Gaming Realms Regulatory News (GMR)

THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION, DISTRIBUTION OR FORWARDING, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA AND SHOULD NOT BE DISTRIBUTED IN, FORWARDED TO OR TRANSMITTED IN OR INTO ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF LOCAL SECURITIES LAWS OR REGULATIONS OF SUCH JURISDICTION. PLEASE READ THE IMPORTANT INFORMATION AT THE END OF THIS SUMMARY.

12 November 2012

Pursuit Dynamics plc

Placing and Open Offer to raise up to £6.0million

Pursuit Dynamics plc (AIM: PDX, "PDX" or "the Company"), the developer of the PDX Atomiser and PDX Reactor products and technology, announces that it proposes to raise up to £6.0million (before expenses) to provide working capital for the implementation of its business plan.

Highlights:

·; Conditional placing of 166.7 million New Ordinary Shares at 3 pence per share to raise £5.0 million

·; Conditional open offer of 34.5 million New Ordinary Shares at 3 pence per share to raise up to £1.0 million

·; Net proceeds of the Fundraising are intended to finance the continuing commercialisation of PDX's technology portfolio

·; Appointment of Hagen Gehringer, previously COO, as Chief Executive Officer, succeeding Interim CEO Jeremy Pelczer who steps down with the appointment of a permanent CEO

·; Proposed appointment of Paul Banner and Philip Corbishley as Non-executive Directors, bringing significant experience of value creation in technology businesses, and Bernie Bulkin as Chairman

Bernie Bulkin, Non-executive Director and proposed Chairman, said: "The proposed fundraising and management changes we have announced today will provide PDX with the additional funding and expertise needed to take forward our more focussed business plan into this next stage. I look forward to working with Hagen Gehringer in his new role as Chief Executive Officer and to welcoming Paul Banner and Philip Corbishley to the Board following the fundraising. I would like to offer my thanks to Jeremy Pelczer, who steps down from the Board after his tenure as Interim CEO as anticipated, and to Andy Quinn and Brian Sweeney, who expect to leave the Board on completion of the fundraising.

Enquiries:

Pursuit Dynamics plc 01480 422 050

Hagen Gehringer

Bernie Bulkin

Cenkos Securities plc, Nominated Adviser and Broker 020 7397 8900

Ian Soanes

Max Hartley

M: Communications 020 7920 2339

Nick Miles

Elly Williamson

IMPORTANT INFORMATION

This announcement has been issued by and is the sole responsibility of Pursuit Dynamics plc. This announcement is for information purposes only and does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security in the capital of the Company in any jurisdiction in which such offer or invitation is unlawful.

This announcement does not constitute an offer for sale of securities of the Company in the United States, Australia, Canada, Japan or the Republic of South Africa. The New Ordinary Shares have not been and will not be registered under the U.S. Securities Act or under the securities legislation of any state or territory or jurisdiction of the United States, and may not be offered, or sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, in the United States except pursuant to an exemption from registration under the U.S. Securities Act and in compliance with state securities laws.

This announcement does not constitute a prospectus. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No relevance may or should be placed by any person whatsoever on the information contained in this announcement or its accuracy or completeness. The information in this announcement is subject to change. Nothing in this announcement should be interpreted as a term or condition of the Placing or the Open Offer.

This announcement and any materials distributed in connection with this announcement may include forward-looking statements. These statements include forward-looking statements both with respect to the Group and the markets in which the Group operates. Statements which include the words ''expects'', ''intends'', ''plans'', ''believes'', ''projects'', ''anticipates'', ''will'', ''targets'', ''aims'', ''may'', ''would'', ''could'', ''continue'' and similar statements of a future or forward-looking nature identify forward-looking statements. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a number of variables which could cause actual results or trends to differ materially, including, but not limited to any limitations of the Company's internal financial reporting controls; an increase in competition; an unexpected decline in turnover, legislative, fiscal and regulatory developments, including but not limited to, changes in environmental, safety and healthcare regulations; currency and interest rate fluctuations and the adoption of International Financial Reporting Standards. Each forward-looking statement speaks only as of the date of this announcement. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Group's actual results of operation, financial condition, prospects, growth, synergies, strategies and dividend policy and the development of the industries in which they operate may differ materially from the impression created by the forward-looking statements contained in this announcement. In addition, even if the results of operations, financial condition, prospects, growth, synergies, strategies and the dividend policy of the Group, and the development of the industries in which it operates, are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Any forward-looking statement contained in this announcement based on past or current trends and/or activities of the Group should not be taken as a representation that such trends or activities will continue in the future. No statement in this announcement is intended to be a profit forecast or to imply that the earnings of the Group for the current year or future years will necessarily match or exceed the historical or published earnings of the Group. The Company does not undertake any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Prospective investors should not treat the contents of this announcement as advice relating to legal, taxation, investment or any other matters. Prospective investors should inform themselves as to: (a) the legal requirements within their own countries for the purchase, holding, transfer or other disposal of Ordinary Shares; (b) any foreign exchange restrictions applicable to the purchase, holding, transfer or other disposal of Ordinary Shares; and (c) the income and other tax consequences which may apply in their own countries as a result of the purchase, holding, transfer or other disposal of Ordinary Shares. Prospective investors must rely upon their own legal advisers, accountants and other financial advisers as to legal, tax, investment or any other related matters concerning the Company and any investment therein. No person has been authorised to give any information or make any representations other than the information contained in this announcement and, if given or made, such information or representations must not be relied upon as having been authorised by the Company or Cenkos Securities.

