ARE.L Regulatory News (ARE)

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

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 (AS AMENDED) (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018) ("EUWA")). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

29 March 2021

Arena Events Group plc

("Arena", the "Company" or,

together with its subsidiaries and subsidiary undertakings, the "Group")

Proposed Subscription and Placing to raise gross proceeds of £11 million

Arena Events Group plc (AIM: ARE) is pleased to announce that it has conditionally raised £11 million (before fees and expenses) by way of a subscription for 10,714,285 new Ordinary Shares and a placing of 67,857,143 new Ordinary Shares, in each case at a price of 14 pence per share.

The net proceeds of the Capital Raising will be used to take advantage of opportunities presented by current market conditions to acquire undervalued assets, including the potential acquisition of Aztec Shaffer.

Highlights:

· Placing and Subscription to raise £11 million (before fees and expenses).

· Issue Price of 14 pence per New Ordinary Share, representing a 3.4 per cent. discount to the closing middle market price of 14.5 pence per Existing Ordinary Share on 26 March 2021, the last Business Day before the announcement of the Placing and Subscription.

· £10.4 million net proceeds of the Capital Raising will be used to fund the Group's share of the potential acquisition of the business and assets of Aztec Shaffer, further strengthen the Group's balance sheet and provide cash for other opportunistic acquisitions.

· The Capital Raising is being conducted in two separate tranches, with the First Placing Shares and the First Subscription Shares to be issued pursuant to the Company's existing authorities to allot equity securities and disapply pre-emption rights granted at its annual general meeting held on 1 September 2020, whilst the second tranche consisting of the Second Placing Shares and the Second Subscription Shares is inter-conditional and conditional, inter alia, on the passing by Shareholders of certain Resolutions at the General Meeting to be held on 14 April 2021.

· The First Placing Shares and the First Subscription Shares are expected to be admitted to trading on AIM on 31 March 2021. The Second Placing Shares (together with the Second Subscription Shares) are expected to be admitted to trading on AIM on 15 April 2021.

· A circular, which will provide further details of the Capital Raising and include a Notice of General Meeting (the "Circular") is expected to be published and sent to Shareholders on or around 29 March 2021.

Greg Lawless, Chief Executive Officer of Arena commented:

"The Group continues to feel the impact of COVID-19 restrictions on sporting and other live events around the world. However, we have continued to manage our cost base, seek alternative revenue streams and provide infrastructure for those events that have occurred over the last few months, including the Super Bowl and the three recent golf swing events in the Middle East. We are hopeful that the global vaccination programmes being rolled out across the world will enable the gradual return of a normal calendar of live events later this year.

"We completed the acquisition of the assets of Williams Party Rentals in San Jose in the middle of last year and continue to look at other similar potential distressed acquisition opportunities. We are therefore taking the opportunity to raise additional funds now to allow us to finance bids for strategic assets, such as Aztec Shaffer, and other possible targets as they arise."

Total Voting Rights

Application has been made for 24,771,083 new Ordinary Shares to be admitted to trading on AIM, relating to the First Placing Shares and the First Subscription Shares, which is expected to take place at 8.00 a.m. on 31 March 2021.

Following First Admission, the Company's issued share capital will comprise 272,481,916 Ordinary Shares, of which none are held in treasury. The above figure of 272,481,916 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the voting rights of the Company under the FCA's Disclosure Guidance and Transparency Rules.

Further information about the Capital Raising is set out in the Appendix to this announcement.

The person responsible for arranging the release of this announcement on behalf of the Company is Greg Lawless, Chief Executive Officer of the Company.

For further information please contact:

Enquiries:

Arena Events Group plc

Greg Lawless, CEO (contact via Alma)

Steve Trowbridge, CFO

Cenkos Securities (Nomad & Broker)

Max Hartley / Max Gould (Corporate Finance) 0207 397 8900

Julian Morse (Sales)

Alma PR (Financial PR)

John Coles, Josh Royston, Helena Bogle 0203 405 0205

Appendix

1. Background to and reasons for the proposed Capital Raising

The COVID-19 pandemic has had a profound impact on the event management industry over the past 12 months. The Company raised funds in March 2020 to strengthen the Group's balance sheet with the intention of seeing it through to the recommencement of the global event industry. Arena has since been able to control costs, win a range of COVID-19 related relief work and manage its cash resources through this time.

