DDDD.L Regulatory News (DDDD)

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX, IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, AUSTRALIA, NEW ZEALAND (RESTRICTED JURISDICITONS) OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT AND AT THE START OF THE APPENDIX.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN 4D PHARMA PLC OR ANY OTHER ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION, SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH ANY INVESTMENT DECISION IN RESPECT OF 4D PHARMA PLC.

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 MATTERS CONTAINED IN THIS ANNOUNCEMENT, 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.

Unless otherwise indicated, capitalised terms in this Announcement have the meaning given to them in the definitions section included in the Appendix.

4D PHARMA plc

(the "Company" or "4D")

Placing and Subscription of New Ordinary Shares

to raise not less than £18 million

Launch of Placing by accelerated Bookbuild

4D pharma plc (AIM: DDDD), a pharmaceutical company leading the development of live biotherapeutic products ("LBPs"), announces a proposed Fundraising by way of a Placing and Subscription of new Ordinary Shares and Warrants to raise gross proceeds of not less than £18 million. The Placing is being conducted via an accelerated Bookbuild process.

Highlights

Duncan Peyton, Chief Executive Officer of 4D pharma plc, commented:

"4D pharma is pleased to launch this funding round - its first since 2015 and in challenging market conditions for developers of new therapeutics - with strong support from existing and new investors, including our partner MSD and other US investors in addition to those in the UK. This funding will enable us to reach important milestone data points in two clinical studies which we believe will represent material value inflection points as positive data, if generated, will provide strong further validation of our approach to developing live biotherapeutics."

Further details of the Fundraising and any participation by the Directors will be set out in an announcement to be made on the closing of the Fundraising.

This Announcement should be read in its entirety. In particular, your attention is drawn to the detailed terms and conditions of the Placing and further information relating to the Placing and any participation in the Placing that is described in the Appendix to this Announcement (which forms part of this Announcement).

By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement in its entirety (including the Appendix), and to be making such offer on the terms and subject to the conditions of the Placing contained herein, and to be providing the representations, warranties and acknowledgements contained in the Appendix.

Expected Timetable of Events

About 4D PHARMA

Founded in February 2014, 4D is a world leader in the development of LBPs, a novel and emerging class of drugs, defined by the FDA as biological products that contain a live organism, such as a bacterium, that is applicable to the prevention, treatment or cure of a disease. 4D has developed a proprietary platform, MicroRx®, that rationally identifies LBPs based on a deep understanding of function and mechanism. 

4D's live biotherapeutic products are orally delivered single strains of bacteria that are naturally found in the healthy human gut. The Company has five clinical studies in progress, namely a Phase II clinical study of BLAUTIX® in Irritable Bowel Syndrome (IBS), a Phase I/II study of MRx0518 in combination with KEYTRUDA® (pembrolizumab) in solid tumours, a Phase I study of MRx0518 in a neoadjuvant setting for patients with solid tumours, a Phase I study of MRx0518 in patients with pancreatic cancer and a Phase I/II study of MRx-4DP0004 in asthma. Preclinical-stage programmes include candidates for CNS disease such as Parkinson's disease and other neurodegenerative conditions. The Company has a research collaboration and option to license agreement with MSD (the tradename of Merck & Co., Inc, Kenilworth, NJ USA), to discover and develop LBPs for vaccines.

For more information, refer to https://www.4dpharmaplc.com.

About MRx0518

MRx0518, a product of 4D's discovery platform MicroRx®, is a single strain LBP in development for the treatment of cancer. It is delivered as an oral capsule and stimulates the body's immune system, directing it to produce cytokines and immune cells that are known to attack tumours.

It is currently being evaluated in three clinical trials in cancer patients. MRx0518-I-001 is a neoadjuvant monotherapy study in a variety of solid tumours and is being conducted at Imperial College (London, UK). MRx0518-I-002 is in combination with KEYTRUDA® (pembrolizumab) in collaboration with MSD. MRx0518-I-003 is a study in combination with radiotherapy in patients ,with resectable pancreatic cancer.

N+1 Singer is acting as Nominated Adviser, joint Bookrunner and joint broker and as agent of the Company for the Placing. N+1 Singer is authorised and regulated by the FCA in the United Kingdom. N+1 Singer is acting exclusively for the Company and no one else in connection with the Placing and N+1 Singer will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other matters referred to in this announcement.

Bryan Garnier & Co, Limited is acting as joint Bookrunner and joint broker and as agent of the Company for the Placing. Bryan Garnier is authorised and regulated by the FCA in the United Kingdom. Bryan Garnier is acting exclusively for the Company and no one else in connection with the Placing and Bryan Garnier will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other matters referred to in this announcement.

Chardan Capital Markets, LLC. is acting as the US Placing Agent of the Company for the Subscription. Chardan is acting exclusively for the Company and no one else in connection with the Subscription and Chardan will not be responsible to anyone (including any Subscribers) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Subscription or any other matters referred to in this announcement.

Notice to distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to Placing Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

Basis on which information is presented

In this document, references to "£", "pence" and "p" are to the lawful currency of the United Kingdom and references to "$" are to the lawful currency of the United States. All times referred to in this document are, unless otherwise stated, references to London time.

FURTHER INFORMATION

1. INTRODUCTION

The Company proposes to raise not less than £18 million (before expenses) by way of the Placing and the Subscription. The Issue Price represents a discount of approximately 27.8 per cent. to the closing mid-market price of 69.25 pence per Ordinary Share on 17 February 2020 (being the last practicable date prior to the release of this Announcement). Each Placee and Subscriber shall be allotted one Warrant for every two Fundraising Shares subscribed in the Fundraising. Each Warrant entitles the holder to subscribe for one Ordinary Share at a price of £1.00 at any time up to the fifth anniversary of Admission.

The Fundraising is conditional, inter alia, on the passing of the Resolutions by the Shareholders at the General Meeting.

Application will be made to the London Stock Exchange for the Placing Shares and the Subscription Shares to be admitted to trading on AIM. No application will be made for the Warrants to be admitted to trading on AIM. In accordance with the conditions of the Placing and the Subscription, subject to the terms of the Placing Agreement, it is expected that admission to trading on AIM and dealings in the Placing Shares and Subscription Shares will commence on or around 10 March 2020.

This Announcement explains the background to and reasons for the Fundraising, why the Board considers the Fundraising to be in the best interests of the Company and its Shareholders as a whole, and why the Directors will be unanimously recommending that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting, as they intend to do in respect of their own holding of Ordinary Shares, amounting to 20,515,736 Ordinary Shares (representing approximately 31.3 per cent. of the Company's existing issued ordinary share capital as at the last practicable date prior to the release of this Announcement).

2. BACKGROUND TO AND REASONS FOR THE FUNDRAISING

The Company's approach to LBPs is driven by a desire to ensure that its programmes have a real possibility of delivering safe and effective therapies, and providing solutions to global healthcare issues such as cancer and asthma, as well as exploring novel approaches to neurodegeneration, which will become an ever increasing burden as the population continues to age.

The Company has historically benefitted from having a committed shareholder base that has supported it through its development. Notwithstanding that valued support, the Company has not raised funds since December 2015, and more recently has not been able to largely due to the recent turbulent market and sector conditions. As a result, the Company is now in a position where it requires additional funds in order to progress its ongoing clinical trials, commercial collaborations and pre-clinical research.

