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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Premier Oil plc BOND, Stg Den 6.50% 31/05/21 PMO1, Left the Main Market.

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1Spatial 47.9p £53m (SPA.L)

The global leader in Location Master Data Management (LMDM) software and solutions announces that following a competitive tender and in collaboration with Version 1 (a global leader in IT services and solutions), it has signed a multiyear contract with Defra to provide a managed service for Rural Payments Agency’s (RPA) Customer Portal and Land Management System (LMS). The contract will enable Defra and RPA to deliver its Basic Payment schemes and transition to their new Environmental Land Management Scheme (ELMS) as part of the UK Government’s 25 year environment plan and commitment to net zero emissions by 2050.

FastForward Innovations 8.5p £18m (FFWD.L)

The investor in  fast growing and industry leading businesses has been issued £600,000 of 24-month Convertible Loan Notes (“CLNs”) in Jersey based medical cannabis cultivator, Northern Leaf Limited (“Northern Leaf”), as part of a pre-IPO funding round by Northern Leaf raising approximately £14 million via the issue of CLNs (the “Investment”).  The Company’s investment in the CLN will be funded from existing cash resources. Ed McDermott, Chief Executive Officer of FastForward, commented, “Having become the first company to be awarded a UK licence to grow medicinal cannabis in 22 years late last year, Northern Leaf is focused on becoming a key player in the rapidly burgeoning European medical cannabis supply chain; we are delighted to back a competent team as they look to accelerate this strategy and use the funds raised to commence its commercial medicinal cannabis grow programme. Again, given we understand the fundraise was heavily oversubscribed, we are pleased with the investment we have secured in the raise and look forward to supporting the company in progressing its strategy.”

Zephyr Energy 2.5p £23m (ZPHR.L)

The Rocky Mountain oil and gas company focused on responsible resource development announces the completion of its acquisition of non-operated working interests in currently producing and near-term production wells in the Bakken Formation, North Dakota, USA (the “Acquisition” or the “Bakken project”), as announced on 29 March 2021. All conditions of the Acquisition were satisfied yesterday, including the transfer of title of the Bakken Interests to Zephyr and the release of the Operator liens, and all payments due in respect of the Acquisition have also been made, including payment of approximately $3.7 million for historical capital expenditure obligations and $300,000 to the Seller ($50,000 having already been paid in a non-refundable deposit).

Proteome Sciences 4.35p £12.5m (PRM.L)

Final results from the specialist provider of contract proteomics services to enable drug discovery, development and biomarker identification, including: Total revenues of £4.75m (2019: £4.66m); Proteomic (biomarker) services revenues of £1.44m (2019: £0.93m); Profit after tax of £0.29m (2019:  £0.15m); Cash reserves at 31 December 2020 of £2.21m (2019: £0.80m). Dr. Mariola Soehngen, Chief Executive Officer of Proteome Sciences plc, commented: “We experienced another profitable year despite the particularly difficult trading background in 2020 due to the COVID-19 pandemic. Whilst most of our major markets employed some form of temporary lock down, pharmaceutical research activity was maintained at near-normal levels and our clients were able to produce the samples required for proteomic analysis with minimal delays. In particular, proteomic services showed an impressive sales growth of 55% to £1.44m as the benefits of expanding both our markets and salesforce started to be realised.

Tekcapital 10.5p  £13.7m (TEK.L)

The UK intellectual property investment group focused on investing in new, university-developed discoveries that can enhance people’s lives announces that portfolio company Lucyd Ltd has closed its fully-subscribed Regulation Crowdfund. The crowdfund, conducted by Lucyd’s U.S. subsidiary Innovative Eyewear, Inc., attracted 3,800 investors who contributed $1,070,000. This was the maximum allowable amount for this type of equity offering. The crowdfunding round was beneficial to Lucyd, by introducing the Lucyd brand to thousands of new individuals, funding Lucyd Lyte™ e-glasses and Vyrb™ app development, and providing Lucyd with a large community for beta testing of its new products.  In addition, Lucyd has just been granted a utility patent from the United States Patent and Trademark Office, for a software system designed to manage multiple wearables and IOT devices. This technology, combined with Lucyd’s patent-pending e-glasses, enhances the company’s intellectual property position in the emerging wearables market.

