Small Cap Feast

10th October 2022

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What’s Cooking In The IPO Kitchen?

Cooks Coffee Company ltd, an international coffee focused café chain which currently owns the Esquires Coffee and Triple Two Coffee Brands, intends to join the AQSE Growth Market. The Company is the 4th largest coffee focused café chain in the UK. Cooks Coffee is currently listed on the New Zealand Stock Exchange. Raising £1.5m through a rights issue in New Zealand and a private placement. Expected late November 2022.

Guanajuato Silver Company ltd, a fast growing silver producer in Mexico currently listed on the TSX Venture Exchange, intends to join the AQSE Growth Market. The Company currently owns five precious metals mines and three production facilities. GSilver is primarily focused on reactivating past producing silver and gold mines in the state of Guanajuato. Expected 25 October 2022.

Sondrel Holdings plc, a UK founded and headquartered fabless semiconductor business providing turnkey services in the design and delivery of complex, high end ‘application specific integrated circuits’ (ASICs) and ‘system on chips’ (SoCs) for leading global technology brand, intends to join AIM. Anticipated Mkt Cap £48.1m. £20m to be raised. Expected 31 October 2022.

TECC Capital plc, to be renamed EDX Medical Group, intends to join the AQSE Growth Market. EDX operates a molecular biology and diagnostics laboratory in Cambridge, UK, from which it performs research & development, provides Polymerase Chain Reaction (PCR) testing and genomic sequencing services, undertakes quality assurance and has established expertise in the design, development, validation and sourcing of Lateral Flow Tests on a commercial scale. Due 31 October 2022.

Streaks Gaming plc, a UK-based provider of conversational gaming products intends to join the Standard Segment of the Main Market this autumn. The flotation is expected to value Streaks at approximately £10.2m (pre-money) and will make it the first LSE-listed “pure-play” conversational gaming company. Raising between £5-10m. Delayed but due in October.

The Sustainable Farmland Trust PLC, intends to float on the Premium Segment of the Main Market. The Company invests in a diversified portfolio of farmland and related agriculture-focused assets predominantly located in the US. Raising £200m. Expected 12 October 2022.

Welkin China Private Equity, newly established closed-ended investment company dedicated to investing in unquoted Chinese companies, intends to join the Premium Segment of the Main Market. The Company is targeting a raise of up to US$300m. Due 3 November 2022.

Georgina Energy, focusing on the exploration, development and monetisation of helium, hydrogen and hydrocarbon interests located in Australia intends to join AIM. Georgina Energy has two principal onshore interests: (1) Mount Winter Prospect in the Amadeus Basin in Northern Australia, which the Company has a right to earn an initial 75% interest; (2) Hussar Prospect, 100% owned by the Company, located in the Officer Basin in Western Australia. Expected late October.


Breakfast Buffet

Beeks Financial Group 149p £97.5m (BKS.L)

The cloud computing and connectivity provider for financial markets, announces the signing of two multi-year private cloud contracts with global asset management firms. The contracts worth c.$2m in aggregate over 3 years were secured via a partner for deployments across US, APAC and EMEA. The contracts help to further underpin the Beeks Financial’s FY23 expectations.

Bluejay Mining 5.56p £58.4m (JAY.L)

The AIM, FSE-listed and OTCQB traded exploration and development company announces the completion of the 2022 work programme at its Green Transition and Battery Metals Disko-Nuussuaq (Disko) Project, on behalf of Nikkeli Greenland A/S, the Joint Venture company created by Bluejay and its JV partner KoBold Metals. The programme has identified many novel targets and significantly updated its exploration hypotheses. The JV Company will incorporate the extensive exploration results, once received, into the 2023 exploration plans.

Evgen Pharma 4.65p £412.8m (EVG.L)

The clinical stage drug development company developing sulforaphane based medicines for the treatment of multiple diseases, has licensed the global rights for lead asset SFX-01 in neurodevelopmental disorders and schizophrenia to Stalicla SA. $0.5m will be paid upfront, $0.5m on completion of the Evgen-sponsored human volunteer Phase 1 study (anticipated Q2 2023). Milestone payments up to commercial launch are $26.5m, including $5m on grant of IND by the FDA (anticipated in late 2023). Total milestones of $160.5m are payable in relation to the first neurodevelopmental disorder indication under the license. Royalties payable to Evgen on sales are in the low to medium double-digit range in all scenarios, including on-licensing by Stalicla and use of SFX-01 in further licensed indications.

