Small Cap Feast

Small Cap Feast – 26 March 2020

Dish of the Day:

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Off the Menu:

Ashley House has left Aquis Exchange. Firestone Diamonds has left AIM.


What’s Cooking in the IPO Kitchen?

Main Market (Premium)

DRI Healthcare—investment company focused on investments in healthcare Royalty Assets  looking to raise $350m.  Timetable now extended.


Breakfast Buffet

Falcon Oil & Gas 6.9p £68m (FOG.L)

Operational update on the Beetaloo project in the Northern Territory (NT), Australia in light of COVID-19. Following the successful completion of drilling operations, including cementing and casing of the horizontal well section of the Kyalla 117 N2-1H ST2 well. The JV has completed the installation of water monitoring bores and preparatory work has continued towards the next phase of operations, which will include the fracture stimulation of the Kyalla Well. Given the unprecedented circumstances brought about by COVID-19 in recent weeks, the JV has made changes to its operations to protect the health and well-being of Origin Energy Limited employees, contractors and communities across the NT. Adhering to the latest guidelines and advice from the Northern Territory and Federal Government on health and safety and social distancing are of the utmost importance to the JV and all present on site are observing health authority requirements.

Following the implementation of the necessary control procedures, the JV has now elected to temporarily pause activities at the Kyalla Well site, reducing those on site to essential personnel only, whilst ensuring the required regulatory and environmental management conditions to monitor and maintain the site can be met. The JV plans to resume activities in the latter half of 2020.  The JV will use Northern Territory based employees and contractors to undertake civil and other works in preparation for the resumption of activities.


Xeros Tech (XSG.L) 0.82p £6.43m

The developer and provider of water saving and filtration technologies with multiple commercial and domestic applications announced that Donald Brenninkmeijer has been appointed as a consultant to the Company.

Donald is the former Chief Innovation Officer and Chief Brand, Customer and Sustainability Officer at the international fashion brand C&A. He will work with the Group to bring his expertise in support of the commercialisation of the Company’s sustainable apparel products.

In his new role advising Xeros, Donald will apply his passion and extensive knowledge in fashion and sustainability to help the Group embed its products in the supply chains of major apparel brands and manufacturers. At C&A in Europe, Donald was instrumental in the development and launch of the international retail industry’s first ever Cradle to Cradle1 Certified Gold garment in collaboration with Fashion for Good, paving the way for a more sustainable future in fashion.


Crossword Cybersecurity 345p £16.2m (CCS.L)*

Crossword has today issued guidance for businesses on how to address some of the most common security concerns for employees when working from home.  The advice is being made widely available as many of Crossword’s clients mobilise to keep their businesses running as normally as possible whilst adhering to UK Government and Public Health advice designed to control the spread of the COVID-19 virus.

As IT professionals all know, working from home comes with a range of security risks, but employees need to be educated too – human behaviour is invariably the weakest link in a company’s cybersecurity posture.  In the current environment, with many more employees working at home, cybercriminals are actively looking for opportunities to launch phishing attacks and compromise the IT infrastructure of businesses, large and small.

Guidance on working from home. All companies should start by reviewing the home working guidance available at the UK Government’s National Cyber Security Centre (NCSC).  This resource helps companies prepare their employees and think about the best way to protect their systems.  Crossword has been advising a number of its FTSE clients in a range of sectors, and below is a summary of the guidance given, in addition to that from the NCSC.


Vianet 62.5p £18.1m (VNET.L)

Update on progress and trading in respect to the situation regarding COVID-19.  The Group also notifies that, subject to FCA and or auditor guidance relating to COVID-19, it will release its results for the year ended 31 March 2020 on Tuesday, 2 June 2020.

Trading for the second half of the year has been largely as anticipated and, as a result, subject to any further COVID-19 provisions, the Group’s full year profits for the year ended 31 March 2020 will be in line with market expectations at over £4.00m and ahead of the £3.85m reported last year.

“The mandatory closures of pubs, bars and restaurants in the UK will have a material effect on almost all our Smart Zones customers.  In anticipation of this, we had therefore proposed a reduced rate on all our contracts in order to maintain business continuity and to avoid more expensive reconnection costs for customers when pubs reopen. “

Smart Machines: “Some vending machines, including those in hospitals, supply chains and emergency services are trading very well, whereas those in closed city centre offices have experienced little or no sales.  As with Smart Zones customers, we are providing impacted Smart Machines customers with the option of a reduced weekly charge in closed sites. Positively, we are seeing increased demand and usage of our contactless payment solution rather than ‘dirty’ coins.


