Proposed Placing and Subscription to raise £11.4m

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER COUNTRY, TERRITORY OR JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

 

FURTHER, 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 AVACTA GROUP PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFposed Placing and Subscription to raise £11.4mFER OR SOLICITATION WOULD BE UNLAWFUL.  THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY.

 

                                                                                                               

Avacta Group plc

("Avacta", the "Group" or the "Company")

 

Proposed Placing and Subscription to raise £11.4m

 

 

Avacta Group plc (AIM: AVCT), the developer of Affimer® biotherapeutics and reagents, is pleased to announce a proposed Placing and Subscription (together the "Fundraising") at a price of 25 pence per share to raise gross proceeds for the Company of £11.4 million.

The Placing will be conducted by way of an accelerated bookbuild process which will be launched immediately following this announcement, in accordance with the terms and conditions set out in the Appendix to this announcement. finnCap is acting as Nominated Adviser and Joint Broker, alongside WG Partners and Turner Pope who will also be acting as joint brokers in connection with the Placing (together the "Joint Brokers").  It is expected that the Subscription will be concluded at the close of the accelerated book build process and will raise proceeds for the Company of £1.9 million.

It is proposed that the Placing will comprise of an element of Ordinary Shares that will be allotted pursuant to an existing authorisation to allot shares on a non-pre-emptive basis and admitted to trading on AIM on Friday 3 August 2018, with the balance of shares to be issued in connection with the Fundraising being subject to shareholder approval.  The Fundraising is not being underwritten.

 

The final number of Placing Shares will be agreed by the Joint Brokers and the Company at the close of the bookbuild, and the results of the Fundraising will be announced as soon as practicable thereafter. The timing for the close of the bookbuild and the allocation of Placing Shares shall be at the absolute discretion of the Joint Brokers, in consultation with the Company. The Company and the Joint Brokers reserve the right to issue and sell a greater or lesser number of shares through the Placing.

REASONS FOR THE FUNDRAISING AND USE OF PROCEEDS

 

It is anticipated that the Fundraising will raise £11.4 million before expenses.  The Company intends to utilise the net proceeds of the Fundraising to enter into significant drug development partnerships, develop the Affimer therapeutic pipeline, license Affimer reagents and seek to achieve a clinic ready candidate for first-in-man trials of its PD-L1/LAG3 bispecific therapy.  Accordingly, the Company intends to deploy the funds to invest into the therapeutic pre-clinical and clinical programmes and to seek to grow the recurring revenue from the reagents business.

 

Therapeutics, approximately £6.2 million invested as follows:

 

·     £2.0 million deployed into the PD-L1/LAG3 bispecific programme focused on the IND enabling studies during 2018/19 that would facilitate the Company to commit, in future, to the substantial regulatory,  GMP manufacturing and clinical trials costs of a first-time-in-human Phase I clinical study in 2020/21;

 

·     £1.2 million deployed into the PD-L1 Drug Conjugate programme in partnership with Tufts Medical Center to seek to develop a novel PD-L1 targeted drug conjugate in order to achieve in-vivo pharmacology data in 2020 for development or partnering;

 

·     £0.75 million deployed into the targeted agonists in order to achieve in-vivo pharmacology data in 2020 for partnering or development;

 

·      £1.0 million into the discovery pipeline to continue to build the pipeline of Affimer I-O assets for partnering and support third party technology evaluations through collaborative projects; and

 

·      £1.25 million invested into further staff costs related to the clinical and regulatory team, to include the appointment of a Chief Medical Officer for the Company, business development and IP protection.

 

Reagents, approximately £3.3 million invested as follows:

 

·      Business Development, £0.8 million to help deliver:

 

o  10-20 royalty bearing license deals in place by 2021;

o  at least one major diagnostic license deal/partnership with seven figure royalty potential;

o  50-100 paid for projects per year by 2021;

o  marketing, conferences, exhibitions; and

o  business development team shared with therapeutics: US (2 fte), Europe (3 fte), Asia.

 

·      Research and Development, £2.5 million to help deliver:

 

o  Applications development to generate technical marketing material;

o  Method development for high value difficult targets;

o  Generation of a pipeline of diagnostic Affimer assets for licensing; and

o  Applications and R&D team.

 

Other, £1.0 million to be utilised to cover:

 

·      capex, plc and central costs; and

·      intellectual property costs.

 

 

 

CURRENT TRADING AND OUTLOOK

 

The interim results released on 16 April 2018 demonstrated the continued progress that the Company has made.  The results showed revenues increased 16 per cent to £1.5m (£1.3m FY17) and, at 31 January 2018, cash balances were £8.3 million.  With regards to the Affimer Therapeutics business, Avacta has made good progress with in-house programmes, the lead PD-L1 programme is on-track to deliver several key pre-clinical milestones in 2018 and there is continued platform validation and de-risking through completion of a number of in-vitro data packages.   The Company has made solid progress with a number of partners such as partners Moderna, Glythera Ltd and FIT Biotech (FITBIO:FN Finland).   There are ongoing collaborations with Memorial Sloan Kettering Cancer Centre and with OncoSec (NASDAQ: ONCS) and recently the Company announced a drug development partnership based on a ground-breaking co-invention with Tufts University School of Medicine in Boston, US.  This partnership focuses on an entirely novel approach to making drug conjugates combining Avacta's Affimer technology with drugs developed by Professor William Bachovchin, Professor of Chemical and Molecular Biology at Tufts.  Avacta is in discussions with multiple pharma and biotech regarding Affimer therapeutics opportunities. The pipeline of opportunities continues to grow across multiple applications. 

 

With regards to Affimer research and diagnostics reagents, the focus is on licensing opportunities for reagents in non-therapeutic markets: progress has been made with multiple third-party technology evaluations and Avacta is expecting further licensing deals in 2018.  In addition, there has been strong growth in public validations of Affimer technology by third parties. This includes a record period for publication of third party peer reviewed scientific papers using Affimers as well as public support by likes of Covance and Heptares.

 

Since 31 January 2018,  Avacta has made progress in a second therapeutic programme, a LAG-3 inhibitor, such that the Group is confident to leap-frog the planned clinical trials for a PD-L1 inhibitor on its own and, on a similar timescale, aim for first-time-in-human clinical data for a PD-L1/LAG-3 bispecific therapy - a potentially much more valuable asset.

The Company is working with partners to demonstrate the potential of the Affimer technology in other therapeutic areas. In one such area, gene delivery, the Company has received a great deal of interest as a result of, the Directors believe, the technical benefits of the Affimer technology for this application. Moderna, Oncosec and FIT Biotech are all gene delivery collaborations. Moderna is evaluating Affimers against multiple targets and the Company expects Moderna to make a decision whether to develop these Affimers further before the end of 2018. In May 2018 the Company announced that its research collaboration with FIT Biotech had successfully completed a proof-of-concept gene delivery study with very encouraging data, showing sustained production of Affimer molecules by the muscle tissue of mice following a single dose of the Affimer DNA using the FIT technology.

With the growing body of data generated in-house and through collaborations, the Company expects that it will have sufficient evidence of the performance of Affimer therapeutics to secure at least one significant development partnership including an upfront payment with a significant pharma partner in the next two years before it reaches the clinic itself with its lead in-house programme. The Company expects that, in due course, clinical data from its in-house programmes will be seen as a major de-risking point that will make deal-making easier and deal sizes larger.

 

DIRECTORS' PARTICIPATION

 

The Directors intend to invest a total of £70,000 in the Fundraising as follows:

 

Eliot Forster, Non-executive Chairman, intends to subscribe for 120,000 Ordinary Shares in the Subscription at the Issue Price for a total of £30,000.

 

Alastair Smith, Chief Executive Officer, intends to subscribe for 40,000 Ordinary Shares in the Placing at the Issue Price for a total of £10,000.

 

Alan Aubrey, Non-Executive Director, intends to subscribe for 80,000 Ordinary Shares in the Placing at the Issue Price for a total of £20,000.

 

Trevor Nicholls, Non-Executive Director, intends to subscribe for 40,000 Ordinary Shares in the Placing at the Issue Price for a total of £10,000.

 

RELATED PARTY TRANSACTION

 

The proposed participation of Eliot Forster, Alastair Smith, Alan Aubrey and Trevor Nicholls in the Fundraising is deemed a related party transaction pursuant to the AIM Rules. The Independent Directors consider, having consulted with the Company's nominated adviser, finnCap, that the terms of the Director's participation in the Fundraising is fair and reasonable insofar as the Shareholders are concerned.

 

The proposed participation of IP Group Plc in the Placing is deemed a related party transaction pursuant to the AIM Rules. The Independent Directors consider, having consulted with the Company's nominated adviser, finnCap, that the terms of IP Group Plc's participation in the Placing is fair and reasonable insofar as Shareholders are concerned.

 

OPTION SCHEMES

 

The Company has four option schemes in place, a share incentive plan, an EMI scheme, an unapproved scheme and a long term incentive plan. There are currently in issue options to subscribe for 4,756,972 Ordinary Shares, representing 6.7 per cent of the Existing Ordinary Shares. Following the Fundraising the Enlarged Share Capital is expected to be 114,749,487 Ordinary Shares. To ensure key staff are fully incentivised, it is intended that the number of shares under option be increased to 17,200,000, representing 15 per cent of the Enlarged Share Capital. As at the date of this announcement there are 1,489,072 Ordinary Shares that have been awarded to staff below management level under an EMI option scheme. The exercise price for these options is between 70p and 134p per share. It is intended that for this scheme only the exercise price will be amended to be the Issue Price.

