Acquisitions & Placing

RNS Number:1510B
Advance Capital Invest PLC
23 July 2004


23 July 2004


                           Advance Capital Invest plc


                      ACQUISITIONS OF IMAGESOUND LIMITED,
             TTL MUSIC LIMITED AND ROLEC LIMITED FOR #15.1 MILLION

         PLACING OF 15,000,000 PLACING SHARES AT 20P PER SHARE TO RAISE
                                   #3 MILLION

                        
CHANGE OF NAME TO IMAGESOUND PLC

Advance Capital Invest plc ("ACI") today announces the acquisitions of
Imagesound Limited ("Imagesound"), TTL Music Limited ("TTL") and Rolec Limited
("Rolec"); three complementary businesses involved in the supply of licensed
instore music, radio and TV services to the retail and leisure sectors.

Key points:

*The Enlarged Group (to be re-named Imagesound plc) will be one of the
UK's leading suppliers of background music, radio and TV services to the branded
retail & leisure sectors;

*The Enlarged Group will have over 40 major retail and leisure customers,
representing a total of 10,000 subscriber outlets. Customers include Superdrug,
Yates, B&Q, Footlocker, Carphone Warehouse, Halifax, Bhs, McDonald's, TGI
Friday, Holiday Inn, Holmes Place, Pitcher and Piano, Pizza Express, Comet;

*The maximum aggregate consideration for the Acquisitions is #15.1
million, to be satisfied by the issue of 36,900,000 Consideration Shares and the
payment of approximately #7.7 million in cash;

*The cash element of the consideration is to be part satisfied through the
Placing of 15,000,000 Placing Shares at 20 pence per share to raise #3 million
(before expenses). The Placing has been fully underwritten by Evolution Beeson
Gregory. In addition, the Company has also entered into Debt Financing to fund
part of the cash consideration of the Acquisitions. The Company will also
receive #600,000 from the contemporaneous sale of an acquired property and cash
in excess of #1,800,000 acquired within Rolec;

*On the basis of aggregating the financial results of the ongoing
operations of ACI, Imagesound, Rolec and TTL, from the most recent financial
years of each company, the Enlarged Group would have had an illustrative
turnover of #9.7 million, EBITDA of #1.7 million and operating profit of #0.9
million.

*Following the Acquisitions and the Placing, Imagesound plc will have a
market capitalisation of #12 million at the Placing Price.

*Following the implementation of the Proposals, the Directors of the
Enlarged Group will be the existing Directors of Imagesound Limited, being
Richard Gregory as Chairman, Michael Clark as Chief Executive, Lee Bowers as
Finance Director and Derek Mapp as a non-executive Director. All existing
Directors of ACI plc will step down from the Board of ACI plc prior to admission
of the Enlarged Group's shares to trading on AIM on 18 August 2004, with the
exception of Charles Fairbairn, the current Finance Director of ACI plc, who
will remain on the Board of the Enlarged Group as a non-executive Director.

*A circular (encompassing an Admission Document for the purposes of the
AIM rules) has been sent to shareholders today convening an Extraordinary
General Meeting at 10:30am on 16 August 2004, at which shareholders will be
asked to approve the transaction and the change of name of the Company to
Imagesound plc. Further to this, ACI is convening the 2004 Annual General
Meeting to be held immediately prior to the EGM. Copies of the circular are
available at the offices of Evolution Beeson Gregory Limited (9th Floor, 100
Wood Street, London EC2V 7AN).

Michael Clark, proposed CEO of the Enlarged Group, commented:

"This is a very exciting transaction for all involved. By combining the skills,
products and services of our three businesses we are creating one of the UK's
leading in-store music and messaging business, with a high quality customer base
that reads like a who's who of the branded retail and leisure sectors. It also
creates an exciting platform for growth, both organic and through further
consolidation, in what remains a highly fragmented sector."

Richard Gregory, proposed Chairman of the Enlarged Group, said:

"While instore music has been around in various forms for several decades, the
provision of bespoke music and messaging services, in particular TV, is in its
relative infancy. This presents Imagesound with a very exciting media
opportunity. We are grateful to ACI and its Directors, and in particular Charles
Fairbairn, for their support and assistance in bringing these three businesses
together and providing the platform from which to gain a listing for our
shares."

Nigel Whittaker, current Chairman of ACI plc, commented:

"We have looked at a great number of potential acquisition opportunities since
the formation of ACI in 2000 and believe that the creation of Imagesound plc
represents an exciting opportunity for existing and new shareholders. We are
delighted to have been able to act as a catalyst to achieve this deal and
believe that the Enlarged Group has the potential for delivering attractive
shareholder returns."

For further information please contact:

Advance Capital Invest plc 020 7357 9477
Nigel Whittaker, Chairman

Imagesound 01246 572 990
Michael Clark, Chief Executive

Evolution Beeson Gregory 020 7071 4300
Chris Callaway / Henry Turcan

Hogarth Partnership 020 7357 9477
James Longfield / Georgina Briscoe

Terms defined in the Admission Document have the same meanings in this
announcement.


                           


                            Advance Capital Invest plc

     Acquisition of Imagesound Limited, TTL Music Limited and Rolec Limited
             Placing of 15,000,000 Placing Shares at 20p per share
                        Change of name to Imagesound plc
        Unaudited Interim Results for the six months ended 30 April 2004
                        Notice of Annual General Meeting
                                      and
                    Notice of Extraordinary General Meeting


Introduction

Your Board announced today that the Company has agreed to acquire, subject,
inter alia, to Shareholder approval, the entire issued share capital of each of
Imagesound, TTL and Rolec. The aggregate consideration for the Acquisitions is
approximately #15.1 million, to be satisfied by the issue of 36,900,000
Consideration Shares and payment of approximately #7.7 million. In addition, the
Company announced today that it is raising #3.0 million (#2.0 million net of
expenses) by way of the Placing of 15,000,000 Placing Shares at 20 pence per
Ordinary Share in order to finance part of the cash consideration under the
Acquisitions. The Placing has been fully underwritten by Evolution Beeson
Gregory. In addition, the Company has also entered into the Debt Financing to
fund part of the cash consideration for the Acquisitions. The Company will also
receive #600,000 from the contemporaneous sale of an acquired property and cash
in excess of #1,800,000 acquired within Rolec.

The Directors believe that, due to the size of the proposed fundraising when
compared to the Company's market capitalisation and the current lack of
institutional Shareholders, it is necessary to disapply pre-emption rights to
enable new investors to participate in the fundraising.

The Acquisitions are classified as a "reverse takeover" under the AIM Rules by
virtue of the size of the transactions. As such they are subject to the approval
of Shareholders which is to be sought at the Extraordinary General Meeting.



Background to and reasons for the Acquisitions

The Company's Ordinary Shares were admitted to AIM in November 2000. The
Company, which has not traded since admission to AIM, was established as an
acquisition vehicle and as at 30 April 2004 had net cash of approximately #1.32
million.

Since November 2000, the Existing Directors have considered a number of
acquisition opportunities across a number of business sectors. The Board
commenced discussions with Imagesound in October 2003 and was able to develop a
good understanding of the in-store music and messaging market. The Existing
Directors recognised the opportunity for ACI to issue its publicly traded shares
to pursue a consolidation strategy within the sector.

Principally this has focused on the acquisition of Imagesound, which has
invested considerable time, effort and financial resources in developing a head
office, accounting systems, management processes and infrastructure suitable to
support mergers with corporate entities within the same sector.

Following successful negotiations with Imagesound, the Existing Directors began
discussions, at Imagesound's suggestion, with TTL and Rolec, initially on a
confidential basis in which Imagesound did not participate, with the objective
of forming the Enlarged Group to exploit the opportunities within the retail
in-store music and messaging market.

The Directors believe that the Acquisitions represent an opportunity for
Shareholders to participate in an enlarged group which benefits from ACI's
initial cash balances and its access to the equity market and has the potential
for delivering attractive shareholder returns.



Market Opportunity

In-store music, radio and TV provides branded retail and leisure sites with the
opportunity to control their audio and visual environment and increase customer
comfort and brand association. It also provides retailers, leisure groups,
suppliers and advertisers with the opportunity to communicate directly with
consumers at the point of purchase.

Research has shown that the presence of appropriately profiled music can
increase the amount of time a customer remains within a retail and leisure
environment and can increase the amount of spending by a customer. Alongside
profiled music, the insertion of customer service and promotional audio messages
has also grown in popularity as retailers, leisure groups, suppliers and
advertisers are increasingly looking to influence consumer spend at the point of
purchase. This has been further enhanced by the use of flat screen TVs showing
visual media in store.

The value of this media opportunity has been increased over the past decade by
the proliferation of multi-channel broadcasting which has diminished the ability
of the major commercial TV and radio stations individually to deliver mass
audiences to the advertising agencies and has created demand for new targeted
advertising opportunities.

On the basis of published information, the New Board estimates the size of the
expanding UK retail and leisure 'branded sector' market, which will be the
Enlarged Group's core target market, to be approximately 200,000 outlets. Of
these outlets, the Proposed Directors estimate that less than one quarter are
currently serviced by a licensed background music and messaging provider.

The Enlarged Group on Completion, will provide a mix of music and messaging
services to over 10,000 subscriber retail and leisure outlets. The New Board
estimates that this would position the Enlarged Group as one of the leading
licensed suppliers of background music, audio-visual and messaging services in
the UK. The New Board believes that the Enlarged Group's share of the target
market can be increased through further market penetration, incremental growth
from the existing client base and further consolidation of a disparate sector.



The Acquisitions

Imagesound Limited

Imagesound's business

Imagesound commenced trading in 1998 and provides background music and messaging
services, almost exclusively to branded retail and leisure outlets. It offers
client specific, profiled music content promoting brand enhancement and/or
product promotion at the point of sale. Imagesound currently provides background
music and messaging services to over 6,500 retail and leisure outlets,
predominantly in the UK and continental Europe. Its customers currently include
more than 30 major retail chains including Superdrug, B&Q, JJB Sports, Peacocks,
Wilkinsons, Carphone Warehouse, McDonald's, Rosebys, Halifax, Kwik Save, BHS and
Focus.

Imagesound's music service allows customers to utilise Imagesound's in-house
database of digitized music tracks so as to create customer specific playlists
which can reflect client trading patterns and customer demographics. Imagesound
continuously adds new music tracks to its database, often well in advance of
their release to the public, allowing client music profiles to be updated on a
timely and regular basis.

Imagesound's messaging service allows customers to add audio or visual messaging
to their specified music profile. This enables a customer to communicate product
promotions, service messages and branded jingles creating the effect of a
customised radio or TV station. Imagesound provides this service through
proprietary mixing software that allows audio and visual tracks to be merged. A
key feature of the software is its ability to enable a client with multiple
outlets to choose to target each message at an individual site, grouped sites or
their entire estate of outlets. This allows branded retail and leisure chains
the ability to have a mix of promotions at multiple levels, so as to meet the
product mix of each individual outlet, for example, to enable a mix of national,
regional and outlet specific promotions.

Imagesound is able to deliver its music and messaging services to each outlet
through a variety of delivery channels, however its principal delivery method is
via a high speed digital satellite channels platform. Some of these channels are
capable of streaming multiple music channels and downloading audio and visual
content for local storage and playback or realtime broadcast. Imagesound can
therefore provide its customers, in a cost effective and timely manner,
consistent brand enhancement across hundreds of stores together with the
tactical flexibility to target individual outlets or groups of outlets in line
with retail demands.

Bespoke content is uploaded into the proprietary receiver/playback equipment
through the selected delivery method, which Imagesound's clients are required to
purchase or rent. The equipment then plays the content in accordance with the
individual outlet playlist as determined by the client's music and media profile
for that outlet.

This combination of central client control and content delivery flexibility
cannot be matched by traditional methods of music supply, such as through tape,
CD or a single satellite channel and provides, in the opinion of the New Board,
a key competitive advantage.

The music and messaging service is typically invoiced on a quarterly basis with
the recurring subscription paid in advance, with a typical client contract
having an average initial term of three years. This enables minimum anticipated
recurring revenues to be estimated for a number of years in advance.