Cenkos Securities, which is authorised and regulated in the UK by the Financial Services Authority, is acting exclusively for the Company as Nominated Adviser and broker 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 or for providing advice in relation to the matters described in this announcement.

Subject to the responsibilities and liabilities, if any, which may be imposed on Cenkos Securities by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, no representation or warranty, express or implied, is made by Cenkos Securities as to any of the contents of this announcement and no liability whatsoever is accepted by Cenkos Securities for the accuracy of any information or opinions contained in this announcement or for the omission of any material information, for which the Board and the Company are solely responsible.

Neither the content of PDX's website nor any website accessible by hyperlink on PDX's website is incorporated in, or forms part of, this announcement.

Pursuit Dynamics plc

Placing and Open Offer to raise up to £6.0 million

Pursuit Dynamics plc (AIM: PDX, "PDX" or "the Company"), the developer of the PDX Atomiser and PDX Reactor products and technology, announces that it proposes to raise up to £6.0 million (before expenses) at 3 pence per share to provide working capital for the implementation of its business plan.

A circular providing details of the Fundraising, including a timetable of principal events, will be sent to Shareholdersshortly.

Background to and reasons for the Proposals

The past year has been an extremely disappointing period in which PDX failed to make the breakthrough in commercialising its technology that the Board had expected. A number of key initiatives, in particular the discussions with Procter & Gamble, failed to come to fruition in the way the Board had anticipated. The absence of material revenues led the Board to adopt a more conservative strategy and focus on two lines of business: Public Health & Safety and Brewing, Food & Beverage. The Company is committed to incurring no further expenditure on its Biofuels business in the United States and is winding up its Swiss subsidiaries. This more focussed approach will result in a reduced headcount and lower operating costs across the business.

PDX has continued to build its pipeline and now has quotations outstanding with a substantial sales value but quotations have been slow to develop into confirmed orders and sales, putting pressure on the Company's finances. The Company's cash balance as at 31 October 2012 was £2.2 million but in view of the Company's financial commitments the Board believes that further funding is required in order for the Company to continue to trade. Since the announcement of a strategic review in May, the Board has been considering a range of strategic and financing options and has held discussions with some of the Company's institutional and private shareholders. The Board received offers of finance from certain of those shareholders and has now concluded that it is in the Company's best interests to pursue a fundraising to enable the Company to execute its focussed business plan. In conjunction with those discussions the Company was introduced to Philip Corbishley and Paul Banner who, as detailed below, have agreed to join the Board on completion of the Fundraising.

The Fundraising

The Company is proposing to raise up to £6.0 million before expenses (approximately £5.8 million after expenses) by the issue of up to approximately 201 million New Ordinary Shares, of which £5.0 million is expected to be raised from the Placing and up to £1.0 million expected to be raised from the Open Offer.

The Fundraising is conditional on, inter alia, a total of £4.5 million being raised and agreement being reached to reduce premises costs. The Fundraising is not underwritten. There can be no certainty that the Fundraising will be successful and if the Fundraising does not proceed it is unlikely that the Company will be able to access further funding.

The Placing

The Company has received commitments from new and existing investors to subscribe for all of the Placing Shares at the Placing Price of 3 pence per share to raise £5.0 million. The Placing Price represents a discount of 29.4 per cent. to the closing middle-market price of 4.25 pence per Ordinary Share on 30 October 2012 (being the latest date before the Company's announcement of the headline terms of the proposed Fundraising) and a discount of 22.1 per cent. to the closing middle-market price of 3.85 per Ordinary Share on 12 November 2012 (being the last practicable date before the publication of this announcement).

The Placing is conditional on, amongst other things: (i) Shareholders passing the Resolutions to be proposed to Shareholders at the General Meeting; (ii) the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms prior to Admission; (iii) the Lease Variation being formally agreed; and (iv) Admission having become effective by no later than 8.00 a.m. on 4 December 2012 (or such later date as the Company and Cenkos Securities may agree, not being later than 18 December 2012).

Pursuant to the Placing Agreement, Cenkos Securities has conditionally agreed to use its reasonable endeavours, as agent for the Company, to place the Placing Shares at the Placing Price. The Placing Agreement contains certain warranties (subject to limitations which are normal for an agreement of this type) given by the Company in favour of Cenkos Securities as to certain matters relating to the Company and its business. In addition, the Company has given certain undertakings to Cenkos Securities and has agreed to indemnify Cenkos Securities in relation to certain liabilities Cenkos Securities may incur in respect of the Placing. Cenkos Securities has the right to terminate the Placing Agreement in certain circumstances prior to Admission including: (i) for certain force majeure events or other events involving certain material adverse changes or prospective material adverse changes relating to the Group; or (ii) in the event of a breach of the warranties or other obligations of the Company set out in the Placing Agreement.

The Open Offer

Atotal of 34.5 million New Ordinary Shares are available to Qualifying Shareholders pursuant to the Open Offer at the Offer Price, payable in full on acceptance. Any Offer Shares not subscribed for by Qualifying Shareholders will be available to Qualifying Shareholders under the Excess Application Facility.

Qualifying Shareholders mayapply for Offer Shares under the Open Offer at the Offer Price on the following basis:

2 Offer Shares for every 5 Existing Ordinary Shares

and so in proportion for any number of Existing Ordinary Shares held on the Record Date. Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Offer Shares. Fractional entitlements which would otherwise arise will not be issued to the Qualifying Shareholders but will be made available under the Excess Application Facility. The Excess Application Facility enablesQualifying Shareholders to apply for shares in excess of their Open Offer Entitlement. Not all Shareholders will be Qualifying Shareholders. Shareholders who are located in, or are citizens of, or have a registered office in certain overseas jurisdictions will not qualify to participate in the Open Offer.

Valid applications by Qualifying Shareholders will be satisfied in full up to their Open Offer Entitlements as shown on the Application Form for certificated Shareholders. Applicants canapply for less or more than their entitlements under the Open Offer but the Company cannot guarantee that any application for additional Offer Shares under the Excess Application Facility will be satisfied as this will depend in part on the extent to which other Qualifying Shareholders apply for less than or more than their own Open Offer Entitlements. The Company may satisfy valid applications for excess shares of applicants in whole or in part but reserves the right not to satisfy any excess above any Open Offer Entitlement. The Board may scale back applications made in excess of Open Offer Entitlements on such basis as it reasonably considers to be appropriate.

Application will be made for the Open Offer Entitlements to be admitted to CREST. Applications through the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of bona fide market claims. The Offer Shares must be paid in full on application. The Open Offer will not be made to certain Overseas Shareholders.

Qualifying Shareholders should note that the Open Offer is not a rights issue and therefore the Offer Shares that are not applied for by Qualifying Shareholders will not be sold in the market for the benefit of the Qualifying Shareholders who do not apply under the Open Offer. The Application Form is not a document of title and cannot be traded or otherwise transferred.

Further details of the Open Offer and the terms and conditions on which it is being made, including the procedure for application and payment, will be contained the Circular and on the Application Form accompanying the Circular.

The Open Offer isconditional on, amongst other things: (i) the Placing becoming or being declared unconditional in all respects and not being terminated before Admission; (ii) the passing of all of the Resolutions at the General Meeting; (iii) the Placing Agreement having become unconditional and not having been terminated in accordance with its terms prior to Admission; (iv) the Lease Variation being formally agreed; and (v) Admission becoming effective by no later than 8.00 a.m. on 4 December 2012 or such later time and/or date (being no later than 8.00 a.m. on 18 December 2012) as Cenkos Securities and the Company may agree.

Accordingly, if these conditions are not satisfied or waived (where capable of waiver), the Open Offer will not proceed and the Offer Shares will not be issued and all monies received will be returned to the applicants (at the applicants' risk and without interest) as soon as possible thereafter. Any Open Offer Entitlements admitted to CREST will thereafter be disabled.

Admission

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will become effective and dealings will commence at 8.00 a.m. on 4 December 2012. The New Ordinary Shares will be issued free of all liens, charges and encumbrances and will, upon Admission, rank pari passu in all respects with the Existing Ordinary Shares including as regards the right to receive all dividends or other distributions declared, made or paid after Admission.

Share Capital

The Company's issued share capital before and after the Fundraising (assuming the Placing and Open Offer respectively are fully subscribed) is set out in the table below:

Board and Management

A number of Board and senior management changes will take place alongside the proposed fundraising. Hagen Gehringer, who is currently the Company's Chief Operating Officer, has been appointed as Chief Executive Officer and will join the Board upon completion of the Fundraising. With a blend of industrial fluid engineering experience as Managing Director of Karcher Futuretech GmbH prior to joining PDX in 2011, and experience of leading the Company's product development as COO, Hagen is ideally placed to take the Company forward. Jeremy Pelczer's tenure as interim Chief Executive has come to an end and he leaves the Board with the Company's sincere thanks for his contribution to PDX, initially as a non-executive Director and then as interim Chief Executive, guiding the Company through a period of significant restructuring in very difficult circumstances. During Jeremy's tenure headcount reduced from 85 in November 2011 moving to 32 upon conclusion of recent redundancy actions and fixed costs reduced from £1.2m in November 2011 to under £400,000 per month, on average, for 2012/13 with actions taken ahead of the new financial year which has just commenced.

Paul Banner and Philip Corbishley have both agreed to join the Board on completion of the Fundraising. Paul has spent the past 20 years working in private equity, principally in the technology sector. He is currently Chairman of Bluebell Telecom Group Limited and Tissuemed Limited. Philip has a life time of experience in high technology start up and turnaround situations, his recent achievements were the co-founding of Gamma and Epsilon Telecom from the assets of Atlantic Telecom and Carrier 1. He has had many executive appointments across a spectrum of small and medium sized enterprises. In addition to their roles as non-executive directors, it is anticipated that Messrs Corbishley and Banner will work closely with the CEO in the next six months to further restructure the cost base of the Company, and to assist in accelerating the sales and marketing process.  It is the Board's intention to appoint one other independent non-executive director in due course.

As previously announced, Andy Quinn has decided to step down from the Board and will now do so upon completion of the Fundraising whereupon Bernie Bulkin will take over from him as Chairman. Brian Sweeney will also step down from the Board upon completion of the Fundraising. The Board is grateful to them for their dedicated service to the Company. Alistair Miller has now formally assumed the role of Director of Finance, succeeding Richard Webster.

Current trading and outlook

The significant challenge facing the Company is to achieve sustainable revenues and the Board believes that there are some signs of improved momentum in the business. The current pipeline of quotations has a value in excess of £12 million, split as to £8 million for the Brewing, Food and Beverage lines of business and £4 million for the Public Health and Safety lines of business.. There is, however, no certainty that any of these quotations and opportunities will result in orders. The Group has recently made further progress towards reducing its corporate and infrastructure-related overheads including the proposed Lease Variation which, it is anticipated, will result in the restructuring of the lease of the Company's Huntingdon premises with the effect that the business will locate to more appropriate, lower cost premises in twelve months' time. The Company estimates that revenues for the financial year ended 30 September 2012 will be approximately £700,000. It is anticipated that further updates will be given at the time of the Company's full year results. 

Intentions of Directors

Andrew Quinn intends to apply to subscribe for 310,000 Placing Shares and all of the Directors intend to vote in favour of the Resolutions at the General Meeting.

Related party transaction

M&G Investment Management ("M&G") which owns Existing Ordinary Shares representing approximately 20.9 per cent. of the existing issued share capital of the Company, has a placing commitment of approximately 17.8 million Placing Shares. This commitment constitutes a related party transaction under the AIM Rules. The Directors of the Company consider, having consulted with Cenkos Securities, that the terms of the transactions with M&G are fair and reasonable insofar as the Company's shareholders are concerned.

Shareholder Circular

A circular will be posted to Shareholders shortly. The Circular will provide further details of the Fundraising including a timetable of principal events and will incorporate a notice convening the General Meeting at which the Resolutions will be proposed. The Board considers that the Fundraising is in the best interests of the Company and the Shareholders as a whole and intends to recommend that Shareholders vote in favour of the Resolutions. The Company will also make copies of the Circular (including the notice of general meeting) available on its website at www.pdx.biz.

Expected timetable of events

Definitions

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