Small Cap Feast

23rd May 2022

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What’s Cooking In The IPO Kitchen?

Psych Capital PLC, intends to list on the AQSE Growth Market. Psych operates the Psych Platform (a business-to-business networking platform), that is developing the Blossom Database pursuant to a third party licensing arrangement. The Company also has an investment of 426,000 common shares in Awakn, a Canadian NEO Exchange listed psychedelics research and clinical group, with operations in the UK and Europe. Psych is developing the Blossom Database pursuant to a third-party licensing arrangement, and Psych will work to develop an artificial intelligence platform that will provide biotech companies advanced clinical data that will be able to fast-track drug development and loop back the real-world data, in a centralised database, to provide feedback on molecules and associated therapy programmes. Due 30th May 2022.

EnSilica, intends to join AIM. EnSilica provides an end-to-end service for the design and supply of mixed signal ASICs, outsourcing certain elements such as the wafer fabrication of the manufacturing and packaging to third parties – otherwise known as a Fabless Semiconductor Model. ASICs are Integrated Circuits or semiconductor chips developed for a particular use or product rather than for general purpose usage. ASICs help differentiate products through optimised hardware making products smaller, faster, lower power, and/or more secure and can provide novel functionality, improve supply chain security and protect products from being copied). The Company has expertise in designing complex mixed signal ASICs, which combine digital and analogue functions onto a single chip. Raised £6m. Mkt Cap Approximately £37.6m. Due 24th May 2022.

Altona Rare Earths, the AQSE listed mining exploration Company focused on the evaluation, acquisition and development of Rare Earth Elements mining projects in Africa, intends to join the Main Market. Admission to trading of the Company’s Ordinary Shares on the AQSE Growth Market will be cancelled simultaneously with Admission. It is also proposed that on Admission, the Company will change its EPIC from AQSE:ANR to REE. The Company also seeks to raise funds to finance its current and future rare earths mining projects in Southern and Eastern Africa. Due May 2022.


Breakfast Buffet

Clontarf Energy 0.45p £10.7m (CLON.L)

The operational update on the drilling of the Sasanof-1 exploration well, and will issue further updates upon the completion of campaign milestones: The Valaris MS-1 rig has arrived at the Sasanof-1 exploration well location on the Australian North West Shelf. The MS-1 semi-submersible drilling rig completed the 190 Nautical Miles mobilisation safely and efficiently under tow from the support vessel, GO Spica. While under tow, the support vessel, Far Senator, continued logistical support operations, mobilising drilling mud, bulk equipment and supplies from the Port of Dampier. Primary anchors are now being run and will be followed by deployment of secondary and tertiary anchors; a total of 12 anchors will be set. Once anchoring is complete, spudding of the prospective Sasanof-1 well, targeting multi Tcf (Trillion Cubic Feet) of gas, will start with jetting of the 36″ conductor. This will be followed by drilling the 17-1/2″ intermediate hole section.

Creo Medical 99p £179.4m (CREO.L)

The medical device company focused on the emerging field of surgical endoscopy, announces that it has signed a long-term, multi-year collaboration agreement with Intuitive to optimise certain Creo products to be compatible with Intuitive’s robotic technology. Intuitive (Nasdaq: ISRG) is a global technology leader in minimally invasive care and the pioneer of robotic-assisted surgery. Along with the optimisation of Creo’s products, the Agreement provides a framework to allow joint clinical studies to be undertaken and includes a number of milestone payments to be made to Creo. Future royalty structures have also been agreed for any products which may be sold in the future. Creo is developing and commercialising a suite of electrosurgical medical devices, each enabled by the CROMA Advanced Energy platform and powered by Kamaptive, full-spectrum adaptive technology to help support surgical capability and patient outcomes.

Digitalbox 9.25p £10.9m (DBOX.L)

The mobile-first digital media business, which owns Entertainment Daily, The Daily Mash and The Tab, announced a new series of comedy, Late Night Mash. Nine episodes of the series have been commissioned, which will air on Dave later this year, with Rachel Parris replacing Nish Kumar as the host. Late Night Mash was Dave’s third-most watched programme of 2021, peaking at 600k viewers. Inspired by The Daily Mash, the UK’s leading news satire site, Late Night Mash is a continuation of the successful BAFTA-nominated show The Mash Report, which aired on BBC2 for four series. As the owner of The Daily Mash, Digitalbox licenses the brand’s content for use on television to the show’s producers, Zeppotron. Digitalbox CEO James Carter commented: “It is great to see the Late Night Mash return to Dave later this year, with an exciting new host. The last series was a great success and continues to show the strength of the Mash brand. We look forward to continuing our partnership with Zeppotron.”

Driver Group 33p £17.6m (DRV.L)

Provides an update on its operational review in the Middle East region, and in particular the UAE. Driver Group has agreed that 25 employees, primarily based in the region but including employees based in Malaysia who work on Middle East assignments, will leave the Company on 1 June 2022 and immediately join another entity in the region. The Company and the Counterparty have agreed that on leaving these employees will retain certain live project assignments, but the Counterparty will be subject to certain restrictive covenants in relation to continuing clients and employees of Driver Group. No exceptional employment termination costs will be payable by the Company in relation to the transfer. In addition, the Counterparty will assist in collection of approximately £3.5m of Driver Group’s current regional debtor book. The Counterparty has agreed to pay circa £2m in cash upfront to the Company as an advance payment in respect of the debtor book and, following the transfer, will also assist the Company in collection of the remaining debtors, which primarily attach to non-transferring employees. Following the transfer, Driver Group will retain a UAE headcount of 9 fee earners. The Company’s operations in Qatar and Oman are unaffected. The annualised reduction in the Company’s regional cost base is expected to exceed £3m per annum as against the £1m in annual cost savings identified within the Company’s trading update statement of 29 March 2022. Driver Group expects profit before tax for the 6 months ended 31 March in line with recent guidance of between £300k and £500k. The transfer reduces Driver Group’s working capital exposure on a forward-looking basis and it is already clear that the estimated net cash balances of £5.3m following receipt of the advance payment from the Counterparty will exceed the Company’s near term operational requirements. The Board is reviewing the alternatives for returning surplus cash to shareholders.

Futura Medical 30.7p £88.2m (FUM.L)

The pharmaceutical company developing a portfolio of innovative products based on its proprietary, transdermal DermaSys® drug delivery technology and currently focused on sexual health and pain, today announces it has entered into an exclusive licensing agreement with Cooper Consumer Health, a leading European independent self-care organisation, for the rights to commercialise the Company’s topical, gel-based Erectile Dysfunction treatment MED3000, throughout the European Economic Area, United Kingdom and Switzerland. Commercial highlights: Futura eligible to receive initial upfront payments, as well as undisclosed cumulative sales milestone payments; Cooper to pay an agreed price to Futura for the manufacture and supply of MED3000 by Futura’s third party contractors; Cooper will be responsible for all launch and marketing expenses; Initial licence agreement term of five years. This complies with EU competition law that limits deal terms to five years.

Ince Group 20p £17.4m (INCE.L)

The Board of Ince provides a trading update following the end of the financial year on 31 March 2022. As a result of a challenging last quarter of the financial year, overall revenue for FY22 was slightly below the prior year at approximately £97m. The reasons for the revenue shortfall were: the resurgence of Covid-19 impacting the UK market from the end of November 2021; the Covid-19 impact in Hong Kong and People’s Republic of China, particularly on offices in that region; the Ukraine conflict affecting global shipping; and a cyber attack at the end of FY22, when the Group was mid-way through IT system migrations in Asia. Together with some adverse movements in the overheads, reported pre-tax profits are expected to be short of market expectations. Adrian Biles, the Group’s CEO, added: “The final quarter of the 2021/22 financial year presented a number of challenges. It had been the Board’s intention to complete the Arden acquisition prior to the end of January 2022 but due to regulatory matters this was delayed until after the March 2022 balance sheet date. The UK’s Covid-19 lockdown in December 2021 and January 2022 also had a negative effect on financial performance, as did similar issues in Asia, and on top of this, the Group was extremely unfortunate in being victim to a cyber attack in March. The hurdles and timetable that were applied to the Arden acquisition caused much frustration. Now completed, we can move forward to pursue our vision and continue to grow our global multi-talented professional services group. I would like to take this opportunity to say that I am extremely proud of the way the business and its people have reacted to these challenges”.

