TIDMODX

RNS Number : 3664B

Omega Diagnostics Group PLC

11 February 2022

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

OMEGA DIAGNOSTICS GROUP PLC

("Omega" or the "Company" or the "Group")

Fundraising to raise gross proceeds of up to GBP7.0 million

Funds to drive growth in profitable Health & Nutrition business,

and to provide the necessary finance to relocate CD4 production to new Ely site

Notice of General Meeting

Omega (AIM: ODX), the specialist medical diagnostics company focused on industry-leading Health & Nutrition and Global Health (CD4 and COVID-19) products, announces that it has raised gross proceeds of GBP5.0 million via a Placing and Subscription of 100,000,000 new ordinary shares of 4 pence each ("New Ordinary Shares") to new institutional investors and a number of wealth managers at an issue price of 5 pence per New Ordinary Share (the "Issue Price").

Furthermore, the Company also proposes to raise up to an additional GBP2.0 million by the issue of up to 40,596,089 New Ordinary Shares pursuant to an Open Offer to Qualifying Shareholders at the Issue Price ("Open Offer", together with the Placing and Subscription, the "Fundraising"). The Issue Price represents a discount of approximately 31 per cent to the closing mid-market price of 7.25 pence on 10 February 2022, being the latest practicable date prior to this announcement.

The net proceeds of the Fundraising, amounting to between GBP4.6 million and GBP6.6 million, depending on the take up of the Open Offer, will be used to drive growth in the profitable and growing Health and Nutrition Business, whilst also providing the necessary finance to relocate CD4 production to the Company's new, purpose-built manufacturing facility in Ely, Cambridgeshire, as well as supporting a transition to a sub-contract model for COVID-19 test manufacture.

Summary:

-- Placing of 98,700,000 New Ordinary Shares ("Placing Shares"), at the Issue Price to raise gross proceeds of approximately GBP5.0 million.

-- The Placing Shares have been conditionally placed by finnCap Ltd with new institutional and other investors (the "Placees").

-- Direct Subscription of 1,300,000 New Ordinary Shares at the Issue Price to raise gross proceeds of GBP65,000 ("Subscription Shares").

-- Open Offer of up to 40,596,089 New Ordinary Shares ("Open Offer Shares") for Qualifying Shareholders on the basis of 2 New Ordinary Shares for every 9 Existing Ordinary Shares held (with excess application facility) to raise up to GBP2.0 million.

-- The New Ordinary Shares issued under the Fundraising will represent approximately 77 per cent of the Company's existing issued share capital (assuming full take-up of the Open Offer).

-- Subject to passing of the Resolutions and the General Meeting, and the Business Purchase Agreement relating to the sale of the Alva site to Orient Gene having become unconditional in all respects, application will be made to the London Stock Exchange for the Placing Shares, Subscription Shares and Open Offer Shares to be admitted to trading on AIM on 8 March 2022.

   --          Further details of the Placing, Subscription and Open Offer are set out below. 

A Circular to Shareholders in respect of the Fundraising is expected to be posted on 11 February 2022 giving notice of the General Meeting to be held on 7 March 2022 at 11 a.m. at the offices of Shepherd & Wedderburn, 1 Exchange Crescent, Conference Square, Edinburgh, EH3 8UL. A copy of the Circular will be available on the Company's website:

http://www.omegadiagnostics.com/Investor-Relations/Corporate-Information

Jag Grewal, CEO of Omega, commented:

"Having already announced the first stage of our planned strategy to improve sales performance across the Group and to reduce losses, the transfer of our Alva site to Orient Gene and this fundraise delivers the additional capital for Omega to drive growth in our Health & Nutrition division. At the conclusion of our planned strategic review of CD4, the funding provides us with the potential opportunity to relocate our CD4 production to our new Ely site and improve operational efficiencies.

"I would like to put on record my thanks to new and existing shareholders for their support and we look forward to updating the market with regards our new strategy in the months ahead."

Contacts:

 
 Omega Diagnostics Group PLC                                                           www.omegadx.com 
 Jag Grewal, Chief Executive Officer                                                   via Walbrook PR 
 Chris Lea, Chief Financial Officer 
 
 finnCap Ltd                                                                        Tel: 020 7220 0500 
 Geoff Nash/Edward Whiley/George Dollemore (Corporate 
  Finance) 
 Alice Lane/ Charlotte Sutcliffe 
  (ECM) 
 
 Walbrook PR Limited                                        Tel: 020 7933 8780 or omega@walbrookpr.com 
 Paul McManus                                                                       Mob: 07980 541 893 
 Lianne Applegarth                                                                  Mob: 07584 391 303 
 Sam Allen                                                                          Mob: 07502 558 258 
 
 

About Omega Diagnostics Group PLC

Omega manufactures and distributes high quality in-vitro diagnostic products for use in hospitals, clinics, laboratories and healthcare practitioners in over 75 countries and specialise in the areas of health and nutrition and global health.

www.omegadx.com

Placing of 98,700,000 New Ordinary Shares,

Subscription of 1,300,000 New Ordinary Shares

and Open Offer of up to 40,596,089 New Ordinary Shares at 5 pence per share

and

Notice of General Meeting

   1.    Introduction 

The Company announced today the Placing of 98,700,000 new Ordinary Shares and Subscription of 1,300,000 new Ordinary Shares at 5 pence per share to raise GBP5.0 million (before expenses) and an associated Open Offer to raise up to GBP2.0 million. The net proceeds of the Fundraising, amounting to between GBP4.6 million and GBP6.6 million, depending on the take up of the Open Offer, will be used to drive growth in the profitable and growing Health and Nutrition Business, whilst also providing the necessary finance to relocate CD4 production to the Company's new, purpose-built manufacturing facility in Ely Cambridgeshire. In addition, the proceeds of the Fundraise will support a transition to a sub-contract model for COVID-19 antigen test manufacture, whilst additional funds are being utilised to strengthen the Company's balance sheet and for general working capital purposes.

The Placing, the Subscription and the Open Offer are conditional on, inter alia, the passing of the Resolutions at the General Meeting, the Business Purchase Agreement relating to the sale of the Alva site to Orient Gene having become unconditional in all respects and Admission taking place. It is expected that, subject to passing the Resolutions, the Placing Shares, the Subscription Shares and the Open Offer Shares will be admitted to trading on AIM on 8 March 2022.

The Issue Price represents a discount of approximately 31 per cent to the closing mid-market price of 7.25 pence on 10 February 2022, being the last practicable date prior to the announcement of the Fundraise. The purpose of this announcement is to explain the background to and reasons for the Fundraising, to explain why the Board considers the Fundraising to be in the best interests of the Company and its Shareholders, and why the Directors unanimously recommend that you vote in favour of the Resolutions to be proposed at the General Meeting, as they intend to do in respect of the 760,746 Ordinary Shares held, directly or indirectly, by them representing approximately 0.42 per cent. of the total voting rights of the Company.

   2.    Background to and Reasons for the Fundraising 

As detailed in the interim results on 25 November 2021, the performance in the six months to 30 September 2021 reflects early signs of positive momentum for the Health and Nutrition and CD4 businesses that the Company believe are now well-positioned for growth. After a strong Q4 last year the Company is seeing its Health and Nutrition Division return to pre-pandemic revenue levels and remains focused on substantial growth opportunities in both China and the US. The Company is also very optimistic about the prospects for its Global Health Division, which has delivered a strengthening CD4 order book and good revenue growth, albeit from a low base last year.

As announced on 10 December 2021, the Department of Health and Social Care ("DHSC") did not progress with the contract to manufacture COVID-19 antigen lateral flow tests ("LFTs"). The DHSC failed to licence a suitable test from a test developer, as was envisaged in the contract, and the Company was therefore unable to move into Phase 2 of the contract, which would have seen Omega manufacture LFTs using Government-funded equipment.

The Company has also recently announced, a management change with the appointment of Jag Grewal to the position of Chief Executive Officer. Jag has been a member of the Omega Board since joining the Company in June 2011 and until recently, was Managing Director of the Health and Nutrition Division. He has over 25 years' commercial experience in the industry and has an extensive network in the fields of in vitro diagnostics, life science research and drug discovery. The appointment of Jag as CEO, coupled with Simon Douglas' appointment as Chairman one year ago and the appointment of Chris Lea as CFO in August, has allowed the Board to review the Company's strategy, particularly in the light of the developments with the DHSC. This has been instrumental in shaping the decision to refocus Omega on its core businesses, accepting that any commercial opportunities for COVID-19 testing will now lie outside of UK Government.

Earlier today, the Company announced the sale of its manufacturing facility in Alva, Scotland to Accubio Limited, a wholly owned subsidiary of Zhejiang Orient Gene Biotech Co. Ltd ("Orient Gene") for a cash consideration of GBP1m. Having significantly expanded the Alva site to accommodate anticipated COVID-19 volumes and with a small, but growing volume of CD4 production, the Alva cost base, relative to the revenues it generates, became unsustainable. The Company reported in November that there was a need to re-size its LFT business, to improve operational efficiency and to substantially reduce costs. The Board has concluded the best option is to withdraw from the Alva site, which substantially reduces the fixed cost base of the Company.

As part of this strategy, it is planned to relocate the CD4 manufacturing line to the Company's soon-to-be completed, purpose-built manufacturing facility in Ely. This will allow the overheads of this new site to be shared across both of the Company's Health and Nutrition and Global Health businesses. In view of the costs and management resource involved in the transfer of the CD4 production line, which will take place over an approximate period of nine months, the Board intends to review other strategic options for this product line prior to committing to the expenditure associated with the transfer.

Without the DHSC contract for COVID-19 antigen LFTs, the Company intends to pursue opportunities in the commercial testing market, focusing on the travel and retail markets, alongside its existing commercial partner, DAM Health Limited and other potential partners. The Company does not intend to purchase the Government-funded equipment for its own use, and is currently facilitating discussion with partners who may be willing to purchase the equipment. It is the Company's strategy to outsource the manufacturing of its antigen tests to third parties, where the Company believes lower manufacturing costs can be achieved and a more acceptable return can be generated by the Company without further investment in working capital.

