Conditional Placing and Share Re-organisation

RNS Number : 3355F

Location Sciences Group PLC

06 March 2020

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR IMMEDIATE RELEASE

6 March 2020

Location Sciences Group PLC
("Location Sciences" or the "Company")

Proposed Placing of 111,430,000 New Ordinary Shares

at an issue price of 0.875 pence per New Ordinary Share

and

Share re-organisation

Location Sciences (AIM: LSAI), the leading location data verification company, announces that it has conditionally raised approximately £0.975 million (before expenses) through a Placing comprising the issue and allotment of 111,430,000 New Ordinary Shares at the Issue Price of 0.875 pence per New Ordinary Share. Peterhouse Capital will be appointed as joint broker to the Company with effect from Admission. 

The Issue Price represents a discount of 37.5 per cent. to the closing mid-market price of 1.4 pence per Existing Ordinary Share on 5 March 2020 (being the last Business Day prior to this announcement).

It is expected that Admission will occur at 8.00 a.m. on 27 March 2020 (or such later time and/or dates as Shore Capital and Corporate, Peterhouse Capital and the Company may agree).

The Placing is not being underwritten.

The Placing is also conditional, inter alia, upon Shareholders approving the Resolutions at the General Meeting that will approve the Sub-division (details of which are set out below) and grant the Directors the authority to allot the Placing Shares and the power to disapply statutory pre-emption rights in respect of the Placing Shares.

The Company requires further funds to maintain its position in the UK location data and insights market and allow the Company to grow Verify, its location data verification product, both in the UK and overseas.

The Company expects to use the net proceeds of the Placing for:

· US business development;

· product development; and

· general working capital purposes.

Sub-division of share capital

The issue of new shares by a company incorporated in England and Wales at a price below their nominal value is prohibited by the Act and, accordingly, the ability of the Company to undertake the Placing and other future fundraisings is restricted.

Accordingly, the Board is proposing a re-organisation of the Company's share capital that comprises a sub-division of the Existing Ordinary Shares that will create two classes of shares: New Ordinary Shares with a nominal value of 0.1 pence and New Deferred Shares with a nominal value of 0.9 pence.

The proportion of the issued ordinary share capital of the Company held by each Shareholder immediately before and after the Sub-division will remain unchanged. The New Deferred Shares arising on completion of the Sub-division will be in addition to the Existing Deferred Shares, of which there are 1,040,712,398 in issue.

Shareholder approval is needed in order to effect the Sub-division. The Resolution to approve the Sub-division (which will be Resolution 1 in the Notice of General Meeting) must be passed by an ordinary resolution of Shareholders if the Sub-division is to become effective.

All entitlements under outstanding share options shall be recalculated accordingly as a result of the Sub-division.

Following the Sub-division, the ISIN code for the New Ordinary Shares will remain GB00BGT36S19 and the SEDOL code for the New Ordinary Shares will remain BGT36S1.

Immediately following the Sub-division (and before Admission), the issued share capital of the Company will be 376,651,734 New Ordinary Shares, 1,040,712,398 Existing Deferred Shares and 376,651,734 New Deferred Shares.

General Meeting

The Proposals are conditional upon, inter alia, the passing of the Resolutions. You will find set out at the end of the Circular a notice convening the General Meeting to be held at the Company's registered office at 20 Eastbourne Terrace, Paddington, London, W2 6LG on 26 March 2020 at 11.00 a.m. at which the following resolutions will be proposed as ordinary or special resolutions as indicated below:

1.  to approve the Sub-division (ordinary resolution);

2.  to authorise the Directors to allot the Placing Shares in connection with the Placing, the Broker Shares and the Settlement Shares (ordinary resolution); and

3.  to waive the statutory pre-emption rights in respect of the allotment of equity securities pursuant to the Placing, including the Placing Shares in connection with the Placing, the Broker Shares and the Settlement Shares (special resolution).

Shareholders should note that the Resolutions are inter-conditional. This means that if any one of the Resolutions is not approved, the other Resolutions will also not be passed, and the Proposals will not complete.

