RNS Number:3763O
Clinical Computing PLC
06 August 2003
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES,
CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF IRELAND
CLINICAL COMPUTING PLC
PROPOSED PLACING AND OPEN OFFER
TO RAISE APPROXIMATELY #2.6 MILLION
Clinical Computing plc, a provider of clinical information management software
to the healthcare industry, announces that it is proposing to raise
approximately #2.6 million (gross) by way of a placing and open offer.
The Company has today separately announced the unaudited interim results of the
Group for the six months ended 30 June 2003.
Highlights
* Placing of 6,430,051 New Ordinary Shares at 40 pence per share
* Open Offer to Qualifying Shareholders of 4,180,051 New Ordinary
Shares on the basis of 1 New Ordinary Share for every 6 Existing Ordinary Shares
* Net proceeds of the Placing and the Open Offer will be approximately
#2.2 million
* The Placing and the Open Offer is being undertaken to enable the
Company to demonstrate to prospective customers that it is financially secure
and has the financial resources to maintain and support the products that it is
now offering
* The Placing and the Open Offer will be underwritten by Investec
Commenting on the Placing and the Open Offer, Howard Kitchner, Chairman of the
Company said:
"We are pursuing 15open bids in respect of CV4, with both new and legacy
customers, one of which would be a very significant transaction. We believe
that several of these deals are predicated on the Group providing these
potential customers with confidence in the financial position of the Group,
which we believe that the Placing and the Open Offer will provide."
For further information, please contact:
Clinical Computing plc 020 8747 8744
Jack Richardson, Group Chief Executive
Joe Marlovits, Group Finance Director
Investec Investment Banking 020 7597 5970
Nigel Tose
Andrew Craig
Binns & Co. PR Ltd 020 7786 9600
Peter Binns
Paul McManus
This announcement does not constitute an offer to sell or issue, or the
solicitation of an offer to buy or subscribe for Ordinary Shares in any
jurisdiction in which such offer, issue or solicitation is unlawful. Neither
the Existing Ordinary Shares nor the New Ordinary Shares have been, or will be,
registered in the United States under the United States Securities Act 1933, as
amended, nor under the securities laws of any state of the United States, any
province or territory of Canada, Australia, Japan or the Republic of Ireland.
Accordingly, subject to certain exceptions, neither the Existing Ordinary Shares
nor the New Ordinary Shares may be offered, sold, resold, delivered,
transferred, directly or indirectly in or onto the United States, Canada,
Australia, Japan or the Republic of Ireland, or for the account or the benefit
of, any resident of Canada, Australia, Japan or the Republic of Ireland or any
US Person.
Investec Investment Banking, a division of Investec Bank (UK) Limited, which is
regulated in the United Kingdom by the Financial Services Authority, is acting
solely for Clinical Computing as financial adviser and sponsor in connection
with the Placing and the Open Offer and will not be responsible to anyone other
than Clinical Computing for providing the protections afforded to customers of
Investec Investment Banking nor for any advice in connection with matters
described in this announcement.
Investec Securities, a division of Investec Bank (UK) Limited, which is
regulated in the United Kingdom by the Financial Services Authority, is acting
solely for Clinical Computing as stockbroker in connection with the Placing and
the Open Offer and will not be responsible to anyone other than Clinical
Computing for providing the protections afforded to customers of Investec
Securities nor for providing advice in connection with matters described in this
announcement.
Introduction
The Board announces that it is proposing to raise approximately #2.6 million
(approximately #2.2 million net of expenses) by way of a Placing and an Open
Offer of, in aggregate, 6,430,051 New Ordinary Shares at 40 pence per share to
enable the Company to further expand Clinical Vision, strengthen its balance
sheet and enable it to pursue deals with larger organisations. The Placing and
the Open Offer are being underwritten by Investec.
Background to and reasons for the Placing and the Open Offer
The Company released CV4, its clinical information system for healthcare
organisations practising renal medicine, earlier this year. CV4 was developed
utilising the considerable experience which the Company has in the clinical
information systems market. The Directors believe that, in CV4, the Company has
developed one of the most comprehensive and adaptable clinical information
systems presently available to healthcare organisations practising renal
medicine. Furthermore, as CV4 is capable of supporting many clinical
applications, the Directors believe that it may be used as a generic clinical
information system capable of delivering electronic clinical records to the
healthcare industry.
The Company currently has five customers in the US using CV4 as their primary
information system supporting their renal clinical practices. The first UK
customer is expected to complete installation of the product for full
utilisation later this month. Accordingly, the Directors believe that the Group
now has sufficient reference sites for generating further sales in both the US
and the UK, and expect that a number of its customers (of which there are
approximately ninety) who use their legacy renal products will migrate to CV4
over time.
The Directors believe that both new sales and the migration of existing clients
will be helped by the additional financial security that the net proceeds of the
Placing and the Open Offer (approximately #2.2 million) will bring. These net
proceeds will initially be held on deposit. The majority of the net proceeds
will be used to strengthen the Group's balance sheet and the balance for general
working capital purposes. The Directors intend that once new or migratory sales
have been secured, certain of these funds will be used in the further
development of clinical applications and to expand CV4. The Group intends to
build on its established customer base in the UK and US renal markets by
expanding its product offering into related clinical specialties. Ultimately,
the Directors believe that CV4 will be expanded to include a disease management
solution, providing point of care clinical protocols electronically to
healthcare providers.
Whilst the Company had cash reserves of #0.2 million at 30 June 2003 and
available bank facilities of #0.8 million, the Directors consider that it is in
the best interests of Shareholders to raise funds to provide additional working
capital and to increase the net assets of the Group. The Directors believe that
this will allow the Company to demonstrate to prospective customers that it is
financially secure and has the financial resources to maintain and support the
Group's products. As Clinical Computing's customers are in the healthcare
industry, the support and maintenance of its products over an extended period of
time are important aspects of the purchasing decision for its customers. The
Directors believe that building customer confidence in the financial position of
the Group is a key factor in generating new sales. The net asset position of the
Group (on the basis that Admission had occurred on 30 June 2003) is set out in
the pro forma statement of net assets in Part VI of the Prospectus. It is
expected that, following Admission, the Company's unutilised bank facility of
#0.4 million, guaranteed personally by certain of the Directors, will be
terminated. If the Placing and the Open Offer are not approved at the EGM this
bank facility will remain in place.
The attention of Shareholders is drawn to Note 1 of the unaudited interim
financial statements of the Company set out in the Prospectus, relating to the
preparation of the interim financial information on a going concern basis, which
states that the Company requires further funding to enable it to exploit the
development of its new products and for ongoing working capital purposes. If
the Placing and the Open Offer are not approved at the EGM, or are not
implemented for any other reason, then the Group will seek to realign its
operations to reduce the Group's overheads. This may result in sales
discounting and a reduction in staffing levels before the end of the current
financial year.
Shareholders should note that, if the Placing and the Open Offer do not proceed,
the Group may for a period trade with negative net assets, until such time as
the assets of the business are built up through further sales and cost
reductions.
Current Trading and Prospects
The following is extracted from the Chairman's statement included in the interim
results for the six months ended 30 June 2003 which were announced today and
which are set out in the Prospectus:
"We continue to actively market CV4 to both legacy customers and new prospects,
and we have approximately 90 legacy customers that we believe provide a pool of
potential customers for CV4. We are now pursuing 15 open bids, which include
both new and legacy customers, one of which would be a significant transaction.
As always, the success and timing of converting "pipeline" to sales are subject
to normal business risk. Discussions are also taking place with several
potential customers to add new applications to the CV4 technology on top of our
renal and transplantation applications.
The Directors believe that several of these deals are predicated on the Group
providing these potential customers with confidence in the financial position of
the Group, which they believe that the Placing and the Open Offer will achieve.
Our goal in the short term is to capitalise on our existing relationships in the
renal market and to work in partnership with leading healthcare institutions in
the US and UK to expand the specialities supported by CV4.
The Directors view the Group's future prospects with confidence."
The Placing and the Open Offer
The Company is proposing to raise approximately #2.6 million (approximately #2.2
million net of expenses) by the issue of 6,430,051 new Ordinary Shares, in
aggregate, at the Issue Price pursuant to the Placing and the Open Offer, both
of which have been underwritten by Investec. The New Ordinary Shares, in
aggregate, will represent approximately 20.4 per cent. of the enlarged issued
share capital of the Company on Admission. The New Ordinary Shares will be
issued fully paid and will, on issue, rank pari passu with the Existing Ordinary
Shares including the right to receive all dividends or other distributions
declared, made or paid thereon following Admission.
