Proposed Placing and Open Offer, Delisting & AQSE Admission, Capital Reorganisation and Board Appointments DGAP

OTAQ Plc (OTAQ)
Proposed Placing and Open Offer, Delisting & AQSE Admission, Capital Reorganisation and Board Appointments

12-Oct-2022 / 07:00 GMT/BST
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The issuer is solely responsible for the content of this announcement.


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THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. NOTHING HEREIN SHALL BE CONSTRUED AS AN OFFER, INVITATION OR RECOMMENDATION TO PURCHASE, SELL OR SUBSCRIBE FOR ANY SECURITIES IN ANY JURISDICTION AND NEITHER THIS ANNOUNCEMENT NOR ANYTHING CONTAINED HEREIN SHALL FORM THE BASIS OF OR BE RELIED UPON IN CONNECTION WITH, OR ACT AS AN INDUCEMENT TO ENTER INTO, ANY INVESTMENT ACTIVITY.

 

ANY DECISION TO PURCHASE, SUBSCRIBE FOR, OTHERWISE ACQUIRE, SELL OR OTHERWISE DISPOSE OF ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT MUST BE MADE SOLELY ON THE BASIS OF THE INFORMATION THAT IS CONTAINED IN AND INCORPORATED BY REFERENCE INTO THE CIRCULAR TO BE PUBLISHED BY THE COMPANY LATER TODAY. THE CIRCULAR, WHEN PUBLISHED, WILL BE AVAILABLE, SUBJECT TO CERTAIN EXCEPTIONS, ON THE COMPANY'S WEBSITE, WWW.OTAQ.COM.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018), AS AMENDED BY REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

 

12 October 2022

 

OTAQ plc

("OTAQ", the "Company" or the "Group")

 

Proposed Placing and Open Offer, Delisting & AQSE Admission, Capital Reorganisation

and

Board Appointments

 

OTAQ, a highly innovative technology company targeting the aquaculture, geotracking and offshore markets, is pleased to announce that it has raised £2.00 million by way of a firm placing of 50,000,000 New Ordinary Shares at the Issue Price of 4 pence per share. The Company also announces that Shareholders are to be offered the opportunity to participate in an Open Offer at the same Issue Price all conditional, inter alia, upon the approval of Shareholders at a forthcoming General Meeting.

 

The Proposals today announced comprise:

 

  • a Fundraising to raise gross proceeds of up to £3.60 million as described below

 

  • the cancellation of the Company’s listing to the Official List and application for the admission of the New Ordinary Shares to trading on the Access Segment of the AQSE Growth Market

 

  • a Capital Reorganisation to reduce the nominal value of the Existing Share Capital of the Company from 15 pence for each Existing Ordinary Share to 1 penny for each New Ordinary Share, conditional on AQSE Admission

 

  • the appointment to the Board of Harald Rotsch as Chief Technology Officer and Giles Clifford as Non-Executive Director

 

In each case, the Proposals are subject to the passing of the Resolutions at the General Meeting and are conditional on AQSE Admission. A Circular, which will provide further details of the Proposals and include a notice convening the General Meeting, is expected to be sent to Shareholders later today and will be available on the Company's website at www.otaq.com.

 

Dowgate Capital Limited ("Dowgate") is acting as Financial Adviser, proposed AQSE Corporate Adviser and Broker in connection with the Proposals. Dowgate is not underwriting the Fundraising.

 

Fundraising

 

The Company is seeking to raise gross proceeds of up to £3.60 million pursuant to a Placing to institutional and other investors, an Open Offer to Qualifying Shareholders and a Broker Option, all at an Issue Price of 4 pence per New Ordinary Share.

 

OTAQ will use the net proceeds of the Fundraising to strengthen the balance sheet and support the Group through its planned next stage of growth, further developing its portfolio of innovative technologies targeting the global aquaculture, geotracking and offshore markets. The Company already has a strong portfolio of products and is pursuing organic and acquisitive growth opportunities that will enhance reach and underpin further revenue growth as the Company progresses towards profitability.

The Company has raised gross proceeds of £2.00 million through a firm placing of 50,000,000 Placing Shares and has also made available to Dowgate up to a further 10,000,000 Placing Shares via a Broker Option, which may be allocated by Dowgate and at its discretion, to prospective investors who wish to subscribe for New Ordinary Shares on the same terms as under the firm placing. Full exercise of the Broker Option would raise additional gross proceeds of £0.40 million. The Open Offer to raise gross proceeds of up to £1.20 million will provide Qualifying Shareholders an opportunity to subscribe for up to an aggregate of 30,206,441 Open Offer Shares on the basis of:

 

4 (Four) Open Offer Shares for every 5 (Five) Existing Ordinary Shares,

 

held by the Shareholder on 11 October 2022, being the Record Date.

 

Additionally, subscribers for New Ordinary Shares pursuant to the Placing (including under the Broker Option) and the Open Offer will receive:

 

1 (One) Placing Warrant for every 4 (Four) New Ordinary Shares,

 

exercisable at 12 pence per New Ordinary Share and expiring on the second anniversary of the date of AQSE Admission.

 

Certain Directors have indicated they intend to take up their entitlement under the Open Offer, and also intend to apply for further shares through the Excess Application Facility (but conditional upon satisfaction of the conditions related to the Open Offer). The total proceeds of such participation, should the Directors receive their application under the Excess Application Facility in full, will amount to approximately £76,000. Further details are set out below.

 

The Issue Price of 4 pence represents a discount of 57.9 per cent. to the closing mid market price of 9.5 pence per ordinary share on 11 October 2022, the last practicable date prior to the announcement of the Open Offer. Further details of the Fundraising are set out below.

 

Delisting & AQSE Admission

 

Further to the Fundraising, the Company intends to cancel its listing to the standard segment of the Official List and trading on the main market for listed securities of London Stock Exchange and has applied to Aquis Stock Exchange for the Enlarged Share Capital to be listed on the Access Segment of the AQSE Growth Market. Pursuant to Listing Rule 5.2.8, the Company is required to give at least 20 business days' notice of the intended Delisting. Therefore, it is expected that admission of the Existing Ordinary Shares will become effective and that dealings in the New Ordinary Shares will commence on the AQSE Growth Market at 8.00 a.m. on 9 November 2022 and would occur simultaneously with the Delisting becoming effective. Further details of the Delisting & AQSE Admission are set out below.

 

Capital Reorganisation

 

The Company’s Existing Ordinary Shares have a nominal value of 15 pence per share. Under the Companies Act 2006, the Company is unable to issue new ordinary shares at less than the nominal value of those ordinary shares. Given that the Issue Price is 4 pence per share, the Company is therefore required to undertake a Capital Reorganisation to reduce the nominal value of the Existing Ordinary Shares from 15 pence per share to 1 penny per share. The New Ordinary Shares issued pursuant to the Fundraising will accordingly have a nominal value of 1 penny per share. Further details of the Capital Reorganisation are set out below.

 

Board Appointments

 

The Board is pleased to appoint to the Board Harald (Harry) Rotsch as Chief Technology Officer and Giles Clifford as Non-Executive Director. Further details of the Board appointments are set out below.

 

Set out below in Appendix I is an adapted extract from the draft Circular that is proposed to be sent to Shareholders later today. The final form Circular, containing the terms and conditions of the Open Offer and Notice of General Meeting is expected to be sent to Shareholders and published on the Company's website later today.

 

Capitalised terms not otherwise defined in the text of this announcement are defined in Appendix III and the expected timetable of the principal events is set out in Appendix II.

