Venture Life Regulatory News (VLG)

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW. THIS ANNOUNCEMENT IS NOT AN OFFER TO SELL OR A SOLICITATION TO BUY SECURITIES IN ANY JURISDICTION, INCLUDING THE UNITED STATES, CANADA, AUSTRALIA, JAPAN AND THE REPUBLIC OF SOUTH AFRICA. NEITHER THIS ANNOUNCEMENT NOR ANYTHING CONTAINED HEREIN SHALL FORM THE BASIS OF, OR BE RELIED UPON IN CONNECTION WITH, ANY OFFER OR COMMITMENT WHATSOEVER IN ANY JURISDICTION.

12 February 2016

Venture Life Group plc

("Venture Life" or the "Company")

Proposed placing of ordinary shares and issue of Convertible Bonds together to raise up to £3.7 million, proposed acquisition of Periproducts Limited

Venture Life, the international consumer healthcare group addressing the self-care needs of the ageing population, announces the proposed acquisition of Periproducts Limited ("Periproducts") for a total estimated cash consideration of approximately £5.6 million (subject to adjustment) (the "Acquisition"), the proposed placing of up to 2,428,572 new ordinary shares of 0.3 pence each in the capital of the Company ("Placing Shares"), representing approximately 7.1% of the Company's existing ordinary share capital, to raise up to £1.7 million, of which £0.8 million is firmly committed, and a convertible bond issue to raise up to £2.0 million, of which £1.5 million has been underwritten. In addition, certain of the Directors have indicated that they may participate in the issue of the Convertible Bonds, if necessary, to ensure that, together with the £1.5 million Convertible Bonds which are to be underwritten (if required), at least £1.9 million in aggregate of Convertible Bonds will be issued.

To fund the Acquisition and its associated costs, Venture Life requires the net proceeds receivable by the Company from the Placing and the Convertible Bond Issue in addition to its existing cash resources. The Placing and the Convertible Bond Issue are subject to Shareholder approval. The Acquisition is, in turn, conditional on completion of the Placing and the Convertible Bond Issue.

Acquisition highlights

* unaudited

Placing highlights

Convertible Bond Issue highlights

· Venture Life intends to issue a convertible bond ("Convertible Bond Issue") to raise up to £2.0 million, arranged by UK Bond Network, with £1.5 million of the Convertible Bond Issue underwritten. In addition, certain of the Directors have indicated that they may participate in the issue of the Convertible Bonds, if necessary, to ensure that, together with the £1.5 million of Convertible Bonds which are to be underwritten (if required), at least £1.9 million in aggregate of Convertible Bonds will be issued.

· The Convertible Bond will pay a coupon of between 7%-9%, with the exact rate being determined by participating bond investors through UK Bond Network's auction process outlined in this Announcement. The Convertible Bond will be convertible into ordinary shares of 0.3 pence each in the capital of the Company ("Ordinary Shares") at a share price of 87.5 pence, being a 25% premium to the Placing Price.

· The Convertible Bond may be repaid by Venture Life at any time on or after 3 March 2018, with full repayment of the principal amount of the Convertible Bond due on 3 March 2019.

· The Convertible Bond Issue is also conditional on Shareholder approval of the Resolutions to be proposed at the General Meeting.

Jerry Randall, Chief Executive Officer, said:

"I am delighted that we have agreed terms for the proposed acquisition of Periproducts. The product range of Periproducts is a premium range in the medicated mouthwash category, and significantly strengthens our oral care portfolio. The products hold a strong position in the UK pharmacy channel, and have been present there for over 15 years. However, there has been limited internationalisation of the range and, as this is an area of expertise for the Group, we expect to grow the international presence of this brand significantly. Many internal synergies make this acquisition attractive, and it is in-line with our strategy to leverage the operating platform we have built. We expect the proposed acquisition to be earnings enhancing in our first full year of ownership and are very excited by the opportunities that Periproducts' UltraDEX® range offers the Group."

This Announcement should be read in its entirety. In particular, your attention is drawn to the Important Notices section of this Announcement, to the detailed Terms and Conditions of the Placing and further information relating to the Bookbuild described in the Appendices. By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement in its entirety and to be making such offer on the terms and subject to the conditions in it, and to be providing the representations, warranties, acknowledgements and undertakings contained in the Appendices. Members of the public are not eligible to take part in the Placing and no public offering of securities will be made.

High net worth, sophisticated, professional and institutional investors (in each case as defined in FSMA and regulations under FSMA) will be the only investors eligible to participate in the Convertible Bond Issue ("Eligible Investors"). These investors will be required to self-certify themselves, in accordance with the procedure required under FSMA, as being an investor falling into one of these categories before participating. Eligible Investors who wish to participate will need to become a member of UK Bond Network's platform (www.ukbondnetwork.com).

In relation to the Convertible Bond Issue, there is a pre-auction period, commencing on or around the date of this document, for Eligible Investors to review the offering, followed by a two week live auction period, commencing at 9.00 a.m. on 17 February 2016 and finishing at 4.30 p.m. on 2 March 2016, at the end of which the final Convertible Bond Issue size and coupon will be determined.

For further information, please contact:

Venture Life Group plc +44 (0)1344 742 870

Jerry Randall, Chief Executive Officer

James Hunter, Chief Financial Officer

Panmure Gordon +44 (0) 207 886 2500

Freddy Crossley / Peter Steel / Duncan Monteith, Corporate Finance

Tom Salvesen, Corporate Broking

Square One Consulting +44 (0) 207 929 5599

David Bick / Brian Alexander

UK Bond Network +44 (0)20 3701 0111

Chris Maule, Chief Executive Officer

1. Introduction

The Company announces the proposed Acquisition of Periproducts for approximately £5.6 million (subject to adjustment) and a Placing to raise up to approximately £1.7 million (before expenses) through the issue of up to 2,428,572 Placing Shares at a price of 70 pence per Ordinary Share and an issue of Convertible Bonds to raise up to £2.0 million, of which £1.5 million has been underwritten and a further £0.4 million is intended to be underwritten by certain Directors of the Company.

To fund the Acquisition and its associated costs, Venture Life requires the net proceeds receivable by the Company from the Placing and the Convertible Bond Issue in addition to its existing cash resources. The Acquisition, Placing and issue of the Convertible Bonds are, accordingly, all inter-conditional on each other.

