Mercia Asset Regulatory News (MERC)

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

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (596/2014/EU) ("MAR"). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN MAR) WERE TAKEN IN RESPECT OF CERTAIN OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION, AS PERMITTED BY MAR. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

3 December 2019

Mercia Asset Management PLC

("Mercia" or the "Company")

Proposed AcquisitionandAccelerated Bookbuild to raise £30.0million 

Mercia Asset Management PLC (AIM: MERC), the proactive, regionally focused specialist asset manager, today announces that it has entered into a conditional agreement to acquire the venture capital trust ("VCT") fund management business of NVM Private Equity LLP ("NVM" and the "NVM VCT Business") for a total maximum consideration of up to £25.0million, comprising a combination of cash and new ordinary shares in the capital of Mercia ("Ordinary Shares" and the "Acquisition").

Mercia also announces today its intention to conduct an accelerated bookbuild (the "Bookbuild") to raise gross proceeds of £30.0million (the "Placing"), at a price of 25 pence per new ordinary share (the "Placing Price") to fund the initial cash consideration and to provide further balance sheet growth capital.

Earlier today, Mercia published its interim results for the six months ended 30 September 2019. A copy of the Company's results is available on Mercia's website found at: https://www.mercia.co.uk/.

Acquisition Highlights:

·; Proposed acquisition of VCT fund management business from NVM, relating to Northern Venture Trust PLC, Northern 2 PLC VCT and Northern 3 PLC VCT (together the "NVM VCT Funds"), which consist of c.60 portfolio companies; with 17 listed, 27 private venture and 16 private equity.

·; NVM VCT Funds represent approximately £270million in assets under management ("AuM"), which would increase Mercia's total AuM by over 50% to approximately £770million.

·; Total Acquisition consideration of up to £25.0million, comprising initial consideration of £16.6million (made up of £12.4million in cash; and £4.2million in Mercia shares) with a three-year deferred contingent consideration of up to £8.4million, payable over the next three years, subject to certain conditions being satisfied (such deferred consideration comprising £6.3million in cash and £2.1million in shares).

o Implied multiples assume maximum consideration of 3.5x revenue1 (£7.2million) & 6.25x EBITDA / Net Income1 (£4.0million).

·; Expected to be earnings enhancing and achieves trading profitability (at the Net Income2 level in the first full year).

·; Increases the Group's liquidity to deploy into pre-qualified high-growth SMEs via its third-party FuM.

·; Expands universe of direct investment opportunities for Mercia.

·; Accelerated scale, complementary deal origination, sales distribution and investment team.

Placing Highlights:

·; Proposed Placing to raise gross proceeds of £30.0million.

·; Placing Price of 25 pence per Placing Share.

·; The Placing Price represents a discount of 21.9 per cent. to the closing price of 32 pence per share on 2 December 2019.

·; Approximately £15million of the gross proceeds of the Placing will be used to fund the initial consideration and related transaction expenses.

·; The remaining proceeds will be used for further balance sheet growth capital, enabling the Company to continue to invest the existing direct investment portfolio as well as funding new direct investment opportunities that the Board expect to deliver attractive returns in the future.

·; The Placing is being conducted via an accelerated book building process which will commence immediately following the publication of this Announcement in accordance with the terms and conditions set out in the Appendix.

·; The Placing is being conducted by Canaccord Genuity Limited ("Canaccord Genuity") as Nomad, Joint Bookrunner and Joint Broker, and Nplus1 Singer Advisory LLP ("N+1 Singer") as Joint Bookrunner and Joint Broker (together, the "Joint Bookrunners").

1. Assuming £25million of consideration for NVM VCTs and proforma 12 months to 31 March 2019 results for the business to be acquired.

2. Net Income/(Expenses) represents profit before realisations, fair value movements, share-based payments, intangibles, exceptional items, interest and taxation.

Mark Payton, Chief Executive Officer of Mercia Asset Management PLC, said:

"We are delighted to announce the conditional acquisition of the NVM VCT business, which is highly complementary to Mercia's existing activities and will cement our position as a leading provider of complete, connected capital to SMEs in the UK regions.

By the end of FY2022, we have said that we will seek to grow AuM to c.£1billion, move the Group to a profitable trading position ahead of balance sheet fair value movements and realised gains, and evergreen the balance sheet. The acquisition of the NVM VCT fund management contracts with a high quality team also transferring to Mercia, together with a promising portfolio of VCT investee companies greatly accelerates this strategic intent.

This transaction moves Mercia to trading profitability as a Group for its next full financial year, grows AuM to c.£0.8billion and provides sufficient funds to evergreen its balance sheet. The Group's liquidity across its balance sheet and third-party funds immediately following this transaction will be c.£250million, ensuring it is well placed to continue to support existing and new portfolio companies through the economic cycles. Mercia is making significant progress and our differentiated, scalable asset management business is well-positioned to generate significant near to medium-term value for our shareholders and stakeholders alike."

Analyst and investor briefing:

Management will be hosting a live audio webcast and Q&A at 3.00 p.m. on Tuesday 3 December 2019. To participate please register using the following link and dial-in details.

Audio webcast:

https://webcasting.buchanan.uk.com/broadcast/5de4f42dcdd378185e2a3a89

Conference call:

UK Toll-Free: 0800 358 9473

UK: +44 3333 000 804

PIN: 14639475#

A copy of the results presentation is available on the Company's website: www.mercia.co.uk and a recording of the audio webcast will be made available later today.

For further information, please contact:

Market Abuse Regulation

The information contained within this Announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation ("MAR"). Upon the publication of this Announcement via a regulatory information service, this inside information is now considered to be in the public domain.

In addition, market soundings (as defined in MAR) were taken in respect of the Placing and the Acquisition with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this Announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

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

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

The person responsible for arranging the release of this information is Mark Payton, Chief Executive Officer of the Company.

About Mercia Asset Management PLC:

Mercia is a proactive, specialist asset manager focused on supporting regional SMEs to achieve their growth aspirations. Mercia provides capital across its four asset classes of balance sheet, venture, private equity and debt capital; the Group's 'Complete Capital Solution'. The Group initially nurtures businesses via its third-party funds under management, then over time Mercia can provide further funding to the most promising companies, by deploying direct investment follow-on capital from its own balance sheet.

The Group has a strong UK regional footprint through its eight offices, 19 university partnerships and extensive personal networks, providing it with access to high-quality deal flow. Mercia has c.£500million of assets under management and, since its IPO in December 2014, has invested c.£90million across its direct investment portfolio.

Mercia Asset Management PLC is quoted on AIM with the epic "MERC".

ADDITIONAL INFORMATION

1. Expected Timetable

The expected timetable relating to the Acquisition and the Placing is set out below.

EXPECTED TIMETABLE

Notes:

1. Certain of the events in the above timetable are conditional upon, amongst other things, the passing of the Resolutions at the General Meeting.

2. If any of the events contained in the indicative timetable should change, the revised times and dates will be notified by means of an announcement through a Regulatory Information Service.

3. Different deadlines and procedures for applications may apply in certain cases. For example, if you hold your Ordinary Shares through a CREST member or other nominee, that person may set an earlier date for application and payment than the dates noted above.

2. Background on the Company

Mercia is a proactive, specialist asset manager providing capital to high-growth SMEs, predominantly in the Midlands, the North of England and Scotland, regions with a large, growing and under-served need for capital. Mercia offers high-growth regional SMEs a complete capital solution including seed and venture capital, private equity, debt and its proprietary balance sheet capital, as well as ongoing management support.

