30 December 2021

Vela Technologies plc

("Vela" or the "Company")

Notice of Annual General Meeting

Proposed 1 for 50 Share Consolidation

Proposed change to investing policy

The Board of Vela (AIM: VELA), an AIM quoted investing company focused on early stage and pre-IPO disruptive technology investments, announces that the Company will today post a circular to shareholders containing a Notice of Annual General Meeting ("AGM").

The Company's AGM will be held at 12.00 p.m. on 24 January 2022 at 15 Victoria Mews, Mill Field Road, Cottingley Business Park, Bingley, West Yorkshire BD16 1PY.

Full details of the proposed resolutions are set out in the circular being sent to shareholders in a letter from the Chairman, an extract of which is set out below as well as a timetable of principal events. The circular will also be made available shortly on the Company's website at  http://www.velatechplc.com/.

The resolutions being proposed at the AGM include a resolution relating to a proposed 1 for 50 share consolidation of the existing ordinary share capital of the Company and a resolution to approve the adoption by the Company of a revised investing policy. The proposed new investing policy is set out in full below.

There are no longer any Covid-19 related legal prohibitions on attending the meeting in person.  However, in light of the continuing impact of Covid-19, current government guidance, and recognising that some members and proxies may still be reluctant to attend in person, (i) the vote on each of the resolutions put to the meeting will be taken on a poll; and (ii) shareholders are strongly advised to appoint the chairman of the meeting as their proxy. The Company will keep the current Covid situation and any change to current government guidance under review.  If arrangements for the meeting need to be changed, a market announcement will be made through a regulatory information service.

Letter from the Chairman of Vela

1.       Introduction

The accounts for the year ended 31 March 2021 were posted to shareholders on 30 September 2021.  This letter sets out the notice for the AGM, which will be held at 15 Victoria Mews, Mill Field Road, Cottingley Business Park, Bingley, West Yorkshire BD16 1PY at 12 noon on 24 January 2022.

2.       Resolutions at the Annual General Meeting

Information relating to resolutions to be proposed at the AGM is set out below.  The notice of AGM is set out at the end of the letter sent to shareholders.

The following resolutions will be proposed at the AGM:

(a)      Resolution 1:  to approve the annual report and accounts.  The Directors are required to lay before the Company at the AGM the accounts of the Company for the financial year ended 31 March 2021, the report of the Directors and the report of the Company's auditors on those accounts.

(b)      Resolution 2:  to approve the re-appointment of Murray Harcourt Limited as auditors of the Company.  The Company is required to appoint auditors at each general meeting at which accounts are laid, to hold office until the next such meeting.

(c)      Resolution 3:  to authorise the Directors to approve the remuneration of the auditors.

(d)      Resolution 4:  to approve the re-appointment of Brent Fitzpatrick as a Director.  Under the Articles of Association, Directors must retire and submit themselves for re-election at the annual general meeting if they have not done so at either of the two previous annual general meetings.

(e)      Resolution 5:  to approve the re-appointment of Emma Wilson as a Director.  Emma joined the Board on 1 September 2021.  Under the Articles of Association, Directors must be re-appointed at the first annual general meeting following their appointment.

(f)      Resolution 6:  to approve a consolidation of every 50 ordinary shares of 0.01p per share into one new ordinary share of 0.5p per share.  There are currently 16,252,335,184 ordinary shares of 0.01p ("Existing Ordinary Shares") in issue.  The Directors consider that it is in the best interests of the Company's development to have a more manageable number of issued ordinary shares.  In order to ensure the issued share capital is divisible by 50, 16 ordinary shares will be issued at par prior to the consolidation record date of 6:00 p.m. on 24 January 2022 ("Record Date").  The consolidation will result in the creation of 325,046,704 new ordinary shares of 0.5p each ("New Ordinary Shares").  As all the Existing Ordinary Shares are proposed to be consolidated, the proportion of the issued ordinary shareholdings in the Company held by each Shareholder immediately before and after the Consolidation will, except for fractional entitlements, remain unchanged.

Shareholders with a holding of more than 50 Existing Ordinary Shares, but which is not exactly divisible by 50, will have their holding rounded down to the nearest whole number of New Ordinary Shares.  Any shareholders holding fewer than 50 Existing Ordinary Shares at the Record Date will cease to be a shareholder of the Company.

The overall market capitalisation of the Company should not change as a result of the consolidation, though the market price of each ordinary share is expected to increase from approximately 0.045p (the price at the close of business on 29 December 2021) to approximately 2.25p.

Disposal of fractional entitlements

Fractional entitlements to new ordinary shares arising from the consolidation will be aggregated and will be sold in the market for the best price reasonably obtainable on behalf of those Shareholders entitled to the fractions.  As the net proceeds of sale will amount to less than £3 for any entitled shareholder, they will (in accordance with usual market practice) be retained by the Company.

Admission of the new ordinary shares

Application will be made for the New Ordinary Shares to be admitted to trading on AIM in place of the Existing Ordinary Shares.  If approved at the AGM, the Record Date for the consolidation will be the close of business on 24 January 2022.  It is expected that Admission will become effective and that dealings in the New Ordinary Shares will commence on 25 January 2022.

ISIN and SEDOL codes

Following the consolidation, the ISIN code for the New Ordinary Shares will be GB00BMG9C974 and the SEDOL code for the New Ordinary Shares will be BMG9C974.

Share Certificates

New share certificates in relation to the New Ordinary Shares will be despatched to Shareholders who hold their ordinary shares in certificated form in the week commencing 31 January 2022.  The new share certificates will be sent by first-class post, at the risk of the holders of relevant new ordinary shares, to the registered address of that holder or, in the case of joint holders, to the one whose name appears first in the register of members.  Following the consolidation, existing ordinary share certificates will cease to be valid.

Uncertificated shares

Shareholders who hold existing ordinary shares in uncertificated form will have such shares disabled in their CREST accounts on the Record Date, and their CREST accounts will be credited with the new ordinary shares following Admission, which is expected to take place on 25 January 2022.

          Adjustment of warrants and options

Following the consolidation, the entitlements to ordinary shares of holders of outstanding warrants and options will be adjusted to reflect the consolidation.

With effect from the Record Date, the number of ordinary shares subject to outstanding warrants or options will be divided by 50, and the exercise price per share will be multiplied by 50.  The aggregate amount to be subscribed upon an exercise of warrants or options will remain the same, and all other terms of the warrants and options will remain unchanged.

(g)      Resolutions 7 and 8:  to approve the renewal of general authorities to allot shares, which expire at the AGM, for the purpose of (i) granting the Directors general authority to allot up to a maximum nominal amount of £400,000, representing approximately 24.6% of the current issued ordinary share capital; and (ii) disapplying pre-emption rights in connection with the allotment of up to a maximum nominal amount of £400,000, representing approximately 24.6% of the current issued ordinary share capital.

(h)      Resolution 9:  to approve the adoption by the Company of a revised investing policy.  The revised investing policy is set out in full in the resolution.  It replaces an investing policy adopted in January 2013 at the time when the Company first became classified as an investing company pursuant to the AIM Rules for Companies.  The Company has therefore had nine years of experience operating as an investing company and, most relevantly, in August 2020 underwent a reorganisation which including the disposal of certain prior held investments.  Moreover, the current investing policy is expressed in the context of the aspirations of the Company in 2013 and is therefore expressed largely in the future tense.  The revised investing policy set out in the AGM notice takes account both of the investing history of Vela and of developments in the economic environment in the last nine years.  The overarching aim to invest in disruptive technologies remains unchanged.

3.       Action to be taken

A form of proxy for use by Shareholders in connection with the AGM accompanies the circular sent to shareholders.  The form of proxy should be completed in accordance with the instructions printed thereon and returned to the Company's registrars, Neville Registrars Limited, Neville House, Steelpark Road, Halesowen B62 8HD as soon as possible but, in any event, so as to arrive by 12 noon on 20 January 2022.

4.       Recommendation

The Directors consider the Resolutions to be proposed at the General Meeting to be in the best interests of the Company and its Shareholders as a whole and accordingly recommend that Shareholders vote in favour of the Resolutions, as I intend to do so in respect of my shareholding of 1,500,000 Ordinary Shares (equivalent to approximately 0.01 per cent of the existing issued Ordinary Shares).

Yours faithfully

Brent Fitzpatrick

Non-Executive Chairman

APPENDIX A- PROPOSED NEW INVESTING POLICY

The investing policy of Vela Technologies plc is focused on enterprises using disruptive technology either to gain an advantage in an existing market or to create a new market.  Within that over-arching strategy, Vela applies the following criteria in reaching an investment decision.

Stage of development

Usually (but not necessarily) investee businesses will have been operating for a number of years.  They may be established businesses that are developing a new line or technology, or they may have been formed specifically in order to exploit a particular product which is expected to disrupt the market or create a completely new one.  The investee business may not yet have achieved profitability.

Geographical focus

Investee companies will usually be based in the UK (including the Channel Islands) or derive a material proportion of their business from the UK.  Conversely, investee companies may derive a significant proportion of their income from overseas but be based in the UK.  It is unlikely that Vela would invest in a business headquartered overseas and deriving a majority of its business from outside the UK.

Sector focus

Disruptive technology is not confined to the pure technology sector, but may be found in IT software businesses, including SaaS (software as a service); or in 'bricks and mortar' businesses which use IT in innovative ways in order to disrupt the sector in which they operate.

