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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Overnet Data | LSE:OND | London | Ordinary Share | GB0031791782 | ORD 0.5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.00 | - |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:9082Y OverNet Data PLC 20 May 2004 Press Release OverNet Data plc ("OverNet Data" or the "Company") Acquisition and Placing The Board of OverNet Data announce that the Company has entered into a conditional merger agreement to effect the acquisition of the entire issued share capital of FuturaGene, Inc ("FuturaGene"), to effect the Placing and that it intends to effect a share capital reduction and apply for the Enlarged Share Capital of the Company to be admitted to trading on AIM. In addition, the Company intends to change its name to FuturaGene plc. The Proposals are conditional upon, inter alia, the passing of the Resolutions to be proposed at an EGM. Background to and reasons for the Proposals Following the Company's admission to trading on AIM in July 2000, the market in which the Company then operated suffered a severe downturn. As a result of its financial performance in the year ended 31 December 2002, the Company had a change in both strategy and board composition. The Company took action at that time to reduce its operating costs and its actual and contingent liabilities to a minimum whilst maintaining its existing operations. These decisions were taken against a background of uncertain stock market conditions and the Company's belief that there was limited investor appetite for technology companies which were not already cash generative. In the year ended 31 December 2003, the Company reduced administrative costs to #148,000 (2002: #1,500,000). The loss after tax for the same period was #140,000 (2002: #1,387,000) and diluted loss per share was 1.4p (2002: 56.0p) and cash resources declined to #28,000 by the year end. The Company accordingly became a shell company with few liabilities other than ongoing administrative expenditure of a company quoted on AIM. On 20 October 2003, following a rapid increase in the price of the Ordinary Shares on AIM, trading on AIM in the Ordinary Shares was suspended. The Company announced on 21 October 2003 that it had received preliminary indications of interest in a reverse transaction from a number of third parties. The Company has two subsidiaries, OverNet Data (UK) Limited ("ONDL") and Project Greenfield Acquisition Corp. ("PGAC"). ONDL receives licence fees in respect of software developed by it and has limited operating costs. ONDL is not making any expenditure on the promotion or further development of its software. PGAC is a wholly owned Delaware Corporation, incorporated solely for the purpose of the Acquisition. Following the Acquisition PGAC will merge into FuturaGene and shall cease to have a separate corporate identity. New business proposal After careful consideration and discussion, the Directors of OverNet Data have concluded that the most appropriate opportunity to enhance shareholder value at this time is to acquire FuturaGene. The Acquisition will result in the business of the Company becoming the acquisition, development and commercialisation of intellectual property licensed from a number of universities and research institutes, in the field of agricultural bio-technology. FuturaGene has obtained worldwide exclusive licences over patents on genes capable of improving crop yields under a-biotic stress, that is cold, drought and salt stress and pathogen attack. FuturaGene History and background to FuturaGene FuturaGene was founded in March 2001 as an Indiana business corporation for the purpose of developing specific commercial products from the research of leading plant geneticists working at Purdue University, the University of Arizona and the University of Illinois Champaign-Urbana. The aim of FuturaGene is to research and develop environmentally friendly genetic solutions to solve crop production problems. To this end FuturaGene has signed exclusive license agreements with Purdue Research Foundation and the University of Arizona and consequently, has obtained the worldwide exclusive commercial rights to several allowed patent applications and provisional patent applications on a portfolio of genes. FuturaGene is advised by a Scientific Advisory Board comprising four professors of plant biology, further details of whom are set out below. In the opinion of the Scientific Advisory Board these genes could have the potential of significantly improving crop yields under a-biotic stress including salt, cold, drought and fungal stress. These genes are acknowledged by the scientific community through many publications in the most prestigious journals to have significant potential. The predominant focus of FuturaGene is the research into and commercial exploitation of newly discovered genes, which can promote or enhance tolerance to a-biotic stress in commercial crops. The target is to improve both crop yield and quality, whilst reducing farm costs and enabling the cultivation of marginal croplands by improving plant tolerance to these stresses. The approach of the research is to study how plants protect themselves from the major environmental stresses and to enhance the natural plant defence systems by amplifying the plant gene expression via the insertion of a more efficient version of the gene into the plant genome. The entire portfolio of discoveries which has been licensed to FuturaGene is comprised of US patents and US and international patent applications, with each of the original patents being held by the relevant University. It is the policy of FuturaGene to sponsor early patent applications, in order to secure ownership, on all its discoveries in partnership with the relevant University. Current Activities of FuturaGene To date FuturaGene has raised in excess of $600,000 of external capital for working capital which has allowed FuturaGene to continue with both its research and commercial activities. FuturaGene is currently working on the development of transgenic plants which, it is hoped, will exhibit enhanced yields under extreme salt and drought stress. A full prototype tomato plant is currently in development at Purdue University. The excellence of this work has been recently recognised by the nomination of FuturaGene for a Small Business Innovation Research grant from the U.S. Department of Agriculture. FuturaGene is also currently collaborating with an international humanitarian project sponsored by a not for profit organisation to develop a rice plant which is better able to perform under a-biotic stress conditions. Business strategy The development strategy is to enhance the value of the genes in the current portfolio by developing commercial crop plant prototypes tolerant to a-biotic stress, and to seek regulatory approval for their commercial use. At the same time FuturaGene will maintain an active R&D programme in order to increase the portfolio of intellectual property which it licenses. In addition to the pipeline of new discoveries being generated by members of the Scientific Advisory Board, FuturaGene will seek to license similar technologies in the domain of stress tolerance from other academic institutions. In December 2003 FuturaGene licensed a gene from INIA (Instituto Nacional de Investigacion y Technologia Agaria y Alimentaria) in Spain. In order to continue its current activities and commence the regulatory approval process, FuturaGene now needs further capital and its board has decided to seek a quote on the AIM through a merger with OverNet Data. In addition, FuturaGene will seek to enter into partnerships and strategic alliances with major companies which will also enable it to expand its commercial strength and breadth, and share research and development costs. In the opinion of the directors of FuturaGene, FuturaGene has the rights to the key technology necessary to develop a new generation of transgenic plants of significant agricultural importance. As exclusive licensees of the technology FuturaGene has a strong position from which the Enlarged Group can enter into joint agreements with other agricultural biotech and seed companies to commercialise these transgenic plants. The Potential Market According to the International Service for the Acquisition of Agri-biotech Applications, the global GM crop area continues to grow for the seventh consecutive year at a sustained rate of more than 15 per cent. The estimated global area of transgenic or GM crops for 2003 is 67.7 million hectares. Environmental stresses on crop production inflict serious and increasing yield diminutions which are being exacerbated by environmental change. In the United States alone, these stresses are estimated to cost approximately $12-$14 billion a year in crop production losses (Source: Estimating the Economic Impact of Drought: University of Nebraska). Continuity of OverNet Data Business The Directors and Proposed Director intend to continue the business of OverNet Data (UK) Limited although they do not intend to invest material funds in this activity. The Company does not have any employees other than the Directors, however, the Directors and Proposed Director have confirmed that the existing employment rights, including any pension rights of current employees will be fully safeguarded. The Acquisition and the Placing Acquisition Agreement The consideration for the Acquisition is a maximum of 45 million Ordinary Shares. Financing the new business The Company has raised #1.9 million (before expenses) via the Placing, which is conditional upon, inter alia, the passing of the Resolutions. The placing will provide additional working capital for the Enlarged Group for the next 12 months. Change of name To reflect the new direction of the Company, it is proposed that the Company changes its name to FuturaGene plc. The change of name is conditional upon the passing of the Resolutions by shareholders at the EGM. Capital Reduction The Company has from time to time issued shares at a premium and at 31 December 2003, the sum of #3,532,000 stood to the credit of the share premium account. In addition, the Company has a non-distributable capital redemption reserve arising on the cancellation of deferred shares of #2,415,000 as at 31 December 2003. The Company's audited balance sheet as at 31 December 2003 showed an accumulated deficit of #5,962,000 on its profit and loss account. The Company will be unable, under the Act, to pay dividends or make any other distributions until this deficit is eliminated. In view of the size of the deficit the Board believes that it is unlikely that the deficit will be eliminated by the generation of earnings for some years. The Board therefore considers it appropriate (subject to Shareholders' approval and confirmation by the Court) to eliminate the share premium account of the Company and the capital redemption reserve account to enable the Company to reduce the deficit on the Company's profit and loss account. Lock-in Arrangements Each of Mr Knifton, Mr Weller, Mr Ruggiero and Ms Zgagacz each of whom is a Director or Proposed Director, their families and associates, and certain other current and future shareholders of the Company has undertaken to Insinger de Beaufort not to dispose of any interest in Ordinary Shares for a period of one year from the date of Admission, except in certain specified circumstances. The total number of shares subject to the lock-ins are 17,500,000 representing 69.57 per cent of the enlarged share capital immediately after Admission. Admission, settlement and dealings Application has been made to the London Stock Exchange for all the Ordinary Shares in issue following approval of the Proposals to be admitted to trading on AIM. It is expected that Admission of the Ordinary Shares will become effective and dealings will commence in such shares on 15 June 2004. Directors, Proposed Director and key management The Board of Directors of the Company is currently Leo Knifton, Bruno Ruggiero and Nigel Weller. Nigel Weller proposes to resign immediately prior to Admission. At Admission the Board will comprise three Directors all of whom will be Executive Directors. The Chairman of the Board is an executive Director. The biographies of the Directors are set out below: Leo Knifton (aged 50), Executive Chairman Fellow of the Securities Institute and former member of the London Stock Exchange. Currently working with Alfred Henry Corporate Finance Ltd helping companies raise finance, Leo is Chairman of Oakgate Plc, SBS Plc and Voss Net plc all of which are quoted on AIM. Bruno Ruggiero (aged 36), Chief Executive Officer Mr Ruggiero is one of the founders of FuturaGene. He received his Doctor of Biological Sciences degree in 1994 from University of Rome, "La Sapienza". In 1996 he passed the national board exam as a professional in biological sciences. He has spent many years researching Molecular Biology and Plant Physiology at the Viterbo University, the Agostino Gemelli Hospital in Rome, National Center of Research (CNR), and Purdue University. His research included testing of the new pharmacological drug for Polycystic Ovarian Syndrome, developing transgenic strawberries, mint, kiwi, olive trees and other plants of agricultural interest. In 2004 Bruno was awarded a PhD in plant genetics from Viterbo University. Bruno founded FuturaGene after his discovery of a DNA sequence able to improve plant's tolerance to salinity and drought. Bruno continues his work for FuturaGene as the Chief Executive Officer and the Director of Research and Development. Marta K. Zgagacz (aged 26), Chief Operations Officer Marta K. Zgagacz is one of the founders of FuturaGene. She received her Master of Science in Physics from Purdue University. She has worked at Rutgers University, Fermi National Accelerator Laboratory and Purdue University as a researcher and instructor. She designed, built, tested and wrote the manual for the cooling system for a research project to test the new particle detector at Collider Detector at Fermi National Accelerator Laboratory. Marta developed and wrote the first FuturaGene Business Plan that resulted in over $500,000 in series A investment, and identified and negotiated additional investments to help the company's growing research needs. Nigel Weller (aged 55), Non-executive Director Member of the Securities Institute and a member of the Institute of Directors. Currently working with Alfred Henry Corporate Finance Limited assisting companies to raise finance. Nigel currently sits on the Board of various companies including Oakgate Plc and Vossnet Plc both of which are quoted on AIM. The Board intends to appoint a non-executive director in due course. Scientific Advisory Board Dr. Ray Bressan is a Distinguished Professor of Plant Physiology in the Horticulture Department at Purdue University. Professor Bressan has taught at Purdue since 1978. He holds a Ph.D. in Plant Physiology from Colorado State University. His research program involves establishing cell systems to study the physiology and biochemistry of variants with increased tolerance to water and salt stress and isolate and study genes involved in cellular tolerance. In addition, he is working on regenerating plants from variant cell lines to recover agriculturally useful phenotypes and study the genetic basis of the phenotype of variants. Dr. Paul Hasegawa was selected to be the President of the Gordon Conference on salt stress held in July 2002 in Oxford, UK. He received his Ph.D. in Botany in 1976 and has been a Professor at the Department of Horticulture at Purdue University since 1977. Much of his research has focused on the identification of plant salt tolerance determinants and isolation of plant genes involved in this process. His research has included the transformation of sorghum, lily and mint and resulted in the first peppermint and lily transformations. Dr. Jian-Kang Zhu is a leading researcher in the area of a-biotic stress in plants. He spent seven years as a Professor at the Department of Plant Sciences, University of Arizona. In January 2004 he took up the post of Professor of Plant Cell Biology at the University of California, Riverside and directorship of the UCR Institute for Integrative Genome Biology. In 2003, Dr. Zhu was awarded the Charles Albert Schull award from the American Society of Plant Biologists for outstanding investigations in the field of plant physiology. Dr. Zhu's interests lie in the molecular mechanisms underlying plant responses to salt, drought, cold stresses and ABA. Current research involves genetic and molecular characterisation of Arabidopsis mutants that are hypersensitive to NaCl stress. Dr. Hans Bohnert received his Ph.D. from UniversitAt Heidelberg, Germany, in 1972. He is a Professor of Plant Biology at University of Illinois, Champaign-Urbana. His research is directed towards the dissection of plant responses to the environment. Prof. Bohnert is studying physiological mechanisms that lead to water stress (salinity, drought, low temperature) tolerance in higher plants, to understand the biochemical basis of these reactions, and gene expression and genetic requirements for the multi-genic trait of stress tolerance. Mechanisms/traits that are identified (or hypothesised) are modelled by gene transfer in stress-sensitive plants, tobacco, Arabidopsis, rice or into yeast. Consultant Julian Gresser is a distinguished international attorney. From 1976-1983 he was twice Visiting Mitsubishi Professor at the Harvard Law School and also taught courses as a Visiting Professor at MIT on the legal issues of strategic industries. He has been a Visiting Professor at Beijing University, where he taught seminars on Japanese and U.S. environmental law, and also helped the Chinese environmental authorities draft China's Marine Pollution Control Law. He has served as legal advisor to numerous U.S., Japanese, and European companies, and has served as a senior consultant to the U.S. State Department, The World Bank, The Prime Minister's Office of Japan, The People's Republic of China, and the European Commission. Following this announcement and the posting of the Company's report and accounts for the year ended 31 December 2003 the London Stock Exchange have readmitted the Company's Ordinary Shares to trading on AIM. Further copies of the AIM Admission Document are available from the company's registered office Finsgate, 5-7 Cranwood Street, London EC1V 9EE. Further enquiries: OverNet Data plc Leo Knifton Tel: 020 7251 3762 Insinger de Beaufort Stephen Goschalk/Nandita Sahgal Tel: 020 7377 6161 - ends - This press announcement has been issued by Insinger de Beaufort on behalf of OverNet Data Plc Insinger de Beaufort is a subsidiary of Bank Insinger de Beaufort N.V. Regulated by the FSA Registered in England and Wales No. 2479169 This information is provided by RNS The company news service from the London Stock Exchange END ACQMGGZKZGLGDZM
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