Many other event businesses around the world have not been as organised and have struggled in the face of the pandemic. This has been the case particularly with less well capitalised and highly leveraged businesses, leading some to the brink of insolvency. Arena has been contacted by various distressed event business stakeholders across a variety of markets, with a view to engaging in a range of transactions.

Arena is therefore raising approximately £11 million (before expenses) to take advantage of the opportunities presented by the current COVID-19 affected market to acquire attractive assets on very favourable terms, including the potential acquisition of the assets of Aztec Shaffer, either as a whole or of Aztec only.

2. Bid for Aztec Shaffer

Aztec Shaffer filed for Chapter 11 relief in the United States Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court") in November 2020. After obtaining post-filing secured financing, Aztec Shaffer is currently pursuing a sale of substantially all of its assets in an auction process pursuant to Section 363 of the United States Bankruptcy Code. Arena has been in negotiations during the preceding months in regards to a potential acquisition of Aztec Shaffer, and intends to submit a bid for its operating business and assets, alongside co-bidders Summit Investment Management LLC ("Summit"), a specialised debt acquisition and credit investment firm, and the existing largest secured lender to Aztec Shaffer (the "Co-Bidders"), both of which would provide funding as part of a successful joint bid. The outcome of the bidding process will not be known until around 9 April 2021, or at a date set by the Bankruptcy Court.

Overview of Aztec Shaffer

Aztec Shaffer LLC comprises two business operations. Aztec Events & Tents ("Aztec") is a premier party and event rental specialist with a warehouse and showroom in the Houston metropolitan area. Shaffer Sports & Events ("Shaffer") is one of the largest providers of hospitality structures and event management services for multi-day sporting and large tented events with a focus on professional golf tournaments nationwide.

The Aztec business is a very similar business in size and focus to the Arena Stuart Rentals operation based in San Jose, California. It has a diversified customer and event base, with its products including party/wedding tents, tables, chairs, linens, tabletop items, food service equipment, tenting, furniture, dance floors and decorative items. Historically Aztec has broadly averaged one third of Aztec Shaffer revenue.

The Shaffer business has historically averaged approximately two thirds of Aztec Shaffer's revenues and approximately 70% to 75% of the total business rental fleet. The significant majority of Shaffer's historical revenues come from golf, supporting in excess of 15 tournaments each year (pre-COVID-19). Tournaments include the Players Championship and Presidents Cup. Shaffer originally signed a contract with the PGA Tour in 2000, which was renewed in 2008, 2012 and 2017. Arena will endeavour to secure a new contract to service a significant portion of the US Tour events post completion of the acquisition. Other sports served by Shaffer include motorsport such as F1 (at the Circuit of the Americas, Austin Texas) and horse racing (Breeders Cup). Shaffer's focus on sports gives a strong alignment with Arena Event Services ("AES"), albeit with AES having a broader customer mix and serving many sectors away from sports.

Acquisition Rationale

The acquisition of Aztec Shaffer would allow the Group to acquire a business with net book value of rental assets and equipment of $37.2 million (as at December 2019); with original purchase value in excess of $62 million; and averaged run-rate adjusted EBITDA of $6.0 million FY17-FY19 (pre-COVID) and $7.7 million for FY17- FY18.

The acquisition would broaden the Group's North America national tenting presence operating from a brand new, purpose built operational facility on the outskirts of Houston along with a $20 million plus turnover, full-line service provider operating from a warehouse and showroom facility in downtown Houston, Texas, the fourth largest city in the US.

If acquired, the rental assets and equipment present future rental fleet utilisation opportunities (including reduced capex), smoothing the current peaks seen in both AES and Shaffer. Arena also expects to be able to extract cost savings from Aztec Shaffer's existing central overheads.

Proposed acquisition terms

Aztec Shaffer

Arena intends to submit a bid for the business and assets of Aztec Shaffer via a newly incorporated company ("NewCo"), funded by an approximate $3.35 million equity contribution, with secured non-recourse debt and working capital facilities provided by the Co-Bidders.

The following other terms have been agreed in principle between Arena and the Co-Bidders:

· Arena's equity contribution will be approximately $3.35 million (£2.4 million) for a 50% equity stake.

· Arena will hold 50%, Summit 30% and Aztec Shaffer's existing largest secured lender will hold 20%, of NewCo equity, respectively.

· The Co-Bidders will provide Term Loan Facilities to NewCo, as well as a $5 million revolving credit facility (the "RCF").

· No cash interest will be payable by NewCo on the Co-Bidders' term loans for the first six months, thereafter cash interest will accrue at 10-13% per annum, with further capitalised Payment-In-Kind (PIK) interest amounts. The RCF will accrue cash interest at US Prime plus 200bps, with no PIK amounts. None of the facilities will carry early prepayment fees.

· Arena and the Co-Bidders intend to refinance the Co-Bidder's term loans and the RCF with a conventional asset-backed lending structure post completion.

· Arena will manage and operate NewCo and be paid an annual management fee of $250,000 in year one, rising to $400,000 in year three.

· Arena will have a call option on the Co-Bidders' equity after three years for an agreed market value using a formula based on 6x trailing EBITDA. The Co-Bidders have a put option on their equity after 2.5 years for an agreed market value using the same formula. The call option has a minimum payment set at approximately $14 million.

· The Co-Bidders will receive certain financing fees and currently intend to re-invest these in new Ordinary Shares of Arena at market price, conditional upon completion of the Aztec Shaffer acquisition.

· If the bid is submitted but is unsuccessful, under certain circumstances Arena will be entitled to a break fee plus expenses.

Aztec

To cater for the possibility that the NewCo's bid for the entire Aztec Shaffer is not successful, Arena also intends to submit a separate bid for the business and assets of Aztec only, also via NewCo, funded by an approximate $2 million equity contribution and up to $1 million of working capital, with secured non-recourse debt provided by Summit. Only Arena and Summit will participate in the NewCo equity in the event that an Aztec only bid is the successful bid.

The following other terms have been agreed in principle between Arena and Summit:

· Arena's equity contribution will be approximately $2.0 million (£1.25 million) for a 65% equity stake, with a further $1.0 million made available via a first priority loan, for working capital purposes, for a maximum $3.0 million (£2.15 million) total cash commitment

· Summit will hold the 35% balance of NewCo equity and provide term loan facilities to NewCo on a broadly comparable basis to those described above in the Newco bid for Aztec Shaffer.

· Arena and Summit intend to refinance NewCo's borrowings with a conventional asset-backed lending structure post completion.

· Arena will have a call option on Summit's equity in the first twenty-four months post closing for a minimum payment of $4 million and thereafter based on a formula based on 6x trailing EBITDA, subject to an initial minimum of $3 million. Summit has a put option on their equity after two years for an agreed market value using the same formula.

Expected timetable of principal events

The dates and times set out in the expected timetable above are (except where noted otherwise) references to London time and may be adjusted by the Company and Cenkos or by the Bankruptcy Court. In such circumstances details of the new dates will be notified to the London Stock Exchange and an announcement will be made through a Regulatory Information Service.

3. Use of Proceeds

The Directors intend that approximately $3.35 million (£2.4 million) of the net proceeds of the Capital Raising will fund Arena's equity consideration commitment for the NewCo Aztec Shaffer bid, with a further £0.6 million to fund the Arena share of deal legal and advisory fees and the combined costs of the Capital Raising. The remainder will be applied to strengthen the balance sheet and fund other opportunistic acquisitions. In the event of a successful Aztec only bid (in place of the Aztec Shaffer bid), Arena will have a total cash contribution of approximately $3.0 million (£2.15 million).

Arena requires the proceeds from the Capital Raising to be opportunistic and move swiftly in any negotiations, and to have the flexibility to not resort to excessive leverage or sharing the upside with third party funders/partners.

In the event that neither bid is successful, the intended bid funds plus any break fees will be applied to strengthen the balance sheet, including the potential repayment of the Lombard Odier Investment Managers Group (LOIM) short-term financing facilities, and to provide cash for other opportunistic acquisitions.

