Proposed acquisition of Haemostatix Limited

RNS Number : 2397X

Ergomed plc

04 May 2016

 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, NEW ZEALAND, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION IS PROHIBITED.

Ergomed plc

Proposed acquisition of Haemostatix Limited

Conditional placing of 6,433,350 Initial Placing Shares at 140 pence each

Conditional placing of up to 2,875,000 Option Shares at 140 pence each

and

Notice of General Meeting

London, UK 04 May 2016:  Ergomed plc, ("Ergomed" or the "Company", AIM: ERGO) a profitable UK-based group dedicated to the provision of specialised services to the pharmaceutical industry and the development of new drugs, today announces the proposed acquisition of Haemostatix Limited ("Acquisition"), a company focused on developing a pipeline of topical products to treat surgical bleeding (coagulants or 'haemostats').

Ergomed is acquiring 100 per cent. of the issued share capital of Haemostatix for an initial consideration of £8.0 million, with further success and sales based payments of up to £20.0 million.

The Company also announces a conditional placing of 6,433,350 Initial Placing Shares at a price of 140 pence per share to raise £9.0 million, before expenses and has also granted the Option to each of the Joint Bookrunners under the Placing Agreement in order to enable them to deal with additional demand under the Placing. The maximum number of Option Shares that may be issued pursuant to the exercise of the Option is 2,875,000. Including the Option, the Placing will consist of up to 9,308,350 Placing Shares at a price of 140 pence per share to raise up to £13.0 million, before expenses.

The net proceeds of the Placing will be used to fund the initial cash consideration and debt repayments as part of the Acquisition, to advance Haemostatix's two lead products and to provide capital for further bolt on acquisitions of services businesses.

A General Meeting, to approve the necessary resolutions for the issue and allotment of the Placing Shares and to permit disapplication of pre-emption rights is to be convened for 11.00 a.m. on Monday 23 May 2016 at the offices of Covington & Burling LLP, 265 Strand, London WC2R 1BH.

Miroslav Reljanovic MD, Chief Executive Officer of Ergomed plc, said:  

"The Haemostatix acquisition provides an opportunity to advance the Co-development part of our growth strategy through the development of our first wholly-owned development programme.  We have confidence from the current pre-clinical and clinical data that the Haemostatix technology works as an effective haemostat. This, combined with the rapid development and attractive market size, means the acquisition offers great upside potential for Ergomed."

"Ergomed intends to continue building a sustainable and profitable hybrid business model through bolt on acquisitions and growth opportunities in its Services business as well as progressing its Co-development pipeline." 

Ben Nichols, Chief Executive Officer of Haemostatix, commented:

"I am delighted to be working with Ergomed. With the deep expertise of Ergomed's clinical development team and its global infrastructure, I believe we can accelerate Haemostatix's development programmes for the benefit of all stakeholders. PeproStat^TM and ReadyFlow^TM are both innovative products that have the potential to capture a meaningful share of a $2 billion-plus global market."

Highlights of the Acquisition of Haemostatix and Placing:

·      Proprietary platform focused on synthetic peptide-based haemostats for use in surgical applications

o  Targeted at the global surgical bleeding market of more than $2.5 billion

o  Rapid and relatively low cost development programme; market launch expected 2020

o  Overcomes disadvantages of current blood products which require preparation prior to use, are derived from blood and can take several minutes to act

·      Two lead products:

o  PeproStat^TM - Phase IIb ready  - a blood-free, ready-to-use topical liquid haemostat which is applied to wounds to control bleeding during surgery

o  ReadyFlow^TM - late pre-clinical - a blood-free, ready to use, transparent and flowable haemostatic gel packaged in a pre-filled syringe that can be applied to irregular bleeding sites or where observation of the closure or wound is advantageous

·      Up to £28.0 million total consideration:

o  £8.0 million at close; of which £6.2 million paid through Consideration Shares at the Issue Price

o  Milestones of up to £4.0 million at start of Phase III (provided the Company's market capitalisation exceeds £100.0 million); plus £16.0 million sales-based milestone payments

o  An additional sum in the event that the Enlarged Group is able to utilise certain existing tax losses that are currently available to Haemostatix

·      Placing of the Initial Placing Shares to raise £8.4 million (net of expenses):

o  £1.8 million for the initial cash component of the Acquisition consideration (which includes the Haemostatix Loan of £1.0 million) and £5.0 million for the future development of Haemostatix products

o  Balance of proceeds (up to £5.6 million if the maximum number of Option Shares are issued) earmarked for acquisition of complementary services businesses to supplement the Company's own cash resources

·      Intention for Ergomed to remain profitable at the EBITDA level

·      The Company has also granted the Option to each of the Joint Bookrunners under the Placing Agreement in order to enable them to deal with additional demand under the Placing in the event that requests to participate in the Placing from institutional and certain other investors are received during the period from the date of this announcement to 5.00 p.m. on Friday 13 May 2016. Any Option Shares issued pursuant to the exercise of the Option will be issued on the same terms and conditions as the Initial Placing Shares. The maximum number of Option Shares that may be issued pursuant to the exercise of the Option is 2,875,000.

Definitions

The capitalised terms used in this Announcement have the meaning set out in the Appendix 2 to this Announcement.

Enquiries:

Stifel Nicolaus Europe Limited	Tel:  [phone]
(Nominated Adviser and Joint Broker) Jonathan Senior / Stewart Wallace
Numis
(Joint Broker) Michael Meade / James Black	Tel: [phone]
FTI Consulting	Tel:  [phone]
Simon Conway / Mo Noonan / Natalie Garland-Collins

About Ergomed

Ergomed plc is a profitable UK-based business providing drug development services to the pharmaceutical industry and has a growing portfolio of co-development partnerships. It operates in over 50 countries. 

Ergomed provides clinical development, trial management and pharmacovigilance services to over 80 clients ranging from top 10 pharmaceutical companies to small and mid-sized drug development companies. Ergomed successfully manages clinical development from Phase I through to late phase programmes.

Ergomed has a wide therapeutic focus, with a particular expertise in oncology, neurology and immunology and the development of orphan drugs. Ergomed believes its approach to clinical trials is differentiated from that of other providers by its innovative Study Site Management model and the use of Study Physician Teams, resulting in a close relationship between Ergomed and the physicians involved in clinical trials.

As well as providing high quality clinical development services, Ergomed is building a portfolio of co-development partnerships with pharma and biotech companies which share the risks and rewards of drug development. Ergomed leverages its expertise and services in return for carried interest in the drugs under development.  For further information, visit: http://ergomedplc.com

About Haemostatix

Haemostatix has pioneered a new approach to controlling bleeding that is based on a peptide that binds to the protein fibrinogen thereby inducing rapid blood clotting. This innovative technology platform is being used to develop a pipeline of topical products to treat surgical bleeding with further applications in trauma, tissue repair and regenerative medicine.

Haemostatix was originally a spin-out from the University of Leicester founded by industry veteran Sarah Middleton and Professor Alison Goodall. The Company has been funded by Albion Ventures, Catapult Ventures, NESTA, Lachesis, Esperante and the Wellcome Trust. The business has been managed by industry veterans Dr Ben Nichols, CEO and Dr Robert Burns, Chairman. The lead products were invented by Haemostatix's scientists Dr Greg Walker and Dr Renata Zbozien.

IMPORTANT NOTICES

Stifel Nicolaus Europe Limited ("Stifel"), which is authorised and regulated by the UK Financial Conduct Authority, is acting as nominated adviser and joint bookrunner exclusively to the Company and will not be responsible to any person other than the Company for providing the protections afforded to its customers or for advising any other person on the contents of this Announcement or any transaction or arrangement referred to herein. Stifel has not authorised the contents of any part of this Announcement for the purposes of the AIM Rules. The responsibilities of Stifel as the Company's nominated adviser and joint bookrunner under the AIM Rules are owed solely to the London Stock Exchange and are not owed to the Company or any Director, Shareholder or any other person in respect of a decision to subscribe for Shares in the Company. Stifel is not making any representation or warranty, express or implied, as to the contents of this document.

Numis Securities Limited ("Numis"), which is authorised and regulated by the UK Financial Conduct Authority, is acting as joint bookrunner to the Company and will not be responsible to any person other than the Company for providing the protections afforded to its customers or for advising any other person on the contents of this Announcement or any transaction or arrangement referred to herein. Numis has not authorised the contents of any part of this Announcement for the purposes of the AIM Rules.

Forward Looking Statements

Certain statements contained within the announcement are forward looking statements and are based on current expectations, estimates and projections about the potential returns of Ergomed plc ("Ergomed") and industry and markets in which Ergomed operates, the Directors' beliefs and assumptions made by the Directors. Words such as "expects", "anticipates", "should", "intends", "plans", "believes", "seeks", "estimates", "projects", "pipeline" and variations of such words and similar expressions are intended to identify such forward looking statements and expectations. These statements are not guarantees of future performance or the ability to identify and consummate investments and involve certain risks, uncertainties, outcomes of negotiations and due diligence and assumptions that are difficult to predict, qualify or quantify. Therefore, actual outcomes and results may differ materially from what is expressed in such forward looking statements or expectations. Among the factors that could cause actual results to differ materially are: the general economic climate, competition, interest rate levels, loss of key personnel, the result of legal and commercial due diligence, the availability of financing on acceptable terms and changes in the legal or regulatory environment.

These forward-looking statements speak only as of the date of this announcement. Ergomed expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in Ergomed's expectations with regard thereto, any new information or any change in events, conditions or circumstances on which any such statements are based, unless required to do so by law or any appropriate regulatory authority.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Announcement of the Acquisition and the Placing	Wednesday 04 May 2016
Posting of the Circular and Form of Proxy	in due course
Latest time to exercise Option by either of the Joint Bookrunners	5.00 p.m. on Friday 13 May 2016
Latest time and date for receipt of Forms of Proxy	11.00 a.m. on Thursday 19 May 2016
General Meeting	11.00 a.m. on Monday 23 May 2016
Results of General Meeting announced through RNS	Monday 23 May 2016
Expected Completion, Admission and commencement of dealings in New Ordinary Shares	8.00 a.m. Tuesday 24 May 2016
New Ordinary Shares to be held in uncertificated form credited to CREST stock accounts	Tuesday 24 May 2016
Dispatch of definitive share certificates for New Ordinary Shares to be held in certificated form expected to be no later than	Tuesday 31 May 2016

Note: Each of the times and dates above is subject to change. References to time and day are to time in London, United Kingdom, unless otherwise stated.

PLACING STATISTICS

Placing
Issue Price	140 pence
Number of Existing Ordinary Shares in issue	28,750,000
Number of Initial Placing Shares	6,433,350
Gross proceeds of the Initial Placing	approximately £9.0 million
Estimated proceeds receivable by the Company pursuant to the Initial Placing, net of expenses	approximately £8.4 million
Maximum number of Option Shares	2,875,000
Gross proceeds of the Placing (assuming the maximum number of Option Shares are issued)	£13,031,690
Estimated proceeds receivable by the Company pursuant to the Placing, net of expenses (assuming the maximum number of Option Shares are issued)	approximately £12.3 million
Acquisition
Initial consideration payable	approximately £8.0 million
Value of Consideration Shares to be issued to the Sellers	approximately £6.2 million
Number of Consideration Shares to be issued to the Sellers	4,415,051
Value of Deferred Consideration	up to £20,000,000
Upon Admission
Number of Ordinary Shares in issue immediately following Admission (assuming no Option Shares are issued)	39,598,401
Number of New Ordinary Shares as a percentage of the Enlarged Share Capital (assuming no Option Shares are issued)	27.4 per cent.
Number of Ordinary Shares in issue immediately following Admission (assuming the maximum number of Option Shares are issued)	42,473,401
Number of New Ordinary Shares as a percentage of the Enlarged Share Capital (assuming the maximum number of Option Shares are issued)	32.3 per cent.

Background to the Acquisition and Placing

Ergomed continues to seek opportunities to create significant shareholder value, drawing upon the experience and expertise it has accumulated during its 16 years in business as a contract research organisation ('CRO').

Ergomed's growth strategy has two principal components:

i.    Augmenting the organic growth of its services business with selective acquisitions to add complementary services and/ or geographical coverage to its current offering

ii.    Enhancing its co-development portfolio by including deals which (a) mirror the existing investment/ risk profile but (b) in addition include deals which allow Ergomed to control both the development plan and monetisation of the product with the expectation of a greater share of the upside in return for bearing more of the development costs

The acquisition of Sound Opinion in May 2015 demonstrated the first component in practice. Today's announcement of the acquisition of Haemostatix is a major advancement of the second component. It is important to note that both components of the growth strategy will be pursued in parallel and it is our intention that overall Ergomed remains profitable at the EBITDA level.

Acquisition of Haemostatix

 

Haemostatix is a drug development company with an innovative technology platform and a pipeline of topical products to treat surgical bleeding (coagulants or 'haemostats').

The Haemostatix acquisition presents an opportunity to develop Ergomed's co-development business and a logical extension of its well established commitment to co-development, with the potential to generate significant value. Discussions initially began regarding a co-development partnership but once the Ergomed due diligence team had assessed the potential, it was concluded that an outright acquisition of Haemostatix, its platform technology and two lead products, could yield attractive returns for shareholders with an acceptable development risk. This conclusion was based on the belief that, somewhat unusually in the industry, Haemostatix's lead candidate products combine relatively fast and low cost development programmes with attractive market potential.

Nevertheless, like all products of this nature, development is not without risk and Ergomed has therefore negotiated terms whereby more than 70 per cent. of the consideration is contingent on successful development and marketing of Haemostatix products. The Sellers are also receiving approximately 80 per cent of their initial consideration in Consideration Shares with an issue price of 140 pence per Consideration Share.

Further details of the Acquisition, including the consideration and key terms, are described below.

Placing and use of proceeds

 

Alongside today's announcement of the Haemostatix acquisition, the Company has also announced a Placing of 6,433,350 Initial Placing Shares at a price of 140 pence per Initial Placing Share to raise £9.0 million (before expenses).

 

The Placing is conditional, inter alia, on the passing by Shareholders of the Resolutions at the General Meeting, which will give the Directors the required authority to allot and issue the Placing Shares pursuant to the Placing by disapplying pre-emption rights. Subject to all relevant conditions being satisfied (or, if applicable, waived), it is expected that both the Placing Shares and Consideration Shares will be issued and admitted to trading on AIM on 8.00 a.m. on Tuesday 24 May 2016.

 

The Company has also granted the Option to each of the Joint Bookrunners under the Placing Agreement in order to enable them to deal with additional demand under the Placing in the event that requests to participate in the Placing from institutional and certain other investors are received during the period from the date of this Announcement to 5.00 p.m. on Friday 13 May 2016.

 

The Option is exercisable on more than one occasion at any time prior to 5.00 p.m. on Friday 13 May 2016. Any Option Shares issued pursuant to the exercise of the Option will be issued on the same terms and conditions as the Initial Placing Shares. The Option may be exercised by either or both of the Joint Bookrunners, following consultation with the Company, but there is no obligation on them to exercise the Option or to seek to procure subscribers for Option Shares pursuant to the Option. The maximum number of Option Shares that may be issued pursuant to the exercise of the Option is 2,875,000. The maximum number of Placing Shares (including both the Initial Placing Shares and the Option Shares) that may be issued pursuant to the Placing is 9,308,350.

 

The Company has convened a General Meeting for 11.00 a.m. on Monday 23 May 2016, to seek approval of the necessary Resolutions for the issue and allotment of the Placing Shares pursuant to the Placing.

 

The Company intends to use the net proceeds of the Placing to implement both components of its aforementioned strategy, including:

 

·              Funding the £0.8 million initial cash component of the Acquisition consideration

·              £1.0 million to allow Haemostatix to repay certain agreed third party indebtedness

·              Completion of the Phase IIb PeproStat™ clinical trial

·              Chemistry, manufacturing and controls ('CMC') process development for PeproStat™

·              Pre-clinical development of ReadyFlow^TM preparing it to be ready for its first clinical trial

·             The provision of capital for further bolt-on acquisitions of services businesses, with several near term opportunities identified

 

Information on Haemostatix and its markets

 

Overview

 

Founded in 2003, Haemostatix has a management team with proven experience in product development and commercialisation. Consequently, as part of the Acquisition, it is the intention that the Haemostatix management team and its support staff will all be fully integrated into the Ergomed team.

 

The surgical bleeding market is estimated to be worth approximately $2.5 billion and is growing at six per cent. per annum (Source: MedMarket Diligence). It is comprised of a variety of drugs and devices ('haemostats'), some which work simply by closing the wound to stop blood flow, thereby giving time for the body's own clotting system to work. Other products supplement the body's naturally occurring proteins and enzymes to promote clot formation.

 

The market is segmented by type of bleed, surgery and product. To address this broad market, Haemostatix has developed a platform technology which can generate different products to address the various segments, thereby accessing a significant portion of the total 'haemostat' market.

 

In addition, the current blood clotting products on the market have a number of drawbacks:

 

·    Derived from blood: they are derived from human donor blood or from animal sources, which have the theoretical risk of infection and a complex supply chain

·       Require preparation or reconstitution: they are typically either frozen or in powder form and therefore require preparation prior to use, which, in an acute situation, is an obvious disadvantage. Moreover, prior preparation can lead to wastage as bleeding is often unpredictable

·       Slow speed of action: some are relatively ineffective or can take a long time to work

 

The Directors believe that the products under development by Haemostatix overcome these disadvantages. In addition, Haemostatix's products are planned to have a low cost of production, potentially allowing a pricing advantage over some existing products.  The Directors estimate the market potential for its two lead products to be in excess of $100.0 million each. Individual brands of thrombin-based products have sales in excess of $200.0 million each.

 

To date, more than £8.0 million has been invested in the Haemostatix platform that is based on a peptide that binds to a clotting protein sequence. The Company discovered that when the peptide attached to a carrier protein was applied directly to the site of a bleed, it bound to one of the key endogenous proteins (fibrinogen) that controls bleeding, to rapidly form a clot in a targeted fashion. This peptide currently forms the basis of Haemostatix's two lead products (protected by patent applications) and the Directors believe it has the potential to form the basis for other products, which could create further interest from potential licensing partners.

 

Significantly, the lead product PeproStat^TM has successfully completed a first-in-man clinical study, an important milestone that indicated that the product can be safe and effective in humans. The Directors believe that the results of this trial significantly decrease the development risk associated with PeproStat^TM. A product at this stage also fits well with Ergomed's core expertise of transitioning products from discovery to development.

 

In the year ended 31 March 2015, Haemostatix had no revenues, an operating loss of £1.20 million and gross assets of £0.25 million.

 

The pipeline

 

The Haemostatix pipeline comprises of one clinical candidate and one pre-clinical candidate as well as a number of research programmes.

 

PeproStat™

 

The Directors believe that the lead product, PeproStat™, overcomes the major drawbacks of existing products; namely that the active pharmaceutical ingredient ('API') is manufactured from blood-free components, is formulated as a ready-to-use solution (applied with commercially available sponges) and acts rapidly.

 

Following authorisation from the UK authorities who govern medical research ('MHRA'), PeproStat™ Liquid has been evaluated in a Phase I clinical trial at four hospitals in the UK involving 20 patients. The trial was conducted in liver surgery patients and completed at the end of 2015. Most importantly, the study demonstrated that PeproStat™ was safe to use. It also showed that during surgery, 95 per cent. of bleeding was stopped within three minutes, and on average in 1.4 minutes. This compares with the thrombins that are on the market that claim to stop bleeding in between three to six minutes.

 

The next development step (a Phase II study) will be to repeat the trial described above in a larger population and in four different surgical indications. The Phase II proof-of-concept trial, which is expected to begin in 2017, will be conducted in about 120 patients, which the Directors' estimate will cost £5.0 million. Given that the effect of the product can be observed immediately (that is, the bleeding either stops or it does not), and with a patient follow-up of one month, the trials can be finished rapidly. The Phase II trial expected to take approximately 12 months to complete.

 

A dialogue with European and US regulators has commenced, indicating a well understood development pathway for PeproStat™, which is modest in size and cost. All these features make PeproStat™ an ideal product for Ergomed.

 

The final development step (a Phase III study) will be to run a larger trial in approximately 600 patients at an estimated cost of £10.0 million. The Directors believe that, subject to positive results from the Phase III trial, a regulatory filing for PeproStat^TM would be expected in 2019 with product commercialisation in 2020.

 

ReadyFlow™

 

Haemostatix's second product candidate, ReadyFlow™, is a ready-to-use, transparent, haemostatic gel that can be applied to bleeding sites where the surface is not accessible or uneven. ReadyFlow™ gel is pre-mixed with the potent peptide-based active and packaged in a pre-filled syringe. Unlike competing products, ReadyFlow^TM is transparent, manufactured from blood-free and animal-free components and has demonstrated a rapid and effective action.  ReadyFlow^TM is expected to enter Phase I clinical trials in 2018. Pre-clinical studies of ReadyFlow^TM indicate over 85 per cent. of stronger bleeds would be controlled within one minute of compression.

 

In addition to the two products above, Haemostatix has an active research programme involving the conjugation of the coagulant peptide to a range of materials with potential applications in trauma, other surgical applications and regenerative medicine. The wider portfolio could make in-licensing of the lead products more attractive to pharmaceutical companies.

 

Details of the Acquisition

 

The Company is acquiring 100 per cent. of the issued share capital of Haemostatix on a cash free/debt free basis for an initial consideration of £7.0 million to be satisfied by the payment of £0.8 million in cash and by the issue of the Consideration Shares, representing a value of £6.2 million.  The Company has also agreed to advance to Haemostatix the Haemostatix Loan (£1.0 million). The initial consideration of £7.0 million together with proposed £1.0 million advance of the Haemostatix Loan approximately represents the cash that has previously been invested in the business.

 

In addition, contingent consideration of up to £20.0 million is payable, based on the achievement of certain milestones and sales targets, as set out in further detail below. 

 

Finally, the Company has agreed to pay an additional sum in the event that the Enlarged Group is able to utilise certain existing tax losses that are currently available to Haemostatix.

 

The Company has agreed that additional consideration of up to £4.0 million will be paid to the Sellers on the first dosing of the first patient in the first Phase III Trial of a Haemostatix product (the "Phase III Milestone") provided that the Company has a market capitalisation of £150.0 million or more (the "Higher Market Capital Threshold").  If the Higher Market Capital Threshold has not been achieved, but a threshold of £100.0 million has been met on the date that the milestone is achieved (the "Lower Market Capital Threshold") then the Company will pay £2.0 million of additional consideration with the balance due when the Higher Market Capital Threshold is achieved.  No milestone will be paid until at least the Lower Market Capital Threshold has been met after the announcement of the Phase IIb data. The additional consideration may be satisfied at the Company's discretion either in cash, or loan notes, or by the issue of further Ordinary Shares issued at a price equal to the mid-market price of an Ordinary Share for the 20 business day period up to the day before satisfaction of the development milestone.

 

The Company has also agreed that additional consideration will be payable upon the achievement of net sales (as defined in the Acquisition Agreement) of up to two Haemostatix existing candidate products first exceeding $10.0 million (the "Initial Commercial Milestones"). The additional consideration payable on the achievement of the Initial Commercial Milestones, is expected to be approximately £8.0 million and may be satisfied by either the issue of further Ordinary Shares issued at a price equal to the average mid-market price of an Ordinary Share for the 20 business day period up to the day before satisfaction of the relevant Initial Commercial Milestone, or by the payment of cash or loan notes.

 

Further payments will become due when net sales of up to two of the Haemostatix existing candidate products exceed cumulative sales of $100.0 million and of $200.0 million (the "Further Commercial Milestones"). To the extent that the Further Commercial Milestones are achieved it is expected that the Company will pay to the Sellers additional consideration of approximately £8.0 million in cash or loan notes.

 

The Acquisition is conditional, inter alia, upon the passing of the Resolutions and Admission.

 

The Acquisition Agreement includes commercial and tax warranties from certain Sellers in favour of the Company.  A separate tax indemnity in respect of tax liabilities arising pre or on Completion has also been given by certain Sellers.  Claims under the warranties and indemnities are subject to certain financial thresholds and caps and in the case of warranties are subject to matters fairly disclosed which are customary for a transaction of this nature.  £0.8 million in cash, forming part of the Initial Consideration payable at Completion, will be paid into an escrow account and may be used to meet any successful warranty or indemnity claims.

 

Each Seller has agreed, subject to normal market exceptions, to a lock up of the Initial Consideration Shares held by such Seller as follows: 

 

(a)     one third of the Initial Consideration Shares issued to each Seller on Completion, until the date that is six months from Completion, and in respect of which each Seller agrees, for a period of nine months thereafter to dispose of only through the Buyer's broker as appointed from time to time; and

(b)     one third of the Initial Consideration Shares issued to each Seller on Completion, until the date that is twelve months from Completion and in respect of which each Seller agrees, for a period of six months thereafter to dispose of only through the Buyer's broker as appointed from time to time; and

(c)     one third of the Initial Consideration Shares issued to each Seller on Completion, until the date that is eighteen months from Completion and in respect of which each Seller agrees, for a period of three months thereafter to dispose of only through the Buyer's broker as appointed from time to time. 

 

The Sellers of Haemostatix include its founders and various private equity funds who have provided investment capital to the business.

 

Details of the Placing and the Placing Agreement

 

The Placing

 

The Company has conditionally raised £9.0 million (before expenses) through the Initial Placing and is proposing to raise up to a further £4.0 million (before expenses) by way of a conditional, non pre-emptive, Placing of Option Shares at the Issue Price, through the Option.  The Placing therefore comprises the issue of the 6,433,350 Initial Placing Shares and the granting by the Company of the Option to each of the Joint Bookrunners pursuant to which a maximum further 2,875,000 Option Shares may be issued.  The Issue Price represents a discount of approximately 2.8 per cent. from the mid-market closing price of 144 pence per Ordinary Share on 03 May 2016, being the last practicable dealing date prior to this Announcement. 

 

The Placing Shares will be issued credited as fully paid and will be identical to and rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all future distributions declared, paid, or made in respect of the Ordinary Shares following the date of Admission.

 

The Placing Agreement

 

On 04 May 2016, the Company, Stifel and Numis entered into the Placing Agreement, pursuant to which the Company appointed Stifel and Numis as its agents to use their respective reasonable endeavours to procure subscribers for the Initial Placing Shares at the Issue Price. The Placing is not being underwritten by either of the Joint Bookrunners. The Company has agreed to pay Stifel and Numis certain commissions and fees in connection with their appointments.

 

The Placing is conditional, amongst other things, on:

 

·      the passing of the Resolutions to be proposed at the General Meeting;

·    the Acquisition Agreement having become unconditional in all respects (other than in relation to any condition relating to the Placing Agreement and Admission); and

·    Admission of the Placing Shares occurring on or before 8.00 a.m. on Tuesday 24 May 2016 (or such later time and/or date as Stifel, Numis and the Company may agree, being not later than 8.00 a.m. on Tuesday 31 May 2016).

 

The Company has also granted the Option to the Joint Bookrunners which will enable each of them to deal with additional demand under the Placing in the event that requests to participate in the Placing from institutional investors and certain other investors are received during the period from the date of this Announcement to 5.00 p.m. on Friday 13 May 2016.

 

The Option is exercisable on more than one occasion at any time prior to 5.00 p.m. on Friday 13 May 2016. Any Option Shares issued pursuant to the exercise of the Option will be issued on the same terms and conditions as the Initial Placing Shares. The Option may be exercised by either or both of the Joint Bookrunners, following consultation with the Company, but there is no obligation on them to exercise the Option or to seek to procure subscribers for Option Shares pursuant to the Option. The maximum number of Option Shares that may be issued pursuant to the exercise of the Option is 2,875,000. Accordingly, the maximum number of Placing Shares (including both the Initial Placing Shares and the Option Shares) that may be issued pursuant to the Placing is 9,308,350.

 

Under the terms of the Placing Agreement, the Company has given certain customary warranties and indemnities to Stifel and Numis in connection with the Placing and other matters relating to the Company and the Enlarged Group. 

 

Application will be made to the London Stock Exchange for the Placing Shares and the Consideration Shares to be admitted to trading on AIM.  It is expected that, subject to the passing of the resolutions at the General Meeting, Admission will occur and dealings will commence in the Placing Shares and Consideration Shares on Tuesday 24 May at 8.00 a.m.

 

Effect of the Placing and the Acquisition

 

On Admission, the Enlarged Share Capital is expected to be a minimum of 39,598,401 Ordinary Shares (assuming no Option Shares are issued), up to a maximum of 42,473,401 Ordinary Shares (assuming the maximum number of Option Shares are issued).  On this basis, the Placing Shares and Consideration Shares will together represent a minimum of approximately 27.4 per cent. of the Enlarged Share Capital (assuming no Option Shares are issued) and a maximum of approximately 32.3 per cent. of the Enlarged Share Capital (assuming the maximum number of Option Shares are issued).

 

The Company intends to use the net proceeds of the Placing to implement both components of the aforementioned strategy, by adding complementary services and/ or geographical coverage to its current services offering and enhancing its co-development portfolio, with the Acquisition representing a major advancement of the co-development component.

 

The Company plans to utilise its CRO platform and accompanying expertise in clinical trial execution to run key clinical trials for both Haemostatix's most advanced products (PeproStat^TM and ReadyFlow^TM) and its co-development portfolio, whilst it is the intention that overall Ergomed remains profitable at the EBITDA level.

 

Current trading and prospects for the Group

 

The Company announced its preliminary unaudited results for 2015 on 12 April 2016, with the key highlights noted below:

 

Financial Highlights: Performance in-line with market expectations

 

·       Revenues up 43 per cent. to £30.2 million (2014: £21.2 million)

o   Pro forma adjusted for PrimeVigilance1, revenues up 27 per cent. (2014: £23.7 million)

·       Gross profit up 45 per cent. to £8.4 million (2014: £5.8 million)

·       EBITDA (adjusted) up 39 per cent. to £3.4 million (2014: £2.4 million)

o   Pro forma adjusted for PrimeVigilance¹, EBITDA (adjusted) up 22 per cent. (2014: £2.8 million)

·       Cash and cash equivalents of £4.0 million as at 31 December 2015 (2014: £4.6 million) with zero debt

·       New contracts worth an initial value of £28 million won in 2015

·       Strong backlog of £59 million with more than 85 per cent. of planned 2016 revenue already contracted as of 1 January 2016

 

Operational Highlights: Expanding geographical footprint and service offerings

 

·       Signed first orphan disease co-development agreement with Dilaforette for Phase II clinical development of sevuparin in patients with Sickle-Cell Disease ('SCD') experiencing an acute vaso-occlusive crisis ('VOC')

·       Expanded presence in Asia with the opening of an office in Taipei (Taiwan) as a regional hub

·    Acquired Sound Opinion, one of the UK's leading medical information service providers, which was immediately integrated into PrimeVigilance, Ergomed's fast growing post-marketing services business

·       Strengthened management team with appointment of Andrew Mackie as Chief Business Officer and to the Board

 

Post-year-end highlights

 

·       Management team further enhanced with the appointment of Stephen Stamp to the Board as Chief Financial Officer; Neil Clark promoted to Chief Executive Officer of PrimeVigilance

 

Outlook

 

·     The backlog of services contracts means Ergomed is again well positioned to deliver its revenue targets for 2016.  Ergomed continues to seek focused acquisition opportunities to build the services business

·     Ergomed's co-development business continues to gain traction as it seeks out partnership opportunities to build a diverse pipeline of development projects.  Ergomed anticipates important news from its co-development partners in 2016 including Phase IIa data on Lorediplon (Ferrer) and Phase III data on Zoptrex™ (Aeterna Zentaris)

 

Subsequently to the preliminary unaudited results announcement, the Company confirms that the total consolidated segment profit increased to £3.3 million in 2015 (2014: £2.1 million), with clinical research services contributing £1.2 million (2014: £1.7 million) and drug safety and medical information services £2.1 million (2014: £0.5 million).

 

The Company has continued to trade in line with management's expectations since 12 April 2016.

 

Further information on Ergomed and full details of its preliminary unaudited results can be found on its website, www.ergomedplc.com.

 

1. PrimeVigilance acquisition completed on 15 July, 2014; Pro forma figures assume contribution for full year 2014 to enable comparison with 2015

General Meeting

 

The Notice of General Meeting, convening a General Meeting to be held at the offices of Covington & Burling LLP, 265 Strand, London WC2R 1BH on Monday 23 May 2016, commencing at 11.00 a.m., is set out in a circular to be sent to shareholders in due course. 

 

Shareholders who have queries about the General Meeting or about completion of the Form of Proxy should contact the Company's registrars, Share Registrars Limited, on [phone].

 

Resolution 1 - Authority to allot Ordinary Shares

 

The Directors require the authority of Shareholders in order to allot the Placing Shares.  Resolution 1 in the Notice of General Meeting provides such authority.

 

For the purposes of the Placing, Resolution 1 grants the Directors authority to allot Ordinary Shares up to a maximum nominal amount of £93,083.50 (representing, as at 03 May 2016 (being the latest practicable date before the publication of this Announcement and the Circular) 32.4 per cent. of the Existing Ordinary Shares) being 9,308,350 Ordinary Shares in number.

 

Resolution 1 is being proposed as an ordinary resolution and will therefore require more than 50 per cent. of the votes cast, whether in person or by proxy, to be in favour.  This authority, if granted, will be in addition to any existing authorities to allot Ordinary Shares granted to the Directors prior to the date of the Circular, and will enable the Directors to effect the Placing.  This authority will expire on the later of the conclusion of the next Annual General Meeting of the Company or 30 June 2016.

 

Resolution 2 - Disapplication of pre-emption rights

 

Section 561 of the Companies Act requires that, on an allotment of "equity securities" for cash, such equity securities must first be offered to existing Shareholders in proportion to the number of Ordinary Shares they each hold at that time.  The Placing Shares are "equity securities" allotted for cash and, accordingly, cannot be offered on a non pre-emptive basis unless Shareholders have first waived their pre-emption rights.  Resolution 2, if passed, provides such a waiver.  If Resolution 2 is passed, the Directors will be able to allot the Placing Shares on a non pre-emptive basis, to the extent of the authority granted by Resolution 1. 

 

Resolution 2 is being passed a special resolution and will therefore require not less than 75 per cent. of the votes cast, whether in person or by proxy, to be in favour.  This authority, if granted, will be in addition to any existing authorities to allot Ordinary Shares free of pre-emption rights granted to the Directors prior to the date of the Circular which will continue in full force and effect whether or not the Placing or the Acquisition are effected.  This authority will expire on the later of the conclusion of the next Annual General Meeting of the Company or 30 June 2016.

 

If Resolutions 1 and 2 are passed by Shareholders at the General Meeting but the Placing and the Acquisition do not complete, the Company undertakes not to use the authorities granted by Resolutions 1 and 2, and to rely only on the general authorities granted pursuant to existing authorities to allot Ordinary Shares free of pre-emption rights granted to the Directors prior to the date of the Circular.

 

Director participation in the Placing and related party confirmation

 

Miroslav Reljanovic, Stephen Stamp and Peter George (the "Related Parties") have agreed to participate in the Placing for amounts of £560,000, £280,000 and £140,000 respectively, representing a combined total of 700,000 Initial Placing Shares.  The table below sets out the interests of the Directors, as at 03 May 2016, (being the last practicable date prior to the publication of this announcement) and following Admission, assuming issue of only the Initial Placing Shares and the Consideration Shares.

 

	Current holding		Following Admission (assuming no Option Shares are issued)
	Number of Ordinary Shares	%	Number of Initial Placing Shares subscribed for pursuant to the Placing	Number of Ordinary Shares	%
Dr. Miroslav Reljanovic	17,232,237	59.94	400,000	17,632,237	44.53
Rolf Stahel	125,000	0.43	-	125,000	0.32
Stephen Stamp	-	-	200,000	200,000	0.51
Neil Clark	91,912	0.32	-	91,912	0.23
Andrew Mackie	-	-	-	-	-
Peter George	31,250	0.11	100,000	131,250	0.33
Chris Collins	31,250	0.11	-	31,250	0.08

 

The Directors other than the non-Independent Directors consider, having consulted with the Company's nominated adviser, Stifel, that the terms on which the Related Parties are participating in the Placing are fair and reasonable insofar as Shareholders are concerned

 

Recommendation

 

The Board believes that each of the Resolutions is in the best interests of the Company and its Shareholders as a whole and unanimously recommends you to vote in favour of them, as the Directors have irrevocably undertaken to do in respect of their own beneficial shareholdings, which in aggregate represent 60.91 per cent. of the Existing Ordinary Shares. 

APPENDIX I

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING

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

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED, ("QUALIFIED INVESTORS") BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE"); (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER"); (II) FALL WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").  THIS 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 APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. 

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.  THIS ANNOUNCEMENT HAS BEEN ISSUED BY AND IS THE SOLE RESPONSIBILITY OF THE COMPANY.

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, IS NOT AN OFFER FOR SALE OR SUBSCRIPTION IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.  THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, IS NOT AN OFFER OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES HAS APPROVED OR DISAPPROVED OF AN INVESTMENT IN THE SECURITIES OR PASSED UPON OR ENDORSED THE MERITS OF THE PLACING OR THE ACCURACY OR ADEQUACY OF THE CONTENTS OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES. NO PUBLIC OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES. NO MONEY, SECURITIES OR OTHER CONSIDERATION FROM ANY PERSON INSIDE THE UNITED STATES IS BEING SOLICITED AND, IF SENT IN RESPONSE TO THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT, WILL NOT BE ACCEPTED.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES. THE PRICE OF SHARES IN THE COMPANY AND THE INCOME FROM THEM (IF ANY) MAY GO DOWN AS WELL AS UP AND INVESTORS MAY NOT GET BACK THE FULL AMOUNT INVESTED ON DISPOSAL OF SHARES.

Persons who are invited to and who choose to participate in the Placing, by making (or on whose behalf there is made) an oral or written offer to subscribe for Placing Shares (the "Placees"), will be deemed to have read and understood this Announcement, including this Appendix, 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 (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

2.         in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the Placing Shares acquired by it have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Member State of the European Economic Area ("EEA") which has implemented the Prospectus Directive other than Qualified Investors or in circumstances in which the prior consent of each of the Joint Bookrunners has been given to the offer or resale; or (ii) where Placing Shares have been acquired by it on behalf of persons in any Member State of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons; and/or

3.        (a) (i) it is not in the United States and (ii) it is not acting for the account or benefit of a person in the United States, (b) it is a dealer or other professional fiduciary in the United States acting on a discretionary basis for a non-US person (other than an estate or trust) in reliance on Regulation S under the Securities Act; or (c) it is otherwise acquiring the Placing Shares in an "offshore transaction" meeting the requirements of Regulation S under the Securities Act.

The Company and each of the Joint Bookrunners will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

This Announcement has been prepared and issued by the Company and is and will be the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by either of the Joint Bookrunners or any of their respective directors, officers, employees, affiliates, branches, advisers, consultants or agents or any other person as to or in relation to, the accuracy or completeness of the Announcement or any other written or oral information made available to or publicly available to any Placee, any person acting on such Placee's behalf or any of their respective advisers, and any liability therefor is expressly disclaimed.

This Announcement does not constitute an offer, and may not be used in connection with an offer, to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction in which such offer or solicitation is or may be unlawful. This Announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, Canada, Australia, New Zealand, Japan or the Republic of South Africa or in any jurisdiction in which such publication or distribution is unlawful.  Persons into whose possession this Announcement may come are required by the Company to inform themselves about and to observe any restrictions of transfer of this Announcement. No public offer of securities of the Company is being made in the United Kingdom, the United States or elsewhere.

In particular, the Placing Shares referred to in this Announcement have not been and will not be registered under the Securities Act or any laws of, or with any securities regulatory authority of, any state or other jurisdiction of the United States, and may not be offered, sold, pledged or otherwise transferred 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 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 accordance with Regulation S under the Securities Act.

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

The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by the Australian Securities and Investments Commission or the Japanese Ministry of Finance; 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 Canada, Australia, New Zealand, Japan, the Republic of Ireland 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 Canada, Australia, New Zealand, Japan, the Republic of Ireland or the Republic of South Africa or any other jurisdiction outside the United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual 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.

In this Appendix, unless the context otherwise requires, "Placee" means a Relevant Person (including individuals, funds or otherwise) by whom or on whose behalf a commitment to subscribe for Placing Shares has been given.

Details of the Placing

Each of Numis and Stifel has entered into the Placing Agreement with the Company under which each of the Joint Bookrunners has, on the terms and subject to the conditions set out therein, undertaken to use its reasonable endeavours to procure, as agent for the Company, subscribers for certain of the Initial Placing Shares at the Issue Price. 

The Placing Agreement contains customary warranties given by the Company to each of the Joint Bookrunners as to matters relating to the Company and its business and a customary indemnity given by the Company to each of the Joint Bookrunners in respect of liabilities arising out of or in connection with the Placing. The Placing is conditional upon, amongst other things, the Resolutions being passed by the requisite majorities. 

In addition, the Company has also granted the Option to each of the Joint Bookrunners in order to enable them to deal with additional demand under the Placing in the event that requests to participate in the Placing from institutional investors and certain other investors are received during the period from the date of this Announcement to 5.00 p.m. on Friday 13 May 2016.

The Option is exercisable on more than one occasion at any time prior to 5.00 p.m. on Friday 13 May 2016. Any Option Shares issued pursuant to the exercise of the Option will be issued on the same terms and conditions as the Initial Placing Shares. The Option may be exercised by either or both of the Joint Bookrunners, following consultation with the Company, but there is no obligation on the Joint Bookrunners to exercise the Option or to seek to procure subscribers for Option Shares pursuant to the Option. The maximum number of new Ordinary Shares that may be issued pursuant to the exercise of the Option is 2,875,000. The maximum number of Ordinary Shares (including Ordinary Shares issued pursuant to exercise of the Option) that may be issued pursuant to the Placing is 9,308,350.

