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

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN EDEN RESEARCH PLC OR ANY OTHER ENTITY IN ANY JURISDICTION WHERE TO DO SO WOULD BREACH ANY APPLICABLE LAW OR REGULATION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY INVESTMENT DECISION IN RESPECT OF EDEN RESEARCH PLC.

THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) 596/2014 WHICH FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("UK MAR"). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN UK MAR) WERE TAKEN IN RESPECT OF CERTAIN OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION, AS PERMITTED BY UK MAR. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

28 July 2023

Eden Research Plc

("Eden" or "Company")

Proposed Firm Capital Raising of £1.1 million, Minimum Conditional Capital Raising of £7.9 million & Retail Offer to raise up £0.5 million

Eden Research plc (AIM: EDEN), the AIM-quoted company that develops and supplies breakthrough biopesticide products and natural microencapsulation technologies to the global crop protection, animal health and consumer products industries, today announces that it has raised £1.1 million (before expenses) through a firm placing and subscription of new Ordinary Shares ("Firm Capital Raising") and has conditionally raised a minimum of £7.9 million (before expenses) by way of a Placing of new Ordinary Shares ("Conditional Capital Raising").  The Conditional Capital Raising is subject to the conditions set out below, including receipt of EIS Advance Assurance from HMRC and a Reduction of Capital (the "Conditions"). The Directors may increase the Conditional Capital Raising to a maximum of £9.4 million prior to Second Admission.

The Firm Capital Raising and the Conditional Capital Raising (together the "Capital Raising") will be at the Issue Price of 6.5 pence per share (the "Issue Price") to certain institutional and other investors. Furthermore, to enable other Shareholders not able to participate in the Capital Raising an opportunity to subscribe for additional Ordinary Shares, the Company is proposing to raise up to an additional £0.5 million (before expenses) by way of a retail offer to its existing shareholders via the Bookbuild Platform (the "Retail Offer") of up to 7,692,308 new Ordinary Shares at the Issue Price.

Eden is currently the only UK-quoted company focused on biopesticides for sustainable agriculture and is well positioned to capitalise on the rapidly growing biopesticides market, which is projected to be worth over £11 billion by 2027. The Company expects to apply the net proceeds of the Firm Capital Raising and any proceeds from the Retail Offer principally to fund materials to build up stocks for its new seed treatment. Subject to the satisfaction of the Conditions, the Conditional Capital Raising will be used to advance the development, registration and commercialisation of new key product categories, including new insecticide formulations and seed treatments.

Transaction Highlights

·      Firm Placing and Firm Subscription of 16,923,077 new Ordinary Shares at the Issue Price with new and existing investors to raise £1.1 million (before expenses), comprised of a Firm Placing of 13,945,076 ordinary shares and a Firm subscription for 2,978,001 new Ordinary Shares by Sipcam Oxon S.p.A. and certain Directors (intend to subscribe) at the Issue Price.

·      Conditional Capital Raising of a minimum of 121,538,462 new Ordinary Shares at the Issue Price with new and existing investors to raise £7.9 million (before expenses) with potential to raise up to an additional £1.5 million prior to Second Admission.

·      Retail Offer at the Issue Price to raise up to an additional £0.5 million (before expenses)

·      The Directors intend to use the net proceeds from the Firm Capital Raise and any proceeds from the Retail Offer for the following purposes:

o  Working capital to fund stock purchase for the Company's new seed treatment product

o  Territory expansion (e.g. India, LATAM, SEA) for Mevalone and Cedroz

o  Label expansion through lab screening, pot and field trials, formulation development etc for the Company's new seed treatment

o  Expand commercial team with commercial director and market development /Product Manager

The Directors intend to use the net proceeds from the Conditional Capital Raise for the following purposes:   

o  Additional seed treatment label expansions

o  Insecticide label expansions

o  New product development

o  US based team

The Company will shortly be posting a Notice of General Meeting and an accompanying circular (the "Circular") to existing shareholders following this announcement. All relevant documents will be available to download at https://www.edenresearch.com/.

Sean Smith, Chief Executive Officer of Eden, said:

"Just over three years ago, with the support of a strong group of new and existing investors, Eden successfully refinanced the Company which facilitated the building of a highly effective team capable of accelerating the pace of innovation and commercial progress.  Subsequently, we have demonstrated the progress that can be made when resourced adequately to support advancement and growth.  There is no better example of this than the recent announcement of our new seed treatment product, Ecovelex, which was developed in close collaboration with Corteva Agriscience. Ecovelex represents not only an entirely new category of products for Eden, but it demonstrates what a focussed, experienced and motivated team can achieve in a relatively short period of time.  Ecovelex was invented by Eden's team working in our facilities just south of Oxford. 

Today, with the encouragement of a good number of new and existing investors, we are pleased to take the next step along our journey, with an accelerated pace and purposeful stride.  With the support of investors, we will be able to fulfil an order that represents an opportunity to jump-start the commercialisation of a new product.  Moreover, in response to strong investor interest, we will be providing the Company with the financial strength to grow our addressable market and business overall.

As I said three years ago, the outlook for the biopesticides market remains undoubtedly positive, with a clear, growing demand from a consumer market for sustainably grown produce and a notable shift towards greener farming practices. Eden's biopesticide solutions combine high levels of efficacy that are comparable to synthetic pesticides and are aligned with the direction of regulatory travel, which has seen restrictions and, in some cases, the removal of conventional products from the market, such as we have seen in the bird repellent seed treatment market, the target for Ecovelex."

The information contained within this announcement (the "Announcement") is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this Announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.

For further information contact:

1.     Introduction

On 28 July 2023, the Company announced a proposed Fundraising, pursuant to which it proposes to raise, subject to certain conditions up to £11.0 million (before expenses) by (i) the Firm Capital Raising of £1.1 million at the Issue Price with certain institutional and other investors, including Sipcam; (ii) the Conditional Capital Raising of a minimum £7.9 million at the Issue Price to certain institutional investors with the potential to increase the Conditional Capital Raise by up to £1.5 million; and (iii) up to approximately £0.5 million (before expenses) by way of a Retail Offer made to existing Shareholders of up to 7,692,308 new Ordinary Shares at the Issue Price.

The net proceeds of the Firm Capital Raising and any proceeds of the Retail Offer will be used principally to fund materials to build up inventory for the new seed treatment.  Subject to the satisfaction of the Conditions, the Conditional Capital Raising will be used to advance the development, registration and commercialisation of new key product categories, including new insecticide formulations and seed treatments, as well as to provide additional working capital for the Group associated with the new development areas, as described in more detail in paragraph 4 of the Circular.

The Conditional Capital Raising is conditional (amongst other things) upon (i) the approval of the Resolutions at the General Meeting; (ii) the Advanced Assurance being obtained from HMRC; (iii) the Capital Reduction becoming effective; and (iv) Second Admission.

The Issue Price equates to a discount of 13.3 per cent. to the closing middle market price of 7.5 pence per Ordinary Share on 27 July 2023 (being the last Business Day before announcement of the Fundraising).

In addition to the Fundraising, the Company is proposing to carry out a capital reduction through the cancellation of the Company's share premium account. This would have the effect of creating distributable reserves, which would be used to eliminate any accumulated deficit on the Company's profit and loss account and to the extent that the balance arising upon completion of the proposed reduction exceeds such deficit, to create distributable reserves.

The background to and reasons for the Capital Reduction are set out in paragraph 3 of the Circular. The Capital Reduction is conditional upon, amongst other things, the approval of the Court and of the Shareholders at the General Meeting.

2.      Background and rationale for the Placing and Retail Offer

The Company's vision is for the Group to become the leader in sustainable bioactive products and the Board believes that the Group is well positioned to capitalise on the global shift towards more environmentally friendly methods of crop protection.  The Company is currently the only UK quoted company focused on biopesticides for sustainable agriculture. The Group develops and supplies innovative biopesticide products to the global crop protection market, using the Company's patented microencapsulation technology, Sustaine®.  Sustaine microcapsules are naturally sourced, plastic-free, biodegradable micro-spheres derived from yeast extract.  Importantly, the Sustaine microencapsulation technology enables the technical viability of naturally occurring terpenes for use in commercial crop protection. The Company's current products include biofungicide, Mevalone; bionematicide, Cedroz; and bird repellent seed treatment, Ecovelex™.

The Group's presence grew in 2020-23 through new authorisations for both Cedroz and Mevalone, including in the USA in September 2022 and in Poland and New Zealand in 2023. The Directors anticipate further approvals in Europe and further abroad in 2023, with various submissions pending including in Brazil, South Africa, Chile and Argentina.  The Directors expect the UK and a range of other Central EU countries to approve Mevalone in 2023.

The Company is pursuing the Fundraising to continue to drive commercial progress on the back of recent approvals and expected further overseas approvals; to expand the Company's product portfolio; and to commercialise the first seed treatment product.

Market Opportunity for Biopesticides

While the use of effective pesticides has been fundamental to the farming revolution over the last 100 years, governments and consumers have increasingly begun to acknowledge the risk to the environment and human health posed by some conventional pesticides. This has led to the banning or restriction (especially in Europe) of some common pesticides such as Neonicotinoids and Chlorothalonil.

This has subsequently increased the use of biopesticides and, as a result, the biopesticides market is growing at a compound annual growth rate (CAGR) of approximately 15% per annum and is projected to be worth more than $11 billion by 2027.  The global seed treatment market is projected to be worth more than $12.5 billion by 2027. 

The Group's biopesticide solutions solve a number of the issues of conventional pesticides. Using plant derived active ingredients that are generally accepted as safe by regulators around the world means that the products are not subject to residue limits or long pre-harvest intervals, and can be used to treat post-harvest storage diseases on some produce, subject to regulatory approval.

In addition, the Group's yeast based Sustaine encapsulation technology allows the Group's products and conventional pesticides to be used without the addition of micro-plastics. There are currently global concerns regarding the volume of micro-plastics in the environment and the impact their presence has on human health and wildlife. In response, there have been new regulations proposed which could restrict the intentional addition of plastic to crop protection and health products, which has created a need for the major pesticide producers to actively look for alternative approaches to the encapsulation of existing chemical treatments. In addition, the time and cost of bringing new agrochemical products to market has increased to around 10 to 12 years and approximately $300 million respectively.

From a broader perspective, concerns regarding the impact on human health of some pesticides has increased the consumer desire for sustainable and organic products and encouraged regulators to put stricter controls around spraying of crops and the residue limits that are applied to farm produce.

Eden's Current Products and Technology

Mevalone® - Fungicide Product

Eden's first biopesticide, Mevalone, is a fungicide used in the prevention and treatment of botrytis in table and wine grapes, as well as the control of powdery mildew on grapevines and, in certain territories, the treatment of botrytis on a range of crops ranging from kiwis to onions. 

In the last 12 months the Company has received regulatory approvals for use on a range of new crops in countries such as Italy, the USA (now approved in 17 states), New Zealand and Poland. Approval in the state of California, a key market for Mevalone, is expected in time for the 2024 growing season.  Cedroz has already received approval in California.

The Company recently signed a distribution agreement with large agriscience business, Corteva, which allows Corteva to market, distribute and sell the Group's fungicide product, Mevalone®, in France on an exclusive basis. There are existing distribution agreements for Mevalone with Sipcam and Sumi Agro for other major territories, and the Company recently announced Anasac Colombia Ltd as its exclusive distributor of Mevalone in Colombia.

Given the recent flow of regulatory approvals and the distribution agreements now in place, the Directors believe the Group is well placed to begin delivering material sales of the product.  Proceeds from the Fundraising will be deployed to further commercialise this product for new uses and for as-yet untapped markets such as India and S.E Asia.

Cedrozä - Nematicide Product

In addition to Mevalone, Eden has developed a nematicide product which is used to tackle nematode infestations which can damage crops and affect yield.  Nematodes are parasites that affect a wide range of crops grown in open fields and in greenhouses.

In 2016, Eden signed an exclusive distribution agreement with Eastman Chemical for the nematicide product which has since been branded Cedroz. Eastman acquired the rights to register and sell Cedroz in 29 countries.  Sales of Cedroz began in the EU in 2020.  Cedroz is approved in South and Central EU on a wide range of high value crops. In September 2022, Cedroz™ received approval for use in various states in the USA, including Florida and California. Further submissions for approvals in various additional key markets around the world have been made. 

Given recent progress and approvals, the Directors expect a return to sales growth for Cedroz™ in 2023.

Ecovelex™ - Bird repellent seed treatment

Ecovelex™ is a biological bird repellent seed treatment initially for use on maize. Subject to regulatory approvals, Ecovelex™ represents a new entrant into the seed treatment market and is intended to replace conventional chemicals banned in the EU and UK. It was developed to tackle crop destruction caused by birds - a major cause of losses in maize and other crops.  Ecovelex™ works by affecting the bird's olfactory system, creating an unpleasant taste or odour that repels the bird, leaving the seeds safely intact and the bird unaffected and free to find alternative food sources. The product is based on plant-derived chemistry and formulated using the Group's Sustaine microencapsulation system, supporting farmers as they strive to meet consumer demands for more sustainable agriculture.

Ecovelex™ has been developed over three years through a collaboration with Corteva, for which a development agreement was signed in May 2021. Field trials undertaken by both parties were successful and demonstrated efficacy. An application for regulatory authorization has been submitted to the EU and UK regulatory authorities, with the approval process expected to take between 18 and 24 months, and therefore the possibility of sales in time for the 2024 growing season, subject to emergency use authorisations. Initial markets targeted are the EU plus the UK.

It is expected that the product will be commercialised in additional regions and further developed for use on additional crops in due course and part of the proceeds from the Fundraising will be utilised to progress these aims.

Sustaine® - Microencapsulation Technology

The Group proposes to use part of the proceeds from the Conditional Placing to continue actively developing formulations with traditional chemical products using its Sustaine microencapsulation technology.

By 2025 in the EU, pesticides containing synthetic polymer microplastics are likely to be severely restricted or banned entirely and removed from the market. The Directors believe that the only acceptable alternative is the substitution with biodegradable formulations. Reformulated products will likely need to be evaluated and registered within the five-year transition period.

The Group has developed a natural formulation technology, Sustaine®, using particles derived from natural yeast cells. The technology was originally developed as a drug delivery method for human health applications before the Group adapted it for use in the encapsulation of pesticides. By creating a stabilised aqueous emulsion, Sustaine® enables the formulation of pesticides using a number of terpene-based active ingredients which would not be suitable without being encapsulated. The encapsulation provides for the sustained release of these ingredients when in contact with water slowing or stopping release in dry conditions, enabling their safe, more efficient use. The benefit of Sustaine® is that it is cost effective, useful for a wide range of active ingredients, plastic-free, high capacity, robust, sustainable and facilitates reduced phytotoxicity. 

Sustaine® is a proven, commercially-used solution to the microplastics problem in formulations requiring encapsulation. The Group currently has a number of projects underway where it is testing the compatibility of Sustaine® with third-party active ingredients to determine whether benefits such as formulation stability, dose reduction or resistance management could be achieved. The regulatory restriction of microplastics used as components of crop protection and many other products contributes significantly to the opportunity for Eden to deploy its Sustaine® technology on a very large scale.

3.      Background and rationale for the Capital Reduction

The Company had accumulated losses of £43.3 million and £39.3 million standing to the credit of its share premium account shown by its audited accounts for the period to 31 December 2022.

The Company's share premium account will be increased by up to approximately £1,353,846 on the issue of the Firm Shares and the Retail Offer Shares, assuming an aggregate maximum of £1,600,000 raised following First Admission.

It is proposed to cancel the Company's share premium account which would have the effect of leaving it with distributable reserves of an estimated £0.5 million to £1.0 million, depending on the outcome of the Retail Offer.

Whilst the Board and management remain focussed on the continued execution of the Company's stated growth strategy as the primary means of delivering shareholder value in the near term and has no current intention of declaring dividends, the proposed Capital Reduction would provide greater scope to do so in the future if the Board determined that the declaration of dividends were appropriate.

In addition, the Capital Reduction would provide the Board with the option, should it so wish, and should it be appropriate to do so, of purchasing the Company's own Ordinary Shares pursuant to the power granted at the Company's annual general meeting on 29 June 2023, which requires sufficient distributable reserves to do so.

4.      Use of proceeds

The Directors intend to use the net proceeds from the Firm Capital Raising and Retail Offer of approximately £1.35 million and net proceeds of the Conditional Capital Raising, assuming full take up, of approximately £8.8 million for the following purposes:

Firm Capital Raising and Retail Offer:

·      c. £0.5 million for the launch of the new seed treatment and label expansion;

·      c. £0.2 million to expand the Group's commercial team; and

·      c. £0.3 million to expand territories for Mevalone and Cedroz products.

Conditional Capital Raising:

·      c. £2.5 million for the further development of the seed treatment product and additional label expansions;

·      c. £2.5 million for insecticide label expansion into new territories;

·      c. £2.5 million for new product development;

·      c. £0.5 million to expand the Group's commercial team; and

·      c. £0.5 to 1.5 million for general working capital

There can be no certainty that the Conditions will be satisfied and the Conditional Shares will be issued.  If that is the case, the proceeds of the Conditional Capital Raising will not be received.

5.      Current Trading and Prospects

The first half of 2023 has seen a modest increase in product sales. Though it is relatively early in the season to know with any certainty, early indications from southern Europe, in particular, are that the sales of Mevalone are developing well.  Sales of Cedroz have also shown a strong return to growth in the first half of the year.

The Company also believes that there is a reasonable opportunity to gain emergency authorisations for Ecovelex, and if this is granted it is possible that product sales revenue overall may exceed the current forecast, although it is, of course, too early to say at this stage.

In 2024, the Company expects to see further, strong product sales growth off the back of approvals for both Mevalone and Cedroz in the US and Central Europe, as well as label extensions for Mevalone in various countries. Sales in the US for Mevalone are, however, materially influenced by the timing of receipt of the approval in California, which is currently expected before the end of 2023.

In addition and subject to the receipt of regulatory clearance, the Company expects sales of Ecovelex to contribute significantly to the top line in 2024.

Subject to successful field trials undertaken by several interested parties, the Company expects to move into commercial negotiations for its insecticide product towards the end of 2023 and into early 2024. It is currently expected that the insecticide will be ready for sale in 2024/25 in the US and 2025/6 in the EU, subject to regulatory timing and approvals.

6.      Related parties' participation

Directors' participation in the Firm Capital Raising

As part of the Firm Capital Raising, all of the Directors have subscribed (either personally or through a nominee) for an aggregate of 2,398,077 Firm Shares at the Issue Price. Details of the Firm Shares for which the Directors have subscribed (either personally or through a nominee) are set out below:

# The number of Ordinary Shares presented in this table as being held or subscribed for by Directors refers to the number of Ordinary Shares held or subscribed for by them either personally or through a nominee.

The participation by the Directors referred to above in the Firm Capital Raising is classified as a related party transaction for the purposes of the AIM Rules. As all of the Directors are participating in the Firm Capital Raising, Cenkos Securities confirms that it considers that the terms of the transaction are fair and reasonable insofar as the Company's Shareholders are concerned.

7.      Details of the Placings

The Company has raised approximately £1.1 million before expenses by the issue of the Firm Placing Shares at the Issue Price to certain Shareholders and new investors. The Firm Placing Shares will, when issued, rank pari passu with the Existing Ordinary Shares.

Institutional and other investors have conditionally agreed to subscribe for the Firm Placing Shares at the Issue Price. The Firm Placing has not been underwritten. The issue of the Firm Placing Shares is conditional, inter alia, upon First Admission becoming effective on the First Admission Date (or such later date as the Company and Cenkos Securities may agree, being not later than the First Admission Long Stop Date).

The Placing of the Conditional Placing Shares is conditional, inter alia, on (i) the approval of the Resolutions at the General Meeting, (ii) the Advanced Assurance being obtained from HMRC, (iii) the Capital Reduction becoming effective and (iv) Second Admission. It is expected that Second Admission will occur on the third Business Day from the Conditional Placing becoming unconditional in all respects (save for Second Admission), and in any event not later than the Second Admission Long Stop Date. The Conditional Placing has not been underwritten.

In the event that the Conditions have not been fulfilled prior to the Second Admission Long Stop Date (or at such time as HMRC has informed the Company the Advanced Assurance will not be obtained), then the Conditional Placing will not complete and the funds from the Conditional Capital Raising will not be received.

It should be noted that First Admission is not conditional upon Second Admission. However, Second Admission is conditional on First Admission.

The Directors believe that, following the Capital Reduction, the Conditional Placing Shares to be issued pursuant to the Conditional Placing will meet the requirements of section 173 ITA for the purposes of the EIS and the Company will be a Qualifying Holding and the Conditional Placing Shares will be eligible shares for the purposes of investment by VCTs.

Under the terms of the Placing Agreement, Cenkos Securities has agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Issue Price. The Placing Agreement contains certain warranties and indemnities from the Company in favour of Cenkos Securities. 

