Mercia Asset Regulatory News (MERC)

Mercia Asset Management PLC

("Mercia", the "Group" or the "Company")

Mercia announces two new direct investments - Axis Spine and Nova Pangaea

Mercia Asset Management PLC (AIM: MERC), the proactive, regionally focused specialist asset manager with c.£959million of assets under management, is pleased to announce new direct investments into Axis Spine Technologies Ltd ("Axis Spine") and Nova Pangaea Technologies Ltd ("Nova Pangaea").

Axis Spine

The investment into Axis Spine comes as part of a £10.8million funding round. Mercia has made a direct investment of £3.0million, alongside £3.8million from Mercia's managed funds. MedTex Ventures, a US-based venture capital firm focused on the medical device industry, has invested £3.0million with the remaining £1.0million coming from other external investors. Mercia's managed funds first invested in Axis Spine in 2017.

Following this investment, Mercia holds a 11.7% fully diluted direct equity stake in Axis Spine, with funds managed by Mercia holding a further 33.6% fully diluted equity stake.

Axis Spine is a Med Tech business delivering spinal implants. Axis has a highly differentiated platform of modular implants, designed to address the increasingly recognised and unmet clinical need of cage subsidence. This technology promises to not only reduce post operative spinal segment collapse, but also improve spinal alignment in patients suffering chronic back pain and spinal deformity.

Insertion of Axis' proprietary modular cages requires much less force than conventional implants, they are slimmer and have a wider footprint, thereby reducing the risk of damage to vertebral segment endplates and thus the loss of alignment that impacts one in three patients.

Nova Pangaea

The investment into Nova Pangaea is part of a £5.3million funding round. Mercia has made an initial direct investment of £2.3million via a convertible loan, alongside £1.0million from Mercia's Northern Powerhouse Investment Fund ("NPIF") and a further £2.0million from co-investors.

Nova Pangaea is a Clean Tech business focused on creating biofuels and biochar to address some of the most pressing climate concerns of today. Led by CEO Sarah Ellerby, Nova Pangaea provides a patented process called REFNOVA® that converts woody and agricultural residues into high-value sustainable products that are used to manufacture Sustainable Aviation Fuel ("SAF") and a range of biochemicals. The process also produces Biochar, which is crucial for carbon dioxide removal and soil enhancement.

Mark Payton, Chief Executive Officer of Mercia, commented: "These are two businesses we have been excited about for some time, actively supporting them within our managed funds. We are pleased to welcome them onto our balance sheet, where we have significant liquidity to support both in reaching their next stage of maturity. Both embody what we look for in UK regional businesses, combining innovative technology with deep sector specialism to create real-world solutions."

"Axis Spine's patented technology has significant benefits over incumbents and, with FDA clearance now received, the team is well placed to move towards commercialisation in the US. We look forward to supporting the team as they scale a unique product.

"Nova Pangaea is part of the solution within multibillion dollar markets as industries and governments alike look to transition to cleaner energy. This funding round will enable the business to invest in its growth, including the delivery of its first commercial production facility in 2023. We are excited to be supporting the scaling of Nova Pangaea as it accelerates its commercialisation, signs new partnerships and ramps up its production capabilities."

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About Mercia Asset Management PLC

Mercia is a proactive, specialist asset manager focused on supporting regional SMEs to achieve their growth aspirations. Mercia provides capital across its four asset classes of venture, private equity, debt and proprietary capital: the Group's 'Complete Connected Capital'. The Group initially nurtures businesses via its third-party funds under management, then over time Mercia can provide further funding to the most promising companies, by deploying direct investment follow-on capital from its own balance sheet.

The Group has a strong UK footprint through its regional offices, university partnerships and extensive personal networks, providing it with access to high-quality deal flow.

Mercia Asset Management PLC is quoted on AIM with the EPIC "MERC".