The Board will therefore focus Omega's efforts on its core business, primarily in pursuing sustainable growth opportunities in the Health and Nutrition sector, maintaining its leadership position and targeting significant organic growth through embracing digital technologies and related marketing activities. The Company's growth strategy in this segment will also focus on geographic expansion in the USA, a health-conscious and mature personal health and well-being market, as well as expansion of the Company's current menu of tests available to customers, with the introduction of complementary tests, allowing customers to more comprehensively manage their patients and thus enabling the Company's vision of delivering personalised nutrition for better health.

US Growth Opportunity

The US Food Sensitivity testing market is estimated to be the largest and most established market in the world. It is the leading market for functional medicine laboratory testing with an increasing demand for personalised medicine.

The Board believes the best route to market would be to replicate the Company's CNS Laboratory service direct to health care professionals and ultimately direct to consumer. Omega differentiates itself from established players by taking the Group's tried and tested market leading approach with education and support, coupled with its digital strategy, to engage and empower customers.

The total US market size is estimated by the Directors to be $50-$100m and the Board believes that US revenues could potentially be between GBP3 million and GBP6 million over the next 3-5 years.

Product Menu Expansion

Microbiome

The Group's intention is to build a wider menu of complementary gut health tests and to sell these through its well-established channels from a market leading position.

Understanding the microbiome is the new frontier of understanding chronic inflammatory conditions arising from poor gut health. Over recent years the gut microbiome in particular has been linked to a plethora of diseases and conditions, from diabetes and anxiety to obesity. The Group has also noticed a growing demand from its existing customer base in this segment.

Nutrigenomics

Defined as the relationship between nutrients, diet, and gene expression, Nutrigenomics allows the healthcare professional to understand genetic strengths and weaknesses making specific improvements that help achieve better health.

Combining all three provide a compelling value proposition that will offer true personalised nutritional assessment. The Board believes that menu expansion has the potential to generate material revenue growth over the medium term. The Directors believe that menu expansion from microbiome and nutrigenomics combined has the potential to increase revenues by GBP2 million to GBP5 million p.a. over the next five years.

Operational efficiency

The Group is well underway with its planned relocation to the new facility in Ely, Cambridgeshire, with access to the new site expected in late Q1 2022. The new facility is a 35,000 ft(2) state-of-the-art manufacturing space and will accommodate the Group's future expansion plans. In addition, the new site will be temperature and humidity controlled to facilitate key manufacturing processes and will be compliant to ISO 13485 and ISO 9001.

The Company intends to use the net proceeds of the Fundraising as follows:

 
 Estimate Use of Proceeds                   GBPm 
 Exit Alva manufacturing site                0.4 
                                            ---------------- 
 Relocate CD4 production to Ely              1.5 
                                            ---------------- 
 Establish Health & Nutrition US business    1.1 
                                            ---------------- 
 Broaden Health & Nutrition product range    0.4 
                                            ---------------- 
 Working Capital/costs                       3.2 
                                            ---------------- 
 Total                                       GBP6.6 million* 
                                            ---------------- 
 

*Assuming take-up in full of the Open Offer by Qualifying Shareholders. To the extent that less is taken up in the Open Offer, the working capital element will be reduced

   3.    Group Segments 
   3.1.    Health and Nutrition 

The Group offers products to test for food intolerance, a condition when there is a non-immediate adverse physiological response to particular foods as distinct to an allergic reaction to food. The Food Detective(R) product is designed for use by health practitioners and is believed to be the world's only established Point-of-Care food specific IgG test. FoodPrint(R) is a microarray technology used by over 140 laboratories worldwide offering significant benefits over traditional plate-based ELISA tests. The Group also provides a laboratory testing service from its UK base near Cambridge serving health care professionals and the consumer directly. The division's products have a widespread coverage and brand reach in over 70 countries.

In the six months to 30 September 2021, Health and Nutrition revenue increased by 62% to GBP4.17m compared to H1 2020 and this division has largely recovered from the impact of the coronavirus pandemic. Growth during the period was driven by sales in North America, Europe and the Middle East. Omega's team have worked incredibly hard to educate consumers and drive awareness of nutritional therapy through its Health and Nutrition Academy webinars. These webinars have also focused on naturopathic therapies, functional medicine and sports nutrition and Omega remains confident that this will drive demand once markets fully open back up. Comparative sales from China in the first half of the year are skewed by a large stocking order placed the previous year with Omega's partner utilising that inventory in 2021 to seed the market. Sales ramp up in China is taking a little longer than expected due to local market conditions and the challenges that face any company looking to introduce a relatively new concept into the Chinese consumer market.

During the period, the Health and Nutrition team have begun marketing in a number of new and significant European territories, but the focus on future growth outside of China remains with the US and, as travel opens up with the US, Omega's team have more opportunities to engage with key partners in this market.

In readiness for a future growth in this division the Company expects to relocate this division to a new purpose-built facility in Ely in late Q1 2022, which will improve operational efficiencies and provide the additional capacity required to support this division's growth expectations.

3.2 Global Health

The Group's VISITECT(R) CD4 products are disposable, lateral flow Point-of-Care tests for determining CD4 levels in people living with HIV. Omega believes VISITECT(R) CD4 is the only instrument-free Point-of-Care established test in the market. Its strengths include the fact there is no requirement for refrigerated storage and that, relative to other CD4 tests that require an accompanying desktop instrument, it is affordable and easy to use.

CD4

The long-term prospects remain undiminished for the roll-out of the Company's VISITECT(R) CD4 Advanced Disease test, the first and the world's only instrument-free point of care test for monitoring CD4 levels, essential for the effective management of advanced HIV. Whilst Omega recorded only GBP167k of CD4 sales in the six months ended 30 September 2021 it is encouraged by the progress being made to implement CD4 testing in high HIV prevalence countries. At the end of October 2021 Omega had confirmed orders worth over GBP0.8m which are expected to be delivered in the second half, and the Company has an encouraging pipeline into the next financial year.

Key to the success of this roll-out is the Company's relationship with agencies such as the Clinton Health Access Initiative ("CHAI") and Unitaid, as they implement the WHO Advanced HIV Disease strategy in a number of low and middle-income countries. Following successful WHO prequalification last year, Omega is seeing a growing number of implementation partners engage through CHAI's Early Access Market Vehicle. Omega continues to receive strong feedback from external clinical studies and evaluations in key countries and can see positive indications that long term funders are supporting the roll out of the Advanced Disease initiative. The Company is now cleared to supply into 21 countries, up from the 15 country approvals announced in its year end results in July.

The Company is pleased to have received several purchase orders via the procurement and logistics partners of the US President's Emergency Plan for AIDS Relief ("PEPFAR"), the world's largest funding contributor to the global HIV response. The Company's VISITECT(R) CD4 Advanced Disease test has been included in the PEPFAR 2022 Country and Regional Operational Plan Guidance for all PEPFAR-supported countries. The Company's test has again been highlighted as a semi-quantitative lateral flow assay which is able to differentiate CD4 value above and below 200 cells/mm(3) and therefore should be used where existing instruments are not available or are available and without existing or planned service and maintenance and/or resource support, but not functional.

The Company continues to make progress with Médecins San Frontier ("MSF") which has a six-country deployment plan for the introduction of CD4 Advanced Disease in Africa, and it has commenced product deliveries and is currently supporting implementation with in-country training of MSF health workers.

The Company also continues to engage with a number of UN operation agencies to roll out its CD4 test and the ongoing momentum and progress made in implementation means that it remains confident in the market potential for its product. The addressable market is estimated to be in excess of $20m, with the potential for the Company to generate revenues of GBP6-GBP10m per annum in 3-5 years' time.

COVID-19

In the first half of the financial year, the Company recorded COVID-19 revenues of GBP1.29m, up 136% on the same period last year.

As reported in the Company's interim it did not receive confirmation from the DHSC regarding which test it required Omega to manufacture and dialogues with the third parties introduced to Omega by the DHSC did not result in a commercial agreement to manufacture tests to be procured by the UK Government.

Accordingly, the Company has increased its efforts in securing manufacturing and supply agreements for the commercial sale of COVID-19 LFTs, and the first fruits of these efforts has been the securing of its partnership agreement with DAM Health Limited ("DAM Health"), a leader in fit-to-fly testing and one of the UK's fastest growing and largest in-clinic and mobile test providers for COVID-19. The Company has already received an initial purchase order to supply VISITECT(R) professional use COVID-19 antigen tests worth over GBP750,000. As the Company's tests are rolled out to DAM Health's over 100 clinics throughout the UK and Europe, it expects to receive further stocking orders, particularly as DAM Health clinics currently undertake around 200,000 in-clinic COVID tests every month.

The Company remains encouraged by other emerging commercial opportunities for its VISITECT(R) COVID-19 Antigen test that is expected to be unlocked following further regulatory approvals.

In terms of regulatory approvals, the Company is still waiting for the UK Health Security Agency to clear the backlog of desktop reviews for products seeking approval under the new Medical Devices (Coronavirus Test Device Approvals) (Amendment) Regulations 2021 ("CTDA"). Omega remain in the review process under CTDA regulations, which were introduced on 1 November 2021. Omega has now submitted all available data ahead of the deadline of 10 February 2022 and is currently awaiting response from the UK Health Security Agency.

The Company recently confirmed conditional CE mark certification for self-test use for its COVID-19 Antigen test, which permits Omega to sell into Europe now, but remains conditional upon the subsequent submission of additional information by 31 March 2022, conditions which the Company expects to meet. The Company remains in discussions with commercial partners about how best to service the European market and other territories that recognise the CE mark. Omega's commercial offering will be via B2B partners and distributors, and not through a direct-to-consumer strategy.

The Company notes that its lead partner in the Rapid Test Consortium, Abingdon Health, remains optimistic about the opportunities for AbC-19(TM) however with the planned withdrawal from the Alva site, the Company will no longer be in a position to participate in the Rapid Test Consortium.

As announced on 10 December 2021, the Company is in dispute with the DHSC regarding the potential repayment of a pre-production payment of GBP2.5m (net of VAT). The Board of Omega, having taken legal advice, do not believe that the Company is required to repay the pre-production payment and that it is entitled to recover additional losses incurred under the contract. Discussions with the DHSC are ongoing.

   4.    Current Trading 

The Company remains focused on improving operational efficiencies and sensibly controlling costs. The Company is confident that revenues in the second half will see significant growth in both Health and Nutrition and for its CD4 product, whilst COVID-19 revenues are now likely to be minimal given the delays in gaining CTDA approval for the Company's professional antigen test and the very recent CE-marking of the antigen self-test. Overall, the Company believes that it will see an improved sales performance across the Group for the full year as compared with the year ended 31 March 2021 and to see trading losses slightly reduced in the second half.

As a result of the agreement to exit the Alva site, the Company will be reporting an exceptional, non-cash impairment charge of approximately GBP3.5m, reflecting the impairment of assets associated with the Alva site.

   5.      Details of the Placing and Subscription 

The Company is proposing to raise, in aggregate, GBP5.0 million (before expenses) by means of the Placing and Subscription. The Placing Shares and Subscription Shares will represent approximately 55 per cent. of the Existing Ordinary Shares. The aggregate net proceeds after costs related to the Placing and Subscription are expected to be GBP4.6 million. The Placing and Subscription Shares shall, when issued, rank in full for any dividend or other distribution declared, made or paid after Admission and otherwise equally in all respects with the Existing Ordinary Shares.

Application will be made to London Stock Exchange for the Placing Shares and Subscription Shares to be admitted to trading on AIM and it is anticipated that trading in the Placing Shares and Subscription Shares will commence on AIM at 8.00 a.m. on 8 March 2022.

The Placing is conditional upon, amongst other things:

-- the Placing Agreement becoming unconditional in re spect of such obligations that fall to be

performed prior to Admission  (save for Admission) and not having  been   terminated; 
   --            the   Resolutions   being   passed   at   the   General   Meeting; 

-- admission of the Placing Shares and Subscription Shares to trading on AIM becoming effective by not later than 8.00 a.m. on 8 March 2022. or such later date (being not later than the Longstop Date) as the Company and finnCap may agree; and

-- the Business Purchase Agreement relating to the sale of the Alva site to Orient Gene having become unconditional in all respects.

Pursuant to the terms of the Placing Agreement, finnCap as agent for the Company , has agreed to use its reasonable endeavours to procur e placees for the Placing Shares at the Issue Price; the Placing Agreement contains warranties fr om the Company in favour of finnCap in relation to, inter alia, the accuracy of the information contained in the documents relating to the Placing and certain other matters relating to the Company and its business. In addition, the Company has agreed to indemnify finnCap in relation to certain liabilities that it

may   incur   in   re spect   of   the   Placing. 

finnCap may terminate the Placing Agreement in certain circumstances (including for br each of warranty at any time prior to Admission, if such breach is reasonably considered by finnCap to be material in the context of the Placing) and in the event of a force majeure event or material adverse change occurring at any time prior to Admission.

   6.      Details of the Open Offer 

The Company considers it important that Qualifying Shareholders have an opportunity (where it is practicable for them to do so) to participate at the same price per Ordinary Share as the Placing and Subscription and accordingly the Company is making the Open Offer to Qualifying Shareholders. The Company is proposing to raise a maximum of approximately GBP2.0 million (before expenses) (assuming full take up of the Open Offer but being less than the EUR8 million maximum amount permitted without requiring the publication by the Company of a prospectus under the Prospectus Regulation Rules) through the issue of up to 40,596,089 Open Offer Shares.

The Open Offer Shares are available to Qualifying Shareholders pursuant to the Open Offer at the Issue Price of 5 pence per Open Offer Share, payable in full on acceptance. Any Open Offer Shares not applied for by Qualifying Shareholders will be available to Qualifying Shareholders under the Excess Application Facility .

Qualifying Shareholders may apply for Open Offer Shares under the Open Offer at the

Issue   Price   on   the   following   basis: 

2 Open Offer Shares for every 9 Existing Or dinary Shares held by the Qualifying

Shareholder   on   the   Record   Date 

Entitlements of Qualifying Shareholders to apply for Open Offer Shares will be rounded down to the nearest whole number of Open Offer Shares. Fractional entitlements which would otherwise arise will not be issued to the Qualifying Shareholders but will be aggregated and made available under the Excess Application Facility. The Excess Application Facility enables Qualifying Shareholders to apply for Excess Shares in excess of their Open Offer Entitlement. Not all Shareholders will be Qualifying Shareholders. Shareholders who are located in, or are citizens of, or have a registered office in the Restricted Jurisdictions will not qualify to participate in the Open Offer.

Valid applications by Qualifying Shareholders will be satisfied in full up to their Open Offer Entitlements as shown on the Application Form (for Qualifying Non-CREST Shareholders) and as credited to stock accounts in CREST (for Qualifying CREST Shareholders). Applicants can apply for less or more than their entitlements under the Open Offer but the Company cannot guarantee that any application for Excess Shares under the Excess Application Facility will be satisfied as this will depend in part on the extent to which other Qualifying Shareholders apply for less than or more than their own Open Offer Entitlements. If applications under the Excess Application Facility are received for more than the total number of Open Offer Shares available following take up of Open Offer Entitlements, such applications will be scaled back pro rata to existing shareholdings. It should be noted that applications under the Excess Application Facility may not be satisfied in full.

Application has been made for the Open Offer Entitlements to be admitted to CREST. It is expected that such Open Offer Entitlements will be credited to CREST at 8.00 a.m. on 14 February 2022. The Open Offer Entitlements will be enabled for settlement in CREST until 11 a.m. on 28 February 2022. Applications through the CREST system may only be made by the Qualifying CREST Shareholder originally entitled or by a person entitled by virtue of bona fide market claims. The Open Offer Shares must be paid in full on application. The latest time and date for receipt of completed Application Forms or CREST applications and payment in respect of the Open Offer is 11 a.m. on 28 February 2022.

The Open Offer is conditional on the Placing becoming unconditional in all respects and not being terminated before Admission (as the case may be). Accordingly, if the conditions to the Placing are not satisfied or waived (where capable of waiver), the Open Offer will not proceed and the Open Offer Shares will not be issued and all monies received by the Receiving Agent will be returned to the applicants (at the applicant's risk and without interest) as soon as possible, but within 14 days thereafter. Any Open Offer Entitlements admitted to CREST will thereafter be disabled.

The Open Offer 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 New Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

   7.      Related Party Transactions 
 
   Director        Position       Current      Current    Participation  Participation  Entitlements    Resultant 
                                   Number      % Holding      in the         in the        in the        holding 
                                 of Ordinary                 Placing      Subscription   Open Offer     % if full 
                                   Shares                                                              entitlements 
                                                                                                        are taken 
                                                                                                            up 
Simon Douglas      Chairman          0            0             0          400,000*          0            0.12% 
                --------------  ------------  ----------  -------------  -------------  ------------  ------------- 
  Jag Grewal         CEO          235,746        0.13        400,000           0           52,388         0.21% 
                --------------  ------------  ----------  -------------  -------------  ------------  ------------- 
  Chris Lea          CFO             0            0             0           400,000          0            0.12% 
                --------------  ------------  ----------  -------------  -------------  ------------  ------------- 
    Jeremy      Non-Executive 
    Millard        Director       525,000        0.29           0           400,000       116,666         0.32% 
                --------------  ------------  ----------  -------------  -------------  ------------  ------------- 
 

*In addition two adult children of Simon Douglas are subscribing for 100,000 shares in aggregate

Jag Grewal has agreed to subscribe for 400,000 New Ordinary Shares as part of the Placing. Jag is a related party of the Company for the purposes of the AIM Rules by virtue of his status as Director of the Company. William Rhodes , being the independent director for this purpose, considers, having consulted with the Company's nominated adviser, finnCap, that the terms of the Placing with such related party is fair and reasonable insofar as the Company's Shareholders are concerned.

Simon Douglas, Chris Lea and Jeremy Millard have agreed to subscribe for 400,000 New Ordinary Shares each as part of the Subscription. Each of them is a related party of the Company for the purposes of the AIM Rules by virtue of their status as Directors of the Company. William Rhodes , being the independent director for this purpose, considers, having consulted with the Company's nominated adviser, finnCap, that the terms of the Subscription with such related parties is fair and reasonable insofar as the Company's Shareholders are concerned.

   8.      Effect of the Fundraise 

Upon Admission, and assuming full take up of the Open Offer Entitlements, the Enlarged Issued Share Capital is expected to be 323,278,493 Ordinary Shares. On this basis, the New Ordinary Shares will re pr esent appr

oximately   43.4 per   cent.   of   the   Company ' s   Enlarged   Issued   Share   Capital. 

Following the issue of the New Ordinary Shares pursuant to the Fundraising, assuming full take up of the Open Offer Entitlements, Qualifying Shareholders who do not take up any of their Open Offer Entitlements nor participate in the Fundraise will suffer a dilution of appr oximately 43.4 per cent. to their interests in the Company . If a

Qualifying   Shareholder   takes   up   his   Open   Offer 

Entitlement in full, and does not participate in the Placing a nd Subscription, he will suffer a dilution of appr oximately 30.9 per cent. to his intere st in the Company .

DEFINITIONS

The following definitions apply throughout this announcement unless the context otherwise requires:

 
 "Admission"                               the admission of the Placing Shares 
                                            to trading on AIM becoming effective 
                                            in accordance with the AIM Rules 
 "AIM"                                     the market of that name operated 
                                            by London Stock Exchange 
 "AIM Rules "                              the AIM Rules for Companies, published 
                                            by London Stock Exchange 
 "Application Form "                       the application form for use by 
                                            Qualifying Non-CREST Shareholders 
                                            in connection with the Open Offer 
 "Board"                                   the board of directors of the 
                                            Company 
 "Bookrunner"                              finnCap 
 "Company" or "Omega"                      Omega Diagnostics Group plc 
 "CREST"                                   The relevant system (as defined 
                                            in the Uncertificated Securities 
                                            Regulations 2001) for the paperless 
                                            settlement of trades and the holding 
                                            of uncertificated securities operated 
                                            by Euroclear UK & Ireland Limited 
 "CREST Regulations "                      the Uncertificated Securities 
                                            Regulations 2001 (S.I. 2001 No. 
                                            3755) 
 "Dealing Day "                            a day on which the London Stock 
                                            Exchange is open for business 
                                            in London 
 "Directors"                               the directors of the Company 
 "Enlarged Issued Share Capital            all of the Ordinary Shares in 
  "                                         issue upon Admission of the New 
                                            Ordinary Shares 
 " Eur oclear "                            Euroclear UK & Ireland Limited, 
                                            the operator of CREST 
 "Excess Application Facility              the arrangement pursuant to which 
  "                                         Qualifying Shareholders may apply 
                                            for additional Open Offer Shares 
                                            in excess of their Open Offer 
                                            Entitlement in accordance with 
                                            the terms and conditions of the 
                                            Open Offer 
 "Excess CREST Open Offer"                 in respect of each Qualifying 
                                            CREST Shareholder, his Excess 
                                            Open Offer Entitlement 
 "Excess Open Offer Entitlements"          an entitlement for each Qualifying 
                                            Shareholder to apply to subscribe 
                                            for Open Offer Shares in addition 
                                            to his Open Offer Entitlement 
                                            pursuant to the Excess Application 
                                            Facility which is conditional 
                                            on him taking up his Open Offer 
                                            Entitlement in full and which 
                                            may be subject to scaling 
 "Excess Shares "                          Open Offer Shares applied for 
                                            by Qualifying Shareholders under 
                                            the Excess Application Facility 
 "Ex-entitlement Date "                    the date on which the Existing 
                                            Ordinary Shares are marked "ex" 
                                            for entitlement under the Open 
                                            Offer, being 8:00 a.m. 11 February 
 " Existing Or dinary Shares               the 182,682,404 existing ordinary 
  "                                         shares of 4 pence each in issue 
                                            at the date of this announcement 
                                            all of which are admitted to trading 
                                            on AIM 
 "FCA"                                     the Financial Conduct Authority 
 "finnCap"                                 finnCap Limited 
 "Form of Pr oxy "                         the form of proxy for use by Shareholders 
                                            in connection with the General 
                                            Meeting 
 "FSMA"                                    the Financial Services and Markets 
                                            Act 2000 
 "Fundraising"                             t ogether the Placing, the Subscription 
                                            and the Open Offer 
 "General Meeting "                        the general meeting of the Company 
                                            convened for 11 a.m. on 7 March 
 " Gr oup "                                the gr oup comprising the Company 
                                            and its subsidiary undertakings 
 "Issue Price"                             5 p ence per New Ordinary Share 
 "London Stock Exchange "                  L ondon Stock Exchange plc 
 "Longstop Date"                           31 March 2022 
 "Money Laundering Regulations             Terrorist Financing and Transfer 
  "                                         of Funds (Information on the Payer) 
                                            Regulations 2017, the Criminal 
                                            Justice Act 2003 and the Proceeds 
                                            of Crime Act 2002 
 "New Or dinary Shares "                   t ogether , the Placing Shares, 
                                            the Subscription Shares a nd the 
                                            Open Of fer Shar e s 
 "Or dinary Shares "                       o r d inary shares of 4 pence 
                                            each in the capital of the Company 
 "Open Offer "                             the conditional invitation by 
                                            the Company to Qualifying Shareholders 
                                            to apply to subscribe for the 
                                            Open Offer Shares at the Issue 
                                            Price 
 "Open Offer Entitlement "                 the individual entitlements of 
                                            Qualifying Shareholders to subscribe 
                                            for Open Offer Shares allocated 
                                            to Qualifying Shareholders pursuant 
                                            to the Open Offer 
 "Open Offer Shares "                      the up to 40,596,089 new Ordinary 
                                            Shares to be issued by the Company 
                                            pursuant to the Open Offer 
 "Overseas Shareholders "                  Shareholders with a registere 
                                            d addr ess outside the United 
                                            Kingdom 
 "Placing"                                 the placing of the Placing Shares 
                                            pursuant to the Placing Agreement 
 "Placing Agr eement "                     the agreement dated 10 February 
                                            2022 between the Company and finnCap 
                                            relating to the Placing 
 "Placing Shares"                          98,700,000 new Ordinary Shares 
                                            to be issued pursuant to the Placing 
 "Prospectus Regulation"                   means Regulation (EU) 2017/1129 
                                            on the prospectus to be published 
                                            when securities are offered to 
                                            the pubic or admitted to trading 
                                            on a regulated market 
 " Prospectus Regulation Rules             the prospectus rules and regulations 
  "                                         made by the FCA pursuant to section 
                                            73A of FSMA (as emended from time 
                                            to time) 
 " Qualifying CREST Shareholders           Qualifying Shareholders holding 
  "                                         Existing Ordinary Shares in uncertificated 
                                            form 
 " Qualifying Non-CREST Shareholders"      Qualifying Shareholders holding 
                                            Existing Ordinary Shares in certificated 
                                            form 
 " Qualifying Shareholders                 holders of Existing Ordinary Shares 
  "                                         on the register of members of 
                                            the Company at the Record Date 
                                            but excluding any Overseas Shareholder 
                                            who has a registered address in 
                                            any Restricted Jurisdiction 
 "Receiving Agent " or "Registrar"         Shar e Registrars Limited 
 "Record Date"                             c lose of business on 10 February 
                                            2022 
 "Regulatory Information Service           a service appr oved by the FCA 
  "                                         for the distribution to the public 
                                            of regulatory announcements and 
                                            included within the list maintained 
                                            on the FCA ' s website 
 "Resolutions"                             the resolutions set out in the 
                                            Notice of General Meeting forming 
                                            part of this Circular 
 "Restricted Jurisdiction "                has the meaning set out on page 
                                            3 o f this Circular 
 "Shareholders"                            holders of Ordinary Shares 
 "Subscription"                            the subscription to be made by 
                                            Simon Douglas, Chris Lea and Jeremy 
                                            Millard, Chairman, CFO and Non-Executive 
                                            Director of the Company respectively, 
                                            for 400,000 New Ordinary Shares 
                                            each at the Issue Price 
 "Subscription Shares "                    the 1,3 00,000 New Ordinary Shares 
                                            to be issued pursuant to the Subscription 
 "UK"                                      the United Kingdom of Great Britain 
                                            and Northern Ireland 
 "US" or "United States "                  the United States of America, 
                                            each State thereof, its territories 
                                            and possessions (including the 
                                            District of Columbia) and all 
                                            other areas subject to its jurisdiction 
 "uncertificated" or " in uncertificated   an Ordinary Share recor ded on 
  form"                                     a company ' s share register 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 
 "GBP", "pounds sterling",                 are references to the lawful currency 
  "pence" or "p"                            of the United Kingdom 
 "EUR" or " Eur o s "                      are references to a lawful currency 
                                            of the European Union 
 
   PLACING,   S UBSCRIPTION   AND   OPEN   OFFER   STA TISTICS 
 
  Issue Price                                                           5 pence 
  Number of Ordinary Shares in issue 
   on the date of this announcement                                 182,682,404 
  Number of Placing Shares                                           98,700,000 
  Number of Subscription Shares                                       1,300,000 
  Number of Open Offer Shares                                  up to 40,596,089 
  Enlarged Issued Share Capital upon 
   Admission                                                        323,278,493 
  New Ordinary Shares as a percentage                           76.96 per cent. 
   of the Existing Ordinary Shares* 
  Gross proceeds of the Placing and Subscription                 GBP5.0 million 
  Gross proceeds of the Open Offer*                              GBP2.0 million 
  Gross proceeds of the Fundraising                              GBP7.0 million 
  Net proceeds of the Fundraising                                GBP6.6 million 
 
  Open Offer Statistics 
  Open Offer basic entitlement                          2 Open Offer Shares for 
                                                      every 9 Existing Ordinary 
                                                                         Shares 
  Open Offer Shares as a percentage of                           12.6 per cent. 
   the Enlarged Issued Share Capital upon 
   Admission* 
  Open Offer Basic Entitlements ISIN                               GB00BL6LW742 
  Open Offer Excess Entitlements ISIN                              GB00BL6LW858 
 

*Assuming take-up in full of the Open Offer by Qualifying Shareholders

   EXPECTED   TIMET ABLE 
 
                                                                          2022 
Record Date for Entitlements Open Offer                 Close of business on 
                                                         10 February 
Announcement of Launch of Placing, Open Offer           07:00 a.m. 11 February 
 and Subscription 
Ex-entitlement date for Open Offer                       8:00 a.m. 11 February 
Publication and Posting of the Circular, Form                      11 February 
 of Proxy and, in respect of Qualifying non-CREST 
 Shareholders, the Application Form 
Open Offer Entitlements and Excess Open Offer                      14 February 
 Entitlement credited to CREST accounts for Qualifying 
 Shareholders 
Recommended latest time and date for requesting          4:30 p.m. 22 February 
 withdrawal of Open Offer Entitlements from CREST 
Recommended latest time and date for depositing          3:00 p.m. 23 February 
 Open Offer Entitlements into CREST 
Latest time and date for splitting Application           3:00 p.m. 24 February 
 Forms (to satisfy bona fide market claims only) 
Latest time and date for receipt of completed           11:00 a.m. 28 February 
 Application Forms from Qualifying Non-CREST 
 Shareholders and payment in full under the Open 
 Offer or settlement of relevant CREST instructions 
 (as appropriate) 
Announcement of result of Open Offer                                   1 March 
Latest time and date for receipt of Forms of                11:00 a.m. 5 March 
 Proxy or electronic proxy appointments for use 
 at the General Meeting 
General Meeting                                             11:00 a.m. 7 March 
Announcement of result of the General Meeting                          7 March 
Admission and commencement of dealings in the               08:00 a.m. 8 March 
 New Ordinary Shares on AIM 
New Ordinary Shares in uncertificated form expected                    8 March 
 to be credited to accounts in CREST (uncertificated 
 holders only) 
Expected date of despatch of definitive share               Week commencing 14 
 certificates for the New Ordinary Shares in                             March 
 certificated form (certificated holders only) 
Longstop date                                                         31 March 
 

Notes :

-- Each of the above times and/or dates is subject to change at the absolute discretion of the Company and finnCap. If any of the above times and/or dates should change, the revised times and/or dates will be announced through a Regulatory Information Service.

   --     All of the above times refer to London time unless otherwise stated. 

-- All events listed in the above timetable following the General Meeting are conditional on the passing of the Resolutions at the General Meeting.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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END

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February 11, 2022 02:00 ET (07:00 GMT)

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