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SkinBioTherapeutics PLC
14 October 2020
14 October 2020
SkinBioTherapeutics plc
Proposed Placing to raise GBP4.0m
Open Offer to Qualifying Shareholders
SkinBioTherapeutics plc (AIM: SBTX or the "Company") a life
sciences company focused on skin health, is pleased to announce it
has conditionally raised GBP4.0 million by way of a Placing to new
and existing institutional investors.
Furthermore, to enable other Shareholders who are not able to
participate in the Placing an opportunity to subscribe for new
Ordinary Shares, the Company is proposing to raise up to an
additional c.GBP0.5 million by way of an Open Offer made to
Qualifying Shareholders.
Key features of the Placing & Open Offer
-- Conditional Placing to raise GBP4.0 million through the
conditional issue of 25,000,000 New Ordinary Shares at 16 pence
with new and existing institutional investors.
-- Open Offer to raise up to an additional c.GBP0.5 million
through an Open Offer of up to 3,123,988 New Ordinary Shares at 16
pence per share with Qualifying Shareholders.
-- The issue price of 16 pence per New Ordinary Share represents
an 11.1 per cent. discount to the closing middle market price of 18
pence per Existing Ordinary Share on 13 October 2020, the last
Business Day before the announcement of the Fundraising.
-- The Fundraising is conditional, inter alia, on the passing of
the Resolutions by the Shareholders at a General Meeting, which has
been convened for 11:00 a.m. on 30 October 2020.
-- If the Resolutions are passed at the General Meeting, the New
Ordinary Shares are expected to be admitted to trading on AIM at
8:00am on 2 November 2020.
Use of proceeds
The net proceeds of the Placing of approximately GBP3.7 million
will be used by the Company for the following purposes:
-- To explore the use of the SkinBiotix(R) technology in areas
such as, oral and hair indications. Work has already been initiated
in these areas but a greater commitment of resource is required to
make material progress.
-- To expand the Company's research and development capability
through the establishment of its own lab facilities and extending
the resource capability at the University of Manchester, where it
has a long standing research agreement.
-- To explore both the launch of an own-label cosmetic product
and partnering opportunities for cosmeceutical product lines.
General meeting
The Fundraising is conditional, inter alia, upon Shareholder
approval at the General Meeting, which will be held electronically
at 11:00am on 30 October 2020.
In light of the ongoing COVID-19 pandemic and with a view to
taking appropriate measures to safeguard its shareholders' health
and make the General Meeting as safe and efficient as possible, the
Company is urging the Shareholders to exercise their votes by
submitting their Form of Proxy and appointing the Chairman of the
General Meeting as their proxy.
Shareholders will not be allowed to attend the meeting in
person, as to do so would be inconsistent with current government
guidelines relating to COVID-19, in particular the advice for
people to avoid public gatherings, all non-essential travel and
social contact. Any Shareholder seeking to attend the General
Meeting in person will be refused entry.
The Company is actively following developments and will issue
further information through a Regulatory Information Service and/or
on its website (www.skinbiotherapeutics.com) if it becomes
necessary or appropriate to make any alternative arrangements for
the General Meeting. The General Meeting will be purely functional
in format to comply with the relevant legal requirements.
Should Shareholders wish to ask any questions in relation to the
Fundraising or the Resolutions, which they may otherwise have asked
at the General Meeting had they been in attendance, they are
encouraged to contact the Company prior to the General Meeting by
email to the Company Secretary at
investorrelations@skinbiotherapeutics.com with the subject line "GM
Question".
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 also be available to download from the Company's website at
www.skinbiotherapeutics.com/investor-relations .
Subject to, inter alia, the passing of the Resolutions at the
General Meeting, up to 28,123,988 Ordinary Shares are expected to
be admitted to trading on AIM on or around 8:00 am on 2 November
2020.
Stuart Ashman, CEO of SkinBioTherapeutics plc, said:
"The Company has consistently delivered on its strategy for
shareholders. We have signed two commercial agreements - one with
the multinational ingredients company, Croda, to develop an active
skin care ingredient and the other with Winclove, to develop a food
supplement to treat the symptoms of psoriasis. Both development
tracks are making great progress.
"The new funds will help accelerate the development of other
areas for our technology - for example in oral care and in hair,
whilst we continue to progress our human study in psoriasis. We
will also be able to strengthen our R&D resources,
infrastructure and team, which have, until now, been kept
minimal.
"We are entering an exciting chapter for the Company into one of
late stage development and commercialisation, whilst continuing to
broaden the microbiome base of the Company."
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
-Ends-
For more information please contact:
SkinBioTherapeutics plc Tel: +44 (0) 161
468 2760
Stuart Ashman, CEO
Doug Quinn, CFO
Cenkos Securities plc (Nominated Adviser & Tel: +44 (0) 20 7397
Broker) 8900
Giles Balleny, Max Gould (Corporate Finance)
Michael Johnson (Sales)
Instinctif Partners Tel: +44 (0) 20 7457
2020
Melanie Toyne-Sewell / Phillip Marriage / Nathan SkinBio@instinctif.com
Billis
About SkinBioTherapeutics plc
SkinBioTherapeutics is a life science company focused on skin
health. The Company's proprietary platform technology,
SkinBiotix(R), is based upon discoveries made by Professor
Catherine O'Neill and Professor Andrew McBain.
The Company has demonstrated, through scientific testing, that
the SkinBiotix(R) platform can improve the barrier effect of skin
models, protect from infection and repair wounds. Proof of
principle studies have also shown that the SkinBiotix(R) platform
has beneficial attributes applicable to each of these areas. The
technology achieved positive results in clinical studies in human
volunteers in early 2019.
The Company listed on AIM in April 2017 and is based in
Manchester, UK. For more information, visit:
www.skinbiotherapeutics.com .
The following is extracted from the Circular:
1. INTRODUCTION
The Company has today announced that it has conditionally raised
approximately GBP4.0 million (before expenses), pursuant to a
Placing and is undertaking an Open Offer to raise up to an
additional GBP0.5 million. The Open Offer provides Qualifying
Shareholders with an opportunity to participate in the proposed
issue of New Ordinary Shares on the same terms as the Placees.
The issue price of 16 pence per New Ordinary Share represents an
approximate 11.1 per cent. discount to the closing middle market
price of 18 pence per Existing Ordinary Share on 13 October 2020,
the last Business Day before the announcement of the Proposals.
The Fundraising is conditional, inter alia, on the passing of
the Resolutions by the Shareholders at the General Meeting, which
has been convened for 11:00 a.m. on 30 October 2020. If the
Resolutions are passed, the New Ordinary Shares are expected to be
allotted immediately after the General Meeting, conditional on
Admission, which is expected to occur at 8:00 a.m. on 2 November
2020. Should Shareholder approval not be obtained at the General
Meeting, neither the Placing nor the Open Offer will proceed.
Neither the Placing nor the Open Offer has been underwritten.
The purpose of this document is to explain the background to the
Fundraising, to set out the reasons why the Board believes that the
Proposals are in the best interests of the Company and its
Shareholders and to seek Shareholder approval of the Resolutions at
the forthcoming General Meeting, which will be held at 6.7.8
Tokenhouse Yard, London, EC2R 7AS at 11:00 a.m. on 30 October
2020.
2. BACKGROUND TO AND REASONS FOR THE FUNDRAISING
Background
Based in the UK, the Company seeks to harness the human
microbiome to promote health. The Company was initially founded on
scientific discoveries made at the University of Manchester related
to the activities of lysates (extracts) derived from probiotic
bacteria when applied to the skin.
The Company is targeting five specific skin healthcare sectors;
cosmetics skincare, food supplements for the treatment of skin
conditions, medical skin care, infection control in both the home
and the hospital environment and pharmaceuticals for the prescribed
treatment of skin conditions. In each of these areas the Company
plans to exemplify its technology in human studies. The most
advanced programme is the application of the SkinBiotix(R) platform
in managing sensitive skin and providing anti ageing benefits in
the cosmetics industry. The business strategy is to partner and
license its programmes at proof of concept stage.
Reasons for the Fundraising
In November 2019 the Company identified five channels in which
to develop its focus, encompassing both existing and new
technology;
-- SkinBiotix (R) - the Company's core technology that is
designed to promote skin health by harnessing the beneficial
properties of probiotic bacteria
-- AxisBiotix(TM) - addressing the emerging area of science that
is focused on the gut-skin axis and its role in various
diseases
-- MediBiotix(TM) - this channel is targeting the use of the
SkinBiotix(R) technology for medical device applications including
the treatment of eczema and woundcare
-- CleanBiotix(TM) - targeting the use of the SkinBiotix (R)
technology to address certain categories of health care acquired
infections
-- PharmaBiotix(TM) - an extension to the medical device and
AxisBiotix(TM) applications through a pathway of medicinal
prescription registrations.
SkinBiotix(R) is the Company's proprietary technology and is
designed to promote skin health by harnessing the beneficial
properties of probiotic bacteria and the active components derived
from them. In November 2019 the Company signed a commercial
agreement with Croda International Plc ("Croda"), and its
speciality bioactive ingredient manufacturer, Sederma for the
development and commercialisation of a new active skincare cosmetic
ingredient, incorporating the SkinBiotix(R) technology. In July
2020 Sederma updated the Company that it had successfully
replicated the lysate manufacturing process and outcomes as
developed by the Company and was now working to validate the scale
up of the manufacturing process at different volume levels. Sederma
also confirmed that despite COVID-19 there had been no delays
against the project timeline.
Opportunities exist for the Company to explore the use of the
SkinBiotix(R) technology in other areas, for example, oral and hair
indications through engagement with third party research. Whilst
work has been initiated in these areas it requires a greater
commitment of resource to make material progress. Under the terms
of the agreement with Croda, the Company retains the right to
launch an 'own label' cosmetic and this is an opportunity the
Company will explore further.
In February 2020, the Company signed a development agreement
with Winclove Probiotics B.V. ("Winclove") for a probiotic food
supplement to help manage the symptoms associated with the skin
condition, psoriasis. A proprietary blend of 'good' bacterial
strains had already been identified by SkinBioTherapeutics, and the
Company has since reported that, several months ahead of schedule,
Winclove has been able to successfully combine and formulate the
blend as a probiotic food supplement, to be known as AxisBiotix
(TM)Ps. The Company is now working with Winclove to finalise a
selected formulation and address matters such as taste and
packaging.
As a pre-requisite to commercialisation, AxisBiotix (TM)Ps will
undergo a human study with patients suffering from mild to moderate
psoriasis. The Company has confirmed with the necessary regulatory
bodies that the study will be conducted as a food supplement study.
Such studies have much reduced requirements in terms of endpoints
and the time required compared to a therapeutic trial.
The study was targeted to start before the end of 2020 and
estimated to take approximately 12-18 months to complete. In light
of COVID-19 and the constraints regarding non-COVID human studies
the Company has established a protocol for, and is proceeding with,
a 'self managed' trial that will not require participants to attend
physician consultations.
Participants suffering from mild to moderate psoriasis will be
invited to participate in a human study in which they will be
provided with samples of AxisBiotix (TM)Ps to self-administer over
an eight week period and track the impact of the food supplement on
their skin condition. Participants will submit their findings on a
periodic basis through a bespoke mobile device app, thus avoiding
the need for clinical attendance. This will accelerate the timing
of readout compared to the previously envisaged conventional study.
