Proposed Equity Fundraise

RNS Number : 3484A

Falanx Group Limited

28 September 2020

THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) (TOGETHER, THE "ANNOUNCEMENT") AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

28 September 2020

FALANX GROUP LIMITED

("Falanx", the "Group" or the "Company")

Proposed equity fundraise to raise a minimum of £1.25 million

and

appointment of sole Broker

Highlights

· Falanx (LON: FLX) announces its intention to carry-out a non-pre-emptive fundraise (the "Fundraise") from new and existing shareholders through the issue and allotment of a minimum of 125,000,000 Ordinary Shares (the "New Ordinary Shares") to raise minimum gross proceeds for the Company of £1.25 million at a price of 1 pence per New Ordinary Share (the "Issue Price").

· The Placing Shares are being offered by way of an accelerated bookbuild process (the "Bookbuild"), which will be launched immediately following this announcement. Stifel Nicolaus Europe Limited ("Stifel") will be acting as sole broker and bookrunner. The Placing is subject to the terms and conditions set out in the Appendix to this announcement (which forms part of this announcement, such announcement and its Appendix together being this "Announcement").

· The net proceeds of the Fundraise will be used for:

o general working capital purposes;

o strengthening the balance sheet in light of the more uncertain macroeconomic environment; and

o the expansion of Triarii, the Company's cybersecurity platform which was launched in July 2020.

· The Company forecasts that the net proceeds of the Fundraise will provide sufficient working capital to the Company in the current macroeconomic environment for at least the next 12 months.

Expected timetable

Announcement of the Fundraise	28 September 2020
Announcement of closing of the Fundraise	by 18:00 pm on 28 September 2020
Application for Admission of the New Ordinary Shares	28 September 2020
Admission of the New Ordinary Shares to trading on AIM	by 8:00 am on 1 October 2020

The Company announces the appointment of Stifel as sole Broker to the Company. Stifel continues as Nominated Adviser to the Company.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 ("MAR"). In addition, market soundings (as defined in MAR) were taken in respect of the Placing with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this Announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

The person responsible for arranging the release of this Announcement on behalf of the Company is Ian Selby, CFO.

Enquiries

Falanx Group Limited

Mike Read - CEO

Ian Selby - CFO

Via IFC

Stifel Nicolaus Europe Limited, Nomad and Joint Broker

Alex Price / Fred Walsh / Luisa Orsini Baroni

+ 44 (0) 207 710 7600

SNELProjectGoalkeeper@stifel.com

IFC Advisory Ltd, Financial PR & IR

Graham Herring / Zach Cohen

+44 (0) 203 934 663

About Falanx

Falanx Group Limited, is a global intelligence and cyber defence provider working with blue chip and government clients. For more information: http://www.falanx.com/

Background to and reasons for the Fundraise

In August 2020 Falanx announced the launch of its significantly enhanced Managed Detection and Response ("MDR") platform, Triarii. Triarii combines best of breed and enterprise-class external components and delivers superior capabilities greatly enhancing the Group's MDR service at a competitive price point. This supports the Group's strategy of offering 'enterprise-class security solutions to all businesses, whatever the size' by offering "Detection in Depth"

Following extensive internal and customer trials, Triarii is now either deployed or being deployed with a total of four organisation, including both direct customers and Managed Service Providers ("MSP").

Following successful trials, the Group's largest partners are showing significant interest in Triarii with a view of deploying it into their customer bases, providing a robust pipeline of opportunities for the service. Part of the proceeds of the fundraise will be used to support the launch of Triarii and its deployment by the Group's partners into their customer bases. The Group's pipeline includes the previously announced SolarWinds channel, which has accepted the Triarii service for use within its community. Furthermore, important sales have recently been won including a strategic new reseller and public sector customer as announced on 17 August 2020, and followed by a strategically important MSP in the United States after an accelerated sales cycle in close conjunction with Solar Winds MSP, as announced on 18 September 2020 . The Group has been invited to join their Technology Alliance Program, which makes third party solutions available to all of its MSP partners and this significantly increases the market for further sales of Triarii .

The net proceeds of the Fundraise will also be used to strengthen the Group's balance sheet and for general working capital purposes.

Current trading, outlook, working capital and notice of results

The Group's anticipated revenue for the year ended 31 March 2020 on a divisional basis is set out in the following table:

Division	Revenue 2020 £'m (unaudited)	Revenue 2019 £'m (actual)	Percentage change (GBP)	Employees
Cyber	3.71	3.57	4%	40
Assynt	2.14	1.64	30%	30
Total	5.85	5.21	12%	70

The Group expects to report an EBITDA loss (unaudited) in the region of £1.55 million (2019: £1.25 million) in respect for the year ended 31 March 2020.

In the second half of the year ended 31 March 2020, gross margins improved to 43% from 32% in the first six months of the year. This was achieved through a combination of organisational change, contract expansion, changed service mix, revised licensing arrangements, and much improved professional services utilisation in the Cyber division.

On 5 August 2020 the Group announced trading for the first quarter to 30 June 2020. Q1 2020 revenue had increased by 5% year on year (unaudited), with the overall EBITDA loss being reduced by 60% vs the prior period (unaudited).

At 30 June 2020 cash balances stood at £0.75m (unaudited) following favourable working capital movements and customer payments. Debtors and creditors (including HMRC) are within agreed terms, and banking facilities of up to an additional £0.5m remaining unused.

Year-to-date to 31 July 2020 the Company generated revenues of £1.67 million and EBITDA loss of £0.32 million as set out in the following table:

Division	Revenue 31 July 2020 (YTD) £'m (unaudited)	Adj EBITDA 31 July 2020 (YTD) £'m (unaudited)
Cyber	0.95	(0.14)
Assynt	0.72	0.05
Corporate		(0.23)
Total	1.67	(0.32)

The Company's forecasts show that the minimum net proceeds of the Fundraise will provide working capital to the Company for at least 12 months following the date of Admission

The Group anticipates announcing its final results for the year ended 31 March 2020 before the end of October 2020. The audit for the year ended 31 March 2020 is well underway and no major issues have been identified, but certain COVID delays around final checks, mean that the Group now expects to report its results before 31 October 2020 in accordance with the Inside AIM guidance published on 26 March 2020.

