Fundraising and Appointment of Joint Broker

RNS Number : 4367I

RUA Life Sciences PLC

11 December 2020

 

11 December 2020

RUA Life Sciences plc

Conditional Placing and Subscription to raise £6.0m

Open Offer to Qualifying Shareholders to raise up to a further £1.0m

Cenkos Securities plc appointed joint broker

RUA Life Sciences plc (AIM: RUA or the "Company" or the "Group"), the holding company of a group of medical device businesses focused on the exploitation of Elast-Eon™, a long-term implantable biostable polymer, is pleased to announce it has conditionally raised approximately £6.0 million by way of a Placing and Subscription to new and existing investors.

Furthermore, to provide Shareholders with the opportunity to also subscribe for new Ordinary Shares, the Company is proposing to raise up to an additional c.£1.0 million by way of an Open Offer made to Qualifying Shareholders.

Key features of the Fundraising

· Conditional Placing and Subscription to raise £6.0 million through the conditional issue to placees of 4,908,333 New Ordinary Shares at 120 pence per share, with new and existing institutional investors, and subscription by certain directors and their family members for 91,667 New Ordinary Shares on the same terms as the Placing.

· Open Offer to raise up to an additional c.£1.0 million through an Open Offer of up to 831,522 New Ordinary Shares at 120 pence per share to Qualifying Shareholders, being 3 Open Offer Shares for every 59 Existing Ordinary Shares. The latest time and date for receipt of completed Application Forms or CREST applications and payment in respect of the Open Offer is 11.00 a.m. on 29 December 2020.

· The Fundraising is conditional, inter alia, on the passing of certain transaction specific resolutions ("Resolutions") by the Shareholders at a General Meeting, which will be convened for 11.00 a.m. on 30 December 2020 ("General Meeting").

· If the Resolutions are passed at the General Meeting, the New Ordinary Shares are expected to be admitted to trading on AIM at 8.00am on 31 December 2020.

· Cenkos Securities plc has been appointed as joint broker to the Company and acted as sole bookrunner in connection with the Placing.

Use of proceeds

The net proceeds of the Placing and Subscription of approximately £5.5 million will be used by the Company primarily to fund the acceleration of the Group's surgical heart valve through to human trials, to accelerate development of the Company's TAVI valve, to scale up the Group's graft manufacture to meet anticipated demand and to allow further investment in capital equipment to assist in the scale up of the Group's capacity.

General meeting

The Fundraising is conditional, inter alia, upon Shareholder approval at the General Meeting, which will be held at 11.00am on 30 December 2020.

In light of the ongoing COVID-19 pandemic and with a view to taking appropriate measures to safeguard its Shareholders' health and make the General Meeting as safe and efficient as possible, the Company is urging Shareholders to exercise their votes by submitting their Form of Proxy and appointing the Chairman of the General Meeting as their proxy.

Shareholders will not be allowed to attend the meeting in person, as to do so would be inconsistent with current government guidelines relating to COVID-19, in particular the advice for people to avoid public gatherings, all non-essential travel and social contact. Any Shareholder seeking to attend the General Meeting in person will be refused entry.

The Company is actively following developments and will issue further information through a Regulatory Information Service and/or on its website (www.rualifesciences.com) if it becomes necessary or appropriate to make any alternative arrangements for the General Meeting. The General Meeting will be purely functional in format to comply with the relevant legal requirements.

Questions related to the business of the General Meeting can be raised by Shareholders in advance of the General Meeting and, in so far as is relevant to the business of the General Meeting, will be taken into account as appropriate at the General Meeting itself. A summary of the questions received (if any), together with the answers, will be published on the Company's website shortly after the General Meeting has concluded. If any Shareholder would like to ask questions about the business of the General Meeting, they should contact the Company Secretary at [e-mail] in advance of the General Meeting.

The Company will shortly be posting a Notice of General Meeting and an accompanying circular (the "Circular") to Shareholders following the release of this announcement. All relevant documents will also be available to download from the Company's website at www.rualifesciences.com/investor-relations/.

Terms defined in the Circular apply throughout this announcement, unless the context requires otherwise.

Subject to, inter alia, the passing of the Resolutions at the General Meeting, up to 5,831,522 Ordinary Shares are expected to be admitted to trading on AIM at 8.00 am on 31 December 2020.

Bill Brown, Chairman of RUA Life Sciences plc, said:

"RUA Life Sciences has seen exciting developments of late, with the business having recently transformed into a fully formed medical device manufacturer; the vascular and graft business being engaged in commercialisation discussions with major corporations; and the heart valve business returning exceptional testing results.

The Company is now entering a pivotal point in the commercialisation of its products, and with the new funds to help accelerate these exciting pathways, this inflection point is evidenced by new institutional shareholders joining the register via the Placing."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

For more information please contact:

RUA Life Sciences plc
Bill Brown, Chairman David Richmond, CEO	Tel: [phone] Tel: [phone]
Shore Capital (Nomad and Joint Broker) Tom Griffiths/David Coaten Cenkos Securities plc (Joint Broker)	Tel: [phone] Tel: [phone]
Russell Cook/Max Gould (Corporate Finance) Michael Johnson (Sales)

About RUA Life Sciences plc

The RUA Life Sciences group was created in April 2020 when RUA Life Sciences Plc (formerly known as AorTech International Plc) acquired RUA Medical Devices Limited to create a fully formed medical device business. RUA Life Sciences is the holding company of the Group's four trading businesses, each exploiting the Group's patented polymer technology.

Our vision is to improve the lives of millions of patients by improving and enabling medical devices with Elast-Eon™, widely accepted as being the most biostable of all long-term implantable polyurethanes.

Whether it is licensing Elast-Eon™, manufacturing a device or component or developing next generation medical devices, a RUA Life Sciences business is pursuing our vision.

Elast-Eon™'s biostability is comparable to silicone while exhibiting excellent mechanical, blood contacting and flex-fatigue properties. These polymers can be processed using conventional thermoplastic extrusion and moulding techniques. With over 7 million implants and over 14 years of successful clinical use, the Group's polymers are proven in long-term life enabling applications.

The Group's four business units are:    

RUA Medical :	End-to-end contract developer and manufacturer of medical devices and implantable fabric specialist.
RUA Biomaterials :	Licensor of Elast-Eon TM  polymers to the medical device industry.
RUA Vascular :	Commercialisation of large bore polymer sealed grafts and soft tissue patches.
RUA Structural Heart :	Development of tri leaflet polymeric heart valves.

The following is extracted from the Circular:

1.  Introduction

The Company has today announced that it has conditionally raised £6.0 million (before expenses), pursuant to a Placing of £5.89 million and, in addition, certain Directors and their families intend to subscribe approximately £0.11 million for the Subscription Shares. The Company is undertaking an Open Offer to raise up to an additional £1.0 million.  The Open Offer provides Qualifying Shareholders with an opportunity to participate in the proposed issue of New Ordinary Shares on the same terms as the Placees.

The issue price of 120 pence per New Ordinary Share represents a 25 per cent. discount to the closing middle market price of 160 pence per Existing Ordinary Share on 10 December 2020, the last Business Day before the announcement of the Proposals.

The Fundraising is conditional, inter alia, on the passing of Resolutions 1 and 2 by Shareholders at the General Meeting, which has been convened for 11:00 a.m. on 30 December 2020. If the Resolutions are passed, the New Ordinary Shares are expected to be allotted immediately after the General Meeting, conditional on Admission, which is expected to occur at 8:00 a.m. on 31 December 2020.  Should Shareholder approval not be obtained at the General Meeting, the Fundraising will not proceed.  The Fundraising has not been underwritten.

The purpose of this document is to explain the background to the Fundraising, to set out the reasons why the Board believes that the Proposals are in the best interests of the Company and its Shareholders and to seek Shareholder approval of the Resolutions at the forthcoming General Meeting, which will be held at the offices of Davidson Chalmers Stewart LLP, 163 Bath Street, Glasgow G2 4SQ at 11:00 a.m. on 30 December 2020.

As at the date of this Document, the UK and Scottish Governments have implemented various restrictions as a result of the COVID-19 pandemic, including restrictions on public gatherings and non-essential travel, (generally referred to as "COVID related restrictions").  The Board have accordingly decided on special arrangements to apply for the holding of the General Meeting which will be run as a "closed meeting". Shareholders must not attend the General Meeting in person and anyone seeking to attend will be denied entry.  Further details are set out in Section 9 below.

2.  Background to and reasons for the Fundraising

Background

The RUA Life Sciences Group, owns patents for the novel bio-compatible polymer, Elast-Eon™, provides third-party medical device development and manufacturing services and is internally developing Elast-Eon™ based medical devices to treat cardiovascular conditions. Through its licensees, RUA has been producing and selling the Elast-Eon™ polymer which has been used in long term implantable devices for over 14 years. Devices incorporating Elast-Eon™ are used in circulatory support, urology, vascular and cardiac rhythm management.

Following the acquisition of RUA Medical Devices Limited in April 2020 the Group is now able to design, develop and manufacture its own products to exploit the potential of the Elast-Eon™ technology.  The Group's vascular products under development include a range of vascular grafts and soft tissue patches.  The Group is also developing a disruptive synthetic leaflet system for incorporation into both surgical and trans catheter implantable heart valves. The leaflet system is designed to have multiple advantages over existing heart valve products, both mechanical valves and animal-based implants.

Elast-Eon^TM

The Elast-Eon™ family of polymers combine the advantageous properties of both polyurethanes and silicone rubbers into a single material. These polymers exhibit the physical and mechanical performance of polyurethanes and a biological stability that surpasses rigid biostable polyurethanes. Elast-Eon™ polymers are widely accepted as being the most biostable of all polyurethane materials and, as such, are being used in long-term implantation. The materials are ideal for use in implantable medical devices such as cardiac pacing leads, neuromodulation leads, stent coating, and interventional cardiac devices. There is currently a wide range of Elast-Eon™ polymer compounds available to the medical market. Main competing products in this area are CarboSil ® and PurSil ® by DSM Biomedical BV, and Tecothane ® and Carbothane ® by Lubrizol.

