into the United
States, Australia, New Zealand, Canada, Japan, the Republic of South Africa or
the Republic of Ireland or to any persons in any of those jurisdictions or any
other jurisdiction where to do so would constitute a violation of the relevant
securities laws of such jurisdiction. Any failure to comply with this
restriction may constitute a violation of the securities laws of any state or
territory of the United States, Australia, New Zealand, Canada, Japan, the
Republic of South Africa or the Republic of Ireland. The distribution of this
Announcement in other jurisdictions may be restricted by law and persons into
whose possession this Announcement comes should inform themselves about, and
observe any such restrictions.
Any failure to comply with these restrictions may constitute a violation of
the securities laws of any such jurisdiction. Neither this Announcement nor
any part of it nor the fact of its distribution shall form the basis of or be
relied on in connection with or act as an inducement to enter into any
contract or commitment whatsoever.
In particular, the Placing Shares have not been and will not be registered
under the US Securities Act, or under the securities laws or with any
securities regulatory authority of any state or other jurisdiction of the
United States, and accordingly the Placing Shares may not be offered, sold,
pledged or transferred, directly or indirectly, in, into or within the United
States except pursuant to an exemption from the registration requirements of
the US Securities Act and the securities laws of any relevant state or other
jurisdiction of the United States. There is no intention to register any
portion of the Placing in the United States or to conduct a public offering of
securities in the United States or elsewhere.
finnCap is authorised and regulated in the United Kingdom by the FCA and is
acting as nominated adviser and Broker to the Company in respect of the
Placing. finnCap is acting for the Company and for no-one else in connection
with the Placing, and will not be treating any other person as its client in
relation thereto, and will not be responsible for providing the regulatory
protections afforded to its customers nor for providing advice in connection
with the Placing or any other matters referred to herein and apart from the
responsibilities and liabilities (if any) imposed on finnCap, as the case may
be, by FSMA, any liability therefor is expressly disclaimed. Any other person
in receipt of this Announcement should seek their own independent legal,
investment and tax advice as they see fit.
Forward-looking statements
This Announcement contains statements about the Company that are, or may be
deemed to be, "forward-looking statements".
All statements, other than statements of historical facts, included in this
Announcement may be forward-looking statements. Without limitation, any
statements preceded or followed by, or that include, the words "targets",
"plans", "believes", "expects", "aims", "intends", "will", "may", "should",
"anticipates", "estimates", "projects", "would", "could", "continue" or words
or terms of similar substance or the negative thereof, are forward-looking
statements. Forward-looking statements include, without limitation, statements
relating to the following: (i) future capital expenditures, expenses,
revenues, earnings, synergies, economic performance, indebtedness, financial
condition, dividend policy, losses and future prospects and (ii) business and
management strategies and the expansion and growth of the operations of the
Company.
These forward-looking statements are not guarantees of future performance.
These forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of any such person, or industry results, to be
materially different from any results, performance or achievements expressed
or implied by such forward-looking statements. These forward-looking
statements are based on numerous assumptions regarding the present and future
business strategies of such persons and the environment in which each will
operate in the future. Investors should not place undue reliance on such
forward-looking statements and, save as is required by law or regulation
(including to meet the requirements of the AIM Rules for Companies, the
Prospectus Rules, the FSMA and/or MAR), does not undertake any obligation to
update publicly or revise any forward-looking statements (including to reflect
any change in expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based). All
subsequent oral or written forward-looking statements attributed to the
Company or any persons acting on their behalf are expressly qualified in their
entirety by the cautionary statement above. All forward-looking statements
contained in this Announcement are based on information available to the
Directors at the date of this Announcement, unless some other time is
specified in relation to them, and the posting or receipt of this Announcement
shall not give rise to any implication that there has been no change in the
facts set forth herein since such date.
APPENDIX - TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THE
ANNOUNCEMENT REGARDING THE PLACING (THE "ANNOUNCEMENT") AND THE TERMS AND
CONDITIONS SET OUT HEREIN ("TERMS AND CONDITIONS") ARE DIRECTED ONLY AT
PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING
AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR
BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO
INVESTMENTS AND ARE: (A) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA
("EEA"), QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(e) OF REGULATION (EU)
2017/1129 (THE "EU PROSPECTUS REGULATION"); (B) IF IN THE UNITED KINGDOM,
QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(e) OF REGULATION (EU) 2017/1129
WHICH FORMS PART OF DOMESTIC LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL)
ACT 2018 (THE "UK PROSPECTUS REGULATION") WHO ALSO (I) FALL WITHIN ARTICLE
19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION)
ORDER 2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS); (II) FALL
WITHIN ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED
ASSOCIATIONS, ETC.) OF THE ORDER; OR (C) PERSONS TO WHOM THEY MAY OTHERWISE
LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS
"RELEVANT PERSONS").
THE ANNOUNCEMENT AND THE TERMS AND CONDITIONS AND THE INFORMATION THEREIN MUST
NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS
DISTRIBUTING THE ANNOUNCEMENT AND/OR THE TERMS AND CONDITIONS MUST SATISFY
THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY
TO WHICH THE TERMS AND CONDITIONS RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS
AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THE ANNOUNCEMENT AND THE
TERMS AND CONDITIONS DO NOT THEMSELVES CONSTITUTE AN OFFER FOR SALE OR
SUBSCRIPTION OF ANY SECURITIES IN TRACKWISE DESIGNS PLC.
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR UNDER THE
APPLICABLE SECURITIES LAWS OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY
STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES
EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED
STATES. THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE THE UNITED
STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE
WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH
APPLICABLE LAWS. NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE
UNITED STATES OR ELSEWHERE.
THE ANNOUNCEMENT AND THE TERMS AND CONDITIONS ARE RESTRICTED AND ARE NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, THE REPUBLIC OF IRELAND,
AUSTRALIA, NEW ZEALAND, CANADA, THE REPUBLIC OF SOUTH AFRICA, OR JAPAN OR ANY
OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE
UNLAWFUL.
The distribution of the Announcement and/or the Terms and Conditions and/or
the Placing and/or issue of the Placing Shares in certain jurisdictions may be
restricted by law. No action has been taken by the Company, the Bookrunner or
any of its respective affiliates, agents, directors, officers or employees
that would permit an offer of the Placing Shares or possession or distribution
of the Announcement and/or the Terms and Conditions or any other offering or
publicity material relating to such Placing Shares in any jurisdiction where
action for that purpose is required. Persons into whose possession the
Announcement and/or these Terms and Conditions come are required by the
Company and the Bookrunner to inform themselves about and to observe any such
restrictions.
The Announcement and these Terms and Conditions or any part of them are for
information purposes only and do not constitute or form part of any offer to
issue or sell, or the solicitation of an offer to acquire, purchase or
subscribe for, any securities in the United States, the Republic of Ireland,
Australia, New Zealand, Canada, the Republic of South Africa or Japan or any
other jurisdiction in which the same would be unlawful. No public offering of
the Placing Shares is being made in any such jurisdiction.
In the United Kingdom, the Announcement and these Terms and Conditions are
being directed solely at persons in circumstances in which section 21(1) of
the Financial Services and Markets Act 2000 (as amended) (the "FSMA") does not
apply.
The Placing Shares have not been approved or disapproved by the US Securities
and Exchange Commission, any state securities commission or other regulatory
authority in the United States, nor have any of the foregoing authorities
passed upon or endorsed the merits of the Placing or the accuracy or adequacy
of the Announcement and these Terms and Conditions or the Circular. Any
representation to the contrary is a criminal offence in the United States. The
relevant clearances have not been, nor will they be, obtained from the
securities commission of any province or territory of Canada, no prospectus
has been lodged with, or registered by, the Australian Securities and
Investments Commission or the Japanese Ministry of Finance; the relevant
clearances have not been, and will not be, obtained for the South Africa
Reserve Bank or any other applicable body in the Republic of South Africa in
relation to the Placing Shares and the Placing Shares have not been, nor will
they be, registered under or offering in compliance with the securities laws
of any state, province or territory of Australia, New Zealand, Canada, the
Republic of Ireland, the Republic of South Africa or Japan. Accordingly, the
Placing Shares may not (unless an exemption under the relevant securities laws
is applicable) be offered, sold, resold or delivered, directly or indirectly,
in or into Australia, New Zealand, the Republic of Ireland, the United States,
Canada, the Republic of South Africa or Japan or any other jurisdiction in
which such offer, sale, re-sale or delivery would be unlawful.
Persons (including, without limitation, nominees and trustees) who have a
contractual right or other legal obligations to forward a copy of the
Announcement (or any part of it) and/or these Terms and Conditions should seek
appropriate advice before taking any action.
Solely for the purposes of the product governance requirements contained
within: (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 ("MiFID II Delegated Directive"); and (c)
local implementing measures, (including insofar as MiFID II and the MiFID II
Delegated Directive constitute retained EU law (as defined in section 6(7) of
the European Union (Withdrawal) Act 2018) in the United Kingdom) ("Retained
MiFID Provisions") (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 MiFID II Product
Governance Requirements) may otherwise have with respect thereto, the Placing
Shares have been subject to a product approval process, which has determined
that the Placing 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 the Retained
MiFID Provisions; and (ii) eligible for distribution through all distribution
channels as are permitted by MiFID II or the Retained MiFID Provisions (the
"Target Market Assessment"). Notwithstanding the Target Market Assessment,
distributors should note that: the price of the Placing Shares may decline and
investors could lose all or part of their investment; the Placing Shares offer
no guaranteed income and no capital protection; and an investment in the
Placing 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 the Placing. Furthermore, it is noted
that, notwithstanding the Target Market Assessment, the bookrunner will only
procure investors who meet the criteria of professional clients and eligible
counterparties.
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 the Retained MiFID Provisions; 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 Placing Shares.
Each distributor is responsible for undertaking its own target market
assessment in respect of the Placing Shares and determining appropriate
distribution channels.
The Terms and Conditions should be read in their entirety.
Key Terms and Dates
In addition to the definitions set out at the end of these Terms and
Conditions, the following defined terms and dates are relevant to these Terms
and Conditions:
"Admission" means admission of the Placing Shares to trading on AIM becoming effective as
provided in Rule 6 of the AIM Rules for Companies;
"Admission Date" means 8.00 a.m. on 9 January 2023 or such later time as the Bookrunner may
agree in writing with the Company but in any event no later than 5.30 p.m. on
27 January 2023;
"Issue Price" means 1 pence per Ordinary Share;
"Placing Shares" means up to 364,224,700 New Ordinary Shares to be issued to Placees pursuant
to the Placing and which are proposed to be admitted to trading on AIM on the
Admission Date; and
"Settlement Date" means the date the settlement of transactions in the Placing Shares following
Admission will take place within the CREST system (subject to certain
exceptions) which is expected to occur on 9 January 2023;
Details of the Placing Agreement and the Placing Shares
The Bookrunner has entered into the Placing Agreement with the Company under
which, on the terms and subject to the conditions set out in the Placing
Agreement, the Bookrunner, as agent for and on behalf of the Company, has
agreed to use its reasonable endeavours to procure Placees for the Placing
Shares at the Issue Price. The Placing is not being underwritten in whole or
in part by either the Bookrunner or any other person.
The exact number of Placing Shares to be allocated and issued to Placees shall
be determined by the Bookrunner and the Company following completion of the
Bookbuild (as defined below).
The Placing Shares will, when issued, be subject to the memorandum and
articles of association of the Company and credited as fully paid and will
rank pari passu in all respects with the existing issued Ordinary Shares,
including the right to receive all dividends and other distributions declared,
made or paid in respect of such Ordinary Shares on or after the date of issue
of the Placing Shares.
Accelerated bookbuilding process
Commencing today, the Bookrunner will be conducting an accelerated
bookbuilding process to determine demand for participation in the Placing by
Placees (the "Bookbuild"). The Announcement gives details of the terms and
conditions of, and the mechanics of participation in, the Placing. However,
the Bookrunner will be entitled to effect the Placing by such alternative
method to the Bookbuild as they may, after consultation with the Company,
determine.
A bid in the Bookbuild will be made on these Terms and Conditions which are
attached to the Announcement and will be legally binding on the Placee on
behalf of which it is made and, except with the Bookrunner's consent, will not
be capable of variation or revocation after the Recorded Commitment has
concluded.
The book will open with immediate effect. The final number of Placing Shares
to be issued pursuant to the Placing will be agreed by the Bookrunner and the
Company at the close of the Bookbuild, and the result of the Placing will be
announced as soon as practicable thereafter. The timing for the close of the
Bookbuild and the allocation of the Placing Shares shall be at the absolute
discretion of the Bookrunner, in consultation with the Company. The Bookrunner
reserves the right increase the Placing and will inform the Placees as soon as
soon reasonably practicable.
To the fullest extent permissible by law, neither:
(a) the Bookrunner;
(b) any of its respective affiliates, agents, advisers,
directors, officers, consultants or employees; nor
(c) to the extent not contained within (a) or (b), any person
connected with the Bookrunner as defined in the FSMA ((b) and (c) being
together "affiliates" and individually an "affiliate" of the Bookrunner),
shall have any liability (including to the extent permissible by law, any
fiduciary duties) to Placees or to any other person whether acting on behalf
of a Placee or otherwise. In particular neither the Bookrunner nor any of its
respective affiliates shall have any liability (including, to the extent
legally permissible, any fiduciary duties), in respect of their conduct of the
Bookbuild or of such alternative method of effecting the Placing as the
Bookrunner may determine.
By participating in the Placing (such participation up to an agreed maximum
level to be confirmed in and evidenced by either (i) a recorded telephone call
or (ii) email correspondence, in either case between representatives of the
Bookrunner to whom the Placee's commitment is given and the relevant Placee (a
"Recorded Commitment")), each Placee will be deemed to have read and
understood the Announcement and these Terms and Conditions in their entirety,
to be participating and acquiring Placing Shares on these Terms and Conditions
and to be providing the representations, warranties, indemnities,
acknowledgements and undertakings contained in these Terms and Conditions.