Good Energy Group 221p £37m (GOOD.L)

The 100% renewable electricity supplier and innovative energy services provider announces it has been named as the first and only energy supplier to date awarded ‘Gold’ in USwitch’s green tariff accreditation scheme. Uswitchs’ independent panel judged Good Energy’s electricity and gas tariffs to be ‘market leading in their environmental credentials’. Good Energy, the UK’s first 100% renewable electricity company, is now the first to be awarded the highest standard on a ground-breaking new green accreditation scheme for energy tariffs. The ‘first of its kind’ scheme from a comparison and switching site categorises green energy tariffs into Bronze, Silver and Gold, with Good Energy the only supplier awarded Gold.

Intuitive Investment Group 21.6p £8.7m (IIG.L)

The closed-end investment company focussed on the life sciences sector announces an investment of £250,000 in Axol Bioscience Ltd (“Axol”) (the “Investment”).  Axol has reversed into Censo Biotechnologies Ltd (“Censo”) by way of share for share exchange (the “Enlarged Group”). The Investment is part of a £3.6 million funding round to provide working capital for the Enlarged Group. IIG will hold 2.625% of the Enlarged Group’s A ordinary shares, which have a participating preference ahead of the Enlarged Group ‘s ordinary shares. On a fully diluted basis IIG will have an interest in 0.964% of the voting rights of the Enlarged Group. Axol produces high quality human cell products, particularly in relation to pluripotent stem cell (hiPSC) and critical reagents such as media and growth supplements, which are sold to medical research and drug discovery organisations . Axol also provides contract research for example customising cell lines for customers, such as reprogramming and differentiation. Censo is a specialist contract research organisation with products, complementary to those produced by Axol, in complex cell biology, specialising in human neurodegenerative, neuroinflammatory and inflammatory disease models. The Chairman of Axol is Jonathan Milner, who is the company’s co-founder and was previously deputy chairman of Abcam plc.

Verditek 3.95p  £13.5m (VDTK.L)

Update from the clean technology company that develops, manufactures and sells certified lightweight solar panels regarding its planned transition to manufacturing a second generation of its product offering. By using the latest components available, the Company’s first generation product has gradually been enhanced to increase the power output from 260 watts per panel to 288 watts and then to 300 watts. This is for a standard sized panel that comprises 60 photovoltaic cells. After several months of research, the Company is now embarking on the production of a more technically advanced panel that is expected to produce 350 watts per panel. These second generation panels are using far more efficient cells and, because both the power rating has gone up by more than 10% and certain other components are being used in the new panel, new certification is required. The new certification should also cover a wider range of tests and enable wider distribution in more international markets. This process which includes ISO9001 accreditation has recently commenced, and full certification is expected in the second half of the year.

Hummingbird Resources 21.75p £77.8m (HUM.L)

The gold production, development and exploration company with assets in Mali, Guinea and Liberia updates on the 2021 exploration drilling programme at the Yanfolila gold mine, Mali.  As noted in the Company’s Mineral Resource Estimate (“MRE”) announcement on 30 March 2021, the Company’s 2021 exploration drilling programme is focused on increasing mineral resources at known deposits and testing new greenfield targets. Approximately 5,800 metres (“m”) have been drilled so far in 2021, which includes 3,367 m of reverse circulation (“RC”) drilling at Sanioumale East (“SE”) and 2,474 m of diamond core drilling at Komana East (“KE”). The drill results from SE and KE show continued resource upside potential at both deposits, as recently highlighted in the MRE announcement.  With the SE drill holes continuing to intersect mineralisation, the results highlight the potential for SE to be a material deposit, building on the positive 2020 exploration results which led to an increase of SE’s JORC compliant MRE to 204,000 ounces (‘oz’).

Thruvision Group 21.8p £31.8m (THRU.L)

Update from the provider of “safe distance” people-screening technology to the international security market on trading for the financial year ended 31 March 2021. The Group experienced a weak second half in both its Customs and Aviation sub-sectors due to Covid-19 which has adversely impacted revenues. However, the Profit Protection sub-sector performed strongly and continued to strengthen throughout the year. As a result, full year revenues are expected to be around £6.7 million (FY20 £8.0 million), with a consequential impact on profitability.