Details of the Placing

Stifel is acting as sole broker and bookrunner in connection with the Placing. The Placing is not being underwritten.

The Placing is subject to the terms and conditions set out in the Appendix to this Announcement.

The Bookbuild will commence immediately following the release of this Announcement in respect of the Placing. The price at which the Placing Shares are to be placed is the Issue Price.

The Issue Price of 1 pence per New Ordinary Share equates to approximately 15 per cent. discount to the mid-market closing price of an existing ordinary share on 28 September 2020, the last practicable date prior to the date of this Announcement.

The book will open with immediate effect following this Announcement. The timing of the closing of the book, pricing and allocations are at the absolute discretion of Stifel and the Company. Details of the number of Placing Shares will be announced as soon as practicable after the close of the Bookbuild.

The New Ordinary Shares, when issued, will be fully paid and will rank pari passu in all respects with each other and with the existing ordinary shares of the Company, including, without limitation, the right to receive all dividends and other distributions declared, made or paid after the date of issue.

An application will be made to the London Stock Exchange for admission of the New Ordinary Shares to trading on AIM ("Admission"). Settlement for the New Ordinary Shares and Admission are expected to take place on or before 8.00 a.m. on 1 October 2020.

The Fundraise is conditional, amongst other things, upon:

(a) the placing agreement between the Company and Stifel (the "Placing Agreement") becoming or declared unconditional in all respects and not having been terminated in accordance with its terms prior to Admission; and

(b) Admission becoming effective no later than 8.00 a.m. on 1 October 2020 or such later time/and/or date (being no later than 8.00a.m. on 16 October 2020) as Stifel and the Company may agree.

If any of the Conditions are not satisfied, the New Ordinary Shares will not be issued and all monies received from Placees and Subscribers (at their risk and without interest) will be returned to them as soon as possible. The Placing Agreement contains warranties from the Company in favour of Stifel in relation to (amongst other things) the Company and its business. In addition, the Company has agreed to indemnify Stifel and its affiliated entities persons, and agents in relation to certain liabilities they may incur in undertaking the Fundraise. Stifel has the right to terminate the Placing Agreement in certain limited circumstances prior to Admission; in particular, Stifel may terminate in the event that there has been a breach of any of the warranties (which Stifel considers to be material in the context of the Placing and/or Admission) or a Material Adverse Change (as defined in the Placing Agreement).

VCT Scheme

The Company believes that a portion of the Placing is expected to be eligible for taxation relief under the Venture Capital Trust scheme under the provisions of Part 6 of the Income Tax Act 2007 (the "VCT Scheme"). The Company has not applied for advance assurance from HM Revenue & Customs in relation to the eligibility of the Placing Shares under the VCT Scheme. Whilst, the Company currently expects to satisfy the relevant conditions under the VCT Scheme, and the Directors are not aware of any subsequent change in the qualifying conditions or the Company's circumstances that would prevent the Placing Shares from being eligible for taxation relief under the VCT Scheme on this occasion, neither the Directors nor the Company give any assurance that taxation relief under the VCT Scheme will be available in respect of any investment in the Placing Shares pursuant to this Announcement, nor that the Company will conduct its activities in a way that qualifies for or preserves its VCT qualifying status under the VCT Scheme.

Directors' intended participation in the Fundraise

The Company is currently in a closed period under MAR pending announcement of its annual results to 31 March 2020. In consequence of that, whilst certain members of the Board are keen to participate in the Fundraise, they are not currently permitted to under the MAR framework. However, the Board recognises the importance of Director participation for Shareholders and, as such, certain members of the Board intend to subscribe for the Subscription Shares at the first available opportunity following the publication of the annual results to 31 March 2020. The Subscription is expected to total £75,000 in respect of 7,500,000 New Ordinary Shares and will be carried out at the Issue Price on identical terms as those of the Placing.

Lock-in agreements

The Directors have undertaken to the Company and Stifel that they shall not (subject to certain customary carve-outs) during the period from the date of Admission up to and including the date falling six months after Admission (the "Restricted Period"), transfer sell or otherwise dispose of the legal or beneficial ownership of, or any other interest in, the shares held by them or their associates as at Admission or acquired during the Restricted Period.

Effect of the Placing

Upon completion of the Placing, the Placing Shares and Subscription Shares (assuming the directors subscribe for all of the Subscription Shares) are expected to represent approximately 24 per cent. of the Enlarged Share Capital.

Risks and uncertainties

A description of the principal risks and uncertainties associated with the Group's business and how they are being managed is included in the Group's Annual Report and Accounts for the year ended 31 March 2019 (page 16). The Board considers that these principal risks and uncertainties are those applicable to the Group at the current time.

IMPORTANT NOTICES

Stifel is acting as nominated adviser, broker and bookrunner to the Fundraise, as agent for and on behalf of the Company. Stifel is regulated in the United Kingdom by the FCA and are acting exclusively for the Company and no one else in connection with the matter referred to in this Announcement and will not be responsible to anyone other than the Company for providing the protections afforded to the customers of Stifel for providing advice in relation to the matters described in this Announcement or any matter, transaction or arrangement referred to in it. The responsibilities of Stifel, as nominated adviser under the AIM Rules for Nominated Advisers, are owed solely to London Stock Exchange and are not owed to the Company or any director of the Company or to any other person in respect of their decision to subscribe for or purchase the New Ordinary Shares.

Forward‐looking statements

Some of the statements in this announcement include forward looking statements which reﬂect the Directors' current views with respect to ﬁnancial performance, business strategy, plans and objectives of management for future operations (including development plans relating to the Group's products and services). These statements include forward looking statements both with respect to the Group and with respect to the sectors and industries in which the Group operates. Statements which include the words "expects", "intends", "plans", believes", "projects", "anticipates", "will", "targets", "aims", "may", "would", "could", "continue" and similar statements are of a forward looking nature.

By their nature, forward‐looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and therefore are based on current beliefs and expectations about future events. Forward‐looking statements are not guarantees of future performance and the Group's actual operating results and ﬁnancial condition, and the development of the industry in which it operates may diﬀer materially from those made in or suggested by the forward‐looking statements contained in this announcement. In addition, even if the Group's operating results, ﬁnancial condition and liquidity, and the development of the industry in which the Group operates are consistent with the forward looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Accordingly, prospective investors should not rely on these forward‐looking statements.

These forward looking statements speak only as of the date of this announcement. The Company undertakes no obligation to publicly update or review any forward looking statement, whether as a result of new information, future developments or otherwise, unless required to do so by applicable law or the AIM Rules for Companies. All subsequent written and oral forward looking statements attributable to the Group or individuals acting on behalf of the Group are expressly qualiﬁed in their entirety by this paragraph. Prospective investors should speciﬁcally consider the factors identiﬁed in this announcement which could cause actual results to diﬀer from those indicated or suggested by the forward looking statements in this announcement before making an investment decision.

Important information

Neither this announcement nor any copy of it may be made or transmitted into the United States of America (including its territories or possessions, any state of the United States of America and the District of Columbia) (the "United States"), or distributed, directly or indirectly, in the United States. Neither this announcement nor any copy of it may be taken or transmitted directly or indirectly into Australia, Canada, the Republic of South Africa, New Zealand, Japan or to any persons in any of those jurisdictions, except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian, South African, New Zealand or Japanese securities laws or the securities laws of any other jurisdiction (other than the United Kingdom). The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about, and observe any such restrictions. This announcement does not constitute or form part of any oﬀer or invitation to sell or issue, or any solicitation of any oﬀer to purchase or subscribe for securities in the United States, Australia, Canada, the Republic of South Africa, New Zealand, Japan or in any jurisdiction to whom or in which such oﬀer or solicitation is unlawful.

There is no intention to register any portion of the Placing in the United States or to conduct any public offering of securities in the United States or elsewhere. All offers of Placing Shares will be made pursuant to an exemption under Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (the "Prospectus Regulation") from the requirement to produce a prospectus. This Announcement is being distributed to persons in the United Kingdom only in circumstances in which section 21(1) of FMSA does not apply.

Members of the public are not eligible to take part in the Placing. This Announcement and the terms and conditions set out in the Appendix are for information purposes only and are directed only at: (a) persons in Member States of the European Economic Area who are qualified investors within the meaning of Article 2(e) of the Prospectus Regulation ("Qualified Investors"); and (b) in the United Kingdom, Qualified Investors who are persons who (i) have professional experience in matters relating to investments falling within the definition of "investments professional" in article 19(5) 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) persons to whom it may otherwise be lawfully communicated; (all such persons together being referred to as "Relevant Persons"). This Announcement and the Appendix must not be acted on or relied on by persons who are not Relevant Persons.

The securities to which this announcement relates have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "Securities Act") or with any regulatory authority or under any applicable securities laws of any state or other jurisdiction of the United States, and may not be oﬀered or sold within the United States unless registered 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 compliance with applicable state laws. There will be no public oﬀer of the securities in the United States. The securities have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of any proposed offering of the securities, or the accuracy or adequacy of this document. Any representation to the contrary is a criminal offence in the United States. There will be no public offer of securities in the United States. Hedging transactions in securities may not be conducted unless in compliance with the Securities Act.

The securities referred to herein have not been registered under the applicable securities laws of Australia, Canada, the Republic of South Africa, New Zealand or Japan and, subject to certain exceptions, may not be oﬀered or sold within Australia, Canada, the Republic of South Africa, New Zealand or Japan or to any national, resident or citizen of Australia, Canada, the Republic of South Africa, New Zealand or Japan.

No representation or warranty, express or implied, is made by the Company or Stifel as to any of the contents of this announcement, including its accuracy, completeness or for any other statement made or purported to be made by it or on behalf of it, the Company, the Directors or any other person, in connection with the Placing, the Subscription and Admission, and nothing in this announcement shall be relied upon as a promise or representation in this respect, whether as to the past or the future (without limiting the statutory rights of any person to whom this announcement is issued). Stifel does not accept any liability whatsoever for the accuracy of any information or opinions contained in this announcement or for the omission of any material information from this announcement for which the Company and the Directors are solely responsible.

Definitions

The following words and expressions shall have the following meanings in this Announcement, unless the context otherwise requires:

"AIM"	means AIM, the market operated by the London Stock Exchange
"Admission"	the admission of the Placing Shares and/or Subscription Shares (as applicable) (as represented by Depositary Interests) to trading on AIM and such admission becoming effective in accordance with the AIM Rules for Companies
"AIM Rules for Companies"	means the AIM Rules for Companies, published by London Stock Exchange from time to time (including, without limitation, any guidance notes or statements of practice) which govern the rules and responsibilities of companies whose shares are admitted to trading on AIM
"Announcement"	means this announcement, together with its appendices and all information contain within them
"Articles"	means the articles of association of the Company
"certificated form" or "in certificated form"	means recorded on the relevant register of the share or security concerned as being held in certificated form (that is not in CREST)
"Company"	means Falanx Group Limited, a company registered in the British Virgin Islands with registration number 1730012
"Conditions"	means the conditions set out in clause 8 of the Placing Agreement
"CREST"	means the computer based system and procedures which enable title to securities to be evidenced and transferred without a written instrument, administered by Euroclear UK & Ireland Limited as the operator (as defined in the CREST Regulations)
"CREST Regulations"	means the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755)
"Existing Ordinary Shares"	means the 400,401,185 existing Ordinary Shares of the Company in issue at the date of this announcement, all of which are admitted to trading on AIM
"Depositary Interests"	dematerialised depositary interests representing underlying Ordinary Shares that can be settled electronically through and held in CREST
"Directors"	means the directors of the Company as at the date of this Announcement
"FCA"	means the Financial Conduct Authority
"FSMA"	means the Financial Services and Markets Act 2000 (as amended)
"Fundraise"	means the Placing and the Subscription
"Group"	means the Company and its subsidiary undertakings
"Issue Price"	means 1 pence per New Ordinary Share
"London Stock Exchange" or "LSE"	means London Stock Exchange plc
"MAR"	means Regulation (EU) No. 596/2014 on market abuse and applicable implementing legislation
"New Ordinary Shares"	means together, the Placing Shares and the Subscription Shares (if any)
"Nominated Adviser"	means Stifel, being the nominated adviser to the Company
"Ordinary Shares"	means the ordinary shares of no par value in the share capital of the Company
"Placees"	means those persons who are invited by Stifel on behalf of the Company to and who choose to participate in the Placing (and any person acting on such person's behalf) by making an oral or written offer to acquire Placing Shares, including any individuals, funds or others on whose behalf a commitment to acquire Placing Shares is given
"Placing"	means the conditional placing of the Placing Shares with the Placees pursuant to the provisions of the Placing Agreement
"Placing Agreement"	means the conditional agreement entered into between the Company and Stifel in respect of the Placing
"Placing Shares"	means the New Ordinary Shares in the capital of the Company to be issued pursuant to the provisions of the Placing Agreement
"Relevant Jurisdiction"	means the United Kingdom, or any other applicable jurisdiction the laws or regulations of which apply to a member of the Group or the Group's assets
"Regulatory Information Service"	means a regulated information service that is on the list of regulatory information services maintained by the FCA from time to time (or, if such a service is not operational at the relevant time, the Company Announcements Office of London Stock Exchange)
"Stifel"	means Stifel Nicolaus Europe Limited, a company incorporated in England and Wales with registration number 03719559, as sole bookrunner to the Company for the purposes of the Placing
"Subscribers"	means certain Directors of the Company
"Subscription"	means the intended subscription for Subscription Shares by Subscribers at the Issue Price
"Subscription Letters"	means any individual subscription letters entered into between the Company and certain Directors of the Company, pursuant to which those Directors may agree to subscribe for Subscription Shares
"Subscription Shares"	means the New Ordinary Shares (if any) to be issued to the Subscribers pursuant to the terms of the Subscription Letters
"Transaction"	means the Placing, the Subscription, and Admission

Appendix

Terms and Conditions of the Placing

THIS ANNOUNCEMENT, AND THE INFORMATION CONTAINED IN IT, IS RESTRICTED AND IS NOT FOR PUBLIC RELEASE, PUBLICATION, OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER STATE OR JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN THIS APPENDIX (TOGETHER THIS "ANNOUNCEMENT") ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHO ARE: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA") WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(E) OF REGULATION 2017/1129 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL OF 14 JUNE 2017, AS AMENDED FROM TIME TO TIME) (THE "PROSPECTUS REGULATION") ("QUALIFIED INVESTORS"), (B) IF IN THE UNITED KINGDOM, PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS WHO FALL WITHIN THE DEFINITION OF "INVESTMENT PROFESSIONALS" IN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER"), OR ARE HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS OR PARTNERSHIPS OR TRUSTEES OF HIGH VALUE TRUSTS AS DESCRIBED IN ARTICLE 49(2) OF THE ORDER AND (II) ARE "QUALIFIED INVESTORS" AS DEFINED IN SECTION 86 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED ("FSMA"), AND (C) OTHERWISE, TO PERSONS TO WHOM IT MAY OTHERWISE BE LAWFUL TO COMMUNICATE IT TO (EACH A "RELEVANT PERSON").

NO OTHER PERSON SHOULD ACT OR RELY ON THIS ANNOUNCEMENT AND PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. BY ACCEPTING THE TERMS OF THIS ANNOUNCEMENT YOU REPRESENT AND AGREE THAT YOU ARE A RELEVANT PERSON. THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY OR ACQUIRE ANY SECURITIES IN THE COMPANY.

THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT (AND THE INFORMATION CONTAINED HEREIN) DOES NOT CONSTITUTE AND MAY NOT BE CONSTRUED AS AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, ACQUIRED, RESOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY WITHIN, INTO OR IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY RELEVANT STATE OR OTHER JURISDICTION OF THE UNITED STATES. THERE WILL BE NO PUBLIC OFFER OF THE PLACING SHARES IN THE UNITED STATES, THE UNITED KINGDOM OR ELSEWHERE.

THE PLACING SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE US SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION IN THE UNITED STATES OR ANY US REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF ANY PROPOSED OFFERING OF THE PLACING SHARES, OR THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES. THERE WILL BE NO PUBLIC OFFER OF THE SECURITIES MENTIONED HEREIN IN THE UNITED STATES. HEDGING TRANSACTIONS IN THE PLACING SHARES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE US SECURITIES ACT.

THE COMPANY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT") AND, AS SUCH, INVESTORS WILL NOT BE ENTITLED TO THE BENEFITS OF THE INVESTMENT COMPANY ACT. NO OFFER, PURCHASE, SALE OR TRANSFER OF THE PLACING SHARES MAY BE MADE EXCEPT UNDER CIRCUMSTANCES WHICH WILL NOT RESULT IN THE COMPANY BEING REQUIRED TO REGISTER AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT.

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, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA 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. NO PUBLIC OFFER OF SECURITIES OF THE COMPANY IS BEING MADE IN THE UNITED KINGDOM, THE UNITED STATES OR ELSEWHERE.

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 OR THE REPUBLIC OF SOUTH AFRICA. ACCORDINGLY, THE PLACING SHARES MAY NOT (UNLESS AN EXEMPTION UNDER THE RELEVANT SECURITIES LAWS IS APPLICABLE) BE OFFERED, SOLD, RESOLD OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION OUTSIDE THE EEA.

EACH PLACEE SHOULD CONSULT ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS, FINANCIAL AND RELATED ASPECTS OF ACQUIRING THE PLACING SHARES.

Unless otherwise defined in these terms and conditions, capitalised terms used in these terms and conditions shall have the meaning given to them in this Announcement.

The Placees will be deemed to have read and understood this Announcement in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings, contained in this Appendix. In particular, each such Placee represents, warrants and acknowledges 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. if it is in a member state of the EEA or in the United Kingdom and/or if it is a financial intermediary, as that term is used in Article 5(1) of the Prospectus Regulation, that any 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 any member state of the EEA or the United Kingdom in circumstances which may give rise to an offer of securities to the public, other than an offer or resale in a member state of the EEA or the United Kingdom which has implemented the Prospectus Regulation or to Qualified Investors (as defined above), or in circumstances in which the prior consent of Stifel has been given to each such proposed offer or resale;

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 has authority to exercise, and is exercising, 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;

5. it acknowledges that the Placing Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold or transferred, directly or indirectly, within 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;

6. (i) it and the person(s), if any, for whose account or benefit it is acquiring the Placing Shares are purchasing the Placing Shares in an "offshore transaction" as defined in Regulation S under the Securities Act; (ii) it is aware of the restrictions on the offer and sale of the Placing Shares pursuant to Regulation S; and (iii) the Placing Shares have not been offered to it by means of any "directed selling efforts" as defined in Regulation S; and

7. the Company and Stifel will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

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.

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

Stifel makes no representation to any Placees regarding an investment in the Placing Shares.

Details of the Placing Agreement and of the Placing Shares

The Company has today entered into the Placing Agreement with Stifel (the Company's Nominated Adviser and bookrunner in connection with the Placing) under which, subject to the conditions set out therein, Stifel have agreed, as agent for and on behalf of the Company, to use its reasonable endeavours to procure Placees for the Placing Shares at the Issue Price.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares in the Company, 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

Applications will be made to London Stock Exchange for admission of the Placing Shares and Subscription Shares (if any) (as represented by Depositary Interests) to trading on AIM in accordance with the AIM Rules for Companies ("Admission").

It is expected that Admission will become effective at 8.00 a.m. on or around 1 October 2020 and that dealings in the New Ordinary Shares will commence at that time, and in any event no later than 16 October 2020.

Bookbuild

Stifel will today commence the bookbuilding process in respect of the Placing (the "Bookbuild") to determine demand for participation in the Placing by Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

Stifel and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.

Participation in, and principal terms of, the Placing

1. Stifel is arranging the Placing as bookrunner and agent of the Company.

2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by Stifel. Stifel's agents and their respective affiliates are each entitled to enter bids in the Bookbuild as principal.

3. The final number of Placing Shares will be agreed between Stifel and the Company following completion of the Bookbuild. The number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Bookbuild (the "Pricing Announcement").

4. To bid in the Bookbuild, Placees should communicate their bid by telephone or in writing to their usual sales contact at Stifel. Each bid should state the aggregate number of Placing Shares which the prospective Placee wishes to acquire at the Issue Price or the total monetary amount which it wishes to commit to acquire the Placing Shares at the Issue Price. Bids may be scaled down by Stifel on the basis referred to in paragraph 9 below. Stifel are arranging the Placing as agent of the Company.

5. The Bookbuild will open with immediate effect following release of this Announcement and close as soon as reasonably practicable thereafter. Stifel may, in agreement with the Company, accept bids that are received after the Bookbuild has closed. The Company reserves the right (upon the agreement of Stifel) to reduce or seek to increase the amount to be raised pursuant to the Placing.

6. Each prospective Placee's allocation will be determined by Stifel in their sole discretion and will be confirmed orally by Stifel as agent of the Company following the close of the Bookbuild. That oral confirmation will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) to acquire the number of Placing Shares allocated to it at the Issue Price on the terms and conditions set out in this Appendix and in accordance with the Company's articles of association and each Placee will be deemed to have read and understood this Announcement (including this Appendix) in its entirety.

7. Each prospective Placee's allocation and commitment will be evidenced by a contract note and/or electronic trade confirmation issued to such Placee by Stifel. The terms of this Appendix will be deemed incorporated by reference therein.

8. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to Stifel, to pay as principal to Stifel (or as it may direct) in cleared funds immediately on the settlement date an amount equal to the product of the Issue 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.

9. Subject to paragraphs 4 and 5 above, Stifel reserve the right not to accept bids or may choose to accept bids, either in whole or in part, on the basis of allocations determined in agreement with the Company and may scale down any bids for this purpose on such basis as they may determine. Stifel may also, notwithstanding paragraphs 4 and 5 above, subject to the prior consent of the Company (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time; and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time.

10. A bid in the Bookbuild will be made on the terms and subject to the conditions in this Announcement (including this Appendix) and will be legally binding on the Placee on behalf of which it is made and, except with the consent of Stifel, will not be capable of variation or revocation after the time at which it is submitted.

11. Except as required by law or regulation, no press release or other announcement will be made by Stifel or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

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

13. All obligations under the Bookbuild and Placing will be subject to fulfilment or (where applicable) waiver 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 "Right to terminate under the Placing Agreement".

14. By participating in the Bookbuild, 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.

15. To the fullest extent permissible by law, neither Stifel nor any of its affiliates, agents, directors, officers or employees shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither Stifel nor any of its respective affiliates, agents, directors, officers or employees shall have any liability (including to the extent permissible by law, any fiduciary duties) in respect of Stifel's conduct of the Bookbuild or of such alternative method of effecting the Placing as Stifel and the Company may agree.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms. Stifel's obligations under the Placing Agreement are conditional on customary conditions including (amongst others):

1. certain announcement obligations;

2. Admission occurring no later than 8.00 a.m. (London time) on 1 October 2020 (or such later time and/or date, not being later than 8.00 a.m. (London time) on 16 October 2020, as Stifel may otherwise agree with the Company); and

3. the Company having complied with all of its obligations under the Placing Agreement which fall to be performed or satisfied on or prior to Admission.

If (i) any of the conditions contained in the Placing Agreement, including those described above, are not fulfilled (or, where permitted, waived or extended in writing by Stifel) or become incapable of fulfilment on or before the date or time specified for the fulfilment thereof (or such later date and/or time as Stifel may agree); or (ii) the Placing Agreement is terminated in the circumstances specified below, the Placing will not proceed and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

Lock-up

The Company has undertaken to Stifel that it will not without the prior written consent of Stifel, before the date which falls 120 days after Admission directly or indirectly, offer, issue, lend, sell or contract to sell, issue options in respect of or otherwise dispose of or announce an offer or issue of any Ordinary Shares (or any interest therein or in respect thereof) or any other securities exchangeable for or convertible into, or substantially similar to, Ordinary Shares or enter into any transaction with the same economic effect as, or agree to do, any of the foregoing (whether or not legally or contractually obliged to do so), save in respect of:

1. Placing Shares issued by the Company pursuant to the Placing;

2. the Subscription Shares (if any) to be issued by the Company in connection with the Subscription Agreements;

3. the granting or exercise of options or other rights related to Ordinary Shares pursuant to the Company's share incentive scheme; and

4. Ordinary Shares issued pursuant to the exercise of the options and warrants in issue at today's date.

By participating in the Placing, Placees agree that the exercise by Stifel of any power to grant consent to the undertaking by the Company of a transaction which would otherwise be subject to the lock-up under the Placing Agreement shall be within the discretion of Stifeland that it need not make any reference to, or consult with, any Placee and that it shall have no liability to Placees whatsoever in connection with any such exercise of the power to grant consent or failure to exercise such power.

Right to terminate under the Placing Agreement

At any time before Admission, Stifel is entitled to terminate the Placing Agreement in the following circumstances, amongst others:

(i) if any of the Company's warranties or representations are not or cease to be true and accurate in any respect; or

(ii) if it comes to the notice of Stifel that any statement contained in the Placing Agreement was untrue, incorrect or misleading at the date of the Placing Agreement in any respect which Stifel considers to be material in the context of the Placing and/or Admission; or

(iii) if there has occurred (a) a general moratorium on commercial banking activities in London or New York declared by the relevant authorities or a material disruption in commercial banking or securities settlement or clearance services in the United Kingdom or the United States, (b) there has occurred, in the sole judgement of Stifel, any outbreak of hostilities or escalation thereof or act or incidence of terrorism or other calamity or crisis, a significant worsening of the situation relating to the COVID-19 coronavirus disease, national or international emergency or war, or any change (or development involving a prospective change) in national or international monetary, political, financial or economic conditions or currency exchange rates or foreign exchange controls; (c) trading in any securities of the Company or trading generally on any stock exchange or in any over the counter market is disrupted, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any exchange or by any governmental authority, or a material disruption has occurred in commercial banking or securities settlement or clearance services in the British Virgin Islands, United States, Asia or in Europe, in the sole judgement Stifel (acting reasonably); or (d) there has occurred an adverse change (or prospective adverse change) in the United Kingdom regarding taxation affecting the Ordinary Shares or Depositary Interests or in each case the transfer thereof, and, which would (either singularly or together with any other event referred to in paragraph (iii) in the sole judgement of Stifel, be likely to prejudice the success of the Placing, dealings in the Ordinary Shares in the secondary market or which makes it, in the sole judgement of Stifel, impractical to proceed with the Placing and/or to market the Placing Shares on the terms and in the manner set out in the Placing Agreement.

Upon such notice of termination being given, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement, subject to certain exceptions.

By participating in the Placing, Placees agree that the exercise by Stifel of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Stifel, and that it need not make any reference to Placees and that Stifel shall have no liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

No prospectus or admission document

No offering document or prospectus or admission document has been or will be published or submitted to be approved by the FCA or the LSE in relation to the Placing and Placees' commitments will be made solely on the basis of their own assessment of the Company, the Placing Shares and the Placing based on the Company's publicly available information taken together with the information contained in this Announcement released by the Company today and any information publicly announced to a Regulatory Information Service by or on behalf of the Company on or prior to the date of this Announcement, and subject to any further terms set forth in the contract note or electronic confirmation to be provided to individual prospective Placees. Each Placee, by accepting a participation 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 other information, representation, warranty or statement made by or on behalf of the Company, Stifel or any other person and none of Stifel nor the Company nor any of their respective affiliates will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. 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. Each Placee should not consider any information in this Announcement to be legal, tax or business advice. Each Placee should consult its own legal adviser, tax adviser and/or business adviser for legal, tax and business advice regarding an investment in the Placing Shares. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation by that person.

Registration and settlement

Settlement of transactions in the depositary interests representing the Placing Shares (ISIN: GB00B5SGVL29) following Admission will take place within the CREST system, subject to certain exceptions. The Company and Stifel reserve the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees by such other means that they deem necessary, including in certificated form, if in Stifel's reasonable opinion delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement 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 will be sent a contract note or electronic confirmation in accordance with the standing arrangements in place with Stifel stating the number of Placing Shares to be allocated to it at the Issue Price, the aggregate amount owed by such Placee to Stifel or it's sub-agent and settlement instructions. Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with Stifel.

The Company will deliver the Placing Shares to a CREST account operated by Stifel or its sub-agent, in each case, as agent for and on behalf of the Company and will enter its delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

It is expected that settlement will be on 1 October 2020 on a trade date + 2 business day basis in accordance with the instructions set out in the contract note or electronic confirmation.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by Stifel.

Each Placee is deemed to agree that, if it does not comply with these obligations, Stifel 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 account and benefit of Stifel, 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 will be required to bear any stamp duty or stamp duty reserve tax or other stamp, securities, transfer, registration, execution, documentary or other similar impost, duty or tax (together with any interest or penalties thereon or other similar taxes imposed in any jurisdiction) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, each Placee confers on Stifel all such authorities and powers necessary to carry out any such transaction and agrees to ratify and confirm all actions which Stifel lawfully takes on such Placee's behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the contract note or electronic trade confirmation (as applicable) is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. If there are any other circumstances in which any stamp duty or stamp duty reserve tax (including any interest and penalties relating thereto) is payable in respect of the allocation, allotment, issue or delivery of the Placing Shares (or for the avoidance of doubt if any stamp duty or stamp duty reserve tax is payable in connection with any subsequent transfer of or agreement to transfer Placing Shares), neither Stifel nor the Company shall be responsible for the payment thereof. Placees (or any nominee or other agent acting on behalf of a Placee) will not be entitled to receive any fee or commission in connection with the Placing.

In the event of any difficulties or delays in the admission of the Placing Shares to CREST or the use of CREST in the Placing, the Company and Stifel may agree that the Placing Shares should be issued in certificated form. Stifel reserves the right to require settlement for the Placing Shares, and to deliver the Placing Shares to Placees, by such other means as they deem necessary if delivery or settlement to Placees is not practicable within the CREST system or would not be consistent with regulatory requirements in a Placee's jurisdiction.