As a result, if the findings are positive, this will allow for a
significantly earlier commercial launch than originally planned.
The Company anticipates commencing the trial in early 2021.
The Company has a long standing research agreement with the
University of Manchester and considers this an important component
of continuing to develop a pipeline of opportunities related to the
microbiome. This approach has worked well during the early stages
of the Company's growth where it has operated virtually. As the
breadth of opportunities for its existing and future technologies
continues to expand the Company intends to establish its own
facilities to support the progression of technology from research
to development. Additionally the Company will seek to extend the
resource capability at the University of Manchester focussed on the
development of the core science.
The Directors believe the Fundraising will put the Company in a
strong position to progress each of the identified channels and in
doing so build a broader, microbiome based and science led
business.
3. USE OF PROCEEDS
The Company has conditionally raised gross proceeds of at least
GBP4.0 million by way of the Placing, and any funds raised in the
Open Offer will be in addition to this amount. The primary purpose
behind the Fundraising is to fund the expansion of the Company's
technology pipeline into areas such as haircare, UV protection and
acne, accelerate commercial opportunities for own label product
lines and support the transition of the Company from a virtual
operation to one with an in-house scientific capability and related
infrastructure.
4. DETAILS OF THE FUNDRAISING
The Company has conditionally raised a total of up to
approximately GBP4.5 million (before expenses), comprising: i) a
Placing to raise GBP4.0 million (before expenses) through a placing
of 25,000,000 New Ordinary Shares at 16 pence per share with
institutional and other investors; and ii) an Open Offer to raise
up to an additional approximate GBP0.5 million (before expenses)
through an Open Offer of up to 3,123,988 New Ordinary Shares at 16
pence per share with Qualifying Shareholders.
The Fundraising has not been underwritten and is conditional,
inter alia, upon:
a) the passing of resolutions 1 and 3 of the Resolutions;
b) the Placing Agreement becoming unconditional in all respects
(other than Admission) and not having been terminated in accordance
with its terms; and
c) Admission occurring by not later than 8:00 a.m. on 2 November
2020 (or such later time and/or date as the Company and Cenkos
Securities may agree, not being later than 8:00 a.m. on 30 November
2020).
Accordingly, if any of the conditions are not satisfied or
waived (where capable of waiver), the Fundraising will not proceed,
the New Ordinary Shares will not be issued and all monies received
by Cenkos Securities, the Receiving Agents or the Company (as the
case may be) will be returned to the applicants (at the applicants'
risk and without interest) as soon as possible thereafter.
The Directors believe that the New Ordinary Shares to be issued
pursuant to the Placing and Open Offer will meet the requirements
of section 173 ITA for the purposes of the EIS and the Company is a
Qualifying Holding and the New Ordinary Shares are eligible shares
for the purposes of investment by VCTs. Further details as regards
EIS and VCT reliefs are set out in paragraph 6 below.
Details of the Placing
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 and Cenkos Securities may terminate the
Placing Agreement in certain customary circumstances.
Details of the Open Offer
In recognition of their continued support to the Company, the
Board believes that the Open Offer provides the Company's
longstanding and supportive Shareholders with an opportunity to
participate in the Fundraising.
The Company is providing all Qualifying Shareholders with the
opportunity to subscribe, at the Issue Price, for an aggregate of
3,123,988 Open Offer Shares, raising gross proceeds of up to
approximately GBP0.5 million.
Qualifying Shareholders may apply for Open Offer Shares under
the Open Offer at the Issue Price on the following basis:
1 Open Offer Share for every 41 Existing Ordinary Shares
and so in proportion for any number of Existing Ordinary Shares
held on the Record Date.
Entitlements of Qualifying Shareholders will be rounded down to
the nearest whole number of Ordinary Shares. Fractional
entitlements which would otherwise arise will not be issued to the
Qualifying Shareholders but will be 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 certain overseas
jurisdictions will not qualify to participate in the Open Offer.
The attention of Overseas Shareholders is drawn to paragraph 5
below.
Valid applications by Qualifying Shareholders will be satisfied
in full up to their Open Offer Entitlements. Qualifying
Shareholders can apply for less or more than their Open Offer
Entitlements 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. The Company may satisfy valid applications
for Excess Shares in whole or in part but reserves the right at its
sole discretion not to satisfy, or to scale back, applications made
in excess of Open Offer Entitlements.
Application has been made for the Open Offer Entitlements and
Excess CREST Open Offer Entitlements for Qualifying CREST
Shareholders to be admitted to CREST. It is expected that the Open
Offer Entitlements and the Excess CREST Open Offer Entitlements
will be admitted to CREST on 15 October 2020. Applications through
the CREST system may only be made by the Qualifying Shareholder
originally entitled or by a person entitled by virtue of a bona
fide market claim.
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
11:00 a.m. on 28 October 2020.
Qualifying Shareholders should note that the Open Offer is not a
rights issue and therefore the Open Offer Shares which are not
applied for by Qualifying Shareholders will not be sold in the
market for the benefit of the Qualifying Shareholders who do not
apply under the Open Offer. The Application Form is not a document
of title and cannot be traded or otherwise transferred.
Further details of the Open Offer and the terms and conditions
on which it is being made, including the procedure for application
and payment, are contained in Part III of this document and on the
accompanying Application Form.
Rights of the New Ordinary Shares and application for
Admission
The New Ordinary Shares will, when issued, be credited as fully
paid up and will be issued subject to the Company's articles of
association and 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 on or in respect of the
Ordinary Shares after the date of issue of the New Ordinary Shares,
and will on issue be free of all claims, liens, charges,
encumbrances and equities.
