Prospectus • Sep 7, 2023
Prospectus
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If you are in any doubt about the action to be taken, you should immediately consult a person authorised under the Financial Services and Markets Act 2000 (FSMA) who specialises in advising on the acquisition of shares and other securities.
If you have sold or otherwise transferred all of your shares in Blackfinch Spring VCT plc (the "Company"), please send this document and accompanying documents, as soon as possible, to the purchaser , transferee , stockbroker, authorised financial adviser or other person through whom the sale or transfer was effected for delivery to the purchaser or transferee.
This Circular has been approved by the Financial Conduct Authority ("FCA") in accordance with section 87A of the FSMA and will be made available to the public.
An application has been made to the FCA for the Ordinary Shares to be issued under the Offer to be listed on the premium segment of the Official List and will be made to the London Stock Exchange for those Ordinary Shares to be admitted to trading on its main market for listed securities.
Howard Kennedy Corporate Services LLP, which is authorised and regulated in the United Kingdom by the FCA, is acting for the Company and no-one else and will not, subject to the responsibilities and liabilities imposed by FSMA or the regulatory regime established thereunder, be responsible to any other person for providing advice in connection with any matters referred to herein.
_________________________________________________________________________________
(Registered in England and Wales with registered number 12166417)
General Meeting in connection with recommended proposals to:
Your attention is drawn to the letter from the Chairman of the Company set out in Part II of this document which contains a recommendation by your Board to vote in favour of the Resolutions. Your attention is also drawn to the risk factors set out in Part I of this document.
_________________________________________________________________________________
You will find set out at the end of this document a notice of the General Meeting, to be held at 11 am on 10 October 2023 at No.1 London Bridge, London SE1 9BG, to approve the Resolutions.
The right to vote at the General Meeting is determined by reference to the register of members of the Company at close of business two days prior to the General Meeting. Accordingly, to be entitled to vote, Shareholders must be entered in the register of members by close of business on 6October 2023. To be valid, the forms of proxy for the General Meeting should be returned not less than 48 hours before the meeting (excluding weekends and public holidays), either by post or by hand (during normal business hours only) to the Company's Registrar, The City Partnership (UK) Limited, The Mending Rooms, Park Valley Mills, Meltham Road, Huddersfield HD4 7BH. If you are a Shareholder who has opted for electronic communications, then you will have been sent an email which includes information on how to appoint a proxy on-line.
As an alternative to completing and returning a form of proxy by post or by hand, you may appoint a proxy electronically through the Registrar's online proxy voting application which can be found by copying https://proxy-blackfinch-gm.cpip.io into your web browser (the ""Proxy Voting App"). You will need your City investor number (CIN) and your "Access Code" which may be found either on the form of proxy or in the email sent to you by the Registrar.
| EXPECTED TIMETABLE OF PRINCIPAL EVENTS | 4 | |
|---|---|---|
| DIRECTORS, MANAGER AND ADVISERS | 5 | |
| PART I | RISK FACTORS | 6 |
| PART II | LETTER FROM THE CHAIRMAN | 7 |
| PART III | ADDITIONAL INFORMATION | 12 |
| PART IV | DEFINITIONS | 20 |
| NOTICE OF GENERAL MEETING 24 |
| Publication of this Circular | 7 September 2023 |
|---|---|
| Latest time and date for receipt of Forms of Proxy for the General Meeting |
11 a.m. on 6 October 2023 |
| Voting record date | close of business on 6 October 2023 |
| General Meeting | 11 am on 10 October 2023 |
Future times and dates are indicative only and are subject to change by the Company. If the expected timetable of events changes from the above, the Company will release an announcement to this effect.
References to time in this Circular are to London time.
| Directors (all non-executive) | Peter Lionel Raleigh Hewitt (Chairman) Dr Katrina Tarizzo Dr Reuben Wilcock |
|---|---|
| all of (registered office, at) | 1350-1360 Montpellier Court Gloucester Business Park Brockworth Gloucester Gloucestershire GL3 4AH |
| Investment Manager and Promoter | Blackfinch Investments Limited 1350-1360 Montpellier Court Gloucester Business Park Brockworth Gloucester Gloucestershire GL3 4AH |
| VCT Tax Adviser | Philip Hare & Associates LLP 6 Snow Hill London EC1A 2AY |
| Sponsor | Howard Kennedy Corporate Services LLP No. 1 London Bridge London SE1 9BG |
| Auditors | BDO LLP 55 Baker Street London W1U 7EU |
| Solicitors | Howard Kennedy LLP No. 1 London Bridge London SE1 9BG |
| Secretary | The City Partnership (UK) Limited The Mending Rooms, Park Valley Mills Meltham Road Huddersfield HD4 7BH |
| Registrars | The City Partnership (UK) Limited The Mending Rooms Park Valley House Meltham Road Huddersfield HD4 7BH |
| Receiving Agents in respect of the Offer | Blackfinch Investments Limited 1350-1360 Montpellier Court Gloucester Business Park Brockworth Gloucester Gloucestershire GL3 4AH |
Shareholders should consider carefully the following risk factors in addition to the other information presented in this document. If the risks described below were to occur, they could have a material effect on the Company's business, financial condition or results of operations. The risks and uncertainties described below are not the only ones the Company, the Board or Shareholders will face in relation to the proposals set out in this document. Additional risks not currently known to the Company or the Board, or that the Company or the Board currently believe are not material in relation to such proposals, may also adversely affect the Company's business, financial condition or results of operations. Shareholders should consult a person authorised under FSMA who specialises in advising on investments in shares and other securities in respect of the matters under consideration in this document.