 

 

Phil Newby, Chief Executive Officer of OTAQ, said:

“Through proprietary engineering and via acquisition, OTAQ has created a skill base and leading portfolio of products with significant growth potential.  We see opportunities for these technologies within the global aquaculture, geotracking and offshore sectors where applied innovation gives significant safety, productivity, welfare and competitive advantage opportunities to customers.

“These three target sectors of aquaculture, geotracking and offshore have shared characteristics to enable technology transfer and access to a global customer base which has very exciting potential.

“With a strengthened Board and balance sheet we look forward to building a profitable and cash generative business.”

 

Enquiries

 

OTAQ plc

Via Walbrook

Alex Hambro, Non-Executive Chairman

 

Phil Newby, Chief Executive Officer

 

Matt Enright, Chief Financial Officer

 

 

 

Dowgate Capital Limited – Financial Adviser, AQSE Corporate Adviser & Broker

+44 (0)20 3903 7715

David Poutney / James Serjeant

 

Russell Cook / Nicholas Chambers

 

 

 

Walbrook PR Limited - PR

+44 (0)20 7933 8780 or

OTAQ@walbrookpr.com

Tom Cooper / Nick Rome

 07971221972 or 07748325236

     

 

 

 

Appendix I - Extracts from the Circular

 

Introduction

The Company has today announced that it is seeking to raise up to approximately £3.60 million to strengthen its balance sheet and support the Company through its planned next stage of growth.

 

The Company has raised £2.00 million before expenses through a firm placing of 50,000,000 New Ordinary Shares at the Issue Price of 4 pence per share. The Company has also announced that it is offering Qualifying Shareholders the opportunity (subject to satisfaction of the Conditions) to subscribe for up to a further 30,206,441 New Ordinary Shares at the Issue Price by offering the opportunity to participate in the Open Offer on the basis of:

 

4 (Four) Open Offer Shares for every 5 (Five) Existing Ordinary Shares then held

 

The Fundraising is conditional upon (a) completion of the Capital Reorganisation (details of which are set out below); (b) passing of the Resolutions (details of which are set out below); (c) the Placing becoming unconditional in all respects; and (d) completion of the Delisting and the AQSE Admission becoming effective by 8.00 a.m. on 9 November 2022 (or such later time and date not being later than 8.00 a.m. on 22 November 2022 as the Company may decide) (together the “Conditions”). If fully subscribed, the Open Offer will raise a further approximately £1.20 million before expenses. Qualifying Shareholders are able to apply for more than their entitlement under the Open Offer and to the extent that other Shareholders do not take up their Basic Entitlement under the Open Offer, then Excess Applications will be satisfied in full or in part, subject to the maximum issue of 30,206,441 New Ordinary Shares available under the Open Offer.

 

The Company has also made available to Dowgate up to a further 10,000,000 New Ordinary Shares through a Broker Option, which may be allocated by Dowgate to investors who wish to subscribe for New Ordinary Shares on the same terms as the Placing Shares which have been placed firm under the Placing and Open Offer, if further demand requires. Full exercise of the Broker Option would raise an additional £0.40 million before expenses.

 

Additionally, investors subscribing for New Ordinary Shares under the Fundraising will also receive 1 (One) Warrant for every 4 (Four) New Ordinary Shares subscribed for (but rounding down to the nearest whole number of Warrants), each Warrant entitling the holder to subscribe for one New Ordinary Share at a price of 12 pence per share up to the second anniversary of the date of AQSE Admission.

 

Further details of the Placing, Open Offer and Broker Option are set out in below.

 

The Company will require further share authorities to allot the Placing Shares and Open Offer Shares for cash, and to grant the Warrants, and to disapply pre-emption rights under sections 551 and 571 of the Act.

 

Accordingly, the Fundraising is conditional, inter alia on the passing of the Resolutions at the General Meeting to be held at 11.00 a.m. on 7 November 2022, a summary of which is set out below.

 

The Company’s Existing Ordinary Shares have a nominal value of 15 pence per share. Under the Companies Act the Company is unable to issue new shares at less than the nominal value of those shares. Given that the Issue Price is set at 4 pence per share, the Company is required to undertake a Capital Reorganisation, so that the nominal value of each New Ordinary Share to be issued pursuant to the Open Offer and Placing will be less than the Issue Price, details of which are set out below. The Capital Reorganisation is also subject to the passing of the Resolutions at the General Meeting and is conditional upon the AQSE Admission.

 

The Company has also today announced that it will delist its Existing Ordinary Shares from the Official List and cancel the trading of its Existing Ordinary Shares on the Main Market and that it has applied to Aquis Stock Exchange for the Enlarged Share Capital to be listed on the Access Segment of the AQSE Growth Market. The Delisting and the AQSE Admission are expected to take place on 9 November 2022. Details of such Delisting and the AQSE Admission are set out below.

 

Conditional on AQSE Admission, Harald Rotsch and Giles Clifford will join the Board as Chief Technology Officer and a Non-Executive Director, respectively. Further details are set out below.

 

Background

OTAQ listed on the standard segment of the Official List and was admitted to trading on the main market of the London Stock Exchange in March 2020 following the reverse takeover of Hertsford Capital plc. Since flotation, it has since completed the acquisition of the business and assets of ROS Technology Limited (“ROS Technology”) and two strategic equity investments into Blue Lion Labs Limited (“Blue Lion Labs”) and Minnowtech LLC (“Minnowtech”), broadening the Company’s operations beyond its core aquaculture activities. The Company’s prime focus remains the provision of technology services to the aquaculture sector, which includes the production and sale of acoustic deterrent devices (“ADDs”) primarily for the fish farming sector, as well as technologies to support shrimp farming and to monitor and manage water quality more widely across the sector. Outside of aquaculture, OTAQ has developed new innovative applications for its technologies including wider ocean monitoring and communication operations, primarily for the offshore energy sector, and geotracking device technologies with a wide range of potential work-safety and sports applications.

 

As previously announced, the deployment of the Company’s ADD product, which provides a deterrent to seals and sea lions and reduces attacks on marine fish farming sites, into the UK market has been suspended following the announcement of the Marine Scotland Review (defined below) and the subsequent impact on ADD revenues resulting from the Group’s key customers giving notice on ADDs operating in Scotland, required the Board to take mitigating actions which necessitated the commencement of a reorientation of the Company’s operations. The Company does continue to deploy its ADD product to certain customers outside the UK. Accordingly, the results for the year ended 31 March 2022 reflected a mixed outcome for the Group, characterised by a significant upswing in activity for the Offshore business (formerly called the Offshore and Connectors business) and encouraging growth in activity and commercial gains within the Geotracking Devices business (formerly called the Technology and R&D division), offset by disruption to the ADD business.

 

The Board has concluded that the Group should refocus away from the ADD business and instead work hard to commercialise its strong pipeline of new products. Initial feedback on the new product offering has been positive, and the Board is focused on building a profitable and cash generative business by concentrating on what it now views as its core growth business activities, being the supply of the key hardware in Minnowtech’s shrimp biomass solution, plankton detection, water quality monitoring and geotracking devices. However, in order to complete the reorientation, the Group is required to undertake a further refinancing. The Circular sets out the steps that the Group is taking, including the Fundraising and the proposed move from the Official List to the AQSE Growth Market and related matters, in order to give the Group and all stakeholders a committed and stable foundation upon which to execute the growth initiatives.