The Placing
Pursuant to the Placing, 2,250,000 New Ordinary Shares are being conditionally
placed firm at the Issue Price with institutional investors and are not subject
to the Open Offer. In addition, 947,832 New Ordinary Shares (which are the
subject of the irrevocable undertakings not to take up entitlements under the
Open Offer) are being conditionally placed firm at the Issue Price with
institutional and certain other investors (including Jack Richardson and Joseph
Marlovits). The remaining 3,232,219 New Ordinary Shares are being conditionally
placed by Investec at the Issue Price with institutional and certain other
investors, subject to the right of clawback to satisfy Valid Applications under
the Open Offer.
The Open Offer
Pursuant to the Open Offer, Qualifying Shareholders are invited by Investec, as
agent for the Company, to apply to subscribe for the Open Offer Shares at the
Issue Price payable in full on application and free of expenses, pro rata to
their existing shareholdings, on the following basis:
1 Open Offer Share for every 6 Existing Ordinary Shares
held at the close of business on the Record Date and so in proportion for any
greater number of Existing Ordinary Shares then held. The amount due in respect
of each application for Open Offer Shares will be payable in full on
application.
Entitlements of Qualifying Shareholders will be rounded down to the nearest
whole number of Open Offer Shares and fractional entitlements will not be
allocated under the Open Offer but will be aggregated and placed under the
Placing for the benefit of the Company. The maximum entitlement of each
Qualifying Shareholder is indicated on the Application Form accompanying the
Prospectus. Applications for Open Offer Shares in excess of such maximum
entitlement will be deemed to be in respect of the lower of (a) that Qualifying
Shareholder's maximum entitlement; and (b) such number of Open Offer Shares as
is covered by the payment enclosed with the Application Form. Application Forms
are personal to Qualifying Shareholders and may not be transferred, except to
satisfy bona fide market claims. Qualifying Shareholders with holdings in both
certificated form and uncertificated form will be treated as having separate
entitlements under the Open Offer and should fill in a separate Application Form
for each.
Further details of the Open Offer, including the procedure for application and
payment are set out in the Prospectus and the Application Form.
Placing and underwriting arrangements
Pursuant to the Placing Agreement, Investec has agreed with the Company to
procure subscribers for all the New Ordinary Shares subject, in the case of the
Open Offer Shares, to clawback to satisfy Valid Applications under the Open
Offer. Investec has further agreed to underwrite the entire issue of New
Ordinary Shares to the extent that they are not subscribed for by institutional
and other investors and Qualifying Shareholders pursuant to the Placing and the
Open Offer.
Conditions
The Placing and the Open Offer are conditional, inter alia, on:
(a) the passing of the Resolutions at the EGM;
(b) the Placing Agreement becoming, or being declared, unconditional in all
respects (save for the condition relating to Admission) and not having been
terminated in accordance with its terms, by not later than 2 September 2003, or
such later time and date, being no later than 3.00 p.m. on 12 September 2003, as
the Company and Investec shall agree; and
(c) Admission becoming effective by no later than 9.30 a.m. on 2 September
2003, or such later time and date, being not later than 12 September 2003, as
the Company and Investec shall agree.
Applications will be made to the UK Listing Authority for the admission of the
New Ordinary Shares to listing on the Official List and to the London Stock
Exchange for the New Ordinary Shares to be admitted to trading on its market for
listed securities. It is expected that Admission will take place, and that
dealings will commence, on 2 September 2003. Share certificates in respect of
New Ordinary Shares to be held in certificated form are expected to be
despatched no later than 12 September 2003. New Ordinary Shares to be held in
uncertificated form are expected to be delivered in CREST on 2 September 2003.
Related Party Transactions
Jack Richardson and Joseph Marlovits, both being Directors, are related parties
of the Company for the purposes of the Listing Rules. The issue of New Ordinary
Shares to each of Mr Richardson and Mr Marlovits under the Placing will be a
separate transaction with a related party for the purposes of the Listing Rules
and will require the separate approval of Shareholders at the EGM. Mr Richardson
has undertaken that he will not, and will take reasonable steps to ensure that
his associates (as defined in the Listing Rules) will not, vote on the
Resolution relating to his related party transaction. Mr Marlovits (and his
associates) are not currently Shareholders.
