TWD.L Regulatory News (TWD)

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, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY. FURTHER DETAILS OF THE FUNDRAISING ARE SET OUT BELOW.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY NEW ORDINARY SHARES OF TRACKWISE DESIGNS PLC.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE MARKET ABUSE REGULATION NO. 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Terms not otherwise defined herein shall have the meanings given in the section entitled "Definitions" at the end of this Announcement.

TRACKWISE DESIGNS PLC

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

Placing, Subscription and

Open Offer

and

Notice of General Meeting

The Board of Trackwise Designs plc, a provider of specialist products using printed circuit technology, is pleased to announce that it has conditionally raised gross proceeds of £6.0 million by way of the issue of an aggregate of up to 7,500,000 New Ordinary Shares pursuant to a Placing of up to 7,487,500 New Ordinary Shares and a Subscription of 12,500 New Ordinary Shares at an Issue Price of 80 pence per New Ordinary Share.

In addition, the Company proposes to raise up to a further approximately £1 million by the issue of up to 1,250,336 New Ordinary Shares pursuant to an Open Offer to Qualifying Shareholders, also at the Issue Price (the Placing, Subscription and Open Offer, together the "Fundraising").

The Fundraising, save for the First Tranche Shares, as defined below, requires Shareholder Resolutions to be passed by the Company's Shareholders.

Highlights:

Philip Johnston, CEO of Trackwise, commented:

"We appreciate and recognise the continuing support shown by existing investors and welcome new shareholders to Trackwise. 2021 has been a challenging economic environment for businesses who are delivering innovation; nevertheless 2021 will be a record year for IHT sales by a considerable margin. Having received the 2022 production forecast from our EV OEM customer, together with the purchase order for Q1 2022, and with our Stonehouse facility progressing well, we look forward to commencing production. This fundraise will enable the delivery of a step change in our IHT commercial proposition."

Circular and General Meeting

A Circular to Shareholders in respect of the Placing, Subscription and the Open Offer is expected to be posted to shareholders later today giving notice of a General Meeting of the Company. The meeting will be held on 5 January 2022 at 10:00 a.m. at the offices of the Trackwise at 1 Ashvale, Alexandra Way, Tewkesbury GL20 8N. A copy of the Circular will later today be available on the Company's website www.trackwise.co.uk. The Directors consider the Resolutions to be set out in the Circular and Notice to be in the best interests of the Company and the Shareholders as a whole. The Directors who hold Ordinary Shares intend to vote in favour of the Resolutions in respect of their shareholdings, representing in aggregate approximately 24.1 per cent. of the Company's current issued share capital as at the date of this announcement.

Open Offer

The Open Offer is specifically structured to provide an opportunity for participation in the Fundraising by the Company's existing Shareholder base. Qualifying Shareholders are reminded that Shareholders taking part in the Placing and Subscription will not be entitled to take part in the Open Offer and that therefore the up to 1,250,336 Open Offer Shares, raising up to approximately £1 million, are only available to a smaller pool of Existing Ordinary Shareholders. If there are no applications under the Excess Application Facility, not all of the £1 million would be raised. The Excess Application Facility is part of the Open Offer and not available to those taking part in the Placing and Subscription.

Admission and Total Voting Rights

Application has been made by the Company for 1,421,285 new Ordinary Shares ("First Tranche Shares") to be admitted to trading on AIM ("First Tranche Admission"). It is expected that First Tranche Admission will occur and dealings in the First Tranche Shares will commence at 8:00 a.m. on 20 December 2021.

Following First Tranche Admission, the total number of Ordinary Shares in issue will be 30,179,014. There are no Ordinary Shares held in treasury. Accordingly, the total number of voting rights in the Company on First Tranche Admission will be 30,179,014. This figure may be used by Shareholders as the denominator for the calculations to determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

Further information on the Fundraising, including the Open Offer, is set out below. This announcement should be read in its entirety.

Enquiries:

Notes to editors

Trackwise is a UK-based manufacturer of specialist products using printed circuit technology.

The full suite includes: Improved Harness Technology™ ("IHT") and Advanced PCBs - Microwave and Radio Frequency ("RF"), Short Flex, Flex Rigid and Rigid Multilayer products.

 IHT uses a proprietary, patented process that Trackwise has developed to manufacture multilayer flexible printed circuits of unlimited length. While the technology has many applications, the directors expect that one of its primary uses will be to replace traditional wire harness in a variety of industries.

The Company manufactures on two sites, located in Tewkesbury and Stevenage (following the acquisition of Stevenage Circuits Ltd in April 2020). It serves customers in Europe and North America. The Company has acquired a third site in Stonehouse Gloucestershire initially for its EV programme.

Trackwise Designs plc was admitted to trading on AIM in 2018 with the ticker TWD. For additional information please visit www.trackwise.co.uk

The following text has been taken from the Circular to be sent to Shareholders.

LETTER FROM THE CHAIRMAN

The purpose of this letter is to outline the reasons for the Fundraising, details of the Open Offer and explain why the Board considers the Resolutions to be in the best interests of the Company and Shareholders as a whole, and why the Directors unanimously recommend that you vote in favour of the Resolutions, as they intend to in respect of the Ordinary Shares held by them, which represent in aggregate approximately 24.1 per cent. of the Existing Ordinary Shares.

· An additional £1.0 million contingency working capital buffer.

The Company sets out herein, an Open Offer for Qualifying Shareholders to subscribe for Ordinary Shares at the Issue Price to enable non-institutional shareholders to participate as they may wish.

Applications will be made for the First Tranche Shares and the Second Tranche Shares to be admitted to trading on AIM. It is expected that Admission of the First Tranche Shares will occur on or around 8.00 a.m. on 20 December 2021. Conditional upon, inter alia, the passing of the Resolutions, it is anticipated that Admission of the Second Tranche Shares will occur on or around 8.00 a.m. on 6 January 2022.

Following Admission, the Company's Enlarged Share Capital will comprise 37,508,065 Ordinary Shares, each with voting rights in the Company. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in the interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

On 15 September 2021, the Company announced its interim results for the six months ended 30 June 2021 and the Company has a 31 December financial year end. For the ten months to 31 October 2021, the Company, has achieved:

· Total revenue of approximately £6.64 million (unaudited) (year to 31 December 2020: £6.07 million)

· IHT revenue of £1.08 million (unaudited) (year to 31 December 2020: £0.60 million)

· Gross profit of £1.08 million (unaudited) (year to 31 December 2020: £1.72 million)

· Adjusted* EBITDA of £0.86 million (unaudited earnings before interest, tax, depreciation and amortization) (year to 31 December 2020: £0.77 million)

· Adjusted* operating loss before tax of £0.46 million (unaudited) (year to 31 December 2020: £0.19 million)

· Adjusted* loss before tax of £0.70 million (unaudited) (year to 31 December 2020: £0.38 million)

· Reported loss after tax of £1.34 million (unaudited) (year to 31 December 2020: profit of £1.23 million)

*Before exceptional costs and share based payments (10 months ending 31 October 2021: £870k)

The Company has a total order book of £3.28 million (unaudited) (of which £1.27 million is for delivery in the year ended 31 December 2021. Of this, the IHT order book is £0.51 million (of which £0.12 million is for 2021 delivery) and the APCB order book is £2.74 million (of which £1.09 million is for 2021 delivery). Total Group revenue for the year ended 31 December 2021 is expected to be approximately £8.0 million.

The Company has an IHT sales pipeline with 81 customers and opportunities in total (excluding any early stage opportunities) including, but not limited to:

IHT opportunities: UK EV OEM customer - opportunities beyond the current contract described above; EV and Aerospace: potential with other battery management customers, including a pre-development phase opportunity with an automotive large EU OEM potential customer; Medical: Cathprint, and several other manufacturers and Motor Windings.

APCB opportunities: Within the existing customer base and the Company has also been qualified by a global consumer electronics OEM.

Net debt (cash and cash equivalents less plant and machinery asset financing debt and mortgage; excludes IFRS16 lease debt) at 31 October 2021 was approximately £2.44 million (unaudited). The Company has an invoice discounting facility with HSBC of up to £0.75 million available (undrawn as at 31 October 2021) which is increasing to £2.25 million (c. 60 per cent. of which is expected to be utilizable continually) which has been credit approved. In addition to this, the Company has a £1.0 million asset financing facility, of which

£0.3 million was drawn as at 31 October 2021), and also an undrawn new £2.49 million asset financing facility, expecting lender approval before 31 December 2021. The Company received an R&D tax credit of £270,000 in November 2021 with a total of £610,000 received in the year to date.

As also announced on 15 September 2021, Mark Hodgkins, Chief Financial Officer, has indicated his intention to step down from the Board at the next annual general meeting in 2022. The Board recruitment

process for Mark's successor is well progressed with the intention that a new joiner will be with the Company well in time for a suitable hand over period.

The Directors' aggregate participation in the Fundraising, as set out above, constitutes a related party transaction pursuant to Rule 13 of the AIM Rules. The Company's independent director (being Ian Griffiths) considers, having consulted with the Company's nominated adviser, finnCap, that the terms upon which the Directors are participating in the Fundraising are fair and reasonable insofar as the Company's shareholders are concerned.

The Directors do not currently have sufficient authority to allot in full the New Ordinary Shares. Accordingly, the Board is seeking the approval of Shareholders to allot the Second Tranche Shares at the General Meeting, together with approval to disapply pre-emption rights.

Shareholders should be aware that if any of the Resolutions are not passed, the issue of the Second Tranche Shares and the Open Offer will not proceed.

A notice convening the General Meeting, which is to be held at 10.00 a.m. on 5 January 2022 at the offices of the Company at 1 Ashvale, Alexandra Way, Tewkesbury, Gloucestershire GL20 8NB, is set out at the end of this document.

A Form of Proxy for use by the Shareholders in connection with the General Meeting is also enclosed. At the General Meeting, the following Resolutions will be proposed:

Resolution 1 is an ordinary resolution and requires a simple majority of those voting to vote in favour of that Resolution 1. Resolution 2 is a special resolution and will require not less than 75 per cent. of those voting in person or on a poll by proxy to vote in favour of this Resolution 2.

The authorities to be granted pursuant to Resolution 1 and Resolution 2 shall expire on the date which is 15 months from the date of the Resolutions or if earlier the conclusion of the next annual general meeting of the Company (unless renewed, varied or revoked by the Company prior to or on that date).

10. Open Offer

In order to provide Shareholders with an opportunity to participate, the Company is inviting all Qualifying Shareholders to subscribe at the Issue Price for an aggregate of 1,250,336 Open Offer Shares at the Issue Price. This allows those Shareholders to participate on a pre-emptive basis whilst providing additional capital for the Company. Any Placees who are existing Shareholders of the Company will not be entitled to take part in the Open Offer.

The Open Offer is specifically structured to provide an opportunity for participation in the Fundraising by the Company's existing Shareholder base. Qualifying Shareholders are reminded that Shareholders taking part in the Placing and Subscription will not be entitled to take part in the Open Offer and that therefore the up to 1,250,336 Open Offer Shares, raising up to approximately £1 million, are only available to a smaller pool of Existing Ordinary Shareholders. If there are no applications under the Excess Application Facility, not all of the £1 million would be raised. The Excess Application Facility is part of the Open Offer and not available to those taking part in the Placing and Subscription.

The Directors of the Company who hold Ordinary Shares, representing in aggregate approximately 24.1 per cent. of the Company's current issued share capital as at the date of this announcement, will not be participating in the Open Offer.

Qualifying Shareholders are being given the opportunity to apply for additional Open Offer Shares in excess of their pro rata entitlements. The Open Offer Shares have not been placed subject to clawback and have not been underwritten.

The latest time for application under the Open Offer to be received is 11.00 a.m. on 4 January 2022. The procedure for application and payment depends on whether, at the time at which application and payment is made, you have an Application Form in respect of your Open Offer Entitlements or have Open Offer Entitlements credited to your stock account in CREST in respect of such entitlement. Further details of the Open Offer are set out in Part II of this document.

11. Actions to be taken

Please check that you have received the following with this document:

• A reply-paid Form of Proxy for use in respect of the General Meeting;

You are strongly encouraged to complete, sign and return your Form of Proxy in accordance with the instructions printed thereon as soon as possible, but in any event so as to be received, by post or, during normal business hours only, by hand, by no later than 10.00 a.m. on 31 December 2021 (or, in the case of an adjournment of the General Meeting, not later than 48 hours before the time fixed for the holding of the adjourned meeting).

If you hold your shares in the Company in uncertificated form (that is, in CREST) you may vote using the CREST Proxy Voting service in accordance with the procedures set out in the CREST Manual (please also refer to the accompanying notes to the Notice of the General Meeting set out at the end of this document). Proxies submitted via CREST must be received by the Company's Registrar (Equiniti) by no later than 10.00 a.m. on 31 December 2021 (or, in the case of an adjournment, not later than 48 hours before the time fixed for the holding of the adjourned meeting).

Appointing a proxy in accordance with the instructions set out above will enable your vote to be counted at the General Meeting. The action to be taken by Qualifying Shareholders in connection with the Open Offer is set out in Part II of this document.

If you are in any doubt as to what action you should take, you should immediately seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant or other independent professional adviser duly authorised under the FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

12. Recommendation

Shareholders should be aware that if the Resolutions are not approved at the General Meeting, admission of the Second Tranche Shares will not occur and only part of the net proceeds will be received by the Company. If this were to happen, the Group would have to find urgent alternative funding. The Directors believe that the Resolutions to be proposed at the General Meeting are in the best interests of the Company and Shareholders as a whole and unanimously recommend that Shareholders vote in favour of the Resolutions.

The Directors intend to vote in favour of the Resolutions in respect of, in aggregate, 6,919,049 Existing Ordinary Shares, representing approximately 24 per cent. of the Existing Ordinary Shares.

Yours faithfully

Ian Griffiths

Chairman

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

ISSUE STATISTICS

Notes:

1. Assuming full issuance of the Placing Shares, Subscription Shares and Open Offer Shares

*Assuming the Open Offer is taken up in full

DEFINITIONS

The following definitions apply throughout this document (including the Notice of General Meeting) and the Form of Proxy unless the context requires otherwise:

In addition, pursuant to the split First and Second Tranche Admissions, the participating Directors will complete their First Tranche Admission participation. Their remaining investment will follow at the time of Second Tranche Admission.