 

These matters will require the approval of Shareholders and this is explained in full below. A General Meeting is to be held at 11.00 a.m. on 7 November 2022 for the purpose of seeking such approvals. A notice convening the General Meeting, at which the Resolutions will be proposed, is set out in the Circular which is expected to be sent to Shareholders and published on the Company's website later today.

 

Future Strategy

Through three recent strategic investments and additional multi-year supply agreements, the Group is developing adjacent technologies to take advantage of a number of growth initiatives that will significantly broaden the Group’s product portfolio in the global marine aquaculture sector and facilitate entry and growth into the geotracking devices sector. Consequently, OTAQ is refocusing its operations to become a highly innovative technology company with three divisions that operate in various geographies globally: Aquaculture, Geotracking Devices and Offshore.

 

Aquaculture

Shrimp Biomass

In conjunction with Minnowtech, OTAQ has completed the development of an innovative and custom-designed sonar technology that scans shrimp in ponds with the results being used to inform statistical predictive algorithms which in turn produce highly accurate pond count results for shrimp farmers. As far as the Company and Minnowtech are aware, this is the only system currently in development using this method which has been designed to estimate total shrimp count in each pond using in situ measurement producing a critical data set for shrimp farmers that would otherwise rely on time-consuming and error-prone methods. Trial results have been highly positive with count accuracy believed to be in excess of 90 per cent. on average meaning shrimp farmers have significantly better information relating to feed strategies and forecasting of future stock requirements.

 

To date, 117 prototype units have been sold to Minnowtech for trials with potential customers in shrimp ponds in key target markets. Minnowtech is viewed as a key growth area with an initial estimated target market size of £24 million, based on the number estimated shrimp ponds in target markets.

 

Live Plankton Analysis

Through its collaboration with Blue Lion Labs in Canada, the Group have developed AI software which monitors water quality by identifying phytoplankton which enables farmers to take immediate mitigating actions as required. Research and development has centred on accelerating the commercialisation of the phytoplankton detection technology with field trials now having commenced. Phytoplankton can lead to “harmful algal blooms”, which is a growing issue and leads to major disease challenges for finfish farmers generally. It is estimated the global aquaculture industry suffers annual losses in the billions due to events such as harmful algal blooms. Early detection of this problem will not only allow farmers to deploy their defence systems earlier but also inform feeding and harvesting decisions to markedly reduce the losses and improve overall finfish welfare.

 

To date, 14 development systems have been deployed at customer sites in Scotland, Chile and Ireland with prototype versions are expected to be installed in January 2023. The Board is confident that these trial sites will convert to commercial contracts with the initial target market estimated to be in the region of £24 million in the Company’s target markets.

 

Water Quality Monitoring

Monitoring the quality of finfish cage water is an important factor in increasing yields and improving fish welfare. An additional key aquaculture product for the Group, the water quality monitoring solution has been designed and developed by a third party. OTAQ is close to finalising an exclusive supply agreement with the third party to white label the product and sell it into its target markets. This solution is designed to report and record oxygen levels, salinity and temperature through a dashboard interface helping finfish farmers monitor fish welfare and inform decisions around improving fish health. In Chile it is a regulatory requirement to carry out water quality monitoring and reporting.

 

Following early commercial success in Chile and Scotland, the Board believes there is an initial estimated potential market of £32 million in target territories based on a rental model.

 

Acoustic Deterrent Device

Historically the Company’s main aquaculture sales have been derived from its ADD product (branded as Sealfence), which uses acoustic technology to deter seal and sea lion predators from fish farming sites. OTAQ has delivered and installed over 1,300 ADD devices worldwide to date. However, in 2020, Marine Scotland announced a review of ADD use in connection with the operation of the European Protected Species (“EPS”) regulations related to the use of ADDs within Scottish waters (the “Marine Scotland Review”). The Company previously announced that the trial programme for the Company’s ADDs with Marine Scotland has concluded but the Board now believe it is unlikely that fish farmers will make applications for EPS licences required to use its ADDs. For this reason, the Group is not actively pursuing the ADD market in Scotland.

 

Nevertheless, there remains opportunities in Chile, Australia, Canada and Norway, and the Group continues to make progress on these projects, including additional ADD deployment in Chile and ADD trials in Australia. The Board is aware that the regulatory position relating to use of ADDs in Chile is currently being assessed and is working with the Chilean regulator for fisheries and aquaculture, in assisting them in understanding the risk of ADD use to predators and marine mammals in the vicinity of fish farms.

 

The Group is now demonstrably fulfilling its previously stated intention to deploy a range of sophisticated products designed to overcome many production and environmental challenges in the aquaculture industry. The next phase of development for these solutions will be the creation of common databases and the development of management information reporting and dashboards to help improve customer communication and productivity.

 

Geotracking Devices

Following the acquisition of ROS Technology’s trade and assets in November 2020, the Group has developed highly accurate personnel and asset tracking products for use in sports tracking events and the railway industry.

 

Railway personnel and asset safety

Through engagement with rail design and safety consultants, Track Tracker Limited (“Track Tracker”), the Group have designed and developed a product that utilises Track Tracker’s integrated geofencing software to provide reliable, continuous and precise positional accuracy tracking of maintenance personnel and railway assets in use in busy, hazardous, and often complex on-track and trackside locations. The Company recently announced its first contract for the supply of an initial batch of 40 devices with further orders expected following successful on-site operations.

The Board believes there to be an estimated initial target market size of £13 million through its relationship with Track Tracker and there have been initial positive enquiries including issuance of a product acceptance certificate of the personnel safety device.

 

Sports trackers

OTAQ’s high precision sports tracking technology was fully commercialised in 2021 and is viewed as more accessible and cost-effective due to it being deployable without the need for costly additional infrastructure compared to the alternatives on the market. The Group is continuing to broaden the applications for this technology through the development of prototypes and the completion of successful field trials where recently over 500 trackers were deployed for a major motorcycling event.

 

The Board expects further significant orders of its sports tracking devices through its ongoing relationship with NTT Limited (“NTT”). The technology is generating high interest and will have a wider roll out to similar racing events, providing increased visibility and live-streaming of competitor positioning.

 

The Board are also of the view that there are potential further applications and market opportunities for the technology within the seafood industry, particularly in relation to the fishing industry in Chile.

 

Offshore

The Group’s strategy also incorporates the development of new products for deployment in the energy support services sector. The development of new technologies in this division permits cross-deployment of skills and technologies into the aquaculture arena which the Group is now beginning to exploit. OTAQ is continuously developing and improving its products using its specialist mechanical, electronic and software engineers who have decades of experience in bringing underwater technology products to market. The Group produces a range of marine technology products for offshore industries, supplying customers around the world including subsea oil and gas, remotely operated vehicle operations, commercial diving and oceanographic research, with growth opportunities in the offshore renewables sector. OTAQ specialises in subsea leak and cement detection, laser measurement systems, underwater imagery and telemetry solutions, as well as subsea survey solutions. The Group has completed development and sale of two Lander products, intended for use with seabed geophysical surveys, and it is expected further Lander sales will be made.

 

The Company’s Oceansense leak detection systems have a global reputation as the industry leading solution for fluorescence based underwater leak detection and have been deployed successfully on hundreds of contracts. OTAQ’s Dragonfish laser measurement systems is one of the most accurate underwater precision laser measurement systems of its type available. OTAQ also has significant experience in the design and manufacture of underwater connectors, penetrators and communication systems.

 

The Offshore business operates in international oil and gas markets with major customers including Expro and Amphenol for its underwater connectors products and Oceaneering, Technip and Subsea 7 for its OceanSense rental business, with the rental business remaining significantly cash generative.