As the Placing is conditional, inter alia, upon the passing of the Resolutions, Shareholders should be aware that, if the Resolutions are not passed, the proceeds of the Placing will not be received by the Company. In such circumstances, the Company would need urgently to pursue additional or alternative funding sources which, if they are available at all, may be expensive and/or onerous for the Company and/or asset sales or part sales.

Final Results

The Company expects to release its Final Results for the year ended 31 December 2019 on 16 March 2020.

Mark Slade, Chief Executive Officer of Location Sciences, commented: "I am pleased to announce the successful fundraising and wish to thank the investors, new and existing, for their support. We now look forward to executing on our business plan; accelerating the growth of Verify, the Company's location data verification product, both in the UK and overseas."

The above summary announcement should be read in conjunction with the full appendix at the bottom of this announcement.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR"), encompassing information relating to the Fundraising as described above, and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For further information please contact: 

Location Sciences Group PLC	via Milk and Honey PR
Mark Slade, Chief Executive Officer
David Rae, Chief Financial Officer
Shore Capital (Nomad and Broker)	Tel: [phone]
Tom Griffiths
David Coaten
Peterhouse Capital (Placing Agent) Charles Goodfellow Eran Zucker	Tel: [phone]
Milk & Honey PR	Tel: [phone]
Kirsty Leighton
Jessica Ballinger

The person making this notification on behalf of the Company is David Rae, Chief Financial Officer of the Company.

About Location Sciences

Location Sciences is the pre-eminent global location verification provider to the $190 billion digital advertising industry, working in partnership with brands, media agencies and suppliers to reduce ad wastage and improve the effectiveness of location-based advertising campaigns. 

The digital advertising marketplace remains unregulated and unmonitored, with an estimated $19 billion wasted on ad fraud in 2018. Location Sciences has developed Verify, the world's first independent location verification product. Utilising sophisticated machine learning and pattern recognition technologies, Verify detects location ad fraud and shines a light on location data inaccuracy with the aim of bringing back integrity, transparency and trust to the market place.

IMPORTANT INFORMATION

The Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended, or under the applicable securities laws of any state or other jurisdiction of the United States or qualified for distribution under any applicable securities laws in any other Restricted Jurisdiction. The Placing Shares may not be offered, sold, taken up, 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 state or other jurisdiction of the United States. The Placing Shares are being offered and sold outside the United States in offshore transactions within the meaning of, and in accordance with, the safe harbour from the registration requirements in Regulation S under the Securities Act.

Neither Shore Capital and Corporate nor the Joint Brokers makes any representation or warranty to any offeree or purchaser of the Placing Shares regarding the legality of any investment in the securities by such offeree or purchaser under the laws applicable to such offeree or purchaser. Each investor should consult with his, her or its own advisers as to the legal, tax, business, financial and related aspects of a purchase of the Placing Shares.

None of the Placing Shares, this announcement nor any other document or announcement connected with the Placing has been or will be approved or disapproved by the United States Securities and Exchange Commission or by the securities commissions of any state or other jurisdiction of the United States or any other regulatory authority, nor has any of the foregoing authorities or any securities commission passed upon or endorsed the merits of the offering of the Placing Shares or the accuracy or adequacy of this announcement or any other document or announcement connected with the Placing. Any representation to the contrary is a criminal offence.

Notwithstanding anything to the contrary herein, each prospective investor may disclose to any and all persons, without limitation of any kind, the US federal income tax treatment and tax structure of the Company and of the transactions contemplated by the Company. For this purpose, "tax structure" shall mean any fact that may be relevant to understanding the purported or claimed US federal tax treatment of the transaction; provided that none of the following shall for this purpose constitute tax treatment or tax structure information: the name of or other identifying information relating to the performance of the Company or its operations.

APPENDIX

A circular containing details of the Proposals is expected to be posted on 9 March 2020 to Shareholders along with a Form of Proxy to vote at a general meeting of the Company expected to be convened at 11.00 a.m. on 26 March 2020. Capitalised terms in this announcement are defined as set out at the end of this announcement.

1.  INTRODUCTION

The Company announces that it has conditionally raised approximately £0.975 million (before expenses) through a Placing comprising the issue and allotment of 111,430,000 New Ordinary Shares at the Issue Price of 0.875 pence per New Ordinary Share.

The Placing Shares will represent approximately 22.7 per cent. of the Enlarged Share Capital.

The Placing is conditional, inter alia, upon the Resolutions being passed, compliance by the Company with its obligations under the Placing Agreement and Admission.

The Issue Price represents a discount of 37.5 per cent. to the closing mid-market price of 1.4 pence per Existing Ordinary Share on 5 March 2020 (being the last Business Day prior to the announcement of the Proposals).

It is expected that Admission will occur at 8.00 a.m. on 27 March 2020  (or such later time and/or dates as Shore Capital, Peterhouse Capital and the Company may agree).

The Placing is not being underwritten.

The Placing is also conditional, inter alia, upon Shareholders approving the Resolutions at the General Meeting that will approve the Sub-division (details of which are set out in paragraph 8 below) and grant the Directors the authority to allot the Placing Shares and the power to disapply statutory pre-emption rights in respect of the Placing Shares.

The purpose of this announcement is, amongst other things, to set out the background to, and reasons for, the Placing, to give details of the Proposals and to explain why the Board considers that the Proposals will promote the growth and success of the Company for the benefit of Shareholders as a whole.

As the Placing is conditional, inter alia, upon the passing of the Resolutions, Shareholders should be aware that, if the Resolutions are not passed, the proceeds of the Placing will not be received by the Company. In such circumstances, the Company would need urgently to pursue additional or alternative funding sources which, if they are available at all, may be expensive and/or onerous for the Company and/or asset sales or part sales.

2.  LOCATION SCIENCES

Location Sciences is a pre-eminent global location verification provider to the $190 billion digital advertising industry, working in partnership with advertisers, media agencies and suppliers to reduce ad wastage and improve the effectiveness of location-based advertising campaigns.

The digital advertising marketplace remains unregulated and un-monitored, with an estimated $19 billion wasted on ad fraud in 2018.  Location data ad fraud is the supply of fake consumer location information to the agency and/or advertiser to exploit the high price of consumer location data in the programmatic advertising market. 

Location Sciences has developed Verify, the world's first independent location verification product, to tackle the global location ad fraud problem. Utilising sophisticated machine learning and pattern recognition technologies, Verify detects location ad fraud and highlights location data inaccuracy with the aim of bringing back integrity, transparency and trust to the market place.

Verify, which was launched on 25 May 2018 and has 136 brands in the UK, the United States, Australia and South Africa, is a cloud-based platform that uses machine learning and distribution analysis to identify location data ad fraud and inaccurate targeting of digital adverts.

Using Verify, advertisers and media agencies are able to gain independently authenticated insight into the accuracy and precision of their location-based advertising campaigns, as well as to detect fraud. This allows Verify customers to cut advertising budget wastage and improve performance of their location advertising campaigns.

In August 2019, Location Sciences published a report entitled "The State of Location Advertising". The report contained key insights and results based on approximately 500 million digital impressions in the UK and the US verified in the six months ended 30 June 2019 and has been widely picked up by media due to its robust findings, including that:

· 65 per cent. of advertising budgets are being wasted on mistargeted and poor-quality location data;

· 36 per cent. of GPS enabled applications were found to display location fraud; and

· only 14 per cent. of the impressions verified used GPS signals, by far the better signal for accuracy.

These results illustrate the huge need for transparency in the location advertising industry and the potential performance enhancement that can be achieved by implementing Verify.

The Company also announced the publication of its "State of Privacy and Location Marketing" report on 23 January 2020. An analysis of over two billion background location events found that, in the five weeks following the launch of iOS 13 at the end of September 2019, more than two thirds (68 per cent.) of iOS 13 users opted out of sharing their background (always on) location data. This impacts several key elements of the marketing toolkit, including audience quality, attribution and footfall confidence, multi-touch attribution, and dynamic creative optimisation. Location Sciences also observed a 24 per cent. drop in foreground (while using app) location data sharing, with fewer users only enabling apps to access their location when they are using them. The Directors believe that this significant decrease in quality location data is increasing the propensity to use poor quality location signals and/or commit fraud, which the Directors believe will drive the requirement for independent third party verification of location advertising campaigns.

