REG - Renalytix PLC - Result of Placing and Subscription

RenalytixAnnouncement

01/10/2024 12:15

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RNS Number : 4887G  Renalytix PLC  01 October 2024

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN (TOGETHER THIS
"ANNOUNCEMENT") IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM THE UNITED STATES OF AMERICA, AUSTRALIA, NEW
ZEALAND, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION
WHERE, OR TO ANY OTHER PERSON TO WHOM, TO DO SO MIGHT CONSTITUTE A VIOLATION
OR BREACH OF ANY APPLICABLE LAW OR REGULATION ("RESTRICTED JURISDICTION").
PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.

 

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE
INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATIONS (EU) NO.
596/2014 WHICH FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE PUBLICATION OF THIS ANNOUNCEMENT
THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

Renalytix plc

("Renalytix" or the "Company")

 

Result of Placing and Subscription

 

Related Party Transaction

 

Renalytix (NASDAQ: RNLX) (AIM: RENX), an artificial intelligence-enabled in
vitro diagnostics company, focused on optimizing clinical management of kidney
disease to drive improved patient outcomes and advance value-based care,
confirms that, further to the Company's announcement released at 5.42 p.m. on
30 September 2024 (RNS Number: 3313G) (the "Fundraising Announcement"), the
bookbuild has now closed and the Company has, conditionally, raised gross
proceeds of £11.8 million by way of a successful placing of, and subscription
for, a total of 131,161,556 new Ordinary Shares at the Issue Price of 9 pence
per share (the "Placing and Subscription"). The Issue Price represents a
premium of 12.5 per cent. to the closing middle market price of 8 pence per
Ordinary Share on 30 September 2024, being the last business day prior to this
announcement.

 

Oberon Capital (a trading name of Oberon Investments Limited) is acting as
sole bookrunner in respect of the Placing. The Placing was undertaken through
an accelerated bookbuild process.

 

The above figures include the issue of 13,366,750 shares to The Icahn School
of Medicine at Mount Sinai ("Mount Sinai"), which shares have been issued in
the expectation that Mount Sinai will forgive certain debts payable by the
Company. Excluding these shares, the gross proceeds of the Placing and
Subscription are £10.6 million.

 

James McCullough, CEO of Renalytix commented: "We are very excited about the
future potential of our business. The strong demand we have seen for the
Fundraise supports our view that Renalytix offers investors unique access to a
world-leading kidney prognostic test: the only test to be FDA approved,
granted full Medicare reimbursement at $950 per test; recommended in KDIGO
Clinical Guidelines; available to approximately 14m US diabetic kidney disease
patients; and able to address the needs of approximately 260M DKD patients
globally.

 

"We now have a strong cash and balance sheet position, we have taken positive
actions to substantially reduce our monthly cash burn, and we are delivering
quarter-on-quarter growth in orders, whilst also supporting a new customer
launch. We believe these factors, combined, will take the Company to
profitability and cash flow break-even in approximately two years and that we
have the potential to generate revenue of approximately $17.5 million in
FY27."

 

Capitalised terms used in this announcement (the "Announcement") have the
meanings given to them in the Fundraising Announcement, unless the context
provides otherwise.

 

The Placing and Subscription and the issue of the Placing and Subscription
Shares are conditional upon, amongst other things:

 

 ●    the Placing Agreement having become unconditional (save for First Admission
      and Second Admission) and not having been terminated in accordance with its
      terms prior to First Admission and Second Admission; and

 ●    First Admission for the EIS/VCT Placing Shares taking place by no later than 8
      a.m. on 9 October 2024 (or such later date as Oberon Capital may agree in
      writing with the Company, being not later than 8 a.m. on 23 October 2024).

Furthermore, the issue of the Non-EIS/VCT Placing Shares (as defined below)
and Subscription Shares are conditional upon shareholder approval of the
Resolutions, to be proposed at the General Meeting (such terms as defined
further below).

 

Director and Substantial Shareholder participation and related party
transactions

 

James McCullough, Christopher Mills, Catherine Coste, and Fergus Fleming,
being Directors of the Company, have subscribed for certain Placing Shares.
Mount Sinai, being a Substantial Shareholder of the Company, has also
subscribed for certain Subscription Shares. The number of Placing and
Subscription Shares conditionally subscribed for by Mount Sinai and those
above named Directors, and their resulting shareholding on admission of all
new Ordinary Shares(1), are set out below:

 

 Related Party         Number of Ordinary Shares held before the Placing  Number of Placing Shares subscribed for as part of the Placing(1)  Number of Ordinary Shares held on Second Admission(1)  Percentage of enlarged ordinary share capital(1)
 Christopher Mills(2)  14,072,500                                         500,000                                                            14,572,500                                             4.4%
 James McCullough      2,746,386                                          417,710                                                            3,164,096                                              0.9%
 Catherine Coste       -                                                  279,866                                                            279,866                                                0.1%
 Fergus Fleming        569,481                                            83,542                                                             653,023                                                0.2%
 Mount Sinai           23,979,726                                         13,366,750                                                         37,346,476                                             11.2%

 

Note 1: The statistics above assume the passing of the Resolutions at the
General Meeting and therefore Admission of all new Ordinary Shares to be
issued pursuant to the Placing, Subscription and debt restructuring.

 

Note 2: Christopher Mills' shareholding includes shares held through North
Atlantic Smaller Companies Investment Trust plc and Oryx International Growth
Fund Limited. Christopher Mills is a partner and Chief Investment Officer of
Harwood Capital LLP. Harwood Capital LLP is investment manager to North
Atlantic Smaller Companies Investment Trust plc and investment adviser to Oryx
International Growth Fund Limited.

 

Those Directors listed above, Mount Sinai and other significant subscribers
have agreed to a 6 month lock-in on shares subscribed for in the Placing.

 

The participation by those listed in the above table amounts to related party
transactions within the meaning of the AIM Rules for Companies (the "AIM
Rules"). Accordingly, the Directors who are independent of the related party
transactions (being Daniel Levangie and Erik Lium), having consulted with
Stifel, the Company's nominated adviser for the purposes of the AIM Rules,
consider the terms of the participation of those related parties to be fair
and reasonable insofar as the Company's shareholders are concerned.

 

Admission & Total Voting Rights

 

The 92,773,922 Placing Shares are expected to be issued in two tranches, with
the issuance of the first tranche of 23,174,440 Ordinary Shares (the "EIS/VCT
Placing Shares") to take place on or around 9 October 2024 and the issuance of
the remainder of the 69,599,482 Placing Shares (the "Non-EIS/VCT Placing
Shares"), the 38,387,634 Subscription Shares and 36,550,543 Conversion Shares
subject to shareholder approval of (i) the allotment and issue of the
Non-EIS/VCT Placing Shares, Subscription and Conversion Shares, (ii) the
disapplication of pre-emption rights in respect of the allotment and issue of
those shares being obtained by passing certain resolutions (the "Resolutions")
at a general meeting of the shareholders of the Company to be held on or
around 31 October 2024 as mentioned below (the "General Meeting").

 

The new Ordinary Shares, when issued, will be credited as fully paid and will
rank on Admission pari passu in all respects with each other and with the
existing Ordinary Shares, including the right to receive all dividends and
other distributions declared, made or paid after the date of issue.

 

General Meeting and Posting of Circular

 

The General Meeting to approve the Resolutions is expected to be held on 31
October 2024.

 

The Circular, containing the Notice of the General Meeting, which sets out the
Resolutions and further details on the Fundraising, is expected to be
available to Shareholders of the Company on or about 10 October and, following
its publication, will be available on the Company's website
at https://renalytix.com (https://renalytix.com) . The Circular will include
a unanimous Board recommendation that all Shareholders of the Company vote in
favour of the Resolutions.

 

Admission, Settlement and Dealings

 

Application will be made to the London Stock Exchange ("LSE") for admission of
the EIS/VCT Placing Shares to trading on AIM. It is expected that First
Admission will take place on or around 8.00 a.m. on 9 October 2024 and that
dealings in the EIS/VCT Placing Shares on AIM will commence at the same time.

 

Subject to the Resolutions being passed at the General Meeting, application
will be made to the LSE for admission of the Non-EIS/VCT Placing Shares, the
Subscription Shares and Conversion Shares to trading on AIM. It is expected
that Second Admission will take place on or around 8.00 a.m. on 1 November
2024 and that dealings on AIM will commence at the same time.

 

Following First and Second Admission, the Company will have 333,637,612
Ordinary Shares in issue. The Placing, Subscription and Conversion Shares,
when issued, will be fully paid and will 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
issue.

 

For further information, please contact:

 

 Renalytix Plc                                                                              www.renalytix.com (http://www.renalytix.com)

 James McCullough, CEO                                                                      Via Walbrook PR

 Stifel Nicolaus Europe Limited (Nominated Adviser and Joint Broker)                        Tel: 020 7710 7600

 Nicholas Moore / Nick Harland / Ben Good

 Oberon Capital (Joint Broker and sole Bookrunner)                                          Tel: 020 3179 5300

 Mike Seabrook / Nick Lovering / Jessica Cave

 Walbrook PR Limited                               Tel: 020 7933 8780 or renalytix@walbrookpr.com

                                                 (mailto:renalytix@walbrookpr.com)
 Paul McManus / Alice Woodings / Charlotte Edgar

                                                   Mob: 07980 541 893 / 07407 804 654 / 07884 664 686

 CapComm Partners                                  Tel: 415-389-6400 or investors@renalytix.com (mailto:investors@renalytix.com)

 Peter DeNardo

 

The person responsible for making this Announcement on behalf of the Company
is

James McCullogh, Chief Executive Officer.

