Placing, Open Offer and Notice of General Meeting

RNS Number : 0547G

Venture Life Group PLC

20 November 2020

 

THIS ANNOUNCEMENT, INLCUDING THE INFORMATION CONTAINED IN IT, IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION, DISTRIBUTION OR FORWARDING, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, NEW ZEALAND, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL.

FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

LEI: 213800S8CZUPLAB2KC70

  20 November 2020

Venture Life Group plc

Proposed Placing & Open Offer to raise up to £36 million
and
Notice of General Meeting

Venture Life (AIM: VLG), a leading developer, manufacturer and distributer of consumer self-care products, is pleased to announce that it has conditionally raised gross proceeds of £34 million by way of a Placing by Cenkos Securities plc to certain institutional and other investors. Furthermore, to enable other Shareholders who are not able to participate in the Placing an opportunity to subscribe for new Ordinary Shares, the Company is proposing to raise gross proceeds of up to an additional £2.0 million by way of an Open Offer made to Qualifying Shareholders.

TRANSACTION HIGHLIGHTS

· Placing to raise gross proceeds of £ 34 million at the Offer Price  

· Open Offer to raise gross proceeds of up to an additional £ 2.0 million at the Offer Price

· The Offer Price of 90 pence represents a discount of approximately 13.5 per cent to the closing mid-market price of 104 pence on 19 November 2020

· Up to 40,048,750 New Ordinary Shares to be issued and allotted in connection with the Fundraising

· The Directors intend that the net proceeds of the Fundraising will be used primarily to strengthen the balance sheet to support the Company's stated acquisition growth strategy and for general working capital purposes

· The Fundraising is subject to Shareholder approval

At the same time as the Company undertakes its Fundraising, Jerry Randall, Sharon Daly (née Collins), and Gianluca Braguti and certain of his associates intend to sell an aggregate of 8,173,343 Sale Shares at the Offer Price. The Sale Shares will include 1,735,774 Ordinary Shares that are to be issued and allotted to Jerry Randall and Sharon Daly (née Collins) upon the exercise by both of them of 867,887 EMI Options. Following exercise of the EMI Options and sale of the Sale Shares, the Sellers will, in aggregate, retain interests in 6,437,570 Ordinary Shares representing approximately 5.1% of the Company's share capital¹. The Sellers have agreed to a customary lock-up of their remaining Ordinary Shares for 24 months from Admission.

¹    Assuming take up in full of the Open Offer by Qualifying Shareholders and the exercise of 867,887 EMI Options by each of Jerry Randall and Sharon Daly (née Collins).

Jerry Randall, CEO commented : "We are delighted to announce this fundraise.  The injection of additional funds ensures we can fully capitalise on opportunities as they are presented to us and provides us with a strong platform with which to explore potential strategic acquisition opportunities that will support our ambitious growth plans."

An explanatory circular (the "Circular") is today being posted to Shareholders in relation to the Fundraising. The same definitions apply throughout this announcement as are applied in the Circular. The Circular will be sent to shareholders today and will be available on the Company's website: www.venture-life.com

 

For further information, please contact:

Venture Life Group PLC	[phone]
Jerry Randall, Chief Executive Officer
Cenkos Securities plc (Nomad and Joint Broker)	[phone]
Stephen Keys / Camilla Hume / Cameron MacRitchie (Corporate Finance)
Russell Kerr / Michael Johnson (Sales)
N+1 Singer (Joint Broker)	[phone]
Shaun Dobson / Carlo Spingardi

INTRODUCTION AND SUMMARY

The Company announces a conditional Placing under which the Company proposes to raise £34 million (before fees and expenses) by the issue and allotment by the Company of 37,777,777 Placing Shares at the Offer Price of 90 pence per Ordinary Share to certain institutional and other investors.

In addition, in order to provide Qualifying Shareholders with an opportunity to participate in the proposed Fundraising, the Company proposes to issue up to 2,270,973 Open Offer Shares to raise up to £2.0 million (before fees and expenses), on the basis of:

1 Open Offer Share for every 37 Existing Ordinary Shares held on the Record Date,
at 90 pence each, payable in full on acceptance.

The Fundraising is conditional, among other matters, on Shareholders approving the Resolutions at the General Meeting, which will grant the Directors the authority to allot, and the power to disapply statutory pre-emption rights in respect of, the New Ordinary Shares. The Resolutions are contained in the Notice of General Meeting at the end of the Circular. Admission is expected to occur at 8.00 a.m. on 9 December 2020 or such later time and/or date as Cenkos and the Company may agree, not being later than 8.00 a.m. on 23 December 2020. The Placing and the Open Offer are not underwritten.

At the same time as the Company undertakes its Fundraising, Jerry Randall, Sharon Daly (née Collins), and Gianluca Braguti and certain of his associates intend to sell an aggregate of 8,173,343 Sale Shares at the Offer Price. The Sale is conditional, inter alia, on Admission. The Sale Shares will include 1,735,774 Ordinary Shares that are to be issued and allotted to Jerry Randall and Sharon Daly (née Collins) upon the exercise by both of them of 867,887 EMI Options.

