Proposed Acquisition and Conditional Placing

RNS Number : 7994T

Bonhill Group PLC

25 March 2019

 

   25 March 2019

Bonhill Group plc

("Bonhill" or the "Company")

Proposed acquisition of Last Word Media

Conditional Placing of £10.0 million 

and

Proposed Capital Reduction

Bonhill (AIM: BONH), a leading B2B media business specialising in three key areas: Business Information, Live Events and Data & Insight, is pleased to announce that it has agreed conditionally to acquire Last Word Media ("Last Word") and a proposed conditional placing to raise £10.0 million at 84 pence per share. 

Highlights

·     The Company has entered into a conditional agreement to acquire Last Word, an international B2B media business, for an initial consideration of £8.0 million (the "Acquisition")

·    Of the £8.0 million initial consideration payable, £6.0 million will be satisfied in cash and £2.0 million will be satisfied by the issue of the Initial Consideration Shares. Further consideration in respect of the Acquisition will be payable, subject to Last Word achieving certain earnings thresholds in the financial years ending 31 December 2019 and 31 December 2020. The maximum aggregate consideration payable is £20.0 million

·     The Board anticipates that the Acquisition will be earnings enhancing from Completion

·    The Company also announces a proposed conditional equity placing to raise £10.0 million (before expenses) at 84 pence per New Ordinary Share (the "Placing Price") by way of an accelerated bookbuild to be undertaken by Stockdale Securities Limited ("Stockdale") and Canaccord Genuity Limited ("Canaccord Genuity") who are acting as joint brokers, which will be launched immediately following the release of this announcement (the "Placing")

·     The Placing Price represents a discount of 7.7 per cent. to the Company's closing share price on 22 March 2019

·     Proposed capital reduction to create distributable reserves of the Company from which dividends may be paid

Proposed acquisition of Last Word

Last Word is an international B2B media business addressing the sales and marketing needs of the global asset management industry and information requirements of the wealth management industry.

Launched in 2005, Last Word is owned by its three founders Rod Boulogne, Jamie Hinchliffe and Dylan Emery, and the co-founder of its Asian operation, Tom Porter, who together have 81 years' B2B financial services media experience. In addition, Last Word has assembled a highly experienced second tier of management across key editorial, operations, sales, marketing and finance functions. Last Word has 71 staff based in its London head office with another 8 staff in Hong Kong and 3 staff in Singapore.

The business creates content, sales and marketing opportunities, networking events and transactional opportunities for its clients and audiences with the key objective to assist asset managers with increasing assets under management.

Last Word currently operates seven investor facing brands. These include seven news and information websites, two of which have associated print titles and, in 2018, the brands collectively hosted 86 scheduled live events. Last Word also operates a further three brands targeting asset managers with event services, content marketing solutions and research data products.

Last Word has a stable base of approximately 190 clients, including global leaders such as Aberdeen Standard Investments, Allianz Global Investors, BNY Mellon Investment Management, Hermes Investments, Invesco, Janus Henderson, Jupiter Investments, Merian Global Investors, Schroders and T. Rowe Price.

In the year ended 31 December 2018, Last Word generated revenue of approximately £10.2 million (2017: £9.2 million) and had EBITDA of approximately £1.1 million (2017: £0.3 million). As at 31 December 2018, Last Word had consolidated net assets of approximately £1.42 million (2017: £0.78 million).

In the year ended 31 December 2018, 71 per cent. of total revenues were generated in the UK, 16 per cent. in Asia, 8 per cent. in Europe and the balance in the rest of the world. Of total revenues generated in the year ended 31 December 2018, Live Events accounted for 59 per cent., Business Information accounted for 26 per cent. and Data & Insight and content marketing together for 15 per cent

Last Word has a number of attributes which Bonhill believes make it a highly attractive acquisition for the Company, namely:

·      Leading B2B media brands and sales/marketing solutions for the global asset management industry;

·      Expands geographical footprint into UK, EMEA and Asian markets;

·      Creates better balance of revenues between Business Information and Live Events with enhanced Data & Insight potential;

·      Wider group of experienced leaders and second tier management to integrate into the existing Bonhill business; and

·      Significant opportunity to utilise InvestmentNews' platform to expand Last Word's existing offering into the USA.

The Board anticipates that the Acquisition will be earnings enhancing from Completion.

Proposed Conditional Placing

Bonhill, today announces its intention to raise equity funding of £10.0 million through the issue of 11,904,762 New Ordinary Shares (the "Placing Shares") at the Placing Price. The net proceeds of the Placing will partly be used to satisfy the initial cash consideration payable in respect of the Acquisition, with the balance being used to fund the costs incurred in connection with the Proposals and contribute towards the deferred consideration payable.

The Placing is conditional, inter alia, upon:

·      the passing of Resolution 1 at the General Meeting;

·      the Acquisition Agreement becoming unconditional in all respects (save for any conditions that relate to Admission or the Placing Agreement);

·      the Placing Agreement becoming unconditional in all respects save for Admission by no later than 8.00 a.m. on 10 April 2019 (or such later date, as the Brokers may agree being no later than 8.00 a.m. on 23 April 2019) and not having been terminated in accordance with its terms; and

·      Admission.

The Placing is currently expected to conclude on or before 4.30 p.m. on 23 March 2019, with Admission becoming effective on or around 10 April 2019. A further announcement will be made following completion of the Placing.

The Placing will open with immediate effect following this announcement. The number and allocation of Placing Shares is at the discretion of the Brokers and a further announcement confirming these details will be made in due course. Members of the public are not entitled to participate in the Placing and none of the Placing Shares are being offered or sold in any jurisdiction where it would be unlawful to do so.

Bonhill has entered into a placing agreement (the "Placing Agreement") with Stockdale Securities Limited ("Stockdale") and Canaccord Genuity Limited ("Canaccord Genuity") who are acting as joint brokers in relation to the Placing (the "Brokers"). Pursuant to the Placing Agreement, each of Stockdale and Canaccord Genuity has agreed, in accordance with its terms, to use reasonable endeavours to place the Placing Shares with certain new and existing institutional and other investors. The Placing is not underwritten.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu with the Ordinary Shares, including the right to receive all future dividends and distributions declared, made or paid by reference to a record date falling after their issue. The issue of the Placing Shares is pursuant to the authorities to be granted at the General Meeting to be held on 9 April 2019.

The Company will apply for the Placing Shares to be admitted to trading on AIM. It is expected that settlement of these shares will take place and that trading will commence at 8:00 a.m. on 10 April 2019.  

Further details of the Placing Agreement can be found in the terms and conditions of the Placing contained in the Appendix to this announcement (which forms part of this announcement).

By choosing to participate in the Placing and by making a verbal offer to acquire Placing Shares, investors will be deemed to have read and understood this announcement (including the Appendix) in its entirety and to be making such offer on the terms and subject to the conditions in this announcement, and to be providing the representations, warranties and acknowledgements contained in the Appendix.

Your attention is drawn to the detailed terms and conditions of the Placing set out in the Appendix to this announcement.

Capital Reduction

As a result of the Group's improving financial position, and the strengthening of the Company's reserves, the Board believes that it is now desirable to commence a progressive dividend policy in respect of the year ending 31 December 2019, with an initial dividend to be paid for the six months ending 30 June 2019.  It is also the Board's intention that the Company will, on an on-going basis, pay an interim and a final dividend of one-third and two-thirds of the annual dividend payable.  In each case, the Directors will take account of the current and prospective financial and trading position of the Group, including its level of cash reserves and cash requirements, at the relevant time. 

However, the Company does not have distributable reserves to enable the Board to initiate the progressive dividend policy described above. The Board therefore proposes that a reduction of the Company's capital by way of the cancellation of the Company's share premium account and capital redemption reserve (the "Capital Reduction") be effected in order to create distributable reserves of the Company from which dividends may be paid.

The Capital Reduction requires the approval of Shareholders.  Accordingly, a special resolution (Resolution 2) will be proposed at the General Meeting to approve the Capital Reduction, which requires a majority in favour of at least 75 per cent. of those Shareholders attending and voting in person or by proxy in order to be passed.

In addition to the approval by Shareholders, the Capital Reduction requires the approval of the Court.  Accordingly, following the General Meeting, an application will be made to the Court in order to confirm and approve the Capital Reduction.

It is anticipated that the initial directions hearing in relation to the Capital Reduction will take place on 16 April 2019, with the final Court Hearing taking place on 7 May 2019 and the Capital Reduction becoming effective on the same day, following the necessary registration of the Court Order at Companies House.

The Capital Reduction is not conditional on the Acquisition or the Placing becoming unconditional.

Simon Stilwell, Chief Executive of Bonhill, commented:

"We are pleased to announce the acquisition of Last Word, a leading international B2B media business servicing the global asset management sector.  Bringing our two businesses together will enable Bonhill to provide a truly global sales and marketing proposition to the international asset management community and provides the opportunity to leverage InvestmentNews' presence and platform to expand its existing propositions in the US. These are exciting times for the Company and we look forward to the period ahead."

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 ("MAR").

-ends-

For further enquiries please contact:

Bonhill Group plc	[phone]
Simon Stilwell, Chief Executive David Brown, Group Finance Director
Stockdale Securities Limited (Nominated Adviser and Joint Broker)	[phone]
Tom Griffiths David Coaten
Canaccord Genuity Limited (Joint Broker) Bobbie Hilliam Adam James Georgina McCooke	[phone]
Taurus London (Lead Adviser)	[phone]
Tom Fyson Tom Marriage
Belvedere Communications (Financial PR)	[phone]
John West Kim van Beeck

About Bonhill Group plc

Bonhill Group plc is an AIM-quoted leading B2B media business specialising in three key areas: Business Information, Live Events and Data & Insight in three key sectors: Technology, Financial Services and Diversity. Bonhill's ambition is to create content that informs, communities that engage and brands that inspire in order to enable a better business environment for our sponsors and clients.

Flagship titles include: InvestmentNews, SmallBusiness.co.uk, Growth Company Investor, Information Age, GrowthBusiness.co.uk and What Investment. Bonhill is also responsible for a growing portfolio of high-profile events, including The Quoted Company Awards, Women in IT Awards Global Series, Women in Finance Awards Global Series, British Small Business Awards, Women Advisor Summit, Women to Watch, Diversity & Inclusion Summit and Retirement Income Summit, amongst others.

For more information visit www.bonhillplc.com

A circular containing details of the Proposals is expected to be posted to Shareholders later today along with a Form of Proxy to vote at a General Meeting expected to be convened for 9 April 2019 (the "Circular"). Capitalised terms in this announcement are defined as set out at the end of this announcement. The Circular will be available on the Company's website, www.bonhillplc.com.

1              Introduction

The Company has entered into a conditional agreement to acquire Last Word.   The initial consideration payable in respect of the Acquisition is £8.0 million, subject to adjustment for normalised working capital, of which £6.0 million will be satisfied in cash and £2.0 million will be satisfied by the issue of the Initial Consideration Shares.  Further consideration in respect of the Acquisition will be payable, subject to Last Word achieving certain earnings thresholds in the financial years ending 31 December 2019 and 31 December 2020. The maximum aggregate consideration payable under the Acquisition Agreement is £20.0 million. 

The Company also announces that it is raising, in aggregate, approximately £10.0 million (before expenses) by way of a conditional placing of 11,904,762 Placing Shares at 84 pence per share.

Further details of the Acquisition and the Placing, and the Shareholder approvals required in relation to them, are set out below.

It was indicated at the time of the announcement of the Company's acquisition of InvestmentNews in July 2018 that, subject to restructuring the Company's reserves, the Directors intended to commence a progressive dividend policy in respect of the current financial year ending 31 December 2019.  The Company currently has negative distributable reserves and is therefore prohibited under the Act from making distributions, including dividends, to its Shareholders.  Accordingly, the Directors are now also taking the opportunity, subject to Shareholder approval at the General Meeting and the approval of the Court, to carry out a reduction of the Company's capital by way of the cancellation of the Company's share premium account and capital redemption reserve, so as to create distributable reserves out of which dividends may be paid.

Subject to the Capital Reduction becoming effective, the Directors intend to declare an interim dividend for the six months ending 30 June 2019.  It is also the Board's intention that the Company will on an on-going basis pay an interim and a final dividend of one-third and two-thirds of the annual dividend payable. In each case, the Directors will take account of the current and prospective financial and trading position of the Group, including its level of cash reserves and cash requirements, at the relevant time.

The Company also announced earlier today its audited final results for the nine months ended 31 December 2018, details of which are set out below.

2              Background to the Acquisition

Overview

Bonhill is a leading international B2B media company. Its corporate strategy is to transition its business model to long-term, "must have", recurring revenue streams through building market leading brands within its chosen business communities of Technology, Financial Services and Diversity, developing high value Business Information, Live Events and Data & Insight propositions, and expanding beyond the UK into large, or fast growing, international territories.

Bonhill supports its three business communities with brands such as Information Age and the Data Leadership Summit & Awards in Technology, InvestmentNews in Financial Services, the latter having been acquired in August 2018, and DiversityQ and the Women in… Awards series in Diversity.

The Board has been implementing the Group's corporate strategy through a combination of:

·      growing market share within the Group's business communities: the Group's Diversity franchises - Women in IT and Women in Finance - have continued to grow rapidly with the Women in IT Awards held on 30 January 2019 attracting approximately 1,150 attendees;

·      developing its core propositions: the Board has continued to revise and refresh the Group's existing propositions, including re-launching the Information Age website, hiring new senior managers across the Group's events, media sales and editorial teams and developing its events portfolio away from solo awards towards integrated awards and conference events; and

·      expanding overseas: the Board has successfully expanded the Women in … series overseas, most recently holding the inaugural Women in IT and Women in Finance Awards in Dublin. The Board's strategy is to create a global franchise with new launches planned in a number of new territories, including the Women in IT Awards Singapore and Women in IT Awards Toronto.

InvestmentNews has brought a highly profitable, high margin and cash generative market leading brand into the Group, significantly grown the Group's position within the Financial Services sector and provided Bonhill with a market leading position in the US asset management/financial adviser market. The integration of InvestmentNews is progressing well:

·      InvestmentNews delivered record revenues of $19.2 million in the year ended 31 December 2018, 14 per cent. ahead of the prior year with all of its business units (print, digital and events) increasing revenues. The business had a strong finish to the year with revenues in Q4 2018 up 10 per cent. on the corresponding period in the prior year; and

·      the business generated £6.0 million of revenue and £1.8 million of adjusted operating profit for the Group since it was acquired in mid-August 2018.

Acquisition strategy

The acquisition of InvestmentNews was the first step in changing the scale and reach of the Group. The Board has continued to explore further acquisitions aligned to the Group's corporate strategy, which led it to the proposed acquisition of Last Word, a leading B2B media business servicing the global asset management sector.

3              Global asset management and global B2B media market overview

The global B2B media market grew by approximately 3 per cent. in 2017 to $189 billion and is forecast to grow, at a CAGR of 2.9 per cent. between 2017 and 2022, to $217.5 billion (Source: PwC - Business-to-Business Report 2018). In 2017, Business Information accounted for 8.4 per cent, Trade Shows 16.8 per cent. and Data & Insight 54.3 per cent, of global B2B media revenues (Source: PwC - Business-to-Business Report 2018).

Last Word competes with Citywire Financial Publishers and Incisive Media, servicing the needs of the international asset management industry. They all operate in the UK, EMEA, USA and Asia. In addition, there are a number of independent and/or smaller brands that compete at a local level, including Funds Europe, Funds Global (MENA) and Investment & Pensions Europe in Europe and Asian Investor, Asian Private Banker and Hubbis operating across Asia.

4              Last Word

Last Word is an international B2B media business addressing the sales and marketing needs of the global asset management industry and information requirements of the wealth management industry. The business was launched in 2005 and is owned by its three founders Rod Boulogne, Jamie Hinchliffe and Dylan Emery and, the co-founder of its Asian operation, Tom Porter.

Last Word currently operates seven investor facing brands. These include seven news and information websites, two of which have associated print titles. In 2018, the brands collectively hosted 86 scheduled live events annually. Last Word operates a further three brands targeting asset managers with event services, content marketing solutions and research data products. The business creates content, sales and marketing opportunities, networking events and transactional opportunities for its clients and audiences with the key objective to assist asset managers with increasing assets under management. In the year ended 31 December 2018, 71 per cent. of total revenues were generated in the UK, 16 per cent. in Asia, 8 per cent. in Europe and the balance in the rest of the world. Of total revenues generated in the year ended 31 December 2018, Live Events accounted for 59 per cent., Business Information accounted for 26 per cent. and Data & Insight and content marketing together for 15 per cent.

Last Word has 71 staff based in its London head office with another 8 staff located in Hong Kong and 3 staff located in Singapore. The Last Word founders have a combined 81 years' B2B financial services media experience. In addition, Last Word has assembled a highly experienced second tier of management across key editorial, operations, sales, marketing and finance functions.

Last Word's brand portfolio comprises:

Brand	Geographies	Online & Digital	Regular Print	Live Events	Data
Investor-Facing
Portfolio Adviser	UK, Channel Islands, Ireland	Yes	Yes	28	--
Expert Investor	14 West European countries	Yes	Yes	24	--
Fund Selector Asia, Middle East, Africa,	Hong Kong, Singapore, Thailand, Malaysia, Philippines, UAE, South Africa	Yes	--	22	--
International Adviser	UK, Channel Islands, EMEA, Asia	Yes	--	12	--
ESG Clarity	Global	Yes	--	--	--
Content Clarity	UK	Yes	--	--	Yes
Client-Facing
Future Flows	UK, Europe, Asia	Yes	--	--	Yes
Content Clever/FinPix	UK/Asia	Yes	Custom	--	--
Radius	UK	Custom	Custom	Custom	--

Established investor-facing brands

Portfolio Adviser/Expert Investor/Fund Selector

·     Portfolio Adviser was launched in the UK in 2006, followed by Expert Investor in Europe in 2008 and the Fund Selector brand in Asia in 2013, the Middle East in 2018 and Africa in 2019;

·    all three brands are market leaders with similar audiences in each of their respective territories: wealth managers, discretionary portfolio managers, fund selectors, private bankers, high net-worth advisers and, to a lesser extent, institutional investors in Europe;

·     each brand has a website, regular digital newsletters and produces ad-hoc guides on topical information in the asset management industry;

·      Portfolio Adviser and Expert Investor also have monthly and bi-monthly print editions respectively; and

·      each brand has significant awards and conference portfolios aimed at senior buy-side decision makers.

International Adviser:

·      the brand was Last Word's inaugural title launched in 2006;

·    its audience is the global financial intermediary market servicing expatriate diaspora with complex financial planning needs;

·     the International Adviser website provides news and information on cross-border insurance, investment, banking and pension products; and

·   its portfolio of awards and conferences present a wide variety of product providers and asset managers with an educational and focused environment in which to present and demonstrate market insight, raise their profile and ultimately increase business among the key retail distribution channels globally.

Recently launched investor-facing brands

Content Clarity:

o  an online resource launched in 2017 to help UK-based fund selectors, fund analysts, wealth managers and independent financial advisers keep up to date with the latest thinking from asset managers and their research teams which is sold to asset managers as a subscription service.

ESG Clarity:

o  an online resource launched in 2018 and dedicated to educating global wealth managers and fund selectors on environmental, social and corporate governance ("ESG") issues which affect investment decisions.

Client-Facing Brands

Data products:

Future Flows:

o  a subscription research service that tracks the future asset allocation preferences of wealth managers and investors in Europe, the UK and Asia;

o  Last Word engages with a network of more than 500 fund selectors and investment strategists on a quarterly basis to track their forward-looking buying and selling intentions across more than 23 different asset classes; and

o  the data is collated, analysed and published with commentary in print form in three regional versions: Europe, the UK and Asia. The data is also used by Last Word to plan its own activities to match market demand more closely.

Content marketing propositions:

Content Clever/FinPix:

o  the Content Clever brand is used by Last Word to offer content creation services to its clients;

o  the content may include any form of writing, print, digital, video and audio depending on a client's bespoke requirements; and

o  the business uses its FinPix brand to produce broadcast-quality video and interactive digital services.

Radius:

o  launched in 2017, and currently operating in the UK, Radius offers asset management groups a comprehensive outsourced events management solution; and

o  Radius will manage an event of any size for clients and simultaneously offer content creation services alongside the event which may be distributed, at additional cost, via Last Word's suite of brands, extending the life of an event and enhancing their marketing investment.

Events Overview

·      Last Word's events are a core revenue generator for the business;

·      it operates roundtables, breakfast meetings, half day forums, and multi-day 'congress' style events, as well as hosting awards;

·      delegates do not pay to attend and are instead invited to do so, ensuring Last Word is in control of attendee quality; and

·      sponsors pay to speak at the events in the form of sponsorship. Their presentations are vetted for quality by Last Word to ensure a high standard of educational information is shared.

Summary Financial Information and Business Model

Last Word does not prepare consolidated financial results, therefore, for disclosure purposes, the Company has aggregated the financial information for Last Word (UK) Limited, Last Word (Asia) Pte Ltd and Last Word (HK) Limited to provide the following summary for the four years ended 31 December 2018:

£m	31 December 2015	31 December 2016	31 December 2017	31 December 2018
Revenue	8.5	8.7	9.2	10.2
EBITDA	1.5	0.9	0.3	1.1

As at 31 December 2018, Last Word had consolidated net assets of approximately £1.42 million (2017: £0.78 million).

In 2018, Last Word's revenues were generated from:

·      sponsorship of its events (59 per cent.);

·      sponsorship and advertising on its websites (12 per cent.);

·      sponsorship and advertising in its print publications (9 per cent.);

·      subscription revenues from its custom content websites and Future Flows data product (12 per cent.); and

·      project fees from its custom marketing clients (8 per cent.).

Clients

Last Word has a stable base of approximately 190 clients, including global leaders such as Aberdeen Standard Investments, Allianz Global Investors, BNY Mellon Investment Management, Hermes Investments, Invesco, Janus Henderson, Jupiter Investments, Merian Global Investors, Schroders and T. Rowe Price. All of these clients have contracted with Last Word for each of the last 4 years and between them utilise a portfolio of Last Word brands and propositions. The top three clients, in aggregate, accounted for approximately 16 per cent. of Last Word's total revenues in 2018 while the top ten clients accounted for approximately 35 per cent. of total revenues in the same period.

Growth plans

Following Completion, the Board's growth plans for Last Word comprise:

·      continued expansion of the Portfolio Adviser / Expert Investor / Fund Selector events portfolios;

·      developing interactive versions of Last Word's Future Flows data;

·      developing subscriber revenues;

·      increasing the scale and scope of Last Word's content marketing activities;

·      launching Megatrends, a brand providing thought leadership on global changes, such as sustainability and diversity and the shifting power of the West to the East, affecting the asset management and consultancy industries;

·      setting up a US operation to:

o  launch an extension of the Fund Selector brand into the US comprising a series of larger 'congress' and more specialised 'forum' events focused on the domestic, international and cross-border Latin American asset management markets;

o  launch Future Flows Americas;

o  expand ESG Clarity to American audiences; and

o  launch content marketing propositions via Content Clever, Content Clarity and Radius.

5              Reasons for the Acquisition

Chosen business communities: Strengthening Bonhill's position in Financial Services

Bonhill has a market leading position in the US asset management/financial adviser sector with InvestmentNews. Last Word is a similar business, servicing the same asset management clients, addressing similar financial adviser, fund selector and wealth manager audiences and creating comparable news, information and analysis focused on the asset management/financial adviser industry. However, Last Word is not active in the US being focused on entirely complementary territories of the UK, Europe and Asia. Bringing the two businesses together within the Group will enable Bonhill to provide a truly global sales and marketing proposition to the international asset management community.

The Group has an established market presence within the UK Financial Services community with brands such as What Investment, Growth Company Investor and the Quoted Company Awards, which also cater to the UK asset manager, financial adviser and investor community. Bringing the Last Word and Bonhill brands together provides an opportunity to cross-market and cross-sell products across the combined client and audience base in the UK.

The Board believes that bringing together the InvestmentNews and Last Word businesses will create the leading B2B media business servicing the sales and marketing needs of the asset management community on a truly global basis.

The Board anticipates that the Acquisition will be earnings enhancing from Completion.

Core propositions: Complementing and enhancing Bonhill's core propositions

Business Information: Last Word has significant experience in digital publishing for its own brands and, increasingly, in providing a content marketing service for its asset management clients. The Enlarged Group will be able to centralise its digital publishing function, share best practice, attract higher quality digital staff and achieve cost efficiencies. 

Live Events: Last Word has a well-established series of 86 events and a highly experienced events team with expertise in launching and managing events in the UK, Europe, Asia and the Middle East. Both Bonhill and InvestmentNews will benefit from Last Word's events management expertise and the Enlarged Group will have a portfolio of approximately 118 events across the UK, Europe, North America and Asia.

Data: Last Word has been developing and growing the reach of its Future Flows product over the last few years. The experience gained in launching this, and its new Megatrends product, will complement the nascent data competences in the InvestmentNews team which have a small, but growing portfolio of data products.

International territories: Extending Bonhill's geographical footprint

Last Word has established offices in Hong Kong and Singapore as well as extensive experience of operating across Europe, the Middle East, Africa and in a number of Asian countries. Bonhill intends to leverage the Last Word team's long standing in-country reputation, relationships, experience and network of clients, audience and suppliers.

The Acquisition also provides Last Word with the opportunity to leverage InvestmentNews' presence and platform to expand its existing propositions into the US, in particular launching a new Fund Selector brand into the US together with a portfolio of similar branded events, its Future Flows data product and its ESG Clarity, Content Clarity and Radius content marketing propositions.

6              Principal terms of the Acquisition

Under the terms of the Acquisition Agreement, the Company has conditionally agreed to acquire the (i) entire issued share capital of Last Word (UK) from the Sellers (other than Tom Porter); and (ii) remaining 25 per cent. of the entire issued share capital of Last Word (Asia) not already owned by Last Word (UK) from Tom Porter for an initial consideration of £8.0 million, of which £6.0 million will be satisfied in cash and £2.0 million will be satisfied by the issue to the Sellers of the Initial Consideration Shares.

The initial cash consideration is subject to a normalised working capital adjustment at Completion, the amount of which will be estimated and agreed between the parties prior to Completion, and then finalised by agreement or determination following Completion to reflect the normalised working capital position. The Initial Consideration Shares are being issued at the Placing Price and will rank in full for all dividends or other distributions declared, made or paid on the share capital of the Company after Admission, and ranking pari passu in all other respects with the Existing Ordinary Shares.

Earn-out Consideration will be payable to the Sellers, subject to the achievement by the Target Group of certain performance criteria for the financial years ending 31 December 2019 ("FY2019") and 31 December 2020 ("FY2020"). The Company will pay to the Sellers £7.50 for every £1 by which the earnings before interest, tax, depreciation and amortisation (EBITDA) of the Target Group exceed £1.5 million in FY2019, and the Company will pay to the Sellers £5.63 for every £1 by which the EBITDA of the Target Group exceed £3.5 million in FY2020. The Earn-out Consideration is payable in cash, subject to the Company's right to elect to satisfy up to 25 per cent. of the Earn-out Consideration by the issue to the Sellers of the Earn-out Shares. If the Company so elects, the Earn-out Shares will be valued at the higher of (i) the Placing Price (adjusted to take into account of variations in the capital of the Company occurring after Completion); and (ii) the closing mid-market price of an Ordinary Share on the business day immediately preceding the date on which the relevant tranche of the Earn-out Consideration is agreed or determined.

The Sellers have agreed with the Company not to dispose of any of the Initial Consideration Shares and the Earn-out Shares for a period of 24 months following the date of their respective issue (save in certain limited circumstances, such as in the case of a takeover of the Company, a Court sanctioned scheme of arrangement, or a purchase by the Company of its own shares). At any time following the expiry of that 24-month period, the Sellers may only sell or transfer their Initial Consideration Shares or Earn-out Shares through the Company's brokers at the relevant time. The Sellers have further agreed with the Company that, for the period of 24 months following the date of their issue, they will exercise all of their voting rights attaching to the Initial Consideration Shares and the Earn-out Shares in favour of any Shareholders' resolution proposed by the Board at any general meeting of the Company, and not exercise any such voting rights in respect of any such resolution contrary to the recommendation of the Company's Chairman.    

The maximum aggregate purchase consideration payable by the Company to the Sellers pursuant to the Acquisition Agreement is £20.0 million.

The Acquisition Agreement contains customary warranties and indemnities in respect of the Sellers and the business of the Target Group, subject to customary limitations on liability. In addition, certain of the Sellers have entered into customer and employee non-solicit and other restrictive covenants for a period of three years following Completion.

Completion is conditional on (i) the passing of Resolution 1 at the General Meeting; (ii) the Placing Agreement becoming unconditional in accordance with its terms (save for any condition relating to Completion and Admission); and (iii) Admission, all to be satisfied on or before 23 April 2019.

The Company also has the right to terminate the Acquisition Agreement if at any time before Completion (a) it becomes aware that any warranty in the Acquisition Agreement was, when given at signing, untrue, inaccurate or misleading; (b) any matter or circumstance occurs which would render any warranty untrue, inaccurate or misleading in any material respect if repeated by reference to the circumstances then subsisting;  (iii) certain of the Sellers are in material breach of the provisions relating to the conduct of the Last Word business before Completion; or (iv) the Sellers fail to comply with their obligations at Completion.

7              Details of the Placing

The Company also announces that it is raising, in aggregate_, approximately £10.0 million (approximately £8.9 million net of expenses) through the Placing pursuant to which Stockdale Securities and Canaccord Genuity, as agents of and on behalf of the Company, have agreed to conditionally place the Placing Shares firm with Placees at the Placing Price.

The Placing is conditional, amongst other things, on:

(i)            the passing of Resolution 1 at the General Meeting;

(ii)           the Acquisition Agreement becoming unconditional in all respects (save for any conditions that relate to Admission or the Placing Agreement);

(iii)          the Placing Agreement becoming unconditional in all respects save for Admission by no later than 8.00 a.m. on 10 April 2019 (or such later date, as the Brokers may agree being no later than 8.00 a.m. on 23 April 2019) and not having been terminated in accordance with its terms; and

(iv)          Admission.

The Placing Agreement contains customary warranties given by the Company to the Brokers in respect of matters relating to the Company and its business and a customary indemnity given by the Company to the Brokers in respect of certain liabilities they may incur in respect of the Placing. The Brokers have the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular in the event of a material breach of the warranties or a force majeure event.

The Placing Shares will represent approximately 24.5 per cent. of the Enlarged Share Capital at Admission and will rank pari passu in all respects with the Existing Ordinary Shares including the right to receive all dividends and other distributions declared, made or paid after their date of issue.

If Resolution 1 is passed at the General Meeting, it is expected that Admission will become effective and dealings in the Placing Shares will commence at 8.00 a.m. on 10 April 2019.

8              Use of proceeds

Of the Placing proceeds, £6.0 million will be used to satisfy the initial cash consideration payable in respect of the Acquisition, with the balance being used to fund the costs incurred in connection with the Proposals and contribute towards the deferred consideration payable.

9              Admission, settlement and dealings

Application will be made for the New Ordinary Shares to be admitted to trading on AIM. If Resolution 1 is passed at the General Meeting, it is expected that Admission will become effective and dealings in the Ordinary Shares will commence at 8.00 am. on 10 April 2019. These dates and times may change.

The Company will apply for the New Ordinary Shares to be admitted to CREST with effect from Admission. Accordingly, settlement of transactions in New Ordinary Shares held in uncertificated form following Admission will take place within the CREST system.

CREST is a voluntary system and holders of Ordinary Shares who wish to receive and retain share certificates will be able to do so.

All Placing Shares will be issued payable in full at the Placing Price. It is intended that, if applicable, definitive share certificates in respect of the New Ordinary Shares will be distributed by 24 April 2019 or as soon as practicable thereafter. No temporary documents of title will be issued.

