Placing and Offer for Subscription

RNS Number : 4432R

Transense Technologies PLC

29 June 2015

 

Transense Technologies plc

("Transense" or the "Company")

Placing and Offer for Subscription

Proposed Director Appointment

Change of Advisor

and

Notice of General Meeting

Transense Technologies plc (AIM: TRT), the provider of sensor systems for the transportation and industrial markets, is pleased to announce a Placing and Offer for Subscription, the proposed appointment of Nigel Rogers as Non-Executive Deputy Chairman and the appointment of finnCap Ltd as the Company's Nominated Adviser and Broker with immediate effect.

Highlights

·      Proposed Placing to raise approximately £2 million with new institutional and other investors

·      An Offer for Subscription to Eligible Shareholders to raise up to a further £1 million

·      Nigel Rogers to join as Non-Executive Deputy Chairman following Placing Admission

·      finnCap Ltd appointed as Nominated Adviser and Broker

Placing and Offer for Subscription

The Company has conditionally placed 135,063,334 Ordinary Shares at the Issue Price of 1.5p per Ordinary Share with institutional and other investors, for gross proceeds of approximately £2 million. finnCap acted as broker to the Placing. 

Furthermore, in order to provide Shareholders with an opportunity to participate in the proposed issue of New Ordinary Shares, the Company is providing all Eligible Shareholders with the opportunity to subscribe, at the Issue Price of 1.5p, for up to in total 66,666,666 New Ordinary Shares by way of the Offer, to raise up to approximately £1 million before expenses. The Offer provides Eligible Shareholders with an opportunity to participate in the proposed issue of New Ordinary Shares whilst providing the Company with additional capital to invest in the business of the Group.

The Placing Shares have been placed subject to, inter alia, shareholder approval at the General Meeting and subject to admission to trading on AIM. Application will be made to AIM for the admission of the Placing Shares. It is expected that Admission to trading on AIM of the Placing Shares will commence at 8 a.m. on 28 July 2015.

A circular (the "Circular") and notice of general meeting will be posted, on 30 June 2015 to Shareholders. Personalised Application Forms for use in connection with the Offer will be posted to all Shareholders. Extracts from the Circular are set out below, to provide the details of the Fundraising, to explain the background to and the reasons for the Fundraising and why the Directors recommend that Shareholders vote in favour of all of the Resolutions to be proposed at the General Meeting. Details of the Expected Timetable of Principal Event and the Key Statistics of the Fundraising are also set out below.

The Circular will be published on 30 June 2015 and copies of the Circular will be made available free of charge from the Company's website (www.transense.co.uk) shortly thereafter.

General Meeting

For the purpose of effecting, inter alia, the Placing and the Offer, the Resolutions will be proposed at the General Meeting to be held at The Euston Office, Oneustonsq, 40 Melton Street, London NW1 2FD at 12.00 p.m. on 27 July 2015.

Commenting on the Placing and Offer, Graham Storey, Chief Executive Officer of the Group, said: 

"We are delighted by the support received from both existing and new investors. The funds raised will enable Translogik to enter into further contracts on a rental basis, expand our sales channels and provide general working capital. The proposed Board appointment of Nigel Rogers further strengthens the management team, bringing a wealth of growth company experience. We look forward to the future with confidence."

For further information, please contact:

Transense Technologies plc	Tel: [phone]
Graham Storey, Chief Executive
finnCap Ed Frisby, Giles Rolls (corporate finance) Tony Quirke, Alice Lane (corporate broking)	Tel: [phone]
IFC Advisory	Tel: [phone]
Tim Metcalfe, Graham Herring

About Transense Technologies

Based in Oxfordshire, UK, Transense has developed patent-protected sensor systems for use in diverse high growth markets. Developed in conjunction with partners including McLaren Electronic Systems and General Motors, Transense's Surface Acoustic Wave (SAW), wireless, battery-less, sensor systems offer significant advantages over legacy wireless sensor systems. Via three wholly owned divisions, Translogik, SAWSense and IntelliSAW, Transense is targeting the automotive and mining industries, torque, temperature and pressure sensing markets and the high growth global electrical Smart Grid applications markets respectively.

Transense's sensors are also being used in the wind turbine monitoring industry. The Company is part of a consortium of nine companies ("IntelWind") that has begun development on a major EU funded project to improve the efficiency and reliability of wind turbines.

Transense's shares are admitted to trading on AIM, a market operated by the London Stock Exchange (AIM: "TRT").

www.transense.co.uk

Important notice:

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any New Ordinary Shares, nor shall it (or any part of it), or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract or commitment whatsoever with respect to the proposed Placing and the Offer or otherwise. This announcement is not a prospectus and investors should not subscribe for or purchase any New Ordinary Shares referred to in this announcement. Any offer to acquire New Ordinary Shares referred to in this announcement will be made, and any investor should make his investment, solely on the basis of information in the Circular. When made generally available, copies of the Circular may be obtained at no cost through the Company's corporate website (www.transense.co.uk).

The distribution of this announcement and/or the transfer of the New Ordinary Shares in or into jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, this announcement should not be distributed, forwarded to, or transmitted in or into the United States, Australia, Canada, Japan, the Republic of South Africa or New Zealand.

The New Ordinary Shares referred to in this announcement will not be offered in or into any jurisdiction unless such an offer can be made without contravention of any unfulfilled registration or other legal or regulatory requirements. The New Ordinary Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States and may not be offered or sold in the United States absent registration or an exemption from registration. The New Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority, nor have the foregoing authorities passed upon or endorsed the merits of the Placing and the Offer or the accuracy or adequacy of the information contained in this announcement or any other document. Any representation to the contrary is unlawful and is a criminal offence in the United States.

finnCap, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company and no one else in connection with the Placing and the Offer and will not regard any other person (whether or not a recipient of the Circular) as its client in relation to the Placing and the Offer and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in connection with the Placing and the Offer or any other matter referred to herein.

Cautionary note regarding forward looking statements:

This announcement includes certain ''forward-looking statements'' with respect to the business, strategy and plans of the Company and its current goals and expectations relating to its future financial condition and performance. Statements that are not historical facts, including statements about the Company's or the Directors' and/or management's beliefs and expectations are forward looking statements. Words such as ''believes'', ''anticipates'', ''estimates'', ''expects'', ''intends'', ''aims'', ''potential'', ''will'', ''would'', ''could'', ''considered'', ''likely'', ''estimate'' and variations of these words and similar future or conditional expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. A number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements. These factors include, but are not limited to, those discussed in the Circular. Neither the Company nor any member of its group undertake any obligation publicly to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, save in respect of any requirement under applicable laws, the Prospectus Rules, the Disclosure and Transparency Rules and other applicable regulations.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Record Date for participation in the Offer                                                          6.00 p.m. on 26 June

Announcement of the Placing and the Offer                                                                         29 June

Date of publication of the Circular and Application Form; and Offer opens                               30 June

Last date and time for receipt of Forms of Proxy                                              12.00 p.m. on 23 July

Last date and time for receipt of Application Forms                                          12.00 p.m. on 24 July

General Meeting                                                                                            12.00 p.m. on 27 July

Admission and commencement of dealings in Placing Shares on AIM                 8.00 a.m. on 28 July

CREST accounts credited with Placing Shares in uncertificated form                   8.00 a.m. on 28 July

Admission and commencement of dealings in Offer Shares on AIM                  8.00 a.m. on 7 August

CREST accounts credited with Offer Shares in uncertificated form                    8.00 a.m. on 7 August

Definitive share certificates in respect of Placing Shares in certificated            No later than 10 August
form despatched

Definitive share certificates in respect of Offer Shares in certificated form         No later than 10 August
despatched

If any of the details contained in the timetable above should change, the revised times and dates will be notified to Shareholders by means of a Regulatory Information Service announcement. All events listed in the above timetable following the General Meeting are conditional on the passing of Resolutions 1, 2, 4 and 5 at the General Meeting.

References to time are to British Summer Time.

All enquiries in connection with the procedure for application and completion of the Application Form should be made to the Registrar on the shareholder helpline on 0121 585 1131 or if you are calling from outside the UK on [phone]. Calls are charged at Shareholders' network providers' standard rates. Lines are open from 9 a.m. to 5 p.m. (British Summer Time) Monday to Friday (excluding Bank Holidays). Calls to the helpline from outside the UK will be charged at the applicable international rate. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. Please note the Registrar cannot provide financial, legal or tax advice on the merits of the Offer. Calls may be recorded and monitored for security and training purposes.

KEY STATISTICS

Issue Price	1.5 pence
Number of existing Ordinary Shares in issue at the date of this document	295,671,094
Aggregate number of Placing Shares	135,063,334
Maximum number of Offer Shares available	66,666,666
Number of Placing Shares as a percentage of the share capital in issue immediately following Placing Admission	31 per cent.
Maximum percentage of the Enlarged Ordinary Share Capital represented by the Placing Shares and the Offer Shares	41 per cent.
Gross proceeds of the Placing	£2.0 million
Estimated net proceeds of the Placing	£1.8 million
Estimated gross proceeds of the Placing and the Offer	£3.0 million
Estimated net proceeds of the Placing and the Offer	£2.8 million

Notes:

1 The above assumes that the Offer is subscribed for in full and that there is no further issue of Ordinary Shares other than as set out above.

