Proposed £1.50 million Placing and Subscription

Light Science Technologies Holdings plc

("LSTH" or the "Company")

Proposed £1.50 million Placing and Subscription

Light Science Technologies Holdings plc (AIM: LST), the controlled environment agriculture ("CEA") technology and contract electronics manufacturing ("CEM") group, is pleased to announce that it has conditionally raised gross proceeds of £1.50 million through the proposed issue of 150,000,000 new ordinary shares of 1 penny each ("Ordinary Shares") at a price of 1 penny per share (the "Issue Price") (the "Fundraising").

The Fundraising consists of the placing of 107,750,000 new Ordinary Shares (the "Placing Shares") (the "Placing") as well as a private subscription for 42,250,000 new Ordinary Shares ("Subscription Shares") (the "Subscription"). Simon Deacon, Chief Executive Officer of the Company, has agreed to subscribe for 15,000,000 Subscription Shares.

The Placing has been conducted by Oberon Investments Limited ("Oberon Capital"). Of the 107,750,000 Placing Shares, 29,500,000 Placing Shares have been placed with a single investor utilising the Company's existing authority to allot shares for cash on a non-pre-emptive basis (the "Firm Placing Shares"). The Firm Placing Shares are expected to be admitted to trading on AIM at 8.00 a.m. on 5 April 2023 ("First Admission").

The issue of the balance of 78,250,000 Placing Shares (the "Conditional Placing Shares"), the 42,250,000 Subscription Shares and any new Ordinary Shares issued under the Retail Offer (together the "Conditional Shares") is conditional on the Company obtaining the requisite approvals from Shareholders at a forthcoming General Meeting (the "General Meeting"). The Conditional Shares are expected to be admitted to trading on AIM on or around 24 April 2023 ("Second Admission").

Retail offer

The Company intends to offer up to 50,000,000 new Ordinary Shares at the Issue Price (the "Retail Shares") via the Winterflood Retail Access platform (WRAP) to raise up to £0.5 million gross proceeds (the "Retail Offer"), to provide qualifying retail investors in the United Kingdom with an opportunity to participate alongside  the Fundraising. A further announcement will be made in due course regarding the Retail Offer and its terms. It is expected that the Retail Offer will launch at 8.00 a.m. on 5 April 2023 and will be open for applications up to 5.00 p.m. on 11 April 2023. The result of the Retail Offer is expected to be announced by the Company on or around 13 April 2023. For the avoidance of doubt, the Retail Offer is in addition to the Fundraising and will be conditional upon, amongst other things, Second Admission becoming effective. The Retail Offer may not be fully subscribed.

Use of proceeds

The gross proceeds of the Fundraising are expected to be £1.50 million, which will be predominantly used for product development and intellectual property protection within the Company's CEA division, as well as for general working capital purposes, including funding costs associated with the Fundraising.

Circular

A circular relating to the Fundraising (the "Circular") will be posted to Shareholders shortly, and a further announcement will be made in this regard.  The Circular will contain a notice convening the General Meeting to approve certain matters relating to the Fundraising (excluding the Firm Placing Shares).  The General Meeting is expected to be held at 1 Lowman Way, Hilton, Derby, England, DE65 5LJ at 11.00 a.m. on 21 April 2023. The Circular will be made available to view on the Company's website (www.lightsciencetech.com). 

Related Party Transaction

Simon Deacon's subscription for 15,000,000 Subscription Shares constitutes a related party transaction for the purposes of the AIM Rules, as Mr Deacon is a Director and Substantial Shareholder of the Company. The directors independent of such subscription, being Andrew Hempsall, Jim Snooks, Rob Naylor, Lisa Clement, Rory James-Duff and Myles Halley, having consulted with the Company's nominated adviser, Strand Hanson Limited, consider that the terms of Mr Deacon's subscription to be fair and reasonable insofar as Shareholders are concerned.

For further information, please contact:

This Announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended).

This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notices" section of this Announcement.

