BHRD.L Regulatory News (BHRD)

RNS Number : 1008W

Be Heard Group PLC

09 November 2017

 

The headline for the Be Heard Group announcement released on 09.11.17 at 16.35 under RNS No 0979W should read Proposed Fundraising

The announcement text is unchanged and is reproduced in full below.

NOT FOR RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, THE REPUBLIC OF IRELAND, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR IMMEDIATE RELEASE.

 

Be Heard Group plc

("Be Heard", the "Company" or the "Group")

 

Acquisition of The Corner

Proposed Placing to raise a minimum of approximately £2.2 million

Proposed issue of Convertible Loan Notes to raise £4.0 million

 

Be Heard announces the proposed acquisition of The Corner Communications (London) Limited ("The Corner"), an integrated creative agency based in London, for a maximum consideration of £12 million. The Company also announces its intention to raise gross proceeds of approximately £6.2 million to fund the Acquisition, through the issue of not less than 78,000,000 new ordinary shares (the "Placing Shares") at a minimum price of 2.8 pence per share through a cash placing and £4.0 million through the proposed issue of Convertible Loan Notes.

 

Summary

· Further progress with strategy of building an integrated end to end marketing services group mapping the digital customer journey

· Business model already generating additional value with 10 clients served by two or more Be Heard companies

· Proposed acquisition of The Corner (integrated creative agency) for a maximum consideration of £12m

· Strong strategic rationale: acquisition adds brand, creative, communications and social marketing skills, and facilitates more C-suite client relationships

· Consideration to be funded by a combination of new shares and convertible loan notes

· Board retains confidence in full year results, underpinned by new business momentum

 

Acquisition highlights

· Award-winning integrated creative agency based in London

- Focus on brand and creative strategy, communications planning, digital design, social marketing, and events and experiential

- Broad multi-sector experience and client base with strong client relationships across the charity, entertainment, FMCG, retail sports and travel sectors

- High revenue visibility with 70 per cent. of net revenue retained or contracted

· Initial consideration of £7.95 million with further maximum deferred earn-out consideration payable of up to £4.05 million

Fundraising highlights

· Placing to raise gross proceeds of not less than approximately £2.2 million at a minimum price of 2.8 pence per Ordinary Share

· The Company has also received conditional commitments to subscribe for £4.0 million Convertible Loan Notes

· The Acquisition, Placing and issue of Convertible Loan Notes are interconditional

· The net proceeds of the Placing and the issue of the Convertible Loan Notes will be used to fund the consideration for the Acquisition

· The issue of the Placing Shares is conditional upon, amongst other things, the passing of Resolution 1 at the General Meeting to be held on 27 November 2017, and the admission of the Placing Shares to trading on AIM

· The Placing is being conducted through an accelerated bookbuild process (the "Bookbuild") which will be launched immediately following this announcement and will be subject to the terms and conditions set out in the Appendix (this announcement, together with the Appendix, the "Announcement")

· Certain Directors of the Company have indicated their intention to subscribe for Placing Shares. Further details of the Placing and any participation by such Directors will be set out in the announcement to be made on the closing of the Placing which is expected to be made later today

 

Current trading

The Board retains its confidence in the Group's full year results, underpinned by excellent new business performance in the first half of FY17 continuing into the second half. Across the Group, 36 new clients have been won since the beginning of year, including Addison Lee, GSK, MasterCard, Pittsburgh Paint Group and Pret A Manger, with ten clients now served by two or more Group companies and the first Group clients won. This supports the Board's confidence in the Group's pure play strategy and business model.

 

N+1 Singer Advisory LLP ("N+1 Singer") and Dowgate Capital Stockbrokers Limited ("Dowgate") have been appointed as joint bookrunners (together the "Joint Bookrunners") in respect of the Placing. N+1 Singer is acting as nominated adviser to the Company.

 

The Placing is conditional upon the passing of Resolution 1 to be held at a General Meeting of the Company. A circular is expected to be posted on 10 November 2017 (the "Circular") notifying shareholders of a general meeting for the purpose of considering the relevant resolutions expected to be convened at the offices of Lewis Silkin LLP, 5 Chancery Lane, London EC4A 1BL at 10.00 a.m. on 27 November 2017.

 

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

 

Enquiries:

 

Be Heard Group plc	+44 20 3828 6269
Peter Scott, Executive Chairman
Robin Price, Chief Financial Officer & Chief Operating Officer
N+1 Singer	+44 20 7496 3000
Mark Taylor / Lauren Kettle
Dowgate	+44 20 3903 7715
James Serjeant
FTI Consulting (Financial PR)	+44 20 3727 1000
Jamie Ricketts / Niamh Fogarty

 

About Be Heard

 

Be Heard (AIM: BHRD) is a digital marketing services group helping clients solve the challenges they face in the connected world. To achieve this, the Company acquire and connect exceptionally-talented companies, providing management experience, access to deeper resources and a strong platform for growth.

 

The Company's four partner companies are:

 

agenda21, a digital media and analytics agency, which became a partner on admission in November 2015 www.agenda21digital.com

 

MMT, a user experience ("UX"), design and build agency, which became a partner in May 2016 www.mmtdigital.co.uk

 

Kameleon, a content marketing agency, which became a partner in December 2016 www.kameleon.co.uk

 

Freemavens, a data-driven analytics and insight consultancy, which became a partner in February 2017 www.freemavens.com

 

www.beheardgroup.com

@Be_Heard_Group

 

FURTHER INFORMATION

Details of the Placing

The Company intends to raise not less than approximately £2.2 million pursuant to the Placing, although it reserves the right to increase or reduce the amount being raised based on investor demand at its absolute discretion. The Bookbuild will open with immediate effect following this Announcement. The timing of the closing of the Bookbuild, the number of Placing Shares, pricing and allocations are at the discretion of the Company and the Joint Bookrunners.

 

An announcement will be made on the closing of the Bookbuild which is expected to be made by 8.00 a.m. tomorrow, 10 November 2017. 

 

The Placing is conditional, amongst other things, upon:

 

· the passing of Resolution 1 at the General Meeting;

· the Placing Agreement becoming or being declared unconditional in all respects and not having been terminated in accordance with its terms prior to Admission;

· the subscription for the Convertible Loan Notes having been completed; and

· Admission becoming effective by no later than 8.00 a.m. on 29 November 2017 or such later time and/or date (being no later than 8.00 a.m. on 15 December 2017) as N+1 Singer, Dowgate and the Company may agree.