The Offer Price is at a discount of approximately 13.5 per cent. to the closing middle market price of 104 pence per Existing Ordinary Share on 19 November 2020, being the last practicable time prior to the announcement of the Fundraising.

SUMMARY OF VENTURE LIFE

The Group, founded in 2010, is an international self-care group, focused on the development, manufacture and commercialisation of products for the global self-care market. The Group's strategy is to create value for shareholders by building a leading international self-care business with a portfolio of niche own brand and customer brand products, across a range of therapeutic areas, that it distributes through its partners worldwide. The Group has established a vertically integrated platform, with a development and manufacturing facility in Italy and a network of over 110 distribution partners selling the products in 47 countries; it employs approximately 118 staff between its operations in the UK, Italy and the Netherlands. The Group has expanded its own range of branded products since inception and now has a portfolio of 10 products across a range of key therapeutic areas, including oral healthcare, proctology, dermatology, neurology and women's healthcare and seeks to grow both organically and through acquisition.

In addition to organically growing the business, the Directors are focussed on acquiring brands that they believe either have been "unloved" and under commercialised, have good growth potential, and that they consider will be able to grow both in terms of revenue and profitability through using the Group's operational leverage. The Directors estimate that, as at the end of 2020 there will be over 40 per cent. of spare capacity at the Group's manufacturing facility in Italy which can be utilised without significantly increasing overheads.

BACKGROUND TO AND REASONS FOR THE FUNDRAISING

Notwithstanding the Covid-19 outbreak, 2020 has been, to date, an exceptional year for the Group with the business demonstrating significant growth during the first half of the year; revenues increased 80 per cent. to £16.9 million, of which 65 per cent. was from organic growth and with 53 per cent. of revenues being derived from the Company's own brands compared to 30 per cent in H1 2019. The Company received strong orders in the first quarter of 2020 before the outbreak of Covid-19 from its Chinese partner (the "Partner") for Dentyl ^Ò and other products and on 27^th April the Company signed an exclusive distribution agreement with the Partner for the Company's key oral care products, including Dentyl ^Ò , with a minimum purchase obligation of €168 million over the 15 year term of the agreement. Furthermore, and at the onset of the Covid-19 outbreak in Europe, the Company created a new hand-sanitising brand, DISINPLUS, which the Group started manufacturing at its facility in North Lombardy in order to satisfy very high levels of demand for this product, initially from hospitals and pharmacies. On the back of this the Company has developed eight new products for its hand sanitiser brand and ASDA purchased one million units in H1 2020.  In addition, during H1 2020, the Company completed eight new international partnering agreements, 11 long-term development and manufacturing agreements and was appointed as a second manufacturer of Alliance Pharmaceutical's Kelo-Cote products.

As outlined in the Group's interim results, the Board has continued to look for suitable earnings accretive acquisitions of brands that the Directors believe will be able to leverage the Company's scalable development, manufacturing and commercial platform. The Directors have identified a pipeline of potential acquisition opportunities and are currently at varying stages of discussions with each. 

The Directors consider that over the last few years, the acquisition landscape has changed, and the Board believes the environment is such that an acquiror with conditional funding now finds itself in a materially disadvantaged position compared to those with access to unconditional funds. Accordingly, the Directors believe that a larger cash balance, resulting from the Fundraising, will not only enable the Company to participate in processes where funding conditions are not permitted but also significantly increase the Company's attractiveness, as a purchaser, to prospective vendors, thereby facilitating the Company's acquisition growth strategy.

ACQUISITION STRATEGY

As well as an organic revenue growth strategy, the Directors are pursuing an acquisition led growth strategy. The Directors are very selective in their acquisition targeting and select targets against a set of clearly defined criteria  namely the Board seeks to identify businesses in the selfcare/medical devices markets whose products the Group is capable of manufacturing in-house and where the Directors believe there is the ability to leverage the Company's existing distribution network.  The Directors seek earnings accretive acquisitions in a target valuation range of 4x to 7x EBITDA where they believe there is an opportunity to generate both cost and revenue synergies.

The Group has a strong track record of successfully integrating acquisitions and increasing the profitability of acquired businesses and has made four acquisitions since IPO, including Biokosmes, the Group's development and manufacturing facility in Italy, UltraDEX ^Ò , Dentyl ^Ò and, most recently, PharmaSource.

Potential Acquisitions

The Company is currently at varying stages of discussion and due diligence in relation to three opportunities (the "Potential Acquisitions"):

· "Project Vulcan" ("Vulcan") is the most advanced of the three opportunities and is the acquisition of the commercial rights to four brands whose main products are focussed on oncology support therapies to treat the dermatological and oral side-effects of cancer treatments. Currently the brands are sold through third party distributors in the EU as well as some other global markets with several new territories preparing for launch in 2021. The Group has extensive experience of manufacturing the main product in its plant in Italy and for which there would be no technology transfer required. The Directors see an opportunity to increase the distribution of the brands' products into territories where the product does not have an existing distribution partner, using both the Group's own existing network of local partners along with new partners. In 2019, Vulcan generated £3.5 million in net sales and an estimated EBITDA in excess of £1.2 million. The Directors expect the consideration payable for Vulcan to be approximately £5.5 million on a cash free, debt free basis.

· "Target A" is a heritage brand in the UK and EU within the oral care market. Its product can be manufactured internally by the Group. The Directors see an opportunity to expand its niche customer base in the UK and internationally through the Group's distribution network. In the year ended 31 December 2019, Target A generated approximately £3.0 million in estimated net sales, with a margin in excess of 30 per cent. The Directors expect that the consideration payable for Target A would be in the region of £5 million.

· "Target B" is a well-known heritage dermatological brand and is widely marketed in the UK.  Its products are capable of being manufactured internally by the Group. As with Vulcan and Target A, the Directors have identified an opportunity to expand the product's distribution into global markets through the Group's network. The Directors consider that the Target B's valuation is in the approximate range of £15 to 20 million.

The Directors believe that the Fundraising together with sufficient leverage should allow the Group to target accretive acquisitions, with the potential to add significantly to its revenue and EBITDA and consider that an increase in Group revenue would enable the Company materially to increase its operating margin.  In the medium term, the Directors aspire to create a business capable of generating £75 million of revenue with an operating margin of 25-30 per cent.¹

1.  This is a statement of the Directors' aspirations and should not be read as a profit forecast. Please see the paragraph entitled "Cautionary Note Regarding Forward-Looking Statements" in the section entitled "Important Information" for more information.

CURRENT TRADING AND PROSPECTS

In the year ended 31 December 2019, the Group reported revenues of £20.2 million (2018: £18.8 million), adjusted EBITDA of £3.0 million (2018: £2.7 million) and a pre-tax profit of £1.4 million (2018: £0.7 million).

As detailed in the Company's interim results, the first half of 2020 was a period of strong trading for the Group with reported revenues increasing 80 per cent. to £16.9m (H1 2019: £9.4 million), adjusted EBITDA increasing 368 per cent. to £3.5 million and profit before tax increasing nine-fold to £2.7 million (H1 2019: £0.3 million).

This strong trading has continued into the third quarter with revenues increasing by 29 per cent. to 30 September 2020, compared to the same period last year and the Company has good visibility on performance for the fourth quarter and into 2021. It is the Directors' intention, in the short to medium term, to adopt a progressive dividend policy.

The Company is supporting a clinical study by Cardiff University to investigate the potential of OTC mouthwashes, such as produced by the Group, to reduce the viral load (amount of virus in patients' saliva) in patients affected with Covid-19. Initial research raised the possibility that cetylpyridinium chloride (CPC) could be used to help reduce transmission of enveloped viruses such as SARS-CoV2 (Covid-19), but that more research was needed to test this idea. The clinical study aims to investigate if OTC mouthwashes containing CPC can reduce the viral load in the mouth. The Group produces mouthwashes containing CPC as their main active ingredient. On 16 November 2020, the Company updated the market following the publication of the laboratory (in-vitro) results from a separate independent study which concluded that the Group's two CPC based mouthwashes eradicated the SARS-CoV-2 (Covid-19) virus completely (>5log reduction, equivalent to 99.999%) within a 30 second exposure in the laboratory. The Cardiff University researchers concluded that active ingredients in mouthwashes were not, on their own, enough to rely on, but rather it was the construct of the mouthwash formulations that was the critical determinant of a successful outcome. The Directors consider the composition of Venture Life's CPC-based mouthwashes to be unique. The Cardiff University research project will now conclude its human (in-vivo) clinical study, with results expected to be published in early 2021 and when the Company plans to update the market further.

USE OF PROCEEDS

The Directors intend that the net proceeds of the Fundraising will be used primarily to strengthen the balance sheet to support the Company's stated acquisition growth strategy and for general working capital purposes.

DETAILS OF THE PLACING

The Company has conditionally raised £34 million (before fees and expenses) by the conditional Placing of 37,777,777 Placing Shares at the Offer Price by Cenkos, as agent for the Company, with Placees.

The Placing is conditional, among other matters, upon:

(a)  the passing of the Resolutions at the General Meeting by Shareholders;

(b)  the Placing Agreement becoming or being declared unconditional in all respects and not having been terminated in accordance with its terms prior to Admission; and

(c)  Admission becoming effective by no later than 8.00 a.m. on 9 December 2020 or such later time and/or date (being no later than 8.00 a.m. on 23 December 2020) as Cenkos and the Company may agree.

If any of the conditions are not satisfied, the Placing Shares will not be issued and all monies received from the Placees will be returned to the Placees (at the Placees' risk and without interest) as soon as possible thereafter. The Placing is not being underwritten.

The Placing 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.

THE OPEN OFFER

The Company considers it important that Shareholders have an opportunity (where it is practicable for them to do so) to participate in the Fundraising and accordingly the Company is making the Open Offer to Qualifying Shareholders. The Company is proposing to raise up to £2.0 million (before fees and expenses) through the issue of up to 2,270,973 Open Offer Shares at the Offer Price. Any Open Offer Shares not subscribed for by Qualifying Shareholders will be available to Qualifying Shareholders under the Excess Application Facility. The Open Offer is not being underwritten.

Qualifying Shareholders may apply for Open Offer Shares under the Open Offer at the Offer Price on the following basis:

1 Open Offer Share for every 37 Existing Ordinary Shares held by
the Shareholder on the Record Date

Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Open Offer Shares. Fractional entitlements which would otherwise arise will not be issued to Qualifying Shareholders but will be aggregated and made available under the Excess Application Facility. The Excess Application Facility enables Qualifying Shareholders to apply for Excess Shares in excess of their Open Offer Entitlement.

Further details of the Open Offer and the application process relating to the Open Offer are set out in the Circular.

Settlement and 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 Admission will become effective at 8.00 a.m. on 9 December 2020.

The Directors do not intend to participate in the Open Offer.

THE PLACING AGREEMENT

Pursuant to the terms of the Placing Agreement, Cenkos, as agent for the Company, has conditionally agreed to use its reasonable endeavours to procure subscribers for the Placing Shares. Cenkos has conditionally placed the Placing Shares with certain institutional and other investors at the Offer Price. The Placing and the Open Offer have not been underwritten. The Placing Agreement is conditional upon, among other matters, the Resolutions being duly passed at the General Meeting and Admission becoming effective on or before 8.00 a.m. on 9 December 2020 (or such later time and/or date as Cenkos and the Company may agree, but in any event by no later than 8.00 a.m. on 23 December 2020).

The Placing Agreement contains customary warranties from the Company in favour of Cenkos in relation to, among other matters, the accuracy of the information in the Circular and other matters relating to the Group and its business. In addition, the Company has agreed to indemnify Cenkos in relation to certain defined liabilities that it may incur in respect of the Fundraising.

Cenkos has the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, in the event of a breach of the warranties given to Cenkos in the Placing Agreement or a material adverse change affecting the business, financial trading position or prospects of the Company or the Group as a whole.   Cenkos also has the right to terminate the Placing Agreement if any of the sale agreements between the Sellers and Cenkos in connection with the Sale are terminated in accordance with their terms.

The Placing Agreement also provides for the Company to pay all costs, charges and expenses of, or incidental to, the Fundraising and the Admission including all agreed amounts for legal and other professional fees and expenses.

The Placing Shares have not been made available to the public and have not been offered or sold in any jurisdiction where it would be unlawful to do so.

EXERCISE OF EMI OPTIONS AND SALE

At the same time as the Company undertakes its Fundraising, Jerry Randall and Sharon Daly (née Collins) each intend to exercise 867,887 EMI Options. Of these EMI Options, 705,700 will be exercised at a price per Ordinary Share of 45 pence and 162,187 will be exercised at a price per Ordinary Share of 41 pence.

Jerry Randall, Sharon Daly (née Collins), and Gianluca Braguti and certain of his associates intend to sell an aggregate of 8,173,343 Sale Shares at the Offer Price, which will include the 1,735,774 Ordinary Shares that are to be issued and allotted to Jerry Randall and Sharon Daly (née Collins) upon the exercise by both of them of 867,887 EMI Options.

Cenkos has conditionally placed the Sale Shares with certain institutional and other investors at the Offer Price. The Sale is conditional upon Admission and completion is expected to occur on Admission. The Sale is not underwritten. Purchasers of Sale Shares will not receive Open Offer Entitlements in respect of such shares. The Sellers have agreed to a customary lock-up of their remaining Ordinary Shares for 24 months from Admission.

Following exercise of the EMI Options and sale of the Sale Shares, the Sellers (and their families/ pension plans) will retain the following interests in the Company:

	Interests as the date of this Document			Interests at Admission(1)
	No. of Ordinary Shares(2)	Percentage of issued share capital(2)		No. of Ordinary Shares(2)	Percentage of issued share capital(2)
Jerry Randall	3,769,729	4.5%		1,884,865(3)	1.5%(3)
Sharon Daly (née Collins)	2,019,953	2.4%		1,009,976(4)	0.8%(4)
Gianluca Braguti	7,085,459(5)	8.4%(5)		3,542,730(6)	2.8%(6)
Notes : (1)  Assuming full take up of the Open Offer Entitlements and the Sellers do not take up any of their Open Offer Entitlements but that these are taken up by other Qualifying Shareholders by way of the Excess Application Facility. (2)  Excluding share options. The legal title of all Ordinary Shares for which the Sellers hold the beneficial interest is held by Vestra Nominees Limited. (3)  Having exercised 867,887 EMI Options for Ordinary Shares which will all be sold in the Sale. Of Jerry Randall's remaining interests in the Company, he will retain the beneficial interests to 653,013 Ordinary Shares and 1,231,852 Ordinary Shares will be acquired by his wife, Mrs A Randall, on Admission. (4)  Having exercised 867,887 EMI Options for Ordinary Shares which will all be sold in the Sale. Of Sharon Daly's remaining interests in the Company, she will retain the beneficial interests to at least 591,197 Ordinary Shares and, in addition, any of the 418,779 Ordinary Shares that are not acquired by her husband, Mr C Daly, on Admission.. (5)  Including 2,300,000 Ordinary Shares to which his wife and his adult children hold the beneficial interest. Gianluca Braguti retains control of the voting rights for these Ordinary Shares whilst he remains a Director of the Company. (6)  Including 1,150,000 Ordinary Shares to which his wife and his adult children hold the beneficial interest. Gianluca Braguti will retain control of the voting rights for these Ordinary Shares whilst he remains a Director.

