FJET.L Regulatory News (FJET)

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX, AND THE INFORMATION CONTAINED HEREIN, IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, OR REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.

fastjet Plc

("fastjet", the "Company" or the "Group")

29 June 2018

Proposed Capital Raising

fastjet, the low-cost African airline, is pleased to announce a proposed capital raising (the "Capital Raising") to raise gross proceeds of not less than US$10 million comprising:

i. a placing by way of an accelerated book build to raise gross proceeds of not less than US$7 million (the "Placing") at a placing price of 8 pence per new ordinary share (the "Placing Price"); and

ii. a subscription by Solenta Aviation Holdings Limited ("Solenta"), who has agreed to subscribe for 28,924,538 shares at the Placing Price ("Solenta Subscription Shares") for gross proceeds of US$3 million ("Solenta Subscription").

In addition and subject to the passing of certain resolutions at the annual general meeting of the Company that is taking place at 10.00 am today, the Company is proposing to raise up to a maximum of £1.6 million (approximately US$2.1million) by way of an Open Offer made to Qualifying Shareholders (the "Open Offer") at the Placing Price.

The Placing Price represents a premium of 146 per cent. to the closing price of 3.25 pence per ordinary share on 28 June 2018.

The Placing which is being conducted by way of an accelerated book-building process to qualifying investors will be launched immediately following this Announcement, in accordance with the terms and conditions set out in the Appendix to this Announcement.

The Company intends to send a circular to shareholders in connection with the Open Offer on or around 4 July 2018.

Highlights:

· The funds to be raised are expected to provide the Group with sufficient working capital for the remainder of 2018. Further to the change of operational structure detailed below, 50% of the net proceeds raised will be allocated to support the working capital requirements of the Zimbabwe and Mozambique operations and repayment of certain loans with the balance used to support operations in Tanzania and for preparations for the launch of services in South Africa.

· In addition to Solenta, as fastjet's largest shareholder, supporting the Capital Raising, it is intended that Mark Hurst, currently CEO of Solenta Aviation, will join the board of fastjet from 2 July 2018.

· Mr Hurst will be appointed as a Non-Executive Director and will be working closely with CEO, Nico Bezuidenhout on an ongoing basis. Mr Hurst will also be responsible for the country management of the Group's Zimbabwe and Mozambique operations. Going forward, the Company will manage its treasury requirements in line with this revised operational structure with all current and future assets, cash and liabilities of the Group's Zimbabwe and Mozambique operations remaining within these entities, including, once repaid the recently announced loan swap of US$5 million made to Annunaki Investments (Private) Limited. This loan, together with the US$2 million loaned to fastjet by SSCG Africa Holdings, are anticipated to be reversed and repaid by December 2018.

· fastjet experienced a year of stabilisation in 2017 and achieved a number of successes, despite ongoing challenges:

o a significant reduction in the underlying cost base - operating costs reduced by 47%, overhead costs reduced by 58%;

o rationalised routes and right-sized capacity to fastjet's markets;

o Re-fleeting programme completed with benefits clearly visible;

§ Q4 2017 load factors improved by 17 percentage points year on year to 77%;

§ Q4 2017 unit revenue increased by 27% year on year;

§ fastjet now operates two Embraer E190 aircraft in Tanzania, two Embraer E145 aircraft between South Africa and Zimbabwe and an Embraer E145 in Mozambique; and

o bar exceptional items, cashflow breakeven was achieved for Q4 2017.

· The introduction of three ATR72 aircraft will occur in key markets during Q4 2018.

· The Company successfully launched operations in Mozambique in the second half of 2017 and entered into a licence agreement with Federal Airlines (Pty) Ltd ("FedAir"), creating a platform for expansion of the fastjet Brand into South Africa.

· Trading in Zimbabwe continues to improve with revenue increasing by 111% year to April 2018, and PAT improved by 43% year on year.

· Some unexpected headwinds were experienced in 2017:

o Q4 2017 unforeseen engine event: c.US$6.9 million adverse cash-flow impact (US$4.0 million cost and US$2.9 million lost revenue);

o US$2.5 million historic (pre-2017) debtors write-down;

o greater than anticipated accumulation of restricted cash in Zimbabwe; and

o late entry of the two E190 aircraft in Tanzania due to regulatory delays (c.US$5 million adverse revenue impact).

· The Company has taken measures to address its liquidity challenges:

o as announced on 5 April 2018, entered into a US$12 million loan facility with Solenta Aviation Holdings Limited to fund the exercise of the Company's option over the three ATR72 aircraft with the balance to be used for general working capital purposes; and

o as announced on 5 June 2018, entered into loan swap agreements of US$5 million in Zimbabwe in order to make available US$2 million of the restricted cash held within Zimbabwe.

· June 2018 is expected to be the most challenging month in terms of financial headroom for the Group during the 2018 financial year. The Capital Raising announced today is expected to provide adequate headroom for the remainder of the financial year.

· The intention, beyond this current financing, is for the Company to explore financing and/or joint venture options in South Africa to support full scale entry into that market. As the largest aviation market in Africa, the Board believes that South Africa, particularly routes to and from Cape Town, is strategically important to fastjet, which can utilise the current FedAir platform as well as fastjet management's relations and track record in the country. Further announcements regarding the Group's expansion into the South African market will be made as appropriate.