On 15 January 2020, Location Sciences announced that it had sold its location data collection assets to X-Mode for a consideration of up to US$640,000 to be satisfied in cash. The consideration comprised an initial payment of up to US$180,000 with the balance to be paid monthly until December 2021. The total amount of the consideration payable is subject to the timing of the transfer of the data collection assets and certain performance criteria.

The partnership gives Location Sciences access to a significant pool of quality location data globally, which will help the Company broaden its insights customer base, while securing its status as the premier location insights company in the UK.

The deal allows Location Sciences to focus on Verify as its sole business going forward, positioning itself as a pure play location verification and insights company, while ensuring access to a significant pool of quality location data globally, giving the Company a distinct competitive advantage in the marketplace.

On 3 March 2020, the Company announced that it had entered into a global master service agreement with one of the largest global advertising holding companies. This followed the recent signing by the Company of a framework agreement with Horizon Media Inc., the world's largest independent media agency, which represents another significant step towards increased market adoption of location verification software.

The signing of the new global master service agreement follows multiple tests carried out in the fourth quarter of 2019 by certain advertising agencies within the advertising holding company's group using Verify. The Directors believe that signing the global master service agreement supports its strategy of pilot arrangements with advertising agencies thereby allowing customers to see the value of the Verify data and the significant improvements that can be made to performance.

3.  CURRENT TRADING AND PROSPECTS

The following statement was included in the Company's trading update announced on 15 January 2020:

"Location Sciences is pleased to announce strong progress in Q4 2019 and that it expects to report results for the year ended 31 December 2019 in line with market expectations. All figures in this trading update remain subject to audit.

"Trading highlights

• Revenues of approximately £1.2 million, up 60 per cent. (2018: £0.751 million)

• Revenues for Verify - Location Sciences' proprietary platform - up more than 9 times compared to 2018 (2018: £53,922)

• More than 100 brands are now using Verify

• Verify has been adopted globally by more 20 media agencies and suppliers

• More than one billion impressions verified to date

• Verify's Media Rating Council ("MRC ") accreditation process underway

• Year-end cash reserves c. £1.3 million

"In line with the refined strategy implemented by the Directors in the second half of 2019, measures were taken to reduce the overheads of the business and, consequently, EBITDA is expected to be significantly ahead of market expectations, which is reflected in the enhanced cash reserves at year end. "

4.  BACKGROUND TO, AND REASONS FOR, THE PLACING

The Company requires further funds to maintain its position in the UK location data and insights market and allow the Company to grow Verify, its location data verification product, both in the UK and overseas.

Accordingly, the Company is proposing to raise up to approximately £0.975 million (before expenses) through the Placing.

5.  USE OF NET PROCEEDS

The Company is seeking to deliver the potential of its Verify product globally, particularly in the United States, and expects to use the net proceeds of the Placing for the following purposes:

· US business development;

· product development; and

· general working capital purposes.

6.  THE PLACING

Details of the Placing

Subject to the satisfaction of the conditions under the Placing, the Company has conditionally raised approximately £0.975 million (before expenses) through the placing of 111,430,000 New Ordinary Shares at the Issue Price.

The Placing Shares, which are not subject to claw back, have been conditionally placed by the Joint Brokers with certain institutional and other investors. The Issue Price represents a discount of 37.5 per cent. to the closing mid-market price of 1.4 pence per Existing Ordinary Share on 5 March 2020 (being the last Business Day prior to the announcement of the Proposals). The Placing Shares will represent 22.7 per cent. of the Enlarged Share Capital.

The Placing is not underwritten.

The Placing is conditional, inter alia, upon:

(i)  the passing of the Resolutions;

(ii)  the Placing Agreement having become unconditional and not having been terminated in accordance with its terms prior to Admission; and

(iii)  Admission becoming effective by no later than 8.00 a.m. on 27 March 2020 or such later time and/or date (being no later than 5.00 p.m. on 9 April 2020) as Shore Capital and Peterhouse Capital and the Company may agree.

If any of the conditions in relation to the Placing are not satisfied (or waived), the Placing will not proceed, the Placing Shares will not be issued and all monies received from the Placees will be returned to them (at the Placees' risk and without interest) as soon as possible thereafter. 

The Placing Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, 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 the date of their issue.