Intelligent Ultrasound  9.75p  £21.45m (MED.L)

The ultrasound artificial intelligence (AI) software and simulation company, announces its unaudited preliminary results for the year ended 31 December 2019, showing another excellent year of progress for the Group during which its Clinical AI Division signed its first AI software agreement with a major ultrasound manufacturer and its Simulation Division continued to grow sales.

  • Revenue from simulation sales grew 11% to £5.9m (2018: £5.3m) · Gross profit up 22% to £3.5m (2018: £2.8m) – R&D expenditure increased to £2.7m (2018: £1.9m) · Strengthened the balance sheet in August 2019 with a placing and open offer which raised £5.8m after expenses · Year-end cash plus investments (short term deposits), at £7.3m (2018: cash of £5.6m) and no debt. · Current cash of £6.2m

Post year end: · Received ISO13485:2016 medical device accreditation

  • Launched COVID-19 simulation training system


Sareum 0.295p £9.1m (SAR.L)*

Sareum Signs Global Licensing Deal for its FLT3+Aurora Kinase Inhibitor Programme with a China-based Specialty Pharma Company . Sareum will receive an initial upfront payment of approximately £50,000.  A further payment of approximately £0.9 million will be payable to Sareum if certain milestones related to the oral bioavailability of the Compounds are achieved within nine months from the date of the Agreement .  Sareum will also be entitled to receive a future milestone payment in the event that an Investigational New Drug or equivalent application is made in China or any other country.

Sareum will assign certain patents in respect of the Compounds to the Licensee upon receipt of the Development Payment.  The Agreement may be terminated with immediate effect if Sareum does not receive the Development Payment within nine months of the date of the Agreement.

Arena Events 11.25p £17.2m (ARE.L)

The global temporary event solutions provider has conditionally raised £9.5m  at 10p,  a 71 per cent. premium to the VWAP of an Ordinary Share for the five business days preceding the date of this announcement of 5.8 pence.

  • The Company’s lender, HSBC, has approved the additional drawdown from the existing loan facilities of £4.75 million.
  • The Directors believe, on the basis of the facts currently available to them, that the net proceeds from the Capital Raising, in conjunction with the additional credit facilities made available to the Company, should provide sufficient working capital for the Company for the foreseeable future.

Subject to AGM on 14 April.

  • The Group has been actively involved in the provision of disaster relief solutions, in all regions, with a view to assisting the relevant authorities in controlling the impact of the COVID-19 pandemic.


Block Energy 3p £11.8m (BLOE.L)

The exploration and production company focused on Georgia, is pleased to announce that it has entered into a sale and purchase agreement with Schlumberger B.V. to acquire its subsidiary Schlumberger Rustaveli Company Limited. Of the three production sharing contracts  currently held by SRCL in Georgia, the Company will acquire producing Block XIB and exploration Block IX. It is agreed that Schlumberger will apply to relinquish Block X.

The Acquisition significantly increases Block’s access to production, reserves and resources. It represents a major milestone towards the Company’s objective of becoming the leading independent oil and gas producer in Georgia. Completion of the Acquisition is conditional upon regulatory approvals in Georgia and the United Kingdom.

No cash consideration. Instead, options over Block’s share capital for the Acquisition conserves the Company’s cash reserves.


Webis Holdings 1.15p £4.5m (WEB.L)

Webis, the Group specialising in pool wagering and the operators of Cal Expo, the Californian harness track, as part of the on-going strategy to protect and develop its USA licenses in relation to expected impending sports betting legislation, has agreed a Term Loan on behalf of its wholly owned subsidiary, Watch & Wager Inc for the sum of US$500,000. The primarily purpose of the loan is to support the W&W physical and on-line licenses in the State of California.


London Security 1950p £239m (LSC.L)

The Company announces that it has closed most of its offices and that many of its engineers have stopped working whilst the Coronavirus outbreak continues. This is in response to initiatives of various Governments and a response to the wishes of certain clients not to attend their premises.

Notwithstanding numerous initiatives to reduce costs, this is expected to impact the Company’s performance during the outbreak.

Head Chef:

Derren Nathan
0203 764 2344

*A corporate client of Hybridan LLP


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