The Company was founded in 2014 (although its origins go back to 1982) and was admitted to trading on AIM in December 2014. Today, Mercia has c.£500million in AuM generating £7.3million contracted revenues in 2019. Mercia has eight offices across the UK regions, 85 employees, including a highly experienced investment team, and a network of 19 university partnerships which together generate strong deal flow, as reflected in c.2,800 investment requests received during the past 12 months.

Mercia manages third-party funds which have a combined portfolio of c.323 companies and invests directly into selected businesses derived from these funds. As at 30 September 2019, the Company had third-party funds under management of c.£361million, on which it earns a blend of fund management fees, initial management fees, portfolio directors' fees, business services income and periodic carried interest. In addition, the Company had a diversified portfolio of 23 direct investments across a number of technology sectors at different stages of maturity. The direct investment portfolio had a total value of £102.0million as at 30 September 2019. The Company earns initial management fees and recurring portfolio directors' fees on its portfolio of direct investments. All current direct investments have emanated from its third-party managed funds.

3. Proposed Acquisition of the NVM VCT Business

The Company has conditionally agreed to acquire the NVM VCT Business, with the proposed purchase consisting primarily of the management contracts related to the NVM VCT Funds from NVM for an aggregate maximum consideration of up to £25.0million (including, subject to certain deferred conditions being satisfied, up to £8.4million of deferred consideration), comprised of a combination of cash and new Ordinary Shares, pursuant to the Asset Purchase Agreement. Further details outlining the terms of the proposed Acquisition are set out in paragraph 6 below.

NVM is an established investment firm with a presence across the UK, targeting management buy-outs and growth investment in businesses led by high quality management teams. NVM manages more than £430.0million of funds through the NVM VCT Funds as well as through a £142.0million private equity fund.

The NVM VCT Funds have c.£270million AUM (as at 30 September 2019), current liquidity of £83.0million and a combined portfolio of c.60 companies of which 17 are listed, 27 are private venture and 16 are private equity. The holding value of the combined portfolio is £92.0million. The NVM VCT Funds have delivered a 2.2x NAV return over a 10 year period.

The NVM VCT Funds have a strong fundraising track record and, as announced by each NVM VCT Fund on 10 October 2019, the NVM VCT Funds have stated their intention to raise up to £40.0million of new funds during the first quarter of 2020 (calendar year). Further information relating to the NVM VCT Funds can be found at: https://nvm.co.uk/investor-area/vcts/.

The proposed Acquisition will be primarily effected through the novation of the fund management agreement for each of the three NVM VCT Funds (the "VCT Management Agreements") to MFM, the Company's wholly owned and FCA regulated subsidiary, pursuant to the Novation Agreements and the transfer of seven professionals responsible for making and managing the investments. The two venture focused NVM partners will also join Mercia on Completion. The Acquisition excludes, inter alia, NVM's cash and property, as well as back and middle office staff. In the financial year ended 31 March 2019, NVM generated £7.2million in revenues and c.£4million EBITDA from the VCT Management Agreements.

The Company has developed a detailed integration plan to provide continuity and realise the benefits from the Acquisition.

4. Reasons for the proposed Placing and Acquisition

The Directors believe that the proposed Placing will enable the Company to significantly progress its strategy by funding the Initial Consideration for the Acquisition and by strengthening the Company's balance sheet, allowing it to continue to be able to invest in its existing portfolio companies to support their growth and to execute new direct investment opportunities.

The net proceeds of the Placing will be used to fund the cash component of the Initial Consideration and related transaction expenses, in addition to providing further balance sheet growth capital in order to enable the Company to continue to invest in selected companies identified as "emerging stars" which sit within its third-party managed funds as well as funding new direct investment opportunities that are expected to deliver attractive returns in the future.

The Company currently intends to use the net proceeds of the Placing as outlined below:

·; Acquisition: c.£15million to fund the Initial Cash Consideration and related expenses for the Acquisition and the Placing). The Company expects that the Deferred Consideration (as defined below) payable in cash in relation to the Acquisition will, if the performance criteria are met, be funded by the Group's future expected cash flows;

·; Existing direct investments: up to c.£10million to support the growth and development of Mercia's existing direct investments in FY2021; and

·; New direct investments: up to c.£5million to make new direct investments from the Group's managed funds portfolio in FY2021.

The Board currently expects that the net proceeds of the Placing will fully fund Mercia's investment pipeline and "evergreen" the balance sheet with future investments funded from periodic portfolio cash realisations.

Rationale for the Acquisition

The Directors believe that the Acquisition will significantly enhance the scale, financial profile and future financial returns of the Group, whilst strengthening its ability to raise and win new fund mandates in order to continue to grow its fund management business. The Acquisition is expected to be earnings enhancing within the first year of ownership (excluding the impact from the amortisation of intangibles related to the Acquisition) and represents an important strategic milestone in the Group's ambitions, with the key points underlying the rationale for the Acquisition outlined below:

·; the Enlarged Group will become a leading provider of seed and growth capital within Mercia's regional target venture market;

·; the Acquisition will immediately increase the Group's AuM by more than 50 per cent. through the addition of c.£270million AuM via NVM's managed funds, with the Enlarged Group's total AuM expected to be c.£770million on Completion;

·; the Acquisition moves Mercia significantly closer to achieving its strategic milestone of managing £1.0billion in AuM;

·; the Enlarged Group is expected to achieve operating profitability (Net Income before realisations, fair value movements, share-based payments and amortisation) in the first year post Completion;

·; the Acquisition increases Mercia's turnover from £10.7million to £17.9million and Net Income from £(1.4million) to £2.6million on a pro forma FY2019 basis;

·; c.70 per cent. of the Enlarged Group's fund management contracted revenue is expected to be recurring in nature in the first year post Completion;

·; the Acquisition expands the Enlarged Group's liquidity to deploy into high growth regional SMEs via its third-party managed funds;

·; the Acquisition provides a broader origination network with the NVM VCT Funds' complementary focus on the Midlands, the North of England and Scotland;

·; the Acquisition expands the universe of direct investment opportunities for the Company through the NVM VCT Funds' underlying portfolios;

·; the Acquisition provides greater awareness of Mercia by the NVM VCT Funds' complementary distribution network and may potentially expand the Company's EIS investor base; and

·; the Acquisition brings additional skilled investment talent into Mercia's business.

Deployment of funds into existing balance sheet investments

Mercia is active in each of the businesses in which it invests, taking a board position in each equity investment to ensure that it provides support throughout the investee company's journey. It also stays actively engaged with each of the businesses to which it lends. This portfolio support also includes input from Mercia's platform, an internal team of talent resourcing, corporate advisory, legal and research expertise. We believe these value-added services help investee companies to accelerate their growth prospects.

At the time of the publication of this Announcement, Mercia has a direct investment portfolio consisting of 23 high growth SME companies and has invested in 17 portfolio companies during the 2019 financial year to date. As these businesses mature, Mercia aims to maintain material equity stakes in order to maximise returns from its early capital investment and management support. As part of the proposed Placing, the Company is seeking to raise proceeds from the Placing which will enable it to continue to invest in the most promising businesses both emerging from its managed funds to accelerate and support their growth as well as continuing to support companies in the existing direct portfolio.

The Directors have identified specific investment requirements within its existing portfolio and currently expects to allocate c.£10million to eight existing direct investments in FY2021.

Funding new direct investments

Mercia has a diverse origination network consisting of 19 university partnerships and a broad professional network for sourcing investment opportunities, which will be further strengthened and broadened by the proposed acquisition of the NVM VCT Business. The proposed net proceeds from the Placing will enable the Company to continue to make new direct investments in the most promising businesses emerging from its managed funds in line with its investment model. The Directors have identified a pipeline of potential new direct investments and currently expect to allocate c.£5million into five new direct investments identified from a pool of c.80 third-party investment candidates in its third-party funds.

