Biome Technologies plc (LON:BIOM), a leading bioplastics and radio frequency technology business, has announced a proposed re-financing which they believe is critical to the ongoing viability of Biome. The re-financing has a number of components as set out below:
· a subscription for 19,000,000 new ordinary shares of 5 pence each in the capital of the Company to raise a total of £950,000 (before expenses);
· a conversion of £1,278,660.96 of the Qualifying Amount pursuant to the Convertible Loan Notes (each as defined below) into 25,573,218 new Ordinary Shares;
· the exchange of the balance of the Qualifying Amount under the Convertible Loan Notes held by Mr Martin Rushton-Turner, being £62,750.00, into a new, non-convertible, loan pursuant to the Loan Agreement;
· a retail offer conducted by REX on the Company’s behalf to raise up to £80,000 (before expenses) by the placing of up to 1,600,000 new Ordinary Shares with retail investors; and
· the New Ordinary Shares will be issued at a price of 5 pence per New Ordinary Share.
The total amount that the Company could raise under the Subscription and the Retail Offer is £1,030,000 (before expenses), all of which will be used for the Company’s working capital purposes.
The Subscription is being conducted in two tranches, as follows:
· a first subscription of 200,000 new Ordinary Shares to be issued pursuant to the Company’s existing authorities to issue and allot equity securities on a non-pre-emptive basis granted at the Company’s 2024 annual general meeting; and
· a second subscription of 18,800,000 new Ordinary Shares to be issued conditional upon, amongst other things, the passing of certain resolutions by Shareholders at a general meeting of the Company to be held at the offices of Osborne Clarke LLP, One London Wall, London EC2Y 5EB at 11.00 a.m. on 4 September 2024.
The issue of the Conversion Shares has already been approved by Shareholders at previous general meetings of the Company. Therefore, commencement of dealings in the Conversion Shares is expected to occur alongside the First Subscription Shares on 21 August 2024.
Shareholders should be aware that the Resolutions must be passed by Shareholders at the General Meeting in order to be sure that the Second Subscription and the Retail Offer will proceed. If the Resolutions were not to be passed, only the gross proceeds of the First Subscription (being £10,000) would be received by the Company.
In the event that the Resolutions were not passed, and all of the Proposals were not to occur, the Directors believe that there are currently no alternate sources of funding available in the necessary time scale to the Company and that Biome would not have sufficient cash to fund its activities beyond the middle of September 2024. In such circumstances the Directors would accordingly have to place the Company into a members’ voluntary liquidation (which is a solvent liquidation procedure) to enable payment of all creditors of the Company in full. Such proceedings would be likely to result in little or no value for Shareholders and Shareholders may lose all or a substantial portion of their investment.
Given the above factors and noting that the Proposals also remove all but £62,750 of the debt in the Company pursuant to the Convertible Loan Note Instrument, the Directors recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.
The Company has received irrevocable undertakings from the Directors to vote in favour of the Resolutions in respect of their entire holdings amounting to, in aggregate 628,194 Existing Ordinary Shares representing, approximately 16.6 per cent. of the existing ordinary share capital of the Company as at the date of this announcement.
In addition, the Company has received irrevocable undertakings from Shareholders (including all the holders of the Convertible Loan Notes) to vote in favour of the Resolutions in respect of their entire holdings (including New Ordinary Shares that will have been issued as a result of the Conversion). Such holdings will represent approximately 93.0 per cent. (of which holdings by the Directors will represent approximately 30.4 per cent.) of the Ordinary Shares of the Company eligible to vote on the Resolutions.
Director and PDMR participation in the Subscription
As part of the Fundraise, the following Directors and Persons Discharging Managerial Responsibilities have agreed to subscribe for an aggregate of Subscription Shares, as part of the Subscription at the Issue Price to raise a total of £309,000.
| Name | Role | Subscription Shares | Subscription Amount (£) | Total Shares held after completion of the Proposals |
| Paul Mines | Chief Executive Officer | 250,000 | 12,500.00 | 307,358 |
| Martin Rushton-Turner | Non-Executive Director | 5,840,000 | 292,000.00 | 14,501,027 |
| Sally Morley | Managing Director of Biome Bioplastics Limited | 60,000 | 3,000.00 | 66,708 |
| Stephen Baskerville | Managing Director of Stanelco RF Technologies Limited | 30,000 | 1,500.00 | 30,000 |
The FCA notifications, made in accordance with the requirements of UK MAR, are appended below.
Related Party Transactions
Mr Martin Rushton-Turner and Mr Vivian Pereira are subscribing for £282,000 and £100,000 respectively at the Issue Price pursuant to the Subscription. As Mr Rushton-Turner and Mr Pereira each currently hold more than 10 per cent. of the Ordinary Shares and given that Mr Rushton-Turner is a Director, their participations in the Subscription, and the entry into of the Loan Agreement by Mr Rushton-Turner and the Company, are deemed to be related party transactions under rule 13 of the AIM Rules for Companies. Mr Paul Mines is also subscribing for £12,500 at the Issue Price pursuant to the Subscription and therefore Mr Mines and Mr Rushton-Turner are not deemed to be independent Directors for the purposes of providing the opinion required pursuant to rule 13 of the AIM Rules for Companies.
The independent Director, being Mr John Standen, considers, having consulted with the Company’s nominated adviser, Allenby Capital, that the terms of the participation by Mr Rushton-Turner, Mr Mines and Mr Pereira in the Subscription and the terms of the Loan Agreement are fair and reasonable insofar as Shareholders are concerned.
Circular
A Circular containing a Notice of General Meeting will be posted to shareholders shortly and will be made available on the Company’s website at: www.biometechnologiesplc.com
The above summary should be read in conjunction with the full text of this announcement and the Circular, extracts from which are set out in the Appendices below. Persons who have chosen to participate in the Fundraise will be deemed to have read and understood this announcement in its entirety (including the Appendices). All capitalised terms used throughout this announcement shall have the meanings given to such terms in the Definitions section in Appendix II to this announcement and as defined in the Circular. References to paragraphs below refer to the relevant paragraphs of the Circular and references to ‘this document’ refer to the Circular. References to numbered ‘Parts’ below refer to the relevant parts of the Circular.
The person responsible for arranging the release of this Announcement on behalf of Biome Technologies is Paul Mines, Chief Executive Officer of the Company.