· Trading in the year to date has been in line with market expectations, reflecting the impact of the Stabilisation Plan, a strategy announced in the Company's Interim Results in September 2016. The Company is positioned to capitalise on the African aviation opportunity, with African GDP and aviation growth expectations in 2018 amongst the highest globally.

Nico Bezuidenhout, CEO, commented:

"Today's capital raising will give fastjet the adequate headroom it needs for the remainder of 2018. Although there were some unexpected headwinds in 2017, the Stabilisation Plan put in place by the Board has significantly reduced the cost base of the company and right-sized the business. Trading in the year to date has been in line with market expectations and the Company is now well-positioned to capitalise on future growth."

Directorate Change

The Company also announces the appointment of Mark Hurst as a Non-Executive Director of the Company, with effect from 2 July 2018. 

Mr Hurst has significant aviation experience with particular expertise in fleet management, aircraft sourcing, operating and leasing, as well as the development and implementation of operational efficiencies throughout the aviation value chain. He is highly regarded in the African aerospace sector for his operational track record, his ability to drive strategic initiatives in challenging environments and his value and supply chain management. Having been born and lived in Zimbabwe for twenty eight years, he has extensive country knowledge and additionally drove the development of Solenta Aviation Mozambique.

The Board believes Mr Hurst's Director appointment will further strengthen the fastjet Board and constitutes another important building block in fastjet's growth plan and the development of its business.

Mr Hurst will continue to serve in his current role within the Solenta Aviation group as Group Chief Executive, whilst supporting Mr Bezuidenhout and his team with operational and strategic input.

Rashid Wally, Chairman of fastjet plc, commented:

"I am delighted to welcome Mark to the Board of fastjet. He brings with him a wealth of relevant industry experience and a strong track record of operating in the African aerospace sector that will be of great benefit to the Company."

The names of all companies and partnerships of which Mark Ryan Hurst, aged 45, has been a director or partner at any time in the previous five years are set out below:

There are no other matters which are required to be announced pursuant to paragraph (g) of Schedule 2 to the AIM Rules.

This announcement is released by fastjet Plc and contains information that qualified or may have qualified as inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR"). For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is made by Michael Muller, Chief Financial Officer of fastjet Plc .

For more information, contact:

NOTES TO EDITORS

About Fastjet Plc

fastjet is a multi-award winning low-cost African airline for everyone. It began flight operations in Tanzania in November 2012, flying passengers from Dar es Salaam to just two domestic destinations - Kilimanjaro and Mwanza. Today, fastjet's route network includes Tanzanian domestic routes from its Dar es Salaam base to Kilimanjaro, Mbeya, and Mwanza, and international routes from Tanzania to Lusaka in Zambia and Harare in Zimbabwe. fastjet also began flight operations from its Zimbabwe base in October 2015, and now flies domestically from Harare to Victoria Falls, Harare to Dar es Salaam and internationally from both Harare and Victoria Falls to Johannesburg in South Africa. fastjet launched flights in Mozambique in November 2017 through a brand license agreement with Solenta Aviation Mozambique and offers a 4-city network of services within the country. The airline has flown over 2.5 million passengers with an impressive aggregate 94% on-time performance, establishing itself as a punctual, reliable, and affordable low-cost carrier.

IMPORTANT INFORMATION

This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. The Company cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", or other words of similar meaning. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in the price of commodities or changes in interest rates and foreign exchange rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards (IFRS) applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation or regulatory investigations, the success of future explorations, acquisitions and other strategic transactions and the impact of competition. A number of these factors are beyond the Company's control. As a result, the Company's actual future results may differ materially from the plans, goals, and expectations set forth in the Company's forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. Except as required by the Financial Conduct Authority (the FCA), the London Stock Exchange or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

This Announcement is for information purposes only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

This Announcement has been issued by and is the sole responsibility of the Company. 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 Liberum Capital Limited or by any of its affiliates or agents 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 therefore is expressly disclaimed.

Liberum Capital Limited, 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 Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to its customers or for providing advice to any other person in relation to the Placing or any other matter referred to herein.

The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or Liberum Capital Limited that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Liberum Capital Limited to inform themselves about, and to observe such restrictions.

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

The Placing Shares to which this Announcement relates may be illiquid and / or subject to restrictions on their resale. Prospective purchasers of the Placing Shares should conduct their own due diligence on the Placing Shares. If you do not understand the contents of this Announcement you should consult an authorised financial adviser.

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

The GBP/USD exchange used in respect of the Placing and Solenta Subscription Letters is 1/1.31

Background and rationale for the transactions

2017 was a year of stabilistion for fastjet as the Company continued the implementation of its Stabilisation Plan, which commenced in August 2016. During 2017, the Company carried out key initiatives including network rationalisation and right-sizing of capacity to fastjet's target markets, withdrawing from loss-making routes, fleet reconfiguration and a significant reduction in the underlying cost base. The Group successfully launched operations in Mozambique through its Brand Licence Agreement with Solenta Aviation Mozambique Ltd ("SAM") in the second half of the year and entered into a similar licence agreement with Federal Airlines (Pty) Ltd, creating a platform for expansion of the fastjet Brand into South Africa. The purchase of the fastjet Brand from easyGroup was another important milestone for the Company in 2017, enabling scope for future licence agreements and greater operational flexibility; particularly in terms of the type of aircraft that fastjet operates. The Company also implemented additional revenue generating initiatives including a new Central Reservation System and improved travel agent distribution capability.

A key component of the Stabilisation Plan is to ensure that fastjet operates the appropriate size of fleet in each of its markets, in terms of both number and size of aircraft. The Company exited its last A319 aircraft in January 2018 and now operates two Embraer E190 aircraft in Tanzania, two Embraer E145 aircraft in Zimbabwe and an Embraer E145 in Mozambique. The introduction of three ATR72 aircraft, announced on 29 September 2017, are anticipated to be deployed in key markets from September 2018. The Group holds two Air Operator Certificates ("AOCs") - in Tanzania and Zimbabwe - with the FedAir and Solenta Aviation Mozambique Brand Licence Agreements enabling the fastjet brand to now have access to both the South Africa and Mozambique markets.

Fundraisings

In January 2017 fastjet embarked on a fundraising exercise to finance the Stabilisation Plan, which raised net proceeds of US$26.5 million. At the same time the Company also entered a strategic partnership with Solenta, a South Africa based operator of one of the largest African aircraft fleets. Under this agreement, Solenta provides and operates aircraft on a reduced cash cost, "wet /dry-lease" basis for fastjet and supplies other aviation services. The Board believe that this is an exciting and positive strategic partnership for fastjet as the agreement allows the Company to leverage Solenta's existing African business whilst simultaneously providing the platform to grow and scale fastjet flexibly and cost effectively.

In September 2017, fastjet announced a further fundraising, raising net proceeds of US$42 million to support its growth initiatives, allowing it to enter the Mozambique and South African markets and to purchase an option right on the three ATR72 aircraft noted above.

Although the Company has made significant progress in delivering its growth strategy, it also experienced a number of unexpected headwinds in the period. During the last quarter of 2017 the Company had an unexpected engine event with the outgoing A319 aircraft shortly before its scheduled withdrawal from service, leading to unplanned exceptional cash costs of US$4 million. In addition, the revenues lost as a result of this engine event were approximately US$2.9 million.

In addition to the above, the Group incurred a US$2.5 million bad debt write down in the period in relation to historic trade receivables, representing further pressure on working capital. Moreover, the entry of the two Embraer E190 aircraft in Tanzania was delayed by approximately six weeks due to a longer than anticipated regulatory approval process, resulting in a negative impact of approximately US$5 million to Group revenues.

Whilst the trading performance in Zimbabwe is improving, hard-currency availability and fastjet's ability to repatriate funds from the country remains challenging, further contributing to a shortage of working capital across the Group.

To help manage the working capital shortfall resulting from the unforeseen events in 2017, the Company entered into a US$12 million loan facility with Solenta in April 2018, to fund the exercise of the Company's option over the three ATRs with the balance to be used for general working capital purposes. The Company also entered into unsecured loan agreements with third parties, Annunaki Investments (Private) Limited ("Annunaki") and SSCG Africa Holdings ("SSCG") in June 2018, in order to make available a portion of the Group's restricted cash held within Zimbabwe. The loans are on commercial terms, for a period of six months and allow fastjet to lend US$5 million cash from fastjet Zimbabwe to Annunaki in return for a US$2 million loan to fastjet from SSCG for general working capital purposes across the Group. The intention is that each of the loans are repaid at the end of the six months unless the term is extended by mutual agreement by all of the parties.

At 18 June 2018, the Group's cash balance was US$3.3 million reflecting the purchase of equity in the three ATR72 aircraft referred to above, further operating cash outflows and a creditor reduction. Following the loan swap agreement announced on 5 June 2018, cash balances of US$1.75 million held in Zimbabwe are currently restricted at present due to lack of foreign exchange liquidity in the country.

Based on the Group's latest cashflow forecasts, June 2018 is expected to be the most challenging month in terms of financial headroom for the Group during the 2018 financial year. The Capital Raising announced today is expected to provide adequate headroom for the remainder of the financial year. 

Use of proceeds

The net proceeds of the Capital Raising will be used as follows:

· 50% to support the working capital requirements of the Zimbabwe and Mozambique operations and the repayment of the loan swap agreements with Annunaki and SSCG; and

· 50% to support the working capital requirements of the Tanzania operations and for preparations for the launch of services in South Africa.

Trading and Outlook

Current trading across the Group has been encouraging with benefits of the Stabilisation Plan and growth initiatives taking effect.

· Consolidated Group revenue up c.29% year-on-year following 45% increase in passengers

· Unit revenue up c.11% on prior year, c.4% ahead of budget on c. 17% increase in seat output

· Unit cost (CASK) down 7% on prior year

· EBITDA and PAT improved by 20% and 23% respectively, despite absorbing ATR asset holding cost

· YTD April revenue and PAT performance in-line with market expectations

fastjet remains the leading airline in Tanzania and continues to see stable trading in its largest market. Benefits from the Embraer E190 fleet change are clearly visible with load factors increasing by 16 percentage points to 75% and PAT improvement of 37% year on year.

