Imperial Innovations Group Regulatory News (IVO)

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4 February 2016

Imperial Innovations Group plc

Placing to raise £100 million

Imperial Innovations Group plc (AIM: IVO, "Innovations", the "Company", the "Group") announces that it is proposing to conditionally raise £100 million (before expenses) by way of a placing with clawback at 425p per new Ordinary Share (the "Placing").

Innovations believes that there are significant opportunities available to the Group to invest in existing and new portfolio companies across its target investment areas, and to seek to further accelerate its growth and to enhance returns to shareholders.

Highlights

· The Placing Price of 425p represents a premium of approximately 8.0% to the mid-market closing priceof the Group's Ordinary Shares on 3 February 2016

· Of the 23,529,412 new Ordinary Shares (the "Placing Shares") proposed to be issued under thePlacing, 1,176,471 Placing Shares are being made available today, via a clawback arrangement, toexisting and new institutional investors

· The net proceeds of the Placing are intended to be used:

o to deploy significant amounts of capital into portfolio companies ("Portfolio Companies") well known to the Group to build upon recent successes and recreate opportunities to generate significant returns;

o to continue the Group's support of its portfolio companies by maintaining or increasing its stake in these companies through their future funding requirements;

o to further its research commercialisation and investment activities in new and existing technologies using its extensive network of academics, entrepreneurs, management teams and co-investors;

o to deploy funds in investment opportunities arising from Group's involvement in the UCL Technology Fund LP;

o to invest in expanding its licensing portfolio with the intention of further growing its licence and royalty income; and

o for general corporate purposes.

The Placing is being conducted by Cenkos Securities and J.P. Morgan Cazenove.

It is expected that Placing Shares representing £90 million of the gross proceeds will be admitted to trading on the AIM market operated by the London Stock Exchange ("AIM") and that dealing in those Placing Shares will commence at 8.00 a.m. on 23 February 2016 ("Admission"). The issuance of the remaining Placing Shares, representing £10 million of the gross proceeds, is conditional on regulatory approval, and is expected, subject to receipt of such approval, to take place on or before 31 May 2016.

Martin Knight, Chairman of Innovations, said:

"To have raised these sort of sums at a 8.0% premium to the market, is a tremendous endorsement of our strategy and team.

"This new funding will allow us to capitalise fully on the potential of our maturing portfolio by scaling up our investment in our most promising portfolio companies without dilution, whilst selectively adding new companies to build our pipeline for long-term value creation.

"In the first five months of this financial year we have invested £21.2 million in the portfolio and added five new companies to our investment portfolio, compared to six in the whole of the previous year.

"In recent weeks, we have stepped up our investment rate, committing a further £49.4m in aggregate to the substantial new funding rounds for Inivata and MISSION Therapeutics and the new UCL Technology and Apollo Therapeutics funds."

Enquiries

Imperial Innovations - www.imperialinnovations.co.uk 

Background to the Placing

The Placing is conditional on, amongst other things, the passing of resolutions by shareholders at a general meeting to be held on 22 February 2016 (the "General Meeting") to authorise the directors to allot shares and disapply pre-emption rights (the "Resolutions"). If the Resolutions are passed, the Placing Shares (other than Placing Shares representing in aggregate £10 million of the gross proceeds of the Placing which have been conditionally placed with Woodford Investment Management LLP ("Woodford"), the issuance of which is subject to regulatory approval as described below (the "Deferred Placing Shares")) will be allotted after the General Meeting. Admission of the Placing Shares (other than the Deferred Placing Shares) is expected to occur no later than 8.00 a.m. on 23 February 2016 or such later time and/or date as Cenkos Securities, J.P. Morgan Cazenove and the Company may agree, being no later than 8.00 a.m. on 8 March 2016. Admission of the Deferred Placing Shares is subject to receipt of regulatory approval and is expected to take place on or before 31 May 2016. The Placing is not being underwritten.

A circular providing further details of the Placing (the "Circular") has been published today and will be posted to shareholders, together with a Notice of General Meeting. The General Meeting will be at 12.00 p.m. on 22 February 2016 at 52 Princes Gate, Exhibition Road, London SW7 2PG. A copy of the Circular will shortly be available on the Company's website at www.imperialinnovations.co.uk and for inspection at the Company's registered office at 52 Princes Gate, Exhibition Road, London SW7 2PG.

The Company has received irrevocable undertakings from Imperial College London, Invesco Asset Management Limited acting as agent for and on behalf of its discretionary managed clients ("Invesco"), Lansdowne Partners (UK) LLP and Woodford to vote in favour of each of the Resolutions. These undertakings are in respect of an aggregate of 123,653,784 Ordinary Shares amounting to 89.8% of the issued share capital of the Company. 

A placing memorandum (the "Placing Memorandum") providing further details on the Group and certain risk factors relevant to investing in the Company has been published in connection with the Placing on the Company's website at http://www.imperialinnovations.co.uk/. The Placing Memorandum is only directed at persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive and being either (i) persons outside the United Kingdom and (ii) persons falling within Article 19(5) ("investment professionals") of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") who have professional experience in matters relating to investments, and/or (iii) high net worth companies, unincorporated associations and other bodies and persons to whom it may otherwise lawfully be communicated in accordance with Article 49(2) of the Order.

Details of the Placing

The Placing is being conducted by Cenkos Securities plc ("Cenkos Securities") and J.P. Morgan Securities plc ("J.P. Morgan Cazenove", and together with Cenkos, the "Joint Bookrunners") each of which is acting as joint bookrunner in relation to the Placing.

The Placing Shares have been conditionally placed with existing and new investors, including 5,882,353 Placing Shares with Invesco, 1,606,524 Placing Shares with Lansdowne Developed Markets Master Fund Limited ("Lansdowne"), 13,094,635 Placing Shares with Woodford and 2,945,900 Placing Shares with other institutional investors subject, in the case of Woodford's entitlement to Deferred Placing Shares, to receipt of regulatory approval as described below and, in the case of Invesco, to a clawback arrangement pursuant to which up to 1,176,471 Placing Shares which Invesco has conditionally agreed to acquire will be offered by the Joint Bookrunners and available to satisfy demand from existing and new institutional investors ("Clawback Placees") procured through an accelerated bookbuild process to take place on 4 February 2016 (the "Clawback Placing").

The book for the Clawback Placing will open with immediate effect. The book is expected to close no later than 4.30 p.m. today, but may be closed earlier or later at the sole discretion of the Company and the Joint Bookrunners. The results of the Placing will be announced as soon as practicable thereafter. The allocations will be determined by the Company in consultation with, and following recommendation from, the Joint Bookrunners at the close of the bookbuild process. Clawback Placees will be advised of their respective allocations as soon as practicable following allocation.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with each other and the existing Ordinary Shares of the Company.

Of the 13,094,635 Placing Shares proposed to be issued to Woodford, 10,741,694 Placing Shares will be issued to Woodford at Admission and the issuance of 2,352,941 Placing Shares, representing £10 million of gross proceeds (the "Deferred Placing Shares"), will be conditional on receipt by Woodford of FCA approval under section 185 of the Financial Services and Markets Act 2000 for Woodford to acquire a holding of 20% or more of the shares in the Company as the parent undertaking of the Group's FCA-regulated subsidiary Imperial Innovations Investment Management Limited. In the event that such approval is not given, or is subject to conditions which are not reasonably acceptable to Woodford, Woodford will have the right, but not the obligation, to acquire such number of the Deferred Placing Shares as will result in it holding not more than 19.9% of the shares in the Company.

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission of the Placing Shares (other than the Deferred Placing Shares) will become effective at 8.00 a.m. on 23 February 2016. Admission of the Deferred Placing Shares is expected, subject to receipt of regulatory approval, to take place on or before 31 May 2016.

The Company has given undertakings that, subject to certain exceptions, it will not issue or sell any Ordinary Shares in the Company for a period of 180 days from the date of Admission, without prior consent of Cenkos Securities and J.P. Morgan Cazenove.

The arrangements for the placing of Placing Shares with Invesco, Lansdowne and Woodford, each of whom hold over 10% of the issued share capital of Innovations, are related party transactions for the purposes of the AIM Rules for Companies. Innovations' directors consider, having consulted with the Company's nominated adviser, J.P. Morgan Cazenove, that the terms of these related party transactions are fair and reasonable insofar as the Company's shareholders are concerned.

The Placing is subject to certain customary conditions which are set out in a placing agreement between Cenkos Securities, J.P. Morgan Cazenove and the Company dated 4 February 2016 (the "Placing Agreement").

The Appendix to this announcement (which forms part of this announcement) sets out the terms and conditions of the Clawback Placing. By choosing to participate in the Clawback Placing, Clawback Placees will be deemed to have read and understood this announcement in its entirety (including the Appendix) and the Placing Memorandum (and particularly Part V of the Placing Memorandum which sets out certain risk factors relevant to investing in the Company), and to be making an offer on the terms and conditions set out in the Appendix and providing the representations, warranties, acknowledgements and undertakings contained in the Appendix.

The expected timetable of principal events in connection with the Placing is as follows:

ADDITIONAL INFORMATION:

Introduction

The Company announces that it is proposing to raise £100 million (before expenses) by way of a conditional placing with clawback of 23,529,412 new Ordinary Shares at 425p each (the "Placing Price").

The Placing has been jointly arranged by Cenkos Securities and J.P. Morgan Cazenove and the Placing Shares have been conditionally placed with existing and new institutional investors. The Placing Price represents a premium of approximately 8.0per cent. to the mid-market closing price of the Company's Ordinary Shares on 3 February 2016, being the latest practicable date prior to the date of this announcement.

The Directors believe that there are significant opportunities available to the Group to invest in existing and new Portfolio Companies across its target investment areas, and to seek to further accelerate the growth of the Group and to enhance returns to shareholders.

Currently, the Company does not have sufficient authority in place to allot Ordinary Shares on a non-pre-emptive basis for the purposes of the Placing. Accordingly, it is proposed that the Resolutions will be proposed at the General Meeting in order that the Placing can proceed:

• to authorise the Directors to allot and issue up to 23,529,429 new Ordinary Shares; and

• to disapply pre-emption rights in connection with the proposed allotment and issue of Ordinary Shares pursuant to that authority.

If approved, the authorisations to allot and issue up to 23,529,429 Ordinary Shares and disapply pre-emption rights in relation to such allotment will expire on 31 August 2016.

The number of new Ordinary Shares contemplated by the Resolutions is fractionally higher than the number of Placing Shares as a result of rounding so that the Resolutions refer to shares in the maximum aggregate nominal amount to the nearest pound.

The Placing is conditional on, amongst other things, the passing of the Resolutions by shareholders at the General Meeting, notice of which is set out at the end of the Circular. If the Resolutions are passed, the Placing Shares (other than the Deferred Placing Shares, unless the requisite FCA approval has been obtained by Woodford at such time) will be allotted after the General Meeting. Admission (other than in respect of the Deferred Placing Shares) is expected to occur no later than 8.00 a.m. on 23 February 2016 or such later time and/or date as Cenkos Securities, J.P. Morgan Cazenove and the Company may agree. Admission of the Deferred Placing Shares is expected, subject to receipt of the FCA approval referred to above, to take place on or before 31 May 2016. The Placing is not being underwritten.

Background to the Group

Innovations is a technology commercialisation company combining the activities of technology transfer, intellectual property licensing and protection, company incubation, and investment. The aim of the Company's business model is to build and to develop substantial, high-quality, well-funded and well-managed businesses by maintaining strategic involvement throughout the development cycle, and deliver successful commercialisation and realisation of value by leveraging the Group's expertise and capital.

Innovations is involved in the commercialisation of promising opportunities from a broad range of technology sectors, but has built particular expertise in therapeutics, medtech & diagnostics, engineering & materials, and information communications technology.

The Group has proprietary access to unencumbered intellectual property generated at Imperial College London. This provides a pipeline of intellectual property rights over which the Group retains strategic control, allowing it to drive value for its shareholders through the commercialisation of this pipeline. The Group achieves this through:

• utilising the Group's technology transfer team, who possess in-depth expertise in translating an idea into practice and are responsible for assessing, beginning and managing the commercialisation process;

• protecting intellectual property and licensing it to third parties for commercialisation;

• undertaking proof-of-concept and incubation activities;

• leading the formation of new companies to commercialise the intellectual property and be the corporate vehicle through which the business is developed and conducted;

• recruiting high-calibre executive management and board members for its portfolio companies;

• providing day-to-day operational expertise and providing corporate finance advice and strategic guidance; and

• providing investment and facilitating co-investment to accelerate development.

Originally formed as the technology transfer office for Imperial College London - a role it still carries out today - the Group also invests in opportunities typically arising from intellectual property derived from, or associated with, the University of Cambridge, the University of Oxford and University College London, in addition to those arising from Imperial College London. These are four of the world's top 10 universities (source: QS World University Rankings 2015/16) with a combined research income of over £2.0 billion per annum.

