Loan note conversion / issue of equity

Insetco plc

("Insetco" or the "Company")

Loan note conversion, issue of equity and total voting rights

The Company announces that it has agreed to vary the terms of certain Convertible Unsecured Loan Notes ('Loan Notes') that are currently in issue. Following the variation of the terms the Loan Note holders have agreed to convert the Loan Notes into ordinary shares in the Company.

Details of the Loan Notes

Loan Notes have been issued to ADM Investor Services International Limited ("ADM") and Fairbairn Nominees (Jersey) Limited ("Fairbairn"), who hold the Loan Notes as nominee on behalf of underlying clients.

Details of the Loan Notes are set out in the table below:-

The terms of the Loan Notes provided for a conversion price of between 14.5 pence per share and 40 pence per share

Variation of the terms of the Loan Notes (the 'Transaction')

The Company has agreed to vary the terms of the Loan Notes issued to Fairbairn, amounting to £238,750 in aggregate, such that they will convert into ordinary shares in the Company at a price of 1.5 pence per share.

The Company has agreed to extend the redemption date of the remaining 31 July 2012 Loan Notes to 21 November 2012.

The board believes that it is in the best interests of shareholders and the Company to vary the terms of the Loan Notes as described above. In the event that agreement had not been reached with the Loan Note holders the Company would be required to issue new shares by way of a placing in order to finance the redemption of the Loan Notes.

Following the Transaction, the Company will have the following Loan Notes in issue:

Issue of Equity

Following the conversion described above the Company has issued 15,916,667 new ordinary shares in the Company. Application has been made to the London Stock Exchange for the 15,916,667 new ordinary shares to be admitted to trading on AIM which is expected to occur on or around 6 August 2012. The new ordinary shares will rank pari passu with the existing ordinary shares.

Related Party Transaction

Although holding shares as nominee for underlying beneficial holders, ADM is a substantial shareholder as defined in the AIM Rules for Companies. Accordingly, pursuant to AIM Rule 13, ADM is a related party. Having consulted with Cairn Financial Advisers LLP, the Company's nominated adviser, the directors of the Company, who are not involved in the Transaction, consider that the terms of the Transaction are fair and reasonable insofar as its shareholders are concerned.

Total Voting Rights

Following the issue of equity described above, the so enlarged issued share capital of the Company will comprise 180,399,763 ordinary shares of £0.00001 each. Each ordinary share carries the right to one vote at general meetings of the Company. The Company does not have any ordinary shares in treasury. This may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company under the FSA's Disclosure and Transparency Rules.