Share Placement Agreement

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014 (“MAR”)

16 December 2020

SIMEC ATLANTIS ENERGY LIMITED
(“Atlantis”, the “Company” and, together with its subsidiaries, the “Group”)

Atlantis announces Share Placement Agreement

Atlantis, the global sustainable energy generation company and technology developer, is pleased to announce that it has entered into a share placement agreement (the “Agreement”) with New Technology Capital Group, LLC (the “Investor”), a U.S.-based investor, in relation to the issuance of new ordinary shares (represented by dematerialised depositary interests, each comprising an entitlement to one ordinary share) in the Company (the “Shares”) to raise up to £12,000,000.

The Investor will make an initial investment of £2,000,000 for new Shares with the value of £2,090,000 on or about 17 December 2020. Additional investments of three tranches of £2,000,000 each will be made by the Investor for new Shares with the value of £2,090,000 per tranche approximately three, six and nine months after the initial investment. Atlantis may also obtain further additional investments from the Investor, in an aggregate amount of up to £4,000,000, with the consent of the Investor, for new Shares with the aggregate value of £4,180,000 after the initial and subsequent investments. At the time of the initial investment, Atlantis has agreed to issue to the Investor, conditional on Admission (as defined below), 947,368 new Shares in satisfaction of a commencement fee due to the Investor, 1,800,000 new Shares for an aggregate subscription price of a nominal amount, to be applied against the new Shares to be issued in the investments, and 1,900,000 warrants with an exercise period of 36 months from the date of issue (the “Warrants”) with an entitlement to subscribe for one new Share per Warrant at an exercise price of £0.30371. The Agreement can be cancelled prior to the second tranche of investment at the election of Atlantis for a cancellation fee of £48,000. Further information regarding the Agreement is set out below.

The proceeds derived from the Agreement are intended to be used to allow Atlantis to take advantage of investment opportunities arising over the course of next year across the Company’s tidal energy, waste to energy, hydro and sustainable infrastructure project portfolio.

Tim Cornelius, CEO of Atlantis, said:

“We are delighted to be working with a US institutional investor who is backing Atlantis to continue to create shareholder value through further strategic investment across our diverse project pipeline. Putting this Agreement in place is prudent in these unpredictable times leading into BREXIT and post COVID-19 recovery and access to investment capital will allow our project teams to ensure we are capable of capitalising on new opportunities that we expect will present themselves during 2021.”

FURTHER TERMS OF THE AGREEMENT

Principal terms of the investment and issue

As mentioned above, the Investor will make an initial investment of £2,000,000 for new Shares with the value of £2,090,000 on or about 17 December 2020, with additional investments of three tranches of £2,000,000 each being made by the Investor for new Shares with the value of £2,090,000 per tranche approximately three, six and nine months after the initial investment. Atlantis may also obtain further additional investments in an aggregate amount of up to £4,000,000, with the consent of the Investor, for new Shares with an aggregate value of £4,180,000 after the initial and subsequent investments. To ensure that the investments are rationally sized relative to the Company’s market capitalisation, and to minimise the potential for dilution, the Investor is entitled to reduce the amount of the third and fourth tranches of investment such that (if applicable) each of those investments does not exceed 1.75 per cent. of the Company’s prevailing market capitalisation or 30 per cent. of its prevailing market volume over a specified period of time.

Each investment made by the Investor under the Agreement will be made by way of prepayment for new Shares to be issued, at the Investor’s request, within 24 months of the date of the corresponding prepayment (the “Placing Shares”). The number of Placing Shares to be issued in respect of each prepayment will be determined by dividing the gross value of the investment (or a part thereof) by the average of the five daily volume-weighted average prices during a specified period immediately prior to the date of issuance of the new Shares, subject to rounding (the “Placement Price”), but subject to the Floor Price described below. The Placement Price will be subject to five and ten per cent. discounts to such price in respect of Placing Shares issued subsequent to the dates that are nine and eighteen months, respectively, after the corresponding prepayment. In the event that the Placement Price is below a floor price of £0.07 (“Floor Price”), Atlantis may repay in cash (with a 5 per cent. premium) the amount of the investment for which Placing Shares would otherwise be issued at that price, subject to the Investor’s right to receive Placing Shares at the Floor Price in that circumstance.

The Placing Shares will only be able to be issued to the extent that Atlantis has corporate authority to do so. To this end, in the absence of such authority, Atlantis may be required in certain circumstances to repay in cash the amount of the investment for which Placing Shares would otherwise be issued. In addition to the rights to cash repayment in circumstances where the Placement Price is below the Floor Price, Atlantis has the right, at its option and until 90 days after the entry into the Agreement, to repay all investment amounts that it has received in respect of which Placing Shares are not yet issued or requested to be issued, provided that the Investor can require 30 per cent. of any such repayment to be satisfied by the issue of Placing Shares. Further, Atlantis has the right, at its option and without the limit of time, to repay all investment amounts that it has received in respect of which Placing Shares are requested to be issued, but at a price equal to the number of such Placing Shares multiplied by the greater of the Placement Price and the market price of the Company’s Shares.

Conditions precedent and postponement and termination rights

Each investment and issue of Placing Shares is subject to a number of conditions precedent and the Agreement includes representations, warranties and indemnities by the Company in favour of the Investor, in each case, that are customary for a transaction of this nature. The Agreement also contains rights for both parties to postpone an investment by the Investor and to terminate the Agreement in certain circumstances.

Both parties may postpone an investment by the Investor in relation to its third and fourth tranches of investment for up to 90 days on one occasion only during the term of the Agreement. In the case of the Investor, it may also postpone the second, third and fourth tranches of investment for up to 60 days if the market price of the Company’s Shares is equal to or less than a base price of £0.13 per Share (in the case of the third and fourth tranches) and £0.05 per Share (in the case of the second tranche) for two consecutive trading days. If during the period of postponement the market price does not recover to equal or exceed that price for an agreed period then the Investor will have the right to elect to terminate the Agreement. In the case of Atlantis, it will have the right to elect to terminate the Agreement (and not to consummate the second, third and fourth tranches of investment) if the market price of the Company’s Shares is less than a cancellation floor price of £0.20 per Share. As noted above, Atlantis will also have the right to terminate the Agreement regardless of market price if it does so prior to the second tranche of investment and upon the payment of a cancellation fee of £48,000.

The Agreement also contains a number of other termination rights (including for events of default) that are similarly typical for a transaction of this nature. The Investor’s obligation to provide further funding ceases if an event of default takes place and, in all but limited circumstances, in the event of default, the Investor may require Atlantis to repay all investment amounts that it has received in respect of which Placing Shares are not yet issued.

Restrictions agreed by the Investor and Atlantis

The Investor has agreed to certain limits on its ability to dispose of Shares following the issue to them of any Placing Shares under the Agreement. The Investor is also contractually precluded from short-selling the Shares or undertaking certain other prohibited activities in relation to the Shares.

Atlantis is also required to adhere to certain negative covenants, including a restriction on engaging in a similar transaction from the date of the Agreement until the date that is 90 calendar days after the later of the termination of the Agreement and the date all investments and issues of Placing Shares that could occur have occurred in accordance with the Agreement (for clarity, the Agreement does not restrict the Company from raising additional capital in an equity placing or placings). In addition, Atlantis has agreed not to undertake certain other actions (including, among others, not to dispose of a substantial part of its assets, not to materially change the nature of its business, not to incur indebtedness that ranks senior to or pari passu with the transaction contemplated in this announcement, and not to undertake certain actions with respect to its share capital) for so long as a material investment amount remains outstanding or there are issues of Placing Shares that could still occur in accordance with the Agreement.

Issue of other new Shares and Warrants

Concurrent with the initial investment, Atlantis will issue 1,800,000 new Shares to the Investor at that time for an aggregate subscription price of a nominal amount. As a separate matter, the Investor has contractually agreed that if that number of Shares is not applied towards the satisfaction of the Company’s obligation to issue Placing Shares under the Agreement, the Investor will make an equivalent cash payment (determined by reference to the Placement Price) to the Company in lieu thereof.

Also as mentioned above, at the same time as the initial investment, Atlantis will also issue to the Investor 947,368 new Shares in satisfaction of a fee due to the Investor, as well as 1,900,000 Warrants with an exercise period of 36 months from the date of issue with an entitlement for the Investor (or any subsequent holder of the Warrants) to subscribe for one new Share per Warrant at an exercise price of £0.30371.

The mechanics of exercising the Warrants are set out in a warrant instrument (the “Instrument”). Similar to the Placing Shares, any new Shares to be issued upon exercise of any Warrants will only be able to be issued to the extent that Atlantis has corporate authority to do so. The Instrument confers certain information rights to the warrant holders and warrant holders will have a right to attend meetings of members of the Company, however they will not be entitled to speak or vote at meetings. Atlantis is also required to adhere to certain negative covenants under the Instrument which are aligned with, but more limited in number than, those in the Agreement.

ADMISSION

Application will be made to the London Stock Exchange for admission of an aggregate of 2,747,368 new Shares to be issued, conditional on admission, at the time of the initial investment, and dealings are expected to become effective on or about 22 December 2020 (“Admission”). On Admission, such new Shares will rank pari passu with the Company’s existing Shares.

Subsequent application will be made for any further Placing Shares issued and allotted to the Investor and any new Shares to be issued and allotted upon exercise of any Warrants to be admitted to trading on AIM. As above, such further Shares will only be able to be issued to the extent that the Company has corporate authority to do so.

Following Admission, the Company will have 494,325,023 Shares in issue (none of which are held in treasury). The total voting rights in the Company is therefore 494,325,023 and shareholders may use this figure as the denominator by which they are required to notify their interest in, or change to their interest in, the Company under the Disclosure Guidance and Transparency Rules.

— ENDS —

Enquiries:

SIMEC Atlantis Energy Limited	+44 (0) 7739 832 446
Sean Parsons, Director of External Affairs
Investec Bank PLC – NOMAD and Joint Broker	+44 (0) 20 7597 5970
Jeremy Ellis Sara Hale Ben Griffiths
Arden Partners PLC – Joint Broker	+44 (0) 20 7614 5900
Ruari McGirr Richard Johnson Simon Johnson

Notes to Editors

SIMEC Atlantis Energy

Atlantis is a global developer, owner and operator of sustainable energy projects with a diverse portfolio in various stages of development. This includes a 77 per cent. stake in the world’s largest tidal stream power project, MeyGen, 100 per cent. of the 220MW Uskmouth Power Station conversion project and 100 per cent. of Green Highland Renewables, a leading developer of mini-hydro projects.

https://www.saerenewables.com/

More on the MeyGen Project: https://staging.saerenewables.com/projects/meygen/

More on the Uskmouth Project: https://staging.saerenewables.com/project-development-operation/simec-uskmouth-power/

Market Abuse Regulation

The information contained within this announcement is inside information as stipulated under MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain. The person responsible for arranging for the release of this announcement on behalf of Atlantis is Tim Cornelius, Chief Executive Officer of Atlantis.

Important notice

The new Shares referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the “US Securities Act”), and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act.  There will be no public offering of the Shares in the United States.

Forward-looking statements

Certain statements in this announcement are forward-looking statements which are based on the Company’s expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as “aim”, “anticipate”, “believe”, “could”, “intend”, “estimate”, “expect” and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries in which the Group will operate to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by the Financial Conduct Authority, the London Stock Exchange plc or applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.