Tissue Regenix Group Regulatory News (TRX)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN

Tissue Regenix Group plc

("Tissue Regenix" or the "Company")

Proposed placing of new Ordinary Shares at a price of 19p per share to raise

approximately £20 million

Highlights

· Tissue Regenix is a leading medical devices company in the field of regenerative medicine. It commercialises academic research conducted by its partners globally.

· Tissue Regenix has patented "dCELL" technology which uses animal and human tissue to create a tissue scaffold which can be used to repair diseased or worn out body parts.

· The Company's first product: "DermaPure", which is used in the treatment of chronic wounds, was launched in 2014. Sales of DermaPure are building momentum with initial revenues now being recognised as anticipated.

· Further products are in development, including applications for meniscus repair, ligament repair and heart valve replacement.

· The Company intends to raise £20 million through an accelerated bookbuilding process aimed at new and existing institutional investors.

· The proceeds of this fund-raising will be used to allow the development and launch of these new products, and to expand the direct salesforce for DermaPure in the US.

Antony Odell, Chief Executive of Tissue Regenix, commented:

"Our latest fundraising represents a milestone for the company. Having launched our first product, the time has now come to build up our US direct sales network to ensure we build coverage of hospitals in this key market. Initial responses by potential customers to DermaPure have been extremely positive and we are very excited by the potential that this product offers. In addition, we have new products and applications in development, that give us the potential to address new markets - including knee injury - which have massive potential. This fundraising will allow us to achieve these goals."

Enquiries:

Tissue Regenix Group plc Tel: 019 0443 5176

Antony Odell, Chief Executive Officer

Ian Jefferson, Chief Financial Officer

Jefferies International Limited (Nomad, broker and bookrunner) Tel: 020 7029 8000

Simon Hardy

Harry Nicholas

Tulchan Communications Tel: 020 7353 4200

Tom Buchanan / Victoria Huxster

Information on the Company

Tissue Regenix is a leading medical devices company in the field of regenerative medicine. Tissue Regenix was formed in 2006 when it was spun-out from the University of Leeds. Tissue Regenix commercialises academic research conducted by its partners globally including National Health Service Blood and Transplant ("NHSBT") in the UK and the Pontifical University of Parana in Curitiba, Brazil. Tissue Regenix's patented decellularisation ("dCELL®") technology removes DNA and other cellular material from animal and human tissue leaving an acellular tissue scaffold, which is not rejected by the patient's body and which can then be used to repair diseased or worn out body parts. The potential applications of this process are diverse and address many critical clinical needs such as chronic wounds, heart valve replacement and knee repair.

Details of the proposed Placing

Tissue Regenix (AIM: TRX) announces its intention to raise gross proceeds of approximately £20 million pursuant to a placing of new Ordinary Shares (the "Placing Shares") in the Company at a price of 19p per Placing Share (the "Placing Price") with both new and existing institutional investors (the "Placing"), to allow the development and launch of Tissue Regenix's human meniscus and human ligament products, the expansion of the direct salesforce for DermaPure®, in addition to the continued development and commercialisation of the Company's porcine-derived products.

The Placing is being conducted through an accelerated bookbuilding process to be carried out by Jefferies International Limited ("Jefferies") which shall determine the exact number of the Placing Shares in accordance with the terms and conditions set out in the Appendix to this announcement. Jefferies is acting as the sole bookrunner in connection with the Placing.

The book will open with immediate effect and is expected to close no later than 4.30 p.m. today (22 January 2015). The timing of the closing of the book and allocations is at Jefferies' discretion in consultation with the Company. The number of Placing Shares to be allocated and issued pursuant to the Placing is subject to agreement between the Company and Jefferies at the close of the bookbuilding process. Details of the final terms of the Placing, including its completion, will be announced as soon as practicable after the close of the bookbuilding process.

Participation in the Placing will be limited to institutional investors. Members of the general public are not eligible to take part in the Placing.

For the Placing of 105,263,158 new Ordinary Shares to proceed, the Company requires shareholders' approval to authorise the directors to allot the Placing Shares and to disapply pre-emption rights in relation to the issue of the Placing Shares on a non pre-emptive basis. A general meeting of the Company is expected to be held at the offices of DLA Piper UK LLP at Princes Exchange, Princes Square, Leeds LS1 4BY at 10.00 a.m. on 9 February 2015 (the "General Meeting"). A Circular containing details of the proposed Placing and the notice of the General Meeting will be sent to shareholders shortly.

