Proposed Placing and Change of Adviser

RNS Number : 3453I
React Group PLC
14 April 2022
 

THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE, TRANSMISSION, DISTRIBUTION OR FORWARDING, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE, TRANSMISSION, DISTRIBUTION OR FORWARDING WOULD BE UNLAWFUL (OR TO ANY PERSONS IN ANY OF THOSE JURISDICTIONS). PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO PURCHASE AND/OR SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN REACT GROUP PLC OR ANY OTHER ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION, SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH ANY INVESTMENT DECISION IN RESPECT OF REACT GROUP PLC.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (596/2014/EU) AS THE SAME HAS BEEN RETAINED IN UK LAW AS AMENDED BY THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN UK MAR) WERE TAKEN IN RESPECT OF CERTAIN OF THE MATTERS CONTAINED WITHIN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF INSIDE INFORMATION (AS DEFINED UNDER UK MAR). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, ANY PERSONS WHO RECEIVED INSIDE INFORMATION IN A MARKET SOUNDING ARE NO LONGER IN POSSESSION OF SUCH INSIDE INFORMATION, WHICH IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

14 April 2022

 

REACT Group PLC

("REACT" or the "Company")

 

Proposed Placing

and

Change of Adviser

 

The Board of REACT (AIM: REAT), the leading specialist cleaning, hygiene and decontamination company, today announces a proposed placing of 458,333,332 new ordinary shares (the "Placing Shares") at a price of 1.2 pence per Placing Share (the "Issue Price") to raise gross proceeds of £5.5 million (approximately £5.2 million net of placing related expenses) (the "Placing").

 

Highlights

 

· The net proceeds of the Placing receivable by the Company will be used primarily to strengthen the balance sheet to support the Company's stated acquisition growth strategy and general working capital purposes.

 

· The Placing is being conducted by way of an accelerated bookbuild which will commence immediately following this Announcement (the "Bookbuild").

 

· The Issue Price represents a discount of approximately 32.6 per cent. to the closing mid-market price on 13 April 2022, being the last practicable trading day prior to the release of this Announcement.

 

· The Placing Shares are expected to be admitted to trading on AIM on 6 May 2022 ("Admission").

 

· Singer Capital Markets Securities Limited (" SCM ") is acting as Sole Placing Agent, Bookrunner and Broker in connection with the Placing.

 

· The Placing is conditional, inter alia , upon the approval by Shareholders of certain resolutions required to facilitate the Placing at a general meeting of the Company, which is expected to be convened for 12 noon on 5 May 2022 (the "General Meeting").

 

· The final number of Placing Shares to be placed will be determined by SCM, in consultation with the Company, at the close of the Bookbuild and the result will be announced as soon as practicable thereafter. The timing for the close of the Bookbuild and the allocation of the Placing Shares thereunder, will be determined by SCM in consultation with the Company.

 

· The Placing is not being underwritten (in whole or in part) by SCM or any other person.

 

· Appendix I to this Announcement (which forms part of this Announcement) contains the detailed terms and conditions of the Placing.

 

Further details of the Placing (in particular, the final number of Placing Shares) will be set out in an announcement to be made on the closing of the Bookbuild.

 

Appointment of Nomad and broker

 

Singer Capital Markets Advisory LLP has been appointed as nominated adviser and SCM has been appointed as the sole broker to the Company with immediate effect.

 

Shaun Doak, Chief Executive Officer of REACT, commented :

 

" Since the successful acquisition and integration of Fidelis Contract Services Limited last year, we have developed a solid pipeline of M&A opportunities to help the Group create scale and improve both the quality and visibility of earnings.  The proposed placing to raise £5.5 million underpins this strategy and in particular, provides the certainty of funding essential to acquire the opportunity we refer to as Target A; a well-established and highly attractive business that, should it progress, is expected to be both accretive and earnings enhancing in its first year, and as part of the Group has potential for growth ."

 

Application will be made for the Placing Shares to be admitted to trading on AIM and Admission is expected to take place at 8.00 a.m. on 6 May 2022 (or such later time and/or date as SCM may agree with the Company not being later than 8.00 a.m. on 20 May 2022). In addition to the passing of the Resolutions, the Placing is conditional upon, among other things, Admission becoming effective and the Placing Agreement not being terminated in accordance with its terms.

 

A circular convening the General Meeting (the "Circular") is expected to be posted to Shareholders on or around 19 April 2022. The Circular will provide details of, and the background to, the Placing, set out the reasons why the Board believes that the Placing is in the best interests of the Company and its Shareholders and seek Shareholder approval of the Resolutions to be proposed at the forthcoming General Meeting. 

 

Expected timetable

 

Publication of the Circular

 

19 April 2022

Last time and date for receipt of completed Forms of Proxy and receipt of electronic proxy appointments via the CREST system

 

12 noon on 3 May 2022

General Meeting

 

12 noon on 5 May 2022

Admission and commencement of dealings in the Placing Shares

 

 8.00 a.m. on 6 May 2022

 

Each of the times and dates above refer to London time and are subject to change by the Company. Any such change will be notified to shareholders by an announcement on a Regulatory Information Service.

 

This Announcement should be read in its entirety. In particular, your attention is drawn to the detailed terms and conditions of the Placing and further information relating to the Placing and any participation in the Placing that is described in Appendix I to this Announcement (which forms part of this Announcement).

By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement in its entirety (including the Appendices), and to be making such offer on the terms and subject to the conditions of the Placing contained herein, and to be providing the representations, warranties, indemnities, acknowledgements, agreements, confirmations and undertakings contained in Appendix I.

 

For further information:

 

REACT Group P LC


Shaun Doak, Chief Executive Officer

Andrea Pankhurst, Chief Financial Officer

Mark Braund, Chairman

Tel: +44 (0) 798 222 0001



Singer Capital Markets (Nominated Adviser, Sole Bookrunner and Broker)


Will Goode, Amanda Gray, Oliver Platts

(Investment Banking)

Tel: +44 (0) 20 7496 3000

 

FURTHER INFORMATION

 

Background to and reasons for the Placing

 

REACT carries out specialist contract cleaning work across mainland UK 24/7, 365-days of the year, operating both regular hygiene maintenance programmes and specialist call out work. The Company operates across a diverse range of market sectors from education and the leisure industry, through to transport operators, police forces and the prison service.

In late 2019, the Board was restructured to help drive growth in the business. The Company's strategy is focused on building out the contract maintenance business, both organically and through targeted accretive, earnings enhancing acquisitions which the Board believes, given the recurring nature of the contract maintenance work, should lead to a more predictable business going forward.

In line with the Company's strategy and as previously stated, the Board has continued to look for suitable accretive, earnings enhancing acquisitions of companies in complementary sectors to accelerate growth. The Board believes there is scope for significant expansion within the sizeable and fragmented specialist cleaning market in which it operates. The Board has identified a pipeline of potential acquisition opportunities in line with the Company's acquisition criteria and is currently at varying stages of discussions with each.

 

Acquisition strategy

 

REACT aims to be the leading specialist and contract maintenance cleaning business in the UK, delivering class-leading margins and cash conversion.

In March 2021, the Company acquired Fidelis, a profitable commercial cleaning, hygiene and facility support services company with a wide spread of customers for a total consideration of up to £4.75 million (4.75 times EBITDA) on a cash free, debt free basis. This was REACT's maiden acquisition, which was immediately earnings enhancing, and an important step towards the Company's stated growth strategy. Fidelis operates in complementary sectors with high levels of recurring revenue giving good visibility of future revenue. In the financial year prior to acquisition, approximately 87 per cent. of revenues for Fidelis were recurring in nature with a significant proportion being from contracted maintenance cleaning.

As well as an organic revenue growth strategy, the Board is seeking to identify strategic M&A opportunities, selecting targets against a set of clearly defined criteria. Potential acquisition targets should be in complementary sectors and target EBITDA levels of approximately £1 million, with a focus on large addressable markets with customers where REACT has clear differentiation and access to higher margins. The acquisitions should provide opportunities for the Company to improve the quality of earnings and level of cash conversion, as well as to increase recurring revenue streams through incremental long-term contracts, strengthening of customer relationships and cross-selling.

The Board recognises that the market in which the Group operates is fragmented, and has identified a pipeline of potentially accretive and earnings enhancing acquisition targets in line with the acquisition criteria and long-term growth strategy of the Company.

Potential acquisitions

The Company is currently at varying stages of discussion in relation to a number of potential opportunities which fit the stated acquisition criteria.

Of the potential opportunities, "Target A", a profitable, high margin, cash generative and well established business, is the most advanced potential acquisition. The Company has signed non-binding heads of terms with Target A and certainty of funding is a requirement of the shareholders of Target A.

Target A is an established nationwide commercial cleaning business with a track record of organic revenue growth and profitability. With highly profitable recurring revenues, a high gross margin and conversion rate, Target A offers a scalable and capital light business model with a very low working capital requirement with potential for strong organic growth which the Board believes can be achieved through an increase in sales and marketing, leveraging REACT's existing relationships with FM subcontractors and up-selling and cross-selling opportunities to existing customers. For the financial year 2021, Target A generated revenue of £3.0 million and adjusted EBITDA of £1.2 million.

Target A has a diverse client base across the commercial property, retail, hospitability and leisure and automotive sectors, and a large competitive national ecosystem of 'local' specialist subcontractors which the Board believes gives the sector a high barrier to entry. Customers are attracted to the quality performance of Target A, the rigorous safety standards applied and the suitability to multi-location and nationwide customers.

The Board believes that the acquisition of Target A is aligned with the Group's strategy, as well as being consistent with the Company's stated objectives. The Board expects the total maximum consideration payable for Target A to be £8.5 million, on a debt free cash free basis, with a normalised level of working capital, with initial consideration comprising a majority in cash (both upfront and deferred) and shares in REACT, and a performance related earn out. The Board expects Target A would be earnings enhancing in the first full year.

In connection with the potential acquisitions, the Company has identified the following risks and uncertainties:

· There is no certainty that all or any of the identified potential acquisition opportunities (including the acquisition of Target A) will complete. Aside from Target A, in respect of which the Company has entered into non-binding heads of terms, all other potential acquisitions remain in early-stage discussions and are subject to ongoing due diligence. It may be the case that, as a result of further due diligence findings, the Company decides not to proceed with one or more of the potential acquisition opportunities. Furthermore, the Company may not agree acceptable terms with the potential sellers to complete all or any of the potential acquisitions and, even where an agreement is reached between parties, that agreement may be subject to conditions that may not be satisfied.

· The Placing is not conditional upon the completion of any of the potential acquisition opportunities. If not all of the potential acquisition opportunities complete, the Directors expect to seek further potential opportunities to fulfil the Company's stated acquisition strategy, but there can be no certainty that such opportunities will present themselves and, even if they do, that the Company will be able to complete such acquisitions on acceptable terms.

 

Use of proceeds

 

The net proceeds of the Placing are expected to be approximately £5.2 million and are currently intended to fund targeted acquisition opportunities, in line with the Company's growth strategy, together with the associated transaction and acquisition costs, and to provide additional working capital.

The Board has identified Target A, a profitable, high margin, cash generative and well established cleaning business. Certainty of funding is a requirement of the shareholders of Target A and therefore it is the intention of the Board to use the net proceeds of the placing to acquire Target A. However, should the acquisition of Target A not proceed, the Company will use the net proceeds of the Placing to pursue other strategic M&A opportunities.

 

Details of the Placing and Placing Agreement

 

The Company is proposing to raise gross proceeds of approximately £5.5 million through the Placing of the Placing Shares at the Issue Price to certain new and existing investors. The Placing Shares will represent approximately 90.2 per cent. of the Existing Ordinary Shares and will, when issued, rank pari passu with the Existing Ordinary Shares.

Pursuant to a placing agreement between the Company, SCM Advisory and SCM dated 13 April 2022, Singer Capital Markets has conditionally agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Issue Price. The Placing is not being underwritten by Singer Capital Markets.

The Placing is conditional, inter alia, on:

· the Placing Agreement not having been terminated in accordance with its terms prior to Admission;

· the Resolutions being passed which will provide shareholder authority for the issue by the Company of the Placing Shares for cash on a non-pre-emptive basis; and

· Admission of the Placing Shares becoming effective by no later than 8.00 a.m. on 6 May 2022 or such later time and/or date as the Company and Singer Capital Markets may agree (being no later than 8.00 a.m. on 20 May 2022).

The Placing Agreement contains customary warranties given by the Company to Singer Capital Markets as to matters in relation to, inter alia, the accuracy of information in this announcement and the Group and its business. In addition, the Company has provided a customary indemnity to Singer Capital Markets in respect of liabilities arising out of or in connection with the Placing.

Singer Capital Markets is entitled to terminate the Placing Agreement in certain circumstances prior to Admission, including where any of the warranties are found not to be true or accurate or were misleading in any respect, the breach by the Company of any of its obligations under the Placing Agreement which is material in the context of the Placing, the occurrence of certain force majeure events or a material adverse change affecting, among other things, the business, management, position or prospects (financial, trading or otherwise) or profits of the Company or the Group.

 

Related party transactions

 

Certain Shareholders (being Substantial Shareholders as defined in the AIM Rules) have indicated their intention to subscribe for Placing Shares at the Issue Price. The proposed participation by the Substantial Shareholders would constitute related party transactions under Rule 13 of the AIM Rules. Further details of any participation will be set out in the results announcement.

 

Admission, settlement, dealings and total voting rights

 

The Placing Shares will be issued credited as fully paid and will rank pari passu with the Existing Ordinary Shares. The Placing Shares will not be made available to the public and will not be offered or sold in any jurisdiction where it would be unlawful to do so.

Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that settlement of the Placing Shares and, subject to, inter alia, the passing of the Resolutions at the General Meeting, Admission will occur at 8.00 a.m. on 6 May 2022.

Following Admission, the Enlarged Share Capital will comprise 966,339,358 Ordinary Shares, none of which are held in treasury. Therefore, following Admission, the total number of Ordinary Shares with voting rights in the Company will be 966,339,358, which may be used by Shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

General Meeting

 

The Company announces the calling of the General Meeting to be held at Friars 123, Novotel London Blackfriars, 46 Blackfriars Road, London, SE1 8NZ at 12 noon on 5 May 2022 at which the Resolutions will be proposed, as explained below.

The Resolutions

The Placing is conditional, inter alia, on the passing of both of the Resolutions by Shareholders at the General Meeting. If either of the Resolutions is not passed at the General Meeting, the Placing will not proceed. At the General Meeting, the following inter-conditional resolutions will be proposed:

Resolution 1: Authority to allot Shares

Resolution 1 is an ordinary resolution to grant a new authority and power to the Directors to permit them (i) to allot Ordinary Shares up to an aggregate nominal value of £483,170 and (ii) to allot the Placing Shares pursuant to the Placing as described in this announcement.

Resolution 2: Disapplication of statutory pre-emption rights

Resolution 2, which is a special resolution, is to grant the Directors the authority (i) to allot Ordinary Shares for cash up to an aggregate nominal value of £241,585 on a non pre-emptive basis and (ii) to allot the Placing Shares pursuant to the Placing on a non pre-emptive basis.

Arrangements for the General Meeting

There are currently no UK government restrictions on public gatherings so the Company is proposing to hold a physical General Meeting and to welcome the maximum number of Shareholders possible within safety constraints. However, given the uncertainty around whether Shareholders will be able to attend the General Meeting, whether because their circumstances change or due to a change in the situation with the COVID-19 pandemic, all Shareholders are still strongly encouraged to appoint the Chairman of the General Meeting as their proxy.

Given the constantly evolving nature of the situation, the Company may need to adapt these arrangements to respond to changes in circumstances. On this basis, should the situation change such that it is no longer considered possible for Shareholders to attend the General Meeting, the Company will make information about alternative arrangements available on its website and, where appropriate, make an announcement of the change via a Regulatory Information Service. Any updates to the position will be included on the Company's website at https://www.reactsc.co.uk/react-group-plc .

 

Recommendation

 

The Directors believe the Placing and the passing of the Resolutions to be in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote, or procure the vote, in favour of the Resolutions as all of the Directors intend to do, or procure to be done, in respect of their own beneficial shareholdings amounting to 5,978,458 Ordinary Shares, representing approximately 1.2 per cent. of the Existing Ordinary Shares.

 

IMPORTANT NOTICES

Neither this Announcement, nor any copy of it, nor the information contained in it, is for publication, release, transmission, distribution or forwarding, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction in which publication, release or distribution would be unlawful (or to any persons in any of those jurisdictions). This Announcement is for information purposes only and does not constitute an offer to sell or issue, or the solicitation of an offer to buy, acquire or subscribe for shares in the capital of the Company in the United States, Australia, Canada, Japan or the Republic of South Africa or any other state or jurisdiction in which the same would be unlawful (or to any persons in any of those jurisdictions). This Announcement has not been approved by the London Stock Exchange. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions.

The Placing Shares have not been, and will not be, registered under the Securities Act or with any securities regulatory authority of any state or jurisdiction of the United States or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, pledged, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, in each case, and in compliance with the securities laws of any state or other jurisdiction of the United States. No public offering of securities is being made in the United States. The Placing Shares have not been approved, disapproved or recommended by the U.S. Securities and Exchange Commission, any state securities commission in the United States or any other U.S. regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Placing Shares. Subject to certain exceptions, the securities referred to herein may not be offered or sold in the United States, Australia, Canada, Japan or the Republic of South Africa or to, or for the account or benefit of, any national, resident or citizen of the United States, Australia, Canada, Japan or the Republic of South Africa.

No public offering of the Placing Shares is being made in the United States, the United Kingdom or elsewhere. All offers of the Placing Shares will be made pursuant to an exemption from the requirement to produce a prospectus under the EU Prospectus Regulation and/or the UK Prospectus Regulation.

This Announcement is not being distributed by, nor has it been approved for the purposes of section 21 of FSMA by, a person authorised under FSMA. This Announcement is being distributed and communicated to persons in the United Kingdom only in circumstances in which section 21(1) of FSMA does not apply.

No prospectus has been or will be made available in connection with the matters contained in this Announcement and no such prospectus is required (in accordance with the EU Prospectus Regulation and/or the UK Prospectus Regulation) to be published. Members of the public are not eligible to take part in the Placing. This Announcement (including the terms and conditions contained in this Announcement) is for information purposes only and (unless otherwise agreed by Singer Capital Markets Securities Limited ("SCM")) is directed at and is only distributed to: (a) persons in member states of the EEA who are qualified investors within the meaning of Article 2(e) of the EU Prospectus Regulation ("EEA Qualified Investors"); (b) persons in the United Kingdom who are qualified investors within the meaning of Article 2(e) of the UK Prospectus Regulation, and who (i) have professional experience in matters relating to investments falling within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (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) persons to whom it may otherwise lawfully be communicated (each such persons in (a), (b) and (c) together being referred to as "Relevant Persons"). This Announcement (including the terms and conditions set out in this Announcement) 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 Announcement (including the terms and conditions set out herein) relates is available only to, and will be engaged in only with, Relevant Persons.

This Announcement has been issued by, and is the sole responsibility of, the Company. No responsibility or liability is or will be accepted by, and no undertaking, representation or warranty or other assurance, express or implied, is or will be made or given by SCM, or by any of their respective partners, directors, officers, employees, advisers, consultants or affiliates as to, or in relation to, the accuracy, fairness or completeness of the information or opinions contained in this Announcement or any other written or oral information made available to or publicly available to any interested person or its advisers, and any liability therefore is expressly disclaimed. The information in this Announcement is subject to change.

SCM, which is authorised and regulated in the United Kingdom by the FCA is acting solely for the Company and no-one else in connection with the Placing and the transactions and arrangements described in this Announcement and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing or the transactions and arrangements described in this Announcement. SCM is not responsible to anyone other than the Company for providing the protections afforded to clients of SCM or for providing advice in connection with the contents of this Announcement, the Placing or the transactions and arrangements described herein.

Singer Capital Markets Advisory LLP ("SCM Advisory"), which is authorised and regulated in the United Kingdom by the FCA, is acting as nominated adviser to the Company for the purposes of the AIM Rules and no-one else in connection with the Placing and the transactions and arrangements described in this Announcement and will not be responsible to any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing or the transactions and arrangements described in this Announcement. SCM Advisory is not responsible to anyone other than the Company for providing the protections afforded to clients of SCM Advisory or for providing advice in connection with the contents of this Announcement, the Placing or the transactions and arrangements described herein. SCM Advisory's responsibilities as the Company's nominated adviser under the AIM Rules for Nominated Advisers are owed solely to the London Stock Exchange and are not owed to the Company or to any Director or to any other person.

None of the information in this Announcement has been independently verified or approved by SCM Advisory, SCM or any of their respective partners, directors, officers, employees, advisers, consultants or affiliates. Save for any responsibilities or liabilities, if any, imposed on SCM Advisory or SCM by FSMA or by the regulatory regime established under it, no responsibility or liability whatsoever whether arising in tort, contract or otherwise, is accepted by SCM Advisory, SCM or any of their respective partners, directors, officers, employees, advisers, consultants or affiliates whatsoever for the contents of the information contained in this Announcement (including, but not limited to, any errors, omissions or inaccuracies in the information or any opinions) or for any other statement made or purported to be made by or on behalf of SCM Advisory, SCM or any of their respective partners, directors, officers, employees, advisers, consultants or affiliates in connection with the Company, the Placing Shares or the Placing or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this Announcement or its contents or otherwise in connection with this Announcement or from any acts or omissions of the Company in relation to the Placing. SCM Advisory and SCM and their respective partners, directors, officers, employees, advisers, consultants and affiliates accordingly disclaim all and any responsibility and liability whatsoever, whether arising in tort, contract or otherwise in respect of any statements or other information contained in this Announcement and no representation or warranty, express or implied, is made by SCM Advisory, SCM or any of their respective partners, directors, officers, employees, advisers, consultants or affiliates as to the accuracy, completeness or sufficiency of the information contained in this Announcement.

The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, SCM Advisory, SCM or any of their respective affiliates that would permit an offering of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to the Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company, SCM Advisory and SCM to inform themselves about, and to observe, such restrictions.

Persons distributing this Announcement must satisfy themselves that it is lawful to do so. Persons (including without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement (or any part thereof) should seek appropriate advice before taking any action.

In connection with the Placing, SCM and any of its affiliates, acting as investors for their own account, may take up a portion of the shares in the Placing as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts or otherwise deal for their own account in such shares and other securities of the Company or related investments in connection with the Placing or otherwise. Accordingly, references to Placing Shares being offered, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or acquisition, placing or dealing by, SCM and any of its affiliates acting in such capacity. In addition, SCM and any of its affiliates may enter into financing arrangements (including swaps) with investors in connection with which SCM and any of its affiliates may from time to time acquire, hold or dispose of shares. SCM does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

This Announcement may contain and the Company may make verbal statements containing "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts.  As a result, the actual future financial condition, performance, strategic initiatives, objectives and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. No representation or warranty is made as to the achievement or reasonableness of, and no reliance should be placed on, such forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. These forward-looking statements reflect the Company's judgment at the date of this Announcement and are not intended to give any assurance as to future results of operations and financial condition and the Company cautions that its actual results of operations and financial condition, and the development of the industry in which it operates, may differ materially from those made in or suggested by the forward-looking statements contained in this Announcement and/or information incorporated by reference into this Announcement. The information contained in this Announcement is subject to change without notice and except as required by applicable law or regulation, the Company, its directors, SCM Advisory, SCM, their respective affiliates and any person acting on its or their behalf each expressly disclaims any obligation or undertaking to publish any updates, supplements or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statements are based, except where required to do so under applicable law.

This Announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Placing Shares. Any investment decision to buy Placing Shares in the Placing must be made solely on the basis of publicly available information, which has not been independently verified by SCM Advisory or SCM. This Announcement does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any decision in respect of the Company or other evaluation of any securities of the Company or any other entity and should not be considered as a recommendation that any investor should subscribe for, purchase, otherwise acquire, sell or otherwise dispose of any such securities. Recipients of this Announcement who are considering acquiring Placing Shares pursuant to the Placing are reminded that they should conduct their own investigation, evaluation and analysis of the business, data and property described in this Announcement. The price and value of securities can go down as well as up and past performance is not a guide to future performance, and investors may not get back the full amount invested upon the disposal of such securities. The contents of this Announcement are not to be construed as legal, regulatory, business, financial or tax advice. Each investor or prospective investor should consult with his or her or its own legal adviser, regulatory adviser, business adviser, financial adviser or tax adviser for legal, regulatory, business, financial or tax advice.

No statement in this Announcement is intended to be a profit forecast or estimate, or to be relied upon as a guide to future performance, and no statement in this Announcement should be interpreted to mean that earnings, earnings per share, income, cash flow from operations or free cash flow for the Company for the current or future financial years would necessarily match or exceed the historical published earnings, earnings per share, income, cash flow from operations or free cash flow for the Company. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

References in this Announcement to other reports or materials, such as a website address, have been provided to direct the reader to other sources of information on the Company which may be of interest. Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this Announcement.

The Placing Shares to be issued or sold pursuant to the Placing will not be admitted to trading on any stock exchange other than AIM.

Appendix I to this Announcement (which forms part of this Announcement) sets out the terms and conditions of the Placing and the Bookbuild. Persons who choose to participate in the Placing, by making an oral or written offer to subscribe for Placing Shares, will be deemed to have read and understood this Announcement in its entirety (including the Appendix) and to be making such offer on the terms and subject to the conditions in this Announcement and to be providing the representations, warranties, indemnities, acknowledgements, agreements, confirmations and undertakings contained in Appendix I.

Information to Distributors

The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, SCM or any of their respective affiliates that would permit an offering of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to the Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and SCM to inform themselves about, and to observe, such restrictions.

UK Product Governance Requirements

Solely for the purposes of the product governance requirements contained within Chapter 3 of the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK Product Governance Rules"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK Product Governance Rules) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that such Placing Shares are:  (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in paragraphs 3.5 and 3.6 of the Conduct of Business Sourcebook of the FCA Handbook ("COBS"); and (ii) eligible for distribution through all permitted distribution channels (the "UK Target Market Assessment"). Notwithstanding the UK Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The UK Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the UK Target Market Assessment, SCM will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the UK Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of COBS 9A and COBS 10A, respectively; or (b) a recommendation to any investor or group of investors to invest in, or purchase or take any other action whatsoever with respect to the Placing Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

EU Product Governance Requirements

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "EU Target Market Assessment"). Notwithstanding the EU Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The EU Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the EU Target Market Assessment, SCM will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the EU Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

 

APPENDIX I

 

TERMS AND CONDITIONS OF THE PLACING

 

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY

 

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING.

 

 

THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX I) AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (1) IF IN A MEMBER STATE OF THE EEA QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(E) OF THE EU PROSPECTUS REGULATION; (2) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(E) OF THE UK PROSPECTUS REGULATION AND WHO (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS); OR (B) FALL WITHIN ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; OR (3) OTHERWISE, PERSONS TO WHOM IT IS OTHERWISE LAWFUL TO COMMUNICATE IT (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

 

NEITHER THIS ANNOUNCEMENT NOR THE INFORMATION IN IT SHOULD 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 ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR THE SALE OR SUBSCRIPTION OR A SOLICITATION OF AN OFFER TO BUY OR ACQUIRE OF ANY SECURITIES IN THE COMPANY IN THE UNITED STATES OR ELSEWHERE.

 

THE PLACING SHARES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE SECURITIES ACT OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES OR UNDER ANY SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, RESOLD, PLEDGED, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE, AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY (I) OUTSIDE OF THE UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS AND; (II) IN THE UNITED STATES TO A LIMITED NUMBER OF "QUALIFIED INSTITUTIONAL BUYERS" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT; OR (III) OTHERWISE PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. ANY OFFER OR SALE OF PLACING SHARES IN THE UNITED STATES WILL BE MADE ONLY BY BROKER-DEALERS WHO ARE REGISTERED AS SUCH UNDER THE U.S. EXCHANGE ACT OF 1934, AS AMENDED. THERE WILL BE NO PUBLIC OFFER OF THE SECURITIES MENTIONED HEREIN IN THE UNITED STATES. THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL (THE "RESTRICTED JURISDICTIONS"). NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES, THE UNITED KINGDOM OR ELSEWHERE WHERE SUCH OFFERING WOULD BE UNLAWFUL.

 

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO ANY LEGAL, REGULATORY, BUSINESS, FINANCIAL, TAX AND RELATED ASPECTS OF A PURCHASE OF PLACING SHARES.

 

All offers of the Placing Shares in the United Kingdom or the EEA will be made pursuant to an exemption from the requirement to produce a prospectus under the UK Prospectus Regulation and/or the EU Prospectus Regulation, as appropriate.  In the United Kingdom, this Announcement is being directed solely at persons in circumstances in which section 21(1) of FSMA does not require the approval of the relevant communication by an authorised person.

 

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 from 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 offered 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 EEA.

 

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.

 

This Announcement should be read in its entirety. In particular, any Placee should read and understand the information provided in the "Important Notices" section of this Announcement.

 

By participating in the Bookbuild 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, confirmations and undertakings contained herein.

 

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO ANY LEGAL, REGULATORY, BUSINESS, FINANCIAL, TAX AND RELATED ASPECTS OF A SUBSCRIPTION FOR THE PLACING SHARES.

 

In particular, each such Placee represents, warrants, acknowledges, agrees, confirms and undertakes (amongst other things) that:

1. it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

2.  in the case of a Relevant Person in the United Kingdom who acquires any Placing Shares pursuant to the Placing:

(a)  it is a Qualified Investor within the meaning of Article 2(e) of the UK Prospectus Regulation; and

(b)  in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 5(1) of the UK Prospectus Regulation:

(i)  the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in the United Kingdom other than Qualified Investors or in circumstances in which the prior consent of SCM has been given to the offer or resale; or

(ii)  where Placing Shares have been acquired by it on behalf of persons in the United Kingdom other than Qualified Investors, the offer of those Placing Shares to it is not treated under the UK Prospectus Regulation as having been made to such persons;

3.  in the case of a Relevant Person in a member state of the EEA (each a "Relevant State") who acquires any Placing Shares pursuant to the Placing:

 

(c)  it is a Qualified Investor within the meaning of Article 2(e) of the EU Prospectus Regulation; and

(d)  in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 5(1) of the EU Prospectus Regulation:

(i)  the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in a Relevant State other than Qualified Investors or in circumstances in which the prior consent of SCM has been given to the offer or resale; or

(ii)  where Placing Shares have been acquired by it on behalf of persons in a Relevant State other than Qualified Investors, the offer of those Placing Shares to it is not treated under the EU Prospectus Regulation as having been made to such persons;

4. it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the representations, warranties, indemnities, acknowledgements, agreements, confirmations and undertakings contained herein;

5. it understands (or if acting for the account of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in this Announcement; and

6.  except as otherwise permitted by the Company and subject to any available exemptions from applicable securities laws, it (and any account referred to in paragraph 5 above) is outside the United States acquiring the Placing Shares in offshore transactions as defined in and in accordance with Regulation S under the Securities Act.

 

The Company and SCM will rely upon the truth and accuracy of the foregoing representations, warranties, indemnities, acknowledgements, agreements, confirmations and undertakings. Each Placee hereby agrees with SCM and the Company to be bound by these terms and conditions as being the terms and conditions upon which Placing Shares will be issued. A Placee shall, without limitation, become so bound if SCM confirms to such Placee its allocation of Placing Shares.

 

Upon being notified of its allocation of Placing Shares, a Placee shall be contractually committed to subscribe for the number of Placing Shares allocated to it at the Issue Price and, to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate or otherwise withdraw from such commitment.

 

No prospectus

The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require any prospectus or other offering document to be published. No prospectus or other offering document has been or will be submitted to be approved by the FCA in relation to the Placing or the Placing Shares and Placees' commitments will be made solely on the basis of their own assessment of the Company, the Placing Shares and the Placing based on the information contained in this Announcement and the announcement of the results of the Placing (the "Result of Placing Announcement") (together, the "Placing Documents") and any information publicly announced through a Regulatory Information Service by or on behalf of the Company on or prior to the date of this Announcement (the "Publicly Available Information") and subject to any further terms set forth in the trade confirmation sent to Placees.

 

Each Placee, by participating in the Placing, agrees that the content of the Placing Documents is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any information (other than the Publicly Available Information), representation, warranty or statement made by or on behalf of SCM Advisory, SCM or the Company or any other person and none of SCM Advisory, SCM, the Company nor any other person acting on such person's behalf nor any of their respective affiliates has or shall have any responsibility or liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement (regardless of whether or not such information, representation, warranty or statement was given or made by or on behalf of any such persons). Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing.

 

No Placee should consider any information in this Announcement to be legal, regulatory, business, financial or tax advice. Each Placee should consult its own legal adviser, regulatory adviser, business adviser, financial adviser and tax adviser for legal, regulatory, business, financial and tax advice regarding an investment in the Placing Shares. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

 

Details of the Placing Agreement and the Placing Shares

SCM is acting as sole broker and bookrunner in connection with the Placing and has entered into the Placing Agreement with the Company under which, on the terms and subject to the conditions set out in the Placing Agreement, SCM, as agent for and on behalf of the Company, has agreed to use its reasonable endeavours to procure placees for the Placing Shares. The Placing is not being underwritten by SCM or any other person.

 

The price per Ordinary Share at which the Placing Shares are to be placed is 1.2 pence (the "Issue Price"). The timing of the closing of the book and allocations are at the discretion of the Company and SCM.

 

The Placing Shares will be made up of a number of new Ordinary Shares allotted and issued by the Company. Accordingly, by participating in the Placing, Placees agree to subscribe for Placing Shares.

 

The Placing Shares have been or will be duly authorised and will, when issued, be credited as fully paid up and will be issued subject to the Articles of Association and 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 in respect of the Ordinary Shares after the date of issue of the Placing Shares, and will, on issue, be free of all pre-emption rights, claims, liens, charges, encumbrances and equities.

 

Application for listing and admission to trading

Application will be made to the London Stock Exchange for admission of the Placing Shares to trading on AIM.

 

It is expected that Admission of the Placing Shares will occur at 8.00 a.m. on 6 May 2022 (or such later time or date as Singer Capital Markets may agree with the Company, being no later than 8.00 a.m. on 20  May 2022) and that dealings in the Placing Shares on AIM will commence at that time.

 

Bookbuild

SCM will today commence the accelerated bookbuilding process to determine demand for participation in the Placing by Placees (the "Bookbuild"). This Appendix I gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

 

SCM and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.

 

Participation in, and principal terms of, the Placing

1.  SCM is acting as sole broker and bookrunner to the Placing, as agent for and on behalf of the Company, on the terms and subject to the conditions of the Placing Agreement. SCM Advisory is acting as nominated adviser to the Company in connection with the Placing and Admission. Each of SCM and SCM Advisory are authorised and regulated entities in the United Kingdom by the FCA and are acting exclusively for the Company and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than the Company in relation to the matters described in this Announcement.

 

2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by SCM. SCM may itself agree to be a Placee in respect of all or some of the Placing Shares or may nominate any member of its group to do so.

 

3. Following a successful completion of the Bookbuild, the Company will confirm the closing of the Placing via the Result of Placing Announcement.

 

4. To bid in the Bookbuild, prospective Placees should communicate their bid orally by telephone or in writing to their usual sales contact at SCM. Each bid should state the number of Placing Shares for which the prospective Placee wishes to subscribe at the Issue Price. Bids may be scaled down by SCM on the basis referred to in paragraph 6 below. SCM reserves the right not to accept bids or to accept bids in part rather than in whole. The acceptance of the bids shall be at SCM's absolute discretion, subject to agreement with the Company.

 

5. The Bookbuild is expected to close no later than 4.30 p.m. on 14 April 2022 but may be closed earlier or later at the discretion of SCM. SCM may, in agreement with the Company, accept bids that are received after the Bookbuild has closed. The Company reserves the right (upon the prior agreement of SCM) to vary the number of shares to be issued pursuant to the Placing, in its absolute discretion.

 

6. Allocations of the Placing Shares will be determined by SCM after consultation with the Company (and in accordance with SCM's allocation policy as has been supplied by SCM to the Company in advance of such consultation). Allocations will be confirmed orally by SCM and a trade confirmation will be despatched as soon as possible thereafter. SCM's oral confirmation to such Placee constitutes an irrevocable legally binding commitment upon such person (who will at that point become a Placee), in favour of SCM and the Company, to subscribe for the number of Placing Shares allocated to it and to pay the Issue Price in respect of each such share on the terms and conditions set out in this Appendix I and in accordance with the Articles of Association. A bid in the Bookbuild will be made on the terms and subject to the conditions in this Appendix I and will be legally binding on the Placee on behalf of which it is made and, except with SCM's consent, such commitment will not be capable of variation or revocation after the time at which it is submitted.

 

7. Each Placee's allocation and commitment will be evidenced by a trade confirmation issued to such Placee. The terms of this Appendix I will be deemed incorporated in that trade confirmation.

 

8. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be subscribed for/purchased pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".

 

9. All obligations under the Bookbuild and the Placing will be subject to fulfilment or (where applicable) waiver of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Right to terminate under the Placing Agreement".

 

10. By participating in the Placing, each Placee agrees that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

 

11. To the fullest extent permissible by law, none of SCM Advisory, SCM, the Company nor any of their respective affiliates, agents, directors, officers or employees shall have any responsibility or liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, none of SCM Advisory, SCM, the Company, nor any of their respective affiliates, agents, directors, officers or employees shall have any responsibility or liability (including to the extent permissible by law, any fiduciary duties) in respect of SCM's conduct of the Placing or of such alternative method of effecting the Placing as SCM and the Company may agree.

 

12. The Placing Shares will be issued subject to the terms and conditions of this Appendix I and each Placee's commitment to subscribe for Placing Shares on the terms set out herein will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or SCM's conduct of the Placing.

 

  Conditions of the Placing

The Placing is conditional, amongst others, upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms. SCM's obligations under the Placing Agreement are conditional on customary conditions, including (amongst others) (the "Conditions"):

1. Admission occurring no later than 8.00 a.m. on 6 May 2022 (or such later time or date as SCM may otherwise agree with the Company, being no later than 8.00 a.m. on 20 May 2022 ) (the "Closing Date");

2. the passing of the resolutions required to implement the Placing at a general meeting of the Company;

3. the delivery to SCM immediately prior to Admission of a certificate from and signed by the Company in terms of the warranties being provided by the Company under the Placing Agreement (the "Warranties"); and

4. the Company having complied with its obligations which fall to be performed on or prior to Admission under the Placing Agreement.

 

SCM may, at its discretion and upon such terms as it thinks fit, waive compliance by the Company with the whole or any part of any of its obligations in relation to the Conditions or extend the time or date provided for fulfilment of any such Conditions in respect of all or any part of the performance thereof, save in respect of condition 1 above relating to Admission taking place. Any such extension or waiver will not affect Placees' commitments as set out in this Appendix I.

 

If: (i) any of the Conditions are not fulfilled or (where permitted) waived by Singer Capital Markets by the relevant time or date specified (or such later time or date as Singer Capital Markets may agree with the Company, being no later than 8.00 a.m. on 20 May 2022 ); or (ii) the Placing Agreement is terminated in the circumstances specified below under "Right to terminate under the Placing Agreement", the Placing will not proceed and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by it or on its behalf (or any person on whose behalf the Placee is acting) in respect thereof.

 

Neither SCM nor the Company, nor any of their respective affiliates, agents, directors, officers or employees shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any Condition to the Placing, nor for any decision they may make as to the satisfaction of any Condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of SCM.

 

Right to terminate under the Placing Agreement

SCM is entitled, at any time before Admission, to terminate the Placing Agreement in accordance with its terms in certain circumstances, including (amongst other things):

1.  any statement contained in the Placing Documents is discovered to be untrue or incorrect in any material respect or misleading or that there has been a material omission therefrom;

2.  any of the Warranties was, when given, untrue, inaccurate or misleading or has ceased to be, true, accurate or not misleading (or would not be true, accurate or not misleading if then repeated) by reference to the facts subsisting at the time;

3.  there is a breach by the Company of any of its obligations under the Placing Agreement which is material in the context of the Placing;

4.  any of the Conditions has become incapable of satisfaction and has not been waived;

5.  there has occurred, in SCM's opinion, acting in good faith, a material adverse change (whether or not foreseeable at the date of the Placing Agreement);

6.  a general moratorium on commercial banking activities in London is declared by the relevant authorities or there is a material disruption in commercial banking or securities settlement or clearance services in the United Kingdom;

7.  the declaration, outbreak, escalation or threatening of war or other hostilities, or the occurrence of any acts of terrorism, involving the United Kingdom or the declaration by the United Kingdom of a national emergency;

8.  any change or development involving a prospective change in tax adversely affecting the Company or its prospects or the Placing;

9.  any other occurrence of any kind (other than any change relating to the impact of COVID-19 in the Company's primary markets) which (by itself or together with any other such occurrence) is, in the reasonable opinion of SCM Advisory and/or SCM (acting in good faith),  likely to materially and adversely affect the market's perception of the Company or the financial position or trading position or prospects of the Company; or

10.  any other crisis of international or national effect or any change in any currency exchange rates or controls or in any financial, political, economic or market conditions or in market sentiment or any other calamity or crisis (including a significant worsening of the situation relating to COVID-19 in the United Kingdom) which, in any case, in the reasonable opinion of SCM Advisory and/or SCM (acting in good faith) is materially adverse to the Placing or Admission .

 

Upon termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement, subject to certain exceptions.

 

By participating in the Placing, each Placee agrees that (i) the exercise by SCM of any right of termination or of any other discretion under the Placing Agreement shall be within the absolute discretion of SCM and that it need not make any reference to, or consult with, Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise or failure to so exercise and (ii) its rights and obligations terminate only in the circumstances described above under "Right to terminate under the Placing Agreement" and "Conditions of the Placing", and its participation will not be capable of rescission or termination by it after oral confirmation by SCM of the allocation and commitments following the close of the Bookbuild.

 

 Registration and Settlement

Settlement of transactions in the Placing Shares (ISIN: GB00BZ2JBG28) following Admission will take place within the system administered by Euroclear ("CREST"), subject to certain exceptions. SCM reserves the right to require settlement for, and delivery of, the Placing Shares (or any part thereof) to Placees by such other means that they may deem necessary if delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

 

Following the close of the Bookbuild, each Placee to be allocated Placing Shares in the Placing will be sent a trade confirmation stating the number of Placing Shares allocated to them at the Issue Price, the aggregate amount owed by such Placee to SCM and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions in respect of the Placing Shares that it has in place with SCM.

 

The Company will deliver (or will procure the delivery of) the Placing Shares to a CREST account operated by SCM as agent for the Company and SCM will enter its delivery instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

 

It is expected that settlement in respect of the Placing Shares will take place on 6 May 2022 on a delivery versus payment basis.

 

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above SONIA as determined by SCM.

 

Each Placee is deemed to agree that, if it does not comply with these obligations, SCM may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for SCM's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and will be required to bear any stamp duty or stamp duty reserve tax or other taxes or duties (together with any interest or penalties) imposed in any jurisdiction which may arise upon the sale of such Placing Shares on such Placee's behalf.

 

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are issued in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. If there are any circumstances in which any stamp duty or stamp duty reserve tax or other similar taxes or duties (including any interest and penalties relating thereto) is payable in respect of the allocation, allotment, issue, sale, transfer or delivery of the Placing Shares (or, for the avoidance of doubt, if any stamp duty or stamp duty reserve tax is payable in connection with any subsequent transfer of or agreement to transfer Placing Shares), neither SCM or the Company shall be responsible for payment thereof.

 

Representations, warranties, acknowledgements, agreements, confirmations and undertakings

By participating in the Placing each Placee (and any person acting on such Placee's behalf) irrevocably represents, warrants, acknowledges, agrees, confirms and undertakes (as the case may be) with SCM (in its capacity as bookrunner and placing agent of the Company in respect of the Placing) and the Company, in each case as a fundamental term of their application for Placing Shares, the following:

1. it has read and understood this Announcement in its entirety and its subscription for Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements, confirmations and undertakings and other information contained herein and it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with the Placing, the Company, the Placing Shares or otherwise other than the information contained in the Placing Documents and the Publicly Available Information;

2.  the Ordinary Shares are admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules and MAR, which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;

3. to be bound by the terms of the Articles of Association;

4. the person whom it specifies for registration as holder of the Placing Shares will be: (a) itself; or (b) its nominee, as the case may be. Neither SCM or the Company will be responsible for any liability to stamp duty or stamp duty reserve tax or other similar taxes or duties imposed in any jurisdiction (including interest and penalties relating thereto) ("Indemnified Taxes"). Each Placee and any person acting on behalf of such Placee agrees to indemnify SCM and the Company on an after-tax basis in respect of any Indemnified Taxes;

5. neither SCM Advisory nor SCM nor any of their respective affiliates agents, directors, officers and employees accepts any responsibility for any acts or omissions of the Company or any of the directors of the Company or any other person in connection with the Placing;

6. time is of the essence as regards its obligations under this Appendix I;

7. any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to SCM;

8. it will not redistribute, forward, transfer, duplicate or otherwise transmit this Announcement or any part of it, or any other presentational or other material concerning the Placing (including electronic copies thereof) to any person and represents that it has not redistributed, forwarded, transferred, duplicated, or otherwise transmitted any such documents to any person;

9.  it has not received (and will not receive) a prospectus or other offering document in connection with the Placing and acknowledges that no prospectus or other offering document: (a) is required under the UK Prospectus Regulation, the EU Prospectus Regulation or other applicable law; and (b) has been or will be prepared in connection with the Placing;

10. in connection with the Placing, SCM and any of its affiliates acting as an investor for its own account may subscribe for Placing Shares in the Company and in that capacity may retain, purchase or sell for its own account such Placing Shares and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing. Accordingly, references in this Announcement to the Placing Shares being issued, offered or placed should be read as including any issue, offering or placement of such shares in the Company to SCM or any of its affiliates acting in such capacity;

11. SCM and its affiliates may enter into financing arrangements and swaps with investors in connection with which SCM and any of its affiliates may from time to time acquire, hold or dispose of such securities of the Company, including the Placing Shares;

12. SCM does not intend to disclose the extent of any investment or transactions referred to in paragraphs 10 and 11 above otherwise than in accordance with any legal or regulatory obligation to do so;

13. neither SCM Advisory nor SCM owes any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement;

14. its participation in the Placing is on the basis that it is not and will not be a client of SCM in connection with its participation in the Placing and that SCM has no duties or responsibilities to it for providing the protections afforded to its clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

15. the content of the Placing Documents and the Publicly Available Information has been prepared by and is exclusively the responsibility of the Company (and such other persons specifically identified as accepting responsibility to certain parts thereto) and neither SCM Advisory nor SCM nor any of their respective affiliates, agents, directors, officers or employees nor any person acting on behalf of any of them is responsible for or has or shall have any responsibility or liability for any information, representation or statement contained in, or omission from, the Placing Documents, the Publicly Available Information or otherwise nor will they be liable for any Placee's decision to participate in the Placing based on any information, representation, warranty or statement contained in the Placing Documents, the Publicly Available Information or otherwise, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by such person;

16. the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for Placing Shares is contained in the Placing Documents or any Publicly Available Information (save that in the case of Publicly Available Information, a Placee's right to rely on that information is limited to the right that such Placee would have as a matter of law in the absence of this paragraph 16), such information being all that such Placee deems necessary or appropriate and sufficient to make an investment decision in respect of the Placing Shares;

17. it has neither received nor relied on any other information given, or representations, warranties or statements, express or implied, made, by SCM Advisory, SCM or the Company or any of their respective affiliates, agents, directors, officers or employees acting on behalf of any of them (including in any management presentation delivered in respect of the Bookbuild) with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of any information contained in the Placing Documents, or the Publicly Available Information or otherwise;

18. neither SCM Advisory nor SCM nor the Company nor any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of any of them has provided, nor will provide, it with any material or information regarding the Placing Shares or the Company or any other person other than the information in the Placing Documents or the Publicly Available Information; nor has it requested any of SCM Advisory or SCM or the Company or any of their respective affiliates or any person acting on behalf of any of them to provide it with any such material or information;

19. neither SCM Advisory nor SCM nor the Company will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

20. it may not rely, and has not relied, on any investigation that SCM Advisory, SCM, any of their respective affiliates or any person acting on its behalf, may have conducted with respect to the Placing Shares, the terms of the Placing or the Company, and none of such persons has made any representation, express or implied, with respect to the Company, the Placing, the Placing Shares or the accuracy, completeness or adequacy of the information in the Placing Documents, the Publicly Available Information or any other information;

21. in making any decision to subscribe for Placing Shares it:

(a) has such knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of subscribing for the Placing Shares;

(b) will not look to SCM Advisory or SCM for all or part of any such loss it may suffer;

(c) is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of an investment in the Placing Shares;

(d) is able to sustain a complete loss of an investment in the Placing Shares;

(e) has no need for liquidity with respect to its investment in the Placing Shares;

(f) has made its own assessment and has satisfied itself concerning the relevant tax, legal, currency and other economic considerations relevant to its investment in the Placing Shares; and

(g) has conducted its own due diligence, examination, investigation and assessment of the Company and the Group, the Placing Shares and the terms of the Placing and has satisfied itself that the information resulting from such investigation is still current and relied on that investigation for the purposes of its decision to participate in the Placing;

22. it is subscribing for the Placing Shares for its own account or for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the representations, warranties, acknowledgements, agreements, confirmations and undertakings contained in this Appendix I;

23. it is acting as principal only in respect of the Placing or, if it is acting for any other person, it is:

(a) duly authorised to do so and has full power to make the representations, warranties, acknowledgements, agreements, confirmations and undertakings herein on behalf of each such person; and

(b) will remain liable to the Company and/or SCM for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person);

24. it and any person acting on its behalf is entitled to subscribe for the Placing Shares under the laws and regulations of all relevant jurisdictions that apply to it and that it has fully observed such laws and regulations, has capacity and authority and is entitled to enter into and perform its obligations as a subscriber of Placing Shares and will honour such obligations, and has obtained all such governmental and other guarantees, permits, authorisations, approvals and consents which may be required thereunder and complied with all necessary formalities to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix I) and will honour such obligations and that it has not taken any action or omitted to take any action which will or may result in SCM Advisory, SCM or the Company or any of their respective directors, officers, agents, employees or advisers acting in breach of the legal or regulatory requirements of any jurisdiction in connection with the Placing;

25. where it is subscribing for Placing Shares for one or more managed accounts, it is authorised in writing by each managed account to subscribe for the Placing Shares for each managed account;

26. it irrevocably appoints any duly authorised officer of SCM as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares for which it agrees to subscribe for upon the terms of this Appendix I;

27. the Placing Shares have not been and will not be registered or otherwise qualified and that a prospectus will not be cleared in respect of any of the Placing Shares under the securities laws or legislation of the Restricted Jurisdictions, or any state, province, territory or jurisdiction thereof;

28. the Placing Shares may not be offered, sold, or delivered, directly or indirectly, in or into the Restricted Jurisdictions or any jurisdiction (subject to certain exceptions) in which it would be unlawful to do so and no action has been or will be taken by any of the Company or SCM Advisory or SCM or any person acting on behalf of the Company or SCM Advisory or SCM that would, or is intended to, permit a public offer of the Placing Shares in the Restricted Jurisdictions or any country or jurisdiction, or any state, province, territory or jurisdiction thereof, where any such action for that purpose is required;

29. no action has been or will be taken by any of the Company or SCM Advisory or SCM or any person acting on behalf of the Company or SCM Advisory or SCM that would, or is intended to, permit a public offer of the Placing Shares in the United States or in any country or jurisdiction where any such action for that purpose is required;

30. unless otherwise specifically agreed with SCM, it is not and at the time the Placing Shares are subscribed for, neither it nor the beneficial owner of the Placing Shares will be, a resident of, nor have an address in, Australia, Japan, the Republic of South Africa or any province or territory of Canada;

31. it may be asked to disclose in writing or orally to SCM:

(a) if he or she is an individual, his or her nationality; or

(b) if he or she is a discretionary fund manager, the jurisdiction in which the funds are managed or owned;

32. it is and the prospective beneficial owner of the Placing Shares is, and at the time the Placing Shares are subscribed for will be outside the United States and is acquiring the Placing Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S under the Securities Act;

33. it has not been offered to purchase or subscribe for Placing Shares by means of any "directed selling efforts" as defined in Regulation S under the Securities Act or by means of any "general solicitation" or "general advertising" within the meaning of Regulation D under the Securities Act;

34. it understands that the Placing Shares have not been, and will not be, registered under the Securities Act and may not be offered, sold or resold, pledged or delivered in or into or from the United States except pursuant to: (i) an effective registration statement under the Securities Act; or (ii) pursuant to an exemption from the registration requirements of the Securities Act and, in each case, in accordance with applicable United States state securities laws and regulations;

35. it (and any account for which it is purchasing) is not acquiring the Placing Shares with a view to any offer, sale or distribution thereof within the meaning of the Securities Act;

36. it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it, or any other presentational or other materials concerning the Placing in or into or from the United States (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;

37. it understands that there may be certain consequences under United States and other tax laws resulting from an investment in the Placing and it has made such investigation and has consulted its own independent advisers or otherwise has satisfied itself concerning, without limitation, the effects of United States federal, state and local income tax laws and foreign tax laws generally;

38. it understands that the Company has not undertaken to determine whether it will be treated as a passive foreign investment company ("PFIC") for US federal income tax purposes for the current year, or whether it is likely to be so treated for future years and neither the Company nor SCM Advisory nor SCM make any representation or warranty with respect to the same. Accordingly, neither the Company nor SCM Advisory nor SCM can provide any advice to United States investors as to whether the Company is or is not a PFIC for the current tax year, or whether it will be in future tax years. Accordingly, neither the Company nor SCM Advisory nor SCM undertakes to provide to United States investors or shareholders any information necessary or desirable to facilitate their filing of annual information returns, and United States investors and shareholders should not assume that this information will be made available to them;

39.  if it is within the United Kingdom, it is a Qualified Investor as defined in Article 2(e) of the UK Prospectus Regulation and if it is within a Relevant State, it is a Qualified Investor as defined in Article 2(e) of the EU Prospectus Regulation;

40. it has not offered or sold and will not offer or sell any Placing Shares to persons in the EEA except to Qualified Investors or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the EEA within the meaning of the EU Prospectus Regulation;

40. it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom except to Qualified Investors or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in the United Kingdom within the meaning of the UK Prospectus Regulation;

41.  if it is a financial intermediary, as that term is used in Article 5(1) of the UK Prospectus Regulation, the Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in the United Kingdom other than Qualified Investors, or in circumstances in which the express prior written consent of SCM has been given to each proposed offer or resale;

42. if in the United Kingdom, that it is a person: (i) having professional experience in matters relating to investments who falls within the definition of "investment professionals" in Article 19(5) of the Order or (ii) who falls within Article 49(2) (a) to (d) ("High Net Worth Companies, Unincorporated Associations, etc") of the Order, or (iii) to whom it may otherwise lawfully be communicated;

43.  if in the United Kingdom, unless otherwise agreed by SCM, it is a "professional client" or an "eligible counterparty" within the meaning of Chapter 3 of COBS and it is purchasing Placing Shares for investment only and not with a view to resale or distribution;

44. it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of FSMA;

45. it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person and it acknowledges and agrees that the Placing Documents have not and will not have been approved by SCM Advisory or SCM in its capacity as an authorised person under section 21 of FSMA and it may not therefore be subject to the controls which would apply if it was made or approved as a financial promotion by an authorised person;

46. it has complied and will comply with all applicable laws with respect to anything done by it or on its behalf in relation to the Placing Shares (including all applicable provisions in FSMA and MAR) in respect of anything done in, from or otherwise involving, the United Kingdom;

47. if it is a pension fund or investment company, its subscription for/purchase of Placing Shares is in full compliance with applicable laws and regulations;

48. it has complied with its obligations under the Criminal Justice Act 1993 and Articles 8, 10 and 12 of MAR and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and any related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof (the "Regulations") and the Money Laundering Sourcebook of the FCA and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

49. in order to ensure compliance with the Regulations, SCM (for itself and as agent on behalf of the Company) or the Company's registrars may, in their absolute discretion, require verification of its identity. Pending the provision to SCM or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at SCM's absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed at SCM's or the Company's registrars', as the case may be, absolute discretion. If within a reasonable time after a request for verification of identify SCM (for itself and as agent on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, either SCM and/or the Company may, at its absolute discretion, terminate its commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;

50. the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a stamp duty or stamp duty reserve tax liability under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer Placing Shares into a clearance service;

51. it (and any person acting on its behalf) has the funds available to pay for the Placing Shares for which it has agreed to subscribe and acknowledges and agrees that it will make payment in respect of the Placing Shares allocated to it in accordance with this Appendix I on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as SCM may in its sole discretion determine and without liability to such Placee, who will remain liable for any amount by which the net proceeds of such sale falls short of the product of the relevant Issue Price and the number of Placing Shares allocated to it and will be required to bear any stamp duty, stamp duty reserve tax or other taxes or duties (together with any interest, fines or penalties) imposed in any jurisdiction which may arise upon the sale of such Placee's Placing Shares;

52. any money held in an account with SCM on behalf of the Placee and/or any person acting on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the relevant rules and regulations of the FCA made under FSMA. Each Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence this money will not be segregated from SCM's money in accordance with the client money rules and will be held by it under a banking relationship and not as trustee;

53. its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that SCM or the Company may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;

54. neither SCM nor any of its affiliates, nor any person acting on behalf of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and SCM is not acting for it or its clients, and that SCM will not be responsible for providing the protections afforded to customers of SCM or for providing advice in respect of the transactions described in this Announcement;

55.  it acknowledges that its commitment to acquire Placing Shares on the terms set out in this Announcement and in the trade confirmation, contract note or other (oral or written) confirmation will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or SCM's conduct of the Placing;

56. if it has received any 'inside information' (for the purposes of MAR and section 56 of the Criminal Justice Act 1993) in relation to the Company and its securities in advance of the Placing, it confirms that it has received such information within the market soundings regime provided for in Article 11 of MAR and associated delegated regulations and it has not:

(a) used that inside information to acquire or dispose of securities of the Company or financial instruments related thereto or cancel or amend an order concerning the Company's securities or any such financial instruments;

(b) used that inside information to encourage, require, recommend or induce another person to deal in the securities of the Company or financial instruments related thereto or to cancel or amend an order concerning the Company's securities or such financial instruments; or

(c) disclosed such information to any person, prior to the information being made publicly available;

57. the rights and remedies of the Company and SCM under the terms and conditions in this Appendix I are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others; and

58. these terms and conditions of the Placing and any agreements entered into by it pursuant to the terms and conditions of the Placing, and all non-contractual or other obligations arising out of or in connection with them, shall be governed by and construed in accordance with the laws of England and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract (including any dispute regarding the existence, validity or termination of such contract or relating to any non- contractual or other obligation arising out of or in connection with such contract), except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by either the Company or SCM in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.

 

The foregoing representations, warranties, acknowledgements, agreements, confirmations and undertakings are given for the benefit of the Company as well as SCM and are irrevocable. SCM and the Company and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements, agreements, confirmations and undertakings.

 

Each prospective Placee, and any person acting on behalf of such Placee, irrevocably authorises the Company and SCM to produce this Announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein.

 

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify on an after tax basis and hold the Company, SCM and their respective affiliates, agents, directors, officers and employees 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, confirmations and undertakings given by the Placee (and any person acting on such Placee's behalf) in this Appendix I or incurred by SCM, the Company or any of their respective affiliates, agents, directors, officers or employees arising from the performance of the Placees' obligations as set out in this Announcement, and further agrees that the provisions of this Appendix I shall survive after completion of the Placing.

 

No statement in the Placing Documents is intended to be a profit forecast or estimate, or to be relied upon as a guide to future performance, and no statement in the Placing Documents should be interpreted to mean that earnings, earnings per share or income, cash flow from operations or free cash flow for the Company for the current or future financial years would necessarily match or exceed the historical published earnings, earnings per share, income, cash flow from operations or free cash flow for the Company. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

   The Placing Shares will not be admitted to trading on any stock exchange other than AIM, a market operated by the London Stock Exchange.

 

SCM is authorised and regulated by the FCA in the United Kingdom and is acting as sole broker and bookrunner exclusively for the Company and no one else in connection with the Placing and will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other matters referred to in this Announcement.

 

Taxation

The agreement to allot and issue certain of the Placing Shares by the Company to Placees (and/or to persons for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct from the Company for the Placing Shares in question.

 

There should be no liability to stamp duty or SDRT arising on the allotment of the Placing Shares by the Company. The registration of and the issue of definitive share certificates to holders of Ordinary Shares should not give rise to any liability to stamp duty or SDRT.

 

In addition, neither UK stamp duty nor SDRT should arise on the transfers/sale of Ordinary Shares on AIM (including instruments transferring Shares and agreements to transfer Ordinary Shares).

 

Such agreement also assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other dealings in the Placing Shares, stamp duty or stamp duty reserve tax or other similar taxes or duties may be payable, for which neither the Company nor SCM will be responsible and the Placees shall indemnify the Company and SCM on an after-tax basis for any stamp duty or stamp duty reserve tax or other similar taxes or duties (together with interest, fines and penalties) in any jurisdiction paid by the Company or SCM in respect of any such arrangements or dealings. If this is the case, each Placee should seek its own advice and notify SCM accordingly. Placees are advised to consult with their own advisers regarding the tax aspects of the subscription for Placing Shares.

 

The Company and SCM are not liable to bear any taxes that arise on a sale of Placing Shares subsequent to their acquisition by Placees, including any taxes arising otherwise than under the laws of any country in the EEA. Each prospective Placee should, therefore, take its own advice as to whether any such tax liability arises and notify SCM and the Company accordingly. Furthermore, each prospective Placee agrees to indemnify on an after-tax basis and hold SCM and/or the Company and their respective affiliates harmless from any and all interest, fines or penalties in relation to stamp duty, stamp duty reserve tax and all other similar duties or taxes in any jurisdiction to the extent that such interest, fines or penalties arise from the unreasonable default or delay of that Placee or its agent.

 

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable, whether inside or outside the UK, by them or any other person on the subscription, acquisition, transfer or sale by them of any Placing Shares or the agreement by them to subscribe for, acquire, transfer or sell any Placing Shares.

 

APPENDIX II

 

DEFINITIONS

 

The following definitions apply throughout this announcement unless the context requires otherwise:

"Act"

the Companies Act 2006

"Admission"

admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules

"AIM"

AIM, a market operated by the London Stock Exchange

"AIM Rules"

the rules for AIM companies published by the London Stock Exchange, as amended or re-issued from time to time

"Board" or "Directors"

the directors of the Company

"Broker" , "Bookrunner" or "SCM"

Singer Capital Markets Securities Limited

"certificated" or "in certificated form"

the description of a share or other security which is not in uncertificated form (that is, not in CREST)

"Company" or "REACT"

REACT Group PLC, a company incorporated and registered in England and Wales with company number 5454010 and having its registered office at 115 Hearthcote Road, Swadlincote DE11 9DU

"CREST"

the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as also defined in the CREST Regulations)

"CREST Regulations"

the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) (as amended from time to time)

"Enlarged Share Capital"

the enlarged share capital of the Company following Admission, comprising the Existing Ordinary Shares and the New Ordinary Shares

"Euroclear"

Euroclear UK and International Limited

"Existing Ordinary Shares"

the Ordinary Shares in issue as at the date of this announcement

"FCA"

the United Kingdom Financial Conduct Authority

"Fidelis"

Fidelis Contract Services Ltd, a company incorporated and registered in England and Wales with company number 07682858 and having its registered office at 115 Hearthcote Road, Swadlincote DE11 9DU, a member of the Group

"Form of Proxy"

the form of proxy accompanying the Circular for use by Shareholders in connection with the General Meeting

"FSMA"

the UK Financial Services and Markets Act 2000 (as amended) including any regulations made pursuant thereto

"General Meeting"

the general meeting of the Company which will be convened for 12 noon on 5 May 2022, notice of which will be set out in Part 2 of the Circular

"Group"

the Company and its subsidiaries

"Issue Price"

1.2 pence per New Ordinary Share

"London Stock Exchange"

the London Stock Exchange plc

"New Ordinary Shares"

the Placing Shares

"Nominated Adviser" or "SCM Advisory"

Singer Capital Markets Advisory LLP, the Company's nominated adviser

"Notice of General Meeting"

the notice convening the General Meeting to be set out in Part 2 of the Circular

"Official List"

the official list of the FCA

"Ordinary Shares"

ordinary shares in the share capital of the Company each with a par value of 0.25 pence

"Placing"

the conditional placing of the Placing Shares at the Issue Price pursuant to the Placing Agreement

"Placing Agreement"

the conditional agreement dated 13 April 2022 between the Company, SCM Advisory and SCM relating to the Placing

"Placing Shares"

the 458,333,332 new Ordinary Shares to be issued pursuant to the Placing at the Issue Price

"Prospectus Rules"

the prospectus rules made by the FCA pursuant to section 73A of the FSMA

"Registrars"

Neville Registrars Limited, Neville House, Steelpark Road, Halesowen B62 8HD

"Regulatory Information Service"

any information service authorised from time to time by the FCA for the purpose of disseminating regulatory announcements

"Resolutions"

the resolutions set out in the Notice of General Meeting

"Securities Act"

the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder

"Shareholders"

holders of the Ordinary Shares from time to time

"Singer Capital Markets"

the Nominated Adviser and/or Broker and Bookrunner, as the context requires

"Target A"

a potential acquisition target for the Group, further details of which are set out in this announcement

"uncertificated " or "uncertificated form"

recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which may be transferred by way of CREST

"United Kingdom" or "UK"

the United Kingdom of Great Britain and Northern Ireland

 

 

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