Representations and warranties

By participating in the Placing, each prospective Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with Stifel (in its capacity as the nominated adviser, bookrunner and agent of the Company), in each case as a fundamental term of its application for Placing Shares that:

1. it has read and understood this Announcement in its entirety and that its participation in the Bookbuild and the Placing and its acquisition of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained herein;

2. it has made its investment decision based solely upon its own judgement, due diligence and analysis and not upon any view expressed or information provided by or on behalf of Stifel or any other person other than as set out in this Announcement

3. no offering document or prospectus or admission document has been prepared in connection with the Placing and it has not received a prospectus, admission document or other offering document in connection with the Bookbuild, the Placing or the Placing Shares;

4. if it has received any 'inside information' (for the purposes of MAR and section 56 of the Criminal Justice Act 1993) in relation to the Company and its securities in advance of the Placing, it confirms that it has received such information within the market soundings regime provided for in article 11 of MAR and associated delegated regulations and it has not:

(a) used that inside information to acquire or dispose of securities of the Company or financial instruments related thereto or cancel or amend an order concerning the Company's securities or any such financial instruments;

(b) used that inside information to encourage, require, recommend or induce another person to deal in the securities of the Company or financial instruments related thereto or to cancel or amend an order concerning the Company's securities or such financial instruments; or

(c) disclosed such information to any person, prior to the information being made publicly available;

5. it has the power and authority to carry on the activities in which it is engaged, to acquire Placing Shares and to execute and deliver all documents necessary for such acquisition;

6. neither Stifel nor the Company nor any of their respective affiliates, agents, directors, officers or employees nor any person acting on behalf of any of them has provided, and none of them will provide it, with any material regarding the Placing Shares or the Company other than information included in this Announcement (including this Appendix), nor has it requested any of Stifel, the Company, or any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;

7. (i) it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on this Announcement (including this Appendix) and any information publicly announced to a Regulatory Information Service by or on behalf of the Company prior to the date of this Announcement (the "Publicly Available Information"); (ii) the Company's ordinary shares (as represented by depositary interests) are listed on AIM and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the LSE and relevant regulatory authorities (the "Exchange Information"), which includes a description of the nature of the Company's business, most recent balance sheet and profit and loss account, and similar statements for preceding years, and it has reviewed such Exchange Information as it has deemed necessary or that it is able to obtain or access the Exchange Information without undue difficulty; and (iii) it has had access to such financial and other information (including the business, financial condition, prospects, creditworthiness, status and affairs of the Company, the Placing and the Placing Shares, as well as the opportunity to ask questions) concerning the Company, the Placing and the Placing Shares as it has deemed necessary in connection with its own investment decision to acquire any of the Placing Shares and has satisfied itself that the information is still current and relied on that investigation for the purposes of its decision to participate in the Placing;

8. (i) neither the Company, Stifel, nor any of its respective affiliates has made any representations to it, express or implied, with respect to the Company, the Placing and the Placing Shares or the accuracy, completeness or adequacy of the Publicly Available Information or the Exchange Information, and each of them expressly disclaims any liability in respect thereof; and (ii) it will not hold Stifel nor any of its respective affiliates responsible for any misstatements in or omissions from any Publicly Available Information or any Exchange Information. Nothing in this paragraph or otherwise in this Announcement (including this Appendix) excludes the liability of any person for fraudulent misrepresentation made by that person;

9. the content of this Announcement (including this Appendix) is exclusively the responsibility of the Company and that none of Stifel nor any of its respective affiliates, agents, directors, officers or employees nor any person acting on its behalf has or shall have any liability for any information, representation or statement contained in this Announcement (including this Appendix) or any information previously published by or on behalf of the Company and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is contained in this Announcement (including this Appendix) and any Publicly Available Information including (without limitation) the Exchange Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given, investigation made or representations, warranties or statements made by any of Stifel or the Company nor any of their respective affiliates, agents, directors, officers or employees nor any person acting on its or their behalf and none of Stifel nor the Company nor any of their respective affiliates, agents, directors, officers or employees will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement;

10. it may not rely, and has not relied, on any investigation that Stifel, any of its affiliates or any person acting on its behalf, may or may not have conducted with respect to the Placing Shares or the Company, and none of such persons has may any representation, express or implied, with respect to the Company or the Placing Shares;

11. it has conducted its own investigation with respect to the Company and the Placing Shares, received and reviewed all information that it believes is necessary or appropriate in connection with its purchase of Placing Shares and made its own assessment and has satisfied itself concerning the relevant tax, legal, regulatory, currency and other economic considerations relevant to its investment in the Placing Shares;

12. in making any decision to acquire the Placing Shares, it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of taking up the Placing Shares. It further confirms that it is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of participating in, and is able to sustain a complete loss in connection with, the Placing and has no immediate need for liquidity with respect to its investment in the Placing Shares. It further confirms that it relied on its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved, and not upon any view expressed or information provided by or on behalf of Stifel;

13. (i) it and each account it represents is not and at the time the Placing Shares are acquired will not, be a resident of any jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares, and it and each account it represents is (a) outside the United States and will be outside the United States at the time that any buy order for Placing Shares is originated by it and (b) acquiring the Placing Shares in an "offshore transaction" within the meaning of Regulation S under the Securities Act ("Regulation S") and (c) not acquiring any of the Placing Shares as a result of any form of "directed selling efforts" within the meaning of Regulation S; (ii) it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly of any such Placing Shares into the United States, Australia, Canada, Japan or the Republic of South Africa; and (iii) that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada, Japan or the Republic of South Africa and, subject to certain exceptions, may not be offered, sold, acquired, renounced, distributed or delivered or transferred, directly or indirectly, within or into those jurisdictions;

14. it understands, and each account it represents has been advised that, (i) the Placing Shares have not been and will not be registered under the Securities Act or under the applicable securities laws of any state or other jurisdiction of the United States; (ii) the Placing Shares are being offered and sold only in "offshore transactions" within the meaning of and pursuant to Regulation S under the Securities Act; and (iii) no representation has been made as to the availability of any exemption under the Securities Act or any relevant state or other jurisdiction's securities laws for the reoffer, resale, pledge or transfer of the Placing Shares;

15. it will not distribute, forward, transfer or otherwise transmit this document or any other materials concerning the Placing (including any electronic copies thereof), in or into the United States;

16. the Placing Shares are expected to be issued to it through CREST;

17. where it is acquiring the Placing Shares for one or more managed account, that it is authorised in writing by each managed account to acquire the Placing Shares for each managed account and it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

18. if it is a pension fund or investment company, its acquisition of Placing Shares is in full compliance with applicable laws and regulations;

19. neither it, nor the person specified by it for registration as holder of Placing Shares is, or is acting as nominee or agent for, and the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act of 1986 (depositary receipts and clearance services); it has complied with its obligations under the Criminal Justice Act 1993, section 118 of FSMA, and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000, the Terrorism Act 2006, the Money Laundering Regulations 2007 (the "Regulations") and the Money Laundering Sourcebook of the FCA 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;

20. if a financial intermediary, as that term is used in Article 5(1) of the Prospectus Regulation, 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 other than to Qualified Investors, or in circumstances in which the prior consent of Stifel has been given to the proposed offer or resale;

21. it and any person acting on its behalf falls within Article 19(5) and/or 49(2)(a) to (d) of the Order and 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;

22. it has only communicated or caused to be communicated and 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 the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

23. it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

24. if in a member state of the EEA, it is a "qualified investor" within the meaning of the Prospectus Regulation;

25. if in the UK, that it is a person (i) who has professional experience in matters relating to investments falling within Article 19(5) of the Order, (ii) falling within Article 49(2)(A) to (D) ("High Net Worth Companies, Unincorporated Associations, etc") of the Order, or (iii) to whom this Announcement may otherwise be lawfully communicated;

26. that no action has been or will be taken by any of the Company, Stifel or any person acting on behalf of the Company or Stifel that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

27. it is acting as principal only in respect of the Placing or, if it is acting for any other person: (i) 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 (ii) it is and will remain liable to the Company and/or Stifel 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). Each Placee agrees that the provisions of this paragraph 24 shall survive the resale of the Placing Shares by or on behalf of any person for whom it is acting;

28. (i) it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions which apply to it, (ii) it has paid any issue, transfer or other taxes due in connection with its participation in any territory, (iii) it has not taken any action which will or may result in the Company, Stifel, any of their affiliates or any person acting on their behalf being in breach of the legal and/or regulatory requirements of any territory in connection with the Placing, (iv) that the acquisition of the Placing Shares by it or any person acting on its behalf will be in compliance with applicable laws and regulations in the jurisdiction of its residence, the residence of the Company, or otherwise, and (v) it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement (including this Appendix)) and will honour such obligations;

29. it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with the terms and conditions of this Announcement (including this Appendix) on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other persons or sold as Stifel may in its discretion determine and it will remain liable for any amount by which the net proceeds of such sale falls short of the product of the Issue Price and the number of Placing Shares allocated to it and may be required to bear any stamp duty for 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;

30. its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to acquire, and that Stifel may call upon it to acquire a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;

31. neither Stifel nor any of its respective affiliates, agents, directors, officers or employees, nor any person acting on behalf of it, 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 participation in the Placing is on the basis that it is not and will not be a client of Stifel and Stifel has no duties or responsibilities to it for providing the protections afforded to its clients or customers 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 their respective rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

32. the person whom it specifies for registration as holder of the Placing Shares will be (i) itself; or (ii) its nominee, as the case may be. Neither Stifel nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax or other similar taxes resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify on an after-tax basis and hold harmless the Company, Stifel and each of their respective affiliates, agents, directors, officers and employees in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of Stifel who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

33. it indemnifies and holds harmless the Company, Stifel and their respective affiliates, agents, directors, officers and employees 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 in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

34. in connection with the Placing, Stifel and any of its affiliates acting as an investor for its own account may acquire Placing Shares in the Company and in that capacity may acquire, retain, purchase or sell for its own account such ordinary shares in the Company and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing. Stifel does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so;

35. its commitment to acquire Placing Shares on the terms set out in this Announcement (including this Appendix) will continue notwithstanding any amendment that may or in the 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 or Stifel's conduct of the Placing;

36. neither the Company nor Stifel owes any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement;

37. its commitment to acquire Placing Shares on the terms set out herein and in the contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or Stifel's conduct of the Placing;

38. these terms and conditions and any agreements entered into by it pursuant to these terms and conditions (including any non-contractual obligations arising out of or in connection with such agreements) shall be governed by and construed in accordance with the laws of England and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards 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 Stifel 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; and

39. the foregoing acknowledgements, agreements, undertakings, representations, warranties and confirmations are given for the benefit of each of the Company and Stifel (for their own benefit and, where relevant, the benefit of their respective affiliates and any person acting on their behalf) and are irrevocable. The Company, Stifel and their respective affiliates, agents, directors, officers and employees and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations, warranties and agreements and it agrees that if any of the acknowledgements, representations, warranties and agreements made in connection with its acquiring of Placing Shares is no longer accurate, it shall promptly notify the Company and Stifel. It irrevocably authorises Stifel and the Company to produce this Announcement pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set out herein.

The agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as nominee or agent) free of stamp duty and stamp duty reserve tax relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct from the Company for the Placing Shares in question. Such agreement is subject to the representations, warranties and further terms above and assumes, and is based on the warranty from each Placee, that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax or other similar taxes may be payable, for which neither the Company nor Stifel will be responsible and each Placee shall indemnify on an after-tax basis and hold harmless the Company, Stifel and their respective affiliates, agents, directors, officers and employees for any stamp duty or stamp duty reserve tax paid by them in respect of any such arrangements or dealings.

Neither the Company nor Stifel are liable to bear 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 in or outside the United Kingdom by any Placee or any other person on a Placee's acquisition of any Placing Shares or the agreement by a Placee to acquire any Placing Shares. Each Placee agrees to indemnify on an after-tax basis and hold harmless the Company, Stifel and their respective affiliates, agents, directors, officers and employees from any and all interest, fines or penalties in relation to any such duties or taxes to the extent that such interest, fines or penalties arise from the unreasonable default or delay of that Placee or its agent.

Each Placee should seek its own advice as to whether any of the above tax liabilities arise and notify Stifel accordingly.

Each Placee, and any person acting on behalf of each Placee, acknowledges and agrees that Stifel and/or any of its affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with Stifel, any money held in an account with Stifel 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 rules and regulations of the FCA made under FSMA. The 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 Stifel's money in accordance with the client money rules and will be used by Stifel in the course of its own business; and the Placee will rank only as a general creditor of the Stifel.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

The rights and remedies of Stifel and the Company under the Announcement and the Terms and Conditions contained in this Appendix are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

If a Placee is a discretionary fund manager, he may be asked to disclose, in writing or orally to Stifel the jurisdiction in which the funds are managed or owned.

All times and dates in this Announcement (including this Appendix) may be subject to amendment. Stifel shall notify the Placees and any person acting on behalf of the Placees of any changes.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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Cloudified Holdings Limited (CHL)

Friday, 24th January 2025

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