In the event that the Resolutions are not passed, the Company, in consultation with Jefferies, may elect to proceed with the Placing of a smaller number of Ordinary Shares on the basis of the authority to allot Ordinary Shares and disapplication of pre-emption rights granted at the last annual general meeting of the Company.

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that, subject to, inter alia, the passing of the resolutions at the General Meeting, admission to AIM will become effective in respect of, and that dealings on AIM will commence in, the Placing Shares, on or around 10 February 2015.

The Placing is conditional upon, amongst other things, the resolutions being passed, the Admission becoming effective and the Placing Agreement between the Company and Jefferies becoming unconditional and not being terminated, in accordance with its terms.

The Appendix to this announcement (which forms part of this announcement) sets out the terms and conditions of the Placing. By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, institutional investors will be deemed to have read and understood this announcement in its entirety, including the Appendix, and to be making such offer on the terms and subject to the conditions contained herein and to be making the representations, warranties, undertakings and acknowledgements contained in the Appendix to this announcement.

background to and reasons for the placing

The net proceeds of the Placing are intended to be used to allow the development and launch of Tissue Regenix's human meniscus and human ligament products, the expansion of the direct salesforce for DermaPure®, in addition to the continued development and commercialisation of the Company's porcine-derived products.

The Board believes that raising equity finance using the flexibility provided by a non pre-emptive placing is the most appropriate and optimal structure for the Company at this time. This allows both existing institutional holders and new institutional investors the opportunity to participate in the Placing and avoids the requirement for a prospectus, which is a costly and time consuming process.

Use of Proceeds

As reported in the Company's interim results announced on 29 October 2014, the Company had existing cash resources as at 31 July 2014 of £15 million. As at 31 December 2014, the Company had cash resources of £11 million. As planned, the Company expects to continue to use its cash resources to fund its development programmes, and expects cash utilisation to increase over the coming years as the programmes progress through pre-clinical and clinical trials.

The Company currently envisages the following specific areas to which the net proceeds of the Placing will be applied, split broadly evenly between those areas, to be as follows:

· to further commercialise the wound care products with additional direct sales representatives being hired to deploy DermaPure®, and to fund the launch of the porcine general surgical patch product, SurgiPure®, in the US.

· to fund the development, manufacturing set-up, launch, sales & marketing and working capital build of the human meniscus product in the US.

· to fund the development, manufacturing set-up, launch, sales & marketing and working capital build of the human ligament product in the US.

Tissue Regenix's strategic progress

Tissue Regenix's current strategy is centered on the development and application of its dCELL® technology, using human and porcine-derived products both in the US and EU, with a concentration on the core focus areas of wound care and orthopaedics.

Underpinning the development and commercialisation strategy is Tissue Regenix's intellectual property portfolio. The core decellularisation process, which encompasses all of the Company's products, is covered by a process patent. The Company also files, where possible, individual product patents. In addition, significant know-how is retained within the Company.

Progress with product development programmes from December 2011

Since December 2011, when the Company raised £25m through the issue of new Ordinary Shares, Tissue Regenix has made significant progress with the product development programmes anticipated at that time:

Porcine Meniscus - pre-clinical trial completed and approval received from the Medicines and Healthcare Products Regulatory Agency ("MHRA") in order to commence the first UK clinical trial of Tissue Regenix's meniscal device to aid knee repair. Following final tests and preparations it is anticipated that this clinical trial will start by the first quarter of 2015.

· The trial approval marks a critical stage towards gaining EU clearance (via a CE Mark) which will enable full commercialisation of the dCELL® meniscus and allow it to be used by clinics and doctors to help UK and European patients. 

· Tissue Regenix's dCELL® meniscus will be used to repair damage from 'tears' in the meniscus knee cartilage as a result of acute injury or degeneration.

· Meniscal injuries affect around 1.5 million people per year in Europe and US, and the dCELL® meniscus potentially addresses this substantial unmet clinical need.

Porcine Ligament - pre-clinical trial is now completed with the final report imminent and the start of clinical trials targeted by the end of 2015.

· Successful completion of the clinical trial will allow Tissue Regenix to move towards gaining EU clearance, enabling full commercialisation of dCELL® ligament and allowing it to be used by clinics and doctors in the UK and Europe. 

· Tissue Regenix's dCELL® ligament will be used to repair anterior cruciate ligament ("ACL") ruptures.

