NetScientific PLC – Proposed Placing of new ordinary shares to raise approximately £7.0 million

11th June 2021

NetScientific PLC, the life sciences and sustainability technology investment and commercialisation group, is pleased to announce that the Company is carrying out an equity fundraising to raise approximately £7.0 million (the “Placing”), before expenses, via the issue of an aggregate of approximately 5,384,615 new Ordinary Shares (“Placing Shares”) at a price of 130 pence per share (the “Placing Price”) (the “Fundraising”).

WH Ireland Limited (“WH Ireland”) is acting as broker in relation to the Fundraising. The Company expects to issue the Placing Shares via a conditional placing (the “Placing”). A placing agreement has been entered into today between the Company and WH Ireland in connection with the Placing (the “Placing Agreement”).

The Fundraising is subject, inter alia, to shareholder approval, and a General Meeting is expected to be convened for 10.00 a.m. on 28 June 2021. The Placing is being conducted, subject to the satisfaction of certain conditions referred to in the Appendix to this Announcement, through an accelerated book-build process (the ”Bookbuild”), which will be launched immediately following this Announcement.

Fundraising Highlights

• Proposed Fundraising of approximately £0 million before expenses at a price of 130 pence per share by way of a Placing.
• The Placing is being conducted through an accelerated book-build process, which will open with immediate effect following this Announcement.
• The Placing Shares, assuming full take-up, will represent approximately 4 per cent. of the Company’s enlarged issued share capital.
• The final number of Placing Shares will be agreed by WH Ireland and the Company at the close of the Bookbuild, and the result of the Placing will be announced as soon as practicable thereafter.
• The timing for the close of the Bookbuild and allocation of the Placing Shares shall be at the discretion of WH Ireland, in consultation with the Company. The Placing is not underwritten.
• The Appendix to this Announcement (which forms part of this Announcement) contains the detailed terms and conditions of the Placing.
• The issue of the Placing Shares is subject to, inter alia, the passing of the Resolutions at the General Meeting.
• Due to the unpredictability of the UK Government guidance and continuing potential health risks posed by COVID-19, it appears to the Directors that significant restrictions on personal movement may still be in place on the date of the General Meeting. Accordingly, the Company will hold the General Meeting with the minimum attendance required to form a quorum and the Directors strongly encourage all Shareholders to vote on the Resolutions by proxy or online. Any Shareholders seeking to attend the General Meeting in person will be refused entry.

Enquiries:

Additional Information

The Fundraising

The Company is carrying out the Fundraising to raise approximately £7.0 million, before expenses, via a conditional placing of approximately 5,384,615 Placing Shares at the Placing Price of 130 pence per share.

The Placing Price represents a discount of approximately 10.3 per cent to the closing mid-market price of the Company’s Ordinary Shares of 145 pence on 9 June 2021 (being the last business day prior to this Announcement).

The Placing Shares, assuming full take-up pursuant to the Placing, will represent approximately 26.4 per cent. of the Company’s enlarged issued share capital.

WH Ireland is acting as agent for the Company and has agreed to use its reasonable endeavours to place approximately 5,384,615 Placing Shares at the Placing Price with new and existing investors. The final number of Placing Shares will be agreed by WH Ireland and the Company at the close of the Bookbuild and the result will be announced as soon as practicable thereafter. The timing for the close of the Bookbuild and allocation of the Placing Shares shall be at the discretion of WH Ireland, in consultation with the Company. The Placing is not underwritten. The Appendix to this Announcement (which forms part of this Announcement) contains the detailed terms and conditions of the Placing.

In connection with the Placing, the Company has entered into a Placing Agreement with WH Ireland, which contains customary warranties given by the Company with respect to the Company’s business and customary indemnities given by the Company in respect of liabilities arising out of or in connection with the Placing.

The issue of the Placing Shares is conditional, inter alia, on the passing by the Company’s shareholders (“Shareholders”) of certain resolutions at the General Meeting of the Company, which is expected to be convened for 10.00 a.m. on 28 June 2021.

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM (“Admission“). On the assumption that, amongst other things, the Resolutions are passed by Shareholders at the General Meeting, it is expected that Admission will become effective and that dealings in the Placing Shares will commence at 8.00 a.m. on 29 June 2021.

Background to the Placing

In its announcement, released on 31 March 2021, of its preliminary results for the year ended 31 December 2020, the Company stated that with the fundamental change in strategy and management drive, the Group had acted to realise the underlying asset value in its portfolio companies and their potential to deliver shareholder value. This included exploiting the established transatlantic business and expanding the international presence, to maximise the growth of its subsidiaries and portfolio.

As seen through the recent Company news flow, the upward trend had been established and there is, in the opinion of the Board, significant opportunity to generate added value in the portfolio.

The Company’s management team remains performance and results driven; and, with its proactive management approach, is focused on:

• completing turnaround, execution and scalable processes;
• driving commercialisation and project delivery within the Group’s portfolio;
• further judicious investment in the Group’s portfolio and new opportunities where the Board perceives a strong case for further investment;
• reviewing and planning the value inflection points, exit opportunities and potential liquidity events of each portfolio company;
• clear milestones, quarterly KPIs, a rolling 12 month action plan over a 3 to 5 year planning horizon;
• effective and pre-emptive risk management and controls;
• creating value from the Capital Under Advisory companies;
• building infrastructure with investment in the Group’s team, systems and regulatory protocols for scalability;
• exploiting the transatlantic relationships and global opportunities for UK companies’ expansion to US/international markets; US companies’ expansion to UK/Europe and international; and access to capital, relationships and enhanced exit potential; and
• realising profits, returns, exits and liquidity events at the right time.

By adopting this strategy, the Board believes that there is significant upside to increase the value of the Group’s portfolio.

Reasons for the Placing

The purpose of the Placing is to provide the Group with sufficient funds to implement its refined strategy outlined above. The net proceeds will therefore be used to:

• to protect and enhance the Group’s investment in portfolio companies;
• to provide judicious investment in current and future opportunities;
• to leverage NetScientific’s funding to anchor investment syndication based on a capital light model;
• to expand and increase revenue streams, markets and value;
• for infrastructure and working capital purposes; and
• to position the Group for further growth.

Circular and Notice of General Meeting

The Company expects to publish a circular (the “Circular”) in due course in connection with the Placing, which will contain a notice convening the General Meeting in order to approve certain matters necessary to implement the Fundraising.

A copy of the Circular will be made available on the Company’s website www.netscientific.net.

Due to the unpredictability of the UK Government guidance and continuing potential health risks posed by COVID-19, it appears to the Directors that significant restrictions on personal movement may still be in place on the date of the General Meeting. Accordingly, the Company will hold the General Meeting with the minimum attendance required to form a quorum and the Directors strongly encourage all Shareholders to vote on the Resolutions by proxy or online. Any Shareholders seeking to attend the General Meeting in person will be refused entry.

The actions that Shareholders should take to vote on the Resolutions will be set out in the Circular to be posted in due course, along with the recommendations of the Directors.

This Announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014, as amended, as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018, as amended (“MAR”). In addition, market soundings (as defined in MAR) were taken in respect of the Placing with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this Announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

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