Trading in Zimbabwe continues to improve with positive political change and demand impact. In the year to April 2018, revenue increase by 111% and PAT improved by 43% year on year.

Under the brand license agreement with Solenta Aviation Mozambique, the first fastjet-branded flight in Mozambique took place on 3 November 2017. Although still in its early stages, this market entry has so far proven highly successful with flights between the major urban centres of Maputo and Nampula, and Beira and Tete achieving load factors of 70% in aggregate. As announced on 21 March 2018, fastjet has also entered into a strategic partnership agreement with LAM Mozambique, the national carrier of Mozambique.

As previously announced, the Company intends to expand its operations to address new target markets. Firstly the Group intends to expand services in Mozambique and Zimbabwe followed by the launch of scheduled services in South Africa in early 2019, subject to obtaining suitable additional fleet and the associated finance. South Africa is strategically important to fastjet given the relative size of the South African aviation market (c.13 million domestic passengers per annum) as well as the existence of strong trade and tourism flows with the existing fastjet markets of Zimbabwe and Tanzania. fastjet's management relations and track record in South Africa, in addition to the FedAir platform, support an expedient launch at the appropriate time. The Company's current intention is to explore financing and/or joint venture options to support full-scale market entry.

Details of the Placing

The Company has entered into a placing agreement (the "Placing Agreement") with Liberum Capital Limited ("Liberum") on customary terms and conditions pursuant to which Liberum has conditionally agreed, as agent for the Company, to use its reasonable endeavours to procure Placees for the Placing Shares at the Placing Price. The Placing is being conducted by way of an Accelerated Book Build led by Liberum as sole bookrunner ("Bookrunner"). Liberum has the discretion to elect to receive some or all of its professional fees pursuant to the Capital Raising in the form of new ordinary shares in the Company at the Placing Price.

The books for the Accelerated Book Build will open with immediate effect. The books are expected to close no later than 10.00 am (London) today. The timing of the closing of the books and the making of allocations may be accelerated or delayed at the Bookrunner's sole discretion. The Appendix to this Announcement contains the detailed terms and conditions of the Accelerated Book Build. The Capital Raising is not being underwritten by Liberum or any other person. Details of the number of Placing Shares conditionally placed with institutional and other investors pursuant to the Placing and gross proceeds will be announced as soon as practicable after the close of the book building process.

Qualifying investors who are invited, and who choose, to participate in the Accelerated Book Build by making an oral and legally binding 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 contained herein and to be making the representations, warranties, undertakings and acknowledgements contained in the Appendix to this Announcement.

The Placing Shares will be issued credited as fully paid and will rank pari passu with existing ordinary shares of the Company ("Existing Ordinary Shares"), including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of such shares after the date of their issue. The Placing Shares and the Subscription Shares will be issued pursuant to the authorities obtained at the general meeting of the Company held on 18 October 2017.

Your attention is drawn to the detailed terms and conditions of the Placing described in the Appendix to this announcement (which forms part of this announcement) (together, the "Announcement").

In addition to the Subscription Letter, the Company has today entered into a Memorandum of Understanding with Solenta (the "Memorandum") pursuant to which the Company has agreed to:

1. procure that the Group's South African subsidiary, Parrot Aviation Pty Ltd ("Parrot"), will prior to Admission, exercise its call option to conditionally acquire FedAir at an agreed consideration of ZAR44.4 million.

2. Prior to Admission, FedAir will make an interest free loan to Solenta of ZAR44.4 million.

3. On completion of the conditions precedents relating to the acquisition of FedAir pursuant to the call option, Solenta will repay the ZAR44.4 million loan to FedAir and FedAir will (following Admission) repay the existing loan balance from Parrot to FedAir of ZAR 37.4 million to be used by Parrot towards settling the purchase price mentione above, with a further loan of ZAR7.0 million extended by FedAir to a Group company of the Company's choosing.

4. fastjet has agreed to waive the licence fee under the FedAir Brand Licence Agreement until the later of:

a. 1 July 2019 (or such later date as Solenta and the Company may agree); or

b. the date on which the fastjet Brand is used by FedAir to sell tickets on scheduled services as an airline.

1 Open Offer Share for every 26 Existing Ordinary Shares

Open Offer Entitlements will be rounded down to the nearest whole number of Open Offer Shares.

Qualifying Shareholders are also being given the opportunity, provided that they take up their Open Offer Entitlement in full, to apply for Excess Shares through the Excess Application Facility.

Assuming full take-up under the Open Offer, the issue of the Open Offer Shares will raise further gross proceeds of approximately £1.6 million for the Company.

If any of the Open Offer Shares are not taken up, the Company and Liberum will consider placing any shortfall with institutional and other investors at the Placing Price.

The Open Offer Shares will, upon issue, rank pari passu with the Placing Shares, the Solenta Subscription Shares and the Existing Ordinary Shares.

Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating the Open Offer Entitlements.

It should be noted that the Open Offer is not a rights issue. Accordingly, the Application Form is not a document of title and cannot be traded. Any Open Offer Shares not applied for under the Open Offer will not be sold in the market or placed for the benefit of Qualifying Shareholders who do not take up their rights to subscribe under the Open Offer.

Details and timetable of the Open Offer will be set out in the Open Offer Circular to be sent to Shareholders and the timetable will also be announced to the market at that time.

Conditions and other information relating to the Capital Raising

The Open Offer is conditional, inter alia, on the Completion of the Placing and the Subscription.

If the Open Offer does not proceed any applications made by Qualifying Shareholders will be rejected and application monies will be returned without payment of interest as soon as practicable.

The Capital Raising will result in the issue of 115,512,471 New Ordinary Shares assuming full take up under the Open Offer (representing, in aggregate, approximately 18.1 per cent. of the Enlarged Share Capital assuming full take up under the Open Offer). The New Ordinary Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares and therefore rank equally for all dividends or other distributions declared, made or paid after the date of issue of the New Ordinary Shares. No temporary documents of title will be issued.

Following the issue of the New Ordinary Shares pursuant to the Capital Raising (and assuming the Open Offer is taken up in full), Qualifying Shareholders who take up their full entitlements, excluding any New Ordinary Shares acquired through the Excess Application Facility, in respect of the Open Offer will undergo a dilution of up to 15.4 per cent. to their interests in the Company because of the Placing and the Solenta Subscription. Qualifying Shareholders who do not take up any of their entitlements in respect of the Open Offer will experience a greater dilution to their interests in the Company because of the Capital Raising.

Related Party Transactions

Solenta, by virtue of its holding of more than 10 per cent. of the existing issued share capital of the Company, is considered a related party of the Company and its participation in the Solenta Subscription is considered a 'related party transaction' under the AIM Rules for Companies. The Directors consider having consulted with the Company's Nominated Adviser, Liberum, that the terms of the Solenta Subscription are fair and reasonable in so far as its Shareholders are concerned.

Application for Admission to trading on AIM

Application will be made to the London Stock Exchange for the Placing Shares, the Subscription Shares and the Open Offer Shares to be admitted to trading on AIM.

It is expected that the Admission for the Placing Shares and the Subscription Shares will become effective and that dealings for normal settlement in the Placing Shares and the Subscription Shares on AIM will commence at 8.00 am on 5 July 2018.

Information 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 any "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 the Placing Shares 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; the 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. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Liberum will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of 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.

APPENDIX: TERMS AND CONDITIONS OF THE PLACING

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX (TOGETHER, THE "ANNOUNCEMENT") AND THE INFORMATION IN IT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS WHO ARE IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA AND ARE "QUALIFIED INVESTORS" AS DEFINED IN ARTICLE 2.1(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE PROSPECTUS DIRECTIVE); AND (B) IN THE UNITED KINGDOM, PERSONS WHO ARE QUALIFIED INVESTORS AND: (I) "INVESTMENT PROFESSIONALS" WITHIN THE MEANING OF ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE ORDER); (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.") OF THE ORDER; OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS RELEVANT PERSONS). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT IS NOT AN OFFER OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN 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 (THE SECURITIES ACT), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR AS PART OF A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. NO OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES. NO MONEY, SECURITIES OR OTHER CONSIDERATION FROM ANY PERSON INSIDE THE UNITED STATES IS BEING SOLICITED AND, IF SENT IN RESPONSE TO THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT, WILL NOT BE ACCEPTED.

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

Persons who are invited to and who choose to participate in the Placing, by making (or on whose behalf there is made) an oral or written offer to subscribe for Placing Shares (the Placees), will be deemed to have read and understood this Announcement, including this Appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in this Appendix. In particular each such Placee represents, warrants and acknowledges to the Company and the Bookrunner that:

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

2. in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors or in circumstances in which the prior consent of the Bookrunner has been given to the offer or resale; or (ii) where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons;

3. it is acquiring the Placing Shares in an "offshore transaction" as defined in and pursuant to Regulation S under the Securities Act; and

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.

The Company and the Bookrunner will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

This Announcement does not constitute an offer, and may not be used in connection with an offer, to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction in which such offer or solicitation is or may be unlawful. This Announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, Australia, Canada, Japan or the Republic of South Africa or in any other jurisdiction in which such publication or distribution is unlawful. Persons into whose possession this Announcement may come are required by the Company to inform themselves about and to observe any restrictions of transfer of this Announcement. No public offer of securities of the Company is being made in the United Kingdom, the United States or elsewhere.

In particular, the Placing Shares referred to in this Announcement have not been and will not be registered under the Securities Act or any laws of or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, pledged or otherwise transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. The Placing Shares are being offered and sold only outside the United States in accordance with Regulation S.

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 or the South African Reserve Bank; and the Placing Shares 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 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 United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or the Announcement of which it forms part 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 Notices" section of this Announcement.

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

In this Appendix, unless the context otherwise requires, "Placee" means a Relevant Person (including individuals, funds or others) on whose behalf a commitment to subscribe for Placing Shares has been given.

Details of the Placing Agreement and the Placing Shares

Liberum has entered into the Placing Agreement with the Company under which Liberum has conditionally agreed on the terms and subject to the conditions set out therein, as agent for the Company, to use its reasonable endeavours to place the Placing Shares at the Placing Price with certain institutional investors. The Placing is not being underwritten by Liberum or any other person.

The number of Placing Shares at the Placing Price will be determined following completion of the Accelerated Book Build as set out in this Announcement.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of the Existing Ordinary Shares after the date of issue of the Placing Shares.

The Company has agreed that it will not, for 180 days following the date of this Announcement, issue or agree to issue new Ordinary Shares or grant any subscription, conversion rights or other equity securities save with the prior written consent of Liberum.

Application for admission to trading

Application will be made for admission of the Placing Shares to trading on AIM. It is expected that settlement of any such shares and Admission will become effective on or around 8.00 am on 5 July 2018 and that dealings in the Placing Shares will commence at that time.

Accelerated Book Build

The Bookrunner will today commence an Accelerated Book Building process in respect to the Placing to determine demand for participation in the Placing by any Placees at the Placing Price. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Accelerated Book Build. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

The Bookrunner and the Company shall be entitled to effect the Placing (in whole or in part) by such alternative method to the Accelerated Book Build as they may, in their sole discretion, determine.

Participation in, and principal terms of, the Placing

1. Liberum is acting as nominated adviser and Bookrunner to the Placing, as agent for and on behalf of the Company. Liberum is regulated by the FCA, 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 Liberum or for providing advice in relation to the matters described in this Announcement. 

2. The Bookrunner is arranging the Accelerated Book Build and Placing as an agent of the Company.

3. Participation in the Accelerated Book Build will only be available to persons who may lawfully be, and are, invited to participate by the Bookrunner. The Bookrunner and its affiliates are entitled to enter bids in the Accelerated Book Build as principal.

4. The Accelerated Book Build will establish the number of Placing Shares to be issued at the Placing Price, which will be agreed between the Bookrunner and the Company following completion of the Accelerated Book Build. The number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Accelerated Book Build.

5. To bid in the Accelerated Book Build, prospective Placees should communicate their bid by telephone to their usual sales contact at Liberum. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at the Placing Price. Bids may be scaled down by the Bookrunner on the basis referred to paragraph 9 below.

6. The Accelerated Book Build is expected to close no later than 10.00 am (London) today but may be closed earlier or later at the discretion of the Bookrunner. The Bookrunner may, in agreement with the Company, accept bids that are received after the Accelerated Book Build has closed.

7. Each Placee's allocation will be confirmed to Placees orally, or by email, by the Bookrunner whom they contact following the close of the Accelerated Book Build and a trade confirmation or contract note will be dispatched as soon as possible thereafter. The Bookrunner's oral or emailed confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of the Bookrunner and the Company, under which it agrees to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix (which are deemed to be incorporated in such trade confirmation or contract note) and in accordance with the Company's Articles of Association.

8. The Company will make a further announcement following the close of the Accelerated Book Build detailing the number of Placing Shares to be issued at the Placing Price.

9. Subject to paragraphs 5 and 6 above, the Bookrunner may choose to accept or reject bids, either in whole or in part, on the basis of allocations determined at its discretion (in consultation with the Company) and may scale down any bids for this purpose on such basis as they may determine. The Bookrunner may also, notwithstanding paragraphs 5 and 6 above, subject to the prior consent of the Company: (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time; and (ii) allocate Placing Shares after the Accelerated Book Build has closed to any person submitting a bid after that time.

10. A bid in the Accelerated Book Build will be made on the terms and subject to the conditions in this Announcement and will be legally binding on the Placee on behalf of which it is made and, except with the consent of the Bookrunner, will not be capable of variation or revocation after the time at which it is submitted. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the Bookrunner, to pay to the Bookrunner (or as the Bookrunner may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares for which such Placee has agreed to subscribe. Each Placee's obligations will be owed to the Bookrunner.

11. Except as required by law or regulation, no press release or other announcement will be made by the Bookrunner or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

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

13. All obligations under the Accelerated Book Build and Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Right to terminate under the Placing Agreement".

14. By participating in the Accelerated Book Build, 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.

15. To the fullest extent permissible by law and the applicable rules of the FCA, neither Liberum nor any of its affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise whether or not a recipient of these terms and conditions) in respect of the Placing. Each Placee acknowledges and agrees that the Company is responsible for the allotment of the Placing Shares to the Placees and the Bookrunner shall have no liability to the Placees for the failure of the Company to fulfil those obligations. In particular, neither Liberum nor any of its affiliates shall have any liability (including to the extent permissible by law, any fiduciary duties) in respect of the Bookrunner's conduct of the Accelerated Book Build or of such alternative method of effecting the Placing (in whole or in part) as the Bookrunner and the Company may agree.

Conditions of the Placing

Completion of the Placing is conditional on, inter alia:

(a) the Company having complied with its obligations under the Placing Agreement to the extent that such obligations fall to be performed prior to Admission;

(b) none of the warranties in the Placing Agreement being untrue, inaccurate or misleading;

(c) the Placing Agreement not having been terminated in accordance with its terms; and

(d) Admission becoming effective by no later than 8.00 a.m. on 5 July 2018 (or such later date as the Company and the Bookrunner may agree (being not later than 8.00 am on 12 July 2018).

If: (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by the Bookrunner by the respective time or date where specified (or such later time or date as the Company and the Bookrunner may agree, but not being later than 8.00 am on 12 July 2018); (ii) any of such conditions becomes incapable of being fulfilled; or (iii) the Placing Agreement is terminated in its entirety in the circumstances specified below, the Placing will lapse and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee against the Bookrunner in respect thereof.

The Bookrunner may, at its discretion and upon such terms as it thinks fit, waive, or extend the period for, compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement save that the above condition 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.

Neither Liberum nor the Company 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 Bookrunner.

Right to terminate under the Placing Agreement

The Bookrunner is entitled, at any time before Admission, to terminate its obligations under the Placing Agreement by giving notice to the Company in certain circumstances, including, inter alia:

(a) a breach of the warranties given by the Company in the Placing Agreement; or

(b) a material breach by the Company of any of its obligations under the Placing Agreement; or

(c) in the Bookrunner's opinion, there having been a material adverse change in the financial position, business or prospects of the Group; or

(d) the occurrence of a force majeure event which, in the opinion of the Bookrunner, makes it impractical or inadvisable to proceed with the Placing.

Following Admission, the Placing Agreement is not capable of termination to the extent that it relates to the Placing of the Placing Shares. The rights and obligations of the Placees shall terminate only in the circumstances described in these terms and conditions and will not be subject to termination by the Placee or any prospective Placee at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by the Bookrunner of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Bookrunner, and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise.

No Prospectus

The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require a prospectus in the United Kingdom or in any other jurisdiction. No offering document, admission document or prospectus has been or will be submitted to be approved by the FCA in relation to the Placing, and any Placees' commitments will be made solely on the basis of the information contained in the Announcement (including this Appendix) and the Exchange Information (as defined further below).

Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than the Exchange Information), representation, warranty, or statement made by or on behalf of the Company or Liberum or any other person and neither the Bookrunner nor the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received and, if given or made, such information, representation, warranty or statement must not be relied upon as having been authorised by any of the Bookrunner, the Company, or their respective officers, directors, employees or agents.

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. Neither the Company nor the Bookrunner is making any undertaking or warranty to any Placee regarding the legality of an investment in the Placing Shares by such Placee under any legal, investment or similar laws or regulations. No Placee should consider any information in this Announcement to be legal, tax or business advice. Each Placee should consult its own solicitor, tax adviser and financial adviser for independent legal, tax and financial advice regarding an investment in the Placing Shares. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and Settlement

Settlement of transactions in the Placing Shares (ISIN: GB00BWGCH354) following Admission will take place within the system administered by Euroclear UK & Ireland Limited (CREST) provided that, subject to certain exceptions, the Bookrunner reserves the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees by such other means that they deem necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

Following the close of the Accelerated Book Build, each Placee allocated Placing Shares in the Placing will be sent a trade confirmation or contract note in accordance with the standing arrangements in place with the Bookrunner, stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to the Bookrunner (in GBP) and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions that it has in place with the Bookrunner.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two (2) percentage points above LIBOR as determined by the Bookrunner.

Each Placee is deemed to agree that, if it does not comply with these obligations, the Bookrunner may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Bookrunner's account and benefit (as agent for the Company), 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 may be required to bear any stamp duty or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, each Placee confers on the Bookrunner all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which the Bookrunner lawfully takes in pursuance of such sale.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation or contract note is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax or securities transfer tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations, Warranties and Further Terms

By participating in the Placing each Placee (and any person acting on such Placee's behalf) makes the following representations, warranties, acknowledgements, agreements and undertakings (as the case may be) to the Company and the Bookrunner:

1. represents and warrants that it has read and understood this Announcement, including the Appendix, in its entirety and that its subscription for Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute or duplicate this Announcement;

2. acknowledges that no offering document, admission document or prospectus has been prepared in connection with the Placing and represents and warrants that it has not received and will not receive a prospectus, admission document or other offering document in connection therewith;

3. acknowledges that the Existing Ordinary Shares are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules and EU Regulation 596/2014 (collectively "Exchange Information");

4. acknowledges that none of Liberum, the Company, any of their respective affiliates or any person acting on behalf of any of them has provided, and will not provide it, with any material regarding the Placing Shares or the Company other than this Announcement; nor has it requested any of Liberum, the Company, any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;

5. acknowledges that the content of this Announcement is exclusively the responsibility of the Company, and that none of Liberum, their respective affiliates or any person acting on behalf of any of them has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously or concurrently published by or on behalf of the Company, 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 otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is contained in this Announcement and any Exchange Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by any of Liberum or the Company, or, if received, it has not relied upon any such information, representations, warranties or statements (including any management presentation that may have been received by any prospective Placee) and neither Liberum nor 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. Each Placee further acknowledges and agrees that it has relied solely on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing and it will not rely on any investigation that Liberum, its affiliates or any person acting on behalf of any of them has or may have conducted;

6. represents and warrants that it has neither received nor relied on any unpublished price sensitive information concerning the Company in accepting this invitation to participate in the Placing;

7. acknowledges that none of Liberum, its affiliates or any person acting on behalf of any of them has or shall have any liability for the Exchange Information, any publicly available or filed information or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

