REG - Sareum Holdings PLC - Equity Fundraise

Sareum HoldingsAnnouncement

28/03/2024 07:15

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RNS Number : 6684I  Sareum Holdings PLC  28 March 2024

 

THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) (THE "ANNOUNCEMENT") AND THE
INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE
OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE
UNITED STATES OF AMERICA, ITS STATES, TERRITORIES AND POSSESSIONS ("UNITED
STATES"), AUSTRALIA, CANADA, JAPAN, SINGAPORE, THE REPUBLIC OF SOUTH AFRICA OR
ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION
WOULD BE PROHIBITED BY ANY APPLICABLE LAW.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE
SOLICITATION TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY SECURITIES.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW
BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"), AND IS
DISCLOSED IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF
MAR.  IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN UK MAR) WERE TAKEN IN
RESPECT OF CERTAIN OF THE MATTERS CONTAINED WITHIN THIS ANNOUNCEMENT, WITH THE
RESULT THAT CERTAIN PERSONS BECAME AWARE OF INSIDE INFORMATION (AS DEFINED
UNDER UK MAR). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY
INFORMATION SERVICE, THOSE PERSONS THAT RECEIVED INSIDE INFORMATION IN A
MARKET SOUNDING ARE NO LONGER IN POSSESSION OF SUCH INSIDE INFORMATION, WHICH
IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

Sareum Holdings PLC

("Sareum" or the "Company")

Equity Fundraise

Cambridge, UK, 28 March 2024 - Sareum Holdings plc (AIM: SAR), a
clinical-stage biotechnology company developing next-generation kinase
inhibitors for autoimmune disease and cancer, announces that it has completed
a conditional fundraise of up to £1.5 million (before expenses), via the
issue of a total of up to 15,000,000 new ordinary shares of 1.25 pence each in
the capital of the Company ("Ordinary Shares") at a price of 10 pence per new
Ordinary Share (the "Placing Price") (the "Fundraise").

The Fundraise will comprise the issue, at the Placing Price, of:

·    9,550,000 new Ordinary Shares via a placing (the "Placing Shares")
through the Company's broker, Hybridan LLP (the "Placing");

·    up to 2,255,000 new Ordinary Shares via a direct subscription (the
"Subscription Shares") by certain high net worth individuals (the
"Subscription");

·    195,000 new Ordinary Shares via a subscription by certain Directors
of the Company (the "Director Subscription"); and

·    up to 3,000,000 new Ordinary Shares via a retail offering (the "WRAP
Retail Offer") to the Company's existing shareholders, which will be launched
shortly, to raise up to £300,000.

In addition, the Company will issue, based on the Placing Price, 576,698 new
Ordinary Shares in lieu of amounts owed to certain Directors from historically
deferred salaries (the "Salary Conversion Shares") and 450,000 new Ordinary
Shares to certain advisers to settle amounts due in respect of professional
fees (the "Adviser Fee Shares").

As a result of the Fundraise, 1,106,986 warrants over new Ordinary Shares that
have been issued to RiverFort Global Opportunities PCC Ltd ("Riverfort") as
part of the drawdowns to date under the Equity Prepayment Facility (as
announced on 3 August 2023), have had their exercise price rebased to the
Placing Price in accordance with the terms of the agreement entered into at
the time of the Equity Prepayment Facility. The Company does not intend to
make any further withdrawals pursuant to the Equity Prepayment Facility with
RiverFort.

Use of Proceeds and Cash Preservation

The net proceeds from the Fundraise are intended to be used by the Company to
complete Phase 1a clinical studies on its SDC-1801 TYK2/JAK1 inhibitor ("Phase
1a") and, together with the receipt of anticipated R&D tax credits in the
amount of £0.7 million which is expected in September 2024, for general
working capital purposes.

Furthermore, as part of the Company's ongoing steps to minimise its cash
utilisation, in addition to the Salary Conversion, the Directors have agreed
to defer a portion of their salaries going forward, so as to ensure the
completion of Phase 1a clinical trial can be achieved, with topline data from
the trial expected in Q2 2024.

Director Subscription, Salary Conversion and Related Party Transactions

Pursuant to the Director Subscription, Tim Mitchell, CEO, and Clive Birch,
Non-Executive Director, intend to participate in the Fundraise, via direct
subscriptions of £5,000 and £4,500 respectively at the Placing Price, and
Stephen Parker, Chairman, will subscribe for £10,000 via the WRAP Retail
Offer at the Placing Price. In addition, as noted above, certain Directors
will receive Salary Conversion Shares.

Following the issue of the shares pursuant to the Director Subscription and
the issue of the Salary Conversion Shares, the Directors' interests in the
Company will be as follows:

 Director         Current Shareholding  % of issued share capital  Salary Conversion Shares  Director Subscription Shares  Total following Fundraise
 Tim Mitchell*    1,032,561             1.44                       221,359                   50,000                        1,303,920
 John Reader*     1,077,111             1.50                       221,359                   -                             1,298,470
 Stephen Parker*  116,158               0.16                       104,854                   100,000                       321,012
 Clive Birch      44,597                0.06                       29,126                    45,000                        118,723
 Michael Owen     10,976                0.02                       -                         -                             10,976

* Includes shareholding by their spouses

Directors of the Company are classified as related parties under the AIM Rules
for Companies and their participation in the Director Subscription element of
the Fundraising and the issue of Salary Conversion Shares to Directors
therefore constitute related party transactions pursuant to Rule 13 of the AIM
Rules.

Accordingly, Michael Owen, being the sole independent director, considers,
having consulted with Strand Hanson Limited, the Company's Nominated Adviser,
that the terms of the abovementioned Directors' participation in the Director
Subscription and the issue of the Salary Conversion Shares to certain
Directors are fair and reasonable insofar as the Company's shareholders are
concerned.

Retail Offering

The Company will be shortly launching a retail offer to its existing
shareholders via the Winterflood Retail Access Platform ("WRAP") to raise up
to £300,000 (before expenses), through the issue of up to 3,000,000 new
Ordinary Shares at the Placing Price (the "WRAP Retail Offer"). The proceeds
of the WRAP Retail Offer will be utilised in the same way as the proceeds of
the Fundraise. A further announcement will be made by the Company in due
course regarding the WRAP Retail Offer and its terms and conditions. The WRAP
Retail Offer is expected to close at 12 noon on 2 April 2024.

Admission and Total Voting Rights

Completion of the Placing is conditional, inter alia, on receipt by the
Company of a minimum of £205,000 under the Subscription prior to 4 April 2024
and admission of the new Ordinary Shares to be issued pursuant to the
Fundraising (the "Fundraise Shares") to trading on AIM ("Admission") by 8.00
a.m. on 5 April 2024 (or such later time as the Company and Hybridan LLP may
agree, being not later than 8.30 a.m. on 30 April 2024).

Application will be made for the Fundraise Shares to be admitted to trading on
AIM and dealing is expected to commence on 5 April 2024. A further
announcement regarding the enlarged share capital following the Fundraise for
the purposes of the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules will be made following completion of the WRAP Retail Offer.

- Ends -

 

For further information, please contact:

 Sareum Holdings plc

 Tim Mitchell, CEO                                                     01223 497700

 Lauren Williams, Head of Investor Relations                           ir@sareum.co.uk

 Strand Hanson Limited (Nominated Adviser)

 James Dance / James Bellman                                           020 7409 3494

 Hybridan LLP (Joint Corporate Broker and Sole Broker to the Placing)

 Claire Noyce                                                          020 3764 2341

 Consilium Strategic Communications (Financial PR)

 Jessica Hodgson / Davide Salvi / Kumail Waljee                        0203 709 5700

 

About Sareum

Sareum Holdings (AIM:SAR) is a clinical-stage biotechnology company developing
next generation kinase inhibitors for autoimmune disease and cancer.

The Company is focused on developing next generation small molecules which
modify the activity of the JAK kinase family and have best-in-class potential.
Its lead candidate, SDC-1801, simultaneously inhibits TYK2 and JAK1. SDC-1801
is a potential treatment for a range of autoimmune diseases and has entered
Phase 1a/b clinical development with an initial focus on psoriasis.

Sareum is also developing SDC-1802, a TYK2/JAK1 inhibitor with a potential
application for cancer immunotherapy.

Sareum Holdings plc is based in Cambridge, UK, and is listed on the AIM market
of the London Stock Exchange, trading under the ticker SAR. For further
information, please visit the Company's website at www.sareum.com
(about:blank)

IMPORTANT NOTICE

This Announcement, and the information contained herein is not for release,
publication or distribution, directly or indirectly, in whole or in part, in
or into or from the United States, Canada, Australia, Singapore, Japan or the
Republic of South Africa, or any other jurisdiction where to do so might
constitute a violation of the relevant laws or regulations of such
jurisdiction (the "Restricted Jurisdictions").

This Announcement is not for publication or distribution, directly or
indirectly, in or into the United States of America. This announcement is not
an offer of securities for sale into the United States. The Fundraise Shares
referred to herein have not been and will not be registered under the
Securities Act and may not be offered or sold in the United States, expect
pursuant to an applicable exemption from registration. No public offering of
Fundraise Shares is being made in the United States.

This Announcement does not constitute or form part of an offer to sell or
issue or a solicitation of an offer to buy, subscribe for or otherwise acquire
any securities in any jurisdiction including, without limitation, the
Restricted Jurisdictions or any other jurisdiction in which such offer or
solicitation would be unlawful. This Announcement and the information
contained in it is not for publication or distribution, directly or
indirectly, to persons in a Restricted Jurisdiction, unless permitted pursuant
to an exemption under the relevant local law or regulation in any such
jurisdiction.

