Proposed Acquisition from Murata and Fundraising

RNS Number : 1177V

CAP-XX Limited

29 November 2019

 

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29 November 2019

CAP-XX Limited

("CAP-XX" or the "Company")

Proposed Acquisition of Assets from Murata

Placing of 87,000,001 Placing Shares at 3 pence per share

Subscription of 4,666,666 Subscription Shares at 3 pence per share

Offer to Qualifying Participants of up to 25,000,000 Offer Shares at 3 pence per share

Proposed granting of authority to allot shares

and

Notice of General Meeting

CAP-XX Limited, a world leader in the design and manufacture of thin, prismatic supercapacitors and energy management systems, is pleased to announce that it has conditionally agreed to acquire the equipment currently used in the supercapacitor production lines (the "Assets") of Murata Manufacturing Co., Ltd of Japan ("Murata") (the "Acquisition").  The Board is of the view that the Acquisition represents a compelling opportunity to acquire high-quality, modern supercapacitor manufacturing assets, which have become available to CAP-XX at a very low cost.

The Company also announces that it has conditionally raised approximately £2.61 million (before expenses) by way of a placing (the "Placing") of 87,000,001 new Ordinary Shares in the Company ("Placing Shares") at a price of 3 pence per share (the "Issue Price"). The Company has also conditionally raised approximately £0.14 million (before expenses) by way of a subscription (the "Subscription") of 4,666,666 new Ordinary Shares in the Company ("Subscription Shares") at the Issue Price.

In addition, in order to provide the Company with additional working capital and to provide Shareholders who have not taken part in the Placing with an opportunity to participate in the proposed issue of New Ordinary Shares, the Company is providing all Qualifying Participants with the opportunity to subscribe at the Issue Price for an aggregate of up to 25,000,000 Offer Shares, to raise up to £0.75 million (before expenses).

It is intended that the net proceeds of the Placing and the Subscription will be used to fund the Acquisition and the process of integrating the Assets into CAP-XX's business activities following completion of the Acquisition, including decommissioning, shipping, the fit out of a new factory, recommissioning, engagement with customers and strategic alterations to CAP-XX's product ranges (the "Project").   The proceeds of the Offer to Qualifying Participants will be applied towards additional working capital for CAP-XX.

The Acquisition, the Placing, the Subscription and the Offer to Qualifying Participants are conditional, inter alia, on the approval of Shareholders of a resolution to grant the necessary authority to the Directors in accordance with the Company's dilution policy in order to allow the Directors to allot the Placing Shares, the Subscription Shares and the Offer Shares.

Highlights

·      Through the Acquisition, CAP-XX will become the owner and operator of Murata's supercapacitor production lines

·      Murata is currently a licensee of CAP-XX's technology and patents, and the Acquisition has been made possible by a change in Murata's group strategy

·      Murata's production lines are newer than CAP-XX's own production line and have a production capacity that is approximately three times greater

·      The Board believes that the Acquisition should enable CAP-XX to achieve significant levels of profitability once the production lines have been transferred

o  Anticipated that production of supercapacitors using the Assets will recommence in the third calendar quarter of 2020

·      Over 12 months of planning in respect of the Acquisition has already been completed

o  This has involved a strong focus on acquisition integration and production line recommissioning, supported by Murata

o  CAP-XX and Murata both have experience in the relocation of production lines

·      Conditional Placing and Subscription to raise approximately £2.75 million and Offer to Qualifying Participants to raise up to £0.75 million to fund the Acquisition, the Project and provide additional working capital

Anthony Kongats, Chief Executive of CAP-XX, commented:

"We are delighted that CAP-XX will become the owner and operator of Murata's supercapacitor production lines, which will increase our production capacity approximately three times once the lines have been transferred.  We would like to thank our new and existing shareholders for their continued support."

Bruce Grey, a Non-Executive Director of the Company, has agreed to subscribe for 833,333 Subscription Shares, which represents an approximate amount of £25,000 at the Issue Price.  Anthony Kongats, Chief Executive of the Company, has agreed to subscribe for 333,333 Subscription Shares, which represents an approximate amount of £10,000 at the Issue Price.  The FCA notifications, made in accordance with the requirements of the EU Market Abuse Regulation, are appended below.

A circular ("Circular") containing the Notice of General Meeting will be posted to shareholders shortly and will be made available shortly on the Company's website at: www.cap-xx.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 below.  All capitalised terms used throughout this announcement shall have the meanings given to such terms in the Definitions section of this announcement and as defined in the Circular.

Extracts from the Circular

(References to pages, parts or paragraphs below refer to the relevant pages, parts or paragraphs of the Circular. References to 'this document' refer to the Circular.)

Proposed Acquisition of Assets from Murata

Placing of 87,000,001 Placing Shares at 3 pence per share

Subscription of 4,666,666 Subscription Shares at 3 pence per share

Offer to Qualifying Participants of up to 25,000,000 Offer Shares at 3 pence per share

Proposed granting of authority to allot shares

and

Notice of General Meeting

1.  Introduction.

On 29 November 2019, the Board announced that the Company had conditionally agreed to acquire the supercapacitor manufacturing assets of Murata.  Through the Acquisition, CAP-XX will become the owner and operator of  Murata's supercapacitor production lines.  The Board is of the view that the Acquisition represents a compelling opportunity to acquire high-quality, modern supercapacitor manufacturing assets, which have become available to CAP-XX at a very low cost.  Murata is currently a licensee of CAP-XX's technology and patents, and the Acquisition has been made possible by a change in Murata's group strategy.

The Board believes that the Acquisition represents an opportunity to transform CAP-XX's business, through lower production costs and future incremental sales of small supercapacitors once the production lines have been transferred to a new CAP-XX production facility in Sydney area.  The Board plans for the Acquisition to be followed by new product launches to drive organic growth. 

Over 12 months of planning in respect of the Acquisition has already been completed. This has involved a strong focus on acquisition integration and production line recommissioning, supported by Murata. CAP-XX and Murata both have experience in the relocation of production lines.

The Company has conditionally raised a total of approximately £2.75 million (before expenses) by way of a Placing and a Subscription of a total of 91,666,667 new Ordinary Shares at the Issue Price of 3 pence per new Ordinary Share, in order to fund the Project. 

In addition, in order to provide Shareholders who have not taken part in the Placing or the Subscription with an opportunity to participate in the proposed issue of New Ordinary Shares, the Company is providing all Qualifying Participants with the opportunity to subscribe at the Issue Price for an aggregate of up to 25,000,000 Offer Shares, to raise up to £0.75 million (before expenses) at the Issue Price, payable in full on acceptance.  The Offer to Qualifying Participants is to be made to holders of Depositary Interests only. The proceeds of the Offer to Qualifying Participants will be applied towards additional working capital for CAP-XX.

The Acquisition, the Placing, the Subscription and the Offer to Qualifying Participants are conditional, inter alia, on the approval of Shareholders of a resolution to grant the necessary authority to the Directors in accordance with the Company's dilution policy in order to allow the Directors to allot the Placing Shares, the Subscription Shares and the Offer Shares. A Resolution in this respect is contained in the Notice of General Meeting which is set out at the end of this document.

The purpose of this document is to explain the background to and reasons for the Acquisition, the Placing, the Subscription and the Offer to Qualifying Participants, the use of proceeds, details of the Placing, the Subscription and the Offer to Qualifying Participants and to recommend that Shareholders vote in favour of the Resolution.

2.  Background to the Acquisition.

The Board considers CAP-XX to be a market leader in the design of prismatic, high power supercapacitors. The Board believes that CAP-XX has particularly strong intellectual property, especially within its suite of patents, which are currently licensed to four multinational electronic component companies, being Murata, AVX Corporation, TDK Corporation and Cornell-Dubilier Electronics Inc. 

CAP-XX has employed a dual strategy of intellectual property licencing and direct product sales.  Over 30 million CAP-XX supercapacitors have been sold, although the Board is of the view that, more recently, CAP-XX's direct sales have been limited by high factory production costs. 

Murata, a key CAP-XX licensee, informed CAP-XX that it was exiting its non-core business including supercapacitors, to focus on multilayer ceramic capacitors and lithium batteries.  CAP-XX is a natural purchaser of the Assets and the Board believes that the Acquisition represents a significant opportunity to drive the CAP-XX business forward.  Accordingly, CAP-XX has reached agreement with Murata to acquire its production lines, along with introductions to Murata's customers. 

Following completion of the Acquisition, the production lines will be relocated to a new factory facility Sydney. The Board anticipates that production of supercapacitors using the Assets will recommence in the third calendar quarter of 2020.

CAP-XX's direct costs of production are currently significantly higher than those of Murata.  Accordingly, the Board believes that the Acquisition and the Project should enable CAP-XX to achieve significant levels of profitability once the production lines have been transferred, through lower production costs and incremental sales of small supercapacitors.  The Board also expects additional benefits through broader allocation of overheads and faster product development cycles. 

As part of the Project additional levels of inventory will be built up by Murata ahead of it ceasing production, to ensure that the interim needs of Murata's current customers (being CAP-XX's prospective future customers) are satisfied until the Assets are recommissioned by CAP-XX. 

3.  Background to the Assets and the Project.

The Assets.

Murata has invested significantly to date to develop its supercapacitor business.  The Assets being acquired comprise the supercapacitor production lines used for the production of Murata's DMF, DMT and DMH products.

The DMT is a high-power, ultra-long life, high temperature supercapacitor that is suited for extreme applications such as solid state drives and automotive applications. Because of its thinness it can be assembled onto printed circuit boards similar to the majority of electronic components. This provides considerable scalability.

The DMF is a general purpose, very high power, long life supercapacitor that has a very low ESR and a wide operating range. It is suitable for high-brightness LED flash, high-power audio, smart meters etc. Its thinness means it can also be assembled onto printed circuit boards similar to the majority of electronic components and this provides considerable scalability.

The DMH is an ultra-thin supercapacitor with a wide operating temperature range. At only 0.4mm thick it is targeted at smart phones, smart credit cards, wearable devices, 3V coin cell battery applications and other 'Internet of Things' applications where thickness is critical.

Murata's supercapacitor production lines are newer than CAP-XX's own production line and have a production capacity that is approximately three times greater than CAP-XX's current production facilities. 

Murata has also undertaken that it shall not assert any rights against CAP-XX under any patents or intellectual property (excluding trademarks) owned by Murata and necessary for CAP-XX to operate the equipment or manufacture and sell certain electrochemical double layer capacitors.

Murata's product sales.