The Proposals are conditional, inter alia, upon Shareholders' approval of the Resolutions which are to be proposed at a General Meeting of the Company to be held at 11 a.m. on or around 1 March 2016 at the offices of Simmons & Simmons LLP at CityPoint, 1 Ropemaker Street, London EC2Y 9SS.

The Company expects that it will shortly post a circular (the "Circular") to Shareholders, providing details of the background to and reasons for the Proposals and requesting the support of the Shareholders for the Resolutions.

2. Background to the Proposals

Established in 2010, Venture Life is an integrated UK-based consumer healthcare company that develops, manufactures and commercialises branded products addressing the needs of the ageing population. This market benefits from a number of attractive growth drivers, including shifts in demography with people living longer, government organisations actively promoting self-care due to increasing constraints on public sector healthcare budgets, and lifestyle factors such as difficulties faced by elderly consumers in changing dietary habits. Venture Life's objective is to capitalise on these favourable growth dynamics, building its business through organic expansion and via acquisition, both of which would leverage the Group's existing operating infrastructure.

The Group's product portfolio principally targets the regulated over-the-counter segment of the consumer healthcare market, concentrating on the market segment between prescription pharmaceuticals and unregulated health foods. The current portfolio includes medical devices, food supplements and dermo-cosmetics which address issues associated with ageing such as cognitive function, sleep disorders, cholesterol, joint and muscle ache, proctology and health of skin and hair, and which are sold in compliance with EU regulations on health claims. Other areas identified by the Board where future growth opportunities exist include diabetes, obesity, gastroenterology and oral health.

The Group's existing products are typically sold into pharmacies via the Group's growing international network of over 80 distribution partners in more than 40 countries worldwide. The products are generally protected by intellectual property rights such as patents (if granted), trademarks, formulations or other know-how. The Group's medical device and cosmetic products are manufactured at its own facility in Italy to ISO 13485 and ISO 22716 standards respectively.

The Group has also grown inorganically and, upon its admission to AIM in March 2014, acquired the development and manufacturing business, Biokosmes, based near Lecco, Italy. As well as having an extensive library of proprietary formulations, Biokosmes provides development and manufacturing capabilities, access to new customers and a significant operational gearing opportunity, having received further investment from the Group since its acquisition. This acquisition has also provided the platform for the Group's executive management team to leverage its expertise in areas such as new product development, brand management and commercialisation.

Biokosmes has been successfully integrated into the Group and, as previously stated, the Board continues to seek opportunities to execute its organic and acquisitive growth strategy. The Directors have identified Periproducts as a suitable acquisition target for the Group with a view to capitalising on their experience and successful track record of growing businesses through acquisition. The Directors are seeking to raise gross proceeds of up to £1.7 million by way of the Placing, subject to the passing of the Resolutions, in order partially to fund the Acquisition. Venture Life will use the Group's existing cash reserves, and also the net proceeds from the Convertible Bond Issue to fund the balance of the Acquisition. Further information about the Convertible Bond Issue is set out in paragraph 6 of this Announcement.

3. Acquisition of Periproducts

a. Overview of Periproducts

Periproducts is a UK-based oral care products company with a range of premium products including mouthwashes, which are alcohol-free, and toothpastes. Products in the range are used to treat bad breath, remineralise and whiten teeth and kill bacteria which cause plaque, which can in turn lead to tooth decay and gum disease. Incorporating patent protected and licensed intellectual property, Periproducts' UltraDEX®-branded products, including UltraDEX Recalcifying & Whitening range, are regarded as being particularly effective at managing bad breath, as supported by clinical data evidencing efficacy. They also come recommended by dental professionals. As a result, the brand has become well-established in the UK and enjoys high levels of customer loyalty.

The products are currently manufactured for Periproducts by third parties and sold primarily through a number of leading UK retailers with whom Periproducts has established long-standing relationships, including Boots, Tesco, Sainsbury's, Waitrose and Amazon. Sales via Boots accounted for approximately 45% of total turnover in the year ended 30 November 2014. Over 95% of Periproducts' sales were made in the UK in the year ended 30 November 2014, with products also sold in eight other EU territories.

The table below shows selected audited financial information for Periproducts:

*Source: Periproducts audited financial information

**Source: Periproducts unaudited financial information

Periproducts' unaudited management accounts for the month ended 31 December 2015 (month one of Periproducts' financial year) show that it recorded turnover, gross profit and operating profit of £0.27m, £0.17m and £0.06m respectively for the month.

Periproducts' Managing Director, Richard Bernholt, owns a 34% shareholding in the business. The remainder of Periproducts' ordinary shares are held by four other individuals and, together with the Managing Director, the Vendors have decided that now is an appropriate time to seek a sale of Periproducts' share capital.

Further information on Periproducts, which was established in 1993, can be viewed at www.periproducts.co.uk.

b. Intellectual property used in the business of Periproducts

Venture Life has carried out due diligence on Periproducts' various patent, trademark, knowhow and other intellectual property rights, some of which Periproducts owns and some of which it licenses from third parties. The Vendors have also confirmed that they are not aware of any third party current, pending or threatened claims about these intellectual property rights. Venture Life believes that there is a low risk of a future claim against Periproducts for alleged infringement in relation to one of Periproducts' products but that even if made the claim would be without merit. Nevertheless, Venture Life has obtained warranties and indemnities from the Vendors, including in respect of the future financial risks related to any such claims, which the Directors consider to be appropriate in the circumstances.

c. Rationale for the Acquisition

The Directors have explicitly expressed their intent to grow Venture Life by way of organic growth and acquisitions, and the acquisition of Periproducts brings to the Company a range of products that complement the Company's existing range of products addressing the healthcare needs of the ageing population. The Company has a particular interest in oral care products given Venture Life management's significant knowledge of the development, manufacture and sale of oral care products, and of the oral care markets. The Acquisition therefore plays to the strengths of the Venture Life management team, and also enables the Group to expand into an attractive area of the consumer healthcare market and cross-sell products into Venture Life and Periproducts' respective customer bases.

The Directors plan to focus on the areas below in order to take advantage of the opportunities available to drive Periproducts' growth in the UK and overseas following completion of the Acquisition:

· revitalisation of Periproducts' UK marketing strategy, with clearer advertising, branding and messaging;

· extension of UK retail distribution into more stores with existing UK retailers, and expanding the number of different UK retailers;

· as all registration requirements are in place for the UltraDEX products to be sold in the EU, leveraging the Company's business development infrastructure, including relationships with its key overseas distribution partners in the short-term, to internationalise Periproducts' brand and achieve meaningful commercial roll-out in Europe;

· leveraging the Group's operating infrastructure, existing manufacturing capacity and expertise in oral care product manufacturing, to bring functions such as product development, regulatory compliance and quality assurance in-house;

· longer-term, the registration of UltraDEX in other overseas markets (typically a three to six month process), to enable products to be launched in territories including the US, Latin America and Asia, the global market for medicated mouthwashes being worth over an estimated €500 million p.a.; and

· also longer-term, the development of new oral care products to complement Periproducts' existing range and identification of further product cross-selling opportunities across both Venture Life's and Periproducts' respective customer bases.

In summary, the Acquisition is an opportunity for Venture Life to acquire a brand in-line with its growth strategy in an area adjacent to its existing product portfolio and advance the enlarged Group towards profitability.

d. Terms of the Acquisition

Under the terms of the Acquisition Agreement, Venture Life has conditionally agreed to acquire the entire issued share capital of Periproducts for total headline consideration estimated at approximately £5.6 million (subject to adjustment), comprising:

· a payment to the Vendors of £4.0 million cash following Completion; and

· a further cash payment to be determined with reference to Periproducts' net current assets on a £1 for £1 basis estimated at £1.6 million, of which an estimated £0.7 million will be paid following Completion. With the exception of up to £0.4 million of deferred purchase price (as explained below), the balance will be held in escrow, with the final amount payable being determined with reference to completion accounts. Periproducts' net current assets at Completion are expected to include cash balances of around £1 million.

To fund the Acquisition and its associated costs, Venture Life will use the net proceeds from the Placing and existing cash resources, and defer up to £0.4 million of the purchase price. The deferred amount will be due for payment on the third anniversary of Completion but may be paid by Venture Life before then. Interest of 10% per annum is payable by Venture Life on the amount outstanding (adjusted for certain agreed or decided warranty or indemnity claims (if arising)) from eighteen months after Completion until payment. In addition, Venture Life will issue a three year convertible bond for at least £1.5 million (and potentially up to £2 million depending on both demand from Eligible Investors and the number of Convertible Bonds in excess of £1.9 million (being the amount of £1.5 million which has been underwritten, together with the amount of up to £0.4 million which is intended to be underwritten), which the Company chooses to issue, having regard to the net proceeds of the Placing), arranged by UK Bond Network (the "Convertible Bond"). Further details in relation to the Convertible Bond are set out in paragraph 6 of this Announcement.

Investment to support and build sales of the UltraDEX brand, both in the UK and internationally is expected to be funded, as currently, with cash generated by Periproducts' trading operations. 

Excluding net current assets, the headline consideration represents a multiple of 1.4 times Periproducts' unaudited turnover for the year ended 30 November 2015. The Board has, based on its due diligence of Periproducts, confidence in the sustainability and quality of the business. Given the significant scope to leverage the Group's operating infrastructure, the Board has also identified approximately £0.4 million of cost synergies that it is confident of delivering in the first 12 months of trading following the Acquisition, rising to £1 million after the second 12 months.

Completion of the Acquisition is conditional, inter alia, upon the passing of the Resolutions and Admission.

e. Integration of the Acquisition and further development of the Group

Following completion of the Acquisition, the Directors intend to use their significant experience of growing businesses via acquisition to integrate Periproducts into the Group, and the Board intends to continue to develop Periproducts' business as outlined in this Announcement. The Directors expect that the Acquisition will be earnings enhancing in the first full year of ownership.

The Board also expects that further acquisition and in-licensing opportunities will be identified in the field of branded consumer healthcare products addressing the needs of the ageing population.

4. Terms of the Placing

The Company intends to raise up to approximately £1.7 million before expenses by the Placing of up to 2,428,572 Placing Shares at the Placing Price. The Placing Price of 70 pence per Placing Share represents a 9.68% discount to the closing mid-market price per Ordinary Share of 77.5 pence on 11 February 2016, being the last practicable date before publication of this Announcement. The Placing Shares represent approximately 7.1% of the Existing Ordinary Shares. The Group proposes to use the entire net proceeds of the Placing partially to fund the Acquisition.

Under the terms of the Placing Agreement, Panmure Gordon, as agent of the Company, has agreed to use reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price. The Placing has not been underwritten by Panmure Gordon.

The Placing is conditional, inter alia, upon:

· the Resolutions being passed at the General Meeting without amendment;

· the Placing Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms;

· the Acquisition Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms;

· the Bond Placing Agreement and Bond Underwriting Commitment having become unconditional in all respects (save for any condition relating to Admission) and not having been terminated in accordance with their terms;

· the Convertible Bonds being issued; and

· Admission taking place by no later than 8.00 a.m. on or around 3 March 2016 (or such later date as the Company may agree with Panmure Gordon).

Therefore, the Placing is inter-conditional on completion of the Convertible Bond Issue (and vice versa), and also completion of the Acquisition. This means that unless both the Convertible Bond Issue and the Acquisition also become unconditional (other than in respect of Admission), the Placing will not complete.

The Placing Agreement contains customary warranties given by the Company to Panmure Gordon as to matters relating to the Group and its business and as to matters relevant to Venture Life and the Acquisition and a customary indemnity to Panmure Gordon in respect of liabilities arising out of or in connection with the Placing. The Placing Agreement also contains customary rights of termination which could enable Panmure Gordon to terminate the Placing in certain limited circumstances.

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings in the Placing Shares will commence on or around 3 March 2016. The Placing Shares, when issued, will be credited as fully paid and will rank in full for all dividends and other distributions declared, made or paid on the Ordinary Shares and otherwise rank pari passu in all respects with the Existing Ordinary Shares.

The Placing Shares have not been made available to the public and have not been offered or sold in any jurisdiction where it would be unlawful to do so. The Board strongly believes that raising equity finance using the flexibility provided by a non-pre-emptive placing is the most appropriate fundraising structure for the Company at this time. The Placing allows both existing institutional investors and new institutional investors to participate whilst avoiding the need for a prospectus which, if required, would be significantly more costly and time-consuming.

5. Current trading and outlook

Venture Life announced on 23 December 2015 that Venture Life's revenues for the year to 31 December 2015 are expected to be approximately £9m, an increase of over 10% (on a like-for-like constant currency basis) compared with the 2014 financial year. Venture Life's costs were lower than expected during 2015 and the Directors anticipate that the Group's post-tax earnings will remain in line with market expectations. Overall, the Board is pleased with the progress being made in line with the Group's growth strategy and continues to be optimistic as to Venture Life's future prospects.

