Tekcapital plc, (AIM: TEK) has conditionally raised a total of £0.925million (US$1.15 million) (before expenses) by the issue 9.25 million  new ordinary shares at 10 pence per share (the "Placing Price") (together, the "Placing").

Placing highlights:

  • The Placing Price represents a discount of approximately 13 per cent. to the closing mid-market price of 11.5 pence on 30 April 2020
  • The Placing Shares will represent approximately 11.78 per cent. of the Existing Ordinary Shares and will, when issued, represent approximately 10.54 per cent. of the Enlarged Share Capita

Use of Proceeds

The net proceeds of the Placing, which are estimated to be £0.8m (US$1.0m), will be used to invest in the Company's portfolio companies and for working capital purposes.

The Company intends to invest approximately US$0.225m in Belluscura, through the purchase of 1,200,000 shares at 15p per share and it will receive a warrant to acquire 600,000 additional shares exercisable at 15p for a period of three years from the date of its investment.

The Company also intends to invest US$250m in Salarius to support Salarius' growth and development and US$050m each in Lucyd and Guident to advance their commercialisation programs.

The remaining US$425,000 will be used to further support the Group's portfolio companies or as required for working capital purposes.

Salarius – US$0.250m

Approximately US$0.250m of funds raised in the Placing to support Salarius' growth and development.

In March 2020, Salarius Limited ('Salarius') announced that it had signed its first distribution deal with one of North America's largest natural food wholesalers to launch its new SaltMe!® natural potato crisps in North America. SaltMe! Crisps utilize Salarius' patented MicroSalt® to deliver full flavour with roughly 50% less sodium.

Sodium consumption is a leading risk factor for hypertension which is linked to the development of cardiovascular disease, the leading cause of premature death in the world. Subsequently, on 22 March 2020, this distribution partner made an initial order to launch sales of the SaltMe!® natural potato crisps in 71 stores starting in May 2020. A further agreement was reached iLevel Brands Inc ('iLevel Brands') as part of its launch of North American sales of its new SaltMe!® natural potato crisps, to expand market penetration and brand awareness for its new potato chip snack line. This agreement is expected to enhance market penetration and accelerate sales growth for the SaltMe!® product line in the second half of 2020. These agreements follow quickly on from agreements with two US food ingredient brokers, Hanks Brokerage Inc, and Accurate Ingredients Inc, announced in January 2020 and December 2019, respectively, to sell MicroSalt® to snack food companies which are expected to generate sales in H1 2020 or soon thereafter.

Belluscura - US$0.225m

Approximately US$0.225m of the funds raised in this Placing will be used to invest in Belluscura (at the current valuation of approximately US$9.0m (15p/share).

The Company will receive one warrant for every two shares purchased, exercisable at 15p for a period of three years from the date of its investment. If the Company elects to exercise all these warrants, it will invest approximately a further US$111,000 in Belluscura.

The Company will also receive an additional option to invest up to £1.0m at a maximum price of 23p per share within 30 days following receipt of clearance from the FDA to launch and commence production of the X-PLO2R™ portable oxygen concentrator.

Belluscura plc ('Belluscura'), in conjunction with its research partner Separation Design Group LLC, announced they had filed a patent application covering novel integrated portable extracorporeal oxygenation and carbon dioxide removal systems for treating patients suffering from acute respiratory distress ('ARDS'), including ARDS caused by Coronavirus.

In addition, Belluscura anticipates receiving clearance from the US Food and Drug Administration ('FDA') clearance for the X-PLO2R™ portable oxygen concentrator in H1 2020 with manufacturing and sales of their device commencing in H2 2020.

Lucyd – US$0.05m

The Company will use approximately US$0.05m of funds raised in the Placing to support Lucyd in the development of the Vyrb™ app.

In January 2020, Lucyd Limited ('Lucyd') launched its Loud 3.0 Bluetooth enabled upgraded tech eyewear in two styles, with Bluetooth. These prescription compatible, audio glasses offer enhanced sound quality, comfort and style at an attractive price. In March 2020, Lucyd filed a new patent and a trademark on its forthcoming Vyrb™ app. Vyrb users will be able to activate smartphone actions with their voice beyond what is currently available with voice assistants, such as social media posting, with Vyrb's flexible and intuitive user experience. By using the app along with Lucyd Bluetooth glasses, the user will be able to spend less time looking at their phone, and keep more of their focus on the real world. This is especially pressing given the rise in pedestrian fatalities due to smartphone distraction. Every seven minutes, a pedestrian is struck by a vehicle in the U.S.. More pedestrians and cyclists were killed in 2018 than in any year since 1990. Deaths of pedestrians have jumped by 42% in the last decade, and pedestrian and bicyclist fatalities continue to rise, with deaths of those on foot climbing 3.4% to 6,283 last year in the U.S. The number of people killed on roads while using bicycles and other non-motorized vehicles rose 6.3% to 857. The launch of the Vryb app is targeted for December 2020.

Guidant – US$0.05m

Approximately US$0.05m of funds raised in the Placing to support Guident's growth and development.

In March 2020, Guident Limited ('Guident') announced significant progress in the development of both its management team and its intellectual property portfolio. Guident appointed Harald Braun as the Company's Chairman and CEO, Daniel Grossman as the Company's Chief Revenue Officer, Michael Trank as VP Software Development and Dr. Gabriel Castaneda as Lead Architect, Artificial Intelligence Software.

At the same time, it announced that it has received a Notice of Allowance from the United States Patent and Trademark Office for its patent application #16/386,530 entitled "Methods and Systems for Emergency Handoff of an Autonomous Vehicle" bringin its IP portfolio to five intellectual properties, of which four have been allowed or granted.

The Directors believe that these developments will enable Guident to potentially make a meaningful contribution to the safety of Autonomous Vehicles and ground-based delivery drones. According to Allied Market Research the autonomous vehicle ('AV') market is expected to reach $556 billion by 2026 with a CAGR of 39%.

General Meeting

The Placing will be subject to Tekcapital's shareholders' approval at a general meeting (the "General Meeting") to be at 10.00a.m. on 19 May 2020.

Shareholders will receive a circular, which also sets out details of the conditional Placing and also includes a Notice of General Meeting will be sent to shareholders later today (the "Circular").

Shares in TEK have risen over the past month starting April at 6.1p and opening today, following the placing at 10p, at 10.5p.

Clifford M. Gross Ph.D., Executive Chairman of Tekcapital plc commented: “We are pleased to announce the completion of this placing as it will enable us to accelerate the further development of our portfolio companies."