· ACL ruptures are the second most common injury of the knee requiring surgical intervention. Approximately 900,000 procedures are performed annually, growing at 7% CAGR (2012-2020).

Porcine Dermis - pre-clinical trial completed and pre-market submission to the Food and Drug Administration ("FDA") to demonstrate the device is at least as safe and effective to a legally marketed device (a "510k submission") is expected to take place in 2015. Approval of the 510k submission will allow the product to be commercialised in the US.

Porcine General Surgical Patch - pre-clinical trial completed and 510k submission anticipated in the first quarter of 2015. Approval of the 510k will allow the product to be commercialised in the US under the name Surgipure®.

Human Heart Valves - continued positive data from the 1000+ dCELL® Human Heart Valves implanted in Brazil has been presented by Tissue Regenix's partner, Professor da Costa at several major cardiology conferences. This data continues to demonstrate the superiority of decellularised valves over conventional cryopreserved ones and discussions are underway with selected tissue banks in the EU and Asia/Pacific about making these available to clinicians.

Recent developments with human tissue-derived products

Since setting out its product development programmes in 2011, Tissue Regenix has made significant progress with a number of additional opportunities for human tissue-derived products. The Company has found that human tissue-derived products have lower development costs and are quicker to bring to market, primarily in the US, than the porcine equivalents as they are classed as transplant tissues. Unlike the porcine-derived products, they do not require pre-clinical or clinical trials to gain approval to sell. Depending on the type of tissue, a restriction with the human tissue-derived products, can be availability of supply as the material is derived from deceased donors. However, the Company has focused on the development of its human tissue-derived products due to the speed and cost advantages of bringing them to market as well as the benefits it brings in de-risking the subsequent commercial launch of the porcine equivalents.

In November 2012, Tissue Regenix established a subsidiary company in the US, 'Tissue Regenix Wound Care Inc.', as part of its commercialisation strategy for its dCELL® technology platform. DermaPure®, Tissue Regenix's decellularised human dermis product for chronic wounds was launched in the US in June 2014. A trial in the UK has shown that patients who have had chronic wounds for an average of 4½ years and who were treated with a single application of DermaPure® have seen an average 87% reduction in the size of all wounds, while 60% of patients were completely healed, with virtually no recurrences. The commercial launch of the DermaPure® dermis allograft allows Tissue Regenix to target a market worth $1.4 billion a year for wound healing devices and equipment.

In order to aid the sales of DermaPure® the Company appointed distributors around the country in addition to seven sales representatives employed directly by Tissue Regenix. Through this network, sales representatives will actively promote Tissue Regenix's dCELL® human dermis in Acute Care hospitals, Veteran Affairs hospitals and institutions, as well as in Long Term Acute Care hospitals.

Additionally, Tissue Regenix has been assigned a permanent level II Healthcare Common Procedure Coding System (HCPCS) product reimbursement Q-code for DermaPure® by the Centers for Medicare & Medicaid Services ("CMS"), the US Federal Government funded health programmes. The new, unique Q-code assignment for Tissue Regenix is reflected in the Hospital Outpatient Prospective Payment System Final Rule for the calendar year 2015, released by CMS on 31 October 2014. The new reimbursement code took effect from 1 January, 2015. The Q-code will enable wound care clinics, ambulatory surgical centres and hospital outpatient facilities located outside the Acute Care hospitals to apply for reimbursement under Medicare for patients who are treated using DermaPure®. The decision will allow greater access to DermaPure® for clinicians and provide an advanced treatment for wound care patients with chronic and acute wounds.

Given the success to date, a core part of Tissue Regenix's near term strategy is to accelerate commercialisation in the US. In addition to DermaPure® used for the treatment of chronic wounds, the Company has identified opportunities for human-derived meniscus and ligament products, which it intends to bring to market in the US, along with those of its porcine-derived products, which are eligible for regulatory approval via the 510k submission approach. The Company will also continue to progress the porcine products towards CE Mark with the intention of allowing commercialisation across the UK and Europe. Underpinning the commercial launches, the Company will continue to build its dCELL® evidence base including evidence of the benefits of dCELL® both in terms of health economics and mechanism of action.

Current core application areas

The Company has identified wound care and orthopaedics as the two core application areas for its current product development and commercialisation plans. Orthopaedics remains a significant and growing market among medical devices. Total global sales are estimated at $45 billion, within which the Company has identified a market with global revenue of $4.6 billion where its products are relevant. Global regenerative, soft tissue and cartilage repair is expected to grow at 6.6% CAGR through 2019. Patients continue to demand alternatives to joint replacement as they seek to extend their physically active lives. There is a significant need therefore for soft tissue grafts/replacements within the sports medicine arena. The Company also considers wound care to be an attractive market for its products, with the incidence of wounds growing in the US due to diabetes and obesity, along with lifestyle changes. Within this sector, skin substitutes, currently comprises only 5% of a total wound market considered to be worth $7 billion and is regarded as a growth area.

Current trading and outlook

As reported in the Company's interim results announced on 29 October 2014, the launch of DermaPure® during the first six months of 2014 was an important milestone in the Company's progress from its roots as a purely development-focused company to becoming a business with commercially available products. The diversity and strength of the dCELL® platform coupled with the Company's strong commercial focus provides a solid base to grow the business and the Company continues to aim towards the full commercial roll-out of its dCELL® technology across a range of target markets, including multiple applications where the Company sees opportunity for DermaPure®. Since reporting interim results on 29 October 2014, the Company has continued to perform in line with the Board's expectations, seeing encouraging momentum since the launch of DermaPure® in the US, with initial revenues now being recognised as anticipated.

Near term objectives for 2015 include line extensions in the dental and orthopaedic markets in order to expand the commercial opportunity for DermaPure®, which will pave the way for launch in other orthopaedic applications. In addition, the Company aims to launch SurgiPure® in the US, the porcine general surgical patch, complete the clinical results from the EU trial of the porcine meniscus product and complete the relocation of the UK manufacturing facility.

Important Notice

This announcement has been issued by, and is the sole responsibility of, the Company. This announcement is for information only and does not constitute an offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of any securities or investment advice in any jurisdiction in which such an offer or solicitation is unlawful, including without limitation, the United States, Australia, Canada, the Republic of South Africa or Japan.

No prospectus or admission document will be made available in connection with the matters contained in this announcement.

Jefferies which is authorised and regulated in the United Kingdom by the FCA, is acting for the Company and for no-one else in relation to the Placing, and will not be responsible to any other person for providing the protections afforded to its clients nor for providing advice in connection with the matters contained in this announcement. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Jefferies, or by any of its affiliates or agents, as to or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

The distribution of this announcement and the placing of the Placing Shares as set out In this announcement may be restricted by law in certain jurisdictions. No action has been taken by the Company or Jefferies that would permit an offering of the Placing Shares or possession or distribution of this announcement or any other offering or publicity material relating to the Placing Shares in any jurisdiction where action for that purpose is required Persons into whose possession this announcement comes are required by the Company and Jefferies to inform themselves about, and to observe, such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Members of the public are not eligible to take part in the Placing.

This announcement (including the Appendix and the terms and conditions set out therein) is directed only at persons (i) having 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 (the "Order") or (ii) who are high net worth entities falling within Article 49(2)(a) to (d) of the Order, and other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). This announcement must not be acted on or relied on in the United Kingdom by persons who are not relevant persons.

In member states of the European Economic Area ("EEA"), this announcement is only addressed to and directed at persons who are 'qualified investors' within the meaning of Article 2(1 )(e) of the Prospectus Directive (Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State) (the "Prospectus Directive") ("Qualified Investors").

This announcement is not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia).

This announcement does not constitute or form part of an offer of, or solicitation to purchase or subscribe for, securities in the United States. The Placing Shares may not be offered, sold or transferred, directly or indirectly, within the United States absent registration under the US Securities Act of 1933 (the "Securities Act") or an exemption therefrom. The Company has not registered and does not intend to register any of the Placing Shares under the Securities Act. No money, securities or other consideration is being solicited from any person inside the United States and, if sent in response to the information herein, will not be accepted. The Placing Shares will not be offered or sold to the public in the United States

No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that the 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.

The price of Ordinary Shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the Placing Shares.

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.

Forward-Looking Statements

Certain statements included in this announcement contain forward-looking information concerning the Company's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the sectors or markets in which the Company operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within the Company's control or can be predicted by the Company. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Actual results could differ materially from those set out in the forward-looking statements. Nothing in this announcement should be construed as a profit forecast and no part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in the Company, and must not be relied upon in any way in connection with any investment decision. Any forward-looking statements made herein by or on behalf of the Company speak only as of the date they are made. Except as required by the FCA, AIM Rules or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

APPENDIX

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING

1. Details of the Placing

1.1 Jefferies has entered into an agreement with the Company (the "Placing Agreement") under which, subject to the conditions set out in that agreement, Jefferies has agreed, as agent and on behalf of the Company, to use reasonable endeavours to procure placees (the "Placees") for the Placing Shares at a price of 19p per Placing Share (the "Placing Price"), where the exact number of the Placing Shares to be allocated and issued to each Placee shall be determined following completion of an accelerated bookbuilding process (the "Bookbuild"), described in this announcement and set out in the Placing Agreement (the "Placing"). The Placing is not underwritten.