5. Current trading and outlook

The Group announced its interim results for the six months ended 30 September 2019 on 3 December 2019. During the first six months of the year, the Group delivered financial performance in line with the Board's expectations, with continued good overall progress in its direct investment portfolio. The Group reported revenues of £5.5million (2018: £5.3million) in the first half year, with this mainly generated from its fund management activities. The Group reported net fair value movements of £3.2million (2018: £2.6million) and NAV per share of 42.3p (2018: 41.3p). The Group's interim results can be found on its website: https://www.mercia.co.uk/.

Since the interim period end, positive trading has continued into the second half of the financial year, underpinned by a good performance in the Company's third-party fund management business and continued overall progress from the Company's portfolio of direct investments, in line with the Board's expectations.

By completing the proposed Acquisition and Placing, the Company expects to further improve the quality of earnings with higher recurring revenues and achieve Net Income profitability in the first full year of ownership. The Company now aspires to achieve its stated target of c.£1billion in AuM within the next two years.

6. Key terms of the Acquisition

The Asset Purchase Agreement

NVM, MFM and the Company entered into the Asset Purchase Agreement on 3 December 2019 pursuant to which NVM has agreed to sell the NVM VCT Business to MFM for an aggregate maximum consideration of up to £25.0million (the "Consideration"). Under the Asset Purchase Agreement, the Company is acting as guarantor in respect of the Consideration.

The Consideration is comprised of: (i) an initial consideration of £12.4million in cash and MFM procuring the issue of 16,800,000 Ordinary Shares to NVM (£4.2million at the Placing Price) (the "Initial Consideration Shares" and together the "Initial Consideration"), payable on Completion; and (ii) a deferred consideration of up to £6.3million in cash, payable in three equal installments on the first, second and third anniversaries of Completion, provided no termination notice has been served by any of the VCTs before each respective anniversary payment date and, subject to certain other deferred conditions being satisfied at the third anniversary of Completion (see below), MFM procuring the issue of up to £2.1million worth of Ordinary Shares to NVM to be determined based on the average of the daily closing mid-market price for an Ordinary Share for each of the five days immediately preceding the date of issue (the "Deferred Consideration Shares" and together the "Deferred Consideration").

The Company will allot and issue 50 per cent. of the Deferred Consideration Shares if the Company receives at least £16.0million of fees from the VCT Management Agreements in the three years after Completion. The remaining 50 per cent. of the Deferred Consideration Shares shall be allotted and issued if, during the same period, the VCTs issue at least £60.0million worth of new shares to investors.

If there is any adjustment event (including the completion of any offer or scheme where one of the VCTs is acquired by another venture capital trust or other vehicle (excluding any other VCT) that is being managed or advised by the Group) during the three years following Completion, the parties have agreed that the Deferred Consideration shall be adjusted so that neither party shall be prejudiced regarding either calculation or payment.

The Asset Purchase Agreement is conditional, inter alia, on:

·; the Placing Agreement becoming unconditional in accordance with its terms and not having been terminated

·; the passing of Resolutions 1 and 2 at the General Meeting and Admission;

·; no termination notice of any VCT Management Agreement having been received or served;

·; the Novation Agreements becoming unconditional in accordance with their terms and not having been terminated;

·; the Transitional Services Agreement and the Co-operation Agreement becoming unconditional in accordance with their respective terms and not having been terminated;

·; no material adverse change to the NVM VCT Business; and

·; no litigation having been commenced or threatened in relation to the NVM VCT Business.

Under the Asset Purchase Agreement, NVM has agreed, subject to certain exceptions (including with the consent of the Company), to a lock-in period of 18 months following the date of issue of the Initial Consideration Shares and 6 months following the date of issue of the Deferred Consideration Shares and an orderly market period of 12 months following the expiry of both lock-in periods.

The Asset Purchase Agreement constitutes a relevant transfer for the purposes of TUPE and accordingly, up to seven employees of NVM will be transferred to the Group with effect from Completion. In addition, Charles Winward and Tim Levett, partners at NVM, have entered into a service agreement with MFM and a consultancy agreement with the Company respectively and both of which will come into effect on Completion.

The Asset Purchase Agreement also includes non-compete covenants on NVM for a period of three years following Completion.

Consideration Shares

The issue of the Consideration Shares is conditional, inter alia, on the approval of Resolutions 1 and 2 at the General Meeting of the Company which is expected to be held at 10.00 a.m. on 20 December 2019. It is anticipated that the Initial Consideration Shares will be admitted to trading on AIM by no later than 8.00 a.m. on 30 December 2019.

The Consideration Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares including the right to receive all dividends and other distributions declared, made or paid after their date of issue.

Transitional Services Agreement

NVM and MFM entered into the Transitional Services Agreement on 3 December 2019 pursuant to which NVM has, following Completion, agreed to provide certain back office services to MFM on a transitional basis in consideration for a fixed annual fee. The Transitional Services Agreement is terminable upon either party giving not less than six months' notice, such notice not to be given any earlier than 30 September 2021 (or earlier in certain circumstances).

Co-operation Agreement

MFM and NVM entered into the Co-operation Agreement on 3 December 2019 pursuant to which MFM has, following Completion, appointed NVM to provide certain portfolio management and other services in respect of certain NVM VCT Funds' investee companies in consideration for a fixed annual fee. The Co-operation Agreement will terminate, save in respect of certain assets (which NVM will continue to jointly manage), on 31 March 2022 (or earlier in certain circumstances).

7. Details of the Placing

The Company is seeking to raise £30.0million (before expenses) through the placing of 120,000,000 Placing Shares. The Placing Price of 25 pence per Placing Share represents a discount of 21.9 per cent. to the Closing Price of 32 pence on 2 December 2019 (being the last practical date prior to the publication of this Announcement).

Admission of the Placing Shares is expected on or around 8.00 a.m. on 23 December 2019 (or such later date as the Company and the Joint Bookrunners may agree, being no later than 31 December 2019) ("Admission").

8. Placing Agreement

Pursuant to the terms of the Placing Agreement, Canaccord Genuity and N+1 Singer, as agents for the Company, each conditionally agree to use their reasonable endeavours to place the Placing Shares on a non-underwritten basis at the Placing Price.

The Placing Agreement contains certain warranties from the Company in favour of Canaccord Genuity and N+1 Singer in relation to, inter alia, certain matters relating to the Company and its business. In addition, the Company has agreed to indemnify Canaccord Genuity and N+1 Singer in relation to certain liabilities that either may incur in respect of the Placing. Canaccord Genuity and N+1 Singer each has the right to terminate the Placing Agreement in certain circumstances prior to Admission including, without limitation, in the event of a material breach of the Company to comply in any material respect with its obligations under the Placing Agreement, the occurrence of a force majeure event or a material adverse change in the financial condition of the Group. The Placing Agreement is also subject to various conditions including the Asset Purchase Agreement not having been terminated or lapsed prior to Admission.

The Placing Shares will be admitted to trading on AIM before completion of the Acquisition and the Asset Purchase Agreement will not be unconditional as at the date of Admission. If, following such time but before completion of the Acquisition, there is a material breach of warranty under the Asset Purchase Agreement by NVM or one or more of the above conditions are not satisfied (or waived), the Company will have the right to terminate the Asset Purchase Agreement and, if that were the case, the Acquisition may not go ahead, including in circumstances where the Placing has completed. If the Asset Purchase Agreement is terminated, the Company, in consultation with the Joint Bookrunners, will formulate proposals to be put to Shareholders as to whether some or all of the net proceeds of the Placing should be returned to Shareholders together with the timings and structure of any such return.

The Placing Agreement provides, inter alia, for payment by the Company to Canaccord Genuity and N+1 Singer commissions based on the number of Placing Shares placed by Canaccord Genuity and N+1 Singer multiplied by the Placing Price.

The Company will bear all other expenses of, and incidental to, the Placing including a corporate finance fee payable to Canaccord Genuity, the fees of the London Stock Exchange, printing costs, registrar's fees, all legal and accounting fees of the Company, the legal fees of Canaccord Genuity and N+1 Singer in relation to the Placing and all stamp duty and other taxes and duties payable.

RISK FACTORS

Shareholders should be aware that an investment in the Company is highly speculative and involves a high degree of risk. Before making any investment decision, prospective investors should carefully consider all the information contained in this announcement including, in particular, the risk factors described below, which are not presented in any order of priority and may not be exhaustive.

The following risk factors are all those known by the Directors which are considered to be material in their opinion. Additional risks and uncertainties not currently known to the Directors, or that the Directors currently deem immaterial, may also have an adverse effect on the Company's business, financial condition and results of operations.

References to the Company are also deemed to include, where appropriate, each member of the Group.

General Risks

An investment in the Company is only suitable for investors capable of evaluating the risks and merits of such investment and who have sufficient resources to bear any loss that may result from the investment. A prospective investor should consider with care whether an investment in the Company is suitable for them in the light of their personal circumstances and the financial resources available to them. The investment opportunity offered in this announcement and the document may not be suitable for all recipients of this announcement. Investors are therefore strongly recommended to consult an investment adviser authorised under FSMA, or such other similar body in their jurisdiction, who specialises in advising on investments of this nature before making their decision to invest.

Investment in the Company should not be regarded as short term in nature. There can be no guarantee that any appreciation in the value of the Company's investments will occur or that the commercial objectives of the Company will be achieved. Investors may not get back the full amount initially invested.

The price of shares and the income derived from them can go down as well as up. Past performance is not necessarily a guide to the future.

Risks relating to the Group

The departure of some or all of the Executive Directors and other key personnel may significantly affect prospects

The Company depends on the diligence, skill, judgement and business contacts of its Executive Directors and other key personnel and the information and deal flow they generate during the normal course of their activities. The Company's future success depends on the continued service of the existing individuals and its ability to strategically recruit, retain and motivate new talented personnel. However, the Company may not be successful in its efforts to recruit, retain and motivate the required personnel as the market for qualified successful investment professionals is extremely competitive. In the event of the departure of one or more of the Executive Directors or other key personnel, there is no guarantee that the Company would be able to recruit a suitable replacement or that any delay in doing so would not adversely affect the performance of the Group.

MFM and/or Enterprise Ventures may cease to be authorised by the FCA

MFM is authorised and regulated by the FCA as a small authorised UK AIFM and will, following Completion act as UK AIFM to two of the three NVM VCT Funds (the third being self-managed). Enterprise Ventures, which is a wholly-owned subsidiary of the Company, is also authorised and regulated by the FCA as a small authorised UK AIFM and manage the Group's third-party funds. Should MFM or Enterprise Ventures cease to be authorised and regulated by the FCA as a small authorised UK AIFM then each would no longer be authorised to act as the investment manager of the respective funds they manage. If that was to occur, the Group would need to appoint a replacement investment manager and could potentially lose one of its revenue streams which would adversely affect the business, results of operations or financial condition of the Group.

The Group generates limited revenue and there is no guarantee of a return on exit of investments

The ability of the Company to exit its position within each direct investment depends in part on the market's appetite for investments in scientific and technology companies with often a limited trading history, as well as valuations in the market sectors in which its businesses participate. As such, there can be no guarantee that the investment made to date and which the Company expects to be made going forward will produce returns. Returns which are lower than expected, or non-existent, could have a material adverse effect on the business, financial condition, results of operations and prospects of the Group.

The market's demand for investment in early stage companies may impact the Company's ability to realise equity returns

Many of the Company's balance sheet investments will have funding requirements in the future. The success of these investments may be influenced by the market's appetite for investment in early stage companies.

Changes in legislation and policy may impact the resources and technology available to the Group

There may be changes in English law which impact the operation of the Group. The potential for change may be heightened by a change in government following the general election scheduled for 12 December 2019. A change in legislation or policy (including any changes to or removal of VCT or EIS tax relief) may: (i) adversely affect the monies and resources available to the Group and/or the funds it manages; (ii) affect their entitlement to enter into funding agreements under which the businesses would have a role in exploiting the intellectual property; or (iii) affect the right of the universities and research institutions to transfer intellectual property to, or to share revenues with, Mercia's businesses. Changes in government policy or legislation (including changes to tax legislation) or other terms upon which the academics are incentivised could make it commercially unattractive for research academics to participate in the commercialisation of intellectual property which they create.

Investee companies may fail, lose value or fail to generate the anticipated level of returns

Due to the early stage nature of the Company's activities, any of the Company's businesses, even those which are in more mature stages of development or in which the Company has invested significant capital, may fail or not succeed as anticipated, resulting in an impairment of the Group's value and/or profitability. Where a project has failed to deliver sufficient additional proof points and no longer supports on-going development and commercialisation activity and cannot be successfully redirected to an alternative commercial path, the Company will look to terminate the investment early.

United Kingdom exit from the European Union

The determination by the United Kingdom to exit the European Union pursuant to Article 50 of the Treaty of Lisbon ("Brexit"), means the United Kingdom could leave the European Union no later than 31 January 2020. Brexit could have a significant impact on the Company. The extent of the impact would depend in part on the nature of the arrangements that are put in place between the UK and the EU following Brexit and the extent to which the UK continues to apply laws that are based on EU legislation. In addition, the macroeconomic effect of Brexit on the Company's business is unknown. As such, it is not possible to state the impact that Brexit would have on the Company.

Risks relating to the Acquisition

The Asset Purchase Agreement is conditional on the Placing which is subject to Shareholder approval

The Asset Purchase Agreement is conditional upon the Placing which requires Shareholders approving Resolutions 1 and 2. There can be no assurance that such approval will be obtained. The Board considers that the Asset Purchase Agreement is in the best interests of the Company and Shareholders as a whole. If the Asset Purchase Agreement does not become effective due to Shareholder approval not being obtained, the Acquisition will not go ahead.

Following Admission, the Company may have a right to terminate the Asset Purchase Agreement

The Placing Shares will be admitted to trading on AIM before completion of the Acquisition and the Asset Purchase Agreement will not be unconditional as at the date of such Admission. If, following such time but before completion of the Acquisition, there is a material breach of warranty under the Asset Purchase Agreement by the Seller or one or more of the conditions therein are not satisfied (or waived), the Company will have the right to terminate the Asset Purchase Agreement and, if that were the case, the Acquisition may not go ahead, including in circumstances where the Placing has completed. If the Asset Purchase Agreement is terminated, the Company, in consultation with the Joint Bookrunners, will formulate proposals to be put to Shareholders as to whether some or all of the net proceeds of the Placing should be returned to Shareholders together with the timings and structure of any such return.

The boards of the NVM VCT Funds may terminate the VCT Management Agreements

The VCT Management Agreements are subject to a 12 months' notice period. As part of the Acquisition, the boards of each NVM VCT Fund have consented to novate the VCT Management Agreements to MFM. However, no guarantee can be given that one or more of the boards of each NVM VCT Fund will not in the future serve notice which could then have a material adverse impact on the Group.