In January 2016, the Group announced two new initiatives aimed at expanding its licensing portfolio and broadening its visibility of and access to intellectual property from the elite universities within an area broadly bounded by London, Oxford and Cambridge sometimes referred to as the "golden triangle" (the "Golden Triangle"). Further details are provided in the section entitled "Current trading and prospects" below.

The Group provides continuity of funding from start-up to scale-up, with initial investments at the seed and Series A stages. The Group remains an active investor over the life of its Portfolio Companies, with the majority of the Group's investment going into businesses in which it is already a shareholder. The Group often invests at an earlier stage in a Portfolio Company's development and it is not constrained by the five to seven year investment horizon typically seen in the investment strategies of many closed-end, fixed-term funds. Whereas a traditional venture capital investor may seek typically to make a return over this pre-determined investment horizon, the Group's business model is focused on seeking to build substantial, high quality, well-funded and well-managed businesses in which it retains a meaningful stake.

As at 31 December 2015, the Group had equity holdings in 103 Portfolio Companies. As at 31 December 2015, approximately 98.9% of the portfolio by value was represented by 44 "accelerated growth" companies. The Group typically classifies companies that the Directors believe have the potential to generate significant value, with differentiated and protectable intellectual property, as "accelerated growth" companies. The Group takes an active management role in these companies and is typically involved in the key stages of development, including providing seed and development funding, providing guidance on focus and strategy as well as supporting the management team in building the business. As at 31 December 2015, an employee or consultant of the Company sat on the board at 42 of the 44 "accelerated growth" companies, representing 96.5% of the portfolio by value.

As at the same date, the Group had holdings in what the Directors classify as 31 "lighter touch" companies, representing approximately 1.1% of the portfolio by value. The Group typically classifies companies that have been funded from operating revenues and/or grant funding and which have developed incremental improvements in technology with relatively small or uncertain targets markets as "lighter touch" companies. The Group typically holds founding equity in these businesses as a result of transferring intellectual property to the business and/or supporting the founding academic and management team with business planning and setting up of the company. Instead of investing, the Group provides strategic support to such companies to promote organic growth and revenue generation. On occasion, some of these "lighter-touch" businesses may grow to a point where they would benefit from additional funding, and, on a selective basis, some of them may be promoted to the "accelerated growth" portfolio.

Also as at 31 December 2015, the Group had holdings in what the Directors classify as 28 "low involvement" companies. The Group typically classifies companies that hold technology which needs to undergo development and industrial productionisation prior to commercialisation as "low involvement" companies. The Group does not tend to make further investments in companies that are classified as "low involvement" companies.

The Group also owns and manages a portfolio of intellectual property rights and licences, which generate revenue for the Group.

In addition, Innovations also provides corporate finance and consulting services, and manages an incubation space providing office and laboratory facilities (the "Imperial Incubator") on behalf of Imperial College London that is the initial home for many of its Portfolio Companies.

In the financial year ended 31 July 2015, the Group invested £60.8 million in 30 Portfolio Companies. The Group made investments in six new Portfolio Companies: one associated with, or whose intellectual property was derived from, Imperial College London; two associated with, or whose intellectual property was derived from, the University of Cambridge; and three associated with, or whose intellectual property was derived from, other universities.

The Group has an experienced board comprising the Chairman, the Chief Executive Officer, the Chief Investment Officer, the Managing Director - Technology Transfer and four additional non-executive directors, who between them have considerable commercial, investment and financial experience with a particular focus on investment in high potential/growth technology companies.

The Group also has an experienced and motivated management team with strengths across all stages of technology transfer, intellectual property licensing and protection, company incubation, and investment into early-stage, science-based ventures.

During the year ended 31 July 2015, the Group employed an average of 63 staff (including the Executive Directors). The Group operates from premises near the main Imperial College London campus in South Kensington, London as well as from offices on the Babraham Research Campus in Cambridge.

The Placing Memorandum providing further details on the Group has been published in connection with the Placing on the Company's website at http://www.imperialinnovations.co.uk/. The Placing Memorandum is only directed at persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive and being either (i) persons outside the United Kingdom and (ii) persons falling within Article 19(5) ("investment professionals") of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") who have professional experience in matters relating to investments, and/or (iii) high net worth companies, unincorporated associations and other bodies and persons to whom it may otherwise lawfully be communicated in accordance with Article 49(2) of the Order.

As has been previously stated, the Directors will keep under review the possibility of transferring the admission of the Ordinary Shares from AIM to the premium segment of the Official List and to trading on the Main Market, taking into account the requirement to maintain at least 25% of the Company's issued share capital in public hands.

Current trading and prospects

On 14 October 2015 the Group issued its final results for the year ended 31 July 2015. Details of developments since 31 July 2015 are set out below.

Strategic developments

In January 2016, the Group announced two new initiatives aimed at expanding its licence portfolio and broadening its visibility of and access to intellectual property from the elite universities within the Golden Triangle.

On 18 January 2016, Innovations announced that it had committed £24.75 million to the new UCL Technology Fund LP (the "Partnership"). This is the first investment fund that University College London has created to commercialise its multidisciplinary research. Over the next five years the Partnership is expected to invest £50 million to support ideas from academics in life sciences and physical sciences, and will be used for early-stage proof of concept funding, licensing opportunities and the formation of new spin-out companies.

As a limited partner, Innovations has committed £24.75 million to the Partnership, matched by a commitment in the same amount from the European Investment Fund. Participation in this Partnership provides Innovations with visibility of potential intellectual property from across University College London's research base. In addition, the Partnership's general partner has obligations to use all reasonable endeavours respectively to offer co-investment opportunities to the limited partners, to alert them to any projects that the Partnership chooses not to invest in, and to negotiate the right for limited partners to take up any of the Partnership's pre-emption rights that the Partnership does not take up. As a result, in addition to its £24.75 million commitment to the Partnership, the expectation is that the Group will also have opportunities to make direct investments into selected UCL Business PLC ("UCLB") spin-outs to support their long-term growth and value creation.

It is expected that participation in the Partnership will thus significantly increase Innovations' access to deal-flow from one of the world's leading universities, as well as providing new opportunities to apply the Group's skills and deploy its investment capital. It also confirms Innovations' position as a partner of choice for both University College London and the European Investment Fund and enhances the Group's position in the Golden Triangle, particularly in London.

As well as enhancing the opportunities from University College London, participation in the Partnership signals a step-change in the Group's approach to commercialising the outstanding research output from the UK's elite universities. This is a new, collaborative model that the Directors believe could be replicated by Innovations with other universities.

