CIR.L Regulatory News (CIR)

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE EU MARKET ABUSE REGULATION (596/2014). UPON THE PUBLICATION OF THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

2 June 2020

Circassia Group plc

Equity Financing Facility

Circassia Group plc ("Circassia" or "the Company") today announces that it has entered into an equity finance facility ("the Facility") with two of its major institutional shareholders, being North Atlantic Small Companies Investment Trust plc ("NASCIT") (to which Harwood Capital LLP acts as investment adviser/manager) and Richard Griffiths, to provide the Company with access to additional liquidity should it be required in the coming months.

Further details of the Facility

Under the terms of the Facility, NASCIT and Richard Griffiths have committed to subscribe for up to a total of £5m of new ordinary shares in Circassia if a request is made by Circassia up until 30 November 2020 at which time the Facility will terminate unless the parties agree to extend it further. The price at which new ordinary shares may be subscribed for by NASCIT and Richard Griffiths is the lower of 24.6p and the price at which Circassia may issue any other new ordinary shares (other than pursuant to the exercise of share options under any of the Company's share option schemes) for cash during the period to 30 November 2020 ("the Facility Period").

NASCIT and Richard Griffiths have agreed to subscribe for new ordinary shares in the ratio of 70:30 meaning that NASCIT could be required to subscribe for up to £3.5m new ordinary shares and Richard Griffiths up to £1.5m new ordinary shares. A commitment fee of £250,000 ("the Commitment Fee") is payable to NASCIT and Richard Griffiths upon entering into the Facility on the same 70:30 ratio, the Commitment Fee will be satisfied through the issue of 711,382 new ordinary shares to NASCIT and 304,878 new ordinary shares to Richard Griffiths.

The Company has the discretion during the Facility Period to make one or several requests in relation to the £5m provided that, inter alia, any request (i) is in relation to a minimum of £1m; and (ii) would not result in the Company being in breach of the provisions of the Market Abuse Regulation No. 596/2014.

Following its last annual general meeting, and taking into account the 1,016,260 new ordinary shares to be issued pursuant to the Commitment Fee, the Company currently has shareholder authority to issue 17,727,490 new Ordinary Shares under the Facility at an issue price of 24.6p, which equates to only £4.4m of the £5m available under the Facility. The Company will therefore seek authority from its shareholders at its next annual general meeting in July to dis-apply pre-emption rights for such number of new ordinary shares in order to allow it to have the option to drawdown the full £5m of the Facility.

Pursuant to the Facility, the Company, NASCIT and Richard Griffiths have provided customary warranties in relation to their ability to enter into and perform the Facility. A warranty has also been given by each of NASCIT and Richard Griffiths that their participation in the Facility will not result in them, or anyone they are acting in concert with, having more than 29.99% of the Company's entire issued share capital. Each party to the Facility shall have a right to terminate the Facility should there be any breach of these warranties during the Facility Period. The Company has also undertaken not to cancel, purchase or redeem any ordinary shares during the Facility Period.

Related Party Transaction

In view of the size of the Equity Facility and the Commitment Fee (together "the Transaction") and the fact that both NASCIT (and other funds to which Harwood Capital LLP also acts as investment adviser/manager) and Richard Griffiths are "substantial shareholders" in Circassia for the purposes of the AIM Rules for Companies, the Transaction is considered to constitute a related party transaction under Rule 13 of the AIM Rules for Companies. The Directors consider, having consulted with Peel Hunt, the Company's nominated adviser, that the terms of the Transaction are fair and reasonable insofar as Shareholders are concerned.

Application for Admission

Application will be made to the London Stock Exchange for the 1,016,260 new ordinary shares to be issued in connection with the Commitment Fee to be admitted to trading on AIM. It is expected that Admission will occur at 08.00 am on 5 June 2020.

Following Admission, the Company will have 376,709,079 Ordinary Shares of 0.08p in issue each with equal voting rights. No shares are held in treasury.

The above figure may be used by shareholders as the denominator for the calculations by which they will determine whether they are required to notify their interest, or a change to their interest, in the Company under the FCA's Disclosure Guidance and Transparency Rules.

Ian Johnson, Executive Chairman of Circassia, said:

"Since the Company's last trading update on 9 April, the agreement for the return of Tudorza and Duaklir assets to AstraZeneca has completed removing all debt from our balance sheet. The Covid-19 pandemic has continued to impact the Niox® business, both in terms of lower revenues and higher cash burn, however, in recent weeks sales figures do suggest a gradual improvement as lockdown restrictions are lifted in different geographical markets in which we operate. The timing and extent of this recovery remains, predictably, uncertain at the current time and accordingly, the Board believes that it is prudent to ensure the Company has access to additional liquidity should it be required in the coming months.

I am grateful for the support of two of our largest shareholders during this period as we continue to restructure the Company and invest in the Niox® business to aid recovery and deliver long-term growth."

The Company will release its results for the year ended 31 December 2019 on 16 June 2020.

-Ends-

For further information, please contact: