Small Cap Feast

12th October 2022

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What’s Cooking In The IPO Kitchen?

OTAQ plc, (OTAQ.L) the technology company with three divisions: Aquaculture, Geotracking Devices and Offshore intends to delist from the Main Market and join the AQSE Growth Market.. OTAQ is developing adjacent technologies to take advantage of a number of growth initiatives that will broaden the Group’s current product portfolio in the global marine aquaculture sector and facilitate entry and growth into the geotracking devices sector. Expected 9 November 2022. Raised £2m with a further £3.6m to be raised.

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 2 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. IPO PAUSED.

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

Coro Energy 0.285p £6.1m (CORO.L)

The South East Asian energy company with a natural gas and clean energy portfolio, announces the endorsement by the Philippines Department of Energy of Coro’s Area of Interest (AOI) for its first 100MW wind project. The Company’s proposed AOI for its onshore Oslob Wind Power Project in Oslob, Cebu, which covers a 4,617 hectare area, has now been authorised to proceed with the filing of a wind energy service contract application. The Company expects to file the application for a wind energy service contract, which reserves the AOI, to the Philippines Department of Energy prior to the end of November 2022.

Coral Products 13.9p £11.7m (CRU.L)

The specialist in the design, manufacture and supply of plastic products based in Manchester, announces that it has acquired the entire issued share capital of Ecodeck Grids Limited for a consideration of up to £5.6m. This will be satisfied by an initial payment of £3.35m in cash, the issue of 6.25m ordinary shares in the Company at a price of 16p per ordinary share which are subject to a 12 month lock in arrangement and an earn out of up to £1.25m. As per the unaudited financial statements for the year ended 30 January 2022, Ecodeck’s sales were £6.8m, profit after tax was £0.9m and net asset value was 1.9m.

DeepVerge 3.38p £7.4m (DVRG.L)

DeepVerge notes recent market speculation regarding forthcoming loan repayments and a potential equity fund raising. The Company announced in March 22 that it had secured a mezzanine loan facility of up to £25m, of which an initial £4m was drawn down. Monthly repayments are to commence with the initial repayment of £0.5m due on 16 October 2022. DeepVerge has also begun the process seeking to raise equity, but cannot guarantee that sufficient equity funds will be raised. The Company and the lenders have agreed that there will be no Event of Default relating to any repayments that have been or may be missed up to 14 November 2022 provided the balance of the principal and the interest to accrue until the original maturity date of 16 March 2023 is made in full immediately following the proposed equity raise.

Evgen Pharma 6.2p £17m (EVG.L)

The clinical stage drug development company developing sulforaphane-based medicines for the treatment of cancer and other indications, announces the start of recruitment for the pharmacokinetic/pharmacodynamic trial in healthy volunteers (HV). The purpose of the HV study is to examine the performance of Evgen’s new enteric coated tablet formulation of lead asset SFX-01. Results of the HV study are expected during H1 2023. Evgen has also decided to commence an Investigator Sponsored clinical study (ISS) for the glioblastoma programme. If the pre-clinical and ISS clinical work is successful, the trial programme is likely to be continued as an Evgen-sponsored trial. Supporting an ISS in GBM for the first clinical phase will result in the Company having financial resources for a further year, at least to the end of Q4 2024. This runway will extend well into 2025 if further milestones relating to the results from the HV study and FDA IND approval are received following the Stalicla SA licensing transaction.

East Star Resources 4.4p £8.0m (EST.L)

The Kazakhstan-focused gold, rare earths and copper explorer, announces that all necessary approvals to commence fieldwork at the Talairyk heavy rare earths project in the Kostanay region of Kazakhstan have been received and drilling will commence imminently, ahead of schedule. 1,000m of Reverse Circulation drilling will take place to confirm historical grades of the Ionic Adsorption Clay hosted deposit. Samples will be sent for ICP analysis and leach test work to confirm historical grades and the potential for economic recovery of rare earth elements. Providing positive results, East Star can implement a more significant drill programme designed to convert the historical resource to JORC and test the huge strike potential of this deposit.

ITM Power 95.08p £585.8m (ITM.L)

ITM announces that the Western Australia (WA) Government is investing around A$225k with ITM Power Pty Ltd to understand the feasibility of manufacturing renewable hydrogen electrolysers within the State. The investment follows a WA Government process that invited a shortlist of electrolyser manufacturers to submit an outline for a business case for electrolyser assembly and manufacture. ITM Power has been selected to develop a business case. The business case is expected to increase the depth of industry information available, leverage funding from the private sector, promote competition and signal to the market that WA is serious about renewable hydrogen. Electrolyser manufacturing is a key initiative in implementing the Western Australian Renewable Hydrogen Strategy.

Palace Capital 206p £90.7m (PCA.L)

The property investment company provides a trading update ahead of its results for the half year ended 30 September 2022. Rent collection for the first 2 quarters of the current financial year was 99% (31 March 2022: 98%), while occupancy remains stable at 88.9% (31 March 2022: 88.5%). A total of 7 new lettings, 6 lease renewals and 10 rent reviews were completed generating £2.2m of contracted rent, 12% ahead of 31 March 2022 ERV (estimated rental value) and 12% ahead of passing rent for lease renewals and rent reviews. Since 31 March 2022, the Company has disposed of 4 Investment Properties for £4.8m, 25% ahead of the 31 March 2022 book value. Given the recent, volatility and uncertainty the Board has decided to pause the timing of significant disposals but continue to sell small, individual assets which lend themselves better to private buyers and special purchasers.

Physiomics* 2.6p £2.5m (PYC.L)

The consultancy company offering expertise in mathematical modelling and simulation to enable smarter decision making in drug development for the biopharma industry, announces that it has signed an agreement to work with Cancer Research UK. Physiomics will use its PKPD modelling capabilities to support the Cancer Research UK sponsored early phase clinical development of ALETA-001, a CAR-T cell engager candidate for the treatment of blood cancers developed by Aleta Biotherapeutics. The PKPD modelling project is expected to be completed during this calendar year.

Sareum Holdings* 157.5p £107.2m (SAR.L)

The clinical stage biotechnology company developing next generation kinase inhibitors for autoimmune disease and cancer, announces that it has been informed by Sierra Oncology, Inc. (a subsidiary of GSK plc) that it intends to return the rights for SRA737 to the CRT Pioneer Fund LP (CPF). Sareum will discuss with CPF the potential options for future development opportunities for SRA737. SRA737 was licensed by CPF to Sierra in September 2016. Sierra progressed SRA737 through Phase 1/2 clinical development and, at the 2019 ASCO Annual meeting, reported positive preliminary efficacy and safety data from two clinical trials evaluating SRA737 as a monotherapy and in combination with chemotherapy. Dr Tim Mitchell, CEO of Sareum, commented: “We continue to believe that SRA737 has great potential in several oncology applications, and Sareum now has the opportunity to be involved in planning its future development, supported by the positive clinical studies previously undertaken by Sierra.”

Thruvision Group 23.7p £34.7m (THRU.L)

The provider of “safe distance” people-screening technology to the international security market, provides a trading update for the six months ended 30 September 2022. Revenues for the period are expected to be £2.8m, representing growth of 41% year-on-year (H1FY22 £2m). Currently, there is an order backlog for equipment totalling $8.3m (£7.5m at today’s rate of $1.11) and expect most, if not all, of this to be delivered to revenue during the second half. Cash as at 30 September 2022 was £1.1m, and has since grown to stand at £3.1m as at 11 October 2022. The Board expects that the strong growth will allow the Group to achieve break-even this financial year.

12 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).

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.

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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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