Fundraising to raise £1.4m & Notice of GM

RNS Number : 3977D

Cambridge Cognition Holdings PLC

19 February 2020

 

THIS ANNOUNCEMENT, INCLUDING THE INFORMATION CONTAINED HEREIN, IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, CANADA, JAPAN, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY NEW ORDINARY SHARES OF CAMBRIDGE COGNITION HOLDINGS PLC IN THE UNITED STATES, CANADA, JAPAN, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE MARKET ABUSE REGULATION NO. 596/2014 ("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Cambridge Cognition Holdings Plc

("Cambridge Cognition" or the "Company")

Fundraising to raise £1.4 million

and

Notice of General Meeting

Cambridge Cognition Holdings plc, which develops and markets neuroscience technology to assess brain health, is pleased to announce a conditional Placing and Subscription (together the "Fundraising") to raise gross proceeds of £1.4 million through the issue of 7,000,000 new ordinary shares (the "New Ordinary Shares") at a price of 20 pence per Ordinary Share (the "Issue Price"). The Fundraising comprises 6,450,000 placing shares (the "Placing Shares") and 550,000 subscription shares (the "Subscription Shares"). Admission ("Admission") of the New Ordinary Shares is subject to, inter alia, shareholder approval at a general meeting of the Company ("General Meeting"), notice of which will be sent to shareholders shortly.

finnCap Ltd ("finnCap") is acting as nominated adviser and joint broker, alongside Dowgate Capital Limited ("Dowgate") who will also be acting as joint broker in connection with the Placing (finnCap and Dowgate together, the "Joint Brokers"). Neither the Placing nor the Subscription has been underwritten.

Details of the Fundraising

·      Director participation of £60,000

·      General Meeting to be held at the offices of the Company at Tunbridge Court, Bottisham, Cambridge CB25 9TU 11:00 a.m. on 9 March 2020

·      Admission of the New Ordinary Shares is expected to be on 10 March 2020

·      In addition to shareholder approval to be sought at the General Meeting, the Fundraising is also conditional upon Admission to trading becoming effective, and upon the placing agreement between the Company and the Joint Brokers (the "Placing Agreement") not being terminated in accordance with its terms

·      The New Ordinary Shares, when issued, will represent approximately 22.5 per cent. of the Company's issued share capital prior to the Fundraising. The Issue Price of 20 pence per New Ordinary Share represents a discount of approximately 33.3 per cent. to the closing mid-market price of 30 pence per Ordinary Share on 18 February 2020, being the last trading day immediately preceding the date of this Announcement

·      The net proceeds of the Fundraising will provide the Company with sufficient capital to drive significant growth in the business and the directors expect the Company to be profitable by Q4 2020.

Reasons for the Fundraising and use of proceeds

Whilst the Company continues to make good commercial progress, the business now requires additional funding to finalise commercialisation of recently developed products, accelerate development of new products and strengthen the balance sheet.

In particular the funds will be used to develop additional modules, wearable contract requirements, complete development of voice product, spin out the digital phenotyping programme and invest in further sales and marketing resource.

The Directors believe the net proceeds of the Fundraise will be sufficient to execute on their growth strategy and accordingly do not anticipate the need to explore any additional funding through a debt facility.

Current trading and Prospects

As announced earlier today, the preliminary results for the year ended 31 December 2019 are expected to be released on 24 March 2020 and the following key figures, subject to audit, are expected to be included in that report:

·      Revenue of £5.04 million (2018: £6.13 million)

·      Post tax loss for the year of £2.90 million (2018: £1.44 million loss)

·      Cash balance of £0.90 million at 31 December 2019 (31 December 2018: £1.11 million)

·      Contracted order book of £5.68 million (31 December 2018: £6.08 million)

While trading in the core business was disappointing, 2019 was a year of transition as the Company continued to deliver on its strategy to become a digital health business with multiple product lines. The Company is targeting the fast growth, overlapping electronic clinical outcomes assessment (eCOA) and digital health markets for central nervous systems disorders.

Sales of digital solutions doubled from 2018 to 2019 with a large £1.3 million order taken early in the year. The Company also completed the development and took orders for two new solutions in 2019. NeuroVocalix™, its patented automatic voice-based system for measuring cognition, completed a proof-of-concept trial with data from 2,868 people in Q2 2019. The Company's new, configurable eCOA product was launched in Q4 2019.

With a shift in focus from research and development to commercialisation throughout the latter half of 2019, together with the launch of these new products and an expected improvement in its core business, the Company is positioned for growth in 2020. While sales and marketing spending is being increased, R&D and overall administrative costs are being significantly reduced and the Company continues to expect to achieve profitability in Q4 2020 and to deliver further growth in subsequent years

Trading conditions improved in late 2019 and have continued into 2020 with the first two months of the year delivering significant growth on the prior year. With the much-strengthened balance sheet, the Directors remain confident in the outlook for 2020 and beyond.

General Meeting and Shareholder Approval

For the New Ordinary Shares to be admitted to trading on AIM, Shareholder approval is required:

a)   by way of ordinary resolution to give the Directors authority to allot the New Ordinary Shares; and

b)   by way of a special resolution to dis-apply statutory pre-emption rights in respect thereof. 

The authorities referred to above are in addition to the Company's existing general shareholder authorities to allot Ordinary Shares for cash on a non-pre-emptive basis.

In order to obtain the necessary shareholder approval, a General Meeting of the Company is to be held at the offices of the Company at Tunbridge Court, Bottisham, Cambridge CB25 9TU 11:00 a.m. on 9 March 2020 at which the Resolutions will be proposed. A Circular and notice of General Meeting will today be sent to shareholders. The Circular and notice of General Meeting will also be made available on the Company's website at www.cambridgecognition.com.

Dr Matthew Stork, Chief Executive Officer, Cambridge Cognition said:

"We are excited that this fundraising, provided by both existing and new shareholders, will support commercialisation of our recently launched products and enable us to accelerate development of our digital and voice solutions. This is tangible progress as we become a digital health business with multiple product lines."

Directors' Participation and Related Party Transactions

The participation in the Fundraising by Nicholas Walters, Steven Powell, Matthew Stork and Debra Leeves (the "Participating Directors") for 100,000, 75,000, 75,000 and 50,000 Ordinary Shares respectively are related party transactions under Rule 13 of the AIM Rules as they are Directors of the Company. The Independent Director of the Company, having consulted with finnCap in its capacity as the Company's nominated adviser for the purposes of the AIM Rules, consider the terms on which the Participating Directors have participated in the Fundraising are fair and reasonable insofar as the Company's shareholders are concerned.

The participating Directors' interests as at the date of this announcement and immediately following completion of the Fundraising are as follows:

Name	Existing beneficial interest in Ordinary Shares	Existing shareholding	New Ordinary Shares subscribed for	Beneficial interest in Enlarged Share Capital	% of Enlarged Share Capital
Steven Powell	Chairman	141,375	75,000	216,375	0.7%
Matthew Stork	CEO	50,000	75,000	125,000	0.4%
Nicholas Walters	CFO	200,826	100,000	300,826	1.0%
Debra Leeves	Non-Executive Director	0	50,000	50,000	0.2%

Expected Timetable of Principal Events

Announcement of the Fundraising	19 February 2020
Posting of the Circular and Form of Proxy	19 February 2020
Trade Date in respect of the Placing*	6 March 2020
Latest time and date for receipt of CREST proxy instructions and registration of online votes from Shareholders for General Meeting	6 March 2020
Latest time and date for receipt of Forms of Proxy	6 March 2020
General Meeting	11:00 a.m. 9 March 2020
Settlement Date in respect of the Placing*	8:00 a.m. 10 March 2020
Expected date for Admission and commencement of dealings in the New Ordinary Shares on AIM	8:00 a.m. 10 March 2020

*Trade date and settlement are subject to the passing of the resolutions at the General Meeting

Admission

Application will be made for the new Ordinary Shares to be admitted to trading on the AIM market ("AIM") of the London Stock Exchange. Settlement for the new Ordinary Shares and Admission is expected to take place at 8.00 a.m. on 10 March 2020. The Fundraising is conditional, inter alia, upon passing of the Resolutions at the General Meeting, Admission becoming effective and the conditions in the Placing Agreement between the Company and the Joint Brokers being satisfied by 8.00 a.m. on 10 March 2020 (or such later date as the Company and the Joint Brokers agree, being not later than 8.00 a.m. on 24 March 2020) and the Placing Agreement not being terminated in accordance with its terms.

On Admission the Company's issued share capital will comprise of 31,170,093 Ordinary Shares, with no Ordinary Shares held in treasury. Therefore, the total number of Ordinary Shares in the Company with voting rights will be 31,170,093. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

Enquiries

Cambridge Cognition Holdings PLC Matthew Stork, Chief Executive Officer Nick Walters, Chief Financial Officer	Tel: [phone] [e-mail]
finnCap Ltd (NOMAD and Joint Broker) Geoff Nash / Simon Hicks / Teddy Whiley (Corporate Finance) Alice Lane / Manasa Patil (ECM)	Tel: [phone] (Corporate Finance) (Corporate Broking)
Dowgate Capital Limited (Joint Broker) David Poutney / James Serjeant	Tel: [phone]
IFC Advisory Ltd (Financial PR and IR) Tim Metcalfe / Graham Herring / Zach Cohen	Tel: [phone]

About Cambridge Cognition

Cambridge Cognition is a neuroscience technology company developing digital health products to better understand, detect and treat conditions affecting brain health. The company's software products assess cognitive health in patients worldwide to improve clinical trial outcomes, identify and stratify patients early and improve global efficiency in pharmaceutical and healthcare industries.

For further information visit www.cambridgecognition.com

Forward-Looking Statements

This announcement contains forward-looking statements. These statements relate to the Group's future prospects, developments and business strategies. Forward-looking statements are identified by their use of terms and phrases such as "potential", "estimate", "expect", "may", "will" or the negative of such terms and phrases, variations or comparable expressions, including references to assumptions. The forward-looking statements in this announcement are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. These forward-looking statements speak only as at the date of this announcement. No statement in this announcement is intended to constitute a profit forecast or profit estimate for any period. Neither the Directors nor the Company undertake any obligation to update forward-looking statements other than as required by the AIM Rules or by the rules of any other securities regulatory authority, whether as a result of new information, future events or otherwise.

Important Information

This announcement or any part of it does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia), Canada, Australia, the Republic of South Africa, Japan or any other jurisdiction in which the same would be unlawful. No public offering of the New Ordinary Shares is being made in any such jurisdiction.

All offers of the New Ordinary Shares will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus. In the United Kingdom, this announcement is being directed solely at persons in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 (as amended) does not apply.

The New Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Fundraising or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States. The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained for the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the New Ordinary Shares and the New Ordinary Shares have not been, nor will they be, registered under or offering in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or the Republic of South Africa. Accordingly, the New Ordinary Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the United Kingdom.

The Joint Brokers are authorised and regulated by the Financial Conduct Authority (the "FCA") in the United Kingdom and are acting exclusively for the Company and no one else in connection with the Fundraising, and the Joint Brokers will not be responsible to anyone (including any placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Fundraising or any other matters referred to in this announcement.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Joint Brokers or by any of their respective affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.

No statement in this announcement is intended to be a profit forecast or estimate, and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.

 

END

 

 

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