Application will be made to the London Stock Exchange for the
Admission of the New Ordinary Shares to trading on AIM. It is
expected that Admission of the New Ordinary Shares will occur on or
around 8:00 a.m. (London time) on 2 November 2020 (or such later
time and/or date as Cenkos Securities may agree with the Company,
being not later than 8:00 a.m. on 30 November 2020 ).
5. OVERSEAS SHAREHOLDERS
The attention of Qualifying Shareholders who have registered
addresses outside the United Kingdom, or who are citizens or
residents of countries other than the United Kingdom, or who are
holding Existing Ordinary Shares for the benefit of such persons,
(including, without limitation, custodians, nominees, trustees and
agents) or who have a contractual or other legal obligation to
forward this document or the Application Form to such persons, is
drawn to the information which appears in paragraph 6 of Part III
of this document.
In particular, Qualifying Shareholders who have registered
addresses in or who are resident in, or who are citizens of,
countries other than the UK (including without limitation the
United States of America), should consult their professional
advisers as to whether they require any governmental or other
consents or need to observe any other formalities to enable them to
take up their entitlements under the Open Offer.
6. EIS AND VCT
On issue, the New Ordinary Shares will not be treated as either
"listed" or "quoted" securities for the purposes of section 184 of
ITA for the purposes of the EIS or section 257 of ITA for the
purposes of the VCT regime. Provided that the Company remains one
which does not have any of its shares quoted on a recognised stock
exchange (which for these purposes does not include AIM), the New
Ordinary Shares should continue to be treated as unquoted
securities.
The following information is based upon the laws and practice
currently in force in the UK and may not apply to persons who do
not hold their Ordinary Shares as investments.
The Board believes that the New Ordinary Shares to be issued
pursuant to the Fundraising will be 'eligible shares' and will be
capable of being a Qualifying Holding for the purposes of
investment by VCTs. The Board believes that the New Ordinary Shares
will also satisfy the conditions of section 173 of ITA for the
purposes of the EIS.
Potential shareholders or Shareholders of the Company who are in
any doubt as to their tax position or who are subject to tax in
jurisdictions other than the UK are strongly advised to consult
their own independent financial adviser immediately.
These details are intended only as a general guide to the
current tax position under UK taxation law and are not intended to
be exhaustive. Investors who are in any doubt as to their tax
position or who are subject to a tax jurisdiction, other than the
UK, are strongly advised to consult their professional advisers.
Companies can raise up to GBP5 million under the combined VCT, EIS,
SEIS, social investment tax relief or any other State aid risk
capital investment in any 12-month period.
EIS
Provided that the investor and the Company comply with the EIS
legislation (Part 5 of the ITA and Sections 150A-C and Schedule 5B
of the Taxation of Chargeable Gains Act 1992), which includes a
requirement that the New Ordinary Shares are held by investors for
not less than three years, UK taxpayers with a sufficient tax
liability in the year of claim should qualify for EIS relief on
their investment in newly issued shares in the Company.
The Directors believe, subject to a form EIS1 being submitted
and accepted by HMRC, that the Company is to be treated as carrying
on a qualifying trade for EIS purposes. The Directors intend to
manage the Company so as to maintain (as far as they are able and
subject always to their statutory duties to act in the best
interest of the shareholders of the Company as a whole) the status
of the Company as a qualifying company although no guarantee can be
given in this regard.
Shareholders who wish to apply for EIS relief should contact
Douglas Quinn, the Company Secretary, at the registered office of
the Company.
There are four EIS tax reliefs being:
(i) Income tax relief
Individuals can obtain income tax relief on the amount
subscribed for ordinary shares (to a maximum of GBP1,000,000 in a
tax year in one or more qualifying companies), which are retained
for a period of at least three years, provided the individuals are
not connected to the issuing company. A tax reduction equal to 30
per cent. of the eligible amount subscribed is given, subject to an
investor having a sufficient tax liability in the year of claim.
The tax reduction is given against the individual's income tax
liability for the tax year in which the ordinary shares are issued
although in certain circumstances it is possible to carry back the
relief to the preceding tax year under section 158(4) ITA. The
relief must be claimed and will be limited to an individual's
actual income tax liability in that tax year before EIS relief and
cannot exceed that tax liability. EIS income tax relief is not
available for individuals who together with their 'associates',
very broadly, own more than 30 per cent. of the ordinary share
capital of the Company or who are otherwise 'connected' to the
Company. EIS income tax relief is not available to any shareholder
who, at the date of an EIS share issue, already holds shares in the
Company upon which they have claimed EIS income tax relief, other
than any shares issued by the Company on incorporation.
(ii) Capital Gains Tax ("CGT") exemption
Any capital gains realised on the disposal, after a period of at
least three years, of ordinary shares on which EIS income tax
relief has been given and not withdrawn are not subject to capital
gains tax. This exemption is not available for individuals who
together with their 'associates', very broadly, own more than 30
per cent. of the ordinary share capital of the Company or are
otherwise connected with the Company.
(iii) Loss relief
Subject to certain conditions, tax relief is available for a
qualifying shareholder who realises a loss on a disposal of
ordinary shares on which EIS income tax relief (see (i) above) has
been given and not withdrawn.
The amount of the loss (after taking account of the income tax
relief initially obtained) can be set against a capital gain in the
tax year of loss or following tax years or in certain circumstances
offset against taxable income in the tax year in which the disposal
occurs or the preceding tax year.
(iv) CGT deferral
To the extent that a UK resident (which includes individuals and
certain trustees) subscribes for qualifying ordinary shares a claim
can be made to defer all or part of a chargeable gain arising on
the disposal of any asset. Although there is a limit of
GBP1,000,000 (or GBP2,000,000 in the case where any amount above
GBP1,000,000 is invested in "knowledge-intensive companies") for
investments to qualify for income tax relief and a proportionate
reduction in the exemption from CGT for subscriptions exceeding
this limit (see (i) and (ii) above), there is no limit on the
amount of gains that can be deferred in this way. The subscription
must have been made within one year before or three years after the
date of the disposal which gave rise to the gain or the date when a
previously deferred gain crystallises. The gain is deferred until
there is a "chargeable event", such as the disposal of ordinary
shares.
If the investing ordinary shareholder does not retain the
ordinary shares or the EIS rules are otherwise breached, the CGT
deferral originally granted will be withdrawn and tax will be
charged on the basis of a taxable event occurring at the date the
rules cease to be met.
Although the Company currently expects to satisfy the relevant
conditions for EIS investment, neither the Directors nor the
Company gives any warranty or undertaking that relief will be
available in respect of any investment in New Ordinary Shares
pursuant to this document, nor do they warrant or undertake that
the Company will conduct its activities in a way that qualifies for
or preserves its status.
VCT
The status of the New Ordinary Shares as a Qualifying Holding
for VCTs will be conditional, inter alia, upon the Company
continuing to satisfy the relevant requirements. Although the
Company currently expects to satisfy the relevant conditions for
VCT investment, neither the Directors nor the Company gives any
warranty or undertaking that relief will be available in respect of
any investment in the New Ordinary Shares pursuant to this
document, nor do they warrant or undertake that the Company will
conduct its activities in a way that qualifies for or preserves its
status.
As the rules governing EIS and VCT reliefs are complex and
interrelated with other legislation, if Shareholders and potential
shareholders are in any doubt as to their tax position, require
more detailed information than the general outline above, or are
subject to tax in a jurisdiction other than the United Kingdom,
they should consult their professional adviser.
7. RISK FACTORS AND ADDITIONAL INFORMATION
The attention of Shareholders is drawn to the risk factors set
out in Part II and the information contained in Parts III and IV of
this document, which provide additional information on the Open
Offer.
8. RELATED PARTIES' PARTICIPATION IN THE FUNDRAISING
Substantial Shareholders' participation in the Fundraising
The following substantial Shareholders (being a Shareholder
holding 10 per cent. or more of the Company's Ordinary Shares as at
13 October 2020, the latest practicable date prior to publication
of this document) are participating in the Placing as described
below:
Name Number Percentage Number Amount Number Percentage
of Existing of Existing of Placing subscribed of Ordinary of Enlarged
Ordinary Ordinary Shares for in Shares Share
Shares Shares subscribed the Placing held following Capital*
for the Placing
and Open
Offer
Seneca Partners
Limited 18,140,398 14.2% 3,110,000 GBP497,600 21,250,398 13.9%
------------- ------------- ------------ ------------- ---------------- -------------
* on the assumption that the maximum number of Placing Shares
are issued pursuant to the Placing but not including any Open Offer
Shares that may be subscribed for pursuant to the Open Offer.
The participation by the Shareholder referred to above in the
Placing is classified as a related party transaction for the
purposes of the AIM Rules by virtue of such Shareholder being a
'substantial shareholder' (as defined in the AIM Rules for
Companies) in the Company. The Directors, having consulted with
Cenkos Securities, consider that the terms of the transaction are
fair and reasonable insofar as the Company's Shareholders are
concerned.
Directors' participation in the Placing
As part of the Fundraising, certain Directors intend to
subscribe (either personally or through a nominee) for an aggregate
of 187,500 Placing Shares at the Issue Price. Details of the
Placing Shares for which the Directors intend to subscribe (either
personally or through a nominee) are displayed below:
Name** Number of Number of Value of Resulting Percentage
existing Placing Shares Placing Shares shareholding of Enlarged
Ordinary intended intended following Share Capital
Shares to be subscribed to be subscribed proposed following
for for* subscription proposed
subscription*
Stuart John
Ashman Nil 125,000 GBP20,000 125,000 0.0%
--------- ----------------- ----------------- ------------- --------------
Catherine Prescott 56,112 62,500 GBP10,000 118,612 0.0%
--------- ----------------- ----------------- ------------- --------------
* On the assumption that the maximum number of Placing Shares
are issued pursuant to the Placing but not including any Open Offer
Shares that may be subscribed for pursuant to the Open Offer
**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
Placing is classified as a 'related party transaction' for the
purposes of the AIM Rules. The Directors who are not participating
in the Placing having consulted with Cenkos Securities, consider
that the terms of the transaction are fair and reasonable insofar
as the Company's Shareholders are concerned.
9. OPTIBIOTIX LOCK-IN AND ORDERLY MARKET AGREEMENT
As at 13 October 2020, the Company's major shareholder,
Optibiotix Health Plc ("Optibiotix"), holds 38,138,569 Ordinary
Shares representing 29.8 per cent. of the Company's issued share
capital. Optibiotix, Cenkos and the Company have entered into a
lock-in and orderly market agreement pursuant to which Optibiotix
has undertaken to the Company and to Cenkos that: (i) it will not
until the first anniversary of the Fundraising dispose of the
Ordinary Shares that it holds during such period; and (ii) it will
only dispose of such Ordinary Shares during the 12 month period
following such first anniversary through Cenkos (or its
replacement) so as to ensure an orderly market in the Shares.
10. GENERAL MEETING
T he General Meeting is being called to seek Shareholders'
approval to grant new authorities to enable the Directors, inter
alia, to allot the New Ordinary Shares.
A notice convening a General Meeting of the Company, to be held
at 6.7.8 Tokenhouse Yard, London, EC2R 7AS at 11:00 a.m. on 30
October 2020, is set out at the end of this document . Further
details regarding the General Meeting and arrangements made in
light of the COVID-19 pandemic are set out in paragraph 11 of this
Part I. At the General Meeting, the following resolutions will be
proposed:
Ordinary resolutions to:
1. authorise the directors to allot equity securities up to an
aggregate nominal amount of GBP 281,240 in respect of the
Fundraising; and
2. authorise the directors to allot equity securities up to an
aggregate nominal amount of GBP 520,692 (being equal to
approximately one-third of the Enlarged Share Capital), and a
further GBP 520,692 in the event of a rights issue (being equal to
approximately a further one-third of the Enlarged Share
Capital).
Special resolutions to:
3. disapply statutory pre-emption rights in respect of
allotments of equity securities up to an aggregate nominal amount
of GBP 281,240 in respect of the Fundraising; and
4. disapply statutory pre-emption rights in respect of
allotments of equity securities: (i) made on a pre-emptive basis;
and (ii) relating to the grant of options to subscribe for Ordinary
Shares (and the allotment of such shares pursuant to the exercise
of options granted), under the terms of any share option scheme
adopted or operated by the Company; and (iii) otherwise up to an
aggregate nominal amount of GBP 156,208 (being equal to
approximately ten per cent. of the Enlarged Share Capital).
11. ACTION TO BE TAKEN BY SHAREHOLDERS
General meeting
Qualifying Non-CREST Shareholders should check that they have
received the following with this document:
-- a Form of Proxy for use in relation to the General Meeting; and
-- a reply-paid envelope for use in connection with the return
of the Form of Proxy (in the UK only).
You are strongly encouraged to complete, sign and return your
Form of Proxy in accordance with the instructions printed thereon
so as to be received, by post or, during normal business hours
only, by hand to Share Registrars Limited, The Courtyard, 17 West
Street, Farnham GU9 7DR , as soon as possible but in any event so
as to arrive by not later than 11:00 a.m. on 28 October 2020 (or,
in the case of an adjournment of the General Meeting, not later
than 48 hours before the time fixed for the holding of the
adjourned meeting (excluding any part of a day that is not a
Business Day)).
If you hold Existing Ordinary Shares in CREST, no Form of Proxy
will be sent to you. Instead, you may appoint a proxy by completing
and transmitting a CREST proxy instruction to the Company's
registrars, Share Registrars Limited (under Participant ID 7RA36 )
so that it is received by not later than 11:00 a.m. on 28 October
2020.
In light of the COVID-19 pandemic Shareholders are urged to
exercise their votes by submitting their Form of Proxy and
appointing the Chairman of the General Meeting as their proxy.
Shareholders and their proxies will not be allowed to attend the
meeting in person, as to do so would be inconsistent with current
government guidelines relating to COVID-19 (as published as at the
date of this circular), in particular the advice for people to
avoid public gatherings, all non-essential travel and social
contact. Any Shareholder seeking to attend the General Meeting in
person will be refused entry. The Company is actively following
developments and will issue further information through a
Regulatory Information Service and/or on its website (
www.skinbiotherapeutics.com) if it becomes necessary or appropriate
to make any alternative arrangements for the General Meeting. The
General Meeting will be purely functional in format to comply with
the relevant legal requirements.
Appointing a proxy in accordance with the instructions set out
above will enable your vote to be counted at the General
Meeting.
Open Offer
The latest time for application under the Open Offer to be
received is 11.00 a.m. on 28 October 2020. The procedure for
application and payment depends on whether, at the time at which
application and payment is made, you have an Application Form in
respect of your Open Offer Entitlements or have Open Offer
Entitlements credited to your stock account in CREST in respect of
such entitlement. The procedures for application and payment are
set out in Part III of this document.
If you are a Qualifying Non-CREST Shareholder you will have
received an Application Form which gives details of your
entitlement under the Open Offer (as shown by the number of Open
Offer Entitlements allocated to you). If you wish to apply for Open
Offer Shares under the Open Offer (whether in respect of your Open
Offer Entitlement or both your Open Offer Entitlement and any
Excess Shares), you should complete the accompanying Application
Form in accordance with the procedure for application set out in
Part III of this document. Shareholders are advised to return the
Application Form using the enclosed reply-paid envelope, which can
also be used for return of completed Forms of Proxy.
If you are a Qualifying CREST Shareholder and do not hold any
Existing Ordinary Shares in certificated form, no Application Form
is enclosed with this document and you will receive a credit to
your appropriate stock account in CREST in respect of the Open
Offer Entitlements representing your entitlement under the Open
Offer except (subject to certain conditions) if you are an Overseas
Shareholder who has a registered address in, or is a resident in or
a citizen of a Restricted Jurisdiction. Applications by Qualifying
CREST Shareholders for Excess Shares in excess of their Open Offer
Entitlements should be made in accordance with the procedures set
out in Part III of this document, unless you are an Overseas
Shareholder in which event, applications should be made in
accordance with the procedures set out in paragraph 6 of Part III
of this document. Qualifying CREST Shareholders who are CREST
sponsored members should refer to their CREST sponsors regarding
the action to be taken in connection with this document and the
Open Offer.
If you are in any doubt as to what action you should take, you
should immediately seek your own personal financial advice from
your stockbroker, bank manager, solicitor, accountant or other
independent professional adviser duly authorised under the FSMA if
you are resident in the United Kingdom or, if not, from another
appropriately authorised independent financial adviser.