10           Capital Reduction

As a result of the Group's improving financial position, and the strengthening of the Company's reserves, the Board believes that it is now desirable to commence a progressive dividend policy in respect of the year ending 31 December 2019, with an initial dividend to be paid for the six months ending 30 June 2019.  It is also the Board's intention that the Company will on an on-going basis pay an interim and a final dividend of one-third and two-thirds of the annual dividend payable.  In each case, the Directors will take account of the current and prospective financial and trading position of the Group, including its level of cash reserves and cash requirements, at the relevant time. 

However, the Company does not have distributable reserves to enable the Board to initiate the progressive dividend policy described above. The Board therefore proposes that the Capital Reduction be effected in order to create distributable reserves of the Company from which dividends may be paid.

At 31 December 2018, the Company had retained losses of £11,491,214.  At the same date, the amount standing to the credit of the Company's share premium account amounted to £26,714,621 and the amount standing to the credit of the Company's capital redemption reserve (which arose from the cancellation in December last year of the Company's deferred share capital, which the Board announced last August was to occur) was £3,981,942.  As at the date of this announcement, the amounts standing to the credit of the share premium account and the capital redemption reserve remain unchanged. 

The Capital Reduction is proposed to be effected by cancelling the balances standing to the credit of the Company's share premium account and capital redemption reserve as at the date on which the Capital Reduction becomes effective.  This will include the amount of any share premium arising from the issue of the New Ordinary Shares. Cancelling the balances of the share premium account and capital redemption reserve will, subject to the discharge of any undertakings required by the Court as explained below, be sufficient to eliminate the deficit on the Company's retained loss account and create positive distributable reserves.  As a result, any positive distributable reserves generated by the Company after the date on which the Capital Reduction takes effect will be available for the Board to use for the purposes of paying dividends.

The Capital Reduction requires the approval of Shareholders.  Accordingly, a special resolution (Resolution 2) will be proposed at the General Meeting to approve the Capital Reduction, which requires a majority in favour of at least 75 per cent. of those Shareholders attending and voting in person or by proxy in order to be passed.

In addition to the approval by Shareholders, the Capital Reduction requires the approval of the Court.  Accordingly, following the General Meeting, an application will be made to the Court in order to confirm and approve the Capital Reduction.

In providing its approval of the Capital Reduction, the Court may require protection for the creditors (including contingent creditors) of the Company whose debts remain outstanding on the relevant date, except in the case of creditors which have consented to the Capital Reduction.  Any such creditor protection may include seeking the consent of the Company's creditors to the Capital Reduction or the provision by the Company to the Court of an undertaking to deposit a sum of money into a blocked account created for the purpose of discharging the non-consenting creditors of the Company.

It is anticipated that the initial directions hearing in relation to the Capital Reduction will take place on 16 April 2019, with the final Court Hearing taking place on 7 May 2019 and the Capital Reduction becoming effective on the same day, following the necessary registration of the Court Order at Companies House.

There will be no change in the number of Ordinary Shares in issue (or their nominal value) as a result of the implementation of the Capital Reduction.  The Capital Reduction itself will not involve any distribution or repayment of capital or share premium by the Company and will not reduce the underlying net assets of the Company.  The distributable reserves arising on the Capital Reduction will, subject to the discharge of any undertakings required by the Court as explained above, support the Company's ability to pay dividends.

The Board reserves the right to abandon or to discontinue (in whole or in part) the application to the Court in the event that the Board considers that the terms on which the Capital Reduction would be (or would be likely to be) confirmed by the Court would not be in the best interests of the Company and/or its Shareholders as a whole.  The Board has undertaken a thorough and extensive review of the Company's liabilities (including contingent liabilities) and considers that the Company will be able to satisfy the Court that, as at the date (if any) on which the Court Order relating to the Capital Reduction and the statement of capital in respect of the Capital Reduction have both been registered by the Registrar of Companies at Companies House (at which point the Capital Reduction will become effective), the Company's creditors will be sufficiently protected.

The Capital Reduction is not conditional on the Acquisition or the Placing becoming unconditional.

11           Audited final results for the nine months ended 31 December 2018

Earlier today, the Company announced its audited final results for the nine months ended 31 December 2018. Revenue was £8.0 million (year ended 31 March 2018: £2.61 million), adjusted EBITDA of £0.9 million (year ended 31 March 2018: £0.4 million) and adjusted EBIT of £0.7m (year ended 31 March 2018: -£0.4m).

12           Current trading

Sales for the first two months of the year are in line with market expectations. The Board is beginning to see the planned change in mix from the more traditional business information towards live events and custom projects. Since the period end, the Group's flagship event, Women in IT London, which was held on 30 January 2019, delivered sales 37 per cent. ahead of those for last year's event and we are excited about the potential for this global franchise.

13           General Meeting

To enable the Proposals to be implemented, it is necessary for Shareholders to:

(a)           give the Board the necessary authorities to allot the Initial Consideration Shares, the Earn-out Shares and the Placing Shares; and

(b)           approve the Capital Reduction.

The following resolutions will be proposed at the General Meeting, both of which will be proposed as special resolutions:

Resolution 1 - Authority to allot shares and disapplication of the pre-emption rights

(a)           To grant authority to the Directors to allot (i) shares in connection with the Acquisition and the Placing; and (ii) any further Ordinary Shares up to a maximum aggregate nominal amount of £323,904.62, which amount represents approximately two thirds of the Company's Enlarged Share Capital. This additional two-thirds authority is granted on the basis that any amount in excess of one third of the Enlarged Share Capital may only be allotted pursuant to a fully pre-emptive rights issue. The Directors have no present intention of exercising any part of the additional 'two thirds' authority.

(b)           To allow the Directors to allot equity securities as if the statutory pre-emption rights contained in section 561(1) of the Act do not apply.  This authority is limited to the allotment of shares in connection with (i) the Acquisition and the Placing; (ii) rights issues and other pre-emptive offers; and (iii) otherwise up to an aggregate nominal amount of £48,585.70, representing approximately 10 per cent. of the Enlarged Share Capital.

Resolution 2 - Capital Reduction

To approve the cancellation of the Company's share premium account and capital redemption reserve.

14           Recommendation

The Directors consider that the Proposals are in the best interests of the Company and Shareholders as a

whole.

 

PLACING STATISTICS          

Placing Price per Placing Share	84 pence
Number of Existing Ordinary Shares	34,299,978
Number of Initial Consideration Shares	2,380,952
Number of Placing Shares	11,904,762
Number of Ordinary Shares in issue immediately following Admission	48,585,692
Percentage of the Enlarged Share Capital represented by the Placing Shares and the Initial Consideration Shares	29.4 per cent.
Estimated net proceeds of the Placing receivable by the Company	£8.9 million

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

	2019
Publication and posting of the Circular and the Forms of Proxy	25 March
Latest time and date for return of Forms of Proxy or CREST Proxy instructions for the General Meeting	10.00 a.m. on 5 April
General Meeting	10.00 a.m. on 9 April
Announcement of the result of the General Meeting	9 April
Admission to trading on AIM of the Initial Consideration Shares and the Placing Shares and enablement in CREST, and completion of the Acquisition	8:00 a.m. on 10 April
Despatch of definitive share certificates for New Ordinary Shares in certificated form (where applicable)	by 24 April
Expected date of initial directions hearing of the Court	10:30 a.m. on 16 April
Expected date of Court Hearing to confirm the Capital Reduction	10:30 a.m. on 7 May
Expected effective date for the Capital Reduction	7 May

Notes:

1. References in this announcement are to London, UK time unless otherwise stated.

2. The timing of the events in the above timetable and in this announcement is indicative only.  If any of the above times and/or dates are adjusted by the Company, the revised times and/or dates will be notified to the London Stock Exchange by an announcement via an RIS and, where appropriate, to Shareholders.

3. The expected dates for the confirmation of the Capital Reduction by the Court and the Capital Reduction becoming effective are based on provisional dates that have been obtained for the required Court hearings of the Company's application.  These provisional hearing dates are subject to change and dependent on the Court's timetable.  If the expected dates of the Court hearings (and consequently the expected effective date for the Capital Reduction) are changed, the Company will give notice of this to the extent practicable by issuing an announcement on the Company's website at www.bonhillplc.com/investors.   

4. The timetable assumes that there is no adjournment of the General Meeting.  If there is an adjournment, all subsequent dates are likely to be later than those shown.

 

DEFINITIONS

The following definitions apply throughout this announcement, unless the context otherwise requires:
Act	Companies Act 2006
Acquisition	the proposed acquisition of Last Word by the Company pursuant to the Acquisition Agreement
Acquisition Agreement	the conditional agreement in relation to the Acquisition dated 25 March 2019 between the Sellers and the Company, a summary of the principal terms and conditions of which is set out in this announcement
Admission	admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules for Companies
AIM	the market of that name operated by the London Stock Exchange
AIM Rules for Companies	the AIM Rules for Companies published by the London Stock Exchange, as amended
Board or Directors	the directors of the Company as at the date of this announcement, or any duly authorised committee thereof
Brokers	Stockdale Securities and Canaccord Genuity
B2B	business-to-business
Canaccord Genuity	Canaccord Genuity Limited, a company incorporated in England and Wales with registered number 01774003
Capital Reduction	the proposed cancellation of the Company's share premium account and capital redemption reserve as set out in the Notice of Meeting
Certificated or certificated form	means not in uncertificated form (that is, not in CREST)
Circular	the circular to be sent by the Company to its Shareholders setting out, inter alia, details of the Proposals and the Resolutions and incorporating a notice convening the General Meeting
Company or Bonhill	Bonhill Group plc, a company incorporated in England and Wales with registered number 02607995
Completion	completion of the Acquisition
Court	the High Court of Justice in England and Wales
Court Hearing	the hearing by the Court confirming the Capital Reduction
Court Order	the order of the Court confirming the Capital Reduction
CREST	the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the operator
CREST Regulations	the Uncertificated Securities Regulations 2001 (SI2001/3755)
Earn-out Consideration	the additional consideration which may become payable under the Acquisition Agreement
Earn-out Shares	up to a maximum of 3,571,429 new Ordinary Shares which may, at the Company's election, be issued pursuant to the Acquisition Agreement in part satisfaction of the Earn-out Consideration
EMEA	Europe, the Middle East and Africa
Enlarged Group	the Group as enlarged following the Acquisition
Enlarged Share Capital	the issued share capital of the Group immediately following completion of the Acquisition and the Placing
Euroclear	Euroclear UK and Ireland Limited (formerly named CrestCo Limited), the operator of CREST
Existing Ordinary Share Capital	the issued ordinary share capital of the Company at the date of this announcement, comprising 34,299,978 Existing Ordinary Shares
Existing Ordinary Shares	ordinary shares of 1p each in the capital of the Company in issue as at the date of this announcement
FCA	the Financial Conduct Authority
Form of Proxy or Proxy Form	the form of proxy to be enclosed with the Circular for use by Shareholders in connection with the General Meeting
FSMA	the Financial Services and Markets Act 2000, as amended
General Meeting	the general meeting of the Company convened for 10.00 a.m. on 9 April 2019 at the offices of Dentons UK and Middle East LLP at One Fleet Place, London EC4M 7WS, and any adjournment thereof, notice of which is set out at the end of the Circular
Group	the Company and its subsidiaries at the date of this announcement
Initial Consideration Shares	2,380,952 new Ordinary Shares which are to be issued pursuant to the Acquisition upon Completion
Last Word Media or Last Word or Target Group	Last Word (UK), Last Word (Asia) and Last Word (HK) and their respective businesses
Last Word (Asia)	Last Word Media (Asia) Pte Limited, a company incorporated and registered in Singapore with registered number 201008308E
Last Word (HK)	Last Word Media (HK) Limited, a company incorporated and registered in Hong Kong with registered number 2127095
Last Word (UK)	Last Word Media (UK) Limited, a company incorporated and registered in England and Wales with registered number 05573633
London Stock Exchange	London Stock Exchange plc
New Ordinary Shares	the Initial Consideration Shares and the Placing Shares
Notice or Notice of Meeting	the notice of General Meeting set out at the end of the Circular
Ordinary Shares	ordinary shares of 1p each in the capital of the Company
Placees	persons who have agreed to subscribe for Ordinary Shares pursuant to the Placing
Placing	the conditional placing by Stockdale Securities and Canaccord Genuity, as agents of and on behalf of the Company, of the Placing Shares at the Placing Price on the terms and subject to the conditions of the Placing Agreement
Placing Agreement	the agreement dated 25 March 2019 and made between the Company, Stockdale Securities and Canaccord Genuity, details of which are set out this announcement
Placing Price	84 pence per Placing Share
Placing Shares	11,904,762 new Ordinary Shares which are to be issued under the Placing
Proposals	the Acquisition, the Placing and the Capital Reduction
Registrars or Share Registrars	Share Registrars Limited
RIS	a regulatory information service that is approved by the FCA and that is on the list of regulatory information service providers as maintained by the FCA
Resolutions	the resolutions to be proposed at the General Meeting, details of which are set out in the Notice of Meeting
Sellers	Rod Boulogne, Jamie Hinchliffe, Dylan Emery, Tom Porter and certain others holding options to subscribe for shares in Last Word (UK)
Shareholders	holders of Ordinary Shares from time to time
Sterling, £, pence  or p	the lawful currency of the UK
Stockdale Securities	Stockdale Securities Limited, a company incorporated in England and Wales with registered number 00762818
Uncertificated or uncertificated form	recorded on the relevant register of Ordinary Shares as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST
United Kingdom or UK	the United Kingdom of Great Britain and Northern Ireland
United States or US	the United States of America, its territories and possessions, any state of the United States and the District of Columbia

 

NOTICE TO OVERSEAS SHAREHOLDERS

The Placing Shares have not been and will not be registered or qualified under the relevant laws of any state, province or territory of the Excluded Territories and may not be offered or sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, into or within any of the Excluded Territories except pursuant to an applicable exemption from such Excluded Territory's registration or qualification requirements.

Subject to certain exceptions in compliance with the Securities Act and the rules promulgated thereunder or any applicable laws in the Excluded Territories, this announcement will not be published, released, or distributed, directly or indirectly; and must not be sent, in whole or in part: (i) in or into any Excluded Territory; (ii) to any person within the United States; or (iii) to any person in any jurisdiction where to do so might constitute a violation of local securities laws or regulation.

The Placing Shares have not been and will not be registered under the Securities Act or under any securities laws of any state or other jurisdiction of the United States. The Placing Shares may not be offered, sold, taken up, exercised, resold, transferred or delivered, directly or indirectly to or within the United States or to any US Person, except pursuant to an applicable exemption from, or a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer in the United States.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission (the SEC), any state securities commission in the United States or any other US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Placing Shares or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.

No action has been taken by the Company, Stockdale Securities or Canaccord Genuity that would permit an offer of the Placing Shares or possession or distribution of this announcement or any other offering or publicity material in any jurisdiction where action for that purpose is required, other than the United Kingdom. None of the Company, Stockdale Securities, Canaccord Genuity or any of their respective affiliates, directors, officers, employees or advisers is making any representation to any offeree, purchaser or acquirer of Placing Shares regarding the legality of an investment in the Placing Shares by such offeree, purchaser or acquirer under the laws applicable to such offeree, purchaser or acquirer. This announcement does not constitute an offer to sell the Placing Shares to any person in any jurisdiction. The Company reserves the right, in its sole and absolute discretion, to reject any subscription or purchase of the Placing Shares that the Company or its representatives believe may give rise to a breach or violation of any law, rule or regulation.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

Certain statements contained in this announcement constitute forward-looking statements.  The forward-looking statements contained in this announcement include statements about the expected effects of the Admission, the expected timing of the Admission and other statements other than in relation to historical facts.  Forward-looking statements including, without limitation, statements typically containing words such as "intends", "anticipates", "targets", "estimates", "believes", "should", "plans", "will", "expects" and similar expressions or statements that are not historical facts are intended to identify those expressions or statements as forward-looking statements.  The statements are based on the current expectations of Bonhill and are subject to uncertainty and changes in circumstances.  By their nature, forward-looking statements involve risk and uncertainty and the factors described in the context of such forward-looking statements in in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements.  There are also a number of other factors that could cause actual results or developments to differ materially from those expressed or implied by such forward-looking statements.  These factors include, but are not limited to, local and global political and economic conditions, interest rate fluctuations (including those from any potential credit rating decline) and legal or regulatory developments and changes.  Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements.

None of Bonhill Group plc, Stockdale Securities and Canaccord Genuity nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied by any forward-looking statements contained herein will actually occur. Other than in accordance with their legal or regulatory obligations (including under the AIM Rules, the Disclosure and Transparency Rules of the Financial Conduct Authority and the City Code on Takeovers and Mergers), none of Bonhill Group plc, Stockdale Securities and Canaccord Genuity is under any obligation, and each of them expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

APPENDIX TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, DOES NOT CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.  THIS ANNOUNCEMENT AND THIS APPENDIX DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES OF THE COMPANY IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX AND THE INFORMATION CONTAINED THEREIN (TOGETHER, THE "ANNOUNCEMENT") IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, THE REPUBLIC OF IRELAND, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.  THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY THE LONDON STOCK EXCHANGE, NOR IS IT INTENDED THAT IT WILL BE SO APPROVED.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING.  THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA") WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED ("QUALIFIED INVESTORS"), BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(e) OF DIRECTIVE 2003/71/EC AS AMENDED, INCLUDING BY THE 2010 PROSPECTUS DIRECTIVE AMENDING DIRECTIVE (DIRECTIVE 2010/73/EC) AND TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE (THE "PROSPECTUS DIRECTIVE"); AND (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO (I) ARE PERSONS HAVING PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) (INVESTMENT PROFESSIONALS) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS.  PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.  ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.  THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

INFORMATION TO DISTRIBUTORS

FOR THE PURPOSES OF THE PRODUCT GOVERNANCE REQUIREMENTS OF EACH OF (A) EU DIRECTIVE 2014/65/EU ON MARKETS IN FINANCIAL INSTRUMENTS, AS AMENDED ("MIFID II"); (B) ARTICLES 9 AND 10 OF COMMISSION DELEGATED DIRECTIVE (EU) 2017/593 SUPPLEMENTING MIFID II; AND (C) LOCAL IMPLEMENTING MEASURES (TOGETHER, THE "MIFID II PRODUCT GOVERNANCE REQUIREMENTS") AND FOR NO OTHER PURPOSES, EACH OF STOCKDALE SECURITIES LIMITED ("STOCKDALE") AND CANACCORD GENUITY  LIMITED ("CANACCORD GENUITY") HAS CARRIED OUT AN ASSESSMENT OF THE ORDINARY SHARES AND HAS DETERMINED THEM TO BE: (I) COMPATIBLE WITH AN END TARGET MARKET OF RETAIL INVESTORS AND INVESTORS WHO MEET THE CRITERIA OF PROFESSIONAL CLIENTS AND ELIGIBLE COUNTERPARTIES, EACH AS DEFINED UNDER THE FCA'S CONDUCT OF BUSINESS SOURCEBOOK; AND (II) ELIGIBLE FOR DISTRIBUTION THROUGH ALL DISTRIBUTION CHANNELS AS ARE PERMITTED BY MIFID II (THE "TARGET MARKET ASSESSMENT").

ALL DISTRIBUTORS SHOULD NOTE THAT: THE PRICE OF ORDINARY SHARES MAY DECLINE AND INVESTORS COULD LOSE ALL OR PART OF THEIR INVESTMENT; THE ORDINARY SHARES OFFER NO CERTAINTY OF INCOME AND NO CAPITAL PROTECTION; AND AN INVESTMENT IN THE ORDINARY SHARES IS COMPATIBLE ONLY WITH INVESTORS WHO: (I) DO NOT NEED A CERTAIN AND PROTECTED INCOME OR CAPITAL PROTECTION; AND (II) (EITHER ALONE OR IN CONJUNCTION WITH AN APPROPRIATE FINANCIAL OR OTHER ADVISER) ARE CAPABLE OF EVALUATING THE MERITS AND RISKS OF SUCH AN INVESTMENT AND HAVE SUFFICIENT RESOURCES TO BE ABLE TO BEAR ANY LOSSES THAT MAY RESULT THEREFROM. THE TARGET MARKET ASSESSMENT IS ADDITIONAL TO THE RESTRICTIONS CONTAINED WITHIN THE TERMS OF THE PLACING. IN ALL CIRCUMSTANCES, STOCKDALE AND CANACCORD GENUITY WILL ONLY PROCURE INVESTORS WHO MEET THE CRITERIA OF PROFESSIONAL CLIENTS AND ELIGIBLE COUNTERPARTIES.

FOR THE AVOIDANCE OF DOUBT, THE TARGET MARKET ASSESSMENT DOES NOT CONSTITUTE: (A) AN ASSESSMENT OF SUITABILITY OR APPROPRIATENESS FOR THE PURPOSES OF MIFID II OR OTHERWISE; OR (B) A RECOMMENDATION TO ANY INVESTOR OR GROUP OF INVESTORS TO INVEST IN, OR PURCHASE, OR TAKE ANY OTHER ACTION WHATSOEVER WITH RESPECT TO THE ORDINARY SHARES.

EACH DISTRIBUTOR IS RESPONSIBLE FOR UNDERTAKING ITS OWN TARGET MARKET ASSESSMENT IN RESPECT OF THE ORDINARY SHARES AND DETERMINING APPROPRIATE DISTRIBUTION CHANNELS.

THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES. THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES.  SUBJECT TO CERTAIN EXCEPTIONS AND AT THE SOLE DISCRETION OF THE COMPANY, THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS.  NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES, THE UNITED KINGDOM OR ELSEWHERE.  NO MONEY, SECURITIES OR OTHER CONSIDERATION FROM ANY PERSON INSIDE THE UNITED STATES IS BEING SOLICITED AND, IF SENT IN RESPONSE TO THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT, WILL NOT BE ACCEPTED.

EACH PLACEE SHOULD CONSULT WITH ITS ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES.  THE DISTRIBUTION OF THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS, AND ANY PERSON INTO WHOSE POSSESSION THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, SUCH RESTRICTIONS.

No action has been taken by the Company, Stockdale, Canaccord Genuity or any of their respective affiliates, agents, directors, officers or employees that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to the Placing Shares in any jurisdiction where action for that purpose is required. 

This Announcement or any part of it does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia), Canada, the Republic of Ireland, Australia, the Republic of South Africa, Japan or any other jurisdiction in which the same would be unlawful.  No public offering of the Placing Shares is being made in any such jurisdiction.

All offers of the Placing Shares will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus.  In the United Kingdom, this Announcement is being directed solely at persons in circumstances in which section 21(1) of FSMA does not apply.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement.  Any representation to the contrary is a criminal offence in the United States.  The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained for the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Placing Shares and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan, the Republic of Ireland or the Republic of South Africa or in any other jurisdiction.  Accordingly, the Placing Shares may not (unless an exemption under relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Australia, Canada, Japan, the Republic of Ireland or the Republic of South Africa or any other jurisdiction outside the United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual right or other legal obligation to forward a copy of this Announcement should seek appropriate advice before taking any action.

This Announcement should be read in its entirety.  In particular, you should read and understand the information provided in this "Important Information" section of this Announcement

Each person who is invited to and who chooses to participate in the Placing (a "Placee") will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and subscribing for Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix.

In particular, each such Placee represents, warrants, undertakes, agrees and acknowledges (amongst other things) that:

1                 it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

2                 in the case of a Relevant Person in a member state of the EEA which has implemented the Prospectus Directive (each, a "Relevant Member State") who acquires any Placing Shares pursuant to the Placing:

2.1             it is a Qualified Investor within the meaning of Article 2(1)(e) of the Prospectus Directive;

2.2             in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive:

2.2.1          the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than Qualified Investors or in circumstances in which the prior consent of Stockdale and Canaccord Genuity has been given to the offer or resale; or

2.2.2          where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons;

3                 it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the representations, warranties, indemnities, acknowledgements, undertakings and agreements contained in this Announcement;

4                 it understands (or if acting for the account of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in this Appendix; and

5                 except as otherwise permitted by the Company and subject to any available exemptions from applicable securities laws, it (and any account referred to in paragraph 3 above) is outside the United States acquiring the Placing Shares in offshore transactions as defined in and in accordance with Regulation S under the Securities Act.

No prospectus

No prospectus or other offering document has been, or will be submitted to be approved by the FCA or any other regulatory body in any Relevant Member State in relation to the Placing or the Placing Shares.

The Placees' commitments will be made solely on the basis of this Announcement and subject to any further terms set forth in the Form of Confirmation to be sent to individual Placees.

Each Placee, by participating in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any information (other than this Announcement), representation, warranty or statement made by or on behalf of Stockdale, Canaccord Genuity, the Company or any other person and none of Stockdale, Canaccord Genuity, the Company or any other person acting on such person's behalf nor any of their respective affiliates has or shall have any liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement.  Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing.  Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Details of the Placing Agreement and the Placing Shares

Stockdale and Canaccord Genuity have today entered into the Placing Agreement with the Company under which, on the terms and subject to the conditions set out in the Placing Agreement, each of Stockdale and Canaccord Genuity, as agent for and on behalf of the Company, has agreed to use its reasonable endeavours to procure Placees to subscribe for the Placing Shares at the Placing Price, such subscription commitments being conditional upon the conditions (summarised below) being satisfied by the Company or otherwise waived by Stockdale and Canaccord Genuity. 

The Placing Shares will, when issued, be subject to the articles of association of the Company and credited as fully paid and will rank pari passu in all respects with the Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the Placing Shares.

Application for admission to trading

Application will be made to the London Stock Exchange for admission of the Placing Shares to trading on AIM.

It is expected that Admission will take place at 8.00 a.m. on or around 10 April 2019 and that dealings in the Placing Shares on AIM will commence at the same time.

Principal terms of the Placing

1                 Stockdale is acting as nominated adviser and, together with Canaccord Genuity, as joint brokers to the Placing, as agents for and on behalf of the Company.  Stockdale and Canaccord Genuity are authorised and regulated in the United Kingdom by the FCA and are acting exclusively for the Company and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than the Company for providing the protections afforded to their respective customers or for providing advice in relation to the matters described in this Announcement. 

2                 Participation in the Placing will only be available to persons who may lawfully be, and are, invited by Stockdale or Canaccord Genuity to participate.  Stockdale and Canaccord Genuity and any of their respective affiliates are entitled to participate in the Placing as principals.

3                 The price per Placing Share will be payable by all Placees to Stockdale or Canaccord Genuity (as applicable) (as agent of the Company). The Placing Price and number of Placing Shares will be agreed between the Company, Stockdale and Canaccord Genuity at the close of the bookbuild and confirmed to Placees by telephone and/or email along with their final allocation, and will be disclosed in the Announcement confirming the result of the Placing.

4                 Each Placee's allocation is determined by Stockdale and Canaccord Genuity in their discretion following consultation with the Company and has been or will be confirmed orally by Stockdale or Canaccord Genuity and a Form of Confirmation will be dispatched as soon as possible thereafter. That oral confirmation will give rise to an irrevocable, legally binding commitment by that person (who at that point becomes a Placee), in favour of Stockdale or Canaccord Genuity (as applicable) and the Company, under which it agrees to acquire the number of Placing Shares allocated to the Placee at the Placing Price and otherwise on the terms and subject to the conditions set out in this Appendix and in accordance with the Company's articles of association. Except with Stockdale's and Canaccord Genuity's prior written consent, such commitment will not be capable of variation or revocation at the time at which it is submitted.

5                 Each Placee's allocation and commitment will be evidenced by a Form of Confirmation issued to each such Placee by Stockdale or Canaccord Genuity (as applicable). The terms and conditions of this Appendix will be deemed incorporated in that Form of Confirmation.

6                 Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to Stockdale and Canaccord Genuity (as applicable) (as agent for the Company), to pay to Stockdale or Canaccord Genuity (as applicable) (or as Stockdale or Canaccord Genuity (as applicable) may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to acquire and the Company has agreed to allot and issue to that Placee.

7                 Irrespective of the time at which a Placee's allocation(s) pursuant to the Placing is/are confirmed, settlement for all Placing Shares to be issued pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".

8                 All obligations of Stockdale and Canaccord Genuity under the Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing".

9                 By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

10              To the fullest extent permissible by law and applicable FCA rules, none of (a) Stockdale, (b) Canaccord Genuity, (c) any of their respective affiliates, agents, directors, officers, consultants, (d) to the extent not contained within (a) or (b), any person connected with Stockdale or Canaccord Genuity as defined in FSMA ((c) and (d) being together "affiliates" and individually an "affiliate" of Stockdale or Canaccord Genuity (as applicable)) or (e) any person acting on Stockdale's or Canaccord Genuity's behalf, shall have any liability (including to the extent permissible by law, any fiduciary duties) to Placees or to any other person whether acting on behalf of a Placee or otherwise.  In particular, none of Stockdale, Canaccord Genuity or any of their respective affiliates shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of their conduct of the Placing or of such alternative method of effecting the Placing as Stockdale, Canaccord Genuity and the Company may agree.

Registration and Settlement

Settlement of transactions in the Placing Shares will take place inside the CREST system.

Settlement of transactions in the Placing Shares will, unless otherwise agreed, take place on a delivery versus payment basis within CREST.

The Company will procure the delivery of the Placing Shares to CREST accounts operated by Canaccord Genuity or Stockdale (as applicable) for the Company and Canaccord Genuity or Stockdale (as applicable) will enter their delivery (DEL) instructions into the CREST system. The input to CREST by each Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

The Company reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to any Placee in any form it requires if, in Canaccord Genuity's and Stockdale's opinion, delivery or settlement is not possible or practicable within CREST or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Following the close of the bookbuild for the Placing, each Placee allocated Placing Shares in the Placing may be sent a conditional trade confirmation stating the number of Placing Shares, the Placing Price and the subscription amount payable to be allocated to it and will be required to provide Stockdale or Canaccord Genuity (if applicable) with funds sufficient to purchase such securities prior to the Settlement Date (see below).

Each Placee is deemed to agree that, if it does not comply with these obligations, the Company may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Company's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.

It is expected that settlement will take place on or about 10 April 2019 in CREST on a basis in accordance with the instructions set out in the conditional trade confirmation. Settlement will be through Canaccord Genuity against CREST ID: 805 or Stockdale against CREST ID: MAMAY (as applicable).

Following the close of the bookbuild for the Placing, each Placee allocated Placing Shares in the Placing will be sent a conditional trade confirmation(s) stating the number of Placing Shares to be allocated to it at the Placing Price and settlement instructions.

Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the applicable registration and settlement procedures, including if applicable, CREST rules and regulations and settlement instructions that it has in place with Canaccord Genuity or Stockdale (as applicable).

If the Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the conditional trade confirmation is copied and delivered immediately to the relevant person within that organisation.

Trade Date: 8 April 2019

Settlement Date: 10 April 2019 (Electronic)

ISIN code for the Placing Shares: GB00BFWYSS80

SEDOL code for the Placing Shares: BFWYSS80

No UK stamp duty or stamp duty reserve tax should be payable to the extent that the Placing Shares are issued into CREST to, or to the nominee of, a Placee who holds those shares beneficially (and not as agent or nominee for any other person) within the CREST system and registered in the name of such Placee or such Placee's nominee provided that the Placing Shares are not issued to a person whose business is or includes issuing depositary receipts or the provision of clearance services or to an agent or nominee for any such person.

The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares, UK stamp duty or stamp duty reserve tax may be payable, for which none of the Company, Stockdale or Canaccord Genuity will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company, Stockdale and Canaccord Genuity in the event that the Company, Stockdale or Canaccord Genuity has incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify Canaccord Genuity or Stockdale accordingly.

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.