4. Current Trading

The global events market is slowly beginning to return, with the Company having recently completed work at the three golf "swing" projects in Abu Dhabi, Dubai, and Saudi Arabia, and the US Super Bowl, one of the largest such projects undertaken by Arena in the US. The event calendar continues to open up in the US, with the US Division soon moving on site for the delivery of the PGA Championships in May on the Ocean Course at Kiwah Island. Discussions are well underway for a return to the summer season in the UK based on the recent "roadmap" announcement, with events likely to begin to return from late June onwards in the UK (e.g.Wimbledon and the Open), but likely later in the Middle East.

As stated in the Company's unaudited interim financial results for the six-months ended 30 September 2020, despite the COVID-19 pandemic having a significant impact on business, the Company had a first half FY21 Adjusted EBITDA of £4.4 million. The traditionally quieter second half is expected to produce a small loss for H2 FY21. Since the last published results, the Group has continued to carefully target revenue opportunities, control costs and manage its cash resources. As at 26 February 2021 gross cash was £14.3 million (September 2020: £15.5 million) and net debt was £26.2 million. In addition, the £15.6 million CLBILS facility was undrawn.

5. Details of the Subscription

TasHeel has conditionally agreed to subscribe for 10,714,285 Subscription Shares (in two tranches comprising 3,377,875 First Subscription Shares and 7,336,410 Second Subscription Shares) at the Issue Price. The Subscription Shares will, when issued, be credited as fully paid and will rank pari passu with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of Ordinary Shares after Second Admission. The Subscription Shares will represent approximately 3.3 per cent. of the Enlarged Share Capital. The First Subscription is conditional, inter alia, on the Placing Agreement becoming unconditional in all respects as regards the First Placing. The Second Subscription is conditional, inter alia, upon the passing of the Resolutions, Second Admission and the Placing Agreement becoming unconditional in all respects.

6. Details of the Placing

The Company has conditionally raised gross proceeds of £9.5 million (before expenses) through the placing of the Placing Shares at the Issue Price. The Placing Shares will represent approximately 20.8 per cent. of the Enlarged Share Capital of the Company. The Issue Price represents a 3.4 per cent. to the closing middle market price of 14.5 pence per Existing Ordinary Share on 26 March 2021, the last Business Day before the announcement of the Placing and Subscription. The Placing comprises the First Placing and the Second Placing.

The First Placing comprises 21,393,211 New Ordinary Shares. The First Placing and First Admission are not conditional on the Second Placing, the Second Subscription or on Second Admission. It is therefore possible that the First Placing Shares and the First Subscription Shares will be allotted and issued and First Admission will become effective but the Second Placing Shares and the Second Subscription Shares are not allotted and issued and Second Admission doesn't occur.

The Second Placing comprises 46,463,932 New Ordinary Shares. The Second Placing is conditional, inter alia, upon the passing of the Resolutions, the Placing Agreement becoming unconditional in all respects and Second Admission.

Greg Lawless, Chief Executive Officer, has agreed to subscribe for 250,000 Placing Shares. Steve Trowbridge, Chief Financial Officer, has agreed to subscribe for 71,428 Placing Shares. Ken Hanna, Chairman, has also agreed to subscribe for 178,571 Placing Shares.

7. Related party transaction

TasHeel has agreed to subscribe for 10,714,285 Subscription Shares. TasHeel currently holds approximately 27.2 per cent. of the Existing Ordinary Shares and is therefore a "substantial shareholder" under the AIM Rules. As such the subscription for shares constitutes a related party transaction under the AIM Rules.

The Directors of the Company, having consulted with Cenkos as the Company's nominated adviser, consider the terms of TasHeel subscription to be fair and reasonable insofar as the independent Shareholders are concerned.

8. The Placing Agreement

Pursuant to the terms of the Placing Agreement, Cenkos has conditionally agreed to use its reasonable endeavours to procure subscribers for the Placing Shares (comprising shares to be issued pursuant to the First Placing and the Second Placing) at the Issue Price. Cenkos has conditionally placed the Placing Shares with certain institutional and other investors at the Issue Price. Neither the First Placing nor the Second Placing is being underwritten by Cenkos.