Irrevocable Undertakings
Placing and Open Offer
Jack Richardson, Conrad Venn and Neil Sinclair have irrevocably undertaken that
they will not take up their entitlements (amounting, in aggregate, to 392,116
New Ordinary Shares) under the Open Offer. However, Mr Richardson has
irrevocably undertaken to subscribe for 62,500 New Ordinary Shares under the
Placing. In addition, Joseph Marlovits (who is not currently a Shareholder) has
irrevocably undertaken to subscribe for 25,000 New Ordinary Shares under the
Placing.
Howard Kitchner and Michael Gordon have irrevocably undertaken to take up part
of their entitlements under the Open Offer (amounting to 125,000 New Ordinary
Shares and 500,000 New Ordinary Shares respectively) and not to take up the
balance of their entitlements. In addition, David Altschuler, a significant
shareholder, has irrevocably undertaken to take up part of his entitlement under
the Open Offer (amounting to 125,000 New Ordinary Shares) and not to take up the
balance of his entitlement.
Accordingly, the Directors (excluding Alfred Elbrick) and Mr Altschuler have, in
aggregate, irrevocably undertaken to subscribe for 837,500 New Ordinary Shares
pursuant to the Placing and the Open Offer, representing approximately 13.0 per
cent. of the New Ordinary Shares.
Voting
All the Directors who have an interest in Existing Ordinary Shares and Mr
Altschuler have irrevocably undertaken to the Company and Investec that they,
having between them, in aggregate, interests in approximately 40.6 per cent. of
the Existing Ordinary Shares, will vote in favour of the Resolutions (except
that Jack Richardson will not be voting on the Resolution relating to his
related party transaction).
Extraordinary General Meeting
An Extraordinary General Meeting of the Company will be convened for 10.00 a.m.
on 1 September 2003 to consider the following resolutions:
(a) a special resolution
(i) to increase the authorised share capital of the Company from
#1,672,021.50 to #2,300,000 (being an increase of 37.6 per cent.) by the
creation of 12,559,590 new Ordinary Shares;
(ii) to authorise the Directors to allot the New Ordinary Shares and
other relevant securities up to an aggregate nominal amount of #525,172.68; and
(iii) to disapply the pre-emption rights contained in section 89(1) of
the Act;
(b) an ordinary resolution to approve the issue of New Ordinary Shares to Jack
Richardson pursuant to the Placing as a related party transaction for the
purposes of the Listing Rules; and
(c) an ordinary resolution to approve the issue of New Ordinary Shares to
Joseph Marlovits pursuant to the Placing as a related party transaction for the
purposes of the Listing Rules.
Following Admission, assuming that the Resolutions are passed and no further
exercise of options under the Share Option Schemes, the Company will have an
authorised share capital of #2,300,000 divided into 46,000,000 Ordinary Shares
of which 31,510,361 Ordinary Shares will be in issue. The Directors have no
present intention of exercising the section 80 authority in respect of the
balance of the authorised but unissued share capital.
The increase in the authorised share capital of the Company following the
passing of the Resolutions will represent an increase of 37.6 per cent. to the
authorised share capital of the Company at the date of this announcement.
Corporate Governance
The Directors are aware of the recent proposals to amend the rules and best
practice governing the board structure of public companies in the UK and the
emphasis on increasing the role, influence and independence of non-executive
directors. The Company will continue to observe the requirements of the Combined
Code taking into account the Company's size and is, where appropriate, taking
into consideration the Higgs Review and the Smith Report. The Company is aware
that the current board composition is non-compliant with the Combined Code in
terms of the independence of some of the non-executive directors. The Board is
committed to continue the efforts begun last year to rectify this situation and
will seek to appoint one additional independent non-executive director before
the end of the year.