The Board understands that Murata's total supercapacitor sales are currently running at approximately A$14 million per annum.  For the year ended 30 June 2019, CAP-XX reported revenue from continuing operations of approximately A$3.2 million (which includes royalties from its licence to Murata).

Murata's 2019 calendar sales are well diversified, with its supercapacitors being sold to over sixty customers.  Approximately 60% of Murata's 2019 expected calendar sales are made into Europe, with approximately 30% and 10% of sales being made into Asia and the USA respectively. 

The Board believes that Murata's sales mix is complementary to that of CAP-XX, as the main market segments for both CAP-XX and Murata are IoT wireless sensors, automotive and smart meters.

In addition, the Board believes that once the Murata supercapacitor lines are installed in Sydney, there will be opportunities for CAP-XX to review the range of products that it offers.

4.  Project strategy and anticipated milestones.

Anticipated Project milestones.

The Board intends that the execution of the following anticipated timetable will allow the Project to deliver a clear path for CAP-XX's future profitability:

·     Fourth calendar quarter of 2019: certain of CAP-XX's staff will complete training in respect of the Assets in Japan.

·     First calendar quarter of 2019: Murata's production will be stopped and the Assets will be shipped to Australia.  CAP-XX's existing Sydney-based production assets will also be moved to the proposed new factory location.

·     Second calendar quarter of 2019: the Assets will be recommissioned in Australia.

·     Third calendar quarter of 2019: production via the Assets recommences.

Anticipated product pipeline.

The Board anticipates that the manufacture and sale by CAP-XX of two of the existing Murata supercapacitor series will commence by the end of the second half calendar 2020, with full product deployment by the end of that year.  Production of a further series will commence in the second half of 2020 with the expectation that full product deployment by CAP-XX of the existing Murata supercapacitor series will occur in the first calendar quarter of 2022. 

Whilst the Company intends for certain of its existing series of supercapacitors to be unchanged following the Acquisition, the Board believes that the Acquisition will provide opportunities for CAP-XX to refine the range of products that it offers.

The Board intends for the Acquisition to be followed by new product streams aimed at driving future growth. These include the previously announced 3 Volt (3V) thin prismatic supercapacitor to be introduced to the market by the end of this year and the introduction of a new 'I' series in the first calendar quarter of 2020.

5.  Project budget and use of proceeds

In addition to satisfying the consideration for the Acquisition, which is not considered to be a material sum, and the costs of acquiring new manufacturing equipment, the principal Project costs are as follows:

·     labour;

·     travel;

·     freight;

·     insurance;

·     the installation process in Sydney; and

·     Project contingency.

The total budget for the Acquisition and the Project is approximately A$5.8 million (approximately £3.1 million).  However, the Board believes that once research and development rebates in respect of the Project, net property savings and CAP-XX's other working capital needs have been accounted for, the Company's overall funding requirement will be approximately A$5.3 million (approximately £2.8 million), which is proposed to be financed through the Placing and the Subscription.  The proceeds of the Offer to Qualifying Participants will be applied towards additional working capital for CAP-XX.

6.  Details of the Placing

Subject to, inter alia, Admission, the Company will issue 87,000,001 Placing Shares which will raise approximately £2.61 million, before expenses, and approximately £2.4 million after the expenses of the Placing. The Placing Shares have been conditionally placed by Allenby Capital, as agent for the Company, with institutional and other investors.

Application will be made for the Placing Shares to be admitted to trading on AIM and dealings are expected to become effective on 3 January 2020.

The Placing is conditional, inter alia, upon:

·     the agreement implementing the Acquisition entered or to be entered into between the Company and Murata having been executed by all parties thereto and not having been rescinded or terminated prior to Admission;

·     the passing of the Resolution at the General Meeting;

·     the Placing and Offer to Qualifying Participants Agreement becoming unconditional and not having been terminated in accordance with its terms prior to Admission; and

·     Admission becoming effective by no later than 8.00 a.m. UK time on 3 January 2020 or such later time and/or date (being no later than 8.00 a.m. UK time on 17 January 2020) as Allenby Capital and the Company may agree.

If any of the conditions are not satisfied, the Placing Shares (and the Subscription Shares and the Offer Shares) will not be issued and all monies received from the Placees and Qualifying Participants will be returned to them (at the Placees', the Subscribers' and Qualifying Participants' risk and without interest) as soon as possible thereafter. The purpose of the General Meeting is to seek approval from Shareholders of the Resolution to enable the Transaction to proceed.

The Placing Shares to be issued pursuant to the Placing will represent approximately 19.7 per cent. of the Enlarged Share Capital assuming full take-up of the Offer to Qualifying Participants. If there is no take-up of the Offer to Qualifying Participants, the Placing Shares to be issued pursuant to the Placing will represent approximately 20.9 per cent. of the Enlarged Share Capital.

The Placing Shares will, following Admission, rank in full for all dividends and distributions declared, made or paid in respect of the issued ordinary share capital of the Company after the date of their issue and will otherwise rank pari passu in all other respects with the Existing Ordinary Shares.

Allenby Capital, as agent for the Company, has conditionally agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Issue Price under the terms of the Placing and Offer to Qualifying Participants Agreement. The Placing is not underwritten and is not subject to clawback. The obligations of Allenby Capital under the Placing and Offer to Qualifying Participants Agreement is conditional, inter alia, upon Admission having occurred by not later than 3 January 2020 (or such later date as may be agreed, being no later than 17 January 2020), there being prior to Admission no material breach of the warranties given to Allenby Capital, and Shareholders passing the Resolution at the General Meeting.