12. DIRECTORS' RECOMMATION
The Directors consider the Proposals to be in the best interests
of the Company and its Shareholders as a whole. Accordingly, the
Directors recommend unanimously that Shareholders vote in favour of
the Resolutions to be proposed at the General Meeting, as they
intend to do in respect of their own shareholdings, which total
967,223 Existing Ordinary Shares (representing approximately 0.8
per cent. of the Existing Ordinary Share capital).
KEY FUNDRAISING STATISTICS
Number of Existing Ordinary Shares 128,083,494
Number of Placing Shares 25,000,000
Maximum number of Open Offer Shares 3,123,988
Issue Price 16 pence
Percentage of the Enlarged Share Capital represented 18.0 per cent.
by the New Ordinary Shares*
Gross proceeds of the Placing GBP4.0 million
Maximum gross proceeds of the Open Offer Approximately GBP
0.5 million
Estimated net proceeds of the Fundraising Up to GBP4.2 million
Enlarged Share Capital immediately following
the Fundraising* 156,207,482
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Record Date for entitlements under the Open 6:00 p.m. on 12 October
Offer 2020
Announcement of the Fundraising 7:00am on 14 October
2020
Publication and posting of this document, 14 October 2020
the Form of Proxy and Application Form
Ex-entitlement Date for the Open Offer 7:00 a.m. on 14 October
2020
Open Offer Entitlements and Excess CREST Open As soon as practical
Offer Entitlements credited to stock accounts after 8:00 a.m. on
of Qualifying CREST Shareholders in CREST 15 October 2020
Latest recommended time and date for requesting 3:00 p.m. on 22 October
withdrawal of Open Offer Entitlements and 2020
Excess CREST Open Offer Entitlements from
CREST
Latest time and date for depositing Open Offer 3:00 p.m. on 23 October
Entitlements and Excess CREST Open Offer Entitlements 2020
into CREST
Latest time and date for splitting Application 3:00 p.m. on 26 October
Forms (to satisfy bona fide market claims 2020
only)
Latest time and date for receipt of completed 11:00 a.m. on 28 October
Forms of Proxy and receipt of electronic proxy 2020
appointments via the CREST system
Latest time and date for receipt of the completed 11:00 a.m. on 28 October
Application Form and appropriate payment in 2020
respect of Open Offer Shares or settlement
of relevant CREST instruction
General Meeting 11:00 a.m. on 30 October
2020
Announcement of result of General Meeting 30 October 2020
and Placing and Open Offer
Admission and commencement of dealings in 8:00 a.m. on 2 November
the New Ordinary Shares on AIM 2020
CREST members' accounts credited in respect 2 November 2020
of New Ordinary Shares in uncertificated form
Despatch of definitive share certificates Within 10 days of Admission
for New Ordinary Shares in certificated form
If any of the details contained in the timetable above should
change, the revised times and dates will be notified to
Shareholders by means of an announcement through a Regulatory
Information Service.
Certain of the events in the above timetable are conditional
upon, inter alia, the approval of the Resolutions to be proposed at
the General Meeting.
All references to time and dates in this document are to time
and dates in London.
DEFINITIONS
"Act" the Companies Act 2006 (as amended)
"Admission" admission of the New Ordinary Shares to
trading on AIM becoming effective in accordance
with the AIM Rules for Companies;
"AIM" the market of that name operated by the
London Stock Exchange;
"AIM Rules for Companies" the AIM Rules for Companies, as published
and amended from time to time by the London
Stock Exchange;
"Application Form" the application form enclosed with this
document on which Qualifying Non-CREST Shareholders
may apply for Open Offer Shares under the
Open Offer;
"Board" or "Directors" the directors of the Company as at the date
of this document, whose names are set out
on page 3 of this document;
"Business Day" any day (excluding Saturdays and Sundays)
on which banks are open in London for normal
banking business and the London Stock Exchange
is open for trading;
"Cenkos Securities" Cenkos Securities plc, a public limited
company incorporated in England and Wales
under registered number 05210733 and having
its registered office at 6 7 8 Tokenhouse
Yard, London, EC2R 7AS, the Company's nominated
advisor and broker for the purposes of the
Fundraising;
"certificated" or "in where an Ordinary Share is not in uncertificated
certificated form" form (i.e. not in CREST);
"Chairman" the chairman of the Board;
"Company" or "SkinBio" SkinBioTherapeutics plc, a company registered
in England and Wales with registered number
09632164;
"CREST" the relevant system for the paperless settlement
of trades and the holding of uncerti cated
securities operated by Euroclear UK & Ireland
Limited in accordance with the CREST Regulations;
"CREST Manual" the CREST Manual referred to in agreements
entered into by Euroclear and available
at www.euroclear.com;
"CREST member" a person who has been admitted to CREST
as a system-member (as defined in the CREST
Regulations);
"CREST member account the identification code or number attached
ID" to a member account in CREST;
"CREST participant" a person who is, in relation to CREST, a
system-participant (as defined in the CREST
Regulations);
"CREST participant ID" shall have the meaning given in the CREST
Manual;
"CREST payment" shall have the meaning given in the CREST
Manual;
"CREST Regulations" the Uncertificated Securities Regulations
2001 (SI 2001/3755) including any enactment
or subordinate legislation which amends
or supersedes those regulations and any
applicable rules made under those regulations
or any such enactment or subordinate legislation
for the time being in force;
"CREST sponsor" a CREST participant admitted to CREST as
a CREST sponsor;
"CREST sponsored member" a CREST member admitted to CREST as a CREST
sponsored member;
"EIS" The Enterprise Investment Scheme under the
provisions of Part 5 of the ITA and sections
150 sections 150 A,B and C and Schedule
5B of the Taxation of Chargeable Gains Act
1992 (as amended);
