RMS.L Regulatory News (RMS)

Strat Aero plc / Index: AIM / TIDM: AERO / Sector: Support Services

14 February 2017

Strat Aero plc ("Strat Aero", the "Company" or the "Group")

Issue of Equity

Strat Aero plc, an international aerospace company focused on the rapidly emerging Unmanned Aerial Vehicle ("UAV") sector, is pleased to announce that it has successfully raised £850,000 of new capital (before expenses) from new and existing shareholders by way of a placing ("the Placing") of 850,000,000 new ordinary shares of 0.1p each ("Ordinary Shares") ("Placing Shares") at a price of 0.1p per ordinary share ("Placing Price").

In addition, certain directors and a director of a subsidiary company have agreed to subscribe for 250,000,000 Ordinary Shares ("Director Placing Shares") at the Placing Price in settlement of outstanding compensation and expenses accrued since 2015 ("Director Placing").  At the same time 1,170,000,000 warrants with a two-year expiry and an exercise price of 0.225p have also been granted in conjunction with the Placing and the Director Placing. The Placing, Director Placing and issue of warrants is subject to the passing of the resolutions to be put to the General Meeting on 21 February 2017 (the "General Meeting") which was announced on 6 February 2017.

The funds raised will be invested in certain growth initiatives within Strat Aero's two core divisions, Survey & Inspection Services and Commercial UAS Training & Education, as well as strengthening the Company's working capital position until targeted breakeven at the operating level has been reached.

Iain McLure, CEO of Strat Aero plc, said "The funds raised today provide an endorsement, by both new and existing shareholders, of management's strategy to become cash flow positive by the end of the year. Achieving this will be a key milestone towards delivering on our medium-term objective to build Strat Aero into a leading provider of UAV based solutions in areas where we have the expertise, track record and technology: Survey & Inspection Services and Commercial UAS Training & Education. Once we have a low cost, cash generative platform in place, further expansion can be funded by the reinvestment of internally generated cash flows, as we focus on scaling up the business to take advantage of the huge opportunity we have identified in the fast-growing UAV sector."

Directors' participation in the Placing

As noted above, certain directors and a director of a subsidiary company have agreed to subscribe for the following new ordinary shares in the Director Placing at the Placing Price with attached warrants exercisable @ 0.225p in settlement of outstanding compensation and expenses accrued by the participating directors since 2015. The shares issued pursuant to the Placing will be subject to a three-month lock in agreement post the issue date.

Related party transaction

The participation of the directors of the Company and a director of its subsidiary in the Director Placing constitutes a related party transaction for the purposes of AIM Rule 13. The director independent of the transaction, being Graham Peck, having consulted with the Company's nominated adviser, SP Angel Corporate Finance LLP, considers that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

Further issue of equity

Strat Aero is making an application for a further 50,000,000 Ordinary Shares to be admitted to trading on AIM ("Consideration Shares"). These Ordinary Shares are being issued to certain professional advisors and service providers of Strat Aero in satisfaction of fees outstanding. Subject to the passing of the resolutions at the General Meeting, it is expected that admission will occur at 7.00 a.m. on 22 February 2017. These shares will rank pari passu in all respects with the Company's existing Ordinary Shares and are subject to a three-month lock in agreement post the issue date.

Admission

Subject to the passing of the proposed resolutions at the General Meeting, application will be made for the Placing Shares, Director Placing Shares and Consideration Shares, all of which will rank pari passu with the existing Ordinary Shares in the Company, to be admitted to trading on AIM ('Admission'). It is expected that  Admission will become effective and dealings will commence at 7:00 a.m. on or around 22 February 2017.

Share Capital and Total Voting Rights

The current total number of voting rights of 764,285,262 remains unchanged at present. No shares were held in treasury at the date of this announcement.

Following the issue of the Placing Shares, Director Placing Shares and Consideration Shares after the General Meeting, the issued share capital of the Company is expected to consist of 1,914,285,262 Ordinary Shares.

Warrants

Of the 1,170,000,000 warrants mentioned above, a total of 85,000,000 warrants have been granted to Beaufort Securities Limited and Cornhill Capital Ltd in conjunction with the Placing. These warrants will be issued following the passing of the resolutions at the General Meeting .

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.

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For further information please visit www.strat-aero.com or contact:

Notes

Strat Aero plc is a multi-divisional international aerospace services company, focussed primarily on the provision of complete client solutions in the Unmanned Aerial System ('UAS' market), which is predicted to show exponential growth over the coming decade. Commercial and military applications in UASs are expected to be a dynamic growth sector in the aerospace industry over the next 10 years with the UAS market forecast to grow to more than US$82.1 billion between 2015 and 2025 (AUVSI Economic Report 2013) and the global airborne Intelligence, Surveillance and Reconnaissance ('ISR') market estimated to grow to US$19.23 billion by 2023.