The Placing and Offer to Qualifying Participants Agreement contains warranties from the Company in favour of Allenby Capital and in relation to, inter alia, the accuracy of the information contained in this document and certain other matters relating to the Company and its business, the Acquisition and the Project. In addition, the Company has agreed to indemnify Allenby Capital in relation to certain liabilities that it might occur in respect of the Placing, the Subscription and the Offer to Qualifying Participants.

Allenby Capital may terminate the Placing and Offer to Qualifying Participants Agreement in specified circumstances (including for breach of warranty at any time prior to Admission, if such breach is reasonably considered by Allenby Capital to be material in the context of the Placing and the Offer to Qualifying Participants). If the conditions of the Placing and Agreement are not fulfilled on or before the relevant date in the Placing and Offer to Qualifying Participants Agreement, application monies will be returned to applicants without interest as soon as possible thereafter.

7.  Details of the Subscription

Subject to, inter alia, Admission, the Company will issue 4,666,666 Subscription Shares at the Issue Price, which will raise approximately £0.14 million before expenses. Application will be made for the Subscription Shares to be admitted to trading on AIM and dealings are expected to become effective on 3 January 2020.

The Subscription Shares to be issued pursuant to the Subscription will represent approximately 1.06 per cent. of the Enlarged Share Capital assuming full take-up of the Offer to Qualifying Participants. If there is no take-up of the Offer to Qualifying Participants, the Subscription Shares to be issued pursuant to the Subscription will represent approximately 1.12 per cent. of the Enlarged Share Capital.

The Subscription Shares will, following Admission, rank in full for all dividends and distributions declared, made or paid in respect of the issued ordinary share capital of the Company after the date of their issue and will otherwise rank pari passu in all other respects with the Existing Ordinary Shares.

The Subscription is conditional, inter alia, upon:

·     the passing of the Resolution at the General Meeting;

·     the Placing and Offer to Qualifying Participants Agreement becoming unconditional and not having been terminated in accordance with its terms prior to Admission; and

Admission becoming effective by no later than 8.00 a.m. UK time on 3 January 2020 or such later time and/or date (being no later than 8.00 a.m. UK time on 17 January 2020) as Allenby Capital and the Company may agree.

8.  Details of the Offer to Qualifying Participants

The Company is proposing to raise up to £0.75 million before expenses from existing shareholders in the Company under the Offer to Qualifying Participants. A total of, in aggregate, up to 25,000,000 Offer Shares are available to Qualifying Participants pursuant to the Offer to Qualifying Participants at the Issue Price, payable in full on acceptance.

If applications are received from Qualifying Participants for more than the available number of Offer Shares, no assurance can be given that applications by Qualifying Participants will be met in full or in part or at all. Applications made may be allocated in such manner as the Directors may determine in their absolute discretion.

Not all Shareholders will be Qualifying Participants. Shareholders who are located in, or are citizens of, or have a registered office in certain overseas jurisdictions will not qualify to participate in the Offer to Qualifying Participants. The attention of Overseas Shareholders is drawn to paragraph 6 of Part III of this document.

The Offer to Qualifying Participants is to be made to holders of Depositary Interests only, applications will only be valid if made through the CREST system as more fully described in Part III of this document.

Application has been made for the Offer Entitlements to be admitted to CREST. It is expected that such Offer Entitlements will be credited to CREST on 4 December 2019. The Offer Entitlements will be enabled for settlement in CREST until 11.00 a.m. UK time on 23 December 2019. Applications through the CREST system may only be made by the Qualifying CREST Shareholder originally entitled or by a person entitled by virtue of bona fide market claims. The Offer Shares must be paid in full on application. The latest time and date for receipt of CREST applications and payment in respect of the Offer to Qualifying Participants is 11.00 a.m. UK time on 23 December 2019.

Qualifying Participants should note that the Offer to Qualifying Participants is not a rights issue and therefore the Offer Shares which are not applied for by Qualifying Participants will not be sold in the market for the benefit of the Participants who do not apply under the Offer to Qualifying Participants. Further details of the Offer to Qualifying Participants and the terms and conditions on which it is being made, including the procedure for application and payment, are contained in Part III of this document.

The Offer to Qualifying Participants is conditional on the Placing becoming or being declared unconditional in all respects and not being terminated before Admission (as the case may be). The principal conditions to the Placing are: (a) the agreement implementing the Acquisition entered or to be entered into between the Company and Murata having been executed by all parties thereto and not having been rescinded or terminated prior to Admission; (b) the passing of the Resolution at the General Meeting; (c) the Placing and Offer to Qualifying Participants Agreement having become unconditional in all respects (save for the condition relating to Admission); and (d) Admission becoming effective by no later than 8.00 a.m. UK time on 3 January 2020 or such later time and/or date (being no later than 8.00 a.m. UK time on 17 January 2020) as Allenby Capital and the Company may agree. Accordingly, if these conditions are not satisfied or waived (where capable of waiver), the Offer to Qualifying Participants will not proceed and the Offer Shares will not be issued and all monies received by Computershare will be returned to the applicants (at the applicants' risk and without interest) as soon as possible thereafter. Any Offer Entitlements admitted to CREST will thereafter be disabled.

The Offer Shares (and the Placing Shares and the Subscription Shares) will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

Application will be made to the London Stock Exchange for the Admission of the Offer Shares to trading on AIM. It is expected that Admission will occur and that dealings will commence at 8.00 a.m. UK time on 3 January 2020 at which time it is also expected that the Offer Shares will be enabled for settlement in CREST.

9.  Related Party Transactions

Bruce Grey, a Non-Executive Director of the Company, has agreed to subscribe for 833,333 Subscription Shares, which represents an approximate amount of £25,000 at the Issue Price.  Anthony Kongats, Chief Executive of the Company, has agreed to subscribe for 333,333 Subscription Shares, which represents an approximate amount of £10,000 at the Issue Price. 

Canaccord Genuity Group Inc has subscribed for 15,333,333 Placing Shares, which represents an approximate aggregate amount of £460,000 at the Issue Price.

Bruce Grey and Anthony Kongats, as Directors of CAP-XX are related parties of the Company as defined by the AIM Rules.  Canaccord Genuity Group Inc is a substantial shareholder of CAP-XX, currently having an interest in approximately 12.09% of the voting rights of the Company, and is therefore also a related party of the Company as defined by the AIM Rules.

As such, the participation of Bruce Grey, Anthony Kongats and Canaccord Genuity Group Inc in the Subscription and the Placing respectively constitute related party transactions pursuant to AIM Rule 13.

The Directors of CAP-XX (with the exception of Bruce Grey and Anthony Kongats) consider, having consulted with the Company's nominated adviser, Allenby Capital, that the terms of the participation of Bruce Grey and Anthony Kongats in the Subscription and Canaccord Genuity Group Inc in the Placing are fair and reasonable insofar as the Company's shareholders are concerned. 

10.        Reason for the Resolution

CAP-XX is a company whose shares are admitted to trading on AIM but is not incorporated in the UK, and therefore the rights of shareholders are different from the rights of shareholders of a UK incorporated company.

The Companies Act 2006 (UK legislation) provides that the directors of a company incorporated in the UK may not allot shares unless authorised to do so by shareholders of such company. 

While CAP-XX is not incorporated in the UK, the Directors are mindful of the requirements of UK law and of the expectations that UK institutional and other investors may have when they invest in CAP-XX.  Accordingly, the Directors of CAP-XX have adopted a Dilution Policy as follows:

          "the Company will not, without the approval of shareholders, issue further securities for cash unless :

          (i)    such issues do not result in the aggregate number of securities issued for cash in the 12 months before the issue date exceeding 15 per cent. of the entire issued capital of CAP-XX; or

          (ii)   such issues are done by way of a rights issue or offering in favour of all holders of securities".

Under its Dilution Policy CAP-XX may currently issue, within the 15 per cent. limit, approximately 48,677,216 Ordinary Shares without shareholder approval. The intention of the proposed Resolution set out in the Notice of General Meeting is to seek Shareholders' approval for authority to issue up to 116,666,667 new Ordinary Shares which will raise up to approximately £3.5 million (before the deduction of expenses), via the issue of the New Ordinary Shares at 3 pence per share. 

11.        General Meeting.

Set out at the end of this document is a notice convening the General Meeting to be held at the offices of CAP-XX at Unit 9/12 Mars Road, Lane Cove, Australia at 6:00 p.m. AEDT on 30 December 2019 for the purposes of considering and, if thought fit, passing the Resolution.

The Resolution will be proposed as an ordinary resolution. It is to authorise the Directors (conditionally upon Admission) to allot the New Ordinary Shares.

The attention of Shareholders is also drawn to the voting intentions of the Directors as set out in the paragraph entitled "Recommendation" below.

12.       Action to be taken in relation to the General Meeting

A Form of Proxy for use at the General Meeting accompanies this document. The Form of Proxy should be completed and signed in accordance with the instructions printed on it and returned to the Company's registrars, Computershare Investor Services Pty Ltd, as soon as possible and, in any event, so as to be received by no later than 6:00 p.m. AEDT on 24 December 2019.  The completion and return of a Form of Proxy will not preclude Shareholders from attending the General Meeting and voting in person should they so wish.

In respect of Depositary Interests, a Form of Instruction is also attached.  If required it should be completed, signed and returned to Computershare Investor Services PLC in accordance with the instructions on that form.  This form must be received by 10:00 a.m. UK time on 23 December 2019.

Please note that it is important that you complete the Form of Instruction if you hold Depository Interests and the Form of Proxy if you hold Ordinary Shares in certificated form.

To give an instruction via the CREST system, CREST messages must be received by the issuer's agent (ID number: 3RA50) not later than 10.00 a.m. UK time on 23 December 2019. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp generated by the CREST system) from which the issuer's agent is able to retrieve the message. The Company may treat as invalid an appointment sent by CREST in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

13.        Action to be taken in respect of the Offer to Qualifying Participants

Qualifying Participants will have Offer Entitlements credited to their stock accounts in CREST. You should refer to the procedure for application set out in paragraph 3.1 of Part III (Terms and Conditions of the Offer to Qualifying Participants) of this document.  If you do not wish to apply for any Offer Shares under the Offer to Qualifying Participants, you should not take action regarding the Offer to Qualifying Participants in CREST. Shareholders are nevertheless requested to complete and return the Form of Proxy or Form of Instruction. If you are not a Qualifying Shareholder, no application form will be sent to you in respect of the Offer to Qualifying Participants, which is to be provided to holders of Depositary Interests only.

