Small Cap Feast

15th August 2023

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What’s Cooking In The IPO Kitchen?

Announced ITF 4 August: Tan Delta Systems plc, a Sheffield based Company intends to IPO on AIM. Tan Delta has developed an innovative and differentiated monitoring solution based on real time oil analysis and analytics that offers equipment operators enhanced insight into the maintenance status of their equipment and thus the ability to reduce maintenance costs, improve reliability and reduce carbon footprint. Anticipated Market Cap £19m. Capital to be raised on Admission: £6.0m via primary proceeds and £0.57m via secondary sale of existing ordinary shares. Admission expected 18 August 2023.

Announced ITF 12 July: Substrate Artificial Intelligence, an artificial intelligence company based in Spain that creates, buys and scales companies around AI in diverse sectors such as fintech, agritech, energy, human resources, and health, intends to join the Access Segment of the AQSE Growth Market.

Announced ITF 6 July: Blackpoint Biotech plc, a medical cannabinoids company established to fulfil gaps in the medical cannabis market by creating products that provide fast onset of action and accurate dosing, intends to join the Access Segment of the AQSE Growth Market. Admission delayed.

Breakfast Buffet

Andrada Mining 7p £107.7m (ATM.L)
The African technology metals mining company with a portfolio of mining and exploration assets in Namibia, provides an update on the previously proposed Funding Package with funds managed by Orion Resource Partners announced on 15 September 2022. On 11 August 2023, Andrada signed binding documentation for an updated, conditional US$25m funding package with Orion. The financing agreement is as follows: US$2.5m (c£2.0m) equity at 6.39p and US$10m (c£7.9m) Convertible Loan Note being for the general purposes of accelerating Andrada's overall strategy of achieving commercial production of its lithium, tin, and tantalum revenue streams. US$12.5m unsecured tin royalty to increase tin production. The Company will issue Orion with warrants equivalent to double the GBP value of the US$10m Convertible Loan Note based on the USD/GBP closing rate at market close on the Orion Issuance Date. Each warrant will enable Orion to subscribe for one ordinary share in the Company. Funding expected to be completed around the end of September 2023, with shareholder approval.

Ariana Resources 2.6p £29.8m (AAU.L)
The mineral exploration and development company with gold mining interests in Europe, announces the results of recent exploration and development work conducted at Kiziltepe. The Kiziltepe Project is operated via Zenit Madencilik San. ve Tic. A.S. in partnership with Proccea Construction Co. and Ozaltin Holding A.S. and is 23.5% owned by Ariana. Recent drilling undertaken has defined the likely economic limits of the known vein systems. Drilling remains underway at Karakavak, with progression onto Kepez and with a separate programme ongoing at Kizilcukur. Targets defined following a recent Induced Polarisation (IP)/Resistivity survey will become the focus of further drilling across the Kiziltepe Sector. Opportunities to further extend mine life to nine years, through to 2025, and potentially beyond are being assessed.

Empresaria Group 40.5p £20.2m (EMR.L)
The global specialist staffing group, announces the launch of its Professional service offering, LMA Recruitment, in the United States. LMA Recruitment in the US will initially target HR, business support, sales, marketing and operational skillsets. The launch follows a global rebrand of LMA Recruitment, Empresaria's lead Professional brand with offices in the UK and Singapore. The US was chosen as the first market for LMA's expansion due to demand for Professional staffing from existing clients of the Group's well-established IT and Healthcare operations within the US. The launch is part of Empresaria's medium-term growth plans focused around three key pillars: accelerating growth in high potential sectors, diversifying its service offering and growing Offshore Services.

Evgen Pharma 2.65p £7.3m (EVG.L)
The clinical stage drug development company developing sulforaphane-based medicines, reports the final data from its Phase 1b healthy volunteer study using the Company's new enteric coated tablet formation of lead asset SFX-01. The data are contained in the extensive Clinical Study Report (CSR) which has been approved by the Company and its providers in compliance with good clinical practice (GCP). The final CSR confirms that the new formulation of SFX-01 is safe and well tolerated at multiple doses. As reported in March 2023, based on the time course seen, sulforaphane was released by the new enteric coated tablet beyond the acid environment of the stomach. No serious adverse events were observed. Total blood levels of sulforaphane (SFN) and SFN-metabolites were confirmed in the micromolar range, where efficacy is seen in vitro. Additional pharmacodynamic exploratory investigation, utilising mRNA sequencing, showed changes in gene expression after dosing with SFX-01 even in healthy volunteers.