The installation and maintenance of enhanced ancillary audio and audio-visual
hardware is an important part of Imagesound's business. In addition, Imagesound
is typically able to secure high margin additional revenues from the provision
of creative content, such as voice-over recording, jingle packages and graphics.

Imagesound achieved turnover of #3.9 million for the year ended 31 December
2003, of which #2.6 million was for music, creative and messaging services and
#1.3 million was for the installation and maintenance of enhanced ancillary
audio and audio-visual hardware. As at 31 December 2003, Imagesound had net
assets of #1.39 million.

The terms of the Imagesound Acquisition Agreement

The consideration for Imagesound will comprise the issue of 31,900,000
Consideration Shares. The Consideration Shares are largely subject to
restrictions on their disposal for a period of 24 months from Admission.

The agreement is conditional on, amongst other things, the business of the
company being run in accordance with a set of covenants given by certain current
directors of Imagesound, the Placing Agreement becoming unconditional in all
respects, including Admission, and contains warranties by the relevant Vendors,
Vendor protection provisions and restrictive covenants.



Rolec Limited

Rolec's Business

Established in 1991, Rolec provides music hardware and profiled music to a range
of leisure brands, including TGI Friday, O'Neills, Walkabout, Tiger Tiger,
Holiday Inn, Radisson, Fitness First and Holmes Place.

Rolec supplies music and video systems to approved installation companies across
the UK. In the Republic of Ireland the equipment is supplied to a distributor
who in turn supplies local installation companies. Rolec offers customers a
range of proprietary, hard disc based music systems that allow the storage and
playback of digitised music and video. These music hardware systems are
particularly suited to leisure outlets as they give customers the ability to
build playlists and other music profiles on-site, as required. Currently, Rolec
provides three key types of music hardware systems; these are background music
players, front of house music systems and front of house music video systems.

Following the installation of Rolec's music hardware services, Rolec then
provides directly to end users a monthly music profile update. This service is
subscribed for by each individual outlet and is paid for annually in advance.
Rolec currently has achieved some 2,000 subscribers from a broad range of
leisure operators without the requirement for a large sales force or extensive
marketing campaigns.

For the year ended 31 December 2003 Rolec achieved turnover of approximately
#1.5 million, of which approximately 38 per cent. was through sales of hardware
systems and 62 per cent. through the provision of music profiles. As at 31
December 2003, Rolec had net assets of #1.0 million.

The terms of the Rolec Acquisition Agreement

The consideration for Rolec will comprise the payment of approximately #5.0
million, subject to pre-completion adjustments; #1.17 million of which is the
principal element of the Deferred Consideration which is not payable until 18
February 2004. It is intended that payment of the Deferred Consideration will be
secured by a bank guarantee.

The agreement is conditional on, inter alia, the Placing Agreement becoming
unconditional in all respects, including Admission, and contains representations
and warranties by the relevant Vendor. The agreement also contains a covenant by
the Vendor that pending Completion a cash book amount of not less than
#1,800,000 will be maintained at all times.



TTL Music Limited

Established in 1983, TTL is an established music and equipment supplier focused
on the design, installation and maintenance of large scale audio and
audio-visual systems in the venue bar sector. The company has developed a
skilled and experienced team of designers, project managers and installation
engineers capable of handling multiple installation projects. The value of TTL's
projects ranges up to approximately #200,000.

The company has developed specialist audio-visual management software and
hardware capable of controlling many aspects of the venue bar environment.
Functionality includes the provision of pre-profiled music, full DJ interactive
mixing options, beat coordinated lighting effects and zoned content and volume
controls. The TTL system is a service capable of being remotely updated and
managed via ADSL or a similar digital network link.

Clients subscribe for audio, and where applicable video content, which is
typically updated monthly. This content will be pre-profiled, but depending on
the particular configuration there can be varying degrees of flexibility as to
utilisation of the content at the client's sites. TTL also has in-house
capability for the production of jingles and promotional materials, in audio or
audio-visual form, for clients.

TTL currently provides the screens, playback units and content to around 100
Yates' venue bars. Yates' TV service features profiled pop videos together with
supplier advertisements and Yates branding and promotions.