 

When completed, the reorientation process aims to be the route through which OTAQ would become a simplified, profitable, and cash generative business. These are exciting times as the Group commences commercialisation of its strong pipeline of new products and opportunities by focusing on its core growth business activities, being the supply of the key hardware in Minnowtech’s shrimp biomass solution, plankton detection, water quality monitoring and geotracking devices in order to accelerate the growth into these large and attractive markets.

 

 

Current Trading and Outlook

The Board anticipates that the Group’s revenues for the year to 31 March 2023 will principally derive from the Offshore and ADD divisions until the Group’s new aquaculture and geotracking devices products have achieved significant levels of customer acquisition.

 

The Company expects first half revenue to be ahead of the same period last year with a positive EBITDA, compared to the H1 FY22 £0.2 million EBITDA loss.

 

The Company’s second half performance is dependent on new orders for its shrimp biomass sonars from Minnowtech and new orders from Track Tracker and NTT for its geotracking devices. Discussions with Minnowtech, NTT and Track Tracker have been held and the Company is optimistic new orders will be received. The Company is also optimistic that current trials of its live plankton analysis system at various sites with customers will develop and convert to commercial contracts in 2023.

 

 

Delisting and AQSE Admission

The Company’s Existing Ordinary Shares are listed on the Standard Segment of the Official List and were admitted to listing and to trading on the Main Market of the London Stock Exchange in March 2020. However, the Board recognises that, due to the Company’s reduced market capitalisation, the cost and complexity of that listing can no longer be justified. Accordingly, it is in the interests of Shareholders that the Company should apply to cancel its listing on the Official List and trading on the Main Market of its Existing Ordinary Shares and apply to Aquis Stock Exchange for the admission to trading of its New Ordinary Shares on the AQSE Growth Market. This may also have certain tax benefits for some investors.

 

The Board has carefully considered the position including the following:

 

  • the AQSE Growth Market is specifically designed for smaller companies, with a less onerous regulatory regime, and has an established reputation with investors and is an internationally recognised market;
  • the AQSE Growth Market should offer greater flexibility with regard to certain corporate transactions, enabling the Company to agree and execute certain transactions more quickly and cost effectively than a company on the Official List; and
  • companies whose shares trade on the AQSE Growth Market are deemed to be unquoted for certain purposes of UK taxation, including possibly being eligible for relief from inheritance tax. Furthermore, stamp duty is not payable on the transfer of shares that are traded on the AQSE Growth Market and not listed on any other market.

 

Accordingly, the Board considers that the AQSE Growth Market is a more appropriate market for the Company at this time and accordingly, the Company will apply for the cancellation of its listing on the standard listing segment of the Official List on 12 October 2022. Pursuant to Listing Rule 5.2.8, the Company is required to give at least 20 business days’ notice of the intended Delisting. Consequently, it is expected that admission of the Existing Ordinary Shares will become effective and that dealings of the New Ordinary Shares will commence on the AQSE Growth Market at 8.00 a.m. on 9 November 2022 and would occur simultaneously with the Delisting becoming effective.

 

Further details of the consequences of the Delisting and the AQSE Admission are set out in Part II (Information on Delisting and AQSE Admission) of the Circular.

 

 

Capital Reorganisation

The Company’s Existing Ordinary Shares are presently trading on the Main Market at a price which is below the nominal value of the Existing Ordinary Shares. The Companies Act prohibits a company from issuing shares at a discount to the nominal or par value of its shares. Therefore, in order to ensure that the Placing and Open Offer can be carried out and the Broker Option exercised, it is necessary to effect the Capital Reorganisation to reduce the nominal value of the Company’s Existing Ordinary Shares.

 

The Directors therefore propose to effect the Capital Reorganisation on the following basis:

 

  • each of the Existing Ordinary Shares of 15 pence each will be subdivided into and reclassified as one New Ordinary Share and one Deferred Share;
  • each New Ordinary Share will be an ordinary share in the capital of the Company with a nominal value of one (1) pence and having those rights set out in the Amended Articles (as defined below);
  • each Deferred Share will be a deferred share in the capital of the Company with a nominal value of fourteen (14) pence and having those rights set out in the Amended Articles. The intention is that Deferred Shares would be cancelled in due course following a court approved reduction of capital or other means, if available; and
  • the Company’s articles of association require to be amended to include certain provisions including relating to the Deferred Shares (the “Amended Articles”).

 

The Amended Articles

The proposed Capital Reorganisation will necessitate certain alterations to the Company’s existing Articles of Association (“Existing Articles”). Alteration of the Existing Articles is proposed as Resolution 2 and the alterations, including establishing the Deferred Shares and setting out the limited rights proposed for the Deferred Shares, are reflected in the changes to the Existing Articles.

 

The New Ordinary Shares created upon implementation of the Capital Reorganisation will have the same rights as the Existing Ordinary Shares including voting, dividend, return of capital and other rights, save that their nominal value will be £0.01 per share as opposed to £0.15 per share. Existing Ordinary Share certificates will remain valid following the Capital Reorganisation.

 

The Deferred Shares will not have any voting rights and will not carry any entitlement to attend general meetings of the Company; nor will they be admitted to either the Main Market, the AQSE Growth Market or any other market. They will carry only a right to participate in any return of capital to the extent of £0.01 but only after shareholders have received £1,000,000 per New Ordinary Share. In addition, they will not carry any right to participate in any dividend or other distribution. In each case a payment, on a return of capital, to any one holder of Deferred Shares shall satisfy the payment required. The Company will be authorised at any time to effect a transfer of the Deferred Shares without reference to the holders thereof and for no consideration pursuant to and in accordance with the Companies Act. Accordingly, the Deferred Shares will, for all practical purposes, be valueless and it is the Board’s intention, at an appropriate time, to have the Deferred Shares cancelled, whether through an application to the Companies Court or otherwise in accordance with the Companies Act. No share certificates will be issued for the Deferred Shares.

 

The draft Amended Articles proposed, along with a set highlighting the alterations and comparing the Amended Articles with the Existing Articles, are available for inspection by Shareholders until the conclusion of the General Meeting on the Company’s website, www.otaq.com.

 

In summary, it is proposed that each Existing Ordinary Share of 15 pence in the capital of the Company will be subdivided and converted into 1 New Ordinary Share and 1 Deferred Share. This will result in 37,758,052 New Ordinary Shares and 37,758,052 Deferred Shares being in issue immediately following the Capital Reorganisation but before the issue of New Ordinary Shares pursuant to the Placing, Open Offer and Broker Option.

 

 

The Placing, Open Offer, Broker Option and Warrants
 

Placing and Open Offer

The Company is proposing to raise, assuming the satisfaction of the Conditions and the issue of the maximum number of New Ordinary Shares pursuant to the Placing (including the Broker Option as detailed below) and Open Offer, gross proceeds of approximately £3.60 million (before expenses) by the issue of up to 90,206,441 New Ordinary Shares at the Issue Price, being 4 pence per New Ordinary Share. The New Ordinary Shares to be issued pursuant to the Placing do not qualify for participation in the Open Offer.

 

Subject to satisfaction of the conditions set out below and in Part III of the Circular, Qualifying Shareholders on the register of members at 6.00 p.m. on 11 October 2022 are being given the opportunity to subscribe for Open Offer Shares at the Issue Price pro rata to their holdings of Existing Ordinary Shares on the Record Date to raise up to an amount of approximately £1.20 million (before expenses) on the basis of:

 

4 (Four) Open Offer Shares for every 5 (Five) Existing Ordinary Shares then held

 

Those Shareholders who wish to apply for additional shares may do so through the Excess Application Facility, details of which are set out in Part III of the Circular.