1.2 The Placing is conditional on, amongst other things, the approval by shareholders of the Shareholder Resolutions which will grant authority to the Directors to allot the Placing Shares and disapply pre-emption rights in respect of the Placing Shares. The Circular containing details of the proposed Placing and the notice of the General Meeting will be sent to shareholders shortly following completion of the Bookbuild. To the extent one or both of the Shareholder Resolutions are not approved by the requisite majority of shareholders at the General Meeting, Jefferies and the Company may agree to waive the condition in the Placing Agreement that the Shareholder Resolutions are approved and, in such circumstances, they will also agree to reduce the number of Placing Shares to 65,348,600 (being the number of Ordinary Shares in respect of which the Company has existing authorities to allot on a non-pre-emptive basis) and proceed with the Placing.

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

1.4 As a term of the Placing, the Company has agreed that it will not issue or sell any Ordinary Shares (other than the Placing Shares) for a period ending on the date on which its annual report and accounts for the year ended 31 January 2014 are published, without Jefferies' prior consent. This agreement does not however prevent the Company from granting or satisfying exercises of options granted pursuant to existing share schemes of the Company.

2. Application for admission to trading

2.1 Application will be made to the London Stock Exchange for the Admission of the Placing Shares to trading on AIM. It is expected that Admission will become effective on or around 10 February 2015 and that dealings in the Placing Shares will commence at that time.

3. Bookbuild

3.1 Jefferies will today commence the Bookbuild to determine demand for participation in the Placing by Placees. 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.

3.2 Jefferies and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their absolute discretion determine.

4. Participation in, and principal terms of, the Placing

4.1 Jefferies is acting as bookrunner and agent of the Company in respect of the Placing.

4.2 Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by Jefferies. Jefferies and each of its affiliates are entitled to enter bids in the Bookbuild as principal. 

4.3 The Bookbuild will be carried out on the basis of the Placing Price of 19p per Placing Share payable to Jefferies by all Placees whose bids are successful. The number of the Placing Shares to be allocated and issued to each Placee will be determined by Jefferies in consultation with the Company following completion of the Bookbuild. Further details of the Placing, including its completion, will be announced on a regulatory information service ("RIS") following the completion of the Bookbuild.

4.4 To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at Jefferies. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at the Placing Price. Bids may be scaled down by Jefferies on the basis referred to in paragraph 8 below.

4.5 The Bookbuild is expected to close no later than 4.30 p.m. (London time) on 22 January 2015, but may be closed earlier or later at Jefferies' discretion. Jefferies may, in agreement with the Company, accept bids that are received after the Bookbuild has closed. The Company reserves the right (upon the agreement of Jefferies) to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion.

4.6 Each prospective Placee's allocation will be determined by Jefferies in consultation with the Company and will be confirmed orally by Jefferies as agent of the Company following the close of the Bookbuild. That oral confirmation will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) in favour of Jefferies and the Company to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's articles of association. 

4.7 Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to Jefferies as agent of the Company, to pay Jefferies (or as it may direct) in cleared funds, an amount equal to the product of the Placing Price and the number of Placing Shares that such Placee has agreed to subscribe for and the Company has agreed to allot and issue to that Placee.

4.8 Jefferies may choose to accept bids, either in whole or in part, on the basis of allocations determined in consultation with the Company and may scale down any bids for this purpose on such basis as it may determine. Jefferies may also, notwithstanding paragraphs 4.5 and 4.6 above, subject to the prior consent of the Company (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time.

4.9 A bid in the Bookbuild will be made on the terms and subject to the conditions in this announcement and will be legally binding on the Placee on behalf of which it is made and except with Jefferies' consent will not be capable of variation or revocation after the time at which it is submitted.

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

4.11 All obligations under the Bookbuild and Placing will be subject to 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 Agreement".

