03/07/2023

Novacyt (NCYT) and Yourgene (YGEN) announced that they have reached agreement on the terms and conditions of a recommended cash offer to be made by Novacyt UK, for the entire issued and to be issued share capital of Yourgene. Under the terms of the Acquisition, each Yourgene Shareholder will be entitled to receive 0.522 pence in cash per Yourgene share. The Acquisition values the entire issued and to be issued share capital of Yourgene at approximately £16.7 million. The acquisition price represents a premium of approximately 167.7 per cent. to the closing price of 0.195 pence per Yourgene Share on 30 June 2023.

Comment: In current stock market conditions any M&A is most welcome, and now we see with YGEN why the stock delivered a turnaround early in June. It would be difficult for shareholders to quibble about the offer premium.

Zenova Group (ZED) are shipping 7,500 units of its Zenova FX500 aerosol fire extinguisher to its German sub-distributor. This is the first shipment from a total 40,000 units with a retail value of £1.2m.  The compact FX500 can used anywhere and the extraordinary efficiency of its Zenova developed fluid extinguishes even a lithium-ion battery fire and makes the possibility of re-ignition very unlikely. Zed has four other certified and validated products, Fire Protection Paint, Thermal Insulation Paint, Insulation Render, and Wildfire Barrier.

Comment: Zed listed at 19p in July 2021 and recently reported finals to November 2022 showed good business traction but sales of £175k disappointed. As the sales cycle, for its patented fire retardant and insulating coverings, took longer than expected. There is increasing confidence that after two years of investment in trials, tests, and studies sales will accelerate. Legislative changes are underway for landlords that support using its innovative fire safety and heat management solutions. After raising £0.5m at 4p a share alongside a £0.35m loan facility, sufficient funds are available to grow sales hopefully to break-even

Power Metal Resources (POW), the AIM listed metals exploration and development company, announced the initiation of a consulting agreement with Jasper Consult DMCC, a London and Dubai based strategic consultant with extensive expertise in the Kingdom of Saudi Arabia and Oman. POW said the Arabian Shield geological trend is a rich mineral system which is vastly underexplored, presenting an excellent opportunity for it to demonstrate its successful business model.

Comment: We have an interested development at POW, as the company moves to expand its footprint. The Arabian Shield should provide fresh impetus to POW.

Panthera Resources (PAT), with assets in West Africa and India, provided an update on Indo Gold Pty Ltd’s conditional arbitration funding agreement for up to $10.5 million in litigation financing with LCM Funding SG Pty Ltd, as originally announced by the company on 28th February 2023. While the company previously did not anticipate a further extension of the due diligence period, the company confirms that it has agreed to a further extension to the LCM Due Diligence period to 14 July 2023.

Comment: Panthera shares have certainly been in focus in a positive light of late, something which the latest announcement from the company underlines. Ideally, we are in the run up to a positive end to the due diligence period later this month.

Eurasia Mining (EUA), the palladium, platinum, rhodium, iridium and gold producing company, announced that Rosendra has approved the Definitive Feasibility Study for the Monchetundra project in the Kola peninsula, northwest Russia. In parallel, management changes have been made to reflect the Company’s focus on the possible sale of its assets in Russia, including the Monchetundra project.

Comment: While EUA continues to move forward on its goals at Monchetundra, and in terms of assets sales, clearly it is being slowed down by bigger picture factors beyond its control. Nevertheless, the company is at least pushing towards previously flagged goals.

Zanaga Iron Ore (ZIOC) announced that it has entered into an equity subscription agreement with Shard Merchant Capital Ltd, an institutional investor, dated 1 July 2023. This follows the successful implementation of an equity subscription agreement on similar terms in June 2020. Under the ESA the company will issue and SMC will subscribe for up to 36 million ordinary shares of no par value in the company in up to three tranches of up to 12 million shares each. ZIOC said following entry into of the Equity Subscription Agreement, ZIOC is pleased that a financing structure has been put in place which will give the company access to funding through a relatively low cost structure which minimises dilution to shareholders.

Comment: We are seeing a divergence between small cap companies who are able to get their financing needs over the line, and without significant dilution, like ZIOC, and those who cannot. As the cost of finance continues to rise, one would expect this divergence to widen.

BrandShield Systems (BRSD), a provider of cybersecurity solutions for brand oriented digital risk protection, announced its final results for the year ended 31 December 2022. There was a 55% increase in revenues to $6.39m ($4.13m in 2021), 61% increase in ARR to $8.42m ($5.22m in 2021). Cash of $2.6m ($1.194m in 2021). The company said it was pleased to report a strong performance across 2022, with the company making significant financial and operational progress. In addition to generating strong revenues and expanding its customer base, it also further strengthened its team with a number of strategic hires as it continues to explore further commercial opportunities to consolidate its position at the forefront of the digital risk protection market.

Comment: Given recent significant share price purchases, it is perhaps not surprising that we have seen a strong update today from BRSD, something which suggests that the company has finally found critical mass, and could now become a significant player in its field.

Advanced Oncotherapy (AVO) is developing LIGHT, the next generation of proton beam Lazer therapy cancer treatment system, its shares are  ‘temporary’ suspended from 30/06/2023. This is   pending the clarification of its financial position ahead of publishing its financial statements for the year-end December 2022. The advanced discussions for £8m working capital from a new lender would have extend the cash runway for cir. 4-5months but closed without immediate funding.  Other financing options being considered include finding a buyer and a Nasdaq quote. LIGHT (subject to funding) was expected to start the trial treatment of patients in H2 which is a substantial value inflexion point.

Comment:  AVO have raised over £210m in the last 10 years to progress this advanced MedTech system with considerable cost, pain reducing and lifesaving advantages over existing technology.  The share price had fallen sharply caused by Crispin Odey, a 12% shareholder before its own troubles led to indiscriminately selling shares and owning 7.5% when AVO sought suspension.  The Aim market value at the point was £10.4m.  The working capital required is likely and should be found not least because the upside from completing the system is $100m’s but is also saves lives and treatment trauma. Where the financing terms will leave the management and existing shareholders is now subject to negotiation from very weak bargaining position