Learning Technologies Group Regulatory News (LTG)

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

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED ("MAR").

15 July 2021

Learning Technologies Group plc

 ("LTG" or the "Company" or the "Group")

Proposed Acquisition of GP Strategies for $394 million (£284 million1)

Creates a leading workforce transformation business focused on learning and talent

Significant margin enhancement and cross-sell opportunity

Strategically compelling and expected to be significantly EPS accretive

LTG, the integrated e-learning services and technologies provider, is pleased to announce it has entered into a conditional agreement (the "Merger Agreement") to acquire the entire issued and outstanding share capital of GP Strategies ("GP Strategies"), a leading provider of managed learning services and workforce transformation (the "Acquisition") for $20.85 per GP Strategies share, representing a market capitalisation of $394 million (£284 million1) and an enterprise value of $343 million (£247 million1) (the "Consideration"). The Consideration and transaction costs for the Acquisition are intended to be part-funded by a conditional underwritten placing of new ordinary shares (the "Placing") raising approximately £82 million, with the balance being part-funded by up to c.$305 million in incremental debt financing (of which $40 million is to be repaid from GP Strategies' cash shortly after the Acquisition) and out of existing cash resources.

Note 1: Based on current USD / GBP exchange rate of 0.7210 as of 14 July 2021. Amount raised through Placing and debt financing expected to contribute to transaction fees with balance remaining with LTG as contingency cash

Strategic highlights

Financial Highlights

Note 1: Based on current USD / GBP exchange rate of 0.7210 as of 14 July 2021.

Completion of the Acquisition is conditional upon, among other things, the admission to AIM of the shares to be issued and allotted pursuant to the Placing, the approval of GP Strategies' stockholders, all applicable waiting periods (and extensions thereof) under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR") having expired, and required approvals from the Committee on Foreign Investment in the United States ("CFIUS") having been obtained, in accordance with the terms of the Merger Agreement.

Subject to the fulfilment of the above conditions, the Acquisition is expected to complete shortly after the satisfaction of the CFIUS condition, which is expected to take from 55 to 100 days from the date of signing. Completion of the Acquisition is therefore expected to occur in Q4 of 2021. Details of the conditions to the Acquisition are also set out in this announcement below.

GP Strategies and LTG have each agreed to pay the other certain fees if the Merger Agreement is terminated in certain circumstances. Further details on the circumstances in which such fees are payable are set out in this announcement below.

Current trading

Commenting on the proposed Acquisition, Jonathan Satchell, Chief Executive of LTG, said:

"Today marks an important moment for LTG as we announce a significant expansion of our business through the proposed acquisition of GP Strategies, a leading managed learning services and workforce transformation provider. The proposed acquisition brings new capabilities and deep sector expertise in high-value industries. It provides LTG with a significant opportunity to expand on our long-term recurring customer relationships, while bringing a large new base of blue-chip customers from GP Strategies.

I look forward to welcoming GP Strategies' teams and people, who are joining an exciting journey as we benefit from continued growth in the corporate learning and talent management industry, consolidating this fragmented international market."

Commenting on the proposed Acquisition, Andrew Brode, Non-Executive Chairman of LTG, said:

"I am delighted by the value-creation opportunities for all of our stakeholders from the proposed acquisition of GP Strategies. For LTG's people, it provides the benefits of an enlarged group and all the opportunities that brings. For customers, we will have new capabilities to offer and the ability to serve global businesses with local presence for customised learning experiences using award winning technologies and services. For shareholders, we believe the financial effects of the acquisition are compelling, with an attractive value creation opportunity to support organic growth in future years. It is a very exciting time for LTG and all involved in the Group."

For the purposes of MAR, this Announcement is being made on behalf of the Company by Neil Elton.

Enquiries:

Notes to Editors

About LTG:

LTG is a leader in the high growth workplace e-learning industry. The Group offers truly end-to-end learning solutions ranging from strategic consultancy, through a range of content and platform solutions to analytical insights that enable corporate and government clients to close the gap between current and future workforce capability.

LTG is admitted to trading on the AIM market of the London Stock Exchange (LTG.L) and headquartered in London. The Group has offices in Europe, North America, South America and Asia-Pacific.

About GP Strategies:

GP Strategies (NYSE: GPX) is a global workforce transformation provider of organizational and technical performance solutions. GP Strategies' solutions improve the effectiveness of organizations by delivering innovative and superior training, consulting, and business improvement services customized to meet the specific needs of its clients. Clients include Fortune 500 companies, automotive, financial services, technology, aerospace and defense industries, and other commercial and government customers. Additional information can be found at https://www.gpstrategies.com/.

