Earn Outs and Deferred Payments

26 April 2022

Instem plc
("Instem", the "Group" or the "Company")

Earn Outs and Deferred Payments

Instem plc (AIM: INS), a leading provider of IT solutions to the global life sciences market, is pleased to announce that the first tranches of the agreed earn out and deferred payments in respect of the acquisition of the entire share capital of d-Wise Technologies, Inc ("d-wise") and d-wise’s subsidiaries, which completed on 1 April 2021, have now been made.

As a result of d-wise achieving its earn out targets in the financial year ended 31 December 2021, Instem has paid the initial earn out consideration of $1.5m in ordinary shares of 10 pence each in Instem (“Ordinary Shares”) (“Initial Earn Out Consideration”).

The Company has also paid the first tranche of the deferred consideration (due to certain vendors in d-wise) comprising $3,191,775 in cash and $1,042,604 in Ordinary Shares which was payable on the 12-month anniversary of completion (“Deferred Consideration”).

Instem, through its subsidiary Instem Inc., acquired d-wise for an initial consideration of $20m in cash and shares, subject to an adjustment mechanism plus any deferred consideration and any earn out payable under the terms of the share purchase agreement. Following payment of the Initial Earn Out Consideration, a further earn out consideration of $1.5m remains payable in cash on the 24-month anniversary of completion of the acquisition. Additionally, the second tranche of the deferred consideration, comprising $4m plus interest in cash, will be payable on the 24-month anniversary of completion.

Separately, the Company is also pleased to announce that the full £2.0m earn out has been achieved in respect of the acquisition of the entire share capital of The Edge Software Consultancy Ltd (“The Edge”), which completed on 1 March 2021. As a result of The Edge achieving its earn out targets in the twelve month period post-completion, £1.0m will be paid in cash to the vendors of The Edge by 31 May 2022, with a further £1.0m to be paid in cash on or before 1 March 2023. In addition the £0.5m deferred consideration was paid at the end of February 2022.

Issue of Equity and Admission
As a result, 176,124 Ordinary Shares have been issued in respect of the Initial Earn Out Consideration at an issue price 650p per Ordinary Share, calculated at the average middle market closing price over the five business days immediately preceding but excluding 30 March 2022.

In addition, 120,828 Ordinary Shares have been issued in respect of the Deferred Consideration and have been issued at a price 657p per Ordinary Share, calculated at the average middle market closing price over the five business days immediately preceding but excluding 31 March 2022.

Application has been made to the London Stock Exchange for a total of 296,952 new Ordinary Shares to be admitted to trading on AIM (“New Ordinary Shares”). Admission of the New Ordinary Shares is expected to take place at 8.00 a.m. on 29 April 2022.

Lock-ins
Of the 296,952 New Ordinary Shares issued in total to the d-wise vendors in connection with the Initial Earn Out Consideration and Deferred Consideration, 199,101 New Ordinary Shares will remain subject to lock-ins until 07 June 2022 and 164,972 New Ordinary Shares will remain subject to lock-ins until 20 March 2023. This means that, also taking into account Ordinary Shares that were issued at completion of the acquisition and that remain subject to lock-ins, a total of 781,214 Ordinary Shares will remain subject to lock-ins until 07 June 2022 and 647,294 Ordinary Shares will remain subject to lock-ins until 20 March 2023.

Total Voting Rights
Following the issue and allotment of the New Ordinary Shares, the Company's issued share capital comprises 22,676,808 Ordinary Shares. The Company does not hold any Ordinary Shares in treasury. Therefore the total number of voting rights in the Company is 22,676,808.

The figure of 22,676,808 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change of their interest in, the Company under the FCA’s Disclosure and Transparency Rules.

For further information, please contact:

Instem plc Via Walbrook
Phil Reason, CEO  
Nigel Goldsmith, CFO  
Singer Capital Markets (Nominated Adviser & Broker) +44 (0) 20 7496 3000
Peter Steel  
Alex Bond  
Rachel Hayes  
Joint Broker (Stifel Nicolaus Europe Limited) +44 (0) 20 7710 7600
Ben Maddison  
Alex Price  
Wallbrook Financial PR Tel: +44 (0) 20 7933 8780
Tom Cooper instem@walbrookpr.com
Nick Rome  
Nicholas Johnson  

About Instem

Instem is a leading provider of IT solutions & services to the life sciences market delivering compelling solutions for Study Management and Data Collection; Regulatory Solutions for Submissions and Compliance; and Informatics-based Insight Generation.

Instem solutions are in use by over 700 customers worldwide, including all the largest 25 pharmaceutical companies, enabling clients to bring life enhancing products to market faster. Instem's portfolio of software solutions increases client productivity by automating study-related processes while offering the unique ability to generate new knowledge through the extraction and harmonisation of actionable scientific information.

Instem products and services address aspects of the entire drug development value chain, from discovery through to market launch. Management estimate that over 50% of all drugs on the market have been through some part of Instem's platform at some stage of their development.

To learn more about Instem solutions and its mission, please visit instem.com.