THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED.  ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN. IN ADDITION, MARKET SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS 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 SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

26 August 2022 

nanosynth group plc

("nanosynth", the "Company" or the "Group")

Lanstead Subscription and Sharing Agreement

nanosynth, the AIM quoted company specialising in the synthesis and application of nanoparticles to create new and improve existing products, is pleased to announce a conditional subscription to raise £2,942,500 (the "Subscription") through the issue of 535,000,000 new ordinary shares of 0.01 pence each in the Company ("Ordinary Shares") at a price of 0.55 pence per Ordinary Share (the "Issue Price") to institutional investor Lanstead Capital Investors L.P. ("Lanstead"), together with a related sharing agreement ("Sharing Agreement") pursuant to which the Company pledges the gross proceeds of the Lanstead Subscription.

Highlights

·    Subscription for 535,000,000 new Ordinary Shares (the "Lanstead Subscription Shares") by Lanstead at an Issue Price of 0.55 pence to raise £2,942,500 (the "Lanstead Subscription")

·    The Issue Price of 0.55 pence represents a 20.9 per cent. premium to the closing mid-market price (of 0.455 pence) of the Ordinary Shares on 25 August 2022, the latest business date prior to the announcement of the Subscription

·    The £2,942,500 gross proceeds of the Lanstead Subscription will be pledged to Lanstead by the Company pursuant to a Sharing Agreement with Lanstead. The Sharing Agreement, details of which are set out below, entitles the Company to receive back those proceeds on a pro rata monthly basis over a period of 24 months, subject to adjustment upwards or downwards each month depending on the Company's share price at the time relative to the Benchmark Price of 0.7333 pence per share. The monthly settlement amounts for the Sharing Agreement are structured to commence approximately one month (or earlier by agreement with Lanstead) following Admission

·    The Sharing Agreement provides the opportunity for the Company to benefit from positive future share price performance; an underlying reason for undertaking the fund raise in this way

·    The proceeds of the Sharing Agreement, will be used primarily to fund its working capital requirements as the Company looks to commercialise its bespoke nanoparticle technology

Mark Duffin, Chief Executive of nanosynth, commented: "We are delighted to have entered into these funding arrangements with Lanstead at a particularly exciting time in the development of our business. The business is continuing to see significant levels of interest across the seven new verticals in which the Company is focusing its efforts and it will update the market on further developments in due course."

Introduction

Lanstead has conditionally agreed to subscribe for the Lanstead Subscription Shares at the issue price of 0.55 pence for gross proceeds of £2,942,500. The Subscription proceeds will be pledged to Lanstead under the Sharing Agreement pursuant to which the Company is entitled to receive back those proceeds on a pro rata monthly basis over a period of 24 months, subject to adjustment upwards or downwards each month depending on the Company's share price at the time.

A significant factor in nanosynth's decision to enter into the Subscription is that the Sharing Agreement provides the opportunity for the Company to benefit from positive future share price performance.  There is no upper limit placed on the additional proceeds which could be received by the Company as part of the monthly settlements and the amount available in subsequent months is not affected.  Whilst the Company notes the corresponding risk that a fall in nanosynth's share price could reduce the amount of proceeds received, as explained below, the Directors expect the Company's strategy to make considerable positive advancements over the 24-month term of the Sharing Agreement. If these advancements are successful, and if the success of these advancements is reflected in nanosynth's share price, the Company expects the proceeds to be received from Lanstead to exceed the amount pledged under the Sharing Agreement.

Further information on the Lanstead Subscription

Pursuant to the subscription agreement between the Company and Lanstead (the "Lanstead Subscription Agreement"), 535,000,000 new Ordinary Shares have today been allotted and will be issued, conditional upon Admission, to Lanstead at 0.55 pence per Lanstead Subscription Share for an aggregate subscription value of £2,942,500.

The Lanstead Subscription proceeds of £2,942,500 will immediately following Admission be pledged to Lanstead under the Sharing Agreement under which Lanstead will then make, subject to the terms and conditions of that Sharing Agreement, monthly settlements (subject to adjustment upwards or downwards) to the Company over 24 months, as detailed below.  As a result of entering into the Sharing Agreement, the aggregate amount received by the Company under the Lanstead Subscription and the Sharing Agreement may be more or less than £2,942,500, as further explained below. Notwithstanding the Subscription Price of 0.55 pence, shareholders should note that the share price of the Company needs to be on average over the 24 months of the Sharing Agreement at or above the Benchmark Price of 0.7333 pence per share for the Company to receive at least, or more than, the gross Subscription of £2,942,500.

The Lanstead Subscription Shares will be issued credited as fully paid and will rank pari passu in all respects with the Company's existing issued Ordinary Shares.  The Lanstead Subscription is conditional, inter alia, on admission of the Lanstead Subscription Shares to trading on AIM, and there being: (i) no breach of certain customary warranties given by the Company to Lanstead at any time prior to Admission (which is expected on or around 01 September 2022); and (ii) no force majeure event occurring prior to Admission.  

The Sharing Agreement

In addition to the Lanstead Subscription, the Company has entered into the Sharing Agreement, pursuant to which nanosynth will pledge the £2,942,500 gross proceeds of the Lanstead Subscription to Lanstead.  The Sharing Agreement will enable the Company to share in any share price appreciation over the Benchmark Price (as defined below).  However, if the Company's 20 day Volume Weighted Average Share Price is less than the Benchmark Price then the amount received by the Company under the Sharing Agreement will be less than the gross proceeds of the Lanstead Subscription which were pledged by the Company to Lanstead at the outset.

The Sharing Agreement provides that the Company will receive 24 monthly settlement amounts as measured against a benchmark share price of 0.7333 pence per Ordinary Share (the "Benchmark Price"). The monthly settlement amounts for the Sharing Agreement are structured to commence approximately one month (or earlier by agreement with Lanstead) following Admission.

If the measured share price (the"Measured Price"), calculated as the average of each day's volume weighted share price ("VWAP") of the Company's Ordinary Shares over a 20-day period prior to the monthly settlement date, exceeds the Benchmark Price, the Company will receive more than 100 per cent. of that monthly settlement due on a pro rata basis according to the excess of the Measured Price over the Benchmark Price.  There is no upper limit placed on the additional proceeds receivable by the Company as part of the monthly settlements and the amount available in subsequent months is not affected.  Should the Measured Price be below the Benchmark Price, the Company will receive less than 100 per cent. of the monthly settlement calculated on a pro rata basis and the Company will not be entitled to receive the shortfall at any later date. As such, the final determination of the total amounts to be received under the Sharing Agreement will only be known after the 24 months have elapsed.

For example, if on a monthly settlement date the calculated Measured Price exceeds the Benchmark Price by 10 per cent., the settlement on that monthly settlement date will be 110 per cent. of the amount due from Lanstead on that date.  If on the monthly settlement date the calculated Measured Price is below the Benchmark Price by 10 per cent., the settlement on the monthly settlement date will be 90 per cent. of the amount due on that date. Each settlement as so calculated will be in final settlement of Lanstead's obligation on that settlement date.

Assuming the Measured Price equals the Benchmark Price on the date of each and every monthly settlement, nanosynth would receive 24 monthly settlement amounts (23 monthly amounts of £122,604.17 and the final month of £122,604.09) totalling in aggregate proceeds of £2,942,500 (before expenses) from the Lanstead Subscription and Sharing Agreement. Examples of the proceeds from the Sharing Agreement to be received each month, based upon varying levels of average share price in the month, are shown in the Appendix to this announcement.

The Company will pay Lanstead's legal costs of up to £20,000 incurred in connection with the Lanstead Subscription and in entering into the Sharing Agreement and, in addition, has agreed to issue to Lanstead 37,450,000 new Ordinary Shares ("Value Payment Shares") in connection with entering into the Sharing Agreement.

In no event will fluctuations in the Company's share price result in any increase in the number of Lanstead Subscription Shares issued by the Company or received by Lanstead.  The Sharing Agreement allows both Lanstead and the Company to benefit from future share price appreciation.

In total, Lanstead will be issued with 535,000,000 new Ordinary Shares pursuant to the Lanstead Subscription which, when issued, will equate (together with the 37,450,000 Value Payment Shares) to approximately 21.59 per cent. of the Company's enlarged issued share capital following Admission.

No shares, warrants or additional fees are owed to Lanstead at any point during this agreement other than those disclosed above.

The Directors believe that the Sharing Agreement potentially provides a number of benefits to the Company and its shareholders including: the certainty of additional investment, albeit the amount of proceeds to be received under the agreements is wholly dependent on the Company's share price each month over the term of the Sharing Agreement; the opportunity to benefit from positive future share price performance; and that the amount of shares issued is fixed, together with the cost of their issue.

Authority to allot shares

The allotment of the Lanstead Subscription Shares, and the Value Payment Shares is being made pursuant to existing authorities to allot shares and other relevant securities and to disapply pre-emption rights under section 551 of the Companies Act 2006, which the Directors were given at the Company's Annual General Meeting held on 26 July 2022.

Admission and Total Voting Rights

Application will be made for the Lanstead Subscription Shares and the Value Payment Shares to be admitted to trading on the AIM market of the London Stock Exchange ("Admission"). It is anticipated that Admission to AIM will occur at 8.00 am, on or around 01 September 2022.

Following Admission the Company will have 2,651,521,986 Ordinary Shares in issue. The figure of 2,651,521,986 may be used by the Company's shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

About Lanstead

Lanstead is a global investment firm that provides funding for ongoing business objectives to listed small and mid-cap growth companies. In London, Lanstead focus on equity investments in companies already listed or quoted on the London Stock Exchange or European exchanges and on management teams with a clear growth strategy.

Lanstead's extensive experience allows it to invest in most industries, focusing on providing supportive, longer term capital that rewards company growth. Companies with Lanstead on the shareholder register via an equity placement to Lanstead with an accompanying sharing agreement can benefit from a unique and flexible approach to finance growth. This provides the opportunity for companies to benefit from additional cash beyond the original placing proceeds without having to issue additional shares.

Further information is available at www.Lanstead.com

Appendix - example returns from the Lanstead Sharing Agreement

In relation to each of the months in the 24 month calculation period:

ENQUIRIES: