polarean Regulatory News (POLX)

11 December 2018 

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 AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA OR THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

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 POLAREAN IMAGING PLC OR ANY OTHER ENTITY IN ANY JURISDICTION.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014 ("MAR"). In addition, market soundings (as defined in MAR) were taken in respect of the Fundraise with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this Announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

Polarean Imaging Plc 

("Polarean" or the "Company")

Conditional Fundraise to raise US$4 million

Polarean Imaging plc (AIM: POLX), the medical-imaging technology company, with a proprietary drug-device combination product for the magnetic resonance imaging (MRI) market, is pleased to announce that it has conditionally raised a total of US$4 million (£3.125 million) (before expenses) by means of a conditional Fundraise (the "Fundraise") via the issue of 22,321,429 ordinary shares of £0.00037 in the capital of the Company (the "Ordinary Shares") with new and existing investors (the "Fundraise Shares") at a price of 14 pence per Fundraise Share.

The Fundraise comprises a conditional placing (the "Placing") which was undertaken by the Company's broker Northland Capital Partners Limited and a conditional subscription (the "Subscription") for Fundraise Shares, details of which are set out below. The Fundraise will be subject to Polarean's shareholders approving resolutions to increase the Directors' authority to allot the Fundraise Shares, and to disapply statutory pre-emption rights, at a General Meeting.

A Circular which sets out details of the conditional Fundraise and also includes a Notice of General Meeting will be sent to shareholders later today (the "Circular"). The General Meeting is to be held at the offices of Reed Smith LLP at The Broadgate Tower, 20 Primrose Street, London, EC2A 2RS at 2.00 p.m. on 28 December 2018.

The Circular will also be available via the Company's website at: http://www.polarean-ir.com/content/investors/shareholder-information.asp

Highlights

· Fundraise to raise a total of US$4 million (£3.125 million) with new and existing investors at a price of 14 pence per Fundraise Share;

· Net proceeds will be used to provide additional support for the Company's ongoing Phase III Clinical Trials (the "Clinical Trials"), ensuring the timely completion of recruitment and read-out and to support the preparation and submission of the New Drug Application to the US Food and Drug Administration ("FDA"); and

· Significant strengthening of the Company's balance sheet.

Richard Hullihen, CEO of Polarean, commented: "We thank both new and existing investors for their support on this funding round. We plan to use the proceeds to complete our ongoing Phase III Clinical Trials and to then submit the dossier to the US regulators. The Fundraise will also provide Polarean with additional working capital to build new polarisers for impending orders. We look forward to providing our Shareholders with further updates regarding the progress of our Clinical Trials in due course."

Background to the Fundraise

Since listing on AIM in March 2018, the Company and its wholly-owned subsidiary, Polarean Inc. (together the "Group") have made considerable progress in moving forward with its Clinical Trials.

The Clinical Trials are head-to-head, non-inferiority trials which compare Polarean's technology with a 40 year old nuclear medicine technique using radioactive 133Xe and gamma cameras. The Clinical Trials, which are being conducted at two of the Group's closest collaborative sites, the University of Virginia and Duke University, commenced in August 2018 and will involve a total of 80 patients.

The Clinical Trials characterise ventilation in two sets of patients being evaluated for surgical procedures: (i) those who are being evaluated for lung lobar resection surgery; and (ii) those being evaluated for lung transplant. In each case, the patient's pre-operative expired vital capacity is measured through scintigraphy as well as by using the Group's technology to assess the remaining post-operative vital capacities. The focus of the Clinical Trials is entirely on the pre-operative assessment of the patient and it makes no difference whether the patient is chosen for surgery or not. The Clinical Trials allow for an equivalence margin in order to be non-inferior.

So far, the candidate patient flows for the Clinical Trials are as expected for transplant and resection patients, screening methods are functioning as designed, enrolment is happening in both clinical indication pathways and data collection has commenced. As set out in the plan for the Clinical Trials, data analysis will begin after a sufficient percentage of patients in both pathways have been accumulated.

The Group is undertaking the Fundraise at this time in order to strengthen its balance sheet and provide the Directors with additional comfort over the funding of the Clinical Trials, financing the supply of polarisers and other general working capital needs during the course of 2019.

