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THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, JAPAN, SOUTH AFRICA, THE REPUBLIC OF IRELAND OR AUSTRALIA OR ANY JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION IS PROHIBITED.

14 September 2012

2ergo Group plc

Placing and subscription to raise £2.2 million  

2ergo Group plc (AIM: RGO, "2ergo" or "the Company"), the mobile solutions company, announces today that it has conditionally raised £2.2m (before expenses) through the placing of 15,000,000 new Ordinary Shares (the "Initial Placing Shares") with both new and existing shareholders at a price of 10 pence per Ordinary Share and through three of the Directors, being Neale Graham, Barry Sharples and Keith Seeley, agreeing to subscribe, in aggregate, for 7,000,000 new Ordinary Shares also at a price of 10 pence per Ordinary Share (the "Subscription Shares").

The Placing Shares and the Subscription Shares will, upon Admission, rank pari passu in all respects with the Ordinary Shares in issue as at the date of this Announcement, including as regards the right to receive all dividends or other distributions declared, made or paid after Admission.

The Placing Price and the Subscription Price are each at a discount of 74.03 per cent. to the closing middle market price of 38.5 pence per Ordinary Share on 13 September 2012, the latest date prior to this Announcement.

The net proceeds of the issue of the Initial Placing Shares and the Subscription Shares are expected to be approximately £2.1m and will be used by the Company to provide the Group with access to additional working capital and the capital resources required to undertake the necessary investment in the roll-out of the podifi™ and TikTap™ contactless mobile technology platforms.

As announced on 23 May 2012, 2ergo has transformed its strategy, moving away from providing mainstream mobile solutions. It is now structured around three operating units in the UK, which the Placing will provide additional capital to continue to develop:

·; podifi™: the Group's contactless mobile technology aimed at large retailers and enterprises;

·; TikTap™: a local commerce contactless coupon redemption technology which is based on the podifi™ platform but is aimed at SMEs, local commerce and hospitality outlets; and

·; Customer insight services: which will provide major brands with data and customer insights derived from consumer and retail activity across the podifi™ and TikTap™ platforms.

Neale Graham, Chief Executive of 2ergo, commented:

"We are delighted with the market's reaction to our contactless mobile technology platform and the support we have received from both existing and new shareholders including directors for our growth strategy. 

"The proceeds will allow us to accelerate the roll-out of our podifi™ and TikTap™ pods in order to capitalise on the opportunities that have already presented themselves in both the enterprise and local commerce sectors.

"2ergo has a unique and compelling market proposition and is entering an extremely exciting period in the rapidly expanding mobile business market."

Enquiries:

About 2ergo Group plc

2ergo Group plc, the owner and international provider of innovative, proprietary contactless mobile technology podifi™, delivers coupons and vouchers, loyalty, proximity and payment solutions to organisations of all sizes in order to assist them to develop and execute their mobile strategy.

Market leading brands such as Aviva, Ladbrokes, PizzaExpress, Rightmove, O2, Orange, Talk Mobile, Transport for London, Phones4U, Procter & Gamble and Visit England have all benefited from 2ergo's end-to-end mobile solutions to increase sales, mobilise business processes, reduce costs and enhance customer relationships.

Headquartered in the UK, 2ergo has been a pioneer of enabling innovative mobile business solutions since 1999. 2ergo is an exclusive Mobile Partner for Microsoft's Innovation Outreach Programme.

For more information visit www.2ergo.com

This Announcement is for information purposes only and does not constitute an offer to sell or an invitation to subscribe for or a solicitation of an offer to buy or subscribe for any securities in any jurisdiction including in which such an offer or solicitation is prohibited and is not for distribution in or into, without limitation, the United States, Canada, Australia or Japan (the "Excluded Territories"), or to US persons (within the meaning of Regulation S of the United States Securities Act 1933 (as amended)) (the "Securities Act").

The Placing Shares and the Subscription Shares have not been and will not be registered under the Securities Act or under the applicable securities laws of any state in the United States or any Excluded Territory and, unless an exemption under such act or laws is available may not be offered for sale or subscription or sold or subscribed directly or indirectly within the Excluded Territories or for the account or benefit of any national, resident or citizen of the Excluded Territories. No public offering of securities will be made in the United States. The distribution of this Announcement in other jurisdictions may be restricted by law and therefore persons into whose possession this Announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions.

Numis, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for 2ergo and for no one else in connection with the Placing and will not be responsible to anyone other than 2ergo for providing the protections afforded to clients of Numis nor for providing advice in relation to the Placing or any other matters referred to in this Announcement.

The contents of this Announcement are not to be construed as legal, financial or tax advice. If necessary, each recipient of this Announcement should consult his, her or its own legal adviser, financial adviser or tax adviser for legal, financial or tax advice.

This Announcement contains certain statements that are or may be "forward-looking statements". These statements typically contain words such as "intends", "expects", "anticipates", "estimates" and words of similar import. All the statements other than statements of historical facts included in this Announcement, including, without limitation, those regarding 2ergo's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to 2ergo's products and services) are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and therefore undue reliance should not be placed on such forward-looking statements. There are a number of factors that could cause the actual results, performance or achievements of 2ergo to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding 2ergo's present and future business strategies and the environment in which 2ergo will operate in the future and such assumptions may or may not prove to be correct. Forward-looking statements speak only as at the date they are made. Neither 2ergo, nor Numis nor any other person undertakes any obligation (other than, in the case of 2ergo, pursuant to the AIM Rules for Companies) to update publicly any of the information contained in this Announcement, including any forward-looking statements, in the light of new information, change in circumstances or future events.

The Placing and the Subscription

The Placing is conditional, amongst other things, on: (i) Shareholders passing both of the Resolutions at the General Meeting; (ii) the Placing Agreement becoming unconditional and not having been terminated; and (iii) Admission having become effective by no later than 8.00 a.m. on 2 October 2012 (or such later date as the Company and Numis may agree, not being later than 15 October 2012).

Pursuant to the Placing Agreement, Numis has conditionally agreed to use its reasonable endeavours, as agent for the Company, to place the Initial Placing Shares at the Placing Price. The Placing is not being underwritten. The Company has agreed to pay Numis a placing fee and commissions together with certain costs and expenses incurred in connection with the Placing.

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

The Subscription is only conditional on the Admission of the Placing Shares becoming effective.

Option to issue further Placing Shares

The Company has granted the Option to Numis. The Option is exercisable on more than one occasion at any time prior to 6.00 p.m. on 26 September 2012. Any Option Shares issued pursuant to the exercise of the Option will be issued on the same terms and conditions as other Ordinary Shares issued pursuant to the Placing. The Option may be exercised by Numis with the agreement of the Company and there is no obligation on Numis to exercise the Option or to seek to procure subscribers for Option Shares. The maximum number of Ordinary Shares that may be issued pursuant to the exercise of the Option is 4,820,000 Ordinary Shares. The maximum number of Ordinary Shares (including Option Shares) that may be issued pursuant to the Placing and the Subscription is 26,820,000 Ordinary Shares.

The Company has granted the Option to Numis in order to give Numis, with the agreement of the Company (and subject to applicable laws and regulations), the flexibility to meet any additional demand for the Company's shares in the period from the date of this Announcement to 6.00 p.m. on 26 September 2012.

Admission

Application will be made to the London Stock Exchange for the Placing Shares and the Subscription Shares to be admitted to trading on AIM. It is expected that Admission of the Placing Shares and the Subscription Shares will occur at 8.00 a.m. on 2 October 2012. The Placing Shares and the Subscription Shares will, upon Admission, rank pari passu in all respects with the Ordinary Shares in issue as at the date of this Announcement, including as regards the right to receive all dividends or other distributions declared, made or paid after Admission. Following completion of the Placing and the Subscription, the total number of issued Ordinary Shares in the Company will be 57,482,092 (assuming no Option Shares are issued).

Background to, and reasons for, the Placing and the Subscription

Background

As detailed in the Company's interim results announced on 23 May 2012, 2ergo has transformed its strategy following a comprehensive review by the Board. Following this review, the Group has moved its focus away from providing mainstream mobile solutions, disposing of its development company in India and its US and Australian businesses, and is now structured around three operating units in the UK:

(a) podifi™: the Group's contactless mobile technology aimed at large retailers and enterprises;

(b) TikTap™: a local commerce contactless coupon redemption technology which is based on the podifi™ platform but is aimed at SMEs, local commerce and hospitality outlets; and

(c) customer insight services: which will provide major brands with data and customer insights derived from consumer and retail activity across the podifi™ and TikTap™ platforms.

PODIFI™

podifi™ is the culmination of over 12 years' experience in delivering customer acquisition technology for clients, including Orange Wednesdays which is believed to be one of the world's most successful mobile loyalty programmes. The platform is a simple self-service web tool which empowers merchants to create, launch and manage mobile coupon based offers, deals or loyalty programmes within minutes. podifi™ gives merchants complete control over their campaigns, whilst also providing extensive analytics of all of their customers' transactions over the pod.

Until recently, a key challenge that has prevented the mass adoption of mobile couponing, mobile loyalty and mobile payments within the retail sector has been the redemption of the offer at the cash till or point of sale. Existing technologies have tended to be expensive, requiring a significant upfront investment in handset upgrades and cumbersome EPOS integration. By contrast, podifi™ is a simple "plug and play" mobile solution, which allows fast, contactless transactions to be executed simply by tapping any smartphone on a small, low-cost pod attached to the cash till.

Significantly, podifi™ makes use of standard technology already used in smartphones, and requires no additional handset chip or hardware (such as barcode readers or PIN machines) nor any additional staff training. Pods placed discreetly at the point of sale can transact contactless mobile payments and act as redemption points to redeem mobile coupons or loyalty cards in real time, without any upgrade required to the retailer's EPOS system.

podifi™ can be easily incorporated into any mobile "app" or mobile website within hours and is compatible with all currently available smartphones. The technology has been designed to interact seamlessly with near field communications (NFC) handsets as or when they become available.

In addition, podifi™ incorporates proximity technology, allowing the delivery of personalised in-store communications and the issue of location-relevant offers and promotions. For example, pods placed at the entrance to the store can be used for consumer check-in services, whilst pods positioned on shelves in specific aisles can deliver offers specific to the products in that part of the store. The same location sensitive technology also allows customers to be tracked around the store to create in-store heat-maps providing valuable insight into customer behaviour.

2ergo will initially focus on selling its podifi™ enterprise solution directly to larger brands which are seeking to introduce contactless mobile coupon issuance and redemption, store check-in and customer loyalty solutions.

This will be achieved in one of two ways: first, an off-the-shelf, white-label iOS/Android mobile application or a dedicated website, which can be customised with the client branding. This service can be implemented and launched within hours of receiving client instructions. Alternatively, 2ergo will provide clients with a Software Development Toolkit ("SDK") which will allow the clients to rapidly integrate podifi™ into their existing app or service. Both solutions utilise the same underlying pod technology and are also configurable by means of an online management control panel.

To facilitate the roll-out of podifi™, the Company has contracted with leading EPOS manufacturers, distributors and resellers and is well positioned to execute its roll-out strategy. Such groups will be incentivised to distribute podifi™ through their extensive sales networks through revenue sharing agreements.

The Directors believe that podifi™ is a scalable opportunity from which 2ergo will receive revenues from setup fees, monthly licence fees and transactional fees.

TIKTAP™

TikTap™ is the Group's local commerce contactless coupon redemption platform developed specifically to help retailers, hospitality outlets and SMEs to generate a mobile brand presence and attract customers to their store. It comprises a specially developed "TikTap" app (available on both iOS and Android platforms) and associated in-store "pods" (based on the podifi™ technology) attached to each participating outlet's cash till. These pods enable the customer to redeem offers simply by tapping their smartphone over the pod at point of sale.

The Company announced the launch of the product on 21 May 2012, when it also announced a phased national roll-out of TikTap™ in partnership with local government, retailers, business forums and city centre management groups, which the Directors intend will ultimately create a network of local loyalty programmes. TikTap™ has successfully launched its first programmes in Preston, Southport and Skegness and, further supporting the national roll out of TikTap™, on 16 July 2012 2ergo announced a partnership to integrate the TikTap™ technology into "TubeMap", the official licensed Transport for London tube map application.

With over 5 million downloads and 100,000 daily users, TubeMap is the most downloaded and used cross platform tube map smartphone application. This rich application provides travel alerts, live departure boards and station information, helping users find stations and plan journeys as well as providing Oyster card balances. By integrating this application with TikTap™, TubeMap users will now be able to take advantage of easy-to-redeem money off vouchers and coupons, thereby creating a significantly enhanced user experience.

The Company is seeking to secure further city programmes during 2012 as part of its detailed roll-out programme of TikTap™.

The Company will accrue a one-off fee for each installed TikTap™ pod and further recurring revenues from monthly licence fees per pod, as well as transaction fees.

Customer insight

Both podifi™ and TikTap™ provide valuable consumer and enterprise data analytic insights through consumer and retail activity across the platforms. This provides the Group with additional opportunities to monetise such insight through brand advertising, the provision of consumer and business data and renting access to the pod network.

Reasons for the Placing and the Subscription, and use of proceeds

The Company is carrying out the Placing and the Subscription in order to provide it with access to additional working capital and the capital resources required to invest in the roll-out of the podifi™ and TikTap™ platforms.

In deciding to structure the equity fundraising as a Placing and Subscription, and in determining the price at which the Placing and the Subscription would be undertaken, the Directors considered a number of factors, including the current financial and trading position of the Group and a desire to achieve certainty within the shortest permissible timeframe. The Directors also took into consideration that the majority of the Company's institutional shareholders were given the opportunity to participate in the Placing. Furthermore, the Company has granted the Option to Numis in order to give Numis, with the agreement of the Company (and subject to applicable laws and regulations), the flexibility to meet any additional demand for the Company's shares in the period from the date of this Announcement to 26 September 2012.

The net proceeds of the Placing and the Subscription will be used to fund the recruitment of additional sales staff, marketing costs and pod production costs. The net proceeds of the Placing and the Subscription will also be used for general working capital purposes.

Current trading and outlook

The Group continues to sign customers across all business lines. There has been good demand for both the podifi™ and TikTap™ propositions since their recent launch and the current pipeline is strong. The TikTapTM and podifi™ white-label propositions have already been rolled out to retailers, hospitality venues, local councils and town centre groups, amongst others. The Group is also in advanced discussions with a number of potential customers around the implementation of all propositions. This pipeline includes leading retailers, leisure businesses and mobile network operators, one of which has already committed to rolling out pods to 120 merchants, which is phase 1 of a larger programme.

Furthermore, the Group is continuing to make progress with EPOS resellers and distributors, recently signing an additional 13 EPOS resellers which brings the total number of EPOS resellers to 25 with over 400,000 terminals in the UK in aggregate.

Overall, the Board is pleased with progress thus far and the Company is trading in line with its expectations. The Board anticipates revenue growth and a return to profitability in the Company's 2013 financial year, with monthly EBITDA profits and cash generation forecast from early 2013. However, the uncertainty surrounding the uptake of these new operating units renders any forecasting of sales performance in the short and medium term difficult, and the achievability of the Group's business plan will be a critical factor in meeting these targets.

Intentions of Directors

Each of the Directors is supportive of the fundraising and Neale Graham, Barry Sharples and Keith Seeley have each irrevocably undertaken to subscribe or apply, in aggregate, for 7,000,000 Ordinary Shares, representing approximately 31.8 per cent. of the Ordinary Shares to be issued pursuant to the Placing and the Subscription (assuming no Option Shares are issued).

In addition, each of the Directors intends to vote in favour of all of the Resolutions in respect of his own beneficial holding to the extent that he has any such holding, which together amount to 11,438,089 Ordinary Shares representing approximately 32.2 per cent. of the Company's existing issued share capital.

Related party transaction

Pursuant to the Subscription:

(a) Neale Graham has agreed to subscribe in cash for 3,000,000 Subscription Shares;

(b) Barry Sharples has agreed to subscribe in cash for 2,000,000 Subscription Shares; and

(c) Keith Seeley has agreed to subscribe in cash for 2,000,000 Subscription Shares,

(Neale Graham, Barry Sharples and Keith Seeley together being the "Subscribing Directors").

By virtue of their role as Directors of the Company, the Subscribing Directors are considered to be "related parties" as defined under the AIM Rules, and accordingly, their aggregate participation in the Subscription will constitute a related party transaction for the purposes of Rule 13 of the AIM Rules.

Accordingly, for the purposes of the AIM Rules, Jill Collighan, Finance Director (being the only member of the Board who is not a Subscribing Director and is therefore considered to be independent for these purposes), having consulted with Numis in its capacity as the Company's nominated adviser, considers that the terms on which the Subscribing Directors will participate in the Subscription are fair and reasonable insofar as Shareholders are concerned.

Importance of the shareholder vote

If both of the Resolutions are not passed by Shareholders at the General Meeting and the Placing and the Subscription do not proceed, the Company will need to seek alternative sources of funding in order to invest in the commercialisation of the podifi™ and TikTap™ platforms. While seeking such funding, the Group would need to scale back its sales, marketing and support activity, which would impact the ability of the Group to commercialise these platforms. The Company would also need to closely monitor its cash and working capital position.

As at 31 August 2012, the cash balances of the Group were £0.4 million. The Company has access to an unutilised overdraft facility of up to £0.5 million. While the Board believes that alternative sources of funding may be available to the Group, it is of the view that the terms associated with such funding would be significantly more onerous than those of the proposed Placing. It is therefore of the utmost importance that shareholders vote in favour of both of the Resolutions.

Risk Factors

Your attention is drawn to the Risk Factors set out in Appendix I to this Announcement. Prospective investors should, in addition to all other information set out in this Announcement, carefully consider the risks described in those sections before making a decision as to whether to invest in the Company, in particular those surrounding the Company's capital requirements, the rate of market acceptance of the new technology and the ability to attract new customers.

Shareholder Approval and recommendation

The Placing is conditional upon, amongst other things, Shareholder approval. A circular will be posted to Shareholders today, providing further details of the Placing and the Subscription and incorporating a notice convening the General Meeting at which the Resolutions will be proposed (the "Circular"). The Board considers that the Placing and the Subscription are in the best interests of the Company and the Shareholders as a whole, and intends to recommend that Shareholders vote in favour of both of the Resolutions.

The General Meeting will be held at 4th Floor, Digital World Centre, 1 Lowry Plaza, The Quays, Salford, Manchester, M50 3UB at 2.00 p.m. on Monday 1 October 2012.

The Company will also make copies of the Circular (including the notice of general meeting) available on its website at www.2ergo.com.

Action to be taken

A Form of Proxy for use at the General Meeting will accompany the Circular to Shareholders. The Form of Proxy should be completed in accordance with the instructions thereon and returned to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY. The completion and return of a Form of Proxy will not preclude Shareholders from attending the General Meeting and voting in person should they wish to do so.

DEFINITIONS

The following definitions apply throughout this Announcement (including the Appendices), unless the context requires otherwise:

The Appendices to this Announcement (which form part of this Announcement) set out the risk factors associated with the Company and the Placing as well as the terms and conditions of the Placing.

APPENDIX I

RISK FACTORS

AN INVESTMENT IN ORDINARY SHARES IS HIGHLY SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. THE ATTENTION OF PROSPECTIVE INVESTORS IS DRAWN TO THE FACT THAT THE COMPANY IS SUBJECT TO A VARIETY OF RISKS WHICH, IF ANY WERE TO OCCUR, COULD HAVE A MATERIALLY ADVERSE EFFECT ON THE COMPANY'S BUSINESS AND/OR FINANCIAL CONDITION, RESULTS OR FUTURE OPERATIONS. IN SUCH CASE, THE MARKET PRICE OF THE ORDINARY SHARES COULD DECLINE AND INVESTORS MIGHT LOSE SOME OR ALL OF THEIR INVESTMENT.

In addition to the information set out in the rest of this Announcement, the following risk factors in this Appendix should be considered carefully in evaluating whether to make an investment in the Company. The following factors do not purport to be an exhaustive list or explanation of all the risk factors involved in investing in the Company and they are not set out in any order of priority. Additionally, there may be risks not mentioned in this Announcement of which the Board is not aware or believes to be immaterial but which may, in the future, adversely affect the Company's business and the market price of the Ordinary Shares.

Before making a final investment decision, prospective investors should consider carefully whether an investment in the Company is suitable for them and, if they are in any doubt, should consult with an independent financial adviser authorised under FSMA which specialises in advising on the acquisition of shares and other securities in the UK or another appropriate financial adviser in the jurisdiction in which such investor is located.

Profitability depends on the success and market acceptance of current and new propositions.

Whilst the Directors believe there exists a viable and buoyant market for the Company's propositions, there can be no assurance that the technology will prove to be attractive to potential customers. The development of a market for the Company's propositions is affected by many factors, some of which are beyond the Company's control, including the cost of the Company's propositions themselves, regulatory requirements, customer perceptions of the efficacy and reliability of its propositions and customer reluctance to buy a new proposition. If a market fails to develop or develops more slowly than anticipated, the Company may continue to incur losses, may be unable to recover the losses it will have incurred in the development of the podifi™ technology which it intends to continue to develop and may therefore never achieve profitability. In addition, the Directors cannot guarantee that the Company will continue to develop or market its propositions if market conditions do not support the continuation of them.

Competitors may develop alternative technologies and propositions.

Competitors and potential competitors may develop technologies and propositions that are less costly and/or more effective than the technology and propositions of the Company or which may make those of the Company uncompetitive. Technologies developed by the Company may have a shorter commercial life than anticipated due to the invention or development of more successful technology or applications by competitors who may have greater financial, marketing, operational and technological resources than the Company. This could have a material adverse effect on the Company's financial condition, operations and prospects.

Pods have not been used over a prolonged period of time.

Reflecting its early-stage nature, the Company only has a relatively small number of active pods at the date of this Announcement. The Company's podifi™ technology has been tested and evaluated by the Company's commercial and technical partners, improvements and enhancements to it have been effected and the Company has a policy of continuous improvement. However, pods may fail to function as expected over a prolonged period of usage and this could have a material adverse effect on the Company's business, financial condition and results of operations.

The Company relies on third-party manufacturers and suppliers, and this dependence could make management of marketing and distribution efforts inefficient or unprofitable.

The success of the Company's business depends in part on its ability to cost-effectively and efficiently manufacture podifi™ pods on a commercial scale. In addition, the production of podifi™ pods entails the use of third party manufacturers. The establishment of new manufacturing relationships involves numerous uncertainties, including those relating to payment terms, costs of manufacturing, adequacy of manufacturing capacity, quality control and timeliness of delivery. Failure to achieve consistent, large-scale, economic production of pods could have a material adverse effect on the Company's business, financial condition and results of operations. Should the Company's relationships with such manufacturers or suppliers be terminated or the terms on which the Company purchases from such third parties become more onerous and/or less profitable, the Company may not be in a position to seek appropriate alternative sources for the relevant parts on a timely basis (or at all), which could have a material adverse effect on the Company's business, financial condition, results of operations and prospects.

Furthermore, the Company is at present reliant upon a single supplier for the manufacture of its pods. Although the Company expects to switch to multiple suppliers in due course in order to reduce operating costs, until this happens any disruptions to the Company's sole supplier could have a materially adverse effect on the Company's business.

The size of the Company may put the Company at a competitive disadvantage in negotiation as to pricing and terms with larger contract manufacturers. To the extent demand for components for pods exceeds available inventory and the capacities produced by contract manufacturing arrangements the Company may be unable to fulfil orders on demand.

The loss of, or changes affecting, the Company's relationships with EPOS manufacturers, distributors and resellers could adversely affect the Company's results of operations.

The Company's current sales model is, to an extent, reliant on arrangements with EPOS manufacturers, distributors and resellers for the sale of its propositions and there are inherent risks associated with this business strategy.

There can be no guarantee that the Company will retain these arrangements. Further, there can be no guarantees as to the level of performance under any agreements entered into with such third parties or the long-term viability of any such relationships. If the relationships with the Company's partners do not reach minimum sales levels or otherwise perform as expected, revenues and profitability could be materially adversely affected whilst additional sales staff are recruited to maintain revenue performance. Also, if agreements are cancelled, it could cause a material disruption in the Company's sales networks which in turn could have a material adverse impact on the Company's business, financial condition and results of operations.

The Company may not be able to enforce its proprietary rights over its intellectual property and others may claim the Company is infringing their intellectual property rights.

The Company's success will in part depend on its ability to establish, protect and enforce proprietary rights relating to the development, manufacture, use or sale of its existing and proposed products. Certain patent applications have been granted to or filed by or on behalf of the Company. No assurance is given that the Company will develop any future products that are patentable, or that any patents which have been granted or will be applied for will be sufficiently broad in their scope to provide protection for the Company's intellectual property rights and exclude competitors with similar technology. There is no guarantee that exclusivity in relation to any aspects of the Company's products will not be lost. Substantial cost may be incurred if the Company is required to defend its intellectual property rights against third parties.

The commercial success of the Company will also depend in part on non-infringement of patents of third parties. Competitors or potential competitors may have filed applications for, may have been granted, or may obtain patents that may relate to products competitive with those of the Company or its technology. If this is the case, the Company may have to obtain appropriate licences under these patents, which may not be available on acceptable terms or at all, or cease or alter certain activities or processes, or develop or obtain alternative technology. This may have a material adverse effect on the Company.

Litigation may be necessary in the future to enforce the Company's patents and other intellectual property rights, to determine the scope of the proprietary rights of others, or to defend against claims of infringement or invalidity, and there can be no assurance that the Company would prevail in any future litigation. Such litigation, whether or not determined in the Company's favour or settled by the Company, could be costly and may divert the efforts and attention of the Company's management and technical personnel from normal business operations, which could have material adverse effect on the Company's business, financial condition and results of operations. Adverse determinations in litigation could result in the loss of the Company's proprietary rights, subject the Company to significant liabilities, require the Company to seek licenses from third parties or prevent the Company from selling its products or licensing its technologies, any one of which could have a material adverse effect on the Company's business, financial condition and results of operations. Moreover, the laws of certain countries in which the Company's technologies may in the future be licensed may not protect the Company's intellectual property rights to the same extent as the laws of the United Kingdom.

The Company may need to indemnify the acquirer of 2ergo Americas as a result of litigation in the US.

Pursuant to the Company's disposal of Telitas US Inc and its subsidiary 2ergo Americas Inc on 24 February 2012, as is common in such transactions, the Group agreed to indemnify the acquirer, SoundBite Communications Inc ("SoundBite"), against certain claims that might arise relating to the period prior to SoundBite's acquisition of Telitas US Inc. The indemnification notice period terminates on 24 February 2014. Any successful claim made under this indemnity could have a material adverse effect on the Company's financial condition. $750,000 of consideration for the disposal of Telitas US Inc is held in escrow to be used to settle any indemnification claims arising. The amount held in escrow is not included in the Company's cash balances.

The US customer communications industry is characterised by frequent claims and litigation, including claims regarding patent and other intellectual property rights. On 5 April 2012, a class action suit was filed against sixteen defendants across the US mobile telecommunications market, including the major network carriers, alleging violation of the US Sherman Act. SoundBite, as the ultimate parent undertaking of 2ergo Americas, was named as a defendant in this case and therefore has sought indemnification from the Company. The Directors view the claim as an example of the US approach to litigation and indeed 2ergo Americas has never contracted or done any business with the plaintiffs. The claim is to be defended vigorously, but it is not currently possible to estimate the costs that may be incurred by the Company in relation to it.

The Company relies on the expertise of its employees.

Technical competence and innovation is critical to the Company's business and depends on the expertise of the Directors and key employees and the work of technically skilled employees. While the Company has entered into contractual arrangements and offers competitive reward and benefit packages, including long-term incentive schemes, with the aim of securing the services of these Directors and employees, as is the case with all companies, the retention of their services is not guaranteed. The market for the services of these types of employees is competitive and therefore the Company may not be able to attract and retain these employees.

The Company may not be able to secure necessary funding in the future, if needed.

The Company's capital requirements depend on numerous factors, including the rate of market acceptance of its technology and the ability to attract new customers. It is therefore difficult for the Directors to predict the timing and amount of capital required with accuracy. Although not presently anticipated by the Directors, the Company may, in the future, need to access additional funds to finance working capital requirements or its growth through future stages of development. The Company may be unable to obtain adequate financing on acceptable terms. Any additional share issue may have a dilutive effect on shareholders. Further, there can be no guarantee or assurance that additional equity funding will be forthcoming if and when required, nor as to the terms and price on which such funds would be available.

APPENDIX II

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING

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

TERMS USED BUT NOT DEFINED IN THIS APPENDIX SHALL HAVE THE MEANING SET OUT IN THE ANNOUNCEMENT.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED, ("QUALIFIED INVESTORS") BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE"); (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) FALL WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. EXCEPTIONS TO THE FOREGOING STATEMENTS IN THIS PARAGRAPH MAY BE AGREED TO BY NUMIS IN ITS ABSOLUTE DISCRETION.

THE ANNOUNCEMENT INCLUDING THIS APPENDIX IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT HAS BEEN ISSUED BY AND IS THE SOLE RESPONSIBILITY OF THE COMPANY.

THE ANNOUNCEMENT INCLUDING THIS APPENDIX 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. THE ANNOUNCEMENT INCLUDING THIS APPENDIX IS NOT AN OFFER OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES HAS APPROVED OR DISAPPROVED OF AN INVESTMENT IN THE SECURITIES OR PASSED UPON OR ENDORSED THE MERITS OF THE PLACING OR THE ACCURACY OR ADEQUACY OF THE CONTENTS OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE IN THE UNITED STATES. NO PUBLIC OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES. NO MONEY, SECURITIES OR OTHER CONSIDERATION FROM ANY PERSON INSIDE THE UNITED STATES IS BEING SOLICITED AND, IF SENT IN RESPONSE TO THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT, WILL NOT BE ACCEPTED.

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

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

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

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

3. (a) (i) it is not in the United States and (ii) it is not acting for the account or benefit of a person in the United States; or (b) it is a dealer or other professional fiduciary in the United States acting on a discretionary basis for a non-US person (other than an estate or trust) in reliance on Regulation S; or (c) it is otherwise acquiring the Placing Shares in an "offshore transaction" meeting the requirements of Regulation S under the Securities Act.

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

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

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

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States.

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; and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or the Republic of South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the United Kingdom.

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

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

Details of the Placing Agreement and the Placing Shares

Numis has entered into the Placing Agreement with the Company under which Numis has, on the terms and subject to the conditions set out therein, undertaken to use its reasonable endeavours to procure, as agent for the Company, subscribers for the Initial Placing Shares. The Placing has not been underwritten.

The Company has granted the Option to Numis. The Option is exercisable on more than one occasion at any time prior to 6.00 p.m. on 26 September 2012. Any Option Shares issued pursuant to the exercise of the Option will be issued on the same terms and conditions as other Ordinary Shares issued pursuant to the Placing. The Option may be exercised by Numis with the agreement of the Company and there is no obligation on Numis to exercise the Option or to seek to procure subscribers for Option Shares. The maximum number of Ordinary Shares that may be issued pursuant to the exercise of the Option is 4,820,000 Ordinary Shares. The maximum number of Ordinary Shares (including Option Shares) that may be issued pursuant to the Placing and the Subscription is 26,820,000 Ordinary Shares.

The Company has granted the Option to Numis in order to give Numis, with the agreement of the Company (and subject to applicable laws and regulations), the flexibility to meet any additional demand for the Company's shares in the period from the date of this Announcement to 26 September 2012.

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

Application for admission to trading

Application will be made to the London Stock Exchange for admission to trading of the Placing Shares on AIM ("Admission"). It is expected that settlement of any such shares and Admission will become effective at 8.00 a.m. on 2 October 2012 and that dealings in the Placing Shares will commence at that time.

Participation in, and principal terms of, the Placing

1. Numis (whether through itself or any of its affiliates) is arranging the Placing as placing agent of the Company for the purpose of using reasonable endeavours to procure Placees at the Placing Price for the Initial Placing Shares.

2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by Numis. Numis and its affiliates may participate in the Placing as principal.

3. 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.

4. The placing price will be a fixed price of 10 pence per Ordinary Share.

5. Each Placee's allocation will be confirmed to Placees orally by Numis, and a trade confirmation or contract note will be dispatched as soon as possible thereafter. The oral confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of Numis and the Company, under which it agrees to acquire the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's Articles of Association.

6. Except as required by law or regulation, no press release or other announcement will be made by Numis 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.

7. 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".

8. All obligations under the Placing will be subject to fulfilment or (where applicable) waiver of, amongst other things, the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Right to terminate under the Placing Agreement".

9. By participating in the Placing, each Placee will agree 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.

10. To the fullest extent permissible by law, none of the Company, Numis or any of their respective affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise of these terms and conditions). In particular, none of the Company, Numis or any of their respective affiliates shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of Numis' conduct of the Placing. Each Placee acknowledges and agrees that the Company is responsible for the allotment of the Placing Shares to the Placees and Numis shall have no liability to the Placees for the failure of the Company to fulfil those obligations.

Conditions of the Placing

Numis' obligations under the Placing Agreement in respect of the Placing Shares are conditional on, inter alia:

(a) the warranties contained in the Placing Agreement being true, accurate and not misleading as at the date of the Placing Agreement and at all times before Admission as though they had been given and made on such dates (by reference to the facts and circumstances existing at such dates);

(b) the Company allotting, subject only to Admission, the Placing Shares in accordance with the Placing Agreement;

(c) Admission taking place not later than 8.00 a.m on 2 October 2012 or such later date as the Company and Numis may otherwise agree not being later than 8.00 a.m. on 15 October 2012;

(d) there having been no Material Adverse Change (as defined in the Placing Agreement) prior to Admission; and

(e) the Placing Agreement not having lapsed or been terminated prior to Admission.

If: (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by Numis by the respective time or date where specified (or such later time or date as the Company and Numis may agree not being later than 8.00 a.m. on 15 October 2012); or (ii) the Placing Agreement is terminated as described below, the Placing in relation to the Placing Shares will lapse and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

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

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

Right to terminate under the Placing Agreement

Numis is entitled, at any time before Admission, to terminate the Placing Agreement by giving notice to the Company in certain circumstances, including, inter alia, a breach of the warranties given to Numis in the Placing Agreement, the failure of the Company to comply with obligations under the Placing Agreement or, the occurrence of a force majeure event which, in the absolute discretion of Numis, make it impracticable or inadvisable to market the Placing Shares or to enforce contracts for the subscription of the Placing Shares. Following Admission, the Placing Agreement is not capable of termination to the extent that it relates to the Placing of the Placing Shares.

The rights and obligations of the Placees shall terminate only in the circumstances described in these terms and conditions and will not be subject to termination by the Placee or any prospective Placee at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by Numis of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Numis, and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise or decision not to exercise. Placees will have no rights against Numis, the Company or any of their respective directors or employees under the Placing Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999 (as amended).

No Admission Document or Prospectus

The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require an admission document or prospectus in the United Kingdom or in any other jurisdiction. No offering document, admission document or prospectus has been or will be submitted to be approved by the Financial Services Authority or submitted to the London Stock Exchange in relation to the Placing, and Placees' commitments will be made solely on the basis of the information contained in the Announcement (including this Appendix) and the Exchange Information (as defined further below). Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than the Exchange Information), representation, warranty, or statement made by or on behalf of the Company or Numis or any other person and neither Numis nor the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received and, if given or made, such information, representation, warranty or statement must not be relied upon as having been authorised by Numis, 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 Numis 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 (ISIN: GB0034312214) following Admission will take place within CREST provided that, subject to certain exceptions, Numis 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.

Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation or contract note, in accordance with the standing arrangements in place with Numis, stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to Numis and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions that it has in place with Numis. Numis will be entitled to agree alternative arrangements with individual Placees where appropriate.

It is expected that settlement will be on 2 October 2012 on a T+3 basis in accordance with the instructions set out in the trade confirmation.

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

Each Placee is deemed to agree that, if it does not comply with these obligations, Numis may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Numis' 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 Numis 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 Numis all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which Numis lawfully takes in pursuance of such sale.

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

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

Representations, Warranties and Further Terms

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

1. represents and warrants that it has read and understood the Announcement, including this Appendix, in its entirety and that its subscription 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. acknowledges that no offering document, admission document or prospectus has been prepared in connection with the Placing and represents and warrants that it has not received and will not receive a prospectus, admission document or other offering document in connection therewith;

3. acknowledges that the Ordinary Shares are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules for Companies (collectively "Exchange Information"), which includes the Company's most recent balance sheet and profit and loss account and the Company's announcements and circulars published in the past 12 months and that it is able to obtain or access such information without undue difficulty;

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

5. acknowledges that the content of this Announcement is exclusively the responsibility of the Company, and that none of Numis, its affiliates or any person acting on its or their behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously or concurrently published by or on behalf of the Company, and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is contained in this Announcement and any Exchange Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by Numis or the Company, or, if received, it has not relied upon any such information, representations, warranties or statements (including any management presentation that may have been received by any prospective Placee or any material prepared by the Research Department of Numis (the views of such Research Department not representing and being independent from those of the Company and the Corporate Finance Department of Numis and not being attributable to the same)), and neither Numis nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it may not place the same degree of reliance as it may otherwise place on a prospectus or admission document. Each Placee further acknowledges and agrees that it has relied solely on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing and it will not rely on any investigation that Numis, its affiliates or any other person acting on its or their behalf has or may have conducted;

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

7. acknowledges that Numis does not have any duties or responsibilities to it, or its clients, similar or comparable to the duties of "best execution" and "suitability" imposed by the Conduct of Business Sourcebook in the FSA's Handbook of Rules and Guidance and that Numis is not acting for it or its clients and that Numis will not be responsible for providing protections to it or its clients;

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

9. that, save in the event of fraud on the part of Numis (and to the extent permitted by the Rules of the FSA), neither Numis, its ultimate holding company nor any direct or indirect subsidiary undertakings of that holding company, nor any of their respective directors and employees shall be liable to Investors for any matter arising out of Numis' role as placing agent or otherwise in connection with the Placing and that where any such liability nevertheless arises as a matter of law Investors will immediately waive any claim against any of such persons which you may have in respect thereof;

10. represents and warrants that: (i) it is not in the United States and (ii) it is not acting for the account or benefit of a person in the United States;

11. acknowledges that the Placing Shares are being offered and sold only pursuant to Regulation S under the Securities Act in a transaction not involving a public offering of securities in the United States and the Placing Shares have not been and will not be registered under the Securities Act or with any state or other jurisdiction of the United States, nor approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority, and that the offer and sale of the Placing Shares to it has been made outside of the United States in an 'offshore transaction' (as such term is defined in Regulation S under the Securities Act) and agrees not to reoffer, resell, pledge or otherwise transfer the Placing Shares except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and otherwise in accordance with any applicable securities laws of any state or jurisdiction of the United States;

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

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

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

15. represents and warrants that: (i) it has complied with its obligations under the Criminal Justice Act 1993, section 118 of FSMA and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering Regulations 2007 and (ii) it is not a person: (a) with whom transactions are prohibited under the Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury; (b) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or (c) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations (together, the "Regulations"); and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and 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 Numis such evidence, if any, as to the identity or location or legal status of any person which Numis 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 Numis on the basis that any failure by it to do so may result in the number of Placing Shares that are to be purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as Numis may decide at its sole discretion;

16. if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, represents and warrants that the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors, or in circumstances in which the prior consent of Numis has been given to the offer or resale;

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

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

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

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

21. if in the United Kingdom, represents and warrants that it is a person (i) who has professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); (ii) falling within Article 49(2)(A) to (D) ("High Net Worth Companies, Unincorporated Associations, etc") of the Order; or (iii) to whom this Announcement may otherwise be lawfully communicated;

22. represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities and taken any other necessary actions to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) and will honour such obligations;

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

24. undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as Numis may in its sole discretion determine and without liability to such Placee and it will remain liable and will indemnify Numis on demand for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear the liability for any stamp duty or stamp duty reserve tax or security transfer tax (together with any interest or penalties due pursuant to or referred to in these terms and conditions) which may arise upon the placing or sale of such Placee's Placing Shares on its behalf;

25. acknowledges that none of Numis, any of its affiliates, or any person acting on behalf of any of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be treated for these purposes as a client of Numis and that Numis has no duties or responsibilities to it for providing the protections afforded to their respective clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of their rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

26. undertakes that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither Numis nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and Numis in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of Numis who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

27. acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreement 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 (including non-contractual matters) 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 Numis in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

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

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

30. agrees to indemnify on an after-tax basis and hold the Company, Numis and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

31. acknowledges that no action has been or will be taken by any of the Company, Numis or any person acting on behalf of the Company or Numis that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

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

33. acknowledges that its commitment to subscribe for Placing Shares on the terms set out herein and in the trade confirmation or contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Placing;

34. acknowledges that Numis or any of its affiliates acting as an investor for its own account may take up shares in the Company and in that capacity may retain, purchase or sell for its own account such shares and may offer or sell such shares other than in connection with the Placing;

35. represents and warrants that, if it is a pension fund or investment company, its purchase of Placing Shares is in full compliance with all applicable laws and regulation; and

36. to the fullest extent permitted by law, it acknowledges and agrees to the disclaimers contained in the Announcement including this Appendix.

The representations, warranties, acknowledgments and undertakings contained in this Appendix are given to Numis and the Company and are irrevocable and shall not be capable of termination in any circumstances.

The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor Numis 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 Numis in the event that any of the Company and/or Numis has incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify Numis accordingly.

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

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

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

When a Placee or person acting on behalf of the Placee is dealing with Numis, any money held in an account with Numis on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FSA made under the FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from Numis' money in accordance with the client money rules and will be used by Numis in the course of its own business and the Placee will rank only as a general creditor of Numis.

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

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.