Small Cap Feast

13th December 2022

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Dish Of The Day:

Joiners:  
Savannah Energy’s (SAVE.L) shares have been re-introduced following a reverse take over in connection with the acquisition of Exxon Mobil Corporation's entire upstream and midstream asset portfolio in Chad and Cameroon.

Leavers:
No leavers today.

What’s Cooking In The IPO Kitchen?

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

Belluscura 72p £88.6m (BELL.L)

The medical device developer focused on lightweight and portable oxygen enrichment technology, announced it has entered into its first international distribution agreement outside of the US, with MedHealth Supplies of South Africa.  Following the distribution agreement, MedHealth has placed orders for both 2022 and 2023, with deliveries to commence immediately. MedHealth is a leading durable medical equipment provider in South Africa distributing durable medical equipment throughout South Africa and neighboring countries, and was recently awarded oxygen supply contracts based on the ability to deliver Belluscura's X-PLOR portable oxygen concentrator.

Caracal Gold 0.8p £15m (GCAT.L)

The East African gold producer with over 1,300,000oz JORC-compliant gold resources announced sample assay results from its Diamond Drilling programme on the Vim Rutha prospect, a shear zone of about 4.9km parallel to the known orebody at the Kilimapesa Hill deposit at the Kilimapesa Gold and Mining Operations in Kenya.  The drilling intercepted, on several occasions and over a distance of more than 2km from west to east, one or more mineralised structures of significant thickness located a few hundred metres south of Kilimapesa Hill.

Dianomi 110p £33m (DNM.L)

The provider of native digital advertising announced a trading update for the year to 31 December 2022.  While revenues are expected to be in line with 2021 levels, the decrease in gross margin as previously announced on 21 September 2022, alongside the Group's investment in developing the talent base of the business to support future growth, means that Adjusted EBITDA* for the year to 31 December 2022 is expected to be lower than consensus market expectations at approximately half of that for the prior year. Unaudited cash at 30 November remains strong at £10.8m. 

Invinity Energy Systems 53p £61.6m (IES.L)

The global manufacturer of utility-grade energy storage announced the sale of a 1.5 MWh Invinity VS3 flow battery system to Hyosung Heavy Industries for use by Korea Electric Power Corporation, Korea's national electricity utility.  An advance payment for the batteries delivered under this order is due in 2022. Delivery and commissioning of all seven VS3s is expected towards end of H1 2023, with the remaining revenue associated with the project to be recognised in H2 2023.

React Group 1.075p £11.4m (REAT.L)

The specialist cleaning, hygiene and decontamination company announced a further update since their Trading Update of 26 October 2022 in which they reported a positive performance for the year ended 30 September 2022 and a strong start to the current financial year.  LaddersFree has continued to perform strongly. In the three months to 31 August 2022, turnover was over £1m. Trading in the last three months of FY22 and into the current financial year, has been especially strong across the Group. All divisions continue to win a broad spread of business providing positive margin contribution and cash generation as well as providing long term income and underpinning future performance. This positive start underpins the Board's optimistic outlook for the current financial year.

Shield Therapeutics 7.25p £18.7m (STX.L)

The commercial stage pharmaceutical company, announced a proposed equity fundraising by way of a subscription and placing to raise approximately £14.7m in aggregate at a price per share of 6p.  The Company also announces it will be making an Open Offer to Qualifying Shareholders to raise up to a further £3.9m.  Shield also announced today a US$10m extension of its existing convertible shareholder loan facility with AOP Health International Management AG and a collaborative sales agreement with Viatris Inc., a global healthcare company, which includes an up-front cash payment to Shield of US$5m. When combined with the Equity Fundraising, that results in additional financing to Shield of approximately US$37.7m (before expenses but assuming full take up under the Open Offer), which the Directors believe will enable Shield to, among other things, drive significant growth in sales of Accrufer® in the US. 

Sosandar 21.5p £47.6m (SOS.L)

The UK fashion brand announced its financial results for the six months ended 30 September 2022 and an update on current trading.  Continued revenue growth of +72%, delivering the Company's second six-month period of positive PBT. Momentum has continued into the second half of the financial year with record sales months in October and November, trading in line with market expectations for the full financial year.

Synectics 115p £20.5m (SNX.L)

The company involved in the design, integration and support of advanced security and surveillance systems, announced a trading update for its financial year ended 30 November 2022.  Trading has continued in line with the Board's expectations as set out in the Company's interim results announcement of 12 July 2022. Second half profit is expected to be higher than in the first half, resulting in an underlying profit for the full year being slightly ahead of market expectations.  The Group's cash balance as at 30 November 2022 was £4.1m (31 May 2022: £4.2m, 30 November 2021: £4.6m), with undrawn bank facilities of £3.0m.

TMT Investments $2.85 $89.6m (TMT.L)*

The venture capital company investing in high-growth technology companies, announced a portfolio update.  The majority of TMT's portfolio companies, including its largest holdings, continue to demonstrate good business progress and are adapting well to the challenges of the current environment.  TMT's largest portfolio holding, ride-hailing and food delivery platform Bolt (www.bolt.eu) has been finding its lower-cost competitive advantage very timely in today's environment, enabling it to continue delivering notable revenue growth and margin improvements, with the additional security offered by its very sizeable cash reserves following its successful capital raise in January 2022.  TMT continues to make very selective investments into new and existing portfolio companies when attractive opportunities arise.  As of 12 December 2022, TMT had approximately US$10.2m (unaudited) of cash and bank deposits with no debt.

Wishbone Gold 5.75p £11.2m (WSBN.L) 

The gold exploration company announced positive first assay results from the maiden drilling program at the Company's Red Setter Gold-Copper Project in the Patersons Range area in Western Australia.  Initial assay results have confirmed the geological observations of a broad hydrothermal system with gold and copper associated with quartz-carbonate-sulphide veins present within all lithology types, and often with breccia textures.  A recently completed gravity survey combined with the previously completed magnetic survey, indicates the scale of the hydrothermal system with structures extending over a strike in excess of 3km, with depths ranging from 50m->2,000m.

13 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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