On 25 January 2016, Innovations announced that it had committed £3.3m to the new £40 million joint venture between AstraZeneca, GlaxoSmithKline, Johnson & Johnson and the technology transfer offices of three of the world's top universities (Imperial College London, University College London and the University of Cambridge) (source: QS World University Rankings 2015/16), Innovations, UCLB and Cambridge Enterprise respectively. The joint venture agreement establishes an English limited liability partnership, Apollo Therapeutics LLP, as the vehicle for the joint venture.

The joint venture will support the translation of outstanding academic therapeutic science into innovative new medicines by combining the skills of the university academics with industry expertise at an early stage. This aims to speed up the development of new medicines, as well as reducing the cost and improving the attrition rate of potential opportunities, whilst sharing the risk of early development.

Over the six year life of the Apollo joint venture, the three technology transfer offices will each contribute £3.3 million, while the three pharmaceutical companies will each contribute £10.0 million, as well as providing research and development expertise and resources to assist with the development of projects.

Dr Ian Tomlinson, former Senior Vice President, Worldwide Business Development and Biopharmaceuticals R&D, for GlaxoSmithKline and founder & Chief Scientific Officer of Domantis Ltd has been appointed Chairman of the Apollo Investment Committee (the "AIC"). Comprising representatives from the six partners, the AIC will make all investment decisions. Tony Hickson, Managing Director, Technology Transfer is Innovations' representative on the AIC.

The Group's active participation in the Apollo joint venture alongside its investment in the UCL Technology Fund LP, will provide the Group with increased access to intellectual property emanating from Imperial College London, University College London and the University of Cambridge, three world-class universities, as well as strengthening Innovations' existing relationships with AstraZeneca, GlaxoSmithKline, Johnson & Johnson, three global pharmaceutical companies.

Developments during the period 1 August 2015 to 31 December 2015

Portfolio update

As at 31 December 2015, the Group's portfolio consisted of holdings in 103 companies and had a net value of £347.2 million (31 July 2015: £327.2 million), an increase of £20.0 million during the period. The increase is comprised of investments of £21.2 million across 14 companies, less disposals of £0.1 million and fair value losses of £1.1 million.

The total fair value losses across the portfolio of £1.1 million comprise fair value gains of £1.1 million in the unquoted portfolio offset by £2.2m of fair value losses in the quoted portfolio.

As at 31 December 2015, the Group's unquoted portfolio was valued at £239.6 million (31 July 2015: £220.5 million). The increase in value of £19.1 million is comprised of investments of £18.1 million less disposals of £0.1 million offset by fair value gains of £1.1 million.

As at 31 December 2015, the Group's quoted portfolio was valued at £107.7 million (31 July 2015: £106.8 million). The increase in value of £0.9 million is comprised of investments of £3.1 million, less losses of £2.2 million.

Since 1 August 2015, the Group has added five new unquoted accelerated growth companies to the portfolio.

The Group made £13.1 million (62%) of investment in the period 1 August 2015 to 31 December 2015 into existing Portfolio Companies, with the balance of £8.1 million being invested in the new Portfolio Companies. Portfolio Companies raised a further £34.0 million of external funding during the period.

In line with the plans set out in the results for the year ended 31 July 2015 published on 14 October 2015, the Group is continuing to develop its investment portfolio, by scaling its activities in non-therapeutics sectors. All five of the new Portfolio Companies added to the portfolio between 1 August 2015 and 31 December 2015 are technology companies, comprising four in the Group's information communications technology sector (Garrison Technology Limited, Import.io Limited, Telectica Limited and WaveOptics Limited) and one in the Group's engineering & materials sector (Silicon Microgravity Limited).

As at 31 December 2015, the Group's portfolio comprised 44 accelerated growth companies, which are the primary focus of the Group's ventures team's time and investment capital. The performance of the portfolio continues to be very encouraging. Key highlights of the period included:

· Circassia Pharmaceuticals plc announcing the positive outcome of the European Decentralised Procedure which demonstrated therapeutic equivalence to GlaxoSmithKline's FLIXOTIDE® pMDI for the prophylactic treatment of asthma, which will result in the UK's Medicines and Healthcare products Regulatory Agency issuing a national marketing licence.

· PsiOxus Therapeutics Limited announcing that it had initiated a study to assess the safety and efficacy of combining Merck's Keytruda (pembrolizumab) with EnAd to treat patients with carcinomas.

· Abzena plc broadening its service capabilities and strengthening its position in the US through the acquisition of The Chemistry Research Solution LLC, a specialist contract chemistry company based in the US.

· Autifony Therapeutics Limited announcing its second programme in clinical trials with the start of a Phase I clinical evaluation of AUT002006 in schizophrenia.

· Kesios Therapeutics Limited closing a £19.0 million series A funding round from a syndicate of leading venture investors including Innovations, SV Life Sciences and Abingworth and strengthening it's leadership team. This included appointing Paolo Paoletti MD, formerly President of GlaxoSmithKline Oncology, as Chief Executive Officer of Kesios Therapeutics Limited.

· Featurespace Limited announcing a number of new customer wins including a five-year agreement with UK mobile payment innovator, Zapp Limited, and a new project with Camelot, the UK National Lottery operator. The latter will see Featurespace Limited's technology augment Camelot's existing processes for identifying and protecting online players at potential risk of harmful play.

Technology transfer operation

Licensing and royalty income can be variable and is currently slightly less than the same period last year. However, the Group's technology transfer team has signed several licences in the first half of the financial year which is hoped will contribute to an increase in second half year income.

The occupancy levels and trading activities of the Imperial Incubator remain healthy and the Board looks forward to the opening of the new Imperial College London incubator at White City in the summer. The number of opportunities flowing through the pipeline from Imperial College London remain healthy and 139 inventions were disclosed and 31 patents filed in the period 1 August 2015 to 31 December 2015.

Developments since 1 January 2016

Innovations has recently announced major funding rounds for two of its therapeutics companies. Collectively these companies, Inivata Limited ("Inivata") and MISSION Therapeutics Limited ("MISSION"), raised more than £90 million in private funding rounds which underlines the point that the Group is not dependent upon the public markets to ensure that its Portfolio Companies grow with pace and ambition.

On 26 January 2016, Inivata completed a £31.5 million series A fundraising. Innovations committed £10.0 million to the round, alongside existing investors Cambridge Innovation Capital and Johnson and Johnson Innovation, and new investor Woodford Patient Capital Trust plc.

Inivata is a clinical cancer genomics company that is harnessing the emerging potential of circulating DNA analysis ("ctDNA") to improve testing and treatment for oncologists and their patients. Unlike conventional invasive biopsies, Inivata detects and analyses genomic material from a cancer patient's cell-free, circulating tumour DNA which can be collected through a simple blood sample.

Innovations led a seed financing round for Inivata in September 2014. The fact that Inivata has secured funding of this size reflects both the potential of genomic analysis of ctDNA to transform cancer care and the great progress Inivata has made in developing innovative molecular profiling and monitoring products.

On 2 February 2016, MISSION completed a £60 million fund raise to advance a series of first-in-class small molecule drugs candidates from its innovative drug platform. The financing was jointly led by Innovations and new investor, Woodford Patient Capital Trust Plc, with follow-on investment from existing shareholders Sofinnova Partners, SR One, Roche Venture Fund and Pfizer Venture Investments.

MISSION is a drug discovery and development company focused on selectively targeting deubiquitinating ("DUBs") enzymes to treat cancer, neurodegenerative and other diseases. DUBs are involved in multiple cellular processes, including DNA damage and cell proliferation. The inhibition of these enzymes has considerable potential for the generation of novel drugs for treating cancer and other unmet medical needs, including neurodegenerative disease, muscle wasting and infectious disease. Despite significant efforts within the pharmaceutical sector, there is a lack of DUB inhibitors in clinical development.

The new funding will enable MISSION to maximise the potential of its DUB platform and advance a series of first-in-class small molecule drugs candidates targeting specific DUBs into early clinical development.

These funding rounds are likely to result in small uplifts in the carrying values of the Group's holdings in Inivata for the six months' ended 31 January 2016 and in MISSION for the year ending 31 July 2016. The impact on the fair value of the Group's investment in each of Inivata and MISSION will be determined and reviewed as part of the preparation of the Group's relevant financial statements.

On 25 January 2016, Abzena announced that it had entered into a licensing agreement with a large, publicly listed US biotech for the development of Antibody-Drug Conjugates ("ADCs") based on Abzena's ThioBridge™ technology. The agreement covers the development of ADCs against three undisclosed targets. Abzena will receive an initial licence and target nomination fee and has the potential to receive further licence fees and milestone payments of up to $150 million if the partner develops a product for each of three designated targets with the ThioBridge™ technology, as well as royalties on the sale of ThioBridge™ ADC products developed under this agreement. The licensing agreement follows a research collaboration between the two parties, which included the evaluation of multiple ADCs for safety and efficacy in pre-clinical models.

Investments in the period since 1 January 2016 amounted to £10.3 million, bringing the total investments in the period since 1 August 2015 to £31.5 million.

Not all Portfolio Companies performed to expectations and therefore the Group recorded £0.9 million of impairments elsewhere in the unquoted portfolio.

The value of the quoted portfolio fell by £7.6 million between 1 January 2016 and 29 January 2016 reflecting in part some volatility in the market, resulting in a net fair value loss in the quoted portfolio of £9.8 million in the period between 1 August 2015 and 29 January 2016.

As at 29 January 2016, the Group had cash and short-term investments of £91.6 million (31 July 2015: £128.1m). Including the undrawn £50.0 million second loan facility secured from the EIB in July 2015 the Group had £141.6 million available for investment.

Outlook

The Board is encouraged by the Group's progress over the first six months of the year and remains confident that from within this portfolio there is the potential for a number of companies to generate significant exits over the coming years.

In addition, as is indicated by the number of new companies added to the portfolio in the period, the Group continues to see a healthy stream of new investment opportunities derived from outstanding research within the Golden Triangle.

There remain significant opportunities to invest in developing Innovations' maturing portfolio and combined with this encouraging pipeline of new opportunities, the Group is on course to increase the rate of investment in the current financial year.

Availability of audited accounts on website

The most recently published audited accounts of the Group are for the twelve month period ended 31 July 2015. An electronic copy is available from the Company's website at http://www.imperialinnovations.co.uk/investor-relations/annual-report-2015/.

Reasons for the Placing and use of proceeds

The Directors believe that there are significant opportunities available to the Group to invest in existing and new Portfolio Companies across its target investment areas, and to seek to further accelerate the growth of the Group and to enhance returns to shareholders. This includes investments across its core sectors (including therapeutics, medtech & diagnostics, engineering & materials and information communications technology), and also across the Portfolio Companies' development stages. The 2011 Fundraising and the 2014 Fundraising have enabled the Group to invest larger amounts of capital and maintain its involvement for longer in promising opportunities within the Portfolio Companies. This allows the Group to deploy significant amounts of capital in assets that are well known to the Group. The Directors believe that this strategy has resulted in successes to date and further believe that the Placing can help the Group to build upon that success in the future.

The Company intends to use the net proceeds of the Placing to continue to support its existing Portfolio Companies, by maintaining or increasing its stake in these companies through their future funding requirements, and to further its research commercialisation and investment activities in new and exciting technologies using its extensive network of academics, entrepreneurs, management teams and co-investors, and for general corporate purposes. The Directors also expect to deploy funds in investment opportunities arising from Company's involvement in the UCL Technology Fund LP. In addition, the Group intends to invest in expanding its licensing portfolio with the intention of further growing its licence and royalty income, which it deems as an attractive method of monetising intellectual property.

IMPORTANT NOTICE:

This announcement is not an offer of securities for sale or the solicitation of an offer to buy or to subscribe for the securities discussed herein to any person in any jurisdiction to whom or in which such offer or solicitation is unlawful and, in particular, is not for distribution in the United States, Australia, Canada or Japan. No securities may be offered or sold in the United States unless the securities are registered under the US Securities Act of 1933 (the "Securities Act") except in transaction exempt from, or not subject to, the registration requirements of the Securities Act. The Placing Shares and the Ordinary Shares have not been, and will not be, registered under the Securities Act and, accordingly, are only being offered for sale to non-US Persons (as US Person is defined in Regulation S under the Securities Act) outside the United States in reliance upon Regulation S. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan. Imperial Innovations Group plc has not and does not intend to register any securities in the United States, Australia, Canada or Japan. There will be no public offer of the securities in the United States or elsewhere. Copies of this announcement are not being, and should not be, distributed, published or transmitted into the United States.

This announcement and the information contained herein are not for publication or distribution, directly or indirectly, to persons in the United States, Australia, Canada, Japan or in any jurisdiction or in any jurisdiction in which such publication or distribution is unlawful. The distribution of this announcement and the Placing and/or the offer or sale of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken or will be taken by the Company, the Joint Bookrunners, or any of their respective affiliates or agents, which would permit an offer of the Placing Shares or possession or distribution of this announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons distributing any part of this announcement must satisfy themselves that it is lawful to do so. Persons (including without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this announcement should seek appropriate advice before taking any action. Persons into whose possession this announcement comes are required by the Company and the Joint Bookrunners to inform themselves about, and to observe, any such restrictions.