Advisors

Jefferies LLC is serving as exclusive financial advisor and Hogan Lovells is serving as legal adviser to GP Strategies in connection with the Acquisition.

Goldman Sachs International is serving as exclusive financial advisor and DLA Piper is serving as legal adviser to LTG in connection with the Acquisition.

IMPORTANT NOTICE

This Announcement may contain "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company, including amongst other things, United Kingdom domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, the effect of competition, inflation, deflation, the timing effect and other uncertainties of future acquisitions or combinations within relevant industries, the effect of tax and other legislation and other regulations in the jurisdictions in which the Company and its respective affiliates operate, the effect of volatility in the equity, capital and credit markets on the Company's profitability and ability to access capital and credit, a decline in the Company's credit ratings; the effect of operational risks; and the loss of key personnel. As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. Except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

This document and the information contained herein does not contain or constitute an offer to sell or a solicitation of an offer to subscribe or buy any securities referred to herein in the United States. Any securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or with any securities regulatory authority of any state or jurisdiction of the United States or under the securities laws or with any securities regulatory authority of any state or other jurisdiction of the United States and accordingly no securities referred to herein may be offered, sold, resold, pledged, delivered or transferred, directly or indirectly, in, into or within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and, in each case, in compliance with the securities laws of any relevant state or other jurisdiction of the United States. There is no intention to register any portion of the Placing in the United States or to conduct any public offering of securities in the United States.

This document and the information contained herein does not contain or constitute an offer of securities for sale, or solicitation of an offer to purchase securities, in Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction where such an offer or solicitation would be unlawful and any securities referred to herein have not been and will not be registered under the securities laws of Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction where any offer of such securities would breach any applicable law, and may not be offered, sold, resold, or delivered, directly or indirectly, within Australia, Canada, Japan or the Republic of South Africa, or in any jurisdiction where it is unlawful to do so, except pursuant to an applicable exemption.

Goldman Sachs International, which is authorised in the United Kingdom by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, is acting for the Company and no-one else as financial advisor in connection with the contemplated acquisition. Neither Goldman Sachs International nor its affiliates, partners, directors, officers, employees or agents are responsible to anyone other than the Company for providing the protections afforded to clients of Goldman Sachs International or for providing advice in connection with the contemplated acquisition or for any other matters referred to herein.

Numis, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is and is acting as nominated adviser and joint broker for the Company and no-one else in connection with the contemplated acquisition. Neither Numis nor its affiliates, partners, directors, officers, employees or agents are responsible to anyone other than the Company for providing the protections afforded to clients of Numis or for providing advice in connection with the contemplated acquisition or for any other matters referred to herein

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 Goldman Sachs International or Numis or by any of their respective affiliates, partners, directors, officers, employees or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

No statement in this Announcement is intended to be a profit forecast or estimate, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company. Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

Introduction to GP Strategies

GP Strategies is a is a leading workforce transformation partner. The company provides workforce performance solutions. GP Strategies is listed on the New York Stock Exchange ("NYSE") under the symbol GPX. GP Strategies provides clients with business consulting, leadership development, learning strategies & solutions, managed learning services, sales solutions, technology implementation & adoption solutions and technical services.. GP Strategies, headquartered in Columbia, Maryland (U.S.), provides services in over 80 countries, with ~4,340 employees worldwide.

GP Strategies services clients globally, across a broad range of industries including automotive, financial services and insurance, pharmaceutical, oil and gas, power, chemical, electronics and technology, manufacturing, software, retail, healthcare, education and food and beverage industries, as well as government agencies.

GP Strategies' product offerings are primarily captured in the following service lines:

GP Strategies will be a significant addition to LTG with a compelling margin enhancement opportunity:

Note: GP Strategies financials are based on US GAAP accounting standards.

Note: Adjusted EBITDA figures as reported by GP Strategies in 2018,2019 and 2020 10-K.

Note: Adjusted EBIT for GP Strategies based on adjusted EBITDA as reported, less amortisation (except amortisation of acquired intangibles), less non-cash compensation expense as restated in accordance with LTG's accounting principles and policies

Note: GP Strategies FY 2021E Figures based on the median of the consensus market analyst estimates as at 14 July 2021. 2021E Adj. EBIT not adjusted for amortisation of acquired intangibles and non-cash compensation expenses and therefore not comparable with historical figures

The LTG Board believes there is a compelling strategic rationale for the acquisition of GP Strategies:

The LTG Board believes there are operational & financial benefits combined with significant savings potential:

The Board believes that LTG's proposed integration plan can create significant value from the Acquisition:

· Near Term Priorities (2021) - Five phase timeline

o CFIUS period (July-October): Finalise transformation plan

o End of 2021: Introduce controls, implement priority internal changes and start renegotiating and rationalising all third party spend

o Early 2022: Completion of internal changes and continue renegotiation and rationalisation of all third party spend

o End of H1 2022: New ways of working to be fully embedded and supplier rationalisation to be completed

o H2 2022: Monitor, troubleshoot and enhance new ways of working and launch combined strategic offer

· Longer Term Priorities

o Full integration of GP Strategies including integration of back office functions and commencement of divesture of non-core businesses

Transaction Details

The Acquisition is for $20.85 per outstanding share of GP Strategies common stock (approximately $394 million in aggregate), payable in cash upon completion of the Acquisition. The Consideration will be part-funded by proceeds of the conditional underwritten Placing, with the balance being part-funded by up to c.$305 million incremental debt financing (of which $40m is to be repaid from GP Strategies' cash shortly after the Acquisition) and out of existing cash resources. Committed debt financing includes:

· a $265 million 4-year term loan (with potential of 1-year extension);

· a $40 million 6-months bridge facility to GP Strategies cash; and

· $50 million 4-year revolving credit facility (with potential 1-year extension).

The Acquisition is conditional upon, among other things:

Subject to the fulfilment of the above conditions, the Acquisition is expected to complete shortly after the satisfaction of the CFIUS condition, which is expected to take from 55 to 100 days from the date of signing. Completion of the Acquisition is therefore expected to occur in Q4 of 2021.

LTG has obtained irrevocable undertakings to vote in favour of the Acquisition from Sagaard, GP Strategies' largest shareholder, and some directors and officers, representing in total approximately 24 per cent. of GP Strategies' share capital.

GP Strategies has agreed to pay a fee of $12 million to LTG if the Merger Agreement is terminated in certain circumstances, including where (a) either (i) closing does not occur by December 31, 2021 (subject to extension as set forth in the Merger Agreement), and at such time, the GP Strategies stockholder approval has not been obtained; (ii) the GP Strategies stockholders do not approve the Acquisition; or (iii) where there has been a material breach of the Merger Agreement by GP Strategies and, in each case, GP Strategies has, prior to the date of such termination (or, in the case of clause (i), the date of the GP Strategies stockholder meeting), received an alternative acquisition proposal and completes a different sale transaction within 12 months thereafter; (b) the GP Strategies board withdraws its recommendation that GP Strategies stockholders approve the Acquisition, or (c) prior to receipt of the GP Strategies stockholder approval, the GP Strategies board terminates the Merger Agreement to enter into an alternative acquisition proposal that the GP Strategies board determines to be superior to the Acquisition.

LTG has agreed to pay certain fees and expenses to GP Strategies up to a maximum agreed amount (which does not exceed 1 per cent. of LTG's market capitalization as of 14 July 2021) if the Merger Agreement is terminated in certain circumstances, including because (a) the requisite CFIUS approval or HSR clearance has not been obtained, (b) GP Strategies terminates because the Placing Agreement has been terminated or because the Placing Shares are not admitted to trading by 2 August 2021 or (c) despite all conditions being satisfied, LTG refuses to close.

Acquisition Rationale

The Acquisition is in line with LTG's strategy to build an international leader in e-learning solutions through expanding their offering organically and through strategic partnerships and via acquisitions.

LTG's acquisition strategy places emphasis on broadening geographical reach (particularly in the United States and Asia), with a particular focus on developing presence in highly regulated sectors (e.g. pharmaceutical, energy and aviation).

The Acquisition will bring to the Group a leading global workforce transformation business with significant scale:

The Board believes the Acquisition, which is expected to be immediately and significantly earnings enhancing (based on expected completion in Q4 of 2021), is at an attractive valuation and provides access to a high growth market.

Funding of the Acquisition

The Consideration and transaction costs for the Acquisition are intended to be part-funded by a conditional underwritten placing of new ordinary shares (the "Placing") raising approximately £82 million, with the balance being part-funded by up to c.$305 million (c.£220 million1) in incremental debt facilities (of which $40 million is to be repaid from GP Strategies' cash shortly after completion of the Acquisition), with $265 million partly-amortising over 4 years with c. 60% repayable at maturity (subject to a 1-year extension option), and out of existing cash resources.

Note 1: Based on current USD / GBP exchange rate of 0.7210 as of 14 July 2021.