8. represents and warrants that it is acquiring the Placing Shares in an "offshore transaction" as defined in and pursuant Regulation S under the Securities Act;

9. acknowledges that it is acquiring the Placing Shares for its own account or for one or more accounts for which, in each case, it exercises sole investment discretion, for investment purposes and not with a view to any distribution or for resale in connection with, the distribution thereof in whole or in part, in the United States and that it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

10. acknowledges that the Placing Shares have not been and will not be registered under the Securities Act or with any state or other jurisdiction of the United States, nor approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority, and agrees not to reoffer, resell, pledge or otherwise transfer the Placing Shares except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;

11. unless otherwise specifically agreed in writing with Liberum, represents and warrants that neither it nor the beneficial owner of such Placing Shares will be a resident of the United States, Australia, Canada, Japan or the Republic of South Africa;

12. acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada, Japan or the Republic of South Africa and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions;

13. represents and warrants that the issue to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer Placing Shares into a clearance system;

14. represents and warrants that: (i) it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and (ii) it is not a person: (a) with whom transactions are prohibited under the Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury; (b) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or (c) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations (together, the Regulations); and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations 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 and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to the Bookrunner such evidence, if any, as to the identity or location or legal status of any person which the Bookrunner may request from it in connection with the Placing (for the purpose of complying with such Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by the Bookrunner on the basis that any failure by it to do so may result in the number of Placing Shares that are to be purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as the Bookrunner may decide at its sole discretion;

15. if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, represents and warrants that the Placing Shares purchased 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 European Economic Area which has implemented the Prospectus Directive other than Qualified Investors, or in circumstances in which the prior consent of the Bookrunner has been given to the offer or resale;

16. represents and warrants that it has not offered or sold and, prior to the expiry of a period of six (6) months from Admission, will not offer or sell any Placing Shares 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 (FSMA);

17. represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive;

18. represents and warrants that 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 the FSMA) relating to the Placing Shares in circumstances which do not require the approval of the communication by an authorised person under section 21(1) of the FSMA;

19. represents and warrants that it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

20. if in a Member State of the European Economic Area, unless otherwise specifically agreed with Liberum in writing, represents and warrants that it is a Qualified Investor within the meaning of the Prospectus Directive;

21. if in the United Kingdom, represents and warrants that it is a Qualified Investor and a person: (i) who is an investment professionals within the meaning of Article 19(5) of the Order; (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 be lawfully communicated;

22. represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities and taken any other necessary actions 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;

23. where it is acquiring Placing Shares for one or more managed accounts, represents and warrants that it is authorised in writing by each managed account: (a) to acquire the Placing Shares for each managed account; (b) to make on its behalf the representations, warranties, acknowledgements, undertakings and agreements in this Appendix and the Announcement of which it forms part; and (c) to receive on its behalf any investment letter relating to the Placing in the form provided to you by the Bookrunner;

24. undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it 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 Bookrunner may in its sole discretion determine and without liability to such Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear the liability for any stamp duty or stamp duty reserve tax or security transfer tax (together with any interest or penalties due pursuant to or referred to in these terms and conditions) which may arise upon the placing or sale of such Placee's Placing Shares on its behalf;

25. acknowledges that none of Liberum, its affiliates, or any person acting on behalf of any of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be treated for these purposes as a client of Liberum and that Liberum has no duties or responsibilities to it for providing the protections afforded to its 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 its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

26. undertakes that the person whom it specifies for registration as the holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. None of Liberum nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company, Liberum in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of Liberum who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

27. acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and Wales 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, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or Liberum 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;

28. acknowledges that time shall be of the essence as regards to obligations pursuant to this Appendix to the Announcement;

29. agrees it will be bound by the terms of the Company's Articles of Association;

30. agrees that the Company, Liberum, and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to the Bookrunner on their own behalf and on behalf of the Company and are irrevocable and are irrevocably authorised to produce this Announcement or a copy thereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby;

31. agrees to indemnify on an after-tax basis and hold the Company, Liberum and their respective affiliates 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 in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

32. acknowledges that no action has been or will be taken by any of the Company, Liberum or any person acting on behalf of the Company or Liberum 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;

33. acknowledges that it is an institution that has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and it, and any accounts for which it may be acting, are able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved; and

34. acknowledges that its commitment to subscribe for Placing Shares on the terms set out herein and in the trade confirmation or 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 Company's conduct of the Placing.

The representations, warranties, acknowledgments and undertakings contained in this Appendix are given to the Bookrunner for itself and on behalf of the Company and are irrevocable.

The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor Liberum will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and Liberum in the event that any of the Company and/or Liberum has incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify the Bookrunner accordingly.

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 outside the UK by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.

Each Placee, and any person acting on behalf of the Placee, acknowledges that the Bookrunner does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that Liberum or any of its affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with the Bookrunner, any money held in an account with the Bookrunner 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 rules and regulations of the FCA made under the FSMA. The 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 Bookrunner's money in accordance with the client money rules and will be used by the Bookrunner in the course of their own business and the Placee will rank only as a general creditor of the Bookrunner.

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

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

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

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

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

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