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Greenchip Investment (XEN)

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Friday 23 December, 2005

Greenchip Investment


Greenchip Investments PLC
23 December 2005

                           GREENCHIP INVESTMENTS PLC
                         ("Greenchip" or the "Company")


PROPOSED ACQUISITION OF lipoxen Technologies limited, Placing of 28,000,000 new
   ordinary shares of 0.5p each, fully paid at 13.5p per new ordinary share,

Number of existing ordinary shares of Greenchip ("Ordinary Shares") in                          8,300,000

Number of new Ordinary  Shares to be issued in connection with the                             66,666,665
acquisition of Lipoxen ("Consideration Shares")

Number of New Ordinary Shares to be issued in connection with the                              28,000,000

Aggregate share capital of the Company as enlarged by the acquisition of                      102,966,665
Lipoxen ("Acquisition") and the Placing

Consideration Shares as a percentage of the enlarged issued share                                  64.75%
capital of the Company on admission to AIM ("Admission")

Market capitalisation of Greenchip (to be renamed Lipoxen plc) at the                       £13.9 million
placing price of 13.5p ("Placing Price)


Latest time and date for receipt of forms of proxy for the Extraordinary          10am on 14 January 2006
General Meeting of Greenchip ("EGM")

Extraordinary General Meeting                                                     10am on 16 January 2006

Admission and dealings commence in the Enlarged Issued Share Capital on          17 January 2006


The Company is pleased to announce that it has conditionally agreed to acquire
the entire issued share capital of Lipoxen Technologies Limited ("Lipoxen") for
a consideration to be satisfied by the issue of 66,666,665 million new Ordinary
Shares to the shareholders of Lipoxen ("Vendors"). The Consideration Shares are
to be issued on the following basis:

      1.3565787  Greenchip Consideration Shares for every 1 Lipoxen
                 ordinary share held

The Consideration Shares represent approximately 64.75 per cent. of issued
Ordinary Share capital of the Company as enlarged by the Acquisition and the
Placing and values Greenchip at approximately £13.9 million based on the placing
price of 13.5p.

Lipoxen is a company engaged in the development of drug delivery systems and
proprietary products in the fields protein drugs, vaccines and oncology.
Lipoxen is exploiting its proprietary delivery technologies to create a new
generation of drug and vaccine products with improved performance.  In
pre-clinical studies for protein drug delivery, Lipoxen's PolyXen technology has
shown to impart protection from degradation and improve active lifetime in
circulation.  In pre-clinical studies relating to vaccine delivery, Lipoxen's
ImuXen technology is being used to develop products that have shown increased
immune responses and protection against infection.  In pre-clinical studies for
oncology drug delivery , Lipoxen's VesicAll technology is being used to develop
products with reduced toxicity and greater convenience of use. Lipoxen is
engaged in the out-licensing of these technologies to biopharmaceutical
companies that have strong manufacturing and marketing capabilities.  These
companies are incorporating Lipoxen's technologies into human theraputic product
candidates.  Lipoxen's market strategy is to focus on product development, in
collaboration with major biotech  and pharmaceutical company partners, for the
protein, vaccine and oncology drug markets.

Lipoxen has developed two platforms delivery technologies which it is applying
to product candidates:

PolyXen is a technology that uses the natural polymer polysialic acid (PSA) that
has the potential to prolong the active life  and improve the performance of
therapeutic proteins and peptides in man.  PolyXen may be considered an
alternative solution to PEGylation (currently the most widely used protein
delivery solution) because of expected benefits of reduced toxicity and
preserved activity of protein drugs made with PolyXen.  Polysialic acid is a
natural polymer and, when linked to protein drugs increases their active life in
circulation and prevents them from being recognised by immune systems, which is
a particular problem for existing protein drugs.

ImuXen is a group of novel liposomal technologies designed to increase the
effectiveness of DNA, protein and polysaccharide vaccines.  ImuXen has the
potential to achieve protective immunity in a single dose which otherwise
requires multiple doses with conventional vaccine materials.

On Admission, Malcolm Burne will step down from the board and Colin Hill will
take a new role as non-executive director of the enlarged group.  Dr Giap Wang
Chong will remain on the board.  The following directors will also join the
board (collectively, the "Proposed Directors"): Sir Brian Richards (who will
assume the role of non-executive chairman), Scott Maguire (chief executive
officer), Professor  Gregory Gregoriadis (currently chief scientific officer and
founder of Lipoxen), Dr Dimitry Genkin and Dr Tatiana Zhuravskaya.

By reason of the size and the relative value of Lipoxen, the Acquisition is a
reverse takeover under Rule 14 of the AIM Rules. Furthermore, the transaction
gives rise to certain considerations under The City Code of Takeovers and
Mergers ("City Code") such that each aspect of the Acquisition requires the
approval of Greenchip's shareholders ("Shareholders"). The Company has posted
today to Shareholders a document setting out the background  to and reasons for
the Acquisition and to recommend that Shareholders vote in favour of each of the
resolutions to be proposed at the Extraordinary General Meeting of the Company
to be held on Monday 16 January 2006 ("EGM").

Details of the Placing and use of Proceeds

Concurrently with the Acquisition, the Company is seeking also to raise
approximately £3.78 million (before expenses) by way of a placing of new
Ordinary Shares at a price of 13.5p per share ("Placing Shares").  Canaccord
Capital (Europe) Limited ("Canaccord") has agreed, pursuant to a placing
agreement entered into with the Company, the current Directors and the Proposed
Directors and conditional, inter alia, upon Admission, to use its reasonable
endeavours to place the Placing Shares at the placing price with investors. The
Placing is not being underwritten.

The Placing Shares were created under the Companies Act 1985 (as amended)
("Act"), will be issued credited as fully paid and will, when issued rank in
full for all dividends and other distributions declared, paid or made on the
Ordinary Shares after Admission.

The Placing Shares can be held in both certificated or uncertificated form.  The
ISIN number for the shares in the Company is GB00B08NWV55.  All documents sent
by or to a Placee, or at his/her direction, will be sent through the post at the
Placee's risk.  Pending the despatch of definitive share certificates,
instruments of transfer will be certified against the register of members of the
Company.  No temporary documents of title will be issued.

The net proceeds of the Placing will be used to:

          •    employ senior management on a full time basis;
          •    hire a full time chief financial officer;

          •    fund on-going operation;

          •    acquire necessary laboratory equipment;

          •    hire  a regulatory consultant  to supervise
               numerous clinical initiatives; and

          •    drive the product candidates through preclinical trials.

Admission to AIM and Dealings

Application will be made for the Enlarged Issued Share Capital of the Company to
be admitted to trading on AIM and it is anticipated that Admission will become
effective and that trading in the Enlarged Issued Share Capital on AIM will
commence on the first trading day following the EGM, namely 17 January 2006.

Information on Lipoxen

Lipoxen was founded in 1997 as a spin out from The School of Pharmacy,
University of London to exploit and commercialise research in the expanding area
of drug and vaccine delivery systems. This research was carried out over 27
years by Lipoxen's founder Professor Gregory Gregoriadis at the Medical Research
Council and the School of Pharmacy, University of London where he was Head of
the Centre for Drug Delivery Research between 1990 and 2001. Lipoxen began
operations in November 1998, following a seed financing which enabled it to
staff the laboratory and management office.

Lipoxen has funded its operations to date by way of fund raisings from,
primarily, high net worth individuals.  FDS Pharma Ass ("FDS") has been the
primary provider of capital from 2002 to the present day, of which Dr Dmitry
Genkin, a former post doctoral scholar of Professor Gregoriadis, is one of the
joint beneficial owners.

Background to and reasons for the Acquisition

In the Company's circular to Shareholders dated 20 October 2000 applying for
admission to trading on AIM, the stated principal goal and investment strategy
of the Company was to bring into European markets, technology-driven business
ventures, with a particular focus on life science, environmental technology and
internet related technologies. In response to the changes to the AIM Rules
relating to investment strategies, at the Extraordinary General Meeting held on
2 June 2005, the Company's new investment strategy was fully reaffirmed by
Shareholders. One of the main features of the strategy was to seek to invest in
a company (or companies) whose business was in the natural resources, financial
or healthcare sectors. Investee companies were likely to be located in the UK,
the Eurozone, Australasia and/or North America and there was a clear preference
to find a single primary investment in one of the sectors outlined above.  As
stated in the Chairman's Statement in the accounts for the eighteen-month period
ended 30 June 2005,  while the Company had no operational activity during that
period, the Directors have continuously sought out a suitable transaction to
utilise its status as a listed-shell following the earlier disposal of all of
its operating assets in 2003. Regrettably, although many opportunities were
investigated, none progressed to the point where a transaction could be put to

However, the Directors believe that in Lipoxen they have identified an
acquisition opportunity that satisfies their investment criteria and provides
significant prospects to grow shareholder value.

Principal terms of the Acquisition

The consideration for the acquisition of the entire issued share capital of
Lipoxen will be the allotment and issue by the Company of the Consideration
Shares to Lipoxen's current shareholders. The Consideration Shares will rank
pari passu in all respects with the existing Ordinary Shares. Lipoxen has 32
shareholders and, as at the date of this document shareholders in Lipoxen
holding 91.16 per cent. of the entire issued share capital of Lipoxen have
entered into acquisition agreements to sell their ordinary shares in Lipoxen to
the Company conditional upon approval by Shareholders at the EGM and admission
of the Consideration Shares to trading on AIM. As at the date of this
announcement, shareholders holding ordinary shares in Lipoxen representing 8.84
per cent. of the entire issued share capital of Lipoxen have yet to execute an
acquisition agreement for the sale of their shares.

The Company will have the option to exercise its right under section 429 of the
Act to compulsorily acquire the remaining 8.84 per cent of the entire issued
share capital of Lipoxen.

