Imaging Biometrics Acquires Kirkstall in Strategic Biotech Expansion

IBAI snaps up Kirkstall: what’s being bought and why it matters

Imaging Biometrics Limited (LSE: IBAI) has agreed to acquire 86.11% of Kirkstall Limited from Truetide plc, with a clear path to take full ownership. Kirkstall is the company behind Quasi Vivo, a patented interconnected cell culture flow system designed to recreate in vivo-like conditions – in simple terms, it mimics how human organs interact with blood flow. That makes it valuable in academic research and drug development where physiological relevance is king.

The flagship QV1200 product is called out as being more representative of human physiology than non-flow systems. Kirkstall’s sales are “beginning to grow” and moving beyond its UK university base, with the US flagged as a key target market. IBAI believes it has the know-how to help unlock that growth, particularly in the United States.

Deal structure: cash-light, CLN-heavy

The total contemplation for 100% of Kirkstall is £170,000, equivalent to £0.015717 per Kirkstall share. Of this, £146,421.41 is payable to Truetide and will be settled via an unsecured Convertible Loan Note (CLN) issued by IBAI. The CLN’s principal is £170,000, and Truetide will also subscribe £23,578.59 in cash – which IBAI will use to pay the remaining Kirkstall shareholders.

Bottom line: this is a cash-light acquisition for IBAI, enabled by the CLN. The structure also suggests IBAI intends to tidy up the register quickly – there are drag-along provisions allowing IBAI to acquire the remaining minority and it’s anticipated the company will move to 100% ownership.

Key terms at a glance

Stake acquired now	86.11%
Anticipated ownership	100% (via drag-along)
Total consideration (100%)	£170,000
Price per Kirkstall share	£0.015717
Payable to Truetide	£146,421.41
CLN principal	£170,000
Cash subscribed by Truetide	£23,578.59
CLN interest	6% per annum (accrues)
CLN conversion price	Lower of £0.075 (subject to GM to change par value) or the price of any fundraising prior to conversion
Final redemption date	31 December 2027
Truetide’s holding in IBAI	29.35%
Conversion limit	No conversion if it would take Truetide and concert parties to 30% or more

What is Quasi Vivo and why should investors care?

Quasi Vivo is an interconnected flow system for cell culture. Traditional “static” models grow cells in a dish; flow systems circulate media to simulate blood flow and allow multiple organ models to interact. That can improve the predictive power of lab research, helping users generate more accurate models and boost confidence in results.

In drug discovery and toxicology, better models can mean better decisions earlier. The RNS highlights growing QV1200 sales and early traction outside the UK university market. The US is a key target, and IBAI reckons it can be the partner Kirkstall needs to scale there.

The CLN: mechanics, conversion and what it means for dilution

A Convertible Loan Note is debt that can turn into equity. Here’s what matters:

• 6% interest accrues and is added to the balance until conversion or redemption.
• It is unsecured and subordinated, meaning it sits behind other creditors if something goes wrong.
• Conversion is at Truetide’s discretion at the lower of £0.075 (subject to a General Meeting to change the Company’s par value) or the price of any fundraising completed prior to conversion.
• Conversion cannot proceed if it would take Truetide and any concert parties to 30% or more of IBAI’s issued share capital (as enlarged by the conversion).

Why this matters: the “lower of” clause means that if IBAI raises equity at a lower price than £0.075, the CLN could convert at that fundraising price. That increases potential dilution compared with a fixed higher price. On the flip side, the 30% safeguard prevents creeping control via conversion.

Related party transaction: governance steps taken

This is a related party transaction under DTR 7.3 because Truetide holds 29.35% of IBAI and Trevor Brown is an executive director of both companies (and holds 27.99% of Truetide). In such cases, independent directors must scrutinise the deal.

The independent directors – Dr Al Musella, Brett Skelly and Michael Schmainda – assessed the SPA and CLN and consider them fair and reasonable for the Company and for shareholders who are not a related party. Trevor Brown recused himself from all deliberations. The RNS stresses compliance with governance standards and shareholder protections.

Strategic read-through: a small bolt-on with US upside

At £170,000 for 100% of Kirkstall, this is a small bolt-on acquisition. That size can be a feature, not a bug, if the underlying product has leverage into larger markets. Quasi Vivo sits in a sweet spot where academic research meets pharma R&D, and the US is a logical next step.

IBAI’s assertion that it has the market knowledge and expertise to support US growth is the strategic hinge here. If the company can help translate the QV1200’s technical credibility into commercial momentum stateside, the return on a relatively modest consideration could be attractive. The CLN structure keeps cash demands low today, albeit with potential equity dilution later.

The positives and the watch-outs

What looks positive

• Cash-light deal using an unsecured, subordinated CLN preserves cash.
• Clear route to 100% ownership via drag-along provisions.
• Product-market fit: QV1200 addresses a clear need for more physiologically relevant models.
• Early signs of sales growth and an explicit push into the US market.
• Independent directors have assessed the related party terms as fair and reasonable.

What to keep an eye on

• Dilution risk from CLN conversion, especially if future fundraisings are priced below £0.075.
• Execution in the US – the RNS does not disclose a US partner or a go-to-market plan (not disclosed).
• Integration and scaling – no financials for Kirkstall are provided (not disclosed), so the growth base is unclear.
• Par value considerations – the £0.075 conversion price is subject to a General Meeting to change the Company’s par value.

What happens next

Mechanically, expect IBAI to complete on the 86.11% stake and then use the drag-along provisions to move to 100% ownership. The CLN runs to 31 December 2027, so conversion, redemption or any intervening fundraise will be key milestones.

Commercially, watch for updates on US distribution or partnerships for QV1200, evidence of sales momentum beyond UK academia, and any shareholder actions related to par value changes. With governance boxes ticked for this related party transaction, the focus now turns to execution.