Other clients with over 400 sites between them have computerised systems for
audio music. A number of these, including Pitcher and Piano, Ha Ha Bars, Odeon
and Centre Parcs, are at various stages of implementing TTL's audio-visual
systems.

TTL also has a core of some 1,000 retail outlets which subscribe to tape or CD
type music profile services. These include Bewise, Hobbs and Pilot. The New
Board believes that this represents an opportunity for the Enlarged Group to
convert these clients to higher value products from its extended range of
services over time.

For the year ended 29 February 2004, TTL achieved turnover of #4.3 million of
which approximately 85 per cent. was from equipment supply and 15 per cent. from
music supply. During this period Yates accounted for 65.8 per cent. of TTL's
turnover reflecting the extensive refurbishment programme undertaken by Yates.
For the purposes of TTL's internal forecast, the Proposed Directors have assumed
that a lesser proportion of TTL's revenue in 2005 will be derived from Yates as
the Yates refurbishment programme nears completion. As at 29 February 2004, TTL
had net assets of #0.13 million.

The terms of the TTL Acquisition Agreement

The consideration for TTL will comprise the issue of 5,000,000 Consideration
Shares and the payment of #2,700,000. The TTL Vendors have agreed, subject to
certain exceptions, to a lock-in for a 12 month period following Completion
restricting the disposal of the shares they receive as consideration and
requiring any disposals made in the subsequent 12 months to be effected by means
of a disposal brokered through Evolution Beeson Gregory.

At Completion, the Enlarged Group will sell the TTL premises to the TTL Vendors
for a price of #600,000 (which has been independently valued) and will enter
into a lease entitling the Enlarged Group to occupy the property for no
consideration until 24 December 2004.

The agreement is conditional on, inter alia, the Placing Agreement becoming
unconditional in all respects, including Admission, and contains representations
and warranties by the relevant Vendors.

Financing of the Acquisitions

The aggregate consideration for the Acquisitions is approximately #15.1 million,
which is to be satisfied as follows:

   * existing funds of the Company together with the proceeds from the
    contemporaneous sale of an acquired property and the cash acquired within
    Rolec

   * the issue of 36,900,000 Consideration Shares, based on a placing price
    of 20 pence

   * proceeds from the issue of 15,000,000 Placing Shares, of approximately
    #2.0 million (net of expenses)

   * Debt Financing of #2.0 million to be provided by NatWest

It is intended that the balance of any funds raised and/or headroom under the
Debt Financing will be used as required for the Enlarged Group's working
capital.



Key strengths of the Enlarged Group

The New Board considers that the following are the Enlarged Group's key
strengths:

   * strong, contracted, subscriber-based revenue from an extensive range of
    leading retail clients;

   * successful and established products targeted at expanding market
    sectors;

   * diversification across a range of sectors and a wide product range;

   * a large digital music and creative content asset base available for
    future exploitation;

   * growth opportunities from an existing diversified client base;

   * the ability to achieve higher operating margins through potential cost
    savings and synergies following the Acquisitions;

   * the ability to generate strong free cashflow for future investment;

   * the ability to make further acquisitions within the fragmented
    background music market; and

   * enhanced credibility with large retail chains due to the size of the
    Enlarged Group.

Following Completion, the Enlarged Group will be able to utilise the key
strengths of each of Imagesound, TTL and Rolec to maximise growth opportunities.



Business strategy of the Enlarged Group

The strategy of the Enlarged Group will be to utilise fully each of Imagesound,
Rolec and TTL's operating strengths and build on the opportunities and benefits
which combining the businesses into a single group can provide. The New Board
have identified the following as the key strategies:

   * continuation of growth in recurring revenue streams from the hire of
    music and messaging services so as to achieve high levels of revenue
    predictability for the Enlarged Group in the future;

   * maintenance and expansion of the diversified client base and the broad
    range of revenue streams which each company currently has. The Enlarged
    Group intends to target a wide range of potential customers, utilising TTL
    and Rolec's experience of providing services to the leisure sector and
    Imagesound's experience in providing services to the retail sector. Further
    to this, where possible, the Enlarged Group will seek to develop
    cross-selling opportunities utilising the skill base of each individual
    company;