Members of the public are not eligible to take part in the Placing (including the Clawback Placing). This announcement (including the appendix) and the terms and conditions set out herein are only directed at persons whose ordinary activities involve them in acquiring, holding, managing and disposing of investments (as principal or agent) for the purposes of their business and who have professional experience in matters relating to investments. This announcement is only directed at persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive and being either (i) persons outside the United Kingdom and (ii) persons falling within Article 19(5) ("investment professionals") of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") who have professional experience in matters relating to investments, and/or (iii) high net worth companies, unincorporated associations and other bodies and persons to whom it may otherwise lawfully be communicated in accordance with Article 49(2) of the Order (all such persons together being referred to as "relevant persons"). The offer comprised in this announcement must not be acted on or relied on by any person who is not a relevant person. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.

Prospective investors should read the Placing Memorandum and, in particular, Part V (Risk Factors) of that document for a discussion of certain factors that should be considered in connection with an investment in the Placing Shares.

Cenkos Securities plc ("Cenkos Securities") is authorised and regulated in the United Kingdom by the Financial Conduct Authority ("FCA") for the conduct of investment business. Cenkos Securities has been appointed as Joint Bookrunner. Cenkos Securities is acting exclusively for the Company and no one else in relation to the Placing and will not regard any person other than the Company (whether or not a recipient of this announcement) as its client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for giving advice in relation to the Placing or any transaction, arrangement or other matter referred to in this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on Cenkos Securities by the FSMA or the regulatory regime established thereunder or other applicable law, Cenkos Securities assumes no responsibility for the accuracy, completeness or verification of this announcement or any related statement.

J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove") is authorised by the Prudential Regulation Authority ("PRA") and regulated in the United Kingdom by the PRA and the FCA. J.P. Morgan Cazenove has been appointed as Joint Bookrunner and Nominated Adviser. J.P. Morgan Cazenove is acting exclusively for the Company and no one else in relation to the Placing and will not regard any person other than the Company (whether or not a recipient of this announcement) as its client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for giving advice in relation to the Placing or any transaction, arrangement or other matter referred to in this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on J.P. Morgan Cazenove by the FSMA or the regulatory regime established thereunder or other applicable law, J.P. Morgan Cazenove assumes no responsibility for the accuracy, completeness or verification of this announcement or any related statement.

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "forecasts", "plans", "prepares", "anticipates", "projects", "expects", "intends", "may", "will", "seeks", or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the Company's and the Directors' intentions, beliefs or current expectations concerning, amongst other things, the Company's prospects, growth and strategy.

Subject to the Company's regulatory obligations, it is not under any obligation to update publicly or revise any forward looking-statement whether as a result of new information, future events or otherwise. None of the statements made in this announcement in any way obviates the requirements of the Company to comply with its regulatory obligations.

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 the Joint Bookrunners or any of their respective 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 party or its advisers, and any liability therefore is expressly disclaimed.

Neither the Company nor the Joint Bookrunners make any representation to any offeree, subscriber or purchaser regarding an investment in the securities referred to in this announcement under the laws applicable to such offeree, subscriber or purchaser. Each investor should consult its own advisers as to the legal, tax, business, financial and related aspects of an investment in the Placing Shares.

No prospectus (for the purposes of the Prospectus Directive) will be published in relation to the Placing. This announcement does not constitute a recommendation regarding any securities.

The contents of Innovations' website do not form part of this announcement.

By participating in the Clawback Placing, Clawback Placees will be deemed to have read and understood and this announcement in its entirety, and to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained in this announcement and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained therein.

APPENDIX - TERMS AND CONDITIONS OF THE CLAWBACK PLACING

1. THE CLAWBACK PLACING

A summary of the arrangements relating to the Clawback Placing and the formal terms and conditions of the Clawback Placing are set out below. The attention of those persons invited to participate is drawn to paragraph 4 of this Appendix (Procedure for Application and Payment) which gives details of the procedure for application and payment for the Placing Shares by the Clawback Placees.

The aggregate number of Placing Shares to be placed to the Clawback Placees will not exceed 1,176,471 Placing Shares.

The Placing Shares are in registered form and can be held in certificated form or uncertificated form in CREST. Accordingly, no further application for admission to CREST is required for the Placing Shares as the Placing Shares will be issued under the current ISIN (GB00B170L953) and SEDOL number (B170L95) and will rank pari passu in all respects with each other and with the existing ordinary shares of the Company.

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will take place and that dealings in the Placing Shares will commence at 8.00 a.m. on 23 February 2016.

2. PARTICIPATION IN THE CLAWBACK PLACING

Participation in the Clawback Placing will only be available to persons who are invited to subscribe for Placing Shares and who may lawfully be, and are, invited to participate. The number of Placing Shares to be issued pursuant to the Clawback Placing will be agreed between the Joint Bookrunners and the Company following completion of the bookbuild but in any event will be no more than 1,176,471 Placing Shares. Each Clawback Placee will be required to pay 425 pence in respect of each Placing Share issued to it.

Any Clawback Placee who participates in the Clawback Placing in accordance with the procedures set out in this Appendix will be deemed to make the representations and warranties contained in paragraph 4 of this Appendix (Procedure for Application and Payment).

3. CONDITIONS AND FURTHER TERMS OF THE CLAWBACK PLACING

The Clawback Placing is conditional, amongst other things, upon the following:

· the passing of the Resolutions at a general meeting of the Company's shareholders;

· the Placing Agreement becoming or being declared unconditional in all respects and not having been terminated in accordance with its terms prior to Admission; and

· Admission becoming effective by not later than 8.00 a.m. on 23 February 2016 (or such later time and/or date as the Joint Bookrunners and the Company may agree, being no later than 8.00 a.m. on 8 March 2016.

By participating in the Clawback Placing, Clawback Placees irrevocably agree that, without the Company or the Joint Bookrunners having any liability to Clawback Placees whatsoever, the Joint Bookrunners may in their absolute discretion: (i) exercise the right to extend the time for fulfilment of any of the conditions in the Placing Agreement (provided that Admission occurs not later than 8.00 a.m. on 8 March 2016); (ii) waive, in whole or in part, fulfilment of certain of the conditions to the Placing Agreement; or (iii) terminate the Placing Agreement in certain circumstances prior to Admission, in each case without consulting Clawback Placees.

If, following execution of the Placing Agreement any of the conditions in the Placing Agreement have not been satisfied (or, where applicable, waived) or has become incapable of being satisfied on or before 8.00 a.m. on 23 February 2016 or such later date as the Joint Bookrunners and the Company may agree (but being not later than 8.00 a.m. on 8 March 2016), the rights and obligations of Clawback Placees hereunder shall cease and determine at such time and no claims may be made by Clawback Placees in respect thereof. All obligations assumed by Clawback Placees under the Clawback Placing by participating in the Clawback Placing are entered into by Clawback Placees with the Joint Bookrunners in their capacity as agents for the Company and are therefore directly enforceable by the Company.

By participating in the Clawback Placing, each Clawback Placee (and any person acting on such Clawback Placee's behalf) represents and warrants that:

(i) it will subscribe for and/or purchase the Placing Shares (as the case may be) comprised in its Placing allocation and to pay for the same a monetary amount equal to its Placing allocation when due;

(ii) its obligations are irrevocable and legally binding and shall not be capable of rescission or termination by it in any circumstances;

(iii) the exercise by either Joint Bookrunner of any right or discretion under the Placing Agreement shall be within the absolute discretion of that Joint Bookrunner and such Joint Bookrunner need not have any reference to it and shall have no liability to it whatsoever in connection with any decision to exercise or not to exercise any such right and it agrees that it has no rights against either Joint Bookrunner, the Company or any of their respective directors, officers, employees or agents under the Placing Agreement pursuant to the Contracts (Rights of Third Parties Act) 1999;

(iv) the contents of this announcement is exclusively the responsibility of the Company. Neither Cenkos Securities nor J.P. Morgan Cazenove, nor any of their respective directors, officers, employees or agents, have nor shall have any liability for any information, representation or statement contained or referred to in this announcement or contained or referred to in any other information previously published by the Company and will not be liable for each Clawback Placee's decision to participate in the Placing based on any information, representation or statement in this announcement;

(v) in accepting its Placing allocation, it is not relying on any information or representation or warranty in relation to the Company or any of its subsidiaries or any of the Placing Shares other than as contained in this announcement and the Placing Memorandum. Each Clawback Placee agrees that neither the Company nor the Joint Bookrunners nor any of their respective affiliates nor any of the directors, officers, employees, advisers or agents of any of the foregoing will have any liability for any such other information or representation;

(vi) in connection with the Placing, the Joint Bookrunners do not have any duties or responsibilities similar or comparable to the duties of "best execution" and "suitability" imposed by the FCA's Conduct of Business Source Book to it or, as the case may be, its clients, and that the Joint Bookrunners are not acting for it or its clients, and that the Joint Bookrunners will not be responsible for providing the protections afforded to clients or any Clawback Placee;

(vii) (A) the Placing Shares have not been and will not be registered under the US Securities Act of 1933 (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, (B) it will not offer, sell or deliver, directly or indirectly, any Placing Shares other than in an "offshore transaction" meeting the requirements of Regulation S under the Securities Act ("Regulation S"), and (C) it is outside of the United States and not a US Person (as defined in Regulation S), and is otherwise acquiring the Placing Shares in an "offshore transaction" meeting the requirements of Regulation S;

(viii) it is not a national or resident of Canada, Australia, South Africa or Japan or a corporation, partnership or other entity organised under the laws of Canada, Australia, South Africa or Japan and that it will not offer, sell, renounce, transfer or deliver directly or indirectly any of the Placing Shares in Canada, Australia, South Africa or Japan or to or for the benefit of any person resident in Canada, Australia, South Africa or Japan and it acknowledges that the Placing Shares have not been and will not be registered under the relevant securities laws of Canada, Australia, South Africa or Japan (and exemptions are not being sought or obtained from the Securities Commission of any province of Canada) and that the Placing Shares are not being offered for sale and may not be, directly or indirectly, offered, sold, transferred or delivered in Canada, Australia, South Africa or Japan;

(ix) it is entitled to subscribe for and/or purchase (as the case may be) the Placing Shares comprised in its Placing allocation under the laws of all relevant jurisdictions which apply to it and that it has fully observed such laws and obtained all governmental and other consents which may be required thereunder or otherwise and complied with all necessary formalities and that it has not taken any action which will or may result in the Company or either of the Joint Bookrunners or any of their respective directors, officers, employees or agents, acting in breach of any regulatory or legal requirements of any territory in connection with the Placing or its acceptance and that its commitment constitutes a valid and binding obligation on it;

(x) it has obtained all necessary consents and authorities to enable it to give its commitment to subscribe for and/or purchase (as the case may be) the Placing Shares comprised in its Placing allocation and to perform its subscription and/or purchase obligations (as the case may be) in respect thereof;

(xi) it is a qualified investor for the purposes of section 86(1) of FSMA who is subscribing for and/or purchasing (as the case may be) the Placing Shares as principal and not on behalf of others (other than on behalf of (a) discretionary client(s) in circumstances where section 86(2) of FSMA applies, each of whom is subscribing for and/or purchasing (as the case may be) the Placing Shares as principal and not on behalf of others);

(xii) it is a person of a kind described in Article 19 (investment professionals) and/or Article 49 (high net worth companies, unincorporated associations etc.) of the Order being persons having professional experience in matters relating to investments or a person to whom this announcement may otherwise be lawfully distributed pursuant to another applicable exemption under the Order;

(xiii) it is a "professional client" or an "eligible counterparty" within the meaning of Chapter 3 of the FCA's Conduct of Business Sourcebook and it is subscribing for and/or purchasing (as the case may be) the Placing Shares comprised in its Placing allocation for investment only and not with a view to resale or distribution;

(xiv) it will (or will procure that your nominee will) if applicable, make notification to the Company of the interest in its ordinary shares in accordance with Rule 5 of the Disclosure and Transparency Rules issued by the FCA and made under Part VI of FSMA and the memorandum and articles of association of the Company;

(xv) it is not, and it is not acting as nominee or agent for, a person who is or may be liable to stamp duty or stamp duty reserve tax ("SDRT") under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (which broadly apply where ordinary shares are transferred or in certain circumstances are issued to persons who issue depository receipts or provide clearance services for their nominees or agents);

(xvi) no instrument under which it subscribes for and/or purchases (as the case may be) Placing Shares (whether as principal, agent or nominee) will be subject to stamp duty or SDRT at the increased rates referred to in sections 67 or 93 (Depository Receipts) or section 70 or 96 (Clearance Services) of the Finance Act 1986;

(xvii) it agrees that it is in the absolute discretion of Cenkos Securities and J.P. Morgan Cazenove to agree to exercise any of their respective rights under the Placing Agreement or any other right without any liability or duty to it whatsoever including, without limitation, to extend the time, waive in full or in part the requirement for the satisfaction of all or any of the conditions of the Placing Agreement in accordance with its terms or the termination of the Placing Agreement if any condition therein has not been satisfied and otherwise to adjust the timetable for implementation of the Placing. All times and dates referred to in this announcement are therefore subject to adjustment in accordance with such rights;