The First Placing is conditional, inter alia, on:

· the Placing Agreement not having been terminated in accordance with its terms prior to First Admission;

· the Circular and the Form of Proxy having been published and an electronic copy of the Circular having been submitted to the Exchange;

· the Subscription Agreement having become unconditional in relation to the First Subscription in all respects (save in respect of any condition relating to the Placing Agreement becoming unconditional and Admission) and the net proceeds of the First Subscription having been received in cleared funds by the Company by no later than the Business Day prior to First Admission; and

· First Admission becoming effective by no later than 8.00 a.m. on 31 March 2021 or such later time and/or date as the Company and Cenkos may agree (being no later than 8.00 a.m. on 30 April 2021).

The Second Placing is conditional, inter alia, on:

· the bid for Aztec Shaffer having been submitted before Second Admission;

· the passing of the Resolutions;

· the Placing Agreement having become unconditional in all respects save in respect of Second Admission) and not having been terminated in accordance with its terms;

· the Subscription Agreement having become unconditional in all respects (save in respect of any condition under the Placing Agreement becoming unconditional and Second Admission) and the net proceeds of the Second Subscription having been received in cleared funds by the Company by no later than the Business Day (as defined in the Placing Agreement) prior to Second Admission; and

· Second Admission becoming effective by no later than 8.00 a.m. on 15 April 2021 or such later time and/or date as the Company and Cenkos may agree (being no later than 8.00 a.m. on 30 April 2021).

The Placing Agreement contains customary warranties given by the Company to Cenkos as to matters in relation to, inter alia, the accuracy of the information in the Circular and other matters relating to the Group and its business. In addition, the Company has provided a customary indemnity to Cenkos in respect of liabilities arising out of or in connection with the Placing. Cenkos is entitled to terminate the Placing Agreement in certain circumstances prior to Admission including circumstances where any of the warranties are found not to be true or accurate or were misleading in any respect, the failure of the Company to comply in any material respect with any of its obligations under the Placing Agreement, the occurrence of certain force majeure events or a material adverse change affecting the condition, or the earnings or business affairs or prospects of the Group as a whole, whether or not arising in the ordinary course of business.

9. Settlement and dealings

The New Ordinary Shares will be issued credited as fully paid and will rank pari passu with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of Ordinary Shares after Admission. The New Ordinary Shares are not being made available to the public and are not being offered or sold in any jurisdiction where it would be unlawful to do so.

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM.

Settlement of the First Placing Shares and the First Subscription Shares and Admission of the First Placing Shares and the First Subscription Shares are expected to take place on or before 8.00 a.m. on 31 March 2021. The First Placing and the First Subscription are being conducted pursuant to existing authorities to allot equity securities granted at the Company's annual general meeting in September 2020 and accordingly are not conditional upon the passing of the Resolutions, but are conditional upon First Admission becoming effective and the Placing Agreement not being terminated in accordance with its terms prior to First Admission.

Settlement of the Second Placing Shares and the Second Subscription Shares and Second Admission is expected to take place on or around 8.00 a.m. 15 April 2021. The Second Placing and the Second Subscription is conditional upon, among other things, the relevant resolutions required to implement the Second Placing and the Second Subscription being duly passed by the Shareholders at the General Meeting, Second Admission becoming effective, and the Placing Agreement not being terminated in accordance with its terms prior to Second Admission.

10. General Meeting

The Notice of General Meeting will be set out in the Circular expected to be sent to Shareholders on or around 29 March 2021.

11. Major Shareholder Voting Intentions

The Company has received an irrevocable undertaking from significant shareholder, LOIM, to vote in  favour of the resolutions required to implement the Capital Raising with respect to 46,240,000 (approximately 79%) of the Ordinary Shares under LOIM's management, equating to 18.7% of the Existing Ordinary Shares. The irrevocable undertaking does not cover the total LOIM Arena shareholding due to regulatory and liquidity requirements limiting LOIM's ability to give hard irrevocables on its entire holding.

The Company has also received a signed letter of intent from significant shareholder, TasHeel, that its current intention is to vote in favour of the resolutions required for the Capital Raising at the General Meeting, in respect of their holding of 67,264,950 ordinary shares, equating to 27.2% of the Existing Ordinary Shares.

The Directors of the Company hold 4.5% of the Existing Ordinary Shares and intend to vote in favour of the resolutions, bringing the total of declared voting intentions in favour of implementing the Capital Raising to 50.3% of the Existing Ordinary Shares.

12. Effect of the Capital Raising

Upon Admission, the Enlarged Share Capital is expected to be 326,282,261 Ordinary Shares. On this basis, the New Ordinary Shares will represent approximately 24.1 per cent. of the Enlarged Share Capital.

Following the completion of the Capital Raising, two Shareholders (TasHeel and LOIM) will hold in aggregate 41.6 per cent. of the Enlarged Share Capital. The interests of these Shareholders may not, in all cases, be aligned with the interests of other Shareholders. 

While these Shareholders have a shareholding in aggregate above 41.8 per cent. of the Ordinary Shares, they will (if they were to act together) have the ability to block special resolutions proposed at general meetings of the Shareholders. In order to voluntarily terminate trading on AIM, Shareholders would need to pass a special resolution. Therefore, while these Shareholders (acting together) could block such a resolution, they do not have the unilateral power to cause trading on AIM to be terminated.

TasHeel and LOIM will each have holdings individually in excess of 17.9 per cent. of the Enlarged Share Capital. If any one of these Shareholders (together with anyone with whom they were acting in concert) was, through purchases of further Ordinary Shares, to increase their shareholding to or above 30 per cent of the Ordinary Shares, they would be required under Rule 9 of the Takeover Code to make a general offer to all the remaining Shareholders to acquire their Ordinary Shares. Such an offer must be made in cash (or with a full cash alternative) at a price not less than the highest price paid by the person required to make the offer, or any person acting in concert with him, for any interest in Ordinary Shares during the 12 months prior to the announcement of the offer. Alternatively, either of these Shareholders could make a general offer (not under Rule 9 of the Takeover Code) to all the remaining Shareholders to acquire their Ordinary Shares. Given their significant existing shareholdings, the number of Ordinary Shares they would have to acquire to successfully complete a takeover and take the company private is lower than would be the case for a third party offeror.

The table below sets out, so far as is known to the Company, those persons who are interested in Ordinary Shares carrying 3 per cent. or more of the voting rights in the Company as at 26 March 2021 (being the latest practicable date prior to the date of this announcement) and as they are expected to be on Admission:

Substantial shareholders before and after Admission

1Calculated as at Second Admission and therefore assuming that all of the Placing Shares and Subscription Shares are issued.

Definitions

The following definitions apply throughout this announcement:

Important notices

The distribution of this announcement and any other documentation associated with the Capital Raising into jurisdictions other than the United Kingdom may be restricted by law. Persons into whose possession these documents come should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws or regulations of any such jurisdiction. In particular, such documents should not be distributed, forwarded to or transmitted, directly or indirectly, in whole or in part, in, into or from the United States, Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction where to do so may constitute a violation of the securities laws or regulations of any such jurisdiction (each a "Restricted Jurisdiction").

This announcement is not an offer of securities for sale into the United States. The New Ordinary Shares have not been and will not be registered under the US Securities Act 1933 (the "US Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States. The New Ordinary Shares may not be offered or sold in the United States, except pursuant to an applicable exemption from, or in a transaction not subject to the registration requirements of, the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The New Ordinary Shares are being offered and sold only in "offshore transactions" outside the United States in reliance on, and in accordance with, Regulation S under the US Securities Act. No public offering of the New Ordinary Shares is being made in the United States.

There will be no public offer of the New Ordinary Shares in the United States. The New Ordinary Shares are being offered and sold outside the US in reliance on Regulation S under the US Securities Act. The New Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the US or any other US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the New Ordinary Shares or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the US.

The New Ordinary Shares have not been and will not be registered under the relevant laws of any state, province or territory of any Restricted Jurisdiction and may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within any Restricted Jurisdiction except pursuant to an applicable exemption from registration requirements. There will be no public offer of New Ordinary Shares in Australia, Canada, Japan, or the Republic of South Africa.

This announcement is issued solely to and directed at: (i) persons in member states of the European Economic Area that are qualified investors within the meaning of Article 2(e) of the Prospectus Regulation ("EU Prospectus Regulation"); (ii) persons in the United Kingdom that are qualified investors within the meaning of the UK version of the EU Prospectus Regulation as it forms part of UK domestic law by virtue of EUWA (a) who have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); (b) who are high net worth entities falling within article 49(2)(a) to (d) of the Order; or (c) are other persons to whom it may otherwise lawfully be communicated (each, a "Relevant Person"). No other person should act on or rely on this announcement and persons distributing this announcement must satisfy themselves that it is lawful to do so. By accepting the terms of this announcement, investors represent and agree that they are a Relevant Person.

This announcement must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement or the Placings relate is available only to Relevant Persons and will be engaged in only with Relevant Persons. As regards all persons other than Relevant Persons, the details of the Placings set out in this announcement are for information purposes only.

This announcement has been issued by, and is the sole responsibility of, the Company. No person has been authorised to give any information or to make any representations other than those contained in this announcement and, if given or made, such information or representations must not be relied on as having been authorised by the Company or Cenkos. Subject to the AIM Rules, the issue of this announcement shall not, in any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this announcement or that the information contained in it is correct at any subsequent date.

Cenkos, 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 Capital Raising and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Capital Raising and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Capital Raising or any matters referred to in this announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed on Cenkos by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, Cenkos does not accept any responsibility whatsoever for the contents of this announcement, and makes no representation or warranty, express or implied, for the contents of this announcement, including its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the New Ordinary Shares or the Capital Raising, and nothing in this announcement is or shall be relied upon as, a promise or representation in this respect whether as to the past or future. Cenkos accordingly disclaims to the fullest extent permitted by law all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this announcement or any such statement.

No statement in this announcement is intended to be a profit forecast or profit estimate for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share of the Company.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the Directors' current intentions, beliefs or expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and the Company's markets. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual results and developments could differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this announcement are based on certain factors and assumptions, including the Directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's operations, results of operations, growth strategy and liquidity. Whilst the Directors consider these assumptions to be reasonable based upon information currently available, they may prove to be incorrect. Save as required by applicable law or by the AIM Rules, the Company undertakes no obligation to release publicly the results of any revisions to any forward-looking statements in this announcement that may occur due to any change in the Directors' expectations or to reflect events or circumstances after the date of this announcement.

This announcement should not be considered a recommendation by the Company, Cenkos or any of their respective directors, officers, employees, advisers or any of their respective affiliates, parent undertakings, subsidiary undertakings or subsidiaries of their parent undertakings in relation to any purchase of or subscription for the New Ordinary Shares. Price and volumes of, and income from, securities may go down as well as up and an investor may not get back the amount invested. It should be noted that past performance is no guide to future performance. Persons needing advice should consult an independent financial adviser.

Solely for the purposes of the product governance requirements contained within of Chapter 3 of the FCA Handbook Production Intervention and Product Governance Sourcebook (the "UK Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK Product Governance Requirements) may otherwise have with respect thereto, the New Ordinary Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of investors who meet the criteria of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in paragraph 3 of the FCA Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all distribution channels (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors (for the purposes of UK Product Governance Requirements) should note that: (a) the price of the New Ordinary Shares may decline and investors could lose all or part of their investment; (b) the New Ordinary Shares offer no guaranteed income and no capital protection; and (c) an investment in the New Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Capital Raising. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Cenkos will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapter 9A or 10A respectively of the FCA Handbook Conduct of Business Sourcebook; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the New Ordinary Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the New Ordinary Shares and determining appropriate distribution channels.

Neither the content of the Company's website nor any website accessible by hyperlinks to the Company's website is incorporated in, or forms part of, this announcement.

Certain figures contained in this announcement, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this announcement may not conform exactly to the total figure given.

All references to time in this announcement are to London time, unless otherwise stated.