Staffline Regulatory News (STAF)

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

FURTHER, THIS ANNOUNCEMENT IS MADE FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR SOLICITATION TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE SHARES IN STAFFLINE GROUP PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION ("MAR"). UPON THE PUBLICATION OF THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

27 June 2019

Staffline Group plc

("Staffline", the "Company" or the "Group")

Proposed Placing to raise up to £34 million via an accelerated bookbuild

and

Proposed Open Offer to raise up to approximately £7 million

Staffline (AIM:STAF), the Recruitment and Training group, announces that it is proposing to raise up to £41 million, before expenses, by way of a Placing to raise up to £34 million and an Open Offer to raise up to £7 million (the "Transaction") at a price of 100 pence per share (the "Issue Price"). The net proceeds of the Transaction will allow the Group to reduce its indebtedness.

Staffline has also announced its results for the financial year ended 31 December 2018 earlier today. The Company's Annual Report is available on the Company's website at https://www.stafflinegroupplc.co.uk/investor-relations/.

Key Highlights

· Proposed Placing of up to £34 million (before expenses) with institutional shareholders and proposed Open Offer of up to approximately £7 million (before expenses) with Qualifying Shareholders in each case at the Issue Price.

· Issue Price of 100 pence per New Ordinary Share.

· The Company intends to use the net proceeds of the proposed Placing to reduce net debt.

· Target leverage of net debt / EBITDA of below 2x by 31 December 2019 including proceeds of the Placing.

· All proceeds of the Open Offer will be used to further reduce net debt.

· Liberum Capital Limited ("Liberum") is acting as Financial Adviser and Sole Bookrunner in relation to the Placing and Open Offer.

· Completion of the Placing and Open Offer is subject, inter alia, to shareholder approval to enable the issue of the New Ordinary Shares, which will be sought at a General Meeting of the Company expected to be held at 9.00 a.m. on 15 July 2019 at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL.

Background to the Transaction

Staffline is a leading workforce recruitment and training organisation.

On 30 January 2019, the Company announced that concerns were brought to the attention of the Board relating to invoicing and payroll practices within the Recruitment division which would be fully investigated.

On 17 May 2019, the Company issued a trading update referencing headwinds faced in the Group's training and recruitment divisions.

On 17 June 2019, the Company announced that as a consequence, the Board expected the Group to require a waiver of possible future breaches to the leverage covenant in its lending agreements. The Company confirmed that it was in constructive discussions with its lenders and, in conjunction, was in discussions with Shareholders with regard to a placing of new ordinary shares to raise approximately £30 million with the target of reducing expected 2019 year-end leverage to 2x net debt / EBITDA. The Company also announced that in the event that it does pursue the placing the Board anticipated also launching an open offer for an additional £7 million to enable wider Shareholder participation.

Following these discussions with both the Group's lenders and Shareholders, the Board believes that reducing the indebtedness of the Group by way of the Placing and Open Offer is in the best interests of the Company. Furthermore, the Company's lenders have agreed to waive covenant obligations in respect of the Company's indebtedness at 30 June 2019, and subject to the Company raising equity, agreed to relax the Company's covenant obligations at the next two quarterly test dates.

Current Trading and Prospects

The Company announced the following trading update on 17 May 2019.

"Recruitment

The ongoing Brexit uncertainty is impacting the UK labour market and has led to a number of customers transferring a significant volume of their temporary workforce into permanent employment to mitigate the risk of that labour market tightening. Typically, this reaction to uncertainty tends to reverse over time, but the Board expects that it will continue to impact temporary worker demand throughout the current year.

A proportion of these "temp to perm" transfers have occurred in the higher margin driving sector, resulting in an overall margin dilution. In addition, the Group is seeing further challenges in the higher margin automotive sector and associated supply chain where reductions in demand have been greater than expected.

There has also been a slowdown in new contract momentum in the current financial year, which the Company largely attributes to the impact of the delay in publication of the 2018 full year results.

Notwithstanding these current headwinds, the Recruitment division is beginning to see the definitive benefits from the Company's market-leading approach to worker engagement and digitally enabled candidate attraction. Management expects this strategy to result in increasing differentiation and to support future growth.

PeoplePlus

In PeoplePlus, the successful transition from a Work Programme provider to the UK's leading skills and training company is almost complete. With approximately 60% of 2020 market consensus revenues already contracted, the Company maintains a positive outlook for PeoplePlus in 2020 under its new operating model. However, performance in 2019 will be affected by continued delays in apprenticeship new starts. This is partially as a result of the slow take-up of the Apprenticeship Levy scheme nationally, but also a reflection of the current economic uncertainty. Sectors such as retail, for example, are delaying apprenticeships whilst store restructure programmes are completed. Nevertheless, management remains confident that this market is attractive, notwithstanding this timing effect. However, the other elements of PeoplePlus, which are expected to contribute c.85% of PeoplePlus revenue in 2020, continue to develop well.

As a consequence of these headwinds, the Board expects the Group to deliver adjusted EBIT in the range of £23 million to £28 million for the financial year ending 31 December 2019."

Trading has continued as expected since 17 May 2019. The Board reiterates the above underlying operating profit guidance for the full year but expects a greater weighting toward the second half of the year than normal due to the transformation in PeoplePlus and the difficulties the Recruitment business has faced in the first half. The Board expects net debt, before the proceeds of the Transaction, to be in line with current market expectations.

Amendments to Credit Facility

Following discussions with the lenders (the "Lenders") of the existing £120,000,000 revolving credit facility (the "Credit Facility"), the Company and the Lenders have agreed certain amendments to the Credit Facility.

The Lenders have agreed to a waiver of all financial covenant tests for the period ending 30 June 2019. The material amendments to the Credit Facility are:

i) relaxation of the September and December 2019 leverage covenants followed by a gradual reduction of the leverage covenant to net debt of less than 2x EBITDA by 31 December 2020;

ii) restrictions on new material share/business and assets acquisitions until January 2021;

iii) prepayment and cancellation of revolving facility commitments by £10,000,000 on 15 November 2019 and 15 November 2020; and

iv) subject to Nomad approval and compliance with the AIM Rules, the Lenders have the ability to nominate a non-executive director to the board of the Company.

In consideration of the aforementioned amendments an amendment fee is to be paid to the Lenders and certain other changes are being made to the Credit Facility (including the removal of the accordion option and the ability to request the Lenders to extend the Credit Facility for an additional 12 months beyond July 2022).

The expiry date for the Credit Facility remains in July 2022. The Company has agreed to pay the Lenders an exit fee based on a percentage of the outstanding commitments when the Credit Facility expires or, if sooner, refinanced.