The Acquisition debt has been provided by a small group of strong international lenders, both existing and new, attracted by LTG's strategy and ambition. The lending group has also provided a $50m committed general corporate purposes revolving credit facility which is available for 4 years (subject to a 1-year extension option).

Details of the Placing, for which Goldman Sachs and Numis are acting as joint bookrunners and Berenberg is acting as lead manager, are included in a separate announcement released this morning.

RISK FACTORS

Conditions in Merger Agreement and Reverse Termination Fee

Completion of the Acquisition is conditional upon, amongst other things, the following:

if such conditions are not satisfied (or in certain circumstances, waived to the extent possible), the Merger Agreement can and would be terminated.

In relation to the conditions related to antitrust laws and CFIUS approvals, such consents and/or expiry of any waiting periods may take a longer time than expected to obtain, may not be granted and/or the relevant authorities may consider, as a condition to granting their approvals or confirmation, requiring disposals or restrictions on the conduct of LTG as enlarged by GP Strategies and its subsidiaries ("Enlarged Group") business. This could delay and/or prevent completion, reduce the expected benefits of the Acquisition or result in a material adverse effect on the business, results of operations, financial condition and prospects of the Enlarged Group.

Additionally, the Company has agreed to pay certain fees and expenses to GP Strategies up to a maximum agreed amount (which does not exceed 1 per cent. of LTG's market capitalization as of 14 July 2021) if the Merger Agreement is terminated in certain circumstances, including where:

If the Acquisition does not proceed to completion, LTG may experience a delay in the achievement of its strategic objectives and there may also be an adverse impact on the reputation and brand of the Company and, given market perceptions, a negative impact on the price of its ordinary shares, for example, as a result of negative media scrutiny arising in connection with the failure to complete.

Warranties, indemnities and undertakings in the Merger Agreement

The Merger Agreement contains customary warranties and representations given by GP Strategies in relation to GP Strategies and its subsidiaries in favour of LTG. The accuracy of the representations and warranties is a condition to completion of the Acquisition only to the extent any inaccuracy thereof constitutes a material adverse effect on GP Strategies. The representations and warranties do not survive completion and therefore no claim can be brought in relation to a breach of any representations or warranties following completion.

The Company has, through the due diligence procedures it deemed reasonable and appropriate, and in negotiating the terms of the Merger Agreement, taken steps to minimise the risk of a liability arising under these provisions. However, there can be no assurance that this due diligence exercise revealed or highlighted all relevant facts that may be necessary or helpful in evaluating the Acquisition and LTG may not be able to recover any losses which it could suffer following completion. Any losses due to a breach of any such warranties or representations and which therefore cannot be recovered under the Merger Agreement could have a material adverse effect on the Enlarged Group's financial condition and on its reputation and brand following completion.

Change of control

A number of GP Strategies' customer contracts include provisions that give the customer a right (but not the obligation) to terminate the contract upon a change of control of GP Strategies unless prior consent is obtained from the customer. While neither GP Strategies nor LTG has any reason to believe these arrangements will not continue following Completion, none of GP Strategies' customers was aware of the Acquisition prior to the date of this Announcement and their views have not, given confidentiality concerns, been sought. The Acquisition is an event giving rise to a change of control of GP Strategies and, accordingly, there is a risk that customers who enjoy such a right may seek to terminate their contract with GP Strategies either immediately or upon shorter notice than would otherwise be required had the change of control event not occurred. If any such contract is terminated, GP Strategies would cease to derive revenues from the customer contract, which would reduce the net benefits of the Acquisition and impact the Enlarged Group's business and financial position. To mitigate this risk, GP Strategies will be expected to seek consents to the change of control from affected customers prior to completion, but there can be no assurance it will be successful in securing these consents.

Notwithstanding LTG's and GP Strategies' longstanding relationships with many of their respective material customers, uncertainty about the effects of the Acquisition on the future business relationships with those customers, may have a material adverse effect on the business, prospects, financial condition and/or results of operations of the LTG Group, GP Strategies and, following completion, the Enlarged Group.

Realisation of synergies or benefits risks

Acquisitions are, by their nature, inherently risky undertakings and, while strategic investments such as acquisitions present opportunities for accelerated growth and LTG has successfully undertaken and implemented a number of acquisitions previously, no assurance can be given that the Acquisition will be successful.

The Enlarged Group may fail to achieve certain, or all of, the anticipated synergies or other benefits that LTG expects to realise as a result of the Acquisition, they may be materially lower than have been estimated or it may take longer or cost more than expected to realise those synergies or other benefits. If the anticipated synergies or other benefits are not achieved, or take longer than expected to be realised, this could hinder LTG's strategic growth plan and have a material adverse effect on the business, prospects, financial condition and/or results of operations of the Enlarged Group.

Pre-Completion changes in GP Strategies' business

The Merger Agreement contains very limited rights for LTG to terminate it prior to completion. During the period from the signing of the Merger Agreement to completion, events or developments, including changes in the trading, operations or outlook of GP Strategies, or external market factors may occur, which could make the terms of the Acquisition less attractive for the Company. In most cases, LTG would be obliged to complete the Acquisition notwithstanding such events or developments. If such an event occurs and completion proceeds, the commercial benefits of the Acquisition identified by LTG may cease to exist or may be materially reduced, and the Enlarged Group may be unable to integrate GP Strategies and its subsidiaries more widely or it may no longer be commercially beneficial to so do. Any of the above could have a detrimental effect on the Enlarged Group's business, results of operations, financial condition and/or prospects.

Integration risks

The success of the Acquisition will depend, in part, on the ability of the Directors and the Enlarged Group's management to successfully integrate GP Strategies' operations, technologies and personnel into those of the LTG Group's existing business. The LTG Group's management team have extensive experience of implementing an integration plan of the scale proposed but, if the Enlarged Group fails to successfully integrate the two businesses, or such integration is delayed or costs more than expected, this could negatively impact the business, prospects, financial condition and/or results of operations of the Enlarged Group. The integration of these operations may also result in unanticipated operational problems, expenses and other liabilities, and significant diversion of management's attention and time.

The challenges involved in this integration are anticipated to include the following:

Integration of the cultures and philosophies of the LTG Group and GP Strategies is also likely to be made more challenging to the extent that the current operational disruption resulting from the COVID-19 pandemic and the restrictions put in place by governments in the United States, the UK and elsewhere are continuing at the time of completion, particularly if employees are still required to work from home.

There can be no assurances that the Enlarged Group will be successful in meeting all of these challenges.

Financial Reporting Controls

In its annual reports for the years ended 31 December 2018 and 2019, GP Strategies disclosed material weaknesses in its internal controls arising from the implementation of a new ERP system. These weaknesses may have resulted in certain revenue recognition issues in the financial results for the years ended 31 December 2018 and 2019.

Following the announcement of GP Strategies' FY 2019 financial results, the United States Securities and Exchange Commission ("SEC") commenced an investigation of the Company's revenue recognition related to certain fixed price contracts. To date, the SEC's investigation, which is on-going, has been related to events occurring between 1 January 2018 to 30 June 2020. LTG understands that the material weaknesses identified in the report for the years ended 31 December 2018 and 2019 have been resolved and did not carry over into the year ended 31 December 2020. But for the foregoing material weaknesses, GP Strategies received a clean audit opinion with respect to each of the years ended 31 December 2018 and 2019. For the year ended 31 December 2020, GP Strategies received a clean audit opinion without qualification.

LTG understands that GP Strategies has fully cooperated with the SEC, including the provision of information and analysis related to the areas of focus. There is no certainty when the SEC investigation into the financial reporting for the historical periods will be completed or to its the ultimate outcome, including whether any action will be brought or the potential imposition of penalties. Based on LTG's understanding of the matter, the Board of LTG do not believe that any outcome of this SEC investigation will have a significant impact on the strategic rationale and potential benefits of the proposed Acquisition.

LTG and its advisers have reviewed the work undertaken by GP Strategies' advisers on the historical material weaknesses in its internal controls related to its ERP system. LTG is not aware of any material weaknesses or areas for concern. Based on its extensive experiences in previous acquisitions, LTG is confident that GP Strategies and the financial reporting processes related to its business can be successfully integrated into LTG following completion of the Acquisition.

The Placing is not conditional on completion and if completion does not occur, the net proceeds of the Placing will be retained by the Company

The Placing is not conditional on completion of the Acquisition and may therefore complete while the Acquisition does not. In such circumstances, the Directors' current intention is that the net proceeds of the Placing will be invested by the Company on a short term basis in high quality, highly liquid assets and/or in pursuing other acquisition opportunities.

If LTG is unable to identify uses for the net proceeds of the Placing which the Directors consider to be appropriate then the Company may seek to return some of the net proceeds of the Placing to shareholders, at which point the Directors will evaluate how best, in their view, to execute such return of capital. However, there can be no guarantee that such proceeds will be returned to shareholders in a timely manner or at all. Additionally, the Company has incurred and will incur costs and expenses in connection with the Placing, the Debt Financing and the Acquisition, including the potential payment of the reverse termination fee, which will diminish the available proceeds to return to shareholders.