Application will be made to the London Stock Exchange for the admission of the Placing Shares to trading on AIM, with dealings expected to commence at 8.00 a.m. on 27 March 2020.

The Placing Agreement

Pursuant to the Placing Agreement, the Joint Brokers have agreed to use their respective reasonable endeavours as agents of the Company to procure subscribers for the Placing Shares at the Issue Price.

The Placing Agreement sets out the conditions relating to the Placing. The Placing Agreement is conditional upon (amongst other things) the satisfaction of the following conditions:

a)  Admission taking place no later than 8.00 a.m. on 27 March 2020 (or such later time and/or date as the Company, Shore Capital and Peterhouse Capital may agree being no later than 5.00 p.m. on 9 April 2020);

b)  there being no material breach of warranty in the Placing Agreement prior to Admission;

c)  the performance by the Company of its obligations under the Placing Agreement prior to Admission; and

d)  the passing of the Resolutions at the General Meeting.

Under the Placing Agreement the Company has agreed to pay certain fees and commissions to Shore Capital and Corporate and the Joint Brokers and certain other costs and expenses in connection with the Placing and Admission.

The Company will bear all other expenses of, and incidental to, the Placing, including printing costs, Registrar's fees, all legal and accounting fees of the Company and of Shore Capital and Corporate and the Joint Brokers.

The Placing Agreement contains certain customary warranties and indemnities from the Company in favour of Shore Capital and Peterhouse Capital.

Shore Capital and Peterhouse Capital may terminate the Placing Agreement in certain circumstances, if, inter alia, the Company fails to comply with its obligations under the Placing Agreement; if there is a material adverse change in the financial position and/or prospects of the Group; or if there is a change in national or international financial, monetary, economic, political, environment or stock market conditions, which in the good faith opinion of Shore Capital and Peterhouse Capital will or is likely to be prejudicial to the Group or the Placing or Admission.

Settlement and dealings

The Placing Shares, when issued and fully paid, will rank pari passu in all respects with the New Ordinary Shares arising pursuant to the Sub-division, including the right to receive all dividends and other distributions declared, made or paid after Admission.

It is expected that Admission will become effective and dealings in the Placing Shares will commence at 8.00 a.m. on 27 March 2020.

7.  THE BROKER SHARES AND SETTLEMENT SHARES

Broker Shares

Peterhouse Capital will also be appointed as joint broker to the Company with effect from Admission. 

The Company has agreed that a proportion of Peterhouse Capital's annual fee for its services as joint broker to the Company will be applied by way of a subscription for the Broker Shares at the Issue Price. 

The Broker Shares will be issued conditional upon Admission and will rank pari passu in all respects with the New Ordinary Shares arising pursuant to the Sub-division, including the right to receive all dividends and other distributions declared, made or paid after Admission.

It is expected that admission of the Broker Shares will become effective and dealings in the Broker Shares will commence at 8.00 a.m. on 27 March 2020.

Settlement Shares

The Company has agreed to issue the Settlement Shares at the Issue Price in lieu of the payment of £20,000 of fees to one of its advisers in relation to the Placing.

The Settlement Shares will be issued conditional upon Admission and will rank pari passu in all respects with the New Ordinary Shares arising pursuant to the Sub-division, including the right to receive all dividends and other distributions declared, made or paid after Admission.

It is expected that admission of the Settlement Shares will become effective and dealings in the Settlement Shares will commence at 8.00 a.m. on 27 March 2020.

8.  THE SUB-DIVISION

The Existing Ordinary Shares have in recent months frequently been trading on AIM at a price very close to their nominal value of one penny per share. The issue of new shares by a company incorporated in England and Wales at a price below their nominal value is prohibited by the Act and, accordingly, the ability of the Company to undertake the Placing and other future fundraisings is restricted.

Accordingly, the Board is proposing a re-organisation of the Company's share capital that comprises a sub-division of the Existing Ordinary Shares that will create two classes of shares: New Ordinary Shares with a nominal value of 0.1 pence and New Deferred Shares with a nominal value of 0.9 pence.

The proportion of the issued ordinary share capital of the Company held by each Shareholder immediately before and after the Sub-division will remain unchanged.