I3 Energy 24.23p £288.9m (I3E.L)

The independent oil and gas company with assets and operations in the UK and Canada announces the completion of drilling operations on the Serenity appraisal well on UK Licence P.2358, Block 13/12c. The targeted Lower Cretaceous Captain sand, which contained hydrocarbons in the 13/23c-10 well discovered in October 2019, was not present at this location. Over 100 ft of other Captain sands in various sequences were found but were water wet. The well will now be plugged and abandoned. i3’s paying interest for the 13/23c-12 well is 53.75%. The net cost to i3 is expected to be £5.6m.

Intercede Group 52.5p £30.6m (IGP.L)

A supplier of Public Key Infrastructure Credential Management Software provides a trading update for the six months ended 30 September 2022. Revenues were £6.1m, 23% higher than last year on a constant currency basis and 24% higher on a reported basis. This is in line with management expectations. Intercede also announces the acquisition of Authlogics Ltd, a Multi Factor Authentication and Password Security Management software vendor, for an initial consideration of £2.5m (adjusted to approximately £2.0m after net debt and working capital adjustments) plus a further deferred conditional and staged earnout payment of up to £3m. The acquisition is expected to be earnings enhancing in the financial year commencing 1 April 2023.

Mosman Oil And Gas 0.07p £3.4m (MSMN.L)

The oil exploration, development, and production company confirms that drilling at the Cinnabar-1 well in Tyler County, Texas is proceeding as planned. Cinnabar-1 was spudded on 30 September. Current operation is drilling ahead at a depth of 7,083 feet as at October 8th. The primary targets are the Wilcox sands below 9,000 feet which produce oil and gas at nearby wells. Mosman owns a c.75% working interest in the well. Mosman Operating LLC, a 100% owned subsidiary of Mosman, is the Operator of the lease.

Quartix Technologies 327p £158.2m (QTX.L)

The board reports that the rate of year-on-year growth in both annualised recurring revenue and unit installs continued to be strong in Q3. The growth rates are expected to continue in the last quarter of the year. The annualised recurring revenue of the fleet subscription base was £26.9m on 1 October, representing a gain, in constant currency terms, of £2.6m year on year, based on exchange rates as at 1 October 2022. The Company’s subscription base has grown by 17% year on year, to just over 229,000 vehicles. The Board expects revenue, profit and free cash flow for the year to 31 December 2022 to be in line with the current consensus market forecast.

Quiz 11.35p £14.1m (QUIZ.L)

The omni-channel fashion brand announces a trading update for the period from 1 April 2022 to 30 September 2022. The Group’s total revenues in the period were £49.4m, 37.2% higher than the prior year, marginally ahead of the Board’s expectations. The Group’s year on year revenue growth rate moderated as the period progressed during August and September, a trend consistent with other fashion retail businesses as inflationary pressures began to impact consumer confidence. Whilst it remains uncertain what impact the current cost of living pressures will have, management remain confident that the product proposition and commitment to providing glamorous looks at value prices will continue to appeal.

Thor Mining 0.5p £10.1m (THR.L)

A diversified resource company announces the commencement of a drilling program at the Company’s 100% owned Kelly’s Prospect within the Ragged Range Project, located in Eastern Pilbara, Western Australia. Drilling is designed to follow up on rock chip samples returning up to 15.5 g/t Au and 535g/t Ag, and a historic drill intercept of 1.5m @ 22.97g/t Au (DDHK2 drilled in 1969). The drilling is targeting the sheared contact of the Euro Basalts and Boobina Porphyry that forms a silicified ridge extending over 1 km. The drilling program also includes 1-3 drillholes beneath high-grade historic copper workings – Copper Hill and Kelly’s.

Zephyr Energy 5.55p £86.6m (ZPHR.L)

The Rocky Mountain oil and gas company focused on responsible resource development from carbon-neutral operations, announces the completion of the acquisition of a package of oil and gas assets located on and around the Company’s Paradox project, Utah, U.S. The acquisition will allow Zephyr to reduce the capital required to build the necessary gas export infrastructure for its forecast gas production from the Paradox project. The estimated replacement cost value of the acquired pipelines and plant is over US$10.6m. The consideration for the Acquisition was US$750k, and as the new owner, Zephyr has assumed responsibility for all future decommissioning, plugging and abandonment liabilities associated with the assets.

10 October 2022
*A corporate client of Hybridan LLP

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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).

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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.

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.

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