 

The Placing Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

 

Shareholders are reminded that the Placing is conditional, amongst other things, on the passing of Resolution 1 to be proposed at the General Meeting. Shareholders should be aware that if Resolution 1 is not approved at the General Meeting, the Placing will not proceed. The Placing is not underwritten.

 

Application will be made to the London Stock Exchange for the admission of the New Ordinary Shares (comprising the Placing Shares and the Consideration Shares) to trading on AIM. Subject to Shareholder approval of Resolution 1 at the General Meeting, it is expected that Admission will occur and that dealings in the New Ordinary Shares will commence at 8.00 a.m. on 29 November 2017, at which time it is also expected that the New Ordinary Shares will be enabled for settlement in CREST. The Enlarged Share Capital of the Company will be confirmed by way of an announcement prior to Admission, once the number of Consideration Shares to be issued is known. Further details of the consideration due in respect of the Acquisition are set out below at the section headed 'Terms of the Acquisition'.

 

Background to and reasons for the Fundraising and the Acquisition

Strategic overview and recent progress

Be Heard is building a focused digital marketing services group that offers clients an end to end service across the digital customer journey.

 

Consumption and marketing expenditure continue to shift to digital services, with global advertising expenditure on the internet set to overtake that on broadcast television this year, providing a growing opportunity for Be Heard.

 

The Group's business model is based on acquiring exceptionally talented digital marketing specialists and connecting them to deliver better, broader, more holistic solutions for clients.

 

With four operating subsidiaries and a team of 240 people, Be Heard has shown strong revenue growth and new business performance, and is generating significant additional value through cross-referrals and new Group sales.

 

Building on the success to date the Group is seeking to accelerate growth, provide a broader range of services and build further scale by acquiring an integrated creative agency.

 

Acquisition

On 9 November 2017, the Company entered into the Acquisition Agreement with the Vendors, pursuant to which it has conditionally agreed to acquire the entire issued share capital of The Corner, conditional upon the Company obtaining Shareholder approval of the Resolutions to be proposed at the General Meeting.

 

Business overview

The Corner is an award-winning integrated creative agency based in London, whose core capabilities include brand and creative strategy, communications planning, digital design, social marketing, and events and experiential. The agency has broad multi-sector experience and received creative awards and commendations for its work include The Drum Marketing Awards (Mencap), IPM Awards (Orbis), CIM Awards (Senet Group), PROMAX BDA Global Agency of the Year (National Geographic Channel) and APG Creative Strategy (Oasis).

 

Customers

The Corner has a broad client base with strong client relationships across the charity, entertainment, FMCG, retail, sports and travel sectors including Adidas, blu, Fullers, Jigsaw, L'Oreal, National Accident Helpline, Oasis (Coca-Cola), Perrigo and Relish Broadband. Recent client wins include Crabtree & Evelyn, Jackpotjoy, LateRooms.com and Superbreak.

 

The agency was placed 7th in Campaign New Business Rankings for creative agencies in 2016, making it the highest ranking independent agency, and strong revenue visibility, with 70 per cent. of net revenue retained or contracted.

 

The strength of The Corner's client relationships was reflected in the Company's due diligence with a top quartile net promoter score (being a score measuring customer satisfaction and likelihood of recommending an agency to others) of 8.27 (out of a possible 10) versus a sector norm for advertising agencies of 6.99.

 

Financials

 

	Dec-2016 (£)	Dec-2015 (£)	Dec-2014 (£)
Billings	9,315,706	7,369,827	7,770,975
Net Revenue	5,578,085	3,764,694	3,462,192
Operating Profit	613,630	25,541	8,001
Profit Before Taxation	647,033	25,541	8,001
Fixed Assets	70,409	63,189	70,758
Current Assets	2,167,340	3,223,141	1,708,063
Net Assets	555,230	40,929	22,114

 

Normalised EBITDA for the year to December 2016 is £1.1m as a result of adjustments to reduce director salaries to market rate, transaction costs and pension provision.

 

Key personnel

The Corner was founded in 2012 by Neil Simpson, Neil Hourston and Tom Ewart.

 

Neil Simpson, Chief Executive Officer

Neil spent his early career with advertising agencies Ogilvy and Mather and BBH, before moving client side at Coca-Cola in Atlanta in 1994, where he led the award winning 'Eat Football, Sleep Football, Drink Coca-Cola' campaign that ran during Euro'96. He subsequently spent five years at Adidas in Amsterdam as Global Advertising Director, and was named 'Global Advertiser of the Year' at the Clio's in New York in 2000. In 2002, Neil became Global Brand Director at Vodafone in the UK and in 2007 returned to agency side as CEO of Publicis London.

 

Neil Hourston, Chief Strategy Officer

Neil started his career in qualitative research, before moving into advertising as Chief Strategy Officer at TBWA, during which time the agency was runner up as Campaign's Agency of The Year three times running, and Grey London. He has worked with Sony PlayStation, News International, Nissan, Apple and Muller, and won both APG and IPA planning awards.

 

Tom Ewart, Chief Creative Officer

Tom was previously Art Director at AMV BBDO, where he became the youngest ever board member, and Executive Creative Director of Publicis London. He has previously been a winner of awards at Cannes, BIG, BTAA, Clio's and Creative Circle.

 

Strategic rationale

The Corner provides a number of strategic benefits for the Group. It adds brand and creative strategy, communications planning, digital design and social marketing skills to the Group existing capabilities. Additionally, The Corner will help facilitate C-suite relationships through its lead strategy / creative agency status. The nature of these relationships and the early input into the creative process that The Corner has with its clients also provides opportunities to cross sell broad range of services from other Group companies.

 

Bringing The Corner into the Group will also allow the Group to provide integrated creative and media solutions to clients, which is increasingly important to maximise clients' performance and return on investment in digital marketing.

 

Finally, in addition to the Group's media planning and buying capabilities, The Corner will benefit from the Group's analytics & insight and UX, design & build skills and resources.

