AGY Allergy Therapeutics Plc

TIDMAGY

RNS Number : 9192F

Allergy Therapeutics PLC

17 November 2015

Not for publication, distribution or release directly or indirectly, in whole or in part, in or into the United States, Canada, Australia, Japan or the Republic of South Africa or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.

17 November 2015

Allergy Therapeutics plc

("Allergy Therapeutics" or the "Company")

Proposed placing to raise up to GBP12 million

Allergy Therapeutics, the fully integrated specialty pharmaceutical company specialising in allergy vaccines, announces a placing of up to 41,005,500 new ordinary shares of 0.1 pence each in the capital of the Company ("New Shares"), representing approximately 7.5% of the Company's existing ordinary share capital, to raise up to GBP12 million.

Highlights

 
      --    Placing of up to 41,005,500 New Shares in the Company 
             ("Placing"), representing approximately 7.5% of the Company's 
             existing ordinary share capital, at a price of no less 
             than 28 pence per New Share ("Placing Price") to raise 
             up to approximately GBP12 million before expenses. 
      --    In the financial year ended 30 June 2015, the Company's 
             sales measured in constant currency grew by 11% over 
             the prior period. As announced today, sales have continued 
             to increase since the year-end, growing by 15%, including 
             sales from Alerpharma, acquired in June 2015, in the 
             first four months of the new financial year against the 
             same period in 2014. The Placing builds on the gathering 
             trading momentum and the proceeds will enable the Board 
             to capitalise on incremental organic and inorganic growth 
             opportunities for the Company and its subsidiaries (the 
             "Group"). 
      --    The Company will use the Placing proceeds to invest in 
             new product development with a view to achieving a step 
             change in the size of its total addressable markets, 
             strengthen its balance sheet and accelerate growth. 
 

The Placing is being conducted through an accelerated bookbuilding process (the "Bookbuild") which will be commenced immediately in accordance with the terms and conditions set out in Appendix I to this announcement.

Panmure Gordon (UK) Limited ("Panmure Gordon") is acting as Financial Adviser, Nominated Adviser and Corporate Broker in respect of the Placing.

Manuel Llobet, Chief Executive Officer, stated:

"We have seen an increase of our revenue growth rate during the first four months of the year despite flat markets. We believe that this continuing increased demand for our products highlights the strong profile of our portfolio and, in particular, our short course aluminium free allergy vaccines driving double digit revenue growth in our European markets. In light of this continuing momentum in our business, we are seeking to raise up to GBP12 million to accelerate execution of our growth strategy. The Placing proceeds will help us develop a presence in related areas such as food and perennial allergies such as house dust mite which, ultimately, will enable us to achieve a step-change in the size of the Group's total addressable market."

Background to the Placing

Allergy Therapeutics is a European-based, fully-integrated specialty biopharmaceutical company specialising in immunotherapies to treat allergies. The Group's key strategic objective is to create, via organic or inorganic expansion, a sustainable, fast-growing and profitable business through the development of innovative, patented and registered immunotherapies for both the treatment and prevention of allergy and intolerance-related conditions.

The Company has established itself as one of Europe's leading providers of allergy vaccines, in particular for the treatment of seasonal allergies such as allergic rhinitis using immunotherapies, potentially a $3 billion p.a. market. Independent research shows that this will be the fastest growing segment of the allergic rhinitis treatment market(1) .

Allergy Therapeutics' key products include Pollinex Quattro, a proprietary technology platform that the Group currently uses in its products that provide a proven and effective ultrashort subcutaneous immunotherapy treatment for grass, ragweed and tree allergy. Sales of Pollinex Quattro-branded products accounted for approximately 49% of the Group's revenues in the year ended 30 June 2015. Pollinex Quattro is, due to its convenience as an ultrashort course treatment, becoming increasingly viewed as a patient and doctor-friendly product and the Directors believe that this is a key differentiator against competitor products.

Building on the positioning of its product range and a gross sales CAGR of 9% since 1999, the Company has continued to strengthen its market position. The Company has increased its share of its European markets from 8.7% to 10.1% in the two year period ended 30 June 2015 and achieved constant currency sales growth of 11% in the year ended 30 June 2015 against a backdrop of flat markets. The Directors attribute this growth to the Group's portfolio of short-course aluminium-free vaccines and new product launches in particular, including probiotics and Acarovac Plus - a treatment for house dust mite allergies - which have both seen rapid commercial acceptance across the Group's prescriber base. As announced today, this growth rate has accelerated since the year-end, with a 12% increase in like-for-like sales measured in constant currency in the four months ended 31 October 2015 over the same period in 2014 (15% including the Alerpharma acquisition completed in June 2015) and further growth in market share.

In parallel with these positive trends in current trading, the Company continues with its programme to clinically develop Pollinex Quattro Grass ("PQG") through to FDA approval. Following approval, the launch of PQG in the US would enable the Group to sell PQG into a market for specific immunotherapy potentially worth $2billion p.a. and address the unmet needs of millions of moderate to severe allergic rhinitis sufferers. The Company's placing of new shares in March 2015 provided the additional funds required for the Group's US development plans for PQG and the product remains on track to be launched in the US in 2019.

The Group is also implementing its inorganic growth strategy, with the acquisition in June 2015 of Alerpharma, a manufacturer of immunotherapy and bacteriological vaccines and diagnostics that operates from a state-of-the-art 2,200 sq. m. facility in the Alcala de Henares Technological Park, Madrid. The integration of Alerpharma into Allergy Therapeutics' existing Spanish operations is progressing and will strengthen the Company's market position in Spain, creating one of the leading immunotherapy companies in the Group's second largest country market but one where it has a relatively low market share. The opportunities identified by the Directors to increase and cross-sell the product range and realise cost synergies following the acquisition are coming to fruition and the Group is now building further critical mass in the Spanish market.

Reasons for the Placing and Use of Proceeds

The Directors believe that Allergy Therapeutics now has the opportunity to capitalise on the additional momentum that has been generated across the business and accelerate the rate of growth in the Company's market share, particularly within Europe. As part of the Group's plans to accelerate growth, the Directors have identified a number of projects that seek to leverage further the Group's operating infrastructure and scientific know-how and replicate the success of the Company's short-course and ultra-short course immunotherapies in other related areas such as perennial and food allergies. These projects, which will open up new areas of immunotherapy treatment market and increase the Group's total addressable market five-fold to c.$15 billion, include:

-- using the newly-acquired Virus Like Particles (VLP) technology licence in the development of Polyvac Peanut, a new injectable vaccine immunotherapy treatment for allergy sufferers, through to Phase I clinical trials. As announced today, food allergy represent a significant and strategically important new area for the Group, with peanut allergy treatments alone being an $8 billion p.a. addressable market globally;

-- the in-house development of Acarovac Quattro, a treatment for perennial house dust mite allergy, through Phase I clinical trials and to launch in Spain on a named patient basis targeted for 2017. House dust mite is the world's most common cause of allergy and is estimated to affect over 90 million people in Europe, North America and Japan alone. With a $3-4 billion p.a. global addressable market, house dust mite represents another significant and strategically important area for the Group; and

-- various feasibility studies into areas such as immunomodulators and adjuvants, including the use of symbiotics in allergy response and MCT adjuvant systems with other vaccines for treating infection and illness.

(MORE TO FOLLOW) Dow Jones Newswires

November 17, 2015 02:01 ET (07:01 GMT)

The Directors are also seeking to capitalise on opportunities for further inorganic growth following the Alerpharma acquisition. The Directors have identified a number of areas for small accretive growth via the execution of product and company acquisitions and licensing agreements in allergy-related areas of the immunotherapy market such as immunomodulators, diagnostics, dermatology and respiratory disorders. With these projects in mind, Allergy Therapeutics is seeking to raise up to GBP12 million via the Placing, earmarked for investment by the Company in:

   --       the development and commercialisation of the new product opportunities outlined above; 
   --       the strengthening of the Group's balance sheet following the Alerpharma acquisition; and 

-- executing small accretive acquisitions, as referred to above, as well as intellectual property licensing opportunities.

In summary, the Directors believe that the Placing proceeds will enable the Company to capitalise on an opportunity to increase market share further and diversify into adjacent areas, thus achieving a step-change in the Company's total addressable market to approximately $15 billion.

Details of the Placing

The New Shares are to be issued by the Company pursuant to the Directors' existing authority to allot Ordinary Shares for cash on a non-pre-emptive basis approved by shareholders at the Company's annual general meeting held in 2014. The Placing will be effected by way of a bookbuilding process to be managed by Panmure Gordon and will be conducted in accordance with the terms and conditions set out in the Appendix. The Bookbuild will commence with immediate effect and the book is expected to close no later than 4.30 p.m. on 17 November 2015, but Panmure Gordon reserves the right to close the book earlier, without further notice.

The timing of the closing of the book and allocations is at the absolute discretion of Panmure Gordon. The Placing will be limited to the subscription of up to 41,005,500 New Shares, representing approximately 7.5 per cent. of the Company's existing ordinary share capital at the Placing Price. The number of New Shares and the Placing Price will be agreed by the Company with Panmure Gordon at the close of the Bookbuild. Details of the number of New Shares and the Placing Price will be announced as soon as practicable after the close of the Bookbuild.

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

The Placing is conditional upon, inter alia, admission of the New Shares to trading on AIM becoming effective ("Admission") and the placing agreement between the Company and Panmure Gordon not being terminated prior to Admission.

Application will be made to the London Stock Exchange for the New Shares to be admitted to trading on AIM and it is expected that Admission will become effective and that dealings in the New Shares will commence at 8.00 a.m. on or around 20 November 2015.

General Disapplication of Pre-Emption Rights

The New Shares will be allotted and issued pursuant to the general authorities given to the Directors to allot equity securities in the Company on a non-pre-emptive basis at the last Annual General Meeting of the Company held on 19 November 2014.

This year's Annual General Meeting is due to take place tomorrow, 18 November 2015, at which resolutions will be proposed to renew the Directors' general authority to allot equity securities and to disapply statutory pre-emption rights. The special resolution proposed for the disapplication of pre-emption rights would, if passed, authorise the Directors to allot up to 54,584,792 Ordinary Shares, being 10 per cent of the Company's issued share capital as at the date of this Announcement (i.e., before the issue of the New Shares). Following consultation with the Company's shareholders, the Directors have concluded that they will undertake that:

-- they will utilise no more than half of this authority, limiting the Company to allotting up to 27,292,396 Ordinary Shares on a non-pre-emptive basis, representing 5 per cent of the Company's issued share capital as at today's date;

-- they will not issue such Ordinary Shares at a discount of more than 5 per cent including expenses; and

-- from 18 November 2015, they will not issue equity securities that represent more than 7.5 per cent of the Company's issued share capital on a non-pre-emptive basis in any rolling three-year period.

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 New 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.

References

(1) Visiongain 2014 AR Market Evolution Report

For further information, please contact:

 
 Allergy Therapeutics                   +44 (0) 1903 845 820 
 Manuel Llobet, Chief Executive 
  Officer 
 Ian Postlethwaite, Finance Director 
 
 Panmure Gordon                         +44 (0) 207 886 2500 
 Freddy Crossley / Peter Steel 
  / Duncan Monteith, Corporate 
  Finance 
 Tom Salvesen, Corporate Broking 
 
 FTI Consulting                         +44 (0) 203 727 1000 
 Simon Conway / Victoria Foster 
  Mitchell 
 

www.allergytherapeutics.com

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 New 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 New 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 New Shares are being offered only outside of the United States in reliance on Regulation S under the US Securities Act.

(MORE TO FOLLOW) Dow Jones Newswires

November 17, 2015 02:01 ET (07:01 GMT)

Furthermore, the New 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 FSA, 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 ONLY.

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 NEW SHARES.

Persons who are invited to and who choose to participate in the Placing, by making an oral and legally binding offer to acquire New Shares will be deemed to have read and understood this Announcement in its entirety and to be making such offer to acquire New 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 at the end of this Appendix.

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 New 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 New Shares at the Placing Price.

Application will be made for the New Shares to be admitted to trading on AIM. The New 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.

Lock up

As part of the Placing, the Company has agreed that it will not issue or sell any Ordinary Shares for a period of 60 days after Admission without the prior written consent of Panmure Gordon. That agreement is subject to the customary exception of granting options under, and allotting and issuing Ordinary Shares in the ordinary course pursuant to the Company's existing share schemes.

Application for admission to trading

Application will be made to the London Stock Exchange for admission of the New Shares to trading on AIM. It is expected that Admission will become effective and that dealings in the New Shares will commence on AIM at 8.00 a.m. on 20 November 2015.

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.

(MORE TO FOLLOW) Dow Jones Newswires

November 17, 2015 02:01 ET (07:01 GMT)

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 20 November 2015 (or such later date, being not later than 8.00 a.m. on 10 December 2015 (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 New 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 New Shares that such Placee has agreed to subscribe. Each Placee will be deemed to have read and understood the Appendices in their 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 will be conditional, inter alia, on:

 
       (i)               admission of the New Shares to trading on AIM 
                          having become effective in accordance with the 
                          AIM Rules by no later than 8.00 a.m. on 20 November 
                          2015 (or by such later date as Panmure Gordon 
                          and the Company may agree, being no later than 
                          the Long Stop Date); 
      (ii)    the Company having complied with its obligations 
               under the Placing Agreement to the extent that 
               the same fall to be performed prior to Admission; 
               and 
      (iii)   the satisfaction or, where capable of waiver, 
               the waiver of certain other conditions set out 
               in the Placing Agreement. 
 

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 20 November 2015 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 New 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 New 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 New 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 New Shares under the Placing will be agreed orally with Panmure Gordon. Such oral agreement will constitute a legally binding commitment on such Placee's part to acquire that number of New 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 New Shares in the Placing will be sent a contract note stating the number of New 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 17 November 2015 and settlement date of 20 November 2015.

The Company will instruct its registrar to deliver the New 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 New 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 New 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 New 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 New Shares on such Placee's behalf.

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If New 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 New 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 New 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 New 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 New 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 New 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 New 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 New Shares;

10. it is entitled to subscribe for the New 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 New 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 New 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 New Shares and it is able to bear the economic risks and complete loss of such investment in the New 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:

 
      (i)     an average of at least 250 employees during 
               the last financial year; 
      (ii)    a total balance sheet of more than EUR 43,000,000; 
               and/or 
      (iii)   an annual turnover of more than EUR 50,000,000, 
               as shown in its last annual or consolidated 
               accounts; or 
 

(c) in the case of any New Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (a) the New 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 New 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 New 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 New Shares for its own account or is acquiring the New Shares for an account with respect to which it exercises sole investment discretion, and that it (and any such account) is subscribing for the New 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 New 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;

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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 New Shares offered to it by Panmure Gordon;

21. that if it elects to receive its New 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 New 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 Placees' 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 New 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 New 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 New Shares will be placed with a Placee if before Admission its acceptance of any New Shares is rejected pursuant to the Money Laundering Regulations 2007;

28. that it will not make any offer to the public of those New 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 New Shares and it will be acquiring the New 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, New Shares in any jurisdiction in which such an offer or solicitation is unlawful. It acknowledges and agrees that the New 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 New 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 New 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 New 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 New 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:

 
              (i)     process its personal data (including sensitive personal 
                       data) as required by or in connection with its holding 
                       of Ordinary Shares, including processing personal 
                       data in connection with credit and money laundering 
                       checks on it; 
              (ii)    communicate with it as necessary in connection with 
                       its affairs and generally in connection with its 
                       holding of Ordinary Shares; 
              (iii)   provide personal data to such third parties as the 
                       Company or the Registrars may consider necessary 
                       in connection with its affairs and generally in connection 
                       with its holding of Ordinary Shares or as the Data 
                       Protection Law may require, including to third parties 
                       outside the United Kingdom or the European Economic 
                       Area; 
              (iv)    without limitation, provide such personal data to 
                       the Company or Panmure Gordon for processing, notwithstanding 
                       that any such party may be outside the United Kingdom 
                       or the EEA States; and 
              (v)     process its personal data for the Company's or Registrars' 
                       internal administration. 
 

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 New 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 New Shares in question. Such agreement assumes that the New Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the New Shares into a clearance service. If there are any such arrangements, or the settlement related to any other dealing in the New 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 New Shares or the agreement by them to acquire any New Shares.

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