Alkemy Capital completes £1.35 million fundraise

Alkemy Capital Investments plc (LON:ALK:) (JV2:FRA) has announced that it has completed a £1.35 million fundraise. As part of this Alkemy has conditionally placed 657,711 ordinary shares at a placing price of £1.40 each to raise gross proceeds of c.£921,000, including a £10,000 participation by Alkemy director Helen Pein. Whilst legally restricted from participating directly in the Placing at this time, Paul Atherley and Sam Quinn have also agreed to contribute though the advance of unsecured, interest free loans of £430,000 in aggregate, with such amounts expected to be applied to subscribe for new shares at the Placing Price as soon as legally permissible as set out below.

The net proceeds of the Fundraise will be used to continue to advance the Company’s projects and will provide sufficient working capital for the Company over the next twelve months. The Company continues to advance discussions and negotiations with counterparties for lithium feedstock. The major shareholders of the Company have also committed to provide any additional working capital that may be required by the Company to enable it to reach this significant milestone.

The Directors of Alkemy have together contributed to the Fundraise in the amount of £440,000, with Helen Pein participating in the amount of £10,000 in the Placing. Paul Atherley and Sam Quinn have also both contributed in the amounts of £330,000 and £100,000, respectively, however they are members of a concert party under the City Code on Takeovers and Mergers (the “Takeover Code”) (which in aggregate currently holds 49.49% of the Company’s issued share capital) and therefore their direct participation in the Placing would have triggered a mandatory offer for the Company under Rule 9 of the Takeover Code. As such, Mr Atherley has agreed that an amount of £330,000 currently owing to him by the Company shall be treated as an advance in the form of an unsecured, interest free loan and Mr Quinn has agreed to advance the Company £100,000 in the form of an unsecured, interest free loan. The Company has agreed with Mr Atherley and Mr Quinn that the amounts to be repaid to them under such loans should be applied for the subscription of 235,714 new ordinary shares in the case of Mr Atherley and 71,428 new ordinary shares in the case of Mr Quinn, in each case at the Placing Price, with these subscriptions expected to take place at the earliest possible time permissible, which is envisaged to be in or around August 2023. At such time it is intended that the Company would apply for admission of the 307,142 new ordinary shares to listing on the Official List and to trading on the Main Market. This would not apply if and to the extent that (i) the issue of such shares would trigger a mandatory offer for the Company under the Takeover Code, (ii) the Company would not have sufficient shareholder authorities to issue such shares, or (iii) the application for admission of such new shares would require the Company to publish a prospectus.

In order to satisfy its obligations under the Placing through the issue of new ordinary shares, the Company would need to seek further shareholder authorities and publish a prospectus. Any prospectus published by the Company would need to be approved by the FCA in the United Kingdom. The Board believes that seeking further shareholder authorities and preparing a prospectus would be disproportionately costly and time-consuming.

The Placing Shares are therefore to be loaned to the Company by Mr Atherley, Chairman of the Company, in order that the Company is able to undertake the Placing in a timely manner. The Company and Paul Atherley have entered into a customary stock lending agreement dated 31 May 2023 (the “Stock Lending Agreement”) to document this arrangement. Under the Stock Lending Agreement, in repayment of the stock loan, the Company is required to deliver or procure the delivery of 657,711 ordinary shares to Paul Atherley by no later than 31 December 2023. Subject to the Company’s shareholders passing relevant resolutions to authorise the Board to allot new ordinary shares and disapply pre-emption rights at the Company’s next annual general meeting, which is expected to be held in or around July 2023, in repayment of the loan the Company intends to issue 657,711 new ordinary shares (the “Stock Loan Repayment Shares”) to Paul Atherley in or around August 2023.

The Company shall apply for admission of the Stock Loan Repayment Shares to listing on the Official List and to trading on the Main Market when they are issued, however at such point an approved prospectus is not expected to be required. As the Stock Loan Repayment Shares will be issued to Paul Atherley in accordance with the Stock Lending Agreement, this will not trigger a mandatory offer for the Company under Rule 9 of the Takeover Code.

For the avoidance of doubt, the loan of the Placing Shares to Alkemy Capital involves no cash consideration being paid to Paul Atherley in consideration for him entering into the Stock Lending Agreement and nor will any interest be payable under the Stock Lending Agreement.

Paul Atherley is a Director and is therefore is a related party of the Company. Owing to its size, the Stock Lending Agreement is considered to be a material related party transaction for the purposes of paragraph 7.3 of the FCA’s Disclosure Guidance and Transparency Rules. The Board of Directors (excluding Paul Atherley) has approved the entry by the Company into the Stock Lending Agreement and considers that the terms and conditions of the Stock Lending Agreement are fair and reasonable, insofar as the shareholders of the Company are concerned.

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