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Kape Technologies (KAPE)

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Monday 13 September, 2021

Kape Technologies

$936m acquisition of ExpressVPN & $354m Placing

RNS Number : 6144L
Kape Technologies PLC
13 September 2021
 

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, NEW ZEALAND OR IN OR INTO ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW.

THIS ANNOUNCEMENT IS NOT AN OFFER TO SELL OR A SOLICITATION TO BUY SECURITIES IN THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA AND NEW ZEALAND OR IN ANY OTHER JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL OR CONTRAVENE ANY REGISTRATION OR QUALIFICATION REQUIREMENTS UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION . NEITHER THIS ANNOUNCEMENT NOR ANYTHING CONTAINED HEREIN SHALL FORM THE BASIS OF, OR BE RELIED UPON IN CONNECTION WITH, ANY OFFER OR COMMITMENT WHATSOEVER IN ANY JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE UK VERSION OF REGULATION 2014/596/EU. IN ADDITION, MARKET SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

 

13 September 2021

 

Kape Technologies plc

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

 

Proposed US$936 million acquisition of ExpressVPN

 

Underwritten Placing to raise US$354 million & Retail Offer via PrimaryBid

 

Kape (AIM: KAPE), the digital privacy and security software business, announces that its wholly owned subsidiary has entered into a sale and purchase agreement to acquire certain assets, liabilities and service entities together comprising the ExpressVPN business ("ExpressVPN") from Access Global Limited and its subsidiaries ("Access Global") for a total consideration of approximately US$936 million (the "Acquisition").

 

At the same time, and in order to part fund the Acquisition, Kape announces that it intends to raise gross proceeds of US$354 million by means of an underwritten placing to institutional investors (the "Placing"). In addition to the Placing, new and existing retail investors will be offered the opportunity to participate on the PrimaryBid platform (the "Retail Offer"). A separate announcement will be made by the Company shortly regarding the Retail Offer.

 

Acquisition highlights:

 

· ExpressVPN is one of the most recognised brands in the digital privacy space with premium products serving over 3 million customers - of which over 40% are in North America - and generating revenue of c. US$279.4 million and Adjusted Proforma IFRS Adjusted EBITDA (Note 1) of c. US$74.8 (Note 2) million for the year ended 31 December 2020, up 37.0% and 34.9% respectively year on year

 

· Acquisition will create a premium digital privacy and security player best positioned to capitalise on the growth in the digital privacy market

 

· Delivers significant additional scale for Kape, with the enlarged group servicing c. 6 million paying subscribers, with an average aggregated retention rate of 82% (Note 3)

 

· ExpressVPN's first-rate management team will join Kape and continue to lead ExpressVPN's operation with c. 290 team members joining as employees, of which 48% are R&D engineers, not including the larger ExpressVPN team of contractors and customer support agents

 

· Significant cross sell and revenue opportunities across the platform; top line and operational synergies greatly improve LTV/CAC ratios and are anticipated to generate cost savings of US$19 million in 2022 and US$30 million on an annualised cost basis from 2023

 

· Distribution - ExpressVPN brings a strong network of channel partners where it is pre-installed on customers' hardware. Adding a distribution partner to Kape's already robust go to market capabilities

 

1. Adjusted EBITDA is a non-GAAP company-specific measure which excludes other operating income and expenses which are considered to be one off and non-recurring in nature.

2.   In accordance with IFRS 15 accounting principles and not US GAAP accounting standards as currently followed by ExpressVPN, which resulted in US$24.8 million of reported EBITDA in 2020

3. As of 30 June 2021 on a six-month basis

 

Financial highlights:

 

· Highly earnings enhancing transaction from completion, with the enlarged group expected to generate revenues for the year ended 31 December 2022 of between US$610-624 million and proforma Adjusted EBITDA of between US$166-172 million

 

· Earnings accretion of c.28% anticipated for the year ending 31 December 2022

 

· Operating cash conversion from adjusted EBITDA in enlarged group expected to increase from 76% for Kape alone to above 85% on a combined basis in 2022 with expected ongoing strong cash generation

 

· Consideration represents a 10.8x multiple of anticipated 2022 Adjusted EBITDA pre-synergies and 7.8x multiple post synergies (Note 4) 

 

4. Assuming realisation of full annualised synergies of US$30m in 2022

 

Deal structure:

 

· ExpressVPN to be acquired for a total consideration of US$936 million, comprised of:

o US$354 million in cash, to be satisfied by a combination of US$334 million payable on completion plus $20 million in cash within six months of completion paid from excess cash of the Buyer group;

o US$237 million in Ordinary Shares to be issued to the co-founders of ExpressVPN, Peter Burchhardt and Dan Pomerantz and their families (the "Vendors") (or to their wholly-owned affiliated entities); and

o Deferred cash consideration to be paid in two instalments of US$172.5 million each, 12 and 24 months post-completion of the Acquisition ("Deferred Consideration")

· The Deferred Consideration is expected to be fully funded from Kape's operational cashflow and by using the existing but uncommitted capacity within its existing facility agreements. Ahead of this, a standby facility has been arranged with an affiliate of the Company's largest shareholder, Unikmind, to cover the Deferred Consideration and Kape's existing bank debt. No additional equity capital raise will be required to satisfy the Deferred Consideration.

· Given the highly accretive nature of the Acquisition, by December 2022 Kape expects its net debt to EBITDA ratio to decline from 3x immediately following the Acquisition to c. 1.5x pro-forma EBITDA, and thereafter Kape expects to maintain a moderate level of financial indebtedness

· The Vendors will become significant shareholders in Kape with approximately 14% of the enlarged group and will enter into graduated lock-up arrangements over a 24-month period post completion of the Acquisition with an orderly market provision

 

Transaction rationale

 

The Acquisition is a key step in Kape's ongoing strategy to become the leading provider of consumer-focused digital privacy and security solutions and is expected to create an augmented platform set to define its next generation of consumer digital privacy and security protection tools and services. It is anticipated the Acquisition will:

 

· Position Kape as one of the leading pure play consumer digital privacy and security players, in a fast-growing global market

o The Acquisition will enable Kape to deploy a comprehensive range of high-quality products; setting the standards in the industry through its technology, product-depth and thought leadership

o ExpressVPN's products and well-known consumer brand are highly complementary to Kape's existing portfolio, enabling the enlarged group to capture growth across the spectrum of the market

o The Acquisition enables Kape to further capitalise on the growing need to bring digital control back to consumers

o ExpressVPN and Kape share the distinctive characteristic of being businesses that are built with privacy as their core business, in contrast with other market entrants / players, making them well positioned to capture growth in the fast-growing market for digital privacy protection

 

· Provide ongoing benefits through the leveraging of significant economies of scale

o With significant operational cost savings greatly improving LTV / CAC ratios, Kape expects to realise c. US$30 million of synergies on an annualised costs basis from 2023

o It is anticipated that following completion of the Acquisition, Kape will benefit from economies of scale, underpinned by the Company's proven track-record of acquiring and integrating businesses and leveraging greater scale as it has expanded

· Provide access to ExpressVPN's extensive talent pool within digital privacy to drive future R&D

o It is expected that the enlarged group will benefit from ExpressVPN's expertise in digital privacy in driving growth and developing a full end-to-end suite of capabilities. ExpressVPN's team of c. 290 employees will join Kape, of which 48% are R&D engineers, not including the larger ExpressVPN team of contractors and customer support agents

o ExpressVPN's co-founders, Peter Burchhardt and Dan Pomerantz, will continue to manage ExpressVPN's operations, and are fully aligned with the growth strategy for the combined business

· Enable Kape to benefit from ExpressVPN's strong growth rates and attractive financial profile

o ExpressVPN has a significant track record of delivering user growth organically through strong brand recognition, highly efficient performance marketing and OEM channel partners (e.g. HP, HMD Global (home of Nokia phones), Acer, Dynabook (formerly Toshiba) and Philips)

o Over the past four years, ExpressVPN has achieved a revenue CAGR of 35.1%

 

Ido Erlichman, Chief Executive Officer of Kape, commented:

"In acquiring ExpressVPN, we are creating a business at the forefront of delivering to consumers worldwide the most advanced privacy and security solutions, empowering them to regain control of their digital lives. 

We are thrilled that ExpressVPN will be joining Kape and believe that this transaction is testament to the strength of our existing business and growth strategy. This acquisition is directly in line with our mission to provide a privacy-first end-to-end suite of services capable of capturing the increasing demand in the digital privacy market.

With the quality of ExpressVPN's people and products, combined with the scale of their business, this transaction ideally positions Kape to continue to expand our global footprint and product portfolio at a time when digital security and privacy has never been more important."

 

Dan Pomerantz, Co-founder of ExpressVPN, commented:

"The ExpressVPN team is delighted to be joining the Kape Technologies family. It was essential to us that anyone we teamed up with shared our strong fundamental commitment to user privacy, and Kape has demonstrated that in spades through its family of brands. With the infusion of Kape's support, we're excited to be able to accelerate our product development, deliver even more innovation to our users, and protect them from a wider range of threats."

 

Fundraising highlights:

 

· Proposed underwritten Placing to raise minimum gross proceeds of US$354 million (the equivalent of c. £256.5 million (at an exchange rate of US$1.38:£1.00)) at a minimum price of 337.5 pence per share (the "Placing Price"). The Placing will be conducted by way of an accelerated bookbuild which will be launched immediately following the release of this announcement

 

· The Company's largest shareholder, Unikmind, has entered into an agreement with the Company (the "Subscription Agreement") in which it has agreed to subscribe in the Placing for shares with an aggregate value in Sterling at the Placing Price of up to c. £256.5 million (equivalent to c. US$354 million based upon an exchange rate of US$1.38:£1.00), although it is intended that Unikmind's Placing participation will be reduced, depending on demand generated in the Placing, such that Unikmind participates in the Placing on a pro-rata basis. Pursuant to the Subscription Agreement, Unikmind has also agreed that if the Placing does not proceed then it will, following the satisfaction or waiver of all of the conditions to completion in the Acquisition agreement (other than admission to trading on AIM of the Consideration Shares) and subject to certain other limited conditions (including the passing of the resolutions at a general meeting of shareholders (the "General Meeting") required to authorise the allotment and issue of the relevant shares), itself subscribe at 337.5 pence per share for Ordinary Shares with an aggregate value of c. £256.5 million (the equivalent of US$354 million (at an exchange rate of US$1.38:£1.00) to enable Kape to satisfy the cash consideration element of the Initial Consideration

 

· In conjunction with the Placing, it is intended that there will be a retail offer made by the Company on the PrimaryBid platform of additional new ordinary shares at the Placing Price (the "Retail Offer"). Any proceeds of the Retail Offer will be additional to the proceeds of the Placing

 

· The net proceeds of the Placing and the Retail Offer will be used to fund the upfront cash consideration for the Acquisition and costs related to the Acquisition and its funding

 

· Shore Capital Stockbrokers Limited ("Shore Capital") and Stifel Nicolaus Europe Limited ("Stifel") are acting as joint bookrunners in respect of the Placing

 

About ExpressVPN

 

Founded in 2009, by Peter Burchhardt and Dan Pomerantz, ExpressVPN was founded to help build a digital world that is free, private and secure. Through providing premium products and services in the digital privacy space, ExpressVPN has grown to become a leading provider in the consumer market, enabling over 3 million active users in over 180 countries to protect their privacy and security online. ExpressVPN's service is multi-award winning and provides superior protection for users' information and identities across a wide range of platforms and devices.

 

ExpressVPN has a strong track record of significant growth with a revenue CAGR of 35.1% over the past four years. In the year ended 31 December 2020, ExpressVPN generated revenues of c. US$279.4 million, an increase of 37.0% (2019: US$203.9 million), and delivered Proforma IFRS Adjusted EBITDA of c. US$74.8 million (Note 5), up 34.9% on the prior year (2019: US$55.5 million).

 

ExpressVPN server networks covers over 160 VPN server locations across 94 countries, providing a fast and reliable connection for ExpressVPN's global user base. ExpressVPN has c. 290 employees worldwide, not including the larger ExpressVPN team of contractors and customer support agents.

 

ExpressVPN's VPN apps are available for Windows, Mac, iOS, Android, Linux and select routers, alongside alternative configurations for consoles and streaming boxes, as well as extensions for select popular browsers. An advocate for internet privacy, ExpressVPN is also a supporter of non-profit organisations, such as the VPN Trust Initiative, that advance the cause of digital rights.

 

ExpressVPN is owned by co-founders Peter Burchhardt and Dan Pomerantz and their family members and affiliated entities. Both founders will be retained in key management roles within the enlarged group. Peter Burchhardt is an entrepreneur and software engineer, providing strategic counsel to ExpressVPN's product and technology teams. Prior to co-founding ExpressVPN, Peter was Lead Program Manager at Microsoft and was involved in the full product cycle. He has more than 15 years' experience in technology and product development. Dan Pomerantz is a serial entrepreneur who started his first company when he was 21 years old. He has more than 15 years' experience in business leadership and is skilled in operations, marketing, finance and management. 

 

5. In accordance with IFRS 15 accounting principles and not US GAAP accounting standards as currently followed by ExpressVPN, which resulted in US$24.8 million of reported EBITDA in 2020

 

Transaction summary

 

The Acquisition is structured as a hybrid asset and share acquisition. Kape, through a wholly owned subsidiary (the "Buyer"), will acquire certain assets, rights, liabilities and service entities comprising the ExpressVPN business from Access Global and its subsidiaries, which are entities owned by the Vendors. 

 

The total consideration for the Acquisition is c. US$936 million (the "Consideration") to be satisfied by a combination of US$354 million in cash, to be satisfied by a combination of US$334 million payable on completion plus US$20 million in cash within 6 months of completion paid from excess cash of the Buyer group, c. US$237 million in new ordinary shares in the capital of Kape (amounting to 47,782,800 ordinary shares) ("Consideration Shares") to be issued on completion of the Acquisition (the "Initial Consideration") and US$345 million in cash to be paid in two equal instalments of US$172.5 million each on the first and second anniversaries of completion of the transaction (the "Deferred Consideration"). The cash element of the Initial Consideration is subject to adjustment for net cash or debt in the two corporate service entities being acquired as part of the hybrid asset and share acquisition. The Deferred Consideration is not subject to performance or other conditions and its payment by Kape will be secured by way of a charge over the shares in the Buyer.

 

The Acquisition agreement contains customary warranties for a transaction of this nature, given by the selling entities in favour of the Buyer and certain limited warranties given by Kape. In addition, the Acquisition agreement contains certain indemnities to the Buyer in respect of a limited number of specific issues identified by Kape. The warranties and indemnities are each subject to certain limitations. The co-founders of ExpressVPN have personally guaranteed to the Buyer the performance by the selling entities of their obligations in respect of the Acquisition. The Company has guaranteed the performance by the Buyer of certain of its obligations in respect of the Acquisition.

 

C. 10.8 million of the   Consideration Shares will be held in escrow for 24 months from completion of the Acquisition to provide security for claims under the Acquisition documents which are agreed or determined in favour of the Buyer.

 

It is anticipated that completion of the Acquisition will occur in Q4 2021.  Completion of the Acquisition is conditional upon, inter alia, certain merger control consents having been received or the relevant waiting periods having expired, shareholder approval at the General Meeting in respect of the issue of the Consideration Shares and the shares to be issued in the Placing (the "Placing Shares"), and certain other conditions which are customary for an acquisition of this nature, including certain key third party supplier consents. In addition to the conditions, each of the parties has limited termination rights in the period before completion of the Acquisition.  In the event that the Acquisition is not permitted to proceed by any competition authorities or otherwise is not completed for any reason, Kape will seek to use the proceeds of the Placing at a later date as part of its strategy for acquisitive growth.

 

Following completion of the Acquisition, Peter Burchhardt will have the right to appoint one non-executive director to the Board of Kape. This right will continue for so long as the ExpressVPN founders, their close family members and their respective wholly-owned companies, taken together, hold at least 5% of Kape's ordinary shares, subject to certain anti-dilution protections.

 

The cash element of the Initial Consideration will be funded through the Placing. It is Kape's intention that the Deferred Consideration will be funded from its operational cashflow and by using the existing but uncommitted capacity within its existing facility agreements. The use of the existing but uncommitted capacity within its existing facility agreements is subject to the consent of Kape's existing lender group. This consent is being sought, but if given may not be given until after completion of the Acquisition. To assist Kape in making the Acquisition, an affiliate of Unikmind, TS Next Level Investments Limited ("TSNLI"), has agreed, subject to limited conditions, to make available to Kape, if required, loan facilities of up to US$345 million in aggregate in connection with Kape's obligation to pay the Deferred Consideration (the "Deferred Consideration Facility"). Once such facility is utilised, the Company expects net leverage to be c. 1.5x on a pro forma basis by 31 December 2022. Immediately following completion of the Acquisition the Company expects net leverage to be c. 3.0x on a pro forma basis. It is the Company's intention to maintain low levels of financial indebtedness.

 

Further details of the Deferred Consideration Facility, which is a related party transaction, are set out below.

 

Further, prior to completion of the Acquisition, Kape will seek consent from its existing lender group (the "Banks") for the Company's existing US$120 million senior secured term facility and $10 million revolving credit facility to remain in place, absent which the existing senior secured term facility and revolving credit facility will become repayable on completion of the Acquisition. TSNLI has agreed to make available to Kape a loan facility of up to US$130 million (the "Refinancing Facility") to refinance the existing term facility and revolving credit facility from the Banks if the Banks do not provide their consent to the Acquisition. Further details of the Refinancing Facility, which is a related party transaction, are set out below. The Refinancing Facility is being made available by TSNLI in order to facilitate timely signing and completion of the Acquisition and Kape intends to arrange third party bank debt in substitution for the Refinancing Facility as soon as practicable.

 

Bryan Cave Leighton Paisner LLP acted as legal advisor to Kape Technologies plc. Tiro Capital acted as exclusive financial advisor and Freshfields Bruckhaus Deringer LLP acted as legal advisor to ExpressVPN.

 

Details of the Placing

 

The Placing will be conducted by way of an accelerated bookbuilding process (the "Bookbuild") which will be launched with immediate effect following this announcement in accordance with the terms and conditions set out in Appendix I. The Placing Shares are not being made available to the public. It is envisaged that the Bookbuild will close no later than 7.00 a.m. BST on 14 September 2021 .  The results of the Placing will be announced as soon as practicable after the closing of the Bookbuild.  

 

The Company's largest shareholder, Unikmind, has entered into the Subscription Agreement with the Company in which it has agreed to subscribe in the Placing for shares with an aggregate value in Sterling at the Placing Price of up to c. £256.5 million (equivalent to US$354 million based upon an exchange rate of US$1.38:£1.00), although it is intended that Unikmind's Placing participation will be reduced, depending on demand generated in the Placing, such that Unikmind participates in the Placing on a pro-rata basis. In the Subscription Agreement, Unikmind has also agreed that if the Placing is not completed then it will, following the satisfaction or waiver of all of the conditions to completion in the Acquisition agreement (other than admission to trading on AIM of the Consideration Shares) and subject to certain other limited conditions (including the passing of the resolutions at the General Meeting required to authorise the allotment and issue of the relevant shares) itself subscribe at 337.5 pence per share for Ordinary Shares with an aggregate value of c. £256.5 million (the equivalent of US$354 million (at an exchange rate of US$1.38:£1.00)).

 

As a reflection of their confidence in the prospects and growth of the combined business under Kape, ExpressVPN's co-founders, Dan Pomerantz and Peter Burchhardt, via their family investment holding companies, intend to participate in the Placing. Any such participation will be funded through their own resources, and is separate from the consideration the co-founders are receiving from the Acquisition.

 

Shore Capital and Stifel are acting as joint bookrunners in respect of the Placing.

 

To bid in the Bookbuild, Placees should communicate their bid by telephone or in writing to their usual sales contact at either Shore Capital or Stifel.

 

Planned Retail Offer

 

In conjunction with the Placing, the planned Retail Offer will provide both new and existing retail investors with an opportunity to participate in the equity fundraising alongside institutional investors. A separate announcement will be made shortly regarding the Retail Offer and its terms. For the avoidance of doubt, the Retail Offer is not part of the Placing.

 

Lock-in arrangements applicable to the Consideration Shares

 

The Vendors ' Consideration Shares will be subject to a graduated lock-in, whereby 50% of the Consideration Shares will be subject to a 12-month lock-in from completion of the Acquisition, 25% will be subject to an 18-month lock-in from completion and the remaining 25% will be subject to a 24-month lock-in from completion. Each tranche of shares will be subject to a 12-month orderly market period once they are released from lock-in. All of the lock-in arrangements will be subject to customary exclusions.

 

General Meeting

The Company's existing share issuance authorities, reflecting customary general annual authority limits, are insufficient to allow the issue of the Placing Shares, any shares to be issued under the Retail Offer (together, the "Fundraising Shares") and the Consideration Shares. The General Meeting will therefore be convened to seek shareholders' approval to the allotment and issue of such shares. It is currently anticipated that the General Meeting will be convened for 1 October 2021 and it is anticipated that a circular (containing notice of general meeting) will be issued on or around 15 September 2021.

Unikmind has irrevocably agreed to vote in favour of the resolutions to be proposed at the General Meeting to approve the allotment and issue of the Consideration Shares and the Fundraising Shares.

 

Admission of Shares

 

Application will be made for the Fundraising Shares to be admitted to trading on the AIM market of London Stock Exchange plc ("Admission"). The Placing and Retail Offer are conditional upon, inter alia, approval of shareholders being received at the General Meeting to the allotment and issue of the Fundraising Shares and the Consideration Shares, Admission becoming effective and the placing agreement between the Company, Shore Capital and Stifel not having been terminated.‎ The Fundraising Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the Company's existing issued ordinary shares of US$0.0001 each ("Ordinary Shares"). The Placing is not conditional on the completion of the Acquisition.

 

Related Party Transactions

 

Kape has entered into binding commitment letters with TSNLI under which TSNLI has committed, subject to limited conditions, to provide to Kape the Deferred Consideration Facility of up to US$345 million in aggregate (in connection with Kape's obligation to pay the Deferred Consideration) and the Refinancing Facility of up to US$130 million to, if required, repay the Banks in full.

 

The Deferred Consideration Facility will carry a variable coupon, depending on the leverage ratio: if greater than or equal to 3:1 the coupon will be 4.75% per annum, if greater than or equal to 2:1 but less than 3:1, then the coupon will be 4.25% per annum and if less than 2:1 then the coupon will be 4.00% per annum, in each case, on funds drawn. The rates set out above will each increase by 1.00% per annum on and from the second anniversary of the completion of the Acquisition and will increase by a further 1.00% per annum on and from the third anniversary of the completion of the Acquisition.

 

The Deferred Consideration Facility will also carry an arrangement fee of 1.5% of the total commitments, payable on completion of the Acquisition, and a commitment fee accruing at the rate of 3.50% per annum on undrawn commitments, payable on the earlier of the commitments being cancelled or utilised. Should Kape find an alternative source of financing to fund the payment of the Deferred Consideration or to refinance the Deferred Consideration Facility, the commitment fees will only be payable pro rata for the period during which the commitment under the Deferred Consideration Facility is in place.

 

The Refinancing Facility will carry the same coupon set out above, if drawn, and an arrangement fee of 1.5% of the total commitments, payable on closing. If the Refinancing Facility is drawn, TSNLI will be granted substantially the same security as has been granted to the Banks in connection with the existing term and revolving credit facilities that the Refinancing Facility will, if drawn, refinance.

 

The Deferred Consideration Facility and Refinancing Facility also include certain customary obligations on Kape in relation to, inter alia, TSNLI's costs and expenses and in relation to taxes.

 

Unikmind has entered into the Subscription Agreement with the Company, details of which are set out above. No underwriting or other fees are payable to Unikmind under the Subscription Agreement.

 

Unikmind, as a substantial shareholder in the Company, is a related party, and the entering into of the Subscription Agreement, the Refinancing Facility and the Deferred Consideration Facility by the Company are all related party transactions under Rule 13 of the AIM Rules for Companies. The independent directors of Kape (in this instance being Don Elgie, Ido Erlichman, Moran Laufer, David Cotterell and Martin Blair) consider, having consulted with the Company's nominated adviser, Shore Capital and Corporate Limited, that the terms of the Subscription Agreement, the Refinancing Facility and the Deferred Consideration Facility (and the arrangements ancillary thereto, including the security arrangements in respect of the Refinancing Facility and the Deferred Consideration Facility) are fair and reasonable insofar as the Company's shareholders are concerned.

 

 

 

Enquiries:

 

Kape Technologies plc

Ido Erlichman, Chief Executive Officer

Moran Laufer, Chief Financial Officer

 

via Vigo Consulting

Shore Capital (Nominated Adviser, Joint Broker & Joint Bookrunner)

Simon Fine / Toby Gibbs / Mark Percy / James Thomas / Michael McGloin

 

+44 (0)20 7408 4090

Stifel Nicolaus Europe Limited (Joint Broker & Joint Bookrunner)

Alex Price / Brad Topchik / Alain Dobkin / Richard Short

+44 (0) 20 7710 7600

 

 

Vigo Consulting (Financial Public Relations)

Jeremy Garcia / Antonia Pollock

[email protected]

+44 (0)20 7390 0237

 

The person responsible for arranging for the release of this announcement on behalf of Kape Technologies plc is Moran Laufer, CFO.

 

About Kape

 

Kape is a leading 'privacy-first' digital security software provider to consumers. Through its range of privacy and security products, Kape focuses on protecting consumers and their personal data as they go about their daily digital lives.

 

To date, Kape has over 2.7 million paying subscribers, supported by a team of over 430 people across eight locations worldwide.

 

Through its subscription-based platform, Kape has fast established a highly scalable SaaS-based operating model, geared towards serving the vast global consumer digital privacy market.

 

www.kape.com

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IMPORTANT NOTICES

 

FORWARD LOOKING STATEMENTS

This announcement includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding the Company's business strategy, plans and objectives of management for future operations, or any statements proceeded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or similar expressions or negatives thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based, unless required to do so by applicable law or the AIM Rules.

 

US SECURITIES LAW

 

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America.  This announcement is not an offer of securities for sale into the United States.  The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration.  No public offering of securities is being made in the United States.

 

 

 

APPENDIX I

 

FURTHER DETAILS OF THE PLACING

 

TERMS AND CONDITIONS OF THE PLACING

 

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

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), PERSONS WHO ARE, UNLESS OTHERWISE AGREED BY THE JOINT BOOKRUNNERS, "QUALIFIED INVESTORS" AS DEFINED IN ARTICLE 2(E) OF THE EU PROSPECTUS REGULATION (WHICH MEANS REGULATION (EU) 2017/1129 AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN ANY MEMBER STATE) (THE "EUPROSPECTUS REGULATION"); AND (B) IF IN THE UNITED KINGDOM, PERSONS WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(e) OF THE EU PROSPECTUS REGULATION AS IT FORMS PART OF UK LAW BY VIRTUE OF THE EU (WITHDRAWAL ACT) 2018 (THE "UK PROSPECTUS REGULATION") AND WHO ARE: (I) "INVESTMENT PROFESSIONALS" WITHIN THE MEANING OF ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED AND IN EACH CASE HAVE BEEN INVITED TO PARTICIPATE IN THE PLACING BY A JOINT BOOKRUNNER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) COMES ARE REQUIRED BY THE COMPANY, SHORE CAPITAL AND STIFEL TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.

THIS ANNOUNCEMENT IS NOT AN OFFER FOR SALE OR SUBSCRIPTION IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF ANY JURISDICTION. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA. THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OF AMERICA. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OF AMERICA, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM REGISTRATION. NO PUBLIC OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES OF AMERICA.

THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OF, OR THE SOLICITATION OF AN OFFER TO BUY OR SUBSCRIBE FOR, ORDINARY SHARES TO ANY PERSON TO WHOM, OR IN ANY JURISDICTION IN WHICH, SUCH OFFER OR SOLICITATION IS UNLAWFUL AND IS NOT FOR DISTRIBUTION IN OR INTO AUSTRALIA. THE ORDINARY SHARES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER ANY APPLICABLE SECURITIES LAWS OF AUSTRALIA. SUBJECT TO CERTAIN EXCEPTIONS, THE ORDINARY SHARES MAY NOT BE OFFERED FOR SALE OR SUBSCRIPTION, OR SOLD OR SUBSCRIBED, DIRECTLY OR INDIRECTLY, WITHIN AUSTRALIA OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY NATIONAL, RESIDENT OR CITIZEN OF AUSTRALIA.

NO PLACEMENT DOCUMENT, PROSPECTUS, PRODUCT DISCLOSURE STATEMENT OR OTHER DISCLOSURE DOCUMENT HAS BEEN LODGED WITH THE AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION ("ASIC") IN RELATION TO THE OFFERING. THIS DOCUMENT DOES NOT CONSTITUTE A PROSPECTUS, PRODUCT DISCLOSURE STATEMENT OR OTHER DISCLOSURE DOCUMENT UNDER THE CORPORATIONS ACT 2001 (THE "CORPORATIONS ACT") AND DOES NOT PURPORT TO INCLUDE THE INFORMATION REQUIRED FOR A PROSPECTUS, PRODUCT DISCLOSURE STATEMENT OR OTHER DISCLOSURE DOCUMENT UNDER THE CORPORATIONS ACT. TO THE EXTENT THIS DOCUMENT IS DISTRIBUTED IN AUSTRALIA, IT IS DISTRIBUTED FOR INFORMATION PURPOSES ONLY.

THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR AN INVITATION TO SUBSCRIBE FOR, OR SOLICITATION OF AN OFFER TO SUBSCRIBE FOR OR BUY, ORDINARY SHARES TO ANY PERSON IN AUSTRALIA. ANY OFFER IN AUSTRALIA OF THE ORDINARY SHARES MAY ONLY BE MADE TO PERSONS (THE "EXEMPT INVESTORS") WHO ARE "SOPHISTICATED INVESTORS" (WITHIN THE MEANING OF SECTION 708(8) OF THE CORPORATIONS ACT), "PROFESSIONAL INVESTORS" (WITHIN THE MEANING OF SECTION 708(11) OF THE CORPORATIONS ACT) OR OTHERWISE PURSUANT TO ONE OR MORE EXCEPTIONS CONTAINED IN SECTION 708 OF THE CORPORATIONS ACT SO THAT IT IS LAWFUL TO OFFER THE ORDINARY SHARES WITHOUT DISCLOSURE TO INVESTORS UNDER CHAPTER 6D OF THE CORPORATIONS ACT.

THE ORDINARY SHARES APPLIED FOR BY EXEMPT INVESTORS IN AUSTRALIA MUST NOT BE OFFERED FOR SALE IN AUSTRALIA FOR A PERIOD OF 12 MONTHS AFTER THE DATE OF ALLOTMENT UNDER THE PLACING, EXCEPT IN CIRCUMSTANCES WHERE DISCLOSURE TO INVESTORS UNDER CHAPTER 6D OF THE CORPORATIONS ACT WOULD NOT BE REQUIRED PURSUANT TO AN EXEMPTION UNDER SECTION 708 OF THE CORPORATIONS ACT OR OTHERWISE OR WHERE THE OFFER IS PURSUANT TO A DISCLOSURE DOCUMENT WHICH COMPLIES WITH CHAPTER 6D OF THE CORPORATIONS ACT. ANY PERSON ACQUIRING ORDINARY SHARES MUST OBSERVE SUCH AUSTRALIAN ON-SALE RESTRICTIONS.

THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT ARE OFFERED TO INVESTORS IN SWITZERLAND UNDER AN EXEMPTION TO PREPARE AND PUBLISH A PROSPECTUS PURSUANT TO THE SWISS FINANCIAL SERVICES ACT ("FINSA"), BECAUSE THE SECURITIES ARE ONLY OFFERED TO PROFESSIONAL INVESTORS AS DEFINED UNDER FINSA AND BECAUSE SUCH SECURITIES WILL NOT BE ADMITTED TO TRADING ON ANY TRADING VENUE IN SWITZERLAND. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A PROSPECTUS PURSUANT TO FINSA AND NO SUCH PROSPECTUS HAS BEEN OR WILL BE PREPARED FOR OR IN CONNECTION WITH THE OFFERING OF THE SECURITIES.

MEMBERS OF THE GENERAL PUBLIC IN ISRAEL ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND ANY OFFER OF SECURITIES TO WHICH IT RELATES ARE ONLY ADDRESSED TO AND DIRECTED TO PERSONS IN ISRAEL WHO ARE LISTED IN THE FIRST SCHEDULE OF THE ISRAELI SECURITIES LAW - 1968 ("RELEVANT ISRAELI PERSONS"). THE INFORMATION REGARDING THE PLACING SET OUT IN THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT SUCH RELEVANT ISRAELI PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE IN ISRAEL ONLY TO AND WILL BE ENGAGED IN ONLY WITH SUCH RELEVANT ISRAELI PERSONS.

THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR A SOLICITATION OF AN OFFER TO BUY OR SUBSCRIBE FOR PLACING SHARES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL AND, IN PARTICULAR, IS NOT TO BE FORWARDED, DISTRIBUTED, MAILED OR OTHERWISE TRANSMITTED IN OR INTO THE UNITED STATES OF AMERICA, ITS TERRITORIES OR POSSESSIONS, SUBJECT TO CERTAIN LIMITED EXCEPTIONS. THIS DOCUMENT IS NOT TO BE FORWARDED, DISTRIBUTED, MAILED OR OTHERWISE TRANSMITTED IN OR INTO AUSTRALIA AND ITS RESPECTIVE TERRITORIES AND POSSESSIONS (TOGETHER, THE "PROHIBITED TERRITORY") OR TO ANY NATIONAL, RESIDENT OR CITIZEN OF THE PROHIBITED TERRITORY OR TO ANY CORPORATION, PARTNERSHIP OR OTHER ENTITY CREATED OR ORGANISED UNDER THE LAWS THEREOF, OR TO ANY PERSONS IN ANY OTHER COUNTRY OUTSIDE THE UK, WHERE SUCH DISTRIBUTION, FORWARDING OR TRANSMISSION MAY LEAD TO A BREACH OF ANY LEGAL OR REGULATORY REQUIREMENT. NO ACTION HAS BEEN TAKEN BY SHORE CAPITAL, STIFEL, THE COMPANY NOR ANY OF THEIR RESPECTIVE AFFILIATES THAT WOULD PERMIT AN OFFER OF THE PLACING SHARES OR POSSESSION OR DISTRIBUTION OF THIS DOCUMENT OR ANY OTHER PUBLICITY MATERIAL RELATING TO SUCH PLACING SHARES IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. PERSONS RECEIVING THIS DOCUMENT ARE REQUIRED TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES. THE PRICE OF THE PLACING SHARES AND THE INCOME FROM THEM (IF ANY) MAY GO DOWN AS WELL AS UP AND INVESTORS MAY NOT GET BACK THE FULL AMOUNT INVESTED ON DISPOSAL OF THE PLACING SHARES.

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 Japanese Ministry of Finance or the South African Reserve Bank; 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 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 Canada, Japan, the Republic of South Africa or any other jurisdiction in which such offer, sale, resale or delivery would be unlawful.

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 Sourcebook (the "UK Product Governance Requirements") and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK 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: (a) retail investors, (b) investors who meet the criteria of professional clients and (c) eligible counterparties (each as defined in the FCA Handbook Conduct of Business Sourcebook); and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the 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 Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the offer.  In all circumstances the Joint Bookrunners will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of the FCA Handbook Conduct of Business Sourcebook; 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; and (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 end target market of: (a) retail investors, (b) investors who meet the criteria of professional clients and (c) 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 offer. In all circumstances the Joint Bookrunners 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.

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

These terms and conditions apply to persons making an offer to acquire Placing Shares. Each Placee hereby agrees with the Placing Parties and the Company to be bound by these terms and conditions as being the terms and conditions upon which Placing Shares will be issued or acquired. A Placee shall, without limitation, become so bound if the relevant Joint Bookrunner 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 acquire the number of Placing Shares allocated to it at the Placing 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.

In this Appendix, unless the context otherwise requires, "Placee" means a Relevant Person (including individuals, funds or others) who has been invited to participate in the Placing and on whose behalf a commitment to subscribe for or acquire Placing Shares has been given.

Details of the Placing Agreement and the Placing Shares

The Company has today entered into the Placing Agreement with Shore Capital and Corporate Limited ("SCC") (the Company's Nominated Adviser), Shore Capital Stockbrokers Limited ("SCS", together with SCC "Shore Capital") and Stifel Nicolaus Europe Limited ("Stifel") (Stifel, together with SCS, the "Joint Bookrunners" and the Joint Bookrunners, together with SCC, the "Placing Parties") , under which the Joint Bookrunners have, on the terms and subject to the conditions set out therein, undertaken to use their  reasonable endeavours to procure subscribers for the Placing Shares. It is expected that the Placing will raise up to US$354 million in gross proceeds. The Placing is being fully underwritten by Unikmind Holdings Limited, the Company's largest shareholder.

The Placing Shares are expected to be issued on or around 4 October 2021. The Placing Shares will, when issued, be subject to the articles of association of the Company, be credited as fully paid and rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of Ordinary Shares after the date of issue of the Placing Shares.

The proceeds raised through the Placing are intended to be used for the purposes disclosed in this announcement.

The Placing Shares will trade on AIM under KAPE with ISIN: IM00BQ8NYV14.

Application for admission to trading of the Placing Shares

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. Admission for the Placing Shares is expected to become effective and dealings in such shares are expected to commence at 8.00 a.m. on or around 4 October 2021 (the "Admission"). In any event, the latest date for Admission is 29 October 2021 (the "Long Stop Date").

Placing

This Appendix 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.

Participation in, and principal terms of, the Placing are as follows:

1.  The Joint Bookrunners are arranging the Placing as agents for, and brokers to, the Company.

2.  The Placing Price and the number of Placing Shares to be issued will be determined by the Company (in consultation with the Joint Bookrunners) following completion of a bookbuilding exercise by the Joint Bookrunners (the "Bookbuild"). The results of the Bookbuild will be released through a Regulatory Information Service following the completion of the Bookbuild. The Joint Bookrunners shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their absolute discretion determine, following consultation with the Company.

3.  To bid in the Bookbuild, Placees should communicate their bid by telephone or in writing to their usual sales contact at Shore Capital or Stifel. Each bid should state the number of Placing Shares which the prospective Placee wishes to acquire either at the Placing Price which is ultimately established by the Company or at prices up to a price limit specified in its bid. Bids may be scaled down by the Joint Bookrunners on the basis referred to in paragraph 7 below.

4.  The Bookbuild is expected to close no later than 7 a.m. on 14 September 2021 but may be closed earlier or later at the discretion of the Joint Bookrunners. The Joint Bookrunners may, in agreement with the Company, accept bids received after the Bookbuild has closed.

5.  Participation in the Placing is only available to persons who are lawfully able to be, and have been, invited to participate by the Joint Bookrunners. The Joint Bookrunners are entitled (but under no obligation) to participate in the Placing as principal.

6.  Following the close of the Bookbuild for the Placing, each Placee's allocation will be confirmed to Placees orally, or in writing (which can include email), by Shore Capital or Stifel (as applicable) and a trade confirmation or contract note will be dispatched as soon as possible thereafter. The relevant Joint Bookrunner's oral or written confirmation will give rise to an irrevocable, legally binding commitment by that person (who at that point becomes a Placee), in favour of the Joint Bookrunners and the Company, under which it agrees to acquire by subscription the number of Placing Shares allocated to it at the Placing Price and otherwise on the terms and subject to the conditions set out in this Appendix and in accordance with the Company's articles of association. Except with the relevant Joint Bookrunner's consent, such commitment will not be capable of variation or revocation.

7.  Each Placee's allocation will, unless otherwise agreed between the Placee and the relevant Joint Bookrunner, be evidenced by a trade confirmation or contract note issued to each such Placee by the relevant Joint Bookrunner. The terms and conditions of this Announcement (including this Appendix) will be deemed to be incorporated in that trade confirmation, contract note or such other confirmation and will be legally binding on the Placee on behalf of which it is made and, except with the relevant Joint Bookrunner's consent, will not be capable of variation or revocation from the time at which it is issued.

8.  Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to the relevant Joint Bookrunner (as agent for the Company), to pay to that Joint Bookrunner (or as that Joint Bookrunner may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to acquire and the Company has agreed to allot and issue to that Placee.

9.  The allocation of the Placing Shares to Placees located in the United States of America shall be conditional on the execution by each such Placee of an investor representation letter (each an "Investor Representation Letter") in the form provided to it.

10.  Except as required by law or regulation, no press release or other announcement will be made by the Joint Bookrunners or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

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

12.  All obligations of the Joint Bookrunners under the Placing will be subject to fulfilment of the conditions referred to below "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".

13.  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.

14.  To the fullest extent permissible by law and the applicable rules of the Financial Conduct Authority, none of the Joint Bookrunners nor any of their Affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise whether or not a recipient of these terms and conditions) in respect of the Placing. Each Placee acknowledges and agrees that the Company is responsible for the allotment of the Placing Shares to the Placees and the Joint Bookrunners and their Affiliates shall have no liability to the Placees for the failure of the Company to fulfil those obligations. In particular, none of the Joint Bookrunners nor any of their Affiliates shall have any liability (including to the extent permissible by law, any fiduciary duties) in respect of the Joint Bookrunners' conduct of the Placing or of such alternative method of effecting the Placing as the Joint Bookrunners and the Company may determine.

Conditions of the Placing

The Joint Bookrunners' obligations under the Placing Agreement in respect of, amongst other things, the Placing are conditional on, inter alia:

1.  the release of this Announcement to a Regulatory Information Service by no later than 4:45 p.m. on 13 September 2021;

2.  application having been made by or on behalf of the Company for Admission to the London Stock Exchange not later than 8.00 a.m. on 29 September 2021;

3.  the publication of an announcement communicating the results of the Placing not later than 5.00 p.m. on 14 September 2021 (or such other time and/or date as agreed by the Company and the Placing Parties); 

4.  the passing of the Resolutions at the General Meeting without any amendment not approved by the Joint Bookrunners;

5.  the delivery by the Company to the Placing Parties of certain documents required under the Placing Agreement;

6.  the Company having complied with its obligations under the Placing Agreement to the extent that such obligations fall to be performed prior to Admission;

7.  none of the warranties given in the Placing Agreement being untrue, inaccurate or misleading in a material respect at any time between the date of the Placing Agreement and Admission, and no matter having arisen prior to Admission which might reasonably render any of the warranties untrue or inaccurate or misleading in any material respect if it was repeated as at Admission;

8.  the Subscription Agreement and Refinancing Facility having been duly executed and not having been terminated in accordance with its terms prior to the execution by the Placing Parties and the Company of the Pricing Agreement (as defined in the Placing Agreement);

9.  the allotment of the Placing Shares, conditional only upon admission of such Ordinary Shares to trading on AIM, in accordance with the Placing Agreement;

10.  the Company and/or the Joint Bookrunners not having become aware of:

10.1  any new material factor, mistake or inaccuracy in relation to the information contained in this Announcement having arisen such that the Company is or may be required to issue a notification pursuant to Rule 11 of the AIM Rules or which is otherwise material or required to make the statements in this Announcement not misleading in any material respect (excluding any new material factor relating to the Target Business);

10.2  any matter which is or might be material in the context of any assumption or other matter relevant to any forecast or statement about the prospects of the Company in this Announcement; or

10.3  any matter which indicates that a significant change or new matter in respect of the Company has or might have occurred before Admission;

11.  the Acquisition Agreement and certain related documents having been duly executed by all parties thereto, remaining in full force and effect and not having been terminated prior to Admission pursuant to the terms thereof (there being no conditions thereunder due to be fulfilled before Admission);

12.  admission of the Placing Shares to trading on AIM becoming effective in accordance with Rule 6 of Part 1 the AIM Rules not later than 8.00 a.m. on 4 October 2021 or such later date as may be agreed in writing between the Company and Shore Capital and Stifel, but in any event not later than 8.00 a.m. on the Long Stop Date; and

13.  the Placing Agreement not having been terminated by either of the Joint Bookrunners.

If: (i) any of the conditions contained in the Placing Agreement, including those described above, are not fulfilled or (where applicable) waived by the Placing Parties by the respective time or date where specified (or such later time or date as the Placing Parties  may notify to the Company); (ii) any of such conditions becomes incapable of being fulfilled; or (iii) the Placing Agreement is terminated in the circumstances specified below, 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 the Placee in respect thereof.

The Placing Parties may, at their discretion and upon such terms as they think fit, waive, or extend the period for, compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement save that the condition relating to Admission taking place by the Long Stop Date may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

The Company shall not be obligated to allot any Placing Shares to any Placees in the United States of America unless it has received an executed Investor Representation Letter from each such Placee attesting to certain factual representations, warranties and acknowledgements, in a form satisfactory to the Company.

None of the Placing Parties,  the Company nor any of their respective Affiliates 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 the Placing Parties.

The Placing is not conditional on the completion of the Acquisition and for the avoidance of doubt funds will not be required to be returned to Placees in the event that the Acquisition does not complete. 

Right to terminate the Placing Agreement

Each of the Placing Parties is entitled to cease to participate in the Placing by giving notice to the Company in certain circumstances, including, inter alia, if before Admission:

1.  it shall have come to the notice of the Company or any Placing Party that:

1.1  any statement contained in this announcement or certain other documents is or has become untrue, incorrect or misleading, or there shall have occurred any significant new factor relevant to any of the foregoing (other than any significant new factor relevant to the Target Business);

1.2  the Company has failed to comply with its obligations under FSMA, MAR, the Isle of Man Companies Act 2006, the AIM Rules or the Prospectus Regulation Rules;

1.3  there has been a breach of any of the Warranties (except for certain warranties relating to the Target Group) or other obligations of the Company under the Placing Agreement;

1.4  there has been a breach by the Company of any provision of the Acquisition Agreement, the Subscription Agreement or the Refinancing Facility;

1.5  there has been an event or matter on or after the date of the Placing Agreement and before Admission which if it had occurred or arisen at an earlier date would have rendered any of the Warranties (except for certain warranties relating to the Target Group) untrue or incorrect; or

1.6  any matter or series of matters has arisen or occurred in relation to the Target Group which would give the Company or Kape Acquisition Pte. Ltd the right to terminate the Acquisition Agreement,

and, such event would, in the opinion of any Placing Party, have a materially adverse effect on the Placing;

2.  subject to certain exceptions, any event or omission has occurred which in the opinion of any Placing Party is or might reasonably be expected to be materially adverse to the financial position or business or prospects of the Company or the Placing;

3.  any change in national or international, financial, monetary, economic, political or stock market conditions (including any suspension or material limitation in the trading of securities generally on the London Stock Exchange's market for listed securities or in commercial banking, securities settlement or clearance services in the United Kingdom) has occurred which in the opinion of any Placing Party is or might reasonably be expected to be materially adverse to the Company or to the Placing;

4.  any incident of terrorism has occurred which in the opinion of any Placing Party is or might reasonably be expected to be materially adverse to the Company or the Placing or the outbreak of hostilities involving the United Kingdom or the declaration by the United Kingdom of a national emergency or war; or

5.  a deterioration or escalation in the United Kingdom's response to the COVID-19 pandemic or any other epidemic and/or pandemic which, in the opinion of any Placing Party, makes it impractical or inadvisable to continue with the Placing.

If any Placing Party ceases to participate in the Placing, the other Placing Party may, by notice to the Company, elect either to continue with the Placing or to terminate the Placing Agreement. If the Placing Agreement is terminated prior to Admission then the Placing will not occur.

The rights and obligations of the Placees will not be subject to termination by the Placees or any prospective Placees at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by the Placing Parties of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Placing Parties and that the Placing Parties need not make any reference to Placees in this regard and that neither the Placing Parties nor any of their Affiliates shall have any liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

No Admission Document or Prospectus

The Placing Shares are being offered to a limited number of specifically invited persons only and have not been nor will be offered in such a way as to require the publication of an admission document or prospectus in the United Kingdom or any equivalent document in any other jurisdiction. No offering document, admission document or prospectus has been or will be submitted to be approved by the FCA or the London Stock Exchange in relation to the Placing, and Placees' commitments will be made solely on the basis of the information contained in this Announcement (including this Appendix) and the business and financial information that the Company is required to publish in accordance with the AIM Rules (the "Exchange Information") or has published via a Regulatory Information Service ("Publicly Available Information"). Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than the Exchange Information and/or Publicly Available Information), representation, warranty or statement made by or on behalf of the Company or the Placing Parties or any other person and none of the Placing Parties, the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received and, if given or made, such information, representation, warranty or statement must not be relied upon as having been authorised by the Placing Parties, the Company or their respective officers, directors, employees or agents. 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. Neither the Company nor any of the Placing Parties are making any undertaking or warranty to any Placee regarding the legality of an investment in the Placing Shares by such Placee under any legal, investment or similar laws or regulations. Each Placee should not consider any information in this Announcement to be legal, tax or business advice. Each Placee should consult its own solicitor, tax adviser and financial adviser for independent legal, tax and financial advice regarding an investment in the Placing Shares. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Lock-up Arrangements

The Company has undertaken to the Placing Parties that, between the date of the Placing Agreement and 31 December 2021, it will not, without the prior written consent of the Placing Parties (such consent not to be unreasonably withhold or delayed), offer, issue, sell or otherwise dispose of (or announce intention of doing so) any Ordinary Shares (or any interest therein or in respect thereof) or any other securities exchangeable for or convertible into, or carrying rights to acquire other shares of the Company, or enter into any derivative transaction that has the economic effect of such sale, transfer or disposition, whether settled in cash or otherwise, save for the allotment and issue of Ordinary Shares pursuant to the Placing and the Acquisition Agreement and the grant and exercise of options or the issue of Ordinary Shares pursuant to the exercise of options or warrants, in each case pursuant to any employee incentive share schemes.

By participating in the Placing, Placees agree that the exercise by the Placing Parties of any power to grant consent to the undertaking by the Company of a transaction which would otherwise be subject to the lock-up provisions under the Placing Agreement shall be within the discretion of the Placing Parties 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 of the power to grant consent.

Registration and Settlement

Settlement of transactions in the Placing Shares will, unless otherwise agreed, take place on a delivery versus payment basis within the system administered by Euroclear UK & Ireland Limited ("CREST"). Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed as directed by the relevant Joint Bookrunner in accordance with the standing CREST settlement instructions which they have in place with such Joint Bookrunner.

Settlement of transactions in the Placing Shares following Admission will take place within CREST provided that, subject to certain exceptions, the Placing Parties reserve the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

It is expected that settlement of the Placing Shares will be on 4 October 2021 unless otherwise notified by the Placing Parties and Admission is expected to occur by 4 October 2021 or such later time as may be agreed between the Company and the Placing Parties, not being later than the Long Stop Date.

Following the close of the Bookbuild, each Placee allocated Placing Shares in the Placing will be sent a contract note or electronic confirmation in accordance with the standing arrangements in place with the relevant Joint Bookrunner stating the number of Placing Shares to be allocated to it at the Placing Price, the aggregate amount owed by such Placee to the relevant Joint Bookrunner or its sub-agent and settlement instructions. Each Placee will be deemed to agree 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 that it has in place with the relevant Joint Bookrunner. It is expected that such contract note or electronic confirmation will be despatched on or around 1 October 2021 and that this will be the trade date.

 

The Company will deliver the Placing Shares to a CREST account operated by the relevant Joint Bookrunner (as appropriate) or their respective sub-agent, in each case, as agent for and on behalf of the Company and will enter its delivery (DEL) 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 will be on 4 October 2021 on a T + 1 basis in accordance with the instructions set out in the contract note.

 

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 LIBOR as determined by the relevant Joint Bookrunner.

 

Each Placee is deemed to agree that, if it does not comply with these obligations, the Joint Bookrunners may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Joint Bookrunners' account and benefit (as agent for the Company), an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable and shall indemnify the Joint Bookrunners on demand for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, each Placee confers on the Joint Bookrunners such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which any of the Joint Bookrunners lawfully takes in pursuance of such sale. Legal and/or beneficial title in and to any Placing Shares shall not pass to the relevant Placee until it has fully complied with its obligations hereunder.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that any form of confirmation is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares are registered 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 or securities transfer tax. None of the Placing Parties nor the Company will be liable in any circumstances for the payment of stamp duty, stamp duty reserve tax or securities transfer tax in connection with any of the Placing Shares. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations, Warranties and Further Terms

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) makes the following representations, warranties, acknowledgements, agreements and undertakings (as the case may be) to the Placing Parties (in their capacity as placing agents of the Company) and the Company:

1.  that it has read and understood this Announcement, including this Appendix, in its entirety and that its subscription for or purchase of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements, undertakings and other information contained herein and undertakes not to redistribute or duplicate this Announcement;

2.  that the shares in the capital of the Company are admitted to trading on AIM, and the Company is therefore required to publish the Exchange Information, 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 Exchange 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.  that its obligations are irrevocable and legally binding and shall not be capable of rescission or termination by it in any circumstances;

4.  that the exercise by the Placing Parties of any right or discretion under the Placing Agreement shall be within the absolute discretion of the Placing Parties and the Placing Parties need not have any reference to it and shall have no liability to it whatsoever in connection with any decision to exercise or not to exercise any such right and each Placee agrees that it has no rights against the Placing Parties or the Company, or any of their respective officers, directors or employees, under the Placing Agreement pursuant to the Contracts (Rights of Third Parties Act) 1999;

5.  that these terms and conditions (together with any Investor Representation Letter, if applicable) represent the whole and only agreement between it, the Placing Parties and the Company in relation to its participation in the Placing and supersedes any previous agreement between any of such parties in relation to such participation. Accordingly, each Placee, in accepting its participation in the Placing, is not relying on any information or representation or warranty in relation to the Company or any of its subsidiaries or any of the Placing Shares other than as contained in this Announcement, the Exchange Information and the Publicly Available Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares. Each Placee agrees that none of the Company, the Placing Parties nor any of their respective officers, directors or employees will have any liability for any such other information, representation or warranty, express or implied;

6.  that in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 5 of the EU Prospectus Regulation or the UK Prospectus Regulation (as applicable) if in a member state of the EEA or the UK, it understands that (i) the Placing Shares to be 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 any member state of the EEA which has implemented the Prospectus Regulation other than Qualified Investors (as such term is defined in the EU Prospectus Regulation or the UK Prospectus Regulation (as applicable)) or in circumstances in which the prior consent of the Joint Bookrunners and the Company  has been given to the offer or resale; or (ii) where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA  or the UK other than Qualified Investors, the offer of those Placing Shares to it is not treated under the EU Prospectus Regulation or UK Prospectus Regulation (as applicable) as having been made to such persons;

7.  that neither it nor, as the case may be, its clients expect the Placing Parties to have any duties or responsibilities to such persons similar or comparable to the duties of "best execution" and "suitability" imposed by the FCA's Conduct of Business Source Book, and that the Placing Parties are not acting for it or its clients, and that the Placing Parties will not be responsible for providing the protections afforded to customers of the Placing Parties or for providing advice in respect of the transactions described herein;

8.  that it has made its own assessment of the Placing Shares and has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing and none of the Placing Parties 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, and will not provide, it with any material regarding the Placing Shares or the Company or any other person other than the information in this Announcement or the Publicly Available Information; nor has it requested the Placing Parties, the Company or any of their respective Affiliates, agents, directors, officers or employees or any person acting on behalf of any of them to provide it with any such information;

9.  that the only information on which it is entitled to rely on and on which it has relied in committing to subscribe for the Placing Shares is contained in this Announcement and the Publicly Available Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on this Announcement and the Publicly Available Information;

10.  that none of the Placing Parties nor the Company nor any of their respective Affiliates, agents, directors, officers or employees has made any representation or warranty to it, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of this Announcement or the Publicly Available Information;

11.  that it and the person(s), if any, for whose account or benefit it is subscribing for the Placing Shares is not subscribing for and/or purchasing Placing Shares as a result of any "directed selling efforts" as defined in Regulation S;

12.  that it and the person(s), if any, for whose account or benefit it is subscribing for the Placing Shares was given and it is not acquiring Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any Placing Shares into the United States of America;

13.  that it and the person(s), if any, for whose account or benefit it is subscribing for Placing Shares is, and at the time it subscribes for the Placing Shares will be either (a) outside the United States of America and acquiring the Placing Shares in an "offshore transaction" as defined in and pursuant to Regulation S; or (b) if in the United States of America, a qualified institutional buyer within the meaning of Rule 144A under the Securities Act and will have duly executed an investor letter in a form provided to it;

14.  that it is not a national or resident of Canada, Australia, New Zealand, the Republic of South Africa or Japan or a corporation, partnership or other entity organised under the laws of Canada, Australia, New Zealand, the Republic of South Africa or Japan and that it will not offer, sell, renounce, transfer or deliver, directly or indirectly, any of the Placing Shares in Canada, Australia, New Zealand, the Republic of South Africa or Japan or to or for the benefit of any person resident in Canada, Australia, New Zealand, the Republic of South Africa or Japan and each Placee acknowledges that the relevant exemptions are not being obtained from the Securities Commission of any province of Canada, that no document has been or will be lodged with, filed with or registered by the Australian Securities and Investments Commission or Japanese Ministry of Finance and that the Placing Shares are not being offered for sale and may not be, directly or indirectly, offered, sold, transferred or delivered in or into Canada, Australia, New Zealand, the Republic South Africa or Japan;

15.  that it does not have a registered address in, and is not a citizen, resident or national of, any jurisdiction in which it is unlawful to make or accept an offer of the Placing Shares and it is not acting on a non-discretionary basis for any such person;

16.  that it has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted, and will not, directly or indirectly, distribute, forward, transfer or otherwise transmit, any presentation or offering materials concerning the Placing or the Placing Shares to any persons within the United States of America;

17.  that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as the Joint Bookrunners may in their discretion determine and without liability to such Placee;

18.  that it is entitled to subscribe for and/or purchase Placing Shares under the laws of all relevant jurisdictions which apply to it and that it has fully observed such laws and obtained all governmental and other consents which may be required thereunder or otherwise and complied with all necessary formalities and that it has not taken any action which will or may result in the Company or the Placing Parties or any of their respective directors, officers, employees or agents acting in breach of any regulatory or legal requirements of any territory in connection with the Placing or its acceptance;

19.  that it has obtained all necessary consents and authorities to enable it to give its commitment to subscribe for and/or purchase the Placing Shares and to perform its subscription and/or purchase obligations;

20.  that where it is acquiring Placing Shares for one or more managed accounts, it is authorised in writing by each managed account: (a) to acquire the Placing Shares for each managed account; (b) to make on its behalf the representations, warranties, acknowledgements, undertakings and agreements in this Appendix and this Announcement of which it forms part; and (c) to receive on its behalf any investment letter relating to the Placing in the form provided to it by the relevant Placing Party;

21.  that if in a member state of the EEA, it is a "Qualified Investor" within the meaning of Article 2(e) of the EU Prospectus Regulation;

22.  that if in the United Kingdom, it is a "Qualified Investor" within the meaning of Article 2(e) of the UK Prospectus Regulation and is either: (a) a person of a kind described in paragraph 5 of Article 19 (persons having professional experience in matters relating to investments and who are investment professionals) of the Order; or (b) a person of a kind described in paragraph 2 of Article 49 (high net worth companies, unincorporated associations, partnerships or trusts or their respective directors, officers or employees) of the Order; or (c) a person to whom it is otherwise lawful for this Announcement to be communicated and in the case of (a) and (b) undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

23.  that, unless otherwise agreed by the relevant Joint Bookrunner, it is a qualified investor (as defined in section 86(7) of the Financial Services and Markets Act 2000, as amended ("FSMA"));

24.  that, unless otherwise agreed by the relevant Joint Bookrunner, it is a "professional client" or an "eligible counterparty" within the meaning of Chapter 3 of the FCA's Conduct of Business Sourcebook and it is purchasing Placing Shares for investment only and not with a view to resale or distribution;

25.  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;

26.  that any money held in an account with the relevant Joint Bookrunner (or its nominees) on its behalf and/or any person acting on its behalf will not be treated as client money within the meaning of the rules and regulations of the FCA. Each Placee further acknowledges that the money will not be subject to the protections conferred by the FCA's client money rules. As a consequence, this money will not be segregated from the relevant Joint Bookrunner's (or its nominee's) money in accordance with such client money rules and will be used by the relevant Joint Bookrunner in the course of its own business and each Placee will rank only as a general creditor of the Relevant Joint Bookrunner;

27.  that it will (or will procure that its nominee will) if applicable, make notification to the Company of the interest in its ordinary shares in accordance with the Disclosure Guidance and Transparency Rules published by the FCA;

28.  that it is not, and it is not acting on behalf of, a person falling within subsections (6), (7) or (8) of sections 67 or 70 respectively or subsections (2) and (3) of section 93 or subsection (1) of section 96 of the Finance Act 1986;

29.  that if it has received any "inside information" as defined in the EU Market Abuse Regulation as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR") about the Company in advance of the Placing, it has not: (i) dealt (or attempted to deal) in the securities of the Company; (ii) encouraged, recommended, induced or required another person to deal in the securities of the Company; or (iii) disclosed such information to any person except as permitted by UK MAR and the EU Prospectus Regulation, prior to the information being made publicly available;

30.  that it will not deal or cause or permit any other person to deal in all or any of the Placing Shares which it is subscribing for and/or purchasing under the Placing unless and until Admission becomes effective;

31.  that it appoints irrevocably any director of the relevant Joint Bookrunner as its agent for the purpose of executing and delivering to the Company and/or its registrars any document on its behalf necessary to enable it to be registered as the holder of the Placing Shares;

32.  that, as far as it is aware it is not acting in concert (within the meaning given in The City Code on Takeovers and Mergers) with any other person in relation to the Company, save as previously disclosed to the Placing Parties;

33.  that this Announcement does not constitute a securities recommendation or financial product advice and that none of the Placing Parties nor the Company has considered its particular objectives, financial situation and needs;

34.  that it has sufficient knowledge, sophistication and experience in financial, business and investment matters as is required to evaluate the merits and risks of subscribing for or purchasing the Placing Shares and is aware that it may be required to bear, and it, and any accounts for which it may be acting, are able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing;

35.  that it will indemnify and hold the Company and the Placing Parties and their respective Affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the Company and the Placing Parties will rely on the truth and accuracy of the confirmations, warranties, acknowledgements and undertakings herein and, if any of the foregoing is or becomes no longer true or accurate, the Placee shall promptly notify the Placing Parties and the Company. All confirmations, warranties, acknowledgements and undertakings given by the Placee, pursuant to this Announcement (including this Appendix) are given to all Placing Parties and the Company and will survive completion of the Placing and Admission;

36.  that time shall be of the essence as regards its obligations pursuant to this Appendix;

37.  that it is responsible for obtaining any legal, financial, tax and other advice that it deems necessary for the execution, delivery and performance of its obligations in accepting the terms and conditions of the Placing, and that it is not relying on the Company or the Placing Parties to provide any legal, financial, tax or other advice to it;

38.  that all dates and times in this Announcement (including this Appendix) may be subject to amendment and that the Placing Parties shall notify it of such amendments;

39.  that (i) it has complied with its obligations under the Criminal Justice Act 1993, Part VIII of FSMA and the Market Abuse Regulation, (ii) in connection with money laundering and terrorist financing, it has complied with its obligations under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended),the Terrorism Act 2006 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and (iii) it is not a person: (a) with whom transactions are prohibited under the Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury; (b) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or (c) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations (together, the "Regulations"); 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 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 and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to the relevant Placing Party such evidence, if any, as to the identity or location or legal status of any person which the relevant Placing Party may request from it in connection with the Placing (for the purpose of complying with such Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by the relevant Placing Party on the basis that any failure by it to do so may result in the number of Placing Shares that are to be subscribed for and/or purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as the relevant Placing Party may decide in its absolute discretion;

40.  that it will not make any offer to the public of those Placing Shares to be subscribed for and/or purchased by it for the purposes of the Prospectus Regulation Rules made by the FCA pursuant to Prospectus Regulation Rules Instrument 2019 (FCA 2019/80);

41.  that, in relation to any Placees located in Australia, it is a "wholesale investor" being a sophisticated or experienced investor meeting the criteria in sections 708(8) or (10) of the Corporations Act 2001 (the "Corporations Act") or a "professional investor" (as defined in the Corporations Act) or does not otherwise require disclosure pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the Placing Shares without disclosure to investors under Chapter 6D of the Corporations Act;

42.  that it is not acquiring the Placing Shares for the purposes of selling or transferring them, or granting, issuing or transferring interests in, or options or warrants over, them, within Australia within the period of 12 months after the date of allotment except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act;

43.  that, in relation to any Placee located in Switzerland, it is a professional investor as defined under FINSA;

44.  that, in relation to any Placee located in Israel, it is a person who is listed in the first schedule of the Israeli Securities Law - 1968;

45.  that, in relation to any Placee located in Hong Kong, it is a professional investor as defined under the Securities and Futures Ordinance (Cap. 571);

46.  that, in relation to any Placee resident in Canada, it is purchasing, or deemed to be purchasing, as principal and is an accredited investor, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and is a permitted client, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations;

47.  that it will not distribute any document relating to the Placing Shares and it will be acquiring the Placing Shares for its own account as principal or for a discretionary account or accounts (as to which it has the authority to make the statements set out herein) for investment purposes only and it does not have any contract, understanding or arrangement with any person to sell, pledge, transfer or grant a participation therein to such person or any third person with respect of any Placing Shares; save that if it is a private client stockbroker or fund manager it confirms that in purchasing the Placing Shares it is acting under the terms of one or more discretionary mandates granted to it by private clients and it is not acting on an execution only basis or under specific instructions to purchase the Placing Shares for the account of any third party;

48.  that it acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and Wales 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, 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 the Company or the Placing Parties in any jurisdiction in which the relevant Placee is incorporated or in which its assets are located or any of its securities have a quotation on a recognised stock exchange;

49.  that any documents sent to Placees will be sent at the Placees' risk. They may be sent by post to such Placees at an address notified to the relevant Placing Party;

50.  that neither the Placing Parties nor the Company owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement;

51.  that the Joint Bookrunners or any of their respective Affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares;

52.  that no prospectus, admission document or other offering document has been or will be prepared in connection with the Placing and it has not received and will not receive a prospectus, admission document or other offering document in connection with the Placing or the Placing Shares; and

53.  that if it has received any confidential price sensitive information concerning the Company in advance of the publication of this Announcement, it has not: (i) dealt in the securities of the Company; (ii) encouraged, required, recommended or induced another person to deal in the securities of the Company; or (iii) disclosed such information to any person, prior to such information being made publicly available.

The Company, the Placing Parties and their respective Affiliates will rely upon the truth and accuracy of each of the foregoing representations, warranties, acknowledgements and undertakings which are given to the Placing Parties (for their own benefit and, where relevant, the benefit of any person acting on their behalf) and are irrevocable.

The provisions of this Appendix may be waived, varied or modified as regards specific Placees or on a general basis by the Placing Parties.

The agreement to settle a Placee's subscription and/or purchase (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor any of the Placing Parties will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and the Placing Parties in the event that any of the Company and/or any of the Placing Parties have incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify the Placing Parties accordingly.

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 outside the UK by them or any other person on the subscription or purchase by them of any Placing Shares or the agreement by them to subscribe for or purchase any Placing Shares.

This Announcement has been issued by, and is the sole responsibility, of the Company. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Placing Parties or by any of their respective Affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

No statement in the Placing Documents is intended to be a profit forecast or estimate, and no statement in the Placing Documents should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

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

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, the Placing Documents.

Pursuant to the General Data Protection Regulation as domesticated into UK law by virtue of the European Union (Withdrawal) Act 2018 and implemented in the UK by the Data Protection Act 2018 ("GDPR") the Company and/or the Placing Parties may hold personal data (as defined in the GDPR) relating to past and present shareholders. Personal data may be retained on record for a period exceeding six years after it is no longer used. The Company and/or the Placing Parties will only process such information for the purposes set out below (collectively, the "Purposes"), being to: (a) process its personal data to the extent and in such manner as is necessary for the performance of their obligations under the contractual arrangements between them, including as required by or in connection with its holding of Ordinary Shares, including processing personal data in connection with credit and money laundering checks on it; (b) communicate with it as necessary in connection with its affairs and generally in connection with its holding of Ordinary Shares; (c) provide personal data to such third parties as the Company and/or the Placing Parties may consider necessary in connection with its affairs and generally in connection with its holding of Ordinary Shares or as the GDPR may require, including to third parties outside the EEA; and (d) without limitation, provide such personal data to their respective affiliates for processing, notwithstanding that any such party may be outside the EEA; and (e) process its personal data for the Company's and/or each Placing Party's  internal administration.

By becoming registered as a holder of Placing Shares, each Placee acknowledges and agrees that the processing by the Company and/or the Placing Parties of any personal data relating to it in the manner described above is undertaken for the purposes of: (a) performance of the contractual arrangements between them; and (b) to comply with applicable legal obligations. In providing the Company and/or the Placing Parties with information, it hereby represents and warrants to each of them that it has notified any data subject of the processing of their personal data (including the details set out above) by the Company and/or the Placing Parties and their respective affiliates and group companies, in relation to the holding of, and using, their personal data for the Purposes. Any individual whose personal information is held or processed by a data controller: (a) has the right to ask for a copy of their personal information held; (b) to ask for any inaccuracies to be corrected or for their personal information to be erased; (c) object to the ways in which their information is used, and ask for their information to stop being used or otherwise restricted; and (d) ask for their personal information to be sent to them or to a third party (as permitted by law). A data subject seeking to enforce these rights should contact the relevant data controller. Individuals also have the right to complain to the UK Information Commissioner's Office about how their personal information has been handled.

 

 

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RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
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