Use of Proceeds

The net proceeds of the Fundraise will be used as follows:

· to provide additional support for the Clinical Trials, ensuring the timely completion of recruitment, scanning and readout;

· to support the preparation and submission of the NDA following readout;

· to provide additional working capital to build new polarisers for impending orders; and

· to support the initial preparation for market launch following the submission of the NDA.

Details of the Fundraise

The Company has conditionally raised US$4 million (£3.125 million), before expenses, by way of a conditional Placing to new and existing institutional investors of 17,686,435 Ordinary Shares (the "Placing Shares") and a conditional Subscription to existing investors of 4,634,994 Ordinary Shares (the "Subscription Shares"), each at the Fundraise Price.

The Fundraise Price represents a discount of 15.2 per cent. to the Company's closing price on 10 December 2018. Assuming the issue of all of the Fundraise Shares, the Fundraise Shares will represent approximately 28.5 per cent. of the Existing Ordinary Shares and will, when issued, represent approximately 22.1 per cent. of the entire issued ordinary share capital of the Company immediately following Admission (the "Enlarged Share Capital").

The Fundraise Shares will, following Admission, rank in full for all dividends and distributions declared, made or paid in respect of the issued Ordinary Share capital of the Company and otherwise rank pari passu in all other respects with the Existing Ordinary Shares.

Application will be made for both the Placing Shares and the Subscription to be admitted to trading on AIM ("Admission") as soon as practicable following the General Meeting. Admission is currently expected to occur at 8.00a.m. on or around 31 December 2018.

Directors' Participations in the Fundraise

Certain Directors of the Company have subscribed for a total of 915,179 Fundraise Shares. Following Admission, the percentage holding of these Directors in the total issued share capital of Polarean will increase as per the table below:

Significant Shareholders' Participations in the Fundraise

Certain significant shareholders have also subscribed for a total of 3,947,047 Fundraise Shares. Following Admission, the percentage holding of these shareholders in the total issued share capital of Polarean will increase as per the table below:

In addition, Amati Global Investors ("Amati") have subscribed for 8,571,429 Fundraise Shares. Following Admission, Amati will hold 8,571,429 Ordinary Shares in the share capital of the Company, representing 8.5 per cent. of the Company's Enlarged Share Capital.

Related Party Transaction

Richard Morgan, Richard Hullihen, Kenneth West, Bastiaan Driehuys, Amphion Innovations plc and Nukem Isotopes GmbH are, respectively, Directors of and substantial shareholders in the Company (the "Related Parties") and their participation in the Fundraise constitutes a related party transaction in accordance with AIM Rule 13. Jonathan Allis who is not subscribing for Fundraise Shares and is therefore considered to be an independent Director for these purposes, having consulted with the Company's nominated adviser, considers the terms of the Related Parties' participation in the Fundraise to be fair and reasonable insofar as the Shareholders are concerned.

Total Voting Rights

Following Admission, the Company will have a total of 100,730,893 Ordinary Shares in issue with each Ordinary Share carrying the right of one vote. The above figure may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

Unless otherwise indicated, all defined terms in this announcement shall have the same meaning as described in the Circular.

**ENDS**

Enquiries:

About Polarean (www.polarean.com)

The Company and its wholly owned subsidiary, Polarean, Inc. (together the "Group") are revenue generating, medical drug-device combination companies operating in the high resolution medical imaging market.

The Group develops equipment that enables existing MRI systems to achieve an improved level of pulmonary function imaging and specialises in the use of hyperpolarised Xenon gas (129Xe) as an imaging agent to visualise ventilation and gas exchange regionally in the smallest airways of the lungs, the tissue barrier between the lung and the bloodstream and in the pulmonary vasculature. Xenon gas exhibits solubility and signal properties that enable it to be imaged within other tissues and organs.

The Group operates in an area of significant unmet medical need and the Group's technology provides a novel diagnostic approach, offering a non-invasive and radiation-free functional imaging platform which is more accurate and less harmful to the patient than current methods. The annual burden of pulmonary disease in the United States of America is estimated to be over US$150 billion.

The Group also develops and manufactures high performance MRI radiofrequency (RF) coils which are a required component for imaging 129Xe in the MRI system. The development of these coils by the Group facilitates the adoption of the xenon technology by providing application-specific RF coils which optimise the imaging of 129Xe in MRI equipment for use as a medical diagnostic as well as a method of monitoring the efficacy of therapeutic intervention.