(xviii) it acknowledges that it shall have no claim against Cenkos Securities, J.P. Morgan Cazenove or the Company and it hereby irrevocably waives any and all such claims howsoever arising;

(xix) if a company, it is a valid and subsisting company and have all necessary corporate capacity and authority to execute its obligations in connection with the Placing allocation;

(xx) if an individual, it has the power and authority to enter into the Placing and has taken all action necessary to execute, deliver and exercise its rights and to perform its obligations under the Placing and such exercise and performance does not and will not result in a breach of any obligation by which it is bound;

(xxi) it is liable for all and any stamp duty or SDRT and any related costs, fines, penalties and interest arising in respect of the delivery and settlement in respect of the Placing Shares comprised in its Placing allocation;

(xxii) this announcement and its acceptance of its Placing allocation are, and any contract which may be entered into between it and a Joint Bookrunner as agent of the Company pursuant hereto, shall be governed by and construed in accordance with the laws of England and that it submits to the exclusive jurisdiction of the English Courts as regards any claim, dispute or matter arising out of or relating to this announcement or any such contract;

(xxiii) it has complied in all respects with its obligations under the Money Laundering Regulations 2007, the money laundering provisions of the Criminal Justice Act 1993, the Anti-Terrorism Crime and Security Act 2001, the Proceeds of Crime Act 2002 and the Serious Crime Act 2015 (together with the relevant provisions of the manual of guidance produced by the Joint Money Laundering Steering Group in relation to financial sector firms);

(xxiv) all notices, remittances and documents of title are sent to it or its agent at its own risk;

(xxv) time shall be of the essence as regards obligations pursuant to its Placing allocation;

(xxvi) there is no commission payable to subscribers for and/or purchasers of the Placing Shares;

(xxvii) its name and the number of Placing Shares to be subscribed for and/or purchased (as the case may be) by itself may be disclosed if required by law or by any applicable rules or regulations including the rules of AIM and rules of the London Stock Exchange;

(xxviii) it irrevocably appoints any director of a Joint Bookrunner as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares offered to it;

(xxix) it is not relying on any representations or warranties or agreements by the Company, a member of the Cenkos Securities group, a member of the J.P. Morgan Cazenove group or by any of their respective directors, officers, employees or agents or any other person except as set out in the express terms of this announcement;

(xxx) it will not deal or cause or permit any other person to deal in all or any of the Placing Shares which are the subject of its Placing allocation unless and until Admission becomes effective; and

(xxxi) it is in possession of sufficient information to make reasonable evaluation of the Placing set out in this announcement.

By participating in the Clawback Placing, each Clawback Placee further represents, warrants and undertakes (for itself and any other person for whom it is subscribing for and/or acquiring (as the case may be) Placing Shares) to the Joint Bookrunners (for the Joint Bookrunners and for the benefit of the Company) and acknowledges that:

(i) it is aware of, has complied with and will continue to comply with any obligations it has under the Money Laundering Regulations 2007, the Criminal Justice Act 1993, section 118 of FSMA, Proceeds of Crime Act 2002, the Anti-Terrorism Crime and Security Act 2001 and the Serious Crime Act 2015 (together with the relevant provisions of the Joint Money Laundering Steering Group in relation to financial sector firms), and any order, secondary legislation, notice or guidance issued thereunder) (together, the "Regulations") to the extent applicable to it;

(ii) it will not make any offer to the public of those Placing Shares to be subscribed for and/or purchased (as the case may be), by it for the purposes of the Prospectus Rules made by the FCA with effect from 1 July 2005 pursuant to Commission Regulation (EC) No. 809/2004;

(iii) none of the Company, Cenkos Securities or J.P. Morgan Cazenove is making any recommendation whatsoever to it nor advising it regarding the suitability or merits of your acquiring its Placing allocation or entering into any transaction in connection with it;

(iv) it will not distribute this announcement or any other document relating to the Placing Shares and it will be acquiring the Placing Shares comprised in its Placing allocation for its own account as principal or for a discretionary account or accounts (as to which it has the authority to make and do make the statements in this announcement) for investment purposes only; and

(v) all documents will be sent at the Clawback Placee's risk. They may be sent by post to such Clawback Placee at an address notified to a Joint Bookrunner.

By participating in the Clawback Placing, each Clawback Placee acknowledges that its confirmations, representations, warranties and undertakings are required in connection with compliance in respect of securities laws and that Cenkos Securities, J.P. Morgan Cazenove, the Company and others will rely on its confirmations, representations, warranties and undertakings set forth herein, and it agrees to notify Cenkos Securities or J.P. Morgan Cazenove promptly in writing if any of its confirmations, representations, warranties or undertakings herein cease to be accurate or complete.

4. PROCEDURE FOR APPLICATION AND PAYMENT

To participate in the Clawback Placing, prospective Clawback Placees will be invited to communicate their offer by telephone to their usual sales contact at Cenkos Securities or J.P. Morgan Cazenove, unless otherwise instructed. Each offer should state the number of Placing Shares which the prospective Clawback Placee wishes to acquire at the Placing Price of 425 pence per Placing Share. An offer in the Clawback Placing will be made on the terms and subject to the conditions in this announcement and will be legally binding on the prospective Clawback Placee on behalf of which it is made and will not be capable of variation or revocation after the time at which it is submitted. Each Clawback Placee will have an immediate, separate, irrevocable and binding obligation to pay in cleared funds a sterling amount equal to the product of 425 pence and the number of Placing Shares such Clawback Placee has agreed to acquire and the Company has agreed to allot.

The bookbuild is expected to close no later than 4.30 p.m. on 3 February 2016 but may be closed earlier or later as agreed between the Company and the Joint Bookrunners. The Company and the Joint Bookrunners reserve the right to reduce the amount to be raised pursuant to the Clawback Placing, in their absolute discretion. All obligations under the Clawback Placing will be subject to the conditions referred to above.

5. ADMISSION, SETTLEMENT AND DEALINGS

The result of the Placing is expected to be announced on or around the date of this announcement. Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on the AIM. It is expected that Admission will become effective and that dealings in the Placing Shares, fully paid, will commence at 8.00 a.m. on 23 February 2016.

Each Clawback Placee allocated Placing Shares in the Clawback Placing will be sent a trade confirmation, stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Clawback Placee and settlement instructions. Each Clawback 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.

6. TIMES AND DATES

The Company shall, with the agreement of the Joint Bookrunners, be entitled to amend the commencement date of the Clawback Placing or amend or extend the latest date for acceptance of offers under the Clawback Placing and all related dates set out in this announcement and in such circumstances will notify AIM and make an announcement on a Regulatory Information Service approved by the FCA.