The NVM VCT Funds may be unsuccessful in raising new funds

Each NVM VCT Fund's business model involves the periodic raising of funds from shareholders to facilitate investments. The NVM VCT Funds have each announced the intention to raise up to £40 million in total in the first quarter of 2020. The NVM VCT Funds may be unsuccessful in this or future fundraisings which would have an adverse effect on the ongoing value of the NVM VCT Funds and revenue earned by the Group under the VCT Management Agreements.

Risks relating to the Ordinary Shares

Suitability

An investment in Ordinary Shares may not be suitable for all recipients of this announcement, and is only appropriate for investors capable of evaluating the risks (including the risk of capital loss) and merits of such investment and who have sufficient resources to sustain a total loss of their investment. An investment in Ordinary Shares should be seen as long-term in nature and complementary to investments in a range of other financial assets and should only constitute part of a diversified investment portfolio. Potential investors should consider carefully whether investment in the New Ordinary Shares is suitable for them in the light of the information in this announcement and their personal circumstances. Before making any final decision, potential investors in any doubt should consult with an investment adviser authorised under FSMA who specialises in advising on investments of this nature.

Volatility in price of Ordinary Shares

The Placing Price may not be indicative of the market price for the New Ordinary Shares following Admission. The market price of the New Ordinary Shares could be volatile and subject to significant fluctuations due to a variety of factors, including changes in sentiment in the market regarding the Company, the sector or equities generally, any regulatory changes affecting the Group's operations, variations in the Group's operating results and/or business developments of the Group and/or its competitors, the operating and share price performance of other companies in the industries and markets in which the Group operates, news reports relating to trends in the Group's markets or the wider economy and the publication of research analysts' reports regarding the Company or the sector generally.

Liquidity of the Ordinary Shares and AIM generally

An investment in the Ordinary Shares is highly speculative and subject to a high degree of risk. Application will be made for the New Ordinary Shares to be traded on AIM. AIM is a market designed primarily for emerging or smaller companies. The rules of this market are less demanding than those of the Official List. Investments in shares traded on AIM carry a higher degree of risk than investments in shares quoted on the Official List. Neither the London Stock Exchange nor the FCA have examined this announcement for the purposes of Admission or otherwise. An investment in the Ordinary Shares may be difficult to realise and the price at which the Ordinary Shares will be traded and the price at which investors may realise their investment will be influenced by a large number of factors, some specific to the Group and its operations and some, which may affect quoted companies generally. Admission to AIM should not be taken as implying that there will be a liquid market for the Ordinary Shares. The market for shares in smaller public companies, such as the Company, is less liquid than for larger public companies. Consequently, the share price may be subject to greater fluctuation on small volumes of shares, and thus the Ordinary Shares may be difficult to sell at a particular price. The value of the Ordinary Shares may go down as well as up. Investors may therefore realise less than their original investment, or sustain a total loss of their investment. The Company is unable to predict when and if substantial numbers of Ordinary Shares will be sold in the open market following Admission. Any such sales, or the perception that such sales might occur, could result in a material adverse effect on the market price of the Ordinary Shares.

IMPORTANT NOTICE

The information contained in this Announcement is for information purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this Announcement or its accuracy, fairness or completeness.

This Announcement, including the Appendix, is not for publication or distribution, directly or indirectly, in or into the United States of America. This Announcement, including the Appendix, is not an offer of securities for sale in the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

This Announcement, including the Appendix, and the information contained herein is not for release, publication or distribution, directly or indirectly, in whole or in part, in, into or within Australia, Canada, New Zealand, the Republic of Ireland, Japan, the Republic of South Africa or any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction.

This Announcement, including the Appendix, is for information purposes only and is not intended to and does not contain or constitute or form part of any offer or any solicitation to purchase or subscribe for securities in Australia, Canada, New Zealand, the Republic of Ireland, Japan, the Republic of South Africa or any other state or jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions.

This Announcement does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any decision in respect of the Company or other evaluation of any securities of the Company or any other entity and should not be considered as a recommendation that any investor should subscribe for or purchase any such securities.

This Announcement has been issued by, and is the sole responsibility of, the Company. No undertaking, representation, warranty or other assurance, express or implied, is made or given by or on behalf of the Company or any member of the Company's group or Canaccord Genuity or N+1 Singer or any of their respective directors, officers, partners, employees, agents or advisers or any other person as to the accuracy or completeness of the information or opinions contained in this Announcement and no responsibility or liability is accepted by any of them for any such information or opinions or for any errors, omissions or misstatements, negligence or otherwise in this Announcement.

Canaccord Genuity is authorised and regulated by the Financial Conduct Authority ("FCA") in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Placing, and Canaccord Genuity will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other matters referred to in this Announcement.

N+1 Singer is authorised and regulated by the Financial Conduct Authority ("FCA") in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Placing, and N+1 Singer will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other matters referred to in this Announcement.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Canaccord Genuity or N+1 Singer or by any of its Affiliates or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

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.

This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events and the Company's future financial condition and performance. These statements, which sometimes use words such as "aim", "anticipate", "believe", "may", "will", "should", "intend", "plan", "assume", "estimate", "expect" (or the negative thereof) and words of similar meaning, reflect the Directors' current beliefs and expectations and involve known and unknown risks, uncertainties and assumptions, many of which are outside the Company's control and difficult to predict, that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. Any forward-looking statements made in this announcement by or on behalf of the Company speak only as of the date they are made. These forward-looking statements reflect the Company's judgment at the date of this announcement and are not intended to give any assurance as to future results. Except as required by the FCA, the London Stock Exchange, the AIM Rules or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

APPENDIX

TERMS AND CONDITIONS OF THE PLACING

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

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA, PERSONS WHO ARE, UNLESS OTHERWISE AGREED BY THE JOINT BOOKRUNNERS, "QUALIFIED INVESTORS" AS DEFINED IN ARTICLE 2(E) OF THE EU PROSPECTUS REGULATION (WHICH MEANS REGULATION (EU) 2017/1129 AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS REGULATION"); AND (B) IN THE UNITED KINGDOM, PERSONS WHO ARE: (I) "INVESTMENT PROFESSIONALS" WITHIN THE MEANING OF ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) COMES ARE REQUIRED BY THE COMPANY AND THE JOINT BOOKRUNNERS TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.

THIS ANNOUNCEMENT IS NOT AN OFFER FOR SALE OR SUBSCRIPTION IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF ANY JURISDICTION. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA. THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM REGISTRATION. NO PUBLIC OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES. THE PRICE OF SHARES AND THE INCOME FROM THEM (IF ANY) MAY GO DOWN AS WELL AS UP AND INVESTORS MAY NOT GET BACK THE FULL AMOUNT INVESTED ON DISPOSAL OF SHARES.

The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by the Australian Securities and Investments Commission or the Japanese Ministry of Finance or the South African Reserve Bank; and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or the Republic of South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan, the Republic of South Africa or any other jurisdiction in which such offer, sale, resale or delivery would be unlawful.

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of: (a) retail investors, (b) investors who meet the criteria of professional clients and (c) eligible counterparties (each as defined in MiFID II); and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the offer.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

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

These terms and conditions apply to persons making an offer to acquire Placing Shares. Each Placee hereby agrees with the Joint Bookrunners and the Company to be bound by these terms and conditions as being the terms and conditions upon which Placing Shares will be issued or acquired. A Placee shall, without limitation, become so bound if the Joint Bookrunners confirms to such Placee its allocation of Placing Shares.

Upon being notified of its allocation of Placing Shares, a Placee shall be contractually committed to acquire the number of Placing Shares allocated to it at the Placing Price and, to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate or otherwise withdraw from such commitment.

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

Details of the Placing Agreement and the Placing Shares

The Joint Bookrunners and the Company have entered into a Placing Agreement, under which the Joint Bookrunners have, on the terms and subject to the conditions set out therein, undertaken to use their reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price. It is expected that the Placing will raise £30.0million in gross proceeds. The Placing is not being underwritten by the Joint Bookrunners or any other person.

The Placing Shares will be issued on or around 23 December 2019. The Placing Shares will, when issued, be subject to the articles of association of the Company, will be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of Ordinary Shares after the date of issue of the Placing Shares.

The Placing Shares will trade on AIM under MERC with ISIN GB00BSL71W47.

Application for admission to trading of the Placing Shares

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. Admission for the Placing Shares is expected to become effective and dealings in such shares are expected to commence at 8.00 a.m. on or around 23 December 2019 (the " Admission"). In any event, the latest date for Admission is 31 December 2019 (the "Long Stop Date").

Placing

This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

Participation in, and principal terms of, the Placing are as follows:

1. The Joint Bookrunners are arranging the Placing as agent for, and joint brokers of, the Company.

2. The number of Placing Shares to be issued will be agreed between the Joint Bookrunners and the Company following completion of a bookbuilding exercise by the Joint Bookrunners (the "Bookbuild"). The results of the Bookbuild will be released via a Regulatory Information Service following the completion of the Bookbuild.

3. The Bookbuild is expected to close no later than 8:00 a.m. on 4 December 2019 but may be closed earlier or later at the discretion of the Joint Bookrunners. The Joint Bookrunners may, in agreement with the Company, accept bids received after the Bookbuild has closed.

4. Participation in the Placing is only available to persons who are lawfully able to be, and have been, invited to participate by the Joint Bookrunners. The Joint Bookrunners are entitled to participate in the Placing as principal.

5. Each Placee's allocation has been or will be confirmed to Placees orally, or in writing (which can include email), by the Joint Bookrunners and a trade confirmation or contract note has been or will be dispatched as soon as possible thereafter. The Joint Bookrunners oral or written confirmation will give rise to an irrevocable, legally binding commitment by that person (who at that point becomes a Placee), in favour of the Joint Bookrunners and the Company, under which it agrees to acquire by subscription the number of Placing Shares allocated to it at the Placing Price and otherwise on the terms and subject to the conditions set out in this Appendix and in accordance with the Company's articles of association. Except with the Joint Bookrunners consent, such commitment will not be capable of variation or revocation.

6. Each Placee's allocation will, unless otherwise agreed between the Placee and the Joint Bookrunners, be evidenced by a trade confirmation or contract note issued to each such Placee by the Joint Bookrunners. The terms and conditions of this Announcement (including this Appendix) will be deemed to be incorporated in that trade confirmation, contract note or such other confirmation and will be legally binding on the Placee on behalf of which it is made and except with the Joint Bookrunners consent will not be capable of variation or revocation from the time at which it is issued.

7. Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to the Joint Bookrunners (as agent for the Company), to pay to the Joint Bookrunners (or as the Joint Bookrunners may direct) in cleared funds an amount equal to the produce of the Placing Price and the number of Placing Shares such Placee has agreed to acquire and the Company has agreed to allot and issue to that Placee.

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

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

10. All obligations of the Joint Bookrunners under the Placing will be subject to fulfilment of the conditions referred to below "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Right to terminate under the Placing Agreement".

11. By participating in the Placing, each Placee agrees that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

12. To the fullest extent permissible by law and the applicable rules of the Financial Conduct Authority, neither the Joint Bookrunners nor any of their Affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise whether or not a recipient of these terms and conditions) in respect of the Placing. Each Placee acknowledges and agrees that the Company is responsible for the allotment of the Placing Shares to the Placees and the Joint Bookrunners and their Affiliates shall have no liability to the Placees for the failure of the Company to fulfil those obligations. In particular, neither the Joint Bookrunners nor any of their Affiliates shall have any liability (including to the extent permissible by law, any fiduciary duties) in respect of the Joint Bookrunners conduct of the Placing.

Conditions of the Placing

The Joint Bookrunners obligations under the Placing Agreement in respect of, amongst other things, the Placing are conditional on, inter alia:

1. the Asset Purchase Agreement not having been terminated or lapsed prior to Admission;

2. the release of this Announcement to a Regulatory Information Service by no later than 8:00 a.m on 3 December 2019;

3. the delivery by the Company to the Joint Bookrunners of certain documents required under the Placing Agreement;

4. the Company having fully performed its obligations under the Placing Agreement to the extent that such obligations fall to be performed prior to Admission;

5. none of the warranties given in the Placing Agreement being untrue or inaccurate or misleading in any respect at any time between the date of the Placing Agreement and Admission and no fact or circumstance having arisen which would render any of the warranties untrue or inaccurate or misleading in any respect if it was repeated as at Admission;

6. the General Meeting having taken place and the Resolutions having been passed without amendment;

7. the issue and allotment of the Placing Shares, conditional only upon admission of such Ordinary Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules, by 23 December 2019 or such later time as may be agreed between the Company and the Joint Bookrunners, not being later than the Long Stop Date;

8. admission of the Placing Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules on or before 23 December 2019; and

9. the Placing Agreement not having been terminated by the Joint Bookrunners.

If: (i) any of the conditions contained in the Placing Agreement, including those described above, are not fulfilled or (where applicable) waived by the Joint Bookrunners by the respective time or date where specified (or such later time or date as the Joint Bookrunners may notify to the Company); (ii) any of such conditions becomes incapable of being fulfilled; or (iii) the Placing Agreement is terminated in the circumstances specified below, the Placing will not proceed and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

The Joint Bookrunners may, at their discretion and upon such terms as it thinks fit, waive, or extend the period for, compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement save that the condition relating to Admission taking place by the Long Stop Date may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

Neither the Joint Bookrunners, the Company nor any of their respective Affiliates shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Joint Bookrunners.

Right to terminate the Placing Agreement

The Joint Bookrunners are entitled to terminate the Placing Agreement by giving notice to the Company in certain circumstances, including, inter alia, if before Admission (in respect of the Placing):

1. the Company is in breach of any provision of the Placing Agreement which is material in the context of the Placing, or with the requirements of any laws or regulations (including the Market Abuse Regulation and the AIM Rules) in relation to the Placing;

2. the Joint Bookrunners becomes aware of any circumstance which results in any of the warranties given in the Placing Agreement being not true or inaccurate or misleading when given at the date of the Placing Agreement or which results in or might in the opinion of the Joint Bookrunners results in any of the warranties being not true or inaccurate or misleading when deemed given;

3. it should come to the notice of the Joint Bookrunners that any statement contained in any of the Placing Documents (as defined in the Placing Agreement) is untrue or inaccurate which the Joint Bookrunners considers to be material or misleading or that matters have arisen which would, if the Placing Documents were issued at that time, constitute an omission therefrom which the Joint Bookrunners (acting in good faith) considers to be material, and such matter may not, in the opinion of the Joint Bookrunners be addressed by the publication of a further document or the making of an announcement;

4. in the opinion of the Joint Bookrunners any material adverse change in the condition (financial, operational, legal or otherwise) or in the earnings, business affairs, solvency or credit rating of the Company and/or any other member of the Group whether or not arising in the ordinary course (and for the avoidance of doubt, the results of the UK Parliamentary elections to be held on 12 December 2019 shall not constitute a material adverse change);

5. the AIM Application being refused by the London Stock Exchange; or

6. there having occurred or, in the opinion of the Joint Bookrunners (or either of them) it being reasonably likely that there will occur any material adverse change in the financial markets in the United Kingdom, any outbreak or escalation of hostilities, war, act of terrorism, declaration of emergency or martial law or other calamity or crisis or event or any change or development involving a prospective change in national or international political, financial, economic, monetary or market conditions or currency exchange rates or controls, any suspension to trading generally on the London Stock Exchange, or minimum or maximum prices for trading having been fixed, or maximum ranges for prices of securities have been required, or a material disruption has occurred in commercial banking or securities settlement or clearance services in the European Union or an actual or prospective change or development in United States or UK taxation affecting any member of the Group, the Ordinary Shares or their transfer or the imposition of exchange controls by the UK or a bank moratorium has been declared in the UK.