About Light Science Technologies Holdings plc (www.lightsciencetechnologiesholdings.com)

Light Science Technologies Holdings plc is the holding company of the Group's controlled environment agriculture ("CEA") division, Light Science Technologies Ltd ("Light Science Technologies"), and its contract electronics manufacturing ("CEM") division, UK Circuits and Electronics Solutions Limited ("UK Circuits").

Controlled Environment Agriculture

Light Science Technologies was founded in 2019 and is the Company's grow lights and sensor technology business, providing bespoke recipes and technologies tailored to customers' needs, with key targets including indoor, vertical, glasshouses, polytunnels and medicinal farming markets. The all-in-one CEA solution will include analysing customers' crop growing requirements to provide bespoke, low-energy and sustainable equipment.

Market drivers include: food and water shortages in many parts of the world, growing global population, UK and other government policy encouraging sustainable and efficient growth methods, increased scrutiny of the effect of food production on climate change and the continuing transition away from processed foods. 

sensorGROW

sensorGROW was launched in June 2022 and its technology will enable farmers to monitor the following key air zone growing factors in real-time: carbon dioxide levels, humidity, light, oxygen - and in the future: air speed, plant disease, soil, temperature and water pH levels. By monitoring these key growing factors, farmers can save money through better management of resources: water, nutrients, fertilisers and energy - while increasing yields and producing healthier crops.

nurturGROW

nurturGROW is a sustainable grow lighting product range, offering an innovative, high-performance and cost-effective solution for indoor farming, covering greenhouses, vertical farming, polytunnels and medicinal plants.

Created with four core component parts, the nurturGROW range is made of high quality, durable materials to give growers the ideal balance between strength and optimal performance, minimising the amount of materials needed to drastically cut down on waste and reduce carbon footprint.

Contract Electronics Manufacturing

UK Circuits is the Company's CEM focussed division, profit making with strong revenues. The Group designs, procures, and manufactures high-quality CEM products, specialising in Printed Circuit Boards, which are used in a range of sectors including audio, automotive, electronics, gas detection, lighting, pest control, telecommunications and, more recently, the CEA market.

Further information on the Fundraising

Use of proceeds

The gross proceeds of the Fundraising are expected to be £1.50 million, which will be predominantly used for product development and intellectual property protection within the Company's CEA division, as well as for general working capital purposes, including funding costs associated with the Fundraising.

The Company will further rationalise its working capital requirements by seeking to reduce the costs of the Board and related salaries, offsetting purchasing cycles with customer deposits and reducing other costs within the business. Further updates will be made as and when appropriate.

Details of the Fundraising

The Placing and Subscription have conditionally raised, in aggregate, £1.50 million before expenses through the issue of, in aggregate, 150,000,000 new Ordinary Shares at the Issue Price.

The Issue Price represents a discount of approximately 73 per cent. to the closing middle market price of 3.75 pence per Ordinary Share on 3 April 2023, being the last business day prior to the announcement of the Fundraising. The issue and allotment of the Conditional Shares is subject to the passing of the Resolutions at the General Meeting.

The Company has conditionally placed the Firm Placing Shares using the Directors' existing authority to allot shares for cash on a non-pre-emptive basis as granted at LSTH's most recent AGM held on 19 May 2022.  The placing of the Firm Placing Shares is expected to raise, in aggregate, gross proceeds of £295,000 and is conditional only on First Admission, which is currently expected to occur at 8.00 a.m. on 5 April 2023. Following First Admission, the Firm Placing Shares will represent approximately 14.5 per cent. of the Company's then enlarged issued ordinary share capital, and they will be eligible to vote on the Resolutions.

As the Company will have utilised most of the Directors' existing authority to allot shares for cash on a non pre-emptive basis, following First Admission, the Proposed Placing of the Conditional Placing Shares and the Subscription for the Subscription Shares, to raise, in aggregate, approximately a further £1.21 million gross, are conditional upon, amongst other things, the passing of the Resolutions at the General Meeting and Second Admission occurring on or before 24 April 2023 (or such later date as Oberon Capital and the Company may agree, not being later than 15 May 2023). Following Second Admission, the Conditional Placing Shares and the Subscription Shares will represent approximately 37.2 per cent. of the Company's then enlarged issued ordinary share capital.

The Placing is being conducted by way of a non pre-emptive share issue. The Directors believe that this is the most cost effective method to raise funds, avoiding the significant costs that a pre-emptive issue, such as an open offer, can incur. The Placing Shares and Subscription Shares represent approximately 46.3 per cent. of the Enlarged Share Capital. The Placing Shares and the Subscription Shares will, upon their admission to trading on AIM becoming effective in accordance with the AIM Rules, be credited as fully paid and will have the same rights in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared. The Placing and Subscription are conditional, amongst other things, upon:

(i)            the approval of the Resolutions at the General Meeting (in respect of the Proposed Placing and Subscription);

(ii)           the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms; and

(iii)          Second Admission.

The Placing is to be effected on behalf of the Company by Oberon Capital, under the terms of the Placing Agreement. As noted above, completion of the Placing is subject to certain conditions including, in respect of the Proposed Placing only, the passing of the Resolutions. Under the terms of the Placing Agreement, the Company has agreed to pay Oberon Capital a commission fee in consideration for its broking services in respect of the Placing. The Placing is not being underwritten. Up to £80,000 of any demand in the Retail Offer, at the Company's discretion, may be used to scale back Intuitive Investments Group plc's investment of £230,000 in the Subscription.

The Placing Agreement contains certain representations and warranties given by the Company with respect to its business and certain matters connected with the Placing.  The Placing may be terminated by Oberon Capital for reasons including, amongst other things, a material breach by the Company of the terms of the Placing Agreement or the warranties contained in it or there being a material adverse change in the condition of the Company.

Admission and total voting rights

Applications to the London Stock Exchange have been made for the Firm Placing Shares, and will be made for the Conditional Shares, to be admitted to trading on AIM and it is currently expected that trading in the Firm Placing Shares will commence at 8.00 a.m. on 5 April 2023 and the Conditional Shares will commence at 8.00 a.m. on or around 24 April 2023.

Following First Admission the Company will have 203,650,000 Ordinary Shares in issue. Following the Second Admission, the Company will have 324,150,000 Ordinary Shares in issue, which may increase depending on any demand in the Retail Offer. Since the Company currently holds no shares in treasury, the total number of voting rights in the Company will therefore be 203,650,000 and 324,150,000 on 5 April 2023 and 24 April 2023, respectively, or such later date as may be notified. These figures may therefore be used by Shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

Director Subscription

Disapplication of pre-emption rights and share capital authorities

As mentioned above, the Directors do not currently have sufficient authority in place to undertake the proposed issue of the Conditional Shares. Therefore, the Directors are seeking a specific authority and  disapplication of the statutory pre-emption rights to allot up to 407.3 million new Ordinary Shares (representing 200 per cent. of the Ordinary Shares after the issue of the Firm Placing Shares on 5 April 2023) to ensure that the Board has sufficient authority:

(i) to allot and issue 78,250,000 Conditional Placing Shares and 42,250,000 Subscription Shares; and

(ii) to have an additional headroom of 286,800,000 new Ordinary Shares (representing approximately 88.5 per cent. of the Enlarged Share Capital following the Fundraising) to allot and issue equity securities under the Retail Offer and more generally without recourse to the Shareholders to afford the Board flexibility from time to time as it deems appropriate.

This additional authority will enable the Directors to carry out the Company's objectives and will enable the Directors to issue small numbers, if required, of new options and warrants and to raise additional working capital without having to incur the time delay and cost of convening a further general meeting.

This authority will be in substitution for any existing unused authority and will expire at the conclusion of the next annual general meeting of the Company.

Notice of General Meeting

A notice convening a General Meeting to be held at 1 Lowman Way, Hilton, Derby, England, DE65 5LJ at 11.00 a.m. on 21 April 2023 will be set out at the end of the Circular.