 

For further information from Avacta Group plc, please contact:

Avacta Group plc Alastair Smith, Chief Executive Officer Tony Gardiner, Chief Financial Officer	Tel:  +44 (0) 844 414 0452 www.avacta.com
finnCap Ltd Geoff Nash / Giles Rolls - Nominated Adviser Tim Redfern / Nikita Jain - Corporate Broking   WG Partners Nigel Birks / Nigel Barnes David Wilson / Claes Spang	Tel:  +44 (0) 207 220 0500 www.finncap.com     Tel:  +44 (0) 203 705 9318 Tel:  +44 (0) 203 705 9317 www.wgpartners.co.uk
Turner Pope James Pope Andy Thacker	Tel:  +44 (0) 203 621 4120 www.turnerpope.com
Zyme Communications (Trade and Regional Media) Katie Odgaard   Yellow Jersey (Financial Media and IR) Sarah Hollins	Tel: +44 (0)7787 502 947 [email protected]    Tel: +44 (0)7764 947137 [email protected]

 

DEFINITIONS

 

"Affiliate"	a person controlling, controlled by or under common control with that person
"AIM"	the market of that name, operated by the London Stock Exchange
"AIM Rules"	the AIM Rules for Companies published by the London Stock Exchange
"Board" or "Directors"	the directors of the Company as at the date of this announcement
"Company" or "Avacta"	Avacta Group Plc, a company incorporated in England and Wales with registered number 04748597
"EIS"	Enterprise Investment Scheme
"EIS/VCT Clearance"	the clearance dated 8 May 2018 received from HMRC confirming that the Company satisfied the relevant VCT and EIS criteria so as to enable investors in the Company to potentially be able to benefit from EIS/VCT tax reliefs
"EIS/VCT Shares"	up to 10,785,800 new Ordinary Shares to be allotted and issued pursuant to the Placing Agreement to VCTs and certain persons seeking to invest in "eligible shares" for the purpose of EIS pursuant to the EIS/VCT Clearance
"Enlarged Share Capital"	the issued share capital of the Company as enlarged by the issue of the New Ordinary Shares
"Existing Ordinary Shares"	the 68,989,487 Ordinary Shares in issue on the date of this announcement
"finnCap"	finnCap Ltd, the Company's nominated adviser and joint broker
"finnCap Person"	means any person being finnCap, its Affiliates or its and their respective directors, officers, agents or employees (in each case whether present or future)
"First Admission"	the admission of the First Placing Shares to trading on AIM
"First Placing Shares"	up to 2,494,200 General Shares and 3,525,800 EIS/VCT Shares
''Fundraising''	together the Placing and the Subscription
"General Shares"	up to 27,454,200 new Ordinary Shares to be allotted and issued pursuant to the Placing Agreement other than the EIS/VCT Shares
"Independent Directors"	Tony Gardiner and Mike Owen
"Issue Price"	the issue price of both the Placing Shares and the Subscription Shares, being 25p per New Ordinary Share
"Joint Brokers"	finnCap, WG Partners and Turner Pope
"New Ordinary Shares"	the Placing Shares and the Subscription Shares
"Ordinary Shares"	ordinary shares of 10p in the capital of the Company
"Placees"	subscribers for the EIS/VCT Shares and General Shares pursuant to the Placing
"Placing"	the conditional placing of the EIS/VCT Shares and General Shares at the Issue Price by the Joint Brokers to the Company, pursuant to the Placing Agreement
"Placing Agreement"	the conditional agreement dated 30 July 2018 between the Company, finnCap, WG Partners and Turner Pope in relation to the Placing
"Placing Shares"	the EIS/VCT Shares and the General Shares to be issued pursuant to the Placing
"Second Admission"	the admission of the Second Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules
"Second Placing Shares"	up to 7,260,000 EIS/VCT Placing Shares to be allotted and issued pursuant to the Placing
"Shareholders"	holders of Ordinary Shares
"'Subscription"'	the conditional subscription for the Subscription Shares pursuant to the Subscription Letters
"Subscription Letters"	the conditional subscription letters to be entered into by the Company in connection with the subscription for the Subscription Shares
"'Subscription Shares"'	7,520,000 Ordinary Shares to be issued pursuant to the Subscription
"Third Admission"	the admission of  the Third Placing Shares and the Subscription Shares to trading on AIM becoming effective in accordance with the AIM Rules
"Third Placing Shares"	up to 24,960,000 General Shares to be allotted and issued pursuant to the Placing
"Turner Pope"	Turner Pope Investments (TPI) Ltd, acting as joint broker of the Company
"Turner Pope Person"	any person being Turner Pope, its Affiliates or its and their respective directors, officers, agents or employees (in each case whether present or future)
"WG Partners"	WG Partners LLP, acting as joint broker to the Company
"WG Partners Person"	any person being WG Partners, its Affiliates or its and their respective directors, officers, agents or employees (in each case whether present or future)

 

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 

 

Announcement of the Fundraising	30 July 2018
Announcement of Result of Fundraising	30 July 2018
Publication and posting circular to shareholders and the form of proxy	31 July 2018
First Admission	8.00 a.m. on 3 August 2018
First Placing Shares credited to CREST members' accounts in uncertificated form	3 August 2018
Latest time and date for receipt of Forms of Proxy	10.00 a.m. on 15 August 2018
General Meeting	10.00 a.m. on 17 August 2018
Result of General Meeting announced	17 August 2018
Second Admission	8.00 a.m. on 20 August 2018
Second Placing Shares credited to CREST members' accounts in uncertificated form	20 August 2018
Third Admission	8.00 a.m. on 21 August 2018
Third Placing Shares and Subscription Shares credited to CREST members' accounts in uncertificated form	21 August 2018
Despatch of definitive share certificates for EIS/VCT Shares, General Shares and Subscription Shares in certificated form	no later than 7 September 2018

 

 

 

APPENDIX

TERMS AND CONDITIONS OF THE PLACING
For Invited Placees only - Important Information

1.           Introduction

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX AND THE TERMS AND CONDITIONS CONTAINED HEREIN, (TOGETHER, THIS "ANNOUNCEMENT") IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND, JAPAN, NEW ZEALAND OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) COMES ARE REQUIRED BY THE COMPANY, FINNCAP, WG PARTNERS AND TURNER POPE 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 IS FOR INFORMATION PURPOSES ONLY AND IS DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE ("QUALIFIED INVESTORS"); AND (B) PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); OR (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (C) ARE PERSONS WHO ARE OTHERWISE LAWFULLY PERMITTED TO RECEIVE IT WITHOUT REQUIRING THE COMPANY TO ISSUE A PROSPECTUS APPROVED BY COMPETENT REGULATORS (ALL SUCH PERSONS REFERRED TO IN (A), (B) AND (C), TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT AND THE INFORMATION IN IT 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 RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR 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 OR PURCHASE OF THE PLACING SHARES.

THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE.

This Announcement or any part of it does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction in which the same would be unlawful. No public offering of the Placing Shares is being made in any such jurisdiction.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States. The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained for the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Placing Shares and the Placing Shares have not been, nor will they be, registered under or offering in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or the Republic of South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the United Kingdom.

 

Persons (including, without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any action.

By participating in the Bookbuild (as defined below) and the Placing, each Placee will be deemed to have read and understood this Announcement in its entirety to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix.

Members of the public are not eligible to take part in the Placing.

In this Appendix:

(a)          "you" or "Placee" means any person who becomes committed through the Bookbuild to subscribe for Placing Shares; and

(b)          terms defined elsewhere in this Announcement have the same meanings, unless the context requires otherwise.

Various dates referred to in this Announcement are stated on the basis of the expected timetable for the Placing. It is possible that some of these dates may be changed.  It is expected that (i) the First Placing Shares will be allotted, conditional upon, inter alia, First Admission, on 3 August 2018, or, in any case, by such later time and/or date as the Company and the Brokers (as defined below) may agree, being not later than 7 September 2018 (Long Stop Date) (ii) the Second Placing Shares will be allotted, conditional upon, inter alia, Second Admission, on 20 August 2018, and (iii) the Third Shares and the Subscription Shares will be allotted, conditional upon, inter alia, the Second Admission and the Third Admission, on 21 August 2018 or, in any case, by such later time and/or date as the Company and the Brokers may agree, being not later than the Long Stop Date.

2.           Details of the Placing

finnCap, WG Partners and Turner Pope (the "Joint Brokers") have today entered into the Placing Agreement with the Company pursuant to which, subject to the conditions set out in such agreement, they have agreed, as agents for and on behalf of the Company, to use their respective reasonable endeavours to procure Placees for the Placing Shares at the Issue Price with certain institutional and other investors.

No element of the Placing is underwritten.

The Placing of the Placing Shares is conditional upon the Placing Agreement becoming unconditional in all respects.

The Placing Shares will, when issued, be subject to the articles of association of the Company, be credited as fully paid and rank pari passu in all respects with the existing Ordinary Shares, including the right to receive dividends and other distributions declared or made following each Admission.

Applications will be made to the London Stock Exchange for admission of the EIS/VCT Shares, the General Shares and the Subscription Shares to trading on AIM. The First Admission, Second Admission and the Third Admission are each conditional upon, amongst other things, the conditions in the Placing Agreement being satisfied and the Placing Agreement not having been terminated in accordance with its terms. It is expected that the First Placing Shares will be allotted, conditional upon, inter alia, First Admission, on 3 August 2018 and that dealings in the First Placing Shares will commence at that time.  It is expected that the Second Placing Shares will be allotted, conditional upon, inter alia, the Second Admission, on 20 August 2018 and that dealings in the Second Placing Shares will commence at that time. It is expected that the Third Placing Shares and the Subscription Shares will be allotted, conditional upon, inter alia, Third Admission on 21 August 2018 and that dealings in the Third Placing Shares and Subscription Shares will commence at that time.

3.           Bookbuild

Each of the Joint Brokers are proceeding with a share placing bookbuild process (Bookbuild) for the purpose of assessing demand from institutional and other investors for subscribing for the Placing Shares at the Issue Price and the Company then issuing those shares under the Placing and the Subscription Shares under the Subscription to raise approximately £11.4 million for the Company before expenses. Each of the Joint Brokers are acting as the Company's agent in respect of the Bookbuild.

The Bookbuild is expected to close at or before 5 p.m. today. The Company will then release an announcement through the London Stock Exchange's Regulatory Information Service confirming the number of Placing Shares and Subscription Shares to be issued and the amount to be raised under the Placing and the Subscription. The Joint Brokers will determine the basis for allocating Placing Shares to bids submitted to it in the Bookbuild and may at their discretion (i) accept bids, either in whole or in part, (ii) accept bids that are received after the Bookbuild has closed, and/or (iii) scale down all or any bids on such basis as it considers appropriate. The Joint Brokers may carry out the Placing by any alternative method to the Bookbuild as they choose. None of the Joint Brokers nor any other finnCap Person, WG Partners Person or TP Person will have any liability to Placees (subject to applicable law) or to anyone else other than the Company in respect of the Placing or in respect of its conduct of the Bookbuild or of any alternative method that they may adopt for carrying out the Placing.

The Company and the Joint Brokers may, by agreement with each other, increase the amount to be raised through the Placing. The Company also reserves the right to allow officers of the Company and/or Group employees to subscribe for some of the Placing Shares at the Issue Price, with the Joint Brokers' agreement, on substantially the same or similar terms as apply to those Relevant Persons subscribing for shares under the Placing.

4.           Participation and settlement

Participation in the Bookbuild is only available to persons who are invited to participate in it by the Joint Brokers.

If you are invited to participate in the Bookbuild and wish to do so, you should communicate your bid by telephone to your usual broking contact at the Joint Brokers. Each bid should state the number of Placing Shares which you wish to subscribe for at the Issue Price. If your bid is successful, in whole or in part, your allocation will be confirmed orally following the close of the Bookbuild. Oral confirmation of your allocation by any of the Joint Brokers will constitute a legally binding commitment on your part to subscribe for the number of Placing Shares allocated to you at the Issue Price on the terms and subject to the conditions set out or referred to in this Appendix and subject to the Company's articles of association.

A person who submits a bid in the Bookbuild will not be able, without the agreement of any of the Joint Brokers (as appropriate), to vary or revoke the bid before the close of the Bookbuild. Such a person will not be able, after the close of the Bookbuild, to vary or revoke a submitted bid in any circumstances.

If you are allocated Placing Shares in the Bookbuild, you will be sent a written confirmation stating (i) the number of Placing Shares allocated to you, (ii) the aggregate amount you will be required to pay for those Placing Shares at the Issue Price, (iii) relevant settlement information, and (iv) settlement instructions. Settlement instructions will accompany each written confirmation and, on receipt, should be confirmed back to the Joint Brokers by the date and time stated in it. Settlement of transactions in the Placing Shares will take place within the CREST system, subject to certain exceptions, on a "delivery versus payment" (or "DVP") basis. The Joint Brokers reserves the right to require settlement for and/or delivery to any Placee of any Placing Shares to be made by such other means as it may deem appropriate if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement. If your Placing Shares are to be delivered to a custodian or settlement agent, you should ensure that the written confirmation is copied and delivered promptly to the appropriate person within that organisation.

Each Placee's obligations to subscribe and pay for Placing Shares under the Placing will be owed to each of the Company and the Joint Brokers. No commissions will be paid to or by Placees in respect of their agreement to subscribe for any Placing Shares.

Placees' commitments in respect of Placing Shares will be made solely on the basis of the information contained in this Announcement and on the terms contained in it. No admission document for the purposes of the AIM Rules nor any prospectus is required to be published, or has been or will be published, in relation to the Placing or the Placing Shares.

5.           Placing conditions

Under the terms of the Placing Agreement, the Joint Brokers have agreed, as agents for and on behalf of the Company, to use their respective reasonable endeavours to procure Placees for Placing Shares at the Issue Price.

The Placing is conditional on inter alia (i) the Joint Brokers' obligations under the Placing Agreement not being terminated in accordance with their terms, (ii) in the case of the First Placing Shares, First Admission taking place not later than 8.00 a.m. on 3 August 2018 or such later date (being not later than the Long Stop Date) as the Company and the Joint Brokers may agree, (iii) in the case of the Second Placing Shares and the Third Placing Shares, the passing of the Resolution at the General Meeting of the Company, (iv) in the case of the Second Placing Shares, First Admission taking place not later than 8.00 a.m. on 3 August 2018 or such later date (being not later than the Long Stop Date) as the Company and the Joint Brokers may agree and Second Admission taking place not later than 8.00 a.m. on 20 August 2018 or such later date (being not later than the Long Stop Date) as the Company and the Joint Brokers may agree, (v) in the case of the Third Placing Shares and the Subscription Shares, Second Admission taking place not later than 8.00 a.m. on 20 August 2018 or such later date (being not later than the Long Stop Date) as the Company and the Joint Brokers may agree and Third Admission taking place not later than 8.00 a.m. on 21 August 2018 or such later date (being not later than the Long Stop Date) as the Company and the Joint Brokers may agree, and (vi) the Joint Brokers' obligations under the Placing Agreement becoming unconditional in all other respects. The Joint Brokers may extend the time and/or date for the fulfilment of any of the conditions in the Placing Agreement to a time no later than 8.00 a.m. on the Long Stop Date. If any such condition is not fulfilled (and, if capable of waiver under the Placing Agreement, is not waived by the Joint Brokers) by the relevant time, the Placing will lapse and your rights and obligations in respect of the Placing will cease and terminate at such time (save in respect of accrued rights and obligations) and for the avoidance of doubt Admission of the First Placing Shares is not conditional on Admission of the Second Placing Shares or the Third Placing Shares taking place but Admission of the Third Placing Shares is conditional on both the Admission of the First Placing Shares and the Second Placing Shares taking place in accordance with the terms of the Placing Agreement.

finnCap or WG Partners may terminate the Placing Agreement prior to the relevant Admission in certain circumstances including, inter alia, following a material breach of the Placing Agreement by the Company. The exercise of any right of termination pursuant to the Placing Agreement, any waiver of any condition in the Placing Agreement and any decision by the Joint Brokers whether or not to extend the time for satisfaction of any condition in the Placing Agreement are within the Joint Brokers' absolute discretion (as is the exercise of any right or power of the Joint Brokers under the terms of this Appendix). None of the Joint Brokers will have any liability to you or to anyone else in respect of any such termination, waiver or extension or any decision to exercise or not to exercise any such right of termination, waiver or extension.

If the Placing Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in this Announcement shall cease and terminate at such time and no claim can be made by any Placee in respect thereof.

6.           Placees' warranties and undertakings

By communicating a bid to the Joint Brokers under the Bookbuild you will irrevocably acknowledge and confirm and warrant and undertake to, and agree with, each of the Company and the Joint Brokers, in each case as a fundamental term of your application for Placing Shares, that:

(a)          you agree to and accept all the terms set out in this Announcement;

(b)          your rights and obligations in respect of the Placing will terminate only in the circumstances referred to in this Announcement and will not be subject to rescission or termination by you in any circumstances;

(c)          this Announcement, which has been issued by the Company, is within the sole responsibility of the Company;

(d)          you have not been, and will not be, given any warranty or representation in relation to the Placing Shares or to the Company or to any other member of its Group in connection with the Placing, other than by the Company as included in this Announcement or to the effect that the Company is not now in breach of its obligations under the London Stock Exchange's AIM Rules for Companies or under the EU Market Abuse Regulation (596/2014) to disclose publicly in the correct manner all such information as is then required to be so disclosed by the Company;

(e)          you have not relied on any representation or warranty in reaching your decision to subscribe for Placing Shares under the Placing, save as given or made by the Company as referred to in the previous paragraph;

(f)           you are not a client the Joint Brokers in relation to the Placing and finnCap and/or WG Partners and/or Turner Pope are not acting for you in connection with the Placing and will not be responsible to you in respect of the Placing for providing protections afforded to its or their clients;

(g)          you have not been, and will not be, given any warranty or representation by any finnCap Person or WG Partners Person or Turner Pope Person in relation to any Placing Shares, the Company or any other member of its Group and no finnCap Person nor WG Partners Person nor Turner Pope Person will have any liability to you for any information contained in this Announcement, the content of which is exclusively the responsibility of the Company, or which has otherwise been published by the Company or for any decision by you to participate in the Placing based on any such information or on any other information provided to you;

(h)          you will pay the full subscription sum at the Issue Price as and when required in respect of all Placing Shares finally allocated to you and will do all things necessary on your part to ensure that payment for such shares and their delivery to you or at your direction is completed in accordance with the standing CREST instructions (or, where applicable, standing certificated settlement instructions) that you have in place the Joint Brokers or that you put in place the Joint Brokers;

(i)           you are permitted to subscribe for Placing Shares in accordance with the laws of all relevant jurisdictions which apply to you and you have complied, and will fully comply, with all such laws (including where applicable, the Anti-Terrorism, Crime and Security Act 2001, the Proceeds of Crime Act 2002 (as amended) and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations) and have obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such subscription, and you will provide promptly to finnCap or WG Partners or Turner Pope such evidence, if any, as to the identity or location or legal status of any person which finnCap or WG Partners or Turner Pope may request from you (for the purpose of its complying with any such laws or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by finnCap or WG Partners or Turner Pope on the basis that any failure by you to do so may result in the number of Placing Shares that are to be allotted and/or issued to you or at your direction pursuant to the Placing being reduced to such number, or to nil, as finnCap or WG Partners or Turner Pope may decide; 

(j)           you have complied and will comply with all applicable provisions of the Financial Services and Markets Act 2000 (FSMA) with respect to anything done or to be done by you in relation to any Placing Shares in, from or otherwise involving the United Kingdom and you have not made or communicated or caused to be made or communicated, and you will not make or communicate or cause to be made or communicated, any "financial promotion" in relation to Placing Shares in contravention of section 21 of FSMA;

(k)          you are a Relevant Person or a person to whom this Announcement may otherwise be lawfully communicated;

(l)           you are acting as principal only in respect of the Placing or, if you are acting for any other person (i) you are duly authorised to do so, (ii) you are and will remain liable to the Company and/or the Joint Brokers for the performance of all your obligations as a Placee in respect of the Placing (regardless of the fact that you are acting for another person), (iii) you are both an "authorised person" for the purposes of FSMA and a "qualified investor" as defined at Article 2.1(e)(i) of Directive 2003/71/EC (known as the Prospectus Directive) acting as agent for such person, and (iv) such person is either (1) a FSMA Qualified Investor or (2) a "client" (as defined in section 86(2) of FSMA) of yours that has engaged you to act as his agent on terms which enable you to make decisions concerning the Placing or any other offers of transferable securities on his behalf without reference to him;

(m)         nothing has been done or will be done by you in relation to the Placing or to any Placing Shares that has resulted or will result in any person being required to publish a prospectus in relation to the Company or to any Ordinary Shares in accordance with FSMA or the UK Prospectus Rules or in accordance with any other laws applicable in any part of the European Union or the European Economic Area;

(n)          you will not treat any Placing Shares in a manner that would contravene any legislation applicable in any territory or jurisdiction and no aspect of your participation in the Placing will contravene any legislation applicable in any territory or jurisdiction or cause the Company or any of the Joint Brokers to contravene any such legislation;

(o)          (in this paragraph "US person" and other applicable terms have the meanings that they have in Regulation S made under the Securities Act) (i) none of the Placing Shares have been or will be registered under that Act or under the securities laws of any State of or other jurisdiction within the United States, (ii) subject to certain exceptions, no Placing Shares may be offered or sold, resold, or delivered, directly or indirectly, into or within the United States or to, or for the account or benefit of, any US person, (iii) you are (unless otherwise expressly agreed with any of the Joint Brokers) neither within the United States nor a US person, (iv) you have not offered, sold or delivered and will not offer sell or deliver any of the Placing Shares to persons within the United States, directly or indirectly, (v) neither you, your affiliates, nor any persons acting on your behalf, have engaged or will engage in any directed selling efforts with respect to the Placing Shares, (vi) you will not be subscribing Placing Shares with a view to resale in or into the United States, and (vii) you will not distribute this Announcement or any offering material relating to Placing Shares, directly or indirectly, in or into the United States or to any persons resident in the United States;

(p)          the Joint Brokers may satisfy their obligations to procure Placees by themselves agreeing to become Placees in respect of some or all of the Placing Shares or by nominating any other finnCap Person or WG Partners Person or Turner Pope Person or any person associated with any finnCap Person or WG Partners Person or Turner Pope Person to do so or by allowing officers of the Company and/or Group employees to subscribe for Placing Shares under the Placing at the Issue Price;

(q)          time is of essence as regards your obligations under this Appendix;

(r)           this Appendix and any contract which may be entered into between you and the Brokers and/or the Company pursuant to this Appendix or the Placing, and all non-contractual obligations arising between you and the Joint Brokers and/or the Company in respect of the Placing, will be governed by and construed in accordance with the laws of England, for which purpose you submit (for yourself and on behalf of any person on whose behalf you are acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute, or matter arising out of or relating to this Appendix or such contract, except that each of the Company and the Joint Brokers will have the right to bring enforcement proceedings in respect of any judgement obtained against you in the English courts or in the courts of any other relevant jurisdiction;

(s)           each right or remedy of the Company or the Joint Brokers provided for in this Appendix is in addition to any other right or remedy which is available to such person and the exercise of any such right or remedy in whole or in part will not preclude the subsequent exercise of any such right or remedy;

(t)           any document that is to be sent to you in connection with the Placing will be sent at your risk and may be sent to you at any address provided by you to any of the Brokers;

(u)          if you have received any confidential price sensitive information about the Company in advance of the Placing, you have not: (a) dealt in the securities of the Company; (b) encouraged or required another person to deal in the securities of the Company; or (c) disclosed such information to any person, prior to the information being made publicly available;

(v)          you irrevocably appoint any duly authorised officer of finnCap as your agent for the purpose of executing and delivering to the Company and/or its registrars any documents on your behalf necessary to enable you to be registered as the holder of any of the Placing Shares for which you agree to subscribe upon the terms of this Announcement; and

(w)         by participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify and hold the Company, the Joint Brokers and each finnCap Person and WG Partners Person and Turner Pope Person harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings given by the Placee (and any person acting on such Placee's behalf) in this Appendix or incurred by any of the Joint Brokers, any finnCap Person, WG Partners Person, Turner Pope Person or the Company arising from the performance of the Placee's obligations as set out in this Announcement, and further agrees that the provisions of this Appendix shall survive after the completion of the Placing.

7.           Payment default

Your entitlement to receive any Placing Shares will be conditional on finnCap's and/or Turner Pope's receipt of payment in full for such shares by the relevant time to be stated in the written confirmation referred to above, or by such later time and date as finnCap and/or Turner Pope may decide, and otherwise in accordance with that confirmation's terms. finnCap and/or Turner Pope may waive this condition, and will not be liable to you for any decision to waive it or not.

If you fail to make such payment by the required time for any Placing Shares (1) the Company may release itself, and (if it decides to do so) will be released from, all obligations it may have to allot and/or issue any such Placing Shares to you or at your direction which are then unallotted and/or unissued, (2) the Company may exercise all rights of lien, forfeiture and set-off over and in respect of any such Placing Shares to the full extent permitted under its articles of association or by law and to the extent that you then have any interest in or rights in respect of any such shares, (3) the Company or, as applicable, finnCap and/or Turner Pope may sell (and each of them is irrevocably authorised by you to do so) all or any of such shares on your behalf and then retain from the proceeds, for the account and benefit of the Company or, where applicable, finnCap and/or Turner Pope (i) any amount up to the total amount due to it as, or in respect of, subscription monies, or as interest on such monies, for any Placing Shares and (ii) any amount required to cover dealing costs and/or commissions necessarily or reasonably incurred by it in respect of such sale and (4) you will remain liable to the Company and to finnCap and/or Turner Pope for the full amount of any losses and of any costs which it may suffer or incur as a result of it (i) not receiving payment in full for such Placing Shares by the required time, and/or (ii) the sale of any such Placing Shares to any other person at whatever price and on whatever terms are actually obtained for such sale by or for it. Interest may be charged in respect of payments not received by finnCap and/or Turner Pope for value by the required time referred to above at the rate of two percentage points above the base rate of National Westminster Bank plc.

8.           Overseas jurisdictions

The distribution of this Announcement and the offering and/or issue of shares pursuant to the Placing in certain jurisdictions is restricted by law. FSMA Qualified Investors who seek to participate in the Placing must inform themselves about and observe any such restrictions. In particular, this document does not constitute or form part of any offer or invitation, nor a solicitation of any offer or invitation, to subscribe for or acquire or sell or purchase or otherwise deal in Ordinary Shares in the United States, Canada, Japan, the Republic of Ireland, the Republic of South Africa or Australia or in any other jurisdiction in which any such offer, invitation or solicitation is or would be unlawful. New Ordinary Shares have not been and will not be registered under the US Securities Act of 1933, as amended or under the securities laws of any State of or other jurisdiction within the United States, and, subject to certain exceptions, may not be offered or sold, resold or delivered, directly or indirectly, in or into the United States, or to, or for the account or benefit of, any US persons (as defined in Regulation S under that Act). No public offering of New Ordinary Shares is being or will be made in the United States.