Duke Capital Regulatory News (DUKE)

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

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN MAR) WERE TAKEN IN RESPECT OF CERTAIN MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECOME AWARE OF SUCH INSIDE INFORMATION, AS PERMITTED BY MAR. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

Duke Royalty Limited

("Duke Royalty", "Duke" or the "Company")

Proposed Fundraising to raise at least £20 million

Duke Royalty Limited (AIM: DUKE), the royalty financing company, is pleased to announce a proposed conditional placing and subscription ("Fundraising") to raise at least £20 million, before expenses, by way of a Placing of New Shares at a price of 40 pence per share (the Issue Price) and a Subscription by certain overseas investors on the same terms. The net proceeds of the Fundraising will allow the Company, inter alia, to continue to finance its diversified pipeline of royalty financing opportunities.

Highlights

· Proposed Placing and Subscription to raise gross proceeds of at least £20 million

· Net proceeds to diversify portfolio of royalty investments and provide working capital

· Two new potential royalty partners in advanced stages of negotiation

· Additional proceeds to execute on new identified opportunities and/or follow on investments in existing royalty partners

· Following deployment of capital, Duke could have exposure to up to 6 underlying companies through four Royalty Partners

· Increased dividend yield expected following deployment of capital

· Issue price of 40p per share

· Placing to be undertaken by way of an accelerated bookbuild exercise which will be launched immediately following release of this Announcement

· Cenkos and Mirabaud acting as joint bookrunners

Neil Johnson, Duke's CEO commented, "We are delighted with the support that we have received from both new and existing institutional shareholders. Following our Admission in March 2017, we have gained traction in Europe for our royalty financing product to the point where our near-term pipeline exceeds our available funds. The net funds of this placing will accelerate our royalty investments and expected returns to shareholders, and supports the Company as we execute on our position as the only UK-quoted non-resource royalty company."

Background to and reasons for the Fundraising

In March 2017, in conjunction with its re-admission to AIM, the Company raised £15 million in growth capital in order to commence building a diversified portfolio of royalty investments. Shortly thereafter in April 2017, Duke made its inaugural royalty transaction through the provision of €8 million Temarca BV, a Netherlands-based river cruise provider with an initial cash on cash yield of 12.8 per cent under the terms of the partnership. This was followed by its second royalty transaction in October 2017, in which £7 million over two tranches were provided to Lynx Equity (UK) Limited, which owns and operates a number of companies in a diverse range of industries. The terms of this partnership provide for an initial cash yield of 12.0 per cent.

Having already secured two royalty partners, the Directors' strategy is to continue to build a diversified portfolio of royalty streams from companies ("Royalty Partners"), increasing its short to mid-term dividend yield and de-risking its business. Over the past months, in conjunction with Oliver Wyman, the Company has continued evaluate a number of potential Royalty Partners. The Company is now seeking to raise additional funds as the current pipeline of potential transactions exceeds the Company's available funds.

The Board is now seeking to raise at least £20 million to provide funding for two new Royalty Partners totaling £16 million, both of which are in advanced stages of negotiation and will be made on Duke's typical terms. The balance of the funds will be applied towards follow on investments in existing partners as Duke has options to contribute more capital to both Temarca BV and Lynx UK on the terms of their original contributions, or be applied to pipeline deals to further diversify the portfolio at the Board's discretion, as well as for working capital. The Placing is not conditional on the completion of the investments in the new Royalty Partners, which are still subject to final due diligence and definitive documentation.

The Board believes that the Fundraising and subsequent deployment of capital will provide investors with a more diversified portfolio. The portfolio is expected to provide Duke with a long term predictable revenue stream, paid monthly with embedded growth. Upon capital deployment, the Board believes that Duke will be able to increase the Company's dividend.

Use of Proceeds

It is intended that the proceeds from the Fundraising will be used to provide follow on investment in the Company's existing portfolio of Royalty Partners, to capitalise on identified near term opportunities and to provide working capital.

The two near-term investment opportunities that the Company is currently pursuing are:

A) A £9 million investment into a specialist coatings manufacturer

This company was founded in the 1940's to provide industrial and powder coatings and decorative paint. It has over 120 employees and is a key supplier to several global brands. The funds to be provided by Duke would enable the Royalty Partner to buyout an existing shareholder and provide funds for general working capital purposes. Non-binding terms have been agreed for up to £9 million investment in line with Duke's typical deal structure including:

· Over 13% initial cash-on-cash yield

· an annual adjustment factor based on revenue performance, subject to a collar

· a 30-year term, will have seniority over equity, and provides the Royalty Partner with a buy-back option incurring a penalty

This investment opportunity is still subject to final due diligence and definitive documentation. It is expected that this transaction will be concluded within weeks of completion of the Fundraising.

B) A £7 million investment into a glass processing business

This company was established in 1979 and is now a leading independent glass merchants and processors, with a diverse group of 300 active customers. Duke's funds are intended to enable the Royalty Partner to buyout a remaining shareholder of a subsidiary, refinance bank debt and provide funds for general working capital purposes. Non-binding terms up to £7 million investment are expected to be finalized in line with Duke's typical deal structure including:

• Over 13% initial cash-on-cash yield

• an annual adjustment factor based on revenue performance, subject to a collar

• a 30-year term, senior security, and provides the Royalty Partner with a buy-back option incurring a penalty

This investment opportunity is still subject to final due diligence and definitive documentation. It is expected that this transaction will be completed by April 2018.

In the event that neither A) or B) complete, the Board would expect to deploy proceeds into alternative Royalty Partners, and/or the current options the Company has in relation to the existing Royalty Partners. The Board's stated goal is to increase the diversification in the number of Royalty Partners, and has a further identified near term pipeline of new Royalty Partners with up to £26 million of capital which could be deployed into such partners.

Details of the Placing

The Placing will be conducted by way of an accelerated bookbuild process ("Bookbuild") which will be launched immediately following this Announcement, in accordance with the terms and conditions set out in the Appendix to this Announcement. Cenkos and Mirabaud are acting as joint-bookrunners in connection with the Placing. The Bookbuild is expected to close no later than 12.00 p.m. (London time) on 5 December 2017. However, the timing of the closing of the Bookbuild, the final number and allocation of Placing Shares will be determined at the discretion of the Company, Cenkos and Mirabaud. A further announcement will be made following closing of the Placing, confirming the final details of the transaction.

The Issue Price represents a discount of approximately 4.76 per cent. to the Closing Price of 42 pence per Existing Ordinary Share, being the Closing Price on 4 December 2017.

The Fundraising is conditional, inter alia, on the granting by Shareholders of authorities to the Directors to dis apply the pre-emption rights contained within the Articles and to issue shares and admission of the New Shares to trading on AIM becoming effective. A Circular will shortly be sent to shareholders convening an Extraordinary General Meeting at which they will be asked to give the Directors the requisite authorities. Application will be made to the London Stock Exchange for the New Shares to be admitted to trading on AIM at the conclusion of the Extraordinary General Meeting.

It is the intention of certain Directors of the Company to participate in the Fundraising on the same terms as the other investors.

The Fundraising is not conditional on the Company entering into a contract with either of the two companies described above, and may be invested in another opportunity, or opportunities, as the Board deems suitable. The Board anticipates that the net proceeds of the Fundraising should be fully invested (or committed to be invested) within 6 months of Admission. However, there is no fixed period within which the Company would be required to conclude royalty agreements or return funds to Shareholders.

Current Trading

The Company announced its interim results for the period ended 30 September 2017 on 8 November 2017, within which it provided an update on trading. Since this date, the Board confirms that Duke's trading continues in line with market expectations. As detailed above, the Company has continued to identify and diligence potential new Royalty Partners whilst it has started to generate royalty revenues from the investment with its two existing Royalty Partners.

Expected Timetable of Principal Events

For further information, please contact:

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

The Appendix to this Announcement (which forms part of this Announcement) sets out the terms and conditions of the Placing. Persons who have chosen to participate in the Placing, by making an oral or written offer to acquire Placing Shares, 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 herein, and to be providing the representations, warranties, agreements, acknowledgements and undertakings contained in the Appendix.

About Duke Royalty

Headquartered in Guernsey, Duke Royalty Limited provides alternative financing solutions to a diversified range of businesses in Europe and abroad. Duke Royalty's experienced team and exclusive partnership provide financing solutions to private companies that are in need of capital but whose owners wish to maintain equity control of their business. Duke Royalty's royalty investments are intended to provide robust, stable, long term returns to its shareholders.

Duke Royalty is listed on the AIM market under the ticker DUKE. For more information, visit www.dukeroyalty.com.

DEFINITIONS

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

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

IMPORTANT NOTICE

This Announcement, and the information contained herein is not for release, publication or distribution, directly or indirectly, in whole or in part, in or into or from the United States, Canada, Australia, Japan or the Republic of South Africa, or any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction (the "Restricted Jurisdictions"). The New Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold or delivered, directly or indirectly, in or into the United States absent registration under the Securities Act except pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act. No public offering of the New Shares is being made in the United States. The New Shares are being offered and sold outside the United States in "offshore transactions", as defined in, and in compliance with, Regulation S under the Securities Act. Persons receiving this Announcement (including custodians, nominees and trustees) must not forward, distribute, mail or otherwise transmit it in or into the United States or use the United States mails, directly or indirectly, in connection with the Fundraising. This Announcement does not constitute or form part of an offer to sell or issue or a solicitation of an offer to buy, subscribe for or otherwise acquire any securities in any jurisdiction including, without limitation, the Restricted Jurisdictions or any other jurisdiction in which such offer or solicitation would be unlawful. This Announcement and the information contained in it is not for publication or distribution, directly or indirectly, to persons in a Restricted Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction.

No action has been taken by the Company or the Joint Brokers or any of their respective directors, officers, partners, agents, employees or affiliates that would permit an offer of the New Shares or possession or distribution of this Announcement or any other publicity material relating to such New Shares in any jurisdiction where action for that purpose is required. Persons receiving this Announcement are required to inform themselves about and to observe any restrictions contained in this Announcement.

This Announcement is directed at and is only being distributed to: (A) persons in member states of the European Economic Area who are "qualified investors", as defined in article 2.1(e) of the Prospectus Directive (Directive 2003/71/EC), as amended (the "Prospectus Directive"), (B) if in the United Kingdom, persons who (i) have professional experience in matters relating to investments who fall within the definition of "investment professionals" in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") or fall within the definition of "high net worth companies, unincorporated associations etc." in article 49(2)(a) to (d) of the FPO and (ii) are "qualified investors" as defined in section 86 of the Financial Services and Markets Act 2000, as amended ("FSMA") or (C) persons to whom it may otherwise lawfully be communicated (each, a "Relevant Person"). No other person should act on or rely on this Announcement and persons distributing this Announcement must satisfy themselves that it is lawful to do so. By accepting the terms of this Announcement, investors represent and agree that they are a Relevant Person.

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

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Announcement should seek appropriate advice before taking any action.

This Announcement is not being distributed by, nor has it been approved for the purposes of section 21 of FSMA by, a person authorised under FSMA. This Announcement is being distributed and communicated to persons in the United Kingdom only in circumstances in which section 21(1) of FSMA does not apply.

No prospectus or offering document will be made available in connection with the matters contained in this Announcement and no such prospectus is required (in accordance with the Prospectus Directive) to be published.

Certain statements in this Announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as "aim", "anticipate", "believe", "could", "intend", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries in which the Company's businesses operate to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by the UK Financial Conduct Authority ("FCA"), the London Stock Exchange or applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Any indication in this Announcement of the price at which the Company's shares have been bought or sold in the past cannot be relied upon as a guide to future performance. Persons needing advice should consult an independent financial adviser. 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.

Cenkos Securities and Mirabaud Securities, which are authorised and regulated in the United Kingdom by the FCA, are acting for the Company and for no one else in connection with the Fundraising and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Cenkos Securities and Mirabaud Securities or for providing advice in relation to the Fundraising, or any other matters referred to in this Announcement.

Grant Thornton, which is authorised and regulated in the United Kingdom by the FCA, is acting for the Company and for no one else in connection with the Fundraising and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Grant Thornton or for providing advice in relation to the Fundraising, or any other matters referred to in this Announcement.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by or on behalf of the Company, Grant Thornton, Cenkos Securities or Mirabaud Securities or by their affiliates or their respective agents, directors, officers and employees as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.

The New Shares to be issued pursuant to the Fundraising will not be admitted to trading on any stock exchange other than to trading on AIM.

The Appendix to this Announcement sets out the terms and conditions of the Fundraising. By participating in the Fundraising, each person who is invited to and who chooses to participate in the Fundraising by making or accepting an oral and legally binding offer to acquire Fundraising Shares will be deemed to have read and understood this Announcement in its entirety and to be making such offer on the terms and subject to the conditions set out in this Announcement and to be providing the representations, warranties, undertakings and acknowledgements contained in the Appendix.

Members of the public are not eligible to take part in the Fundraising and no public offering of New Shares is being or will be made.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this Announcement.

APPENDIX - TERMS AND CONDITIONS OF THE PLACING

For invited placees only-Important Information

The information contained in this Announcement, including this Appendix, is restricted and is not for publication, release or distribution in or into the United States, any province of Canada, Australia, Japan or the Republic of South Africa.

Each Placee should consult with its own advisers as to legal, tax, business and related aspects in relation to any acquisition of Placing Shares.

Duke Royalty Limited

Proposed Placing of New Ordinary Shares at the Issue Price of 40 pence per Placing Share

The terms and conditions set out in this Appendix (the "Terms and Conditions") do not constitute an offer or invitation to acquire, underwrite or dispose of, or any solicitation of any offer or invitation to acquire, underwrite or dispose of, any Ordinary Shares or other securities of the Company to any person in any jurisdiction to whom it is unlawful to make such offer, invitation or solicitation in such jurisdiction. Persons who seek to participate in the Placing must inform themselves about and observe any such restrictions and must be persons who are able to lawfully receive this document in their jurisdiction (all such persons being "Relevant Persons"). In particular, neither this Announcement, nor these Terms and Conditions constitute an offer or invitation (or a solicitation of any offer or invitation) to acquire, underwrite or dispose of or otherwise deal in any Ordinary Shares or other securities of the Company in the United States, Canada, Australia, Japan or the Republic of South Africa, or in any other jurisdiction in which any such offer, invitation or solicitation is or would be unlawful.

Members of the public are not eligible to take part in the Placing. Prospective investors must inform themselves as to: (a) the legal requirements within their own countries for the purchase, holding, transfer, redemption or other disposal of the Ordinary Shares; (b) any foreign exchange restrictions applicable to the purchase, holding, transfer, redemption or other disposal of the Ordinary Shares which they might encounter; and (c) the income and other tax consequences which may apply in their own countries as a result of the purchase, holding, transfer, redemption or other disposal of the Ordinary Shares. In the UK, the Placing and these Terms and Conditions are directed only at persons whose ordinary activities involve them acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses and who have professional experience in matters relating to investments falling within the definition of 'investment professionals' in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") or are high net worth body corporates, unincorporated associations or partnerships or trustees of high value trusts as described in Article 49 of the FPO or to whom they may otherwise lawfully be communicated. This announcement (including these Terms and Conditions) does not constitute an offer to sell, or the solicitation of an offer to acquire or subscribe for, Ordinary Shares in any jurisdiction where such offer or solicitation is unlawful or would impose any unfulfilled registration, qualification, publication or approval requirements on the Company or the Joint Brokers. The offer and sale of the New Shares has not been and will not be registered under the applicable securities laws of Canada, Australia, Japan or the Republic of South Africa. Subject to certain exemptions, the New Shares may not be offered to or sold within Canada, Australia, Japan or the Republic of South Africa or to any national, resident or citizen of Canada, Australia, Japan or the Republic of South Africa.

The New Shares have not been, and will not be, registered under the US Securities Act, or the securities laws of any other jurisdiction of the United States. The New Shares may not be offered or sold, directly or indirectly, in or into the United States (except pursuant to an exemption from, or a transaction not subject to, the registration requirements of the US Securities Act). No public offering of the New Shares is being made in the United States. The New Shares are being offered and sold only outside the United States in "offshore transactions" within the meaning of, and in reliance on, Regulation S. The New Shares have not been approved or disapproved by the United States Securities and Exchange Commission, any state securities commission in the United States or any other regulatory authority in the United States, nor have any of the foregoing authorities passed on or endorsed the merits of the Placing or the accuracy or adequacy of the information contained in this announcement (including these Terms and Conditions). Any representation to the contrary is a criminal offence in the United States.

In relation to each member state of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"), no New Shares have been offered, or will be offered, pursuant to the Placing to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Ordinary Shares which has been approved by the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that offers of New Shares to the public may be made at any time under the following exemptions under the Prospectus Directive, if they are implemented in that Relevant Member State:

A. to any legal entity which is a "qualified investor" (as defined in the Prospectus Directive);

B. to fewer than 150, or, if the Relevant Member State has not implemented the relevant provision of the Prospectus Directive, 100 natural or legal persons (other than "qualified investors") in such Relevant Member State; or

C. in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of New Shares shall result in a requirement for the publication of a prospectus pursuant to Article 3 of the Prospectus Directive or any measure implementing the Prospectus Directive in a Relevant Member State and each person who initially acquires any New Shares or to whom any offer is made under the Placing will be deemed to have represented, acknowledged and agreed that it is a "qualified investor" within the meaning of Article 2(1)(e) of the Prospectus Directive. For the purposes of this provision, the expression "an offer to the public" in relation to any offer of New Shares in any Relevant Member State means a communication in any form and by any means presenting sufficient information on the terms of the offer and any New Shares to be offered so as to enable an investor to decide to purchase or subscribe for the New Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression the "Prospectus Directive" means Directive 2003/71/EC (as amended), to the extent implemented in the Relevant Member State and includes any relevant implementing measure in each Relevant Member State.

These Terms and Conditions apply to persons who are invited to and who choose to purchase Placing Shares in the Placing (each a "Placee" and the expressions "you" and "your" refer to a Placee). Each Placee hereby agrees with the Joint Brokers to be legally and irrevocably bound by these Terms and Conditions which are the Terms and Conditions on which the Placing Shares will be acquired in the Placing.

The Terms and Conditions must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which the Terms and Conditions set out herein relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

Acceptance of any offer incorporating the Terms and Conditions (whether orally or in writing or evidenced by way of a contract note) constitutes a binding irrevocable commitment by a Placee, subject to the Terms and Conditions set out below, to subscribe and pay for the relevant number of Placing Shares (the "Placing Participation"). Such commitment is not capable of termination or rescission by the Placee in any circumstances except fraud. All such obligations are entered into by the Placee with Cenkos or Mirabaud respectively in their capacity as agent for the Company and are therefore directly enforceable by the Company.

Terms of the Placing

Application will be made to the London Stock Exchange for the admission of the New Shares to be issued pursuant to the Placing to trading on AIM. Except as otherwise set forth herein, it is anticipated that dealings in the New Shares will commence on AIM at 8:00a.m. on 22 December 2017 for normal account settlement and that Admission will become effective on that date. The New Shares will not be admitted to trading on any stock exchange other than AIM. Each Placee will be deemed to have read these Terms and Conditions in their entirety. The Joint Brokers are acting for the Company only and no one else in connection with the Placing and will not regard any other person (whether or not a recipient of these Terms and Conditions) as a client in relation to the Placing and to the fullest extent permitted by law and applicable FCA rules, neither Cenkos or Mirabaud nor any of their affiliates will have any liability to Placees or to any person other than the Company in respect of the Placing.

The New Shares will rank equally in all respects with the Existing Ordinary Shares of the Company on Admission, including the right to receive dividends or other distributions declared on or after Admission, if any.

Conditions

Each Placing Participation is in all respects conditional upon:

(i) the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms;

(ii) the passing of the Resolution at the Extraordinary General Meeting or any adjournment thereof; and

(iii) Admission having become effective,

in each case by 22 December 2017 or such later time and/or date as the Company and the Joint Brokers agree, but in any event being no later than 5 January 2018.

Pursuant to the Placing Agreement, the Joint Brokers have agreed, on behalf of and as agents for the Company, to use their reasonable endeavours to procure subscribers or purchasers for the Placing Shares at the Issue Price, subject to these Terms and Conditions.

The Placing Agreement contains certain warranties and indemnities from the Company for the benefit of the Joint Brokers. The Joint Brokers may, in their absolute discretion, terminate the Placing Agreement if prior to Admission, inter alia, a force majeure event occurs, there is a material breach of any of the undertakings or any fact or circumstance arises which causes a warranty to become materially untrue or inaccurate in any respect. The exercise by the Joint Brokers of any right of termination or any right of waiver exercisable by the Joint Brokers contained in the Placing Agreement or under the Terms and Conditions set out herein is within the absolute discretion of the Joint Brokers and the Joint Brokers will not have any liability to any Placee whatsoever in connection with any decision to exercise, or not exercise, any such rights.

If (i) any of the conditions in the Placing Agreement are not satisfied (or, where relevant, waived) or (ii) the Placing Agreement is terminated or (iii) the Placing Agreement does not otherwise become unconditional in all respects, the Placing will not proceed and all funds delivered by you to the Joint Brokers will be returned to you at your risk without interest, and your rights and obligations hereunder shall cease and determine at such time and no claim shall be made by you in respect thereof.

Neither the Company nor the Joint Brokers owes any fiduciary duty to any Placee in respect of the representations, warranties, undertakings or indemnities in the Placing Agreement.

Settlement

The Company has applied for the Ordinary Shares to be held in CREST and settlement of the New Shares will take place in CREST.

Placing Shares will be delivered direct into your CREST account, provided payment has been made in terms satisfactory to Cenkos or Mirabaud and the details provided by you have provided sufficient information to allow the CREST system to match to the CREST account specified. Placing Shares comprised in your Placing Participation are expected to be delivered to the CREST account which you specify by telephone to your usual sales contact at Cenkos or Mirabaud.

If you do not provide any CREST details or if you provide insufficient CREST details to match within the CREST system to your details, Cenkos or Mirabaud may at their discretion deliver your Placing Participation in certificated form provided payment has been made in terms satisfactory to Cenkos or Mirabaud and all conditions in relation to the Placing have been satisfied or waived.

Subject to the conditions set out above, payment in respect of your Placing Participation is due as set out below. You should provide your settlement details in order to enable instructions to he successfully matched in CREST. The relevant settlement details are as follows:

In the event that the Placing Agreement does not become unconditional in all respects or is terminated, the Placing will not proceed. Once the Placing Shares are allotted and issued, such Placing Shares will be admitted to CREST with effect from Admission. It is expected that dealings on AIM in the Placing Shares will commence at 8:00a.m. on 22 December 2017.

Further Terms, Confirmations and Warranties

In accepting the Placing Participation, you make the following confirmations, acknowledgements, warranties and/or undertakings to the Joint Brokers and the Company and their respective directors/ agents and advisers:

1. You represent and warrant that you have read these Terms and Conditions in its entirety and acknowledge that your participation in the Placing will be governed by the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings of these Terms and Conditions.

2. You acknowledge and agree that your acceptance of your Placing Participation on the terms of these Terms and Conditions is legally binding, irrevocable and is not capable of termination or rescission by you in any circumstances (save for Admission not having occurred by 5 January 2018).

3. You acknowledge and agree that no offering document or prospectus has been or will be prepared in connection with the Placing and you have not received and will not receive a prospectus or other offering document in connection with the bookbuild, the Placing or the Placing Shares.  

4. You acknowledge and agree that the Ordinary Shares are admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules and that it is able to obtain or access such information, or comparable information concerning any other publicly traded company, in each case without undue difficulty.

5. You confirm, represent and warrant that none of the Joint Brokers nor the Company nor any of their respective affiliates, agents, directors, officers, consultants or employees nor any person acting on behalf of any of them has provided, and none of them will provide, you with any material or information regarding the Placing Shares or the Company or any other person other than this Announcement, including this Appendix, nor have you requested any of the Joint Brokers, the Company, nor any of their respective affiliates or any person acting on behalf of any of them to provide you with any such material or information.

6. You acknowledge and agree that the content of this Announcement is exclusively the responsibility of the Company and that none of the Joint Brokers nor any of their respective affiliates, agents, directors, officers, consultants or employees nor any person acting on their behalf has or shall have any liability, in contract, tort or otherwise for any information, representation or statement contained in this Announcement, any misstatements in or omission from any publicly available information relating to the Company, or any information previously or subsequently published by or on behalf of the Company, including, without limitation, any information required to be published by the Company pursuant to applicable laws (the "Exchange Information") and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or any information published prior to or on the date of this Announcement by or on behalf of the Company or otherwise. You further represent, warrant and agree that the only information on which you are entitled to rely and on which you have relied in committing to subscribe for the Placing Shares is contained in this Announcement and any information previously published by the Company by notification to a RIS, such information being all that you deem necessary to make an investment decision in respect of the Placing Shares and that you have neither received nor relied on any other information given or representations, warranties or statements made by the Joint Brokers or the Company and none of the Joint Brokers or the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. You further acknowledge and agree that you have relied on your own investigation of the business, financial or other position of the Company in deciding to participate in the Placing. None of the Joint Brokers, the Company nor any of their respective affiliates has made any representations to you, express or implied, with respect to the Company, the Placing and the Placing Shares or the accuracy, completeness or adequacy of the Exchange Information, and each of them expressly disclaims any liability in respect thereof. Nothing in this paragraph or otherwise in this Announcement excludes the liability of any person for fraudulent misrepresentation made by that person.

7. You confirm, represent and warrant that you are sufficiently knowledgeable to understand and be aware of the risks associated with, and other characteristics of, the Placing Shares and, among others, of the fact that you may not be able to resell the Placing Shares except in accordance with certain limited exemptions under applicable securities legislation and regulatory instruments.

8. You confirm, represent and warrant, if a body corporate, that you are a valid and subsisting body corporate and have all the necessary corporate capacity and authority to execute your obligations in connection with your Placing Participation.

9. You agree that the exercise by the Joint Brokers of any right of termination or any right of waiver exercisable by the Joint Brokers contained in the Placing Agreement or the exercise of any discretion thereunder is within the absolute discretion of the Joint Brokers and the Joint Brokers will not have any liability to you whatsoever in connection with any decision to exercise or not exercise any such rights. You acknowledge that if (i) any of the conditions in the Placing Agreement are not satisfied (or, where relevant, waived) or (ii) the Placing Agreement is terminated or (iii) the Placing Agreement does not otherwise become unconditional in all respects, the Placing will lapse and your rights and obligations hereunder shall cease and determine at such time and no claim shall be made by you in respect thereof.

10. You acknowledge and agree that the Joint Brokers are not acting for, and that you do not expect the Joint Brokers to have any duties or responsibilities towards, you for providing protections afforded to their reputation customers or clients under the Financial Conduct Authority Conduct of Business Source Book or advising you with regard to your Placing Participation and that you are not, and will not be, a customer or client of either of the Joint Brokers as defined by the Financial Conduct Authority Conduct of Business Source Book. Likewise, the Joint Brokers will not treat any payment by you pursuant to these Terms and Conditions as client money governed by the Financial Conduct Authority Conduct of Business Source Book.

11. You confirm, represent and warrant that you may lawfully acquire the Placing Shares comprising your Placing Participation and that you have complied with and will comply with all applicable provisions of FSMA with respect to anything done by you in relation to the Placing Shares in, from or otherwise involving, the United Kingdom.

12. You acknowledge and agree that your agreement with the Joint Brokers to acquire Placing Shares, whether by telephone or otherwise is a legally binding contract and the Terms and Conditions of your Placing Participation and any non-contractual obligation therefrom will be governed by and construed in accordance with, the laws of England and Wales to the exclusive jurisdiction of whose courts you irrevocably agree to submit.

13. You acknowledge and agree that time shall be of the essence as regards obligations pursuant to these Terms and Conditions.

14. You acknowledge and agree that it is the responsibility of any person outside of the United Kingdom wishing to subscribe for or purchase Placing Shares to satisfy himself that, in doing so, he complies with the laws of any relevant territory in connection with such subscription or purchase and that he obtains any requisite governmental or other consents and observes any other applicable formalities.

15. You acknowledge and agree that the Placing Shares have not been and will not be registered under the laws, or with any securities regulatory authority, of the United States, any province of Canada, Australia, Japan or the Republic of South Africa and, subject to limited exceptions, the Placing Shares may not be offered, sold, transferred or delivered, directly or indirectly into the United States, any province of Canada, Japan, Australia or the Republic of South Africa or their respective territories and possessions.

16. You warrant that you have complied with all relevant laws of all relevant territories, obtained all requisite governmental or other consents which may be required in connection with your Placing Participation, complied with all requisite formalities and that you have not taken any action or omitted to take any action which will or may result in the Joint Brokers, the Company, or any of their respective directors, officers, agents, employees, affiliates or advisers acting in breach of the legal or regulatory requirements of any territory in connection with the Placing or your application.

17. You warrant that your acquisition of Placing Shares does not trigger, in the jurisdiction in which you are resident or located: (i) any obligation to prepare or file a prospectus or similar document or any other report with respect to such purchase; (ii) any disclosure or reporting obligation of the Company; or (iii) any registration or other obligation on the part of the Company.

18. You confirm that you are acting as principal only in respect of the Placing or, if you are acting for any other person: (i) you are duly authorised to do so and have full power to make the acknowledgments, representations and agreements herein on behalf of each such person; (ii) you exercise sole investment discretion as to each such person's account; (iii) you are and will remain liable to the Joint Brokers and the Company for the performance of all your obligations as a Placee in respect of the Placing (regardless of the fact that you are acting for another person); (iv) you are both an "authorised person" for the purposes of the Financial Services and Markets Act 2000 ("FSMA") and a Qualified Investor as defined in the Prospectus Directive acting as agent for such person, and (iv) such person is either (1) a "qualified investor" as referred to at section 86(7) of FSMA or (2) a "client" (as defined in section 86(2) of FSMA) of yours that has engaged you to act as such client's agent on terms which enable you to make decisions concerning the Placing or any other offers of transferable securities on such client's behalf without reference to such client.

19. You warrant that you have not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to Qualified Investors 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 FSMA.

20. You warrant that if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, that the Placing Shares subscribed for by you in the Placing will not be subscribed for 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 other than qualified investors, or in circumstances in which the prior consent of the Joint Brokers and the Company has been given to the proposed offer or resale.

21. You warrant that you have 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 in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person.

22. You warrant that if in a member state of the EEA, unless otherwise specifically agreed with the Joint Brokers and the Company in writing, that you are a "qualified investor" within the meaning of Article 2(1)(e) of the Prospectus Directive.

23. You warrant that if in the United Kingdom, that you are 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 this Announcement may otherwise lawfully be communicated.

24. You acknowledge and agree that no action has been or will be taken by the Joint Brokers or the Company or any person acting on behalf of the Joint Brokers or the Company that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required.

25. You warrant that in accepting your Placing Participation you are not applying for registration as, or as a nominee or agent for, a person who is or may be a person mentioned in sections 67 to 72 inclusive and sections 93 to 97 inclusive of the Finance Act 1986.