The obligations of Stockdale and Canaccord Genuity under the Placing Agreement are, and the Placing is, conditional upon, inter alia:

(a)              none of the warranties or undertakings contained in the Placing Agreement being or having become untrue, inaccurate or misleading at any time before Admission, and no fact or circumstance having arisen which would constitute a breach of any of the warranties or undertakings given in the Placing Agreement or which would constitute a specified event, being an event occurring or matter arising on or after the date of the Placing Agreement and before Admission which, which, if it had occurred before the date of the Placing Agreement, would have rendered any of the warranties in the Placing Agreement untrue or incorrect;

(b)              the fulfilment by the Company of its obligations under the Placing Agreement to the extent they fall to be performed prior to Admission;

(c)              the due convening of the General Meeting and passing of the Resolution 1 thereat without amendment;

(d)              the Company allotting and issuing the New Ordinary Shares conditional only on Admission, in accordance with the Placing Agreement;

(e)              completion of the Acquisition Agreement, save for any conditions in the Acquisition Agreement that relate to Admission and the Placing Agreement; and

(f)               Admission occurring by not later than 8.00 a.m. on 10 April 2019 (or such later date as the Company, Stockdale and Canaccord Genuity may agree in writing, in any event being not later than 23 April 2019), 

(all conditions to the obligations of Stockdale and Canaccord Genuity included in the Placing Agreement being together, the "conditions").

If any of the conditions are not fulfilled or, where permitted, waived in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as the Company, Stockdale and Canaccord Genuity may agree that the Placing and the rights and obligations in it shall terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.

By participating in the Placing, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Termination of the Placing" below and will not be capable of rescission or termination by it.

Certain conditions may be waived in whole or in part by Stockdale and Canaccord Genuity, in their absolute discretion by notice in writing to the Company and Stockdale and Canaccord Genuity may also agree in writing with the Company to extend the time for satisfaction of any condition. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

Stockdale and Canaccord Genuity may terminate the Placing Agreement in certain circumstances, details of which are set out below.

Neither Stockdale, Canaccord Genuity, the Company nor any of their respective affiliates, agents, directors, officers or employees shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision any of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing, each Placee agrees that any such decision is within the absolute discretion of Stockdale and Canaccord Genuity.

Termination of the Placing

Either Stockdale or Canaccord Genuity (as the case may be) may terminate the Placing Agreement, in accordance with its terms, at any time prior to Admission if, inter alia:

1                 it comes to the attention of Stockdale or Canaccord Genuity that any of the warranties in the Placing Agreement were not true or accurate, or were misleading when given or deemed given; or

2                 it comes to the attention of Stockdale or Canaccord Genuity that the Company has failed to comply with its obligations under the Placing Agreement, the Companies Act, FSMA, the AIM Rules for Companies or other applicable law; or

3                 it comes to the attention of Stockdale or Canaccord Genuity that any statement contained in, inter alia, this Announcement, the investor presentation and the Circular (the "Issue Documents") has become or been discovered to be untrue, inaccurate or misleading or a new matter has arisen that constitutes a material admission from the Issue Documents; or

4                 there shall have developed or occurred a change in national or international financial, monetary, economic, political, environmental or stock market conditions, which in the opinion of Stockdale or Canaccord Genuity (as the case may be) is or is likely to be, prejudicial to the Enlarged Group, the Placing, the Acquisition or Admission.

If the Placing Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in this Announcement shall terminate at such time and no claim can be made by any Placee in respect thereof.

By participating in the Placing, each Placee agrees with the Company, Stockdale and Canaccord Genuity that the exercise by the Company, Stockdale or Canaccord Genuity of any right of termination or any other right or other discretion under the Placing Agreement shall be within the absolute discretion of the Company, Stockdale or Canaccord Genuity and that neither the Company, Stockdale nor Canaccord Genuity need make any reference to such Placee and that neither Stockdale, Canaccord Genuity, the Company, nor any of their respective affiliates, agents, directors, officers or employees shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.

By participating in the Placing, each Placee agrees that its rights and obligations terminate only in the circumstances described above and under the "Conditions of the Placing" section of this Appendix and will not be capable of rescission or termination by it after the issue by Stockdale or Canaccord Genuity (as applicable) of a Form of Confirmation confirming each Placee's allocation and commitment in the Placing.

Representations, warranties and further terms

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) represents, warrants, acknowledges and agrees (for itself and for any such prospective Placee) that (save where Stockdale and Canaccord Genuity expressly agrees in writing to the contrary):

1                 it has read and understood this Announcement in its entirety and that its subscription for the Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained herein and that it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Placing, the Company, the Placing Shares or otherwise, other than the information contained in this Announcement;

2                 it has not received a prospectus or other offering document in connection with the Placing and acknowledges that no prospectus or other offering document: (a) is required under the Prospectus Directive; and (b) has been or will be prepared in connection with the Placing;

3                 the Existing Ordinary Shares are (and the New Ordinary Shares will be) admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules, which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;

4                 it has made its own assessment of the Placing Shares and has relied on its own investigation of the business, financial and trading position of the Company in accepting a participation in the Placing and neither Stockdale, Canaccord Genuity, the Company nor any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company or any other person other than the information in this Announcement; nor has it requested any of Stockdale, Canaccord Genuity, the Company, any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of any of them to provide it with any such information;

5                 the content of this Announcement is exclusively the responsibility of the Company and the Directors and neither Stockdale, Canaccord Genuity nor any person acting on behalf of either of them or any of their respective affiliates, agents, directors, officers or employees has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company or any member of the Group;

6                 the only information on which it is entitled to rely and on which it has relied in committing to subscribe for the Placing Shares is contained in this Announcement, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on this Announcement;

7                 neither Stockdale, Canaccord Genuity, the Company nor any of their respective affiliates, agents, directors, officers or employees has made any representation or warranty to it, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of the information contained in this Announcement;

8                 it has conducted its own investigation of the Company, the Placing and the Placing Shares, satisfied itself that the information is still current and relied on that investigation for the purposes of its decision to participate in the Placing;

9                 it has not relied on any investigation that Stockdale, Canaccord Genuity, the Company or any person acting on their behalf may have conducted with respect to the Company, the Placing or the Placing Shares;

10              the content of this Announcement has been prepared by and is exclusively the responsibility of the Company and the Directors and that neither Stockdale, Canaccord Genuity nor any person acting on their behalf is responsible for or has or shall have any liability for any information, representation, warranty or statement relating to the Company contained in this Announcement, nor will they be liable for any Placee's decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement.  Nothing in this this Appendix shall exclude any liability of any person for fraudulent misrepresentation;

11              the Placing Shares have not been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale nor will a prospectus be cleared or approved in respect of any of the Placing Shares under the securities laws of the United States, or any state or other jurisdiction of the United States, the Republic of Ireland, Australia, Canada, the Republic of South Africa or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within the United States, the Republic of Ireland, Australia, Canada, the Republic of South Africa or Japan or in any country or jurisdiction where any such action for that purpose is required;

12              it and/or each person on whose behalf it is participating:

12.1           is entitled to acquire Placing Shares pursuant to the Placing under the laws and regulations of all relevant jurisdictions;

12.2           has fully observed such laws and regulations;

12.3           has capacity and authority and is entitled to enter into and perform its obligations as an acquirer of Placing Shares and will honour such obligations; and

12.4           has obtained all necessary consents and authorities (including, without limitation, in the case of a person acting on behalf of a Placee, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix) under those laws or otherwise and complied with all necessary formalities to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto and, in particular, if it is a pension fund or investment company it is aware of and acknowledges it is required to comply with all applicable laws and regulations with respect to its subscription for Placing Shares;

13              it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are subscribed for will not be, a resident of, or with an address in, or subject to the laws of, Australia, Canada, Japan, the Republic of Ireland or the Republic of South Africa, and it acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of Australia, Canada, Japan, the Republic of Ireland or the Republic of South Africa and may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;

14              the Placing Shares have not been, and will not be, registered under the Securities Act and may not be offered, sold or resold in or into or from the United States except pursuant to an effective registration under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in accordance with applicable state securities laws; and no representation is being made as to the availability of any exemption under the Securities Act for the re-offer, resale, pledge or transfer of the Placing Shares;

15              the Company is not registered under the Investment Company Act and that the Company has put in place restrictions to ensure that it is not and will not be required to register under the Investment Company Act;

16              it and the beneficial owner of the Placing Shares is, and at the time the Placing Shares are acquired will be, outside the United States and acquiring the Placing Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S under the Securities Act;

17              it is not acquiring the Placing Shares as a result of any "directed selling efforts" as defined in Regulation S under the Securities Act;

18              if the Placing Shares are being acquired for the account of one or more other persons, it has full power and authority to make the representations, warranties, agreements and acknowledgements herein on behalf of each such account;

19              it (and any account for which it is purchasing) is acquiring the Placing Shares for investment purposes only and is not acquiring the Placing Shares with a view to any offer, sale or distribution thereof in violation of the Securities Act or any other securities laws of any state or other jurisdiction of the United States;

20              the Company is not obliged to file any registration statement in respect of any resales of the Placing Shares in the United States with the US Securities and Exchange Commission or with any securities administrator of any state or other jurisdiction of the United States;

21              if in the future it decides to offer, sell, transfer, assign or otherwise dispose of the Placing Shares, it will do so only in compliance with an exemption from the registration requirements of the Securities Act and under circumstances with will not require the Company to register under the Investment Company Act;

22              it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it, or any other presentational or other materials concerning the Placing, in or into or from the United States (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;

23              neither Stockdale, Canaccord Genuity, any of their respective affiliates, agents, directors, officers or employees nor any person acting on behalf of any of them is making any recommendations to it or advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of Stockdale or Canaccord Genuity and Stockdale and Canaccord Genuity have no duties or responsibilities to it for providing the protections afforded to its clients or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

24              it has the funds available to pay for the Placing Shares for which it has agreed to subscribe and acknowledges and agrees that it will make payment to Stockdale or Canaccord Genuity (as applicable) for the Placing Shares allocated to it in accordance with the terms and conditions of this Announcement on the due times and dates set out in this Announcement, failing which the relevant Placing Shares may be placed with others on such terms as Stockdale and Canaccord Genuity may, in their absolute discretion determine without liability to the Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this Announcement) which may arise upon the sale of such Placee's Placing Shares on its behalf;

25              no action has been or will be taken by any of the Company, Stockdale, Canaccord Genuity or any person acting on their behalf that would, or is intended to, permit a public offer of the Placing Shares in the United States or in any country or jurisdiction where any such action for that purpose is required;

26              the person who it specifies for registration as holder of the Placing Shares will be: (a) the Placee; or (b) a nominee of the Placee, as the case may be.  None of Stockdale, Canaccord Genuity or the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement.  Each Placee and any person acting on behalf of such Placee agrees to acquire Placing Shares pursuant to the Placing and agrees to pay the Company, Stockdale and Canaccord Genuity in respect of the same (including any interest or penalties) on the basis that the Placing Shares will be allotted to a CREST stock account of Stockdale or Canaccord Genuity (as the case may be) or transferred to a CREST stock account of Stockdale or Canaccord Genuity (as the case may be) who will hold them as nominee on behalf of the Placee until settlement in accordance with its standing settlement instructions with it;

27              it is acting as principal only in respect of the Placing or, if it is acting for any other person, (a) it is duly authorised to do so and has full power to make the acknowledgments, representations and agreements herein on behalf of each such person and (b) it is and will remain liable to the Company, Stockdale and Canaccord Genuity for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person);

28              the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a stamp duty or stamp duty reserve tax liability under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depository receipts and clearance services) and that it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability;

29              it will not make an offer to the public of the Placing Shares and it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom or elsewhere in the EEA prior to the expiry of a period of six months from Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of FSMA or an offer to the public in any other member state of the EEA within the meaning of the Prospectus Directive;

30              it and any person acting on its behalf (if within the United Kingdom) is a person of a kind described in: (a) Article 19(5) (Investment Professionals) and/or 49(2) (High net worth companies etc.) of the Order and/or an authorised person as defined in section 31 of FSMA; and (b) section 86(7) of FSMA ("Qualified Investor"), being a person falling within Article 2.1(e) of the Prospectus Directive. For such purposes, it undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;

31              it has only communicated or caused to be communicated and it will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person and it acknowledges:

31.1           it has complied and it will comply with all applicable laws with respect to anything done by it or on its behalf in relation to the Placing Shares (including all relevant provisions of FSMA in respect of anything done in, from or otherwise involving the United Kingdom);

31.2           if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive (including any relevant implementing measure in any member state), the Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the EEA which has implemented the Prospectus Directive other than Qualified Investors, or in circumstances in which the express prior written consent of Stockdale and Canaccord Genuity has been given to the offer or resale;

31.3           (other than as set out in this Announcement) it has neither received nor relied on any confidential price sensitive information about the Company in accepting this invitation to participate in the Placing;

31.4           neither Stockdale, Canaccord Genuity nor any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of any of them has or shall have any liability for any information, representation or statement contained in this Announcement or for any information previously published by or on behalf of the Company or any other written or oral information made available to or publicly available or filed or any representation, warranty or undertaking relating to the Company, and will not be liable for its decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement or elsewhere, provided that nothing in this paragraph shall exclude any liability of any person for fraud;

31.5           neither Stockdale, Canaccord Genuity, the Company nor any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of Stockdale, Canaccord Genuity, the Company or their respective affiliates, agents, directors, officers or employees is making any recommendations to it or advising it regarding the suitability of any transactions it may enter into in connection with the Placing nor providing advice in relation to the Placing nor in respect of any representations, warranties, acknowledgements, agreements, undertakings or indemnities contained in the Placing Agreement nor the exercise or performance of Stockdale's and Canaccord Genuity's rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

31.6           acknowledges and accepts that Stockdale and Canaccord Genuity may, in accordance with applicable legal and regulatory provisions, engage in transactions in relation to the Placing Shares and/or related instruments for its own account for the purpose of hedging its underwriting exposure or otherwise and, except as required by applicable law or regulation, Stockdale and Canaccord Genuity will not make any public disclosure in relation to such transactions;

31.7           Stockdale and Canaccord Genuity and each of their respective affiliates, each acting as an investor for its or their own account(s), may bid or subscribe for and/or purchase Placing Shares and, in that capacity, may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise. Accordingly, references in this Announcement to the Placing Shares being offered, subscribed, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by Stockdale, Canaccord Genuity and/or any of their respective affiliates, acting as an investor for its or their own account(s). Neither Stockdale, Canaccord Genuity nor the Company intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so;

31.8           it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (together, the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

31.9           it is aware of the obligations regarding insider dealing in the Criminal Justice Act 1993, FSMA, the EU Market Abuse Regulation No. 596 of 2014 and the Proceeds of Crime Act 2002 and confirms that it has and will continue to comply with those obligations;

31.10        in order to ensure compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, Stockdale (for itself and as agent on behalf of the Company), Canaccord Genuity (for itself and as agent on behalf of the Company) or the Company's registrars may, in their absolute discretion, require verification of its identity. Pending the provision to Stockdale, Canaccord Genuity or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at Stockdale's or Canaccord Genuity's absolute discretion (as the case may be) or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed at Stockdale's, Canaccord Genuity's or the Company's registrars', as the case may be, absolute discretion. If within a reasonable time after a request for verification of identity Stockdale (for itself and as agent on behalf of the Company), Canaccord Genuity (for itself and as agent on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, Stockdale, Canaccord Genuity and/or the Company may, at its absolute discretion, terminate its commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;

31.11        acknowledges that its commitment to acquire Placing Shares on the terms set out in this Announcement and in the Form of Confirmation will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's, Stockdale's or Canaccord Genuity's conduct of the Placing;

31.12        it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares.  It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing.  It has relied upon its own examination and due diligence of the Company and its affiliates taken as a whole, and the terms of the Placing, including the merits and risks involved;

31.13        it irrevocably appoints any duly authorised officer of Stockdale or Canaccord Genuity as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares for which it agrees to subscribe upon the terms of this Announcement;

31.14        the Company, Stockdale, Canaccord Genuity and others (including each of their respective affiliates, agents, directors, officers or employees) will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements, which are given to each of Stockdale and Canaccord Genuity, on its own behalf and on behalf of the Company and are irrevocable;

31.15        if it is acquiring the Placing Shares as a fiduciary or agent for one or more investor accounts, it has full power and authority to make, and does make, the foregoing representations, warranties, acknowledgements, agreements and undertakings on behalf of each such account;

31.16        time is of the essence as regards its obligations under this Appendix;

31.17        any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to Stockdale or Canaccord Genuity;

31.18        the Placing Shares will be issued subject to these terms and conditions of this Appendix; and

31.19        these terms and conditions and all documents into which they are incorporated by reference or otherwise validly forms a part and/or any agreements entered into pursuant to these terms and conditions and all agreements to acquire shares pursuant to the Placing will be governed by and construed in accordance with English law and it submits to the exclusive jurisdiction of the English courts in relation to any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company, Stockdale or Canaccord Genuity in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.

32              by participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify and hold the Company, Stockdale, Canaccord Genuity and each of their respective affiliates, agents, directors, officers and employees harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings given by the Placee (and any person acting on such Placee's behalf) in this this Appendix or incurred by Stockdale, Canaccord Genuity, the Company or each of their respective affiliates, agents, directors, officers or employees arising from the performance of the Placee's obligations as set out in this Announcement, and further agrees that the provisions of this this Appendix shall remain in full force and effect after completion of the Placing. The agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the United Kingdom relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct by the Company.  Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service.  If there are any such arrangements, or the settlement related to any other dealings in the Placing Shares, stamp duty or stamp duty reserve tax may be payable.  In that event, the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax and none of the Company, Stockdale or Canaccord Genuity shall be responsible for such stamp duty or stamp duty reserve tax.  If this is the case, each Placee should seek its own advice and should notify Stockdale and Canaccord Genuity accordingly.  In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares and each Placee, or the Placee's nominee, in respect of whom (or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such non-United Kingdom stamp, registration, documentary, transfer or similar taxes or duties undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company, Stockdale and Canaccord Genuity in the event that the Company, Stockdale and/or Canaccord Genuity has incurred any such liability to such taxes or duties;

33              The representations, warranties, acknowledgements and undertakings contained in this this Appendix are given to each of Stockdale and Canaccord Genuity for itself and on behalf of the Company and are irrevocable;

34              Each Placee and any person acting on behalf of the Placee acknowledges that Stockdale and Canaccord Genuity do not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings, acknowledgements, agreements or indemnities in the Placing Agreement;

35              Each Placee and any person acting on behalf of the Placee acknowledges and agrees that Stockdale and Canaccord Genuity may (at their absolute discretion) satisfy its obligation to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any connected or associated person to do so;

36              When a Placee or any person acting on behalf of the Placee is dealing with Stockdale or Canaccord Genuity, any money held in an account with Stockdale or Canaccord Genuity on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the relevant rules and regulations of the FCA made under FSMA.  Each Placee acknowledges that the money will not be subject to the protections conferred by the client money rules: as a consequence this money will not be segregated from Stockdale's or Canaccord Genuity's money (as applicable) in accordance with the client money rules and will be held by it under a banking relationship and not as trustee;

37              References to time in this Announcement are to London time, unless otherwise stated;

38              All times and dates in this Announcement may be subject to amendment;

39              No statement in this Announcement is intended to be a profit forecast, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company;

40              The price of shares and any income expected from them may go down as well as up and investors may not receive the full amount invested upon disposal of the Placing Shares.  Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser;

41              The Placing Shares to be issued or sold pursuant to the Placing will not be admitted to trading on any stock exchange other than AIM;

42              Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement;

43              Pursuant to the General Data Protection Regulation as implemented in the UK by the Data Protection Act 2018 ("GDPR") the Company, Stockdale and/or Canaccord Genuity, may hold personal data (as defined in the GDPR) relating to past and present shareholders. Personal data may be retained on record for a period exceeding six years after it is no longer used. The Company, Stockdale and/or Canaccord Genuity will only process such information for the purposes set out below (collectively, the "Purposes"), being to: (a) process its personal data to the extent and in such manner as is necessary for the performance of their obligations under the contractual arrangements between them, including as required by or in connection with its holding of Ordinary Shares, including processing personal data in connection with credit and money laundering checks on it; (b) communicate with it as necessary in connection with its affairs and generally in connection with its holding of Ordinary Shares; (c) provide personal data to such third parties as the Company, Stockdale and/or Canaccord Genuity may consider necessary in connection with its affairs and generally in connection with its holding of Ordinary Shares or as the GDPR may require, including to third parties outside the EEA; and (d) without limitation, provide such personal data to their respective affiliates for processing, notwithstanding that any such party may be outside the EEA; and (e) process its personal data for the Company's, Stockdale's and/or Canaccord Genuity's internal administration; and

44              By becoming registered as a holder of Placing Shares, it acknowledges and agrees that the processing by the Company, Stockdale and/or Canaccord Genuity of any personal data relating to it in the manner described above is undertaken for the purposes of: (a) performance of the contractual arrangements between them; and (b) to comply with applicable legal obligations. In providing the Company, Stockdale and/or Canaccord Genuity with information, it hereby represents and warrants to each of them that it has notified any data subject of the processing of their personal data (including the details set out above) by the Company, Stockdale and/or Canaccord Genuity and their respective affiliates and group companies, in relation to the holding of, and using, their personal data for the Purposes. Any individual whose personal information is held or processed by a data controller: (a) has the right to ask for a copy of their personal information held; (b) to ask for any inaccuracies to be corrected or for their personal information to be erased; (c) object to the ways in which their information is used, and ask for their information to stop being used or otherwise restricted; and (d) ask for their personal information to be sent to them or to a third party (as permitted by law). A data subject seeking to enforce these rights should contact the relevant data controller. Individuals also have the right to complain to the UK Information Commissioner's Office about how their personal information has been handled.

 

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