The relevant CREST instructions must have settled in accordance with the instructions in paragraph 3.1 of Part III of this document by no later than 11.00 a.m. UK time on 23 December 2019. Qualifying Participants who are CREST sponsored members should refer to their CREST sponsors regarding the action to be taken in connection with this document and the Offer to Qualifying Participants.

14.        Overseas Shareholders

The attention of Qualifying Participants who have registered addresses outside the United Kingdom, or who are citizens or residents of countries other than the United Kingdom, or who are holding Existing Ordinary Shares for the benefit of such persons (including, without limitation, custodians, nominees, trustees and agents) or who have a contractual or other legal obligation to forward this document to such persons, is drawn to the information which appears in paragraph 6 of Part III of this document.

In particular, Qualifying Participants who have registered addresses in or who are resident in, or who are citizens of, countries other than the UK (including without limitation the United States), should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their entitlements under the Offer to Qualifying Participants.

15.        Dealings

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM.  It is expected that subject to passing the Resolution at the General Meeting and the Placing and Offer to Qualifying Participants becoming unconditional in all respects (save for Admission), Admission will become effective, and dealings in the New Ordinary Shares will commence, at 8:00 a.m. UK time on 3 January 2020.

16.        Recommendation

Shareholders should be aware that if the Resolution is not approved at the General Meeting, the Company will not proceed with the Acquisition and the Project.

The Directors consider that the Acquisition, the Placing, the Subscription and the Offer to Qualifying Participants are in the best interests of the Company and the Shareholders as a whole.  The Directors unanimously recommend Shareholders to vote in favour of the Resolution to be proposed at the General Meeting as they intend to do so in respect of their own beneficial holdings amounting, in aggregate, to 20,840,239 Existing Ordinary Shares representing approximately 6.4 per cent of the Existing Ordinary Shares.

KEY STATISTICS

PLACING AND SUBSCRIPTION STATISTICS
Issue Price	3p
Number of Existing Ordinary Shares	324,514,775
Number of Placing Shares	87,000,001
Number of Subscription Shares	4,666,666
Number of Ordinary Shares in issue immediately following Admission of the Placing Shares and the Subscription Shares*	416,181,442
Placing Shares and Subscription Shares as a percentage of the Existing Ordinary Shares in issue immediately following the Placing Shares and the Subscription Shares*	22.0%
Gross Proceeds of the Placing and the Subscription	Approximately £2.75 million
ISIN Code for the Existing Ordinary Shares	AU0000XINAS1
OFFER TO QUALIFYING PARTICIPANTS STATISTICS
Issue Price	3p
Number of Offer Shares	Up to 25,000,000
Gross proceeds from the Offer to Qualifying Participants **	Up to approximately £0.75 million
Enlarged Share Capital following the Placing, the Subscription and the Offer to Qualifying Participants **	441,181,442
Offer Shares as a percentage of the Enlarged Share Capital **	5.7%
ISIN Code for Offer Entitlements	AU0000067712
* Prior to the issue of the Offer Shares ** On the assumption that the Offer to Qualifying Participants is fully subscribed

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Date of this document	29 November 2019
OFFER TO QUALIFYING PARTICIPANTS TIMETABLE
Record Date for the Offer to Qualifying Participants	2 December 2019
Ex-entitlement Date	3 December 2019
Offer Entitlements credited to stock accounts of Qualifying Participants	4 December 2019
Latest time and date for payment in full under the Offer to Qualifying Participants or settlement of relevant CREST instruction (if appropriate)	23 December 2019
GENERAL MEETING TIMETABLE
Latest time and date for receipt of Forms of Instruction	9.00pm AEDT on 23 December 2019
Latest time and date for receipt of Forms of Proxy	6.00pm AEDT on 24 December 2019
General Meeting	6.00pm AEDT on 30 December 2019
Announcement of the result of the Offer to Qualifying Participants	27 December 2019
Announcement of result of General Meeting	30 December 2019
ADMISSION AND SETTLEMENT TIMETABLE
Admission and commencement of dealings in the New Ordinary Shares on AIM	3 January 2020
CREST accounts credited with depositary interests in respect of the New Ordinary Shares (CREST shareholders only)	3 January 2020
If any of the details contained in the timetable above should change, the revised times and dates will be notified by means of an announcement through a Regulatory Information Service. Certain of the events in the above timetable are conditional upon, amongst other things, the approval of the Resolution to be proposed at the General Meeting. All references are to London time unless stated otherwise.

DEFINITIONS

The following definitions apply throughout this document, unless the context requires otherwise:

"A$"	the Australian dollar, the legal currency of Australia;
"Acquisition"	the proposed conditional acquisition by the Company of the Assets from Murata;
"Admission"	admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules;
"AEDT"	Australian Eastern Daylight Time;
"AIM"	AIM, a market operated by the London Stock Exchange;
"AIM Rules"	the AIM Rules for Companies published by the London Stock Exchange from time to time;
"Allenby Capital"	Allenby Capital Limited;
"Assets"	the equipment currently used in Murata's supercapacitor production lines;
"Board" or "Directors"	the directors of the Company whose names are set out on page 3 of this document;
"certificated" or "in certificated form"	a share or other security which is not in uncertificated form (that is, not in CREST);
"Company" or "CAP-XX"	CAP-XX Limited, registered in Australia with Australian Company Number 050 845 291;
"Completion"	completion of the Acquisition;
"Computershare"	Computershare Investor Services PLC or Computershare Investor Services Pty Ltd, as appropriate;
"CREST"	the relevant system (as defined in the Uncertificated Securities Regulations 2001 SI 2001: No.3755 (as amended)) in respect of which Euroclear is the operator (as defined in those regulations);
"CREST Manual"	the rules governing the operation of CREST, consisting of the CREST Reference Manual, CREST International Manual, CREST Central Counterparty Service Manual, CREST Rules, Registrars Service Standards, Settlement Discipline Rules, CREST Courier and Sorting Services Manual, Daily Timetable, CREST Application Procedures and CREST Glossary of Terms (all as defined in the CREST Glossary of Terms promulgated by Euroclear on 15 July 1996 and as amended since) as published by Euroclear;
"CREST member"	a person who has been admitted to CREST as a system-member (as defined in the CREST Manual);
"CREST member account ID"	the identification code or number attached to a member account in CREST;
"CREST participant"	a person who is, in relation to CREST, a system-participant (as defined in the CREST Regulations);
"CREST participant ID"	shall have the meaning given in the CREST Manual issued by Euroclear;
"CREST payment"	shall have the meaning given in the CREST Manual issued by Euroclear;
"CREST Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001/3755) (as amended);
"CREST Sponsor"	a CREST participant admitted to CREST as a CREST sponsor;
"CREST Sponsored member"	a CREST member admitted to CREST as a sponsored member;
"Depositary Interests"	depositary interests representing Ordinary Shares;
"Enlarged Share Capital"	the entire issued ordinary share capital of the Company immediately following the issue and allotment of the New Ordinary Shares;
"EU"	the European Union;
"Euroclear"	Euroclear UK & Ireland Limited;
"Existing Ordinary Shares" or "Existing Issued Share Capital"	the 324,514,775 Ordinary Shares in issue as at the date of this document, including Depositary Interests where the context requires;
"Ex-entitlement Date"	the date on which the Existing Ordinary Shares are marked ''ex'' for entitlement under the Offer to Qualifying Participants, being 3 December 2019;
"FCA"	the UK Financial Conduct Authority;
"Forms of Instruction"	the form of written instruction for use by Depositary Interest holders in connection with the General Meeting;
"Form of Proxy"	the form of proxy for use by Shareholders at the General Meeting, which accompanies this document;
"FSMA"	the Financial Services and Markets Act 2000 (as amended);
"General Meeting"	the general meeting of the Company to be held at the offices of CAP-XX Limited at Units 9/12 Mars Road, Lane Cove, NSW 2006, Australia at 6:00pm AEDT on 30 December 2019 or any adjournment thereof, notice of which is set out at the end of this document;
"ISIN"	International Securities Identification Number;
"Issue Price"	3 pence per New Ordinary Share;
"London Stock Exchange"	London Stock Exchange plc;
"Long Stop Date"	17 January 2020
"Money Laundering Regulations"	the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and all other applicable anti-money-laundering rules and regulations from time to time;
"Murata"	Murata Manufacturing Co., Ltd of Japan, an electronic component manufacturer and a licensee of CAP-XX's patents;
"New Ordinary Shares"	together, the Placing Shares, the Subscription Shares and up to 25,000,000 Offer Shares;
"Notice of General Meeting"	the notice convening the General Meeting, which is set out at the end of this document;
"Offer to Qualifying Participants"	the conditional invitation made to Qualifying Participants to apply to subscribe for the Offer Shares at the Issue Price on the terms and subject to the conditions set out in Part III of this document;
"Offer Shares"	up to 25,000,000 new Ordinary Shares of each being made available to Qualifying Participants pursuant to the Offer to Qualifying Participants;
"Offer Entitlement"	the entitlement of Qualifying Participants to subscribe for Offer Shares allocated to Qualifying Participants on the Record Date pursuant to the Offer to Qualifying Participants;
"Overseas Shareholders"	a Shareholder with a registered address outside the United Kingdom;
"Ordinary Shares"	ordinary shares of no par value in the capital of the Company, including Depositary Interests where the context requires;
"Placees"	subscribers for Placing Shares;
"Placing"	the placing by the Company of the Placing Shares with certain institutional investors and existing Shareholders, otherwise than on a pre-emptive basis, at the Issue Price;
"Placing and Offer to Qualifying Participants Agreement"	the conditional agreement entered into on 29 November 2019 between the Company, the Directors and Allenby Capital in respect of the Placing and the Offer to Qualifying Participants, as described in this document;
"Placing Shares"	87,000,001 new Ordinary Shares to be issued by the Company pursuant to the Placing;
"Project"	the Acquisition and the process of integrating the Assets into CAP-XX's business activities following Completion, including decommissioning, shipping, the fit out of a new factory, recommissioning, engagement with customers and strategic alterations to CAP-XX's product ranges to be financed by the proceeds of the Placing and the Subscription;
"Prospectus Regulation"	the EU Prospectus Regulation (2017/1129/EU);
"Prospectus Regulation Rules"	the Prospectus Regulation Rules issued by the FCA;
"Qualifying Participants"	holders of Existing Ordinary Shares, who are eligible to participate under the terms of the Offer to Qualifying Participants and hold Existing Ordinary Shares via Depository Interests in a CREST account and are on the register of members of the Company at the Record Date (but excluding any Overseas Shareholder who has a registered address in Australia, or in the United States of America or any other Restricted Jurisdiction);
"Receiving Agents"	Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6AH;
"Record Date"	6.00 p.m. UK time on 2 December 2019 in respect of the entitlements of Qualifying Participants under the Offer to Qualifying Participants;
"Registrars"	Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS13 8AE;
"Regulatory Information Service"	has the meaning given in the AIM Rules for Companies;
"Resolution"	the resolution to be proposed at the General Meeting set out in the Notice of General Meeting;
"Restricted Jurisdiction'"	the United States, Canada, Australia (including any Shareholders who are based in Australia regardless of whether they hold Ordinary Shares or Depositary Interests), Japan, New Zealand, the Republic of South Africa, Cayman Islands, Singapore, Barbados, Switzerland and the State of Kuwait and any other jurisdiction where the extension or availability of the Placing, the Subscription or the Offer to Qualifying Participants would breach any applicable law;
"Securities Act"	US Securities Act of 1933 (as amended);
"Shareholders"	persons who are registered as holders of Ordinary Shares (including holders of Depositary Interests) from time to time;
"Subscribers"	investors to whom Subscription Shares are to be issued pursuant to the Subscription;
"Subscription"	the conditional subscription by Subscribers to subscribe for the Subscription Shares at the Issue Price;
"Subscription Shares"	the 4,666,666 new Ordinary Shares to be issued by the Company and subscribed for pursuant to the Subscription;
"UK" or "United Kingdom"	the United Kingdom of Great Britain and Northern Ireland;
"Uncertificated" or "in Uncertificated form"	recorded on the relevant register or other record of the Ordinary Shares or other security concerned as being held in uncertificated form in CREST, and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST;
"US", "USA" or "United States"	the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia and all other areas subject to its jurisdiction;
"USE"	has the meaning given in paragraph 3.2 (c) of Part III of this document;
"USE Instruction"	has the meaning given in paragraph 3.2 (c) of Part III of this document; and
"£" or "Sterling"	pounds sterling, the lawful currency of the United Kingdom.