Rockfire Resources 0.51p £5.5m (ROCK.L)

The gold and base metal exploration company, announced a maiden Mineral Resource estimate at its 100%-owned Molaoi zinc deposit in Greece. The Mineral Resource has surpassed all expectations and demonstrates the quality and potential of the project. The resource is reported in accordance with the Joint Ore Reserve Committee Australasian Code (2012) for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The inaugural JORC resource estimation for Molaoi has delivered an Inferred Mineral Resource of: 2.3m tonnes @ 11 % ZnEq. for 250,000 tonnes of ZnEq. This resource uses a 4% low-grade cut, with individual elemental grades of 9.4 % Zn, 1.7 % Pb and 47 g/t Ag. Molaoi currently contains 210,000 tonnes of zinc, 39,000 tonnes of lead, and 3.5m ounces of silver. Only 1,400 m of a potential strike extent of 7 km has been included in the resource and the resource remains open at depth and along strike. Multiple, parallel mineralised lodes, which are not included in the resource, are yet to be fully tested.

Tlou Energy 1.7p £12m (TLOU.L)

Construction activities for the transmission line to connect the Lesedi Power Project to the Botswana power grid have commenced. Zismo Engineering Pty Ltd have completed their preliminary work and bush clearing of the route is underway. Preliminary work included site handover, assembling the project team and resources, mobilisation of plant and equipment, line survey and design, pole structure modelling, and review and approval by Tlou’s Owners Engineer, Mott MacDonald. Zismo has also commenced procurement of equipment which includes manufacture of steel and wooden poles, cross-arms, line hardware, fittings, stay wire and assemblies. Equipment will be delivered in batches, with the first delivery of wooden poles expected next month. Zismo’s project site offices are set-up in Mogorosi village and a roving site camp will be located at convenient locations along the transmission line route.

W Resources SUSPENDED (WRES.L)

The tungsten, tin and gold mining company with assets in Spain and Portugal, announces that the Company has drawn down US$2m from the additional US$5.5m loan facility provided by funds and accounts managed by BlackRock Financial Management Inc. and / or its affiliates as announced on 2 March 2022. The additional funding will be used to fund working capital requirements at the La Parrilla mine in Spain. Production at the La Parrilla mine is still suspended as the prices for delivery of Liquefied Natural Gas remain in excess of EUR500k per month, which is far too high to allow production to be economically viable right now. The Company continues to look at alternatives to LNG with its investigation into solar power and also the electricity grid connection upgrade. The second tranche of US$2m has been received and the Loan Facility will, once fully drawn down, increase the total outstanding BlackRock facility to a principal of US$53m plus accrued interest of circa US$27m. Further to the announcement on 25 April 2022, which advised it is anticipated the Ordinary Shares will cease to be admitted to trading on AIM on or around 24 May 2022, the Company confirms it intends to provide an alternative trading platform for shareholders post the Company’s delisting from AIM and will provide an update on this in the coming days.

Zenova Group 13.5p £12.6m (ZED.L)

The provider of innovative fire safety and heat management technology and products, announced that Bells and Two Tones Fire and Rescue Limited, the leading fire safety provider within the UK TV and film industry, has assessed, approved, and placed its first order of Zenova fire safety products. B&TT, which is based at Pinewood Studios in the UK, expects to use the Zenova products on film sets and at filming locations to improve fire safety, reduce the risk of fire, and help make the UK TV and film industry the safest in the world. Commenting on the news, Tony Crawley, Chief Executive of Zenova Group PLC said: “TV and film is a multi-billion pound industry in the UK and invests a huge amount of time and money in the construction of TV and film sets at studios such as Pinewood. The use of Zenova’s innovative fire safety products on TV and film sets will help make them safer from the risk of fire and help protect the people who work on them. We believe, this represents a new, exciting, and significant opportunity for the Company’s innovative fire safety products.”

23 May 2022
*A corporate client of Hybridan LLP

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