   * achieving an increase in revenues from the existing client base. The New
    Board recognises the potential to increase revenues from existing clients
    over time, both by service enhancements and also as customers increase, and/
    or refurbish their existing, outlets;

   * exploitation of the growth in the background music and messaging market.
    The New Board recognises the high levels of growth within the music and
    messaging market as retailers, suppliers and advertisers increasingly look
    to communicate directly with consumers at the point of sale;

   * taking advantage of new technology and the resultant revenue
    opportunities. As unit prices of visual media equipment continue to fall,
    increasing numbers of retail and leisure outlets are installing flat screen
    technology. The New Board believes the control and provision of suitable
    profiled and branded audio-visual content for this equipment will provide an
    increasing number of higher value opportunities for the Enlarged Group; and

   * targeting further business acquisitions. The New Board believes the
    Enlarged Group will be well placed to acquire smaller companies, so as to
    increase revenue with a minimal increase in fixed cost, and thereby lead
    further consolidation in the fragmented UK background music sector.


Premises

Imagesound currently operates and broadcasts from a freehold site in
Chesterfield with a building which covers approximately 10,000 sq feet. There is
sufficient spare capacity in the building to permit substantial expansion in the
workforce.

Currently TTL and Rolec operate from near Nottingham and in London respectively.
The Enlarged Group Board intends to review the operational locations of the
Enlarged Group following Admission, with the intention of achieving both
operational and financial benefits.


Current trading and prospects

Imagesound continues to see strong growth in both the number of client sites and
average revenue per site. Imagesound is currently rolling out two new radio
services, one to some 600 Halifax branches and the other to some 200 Bank of
Scotland branches.

TTL continues to trade broadly in line with historical turnover levels,
supported by the extensive refurbishment programme undertaken by Yates. For the
purposes of TTL's internal forecast however, the Proposed Directors have assumed
lower TTL revenue will be derived from Yates as the Yates refurbishment
programme nears completion.

Rolec's sales are showing strong growth and Rolec is continuing to expand its
number of sites in the leisure sector. The new Rolec music video offer has had
favourable responses from selected clients and a full video jockey add-on is
expected to be launched by the end of 2004.

The Proposed Board is confident that, following Completion, the Enlarged Group
will be cash flow positive and continue to grow. Currently, the Targets have
approximately ten key pilot projects underway, a key indicator of future
prospects and this, together with the expected cost savings which are expected
to result from the Acquisitions, leads the New Board to view the financial
prospects of the Enlarged Group with confidence.


Competitors

The New Board believes that, following the Acquisitions, the two largest
companies within the UK sector of profiled music suppliers will be the Company
and DMX Music Limited ("DMX"). DMX is owned by USA based media giant Liberty
Media and operates on a pan-European basis.

Other smaller broadcasting based competitors include Immedia Broadcasting plc
and Team Talk however these companies focus more towards direct advertising
media sales. The New Board considers that the remainder of the UK sector
consists of niche operators offering similar products and technologies but on a
smaller scale.


Financial effects of the proposals

The successful integration and consolidation of Imagesound, TTL and Rolec within
ACI forms a key part of the future prospects of the Enlarged Group. On the basis
of aggregating the financial results of the ongoing operations of ACI,
Imagesound, Rolec and TTL from the most recent financial years, the Enlarged
Group would have had illustrative turnover of #9.7 million, EBITDA of #1.7
million and operating profit of #0.9 million. These figures have been prepared
for illustrative purposes only and no account has been taken of the different
year ends of the respective companies, nor of the amortisation of goodwill which
arises on Completion of the Acquisitions. It is emphasised that the illustrative
figures do not relate to a statutory reporting entity and do not constitute a
forecast of future performance.

The New Board expects to be able to implement cost savings throughout the Group.
Principally this will be through increased purchasing power, logistical
resources and rationalisation between the companies. Furthermore it is the New
Board's intention due to the geographic proximity of, and operational fit
between, TTL and Imagesound to operate both companies from a single location
within an estimated six months following Admission. This should yield
considerable synergy savings from reduced property and proprietor/management
cost.


Dealings and trading

Application will be made by the Company for the New Ordinary Shares to be
admitted to AIM and the Existing Ordinary Shares to be re-admitted to AIM on
completion of the Proposals. Subject to completion of the Proposals, trading in
such New Ordinary Shares is expected to commence on 18 August 2004.

If the Proposals are not completed, the Existing Ordinary Shares will continue
to be traded on AIM, the Acquisitions and Placing will not take place, the New
Ordinary Shares will not be admitted to AIM, the New Scheme will not be adopted,
the Proposed Directors will not join the Board and Nigel Whittaker and Geoff
Westmore will remain on the Board. Whether or not the other Proposals are
implemented, the new Articles will be adopted and the name will be changed if
the First Resolution is passed. If Admission does not subsequently take place, a
further resolution will be put to Shareholders to change the name.


The Directors of the Enlarged Group

Details of the Board of the Enlarged Group following implementation of the
Proposals are set out below:


Executive directors

The executive directors will comprise:

Michael Clark, Chief Executive Officer, Aged 47
Michael is the founder of and a major shareholder of Imagesound. After two years
as a teacher, Michael gained five years' experience of corporate sales with
Yorkshire Bank Finance and sales management with Ford Motor Company. Following
this, in 1989 Michael joined Access Music which was later sold to a US based
company, AEI Music Network, in 1993. After completing an MBA, Michael joined TTL
Music Services in 1996, from which he organised an MBO, acquiring the UK
distribution rights for the Muzak Satellite Service and then started Imagesound
in 1998.


Lee Bowers FCCA, Finance Director, Aged 33
Lee joined Imagesound as Finance Director in October 2000 after gaining
experience in senior financial positions for various major companies.

After a short spell in accounting practice, Lee joined the public house chain,
Tom Cobleigh Ltd shortly after its inception in 1992. Lee qualified as a
Chartered Certified Accountant in 1993 and rose to Chief Accountant, playing an
instrumental role during the company's growth, main market flotation and the
subsequent sale to the Rank Group.

Thereafter, Lee has worked for Bass Leisure Machine Services Limited as
Financial Services Manager, aiding a venture capital backed management buy-out
and at Thorntons plc as Retail Business Analyst.



Non-executive directors

The non-executive directors will comprise:

Richard Gregory OBE, Non-Executive Chairman, Aged 49
Richard became chairman of Imagesound in 2002. After 20 years in executive
positions in ITV, covering programming, production and broadcasting and rising
to Managing Director of Yorkshire Television Limited, Richard now focuses on a
portfolio of private and public sector directorships and consultancies. Richard
is currently a non-executive director and a member of the audit committee of
National Australia Group Europe Limited, and also a non-executive director of
two of their UK bank boards, the Yorkshire and Clydesdale Bank. Richard is also
a member of the European audit committee and chair of Yorkshire Bank Pension
Trust. He became Deputy Chairman of Yorkshire Forward, the regional development
agency, upon its formation and is also a director of Business in the Community
Ltd and a council member of the Institute for Employment Studies. Formerly
Richard has been Chairman of Sheffield Hallam University.


Charles Fairbairn, Non-Executive Director, Aged 42
Charles has been the Finance Director of the Company since 2000. He has many
years' experience in the media sector and in growing entrepreneurial companies.
At Pearson plc he worked as Finance Director of Pearson New Entertainment, a
start-up division with interests in computer and music publishing and as Group
Chief Accountant.

Pearson New Entertainment was sold in 1998 to Apax Partners for #142 million.
Since then he has provided advice to small and growing companies. He is also a
non-executive director of Statpro Group plc and Bright Things plc, both
AIM-traded companies.


Derek Mapp, Non-Executive Director, Aged 54
Derek has been a non-executive director and major shareholder of Imagesound
since its inception. He is the former Chief Executive of Leapfrog Day Nurseries
and was a non-executive director of Taylor & Francis Group plc until recently
and also has directorships of a number of privately owned companies. Chairing
the East Midlands Development Agency since 1998, Derek also holds a number of
positions on Government working groups and agencies.