The following definitions apply throughout this announcement
"Admission" the admission to the Official List and admission to trading on the London
Stock Exchange's markets for listed securities of the New Ordinary Shares
becoming effective by the decision of the UKLA to admit such shares to
listing, being announced in accordance with paragraph 7.1 of the Listing
Rules, and by the announcement of the decision of the London Stock Exchange to
admit such shares to trading, being announced in accordance with the LSE
Admission and Disclosure Standards
"Application Form" the application form accompanying the Prospectus for use by Qualifying
Shareholders in relation to the Open Offer
"Clinical Computing" or the Clinical Computing plc
"Company"
"Combined Code" the Principles of Good Governance and the Code of Best Practice included
within the Listing Rules
"CREST" the relevant system (as defined in the CREST Regulations) in respect of which
CRESTCo Limited is the Operator (as defined in the CREST Regulations), and
references to "CREST Qualifying Shareholders" and "non-CREST Qualifying
Shareholders" should be construed accordingly
"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755)
"CV4" Clinical Vision 4.0
"Directors" or "Board" the directors of Clinical Computing as at the date of this announcement
"Existing Ordinary Shares" the 25,080,310 Ordinary Shares in issue at the date of this announcement
"Extraordinary General the extraordinary general meeting of the Company (or any adjournment thereof)
convened for 10.00 a.m. on 1 September 2003, notice of which is set out at the
Meeting" or "EGM" end of the Prospectus
"FSMA" the Financial Services and Markets Act 2000
"Group" the Company and its subsidiaries
"Higgs Review" the Review of the role and effectiveness of non-executive directors, a report
dated January 2003 by Derek Higgs
"Investec" Investec Bank (UK) Limited, 2 Gresham Street, London, EC2V 7QP
"Investec Investment Banking" Investec Investment Banking, a division of Investec
"Investec Securities" Investec Securities, a division of Investec
"Issue Price" 40 pence per New Ordinary Share
"Listing Rules" the Listing Rules made pursuant to Part VI of FSMA
"London Stock Exchange" London Stock Exchange plc
"LSE Admission and the rules issued by the London Stock Exchange in relation to the admission to
trading of, and continuing requirements for, securities on the London Stock
Disclosure Standards" Exchange
"New Ordinary Shares" the 6,430,051 new Ordinary Shares proposed to be issued fully paid pursuant to
the Placing and the Open Offer
"Official List" the list maintained by the UKLA pursuant to Part VI of FSMA
"Open Offer" the invitation made by Investec Investment Banking, on behalf of the Company,
to Qualifying Shareholders to subscribe for New Ordinary Shares at the Issue
Price on the terms, and subject to the conditions, set out in the Prospectus
and in the Application Form
"Open Offer Shares" the 4,180,051 New Ordinary Shares which are being made available to Qualifying
Shareholders under the Open Offer
"Ordinary Shares" ordinary shares of 5 pence each in the capital of the Company
"Placing" the placing by Investec (on behalf of the Company) of the New Ordinary Shares
at the Issue Price pursuant to the terms of the Placing Agreement subject, in
the case of the Open Offer Shares, to the right of Investec to recall all or
any such Open Offer Shares to satisfy Valid Applications
"Placing Agreement" the agreement dated 6 August 2003 between (1) Investec, and (2) the Company,
further details of which are set out in paragraph 9 of Part VII of the
Prospectus
"Prospectus" the prospectus of the Company to be issued on the date hereof
"Qualifying Shareholders" holders of Existing Ordinary Shares on the Company's register of members on
the Record Date other than certain Shareholders (as described in Part III of
the Prospectus) to whom the Open Offer is not being extended
"Record Date" the close of business on 30 July 2003
"Resolutions" the resolutions set out in the notice of EGM in the Prospectus and
"Resolution" means any of them
"Shareholders" holders of Ordinary Shares
"Smith Report" the Audit Committees Combined Code Guide, a report and proposed guidance by a
Financial Reporting Council appointed group chaired by Sir Robert Smith
"uncertificated" or "in recorded on the relevant register of the share concerned as being held in
uncertificated form in CREST, the title to which, by virtue of the CREST
uncertificated form" Regulations may be transferred by means of CREST
"UKLA" or the Financial Services Authority acting in its capacity as the competent
authority for the purposes of Part VI of FSMA
"UK Listing Authority"
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland
"United States" of "US" the United States of America, its territories and possessions (including the
District of Columbia)
"US Person" any person resident in the Untied States or otherwise a US person within the
meaning of regulation S under the United States Securities Act 1933, as
amended
"Valid Applications" applications from Qualifying Shareholders and other holders having bona fide
market claims made in accordance with the terms and conditions of the Open
Offer as set out in the Prospectus and the Application Form
This information is provided by RNS
The company news service from the London Stock Exchange
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