HEIQ Heiq Plc

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

15 February 2024

HeiQ Plc

("HeiQ" or "the Company")

Acquisition, Fundraising & Trading Update

Capital Reorganisation

Notice of General Meeting

HeiQ (LSE:HEIQ), a leading company in materials innovation and hygiene technologies, is pleased to announce a trading update and the acquisition of a new manufacturing facility in Portugal to commercialise its AeoniQ technology, a sustainable substitute for existing synthetic filament yarns (the "Acquisition").  

The Company also announces a fundraising to raise approximately £2.44 million before expenses (the "Fundraising") through the issue of (i) up to 7,866,709 new ordinary shares (the "Placing Shares") in the Company by way of a placing (the "Placing") of approximately £0.685 million, (ii) up to 862,069 new ordinary shares (the "Retail Shares") through a retail offer targeting existing UK resident retail Shareholders for up to an additional £75k via BookBuild (the "Retail Offer"), and (iii) the issue of €1.97 million in principal amount of unsecured non-interest bearing convertible loan notes ("Convertible Loan Notes"), to be converted at the issue price of 8.7p per share (the "Issue Price").

The Placing, which is being conducted by way of an accelerated bookbuild, will commence immediately following this announcement. A further announcement will be made once the result of the Placing is concluded.

The Convertible Loan Notes will convert automatically, in full, into a maximum of 19,271,222 new ordinary shares in the Company at the Issue Price (the "Convertible Loan Note Shares") following the passing of the Resolutions at the General Meeting.

Together with the Company's existing cash resources, the net proceeds of the Fundraising are being utilised to finance the consideration due for the Acquisition, as well as provide additional working capital for the Group's operations.

Those investors who subscribe for new ordinary shares pursuant to the Retail Offer will do so pursuant to the terms and conditions of the Retail Offer contained in a Retail Offer announcement to be released. For the avoidance of doubt, the Retail Offer is not part of the Placing.

The issue of the Placing Shares and Retail Shares requires shareholder approval, as the issue of the Convertible Loan Notes will utilise in full the authorities obtained at the Company's annual general meeting held in June 2023 (the Placing Shares, Retail Shares and Convertible Loan Note Shares together being the "Fundraise Shares"). The Company, therefore, announces a General Meeting of the Company to be held at the offices of Cavendish Financial Plc, One Bartholomew Close, London, London, UK on 13 March 2024 at 14:00, to seek passing of the necessary resolutions to allow issuance of the Fundraise Shares. An administrative resolution will also be proposed in order to reduce the nominal value of the Company's ordinary shares of 30p each, as the current nominal value is above the Issue Price. A circular will shortly be posted to Shareholders who have opted to receive a hard copy, together with a notice of the General Meeting, containing further details of the Fundraising, the Acquisition and the General Meeting. This document will also be available to view on the Company's website and on the Financial Conduct Authority's ("FCA") national storage mechanism.

Applications will be made for the Fundraise Shares to be admitted to the standard segment of the Official List and admitted to trading on the London Stock Exchange ("Admission"). Admission is expected to become effective on or around 14 March 2024 and the Fundraise Shares will be issued fully paid and will rank pari passu in all respects with the Existing Ordinary Shares of the Company.

Further announcements will be made in due course.

2023 Trading Update and Current Market Environment

Despite highly challenging market conditions, HeiQ announces that revenues for 2023 are anticipated to be in line with market expectations, at approximately $41 million. This outcome was achieved during a period of continued difficulties in the industry, as global apparel demand continued to shrink in Q3 2023 compared to Q3 2022 by -3% (China -3%, EU -5%, US +1%) (source: Lenzing). Historically high inventory levels in Q3 2023 in the US remained at +23% compared to the median 2012-2019 (source: Lenzing). The ongoing challenges into the final quarter of the financial year mean that the Company expects EBITDA to be below market expectations. Cash as at 31 December 2023 was approximately $10 million having utilised additional headroom under the Company's current facilities, with net debt position, excluding liabilities from lease contracts, of $2 million at year end. Net debt including lease liabilities amounted to approximately $10 million (as at 31 December 2023).   

Market conditions in Q1 2024 remain challenging (source: McKinsey), with US optimism balancing Chinese pessimism (source: Reuters). However, it is pleasing to report that there is widespread consensus in the industry that H2 2024 will see consumer confidence improve, inventories reduce to historical averages, and the industry will grow again from today's stabilized low levels (source: Vinatex). With a leading product range, its innovative approach and a reduced cost base, HeiQ is well placed to benefit from this improving picture.

Throughout 2023, HeiQ has focused on balancing investment into its venture innovations (such as HeiQ AeoniQ, HeiQ GrapheneX & HeiQ ECOS) while applying tight cost control across the Group. In a move to reduce costs while preserving capabilities, in preparation for the expected market up turn, HeiQ relocated a substantial part of shared functions to Portugal, a country with great talent and a thriving textile industry. CAPEX investment has been strictly prioritized for license-to-operate and short-term growth project investments. All this has been done to conserve cash and capabilities.

Reorganization into three commercial business units with dedicated leadership teams (Textiles & Flooring, Lifesciences and Antimicrobials) and three ventures (AeoniQ, GrapheneX and ECOS) along with selected leadership changes have increased agility and empowerment.

The Directors believe that HeiQ, with its exciting pipeline of innovations anticipating fundamental market trends, is well positioned to achieve high growth rates in its three business units where market conditions have been challenging for the past two years. In addition, there has been significant progress with developments surrounding the HeiQ AeoniQ venture.

Auditor change and reporting period extension

The Company also announces that it is in the process of appointing a new auditor, following the resignation by Deloitte. The Board considers it prudent to extend the Company' accounting reference date for the financial year 2023 by six months to June 30, 2024 to enable the incoming auditor to properly onboard and complete the audit in a reasonable timeframe. As a consequence of the extension of the financial year the Company will publish unaudited interim financial statements for the 12-month period ending December 31, 2023 by end of March 2024 latest. A further announcement will be made when the new auditor is appointed.

HeiQ AeoniQ update

HeiQ AeoniQ aims to replace oil-based textiles, namely Polyester and Nylon, which account for over 60% of the textile market, with a climate positive, circular filament yarn made of cellulose. HeiQ AeoniQ is the Company's key disruptive technology initiative and is ready to move from a pilot plant to a first production site at commercial scale. The Company aims to reach commercial production by the start of 2026 following the recent achievement of key milestones.

Appointment of Julien Born as Chief Executive Officer (CEO) for HeiQ AeoniQ

The Company is pleased to announce that it has appointed Julien Born as CEO of HeiQ AeoniQ. Julien has demonstrated leadership and knowledge of the textiles industry and brings valuable experience from renowned companies such as DuPont, KOCH Industries, and The LYCRA Company, where he was CEO from 2021 until last year.

Julien's appointment follows the appointment of Robert van de Kerkhof as HeiQ AeoniQ Chairman, who has over 30 years' experience in sustainability leadership and extensive knowledge of the textiles industry and served until Q4 2023 as CCO/CSO and Board member of Lenzing AG.

Julien and Robert strengthen the team around HeiQ's technical industry expert Martin Gerbert-Germ, former Indorama Ventures Executive, who after succeeding with the pilot plant in Austria takes on the role as HeiQ AeoniQ COO, focusing on the scale-up of the production plant of HeiQ AeoniQ in Portugal.

Portugal factory site purchase for scale-up of first 3k tons commercial production plant

Following a successful pilot plant study in Austria, HeiQ has acquired, what it considers to be, the ideal location for the first commercial HeiQ AeoniQ plant in Maia, Portugal. The Directors believe that the secured site is the right location for commercial filament production with a capacity of approximately 3,000 tons per annum. The site is in proximity of HeiQ's current Service Center Hub in Maia, Portugal. The Company intends to consolidate the Group's current and future activities in Portugal at the newly acquired site. This includes Shared Service Center functions as well as the Innovation hub for the Textile & Flooring business unit. The Company was able to move quickly and, as a result, agreed a consideration of approximately €5 million (including taxes) for the Acquisition, which the Directors believe represents a significant discount to market prices for similar properties.

Financing of HeiQ AeoniQ site purchase

In order to close the transaction in a short timeframe and to secure the abovementioned favourable terms, the Company has paid the consideration from existing cash balances and credit lines as well as through a €1.475 million short-term shareholder loan from Cortegrande AG (owned by Group CEO Carlo Centonze), together with the proceeds from the issue of the Convertible Loan Notes to certain of the management team and other existing shareholders, as detailed below, raising €1.97 million. The Convertible Loan Notes will convert automatically at the Issue Price into the Convertible Loan Note Shares following the passing of the resolutions at the General Meeting.

The Company is also offering the Company's wider shareholder base the opportunity to participate in the Fundraising. Accordingly, the Board has decided to issue up to approximately 19.9% of the Company's existing issued share capital through the Placing, the Retail Offer and the conversion of the Convertible Loan Notes, as detailed below.  Carlo Centonze and/or his associated investing entities, have indicated their intention to subscribe for any New Ordinary Shares that are not subscribed pursuant to the Placing.  

Financing of production equipment for the first commercial plant - Award of a first government  Grant

HeiQ has secured an initial EU/Portugal grant "Bioeconomia" up to approximately €10 million for investments in facility equipment, machinery and further R&D activities at its newly acquired AeoniQ facility. A further, second grant is being submitted with the aim to increase the overall grant support by up to 40% of the total project capital expenditure. The Company continues to explore various opportunities to fund the balance of the overall capex (which will be phased) including with strategic partners by bankable offtake agreements.

Carlo Centonze, CEO of HeiQ Group, commented: "We are excited to share these important milestones for HeiQ AeoniQ, which we believe is on track to achieve commercial success by early 2026. The strategic appointment of industry leader Julien Born as the Chief Executive of HeiQ AeoniQ Holding, and the establishment of our first commercial-scale production facility, means HeiQ AeoniQ is well on its way to replacing oil-based textiles with a climate-positive product that has superior environmental profile. I would like to take this opportunity to personally welcome Julien, whose extensive experience as former CEO of the LYCRA Company in high-tech fibres and demonstrated leadership will be pivotal to rapidly scaling HeiQ AeoniQ and achieving our transformative vision for the textile industry."

About HeiQ AeoniQ - target markets and sustainability profile

·    HeiQ AeoniQ, a circular filament yarn made from cellulose, is designed as a substitute for existing synthetic filament yarns, such as environmentally persistent Polyester and Nylon, which constitute over 60% of global annual textile output of 111 million metric tons (source: Statista).

·    The fashion industry represents a third of the global US$1.7 trillion (source: BusinessWire; Euromonitor International), textile market and is responsible for more than 8% of global CO2 emissions, over 20% of wastewater worldwide and more than 20% of the microplastics pollution of the oceans. Polyester and Nylon take up to 1,000 years to degrade and today more than 70% of textiles are disposed in landfill with only 1% close-loop recycled.

·    The Global Polyester fiber market was valued at US$90.6 billion in 2022 and is projected to reach a value of  US$150.3 billion by 2030 at a CAGR of 7.5% over the forecast period (source: vantagemarketresearch.com)

·    The fibers of HeiQ AeoniQ are made from circular cellulosic biopolymers that bind CO2 from the atmosphere. The Directors believe that for every ton of Polyester or Nylon substituted by HeiQ AeoniQ, the carbon footprint can potentially be reduced by 5 tons of CO2. HeiQ is therefore exploring the opportunity to issue carbon credit certificates with HeiQ AeoniQ.

·    The manufacturing process for HeiQ AeoniQ is expected to consume 99% less water than cotton yarns and HeiQ AeoniQ is designed to offer comparable performance properties to Polyester and Nylon. HeiQ AeoniQ is also designed in a way that the textile industry will be able to process it on existing equipment.

·    When compared to conventional Polyester, Nylon, cotton and conventional regenerated cellulosic products, the production of HeiQ AeoniQ yarns will aim to have the best-in-class environmental credentials, as it is designed to be recyclable in a circular textiles economy, will use 100% renewable energy for manufacturing, will feature closed- loop recycling for  more than 99.5% of materials used, will use no restricted substances and will not draw on arable land, pesticides or fertilisers for its feedstock.

The Placing

The Company is proposing to raise a maximum of £0.685 million before expenses in the Placing by the issue of up to 7,866,709 Placing Shares at 8.7 pence per Placing Share to certain existing Shareholders and new investors. The Placing Shares will, when issued, rank pari passu with the Existing Ordinary Shares in the Company.

Institutional and other investors have conditionally agreed to subscribe for the Placing Shares at the Issue Price. The Placing is not underwritten by any person.

The Placing is conditional, inter alia, on:

·    the passing of the Resolutions at the General Meeting;

·    the Placing Agreement becoming unconditional in all relevant respects and not having been terminated in accordance with its terms prior to Admission; and

·    Admission becoming effective by no later than 8.00 a.m. on 14 March 2024 or such other date (being not later than 8.00 a.m. on 29 March 2024) as Cavendish and the Company may agree.

Under the terms of the Placing Agreement, Cavendish has conditionally 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 Cavendish and Cavendish may terminate the Placing Agreement in certain customary circumstances.

The Retail Offer

The Company values its retail Shareholder base and believes that it is appropriate to provide its existing retail Shareholders with the opportunity to participate in the Retail Offer at the Issue Price. The Retail Offer is separate from the Placing.

The Company is therefore using the BookBuild platform to make the Retail Offer available in the United Kingdom through the financial intermediaries (normally a broker, investment platform or wealth manager) which will be listed, subject to certain access restrictions, on the following website: https://www.bookbuild.live/deals/213NL1/authorised-intermediaries . Cavendish will be acting as retail offer coordinator in relation to this Retail Offer (the "Retail Offer Coordinator").

Existing retail shareholders can contact their broker or wealth manager ("Intermediary") to participate in the Retail Offer. In order to participate in the Retail Offer, each intermediary must be on-boarded onto the BookBuild platform and agree to the final terms and the retail offer terms and conditions, which regulate, inter alia, 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. Investors 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 investors in the United Kingdom from 8:00am on 16 February 2024. The Retail Offer is expected to close at 4:30pm on 22 February 2024. Eligible shareholders should note that financial intermediaries may have earlier closing times. In addition, the Retail Offer may close early if it is oversubscribed.

The Retail Offer is and will, at all times, only be made to, directed at and may only be acted upon by those persons who are, shareholders in the Company. To be eligible to participate in the Retail Offer, applicants must meet the following criteria before they can submit an order for Retail Offer 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 shares in the Company directly or indirectly through a participating intermediary). For the avoidance of doubt, persons who only hold CFDs, Spreadbets and/or similar derivative instruments in relation to shares in the Company are not eligible to participate in the Retail Offer.

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

It is important 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. It is a term of the Retail Offer that the aggregate total consideration payable for the Retail Offer Shares will not exceed £75,000.003 (or the equivalent in Euros). The exemption from the requirement to publish a prospectus, set out in section 86(1)(e) of the Financial Services and Markets Act 2000 (as amended), will apply to the Retail Offer.

A separate announcement will be made by the Company regarding the Retail Offer and its terms.

Conditional on Admission taking effect, up to 862,069 Retail Offer Shares will be issued pursuant to the Retail Offer at the Issue Price to raise proceeds of up to £75k (before expenses). The Retail Offer Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares (including the Placing Shares).

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.

Convertible Loan Notes

As part of the Fundraising, in order to provide the necessary immediate funding to complete the Acquisition, the Company has issued €1.97 million in principal amount of Convertible Loan Notes. The Convertible Loan Notes carry nil interest and, subject to passing of the Resolutions at the General Meeting and completion of the Capital Reorganisation, will convert immediately into Convertible Loan Note Shares at the Issue Price (or if for any reason the Placing does not complete, 8.70p per share), with such Convertible Loan Note Shares to be issued, together with the Placing Shares and Retail Offer Shares, on Admission. If the Resolutions are not passed, the Convertible Notes will not be capable of conversion and instead will be repaid on 30 June 2024.

The Convertible Loan Notes have been issued as follows:  

*Cortegrande AG is a company wholly owned by Carlo Centonze, of which he is the sole director.

The issue of Convertible Loan Notes to the participating Directors, their related parties and to Julien Born (who is a director of a subsidiary of the Company) comprise, in aggregate, material related party transactions for the purposes of Disclosure Guidance and Transparency Rule 7.3.  The independent directors, being each of Benjamin Bergo, Karen Brade and Robert van der Kerkhof, none of whom are participating in the Convertible Loan Notes consider those material related party transactions to be fair and reasonable from the perspective of the Company and its Shareholders who are not related parties of the Company. Accordingly, this announcement is made under and in compliance with Disclosure Guidance and Transparency Rule 7.3.8.

Capital Reorganisation

The Issue Price is less than the current nominal value of 30 pence per ordinary share. The Companies Act 2006 (as amended) prohibits public companies from issuing new shares at a price below nominal value.  Accordingly, the Company is seeking shareholder approval to carry out the capital reorganisation through which it is proposed that each Existing Ordinary Share will be subdivided into one new ordinary share of 5 pence ("New Ordinary Shares") and one deferred share of 25 pence (the "Deferred Shares") (the "Capital Reorganisation"). The Deferred Shares will have very limited rights; in particular they do not carry voting rights and will only receive a return on a capital event relating to the Company after every ordinary share has had the sum of £1,000,000 returned on them. It is a condition of issue of the Deferred Shares that the Company will not issue any share certificates or credit CREST accounts in respect of them. The Deferred Shares will not be admitted to trading on the Main Market or any other exchange.

The number of ordinary shares in issue, and held by each Shareholder, as a result of the passing of the resolution to amend the nominal value will not change. It is simply the nominal value of the Existing Ordinary Shares which will change. The New Ordinary Shares will continue to carry the same rights as those attached to the existing ordinary shares, save for the change in nominal value. The ordinary shares will have the same ISIN number and SEDOL code as each Existing Ordinary Share.

APPENDIX

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX AND THE INFORMATION CONTAINED HEREIN (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, NEW ZEALAND, THE REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT HAS NOT BEEN REVIEWED OR APPROVED BY THE FINANCIAL CONDUCT AUTHORITY ("FCA") OR THE LONDON STOCK EXCHANGE, NOR IS IT INTENDED THAT IT WILL BE SO APPROVED.

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 WITHIN THE MEANING OF ARTICLE 2(e) OF REGULATION (EU) 2017/1129, AS AMENDED FROM TIME TO TIME (THE "PROSPECTUS REGULATION") ("QUALIFIED INVESTORS"); AND (B) IN THE UNITED KINGDOM, PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF THE UK PROSPECTUS REGULATION AND WHO ALSO: (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) (INVESTMENT PROFESSIONALS) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (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. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. 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. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN HEIQ PLC.

THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES. THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR 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, OR IN A TRANSACTION NOT SUBJECT TO, 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. SUBJECT TO CERTAIN EXCEPTIONS AND AT THE SOLE DISCRETION OF THE COMPANY, THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES, THE UNITED KINGDOM OR ELSEWHERE. NO MONEY, SECURITIES OR OTHER CONSIDERATION FROM ANY PERSON INSIDE THE UNITED STATES IS BEING SOLICITED AND, IF SENT IN RESPONSE TO THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT, WILL NOT BE ACCEPTED.

EACH PLACEE SHOULD CONSULT WITH ITS ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN THE 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.

THE COMPANY'S BROKER, CAVENDISH CAPITAL MARKETS LIMITED, WHO ARE REGULATED IN THE UNITED KINGDOM BY THE FCA, ARE ACTING FOR THE COMPANY AND NO ONE ELSE IN RELATION TO THE PROPOSALS SET OUT IN THIS ANNOUNCEMENT. CAVENDISH DOES NOT HAVE ANY AUTHORITY TO MAKE ANY REPRESENTATION OR WARRANTY ON BEHALF OF THE COMPANY OR ANY OTHER PERSON IN CONNECTION WITH THE COMPANY OR THE PLACING.

ANY PERSON WHO IS IN ANY DOUBT ABOUT THE INVESTMENT TO WHICH THIS ANNOUNCEMENT RELATES SHOULD CONSULT A PERSON DULY AUTHORISED FOR THE PURPOSES OF FSMA WHO SPECIALISES IN THE ACQUISITION OF SHARES AND OTHER SECURITIES.

The distribution of this Announcement and/or the Placing and/or issue of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, Cavendish 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. Persons into whose possession this Announcement comes are required by the Company and Cavendish to inform themselves about and to observe any such restrictions.

This Announcement or any part of it is for information purposes only and 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, New Zealand, the Republic of Ireland, the 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 UK 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.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States. 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, the Financial Markets Authority of New Zealand or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained from the South African Reserve Bank or any other applicable body in the Republic of Ireland, or the Republic of South Africa in relation to the Placing Shares and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan, New Zealand, the Republic of Ireland 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, New Zealand, the Republic of Ireland 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.

This Announcement should be read in its entirety. In particular, you should read and understand the information provided in this "Important Information" section of this Announcement.

The Company proposes to raise capital by way of, inter alia, the Placing. By participating in the Placing, each Placee will be deemed to have read and understood this Announcement in its entirety, including this Appendix and to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix.

In particular, each such Placee represents, warrants, undertakes, agrees and acknowledges to and with the Company and Cavendish that (amongst other things):

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

2          in the case of a Relevant Person in a Relevant State who acquires any Placing Shares pursuant to the Placing:

(a)        it is a Qualified Investor within the meaning of Article 2(e) of the Prospectus Regulation;

(b)        in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 5(1) of the Prospectus Regulation:

(i)         the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in a Relevant State other than Qualified Investors or in circumstances in which the prior consent of Cavendish has been given to the offer or resale; or

(ii)         where Placing Shares have been acquired by it on behalf of persons in a Relevant State other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Regulation as having been made to such persons;

3          in the case of a Relevant Person in the United Kingdom who acquires any Placing Shares pursuant to the Placing:

(a)        it is a Qualified Investor within the meaning of Article 2(e) of the UK Prospectus Regulation;

(b)        in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 5(1) of the UK Prospectus Regulation:

(i)         the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in the United Kingdom other than Qualified Investors or in circumstances in which the prior consent of Cavendish has been given to the offer or resale; or

(ii)         where Placing Shares have been acquired by it on behalf of persons in the United Kingdom other than Qualified Investors, the offer of those Placing Shares to it is not treated under the UK Prospectus Regulation as having been made to such persons;

4          it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the representations, warranties, indemnities, acknowledgements, undertakings and agreements contained in this Announcement;

5          it understands (or if acting for the account of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in this Appendix; and

6          except as otherwise permitted by the Company and subject to any available exemptions from applicable securities laws, it (and any account referred to above) is outside the United States acquiring the Placing Shares in offshore transactions as defined in and in accordance with Regulation S under the Securities Act.

No prospectus

No prospectus or other offering document has been or will be submitted to be approved by the FCA 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 Publicly Available Information and subject to any further terms set forth in the 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 the Company, Cavendish or any other person and none of the Company, Cavendish or 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. No Placees should consider any information in this Announcement to be legal, tax or business advice. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Details of the Placing Agreement and the Placing Shares

Cavendish has today entered into a Placing Agreement with the Company under which, on the terms and subject to the conditions set out in the Placing Agreement, Cavendish, as agent for and on behalf of the Company, has agreed to use its reasonable endeavours to procure placees for the Placing Shares at the issue price of 8.7 pence per Placing Share.

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 Existing Ordinary Shares after the date of issue of the Placing Shares.

Application for admission to trading

Applications will be made to (i) the FCA for the admission of the New Shares to the standard listing segment of the Official List, and (ii) the London Stock Exchange for admission of those shares to trading on its main market for listed securities.

It is expected that, subject to the passing of the Resolutions, Admission will take place no later than 8.00 a.m. on 14 March 2024 and that dealings in the Placing Shares will commence at the same time.

Principal terms of the Placing

1          Cavendish is acting as broker to the Company in respect of the Placing, as agent for and on behalf of the Company. Cavendish 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 matters referred to in this Announcement and will not be responsible to anyone other than the Company for providing the protections afforded to each of Cavendish's customers or for providing advice in relation to the matters described in this Announcement. 

2          Participation in the Placing will only be available to persons who may lawfully be and are invited by Cavendish to participate. Cavendish and any of its affiliates are entitled to participate in the Placing as principal.

3          The price per Placing Share is 8.7 pence and is payable to Cavendish as agent of the Company by all Placees.

4          Each Placee's allocation is determined by Cavendish following consultation with the Company and has been or will be confirmed orally by Cavendish, as applicable, and a form of confirmation will be dispatched as soon as possible thereafter. That oral confirmation will give rise to an irrevocable, legally binding commitment by that person (who at that point becomes a Placee), in favour of Cavendish and the Company, under which it agrees to acquire the number of Placing Shares allocated to the Placee at the Issue Price and otherwise on the terms and subject to the conditions set out in this Appendix and in accordance with the Articles. Except with the prior written consent of Cavendish, such commitment will not be capable of variation or revocation at the time at which it is submitted.

5          Each Placee's allocation and commitment will be evidenced by a form of confirmation issued to such Placee by Cavendish. The terms and conditions of this Appendix will be deemed incorporated in that form of confirmation.

6          Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to Cavendish as agent for the Company, to pay to it (or as they may direct) in cleared funds an amount equal to the product of the Issue 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.

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

8          All obligations of Cavendish under the Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing".

9          By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

10         To the fullest extent permissible by law and applicable FCA rules, none of (a) Cavendish, (b) any of its affiliates, agents, directors, officers, consultants, (c) to the extent not contained within (a) or (b), any person connected with Cavendish as defined in the FSMA ((b) and (c) being together "affiliates" and individually an "affiliate" of Cavendish), (d) any person acting on behalf of Cavendish, shall have any liability (including to the extent permissible by law, any fiduciary duties) to Placees or to any other person whether acting on behalf of a Placee or otherwise. In particular, neither Cavendish nor any of its affiliates shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of their conduct in relation to the Placing or of such alternative method of effecting the Placing as Cavendish and the Company may agree.

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 Cavendish, as soon as it is able, which will confirm the number of Placing Shares allocated to them, the Issue Price and the aggregate amount owed by them to Cavendish.

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 Cavendish in accordance with either the standing CREST or certificated settlement instructions which they have in place with Cavendish.

Settlement of transactions in the Placing Shares (ISIN: GB00BN2CJ299) following Admission will take place within the CREST system, subject to certain exceptions. Settlement through CREST is expected to take place on 14 March 2024 unless otherwise notified by Cavendish and Admission is expected to occur no later than 8.00 a.m. on 14 March 2024 unless otherwise notified by Cavendish. The deadline for Placees to input instructions into CREST is 4 p.m. on 12 March 2024. Admission and settlement may occur at an earlier date, which if achievable, will be set out in the Circular. 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 Cavendish may agree that the Placing Shares should be issued in certificated form. Cavendish reserves the right to require settlement of the Placing Shares, and to deliver the Placing Shares to Placees, by such other means as it deems 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 SONIA as determined by Cavendish.

Each Placee agrees that if it does not comply with these obligations, Cavendish may sell, charge by way of security (to any funder of Cavendish) or otherwise deal with any or all of their Placing Shares on their behalf and retain from the proceeds, for Cavendish's 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 Cavendish as a result of the Placee's failure to comply with its obligations. The relevant Placee will, however, remain liable 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.

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.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.

Cavendish's obligations under the Placing Agreement are, and the Placing is, conditional upon, inter alia:

1          Admission taking place not later than 8.00 a.m. on 14 March 2024 or such later date as is agreed in writing between the Company and Cavendish, but in any event not later than 8.00 a.m. the Long Stop Date;

2          the Company complying with its obligations under the Placing Agreement to the extent that the same fall to be performed prior to Admission;

3          the General Meeting having taken place, no adjournment of the General Meeting having occurred without the prior written consent of Cavendish and each of the Resolutions having been passed at the General Meeting by the requisite majority without material amendment;

4          satisfaction or, where appropriate, the waiver of certain other conditions set out in the Placing Agreement,

(all conditions to the obligations of Cavendish included in the Placing Agreement being together, the "conditions").

For the avoidance of doubt, the Placing is not conditional on the retail offer (or any take up of the retail offer), details of which will be disclosed in the Circular.

If any of the conditions set out in the Placing Agreement are not fulfilled or, where permitted, waived in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as the Company and Cavendish may agree save that such time shall not extend beyond 8.00 a.m. on the Long Stop Date), or the Placing Agreement is terminated in accordance with its terms, the Placing will lapse and the Placee's rights and obligations shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.

By participating in the Placing, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Termination of the Placing" below and will not be capable of rescission or termination by it after the issue by Cavendish of a form of confirmation confirming each Placee's allocation and commitment in the Placing.

Certain conditions may be waived in whole or in part by Cavendish, in its absolute discretion, and Cavendish may also agree to extend the time for satisfaction of any condition. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

Cavendish may terminate the Placing Agreement in certain circumstances, details of which are set out below.

Neither Cavendish, the Company nor any of their respective affiliates, agents, directors, officers or employees shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision any of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within Cavendish's absolute discretion.

Termination of the Placing

Cavendish may terminate the Placing Agreement, in accordance with its terms, at any time prior to Admission if, inter alia:

1          any of the warranties in the Placing Agreement were, when given, materially untrue, inaccurate, or misleading; or

2          the Company fails or is unable to comply with its obligations under the Placing Agreement in any material respect; or

3          any statement contained in the Placing Documents (as defined in the Placing Agreement) has become or been discovered to be untrue, inaccurate in any material respect or misleading or there has been a material omission therefrom; or

4          a matter, fact, circumstance or event has arisen such that in the opinion of Cavendish (acting in good faith) a supplementary circular and/or supplementary press announcement is required to be published or released; or

5          in the opinion of Cavendish, a Material Adverse Change has occurred since the date of the Placing Agreement.

If the Placing Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in this Announcement shall cease and terminate at such time and no claim can be made by any Placee in respect thereof.

By participating in the Placing, each Placee agrees with the Company and Cavendish that the exercise by the Company or Cavendish of any right of termination or any other right or other discretion under the Placing Agreement shall be within the absolute discretion of the Company and / or Cavendish and that neither the Company nor Cavendish need make any reference to such Placee and that none of the Company, Cavendish nor any of their respective affiliates, agents, directors, officers or employees shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.  

By participating in the Placing, each Placee agrees that its rights and obligations terminate only in the circumstances described above and under the "Conditions of the Placing" section above and will not be capable of rescission or termination by it after the issue by Cavendish of a form of confirmation confirming each Placee's allocation and commitment in the Placing.

Restrictions on issues of shares and other securities by the Company

The Company has undertaken to Cavendish that, during the period commencing on the date of the Placing Agreement and ending 180 days after the date of Admission, it will not without the prior consent of Cavendish allot or issue, or enter into any agreement or arrangement which would give rise to an obligation or an increased obligation (in each case whether contingent or otherwise) to allot or issue, any share or any instrument or security convertible into a share in the capital of the Company (save for the allotment and issue of Placing Shares pursuant to the Placing, the separate retail offer being made by the Company, the conversion of the convertible loan notes, or the issue of shares or the grant and exercise of options pursuant to the option schemes, agreements and arrangements, all as disclosed in the Publicly Available Information or in the Circular (if any)).

By participating in the Placing, each Placee agrees that the exercise by Cavendish of any power to grant consent to the undertaking by the Company of a transaction which would otherwise be subject to these restrictions under the Placing Agreement shall be within the absolute discretion of Cavendish and that it need not make any reference to, or consult with, any Placee and that it shall have no liability to any Placee whatsoever in connection with any such exercise of the power to grant consent.

Representations, warranties and further terms

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) irrevocably represents, warrants, acknowledges, undertakes and agrees (for itself and for any such prospective Placee) that in each case as a fundamental term of such Placee's application for Placing Shares (save where Cavendish expressly agrees in writing to the contrary) that:

1          it has read and understood this Announcement in its entirety and that its acquisition of the Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained herein and that it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Placing, the Company, the Placing Shares or otherwise, other than the information contained in this Announcement and the Publicly Available Information;

2          it has not received a prospectus or other offering document in connection with the Placing and acknowledges that no prospectus or other offering document: (a) is required under the Prospectus Regulation or the UK Prospectus Regulation; and (b) has been or will be prepared in connection with the Placing;

3          the Ordinary Shares are admitted to trading on the London Stock Exchange's main market for listed securities on the standard segment, and that, in addition to complying with its obligations pursuant to MAR, the Company is required to comply with the Listing Rules published by the FCA;

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

5          neither Cavendish nor any person acting on its behalf or any of their respective affiliates, agents, directors, officers or employees has or shall have any liability for any Publicly Available Information, or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

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

7          neither the Company, Cavendish nor any of their respective affiliates, agents, directors, officers or employees has made any representation or warranty to it, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of the Publicly Available Information;

8          it has conducted its own investigation of the Company, the Placing and the Placing Shares, satisfied itself that the information is still current and relied on that investigation for the purposes of its decision to participate in the Placing;

9          it has not relied on any investigation that Cavendish or any person acting on its behalf may have conducted with respect to the Company, the Placing or the Placing Shares;

10         the content of this Announcement and the Publicly Available Information has been prepared by and is exclusively the responsibility of the Company and that neither Cavendish nor any persons acting on its behalf are responsible for or has or shall have any liability for any information, representation, warranty or statement relating to the Company contained in this Announcement or the Publicly Available Information nor will they be liable for any Placee's decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement, the Publicly Available Information or otherwise. Nothing in this Appendix shall exclude any liability of any person for fraudulent misrepresentation;

11         the Placing is not conditional on the retail offer (or any take up of the retail offer) or the subscription, details of which will be disclosed in the Circular;

12         the Placing Shares have not been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale nor will a prospectus be cleared or approved in respect of any of the Placing Shares under the securities laws of the United States, or any state or other jurisdiction of the United States, Australia, Canada, Japan, New Zealand, the Republic of Ireland or the Republic of South Africa and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within the United States, Australia, Canada, Japan, New Zealand, the Republic of Ireland the Republic of South Africa or in any country or jurisdiction where any such action for that purpose is required;

13         it and/or each person on whose behalf it is participating:

(a)        is entitled to acquire Placing Shares pursuant to the Placing under the laws and regulations of all relevant jurisdictions;

(b)        has fully observed such laws and regulations;

(c)        has capacity and authority and is entitled to enter into and perform its obligations as an acquirer of Placing Shares and will honour such obligations; and

(d)        has obtained all necessary consents and authorities (including, without limitation, in the case of a person acting on behalf of a Placee, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix) under those laws or otherwise and complied with all necessary formalities to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto and, in particular, if it is a pension fund or investment company it is aware of and acknowledges that it is required to comply with all applicable laws and regulations with respect to its subscription for Placing Shares;

14         it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are subscribed will not be, a resident of, or with an address in, or subject to the laws of, the United States, Australia, Canada, Japan, New Zealand, the Republic of Ireland or the Republic of South Africa and it acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of the United States, Australia, Canada, Japan, New Zealand, the Republic of Ireland or the Republic of South Africa and may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;

15         the Placing Shares have not been, and will not be, registered under the Securities Act and may not be offered, sold or resold in or into or from the United States except pursuant to an effective registration under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in accordance with applicable state securities laws; and no representation is being made as to the availability of any exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;

16         it and the beneficial owner of the Placing Shares is, and at the time the Placing Shares are acquired will be, outside the United States and acquiring the Placing Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S under the Securities Act;

17         it (and any account for which it is purchasing) is not acquiring the Placing Shares with a view to any offer, sale or distribution thereof within the meaning of the Securities Act;

18         it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it, or any other presentational or other materials concerning the Placing in or into or from the United States (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;

19         neither Cavendish, nor its affiliates, agents, directors, officers or employees nor any person acting on behalf of any of them is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of Cavendish and that Cavendish does not have any duties or responsibilities to it for providing the protections afforded to its clients or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

20         it has the funds available to pay for the Placing Shares for which it has agreed to subscribe and acknowledges and agrees that it will make payment to Cavendish for the Placing Shares allocated to it in accordance with the terms and conditions of this Announcement on the due times and dates set out in this Announcement, failing which the relevant Placing Shares may be placed with others on such terms as Cavendish may, in its absolute discretion determine without liability to the Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this Announcement) which may arise upon the sale of such Placee's Placing Shares on its behalf;

21         no action has been or will be taken by any of the Company, Cavendish or any person acting on their behalf that would, or is intended to, permit a public offer of the Placing Shares in the United States or in any country or jurisdiction where any such action for that purpose is required;

22         the person who it specifies for registration as holder of the Placing Shares will be: (a) the Placee; or (b) a nominee of the Placee, as the case may be. Neither the Company nor Cavendish will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to acquire Placing Shares pursuant to the Placing and agrees to pay the Company and Cavendish in respect of the same (including any interest or penalties) on the basis that the Placing Shares will be allotted to the CREST stock account of Cavendish or transferred to the CREST stock account of Cavendish, whereupon Cavendish will hold them as a nominee on behalf of the Placee until settlement in accordance with its standing settlement instructions with it;

23         it is acting as principal only in respect of the Placing or, if it is acting for any other person, (a) it is duly authorised to do so and has full power to make the acknowledgments, representations and agreements herein on behalf of each such person and (b) it is and will remain liable to the Company and Cavendish for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person);

24         the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a stamp duty or stamp duty reserve tax liability under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depository receipts and clearance services) and that it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability;

25         it will not make an offer to the public of the Placing Shares and it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom or in the EEA prior to the expiry of a period of six months from Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA or within the meaning of the UK Prospectus Regulation, or an offer to the public in any member state of the EEA within the meaning of the Prospectus Regulation;

26         if it is within the United Kingdom, it and any person acting on its behalf (if within the United Kingdom) is a person of a kind described in: (a) Article 19(5) (Investment Professionals) and/or 49(2) (High net worth companies etc.) of the Order, and/or an authorised person as defined in section 31 of FSMA; and (b) a Qualified Investor as defined in Article 2(e) of the UK Prospectus Regulation. If it is within a member state of the EEA, it is a Qualified Investor as defined in Article 2(e) of the Prospectus Regulation. For such purposes, it undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;

27      it has only communicated or caused to be communicated and it will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person and it acknowledges that this Announcement is not being issued by Cavendish as an authorised person under Section 21 of FSMA and therefore is not subject to the same controls applicable to a financial promotion made by an authorised person;

28        it has complied and it will comply with all applicable laws with respect to anything done by it or on its behalf in relation to the Placing Shares (including all relevant provisions of the FSMA in respect of anything done in, from or otherwise involving the United Kingdom);

29         if it is a financial intermediary, as that term is used in Article 5(1) of the UK Prospectus Regulation or the Prospectus Regulation, the Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in the UK or in a Relevant State other than Qualified Investors or in circumstances in which the express prior written consent of Cavendish has been given to the offer or resale;

30       it has neither received nor relied on any confidential price sensitive information about the Company in accepting this invitation to participate in the Placing and is not otherwise in possession of any such information;

31         neither Cavendish nor any of its affiliates, agents, directors, officers or employees or any person acting on behalf of any of them has or shall have any liability for any information, representation or statement contained in this Announcement or for any information previously published by or on behalf of the Company or any other written or oral information made available to or publicly available or filed information or any representation, warranty or undertaking relating to the Company, and will not be liable for its decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement or elsewhere, provided that nothing in this paragraph shall exclude any liability of any person for fraud;

32      neither the Company nor Cavendish, nor any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of the Company, Cavendish or their respective affiliates, agents, directors, officers or employees is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing nor providing advice in relation to the Placing nor in respect of any representations, warranties, acknowledgements, agreements, undertakings, or indemnities contained in the Placing Agreement nor the exercise or performance of Cavendish's rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

33      it acknowledges and accepts that Cavendish may, in accordance with applicable legal and regulatory provisions, engage in transactions in relation to the Placing Shares and/or related instruments for its own account for the purpose of hedging its underwriting exposure or otherwise and, except as required by applicable law or regulation, Cavendish will not make any public disclosure in relation to such transactions;

34         Cavendish and each of its affiliates, each acting as an investor for its or their own account(s), may bid or 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 Cavendish and/or any of its affiliates, acting as an investor for its or their own account(s). Neither the Company nor Cavendish intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so;

35         it is aware of the obligations (i) regarding insider dealing in the Criminal Justice Act 1993 and, MAR and confirms that it has and will continue to comply with those obligations; and (ii)those  arising under the Regulations;

36         in order to ensure compliance with the Regulations, either Cavendish (for itself and as agent on behalf of the Company) or the Company's registrars may, in their absolute discretion, require verification of its identity, or the identity of its ultimate beneficial owners. Pending the provision to Cavendish or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at Cavendish's absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed at either Cavendish's or the Company's registrars', as the case may be, absolute discretion. If within a reasonable time after a request for verification of identity, Cavendish (for itself and as agent on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, Cavendish and/or the Company may, at their absolute discretion, terminate their commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;

37         it acknowledges that its commitment to acquire Placing Shares on the terms set out in this Announcement and in the form of confirmation will continue, notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or Cavendish's conduct of the Placing;

38         it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its affiliates taken as a whole, and the terms of the Placing, including the merits and risks involved;

39         it irrevocably appoints any duly authorised officer of Cavendish as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares for which it agrees to subscribe or purchase upon the terms of this Announcement;

40         the Company, Cavendish and others (including each of their respective affiliates, agents, directors, officers or employees) will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements, which are given to Cavendish, on its behalf and on behalf of the Company and are irrevocable;

41         if it is acquiring the Placing Shares as a fiduciary or agent for one or more investor accounts, it has full power and authority to make, and does make, the foregoing representations, warranties, acknowledgements, agreements and undertakings on behalf of each such accounts;

42         time is of the essence as regards its obligations under this Appendix;

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

44         the Placing Shares will be issued subject to the terms and conditions of this Appendix; and

45         these terms and conditions in this Appendix and all documents into which this Appendix is incorporated by reference or otherwise validly forms a part and/or any agreements entered into pursuant to these terms and conditions and all agreements to acquire Ordinary Shares pursuant to the Placing will be governed by and construed in accordance with English law and it submits to the exclusive jurisdiction of the English courts in relation to any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or Cavendish in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify and hold the Company, Cavendish and each of their respective affiliates, agents, directors, officers and employees harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings given by the Placee (and any person acting on such Placee's behalf) in this Appendix or incurred by the Company, Cavendish or each of their respective affiliates, agents, directors, officers or employees arising from the performance of the Placee's obligations as set out in this Announcement, and further agrees that the provisions of this Appendix shall survive after the completion of the Placing.

The agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the United Kingdom relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct by the Company. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement related to any other dealings in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event, the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax and neither of the Company nor Cavendish shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and they should notify Cavendish accordingly. In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares and each Placee, or the Placee's nominee, in respect of whom (or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such non-United Kingdom stamp, registration, documentary, transfer or similar taxes or duties undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company and Cavendish in the event that either the Company and/or Cavendish has incurred any such liability to such taxes or duties.

The representations, warranties, acknowledgements and undertakings contained in this Appendix are given to Cavendish for itself and on behalf of the Company and are irrevocable.

Each Placee and any person acting on behalf of the Placee acknowledges that Cavendish does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings, acknowledgements, agreements or indemnities in the Placing Agreement.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that Cavendish may (at its absolute discretion) satisfy its obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any connected or associated person to do so.

When a Placee or any person acting on behalf of the Placee is dealing with Cavendish, any money held in an account with Cavendish on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the relevant rules and regulations of the FCA made under FSMA. Each Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence this money will not be segregated from Cavendish's money (as applicable) in accordance with the client money rules and will be held by it under a banking relationship and not as trustee.

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

All times and dates in this Announcement may be subject to amendment.

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.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

The Placing Shares to be issued or sold pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange's main market for listed securities.

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.

DEFINITIONS

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

For further information, please contact:

About HeiQ

HeiQ is a Swiss-based international company that innovates pioneering and differentiating materials in partnership with established global brands. We bridge the academic and commercial worlds to conceive performance-enhancing materials and technologies, working with aligned brands to research, manufacture and bring products to market, aiming for lab to consumer in months. Our goal is to improve the lives of billions by innovating the materials that go into everyday products, making them more hygienic, comfortable, protective, and sustainable.

Our strong IP portfolio positions us as an innovation leader for niche, premium and high-margin products in the textile chemicals, man-made fibers, paints and coatings, antimicrobial plastics, probiotics and household cleaner markets. We have also expanded into healthcare facilities, probiotic cleaning, and hygiene coatings markets to help make hospitals and healthcare environments more hygienic.

We have developed over 200 technologies in partnership with 300 major brands. With a substantial research and development pipeline, including key technology development projects HeiQ AeoniQ, HeiQ ECOS, HeiQ GrapheneX, and HeiQ Synbio, HeiQ aims to deliver shareholder value through sales growth and entry into new lucrative markets through disruptive innovation and M&A.

We have built a strong reputation for ESG & sustainable innovation, having won multiple awards including the Swiss Technology Award twice and the Swiss Environmental Award. Under experienced leadership, we are committed to driving our profit in close connection with people and the planet. For more information, please visit www.heiq.com.