If the Placing Agreement is terminated prior to Admission then the Placing will not occur.

The rights and obligations of the Placees will not be subject to termination by the Placees or any prospective Placees at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by the Joint Bookrunners of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Joint Bookrunners and that the Joint Bookrunners need not make any reference to Placees in this regard and that neither the Joint Bookrunners nor any of their respective Affiliates shall have any liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

No Admission Document or Prospectus

The Placing Shares are being offered to a limited number of specifically invited persons only and have not been nor will be offered in such a way as to require the publication of an admission document or prospectus in the United Kingdom or any equivalent document in any other jurisdiction. No offering document, admission document or prospectus has been or will be submitted to be approved by the FCA or the London Stock Exchange in relation to the Placing, and Placees' commitments will be made solely on the basis of the information contained in this Announcement (including this Appendix) and the business and financial information that the Company is required to publish in accordance with the AIM Rules (the "Exchange Information") or has published via a Regulatory Information Service ("Publicly Available Information"). Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than the Exchange Information and/or Publicly Available Information), representation, warranty, or statement made by or on behalf of the Company or the Joint Bookrunners or any other person and neither the Joint Bookrunners, the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received and, if given or made, such information, representation, warranty or statement must not be relied upon as having been authorised by the Joint Bookrunners, the Company or their respective officers, directors, employees or agents. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Neither the Company nor the Joint Bookrunners are making any undertaking or warranty to any Placee regarding the legality of an investment in the Placing Shares by such Placee under any legal, investment or similar laws or regulations. Each Placee should not consider any information in this Announcement to be legal, tax or business advice. Each Placee should consult its own solicitor, tax adviser and financial adviser for independent legal, tax and financial advice regarding an investment in the Placing Shares. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and Settlement

Settlement of transactions in the Placing Shares will, unless otherwise agreed, take place on a delivery versus payment basis within CREST. Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed as directed by the Joint Bookrunners in accordance with the standing CREST settlement instructions which they have in place with the Joint Bookrunners.

Settlement of transactions in the Placing Shares (ISIN: GB00BSL71W47) following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST") provided that, subject to certain exceptions, the Joint Bookrunners reserves the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

It is expected that settlement of the Placing Shares will be on 23 December 2019 unless otherwise notified by the Joint Bookrunners and Admission is expected to occur by 23 December 2019 or such later time as may be agreed between the Company and the Joint Bookrunners, not being later than the Long Stop Date.

Each Placee is deemed to agree that, if it does not comply with these obligations, the Joint Bookrunners may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Joint Bookrunners account and benefit (as agent for the Company), an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable and shall indemnify the Joint Bookrunners on demand for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, each Placee confers on the Joint Bookrunners such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which the Joint Bookrunners lawfully takes in pursuance of such sale. Legal and/or beneficial title in and to any Placing Shares shall not pass to the relevant Placee until it has fully complied with its obligations hereunder.

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

Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax or securities transfer tax. Neither the Joint Bookrunners nor the Company will be liable in any circumstances for the payment of stamp duty, stamp duty reserve tax or securities transfer tax in connection with any of the Placing Shares. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations, Warranties and Further Terms

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

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

2. that the shares in the capital of the Company are admitted to trading on AIM, and the Company is therefore required to publish the Exchange Information, which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such Exchange Information without undue difficulty and is able to obtain access to such information or comparable information concerning any other publicly traded company without undue difficulty;

3. that its obligations are irrevocable and legally binding and shall not be capable of rescission or termination by it in any circumstances;

4. that the exercise by the Joint Bookrunners of any right or discretion under the Placing Agreement shall be within the absolute discretion of the Joint Bookrunners and the Joint Bookrunners 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 each Placee agrees that it has no rights against the Joint Bookrunners or the Company, or any of their respective officers, directors or employees, under the Placing Agreement pursuant to the Contracts (Rights of Third Parties Act) 1999;

5. that these terms and conditions represent the whole and only agreement between it, the Joint Bookrunners and the Company in relation to its participation in the Placing and supersedes any previous agreement between any of such parties in relation to such participation. Accordingly, each Placee, in accepting its participation in the Placing, 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, the Exchange Information and the Publicly Available Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares. Each Placee agrees that neither the Company, the Joint Bookrunners nor any of their respective officers, directors or employees will have any liability for any such other information, representation or warranty, express or implied;

6. that in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 5(2) of the Prospectus Regulation, (i) the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Member State of the European Economic Area which has implemented the Prospectus Regulation other than Qualified Investors or in circumstances in which the prior consent of the Joint Bookrunners have been given to the offer or resale; or (ii) where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Regulation as having been made to such persons;

7. that neither it nor, as the case may be, its clients expect the Joint Bookrunners to have any duties or responsibilities to such persons similar or comparable to the duties of "best execution" and "suitability" imposed by the FCA's Conduct of Business Source Book, 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 customers of the Joint Bookrunners or for providing advice in respect of the transactions described herein;

8. that it has made its own assessment of the Placing Shares and has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing and neither the Joint Bookrunners or the Company nor any of their respective Affiliates, agents, directors, officers or employees or any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company or any other person other than the information in this Announcement or the Publicly Available Information; nor has it requested the Joint Bookrunners, the Company or any of their respective Affiliates, agents, directors, officers or employees or any person acting on behalf of any of them to provide it with any such information;

9. that the only information on which it is entitled to rely on and on which it has relied in committing to subscribe for the Placing Shares is contained in this Announcement and the Publicly Available Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on this Announcement and the Publicly Available Information;

10. that neither the Joint Bookrunners or the Company nor any of their respective Affiliates, agents, directors, officers or employees has made any representation or warranty to it, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of this Announcement or the Publicly Available Information;

11. that it and the person(s), if any, for whose account or benefit it is subscribing for the Placing Shares is not subscribing for and/or purchasing Placing Shares as a result of any "directed selling efforts" as defined in Regulation S;

12. that, unless specifically agreed with the Joint Bookrunners, it is not and was not acting on a non-discretionary basis for the account or benefit of a person located within the United States at the time the undertaking to subscribe for and/or purchase Placing Shares was given and it is not acquiring Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any Placing Shares into the United States and it will not reoffer, resell, pledge or otherwise transfer the Placing Shares except pursuant to an exemption from the registration requirements of the Securities Act and otherwise in accordance with any applicable securities laws of any state or jurisdiction of the United States;

13. that it is not a national or resident of Canada, Australia, New Zealand, the Republic of Ireland, the Republic of South Africa or Japan or a corporation, partnership or other entity organised under the laws of Canada, Australia, New Zealand, the Republic of Ireland, the Republic of 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, New Zealand, the Republic of Ireland, the Republic of South Africa or Japan or to or for the benefit of any person resident in Canada, Australia, New Zealand, the Republic of Ireland, the Republic of South Africa or Japan and each Placee acknowledges that the relevant exemptions are not being obtained from the Securities Commission of any province of Canada, that no document has been or will be lodged with, filed with or registered by the Australian Securities and Investments Commission or Japanese Ministry of Finance and that the Placing Shares are not being offered for sale and may not be, directly or indirectly, offered, sold, transferred or delivered in or into Canada, Australia, New Zealand, the Republic of Ireland, the Republic South Africa or Japan;

14. that it does not have a registered address in, and is not a citizen, resident or national of, any jurisdiction in which it is unlawful to make or accept an offer of the Placing Shares and it is not acting on a non-discretionary basis for any such person;

15. that it has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted, and will not, directly or indirectly, distribute, forward, transfer or otherwise transmit, any presentation or offering materials concerning the Placing or the Placing Shares to any persons within the United States;

16. that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as the Joint Bookrunners may in its discretion determine and without liability to such Placee;

17. that it is entitled to subscribe for and/or purchase Placing Shares 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 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;

18. that it has obtained all necessary consents and authorities to enable it to give its commitment to subscribe for and/or purchase the Placing Shares and to perform its subscription and/or purchase obligations;

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

20. that it is either: (a) a person of a kind described in paragraph 5 of Article 19 (persons having professional experience in matters relating to investments and who are investment professionals) of the Order; or (b) a person of a kind described in paragraph 2 of Article 49 (high net worth companies, unincorporated associations, partnerships or trusts or their respective directors, officers or employees) of the Order; or (c) a person to whom it is otherwise lawful for this Announcement to be communicated and in the case of (a) and (b) undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

21. that, unless otherwise agreed by the Joint Bookrunners, it is a qualified investor (as defined in section 86(7) of the Financial Services and Markets Act 2000, as amended ("FSMA"));

22. that, unless otherwise agreed by the Joint Bookrunners, 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 purchasing Placing Shares for investment only and not with a view to resale or distribution;

23. it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

24. that any money held in an account with the Joint Bookrunners (or its nominees) on its behalf and/or any person acting on its behalf will not be treated as client money within the meaning of the rules and regulations of the FCA. Each Placee further acknowledges that the money will not be subject to the protections conferred by the FCA's client money rules. As a consequence, this money will not be segregated from the Joint Bookrunners (or its nominee) money in accordance with such client money rules and will be used by the Joint Bookrunners in the course of its own business and each Placee will rank only as a general creditor of the Joint Bookrunners;

25. that it will (or will procure that its nominee will) if applicable, make notification to the Company of the interest in its ordinary shares in accordance with the Disclosure Guidance and Transparency Rules published by the FCA;

26. that it is not, and it is not acting on behalf of, a person falling within subsections (6), (7) or (8) of sections 67 or 70 respectively or subsections (2) and (3) of section 93 or subsection (1) of section 96 of the Finance Act 1986;

27. that it will not deal or cause or permit any other person to deal in all or any of the Placing Shares which it is subscribing for and/or purchasing under the Placing unless and until Admission becomes effective;

28. that it appoints irrevocably any director of the Joint Bookrunners as its agent for the purpose of executing and delivering to the Company and/or its registrars any document on its behalf necessary to enable it to be registered as the holder of the Placing Shares;

29. that, as far as it is aware it is not acting in concert (within the meaning given in The City Code on Takeovers and Mergers) with any other person in relation to the Company;

30. that this Announcement does not constitute a securities recommendation or financial product advice and that neither the Joint Bookrunners nor the Company has considered its particular objectives, financial situation and needs;

31. that it has sufficient knowledge, sophistication and experience in financial, business and investment matters as is required to evaluate the merits and risks of subscribing for or purchasing the Placing Shares and is aware that it may be required to bear, and it, and any accounts for which it may be acting, are able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing;

32. that it will indemnify and hold the Company and the Joint Bookrunners and their respective Affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the Company and the Joint Bookrunners will rely on the truth and accuracy of the confirmations, warranties, acknowledgements and undertakings herein and, if any of the foregoing is or becomes no longer true or accurate, the Placee shall promptly notify the Joint Bookrunners and the Company. All confirmations, warranties, acknowledgements and undertakings given by the Placee, pursuant to this Announcement (including this Appendix) are given to the Joint Bookrunners for itself and on behalf of the Company and will survive completion of the Placing and Admission;

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

34. that it is responsible for obtaining any legal, financial, tax and other advice that it deems necessary for the execution, delivery and performance of its obligations in accepting the terms and conditions of the Placing, and that it is not relying on the Company or the Joint Bookrunners to provide any legal, financial, tax or other advice to it;

35. that all dates and times in this Announcement (including this Appendix) may be subject to amendment and that the Joint Bookrunners shall notify it of such amendments;

36. that (i) it has complied with its obligations under the Criminal Justice Act 1993, Part VIII of FSMA and the Market Abuse Regulation, (ii) in connection with money laundering and terrorist financing, it has complied with its obligations under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended),the Terrorism Act 2006 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and (iii) it is not a person: (a) with whom transactions are prohibited under the Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury; (b) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or (c) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations (together, the "Regulations"); and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to the Joint Bookrunners such evidence, if any, as to the identity or location or legal status of any person which the Joint Bookrunners may request from it in connection with the Placing (for the purpose of complying with such Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by the Joint Bookrunners on the basis that any failure by it to do so may result in the number of Placing Shares that are to be subscribed for and/or purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as the Joint Bookrunners may decide in its absolute discretion;

37. that it will not make any offer to the public of those Placing Shares to be subscribed for and/or purchased by it for the purposes of the Prospectus Regulation Rules made by the FCA pursuant to Prospectus Regulation Rules Instrument 2019 (FCA 2019/80);

38. that it will not distribute any document relating to the Placing Shares and it will be acquiring the Placing Shares for its own account as principal or for a discretionary account or accounts (as to which it has the authority to make the statements set out herein) for investment purposes only and it does not have any contract, understanding or arrangement with any person to sell, pledge, transfer or grant a participation therein to such person or any third person with respect of any Placing Shares; save that if it is a private client stockbroker or fund manager it confirms that in purchasing the Placing Shares it is acting under the terms of one or more discretionary mandates granted to it by private clients and it is not acting on an execution only basis or under specific instructions to purchase the Placing Shares for the account of any third party;

39. that it acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or the Joint Bookrunners in any jurisdiction in which the relevant Placee is incorporated or in which its assets are located or any of its securities have a quotation on a recognised stock exchange;

40. that any documents sent to Placees will be sent at the Placees' risk. They may be sent by post to such Placees at an address notified to the Joint Bookrunners;

41. that the Joint Bookrunners owes no fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement;

42. that the Joint Bookrunners or any of its respective Affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares;

43. that no prospectus, admission document or other offering document has been or will be prepared in connection with the Placing and it has not received and will not receive a prospectus, admission document or other offering document in connection with the Placing or the Placing Shares; and

44. that if it has received any confidential price sensitive information concerning the Company in advance of the publication of this Announcement, it has not: (i) dealt in the securities of the Company; (ii) encouraged, required, recommended or induced another person to deal in the securities of the Company; or (iii) disclosed such information to any person, prior to such information being made publicly available.

The Company, the Joint Bookrunners and their respective Affiliates will rely upon the truth and accuracy of each of the foregoing representations, warranties, acknowledgements and undertakings which are given to the Joint Bookrunners for themselves and on behalf of the Company and are irrevocable.

The provisions of this Appendix may be waived, varied or modified as regards specific Placees or on a general basis by the Joint Bookrunners.

The agreement to settle a Placee's subscription and/or purchase (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company or the Joint Bookrunners will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and the Joint Bookrunners in the event that any of the Company and/or the Joint Bookrunners have incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify the Joint Bookrunners accordingly.

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the subscription or purchase by them of any Placing Shares or the agreement by them to subscribe for or purchase any Placing Shares.

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 by 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 interested party or its advisers, and any liability therefore is expressly disclaimed.

DEFINITIONS

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