Small Cap Feast

10th February 2022

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What’s Cooking In The IPO Kitchen?

Following Nvidia’s decision to walk away from its planned US$40bn takeover of Cambridge-based chip designer Arm from Japan’s Softbank, after regulatory hurdles proved insurmountable, speculation is growing over a potential return to the London Markets.

GCP Co-Living REIT plc, intends to float on the Main Market. The Company is a newly established, externally managed investment company, which it is intended will carry on business as a Real Estate Investment Trust, subject to meeting the necessary qualifying conditions. The Company will invest, predominantly, in independent Co-Living Asset, both operational and under development, let to a diversified mix of residents, located in urban centres in the UK and Ireland where there is a shortage of high quality, affordable residential accommodation. Due March.

Strip Tinning Holdings, an established supplier of specialist connectors to the automotive sector, intends to join AIM. Strip Tinning manufactures specialist flexible electrical connectors related primarily to heating and antennae systems embedded within automotive glazing and to the connection of the cells within electric vehicle (EV) battery packs, increasingly using flexible and lightweight printed circuit technology that also has growing application elsewhere within vehicles. Mkt Cap £28m.Due 16th Feb.

Spinnaker Acquisitions plc, intends to join the Main Market (Standard). The Company have conditionally agreed to acquire the entire issued share capital of HomeServe Labs Ltd, a wholly owned subsidiary of FTSE250 quoted public company HomeServe Plc, by way of a reverse takeover conditional, inter alia on relisting and successful completion of fundraising activities to be undertaken by way of a placing and direct subscriptions by new and existing investor. If the Proposed Transaction proceeds to completion, it is proposed to change the name of the Company to Ondo InsurTech Plc and the name of Labs, which will become a subsidiary of the Company, to LeakBot Ltd. Should the Proposed Transaction not proceed, then the Company would need to apply for the suspension of its listing of ordinary shares to be lifted and for trading to be restored. £5m capital to be raised. Due early 2022.

Clean Power Hydrogen, the UK-based green hydrogen technology and manufacturing company that has developed the IP-protected Membrane-Free Electrolyser is seeking to join AIM. The Group designs and manufactures hydrogen production units and is focused on the commercial production of green hydrogen in a simple, safe, and sustainable manner. The Group intends to raise approximately £50m. Due Early Feb.

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 Feb.

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. Delayed until second half of Q1 2022.

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 early Feb.

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. Delayed until Mid-Feb. Mkt Cap and Capital to be raised TBC.


Breakfast Buffet

Active Energy 0.17p £7.8m (AEG.L)

The London quoted international biomass based renewable energy business, has received a “notice of intent to sue” letter from the Southern Environmental Law Center (the “SELC”) alleging that the Company is discharging wastewater without the required permits from its Lumberton property in North Carolina. This notice follows on from the original claim made by SELC, which was announced by the Company on 4 May 2021, to which the Company has actively sought resolution. The SELC is a non-profit, environmental lobbying group. Active Energy is not currently operating at Lumberton. The Company has not discharged any wastewater other than what is required under its permits and required by the historic statutory remediation obligations associated with the property. The Company denies the allegations made by the SELC in the notice and will continue to take robust legal action in response and in defence. Active Energy continues to review all its options at Lumberton, North Carolina.

Artemis Resources 4.125p £57.3m (ARV.L)

Artemis announced that exploration drilling has commenced at the Chapman Discovery, part of the Greater Carlow Project and that re-start of drilling at Paterson Central is expected in early March should favourable climatic conditions continue. Currently only half of the Crosscut trend (~225m) has been tested with an additional ~225m of strike length to the South yet to be drilled. Paterson Central 2022 Phase 1 will continue to drill around the highly encouraging geology encountered in GDRCDD007 in late 2021 (assays pending) as well as complete GDRCDD008 which was lost due to technical issues well short of the target. In total a further ~4,000m of drilling is expected to be completed at Apollo and Atlas as part of the Phase 1 programme which began in late 2021. Given the robust funding position of the Company, Phase 2 is now being planned to commence immediately thereafter. Phase 2 is being scoped to continue to drill at Apollo and Atlas but also move systematically to Juno, Voyager, Enterprise and likely continue for the remainder of 2022.

Brandshield Systems 13.5p £17.4m (BRSD.L)

The provider of cybersecurity solutions for digital brand protection, has secured a new business mandate to support one of the world’s largest international consumer electronics brands. The new contract will see the Company provide its solutions to detect and prevent online fraud, protecting the Client from illicit trade and unauthorised online sales, a critical threat to companies and brands following the proliferation of e-commerce in recent years. BrandShield will leverage its unique capabilities within the brand oriented digital risk protection space to identify unauthorised traders and mitigate these disruptive online activities, enabling the Client’s online services to function efficiently. The Client’s online activity will be bolstered by BrandShield’s highly automated SaaS offering, which detects and eradicates online threats, mitigating their impact on customers to considerably enhance user experience. With e-commerce becoming an integral activity for consumer brands of all sizes and across a wide range of sectors, BrandShield has already signed a number of new customer mandates across 2022.

Conygar Investment Co 158.5p £94.5m (CIC.L)

The property investment and development group, announces that it has completed the disposal of its retail park in Cross Hands, Llanelli for a net consideration of £18.25m. The net proceeds are expected to be utilised in progression of the Company’s development at The Island Quarter site in Nottingham. Freddie Jones, Director at Conygar said “We are delighted to have exited our retail park development. Since we purchased the 10-acre site in 2015 we have constructed and fully let the 92,000 sqft scheme to leading operators including Lidl, B and M Retail, Iceland’s Food Warehouse, Costa Coffee and Pets at Home with annual net rental income of £1.3m. The sale is at a £0.5m premium to the September 2021 year end valuation which reiterates our strategy of selling completed developments.”

Diurnal Group 57p £96.5m (DNL.L)

The specialty pharmaceutical company targeting patient needs in chronic endocrine (hormonal) diseases, announces that the first patient has been dosed in its Phase 2 European clinical trial of modified-release hydrocortisone (DNL-0200 – previously referred to as Chronocort®) for a line extension in adrenal insufficiency (AI). AI represents a significant market opportunity for the Company of approximately $1.9bn across Europe and the UK. The Phase 2 study will evaluate the efficacy, safety and tolerability of modified-release hydrocortisone versus Plenadren® in AI (CHAMPAIN). The study will recruit up to 50 subjects with primary AI who will be followed for a period of 16 weeks across centres in Germany and the UK. The CHAMPAIN study is anticipated to take 6 months to complete with data readout expected in H2 2022. The results of the study will support the Company’s discussions with both the European Medicines Agency and the UK Medicines and Healthcare Regulatory Agency to seek market authorisations for the product in adult AI in Europe and the UK. Modified-release hydrocortisone is a preparation of hydrocortisone that has been specifically designed for patients with diseases of cortisol deficiency such as AI and additionally the condition of congenital adrenal hyperplasia for which it is approved in Europe and the UK (under the commercial name Efmody®). AI is an orphan condition caused by inadequate production of steroid hormones in the cortex of the adrenal glands. AI can result in severe fatigue and, if left untreated, adrenal crisis that may be life threatening. AI is estimated to affect 298k patients in Europe and the UK.

Frontier IP Group 95.5p £52.5m (FIPP.L)

The specialist in commercialising intellectual property, today announces that a project coordinated by portfolio company Cambridge Raman Imaging (CRI) has been selected to receive a EUR3.3m grant in the European Innovation Council’s (EIC) Transition call. The project, called CHARM, aims to develop a medical device based on high-speed, low-cost Raman digital imaging technology and artificial intelligence to transform cancer diagnosis and treatment. The technology will analyse the molecular composition of patient tissue samples to distinguish cancerous from healthy cells without the need for chemical staining. CHARM is a pan-European collaboration between CRI, the University of Cambridge, Italian institutions Politecnico Di Milano and Consiglio Nazionale Delle Ricerche, the Jena University Hospital in Germany, and project management firm IN s.r.l. CRI is to receive EUR1.3m of the grant, which is being made to its wholly-owned Italian subsidiary Cambridge Raman Imaging s.r.l. The project coordinator is Dr Matteo Negro, CRI’s Chief Technology Officer. CHARM is one of 42 projects selected for funding from 292 submitted in the first ever EIC Transition awards, intended to support moving technologies from laboratories into the real world. It aims to develop the device to the preclinical validation phase. Frontier IP holds a 25.8% equity stake in CRI.

Karelian Diamond Resources 2.1p £1.4m (KDR.L)

Karelian has been informed that the final public meeting of the National Land Survey in Finland in relation to the Lahtojoki diamond deposit is scheduled to be held during Spring and that the proceedings are to be completed by June 2022. A Mining Concession over the Lahtojoki diamond deposit has already been approved by TUKES (The Finnish Mining Authority). The National Land Survey, on the order of TUKES, is undertaking the process in relation to compensation for landowners. This process has involved a series of public meetings and also submissions by the relevant landowners and the Company. By early 2020 the process had reached an advanced stage but was delayed by the onset of the COVID-19 pandemic and consequent restrictions on holding public meetings. The Lahtojoki diamond deposit, located in the Kuopio Kaavi region of Finland, is one of the few diamond deposits in the world at a relatively advanced stage of development. The location of the deposit is highly favourable with excellent infrastructure, including good road access and power distribution, together with local technical and logistics availability. The coloured stones that are expected to occur within the deposit, in particular the presence of pink diamonds, which can achieve very high prices, add significantly to the financial attractiveness of the deposit. The mine, when opened, will be the first diamond mine in Europe (outside Russia).

Pittards 66.5p £8.6m (PTD.L)

The specialist producer of technically advanced leather and luxury leather goods for retailers, manufacturers, and distributors, announces a trading update in respect of its financial results for the year ended 31 December 2021 which are planned to be announced on 23 March 2022. FY 2021 sales revenue up 30% to £19.8m (2020: £15.2m). Return to profitability £0.5m (2020: £2.3m loss) for full year in line with market expectations. Sales order book opened, up 25% in January 2022 compared to the start of 2021.

Sovereign Metals 26.5p £114.6m (SVML.L)

The highly experienced mining industry executive Mr Nigel Jones has been appointed as a Non-Executive Director of the Company. From 2019 to 2021, Mr Jones was Managing Director of Rio Tinto Group’s very large Simandou iron ore project in Guinea, west Africa. In this role, he was accountable for all aspects of the project’s development, including its complex environmental, social and governance (ESG) strategy. Such aspects included impacts on natural ecosystems, biodiversity, and community and government relations. Mr Jones was also a member of the senior leadership team of the Energy and Minerals product group, which incorporated Rio Tinto’s titanium dioxide feedstock businesses in Canada and southern Africa. Prior roles in Rio Tinto included Head of Business Development, Head of Business Evaluation and Managing Director of the group’s Marine operations.

ULS Technology 82.6p £53.6m (ULS.L)

The provider of online digital platforms for the UK conveyancing and financial intermediary markets, announces an additional service with the Lloyds Banking Group (LBG), for the provision of remortgage services. This contract builds on the Company’s long-standing relationship with LBG and highlights the strength and growing importance of its broad range of solutions. Under this new service, ULS is providing LBG with support for its fees-assisted remortgage product line in England & Wales, which will enable LBG to meet growing demand and speed up transactions.

10 February 2022
*A corporate client of Hybridan LLP

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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).

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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.

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