Futura Medical Regulatory News (FUM)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, AUSTRALIA, THE REPUBLIC OF IRELAND, NEW ZEALAND OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN FUTURA MEDICAL PLC OR ANY OTHER ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION, SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH ANY INVESTMENT DECISION IN RESPECT OF FUTURA MEDICAL PLC.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014.

UNLESS OTHERWISE INDICATED, CAPITALISED TERMS IN THIS ANNOUNCEMENT HAVE THE MEANING GIVEN TO THEM IN THE DEFINITIONS SECTION INCLUDED IN THE APPENDIX TO THE ANNOUNCEMENT MADE BY THE COMPANY ON 18 OCTOBER 2018.

Futura Medical plc

("Futura" or the "Company")

Further Details on the Fundraising and Participation of Directors and

Substantial Shareholders in the Fundraising

Futura, a pharmaceutical company developing a portfolio of innovative products based on its proprietary, transdermal Dermasys® drug delivery technology and focused on sexual health and pain confirms that, further to the announcement made yesterday, it has conditionally raised c. £5.6 million in aggregate before fees and expenses through a successful Placing, Subscription and PrimaryBid Offer with certain existing and new institutional and other investors at the Placing Price of 7 pence per share. The Placing Price of 7 pence represents a 27.5 per cent. discount to the Closing Price of 9.65 pence on 18 October 2018, being the last practicable trading day prior to the release of this announcement.

The Company announces that, as part of the PrimaryBid Offer, existing institutional investor Lombard Odier has subscribed for PrimaryBid Shares (the "Related Party Transaction") as detailed further below.

Directors participation in the Fundraising and related party transaction

Certain of the Directors have agreed to subscribe for Subscription Shares. The number of Subscription Shares subscribed for by each of these Directors pursuant to the Subscription, and their resulting shareholdings on Admission (assuming take-up in full of the Offer for Subscription by Eligible Shareholders), are set out below:

*  Assuming take-up in full of the Offer for Subscription by Eligible Shareholders 

Each of the above Director's participation is conditional upon certain matters and events including, amongst other things, the passing of the Resolutions, the Placing Agreement having become unconditional and Admission of the Placing Shares becoming effective on or before 8.00 a.m. on 13 November 2018 (but in any event by no later than 8.00 a.m. on 30 November 2018).

Where a company enters into a related party transaction, under the AIM Rules the independent directors of the company are required, after consulting with the company's nominated adviser, to state whether, in their opinion, the transaction is fair and reasonable in so far as its shareholders are concerned.

James Barder, Angela Hildreth and Ken James (the "Participating Directors") by virtue of being directors of the Company are considered to be "related parties" as defined under the AIM Rules. The Participating Directors participation in the Subscription constitutes a related party transaction for the purposes of rule 13 of the AIM Rules.

John Clarke and Jonathan Freeman, the independent directors for the purposes of the Subscription consider, having consulted with the Company's nominated adviser, N+1 Singer, that the terms of the Participating Directors participation in the Subscription is fair and reasonable insofar as the Shareholders are concerned.

Substantial Shareholder participation in the Fundraising and related party transaction

The following existing substantial Shareholders will be participating in the Placing:

*  Assuming take-up in full of the Offer for Subscription by Eligible Shareholders 

** Based on the last published TR1 announcement by Lombard Odier on 24 September 2018

Where a company enters into a related party transaction, under the AIM Rules the independent directors of the company are required, after consulting with the company's nominated adviser, to state whether, in their opinion, the transaction is fair and reasonable in so far as its shareholders are concerned.

Lombard Odier Asset Management (Europe) Limited ("Lombard Odier") by virtue of being a substantial shareholder is considered to be "related party" as defined under the AIM Rules. Lombard Odier's participation in the PrimaryBid Offer constitutes a related party transaction for the purposes of rule 13 of the AIM Rules.

The Directors consider, having consulted with the Company's nominated adviser, N+1 Singer, that the terms of Lombard Odier's participation in the PrimaryBid Offer is fair and reasonable insofar as the Shareholders are concerned.

Open Offer

The Board recognises and is grateful for the continued support received from Shareholders and the importance of shareholder pre-emption rights and therefore wishes to provide an opportunity for all existing Eligible Shareholders to participate in a further issue of new Ordinary Shares by way of the Open Offer. The Open Offer is being made so as to enable all Eligible Shareholders to subscribe for new Ordinary Shares at the Issue Price on a pro rata basis to their current holdings.

Eligible Shareholders may subscribe for Open Offer Shares on the basis of 10 Open Offer Shares for every 85 Existing Ordinary Shares held at 6.00 p.m. on 18 October 2018 (the "Record Date"). The proposed price of 7 pence per Open Offer Share (the "Issue Price") is the same as the Placing Price for the Placing, Subscription and PrimaryBid Offer.

The Open Offer will be for up to 14,236,000 new Ordinary Shares in aggregate.

Assuming a full take-up by Eligible Shareholders under the Open Offer, the issue of the Open Offer Shares will raise further gross proceeds of up to approximately £1.0 million for the Company.

Further information on the Open Offer will be set out in a circular to be sent to Shareholders (the "Circular").

Completion of the Fundraising is conditional upon, amongst other things, approval by existing Shareholders at a General Meeting of the Company, expected to be held at the offices of Futura Medical plc at Surrey Technology Centre, 40 Occam Road, Guildford, Surrey GU2 7YG  at 1.00 p.m. on 12 November 2018. The Circular, containing background information to the Fundraising, together with a notice of the General Meeting, will be posted to Shareholders shortly.

James Barder, Chief Executive Officer of Futura, said:

Today's Fundraising provides us with a new foundation to deliver additional value by progressing the development of MED2002, a breakthrough topical erectile dysfunction ("ED") gel through Phase 3 studies.

We are grateful for the long-term support from our shareholders and new investors which have participated in the Placing, and we are pleased to be able to offer participation in this Fundraising to all other shareholders through the Open Offer."

For further information please contact:

Capitalised terms used in this announcement shall, unless defined in this announcement or unless the context provides otherwise, bear the same meaning ascribed to such terms in the announcement made by the Company on 18 October 2018 to announce the launch of the Fundraising.

Important Notice

N+1 Singer is acting as nominated adviser and broker and as agent for and on behalf of the Company for the Placing. N+1 Singer is authorised and regulated by the Financial Conduct Authority (the "FCA") in the United Kingdom. N+1 Singer is not acting for the Company in relation to the PrimaryBid Offer. N+1 Singer is acting exclusively for the Company and no one else in connection with the Placing and N+1 Singer will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing 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 N+1 Singer or by any of its affiliates or agents 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 therefore is expressly disclaimed.

No statement in this announcement is intended to be a profit forecast or estimate, 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.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

The Placing Shares and the Open Offer Shares will not be admitted to trading on any stock exchange other than on the AIM market of the London Stock Exchange.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.

This Announcement may contain and the Company may make verbal statements containing "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company, including amongst other things, United Kingdom domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, the effect of competition, inflation, deflation, the timing effect and other uncertainties of future acquisitions or combinations within relevant industries, the effect of tax and other legislation and other regulations in the jurisdictions in which the Company and its respective affiliates operate, the effect of volatility in the equity, capital and credit markets on the Company's profitability and ability to access capital and credit, a decline in the Company's credit ratings; the effect of operational risks; and the loss of key personnel. As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. Except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Terms of the Placing, the Subscription and the PrimaryBid Offer

The Company has conditionally raised approximately £5.6 million before expenses pursuant to the Placing, Subscription and PrimaryBid Offer. The Issue Price represents a discount of approximately 27.5 per cent. to the Closing Price on 18 October 2018, being the latest practicable date prior to the announcement of the Placing, the Subscription and the PrimaryBid Offer.

The PrimaryBid Offer, was partially underwritten for £0.5 million by PrimaryBid, and took place between 5.04 p.m. on 18 October 2018 and 9.00 p.m. on 18 October 2018 and was made in accordance with an available exemption against the requirement to produce an FCA approved prospectus.

Subject to the satisfaction of the conditions under the Placing, Subscription and PrimaryBid Offer including, inter alia, the passing of the Resolutions, the Company will issue 80,000,000 new Ordinary Shares in aggregate at the Issue Price, thereby raising approximately £5.6 million, before expenses, and £5.2 million, after the expenses of the Placing and PrimaryBid Offer. The Placing Shares have been conditionally placed by N+1 Singer, as agent for the Company, with institutional and other investors. The Company has conditional commitments with certain other investors including the Directors named above for the issue of the Subscription Shares. The Placing Shares, Subscription Shares and PrimaryBid Shares issued pursuant to the Fundraising will represent approximately 37.2 per cent. of the Enlarged Share Capital on Admission.

No element of the Fundraising has been underwritten by N+1 Singer. The Company has agreed to pay certain fees and commissions to N+1 Singer in connection with the Fundraising and to PrimaryBid in connection with the PrimaryBid Offer.

The Placing, the Subscription and the PrimaryBid Offer are conditional, inter alia, upon:

· the Resolutions being passed (without amendment) at the General Meeting or any adjournment thereof;

·  each of the warranties contained in the Placing Agreement being and remaining accurate and not misleading until Admission;

·  the Company having complied in all material respects with its obligations and having satisfied the conditions under the Placing Agreement which are to be performed or satisfied prior to Admission;

· the Placing Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated by N+1 Singer in accordance with its terms;

· Admission of the Placing Shares, the Subscription Shares and the PrimaryBid Shares taking place by no later than 8.00 a.m. on or around 13 November 2018 (or such later date as the Company may agree with N+1 Singer).

If any of the conditions are not satisfied, the Placing Shares, the Subscription Shares and the PrimaryBid Shares will not be issued and any monies received from the placees and subscribers will be returned to them (at the placees' and subscribers' risk and without interest) as soon as possible thereafter. In relation to the PrimaryBid Offer only in the event of any conflict between the incorporated contractual conditions which apply to the Placing and the further conditions of PrimaryBid, the contractual conditions which apply to the Placing will prevail.

The Placing Agreement contains customary warranties given by the Company to N+1 Singer as to matters relating to the Company and its business and as to matters relevant to the Company and an indemnity to N+1 Singer in respect of liabilities arising out of or in connection with the Placing. The Placing Agreement also contains customary rights of termination which could enable N+1 Singer to terminate the Placing in certain limited circumstances. 

Application will be made to the London Stock Exchange for the Placing Shares, the Subscription Shares and the PrimaryBid Shares to be admitted to trading on AIM. Subject to passing of the Resolutions, it is expected that Admission will become effective and that dealings in the Placing Shares, the Subscription Shares and the PrimaryBid Shares will commence on or around 13 November 2018. The Placing Shares, the Subscription Shares and the PrimaryBid Shares will, when issued, be credited as fully paid and will rank equally in all respects with the Existing Ordinary Shares already in issue, including the right to receive all dividends and other distributions declared, made or paid in respect of such shares after the date of issue of the Placing Shares, the Subscription Shares and the PrimaryBid Shares.

The Open Offer

Introduction

The Board recognises and is grateful for the continued support received from Shareholders and the importance of shareholder pre-emption rights and therefore wishes to provide an opportunity for all existing Eligible Shareholders to participate in a further issue of new Ordinary Shares also at the Issue Price by way of the Open Offer.

The Open Offer is being made so as to enable all Eligible Shareholders to subscribe for new Ordinary Shares at the Issue Price on a pro rata basis to their current holdings.

The Open Offer has been structured so that it is not available to Non-Eligible Shareholders, being Shareholders resident or located in any Restricted Jurisdiction. The Open Offer is conditional on the Placing, Subscription and PrimaryBid Offer being approved.

Details of the Open Offer

The Directors have considered the best way to structure the Open Offer, having regard to, inter alia, the importance of pre-emption rights to all Shareholders, the extent to which there are Overseas Shareholders, the regulatory requirements applicable to companies listed on AIM, cost implications and market risks. After considering these factors, the Directors have concluded that the most suitable structure for the Open Offer, for both the Company and its Shareholders as a whole, is that the Open Offer be made only to Eligible Shareholders who are not resident or located in any Restricted Jurisdiction.

The Open Offer provides an opportunity for all Eligible Shareholders to acquire Open Offer Shares pro rata to their current holdings of Existing Ordinary Shares as at the Record Date. The Issue Price for the Open Offer is the same as the Issue Price in the Placing. Eligible Shareholders shall not be able to apply for subscriptions in excess of their respective Basic Entitlements.

Principal Terms of the Open Offer

The Open Offer is conditional on:

· the passing of the Resolutions to be proposed at the General Meeting; and

· Admission of the Open Offer Shares having occurred not later than 8.00 a.m. on 13 November 2018 (or such later time and/or date as N+1 Singer and the Company may agree, being not later than 8.00 a.m. on 30 November 2018).

Accordingly, if any of such conditions are not satisfied, the Open Offer will not proceed. It is a condition of the Open Offer that the Placing also proceeds. Further terms and conditions of the Open Offer are set out in the Circular to be sent to Shareholders. Subject to the fulfilment of the conditions referred to above and set out below and also set out in the Circular, Eligible Shareholders are being given the opportunity to subscribe for the Open Offer Shares at the Issue Price per Open Offer Share, pro rata to their holdings of Existing Ordinary Shares on the Record Date on the basis of:

10 Open Offer Shares for every 85 Existing Ordinary Shares

Eligible Shareholders are not being given the opportunity to apply for subscription of any New Ordinary Shares in excess of their Basic Entitlement. Assuming full take-up under the Open Offer the issue of the Open Offer Shares will raise gross proceeds of approximately £1.0 million for the Company. The Open Offer is not underwritten. The Fundraising is not conditional upon the level of applications made to subscribe under the Open Offer. Accordingly, if no applications to subscribe under the Open Offer are received, the total amount that the Company would raise via the Fundraising would be £5.6 million (before expenses).

The Open Offer Shares will, upon issue, rank pari passu with the Existing Ordinary Shares. 

Fractions of Open Offer Shares will not be allotted. The terms of the Open Offer provide that each Eligible Shareholder's entitlement under the Open Offer will be rounded down to the nearest whole number. Eligible Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating the Basic Entitlements.

It should be noted that the Open Offer is not a rights issue. Accordingly, the Application Form is not a document of title and cannot be traded.

Further information on the Open Offer and the terms and conditions on which it is made will be set out in the Circular to be sent to Shareholders.

Admission and dealings

Application will be made to the London Stock Exchange for the Placing Shares, the Subscription Shares, the PrimaryBid Shares and the Open Offer Shares to be admitted to trading on AIM. It is expected that, subject to the passing of the Resolutions at the General Meeting, Admission will occur and dealings will commence in such shares on 13 November 2018 at 8.00 a.m. (or such later date as N+1 Singer and the Company may agree, being not later than 8.00 a.m. on 30 November 2018).

General Meeting

The Circular and a form of proxy in relation to the General Meeting to be convened in connection with the Fundraising will be posted to shareholders shortly. The Circular contains notice of the General Meeting which is to be held at the offices of Futura Medical plc, at Surrey Technology Centre, 40 Occam Road, Guildford, Surrey GU2 7YG at 1.00 p.m. on 12 November 2018.

Expected Timetable of Principal Events