The Sale Shares have not been made available to the public and have not been offered or sold in any jurisdiction where it would be unlawful to do so.

THE GENERAL MEETING

You will find set out at the end of the Circular a notice convening the General Meeting to be held at 11.00 a.m. on 8 December 2020 at which the following resolutions will be proposed as ordinary or special resolutions as indicated below:

· Resolution 1, which will be proposed as an ordinary resolution and which is subject to the passing of Resolution 2 is to authorise the Directors to allot the New Ordinary Shares in connection with the Fundraising.

· R esolution 2, which will be proposed as a special resolution and which is subject to the passing of Resolution 1, dis-applies Shareholders' statutory pre-emption rights in relation to the issue of the New Ordinary Shares pursuant to the Fundraising.

The authorities under these resolutions are in addition to any other authorities in relation to allotment or the dis-application of pre-emption rights in existence at the date of the General Meeting.

In accordance with government legislation and related restrictions in response to Covid-19, and to minimise public health risks, the General Meeting is to be held as a closed meeting, electronically, and members and their proxies will not be able to attend the meeting in person. As such, Shareholders are strongly encouraged to appoint the 'Chair of the meeting' to act as their proxy as any other named person will not be permitted to attend the meeting.

PRINCIPAL RISKS

The Company draws your attention to the principal risks and uncertainties for the Group on pages 18 and 19 of its annual report and accounts for the financial year end 31 December 2019, which remain relevant to the Group.

Coronavirus (Covid-19)

In its annual report, the Group highlighted the risk to its business that the coronavirus (Covid-19) pandemic may have. Since publication of that report, the pandemic has continued to have a severe impact on economies throughout the world. This impact has been felt across the Group in various ways, and across many of the territories in which the Company operates, including China (where the Group has important potential sales). These impacts include delays in orders from, and sales to, distributors, delays in the receipt of payments from distributors with some distributors not paying amounts due within the contractually agreed payment period, difficulties in obtaining the raw materials and packaging necessary for manufacturing as supply chains have weakened, increased costs incurred in order to manage and operate the business, and uncertainty regarding the future performance of our distributors.

The Group is profitable and cash generative and has to date managed these risks successfully. The Group has undertaken several mitigating actions in light of the pandemic and its economic impact, including extensive changes to operating procedures at the manufacturing facility in Italy, making increased provisions against doubtful debt, and requiring some distributors to pay in advance or with letters of credit where credit terms are not currently being met, whilst also being sympathetic to its distributors and the strains placed on them by coronavirus (Covid-19). Despite these mitigating measures, the extent to which the Group's revenues and operating results may in future be affected by the pandemic will depend on future developments, which are highly uncertain and cannot be accurately predicted, including the duration, scope and severity of the pandemic, the actions taken to contain or mitigate its impact by both the Company and its distributors, and the severity of the direct and indirect economic effects of the pandemic and related containment measures. Should any distributor with significant minimum purchase obligations or other material payment obligations become unable during the pandemic or following to perform their obligations it could have a material adverse impact on the Group's revenues and operating results.

Speculation and public comment may arise about the prospects for the success or failure of the clinical study (being undertaken by Cardiff University) to investigate the potential of OTC mouthwashes, such as produced by the Group, to reduce the viral load (amount of virus in patients' saliva) in patients affected with Covid-19 or generally about the effectiveness of CPC-based or other mouthwashes for this purpose. The Company does not intend to comment on these matters before the results of that study are complete or sufficiently precise information is available, unless required by the AIM Rules for Companies/legal disclosure requirements.

The Cardiff University research project will now conclude its human (in-vivo) clinical study, with results expected to be published in early 2021. Clinical trials are inherently uncertain and their outcome cannot be assured. Until the results of that study are known, it is too early to know the true effectiveness of the Group's two CPC based mouthwashes in helping to prevent or reduce the Covid-19 virus in the oral cavity. Even if the results of the human (in-vivo) trial provide similarly strong results as the in-vitro trial, the impact on the sales of the Group's CPC based mouthwashes is not known at this time and could be affected by whether other CPC based mouthwashes or other mouthwashes containing different key ingredients are found to have similar benefits.

RECOMMENDATION

The Directors consider the Fundraising to be in the best interests of the Company and its Shareholders as a whole and accordingly recommend unanimously Shareholders to vote in favour of the Resolutions to be proposed at the General Meeting and the Directors confirm that they intend to vote in favour of the Resolutions in respect of their beneficial holdings amounting, in aggregate, to 12,918,506 Existing Ordinary Shares, representing approximately 15.4 per cent. of the existing issued ordinary share capital of the Company.

FUNDRAISING STATISTICS

Offer Price	90 pence
Number of Existing Ordinary Shares	84,026,006
Number of Placing Shares	37,777,777
Open Offer Entitlement	1 Open Offer Share for every 37 Existing Ordinary Shares
Number of Open Offer Shares(1)	up to 2,270,973
Number of New Ordinary Shares to be issued pursuant to the Fundraising(1)	40,048,750
Number of EMI Options to be exercised	1,735,774
Number of Ordinary Shares in issue following Admission(1)(2)	125,810,530
New Ordinary Shares as a percentage of the Enlarged Share Capital(1)(2)	33.2 per cent.
Gross proceeds of the Placing	£34 million
Gross proceeds of the Open Offer(1)	£2.0 million
Estimated net proceeds of the Fundraising receivable by the Company(1)	£34.2 million
Ordinary Share ISIN	GB00BFPM8908
Open Offer Entitlements ISIN	GB00BKPS0Z39
Open Offer Excess Entitlements ISIN	GB00BKPS1058

(1)  Assuming take-up in full of the Open Offer by Qualifying Shareholders.

(2)  Assuming the exercise of 867,887 EMI Options by each of Jerry Randall and Sharon Daly (née Collins)

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Record Date for entitlements under the Open Offer	6.00 p.m. on 19 November 2020
Announcement of the Fundraising and Sale	20 November 2020
Publication and despatch of the Circular, the Form of Proxy and, to Qualifying Non-CREST Shareholders, the Application Form	20 November 2020
Existing Ordinary Shares marked "ex" by the London Stock Exchange	8.00 a.m. on 23 November 2020
Open Offer Entitlements and Excess Open Offer Entitlements credited to CREST stock accounts of Qualifying CREST Shareholders	24 November2020
Latest recommended time and date for requesting withdrawal of Open Offer Entitlements and Excess CREST Open Offer Entitlements from CREST	4.30 p.m. on 1 December 2020
Latest time and date for depositing Open Offer Entitlements and Excess CREST Open Offer Entitlements in CREST	3.00 p.m. on 2 December 2020
Latest time and date for splitting of Application Forms under the Open Offer	3.00 p.m. on 3 December 2020
Latest time and date for receipt of Forms of Proxy and CREST voting instructions	11.00 a.m. on 4 December 2020
Latest time and date for receipt of Application Forms and payment in full under the Open Offer and settlement of relevant CREST instructions (as appropriate)	11.00 a.m. on 7 December 2020
General Meeting	11.00 a.m. on 8 December 2020
Results of the General Meeting and the Open Offer announced	8 December 2020
Admission of the New Ordinary Shares to trading on AIM and commencement of dealings Settlement of the Sale Shares	8.00 a.m. on 9 December 2020   9 December 2020
Where applicable, expected date for CREST accounts to be credited with New Ordinary Shares in uncertificated form	9 December 2020
Where applicable, expected date for despatch of definitive share certificates for New Ordinary Shares in certificated form	Within 10 Business Days from Admission

Notes:

1.  Each of these times and/or dates is subject to change at the absolute discretion of the Company and Cenkos. If any of these times and/or dates should change, the revised times and/or dates will be announced through a Regulatory Information Service.

2.  All of the above times refer to London time unless otherwise stated.

3.  All events listed in the above timetable following the General Meeting are conditional on the passing of the Resolutions at the General Meeting.

DEFINITIONS

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

"Act"	the Companies Act 2006 (as amended)
"Admission"	admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules
"AIM"	the AIM market operated by the London Stock Exchange
"AIM Rules"	the AIM Rules for Companies published by the London Stock Exchange from time to time
"AIM Rules for Nominated Advisers"	the AIM rules for nominated advisers published by the London Stock Exchange from time to time
"Articles"	the articles of association of the Company
"Application Form"	the application form to take up New Ordinary Shares in the Open Offer accompanying the Circular that may be used by Qualifying Non-CREST Shareholders
"Business Day"	a day (other than a Saturday, a Sunday or a public holiday) on which clearing banks are open for all normal banking business in the city of London.
"Cenkos" or "Nominated Adviser" or "Broker"	Cenkos Securities plc, as the Company's nominated adviser and broker
"certificated form" or "in certificated form"	an Ordinary Share recorded on a company's share register as being held in certificated form (namely, not in CREST)
"Company" or "Venture Life"	Venture Life Group plc, a company incorporated under the laws of England and Wales with company number 05651130
"CREST"	the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the operator (as defined in those Regulations)
"CREST Regulations"	the Uncertificated Securities Regulations 2001 (S.I. 2001 No. 3755) (as amended)
"Directors" or "Board"	the directors of the Company or any duly authorised committee thereof
"Circular"	the Circular which for the avoidance of doubt does not comprise a prospectus (under the Prospectus Regulation) or an admission document (under the AIM Rules)
"EMI Options"	options in Ordinary Shares granted under the Company's Enterprise Management Incentive Scheme
"Enlarged Share Capital"	the issued Ordinary Shares immediately following Admission, assuming the maximum number of New Ordinary Shares are issued Assuming the exercise of 867,887 EMI Options by each of Jerry Randall and Sharon Daly (née Collins)
"Euroclear"	Euroclear UK & Ireland Limited, the operator of CREST
"Excess Application Facility"	the arrangement pursuant to which Qualifying Shareholders may apply for additional Open Offer Shares in excess of their Open Offer Entitlement in accordance with the terms and conditions of the Open Offer
"Excess CREST Open Offer Entitlements "	in respect of each Qualifying CREST Shareholder, the entitlement (in addition to their Open Offer Entitlement) to apply for Open Offer Shares pursuant to the Excess Application Facility, which is conditional on him taking up his Open Offer Entitlement in full and which may be subject to scaling back in accordance with the provisions of the Circular
"Excess Open Offer Entitlements"	an entitlement for each Qualifying Shareholder to apply to subscribe for Open Offer Shares in addition to his Open Offer Entitlement pursuant to the Excess Application Facility which is conditional on him taking up his Open Offer Entitlement in full and which may be subject to scaling back in accordance with the provisions of the Circular
"Excess Shares"	Open Offer Shares which are not taken up by Qualifying Shareholders pursuant their Open Offer Entitlement and which are offered to Qualifying Shareholders under the Excess Application facility
"Ex-entitlement Date"	the date on which the Existing Ordinary Shares are marked "ex" for entitlement under the Open Offer, being 8.00 a.m. on 23 November 2020
"Existing Ordinary Shares"	the 84,026,006 Ordinary Shares in issue at the date of this announcement, all of which are admitted to trading on AIM
"FCA"	the UK Financial Conduct Authority
"Form of Proxy"	the form of proxy for use in connection with the General Meeting which accompanies the Circular
"FSMA"	the Financial Services and Markets Act 2000 (as amended)
"Fundraising"	the Placing and the Open Offer
"General Meeting"	the general meeting of the Company to be held at 11.00 a.m. on 8 December 2020, notice of which is set out at the end of the Circular
"Group"	the Company and its subsidiary undertakings
"Link Group"	a trading name of Link Market Services Limited
"London Stock Exchange"	London Stock Exchange plc
"Money Laundering Regulations"	The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended)
"New Ordinary Shares"	the Placing Shares and the Open Offer Shares
"Notice of General Meeting"	the notice convening the General Meeting which is set out at the end of the Circular
"Offer Price"	90 pence per Ordinary Share
"Official List"	the Official List of the Financial Conduct Authority
"Open Offer"	the conditional invitation by the Company to Qualifying Shareholders to apply to subscribe for the Open Offer Shares at the Offer Price on the terms and subject to the conditions set out in the Circular and, in the case of Qualifying Non-CREST Shareholders, in the Application Form
"Open Offer Entitlement"	the individual entitlements of Qualifying Shareholders to subscribe for Open Offer Shares allocated to Qualifying Shareholders pursuant to the Open Offer
"Open Offer Shares"	up to 2,270,973 new Ordinary Shares to be issued by the Company pursuant to the Open Offer
"Ordinary Shares"	ordinary shares of 0.3 pence each in the capital of the Company
"Overseas Shareholders"	Shareholders who do not have a registered address nor are located in the United Kingdom
"Placees"	subscribers for the Placing Shares
"Placing"	the conditional placing of the Placing Shares by Cenkos, as agents on behalf of the Company, pursuant to the Placing Agreement, further details of which are set out in the Circular
"Placing Agreement"	the conditional placing and open offer agreement dated 20 November 2020 and made between Cenkos and the Company in relation to the Fundraising, further details of which are set out in the Circular
"Placing Shares"	the 37,777,777 New Ordinary Shares to be issued pursuant to the Placing
"Potential Acquisitions"	the Group's three potential acquisitions as set out in this announcement
"Prospectus Regulation"	regulation (EU) No 2017/1129 of the European Parliament and of the Council
"Receiving Agent"	Link Group, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU
"Qualifying CREST Shareholders"	Qualifying Shareholders holding Existing Ordinary Shares in uncertificated form
"Qualifying Non-CREST Shareholders "	Qualifying Shareholders holding Existing Ordinary Shares in certificated form
"Qualifying Shareholders"	holders of Existing Ordinary Shares on the register of members of the Company at the Ex-entitlement Date that are not resident in a Restricted Jurisdiction
"Record Date"	6.00 p.m. on 19 November 2020
"Registrars"	Link Group, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU
"Regulatory Information Service"	a service approved by the FCA for the distribution to the public of regulatory announcements and included within the list maintained on the FCA's website
"Resolutions"	the resolutions set out in the Notice of General Meeting
"Restricted Jurisdiction"	any jurisdiction except the UK. Jurisdictions outside the UK include, but are not limited to, the United States, Canada, Australia, New Zealand, the Republic of South Africa and Japan
"Sale Shares"	means 8,173,343 Ordinary Shares to be sold by the Sellers
"Sellers"	Jerry Randall, Sharon Daly (née Collins), Gianluca Braguti and certain of his associates
"Shareholders"	holders of Ordinary Shares
"UK"	the United Kingdom of Great Britain and Northern Ireland
"US" or "United States"	the United States of America, each State thereof, its territories and possessions (including the District of Columbia) and all other areas subject to its jurisdiction
"uncertificated" or "in uncertificated form"	an Ordinary Share recorded on a company's share register 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
"Website"	www.signalshares.com
"£", "pounds sterling", "pence" or "p"	are references to the lawful currency of the United Kingdom

Important Notices

No action has been taken by the Cenkos Securities plc ("Cenkos") or any of its affiliates, or any person acting on its or their behalf that would permit an offer of the New Ordinary Shares or possession or distribution of this announcement or any other offering or publicity material relating to such New Ordinary Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company and Cenkos to inform themselves about, and to observe, such restrictions.

No prospectus, offering memorandum, offering document or admission document has been or will be made available in connection with the matters contained in this announcement and no such prospectus is required (in accordance with the Prospectus Regulation) to be published. Persons needing advice should consult a qualified independent legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice.

THIS ANNOUNCEMENT, INCLUDING THE INFORMATION CONTAINED IN IT, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE, FORWARDING OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA (COLLECTIVELY, THE "UNITED STATES"), AUSTRALIA, NEW ZEALAND, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL. FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY JURISDICTION. THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY THE LONDON STOCK EXCHANGE, NOR IS IT INTENDED THAT IT WILL BE SO APPROVED.

This announcement or any part of it does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States, Canada, Australia, New Zealand, the Republic of South Africa, Japan or any other jurisdiction in which the same would be unlawful. No public offering of the Placing Shares is being made in any such jurisdiction.

The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any State or other jurisdiction of the United States, and may not be offered, sold or transferred directly or indirectly in or into the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any State or any other jurisdiction of the United States. Accordingly, the Placing Shares are being offered and sold by the Company only outside the United States in "offshore transactions" (as such terms are defined in Regulation S under the Securities Act ("Regulation S")) pursuant to Regulation S under the Securities Act and otherwise in accordance with applicable laws. No public offering of securities is being made in the United States.

This announcement is for information purposes only and is directed only at: (i) persons in the European Economic Area (the "EEA") who are qualified investors within the meaning of Article 2(e) of the Prospectus Regulation ("Qualified Investors"); or (ii) in the United Kingdom, Qualified Investors who are (a) persons who have professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); (b) persons who fall within Article 49(2)(a) to (d) of the Order; or (c) otherwise, persons to whom it may otherwise lawfully be distributed (all such persons together being referred to as "Relevant Persons"). Any investment or investment activity to which this announcement relates is available in the EEA or the United Kingdom only to Relevant Persons and will be engaged in only with Relevant Persons. This announcement must not be acted on or relied on by persons in the EEA or the United Kingdom who are not Relevant Persons.

Certain statements contained in this announcement constitute "forward-looking statements" with respect to the financial condition, results of operations and businesses and plans of the Company and its subsidiaries (the "Group"). Words such as "believes", "anticipates", "estimates", "expects", "intends", "plans", "aims", "potential", "will", "would", "could", "considered", "likely", "estimate" and variations of these words and similar future or conditional expressions, are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon future circumstances that have not occurred. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. As a result, the Group's actual financial condition, results of operations and business and plans may differ materially from the plans, goals and expectations expressed or implied by these forward-looking statements. No representation or warranty is made as to the achievement or reasonableness of, and no reliance should be placed on, such forward-looking statements. No statement in this announcement is intended to be, nor may it be construed as, a profit forecast or be relied upon as a guide to future performance. The forward-looking statements contained in this announcement speak only as of the date of this announcement. The Company, its directors, Cenkos, their respective affiliates and any person acting on its or their behalf each expressly disclaim any obligation or undertaking to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by applicable law or regulation, the AIM Rules or the rules of the London Stock Exchange.

Cenkos Securities plc is authorised and regulated in the United Kingdom by the FCA. Cenkos is acting exclusively for the Company and no one else in connection with the Placing and will not regard any other person (whether or not a recipient on this announcement) as its client in relation to the Placing or any other matter referred to in this announcement and will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice to any other person in relation to the Placing or any other matters referred to in this announcement.

This announcement has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Cenkos or by any of its affiliates or any person acting on its or their behalf as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

This announcement does not constitute a recommendation concerning any investor's investment decision with respect to the Placing. Any indication in this announcement of the price at which ordinary shares have been bought or sold in the past cannot be relied upon as a guide to future performance. The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance. The contents of this announcement are not to be construed as legal, business, financial or tax advice. Each investor or prospective investor should consult his, her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice.

The Placing Shares to be issued or sold pursuant to the Placing will not be admitted to trading on any stock exchange other than AIM.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this announcement should seek appropriate advice before taking any action.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this announcement.

This announcement has been prepared for the purposes of complying with applicable law and regulation in the United Kingdom and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside the United Kingdom.

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 "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any 'manufacturer' (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that such Placing 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, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing 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, Cenkos will only procure investors who meet the criteria of professional clients and eligible counterparties.

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 Placing Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

NOTWITHSTANDING ANYTHING IN THE FOREGOING, NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE BY ANY PERSON ANYWHERE AND THE COMPANY HAS NOT AUTHORISED OR CONSENTED TO ANY SUCH OFFERING IN RELATION TO THE PLACING SHARES.

 

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