 

Timetable

 

The expected timetable regarding the proposed Fundraising is set out below:

 

 Placing Launch Announcement                                                5.42 p.m. on 30 September 2024

 Placing Closing Announcement                                               1 October 2024

 Admission and commencement of dealings in the EIS/VCT Placing Shares       8.00 a.m. on 9 October 2024

 General Meeting                                                            31 October 2024

 Result of General Meeting Announcement                                     31 October 2024

 Admission and commencement of dealings in the Non-EIS/VCT Placing Shares,  8.00 a.m. on 1 November 2024
 Subscription Shares and the Conversion Shares

 

The times and dates set out above, and mentioned throughout this Announcement,
are subject to change, and may be adjusted by the Company in consultation with
Oberon Capital. The timetable above also assumes that the Resolutions are
passed at the General Meeting without adjournment. In the event of any
significant changes from the expected timetable above, details of the new
times and dates will be notified to Shareholders by the Company by an
announcement released through a Regulatory Information Service.

 

Important Notices

 

Stifel Nicolaus Europe Limited ("Stifel"), which is authorised and regulated
in the United Kingdom by the FCA, is acting exclusively for the Company as
nominated adviser and no-one else in connection with the Placing and will not
regard any other person as a client in relation to the Placing and will not be
responsible to anyone other than the Company for providing the protections
afforded to its clients or for providing advice in relation to the Placing or
any other matter referred to herein. Its responsibilities as nominated advisor
to the Company are owed to the London Stock Exchange plc and are not owed to
the Company or to any director or shareholder of the Company or any other
person including, without limitation, in respect of any decision to acquire
Placing Shares in reliance on any part of this Announcement.

 

Oberon Capital (a trading name of Oberon Investments Limited) ("Oberon"),
which is authorised and regulated by the FCA in the United Kingdom, is acting
as sole broker and bookrunner to the Company in connection with the Placing.
Oberon will not be responsible to any person other than the Company for
providing the protections afforded to clients of Oberon or for providing
advice to any other person in connection with the Placing or any acquisition
of shares in the Company.

 

Neither Stifel nor Oberon is not making any representation or warranty,
express or implied, as to the contents of this Announcement.

 

This Announcement is not intended to, and does not, constitute or form part of
any offer, invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any securities whether
pursuant to this Announcement or otherwise.

 

The distribution of this Announcement in jurisdictions outside the United
Kingdom may be restricted by law and therefore persons into whose possession
this Announcement comes should inform themselves about, and observe, such
restrictions. Any failure to comply with the restrictions may constitute a
violation of the securities law of any such jurisdiction.

 

Forward-looking statements

 

This Announcement includes "forward-looking statements" which includes all
statements other than statements of historical fact, including, without
limitation, those regarding the Company's financial position, business
strategy, plans and objectives of management for future operations, or any
statements preceded by, followed by or that include the words "targets",
"believes", "expects", "aims", "intends", "will", "may", "anticipates",
"would", "could" or similar expressions or negatives thereof. Such
forward-looking statements involve known and unknown risks, uncertainties and
other important factors beyond the Company's control that could cause the
actual results, performance or achievements of the Company to be materially
different from future results, performance or achievements expressed or
implied by such forward-looking statements. Such forward-looking statements
are based on numerous assumptions regarding the Company's present and future
business strategies and the environment in which the Company will operate in
the future. These and other risks are described more fully in the Company's
filings with the Securities and Exchange Commission, including the "Risk
Factors" section of its Annual Report on Form 10-K filed with the SEC, and
other filings the Company makes with the SEC from time to time. These
forward-looking statements speak only as at the date of this Announcement. The
Company expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statements contained herein to
reflect any change in the Company's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statements are
based unless required to do so by applicable law or the AIM Rules for
Companies.

 

No statement in this Announcement is intended to be a profit forecast and no
statement in this Announcement should be interpreted to mean that earnings per
share of the Company for the current or future financial years would
necessarily match or exceed the historical published earnings per share of the
Company.

 

This Announcement does not constitute a recommendation concerning any
investor's investment decision with respect to the Placing. Each investor or
prospective investor should conduct his, her or its own investigation,
analysis and evaluation of the business and data described in this
Announcement and publicly available information.

 

The new Ordinary Shares to be issued pursuant to the Fundraise will not be
admitted to trading on any stock exchange other than the AIM market of the
London Stock Exchange plc.

 

The price and value of Ordinary Shares of the Company can go down as well as
up. Past performance is not a guide to future performance.

 

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.

 

UK Product Governance Requirements

 

Solely for the purposes of the product governance requirements contained
within Chapter 3 of the FCA Handbook Product Intervention and Product
Sourcebook (the "UK Product Governance Requirements") and disclaiming all and
any liability, whether arising in tort, contract or otherwise, which any
"manufacturer" (for the purposes of the UK Product Governance Requirements)
may otherwise have with respect thereto, the Placing Shares have been subject
to a product approval process, which has determined that the Placing Shares
are: (i) compatible with an end target market of: (a) retail investors, (b)
investors who meet the criteria of professional clients and (c) eligible
counterparties (each as defined in the FCA Handbook Conduct of Business
Sourcebook); 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 Ordinary 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 offer. In all circumstances Oberon Capital 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 the
FCA Handbook Conduct of Business Sourcebook; 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.

 

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