Audioboom Grp. Regulatory News (BOOM)

Cholet Investments plc

("Cholet" or the "Company")

Proposed acquisition of One Delta Limited, Subscription to raise £275,750 and readmission to trading on AIM

Proposed Acquisition and Subscription

Cholet, whose Ordinary Shares were suspended from trading on 25 November 2011 pending completion of an acquisition in accordance with Rule 15 of the AIM Rules, announces that it has entered into a conditional agreement to acquire the entire issued share capital of One Delta for a consideration of £1.7 million, which is to be satisfied by the issue of the Consideration Shares at the Subscription Price.

The Company is proposing to raise £275,750 by way of a conditional subscription for 3,446,875 Ordinary Shares at 8p per share. It is intended that the proceeds of the Subscription will be used to help grow the One Delta business, specifically to invest in its international sales activities, marketing, project management and research and development. Furthermore the Company will pay the professional fees incurred in respect of the Acquisition and the Subscription.

The Acquisition will constitute a reverse takeover under the AIM Rules. As a consequence, the Directors are seeking shareholder approval for the Acquisition at a general meeting which is expected to be convened for 10.00 a.m. on 9 January 2011 at the offices of Fairway Fund Management Limited, 8th Floor, Union House, Union Street, St. Helier, Jersey JE2 3RF.

Irrevocable Undertakings to vote in favour of the Resolutions at the Extraordinary General Meeting have been obtained from certain existing Shareholders in respect of their shareholdings amounting to in aggregate 3,105,740 Ordinary Shares representing 60.91 per cent of the existing Ordinary Shares.

Application will be made to the London Stock Exchange for the Enlarged Issued Share Capital to be admitted to trading on AIM. The AIM Admission Document, which comprises a circular to Shareholders and notice of the Extraordinary General Meeting, will be posted to Shareholders and will be available from the Company's website, www.choletinvestments.com, today.

It is expected that admission to AIM will become effective and that dealings in the Enlarged Issued Share Capital will commence on or before 12 January 2011.

Information on One Delta

History and background

One Delta is an UK company, which was incorporated on 7 October 2008. Its founders, Sean Reel and Phil Dale established the company to address the market demand for flood protection products. Since incorporation One Delta has diversified and is focused on the incorporation of recycled plastic materials into the design and production of a number of innovative products intended to provide effective, cost-efficient and environmentally sustainable solutions across a wide range of sectors.

One Delta is currently engaged in the design, testing and accreditation of products with a view to achieving commercial application in three principal sectors:

• defence;

• security fencing; and

• mobile, off-building flood defence.

Current product pipeline

PXP Security Fence - PXP Security Fences offer a new, sustainable product for security, crowd control, property and event management fencing. PXP Security Fences are an environmentally sound, rapid-erect, recycled fencing product that is available for either purchase or lease. The PXP Security Fence has the potential to become a cost effective, replacement for the traditional solutions that use wood, steel or brick structures for major events, commercial and residential markets.

INSTANT Flood Barrier ("IFB") - This product is well placed to take advantage of the recent government recommendations that have placed responsibility for flood response onto the UK's local authorities. IFB is a flat packed, rapid-erect, flood defence barrier made from RWP that is easily transported, stored and is reusable. The One Delta Management consider that IFB is a significant advancement on historical fixed defence systems and traditional sandbags.

BROOKS Defence - The Brooks Defence solutions offer rapid-erect, lightweight, mobile, anti-ballistic ground force protection systems for use by the military. The concept has been well received by the Ministry of Defence and certain defence companies alike. The technology used in the products is being developed with an anti-ballistic facility and the products are now set for Ministry of Defence testing.

The ERT Licences

As mentioned above, One Delta uses recycled plastic materials in its design and development process. Specifically each proposed product range incorporates components manufactured from recycled waste products (RWP), utilising a process called Powder Impression Moulding (PIM). The use of RWP provides advantages in terms of the relative ease of securing supplies and the low cost of raw materials. The PIM Process is patented and owned by ERT, which has granted One Delta a number of exclusive rights under licence.

Pursuant to such licences (the "ERT Licences"), One Delta is entitled to design, test, manufacture and sell (or otherwise commercialise) specific products incorporating RWP and may seek approval to also design, test and sell (or otherwise commercialise) improvements and modifications to those manufactured products.

Each ERT Licence will continue in force on a country-by-country basis until the later of 20 years from the effective date of the relevant licence agreement or until all of the licensed patents in the respective country have expired.

Under the ERT Licences, ERT is entitled to receive certain royalties based on the net selling price of products sold by One Delta. No royalties have been paid to date and none are currently due.

The RWP boards currently used by One Delta are manufactured by a third party using the PIM Process, under a separate licence granted to the third party by ERT. These boards are incorporated by One Delta, together with other components, into various prototype products. It is the incorporation of such other components to create individual products which the One Delta Management considers affords the opportunity to create certain proprietary intellectual property rights over and above those granted under the ERT Licences.

The One Delta Management recognise the versatility of the RWP component and have identified further commercialisation applications for the technology which, together with the pipeline products referred to above, afford the potential to create additional revenue streams in the future.

Source materials

A significant number of the components used by One Delta in its product prototypes are reclaimed or recycled. Some cost nothing to acquire. The One Delta Management believe that the use of such materials in its products, once commercialised, should provide a number of competitive advantages, including:

• material cost/sales pricing advantages compared to other more traditional products;

• compatibility with certain public body environmental procurement obligations;

• strength/durability relative to more traditional products; and

• potential attractiveness in the context of public body sustainability quotas/credits.

Business model

One Delta's business model differs from that of many of the makers of more traditional products with which One Delta's products are likely to compete. One Delta does not currently manufacture its own products and does not currently intend to directly market or sell its products to the end consumer. Its business model is to identify and engage with the most appropriate established traders in each relevant sector with a view to partnering with, or granting licences to such parties, in return for initial consideration and/or deferred royalty payments.

Competition

Although there are competitors to their products in the defence, security fencing and mobile off-building flood defence sectors, the majority of these competitors use traditional methods of manufacture and traditional source materials. The One Delta Management have yet to identify a competitor in these sectors which uses recycled waste to produce similar products to One Delta and which use a base material which, in their opinion, is as durable and reliable as the RWP component.

Current trading and Prospects

As One Delta is an early stage company, the majority of its business relationships are based on products that are in the process of coming to the market. One Delta has already built relationships with certain businesses in retail, defence contracting, planning, engineering, architectural design and security.

These relationships have been developed over the last 18 months and present a good foundation for product launch and new product development which are important for revenue generation at an early stage.

Principal terms of the Acquisition

Under the terms of the Acquisition Agreement, the Company has agreed to acquire the entire issued share capital of One Delta from the Vendors for a total consideration of £1.7 million which shall be satisfied by the issue of the Consideration Shares.

During the period between the date of the execution of the Acquisition Agreement and Completion, the Vendors and the Company have undertaken to operate the businesses of One Delta and the Company, respectively, in the normal manner of such businesses. The Acquisition Agreement contains certain warranties and undertakings given by the Vendors in favour of the Company. The Acquisition Agreement provides that warranty claims against certain of the shareholders of One Delta will be satisfied (inter alia) by the re-acquisition by the Company for nominal consideration of the Consideration Shares held by such persons.

On Completion, Phil Dale will remain as a director of One Delta, Richard Ludford will be appointed as a director of One Delta and Sean Reel will resign as a director of One Delta and will, subject to the passing of Resolution 4, be appointed to the board of Cholet as Executive Chairman.

Completion of the Acquisition is conditional, inter alia, on the passing of Resolutions 1 to 3 inclusive and the passing of Resolution 6 and 7 and Admission. Subject to the conditions being satisfied, Completion is expected to take place upon Admission.

Reasons for the Subscription and use of funds

The proceeds of the Subscription will be used to help grow the One Delta business, specifically to invest in its international sales activities, marketing, project management and research and development and to provide additional working capital for the Enlarged Group. Furthermore the Company will pay the professional fees incurred in respect of the Acquisition and the Subscription.

The Company will also be liable for certain bonuses and finder's fees (all of which will be taken in the form of Fee Shares) to the Directors and Intrinsic Capital LLP (an entity controlled by Mark Horrocks and another person who introduced the Company to One Delta). Merchant Securities will apply part of the fee payable to it in relation to the Proposals in subscribing for Ordinary Shares at the Subscription Price.

Details of the Subscription

Under the terms of the Subscription Agreements, Investors have conditionally agreed to subscribe for 3,446,875 Subscription Shares at the Subscription Price to raise approximately £275,750 before expenses for the Company.

The Subscription is conditional, inter alia, upon Admission of the Enlarged Issued Share Capital to trading on AIM.

The Subscription Shares, the Consideration Shares and the Fee Shares, when issued and fully paid, will rank equally in all respects with the issued Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after Admission.

It is expected that Admission will become effective and dealings in the Enlarged Issued Share Capital will commence on 12 January 2012.

The Subscription is also conditional upon the passing of Resolutions 1, 2, 3 and 7, including the passing of an ordinary resolution to approve a Rule 9 Waiver. Accordingly, the Company has convened the Extraordinary General Meeting, notice of which is set out in the AIM Admission Document.

Following the Subscription, the Company will have 31,574,356 Ordinary Shares in issue and admitted to trading on AIM.

Directors and Senior Management

Details of the Directors and the Proposed Director of the Company are set out below. Sean Reel will, subject to the passing of Resolution 4 join the board of the Company on Admission. It is intended that following Admission the Board will seek to appoint a full time Finance Director.

Roger King (Non-executive Chairman and proposed Executive Director) aged 58, was a partner in Jackson Fox (Chartered Accountants) from 1982 to 2001 and has been a consultant to the firm since that date. He was director and a principal shareholder in Worthy Trust Company Limited in Jersey from 1982 until it was sold to Allied Irish Banks (CI) Limited ("AIB") in 1999. He continued as a director and subsequently as a consultant to AIB's Jersey trust operations until 2005, when he established Anglo Saxon Trust Limited, a regulated trust business in Jersey. He became a director and principal of Fairway Trust Limited, Fairway Pension Trustees Limited and Fairway Fund Management Limited in 2009. He was a director of the licensed fund functionary Professional Consultancy Services Limited from 1986 to 2004 and of AIB Fund Managers Jersey Limited from 2000 to 2001. He is non-executive chairman of Cholet and serves and has served as a non-executive director of a number of other AIM and Channel Islands Stock Exchange listed companies. It is intended that Roger King will become an Executive Director on Admission.

Roger Maddock (Executive Director) aged 61, is an Executive Director, having worked in the finance industry in Jersey since 1981, specialising in fund administration. He was a partner in a local chartered accountancy practice and a director of Worthy Trust Company Limited ("WTC"), a trust company owned by the accountancy practice. He was the Managing Director of Equitilink International Management Limited, the manager of the First Australia Group of Funds and a director of several of the underlying funds of that group between 1984 and 1998. Following the sale of WTC to AIB Limited in 1999 he was a director of that bank's trust and fund administration companies until 2001. Between 2002 and 2005 he was a non-executive director of AIB and Chairman of AIB Fund Administration Limited. Since 2005 he has held a number of directorships of fund management and investment companies, including Development Capital Management (Jersey) Limited.