In the United Kingdom, this Announcement is directed only at: (i) investors
who have professional experience in matters relating to investments falling
within the meaning of Article 19(5) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005, as amended (the "FPO"); (ii) investors
who are high net worth companies, unincorporated associations or other bodies
within the meaning of Article 49(2)(a) to (d) of the FPO; and/or (iii) persons
to whom it may otherwise be lawfully communicated (each, a "Relevant Person").
No other person should act on or rely on this Announcement and persons
distributing this Announcement must satisfy themselves that it is lawful to do
so. By accepting the terms of this Announcement, investors represent and agree
that they are a Relevant Person.

This Announcement must not be acted on or relied on by persons who are not
Relevant Persons. Any investment or investment activity to which this
Announcement or the Fundraise relate is available only to Relevant Persons and
will be engaged in only with Relevant Persons. As regards all persons other
than Relevant Persons, the details of the Fundraise set out in this
Announcement are for information purposes only.

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.

This Announcement has not been approved by the London Stock Exchange or any
other securities exchange.

This Announcement is not being distributed by, nor has it been approved for
the purposes of section 21 of (the Financial Services and Markets Act 2000, as
amended ("FSMA") by Hybridan LLP, Strand Hanson Limited or any other person
authorised under FSMA. This Announcement is being distributed and communicated
to persons in the United Kingdom only in circumstances in which section 21(1)
of FSMA does not apply.

No prospectus or offering document will be made available in connection with
the matters contained in this Announcement and no such prospectus is required
(in accordance with the EU Prospectus Regulation or the UK Prospectus
Regulation) to be published.

Certain statements in this Announcement are forward-looking statements which
are based on the Company's expectations, intentions and projections regarding
its future performance, anticipated events or trends and other matters that
are not historical facts. These forward-looking statements, which may use
words such as "aim", "anticipate", "believe", "could", "intend", "estimate",
"expect" and words of similar meaning, include all matters that are not
historical facts. These forward-looking statements involve risks, assumptions
and uncertainties that could cause the actual results of operations, financial
condition, liquidity and dividend policy and the development of the industries
in which the Group's businesses operate to differ materially from the
impression created by the forward-looking statements. These statements are not
guarantees of future performance and are subject to known and unknown risks,
uncertainties and other factors that could cause actual results to differ
materially from those expressed or implied by such forward-looking statements.
Given those risks and uncertainties, prospective investors are cautioned not
to place undue reliance on forward-looking statements. Forward-looking
statements speak only as of the date of such statements and, except as
required by the UK Financial Conduct Authority ("FCA"), the London Stock
Exchange or applicable law, the Company undertakes no obligation to update or
revise publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.

Any indication in this Announcement of the price at which the Ordinary Shares
have been bought or sold in the past cannot be relied upon as a guide to
future performance. Persons needing advice should consult an independent
financial adviser. 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 Group.

Each of Strand Hanson Limited and Hybridan LLP, both of which are authorised
and regulated in the United Kingdom by the FCA, is acting for the Company and
for no one else in connection with the Fundraise and will not be responsible
to anyone other than the Company for providing the protections afforded to
clients of Strand Hanson Limited and Hybridan LLP respectively or for
providing advice in relation to the Fundraise Shares, or any other matters
referred to in this Announcement.

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 or on behalf of the Company, Strand Hanson Limited, Hybridan LLP, or by
their affiliates or their respective agents, directors, officers and employees
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 therefor is
expressly disclaimed.

The Fundraise Shares to be issued pursuant to the Fundraise will not be
admitted to trading on any stock exchange other than to trading on AIM, being
the market of that name operated by the London Stock Exchange.

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 the FCA Handbook Product Intervention and Product Governance Sourcebook
(the "UK Product Governance Rules"), and disclaiming all and any liability,
whether arising in tort, contract or otherwise, which any "manufacturer" (for
the purposes of the UK Product Governance Rules) 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: (a) 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 Chapter 3 of the FCA Handbook Conduct of Business Sourcebook ("COBS"); and
(b) eligible for distribution through all permitted distribution channels (the
"UK Target Market Assessment"). Notwithstanding the UK 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 UK 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 UK Target Market Assessment, Hybridan LLP
will only procure investors who meet the criteria of professional clients and
eligible counterparties.

For the avoidance of doubt, the UK Target Market Assessment does not
constitute: (a) an assessment of suitability or appropriateness for the
purposes of COBS 9A and COBS 10A, respectively; 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 UK target market assessment in respect of
the Placing Shares and determining appropriate distribution channels.

EU Product Governance Requirements

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, Hybridan LLP 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.

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