Small Cap Feast

16th 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

Altona Rare Earths 5.125p £4.3m (REE.L)
The resource exploration and development company focused on Rare Earths in Africa, announces an operational update for its rare earths mining project in Mozambique. In line with the plan announced on 5 July 2023, the Company has so far drilled 10 Reverse Circulation holes for a total of 790m. Drilling at Target 3 confirmed the presence of high-grade ore, additionally 76m at 3.426% Total Rare Earth Oxides (TREO) were found from surface at Target 4, a record for the project in terms of length and grade. The Company excepts the upcoming Mineral Resource Estimate to confirm these drilling results and looks to the upcoming scoping study and additional exploration work, now planned for Target 3, to provide further insight into the Monte Muambe project later this year.

Belluscura 43.5p £59.0m (BELL.L)
The medical device developer focused on lightweight and portable oxygen enrichment technology, announces that it has received purchase orders for over 6,500 of its next-generation DISCOV-R portable oxygen concentrator. This represents approximately $15m of potential revenue to the Company, with initial production of the DISCOV-R expected to begin by the end of this quarter. Following the pre-market launch of DISCOV-R and a patient usability study in June 2023, the Company plans a controlled roll out of the DISCOV-R this autumn and into 2024 to meet demand for the device. The Company also continues to progress its CE and UKCA registration mark application for its X-PLOR® portable oxygen concentrator.

Eden Research 6.125p £24.8m (EDEN.L)
The company focused on sustainable biopesticides and plastic-free formulation technology for use in the global crop protection, animal health and consumer products industries, announces that it has received its first commercial order for Ecovelex. Ecovelex represents a new entrant into the seed treatment market and is intended to replace conventional chemicals that are facing significant regulatory pressures in the EU and UK. Following the recent fundraise announced 28 July 2023, production of Ecovelex is now underway to fulfil this initial order. It is expected that the order will be shipped towards the end of the year so that, in the event of receipt of relevant regulatory approvals, it will be available in time for the seed treatment window for the 2024 growing season. Until full authorisation is received, the use of Ecovelex to treat seeds this year is contingent upon certain countries granting emergency use authorisation. Unless, and until, emergency use approvals are granted, it is difficult to anticipate the full demand in the short term.

Gattaca 106p £33.8m (GATC.L)
The specialist staffing business, provides the following unaudited trading update for the financial year ended 31 July 2023 (FY23). Group continuing Net Fee Income (NFI) is expected to be £43.6m (FY22: £44.1m), a decrease of 1% , with the mix split between Contract 72% and Permanent 28% (FY22: 71%:29%). The Group expects to report continuing underlying PBT of £2.5m, ahead of expectations as a result of the Group's cost rebalancing programme and exit from low margin contracts. Net cash as at 31 July 2023 of £21m (31 July 2022: £12m). The Board intends to recommend a full year dividend in line with its policy of 2.5p per share, accompanied by a one-off special dividend of 2.5p per share, both of which are expected to be paid in January 2024. Further details on the proposed dividend timetable will be provided at the time of the Group's final results. The Board currently expects profit before tax for FY24 to show marginal growth on FY23.

Holders Technology 67.5p £2.9m (HDT.L)
The provider of specialised materials, components and solutions to the electronics and lighting industries announces its unaudited half year results for the six months ended 31 May 2023. Revenue increased 11.9% to £3,865,000 (2022: £3,454,000). The figures do not include the Group share of joint venture revenues of £196,000 (2022: £193,000). Gross margins reduced from 34.9% to 32.6% and the pre-tax Group results reported a loss of £507,000 (2022: loss of £226,000). Group cash at the period end was £1,808,000 (31 May 2022: £2,490,000) and other than lease liabilities, the Group has no debt. Although in the second half of the current year the Group will benefit from the cost saving measures already in hand, the Group remains cautious as regards to expectations but remain confident for the longer term and continue to believe that performance will improve as markets settle.

