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Integumen PLC (DVRG)

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Wednesday 29 July, 2020

Integumen PLC

Integumen secures £3 million funding facility

RNS Number : 3927U
Integumen PLC
29 July 2020
 

AIM share code: SKIN

29 July 2020

 

Integumen PLC

 

("Integumen" or "Company")

 

Integumen secures £3 million funding facility for global expansion

 

Delivers working capital to achieve 2020/2021 objectives relating to COVID-19 and expansion of Labskin

 

Integumen announces that it has secured a £3 million 3 year loan facility ("Facility") with Riverfort Global Opportunities PCC Limited ("Riverfort") and YA II PN, Ltd ("YA II") (together "the Lenders") that requires no loan repayments until calendar year 2021. Initial drawdown of £1.5m provides the Company with working capital to allow it to achieve the Board's 2020/2021 objectives relating to COVID-19 AI product development and Labskin expansion of support services into the US and Asia.

 

Gerard Brandon, CEO Integumen plc, commented:

"Integumen has built multiple revenue streams, guided £4m in revenue for 2020 and continues to expand product and service development programmes.  This comprehensive loan facility has been designed to align with the Company's guided revenue projection and provide sufficient working capital to maintain and build on that growth well into 2021.  Our objectives for the next year see further opportunities to support the fight against COVID-19 and expansion of our Labskin services business into new regions and these funds will support that progress. "

 

Progress to date:

 

As notified in recent months :

 

March

· Integumen signed three year $3.75m (£3.12m) bacteria production agreement with Modern Water plc

· Investment of £250,000 and additional staff to expand Labskin Laboratories to meet increased demand

May

· Integumen doubled production of Modern Water reagent production to meet demand

· RAWTest AI real-time COVID-19 virus alert system developments to be retrofitted into new Modern Water's Microtox units

June

· Labskin partners with University of Aberdeen to test COVID-19 anti-viral skin and dental products

· Partnership with Aptamer Group for novel SARS-CoV-2 sensors

July

· Partnership with Avacta plc for novel SARS-CoV-2 sensors

· Labskin launches remote clinical trials

 

Investment Agreement ("Agreement") arranged by Riverfort

 

The Company has executed a 3 year funding agreement with the Lenders for £3,000,000 to fund the Company's working capital to achieve its 2021 objectives relating to COVID-19 AI product development and Labskin expansion of support services into the US and Asia.

 

Integumen has elected for immediate drawdown of 50% (£1,500,000) of the funds available under the Agreement.

 

Key terms are as follows: 

 

Term:

The Commitment Period under the Agreement is 3 years from 28 July 2020. Each drawdown ("Drawdown") under the Agreement must have been repaid in full by the second anniversary of Drawdown ("Repayment Date") or, if earlier the third anniversary of the date of the Agreement. No repayments may be made within the six months following each Drawdown ("Repayment Holiday").

 

Interest:

Interest applies on the amounts drawn down at a rate of 1.05% per month.

 

Fees:

An implementation fee of 2.5% of each Drawdown is immediately deductible from the principal amount on transfer of funds. In relation to the initial Drawdown, diligence and legal costs of £15,000 will apply.

 

Conversion:

The Lenders may elect, at their discretion, post the Repayment Holiday, to convert up to 63.3% of each Drawdown into ordinary shares of 0.01p ("Ordinary Shares") in the Company at an exercise price ("Fixed Premium Placing Price") representing a 50% premium to the average daily volume weighted average price ("VWAP") for the previous 5 days' trading prior to the drawdown of the relevant amount ("Reference Price").

 

In relation to the Initial Drawdown, up to £950,000 may be converted into Ordinary Shares, at an exercise price of 2.9754p per share. The VWAP for the previous five trading days ending 28 July 2020 is 1.9836p making the Fixed Premium Placing Price 2.9754p.

 

The Lenders may not convert any Drawdown within the first 6 months following the date of the relevant Drawdown.

 

The Maturity Date is the earlier of the date falling twenty-four months from the relevant Drawdown date and the end of the 3 year Commitment Period.

 

If prior to the Maturity Date the Company issues and allots new Ordinary Shares ("New Share Issuance") at a price per share below the Reference Price then the Fixed Premium Placing Price shall be amended to 110% of the price per share in respect of the relevant New Share Issuance.

 

Further Warrants will be issuable in the event of additional Drawdowns.

 

On an event of default the Lenders can convert the outstanding loan plus interest and the repayment fee into the Company's ordinary shares at a price equal to the lower of (a) 80 per cent of the average of the three lowest VWAP  in respect of ordinary shares during the 10 business days immediately preceding the date of the Conversion notice and (b) Fixed Premium Placing Price.

 

Warrants:

The Lenders will receive warrants ("Warrants") of 25% of the value of the initial amount (£1,500,000) drawn down, equal to £375,000. The number of Warrants to be issued is calculated by dividing the amount of each Drawdown by the Warrant Reference Price.

 

The Warrant Reference Price is the lower of (i) the Reference Price and (ii) the closing mid-market price of the Ordinary Shares on the day preceding the date of grant of the Warrants.

 

The Warrant exercise price is at a 30% premium to the Warrant Reference Price.

 

If prior to the Maturity Date there is a New Share Issuance at a price per share below the Warrant Reference Price then the Warrant Reference Price shall be amended to the price per share of the relevant New Share Issuance and the Warrant exercise price will then be 130% of that new Warrant Reference Price.

 

The Warrants have a subscription period of four years from the date on which the Warrant exercise becomes unconditional.

 

General Meeting:

The Company will convene a general meeting ("GM") within 90 days of the date of the Agreement, at which a resolution will be put to shareholders to grant the requisite authority to issue the Warrants in respect of the initial Drawdown and to allot such number of Ordinary Shares as are required to satisfy the Lenders conversion rights in respect of the initial Drawdown ("Condition Subsequent"). It is anticipated that the Warrants would be granted shortly after this GM.

 

If the Company fails to hold a GM to obtain the requisite authority and subsequently to grant the Warrants within 90 days or fails to allot any of the Warrants to the Lenders within 5 trading days of the relevant Warrant grant date, the Company will pay to the Lenders, £375,000 in consideration for the Lenders waiving their rights to the Warrants.

 

Security:

Secured by a cross-company guarantee.

 

Repayment:

No principal may be repaid within six months of any Drawdown.

 

After the Repayment Holiday each advance of funds by the Lenders has to be repaid (by equal monthly instalments) by the second anniversary of the date of Drawdown or, if earlier the third anniversary of the date of the Agreement.

 

A repayment fee of 8% of the amount outstanding is payable, at the date the principal is repaid. This fee is reduced to 5% if the amount outstanding is converted to Ordinary Shares.

 

Other terms:

The Agreement includes certain undertakings, warranties and indemnities from the Company in favour of the Lenders. Normal events of default provisions apply, including the GM Condition Subsequent and in the event that the Ordinary Shares cease to be admitted to trading on AIM or are suspended from trading for a period of ten continuous trading days.

 

Market Abuse Regulation (MAR) Disclosure

 

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

 

Integumen plc

Gerard Brandon, CEO

 

+44 (0) 7340 055 648

SPARK Advisory Partners Limited

(Nominated Adviser)

 

Neil Baldwin/Andrew Emmott

+44 (0) 20 3368 3550

Turner Pope Investments (TPI) Limited (Broker)

Andy Thacker/Zoe Alexander

+44 (0) 20 3657 0050

 

 

Notes:

 

Riverfort Global Opportunities PCC Limited, is a company incorporated in Gibraltar (company number 114213) whose registered office is at Suite 741C, Europort, Gibraltar GX11 1AA.

 

YA II PN, Ltd, an exempted company incorporated in the Cayman Islands with limited liability and whose registered office is at PO Box 309, Ugland House, Grand Cayman KY1 1101.

 

About Integumen plc

Integumen is a scientific research and AI-as-a-service company focused on production and analysis of bacteria, virus and toxins utilising artificial intelligent data analytics in regulatory technology, from scientifically proving the impact of skincare product claims on skin microbiome for top 10 global cosmetic company clients to remotely detecting water contamination in real-time.

 


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