Small Cap Feast

Small Cap Feast – 4th January 2022

Dish of the Day:

Mac Alpha Limited (MACA.L) joined the Main Market. (24/12/21)

Atome Energy PLC (ATOM.L) joined AIM. (30/12/21)

Off the Menu:

No leavers

What’s Cooking in the IPO Kitchen?

Graft Polymer a business focused on the development of polymer modification and drug delivery systems is to join the Main Market (Standard). Graft Polymer has developed a proprietary set of polymer modification technologies, which can improve existing products and processing methodologies by enhancing performance, simplifying manufacturing and reducing material consumption, in turn reducing costs. In late 2018, the Group began its first commercial sales to various polymer compounders in the automotive, packaging, construction, consumer products, clothing, aerospace, healthcare and medical markets. Due late Jan 2022.
Facilities by ADF, to join AIM, is a provider of premium serviced production facilities to the UK film and High-end Television industry. The Group hires out its facilities to productions throughout the UK and Europe, providing its services to some of the world’s largest traditional and on-demand content production companies. The Group’s business has grown to a business servicing productions with its fleet of over 500 trailers and vehicles and providing its services to the largest global production companies including Netflix, Sky, BBC, ITV, Disney, HBO and Apple amongst others and has an estimated 35% market share of providing facilities to the UK HETV market. Anticipated Mkt Cap £37.75m. Capital to be raised £15m. Due 5 Jan 22.
Hydrogen Utopia International PLC (HUI), to join Access Segment of the Aquis Stock Exchange, specialising in turning Non-Recyclable Mixed Waste Plastic into carbon-free fuels, new materials or distributed renewable heat. HUI’s activities will range across the full value chain, from the production of energy from Non-Recyclable Mixed Waste Plastic for local communities, to the sale of its products (Syngas, hydrogen, electricity and heat) to end customers. HUI’s initial strategic focus is to work closely with Powerhouse Energy Group PLC to create a project pipeline of HUI Facilities. Due 6 Jan 22. Mkt Cap TBC.
Carbon Air, a nano-technology company which leverages the adsorption properties of activated carbon and other advanced materials to improve suspension systems, enhance acoustics or reduce noise, to join AIM. The Company’s proprietary technology has allowed it to develop a unique portfolio of solutions for a variety of sizeable end markets, including vehicle suspension systems, acoustic insulation for domestic appliances and micro-speakers for smartphones. Mkt Cap and Capital to be raised TBC. Due Late Jan.
i(x) Net Zero, the investing company which focusses on Energy Transition and Sustainability in the Built Environment, announces its intention to join AIM and raise money to provide development and expansion capital to certain of its investee companies, for future investments in companies that fall primarily within its areas of interest in Energy Transition and Sustainability in the Built Environment and to provide working capital for the Group. Capital to be raised £20m. Expected admission date Late Jan.
Equinox International Holdings plc, UK-headquartered medical cannabis company aiming to become the UK’s leading ‘Land-to-Brand’ vertically integrated medical cannabis company, to seek admission of its entire share capital to trading on AIM. Seeking to raise funds to build a state-of-the-art cultivation, extraction and production facility on a Home Office-approved 20-acre UK site. Awaiting update, since the last update early November.
Lift Global, a financial media and technology-focused investment company led by well-known stock market commentator Zak Mir, to apply for admission of its Ordinary Shares to trading on the Access segment of Aquis Stock Exchange Growth Market. The Company plans to raise approximately £ 1.7m before expenses. The flotation is expected to value Lift at approximately £2.7m. Awaiting update with no update given since early December.
Superdielectrics to join AIM, a Company which is focused on developing technology to build supercapacitors with high energy density, low cost, and environmentally benign electrical energy storage devices that will help create a clean and sustainable global energy and transportation system. Admission is expected to take place in mid January 2022.
Soon to be renamed East Side Games Group (TSX: EAGR/OTCQB: EAGRF) (formerly LEAF Mobile Inc. TSX: LEAF / OTCQB: LEMLF), a leading Canadian free-to-play mobile game group, announced its intention to join the Main Market this winter. The Company, which started trading on the Toronto Stock Exchange on February 10th, 2021, will assume a dual-listed structure. The Company intends to raise gross proceeds of approximately CAD$10m and the flotation is expected to value LEAF Mobile at approximately £130m. LEAF is operating within a fast-growing sector with a rapidly increasing total addressable market. Mobile Games are the world’s most popular form of gaming. Awaiting update, since the last update early December which mooted a name change to East Side Games Group.
Spiritus Mundi due to join the Main Market (Standard), a special purpose acquisition vehicle which will seek acquisition targets in Europe and Asia in the clinical diagnostics sector. The Company has already raised approximately £1.2m in a pre-IPO fundraising round. Awaiting update, since the last update early November.
Recycling Tech Group to join AIM, a UK-based engineering, research and manufacturing company that has developed a modular and mass producible machine, the RT7000, which processes hard to recycle plastic waste into a synthetic oil that can be sold back to the petrochemicals industry as a chemical feedstock to make new plastics. Targeting a £40m raise. Due early Q1 2022.
Nu-Oil and Gas to acquire Guardian Maritime Ltd and Guardian Barriers IP Ltd and become Guardian Global Security plc and join the Main Market (Standard). Guardian is a technology group that supplies products to prevent unauthorised entry into areas that are deemed to have value, with maritime security being the main focus initially. Due 24th Jan 2022.

Breakfast Buffet

4d Pharma 54.15p £96.6m (DDDD.L)

The pharmaceutical company leading the development of Live Biotherapeutic products, a novel class of drug derived from the microbiome, today announces the appointment of John Doyle as Chief Financial Officer and member of the Company’s management team. Mr. Doyle brings over 15 years of experience leading and developing the financial operations, strategy, and investor relations functions at public healthcare companies. Mr. Doyle joins 4D pharma after serving as CFO at Chiasma Inc., a publicly traded biopharmaceutical company acquired by Amryt Pharma in 2021. Prior to Chiasma, John was Vice President of Finance and Investor Relations at Verastem Inc., a publicly traded biopharmaceutical company. Prior to joining Verastem in February 2018, he served as Head of Financial Planning & Analysis at SimpliVity Corp., a software company that was acquired by Hewlett Packard Enterprises in February 2017. Before that, Mr. Doyle was Director of Business Unit Financial Planning & Analysis, Early Phase Division, at PAREXEL, a publicly traded pharmaceutical contract research organisation. Earlier in his career, he served in increasingly senior financial planning and analysis roles at Hologic, Inc., a publicly traded provider of medical diagnostic, surgical and imaging products. Mr. Doyle holds a B.S. in finance from the University of Massachusetts.

Chamberlin 7.75p £5.3m (CMH.L)

The specialist castings and engineering group, announces the award of a significant new order for Russell Ductile Castings Limited, Chamberlin’s iron and steel casting foundry based in Scunthorpe. The new order is for components used in the construction of a major London based infrastructure project. The order value is £0.8m and will be completed during the calendar year 2022. Production of the components is expected to commence in February 2022 and the Board expects RDC’s Q4 performance to benefit from the increased revenues. This important order strengthens the Company’s order book for the current financial year and is a direct result of RDC’s strategy to focus on its class leading manufacturing competency for large, complex castings and aggressively pursuing growth opportunities within the infrastructure, environmental and renewable energy markets.

IQGeo Group 131p £74.2m (IQG.L)

The developer of geospatial productivity and collaboration software for the telecoms and utility industries, announces that a major US telecom network operator serving more than 6 million homes in 20 states has become the latest new-logo customer for its telecom software. The 5-year contract has a TCV of $4.5m for a subscription to use IQGeo’s software with strong potential for future expansion. Orders for associated services are expected in 2022. The integrated, end-to-end solution from IQGeo will support processes from planning through construction, providing a single geospatial platform. The solution, which encompasses IQGeo’s award winning mobile capabilities, will reduce IT costs and improve efficiency through the consolidation of previously siloed applications by optimising the planning, design, and construction processes that are critical to the customer’s aggressive fibre network growth plans.

Longboat Energy 63.5p £35.7m (LBE.L)

The emerging full-cycle North Sea E&P company with a portfolio of significant, near-term, low-risk exploration assets, announces the commencement of drilling operations on the Ginny and Hermine exploration well (Company 9%) in the Norwegian Sea. The well spud on 31st December. These are the first in a high impact, four-well 2022 drilling programme targeting 75 million barrels of oil equivalent net to Longboat. The Ginny and Hermine prospects are estimated to contain gross mean prospective resources of 41mmboe for Ginny and 27mmboe for Hermine with further potential upside to bring the total to 84mmboe and 45mmboe, respectively. The geological chance of success associated with the Ginny prospect is 27% and for Hermine 22% with the key risks being related to fault seal and fluid phase. The well is expected to take up to five weeks to drill with an estimated pre-carry net cost to Longboat of c.$2m (c.$0.45m post tax). Equinor Energy AS is the operator with a 31% working interest; the other licensees are OKEA ASA (40%) and Chrysaor Norge AS (20%).

Renalytix 635p £448.3m (RENX.L)

The American Diabetes Association (ADA) and Renalytix announced today a joint program to improve overall kidney health in patients with type 2 diabetes (T2D) in the United States, which is expected to grow from 34m individuals today to nearly 60m by 2060. The program intends to drive early detection and risk-informed care delivery to delay disease progression, reduce dialysis starts and improve overall health of chronic kidney disease (CKD) patients with diabetes nationally. ADA and Renalytix will convene experts to advise and develop a comprehensive interprofessional risk-informed Diabetes Kidney Care Pathway and Model for optimal clinical treatment and risk reduction. The ADA and Renalytix will work together to define a plan for a second phase of the program to scale and deploy the model through partnerships with multiple health systems nationally. That effort will leverage milestones, KPIs, metrics and ongoing evaluation of the Pathway’s effectiveness in changing outcomes for people with diabetes living with or at-risk for CKD.

SigmaRoc 89p £532.7m (SRC.L)

The AIM quoted quarried materials group announces the acquisition of Johnston Quarry Group Limited (JQG) and Guiting Quarry Limited for an initial cash consideration of £35.5m from Nicholas Johnston, Giantflow Limited and Flowgiant Limited. JQG is a specialist quarried materials supplier producing construction aggregates and premium quality building stone, as well as agricultural lime for soil improvement. For the 12 months to 30 September 2021, JQG reported revenue of £14.7m, generating EBITDA of £5.9m and £3.6m profit before tax. As at 30 September 2021, JQG had gross assets of £22.1m and net assets of £6.9m primarily in land, mineral reserves and plant and machines. The Acquisition consideration will be funded from the Group’s existing resources, including the assumption of up to £6m of JQG’s long term debt and up to £3.6m in plant hire contracts. As part of the Acquisition, SigmaRoc has also conditionally agreed to purchase from the Sellers two further quarries, together with additional mineral reserves, for a total potential consideration of £14.5m.

Somero Enterprises 555p £305.4m (SOM.L)

Somero have a number of Management changes and Board appointments. John Yuncza has been appointed President with immediate effect. Mr. Yuncza, who held the position of Chief Financial Officer, becomes President assuming those responsibilities from Jack Cooney who has served as President and Chief Executive Officer since 1997. Mr. Cooney will continue to serve as Chief Executive Officer and as an executive Director on the Company’s Board, assuring an effective and seamless transition of leadership to Mr. Yuncza. In addition, Vincenzo (Enzo) LiCausi has been appointed Chief Financial Officer and to the Board with immediate effect. Mr. LiCausi is assuming this role from Mr. Yuncza who is stepping down to assume the role of President. The Board also announces that Anne Ellis has been appointed to the Board as Non-Executive Director with immediate effect. Ms. Ellis brings with her more than three decades of experience as an engineer, senior business executive and as a Board member with a variety of organisations. With the additions of Ms. Ellis and Mr. LiCausi, the Somero Board of Directors has expanded to eight members from the previous six.

Tasty 5.25p £7.2m (TAST.L)

The owner and operator of restaurants in the casual dining sector, announces the following update on trading, which for the second half of the year up until December 2021 was encouraging. However, along with the rest of the hospitality sector, December, normally the Company’s strongest performing month, was disappointing, especially given the level of the preceding few months’ trading. The rising infection rates of the latest Omicron Covid-19 variant and in particular the reinstatement of working from home advice by the UK Government, significantly reduced the number of customers eating out and specifically deterred the larger Christmas bookings. As a consequence, trading for the peak December trading period was considerably weaker than anticipated. The Company confirms that its restaurants have so far remained open with only isolated Covid-19 related disruptions to date and is currently trading from 50 restaurants out of a total estate of 54. The 4 restaurants that have remained closed due to predicted poor trading conditions in their locality and labour shortages, should re-open later in the year however the Company will continue to consider the sale of 2 or 3 of those restaurants.

Verici Dx 57p £75.1m (VRCI.L)

A developer of advanced clinical diagnostics for organ transplant, announces it has been granted CPT® Proprietary Laboratory Analyses (PLA) codes for both its Clarava and Tuteva tests by the American Medical Association. The new codes have been approved and published by the AMA Editorial Panel and are scheduled to become effective on April 1, 2022. Reimbursement in the US is comprised of three components: code, price and coverage. CPT® codes offer health care professionals a uniform language for coding medical services and procedures, and the CPT® PLA code allows clinical laboratories to more specifically identify their tests when billing Medicare and commercial insurers. The successful granting of a CPT® code marks the first step on the path for commercial reimbursement.

Volex 343.25p £546.8m (VLX.L)

The global supplier of integrated manufacturing services and power products, today announces the completion of the Prodamex SA de CV and Terminal & Cable TC Inc. (TC) acquisitions following receipt of requisite regulatory approvals. Prodamex and TC have been acquired for a total cash consideration of CAD$22.5m (USD$17.8m) funded from the Company’s existing debt facilities. Prodamex operates from an advanced manufacturing facility serving customers in Mexico, USA and Canada. It brings to Volex additional higher volume manufacturing capability in Central Mexico, complementing the existing manufacturing plants in Tijuana and Juarez, providing customers with additional sourcing flexibility and production capacity. TC’s facility in Quebec, Canada provides Volex with ruggedised wire harness manufacturing capabilities focusing on the attractive “off-highway” market sector, supporting defence, industrial, agricultural and construction machinery customers.

Head Chef:

Emily Liu, CFA, CAIA
0203 764 2344
emily.liu@hybridan.com

Sous Chef:

Sacha Morris
0203 764 2345
sacha.morris@hybridan.com

*A corporate client of Hybridan LLP

Disclaimer

This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to any such action. This document has no regard for the specific investment objectives, financial situation or needs of any specific person or entity and is not a personal recommendation to any such person or entity. Recipients should reach an individual investment decision, based upon their respective financial objectives and financial resources and, if any doubt, should seek advice from an investment advisor.

The information contained in this document is based on materials and sources that are believed to be reliable; however, such information has not been independently verified and therefore it is not possible to confirm such information as being accurate. This document is not intended to be a complete statement or summary of any securities, markets, reports or developments referred to herein. No representation or warranty, either express or implied, is made or accepted by Hybridan LLP, its members, officers, employees, agents or associated undertakings in relation to the accuracy, completeness or reliability of the information contained in this document, nor should it be relied upon as such.

The content of this document includes market commentary and other information which we have prepared in relation to the company referred to in this document, which is our broking client. The provision of this document to you constitutes a minor non-monetary benefit which is capable of enhancing the quality of service provided by Hybridan LLP and which is of a scale and nature which could not be judged to impair the duty of Hybridan LLP to act in the best interest of its client falling within article 24(7)(b) of Regulation 600/2014/EU (MIFID II Regulation).

Any and all opinions expressed are current as of the date appearing on this face of this document only. Any and all opinions expressed are subject to change without notice and Hybridan LLP is under no obligation to update the information contained herein. To the fullest extent permitted by law, none of Hybridan LLP, its members, officers, employees, agents or associated undertakings shall have any liability whatsoever for any direct or indirect or consequential loss or damage (including lost profits) arising in any way from use of all or any part of the information in this document.

This document should not be relied upon as being an independent or impartial view of the subject matter and, for the avoidance of doubt, constitutes non-independent research (as such term is defined in the Financial Conduct Authority’s Conduct of Business Sourcebook to reflect the requirements of the MIFID II Regulation and Directive 2014/65/EU (known as MIFID II)). The individuals who prepared this document may be interested in shares in the company concerned and/or other companies within its sector, may be involved in providing other financial services to the company or companies referenced in this document or to other companies who might be said to be competitors of the company or companies referenced in this document. As a result both Hybridan LLP and the individual members, officers and/or employees who prepared this document may have responsibilities that conflict with the interests of the persons who receive this document. Hybridan LLP and/or connected persons may, from time to time, have positions in, make a market in and/or effect transactions in any investment or related investment mentioned herein and may provide financial services to the issuers of such investments.

In the United Kingdom, this document is directed at and is for distribution only to persons who (i) fall within article 19(5) (persons who have professional experience in matters relating to investments) or article 49(2) (a) to (d) (high net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529) (as amended) or (ii) persons who are each a professional client or eligible counterparty (as those terms are defined in the Financial Conduct Authority’s Conduct of Business Sourcebook) of Hybridan LLP (all such persons referred to in (i) and (ii) together being referred to as relevant persons). This document must not be acted on or relied up on by persons who are not relevant persons. For the purposes of clarity, this document is not intended for and should not be relied upon by any person who would be classified as a retail client under the Financial Conduct Authority’s Conduct of Business Sourcebook.

Neither this document, nor any copy of part thereof may be distributed in any other jurisdictions where its distribution may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Distribution of this report in any such other jurisdictions may constitute a violation of territorial and/or extra-territorial securities laws, whether in the United Kingdom, the United States or any other jurisdiction in any part of the world.

Where possible this document is made available to all relevant recipients at the same time. Dissemination of research by Hybridan LLP is monitored to ensure that it is only provided to relevant persons. Research prepared by Hybridan LLP is not intended to be received and/or used by any person who is a retail client.

Hybridan LLP and/or its associated undertakings may from time-to-time provide investment advice or other services to, or solicit such business from, any of the companies referred to in this document. Accordingly, information may be available to Hybridan LLP that is not reflected in this material and Hybridan LLP may have acted upon or used the information prior to or immediately following its publication. In addition, Hybridan LLP, the members, officers and/or employees thereof and/or any connected persons may have an interest in the securities, warrants, futures, options, derivatives or other financial instrument of any of the companies referred to in this document and may from time-to-time add or dispose of such interests.

This document may not be copied, redistributed, resent, forwarded, disclosed or duplicated in any form or by any means, whether in whole or in part other than with the prior written consent of Hybridan LLP.

MIFID II status of Hybridan LLP research
The cost of production of our corporate research is met by retainers from our corporate broking clients. In addition, from time to time we issue further communications as market commentary (such as our daily newsletter, Small Cap Breakfast), which we consider to constitute a minor non-monetary benefit which is capable of enhancing the quality of service provided by Hybridan LLP and which is of a scale and nature which could not be judged to impair the duty of Hybridan LLP to act in the best interest of its client falling within article 24(7)(b) of the MIFID II Regulation.

Hybridan LLP is a limited liability partnership registered in England and Wales, registered number OC325178, and is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange. Any reference to a partner in relation to Hybridan LLP is to a member of Hybridan LLP or an employee with equivalent standing and qualifications. A list of the members of Hybridan LLP is available for inspection at the registered office, 2 Jardine House, The Harrovian Business Village, Bessborough Road, Harrow, Middlesex HA1 3EX.

If you would like to unsubscribe, please email enquiries@hybridan.com with “unsubscribe me”.