2 Estimated proceeds stated after deducting commissions and expenses related to the Fundraising.

1.         Introduction

The Company today announced a conditional placing with certain existing Shareholders and new institutional and other investors, to raise approximately £2 million before expenses through the issue of 135,063,334 New Ordinary Shares at the Issue Price.

In addition, the Company also announced today a proposed offer for subscription, in order to provide Eligible Shareholders with an opportunity to participate in the proposed issue of New Ordinary Shares. The Company is providing all Eligible Shareholders with the opportunity to subscribe, at the Issue Price, for up to a total of 66,666,666 New Ordinary Shares by way of the Offer, to raise up to £1 million before expenses. The Offer provides Eligible Shareholders with an opportunity to participate in the proposed issue of New Ordinary Shares whilst providing the Company with additional capital to invest in the business of the Group.

The Issue Price is at a discount of 29.4 per cent. to the closing middle market price of 2.125 pence per existing Ordinary Share on 26 June 2015 (being the last practicable date before publication of the Circular).

The Placing and the Offer are each conditional, inter alia, on the passing of certain of the Resolutions by Shareholders at the General Meeting. If the Resolutions necessary to effect the Placing are passed, the Admission of the Placing Shares to trading on AIM is expected to occur at 8.00 a.m. on 28 July 2015. If the Resolutions necessary to effect the Offer are passed, the Admission of the Offer Shares to trading on AIM is expected to occur at 8.00 a.m. on 7 August 2015. The Placing and the Offer are not inter-conditional.

Neither the Placing nor the Offer has been underwritten.

The purpose of the Circular is to provide you with details of the Fundraising, to explain the background to and the reasons for the Fundraising and why the Directors recommend that Shareholders vote in favour of all of the Resolutions to be proposed at the General Meeting.

2.         Background to and reasons for the Placing and Offer

The Directors believe that it is prudent for the Company to seek further capital at this time to strengthen the Company's balance sheet and working capital position.  In particular, the shift within the Company's Translogik business to include a new rental sales model, whilst expected by the Directors to increase the longer term revenues of the Company, has increased the requirement for working capital.  This coupled with the on-going developmental and early stage commercialisation projects being undertaken, particularly within the Company's SAWSense business, means that, in the Directors' view, the Company should seek to raise further capital in order to take advantage of opportunities available to the Company and maximise future shareholder value.

The Directors believe the Fundraising to be the most appropriate way to provide the capital necessary to meet the Company's current requirements.

2.1        Translogik

iTrack

Early sales traction for iTrack, Translogik's real time tyre temperature and pressure monitoring system, was slow, due in large part to the dramatic reduction in capital expenditure by the mining industry, which made it challenging to continue the initial success seen by Translogik in the summer of 2013 with the sales to Otraco and Anglo American. However, the Directors have sought to mitigate this downturn in one of Translogik's key markets by offering the iTrack system via a rental model. This enables customers to purchase through operating expenditure budgets as opposed to making a capital expenditure. This allows mining companies to benefit from the safety improvements, productivity gains and overhead savings provided by using the system without incurring significant capital cost, while providing Translogik with a recurring revenue stream.

The Company has recently announced its first two contract wins using this rental pricing model.  On 9 April 2015 it was announced that Translogik had won a contract to supply its iTrack mining tyre monitoring systems to the 46 large haul trucks operating at the Spence copper mine in Chile, owned by BHP Billiton.  This followed the announcement on 9 March 2015 that Translogik had won a contract through its Australian distributor, Brownfield Engineering and Maintenance PTY LTD, to supply 23 iTrack mining tyre monitoring systems for large haul trucks to the Ravensworth mine, owned by Glencore Mining.

The consequence of what is a new business model for one of the Company's key products is that the previously anticipated one-off orders with large upfront payments are now expected to be replaced with ongoing recurring monthly revenue. While the Directors expect this to provide increased income in the future, it means that the Company currently requires additional working capital to enable it to facilitate future orders.

Probes

As well as targeting the mining and commercial vehicle tyre markets with its iTrack product, Translogik is now directly addressing the much larger passenger car tyre market through a variety of new automated inspection systems that use the Translogik wireless tyre inspection probe as their key component.

Translogik's wireless tyre inspection probes are being used by Squarerigger Inc. as part of its Opti-Tread system. Squarerigger's Opti-Tread system is being marketed in the USA by Snap-on Equipment Inc. through its John Bean brand. An initial order of 220 systems, including 220 Translogik wireless tyre inspection probes, was supplied to Snap-on Equipment Inc. to serve as product demonstrators and initial inventory for its North American sales network. Early feedback is that the system has been well received and follow-on orders are expected.

On 12 March 2015, the Company announced that Translogik had signed an exclusive agreement to supply its wireless tyre inspection probe to Rema Tip Top Holdings UK Limited for use in Rema's new passenger car tyre inspection system, 'Tip Top Tread'.

