Close of Accelerated Bookbuild

RNS Number : 4291N

MyHealthChecked PLC

29 January 2021

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED.  ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

MyHealthChecked plc

( " MyHealthChecked " or " the Company " )

Close of Accelerated Bookbuild and results of Fundraising

Further to the announcement made this morning, MyHealthChecked plc (AIM: MHC),   the consumer home-testing healthcare company, announces it has completed a placing of, and subscriptions for, in aggregate 194,285,714 new Ordinary Shares ("New Shares"), raising £3.4 million (before expenses) with investors at an Issue Price of 1.75 pence per share ("Fundraising").

Penny McCormick, Chief Executive Officer of MyHealthChecked plc, commented:  

"We are overwhelmed by the level of support we have seen, and I would like to thank all of those involved.  It is an exciting time for the growth and evolution of MyHealthChecked as we seek to become the UK's leading business-to-consumer testing business.  The funds raised will be used to extend the MyHealthChecked portfolio through new product development, while also strengthening and increasing the marketing effort to commercialise these products. We also intend to develop a smartphone app to capture data and improve engagement. The additional funds will provide a fantastic opportunity for MyHealthChecked's expansion and we look forward to delivering on our targets."

The Fundraising comprised the issue of 126,628,576 new Shares ("Placing Shares") pursuant to a placing ( " Placing " ) and the issue of 67,657,138 new Shares ("Subscription Shares") pursuant to direct subscriptions with the Company ( " Subscriptions " ). The Subscriptions comprise a firm subscription of £684,000 (39,085,710 shares) ("Firm Subscription") and a conditional subscription of £500,000 (28,571,428 shares) ("Conditional Subscription"). Oberon Investments ("Oberon") acted as sole bookrunner and broker in connection with the Placing. Neither the Placing nor the Subscriptions are underwritten.

The Issue Price represents a discount of 14.6 per cent. to the closing mid-market price (of 2.05 pence) at close of business on 28 January 2021.

The Fundraising is conditional upon, inter alia, approval by Shareholders at the General Meeting of the Resolutions and the Placing Agreement becoming unconditional in all respects. The Resolutions will provide the Company with the authority to allot and issue, the New Shares. It is expected that the Placing Shares and the Firm Subscription Shares will be admitted to trading on AIM at 8.00 a.m. on or around 19 February 2021. Application will be made for admission of the Conditional Subscription Shares to trading on AIM following confirmation from HMRC that the Conditional Subscription Shares are eligible for relief under the Enterprise Investment Scheme.

Upon admission of the Placing Shares and the Subscription Shares to trading on AIM (and Conversion Shares to be issued following the conversion of the Convertible Loan Note), the share capital is expected to be 725,246,036 Ordinary Shares. On this basis, the New Shares will represent approximately 26.8 per cent. of the Company's Enlarged Share Capital.

Details of the Placing

The Placing has raised approximately £2.216 million (before expenses) for the Company (by way of an accelerated bookbuild) of 126,628,576 Placing Shares at the Issue Price with investors.

The Placing Shares are being placed conditional, inter alia, on the passing of the Resolutions at the General Meeting.

The Company, Oberon and SPARK have entered into the Placing Agreement, pursuant to which Oberon has agreed to use its reasonable endeavours to procure placees pursuant to the Placing. The Company has agreed to pay all costs and expenses relating to the Placing and the applications for Admission including commission payable to Oberon.

The Placing Agreement contains certain warranties and indemnities by the Company in favour of SPARK and Oberon.

 It also contains provisions entitling SPARK and Oberon to terminate the Placing Agreement if, amongst other things, a breach of any of the warranties occurs or an event occurs which is material in the context of the Placing.

The Placing is conditional upon , inter alia :

· the Resolutions being duly passed at the General Meeting by 18 February 2021;

· admission of the Placing Shares and Firm Subscription Shares becoming effective on or before 8.00 a.m. on 19 February 2021 or such later time and/or date as the Company, Oberon and SPARK may agree, but in any event by no later than 8.00 a.m. on 19 March 2021;

· the Placing Agreement having become unconditional in all respects and not having been terminated; and

· completion of the Firm Subscription.

The Placing is not being underwritten. The Placing Shares are expected to be allotted on 18 February 2021, with Admission expected on 19 February 2021.  

The Placing will result in the issue of 126,628,576 new Ordinary Shares representing approximately 17.5 per cent. of the Enlarged Share Capital. The Placing Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares on Admission.

The Subscriptions

Firm Subscription

The Firm Subscription has raised approximately £684,000 for the Company by the conditional issue of 39,085,710 Firm Subscription Shares at the Issue Price with Mercia GP, the Participating Directors (as set out below) and other subscribers.

The Firm Subscription is conditional upon , inter alia :

· the Resolutions being duly passed at the General Meeting by 18 February 2021; and

· Admission becoming effective on or before 8.00 a.m. on 19 February 2021 or such later time and/or date as the Company, Oberon and SPARK may agree, but in any event by no later than 8.00 a.m. on 18 March 2021.

The Firm Subscription Shares are expected to be allotted on 18 February 2021, with Admission expected on 19 February 2021.

Conditional Subscription

The Conditional Subscription has conditionally raised £500,000 for the Company by the conditional issue of 28,571,428 Conditional Subscription Shares at the Issue Price with Mercia EIS.

The Conditional Subscription is conditional upon , inter alia :

· the Resolutions being duly passed at the General Meeting by 18 February 2021;

· confirmation from HMRC that the Conditional Subscription Shares are eligible for relief under the Enterprise Investment Scheme;

· admission of the Conditional Subscription Shares to trading on AIM becoming effective by 31 March 2021.

Settlement and dealings

Application will be made to the London Stock Exchange for the Placing Shares and Firm Subscription Shares to be admitted to trading on AIM.  It is expected that Admission will become effective and that dealings in the Placing Shares and the Firm Subscription Shares will commence on 8.00 a.m. on 19 February 2021, subject, inter alia, to the passing of the Resolutions at the General Meeting.

Application will be made for admission of the Conditional Subscription Shares to trading on AIM following confirmation from HMRC that the Conditional Subscription Shares are eligible for relief under the Enterprise Investment Scheme.

Strategy and Expected Use of Proceeds

Strategy

The Company is seeking to become the UK's leading business-to-consumer testing business addressing the high growth structural shift from consumers to use affordable tests delivered to their home, and with a digitally delivered outcome and actionable advice.

Since the new management team has joined the board, a new strategy was built in 2020. The Company has since invested to grow in 2021 and beyond. The strategy involves bringing simple, reliable, affordable health tests to market, building on the Company's existing portfolio. MHC has added, and will further add new tests, including those complementary to its core offering in female fertility. In addition, it is focused on addressing new markets with new tests: cost based managed to ensure a capital efficient operation.

The Company has already announced strong partnerships with established UK diagnostic businesses - EKF Diagnostics plc, Abingdon Health plc and Yourgene plc.

Use of Proceeds

The primary use of the net proceeds of £3.14 million will be to invest in developing and extending the MyHealthChecked portfolio through new product development. Additionally, there is a requirement to strengthen and develop the marketing effort, appointing core marketing personnel, and continuing to refine the direct-to-consumer activities, through retail launch and targeting strategic commercial contracts to exploit the MyHealthChecked portfolio.

The Company intends to develop a smartphone "app" to enable further data capture and improve engagement whilst providing information to service the market. Similarly, the net proceeds will provide additional working capital to enable the Company to continue to develop and improve its internal systems, controls and compliance.

Related Party Transactions

Mercia Asset Management PLC is the ultimate parent company of Mercia GP and of the entities that act as fund manager to Mercia EIS and FYSC. Together, Mercia GP, Mercia EIS and FYSC own 146,911,395 shares, representing 28.4% of the current issued share capital of the Company, and is a "substantial shareholder" in the Company. Penny McCormick, Maddy Kennedy, Lyn Rees and Adam Reynolds are Directors of the Company.

Each of Mercia GP, Mercia EIS, Penny McCormick, Maddy Kennedy, Lyn Rees and Adam Reynolds has agreed that they will participate in the Subscriptions as set out below.

Name	Amount subscribed in Subscriptions	Holding of Existing Ordinary Shares	Number of Subscription Shares	Number of Ordinary Shares issued following conversion of the Convertible Loan Note	Number of Ordinary Shares held post admission of the Placing Shares, the Subscription Shares and the Conversion Shares †	% of Ordinary Share Capital held post admission of the Placing Shares, the Subscription Shares and the Conversion Shares
Mercia	£800,000 †	146,911,395	45,714,285*	13,138,647	205,764,327	28.37%
Penny McCormick	£7,000	1,250,000	400,000	-	1,650,000	0.23%
Maddy Kennedy	£7,000	1,250,000	400,000	-	1,650,000	0.23%
Lyn Rees	£7,500	1,562,500	428,571	-	1,991,071	0.28%
Adam Reynolds	£25,000	8,084,722	1,428,571	-	9,513,293	1.34%

† Mercia's investment is split between Mercia GP (£300,000) and Mercia EIS (£500,000). Mercia's existing and post-Admission holding includes 12,699,967 shares held by FYSC.

*of which 17,142,857 are Firm Subscription Shares and 28,571,428 are Conditional Subscription Shares

† Mercia GP has indicated to the Company that it intends to exercise the conversion rights in the Convertible Loan Note. 13,138,647 new ordinary shares will be issued at the 0.8 pence exercise price in relation to the principal of £101,000 and accrued interest of £4,109.18.

All of the above parties are participating on the same terms as all other placees.

The participation in the Subscriptions by each of Mercia GP, Mercia EIS, Penny McCormick, Maddy Kennedy, Lyn Rees and Adam Reynolds, constitute related party transactions under the AIM Rules for Companies.

Peter Dines, who is Chief Operating Officer at Mercia Asset Management PLC, Penny McCormick, Maddy Kennedy, Lyn Rees and Adam Reynolds who are Directors of MyHealthChecked, are not considered independent in relation to the consideration of these related party transactions under AIM Rule 13.

Therefore Neil Mesher, who is considered to be an independent director of the Company for this purpose, has considered the participation of Mercia GP, Mercia EIS, Penny McCormick, Maddy Kennedy, Lyn Rees and Adam Reynolds in the Subscriptions. Having consulted with SPARK Advisory Partners, the Company's nominated adviser, the independent director considers that the terms of each of Mercia GP's, Mercia EIS', Penny McCormick's, Maddy Kennedy's, Lyn Rees' and Adam Reynolds' participation in the Subscriptions are fair and reasonable insofar as Shareholders are concerned.

Conversion Notice

Mercia GP has indicated to the Company that it intends to exercise the conversion rights in the Convertible Loan Note. 13,138,647 new ordinary shares will be issued at the 0.8 pence exercise price in relation to the principal of £101,000 and accrued interest of £4,109.18.

Notice of General Meeting

A Circular explaining the background to and reasons for the Fundraising and containing the Notice of General Meeting is expected to be posted to Shareholders on Monday 1 February. A copy of the Circular and Notice of General Meeting will be notified once published and thereafter be made available on the Company's website: www.myhealthcheckedplc.com

Capitalised terms not otherwise defined in this announcement shall have the same meaning ascribed to such terms in the announcement released on 29 January 2021 unless the context requires otherwise.

For further information please contact:

MyHealthChecked plc	www.myhealthcheckedp lc .com
P enny McCormick , Chief Executive Officer	via Walbrook PR
Maddy Kennedy, Chief Financial Officer
SPARK Advisory Partners Limited (NOMAD)	Tel: [phone]
Neil Baldwin
Oberon Investments  (Broker)	Tel: [phone]
Mike Seabrook	[e-mail]
Walbrook PR Ltd (Media & Investor Relations)	Tel: [phone] or [e-mail]
Paul McManus	Mob: [phone]

Definitions

"Admission"	the admission of the Placing Shares and Firm Subscription Shares to trading on AIM and such admission becoming effective in accordance with the AIM Rules
"AIM"	the market of that name operated by London Stock Exchange plc
"Conditional Subscription"	the subscription for the Conditional Subscription Shares at the Issue Price by Mercia EIS, which is conditional upon confirmation from Her Majesty's Revenue & Customs ("HMRC") that the Conditional Subscription shares qualify for relief under the Enterprise Investment Scheme ("EIS")
"Conditional Subscription Shares"	the 28,571,428 Ordinary Shares the subject of the Conditional Subscription
"Convertible Loan Note"	the convertible loan note of the Company duly constituted by a Convertible Loan Note Instrument executed by the Company on 24 April 2020 and issued to Mercia GP in the sum of £101,000
"Conversion Shares"	the 13,138,647 new ordinary shares to be issued following exercise of the conversion rights by Mercia GP under the Convertible Loan Note of the outstanding principal and accrued interest
"Company"	MyHealthChecked plc, a company registered in England and Wales with registered number 06573154
"Enlarged Share Capital"	together the Existing Ordinary Shares, the Placing Shares, the Firm Subscription Shares, the Conditional Subscription Shares and the Conversion Shares
"Existing Ordinary Shares"	the 517,821,675 ordinary shares of 0.1p each in the capital of the Company
"Firm Subscription"	the conditional subscription for the Firm Subscription Shares at the Issue Price, the subscribers for which include Mercia GP, Mrs P McCormick, Mrs M Kennedy, Mr L Rees and Mr A Reynolds
"Firm Subscription Shares"	the 39,085,710 Ordinary Shares the subject of the Firm Subscription
"FYSC"	Enterprise Ventures (General Partner FY Seedcorn) Limited as general partner of Finance Yorkshire Seedcorn LP
"General Meeting" or "GM"	the General Meeting of Shareholders to be held at 11.00 a.m. on 18 February 2021
"Issue Price"	1.75 pence per Placing Share and Subscription Share
"London Stock Exchange"	London Stock Exchange plc
"Mercia"	Mercia GP, Mercia EIS and FYSC
"Mercia EIS"	Share Nominees Limited as nominee of the Mercia EIS Funds, the transparent contractual funds invested by beneficial owners seeking EIS and SEIS reliefs which are managed by Mercia Fund Management Limited
"Mercia GP"	Mercia (General Partner) Limited as general partner of Mercia Investment Plan LP
"Oberon"	Oberon Investments, a trading name of MD Barnard & Company Limited, the Company's broker
"Ordinary Shares"	ordinary shares of 0.1p each in the capital of the Company
"Placing"	the conditional placing of the Placing Shares at the Issue Price
"Placing Agreement"	the conditional agreement dated 28 January 2021 between (1) the Company, (2) Oberon and (3) SPARK relating to the Placing
"Placing Shares"	the 126,628,576 Ordinary Shares the subject of the Placing
"Resolutions"	the resolutions set out in the notice of General Meeting
"SPARK"	SPARK Advisory Partners Limited, the Company's Nominated Adviser
"Subscriptions"	together the Firm Subscription and the Conditional Subscription
"Subscription Shares"	together the Firm Subscription Shares and the Conditional Subscription Shares

 

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