The New Deferred Shares arising on completion of the Sub-division will be in addition to the Existing Deferred Shares, of which there are 1,040,712,398 in issue.

Shareholder approval is needed in order to effect the Sub-division. The Resolution to approve the Sub-division (being Resolution 1 in the Notice of General Meeting) must be passed by an ordinary resolution of Shareholders if the Sub-division is to become effective.

All entitlements under outstanding share options shall be recalculated accordingly as a result of the Sub-division.

Following the Sub-division, the ISIN code for the New Ordinary Shares will remain GB00BGT36S19 and the SEDOL code for the New Ordinary Shares will remain BGT36S1.

Immediately following the Sub-division (and before Admission), the issued share capital of the Company will be 376,651,734 New Ordinary Shares, 1,040,712,398 Existing Deferred Shares and 376,651,734 New Deferred Shares.

Rights of the New Ordinary Shares and the New Deferred Shares

Other than a change in nominal value, the New Ordinary Shares will have the same rights and be subject to the same restrictions as the Existing Ordinary Shares from which they will be derived. Following the Sub-division each Shareholder will hold one New Ordinary Share for every one Existing Ordinary Share held immediately before the Sub-division. The Sub-division will allow the Company to issue New Ordinary Shares, assuming that the share price of the Company does not fall below the 0.1 pence nominal value.

Other than a difference in nominal value, the New Deferred Shares will have the same rights as the Existing Deferred Shares.  The Directors consider that the New Deferred Shares will have no effect on the respective economic interests of Shareholders.

Like the Existing Deferred Shares (all of which will remain in issue), the New Deferred Shares will have no income or voting rights. The only right attaching to a New Deferred Share will be to receive the amount paid up on that New Deferred Share (i.e. 0.9 pence) on a winding-up of the Company or other return of capital once the holders of New Ordinary Shares have received the amount of £100,000,000 per New Ordinary Share.  The New Deferred Shares will effectively be valueless.

Like the Existing Deferred Shares, the New Deferred Shares will not be admitted to trading on AIM and will be non-transferable.

Admission of, and dealings in, the New Ordinary Shares

Application will be made for the New Ordinary Shares to be admitted to trading on AIM and, assuming that all of the Resolutions are passed by Shareholders, dealings in the Existing Ordinary Shares are expected to cease at the close of business on 26 March 2020 and dealings in the New Ordinary Shares are expected to commence at 8.00 a.m. on 27 March 2020.

UK tax

Based on current UK tax legislation, the Sub-division should not be treated as a disposal for the purposes of UK capital gains tax. The Sub-division should also not be treated as giving rise to any distribution for income tax purposes. After the Sub-division, the base cost of Existing Ordinary Shares for the purposes of UK capital gains tax should be apportioned between the resulting New Ordinary Shares. If you are in any doubt as to your personal tax status or the effect for tax purposes of the Proposals, you should consult your own professional adviser.

Share certificates

The New Ordinary Shares will be in registered form and may be held in certificated or uncertificated form. Following the Sub-division becoming effective, existing share certificates will continue to be valid. No share certificates will be issued in respect of the New Deferred Shares.

9.  GENERAL MEETING

The Proposals are conditional upon, inter alia, the passing of the Resolutions. You will find set out at the end of the Circular a notice convening the General Meeting to be held at the Company's registered office at 20 Eastbourne Terrace, Paddington, London, W2 6LG on 26 March 2020 at 11.00 a.m. at which the following resolutions will be proposed as ordinary or special resolutions as indicated below:

1.  to approve the Sub-division (ordinary resolution);

2.  to authorise the Directors to allot the Placing Shares in connection with the Placing, the Broker Shares and the Settlement Shares (ordinary resolution); and

3.  to waive the statutory pre-emption rights in respect of the allotment of equity securities pursuant to the Placing, including the Placing Shares in connection with the Placing, the Broker Shares and the Settlement Shares (special resolution).

Resolution 1 approves the Sub-division, comprising the sub-division of the Existing Ordinary Shares into two classes of shares: New Ordinary Shares with a nominal value of 0.1 pence and New Deferred Shares with a nominal value of 0.9 pence.

Resolution 2 authorises the Directors to allot the Placing Shares, the Broker Shares and the Settlement Shares in accordance with section 551 of the Act. The authority granted by the resolution will expire on 30 June 2020.

Resolution 3 will give the Directors power, pursuant to the authority to allot granted by Resolution 2, to allot the Placing Shares, the Broker Shares and the Settlement Shares for cash otherwise than on a pre-emptive basis to the Company's Shareholders. The authority granted by the resolution will expire on 30 June 2020.

Shareholders should note that the Resolutions are inter-conditional. This means that if any one of the Resolutions is not approved, the other Resolutions will also not be passed and the Proposals will not complete.

As the Placing is conditional, inter alia, upon the passing of the Resolutions, Shareholders should be aware that, if the Resolutions are not passed, the proceeds of the Placing will not be received by the Company. In such circumstances, the Company would need urgently to pursue additional or alternative funding sources which, if they are available at all, may be expensive and/or onerous for the Company and/or asset sales or part sales.

10.  ACTION TO BE TAKEN IN RESPECT OF THE GENERAL MEETING

Shareholders will find accompanying the Circular a Form of Proxy for use in connection with the General Meeting. The Form of Proxy should be completed and returned in accordance with the instructions thereon so as to be received by Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY as soon as possible and in any event not later than 11.00 a.m. on 24 March 2020.

If you hold your Existing Ordinary Shares in uncertificated form in CREST, you may vote using the CREST Proxy Voting Service in accordance with the procedures set out in the CREST Manual. Further details will be set out in the notes accompanying the Notice of General Meeting at the end of the Circular. Proxies submitted via CREST must be received by Computershare ( CREST participant ID 3RA50) by no later than 11.00 a.m. on 24 March 2020 (or, if the General Meeting is adjourned, 48 hours (excluding any part of a day that is not a working day) before the time fixed for the adjourned meeting).

Completion and return of the Form of Proxy or the use of the CREST Proxy Voting Service will not prevent a Shareholder from attending and voting at the General Meeting should he/she/it so wish.

11.  RECOMMENDATION

The Directors believe that the Proposals are in the best interests of the Company and its Shareholders as a whole.

In addition, the Directors recommend that Shareholders vote in favour of the Resolutions. The Directors intend to vote in favour of the Resolutions in respect of, in aggregate, 10,244,332 Existing Ordinary Shares, representing approximately 2.7 per cent. of the Company's issued share capital.

DEFINITIONS

The following definitions apply throughout this announcement, unless the context requires otherwise:

"Act"	the Companies Act 2006 (as amended)
"Admission"	admission of the New Ordinary Shares (including the Placing Shares) to trading on AIM in accordance with the AIM Rules
"AIM"	the market of that name operated by the London Stock Exchange
"AIMRules"	the AIM Rules for Companies and guidance notes, as published from time to time by the London Stock Exchange (as amended from time to time)
"Board" or"Directors"	the directors of the Company
"Broker Shares"	1,142,857 New Ordinary Shares being issued to Peterhouse Capital as part-payment for its joint broker services to the Company
"BusinessDay"	any day (other than a Saturday, Sunday or public holiday) upon which commercial banks are open for business in London, UK
"certificated" or "incertificatedform"	where a share is not in uncertificated form (i.e. not in CREST)
"Company" or "Location Sciences"	Location Sciences Group plc, a public limited company incorporated in England and Wales under registered number 06458458 and having its registered office at 20 Eastbourne Terrace, Paddington, London W2 6LG
"CREST"	the relevant system (as defined in the CREST Regulations) operated by Euroclear which facilitates the transfer of title to shares in uncertificated form
"CRESTManual"	the CREST Manual referred to in agreements entered into by Euroclear and available at www.euroclear.com
"CRESTmember"	a person who has been admitted to CREST as a system-member (as defined in the CREST Regulations)
"CRESTparticipant"	a person who is, in relation to CREST, a system-participant (as defined in the CREST Regulations)
"CRESTparticipantID"	shall have the meaning given in the CREST Manual
"CRESTRegulations"	the Uncertificated Securities Regulations 2001 (SI 2001/3755) including any enactment or subordinate legislation which amends or supersedes those regulations and any applicable rules made under those regulations or any such enactment or subordinate legislation for the time being in force
"CRESTsponsor"	a CREST participant admitted to CREST as a CREST sponsor
"CRESTsponsoredmember"	a CREST member admitted to CREST as a CREST sponsored member
"EnlargedShareCapital"	the entire issued ordinary share capital of the Company immediately on Admission following completion of the Proposals
"Euroclear"	Euroclear UK & Ireland Limited
"Existing Deferred Shares"	the existing deferred shares of 0.99 pence each in the capital of the Company in issue at the date of this announcement
"Existing OrdinaryShares"	the existing ordinary shares of one penny each in the capital of the Company in issue at the date of this announcement
"FCA"	the Financial Conduct Authority of the United Kingdom
"Form of Proxy"	the form of proxy accompanying the Circular for use at the General Meeting
"FSMA"	the Financial Services and Markets Act 2000 (as amended)
"Group"	the Company and its subsidiaries (as defined in the Act)
"General Meeting"	the general meeting of the Company, notice of which will be set out at the end of the Circular
"IssuePrice"	0.875 pence, being the issue price per New Ordinary Share of the Placing Shares, the Broker Shares and the Settlement Shares
"Joint Brokers"	Shore Capital Stockbrokers and Peterhouse Capital
"LondonStockExchange"	London Stock Exchange plc
"New Deferred Shares"	the new deferred shares of 0.9 pence each in the capital of the Company arising on completion of the Sub-division
"New OrdinaryShares"	the new ordinary shares of 0.1 pence each in the capital of the Company arising on completion of the Sub-division
"Notice of General Meeting"	the notice of General Meeting which will be set out at the end of the Circular
"Peterhouse Capital"	Peterhouse Capital Limited, to be appointed as joint broker to the Company immediately following Admission
"Placees"	subscribers for Placing Shares
"Placing"	the conditional Placing by the Joint Brokers on behalf of the Company of the Placing Shares with certain institutional and other investors, otherwise than on a pre-emptive basis, at the Issue Price
"PlacingAgreement"	the agreement entered into between the Company, Shore Capital and Corporate and the Joint Brokers in respect of the Placing dated 6 March 2020
"Placing Shares"	the 111,430,000 New Ordinary Shares the subject of the Placing
"Prospectus Regulation Rules"	the Prospectus Regulation Rules made by the FCA in accordance with the EU Prospectus /Regulation 2017/1129
"Proposals"	the proposed Sub-division, the Placing and the issue of the Placing Shares, the issue of the Broker Shares and the Settlement Shares and Admission
"Registrar" or "Computershare"	Computershare Investor Services PLC, a public limited company incorporated in England and Wales under registered number 03498808 and having its registered office at The Pavilions, Bridgwater Road, Bristol, BS13 8AE, the Company's registrar
"Regulatory Information Service"	has the meaning given to it in the AIM Rules
"Resolutions"	the resolutions to be proposed at the General Meeting as set out in the Notice of General Meeting
"RestrictedJurisdiction"	United States, Canada, Australia, the Republic of South Africa, Japan or New Zealand and any other jurisdiction where the extension or availability of the Placing would breach any applicable law
"SecuritiesAct"	US Securities Act of 1933 (as amended)
"Settlement Shares"	2,285,714 New Ordinary Shares being issued to an adviser of the Company in relation to the Placing
"Shareholders"	the holders of Existing Ordinary Shares, and the term "Shareholder" shall be construed accordingly
"Shore Capital"	Shore Capital and Corporate and/or Shore Capital Stockbrokers, as the context permits
"Shore Capital and Corporate"	Shore Capital and Corporate Limited
"Shore Capital Stockbrokers"	Shore Capital Stockbrokers Limited
"Sub-division"	the sub-division of the Existing Ordinary Shares into New Ordinary Shares and New Deferred Shares as detailed in this announcement
"uncertificated" orin "uncertificatedform"	recorded on the relevant register or other record of the shares or other security concerned 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, each State thereof (including the District of Columbia), its territories, possessions and all areas subject to its jurisdiction
"X-Mode"	X-Mode Social, Inc.
"£", "pound" and"pence	pounds and pence sterling respectively, being the lawful currency of the United Kingdom

 

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