Molecular Energies 125p £13.0m (MEN.L)
The international energy company, announces developments relating to its Green House Capital (GHC) division. GHC has acquired a 70% beneficial interest in Quanto, a Paraguay private fintech company which has developed an app-based payment system which can be used both inside and outside of Paraguay. The purchase has been made by way of the acquisition of the entire issued share capital of President Investments Paraguay S.A, a Paraguay private company, for the discounted sum of £25k from Alpha Energies Invest GmbH, a company beneficially owned by chairman Peter Levine, payable only on a successful completion of the proposed spin-out and IPO of GHC. Progress on the engineering of the conversion of diesel engines to run on a mixture of diesel and hydrogen continues. It has been decided that proof of concept work on a complete diesel engine will take place in the UK starting within the next month with the test engine now placed in the test cell with installation of the gas detection system and hydrogen pipework completed.

Pathfinder Minerals 0.6p £3.8m (PFP.L)
The Southern Africa focused natural resource company, announces the appointment with immediate effect of Paul Barrett as an Executive Director. Dennis Edmonds, the Company's Non-Executive Chairman, will retire from the Board with immediate effect. Mr Barrett is a geologist with commercial and engineering experience. He is currently a director of Southwind Corporation and is also a director of OK Energy Limited. Mr. Peter Taylor, the current non-board CEO, will remain with the Company until the completion date of the proposed sale of IM Minerals (IMM) to Acumen Advisory Group LLC (AAG), and then continue to assist the AAG team in pursuing the claim against the Government of Mozambique. Further to the Company's announcement of 28 July 2023, the Board reports that it has received legal advice to allow the issuance of bonus preference shares to shareholders on the Company's share register at or after completion of the sale of IMM to AAG, subject to confirmation by the Company's shareholders.

Sareum Holdings* 90p £63.1m (SAR.L)
The clinical-stage biotechnology company developing next generation kinase inhibitors for autoimmune disease and cancer provides an update on financial and operation progress. An Equity Prepayment Facility of up to £5.0m has been agreed with RiverFort Global Opportunities PCC Ltd which provides funding towards the Phase 1 trial of SDC-1801. Phase 1a clinical trial of lead programme SDC-1801 is progressing well in Australia. Pending the progress of the single ascending dose stage and review of the results by the safety review committee, it is expected Part 2 of the trial, the multiple ascending dose, will commence in Q3 2023.

Tern 5.25p £20.5m (TERN.L)
The company focused on value creation from Internet of Things (IoT) technology businesses, announces its unaudited interim results for the six months to 30 June 2023. Net asset value (NAV) decreased to £22.2m (30 June 2022: £30.0m). This resulted in a reduction in net asset value per share from 6.4p as at 31 December 2022 to 5.7p as at 30 June 2023. Portfolio valuation of £21.8m as at 30 June 2023 (31 December 2022: £23.9m). The £2.1m reduction in the value of the portfolio during the Period was primarily due to the £1.2m value of Wyld Networks shares sold plus a fair value reduction of £2.0m, offset by a £1.1m investment in the portfolio. During the period, £0.5m initial drawdown on an up to £3m loan facility was obtained. It is the Board's intention that the Company will not invest in any companies or entities not already part of Tern's existing portfolio at least until such time as the Company has realised material value from its current portfolio.

Tungsten West 3.75p £7.5m (TUN.L)
The mining company focused on restarting production at the Hemerdon tungsten and tin mine in Devon, UK, announces that Nigel Widdowson has stepped down as a Director of the Company with immediate effect and resigned from his role as Chief Financial Officer. The Company has commenced a search and selection process to identify Nigel's replacement and Nigel has agreed to remain in his operating role as CFO for the duration of his notice period, to focus on ongoing funding and project financing activities, and to ensure a smooth transition for the incoming CFO when appointed.

16 August 2023
*A corporate client of Hybridan LLP or retained by Hybridan LLP for certain services
** Arranged by most recent first
*** Alphabetically arranged
**** Potential means Intention to Float (ITF) has been announced, or it is a rumour


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