FOR IMMEDIATE RELEASE.

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

THIS ANNOUNCEMENT IS MADE FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR SOLICITATION TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE SHARES IN ALLERGY THERAPEUTICS PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

THE SECURITIES DISCUSSED HEREIN MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, UNLESS REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT. NO PUBLIC OFFERING OF THE SECURITIES DISCUSSED HEREIN IS BEING MADE IN THE UNITED STATES AND THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFERING OF SECURITIES FOR SALE IN THE UNITED STATES AND THE COMPANY DOES NOT CURRENTLY INTEND TO REGISTER ANY SECURITIES UNDER THE SECURITIES ACT. ADDITIONALLY, THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER SECURITIES COMMISSION OR REGULATORY AUTHORITY IN THE UNITED STATES, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE EQUITY FINANCING. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014 AS IT FORMS PART OF UNITED KINGDOM DOMESTIC LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED ("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THE INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN FOR THE PURPOSES OF MAR.

Allergy Therapeutics plc

("Allergy Therapeutics" or the "Company")

£40.75 million Facility with associated Equity Financing

Key Highlights

·      £40.75 million Facility provided by ZQ Capital and Southern Fox.

·     The Facility will be partly used to refinance the existing £10 million loan notes issued to ZQ Capital and Southern Fox on 28 February 2023.

·   The Facility will also provide immediate funds to address the Company's near-term requirement for significant additional funding to enable the Company to continue its pivotal Phase III G306 trial for Grass MATA MPL and other key clinical trials including the Phase I study for Peanut allergy.

·      Equity Financing at an issue price of 1 pence per share comprised of the Subscription by ZQ Capital and Southern Fox and the Open Offer expected to be made to all qualifying shareholders (and underwritten by ZQ Capital), to raise gross proceeds of £40.75 million.

·      Equity Financing is conditional upon, inter alia, shareholder approval and FDI clearances.

·    Proceeds of the Equity Financing will be used to repay the principal amounts outstanding and accrued interest thereon under the Facility Agreement.

·    Substantial finance premium payable by the Company (associated with the Facility) in the event that Equity Conditions are not met and the Group's pivotal Phase III G306 trial for Grass MATA MPL is successful.

·      Circular convening the General Meeting to be published shortly.

·    Board unanimously recommends that shareholders vote in favour of the Resolutions at the General Meeting.

·     Publication of the 2022 Accounts, as well as the unaudited interim accounts for the six-month period ended 31 December 2022, by 30 June 2023, will facilitate restoration of trading in the Company's shares on AIM.

·    Pursuant to the Takeover Code, completion of the Equity Financing will trigger a mandatory offer to be made by ZQ Capital for the entire issued and to be issued share capital of the Company that it does not already own at 1 pence per Ordinary Share.

6 April 2023 Allergy Therapeutics plc (AIM: AGY), the fully integrated commercial biotechnology group specialising in allergy vaccines, announces that, further to the Company's business and trading update today, the Company has entered into a senior secured facility agreement (the "Facility Agreement") pursuant to which the Company's existing substantial shareholders ZQ Capital Management Limited ("ZQ Capital") (acting through its affiliate SkyGem International Holdings Limited ("SkyGem International")) and Southern Fox Investments Limited ("Southern Fox" and together with ZQ Capital, as the "Lenders"), have agreed to make available to the Company a secured term loan facility in an aggregate principal amount of £40.75 million (the "Facility"). The Facility will be used to refinance the existing £10 million loan notes issued to the Lenders on 28 February 2023, to facilitate the continuation of the Group's pivotal Phase III G306 trial for Grass MATA MPL (the "G306 Trial"), to continue other key clinical trial activities including the Phase I study for Peanut allergy and to finance trading and provide working capital.

In conjunction with the Facility Agreement, the Company has also entered into an equity commitment agreement with ZQ Capital (acting through its affiliate SkyGem Acquisition Limited ("SkyGem Acquisition") and Southern Fox (together, the "Investors") (the "Equity Commitment Agreement"), pursuant to which ZQ Capital and Southern Fox have each agreed conditionally to subscribe for new ordinary shares of 0.1 pence each in the capital of the Company ("Ordinary Shares") (the "New Shares") at an issue price of 1 pence per New Share (the "Issue Price") to raise gross proceeds of £40.75 million (the "Equity Financing").

The Equity Financing is comprised of (i) a direct subscription by each of ZQ Capital and Southern Fox for, in aggregate, 3,385,510,000 New Shares (subject to adjustment) (the "Subscription Shares") at the Issue Price (the "Subscription") and (ii) an open offer, pursuant to which qualifying shareholders (which will exclude the three largest shareholders ZQ Capital, Southern and Abbott Laboratories, and any shareholders in a restricted jurisdiction) will be offered the opportunity to subscribe for up to 689,490,000 New Shares (subject to adjustment) (the "Open Offer Shares") at the Issue Price pursuant only to their pro rata entitlements at the Record Date (the "Open Offer").

The number of Open Offer Shares to be made available to qualifying shareholders in the Open Offer will be reduced, if required, to ensure that the aggregate gross proceeds of the Open Offer do not exceed €8.0 million as at the date the Open Offer is launched, calculated by reference to the number of Open Offer Shares at the Issue Price at the prevailing foreign exchange rate on the last practicable date prior to announcement of the Open Offer, so as to avoid the requirement to publish a prospectus. In the event that the number of Open Offer Shares is reduced in this manner, the number of Subscription Shares subscribed by ZQ Capital may be increased by an equivalent number such that the total number of New Shares to be issued by the Company pursuant to the Equity Financing equals not less than 4,075,000,000 New Shares to raise gross proceeds of £40.75 million.

ZQ Capital has agreed to underwrite the Open Offer by subscribing at the Issue Price for any Open Offer Shares not taken up by qualifying shareholders under the Open Offer. Southern Fox will not be underwriting the Open Offer. The quantum and terms of the Open Offer, which as noted above excludes the Company's three largest shareholders, are expected to allow other qualifying shareholders to maintain their existing percentage holdings if they subscribe for their pro rata entitlements at the Issue Price. Any shareholders who do not participate in the Open Offer will be very significantly diluted as a consequence of the Equity Financing.

The proceeds of the Equity Financing will be principally used to repay the amounts owed pursuant to the terms of the Facility Agreement (including principal amounts and accrued interest).

The Equity Financing is conditional on satisfaction (or waiver, if capable of being waived) of the Equity Conditions, which include, inter alia, (a) certain foreign direct investment ("FDI") regulatory approvals and (b) shareholder approval authorising the Directors to allot Ordinary Shares pursuant to the Equity Financing and the dis-application of statutory pre-emption rights in connection therewith, by the earlier of (i) 6 January 2024 (being the date falling nine (9) months from the date of this Announcement) and (ii) the date of G306 Trial Failure, or such later date as the Company and the Investors may agree in writing prior to the earlier of (i) or (ii) (the "Long Stop Date"). A general meeting of the Company is proposed to be held at the offices of Covington & Burling LLP, 22 Bishopsgate, London EC2N 4BQ at 12 noon on 27 April 2023 (the "General Meeting"). The General Meeting will be convened by way of a notice of general meeting contained in a circular to be published to shareholders of the Company shortly after the date of this announcement.

Under the terms of a contingent payment letter entered into between the Company and the Lenders in connection with the Facility Agreement ("G306 Contingent Payment Letter"), the Company will be obligated to pay a substantial finance premium equal to 250 per cent. of the principal amount of the loan outstanding under the Facility (the "G306 Contingent Payment") to the Lenders on a successful data read-out (the "G306 Read-Out") if at such time any principal remains outstanding under the terms of the Facility Agreement. The Company therefore intends, subject to satisfaction (or waiver, if capable of being waived) of the Equity Conditions, to complete the Equity Financing and repay all amounts outstanding under the Facility Agreement within nine months of the date of this announcement, thereby avoiding the G306 Contingent Payment being triggered. Please refer to the paragraph headed 'Facility and G306 Contingent Payment' below for further information on the G306 Contingent Payment.

The Company continues to explore initiatives for additional funding to further extend the Company's cash runway and expects the Facility and subsequent Equity Financing to provide on-going working capital for the Group into H2 2023.

Further details of the financing arrangements are set out below. The Facility (including the G306 Contingent Payment) and the Equity Financing are together the "Financing".

If the Resolutions are not passed at the General Meeting, the Company will, instead of the Equity Financing, undertake a fully pre-emptive open offer at the Issue Price in accordance with statutory pre-emption rights to raise gross proceeds of at least £40.75 million (the "Pre-emptive Open Offer"). In comparison to the Equity Financing, the Pre-emptive Open Offer would take longer to complete and result in higher costs for the Company as it will be necessary to publish a prospectus and additional interest on the Facility that will accrue during this time. As explained in further detail below, the G306 Contingent Payment will not be payable in the event that the Company launches the Pre-Emptive Open Offer by the Long Stop Date.

If the Resolutions are not passed at the General Meeting and the Company is unable to secure an alternative funding solution to repay the amounts due under the Facility, the Company may be subject to, inter alia, possible insolvency and loss of ownership of its assets, over which security has been granted pursuant to the Facility. Should the Equity Financing not proceed, it is unlikely that the Company will be able to pay the G306 Contingent Payment should it crystallise. Accordingly, the Board strongly recommends that shareholders vote in favour of the Resolutions at the General Meeting.

Background to and reasons for the Financing

On 4 October 2022, the Company announced a pause in production at its Freeman facility, part of its Worthing, UK manufacturing site. This followed an internal review of its current operating processes to improve the robustness of its quality systems and build capacity across its manufacturing facilities. As a result of the manufacturing pause occurring during a period of peak production prior to the start of the pollen season, as previously reported, the Company announced that its revenue for the year ended 30 June 2023 is expected to be significantly below previous market expectations. This has led to a need for significant additional near-term funding for the Company. Shareholders should refer to the 'Trading and Business Update' announcement published today for a more detailed update on results and current trading.

The Board has undertaken a thorough review of the Group's business and carefully considered the potential funding options and other strategic alternatives that are available to the Company. The Board believes that the Group's portfolio of products and clinical pipeline remains highly valuable and that accordingly, it is in the best interests of the Company and its shareholders to continue to finance these until at least the G306 Read-Out, representing the next value inflexion point for the business. The Financing is the only realistic source of significant near-term funding that the Board has been able to identify through this process.

The Company expects the Facility and subsequent Equity Financing to provide on-going working capital for the Group into H2 2023. The Company anticipates a successful G306 Trial and regulatory approval to allow for the continued sale of the Group's existing products pursuant to the ongoing TAV process. The Financing also provides immediate financing certainty which the Company expects to allow the Directors to apply the going concern principle in finalising and publishing the annual report and accounts for the year ended 30 June 2022 (the "2022 Accounts"). Publication of the 2022 Accounts, as well as the unaudited interim accounts for the six-month period ended 31 December 2022, by 30 June 2023, will facilitate restoration of trading in the Company's shares on AIM. As noted in the business and trading announcement also released today, the Directors anticipate that the 2022 Accounts will contain a material uncertainty in view of the need for additional near-term funding over and above the Financing and an audit report qualification for limitation of scope in respect of the carrying value of insurance policy assets related to the pension scheme of the Group's German subsidiary, Bencard Allergy GmbH.

The Directors do not believe that the Facility and G306 Contingent Payment provide a suitable long term solution for the Company's financing requirements. The Company is therefore proceeding with the Equity Financing so that the proceeds of the Equity Financing can be used to repay the Facility as soon as the Equity Conditions are satisfied and the Equity Financing is completed. Dependent on trading and the timing of the Equity Financing and the quantum of interest accrued on the Facility, the Company expects that additional financing for the Group will be required in H2 2023. The Company continues to evaluate opportunities for cost control measures and non-dilutive funding.

Facility and G306 Contingent Payment

Facility Agreement

Pursuant to the terms of the Facility Agreement, the Lenders have, subject to certain conditions and covenants, agreed to provide a facility to the Company of £40.75 million with a maturity date of 31 December 2025. Amounts borrowed under the Facility Agreement will accrue interest at the rate of 18 per cent. per annum. The Facility (and interest accrued thereon) is subject to mandatory redemption and cancellation of availability in the event of termination or G306 Trial Success (as defined below) has not occurred prior to 15 November 2024, as well as for typical mandatory repayment events such as a change of control, sale of substantially all assets of the Group or following the occurrence of an event of default that is accelerated. The Facility Agreement is subject to Loan Market Association-style terms and includes various representations, covenants, financial covenants and events of default binding upon the Group. The Facility is subject to a 2.75 per cent. upfront underwriting fee and a 0.75 per cent. per annum commitment fee on undrawn commitments.

The Facility will be fully secured against substantially all assets of the Company and its subsidiaries incorporated in England and Wales by way of an English-law governed debenture. If the Company wishes to drawdown amounts under the Facility that are in aggregate greater than £16,000,000 in principal then, (i) on or before such drawdown, the Company must also procure that its subsidiaries in Germany and the Netherlands also provide equivalent security over substantially all of their assets; and (ii) within 30 days following such drawdown of over £16,000,000, the Company must procure that its subsidiary in Spain also provides equivalent security over substantially all of its assets. The Lenders have the ability to require that additional security is provided by other entities in the Group, subject to certain security principles.

G306 Contingent Payment

The Company has also entered into the G306 Contingent Payment Letter with the Lenders pursuant to which a substantial finance premium equal to 250 per cent. of the principal amount of the loan outstanding under the Facility will crystallise and become payable to the Lenders in the event that there is a successful G306 Read-Out. The Company is however permitted to repay all amounts outstanding under the Facility Agreement without penalty using the proceeds of the Equity Financing, and the G306 Contingent Payment will not be payable if the Equity Financing has been completed and all principal amounts under the Facility Agreement have been repaid by the Long Stop Date, notwithstanding a successful G306 Read-Out prior to this time. Completion of the Equity Financing is subject to the satisfaction (or waiver, if capable of being waived) of the Equity Conditions.

In the event that the Resolutions are not passed at the General Meeting the Equity Conditions will not be satisfied and the Equity Financing will not proceed. In these circumstances, the G306 Contingent Payment will not be payable provided that prior to the Long Stop Date the Company launches the Pre-emptive Open Offer at the Issue Price in accordance with statutory pre-emption rights to raise gross proceeds of at least £40.75 million on terms which provide that the Lenders shall be offered the right to subscribe for shares in excess of their pro rata entitlements to the extent that valid applications have not been made for all shares offered pursuant to such offer, and otherwise on such terms as may be agreed between the Company and the Lenders.

If triggered, the G306 Contingent Payment would not be payable until the maturity date of 31 December 2025 (unless the Facility were to be accelerated pursuant to the terms of the Facility Agreement following an event of default thereunder, whereupon the G306 Contingent Payment would also be accelerated).

The Company does not have the resources to repay the Facility or to pay the G306 Contingent Payment in the event that it becomes payable and therefore may face potential insolvency if alternative funding cannot be secured in the future. Shareholders are therefore urged to vote in favour of the Resolutions at the General Meeting to enable the Equity Financing to proceed (subject to satisfaction (or waiver, if capable of being waived) of the other Equity Conditions) so that amounts outstanding under the Facility Agreement can be repaid prior to the G306 Contingent Payment becoming payable.

Equity Financing

The Equity Financing comprises:

·      the Subscription for 2,228,004,131 Subscription Shares by ZQ Capital and 1,157,505,869 Subscription Shares by Southern Fox at the Issue Price of 1 pence per new Ordinary Share; and

·      the Open Offer proposed to be undertaken by the Company in due course pursuant to which qualifying shareholders will be offered the opportunity to subscribe for up to 689,490,000 Open Offer Shares at the Issue Price of 1 pence per new Ordinary Share pursuant only to their pro rata entitlements at the Record Date.

ZQ Capital has agreed to underwrite the Open Offer by subscribing at the Issue Price for any Open Offer Shares not taken up by qualifying shareholders under the Open Offer.

It is expected that qualifying shareholders to the Open Offer will include all existing shareholders (other than Abbott Laboratories, Southern Fox and ZQ Capital, and any shareholders in a restricted jurisdiction).

The number of Open Offer Shares to be made available to qualifying shareholders in the Open Offer will be reduced, if required, to ensure that the aggregate gross proceeds of the Open Offer do not exceed €8.0 million as at the date the Open Offer is launched, calculated by reference to the number of Open Offer Shares at the Issue Price at the prevailing foreign exchange rate on the last practicable date prior to announcement of the Open Offer, so as to avoid the requirement to publish a prospectus. In the event that the number of Open Offer Shares is reduced in this manner, the number of Subscription Shares subscribed by ZQ Capital may be increased by an equivalent number such that the total number of New Shares to be issued by the Company pursuant to the Equity Financing equals not less than 4,075,000,000 New Shares to raise gross proceeds of £40.75 million.

The Issue Price relating to the Equity Financing has been determined having regard to the Company's immediate financing and capital requirements and the Equity Financing being deemed to be the only viable route to provide near-term finance to refinance the Facility given the Company's structure and on-going funding requirements. The Issue Price of 1 pence represents a discount of 84 per cent. to the closing price of 6.25 pence per Ordinary Share on 30 December 2022 being the day prior to the day the Company's shares were suspended from trading on AIM.

The Equity Financing is expected to raise gross proceeds of £40.75 million. The net proceeds of the Equity Financing will be principally used to repay the principal amounts outstanding and accrued interest under the Facility Agreement.

Equity Conditions

The Equity Financing is conditional on a number of conditions in the Equity Commitment Agreement (the "Equity Conditions"), which include:

(a)  the passing by shareholders of (i) an ordinary resolution (which requires a majority of the votes cast by those entitled to vote) to authorise the Directors to allot new Ordinary Shares pursuant to the Subscription and Open Offer and (ii) a special resolution (which requires not less than 75 per cent. of the votes cast by those entitled to vote) to disapply the statutory pre-emption rights in connection with the Subscription and the Open Offer (the "Resolutions");

(b)  receipt by ZQ Capital, on terms reasonably satisfactory to ZQ Capital, of certain foreign direct investment/national security clearances in Austria, Italy, Germany and Spain (the "ZQ FDI Clearance Condition");

(c)  receipt by Southern Fox, on terms reasonably satisfactory to Southern Fox, of certain foreign direct investment/national security clearances in Austria, Italy and Germany (the "SF FDI Clearance Condition" and together with the ZQ FDI Clearance Condition the "FDI Clearance Conditions");

(d)  in the opinion of each of the Investors, no events or facts having occurred or conditions or circumstances having arisen which are reasonably likely to result in:

(i)   any event or circumstance occurs that results in (i) a factory shutdown or loss of production capacity of more than 50 per cent. of historic annual production of any product that comprises 10 per cent. or more of the consolidated revenue of the Group (calculated by reference to the most recently available annual financial statements), provided that any factory shutdown or loss of production capacity during any planned factory shutdowns (including for planned maintenance, upgrades or due to regulatory requirements (including inspections)) shall not be included in such calculation; or (ii) a factory shutdown (whether partial or total) which results or is likely to result in (in the reasonable opinion of the Investors) the consolidated revenue of the Group for each twelve-month period ending on each quarter date to fall below £50,000,000; or

(ii)   G306 Trial Failure; and

(e)  admission of the Subscription Shares and Open Offer Shares to trading on AIM ("Admission").

The Equity Conditions (save for (d)) cannot be waived by the Investors.

The timing for the satisfaction of the FDI Clearance Conditions by the Investors is currently highly uncertain. FDI submissions by the Investors will be made shortly after this announcement. It is possible that clearances may not be received for several months or at all. If the ZQ FDI Clearance Condition is satisfied, but the SF FDI Clearance Condition is not satisfied, ZQ Capital shall have the option (but not the obligation) to assume the obligations of Southern Fox (subject to Southern Fox's consent) and vice versa, such that if the SF FDI Clearance Condition is satisfied, but the ZQ FDI Clearance Condition is not satisfied, Southern Fox shall have the option (but not the obligation) to assume the obligations of ZQ Capital (subject to ZQ Capital's consent).

Additionally, pursuant to the terms of the Equity Commitment Agreement, each Investor may, in its absolute discretion, at any time before Admission terminate the Equity Commitment Agreement if:

(a)  an Equity Condition has not been satisfied; or

(b)  the application for Admission has been withdrawn or rejected.

Subscription

Pursuant to the terms of the Equity Commitment Agreement, the Investors have each agreed conditionally to subscribe for, in aggregate, 3,385,510,000 Subscription Shares at an Issue Price of 1 pence per Ordinary Share.

The number of Subscription Shares to be issued to ZQ Capital may be adjusted in the event that the number of Open Offer Shares is reduced to account for fluctuations in the foreign exchange rate, such that the number of Subscription Shares subscribed by ZQ Capital may be increased by an equivalent number such that the total number of New Shares to be issued by the Company pursuant to the Equity Financing equals not less than 4,075,000,000 New Shares to raise gross proceeds of £40.75 million.

The Subscription Shares, will, when allotted, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on or after the date on which they are issued.

Open Offer

Pursuant to the terms of the Equity Commitment Agreement, the Company has agreed to undertake the Open Offer in due course, pursuant to which qualifying shareholders will be offered the opportunity to subscribe for up to 689,490,000 Open Offer Shares at the Issue Price of 1 pence per new Ordinary Share pursuant only to their pro rata entitlements at the Record Date. The number of Open Offer Shares to be made available to qualifying shareholders in the Open Offer will be reduced, if required, to ensure that the aggregate gross proceeds of the Open Offer do not exceed €8.0 million as at the date the Open Offer is launched, calculated by reference to the number of Open Offer Shares at the Issue Price at the prevailing foreign exchange rate on the last practicable date prior to announcement of the Open Offer, so as to avoid the requirement to publish a prospectus. In the event that the number of Open Offer Shares is reduced in this manner, the number of Subscription Shares subscribed by ZQ Capital may be increased by an equivalent number such that the total number of New Shares to be issued by the Company pursuant to the Equity Financing equals not less than 4,075,000,000 New Shares to raise gross proceeds of £40.75 million.

The Company expects that qualifying shareholders to the Open Offer will include all existing shareholders (other than Abbot Laboratories, Southern Fox and ZQ Capital, and any shareholders in a restricted jurisdiction).

The Company expects to publish a further shareholder circular setting out the terms and conditions of the Open Offer in due course following the satisfaction of the FDI Clearance Conditions.

The Open Offer Shares, will, when allotted, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on or after the date on which they are issued.

Subject to the Equity Financing proceeding, any shareholders who do not participate in the Open Offer will be very significantly diluted as a consequence of the Equity Financing.

If the Equity Commitment Agreement is terminated in accordance with its terms, the Company has undertaken to withdraw the Open Offer.

Admission

Application will be made to London Stock Exchange plc (the "London Stock Exchange") for the Subscription Shares and Open Offer Shares to be admitted to trading on AIM, subject to the ongoing admittance of the Company's Ordinary Shares to trading on AIM.

If trading in the Company's Ordinary Shares on AIM is cancelled and if the Equity Condition relating to Admission is not satisfied, then the Company and the Investors will in good faith agree alternative arrangements for the Open Offer and settlement of the New Shares based on issue of the New Shares in certificated form against receipt of payment prior to the Long Stop Date (or such other time and/or date as may be agreed between the Company and the Investors).

Rule 9 Mandatory Offer

The Equity Financing gives rise to certain considerations under the Takeover Code.

The Equity Financing constitutes a pre-condition to the mandatory cash offer that ZQ Capital will be required to make to all other Shareholders to acquire the entire issued and to be issued share capital of the Company it does not already own (including any New Shares issued pursuant to the Equity Financing) if the Equity Conditions are satisfied and the Equity Financing completes.

The Takeover Code applies to Allergy Therapeutics. Under Rule 9 of the Takeover Code, any person who acquires, whether by a series of transactions over a period of time or not, an interest in shares (as defined in the Takeover Code) which when taken together with shares already held by them or held or acquired by persons acting in concert with them, carry 30 per cent. or more of the voting rights of a company which is subject to the Takeover Code is normally required to make an offer to all the remaining shareholders to acquire their shares.

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

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

If the Equity Conditions are satisfied (or, if applicable, waived) and the Equity Financing completes, then the allotment and issue of the Subscription Shares and Open Offer Shares (if any) to ZQ Capital will result in an increase to the percentage of the voting rights which ZQ Capital controls. ZQ Capital (taking into account holdings of SkyGem Acquisition, ZQ Capital Limited and Zheqing (Simon) Shen) will control voting rights over Ordinary Shares representing more than 30 per cent. of the enlarged share capital following completion of the Equity Financing. Accordingly, pursuant to Rule 9 of the Takeover Code, ZQ Capital will be required to make a mandatory cash offer to all other Shareholders to acquire the entire issued and to be issued share capital of the Company it does not already own (including any New Shares issued pursuant to the Equity Financing), if the Equity Conditions are satisfied and the Equity Financing completes (the "Rule 9 Mandatory Offer").

The terms of the Equity Financing provide that Southern Fox's participation is limited such that its interest in the voting rights of the Company does not exceed 27.50 per cent. of the Company's enlarged share capital. There is therefore no circumstance arising under the Equity Financing where Southern Fox will have an obligation to make a mandatory offer for the entire issued and to be issued share capital of the Company pursuant to Rule 9 of the Takeover Code.

Restoration of the Company's shares to trading on AIM

On 29 December 2022, the Company announced that due to delays in completing the audit for the year ended 30 June 2022, it would not be able to publish its 2022 Accounts by 31 December 2022. Consequently, the Ordinary Shares were suspended from trading on 3 January 2023. In the event that the 2022 Accounts are not published by 30 June 2023, trading in the Company's Ordinary Shares on AIM will be cancelled. Shareholders should refer to the 'Trading and Business Update' announcement published today for a more detailed update on results and current trading.

The Company was required to publish its unaudited results for the six months ended 31 December 2022 (the "Interim Results") by 31 March 2023 however finalisation of these results is dependent on completion of the audit of the 2022 Accounts. The Company did not publish Interim Results by 31 March 2023, therefore the Ordinary Shares will remain suspended from trading pending publication of the Interim Results.

Shareholder approval and Notice of General Meeting

General Meeting

It is proposed that the General Meeting will be held at the offices of Covington & Burling LLP, 22 Bishopsgate, London EC2N 4BQ at 12 noon on 27 April 2023. The General Meeting will be convened by way of a notice of general meeting contained in a circular to be published to shareholders of the Company shortly after the date of this announcement (the "Circular"). The General Meeting is being held for the purpose of considering and, if thought fit, passing the following Resolutions:

Resolution 1 - an ordinary resolution to authorise the Directors to allot new Ordinary Shares up to an aggregate nominal amount of £4,075,000 pursuant to the Equity Financing.

Resolution 2 - a special resolution to empower the Directors to dis-apply statutory pre-emption rights in respect of the allotment of equity securities in Resolution 1. Resolution 2 is conditional upon the passing of Resolution 1.

Action to be taken

The Company requests that all of its shareholders appoint the chair of the General Meeting as their proxy and submit their votes via proxy in advance of the meeting in accordance with the instructions to be set out in the Circular.

Irrevocable undertakings

As at the date of this announcement, the Company has received voting irrevocable undertakings from the following shareholders to vote in favour of the Resolutions:

(a)  Southern Fox in respect of 149,871,529 Ordinary Shares (representing approximately 22.07 per cent. of the Company's issued share capital as at the date of this announcement); and

(b)  ZQ Capital (including the interests of SkyGem Acquisition, ZQ Capital Limited and Zheqing (Simon) Shen) in respect of 173,740,037 Ordinary Shares (representing approximately 25.58 per cent. of the Company's issued share capital as at the date of this announcement).

Accordingly, as at the date of this announcement, the Company has obtained irrevocable undertakings, in aggregate, to vote in favour of the Resolutions in respect of 323,611,566 Ordinary Shares (representing approximately 47.65 per cent. of the Company's issued share capital as at the date of this announcement).

The irrevocable undertakings cease to be binding and shall lapse if the General Meeting is not held before 11 May 2023.

Related Party Transaction

The Financing is deemed to be a related party transaction pursuant to Rule 13 of the AIM Rules for Companies, by virtue of Southern Fox and ZQ Capital (together with its affiliates, SkyGem Acquisition, ZQ Capital Limited and Zheqing (Simon) Shen) being substantial shareholders (within the meaning of the AIM Rules for Companies) of the Company.

Details of the Lenders' commitments under the Facility Agreement are as follows:

Details of the Investors' maximum commitments in the Equity Financing pursuant to the terms of the Equity Commitment Agreement and the potential impact on the Investors' maximum holdings of Ordinary Shares are as follows:

* Taking into account holdings of SkyGem Acquisition, ZQ Capital Limited and Zheqing (Simon) Shen.