Sean Reel (Proposed Executive Chairman), aged 47, has over 20 years' experience managing fast moving consumer goods, media and technology businesses. He is an active investor in the environmental sector, recycling and cleantech. He is an experienced director and was chairman and chief executive officer of MediaZest plc (which floated on AIM in 2005). Mr Reel has been a Director at Haymarket Consumer Publishing and also sales director for IPC Media Limited during the management buyout and subsequent sale to AOL Time Warner for £1.1 billion. During this period he was responsible for sales of over £500 million. For nearly 10 years he held a number of senior posts in Alliance Boots plc including head of trade marketing and head of sales. In 2009, Mr Reel was selected as a Future 500 entrepreneur by the Guardian Observer Newspaper Group and holds a number of professional and academic qualifications including an MBA and DipM. Mr Reel has been a Director at One Delta since its incorporation in 2008 and has been instrumental in creating the required protection of the One Delta product range and has secured several fundamentally important working partnerships.

One Delta Management

Phil Dale (Director of One Delta), aged 49, has 25 years executive experience across the audio visual and environmental sectors. As an investor and director at the Gearhouse Group plc, he was instrumental in the rollout of operations into international markets and involved in the flotation of the company in 1995. He has acted at an executive level for several companies from start-up to sale; most recently holding the post of general manager at Presentation Services Limited and Musion Systems Limited where his remit encompassed directing and overseeing the sales, human resources, marketing and business development departments. Mr Dale created the Instant Brand with Sean Reel in 2008 and has been overseeing the online operation of its trading arm since that time. As a Director of One Delta he has created the Brooks Brand and product line and is in control of the running of the day-to-day business. Mr Dale holds a Degree in Photography and Visual Arts from West Surrey College of Art & Design.

Richard Ludford (Head of Projects at One Delta), aged 43, studied Environmental Geology at Plymouth University and has over 10 years senior management experience in the oil industry and environmental sector. In 1996 he joined Schlumberger Limited, the world's largest oilfield services company as a senior geologist and in 2000 moved to the Hess Corporation as its global data management director. Since 2002 he has been working as a consultant to the environmental sector and property development industry. Mr Ludford joined One Delta in January 2011 and led the development of PXP through to its ultimate Government accreditation. He has an active interest in online technologies and is a director at GuiltPoints Limited where he has developed a new online social media application.

One Delta Advisory Management Board

Peter T Jones OBE (Chairman of One Delta Advisory Board), is a highly respected waste industry expert with recent board experience with Biffa Waste Services Limited. Mr Jones currently sits on several Government and capital fund advisory boards as well as being the Mayor of London's special adviser on waste. He is a member of the Chartered Institutes of Marketing, Transport, and Wastes Management and is an industrial economist. He has received an Honorary Degree from the University of Southampton as a Doctor of the University for work associated with environmental technologies.

Colonel Stuart Tootal OBE (One Delta Advisory Board), is a distinguished and experienced military officer who, for his role as the Lieutenant Colonel military assistant to the Assistant Chief of the General Staff, was awarded the OBE. He commanded the 3rd Battalion of the Parachute Regiment and the first UK Battle Group to be sent to Helmand Province for which he was awarded the Distinguished Service Order. Colonel Tootal is now the chief security officer for Barclays Global Banking plc.

Mike Henebery (One Delta Advisory Board), has over 20 years' experience in the private equity and investment sector across the UK and Europe. He qualified as a Chartered Accountant at Arthur Andersen LLP in 1990 and has experience in corporate finance. Having worked at PricewaterhouseCoopers International Limited, Montagu Private Equity LLP and as a partner at Gresham Private Equity LLP his experience covers a broad spectrum of the financial world. Mr Henebery is an investor in One Delta and currently holds the position of Managing Partner at Palio Capital Partners LLP.

Mark Horrocks (One Delta Advisory Board), has 30 years of financial market experience with 12 years as a fund manager at Guardian Royal Exchange Assurance plc. Since 1999 he has been an owner and partner at Intrinsic Value Partnership Limited and Intrinsic Capital LLP, all capital investment funds. For the past three years Mr Horrocks has been a non-executive director for the Immedia Group plc, which provides core music strategies and in-store media technologies. He is also a non-executive director of Interactive Investor plc. Mr Horrocks is an investor in One Delta.

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