As the Company's pipeline has progressed, its capital requirement to fund more expensive, later-stage clinical trials has increased. Good progress of the Company's candidate therapies in the clinic has set up a number of value inflection points in the near term, with readouts expected in coming months for the Company's ongoing studies in IBS and oncology, with asthma readouts expected in Q4 2020.

At the same time, the Company has continued to invest in its platform capabilities and personnel. This has been rewarded by collaborations in the field of oncology and a research collaboration and option to license agreement in the field of vaccines with MSD (the tradename of Merck & Co., Inc, Kenilworth, NJ USA). In parallel, MSD and the Company agreed a put option whereby, at the election of the Company, MSD would subscribe for $5 million of Ordinary Shares in the Company, alongside a subscription for or placing of New Ordinary Shares.

Although the research collaboration and option to license agreement with MSD may generate option licence income for the Company over the next few years (as well as longer term significant milestone and royalty payments), there can be no certainty as to the timing of such cash inflows, should they materialise. The Board has therefore decided to conduct this Fundraising with a view to ensuring that the Company is sufficiently capitalised to run its operations through to the clinical data-driven value inflection points that are expected in the short term.

In pushing its novel class of therapeutics forward, the Company recently reported promising early clinical data from the ongoing study of lead oncology candidate, MRx0518, in combination with the market-leading checkpoint inhibitor, Keytruda®, in a difficult-to-treat, checkpoint-resistant patient population.

The design of the study, which was developed through the Company's clinical collaboration with MSD, is open label. This enables the Company to continually assess the initial efficacy of the combination as patients continue to receive treatment. The Company is encouraged by the initial efficacy and clinical benefit which has been seen to date in this challenging patient group. The Company has reported a clinical benefit (defined per protocol as patients with a complete response, partial response or stable disease for greater than six months) of the combination in three out of the first six patients dosed, all of whom previously had become resistant to checkpoint therapy. This is, to the best of the Directors' knowledge, the first reports of preliminary clinical efficacy for a microbiome-checkpoint inhibitor combination.

Over the coming months, there will be additional readouts for this study, including initial efficacy data for the remaining patients in Part A (being the first 12 patients tested), which is expected in Q2 2020.

The Company anticipates that the approximate timing of results from its current programmes will be as follows:

i. Blautix® Phase II interim analysis in Q2 2020;

ii. MRx0518 Phase I/II combination study with Keytruda®, safety and initial efficacy data from Part A in 12 patients in Q2 2020; and

iii. Blautix® Phase II top line results from all study subjects (expected to be approximately over 300 patients) in Q3 2020.

The Blautix Phase II interim analysis, originally expected in December 2019, is now expected in early Q2 2020. This is due to an expansion of the number of patients that will be included in the analysis, as well as slightly lower than expected recruitment rate for this phase of the study, which has now been remedied and recruitment completed.

The minimum net proceeds of the Fundraising, together with existing resources, is expected to provide sufficient working capital to fund the Company for at least the next six months, which time period includes key data readouts on the first and second of the three items above. Should positive data emerge from these studies, the Company believes this will provide a material validation for its approach to developing LBPs and also serve as value accretive events for Shareholders. Management also expects that such positive data, if generated, will provide a platform for attracting new investors and raising additional capital, as well as providing further opportunities to expand its partnerships through licensing and other collaborations.

Additional data readouts are expected from the third item shown above in Q3 2020 and the Company plans to continue multiple additional studies in MRx0518 and asthma which are likely to require further funding. The Company's longer-term development, regulatory and commercial strategy for its portfolio of clinical and pre-clinical assets will be informed by near-term data readouts and the Group's further funding needs and partnering strategy will be addressed in this context.

3. USE OF PROCEEDS

The estimated net proceeds of a gross Fundraising of £18 million are, subject to clinical programmes proceeding as planned, anticipated to fund the Company through the next six months. The Company intends to use such proceeds to support its ongoing clinical studies in IBS, oncology and asthma and to enable the Company to continue to fund its operations towards upcoming clinical readouts, as well as for general corporate purposes. The net proceeds of the Fundraising, together with existing resources, are expected to provide sufficient working capital to fund the Company beyond key data readouts on the first and second of the three items set out in section 2 above.

4. THE PLACING AND THE SUBSCRIPTION

The Company proposes to raise not less than £18 million (before expenses) through the issue and allotment, conditional on Admission, of the Fundraising Shares. The Issue Price of 50p per share represents a discount of approximately 27.8 per cent. to the closing mid-market price of 69.25 pence per Ordinary Share on 17 February 2020 (being the last practicable date prior to the release of this Announcement).

Each Placee and Subscriber shall be allotted one Warrant for every two Fundraising Shares subscribed in the Fundraising. Each Warrant entitles the holder to subscribe for one Ordinary Share at a price of 100p at any time up to the fifth anniversary of Admission. Further details about the Warrants are set out below.

The Fundraising Shares will represent approximately 35.5 per cent. of the Enlarged Issued Share Capital (assuming the minimum number of 36 million Fundraising Shares are issued) and will rank pari passu with the Existing Ordinary Shares. The Placing is not being underwritten.

Pursuant to the terms of the Placing Agreement, N+1 Singer and Bryan Garnier, as agents for the Company, have agreed to use their reasonable endeavours to procure placees for the Placing Shares at the Issue Price; the Placing Agreement contains warranties from the Company in favour of N+1 Singer and Bryan Garnier in relation to, inter alia, the accuracy of the information contained in the documents relating to the Placing and the Subscription, the sufficiency of working capital to fund delivery of the first two key clinical milestones described in "Background to and reasons for the Fundraising" above (in lieu of the customary 12-month working capital sufficiency) and certain other matters relating to the Company and its business. In addition, the Company has agreed to indemnify N+1 Singer and Bryan Garnier in relation to certain liabilities that they may incur in respect of the Placing and the Subscription.

Each of N+1 Singer and Bryan Garnier may terminate the Placing Agreement in certain circumstances (including for breach of warranty at any time prior to Admission if such breach is reasonably considered by N+1 Singer or Bryan Garnier to be material in the context of the Placing) and in the event of a material adverse change occurring at any time prior to Admission.

MSD subscription

The Company has exercised its right, granted in parallel with the Company's research collaboration and option to license agreement with MSD which was announced on 8 October 2019, to call on MSD to purchase $5 million in Ordinary Shares pursuant to the terms of a Subscription Agreement. The $5 million will convert into 7,661,000 New Ordinary Shares at the Issue Price, based on an exchange rate of $0.7661 = £1.

Warrants

Each Placee and Subscriber shall be allotted one Warrant for every two Fundraising Shares subscribed in the Fundraising. A minimum of 18 million Warrants will be allotted on completion of an £18 million Fundraising. Each Warrant entitles the holder to subscribe for one Ordinary Share at a price of 100p at any time up to the fifth anniversary of Admission. No application will be made for the Warrants to be admitted to trading on AIM. The Company has undertaken to make an application to the London Stock Exchange for any Ordinary Shares allotted on the exercise of the Warrants to be admitted to trading on AIM. The instrument constituting the Warrants contains customary provisions adjusting the subscription price and number of Warrants for distributions of capital, share splits and share consolidations.

Admission of the Fundraising Shares

Application will be made to the London Stock Exchange for the Fundraising Shares to be admitted to trading on AIM. Conditional upon, inter alia, the passing of the Resolutions, subject to the terms of the Placing Agreement and in accordance with the conditions of the Placing and the Subscription, it is expected that admission to trading on AIM and dealings in the Fundraising Shares will commence on or around 10 March 2020.

5. SHAREHOLDER APPROVALS AND IMPLICATIONS OF THE RESOLUTIONS NOT BEING PASSED

Section 551 of the Act provides that the directors of a company cannot allot new shares in its capital without the approval of its shareholders. The Resolutions are intended to give the Directors authority to allot Ordinary Shares for the purpose of the Fundraising, and to dis-apply statutory pre-emption rights for the purpose of the Fundraising. If passed, these authorities will enable the Directors to effect the Fundraising in respect of the New Ordinary Shares and the Warrants on a non- pre-emptive basis.

Implications if the Resolutions are not passed

If the Fundraising does not proceed, there is no certainty that the Company will have access to alternative sources of funding, and the Directors would need to consider alternative strategic options, including the sale of assets of the Company or the Company entering into liquidation or administration. Furthermore, if no alternative sources of funding are available, the Company will need to stop its ongoing research and development activities. While the Company has achieved some success with its licensing deals to date, the Board does not consider there to be additional deals available on sufficiently attractive terms, and in any event capable of completion in a timely manner, as to be able to generate material short-term cash inflows to the Company. The Directors therefore consider that, in any of these scenarios, the residual value in the Company's assets would be significantly reduced. In order to ensure that the Company has access to adequate funding, and to avoid further material loss of value in the short term, the Directors are unanimously recommending that Shareholders approve the Resolutions.

6. CURRENT TRADING AND PROSPECTS

6.1 Overview and recent developments

Since its admission to AIM, the Company has grown from a fledgling research company investigating a novel therapeutic class, to an integrated clinical development company and a leader in its field.

The Company's thesis remains the same as it was at the time of its initial public offering. The Directors believed that by looking within the human gut microbiome the Company would gain a greater understanding of its impact on the body's systems, which would lead to the development of a novel class of therapeutics, defined by the FDA as 'live biotherapeutics'.

Further, the Directors believed that the way to unlock the potential of this technology was to focus on the functionality of bacteria and the underlying biological mechanisms which underpin their interaction with the host, as opposed to attempting to unpick the so-called ecology of the gut microbiome. In essence, the Company took a traditional pharmaceutical development approach, focusing on pathways and mechanisms of action, instead of trying to resolve which strains of bacteria constitute a 'healthy gut'.

This focus on functionality drove the development of the Company's discovery and development platform, MicroRx®, that allows us to interrogate our extensive library of strains (which covers the majority of genera within the gut microbiome) to understand the impact they have on human disease.

The Company's initial work to demonstrate this concept was through the investigation of diseases generally associated with the gut, such as Crohn's Disease and IBS. However, the Company quickly realised that the potential breadth of our technology spanned far beyond the gut and into diseases which manifest at organs anatomically distant from (but still influenced materially by) the gastrointestinal tract, such as cancer, neurodegenerative diseases and respiratory conditions such as asthma.

The investment in the discovery platform yielded strong results, but it would not have been possible to advance this novel therapeutic class into the clinic without a concurrent investment and Board-level commitment to our manufacturing technology and regulatory affairs expertise.

The Company has therefore developed its own standalone development and GMP production facility, capable of potentially handling all of the Company's requirements, from late-stage clinical development to commercial-scale production. In addition, we have worked with the European Directorate for the Quality of Medicines to help develop and put in place the regulatory framework for this novel class of therapeutics.

The Company is now at a stage where its four lead programmes are in clinical development, with a number of important readouts from these studies anticipated in 2020. To date, the Company has completed or is undertaking a number of Phase I and Phase I/II studies in humans, which have shown our LBPs to be safe and well tolerated across patients with a range of diseases. Further, as these studies are conducted in individuals suffering from the diseases of interest, the Company has been able to look at the impact of its product on their symptoms to build insight and confidence in taking its programmes into later studies. This enables the design of these studies to be relatively better informed than that of many pharmaceuticals, whose initial Phase I testing takes place predominantly in healthy people only.

Coupling the Company's research with its development and clinical capability has now led to the Company being recognised as a leader in the emerging field of microbiome-derived single-strain LBPs. These insights from multiple sources position the Company as an early adopter in areas such as oncology and neurodegeneration. Indeed, the Directors believe that the Company's recent research collaboration and option to license agreement with MSD, which, if triggered by MSD, includes an upfront cash payment, and the possibility of up to $347.5 million in option exercise and development and regulatory milestone payments for each of up to three indications, plus tiered royalties on annual net sales of any licensed products derived from the collaboration, is indicative of the strength of the Company's development and clinical capability.

6.2 Strategy

The development of a novel class of therapeutics is driven by the progress and understanding generated by the underlying research. Whilst the Company's initial focus and interest was in the auto-immune and gastrointestinal space, the Directors believe the more immediate and greater value of live biotherapeutics is in therapeutic areas such as oncology where there is a potential to seek accelerated approval based on strong early clinical efficacy to address high unmet need tumour indications. The Company's research in oncology, and also that of third parties, supports the rationale that the microbiome can significantly impact the outcome of immunotherapy. Through the Company's MicroRx® platform we have identified a specific strain with a robust immune-stimulatory mechanism, which showed a strong effect in pre-clinical models as both a monotherapy and also in combination with checkpoint inhibitors.

Through the Company's research collaboration and option to license agreement with MSD, we are investigating the use of our strain in combination with Keytruda® at MD Anderson, Houston. The programme is focussed on those patients who have initially responded to checkpoint therapy but have subsequently progressed. Although this programme is in its early stages and recruitment to trial takes time given the material health challenges such patients face, the data generated so far is encouraging. The Directors believe that, if the safety and initial clinical efficacy readout from the first 12 patients recruited in the study, which we expect in Q2 2020, are positive, this will provide further validation and justification for an accelerated development pathway for MRx0518.

As the Company continues to build its focus in the oncology space, we will continue to look at new indication areas for our existing candidates, such as the pancreatic cancer trial recently commenced, as well as using MicroRx® to discover other novel therapies with different mechanisms, exemplified by MRx1299, which has been shown to exhibit Histone deacetylase (HDAC) inhibitory activity.

Beyond cancer, our work in asthma and neurodegeneration are both examples where the Directors believe the Company's live biotherapeutics approach has the potential to address significant unmet clinical needs. Asthma is a disease in which there has been little development in terms of new therapies in recent years, and there are still significant numbers of patients who are unable to effectively control their disease. Through our MicroRx® platform, the Company was able to identify a novel LBP that can address both neutrophilic and eosinophilic lung inflammation concurrently - something not possible with existing approved asthma therapies. This programme is now in a Phase I/II trial from which top line clinical data is expected in Q4 2020.

Similarly, with an increasingly aging population, neurodegeneration is becoming a significant burden on the healthcare system and it has also proved elusive for the pharmaceutical industry to tackle it through traditional approaches. The Company has most recently focussed our MicroRx® platform on the gut-brain axis. This work has identified two LBP candidates that address neuroinflammation and neurodegeneration in pre-clinical models. We are now working to plan initial clinical studies in this area of high unmet need.

In order to realise value in our original gastrointestinal and auto-immune programmes the Company intends to seek partnerships to facilitate further development. With the upcoming data readouts from the Phase II study of Blautix® in IBS, the Company is actively working with potential partners with whom the Company could enter into a licensing transaction pursuant to which the partner would lead the global development and commercialisation of Blautix®, with the Company providing support to the clinical and manufacturing functions.

6.3 Prospects

Over the coming months, the Company anticipates a number of clinical data readouts. Top line interim clinical data from the Blautix® Phase II study in IBS is anticipated in Q2 2020, with top line data on all subjects expected in Q3 2020.

Full safety and initial clinical data from Part A of the MRx0518 / Keytruda® Phase I/II study is expected in Q2 2020. In our other oncology studies, the Directors expect initial biomarker data from the MRx0518 Phase I monotherapy neoadjuvant window study in Q3 2020.

7. FINANCIAL INFORMATION

The published audited accounts of the Group for the last two financial years ended on 31 December 2017 and 31 December 2018, and the unaudited interim results of the Group for the half year ended 30 June 2019, are available from the Company's website, www.4dpharmaplc.com.

8. RISK FACTORS

The Company operates within a complex regulatory environment, which is subject to change. The nature of LBP development exposes the Company to a number of additional risks and uncertainties which could affect our ability to meet our strategic goals, our business model and our operating environment.

The Company sets out its Company and market specific risk factors on a continual basis in its annual reports, which supplement the risk factors set out in its original admission document. The Company's most recently published annual report is that for the year to 31 December 2018, which is available on the Company's website: https://www.4dpharmaplc.com/en/investors/reports-presentations

Some additional risk factors in relation to the Fundraising are set out below. Although this list does not purport to be comprehensive, it represents, in the Board's view, the principal additional risks and areas of uncertainty that the Company will face following completion of the Fundraising. Shareholders should take independent advice if they wish to consider the suitability of these risks with regard to their own particular circumstances and investment criteria.

Insufficient level of working capital in the event that clinical data and future prospects of LBP candidates fail to meet management expectations

While the Directors are confident in the prospects of the expected results of the clinical trials of its LBP candidates, there can be no guarantee that investors or prospective partners will take the same view on announcement. In such event, and in the absence of MSD triggering one or more of its options under the research collaboration and option to license agreement or another platform deal being agreed with MSD or another partner, the Directors would need to consider rapidly alternative strategic options. Such options would include the sale of the Company's platform technology and/or programmes in the near future, the cessation of the Company's ongoing research and development activities or the Company entering into liquidation or administration.

Failure of existing Shareholders to vote in favour of the Resolutions at the General Meeting

If the Resolutions are not passed at the General Meeting, the Board believes that there is no certainty that the Company will have access to sufficient alternative sources of funding, and the Directors would need to consider alternative strategic options, potentially including the sale of assets or the Company entering into liquidation or administration. In such a scenario, the Directors would not expect that existing Shareholders would receive any material value for their Ordinary Shares.

Access to further capital and dilution

Due to the nature of drug development, and despite the positive development of, and potential future milestone payments from, the research collaboration and option to license agreement with MSD to develop live biotherapeutics for vaccines using the Company's platform, the Company is likely to require additional funds for operating expenses and capital expenditure requirements. Accordingly, the Company is likely to need to engage in public or private equity financings or by raising debt securities convertible into Ordinary Shares, or rights to acquire these securities to secure additional funds. Further, the rights, preferences and privileges attaching to new securities issued in future could be superior to those of the Ordinary Shares.

If the Company is unable to raise capital when needed, or on attractive terms, it may need to delay, reduce or close the Company's research and development programmes or any future commercialisation efforts.

Third-party patents could limit the Group's freedom to operate

A third-party patent could be granted that affects the Company's technology or one of its products. This could lead to us having to negotiate a licence, seeking to revoke the patent in legal proceedings, or even being unable to commercialise the future product, materially affecting future revenues.

Current patent disputes brought against the Company's patent rights do not cover any product in active development and so even if those challenges are ultimately successful, they will not leave any product unprotected or jeopardise the Company's freedom to operate in any way.

Product development in a breakthrough technology could encounter unforeseen delays to programmes

LBPs are a novel and emerging technology; neither the Company nor anyone else has taken an LBP through development and regulatory approval to the marketplace. The Company is currently working on a number of wholly owned development programmes in our pipeline which, subject to funding and successful development, will provide the Group with multiple opportunities to progress its proprietary product candidates to commercialisation. Failure to complete sufficient development activities (including but not limited to the enrollment of patients into clinical studies in accordance with planned timetables and costings) may impact on the Group's ability to bring products to market, whether with partners or independently. Such impact would affect the timings of future revenues, may require additional funding and hinder the Group's ability to deliver its strategic goals.

Failure to gain regulatory approval

The biotechnology and pharmaceutical markets are highly regulated by government authorities in the UK, the US and Europe. These regulatory requirements are a major factor in determining whether a substance can be developed into a marketable product and the amount of time and cost associated with such development. Even if the Company's products are approved, they may still face subsequent regulatory difficulties which could result in commercialisation delays and therefore financial loss.

TERMS AND CONDITIONS OF THE PLACING

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN 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, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

IMPORTANT NOTICE

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") (WHICH IS FOR INFORMATION PURPOSES ONLY) ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (THE "EEA") WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF DIRECTIVE 2003/71/EC, AS AMENDED FROM TIME TO TIME, INCLUDING BY DIRECTIVE 2010/73/EC TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS"); AND (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS WHO FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS); (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 THE SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

THIS ANNOUNCEMENT INCLUDES "FORWARD-LOOKING STATEMENTS" WHICH INCLUDES ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACT, INCLUDING, WITHOUT LIMITATION, THOSE REGARDING THE COMPANY AND THE COMPANY'S BUSINESS', FINANCIAL POSITION, BUSINESS STRATEGY, PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS INCLUDING PROSPECTIVE DEVELOPMENT AND COMMERCIALISATION ACTIVITIES, OR ANY STATEMENTS PRECEDED BY, FOLLOWED BY OR THAT INCLUDE THE WORDS "TARGETS", "BELIEVES", "EXPECTS", "AIMS", "INTENDS", "WILL", "MAY", "ANTICIPATES", "WOULD", "COULD" OR SIMILAR EXPRESSIONS OR NEGATIVES THEREOF. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS BEYOND THE COMPANY'S CONTROL THAT COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY OR THE COMPANY'S BUSINESS TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE COMPANY'S PRESENT AND FUTURE BUSINESS STRATEGIES AND THE ENVIRONMENT IN WHICH THE COMPANY AND THE COMPANY'S BUSINESS WILL OPERATE IN THE FUTURE. AS A RESULT, PROSPECTIVE INVESTORS SHOULD NOT RELY ON SUCH FORWARD-LOOKING STATEMENTS DUE TO THE INHERENT UNCERTAINTY THEREIN. NO REPRESENTATION OR WARRANTY IS GIVEN AS TO THE COMPLETENESS OR ACCURACY OF THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS ANNOUNCEMENT. THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS AT THE DATE OF THIS DOCUMENT. THE COMPANY EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO DISSEMINATE ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT ANY CHANGE IN THE COMPANY'S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENTS ARE BASED UNLESS REQUIRED TO DO SO BY APPLICABLE LAW. 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.

THIS ANNOUNCEMENT IS NOT AN OFFER OR SOLICITATION FOR SALE OR SUBSCRIPTION IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION, SALE OR SUBSCRIPTION WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. SUBJECT TO CERTAIN EXCEPTIONS AND AT THE SOLE DISCRETION OF THE COMPANY, THE PLACING SHARES AND WARRANTS ARE BEING OFFERED AND SOLD ONLY OUTSIDE OF THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS.

THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA. THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM REGISTRATION. NO PUBLIC OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES.

THE PLACING SHARES AND WARRANTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE US SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY IN THE UNITED STATES, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE PLACING OR THE ACCURACY OR ADEQUACY OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

EACH PLACEE SHOULD CONSULT WITH ITS ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES AND WARRANTS.

The distribution of this Announcement, any part of it or any information contained in it, and/or the Placing and/or the issue of the Placing Shares and/or Warrants in certain jurisdictions may be restricted by law in certain jurisdictions. No action has been taken by the Company, the Bookrunners or any of their respective affiliates, agents, directors, officers or employees that would permit an offer of the Placing Shares or Warrants or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares and Warrants in any jurisdiction where action for that purpose is required. Any person into whose possession this Announcement, any part of it or any information contained in it, comes are required by the Company and the Bookrunners to inform themselves about and to observe any such restrictions.

No representation or warranty, express or implied, is made or given by or on behalf of the Bookrunners or any of their respective affiliates or any of such persons' directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this Announcement and no liability whatsoever is accepted by the Bookrunners or any of such persons' affiliates, directors, officers or employees or any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith.

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 from the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Placing Shares or Warrants and the Placing Shares and Warrants have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or the Republic of South Africa. Accordingly, the Placing Shares and Warrants may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the EEA.

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 the "Important Notice" section of this Announcement.

By participating in the Bookbuild and the Placing, each Placee will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares and Warrants 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 and Warrants 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 and Warrants pursuant to the Placing:

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

2.2 in the case of any Placing Shares and Warrants acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive:

(a) the Placing Shares and Warrants 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 the Bookrunners have been given to the offer or resale; and

(b) where Placing Shares and Warrants have been acquired by it on behalf of persons in any Relevant Member State other than Qualified Investors, the offer of those Placing Shares and Warrants to it is not treated under the Prospectus Directive as having been made to such persons;

3. it is acquiring the Placing Shares and Warrants for its own account or is acquiring the Placing Shares and Warrants 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;

No prospectus

The Placing Shares and Warrants are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require any prospectus or other offering document to be published. No prospectus or other offering document has been or will be submitted to be approved by the FCA in relation to the Placing, the Placing Shares or the Warrants and Placees' commitments will be made solely on the basis of the information contained in the Placing Documents and any information publicly announced through a RIS 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 sent to Placees by Bryan Garnier and N+1 Singer respectively to confirm their subscription for Placing Shares and Warrants.

Each Placee, by participating in the Placing, agrees that the content of the Placing Documents 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 the Bookrunners or the Company or any other person and none of the Bookrunners, the Company nor 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. No Placee should consider any information in this Announcement to be legal, tax or business advice. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Details of the Placing Agreement and the Placing Shares

The Bookrunners are acting as joint bookrunners in connection with the Placing and have today entered into the Placing Agreement with the Company under which, on the terms and subject to the conditions set out in the Placing Agreement, the Bookrunners, as agents for and on behalf of the Company, have severally (and not jointly or jointly and severally) agreed to use their respective reasonable endeavours to procure placees for the Placing Shares and Warrants.

The final number of Placing Shares and Warrants at the Issue Price will be set out in an allocation schedule agreed between the Bookrunners and the Company following the Bookbuild ("Allocation Schedule"). The Placing is not being underwritten by the Bookrunners.

The Placing Shares will, when issued, be credited as fully paid up and will 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 on or in respect of the Ordinary Shares after the date of issue of the Placing Shares, and will on issue be free of all claims, liens, charges, encumbrances and equities.

Application for listing and admission to trading

Application will be made to the London Stock Exchange plc (the "London Stock Exchange") for admission to trading of the Placing Shares on AIM (the "Admission").

It is expected that Admission of the Placing Shares will occur at or before 8.00 a.m. on 10 March 2020 (or such later time and/or date as the Bookrunners may agree with the Company but in any event not later than 8.00am on 24 March 2020) and that dealings in the Placing Shares will commence at that time.

Bookbuild

The Bookrunners will today commence the Bookbuild and this Announcement gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares or Warrants.

Warrants

The Warrants will be issued on the basis of one Investor Warrant per two Placing Shares subscribed for and will be subject to the terms and conditions of the Warrant Instrument. Each Warrant will entitle the registered holder, on valid exercise of the same, to subscribe for one new Ordinary Share at 100p per share. The Warrants shall be exercisable from the date of Admission until the fifth anniversary of Admission. No application will be made for the Warrants to be admitted to trading on AIM.

The Warrants shall be constituted by a warrant instrument to be executed by the Company prior to Admission. The warrant instrument will contain (i) customary provisions adjusting the subscription price and number of Warrants for distributions of capital, share splits and share consolidations and (ii) an undertaking from the Company to make an application to the London Stock Exchange for any Ordinary Shares allotted on the exercise of the Warrants to be admitted to trading on AIM.

Participation in, and principal terms of, the Placing

1. N+1 Singer (either through itself or through any of its affiliates) is acting as joint bookrunner and joint broker to the Placing 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. Bryan Garnier (either through itself or through any of its affiliates) is acting as joint bookrunner and joint broker to the Placing as agent for and on behalf of the Company. Bryan Garnier 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 Bryan Garnier or for providing advice in relation to the matters described in this Announcement.

3. The Bookrunners are arranging the Placing severally, and not jointly or jointly and severally, as bookrunners and placing agents of the Company. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by either of the Bookrunners. Each of the Bookrunners may itself agree to be a Placee in respect of all or some of the Placing Shares or Warrants or may nominate any member of its group to do so.

4. The number of Placing Shares and Warrants will be agreed by the Bookrunners (in consultation with the Company) following completion of the Bookbuild. Subject to the finalisation of the Allocation Schedule, the Issue Price and the number of Placing Shares and Warrants to be issued will be announced on an RIS following the completion of the Bookbuild via the Result of Placing Announcement.

5. Allocations of the Placing Shares and Warrants will be determined by the Company after consultation with the Bookrunners (the proposed allocations having been supplied by the Bookrunners to the Company in advance of such consultation). Subject to the finalisation of the Allocation Schedule, allocations will be confirmed orally by the Bookrunners and a Form of Confirmation will be despatched as soon as possible thereafter. A Bookrunner's oral confirmation to such Placee constitutes an irrevocable legally binding commitment upon such person (who will at that point become a Placee), in favour of the Bookrunners and the Company, to acquire the number of Placing Shares and Warrants allocated to it and to pay the Issue Price in respect of such shares on the terms and conditions set out in this Appendix and in accordance with the Company's articles of association. Except with the relevant Bookrunner's consent, such commitment will not be capable of variation or revocation after the time at which it is submitted. Each Placee's allocation and commitment will be evidenced by a Form of Confirmation issued to such Placee by the relevant Bookrunner. The terms of this Appendix will be deemed incorporated in that Form of Confirmation.

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

7. All obligations under the Bookbuild and the Placing will be subject to fulfilment or (where applicable) waiver 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 "Right to terminate under the Placing Agreement".

8. By participating in the Placing, each Placee agrees 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.

9. To the fullest extent permissible by law, neither the Bookrunners, nor any of their respective affiliates, agents, directors, officers or employees shall have any responsibility or liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, none of the Bookrunners, , nor any of their respective affiliates, agents, directors, officers or employees shall have any responsibility or liability (including to the extent permissible by law, any fiduciary duties) in respect of the Bookrunners' conduct of the Placing.

10. The Placing Shares and Warrants will be issued subject to the terms and conditions of this Announcement and each Placee's commitment to subscribe for Placing Shares and Warrants on the terms set out herein will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or the Bookrunners' conduct of the Placing.

11. All times and dates in this Announcement may be subject to amendment. The Bookrunners shall notify the Placees and any person acting on behalf of the Placees of any changes.

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 Bookrunners' obligations under the Placing Agreement are conditional on customary conditions, including (amongst others) (the "Conditions"):

1. the posting by no later than 19 February 2020 (by first class pre-paid mail) of the Circular to Shareholders;

2. Admission occurring no later than 8.00 a.m. on 10 March 2020 (or such later time and/or date, not as the Bookrunners may otherwise agree with the Company but in any event not later than 8.00 a.m. on 24 March 2020 );

3. the Subscription Agreements not having lapsed or been terminated and having been completed in accordance with their terms, subject only to Admission;

4. the Resolutions being passed at the General Meeting;

5. none of the warranties or undertakings contained in the Placing Agreement being or having become untrue, inaccurate or misleading at any time before Admission, and no fact or circumstance having arisen which would constitute a breach of any of the warranties or undertakings given in the Placing Agreement;

6. the delivery by the Company to the Bookrunners of a certificate signed by a Director for and on behalf of the Company not later than 5.00 p.m. on the Business Day immediately prior to the date on which Admission is expected to occur (and dated as of such date); and

7. the Company having complied with all of its obligations under the Placing Agreement which fall to be performed or satisfied prior to Admission.

The Bookrunners (if they both agree) may, at their discretion and upon such terms as they think fit, waive compliance by the Company with the whole or any part of any of the Company's obligations in relation to the Conditions or extend the time or date provided for fulfilment of any such Conditions in respect of all or any part of the performance thereof. The condition in the Placing Agreement relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

If: (i) any of the Conditions are not fulfilled or (where permitted) waived by the Bookrunners by the relevant time or date specified (or such later time or date as the Company and the Bookrunners may agree); or (ii) the Placing Agreement is terminated in the circumstances specified below under "Right to terminate under the Placing Agreement", the Placing will not proceed and the Placees' rights and obligations hereunder in relation to the Placing Shares and Warrants shall cease and terminate at such time and each Placee agrees that no claim can be made by it or on its behalf (or any person on whose behalf the Placee is acting) in respect thereof.

None of the Bookrunners, nor 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 they may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any Condition to the Placing, nor for any decision they may make as to the satisfaction of any Condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Bookrunners.

Right to terminate under the Placing Agreement

Each of the Bookrunners is entitled, at any time before Admission, to terminate the Placing Agreement in accordance with its terms in certain circumstances, including (amongst other things):

1. where there has been a breach by the Company of any of the warranties or undertakings contained in the Placing Agreement or any other provision of the Placing Agreement;

2. if any of the Conditions have (i) become incapable of satisfaction or (ii) not been satisfied before the latest time provided in the Placing Agreement and have not been waived if capable of being waived by the Bookrunners;

3. the occurrence of a material adverse change or certain force majeure events; or

4. if any matter has arisen before Admission which might reasonably be expected to give rise to an indemnity claim under the Placing Agreement.

Upon termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement, subject to certain exceptions.

By participating in the Placing, each Placee agrees that (i) the exercise by either of the Bookrunners of any right of termination or of any other discretion under the Placing Agreement shall be within the absolute discretion of such Bookrunner and that it need not make any reference to, or consult with, Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise or failure to so exercise and (ii) its rights and obligations terminate only in the circumstances described above under "Right to terminate under the Placing Agreement" and "Conditions of the Placing", and its participation will not be capable of rescission or termination by it after oral confirmation by the Bookrunners of the allocation and commitments following the close of the Bookbuild.

Registration and Settlement

Settlement of transactions in the Placing Shares (ISIN: GB00BJL5BR07) following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions. The Bookrunners reserve the right to require settlement for, and delivery of, the Placing Shares (or any part thereof) to Placees by such other means that they may deem necessary if delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Following the close of the Bookbuild, each Placee to be allocated Placing Shares and Warrants in the Placing will be sent a Form of Confirmation in accordance with the standing arrangements in place with the relevant Bookrunner stating the number of Placing Shares and Warrants allocated to them at the Issue Price, the aggregate amount owed by such Placee to the Bookrunner and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions in respect of the Placing Shares and Warrants that it has in place with the relevant Bookrunner.

The Company will deliver the Placing Shares to a CREST account operated by the relevant Bookrunner as agent for the Company and the relevant Bookrunner will enter its delivery instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

It is expected that settlement in respect of the Placing Shares will take place on 10 March 2020 on a delivery versus payment basis.

The Warrants will not be listed or admitted to trading on AIM or any other stock exchange and will not be capable of being settled in CREST. Accordingly, the Company will, via its registrar, despatch definitive certificates representing such Warrants that are issued to you as part of your participation in the Placing as soon as possible following Admission and in any event with 10 Business Days (as defined in the Warrant Instrument) of such date. Each Placee will need to provide details for certificated registration of their Warrants, as well as contact details and a delivery address, to the relevant Bookrunner as part of their Form of Confirmation.

Interest is chargeable daily on payments not received from Placees in respect of their confirmed allocations on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by the Bookrunners.

Each Placee is deemed to agree that, if it does not comply with these obligations, the relevant Bookrunner may sell any or all of the Placing Shares and Warrants allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Bookrunners' account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and will be required to bear any stamp duty or stamp duty reserve tax or other taxes or duties (together with any interest or penalties) imposed in any jurisdiction which may arise upon the sale of such Placing Shares and Warrants on such Placee's behalf.

If Placing Shares and/or Warrants are to be delivered to a custodian or settlement agent, Placees should ensure that the Form of Confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares and/or Warrants are issued 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 and/or Warrants should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. If there are any circumstances in which any stamp duty or stamp duty reserve tax or other similar taxes or duties (including any interest and penalties relating thereto) is payable in respect of the allocation, allotment, issue, sale, transfer or delivery of the Placing Shares and/or Warrants (or, for the avoidance of doubt, if any stamp duty or stamp duty reserve tax is payable in connection with any subsequent transfer of or agreement to transfer Placing Shares and/or Warrants), none of the Bookrunners nor the Company shall be responsible for payment thereof.

Representations, warranties, undertakings and acknowledgements

By participating in the Placing each Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with the Bookrunners (in their capacity as bookrunners and placing agents of the Company in respect of the Placing) and the Company, in each case as a fundamental term of their application for Placing Shares and Warrants, the following:

1. it has read and understood this Announcement in its entirety and its subscription for Placing Shares and Warrants is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and 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 the Placing, the Company, the Placing Shares, the Warrants or otherwise other than the information contained in the Placing Documents and the Publicly Available Information;

2. 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 rules and practices of AIM, which includes a description of the Company's business and the Company's financial information, including balance sheets and income statements, and that it is able to obtain or has access to such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded companies, without undue difficulty;

3. the person whom it specifies for registration as holder of the Placing Shares and Warrants will be (a) itself or (b) its nominee, as the case may be. None of the Bookrunners nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax or other similar taxes or duties imposed in any jurisdiction (including interest and penalties relating thereto) ("Indemnified Taxes"). Each Placee and any person acting on behalf of such Placee agrees to indemnify the Company and the Bookrunners on an after-tax basis in respect of any Indemnified Taxes;

4. neither the Bookrunners nor any of their respective affiliates agents, directors, officers and employees accepts any responsibility for any acts or omissions of the Company or any of the directors of the Company or any other person (other than the relevant Bookrunner) in connection with the Placing;

5. time is of the essence as regards its obligations under this Announcement;

6. any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to the Bookrunners;

7. it will not redistribute, forward, transfer, duplicate or otherwise transmit this Announcement or any part of it, or any other presentational or other material concerning the Placing (including electronic copies thereof) to any person and represents that it has not redistributed, forwarded, transferred, duplicated, or otherwise transmitted any such Documents to any person;

8. no prospectus or other offering document is required under the Prospectus Directive, nor will one be prepared in connection with the Bookbuild, the Placing, the Placing Shares or the Warrants and it has not received and will not receive a prospectus or other offering document in connection with the Bookbuild, the Placing, the Placing Shares or the Warrants;

9. in connection with the Placing, the Bookrunners and any of their affiliates acting as an investor for its own account may subscribe for Placing Shares and Warrants in the Company and in that capacity may retain, purchase or sell for its own account such Placing Shares and Warrants in the Company and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing. Accordingly, references in this Announcement to the Placing Shares and Warrants being issued, offered or placed should be read as including any issue, offering or placement of such shares in the Company to each of the Bookrunners or any of their affiliates acting in such capacity;

10. each of the Bookrunners and their affiliates may enter into financing arrangements and swaps with investors in connection with which each of the Bookrunners and any of their affiliates may from time to time acquire, hold or dispose of such securities of the Company, including the Placing Shares and Warrants;

11. the Bookrunners do not intend to disclose the extent of any investment or transactions referred to in paragraphs 9 and 10 above otherwise than in accordance with any legal or regulatory obligation to do so;

12. the Bookrunners do not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement;

13. its participation in the Placing is on the basis that it is not and will not be a client of any of the Bookrunners in connection with its participation in the Placing and that the Bookrunners have no duties or responsibilities to it for providing the protections afforded to their respective clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of their respective rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

14. the content of the Placing Documents and the Publicly Available Information has been prepared by and is exclusively the responsibility of the Company and neither the Bookrunners nor their respective affiliates agents, directors, officers or employees nor any person acting on behalf of any of them is responsible for or has or shall have any liability for any information, representation or statement contained in, or omission from, this Announcement, the Publicly Available Information or otherwise 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, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by such person;

15. (a) the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for Placing Shares and Warrants is contained in the Placing Documents or any Publicly Available Information (save that in the case of Publicly Available Information, a Placee's right to rely on that information is limited to the right that such Placee would have as a matter of law in the absence of this paragraph 15(a)), such information being all that such Placee deems necessary or appropriate and sufficient to make an investment decision in respect of the Placing Shares and Warrants;

(b) it has neither received nor relied on any other information given, or representations, warranties or statements, express or implied, made, by any of the Bookrunners or the Company nor any of their respective affiliates, agents, directors, officers or employees acting on behalf of any of them (including in any management presentation delivered in respect of the Bookbuild) with respect to the Company, the Placing, the Placing Shares or the Warrants or the accuracy, completeness or adequacy of any information contained in the Placing Documents, or the Publicly Available Information or otherwise;

(c) none of the Bookrunners, nor 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, nor will provide, it with any material or information regarding the Placing Shares, the Warrants or the Company or any other person other than the information in the Placing Documents or the Publicly Available Information nor has it requested any of the Bookrunners, the Company, any of their respective affiliates or any person acting on behalf of any of them to provide it with any such material or information; and

(d) none of the Bookrunners or the Company will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement,

provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

16. it may not rely, and has not relied, on any investigation that the Bookrunners, any of their affiliates or any person acting on their behalf, may have conducted with respect to the Placing Shares and Warrants, the terms of the Placing or the Company, and none of such persons has made any representation, express or implied, with respect to the Company, the Placing, the Placing Shares, the Warrants or the accuracy, completeness or adequacy of the information in the Placing Documents, the Publicly Available Information or any other information;

17. in making any decision to subscribe for Placing Shares and Warrants it:

(a) has such knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of subscribing for the Placing Shares and Warrants;

(b) will not look to the Bookrunners for all or part of any such loss it may suffer;

(c) is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of an investment in the Placing Shares and Warrants;

(d) is able to sustain a complete loss of an investment in the Placing Shares and Warrants;

(e) has no need for liquidity with respect to its investment in the Placing Shares and Warrants;

(f) has made its own assessment and has satisfied itself concerning the relevant tax, legal, currency and other economic considerations relevant to its investment in the Placing Shares and Warrants; and

(g) has conducted its own due diligence, examination, investigation and assessment of the Company, the Placing Shares, the Warrants and the terms of the Placing and has satisfied itself that the information resulting from such investigation is still current and relied on that investigation for the purposes of its decision to participate in the Placing;

18. it is subscribing for the Placing Shares and Warrants for its own account or for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the acknowledgements, representations and agreements contained in this Announcement;

19. it is acting as principal only in respect of the Placing or, if it is acting for any other person, it is:

(a) 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) will remain liable to the Company and/or the Bookrunners 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);

20. it and any person acting on its behalf is entitled to subscribe for the Placing Shares and Warrants under the laws and regulations of all relevant jurisdictions that apply to it and that it has fully observed such laws and regulations, has capacity and authority and is entitled to enter into and perform its obligations as a subscriber of Placing Shares and Warrants and will honour such obligations, and has obtained all such governmental and other guarantees, permits, authorisations, approvals and consents which may be required thereunder and complied with all necessary formalities to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) and will honour such obligations and that it has not taken any action or omitted to take any action which will or may result in the Bookrunners, the Company or any of their respective directors, officers, agents, employees or advisers acting in breach of the legal or regulatory requirements of any jurisdiction in connection with the Placing;

21. where it is subscribing for Placing Shares and Warrants for one or more managed accounts, it is authorised in writing by each managed account to subscribe for the Placing Shares and Warrants for each managed account;

22. it irrevocably appoints any duly authorised officer of each Bookrunner 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 and Warrants for which it agrees to subscribe for upon the terms of this Announcement;

23. the Placing Shares and Warrants have not been and will not be registered or otherwise qualified and that a prospectus will not be cleared in respect of any of the Placing Shares or Warrants under the securities laws or legislation of the United States, Australia, Canada, Japan or the Republic of South Africa, or any state, province, territory or jurisdiction thereof;

24. the Placing Shares and Warrants may not be offered, sold, or delivered or transferred, directly or indirectly, in or into the above jurisdictions or any jurisdiction in which it would be unlawful to do so and no action has been or will be taken by any of the Company, the Bookrunners or any person acting on behalf of the Company or the Bookrunners that would, or is intended to, permit a public offer of the Placing Shares or Warrants in the United States, Australia, Canada, Japan or the Republic of South Africa or any country or jurisdiction, or any state, province, territory or jurisdiction thereof, where any such action for that purpose is required;

25. unless otherwise specifically agreed with the Bookrunners, it is not and at the time the Placing Shares and Warrants are subscribed for, neither it nor the beneficial owner of the Placing Shares and Warrants will be, a resident of, nor have an address in, Australia, New, Japan, the Republic of South Africa or any province or territory of Canada;

26. it may be asked to disclose in writing or orally to the Bookrunners:

(c) if he or she is an individual, his or her nationality; or

(d) if he or she is a discretionary fund manager, the jurisdiction in which the funds are managed or owned;

27. it, and any prospective beneficial owner for whose account or benefit it is purchasing the Placing Shares and Warrants (i) is, and at the time the Placing Shares and Warrants are subscribed for will be, located outside the United States and is acquiring the Placing Shares and Warrants in an "offshore transaction" as defined in, and in accordance with, Regulation S; (ii) is not subscribing for and/or purchasing Placing Shares and Warrants as a result of any "directed selling efforts" as defined in Regulation S;