A circular explaining the background to and reasons for the Placing and the Acquisition, and containing the Notice of General Meeting will be sent to Shareholders. A copy of the Circular and the Notice of General Meeting will also be available from the Company's website at: www.ergomedplc.com.

The Placing is also conditional upon, amongst other things: (i) the Acquisition Agreement becoming unconditional in accordance with its terms (other than as regards any condition relating to the Placing Agreement and Admission); (ii) Admission becoming effective; and (iii) the Placing Agreement not being terminated in accordance with its terms.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing issued Ordinary Shares, including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of the Ordinary Shares after the date of issue of the Placing Shares.

Application for admission to trading

Application will be made to the London Stock Exchange for Admission. Subject to, amongst other things, the Resolutions being passed by the requisite majorities at the General Meeting, it is expected that settlement of any such shares and Admission will become effective on or around Tuesday 24 May 2016 and that dealings in the Placing Shares will commence at that time.

Participation in, and principal terms of, the Placing

1.         Each of Numis and Stifel (whether through itself or any of its affiliates) is arranging the Placing as placing agent of the Company for the purpose of using reasonable endeavours to procure Placees at the Issue Price for certain of the Initial Placing Shares.

2.         Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by one of the Joint Bookrunners. Each of the Joint Bookrunners and its affiliates may participate in the Placing as principal.

3.         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.

4.         The Issue Price will be a fixed price of 140 pence per Placing Share.

5.     Each Placee's allocation will be confirmed to Placees orally by the relevant Joint Bookrunner, and a trade confirmation or contract note will be dispatched as soon as possible thereafter. The oral confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of the relevant Joint Bookrunner and the Company, under which it agrees 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.

6.      Except as required by law or regulation, no press release or other announcement will be made by the Joint Bookrunners 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.

7.       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".

8.         All obligations under the Placing will be subject to fulfilment or (where applicable) waiver of, amongst other things, 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".

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

10.      To the fullest extent permissible by law, none of the Company, the Joint Bookrunners or any of their respective affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, none of the Company, the Joint Bookrunners or any of their respective affiliates shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of the Joint Bookrunners' conduct of the Placing. Each Placee acknowledges and agrees that the Company is responsible for the allotment of the Placing Shares to the Placees and each of the Joint Bookrunners shall have no liability to the Placees for the failure of the Company to fulfil those obligations. 

Conditions of the Placing

Each of the Joint Bookrunner's obligations under the Placing Agreement in respect of the Placing Shares are conditional on, inter alia:

(a)          the Company allotting, subject only to Admission, the Placing Shares in accordance with the Placing Agreement;

(b)          the Acquisition Agreement becoming unconditional in accordance with its terms (save in respect of any condition therein relating to the Placing Agreement or Admission);

(c)         the passing (without any amendment, save as agreed by the Joint Bookrunners) of the Resolutions at the General Meeting; and

(d)           Admission taking place not later than 8.00 a.m. on Tuesday 24 May 2016.

If (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by both of the Joint Bookrunners by the respective time or date where specified (or such later time or date as the Company and the Joint Bookrunners may agree not being later than 8.00 a.m. on Tuesday 31 May 2016 (the "Final Date"), or (ii) the Placing Agreement is terminated as described below, the Placing in relation to the Placing Shares will lapse and the Placee's rights and obligations thereunder 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.

The Joint Bookrunners may, at their absolute discretion and upon such terms as they think fit, waive, or extend the period (up to the Final Date) for, compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement, save that the condition relating to the passing of the Resolutions and the condition relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

Neither of the Joint Bookrunners nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Joint Bookrunners.

Right to terminate under the Placing Agreement

Each of the Joint Bookrunners is entitled, at any time before Admission, to terminate the Placing Agreement by giving notice to the Company in certain circumstances, including, inter alia:

(a)        any of the warranties given by the Company to each of the Joint Bookrunners was not at the date of the Placing Agreement true and accurate in any respect or, by reference to the circumstances prevailing from time to time, has ceased to be true and accurate in any respect; or

(b)        the Company fails to comply with any of its obligations under the Placing Agreement; or

(c)        in the opinion of the Joint Bookrunners, there has occurred any adverse change in, or any development reasonably likely to involve an adverse change in, the condition (financial, operational, legal or otherwise), earnings, business, management, property, assets, rights, results, operations or prospects of the Company or the Enlarged Group which is material in the context of the Company or the Enlarged Group taken as a whole, whether or not arising in the ordinary course of business; or

 (d)       there happens, develops or comes into effect: (i) a general moratorium on commercial banking activities in London declared by the relevant authorities or a material disruption in commercial banking or securities settlement or clearance services in the United Kingdom; or (ii) the outbreak or escalation of hostilities or acts of terrorism involving the United Kingdom or the declaration by the United Kingdom of a national emergency or war; or (iii) any other occurrence of any kind which (by itself or together with any other such occurrence) in a Bank's reasonable opinion is likely to materially and adversely affect the market's position or prospects of the Enlarged Group taken as a whole; or (iv) any other crisis of international or national effect or any change in any currency exchange rates or controls or in any financial, political, economic or market conditions or in market sentiment which, in any such case, in a Bank's reasonable opinion is likely to materially adversely affect the Placing.

Following Admission, the Placing Agreement is not capable of termination to the extent that it relates to the Placing of the Placing Shares.

The rights and obligations of the Placees shall terminate only in the circumstances described in these terms and conditions and in the Placing Agreement and will not be subject to termination by the Placee or any prospective Placee at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by a Joint Bookrunner of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the relevant Joint Bookrunner, and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise or decision not to exercise.  Placees will have no rights against the Joint Bookrunners, the Company or any of their respective directors or employees under the Placing Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999 (as amended).

No Admission Document or Prospectus

The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require an admission document or prospectus in the United Kingdom or in any other jurisdiction. No offering document, admission document or prospectus has been or will be submitted to be approved by the FCA or submitted to the London Stock Exchange in relation to the Placing, and Placees' commitments will be made solely on the basis of the information contained in the Announcement (including this Appendix) and the Exchange Information (as defined further below). 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 (other than the Exchange Information), representation, warranty, or statement made by or on behalf of the Company or each of the Joint Bookrunners or any other person and neither of the Joint Bookrunners nor the Company nor any other person 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 and, if given or made, such information, representation, warranty or statement must not be relied upon as having been authorised by the Joint Bookrunners, the Company, or their respective officers, directors, employees or agents. 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. Neither the Company, nor either of the Joint Bookrunners are making any undertaking or warranty to any Placee regarding the legality of an investment in the Placing Shares by such Placee under any legal, investment or similar laws or regulations. Each Placee should not consider any information in this Announcement to be legal, tax or business advice. Each Placee should consult its own solicitor, tax adviser and financial adviser for independent legal, tax and financial advice regarding an investment in the Placing Shares. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation or fraud.

Registration and settlement

Settlement of transactions in the Placing Shares (ISIN: GB00BN7ZCY67) following Admission will take place within CREST provided that, subject to certain exceptions, the Joint Bookrunners reserve the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation or contract note stating the number of Placing Shares allocated to it at the Issue Price, the aggregate amount owed by such Placee to the relevant Joint Bookrunner (as agent for the Company) and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the CREST or certificated settlement instructions that it has in place with the relevant Joint Bookrunner.

It is expected that settlement in respect of the Placing Shares will be on Tuesday 24 May 2016 in accordance with the instructions set out in the trade 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 the Joint Bookrunners.