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

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

5. Conditions of the Placing

5.1 The obligations of Jefferies under the Placing Agreement in respect of the Placing are conditional on, amongst other things:

5.1.1 agreement being reached between the Company and Jefferies on the terms of the Placing, including the number of Placing Shares to be allocated and issued to each Placee and publication of an announcement by the Company regarding completion of the Placing, through a RIS, as soon as reasonably practicable thereafter;

5.1.2 the Shareholder Resolutions being approved by the requisite majority of Shareholders attending and voting at the General Meeting;

5.1.3 the allotment of the Placing Shares by the Company, subject only to Admission;

5.1.4 the warranties contained in the Placing Agreement being true and accurate in every respect and not misleading on the date of the Placing Agreement and at Admission, as though they had been given and made on such date by reference to the facts and circumstances then subsisting;

5.1.5 the Company complying with all of its obligations under the Placing Agreement to the extent the same fall to be performed or satisfied prior to Admission;

5.1.6 Admission taking place by 8.00 a.m. (London time) on 10 February 2015 (or such later date as the Company and Jefferies may otherwise agree) (the " Admission Date"); and

5.1.7 in the sole opinion of Jefferies, there shall not have been a material adverse change in, or affecting, the condition(financial, operational, legal or otherwise) or the earnings, management, business affairs, solvency or prospects of the Company or of its subsidiaries (taken as a whole), whether or not arising in the ordinary course of the business and whether or not foreseeable at the date of the Placing Agreement (a "Material Adverse Change") since the date of the Placing Agreement.

5.2 If any of the conditions contained in the Placing Agreement in relation to the Placing are not fulfilled or waived by Jefferies, by the time or date where specified (or, in each case, such later time and/or date as the Company and Jefferies may agree), the Placing will not proceed and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof. 

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

5.4 None of Jefferies, the Company or any other person shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Jefferies.

6. Termination of the Placing Agreement

6.1 Jefferies may at any time prior to Admission terminate the Placing Agreement by giving notice in writing to the Company, if, amongst other things:

6.1.1 the Company's application for Admission has been refused by the London Stock Exchange or, in the judgement of Jefferies acting in good faith in pursuance of its duties under the Placing Agreement, will not be granted; or

6.1.2 there has been a Material Adverse Change and, in the opinion of Jefferies, the effect of such change is that it would materially prejudice the success of the Placing or the distribution of Placing Shares; or

6.1.3 there has occurred:

(a) any government regulation or other occurrence of any nature whatsoever which, in the reasonable opinion of the Jefferies, seriously and adversely affects or will or is reasonably likely seriously and adversely to affect the business of the Group taken as a whole; or

(b) a suspension or material limitation in trading in securities generally on the London Stock Exchange's market for listed securities, a general moratorium on commercial banking activities in London or New York or a material disruption in commercial banking or securities settlement or clearance services in the United Kingdom or United States of America, an incident of terrorism or the outbreak or escalation of hostilities involving the UK, any other EU Member State or the USA or the declaration by the UK, any other EU Member State or the USA of a national emergency or war or the occurrence of any other calamity or crisis resulting in a change in financial, political, market or economic conditions or currency exchange rates in the UK or US, which, in Jefferies' reasonable opinion, makes it impractical or inadvisable to continue with the Placing.

6.2 Upon such termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions. 

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

7. No prospectus

7.1 The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require a prospectus in the UK. 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 their own assessment of their own assessment of the Company, the Placing Shares and the Placing based on the Company's publicly available information taken together with the information contained in this announcement (including this Appendix), and subject to the further terms set forth in the contract note to be provided to individual prospective Placees. 

7.2 Each Placee, by accepting a participation in the Placing, agrees that the content of this announcement (including this 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 or Jefferies or any other person and none of Jefferies or 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.

8. Registration and Settlement

8.1 Settlement of transactions in the Placing Shares following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions. Jefferies and 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 their opinion, 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.

8.2 Following the close of the Bookbuild for the Placing, each Placee to be allocated Placing Shares in the Placing will be sent a contract note stating the number of Placing Shares allocated to it at the Placing Price and settlement instructions. The number of Placing Shares allocated to each Placee will be allocated in a manner determined by Jefferies in its absolute discretion in consultation with the Company and Placees will be notified of the relevant allocation in the contract note.

8.3 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 Jefferies.

8.4 The Company will deliver the Placing Shares to a CREST account operated by Jefferies as agent for the Company and Jefferies will enter its delivery 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.

8.5 It is expected that settlement in respect of the Placing Shares will take place on 10 February 2015 on a delivery versus payment basis.

8.6 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 Jefferies.

8.7 Each Placee is deemed to agree that, if it does not comply with these obligations, Jefferies may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Jefferies' 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.

8.8 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.

9. Representations and warranties

9.1 By participating in the Placing each Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with Jefferies (in its capacity as bookrunner and agent of the Company, in each case as a fundamental term of their application for Placing Shares), the following:

9.1.4 it has read and understood this announcement in its entirety and that its subscription of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein;

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

9.1.6 that the existing Ordinary Shares in the capital of the Company are admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of AIM, which includes a description of the nature of the Company's business and its most recent balance sheet and profit and loss account, and that it is able to obtain or access such information and such information or comparable information concerning any other publicly traded company, in each case without undue difficulty;

9.1.7 that neither Jefferies nor the Company nor any of their respective affiliates nor any person acting on behalf of any of them has provided, and none of them will provide it, with any material regarding the Placing Shares or the Company or any other person other than this announcement; nor has it requested Jefferies, the Company, any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;

9.1.8 unless otherwise specifically agreed with Jefferies, that neither it nor the beneficial owner of the Placing Shares is, or at the time the Placing Shares are acquired, neither it nor the beneficial owner of the Placing Shares will be, a resident of, or otherwise located in, the United States, Australia, Canada, Japan or the Republic of South Africa and it further acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada, Japan or the Republic of South Africa and, subject to certain exceptions, may not be offered, sold, transferred, delivered or distributed, directly or indirectly, in or into those jurisdictions;

9.1.9 that (i) it is not within the United States, (ii) it is not within Australia, Canada, Japan, the Republic of South Africa or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares, (iii) it is not acquiring the Placing Shares for the account of any person who is located in the United States, unless the instruction to acquire was received from a person outside the United States and the person giving such instruction has confirmed that it has the authority to give such instruction, and that either (a) it has investment discretion over such account or (b) it is an investment manager or investment company and, in the case of each of (a) and (b), that it is acquiring the Placing Shares in an "offshore transaction" (within the meaning of Regulation S under the US Securities Act of 1933, as amended (the "Securities Act")); and (iv) it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Placing Shares into the United States or any other jurisdiction referred to in (ii) above;

9.1.10 that the content of this announcement is exclusively the responsibility of the Company and that neither Jefferies nor any person acting on its behalf have or shall have any liability for any information, representation or statement contained in this announcement or any information previously or subsequently published by or on behalf of the Company, including, without limitation, any information required to be published by the Company pursuant to applicable laws (the "Exchange Information") and will not be liable for its decision to participate in the Placing based on any information, representation or statement contained in this announcement or otherwise. It further represents, warrants and agrees that the only information on which it is entitled to rely and on which it 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 RIS, 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 Jefferies or the Company and neither Jefferies nor the Company will be liable for Its decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. It 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. None of Jefferies, the Company or any of their respective affiliates has made any representations to it, express or implied, with respect to the Company, the Placing and the Placing Shares or the accuracy, completeness or adequacy of the Exchange Information, and each of them expressly disclaims any liability in respect thereof. Nothing in this paragraph or otherwise in this announcement excludes the liability of any person for fraudulent misrepresentation made by that person;

9.1.11 that it has complied with its obligations under the Criminal Justice Act 1993, section 118 of FSMA and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000, the Terrorism Act 2006, the Money Laundering Regulations 2007 and the Money Laundering Sourcebook of the FCA (the "Money Laundering Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

9.1.12 that it is acting as principal only in respect of the Placing or, if it is acting for any other person; (i) it is duly authorised to do so and has full power to make the acknowledgments, representations and agreements herein on behalf of each such person; and (ii) it is and will remain liable to the Company and/or Jefferies for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person);

9.1.13 if it is a financial intermediary, as that term is used in Article 3(2) of the EU Prospectus Directive (which shall mean Directive 2003/71/EC and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), that the Placing Shares subscribed 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 EEA other than qualified investors, or in circumstances in which the prior consent of Jefferies has been given to the proposed offer or resale;

9.1.14 that it has not offered or sold and will not offer or sell any Placing Shares to the public in any member state of the EEA except in circumstances falling within Article 3(2) of the Prospectus Directive which do not result in any requirement for the publication of a prospectus pursuant to Article 3 of that Directive;

9.1.15 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;

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

9.1.17 if in a member state of the EEA, unless otherwise specifically agreed with Jefferies in writing, that it is a "qualified investor" within the meaning of Article 2(1)(e) of the Prospectus Directive;

9.1.18 if in the United Kingdom, that it is a person (i) having professional experience in matters relating to investments who falls within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (ii) who falls within Article 49(2) (a) to (d) ("High Net Worth Companies, Unincorporated Associations, etc") of the Order, or (iii) to whom this announcement may otherwise lawfully be communicated;

9.1.19 that no action has been or will be taken by either the Company or Jefferies or any person acting on behalf of the Company or Jefferies 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;

9.1.20 that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions which apply to it and that it has fully observed such laws and obtained all such governmental and other guarantees, permits, authorisations, approvals and consents which may be required thereunder and complied with all necessary formalities and that it has not taken any action or omitted to take any action which will or may result in Jefferies, the Company or any of their respective directors, officers, agents, employees or advisers acting in breach of the legal or regulatory requirements of any jurisdiction in connection with the Placing;

9.1.21 that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to its Placing Participation 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;

9.1.22 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 Jefferies may in its absolute discretion determine and without liability to it;

9.1.23 that its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares to which it will be entitled, and required, to subscribe for, and that Jefferies or the Company may call upon it to subscribe for a lower number of Placing Shares (if any) (including in circumstances where the Company and Jefferies agree to reduce the number of Placing Shares where the Shareholder Resolutions are not approved and the Placing proceeds with a reduced number of Placing Shares), but in no event in aggregate more than the aforementioned maximum;

9.1.24 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 Jefferies 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. It and any person acting on its behalf agrees to indemnify the Company and Jefferies in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of Jefferies who will hold them as nominee on its behalf until settlement in accordance with standing settlement instructions; 

9.1.25 that neither Jefferies, nor any of its affiliates, nor any person acting on its behalf, is making any recommendations to it or, 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 either of Jefferies and that Jefferies do not have any duties or responsibilities to it for providing the protections afforded to its clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

9.1.26 that in making any decision to subscribe for the Placing Shares, it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for or purchasing 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 participating in, and are able to sustain a complete loss in connection with, the Placing. 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, and not upon any view expressed or information provided by or on behalf of Jefferies;

9.1.27 that in connection with the Placing, Jefferies and any of its affiliates acting as an investor for its own account may take up Placing Shares in the Company and in that capacity may retain, purchase or sell for its own account such Placing Shares in the Company and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing. Jefferies do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so;

9.1.28 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 its own behalf and on behalf of any person on whose behalf it is acting, to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or Jefferies in any jurisdiction in which it is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

9.1.29 that the Company, Jefferies and their respective affiliates and others will rely upon the truth and accuracy of the representations, warranties and acknowledgements set forth herein and which are given to Jefferies on its own behalf and on behalf of the Company and are irrevocable and it irrevocably authorises the Company and Jefferies 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; and

9.1.30 that it will indemnify and hold the Company and Jefferies and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this announcement and further agrees that the provisions of this announcement shall survive after completion of the Placing. 

9.2 By participating in the Placing, each Placee (and any person acting on the Placee's behalf) subscribing for Placing Shares acknowledges that: (i) the Placing Shares are being offered and sold only pursuant to Regulation S under the Securities Act, or another exemption from the registration requirements of the Securities Act, in a transaction not involving a public offering of securities in the United States and the Placing Shares have not been and will not be registered under the Securities Act; and (ii) the offer and sale of the Placing Shares to it has been made outside of the United States in an "offshore transaction" (as such term is defined in Regulation S under the Securities Act) and it is outside of the United States during any offer or sale of Placing Shares to it.

9.3 Please also note that the agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the UK relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct from the Company for the Placing Shares in question. The Company and Jefferies are not liable to bear any transfer taxes that arise on a sale of Placing Shares subsequent to their acquisition by Placees or for transfer taxes arising otherwise than under the laws of the United Kingdom. Each Placee should, therefore, take its own advice as to whether any such transfer tax liability arises. Furthermore, each Placee agrees to indemnify on an after-tax basis and hold Jefferies and/or the Company and their respective affiliates harmless from any and all interest, fines or penalties in relation to stamp duty, stamp duty reserve tax and all other similar duties or taxes to the extent that such interest, fines or penalties arise from the unreasonable default or delay of that Placee or its agent.

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

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

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

9.7 9.69.7 The rights and remedies of Jefferies and the Company under these Terms and Conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

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

DEFINITIONS

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