In particular, each such Placee irrevocably represents, warrants, undertakes,
agrees and acknowledges (amongst other things) severally to the Company and
the Bookrunner that:
1. it is a Relevant Person and that it will acquire,
hold, manage or dispose of any Placing Shares that are allocated to it for the
purposes of its business;
2. in the case of a Relevant Person in the United
Kingdom who acquires any Placing Shares pursuant to the Placing:
(d) it is a Qualified Investor within the meaning of Article 2(e) of the
UK Prospectus Regulation; and
(e) in the case of any Placing Shares acquired by it as a financial
intermediary, as that term is used in Article 5(1) of the UK Prospectus
Regulation:
(i) the Placing Shares acquired by it in the Placing have not
been acquired on behalf of, nor have they been acquired with a view to their
offer or resale to, persons in the United Kingdom other than Qualified
Investors or in circumstances in which the prior consent of the Bookrunner has
been given to the offer or resale; or
(ii) where Placing Shares have been acquired by it on behalf
of persons in the United Kingdom other than Qualified Investors, the offer of
those Placing Shares to it is not treated under the UK Prospectus Regulation
as having been made to such persons; and
3. in the case of a Relevant Person in a member state of
the EEA (each, a "Relevant State") who acquires any Placing Shares pursuant to
the Placing:
(a) it is a Qualified Investor within the meaning of Article 2(e) of the
EU Prospectus Regulation;
(b) in the case of any Placing Shares acquired by it as a financial
intermediary, as that term is used in Article 5(1) of the
EU Prospectus Regulation:
(i) the Placing Shares acquired by it in the Placing have not
been acquired on behalf of, nor have they been acquired with a view to their
offer or resale to, persons in a Relevant State other than Qualified Investors
or in circumstances in which the prior consent of the Bookrunner has been
given to the offer or resale; or
(ii) where Placing Shares have been acquired by it on behalf
of persons in a Relevant State other than Qualified Investors, the offer of
those Placing Shares to it is not treated under the EU Prospectus Regulation
as having been made to such persons;
4. it is acquiring the Placing Shares solely for its own
account or is acquiring the Placing Shares for an account with respect to
which it exercises sole investment discretion and has the authority to make
and does make the representations, warranties, indemnities, acknowledgements,
undertakings and agreements contained in these Terms and Conditions;
5. it understands (or if acting for the account of
another person, such person has confirmed that such person understands) and
agrees to comply with the resale and transfer restrictions set out in these
Terms and Conditions; and
6. except as otherwise permitted by the Company and
subject to any available exemptions from applicable securities laws, it (and
any account referred to in paragraph 4 above) is outside the United States
acquiring the Placing Shares in offshore transactions as defined in and in
accordance with Regulation S under the Securities Act.
No prospectus
The Placing Shares are being offered to a limited number of specifically
invited persons only and will not be offered in such a way as to require any
prospectus or other offering document to be published. No prospectus or other
offering document has been or will be submitted to be approved by the
Financial Conduct Authority ("FCA") in relation to the Placing or the Placing
Shares and Placees' commitments will be made solely on the basis of the
information contained in the Announcement and any information publicly
announced through a Regulatory Information Service (as defined in the AIM
Rules for Companies (the "AIM Rules")) by or on behalf of the Company on or
prior to the date of these Terms and Conditions (the "Publicly Available
Information") and subject to any further terms set forth in writing in any
contract note sent to an individual Placee.
Each Placee, by participating in the Placing, agrees that the content of the
Announcement is exclusively the responsibility of the Company and confirms
that it has neither received nor relied on any information (other than the
Publicly Available Information), representation, warranty or statement made by
or on behalf of the Bookrunner or the Company or any other person and none of
the Bookrunner, the Company nor any other person acting on such person's
behalf nor any of their respective affiliates has or shall have any liability
for any Placee's decision to participate in the Placing based on any other
information, representation, warranty or statement. Each Placee acknowledges
and agrees that it has relied on its own investigation of the business,
financial or other position of the Company in accepting a participation in the
Placing. No Placee should consider any information in the Announcement or
these Terms and Conditions to be legal, tax, business or other advice. Nothing
in this paragraph shall exclude the liability of any person for fraudulent
misrepresentation.
Application for admission to trading
Application(s) will be made to the London Stock Exchange for admission of the
Placing Shares to trading on AIM.
It is expected that Admission will take place on the Admission Date and that
dealings in the Placing Shares on AIM will commence at the same time.
Principal terms of the Placing
finnCap is acting as nominated adviser and sole broker to the Placing, as
agent for and on behalf of the Company.
Participation in the Placing is by invitation only and will only be available
to persons who may lawfully be, and are, invited by the Bookrunner to
participate. The Bookrunner and any of its respective affiliates are entitled
to participate in the Placing as principal.
Each Placee will confirm the maximum number of Placing Shares it is willing to
acquire in a Recorded Commitment. Once they have made a Recorded Commitment,
each Placee will have an immediate, separate, irrevocable and binding
obligation, owed to the Bookrunner (as agent for the Company), to subscribe
and pay for, at the Issue Price, the number of Placing Shares allocated to it,
up to the agreed maximum.
Each Placee's allocation (and whether such Placee participates in the Placing)
will be determined by the Bookrunner in their discretion following
consultation with the Company and will be confirmed by the Bookrunner either
orally or in writing via a contract note after the Recorded Commitment has
taken place.
Each Placee's commitment will be confirmed in and evidenced by a Recorded
Commitment. These Terms and Conditions will be deemed incorporated into each
contract which is entered into by way of a Recorded Commitment and will be
legally binding on the relevant Placee(s) on behalf of whom the commitment is
made with effect from the end of the Recorded Commitment and, except with the
Bookrunner's prior written consent, will not be capable of variation or
revocation after such time. A contract note confirming each Placee's
allocation of Placing Shares will be sent to them following the Recorded
Commitment and the allocation process. These Terms and Conditions shall be
deemed incorporated into any such contract note.
Each Placee will have an immediate, separate, irrevocable and binding
obligation, owed to the Bookrunner (as agent for the Company), to pay to it
(or as it may direct) in cleared funds an amount equal to the product of the
Issue Price and the number of Placing Shares allocated to such Placee (subject
always to such Placee's agreed maximum).
The Bookrunner's reserve the right to scale back the number of Placing Shares
to be subscribed by any Placee in the event that the Placing is
oversubscribed. The Bookrunner also reserves the right not to accept offers to
subscribe for Placing Shares or to accept such offers in part rather than in
whole. The acceptance and, if applicable, scaling back of offers shall be at
the absolute discretion of the Bookrunner (in consultation with the Company).
Except as required by law or regulation, no press release or other
announcement will be made by the Bookrunner or the Company using the name of
any Placee (or its agent), in its capacity as Placee (or agent), other than
with such Placee's prior written consent (save as required by any law or
regulation).
Irrespective of the time at which a Placee's allocation(s) pursuant to the
Placing is/are confirmed, settlement for all Placing Shares to be acquired
pursuant to the Placing will be required to be made at the same time on the
basis explained below under "Registration and settlement".
All obligations under the Placing will be subject to fulfilment of the
conditions referred to below under "Conditions of the Placing" and to the
Placing not being terminated on the basis referred to below under "Termination
of the Placing".
By participating in the Placing, each Placee agrees that its rights and
obligations in respect of the Placing will terminate only in the circumstances
described below and will not be capable of rescission or termination by the
Placee.
Registration and settlement
By participating in the Placing, each Placee will be deemed to agree that it
will do all things necessary to ensure that delivery and payment is completed
as directed by the Bookrunner in accordance with either the standing CREST or
certificated settlement instructions which they have in place with the
Bookrunner.
Settlement of transactions in the Placing Shares following Admission will take
place within the CREST system, subject to certain exceptions. Settlement
through CREST will be on a delivery versus payment basis ("DVP") unless
otherwise notified by the Bookrunner and is expected to occur on the
Settlement Date.
In the event of any difficulties or delays in the admission of any Placing
Shares to CREST or the use of CREST in relation to the Placing, the Company
and the Bookrunner may agree that the Placing Shares (or any of them) should
be issued in certificated form. The Bookrunner reserves the right to require
settlement for any of the Placing Shares, and to deliver any of the Placing
Shares to any Placees, by such other means as it deems necessary if delivery
or settlement to any Placee is not practicable within the CREST system or
would not be consistent with regulatory requirements in the jurisdiction in
which a Placee is located.
Interest is chargeable daily on payments not received from Placees on or
before the due date in accordance with the arrangements set out above, in
respect of either CREST or certificated deliveries, at the rate of 3
percentage points above the prevailing base rate of Barclays Bank plc as
determined by the Bookrunner.
Each Placee is deemed to agree that if it does not comply with these
obligations, the Bookrunner may sell any or all of their Placing Shares on
their behalf and retain from the proceeds, for the Bookrunner's own account
and benefit, an amount equal to the aggregate amount owed by the Placee plus
any interest due. The relevant Placee will, however, remain liable for any
shortfall below the Issue Price and for any stamp duty or stamp duty reserve
tax (together with any interest or penalties) which may arise upon the sale of
its Placing Shares on its behalf.
If Placing Shares are to be delivered to a custodian or settlement agent,
Placees must ensure that, upon receipt, any relevant contract note is copied
and delivered immediately to the relevant person within that organisation.
Insofar as Placing Shares are registered in a Placee's name or that of its
nominee or in the name of any person for whom a Placee is contracting as agent
or that of a nominee for such person, such Placing Shares should, subject as
provided below, be so registered free from any liability to United Kingdom
stamp duty or stamp duty reserve tax. Placees will not be entitled to receive
any fee or commission in connection with the Placing.
Conditions of the Placing
The Placing is conditional upon the Placing Agreement becoming unconditional
and not having been terminated in accordance with its terms.
The obligations of the Bookrunner's under the Placing Agreement are, and the
Placing is, conditional upon, inter alia:
(a) the Resolutions being passed at the General Meeting;
(b) the warranties and undertakings contained in the
Placing Agreement ("Warranties") being true, accurate and not misleading when
made on the date of the Placing Agreement and at all times up to Admission by
reference to the facts and circumstances subsisting at that time;
(c) the Company having fully performed its obligations
under the Placing Agreement to the extent that they fall to be performed prior
to Admission;
(d) the Bookrunner not having exercised its right to
terminate the Placing Agreement; and
(e) Admission having become effective at or around the
Admission Date;
(all conditions to the obligations of the Bookrunner included in the Placing
Agreement being together, the "conditions").
If any of the conditions is not fulfilled or, where permitted, waived in
accordance with the Placing Agreement within the stated time periods (or such
later time and/or date as the Company and the Bookrunner may agree), or the
Placing Agreement is terminated in accordance with its terms, the Placing (or
such part of it as may then remain to be completed) will lapse and the
Placee's rights and obligations shall cease and terminate at such time and
each Placee agrees that no claim can be made by or on behalf of the Placee (or
any person on whose behalf the Placee is acting) in respect thereof.
By participating in the Placing, each Placee agrees that its rights and
obligations cease and terminate only in the circumstances described above and
under "Termination of the Placing" below and will not be capable of rescission
or termination by it.
The Bookrunner may, in its absolute discretion (but acting together) and upon
such terms as it thinks fit, waive fulfilment of all or any of the conditions
in the Placing Agreement in whole or in part, or extend the time provided for
fulfilment of one or more conditions, save that certain conditions (including
the condition relating to Admission referred to in paragraph (e) above) may
not be waived. Any such extension or waiver will not affect Placees'
commitments as set out in these Terms and Conditions.
The Bookrunner may terminate the Placing Agreement in certain circumstances,
details of which are set out below.
Neither the Bookrunner nor any of its respective affiliates, agents, advisers,
directors, officers or employees nor the Company shall have any liability to
any Placee (or to any other person whether acting on behalf of a Placee or
otherwise) in respect of any decision any of them may make as to whether or
not to waive or to extend the time and/or date for the satisfaction of any
condition to the Placing (or any part thereof) nor for any decision any of
them may make as to the satisfaction of any condition or in respect of the
Placing generally (or any part thereof) and by participating in the Placing
each Placee agrees that any such decision is within the absolute discretion of
the Bookrunner.
Termination of the Placing
Save as set out below, the Bookrunner may, in its absolute discretion, by
notice to the Company, terminate the Placing Agreement at any time up to
Admission if, inter alia, it is of the opinion, in its absolute discretion,
that any of the following has occurred and it is, as a result of such matter,
inappropriate to proceed with the Placing:
(a) any statement contained in the Circular or any other
document or announcement issued or published by or on behalf of the Company in
connection with the Placing ("Issue Documents") has become untrue, inaccurate
or misleading or any matter has arisen which would, if the Issue Documents
were issued at that time, constitute a material omission from the Issue
Documents or any of them;
(b) any of the Warranties was untrue, inaccurate or
misleading when made and/or that any of the Warranties has ceased to be true
or accurate or has become misleading at any time prior to Admission, in each
case by reference to the facts and circumstances subsisting at that time;
(c) the Company has not complied or cannot comply with any
of its obligations under the Placing Agreement or otherwise relating to the
Placing and Admission (to the extent that such obligations fall to be complied
with prior to Admission);
(d) there has occurred any material adverse change in the
financial position or prospects of the Company (or its group on a consolidated
basis); or
(e) there has occurred any change in national or
international financial, monetary, market (including fluctuations in exchange
rates), industrial, economic, legal or political conditions or there has
occurred or been a material worsening of any international or national crisis,
civil unrest, act of terrorism or outbreak of hostilities which is material in
the context of the Placing.
If the Placing Agreement is terminated in accordance with its terms, the
rights and obligations of each Placee in respect of the Placing as described
in these Terms and Conditions shall cease and terminate at such time and no
claim can be made by any Placee in respect thereof.
By participating in the Placing, each Placee agrees with the Company and the
Bookrunner that the exercise by the Company or the Bookrunner of any right of
termination or any other right or other discretion under the Placing Agreement
shall be within the absolute discretion of the Company or the Bookrunner or
for agreement between the Company and the Bookrunner (as the case may be) and
that neither the Company nor the Bookrunner need make any reference to such
Placee and that none of the Company, the Bookrunner nor any of its respective
affiliates, agents, advisers, directors, officers or employees shall have any
liability to such Placee (or to any other person whether acting on behalf of a
Placee or otherwise) whatsoever in connection with any such exercise.
By agreeing with a Bookrunner (as agent of the Company) to subscribe for
Placing Shares under the Placing, a Placee (and any person acting on a
Placee's behalf) will irrevocably acknowledge and confirm and warrant and
undertake to, and agree with, each of the Company and the Bookrunner, in each
case as a fundamental term of such Placee's application for Placing Shares and
of the Company's obligation to allot and/or issue any Placing Shares to it or
at its direction, that its rights and obligations in respect of the Placing
(or any part of it) will terminate only in the circumstances described above
and under the "Conditions of the Placing" section above and will not be
capable of rescission or termination by it in any other circumstances.
Representations, warranties and further terms
By participating in the Placing, each Placee (and any person acting on such
Placee's behalf) represents, warrants, acknowledges, undertakes, confirms and
agrees (for itself and for any such prospective Placee) that (save where the
Bookrunner expressly agrees in writing to the contrary):
1. it has read and understood the Announcement and these
Terms and Conditions in their entirety and its acquisition of Placing Shares
is subject to and based upon all the terms, conditions, representations,
warranties, indemnities, acknowledgements, agreements and undertakings and
other information contained herein and it has not relied on, and will not rely
on, any information given or any representations, warranties or statements
made at any time by any person in connection with Admission, the Placing, the
Company, the Placing Shares or otherwise, other than the information contained
in the Announcement and the Publicly Available Information;
2. it has not received a prospectus or other offering
document in connection with the Placing and acknowledges that no prospectus or
other offering document:
(a) is required under any applicable law; or
(b) has been or will be prepared in connection with the
Placing
and, in particular, that the Subscription and Open Offer referred to in the
Announcement and the Circular relating thereto are separate from the Placing
and do not form part of any offer or agreement concerning the Placing and/or
any Placing Shares (although do not prohibit the Placees from participating in
the Open Offer should they choose to do so);
3. the Ordinary Shares are admitted to trading on AIM,
and that the Company is therefore required to publish certain business and
financial information in accordance with the AIM Rules and the Market Abuse
Regulation (EU Regulation No. 596/2014 which forms part of domestic law
pursuant to the European Union (Withdrawal) Act 2018) ("UK MAR")), which
includes a description of the nature of the Company's business and the
Company's most recent statement of financial position and statement of total
comprehensive income and that it is able to obtain or access such information
without undue difficulty, and is able to obtain access to such information or
comparable information concerning any other publicly traded company, without
undue difficulty;
4. it has made its own assessment of the Placing Shares
and has relied on its own investigation of the business, financial position
and other aspects of the Company in accepting a participation in the Placing
and neither the Bookrunner nor the Company nor any of their respective
affiliates, agents, advisers, directors, officers or employees nor any person
acting on behalf of any of them has provided, and will not provide, it with
any material regarding the Placing Shares or the Company or any other person
other than the information in the Announcement and these Terms and Conditions
or the Publicly Available Information; nor has it requested the Bookrunner,
the Company, any of their respective affiliates, agents, advisers, directors,
employees or officers or any person acting on behalf of any of them to provide
it with any such information;
5. neither the Bookrunner nor any person acting on
behalf of it nor any of their respective affiliates, agents, directors,
officers or employees has or shall have any liability for any Publicly
Available Information, or any representation relating to the Company, provided
that nothing in these Terms and Conditions excludes the liability of any
person for any fraudulent misrepresentation made by that person;
6. the only information on which it is entitled to rely
on and on which it has relied in committing to acquire the Placing Shares is
contained in the Announcement and the Publicly Available Information, such
information being all that it deems necessary to make an investment decision
in respect of the Placing Shares and it has made its own assessment of the
Company, the Placing Shares and the terms of the Placing based on the
Announcement and the Publicly Available Information;
7. neither the Bookrunner nor any of its respective
affiliates, agents, directors, officers or employees have made any
representation or warranty to it, express or implied, with respect to the
Company, the Placing or the Placing Shares or the accuracy, completeness or
adequacy of the Announcement, the Circular or the Publicly Available
Information;
8. it has conducted its own investigation of the
Company, the Placing and the Placing Shares, satisfied itself that the
information is still current and relied on that investigation for the purposes
of its decision to participate in the Placing;
9. it has not relied on any investigation that the
Bookrunner or any person acting on its behalf may have conducted with respect
to the Company, the Placing or the Placing Shares;
10. the contents of the Announcement, the Circular and the
other Publicly Available Information as well as any information made available
(in written or oral form) in presentations or as part of roadshow discussions
with investors relating to the Company (the "Information") has been prepared
by and is exclusively the responsibility of the Company and neither the
Bookrunner nor any persons acting on their behalf is responsible for or has or
shall have any liability for any such Information, or for any representation,
warranty or statement relating to the Company contained therein nor will they
be liable for any Placee's decision to participate in the Placing based on any
Information or any representation, warranty or statement contained therein or
otherwise;
11. it has the funds available to pay for the Placing Shares
which it has agreed to acquire and acknowledges and agrees that it will pay
the total subscription amount in accordance with the Announcement and these
Terms and Conditions by the due time and date set out herein, failing which
the relevant Placing Shares may be placed with other Placees or sold at such
price as the Bookrunner determines;
12. it and/or each person on whose behalf it is
participating:
(a) is entitled to acquire Placing Shares pursuant to the
Placing under the laws and regulations of all relevant jurisdictions;
(b) has fully observed such laws and regulations;
(c) has capacity and authority and is entitled to enter
into and perform its obligations as an acquirer of Placing Shares and will
honour such obligations; and
(d) has obtained all necessary consents and authorities
(including, without limitation, in the case of a person acting on behalf of a
Placee, all necessary consents and authorities to agree to the terms set out
or referred to in these Terms and Conditions) under those laws or otherwise
and complied with all necessary formalities to enable it to enter into the
transactions contemplated hereby and to perform its obligations in relation
thereto and, in particular, if it is a pension fund or investment company it
is aware of and acknowledges it is required to comply with all applicable laws
and regulations with respect to its acquisition of Placing Shares;
13. it is not, and any person who it is acting on behalf of
is not, and at the time the Placing Shares are acquired will not be, a
resident of, or with an address in, or subject to the laws of, Australia, New
Zealand, the Republic of Ireland, Canada, the Republic of South Africa or
Japan, and it acknowledges and agrees that the Placing Shares have not been
and will not be registered or otherwise qualified under the securities
legislation of Australia, New Zealand, the Republic of Ireland, Canada, the
Republic of South Africa or Japan and may not be offered, sold, or acquired,
directly or indirectly, within those jurisdictions;
14. it and the beneficial owner of the Placing Shares is,
and at the time the Placing Shares are acquired will be, outside the United
States and acquiring the Placing Shares in an "offshore transaction" as
defined in, and in accordance with, Regulation S under the Securities Act;
15. it understands that the Placing Shares have not been,
and will not be, registered under the Securities Act and may not be offered,
sold or resold in or into or from the United States except pursuant to an
effective registration under the Securities Act, or pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act and in accordance with applicable state securities laws; and no
representation is being made as to the availability of any exemption under the
Securities Act for the reoffer, resale, pledge or transfer of the Placing
Shares;
16. it (and any account for which it is purchasing) is not
acquiring the Placing Shares with a view to any offer, sale or distribution
thereof within the meaning of the Securities Act;
17. it will not distribute, forward, transfer or otherwise
transmit the Announcement or these Terms and Conditions and/or the Circular or
any part of them, or any other presentational or other materials concerning
the Placing in or into or from the United States (including electronic copies
thereof) to any person, and it has not distributed, forwarded, transferred or
otherwise transmitted any such materials to any person;
18. neither the Bookrunner, its respective affiliates and/or
any person acting on behalf of any of them is making any recommendations to it
or advising it regarding the suitability of any transactions it may enter into
in connection with the Placing and that participation in the Placing is on the
basis that it is not and will not be a client of either of the Bookrunner and
that the Bookrunner has no duties or responsibilities to it for providing the
protections afforded to its clients or for providing advice in relation to the
Placing nor in respect of any representations, warranties, undertakings or
indemnities contained in the Placing Agreement nor for the exercise or
performance of any of its rights and obligations thereunder including any
rights to waive or vary any conditions or exercise any termination right;
19. it will make payment to the Bookrunner for the Placing
Shares allocated to it in accordance with these Terms and Conditions on or by
Settlement Date, failing which the relevant Placing Shares may be placed with
others on such terms as the Bookrunner determines in its absolute discretion
without liability to the Placee and it will remain liable for any shortfall
below the net proceeds of such sale and the placing proceeds of such Placing
Shares and may be required to bear any stamp duty or stamp duty reserve tax
(together with any interest or penalties due pursuant to the terms set out or
referred to in these Terms and Conditions) which may arise upon the sale of
such Placee's Placing Shares on its behalf;
20. its Recorded Commitment to acquire Placing Shares will
represent a maximum number of Placing Shares which it may be required to
subscribe for, and that following the allocation process the Bookrunner may
call upon it to subscribe for a lower number of Placing Shares (if any), but
in no event in aggregate more than the aforementioned maximum;
21. no action has been or will be taken by any of the
Company, the Bookrunner or any person acting on behalf of the Company or the
Bookrunner that would, or is intended to, permit a public offer of the Placing
Shares in the United States or in any country or jurisdiction where any such
action for that purpose is required;
22. the person who it specifies for registration as holder
of the Placing Shares will be:
(a) the Placee; or
(b) a nominee of the Placee, as the case may be;
23. neither the Bookrunner nor the Company will be
responsible for any liability to stamp duty or stamp duty reserve tax
resulting from a failure to observe the above requirement. Each Placee and any
person acting on behalf of such Placee agrees to acquire Placing Shares
pursuant to the Placing and agrees to indemnify the Company and the Bookrunner
in respect of the same on the basis that the Placing Shares will be allotted
to a CREST stock account of the Bookrunner or transferred to a CREST stock
account of the Bookrunner who will hold them as nominee on behalf of the
Placee until settlement in accordance with its standing settlement
instructions with it;
24. the allocation, allotment, issue and delivery to it, or
the person specified by it for registration as holder, of Placing Shares will
not give rise to a stamp duty or stamp duty reserve tax liability under (or at
a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act
1986 (depository receipts and clearance services) and it is not participating
in the Placing as nominee or agent for any person or persons to whom the
allocation, allotment, issue or delivery of Placing Shares would give rise to
such a liability;
25. if it is within the United Kingdom, it and any person
acting on its behalf (if within the United Kingdom) falls within Article 19(5)
and/or 49(2) of the Order and undertakes that it will acquire, hold, manage
and (if applicable) dispose of any Placing Shares that are allocated to it for
the purposes of its business only;
26. it has not offered or sold and will not offer or sell
any Placing Shares to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing
of investments (as principal or agent) for the purposes of their business or
otherwise in circumstances which have not resulted and which will not result
in an offer to the public in the United Kingdom within the meaning of section
85(1) of the FSMA or an offer to the public in any other member state of the
EEA within the meaning of the UK Prospectus Regulation, or an offer to the
public in any Relevant State within the meaning of the EU Prospectus
Regulation;
27. it has only communicated or caused to be communicated
and it will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of section 21
of the FSMA) relating to Placing Shares in circumstances in which section
21(1) of the FSMA does not require approval of the communication by an
authorised person and it acknowledges and agrees that neither the
Announcement, these Terms and Conditions nor the Circular has been or will be
approved by the Bookrunner in its capacity as an authorised person under
section 21 of the FSMA and it may not therefore be subject to the controls
which would apply if it was made or approved as a financial promotion by an
authorised person;
28. it has complied and it will comply with all applicable
laws in any jurisdiction with respect to anything done by it or on its behalf
in relation to the Placing Shares (including all relevant provisions of the
FSMA and UK MAR in respect of anything done in, from or otherwise involving
the United Kingdom);
29. the Placing Shares acquired by it in the Placing will
not be acquired on a non-discretionary basis on behalf of, nor will they be
acquired with a view to their offer or resale to any person save in
circumstances in which the express prior written consent of the Bookrunner has
been given to the offer or resale;
30. if it has received any inside information (for the
purposes of UK MAR and/or section 56 of the Criminal Justice Act 1993 or other
applicable law) about the Company in advance of the Placing, it has not:
(a) dealt (or attempted to deal) in the securities of the
Company;
(b) encouraged, recommended or induced another person to
deal in the securities of the Company; or
(c) unlawfully disclosed such information to any person,
prior to the information being made publicly available;
31. neither the Bookrunner, the Company nor any of their
respective affiliates, agents, advisers, directors, officers or employees nor
any person acting on behalf of the Bookrunner or the Company or their
respective affiliates, agents, advisers, directors, officers or employees nor
any person acting on behalf of any of them is making any recommendations to
it, advising it regarding the suitability of any transactions it may enter
into in connection with the Placing nor providing advice in relation to the
Placing nor in respect of any representations, warranties, acknowledgements,
agreements, undertakings, or indemnities contained in the Placing Agreement
nor the exercise or performance of the Bookrunner's rights and obligations
thereunder including any rights to waive or vary any conditions or exercise
any termination right;
32. either the Bookrunner and its respective affiliates,
acting as an investor for its or their own account(s), may bid or subscribe
for and/or purchase Placing Shares and, in that capacity, may retain,
purchase, offer to sell or otherwise deal for its or their own account(s) in
the Placing Shares, any other securities of the Company or other related
investments in connection with the Placing or otherwise. Accordingly,
references in these Terms and Conditions and/or the Announcement to the
Placing Shares being offered, subscribed, acquired or otherwise dealt with
should be read as including any offer to, or subscription, acquisition or
dealing by, the Bookrunner and/or any of its respective affiliates acting as
an investor for its or their own account(s). Neither the Bookrunner nor the
Company intend to disclose the extent of any such investment or transaction
otherwise than in accordance with any legal or regulatory obligation to do so;
33. it:
(a) has complied, and will comply, with its obligations in
connection with money laundering and terrorist financing under the Proceeds of
Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money
Laundering, Terrorist Financing and Transfer of Funds (Information on the
Payer) Regulations 2017 (in each case as amended);
(b) is not a person:
(i) with whom transactions are prohibited under the US
Foreign Corrupt Practices Act of 1977 or any economic sanction programmes
administered by, or regulations promulgated by, the Office of Foreign Assets
Control of the U.S. Department of the Treasury;
(ii) named on the Consolidated List of Financial Sanctions
Targets maintained by HM Treasury of the United Kingdom; or
(iii) subject to financial sanctions imposed pursuant to a
regulation of the European Union or a regulation adopted by the United Nations
or other applicable law,
(all such statutes, rules and regulations referred to in this paragraph 33
together, the "Regulations") and if making payment on behalf of a third party,
that satisfactory evidence has been obtained and recorded by it to verify the
identity of the third party as required by the Regulations and has obtained
all governmental and other consents (if any) which may be required for the
purpose of, or as a consequence of, such purchase, and it will provide
promptly to the Bookrunner such evidence, if any, as to the identity or
location or legal status of any person which it may request from it in
connection with the Placing (for the purpose of complying with the Regulations
or ascertaining the nationality of any person or the jurisdiction(s) to which
any person is subject or otherwise) in the form and manner requested by the
Bookrunner on the basis that any failure by it to do so may result in the
number of Placing Shares that are to be acquired by it or at its direction
pursuant to the Placing being reduced to such number, or to nil, as the
Bookrunner may decide at its sole discretion;
34. in order to ensure compliance with the Regulations, the
Bookrunner (for itself and as agent on behalf of the Company) or the Company's
registrars may, in their absolute discretion, require verification of its
identity. Pending the provision to the Bookrunner or the Company's registrars,
as applicable, of evidence of identity, definitive certificates in respect of
the Placing Shares may be retained at the Bookrunner's absolute discretion or,
where appropriate, delivery of the Placing Shares to it in uncertificated form
may be delayed at the Bookrunner's or the Company's registrars', as the case
may be, absolute discretion. If within a reasonable time after a request for
verification of identity the Bookrunner (for itself and as agent on behalf of
the Company) or the Company's registrars have not received evidence
satisfactory to them, either the Bookrunner and/or the Company may, at its
absolute discretion, terminate its commitment in respect of the Placing, in
which event the monies payable on acceptance of allotment will, if already
paid, be returned without interest to the account of the drawee's bank from
which they were originally debited;
35. its commitment to acquire Placing Shares on the Terms
and Conditions will continue notwithstanding any amendment that may in future
be made to the terms and conditions of the Placing and that Placees will have
no right to be consulted or require that their consent be obtained with
respect to the Company's or any Bookrunner's conduct of the Placing;
36. neither of the Bookrunnernor any of its respective
affiliates, agents, advisers, directors, officers or employees makes any
representation in respect of or shall have any responsibility for the tax
treatment that any Placee may receive or expect in relation to their
investment in Placing Shares;
37. it has knowledge and experience in financial, business
and international investment matters as is required to evaluate the merits and
risks of acquiring the Placing Shares. It further acknowledges that it is
experienced in investing in securities of this nature and is aware that it may
be required to bear, and is able to bear, the economic risk of, and is able to
sustain, a complete loss in connection with the Placing. It has relied upon
its own examination and due diligence of the Company and its affiliates taken
as a whole, and the terms of the Placing, including the merits and risks
involved;
38. it irrevocably appoints any duly authorised officer of
the Bookrunner as its agent for the purpose of executing and delivering to the
Company and/or its registrars any documents on its behalf necessary to enable
it to be registered as the holder of any of the Placing Shares which it agrees
to acquire upon these Terms and Conditions;
39. the Company, the Bookrunner and others (including each
of their respective affiliates, agents, advisers, directors, officers and
employees) will rely upon the truth and accuracy of the foregoing
representations, warranties, acknowledgements and agreements, which are given
to each of the Bookrunner on their own behalf and on behalf of the Company and
are irrevocable;
40. it is acting as principal only in respect of the Placing
or, if it is acquiring the Placing Shares as a fiduciary or agent for one or
more investor accounts, it is duly authorised to do so and it has full power
and authority to make, and does make, the foregoing representations,
warranties, acknowledgements, agreements and undertakings on behalf of each
such accounts;
41. time is of the essence as regards its obligations under
these Terms and Conditions;
42. any document that is to be sent to it in connection with
the Placing will be sent at its risk and may be sent to it at any address
provided by it to the Bookrunner;
43. the Placing Shares will be issued subject to these Terms
and Conditions; and
44. these Terms and Conditions and all documents into which
these Terms and Conditions are incorporated by reference or otherwise validly
forms a part and/or any agreements entered into pursuant to these Terms and
Conditions and all agreements to acquire Placing Shares pursuant to the
Placing will be governed by and construed in accordance with English law and
it submits to the exclusive jurisdiction of the English courts in relation to
any claim, dispute (contractual or otherwise) or matter arising out of or in
connection with such contract except that enforcement proceedings in respect
of the obligation to make payment for the Placing Shares (together with
interest chargeable thereon) may be taken by the Company or the Bookrunner in
any jurisdiction in which the relevant Placee is incorporated or in which any
of its securities have a quotation on a recognised stock exchange.
By participating in the Placing, each Placee (and any person acting on such
Placee's behalf) agrees to indemnify and hold the Company, the Bookrunner and
each of their respective affiliates, agents, directors, officers and employees
harmless from any and all costs, claims, liabilities and expenses (including
legal fees and expenses) arising out of or in connection with any breach of
the representations, warranties, acknowledgements, agreements and undertakings
given by the Placee (and any person acting on such Placee's behalf) in these
Terms and Conditions or incurred by the Bookrunner, the Company or any of
their respective affiliates, agents, directors, officers or employees arising
from the non-performance of the Placee's obligations as set out in these Terms
and Conditions, and further agrees that the provisions of these Terms and
Conditions shall survive after the completion of the Placing.
The agreement to allot and issue Placing Shares to Placees (or the persons for
whom Placees are contracting as agent) free of stamp duty and stamp duty
reserve tax in the United Kingdom relates only to their allotment and issue to
Placees, or such persons as they nominate as their agents, direct by the
Company. Such agreement assumes that the Placing Shares are not being acquired
in connection with arrangements to issue depositary receipts or to transfer
the Placing Shares into a clearance service. If there are any such
arrangements, or the settlement related to any other dealings in the Placing
Shares, stamp duty or stamp duty reserve tax may be payable. In that event,
the Placee agrees that it shall be responsible for such stamp duty or stamp
duty reserve tax and neither the Company nor the Bookrunner shall be
responsible for such stamp duty or stamp duty reserve tax. If this is the
case, each Placee should seek its own advice and they should notify the
Bookrunner accordingly. In addition, Placees should note that they will be
liable for any capital duty, stamp duty and all other stamp, issue,
securities, transfer, registration, documentary or other duties or taxes
(including any interest, fines or penalties relating thereto) payable outside
the United Kingdom by them or any other person on the acquisition by them of
any Placing Shares or the agreement by them to acquire any Placing Shares and
each Placee, or the Placee's nominee, in respect of whom (or in respect of the
person for whom it is participating in the Placing as an agent or nominee) the
allocation, allotment, issue or delivery of Placing Shares has given rise to
such non-United Kingdom stamp, registration, documentary, transfer or similar
taxes or duties undertakes to pay such taxes and duties, including any
interest and penalties (if applicable), forthwith and to indemnify on an
after-tax basis and to hold harmless the Company and the Bookrunner in the
event that any of the Company and/or the Bookrunner has incurred any such
liability to such taxes or duties.
The representations, warranties, acknowledgements and undertakings contained
in these Terms and Conditions are given to the Bookrunner for itself and on
behalf of the Company and are irrevocable.
The Bookrunner is authorised and regulated by the FCA in the United Kingdom
and are acting exclusively for the Company and no one else in connection with
the Placing, and will not be responsible to anyone (including any Placees)
other than the Company for providing the protections afforded to their clients
or for providing advice in relation to the Placing or any other matters
referred to in these Terms and Conditions.
Each Placee and any person acting on behalf of the Placee acknowledges that
the Bookrunner does not owe any fiduciary or other duties to any Placee in
respect of any representations, warranties, undertakings, acknowledgements,
agreements or indemnities in the Placing Agreement.
The provisions of these Terms and Conditions may be varied, waived or modified
as regards specific Placees or on a general basis by the Bookrunner provided
always that such variation, waiver or modification is not materially
prejudicial to the interests of the Company.
In the case of a joint agreement to acquire Placing Shares, references to a
"Placee" in these Terms and Conditions are to each of such Placees and such
joint Placees' liability is joint and several.
Each Placee and any person acting on behalf of the Placee acknowledges and
agrees that the Bookrunner may (at its absolute discretion) satisfy its
obligations to procure Placees by itself agreeing to become a Placee in
respect of some or all of the Placing Shares or by nominating any connected or
associated person to do so.
When a Placee or any person acting on behalf of the Placee is dealing with a
Bookrunner, any money held in an account with the Bookrunner on behalf of the
Placee and/or any person acting on behalf of the Placee will not be treated as
client money within the meaning of the relevant rules and regulations of the
FCA made under the FSMA. Each Placee acknowledges that the money will not be
subject to the protections conferred by the client money rules: as a
consequence this money will not be segregated from the Bookrunner's money in
accordance with the client money rules and will be held by it under a banking
relationship and not as trustee.
In these Terms and Conditions any words following the terms "including",
"include", "in particular", "for example" or any similar expression shall be
construed as illustrative and shall not limit the sense of the words,
description, definition, phrase or term preceding those terms.
References to time in the Terms and Conditions are to London time, unless
otherwise stated.
All times and dates in these Terms and Conditions may be subject to amendment.
Placees will be notified of any changes.
No statement in the Announcement, these Terms and Conditions or the Circular
is intended to be a profit forecast or estimate, and no statement in the
Announcement, these Terms and Conditions or the Circular should be interpreted
to mean that earnings per share of the Company for the current or future
financial years would necessarily match or exceed the historical published
earnings per share of the Company.
The price of shares and any income expected from them may go down as well as
up and investors may not get back the full amount invested upon disposal of
the shares. Past performance is no guide to future performance, and persons
needing advice should consult an independent financial adviser.
The Placing Shares to be issued pursuant to the Placing will not be admitted
to trading on any stock exchange other than AIM.
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,
these Terms and Conditions and/or the Announcement.
DEFINITIONS
In this Announcement the following terms have the associated meanings:
"Act" the Companies Act 2006 (as amended)
"Admission" means admission of the Placing Shares, Subscription Shares and Open Offer
Shares to trading on AIM becoming effective as provided in Rule 6 of the AIM
Rules for Companies
"Admission Date" means 8.00 a.m. on 9 January 2023 or such later time as the Bookrunner may
agree with the Company but in any event no later than 8.00 a.m. on the Long
Stop Date
"AIM" the AIM market operated by the London Stock Exchange
"AIM Rules for Companies" means the rules of AIM as set out in the publication entitled "AIM Rules for
Companies" published by the London Stock Exchange from time to time
"Announcement" this announcement
"Application Form" the personalised application form that will be posted with the Circular for
use by Qualifying Shareholders in connection with the Open offer
"Bank" means finnCap
"Bookbuild" an accelerated process conducted by the Bank to determine demand for
participation in the Placing by Placees
"Business Day" means a day (excluding Saturdays, Sundays and statutory holidays) on which
banks are open for business in the City of London
"Circular" means the explanatory circular, in the agreed form, to be issued by the
Company to Shareholders explaining, inter alia, the Fundraising and
incorporating the notice of the General Meeting
"Company" Trackwise Designs Plc registered in England and Wales under number 03959572
whose registered office is at 1 Ashval Alexandra Way, Ashchurch, Tewkesbury,
Gloucestershire, England GL20 8NB
"CREST" the computerised settlement system to facilitate transfer of the title to an
interest in securities in uncertificated form operated by Euroclear
"Directors" or "Board" the directors of the Company at the date of this Announcement
"Euroclear" Euroclear UK & International Limited
"Existing Ordinary Shares" the 37,508,065 Ordinary Shares in issue at the date of this Announcement;
"finnCap" finnCap Ltd, a company incorporated in England and Wales with company number
06198898, authorised and regulated by the Financial Conduct Authority
"Fundraising" means the Placing, the Subscription and the Open Offer
"General Meeting" means the general meeting of the Company to be held at the 1 Ashvale,
Alexandra Way, Tewkesbury, Gloucestershire GL20 8NB on 6 January 2023 at 10:00
a.m., convened pursuant to the Notice of General Meeting
"Bookrunner" means finnCap
"London Stock Exchange" London Stock Exchange plc
"Long Stop Date" means 5.30 p.m. on 27 January 2023
"New Ordinary Shares" together the Placing Shares, Subscription Shares and the Open Offer Shares
"Notice of General Meeting" the notice of the General Meeting contained within the Circular
"Open Offer" means the conditional invitation proposed to be made by the Company to
Qualifying Shareholders to subscribe for the Open Offer Shares
"Open Offer Shares" means up to 149,999,860 New Ordinary Shares which are to be the subject of the
Open Offer
"Ordinary Shares" ordinary shares of £0.04 each in the capital of the Company and following the
approval of the Capital Reorganisation by the Shareholders the ordinary shares
of £0.001 each in the capital of the Company
"Placees" means the persons with whom Placing Shares are placed pursuant to the Placing
"Placing" the conditional placing of the Placing Shares by the Bookrunner on behalf of
the Company at the Placing Price, in accordance with the Placing Agreement
"Placing Agreement" the conditional placing agreement relating to the Placing of the Placing
Shares between the Company and the Bank
"Placing Price" or "Issue Price" 1 pence per New Ordinary Share
"Placing Shares" the 364,224,700 New Ordinary Shares to be conditionally placed for cash with
investors pursuant to the Placing in accordance with the terms of the Placing
Agreement
"Qualifying Shareholders" Shareholders whose Ordinary Shares are on the register of members of the
Company at the close of business on the Record Date with the exclusion
(subject to exemptions) of persons with a registered address or located or
resident outside the United Kingdom
"Record Date" close of business on 12 December 2022
"Regulation S" Regulation S under the Securities Act 1933, as amended
"Resolutions" the resolutions contained in the Notice of General Meeting
"Shareholders" holders of Ordinary Shares
"Subscription" the private subscription at the Issue Price by Charles Cattaneo, directly with
the Company for the Subscription Shares pursuant to the Subscription Letter
"Subscription Letter" the letter to be entered into between the Company and Charles Cattaneo
"Subscription Shares" the 300,000 New Ordinary Shares which are to be issued by the Company pursuant
to the Subscription
"United States or US" the United States of America, its territories and possessions, any state of
the United States and the District of Columbia
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