Ultrasis Plc Regulatory News (ULT)

Ultrasis plc

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

Dispatch of Circular, Notice of General Meeting and Notice of AGM

Further to the announcements made on 15 December 2014 and 2 March 2015 regarding its proposed refinancing, Ultrasis announces that it has today sent a Circular to Shareholders setting out further details of the proposed Share Capital Reorganisation, Subscription for New Ordinary Shares, Open Offer of New Ordinary Shares, New Facility Agreement, Waiver of obligation under Rule 9 of the City Code on Takeovers and Mergers and Change of Name to 365 Health Solutions plc. In aggregate, the Fundraising and New Facility will raise up to £5.375 million, before expenses.

The Circular gives notice of a General Meeting to approve the Resolutions. The General Meeting will be held at 10.00 a.m. on 14 April 2015 at the offices of finnCap Ltd, 60 New Broad Street, London, EC2M 1JJ.

The Company also gives notice of its AGM, convened for 11.00 a.m. on 14 April 2015 at the office of finnCap Ltd, 60 New Broad Street, London, EC2M 1JJ.

Circular

A Circular has been posted to Shareholders, the purpose of which is, amongst other things, to provide Shareholders with details of the Proposals, to explain the Company's current position, and to explain why the Board considers that the Subscription, New Facility and Open Offer are fair and reasonable and in the best interests of Independent Shareholders generally and the Company as a whole. The Circular explains how Qualifying Shareholders can apply for their Open Offer Entitlement pursuant to the Open Offer. Extracts from the Circular can be found below and a full copy can be found on the Company's website at http://www.ultrasisplc.com.

John Smith and Alan Kershaw are participating in the Subscription alongside Paul Bell and thus are not deemed independent. Accordingly they are not able to give any recommendation with regards to the Waiver Resolution or Resolution 8.

Settlement and dealings

Application will be made to the London Stock Exchange for the New Ordinary Shares to trading on AIM. It is expected that such Admission will become effective and that dealings in the New Ordinary Shares will commence on 15 April 2015.

Expected timetable

Note: All references to times in this timetable are to London times. The times and dates may be subject to change.

Other

Unless otherwise defined, all capitalised terms in this announcement shall have the meaning given to them in the Circular, which can be found on the Company's website http://www.ultrasisplc.com.

For all enquiries relating to Ultrasis please contact:

Notes to Editors:

Ultrasis is a provider of health and social care services providing access to physical and mental health services either face to face or via technology. We deliver our range of healthcare products to the consumer, health professionals, and the corporate sector in the UK and Internationally. Ultrasis was the first company to offer computerised products based on Cognitive Behavioural Therapy (CBT) and interactive multimedia, and is still a world leader in this field.

The following text has been extracted from the Circular.

1. Introduction

The Company previously announced that it proposes to raise up to £5.3 million by way of the New Facility, the Subscription and an open offer to existing Shareholders.

Following completion of the Proposals, assuming full conversion of the New Facility, no take up under the Open Offer by Independent Shareholders or Mr Smith, full take up of the Open Offer by Mr Bell and Mr Bate exercising his Options in full, assuming no other New Ordinary Shares were issued prior to that time, the Concert Party would be interested in a maximum of 79.0 per cent. of the total voting rights of the Company, which, without a waiver of the obligation under Rule 9 of the Takeover Code, would obligate the Concert Party to make a general offer to Shareholders under Rule 9 of the Takeover Code. The Takeover Panel has agreed, however, to waive this obligation subject to Independent Shareholder consent being obtained to approve the Waiver.

Owing to the need for approval of the Waiver and to grant the Directors the authority to issue and allot New Ordinary Shares and carry out the Share Capital Reorganisation, there will be a General Meeting, convened for 10.00 a.m. on 14 April 2015 to be held at the offices of finnCap Ltd, 60 New Broad Street, London EC2M 1JJ, at which Independent Shareholders will be asked to approve the Waiver Resolution and Shareholders will be asked to approve certain other resolutions to give effect to the Proposals.

The Directors believe that it is appropriate, should the Resolutions be approved by Shareholders at the General Meeting, that the name of the Company be changed to 365 Health Solutions plc and the Company adopts amended articles of association, inter alia, to reflect the Share Capital Reorganisation and structure of the Board.

The purpose of the Circular is to provide information on the background to the Company's current position, to explain why the Board considers that the Proposals and the Waiver are in the best interests of Independent Shareholders as a whole and to provide you with details of and to seek your approval of the Resolutions necessary to implement the Proposals. In order to show their support for the ongoing development of the business, the Directors and the Proposed Director intend to subscribe for, in aggregate, 325,000 New Ordinary Shares at the Offer Price pursuant to the Subscription.

The terms of the Open Offer, and the steps required for Qualifying Shareholders to participate in the Open Offer, are set out in Part III of the Circular.

Shareholders' attention is drawn to paragraph 3 of Part I of the Circular which sets out the current funding available to the Company.

The Directors believe that, without the additional funding that would be made available to the Company via the Proposals, or any other material injection of funds, the Company will not have sufficient funds to enable it to continue to trade.

2. Background to and Reasons for the Fundraising

The Company has been loss making for the past three financial years. As a result, the Company has been and remains dependent on Mr Bell for the provision of ongoing funding for working capital purposes. Since January 2013, funding has been made available to the Company by Mr Bell via the Existing Facilities. Further information on the Existing Facilities is set out in paragraph 3 of Part I of the Circular.

The Board has considered a number of other options for securing funding but has come to the conclusion that the Proposals represent the only viable option to provide sufficient working capital on the basis that they provide access to funding immediately following Admission in an amount sufficient to meet the Company's short term cash requirements; in addition it demonstrates the continued support of Mr Bell, the largest shareholder of the Group.

The Directors believe that, without the additional funding that would be made available to the Company via the Proposals or any other material injection of funds, the Company will not have sufficient funds to enable it to continue to trade.

3. Existing Facilities

Under the Existing Facilities provided by Mr Bell, which comprise the First Facility and the Second Facility, the Company can draw down a maximum amount of £2,800,000. The majority of the Existing Facilities have been drawn down and it is anticipated that they will be fully drawn down by the date of the General Meeting. In addition, Mr Bell has lent a further £250,000 to the Company, the terms of which are deemed to be the same as the First Facility. Amounts drawn down under the First Facility are secured against the assets of the Company, whereas amounts drawn down under the Second Facility are unsecured. The main terms of the Existing Facilities are as follows:

3.1 First Facility

3.2 Second Facility

It is a condition of the Subscription and New Facility (outlined in paragraph 4 of Part I of the Circular) that the Existing Facilities, together with accrued interest, are repaid in full immediately following Admission.

4. Subscription and New Facility

The Subscription and New Facility are conditional on, inter alia, the Resolutions being passed at the General Meeting. Further details of the Subscription and New Facility can be found below:

4.1 Subscription

Under the terms of the Subscription, Mr Bell, Mr Bate, Mr Smith and Mr Kershaw have agreed to subscribe for 1,550,000, 50,000, 250,000 and 25,000 Subscription Shares respectively at the Subscription Price, raising gross proceeds of £1.875 million for the Company. It is a requirement of the Subscription by Mr Bell that the proceeds of his Subscription shall be used to repay, in part, the Existing Facilities.

Mr Bell and Mr Smith, as current shareholders in the Company, do not intend to take up their entitlements under the Open Offer, further details of which can be found in paragraph 7.

Mr Kershaw and Mr Bate do not currently own any Existing Ordinary Shares. However, to provide the Company with certainty of funds, Mr Bell has undertaken to take up any entitlements that are not taken up by Shareholders in the Open Offer.

4.2 New Facility

Under the terms of the New Facility Agreement, Mr Bell has agreed to provide the Company with a loan of up to £3,000,000, of which £1,500,000 shall be drawn down immediately following Admission (the "Initial Drawdown").

The main terms of the New Facility are as follows:

· the Initial Drawdown shall be used for the purpose of repaying the balance of the Existing Facilities which are not otherwise repaid from the proceeds of the Subscription by Mr Bell;

· all amounts drawn down under the New Facility may be converted into New Ordinary Shares at any time by Mr Bell at his sole discretion at the Offer Price;

· save for the Initial Drawdown and, subject to Mr Bell consenting otherwise, the New Facility may only be drawn down up to a maximum of £1,000,000 in any rolling period of 12 months and subject to drawdown in each instance being:

• on 30 days written notice to Mr Bell and subject to a maximum of £100,000 being drawn down in any rolling period of 30 days; and/or

• on 60 days written notice to Mr Bell where an aggregate amount of greater than £100,000 is drawn down in any rolling period of 30 days.