6. Further information on the Convertible Bond Issue

a. Summary

To fund the Acquisition and associated costs, Venture Life will use the net proceeds receivable by the Company from the Placing and the Convertible Bond Issue in addition to its existing cash resources.

The auction process to be carried out in connection with the Convertible Bond Issue will be carried out by UK Bond Network, as agent of the Company, using its designated website auction platform.

The Company is proposing to raise up to £2.0 million pursuant to the Convertible Bond Issue, with the final amount to be determined by the auction process. Of this amount, UK Bond Network has procured that £1.5 million of the Convertible Bond Issue has been underwritten. In addition, certain of the Directors have indicated that they may participate in the issue of the Convertible Bonds, if necessary, to ensure that, together with the £1.5 million Convertible Bonds which are to be underwritten (if required), at least £1.9 million in aggregate of Convertible Bonds will be issued.

High net worth, sophisticated, professional and institutional investors (in each case as defined in FSMA and regulations under FSMA) will be the only investors eligible to participate in the Convertible Bond Issue ("Eligible Investors"). These investors will be required to self-certify themselves, in accordance with the procedure required under FSMA, as being an investor falling into one of these categories before participating. There will be a pre-auction period commencing on or around the date of this document for Eligible Investors to review the offering, followed by a live auction period commencing at 9.00 a.m. on 17 February 2016 and finishing at 4.30 p.m. on 2 March 2016.

The Bond will pay a coupon of between 7%-9%, with the exact rate being determined by participating bond investors through UK Bond Network's auction process. Interest under the Convertible Bond will be payable quarterly.

The Convertible Bond will be convertible into Ordinary Shares at a share price of 87.5 pence, being a 25% premium to the Placing Price.

The Convertible Bond may be repaid by Venture Life at any time on or after 3 March 2018. Full repayment of the principal amount of the Convertible Bond will be due on 3 March 2019.

b. Terms of the Convertible Bond Instrument

The Company will create and authorise the issue of up to £2.0 million unlisted, unsecured Convertible Bonds (in multiples of £1 each) by entering into the Convertible Bond Instrument upon completion of the auction. The Convertible Bonds will mature and be due for repayment in full on 3 March 2019. At the option of the Company, the Convertible Bonds may be repaid fully or partially at any time on or after 3 March 2018.

The full amount of principal under the Convertible Bonds, together with any interest accrued on them, may, at the option of Cornhill (acting in its capacity as the Bondholders' trustee), become immediately due and repayable if an "Event of Default" occurs and is continuing. The Events of Default set out in the conditions to the Convertible Bond Instrument include, among others, late payment of any sum due under the Convertible Bonds, or the insolvent liquidation of the Company.

The Convertible Bonds accrue interest daily, payable in quarterly instalments by the Company. The rate at which interest will accrue will be between 7% and 9% per annum with the exact interest rate payable to be determined through the auction process conducted by UK Bond Network.

Each Eligible Investor (or its nominee) who holds a Convertible Bond (a "Bondholder") will receive a certificate recording the details of their Convertible Bonds and, at any time before the Convertible Bonds mature, Bondholders will have the right to convert the principal amounts of their Convertible Bonds then outstanding into Ordinary Shares.

As at the date of the Convertible Bond Instrument, the price per share at which Convertible Bonds may be converted into Ordinary Shares will represent a 25% premium to the Placing Price. However, the conditions attached to the Convertible Bond Instrument set out a number of different circumstances in which this conversion price may be adjusted, including in the event of any share capital reorganisations affecting the Ordinary Shares, or if an Event of Default or a Takeover Offer occurs. Accordingly, as at the date of this document, it is not possible to ascertain exactly what effect any conversion of the Convertible Bonds may have on the interests of Shareholders, because the conversion price (and therefore the number of Ordinary Shares into which the Convertible Bonds convert) may be subject to change. However, for illustrative purposes only, if the maximum amount of £2.0 million is raised by the Convertible Bond Issue, and each Bondholder were to convert his/her entire holding of Convertible Bonds into Ordinary Shares, then the Bondholders would be required to pay a conversion price per Ordinary Share of 87.5 pence, and the Company would need to allot and issue 2,285,714 Ordinary Shares in satisfaction of their conversion.

The Company gives certain customary warranties to the Bondholders, including as to matters relating to the Group and its business.

c. Terms of the Bond Placing Agreement

Under the terms of the Bond Placing Agreement, for the purpose of procuring Eligible Investors who will subscribe for the Convertible Bonds, UK Bond Network has agreed to make available to the Company its website platform, upon which the auction of the Convertible Bonds to Eligible Investors is to be conducted.

Under the terms of the Bond Placing Agreement, completion of the Convertible Bond Issue is conditional, inter alia, upon:

· the Resolutions being passed at the General Meeting without amendment;

· the Placing Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms;

· the Acquisition Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms;

· the Bond Underwriting Commitment having become unconditional in all respects (save for any condition relating to Admission) and not having been terminated in accordance with its terms; and

· Admission taking place by no later than 8.00 a.m. on or around 3 March 2016 (or such later date as the Company may agree with Panmure Gordon but not later than 17 March 2016).

Therefore, the Convertible Bond Issue is inter-conditional on completion of the Placing (and vice versa), and also completion of the Acquisition. This means that unless both the Placing and the Acquisition also become unconditional (other than in respect of Admission), the Convertible Bond Issue will not complete.

The Bond Placing Agreement incorporates the customary warranties given by the Company under the Convertible Bond Instrument, including as to matters relating to the Group and its business. The Bond Placing Agreement also contains customary rights of termination which could enable UK Bond Network to terminate the Bond Placing Agreement in certain limited circumstances.

The Convertible Bonds have not been made available to the public and have not been offered or sold in any jurisdiction where it would be unlawful to do so.

d. Terms of the Bond Underwriting Commitment

Pursuant to the terms of the Bond Underwriting Commitment, UK Bond Network has procured that £1.5 million of the Convertible Bond Issue has been underwritten, subject to certain conditions. In addition, certain of the Directors have indicated that they may participate in the issue of the Convertible Bonds, if necessary, to ensure that, together with the £1.5 million Convertible Bonds which are to be underwritten (if required), at least £1.9 million in aggregate of Convertible Bonds will be issued.

7. Extension of Biokosmes Vendor Loan Note and Related Party Transaction

As disclosed in paragraph 10.2 of Part IX of the Company's Admission Document, in March 2014, Venture Life issued a convertible loan note for €2.0 million to the vendors of Biokosmes in part consideration for the acquisition of the entire issued equity share capital of Biokosmes (the "Biokosmes Vendor Loan Note"), which falls due for redemption on the earlier of the date on which the Annual Report and Accounts of Venture Life for the financial year ended 31 December 2015 are published or 31 July 2016 (the "Initial Repayment Date"). As part of the arrangements for the Acquisition, the vendors of Biokosmes have agreed to extend the Initial Repayment Date of the Biokosmes Vendor Loan Note to 31 July 2017. All further terms of the Biokosmes Vendor Loan Note remain as described in the Admission Document.

Where a company enters into a related party transaction, under the AIM Rules the independent directors of the company are required, after consulting with the company's nominated adviser, to state whether, in their opinion, the transaction is fair and reasonable in so far as its shareholders are concerned.

Gianluca Braguti is a director of the Company and has an interest in approximately 6,942,602 Ordinary Shares (representing an interest of approximately 20.2% of the Existing Ordinary Shares). By virtue of Mr Braguti being a Director in addition to his current interests in the Company, he is considered to be a "related party" as defined under the AIM Rules. Mr Braguti is a vendor of Biokosmes, and accordingly his agreement to extend the Initial Repayment Date of the Biokosmes Vendor Loan Note constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules.

The independent Directors consider, having consulted with the Company's nominated adviser, Panmure Gordon, that the terms of extension of the Biokosmes Vendor Loan Note as agreed by Mr Braguti, being a vendor of Biokosmes, are fair and reasonable insofar as the Company's Shareholders are concerned.

8. General meeting

The Circular will include a Notice convening the General Meeting which is to be held at the offices of Simmons & Simmons LLP at CityPoint, One Ropemaker Street, London EC2Y 9SS at 11 a.m. on 1 March 2016. At the General Meeting resolutions of the Company will be proposed, the primary purpose of which is to give the Directors authority to allot and issue the Placing Shares and, in the event that any of the Convertible Bonds are converted into Ordinary Shares in the future, authority to allot and issue Ordinary Shares in connection with the Convertible Bonds.

Resolutions 1, 2 and 3 set out in the Notice are ordinary resolutions and, to be passed, will require the approval at the General Meeting of (on a show of hands) a simple majority of Shareholders, or (on a poll) Shareholders representing a simple majority of the total voting rights of Shareholders, who, being entitled to vote, do so in person or by proxy.

Resolutions 4 and 5 set out in the Notice are special resolutions and, to be passed, will require the approval at the General Meeting of (on a show of hands) at least 75% of Shareholders, or (on a poll) Shareholders representing at least 75% of the total voting rights of Shareholders, who, being entitled to vote, do so in person or by proxy.

A summary of the Resolutions included in the Notice is set out below:

· Under Resolution 1, it is proposed that the Directors be authorised to allot new Ordinary Shares in connection with the Placing, such authority to expire on the date falling 6 months from the passing of the resolution;

· Under Resolution 2, it is proposed that the Directors be authorised to issue the Convertible Bonds and under Resolution 3, it is proposed that the Directors be authorised to allot new Ordinary Shares upon any conversion of the Convertible Bonds (the "Bond Conversion Shares").

As noted in paragraph 6(a) of this Announcement, the price per share at which Convertible Bonds may be converted into Ordinary Shares will represent a 25% premium to the Placing Price. However, the conditions attached to the Convertible Bond Instrument set out a number of different circumstances in which the conversion price (and therefore the number of Ordinary Shares into which the Convertible Bonds convert) may be adjusted, including if an Event of Default (as defined in the Convertible Bond Instrument) or a Takeover Offer occurs. If an Event of Default or a Takeover Offer occurs (which is defined as a "Relevant Event" in the Convertible Bond Instrument), the conversion price will decrease, and the number of Ordinary Shares to be allotted and issued upon conversion will increase.

Accordingly, Resolution 3 is the authority under which the Directors will allot Ordinary Shares in the event that any Bondholder wishes to convert his/her Convertible Bonds into Ordinary Shares, unless any exceptional circumstances arise, such as an Event of Default or a Takeover Offer. If an Event of Default or a Takeover arises, and a Bondholder converts his/her Convertible Bonds into a higher number of Ordinary Shares at a lower conversion price, the Directors will allot Ordinary Shares under both this authority, and, if this authority on its own is insufficient to meet the number of Ordinary Shares required to be allotted in such circumstances, the authority granted at each annual general meeting of the Company (subject to Shareholders' granting this authority at subsequent annual general meetings).

· Under Resolutions 4 and 5, it is proposed that the Directors be authorised to allot and issue the Placing Shares and the Bond Conversion Shares for cash without regard to statutory pre-emption rights.

If the Resolutions are not passed, it will not be possible for the Placing, the issue of the Convertible Bonds and, accordingly, the Acquisition to complete.

9. Recommendation by the Directors and Irrevocable Undertakings

The Directors believe that the Acquisition, the Placing and the Convertible Bond Issue, as described in this Announcement, are in the best interests of the Company and Shareholders as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting, as they have irrevocably undertaken to do in respect of their own beneficial holdings amounting to, in aggregate, 12,175,816 Ordinary Shares, which represent approximately 35.4% of the Company's Existing Ordinary Shares.

IMPORTANT NOTICES

This Announcement has been issued by, and is the sole responsibility of, the Company.

The Appendices to this Announcement (which forms part of this Announcement) set out the terms and conditions of the Placing.

By participating in the Placing, each person who is invited to and who chooses to participate in the Placing (a "Placee") by making an oral and legally binding offer to acquire Placing Shares will be deemed to have read and understood this Announcement in its entirety (including the Appendices) and to be making such offer on the terms and subject to the conditions herein, and to be providing the representations, warranties and acknowledgements contained in the Appendices.

Members of the public are not eligible to take part in the Placing and no public offering of securities will be made.

This Announcement is for information purposes only and is directed only at: (a) persons in member states of the European Economic Area who are qualified investors as defined in Article (2)(1)(e) ("qualified investors") of Directive 2003/71/EC; and (b) in the United Kingdom, qualified investors who are persons (1) who have professional experience in matters relating to investments falling within Article 19(1) (Investment Professionals) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order"); (2) falling within Article 49(2)(a) to (d) (High net worth companies, unincorporated associations, etc.) of the Order; or (3) other persons to whom it may otherwise lawfully be communicated without being accompanied by any further statements and/or warnings required by the Order and not included in this Announcement (all such persons together being referred to as "Relevant Persons").

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

Panmure Gordon (UK) Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority (the "FCA"), is acting as Nominated Adviser and broker to the Company for the purposes of the AIM Rules for Companies and the AIM Rules for Nominated Advisers in connection with the Placing and is not acting for, and will not be responsible to, any person other than the Company for providing the protections afforded to customers of Panmure Gordon (UK) Limited or for advising any other person on any transaction or arrangement referred to in this Announcement.

This document may not be published, distributed, forwarded or transmitted directly or indirectly, in whole or in part, in or into the United States. These materials do not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States.

The Placing Shares described in this Announcement have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "US Securities Act"), or under the securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, transferred or delivered, directly or indirectly, within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. The Placing Shares are being offered only outside of the United States in reliance on Regulation S under the US Securities Act.

Furthermore, the Placing Shares have not been and will not be registered under the applicable laws of any of Canada, Australia, Japan or the Republic of South Africa or of any other jurisdiction where to do so would be unlawful and, consequently, may not be offered or sold to any national, resident or citizen thereof. The distribution of this document in or into jurisdictions other than the United Kingdom may be restricted by law and therefore any person who is subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, such restrictions. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction.

FORWARD-LOOKING STATEMENTS

This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. The Company cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "predict" or other words of similar meaning. Examples of forward-looking statements include, amongst others, statements regarding or which make assumptions in respect of the planned use of the proceeds of the Placing, the liquidity position of the Group, the future performance of the Group, future foreign exchange rates, interest rates and currency controls, the future political and fiscal regimes in the overseas markets in which the Group operates, the Group's future financial position, plans and objectives for future operations and any other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in interest rates and foreign exchange rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards ("IFRS") applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation or regulatory investigations, the success of future acquisitions and other strategic transactions and the impact of competition. A number of these factors are beyond the Company's control. As a result, the Company's actual future results may differ materially from the plans, goals, and expectations set forth in the Company's forward-looking statements. Any forward-looking statements made in this document by or on behalf of the Company speak only as of the date they are made. These forward-looking statements reflect the Company's judgement at the date of this document and are not intended to give any assurance as to future results. Except as required by the FCA, the London Stock Exchange, the 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 document 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 I

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION ON THE PLACING FOR PLACEES PROCURED BY PANMURE GORDON (UK) LIMITED.

THIS ANNOUNCEMENT, INCLUDING THE APPENDICES AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) COMES ARE REQUIRED BY THE COMPANY AND PANMURE GORDON TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN THIS APPENDIX ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: QUALIFIED INVESTORS WHO ARE PERSONS WHO: (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR THE SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF A SUBSCRIPTION FOR THE PLACING SHARES.

Persons who are invited to and who choose to participate in the Placing, by making an oral and legally binding offer to acquire Placing Shares will be deemed to have read and understood this Announcement in its entirety and to be making such offer to acquire Placing Shares on the terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings contained in this Appendix.

Unless otherwise stated, defined terms used in this Appendix have the meaning set out in Appendix II.

In this Appendix, unless the context otherwise requires, "Placee" means a Relevant Person (including individuals, funds or others) by whom or on whose behalf a commitment to take up Placing Shares has been given and who has been invited to participate in the Placing by Panmure Gordon.

Details of the Placing

Panmure Gordon and the Company have today entered into the Placing Agreement under which Panmure Gordon has agreed on behalf of and as agent for the Company to use its reasonable endeavours to procure persons who will (subject to the satisfaction or waiver of the conditions contained in the Placing Agreement) subscribe for the Placing Shares at the Placing Price.

Application will be made for the Placing Shares to be admitted to trading on AIM. The Placing Shares will be issued credited as fully paid and will on Admission rank in full for all dividends and other distributions declared, paid or made after Admission in respect of the Ordinary Shares and otherwise pari passu in all respects with the existing Ordinary Shares of the Company.

Application for admission to trading

Application will be made to the London Stock Exchange for admission of the Placing Shares to trading on AIM. It is expected that Admission will become effective and that dealings in the Placing Shares will commence on AIM at 8.00 a.m. on 3 March 2016.

Participation in, and principal terms of, the Placing

Panmure Gordon is arranging the Placing within the UK as agent for and on behalf of the Company. Panmure Gordon will determine in its absolute discretion the extent of each Placee's participation in the Placing, which will not necessarily be the same for each Placee. The Placing is not underwritten. The price of securities and income from them may go down as well as up and investors may not get back the full amount on disposal of the securities.

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

On the assumption that the conditions set out in the Placing Agreement are satisfied (or waived) and that the Placing Agreement does not lapse and is not terminated in accordance with its terms on or prior to 8.00 a.m. on 3 March 2016 (or such later date, being not later than 8.00 a.m. on 17 March 2016 (the "Long Stop Date"), as Panmure Gordon and the Company may agree in writing), each Placee will be required to pay to Panmure Gordon, on the Company's behalf, the Placing Price for each Placing Share agreed to be acquired by it under the Placing in accordance with the terms set out herein. Each Placee's obligation to acquire and pay for Placing Shares under the Placing will be owed to Panmure Gordon and the Company. Each Placee has an immediate, separate, irrevocable and binding obligation, owed to Panmure Gordon, to pay to it (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. Each Placee will be deemed to have read and understood this Announcement (including the Appendices) in its entirety; to be participating in the Placing upon the terms and conditions contained in the Appendices; and to be providing the confirmations, representations, warranties, agreements, acknowledgements and undertakings, in each case as contained in the Appendices. Save in the event of fraud on its part (and to the extent permitted by the rules of the FCA (the "FCA Rules")), neither (i) Panmure Gordon, (ii) any of its directors, officers, employees or consultants, nor (iii) to the extent not contained within (i) or (ii), any person connected with Panmure Gordon as defined in the FCA Rules ((i), (ii) and (iii) being together "affiliates" and individually an "affiliate"), shall have any liability to any Placee or to any person other than the Company in respect of the Placing and where any such liability nevertheless arises as a matter of law each Placee shall immediately waive any claim against any affiliate which it may have in respect thereof.

Conditions of the Placing

The Placing Agreement is conditional, inter alia, on:

If any of the conditions contained in the Placing Agreement are not satisfied (or waived) or have become incapable of being satisfied on or before 8.00 a.m. on 3 March 2016, or such later date as Panmure Gordon and the Company may agree in writing (but being not later than the Long Stop Date), the Placee's rights and obligations under the Placing shall cease and determine at such time and each Placee agrees that no claim can be made by the Placee in respect thereof. All obligations assumed by the Placee under the terms and conditions of the Placing are given to Panmure Gordon in its capacity as agent for the Company and are therefore directly enforceable by the Company.

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

Termination of the Placing Agreement

The Placing Agreement contains certain undertakings and warranties given by the Company for the benefit of Panmure Gordon and indemnities given by the Company relating to certain potential liabilities of Panmure Gordon. In addition, Panmure Gordon has certain rights to terminate the Placing Agreement at any time prior to Admission, inter alia, in the event of force majeure or a breach of warranty which is material in the context of the Placing. In the event that Panmure Gordon exercises these rights, all obligations and liabilities owed by the Placees will cease and Panmure Gordon will cause to be returned to the Placee, without interest, all monies received from the Placee at the Placee's risk.

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

No prospectus

No offering document, prospectus or admission document has been or will be submitted to or be approved by the FCA or submitted to the London Stock Exchange in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this Announcement (including the Appendices) released by the Company today, and subject to the further terms set forth in the contract note to be provided by Panmure Gordon to individual prospective Placees.

Each Placee, by participating in the Placing, agrees that the content of this Announcement (including the Appendices) is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information or representation concerning the Company, its subsidiaries, the Placing or Ordinary Shares. Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement. Neither the Company nor Panmure Gordon nor any of their respective officers, directors or employees 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.

Registration and settlement

Settlement of transactions in the Placing Shares following Admission will take place within the system administered by CREST, subject to certain exceptions. The Company reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if Panmure Gordon in its absolute discretion considers this to be necessary or desirable.

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

After such agreement is entered into, each Placee 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 "Contract Note").

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 Panmure Gordon. Settlement will be through Panmure Gordon against CREST participant account: 83801. For the avoidance of doubt, Placing allocations will be booked with a trade date of 12 February 2016 and settlement date of 3 March 2016.

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

Interest may be charged in respect of payments not received for value at that time.

Whilst Panmure Gordon does not believe there to be any liability to stamp duty or stamp duty reserve tax in respect of the Placing Shares, should any such stamp duty or stamp duty reserve tax be payable, it shall be entirely for the Placee's account and neither the Company nor Panmure Gordon will have any liability in respect thereof.

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

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations and warranties

By participating in the Placing each Placee (and any person acting on such Placee's behalf) acknowledges, undertakes, represents, warrants and agrees (as the case may be) with Panmure Gordon (for itself and on behalf of the Company) as follows:

1. it has read this Announcement, including the Appendices, in its entirety and acknowledges and agrees that its participation in the Placing will be governed by the terms set out in these Appendices;

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

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

4. that it is not relying on any information or representation or warranty in relation to the Company or any of its subsidiaries or any of the Placing Shares other than as contained in this Announcement (including the Appendices); and that neither the Company nor Panmure Gordon nor any of their respective officers, directors or employees will have any liability for any such other information or representation;

5. it has relied on its own investigation of the business, financial or other position of the Company in determining whether to participate in the Placing and neither Panmure Gordon nor the Company nor any of their affiliates nor any person acting on behalf of them has provided, and will not provide, any material regarding the Placing Shares or the Company other than this Announcement;

6. that neither it nor, as the case may be, its clients expect Panmure Gordon to have any duties or responsibilities to it similar or comparable to the duties of "best execution" and "suitability" imposed by the FCA's Conduct of Business Source Book, and that Panmure Gordon is not acting for it or its clients, and that Panmure Gordon will not be responsible for providing protections afforded to its clients or for providing advice in relation to the transactions described in this Announcement;

7. it is not a national or resident of the United States, Canada, Australia, the Republic of South Africa or Japan or a corporation, partnership or other entity organised under the laws of the United States, Japan, the Republic of South Africa, Canada or Australia or of any jurisdiction which would be unlawful and that it will not offer, sell, renounce, transfer or deliver directly or indirectly any of the Placing Shares in the United States, Japan, the Republic of South Africa, Canada, Australia or any jurisdiction where to do so would be unlawful or any person resident in the United States, Japan, the Republic of South Africa, Canada or Australia or in any jurisdiction where to do so would be unlawful and it acknowledges that the Placing Shares have not been and will not be registered under the US Securities Act and the relevant exemptions are not being obtained from the Securities Commission of any province of Canada and that the same are not being offered for sale and may not be, directly or indirectly, offered, sold, renounced, transferred or delivered in the United States, Japan, the Republic of South Africa, Canada or Australia or in any jurisdiction which to do would be unlawful unless pursuant to a relevant exemption;

8. it was not located in the United States at the time the buy order was originated and it represents that no directed selling efforts (as defined in Regulation S under the Securities Act) were made in connection with the Placing.

9. if required by applicable securities laws or as otherwise reasonably requested by the Company, the Placee will execute, deliver and file and otherwise assist the Company in filing reports, questionnaires, undertakings and other documents with respect to the issue of the Placing Shares;

10. it is entitled to subscribe for 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 governmental and other consents which may be required thereunder or otherwise and complied with all necessary formalities and that it has not taken any action which will or may result in the Company or Panmure Gordon or any of their respective directors, officers, employees or agents acting in breach of any regulatory or legal requirements of any territory in connection with the Placing or its acceptance of Placing Shares and that its commitment constitutes a valid and binding obligation on it;

11. it has obtained all necessary capacity, consents and authorities (regulatory or otherwise) to enable it to give its commitment to subscribe for the Placing Shares and to perform its subscription obligations;

12. it has such knowledge and experience in financial, business and tax matters as to be capable of evaluating the merits and risks of its investment in the Placing Shares and it is able to bear the economic risks and complete loss of such investment in the Placing Shares;

13. if it has received any confidential price sensitive information about the Company in advance of the Placing, it has not (i) dealt in the securities of the Company, (ii) encouraged or required another person to deal in the securities of the Company, or (iii) disclosed such information to any person, prior to the information being made publicly available;

14. it is acting as principal and for no other person and that its acceptance of New Shares will not give a contractual right to require the issue by the Company of any New Shares;

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

16. it is a Qualified Investor as defined in section 86(7) of FSMA and 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 19(5) or 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;

17. if in a Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"), the relevant Placee represents and warrants that:

(a) it is a legal entity which is authorised or regulated to operate in the financial markets or, if not so authorised or regulated, its corporate purpose is solely to invest in securities; or

(b) it is a legal entity which has two or more of:

(c) in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (a) the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than Qualified Investors (as defined in the Prospectus Directive) or in circumstances in which the prior consent of Panmure Gordon has been given to the offer or resale; or (b) where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons; or

(d) such securities are sold in any other circumstance which does not require the publication of a prospectus by the Company pursuant to Article 3 of the Prospectus Directive; or

(e) it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion, and that it (and any such account) is subscribing for the Placing Shares in an "offshore transaction" (within the meaning of Regulation S under the US Securities Act);

18. it is not, nor is it acting on behalf of, a person falling within subsections (6), (7) or (8) of sections 67 or 70 respectively or subsections (2) and (3) of section 93 or subsection (1) of section 96 of the Finance Act 1986;

19. that no instrument under which it acquires Placing Shares (whether as principal, agent or nominee) will be subject to stamp duty or stamp duty reserve tax at the increased rates referred to in sections 67 or 93 (Depository Receipts) or section 70 or 96 (Clearance Services) of the Finance Act 1986;

20. that it irrevocably appoints any director of Panmure Gordon as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares offered to it by Panmure Gordon;

21. that if it elects to receive its Placing Shares in uncertificated form, the CREST member account identified in the Contract Note returned by it is not marked;

22. to indemnify and hold the Company and Panmure Gordon harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach by it (or any person on whose behalf it is acting) of the representations, warranties, acknowledgements, agreements and undertakings contained in this appendix and further agrees that the provisions of this appendix shall survive after completion of the Placing;

23. that its obligations will be owed to the Company and Panmure Gordon and acknowledges that it has an immediate, separate, irrevocable and binding obligation, owed to Panmure Gordon, to pay to Panmure Gordon (or as it may direct) in cleared funds an amount equal to that shown in the Contract Note;

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

25. that the Company and Panmure Gordon will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to Panmure Gordon on its own behalf and on behalf of the Company and are irrevocable;

26. it is aware of, have complied with and will continue to comply with any obligations it has under the FCA's Money Laundering Rules, the Criminal Justice Act 1993, FSMA, the Terrorism Act 2000, the Anti-Terrorism Crime and Security Act 2001 and the Proceeds of Crime Act 2002 to the extent applicable to it and in respect of its subscription for Placing Shares: (i) it has complied fully with its obligations pursuant to the Money Laundering Regulations 2007; and (ii) it will provide Panmure Gordon on demand with any information it may require for the purposes of verification under the Money Laundering Regulations 2007;

27. that to ensure compliance with the FCA's Money Laundering Rules, the Terrorism Act 2000, the Anti-Terrorism Crime and Security Act 2001, the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007 (as applicable) Panmure Gordon may, in its absolute discretion, require verification of a Placee's identity to the extent that it has not already provided the same. Pending the provision to Panmure Gordon of evidence of identity, definitive certificates in respect of Placing Shares may be retained at its absolute discretion. If within a reasonable time after a request for verification of identity Panmure Gordon has not received evidence satisfactory to it, Panmure Gordon may, at its absolute discretion, terminate the proposed issue of Placing Shares to the Placee in which event the monies payable on acceptance of the allotment will, if paid, be returned without interest to the account of the drawee bank from which they were originally debited. No Placing Shares will be placed with a Placee if before Admission its acceptance of any Placing Shares is rejected pursuant to the Money Laundering Regulations 2007;

28. that it will not make any offer to the public of those Placing Shares to be subscribed by it for the purposes of the Prospectus Rules issued by the FCA with effect from 1 July 2005 pursuant to Commission Regulation (EC) No. 809/2004;

29. that it will not distribute any document relating to the Placing Shares and it will be acquiring the Placing Shares for its own account as principal or for a discretionary account or accounts (as to which it has the authority to give the statements set out herein) for investment purposes only;

30. that this Announcement does not constitute an offer to sell, or the solicitation of an offer to buy, Placing Shares in any jurisdiction in which such an offer or solicitation is unlawful. It acknowledges and agrees that the Placing Shares have not been and will not be registered or qualified for sale under the securities laws of the United States, Japan, the Republic of South Africa, Canada or Australia or any jurisdiction where to do so would be unlawful. Accordingly, the Placing Shares may not be offered or sold, directly or indirectly, within the United States and it represents, warrants and acknowledges to Panmure Gordon that it will only offer and sell the Placing Shares outside the United States in offshore transactions in accordance with Regulation S under the US Securities Act or within the United States pursuant to a valid registration statement or pursuant to an available exemption therefrom under the Securities Act. The Placing Shares may not be sold within or to persons who are nationals of or are resident in or who are corporations or other entities organised under the laws of Japan, the Republic of South Africa, Canada or Australia or any jurisdiction where to do so would be unlawful unless pursuant to a relevant exemption. Each Placee agrees not to distribute this Announcement in or into the United States, Japan, the Republic of South Africa, Canada or Australia or any jurisdiction where to do so would be unlawful.

31. if the investor is a natural person, such investor is not under the age of majority (18 years of age in the United Kingdom) on the date of such investor's agreement to subscribe for Placing Shares under the Placing and will not be any such person on the date any such Placing is accepted;

32. that information provided by it to the Company and the Company's registrars (the "Registrars") will be stored on the Company's and/or the Registrars computer system(s). It acknowledges and agrees that for the purposes of the Data Protection Act 1998 and other relevant data protection legislation which may be applicable (the "Data Protection Law"), the Company and the Registrars are required to specify the purposes for which they will hold personal data. The Company and the Registrars will only use such information for the purposes set out below (collectively, the "Purposes"), being to:

33. that it has obtained the consent of any data subjects to the Registrars and the Company and their respective associates holding and using their personal data for the Purposes (including the explicit consent of the data subjects for the processing of any sensitive personal data for the purpose set out in paragraph 32 above). For the purposes of this document, "data subject", "personal data" and "sensitive personal data" shall have the meanings attributed to them in the Data Protection Law.

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

The agreement to settle a Placee's acquisition of Placing Shares (and/or the acquisition by a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to an acquisition by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement related to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor Panmure Gordon will be responsible. If this is the case, each Placee should seek its own advice and notify Panmure Gordon.

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares.

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

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

APPENDIX II

DEFINITIONS

All references in this Announcement to "Sterling", "£", "pence" or "p" are to the lawful currency of the United Kingdom.