Gelion 24.5p £26.6m (GELN.L)
The Anglo-Australian battery innovator, provides an update on the Group's trading for the year ended 30 June 2023. Revenues for the year are expected to be £2.0m ahead of current guidance of £1.7m. Adjusted EBITDA loss is expected to be approximately £6.0m, lower than guidance of £6.4m. Net cash at 30 June 2023 was £7.3m. Since March 2023, the Company has been focused on reducing costs and has reduced cash consumption by c. £1.0m on an annualised basis. Gelion also announces the signing of two agreements with The University of Sydney and Professor Yuan Chen for Gelion's Advanced Cathode Project, accelerating progress towards its Zinc-based Energy Storage Solution. The agreements are to utilise Gelion's recent zinc anode performance leading to Gelion's next generation of energy solutions - Gelion's Gen 5 Zinc Hybrid Cell.

Instem 602.5p £138m (INS.L)
The provider of IT solutions to the global life sciences market, announces a trading update for the six months to 30 June 2023. Revenue is expected to be £29.7m (H1 2022: £27.0m), an increase of approximately 10.2%, with recurring software revenue growing by 27%. This excludes Samarind Limited, which was sold on 1 April 2023 and will be classified as a discontinued operation in the H1 2023 results statement. Annual Recurring Revenue at 1 July 2023 was c.£41m (1 July 2022: £32m). Closing cash at 30 June 2023 was £8.4m (30 June 2022: £10.3m). During the period, Instem announced the transfer of the ToxHub Platform and launch of Centrus. The Company also renewed its long-standing agreement with the National Toxicology Program. Management is confident performance will be broadly in line with the Board's expectations for the full year.

MTI Wireless Edge 41p £36.2m (MWE.L)
The technology group focused on comprehensive communication and radio frequency solutions across multiple sectors, announces its financial results for the six month period ended 30 June 2023. Revenues of US$22.4m (H1 22: US$22.7m), held back by adverse currency translation. On a constant currency basis revenues increased by 2%. Gross margin improved 1% to 32% (H1 22: 31%) and profit before tax increased 3% to US$2.1m (H1 2022: US$2.04m). Earnings per share increased 9% to 1.99 US cents (H1 2022: 1.83 US cents) and net cash provided by operating activities improved to US$1.23m (H1 2022: US$0.037m). Net cash at 30 June 2023 to $6.25m (30 June 2022: $5.18m).

TMT Investments* 300c $94.4m (TMT.L)
The venture capital company investing in high-growth technology companies announces its unaudited interim results for the half-year ended 30 June 2023. NAV per share of US$6.32, representing a 1.4% decrease from US$6.41 as of 31 December 2022. Total NAV of US$198.7m (US$201.7m as of 31 December 2022). During the period, TMT invested US$2.4m across six new and existing companies. TMT’s largest holdings (Bolt, Backblaze, PandaDoc, 3S Money and Scentbird) continued to perform well, recording double-digit annualised revenue growth. As of 14 August 2023 the Company reported US$7.8m in cash and cash equivalent reserves (including treasury bills) and no financial debt. TMT is well positioned to ride out the current market volatility and to continue investing in growth companies.

UP Global Sourcing Holdings 128p £115.2m (UPGS.L)
The owner of a number of homeware brands including Salter announces its trading update for the financial year ended 31 July 2023 (FY23). Unaudited Group revenues increased 8% to a record £166.3m (FY22: £154.2m), driven by growth at the Group's online division, where revenues were up 64% year-on-year, together with an improved sales mix. Unaudited adjusted EBITDA increased 8% to £20.2m (FY22: £18.8m) and unaudited adjusted PBT increased 6% to £16.8m (FY22: £15.8m). At the year end, the Group had a net bank debt of £14.8m (FY22: £24.3m). Current trading for FY24 is in line with market expectations.

Verditek 1.2p £5.3m (VDTK.L)
The international green technology company announces it has signed a non-binding Memorandum of Understanding (MOU) that forms the basis of the framework for a 50:50 Joint Venture Agreement (JVA) with Net Zero Valley (NZV), an Italian fully owned investment holding of the SerendipEquity Group, a global impact/ESG-only private equity and real estate investment firm and alternative fund manager, to invest in a new large scale (1GW) ultra-lightweight solar panel manufacturing plant in Southern Italy on NZV's 1.5m sq ft campus. NZV is planning to establish an integrated R&D and manufacturing campus in Eastern Sicily which will focus on technologies for the decarbonisation of the real estate and automotive sectors and systemic solutions and applications thereof. Verditek will be responsible for providing its expertise in sourcing the required machinery, setting up and operating the plant, deploying its proprietary know-how and ensuring the 1GW factory is certified. Verditek will be jointly responsible for securing for the new JV its existing strategic distribution partners that already sell photovoltaic integrated roof products as well as new prospective off-takers.

15 August 2023
*A corporate client of Hybridan LLP or retained by Hybridan LLP for certain services
** Arranged by most recent first
*** Alphabetically arranged


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