· a 4 per cent. coupon per annum shall be payable at 6 monthly intervals on 1 March and 1 September in each year on all amounts drawn down;

· the capital amount drawn down under the New Facility will be non-repayable (but will be capable of conversion into New Ordinary Shares) for a period of three years from Admission, following which any amounts drawn down become repayable on demand;

· a 10 per cent. repayment premium is payable on all repayments of principal;

· early repayment will only be possible by agreement from all parties other than where early repayment is required due to the Company being in breach of the terms of the New Facility Agreement;

· Mr Bell will be granted security in the form of a composite guarantee and debenture over the Company's assets in a form satisfactory to him; and

· Mr Bell (or a person nominated by him) to be appointed as a non-executive director of the Company at or shortly after completion of the Proposals and Mr Bell retaining the right to make and hold such appointment during the period in which any monies (including interest) are outstanding under the New Facility.

Following completion of the Proposals, assuming full conversion of the New Facility, no take up under the Open Offer by Independent Shareholders or Mr Smith, full take up of the Open Offer by Mr Bell and Mr Bate exercising his Options in full, assuming no other New Ordinary Shares were issued prior to that time, the Concert Party would be interested in a maximum of 79.0 per cent. of the total voting rights of the Company, which, without a waiver of the obligation under Rule 9 of the Takeover Code, would obligate the Concert Party to make a general offer to Shareholders under Rule 9 of the Takeover Code. The Takeover Panel has agreed, however, to waive this obligation subject to Independent Shareholder consent being obtained to approve the Waiver.

5. Current Trading and Prospects

The Company announced its results for the year to 31 July 2014 on 30 January 2015, which are available on the Company's website at http://www.ultrasisplc.com. The Board and the senior management team remain focused on growing the business and returning it to profitability by delivering on the Board's strategy to become a leading provider of health and social care services.

However, given the ongoing losses that the Company is incurring, without the funds arising from the Proposals being received by Company, in the absence of any alternative funding, the Company will not have sufficient funds to enable it to continue to trade.

6. Use of Proceeds

The net proceeds from the Proposals will be used to:

· fund the anticipated increase in working capital necessary to support the growth strategy being implemented by the Board;

· repay the Existing Facilities; and

· provide a stronger balance sheet to allow the Company to secure further contracts.

7. Open Offer

The Company is proposing to issue up to 500,124 New Ordinary Shares through the Open Offer at the Offer Price, raising, in aggregate, £0.5 million. The Offer Price of 100 pence represents a discount of 69.7 per cent. to the equivalent Closing Price of 320 pence per New Ordinary Share on 16 March 2015 (being the last trading day prior to the announcement of the Open Offer). The equivalent Closing Price is calculated by multiplying the relevant Closing Price per Existing Ordinary Share by 2,000 to give the effective price per New Ordinary Share, assuming that the Share Capital Reorganisation is approved.

The Open Offer is being made to Qualifying Shareholders on the register on the Open Offer Record Date. The Open Offer provides Qualifying Shareholders with the option to subscribe for New Ordinary Shares at the Offer Price. Each Qualifying Shareholder is entitled to apply for their Open Offer Entitlement of New Ordinary Shares (which is calculated pro rata to their holding of Ordinary Shares in the Company on the Open Offer Record Date).

Qualifying Shareholders are invited to apply for New Ordinary Shares under the Open Offer at a price of 100 pence per New Ordinary Share, payable in full on application and free of all expenses, pro rata to their existing shareholdings on the basis of:

1 New Ordinary Share for every 3,578 Existing Ordinary Shares

held at the Open Offer Record Date. Open Offer Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of New Ordinary Shares. Fractional entitlements which would have otherwise arisen will not be issued. Excess applications will be satisfied only to the extent that corresponding applications by other Qualifying Shareholders are not made or are made for less than their pro rata entitlements. If there is an oversubscription resulting from excess applications, allocations in respect of such excess applications will be scaled down pro rata to the New Ordinary Shares applied for. Shareholders holding fewer than 3,578 Existing Ordinary Shares will have no entitlement to subscribe under the Open Offer.

Mr Bell does not intend to take up his Open Offer Entitlement. However, Mr Bell has agreed to take up any New Ordinary Shares available under the Open Offer that are not taken up by Shareholders so that the Company has certainty of funding.