Elast-Eon™ displays beneficial properties such as being biocompatible, durable and abrasion resistant, non-calcific, bio stable, non-inflammatory and shows good wear properties.  The current COVID-19 pandemic has highlighted the benefits of using a highly biocompatible polymer over the traditional animal-sourced alternatives, such as collagen and gelatine.  Cases of disease transmission from animal to human and then back to the animals are strong drivers for the use of stable polymer-based alternatives such as Elast-Eon™.

Vascular Business

The Group's vascular business aims to participate in the vascular graft market, valued at approximately US $2 billion in 2018, and the cardiovascular and soft tissue patches market, valued at approximately US $3 billion in 2018. The Group has developed and manufactured a range of large bore vascular grafts which are currently undertaking regulatory testing with the objective of seeking regulatory approval to commence marketing them. These grafts combine the sealing properties of the Elast Eon™ bio compatible polymer with an improved graft construction utilising the Group's implantable textile expertise. The grafts fully eliminate the use of animal by products such as collagen and gelatine.

Structural Heart

The Group is aiming to disrupt the surgical and TAVI heart valve market projected to reach US $8 billion in 2022, in the global treatment of heart disease. The Group aims to achieve this by delivering a synthetic heart valve that will be durable, so reducing the need for future replacement, and should not require lifelong drug treatment. As well as these clinical advantages, the manufacturing costs of a synthetic valve are expected to be considerably less than those of current valve technology making this a potentially disruptive advance in heart valve surgery.

Reasons for the Fundraising

Vascular Business

The Group continues to develop its key products in both the vascular and heart value businesses and has seen recent continued success in their development.

Vascular graft and patch commercial discussions have been progressing well and include the Group currently being under non-disclosure agreements with major corporations. Indicative demand from OEM customers would mean the Group requires a scale up in production capacity to meet potential demand, which would require investment in equipment, tooling and people. The Group is also pursuing commercial deals for its own portfolio of medical devices to be brought to market through experienced distributors of cardio vascular devices.

Heart Valve

Recent testing of the Group's surgical heart valve, as announced on 23 November 2020, returned excellent results and indicates that the valve would work in humans. Recent transactions in developing heart valve technologies indicate that a competitor company with a polymeric surgical valve may, the Directors believe, be worth around £120 million at the point of early stage feasibility trials in man ("First in Man").

Additional capital investment should shorten the FDA submission timeline for surgical values by approximately two years and should accelerate the development of the Group's TAVI valve to "First in Man" status by approximately three years.  The Group thus sees an opportunity to accelerate the commercialisation of its surgical heart value and increase value for shareholders.

3.  Use of Proceeds

The Company has conditionally raised gross proceeds of approximately £6.0 million by way of the Placing and  the Subscription. The Open Offer will be in addition to this amount. The primary purposes of the Fundraising are to fund the acceleration of the Group's surgical heart valve through to human trials, to accelerate development of the Group's TAVI valve, to scale up the Group's graft manufacture to meet anticipated demand and to allow further investment in capital equipment to assist in the scale up of the Group's capacity.

4.  Details of the Fundraising

The Company has conditionally raised up to approximately £ 6.0 million (before expenses), comprising: i) the Placing to raise £ 5.89 million (before expenses) through a placing of 4,908,333 New Ordinary Shares at 120   pence per share with institutional and other investors; ii) the Subscription to raise £0.11 million  through a subscription for 91,667 New Ordinary Shares at 120 pence per share by certain Directors and their families; and iii) the Open Offer to raise up to an additional £1.0 million (before expenses) through an Open Offer of up to 831,522 New Ordinary Shares at 120   pence per share with Qualifying Shareholders.

The Fundraising has not been underwritten and is conditional, inter alia, upon:

a)  the passing of Resolutions 1 and 2 by Shareholders at the General Meeting;

b)  the Placing Agreement becoming unconditional in all respects (other than Admission) and not having been terminated in accordance with its terms; and

c)  Admission occurring by not later than 8:00 a.m. on 31 December 2020 (or such later time and/or date as the Company ,Cenkos Securities and Shore Capital may agree, not being later than 8:00 a.m. on 31 January 2021).

Accordingly, if any of the conditions are not satisfied or waived (where capable of waiver), the Fundraising will not proceed, the New Ordinary Shares will not be issued and all monies received by Cenkos Securities, the Company or the Receiving Agents (as the case may be) will be returned to the applicants (at the applicants' risk and without interest) as soon as possible thereafter.

The Directors believe that the Placing Shares will meet the requirements of section 173 ITA for the purposes of the EIS and the Company is a Qualifying Holding and the Placing Shares are eligible shares for the purposes of investment by VCTs. EIS/VCT relief will not be available in respect of the Open Offer Shares.

Details of the Placing

Under the terms of the Placing Agreement, Cenkos Securities has agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Issue Price.  The Placing Agreement contains certain warranties and indemnities from the Company in favour of Shore Capital and Cenkos Securities and Shore Capital or Cenkos Securities may terminate the Placing Agreement in certain customary circumstances.

Details of the Open Offer

In recognition of their continued support to the Company, the Board believes that the Open Offer provides the Company's longstanding and supportive Shareholders with an opportunity to participate in the Fundraising.

The Company is providing all Qualifying Shareholders with the opportunity to subscribe, at the Issue Price, for an aggregate of 831,522 Open Offer Shares, raising gross proceeds of up to approximately £1.0 million.

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

3 Open Offer Shares for every 59   Existing Ordinary Shares

and so in proportion for any number of Existing Ordinary Shares held on the Record Date.

Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Ordinary Shares.  Fractional entitlements which would otherwise arise will not be issued to the Qualifying Shareholders but will be 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.

Valid applications by Qualifying Shareholders will be satisfied in full up to their Open Offer Entitlements.   Qualifying Shareholders can apply for less or more than their Open Offer Entitlements but the Company cannot guarantee that any application for Excess Shares under the Excess Application Facility will be satisfied as this will depend in part on the extent to which other Qualifying Shareholders apply for less than or more than their own Open Offer Entitlements.  The Company may satisfy valid applications for Excess Shares in whole or in part but reserves the right at its sole discretion not to satisfy, or to scale back, applications made in excess of Open Offer Entitlements.

Application has been made for the Open Offer Entitlements and Excess CREST Open Offer Entitlements for Qualifying CREST Shareholders to be admitted to CREST.  It is expected that the Open Offer Entitlements and the Excess CREST Open Offer Entitlements will be admitted to CREST on 14 December 2020. Applications through the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

The Open Offer Shares must be paid in full on application. The latest time and date for receipt of completed Application Forms or CREST applications and payment in respect of the Open Offer is 11:00 a.m. on 29 December 2020.

Not all Shareholders will be Qualifying Shareholders.  Shareholders who are located in, or are citizens of, or have a registered office in certain overseas jurisdictions will not qualify to participate in the Open Offer.  The attention of Overseas Shareholders is drawn to paragraph 5 below.

Qualifying Shareholders should note that the Open Offer is not a rights issue and therefore the Open Offer Shares which are not applied for by Qualifying Shareholders will not be sold in the market for the benefit of the Qualifying Shareholders who do not apply under the Open Offer.  The Application Form is not a document of title and cannot be traded or otherwise transferred.

Further details of the Open Offer and the terms and conditions on which it is being made, including the procedure for application and payment, are contained in Part III of this document and on the accompanying Application Form.

Rights of the New Ordinary Shares and application for Admission

The New Ordinary Shares will, when issued, be credited as fully paid up and will be issued subject to the  Articles of Association and 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 on or in respect of the Ordinary Shares after the date of issue of the New Ordinary Shares, and will on issue be free of all claims, liens, charges, encumbrances and equities.

Application will be made to the London Stock Exchange for the Admission of the New Ordinary Shares to trading on AIM. It is expected that Admission of the New Ordinary Shares will occur on or around 8:00 a.m.  on 31 December 2020 (or such later time and/or date as Cenkos Securities or Shore Capital may agree with the Company, being not later than 8:00 a.m. on 31 January 2021 ).

5.  Overseas Shareholders

The attention of Qualifying Shareholders who have registered addresses outside the United Kingdom, or who are citizens or residents of countries other than the United Kingdom, or who are holding Existing Ordinary Shares for the benefit of such persons, (including, without limitation, custodians, nominees, trustees and agents) or who have a contractual or other legal obligation to forward this document or the Application Form to such persons, is drawn to the information which appears in paragraph 6 of Part III of this document.

In particular, Qualifying Shareholders who have registered addresses in or who are resident in, or who are citizens of, countries other than the UK (including without limitation the United States of America), should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their entitlements under the Open Offer.

6.  Risk factors and additional information

The attention of Shareholders is drawn to the Risk Factors set out in Part II and the information contained in Parts III and IV of this document, which include additional information on the Open Offer.

7.  Directors' participation in the Fundraising

As part of the Fundraising, certain Directors (or their family members) intend to subscribe for an aggregate of 91,667 Subscription Shares at the Issue Price.  Details of the Subscription Shares for which the Directors (or their family members) intend to subscribe (either personally or through a nominee) are:

Director (or family member) intending to subscribe for Subscription Shares	Number of Subscription Shares	Value of Subscription Shares
William Brown*	62,500	£75,000
David Richmond	-	-
John McKenna*	16,667	£20,000
John Ely	4,167	£5,000
Geoffrey Berg	8,333	£10,000

*in the case of this Director, it is intended that the Subscription will be made by adult, non-dependent children. 

The Directors' interests in the Enlarged Share Capital, assuming full subscription under the Open Offer, will be:

Director	Number of Ordinary Shares	Percentage of Enlarged Share Capital
William Brown	473,315	2.1%
David Richmond	1,533,334	6.9%
John McKenna	18,785	0.1%
John Ely	4,167	0.0%
Geoffrey Berg	25,000	0.1%

8.  General Meeting

T he General Meeting is being called to seek Shareholders' approval to grant new authorities to enable the Directors, inter alia, to allot the New Ordinary Shares.

You will find set out at the end of this Document a notice convening the General Meeting to be held at the offices of Davidson Chalmers Stewart LLP, 163 Bath Street, Glasgow G2 4SQ at 11.00 a.m. on 30 December 2020 at which the following resolutions will be proposed:

Resolution 1 - Authority to allot shares (Ordinary Resolution)

This resolution seeks the approval of Shareholders to authorise the Directors to allot the New Ordinary Shares for the purposes of the Fundraising.

Resolution 2 - Powers to disapply pre-emption rights (Special Resolution)

This resolution seeks the approval of Shareholders to authorise the Directors to disapply pre-emption rights in connection with the allotment of New Ordinary Shares for the purposes of the Fundraising.

Resolution 3 - Authority to allot shares (Ordinary Resolution)

A resolution was approved at the Company's annual general meeting held on 11 August 2020 which gave the Directors a general authority to allot new shares in the Company and to grant rights to subscribe for, or convert any securities into, shares. As the issued share capital of the Company will be increased by the issue of the New Ordinary Shares, the Board would like to renew this authority to take account of the Enlarged Share Capital and to provide the Directors with flexibility to allot new Ordinary Shares and grant rights up until the Company's next annual general meeting within the limits prescribed by the Investment Association.

The Investment Association's guidelines on Directors' allotment authority state that the Association's members will regard as routine any proposal at a general meeting to seek a general authority to allot an amount up to two-thirds of the existing share capital, provided that any amount in excess of one-third of the existing share capital is applied to fully pre-emptive rights issues only.

This resolution would authorise the Directors to allot (or grant rights over) new Ordinary Shares in the Company (i) under an open offer or in any situation other than a rights issue up to an aggregate nominal amount of £366,049 (representing approximately 33 per cent. of the Enlarged Share Capital) and (ii) under a rights issue up to an aggregate nominal amount of £732,098 (representing approximately 66 per cent. of the Enlarged Share Capital).

Resolutions 4 and 5 - Powers to disapply pre-emption rights (Special Resolutions)

These resolutions will replace the authorities and powers granted by resolutions passed at the Company's annual general meeting on 11 August 2020 and would give the Directors powers to allot Ordinary Shares for cash without first offering those shares to existing shareholders in proportion to their existing holdings.

The resolutions seek powers which reflect the Statement of Principles published by the Pre-Emption Group in March 2015 (and endorsed by the Investment Association) which provide that a company may seek power to issue on a non-pre-emptive basis for cash shares in any one year representing: (i) no more than 5 per cent. of the company's issued ordinary share capital; and (ii) no more than an additional five per cent. of the company's issued ordinary share capital provided that such additional power is only used in connection with an acquisition or specified capital investment.

Accordingly, and in line with best practice, the Board is seeking two separate powers to disapply pre-emption rights.

Resolution 4 would permit the Board to allot Ordinary Shares for cash on a non-pre-emptive basis both in connection with a rights issue or similar pre-emptive issue and, otherwise than in connection with any such issue, up to a maximum nominal amount of £55,462. This amount represents approximately 5 per cent. of the Enlarged Share Capital. This resolution will permit the Board to allot Ordinary Shares for cash, up to the specified level, in any circumstances (whether or not in connection with an acquisition or specified capital investment).

Resolution 5 would give the Board an additional power to allot Ordinary Shares for cash on a non-pre-emptive basis up to a further maximum nominal amount of £55,462 (again representing approximately 5 per cent. of the Enlarged Share Capital). In compliance with the Pre-Emption Group's Statement of Principles, the Directors confirm that they will not allot shares for cash on a non-pre-emptive basis pursuant to the power conferred by Resolution 5 other than in connection with an acquisition or specified capital investment which is announced contemporaneously with the issue or which has taken place in the preceding six-month period and is disclosed in the announcement of the allotment.

The authorities to allot and to waive pre-emption rights in terms of Resolutions 1 and 2 are in addition to existing powers and authorities and are specific to the Fundraising.

The authorities to allot and to waive pre-emption rights in terms of Resolutions 3, 4 and 5 are in substitution for the authorities given to the Directors at the 2020 annual general meeting of the Company and will fall to be renewed at the 2021 annual general meeting of the Company.

9.  Arrangements for the General Meeting

At the date of this Document, the UK and Scottish Governments have implemented various restrictions as a result of the COVID-19 pandemic, including restrictions on public gatherings and non-essential travel.  The Board have accordingly decided on special arrangements to apply for the holding of the General Meeting. If there are any changes to these arrangements, they will be communicated to Shareholders via the Company's website at https://rualifesciences.com/investor-relations/.

· The General Meeting will be run as a "closed meeting". Shareholders must not attend the General Meeting in person and anyone seeking to attend will be denied entry. Similarly, only the Chairman of the General Meeting should be appointed as a proxy or corporate representative of a Shareholder.

· The Company will make arrangements for a quorum to be present (expected to be two Directors, who are Shareholders) to transact the business of the meeting as set out in the Notice of the General Meeting.

· All the Resolutions will be voted on by way of a poll vote, so that all valid proxies appointing the Chairman of the General Meeting submitted by Shareholders will be included in the voting.

· The Directors strongly recommend you to complete and return the Form of Proxy, with your voting instructions, in accordance with the instructions on the Form. The deadline for the receipt of a Proxy Form by the Registrars is 11.00 a.m. on 24 December 2020.

· Questions related to the business of the General Meeting can be raised by Shareholders in advance of the General Meeting and, in so far as is relevant to the business of the General Meeting, will be taken into account as appropriate at the General Meeting itself. A summary of the questions received, together with the answers, will be published on the Company's website shortly after the General Meeting has concluded. If any Shareholder would like to ask questions about the business of the General Meeting, they should contact the Company Secretary at [e-mail] in advance of the General Meeting.

· The results of the General Meeting will be announced as soon as practicable after it has taken place.

Whilst submission of a proxy would not ordinarily preclude Shareholders from attending and voting in person at the General Meeting or any adjournment thereof, in line with the Covid related restrictions, any Shareholder attempting to attend the General Meeting will be denied entry.

Shareholders will find accompanying this Document a Form of Proxy for use in connection with the General Meeting. The Directors strongly recommend Shareholders to complete the Form of Proxy in accordance with the instructions thereon and return it so as to be received by the Registrar as soon as possible and in any event not later 11.00 a.m. on 24 December 2020.

10.  Action to be taken by Shareholders

General Meeting

Qualifying Non-CREST Shareholders should check that they have received the following with this document:

· an Application Form to enable participation in the Open Offer;

· a Form of Proxy for use in relation to the General Meeting; and

· a reply-paid envelope for use in connection with the return of the Form of Proxy (in the UK only).

You are strongly encouraged to complete, sign and return your Form of Proxy in accordance with the instructions printed thereon so as to be received, by post to Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA   as soon as possible but in any event so as to arrive by not later than 11:00 a.m. on 24 December 2020 (or, in the case of an adjournment of the General Meeting, not later than 48 hours before the time fixed for the holding of the adjourned meeting (excluding any part of a day that is not a Business Day)).

Open Offer

The latest time for application under the Open Offer to be received is 11.00 a.m. on 29 December 2020. The procedure for application and payment depends on whether, at the time at which application and payment is made, you have an Application Form in respect of your Open Offer Entitlements or have Open Offer Entitlements credited to your stock account in CREST in respect of such entitlement. The procedures for application and payment are set out in Part III of this document.

If you are a Qualifying Non-CREST Shareholder you will have received an Application Form which gives details of your entitlement under the Open Offer (as shown by the number of Open Offer Entitlements allocated to you). If you wish to apply for Open Offer Shares under the Open Offer (whether in respect of your Open Offer Entitlement or both your Open Offer Entitlement and any Excess Shares), you should complete the accompanying Application Form in accordance with the procedure for application set out in Part III of this document. Shareholders are advised to return the Application Form using the enclosed reply-paid envelope, which can also be used for return of completed Forms of Proxy.

If you are a Qualifying CREST Shareholder and do not hold any Existing Ordinary Shares in certificated form, no Application Form is enclosed with this document and you will receive a credit to your appropriate stock account in CREST in respect of the Open Offer Entitlements representing your entitlement under the Open Offer except (subject to certain conditions) if you are an Overseas Shareholder who has a registered address in, or is a resident in or a citizen of a Restricted Jurisdiction. Applications by Qualifying CREST Shareholders for Excess Shares in excess of their Open Offer Entitlements should be made in accordance with the procedures set out in Part III of this document, unless you are an Overseas Shareholder, in which event applications should be made in accordance with the procedures set out in paragraph 6 of Part III of this document. Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsors regarding the action to be taken in connection with this document and the Open Offer.

If you are in any doubt as to what action you should take, you should immediately seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant or other independent professional adviser duly authorised under the FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

11.  Additional information

Your attention is drawn to the risk factors set out in Part II of this Document. Shareholders are advised to read the whole of this Document and not rely solely on the summary information presented in this letter.

Details of the actions to be taken if you wish to subscribe for Open Offer Shares are provided in Part III of this Document.

12.  Recommendation

The Directors believe that the Fundraising is in the best interests of the Company and its Shareholders as a whole.  Accordingly, the Directors unanimously recommend Shareholders to vote in favour of the Resolutions as they intend so to do in respect of their beneficial shareholdings amounting to 2,042,101 Existing Ordinary Shares, representing approximately 12.5 per cent. of the Company's issued Ordinary Share capital.

Yours faithfully

William Brown

Chairman

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

		2020
Record Date for the Open Offer	6.00 p.m. on 9 December
Announcement of details of the Fundraising	11 December
Publication and posting of this Document, Form of Proxy and Application Form	11 December
Ex-entitlement Date for the Open Offer	7.00 a.m. on 14 December
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts of Qualifying CREST Shareholders in CREST	As soon as practical after 8:00 a.m. on 14 December
Latest recommended time and date for requesting withdrawal of Open Offer Entitlements from CREST	4.30 p.m. on 21 December
Latest time and date for depositing Open Offer Entitlements into CREST	3.00 p.m. on 22 December
Latest time and date for splitting of Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 23 December
Latest time and date for receipt of completed Forms of Proxy and receipt of electronic proxy appointments via the CREST system	11.00 a.m. on 24 December
Latest time and date for receipt of the completed Application Form and appropriate payment in respect of Open Offer Shares or settlement of relevant CREST instruction	11.00 a.m. on 29 December
General Meeting	11.00 a.m. on 30 December
Announcement of result of General Meeting and Placing and Open Offer	30 December
Admission of and commencement of dealings in the New Ordinary Shares on AIM	8.00 a.m. on 31 December
New Ordinary Shares credited to CREST stock accounts	31 December
Despatch of definitive share certificates for New Ordinary Shares	Within 10 days of Admission

If any of the details contained in the timetable above should change, the revised times and dates will be notified to Shareholders by means of an announcement through a Regulatory Information Service.

Certain of the events in the above timetable are conditional upon, inter alia, the approval of the Resolutions to be proposed at the General Meeting.

All references to time and dates in this document are to time and dates in London.  

KEY STATISTICS

Number of Existing Ordinary Shares	16,353,275
Number of Placing Shares	4,908,333
Number of Subscription Shares	91,667
Maximum number of Open Offer Shares	831,522
Issue Price	120 pence
Percentage of the Enlarged Share Capital represented by the New Ordinary Shares*	26.3 per cent.
Gross proceeds of the Placing and Subscription	£6 million
Maximum gross proceeds of the Open Offer	approximately £1 million
Estimated net proceeds of the Fundraising	up to approximately £6.44 million
Number of Ordinary Shares in issue immediately following the Fundraising*	22,184,797

*Assuming full take up under the Open Offer

DEFINITIONS

The following definitions apply throughout this document 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 the AIM Rules for Companies;
"AIM"	the market of that name operated by the London Stock Exchange;
"AIM Rules for Companies"	the AIM Rules for Companies, as published and amended from time to time by the London Stock Exchange;
"Application Form"	the application form enclosed with this document on which Qualifying Non-CREST Shareholders may apply for Open Offer Shares under the Open Offer;
"Articles of Association"	the Company's articles of association as at the date of this document;
"Board" or "Directors"	the directors of the Company as at the date of this document, whose names are set out on page 11 of the Circular;
"Business Day"	any day (excluding Saturdays and Sundays) on which banks are open in London for normal banking business and the London Stock Exchange is open for trading;
" Cenkos Securities "	Cenkos Securities plc, a public limited company incorporated in England and Wales under registered number 05210733 and having its registered office at 6.7.8 Tokenhouse Yard, London, EC2R 7AS, the Company's broker for the purposes of the Fundraising;
"certificated" or "in certificated form"	where an Ordinary Share is not in uncertificated form (i.e. not in CREST);
"Chairman"	the chairman of the Board;
"Company" or "RUA" or 'RUA Life Sciences"	RUA Life Sciences plc, a company registered in Scotland with registered number SC170071;
"CREST"	the relevant system for the paperless settlement of trades and the holding of uncertificated securities operated by Euroclear UK & Ireland Limited in accordance with the CREST Regulations;
"CREST Manual"	the CREST Manual referred to in agreements entered into by Euroclear and available at www.euroclear.com;
"CREST member"	a person who has been admitted to CREST as a system-member (as defined in the CREST Regulations);
"CREST member account ID"	the identification code or number attached to a member account in CREST;
"CREST participant"	a person who is, in relation to CREST, a system-participant (as defined in the CREST Regulations);
"CREST participant ID"	shall have the meaning given in the CREST Manual;
"CREST payment"	shall have the meaning given in the CREST Manual;
"CREST Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001/3755) including any enactment or subordinate legislation which amends or supersedes those regulations and any applicable rules made under those regulations or any such enactment or subordinate legislation for the time being in force;
"CREST sponsor"	a CREST participant admitted to CREST as a CREST sponsor;
"CREST sponsored member"	a CREST member admitted to CREST as a CREST sponsored member;
"EIS"	the Enterprise Investment Scheme under the provisions of Part 5 of the ITA and sections 150 and 150A, B and C and Schedule 5B of the Taxation of Chargeable Gains Act 1992 (as amended);
"EnlargedShareCapital"	the entire issued Ordinary Share capital of the Company on Admission following completion of the Fundraising, assuming full take up under the Open Offer;
"Euroclear"	Euroclear UK & Ireland Limited;
" 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 Entitlement "	in respect of each Qualifying CREST Shareholder, their entitlement (in addition to their Open Offer Entitlement) to apply for Open Offer Shares pursuant to the Excess Application Facility, which is conditional on them taking up their Open Offer Entitlement in full;
" Excess Shares "	Ordinary Shares applied for by 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 14 December 2020;
"ExistingOrdinaryShares"	the 16,353,275 Ordinary Shares in issue at the date of this document;
"FCA"	the Financial Conduct Authority of the United Kingdom;
"Form of Proxy"	the form of proxy for use by Shareholders in relation to the General Meeting, enclosed with this document;
"FSMA"	the Financial Services and Markets Act 2000 (as amended);
"Fundraising"	the Placing, the Subscription and the Open Offer;
"GeneralMeeting" or "GM"	the General Meeting of the Company convened for 11:00 a.m. on 30 December 2020 or any adjournment thereof, notice of which is set out at the end of this document;
"Group"	the Company and its subsidiaries (as defined in the Act);
"Issue Price"	120 pence per New Ordinary Share;
"ITA"	UK Income Tax Act 2007;
"London Stock Exchange"	London Stock Exchange plc;
"Money Laundering Regulations"	the money laundering and terrorist financing provisions of the Criminal Justice Act 1993, the Terrorism Act 2000, the Proceeds of Crime Act 2002, the Terrorism Act 2006 and the Money Laundering Regulations 2007, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017;
"New Ordinary Shares"	the Placing Shares and/or the Subscription Shares and/or the Open Offer Shares (as the context permits);
"NoticeofGeneral Meeting"	the notice convening the General Meeting as set out at the end of this document;
"Open Offer Shares"	up to 831,522 new Ordinary Shares being made available to Qualifying Shareholders pursuant to the Open Offer;
" Open Offer "	the conditional invitation made to Qualifying Shareholders to apply to subscribe for Open Offer Shares at the Issue Price on the terms and subject to the conditions set out in Part III of this document and, where relevant, in the Application Form;
"Open Offer Entitlement"	the pro rata entitlement of a Qualifying Shareholder, pursuant to the Open Offer, to subscribe for 3 Open Offer Share for every 59 Existing Ordinary Shares registered in their name as at the Record Date;
" Official List "	the Official List of the FCA;
"Ordinary Shares"	the ordinary shares of 5 pence each in the capital of the Company in issue from time to time;
"Overseas Shareholder"	a Shareholder with a registered address outside the United Kingdom;
"Placees"	subscribers for the Placing Shares;
"Placing"	the proposed placing by Cenkos Securities (as agent for the Company) of the Placing Shares with certain institutional investors and existing Shareholders, otherwise than on a pre-emptive basis, at the Issue Price on the terms of the Placing Agreement;
"Placing Agreement"	the conditional placing agreement entered into between the Company, Shore Capital and Cenkos Securities in respect of the Placing, dated 11 December 2020 , as described in this document;
"Placing Shares"	4,908,333 new Ordinary Shares the subject of the Placing;
"Proposals"	the Fundraising;
"Prospectus Regulation"	EU Prospectus Regulation 2107/1129;
"Qualifying CREST Shareholders"	Qualifying Shareholders holding Existing Ordinary Shares in a CREST account;
"Qualifying Holding"	means a qualifying holding for the purposes of Chapter 4 of Part 6 of ITA;
"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 Record Date (but excluding any Overseas Shareholder who has a registered address in the United States of America or any other Restricted Jurisdiction);
"Receiving Agents" or "Registrar"	Equiniti Limited, the Company's registrar and receiving agent;
"Record Date"	6:00pm on 9 December 2020 being the latest time by which transfers of Existing Ordinary Shares must be received for registration by the Company in order to allow transferees to be recognised as Qualifying Shareholders;
"Regulatory Information Service"	has the meaning given to it in the AIM Rules;
"Resolutions"	the resolutions to be proposed at the General Meeting, the full text of which are set out in the Notice of General Meeting;
"Restricted Jurisdiction"	United States of America, Canada, Australia, Japan, New Zealand and the Republic of South Africa and any other jurisdiction where the extension or availability of the Fundraising would breach any applicable law;
"Securities Act"	US Securities Act of 1933 (as amended);
"Shareholders"	the holders of Existing Ordinary Shares, and the term "Shareholder" shall be construed accordingly;
"Shore Capital"	Shore Capital and Corporate Limited, a company incorporated in England and Wales under registered number 02083042 and having its registered office at Cassini House, 57 St James's Street, London SW1A 1LD, the Company's nominated adviser;
"stock account"	an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited;
"Subscription"	the conditional subscription by certain Directors and members of their families for the Subscription Shares at the Issue Price as described in section 7 of Part 1 of this document;
"Subscription Shares"	91,667 new Ordinary Shares, the subject of the Subscription;
"uncertificated" or "uncertificated form"	means recorded on the relevant register or other record of the share or other security concerned 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;
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland;
"USE"	Unmatched Stock Event instructions;
"VCT"	a company which is, or which is seeking to become, approved as a venture capital trust under the provisions of Part 6 of the ITA ; and
"£" or "Pounds"	UK pounds sterling, being the lawful currency of the United Kingdom.

GLOSSARY

The following glossary terms apply throughout this Document, unless the context requires otherwise or unless it is otherwise specifically provided:

"FDA"	The U.S. Food and Drug Administration;
"in vivo"	processes performed or taking place in a living organism;
"in vitro"	processes performed with microorganisms, cells, or biological molecules outside their normal biological context;
"TAVI"	Transcatheter aortic valve implantation.

 

END

 

 

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