26. You confirm that you have complied with your obligations under the Criminal Justice Act 1993, the Market Abuse Regulation (Regulation (EU) No. 596/2014), 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, 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 Section 6.3 of the Systems and Controls (SYSC) section of the FCA Handbook and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by you to verify the identity of the third party as required by the Regulations.

27. You acknowledge and agree that your agreement with the Joint Brokers to acquire Placing Shares shall be enforceable under the Contracts (Rights of Third Parties) Act 1999 by any of the Company or any affiliate of the Joint Brokers.

28. You acknowledge that these terms and conditions and any agreements entered into by you pursuant to these terms and conditions, and any non-contractual obligations arising out of or in connection with such agreements, shall be governed by and construed in accordance with the laws of England and Wales and you submit (on behalf of yourself and on behalf of any person on whose behalf you are acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Joint Brokers or the Company 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.

29. You acknowledge and agree that the Placing Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States, and are being offered and sold only outside the United States in "offshore transactions" (as defined in Regulation S under the Securities Act). Accordingly, the Placing Shares may not be offered, sold, transferred or delivered directly or indirectly in or into the United States, except pursuant to an effective registration statement under the US Securities Act or an exemption from the registration requirements of the Securities Act, and, in connection with any such transfer, the Company will have the right to obtain, as a condition to transfer, a legal opinion of counsel, in form and by counsel reasonably satisfactory to the Company, that no such Securities Act registration is or will be required along with appropriate certifications by the transferee as to appropriate matters. No representation has been made as to the availability of any exemption under the Securities Act for the reoffer, resale, transfer or delivery of the Placing Shares.

30. You represent and warrant that you have not distributed, forwarded, transferred or otherwise transmitted any presentation or offering materials concerning the Placing Shares within the United States, nor will you do any of the foregoing.

31. You agree, represent and warrant as follows:

31.1 you are, acquiring the Placing Shares in an "offshore transaction" (as defined in Regulation S);

31.2 you will not offer or sell the Placing Shares in the United States absent registration or an exemption from registration under the Securities Act; and

31.3 you are not acquiring the Placing Shares as a result of any form of directed selling efforts (as defined in Rule 902 under the Securities Act).

32. In making an investment decision with respect to the Placing Shares, for yourself and on behalf of any person for whose account you are acquiring the Placing Shares, you represent and warrant that you have:

32.1 not relied on any express or implied representation, warranty or statement made by the Company or the Joint Brokers or any of their respective directors, employees, advisers, agents or affiliates;

32.2 the ability to bear the economic risk of your investment in the Placing Shares and have no need for liquidity with respect to your investment in the Placing Shares;

32.3 such knowledge and experience in financial and business matters that you are capable of evaluating the merits, risks and suitability of investing in the Placing Shares, and are able to sustain a complete loss of any investment in the Placing Shares;

32.4 had access to such financial and other information concerning the Company and the Placing Shares as you deem necessary in connection with your decision to purchase the Placing Shares; and

32.5 investigated independently and made your own assessment and satisfied yourself concerning the relevant tax, legal, currency and other economic considerations relevant to your investment in the Placing Shares, including any federal, state and local tax consequences, affecting you in connection with your purchase and any subsequent disposal of the Placing Shares.

33. You acknowledge that the Company and its financial instruments are subject to the provisions of the MAR and that you will observe the provisions of MAR in relation to the Company's financial instruments, including in relation to the control of any inside information.

34. You undertake to (and to cause any person acting on your behalf to) make payment for the Placing Shares allocated to you in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as the Joint Brokers may in its sole discretion determine and without liability to you.

35. You confirm that your commitment to subscribe for Placing Shares on the terms set out in this Appendix and in the contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Placing.

You acknowledge that the Company, the Joint Brokers, any transfer agent, any distributors or dealers and their respective affiliates and others will rely on the truth and accuracy of the foregoing warranties, acknowledgements, representations, undertakings and agreements, and you agree to indemnify and hold harmless the Company, the Joint Brokers and any of their respective officers, directors, agents, employees or advisers (the "Indemnified Persons") from and against any and all costs, claims losses, damages, liabilities or expenses, including legal fees and expenses (including any VAT thereon), which an Indemnified Person may incur by reason of, or in connection with, any representation, warranty, acknowledgement, agreement or undertaking made herein not having been true when made, any breach thereof or any misrepresentation. You acknowledge and that the rights and remedies of the Company and the Joint Brokers under these Terms and Conditions 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 right or remedy will not prevent the exercise of the other rights and/or remedies.

You further agree that these Terms and Conditions shall survive after completion of the Placing and Admission.