Company Announcements

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28 November 2019

 

Codemasters Group Holdings Plc

 

("Codemasters" or the "Company")

 

Proposed Acquisition of Slightly Mad Studios Pte Ltd

 

and

 

Proposed placing

 

Codemasters is pleased to announce that it has agreed, subject to certain conditions, to acquire Slightly Mad Studios Pte Ltd ("SMS"), a leading racing video game developer, for a total potential consideration of up to approximately $196 million (£152.2 million) (the "Proposed Acquisition"). The consideration comprises initial consideration of $30 million (approximately £23.3 million), to be satisfied by the payment of £19.4 million in cash (being the Sterling equivalent of $25 million agreed between Codemasters and the Sellers), and the issue of 1,787,014 Ordinary Shares ("Initial Consideration Shares"), to the Sellers on Completion (the "Initial Consideration") and deferred and earn-out consideration of up to a further circa $166 million (approximately £128.9 million), to be satisfied in a mix of cash and Ordinary Shares, to be paid based on the achievement of certain milestones and earn-out performance targets over the calendar years 2020, 2021 and 2022.

 

Furthermore, the Company also announces its intention to conduct a placing of up to 9,523,809 new ordinary shares in the capital of the Company (the "Placing Shares") to institutional investors at a placing price of 210 pence per Placing Share (the "Placing Price") to raise gross proceeds of up to £20 million (together the "Placing"). The net proceeds raised from the Placing will be used to fund the cash component of the Initial Consideration.

 

SMS Acquisition Highlights and Rationale

 

·     Founded in 2009, SMS is an award winning multi-platform video game developer renowned for developing critically acclaimed and commercially successful racing franchises and games including Project CARS and Need For Speed^TM Shift. Previously, many of the SMS team worked together at SimBin and Blimey! Games where they were responsible for the highly respected GT Legends and GTR series of racing games.

·     The Proposed Acquisition is expected to further raise Codemasters' competitive barriers to entry in the racing game genre.

·     SMS strengthens and diversifies the Company's intellectual property ("IP") portfolio and enhances its product roadmap, bringing three incremental game launches to Codemasters during the year ending 31 March 2021. One of these games is Project CARS GO (a new mobile release), another is based on a licensed IP relating to a Hollywood blockbuster movie franchise ("Movie Franchise Game"), and the third game is based on a proven successful own franchise.

·     SMS provides additional scale to the Codemasters group, bringing more than 150 product development individuals with experience in the racing genre.

·     The Proposed Acquisition strengthens Codemasters' position as a market leading developer and publisher of racing games and provides additional influence with licensors, development partners and distribution platforms.

·     The Company will be able to leverage shared services and technology, operational and creative assets to generate efficiencies and an enhanced product offering.

·     The consideration for the Proposed Acquisition comprises (i) the Initial Consideration, (ii) deferred consideration to be satisfied by the issue of Ordinary Shares (with an aggregate market value at the time of issue of up to $5 million) and (iii) up to approximately $161 million over the next three years, to be satisfied by a mix of cash and Ordinary Shares subject to the achievement of certain milestones and earn-out targets.

·     The Proposed Acquisition is expected to deliver circa 30% adjusted earnings per share ("EPS") (together "Adjusted EPS") enhancement in FY21, being the first full year of ownership.

·     Codemasters' board of directors ("Board") intends, subject to satisfactory completion of necessary due diligence, to appoint SMS founder and majority shareholder, Ian Bell, to the Board as an executive director following Completion.

 

Placing Highlights

 

·     The Placing of up to 9,523,809 new Ordinary Shares at a Placing Price of 210 pence per Placing Share, to raise gross proceeds of up to £20 million. The Placing Shares will represent approximately 6.3 per cent. of the Company's Enlarged Share Capital (taking into account the issue of the Initial Consideration Shares) following Admission. The Placing Shares and the Initial Consideration Shares will, together, represent approximately 7.5 per cent. of the Company's Enlarged Share Capital following Admission.

·     The Placing is being conducted through an accelerated bookbuild process which will commence immediately following this announcement in accordance with the terms and conditions set out in the Appendix which forms part of this announcement.

·     Liberum Capital Limited ("Liberum") and Jefferies International Limited ("Jefferies") are acting as joint bookrunners ("Joint Bookrunners") in connection with the Placing. Timing of the closing of the Bookbuild and the allocation of Placing Shares will be at the discretion of the Joint Bookrunners.

·     The net proceeds of the Placing (expected to be approximately £19.5 million (approximately $25.1 million)) will be used to fund the cash component of the Initial Consideration.

 

Commenting on the Proposed Acquisition, Frank Sagnier, CEO of Codemasters, said:

"Codemasters' acquisition of SMS will create a global leader in the racing genre. Their focus on AAA quality and the passion that they put into everything they create mirrors our own. Both companies have a number of world renowned, successful franchises along with exciting product development pipelines, supported by leading IP and some of the best talent in the gaming industry.

The enlarged Codemasters will have greater scale and reach, diversified, predictable revenue streams and the opportunity to bring outstanding entertainment to a far wider audience. We welcome Ian and his team to the Codemasters family and can't wait to start working together to create the future generation of racing franchises."

Enquiries

Codemasters Group Holdings Plc                                                                                             Via Alma PR

Frank Sagnier, CEO                                                                                         

Rashid Varachia, CFO                                                                    

 

Liberum Capital Limited

(Nominated Adviser and Joint Bookrunner)                                                        +44 (0) 20 3100 2000

Neil Patel

Cameron Duncan

Ed Phillips

William Hall

 

Jefferies International Limited

(Joint Bookrunner)                                                                                                        +44 (0) 20 7029 8000

Ed Matthews

Luca Erpici

Laurene Danon

William Brown

 

Alma PR Ltd                                                                                                                        +44 (0) 20 3405 0206

Josh Royston                                                                                                                     codemasters@almapr.co.uk

Rebecca Sanders-Hewitt

Helena Bogle

Sam Modlin                                       

 

Notes to Editors

 

ABOUT CODEMASTERS:

 

Codemasters (AIM:CDM) is an award winning British video game developer and publisher with over 30 years of heritage. The Company specialises in high quality racing games including DiRT, GRID and the BAFTA award-winning official F1® series of video games.

 

Codemasters' LEI number is: 213800NOITSDQVNP5W91

 

Overview of SMS

 

Founded in 2009, SMS is an award winning multi-platform video game developer renowned for developing critically acclaimed and commercially successful racing franchises and games including Project CARS and Need For SpeedTM Shift. Previously, many of the SMS team worked together at SimBin and Blimey! Games where they were responsible for the highly respected GT Legends and GTR series of racing games. SMS is head-quartered in London and has over 170 employees and contractors working remotely around the world, with more than 150 of such persons directly engaged in product development.

 

SMS has proprietary technology and a games engine named MADNESS. MADNESS has been built over the past decade by some of the most talented people in professional game development within the racing genre, enabling the production of the highest quality racing games across PC, console, mobile and VR platforms.

 

SMS is expecting to launch two own IP titles during the year to 31 March 2021 ("FY21"), one being an iteration of a highly successful game on PC and Console, and the other being the first ever mobile version of Project CARS (Project CARS GO). SMS is also developing the Movie Franchise Game for release on PC and Console during FY21.

 

For the year ended 31 December 2018, SMS reported turnover of £7.3 million, a loss before tax of £5.2 million and had net assets of £3.8 million. SMS' recent financial performance over the last four years is detailed in the table below:

 

£m (31 December year-end)	FY15	FY16	FY17	FY18
Games released	Project Cars		Project Cars 2
Royalty income	13.3	5.9	10.0	3.0
Development & other revenue	5.0	6.0	4.9	4.3
Total revenue	18.3	11.9	14.8	7.3
Gross profit	7.7	3.5	3.2	(2.3)
Administrative expenses	(4.5)	(6.0)	(2.2)	(2.7)
Finance expenses	(0.1)	(0.0)	(0.5)	(0.3)
Other gains / (Losses)	(0.1)	0.7	(0.0)	0.0
Profit/(Loss) before tax	3.0	(1.7)	0.4	(5.2)
Tax including VGTR	0.5	1.9	2.4	2.9
Profit/(Loss) after tax	3.5	0.2	2.7	(2.3)
Cash flow	1.7	(1.0)	3.8	(3.1)
Trade & other receivables	3.4	6.5	2.6	5.4
Tax receivables	1.5	2.6	8.0	3.2
Cash	1.7	0.6	4.3	1.2
Other assets	2.1	0.2	0.2	0.1
Total assets	8.7	9.9	15.1	9.9
Trade & other payables	(2.6)	(2.3)	(1.4)	(2.9)
Loans & Borrowings	(0.5)	(2.2)	(7.2)	(3.2)
Net Assets	5.6	5.4	6.5	3.8

 

 

This historic financial profile includes two own IP game launches: Project Cars during the year ended 31 December 2015 and Project Cars 2 during the year ended 31 December 2017. In both 2015 and 2017, being the years in which SMS released a game, SMS generated increased revenues and reported a profit before tax. Codemasters expects SMS to release three games during FY21 and as a result SMS' revenue and profit are expected to be significantly higher in FY21 than the historic financial information detailed above. One of these games is Project CARS GO (a new mobile release), another is the Movie Franchise Game, and the third game is based on a proven successful own IP franchise. Codemasters expects SMS to release a further two games during its financial year ending 31 March 2023, one being an own IP game and the other being a second Movie Franchise Game, both on PC and console. Further details of the expected financial contribution of SMS to Codemasters is detailed below in the Outlook section.

 

The principal revenue streams of SMS comprise both milestone payments, which are paid on achievement of specific targets during a game's development, and royalties paid by the publisher. In respect of SMS' own IP release in FY21, the royalties will be split equally between SMS and the publisher. In respect of the Movie Franchise Game, the royalties will be split equally amongst SMS, the publisher and the IP rights holder.

 

SMS is employee owned with the single largest shareholder being Ian Bell, CEO and founder of SMS, who owns approximately 67.2% of SMS. The Board intends, subject to satisfactory completion of necessary due diligence, to appoint Ian Bell as an executive director of the Company following Completion. The other existing members of the SMS senior management team are Andy Garton (Head of Development & Deputy CEO), who owns 4.8% of SMS, Christian Gloe (Managing Director), who owns 2.2% of SMS and Ged Keaveney (Chief Technology Officer), who owns 0.1% of SMS.

 

Details of the Proposed Acquisition

 

The overall maximum consideration payable by Codemasters to the Sellers is approximately $196 million (the "Consideration"), made up of the Initial Consideration, the Deferred Consideration (if any) and the Earn-Out Consideration (if any) (the latter two terms being defined below).

 

The Initial Consideration of $30 million, payable on completion of the Proposed Acquisition ("Completion"), comprises a payment of £19.4 million in cash (being the Sterling equivalent of $25 million agreed between Codemasters and the Sellers) and the issue of 1,787,014 Ordinary Shares in Codemasters (which, based on the closing 20 day mid-market average price at the last business day prior to the date of the Acquisition Agreement, have an aggregate market value of $5 million) ("Initial Consideration Shares"). The Initial Consideration Shares will, when issued, rank pari passu with the Company's Existing Ordinary Shares and shall represent 1.2 per cent. of the Enlarged Share Capital (taking into account the issue of the Placing Shares).

 

The remainder of the Consideration of up to a maximum of approximately $166 million, aligning SMS management to the future performance of the combined Company, is comprised of deferred consideration and earn-out consideration. The deferred consideration is made up of Ordinary Shares which at the time of issue have a market value (based on a closing 20 day mid-market average price) of $5 million ("Deferred Consideration") to be satisfied on the later of:

 

i.     the launch of the Movie Franchise Game; and

ii.    the date on which SMS repays its "indebtedness" (as defined in the Acquisition Agreement and covering bank and similar borrowings and indebtedness), which, at Completion, is expected to be approximately £1.6 million, in full out of cash generated by SMS.

 

The Deferred Consideration is subject to reduction for certain claims that may be made against SMS and/or its subsidiaries after Completion.

 

The earn-out consideration ("Earn-Out Consideration") of up to a maximum of approximately $161 million which is to be satisfied by a mix of cash payments and the issue of Ordinary Shares to the Sellers based on the following:

 

a)    The Earn-Out Consideration shall be calculated as 105.3% of the cumulative SMS Adjusted EBITDA for the period 2020-2022 (that is, the aggregate of the SMS Adjusted EBITDA for the three calendar years (each an "Earn-Out Period") after deducting any losses over that period) and shall be satisfied as to 75% in cash and as to 25% by issue of Ordinary Shares.

b)    The Earn-Out Consideration shall be paid annually after the end of each Earn-Out Period attributable by reference to the SMS Adjusted EBITDA for that Earn-Out Period after adjusting the SMS Adjusted EBITDA for any previous Earn-Out Period losses, save that 30% of the Earn-Out Consideration for each of the 2020 and 2021 Earn-Out Periods shall be deferred and the cash and share consideration due shall be settled concurrently with the Earn-Out Consideration payment for the 2022 Earn-Out Period.

c)    The cash element of the Earn-Out Consideration for the 2020 Earn-Out Period shall be reduced by an amount equal to the amount of SMS' "debt" (as defined in the Acquisition Agreement) debt at Completion (expected to be approximately £1.6 million) plus: (i) any interest on such amount from the date of Completion until the "debt" is repaid in full; and (ii) the aggregate amount of cash provided by Codemasters or a third party to SMS and its subsidiaries (the "SMS Group") from the date of Completion to 31 December 2020 to meet any cash requirements of the SMS Group ("Group Borrowings Adjustment").

d)    To the extent the Group Borrowings Adjustment exceeds the cash element of the Earn-Out Consideration for the 2020 Earn-Out Period, it will be deducted from the cash element of the Earn-Out Consideration for the 2021 Earn-Out Period and then the 2022 Earn-Out Period as necessary.

e)    Ordinary Shares issued to satisfy any part of the Earn-Out Consideration will be issued at market value based on a closing 20 day mid-market average price of an Ordinary Share before the date of issuance.

f)     If any instalment of the Earn-Out Consideration payable in cash to the Sellers (the "Relevant Instalment") is not paid within 90 days of the date on which it is due, the Sellers shall, subject to compliance by Codemasters with the AIM Rules and such sale not requiring Codemasters shareholder approval thereunder, have the right to require Codemasters to settle the outstanding amount of the Relevant Instalment by transferring to the Sellers such number of issued shares in SMS as shall have an aggregate value at that date that equates to the amount of the Relevant Instalment that has not been paid, and for this purpose the value of SMS shares shall be a rateable proportion of the value of SMS determined by reference to a multiple of 8 times the SMS Adjusted EBITDA of SMS for the Earn-Out Period immediately preceding that in which the Relevant Instalment is due. The maximum number of SMS shares that may be transferred to the Sellers by way of settlement of Relevant Instalments will not exceed 49% of the issued share capital of SMS, thus ensuring that SMS continues to remain a subsidiary of Codemasters.

The maximum number of Ordinary Shares that may be issued to the Sellers in satisfaction of the share based element of the Consideration will be 20,000,000 Ordinary Shares. At Completion, SMS is expected to have a net cash position of approximately £1.5 million.

 

Ordinary Shares issued to the Sellers in satisfaction of the Consideration shall be subject to a hard lock-up period of 12 months from the date of issuance of such Ordinary Shares and an orderly market undertaking for the 12 month period thereafter.

 

Completion is conditional upon the Placing Agreement becoming unconditional in all respects in accordance with its terms, subject to Admission.

 

Application will be made to the London Stock Exchange for the Initial Consideration Shares to be admitted to trading on AIM. It is expected that admission of the Initial Consideration Shares to trading on AIM will become effective at the same time as the admission to trading on AIM of the Placing Shares, and Completion is expected to occur at the same time, at 8.00 a.m. on 3 December 2019.

 

Details of the Proposed Placing

 

Codemasters today announces its intention to conduct a placing of up to 9,523,809 new Ordinary Shares to institutional investors at a Placing Price of 210 pence per Placing Share to raise gross proceeds of up to £20 million. The net proceeds raised will be used to fund the cash component of the Initial Consideration for the Proposed Acquisition.

 

The Placing Shares will, when issued, rank pari passu in all respects with the Existing Ordinary Shares. The Placing Shares will, on Admission to AIM, represent approximately 6.3 per cent. of the Company's Enlarged Share Capital (taking into account the issue of the Initial Consideration Shares) and will be issued pursuant to the Company's existing shareholder authorities granted at the Company's Annual General Meeting held on 17 July 2019.

 

The Placing will be conducted in accordance with the terms and conditions set out in the Appendix to this announcement through an accelerated bookbuild process (the "Bookbuild") which will be launched immediately following release of this placing announcement (the "Announcement"). Liberum and Jefferies are acting as Joint Bookrunners in connection with the Placing.

 

The Placing Shares are not being made available to the public. The Bookbuild will be closed at the discretion of the Joint Bookrunners and it is envisaged this will be no later than 6.30 p.m. today, 28 November 2019. The Placing is not being underwritten.

 

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that admission of the Placing Shares and the Initial Consideration Shares to trading on AIM ("Admission") will become effective and that dealings in such shares will commence on AIM at 8.00 a.m. on 3 December 2019.

 

On Admission of the Placing Shares and the Initial Consideration Shares, the Company's Enlarged Share Capital shall comprise 151,310,823 Ordinary Shares. Accordingly, the number of 151,310,823 Ordinary Shares can be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

 

The Placing is conditional upon, inter alia: (a) the Acquisition Agreement not having lapsed or been terminated and having become unconditional in all respects, subject to Admission; and (b) Admission occurring by no later than 8.00 a.m. on 12 December 2019. In the event that the Proposed Acquisition does not complete, the Company has agreed to reimburse the Sellers' costs in connection with the Proposed Acquisition of up to £150,000 (inclusive of VAT).

 

Effect of the Proposed Acquisition and Outlook

 

Together, it is expected that SMS and Codemasters will create a global market leader in racing video games, combining world renowned racing game intellectual property and two of the most respected racing game development companies. The Company believes this will further raise the barriers for competitors to enter the racing category.

 

The Proposed Acquisition is expected to enhance Codemasters' capability to develop AAA racing games and appeal to a wider range of audiences across the racing genre. The Proposed Acquisition brings significant benefits, including access to a deeper pool of development talent, efficiencies of scale and additional licensors, development partners and distribution platforms

 

The Proposed Acquisition would augment Codemasters' pipeline with the expected addition of three further games in FY21 and two more in FY23, broadening its portfolio and increasing the scale and predictability of revenue and profit generation as well as reducing dependency on any one franchise. Codemasters intends to leverage its publishing expertise to boost SMS' profitability.

 

Given SMS is currently developing three games for release next year, which are incurring development cost, and its last game release was Project Cars 2 in 2017, Codemasters expects SMS to reduce the Group Adjusted EBITDA for the year to 31 March 2020 by approximately £2.3 million. However, the Proposed Acquisition is expected to deliver significant earnings accretion in the first full year of ownership, enhancing Codemasters' Adjusted EPS by approximately 30% in FY21 driven by the launch profile of SMS' titles.

 

With respect to the three SMS releases planned for FY21, Project CARS GO's (the first Project CARS mobile game for iOS and Android) costs and revenue are being shared equally between Gamevil and SMS. The Movie Franchise Game, which is expected to have similar gross revenue potential as an annual instalment of the F1 Franchise, will see its costs and revenue shared equally between each of SMS, BANDAI Namco and the movie studio partner. The third release, an SMS owned IP and iteration of a highly successful game, is expected to have similar gross revenue potential as the latest instalment of the DiRT Franchise, with costs and revenue being shared equally between SMS and BANDAI Namco.

 

Following Completion, the Company expects to have a pro forma net cash position of approximately £23.7 million and, going forward, the majority of the total Earn-Out Consideration is expected to be self-financed by SMS during the Earn-Out Period.

 

Board Appointment and Director Appointment Letter

 

Ian Bell (CEO of SMS) has agreed to join the Board as an executive director and will enter into an appointment letter with the Company in respect of such appointment.

 

Subject to satisfactory completion of the necessary due diligence, it is expected that Ian Bell's appointment as an executive director of the Company will become effective shortly after Completion. The appointment will be for an initial term of 12 months from the date of the appointment letter, and it will thereafter automatically terminate on the termination of Ian Bell's service agreement with SMS or his failure to be re-elected as a director by the Company's shareholders at any annual general meeting of the Company.

 

Ian Bell will not be entitled to any additional fees in respect of his appointment as an executive director of the Company. A further announcement will be made following completion of the Company's due diligence, which will include the information in respect of Ian Bell's intended board appointment required by Schedule 2(g) of the AIM Rules.

 

Service Agreement

 

On Completion, Ian Bell will enter into a new service agreement with SMS as CEO of SMS with an annual salary of £335,165 per annum, payable monthly in arrears, on a full-time basis. The service agreement will be for an initial term of 12 months and terminable thereafter by either party serving 12 months' written notice on the other party. The service agreement also provides for the payment of a discretionary bonus (with targets and earning potential for the first year of employment being the same as those applicable to Codemasters' Chief Executive Officer for the same period), a pension contribution sum equal to 10% of basic salary per year, the provision of a leased company car or a car allowance, entitlement to participate in group staff incentive schemes, eligibility to participate in group income protection, life assurance and family medical insurance schemes as SMS or Codemasters may maintain, 25 days' paid holiday per year and the reimbursement of all expenses reasonably incurred in the proper performance of responsibilities.

 

 

 

APPENDIX - TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.

THIS ANNOUNCEMENT INCLUDES "FORWARD-LOOKING STATEMENTS" WHICH INCLUDES ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACT, INCLUDING, WITHOUT LIMITATION, THOSE REGARDING THE COMPANY AND THE COMPANY'S BUSINESS' FINANCIAL POSITION, BUSINESS STRATEGY, PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS, OR ANY STATEMENTS PRECEDED 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 OR THE COMPANY'S BUSINESS 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 AND THE COMPANY'S BUSINESS WILL OPERATE IN THE FUTURE. AS A RESULT, PROSPECTIVE INVESTORS SHOULD NOT RELY ON SUCH FORWARD LOOKING STATEMENTS DUE TO THE INHERENT UNCERTAINTY THEREIN. NO REPRESenTATION OR WARRANTY IS GIVEN AS TO THE COMPLETENESS OR ACCURACY OF THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS ANNOUNCEMENT. 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. NO STATEMENT IN THIS ANNOUNCEMENT IS INTENDED TO BE A PROFIT FORECAST AND NO STATEMENT IN THIS ANNOUNCEMENT 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.

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

members of the public are not eligible to take part in the placing. this announcement is FOR INFORMATION PURPOSES ONLY AND is DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA") WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF FSMA ("QUALIFIED INVESTORS"), BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(E) OF regulation (eu) 2017/1129 ("PROSPECTUS Regulation"); (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "FINANCIAL PROMOTION ORDER"); (II) FALL WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC) OF THE FINANCIAL PROMOTION ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED; and (C) persons who have otherwise been lawfully invited to participate in the pLAcing by Liberum CAPITAL LIMITED or jefferies INTERNATIONAL LIMITED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THis announcement and the information in it MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS.

ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT HAS BEEN ISSUED BY AND IS THE SOLE RESPONSIBILITY OF 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 INTO THE UNITED STATES. the securities referred to herein have not been and will not be registered under the us securities act of 1993, 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.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS IN RELATION TO ANY PURCHASE OF PLACING SHARES. THE DISTRIBUTION OF THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS, AND ANY PERSON INTO WHOSE POSSESSION THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, SUCH RESTRICTIONS.

No action has been taken by any of the Company, Liberum Capital Limited ("Liberum"), Jefferies International Limited ("Jefferies") or any of their respective affiliates, agents, directors, officers or employees that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required.

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

All offers of the Placing Shares will be made pursuant to an exemption under the Prospectus Regulation from the requirement to produce a prospectus, in the United Kingdom, this Announcement is being directed solely at persons in circumstances in which section 21(1) of FSMA does not apply.

No representation or warranty, express or implied, is made or given by or on behalf of the Company or Liberum or Jefferies or any of their respective affiliates or affiliates (within the meaning of Rule 405 under the Securities Act ("SEC Affiliate")) or any of such persons' directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this Announcement and no liability whatsoever is accepted by the Company, Liberum, Jefferies or any of such persons' affiliates, SEC Affiliates, directors, officers or employees or any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith.

The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained from the South Africa Reserve Bank or any other applicable body in the Republic of South Africa, Hong Kong or Singapore in relation to the Placing Shares and the Placing Shares have not been, nor will they be, registered under or offering in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan, Hong Kong, Singapore or the Republic of South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the United Kingdom.

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

No admission document or prospectus

No admission document or prospectus or other offering document has been or will be submitted to be approved by the FCA or submitted to the London Stock Exchange in relation to the Placing or the Placing Shares and Placees' commitments will be made solely on the basis of the information contained in this Announcement and any information publicly announced through a Regulatory Information Service (as defined in the AIM Rules for Companies ("AIM Rules")) by or on behalf of the Company on or prior to Admission ("Publicly Available Information") and subject to any further terms set forth in any form of confirmation to be sent to individual Placees.

Each Placee, by participating 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 information (other than the Publicly Available Information), representation, warranty or statement made by or on behalf of any of Liberum (the Company's nominated adviser and joint broker to the Placing), Jefferies (joint broker to the Placing), the Company or any other person, and none of Liberum, Jefferies, the Company nor any other person acting on such person's behalf nor any of their respective affiliates has or shall have any liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement. 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. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

1. Details of the Placing

Liberum and Jefferies today entered into an agreement with the Company in connection with the Placing ("Placing Agreement").

Pursuant to the Placing Agreement and subject to the terms and conditions set out in the Placing Agreement, Liberum and Jefferies, as agents for and on behalf of the Company, have severally agreed to use their respective reasonable endeavours to procure Placees for the Placing Shares at a placing price of 210 pence ("Placing Price") per Placing Share. The Placing is not being underwritten by Liberum or Jefferies.

The Placing Shares will, when issued, be subject to the Articles and credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the Placing Shares and will on issue be free of all claims, liens, charges, encumbrances and equities.

2.         Application for Admission

Application will be made to the London Stock Exchange for the admission of the Placing Shares to trading on AIM. Except as otherwise set forth herein, it is anticipated that dealings in the Placing Shares will commence on AIM at 8.00 a.m. on 3 December 2019 and that Admission will become effective on that date. The Placing Shares will not be admitted to trading on any stock exchange other than AIM.

3.         Participation in, and principal terms of, the Placing

Each Placee will be deemed to have read this Announcement in its entirety.

Liberum is acting as nominated adviser, financial adviser and joint broker to the Placing as agent and for and on behalf of the Company. Liberum is authorised and regulated in the United Kingdom by the FCA and is acting exclusively for the Company and no one else in connection with the Placing and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing and, to the fullest extent permitted by law and applicable FCA rules, neither Liberum nor any of its affiliates will have any liability to Placees or to any person other than the Company in respect of the Placing.

Jefferies is acting as financial adviser and joint broker to the Placing as agent for and on behalf of the Company. Jefferies is authorised and regulated in the United Kingdom by the FCA and is acting exclusively for the Company and no one else in connection with the Placing and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing and, to the fullest extent permitted by law and applicable FCA rules, neither Jefferies nor any of its affiliates will have any liability to Placees or to any person other than the Company in respect of the Placing.

Participation in the Placing is only available to persons who are invited to participate by Liberum or Jefferies (as the case may be).

Each person that is invited to and which confirms its agreement (whether orally or in writing) to Liberum or Jefferies (as the case may be) to acquire or subscribe for Placing Shares under the Placing (the "Placee") will be irrevocably bound by this Announcement and will be deemed to have read, understood and accepted the terms of this Announcement in its entirety, to be participating, making an order and acquiring Placing Shares on the terms and conditions contained in this Appendix and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix.

Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to Liberum or Jefferies (as applicable) (as agent for the Company) and the Company, to pay Liberum or Jefferies (as applicable) (or as it 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.

Liberum or Jefferies (as the case may be) may require any Placee to agree to such further terms and/or conditions and/or give such additional warranties and/or representations as they may, in their absolute discretion, see fit and/or may require such Placee to execute a separate placing letter or contract note.

Upon being notified (either orally or in writing which includes by way of email) of the Placing Price and its allocation of Placing Shares in the Placing, a Placee shall be contractually committed to acquire and pay for the number of Placing Shares allocated to them at the Placing Price ("Placing Participation") 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. Dealing may not begin before any notification is made.

The Placing Price is a fixed price of 210 pence per Placing Share.

Liberum and Jefferies, acting jointly, reserves the right, in their sole and absolute discretion, (following consultation with the Company), to scale back applications in such amounts as they consider appropriate. Each of Liberum, Jefferies and the Company also reserves the right to decline, in whole or in part, any application for Placing Shares pursuant to the Placing. Accordingly, applicants for Placing Shares may, in certain circumstances, not be allotted and/or sold the number of Placing Shares for which they have applied. The balance of subscription monies in the event of scaling back (or unsuccessful applications) will be posted to applicants by cheque (or, in the case of payment by electronic transfer, transferred to the bank from which payment was made), without interest, at the applicant's own risk.

4.                    Conditions of and termination of the Placing

Each Placee's Placing Participation is in all respects conditional upon:

(a)           the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms; and

(b)           Admission having become effective,

in each case by 3 December 2019 or such later time and/or date as the Company, Liberum and Jefferies agree, but in any event being no later than 12 December 2019.

Pursuant to the Placing Agreement, Liberum and Jefferies have severally agreed, on behalf of and as agent for the Company, to use their respective reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price, subject to the terms and conditions set out in the Placing Agreement. For the avoidance of doubt, the Placing will not be underwritten by Liberum, Jefferies or any other person and no commissions are payable to a Placee or by a Placee in respect of their Placing Participation.

The obligations of Liberum and Jefferies under the Placing Agreement are, and the Placing is, conditional upon, inter alia:

(a)   the Company having complied with all obligations under the Placing Agreement and satisfied all of the conditions to be fulfilled by it;

(b)   the Acquisition Agreement: (i) not having lapsed or been terminated; and (ii) having become unconditional in all respects, subject to Admission; and

(c)   publication of announcement obligations (including with respect to this Announcement).

Liberum and Jefferies may, acting together in their sole discretion and upon such terms as they think fit, waive 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. Any such extension or waiver will not affect the Placees' commitments as set out in this Announcement.

The Placing Agreement contains certain warranties from the Company and certain indemnities given by the Company for the benefit of Liberum and Jefferies. Each of Liberum and Jefferies independently may, in their respective sole discretion, terminate the Placing Agreement if prior to Admission, inter alia, a force majeure event occurs, there is a material breach of any of the warranties or undertakings or any fact or circumstance arises which causes a warranty to become untrue, inaccurate or misleading in any material respect or the Company fails to comply with its obligations under the Placing Agreement in any material respect. Either Liberum or Jefferies may also, in their respective sole discretion, terminate the Placing Agreement where there has been a material breach of any term of the Acquisition Agreement.

The exercise by Liberum and/or Jefferies (as the case may be) of any right of termination or any right of waiver exercisable by them either Liberum or Jefferies contained in the Placing Agreement or the exercise of any discretion set out herein is within the absolute discretion of Liberum and/or Jefferies in accordance with the terms of the Placing Agreement acting in good faith and neither Liberum nor Jefferies will have any liability to any Placee whatsoever in connection with any decision to exercise or not exercise any such rights and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Liberum and/or Jefferies.

By accepting the Placing Shares, each Placee agrees that Liberum and Jefferies without having any liability to them, may, in their absolute discretion, exercise the right, (i) to extend the time for fulfilment of any of the conditions in the Placing Agreement (provided that the Placee's commitment is not extended beyond 12 December 2019), (ii) to waive, in whole or in part, fulfilment of certain of the conditions; or (iii) to terminate the Placing Agreement, in each case without consulting such Placee.

If: (a) any of the conditions in the Placing Agreement are not satisfied (or, where relevant, waived); (b) the Placing Agreement is terminated; or (c) the Placing Agreement does not otherwise become unconditional in all respects, the Placing will not proceed and all funds delivered by a Placee to Liberum or (as applicable) Jefferies will be returned to such Placee at their risk without interest, their rights and obligations hereunder shall cease and determine at such time and no claim shall be made by such Placee in respect thereof.

None of the Company, the Directors, Liberum or Jefferies owes any fiduciary duty to any Placee in respect of the warranties, undertakings or indemnities in the Placing Agreement.

5.         Registration and Settlement

If Placees are allocated any Placing Shares in the Placing they will be sent a form of confirmation or electronic confirmation by Liberum or Jefferies, as soon as it is able which will confirm the number of Placing Shares allocated to them, the Placing Price and the aggregate amount owed by them to Liberum or Jefferies, as well as settlement instructions.

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 Liberum or Jefferies in accordance with either the standing CREST or certificated settlement instructions which they have in place with Liberum or Jefferies (as applicable).

Settlement of transactions in the Placing Shares following Admission will take place within the CREST system, subject to certain exceptions. Settlement through CREST is expected to take place in respect of the Placing Shares on 3 December 2019 and Admission is expected to occur no later than 8 a.m. on 3 December 2019 unless otherwise notified by Liberum and/or Jefferies.

Settlement will be on a delivery versus payment basis. However, in the event of any difficulties or delays in the admission of the Placing Shares to CREST or the use of CREST in relation to the Placing, the Company and Liberum and/or Jefferies (as applicable) may agree that the Placing Shares should be issued in certificated form. Liberum and Jefferies reserve the right to require settlement for the Placing Shares, and to deliver the Placing Shares to Placees, by such other means as they deem necessary if delivery or settlement to Placees is not practicable within the CREST system or would not be consistent with regulatory requirements in a Placee's jurisdiction.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above, in respect of either CREST or certificated deliveries, at the rate of 2 percentage points above prevailing LIBOR as determined by Liberum and/or Jefferies.

Each Placee agrees that, if it does not comply with these obligations, Liberum or Jefferies (as applicable) may sell, charge by way of security (to any funder of either Liberum or Jefferies) or otherwise deal with any or all of their Placing Shares on their behalf and retain from the proceeds, for Liberum or Jefferies' (as applicable) own account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due and any costs and expenses properly incurred by Liberum or Jefferies a result of the Placee's failure to comply with its obligations. The relevant Placee will, however, remain liable and shall indemnify Liberum or Jefferies (as applicable) on demand for any shortfall below the amount owed by it and for any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of their Placing Shares on their behalf. Legal and/or beneficial title in and to any Placing Shares shall not pass to the relevant Placee until such time as it has fully complied with its obligations hereunder. By communicating a bid for Placing Shares, each Placee confers on Liberum or Jefferies (as applicable) all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which Liberum or Jefferies (as applicable) lawfully takes in pursuance of such sale.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees must ensure that, upon receipt, the conditional 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 United Kingdom stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

6.         Selling and Transfer Restrictions

6.1      In relation to each member state of the European Economic Area ("Member State"), no Placing Shares have been offered or will be offered pursuant to the Placing to the public in that Member State, except that offers of Placing Shares may be made to the public in that Member State at any time under the following exemptions under the Prospectus Regulation:

(a)       to any legal entity which is a "qualified investor" as defined under the Prospectus Regulation;

(b)       to fewer than 150 natural or legal persons (other than "qualified investors" as defined under the Prospectus Regulation); or

(c)        in any other circumstances falling within Article 1(4) of the Prospectus Regulation,

provided that no such offer of Placing Shares shall result in a requirement for the publication of a prospectus pursuant to Article 3 of the Prospectus Regulation and each person who initially acquires any Placing Shares or to whom any offer is made under the Placing will be deemed to have represented, acknowledged and agreed that it is a "qualified investor" within the meaning of Article 2(e) of the Prospectus Regulation.

6.2      The expression an "offer of any shares to the public" in relation to any Placing Shares in any Member State means a communication to persons in any form and by any means presenting sufficient information on the terms of the offer and the Placing Shares to be offered, so as to enable a Placee to decide to acquire any Placing Shares.

6.3      In the case of any Placing Shares being offered to a financial intermediary as that term is used in Article 5(1) of the Prospectus Regulation, such financial intermediary will also be deemed to have represented, acknowledged and agreed that the Placing Shares acquired by it in the Placing have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to persons in circumstances which may give rise to an offer of any Placing Shares to the public other than their offer or resale in a Member State to "qualified investors" as so defined or in circumstances in which the prior consent of Liberum or Jefferies (as the case may be) has been obtained to each such proposed offer or resale.

6.4      The Company, Liberum and Jefferies and their respective affiliates, and others will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements. Notwithstanding the above, a person who is not a "qualified investor" and who has notified Liberum or Jefferies of such fact in writing may, with the prior consent of Liberum or Jefferies (as the case may be), be permitted to acquire Placing Shares in the Placing.

6.5      The Placing Shares have not been and will not be registered under the Securities Act, or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold or transferred, directly or indirectly, in the United States except pursuant to an exemption from the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The Placing Shares are being sold outside of the United States in reliance on Regulation S.

7.         Representations and Warranties

By agreeing to acquire or subscribe for Placing Shares, each Placee that confirms their agreement to acquire or subscribe for Placing Shares will (for itself and any person(s) procured by it to acquire or subscribe for Placing Shares and any nominee(s) for any such person(s)) be deemed to irrevocably agree, undertake, represent, warrant and acknowledge to each of the Company, the Registrar, Liberum and Jefferies that:

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

7.2      in agreeing to acquire or subscribe for Placing Shares under the Placing, it is relying solely on this Announcement and any Publicly Available Information and not on any other information given, or representation or statement made at any time (including, without limitation, the roadshow presentation prepared by the Company or research by any party containing information about the Company), by any person concerning the Company, the Placing Shares, the Placing or Admission. It agrees that it has neither received nor relied on any other information given or representations, warranties or statements made by Liberum, Jefferies or the Company and none of Liberum, Jefferies or the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. It irrevocably and unconditionally waives any rights it may have in respect of any other information, representation or statements and acknowledges that none of Liberum, Jefferies, the Company nor any of their respective affiliates, directors, officers, agents or employees has made any representations to it, express or implied, with respect to the Company, the Placing and the Placing Shares or the accuracy, completeness or adequacy of the Publicly Available Information, and that each of them expressly disclaims any liability in respect thereof;

7.3      it acknowledges that the content of this Announcement is exclusively the responsibility of the Company and the Board and that none of Liberum, Jefferies nor any person acting on their behalf nor any of their respective affiliates makes any representation, express or implied, nor accepts any responsibility whatsoever for the contents of this Announcement nor for any information, representation or statement made or purported to be made by them or on its or their behalf in connection with the Company, the Placing Shares, the Placing or Admission;

7.4      it will indemnify on an after-tax basis and hold harmless the Company, Liberum and Jefferies and their respective affiliates and any person acting on their behalf 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;

7.5      if the laws of any territory or jurisdiction outside the United Kingdom are applicable to its agreement to acquire Placing Shares under the Placing, it undertakes, represents and warrants that it is a person to whom the Placing Shares may be lawfully offered under that other jurisdiction's laws and regulations, has complied with all such laws, obtained all governmental and other consents which may be required, complied with all requisite formalities and paid any issue, transfer or other taxes due in connection with its application in any territory and that it has not taken any action or omitted to take any action which will result in the Company, Liberum or Jefferies or any of their respective affiliates or any of their respective officers, agents, employees or affiliates acting in breach of the regulatory or legal requirements, directly or indirectly, of any territory or jurisdiction outside the United Kingdom in connection with the Placing;

7.6      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 nondiscretionary basis for any such person;

7.7      it is liable for any capital duty, stamp duty, stamp duty reserve tax 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 United Kingdom by it or any other person on the acquisition by it of any Placing Shares or the agreement by it to acquire any Placing Shares;

7.8      it agrees that, having had the opportunity to read this Announcement, it shall be deemed to have had notice of all information, undertakings, representations and warranties contained in this Announcement, that it is acquiring Placing Shares solely on the basis of this Announcement and the Publicly Available Information and no other information and that in accepting a participation in the Placing it has had access to all information it believes necessary or appropriate in connection with its decision to acquire Placing Shares and has relied upon its own investigation of the business, financial or other position of the Company in deciding whether to participate in the Placing;

7.9      it has carefully read and understands this Announcement in its entirety and acknowledges that it is acquiring Placing Shares on the terms, and subject to the conditions, set out in this Appendix and the Articles as in force at the date of Admission, and that such agreement is legally binding and irrevocable, and is not capable of termination or rescission in any circumstances save for fraud, whether concluded by telephone or otherwise. Such Placee agrees that the terms and conditions set out in this Appendix represent the whole and only agreement between the Placee, Liberum, Jefferies and the Company in relation to the Placee's participation in the Placing and supersede any previous agreement between any of such parties in relation to such participation. Accordingly, all other terms, conditions, representations, warranties and other statements which would otherwise be implied (by law or otherwise) shall not form part of these terms and conditions. Such Placee agrees that none of the Company, Liberum, Jefferies nor any of their respective officers or directors will have any liability for any such other information or representation and irrevocably and unconditionally waives any rights it may have in respect of any such other information or representation;

7.10    it understands that no offering document, admission document or prospectus has been 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;

7.11    it acknowledges that this Announcement has not been approved by Liberum or Jefferies in their capacity as an authorised person under section 21 FSMA and it may not therefore be subject to the controls which would apply if it was made or approved as a financial promotion by an authorised person;

7.12    that, save in the event of fraud on the part of Liberum or Jefferies (as applicable), none of Liberum, Jefferies, their respective ultimate holding companies nor any direct or indirect subsidiary undertakings or affiliates of such holding companies, nor any of their respective directors, officers and employees shall be responsible or liable to a Placee or any of its clients for any matter arising out of Liberum's or Jefferies' role whether as nominated adviser, joint book runner or joint broker, or otherwise in connection with the Placing and that where any such responsibility or liability nevertheless arises as a matter of law, the Placee and, if relevant, its clients, will, to the fullest extent permitted by law, immediately waive any claim against any of such persons which the Placee or any of its clients may have in respect thereof;

7.13    it acknowledges that no person is authorised in connection with the Placing to give any information or make any representation other than as contained in this Announcement and, if given or made, any information or representation must not be relied upon as having been authorised by Liberum, Jefferies or the Company;

7.14    it is not applying as, nor is it applying as nominee or agent for, a person who is or may be liable to notify and account for tax under the Stamp Duty Reserve Tax Regulations 1986 at any of the increased rates referred to in section 67, 70, 93 or 96 (depository receipts and clearance services) of the Finance Act 1986;

7.15    it has such knowledge, sophistication and experience in financial and business matters that it is capable of evaluating the merits and risks of its subscription for the Placing Shares and it is able to bear the economic risk and financial risk (including sustaining a complete loss) of the acquisition of such Placing Shares. It further confirms that it is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of participating in, and is able to sustain a complete loss in connection with, the Placing;

7.16    it has investigated independently and made its own assessment and satisfied itself concerning the relevant tax, legal, currency and other economic considerations relevant to its investment in the Placing Shares, including any federal, state and local tax consequences, affecting it in connection with its purchase and any subsequent disposal of the Placing Shares;

7.17    it is duly incorporated and validly existing under the laws of its jurisdiction of incorporation;

7.18    it has all necessary capacity, it is acting in accordance with the power under its constitutional documents and has obtained all necessary consents and authorities (including, without limitation, all relevant members' resolutions) to acquire and pay for the Placing Shares comprised in the manner proposed and to enter into and perform its obligations pursuant to the terms and conditions set out in this Appendix, and there are no governmental or regulatory consents or other third party approvals, authorisations or orders required in order for it to acquire and pay for the Placing Shares in the manner proposed and to enter into and perform its obligations pursuant to the terms and conditions in this Appendix that have not been or will not prior to Admission have been obtained;

7.19    the agreement to acquire or subscribe for the Placing Shares and payment therefor will comply with and will not violate any agreements to which it is a party or by which it or any of its properties or assets is bound and which is material to its participation and its obligations in respect thereof and will constitute its valid and legally binding agreement and it has the funds available to make payment for the full amount in respect of the Placing Shares as and when due;

7.20    it accepts and acknowledges that: (i) the Placing Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, transferred or delivered directly or indirectly in or into the United States except pursuant to an effective registration statement under the Securities Act or an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any applicable state securities laws; (ii) no representation has been made as to the availability of any exemption under the Securities Act for the reoffer, resale, transfer or delivery of the Placing Shares; (iii) the Company has not filed a prospectus or similar document with any applicable securities regulatory authority of any province or territory of Canada, no document in relation to the Placing has been or will be lodged with, or registered by, the Australian Securities and Investments Commission and no registration statement has been, the Japanese Ministry of Finance in relation to the Placing Shares or will be filed with Financial Services Board of the Republic of South Africa; and (iv) the Placing Shares have not been, and will not be, registered under the securities laws of Australia, Canada, Japan, Hong Kong, Singapore, the Republic of South Africa or any other jurisdiction in which the offer and sale of the Placing Shares would be unlawful (the "Excluded Jurisdictions") and, subject to certain exceptions, the Placing Shares may not be offered or sold directly or indirectly within Canada, Australia, Japan, the Republic of South Africa or any other Excluded Jurisdiction or to or for the account or benefit of any national, citizen or resident of such countries or of the Excluded Jurisdictions;

7.21    it will not offer, sell, renounce, transfer or deliver, directly or indirectly, any of the Placing Shares in Australia, Canada, Japan or Republic of South Africa or to any national, resident or citizen of Australia, Canada, Japan or Republic of South Africa other than as may be permitted under the applicable law in the relevant jurisdiction and it acknowledges that the Placing Shares have not been and will not be registered under the applicable securities laws of Australia, Canada, Japan or Republic of South Africa and that the same are not being offered for subscription or sale, and may not, directly or indirectly, be offered, sold, transferred or delivered, in Australia, Canada, Japan or Republic of South Africa other than as may be permitted under the applicable law in the relevant jurisdiction;

7.22    it accepts and acknowledges that there will be no public offer of Placing Shares in the United States;

7.23    it: (i)(a) is not within the United States and will not be within the United States at the time that any buy order for Placing Shares is originated by it, (b) is acquiring the Placing Shares in an "offshore transaction" as defined in Regulation S and (c) is not acquiring any of the Placing Shares as a result of any form of "directed selling efforts" (within the meaning of Regulation S); or (ii) is a "qualified institutional buyer" as defined in Rule 144A under the Securities Act that has duly executed a U.S. investor letter in the form provided to it by, and delivered the same to, Liberum and Jefferies or their respective affiliates;

7.24    it acknowledges and agrees that it will not offer or sell any of the Placing Shares, directly or indirectly, in or into the United States except pursuant to an exemption from the registration requirements of the Securities Act;

7.25    it has not distributed, forwarded, transferred or otherwise transmitted this Announcement or any other presentation or offering materials concerning the Placing Shares within the United States, nor will it do any of the foregoing, and it understands that the information in this Announcement, including financial information, may be materially different from any disclosure that would be provided in a registered offering in the United States;

7.26    if it is located in the United Kingdom, it is: (i) a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) in the course of its business and a "qualified investor" (as defined in the Prospectus Regulation) and it will acquire, manage and dispose of the Placing Shares (as principal or agent) for the purposes of its business; and (ii) not intending to offer or sell or otherwise deal with the Placing Shares in any way which would result in an offer to the public in the United Kingdom within the meaning of FSMA or in any other jurisdiction or require registration or prospectus publication or similar actions in any other jurisdiction;

7.27    if it is receiving the offer in circumstances under which the laws or regulations of a jurisdiction other than the United Kingdom would apply, that it is a person to whom the Placing Shares may be lawfully offered under that other jurisdiction's laws and regulations;

7.28    it is capable of being categorised as a person who is a "professional client" or an "eligible counterparty" within the meaning of Chapter 3 of the FCA's Conduct of Business Sourcebook;

7.29    to the extent that it is located outside the United Kingdom but in the EEA it is a "qualified investor" as defined under the Prospectus Regulation;

7.30    if it is outside the United Kingdom, neither this Announcement nor any other offering, marketing or other material in connection with the Placing constitutes an invitation, offer or promotion to, or arrangement with, it or any person for whom it is procuring to acquire Placing Shares pursuant to the Placing unless, in the relevant territory, such offer, invitation or other course of conduct could lawfully be made to it or such person and such documents or materials could lawfully be provided to it or such person and Placing Shares could lawfully be distributed to and acquired and held by it or such person without compliance with any unfulfilled approval, registration or other regulatory or legal requirements;

7.31    it acknowledges that it is an "investment professional" (within the meaning of Article 19(5) of the Financial Promotion Order) or a "high net worth company" (within the meaning of Article 49(2) of the Financial Promotion Order) and a "qualified investor" (as defined in the Prospectus Regulation);

7.32    it confirms that 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 it is permitted to do so pursuant to section 21 of FSMA;

7.33    it acknowledges that after giving effect to its acquisition of the Placing Shares, it will inform the Company and Liberum or Jefferies (as the case may be) if such acquisition will cause it to be required to make a notification to the Company in accordance with Rule 5.1.2R of the Disclosure Guidance and Transparency Rules or AIM Rule 17;

7.34        it acknowledges its obligations under the Criminal Justice Act 1993, the Proceeds of Crime Act 2002 (''POCA 2002") and the EU Market Abuse Regulation (Regulation (EU) 596/2014) and confirms that it has complied and will continue to comply with all obligations thereunder;

7.35    it acknowledges that none of Liberum, Jefferies nor any of their respective directors, officers, agents or employees or their respective affiliates nor any person acting on their behalf is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing or providing any advice in relation to the Placing and participation in the Placing is on the basis that it is not and will not be a client of Liberum or Jefferies or any of their respective affiliates and that none of Liberum, Jefferies nor any of their respective affiliates have any duties or responsibilities to it for providing protection afforded to their respective clients or for providing advice in relation to the Placing nor, if applicable, in respect of any representations, warranties, undertaking or indemnities otherwise required to be given by it in connection with its application under the Placing;

7.36    it acknowledges that where it is acquiring Placing Shares for one or more managed, discretionary or advisory accounts, it is authorised in writing for each such account: (i) to acquire the Placing Shares for each such account; (ii) to make on each such account's behalf the representations, warranties and agreements set out in this Announcement; and (iii) to receive on behalf of each such account any documentation relating to the Placing in the form provided by the Company and/or Liberum and/or Jefferies. It agrees that the provision of this paragraph shall survive any resale of the Placing Shares by or on behalf of any such account;

7.37    it acknowledges that neither the Placee nor, as the case may be, their clients, expect Liberum or Jefferies to have any duties or responsibilities to the Placee similar or comparable to the duties of "best execution" and "suitability" imposed by The Conduct of Business Source Book contained in The FCA's Handbook of Rules and Guidance, and that neither Liberum nor Jefferies is acting for the Placee or its clients, and that neither Liberum nor Jefferies will be responsible to the Placee or its clients for providing the protections afforded to Liberum or Jefferies' customers;

7.38    it irrevocably appoints any Director, duly authorised officer or employee and any director of Liberum or Jefferies (as applicable) to be its agent and on its behalf (without any obligation or duty to do so), to sign, execute and deliver any documents and do all acts, matters and things as may be necessary for, or incidental to, its acquisition of all or any of the Placing Shares for which it has given a commitment under the Placing, in the event of its own failure to do so;

7.39    it accepts that if the Placing does not proceed or the relevant conditions to the Placing Agreement are not satisfied or the Placing Shares for which valid applications are received and accepted are not admitted to trading on AIM for any reason whatsoever, then none of the Company, Liberum and Jefferies or any of their respective affiliates, nor persons controlling, controlled by or under common control with any of them nor any of their respective employees, agents, directors, officers, members, stockholders, partners or representatives, shall have any liability whatsoever to it or any other person;

7.40    it may lawfully acquire the Placing Shares comprising its Placing Participation and has complied with, and will comply with, all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

7.41    if it is a pension fund or investment company, its acquisition of Placing Shares is in full compliance with applicable laws and regulations;

7.42    in connection with its participation in the Placing (i) it has complied with its obligations in connection with money laundering and terrorist financing under the POCA 2002, the Terrorism Act 2000 (as amended from time to time), the Terrorism Act 2006 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and (ii) 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 purchaser, and it will provide promptly to Liberum or Jefferies (as the case may be) such evidence, if any, as to the identity or location or legal status of any person which Liberum or Jefferies 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 Liberum or Jefferies (as the case may be) on the basis that any failure by it to do so may result in the number of Placing Shares that are to be purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as Liberum or Jefferies (as the case may be) may decide at their sole discretion;

7.43    it holds harmless and will indemnify Liberum and/or Jefferies and/or the Company against any liability, loss or cost ensuing due to the failure to process this application, if such information as has been required has not been provided by it or has not been provided on a timely basis;

7.44    it acknowledges and agrees that information provided by it to the Company or the Registrar will be stored on the Registrar's computer system and manually. It acknowledges and agrees that for the purposes of the General Data Protection Regulation (Regulation (EU) 2016/679) and the Data Protection Act 2018 (together, the "Data Protection Law") and other relevant data protection legislation which may be applicable, the Registrar is required to specify the purposes for which it will hold personal data. The Registrar will only use such information for the purposes set out below (collectively, the "Purposes"), being to: (i) process its personal data (including sensitive personal data) as required by or in connection with its holding of Placing Shares, including processing personal data in connection with credit and money laundering checks on it; (ii) communicate with it as necessary in connection with its affairs and generally in connection with its holding of Placing Shares; (iii) provide personal data to such third parties as the Registrar may consider necessary in connection with its affairs and generally in connection with its holding of Placing Shares or as the Data Protection Law may require, including to third parties outside the United Kingdom or the EEA; and (iv) without limitation, provide such personal data to the Company, Liberum, Jefferies and their respective associates for processing, notwithstanding that any such party may be outside the United Kingdom or the EEA;

7.45    in providing the Registrar with information, it hereby represents and warrants to the Registrar that it has obtained the consent of any data subjects to the Registrar and their respective associates holding and using their personal data for the Purposes (including the explicit consent of the data subjects for the processing of any sensitive personal data for the Purposes). For the purposes of this Announcement, "data subject", "personal data" and "sensitive personal data" shall have the meanings attributed to them in the Data Protection Law;

7.46    the representations, undertakings and warranties contained in this Announcement are irrevocable. It acknowledges that Liberum, Jefferies, the Company and their respective directors, officers, agents and employees and their respective affiliates will rely upon the truth and accuracy of the foregoing representations, warranties, undertakings, agreements and acknowledgements and it agrees that if any of the representations, warranties, undertakings, agreements and acknowledgements made or deemed to have been made by its acquisition for Placing Shares is no longer accurate, it shall promptly notify Liberum or Jefferies (as the case may be) and the Company;

7.47    where it or any person acting on behalf of it is dealing with Liberum or Jefferies (as the case may be), any money held in an account with Liberum or Jefferies (as applicable) on behalf of it and/or any person acting on behalf of it will not be treated as client money within the meaning of the relevant rules and regulations of the FCA which therefore will not require Liberum or Jefferies (as applicable) to segregate such money, as that money will be held by Liberum or Jefferies (as applicable) under a banking relationship and not as trustee;

7.48    any of its clients, whether or not identified to Liberum, Jefferies or any of their respective affiliates or agents, will remain its sole responsibility and will not become clients of Liberum, Jefferies or any of their respective affiliates or agents for the purposes of the rules of the FCA or for the purposes of any other statutory or regulatory provision;

7.49    none of the Company, Liberum or Jefferies are making any undertaking or warranty to any Placee regarding the legality of an investment in the Placing Shares by such Placee under any investment or similar laws and regulations;

7.50    it accepts that the allocation of Placing Shares shall be determined by Liberum and Jefferies (following consultation with the Company) in their absolute discretion and that Liberum and Jefferies (following consultation with the Company) may scale down any Placing commitments on such basis as they may determine; and

7.51    time shall be of the essence as regards its obligations to settle payment for the Placing Shares and to comply with its other obligations under the Placing.

8.         Supply and Disclosure of Information

If any of Liberum, Jefferies or the Company or any of their agents request any information in connection with a Placee's agreement to acquire Placing Shares under the Placing in order to comply with any relevant legislation, such Placee must promptly disclose it to them.

9.         Miscellaneous

9.1      The rights and remedies of Liberum, Jefferies and the Company under this Appendix are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

9.2      On application, if a Placee is an individual, that Placee may be asked to disclose in writing, or orally, his or her nationality and if a Placee is a discretionary fund manager, that Placee may be asked to disclose in writing or orally the jurisdiction in which its funds are managed or owned. All documents provided in connection with the Placing will be sent at the Placee's risk. They may be returned by post to such Placee at the address notified by such Placee.

9.3      All documents will be sent at the Placee's risk. They may be sent by post to such Placee at an address notified to Liberum or Jefferies (as the case may be).

9.4      Each Placee agrees to be bound by the Articles (as amended from time to time) once the Placing Shares, which the Placee has agreed to acquire pursuant to the Placing, have been acquired by the Placee.

9.5      The contract to acquire or subscribe for Placing Shares under the Placing, these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and the appointments and authorities mentioned in this Announcement and all disputes arising out of, or in connection with, its subject matter or formation (including non-contractual disputes or claims) will be governed by, and construed in accordance with, the laws of England and Wales. For the exclusive benefit of Liberum, Jefferies and the Company, each Placee irrevocably submits to the exclusive jurisdiction of the courts of England and Wales and waives any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum. This does not prevent an action being taken against a Placee in any other jurisdiction.

9.6      In the case of a joint agreement to acquire Placing Shares under the Placing, references to a "Placee" in this Announcement are to each of the Placees who are a party to that joint agreement and their liability is joint and several.

9.7      Liberum, Jefferies and the Company each expressly reserve the right to modify the Placing (including, without limitation, their timetable and settlement) at any time before allocations are determined. Each Placee agrees that its obligations pursuant to this Announcement are not capable of termination or rescission.

9.8      The Placing is subject to the satisfaction of the conditions contained in the Placing Agreement and the Placing Agreement not having been terminated. Further details of the terms of the Placing Agreement are set out above.

9.9      Monies received from applicants pursuant to the Placing will be held by Liberum or Jefferies (as the case may be) until such time as the Placing Agreement becomes unconditional in all respects. If the Placing Agreement does not become unconditional in all respects by 8.00 a.m. on 3 December 2019, or such later date as the Company, Liberum and Jefferies may agree in writing (not being later than 8.00 a.m. on 12 December 2019), application monies will be returned without interest at the risk of the applicant.

9.10    Liberum and Jefferies may, and their affiliates acting as an investor for its or their own account(s) may, subscribe for and/or purchase Placing Shares and, in that capacity may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise. Accordingly, references in this Announcement to the Placing Shares being offered, subscribed, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by Liberum, Jefferies and/or any of their respective affiliates acting as an investor for its or their own account(s). Neither Liberum, Jefferies nor the Company intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so.

9.11    Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

9.12    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, this Announcement.

9.13    References to time in this Announcement are to London time, unless otherwise stated.

9.14    All times and dates in this Announcement may be subject to amendment. Liberum and Jefferies shall notify the Placees and any person acting on behalf of a Placee of any changes.

10.      Information to Distributors

10.1    Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended from time to time (''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 Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the ''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 Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Liberum and Jefferies will only procure investors who meet the criteria of professional clients and eligible counterparties.

10.2    For the avoidance of doubt, the 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.

10.3    Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

DEFINITIONS

The following definitions apply through this Announcement unless the context otherwise requires:

 "Acquisition Agreement" means the conditional share purchase agreement dated 28 November 2019 between the Sellers (1) and the Company (2) in relation to the Proposed Acquisition

"Adjusted earnings per share" (a non-GAAP measure) is defined as Net Income (cash) per share, where the number of shares across each period is the current amount of ordinary shares in issue. Net Income (cash) is defined as Group Adjusted EBITDA less cash interest and tax paid.

"Adjusted EBITDA" is a non-GAAP measure, which is defined as profit before interest on borrowings, tax and capitalisation of development costs, depreciation, amortisation and non-recurring items

 "Admission" means the admission of the Placing Shares and Consideration Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules

"AIM" means the market of that name operated by the London Stock Exchange

"AIM Rules" means the AIM Rules for Companies published by the London Stock Exchange as they may be amended and replaced from time to time

"Announcement" means this announcement (including the Appendix to this announcement)

"Articles" means the Company's articles of association

"Board" means the Company's board of Directors

"Company" means Codemasters Group Holdings plc, a company incorporated and registered in England and Wales under company number 06123106 whose registered office is at Codemasters Campus, Stoneythorpe, Southam CV47 2DL

"Completion" means completion of the Proposed Acquisition

"CREST" means the relevant system (as defined in the Regulations) which enables title to units of relevant securities (as defined in the Regulations) to be evidenced and transferred without a written instrument and in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in the Regulations)

"Directors" means the directors of the Company

"Enlarged Share Capital" means the issued Ordinary Share capital of the Company immediately following Admission comprising the Existing Ordinary Shares, the Initial Consideration Shares and the Placing Shares assuming full subscription under the Placing

"Existing Ordinary Shares" means the 140,000,000 Ordinary Shares in issue as at the date of this document being the entire issued share capital of the Company prior to Admission

 "FCA" means the Financial Conduct Authority

"FSMA" means the Financial Services and Markets Act 2000, as amended

"Group Adjusted EBITDA" is a non-GAAP measure used by the Company, which is defined as profit before finance costs on borrowings, tax and capitalisation of development costs, depreciation, amortisation and non-recurring items

"Group Borrowings Adjustment" means a reduction from the cash element of the Earn-Out Consideration for the 2020 Earn-Out Period of an amount equal to the amount of SMS' "debt" (as defined in the Acquisition Agreement) at Completion plus: (i) any interest on such amount from the date of Completion until the "debt" is repaid in full; and (ii) the aggregate amount of cash provided by Codemasters or a third party to the SMS Group from the date of Completion to 31 December 2020

"Jefferies" means Jefferies International Limited, a company incorporated and registered in England and Wales under company number 01978621 whose registered office is at 100 Bishopsgate, London EC2N 4JL, joint broker to the Placing

"Liberum" means Liberum Capital Limited, a company incorporated and registered in England and Wales under company number 05912554 whose registered office is at Ropemaker Place, 25 Ropemaker Street, London, EC2Y 9LY, the Company's nominated adviser and joint broker to the Placing

"London Stock Exchange" means London Stock Exchange plc

"Ordinary Shares" means the ordinary shares of 1 penny each in the capital of the Company

"Placing" means the placing of the Placing Shares at the Placing Price by Liberum and Jefferies as agents for and on behalf of the Company pursuant to the terms of the Placing Agreement

"Placing Agreement" means the conditional agreement dated 28 November 2019 relating to the Placing, between the Company, Liberum and Jefferies

"Placing Price" means 210 pence per Placing Share

"Placing Shares" means up to 9,523,809 new Ordinary Shares to be issued in connection with the Placing

"Proposed Acquisition" means the proposed acquisition by the Company of the entire issued share capital of SMS on the terms of the Acquisition Agreement

"Prospectus Regulation" means Regulation (EU) 2017/1129

"Regulation S" means Regulation S under the Securities Act

"Regulations" means the UK Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended

"Registrars" means Link Market Services Limited (trading as Link Asset Services)

"Securities Act" means the United States Securities Act of 1933, as amended

"Sellers" Ian Bell and all of the other shareholders in SMS at the date of the Acquisition Agreement

"SMS" means Slightly Mad Studios Pte Limited whose registered office is at 1 Scotts Road, #21-10 Shaw Centre, Singapore 228208

"SMS Adjusted EBITDA" the Adjusted EBITDA of the SMS Group as further adjusted by the specific accounting policies as agreed and set out in the Acquisition Agreement

"SMS Group" means SMS and its subsidiaries

"UK" or "United Kingdom" means the United Kingdom of Great Britain and Northern Ireland