Completion of the Offer is dependent upon the approval by Shareholders of Resolutions 1 to 3 to be proposed at the General Meeting. There can be no guarantee that this condition will be satisfied and, if all of these Resolutions are not passed, the Offer will be withdrawn and the Company will be responsible for the costs of the proposals relating to the Offer, which could amount to up approximately £100,000.
As envisaged by the investment policy of the Company, it is intended that risk will be spread by investing in a number of different businesses within different industry sectors using a mixture of securities. The maximum amount currently permitted to be invested in any one company (inclusive of any related group company) is limited to 15% of the value of the portfolio at the time of investment, in accordance with the VCT legislation. If the Offer does not proceed and the Company is, therefore, not able to raise further funds, this may prevent the Company from creating a more diversified portfolio of investments and inhibit the Company from taking advantage of attractive investment opportunities it believes should become available a . It also create a less diversified portfolio than otherwise thereby increasing the risk to investors. It will also limit the Company's ability to make any follow on investments into its portfolio of existing businesses, which might dilute the Company's holding if further funds are raised from elsewhere or constrain the growth of those businesses if they cannot raise any required funding elsewhere which might negatively impact the valuations of Investee Companies.
The current hostilities in Ukraine and the resulting sanctions imposed on the Russian Federation by various countries around the world may have unforeseen, long term and far reaching consequences for the global economy and Investee Companies . In particular, the interruption and/or limitation in the supply of certain natural resources (such as oil and gas) could have a negative impact on the performance of the Investee Companies which may necessitate further investment in those companies to support their working capital. If the Offer does not proceed and the Company is, therefore, not able to raise further funds, this may prevent the Company from supporting any of its Investee Companies that have been so affected, which may affect their performance and may dilute the Company's holding
Inflation in the United Kingdom and elsewhere is currently running at rates not seen for many years. This has led to significant increases in consumer prices leading to a so-called 'cost of living crisis'. The cost of living crisis may cause a drop in demand for certain goods and services which could negatively impact the Investee Companies which may necessitate further investment in those companies to support their working capital. The recent increases in interest rates may have the same effect and if interest rates were to remain inflated over the near term, this may in itself have an adverse effect on the Investee Companies . If the Offer does not proceed and the Company is, therefore, not able to raise further funds, this may prevent the Company from supporting any of its Investee Companies that have been so affected, which may affect their performance and may dilute the Company's holdings.
(Registered in England and Wales with registered number 12166417)
Directors:
Peter Lionel Raleigh Hewitt (Chairman) Katrina Tarizzo Reuben Wilcock
Registered Office:
1350-1360 Montpellier Court Gloucester Business Park Brockworth Gloucester Gloucestershire GL3 4AH
7 September 2023
Dear Shareholder,
Proposals to authorise the issue of the Ordinary Shares whilst disapplying pre-emption rights; approve the payment of the Investment Manager Promoter Fees; authorise the purchase of Shares by the Company and approve the cancellation of the Company's share premium account.
Following on from last year's successful fund raise, I am pleased to announce that the Company is seeking to raise up to a further £20 million (with a £10 million over allotment facility ), before expenses, by way of an offer for subscription for Ordinary Shares to existing and new shareholders and I am writing to you because this requires your approval, as a shareholder in the Company. Your Board firmly believe that raising fresh capital for the Company to allow it to make further VCT qualifying investments and expand its portfolio is in the best interests of the Company and Shareholders.
The Company's previous share offers, launched on 19 November 2019, 2 October 2020, 3 September 2021 and 2 September 2022 raised approximately £25.7 million, in total.
This document explains the proposal to grant authorities to issue the Ordinary Shares whilst disapplying pre-emption rights, which is needed to launch the Offer, and for the Company to buy back its own Shares to support the Company's buy back policy, both of which are required to be approved by Shareholders under company law and a proposal to pay a fee to the Company's Promoter Blackfinch Investments Limited ("Blackfinch"), for promoting the Offer, which is required to be approved by Shareholders under the Listing Rules.
The Company is seeking to raise £20 million, with an over-allotment facility of £10 million, through the Offer , which will open today. Applications will be made for all of the Ordinary Shares issued under the Offer to be admitted to trading on the London Stock Exchange's main market for listed securities and to the premium segment of the Official List of the Financial Conduct Authority.
The net proceeds of the Offer will be applied in accordance with the Company's published investment policy, which is to invest in innovative growth-stage technology-enabled VCT qualifying companies which are on the path to their scale-up journey. To date, the Company has invested approximately £20.1 million in 24 VCT qualifying and UK based businesses in the following technology sectors: Property, Advertising, Education, Recruitment, Transport, Supply Chain, Software, Marketing, Water, HR, Service Governance, Safety, Sleep, Financial and Market Intelligence. Funds raised under the Offer will also put the Company in a stronger position to provide follow on investment to its existing Investee Companies, if required, and companies in the Blackfinch Ventures EIS Portfolios which are managed by the Company's Investment Manager, Blackfinch Investments Limited, thereby benefiting from its existing deep knowledge, experience and past data on those companies.
Our Investment Manager, Blackfinch Investments Limited, continues to be inundated with exciting investment proposals from UK businesses which are looking for further capital to fuel their growth. In addition, many of the existing Investee Companies have either been well positioned to benefit from changing market conditions, or have successfully adapted to them, and consequently offer techenabled products and services that suit the needs of the times, positioning them well for further investment.
Built on over 25 years of investment track record, the name Blackfinch Investments Limited first came into being on the anniversary of Darwin's birth, 12th February 2013. Since then Blackfinch Investments Limited has grown into a group of companies, with a shared vision of a more sustainable future. It has a management team who have extensive experience across sectors including SEIS, EIS, VCT, renewables, property, AIM securities and multi-asset investment solutions. Run by a team of nine investment professionals, Blackfinch Ventures is supported by the wider Blackfinch Group and an external network of experienced founders, industry leaders and experts, called Venture Partners. Collectively, these individuals give access to over 300 years of experience of investing in, mentoring and running early stage companies. As at 29 August 2023 Blackfinch group had over £746 million of funds under management and administration.
VCTs were introduced by the UK Government in 1995 to encourage individuals to invest in UK smaller companies. VCTs have raised over £1 billion in each of the last two tax years. (Source: AIC)
Shareholders are asked to authorise the Board to allot the Ordinary Shares pursuant to the Offer whilst disapplying pre-emption rights, under CA 2006, which are the subject of Resolutions 1 and 3.
As is customary in the VCT sector Blackfinch Investments Limited ,in its capacity as the Promoter of the Offer ,charges the VCT a fee for raising funds. In respect of the Offer it is proposed that Blackfinch Investments Limited be appointed as the Promoter, and that the Company pay a Promoter Fee to Blackfinch Investments Limited amounting to 2.5% of the monies subscribed for Shares under the Offer less any discounts for early investment ("Promoter Fee").
For direct Shareholders and Shareholders not receiving financial advice and who are introduced through an execution only broker, the Promoter will charge an additional 3% (in respect of direct Shareholders, or up to 3% in respect of Shareholders introduced through an execution-only broker) of the monies subscribed for Shares under the Offer, less any discounts for early investment ("Direct Shareholder Premium"). The Direct Shareholder Premium and the Promoter Fee together being defined as the "Investment Manager Promoter Fees").
The Promoter will also pay Blackfinch 0.5% of the value of the Investor's portfolio per annum ("Direct Investor Ongoing Fee") out of its Annual Advisory Fee in consideration for promoting the Offer. Blackfinch will be responsible for the payment of initial commission to authorised financial intermediaries in respect of execution only clients.
Accordingly, under an offer agreement (the "2023 Offer Agreement") dated 7 September 2023 between the Company, the Directors, Howard Kennedy and Blackfinch, Blackfinch will, subject to the passing of Resolution 2 at the General Meeting, receive the Investment Manager Promoter Fees, out of which Blackfinch will discharge the costs of the Offer.
Under the Listing Rules Blackfinch Investments Limited is a related party of the Company, as it acts as the Company's Investment Manager and Promoter. Accordingly, the payment of the Investment Manager Promoter Fees will constitute a "related party transaction" under the Listing Rules, being a transaction between the Company and Blackfinch, its Investment Manager. As such the payment of the Investment Manager Promoter Fees is required to be approved in advance by the Shareholders at the General Meeting, under the Listing Rules. This is the subject of Resolution 2.
Although the existing Ordinary Shares are, and the Ordinary Shares issued under the Offer will be, listed, Shareholders may find it difficult to sell their Shares in the secondary market and, therefore, to improve liquidity, the Company has established a buy-back policy for the Shares subject to the requirements of the Listing Rules. As a guide and subject to the Board's discretion and providing that, in the opinion of the Board, there is adequate surplus cash and reserves available, the Company will consider buying back Shares at a discount of 5% of the latest published net asset value per Share. The approval of the authority for the Company to buy back Shares is the subject of Resolution 4, and is required under CA 2006.
Notice of the required General Meeting is set out at the end of this document. The General Meeting will be held at 11 am on 10 October 2023 at No.1 London Bridge, London SE1 9BG. The Offer is conditional upon Resolutions 1 to 3 being passed at the General Meeting.
An explanation of the Resolutions is set out below:
Resolution 1 is an ordinary resolution and seeks the approval of Shareholders to authorise the Directors pursuant to Section 551 CA 2006 to allot Ordinary Shares up to an aggregate nominal value of £435,000 (representing approximately 158% of the issued share capital of the Company as at 6 September 2023, this being the latest practicable date prior to publication of this document) in connection with the Offer and other offers for subscription. The authority conferred by this Resolution 1 will expire at the conclusion of the Company's next annual general meeting or on the expiry of fifteen months following the passing of this Resolution 1, whichever is the later (unless previously renewed, varied or revoked by the Company in general meeting).
Resolution 2 is an ordinary resolution to approve the payment of the Investment Manager Promoter Fees to Blackfinch, details of which are set out under the heading "2023 Offer Agreement" on page 8 above, in accordance with the Listing Rules as Blackfinch is a related party under those rules. Blackfinch is not a Shareholder and will not, therefore, vote on this Resolution 2 at the General Meeting and, as a related party to the Company under the Listing Rules, has undertaken to take all reasonable steps to ensure that its associates (as defined in the Listing Rules) will not vote on this Resolution 2 at the General Meeting.
Resolution 3 is a special resolution and seeks the approval of Shareholders to dis-apply pre-emption rights in respect of any Ordinary Shares issued pursuant to the authority contained in Resolution 1, in accordance with CA 2006 (up to an aggregate nominal value of £435,000, which represents approximately 158% of the issued share capital of the Company as at 6 September2023, this being the latest practicable date prior to publication of this document). The authority conferred by Resolution 3 will expire at the conclusion of the Company's next annual general meeting or on the expiry of fifteen months following the passing of this Resolution 3, whichever is the later (unless previously renewed, varied or revoked by the Company in general meeting).
The authorisations conferred by Resolutions 1 and 3 will be used to enable the Company to issue Ordinary Shares under the Offer and other smaller share offers.
Resolution 4 is a special resolution and seeks the approval of Shareholders to authorise the Company to make market purchases pursuant to CA 2006 of up to such number of Ordinary Shares as is equal to 14.99% of the issued Ordinary Shares immediately following the closing of the Offer. Any Shares bought back under this authority may be cancelled or held in treasury as may be determined by the Board. The authority conferred by Resolution 4 will expire at the conclusion of the Company's next annual general meeting or on the expiry of fifteen months following the passing of Resolution 4, whichever is the later (unless previously renewed, varied or revoked by the Company in general meeting).
Resolution 5 is a special resolution to cancel the share premium account of the Company at the date an order is made confirming such cancellation by the Court, to create a pool of distributable reserves, in accordance with the CA 2006.
The ordinary Resolutions require the approval of a simple majority of 50% of the votes cast in respect of them. The special Resolutions require the approval of 75% of the votes cast in respect of them.
However, before taking any action, you are recommended to read the further information set out in this document and to seek advice from your independent Financial Adviser.
If you are a Shareholder who has elected for notifications of communications by post you will receive with this document the form of proxy for use at the General Meeting. If you are a Shareholder who has opted for electronic communications, then you will have been sent an email which includes information on how to appoint a proxy on-line
Whether or not you propose to attend the General Meeting, you are requested to complete and return the relevant forms of proxy so as to be received not less than 48 hours before the time appointed for holding of the General Meeting (excluding weekends and public holidays). Completion and return of a form of proxy will not prevent you from attending and voting in person at the General Meeting should you wish to do so. As an alternative to completing and returning a form of proxy by post or by hand, you may appoint a proxy electronically through the Registrar's online proxy voting application which can be found by copying https://proxy-blackfinch-gm.cpip.io into your web browser (the ""Proxy Voting App"). You will need your City investor number (CIN) and your "Access Code" which may be found either on the form of proxy or in the email sent to you by the Registrar.
Your Board believes that the proposals described in this Circular, including the Resolutions, are in the best interests of the Shareholders as a whole. Reuben Wilcock is a director of the Company and an employee of the Investment Manager, which is a related party of the Company under the Listing Rules. Accordingly, Reuben Wilcock has not taken part in the Board's consideration of Resolution 2.
The Directors consider that the payment of the Investment Manager Promoter Fees is fair and reasonable so far as the Shareholders are concerned, the Directors having been so advised by Howard Kennedy, as Sponsor to the Company. In providing this advice, Howard Kennedy has taken into account the Directors' commercial assessment of the terms of the 2023 Offer Agreement relating to the payment of the Investment Manager Promoter Fees. Reuben Wilcock ,for the reasons stated in the previous paragraph, has not taken part in the Board's consideration of Resolution 2 relating to the payment of the Investment Manager Promoter Fees.
Accordingly, the Board recommends Shareholders to vote in favour of the Resolutions at the General Meeting. Reuben Wilcock, as a director of the Company and an employee of the Investment Manager, will not vote on Resolution 2 at the General Meeting in respect of his holding of Ordinary Shares in the Company as he is not an independent Shareholder. The other Directors intend to vote in favour of all the Resolutions in respect of their own beneficial holdings of, in aggregate, 5,063 Ordinary Shares (representing approximately 0.1% of the issued share capital as at 6 September 2023). Blackfinch does not hold any shares in the Company and, therefore, it will not vote on Resolution 2 at the General Meeting. Blackfinch has also undertaken to take all reasonable steps to ensure that its Associates will not vote on Resolution 2 at the General Meeting.
Yours sincerely
Peter LR Hewitt, Chairman
Blackfinch Spring VCT plc
The Company and the Directors, whose names appear on page 5, accept responsibility for the information contained in this document. To the best of the knowledge of the Company and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.
2.1 As at 6 September 2023 (being the latest practicable date prior to the publication of this document), the issued ordinary share capital of the Company was as follows:
| Aggregate nominal | Number of Shares |
|---|---|
| value (£) | |
£275,724.70 27,572,470
2.2 As at 6 September 2023 (being the latest practicable date prior to the publication of this document), no warrants or options to subscribe for Ordinary Shares are outstanding, nor did the Company hold any share capital in treasury.
3.1 As at the date of this document the Directors, their immediate families and connected persons within the meaning of Rule 3 of the Disclosure Guidance and Transparency Rules ("DTR 3") have, and, assuming (i) the Offer is fully subscribed (assuming the over-allotment facility is fully utilised) at an Offer Price of £0.99 and (ii) that the fees payable to the Promoter are 5.5%, the Directors and their immediate families and connected persons within the meaning of DTR 3 will immediately following the Offer have the following interests in the share capital of the Company, the existence of which is known to or could with reasonable diligence be ascertained by the Directors:
| Number of Ordinary Shares before the Offer |
% of issued Ordinary Shares before the Offer |
|
|---|---|---|
| Peter L R Hewitt | 5,063 | 0.02% |
| Katrina Tarizzo | 0 | 0% |
| Reuben Wilcock | 3,298 | 0.012% |
| Number of Ordinary Shares following the Offer |
% of issued Ordinary Shares following the Offer |
|
| Peter L R Hewitt | 5,063 | 0.01% |
| Katrina Tarizzo | 0 | 0 |
The Company is not aware of any person, not being a member of its administrative, management or supervisory bodies who, as at the date of this document, is directly or indirectly interested in 3% or more of the issued share capital of the Company and is required to notify such interest in accordance with the Disclosure Guidance and Transparency Rules or who directly or indirectly controls the Company.
5.1 The following are (a) the only contracts, not being contracts entered into in the ordinary course of business, that have been entered into by the Company since incorporation and which are or may be material to the Company, and (b) the only contracts, not being contracts entered into in the ordinary course of business, that have been entered into by the Company since incorporation and which contain any provisions under which the Company has any obligation or entitlement which are material to the Company as at the date of this document:
5.1.1 An offer agreement dated 7 September 2023 and made between the Company (1), the Directors (2), Blackfinch (3) and the Sponsor (4), (the "2023 Offer Agreement") pursuant to which the Sponsor has agreed to act as Sponsor to the Offer and Blackfinch has undertaken, as agent of the Company, to use its reasonable endeavours to procure subscribers for Ordinary Shares under the Offer. Under the 2023 Offer Agreement, the Company will pay Blackfinch a commission of up to 5.5% of the value of each accepted application for Ordinary Shares received pursuant to the Offer (plus VAT, if applicable).
Blackfinch will be responsible for the payment of initial commission to authorised financial intermediaries in respect of execution only clients.
Under the 2023 Offer Agreement, which may be terminated by the parties in certain circumstances, the Company, Blackfinch and the Directors have given certain warranties and indemnities. Warranty claims must be made by no later than three months after the date of the second annual general meeting of the Company following the closing date of the Offer at which Shareholders approve the Company's accounts or (if earlier) by the date the Company is subject to a takeover. The Company has also agreed to indemnify the Sponsor in respect of its role as Sponsor and under the 2023 Offer Agreement. The warranties and indemnities are in usual form for a contract of this type and the warranties are subject to limits of one year's director fees for each Director. The 2023 Offer Agreement may be terminated, inter alia, if any statement in the Prospectus is untrue, any material omission from the Prospectus arises or any breach of warranty occurs.
5.1.2 An offer agreement dated 2 September 2022 and made between the Company (1), the Directors (2), Blackfinch (3) and the Sponsor (4), (the "2022 Offer Agreement") pursuant to which the Sponsor agreed to act as Sponsor to the 2022 Offer and Blackfinch undertook, as agent of the Company, to use its reasonable endeavours to procure subscribers for Ordinary Shares under the 2022 Offer. Under the 2022 Offer Agreement, the Company paid Blackfinch a commission of up to 5.5% of the value of each accepted application for Ordinary Shares received pursuant to the 2022 Offer (plus VAT, if applicable).
Blackfinch was responsible for the payment of initial commission to authorised financial intermediaries in respect of execution only clients.
Under the 2022 Offer Agreement, which could be terminated by the parties in certain circumstances, the Company, Blackfinch and the Directors gave certain warranties and indemnities. Warranty claims must be made by no later than three months after the date of the second annual general meeting of the Company following the closing date of the 2022 Offer at which Shareholders approve the Company's accounts or (if earlier) by the date the Company is subject to a takeover. The Company also agreed to indemnify the Sponsor in respect of its role as Sponsor under the 2022 Offer Agreement. The warranties and indemnities were in usual form for a contract of this type and the warranties were subject to limits of one year's director fees for each Director. The 2022 Offer Agreement could be terminated, inter alia, if any statement in the prospectus relating to the 2022 Offer was untrue, any material omission from that prospectus arose or any breach of warranty occurred.
5.1.3 An offer agreement dated 3 September 2021 and made between the Company (1), the Directors (2), Blackfinch (3) and the Sponsor (4), (the "2021 Offer Agreement") pursuant to which the Sponsor agreed to act as Sponsor to the 2021 Offer and Blackfinch undertook, as agent of the Company, to use its reasonable endeavours to procure subscribers for Ordinary Shares under the 2021 Offer. Under the 2021 Offer Agreement, the Company paid Blackfinch a commission of up to 5.5% of the value of each accepted application for Ordinary Shares received pursuant to the 2021 Offer (plus VAT, if applicable).
Blackfinch was responsible for the payment of initial commission to authorised financial intermediaries in respect of execution only clients.
Under the 2021 Offer Agreement, which could be terminated by the parties in certain circumstances, the Company, Blackfinch and the Directors gave certain warranties and indemnities. Warranty claims must be made by no later than three months after the date of the second annual general meeting of the Company following the closing date of the 2021 Offer at which Shareholders approve the Company's accounts or (if earlier) by the date the Company is subject to a takeover. The Company also agreed to indemnify the Sponsor in respect of its role as Sponsor under the 2021 Offer Agreement. The warranties and indemnities were in usual form for a contract of this type and the warranties were subject to limits of one year's director fees for each Director. The 2021 Offer Agreement could be terminated, inter alia, if any statement in the prospectus relating to the 2021 Offer was untrue, any material omission from that prospectus arose or any breach of warranty occurred.
5.1.4 An offer agreement dated 2 October 2020 and made between the Company (1), the Directors (2), Blackfinch (3) and the Sponsor (4), (the "2020 Offer Agreement") pursuant to which the Sponsor agreed to act as Sponsor to the 2020 Offer and Blackfinch undertook, as agent of the Company, to use its reasonable endeavours to procure subscribers for Ordinary Shares under the 2020 Offer. Under the 2020 Offer Agreement, the Company paid Blackfinch a commission of up to 5.5% of the value of each accepted application for Ordinary Shares received pursuant to the 2020 Offer (plus VAT, if applicable).
In respect of the 2020 Offer Blackfinch were responsible for the payment of initial commission to authorised financial intermediaries in respect of execution only clients.
Under the 2020 Offer Agreement, which could be terminated by the parties in certain circumstances, the Company, Blackfinch and the Directors gave certain warranties and indemnities. Warranty claims must be made by no later than three months after the date of the second annual general meeting of the Company following the closing date of the 2020 Offer at which Shareholders approve the Company's accounts or (if earlier) by the date the Company is subject to a takeover. The Company also agreed to indemnify the Sponsor in respect of its role as Sponsor and under the 2020 Offer Agreement. The warranties and indemnities were in usual form for a contract of this type and the warranties were subject to limits of one year's director fees for each Director. The 2020 Offer Agreement could be terminated, inter alia, if any statement in the prospectus relating to the 2020 Offer was untrue, any material omission from that prospectus arose or any breach of warranty occurred.
5.1.5 An Offer Agreement dated 11 November 2019 and made between the Company (1), the Directors (2), Blackfinch (3) and the Sponsor (4), (the "2019 Offer Agreement") pursuant to which the Sponsor agreed to act as Sponsor to the 2019 Offer and Blackfinch undertook, as agent of the Company, to use its reasonable endeavours to procure subscribers for Ordinary Shares under the 2019 Offer. Blackfinch was entitled to any interest earned on subscription monies prior to the allotment of Ordinary Shares. Under the 2019 Offer Agreement, the Company agreed to pay Blackfinch a commission of up to 5.5% of the value of each accepted application for Ordinary Shares received pursuant to the 2019 Offer (plus VAT, if applicable).
In respect of the 2019 Offer, Blackfinch was responsible for the payment of initial commission to authorised financial intermediaries in respect of execution only clients under the 2019 Offer.
Under the 2019 Offer Agreement, which could be terminated by the parties in certain circumstances, the Company, Blackfinch and the Directors gave certain warranties and indemnities. Warranty claims must be made by no later than three months after the date of the second annual general meeting of the Company following the closing date of the 2019 Offer at which Shareholders approve the Company's accounts or (if earlier) by the date the Company is subject to a takeover. The Company also agreed to indemnify the Sponsor in respect of its role as Sponsor under the 2019 Offer Agreement. The warranties and indemnities are in usual form for a contract of this type and the warranties are subject to limits of one year's director fees for each Director The 2019 Offer Agreement could be terminated, inter alia, if any statement in the prospectus for the 2019 Offer was untrue, any material omission from that prospectus arose or any breach of warranty occurred.
2023 Receiving Agent Agreement
Investment Management Agreement
5.1.8 An agreement (the "Investment Management Agreement") (as varied) dated 11 November 2019 and made between the Company and Blackfinch Investments Limited whereby Blackfinch was appointed as the Company's external alternative investment fund manager to provide discretionary investment advisory services to the Company in respect of its portfolio of Qualifying Investments and Non-Qualifying Investments and to be responsible for the proper valuation of it investments
Blackfinch receives an annual fee equal to 2.5% of the Net Asset Value (plus VAT if applicable) payable quarterly in arrears. Blackfinch is entitled to reimbursement of expenses incurred in performing its duties under the Investment Management Agreement, and is also be entitled to receive and retain transaction and introductory fees, directors' fees, monitoring fees,
consultancy fees, corporate finance fees, syndication fees, exit fees and commissions in relation to Investee Companies.
The Investment Manager is also entitled to a Performance Fee payable in relation to each accounting period, subject to the Performance Value per Share being at least 130p at the end of the relevant accounting period. The amount of the Performance Fee will be equal to 20% of the amount by which the Performance Value per Share at the end of an accounting period exceeds the High Water Mark and multiplied by the number of Shares in issue at the end of the relevant period.
The appointment of the Investment Manager will continue unless and until terminated by either party giving to the other not less than 12 months' notice in writing, such notice not to take effect before the end of the fifth anniversary following the last allotment of Shares pursuant to an offer for subscription made by the Company. The Investment Management Agreement is subject to earlier termination by either party in certain circumstances.
The Investment Manager has agreed to indemnify the Company by such amount as is equal to the excess by which the Annual Running Expenses of the Company exceeds 3.5% of the Net Asset Value, calculated on an annual basis
The provision by the Investment Manager of discretionary investment advisory services is subject to the overall control, direction and supervision of the Directors.
Directors' Letters of Appointment
5.1.9 Each of the Directors entered into an agreement with the Company, dated 11 November 2019 in the case of Peter Hewitt, 18 September 2020 in the case of Reuben Wilcock, and 14 August 2023 in the case of Katrina Tarizzo, as referred to in paragraph 3.2 above whereby he or she is required to devote such time to the affairs of the Company as the Board reasonably requires consistent with their role as non-executive director. Peter Hewitt is entitled to receive an annual fee of £18,000 (increasing to £20,000 if more than £5m was raised under the 2019 Offer) (plus VAT if applicable), Katrina Tarizzo is entitled to receive an annual fee of £18,000 (plus VAT if applicable) and for the services to be provided by Reuben Wilcock , Blackfinch is entitled to receive an annual fee of £12,000 (plus VAT if applicable). Each party can terminate the agreement by giving to the other at least six months' notice in writing to expire at any time after the date 15 months from the respective commencement dates. No benefits are payable on termination.
Administration Agreement
5.1.10 An agreement dated 11 November 2019 and made between the Company and Blackfinch (the "Administration Agreement"), whereby Blackfinch will provide certain administration services and company secretarial services to the Company with regard to Investee Companies for an annual fee of the higher of 0.3% or Net Asset Value of £60,000 (plus VAT if applicable).
The Administration Agreement will continue unless and until terminated by either party giving to the other not less than 12 months' notice in writing, such
notice not to take effect before the end of the fifth anniversary following the last allotment of Shares pursuant to an offer for subscription made by the Company, but subject to early termination in certain circumstances.
5.1.11 A custody agreement dated 11 November 2019 between the Company and Blackfinch (the "Custody Agreement") under which Blackfinch agrees to hold securities in certificated form on behalf of the Company as custodian for an annual fee of £5,000 (plus VAT if applicable), terminable by either party giving to the other not less than 12 months' notice in writing, such notice not to take effect before the end of the fifth anniversary following the last allotment of Shares pursuant to an offer for subscription made by the Company, but subject to early termination in certain circumstances
Shares will be able to hold their Ordinary Shares in certificated or uncertificated form. It is expected that dealings will commence within ten Business Days of any allotment.
7 September 2023
| "2019 Offer" | the offer for subscription by the Company for Ordinary Shares in respect of the tax years 2019/20 and 2020/21 that was launched on 11 November 2019 |
|---|---|
| "2020 Offer" | the offer for subscription by the Company for Ordinary Shares in respect of the tax years 2020/21 and 2021/22 that was launched on 2 October 2020 |
| "2021 Offer" | the offer for subscription by the Company for Ordinary Shares in respect of the tax years 2021/22 and 2022/23 that was launched on 3 September 2021 |
| "2022 Offer" | the offer for subscription by the Company for Ordinary Shares in respect of the tax years 2022/23 and 2023/24 that was launched on 2 September 2022 |
| "2019 Offer Agreement" | the offer agreement dated 11 November 2019, between the Company, the Directors, Howard Kennedy and Blackfinch |
| "2020 Offer Agreement" | the offer agreement dated 2 October 2020, between the Company, the Directors, Howard Kennedy and Blackfinch |
| "2021 Offer Agreement" | the offer agreement dated 3 September 2021, between the Company, the Directors, Howard Kennedy and Blackfinch |
| "2022 Offer Agreement" | the offer agreement dated 2 September 2022, between the Company, the Directors, Howard Kennedy and Blackfinch |
| "Annual Advisory Fee" | the annual fee payable to Blackfinch under the Investment Advisory Agreement |
| "Annual Running Expenses" | the central running costs of the Company, including Directors' fees, the annual investment advisory fee and the administration fee but excluding transaction related fees and expenses, any performance fee and costs relating to the establishment of the Company and any annual trail commissions payable by or on behalf of the Company. |
| "Articles" | the articles of association of the Company, as amended from time to time |
| "Associates" | has the meaning given in the Listing Rules |
| "Blackfinch" (acting in its capacity as the investment manager to the Company or in its capacity as promoter of the Offer) or "the Investment Manager" |
Blackfinch Investments Limited of 1350-1360 Montpellier Court, Gloucester Business Park, Gloucester GL3 4AH |
| Blackfinch Group | Blackfinch Investments Limited and its holding and subsidiary companies |
|---|---|
| Blackfinch Ventures | Blackfinch Ventures is a trading name of Blackfinch Investments Limited and which encompasses the investment management business of Blackfinch Investments Limited comprised in managing the investments of the Blackfinch Ventures EIS Portfolios and Blackfinch Spring VCT plc |
| Blackfinch Ventures EIS Portfolios |
the discretionary portfolio service that is managed and administered by the Investment Manager and which provides a portfolio of investments in unquoted technology companies that meet the qualification requirements for enterprise investment scheme relief under the ITA |
| "Board" or "Directors" | the board of directors of the Company |
| "Business Days" | any day (other than a Saturday ) on which the clearing banks are open for normal banking business in sterling in the UK |
| "CA 2006" | Companies Act 2006 (as amended) |
| "Circular" | this document |
| "the Company" or the "Company" |
Blackfinch Spring VCT plc |
| "Disclosure Guidance & Transparency Rules" |
the disclosure guidance & transparency rules of the FCA |
| "EIS" | the Enterprise Investment Scheme, satisfying the requirements of Part 5 of ITA 2007 |
| "FCA" | the Financial Conduct Authority |
| "FSMA" | the Financial Services and Markets Act 2000 (as amended) |
| "General Meeting" | the general meeting of the Company convened for 11 am on 10 October 2023 (or any adjournment thereof) |
| "High Water Mark" | the higher of 130p and the highest Performance Value per Share at the end of any previous accounting period |
| "Howard Kennedy" | Howard Kennedy Corporate Services LLP |
| "Independent Shareholders" | Shareholders other than Blackfinch and its Associates |
| "Initial Adviser Charge" | the initial charges payable to advisers in connection with the Offer by or on behalf of Investors in respect of the provision of advice in connection with the Offer details of which are set out in the Prospectus |
| "Investor" | a subscriber for Ordinary Shares under the Offer |
| "Investee Company(ies)" | a company or companies in which the Company has invested in accordance with its published investment policy |
|---|---|
| "ITA 2007" | Income Tax Act 2007 (as amended) |
| "Listing Rules" | the listing rules of the FCA |
| "London Stock Exchange" | London Stock Exchange plc |
| "NAV" or "net asset value" | net asset value |
| "Non-Qualifying Investments" | those investments specified in section 274 ITA |
| "Offer" | the offer for subscription by the Company the terms of which are set out in this document |
| "Official List" | the official list of the FCA |
| "Ordinary Shares" | Ordinary Shares of 1p each in the capital of the Company (and each a "Share") |
| "Performance Value per Share" |
in relation to each accounting period of the Company, the total of the following: |
| (i) the NAV; |
|
| (ii) all Performance Fees previously paid or accrued by the Company to the Investment Manager for all previous accounting periods; and |
|
| (iii) the cumulative amount of dividends paid by the Company before the relevant accounting reference date (including the amount of those dividends in respect of which the ex dividend date has passed as at that date); |
|
| divided by the number of Shares in issue in the Company on the relevant date. |
|
| "Promoter Fee" | the initial fees payable by the Company to the Promoter for promoting the Offer, details of which are set out on page 8 |
| "Prospectus" | the prospectus issued by the Company dated 7 September 2023 |
| "Qualifying Investment" | an investment in a company which satisfies the requirements of Chapter 4 of Part 6 ITA, as described in Part 2 of this document |
| "2023 Receiving Agent Agreement" |
The agreement between the Company and Blackfinch dated 31 August 2023 pursuant to which Blackfinch has agreed to provide receiving agent services to the Company. |
| "Resolutions" | the resolutions to be proposed at the General Meeting |
| "Shareholder" | a holder of Ordinary Shares |
| "UK" | the United Kingdom |
| "VCT" or "venture capital | a company satisfying the requirements of Chapter 3 of Part 6 of |
|---|---|
| trust" | ITA 2007 for venture capital trusts |
| "VCT Rules" | Part 6 ITA 2007 and every other statute (including any orders, regulations or other subordinate legislation made under them) for the time being in force concerning VCTs |
NOTICE IS HEREBY GIVEN that a General Meeting of Blackfinch Spring VCT plc ("the Company") will be held at 11 am on 10 October 2023 at No. 1 London Bridge, London SE1 9BG for the purposes of considering and, if thought fit, passing the following resolutions, which will be proposed as to resolutions 1 and 2 as ordinary resolutions and as to resolutions 3 , 4 and 5 as special resolutions:
For the purpose of these Resolutions, words and expressions defined in the Circular shall have the same meanings in these Resolutions, save where the context requires otherwise.
Dated 7 September 2023
By order of the Board Registered Office: Peter LR Hewitt (Chairman) 1350-1360 Montpellier Court Gloucester Business Park Brockworth Gloucester Gloucestershire GL3 4AH
Information regarding the General Meeting, including the information required by section 311A of CA 2006, is available from: 1350-1360 Montpellier Court, Gloucester Business Park, Brockworth, Gloucester, Gloucestershire, GL3 4AH. Notes:
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