What’s cooking in the IPO kitchen?

Media reports suggest the UK DNA sequencing technology specialist, Oxford Nanopore is preparing a London float but disclosed no further details.  The Company expects that the IPO would occur in the second half of 2021. IP Group, which has a 15% stake in Oxford Nanopore, currently values Oxford Nanopore at £2.3bn but analysts also suggest a valuation above £4bn at its next funding event.

Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 2021.   Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.”

MAST Energy Developments (MED) is to IPO on the Standard List on 14th April 2021 under the ticker MAST.  The company has raised £5m giving a market capitalisation on listing of c. £23m.  MED is currently a 100% subsidiary company of AIM quoted, Kibo Energy*.   MED was established to acquire and develop a portfolio of flexible power plants in the UK and become a multi-asset operator in the rapidly growing Reserve Power market.

PensionBee has confirmed its intention to float on the High Growth Segment  of the Main Market of LSE.  The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration, in each case as at 28 February 2021.  The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority  shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April.  

Cornerstone FS to join AIM, an SME focused, cloud-based provider of international payment, currency risk management and electronic account services focused on removing the complexity of international payments for customers. Raising £2.2m. Mkt Cap £12.3m. Due 6 April.  

Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc.  With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April 2021.

Proposed move to AIM from the main market (standard)  by Emmerson (EML.L)  to provide Emmerson with access to a market and environment which is more suited, in the Board’s view, to the Company’s current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work.  

NextEnergy Renewables  to launch an IPO on the Main Market. NREN is a differentiated renewables investment Company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally.  Targeting a £300m raise.   NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company’s target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021.

Digital 9 Infrastructure launch an initial public offering  on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be  published in March 2021.

Fix Price announces its intention to float on the Main Market of the London Stock Exchange.  Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has revenues of RUB 190.1bn, RUB 142.9bn and RUB 108.7bn for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8bn, RUB 27.2bn and RUB 14.2bn, respectively. The Offer would consist of an offering of GDRs by certain existing shareholders of the Company.

Great Point Entertainment Income Trust PLC announced its prospectus has been approved by the FCA.  Great Point Entertainment Income Trust PLC is a newly established, externally managed closed-ended investment company. The Company will provide project finance to content makers and commissioners in the global television and film production industry via senior loans secured against pre-sold intellectual property (IP) rights. GPEIT’s investment objective is to provide Shareholders with dividend income and modest capital growth through exposure to media content finance.

And lastly, just for fun on 1 April, media reports announce Hybridan LLP to reverse into $10bn SPAC on Nasdaq in world’s first Bitcoin based IPO.

*A corporate client of Hybridan LLP

This document has been prepared by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectives, financial situation or needs of any specific entity and is not a personal recommendation to anyone. Recipients should make their own investment decisions based upon their own financial objectives and financial resources and, if any doubt, should seek advice from an investment advisor. The information contained in this document is based on materials and sources that are believed to be reliable; however, they have not been independently verified and are not guaranteed as being accurate. This document is not intended to be a complete statement or summary of any securities, markets, reports or developments referred to herein. No representation or warranty, either express or implied, is made or accepted by Hybridan LLP, its members, directors, officers, employees, agents or associated undertakings in relation to the accuracy, completeness or reliability of the information in this document nor should it be relied upon as such. Any and all opinions expressed are current opinions as of the date appearing on this document only. Any and all opinions expressed are subject to change without notice and Hybridan LLP is under no obligation to update the information contained herein. To the fullest extent permitted by law, none of Hybridan LLP, its members, directors, officers, employees, agents or associated undertakings shall have any liability whatsoever for any direct or indirect or consequential loss or damage (including lost profits) arising in any way from use of all or any part of the information in this document. This document is sent to you as market commentary only. As market commentary this document does not constitute any of (i) investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments for the purposes of the UK retained version of section B of annex I to Directive 2014/65/EU (“MIFID II Directive”); or (ii) investment research as defined in the UK retained version of article 36(1) of Commission Delegated Regulation 2017/565/EU made pursuant to the MIFID II Directive; or (iii) non-independent research (as such term is defined in the Financial Conduct Authority’s Conduct of Business Sourcebook).