This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 ("MAR"). Market soundings, as defined in MAR, were taken in respect of the Fundraising, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities. 

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

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN CYANCONNODE HOLDINGS PLC OR ANY OTHER ENTITY IN ANY JURISDICTION.

CyanConnode Holdings plc

("CyanConnode", the "Company" or together with its subsidiaries the "Group")

Proposed Placing and Subscription to raise up to £8.6 million

Proposed Share Consolidation

CyanConnode (AIM:CYAN.L), the world leader in narrowband radio mesh networks, announces a proposed fundraising of up to approximately £8.6 million, by way of a conditional Placing and Subscription of up to 30,852,488 ordinary shares ("Fundraising Shares"), at a price of 28 pence per share (the "Issue Price") with both existing and new institutional investors. The Fundraising Shares and Consolidated Shares will rank pari passu in all other respects with the Company's Existing Ordinary Shares. Peter Hutton and Paul Ratcliff, directors of the Company, intend to participate in the Fundraising.

Key highlights

·      Proposed Fundraising to raise up to approximately £8.6 million through the issue of up to 30,852,488 Fundraising Shares to existing and new institutional investors at 28 pence per Consolidated Share

·      The Issue Price (as adjusted for the Share Consolidation) represents a discount of 15.2 per cent. to the closing price on 14 September 2017, being the last trading date prior to announcement of the proposed Fundraising

·      The Company has received advance assurance from HMRC that the Fundraising Shares to be issued pursuant to the Placing and Subscription will rank as 'eligible shares' for the purposes of EIS and will be capable of being a 'qualifying holding' for the purposes of investment by VCTs

·      The net proceeds of the Fundraising will be used to fund future growth by investing in staff, research and development and working capital to execute on the Company's order book, pipeline and growth plan

·      Proposed Share Consolidation whereby Shareholders shall exchange every 200 Existing Ordinary Shares of their holding for 1 Consolidated Share

·      The Fundraising and Share Consolidation are conditional, inter alia, upon Shareholder approval at a general meeting of the Company which is expected to be held at Merlin Place, Milton Road, Cambridge, CB4 0DP at 11.00 a.m. on 2 October 2017 (the "General Meeting")

Those Ordinary Shares issued pursuant to the Placing will be offered by way of an accelerated bookbuild ("Bookbuild"), which will be launched immediately following this announcement. finnCap Ltd ("finnCap") will be acting as sole bookrunner in connection with the Bookbuild. A further announcement will be made in due course to confirm completion of the Bookbuild.

The Placing is subject to the terms and conditions set out in the appendix (the "Appendix") to this announcement (which forms part of this announcement (this announcement and the Appendix together being, this "Announcement")). The Placing is not underwritten.

Further information explaining why the Board considers the Fundraising and Share Consolidation to be in the best interests of the Company and its Shareholders as a whole and why the Directors unanimously recommend that Shareholders vote in favour of the resolutions to be proposed at the General Meeting is set out below in this announcement.

Unless otherwise defined, all capitalised terms in this announcement are defined in this announcement.

Enquiries:

About CyanConnode

CyanConnode is a world leader in narrowband RF mesh networks that enable Omni Internet of Things (IoT) communications. Its innovative solutions use sub GHz frequencies and are optimised for exceptional performance. Ultimesh solutions provide end-to-end quality of service and total cost of ownership and Panmesh delivers standards-based IPv6 solutions, enabling rapid innovation for the implementation of 3rd party applications. Through its global partner eco-system, CyanConnode provides customers with the flexibility and choice required to converge networks for applications in smart cities and IoT, delivering increased customer value.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Each of the items and dates above is subject to change. Any such change will be notified by an announcement on a Regulatory Information Service.

DEFINITIONS

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

1              Introduction

The Company is proposing to raise up to approximately £8.6 million (before the deduction of fees and expenses) through the Fundraising comprising the issue of up to 16,995,349 Placing Shares and up to 13,857,139 Subscription Shares at 28 pence per Consolidated Share.

Each of the Placing and Subscription are conditional, inter alia, on the passing of certain Resolutions at the General Meeting, with General Admission becoming effective by no later than 8.00 a.m. on 4 October 2017 (or such other time and/or date, being no later than 8.00 a.m. on 2 November 2017, as the Company and finnCap may agree) and the Placing Agreement between the Company and finnCap becoming unconditional and not being terminated prior to General Admission (in accordance with its terms). It is expected that the Consolidated Shares, EIS/VCT Placing Shares and 5,482,142 Subscription Shares will be admitted to trading on AIM on or around 8.00 a.m. on 3 October 2017 and that the General Placing Shares and 6,589,283 Subscription Shares will be admitted to trading on AIM on or around 8.00 a.m. on 4 October 2017. In addition it is expected that 1,785,714 Subscription Shares will be admitted to trading on AIM on or around 8.00 a.m. on 10 April 2018.

The Board believes that raising equity finance by way of the Fundraising is the most appropriate method of financing for the Company at this time. This allows both existing and new institutional investors to be targeted and to participate in the Placing and to provide additional growth and development funding for the Company. The Board believes that the potential value creation for the benefit of Shareholders arising from the Fundraising outweighs its dilutive effects as it strengthens the Group's balance sheet and allows the Group to execute on its order book, pipeline and growth strategy more effectively.

In the event that the Placing and Subscription do not complete, the Fundraising will not proceed.

In addition, the Board is proposing to undertake a restructuring of the Company's share capital to take effect prior to EIS/VCT Admission. In order to consolidate the number of Existing Ordinary Shares in issue, the Share Consolidation has been proposed, such that each Shareholder will receive 1 Consolidated Share for every 200 Existing Ordinary Share held.

2              Background to and reasons for the Fundraising

Current trading

The order book (representing the value of purchase orders received but not yet delivered) currently stands at £28 million giving a high degree of comfort over 2018 revenues. Additionally, the Company has £24 million of expected software license/support revenue from the UK smart metering contract, which is expected to start rolling out in significant volumes in 2018. The total current sales pipeline of potential contracts to close within a window of 6-12 months stands at $358 million, of which $84 million are in India and $274 million are in other developing and developed markets across the world.

The Company has made significant inroads into executing on its model since the start of the year, further growing its order book and laying down the foundations for increased levels of deployment, which will underpin significant revenue growth in the coming months and years. CyanConnode has developed its software solutions and expanded its geographical presence. This further highlights the Company's ability to win contracts from both existing and new clients and to further develop its ecosystem of partners. CyanConnode has now established a model to benefit from increasing gross margins as the products and services it provides evolves and the Company is focused on delivery of its growing order book.

On 15 September 2017, the Company announced its interim results for the six months ended 30 June 2017. At that time, cash held by the company was £3 million and, as such, the Directors believe that the Fundraising will enable the Company to execute on its order book and pipeline.

India

Since the beginning of the year, the size of the pipeline in India has increased significantly with several tenders now active for public utility projects each representing hundreds of thousands of meters. Furthermore, the Government of India has started the process of empanelling solution providers for the rollout of millions of meters. CyanConnode has established a leadership position in the Indian market. The Company is very well positioned to win the communications solutions element of these large tenders as India progresses towards the Government's target of 35 million smart meters deployed by 2019.

In July, the Company was awarded a £0.9 million purchase order from India. Significantly this order was from Genus Power Infrastructures Ltd, a Tier 1 meter provider with the largest installed base in India and supplier to multiple utilities. Furthermore, this was the first volume order from India for CyanConnode's IPv6 solution, reflecting one of the key benefits of the Connode acquisition last year. Not only has the acquisition of the standards-based software opened up a range of new potential territories but it has also improved the Group's ability to win new contracts within existing territories. CyanConnode will supply its standards-based hardware, services and Head End Software licenses to Genus. The software will be charged on a per meter per year basis with an annual maintenance contract, delivering a recurring revenue stream over the initial four-year contract term.

In September 2017, Anil Daulani was appointed as Managing Director India, with responsibility for managing the India operation including sales, customer delivery, technical pre-sales and support. Anil joined CyanConnode from Tech Mahindra, where he held the position of Global Head & Vice President Utilities for the last five years. Prior to joining Tech Mahindra, Anil led the Indian utilities business initiatives for HCL Infosystems for seven years. Anil is a highly experienced executive with knowledge of both the energy sector and IT solutions and has established strategic relationships with CEO/CXO officers at both public and private utilities, and has been instrumental in closing over $300 million in utilities business during the last 10 years of his tenure.

Rest of World

During the first six months of 2017, the Company received orders to the value of $19 million from an eastern European meter manufacturer partner for a utility customer in Bangladesh. The initial order, worth £4.2m, was won in February 2017 and was the Company's first order for a utility customer in the region. The purchase order was for the supply of CyanConnode's AMI solution for a 150,000 unit smart metering deployment with CyanConnode's hardware being shipped to the partner's production facility over the next 12-18 months for integration with its smart meters, before then being shipped as a complete solution to the utility customer site in Bangladesh.

This contract was then extended in June 2017 and August 2017 with the customer increasing the number of units to 550,000 to meet increased requirements - increasing the total value of the order to £14.7 million. CyanConnode will provide its Head End Server Software, which will be hosted by the energy management systems customer, with annual software license income being recognized over a ten year contractual period following successful smart meter implementation. The recurring revenue software licenses and annual maintenance contract, which represent 50% of the total purchase order value, will be paid annually in advance and charged on a per meter per year basis.

In the Queen's speech to the UK Parliament in June, the Government's commitment to rollout smart metering was re-affirmed including a Government statement that "smart meters are a vital upgrade to energy infrastructure bringing our energy infrastructure into the twenty first century". The communications infrastructure required for the rollout of smart metering is now operational. CyanConnode has been notified that Toshiba has delivered the first narrowband RF mesh hubs to Telefonica and the current expectation is that smart meters will be deployed in 2H 2017 in modest volumes, but with a significant volume ramp up from Q1 2018 onwards.

The Company has a strong and growing order book and the nature of its model, focusing on hardware installations followed by the commencement of long-term software license payments, provides high levels of visibility while also enabling further margin improvements. These key fundamentals underpin the Board's significant confidence in the Company's ability to deliver on continued growth while there is significant scope for scalability within all the markets they are operating in - with over 100 million potential customers across Iran, Bangladesh and the UK, where customer contracts are already in place, in addition to the huge growth opportunity in India.

Use of Proceeds

The net proceeds of the Fundraising will be used:

·      to fund staffing costs to continue the delivery of customer projects won in the Company's markets, as well as to secure new orders and maintain CyanConnode's leadership position in key markets;

·      to continue with development and delivery of solutions that are being specifically requested by customers;

·      to further develop CyanConnode's narrowband mesh network solutions to retain a competitive advantage;

·      to further invest in business development initiatives to capitalise on opportunities in the Company's existing emerging markets and to secure orders in additional markets; and

·      for ongoing growth and development

3              Details of the Placing and Subscription

The Company proposes to raise, in aggregate, up to approximately £8.6 million (by way of a placing of up to 16,995,349 Placing Shares and subscriptions for up to 13,857,139 Subscription Shares with certain new and existing investors representing 25.6 per cent. of the Enlarged Share Capital, at a price of 28 pence per Fundraising Share.

The Issue Price (as adjusted for the Share Consolidation) represents a discount of 15.2 per cent. to the closing price of 0.165 pence on 14 September 2017, being the last Business Day prior to the publication of this Announcement.  

In connection with the Subscription, the Subscribers have entered into the Subscription Agreements. One Subscriber has subscribed for 9,999,998 Subscription Shares, of which 5,482,142 Subscription Shares will be included in the EIS/VCT Admission, 2,732,142 Subscription Shares will be included in the General Admission and 1,785,714 Subscription Shares will be included in the April Admission.

Shareholders should also note that it if the Share Consolidation Resolution is not passed; the Fundraising will still occur, although the number of Fundraising Shares Issued will be multiplied by 200 and the Issue Price will be divided by 200.

Related Party Transaction

John Stamp is a substantial shareholder of the Company, being interested in 18.67 per cent of the Existing Ordinary Shares. Nightingale (being an associate company of John Stamp) constitutes a related party of the Company and its participation in the Subscription is considered a related party transaction under the AIM Rules for Companies. John Cronin, Simon Smith and Harry Berry are considered independent directors for the purposes of AIM Rule 13, and having consulted with the Company's nominated adviser, finnCap Ltd, consider that the terms of Nightingale's investment are fair and reasonable insofar as the Company's shareholders are concerned.

Director Participation

Peter Hutton and Paul Ratcliff have indicated their intention to subscribe for shares. The subscription by the Directors would constitute a related party transaction for the purposes of AIM Rule 13.

Admission

An application will be made to the London Stock Exchange for the Consolidated Shares and the Fundraising Shares to be admitted to trading on AIM. The Consolidated Shares and the Fundraising Shares will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of the Ordinary Shares following Admission. It is expected that EIS/VCT Admission will become effective, and that dealings in all of the Consolidated Shares, EIS/VCT Placing Shares and 5,482,142 of the Subscription Shares on AIM will have commenced by 8.00 a.m. on 3 October 2017. It is expected that General Admission will become effective, and that dealings in all of the General Placing Shares and 6,589,283 of the Subscription Shares will have commenced by 8.00 a.m. on 4 October 2017. It is expected that April Admission will become effective, and that dealings in 1,785,714 of the Subscription Shares will have commenced by 8.00 a.m. on 10 April 2018.

4              Share Consolidation

As at the date of this Announcement, the Company has 17,908,626,674 Existing Ordinary Shares in issue. The Company is proposing to reorganise its share capital by way of the Share Consolidation. Upon implementation of the Share Consolidation, Shareholders on the register of members of the Company at the Consolidation Record Date, will exchange every 200 Existing Ordinary Shares of their holding for 1 Consolidated Share. Shareholders with a holding of Existing Ordinary Shares which is not exactly divisible by 200 will have their holdings rounded down to the nearest whole number of Consolidated Shares.

The Board believes that the Share Consolidation will result in a more appropriate number of shares in issue for a company of CyanConnode's size in the UK market. The Share Consolidation may also help to make the Consolidated Shares more attractive to future investors and may result in a narrowing of the bid / offer spread, thereby improving liquidity while also lowering price volatility. 

Approval for the Share Consolidation will be sought by passing of the Share Consolidation Resolution at the General Meeting. It is proposed that the Share Consolidation will take effect following the conclusion of the General Meeting, and prior to Admission.

5              EIS/VCT 

On issue, the Consolidated Shares will not be treated as either "listed" or "quoted" securities for relevant tax purposes. Provided that the Company remains one which does not have any of its shares quoted on a recognised stock exchange (which for these purposes does not include AIM), the Consolidated Shares should continue to be treated as unquoted securities.

The Company has in the past obtained assurance from HMRC that shares in the Company represented a qualifying investment for a VCT and were capable of qualifying for EIS tax reliefs. The Company has also received advance assurance from HMRC that the Fundraising Shares to be issued pursuant to the Placing and Subscription will rank as 'eligible shares' for the purposes of EIS and will be capable of being a 'qualifying holding' for the purposes of investment by VCTs. 

The Directors consider that the Company has received, in the 12 months immediately prior to the Fundraising, investments totalling £956,708 under the EIS. Accordingly, the Placing and Subscription will limit funds up to £4,043,292 from VCTs, investors seeking EIS reliefs and any other State aid risk capital investors in order not to exceed the maximum amount of £5 million that can be raised annually through risk capital schemes. 

Potential shareholders or Shareholders of the Company who are in any doubt as to their tax position or who are subject to tax in jurisdictions other than the UK are strongly advised to consult their own independent financial adviser immediately.

IMPORTANT INFORMATION

The distribution of the Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted or prohibited by law or regulation. Persons distributing the Announcement must satisfy themselves that it is lawful to do so. No action has been taken by the Company or finnCap that would permit an offering of such shares or possession or distribution of the Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession the Announcement comes are required by the Company and finnCap to inform themselves about, and to observe, such restrictions.

The Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events. These statements, which sometimes use words such as "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by any such forward-looking statement. Statements contained in the Announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in the Announcement is subject to change without notice and neither finnCap nor, except as required by applicable law, the Company assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein. You should not place undue reliance on forward-looking statements, which speak only as of the date of the Announcement.

finnCap, which is authorised and regulated in the United Kingdom by the FCA, is acting as nominated adviser and broker to the Company in relation to the Placing and Admission and is not acting for any other persons in relation to the Placing and Admission. finnCap is acting exclusively for the Company and for no one else in relation to the matters described in the Announcement and is not advising any other person and accordingly will not be responsible to anyone other than the Company for providing the protections afforded to clients of finnCap, or for providing advice in relation to the contents of the Announcement or any matter referred to in it. The responsibilities of finnCap as the Company's nominated adviser under the AIM Rules for Companies and the AIM Rules for Nominated Advisers are owed solely to London Stock Exchange plc and are not owed to the Company or to any director or shareholder of the Company or any other person, in respect of his decision to acquire shares in the capital of the Company in reliance on any part of the Announcement, or otherwise.

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 finnCap or by any of its affiliates or agents as to, or in relation to, the accuracy or completeness of the Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.

APPENDIX - IMPORTANT INFORMATION FOR PLACEES ONLY

The Announcement, including this Appendix, and the information contained herein is restricted and is not for release, publication or distribution, in whole or in part, directly or indirectly, in, into or from the United States of America ("United States"), Australia, Canada, Japan, the Republic of South Africa, the Republic of Ireland, New Zealand or any other jurisdiction in which such release, publication or distribution would be unlawful (a "Prohibited Jurisdiction").

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 persons selected by finnCap who fall within the description that, if they were clients of finnCap, could be categorised as a "professional client" or an "eligible counterparty" within the meaning of Chapter 3 of the FCA's Conduct of Business Sourcebook and therefore fall within the provisions of point (1) of section (i) of Annex (III) to the Markets in Financial Instruments Directive and furthermore, who are: (a) persons in Member States of the European Economic Area (the "EEA") who are qualified investors as defined in section 86(7) of the Financial Services and Markets Act 2000, as amended ("FSMA"), ("qualified investors") being persons falling within the meaning of Article 2(1)(e) of the EU Prospectus Directive (which means Directive 2003/71/EC (as amended by Directive 2010/73/EC) and includes any relevant implementing directive measure in any member state) (the "Prospectus Directive"); and (b) in the United Kingdom, qualified investors who are persons who (i) have professional experience in matters relating to investments who fall within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order"); (ii) fall within article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc") of the Order and are qualified investors; or (iii) are persons to whom it may otherwise be lawfully communicated (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 relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

The Announcement is for information purposes only and does not itself constitute an offer for sale or subscription of any securities in the Company. The Announcement has been issued by and is the sole responsibility of the Company.

The 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 such jurisdiction. The Announcement is not an offer of or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Neither the United States Securities and Exchange Commission nor any securities regulatory authority of any state or other jurisdiction of the United States has approved or disapproved of an investment in the securities or passed upon or endorsed the merits of the Placing or the accuracy or adequacy of the contents of the Announcement. Any representation to the contrary is a criminal offence in the United States. No public offering of securities is being made in the United States. No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in the Announcement will not be accepted.

Each Placee should consult with its own advisers as to the legal, tax, business and related aspects of an investment in Placing Shares.

The price of shares in the Company 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 shares.

1.         Definitions

In this Appendix:

a)         "Admission" means the admission of the Placing Shares to trading on AIM under the EIS/VCT Admission or the General Admission (as appropriate, and each defined above in this Announcement);

b)         "AIM" means the AIM market operated and regulated by the London Stock Exchange plc;

c)         "Announcement" means the Company's regulatory announcement (set out above) of the Placing, together with this Appendix, expected to be released on or around 15 September 2017;

d)         "CJA" means the Criminal Justice Act 1993;

e)         "Company" or "CyanConnode" means CyanConnode Holdings plc;

f)          "EEA" means European Economic Area;

g)         "FCA" means the Financial Conduct Authority;

h)         "finnCap" means finnCap Ltd;

i)          "finnCap Person" means any person being (i) finnCap, (ii) an undertaking which is a subsidiary undertaking of finnCap, (iii) a parent undertaking of finnCap or (other than finnCap) a subsidiary undertaking of any such parent undertaking, or (iv) a shareholder, director, officer, agent or employee of any such person;

j)          "FSMA" means the Financial Services and Markets Act 200 (as amended);

k)         "Group" means the group comprising the Company and its subsidiary undertakings;

l)          "Long Stop Date" means the latest date for Admission, being 2 November 2017;

m)        "Market Abuse Regulation" means Market Abuse Regulation EU No 596/2014;

n)         "Order" means the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended);

o)         "New Ordinary Shares" means the ordinary shares of 2 pence each in the capital of the Company;

p)         "Placee" means any Relevant Person who is or becomes committed on a conditional basis to subscribe for Placing Shares under the Placing;

q)         "Placing" the placing of the Placing Shares at the Placing Price by finnCap pursuant to the Placing Agreement;

r)          "Placing Agreement" means the conditional placing agreement relating to the Placing entered into between the Company and finnCap;

s)         "Placing Price" means 28 pence per Placing Share the fixed price at which each Placing Share is to be made available for subscription under the Placing;

t)          "Placing Shares" means the 16,995,349 New Ordinary Shares to be issued pursuant to the Placing;

u)         "Prohibited Jurisdiction" means the United States, Australia, Canada, Japan, the Republic of South Africa, the Republic of Ireland, New Zealand or any other jurisdiction in which such release, publication or distribution of this Announcement would be unlawful;

v)         "Prospectus Directive" means Directive 2003/71/EC (as amended by Directive 2010/73/EC) and includes any relevant implementing directive measure in any member state;

w)        "Prospectus Rules" means the prospectus rules of the FCA;

x)         "Regulations" means the CJA, the Market Abuse Regulation, money laundering and terrorist financing under the Anti-Terrorism, Crime and Security Act 2001, the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2003, the Terrorism Act 2006, the Money Laundering Regulations 2007 and part VIII of FSMA;

y)         "Relevant Persons" means (a) persons in member states of the European Economic Area who are qualified investors as defined in section 86(7) of FSMA ("qualified investors"), being persons falling within the meaning of article 2(1)(e) of the Prospectus Directive; and (b) in the United Kingdom, qualified investors who are persons who (i) have professional experience in matters relating to investments and are "investment professionals" falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); (ii) are persons falling within article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc") of the Order and are qualified investors; and (iii) are persons to whom it may otherwise be lawfully communicated (all such persons together being referred to as "Relevant Persons");

z)          "Securities Act" means the US Securities Act of 1933;

aa)       "Subscription" means the subscription for Subscription Shares by the Subscribers at the Issue Price pursuant to the Subscription Agreements;

bb)       "Subscription Shares" means the 13,857,139 New Ordinary Shares to be issued to the Subscribers pursuant to the Subscription; and

cc)       "United States" means the United States of America; and terms defined elsewhere in this Announcement have the same meanings, unless the context requires otherwise.

2.         Placing

finnCap is acting as the Company's agent in respect of the Placing. finnCap will determine the extent of each Placee's participation in the Placing, which will not necessarily be the same for each Placee. No commissions will be paid to or by Placees in respect of their agreement to subscribe for any Placing Shares.

finnCap has entered into the Placing Agreement under which it has, on the terms and subject to the conditions set out in the Placing Agreement, agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price.

Each Placee will be required to pay to finnCap, on the Company's behalf, the Placing Price as the subscription sum for each Placing Share that it is required to subscribe for in accordance with the terms set out in or referred to in this Appendix. Each Placee's obligation to subscribe and pay for Placing Shares under the Placing will be owed to each of the Company and finnCap. Each Placee will be deemed to have read this Appendix in its entirety. Neither finnCap nor any other finnCap Person will have any liability (subject to applicable legislation and regulations) to Placees or to any person other than the Company in respect of the Placing.

Various dates referred to in this announcement are stated on the basis of the expected timetable for the Placing. It is possible that some of these dates may be changed. The expected date for EIS/VCT Admission is 3 October 2017 and the expected date for General Admission is 4 October 2017, and, in any event, the latest date for Admission is 2 November 2017 (the "Long Stop Date").

Placees' commitments in respect of Placing Shares will be made solely on the basis of the information contained in this announcement and on the terms contained in it. No admission document for the purposes of the AIM Rules for Companies, or prospectus, is required to be published, or has been or will be published, in relation to the Placing or the Placing Shares.

3.         Participation and settlement

Participation in the Placing is only available to persons who are invited to participate in it by finnCap.

A Placee's commitment to subscribe for a fixed number of Placing Shares under the Placing will be agreed orally with finnCap. Such agreement will constitute an irrevocable, legally binding commitment on such Placee's part to subscribe for that number of Placing Shares at the Placing Price on the terms and subject to the conditions set out or referred to in this Appendix and subject to the Company's constitution. After such agreement is entered into a written confirmation will be dispatched to the Placee by finnCap stating (i) the number of Placing Shares for which such Placee has agreed to subscribe, (ii) the aggregate amount such Placee will be required to pay for those Placing Shares, (iii) relevant settlement information, and (iv) settlement instructions. A settlement instruction form will accompany each written confirmation and, on receipt, should be completed and returned by the date and time stated in it.

Settlement of transactions in the Placing Shares will take place within the CREST system, subject to certain exceptions, on a "delivery versus payment" basis. finnCap reserves the right to require settlement for and/or delivery to any Placee of any Placing Shares by such other means as it may deem appropriate if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in the Announcement.

On the settlement date, each Placee must settle the full amount owed by it in respect of the Placing Shares allocated to it. A Placee whose Placing Shares are to be delivered to a custodian or settlement agent should ensure that the written confirmation is copied and delivered promptly to the appropriate person within that organisation.

4.         Placing conditions

The Placing is conditional on, among other things, (i) the Company having complied with its obligations and satisfied all conditions to be performed or satisfied by it under the Placing Agreement or the terms of this Announcement that fall to be performed or satisfied on or before Admission (unless waived by finnCap, where capable of waiver), (ii) the passing of one or more resolutions at a general meeting of the Company to be proposed in the notice of that meeting that is to be included in the Company's circular to its shareholders concerning the Placing and related matters, (iii) the warranties in the Placing Agreement being true and accurate and not misleading as at the date they are given or at any time between the entry into the Placing Agreement and Admission by reference to the facts and circumstances then subsisting, (iv) finnCap's obligations under the Placing Agreement not being terminated in accordance with its terms and the Placing Agreement becoming unconditional in all respects, and (v) Admission taking place by the relevant time and date stated in the Announcement. finnCap may extend the time and/or date for the fulfilment of any of the conditions referred to above to a time no later than 8.00 a.m. on the Long Stop Date. If any such condition is not fulfilled (and, if capable of waiver under the Placing Agreement, is not waived by finnCap) by the relevant time, the Placing will lapse and each Placee's rights and obligations in respect of the Placing will cease and terminate at such time.

Accordingly, if any of these conditions are not satisfied or, if applicable, waived, the Placing will not proceed. Shareholders should note that it is possible that EIS/VCT Admission occurs but General Admission does not, should any condition of the Placing Agreement be invalidated between EIS/VCT Admission and General Admission.

finnCap's obligations under the Placing Agreement may be terminated by finnCap at any time prior to Admission in certain circumstances including, among other things, following a material breach of the Placing Agreement by the Company or the occurrence of certain force majeure events. The exercise of any right of termination pursuant to the Placing Agreement, any waiver of any condition in the Placing Agreement and any decision by finnCap whether or not to extend the time for satisfaction of any condition in the Placing Agreement will be within finnCap's absolute discretion (as is the exercise of any right or power of finnCap that is referred to in this Appendix). finnCap will have no liability to any Placee or to anyone else in respect of any such termination, waiver or extension or any decision to exercise or not to exercise any such right of termination, waiver or extension.

5.         Placees' warranties and undertakings to the Company and finnCap

By agreeing with finnCap to subscribe for Placing Shares under the Placing, each Placee (and each person acting on a Placee's behalf) irrevocably acknowledges, confirms, warrants, represents and undertakes to, and agrees with, each of the Company and finnCap, in each case as a fundamental term of such Placee's application for Placing Shares and of the Company's obligation to allot and/or issue any Placing Shares to it or at its direction (save where finnCap expressly agrees in writing to the contrary), that:

a)       it agrees to and accepts all the terms and conditions set out in this Appendix;

b)       its rights and obligations in respect of the Placing will terminate only in the circumstances referred to in this Appendix and will not be subject to rescission or termination by it in any circumstances;

c)       it is not entitled to rely on any information (including, without limitation, any information contained in any management presentation given in relation to the Placing) other than that contained in the Announcement; the Announcement being the sole responsibility of the Company;

d)       it is not a client of finnCap in relation to the Placing and finnCap is not acting for it in connection with the Placing and will not be responsible to it in respect of the Placing for providing protections afforded to its clients under the rules of the FCA (the "FCA Rules") or for advising it with regard to the Placing Shares and finnCap shall not be responsible to it or any other person for providing the protections afforded to its customers whether under the FCA Rules or otherwise, or for advising it or any other person in respect of or in connection with such arrangements. In addition, any payment by it will not be treated as client money governed by the FCA Rules. It agrees that finnCap shall not be liable to it for any matter arising out of its role as placing agent or otherwise in connection with the Placing and that, where any such liability nevertheless arises as a matter of law, it will immediately waive any claim against finnCap which it may have in respect thereof;

e)       it has not relied on any representation or warranty in reaching its decision to subscribe for Placing Shares under the Placing and it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing;

f)        it has not been, and will not be, given any warranty or representation by any finnCap Person in relation to any Placing Shares, the Company or any other member of its Group and no finnCap Person will have any liability to it for any information contained in the Announcement or which has otherwise been published by the Company or for any decision by it to participate in the Placing based on any such information or on any other information provided to it;

g)       it will pay the full subscription sum at the Placing Price as and when required in respect of all Placing Shares for which it is required to subscribe under its Placing participation and will do all things necessary on its part to ensure that payment for such shares and their delivery to it or at its direction is completed in accordance with the standing CREST instructions (or, where applicable, standing certificated settlement instructions) that it has in place with finnCap or puts in place with finnCap;

h)       the issue to the Placee, or the person specified by such Placee for registration as holder of Placing Shares, will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services);

i)        its obligations under the Placing are valid, binding and enforceable and that it has all necessary capacity and authority, and has obtained all necessary consents and authorities to enable it to commit to participation in the Placing and to perform its obligations in relation thereto and will honour its obligations; 

j)        should any stamp duty or stamp duty reserve tax be payable on a Placee's subscription of shares under the Placing, this will be to the account of the Placee and neither the Company nor finnCap will be responsible in respect thereof and if any such person is obliged by law to pay any such tax, they shall be entitled to recover it from the Placee;

k)       it is permitted to subscribe for Placing Shares under the laws of all relevant jurisdictions which apply to it and it has complied, and will fully comply, with all such laws (including where applicable, 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 subscription, and it will provide promptly to finnCap such evidence, if any, as to the identity or location or legal status of any person which finnCap may request from it in connection with the Placing (for the purpose of complying with any such laws or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by finnCap on the basis that any failure by it to do so may result in the number of Placing Shares that are to be allotted and/or issued to it or at its direction pursuant to the Placing being reduced to such number, or to nil, as finnCap may decide;

l)        unless paragraph (m) below applies, it has neither received nor relied on any inside information (for the purpose of and section 56 of the CJA) in relation to its participation in the Placing;

m)      if it has received any inside information (for the purposes of the Market Abuse Regulation and section 56 of the CJA) in relation to the Company and its securities, it confirms that it has not: (a) dealt (or attempted to deal) in the securities of the Company; (b) encouraged, recommended or induced another person to deal in the securities of the Company; or (c) unlawfully disclosed inside information to any person, prior to the information being made publicly available;

n)       that it has identified its clients in accordance with the Regulations and that it has complied fully with its obligations pursuant to the Regulations;

o)       it will not distribute any press announcement relating to the Placing or any other offering material, directly or indirectly, in or into a Prohibited Jurisdiction;

p)       it has complied and will comply with all applicable provisions of the FSMA with respect to anything done or to be done by it in relation to any Placing Shares in, from or otherwise involving the United Kingdom and it has not made or communicated or caused to be made or communicated, and it will not make or communicate or cause to be made or communicated, any "financial promotion" in relation to Placing Shares in contravention of section 21 of FSMA;

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

r)        in the case of a Relevant Person who acquires any Placing Shares pursuant to the Placing acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, it represents and warrants that:

(i)            the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons other than Relevant Persons or in circumstances in which the prior consent of finnCap 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 other than Relevant Persons, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons;

s)       it has not and will not make any offer to the public of the Placing Shares for the purposes of section 102B FSMA;

t)        it agrees to be bound by the terms of the Company's articles of association;

u)       it is acting as principal only in respect of the Placing or, if it is acting for any other person (i) it is duly authorised to do so, (ii) it is and will remain liable to the Company and/or finnCap for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person), (iii) it is both an "authorised person" for the purposes of FSMA and a qualified investor acting as agent for such person, and (iv) such person is either (1) a FSMA qualified investor or (2) its "client" (as defined in section 86(2) of FSMA) that has engaged it to act as his agent on terms which enable it to make decisions concerning the Placing or any other offers of transferable securities on his behalf without reference to him;

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

w)      it will not treat any Placing Shares in any manner that would contravene any legislation applicable in any territory or jurisdiction and no aspect of its participation in the Placing will contravene any legislation applicable in any territory or jurisdiction in any respect or cause the Company or finnCap to contravene any such legislation in any respect;

x)       (in this paragraph "US person" and other applicable terms have the meanings that they have in Regulation S made under the Securities Act) (i) none of the Placing Shares have been or will be registered under the Securities Act or under the securities laws of any State of or other jurisdiction within the United States, (ii) subject to certain exceptions, Placing Shares may not be offered or sold, resold, or delivered, directly or indirectly, into or within the United States or to, or for the account or benefit of, any US person, (iii) it is (unless otherwise expressly agreed with finnCap) neither within the United States nor a US person, (iv) it has not offered, sold or delivered and will not offer, sell or deliver any of the Placing Shares to persons within the United States, directly or indirectly, (v) neither it, its affiliates, nor any persons acting on its behalf, has engaged or will engage in any directed selling efforts with respect to the Placing Shares, (vi) it will not be subscribing Placing Shares with a view to resale in or into the United States, and (vii) it will not distribute the Announcement or any offering material relating to Placing Shares, directly or indirectly, in or into the United States or to any persons resident in the United States;

y)       it has consented to receive information in respect of securities of the Company and other price-affected securities (as defined in FSMA) which makes it an "insider" for the purposes of Part V of FSMA and the Market Abuse Regulation, and it agrees not to deal in any securities of the Company until such time as the inside information (as defined in FSMA) of which it has been made aware has been made public for purposes of FSMA or it has been notified by finnCap or the Company that the proposed Placing will not proceed and any unpublished price sensitive information of which it is aware has been publicly announced, and, other than in respect of its knowledge of the proposed Placing, it has neither received nor relied on any confidential price sensitive information concerning the Company or the Placing Shares;

z)       where it is acquiring Placing Shares for one or more managed accounts, it represents and warrants that 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, acknowledgments, undertakings and agreements in this Announcement; and (c) to receive on its behalf any investment letter relating to the Placing in the form provided to it by finnCap;

aa)     finnCap may itself agree to become a Placee in respect of some or all of the Placing Shares or by nominating any other finnCap Person or any person associated with any finnCap Person to do so;

bb)     time is of essence as regards its obligations under this Appendix;

cc)     neither it, its affiliates, nor any person acting on its or their behalf, has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D promulgated under the Securities Act) in connection with any offer and sale of the Placing Shares in the United States;

dd)     it will indemnify on an after-tax basis and hold the Company, finnCap, each finnCap Person 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 provisions of this Appendix shall survive after completion of the Placing;

ee)     it is an institution that has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares and it is experienced in investing in securities of this nature and in this sector 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. It has relied upon its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved;

ff)       to the fullest extent permitted by law, it acknowledges and agrees to the disclaimers contained in the Announcement;

gg)     its participation in the Placing would not give rise to an offer being required to be made by it or any person with whom it is acting in concert pursuant to Rule 9 of the City Code on Takeovers and Mergers;

hh)     it irrevocably appoints any director or employee of finnCap as its agent for the purposes of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares agreed to be taken up by it under the Placing;

ii)       this Appendix and any contract which may be entered into between it and finnCap and/or the Company pursuant to this Appendix or the Placing, and all non-contractual obligations arising between the Placee and finnCap and/or the Company in respect of the Placing, will be governed by and construed in accordance with the laws of England, for which purpose it submits (for 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 or relating to this Appendix or such contract, except that each of the Company and finnCap will have the right to bring enforcement proceedings in respect of any judgement obtained against such Placee in the English courts or in the courts of any other relevant jurisdiction;

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

kk)     any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to finnCap;

ll)       nothing in this Appendix will exclude any liability of any person for fraud on its part, and all times and dates in the Announcement are subject to amendment at the discretion of finnCap except that in no circumstances will the date scheduled for Admission be later than the Long Stop Date;

mm)   none of its rights or obligations in respect of the Placing is conditional on any other person agreeing to subscribe for any Placing Shares under the Placing and no failure by any other Placee to meet any of its obligations in respect of the Placing will affect any of its obligations in respect of the Placing;

nn)     finnCap does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement; and

oo)     it agrees that the Company and finnCap will rely upon the truth and accuracy of the foregoing conformations, representations, warranties, acknowledgements, undertakings and agreements which are given by each Placee (or persons acting on their behalf) to finnCap and the Company and are irrevocable.

The acknowledgments, confirmations, warranties, representations and undertakings contained in this Appendix are given to finnCap and the Company and are irrevocable and shall not be capable of termination in any circumstances.

6.         Payment default

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

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

7.         Overseas jurisdictions

The distribution of the Announcement and the offering and/or issue of shares pursuant to the Placing in certain jurisdictions is restricted by law. Persons who seek to participate in the Placing must inform themselves about and observe any such restrictions. In particular, the Announcement does not constitute or form part of any offer or invitation, or a solicitation of any offer or invitation, to subscribe for or acquire or sell or purchase or otherwise deal in Placing Shares in any Prohibited Jurisdiction.

8.         Placing Shares

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the then existing issued Ordinary Shares.

9.         Entire Agreement

The terms set out in this Announcement (including the Appendix) and the allocation of Placing Shares (including the subscription amount payable) as confirmed to a Placee, constitute the entire agreement to the terms of the Placing and a Placee's participation in the Placing to the exclusion of prior representations, understandings and agreements between them. Any variation of such terms must be in writing.

10.       Governing Law and Jurisdiction

The agreement arising out of acceptance of the Placing and any dispute or claim arising out of or in connection with the Placing or formation thereof (including non-contractual disputes or claims) shall be governed by and construed in accordance with the laws of England and Wales. Each Placee irrevocably agrees to submit to the exclusive jurisdiction of the courts of England and Wales to settle any claim or dispute that arises out of or in connection with the agreement arising out of acceptance of the Placing or its subject matter or formation (including non-contractual disputes or claims).

11.       General

References to time in the Announcement are to London, England time, unless otherwise stated.

All times and dates in the Announcement are subject to amendment at the discretion of finnCap.