The definition of disruptive may also extend to pharmaceutical businesses where, for example, a new drug may have the potential to make a beneficial impact on the treatment of medical conditions; as well as to companies operating in the wellness and life sciences sectors.

Corporate status

Vela aims to have a mix of private and publicly-traded investments.

The private companies will generally need to have ambitions for a public listing in a relatively short time period (i.e. within two years of investment); or, failing that, a plan to find a buyer for the business or to scale up the business (e.g. by merging with or acquiring another or by raising material additional equity funding) within a similar timescale.

Investments in public companies will usually be made as part of a development capital financing designed to accelerate the growth of the business.

Investment instruments

Vela will generally expect to make investments in the form of equity.  It will also consider investing in loan stock which is convertible (usually at Vela's option) into equity shares.  In certain cases (e.g. a new drug which may be one of a number being developed by the promoter) it may be appropriate for Vela to take an interest in the future cash flows from that drug.  Vela's investments will rarely be in the form of pure debt.

Investments will usually be in the form of cash but may also take the form of an issue of new Vela shares.

In the case of equity investments, the Directors intend to take minority positions and investments will therefore typically be of a passive nature.

Holding period

Vela invests with the intention of realising its investment within three years of investment.  Investments can be made at the pre-IPO stage and in anticipation of a public listing for the shares, often within a few months.  In such cases the whole or part of the investment may be sold on admission of the investee company's shares to trading on a stock exchange.

Investments in companies whose shares are not traded on a public exchange are, of course, inherently more difficult to realise; and so, although there may be an intention to list the shares or to sell the business, Vela may need to hold an investment in a private company for a longer time period.

The Directors intend to re-invest the proceeds of disposals in accordance with the Company's investing policy unless, at the relevant time, the Directors believe that there are no suitable investment opportunities in which case the Directors will consider returning the proceeds to shareholders in a tax efficient manner.

Number and size of investments

The number of projects in which the Company may invest will be limited by the capacity of Vela's investment team to appraise and monitor them.  Similarly, the monetary quantum of each investment is a factor of the funds available to Vela at the point of investment.  Both the number and size of investments will therefore vary according to Vela's human and monetary resources.  Each of these will be referred to in Vela's annual and interim reports.  As investments are made and new promising investment opportunities arise, further funding of the Company may be required to enable Vela to make further investments.

The Company will pursue a balanced portfolio of an even mixture of early stage, pre-liquidity event and liquid investments.  While the aim is to have the portfolio split fairly evenly between the different stages of liquidity, there will be no set criteria for the proportion of the portfolio which will be represented by each investment type.

Equity interests will be minority in nature and rarely exceed 10% of an investee's issued share capital.

Opportunistic investments

As a result of Vela's network of contacts in the financial markets, it occasionally receives invitations to invest in businesses which do not meet the core criteria of the investing policy.  Nevertheless, if the Board considers that there is an opportunity to benefit by investing in such a proposition and thus allowing its shareholders access to investments in which they may otherwise not be able to participate, it may consider doing so.  Such investments will be limited to no more than 5% of the Company's net asset value and would usually be made on the strict understanding and expectation that any such investment would be held for the short term only.

Investment appraisal

In order to mitigate investment risk, the Directors will carry out a thorough appraisal of each potential investment.  This appraisal may include site visits, analysis of financial, legal and operational aspects of each investment opportunity, meetings with management, risk analysis, review of corporate governance and anti-corruption procedures and, where the Directors see fit, the seeking of third party expert opinions and valuation reports.  Vela will not have a separate investment manager.

Nature of returns

It is anticipated that returns to Vela will be delivered through a combination of capital gain, dividend income and interest on convertible loans.

Where Vela's expected percentage holding in investee businesses or the monetary quantum of its investment justifies it Vela may seek or be offered a position on the investee's board of directors.  In those instances where this is applicable, the fee earned from any such post held by a director or employee of Vela would be payable to Vela and form part of the return earned by Vela on its investment.

Cash held by the Company pending investment, reinvestment or distribution will be managed by the Company and placed on deposit with banks so as to protect the capital value of the Company's cash assets.  The Company may, where appropriate, enter into agreements or contracts in order to hedge against interest rate or currency risks.

Review of investing policy

The Directors will keep the investing policy under continuous review and will make and announce any non-material changes or variations as may be appropriate.  Any material change or variation to the investing policy will be subject to the prior approval of shareholders."

APPENDIX B- EXPECTED TIMETABLE OF EVENTS

Times stated above refer to UK time.

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About Vela Technologies 

Vela Technologies plc (AIM: VELA) is an investing company focused on early stage and pre-IPO long term disruptive technology investments. Vela's investee companies have either developed ways of utilising technology or are developing technology with a view to disrupting the businesses or sector in which they operate. Vela Technologies will also invest in already-listed companies where valuations offer additional opportunities.