N4 Pharma Plc Regulatory News (N4P)

13 April 2017

Onzima Ventures Plc

Proposed Acquisition of 51 per cent. of N4 Pharma Limited

Firm Placing of 21,428,571 New Ordinary Shares at 7p per Share

Issue of Placing Warrants on a 1 for 1 basis at an Exercise Price of 8.5p per Placing Warrant

Share Re-Organisation

Change of Name to N4 Pharma Plc

and

Admission of the Enlarged Share Capital to trading on AIM

Following its announcement on 17 January 2017, Onzima Ventures Plc ("Onzima" or the "Company"), is pleased to announce the conditional acquisition of the remaining 51 per cent. of the issued shares of N4 Pharma Limited ("N4 Pharma") which it does not already own (the "Acquisition"). Consideration for the Acquisition will be satisfied by the issue of 4,510,800 New Ordinary Shares and 4,591,400 Deferred Consideration Shares (post-Share Re-Organisation). The Company has also conditionally raised £1.5 million (gross) by way of a placing of 21,428,571 New Ordinary Shares at 7p per share (the "Placing") to fund development of additional patent applications for reformulations of a wide range of generic drugs, to undertake clinical trials for N4 Pharma's reformulation of sildenafil and for working capital purposes.

Key points:

· N4 Pharma, founded in 2014, is a specialist pharmaceutical company which reformulates existing drugs and vaccines to improve their performance

· Contracts have been exchanged conditionally to acquire the 51 per cent. of the issued shares of N4 Pharma which Onzima does not already own

· Share Re-Organisation consolidating Existing Ordinary Shares on a 800:1 basis followed by a sub-division of 200:1

· The Company has conditionally raised £1.5 million (gross) by way of a placing of New Ordinary Shares

o Proceeds will be used to fund development of additional patent applications for reformulations of a wide range of generic drugs, to undertake clinical trials for N4 Pharma's reformulation of sildenafil and for working capital purposes

· The Acquisition constitutes a reverse takeover for the purposes of the AIM Rules for Companies. Accordingly, the Acquisition and the Capital Raising are conditional, amongst other things, on Shareholders' approval to be obtained at the General Meeting at 11.00am to be held on 2 May 2017

· Admission to trading on AIM of, and dealings in, the Enlarged Share Capital is expected to commence at 8:00am on 3 May 2017

· A special resolution will be proposed at the General Meeting to approve the change of the name of the Company to N4 Pharma plc. If the resolution is passed, the Company's AIM symbol will be changed to N4P and its website address will be changed to www.n4pharma.com with effect from Admission

Copies of this announcement and the Company's admission document, including the notice of General Meeting, are available on the Company's website, www.onzimaventures.com.

Nigel Theobald, CEO of N4 Pharma, commented: "Today marks an important step forward for N4 Pharma and we are delighted at the support of investors at this exciting time.

"Bringing a new drug to market is inherently risky, time consuming and extremely costly. However, the established process of reformulating already established drugs reduces the risk, cost and length of time it takes to bring new versions of these drugs to market. Following completion of the transaction, the net funds raised will enable N4 Pharma to accelerate its work on the reformulation of generic drugs and those that are coming to the end of their patent protection, each with attractive commercial opportunities, as well as expand our product portfolio.

"We look forward to life as a publicly traded company and will continue to update shareholders on progress in due course."

Enquiries:

Introduction

As Shareholders will be aware, trading on AIM in the Existing Ordinary Shares was suspended on 17 October 2016 as the Company had not made an acquisition or acquisitions or implemented its investing policy pursuant to Rule 15 of the AIM Rules for Companies.

On 17 January 2017, the Company announced that it had agreed in principle terms conditionally to acquire the 51 per cent. of the issued shares of N4 Pharma which it does not already own for consideration to be satisfied by the issue of new ordinary shares and that the Company would seek to raise funds by way of a placing of New Ordinary Shares to fund development of additional patent applications for reformulations of a wide range of generic drugs, to undertake clinical trials for the Company's reformulation of sildenafil and for working capital purposes.

The Company announces that it has entered into a conditional contract to acquire the 51 per cent. of the issued shares of N4 Pharma which it does not already own to be satisfied by the issue of the Consideration Shares and subject to certain conditions, the Deferred Consideration Shares.

The Company also announces the Capital Raising which will raise a total of £1.05 million (net of expenses) through the issue of 21,428,571 New Ordinary Shares at a price of 7p per share, the net proceeds of which will be applied to provide working capital for the Enlarged Group. The Proposals are subject to Shareholders' approval.

Due to the high number of Shareholders who own proportionately a small number of shares in the Company, the Board is proposing a share re-organisation subject to Shareholders' approval to be obtained at the General Meeting. Accordingly, a resolution will be proposed at the General Meeting to approve the consolidation and subsequent sub-division of the Existing Ordinary Shares. Further details of the Share Re-organisation are set out below.

The Acquisition, if completed, will result in the Company becoming an operating company instead of an investing company and will constitute a reverse takeover for the purposes of the AIM Rules for Companies. Accordingly, the Acquisition and the Capital Raising are conditional, amongst other things, on Shareholders' approval to be obtained at the General Meeting.

In the event that the Acquisition is not approved at the General Meeting or for any other reason that Admission does not become effective, admission of the Ordinary Shares to trading on AIM will be cancelled.

Background to and reasons for the Proposals

As Shareholders will be aware, the Company has been classified as an investing company under the AIM Rules for Companies since the disposal of all its operating subsidiaries in October 2015 when it also changed its name from Ultima Networks Plc to Onzima Ventures plc and adopted its investing policy.

Under its investing policy, the Company sought to invest a minimum of 75 per cent. of its deployable capital into natural resources investment opportunities with the remaining 25 per cent. being invested into other sectors. To that end, the Company made a series of investments in several natural resources companies.

As the Company had not made an acquisition or acquisitions or implemented its investing policy within a year of becoming an investing company pursuant to Rule 15 of the AIM Rules for Companies, on 17 October 2016 trading on AIM in the Company's shares was suspended.

Following the suspension of trading in the Company's shares on AIM, the Board considered the best course of action for the Company and its Shareholders.

On 1 March 2016, the Company announced that it had acquired 49 per cent. of the issued share capital of N4 Pharma. The consideration payable was £41,000 in cash and 24,272,807 new Ordinary Shares in Onzima Ventures, representing 14.9 per cent. of the Company's enlarged share capital. In addition, Onzima Ventures provided a loan facility of £209,000 to N4 Pharma at an interest rate of 5 per cent. per annum with interest being rolled up and together with any drawn down funds, being repayable in 4 years unless repaid earlier. In its announcement released on 17 January 2017, the Company announced that it had agreed to increase its loan facility to N4 Pharma by £100,000 to £309,000.

In light of the potential and value attributable to the investment in N4 Pharma, the Directors concluded that the best course of action in the interests of the Company and all Shareholders was to seek to reach agreement over the acquisition of the remaining 51 per cent. of N4 Pharma. Having agreed in principle the terms of the Acquisition (as detailed further below) the Company sought to appoint the relevant advisers to execute the transaction and on 17 January 2017 announced the terms of the proposed Acquisition.

Since making the initial investment in N4 Pharma, the Directors have worked closely with N4 Pharma's management team and are supportive of its business model whereby it works with proven, commercialised drugs to reformulate them with a view to returning to the market in an improved format. The risk reward profile with a portfolio approach to drug reformulation backed by strong IP is one that, the Directors believe, has the potential to generate significant returns for Shareholders.

In seeking to acquire the remaining shares in N4 Pharma, the Directors recognise that all of the Company's resources should be directed towards N4 Pharma and its prospects. To that end, and as previously announced, over the last few months the Company has been selling down its holdings in natural resources companies and as at the date of this announcement has a shareholding in one natural resource company and warrants and options in a further four natural resource companies.

Under the AIM Rules for Companies, the Acquisition is classified as a reverse takeover and, as such, requires shareholders' approval at a general meeting of the Company.

Information on N4 Pharma

N4 Pharma was formed in 2014 by Nigel Theobald, the former Chief Executive of AIM quoted Oxford Pharmascience Group plc. It is a specialist pharmaceutical company which reformulates existing drugs and vaccines to improve their performance. The management team has a proven track record at a senior level in major international pharmaceutical companies and extensive experience of start-ups in the pharmaceutical and biotech field.

N4 Pharma's reformulation work falls under two divisions:

• generic, already commercialised, drugs; and

• delivery of novel and existing vaccines.

N4 Pharma has identified a number of established drugs that its directors believe could be improved upon through its reformulation techniques. Its most advanced reformulation is for sildenafil, widely marketed as Viagra, where N4 Pharma is seeking to improve the speed at which the drug takes effect whilst also extending its duration of action.

The N4 Pharma Directors anticipate that N4 Pharma's reformulation approach should take approximately three years to obtain regulatory approval as opposed to the traditional process for new drugs of on average ten years. The cost and risk profile of this model is, in the Directors' and the Proposed Directors' opinion, also significantly less than the traditional process. N4 Pharma's business model is to take reformulated drugs from its portfolio through to the stage where it will license its newly reformulated drugs to pharmaceutical companies to commercialise them. N4 Pharma's revenues should be derived from up front milestone and royalty payments associated with the licence.

Summary of the Acquisition

Contracts have been exchanged conditionally to acquire the 51 per cent. of the issued shares of N4 Pharma which Onzima Ventures does not already own to be satisfied by the issue of the Consideration Shares and, subject to satisfaction of certain conditions, the Deferred Consideration Shares subject to Shareholder approval and the Capital Raising being successfully completed.

On Admission, Nigel Theobald will hold approximately 17.0 per cent. of the Enlarged Share Capital, assuming that the Firm Placed Shares are issued in full.

Related party transaction

The Acquisition is deemed a related party transaction under the AIM Rules for Companies by virtue of Nigel Theobald being a substantial shareholder in the Company. The Directors consider, having consulted with the Company's nominated adviser, Stockdale Securities, that the terms of the Acquisition are fair and reasonable insofar as the Shareholders are concerned.

Proposed Share Re-organisation

Admission is conditional upon the approval and completion of the Proposals, including the Share Re-organisation. The Existing Ordinary Share Capital comprises 181,956,558 Existing Ordinary Shares.

The Share Re-organisation which is expected to take place after close of business on the Record Date will involve every 800 Existing Ordinary Shares being consolidated into 1 New Ordinary Share and each resulting 1 New Ordinary Share will be subsequently sub-divided into 200 New Ordinary Shares of 0.4p each. The rights attached to the New Ordinary Shares will be the same as the rights attaching to the Existing Ordinary Shares and the New Ordinary Shares will trade on AIM in place of the Existing Ordinary Shares.

Resolutions 3 and 4 at the General Meeting are to approve the Share Re-organisation. Fractional entitlements resulting from the Share Re-organisation will be sold for the benefit of Fractional Shareholders.

Immediately following Admission (and the issue of all the Firm Placed Shares) and the issue of the Consideration Shares, the Share Re-organisation will result in an Enlarged Share Capital of 71,714,285 New Ordinary Shares.

No Shareholder will be entitled to a fraction of a New Ordinary Share and where, as a result of the Share Re-organisation, any Shareholder would otherwise be entitled to a fraction only of a New Ordinary Share in respect of their holding of Existing Ordinary Shares on the date of the General Meeting (a "Fractional Shareholder"), such fractions will, in so far as possible, be aggregated with the fractions of New Ordinary Shares to which other Fractional Shareholders would be entitled so as to form full New Ordinary Shares ("Fractional Entitlement Shares"). These Fractional Entitlement Shares will be aggregated and sold in the market for the benefit of Fractional Shareholders.

The provisions set out above mean that any such Fractional Shareholders will not have a resultant proportionate shareholding of New Ordinary Shares exactly equal to their proportionate holding of Existing Ordinary Shares, and as noted above, Shareholders with only a fractional entitlement to a New Ordinary Share (i.e. those Shareholders holding a total of fewer than 800 Existing Ordinary Shares at the Record Date) will cease to be a Shareholder of the Company. They will however be entitled to cast their votes at the General Meeting.

The Company will issue new share certificates to those Shareholders holding shares in certificated form to take account of the proposed change of name of the Company and the Share Re-organisation. Following the issue of new share certificates, share certificates in respect of Existing Ordinary Shares will no longer be valid. Shareholders will still be able to trade in ordinary shares of the Company during the period between the passing of the Resolutions and the date on which Shareholders receive new share certificates.

Details of the Capital Raising

The Company is proposing to raise £1.5 million (approximately £1.05 million net of expenses) through the Firm Placing at the Issue Price.

The Capital Raising is conditional, amongst other things, on:

i. the passing of the Resolutions;

ii. the Placing becoming unconditional in all respects save for Admission by no later than 3 May 2017 (or such later date, being no later than 31 May 2017) as the Company, Stockdale Securities and Beaufort Securities may agree (and not having been terminated in accordance with its terms); and

iii. Admission.

The New Ordinary Shares will represent approximately 30 per cent. of the Enlarged Share Capital (assuming Admission of all of the Firm Placing Shares and that no other Ordinary Shares are issued between the date of this announcement and Admission) 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.

If the Resolutions are passed at the General Meeting, it is expected that Admission will become effective and dealings in the New Ordinary Shares will commence at 8.00 a.m. on 3 May 2017.

The Firm Placing and grant of Warrants

Stockdale Securities and Beaufort Securities, as agents of and on behalf of the Company, have conditionally placed the Firm Placed Shares (being 21,428,571 New Ordinary Shares) firm with Placees at the Issue Price. The Firm Placing is expected to raise £1.5 million (before expenses). Each Placee is also being granted one Warrant for each Firm Placed Share. The Warrants will entitle the Placees to subscribe for New Ordinary Shares at a price of 8.5 pence per share at any time in the period of two years following the grant of the Warrants.

Effect of the Capital Raising

Upon Admission and assuming full take up under the Capital Raising and no exercise of any options under the Share Option Scheme, the Enlarged Share Capital is expected to comprise 71,714,285 Ordinary Shares. On that basis, the Firm Placed Shares will represent approximately 30 per cent. of the Enlarged Share Capital.

Use of proceeds

The Company has raised £1.5 million (gross). It will use the net proceeds of the Capital Raising and the Company's existing cash resources to:

• fund pre-IND work on sildenafil reformulation

• fund in-vitro formulation of up to 10 new products

• fund vaccine delivery system proof of concept studies

• enhance its management and operational team

• rent laboratory space for work on its vaccines and

• provide additional working capital

Irrevocable undertakings to vote in favour of the Resolutions

Each of the Directors and the Proposed Directors who holds Ordinary Shares has given an irrevocable undertaking to the Company, Stockdale Securities and Beaufort Securities to vote in favour of the Resolutions in respect of their entire beneficial and direct holdings of Existing Ordinary Shares totalling, 35,428,010 Existing Ordinary Shares, representing approximately 19.5 per cent. of the Existing Ordinary Share Capital.

Admission, settlement & dealings

Application will be made for the Enlarged Share Capital to be admitted to trading on AIM. If the Resolutions are passed at the General Meeting, it is expected that Admission will become effective and dealings in the Existing Ordinary Shares will recommence and dealings in the New Ordinary Shares and the Consideration Shares will commence at 8.00 a.m. on 3 May 2017. These dates and times may change.

The Company has applied for the Enlarged Share Capital to be admitted to CREST with effect from Admission. Accordingly, settlement of transactions in Ordinary Shares held in Uncertificated Form following Admission will take place within the CREST system.

CREST is a voluntary system and holders of Ordinary Shares who wish to receive and retain share certificates will be able to do so.

All New Ordinary Shares will be issued payable in full at the Issue Price. It is intended that, if applicable, definitive share certificates in respect of the New Ordinary Shares and the Warrants will be distributed by 17 May 2017 or as soon as practicable thereafter. No temporary documents of title will be issued. No application will be made for the Warrants to be admitted to trading on AIM.

Lock-in and orderly market agreement

Gavin Burnell and Luke Cairns and each of the Proposed Directors, who on Admission will be the holders of 13,591,434 Ordinary Shares in aggregate, representing approximately 19.0 per cent. of the Enlarged Share Capital have, pursuant to the Lock-In Agreement, undertaken to the Company, Stockdale Securities and Beaufort Securities not to dispose of any interests in their respective Ordinary Shares for a period of 12 months from Admission and for a further 12 months thereafter, to deal in their Ordinary Shares only through Stockdale Securities, Beaufort Securities (or such other nominated adviser or broker of the Company) with a view to maintaining an orderly market, except in certain limited circumstances. On Admission, Professor Mughal will be the beneficial holder of 2,808,129 Ordinary Shares in aggregate, representing approximately 3.9 per cent. of the Enlarged Share Capital. In respect of 490,655 New Ordinary Shares, representing 0.7 per cent. of the Enlarged Share Capital, Professor Mughal has, pursuant to the terms of a lock-in and orderly market agreement undertaken to the Company, Stockdale Securities and Beaufort Securities not to dispose of 490,655 New Ordinary Shares representing approximately 0.7 per cent. of the Enlarged Share Capital for a period of 12 months from Admission and for a further 12 months thereafter, to deal in these New Ordinary Shares only through Stockdale Securities or Beaufort Securities (or such other broker of the Company) with a view to maintaining an orderly market, except in certain limited circumstances.

Beaufort Securities have separately entered into a lock-in and orderly market agreement with the company in consideration for the issuance of Ordinary Shares pursuant to its appointment as joint corporate broker to the Company.

Directors, Proposed Directors and Senior Management

The Board currently comprises three directors and, following Admission, will comprise four directors and one member of senior management.

Existing Directors

The Board currently comprises the following:

Gavin Burnell - Chief Executive Officer (Age 39)

Gavin has 13 years' experience of advising smaller companies and is a director of corporate finance at Beaufort Securities, an FCA regulated stockbroking firm. Gavin is a founder and/or director of several public and private companies in various sectors, including Magnolia Petroleum Plc, Hot Rocks Investments Plc, Hellenic Capital Plc, Sula Iron & Gold plc and Woodland Capital Limited and was formerly a non-executive director of Globo plc which was quoted on AIM until it went into administration in November 2015. He will resign as a director of the Company following publication of the Admission Document and approval of the Acquisition at the General Meeting, but prior to Admission.

Prof. Humayun Mughal PhD - Non-Executive Director (Age 64)

Prof. Mughal holds a BSc in Physics from Punjab University, Pakistan and a BEng in Applied Electronics with honours from Liverpool University. His PhD research at Liverpool University was in silicon based semiconductor devices and performance of silicon dioxide as a key processing step in the manufacturing of large scale integrated circuits. He is the former Chief Executive of Ultima Networks plc, the predecessor business of the Company. Professor Mughal will also resign as a director of the Company following publication of the Admission Document and approval of the Acquisition at the General Meeting, but prior to Admission.

Luke Cairns - Non-Executive Director (Age 38)

Luke has spent over 16 years working in corporate finance and is a former head of corporate finance and managing director at Northland Capital Partners, an FCA regulated stockbroking firm. Having left Northland in 2014, Luke founded LSC Advisory Limited to provide advisory and consultancy services to growth companies. He has worked with many growth companies across a number of sectors and regions on a wide range of transactions, including IPOs, secondary fundraisings, corporate restructurings and takeovers. He is an Associate of the Institute of Chartered Secretaries and Administrators. He will remain on the Board following Admission.

Proposed Directors

Dr David Templeton BSc, PhD - Non-Executive Chairman (Age 64)

David is an experienced R&D manager having worked in major pharmaceutical and biotech businesses and in the generic industry with specific expertise in early clinical development and translational biology, toxicology and safety pharmacology, lead selection, candidate characterisation, PK/PD analysis and bioanalysis. David has worked in various pharmacology and pre-clinical drug discovery roles for Pfizer, Xenova, Smithkline Beecham and GlaxoSmithKline and was the head of non-clinical development at Celltech Limited from 2003 to 2004 before moving to Merck Generics UK as head of biometrics. He was appointed as director of clinical pharmacology of Eisai Limited in 2007 until in 2010 setting up his own consulting business offering discovery and early development advice to several pharmaceutical companies.

Nigel Theobald BSc - Chief Executive Officer (Age 53)

Nigel is the Chief Executive of N4 Pharma and the proposed Chief Executive of the Enlarged Group following Admission. He has over 25 years' experience in healthcare and in building businesses, strategy development and its implementation and a strong network covering all aspects of pharmaceutical product development and commercialisation. He was the head of healthcare brands at Boots Group plc in 2002 before leaving to set up a series of successful businesses, including Omscan Limited, a start-up distributor for innovative new consumer healthcare products in the UK, which was subsequently sold to Alltracel Pharma in January 2008, and Oxford Pharmascience Group plc (with initial seed funding of £100k), which he grew over 5 years into an AIM quoted company with a market capitalisation of £40 million.

Paul Titley MRSC - Executive Director (Age 64)

Paul has over 40 years' experience in the pharmaceutical industry. He led the pharmaceutical development of major tablet products and new manufacturing and formulation technologies at Wellcome (including Zovirax), set up and audited pharmaceutical plants around the world as well as conducting acquisition due diligence. He has also advised over 900 pharmaceutical/biotech companies on how to develop products to meet their clinical and commercial goals. On the commercial and business development front, as Chief Executive, built R5 Pharmaceuticals Limited into a profitable business, leading to its acquisition by Aesica Pharmaceuticals Limited after four years of trading. Subsequently, Paul introduced Aesica to Consort Medical plc which resulted in Aesica's acquisition by Consort Medical for £230 million in 2014.

Senior Management

Will Morgan ACA, CA, BSc - Financial Controller (Age 37)

Will is a qualified chartered accountant who trained with Ernst & Young. He is the founder and Managing Director of Offshore Consulting (Guernsey) Limited and Offshore Accounting Limited which carries out financial controller based assignments and provides both monthly management reporting and annual financial statements. His experience includes private equity transactional support, due diligence and forensic investigational projects, management reporting and annual financial reporting.

Corporate governance and board practices

The Board intends to take account of the requirements of the UK Corporate Governance Code to the extent it considers it appropriate and having regard to the Company's size, Board structure, stage of development and resources. The Company has adopted a share dealing code for the directors, other PDMRs and applicable employees of the Company. The Company will take steps to ensure compliance by all PDMRs and applicable employees with the terms of the code.

The directors will hold regular board meetings. The Board will be responsible for formulating, reviewing and approving the Company's strategy, budget and major items of capital expenditure. The Board has established an Audit Committee and Remuneration Committee with formally delegated rules and responsibilities. Each of these committees will meet at least twice each year, but additional meetings will take place on an ad hoc basis as required. Given the Company's current size, the Board does not consider it necessary to constitute a nomination committee and the Board, as a whole, will consider the appointment of directors and other senior employees of the Company.

On Admission, the Audit Committee will comprise David Templeton and Luke Cairns and will be chaired by David Templeton. The Audit Committee will, inter alia, determine and examine matters relating to the financial affairs of the Company including the terms of engagement of the Company's auditors and, in consultation with the auditors, the scope of the annual audit. It will receive and review reports from management and the Company's auditors relating to the half yearly and annual accounts and the accounting and internal control systems in use throughout the Enlarged Group. It will also monitor and be responsible for ensuring ongoing compliance by the Company with the AIM Rules for Companies.

On Admission, the Remuneration Committee will comprise David Templeton and Luke Cairns and will be chaired by David Templeton. The Remuneration Committee will, inter alia, review and make recommendations in respect of the Directors' remuneration and benefits packages, including share options and the terms of their appointment.

The City Code

The Company is a public company incorporated in England and Wales, and application will be made to the London Stock Exchange for the Enlarged Share Capital to be admitted to trading on AIM. The City Code applies to all companies who have their registered office in the UK, Channel Islands or Isle of Man and whose securities are traded on a regulated market in the UK or a stock exchange in the Channel Islands or Isle of Man or a multilateral trading facility (such as AIM). Accordingly, the Company is subject to the City Code and therefore all Shareholders are entitled to the protections afforded by it.

The City Code governs, inter alia, transactions which may result in a change of control of a public company (or certain private companies) to which the City Code applies. Under Rule 9 of the City Code any person who acquires, whether by a series of transactions over a period of time or not, an interest (as defined in the City Code) in shares which (taken together with shares in which that person is already interested or in which persons acting with him are interested) carry 30 per cent. or more of the voting rights of a company which is subject to the City Code, is normally required to make a general offer to all the remaining shareholders to acquire their shares. Similarly, Rule 9 of the City Code also provides that when any person, together with persons acting in concert with him, is interested in shares which, in aggregate, carry more than 30 per cent. of the voting rights of such company but does not hold shares carrying more than 50 per cent. of such voting rights, a general offer will normally be required if any further interest in shares is acquired which increases the percentage of shares carrying voting rights in which he, together with persons acting in concert with him, are interested.

Rule 9 of the City Code further provides, among other things, that where any person who, together with persons acting in concert with him, holds over 50 per cent. of the voting rights of a company, acquires any further shares carrying voting rights, they will not generally be required to make a general offer to the other shareholders to acquire the balance of their shares, though Rule 9 of the City Code would remain applicable to individual members of a concert party who would not be able to increase their percentage interests in the voting rights of such company through or between Rule 9 thresholds without complying with the requirements of Rule 9 or first obtaining a waiver from the Takeover Panel.

Share Option Scheme

Share options have been granted to Gavin Burnell and Luke Cairns as described in in the Admission Document.

In addition, the Company has established the Share Option Scheme pursuant to which options will be granted to certain members of the Enlarged Group's senior management as appropriate in due course. Further details of the new share option scheme and options granted will be set out in the Admission Document.

Dividend policy

The Company is primarily seeking to achieve capital growth for its Shareholders. It is the Board's intention during the current phase of the Enlarged Group's development to retain future distributable profits from the business, to the extent any are generated. The Directors do not anticipate declaring any dividends in the foreseeable future.

EIS and VCT Status

The Company has received advance assurance from HMRC that the New Ordinary Shares to be issued pursuant to the Firm Placing will rank as ''eligible shares'' for the purposes of EIS and will be capable of being a ''qualifying holding'' for the purposes of investment by VCTs, however, none of the Company, the Directors or any of the Company's advisers give any warranty or undertaking that such reliefs will continue to be available and not withdrawn at a later date.

The Directors consider that the Enlarged Group or its subsidiaries have not received, in the 12 months immediately prior to the Placing, any investments (including under EIS and from VCTs) pursuant to a measure approved by the European Commission as compatible with Article 107 of the Treaty on the Functioning of the European Union in accordance with the principles laid down in the European Commission's Guidelines on State aid to promote risk finance investments. Accordingly, the Placing will limit funds up to £5 million from VCTs, investors seeking EIS reliefs and any other State aid risk capital investors in order not to exceed the maximum amount of £5 million that can be raised annually through risk capital schemes.

Proposed change of name

A special resolution will be proposed at the General Meeting to approve the change of the name of the Company to N4 Pharma plc. If the resolution is passed, the Company's AIM symbol will be changed to N4P and its website address will be changed to www.n4pharma.com with effect from Admission.

General Meeting

To enable the Proposals to be implemented, it is necessary for Shareholders to:

a) approve the Acquisition;

b) approve the Share Re-organisation;

c) give the Board the necessary authorities to allot the New Ordinary Shares; and

d) approve the change of name of the Company to N4 Pharma plc.

The General Meeting is to be held at 11.00 a.m. on 2 May 2017 at the offices of Edwin Coe LLP, 2 Stone Buildings, Lincoln's Inn, London WC2A 3TH where the following Resolutions will be proposed:

• Resolution 1, which will be proposed as an ordinary resolution, is to approve the acquisition of N4 Pharma for the purposes of Rule 14 of the AIM Rules for Companies;

• Resolution 2, which will be proposed as an ordinary resolution, is to authorise the Directors to allot relevant securities for the purposes of section 551 of the Companies Act provided that such power be limited to the allotment of New Ordinary Shares of (i) up to a maximum nominal amount of £36,409 in connection with the Acquisition Agreement; (ii) £177,700.84 (i.e. being equal to the maximum number of New Ordinary Shares and Broker Shares available under the Firm Placing and the issue of New Ordinary Shares pursuant to the exercise of the Warrants and the Broker Warrants), and (iii) £28,571 (representing approximately 10 per cent. of the Enlarged Share Capital) otherwise than in connection with the Acquisition Agreement, the Firm Placing and the issue of New Ordinary Shares and the Broker Warrants;

• Resolutions 3 and 4, which will be proposed as ordinary resolutions, to approve the share Re-organisation.

• Resolution 5, which will be proposed as a special resolution, grants the Directors authority to allot equity securities for cash as if section 561 of the Companies Act did not apply to such allotment, provided that such power shall be limited to, inter alia, (i) the allotment of New Ordinary Shares pursuant to the Firm Placing and exercise of the Warrants and (ii) otherwise the allotment of equity securities up to an aggregate nominal amount of £28,571; and

• Resolution 6, which will be proposed as a special resolution, to change the name of the Company to N4 Pharma plc

All of the Resolutions need to be approved by Shareholders for the Proposals to be implemented and all of the Resolutions are inter-conditional.

CAPITAL RAISING & ADMISSION STATISTICS

Notes:

(1) Assuming Admission of all the Firm Placing Shares and the issue of the Consideration Shares (where applicable) and that no other Ordinary Shares are issued between the date of this announcement and Admission

(2) The new AIM Ticker shall become effective only if the Resolutions are passed at the General Meeting

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Notes:

(1) References to times in this announcement are to London, UK time (unless otherwise stated).

(2) The timing of the events in the above timetable and the rest of this announcement is indicative only. If any of the above times and/or dates are adjusted by the Company (with the agreement of Stockdale Securities and Beaufort Securities), the revised times and/or dates will be notified to the London Stock Exchange by an announcement via an RIS release and, where appropriate, to Shareholders.

DEFINITIONS

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