Small Cap Feast

12th December 2022

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What’s Cooking In The IPO Kitchen?

Savannah Energy, the AIM-quoted energy company,  is undergoing a reverse transaction in connection with the acquisition of Exxon Mobil Corporation's entire upstream and midstream asset portfolio in Chad and Cameroon. No capital to be raised on Admission.  Anticipated market cap £323m.  Expected 13 December. 

Celsius Resources intends to join AIM. Currently ASX listed, Celsius is a natural resources exploration and development company principally seeking to explore and develop potential world-class copper-gold assets in the Philippines and a cobalt asset in Namibia. Amount planning to raise and anticipated market cap TBC. Expected late December 2022. 

Smarttech247 Group intends to join AIM.  The company is a provider of AI enhanced cybersecurity services providing automated managed detection and response and has raised £3.67m to support its continued expansion into new products and geographies, development of its proprietary technology and for general working capital purposes. Admission is expected to take place on 15  December 2022 under the TIDM S247.

Conviction Life Sciences, a newly established closed-ended investment company managed by Plain English Finance Limited, is seeking to list on Premium Segment of the Main Market of the London Stock Exchange, to invest in a conviction portfolio of life sciences and medical technology businesses, primarily in the UK, Europe and Australasia. The Company will invest in both Publicly Traded and Private companies - c. 70% and c. 20% of the total portfolio value respectively. The Company will target an annualised Total NAV Return of 20% over the long-term. Targeting to raise c.£100m. Date 16 December.

Kistos Holdings intends to join AIM. The Company was incorporated to act as a new holding company for the group companies 0f Kistos plc (KIST), a holding company with the objective of creating value for its investors through the acquisition and management of companies or businesses in the energy sector. Anticipated Market Cap £327m. Expected 22 Dec 2022.


Breakfast Buffet

Argentex Group 127.5p £114.3m (AGFX.L)

The international provider of foreign exchange services to institutions, corporates and high net worth private individuals  announces continued improvement to its trading for the 9 months ending 31 December 2022. Following the Group's interim results announcement on 8 November 2022, the momentum reported at that time has continued through the last quarter of the calendar year. The Board's confidence in the business model will see Argentex continue to invest in line with the growth strategy and despite the planned increase in costs to reflect this investment in growth, the Board now expects that revenue and earnings for the period ending 31 December 2022 will be ahead of current market expectations.

Coral Products 18.25p £16.5m (CRU.L)

A specialist in the design, manufacture and supply of plastic products announces its results for the six months to 31 October 2022. Reported revenue increased by 147.9% to £17.6m (2021: £7.1m). Of the £17.6m in sales, £10.3m came from the acquired businesses. Gross margins decreased to 27.1% (2021: 35.7%) resulting in a gross profit of £4.8m (2021: £2.5m). Underlying EBITDA was £1.88m (2021: £1.01m) and underlying operating profits increased to £1.4m (2021: £759k). Management believe Coral is in a good position going forwards and has yet to show the full benefit of its investments to date.

EnSilica 75.5p £56.8m (ENSI.L)

The mixed signal chip maker announces that it has secured two new contracts, from existing customers based in mainland Europe, for a combined total of $3.6m. The contracts, which underpin current market expectations, include incremental workflows with a major automotive Tier 1 customer, with both contracts expected to commence by January 2023.

Hemogenyx Pharmaceuticals 1.33p £13m (HEMO.L)

The biopharmaceutical group developing new therapies and treatments for deadly blood diseases announces the successful completion of its first Process Qualification (PQ) run of the end-to-end process for the manufacture of HEMO-CAR-T cells. This PQ run is one of a minimum of three identical manufacturing runs required for the submission of the Investigational New Drug (IND) application to the US Food and Drug Administration (FDA). The process was followed by a battery of analytical release tests required to verify the quality of the manufactured HEMO-CAR-T cells. This is another step for the Company in its preparation of the IND application to the FDA required to authorise commencement of Phase I clinical trials of HEMO-CAR-T.

Kromek Group 10.5p £45.3m (KMK.L)

A developer of radiation and bio-detection technology solutions for the advanced imaging and CBRN detection segments announces that it has secured two contracts, totalling £1.5m, for the supply of its D3M and D3S-based nuclear security products. Delivery will commence immediately and the revenue will be received in Kromek's current financial year. Both contracts have been secured with Kromek distribution and procurement partners, and are to supply European government end-users.

K3 Capital Group 324p £238.2m (K3.L)

The multi-disciplinary and complementary group providing specialist advisory services to SMEs provides a trading update for the six-month period ended 30 November 2022. The Group delivered a good performance during the first six months of FY23 and is expecting to report revenues in the region of £42m (H1 FY22: £31.2m) delivering profits which are in line with the Board's expectations. The Group maintains encouraging activity levels and pipelines across its brands for the second half of the year and management is confident in meeting the Board's expectations for the full year.

Poolbeg Pharma* 7.4p £37m (POLB.L)

A disease focused biopharmaceutical company announces that, further to its announcement in July 2022, it has now received the initial results having completed the Lipopolysaccharide (LPS) human challenge clinical trial for POLB 001, a viral strain agnostic, small molecule immunomodulator being developed to address the unmet medical need for severe influenza. No further clinical activity is required, the recruitment and clinical phase closed on schedule. POLB 001 was found to be safe and well tolerated. Data analysis has commenced and full data read-out is expected in Q2 2023.

Rockfire Resources 0.177p £2.6m (ROCK.L)

The gold, base metal and critical mineral exploration company announces that inaugural drilling has encountered massive sulphides at the predicted depth and position at its 100%-owned Molaoi zinc/silver/lead/germanium deposit in Greece (Molaoi). The current, first hole will serve to provide core for geotechnical test work to feed into a feasibility study. A second, parallel lode is predicted, and drilling of this inaugural hole is being deepened, to test for this second lode. Massive sulphides occur between 130m and 134m, with semi-massive and disseminated sulphides continuing for a further 11m, down to 145m. More disseminated sulphides have also been encountered at 160m depth, which may represent a parallel lode beneath the main lode. Drilling remains in progress but is slow due to strongly brecciated, highly veined, broken and extremely altered rock; which are all good indications for favourable mineralisation.

RUA Life Sciences 41p £9.1m (RUA.L)

The holding company of a group of medical device businesses focused on the exploitation of the world's leading long-term implantable biostable polymer (Elast-Eon TM) announces its unaudited interim results for the six months ended 30 September 2022. Revenues increased 56% to £1,104,000 (H1 22: £708K). Gross margins were 79% resulting in gross profit of £875k being reported against the £528k (66% increase). Group loss for the period was £1.14m, a 15% decrease from £1.31m in H1 22. Throughout the period, both investment in development projects and commercial opportunities within Contract Manufacturing increased.

Velocys 5.17p £72.2m (VLS.L)

The sustainable fuels technology company announces that its wholly owned subsidiary, Altalto Immingham Ltd., has been awarded a grant of up to £27m from the UK Department for Transport's (DfT) Advanced Fuels Fund for the Altalto Immingham Sustainable Aviation Fuel (SAF) project. The project is being developed under an existing Joint Development Agreement between Velocys and British Airways PLC. The grant funding will be distributed over the grant period from December 2022 to March 2025 and is conditional upon receipt of private sector matched funding. Velocys' cash contribution into the Altalto Immingham project over the 2 years from April 2023 is not expected to exceed £8m, and this sum may be reduced by bringing in additional investors into the project.

12 December 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).

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.

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