The Resolutions to be proposed at the General Meeting are as follows:

1.            an ordinary resolution to authorise the Directors, for the purpose of section 551 of the Act, to (i) allot Ordinary Shares up to an aggregate nominal value of £1,205,000 in connection with the Fundraising and (ii) otherwise to allot Ordinary Shares (or grant rights to subscribe for or convert any security into Ordinary Shares) up to an aggregate nominal value of £2,868,000; and

2.            a special resolution to empower the Directors, for the purpose of section 570 of the Act to disapply pre-emption rights to allot Ordinary Shares pursuant to the authority conferred by the resolution described at 1 above.

For an ordinary resolution to be passed, more than half of the votes cast must be in favour of the resolution.  For a special resolution to be passed, at least three-quarters of the votes cast must be in favour of the resolution.

Shareholders should be aware that the issue of the Conditional Placing Shares and the Subscription Shares cannot take place if the Resolutions are not passed at the General Meeting and Shareholders are strongly encouraged to vote in favour of both Resolutions.

Recommendation

The Directors believe that the Fundraising and the Resolutions are in the best interests of the Company and Shareholders taken as a whole. The Directors therefore unanimously recommend that Shareholders vote in favour of the Resolutions, as they intend to do in respect of their own beneficial and other connected interests, amounting in aggregate to 85,115,655 existing Ordinary Shares which represents approximately 48.9 per cent. of the Company's existing issued share capital.

Expected Timetable of Principal Events

Important Notices

Oberon Capital is authorised and regulated by the Financial Conduct Authority (the "FCA") in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Placing and will not regard anyone (including any Placees) (whether or not a recipient of this Announcement) as a client, and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other matters referred to in this Announcement.

Neither this Announcement, nor any copy of it, nor the information contained in it, is for publication, release, transmission, distribution or forwarding, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction in which publication, release or distribution would be unlawful (or to any persons in any of those jurisdictions). This Announcement is for information purposes only and does not constitute an offer to sell or issue, or the solicitation of an offer to buy, acquire or subscribe for shares in the capital of the Company in the United States, Australia, Canada, Japan or the Republic of South Africa or any other state or jurisdiction (or to any persons in any of those jurisdictions). This Announcement has not been approved by the London Stock Exchange. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions.

The Placing Shares have not been, and will not be, registered under the US Securities Act or with any securities regulatory authority or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, pledged, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with the securities laws of any state or other jurisdiction of the United States. No public offering of securities is being made in the United States. The Placing Shares have not been approved, disapproved or recommended by the U.S. Securities and Exchange Commission, any state securities commission in the United States or any other U.S. regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Placing Shares. Subject to certain exceptions, the securities referred to herein may not be offered or sold in the United States, Australia, Canada, Japan or the Republic of South Africa or to, or for the account or benefit of, any national, resident or citizen of the United States, Australia, Canada, Japan or the Republic of South Africa.

No public offering of the Placing Shares and Subscription Shares is being made in the United States, United Kingdom or elsewhere. All offers of the Placing Shares and Subscription Shares will be made pursuant to an exemption from the requirement to produce a prospectus under the EU Prospectus Regulation or the UK Prospectus Regulation.

This Announcement is not being distributed by, nor has it been approved for the purposes of section 21 of FSMA by, a person authorised under FSMA. This Announcement is being distributed and communicated to persons in the United Kingdom only in circumstances in which section 21(1) of FSMA does not apply.

The distribution of this Announcement, the Placing and/or the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or its affiliates that would permit an offering of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to the Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company to inform themselves about, and to observe, such restrictions.

This Announcement may contain and the Company may make verbal statements containing "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company. As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. These forward-looking statements reflect the Company's judgment at the date of this Announcement and are not intended to give any assurance as to future results and the Company cautions that its actual results of operations and financial condition, and the development of the industry in which it operates, may differ materially from those made in or suggested by the forward-looking statements contained in this Announcement and/or information incorporated by reference into this Announcement. The information contained in this Announcement is subject to change without notice and except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates, supplements or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statements are based, except where required to do so under applicable law.

No statement in this Announcement is intended to be a profit forecast or estimate, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The Placing Shares to be issued or sold pursuant to the Placing and the Subscription Shares will not be admitted to trading on any stock exchange other than AIM.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this Announcement.

Appendix I

Definitions

The following definitions apply throughout this Announcement, unless otherwise stated or the context requires otherwise: