SOLO.L Regulatory News (SOLO)

15 Mar 2007 12:30

St James's Energy PLC15 March 2007 15 March 2007 St James's Energy plc ("St James's") Offer to acquire Immersion Technology International plc ("Immersion") Audio speaker technology business to list on AIM via a reverse takeover Further to the announcement of 7 March 2007, The Board of St James's Energy ispleased to announce that it has today published an Offer Document and anAdmission Document relating to the proposed acquisition of Immersion. Thedefined terms used in this announcement have the meaning as given to them in theAdmission Document. The Offer Document has today been sent to all Immersion shareholders and has afirst closing date of 30 March 2007. St James's has received irrevocableundertakings of acceptance of the Offer in respect of 132,400,000 Immersionshares, representing 75.3 per cent. of the total issued share capital ofImmersion. The Admission Document has today been sent to all St James's shareholders andalso to the Immersion shareholders. Copies are available from Nabarro Wells &Co. Limited, Saddlers House, Gutter Lane, London EC2V 6BR. Interested partiesare advised to read the whole of the Admission Document and not rely solely onthe summary information presented in this announcement. Shareholders will also be asked to approve a consolidation of the share capitalof St James's Energy on the basis of one New Ordinary Share for every sevenExisting Ordinary Shares held. In this announcement, references to New OrdinaryShares therefore refer to St James's Energy ordinary shares followingconsolidation. What is Immersion? • Immersion is an audio technology company with patented and patentpending technologies relating to both its high performance electrostaticloudspeakers (''ESL'') and award-winning conventional cone loudspeakers (''CCL'') (herein referred to as "Immersion Technology"). • The Immersion Technology has been researched and developed for over10 years and has been designed with the intention to provide the highestpossible audio reproduction characteristics and set a new standard to benchmarkthese characteristics. Immersion has achieved what the Immersion Directorsconsider to be a new level of high definition acoustics and has made anapplication to register the trade marks, HD-ATM or High Definition -AcousticsTM, to reflect this standard internationally. • The Immersion Technology reduces audio distortion to extremely lowlevels thus enhancing clarity without compromising volume in both ESL and CCLloudspeakers. • Immersion has the ability to manufacture ESL devices in thin, smallaesthetically pleasing designs. In addition, the technology is proven to bescalable and can be incorporated into speakers of almost any size or shape. TheImmersion Directors believe that these factors will provide a significantmarketing advantage in the competitive market for audio reproduction devices. • On 22 December 2006, Immersion signed a 3 year manufacture andsupply agreement for the supply of audio speaker products with a premieraudio-visual and multimedia equipment provider Nakamichi Corporation Ltd. Thecontract specifies a delivery schedule for one particular product range wherebyNakamichi indicates that it may order US$12.1 million during the first twoyears, with a minimum order quantity of US$5.5 million during the same period.It is also expected that Nakamichi will commission further products fromImmersion. • Immersion has also signed licence agreements for the use of theImmersion Technology with Alpine Electronics of UK Limited, a leading supplierof mobile media systems, and with BSS Audio Limited, a Harman Internationalgroup company. Harman is a worldwide leader in the manufacture of high quality,high fidelity audio and electronic products for automotive consumer andprofessional use. • The Immersion Technology has already achieved industry recognitionand awards, for example, at the 2006 and 2007 Consumer Electronics Show in LasVegas and the Sound and Image Awards in 2004 in Sydney. How is Immersion Different? • Immersion has developed a multi-tiered strategy forcommercialisation of its technology. The corporate strategy can be divided intothree key areas; manufacturing, sales (including licensing) and marketing. Manufacturing • Immersion intends to outsource the manufacture of components for theproducts to third parties. The speakers will be assembled at a plant alreadyidentified in the Nanjing Jiangming Economic and Technological Development Zone.Companies such as Ford, Sony Ericsson, Pepsi-Cola and Toshiba already have apresence in the zone and Immersion intends to initially invest US$250,000 toprovide for production, assembly and quality control testing. • The principal advantage of this strategy is to exploit the costadvantages of China manufacturing against a volume driven sales strategydesigned to deliver high margins. Sales • Immersion's sales strategy encompasses four distinct elements. Inorder to diversify its revenue streams Immersion will firstly leverage itsexisting Original Equipment Manufacturing "OEM" distribution channels bycontinuing to concentrate on the design, development and manufacture of productsfor existing Consumer Electronic Manufacturer "CEM" customers. • Secondly, Immersion will manufacture and promote CCL audiophileproducts under the existing Immersion/Whise brands for retail distribution. • Thirdly, Immersion will manufacture products for commercial/industrial applications together with custom designed complete systems. • Fourthly, Immersion will licence trademarks and logos to customersto be displayed on customers own products. Marketing • Immersion recognises that consumer awareness of its products is keyto its commercial success. The Immersion Directors intend to invest insignificant marketing and brand recognition activities. Immersion will build itsbrand internationally through a combination of association with CEMs, directmarketing, trade verification in key audio publications, trade fairs andexhibitions and public relations. Potential Market • The world market for audio reproduction devices is considerable. Inhi-fi loudspeakers, sales were expected to reach US$3.682 billion by the end of2006. With the increased uptake of new consumer electronics products such asplasma and LCD television screens, which incorporate speaker technology, theImmersion Directors believe that the prospects for growth are strong, Commenting on the planned Admission, Craig Evans, Chief Executive of Immersionsaid: "We are delighted with the prospect of becoming an AIM company. We believe ournew investors will be thoroughly impressed with Immersion's achievements todate. However, we see this as just the beginning; we are encounteringsignificant levels of interest in our speakers from a broad range of players inthe Consumer Electronics industry. Our multi-tiered approach means that we canmanage this demand in a variety of ways. Such a pipeline of potential ordersmeans we can look forward to an exciting future." Key Information Immersion • On 22 December 2006, Immersion signed a manufacture and supplyagreement for the supply of a product incorporating its technologies with apremier audio/visual and multimedia equipment provider, Nakamichi CorporationLimited. The contract is for the supply of a hybrid ESL and CCL product. Thecontract is for a period of three years and includes a delivery schedule wherebyNakamichi indicates that it may order US$12.1 million during the first twoyears, with a minimum order quantity of US$5.5 million during the same period.Immersion has developed and patented a series of technologies for application inaudio speakers. Reasons for the Acquisition • The Board has considered a number of opportunities within the statedinvestment focus. However, the Board was unable to identify a transaction thatwould meet its investment criteria. In particular, the Board found that assetsin the upstream energy and utilities sectors were either overpriced or too faraway from a revenue stream. However, through their contacts, the ExistingDirectors have seen an increasing number of potential technology transactions.The Existing Directors believe that the technology sector has been relativelyundervalued since 2001 and many products which were in the embryonic stagebetween 2000 and 2001, are now coming to commercialisation. • The Board considers that the acquisition of Immersion represents anexcellent opportunity to enter the audio technology market for two main reasons.Firstly, Immersion represents an investment which is currently generatingrevenue and, in addition, has a contract in place with a premier audio/visualand multimedia equipment provider. Secondly, the Existing Directors believe thatthe current lack of market penetration of ESL loudspeakers (which according toresearch by Global Industry Analysts, was only 2 per cent. of a US$3.5 billionhi-fi speaker market in 2005) was largely due to its premium price over CCLloudspeakers. The Immersion Directors believe that the technology owned byImmersion offers superior audio performance at a cost that is competitive withthe dominant CCL technology, which will enable them to target the entireloudspeaker market. The Board • It is proposed that Christopher Lambert will continue as Chairman ofthe Company and Kiran Morzaria will become a non-executive director of theCompany. Timothy Wall will step down on Completion. Subject to Completion andAdmission, the Immersion Directors will be appointed to the board of St James'sEnergy. The City Code and Concert Party • Following discussions with The Panel on Takeovers and Mergers, allof the shareholders of Immersion are considered to be sufficiently closelyconnected to be deemed to be acting in concert for the purposes of the CityCode. In addition, certain St James's Energy Shareholders are deemed to beacting in concert for the purposes of the City Code because they are alsoco-investors in Immersion or in a number of other private and public companies.The Concert Party will own approximately 84.2 per cent. of the Enlarged ShareCapital, assuming exercise in full by members of the Concert Party of theoptions issued as part of the Acquisition (and assuming that no other personexercises any options). • The Panel has been consulted and has agreed to waive any obligationof the Concert Party, which would otherwise arise as a result of theimplementation of the Proposals, to make, pursuant to Rule 9 of the City Code, ageneral offer for the Company, subject to resolution 3 (as set out in the noticeof EGM) being passed on a poll of Independent Shareholders. To be passed, thisresolution will require a simple majority of votes cast on a poll by IndependentShareholders. • Following Completion, the Company and the Shareholders will nolonger be entitled to the protections afforded by the City Code. On the basis ofconversations with the Panel, the Enlarged Group would not be considered by thePanel to have its place of central management and control in the UK. Lock-in Arrangements • Under the AIM Rules, the Existing and Proposed Directors, applicableemployees (as defined in the AIM Rules) and Shareholders holding more than 10per cent. of the New Ordinary Shares, whose interests in the Company in totalwill amount to 42.6 per cent. of the issued New Ordinary Shares on Admission(assuming the Offer is accepted in full) have undertaken not to dispose of anyinterest in their New Ordinary Shares for a minimum period of twelve monthsfollowing Admission except in the very limited circumstances allowed by the AIMRules and for the period of a further twelve months, not to dispose of anyinterest in their New Ordinary Shares except with the prior written consent ofNabarro Wells (except very limited circumstances). • In addition, Shareholders who received Immersion Shares as a resultof and in connection with the sale of assets by Winovate to Immersion, andShareholders who received Immersion Shares as a result of the sale of Whise toImmersion, which amount to 27,100,000 New Ordinary Shares (representing 12.0 percent. of the issued New Ordinary Shares on Admission assuming the Offer isaccepted in full), have undertaken not to dispose of any interest in their NewOrdinary Shares for a minimum period of twelve months following Admission exceptin very limited circumstances and, for the period of a further twelve months,not to dispose of any interest in their New Ordinary Shares except with theprior written consent of Nabarro Wells (except in limited circumstances). • In addition, Shareholders who invested in Immersion in the firstround of investment following its incorporation, which amount to 33,250,000 NewOrdinary Shares (representing 14.8 per cent. of the issued New Ordinary Shareson Admission assuming the Offer is accepted in full), have undertaken not todispose of any interest in their New Ordinary Shares for a minimum period of sixmonths following Admission except in very limited circumstances and, for theperiod of a further six months, not to dispose of any interest in their NewOrdinary Shares except with the prior written consent of Nabarro Wells (exceptin limited circumstances). • In addition, Novus Capital Markets Limited, have undertaken not todispose of any interest in their holding of 800,000 New Ordinary Shares for theperiod of six months following Admission, except with the prior written consentof Nabarro Wells (except in very limited circumstances). Change of Name • Subject to the approval of St James's Energy Shareholders and uponCompletion, the name of the Company will change to Immersion TechnologiesInternational plc on Admission. Risk Factors • Prior to investing in the Company, prospective investors shouldconsider, together with the other information contained in the AdmissionDocument, the risks and other factors attaching to an investment in the Company,including in particular, the factors set out in the Admission Document Background to and Reasons for the Acquisition In the Company's AIM admission document dated 5 May 2006, the Board stated itsintention to make investments in the upstream energy and utilities sector. TheCompany's geographic focus was stated as Europe and the Asia Pacific Region. Since this time, the Board has considered a number of opportunities of which twowere taken to the advanced negotiation stage and one was taken to the advanceddue diligence stage. However, the Board were unable to identify a transactionthat would meet its investment criteria. In particular the Board found thatassets in the upstream energy and utilities sector were either overpriced or toofar away from a revenue stream. However, through their contacts, the ExistingDirectors have seen an increasing number of potential technology transactions.The Existing Directors believe that the technology sector has been relativelyundervalued since 2001 and many products which were in the embryonic stagebetween 2000-2001 are now coming to commercialisation. The Board considers that the acquisition of Immersion represents an excellentopportunity to enter the audio technology market for two main reasons. Firstly,Immersion represents an investment which is currently generating revenue and inaddition, has a contract in place with a premier audio/visual and multimediaequipment provider. Secondly, the Existing Directors believe that the currentlack of market penetration of ESL loudspeakers (which according to research byGlobal Industry Analysts, was only 2 per cent. of a US$3.5 billion hi-fi speakermarket in 2005) was largely due to its premium price over CCL loudspeakers. TheImmersion Directors believe that the technology owned by Immersion offerssuperior audio performance at a cost that is competitive with the dominant CCLtechnology, which will enable them to target the entire loudspeaker market. The Immersion CCL technology was acquired by way of the acquisition of Whise byImmersion on 20 October 2006. It is award winning technology and already earnsImmersion revenue through licensing in the automotive sector with companies suchas Alpine Electronics and Harmon International. Background to Immersion Immersion was incorporated on 2 March 2006 to acquire and commercialise the IPrights related to ESL technology which had been developed by Winovate, anAustralian technology incubator, as set out in the asset sale agreementsummarised in paragraph 6.4 of Part X of the Admission Document. More than ten years of research and development had been invested into the ESLtechnology acquired by Immersion. The original ESL IP was created by VassElectronics Pty Ltd and was purchased and further developed by Winovate from itsincorporation on 5 December 2001. The current ESL technology is a combination ofpatented technologies, know-how and trade secrets, which improve thecharacteristics and design of the generic electrostatic loudspeaker and enabletheir manufacture in large quantities at an extremely competitive cost whilstretaining their acknowledged superior audio qualities. In May 2006, Immersion was introduced to the award-winning low frequency, CCLbased, audio technologies owned by another private Australian company, WhiseAcoustics. The Immersion Directors formed the view that the Whise technologiescomplemented Immersion's ESL technology and would further strengthen Immersion'smarket potential. Immersion entered into a share sale agreement to acquireWhise, as summarised in paragraph 6.5 of Part X of the Admission Document, whichwas completed in October 2006. Immersion has not traded since incorporation. At 11 July 2006 its net assetswere 409,000. The turnover and loss after tax of Whise for the three years ended 30 June 2006are as follows: 2004 2005 2006 A$'000 A$'000 A$'000Revenues from 355 549 295Ordinaryactivities Net profit/ (640) (39) (379)(loss) afterincome tax At 30 June 2006 the net assets of Whise were A$596,000. The Immersion Technology Immersion is an audio technology company with patented and patent pendingtechnologies. Immersion's technologies relate to both high performanceelectrostatic loudspeakers (''ESL'') and award-winning conventional coneloudspeakers (''CCL'') and Immersion's ability to reduce audio distortion toextremely low levels thus enhancing clarity without compromising volume.Immersion's primary sales strategy is to manufacture and sell its audiotechnology to Consumer Electronics Manufacturers (''CEM'') with their ownestablished distribution, promotion and routes to market. On 22 December 2006,Immersion signed a manufacture and supply agreement for the supply of productincorporating Immersion's technology with a premier audio/visual and multimediaequipment provider, Nakamichi Corporation Limited. After more than ten years of research and development, the Immersion ESLtechnology is now being commercialised. Designed with the intention to providethe highest possible audio reproduction characteristics and set a new standardto benchmark these characteristics, Immersion has achieved what the ImmersionDirectors consider to be a new level of high definition acoustics and has madean application to register the trade marks, HD-ATM or High Definition -AcousticsTM, to reflect this standard internationally. Immersion's technology reduces audio distortion to extremely low levels thusenhancing clarity without compromising volume. Immersion also has the ability tomanufacture the devices in thin, small aesthetically pleasing designs and theImmersion Directors believe that these factors will provide a significantmarketing advantage in the competitive market for audio reproduction devices. The high performance characteristics of Immersion's technologies are attained intwo ways: 1. improving the operation of an ESL with Immersion's proprietary technology(ESL is generally regarded as superior to CCL for sound reproduction) subject toeleven specific patent applications; and 2. improving the operation of a CCL with PAMTM, NTMTM and VR/URTM also beingproprietary technologies to Immersion, covered by seven granted patents and fourpatent applications. Both technologies have already received industry recognition, including: Consumer Electronics Show, Las Vegas, January 8th to 11th - Innovations 2007Awards Honourees Since 1989, the prestigious Innovations Design and Engineering Awards at CEShave given consumer technology manufacturers and developers an opportunity tohave their newest products judged by a pre-eminent panel of independentindustrial designers, independent engineers and members of the trade press.Immersion has supplied its ESL technology to Nakamichi Corporation Limited forthe Nakamichi HD-ATM hybrid speaker (ESL and CCL) which is one of twelvehonourees at the CES event in the ''Home Theater Audio'' category. CES statesthat the Nakamichi HD-ATM hybrid speaker ''belongs to higher-end realm ofspeakers, herald an era of hybrid electrostatic technologies, designed withengineering sophistication and deserved its reputation for excellence.'' 119a Active Subwoofer Wins 2004 Sound & Image Award At the 2004 Sound and Image Awards held in Sydney in June 2004, Whise took theaward for best active sub bass CCL speakers in the AU$1,000-2,999 category. Thejudges commented: ''This small sub is packed with innovative technology thatlets it take on - and beat - subwoofers twice its size and price''. Principal terms of the Acquisition The Offer is contained in a letter from St James's Energy forming part of anOffer Document being sent to the shareholders of Immersion. The Offer is subjectto certain conditions and further terms as set out in the Offer Document and isbeing made on the following basis: for each Immersion Share one Acquisition Share and so in proportion to any other number of Immersion Shares held. Assuming the issue of the maximum number of Acquisition Shares and that noadditional Ordinary Shares are issued in the period from the publication of theAdmission Document to the time when the Offer is declared unconditional as toacceptances, the enlarged issued share capital of St James's Energy would beheld on such date, as to 78.2 per cent. by Immersion Shareholders. On thisbasis, the Offer values the existing issued ordinary share capital of Immersionat approximately £19.7 million, based on the closing share price of the StJames's Energy Shares on 7 March 2007, being the last Business Day on which StJames's Energy Shares were able to be traded on AIM prior to the publication ofthe Admission Document. As described in the Admission Document, it is expected that two currentshareholders of Immersion will become entitled to have issued to them a further1,731,646 Immersion Shares on 1 July 2007, representing approximately 0.97 percent. of the entire issued share capital of Immersion. These Immersion Shareswill not be subject to the Acquisition and so it is expected that theseshareholders will hold a minority shareholding in Immersion as from 1 July 2007. Current Trading and Prospects As at the date of the Admission Document, it is intended that the existing StJames's Energy funds will be expended on: £'mSales & marketing strategy 1.2Product development 0.6Establish manufacturing assembly facilities in China 0.5Further develop and protect the Company's IP 0.2Provide general working capital 0.5Costs of Admission 0.5 3.5 Board of Directors Subject to Completion and Admission, the Immersion Directors will be appointedto the board of St James's Energy. The directors of the Company followingCompletion and Admission to AIM will be: Christopher Lambert, aged 48 (Non Executive Chairman) Mr Lambert has 22 years' experience in investment banking and commodity markets,holding positions including Director of Precious Metals Trading Europe forPrudential Bache Securities Inc. and head of precious metals trading (UK) forBarclays Bank plc. During this period, he structured a number of majortransactions for central banks, governments and mining companies. He hassubsequently acted as a consultant to mining companies on financial strategies.Mr Lambert is also chairman of two other AIM listed companies. Craig Douglas Evans, aged 39 (Chief Executive Officer) Mr Evans studied engineering at RMIT (Royal Melbourne Institute of Technology)and has a background of more than 15 years' experience as an executive forvarious private companies and has spent almost five years as a General Managerwithin the Tyco International Group. He has a strong operational background inmanufacturing, strategic development, operational excellence, programimplementation, acquisition opportunities and plant rationalisation, developmentand expansion both in Australia and China. Prior to his appointment as CEO ofImmersion, he acted as General Manager of Winovate, being the private companythat developed the ESL technology, and is a co-inventor of the manufacturingpatents for the Immersion technology. Vincent Fodera, aged 36 (Executive Director) Mr Fodera holds a Bachelor of Laws degree from Bond University. He is aBarrister and Solicitor of the High Court of Australia and the Supreme Court ofVictoria. He has over 10 years' experience in Commercial and IntellectualProperty Law, providing key strategic, contractual and corporate advice. He hasdeveloped key marketing strategies and overseen the industrial relations andfinancial management of several private companies, including the development andimplementation of commercial operating plans. Mr Fodera has a genuine interestin and an understanding of Immersion's technology and developed Immersion'strade marks. Blair Snowball, aged 33 (Finance Director) Mr Snowball, based in London, has 13 years of international experience infinance and advisory roles. He is a qualified accountant and an Associate of theInstitute of Chartered Accountants of Australia. After completing his Bachelorof Commerce at the University of Western Australia, Mr Snowball worked for fouryears at KPMG in Audit & Advisory. He then moved to Ireland where he helpedestablish Barclays Insurance (Dublin) Ltd for the Barclays Group. After a yearwith a private bank in London and the Channel Islands, he joined Cable &Wireless plc in 2000 and performed various finance management roles in bothEurope and the Caribbean before joining Immersion in 2006. Kiran Morzaria, aged 32 (Non-executive Director) Mr Morzaria holds a Bachelor of Engineering (Industrial Geology) from theCamborne School of Mines and an MBA (Finance) from CASS Business School. He hasfive years of exploration, mining and civil engineering experience. He wasappointed Finance Director of River Diamonds plc in 2004 and since then has beenoverseeing the development of its mining and exploration projects in SierraLeone and Brazil. In this role, Mr Morzaria has been involved in acquisitions,joint ventures, valuations, independent experts' reports, due diligence andcapital raisings. Mr Morzaria is currently an executive director of St James'sEnergy, but upon Admission will become a non-executive director. Mr Morzaria isalso a non-executive director of two other AIM listed companies. Sandy Barblett, aged 39 (Non-executive Director) Mr Barblett has extensive experience in sales and marketing having previouslyworked for the last ten years at Pace Micro Technology plc, where he wasemployed in senior executive management roles in the US, Asia Pacific and alsoEurope, Middle East and Africa. Mr Barblett holds a Bachelor of Laws fromUniversity of Queensland and a Bachelor of Business from Curtin University ofTechnology. Mr Barblett acts in various corporate advisory roles for start-uptechnology companies and is currently a non-executive director of Apogee Power,Inc and was previously a director of AIM traded company, Microfuze Internationalplc. Gregory Turnidge, aged 53 (Non-executive Director) Mr Turnidge has had a diverse range of experience in his 30 year career. Afterworking for the Reserve Bank of Australia, Mr Turnidge took up a senior policyadvisory role for the Victorian Chamber of Manufactures. He was seconded to workin the Office of Management and Budget in the Victorian Government in 1982 andwas subsequently appointed Managing Director of Aluvic Pty Ltd, a company hegrew to an annual revenue base of A$250 million before being sold in 1998 forA$500 million. Mr Turnidge has undertaken capital raisings, public listings,major foreign exchange transactions and cross border financings. He hasestablished and operated joint ventures in the USA, France and China and engagedextensively in international commercial and trade arrangements, especially incommodities. He has developed detailed experience in financial administration,human resource management systems and employee motivation programs and continuesto act as a mentor to a number of senior executives. Timothy Wall, aged 30 (Non-executive Director) Mr Wall, who has been a director since St James's Energy was first admitted totrading on AIM, will step down on Completion and Admission to AIM. Mr Wall holdsa Bachelor of Commerce degree from the University of Western Australia. He is anAssociate of the Institute of Chartered Accountants of Australia with over eightyears corporate and financial accounting experience. After spending three yearsworking in Corporate Services for the Horwath Group in Australia, Mr Wall hasspent the last five years performing various financial management and companysecretarial roles in London. In 2004, Mr Wall was involved in establishing theLondon Office of Global Education Management Systems (GEMS) and performing anongoing corporate accounting function. Mr Wall currently acts as FinanceDirector for MicroFuze International plc, which is quoted on AIM, as well asperforming other corporate advisory roles. Further information on the Directors and the Proposed Directors is set out inthe Appendix to this announcement. Extraordinary General Meeting The Admission Document contains a Notice of Extraordinary General Meeting to beheld at No.1 Cornhill, London EC3V 3ND at 10am on Wednesday 11 April 2007 atwhich resolutions will be proposed, as set out in the Admission Document,including ordinary resolutions to approve the Acquisition and the issue ofConsideration Shares and to approve the waiver of the obligation by the ConcertParty to make a general offer under Rule 9 of The Takeover Code. - Ends - Enquiries: St James's Energy plc5th Floor, 22 Arlington Street, London SW1A 1RDKiran Morzaria + 44 (0) 20 7016 5100 Nabarro Wells & Co. LimitedSaddlers House, Gutter Lane, London EC2V 6BRHugh Oram/Anthony Rowland +44 (0) 20 7710 7400 Immersion Technology International plc3rd Floor, 55 Gower Street, London, U.K., WC1E 6HQCraig Evans/Blair Snowball +44 (0) 20 7016 5107 Pelham Public RelationsNo.1 Cornhill, London EC3V 3NDArchie Berens/Hugh Barker +44 (0) 20 7743 6670 APPENDIX Further information on the Directors and the Proposed Directors In addition to the directorships in the Company, the Existing and ProposedDirectors hold or have held the following directorships within the five yearsimmediately prior to the date of this Document: Name Current Directorships Past DirectorshipsChristopher Lambert Altona Resources plc Grosvenor Holdings plc Braemore Resources plc Robert Leech & Partners Simply Overseas Property Ltd (Lingfield) Ltd Tau Resource Finance Ltd Empyrean Energy plc Walkerton Ltd PepinNini Minerals ltd Cue Energy plc Summit Resources plc Simply Overseas Property Consortium LLP Western Consolidated Nickel Pty Kiran Morzaria Brinkley Mining plc MicroFuze International plc Hot Tuna (International) plc Arlington Resources plc Our Forgotten Children Limited Green Hair Services Ltd Green Park Finance plc River Diamonds Plc River Diamonds UK Limited The World's Children Limited Tubutama Borax Limited Tubutama Limited Tim Wall Microfuze International plc Condor Resources plc Nippy Training Ltd Brinkley Mining Ltd Immersion Technology International Limited API Technology (UK) Limited Green Park Finance plc Arlington Resources plc Craig Evans Miami Properties Pty Ltd Chezann Pty Ltd Maison a la Mode Pty Ltd Wangebaa Pty Ltd Immersion Technology International plc Powerbond Creations Pty Ltd Whise Acoustics Limited Sandmore Holdings Pty Ltd Whise Technologies Pty Ltd Whise Automotive Pty Ltd Vincent Fodera Thomasia Holdings Pty Ltd none Fodera Holdings Pty Ltd Immersion Technology International plc Whise Acoustics Limited Whise Technologies Pty Ltd Whise Automotive Pty Ltd Blair Snowball Immersion Technology International plc Echo Delta Romeo Ltd APIT (UK) Limited Alexander Barblett Apogee Power Inc Pace Asia Pacific Ltd Immersion Technology International plc Microfuze International plc Gregory Turnidge Melbourne Venture Partners Pty Ltd Moretorque Pty Ltd Melbourne Venture Securities Pty Ltd Precision Audio Pty Ltd Close the Loop Ltd and subsidiaries Creative Learning Galen Investments Pty Ltd Consultants Pty Ltd Immersion Technology International plc Kids on Collins Pty Ltd Whise Acoustics Limited Direct Chill Casting Pty Ltd Whise Technologies Pty Ltd Narkoojee Pty Ltd Whise Automotive Pty Ltd Christopher Lambert was a director of Grosvenor Holdings plc, which went intocreditors' voluntary liquidation on 21 October 1998. No criticism of thedirectors of that company was made by the liquidator. Craig Evans was a director of Chezann Pty Ltd (''Chezann'') until August 2005,subsequently went into creditors' voluntary liquidation on 24 February 2006because monies owed to a company whose beneficial owners are similar toChezann's. Save as disclosed above, none of the Directors has: • any unspent convictions in relation to indictable offences; • had any bankruptcy order made against him or entered into anyvoluntary arrangements; • been a director of a company which has been placed in receivership,compulsory liquidation, creditors voluntary liquidation, administration, beensubject to a company voluntary arrangement or any composition or arrangementwith its creditors generally or any class of its creditors whilst he was adirector of that company or within the 12 months after he ceased to be adirector of that company; • been a partner in any partnership which has been placed in compulsoryliquidation, administration or been the subject of a partnership voluntaryarrangement whilst he was a partner in that partnership or within the 12 monthsafter he ceased to be a partner in that partnership; • been the owner of any assets or a partner in any partnership which hasbeen placed in receivership whilst he was a partner in that partnership orwithin 12 months after he ceased to be a partner in that partnership; • been publicly criticised by any statutory or regulatory body(including recognised professional bodies); or • been disqualified by a court from acting as a director of any companyor from acting in the management or conduct of affairs of a company. The following contracts have been entered into between Immersion and theProposed Directors governing their appointment as directors and setting out thebasis on which they will provide services to Immersion. The Proposed Directorshave agreed that upon Admission, such contracts and service obligations will betransferred to the Company: Craig Evans has executed an executive director's service agreement dated 1August 2006 which is effective from 1 August 2006, with Immersion. The agreementprovides for an annual fee of £13,200 plus a one-off bonus of £1,000 payableupon Admission and a further bonus of £4,900 payable on the achievement of thefollowing: (a) obtaining a contract for products in excess of US$4m; and (b)obtaining orders for such products in excess of US$1m cumulatively. The contractis terminable on twelve months written notice by either party. In addition to his service agreement, Craig Evans has, through a company calledMiami Properties Pty Ltd (''MP''), executed a consultancy agreement dated 1August 2006 which is effective from 1 April 2006 for an annual fee of £118,800plus a one-off bonus of £14,000 payable upon Admission and a further bonus of£44,100 payable on the achievement of the following: (a) obtaining a contractfor products in excess of US$4m; and (b) obtaining purchase orders for suchproducts in excess of US$1m cumulatively. Under the terms of the consultancyagreement, MP has undertaken to provide the services of Mr Evans to Immersion toimplement the strategies of Immersion, manage the business, formulate strategiesto promote and improve the financial performance, advise the Board and ensureproper implementation of Immersion's policies. The contract is for an initialfixed period of 36 months and thereafter is terminable on twelve months writtennotice by either party from the effective date. Vincent Fodera has executed an executive director's service agreement dated 1August 2006 which is effective from 1 August 2006, with Immersion. The agreementprovides for an annual fee of £10,800 plus a one-off bonus of £1,000 payableupon Admission and a further bonus of £4,100 payable on the achievement of thefollowing: (a) obtaining a contract for products in excess of US$4m; and (b)obtaining orders for such products in excess of US$1m cumulatively. The contractis terminable on twelve months written notice by either party. In addition to his service agreement, Vincent Fodera has, through a companycalled Fodera Holdings Pty Ltd (''FH''), executed a consultancy agreement dated1 August 2006 which is effective from 1 April 2006 for an annual fee of £97,200plus a one-off bonus of £14,000 payable upon Admission and a further bonus of£36,900 payable on the achievement of the following: (a) obtaining a contractfor products in excess of US$4m; and (b) obtaining orders for such products inexcess of US$1m cumulatively. Under the terms of the consultancy agreement, FHhas undertaken to provide the services of Mr Fodera to Immersion to implementthe strategies of Immersion, manage the business, formulate strategies topromote and improve the financial performance, advise the Board and ensureproper implementation of the Immersion's policies. The contract is for aninitial fixed term of 36 months and is terminable on twelve months writtennotice by either party from the effective date. Blair Snowball has executed an executive director's service agreement dated 1August 2006 with Immersion. The agreement provides for an annual fee of £96,000plus a one-off bonus of £15,000 payable upon Admission and a further bonus of£20,000 payable on the achievement of the following: (a) obtaining a contractfor products in excess of US$4m; and (b) obtaining orders for such products inexcess of US$1m cumulatively. The contract is terminable on twelve monthswritten notice by either party. Alexander Barblett has executed a non-executive Directors appointment letterdated 1 August 2006, which provides for a monthly fee of £3,000 plus a one-offbonus of £15,000 payable on Admission. Under the terms of the appointmentletter, Mr Barblett shall be available for such time as is necessary to attendboard meetings of Immersion which is expected to be five days per month. Theappointment letter is terminable on three months' notice at any time on or after1 August 2007. Gregory Turnidge has executed a non-executive Directors appointment letter dated13 November 2006, which provides for a monthly fee of £3,000 plus a one-offbonus of £10,000 payable upon Admission. Under the terms of the appointmentletter, Mr Turnidge shall be available for such time as is necessary to attendboard meetings of Immersion which is expected to be five days per month. Theconsultancy agreement is terminable on three months' notice at any time on orafter 13 November 2007. This information is provided by RNS The company news service from the London Stock Exchange