 

The Excess Application Facility enables Qualifying Shareholders to apply for any number of Open Offer Shares, provided they have taken up their Basic Entitlement in full, up to the total number of Open Offer Shares being offered (less their Basic Entitlement).

 

The Placing Shares and Open Offer Shares, when issued fully paid, will rank pari passu in all respects with the New Ordinary Shares resulting from the Capital Reorganisation of the Existing Ordinary Shares including the right to receive all dividends and other distributions declared in respect of such New Ordinary Shares by reference to a record date falling after the date of issue of the Placing Shares and Open Offer Shares.

 

Application is being made for the New Ordinary Shares to be admitted to trading on the AQSE Growth Market and it is expected that the AQSE Admission will become effective and dealings in the New Ordinary Shares will commence on 9 November 2022.

 

The Placing and the Open Offer are conditional upon Delisting and AQSE Admission becoming effective by 8.00 a.m. on 9 November 2022 or such later time and date as the Company and Dowgate may agree, being no later than 8.00 a.m. on 22 November 2022. In the event that this condition is not satisfied by the requisite time, the Placing and the Open Offer will not proceed. In such circumstances, application monies will be returned at the applicant’s risk without payment of interest, as soon as practicable thereafter.

 

Fractions of Open Offer Shares will not be allotted; instead, each Qualifying Shareholder’s entitlement under the Open Offer will be rounded down to the nearest whole number of Open Offer Shares. Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating the Open Offer Entitlements.

 

The latest time for applications under the Open Offer to be received is 11.00 a.m. on 28 October 2022. The procedure for application and payment depends on whether, at the time at which application and payment is made, you have an Application Form in respect of your entitlement under the Open Offer 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 (Terms and Conditions of the Open Offer) of the Circular.

 

Broker Option

To deal with potential additional demand for New Ordinary Shares under the Fundraising, the Company has granted the Broker Option to Dowgate to enable it to fulfil requests to participate in the Placing received during the period of 12 trading days following the date of the Circular. The Broker Option is exercisable by Dowgate any number of times during that period in its absolute discretion, and there is no obligation on Dowgate to exercise the Broker Option or to seek to procure subscribers for any Broker Option Shares pursuant to the Broker Option.

 

Any Broker Option Shares issued pursuant to the exercise of the Broker Option will be issued on the same terms and conditions as the Placing Shares which have been firm placed and will, if the Broker Option is exercised in full comprise up to 16.7 per cent. of the total number of Placing Shares.

 

The Placing, Open Offer and Broker Option combined will, if all the Open Offer Shares are subscribed for and the Broker Option is exercised in full, result in the issue, in aggregate, of 90,206,441 New Ordinary Shares, representing approximately 70.5 per cent. of the Enlarged Share Capital.

 

Warrants

Subject to the Resolutions being passed at the General Meeting, investors subscribing for New Ordinary Shares under the Fundraising will also receive 1 One Warrant for every 4 Four New Ordinary Shares subscribed for (rounding down to the nearest whole number of Warrants). Each Warrant will entitle the holder to subscribe for one New Ordinary Share and will be exercisable at a price of 12 pence per share on quarterly exercise dates. and expire on the second anniversary of AQSE Admission. The Warrants will be issued on the terms of a warrant instrument executed by the Company and will be non-transferable, except in limited circumstances, and be unlisted. In aggregate, if the Placing (including the Broker Option) and Open Offer are taken up and exercised in full, up to 22,551,610 Warrants will be granted on AQSE Admission.

 

 

Use of Proceeds

Dowgate is acting as financial adviser to the Company in relation to the Open Offer and Placing and as sole broker in connection with the Placing. The Placing is subject to the conditions and termination rights set out in the Open Offer and Placing Agreement between the Company and Dowgate.

 

The Company intends to use the proceeds of the Placing and Open Offer for:

 

  • working capital;
  • growth capital;
  • the completion of key development projects;
  • the repayment of liabilities in line with agreed terms; and
  • the fulfilment of an onerous ADD supply contract;

 

The Directors will continue to assess suitable available funding options for the Company going forward for the purposes of bolstering the Company’s working capital position and securing the funding necessary to pursue its corporate strategy.

 

 

Directors’ Participation in the Placing

Certain Directors have agreed to subscribe for New Ordinary Shares under the Placing and indicated they intend to take up their entitlement under the Open Offer, and in certain cases to apply for further shares through the Excess Application Facility (but in each case conditional upon satisfaction of the conditions to the Placing and Open Offer). Following completion of the Placing and assuming that the Open Offer Shares and Broker Option Shares have been subscribed for in full, the interests of the Directors in the issued and to be issued share capital of the Company are, as shown below:

 

 

Number of Existing Ordinary Shares

 Percentage of Existing Ordinary Share Capital

 Number of Open Offer Shares Subscribed for (1)

Number of New Ordinary Shares following AQSE Admission

 Percentage of Enlarged Share Capital following AQSE Admission (2)

Number of Warrants granted (1)

Alex Hambro

312,273

0.83%

375,000

687,273

0.54%

93,750

Philip Newby(3)

869,820

2.30%

500,000

369,820

1.07%

125,000

Matt Enright

21,201

0.06%

-

21,201

0.02%

-

George Watt

210,910

0.56%

400,000

610,910

0.48%

100,000

Sarah Stoten

368,648

0.98%

625,000

993,648

0.78%

156,250

Malcolm Pye

-

-

-

-

-

-

 

(1) Assuming full allocation of New Ordinary Shares applied for under the Excess Application Facility

(2) Assuming full take up of all New Ordinary Shares available under the Open Offer and full exercise of the Broker Option

(3) Philip Newby’s beneficial holding includes 349,606 Existing Ordinary Shares held by his wife, Diane Newby

 

 

Related Party Transaction

As Euroblue Investments Limited (“Euroblue Investments”) holds approximately 15.8 per cent. of the Existing Ordinary Shares, Euroblue Investments is a related party of the Company pursuant to the AQSE Rules. Consequently, Euroblue Investments’ participation in the Placing, under which it has conditionally agreed to subscribe for 18,750,000 New Ordinary Shares at the Placing Price, constitutes a related party transaction for the purposes of Rule 4.6 of the AQSE Rules. The Directors, each of whom is independent of Euroblue Investments, having taken into account the proposed use of the proceeds of the Placing as described in section 8 of Part I of the Circular and having consulted with Dowgate, the Company’s proposed AQSE Corporate Adviser, and having exercised reasonable care, skill and diligence, unanimously consider that the terms of Euroblue Investments’ subscription for Placing Shares in the Placing is fair and reasonable as far as Shareholders are concerned. On Admission, and assuming full take up of all New Ordinary Shares available under the Open Offer and full exercise of the Broker Option, Euroblue Investments will hold 24,714,868 New Ordinary Shares, representing 19.32 per cent. of the Enlarged Share Capital, and be granted 6,178,717 Warrants.

 

 

Open Offer and Placing Agreement

On 12 October 2022, the Company entered into an open offer and placing agreement with Dowgate, under which Dowgate agreed to act as the Company’s financial adviser in respect of the Open Offer and Placing and to use its reasonable endeavours, as agent for the Company, to procure Placees for 50,000,000 Placing Shares at the Issue Price on the terms of the Open Offer and Placing Agreement. The Open Offer and Placing Agreement also provides for the Broker Option to be exercisable at the absolute discretion of Dowgate. The Open Offer and Placing Agreement contains warranties from the Company in favour of Dowgate in relation to, inter alia, the accuracy of the information in this and other documents and other matters relating to the Company and its business.

 

In addition, the Company has agreed to indemnify Dowgate in relation to certain liabilities it may incur in respect of the Open Offer and Placing. Dowgate has the right to terminate the Open Offer and Placing Agreement in certain circumstances, in particular in the event of a breach of the warranties or the occurrence of a force majeure event.

 

The Placing and Open Offer Agreement is conditional, inter alia, upon AQSE Admission having occurred no later than 8.00 a.m. on 9 November 2022 (or such later time and date as the Company and Dowgate may agree, not being later than 8.00 a.m. on 22 November 2022).

 

 

Board Appointments

The Board recognise that the management needs and requirements have evolved as the Group completes its reorientation of its operations to enable it to focus on the commercialisation of its strong pipeline of new products and opportunities.

 

Consequently, the Board will reinforce the executive team with the addition of relevant skills and expertise in the offshore environment, by, conditional upon AQSE Admission, appointing Harald Rotsch as Chief Technology Officer. Harald will provide valuable technical expertise and knowledge to further strengthen the growth strategy of the Group.

 

With a PhD in Physics, Harald has over 20 years’ engineering experience in the marine environment with responsibility for leading on design, installation and commissioning on over 30 offshore and marine related projects. Prior to joining the Group as Technical Director of OTAQ Offshore Limited (previously named MarineSense Limited) in 2019, he founded MarineSense in 2007 where he was Managing Director until the company was bought by the Company in 2018.

 

The following information relating to Harald Volker Rotsch is disclosed pursuant to Rule 4.9 of the AQSE Growth Market – Access Rulebook.

 

Current directorships and/or partnerships

OTAQ Offshore Limited

 

Former directorships and/or partnerships (within the last five years)

None

 

Harald holds 2,135,538 Existing Ordinary Shares in the Company.

 

Further, also conditional upon AQSE Admission, Giles Clifford has agreed to join the Board as a Non-Executive Director. A qualified accountant specialising in strategic commercial finance with significant experience in business strategy and improvement across various sectors, Giles will assist management in developing and planning the future growth plans for the Group, followed by resilient executable delivery.

 

Since 2015, Giles has been Director of Business Development for Brendon Street Investments Limited and, on behalf of the Wray Family Office, leads on various key projects and investment company holdings, providing review, insight and strategic commercial financial support. Previously, Giles was Finance Director of Warner Bros Studios Leavesden, and before that Head of Finance before moving to Head of Business Improvement at Wembley National Stadium Limited, where he was a key team member during the new stadium financing and build phase, and then running the new stadium for its first 8 years. Giles qualified as an accountant with the Chartered Institute of Public Financial Accounting in 1996.

 

The following information relating to Giles Timothy Clifford is disclosed pursuant to Rule 4.9 of the AQSE Growth Market – Access Rulebook.

 

Current directorships and/or partnerships

National Student Esports Limited

Benchmark Sport Holdings Limited

Tala Energy Limited

Totally Holding PTE Limited

 

Former directorships and/or partnerships (within the last five years)

Realsm Limited

Ainsly Limited

 

 

General Meeting

A notice convening a General Meeting of the Company to be held at 11.00 a.m. on 7 November 2022 at 8-3-4 Harpers Mill, South Road, White Cross, Lancaster, England LA1 4XF is set out at the end of the Circular. A Form of Proxy to be used in connection with the General Meeting is enclosed with the Circular when received in hard copy form and is available on the Company’s website at www.otaq.com.

 

The purpose of the General Meeting is to seek approval of Existing Shareholders for the Resolutions summarised below. The Fundraising is conditional upon the passing of the Resolutions as set out in the Notice of General Meeting and summarised below.

 

At the General Meeting, Resolutions will be proposed to the following effect:

 

Resolution 1

 which is conditional on the passing of the other Resolutions, is a special resolution to sub-divide and convert each Existing Ordinary Share of £0.15 into (i) one New Ordinary Share of £0.01 and (ii) one Deferred Share of £0.14;

 

Resolution 2

which is conditional on the passing of the other Resolutions, is a special resolution to alter the Articles of Association of the Company with effect from close of business on the dealing day immediately prior to AQSE Admission to:

  1. create the Deferred Shares;
  2. specify the rights attached to the Deferred Shares, including that the Deferred Shares:
    • will not have any voting rights;
    • will not carry any entitlement to attend general meetings of the Company;
    • will not carry any right to participate in any dividend or other distribution;
    • will carry only a right to participate in any return of capital to the extent of £0.01 but only after shareholders have received £1,000,000 per New Ordinary Share;
  3. specify that, on a return of capital, payment to any one holder of Deferred Shares shall satisfy the payment required; and
  4. specify that the Company will be authorised at any time to effect a transfer of the Deferred Shares without reference to the holders thereof and for no consideration pursuant to and in accordance with the Companies Act;

 

Accordingly, the Deferred Shares will, for all practical purposes, be valueless and it is the Board’s intention, at an appropriate time, to have the Deferred Shares cancelled, whether through an application to the Companies Court or otherwise in accordance with the Companies Act;

 

Resolution 3

which is conditional on the passing of the other Resolutions, is an ordinary resolution to authorise the Directors to allot shares and to grant rights to subscribe for and convert securities into shares up to an aggregate nominal value of £1,127,581, being equal to 112,758,100 New Ordinary Shares, pursuant to the Fundraising and grant of the Warrants; and

 

Resolution 4

which is conditional on the passing of the other Resolutions, is a special resolution to authorise the Directors to allot equity securities pursuant to the authority granted under Resolution 3 on a non pre-emptive basis.

 

Resolution 5

which is conditional on the passing of Resolution 1, is a special resolution to authorise the cancellation of the Deferred Shares created under Resolution 1, subject to Court approval.

 

The authorities and powers to allot shares and to grant rights to subscribe for and convert securities into shares on a non-pre-emptive basis to be granted pursuant to Resolutions 3 and 4 will expire on the date falling 6 months from the date of passing of those Resolutions (unless renewed, varied or revoked by the Company before that date) and will be in addition to the Directors’ authorities and powers to allot shares and to grant rights to subscribe for and convert securities into shares on a non pre-emptive basis granted at the Company’s last annual general meeting held on 30 September 2022.

 

Recommendation

The Board considers the Open Offer, the Placing and the Resolutions to be in the best interests of Shareholders as a whole. The Company has received irrevocable undertakings from each of the Directors of the Company and their connected parties to vote in favour of the Resolutions. Accordingly, the Directors unanimously recommends that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting as the Directors and their connected parties intend to do in respect of their shareholdings representing 4.72 per cent. of the Existing Ordinary Shares.