Each Placee is deemed to agree that, if it does not comply with these obligations, the Joint Bookrunners 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 relevant Joint Bookrunner's account and benefit (as agent for the Company), an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable and shall indemnify the Joint Bookrunners on demand for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) 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 the Joint Bookrunners all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which the Joint Bookrunners lawfully take in pursuance of such sale.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation or contract note 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 or securities transfer tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations, warranties and further terms

By participating in the Placing each Placee (and any person acting on such Placee's behalf) makes the following representations, warranties, acknowledgements, agreements and undertakings (as the case may be) to the Company and each of the Joint Bookrunners, namely that, each Placee (and any person acting on such Placee's behalf):

1.         represents and warrants that it has read and understood the Announcement, including this Appendix, in its entirety and that its subscription of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute or duplicate this Announcement, including this Appendix;

2.         acknowledges that no offering document, admission document or prospectus has been prepared in connection with the Placing and represents and warrants that it has not received and will not receive a prospectus, admission document or other offering document in connection therewith;

3.         acknowledges that the Ordinary Shares are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules (collectively "Exchange Information"), which includes the Company's most recent balance sheet and profit and loss account and the Company's announcements and circulars published in the past 12 months and that it is able to obtain or access such information without undue difficulty;

4.       acknowledges that neither of the Joint Bookrunners, the Company, nor any of their respective affiliates or any person acting on behalf of any of them has provided it, and will not provide it, with any material regarding the Placing Shares or the Company other than this Announcement; nor has it requested any of the Joint Bookrunners, the Company, their respective affiliates or any person acting on behalf of any of them to provide it with any such information and has read and understood the Exchange Information;

5.         acknowledges that the content of this Announcement is exclusively the responsibility of the Company, and that none of each of the Joint Bookrunners, its affiliates or any person acting on its or their behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously or concurrently 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 and any 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 or representations, warranties or statements made by either of the Joint Bookrunners, the Company or any of their respective directors, officers or employees or any person acting on behalf of any of them, or, if received, it has not relied upon any such information, representations, warranties or statements (including any management presentation that may have been received by any prospective Placee or any material prepared by the Research Department of either of the Joint Bookrunners (the views of such Research Department not representing and being independent from those of the Company and the Corporate Finance Departments of the Joint Bookrunners and not being attributable to the same)), and neither the Joint Bookrunners nor the Company 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. Each Placee further acknowledges and agrees that it may not place the same degree of reliance on this Announcement as it may otherwise place on a prospectus or admission document. Each Placee further acknowledges and agrees that it has relied solely on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing and it will not rely on any investigation that the Joint Bookrunners, their affiliates or any other person acting on their behalf has or may have conducted;

6.      represents and warrants that it has neither received nor relied on any confidential price sensitive information concerning the Company in accepting this invitation to participate in the Placing;

7.         acknowledges that neither of the Joint Bookrunners has any duties or responsibilities to it, or its clients, similar or comparable to the duties of "best execution" and "suitability" imposed by the Conduct of Business Sourcebook in the FCA's Handbook of Rules and Guidance and that neither of the Joint Bookrunners is acting for it or its clients and that neither of the Joint Bookrunners will be responsible for providing protections to it or its clients;

8.         acknowledges that none of the Joint Bookrunners, any of their affiliates or any person acting on behalf of it or them has or shall have any liability for the Exchange Information, any publicly available or filed information or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraud or fraudulent misrepresentation made by that person;

9.         that, save in the event of fraud on the part of the Joint Bookrunners (and to the extent permitted by the Rules of the FCA), neither the Joint Bookrunners, their ultimate holding companies nor any direct or indirect subsidiary undertakings of such holding companies, nor any of their respective directors and employees shall be liable to Placees for any matter arising out of each of the Joint Bookrunners' role as placing agent or otherwise in connection with the Placing and that where any such liability nevertheless arises as a matter of law Placees will immediately waive any claim against any of such persons which they may have in respect thereof;

10.       represents and warrants that (i) it is not in the United States and (ii) it is not acting for the account or benefit of a person in the United States;

11.      acknowledges that the Placing Shares are being offered and sold only pursuant to Regulation S under the Securities Act in a transaction not involving a public offering of securities in the United States and the Placing Shares have not been and will not be registered under the Securities Act or with any state or other jurisdiction of the United States, nor approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority, and that the offer and sale of the Placing Shares to it has been made outside of the United States in an 'offshore transaction' (as such term is defined in Regulation S under the Securities Act) and agrees not to reoffer, resell, pledge or otherwise transfer the Placing Shares except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and otherwise in accordance with any applicable securities laws of any state or jurisdiction of the United States;

12.       unless otherwise specifically agreed in writing with the Joint Bookrunners, represents and warrants that neither it nor the beneficial owner of such Placing Shares will be a resident of Canada, Australia, New Zealand, Japan, the Republic of Ireland or the Republic of South Africa;

13.       acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of Canada, Australia, New Zealand, Japan, the Republic of Ireland or the Republic of South Africa and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions;

14.      represents and warrants that the issue to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer Placing Shares into a clearance system;

15.       represents and warrants that: (i) it has complied with its obligations under the Criminal Justice Act 1993 and Part VIII of FSMA; (ii) in connection with money laundering and terrorist financing, it has complied with its obligations under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering Regulations 2007; and (iii) it is not a person: (a) with whom transactions are prohibited under the Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury; (b) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or (c) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations (together, the "Regulations"); and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to the Joint Bookrunners such evidence, if any, as to the identity or location or legal status of any person which the Joint Bookrunners may request from it in connection with the Placing (for the purpose of complying with such Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by the Joint Bookrunners on the basis that any failure by it to do so may result in the number of Placing Shares that are to be purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as the relevant Joint Bookrunner may decide at its sole discretion;

16.       if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, represents and warrants that the Placing Shares purchased 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 European Economic Area which has implemented the Prospectus Directive other than Qualified Investors, or in circumstances in which the prior consent of the Joint Bookrunners has been given to the offer or resale;

17.       represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (including any relevant implementing measure in any member state);

18.       represents and warrants that 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 the FSMA) relating to the Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person;

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

20.    if in a Member State of the European Economic Area, unless otherwise specifically agreed with the Joint Bookrunners in writing, represents and warrants that it is a Qualified Investor within the meaning of the Prospectus Directive;

21.       if in the United Kingdom, represents and warrants that it is a person (i) who has professional experience in matters relating to investments falling within Article 19(1) 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;

22.       represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities and taken any other necessary actions 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) and will honour such obligations;

23.     where it is acquiring Placing Shares for one or more managed accounts, represents and warrants that it is authorised in writing by each managed account: (a) to acquire the Placing Shares for each managed account; (b) to make on its behalf the representations, warranties, acknowledgements, undertakings and agreements in this Appendix and the Announcement of which it forms part; and (c) to receive on its behalf any investment letter relating to the Placing in the form provided to it by the relevant Joint Bookrunner;

24.       undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as the Joint Bookrunners may in their sole discretion determine and without liability to such Placee and it will remain liable and will indemnify each of the Joint Bookrunners and the Company on demand for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear the liability for any stamp duty or stamp duty reserve tax or security transfer tax (together with any interest or penalties due pursuant to or referred to in these terms and conditions) which may arise upon the placing or sale of such Placee's Placing Shares on its behalf;

25.       acknowledges that none of the Joint Bookrunners, any of their affiliates, or any person acting on behalf of any of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be treated for these purposes as a client of a Joint Bookrunner and that each of the Joint Bookrunners has no duties or responsibilities to it for providing the protections afforded to their respective 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 rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

26.       undertakes that 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 of the Joint Bookrunners nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and each of the Joint Bookrunners 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;

27.       acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreement shall be governed by and construed in accordance with the laws of England and Wales 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 (including non-contractual matters) arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or each of the Joint Bookrunners 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;

28.       acknowledges that time shall be of the essence as regards to obligations pursuant to this Appendix;

29.       agrees that the Company, each of the Joint Bookrunners and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to each of the Joint Bookrunners on its own behalf and on behalf of the Company and are irrevocable and are irrevocably authorised to produce this Announcement, including this Appendix, or a copy thereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby;

30.      agrees to indemnify on an after-tax basis and hold the Company, each of the Joint Bookrunners and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

31.       acknowledges that no action has been or will be taken by any of the Company, each of the Joint Bookrunners or any person acting on behalf of the Company or each of the Joint Bookrunners 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;

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

33.       acknowledges that its commitment to subscribe for Placing Shares on the terms set out herein and in the trade confirmation or contract note will continue notwithstanding any amendment that may in future be made to the terms 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 conduct of the Placing;

34.       acknowledges that the Joint Bookrunners or any of their affiliates acting as an investor for its own account may take up shares in the Company and in that capacity may retain, purchase or sell for its own account such shares and may offer or sell such shares other than in connection with the Placing;

35.       represents and warrants that, if it is a pension fund or investment company, its purchase of Placing Shares is in full compliance with all applicable laws and regulation; and

36.      to the fullest extent permitted by law, it acknowledges and agrees to the disclaimers contained in the Announcement including this Appendix.

The representations, warranties, acknowledgments and undertakings contained in this Appendix are given to each of the Joint Bookrunners and the Company and are irrevocable and shall not be capable of termination in any circumstances.

The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor the Joint Bookrunners will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and each of the Joint Bookrunners in the event that any of the Company and/or the Joint Bookrunners has incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify each of the Joint Bookrunners accordingly.

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

Each Placee, and any person acting on behalf of the Placee, acknowledges that the Joint Bookrunners do not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that either of the Joint Bookrunners or any of thier 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 a Joint Bookrunner, any money held in an account with the relevant Joint Bookrunner 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 the 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 the relevant Joint Bookrunner's money in accordance with the client money rules and will be used by the relevant Joint Bookrunner in the course of its own business and the Placee will rank only as a general creditor of the relevant Joint Bookrunner.

All times and dates in this Announcement, including this Appendix, may be subject to amendment. The relevant Joint Bookrunner shall notify the Placees and any person acting on behalf of the Placees of any changes.

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

APPENDIX II

DEFINITIONS

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

"2015 AGM"	the annual general meeting of the Company held on 19 June 2015
"Act"	the Companies Act 2006, as amended
"Acquisition Agreement"	the conditional agreement entered into between the Company and the Sellers documenting the terms of the Acquisition
"Acquisition"	the proposed acquisition by the Company of the entire issued share capital of Haemostatix
"Admission"	the admission of the New Ordinary Shares to trading on AIM and such admission becoming effective in accordance with the AIM Rules
"AIM Rules"	the AIM rules for companies and their nominated advisers, published by the London Stock Exchange (as amended from time to time)
"AIM"	AIM, a market of the London Stock Exchange
"Announcement"	this announcement (including its Appendices)
"Board" or "Directors"	the directors of Ergomed, being: Rolf Stahel (Non-Executive Chairman); Dr. Miroslav Reljanovic (Chief Executive Officer); Stephen Stamp (Chief Finance Officer); Neil Clark (Group Director, CEO PrimeVigilance); Andrew Mackie (Chief Business Officer); Peter George (Non-Executive Director) and Christopher Collins (Non-Executive Director)
"Business Day"	a day (other than a Saturday or Sunday) on which commercial banks are open for general business in London, England
"certificated form"	not in an uncertificated form
"Circular"	the circular of the Company giving (amongst other things) details of the Placing, the Acquisition and incorporating the Notice of General Meeting
"Companies Act"	the Companies Act 2006, as amended
"Company" or "Ergomed"	Ergomed plc, a company incorporated in England and Wales (registration number 04081094) and having its registered office address at 26-28 Frederick Sanger Road, Surrey Research Park, Guildford, Surrey GU2 7YD
"Completion"	means completion of the Acquisition in accordance with the terms of the Acquisition Agreement
"Consideration Shares"	the 4,415,051 Ordinary Shares to be issued and allotted to the Sellers as initial consideration for the Acquisition representing a value of £6,181,072 at the Issue Price
"CREST Regulations"	the Uncertified Securities Regulations 2001 (SI 2001/3755) (as amended)
"CREST"	the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations)
"Deferred Consideration"	approximately £20,000,000 which, in accordance with the terms of the Acquisition Agreement, may become payable to the Sellers as additional consideration for the Acquisition and which will be settled through the issue of new Ordinary Shares and/or cash
"Enlarged Group"	the Company and its subsidiaries following completion of the Acquisition
"Enlarged Share Capital"	the issued Ordinary Share capital of Ergomed immediately following completion of the Placing and issue of the Consideration Shares
"Euroclear"	Euroclear UK & Ireland Limited, the operator of CREST
"European Union" or "EU"	an economic and political union of 28 member states which are located in Europe
"Existing Authorities"	the authorities granted to the Directors to allot new Ordinary Shares on a non-pre-emptive basis pursuant to certain of the resolutions passed at the 2015 AGM
"Existing Ordinary Shares"	each Ordinary Share in issue as at the date of this Announcement
"FCA"	the UK Financial Conduct Authority
"Form of Proxy"	the form of proxy enclosed with the Circular for use by Shareholders in connection with the General Meeting
"FSMA"	the Financial Services and Markets Act 2000 (as amended)
"General Meeting"	the general meeting of Ergomed convened by the notice set out in the Circular to be held at 11.00 a.m.  on Monday 23 May 2016 at the offices of Covington & Burling LLP, 265 Strand, London WC2R 1BH
"Group"	the Company and its subsidiaries before completion of the Acquisition
"Haemostatix"	Haemostatix Limited, a company incorporated in England and Wales (registration number 04698400) and having its registered office at BioCity Nottingham, Pennyfoot Street, Nottingham NG1 1GF
"Haemostatix Loan"	means the loan of £1,018,928 to be advanced to Haemostatix by the Company on Completion
"HMRC"	HM Revenue & Customs
"Initial Placing Shares"	the 6,433,350 new Ordinary Shares to be issued by the Company pursuant to the Placing
"Issue Price"	the price at which the Placing Shares are to be issued and allotted pursuant to the Placing, being 140 pence per Placing Share
"Joint Bookrunners"	together, Numis and Stifel
"London Stock Exchange"	London Stock Exchange plc
"MHRA"	Medicines and Healthcare Products Regulatory Agency, an executive agency of the Department of Health in the United Kingdom which is responsible for ensuring that medicines and medical devices are efficacious and are acceptably safe
"New Ordinary Shares"	the Placing Shares and the Consideration Shares
"non-Independent Directors"	the directors of Ergomed participating in the Initial Placing, being Miroslav Reljanovic, Stephen Stamp and Peter George
"Notice of General Meeting"	the notice convening the General Meeting set out at the end of the Circular
"Numis"	Numis Securities Limited, a company incorporated in England and Wales (registration number 02285918) and having its registered office address at 10 Paternoster Square, London EC4M 7LT
"Official List"	the Official List of the UK Listing Authority
"Option"	the option granted to each of the Joint Bookrunners pursuant to the Placing Agreement to allow each of them to require the Company to issue and allot the Option Shares to Placees following the date of this Announcement pursuant to the Placing
"Option Shares"	up to 2,875,000 new Ordinary Shares (if any) to be allotted and issued by the Company to Placees following the exercise of the Option by either or both of the Joint Bookrunners
"Ordinary Shares"	the ordinary shares of £0.01 each in the capital of the Company
"Panel"	the UK Panel on Takeovers and Mergers
"Phase III Trial"	means a human clinical trial of Haemostatix candidate product on a sufficient number of subjects that is designed to establish that a pharmaceutical product is safe and efficacious for its intended use and to determine warnings, precautions, and adverse reactions that are associated with such pharmaceutical product in the dosage range to be prescribed, which trial is intended to support marketing approval of such Portfolio Asset, including all tests and studies that are required by the United States Federal Drug Administration or other regulatory authority from time to time, pursuant to applicable law or otherwise
"Placee"	any person (including individuals, funds or otherwise) by whom or on whose behalf a commitment to acquire Placing Shares has been given
"Placing Agreement"	the conditional agreement dated 04 May 2016 between the Company, Stifel and Numis concerning the Placing
"Placing Shares"	the Initial Placing Shares and the Option Shares
"Placing"	the conditional placing of the Placing Shares by the Joint Bookrunners on behalf of the Company pursuant to the Placing Agreement
"PrimeVigilance"	PrimeVigilance Limited, a company incorporated in England and Wales with registered number 06740849
"Prospectus Rules"	the prospectus rules of the FCA made under Part VI of FSMA
"Resolutions"	the resolutions to be proposed at the General Meeting as set out in the Notice of General Meeting
"RNS"	a regulatory information service operated by London Stock Exchange as defined by the AIM Rules
"Sellers"	all existing shareholders of Haemostatix together with holders of options and warrants over shares in Haemostatix who have agreed to exercise their options and/or warrants in return for shares in Haemostatix conditional on Completion
"Shareholders"	holders of Ordinary Shares whose names appear on the register of members of Ergomed
"Sound Opinion"	Sound Opinion Limited, a company incorporated in England & Wales with registered number 03543895
"Stifel"	Stifel Nicolaus Europe Limited, a company incorporated in England and Wales (registration number 03719559) and having its registered office address at 150 Cheapside, London EC2V 6ET
"UK Listing Authority"	the FCA acting as competent authority for the purposes of Part V of FSMA
"uncertificated form"	Ordinary Shares recorded on the share register as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred within the CREST settlement system
"Uncertificated Regulations"	the UK Uncertificated Securities Regulations 2001 (SI 2001 No. 55), as amended
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland
"United States" or "US"	the United States of America, its territories and possessions, any state of the United States and the District of Colombia
"£" and "pence"	UK pounds and pence sterling, respectively
"$"	US dollar

 

END

 

 

ACQLLFFLETISIIR