"Enlarged Share Capital" the entire issued share capital of the Company
on Admission following completion of the
Fundraising assuming full take up under
the Open Offer;
"Euroclear" Euroclear UK & Ireland Limited;
" Excess Application the arrangement pursuant to which Qualifying
Facility " 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 in respect of each Qualifying CREST Shareholder,
Offer Entitlement " their entitlement (in addition to their
Open Offer Entitlement) to apply for Open
Offer Shares pursuant to the Excess Application
Facility, which is conditional on them taking
up their Open Offer
Entitlement in full;
" Excess Shares " Ordinary 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 13 October 2020;
"Existing Ordinary Shares" the 128,083,494 Ordinary Shares in issue
at the date of this document;
"FCA" the Financial Conduct Authority of the United
Kingdom;
"Form of Proxy" the form of proxy for use by Shareholders
in relation to the General Meeting, enclosed
with this document;
"FSMA" the Financial Services and Markets Act 2000
(as amended);
"Fundraising" the Placing and the Open Offer;
"General Meeting" or the General Meeting of the Company convened
"GM" for 11:00am on 29 October 2020 or any adjournment
thereof, notice of which is set out at the
end of this document;
"Group" the Company and its subsidiaries (as defined
in the Act);
"Issue Price" GBP0.16 per New Ordinary Share;
"ITA" UK Income Tax Act 2007;
"London Stock Exchange" London Stock Exchange plc;
"Money Laundering Regulations" the money laundering and terrorist financing
provisions of the Criminal Justice Act 1993,
the Terrorism Act 2000, the Proceeds of
Crime Act 2002, the Terrorism Act 2006 and
the Money Laundering Regulations 2007, the
Money Laundering, Terrorist Financing and
Transfer of Funds (Information on the Payer)
Regulations 2017;
"New Ordinary Shares" the Placing Shares and/or the Open Offer
Shares (as the context permits);
"Notice of General Meeting" the notice convening the General Meeting
as set out at the end of this document;
"Open Offer Shares" 3,123,988 new Ordinary Shares being made
available to Qualifying Shareholders pursuant
to the Open Offer;
" Open Offer " the conditional invitation made to Qualifying
Shareholders to apply to subscribe for Open
Offer Shares at the Issue Price on the terms
and subject to the conditions set out in
Part III of this document and, where relevant,
in the Application Form;
"Open Offer Entitlement" the pro rata entitlement of a Qualifying
Shareholder, pursuant to the Open Offer,
to subscribe for 1 Open Offer Shares for
every 41 Existing Ordinary Shares registered
in their name as at the Record Date;
" Official List " the Official List of the FCA;
"Ordinary Shares" the ordinary shares of 1 penny each in the
capital of the Company in issue from time
to time;
"Overseas Shareholder" a Shareholder with a registered address
outside the United Kingdom;
"Placees" subscribers for the Placing Shares;
"Placing Agreement" the conditional placing agreement entered
into between the Company and Cenkos Securities
in respect of the Placing, dated 13 October
, as described in this document;
"Placing" the proposed placing by Cenkos Securities
(as agent for the Company) of the Placing
Shares with certain institutional investors
and existing Shareholders, otherwise than
on a pre-emptive basis, at the Issue Price
on the terms of the Placing Agreement;
"Placing Shares" 25,000,000 new Ordinary Shares the subject
of the Placing;
"Proposals" the Placing and the Open Offer and other
matters contained in this document;
"Prospectus Regulation" EU Prospectus Regulation 2107/1129;
"Prospectus Rules" the rules made by the FCA under Part VI
of FSMA in relation to offers of transferable
securities to the public and admission of
transferable securities to trading on a
regulated market;
"Qualifying CREST Shareholders" Qualifying Shareholders holding Existing
Ordinary Shares in a CREST account;
"Qualifying Holding" means a qualifying holding for the purposes
of Chapter 4 of Part 6 of ITA;
"Qualifying Non-CREST Qualifying Shareholders holding Existing
Shareholders" 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 the United States of America or any other
Restricted Jurisdiction);
"Receiving Agents" or Share Registrars Limited, the Company's
"Registrar" registrar and receiving agent;
"Record Date" 6:00pm on 9 October 2020 being the latest
time by which transfers of Existing Ordinary
Shares must be received for registration
by the Company in order to allow transferees
to be recognised as Qualifying Shareholders;
"Regulatory Information has the meaning given to it in the AIM Rules;
Service"
"Resolutions" the resolutions to be proposed at the General
Meeting, the full text of which are set
out in the Notice of General Meeting;
"Restricted Jurisdiction" United States of America, Canada, Australia,
Japan, New Zealand and the Republic of South
Africa and any other jurisdiction where
the extension or availability of the Fundraising
would breach any applicable law;
"Securities Act" US Securities Act of 1933 (as amended);
"Shareholders" the holders of Existing Ordinary Shares,
and the term "Shareholder" shall be construed
accordingly;
"stock account" an account within a member account in CREST
to which a holding of a particular share
or other security in CREST is credited;
"uncerti cated" or "uncerti means recorded on the relevant register
cated form" or other record of the share or other security
concerned as being held in uncerti cated
form in CREST, and title to which, by virtue
of the CREST Regulations, may be transferred
by means of CREST;
"United Kingdom" or the United Kingdom of Great Britain and
"UK" Northern Ireland;
"USE" Unmatched Stock Event instructions;
"VCT" a company which is, or which is seeking
to become, approved as a venture capital
trust under the provisions of Part 6 of
the ITA ; and
"GBP" or "Pounds" UK pounds sterling, being the lawful currency
of the United Kingdom.
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END
IOEUOUURRWURAUA
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