Proposed Placing to raise £1.5m and Notice of GM

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310. MARKET SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS PREVIOUSLY BECAME AWARE OF SUCH INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND ALL SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

23 February 2021

Vela Technologies plc

("Vela" or "the Company")

Proposed Placing to raise £1.5 million

Notice of General Meeting

The Board of Vela (AIM: VELA) announces that, it has conditionally raised £1.5 million via Peterhouse Capital by way of a placing ("Placing") of 1,666,666,667 new ordinary shares in the Company ("Placing Shares") at a price of 0.09 pence per new Ordinary Share (the "Placing Price"). The Placing is subject, inter alia, to shareholder approval at a general meeting of the Company the ("General Meeting").

Placing Highlights: 

·    The Company has conditionally raised £1.5 million (before expenses) through a conditional placing of 1,666,666,667 Placing Shares at 0.09 pence per Placing Share.

·      The Placing Price represents a premium of approximately 2.9% to the closing mid-market price of 0.0875 pence per ordinary share on 22 February 2021.

·      The Company will issue 833,333,340 warrants to subscribe for new ordinary shares in the Company (the "Placing Warrants") at a price of 0.125 pence per Ordinary Share exercisable for a period of 18 months from Admission (as defined below), resulting in each subscriber in the Placing being issued with 1 Placing Warrant for 2 Placing Shares subscribed for.

·      The net proceeds of the Placing will be used to take advantage of investment opportunities and for general working capital purposes.  

·      The Placing is subject to shareholder approval at the General Meeting on 11 March 2021. If approved, the Placing Shares are expected to be admitted to trading on AIM on 16 March 2021 ("Admission").

·      The New Ordinary Shares will represent approximately 12.1% of the share capital of the Company as enlarged by the Placing. 

The Company has a strong pipeline of new investment opportunities and the Board believes the net proceeds from the Placing, estimated to be £1.375 million, will enable the Company to be able to take advantage of new investment opportunities as and when they arise. As at the date of this announcement, the Company holds investments in nine investee companies and has cash resources of c.£1.4 million.

Further information on the Company and the background to the Placing is set out below in the extracts from the shareholder circular which will be posted to shareholders later today (the "Circular").

Proposed Board Changes

The Company announced on 31 July 2020, that it intended to appoint a further director to the Board by 31 December 2020. The Company is in the advanced stages of appointing a Non-Executive Director to the Board. The proposed board appointment remains subject to approval from the Company's nominated adviser and completion of the customary due diligence process to satisfy itself as to board composition and independence and the suitability of a proposed director for the purposes of the AIM Rules for Nominated Advisers.  Further announcements will be made at the appropriate time with regards to the proposed board appointment.

Notice of General Meeting and Shareholder Circular

The Placing is conditional, inter alia, on the approval by shareholders of resolutions to be proposed at the General Meeting to provide authority to the Directors to allot new ordinary shares in the Company otherwise than on a pre-emptive basis. The General Meeting will be held at 15 Victoria Mews, Mill Field Road, Cottingley Business Park, Bingley BD16 1PY at 11.00 a.m. on 11 March 2021. The Circular containing the Notice of General Meeting will be posted to shareholders later today and will be made available on the Company's website shortly at www.velatechplc.com.

Due to Covid-19 and related legal restrictions and guidance from government authorities, shareholders may not physically attend the meeting, and will not be permitted access to the venue on the day of the meeting.  Shareholders are strongly encouraged to participate in the meeting by voting by proxy ahead of the meeting. Only the formal business set out in the Notice of General Meeting will be considered at the meeting.

The above summary should be read in conjunction with the full text of this announcement and the Circular, extracts from which are set out below.  All capitalised terms used throughout this announcement shall have the meanings given to such terms in the Definitions section of this announcement and as defined in the Circular unless otherwise defined herein.

For further information, please contact:

About Vela Technologies plc 

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.

Extracts from the Circular

(References to paragraphs below refer to the relevant paragraphs of the Circular. References to 'this document' refer to the Circular.)

1.    Introduction

As announced on 23 February 2021, the Company has carried out a conditional placing of 1,666,666,667 new ordinary shares to raise £1,500,000 before expenses, at a placing price of 0.09p per share.  The net proceeds of the Placing will be used by the Company to take advantage of investment opportunities and for general working capital purposes.

833,333,340 Placing Warrants over new Ordinary Shares exercisable at 0.125p until 16 September 2022 are to be granted to the subscribers for the Placing Shares, subject to the approval of the Resolutions, on a pro rata basis to the size of their subscriptions in the Placing.

Taking into account the need to reserve authorities to allot securities to satisfy any future exercise of existing warrants, the existing authorities to allot securities are insufficient for the purposes of the Placing and to provide headroom for any future exercise of the Placing Warrants. Accordingly, it is proposed to increase the Company's authorities to allot securities for the purposes of the Placing, and to provide sufficient headroom for future share issues, including the potential future exercise of the Placing Warrants.

Therefore, the issue and allotment of the Placing Shares and the issue of the Placing Warrants is conditional, inter alia, upon the Company obtaining approval of Shareholders of resolutions to be proposed at the General Meeting, to provide sufficient authority to enable allot relevant securities and disapply statutory pre-emption rights which would otherwise apply to the allotment of the Placing Shares and issue of the Placing Warrants.

The purpose of this document is to set out details of the Placing and of the Resolutions to be proposed at the General Meeting, notice of which is set out at the end of this document.

2.    Background to and reasons for the Placing

The Company is an AIM quoted investing company focused on early stage and pre-IPO long term disruptive technology investments. The Company also invests in already-listed companies where valuations offer additional opportunities.

In August 2020, the Company disposed of certain assets and investments and recapitalised itself through a placing to raise £1,000,000 and a conversion of £550,000 of bonds into equity.  Upon completion of this transaction, the Company retained interests in five investments (being North Peak Resources, WeShop, BlockchainK2 Corp., Revolve Performance and Disruptive Tech Limited).

The Company has subsequently made a number of new investments deploying a total of £1.88 million in cash across five investments covering a range of technology sub-sectors and in accordance with the Company's investing policy. As announced on 22 January 2021, the Company disposed of its investment in Blockchain K2 Corp.  Most recently the Company has invested £150,000 in Kanabo Group plc, a company that sells and develops THC-free retail cannabidiol (CBD) products in the primary markets of the UK and Germany, and in December 2020 the Company announced an investment of £200,000 in Cornerstone FS plc, a cloud-based foreign exchange and international payments platform. 

As at the date of this document, the Company holds investments in nine investee companies and its cash resources are c.£1.37 million.  In addition, the Company has, as at the date of this document, entered into a conditional agreement to invest £350,000 from its existing cash resources in a funding round for an unquoted hydrogen fuel cell business.  Vela's potential investment is in accordance with its investing policy and remains subject to the overall funding round completing which is expected to occur shortly. Should the funding round not complete on the terms envisaged then Vela's investment will not proceed. A further announcement on this prospective investment will be made by Vela at the appropriate time. 

The Company has a strong pipeline of new investment opportunities and the Board believes the additional funds to be raised from the Placing will enable the Company to be able to take advantage of new opportunities as and when they arise.

3.    Details of the Placing

As announced on 23 February 2021, Peterhouse has conditionally raised £1,500,000 before expenses via the issue of 1,666,666,667 Placing Shares, representing approximately 12.1 per cent. of the Enlarged Share Capital.  The Placing Price represents a premium of approximately 2.9 per cent. to the Company's middle market closing share price of 0.0875p on 22 February 2021, being the last practicable date prior to the date of this document.

The Placing proceeds will be used to enable the Company to take advantage of investment opportunities and for general working capital purposes.

Application will be made to London Stock Exchange for the Placing Shares to be admitted to trading on AIM and it is expected that Admission will become effective and that dealings in the Placing Shares will commence on AIM at 8.00 a.m. on 16 March 2021.  Assuming no existing warrants are exercised prior to Admission, the Placing Shares will represent approximately 12.1 per cent of the ordinary share capital of the Company in issue immediately following Admission.

The Placing Shares will be issued credited as fully paid and will rank pari passu in all respects with the Ordinary Shares in issue from time to time, including the right to receive all dividends and other distributions declared on or after the date on which they are issued.

In addition, 833,333,340 Placing Warrants to subscribe for new Ordinary Shares at a price of 0.125 pence per Ordinary Share, are to be granted to the subscribers in the Placing on a pro rata basis to the size of their subscriptions in the Placing.  Therefore, one Placing Warrant will be granted for every two Placing Shares subscribed for.  The Placing Warrants may be exercised until 16 September 2022 and will not be admitted to trading on AIM or any other stock market and will not be transferable.

The issue of the Placing Shares and the Placing Warrants is conditional, inter alia, upon the passing of the Resolutions at the General Meeting and Admission.

4.    Authorities to allot securities

At the General Meeting, Shareholders are being asked to increase the Directors' authorities to allot shares in the Company, to provide sufficient authority for the Placing and to provide general authorities to allot shares.

(a)           Resolution 1 (an ordinary resolution) will, if passed, give the Directors the general authority to allot ordinary shares up to a maximum nominal amount of £855,000 (8,550,000,000 Ordinary Shares, representing: (i) authority in connection with the Placing in the nominal amount of £166,667; and (ii) approximately 50 per cent of the Enlarged Share Capital of the Company following the Placing); and

(b)          Resolution 2 (a special resolution) will, if passed, give the Directors the necessary authorities to allot ordinary shares for cash, disapplying pre-emption rights:

(i)       in connection with the Placing in the nominal amount of £166,667; and

(ii)      to provide headroom for future issues of shares for cash, of up to a maximum nominal amount of £344,500 (3,445,000,000 Ordinary Shares, representing approximately 25 per cent of the Enlarged Share Capital of the Company following the Placing).

These authorities will expire at the conclusion of the Annual General Meeting of the Company to be held in 2021.

The Directors intend that the authorities given by the Resolutions should provide sufficient headroom to enable the Company to take advantage of further fundraising opportunities over the next year should these arise (there being no current intention to use this further authority).  In addition, these authorities would be utilised for any options or warrants to subscribe for Ordinary Shares which are granted while the authorities are in place (including in respect of any future exercise of the Placing Warrants).

5.    Proposed Board Appointment

The Company announced on 31 July 2020 that it intended to appoint a further director to the Board by 31 December 2020.  The Company is in the advanced stages of appointing a Non-Executive Director to the Board. The proposed board appointment remains subject to approval from the Company's nominated adviser and completion of the customary due diligence process to satisfy itself as to board composition and independence and the suitability of a proposed director for the purposes of the AIM Rules for Nominated Advisers. Further announcements will be made at the appropriate time with regards to the proposed board appointment.

6.    General Meeting

A notice convening the General Meeting to be held at 15 Victoria Mews, Mill Field Road, Cottingley Business Park, Bingley BD16 1PY at 11.00 a.m. on 11 March 2021 is set out at the end of this Circular.

At the General Meeting, the following resolutions will be proposed:

(a)           Resolution 1: to grant general authority to allot Ordinary Shares;

(b)          Resolution 2: to grant authorities to allot Ordinary Shares for cash on a non-pre-emptive basis, as described in paragraph 4 above.

7.    Action to be taken

A form of proxy for use by Shareholders in connection with the General Meeting accompanies this Circular.  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 11.00 a.m. on 9 March 2021.

Due to Covid-19 and related legal restrictions and guidance from government authorities, shareholders may not physically attend the meeting, and will not be permitted access to the venue on the day of the meeting.  Shareholders are strongly encouraged to participate in the meeting by voting by proxy ahead of the meeting.  Shareholders who hold their Ordinary Shares through a nominee should instruct their nominee to submit the form of proxy on their behalf.  Only the formal business set out in the Notice of General Meeting will be considered at the meeting.

8.    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 they intend to do so in respect of their aggregated shareholding of 1,500,000 Ordinary Shares (equivalent to approximately 0.01 per cent of the existing issued Ordinary Shares).

KEY STATISTICS

*           including 25,904,000 ordinary shares arising on an exercise of existing warrants announced by the Company on 18 February 2021 and for which admission to trading on AIM is expected to occur on 24 February 2021

DEFINITIONS

The following definitions apply throughout this document, unless the context otherwise requires: