TIDMEDEN
RNS Number : 6231H
Eden Research plc
28 July 2023
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, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA,
JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION
OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT
INFORMATION SECTION AT THE OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMATION,
OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE
OR DISPOSE OF ANY SECURITIES IN EDEN RESEARCH PLC OR ANY OTHER
ENTITY IN ANY JURISDICTION WHERE TO DO SO WOULD BREACH ANY
APPLICABLE LAW OR REGULATION. NEITHER THIS ANNOUNCEMENT NOR THE
FACT OF ITS DISTRIBUTION SHALL FORM THE BASIS OF, OR BE RELIED ON
IN CONNECTION WITH, ANY INVESTMENT DECISION IN RESPECT OF EDEN
RESEARCH PLC.
THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU) 596/2014 WHICH FORMS PART OF UK
LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("UK
MAR"). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN UK MAR) WERE
TAKEN IN RESPECT OF CERTAIN OF THE MATTERS CONTAINED IN THIS
ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF
SUCH INSIDE INFORMATION, AS PERMITTED BY UK MAR. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL
THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.
28 July 2023
Eden Research Plc
("Eden" or "Company")
Proposed Firm Capital Raising of GBP1.1 million, Minimum
Conditional Capital Raising of GBP7.9 million & Retail Offer to
raise up GBP0.5 million
Eden Research plc (AIM: EDEN), the AIM-quoted company that
develops and supplies breakthrough biopesticide products and
natural microencapsulation technologies to the global crop
protection, animal health and consumer products industries, today
announces that it has raised GBP1.1 million (before expenses)
through a firm placing and subscription of new Ordinary Shares
("Firm Capital Raising") and has conditionally raised a minimum of
GBP7.9 million (before expenses) by way of a Placing of new
Ordinary Shares ("Conditional Capital Raising"). The Conditional
Capital Raising is subject to the conditions set out below,
including receipt of EIS Advance Assurance from HMRC and a
Reduction of Capital (the "Conditions"). The Directors may increase
the Conditional Capital Raising to a maximum of GBP 9.4 million
prior to Second Admission.
The Firm Capital Raising and the Conditional Capital Raising
(together the "Capital Raising") will be at the Issue Price of 6.5
pence per share (the "Issue Price") to certain institutional and
other investors. Furthermore, to enable other Shareholders not able
to participate in the Capital Raising an opportunity to subscribe
for additional Ordinary Shares, the Company is proposing to raise
up to an additional GBP0.5 million (before expenses) by way of a
retail offer to its existing shareholders via the Bookbuild
Platform (the "Retail Offer") of up to 7,692,308 new Ordinary
Shares at the Issue Price.
Eden is currently the only UK-quoted company focused on
biopesticides for sustainable agriculture and is well positioned to
capitalise on the rapidly growing biopesticides market, which is
projected to be worth over GBP11 billion by 2027. The Company
expects to apply the net proceeds of the Firm Capital Raising and
any proceeds from the Retail Offer principally to fund materials to
build up stocks for its new seed treatment. Subject to the
satisfaction of the Conditions, the Conditional Capital Raising
will be used to advance the development, registration and
commercialisation of new key product categories, including new
insecticide formulations and seed treatments.
Transaction Highlights
-- Firm Placing and Firm Subscription of 16,923,077 new Ordinary
Shares at the Issue Price with new and existing investors to raise
GBP1.1 million (before expenses), comprised of a Firm Placing of
13,945,076 ordinary shares and a Firm subscription for 2,978,001
new Ordinary Shares by Sipcam Oxon S.p.A. and certain Directors
(intend to subscribe) at the Issue Price.
-- Conditional Capital Raising of a minimum of 121,538,462 new
Ordinary Shares at the Issue Price with new and existing investors
to raise GBP7.9 million (before expenses) with potential to raise
up to an additional GBP1.5 million prior to Second Admission.
-- Retail Offer at the Issue Price to raise up to an additional
GBP0.5 million (before expenses)
-- The Directors intend to use the net proceeds from the Firm
Capital Raise and any proceeds from the Retail Offer for the
following purposes:
o Working capital to fund stock purchase for the Company's new
seed treatment product
o Territory expansion (e.g. India, LATAM, SEA) for Mevalone and
Cedroz
o Label expansion through lab screening, pot and field trials,
formulation development etc for the Company's new seed
treatment
o Expand commercial team with commercial director and market
development /Product Manager
The Directors intend to use the net proceeds from the
Conditional Capital Raise for the following purposes:
o Additional seed treatment label expansions
o Insecticide label expansions
o New product development
o US based team
The Company will shortly be posting a Notice of General Meeting
and an accompanying circular (the "Circular") to existing
shareholders following this announcement. All relevant documents
will be available to download at https://www.edenresearch.com/
.
Sean Smith, Chief Executive Officer of Eden, said :
"Just over three years ago, with the support of a strong group
of new and existing investors, Eden successfully refinanced the
Company which facilitated the building of a highly effective team
capable of accelerating the pace of innovation and commercial
progress. Subsequently, we have demonstrated the progress that can
be made when resourced adequately to support advancement and
growth. There is no better example of this than the recent
announcement of our new seed treatment product, Ecovelex, which was
developed in close collaboration with Corteva Agriscience. Ecovelex
represents not only an entirely new category of products for Eden,
but it demonstrates what a focussed, experienced and motivated team
can achieve in a relatively short period of time. Ecovelex was
invented by Eden's team working in our facilities just south of
Oxford.
Today, with the encouragement of a good number of new and
existing investors, we are pleased to take the next step along our
journey, with an accelerated pace and purposeful stride. With the
support of investors, we will be able to fulfil an order that
represents an opportunity to jump-start the commercialisation of a
new product. Moreover, in response to strong investor interest, we
will be providing the Company with the financial strength to grow
our addressable market and business overall.
As I said three years ago, the outlook for the biopesticides
market remains undoubtedly positive, with a clear, growing demand
from a consumer market for sustainably grown produce and a notable
shift towards greener farming practices. Eden's biopesticide
solutions combine high levels of efficacy that are comparable to
synthetic pesticides and are aligned with the direction of
regulatory travel, which has seen restrictions and, in some cases,
the removal of conventional products from the market, such as we
have seen in the bird repellent seed treatment market, the target
for Ecovelex."
The information contained within this announcement (the
"Announcement") is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014. Upon the publication of this Announcement via
Regulatory Information Service, this inside information is now
considered to be in the public domain.
For further information contact:
Eden Research plc www.edenresearch.com
Sean Smith
Alex Abrey 01285 359 555
Cenkos Securities (Nominated advisor and
broker)
Giles Balleny / Max Gould (corporate finance)
Michael Johnson / Dale Bellis / Tamar
Cranford-Smith (sales) 020 7397 8900
Hawthorn Advisors (Financial PR)
Simon Woods eden@hawthornadvisors.com
Felix Meston
1. Introduction
On 28 July 2023, the Company announced a proposed Fundraising,
pursuant to which it proposes to raise, subject to certain
conditions up to GBP11.0 million (before expenses) by (i) the Firm
Capital Raising of GBP1.1 million at the Issue Price with certain
institutional and other investors, including Sipcam; (ii) the
Conditional Capital Raising of a minimum GBP7.9 million at the
Issue Price to certain institutional investors with the potential
to increase the Conditional Capital Raise by up to GBP1.5 million;
and (iii) up to approximately GBP0.5 million (before expenses) by
way of a Retail Offer made to existing Shareholders of up to
7,692,308 new Ordinary Shares at the Issue Price.
The net proceeds of the Firm Capital Raising and any proceeds of
the Retail Offer will be used principally to fund materials to
build up inventory for the new seed treatment. Subject to the
satisfaction of the Conditions, the Conditional Capital Raising
will be used to advance the development, registration and
commercialisation of new key product categories, including new
insecticide formulations and seed treatments , as well as to
provide additional working capital for the Group associated with
the new development areas, as described in more detail in paragraph
4 of the Circular.
The Conditional Capital Raising is conditional (amongst other
things) upon (i) the approval of the Resolutions at the General
Meeting; (ii) the Advanced Assurance being obtained from HMRC;
(iii) the Capital Reduction becoming effective; and (iv) Second
Admission.
The Issue Price equates to a discount of 13.3 per cent. to the
closing middle market price of 7.5 pence per Ordinary Share on 27
July 2023 (being the last Business Day before announcement of the
Fundraising).
In addition to the Fundraising, the Company is proposing to
carry out a capital reduction through the cancellation of the
Company's share premium account. This would have the effect of
creating distributable reserves, which would be used to eliminate
any accumulated deficit on the Company's profit and loss account
and to the extent that the balance arising upon completion of the
proposed reduction exceeds such deficit, to create distributable
reserves.
The background to and reasons for the Capital Reduction are set
out in paragraph 3 of the Circular. The Capital Reduction is
conditional upon, amongst other things, the approval of the Court
and of the Shareholders at the General Meeting.
2. Background and rationale for the Placing and Retail Offer
The Company's vision is for the Group to become the leader in
sustainable bioactive products and the Board believes that the
Group is well positioned to capitalise on the global shift towards
more environmentally friendly methods of crop protection. The
Company is currently the only UK quoted company focused on
biopesticides for sustainable agriculture. The Group develops and
supplies innovative biopesticide products to the global crop
protection market, using the Company's patented microencapsulation
technology, Sustaine(R). Sustaine microcapsules are naturally
sourced, plastic-free, biodegradable micro-spheres derived from
yeast extract. Importantly, the Sustaine microencapsulation
technology enables the technical viability of naturally occurring
terpenes for use in commercial crop protection. The Company's
current products include biofungicide, Mevalone; bionematicide,
Cedroz; and bird repellent seed treatment, Ecovelex(TM).
The Group's presence grew in 2020-23 through new authorisations
for both Cedroz and Mevalone, including in the USA in September
2022 and in Poland and New Zealand in 2023. The Directors
anticipate further approvals in Europe and further abroad in 2023,
with various submissions pending including in Brazil, South Africa,
Chile and Argentina. The Directors expect the UK and a range of
other Central EU countries to approve Mevalone in 2023.
The Company is pursuing the Fundraising to continue to drive
commercial progress on the back of recent approvals and expected
further overseas approvals; to expand the Company's product
portfolio; and to commercialise the first seed treatment
product.
Market Opportunity for Biopesticides
While the use of effective pesticides has been fundamental to
the farming revolution over the last 100 years, governments and
consumers have increasingly begun to acknowledge the risk to the
environment and human health posed by some conventional pesticides.
This has led to the banning or restriction (especially in Europe)
of some common pesticides such as Neonicotinoids and
Chlorothalonil.
This has subsequently increased the use of biopesticides and, as
a result, the biopesticides market is growing at a compound annual
growth rate (CAGR) of approximately 15% per annum and is projected
to be worth more than $11 billion by 2027. The global seed
treatment market is projected to be worth more than $12.5 billion
by 2027.
The Group's biopesticide solutions solve a number of the issues
of conventional pesticides. Using plant derived active ingredients
that are generally accepted as safe by regulators around the world
means that the products are not subject to residue limits or long
pre-harvest intervals, and can be used to treat post-harvest
storage diseases on some produce, subject to regulatory
approval.
In addition, the Group's yeast based Sustaine encapsulation
technology allows the Group's products and conventional pesticides
to be used without the addition of micro-plastics. There are
currently global concerns regarding the volume of micro-plastics in
the environment and the impact their presence has on human health
and wildlife. In response, there have been new regulations proposed
which could restrict the intentional addition of plastic to crop
protection and health products, which has created a need for the
major pesticide producers to actively look for alternative
approaches to the encapsulation of existing chemical treatments. In
addition, the time and cost of bringing new agrochemical products
to market has increased to around 10 to 12 years and approximately
$300 million respectively.
From a broader perspective, concerns regarding the impact on
human health of some pesticides has increased the consumer desire
for sustainable and organic products and encouraged regulators to
put stricter controls around spraying of crops and the residue
limits that are applied to farm produce.
Eden's Current Products and Technology
Mevalone(R) - Fungicide Product
Eden's first biopesticide, Mevalone, is a fungicide used in the
prevention and treatment of botrytis in table and wine grapes, as
well as the control of powdery mildew on grapevines and, in certain
territories, the treatment of botrytis on a range of crops ranging
from kiwis to onions.
In the last 12 months the Company has received regulatory
approvals for use on a range of new crops in countries such as
Italy, the USA (now approved in 17 states), New Zealand and Poland.
Approval in the state of California, a key market for Mevalone, is
expected in time for the 2024 growing season. Cedroz has already
received approval in California.
The Company recently signed a distribution agreement with large
agriscience business, Corteva, which allows Corteva to market,
distribute and sell the Group's fungicide product, Mevalone(R), in
France on an exclusive basis. There are existing distribution
agreements for Mevalone with Sipcam and Sumi Agro for other major
territories, and the Company recently announced Anasac Colombia Ltd
as its exclusive distributor of Mevalone in Colombia.
Given the recent flow of regulatory approvals and the
distribution agreements now in place, the Directors believe the
Group is well placed to begin delivering material sales of the
product. Proceeds from the Fundraising will be deployed to further
commercialise this product for new uses and for as-yet untapped
markets such as India and S.E Asia.
Cedroz ä - Nematicide Product
In addition to Mevalone, Eden has developed a nematicide product
which is used to tackle nematode infestations which can damage
crops and affect yield. Nematodes are parasites that affect a wide
range of crops grown in open fields and in greenhouses.
In 2016, Eden signed an exclusive distribution agreement with
Eastman Chemical for the nematicide product which has since been
branded Cedroz. Eastman acquired the rights to register and sell
Cedroz in 29 countries. Sales of Cedroz began in the EU in 2020.
Cedroz is approved in South and Central EU on a wide range of high
value crops. In September 2022, Cedroz(TM) received approval for
use in various states in the USA, including Florida and California.
Further submissions for approvals in various additional key markets
around the world have been made.
Given recent progress and approvals, the Directors expect a
return to sales growth for Cedroz(TM) in 2023.
Ecovelex(TM) - Bird repellent seed treatment
Ecovelex(TM) is a biological bird repellent seed treatment
initially for use on maize. Subject to regulatory approvals,
Ecovelex(TM) represents a new entrant into the seed treatment
market and is intended to replace conventional chemicals banned in
the EU and UK. It was developed to tackle crop destruction caused
by birds - a major cause of losses in maize and other crops.
Ecovelex(TM) works by affecting the bird's olfactory system,
creating an unpleasant taste or odour that repels the bird, leaving
the seeds safely intact and the bird unaffected and free to find
alternative food sources. The product is based on plant-derived
chemistry and formulated using the Group's Sustaine
microencapsulation system, supporting farmers as they strive to
meet consumer demands for more sustainable agriculture.
Ecovelex(TM) has been developed over three years through a
collaboration with Corteva, for which a development agreement was
signed in May 2021. Field trials undertaken by both parties were
successful and demonstrated efficacy. An application for regulatory
authorization has been submitted to the EU and UK regulatory
authorities, with the approval process expected to take between 18
and 24 months, and therefore the possibility of sales in time for
the 2024 growing season, subject to emergency use authorisations.
Initial markets targeted are the EU plus the UK.
It is expected that the product will be commercialised in
additional regions and further developed for use on additional
crops in due course and part of the proceeds from the Fundraising
will be utilised to progress these aims.
Sustaine (R) - Microencapsulation Technology
The Group proposes to use part of the proceeds from the
Conditional Placing to continue actively developing formulations
with traditional chemical products using its Sustaine
microencapsulation technology.
By 2025 in the EU, pesticides containing synthetic polymer
microplastics are likely to be severely restricted or banned
entirely and removed from the market. The Directors believe that
the only acceptable alternative is the substitution with
biodegradable formulations. Reformulated products will likely need
to be evaluated and registered within the five-year transition
period.
The Group has developed a natural formulation technology,
Sustaine(R), using particles derived from natural yeast cells. The
technology was originally developed as a drug delivery method for
human health applications before the Group adapted it for use in
the encapsulation of pesticides. By creating a stabilised aqueous
emulsion, Sustaine(R) enables the formulation of pesticides using a
number of terpene-based active ingredients which would not be
suitable without being encapsulated. The encapsulation provides for
the sustained release of these ingredients when in contact with
water slowing or stopping release in dry conditions, enabling their
safe, more efficient use. The benefit of Sustaine(R) is that it is
cost effective, useful for a wide range of active ingredients,
plastic-free, high capacity, robust, sustainable and facilitates
reduced phytotoxicity.
Sustaine(R) is a proven, commercially-used solution to the
microplastics problem in formulations requiring encapsulation. The
Group currently has a number of projects underway where it is
testing the compatibility of Sustaine(R) with third-party active
ingredients to determine whether benefits such as formulation
stability, dose reduction or resistance management could be
achieved. The regulatory restriction of microplastics used as
components of crop protection and many other products contributes
significantly to the opportunity for Eden to deploy its Sustaine(R)
technology on a very large scale.
3. Background and rationale for the Capital Reduction
The Company had accumulated losses of GBP43.3 million and
GBP39.3 million standing to the credit of its share premium account
shown by its audited accounts for the period to 31 December
2022.
The Company's share premium account will be increased by up to
approximately GBP1,353,846 on the issue of the Firm Shares and the
Retail Offer Shares, assuming an aggregate maximum of GBP1,600,000
raised following First Admission.
It is proposed to cancel the Company's share premium account
which would have the effect of leaving it with distributable
reserves of an estimated GBP0.5 million to GBP1.0 million,
depending on the outcome of the Retail Offer.
Whilst the Board and management remain focussed on the continued
execution of the Company's stated growth strategy as the primary
means of delivering shareholder value in the near term and has no
current intention of declaring dividends, the proposed Capital
Reduction would provide greater scope to do so in the future if the
Board determined that the declaration of dividends were
appropriate.
In addition, the Capital Reduction would provide the Board with
the option, should it so wish, and should it be appropriate to do
so, of purchasing the Company's own Ordinary Shares pursuant to the
power granted at the Company's annual general meeting on 29 June
2023, which requires sufficient distributable reserves to do
so.
4. Use of proceeds
The Directors intend to use the net proceeds from the Firm
Capital Raising and Retail Offer of approximately GBP1.35 million
and net proceeds of the Conditional Capital Raising, assuming full
take up, of approximately GBP8.8 million for the following
purposes:
Firm Capital Raising and Retail Offer:
-- c. GBP0.5 million for the launch of the new seed treatment and label expansion;
-- c. GBP0.2 million to expand the Group's commercial team; and
-- c. GBP0.3 million to expand territories for Mevalone and Cedroz products.
Conditional Capital Raising:
-- c. GBP2.5 million for the further development of the seed
treatment product and additional label expansions;
-- c. GBP2.5 million for insecticide label expansion into new territories;
-- c. GBP2.5 million for new product development;
-- c. GBP0.5 million to expand the Group's commercial team; and
-- c. GBP0.5 to 1.5 million for general working capital
There can be no certainty that the Conditions will be satisfied
and the Conditional Shares will be issued. If that is the case, the
proceeds of the Conditional Capital Raising will not be
received.
5. Current Trading and Prospects
The first half of 2023 has seen a modest increase in product
sales. Though it is relatively early in the season to know with any
certainty, early indications from southern Europe, in particular,
are that the sales of Mevalone are developing well. Sales of Cedroz
have also shown a strong return to growth in the first half of the
year.
The Company also believes that there is a reasonable opportunity
to gain emergency authorisations for Ecovelex, and if this is
granted it is possible that product sales revenue overall may
exceed the current forecast, although it is, of course, too early
to say at this stage.
In 2024, the Company expects to see further, strong product
sales growth off the back of approvals for both Mevalone and Cedroz
in the US and Central Europe, as well as label extensions for
Mevalone in various countries. Sales in the US for Mevalone are,
however, materially influenced by the timing of receipt of the
approval in California, which is currently expected before the end
of 2023.
In addition and subject to the receipt of regulatory clearance,
the Company expects sales of Ecovelex to contribute significantly
to the top line in 2024.
Subject to successful field trials undertaken by several
interested parties, the Company expects to move into commercial
negotiations for its insecticide product towards the end of 2023
and into early 2024. It is currently expected that the insecticide
will be ready for sale in 2024/25 in the US and 2025/6 in the EU,
subject to regulatory timing and approvals.
6. Related parties' participation
Directors' participation in the Firm Capital Raising
As part of the Firm Capital Raising, all of the Directors have
subscribed (either personally or through a nominee) for an
aggregate of 2,398,077 Firm Shares at the Issue Price. Details of
the Firm Shares for which the Directors have subscribed (either
personally or through a nominee) are set out below:
Name Title Number Number Value of Resulting
of existing of Firm Firm Shares shareholding
Ordinary Shares to be subscribed following
Shares# subscribed for# subscription
for#
Lykele
van der
Broek Chairman 929,500 692,308 GBP45,000.02 1,621,808
---------- ------------- ------------ ------------------ --------------
Sean Smith CEO 731,039 461,538 GBP29,999.97 1,192,577
---------- ------------- ------------ ------------------ --------------
Alex Abrey CFO 1,620,346 153,846 GBP9,999.99 1,774,192
---------- ------------- ------------ ------------------ --------------
Robin Cridland NED 130,167 615,385 GBP40,000.03 745,552
---------- ------------- ------------ ------------------ --------------
Richard
Horsman NED 0 475,000 GBP30,875.00 475,000
---------- ------------- ------------ ------------------ --------------
# The number of Ordinary Shares presented in this table as being
held or subscribed for by Directors refers to the number of
Ordinary Shares held or subscribed for by them either personally or
through a nominee.
The participation by the Directors referred to above in the Firm
Capital Raising is classified as a related party transaction for
the purposes of the AIM Rules. As all of the Directors are
participating in the Firm Capital Raising, Cenkos Securities
confirms that it considers that the terms of the transaction are
fair and reasonable insofar as the Company's Shareholders are
concerned.
7. Details of the Placings
The Company has raised approximately GBP1.1 million before
expenses by the issue of the Firm Placing Shares at the Issue Price
to certain Shareholders and new investors. The Firm Placing Shares
will, when issued, rank pari passu with the Existing Ordinary
Shares.
Institutional and other investors have conditionally agreed to
subscribe for the Firm Placing Shares at the Issue Price. The Firm
Placing has not been underwritten. The issue of the Firm Placing
Shares is conditional, inter alia, upon First Admission becoming
effective on the First Admission Date (or such later date as the
Company and Cenkos Securities may agree, being not later than the
First Admission Long Stop Date).
The Placing of the Conditional Placing Shares is conditional,
inter alia, on (i) the approval of the Resolutions at the General
Meeting, (ii) the Advanced Assurance being obtained from HMRC,
(iii) the Capital Reduction becoming effective and (iv) Second
Admission. It is expected that Second Admission will occur on the
third Business Day from the Conditional Placing becoming
unconditional in all respects (save for Second Admission), and in
any event not later than the Second Admission Long Stop Date. The
Conditional Placing has not been underwritten.
In the event that the Conditions have not been fulfilled prior
to the Second Admission Long Stop Date (or at such time as HMRC has
informed the Company the Advanced Assurance will not be obtained),
then the Conditional Placing will not complete and the funds from
the Conditional Capital Raising will not be received.
It should be noted that First Admission is not conditional upon
Second Admission. However, Second Admission is conditional on First
Admission.
The Directors believe that, following the Capital Reduction, the
Conditional Placing Shares to be issued pursuant to the Conditional
Placing will meet the requirements of section 173 ITA for the
purposes of the EIS and the Company will be a Qualifying Holding
and the Conditional Placing Shares will be eligible shares for the
purposes of investment by VCTs.
Under the terms of the Placing Agreement, Cenkos Securities has
agreed to use its reasonable endeavours to procure subscribers for
the Placing Shares at the Issue Price. The Placing Agreement
contains certain warranties and indemnities from the Company in
favour of Cenkos Securities.
Under the Placing Agreement, the Company has agreed to pay to
Cenkos Securities a fixed sum and commissions based on the
aggregate value of the Fundraising, and the costs and expenses
incurred by it in relation to the Fundraising.
The Placing Agreement contains customary warranties given by the
Company in favour of Cenkos Securities in relation to, amongst
other things, the accuracy of the information in this Document and
other matters relating to the Group and its business. In addition,
the Company has agreed to indemnify Cenkos Securities (and their
respective affiliates) in relation to certain liabilities which
they may incur in respect of the Fundraising.
Cenkos Securities has the right to terminate the Placing
Agreement in certain circumstances prior to First Admissions and in
respect only of the Conditional Capital Raising (but not the Firm
Capital Raising or the Retail Offer) prior to Second Admission, in
particular, in the event of breach of the warranties, the
occurrence of a material adverse change in circumstances material
to the Fundraising, or if the Placing Agreement does not become
unconditional.
8. Details of the Firm Subscription
In addition, Eden has entered into a conditional Subscription
Agreement with Sipcam, one of its commercial partners, pursuant to
which Sipcam will subscribe for 1,670,308 Firm Subscription Shares
conditional on First Admission.
Please see paragraph 6 above for details of the Directors'
participation in the Firm Capital Raising.
The Issue Price of 6.5 pence per share equates to a discount of
13.3 per cent. to the closing price of 7.5 pence on 27 July 2023,
the latest Business Day prior to the announcement of the
Fundraising.
9. The Retail Offer
The Company values its Shareholder base and believes that it is
appropriate to provide eligible retail Shareholders in the United
Kingdom the opportunity to participate in the Retail Offer. The
Retail Offer will allow retail Shareholders to participate in the
Fundraising by subscribing for Retail Shares at the Issue
Price.
Eligible retail Shareholders can contact their intermediary
(normally a broker, investment platform or wealth manager) to
participate in the Retail Offer. In order to participate in the
Retail Offer, each intermediary must be on-boarded onto the
BookBuild Platform, have an active trading account with Cenkos
Securities (who is acting as the Retail Offer Coordinator) and have
been approved by the Retail Offer Coordinator as an intermediary in
respect the Retail Offer, and agree to the final terms and the
Retail Offer terms and conditions, which regulate the conduct of
the Retail Offer on market standard terms and provide for the
payment of commission to any intermediary that elects to receive a
commission and/or fee (to the extent permitted by the FCA Handbook
Rules) from the Retail Offer Coordinator (on behalf of the
Company).
Any expenses incurred by any intermediary are for its own
account. Eligible retail Shareholders who wish to participate in
the Retail Offer should confirm separately with any intermediary
whether there are any commissions, fees or expenses that will be
applied by such intermediary in connection with any application
made through that intermediary pursuant to the Retail Offer.
The Retail Offer will be open to eligible retail Shareholders in
the United Kingdom at 5.00 p.m. on 28 July 2023 on the following
website:
https://www.bookbuild.live/deals/VZ7ZE7/authorised-intermediaries.
The Retail Offer is expected to close by no later than 10.00 a.m.
on 2 August 2023. Eligible retail Shareholders should note that
financial intermediaries may have earlier closing times. The Retail
Offer may close early if it is oversubscribed.
To be eligible to participate in the Retail Offer, applicants
must meet the following criteria before they can submit an order
for Retail Shares: (i) be a customer of one of the participating
intermediaries listed on the above website; (ii) be resident in the
United Kingdom; and (iii) be a shareholder in the Company (which
may include individuals aged 18 years or over, companies and other
bodies corporate, partnerships, trusts, associations and other
unincorporated organisations and includes persons who hold their
Ordinary Shares directly or indirectly through a participating
intermediary).
The Company reserves the right to scale back any order at its
discretion. The Company reserves the right to reject any
application under the Retail Offer without giving any reason for
such rejection.
It is vital to note that once an application for Retail Offer
Shares has been made and accepted via an intermediary, it cannot be
withdrawn.
The Retail Offer is an offer to subscribe for transferable
securities, the terms of which ensure that the Company is exempt
from the requirement to issue a prospectus under Regulation (EU)
2017/1129 as it forms part of UK law by virtue of the European
Union (Withdrawal) Act 2018. The aggregate total consideration for
the Retail Offer will not exceed GBP500,000 and therefore the
exemption from the requirement to publish a prospectus, set out in
section 86(1) FSMA, will apply.
The Retail Shares are not being offered generally in the UK or
elsewhere. It is expected that the proceeds of the Retail Offer due
to the Company will be received by it soon after Admission.
The Retail Announcement was made on 28 July 2023 and contains
further information on how investors can participate in the Retail
Offer.
The Retail Offer remains conditional on, inter alia:
-- the Firm Placing being or becoming wholly unconditional;
-- Admission of the New Ordinary Shares becoming effective by no
later than 8.00 a.m. on 3 August 2023 or such later time and/or
date as Cenkos Securities and the Company may agree.
The Retail Shares will be issued free of all liens, charges and
encumbrances and will, when issued and fully paid, rank pari passu
in all respects with the Existing Ordinary Shares, including the
right to receive all dividends and other distributions declared,
made or paid after the date of their issue.
Application will be made to the London Stock Exchange for
Admission of the Retail Shares to trading on AIM. It is expected
that Admission will occur and that dealings will commence at 8.00
a.m. on 3 August 2023, at which time it is also expected that the
Retail Shares will be enabled for settlement in CREST.
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
Financial Services and Markets Act 2000 (as amended) if you are
resident in the United Kingdom or, if not, from another
appropriately authorised independent financial adviser.
10. The Capital Reduction
Under the Act, with the sanction of a resolution of the
Shareholders and the confirmation of the Court, the Company may
reduce or cancel its share premium account.
In seeking this approval, the Court will need to be satisfied
that the interests of the Company's creditors will not be
prejudiced as a result of the Capital Reduction. The Court may
require the Company to put in place protection for the benefit of
the Company's creditors at the date of the Court application. The
Board anticipates that the Company will provide such protection as
so required.
The Board reserves the right to abandon or to discontinue (in
whole or in part) any application to the Court in the event that
the Board considers that the terms on which the Capital Reduction
would be (or would be likely to be) confirmed by the Court would
not be in the best interests of the Company and/or the Shareholders
as a whole. The Directors will, prior to the making of any
application to the Court for the approval of the Capital Reduction,
undertake a careful review of the Company's liabilities (including
contingent liabilities) and consider the Company's ability to
satisfy the Court that, as at the date (if any) on which the Court
Order relating to the Capital Reduction and the statement of
capital in respect of the Capital Reduction have both been
registered by the Registrar of Companies at Companies House and the
Capital Reduction therefore becomes effective, the Company's
creditors will be sufficiently protected.
11. General Meeting
The Directors do not currently have authority to allot the
Conditional Shares and, accordingly, the Board is seeking the
approval of Shareholders to allot the Conditional Shares at the
General Meeting.
A notice convening the General Meeting, which is to be held at
the offices of Milton Park Innovation Centre, 99 Park Drive, Milton
Park, Oxfordshire, OX14 4RY at 9:00 a.m. on 17 August 2023, is set
out at the end of the Circular. At the General Meeting, the
following Resolutions will be proposed:
-- Resolution 1, which is an ordinary resolution, to authorise
the Directors to allot relevant securities for cash up to an
aggregate nominal amount of GBP1,446,153.85, being equal to
144,615,385 Conditional Shares;
-- Resolution 2, which is conditional on the passing of
Resolution 1 and is a special resolution, to authorise the
Directors to allot 144,615,385 Conditional Shares on a
non-pre-emptive basis; and
-- Resolution 3, which is conditional on the passing of
Resolution 1 and Resolution 2 and is a special resolution, to
authorise the directors, subject to approval from the Court, to
cancel the share premium account of the Company.
The authorities to be granted pursuant to Resolutions 1 and
Resolution 2 will expire on whichever is the earlier of (a) the
conclusion of the next Annual General Meeting of the Company; and
(b) the date falling six months from the date of the passing of the
Resolutions (unless renewed, varied or revoked by the Company prior
to or on that date) and shall be in addition to the Directors'
authorities to allot relevant securities and dis-apply statutory
pre-emption rights granted at the Company's Annual General Meeting
held on 29 June 2023.
For the purposes of section 571(6)(c) of the Act, the Directors
determined the Issue Price after consideration of applicable market
and other considerations and having taken appropriate professional
advice.
Shareholders will find instructions within the Circular on how
to complete a Form of Proxy for use in connection with the General
Meeting. The Form of Proxy should be completed and returned in
accordance with the instructions thereon so as to be received by
Link Group, PXS 1, Central Square, 29 Wellington Street, Leeds, LS1
4DL, as soon as possible and in any event not later than 48 hours (
excluding any part of a day that is not a working day ) before the
time of the General Meeting. Completion and return of the Form of
Proxy will not prevent a Shareholder from attending and voting at
the General Meeting.
12. Recommendation
The Directors believe the Capital Reduction, the Fundraising and
the passing of the Resolutions to be in the best interests of the
Company and its Shareholders as a whole. Accordingly, the Directors
unanimously recommend Shareholders to vote in favour of the
Resolutions as they intend so to do in respect of their beneficial
shareholdings amounting to 3,411,052 Ordinary Shares, representing
approximately 0.9 per cent. of the existing issued ordinary share
capital of the Company.
PLACINGS AND SUBSCRIPTIONS STATISTICS
Issue Price (per share) 6.5 pence
Number of Existing Ordinary Shares 381,108,607
Total number of Firm Placing Shares and Firm Subscription
Shares
16,923,077
Gross proceeds of the Firm Capital Raising GBP1.1 million
Minimum number of Conditional Shares 121,538,462
Maximum number of Conditional Shares 161,538,462
Minimum gross proceeds of the Conditional Capital Raising GBP7.9
million
Maximum number of Firm Shares and Conditional Shares as a
percentage of the Enlarged Share Capital* 31.5%
Maximum gross proceeds of the Capital Raising up to GBP10.5
million
RETAIL OFFER STATISTICS
Issue Price (per share) 6.5 pence
Number of Retail Offer Shares up to 7,692,308
Gross proceeds of the Retail Offer* up to
GBP0.5 million
Enlarged Share Capital following the Fundraising* up to
567,262,454
Retail Offer Shares as a percentage of the Enlarged Share
Capital*
up to 1.4%
* on the assumption that the maximum number of New Ordinary
Shares are issued pursuant to the Capital Raising and that the
Retail Offer is fully subscribed
7
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2023
Announcement of the Placings 28 July
Announcement of the Retail Offer 28 July
Announcement of the results of the Retail 2 August
Offer
First Admission effective and dealings in 8.00 a.m. on 3 August
the First Placing Shares and Retail Offer
Shares expected to commence on AIM
CREST accounts credited in respect of the 8.00 a.m. on 3 August
First Placing Shares and Retail Offer Shares
to be held in uncertificated form (subject
to First Admission)
Where applicable, expected date for dispatch within 10 Business
of definitive share certificates First Placing Days following First
Shares and Retail Offer Shares to be held Admission
in certificated form
Latest time and date for receipt of completed 9 a.m. on 15 August
Forms of Proxy and receipt of electronic
proxy appointments via the CREST system
General Meeting 9 a.m. on 17 August
Announcement of result of General Meeting 17 August
Expected date for final hearing and confirmation 12 September
of the Capital Reduction by the Court
Expected date that the Capital Reduction 14 September
become effective
Second Admission Long Stop Date 8.00 a.m. on 20 October
Notes:
(i) References to times in this annoucement are to London time (unless otherwise stated).
(ii) If any of the details contained in the timetable above
should change, the revised times and dates will be notified by
means of an announcement through a Regulatory Information
Service.
DEFINITIONS
The following definitions apply throughout the announcement and
Circular unless the context otherwise requires:
Act the Companies Act 2006 (as amended)
Admissions together the First Admission and the Second Admission
and "Admission" shall mean either of them as the context may
require
Advanced Assurance the assurance from HMRC issued under the
Income Tax Act 2007 in a form and on terms satisfactory to Cenkos
that, for investors who themselves meet the conditions, an
investment by them in the Conditional Placing Shares would qualify
for relief from taxation under the enterprise investment scheme
regime
AIM the market of that name operated by the London Stock
Exchange
AIM Rules the AIM Rules for Companies published by the London
Stock Exchange from time to time
Bookbuild Platform a technology platform providing issuers and
their advisers access to primary capital markets deals and is owned
BB Technology Ltd, a private limited company incorporated in
England and Wales with registered number 13508012.
Business Day a day (other than a Saturday or Sunday) on which
commercial banks are open for general business in London,
England
Capital Raising the Firm Capital Raising and the Conditional
Capital Raising
Capital Reduction means the reduction of the Company's share
capital by means of the reduction of some of its share premium as
more particularly described in this circular
Cenkos or Cenkos Securities Cenkos Securities plc
certificated form or in an Ordinary Share recorded on a
company's share register as being
certificated form held in certificated form (namely, not in CREST)
Company or Eden Eden Research plc, a company incorporated and
registered in England and Wales under the Companies Act 2006 with
registered number 03071324
Conditional Capital Raising the Conditional Placing together
with any additional Conditional Shares issued pursuant to
subscriptions
Conditional Placing the conditional placing of the Conditional
Placing Shares pursuant to the Placing Agreement and conditional
on, amongst other things, satisfaction of the Conditions
Conditional Placing Shares the minimum 121,538,462 new Ordinary
Shares to be allotted and issued by the Company pursuant to the
Conditional Placing
Conditional Shares up to 144,615,385 New Ordinary Shares issued
pursuant to the Conditional Capital Raising
Conditions the conditions set out in the Placing Agreement for
allotment and issue of the Conditional Shares being, inter alia,
receipt of Advanced Assurance and the Capital Reduction becoming
effective
CREST the relevant system (as defined in the CREST Regulations)
in respect of which Euroclear is the operator (as defined in those
regulations)
CREST Manual the rules governing the operation of CREST,
consisting of the CREST Reference Manual, CREST International
Manual, CREST Central Counterparty Service Manual, CREST Rules,
Registrars Service Standards, Settlement Discipline Rules, CREST
Courier and Sorting Services Manual, Daily Timetable, CREST
Application Procedures and CREST Glossary of Terms (all as defined
in the CREST Glossary of Terms promulgated by Euroclear on 15 July
1996 and as amended since) as published by Euroclear
CREST member a person who has been admitted to CREST as a
system-member (as defined in the CREST Manual)
CREST participant a person who is, in relation to CREST, a
system-participant (as defined in the CREST regulations)
CREST Regulations the Uncertificated Securities Regulations 2001
(SI 2001/3755) (as amended)
CREST sponsor a CREST participant admitted to CREST as a CREST
sponsor
CREST sponsored member a CREST member admitted to CREST as a sponsored member
Dealing Day a day on which the London Stock Exchange is open for
business in London
Directors or Board the directors of the Company whose names are
set in the Circular, or any duly authorised committee thereof
Document the Circular document which, for the avoidance of
doubt, does not comprise a prospectus (under the Prospectus
Regulation) or an admission document (under the AIM Rules)
EIS Enterprise Investment Scheme (as defined in Part 5 ITA
2007)
Enlarged Share Capital the entire issued share capital of the
Company following completion of the Fundraising on Second
Admission
EU the European Union
Euroclear Euroclear UK & International Limited, the operator
of CREST
EUWA the European Union (Withdrawal) Act 2018 as amended and
supplemented from time to time (including, but not limited to, by
the EU (Withdrawal) Act 2020)
Existing Ordinary Shares the 381,108,607 Ordinary Shares in
issue at the date of this announcement, all of which are admitted
to trading on AIM
FCA the UK Financial Conduct Authority
First Admission admission of the Firm Shares and the Retail
Offer Shares to trading on AIM becoming effective in accordance
with the AIM Rules
First Admission Date 3 August 2023, or such later date as the
Company and Cenkos may agree in writing, being in any event, not
later than 8.00 a.m. on the First Admission Long Stop Date
First Admission Long Stop Date 31 August 2023
Firm Capital Raising the Firm Placing and Firm Subscription
Firm Placing the placing of the Firm Placing Shares pursuant to
the Placing Agreement
Firm Placing Shares the 13,945,076 new Ordinary Shares to be
allotted and issued by the Company pursuant to the Firm Placing
Firm Shares the Firm Placing Shares and the Firm Subscription
Shares
Firm Subscription the subscription of the Firm Subscription
Shares by Sipcam and certain directors
Firm Subscription Shares the 1,670,308 Ordinary Shares to be
allotted and issued to Sipcam on the terms of the Sipcam
Subscription Agreement pursuant to the Firm Subscription and
1,307,693 Ordinary Shares to be allotted and issued to certain
Directors under subscription agreements
Form of Proxy the form of proxy for use in connection with the
General Meeting which accompanies the Document
FSMA the Financial Services and Markets Act 2000 (as
amended)
Fundraising the Placings, Firm Subscription and the Retail
Offer
General Meeting the general meeting of the Company to be held at
the offices of Milton Park Innovation Centre, 99 Park Drive, Milton
Park, Oxfordshire, OX14 4RY at 9 a.m. on 17 August 2023 (or any
adjournment of that general meeting)
Group the Company and its subsidiaries
HMRC His Majesty's Revenue and Customs (which shall include its
predecessors, the Inland Revenue and HM Customs and Excise)
Intermediaries broker or wealth manager to an eligible retail
Shareholder in the Retail Offer and "Intermediary" shall mean any
one of them
ISIN International Securities Identification Number
Issue Price 6.5 pence per Placing Share, per Subscription Share
and per Retail Offer Share
ITA UK Income Tax Act 2007
Link Group or Link a trading name of Link Market Services Limited
London Stock Exchange London Stock Exchange plc
MAR the UK version of the Market Abuse Regulation ((EU) No
596/2014) which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018, as amended and supplemented from time to
time
Money Laundering Regulations The Money Laundering, Terrorist
Financing and Transfer of Funds (Information on the Payer)
Regulations 2017, the Criminal Justice Act 1993 and the Proceeds of
Crime Act 2002
New Ordinary Shares together, the Ordinary Shares to be issued
pursuant to the Fundraising
Notice of General Meeting the notice convening the General
Meeting which is set out at the end of the Circular subject to the
conditions set out in Part III of the Circular and, where relevant,
in the Application Form
Ordinary Shares ordinary shares of GBP0.01 each in the capital
of the Company
Placee the subscribers for the Placing Shares pursuant to the
Placings
Placing Announcement the Regulatory Information Service
announcement of the Company announcing the Fundraising
Placings the Firm Placing and the Conditional Placing
Placing Agreement the agreement entered into between the Company
and Cenkos in respect of the Placings and
Retail Offer dated 28 July 2023, as described
in this Document
Placing Shares the Firm Placing Shares and the Conditional
Placing Shares
Prospectus Regulation the UK version of commission delegated
regulation (EU) 2017/1129 of the European Parliament and of the
Council, which is part of UK law by virtue of EUWA
Qualifying Holding means a qualifying holding for the purposes
of Chapter 4 of Part 6 of ITA Restricted Jurisdiction)
Regulatory Information Service has the meaning given in the AIM Rules
Resolutions the resolutions set out in the Notice of General
Meeting
Restricted Jurisdiction each and any of Australia, Canada,
Japan, New Zealand, the Republic of South Africa or the United
States and any other jurisdiction where the Offer would breach any
applicable law or regulations
Retail Offer means the retail offer to be made by the Company on
the day of the Placing Announcement via the Bookbuild Platform to
retail investors situated in the United Kingdom to subscribe for
Retail Offer Shares at the Issue Price
Retail Offer Shares up to 7,692,308 new Ordinary Shares being
made available pursuant to the Retail Offer
Second Admission admission of the Conditional Shares to trading
on AIM becoming effective in accordance with the AIM Rules
Second Admission Date The to be determined date post the Capital
Reduction, or such later date as the Company and Cenkos may agree
in writing, being in any event, not later than 8.00 a.m. on the
Second Admission Long Stop Date
Second Admission Long Stop Date 20 October 2023
Shareholders holders of Ordinary Shares
Sipcam Sipcam Oxon S.p.A.
Sipcam Subscription Agreement the subscription agreement entered
into by the Company and Sipcam on or around the date of this
announcement and as referred to in the Placing Announcement
UK or United Kingdom the United Kingdom of Great Britain and Northern Ireland
Uncertificated or Uncertificated recorded on the relevant
register or other record of the shares or
form other security concerned as being held in uncertificated
form in CREST, and title to which, by virtue of the CREST
Regulations, may be transferred by means of CREST
US Person has the meaning given in the United States Securities
Act 1933 (as amended)
VCT Venture Capital Trust (as defined in Part 6 ITA 2007)
voting rights means all voting rights attributable to the share
capital of the Company which are currently exercisable at a general
meeting
GBP and p United Kingdom pounds sterling and pence respectively,
the lawful currency of the United Kingdom
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END
IOEUWVVROSUBUAR
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