Importance of Placing

The Bookbuild must close and the Resolutions must be passed by Shareholders at the General Meeting in order for the Transaction to proceed.

If the Bookbuild does not close and/or Shareholders do not approve the Resolutions:

i) the Placing and the Open Offer cannot be implemented; and

ii) under the terms of the Credit Facility, the Group's lenders could (following a short negotiation period) demand repayment of all borrowings, which the Group cannot afford.

In such circumstances, the Board believes that the only realistic option for the Company would be to seek to further renegotiate or refinance the Credit Facility, and there can be no certainty that the Group would be able to do so on commercially acceptable terms or at all. In the event that the Group is unable to renegotiate or refinance the Credit Facility and the Group's lenders were to demand repayment of all borrowings, a working capital shortfall of the amounts owed (less any surplus working capital held immediately before the demand for repayment) would arise, which would have a material adverse effect on the Group's financial condition and prospects. Without the support of the Group's lenders, the Company would be unable to meet its liabilities as they fall due, which would likely result in the Company becoming immediately insolvent and having to cease trading.

Accordingly, it is very important that Shareholders vote in favour of the Resolutions so that the Placing and Open Offer can proceed (assuming that all other conditions are satisfied).

Details of the Placing and Open Offer

The Placing will be conducted by way of an accelerated bookbuild process (the "Bookbuild") which will be launched immediately following this announcement (the "Announcement"), in accordance with the terms and conditions set out in the Appendix to this Announcement (the "Appendix"). Liberum is acting as Sole Bookrunner in connection with the Placing.

The final number of Placing Shares will be agreed by Liberum and Staffline at the close of the Bookbuild, and the result of the Placing will be announced as soon as practicable thereafter. The timing for the close of the Bookbuild and allocation of the Placing Shares shall be at the discretion of Liberum in consultation with the Company. The Placing is not underwritten.

In addition, in order to provide Shareholders who do not take part in the Placing with an opportunity to participate in the proposed issue of New Ordinary Shares, the Company is providing all Qualifying Shareholders with the opportunity to subscribe for Open Offer Shares, to raise up to a further £7 million (before expenses), on the basis of 1 Open Offer Share for every 4 Ordinary Shares held on the Record Date, at the Issue Price. Shareholders subscribing for their full entitlement under the Open Offer may also request additional Open Offer Shares through the Excess Application Facility. The Open Offer is not underwritten.

The issue of the Placing Shares and the Open Offer Shares are conditional, inter alia, on the passing by Shareholders of Resolutions 1 and 2 at the General Meeting of the Company, which is expected to be convened for 9.00 a.m. on 15 July 2019. Application will be made to the London Stock Exchange for the Placing Shares and the Open Offer Shares to be admitted to trading on AIM. Admission for the Placing Shares and Open Offer Shares is expected to become effective and dealings in such shares are expected to commence at 8.00 a.m. on 16 July 2019.

The New Ordinary Shares, when issued, will be fully paid and will rank pari passu in all respects with the Existing Ordinary Shares of the Company.

Directors' Participation

It is intended that Directors will participate in the Placing as follows:

The Appendix (which forms part of this Announcement) contains the detailed terms and conditions of the Placing.

The Circular containing further details of the Placing and Open Offer and convening the General Meeting and containing the Application Form is expected to be despatched to Shareholders following completion of the Bookbuild and will thereafter be available on the Company's website at https://www.stafflinegroupplc.co.uk/investor-relations/.

Enquiries:

Market Abuse Regulation:

This announcement is released by Staffline Group plc and contains inside information for the purposes of the Market Abuse Regulation (EU) 596/2014 ("MAR") and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

The person responsible for arranging the release of this information is Mr Chris Pullen, CEO of the Company.

Overview of Staffline

Staffline is the UK's market leading Recruitment and Training group. It has two divisions:

Recruitment Division

A leading provider of flexible blue-collar workers in the UK, supplying over 60,000 staff per day to c. 1,600 private sector clients, across a wide range of industries including agriculture, drinks, driving, food processing, logistics and manufacturing. It operates from over 450 locations in UK, Eire and Poland. Its leading UK Customer Experience platform provides optimised customer-based staffing management solutions whilst providing market-leading levels of job satisfaction for workers.

PeoplePlus Division

The leading adult skills and training provider in the UK, delivering apprenticeships, adult education, prison education and skills-based employability programmes across the country.

Skills and Training - market leading provider of Apprenticeships (both Levy and non-Levy), learning and development, adult education and health and well-being programmes to the Private and Public sector.

Justice and Community - largest independent provider of education and training services for prisoners and ex-offenders, as well as individual support services for carers and people with disabilities, both at home and in the work place.

Employability - market leading provider of programmes providing back-to-work education, skills support services to the unemployed and enterprise advice to individuals wanting to start their own business.

ADDITIONAL INFORMATION

Background to the Transaction

On the evening of 29 January 2019, the Group auditors received an anonymous email which made various allegations including in relation to payroll and invoicing practices. The same email was also purportedly sent to various regulatory authorities. A sub-committee of the Board - the Investigation Committee - consisting of the Chairman and three Non-Executive Directors, was immediately established in order to consider the allegations and oversee the Group's response. In light of the anonymous email and the preliminary findings from extended audit procedures, the Investigation Committee recommended that an independent legal investigation be conducted, and separate independent expert advice obtained on the Group's obligations with regard to compliance with National Minimum Wage ("NMW") regulations. The independent legal investigation was conducted by Osborne Clarke LLP. Independent expert advice in respect of the NMW was provided by KPMG LLP.

Following the conclusion of the legal investigation there was no material adjustment required to the underlying results. The statutory result was affected by an increase in the NMW provision. The most significant and time-consuming area of the investigation related to the Group's historical compliance with NMW legislation. Liabilities in relation to this have been booked as exceptional, non-underlying charges on the basis of their nature, magnitude and the fact that they relate to a period of six years including and prior to 2018 (the years 2013 to 2018). After a detailed investigation of the Group's self-review and with the benefit of further expert legal advice and independent specialist advice, the Group further reviewed its obligations and liabilities in respect of this matter. As a result of this further review, the Group assessed that its NMW liabilities were higher than initially estimated. In recent years, NMW compliance has emerged as a highly complex area which has affected a significant number of businesses across industry and retail, in particular. The Group's non-compliance was initially identified by a self-review process as part of HMRC's compliance review. It relates to a limited number of food production facilities and the payment for preparation time, which is generally the time spent donning workwear. In these cases, the Group was following its end customers' operational procedures for clocking in and out. These procedures have now been rectified so that all work-related time is paid in accordance with legislation. Any additional time paid is charged to the customer in the same way as all other hours supplied. However, the additional costs incurred in relation to historical non-compliance are not recoverable from customers. The nature, complexity and volume of data to be analysed as part of the additional independent specialist review, and the subsequent audit of this information, was a very significant undertaking which took several months to complete. This was a significant contributor to the delay in finalising the Company's 2018 results.