 

 

Appendix II - Expected Timetable of Principal Events

Record Date and time for entitlements under the Open Offer 6.00 p.m. on 11 October 2022

Announcement of the Open Offer and posting of 12 October 2022

the Circular, Proxy Form and Application Form

Existing Ordinary Shares marked ‘ex’ by London Stock Exchange 8.00 a.m. on 12 October 2022

Basic Entitlements and Excess Open Offer Entitlements credited to 8.00 a.m. on 13 October 2022

stock accounts in CREST of Qualifying CREST Shareholders

Recommended latest time for requesting withdrawal of 4.30 p.m. on 24 October 2022

Basic Entitlements and Excess Open Offer Entitlements from CREST

Latest time for depositing Basic Entitlements and 3.00 p.m. on 25 October 2022

Excess Open Offer Entitlements into CREST

Publication of AQSE Growth Market Appendix One announcement 25 October 2022

Latest time and date for splitting of Application Forms 3.00 p.m. on 26 October 2022

(to satisfy bona fide claims only)

Latest time and date for receipt of completed Application Forms and 11.00 a.m. on 28 October 2022

Payment in full under the Open Offer or settlement of

relevant CREST instructions (as appropriate)

Allocation of Excess Open Offer Shares to Qualifying Shareholders 28 October 2022

Results of Open Offer announced through an RIS 28 October 2022

Latest time and date for Broker Option Exercise 5.00 p.m. on 28 October 2022

Latest time and date for receipt of completed Forms of Proxy 11.00 a.m. on 3 November 2022

Latest time and date for receipt of CREST Proxy Instructions 11.00 a.m. on 3 November 2022

for the General Meeting

Record time for those Shareholders on the Register of Members 5.00 p.m. on 3 November 2022

entitled to attend or vote at the General Meeting

General Meeting 11.00 a.m. on 7 November 2022

Last day of dealings in the Existing Ordinary Shares on the Main Market 8 November 2022

Capital Reorganisation is effective after close of business on 8 November 2022

Cancellation of the listing of the Existing Ordinary Shares 8.00 a.m. on 9 November 2022

from the Official List becomes effective

Admission of, and commencement of dealings in, 8.00 a.m. on 9 November 2022

the Enlarged Share Capital on the AQSE Growth Market

Open Offer Shares and Placing Shares credited to CREST stock accounts 9 November 2022

Dispatch of definitive share certificates for Open Offer Shares and within 14 days of Admission

Placing Shares in certificated form together with Warrant certificates

Note:

If any of the details contained in the timetable above should change, the revised time and dates will be notified to Shareholders by means of a Regulatory Information Service announcement. All references to times and dates in the Circular are to time and dates in London, United Kingdom.

In order to subscribe for Open Offer Shares under the Open Offer, Qualifying Shareholders will need to follow the procedure set out in Part III of the Circular and, where relevant, complete the accompanying Application Form. If Qualifying Shareholders have any queries on the procedure for acceptance and payment, or wish to request another Application Form, they should contact Share Registrars Limited on 01252 821390 or, if calling from outside the United Kingdom, +44 (0)1252 821390 where relevant, quoting their full name and address.

If you have questions on how to complete the Form of Proxy, please contact Share Registrars Limited on 01252 821390 or, if calling from outside the United Kingdom, +44 (0)1252 821390. Lines are open from 9.00 a.m.to 5.00 p.m. (London time) Monday to Friday (except English and Welsh public holidays).

Calls may be recorded and monitored randomly for security and training purposes. Share Registrars Limited cannot provide advice on the merits of the Fundraising and cannot give any financial, legal or tax advice.

 

 

Appendix III – Definitions

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

Aquis Stock Exchange Aquis Stock Exchange Limited, a company incorporated in England and Wales with registered company number 04309969 and a recognised investment exchange under section 290 of FSMA;

AQSE Admission the admission of the Enlarged Share Capital to trading on the Access segment of the AQSE Growth Market becoming effective in accordance with the AQSE Rules;

AQSE Growth Market the primary growth market for unlisted securities operated by Aquis Stock Exchange;

AQSE Rules the rules contained in the AQSE Growth Market Access Rulebook for issuers in effect from time to time, which set out the admission requirements and continuing obligations of companies seeking admission to and whose securities are admitted to trading on the Access segment of the AQSE Growth Market issued by Aquis Stock Exchange;

Application Form the personalised application form on which Qualifying non-CREST Shareholders may apply for Open Offer Shares under the Open Offer;

Articles of Association or Articles the articles of association of the Company, as amended from time to time;

Basic Entitlement the entitlement of Qualifying Shareholders to apply for Open Offer Shares, on the basis of 4 Open Offer Shares for every 5 Existing Ordinary Shares registered in their names on the Record Date, rounded down to the nearest whole Open Offer Share;

Board the board of directors of the Company from time to time;

Board Appointments the appointments to be made to the Board that are conditional upon AQSE Admission, as described in section 4 of Part II of the Circular;

Broker Option the conditional placing of the Broker Option Shares to be arranged by Dowgate at its absolute discretion as agent for the Company pursuant to the provisions of the Open Offer and Placing Agreement;

Broker Option Period the period commencing on the date of the Circular and concluding at 5.00 p.m. on 28 October 2022;

Broker Option Shares up to 10,000,000 New Ordinary Shares that may be issued by the Company (at the absolute discretion of Dowgate) pursuant to the Broker Option, comprising, if the Broker Option is exercised in full, 7.8 per cent. of the number of Placing Shares;

Business Day any day on which banks are generally open in London for the transaction of business other than a Saturday or Sunday or public holiday;

Capital Reorganisation the proposed reorganisation of the share capital of the Company as described in Part I of the Circular;

 

Certificated or in certificated form a share or other security which is not in uncertificated form (that is, not in CREST);

Circular or Document the document containing the terms and conditions of the Open Offer and Notice of General Meeting which is expected to be sent to Shareholders and published on the Company's website later today;

Closing Price the closing middle market quotation of a share as derived from Bloomberg;

Companies Act the Companies Act 2006, as amended, modified or re-enacted from time to time;

Company or OTAQ OTAQ plc, incorporated in England and Wales with number 11429299 and its registered office at 8-3-4 Harpers Mill, South Road, White Cross, Lancaster, England LA1 4XF;

Conditions (a) completion of the Capital Reorganisation (details of which are set out in section 6 of Part I of the Circular); (b) the passing of the Resolutions (details of which are set out in section 9 of Part I of the Circular): (c) the Placing becoming unconditional in all respects; and (d) completion of the Delisting and the AQSE Admission becoming effective by 8.00 a.m. on 9 November 2022 (or such later time and date not being later than 8.00 a.m. on 22 November 2022 as the Company may decide);

CREST or CREST System the computer-based system (as defined in the CREST Regulations) operated and administered by Euroclear enabling securities to be evidenced otherwise than by certificates and transferred otherwise than by written instruments;

CREST Manual the compendium of documents entitled “CREST Manual” issued by Euroclear from time to time and comprising the CREST Reference Manual, the CREST Central Counterparty Service Manual, the CREST International Manual, the CREST Rules, the CSS Operations Manual and the CREST Glossary of Terms;

CREST member a person who has been admitted by Euroclear as a system participant (as defined in the CREST Regulations);

CREST participant a person who is, in relation to CREST, a system-participant (as defined in the CREST Regulations);

CREST payment shall have the meaning given in the CREST Manual issued by Euroclear;

CREST Proxy Instruction the instruction whereby CREST members send a CREST message appointing a proxy for the General Meeting and instructing the proxy how to vote and containing the information set out in the CREST Manual;

CREST Regulations The Uncertificated Securities Regulations 2001 (SI 2001/3755), as amended;

CREST sponsor a CREST participant admitted to CREST as a CREST sponsor;

CREST sponsored member a CREST member admitted to CREST as a sponsored member (which includes all CREST Personal Members);

Deferred Shares the Deferred Shares of £0.14 each in the capital of the Company as created by virtue of the Capital Reorganisation;

 

Delisting the proposed cancellation of the listing of the Company’s Existing Ordinary Shares on the Official List and from trading on the London Stock Exchange’s main market for listed securities;