Applications by Qualifying Shareholders will be satisfied in full up to their Open Offer Entitlements. In addition and subject to availability, the Excess Application Facility will enable Qualifying Shareholders, who have taken up all of their basic entitlement, to apply for any whole number of Excess Shares in excess of their Open Offer Entitlements. Qualifying non-CREST Shareholders should complete the relevant sections of the Application Form. You should write the number of New Ordinary Shares that you wish to take up in Box 2, being your pro-rata entitlement detailed in Box 7. You should then write the number of New Ordinary Shares you wish to apply for under the Excess Application Facility in Box 3 and then complete Box 4 by adding together the numbers you have entered in Boxes 2 and 3. For example, if you are entitled to take up 50 shares under your Open Offer Entitlement and you wish to take up a further 25 shares under the Excess Application Facility, then you should write '50' in Box 2, '25' in Box 3 and '75' (being the total of Box 2 and Box 3) in Box 4. Qualifying CREST Shareholders will have Excess Open Offer Entitlements credited to their stock account in CREST and should refer to paragraph 4 of Part III of the Circular (Details of the Subscription and Open Offer) on how to apply for the Excess Shares pursuant to the Excess Application Facility. If there is an oversubscription resulting from excess applications, allocations in respect of such excess applications will be scaled down pro rata to the Excess Shares applied for. Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating their Open Offer Entitlements.

The Open Offer is subject to the satisfaction, amongst other matters, of the following conditions on or before 15 April 2015 (or such later date as the Company may decide, being not later than 30 April 2015):

· passing of the Resolutions; and

· Admission becoming effective.

The Open Offer Shares will, when issued and fully paid, rank pari passu in all respects with the New Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of Admission.

Settlement and dealings

Application will be made to the London Stock Exchange for the Open Offer Shares to be admitted to trading on AIM. It is expected that such Admission will become effective and that dealings will commence on 15 April 2015. Further information in respect of settlement and dealings in the Open Offer Shares is set out in paragraph 4 of Part III of the Circular.

Overseas Shareholders

Certain Overseas Shareholders may not be permitted to subscribe for New Ordinary Shares pursuant to the Open Offer and should refer to paragraph 6 of Part III of the Circular.

8. Information on the Concert Party

Mr Bell is an individual who has an interest in a number of listed and private companies. Mr Bell is a graduate in Economics from Manchester University. Following a career in accountancy and then stockbroking, he has developed a number of interests in recruitment, payroll, property development and care homes.

Mr Bell has been a shareholder in Ultrasis since September 2006 and currently holds 397,870,166 Existing Ordinary Shares representing 22.2 per cent. of the Existing Ordinary Shares. In addition, he has various loans outstanding to the Company under the Existing Facilities with a current balance of £3,050,000, the terms of which are set out in paragraph 3 of Part I of the Circular. Some of the amounts drawn under the Existing Facilities are convertible into Existing Ordinary Shares. Under the terms of the Existing Facilities, Mr Bell has undertaken not to convert these loans into Existing Ordinary Shares if such conversion would increase his percentage holding in the Company (on a fully diluted basis) beyond 29.95 per cent. of the issued share capital of the Company. If Mr Bell were to be able to convert the Existing Facilities to the full extent possible, he would increase his holding in the Company to approximately 31.7 per cent. of the current issued share capital of the Company. This would oblige Mr Bell to make a general offer to all the remaining Shareholders to acquire their shares.

Failure to do so would be in breach of Rule 9 of the Takeover Code and accordingly, under the terms of the Existing Facilities, Mr Bell has agreed to limit any conversion to 29.95 per cent. of the fully diluted issued share capital of the Company.

Mr Bate will be appointed as a non-executive director of the Company on Admission and will represent the interests of Mr Bell on the Board. Mr Bate is subscribing for 50,000 shares pursuant to the Subscription and is deemed to be acting in concert with Mr Bell and together they comprise the Concert Party. Mr Bate previously acted for the interests of Mr Bell as a non-executive director of the Company between 30 January 2013 and 23 October 2014.

Mr Bate qualified as a solicitor in 1999 having trained with Clifford Chance and Christopher Bate Solicitors. Following qualification, Mr Bate worked with law firms Stringer Saul (now Fasken Martineau) and Halliwells LLP. In 2007, Mr Bate joined WH Ireland Group plc, an AIM quoted corporate broking and private wealth management business, where he was Head of Corporate Finance, Manchester and Group Company Secretary. In May 2014, Mr Bate joined Zeus Capital Limited, an independent investment banking operation, as a Director of Corporate Finance where, based in Manchester, he specialises in all areas of corporate finance work, including AIM IPOs, M&A and fundraisings.

Further details on the Concert Party are set out in Part VII of the Circular.

9. Intentions of the Concert Party

Pursuant to the terms of the New Facility Agreement, Mr Bell shall have the right to appoint and remove one person to and from the board of directors of the Company. It is proposed that Mr Bate joins the Board as Mr Bell's representative on Admission.

Mr Bell and Mr Bate (as the two members of the Concert Party) have informed the Board that they currently intend to allow the Company to continue with its proposed strategy. The Concert Party has confirmed to the Company that it has no current intention to change the Company's current plans with respect to:

i. the continued employment of the employees and management of the Company or its subsidiaries, including any material change in conditions of employment,

ii. its strategic plans for the Company, or their likely repercussions on employment or the locations of the Company's places of business;

iii. the redeployment of the fixed assets of the Company; or

iv. maintenance of the Company's admission to trading on AIM.

10. Relationship Agreement

The Company, finnCap and Mr Bell have entered into an agreement dated 17 March 2015 pursuant to which Mr Bell has agreed with the Company and finnCap that he shall (and that he shall use reasonable endeavours to procure that any associates of his shall) do all such things as he is reasonably able to do, inter alia, to ensure that the Company carries on its business independently, at arms' length and on a normal commercial basis and that there are and remain at all times not less than two directors on the Board who are independent of Mr Bell. The agreement is conditional in all respects, and will take effect, on Admission and will remain in force until the time at which Mr Bell (and any of his associates) ceases to hold an interest in, directly or indirectly, 50 per cent. or more of the voting rights in the Company.

11. Dispensation from Rule 9 of the Takeover Code

Rule 9

The Takeover Code governs, inter alia, transactions which may result in the change of control of a public company to which the Takeover Code applies.

Under Rule 9, any person who acquires an interest (as defined in the Takeover Code) in shares, which taken together with shares in which he is already interested and in which persons acting in concert with him are interested, carry 30 per cent. or more of the voting rights of a company which is subject to the Takeover Code, is normally required to make a general offer to all the remaining shareholders to acquire their shares.

Similarly, when any person, together with persons acting in concert with him, is interested in shares which in aggregate carry not less than 30 per cent. of the voting rights of such company but does not hold shares carrying more than 50 per cent. of such voting rights, a general offer will normally be required if any further interest in shares are acquired by any such person or persons acting in concert with it.

An offer under Rule 9 must be made in cash and at the highest price paid by the person required to make the offer, or any person acting in concert with him, for any interest in shares in the company during the 12 months prior to the announcement of the offer.

Potential Interests in New Ordinary Shares of the Concert Party following the Proposals

At the date of the Circular, the Concert Party has an interest in 397,870,166 Existing Ordinary Shares, representing 22.2 per cent. of the Company's issued share capital. If the Proposals are approved by Shareholders and Mr Bell and Mr Bate acquire further interests in New Ordinary Shares either pursuant to the Open Offer, the Subscription or the New Facility, the shareholding of the Concert Party would exceed 30 per cent. and the Concert Party would be required to make a general offer to all the remaining Shareholders to acquire their shares in accordance with Rule 9 of the Takeover Code.

The Takeover Panel has agreed, in principle, to grant a conditional waiver that would release the Concert Party from such an obligation and would allow the Concert Party to increase its shareholding to a maximum of 79.0 per cent. of the Company's issued share capital. This Waiver is conditional on: (i) neither Mr Bell or Mr Bate acquiring any interest in any other Ordinary Shares prior to the General Meeting; and (ii) the passing of the Waiver Resolution by Independent Shareholders at the General Meeting. Voting on the Waiver Resolution will be on a poll, as required by the Takeover Code. Insofar as they are interested in Existing Ordinary Shares, the Concert Party will not vote on the Waiver Resolution.

In the event that the Concert Party's aggregate shareholding increases to over 50 per cent. of the Company's issued share capital, the Concert Party will be entitled to acquire additional New Ordinary Shares without incurring an obligation to make a general offer to the remaining Shareholders for their New Ordinary Shares. This is because, under Rule 9, where any person who (together with persons acting in concert with him) already holds shares carrying over 50 per cent. of the voting rights of a company acquires an interest in shares which carry additional voting rights, then that person will not be required to make a general offer to the remaining Shareholders to acquire their shares. Accordingly, if the shareholding of the Concert Party increased over 50 per cent. as a result of the Proposals, it will be entitled to acquire further shares without being required to make a mandatory offer and without the need for prior consent of the Takeover Panel, although individual members of the Concert Party will not be able to increase their percentage interest in shares through or between a Rule 9 threshold without the consent of the Takeover Panel.

Shareholders should also be aware that if the Resolutions are passed, the Concert Party will not be restricted from making an offer for the Company.

12. Share Capital Reorganisation

There are currently 1,789,446,652 Existing Ordinary Shares in issue and the Board is not able to issue shares below the existing nominal value of 0.1 pence. The Board therefore proposes to reduce the number of Existing Ordinary Shares by way of a share consolidation followed by a share split. Under the Consolidation every 2,000 Existing Ordinary Shares shall be consolidated into one Consolidated Ordinary Share. Each Consolidated Ordinary Share will then be subdivided into one New Ordinary Share and 99 Deferred Shares.

The Deferred Shares will not entitle holders to receive notice of or attend and vote at any general meeting of the Company or to receive a dividend or other distribution or to participate in any return of capital on a winding up other than the nominal amount paid on such shares following a substantial distribution to the holders of New Ordinary Shares. Accordingly, the Deferred Shares will, for all practical purposes, be valueless and it is the Board's intention that, at an appropriate time, the Company may repurchase the Deferred Shares, cancel or seek to surrender the Deferred Shares using such lawful means as the Board may at such time determine.

The Deferred Shares will not be admitted to trading on any stock exchange.

Therefore, following completion of the Share Capital Reorganisation, for every 2,000 Existing Ordinary Shares currently held, a Shareholder will receive one New Ordinary Share and 99 Deferred Shares.

As at 16 March 2015 (the latest practicable date prior to the date of the Circular), the issued share capital of the Company was as follows:

Only whole numbers of shares will be issued as part of the Share Capital Reorganisation. There will be no fractional entitlements to shares. Therefore, for a shareholder owning 100,000 Existing Ordinary Shares with a market value of 0.16 pence per Existing Ordinary Share (being the closing mid-market price of an ordinary share in the capital of the Company as at 16 March 2015, being the latest practical date prior to the posting of the Circular) his/her 100,000 Existing Ordinary Shares would have an aggregate market value of £16.00. Following the Share Capital Reorganisation he/she would hold 50 New Ordinary Shares with a value of 320 pence each and an aggregate value of £16.00 (assuming the share price of the New Ordinary Shares only changes to reflect the consolidation of Existing Ordinary Shares). The Deferred Shares have no value.

The issued share capital of the Company immediately following the Share Capital Reorganisation is expected to be as follows:

The rights attached to the New Ordinary Shares will be identical in all respects to those of the Existing Ordinary Shares. The Share Capital Reorganisation will not affect the voting rights of holders of Existing Ordinary Shares who receive New Ordinary Shares.

Application will be made for admission of the New Ordinary Shares to trading on AIM. It is expected that the dealing and settlement in CREST in the Existing Ordinary Shares will continue until the close of business on 14 April 2015. Subject to the necessary approval at the General Meeting, Admission is expected to occur at 8.00 a.m. on 15 April 2015.

Shareholders who hold their Existing Ordinary Shares in uncertificated form will have their CREST accounts credited with the New Ordinary Shares (ISIN: GB00BVXC4297 ) as soon as practicable after Admission.

New definitive share certificates will be issued to holders of New Ordinary Shares in certificated form, which will supersede the existing share certificates. No share certificates will be issued, or CREST accounts credited in relation to the Deferred Shares.

The Notice of General Meeting set out in at the end of the Circular contains resolutions to give effect to the proposed Share Capital Reorganisation.

13. Share Option Scheme

Further to the announcement made on 15 December 2014, if the Share Capital Reorganisation proceeds, Mr Smith will surrender options over 17,666,667 Existing Ordinary Shares granted under the Share Option Scheme, and Mr Smith, Mr Kershaw and Mr Bate will each be granted Options under the Share Option Scheme over 200,000 New Ordinary Shares at an exercise price of £1 per New Ordinary Share. These options are subject to performance conditions relating to the share price performance which is based on New Ordinary Shares achieving Closing Prices of between £1.50 and £3.00 per New Ordinary Share. Further details of these grants and the terms of the Share Option Scheme are set out in paragraph 6.12 of Part VIII of the Circular.

14. Irrevocable undertakings

Insofar as Mr Smith is interested in Existing Ordinary Shares, he has given irrevocable undertakings to the Company to vote in favour of all Resolutions, other than the Waiver Resolution and Resolution 8, in respect of his entire beneficial holdings totalling, in aggregate, 3,648,621 Existing Ordinary Shares, representing approximately 0.2 per cent. of the Existing Issued Share Capital.

In addition, nine Shareholders listed below have given irrevocable undertakings to the Company to vote in favour of the Resolutions (and, where relevant, to procure that such action is taken by the relevant registered holders if that is not them) in respect of their holdings totalling, in aggregate, 155,856,308 Existing Ordinary Shares, representing approximately 8.7 per cent. of the Existing Issued Share Capital.

Independent Shareholders giving irrevocable undertakings:

Mr Bell, who holds an interest in 397,870,166 Existing Ordinary Shares, representing approximately 22.2 per cent. of the Existing Issued Share Capital, has irrevocably undertaken to the Company to vote in favour of the Resolutions, other than the Waiver Resolution and Resolution 8 on which he is unable to vote.

Therefore, the Company has received irrevocable undertakings to vote in favour of the Resolutions, other than the Waiver Resolution and Resolution 8, in respect of holdings totalling, 557,375,095 Existing Ordinary Shares, representing approximately 31.1 per cent. of the Existing Issued Share Capital. The Company has received irrevocable undertakings to vote in favour of the Waiver Resolution and Resolution 8 in respect of holdings totalling 155,856,308 Existing Ordinary Shares, representing approximately 8.7 per cent. of the Existing Issued Share Capital.

15. Proposed Director

It is proposed that, on Admission, Mr Bate rejoins the Board as a non-executive director to represent the interests of Mr Bell, as is Mr Bell's right under the terms of the New Facility Agreement.

16. Change of name

To reflect the ongoing strategy of the Company, it is proposed that, conditional on the completion of the Proposals, the Company will change its name to 365 Health Solutions plc and it's TIDM to 365H. It is expected that the change of name and TIDM will become effective on or by 17 April 2015.

17. Amendments to Company Articles of Association

Pursuant to the Proposals, the Company intends to amend its Articles to include the rights and restrictions attaching to the Deferred Shares as set out in paragraph 12 of Part I above. A copy of the Articles (incorporating the changes proposed in the Notice of General Meeting) may be obtained from the Company's registered office.

18. Annual General Meeting

The Company posted its report and accounts for the year ended 31 July 2014 on 30 January 2015. The Company intends to hold its AGM following the General Meeting and the notice of AGM has been posted to Shareholders with the Circular and the Notice of General Meeting.

19. General Meeting

A General Meeting of the Company is being convened for 10.00 a.m. on 14 April 2015 to be held at the offices of finnCap Ltd, 60 New Broad Street, London, EC2M 1JJ at which the Resolutions will be proposed. The full text of the Resolutions is set out in the Notice of General Meeting, but set out below is a summary of the Resolutions:

Resolution 1

An ordinary resolution to approve the Share Capital Reorganisation.

This Resolution is conditional upon the passing of Resolutions 2, 3, 4, 5, 6 and 7.

Resolution 2

A special resolution to incorporate provisions into the Articles to provide for the rights and restrictions attaching to the Deferred Shares.

This Resolution is conditional upon the passing of Resolution 1.

Resolution 3

An ordinary resolution to approve and ratify the entering into of the documentation relating to the New Facility.

This Resolution is conditional upon the passing of Resolution 1.

Resolution 4

An ordinary resolution to approve and ratify the entering into of the Subscription Agreements.

This Resolution is conditional upon the passing of Resolution 1.

Resolution 5

An ordinary resolution to authorise the Directors to allot relevant securities up to an aggregate nominal value of £119,502.48, such authority to expire at the conclusion of the next annual general meeting after the AGM or on the date which is 6 months after the next accounting reference date of the Company (if earlier).

