Hybridan Small Cap Feast

A round up of the day’s news brought to you by the team at small-cap broker and advisor Hybridan.

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Banquet Buffet

Ananda Developments 0.85p  £6.75m (AQSE:ANA)

Shareholder update. Ananda’s ambition is to become a significant participant in the medicinal cannabis sector as a UK-based grower of consistent, high quality medicinal cannabis for domestic and international markets. In 2025, the UK medicinal cannabis market is expected to be worth £450m and the European market is expected to be worth £2.7bn. Highlights: Construction of purpose-built research facility to commence in July 2021.  Strains of medicinal cannabis for research have been selected. Liberty Herbal Technologies has received a US Patent for its vaping device.

Angle 127p  £274m (AGL.L)

The  liquid biopsy company, announced that, further to the announcement made yesterday, the Company has successfully raised gross proceeds of £20.0m by conditionally placing 17,241,380 Placing Shares at a price of 116 pence per New Ordinary Share with new and existing investors. The Issue Price represents a discount of approximately 6.83% to the closing mid-market price of an Ordinary Share of 124.50 pence on 23 June 2021. The Placing Shares represent approximately 7.40% of the Company’s Enlarged Issued Share Capital. ANGLE Founder and Chief Executive, Andrew Newland, commented: “We would like to thank our shareholders for their continued strong support and welcome new shareholders to the ANGLE register. The proceeds from this Placing will enable ANGLE to add to the current momentum in the commercialisation process of our Parsortix system and open up new market opportunities in Prostate Cancer diagnosis, an area of significant medical need. ANGLE looks forward to announcing further progress on multiple fronts in H2 CY21, including the prospect of FDA clearance for the Parsortix platform.”

Diversified Energy Company 101.4p  £861m (DEC.L)

Teresa Odom, the Company’s current Vice President of Investor Relations, has accepted a newly-created role as Vice President of ESG & Sustainability demonstrating Diversified’s commitment to these initiatives. The Company created this leadership role to further accelerate and communicate its progress in this increasingly important and rapidly changing area. As stakeholders seek additional information regarding its ESG initiatives and progress, Diversified is investing significant time and resources as evidenced within its updated 2020 Sustainability Report published in April, and the Company will continue to report on its progress within its periodic operations and financial reports. As an energy company built around the stewardship and optimisation of existing assets, Diversified’s values, priorities and strategy are naturally aligned with ESG concepts. More specifically, the Company provides high-quality jobs and benefits to its employees who strive to improve asset productivity which in turn increases value for all stakeholders. Complementing asset productivity and operational efficiency is Diversified’s concurrent work to reduce its emissions footprint by improving the integrity of its gathering and midstream systems. With Teresa’s leadership, the Company looks forward to expanding these important initiatives and providing its stakeholders with transparent communications of how its business model of sustainability and stewardship is fully aligned with ESG priorities.

Jade Road Investments* 20.7p  £23.8m (JADE.L)

FY Dec 2020 results from, pan-Asian diversified investment vehicle focused on providing shareholders with attractive uncorrelated, risk-adjusted long-term returns . Net Asset Value increased by 5.5% year-on-year, driven mostly by a higher valuation of Future Metal Holdings (FMHL ). Net Asset Value per Share decreased slightly by 3.3% owing to the Open Offer and Placement and subsequent issuance of 8,356,663 shares in October 2020. Net Portfolio Income increased by over 200% year-on-year, delivering a Net Profit of US$1.6m versus a loss of US$2.8m in 2019. This significant growth is largely attributable to the increase of value of the Company’s largest asset, FMHL, where significant improvements were achieved during the year. This is reflected in an increase in the fair value changes on financial assets at fair value through profit and loss (2020: US$5.1m (2019: US$0.2m)).  Remains cautiously optimistic about the outlook for 2021. As travel and other restrictions are gradually lifted, businesses are beginning to get back to more normal levels of activity. For example, restaurants in Hong Kong are operating near to pre-pandemic levels, while in Niseko, Japan (where Jade Road has property investments) operators are now accepting bookings for the coming winter skiing season.  As the pan-Asian markets bounce back, Jade Road is seeing more exciting investment opportunities. The current investment pipeline includes a number of companies operating in high growth and very topical sectors such as Healthcare Technologies, Fintech and eCommerce. The scarcity of institutional capital to fund their growth places the Company in an extremely strong position to negotiate very attractive terms for new investments.”

Marshall Motor Holdings 195.5p  £152.9m (MMH.L)

One of the UK’s leading automotive retail groups, provided an unscheduled trading update given significant upgrades to both first half and full year expectations for 2021. The market has continued to benefit from positive tailwinds, including a recent unprecedented used vehicle value appreciation and favourable demand-to-supply conditions for both new and used vehicles.  In addition, the Group has continued its strong outperformance of the wider new and used vehicle markets. As a result, the Group expects to report an exceptionally strong first half performance in both profit and cash generation when it issues its interim results on 10 August 2021. There remains a high level of uncertainty over the second half of 2021, and possibly longer, given the potentially significant impacts of new vehicle supply issues as a result of a well-documented worldwide shortage of semi-conductors, a realignment of used vehicle values and the continuing impact of the COVID-19 pandemic.  To date, supply issues have had limited impact on the Group’s sales volumes, however supply in both new and used vehicles has tightened and there are signs that these issues will become more acute in the second half of the year and maybe beyond. As a result, there are a wide range of possible outcomes for the Group’s full year results.  Despite having committed to repay £4.0m of Government support, as previously announced, the Board expects that continuing underlying profit before tax in 2021 is likely to be significantly ahead of current market expectations and well ahead of the Group’s historic record result.

Mirriad Advertising 49.5p  £138m (MIRI.L)

The in-content advertising company, today announces that it has reached a new commercial agreement with Tencent. Tencent is China’s biggest online video streaming platform by subscriptions and, after two years of successful collaboration with Mirriad, this agreement renews the maturing relationship for a further two years, and is backdated to commence from 1st April 2021. This enhanced agreement enables a move to a revenue share model for both parties, removing the previous minimum volume and exclusivity clauses, to align with the commercial terms Mirriad has in place with other large partners in US and European markets. The revenue share agreed in this deal will be consistent with those in other Mirriad standard commercial contracts previously disclosed to the market. A notable further part of the agreement is a commitment from both parties to develop a sales model based on audience reach delivered to advertisers in the Chinese market, allowing Tencent to widen the range of content it can monetise using Mirriad’s patent   protected and award-winning in-content advertising technology.

MJ Hudson Group 52.5p  £90.6m (MJH.L)

The specialist service provider to the asset management industry, has acquired the entire issued share capital of FinTech risk specialist, Clarus Risk Limited, to widen the breadth of services in the Group’s data and analytics division. The addition of Clarus follows the acquisition of performance analytics group PERACS, in December. As such, MJ Hudson can now support its fund manager and investor clients with data, analytics, benchmarking and reporting across risk, investment performance, ESG and cost transparency. The transaction is expected to be modestly accretive to earnings per share in its first full year following completion. Similar to MJ Hudson, Clarus´ clients are European and North American alternative asset fund managers, investors and service providers in the asset management industry. The current AUM of clients on Clarus’ system totals c. £10bn. Mr Hilton and his team are all joining MJ Hudson and will play an important role in helping to refine the next level of digital tools across the business. MJ Hudson also anticipates being a significant internal user of Clarus’ risk systems. The intention is for Clarus to expand its team of quant engineers and risk professionals and extend its operations to London.  The initial consideration is £1.0m with deferred and earn-out consideration of up to a further £2.5m over a three-year period. The full consideration is payable in a mixture of cash and new ordinary shares in MJ Hudson Group plc. The cash consideration will be funded from MJ Hudson´s existing cash resources. Clarus generated revenues of £0.6m for the twelve-month period to December 2020 and is EBITDA positive.

Rogue Baron 6.875p  £5.93m (AQSE:SHNJ)

The company in the premium spirit sector, announced record sales months at the Company’s bar Bin 1301 (Bin). In the past three months (March – May) Bin saw total unaudited sales of USD 80K USD 70K and USD 75K respectively. Comparatively, the same months in 2019, before Covid, Bin recorded sales of USD 55K, USD 53K and USD 55K. The 38% increase in sales comparison has been achieved despite many Covid restrictions still in place during these months. Bin was still dealing with: 50% capacity, 6ft table separation, no seats at the bar , shorter hours that caused Bin to lose 16 hours of sales per week.
All restrictions were lifted on June 11th. From that date was the first point Bin 1301 has been under normal operations since March 19th, 2020.

RUA Life Sciences 125p  £27.7m (RUA.L)

The holding company of a group of medical device businesses focused on the exploitation of the world’s leading long-term implantable biostable polyurethane (Elast-Eon™), updated on the regulatory application for the large bore vascular grafts in development by RUA Vascular. All results from both in vivo and in vitro testing have now been gathered and the submission pack for 510k application to the FDA has been prepared. Mechanical testing of the grafts indicate superior performance over the control. Pathology results from the six-month in vivo testing were normal giving the Board confidence that the grafts perform as anticipated. The Company has however noted the presence of cellulose, a non-toxic, natural plant-based material, in the analysis of the leachable extracts from the graft samples tested. As the raw materials for the graft only comprise Elast-Eon™ (as sealant) and polyethylene terephthalate (yarn for graft fabric), the presence of cellulose is currently unexplained other than the samples have been contaminated at some stage in the chain of custody. Submission of the 510k, which was previously anticipated by the end of June 2021, with this unknown factor would in the Board’s opinion, risk the application being rejected at the initial filing review stage. As a result, the Company has decided to undertake a secondary test on grafts from another production batch and carry out detailed chemical analysis on the original samples before submission. The Company continues to anticipate first revenues from the sale of grafts by the end of the current financial year.

Strategic Minerals 0.47p  £9.1m (SML.L)

Its wholly owned subsidiary, Leigh Creek Copper Mine (LCCM), has received notification from the Department of Energy and Mining of South Australia (DEM) of its intention to finalise its assessment on the Paltridge North deposit Programme for Environmental Protection and Rehabilitation (PEPR) during July 2021. DEM is currently assessing the latest element of the PEPR submission and has informed the Company of its intention to finalise the assessment during July (providing previous feedback has been adequately addressed). Appointment of John Speck as LCCM’s Mine Manager. The Board has elected to seek additional funding to conduct both production at Paltridge North and exploration simultaneously, as well as preparing LCCM for a potential listing on the Australian Stock Exchange.

What’s cooking in the IPO kitchen?

Seraphim Space Investment Trust PLC, a newly established closed-ended investment company which will invest in a diversified international portfolio of early and growth stage Space Tech businesses, announces the publication of its Prospectus in connection with the IPO to the Premium Segment of the Main Market. The Company is targeting gross proceeds of up to £180m through the issue of up to 180m Ordinary Shares by way of the Initial Placing, the Offer for Subscription, Direct Subscriptions and the Intermediaries Offer at 100 pence per Ordinary Share. The Company will subsequently also acquire stakes in four Space Tech businesses upon the completion or termination of currently pending corporate activity in relation to those assets. Assuming the successful completion of these transactions currently underway, the Company’s investment manager, Seraphim Space estimates approximately £70m of value relating to the Retained Assets could be acquired by the Company.

Future Biogas Group plc, is a newly formed holding company which will acquire 100% of Future Biogas Limited (“FBL”). Future Biogas is a clean energy company that operates biogas plants in the UK. It is one of the largest biogas producers in the UK, delivering approximately 5,000 cubic metres per hour of green gas to the Gas Grid. FBL was formed in 2010 in order to develop and operate biogas plants.  The Group has deployed over £125m and built 12 biogas plants in the UK since then, largely through tax efficient funding such as VCT and EIS. In 2020, the ten biogas plants operated by the Group generated over 426 GWh of renewable energy. TBC ordinary shares of £0.01 each in the capital of the Company. In addition to the biogas plants it operates on behalf of third parties, the Company intends to build on its experience by constructing its own portfolio of new bioenergy plants with carbon capture storage (“BECCS”). Target fundraise up to £35m. Anticipated market cap TBC. Admission date TBC

Saietta Group, announces intention to list on AIM. Saietta, is a UK company that has developed an innovative AFT electric motor (a design of axial flux motor), designed to deliver class-leading performance for its target markets whilst being low cost and built for mass market production. Saietta’s initial target market is the high volume, fast growing lightweight mobility market including motorcycles in Asia. Admission date and market cap TBC.

Silverbullet is a provider of digital transformation services and products which assist brand owners and advertisers to optimise their digital marketing investment, with a particular focus on unlocking the potential of first party data and contextual intelligence. The Company announced its intention to seek admission of its shares to trading on AIM, with admission expected to take place on 28 June 2021. Seeking to raise £9.5m. Expected mkt cap c£34.5m.

Poolbeg, Proposed AIM listing and demerger from Open Orphan (ORPH.L). Funds raised as part of Admission will be used primarily to fund the clinical trial costs associated with the development of the Company’s POLB 001 asset as a treatment for severe influenza and to acquire and develop new portfolio assets.  Offer details and timing TBC

Wise, the Fintech and payments start-up is planning to pull the trigger on a direct listing on the London Stock Exchange, becoming the latest tech firm and this time a Unicorn to cash in on the ongoing boom in flotations on the UK’s public markets. Wise plans to establish a customer shareholder programme, OwnWise, which will reward customers joining as shareholders after admission to support its long-term mission. OwnWise, open for pre-applications from UK eligible customers today, provides participants with the chance to receive bonus shares in Wise, representing 5% of the value of the shares they buy and hold for at least 12 months (based on market value at the time of purchase) up to a cap of £100, amongst other perks. All existing investors, including the company’s team of current and previous Wisers (employees) who hold options and shares, will be offered time-limited enhanced voting shares to support Wise’s focus on its mission as it transitions to being a listed company. Admission Due TBC

Orcadian Energy, the North Sea focused, oil and gas development company, announces its intention to seek admission to AIM. The Company’s key asset is the 100% interest in the Pilot oilfield, with audited proven and probable reserves of 78.8m barrels (audited by Sproule BV). Orcadian plans to raise gross proceeds of c. £5m to progress its assets. Expected June/ early July.

Itim Group Limited (to be renamed itim Group plc) is a software technology company, established in 1993. Itim adds value by helping multi-channel retailers optimise their business and stores to improve financial performance and compete more effectively in the digital world of modern retailing. The Company provides flexible solutions proven at adding value as retailers transform stores, digital capabilities and operations suitable for modern retailing and profit improvement. The company plans to raise up to £8m on Admission on AIM, through a placing of new equity at an issue price of 154 pence. Market Cap £48.1m. Due date 28^th June.

Baltic Classifieds Group PLC, the leading online classifieds group in the Baltics, announced their intention to IPO on the Premium Segment of the LSE. The Offer will comprise an offering of both new Shares to be issued by the Company, with gross proceeds expected to total approximately EUR 120m and existing Shares to be sold by ANTLER Equity Co S.à r.l and certain BCG shareholders. The directors intend to use the net proceeds from the Primary Raise for the repayment of existing debt in conjunction with the refinancing of the Senior Facilities Agreement targeting a net debt at IPO of approximately 2.75x FY21 Adjusted EBITDA. Expected early July.

The UK Residential REIT, a proposed closed-ended real estate investment trust established to invest in a diversified portfolio of affordable, privately rented residential real estate assets in attractive locations outside of London, announces its intention to IPO onto the Premium Segment of the LSE. URES is targeting Gross Issue Proceeds of  150m before expenses by means of a placing, offer for subscription and intermediaries offer of 150m Ordinary Shares plus an Issue of up to 50m Consideration Shares in connection with the acquisition of Seed Assets at an issue price of £1.00 per Ordinary Share. Expected market capitalisation following the completion of the acquisition of Seed Assets of £200m. Due 16 July

LionTrust ESG Trust PLC announces the publication of the Prospectus in connection with the IPO on the Premium Segment of the Main Market. The Company is targeting an initial issue of £150m by means of an Initial Placing, Offer for Subscription and Intermediaries Offer of Ordinary Shares at an issue price of 100 pence per Ordinary Share. In addition, pursuant to the Prospectus, a placing programme will allow the Company to issue up to an additional  250m Ordinary Shares and/or C shares, in the 12 months from the date of publication of the Prospectus and following Initial Admission.

Voyager Life, the health and wellness company established to supply high-quality Cannabidiol (CBD) and hemp seed oil products, announces the Company’s intention to seek admission to trading on the Access Segment AQSE Growth Market. Voyager was incorporated in November 2020 as a health and wellness business focused on CBD and hemp seed oil products. The Company’s directors believe that a significant opportunity exists in the CBD market due to the forecast growth and ongoing regulatory changes. Due 30th June.

*A corporate client of Hybridan LLP

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