Directors, Board or the current directors of the Company or the board of directors from

Board of Directors time to time of the Company, as the context requires, and “Director” is to be construed accordingly;

Dowgate Dowgate Capital Limited, the Company’s placing agent, financial adviser for the purposes of the Open Offer and Placing and proposed AQSE Corporate Adviser;

DTR the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules;

EBITDA earnings before income, taxation, depreciation, share option charges, impairments, exceptional costs and amortisation;

Enabled for settlement in respect of Open Offer Entitlements, enabled for the limited purpose of settlement of claim transactions and USE transactions;

Enlarged Share Capital the ordinary share capital of the Company immediately following AQSE Admission;

Euroclear Euroclear UK & International Limited;

Excess Applications any applications for Excess Shares pursuant to the Excess Application Facility;

Excess Application Facility the facility for Qualifying Shareholders to apply for Excess Shares in excess of their Basic Entitlements subject to the terms and conditions set out in Part III of the Circular and the Application Form, if relevant;

Excess Open Offer Entitlements in respect of each Qualifying CREST Shareholder who has taken up his Basic Entitlement in full, the entitlement (in addition to the Basic Entitlement) to apply for Excess Shares up to the number of Open Offer Shares credited to their stock account in CREST pursuant to the Excess Application Facility, which may be subject to scaling down according to the Directors’ absolute discretion;

Excess Shares Open Offer Shares which a Qualifying Shareholder is entitled to apply for in addition to the Basic Entitlement by virtue of the Excess Application Facility;

Existing Ordinary Shares the 37,758,052 ordinary shares of £0.15 each in issue as at the date of this Document;

Existing Shareholders the holders of Existing Ordinary Shares;

FCA the Financial Conduct Authority of the United Kingdom or any successor body or bodies carrying out the functions currently carried out by the Financial Conduct Authority;

Form of Proxy the form of proxy accompanying the Circular for use by Existing Shareholders at the General Meeting;

FSMA the UK Financial Services and Markets Act 2000, as amended;

 

Fundraising means the Placing and Open Offer and, to the extent exercised, the Broker Option;

General Meeting the general meeting of the Company to be held at 11.00 a.m. on 7 November 2022 (and any adjournment(s) of such meeting) at the Company’s offices at 8-3-4 Harpers Mill, South Road, White Cross, Lancaster, England LA1 4XF, notice of which is set out in the Notice of General Meeting;

Group the Company and each of its subsidiaries and subsidiary undertakings;

ISIN International Securities Identification Number;

Issue Price £0.04 per New Ordinary Share;

Listing Rules the listing rules made under Part VI of FSMA (as set out in the FCA Handbook), as amended from time to time;

London Stock Exchange London Stock Exchange plc or its successor(s);

Main Market the main market for listed securities of the London Stock Exchange;

MAR the UK version of the EU Market Abuse Regulation (2014/596/EU) (incorporated into UK law by virtue of the European Union (Withdrawal) Act 2018), as amended and supplemented from time to time;

Member Account ID the identification code or number attached to any member account in CREST;

Money Laundering Regulations The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended and supplemented);

New Ordinary Shares the ordinary shares of £0.01 each in the capital of the Company as created by virtue of the Capital Reorganisation and the Resolutions;

Notice of General Meeting the notice of general meeting set out in Part IV of the Circular;

Official List the list maintained by the FCA in accordance with section 74(1) of FSMA for the purposes of Part VI of FSMA;

Open Offer the conditional invitation to Qualifying Shareholders to apply for the Open Offer Shares at the Issue Price on the terms and conditions outlined in this document;

Open Offer and the agreement between the Company and Dowgate providing for

Placing Agreement Dowgate to be appointed financial adviser to the Company and the Company’s placing agent, as described in more detail in section 2 of Part II of the Circular;

Open Offer Entitlements entitlements for Qualifying Shareholders to subscribe for Open Offer Shares pursuant to the Basic Entitlement and the Excess Application Facility;

Open Offer Shares up to 30,206,441 New Ordinary Shares to be issued pursuant to the Open Offer;

 

Overseas Shareholders Shareholders with registered addresses in, or who are citizens, residents or nationals of, jurisdictions outside the UK;

Participant ID the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant;

Placee any person that has conditionally agreed to subscribe for Placing Shares in the Placing;

Placing the proposed placing of the Placing Shares by the Company at the Issue Price, incorporating the Broker Option, conditional inter alia on passing of the Resolutions and on AQSE Admission;

Placing Shares means the 50,000,000 New Ordinary Shares which have been conditionally placed firm by Dowgate with institutional and other investors pursuant to the Placing and up to 10,000,000 New Ordinary Shares which may be subscribed for under the Broker Option;

Proposals the Delisting, AQSE Admission, Capital Reorganisation, Fundraising, Board Appointments and associated matters

Qualifying CREST Shareholders Qualifying Shareholders holding Existing Ordinary Shares on the Record Date in uncertificated form;

Qualifying non-CREST Qualifying Shareholders holding Existing Ordinary Shares on the

Shareholders Record Date in certificated form;

Qualifying Shareholders holders of Existing Ordinary Shares residing in a jurisdiction where the extension or availability of the Open Offer would not breach any applicable law and whose names appear on the register of members of the Company on the Record Date as holders of Existing Ordinary Shares and who are eligible to be offered Open Offer Shares under the Open Offer in accordance with the terms and conditions set out in the Circular and the Application Form;

Receiving Agent Share Registrars Limited of 3 The Millennium Centre, Crosby Way, Farnham, Surrey GU9 7XX;

Record Date the record date for the Open Offer, being 6.00 p.m. on 11 October 2022;

Regulatory Information Service or RIS one of the regulatory information services authorised by the FCA to receive, process and disseminate regulatory information from listed companies;

Resolutions the resolutions to be put to the Existing Shareholders at the General Meeting as detailed in the Notice of General Meeting and Resolution, means any of the Resolutions;

Restricted Jurisdiction the United States, Russia, Australia, Canada, Japan, New Zealand, the Republic of South Africa and any other jurisdiction where the extension or availability of the Open Offer would breach any applicable law;

SEC the US Securities and Exchange Commission;

Securities Act the US Securities Act of 1933, as amended;

 

Shareholders the holder(s) of the ordinary shares in the capital of the Company from time to time;

Standard Listing a standard listing under Chapter 14 of the Listing Rules;

Sterling or pound or £ or pence pounds sterling or pence, the basic units of currency in the UK;

Subsidiary has the meaning given in section 1159 of the Companies Act;

Subsidiary undertaking has the meaning given to it in section 1162 of the Companies Act 2006;

Takeover Code or City Code the City Code on Takeovers and Mergers issued by the Takeover Panel, as amended from time to time;

Takeover Panel The Panel on Takeovers and Mergers;

TIDM Tradable Instrument Display Mnemonic;

Uncertificated or recorded on the relevant register or other record as being held in

uncertificated form uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST;

United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland;

United States or US the United States of America;

US person has the meaning provided in section 902(k) of Regulation S under the Securities Act;

USE unmatched stock event; and

VAT value added tax.

Warrants warrants to subscribe for New Ordinary Shares to be issued by the Company as described in section 7 of Part I of the Circular.



ISIN: GB00BK6JQ137
Category Code: MSCU
TIDM: OTAQ
LEI Code: 213800CZGMYB5XTUXJ52
Sequence No.: 193715
EQS News ID: 1461189

 
End of Announcement EQS News Service

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