In relation to payroll practices, the legal investigation identified some non-compliance with relevant employment legislation and regulations including Working Time Regulations 1998, in respect of payments due to leavers. The Group has rectified these issues and believes there is no material liability in relation to this matter. The Group is taking all steps necessary to ensure ongoing compliance with relevant legislation and regulations.

The legal investigation considered the allegations in relation to certain invoicing practices and found that the Company was operating in compliance with relevant legislation and regulations. The legal investigation also identified that certain customer disputes and other claims had not been properly accounted for, and that certain staff had not been transparent in disclosing relevant information to our external auditors. The correction of these matters did not have a material impact on the underlying results for the current and prior financial year.

Finally, the independent review also highlighted areas for required improvement in internal controls and governance in the Group and its recruitment business. This extends to the conduct of certain individuals employed by the business. The Company will deal with this aspect of the review in the appropriate manner. The Group has taken further independent advice in relation to these areas and will implement the recommendations to a best practice standard.

The detailed and thorough nature of the investigation and the completion of the related audit procedures, albeit time consuming, reflects the Group's commitment to operating to the very highest standards of ethics and compliance. It is therefore all the more disappointing that, as a result of the independent review, the Company has identified serious issues. Where issues are raised, they will be thoroughly reviewed. Looking forwards, the Company will benefit from having comprehensively addressed these issues and will act as an exemplar to the wider industry. The Group is committed to its future leadership role within the industry, driving standards and raising ethics. There has been no material impact on the financial statements of the year ended 31 December 2017, or prior periods, and therefore no prior period adjustments are required.

Use of Proceeds

The Placing is expected to raise up to £34 million in gross proceeds (approximately £32 million in net proceeds). The Board currently intends to use the funds raised to reduce indebtedness of the Group. All proceeds of the Open Offer will be used to further reduce indebtedness.

Details of the Transaction

The Company is proposing to raise up to £34 million (before expenses) by way of a Placing of up to 34 million Placing Shares at 100 pence per Placing Share. Alongside the Placing, the Company is making an Open Offer pursuant to which it may raise a further amount of up to £7 million (before expenses). The proposed Issue Price of 100 pence per Open Offer Share is the same price as the price at which Placing Shares are being issued pursuant to the Placing.

Placing

Pursuant to the terms of the Placing and Open Offer Agreement, Liberum, as agent for Staffline, has conditionally agreed to use reasonable endeavours to place the Placing Shares at the Issue Price with existing Shareholders and other institutional investors, representing gross proceeds of not less than £34 million if the Placing Shares are fully subscribed. The Placing, which will be conducted by way of an accelerated bookbuild process which will be launched immediately following this Announcement, will comprise up to 34 million Placing Shares. 

The Placing is conditional, inter alia, on the following:

i. Resolutions 1 and 2 being passed at the General Meeting;

ii. the closing of the Bookbuild;

iii. the Placing and Open Offer Agreement not being terminated prior to Admission of the Placing Shares and becoming unconditional in all respects; and

iv. Admission of the Placing Shares having become effective on or before 8 a.m. on 16 July 2019 (or such later date and/or time as the Company and Liberum may agree not being later than 30 July 2019).

The Placing Shares will, when issued and fully paid, rank pari passu in all respects with the Ordinary Shares in issue at that time, including the right to receive all dividends and other distributions declared, made or paid after the date of Admission. The Placing Shares are not subject to clawback and are not part of the Open Offer. The Placing is not underwritten.

The allotment and issue of the Open Offer Shares is conditional on Admission of the Placing Shares but the Placing is not conditional on Admission of the Open Offer Shares; if the Placing does not complete, then the Open Offer will also not complete. However, if the Open Offer does not complete, then this will not prevent the Placing from completing.

Open Offer

Subject to the fulfilment of the conditions set out below (and as further detailed in the Circular), Qualifying Shareholders may subscribe for Open Offer Shares in proportion to their holding of Existing Ordinary Shares held on the Record Date. Shareholders subscribing for their full entitlement under the Open Offer may also request additional Open Offer Shares as an Excess Entitlement, up to the total number of Open Offer Shares available to Qualifying Shareholders under the Open Offer. The Open Offer is not underwritten.

The Open Offer is conditional, inter alia, on the following:

i. Resolutions 1 and 2 being passed at the General Meeting;

ii. the Placing and Open Offer Agreement not being terminated prior to Admission of the Placing Shares and having become unconditional in all respects; and

iii. Admission of the Open Offer Shares becoming effective on or before 8.00 a.m. on 16 July 2019 (or such later date and/or time as the Company and Liberum being no later than 30 July 2019).

The allotment and issue of the Open Offer Shares is conditional on Admission of the Placing Shares but the Placing is not conditional on Admission of the Open Offer Shares; if the Placing does not complete, then the Open Offer will also not complete. However, if the Open Offer does not complete, then this will not prevent the Placing from completing.

 Basic Entitlement

On, and subject to the terms and conditions of the Open Offer, the Company invites Qualifying Shareholders to apply for their Basic Entitlement of Open Offer Shares at the Issue Price. Each Qualifying Shareholder's Basic Entitlement has been calculated on the following basis:

1 Open Offer Share for every 4 Existing Ordinary Shares held at the Record Date

Basic Entitlements will be rounded down to the nearest whole number of Ordinary Shares. 

General Meeting

It is proposed that a General Meeting will be held at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL on 15 July 2019 at 9.00 a.m. where the following Resolutions will be proposed:

Resolution 1 - Authority to allot shares

Resolution 1 is an ordinary resolution to authorise the Directors under section 551 of the Act to issue and allot Ordinary Shares. The Act requires that the authority of Directors to allot shares and to make offers or agreements to allot shares in the Company or grant rights to subscribe for or convert any security into shares (the "relevant securities") should be subject to the approval of Shareholders in a general meeting or to an authority set out in the Company's articles of association. Accordingly, Resolution 1 will be proposed to authorise the Directors to allot relevant securities in respect of the issue of the Placing Shares and the Open Offer Shares. This authority is in addition to all existing authorities under section 551 of the Act and will expire at on the conclusion of the Company's next Annual General Meeting.

Resolution 2 - Disapplication of statutory pre-emption rights

Resolution 2 is a special resolution to disapply the statutory pre-emption rights under section 571 of the Act in respect of equity securities (as defined in section 560 of the Act). The Act requires that any equity securities issued wholly for cash must be offered to existing Shareholders in proportion to their existing shareholdings unless otherwise approved by Shareholders in a general meeting or accepted under the Company's articles of association. A special resolution will be proposed at the General Meeting to give the Directors authority to allot equity securities for cash other than on a pro rata basis pursuant to the issue of the Placing Shares and the Open Offer Shares. This authority is in addition to all existing authorities under section 570 of the Act and will expire on the conclusion of the Company's next Annual General Meeting.

Risk Factors and Additional Information

The Circular, which is expected to be posted to Shareholders following the closing of the Bookbuild, also contains a number of risk factors and additional information on the Open Offer and the Company.

Expected Timetable of Principal Events

 DEFINITIONS

IMPORTANT NOTICE

This announcement, including the Appendix (together, the "Announcement"), and the information contained herein is for information purposes only and is not for release, publication or distribution, directly or indirectly, in whole or in part, in or into or from the United States, Canada, Australia, Japan, the Republic of Ireland or the Republic of South Africa, or any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction (the "Placing Restricted Jurisdictions"). The New Ordinary Shares have not been and will not be registered under the United States Securities Act of 1933 (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States and may not be offered, sold, or transferred, directly or indirectly, in or into the United States absent registration under the Securities Act or an available exemption from or in a transaction not subject to the registration requirements of the Securities Act and, in each case, in compliance with the securities law of any state or any other jurisdiction of the United States. No public offering of the New Ordinary Shares is being made in the United States. Persons receiving this Announcement (including custodians, nominees and trustees) must not forward, distribute, mail or otherwise transmit it in or into the United States or use the United States mails, directly or indirectly, in connection with the Transaction. This Announcement does not constitute or form part of an offer to sell or issue or a solicitation of an offer to buy, subscribe for or otherwise acquire any securities in any jurisdiction including, without limitation, the Placing Restricted Jurisdictions or any other jurisdiction in which such offer or solicitation would be unlawful. This Announcement and the information contained in it is not for publication or distribution, directly or indirectly, to persons in a Placing Restricted Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction.

No action has been taken by the Company, Liberum or any of their respective directors, officers, partners, agents, employees or affiliates that would permit an offer of the New Ordinary Shares or possession or distribution of this Announcement or any other publicity material relating to such New Ordinary Shares in any jurisdiction where action for that purpose is required. Persons receiving this Announcement are required to inform themselves about and to observe any restrictions contained in this Announcement.

This Announcement, including the Appendix, and the terms and conditions set out in the Appendix, are directed at and are only being distributed to: (A) persons in member states of the European Economic Area who are "qualified investors", as defined in article 2.1(e) of the Prospectus Directive (Directive 2003/71/EC), as amended (the "Prospectus Directive"), (B) if in the United Kingdom, persons who (i) have professional experience in matters relating to investments who fall within the definition of "investment professionals" in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") or fall within the definition of "high net worth companies, unincorporated associations etc" in article 49(2)(a) to (d) of the FPO and (ii) are "qualified investors" as defined in section 86 of the Financial Services and Markets Act 2000, as amended ("FSMA") or (C) persons to whom it may otherwise lawfully be communicated (each, a "Relevant Person"). No other person should act on or rely on this Announcement and persons distributing this Announcement must satisfy themselves that it is lawful to do so. By accepting the terms of this Announcement, you represent and agree that you are a Relevant Person.

This Announcement must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this Announcement or the Placing relate is available only to Relevant Persons and will be engaged in only with Relevant Persons. As regards all persons other than Relevant Persons, the details of the Placing set out in this Announcement are for information purposes only.

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

This Announcement is not being distributed by, nor has it been approved for the purposes of section 21 of FSMA by, a person authorised under FSMA. This Announcement is being distributed and communicated to persons in the United Kingdom only in circumstances in which section 21(1) of FSMA does not apply.

No prospectus will be made available in connection with the matters contained in this Announcement and no such prospectus is required (in accordance with the Prospectus Directive) to be published.

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

Certain statements in this Announcement are forward-looking statements which are based on the Group's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as "aim", "anticipate", "believe", "could", "intend", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries in which the Group's businesses operate to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by the UK Financial Conduct Authority ("FCA"), the London Stock Exchange or applicable law, the Company undertakes no obligation to update or revise publicly any forward- looking statements, whether as a result of new information, future events or otherwise.

Any indication in this Announcement of the price at which the Company's shares have been bought or sold in the past cannot be relied upon as a guide to future performance. Persons needing advice should consult an independent financial adviser. No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

Liberum, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for the Company and for no one else in connection with the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Liberum or for providing advice in relation to the Placing, or any other matters referred to in this Announcement.

This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by or on behalf of the Company (except to the extent imposed by law or regulations) or Liberum or by their affiliates or their respective agents, directors, officers and employees as to, or in relation to, the contents of this Announcement, including its accuracy, completeness or verification or for any other statement made or purported to be made by any of them, or on their behalf, the Company or any other person in connection with the Company, the Placing or Admission or for any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed. Each of Liberum and its affiliates and agents disclaims to the fullest extent permitted by law all and any responsibility or liability whatsoever, whether arising in tort, contract or otherwise, which it might otherwise have in respect of this Announcement or any such statement.

The New Ordinary Shares to be issued pursuant to the Placing and Open Offer will not be admitted to trading on any stock exchange other than to trading on AIM.

The Appendix to this Announcement sets out the terms and conditions of the Placing. By participating in the Placing, each person who is invited to and who chooses to participate in the Placing by making or accepting an oral and legally binding offer to acquire Placing Shares will be deemed to have read and understood this Announcement in its entirety and to be making such offer on the terms and subject to the conditions set out in this Announcement and to be providing the representations, warranties, undertakings and acknowledgements contained in the Appendix.

Members of the public are not eligible to take part in the Placing and no public offering of Placing Shares is being or will be made.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this Announcement.

APPENDIX

TERMS AND CONDITIONS OF THE PLACING

 IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, AND THE INFORMATION CONTAINED HEREIN (TOGETHER THE "ANNOUNCEMENT") IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF IRELAND THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY THE LONDON STOCK EXCHANGE, NOR IS IT INTENDED THAT IT WILL BE SO APPROVED.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, AND THE TERMS AND CONDITIONS SET OUT IN THIS APPENDIX, ARE DIRECTED AT AND ARE ONLY BEING DISTRIBUTED TO: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE "QUALIFIED INVESTORS", AS DEFINED IN ARTICLE 2.1(E) OF THE PROSPECTUS DIRECTIVE (DIRECTIVE 2003/71/EC), AS AMENDED (THE "PROSPECTUS DIRECTIVE"), (B) IF IN THE UNITED KINGDOM, PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS WHO FALL WITHIN THE DEFINITION OF "INVESTMENT PROFESSIONALS" IN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "FPO") OR FALL WITHIN THE DEFINITION OF "HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS ETC" IN ARTICLE 49(2)(A) TO (D) OF THE FPO AND (II) ARE "QUALIFIED INVESTORS" AS DEFINED IN SECTION 86 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED ("FSMA") OR (C) PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (EACH, A "RELEVANT PERSON"). NO OTHER PERSON SHOULD ACT ON OR RELY ON THIS ANNOUNCEMENT AND PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. BY ACCEPTING THE TERMS OF THIS ANNOUNCEMENT, YOU REPRESENT AND AGREE THAT YOU ARE A RELEVANT PERSON.

DISTRIBUTION OF THIS ANNOUNCEMENT IN CERTAIN JURISDICTIONS MAY BE RESTRICTED OR PROHIBITED BY LAW OR REGULATION. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, DOES NOT ITSELF CONSTITUTE AN OFFER FOR THE SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES. THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT 1933 (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, RESOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OR AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE 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 "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN RELIANCE ON, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES, THE UNITED KINGDOM OR ELSEWHERE.

THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES LAWS AND REGULATIONS OF AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA, AND MAY NOT BE OFFERED, SOLD, RESOLD, OR DELIVERED, DIRECTLY OR INDIRECTLY, WITHIN AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA, OR IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO DO SO, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION.

EACH PLACEE SHOULD CONSULT WITH ITS ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN THE PLACING SHARES. THE DISTRIBUTION OF THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS, AND ANY PERSON INTO WHOSE POSSESSION THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, SUCH RESTRICTIONS.

Information for distributors:

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

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

Persons who are invited to and who choose to participate in the Placing by making an oral or written offer to acquire Placing Shares, including any individuals, funds or others on whose behalf a commitment to acquire Placing Shares is given (the "Placees"), will be deemed: (i) to have read and understood this Announcement, including this Appendix, in its entirety; and (ii) to be participating and making an offer for Placing Shares on the terms and conditions and to be providing the representations, warranties, acknowledgements and undertakings, contained in this Appendix.

In particular each such Placee represents, warrants and acknowledges that:

1. it is a Relevant Person 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. it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it has authority to exercise, and is exercising, investment discretion and has authority to make and does make the representations, warranties, indemnities, acknowledgements, undertakings and agreements contained in this Announcement;

3. it understands (or if acting for the account of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in this Appendix; and

4. if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, any Placing Shares acquired 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 circumstances which may give rise to an offer of securities to the public other than an offer or resale to Qualified Investors in a member state of the EEA which has implemented the Prospectus Directive, or in circumstances in which the prior consent of the Sole Bookrunner has been given to each such proposed offer or resale.

Details of the Placing, the Placing and Open Offer Agreement and the Placing Shares

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.

Liberum has entered into the Placing and Open Offer Agreement with the Company under which, subject to the conditions set out in that agreement, Liberum will agree to use its reasonable endeavours to procure subscribers who will (subject to the satisfaction or (where capable of waiver) waiver of the conditions contained in the Placing and Open Offer Agreement) subscribe for the Placing Shares at the Issue Price. The Placing is not being underwritten.

The Placing is conditional upon the Placing and Open Offer Agreement becoming unconditional in all respects.

The Placing Shares will, when issued, be subject to the articles of association of the Company, be credited as fully paid and will on Admission rank in full for all dividends and other distributions declared, paid or made after Admission in respect of the Ordinary Shares and otherwise pari passu in all respects with the Existing Ordinary Shares.

Timetable for the Placing

Various dates referred to in this Announcement are stated on the basis of the expected timetable for the Placing. It is possible that some of these dates may be changed. The New Ordinary Shares will be allotted on Admission, subject, inter alia, to the Resolutions being approved at the General Meeting. It is expected that the New Ordinary Shares will be allotted, conditional upon, inter alia, Admission becoming effective on 16 July 2019.

Bookbuild

Liberum will today commence the Bookbuild to determine demand for participation in the Placing by potential Placees. The Bookbuild is expected to close at or before 4.30 p.m. today. The number of Placing Shares to be issued will be agreed between Liberum and the Company following completion of the Bookbuild. The Company will then release an announcement through the London Stock Exchange's Regulatory Information Service confirming the number of Placing Shares to be issued and the amount to be raised under the Placing.

 Application for listing and admission to trading

Application will be made to the London Stock Exchange for admission of the New Ordinary Shares to trading on AIM ("Admission"). Admission is conditional upon, amongst other things, the relevant conditions in the Placing and Open Offer Agreement being satisfied and the Placing and Open Offer Agreement not having been terminated in accordance with its terms. It is expected that the New Ordinary Shares will be allotted, conditional upon, inter alia, Admission becoming effective and dealings in the Placing Shares commencing on AIM at 8.00 a.m. on 16 July 2019.

Lock up

As part of the Placing, the Company has agreed, subject to certain customary exceptions, that it will not issue or sell any Ordinary Shares for a period of 120 days after Admission without the prior written consent of Liberum (such consent not to be unreasonably withheld or delayed).

Participation in, and principal terms of, the Placing

Liberum is arranging the Placing as agent for and on behalf of the Company. Participation in the Placing will only be available to Placees who may lawfully be, and are, invited to participate by Liberum.

Liberum will determine in its absolute discretion the extent of each Placee's participation in the Placing, which will not necessarily be the same for each Placee and this will be confirmed orally or in writing by Liberum as agent of the Company ("Confirmation"). No element of the Placing will be underwritten.

Confirmation will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) to subscribe for the number of Placing Shares allocated to it at the Issue Price on the terms and conditions set out in this Appendix (a copy of the terms and conditions having been provided to the Placee prior to or at the same time as such oral or written confirmation) and in accordance with the Company's articles of association. For the avoidance of doubt, the Confirmation constitutes each Placee's irrevocable legally binding agreement, subject to the Placing and Open Offer Agreement not having been terminated, to pay the aggregate settlement amount for the Placing Shares to be subscribed for by that Placee regardless of the total number of Placing Shares (if any) subscribed for by any other investor(s).

Liberum reserves the right to scale back the number of Placing Shares to be subscribed by any Placee in the event of an oversubscription under the Placing. Liberum also reserves the right not to accept offers for Placing Shares or to accept such offers in part rather than in whole.

Each Placee will be required to pay to Liberum, on the Company's behalf, the Issue Price for each Placing Share agreed to be acquired by it under the Placing in accordance with the terms set out herein. Each Placee's obligation to acquire and pay for Placing Shares under the Placing will be owed to Liberum and the Company. Each Placee has an immediate, separate, irrevocable and binding obligation, owed to Liberum, to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Issue Price and the number of Placing Shares such Placee has agreed to subscribe for. Each Placee will be deemed to have read and understood the Appendix in its entirety, to be participating in the Placing upon the terms and conditions contained in the Appendix, and to be providing the representations, warranties, agreements, acknowledgements and undertakings, in each case as contained in the Appendix. To the fullest extent permitted by law and applicable FCA rules (the "FCA Rules"), neither (i) Liberum, (ii) any of its respective directors, officers, employees or consultants, or (iii) to the extent not contained within (i) or (ii), any person connected with Liberum as defined in the FCA Rules ((i), (ii) and (iii) being together "affiliates" and individually an "affiliate"), shall have any liability to Placees or to any person (whether acting on behalf of a Placee or otherwise) other than the Company in respect of the Placing or in respect of its conduct of the Bookbuild or of any alternative method that they may adopt for carrying out the Placing, and where any such liability nevertheless arises as a matter of law, each Placee shall immediately waive any claim it may have against any affiliate in respect thereof.

The price of securities and income from them may go down as well as up and investors may not get back the full amount on disposal of the securities. Liberum and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion determine.

Any indication in this Announcement of the price at which Ordinary Shares have been bought or sold in the past cannot be relied upon as a guide to future performance. No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

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

Completion of the Placing will be subject to the fulfilment of the conditions referred to below under 'Conditions of the Placing' and to the Placing not being terminated on the basis referred to below under 'Termination of the Placing and Open Offer Agreement'. In the event that the Placing and Open Offer Agreement is not entered into or does not otherwise become unconditional in any respect or, after having been entered into, is terminated, the Placing will not proceed and all funds delivered by the Placee to Liberum in respect of the Placee's participation will be returned to the Placee at the Placee's risk without interest.

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

By participating in the Placing, each Placee is deemed to have read and understood this Announcement, including the 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 the Appendix.

To the fullest extent permissible by law, neither the Company, nor Liberum nor any of their affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither Liberum nor any of its affiliates shall have any liability (including to the extent permissible by law, any fiduciary duties) in respect of Liberum's conduct of the Bookbuild or of such alternative method of effecting the Placing as Liberum and the Company may agree.

Conditions of the Placing

The Placing will be conditional, inter alia, on:

i. Admission having become effective in accordance with the AIM Rules by no later than 8.00 a.m. on 16 July 2019 (or such other time and/or date as may be agreed between the Company and Liberum, not being later than 8:30 a.m. on 30 July 2019 (the "Long Stop Date"));

ii. the Company having complied with its obligations under the Placing and Open Offer Agreement to the extent that the same fall to be performed prior to Admission; and

iii. the satisfaction or, where capable of waiver, the waiver of certain other conditions set out in the Placing and Open Offer Agreement in respect of the Placing of the Placing Shares, provided that the extended time for satisfaction shall not be extended beyond 8.30 a.m. on the Long Stop Date.

If any of the conditions contained in the Placing and Open Offer Agreement are not satisfied (or waived) or have become incapable of being satisfied on or before the Long Stop Date, the Placee's rights and obligations under the Placing shall cease and determine at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

Each Placee agrees that no claim can be made by the Placee in respect of Admission. All obligations assumed by the Placee under the terms and conditions of the Placing are given to Liberum in its capacity as agent for the Company and are therefore directly enforceable by the Company.

On the assumption that the conditions set out in the Placing and Open Offer Agreement in respect of Admission are satisfied (or waived) and that the Placing and Open Offer Agreement does not lapse and is not terminated in accordance with its terms on or prior to the Long Stop Date, each Placee will be required to pay to Liberum, on the Company's behalf, the Issue Price for each Placing Share agreed to be acquired by it under the Placing in accordance with the terms set out herein. Each Placee's obligation to acquire and pay for Placing Shares under the Placing will be owed to Liberum and the Company. Each Placee has an immediate, separate, irrevocable and binding obligation, owed to Liberum, to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Issue Price and the number of Placing Shares that such Placee has agreed to subscribe. Each Placee will be deemed to have read and understood this Appendix in its entirety; to be participating in the Placing upon the terms and conditions contained in this Appendix; and to be providing the confirmations, representations, warranties, agreements, acknowledgements and undertakings, in each case as contained in this Appendix.

By accepting Placing Shares, each Placee irrevocably agrees that: (i) the Company and Liberum may jointly, in their absolute discretion, exercise the right to extend the time for fulfilment of any of the conditions to the Placing and Open Offer Agreement expressed to be capable of waiver or extension (provided that such extension will not extend later than the Long Stop Date); and (ii) that Liberum may waive, in whole or in part, and where capable of waiver, fulfilment of certain of the conditions to the Placing and Open Offer Agreement and may terminate the Placing and Open Offer Agreement in certain circumstances prior to Admission, in each case without consulting with any Placee. Any such extension or waiver will not affect the Placees' commitments. If there is any change to the timetable Placees will be notified at the first practicable opportunity.

Right to terminate under the Placing and Open Offer Agreement

The Placing and Open Offer Agreement contains certain undertakings and warranties given by the Company for the benefit of Liberum and indemnities given by the Company relating to certain potential liabilities of Liberum. In addition, Liberum has certain rights to terminate the Placing and Open Offer Agreement at any time prior to Admission, inter alia, in the event of a breach of warranty or an event of force majeure that is material in the context of the Placing.

By participating in the Placing, Placees agree that the exercise by Liberum of any right of termination or other discretion under the Placing and Open Offer Agreement shall be within the absolute discretion of Liberum and that Liberum need not make any reference to Placees and that they shall have no liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

No Prospectus

No offering document, prospectus or admission document has been or will be submitted to be approved by the FCA 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 this Announcement.

Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement (including the Appendix) is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company, Liberum or any other person and none of Liberum 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. 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. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and Settlement

Settlement of transactions in the Placing Shares following Admission will take place within the system administered by CREST, subject to certain exceptions. The Company reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if, in the opinion of Liberum, delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Participation in the Placing is only available to persons who are invited to participate in it by Liberum.

A Placee's commitment to acquire a fixed number of Placing Shares under the Placing will be agreed orally or in writing with Liberum. Such agreement will constitute a legally binding commitment on such Placee's part to acquire that number of Placing Shares at the Issue Price on the terms and conditions set out or referred to in the Appendix and subject to the Company's articles of association.

Following the close of the Bookbuild, each Placee allocated Placing Shares in the Placing will be sent a trade confirmation in accordance with the standing arrangements in place with Liberum, stating the number of Placing Shares allocated to it at the Issue Price, the aggregate amount owed by such Placee to Liberum and settlement instructions.

Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with Liberum. Settlement should be through Liberum against CREST ID: ENQAN. For the avoidance of doubt, Placing allocations will be booked with a trade date of 27 June 2019 and settlement date of 16 July 2019. Settlement will take place on a delivery versus payment basis.

The Company will deliver the Placing Shares to the CREST account operated by Liberum as agent for the Company and Liberum will enter their delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

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 Liberum.

Each Placee is deemed to agree that, if it does not comply with these obligations, the Company may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Company's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. 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) acknowledges, undertakes, represents, warrants and agrees (as the case may be) with Liberum (for itself and on behalf of the Company) as follows:

1. it has read this Announcement, including the Appendix, in its entirety and agrees that its participation in the Placing will be subject to the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and to the provisions of the Placing and Open Offer Agreement and the articles of association of the Company in force both before and immediately after Admission;

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

3. that the exercise by Liberum of any rights or discretion under the Placing and Open Offer Agreement shall be within the absolute discretion of Liberum and Liberum need not have any reference to the Placee and shall have no liability to it whatsoever in connection with any decision to exercise or not to exercise any such right and that it has no rights against Liberum or the Company, or any of their respective directors and employees under the Placing and Open Offer Agreement pursuant to the Contracts (Rights of Third Parties Act) 1999;

4. it acknowledges that it has received this Announcement solely for its use and has not redistributed or duplicated it and undertakes not to do so;

5. it acknowledges and agrees that no offering document, prospectus or admission document has been or will be prepared in connection with the Placing and represents and warrants that it has not received a prospectus, admission document or other offering document in connection with the Placing or the Placing Shares;

6. it acknowledges that the ordinary shares in the capital of the Company are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of AIM (collectively, the "Exchange Information"), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such Exchange Information without undue difficulty and is able to obtain access to such information or comparable information concerning any other publicly traded company without undue difficulty;

7. it acknowledges that neither Liberum, nor the Company nor any of their respective affiliates or any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company other than this Announcement; nor has it requested any of Liberum, the Company, any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;

8. it acknowledges that the content of this Announcement is exclusively the responsibility of the Company and that neither Liberum, nor any person acting on its behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously 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 subscribe for the Placing Shares is contained in this Announcement and any information previously published by the Company by notification to a Regulatory Information Service, 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 Liberum or the Company or their respective affiliates and neither Liberum nor the Company nor their respective affiliates 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 has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing;

9. it represents and warrants that, to the extent it has received any inside information (for the purposes of the Market Abuse Regulation (EU Regulation No. 596/2014 ("MAR")) and section 56 of the Criminal Justice Act 1993) in relation to the Company and its securities in advance of the Placing, it has not: (a) dealt (or attempted to deal) in the securities of the Company; (b) encouraged, required, recommended or induced another person to deal in the securities of the Company; or (c) unlawfully disclosed such information to any person, prior to the information being made publicly available;

10. it acknowledges that neither Liberum nor any person acting on its behalf nor any of their respective affiliates has or shall have any liability for 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;

11. it represents and warrants that it is aware of, has complied with and will continue to comply with any obligations it has under the Criminal Justice Act 1993, the Market Abuse Regulation (EU) No 596/2014 and FSMA, and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering Regulations 2007, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the "Regulations") and any related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof and the Money Laundering Sourcebook of the FCA to the extent applicable to it and in respect of its subscription for Placing Shares: (i) 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 (ii) it will provide Liberum on demand with any information it may require for the purposes of verification under the Regulations;

12. if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive (including any relevant implementing measure in any member state), it represents and warrants that the Placing Shares subscribed for 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 to qualified investors, or in circumstances in which the prior consent of Liberum has been given to the proposed offer or resale;

13. it represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in:

a. the United Kingdom, 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 and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA; or

b. 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);

14. it 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 FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

15. if within the United Kingdom, it represents and warrants that it is a person falling within Article 19(5) and/or Article 49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, and is a qualified investor as defined in Section 86 of FMSA or is a person to whom this Announcement may otherwise be lawfully communicated;

16. it acknowledges that any offer of Placing Shares may only be directed at persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive and represents and agrees that, in the EEA, it is such a qualified investor;

17. it represents and warrants that it and any person acting on its behalf is entitled to subscribe for Placing Shares under the laws of all relevant jurisdictions which apply to it and that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to give its commitment to subscribe for the Placing Shares 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, and that its subscription of the Placing Shares will be in compliance with applicable laws and regulations in the jurisdiction of its residence, the residence of the Company, or otherwise;

18. it is not a national or resident of a Placing Restricted Jurisdiction or a corporation, partnership or other entity organised under the laws of the a Placing Restricted Jurisdiction or of any jurisdiction which would be unlawful and that it will not offer, sell, renounce, transfer or deliver directly or indirectly any of the Placing Shares in or to any person resident in the a Restricted Jurisdiction and acknowledges and agrees that the Placing Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or jurisdiction of the United States, or the relevant securities legislation of any Restricted Jurisdiction and therefore the Placing Shares may not be offered, sold, transferred or delivered directly or indirectly into a Placing Restricted Jurisdiction or their respective territories and possessions, except subject to limited exemptions;

19. it warrants that it has complied with all relevant laws of all relevant territories, obtained all requisite governmental or other consents which may be required in connection with the Placing Shares, complied with all requisite formalities and that it has not taken any action or omitted to take any action which will or may result in Liberum, the Company or any of their respective directors, officers, agents, employees or advisers acting in breach of the legal or regulatory requirements of any territory in connection with the Placing;

20. it acknowledges and agrees that its purchase of Placing Shares does not trigger, in the jurisdiction in which it is resident or located: (i) any obligation to prepare or file a prospectus or similar document or any other report with respect to such purchase; (ii) any disclosure or reporting obligation of the Company; or (iii) any registration or other obligation on the part of the Company, but that if required by applicable securities laws or as otherwise reasonably requested by the Company, the Placee will execute, deliver and file and otherwise assist the Company in filing reports, questionnaires, undertakings and other documents with respect to the issue of the Placing Shares;

21. that its obligations will be owed to the Company and Liberum and it acknowledges that it has an immediate, separate, irrevocable and binding obligation, owed to Liberum, to pay to Liberum (or as it may direct) in cleared funds an amount equal to that expressed in the Confirmation and it 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 Liberum may in its discretion determine and without liability to such Placee;

22. it acknowledges that neither Liberum nor any of its affiliates, nor 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 a client of Liberum for the purposes of the Placing and that Liberum has no duties or responsibilities to it for providing the protections afforded to its clients or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing and Open Offer Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

23. it 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 Liberum 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 Liberum in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of Liberum who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

24. it 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 agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of or in connection with 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 Liberum 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;

25. it acknowledges that Liberum and its affiliates will rely upon the truth and accuracy of the representations, warranties and acknowledgements set forth herein which are given to Liberum on its own behalf and on behalf of the Company and which are irrevocable and it irrevocably authorises Liberum to produce this Announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein;

26. it agrees to indemnify on an after tax basis and hold the Company and Liberum 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 by it (or any person on whose behalf it is acting) of the representations, warranties, acknowledgements, agreements and undertakings contained in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

27. it represents and warrants that it will acquire any Placing Shares subscribed for by it for its account or for one or more accounts as to each of which it exercises sole investment discretion and it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

28. it acknowledges that its commitment to subscribe for Placing Shares on the terms set out herein and as confirmed by the Confirmations 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. The foregoing representations, warranties and confirmations are given for the benefit of the Company and Liberum. 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 the subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes, and is based on a warranty from each Placee, that neither it, nor the person specified by it for registration as holder, of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services). If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax, and none of the Company, Liberum shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify Liberum accordingly;

29. it understands that no action has been or will be taken by any of the Company, Liberum or any person acting on behalf of the Company or Liberum 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;

30. in making any decision to subscribe for the Placing Shares, it confirms that it has knowledge and experience in financial, business, tax and international investment matters as to be capable of evaluating the merits and risks of its investment in the Placing Shares. It further confirms that it is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss of such investment in the Placing Shares. It further confirms that it relied on 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;

31. it represents and warrants that it has (a) made its own assessment and satisfied itself concerning legal, regulatory, tax, business and financial considerations in connection herewith to the extent it deems necessary; (b) had access to review publicly available information concerning the Company that it considers necessary or appropriate and sufficient in making an investment decision; (c) reviewed such information as it believes is necessary or appropriate in connection with its subscription of the Placing Shares; and (d) made its investment decision based upon its own judgment, due diligence and analysis and not upon any view expressed or information provided by or on behalf of Liberum;

32. it understands and agrees that it may not rely on any investigation that Liberum or any person acting on its behalf may or may not have conducted with respect to the Company, or the Placing, and that none of Liberum, the Company, any of their affiliates, or any person acting on behalf of them has made any representation to it, express or implied, with respect to the merits of the Placing, the subscription for the Placing Shares, or as to the condition, financial or otherwise, of the Company, or as to any other matter relating thereto, and nothing herein shall be construed as a recommendation to it to subscribe for the Placing Shares. It acknowledges and agrees that no materials regarding the Placing Shares or the Company (other than this Announcement) has been provided, nor will it be provided, by Liberum or the Company for the purposes of this Placing;

33. accordingly, it acknowledges and agrees that it will not hold Liberum or any of its affiliates or any person acting on their behalf responsible or liable for any misstatements in or omission from any publicly available information relating to the Company or information made available (whether in written or oral form) in presentations or as part of roadshow discussions with investors relating to the Company (the "Information") and that neither Liberum nor any person acting on behalf of Liberum makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such Information or accepts any responsibility for any of such Information;

34. it is either (A) a person located outside the United States and is subscribing for Placing Shares only in an "offshore transaction" as defined in and pursuant to Regulation S, or (B) within the United States and a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act and is not subscribing for Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any Placing Shares in or into the United States, and has or will have executed and delivered a U.S. investor representation letter substantially in the form set out in the letter provided to it by Liberum to the addressees specified therein;

35. it is not acquiring Placing Shares as a result of any "directed selling efforts" as defined in Regulation S or as a result of any form of "general solicitation" or "general advertising" (within the meaning of Rule 502(c) of Regulation D of the Securities Act);

36. it will (or will procure that its nominee will), if applicable, make notification to the Company of the interest in its shares in accordance with the articles of association of the Company and any relevant rules or legislation;

37. it is not acting on a non-discretionary basis for the account or benefit of a person located within the United States at the time the undertaking to subscribe for Placing Shares is given; and

38. that information provided by it to the Company and the Registrar will be stored on the Company's and/or the Registrars' computer system(s). It acknowledges and agrees that for the purposes of the General Data Protection Regulation (EU) 2016/679 and other relevant data protection legislation which may be applicable (the "Data Protection Law"), the Company and the Registrars are required to specify the purposes for which they will hold personal data; and that it has obtained the consent of any data subjects to the Registrars and the Company and their respective associates holding and using their personal data for the Purposes (as defined below). For the purposes of this Announcement, "data subject", "personal data" and "sensitive personal data" shall have the meanings attributed to them in the Data Protection Law. The Company and the Registrars will only use such information for the purposes set out below (collectively, the "Purposes"), being to:

a. process its personal data (including sensitive personal data) as required by or in connection with its holding of Ordinary Shares, including processing personal data in connection with credit and money laundering checks on it;

b. communicate with it as necessary in connection with its affairs and generally in connection with its holding of Ordinary Shares;

c. provide personal data to such third parties as the Company or the Registrars may consider necessary in connection with its affairs and generally in connection with its holding of Ordinary Shares or as the Data Protection Law may require, including to third parties outside the United Kingdom or the European Economic Area;

d. without limitation, provide such personal data to the Company or Liberum for processing, notwithstanding that any such party may be outside the United Kingdom or the EEA States; and

e. process its personal data for the Company's or Registrars' internal administration.

The foregoing acknowledgments, undertakings, representations, warranties and confirmations are given to each of the Company and Liberum (for their own benefit, and where relevant, the benefit of their respective affiliates) and are irrevocable. The Company and Liberum will rely upon the truth and accuracy of the foregoing acknowledgements, undertakings, representations, warranties and confirmations.

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 United Kingdom 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 each Placee acknowledges and agrees that Liberum 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.

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

When a Placee or person acting on behalf of the Placee is dealing with Liberum, any money held in an account with Liberum 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 FCA made under 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 Liberum money in accordance with the client money rules and will be used by Liberum in the course of its own business; and the Placee will rank only as a general creditor of Liberum.

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

Past performance is not a guide to future performance and persons needing advice should consult an independent financial adviser.