 

Terms of the Acquisition

The Company will acquire 100 per cent. of the issued share capital of The Corner on the following basis:

 

a) Initial consideration of £7,950,649.69, payable as £5,354,141.44 in cash and by the issue of fully paid Ordinary Shares in the Company to the value of £2,596,508.25 at the mean average of the middle-market price at closing of the Ordinary Shares on each day of a 20 dealing day period ending on (and including) the dealing day which falls two dealing days prior to the date on which the Acquisition is completed.

 

b) Deferred consideration of £600,000, subject to both net revenue and EBITDA for 2018 being greater than those for 2016. Any deferred consideration is due four months following the end of 2018 and is payable 50 per cent. in cash, 50 per cent. by the issue of fully paid Ordinary Shares in the Company.

 

c) Subject to both net revenue and EBITDA in 2020 being greater than £7.0m and £1.4m respectively, an Earn Out consideration ("EO") calculated at 7.2x the average EBITDA achieved by The Corner in the years to December 2018, 2019 and 2020, less the total of the initial consideration and any deferred consideration previously paid. The maximum payable under the EO is such that when added to the initial consideration and any deferred consideration does not exceed £12,000,000. Any EO is due four months following the end of 2020 and is payable 50 per cent. in cash, 50 per cent. by the issue of fully paid Ordinary Shares in the Company.

 

Any shares issued under the provisions of the deferred consideration or EO are to be priced at the higher of (i) the average share price over the previous 12 months and (ii) the issue price of the Consideration Shares (to be determined per the calculation set out in paragraph a) above).

 

Other than in regard to the initial consideration, the Company has the option to settle any share-based consideration by the issue of loan notes.

 

The Company will additionally pay the vendors of The Corner an amount of £737,489 in cash on completion of the Acquisition, representing the excess working capital in The Corner as at the "locked box" date of 31 May 2017.

 

Current trading and prospects

The Board retains its confidence in the Group's full year results, underpinned by excellent new business performance in the first half of FY17 continuing into the second half. At the time of the interim results, released on 11 September 2017, over 85 per cent. of forecast revenue for 2017 had been billed or confirmed.

 

Across the Group, 36 new clients have been won since the beginning of year, including Addison Lee, GSK, MasterCard, Pittsburgh Paint Group and Pret A Manger.

 

Group companies are now pitching together as Be Heard, and are benefitting from access to broader thinking, wider skill sets and increased business opportunities.

 

A global soft drinks brand and top 10 UK retail brand were the Group's the first successes under this approach, with significant additional assignments being won from existing customers, including Unilever and Vodafone. Ten clients are now served by two or more Group companies, affirming the Board's confidence in the Group's business model.

 

The Group headcount is now 240 people, up 23 per cent. since December 2016.

 

Convertible Loan Notes

The principal terms and conditions of the Convertible Loan Notes are as follows;

a) the principal amount of the Convertible Loan Notes shall be £4.0 million;b) the Convertible Loan Notes shall become redeemable on 29 November 2021, being the fourth anniversary of their issue (the period from issue to such date the "Initial Term"), and extendable by two 1-year periods (each an "Extension Period"), upon consent of both the Noteholders and the Company;c) the Noteholders may convert the Convertible Loan Notes into Ordinary Shares at a conversion price of 3.5 pence, in minimum tranches of £50,000 (or a Noteholder's entire holding, if less);

d) interest on the Convertible Loan Notes shall accrue at 8 per cent. per annum during the Initial Term and 10 per cent. per annum during either Extension Period, and be payable to the Noteholders quarterly in cash;

e) a premium is payable in the event of a redemption as a result of a change of control, early redemption by the Company (permissible at any time following the first anniversary of issue of the Convertible Loan Notes) or in the event of a default; such premium being 12 per cent. per annum, subject to a maximum of 25 per cent, of the principal amount of the Convertible Loan Notes; and

f) covenants will be provided in relation to the Convertible Loan Notes to cover certain financial metrics of the Group, including EBITDA growth, cumulative cash generation, and debt levels.

The issue of the Convertible Loan Notes will not proceed unless the Placing Agreement becomes unconditional in all respects (other than Admission).

Use of proceeds

The Directors intend that the net proceeds of the Fundraising to be received by the Company (being approximately £5.6 million, comprising gross proceeds of £2.2 million in respect of the Placing and £4.0 million in respect of the issue of the Convertible Loan Notes, less total expenses of approximately £0.6 million) will be used by the Group primarily for the following purposes:

Cash consideration payable in respect of the Acquisition	£5.4 million
Group working capital	£0.2 million

 

 

APPENDIX - TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING.

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX AND THE INFORMATION CONTAINED HEREIN (TOGETHER THE "ANNOUNCEMENT") IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, CANADA, THE REPUBLIC OF IRELAND, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY THE LONDON STOCK EXCHANGE, NOR IS IT INTENDED THAT IT WILL BE SO APPROVED.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA") WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 ("FSMA"), AS AMENDED ("QUALIFIED INVESTORS"), BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(e) OF DIRECTIVE 2003/71/EC AS AMENDED, INCLUDING BY THE 2010 PROSPECTUS DIRECTIVE AMENDING DIRECTIVE (DIRECTIVE 2010/73/EC) AND TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE (THE "PROSPECTUS DIRECTIVE"); AND (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) (INVESTMENT PROFESSIONALS) OF THE FSMA (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES INTHE COMPANY.

THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES. THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. SUBJECT TO CERTAIN EXCEPTIONS AND AT THE SOLE DISCRETION OF THE COMPANY, THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES, THE UNITED KINGDOM OR ELSEWHERE. 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 ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES. THE DISTRIBUTION OF THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS, AND ANY PERSON INTO WHOSE POSSESSION THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, SUCH RESTRICTIONS.

No action has been taken by the Company, N+1 Singer and Dowgate or any of their respective affiliates, agents, directors, officers or employees that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required.

This Announcement or any part of it does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia), Canada, the Republic of Ireland, Australia, Japan, the Republic of South Africa or any other jurisdiction in which the same would be unlawful. No public offering of the Placing Shares is being made in any such jurisdiction.

All offers of the Placing Shares will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus. In the United Kingdom, this Announcement is being directed solely at persons in circumstances in which section 21(1) of the FSMA does not apply.

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 Fundraising 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; the relevant clearances have not been, and will not be, obtained for the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Placing Shares and the Placing Shares have not been, nor will they be, registered under or offering in compliance with the securities laws of any state, province or territory of Canada, the Republic of Ireland, Australia, Japan, or the Republic of South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Canada, the Republic of Ireland, Australia, Japan, 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 right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any action.

This Announcement should be read in its entirety. In particular, you should read and understand the information provided in this "Important Information" section of this Announcement.

By participating in the Placing, each person who is invited to and who chooses to participate in the Placing (a "Placee") will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix.

In particular, each such Placee represents, warrants, undertakes, agrees and acknowledges (amongst other things) that:

1 it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

2 in the case of a Relevant Person in a member state of the EEA which has implemented the Prospectus Directive (each, a "Relevant Member State") who acquires any Placing Shares pursuant to the Placing:

2.1 it is a Qualified Investor within the meaning of Article 2(1)(e) of the Prospectus Directive;

2.2 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:

2.2.1 the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than Qualified Investors or in circumstances in which the prior consent of N+1 Singer has been given to the offer or resale; or

2.2.2 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;

3 it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the representations, warranties, indemnities, acknowledgements, undertakings and agreements contained in this Announcement;

4 it understands (or if acting for the account of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in this Appendix; and

5 except as otherwise permitted by the Company and subject to any available exemptions from applicable securities laws, it (and any account referred to in paragraph 3 above) is outside the United States acquiring the Placing Shares in offshore transactions as defined in and in accordance with Regulation S under the Securities Act.

No prospectus

No prospectus or other offering document has been or will be submitted to be approved by the Financial Conduct Authority ("FCA") in relation to the Placing Shares and Placees' commitments will be made solely on the basis of the information contained in this Announcement and any information publicly announced through a Regulatory Information Service (as defined in the AIM Rules for Companies) by or on behalf of the Company on or prior to the date of this Announcement (the "Publicly Available Information") and subject to any further terms set forth in the form of confirmation to be sent to individual Placees.

Each Placee, by participating 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 information (other than the Publicly Available Information), representation, warranty or statement made by or on behalf of N+1 Singer, Dowgate and the Company or any other person and none of N+1 Singer, Dowgate and the Company or any other person acting on such person's behalf nor any of their respective affiliates has or shall have any liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement. 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. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Details of the Placing Agreement and the Placing Shares

N+1 Singer and Dowgate has today entered into a placing agreement (the "Placing Agreement") with the Company under which, on the terms and subject to the conditions set out in the Placing Agreement, N+1 Singer and Dowgate, as agents for and on behalf of the Company, have agreed to use its reasonable endeavours to procure Placees for the Placing Shares at the Placing Price.

The Placing Shares will, when issued, be subject to the articles of association of the Company and credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the Placing Shares.

Application for admission to trading

Application will be made to the London Stock Exchange for admission of the Placing Shares to trading on AIM.

It is expected that Admission will take place no later than 8.00 a.m. on 29 November 2017 and that dealings in the Placing Shares on AIM will commence at the same time.

Principal terms of the Placing

1 N+1 Singer is acting as nominated adviser, placing agent, joint bookrunner and broker, as agent for and on behalf of the Company. N+1 Singer is authorised and regulated in the United Kingdom by the FCA and is acting exclusively for the Company and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than the Company for providing the protections afforded to the customers of N+1 Singer or for providing advice in relation to the matters described in this Announcement.

2 Dowgate is acting as placing agent, joint bookrunner and broker, as agent for and on behalf of the Company. Dowgate is authorised and regulated in the United Kingdom by the FCA and is acting exclusively for the Company and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than the Company for providing the protections afforded to the customers of Dowgate or for providing advice in relation to the matters described in this Announcement.

3 Participation in the Placing will only be available to persons who may lawfully be, and are invited by N+1 Singer and Dowgate to participate. N+1 Singer and Dowgate and any of their respective affiliates are entitled to participate in the Placing as principal.

4 The price per Placing Share (the "Issue Price") is a minimum of 2.8 pence and is payable to N+1 Singer or Dowgate (as agent of the Company) by all Placees.

5 The Placing Price and the number of Placing Shares will be agreed between the Company and the Joint Brokers following completion of the Bookbuild.

6 The completion of the Bookbuild will be determined by N+1 Singer and Dowgate in their absolute discretion and shall then be announced on a Regulatory Information Service as soon as is practicable following the completion of the Bookbuild.

7 To bid in the Bookbuild, prospective Placees should communicate their bid by telephone to their usual sales contact at N+1 Singer or Dowgate. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at the Placing Price, being a minimum 2.8 pence per Placing Share. Bids may be scaled down by N+1 Singer and Dowgate on the basis referred to in paragraph 8 below.

8 The Bookbuild is expected to close no later than 8.00 a.m. on 10 November 2017 but may be closed earlier or later at the discretion of N+1 Singer and Dowgate. N+1 Singer and Dowgate may, in agreement with the Company accept bids that are received after the Bookbuild has closed. The Company reserves the right to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion. The final allocations of the Placing Shares (including as to the identity of the Placees and the number of shares allocated to each Placee at the Placing Price) shall be determined by N+1 Singer and Dowgate in their absolute discretion.

9 Each Placee's allocation is determined by N+1 Singer and Dowgate in its discretion following consultation with the Company and has been or will be confirmed orally by N+1 Singer or Dowgate and a form of confirmation will be dispatched as soon as possible thereafter. That oral confirmation will give rise to an irrevocable, legally binding commitment by that person (who at that point becomes a Placee), in favour of N+1 Singer, Dowgate and the Company, under which it agrees to acquire the number of Placing Shares allocated to the Placee at the Issue Price and otherwise on the terms and subject to the conditions set out in this Appendix and in accordance with the Company's articles of association. Except with N+1 Singer's or Dowgate's written consent, such commitment will not be capable of variation or revocation at the time at which it is submitted.

10 Each Placee's allocation and commitment will be evidenced by a form of confirmation issued to such Placee by N+1 Singer or Dowgate. The terms of this Appendix will be deemed incorporated in that form of confirmation.

11 Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to N+1 Singer or Dowgate (as agent for the Company), to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Issue Price and the number of Placing Shares such Placee has agreed to acquire and the Company has agreed to allot and issue to that Placee.

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

13 All obligations of N+1 Singer band Dowgate under the Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing".

14 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.

15 To the fullest extent permissible by law and applicable FCA rules, none of (a) N+1 Singer or Dowgate, (b) any of N+1 Singer's or Dowgate's affiliates, agents, directors, officers, consultants, (c) to the extent not contained within (a) or (b), any person connected with N+1 Singer or Dowgate as defined in the FSMA ((b) and (c) being together "affiliates" and individually an "affiliate" of N+1 Singer or Dowgate), (d) any person acting on N+1 Singer's or Dowgate's behalf, shall have any liability (including to the extent permissible by law, any fiduciary duties) to Placees or to any other person whether acting on behalf of a Placee or otherwise. In particular, neither N+1 Singer or Dowgate nor any of their respective affiliates shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of their conduct of the Fundraising or of such alternative method of effecting the Fundraising as N+1 Singer, Dowgate and the Company may agree.

Registration and Settlement

If Placees are allocated any Placing Shares in the Placing they will be sent a form of confirmation or electronic confirmation by N+1 Singer or Dowgate, as soon as it is able which will confirm the number of Placing Shares allocated to them, the Issue Price and the aggregate amount owed by them to N+1 Singer or Dowgate.

Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed as directed by N+1 Singer or Dowgate in accordance with either the standing CREST or certificated settlement instructions which they have in place with N+1 Singer or Dowgate.

It is expected that settlement will take place on or about 29 November 2017 in CREST on a basis in accordance with the instructions set out in the conditional trade confirmation. Settlement will be through N+1 Singer against CREST ID: ATMAY, Designation: PLACINGS or through Dowgate against CREST ID: 842, Designation: SUSPENSE, as the case may be.

Settlement of transactions in the Placing Shares (ISIN: GB00BT6SJV45) following Admission will take place within the CREST system, subject to certain exceptions. Settlement through CREST is expected to take place on 27 November 2017 unless otherwise notified by N+1 Singer and/or Dowgate and Admission is expected to occur no later than 8.00 a.m. on 29 November 2017 unless otherwise notified by N+1 Singer or Dowgate. If the Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the conditional trade confirmation is copied and delivered immediately to the relevant person within that organisation.

Trade Date: 27 November 2017

Settlement Date: 29 November 2017 (Electronic)

ISIN code for the Placing Shares: GB00BTSJV45

SEDOL code for the Placing Shares: BT6SJV4

Admission and settlement may occur at an earlier date, which if achievable, will be set out in the Circular. Settlement will be on a delivery versus payment basis. However, in the event of any difficulties or delays in the admission of the Placing Shares to CREST or the use of CREST in relation to the Placing, N+1 Singer, Dowgate and the Company may agree that the Placing Shares should be issued in certificated form. N+1 Singer and Dowgate reserve the right to require settlement for the Placing Shares, and to deliver the Placing Shares to Placees, by such other means as they deem necessary if delivery or settlement to Placees is not practicable within the CREST system or would not be consistent with regulatory requirements in a Placee's jurisdiction.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above, in respect of either CREST or certificated deliveries, at the rate of 2 percentage points above prevailing LIBOR as determined by N+1 Singer and Dowgate.

Each Placee agrees that if it does not comply with these obligations, N+1 Singer or Dowgate may sell, charge by way of security (to any funder of N+1 Singer or Dowgate) or otherwise deal with any or all of their Placing Shares on their behalf and retain from the proceeds, for N+1 Singer's or Dowgate's own account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due and any costs and expenses properly incurred by N+1 Singer and/or Dowgate as a result of the Placee's failure to comply with its obligations. The relevant Placee will, however, remain liable for any shortfall below the amount owed by it and for any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of their Placing Shares on their behalf. Legal and / or beneficial title in and to any Placing Shares shall not pass to the relevant Placee until such time as it has fully complied with its obligations hereunder.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees must ensure that, upon receipt, the conditional form of confirmation 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 United Kingdom stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.

The obligations of N+1 Singer and Dowgate under the Placing Agreement are, and the Placing is, conditional upon, inter alia:

(a) the passing of the Resolutions (without any amendment which has not been previously approved by N+1 Singer and Dowgate) at the General Meeting (or any adjournment thereof);

(b) each of the warranties contained in the Placing Agreement being and remaining true, accurate and not misleading until Admission;

(c) the Company having complied in all material respects with its obligations and having satisfied the conditions under the Placing Agreement which fall to be performed or satisfied prior to Admission;

(d) the Placing Agreement not having been terminated by N+1 Singer and Dowgate in accordance with its terms;

(e) the Company procuring that a Circular and Form of Proxy are sent to each Qualifying Shareholder and a Circular and Form of Proxy are sent to Overseas Shareholders who have notified an address in the United Kingdom for the service of documents in accordance with the articles of association and an Application Form is sent to each Qualifying non-CREST Shareholder;

(f) the issue of the Convertible Loan Notes having been completed; and

(g) Admission occurring by not later than 8.00 a.m. on 29 November 2017 (or such later date as N+1 Singer, Dowgate and the Company may agree in writing, in any event being not later than the Long Stop Date);

(all conditions to the obligations of N+1 Singer and Dowgate included in the Placing Agreement being together, the "conditions").

If any of the conditions set out in the Placing Agreement are not fulfilled or, where permitted, waived in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as N+1 Singer, Dowgate and the Company may agree, provided that the time for satisfaction of the condition set out in (f) above shall not be extended beyond 8.00 a.m. on 15 December 2017), or the Placing Agreement is terminated in accordance with its terms, the Fundraising will lapse and the Placee's rights and obligations shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.

By participating in the Placing, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Termination of the Fundraising" below and will not be capable of rescission or termination by it.

Certain conditions may be waived in whole or in part by N+1 Singer and Dowgate, in their absolute discretion by notice in writing to the Company and N+1 Singer and Dowgate may also agree in writing with the Company to extend the time for satisfaction of any condition. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

N+1 Singer and Dowgate may terminate the Placing Agreement in certain circumstances, details of which are set out below.

Neither N+1 Singer, Dowgate or the Company nor any of their respective affiliates, agents, directors, officers or employees 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 any of them 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 any of them 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 N+1 Singer and Dowgate.

Termination of the Fundraising

N+1 Singer and Dowgate may terminate the Placing Agreement, in accordance with its terms, at any time prior to Admission if, inter alia:

1 any of the warranties and undertakings in the Placing Agreement were untrue or inaccurate in any material aspect, or were misleading when given or deemed given; or

2 the Company fails to comply with its obligations under the Placing Agreement or the terms of the Fundraising, which N+1 Singer and Dowgate consider material in the context of the Fundraising; or

3 any statement contained in the circular is or has become untrue, inaccurate or misleading in any respect or a matter has arisen which would constitute a material omission from the circular; or

4 there has occurred a force majeure event, or any material adverse change has occurred in the condition, earnings, business affairs or business prospects of the Company and its subsidiary undertakings (taken as whole).

If the Placing Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in this Announcement shall cease and terminate at such time and no claim can be made by any Placee in respect thereof.

By participating in the Placing, each Placee agrees with N+1 Singer, Dowgate and the Company that the exercise by N+1 Singer, Dowgate or the Company of any right of termination or any other right or other discretion under the Placing Agreement shall be within the absolute discretion of N+1 Singer, Dowgate or the Company and that neither of N+1 Singer, Dowgate nor the Company need make any reference to such Placee and that neither N+1 Singer, Dowgate and the Company, nor any of their respective affiliates, agents, directors, officers or employees shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.

By participating in the Placing, each Placee agrees that its rights and obligations terminate only in the circumstances described above and under the "Conditions of the Fundraising" section above and will not be capable of rescission or termination by it after the issue by N+1 Singer and Dowgate of a form of confirmation confirming each Placee's allocation and commitment in the Placing.

Representations, warranties and further terms

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) irrevocably represents, warrants, acknowledges, undertakes and agrees (for itself and for any such prospective Placee) that in each case as a fundamental term of such Placee's application for Placing Shares (save where N+1 Singer and Dowgate expressly agree in writing to the contrary):

1 it has read and understood this Announcement in its entirety and that its acquisition of the Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained herein and that it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Fundraising, the Company, the Placing Shares or otherwise, other than the information contained in this Announcement and the Publicly Available Information;

2 it has not received a prospectus or other offering document in connection with the Fundraising and acknowledges that no prospectus or other offering document: (a) is required under the Prospectus Directive; and (b) has been or will be prepared in connection with the Fundraising;

3 the Ordinary Shares are admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules, which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;

4 it has made its own assessment of the Placing Shares and has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing and neither N+1 Singer, Dowgate and the Company nor any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company or any other person other than the information in this Announcement, or the Publicly Available Information; nor has it requested neither of N+1 Singer, Dowgate and the Company, any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of any of them to provide it with any such information;

5 neither N+1 Singer and Dowgate nor any person acting on behalf of them or any of their respective affiliates, agents, directors, officers or employees has or shall have any liability for any Publicly Available Information, or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

6 the only information on which it is entitled to rely on and on which it has relied in committing to subscribe for the Placing Shares is contained in the Publicly Available Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on Publicly Available Information; (b) neither N+1 Singer, Dowgate and the Company nor any of their respective affiliates, agents, directors, officers or employees has made any representation or warranty to it, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of the Publicly Available Information; (c) it has conducted its own investigation of the Company, the Placing and the Placing Shares, satisfied itself that the information is still current and relied on that investigation for the purposes of its decision to participate in the Placing; and (d) has not relied on any investigation that N+1 Singer or Dowgate or any person acting on their behalf may have conducted with respect to the Company, the Placing or the Placing Shares;

7 the content of this Announcement and the Publicly Available Information has been prepared by and is exclusively the responsibility of the Company and that neither N+1 Singer and Dowgate nor any persons acting on behalf of it is responsible for or has or shall have any liability for any information, representation, warranty or statement relating to the Company contained in this Announcement or the Publicly Available Information nor will they be liable for any Placee's decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement, the Publicly Available Information or otherwise. Nothing in this Appendix shall exclude any liability of any person for fraudulent misrepresentation;

8 the Placing Shares have not been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale nor will a prospectus be cleared or approved in respect of any of the Placing Shares under the securities laws of the United States, or any state or other jurisdiction of the United States, Canada, the Republic of Ireland, Australia, Japan, 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 the United States, Canada, the Republic of Ireland, Australia, Japan, or the Republic of South Africa or in any country or jurisdiction where any such action for that purpose is required;

9 it and/or each person on whose behalf it is participating:

9.1 is entitled to acquire Placing Shares pursuant to the Placing under the laws and regulations of all relevant jurisdictions;

9.2 has fully observed such laws and regulations;

9.3 has capacity and authority and is entitled to enter into and perform its obligations as an acquirer of Placing Shares and will honour such obligations; and

9.4 has obtained all necessary consents and authorities (including, without limitation, in the case of a person acting on behalf of a Placee, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix) under those laws or otherwise and complied with all necessary formalities to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto and, in particular, if it is a pension fund or investment company it is aware of and acknowledges that it is required to comply with all applicable laws and regulations with respect to its subscription for Placing Shares;

10 it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are subscribed will not be, a resident of, or with an address in, or subject to the laws of, the United States, Canada, the Republic of Ireland, Australia, Japan, or the Republic of South Africa, and it acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of the United States, Canada, the Republic of Ireland, Australia, Japan, or the Republic of South Africa and may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;

11 the Placing Shares have not been, and will not be, registered under the Securities Act and may not be offered, sold or resold in or into or from the United States except pursuant to an effective registration under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in accordance with applicable state securities laws; and no representation is being made as to the availability of any exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;

12 it and the beneficial owner of the Placing Shares is, and at the time the Placing Shares are acquired will be, outside the United States and acquiring the Placing Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S under the Securities Act;

13 it (and any account for which it is purchasing) is not acquiring the Placing Shares with a view to any offer, sale or distribution thereof within the meaning of the Securities Act;

14 it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it, or any other presentational or other materials concerning the Fundraising in or into or from the United States (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;

15 neither N+1 Singer, its respective affiliates, agents, directors, officers or employees nor 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 Fundraising and that participation in the Fundraising is on the basis that it is not and will not be a client of N+1 Singer and N+1 Singer has no duties or responsibilities to it for providing the protections afforded to its clients or for providing advice in relation to the Fundraising nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

16 neither Dowgate, its respective affiliates, agents, directors, officers or employees nor 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 Fundraising and that participation in the Fundraising is on the basis that it is not and will not be a client of Dowgate and Dowgate has no duties or responsibilities to it for providing the protections afforded to its clients or for providing advice in relation to the Fundraising nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

17 it has the funds available to pay for the Placing Shares for which it has agreed to subscribe and acknowledges and agrees that it will make payment to N+1 Singer or Dowgate for the Placing Shares allocated to it in accordance with the terms and conditions of this Announcement on the due times and dates set out in this Announcement, failing which the relevant Placing Shares may be placed with others on such terms as N+1 Singer or Dowgate may, in its absolute discretion determine without liability to the Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this Announcement) which may arise upon the sale of such Placee's Placing Shares on its behalf;

18 no action has been or will be taken by any of N+1 Singer, Dowgate and the Company or any person acting on their behalf that would, or is intended to, permit a public offer of the Placing Shares in the United States or in any country or jurisdiction where any such action for that purpose is required;

19 the person who it specifies for registration as holder of the Placing Shares will be: (a) the Placee; or (b) a nominee of the Placee, as the case may be. Neither N+1 Singer, Dowgate 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 acquire Placing Shares pursuant to the Fundraising and agrees to pay the Company, N+1 Singer and Dowgate in respect of the same (including any interest or penalties) on the basis that the Placing Shares will be allotted to a CREST stock account of N+1 Singer or Dowgate or transferred to a CREST stock account of N+1 Singer or Dowgate who will hold them as nominee on behalf of the Placee until settlement in accordance with its standing settlement instructions with it;

20 it is acting as principal only in respect of the Placing or, if it is acting for any other person, (a) it is duly authorised to do so and has full power to make the acknowledgments, representations and agreements herein on behalf of each such person and (b) it is and will remain liable to N+1 Singer, Dowgate or the Company for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person);

21 the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a stamp duty or stamp duty reserve tax liability under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depository receipts and clearance services) and that it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability;

22 it and any person acting on its behalf (if within the United Kingdom) falls within Article 19(5) and/or 49(2) of the Order and undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;

23 it will not make an offer to the public of the Placing Shares and it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom or elsewhere in the EEA prior to the expiry of a period of six months from 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 and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA or an offer to the public in any other member state of the EEA within the meaning of the Prospectus Directive;

24 it is a person of a kind described in: (a) Article 19(5) (Investment Professionals) and/or 49(2) (High net worth companies etc.) of the FSMA (Financial Promotion) Order 2005, as amended, and/or an authorised person as defined in section 31 of FSMA; and (b) section 86(7) of FSMA ("Qualified Investor"), being a person falling within Article 2.1(e) the Prospectus Directive. For such purposes, it undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;

25 it has only communicated or caused to be communicated and it 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 Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person and it acknowledges that this Announcement is not being issued by N+1 Singer as an authorised person under Section 21 of FSMA and therefore is not subject to the same controls applicable to a financial promotion made by an authorised person;

26 it has complied and it will comply with all applicable laws with respect to anything done by it or on its behalf in relation to the Placing Shares (including all relevant provisions of the FSMA in respect of anything done in, from or otherwise involving the United Kingdom);

27 if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive (including any relevant implementing measure in any member state), the Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the EEA which has implemented the Prospectus Directive other than Qualified Investors, or in circumstances in which the express prior written consent of N+1 Singer has been given to the offer or resale;

28 it has neither received nor relied on any confidential price sensitive information about the Company in accepting this invitation to participate in the Placing;

29 neither N+1 Singer or Dowgate nor any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of any of them has or shall have any liability for any information, representation or statement contained in this Announcement or for any information previously published by or on behalf of the Company or any other written or oral information made available to or publicly available or filed information or any representation, warranty or undertaking relating to the Company, and will not be liable for its decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement or elsewhere, provided that nothing in this paragraph shall exclude any liability of any person for fraud;

30 N+1 Singer or Dowgate and each of their affiliates, each acting as an investor for its or their own account(s), may bid or subscribe for and/or purchase Placing Shares and, in that capacity, may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise. Accordingly, references in this Announcement to the Placing Shares being offered, subscribed, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by N+1 Singer or Dowgate and/or any of their respective affiliates, acting as an investor for its or their own account(s). Neither N+1 Singer, Dowgate nor the Company intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so;

31 it has not offered or sold and will not offer or sell any Placing Shares to persons in the EEA prior to the expiry of a period of six months from Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purpose of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in any member state of the EEA within the meaning of the Prospectus Directive;

32 it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 (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;

33 it is aware of the obligations regarding insider dealing in the Criminal Justice Act 1993, FSMA, the EU Market Abuse Regulation No. 596 of 2014 and the Proceeds of Crime Act 2002 and confirms that it has and will continue to comply with those obligations;

34 in order to ensure compliance with the Money Laundering Regulations 2007, N+1 Singer and/or Dowgate (for itself and as agent on behalf of the Company) or the Company's registrars may, in their absolute discretion, require verification of its identity. Pending the provision to N+1 Singer and /or Dowgate or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at N+1 Singer's or Dowgate's absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed at N+1 Singer's, Dowgate's or the Company's registrars', as the case may be, absolute discretion. If within a reasonable time after a request for verification of identity N+1 Singer's and or Dowgate's (for itself and as agent on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, N+1 Singer, Dowgate and/or the Company may, at its absolute discretion, terminate its commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;

35 acknowledges that its commitment to acquire Placing Shares on the terms set out in this Announcement and in the form of confirmation will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to N+1 Singer, Dowgate and the Company's conduct of the Placing;

36 it 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 is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Fundraising. It has relied upon its own examination and due diligence of the Company and its affiliates taken as a whole, and the terms of the Fundraising, including the merits and risks involved;

37 it irrevocably appoints any duly authorised officer of N+1 Singer or Dowgate as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares for which it agrees to subscribe or purchase upon the terms of this Announcement;

38 N+1 Singer, Dowgate and the Company and others (including each of their respective affiliates, agents, directors, officers or employees) will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements, which are given to N+1 Singer or Dowgate, on their own behalf and on behalf of the Company and are irrevocable;

39 if it is acquiring the Placing Shares as a fiduciary or agent for one or more investor accounts, it has full power and authority to make, and does make, the foregoing representations, warranties, acknowledgements, agreements and undertakings on behalf of each such accounts;

40 time is of the essence as regards its obligations under this Appendix;

41 any document that is to be sent to it in connection with the Fundraising will be sent at its risk and may be sent to it at any address provided by it to N+1 Singer or Dowgate;

42 the Placing Shares will be issued subject to the terms and conditions of this Appendix; and

43 these terms and conditions in this Appendix and all documents into which this Appendix is incorporated by reference or otherwise validly forms a part and/or any agreements entered into pursuant to these terms and conditions and all agreements to acquire shares pursuant to the Placing will be governed by and construed in accordance with English law and it submits to the exclusive jurisdiction of the English courts in relation to any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or N+1 Singer or Dowgate 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.

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify and hold the Company, Dowgate and N+1 Singer and each of their respective affiliates, agents, directors, officers and employees 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 given by the Placee (and any person acting on such Placee's behalf) in this Appendix or incurred by N+1 Singer, Dowgate or the Company or each of their respective affiliates, agents, directors, officers or employees arising from the performance of the Placee's obligations as set out in this Announcement, and further agrees that the provisions of this Appendix shall survive after the completion of the Placing.

The agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the United Kingdom relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct by the Company. Such agreement assumes that the Placing Shares are not being acquired 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 related to any other dealings in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event, the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax and neither N+1 Singer, Dowgate nor the Company shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and they should notify N+1 Singer or Dowgate accordingly. In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares and each Placee, or the Placee's nominee, in respect 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 non-United Kingdom stamp, registration, documentary, transfer or similar taxes or duties undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company, Dowgate and N+1 Singer in the event that either the Company, Dowgate and/or N+1 Singer has incurred any such liability to such taxes or duties.

The representations, warranties, acknowledgements and undertakings contained in this Appendix are given to N+1 Singer and Dowgate for itself and on behalf of the Company and are irrevocable.

Each Placee and any person acting on behalf of the Placee acknowledges that N+1 Singer and Dowgate does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings, acknowledgements, agreements or indemnities in the Placing Agreement.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that N+1 Singer and/or Dowgate may (at their absolute discretion) satisfy their obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any connected or associated person to do so.

When a Placee or any person acting on behalf of the Placee is dealing with N+1 Singer or Dowgate, any money held in an account with N+1 Singer or Dowgate 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 relevant rules and regulations of the FCA made under FSMA. Each 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 N+1 Singer's or Dowgate's money (as applicable) in accordance with the client money rules and will be held by it under a banking relationship and not as trustee.

References to time in this Announcement are to London time, unless otherwise stated.

All times and dates in this Announcement may be subject to amendment.

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

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

The Placing Shares to be issued or sold pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange.

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

 

 

DEFINITIONS

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

"Act"	the Companies Act 2006 (as amended)
"Acquisition"	the conditional acquisition of entire issued share capital of The Corner Communications (London) Limited by the Company pursuant to the terms of the Acquisition Agreement
"Acquisition Agreement"	the conditional agreement dated 9 November 2017 and entered into between (1) the Company and (2) the Vendors pursuant to which the Company will acquire the entire issued share capital of The Corner
"Admission"	admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules
"AIM"	the AIM Market operated by the London Stock Exchange
"AIM Rules"	the AIM Rules for Companies published by the London Stock Exchange from time to time
"The Corner"	The Corner Communications (London) Limited
"certificated form" or "in certificated form"	an ordinary share recorded on a company's share register as being held in certificated form (namely, not in CREST)
"Company"	Be Heard Group plc, a company incorporated and registered in England and Wales under the Companies Act 2006 with registered number 09223440
"Consideration Shares"	the new Ordinary Shares to be issued pursuant to the terms of the Acquisition Agreement
"Convertible Loan Notes"	the convertible loan notes constituting up to £4.0 million unsecured convertible loan notes, further details of which are set out in this announcement
"CREST"	the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the operator (as defined in those regulations)
"Dealing Day"	a day on which the London Stock Exchange is open for business in London
"Directors" or "Board"	the directors of the Company
"Dowgate"	Dowgate Capital Stockbrokers Limited, the Company's joint broker
"Enlarged Share Capital"	the issued share capital of the Company immediately following Admission
"Existing Ordinary Shares"	the 813,049,493 Ordinary Shares in issue at the date of this announcement, all of which are admitted to trading on AIM
"Fundraising"	the Placing and the issue of the Convertible Loan Notes
"General Meeting"	the general meeting of the Company to be held on 27 November 2017, notice of which will be sent to Shareholders
"Group"	the Company, its subsidiaries and its subsidiary undertakings
"Joint Brokers"	N+1 Singer and Dowgate
"London Stock Exchange"	London Stock Exchange plc
"MAR"	Article 7 of EU Regulation 596/2014
"N+1 Singer"	Nplus1 Singer Advisory LLP, the Company's nominated adviser and joint broker
"New Ordinary Shares"	the Consideration Shares and the Placing Shares
"Noteholders"	holders of the Convertible Loan Notes
"Options"	options (or other convertible securities) over Ordinary Shares held by the Directors and certain employees of the Group
"Ordinary Shares"	ordinary shares of 1 penny each in the capital of the Company
"Placing"	the conditional placing of the Placing Shares by the Joint Brokers, as agents on behalf of the Company, pursuant to the Placing Agreement
"Placing Agreement"	the conditional agreement dated 9 November 2017 and made between (1) the Company, (2) N+1 Singer and (3) Dowgate in relation to the Placing
"Placing Price"	2.8 pence per Placing Share
"Placing Shares"	the new Ordinary Shares to be issued by the Company at the Placing Price, pursuant to the Placing
"Resolutions"	the resolutions set out in the Notice of General Meeting
"Shareholders"	holders of Ordinary Shares
"UK"	the United Kingdom of Great Britain and Northern Ireland
"Vendors"	Tom Ewart, Neil Hourston, Neil Simpson, Graham Stewart, Jonathan Angel, Robert Amstell, and Matthew Lancod

 

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