Most recently, on 1 May 2015, the Company announced that Translogik's wireless tyre inspection probe has been integrated into the new 'Connected Workshop' system from Bosch Automotive Service Solutions (Bosch). Bosch's cloud-based, tablet driven system, has two components, 'Entrance Check' and 'Connected Repair', which are linked to allow vehicle information and test results to be shared across workshop equipment, workshop users and the customer. The Translogik probe can be used at the 'Entrance Check' level, a 5-minute vehicle health check which includes tread depth and tyre pressure measurements. Bosch's system supports Original Equipment Manufacturers (OEM) and aftermarket customers globally.

Although sales traction for the probes in the passenger car tyre market has been slower than initially anticipated, the Directors are encouraged by the current short and medium term sales opportunities.

2.2        SAWSense

SAWSense is the Company's trading division focused on commercialising the Company's surface acoustic wave (SAW) sensing technology.

Work continues on a diverse range of applications for the Company's SAW technology for measuring torque (electric power assisted steering and driveline), temperature and pressure with companies in the automotive and other sectors. This entails different periods of paid engineering support and application development work and the Board is hopeful that in a number of cases this will lead in the medium term to industrialisation with the consequential grant of intellectual property licences by the Company, subject to the satisfactory conclusion of commercial discussions in each case.

The Company's partnership with one of the largest European industrial electronic system manufacturers on a SAW application as part of a condition monitoring system continues to progress. The project has been underway for over two years developing prototypes with SAWSense providing paid engineering support. The customer has started the industrialisation process with production expected to follow in the first half of 2016. The customer has a global interest in SAW technology for multiple applications.

In addition, SAWSense progress continues on a major torque related project with General Electric Co. (GE), one of the world's largest industrial companies. GE has the in-house capability to develop, build and deploy SAWSense torque sensing solutions in multiple applications across a host of industrial sectors with a mixture of both medium and longer-term timescales for development and implementation. As GE is both the developer of the applications, as well as the end-user, this represents an excellent opportunity for the Company.

The existing automotive flexplate projects continue to progress, and there has recently been early stage interest from a new Japanese automotive customer in driveline torque sensor technology.

The Company has additionally received initial EU funding (Horizon 2020) to assess the feasibility of torque sensors for tidal power generation.

2.3        IntelliSAW

IntelliSAW, which provides continuous, wireless, passive critical asset monitoring systems for the electrical transmission and distribution industries, continues to work with numerous companies (now approaching 100), with both pilots and live deployments. More than 3,000 IntelliSAW systems and 19,000 sensors are now installed across 17 countries. Recent successes have come in the form of initial orders from two of the largest US utility companies, for IntelliSAW's Critical Asset Monitoring (CAM) system, that have the potential to scale into significant further sales opportunities.

The CAM solutions provided include an early warning partial discharge (PD) detection system, providing the ability to detect and report events that are indicative of both surface and internal PD.  Employed in conjunction with IntelliSAW's existing temperature and humidity sensing systems, the end user is afforded a comprehensive CAM solution that delivers continuous reporting of the asset's key performance indicators.

Other significant pilots continue and are anticipated at sites in Asia, South America and the Middle East, with some of the world's largest industrial conglomerates.

The IntelliSAW system continues to develop to meet the increasing demands of the market with humidity monitoring and continuous PD detection now offered alongside thermal monitoring. The Board believes that the ability to offer continuous, wireless and passive PD detection in a relatively low-cost and non-invasive manner represents a significant breakthrough approach in the market.

As announced on 9 March 2015, whilst progress at IntelliSAW has been encouraging and the Directors believe the business has good technology and a significant market opportunity, the Directors have been reviewing their strategic options regarding IntelliSAW.  The Company has employed US-based advisers to seek a buyer for the business and discussions are on-going with interested parties.  Whilst discussions with potential purchasers to date have been encouraging, there is no guarantee that a sale will be agreed. Should a sale not be agreed in a timely manner, the Directors will review their remaining strategic options in relation to IntelliSAW.

2.4       Conclusion

Given the increased working capital requirements of the Company's Translogik business and to enable the Company to properly exploit the commercial opportunities it is seeing across all of its businesses, the Directors have decided to raise £2 million, before expenses, through a Placing of New Ordinary Shares with existing Shareholders and new institutional and other investors and up to £1 million, before expenses, through the Offer to all Eligible Shareholders.  The use of proceeds from the Placing and the Offer are set out in paragraph 7 below.

As at 31 May 2015, the Company held cash and cash equivalents of approximately £688,000 (unaudited).

3.             New Director

The Company is delighted to announce that Nigel Rogers has agreed to join the Board with effect from Placing Admission. 

Mr Rogers qualified as a Chartered Accountant in 1983 spending eight years with PwC before moving into industry. He managed the flotation of Stadium Group Plc as Group FD, before progressing to Group CEO in 2001.  Under his leadership, Stadium divested several non-core businesses, focusing on the successful development of its electronic design and manufacturing capabilities in the UK and China to a worldwide customer base. He joined 600 Group Plc as Group CEO in 2012 and led the turnaround of the AIM-listed global machine tool business (Colchester-Harrison), increasing strategic focus on growth of its technology-based laser marking business (Electrox) until April 2015.

In addition, Mr Rogers has agreed to subscribe in the Placing for £30,000 worth of Placing Shares.

4.         Details of the Placing

4.1        Placing

The Company has conditionally raised approximately £2 million before expenses through the Placing. Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM and it is expected that Placing Admission will become effective and that dealings in the Placing Shares will commence on AIM at 8.00 a.m. on 28 July 2015.

4.2       Placing Agreement

Pursuant to the terms of the Placing Agreement, finnCap, as nominated adviser and broker to the Company, has conditionally agreed to use reasonable endeavours to procure Placees for the Placing Shares at the Issue Price. The Placing is conditional, amongst other things, upon the Placing Resolutions being duly passed at the General Meeting and Placing Admission becoming effective on or before 8.00 a.m. on 28 July 2015. The Placing Agreement contains provisions entitling finnCap to terminate the Placing Agreement at any time prior to Placing Admission in certain circumstances. The Placing has not been underwritten and is not subject to claw back pursuant to the Offer. The Placing and the Offer are not inter-conditional.

Pursuant to the terms of the Placing Agreement, the Company has agreed to pay finnCap a corporate finance fee of £35,000 and also commission on the aggregate value of the Placing Shares sold at the Issue Price and to issue 4,307,344 warrants to subscribe for Ordinary Shares.

4.3       General

All Placing Shares will be issued credited as fully paid and will rank pari passu in all respects with the Ordinary Shares in issue from time to time, including the right to receive all dividends and other distributions declared on or after the date on which they are issued.

5.         Details of the Offer

The Company considers it important that, where reasonably practicable, Shareholders have an opportunity to participate in this Fundraising at an equivalent price to that transacted with Placees. Accordingly, on and subject to the terms and conditions of the Offer, the Company invites Eligible Shareholders to apply for, in aggregate, up to 66,666,666 Offer Shares at the Issue Price with a view to raising up to £1 million before expenses through the Offer.

The Company believes that offering all Eligible Shareholders the ability to apply for as many Ordinary Shares as they wish in the Offer (subject to the maximum amount of the Offer and to a minimum application per shareholder of £750 / 50,000 Offer Shares) allows Shareholders who wish to seek to mitigate dilution of their shareholding to achieve this insofar as is practicable in the circumstances. In the event of applications for in excess of the maximum number of Offer Shares available, the Company will (in consultation with finnCap) decide on the basis for allocation, however if this scenario occurs, preference is likely to be given to Eligible Shareholders with smaller shareholdings (who historically may have had less opportunity to participate in placings conducted by the Company).

The principal terms of the Offer and the procedure for exercise and payment are summarised below. However, the Circular should be read in full.

If an Eligible Shareholder does not wish to apply for Offer Shares they should not complete or return the Application Form.

5.1        Principal terms and conditions of the Offer

Eligible Shareholders may apply for, on and subject to the terms and conditions set out in Part III of the Circularand in the accompanying Application Form, any whole number of Offer Shares at the Issue Price subject to the minimum subscription set out below.

Applications must be for a minimum of £750 (i.e. 50,000 Offer Shares) and thereafter in multiples of 5,000 Offer Shares. Applicants may apply for any number of Offer Shares provided that an applicant's shareholding following such issue, when taken alone or together with the shareholding of those of persons acting in concert (as defined in the City Code) with that applicant, must not exceed 29.99 per cent. of the Enlarged Ordinary Share Capital.

In the event that the Offer is oversubscribed, the applications will be scaled back at the discretion of the Company (in consultation with finnCap) with preference likely to be given to Eligible Shareholders with smaller shareholdings (who historically may have had less opportunity to participate in other placings conducted by the Company).

The Offer is subject to Resolutions 2 and 5 being passed at the General Meeting.

The Offer Shares will, when issued and fully paid, rank pari passu in all respects with the Ordinary Shares in issue at the date of Offer Admission, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

The allotment and issue of the Offer Shares will be made upon and be subject to the terms and conditions set out in Part III of the Circular and in the Application Form. Eligible Shareholders will only be entitled to participate in the Offer in accordance with the procedure set out in Part III of the Circular and in the Application Form.

Application will be made to the London Stock Exchange for the Offer Shares to be admitted to trading on AIM. It is expected that Offer Admission will become effective and that dealings in the Offer Shares will commence on AIM at 8.00 a.m. on 7 August 2015.

5.2       Procedure for Application and Payment

Eligible Shareholders wishing to apply for Offer Shares in accordance with the terms of the Offer should complete the enclosed Application Form in accordance with the instructions on it and post it or (during normal business hours only) deliver it by hand, together with a cheque or bankers' draft (see below), for the number of Offer Shares applied for, to Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen B63 3DA so as to arrive as soon as possible and in any event so as to be received not later than 12.00 p.m. on 24 July 2015.

A reply-paid envelope (for use in the UK only) is enclosed with the Circular for the return of duly completed Application Forms and cheques or bankers' drafts. If you post your Application Form, you are recommended to use the accompanying reply-paid envelope or first class post and to allow at least four working days for delivery.

Cheques or bankers' drafts should be made payable to "Neville Registrars Limited re: Transense Technologies PLC" and crossed "A/C payee only". Cheques should be drawn on the personal account to which the Eligible Shareholder has sole or joint title to the funds. Third party cheques will not be accepted with the exception of bankers' drafts/building society cheques where the bank/building society has confirmed the name of account holder on the back of the draft/cheque and has added their stamp. The account name must be the same as that of the Eligible Shareholder.

For further information on the procedure for the application and payment of Offer Shares, Shareholders are advised to read Part III of the Circular.

5.3       Overseas Shareholders

The attention of Eligible Shareholders who have registered addresses outside the United Kingdom, or who are citizens or residents of countries other than the United Kingdom, or who are holding Existing Ordinary Shares for the benefit of such persons, (including, without limitation, custodians, nominees, trustees and agents) or who have a contractual or other legal obligation to forward the Circular or the Application Form to such persons, is drawn to the information which appears in paragraph 3 of Part III of the Circular.

In particular, Eligible Shareholders who have registered addresses in or who are resident in, or who are citizens of, countries other than the UK (including without limitation the United States of America), should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their entitlements under the Offer.

5.4       Taxation

If you are in any doubt about your tax position in respect of the Offer, you should consult your own independent professional adviser.

6.         Additional Authority to Allot New Ordinary Shares

Notwithstanding the benefits of the Placing and Offer in terms of providing growth and working capital to the Company, the Board is seeking additional general authority to enable it to issue further New Ordinary Shares, up to the limits described in paragraph 10 below (Resolutions 3 and 6), in order to afford the Company greater flexibility in funding and supporting its expected growth.

7.         Use of Proceeds

The Company is seeking to raise up to approximately £3 million through the Fundraising. The Company considers the principal areas of focus, in relation to which it proposes to utilise the proceeds of the Fundraising, to be the provision of working capital to enable Translogik to enter into further contracts on a rental basis, the expansion of sales channels, general working capital purposes and the reorganisation cost regarding the possible disposal of IntelliSAW.

The table below sets out the anticipated use of funds from the £2.0 million raised in the Placing:

		£000's
Working capital		976
Working capital for Translogik rental models		400
Expanding sales channels		300
Reorganisation cost re possible disposal of IntelliSAW		350
Total		2,026

It is expected that the Offer (on the assumption that it meets its full potential subscription) will raise a further £1 million. The net proceeds of the Offer are expected to be applied pro rata to the uses set out in the table above and to provide the Company with an additional working capital buffer to be applied at the discretion of the Board.

8.         Shareholder Approval

For the Offer and the Placing to proceed, Shareholder approval is required to:

(a)          give the Directors the authority to allot the Placing Shares and to dis-apply statutory pre-emption rights in respect thereof; and

(b)          give the Directors the authority to allot the Offer Shares and to dis-apply statutory pre-emption rights in respect thereof.

Shareholder approval is required to give the Directors the additional general authority referred to in paragraph 6 above.

In order to obtain the necessary Shareholder approvals, a General Meeting of the Company is to be held at which the Resolutions will be proposed. Further information regarding the General Meeting is set out in paragraph 10 below.

The Offer is NOT conditional upon the Placing being approved by Shareholders at the General Meeting. Should the Placing not proceed, the Company not obtain additional funding via the Offer, the Directors strongly believe that the Company will face considerable uncertainty as to its future and, in all probability, it will have insufficient funding in place to enable it to continue to operate its business. Clearly, the occurrence of such a scenario would seriously inhibit the delivery of shareholder value.

9.         EIS/VCT Schemes

The Company has applied for and received confirmation of advance assurance from HMRC that the Placing Shares placed with VCT Schemes are expected to constitute a qualifying holding for such VCT Schemes. HMRC has also confirmed that the Placing Shares should satisfy the requirements for tax relief under EIS. The Company received confirmation, capped in total at £2.1 million, of advance assurance of qualifying status under VCT Schemes and EIS on 30 April 2015.

10.        General Meeting

A notice convening the General Meeting to be held at The Euston Office, Oneustonsq, 40 Melton Street, London NW1 2FD at 12.00 p.m. on 27 July 2015 is set out at the end of the Circular. At the General Meeting, the following Resolutions will be proposed:

Ordinary resolutions:

(1)          an ordinary resolution to authorise the Directors to allot up to 135,063,334 Placing Shares in connection with the Placing;

(2)          an ordinary resolution to authorise the Directors to allot up to 66,666,666 Offer Shares in connection with the Offer;

(3)          an ordinary resolution to generally authorise the Directors to allot relevant securities (as defined in section 551 of the Act) otherwise than pursuant to the Fundraising up to an aggregate nominal value of £1,658,003.65 (165,800,365 New Ordinary Shares), being an amount equal to one third of the Enlarged Ordinary Share Capital (assuming the maximum number of Placing Shares and Offer Shares are issued). The authority sought by this Resolution 3 will last for a period of 15 months from the date of passing of the Resolution or, if earlier, until the date of the next annual general meeting of the Company;

Special resolutions:

(4)          a special resolution to empower the Directors to issue the Placing Shares for cash on a non-pre-emptive basis;

(5)          a special resolution to empower the Directors to issue the Offer Shares for cash on a non-pre-emptive basis and otherwise in accordance with the terms of the Offer, as set out in the Circular;

(6)          a special resolution to empower the Directors to issue new equity securities of up to an aggregate nominal amount of £497,401.09 (49,740,109 New Ordinary Shares) for cash on a non-pre-emptive basis, being an amount equal to 10 per cent. of the Enlarged Ordinary Share Capital (assuming the maximum number of Placing Shares and Offer Shares are issued). The authority sought by this Resolution 6 will last for a period of 15 months from the date of passing of the Resolution or, if earlier, until the date of the next annual general meeting of the Company.

11.        Further Information

Your attention is drawn to the Risk Factors relating to the Group set out in Part II of the Circular and the terms and conditions of the Offer set out in Part III of the Circular.

12.       Action to be taken by Shareholders

In respect of the General Meeting

A reply-paid Form of Proxy is enclosed for use at the General Meeting. Whether or not you intend to be present at the meeting you are requested to complete, sign and return this Form of Proxy to the Company's registrars, Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen B63 3DA as soon as possible but in any event so as to arrive not later than 12.00 p.m. on 23 July 2015. The completion and return of this Form of Proxy will not preclude you from attending the General Meeting and voting in person should you subsequently wish to do so.

In respect of the Offer

Eligible Shareholders wishing to participate in the Offer should carefully read the Application Form, the accompanying instructions and Part III of the Circular and send the Application Form along with the appropriate remittance to Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen B63 3DA so as to arrive as soon as possible and in any event so as to be received no later than 12.00 p.m. on 24 July 2015.

13.       Recommendation

The Directors consider that the Fundraising will promote the success of the Company for the benefit of its members as a whole. Accordingly, the Directors unanimously recommend and strongly urge Shareholders to vote in favour of the Resolutions at the General Meeting as they intend to do in respect of their own beneficial holdings of 5,639,351 Ordinary Shares representing 1.91 per cent. of the existing Ordinary Shares in issue as at the last practicable date before publication of the Circular.

Yours faithfully

David Ford

Chairman

DEFINITIONS

"Act"		Companies Act 2006
"Admission"		Placing Admission and/or Offer Admission (as the context so requires)
"AIM"		a market operated by London Stock Exchange plc
"AIM Rules"		AIM Rules for Companies published by the London Stock Exchange (as amended or reissued from time to time)
"Application Form"		the personalised application form for use in the Offer and enclosed with the Circular for use by Eligible Shareholders
"Board" or "Directors"		the board of directors of the Company, as at the date of the Circular, whose names are set out in the Circular
"Business Day"		any day (excluding Saturdays and Sundays) on which banks are open in London for normal banking business
"City Code"		City Code on Takeover and Mergers
"Closing Date"		24 July 2015
"Company" or "Transense"		Transense Technologies plc
"CREST'		the relevant system (as defined in the Uncertified Securities Regulations 2001 (S.I. 2001/3755)) for the paperless settlement of trades and the holding of uncertificated securities, operated by Euroclear UK & Ireland Limited, in accordance with the same regulations
"CREST Regulations"		the Uncertificated Securities Regulations 2001 (S.I. 2001/3755), as amended from time to time
"EIS"		Enterprise Investment Scheme under the provisions of Part 5 of the Income Tax Act 2007
"Eligible Shareholders"		Shareholders on the register of members of the Company on the Record Date with addresses for service in the United Kingdom
"Enlarged Ordinary Share Capital"		the Ordinary Share capital of the Company in issue immediately following Offer Admission
"Excluded Territories"		any jurisdiction except the United Kingdom
"Existing Options"		Options granted prior to the Record Date including Options granted under the Unapproved Discretionary Share Option Scheme and the Enterprise Management Share Option Scheme
"Existing Ordinary Shares"		Ordinary Shares in issue at the Record Date
"finnCap"		finnCap Limited, nominated adviser and broker to the Company, and any of its affiliates
"Form of Proxy"		the form of proxy for use by Shareholders at the General Meeting
"FSMA"		the Financial Services and Markets Act 2000 (as amended)
"Fundraising"		together, the Placing and the Offer
"General Meeting"		the general meeting of the Company, convened for 12.00 p.m. on 27 July 2015, and any adjournment thereof, notice of which is set out in the Notice, which will consider the Resolutions
"Group"		Transense and its subsidiaries
"HMRC"		Her Majesty's Revenue & Customs
"IntelliSAW"		a trading division of Transense
"Issue Price"		1.5 pence per New Ordinary Share
"London Stock Exchange"		London Stock Exchange plc
"New Ordinary Shares"		new Ordinary Shares issued pursuant to the Placing, the Offer or otherwise
"Notice"		the notice of General Meeting set out at the end of the Circular
"Offer"		the offer for subscription of up to 66,666,666 Offer Shares on the terms set out in the Circular
"Offer Admission"		the admission of the Offer Shares to trading on AIM having become effective in accordance with the AIM Rules
"Offer Shares"		up to 135,063,334 New Ordinary Shares to be issued pursuant to the Offer
"Official List"		the list of all securities that have been approved by the UKLA for trading on a UK regulated market
"Options"		options to subscribe for Ordinary Shares granted by the Company
"Ordinary Shares"		ordinary shares in the capital of the Company having a nominal value of 1 pence each
"Placee"		a subscriber for Placing Shares under the Placing
"Placing"		the placing of the Placing Shares with certain institutional and other investors at the Issue Price
"Placing Admission"		the admission of the Placing Shares to trading on AIM having become effective in accordance with the AIM Rules
"Placing Agreement"		the conditional agreement dated on or around the date of the Circular between the Company and finnCap relating to the Placing
"Placing Resolutions"		the Resolutions relating to the Placing, being Resolutions 1 and 4
"Placing Shares"		the 135,063,334 New Ordinary Shares to be issued pursuant to the Placing
"Prospectus Rules"		The Prospectus Rules published by the FCA (as amended or reissued from time to time)
"Record Date"		the record date for participation in the Offer, being 6.00 p.m. on 26 June 2015
"Resolutions"		the resolutions to be proposed at the General Meeting, details of which are set out in the Notice
"SAWSense"		a trading division of Transense
"Shareholder(s)"		holder(s) of Ordinary Shares from time to time
"Translogik"		a trading division of Transense
"UK" or "United Kingdom"		the United Kingdom of Great Britain and Northern Ireland
"UKLA"		the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part VI of FSMA
"uncertificated" or "in uncertificated form"		an Ordinary Share recorded on a company's share register as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST
"United States" or "U.S."		the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia
"VCT Scheme"		Venture Capital Trust scheme under the provisions of Part 6 of the Income Tax Act 2007

A reference to "£" is to pound sterling, being the lawful currency of the UK.

A reference to "€" is to the Euro, being the official currency of 19 of the 28 member states of the European Union.

Information on Nigel Rogers

The following information is disclosed pursuant to Schedule Two paragraph (g) of the AIM Rules for Companies:

Mr Nigel Foster Rogers, age 53

Current Directorships / Partnerships:

Can Vives Limited

Previous Directorships / Partnerships (held in the past five years):

Ingram Electronic Services LimitedStadium Group PLC

Stadium Electrical Holdings Limited

Stadium Power Limited

Hale End Holdings Limited

Kingslo Limited

KRP Power Source (UK) Limited

Valuegolden Limited

Ferrus Power Limited

Fox industries Limited

Stadium Zirkon UK Limited

Zirkon Holdings Limited

Stadium Electronics Limited

600 Group PLC

600 Group UK Limited

600 SPV1 Limited

600 SPV2 Limited

Ariel pressings Limited

Electrox Laser Limited

TYKMA Inc - US

600 Group Inc - US

600 (Machine Tools) Pty - Australia

Mr Rogers has subscribed for 2,000,000 ordinary shares in the Placing and has no other holding in any ordinary shares in the Company.  There are no other disclosures required in relation to Rule 17 or paragraph (g) of Schedule Two of the AIM Rules for Companies.

 

END

 

 

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