** Assuming no further share issuances prior to Admission, no take up by qualifying shareholders in the Open Offer and prior to any Ordinary Shares acquired by ZQ Capital pursuant to the Rule 9 Mandatory Offer.

*** Assuming no change to the foreign exchange rate between the date of this Announcement and the last practicable date prior to announcement of the Open Offer.

Following completion of the Equity Financing, it is expected that Southern Fox will have a maximum of 1,307,377,398 Ordinary Shares (representing approximately 27.50 per cent. of the enlarged share capital following completion of the Equity Financing).

Following completion of the Equity Financing and prior to any additional Ordinary Shares acquired by ZQ Capital pursuant to the Rule 9 Mandatory Offer, it is expected that ZQ Capital (taking into account holdings of SkyGem Acquisition, ZQ Capital Limited and Zheqing (Simon) Shen) will have a maximum of 3,091,234,168 Ordinary Shares (representing approximately 65.02 per cent. of the enlarged share capital following completion of the Equity Financing).

The Directors of the Company who are independent of the Financing, being all of the Directors save for Zheqing (Simon) Shen and Anthony Parker consider, having consulted with its nominated adviser Panmure Gordon, that the terms of the Financing are fair and reasonable insofar as the Company's shareholders are concerned.

Manuel Llobet, CEO of Allergy Therapeutics, commented: "This financing will provide the necessary funding for our near-term requirements, supporting the continued development of two novel immunotherapy candidates that have the potential to become best-in-class allergy treatments and are key to the growth of our commercial portfolio. I would like to thank ZQ Capital and Southern Fox for their continued support and belief in the business. Despite recent challenges, this company holds significant value through its well-established commercial portfolio of products and clinical pipeline of future therapies that have the potential to transform the way we treat and manage allergies."

The capitalised terms not otherwise defined in the text of this announcement are defined in Appendix 2 and the expected timetable of the principal events is set out in Appendix 1.

Shareholder vote Recommendation

The Directors believe that the Financing will promote the success of the Company for the benefit of its 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 intend to do in respect of their own beneficial holdings.

If the Resolutions are not passed at the General Meeting, the Company will, instead of the Equity Financing, undertake the Pre-emptive Open Offer. In comparison to the Equity Financing, the Pre-emptive Open Offer would take longer to complete and result in higher costs for the Company as it will be necessary to publish a prospectus and additional interest on the Facility that will accrue during this time. As explained in further detail above, the G306 Contingent Payment will not be payable in the event that the Company launches the Pre-Emptive Open Offer prior to the Long Stop Date.

If the Resolutions are not passed at the General Meeting and the Company is unable to secure an alternative funding solution to repay the amounts due under the Facility, the Company may be subject to, inter alia, possible insolvency and loss of ownership of its assets, over which security has been granted pursuant to the Facility. Should the Equity Financing not proceed, it is unlikely that the Company will be able to pay the G306 Contingent Payment should it crystallise. Accordingly, the Board strongly recommends that shareholders vote in favour of the Resolutions at the General Meeting.

- ENDS -

For further information, please contact:

Allergy Therapeutics

+44 (0)1903 845 820

Manuel Llobet, Chief Executive Officer

Martin Hopcroft, Interim Chief Financial Officer

Panmure Gordon (Nominated Adviser, Financial Adviser and Broker)

+44 (0)20 7886 2500

Freddy Crossley, Emma Earl, Corporate Finance

Rupert Dearden, Corporate Broking

Consilium Strategic Communications

+44 (0)20 3709 5700

Mary-Jane Elliott / David Daley / Davide Salvi

[email protected]

About Allergy Therapeutics

Allergy Therapeutics is an international commercial biotechnology company, headquartered in the UK, focussed on the treatment and diagnosis of allergic disorders, including aluminium free immunotherapy vaccines that have the potential to cure disease. The Group sells proprietary and third-party products from its subsidiaries in nine major European countries and via distribution agreements in an additional ten countries. Its broad pipeline of products in clinical development includes vaccines for grass, tree, house dust mite and peanut. For more information, please see www.allergytherapeutics.com.