THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.

Destiny Pharma plc

("Destiny Pharma" or the "Company")

Proposed Cancellation of Admission of Ordinary Shares to Trading on AIM

Re-Registration as a Private Limited Company

and

Notice of General Meeting

Brighton, United Kingdom, 15 July 2024 Destiny Pharma (AIM: DEST), a clinical stage biotechnology company focused on the development and commercialisation of novel medicines to prevent and cure life threatening infections, today announces:

·    subject to Shareholder approval, the proposed cancellation of the admission of its ordinary shares of 1 pence each ("Ordinary Shares") from trading on AIM (the "Cancellation"), the re-registration of the Company as a private limited company (the "Re-registration") following the Cancellation and the adoption of new articles of association (the "New Articles") to be effective on the Re-registration (the Cancellation, Re-registration and New Articles collectively being the "Proposals"); and

·    the posting of a circular to Shareholders (the "Circular") which contains further information on the Cancellation and the Re-registration, a copy of the proposed New Articles, and notice of a general meeting to be held on 31 July 2024 at 10.00 a.m. at the offices of Covington & Burling LLP, 22 Bishopsgate, London EC2N 4BQ (the "General Meeting") at which shareholder approval will be sought for the Proposals.

Sir Nigel Rudd, Chair of the Board of Directors, Destiny Pharma, commented: "As previously disclosed, the Company has been seeking a licencing partner for the development of XF-73 Nasal through Phase 3 clinical trials. However, to date a deal has not been forthcoming and given our cash runway, the Board and our advisors have been evaluating a range of strategic options to access the significant quanta of funding required to progress the drug through these Phase 3 clinical trials and realise the creation of meaningful shareholder value.

"This review, and our discussions with possible funding partners, has identified that a larger pool of capital may be available to Destiny Pharma as a private company and therefore, the Board has concluded that delisting from AIM and re-registering as a private company is a necessary step to provide Destiny Pharma with a realistic chance of securing the capital required to progress XF-73 Nasal through clinical trials and bring this important product to patients and health systems.

"In summary, while there can be no guarantee, the Board believes that the only viable option now available to Destiny Pharma to create future shareholder value is the pursuit of capital as a private company. Without taking this route, we believe that liquidation of the Company is the most likely alternative."

Chris Tovey, Chief Executive Officer, Destiny Pharma, commented: "I continue to believe that XF-73 Nasal could be a highly differentiated drug for patients to prevent post-surgical site infections. XF-73 Nasal has substantial market potential and represents an attractive commercial proposition that, if progressed through late-stage clinical development, could create considerable shareholder value.

"Since I joined the Company, not only have we been vigorously pursuing a potential licensing deal, we have also taken important steps to improve the attractiveness of XF-73 Nasal to potential partners. This includes optimising the clinical trial design, reducing the overall cost to less than half of the previously planned Phase 3 trial, and further strengthening the market research supporting the blockbuster potential for XF-73 Nasal in the United States. Although we continue to speak to partners about this renewed proposition, we are extremely disappointed that a deal has not been forthcoming and, given our shortening cash runway, have been forced to amend our strategy as we seek to continue to progress this important product."

Background to and reasons for the proposed Cancellation and Re-registration

The Board continues to believe that XF-73 Nasal, the Company's lead drug candidate, is highly differentiated with substantial market potential. It targets a significant medical, patient and health system need in preventing post-surgical site infections, even when MRSA is present. Having successfully completed Phase 2 development, which, in the Board's opinion, has significantly de-risked XF-73 Nasal, the Company has worked diligently to design an efficient Phase 3 clinical development programme. The Board also continues to believe that market research supports the proposition that the emerging clinical profile of XF-73 Nasal suggests this product could be an "excellent fit" for its target indication, a positioning implicitly endorsed by the FDA QIDP and MHRA IPD designations XF-73 Nasal has received.

Therefore, the Board believes that XF-73 Nasal represents a commercially significant and attractive proposition and, furthermore, that progressing XF-73 Nasal through the remainder of its late-stage clinical development should create considerable shareholder value while bringing an important therapy to patients.

However, as detailed below, the Board has considered the likelihood of the Company reaching agreement on an appropriate licensing deal in the near term and its ability to raise the significant quantum of capital necessary to advance the XF-73 Nasal programme meaningfully whilst it remains on the public markets. It has concluded that it is very unlikely that an appropriate licensing deal will be forthcoming in the near term, nor that it is realistic to raise sufficient equity capital from the public markets in order to fund and progress the required Phase 3 trial. Feedback from a broad number of potential other sources of equity capital suggests that a possible funding proposal could only be forthcoming if Destiny was a private company.

Given the Company's limited cash resources (£2.9 million as at 30 June 2024), absent a near-term partnership deal or securing sufficient funding to advance the development of XF-73 Nasal in the short-term, the Board has concluded that it would have to review and consider what limited remaining options are available to it, and there is a high likelihood that this would involve liquidating the Company.

As previously communicated, in recent months, the Company has taken important steps to improve the attractiveness of XF-73 Nasal in the context of securing a meaningful licensing deal on XF-73 Nasal that could fund future activities such as completing the Phase 3 studies - these steps include developing a new clinical trial design that is expected to cost approximately £25 million, less than half of the previously planned Phase 3 trial, whilst still delivering the same indication and commercial returns, and conducting an ongoing exercise to broaden understanding of the market potential for XF-73 Nasal in the United States and the commercial go to market model.

However, the Company recognises the challenges presented by the antibiotics markets more broadly, with a growing incidence of bacterial resistance arising to existing agents on their continued use and overuse to treat infections. In order to reduce the likelihood of resistance arising to newer agents, health systems promote antimicrobial stewardship which ultimately limits the use and rate of uptake of new antibiotics and thus their commercial potential. This has led to a paucity of funding for new antibiotics, even for anti-infectives such as XF-73 Nasal which has a differentiated proposition including use as a very short-course prophylactic, rather than a treatment over an extended period of time and, if approved, would be a first-in-class antimicrobial, where no resistance has been observed to date.

For some time, the Company has been seeking a licencing partner to progress and fund the development of XF-73 Nasal. More recently, as announced on 25 April 2024, and in light of a cash runway that only extends to Q1 2025, alongside licencing activities the Board has also been evaluating a range of other strategic options with its Financial Adviser, Rothchild & Co, to secure funding required to conduct the Phase 3 clinical studies.

While milestone payments are due in future from the collaboration and co-development agreement with Sebela Pharmaceuticals in respect of NTCD-M3, the Company's lead asset for the prevention of Clostridioides difficile infection (CDI) recurrence, the anticipated timing of the next milestone payment falls well beyond the Company's current cash runway and beyond the timing of the funding requirement for the development of the Phase 3 programme for XF-73 Nasal.

Ongoing conversations with potential partners have not yet resulted in a licensing deal, and the Board has considered the possibility that a near-term licencing agreement may not be secured. The Board has explored the possibility of securing the quantum of funding (c. £25 million) it needs to execute on the Phase 3 clinical trial programme from a very wide range of sources, including existing Shareholders and public market investors, venture capital firms, specialist healthcare funds as well as from non-dilutive sources, as it believes that by successfully completing the Phase 3 programme itself, it will significantly increase the likelihood of securing a meaningful licencing deal in the future.

Discussions with a limited number of potential funding partners continue but feedback received from those, and other, possible sources of capital has indicated that a possible funding proposal could only be forthcoming if Destiny was a private company.

The Board has considered its ability to raise the quantum of capital necessary to advance the XF-73 Nasal programme from the public markets and has concluded that it is very unlikely to be able to raise sufficient equity capital to fund the required Phase 3 trial, taking into account its current investor base, which is primarily made up of VCT, EIS and private investors, many of whom are unable to invest further in the Company (or make investments of the quantum required), as well as current public market sentiment towards pre-revenue biotechnology companies. In reaching this conclusion, the Board has also considered the Company's current market capitalisation of c. £8.1 million coupled with the limited liquidity and high price volatility in the Company's Ordinary Shares. The Board considers that a fundraise of a smaller quantum on AIM would not realistically allow the Company to significantly advance XF-73 Nasal, or its other pipeline assets, through to value inflection points.

The Board's continued focus is on maximising shareholder value over the long-term and it has extensively reviewed and evaluated the benefits and drawbacks for the Company and its Shareholders in retaining the admission to trading of the Ordinary Shares on AIM. The Board has taken into consideration numerous factors, both positive and negative, and considered the interests of all Shareholders in reaching its decision. These considerations have led the Board to conclude that the Cancellation is the Company's only viable option in order to provide it with a realistic chance of securing an appropriate quantum of funding in a timely manner. The Board considers this objective essential in promoting the medium and long-term success and development of the business.

Whilst there can be no guarantee that additional funding will be secured as a private company, nor as to the terms of any such funding, the Board is of the view that a larger pool of available and appropriate capital is accessible to the Company as a private company at this time. With the Company's limited cash runway in mind, the Board also believes that the cost, management time and the legal and regulatory burden associated with maintaining the Company's admission to trading on AIM are disproportionate to its benefits in the context of a lack of access to sufficient capital to advance XF-73 Nasal through final clinical trials.

General Meeting

The General Meeting will be held at the offices of Covington & Burling LLP, 22 Bishopsgate, London EC2N 4BQ at 10.00 a.m. on 31 July 2024.

Resolution 1 to be proposed at the General Meeting is a special resolution to approve the Cancellation. Resolution 2 to be proposed at the General Meeting is a special resolution to re-register the Company as a private limited company. Resolution 3 to be proposed at the General Meeting is a special resolution to approve the adoption by the Company of the New Articles, upon Re-registration. Resolution 2 is conditional on the passing of Resolution 1, and Resolution 3 is conditional on the passing of Resolutions 1 and 2.

The Directors consider that the Resolutions are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors unanimously recommend that you vote in favour of the Resolutions as they intend to do in respect of their own shareholdings of 9,475,605 Ordinary Shares (representing approximately 9.89 per cent. of the Existing Ordinary Shares).

Irrevocable undertakings and letters of intent to vote in favour of the Resolutions

As at today's date, the Company has received irrevocable undertakings from certain Shareholders representing approximately 18.77 per cent. of the Company's issued share capital to vote in favour of the Resolutions, including 9.89 per cent. of the Company's issued share capital held by directors and their connected parties. The Company has received letters of intent from certain Shareholders representing a further approximately 7.20 per cent. of the Company's issued share capital to vote in favour of the Resolutions.

Therefore, the Company has received irrevocable undertakings and letters of intent totalling in aggregate 25.97 per cent. of the Company's issued share capital to vote in favour of the Resolutions.

Matched Bargain Facility

The Company is making arrangements for a Matched Bargain Facility to assist Shareholders to trade in the Ordinary Shares following Cancellation, if the Resolutions are passed. The Matched Bargain Facility will be provided by J P Jenkins. J P Jenkins is an appointed representative of Prosper Capital LLP, which is authorised and regulated by the FCA.

The Circular and, where applicable, a notice of availability will be sent to shareholders later today. A copy of this announcement and the Circular will also be made available on the Company's website later today at www.destinypharma.com.

Capitalised terms used but not defined in this announcement shall have the same meaning given to such term in the Circular.

The person responsible for the release of this announcement on behalf of the Company is Shaun Claydon, Company Secretary.

For further information, please contact:

Destiny Pharma plc
Chris Tovey, CEO
Shaun Claydon, CFO
+44 (0)1273 704 440
[email protected]

FTI Consulting

Ben Atwell / Simon Conway

+44 (0) 203 727 1000

[email protected]

Shore Capital (Nominated Adviser and Broker)

Daniel Bush / James Thomas / Lucy Bowden

+44 (0) 207 408 4090

About Destiny Pharma

Destiny Pharma is an innovative, clinical-stage biotechnology company focused on the development and commercialisation of novel medicines that can prevent life-threatening infections. The Company's drug development pipeline includes two late-stage assets XF-73 Nasal gel, a proprietary drug targeting the prevention of post-surgical staphylococcal hospital infections including MRSA and NTCD-M3, a microbiome-based biotherapeutic for the prevention of C. difficile infection (CDI) recurrence which is the leading cause of hospital acquired infection in the US.

For further information on the company, please visit www.destinypharma.com.

APPENDIX I

Expected Timetable of Principal Events

APPENDIX II

Extracts from the Circular

AIM Delisting

It is a requirement under Rule 41 of the AIM Rules that the AIM Delisting is approved by Shareholders holding not less than 75 per cent. of votes cast by Shareholders at the General Meeting. The Delisting Resolution is set out at resolution 1 in the Notice of General Meeting.

If the Delisting Resolution is passed, the Board will resolve to cancel the admission of the Ordinary Shares to trading on AIM.

Pursuant to Rule 41 of the AIM Rules, the Company, through its nominated adviser, Shore Capital, has notified the London Stock Exchange of the proposed Cancellation. Under the AIM Rules, the Company is required to give at least 20 clear Business Days' notice of the Cancellation.

Additionally, Cancellation will not take effect until at least five clear Business Days have passed following the passing of the Delisting Resolution. If the Delisting Resolution is passed at the General Meeting, it is proposed that the last day of trading in the Ordinary Shares on AIM will be 12 August 2024 and that the Cancellation will become effective following the issue of a Dealing Notice, at 7.00 a.m. on 13 August 2024.

The Directors are aware that certain Shareholders may be unable or unwilling to hold Ordinary Shares in the event that the Cancellation is approved and becomes effective. Such Shareholders should consider selling their interests in the market prior to the Cancellation becoming effective.

The principal effects of the AIM Delisting are as follows:

·    there will be no formal market mechanism enabling Shareholders to trade their Ordinary Shares on AIM (or any other recognised market or trading exchange) and no price will be publicly quoted for the Ordinary Shares;

·    it is possible that, following the publication of the Circular, the liquidity and marketability of the Ordinary Shares may be significantly reduced and their value adversely affected;

·    the Ordinary Shares may be more difficult to sell compared to shares of companies traded on AIM (or any other recognised market or trading exchange);

·    it may be difficult for Shareholders to determine the market value of their investment in the Company at any given time;

·    the regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on AIM will no longer apply;

·    the Company will no longer be required to comply with the AIM Rules and Shareholders will no longer be afforded the protections given by the AIM Rules, such as the requirement to be notified of price sensitive information or certain events and the requirement that the Company seek shareholder approval for certain corporate actions, where applicable, including substantial transactions, reverse takeovers, related party transactions and fundamental changes in the Company's business, including certain acquisitions and disposals;

·    the levels of disclosure and corporate governance within the Company may not be as stringent as for a company quoted on AIM;

·    the Company will no longer be subject to UK MAR regulating inside information and other matters;

·    the Company will no longer be required to publicly disclose any change in major shareholdings in the Company under the Disclosure Guidance and Transparency Rules;

·    Shore Capital will cease to be nominated adviser to the Company; and

·    whilst the Company's CREST facility will remain in place immediately post the Cancellation, the Company's CREST facility may be cancelled in the future and, although the Ordinary Shares will remain transferable, they may cease to be transferable through CREST (in which case, Shareholders who hold Ordinary Shares in CREST will receive share certificates).

Additional tax consequences are set out in paragraph 8 of Part I (Letter from the Chairman of Destiny Pharma plc) of the Circular.

Details of the application of the Takeover Code, which will continue to apply to the Company following the Cancellation, are set out in paragraph 7 of Part I (Letter from the Chairman of Destiny Pharma plc) of this Circular.

For the avoidance of doubt, the Company will remain registered with the Registrar of Companies in England and Wales, and as such the Company will continue to be subject to the requirements of the Companies Act 2006.

The above considerations are not exhaustive, and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them and their shareholding in the Company.

Transactions in the Ordinary Shares prior to and post the proposed Cancellation

Prior to the Cancellation

Shareholders should note that they are able to continue trading in the Ordinary Shares on AIM prior to the date of Cancellation. If the requisite majority of Shareholders approve the Delisting Resolution at the General Meeting, it is anticipated that the last day of dealings in the Ordinary Shares on AIM will be 12 August 2024. The Board is not making any recommendation as to whether or not Shareholders should buy or sell their Ordinary Shares.

Dealing and settlement arrangements post the Cancellation

The Directors are aware that Shareholders may wish to acquire or dispose of Ordinary Shares in the Company following the Cancellation. Should the Delisting Resolution be approved by Shareholders at the General Meeting, the Company is seeking to implement a Matched Bargain Facility and to be provided by J P Jenkins. J P Jenkins is an appointed representative of Prosper Capital LLP, which is authorised and regulated by the FCA.

Under the Matched Bargain Facility, Shareholders or persons wishing to acquire or dispose of Ordinary Shares will be able to leave an indication with J P Jenkins, through their stockbroker (J P Jenkins is unable to deal directly with members of the public), of the number of Ordinary Shares that they are prepared to buy or sell at an agreed price. In the event that J P Jenkins is able to match that order with an opposite sell or buy instruction, it would contact both parties and then effect the bargain (trade). Shareholdings remain in CREST and can be traded during normal business hours via a UK regulated stockbroker. Should the Cancellation become effective and the Company puts in place the Matched Bargain Facility, details will be made available to Shareholders on the Company's website at www.destinypharma.com.

The Matched Bargain Facility will operate for a minimum of 12 months after the Cancellation. The Directors' current intention is that it will continue beyond that time but Shareholders should note that it could be withdrawn and there can be no guarantee that the Matched Bargain Facility will be kept in place indefinitely, and this could therefore inhibit the ability to trade the Ordinary Shares. Further details will be communicated to the Shareholders at the relevant time.

If Shareholders wish to buy or sell Ordinary Shares on AIM they must do so prior to the Cancellation becoming effective. As noted above, in the event that Shareholders approve the Cancellation, it is anticipated that the last day of dealings in the Ordinary Shares on AIM will be 12 August 2024 and that the effective date of the Cancellation will be 13 August 2024.

Re-registration

Following the Cancellation, the Directors believe that the requirements and associated costs of the Company maintaining its public company status will be difficult to justify and that the Company will benefit from the more flexible requirements and lower costs associated with private limited company status. It is therefore proposed to re-register the Company as a private limited company. In connection with the Re-registration, it is proposed that the New Articles be adopted to reflect the change in the Company's status to a private limited company. The principal effects of the Re-registration and the adoption of the New Articles on the rights and obligations of Shareholders and the Company are summarised in Appendix B to the Circular. A copy of the New Articles can be found at Appendix C to the Circular.

Under the Companies Act 2006, the Re-registration and the adoption of the New Articles must be approved by Shareholders holding not less than 75 per cent. of votes cast by Shareholders at the General Meeting. Accordingly, the Notice of General Meeting set out in Part II (Notice of General Meeting) of the Circular contains a special resolution to approve the Re-registration and adopt the New Articles.

If the Delisting Resolution and the Re-registration Resolution are approved at the General Meeting, an application will be made to the Registrar of Companies for the Company to be re-registered as a private limited company. Re-registration will take effect when the Registrar of Companies issues a certificate of incorporation on re-registration. The Registrar of Companies will issue the certificate of incorporation on re-registration when it is satisfied that no valid application can be made to cancel the re-registration Resolution or that any such application to cancel the Re-registration Resolution has been determined and confirmed by the Court.

If the Resolutions are passed at the General Meeting, it is anticipated that the Re-registration will become effective on or around 30 August 2024.

Board composition and provision of information following the Cancellation

Although any Board changes have not yet been determined, the composition of the Board is expected to change shortly after Cancellation and the Re-registration so that it is appropriate for a private company of its size.

The Company currently intends to continue to provide certain information, services and facilities to Shareholders following the Cancellation.

The Company will continue to communicate information about the Company (including annual accounts) to its Shareholders, as required by the Companies Act. It also currently intends to maintain its website, (www.destinypharma.com) and to post periodic updates for investors on the business and key developments, although Shareholders should be aware that there will be no obligation on the Company to include all of the information required under the Disclosure Guidance and Transparency Rules or the AIM Rules, nor to update the website as currently required by the AIM Rules.

As set out above, the Company intends to make available to Shareholders, through J P Jenkins, the Matched Bargain Facility which will allow Shareholders to buy and sell Ordinary Shares on a matched bargain basis following the Cancellation.

Application of the Takeover Code following the AIM Delisting and the Re-registration

The Takeover Code applies to all offers for companies which have their registered office in the United Kingdom, the Channel Islands or the Isle of Man if any of their equity share capital or other transferable securities carrying voting rights are admitted to trading on a UK regulated market or a UK multilateral trading facility or on any stock exchange in the Channel Islands or the Isle of Man.

The Takeover Code also applies to all offers for companies (both public and private) which have their registered offices in the United Kingdom, the Channel Islands or the Isle of Man which are considered by the Takeover Panel to have their place of central management and control in the United Kingdom, the Channel Islands or the Isle of Man, but in relation to private companies only if one of a number of conditions is met, including that any of the company's equity share capital or other transferable securities carrying voting rights have been admitted to trading on a UK regulated market or a UK multilateral trading facility or on any stock exchange in the Channel Islands or the Isle of Man at any time in the preceding ten years.

Following the AIM Delisting and the Re-registration, the Takeover Code will continue to apply for a period of ten years from the AIM Delisting provided that the Company is considered by the Takeover Panel to have its place of central management and control in the United Kingdom (or the Channel Islands or the Isle of Man). This is known as the "residency test". The way in which the test for central management and control is applied for the purposes of the Takeover Code may be different from the way in which it is applied by the United Kingdom tax authority, HMRC. Under the Takeover Code, the Takeover Panel looks to where the majority of the Directors are resident, amongst other factors, for the purposes of determining where the Company has its place of central management and control.

Based on the current composition of the Board, the residency test will be satisfied and the Takeover Code will continue to apply to the Company following the AIM Delisting and the Re-registration. However, the Takeover Code could cease to apply to the Company in the future if any changes to the Board composition result in the majority of the Directors not being resident in the United Kingdom, Channel Islands and Isle of Man.

If amendments to the Takeover Code proposed in consultation paper PCP 23.4.1 (published by the Takeover Panel on 24 April 2024) are adopted, then the Takeover Code would cease to apply to the Company after a period of 3 years following the implementation of these amendments, irrespective of the composition of the Board.

When the Takeover Code ceases to apply to the Company in the future, Shareholders will not receive the protections afforded by the Takeover Code in the event that there is a subsequent offer to acquire their Ordinary Shares. This includes the requirement for a mandatory cash offer to be made if either:

i.      a person acquires an interest in shares which, when taken together with the shares in which persons acting in concert with it are interested, increases the percentage of shares carrying voting rights in which it is interested to 30 per cent. or more; or

ii.     a person, together with persons acting in concert with it, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of a company but does not hold shares carrying more than 50 per cent. of such voting rights and such person, or any person acting in concert with it, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which it is interested.

Brief details of the Takeover Panel, the Takeover Code and the protections given by the Takeover Code are described below.

Before giving your approval to the AIM Delisting and the Re-registration, you may want to take independent professional advice from an appropriate independent financial adviser.

The Takeover Code

The Takeover Code is issued and administered by the Takeover Panel. Destiny Pharma is a company to which the Takeover Code applies and its shareholders are accordingly entitled to the protections afforded by the Takeover Code.

The Takeover Code and the Takeover Panel operate principally to ensure that shareholders are treated fairly and are not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment by an offeror. The Takeover Code also provides an orderly framework within which takeovers are conducted. In addition, it is designed to promote, in conjunction with other regulatory regimes, the integrity of the financial markets.

The General Principles and Rules of the Takeover Code

The Takeover Code is based upon a number of General Principles which are essentially statements of standards of commercial behaviour. For your information, these General Principles are set out in Part 1 of Appendix A to the Circular. The General Principles apply to all transactions with which the Takeover Code is concerned. They are expressed in broad general terms and the Takeover Code does not define the precise extent of, or the limitations on, their application. They are applied by the Takeover Panel in accordance with their spirit to achieve their underlying purpose.

In addition to the General Principles, the Takeover Code contains a series of Rules, of which some are effectively expansions of the General Principles and examples of their application and others are provisions governing specific aspects of takeover procedure. Although most of the Rules are expressed in more detailed language than the General Principles, they are not framed in technical language and, like the General Principles, are to be interpreted to achieve their underlying purpose. Therefore, their spirit must be observed as well as their letter. The Takeover Panel may derogate or grant a waiver to a person from the application of a Rule in certain circumstances.

Giving up the protection of the Takeover Code

A summary of key points regarding the application of the Takeover Code to takeovers generally is set out in Part 2 of Appendix A to the Circular. You are encouraged to read this information carefully as it outlines certain important protections which you will be giving up if you agree to the AIM Delisting and the Re-registration, if/when the Company subsequently ceases to be subject to the Takeover Code in the future.

Irrevocable Undertakings and Letters of Intent

As at the Last Practicable Date, the Company has received voting irrevocable undertakings from the following Shareholders to vote in favour of the Resolutions:

a)    The Wade Family in respect of 6,420,971 Ordinary Shares (representing approximately 6.70 per cent. of the Existing Ordinary Shares); and

b)    Joe Eagle in respect of 2,081,560 Ordinary Shares (representing approximately 2.17 per cent. of the Existing Ordinary Shares).

In addition, those Directors who are Shareholders, who in aggregate hold 9,475,605 Ordinary Shares, representing approximately 9.89 per cent. of the Existing Ordinary Shares, have irrevocably undertaken to vote in favour of the Resolutions at the General Meeting.

The irrevocable undertakings cease to be binding and shall lapse if the General Meeting is not held before 30 September 2024.

As at the Last Practicable Date, the Company has also received voting letters of intent from the following Shareholders indicating their intention to vote in favour of the Resolutions:

a)    A&B (HK) Company Limited in respect of 3,449,289 Ordinary Shares (representing approximately 3.60 per cent. of the Existing Ordinary Shares); and

b)    CMS Medical Venture Investment in respect of 3,449,289 Ordinary Shares (representing approximately 3.60 per cent. of the Existing Ordinary Shares).

The letters of intent are not legally binding and there is no guarantee that these Shareholders will vote in favour of the Resolutions.

The Company has therefore obtained irrevocable undertakings to vote in favour of the Resolutions in respect of, in aggregate, 17,978,136 Ordinary Shares (representing approximately 18.77 per cent. of the Existing Ordinary Shares) and letters of intent to vote in favour of the Resolutions in respect of, in aggregate, 6,898,578 Ordinary Shares (representing approximately 7.20 per cent. of the Existing Ordinary Shares).

Recommendation

The Directors consider that the Resolutions are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors unanimously recommend that you vote in favour of the Resolutions as they intend to do in respect of their own shareholdings of 9,475,605 Ordinary Shares, (representing approximately 9.89 per cent. of the Existing Ordinary Shares).