RNS & Investor News

Shareholder Circular and Notice of General Meeting

08 January 2018

OptiBiotix Health plc (AIM: OPTI), a life sciences business developing compounds to tackle obesity, high cholesterol and diabetes announces that, further to the announcement dated 28 November 2017, it has today posted a circular to shareholders seeking approval to undertake a capital reduction. The circular will shortly be available on the Company's website (www.optibiotix.com) and an extract of the circular appears below.

The General Meeting will be held at 11.00 a.m. on 25 January 2018 at the offices of Jeffreys Henry LLP, Finsgate, 5-7 Cranwood Street, London, EC1V 9EE.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.


For further information, please contact:

OptiBiotix Health Plc
Stephen O'Hara, Chief Executive
Contact via Walbrook below
Cairn Financial Advisers LLP
Liam Murray / Jo Turner
Tel: 020 7213 0880
finnCap Broker
Adrian Hargrave / Scott Mathieson / Kate Bannatyne (Corporate Finance)
Tony Quirke (Corporate Broking)
Tel: 020 7220 0500
Walbrook PR Ltd
Anna Dunphy
Tel: 020 7933 8780 or [email protected]
Mob: 07876 741 001


About OptiBiotix - www.optibiotix.com

OptiBiotix was formed in March 2012 to develop compounds which modify the human microbiome - the collective genome of the microbes in the body - to prevent and manage human disease.

The aim of OptiBiotix is to discover and develop microbial strains, compounds and formulations, which modulate the human microbiome and can be used as food ingredients and supplements or active compounds for the prevention and management of human metabolic diseases, examples of which include obesity, cholesterol and lipid distribution and diabetes.

OptiBiotix has established a pipeline of microbiome modulators that can impact on lipid and cholesterol management, energy harvest and appetite suppression. The development pipeline is fuelled by its proprietary OptiScreen® and OptiBiotic® platform technologies designed to identify metabolic pathways and compounds that impact on human physiology and bring potential health benefits.


Extract of the circular



Incorporated in England and Wales under the Companies Act 1985 with registered number 05880755


Neil Davidson CBE (Chairman)

Stephen O'Hara (CEO)

Per Rehne (Commercial Director)

Christina Wood (Sales and Marketing Director)

Dr Gareth Barker (Non-executive Director)

Jan (Peter) Wennstrom (Non-executive Director)

Registered office:

Innovation Centre

Innovation Way


York YO10 5DG

8 January 2018

Dear Shareholder

Proposed Capital Reduction
Notice of General Meeting

1. Introduction

On 28 November 2017, OptiBiotix announced that it intended to convene a general meeting to seek approval from Shareholders to undertake a share capital re-organisation to allow the Company to make future dividend payments. I am writing to you now to set out details of your Board's proposal to effect the Capital Reduction which will involve the cancellation of the Share Premium Account.

The purpose of this document is to provide you with details of the Capital Reduction and the Resolution to be proposed to Shareholders at the forthcoming General Meeting. The formal Notice of General Meeting is set out at the end of this document and a Form of Proxy is also enclosed for you to complete, sign and return.

2. Background to, and reasons for, the Capital Reduction

As at 31 May 2017, the Company had retained losses of £4,911,617.54 which included an unrealised gain on valuations of investments of £3,823,200. On 23 October 2017, the High Court sanctioned a capital reduction pursuant to which all of the issued A deferred shares of 19 pence each, all of the issued B deferred shares of 0.9 pence each and all of the issued C deferred shares of 0.09 pence each in the capital of the Company were cancelled and extinguished. This capital reduction resulted in the capital of the Company being reduced by £5,632,724.62 from £7,203,590.98 to £1,570,866.36 and this amount was written off against retained losses. The unrealised gain on valuation of investments of £3,823,200 is not deemed to be distributable, hence the Company continues to have a negative distributable reserves position meaning that it is unable to declare dividends or make distributions to Shareholders.

The Company has, however, built up a substantial Share Premium Account through the issue of shares for cash at values in excess of the nominal value of those shares. As at the date of this document, the balance standing to the credit of the Share Premium Account is £6,279,722.06. This share premium account constitutes a non-distributable reserve for the purposes of the Act. The Company is therefore seeking the approval of Shareholders to cancel the Share Premium Account in its entirety which, subject to the confirmation of the High Court, will enable the Company to eliminate the retained losses and create distributable reserves.

The distributable reserves will be available for the Directors to use for the purposes of paying dividends, either in cash or 'in specie', should circumstances in the future make it desirable to do so. The ability to make dividend payments provides the flexibility to consider paying a "dividend in specie" to Shareholders of shares the Company holds in SkinBioTherapeutics plc, should it be appropriate to do so. This is part of the Company's strategy of building value across OptiBiotix divisions and where possible releasing value back to Shareholders.

Further details of the Capital Reduction are set out in paragraphs 3, 4 and 5 below.

3. Capital Reduction - Share Premium Account

Share premium is treated as part of the capital of a company and arises on the issue by a company of shares at a premium to their nominal value. The premium element is credited to the share premium account.

The share premium account is a non-distributable capital reserve and a company's ability to use any amount credited to that reserve is limited by the Companies Act. However, with the approval of its shareholders by way of a special resolution and subsequent confirmation by the High Court, a company may reduce or cancel its share premium account and in certain circumstances either return all or part of the sum arising to shareholders as a return of capital, or credit some or all of such sum arising to its profit and loss account.

To the extent that the release of such a sum from the share premium account creates or increases a credit on the profit and loss account, that sum represents a company's distributable reserves.

As mentioned above, the cancellation of the Share Premium Account will eliminate the Company's retained losses and create distributable reserves equal to the balance.

4. Capital Reduction - Procedure

In order to effect the Capital Reduction, the Company firstly requires the authority of its Shareholders by the passing of the Resolution at the General Meeting to approve the cancellation of the Share Premium Account.

Secondly, the Capital Reduction must be confirmed by the High Court, to which the Company will make an application if the Resolution is passed. The Court Hearing to confirm the Capital Reduction is expected to be held on 27 February 2018. Shareholders will have the right to attend the Court Hearing in person or through counsel or other suitably qualified persons to support or oppose the sanction of the Capital Reduction.

The Capital Reduction will then take effect when the Court Order confirming it, and a statement of capital approved by the High Court, have been delivered to and registered by the Registrar of Companies. The Effective Date of the Capital Reduction is currently expected to be 5 March 2018. That date is likely to be within a few working days after the Court Hearing, which is currently expected to be on or around 27 February 2018.

In order to approve the Capital Reduction, the High Court will need to be satisfied that the interests of the Company's creditors will not be prejudiced by the Capital Reduction. The Company will have to give such undertakings or other forms of creditor protection as the High Court may require (if any) for the benefit of the Company's creditors at the date on which the Capital Reduction becomes effective. These may include seeking the consent of the creditors to the cancellation of the Share Premium Account or the provision by the Company to the High Court of an undertaking to deposit a sum of money into a blocked account created for the purposes of discharging creditors of the Company.

The Board reserves the right (where necessary by application to the High Court) to abandon, discontinue or adjourn any application to the High Court for confirmation of the Capital Reduction, and hence the Capital Reduction itself, if the Board believes that the terms required to obtain confirmation are unsatisfactory to the Company or if as the result of any material unforeseen event the Board considers that to continue with the Capital Reduction is inappropriate or inadvisable.

5. Effect of the Capital Reduction

If approved by Shareholders and confirmed by the High Court, the Capital Reduction will result in the creation of distributable reserves which will allow the Company to pay dividends in due course, should it be appropriate or desirable to do so. The Capital Reduction will not affect the number of Ordinary Shares in issue, the nominal value per Ordinary Share or the voting or dividend rights of any Shareholder.

6. The General Meeting

Set out at the end of this document is a notice convening the General Meeting to be held on 25 January 2018 at the offices of Jeffreys Henry LLP, Finsgate, 5-7 Cranwood Street, London EC1V 9EE at 11.00 a.m., at which the Resolution will be proposed for the purposes of approving the Capital Reduction.

The Resolution, which will be proposed as a special resolution, is to cancel the total amount standing to the credit of the Share Premium Account of the Company, being £6,279,722.06 as at the date of this document. As a special resolution, the Resolution requires votes in favour representing 75 per cent. or more of the votes cast (in person or by proxy) at the General Meeting in order to be passed.

7. Action to be taken

A Form of Proxy for use in connection with the General Meeting accompanies this document. Whether or not you intend to be present at the General Meeting, you are requested to complete, sign and return the Form of Proxy in accordance with the instructions thereon to Share Registrars Limited at The Courtyard, 17 West Street, Farnham, Surrey GU9 7DR, as soon as possible, but in any event so as to be received by no later than 11.00 a.m. on 23 January 2018, or, in the event of an adjournment of the meeting, 48 hours before the adjourned meeting (excluding non-working days).

If you hold your shares in uncertificated form in CREST, you may appoint a proxy or proxies by utilising the CREST electronic proxy appointment service in accordance with the procedures described in the CREST Manual as set out in the Notice of General Meeting at the end of this document. Proxies submitted via CREST must be received by Share Registrars Limited (ID 7RA36) no later than 11.00 a.m. on 23 January 2018, or, in the event of an adjournment of the meeting, 48 hours before the adjourned meeting (excluding non-working days). The appointment of a proxy using the CREST electronic proxy appointment service will not preclude a Shareholder from attending and voting in person at the General Meeting should they wish to do so.

8. Recommendation

The Directors consider that all the proposals to be considered at the General Meeting are in the best interests of the Company and its shareholders as a whole and are most likely to promote the success of the Company. Accordingly, the Directors unanimously recommend that you vote in favour of the Resolution to be proposed at the General Meeting as they intend to do in respect of their own beneficial holdings currently amounting to 12.7 per cent. of the issued share capital of the Company.

Yours faithfully

Neil Davidson CBE



The following definitions apply throughout this document (including the Notice of General Meeting) and in the accompanying Form of Proxy, unless the context requires otherwise:

"Articles" the articles of association of the Company;
"Board" or "Directors" the directors of the Company, as at the date of this document, whose names are set out on page 5 of this document;
"Capital Reduction" the proposed reduction of the share capital of the Company under section 641 of the Act, involving the cancellation of the Share Premium Account;
"Company" or "OptiBiotix" OptiBiotix Health plc, a company incorporated in England and Wales with registered number 05880755 whose registered office is at Innovation Centre, Innovation Way, Heslington, York YO10 5DG;
"Companies Act" or "Act" the Companies Act 2006;
"Court Hearing" the hearing by the High Court of the claim form to confirm the Capital Reduction under section 648 of the Act;
"Court Order" the order of the High Court confirming the Capital Reduction;
"CREST" the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the operator (as defined in those regulations);
"CREST Manual" the CREST Manual referred to in agreements entered into by Euroclear and available at www.euroclear.com/CREST;
"CREST Regulations" the Uncertificated Securities Regulations 2001 (S.I. 2001 No. 3755);
"Effective Date" expected to be 5 March 2018;
"Euroclear" Euroclear UK & Ireland Limited;
"Form of Proxy" the form of proxy which accompanies this document for use by Shareholders in connection with the General Meeting;
"General Meeting" the general meeting of the Company convened to be held at 11.00 a.m. on 25 January 2018 and any adjournment thereof, to consider and, if thought fit, pass the Resolution, notice of which is set out at the end of this document;
"High Court" the High Court of Justice in England and Wales;
"Notice of General Meeting" or "Notice" the notice of the General Meeting set out at the end of this document;
"Ordinary Shares" ordinary shares of 2 pence each in the capital of the Company;
"Registrar of Companies" the Registrar of Companies in England and Wales, within the meaning of the Act;
"Resolution" the special resolution set out in the Notice of General Meeting;
"Shareholders" holders of Ordinary Shares in the Company from time to time;
"Share Premium Account" the share premium account of the Company;
"uncertificated form" or "in uncertificated form" recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST; and
"UK" the United Kingdom of Great Britain and Northern Ireland.