This Resolution is conditional upon the passing of Resolution 1.

Resolution 6

A special resolution to disapply statutory pre-emption rights, to facilitate the Proposals, in relation to the allotment of the relevant securities up to an aggregate nominal value of £119,502.48, such authority to expire at the conclusion of the next annual general meeting after the AGM or on the date which is 6 months after the next accounting reference date of the Company (if earlier).

This Resolution is conditional upon the passing of Resolution 1.

Resolution 7

An ordinary resolution to approve the Waiver to be granted by the Panel in respect of the Concert Party and any obligation which might arise on the Concert Party under Rule 9 to make a general offer as a result of the Proposals. The resolution relating to the approval of the Waiver will be proposed as an ordinary resolution and will be taken on a poll. Only the Independent Shareholders will be entitled to vote on this resolution which is required by the Takeover Code.

Resolution 8

As required under the Code, an ordinary resolution to approve and ratify the granting of the Options to Mr Smith, Mr Kershaw and Mr Bate pursuant to the terms of the Share Option Scheme. This resolution is independent of all other resolutions proposed at the General Meeting. The resolution will be proposed as an ordinary resolution and will be taken on a poll. Only the Independent Shareholders will be entitled to vote on this resolution.

Resolution 9

A special resolution to approve the change of the name of the Company to 365 Health Solutions plc.

Resolutions 1, 3, 4 and 5 (which are ordinary resolutions) will require a simple majority of those persons voting in person or by proxy (whether on a show of hands or on a poll) in favour of such Resolutions.

Resolutions 7 and 8 (which are ordinary resolutions) will require a simple majority of those persons voting in person or by proxy in favour of such Resolutions and will be taken on a poll. Only the Independent Shareholders will be entitled to vote on Resolutions 7 and 8.

Resolutions 2, 6 and 9 (which are special resolutions) will require approval by not less than 75 per cent. of those voting in person or by proxy (whether on a show of hands or on a poll) in favour of such Resolutions.

The Resolutions described above relating to the authority of the Directors to (a) allot relevant securities and (b) disapply the statutory pre-emption rights in relation to such securities relate only to shares being allotted pursuant to the Fundraising. The notice of annual general meeting posted to Shareholders with the Circular proposes similar resolutions to authorise the Directors to issue further securities, in addition to those being sought at the General Meeting, at levels which are usual and appropriate for the annual general meeting of the Company.

Shareholders should note that the Company will not be able to proceed with the Proposals unless and until the Resolutions are approved at the General Meeting. The consequences of the Company not being able to proceed with the Proposals are set out at paragraph 2 above.

20. Related Party Transaction and Independence

As at the date of the Circular, Mr Bell holds 397,870,166 Existing Ordinary Shares representing 22.2 per cent. of the Company's issued share capital, and as a result of this, his participation in the Subscription and Open Offer and the entering into of the New Facility Agreement are deemed to be related party transactions pursuant to AIM Rule 13. Furthermore, the participation in the Subscription of both Mr Smith and Mr Kershaw, who, as directors of the Company are deemed to be related parties, also constitutes a related party transaction pursuant to AIM Rule 13. In the absence of any independent directors, finnCap considers that the terms of the aforementioned related party transactions are fair and reasonable insofar as Independent Shareholders are concerned.

Furthermore, given Mr Smith's and Mr Kershaw's participation in the Subscription, they are not deemed to be independent for the purposes of making a recommendation to Independent Shareholders on the terms of the Proposals and the Waiver. Accordingly, insofar as they are interested in Existing Ordinary Shares, neither will be voting in respect of the Waiver or Resolution 8. Mr Bell, as a party subject to the Waiver, is also not considered to be independent for the purposes of the Waiver and, therefore, will not vote on the Waiver Resolution at the General Meeting. Mr Bell is also deemed to be in concert with Mr Bate and so will also not vote on Resolution 8 in respect of the Share Option Scheme.

21. Advice to the Board

Shareholders' attention is drawn to the letter from finnCap Ltd in Part II of the Circular in which it advises the Board that, in its view, taking into account, inter alia, the factors set out in Part I of the Circular and the commercial assessments of the Board, the Proposals and the Waiver are fair and reasonable and in the best interests of Independent Shareholders and the Company as a whole.