Notice of General Meeting

RNS Number : 2797Q

Evocutis PLC

28 August 2014

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

Evocutis Plc

("Evocutis" or the "Company")

Proposed Capital Reorganisation

Proposed Subscription of 175,000,000 New Ordinary Shares at 0.12p

New Investing Policy

Notice of General Meeting

Evocutis Plc announces that it has today posted a circular ("Circular") to Shareholders containing a notice convening a general meeting of the Company ("General Meeting") to be held at 11 a.m. on 12 September 2014, at 200 Strand, London WC2R 1DJ.  The Circular is available on the Company's website, at www.evocutis.com.

The Circular contains proposals (the "Proposals") for:

·     the Capital Reorganisation;

·     the proposed Subscription to raise £210,000; and

·     the adoption of a New Investing Policy under AIM Rule 15.

Summary

On 13 March 2014, the Company passed a resolution to adopt an investing policy which became effective on 19 March 2014 when the Company completed the disposal of the intellectual property rights in Labskin^TM and SYN1113 together with related equipment.  The Company became an Investing Company from that date with its Existing Investing Policy.  

Although the Board has considered a number of opportunities within its Existing Investing Policy, it has come to the conclusion that the Existing Investing Policy may be unduly restrictive when considering suitable opportunities to create value for Shareholders.  Therefore, the Board has resolved to expand the Company's investing policy in order to potentially maximise Shareholder value by adopting the New Investing Policy, and appoint, conditional upon Admission, two new directors, and raise further funding by way of the Subscription to enable the Company to make investments.

For further information, please contact:

Evocutis plc
Tom Bannatyne, Chairman	[phone]
Dr Gwyn Humphreys, Interim Chief Executive Officer	www.evocutis.com

Cairn Financial Advisers LLP
James Caithie/Carolyn Sansom	Tel: [phone]
	www.cairnfin.com

1              Introduction

Subject to a proposed Capital Reorganisation, the Company intends to raise £210,000 before expenses by means of a subscription for 175,000,000 New Ordinary Shares at 0.12p per share and it intends to utilise those funds in connection with implementing a proposed New Investing Policy for the Company, further details of the Capital Reorganisation, the Subscription and the New Investing Policy are set out below. 

The purpose of the Circular is to provide further information regarding matters described above and to seek the Shareholder authorities to implement the Proposals at the forthcoming General Meeting.

2              The Subscription

Under the terms of the Subscription Letters, the Subscribers have agreed to subscribe for 175,000,000 New Ordinary Shares, in aggregate, at the Subscription Price, raising approximately £210,000 before expenses for the benefit of the Company.

The Subscription is conditional, inter alia, upon the passing of the Resolutions and the admission of the Subscription Shares to trading on AIM. Accordingly, the Company has convened the General Meeting, notice of which is set out at the end of this Circular.

The Subscription Shares, when issued and fully paid, will rank equally in all respects with the New Ordinary Shares.

It is expected that Admission will become effective and dealings in the Subscription Shares will commence on or about 15 September 2014.

Following the Subscription and Admission, the Company will have 349,675,828 New Ordinary Shares in issue and admitted to trading on AIM.

3              Background to and Reasons for the Capital Reorganisation

The Subscription Price is below the present nominal value of the Existing Ordinary Shares.  English company law prohibits a company from issuing shares at a discount to the nominal or par value of its shares.  Therefore, in order to carry out the Subscription using the New Ordinary Shares, which rank pari passu in all respects with the Existing Ordinary Shares, it is necessary to reduce the nominal value of the Company's Existing Ordinary Shares.  This may also assist in reducing volatility and aid future fundraisings. The Directors therefore propose to effect a Capital Reorganisation on the following basis:

·          each of the Existing Ordinary Shares of 1p each will be subdivided into and reclassified as one New Ordinary Share and one Deferred Share;

·          each New Ordinary Share is  an ordinary share in the capital of the Company with a nominal value of 0.01 p each and having those rights set out in the New Articles (and noted below); and

·          each Deferred Share is a deferred share in the capital of the Company with a nominal value of 0.99p each and having those rights set out in the New Articles (and noted below).

The Deferred Shares will have no voting rights and will not carry any entitlement to attend general meetings of the Company; nor will they be admitted to AIM or any other market. They will carry only a priority right to participate in any return of capital to the extent of £1 in aggregate over the class. In addition, they will carry only a priority right to participate in any dividend or other distribution to the extent of £1 in aggregate over the class. In each case a payment 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 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 Act.

The rights attaching to the Deferred Shares and the New Ordinary Shares will be contained in New Articles to be adopted by the Company, conditional, inter alia, upon the passing of the Resolutions.

The Existing Ordinary Shares are currently admitted to CREST. Application will be made for the New Ordinary Shares arising from the Capital Reorganisation, to be admitted to CREST, all of which may then be held and transferred by means of CREST. The record date of the Capital Reorganisation is 6.00 p.m. on 12 September 2014.

The rights attaching to the New Ordinary Shares will be identical in all respects to those of the Existing Ordinary Shares.

Existing share certificates will continue to be valid following the Capital Reorganisation and no certificates will be issued in respect of the Deferred Shares. 

The Notice set out at the end of this Circular contains resolutions to give effect to the proposed Capital Reorganisation and the Subscription which are conditional, amongst other matters, on the passing of Resolutions.

Application for Admission will be made for the New Ordinary Shares at the same time as the Subscription Shares and it is expected that Admission will become effective and that dealings in these shares will commence on or about 15 September 2014.            

4              Proposed New Investing Policy

On 13 March 2014, the Company passed a resolution to adopt an investing policy which became effective on 19 March 2014 when the Company completed the disposal of the intellectual property rights in Labskin^TM and SYN1113 together with related equipment.  The Company became an Investing Company from that date with its Existing Investing Policy.  

Although the Board has considered a number of opportunities within its Existing Investing Policy, it has come to the conclusion that the Existing Investing Policy may be unduly restrictive when considering suitable opportunities to create value for Shareholders.  Therefore, the Board has resolved to expand the Company's investing policy in order to potentially maximise shareholder value by adopting the New Investing Policy.

The Company's proposed New Investing Policy, which is subject to Shareholder approval at the General Meeting, is set out below:

New Investing Policy

The Company's proposed New Investing Policy is to invest in and/or acquire companies and/or projects within the natural resources sector which the New Board considers, in its opinion, has potential for growth. The Company will consider opportunities in all sectors as they arise if the New Board considers there is an opportunity to generate potential value for Shareholders. The geographical focus will primarily be Europe, however, investments may also be considered in other regions to the extent that the New Board considers that valuable opportunities exist and potential value can be achieved.

Where appropriate, the New Board may seek to invest in businesses where it may influence the business at a board level, add their expertise to the management of the business, and utilise their industry relationships and access to finance.

The Company's interests in a proposed investment and/or acquisition may range from a minority position to full ownership and may comprise one investment or multiple investments. The proposed investments may be in either quoted or unquoted companies; be made by direct acquisitions or farm-ins; and may be in companies, partnerships, earn-in joint ventures, debt or other loan structures, joint ventures or direct or indirect interests in assets or projects.  The New Board may focus on investments where intrinsic value may be achieved from the restructuring of investments or merger of complementary businesses.

The New Board expects that investments will typically be held for the medium to long term, although short term disposal of assets cannot be ruled out if there is an opportunity to generate a return for Shareholders.  The New Board will place no minimum or maximum limit on the length of time that any investment may be held. The Company may be both an active and a passive investor depending on the nature of the individual investment.

There is no limit on the number of projects into which the Company may invest, and the Company's financial resources may be invested in a number of propositions or in just one investment, which may be deemed to be a reverse takeover under the AIM Rules. The New Board intends to mitigate risk by appropriate due diligence and transaction analysis. Any transaction constituting a reverse takeover under the AIM Rules will also require Shareholder approval. The New Board considers that, as investments are made and new investment opportunities arise, further funding of the Company may also be required.

Where the Company builds a portfolio of related assets, it is possible that there may be cross holdings between such assets. The Company does not currently intend to fund any investments with debt or other borrowings but may do so if appropriate. Investments in early stage assets are expected to be mainly in the form of equity, with debt potentially being raised later to fund the development of such assets. Investments in later stage assets are more likely to include an element of debt to equity gearing. The New Board may also offer New Ordinary Shares by way of consideration as well as cash, thereby helping to preserve the Company's cash for working capital and as a reserve against unforeseen contingencies including, for example, delays in collecting accounts receivable, unexpected changes in the economic environment and operational problems. 

Investments may be made in all types of assets and there will be no investment restrictions on the type of investment that the Company might make or the type of opportunity that may be considered.

The Company may consider possible opportunities anywhere in the world.

The New Board will conduct initial due diligence appraisals of potential business or projects and, where they believe further investigation is warranted, intend to appoint appropriately qualified persons to assist. The New Board believes its expertise will enable it to determine quickly which opportunities could be viable and so progress quickly to formal due diligence. The Company will not have a separate investment manager.

As an Investing Company, the Company will be required to make an acquisition or acquisitions which constitutes a reverse takeover under the AIM Rules or otherwise implement its proposed New Investing Policy on or before the 19 March 2015 failing which, the Company's New Ordinary Shares would then be suspended from trading on AIM. In the event that the Company's New Ordinary Shares are so suspended, the admission to trading on AIM would be cancelled six months from the date of suspension. 

5              New Board

On and subject to Admission, Dr. Gwyn Humphreys, Darren Bamforth and Mike Townend will resign from office and Messrs David Lenigas and Donald Strang will be appointed to the Board.   Following Admission, the New Board will consist of:  David Lenigas as Executive Chairman, Donald Strang as an executive director and Tom Bannatyne as a non-executive director.  Further information on David Lenigas and Donald Strang is set out below:

David Anthony Lenigas (proposed Executive Chairman), aged 53

Mr. Lenigas has extensive experience operating in global public markets having served in a senior executive capacity on many public company boards. He is currently the Chairman of Rare Earth Minerals Plc, Solo Oil Plc, UK Oil & Gas Investments Plc and on the board of various other AIM companies*. He has also served as Executive Chairman of London listed Lonrho plc for six years up to September 2012 and was responsible for Lonrho plc's expansion into over 20 countries in Africa in sectors covering agriculture, infrastructure, hotels, IT and aviation.

* please note that until yesterday he was Chairman of Leni Gas & Oil plc, which was stated in the Circular which has been sent to shareholders as a current directorship

Donald Ian George Layman Strang (proposed Executive Director), aged 46

Mr. Strang is a member of the Australian Institute of Chartered Accountants and has been in business over 20 years, holding senior financial and management positions in both publicly listed and private enterprises in Australia, Europe and Africa. Mr. Strang has considerable corporate and international expertise and over the past decade has focused on mining and exploration activities in the oil and gas and natural resources sectors. He is currently a director of a number of AIM listed companies including Rare Earth Minerals Plc, Polemos Plc, UK Oil & Gas Investments Plc, and Doriemus Plc.

Further information required to be disclosed under the AIM Rules in respect of the Proposed Directors will be notified via an RIS prior to or on their appointment as Directors.

6              Share Options

Subject to the passing of the Resolutions, the Company intends to grant options to subscribe for New Ordinary Shares from time to time to incentivise directors, employees and consultants at the discretion of the New Board.  Options granted to subscribe for New Ordinary Shares in this manner will not exceed 10 per cent. of the Company's issued share capital from time to time without the prior approval of the Shareholders.

The Company also intends to adopt an incentive plan under which it may award New Ordinary Shares for no cost to directors, employees and consultants.  New Ordinary Shares under this plan will not exceed 10 per cent. of the Company's issued share capital from time to time without the prior approval of the Shareholders.

The New Board will review the Company's existing share option schemes and share incentive plans following Admission to determine whether they are appropriate or if new schemes should be established. 

7              General Meeting

The Proposals are conditional upon the passing of the Resolutions at the General Meeting as described below. You will find set out at the end of this Circular, the Notice convening the General Meeting to be held at 200 Strand, London WC2R 1DJ at 11 a.m. on 12 September 2014, at which the following Resolutions will be proposed.

Resolution 1 seeks approval for the Capital Reorganisation.

Resolution 2 seeks approval for the adoption of the New Investing Policy.

Resolution 3 provides the Directors with the general authority to allot and issue New Ordinary Shares generally including the Subscription Shares up to the aggregate nominal amount of £500,000.

Resolution 4 seeks to dis-apply statutory pre-emption rights up to the aggregate nominal amount of £500,000 to allot of the Subscription Shares and New Ordinary Shares generally.

Resolution 5 seeks to adopt the New Articles to reflect the Capital Reorganisation and authorise the Directors to change the name of the Company by Board resolution as permitted by the Act.

DEFINITIONS

The following definitions apply throughout this Circular, unless the context requires otherwise.

"Act"	the Companies Act 2006 (as amended from time to time);
"Admission"	admission of the Subscription Shares to trading on AIM becoming effective in accordance with the AIM Rules;
"AIM"	the AIM Market of London Stock Exchange;
"AIM Rules"	the AIM Rules for Companies issued by the London Stock Exchange from time to time;
"Capital Reorganisation"	the proposed sub-division and re-designation of the Existing Ordinary Shares into New Ordinary Shares and Deferred Shares, further details of which are set out in the paragraph entitled "Background to and reasons for the Capital Reorganisation" in the letter from the Chairman;
"Circular"	this document;
"Company" or "Evocutis"	Evocutis plc, a public limited company registered in England and Wales under registered number 05656604;
"CREST"	the system for paperless settlement of trades and the holding of uncertificated shares administered through Euroclear UK & Ireland Limited;
"Deferred Shares"	the new deferred shares of 0.99p each in the capital of the Company created pursuant to the Capital Reorganisation;
"Directors" or "Board"	the existing directors of the Company as at the date of this Circular;
"Enlarged Issued Ordinary Share Capital"	the  New Ordinary Shares in issue at Admission;
"Existing Investing Policy"	the investing policy adopted by the Company on 13 March 2014 at a general meeting and becoming effective on 19 March 2014;
"Existing Ordinary Shares"	the 174,675,828 issued ordinary shares of 1p each in the capital of the Company;
"Form of Proxy"	the form of proxy accompanying this Circular for use by Shareholders in connection with the General Meeting;
"General Meeting"	the general meeting of the Company to be held at 11 a.m. on 12 September 2014, or any adjournment to that meeting;
"Investing Company"	has the meaning as described to the definition of "Investing Company" set out in the AIM Rules, that is, any AIM company which has as its primary business or objective, the investing of its funds in securities, businesses or assets of any description;
"ISIN"	International Securities Identification Number;
"London Stock Exchange"	London Stock Exchange plc;
"New Articles"	the new articles of association of the Company a copy of the which are available for inspection at the Company's registered office until the conclusion of the General Meeting to be adopted pursuant to the Resolutions;
"New Board"	David Lenigas, Donald Strang and Thomas Bannatyne;
"New Investing Policy"	the new investing policy proposed to be adopted by the Company at the General Meeting, subject to shareholder approval at the General Meeting and outlined in paragraph 4 above;
"New Ordinary Shares"	the ordinary shares of 0.01p each following the sub-division and reclassification of the Existing Ordinary Shares pursuant to the Capital Reorganisation;
"Notice"	the notice of General Meeting which forms part of the Circular;
"Options"	the outstanding options to subscribe for ordinary shares in the capital of the Company at the date of this Circular;
"Proposals"	the proposed Capital Reorganisation, the proposed Subscription, the proposed adoption and implementation of the proposed New Investing Policy;
"Resolutions"	the resolutions set out in the Notice at the end of the Circular;
"RIS"	Regulatory Information Service;
"Shareholders"	holders of Existing Ordinary Shares and following the Capital Reorganisation, holders of New Ordinary Shares;
"Subscribers"	the subscribers for New Ordinary Shares pursuant to the Subscription;
"Subscription"	the Subscription by the Subscribers for the Subscription Shares;
"Subscription Letters"	the letters sent to the Subscribers detailing the Subscription;
"Subscription Price"	0.12p per New Ordinary Share; and
"Subscription Shares"	the 175,000,000 New Ordinary Shares to be issued by the Company pursuant to the Subscription.

 

END

 

 

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