Since FDS is the major shareholder of Lipoxen, holding approximately 68.77 per
cent. of the entire issued share capital of Lipoxen it has entered into a
warranty deed (conditional upon, inter alia, Admission) with Greenchip pursuant
to which FDS has provided Greenchip with warranties and certain indemnities in
relation to Lipoxen and its business.

It is expected that completion of the Acquisition and Admission of the
Consideration Shares will take place on or about 16 January 2006.

Novation of FDS Development Agreement

Pursuant to a development agreement entered into between FDS and Lipoxen
("Development Agreement"), FDS has agreed to provide certain drug and product
candidate development services and contains provision for the allotment of
ordinary shares in Lipoxen to FDS upon the achievement of certain milestones.
Greenchip, Lipoxen and FDS have entered into an agreement novating Lipoxen's
obligations under the Development Agreement to Greenchip ("Novation Agreement").
Greenchip has undertaken to satisfy Lipoxen's obligations under the Development
Agreement, in particular the obligation to allot Ordinary Shares in Greenchip to
FDS. As part of the Novation Agreement a liquidated amount has been agreed as
the fee payable to FDS for achievement of each milestone under the Development
Agreement, which in aggregate for all milestones is US$2,670,764.2. The
aggregate number of shares which can be allotted to FDS in satisfaction of
Greenchip's obligation to pay fees to FDS is up to 10,174,340 Ordinary Shares.
Greenchip otherwise agrees to perform the obligations of the Development
Agreement and to be bound by its terms as if Greenchip were a party to it. The
entry into the Novation Agreement by Greenchip requires the approval of the
Shareholders of Greenchip by way of an ordinary resolution pursuant to the
provisions of section 320 of the Act.

The Directors, having consulted with Grant Thornton Corporate Finance believe
that the terms of the proposed Novation Agreement are fair and reasonable in so
far as the Company's Shareholders are concerned and that entry into the Novation
Agreement is in the best interests of the Company and they recommend that the
Shareholders vote in favour of its approval at the EGM.

Current trading, trends and prospects

Greenchip has not had any operational activities since the disposal of its
interests in Programmable Life Inc and Programmable Materials Inc in November
2003. During the first half of 2005, Lipoxen had revenues of £77,557. Its future
revenues are dependent on the commercial success of its technologies.

Directors and Senior Management

Board changes

On completion of the Acquisition, Malcolm Burne will resign as a director of
Greenchip and Colin Hill will take on a new role as a non-executive director for
the Company and Lipoxen, following the Acquisition ("Enlarged Group"). Dr Giap
Wang Chong will remain on the board as a non-executive director. The board of
Directors of the Company on completion of the Acquisition will be as follows:

Sir Brian Richards CBE, Non-executive Chairman, age 73. Sir Brian Richards was
appointed nonexecutive chairman of Lipoxen in June 2005. He has extensive
experience in chairing boards of public companies and is currently the
non-executive Chairman of Alizyme plc, Cozart plc and MAN Mail (Guernsey)
Limited. He has previously served as executive Chairman of British
Bio-technology Limited, a company he co-founded, and has had non-executive
chairmanships or directorships in several biopharmaceutical companies including
Peptide Therapeutics (later Acambis plc), Oxford Biomedical plc and CeNeS
Pharmaceuticals plc.

Scott Maguire MBA, Chief Executive Officer, age 42. Scott joined Lipoxen as
Chief Executive Officer in April 2004. His background is primarily in life
science and healthcare investment banking and he has advised many US and
European companies on capital raisings and commercial development over his 18
year career. Scott started his banking career with Merrill Lynch in 1987 in New
York. After receiving his MBA in 1993 he joined the healthcare division of W.R.
Grace, National Medical Care as the manager responsible for assisting in
building the international healthcare division. In May 1996 Scott co-founded the
Arthur Andersen global healthcare corporate finance practice. Scott is currently
a partner and director of Healthcare Capital Partners Limited, a healthcare
corporate finance and proprietary investment boutique he co-founded in 2002.

Professor Gregory Gregoriadis Ph.D., D.Sc., Chief Scientific Officer, age 71.
Gregory founded Lipoxen in November 1997 as a spin out from The School of
Pharmacy, University of London, where he was Head of the Centre for Drug
Delivery Research (1990-2001). Gregory is an internationally acknowledged leader
in the expanding field of drug and vaccine delivery and was the first to
introduce liposomes in 1971 and polysialic acids in 1991 as drug and vaccine
delivery systems. He has published nearly 400 research papers, reviews and
articles as well as 24 volumes on drug delivery and targeting. Gregory has been
honoured with numerous awards, including the Controlled Release Society Founders
award (1994), the A.D.Bangham FRS life achievement award (1995), and a D.Sc.
from the University of London (2001), all for exceptional contributions to the
field of drug and vaccine delivery. Gregory's seminal contributions to the field
of drug and vaccine delivery are also reflected in his directorships of the NATO
Advanced Studies Institutes ''Targeting of Drugs'' and ''Vaccines'' (1981-1999).
Since 2003 he has been President of the International Liposome Society.

Dr Dmitry Dmitrievich Genkin, Non-executive Director, age 36. Dmitry has the
Russian equivalent of an MD in Internal Therapy and has attended training
courses in drug delivery at The School of Pharmacy, University of London (1992)
and the Department of Clinical Pharmacology at Karolinska hospital, Stockholm
(1992-1993). Dmitry is currently a director of the general partner and limited
partner of FDS Pharma Ass, and in the past has served as a Chief Executive
Officer of ASGL Research Laboratories ZAO, a company founded by Dmitry in 1994
to run drug development programmes focusing on viral and cancer diseases. Dmitry
has also served as Executive Chairman of Pharmavit OAO and Scientific Director
of Pharmavit Holding ZAO.

Dr Tatiana Zhuravskaya Ph.D., Non-executive Director, age 39. As well as being a
director of Lipoxen, Tatiana is Chief Scientific Adviser of Baltic
Pharmaceutical Society and Chief Executive Officer of ASGL - Research
Laboratories, which are part of Pharmavit Holding - a group of biotechnology
research and development and manufacturing companies specialising in research,
development, manufacture and marketing of pharmaceutical products. Tatiana is
also a director of the general partner and limited partner of FDS Pharma Ass.
Prior to joining Pharmavit Holding, Tatiana worked as a clinical scientist at
Public Health Laboratory Services (London) where she managed several Hepatitis C
research projects and clinical studies. From 1997 to 1998 Tatiana was a clinical
researcher in the Neurology Department of the University of Pennsylvania in
Philadelphia, USA where she conducted clinical studies and managed several
research projects in the area of HIV research. Tatiana has a Medical Degree from
Medical School in St Petersburg, Russia and a PhD in Cell and Molecular Biology
from the University of Nevada, Reno, USA.

Dr Giap Wang Chong MBBS, MBA, Non-executive Director, age 39. Wang joined
Greenchip Investments plc as Director in August 2005. Wang is a physician with
an MBA and has over 17 years of experience in the healthcare industry. Previous
positions include Chief Financial Officer of Phytopharm plc, Pharmaceutical
Analyst at Canaccord Capital (Europe) Ltd, Chief Executive Officer of Osmetech
plc, leader of UK Healthcare Initiatives at Arthur D. Little Inc, and commercial
roles at Glaxo Wellcome plc and SmithKline Beecham plc. He is a Council Member
of the Royal Society of Medicine and an associate of the Securities and
Investment Institute.

Colin William Hill, Non-executive Director, age 60. Colin joined Greenchip
Investments plc as Finance Director in November 2001 and became non-executive
Chairman in June 2003. He has been a member of the Chartered Institute of
Management Accountants since 1968 and spent 15 years in industry specializing in
corporate turnaround and development work before becoming a freelance consultant
in 1981. Since that time, Colin has focused on due diligence relating to
corporate finance assignments in small and medium enterprises and public
companies with small market capitalisations in the UK, USA, and overseas. Since
April 1998, Colin has been the Finance Director of Arlington Group Limited, a
company listed on AIM.

Senior Management

Dr Peter Laing, (Business Development). Peter joined Lipoxen in March 2002.
Previously he held the positions of Director of Research at Peptide Therapeutics
plc, Director of Research and Development at Actinova Ltd and Director of
Development at Syngenix Ltd. He joined the biotech industry in 1994 following an
independent academic career that included working for the New Zealand MRC, as a
visiting scholar at the National Institutes of Health, and as a University
Lecturer in Immunology at Nottingham University. He is currently non-executive
Chairman of Activotec Ltd.

Following Admission, the Enlarged Group intends to appoint a chief financial
officer who will assume responsibility for overall control of financial
reporting for the Enlarged Group.

Share option arrangements

The Directors consider that an important part of the Enlarged Group's
remuneration policy should include equity incentives through the grant of share
options to Directors and employees. Greenchip's existing share option scheme
will be adopted for the Enlarged Group. It is the intention of the Directors to
grant further options to current and future employees of the Enlarged Group.
Proposals will be made to the option holders of Lipoxen in due course to roll
their options into the Company's share option scheme on the same basis as the
Consideration Shares that are being issued to the Vendors. The maximum number of
Ordinary Shares which will be subject to options granted to Directors and
employees under the share option scheme and any other share schemes adopted by
the Company will not exceed 20 per cent. of the Company's issued share capital
from time to time.

Lock-in Arrangements

In accordance with the AIM Rules, FDS and each of the Proposed Directors have
agreed not to dispose of any interest in Ordinary Shares held on the date of
Admission for a period of 12 months following Admission, save in the event of
the acceptance of any offer for the share capital of the Company, any
intervening court order in relation to the Company or the death of a party to
the lock-in arrangements who is an applicable employee or a related party. FDS
and the Proposed Directors have further undertaken only to dispose of any
interest in Ordinary Shares during the period between the first and second
anniversaries of Admission through Canaccord, or the Company's broker at the
time. These arrangements cover 52,161,937 Ordinary Shares in aggregate,
representing approximately 50.66 per cent. of the Enlarged Issued Share Capital.

Dividend policy

After completion of the Acquisition, Placing and Admission, the Directors and
Proposed Directors do not intend to declare or pay a dividend in the immediate
foreseeable future but, subject to the availability of sufficient distributable
profits, intend to commence the payment of dividends when it becomes
commercially prudent to do so and will adopt a progressive dividend policy

Corporate Governance

The Directors and Proposed Directors support the highest standards of corporate
governance and, whilst AIM companies are not obliged to comply with the
Principles of Good Corporate Governance and Code of Best Practice ("Combined
Code"), the Directors and Proposed Directors intend that the Company will
observe the requirements of the Combined Code taking into account the Company's
size and stage of development.

On completion of the Acquisition, the Company will have five non-executive
directors. The Company intends to hold quarterly Board meetings at which
financial and other reports are considered and, where appropriate, voted on.
Apart from these regular meetings, additional meetings will be arranged when
necessary to review strategy, planning, operational, financial performance, risk
and capital expenditure and human resource and environmental management. The
Board is also responsible for monitoring the activities of the executive
management and the Enlarged Group's internal control environment.

The Company already has Remuneration and Audit committees that have had
delegated to them certain duties and responsibilities. On completion of the
Acquisition the Remuneration Committee and the Audit Committee will comprise of
non-executive directors and will be chaired by Sir Brian Richards and Colin Hill

The Company will continue to comply with Rule 21 of the AIM Rules for directors'
dealings as applicable to AIM companies and will take all reasonable steps to
ensure compliance by Directors and Proposed Directors and relevant employees.
The share dealing code adopted by the Company on 14 October 2005 will apply to
the Enlarged Group after Admission.

Relationship Deed

FDS and the Company have entered into a Relationship Deed governing the
relationship between them.  Pursuant to this agreement, FDS, as a major
shareholder of the Enlarged Group after Admission, has agreed inter alia not to
vote on certain matters without the consent of the independent directors of the


CREST is a paperless settlement procedure enabling securities to be evidenced
otherwise than by a certificate and transferred otherwise than by written
instrument. In accordance with standard practice the Consideration Shares and
Placing Shares will be made eligible for settlement in CREST in accordance with
the Uncertificated Securities Regulations 2001.

City Code

The terms of the Acquisition give rise to certain considerations under the City
Code. Brief details of the Panel on Takeovers and Mergers ("Panel"), the City
Code and the protections they afford to Shareholders are described below.  The
City Code has not, and does not seek to have, the force of law. It has, however,
been acknowledged by both the UK government and other UK regulatory authorities
that those who seek to take advantage of the facilities of the securities
markets in the UK should conduct themselves in matters relating to takeovers in
accordance with best business standards and so according to the City Code.

The City Code is issued and administered by the Panel. The City Code applies to
offers for all listed and unlisted public companies which are considered by the
Panel to be resident in the UK and to certain categories of private limited
companies. For the purposes of the City Code, an offer includes, wherever
appropriate, takeover and merger transactions however effected and includes
reverse takeovers. Due to the size and relative value of Lipoxen, the
Acquisition constitutes a reverse takeover of Greenchip and Greenchip's
shareholders are therefore entitled to the protection afforded by the City Code.

Under Rule 9 of the City Code (''Rule 9'') when (i) any person acquires shares
which, when taken together with shares already held by him or shares held or
acquired by persons acting in concert with him, carry 30 per cent. or more of
the voting rights of a company subject to the City Code or (ii) any person who,
together with persons acting in concert with him, holds not less than 30 per
cent. but not more than 50 per cent. of the voting rights of a company subject
to the City Code and such person, or persons acting in concert with him,
acquires any voting rights, that person is normally obliged to make a general
offer in cash to all shareholders to purchase their shares at the highest price
paid by him, or any person acting in concert with him, within the preceding 12

Certain shareholders of Lipoxen and representatives of such shareholders are
deemed to be a Concert Party for the purposes of the City Code due to their
position as Vendors of Lipoxen and their relationships with each other.

Immediately following implementation of the proposals set out in the document
mailed to Shareholders today ("Proposals"), the shareholding of the Concert
Party will be, in aggregate, 60,777,756 Ordinary Shares, representing
approximately 59.03 per cent. of the issued voting share capital of the Company.
Assuming that (a) the Concert Party Options are rolled over into options to
acquire Ordinary Shares in the Company on the same basis as the Consideration
Shares that are being issued to the Vendors, assuming exercise in full of all
such options and assuming that no other person exercises any option or other
right to subscribe for shares in the Company and (b) the issue of 10,174,340
shares in the Company to FDS pursuant to the Development Agreement, the members
of the Concert Party will between them own 72,037,360 Ordinary Shares
representing approximately 63.07 per cent. of the Company's enlarged issued
voting share capital. The respective individual holdings of the members of the
Concert Party, now and following implementation of the Proposals and following
the exercise of the options on the basis set out above, are set out in the
document mailed to Shareholders today. Accordingly, following completion of the
Proposals and subject to resolution one set out in the notice of EGM being
passed, the Concert Party will own or control more than 50 per cent. of the
Enlarged Issued Share Capital of the Company.

The Panel has agreed however, subject to resolution numbered one set out in the
notice of Extraordinary General Meeting being passed on a poll by independent
Shareholders at the Extraordinary General Meeting and as set out below, (a) to
waive the obligation on the individuals and entities identified as concert party
members (collectively "Concert Party") to make a general offer to Shareholders
under Rule 9 of the City Code which would otherwise arise on completion of the
Acquisition and (b) that Rule 9 of the City Code will not apply to the issue of
Consideration Shares to the members of the Concert Party pursuant to the terms
of the acquisition agreements to which they are a party or to FDS under the
novated Development Agreement or to the exercise by Professor Gregoriadis,
Tatiana Zhuravskaya and Igor Volodin (being members of the Concert Party) of
their options over Lipoxen ordinary shares ("Concert Party Options"). All
Shareholders will be eligible to vote on resolution one set out in the notice of
Extraordinary General Meeting.

Following completion of the Acquisition and Admission the members of the Concert
Party will between them hold more than 50 per cent. of the Enlarged Issued Share
capital of the Company and (for so long as they continue to be treated as acting
in concert) may accordingly be able to increase their aggregate shareholding
without incurring any further obligation under Rule 9 to make a general offer,
although individual members of the Concert Party will not be able to increase
their percentage shareholding through a Rule 9 threshold without Panel consent.

No member of the Concert Party nor any person acting in concert with any of them
has purchased Ordinary Shares in the 12 months immediately preceding the date of
this document. The waiver which the Panel has agreed to provide will be
invalidated if any purchases of Ordinary Shares are made by any member of the
Concert Party or any person acting in concert with any of them in the period
between the date of this document and the Extraordinary General Meeting. Each
member of the Concert Party has undertaken to the Company that it will not make
any purchases of Ordinary Shares in that period.

Save for the acquisition agreements and certain service agreements, there are no
agreements, arrangements or understandings (including compensation arrangements)
between the Vendors and any of the Directors, Shareholders or recent
Shareholders of the Company connected with or dependent upon the Acquisition.

Save as disclosed in the document mailed to Shareholders, there is no agreement,
arrangement or understanding whereby the beneficial ownership of any
Consideration Shares will be transferred to any other person. References in this
paragraph to "arrangement" includes, in addition to indemnity and option
arrangements, any arrangement, agreement or understanding, formal or informal,
of whatever nature which may be an inducement to deal or refrain from dealing.

Risk Factors

The Enlarged Group will need access to additional capital in the future. The
Enlarged Group will require additional capital in the future, and it does not
have any assurance that funding will be available when needed on terms that it
finds favourable, if at all. If additional capital is raised by issuing equity
securities this will be dilutive to shareholders. If additional funds are raised
through collaborations and licensing arrangements, the Enlarged Group may be
required to relinquish some rights to its technologies or drug candidates, or to
grant licences on terms that are not as favourable to it as if circumstances
were different. If adequate funds are not available or are not available on
acceptable terms, the ability of the Enlarged Group to fund its operations, take
advantage of opportunities, develop products and technologies, and otherwise
respond to competitive pressures could be significantly delayed or limited, and
the Enlarged Group may need to downsize or halt its operations. The present and
future capital requirements of the Enlarged Group depend on many factors,

•       the results and timing of preclinical and clinical testing, which can 
        be unpredictable in drug development;

•       the success rate of the Enlarged Group and that of its collaborators 
        in preclinical and clinical efforts associated with milestones
        and royalties;

•       the time and costs involved in obtaining regulatory approvals;

•       the timing, willingness, and ability of collaborators of the Enlarged 
        Group to commercialise products incorporating its technologies.

Lipoxen has a history of losses, and as a result the Enlarged Group may incur
continued losses for some time.  The level of operating expenditures will vary
depending upon the stage of development of proprietary proteins and vaccines and
the number and nature of collaborations of the Enlarged Group. The Enlarged
Group may continue to incur substantial losses even if revenues increase.

Lipoxen has not yet commercialised any products or technologies, and as a result
the Enlarged Group may never become profitable Lipoxen has not yet
commercialised any products or technologies, and may never be able to do so.
Since 1997, Lipoxen has not generated any revenues, except from corporate
collaborations and licence agreements.

The Directors do not know when or if the Enlarged Group will complete any of its
product development efforts, obtain regulatory approval for any product
candidates incorporating its technologies, or successfully commercialise any
approved products.

The Enlarged Group has limited product development and commercial manufacturing
experience.  To date, Lipoxen has not manufactured, on a commercial scale, any
pharmaceutically active proteins or vaccines. Lipoxen confronts scale-up risks
associated with protein and vaccine manufacturing and has sought and continues
to have collaborators, licencees or contract manufacturers to manufacture most
of the compounds necessary to commercialise its technologies. The Enlarged Group
may become dependent on suppliers that could discontinue its supply arrangements
or change supply terms to its disadvantage. The success of the Enlarged Group
depends on its ability to manufacture these compounds on a commercial scale or
to obtain commercial quantities, in either case, at reasonable cost.
Manufacturing processes also must comply with current Good Manufacturing
Practices, or cGMP. The Enlarged Group may not be able to manufacture or obtain
sufficient quantities of the products it develops to meet its needs for
pre-clinical or clinical development.

Success is dependent on the performance of third party collaborators.  The
Enlarged Group will rely on collaborative partners to co-develop and manufacture
products and to commercialise products made using Lipoxen's technologies.
Lipoxen has entered into several significant collaboration agreements and the
success of the product candidates is highly dependent on its collaborators, most
notably FDS and The Serum Institute. These collaborators have significant
discretion over the allocation of their resources and the Enlarged Group cannot
guarantee that these third parties will devote adequate resources to these
collaborations. Failure of collaborators could adversely affect the ability of
the Enlarged Group to develop product candidates and could materially affect

The partnering strategy of the Enlarged Group will entail many risks, including:

•      the Enlarged Group may not be successful in producing its technologies 
       to commercial scale and even if it produces to commercial scale, it may 
       not be able to perform in a manner that meets regulatory approval;

•      the Enlarged Group may not be successful in applying its technologies to 
       the needs of its collaborative partners;

•      collaborators of the Enlarged Group may not be successful in, or may not 
       remain committed to, co-developing products of the Enlarged Group or 
       commercialising products incorporating technologies of the Enlarged 

•      collaborators are not obliged to market or commercialise products of the 
       Enlarged Group or products incorporating technologies of the Enlarged 
       Group; and

•      the collaboration agreements in existence may be terminated by partners 
       of Lipoxen on short notice.

The Enlarged Group may be exposed to product liability and related risks The use
in humans of compounds developed by the Enlarged Group or incorporating its
technologies may result in product liability claims. Product liability claims
can be expensive to defend, and may result in large settlements of claims or
judgments against the Enlarged Group. The Enlarged Group may not be able to
obtain insurance cover at a reasonable cost or in sufficient amounts to protect
it against losses.

The Enlarged Group's success will depend in part on its ability to establish,
protect and enforce proprietary rights, including patents for its innovations.
Whilst the Directors and Proposed Directors are confident of the strength and
range of Lipoxen's patent position, there can be no assurance that any intended
patent applications will mature into patents or that existing patents or future
patents will adequately protect the Enlarged Group's products and technology.
There is no assurance that the Enlarged Group's competitors will be unable to
develop competing products which do not infringe the rights obtained by the
Enlarged Group.

The laws of some foreign countries may not protect intellectual property rights
of the Enlarged Group to the same extent as European and U.S. laws. The Enlarged
Group may need to participate in proceedings to determine the validity of
patents belonging to it, licensed to it or belonging to its competitors, which
could result in substantial costs and the diversion of the Enlarged Group's
efforts. Finally, some patent protection in Europe is not available to the
Enlarged Group in foreign countries due to the differences in the patent laws of
those countries. Patents can also be challenged by competitors.

There is no assurance that third parties have no granted or pending patent
rights which may inhibit the Enlarged Group's freedom to exploit its own
proprietary rights. Since patent applications are maintained in secrecy for 18
months, Lipoxen cannot be certain that it was the first to make the inventions
covered by the pending applications or that it was the first to file patent
applications for such inventions.

Competitors may develop better or more successful products.  Competitors of the
Enlarged Group may succeed in developing products and technologies that are more
effective or less costly that would render products or technologies of the
Enlarged Group, or both, obsolete or uncompetitive. The Directors and the
Proposed Directors are aware that other companies with substantial scientific
and financial resources are working on the development of next-generation
proteins and improved vaccines.

Necessary regulatory approvals may not be obtained by the Enlarged Group or its
collaborators or long delays and large expenditures may be incurred in obtaining
such approvals Pharmaceutical product candidates manufactured using Lipoxen's
technologies must undergo an extensive regulatory approval process before
commercialisation. This process is regulated by EMEA and the FDA and by
comparable agencies in other countries. The regulatory agencies have substantial
discretion to terminate clinical trials, require additional testing, delay or
withhold registration and marketing approval, and mandate product withdrawals.

Lipoxen has not and its collaborators have not submitted any product candidates
incorporating Lipoxen's technologies for approval to EMEA or to the FDA or any
other regulatory authority. If any product candidate manufactured using
Lipoxen's technology is submitted for regulatory approval, it may not receive
the approvals necessary for commercialisation. Any delay in receiving, or
failure to receive, these approvals would adversely affect the ability of the
Enlarged Group to generate product revenues from milestone payments and
royalties, and significant sums will already have been spent in pursuing

Collaboration partners' manufacturing processes would be subject to continued
review by regulatory agencies. Any discovery of unknown problems with products
of the Enlarged Group, products incorporating its technologies, or manufacturing
processes could result in restrictions on such products or manufacturing
processes, including potential withdrawal of the products.

Adverse actions by animal rights activists could interfere with research
activities.  Activities of the Enlarged Group or its collaborators' activities,
operations and research, and services conducted for the Enlarged Group by third
parties, could be adversely affected by animal rights activists.  Any such
adverse action could delay research projects and decrease the ability to conduct
future research and development. Any significant interruption of the ability of
the Enlarged Group to conduct its business operations, research and development
activities, or manufacturing operations could reduce revenue and increase

Most of the agreements Lipoxen has entered into are denominated in US dollars
while Lipoxen's operating costs are in sterling. Lipoxen has not entered into
any contracts to reduce its currency risk exposure.  Therefore currency
fluctuation could have a potential adverse impact on financial results of the
Enlarged Group.

The future success of the Enlarged Group is substantially dependent on the
continued services and performance of its senior management and other key
personnel in the various areas of its business. The loss of the services of
certain key employees or the inability to recruit personnel of the appropriate
calibre could have a significant adverse effect on the business of the Enlarged

In the opinion of the Directors and Proposed Directors, having made due and
careful enquiry and taking into account the net proceeds of the Placing, the
working capital available to the Enlarged Group will be sufficient for its
present requirements, that is for at least the next 12 months from the date of
Admission.  However, it is likely that the Enlarged Group will need to raise
further funds in the future. There is no guarantee that the then prevailing
market conditions will allow for such a fundraising or that new investors will
be prepared to subscribe for Ordinary Shares at the same or higher price as the
Placing Price.

The Directors and the Proposed Directors anticipate that further expansion will
be required to address the anticipated growth in the markets in which the
clients of the Enlarged Group operate. The future success of the Enlarged Group
will depend, in part, on its ability to manage this anticipated expansion. Such
expansion Part I - Letter from the Chairman is expected to place significant
demands on management, support functions, accounting, sales and marketing and
other resources. If the Enlarged Group is unable to manage its expansion
effectively, its business and financial results could suffer.

Investment in shares traded on AIM is perceived to involve a higher degree of
risk and be less liquid than investment in companies whose shares are listed on
the Official List and traded on the London Stock Exchange's market for listed
securities. An investment in Ordinary Shares may be difficult to realise.
Prospective investors should be aware that the value of Ordinary Shares may go
down as well as up and that the market price of the Ordinary Shares may not
reflect the underlying value of the Enlarged Group.  Investors may therefore
realise less than, or lose all of, their investment.

The share price of quoted emerging companies can be highly volatile and
shareholdings illiquid. The price at which the Ordinary Shares are quoted and
the price at which investors may realise their Ordinary Shares may be influenced
by a significant number of factors, some specific to the Company and its
operations and some which affect quoted companies generally. These factors could
include the performance of the Enlarged Group, large purchases or sales of
Ordinary Shares, legislative changes and general, economic, political or
regulatory conditions.

Resolutions proposed at the EGM

At the Extraordinary General Meeting of the Company on 16 January 2005, the
following resolutions will be proposed:

1.   an ordinary resolution on a poll of independent shareholders to approve 
     the waiver by the Panel on Takeovers and Mergers of the obligation on the 
     Concert Party to make a general offer under Rule 9 of the City Code;

2.   an ordinary resolution to approve the Acquisition for the purposes of 
     Rule 14 of the AIM Rules;

3.   an ordinary resolution to approve the terms of the Novation Agreement 
     pursuant to which Greenchip agrees to accept the obligations of Lipoxen 
     under the FDS Development Agreement in particular to allot ordinary
     shares in Greenchip to FDS upon achievement of certain milestones to the
     financial value of $2,670,764.2;

4.   special resolutions:

     (a) to give the directors of the Company from time to time authority to 
         allot relevant securities up to an aggregate nominal amount of 

     (b) to disapply section 89(1) of the Act in connection with, inter alia, 
         the Proposals; and

5.  a special resolution to change the name of the Company to Lipoxen plc.

The Current Directors, who have been so advised by Grant Thornton Corporate
Finance, consider the terms of the Acquisition, the terms of the Novation
Agreement and the seeking of the waiver of the obligation on the members of the
Concert Party (both individually and collectively) to make a general offer to
Shareholders under Rule 9 of the City Code, to be fair and reasonable and in the
best interests of Shareholders as a whole. In giving its advice, Grant Thornton
Corporate Finance has taken into account the Current Directors' commercial

The Directors will unanimously recommend Shareholders to vote in favour of the
resolutions to be proposed at the Extraordinary General Meeting, as they intend
to do in respect of their shareholdings of 1,048,500 million existing Ordinary
Shares in aggregate representing approximately 13 per cent. of the existing
issued ordinary share capital of the Company.

For further information please contact:

Greenchip Investments plc:

Colin Hill                                                       020 7389 5010

Grant Thornton Corporate Finance:

Graeme Thom                                                      0870 991 2790

                      This information is provided by RNS
            The company news service from the London Stock Exchange

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