28. it understands that the Placing Shares and Warrants have not been, and will not be, registered under the US 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 US Securities Act, or pursuant to an exemption from the registration requirements of the US 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 US Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares or Warrants;

29. it (and any account for which it is purchasing) is not acquiring the Placing Shares and Warrants with a view to any offer, sale, resale, transfer, delivery or distribution thereof, directly or indirectly into the United States;

30. 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 Placing 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 in the United States;

31. if in a member state of the EEA, unless otherwise specifically agreed with the Bookrunners in writing, it is a Qualified Investor;

32. it has not offered or sold and will not offer or sell any Placing Shares or Warrants to persons in the EEA except to Qualified Investors or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the EEA within the meaning of the Prospectus Directive;

33. if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, the Placing Shares and Warrants subscribed for 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 prior consent of the Bookrunners has been given to each proposed offer or resale;

34. if in the United Kingdom, that it is a person (i) having professional experience in matters relating to investments who falls within the definition of "investment professionals" in Article 19(5) of the Order or (ii) who falls within Article 49(2) (a) to (d) ("High Net Worth Companies, Unincorporated Associations, etc") of the Order, or (iii) to whom it may otherwise lawfully be communicated;

35. it has not offered or sold and will not offer or sell any Placing Shares or Warrants to persons in the United Kingdom, 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 Financial Services and Markets Act 2000, as amended ("FSMA");

36. it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares and Warrants in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person and it acknowledges and agrees that the Placing Documents have not and will not have been approved by either Bookrunner in its capacity as an authorised person under section 21 of the FSMA and it may not therefore be subject to the controls which would apply if it was made or approved as a financial promotion by an authorised person;

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

38. if it is a pension fund or investment company, its subscription for Placing Shares and Warrants is in full compliance with applicable laws and regulations;

39. it has complied with its obligations under the Criminal Justice Act 1993 and Articles 8, 10 and 12 of MAR and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and any related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof (the "Regulations") and the Money Laundering Sourcebook of the FCA 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;

40. in order to ensure compliance with the Regulations, each Bookrunner (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 the relevant Bookrunner or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares and/or Warrants may be retained at the relevant Bookrunner's absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form, or Warrants in certificated form, may be delayed at the relevant Bookrunner's or the Company's registrars', as the case may be, absolute discretion. If within a reasonable time after a request for verification of identify the relevant Bookrunner (for itself and as agent on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, either the relevant Bookrunner 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;

41. the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares and Warrants 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 (depositary receipts and clearance services) and that the Placing Shares and Warrants are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer Placing Shares and Warrants into a clearance service;

42. it (and any person acting on its behalf) has the funds available to pay for the Placing Shares and Warrants for which it has agreed to subscribe and acknowledges and agrees that it will make payment in respect of the Placing Shares and Warrants allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares and Warrants may be placed with other subscribers or sold as the Bookrunners may in their sole discretion determine and without liability to such Placee, who will remain liable for any amount by which the net proceeds of such sale falls short of the product of the relevant Issue Price and the number of Placing Shares and Warrants allocated to it and will be required to bear any stamp duty, stamp duty reserve tax or other taxes or duties (together with any interest, fines or penalties) imposed in any jurisdiction which may arise upon the sale of such Placee's Placing Shares and Warrants;

43. any money held in an account with the relevant Bookrunners on behalf of the Placee and/or any person acting 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 the 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 the relevant Bookrunner's money in accordance with the client money rules and will be held by it under a banking relationship and not as trustee;

44. its allocation (if any) of Placing Shares and Warrants will represent a maximum number of Placing Shares and Warrants which it will be entitled, and required, to subscribe for, and that the Bookrunners or the Company may call upon it to subscribe for a lower number of Placing Shares and Warrants (if any), but in no event in aggregate more than the aforementioned maximum;

45. none of the Bookrunners, nor any of their respective affiliates, nor any person acting on behalf of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing;

46. if it has received any 'inside information' (for the purposes of MAR and section 56 of the Criminal Justice Act 1993) in relation to the Company and its securities in advance of the Placing, it confirms that it has received such information within the market soundings regime provided for in article 11 of MAR and associated delegated regulations and it has not:

a. used that inside information to acquire or dispose of securities of the Company or financial instruments related thereto or cancel or amend an order concerning the Company's securities or any such financial instruments;

b. used that inside information to encourage, require, recommend or induce another person to deal in the securities of the Company or financial instruments related thereto or to cancel or amend an order concerning the Company's securities or such financial instruments; or

c. disclosed such information to any person, prior to the information being made publicly available;

47. the rights and remedies of the Company and the Bookrunners under the terms and conditions in this Announcement are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others; and

48. these terms and conditions of the Placing and any agreements entered into by it pursuant to the terms and conditions of the Placing, and all non-contractual or other obligations arising out of or in connection with them, shall be governed by and construed in accordance with the laws of England and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract (including any dispute regarding the existence, validity or termination of such contract or relating to any non-contractual or other obligation arising out of or in connection with such contract), except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares and Warrants (together with any interest chargeable thereon) may be taken by either the Company or the Bookrunners in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.

The foregoing representations, warranties, confirmations, acknowledgements, agreements and undertakings are given for the benefit of the Company as well as each of the Bookrunners and are irrevocable. The Bookrunners, the Company and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, confirmations, acknowledgements, agreements and undertakings. Each prospective Placee, and any person acting on behalf of such Placee, irrevocably authorises the Company and the Bookrunners to produce this Announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein.

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

Taxation

The agreement to allot and issue Placing Shares and Warrants to Placees (and/or to persons for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct from the Company for the Placing Shares and Warrants in question. Such agreement also assumes that the Placing Shares and Warrants are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer the Placing Shares and Warrants into a clearance service. If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares and Warrants, stamp duty or stamp duty reserve tax or other similar taxes or duties may be payable, for which neither the Company nor the Bookrunners will be responsible and the Placees shall indemnify the Company and the Bookrunners on an after-tax basis for any stamp duty or stamp duty reserve tax or other similar taxes or duties (together with interest, fines and penalties) in any jurisdiction paid by the Company or the Bookrunners in respect of any such arrangements or dealings. If this is the case, each Placee should seek its own advice and notify the Bookrunners accordingly. Placees are advised to consult with their own advisers regarding the tax aspects of the subscription for Placing Shares and Warrants.

The Company and the Bookrunners are not liable to bear any taxes that arise on a sale of Placing Shares and Warrants subsequent to their acquisition by Placees, including any taxes arising otherwise than under the laws of any country in the EEA. Each prospective Placee should, therefore, take its own advice as to whether any such tax liability arises and notify the Bookrunners and the Company accordingly. Furthermore, each prospective Placee agrees to indemnify on an after-tax basis and hold each of the Bookrunners and/or the Company and their respective affiliates harmless from any and all interest, fines or penalties in relation to stamp duty, stamp duty reserve tax and all other similar duties or taxes in any jurisdiction to the extent that such interest, fines or penalties arise from the unreasonable default or delay of that Placee or its agent.

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

No statement in the Placing Documents is intended to be a profit forecast or estimate, and no statement in the Placing Documents 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.

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.

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 pursuant to the Placing will not be admitted to trading on any stock exchange other than the AIM market of 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, the Placing Documents.

DEFINITIONS

The following definitions apply in this Appendix to this Announcement, and as the context shall admit, in the Announcement: