Appendix to Schedule 1 announcement

RNS Number : 7352I

Venn Life Sciences Holdings PLC

11 December 2015

 

The Enterprise Securities Market ("ESM") is a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. ESM securities are not admitted to the Official List of the Irish Stock Exchange ("ISE"). A prospective investor should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with an independent financial adviser. Each ESM company is required pursuant to the ESM Rules for Companies to have an ESM Adviser. The ESM Adviser is required to make a declaration to the Irish Stock Exchange on admission in the form set out in Schedule Two to the Rules for Enterprise Securities Market Advisers. The Irish Stock Exchange has not itself examined or approved the contents of this document.

VENN LIFE SCIENCES HOLDINGS PLC

ISIN GB00B9275X97

APPENDIX TO SCHEDULE ONE ANNOUNCEMENT

FURTHER INFORMATION ON VENN LIFE SCIENCES HOLDINGS PLC (THE "COMPANY" OR "VENN") IN CONNECTION WITH ITS PROPOSED ADMISSION TO TRADING ON ESM

This Appendix is prepared in accordance with section (k) of the supplement to Schedule One of the ESM Rules for Companies ("ESM Rules") published by the Irish Stock Exchange. It includes information equivalent to that required for an admission document, which is not currently public. The Company's Public Record can be accessed freely on the Company's website www.vennlifesciences.com and via RNS (the "Public Record"). This Appendix should be read in conjunction with the Schedule One pre-admission announcement (the "Schedule One") made by the Company at least 20 days prior to ESM Admission and the Public Record. (This Appendix and Schedule One together constitute "the Announcement").

The Company and the Directors of the Company (whose name appear on page 2 of this document) (the "Directors") accept responsibility, both collectively and individually, for all the information contained in this document and compliance with the ESM Rules for Companies. To the best of the knowledge and belief of the Company and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

Davy, who is regulated in Ireland by the Central Bank of Ireland, has been appointed as Nominated Adviser, ESM Adviser and Joint Broker to the Company effective from ESM Admission. Davy is acting exclusively for the Company in connection with the ESM Admission and is not acting for any other person and will not be responsible to any person for providing the protections afforded to customers of Davy or for advising any other person in connection with the arrangements described in the Announcement. In accordance with the ESM Rules, Davy confirms to the Irish Stock Exchange that it has satisfied itself that the Directors have received advice and guidance as to the nature of their responsibilities and obligations to ensure compliance by the Company with the ESM Rules, and that, in its opinion and to the best of its knowledge and belief, all relevant requirements of the ESM Rules have been complied with. Davy accepts no liability whatsoever for the accuracy of any information or opinions contained in this document or for the omission of any material information, for which it is not responsible.

Copies of this document will be freely available to the public on the Company's website from the date of this document for the period of at least one month from ESM Admission.

1.     DIRECTOR INFORMATION

1.1     Details of the Directors are set out in the table below:

Name of Director	Age	Position
David Evans Anthony Richardson Jonathan Hartshorn Gracielle Anna Maria Beijerbacht-Schutjens Kees Groen Michael Ryan Paul Kennedy	55 51 45 49 54 58 70	(Non-Executive Chairman) (Chief Executive Officer) (Chief Financial Officer) (Chief Operations Officer) (Executive Director) (Non-Executive Director) (Non-Executive Director)

1.2      Mr Groen was a member of the Advisory Board of InPEC B.V. a Phase 1 CRO invested in by Kinesis. InPEC B.V. was liquidated on 20 April 2010.

1.3      Save as disclosed above or in the Company's Public Record, none of the Directors has:

(i)   any unspent convictions in relation to indictable offences;

(ii)   been made bankrupt or has made an individual voluntary arrangement with creditors or suffered the appointment of a receiver over any of his assets;

(iii)  been a director of any company which, whilst he was such a director or within 12 months after his ceasing to be such a director, was put into receivership, compulsory liquidation, creditors' voluntary liquidation, administration, company voluntary arrangement or any composition or arrangement with the company's creditors generally or with any class of creditors of any company or had an administrator or an administrative or other receiver appointed;

(iv)  been a partner in any partnership which, whilst he was a partner, or within 12 months after his ceasing to be a partner, was put into compulsory liquidation or had an administrator or an administrative or other receiver appointed or entered into any partnership voluntary arrangement;

(v)   had an administrative or other receiver appointed in respect of any asset belonging either to him or to a partnership of which he was a partner at the time of such appointment or within the 12 months preceding such appointment; or

(vi)  received any public criticisms by statutory or regulatory authorities (including recognised professional bodies) or has ever been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of the company.

1.4      Save as disclosed in the Company's Public Record, no Director, nor any connected person (being any person connected with a Director within the meaning of sections 252 to 255 of the UK Companies Act 2006 (the "2006 Act") has at the date of this document, or will have immediately following Admission, any interest, whether beneficial or non‐beneficial, in the share or loan capital of the Company or any of its subsidiaries or any related financial product referenced to the Company's ordinary shares. 

2.     BOARD PRACTICES

2.1     Service agreements

2.2     Service agreement with Jonathan Hartshorn

            Mr Hartshorn was appointed Chief Financial Officer and Executive Board member on 15 June 2015. The terms of his appointment are set out in a service agreement dated 1 May 2015. The terms provide:

2.2.1     a commencement date of 15 June 2015;

2.2.2     no fixed term and a notice period of two months' is required in the event of the termination or resignation of employment;

2.2.3     a fee of €120,000 gross per annum, subject to annual review.

2.3  Service agreement with Kees Groen

Mr Groen was appointed as an Executive Director on 19 October 2015 following the acquisition of Kinesis Pharma B.V. ("Kinesis") by the Company. Mr Groen was the founder and managing director of Kinesis, and is a regulatory expert with significant experience in pharmaceutical research and development, both with regulatory authorities and in industry. The terms of his appointment are set out in a letter dated 16 October 2015. The terms provide:

2.3.1     a commencement date of 19 October 2015;

2.3.3     no fixed term and a notice period of six months' is required in the event of the termination or            resignation of employment; and

2.3.3     a fee of €215,000 gross per annum, subject to annual review.

Mr Groen is beneficially interested in 4,780,320 ordinary shares in the Company, amounting to 7.94% of the issued share capital of the Company. These ordinary shares were received as part consideration for the sale of Kinesis and are subject to a lock up period of 12 months from 16 October 2015.

2.4  Service agreement with Gracielle Anna Maria Beijerbacht-Schutjens

Mrs Beijerbacht-Schutjens became an employee of the Company in March 2010, when her business Uptoyou B.V. was acquired by Venn. She was appointed as an Executive Director, Chief Operations Officer, on 6 January 2015. The terms of her employment are:

2.4.1     no fixed term and a notice period of six months' is required in the event of the termination or             resignation of employment;

2.4.2     a fee of €130,000 gross per annum, subject to annual review; and

2.4.3     a fee of €12,000 per annum for her services as a Board member.

3.     RISK FACTORS

Venn may not be able to successfully integrate entities or assets it has acquired or may acquire in the future

There can be no assurance that Venn will be able to fully or effectively integrate entities or assets it has acquired or which it may acquire in the future. Venn strives to achieve revenue and cost synergies, operating efficiencies and business growth opportunities, as well as other benefits from any acquisition. The integration of any such acquisition into Venn, however, may be complex and expensive and may present a number of challenges for management. In addition, expected business growth opportunities, revenue and cost synergies, operational efficiencies and other benefits may not materialise, in part because the assumptions upon which Venn determined to proceed with any such acquisition may prove to be incorrect. It is the policy of Venn to undertake due diligence in relation to any potential acquisition, but there can be no guarantee that such diligence has been or would be sufficient to uncover all material issues or that the quality of assets acquired will not negatively impact upon Venn's overall business. As a result, if anticipated synergies or other benefits of an acquisition are not achieved, or those achieved are materially different from those that were expected to be achieved prior to the acquisition, then this could have a material adverse effect on Venn's business, results of operations, financial condition and prospects.

Following the acquisition of Kinesis, Venn developed and is implementing an integration plan to improve the performance of the two companies. The process of integration of Kinesis is underway but there can be no assurance that Venn will be able to fully realise the expected revenue or cost synergies, operating efficiencies or business growth opportunities as well as other benefits from the business combination. Furthermore, any re-branding of the businesses could result in reduced demand for services.

4.     ORGANISATIONAL STRUCTURE

A list of Venn's principal subsidiaries as at 10 December 2015 are set out below:

Name	Country of incorporation	Proportion of ownership interest
Venn Life Sciences Limited	Ireland	100%
Venn Life Sciences (Ireland) Limited	Ireland	100%
Venn Life Sciences B.V.	Netherlands	100%
Venn Synergie S.A.S.	France	100%
Venn Life Sciences UK Limited	England and Wales	100%
Venn Life Sciences (NI) Limited	Northern Ireland	100%
Venn Life Sciences (Germany) GmbH	Germany	100%
Venn Life Science (France) S.A.S	France	85.2%
Innovenn UK Limited	England and Wales	55.6%
Innovenn Limited	Ireland	55.6%
Kinesis Pharma B.V.	Netherlands	100%
Kinesis Pharma Singapore Pte. Limited.	Singapore	100%

5.     EMPLOYEES

As at 10 December 2015, Venn had 144 employees (including the Executive Directors). The breakdown of the employees for each of the financial years ended 31 December 2012, 31 December 2013, 31 December 2014 and on 10 December 2015 was as follows:

Average Number of Employees
	2012		2013		2014		10 December 2015
Employees	55		43		62		144

6.     MAJOR SHAREHOLDERS

6.1     A list of those shareholders who, directly or indirectly, are interested in three per cent. or more of the current issued ordinary share capital of the Company is set out in the table below and represent the holdings last notified by those shareholders to the Company.

Name	No. of ordinary shares	% of existing share capital
Livingbridge VC LLP	5,263,157	8.7%
Calculus Capital Limited	5,106,117	8.5%
Kees Groen David Newton	4,780,320 2,200,000	7.9% 3.7%

6.2     As at the date of this document, no major shareholder has any different voting rights to the other holders of ordinary shares in the capital of the Company.

7.     ARTICLES OF ASSOCIATION

A copy of the Articles may be accessed at www.vennlifesciences.com/company-information/.

8.     MATERIAL CONTRACTS

In addition to the agreements summarised in the Public Record, the following contracts, not being contracts entered into in the ordinary course of business, have been entered into by the Company or its subsidiaries during the two years immediately preceding the date of the Announcement and are, or may be, material as of the date of the Announcement:

8.1     Appointment of Davy as Nominated Adviser, ESM Adviser and Joint Broker to Venn Life Sciences Holdings plc

The Company has entered into a Nominated Adviser, ESM Adviser and Joint Broker agreement dated 9 December 2015 with Davy pursuant to which the Company has appointed Davy to act as Nominated Adviser, ESM Adviser and Joint Broker to the Company effective from ESM Admission. The Company has agreed to pay to Davy a fee of €50,000 per annum (plus applicable VAT). The appointment of Davy as Nominated Adviser, ESM Adviser and Broker shall continue unless and until terminated by either party on 60 days' notice. Davy has reserved the right to terminate the agreement forthwith in certain circumstances. Under the agreement, the Company has given certain customary indemnities to Davy in connection with its engagement as the Company's Nominated Adviser, ESM Adviser and Joint Broker. The agreement is governed by English law.

8.2     Appointment of Hybridan LLP as Joint Broker to Venn Life Sciences Holdings plc

          The Company has entered into a Joint Broker agreement dated 24 August 2015 with Hybridan LLP ("Hybridan") pursuant to which the Company has appointed Hybridan to act as Joint Broker to the Company effective from 24 August 2015. The Company has agreed to pay Hybridan a fee of £28,000 per annum (plus applicable VAT). The appointment of Hybridan as Joint Broker shall continue unless and until terminated by either party on three months written notice. The agreement is governed by English Law.

8.3     Appointment of Walbrook PR Limited as Public Relations Consultant to Venn Life Sciences Holdings plc

          The Company has an annual consultancy agreement with Walbrook PR Ltd for the provision of PR and investor relations services at a monthly fee of £2,500 plus VAT. The appointment may be terminated by either party serving at least 1 month's written notice on the other.

9.     DIVIDEND POLICY

The Company has not paid a dividend and the Board do not propose to pay a dividend for the foreseeable future. However, the Board, once it is commercially prudent to do so, intends to implement a progressive dividend policy.

10.   CORPORATE GOVERNANCE

The Directors acknowledge the importance of the principles set out in the UK Corporate Governance Code. Although the UK Corporate Governance Code is not compulsory for AIM or ESM quoted companies, the Directors have a policy of applying the principles as far as practicable and appropriate for a company of its size.

11.   LITIGATION AND ARBITRATION

Neither the Company nor any subsidiary of Venn is, nor has at any time in the 12 months immediately preceding the date of this document been, involved in any governmental, legal or arbitration proceedings, and the Company is not aware of any governmental, legal or arbitration proceedings pending or threatened by or against the Company or any subsidiary of Venn, nor of any such proceedings having been pending or threatened at any time in the 12 months immediately preceding the date of this document, in each case which may have, or have had in the recent past, a significant effect on the Company's financial position or profitability.

12.   GENERAL

12.1    Davy has given and has not withdrawn its written consent to the issue of this document with the inclusion herein of its name in the form and context in which it is included.

12.2    On an ad hoc basis the Company engages Amrita Corporate Advisory Limited ("Amrita") for the provision of M&A advisory services. In the 12 months preceding the Company's application for Admission Amrita invoiced the company for £98,968 (inclusive of VAT).

12.3    Save as disclosed in this document or on the Company's Public Record, no person (excluding professional advisers identified in this document or on the Public Record and trade suppliers) has received directly or indirectly from Venn within the 12 months preceding the Company's application for Admission and no persons have entered into contractual arrangements to receive:

(i)   fees totalling €14,000 or more;

(ii)   securities in the Company with a value of €14,000 or more; or

(iii)  any other benefit with a value of €14,000 or more at the date of Admission.

12.4   Save as disclosed in the Company's Public Record, the Company is not aware of any person or entity who, directly or indirectly, jointly or severally, will or could exercise control over the Company immediately following Admission and there are no arrangements the operation of which could result in a change of control of the Company. As at the date of this document, all of the Company's shares carry the same voting rights.

12.5   Save as disclosed below no shares in the capital of the Company are under option:

Director	No. of ordinary shares under option	Exercise price	Exercise period
Tony Richardson	910,000	25p	From 28 January 2018 until 27 January 2025
Gracielle Beijerbacht-Schujens	770,000	25p	From 28 January 2018 until 27 January 2025
Other management and staff	1,190,000	25p	From 28 January 2018 to 27 January 2025
Jonathan Hartshorn	770,000	23p	From 3 November 2018 to 2 November 2025

12.6   The principal legislation under which the Company operates is the 2006 Act and the regulations made thereunder.

Dated: 10 December 2015

 

END

 

 

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