Under the Placing Agreement, the Company has agreed to pay to Cenkos Securities a fixed sum and commissions based on the aggregate value of the Fundraising, and the costs and expenses incurred by it in relation to the Fundraising.

The Placing Agreement contains customary warranties given by the Company in favour of Cenkos Securities in relation to, amongst other things, the accuracy of the information in this Document and other matters relating to the Group and its business.  In addition, the Company has agreed to indemnify Cenkos Securities (and their respective affiliates) in relation to certain liabilities which they may incur in respect of the Fundraising.

Cenkos Securities has the right to terminate the Placing Agreement in certain circumstances prior to First Admissions and in respect only of the Conditional Capital Raising (but not the Firm Capital Raising or the Retail Offer) prior to Second Admission, in particular, in the event of breach of the warranties, the occurrence of a material adverse change in circumstances material to the Fundraising, or if the Placing Agreement does not become unconditional.

8.      Details of the Firm Subscription

In addition, Eden has entered into a conditional Subscription Agreement with Sipcam, one of its commercial partners, pursuant to which Sipcam will subscribe for 1,670,308 Firm Subscription Shares conditional on First Admission.

Please see paragraph 6 above for details of the Directors' participation in the Firm Capital Raising.

The Issue Price of 6.5 pence per share equates to a discount of 13.3 per cent. to the closing price of 7.5 pence on 27 July 2023, the latest Business Day prior to the announcement of the Fundraising.

9.      The Retail Offer

The Company values its Shareholder base and believes that it is appropriate to provide eligible retail Shareholders in the United Kingdom the opportunity to participate in the Retail Offer. The Retail Offer will allow retail Shareholders to participate in the Fundraising by subscribing for Retail Shares at the Issue Price.

Eligible retail Shareholders can contact their intermediary (normally a broker, investment platform or wealth manager) to participate in the Retail Offer. In order to participate in the Retail Offer, each intermediary must be on-boarded onto the BookBuild Platform, have an active trading account with Cenkos Securities (who is acting as the Retail Offer Coordinator) and have been approved by the Retail Offer Coordinator as an intermediary in respect the Retail Offer, and agree to the final terms and the Retail Offer terms and conditions, which regulate the conduct of the Retail Offer on market standard terms and provide for the payment of commission to any intermediary that elects to receive a commission and/or fee (to the extent permitted by the FCA Handbook Rules) from the Retail Offer Coordinator (on behalf of the Company).

Any expenses incurred by any intermediary are for its own account. Eligible retail Shareholders who wish to participate in the Retail Offer should confirm separately with any intermediary whether there are any commissions, fees or expenses that will be applied by such intermediary in connection with any application made through that intermediary pursuant to the Retail Offer.

The Retail Offer will be open to eligible retail Shareholders in the United Kingdom at 5.00 p.m. on 28 July 2023 on the following website: https://www.bookbuild.live/deals/VZ7ZE7/authorised-intermediaries. The Retail Offer is expected to close by no later than 10.00 a.m. on 2 August 2023. Eligible retail Shareholders should note that financial intermediaries may have earlier closing times. The Retail Offer may close early if it is oversubscribed.

To be eligible to participate in the Retail Offer, applicants must meet the following criteria before they can submit an order for Retail Shares: (i) be a customer of one of the participating intermediaries listed on the above website; (ii) be resident in the United Kingdom; and (iii) be a shareholder in the Company  (which may include individuals aged 18 years or over, companies and other bodies corporate, partnerships, trusts, associations and other unincorporated organisations and includes persons who hold their Ordinary Shares directly or indirectly through a participating intermediary).

The Company reserves the right to scale back any order at its discretion. The Company reserves the right to reject any application under the Retail Offer without giving any reason for such rejection.

It is vital to note that once an application for Retail Offer Shares has been made and accepted via an intermediary, it cannot be withdrawn.

The Retail Offer is an offer to subscribe for transferable securities, the terms of which ensure that the Company is exempt from the requirement to issue a prospectus under Regulation (EU) 2017/1129 as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018. The aggregate total consideration for the Retail Offer will not exceed £500,000 and therefore the exemption from the requirement to publish a prospectus, set out in section 86(1) FSMA, will apply.

The Retail Shares are not being offered generally in the UK or elsewhere. It is expected that the proceeds of the Retail Offer due to the Company will be received by it soon after Admission.

The Retail Announcement was made on 28 July 2023 and contains further information on how investors can participate in the Retail Offer.

The Retail Offer remains conditional on, inter alia:

·      the Firm Placing being or becoming wholly unconditional;

·      Admission of the New Ordinary Shares becoming effective by no later than 8.00 a.m. on 3 August 2023 or such later time and/or date as Cenkos Securities and the Company may agree.

The Retail Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

Application will be made to the London Stock Exchange for Admission of the Retail Shares to trading on AIM. It is expected that Admission will occur and that dealings will commence at 8.00 a.m. on 3 August 2023, at which time it is also expected that the Retail Shares will be enabled for settlement in CREST.

If you are in any doubt as to what action you should take, you should immediately seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant or other independent professional adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

10.   The Capital Reduction

Under the Act, with the sanction of a resolution of the Shareholders and the confirmation of the Court, the Company may reduce or cancel its share premium account.

In seeking this approval, the Court will need to be satisfied that the interests of the Company's creditors will not be prejudiced as a result of the Capital Reduction. The Court may require the Company to put in place protection for the benefit of the Company's creditors at the date of the Court application. The Board anticipates that the Company will provide such protection as so required.

The Board reserves the right to abandon or to discontinue (in whole or in part) any application to the Court in the event that the Board considers that the terms on which the Capital Reduction would be (or would be likely to be) confirmed by the Court would not be in the best interests of the Company and/or the Shareholders as a whole. The Directors will, prior to the making of any application to the Court for the approval of the Capital Reduction, undertake a careful review of the Company's liabilities (including contingent liabilities) and consider the Company's ability to satisfy the Court that, as at the date (if any) on which the Court Order relating to the Capital Reduction and the statement of capital in respect of the Capital Reduction have both been registered by the Registrar of Companies at Companies House and the Capital Reduction therefore becomes effective, the Company's creditors will be sufficiently protected.

11.   General Meeting

The Directors do not currently have authority to allot the Conditional Shares and, accordingly, the Board is seeking the approval of Shareholders to allot the Conditional Shares at the General Meeting.

A notice convening the General Meeting, which is to be held at the offices of Milton Park Innovation Centre, 99 Park Drive, Milton Park, Oxfordshire, OX14 4RY at 9:00 a.m. on 17 August 2023, is set out at the end of the Circular. At the General Meeting, the following Resolutions will be proposed:

·        Resolution 1, which is an ordinary resolution, to authorise the Directors to allot relevant securities for cash up to an aggregate nominal amount of £1,446,153.85, being equal to 144,615,385 Conditional Shares;

·        Resolution 2, which is conditional on the passing of Resolution 1 and is a special resolution, to authorise the Directors to allot 144,615,385 Conditional Shares on a non-pre-emptive basis; and

·        Resolution 3, which is conditional on the passing of Resolution 1 and Resolution 2 and is a special resolution, to authorise the directors, subject to approval from the Court, to cancel the share premium account of the Company.

The authorities to be granted pursuant to Resolutions 1 and Resolution 2 will expire on whichever is the earlier of (a) the conclusion of the next Annual General Meeting of the Company; and (b) the date falling six months from the date of the passing of the Resolutions (unless renewed, varied or revoked by the Company prior to or on that date) and shall be in addition to the Directors' authorities to allot relevant securities and dis-apply statutory pre-emption rights granted at the Company's Annual General Meeting held on 29 June 2023.

For the purposes of section 571(6)(c) of the Act, the Directors determined the Issue Price after consideration of applicable market and other considerations and having taken appropriate professional advice.

Shareholders will find instructions within the Circular on how to complete a Form of Proxy for use in connection with the General Meeting. The Form of Proxy should be completed and returned in accordance with the instructions thereon so as to be received by Link Group, PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL, as soon as possible and in any event not later than 48 hours (excluding any part of a day that is not a working day) before the time of the General Meeting. Completion and return of the Form of Proxy will not prevent a Shareholder from attending and voting at the General Meeting.

12.   Recommendation

The Directors believe the Capital Reduction, the Fundraising and the passing of the Resolutions to be in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors unanimously recommend Shareholders to vote in favour of the Resolutions as they intend so to do in respect of their beneficial shareholdings amounting to 3,411,052 Ordinary Shares, representing approximately 0.9 per cent. of the existing issued ordinary share capital of the Company.

PLACINGS AND SUBSCRIPTIONS STATISTICS