For further information contact:

CAP-XX Limited

Anthony Kongats (Chief Executive Officer)                                    [phone]

Allenby Capital (Nominated Adviser and Broker)

David Hart / Alex Brearley                                                              [phone]

Kreab (Financial PR)

Robert Speed                                                                                 [phone]

More information is available at www.cap-xx.com

Notes to Editors:

CAP-XX (LSE: CPX) is a world leader in the design and manufacture of thin, prismatic supercapacitors and energy management systems used in portable and small-scale electronic devices, and to an increasing extent, in larger applications such as automotive and renewable energy. The unique feature of CAP-XX supercapacitors is their very high power density and high energy storage capacity in a space-efficient prismatic package. These attributes are essential in power-hungry consumer and industrial electronics, and deliver similar benefits in automotive and other transportation applications. For more information about CAP-XX, visit www.cap-xx.com

Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them

1.	Details of the person discharging managerial responsibilities / person closely associated
a)	Name	Anthony Kongats
2.	Reason for the Notification
a)	Position/status	Director - Chief Executive
b)	Initial notification/Amendment	Initial notification
3.	Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)	Name	CAP-XX Limited
b)	LEI	213800HECUSIYXH3WN26
4.	Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)	Description of the Financial instrument, type of instrument	Ordinary shares in CAP-XX Limited
	Identification code	Identification code (ISIN) for CAP-XX Limited ordinary shares: AU0000XINAS1
b)	Nature of the transaction	Subscription of new ordinary shares
c)	Price(s) and volume(s)	Price(s) Volume(s) £0.03 per share 333,333
d)	Aggregated information: ·Aggregated volume ·Price	333,333 £0.03 per share
e)	Date of the transaction	29 November 2019
f)	Place of the transaction	Outside a trading venue - conditional issue of new ordinary shares

1.	Details of the person discharging managerial responsibilities / person closely associated
a)	Name	Bruce Grey
2.	Reason for the Notification
a)	Position/status	Director - Non-Executive Director
b)	Initial notification/Amendment	Initial notification
3.	Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)	Name	CAP-XX Limited
b)	LEI	213800HECUSIYXH3WN26
4.	Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)	Description of the Financial instrument, type of instrument	Ordinary shares in CAP-XX Limited
	Identification code	Identification code (ISIN) for CAP-XX Limited ordinary shares: AU0000XINAS1
b)	Nature of the transaction	Subscription of new ordinary shares
c)	Price(s) and volume(s)	Price(s) Volume(s) £0.03 per share 833,333
d)	Aggregated information: ·Aggregated volume ·Price	833,333 £0.03 per share
e)	Date of the transaction	29 November 2019
f)	Place of the transaction	Outside a trading venue - conditional issue of new ordinary shares

Information to Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the New Ordinary Shares have been subject to a product approval process, which has determined that the New Ordinary Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, investors should note that: the price of the New Ordinary Shares may decline and investors could lose all or part of their investment; New Ordinary Shares offer no guaranteed income and no capital protection; and an investment in New Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing.  Furthermore, it is noted that, notwithstanding the Target Market Assessment, only investors who have met the criteria of professional clients and eligible counterparties have been procured.  For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the New Ordinary  Shares.

-ENDS-

 

END

 

 

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