Previously after a number of management positions in the brewing industry, Derek
founded Tom Cobleigh Limited which floated on the London Stock Exchange in 1995
and was subsequently acquired by Rank Group plc in 1996.

The New Board recognises the increasingly important role undertaken by
non-executive directors and it is their intention to appoint an additional
independent non-executive director as soon as is reasonably practicable.



Retiring Directors

At the AGM, David Laurie and Richard Joseph will retire as Directors in
accordance with the rotation provisions of the Articles of Association. In the
light of the proposed implementation of the Proposals and the appointment of the
Proposed Directors, they are not submitting themselves for re-election. In
addition, Nigel Whittaker and Geoff Westmore will resign from the Board
immediately prior to Admission.

The proposed executive directors have entered into service contracts with the
Company, details of which are as follows:

Michael Clark has entered into a service contract conditional on Admission with
the Company dated 22 July 2004, at an annual salary of #120,000. He will be
entitled to a bonus of up to 50 per cent. of his salary calculated at a rate of
#4,000 for every 1 per cent. by which the full year profit exceeds 95 per cent.
of the budgeted profit is exceeded. This will be pro rated for the period from
Admission to 31 December 2004. The contract may be terminated by 12 months'
notice. He is entitled to a one-off bonus of #50,000 from Imagesound upon
Completion.

Lee Bowers has entered into a service contract conditional on Admission dated 22
July 2004 with the Company at an annual salary of #75,000. He will be entitled
to a bonus of up to 30 per cent. of his salary calculated at a rate of #1,875
for every 1 per cent. by which the full year profit exceeds 95 per cent. of the
budgeted profit. This will be pro rated for the period from Admission to 31
December 2004. The contract may be terminated by 12 months' notice. He is
entitled to a one-off bonus of #30,000 from Imagesound upon Completion.


Change of accounting year end

Following completion of the Proposals, Imagesound will be the principal business
within the Enlarged Group. In order to reflect this, the Company intends to
change its accounting year end to coincide with that of its main subsidiary. As
such, the Company's current financial year will be extended so that it will
report its results for the fourteen months ended 31 December 2004.

On 24 June 2004, H. W. Fisher & Company resigned as auditors and KPMG Audit Plc
were appointed.


Dividend policy

The New Board does not propose that the Enlarged Group will pay a dividend in
respect of the current financial year nor does it have the distributable
reserves to do so. However, the Proposed Directors intend that the Company
should pay dividends in the short to medium term. The timing of any dividend and
the amount thereof will depend upon the Enlarged Group's financial results and
condition, its cash requirements, future prospects, profits legally available
for distribution and other factors deemed by the Enlarged Group to be relevant
at the time.


Lock-in arrangements

Under the terms of the Placing Agreement, each of the Existing Directors and
Proposed Directors have agreed, subject to certain exceptions, not to dispose of
any of the shareholdings (or interests therein) in the Company held by or on
behalf of that Director at the date of Admission for a period of one year from
the date of Admission without the prior written consent of Evolution Beeson
Gregory. They have all agreed that between the first and second anniversary of
Admission that, subject to certain exceptions, they may not dispose of more than
25 per cent. of such shareholding over any rolling three month period other than
by means of a disposal brokered through Evolution Beeson Gregory and only after
an agreed period of notice and consultation with Evolution Beeson Gregory.

Each of the remaining Vendors of Imagesound who are not Proposed Directors have
agreed pursuant to lock-in agreements that, subject to certain exceptions, they
will not dispose of their Consideration Shares (or any interest in them) for a
period of six months from the date of Admission without the prior written
consent of Evolution Beeson Gregory.

They have also agreed that during the period between six months and two years
following Admission that they will only dispose of shares by means of a disposal
brokered through Evolution Beeson Gregory and only after an agreed period of
notice and consultation with Evolution Beeson Gregory.

Each of the Vendors of TTL have agreed pursuant to lock-in agreements that,
subject to certain exceptions, they will not dispose of their Consideration
Shares (or any interest in them) for a period of 12 months from the date of
Admission without the prior written consent of Evolution Beeson Gregory. They
have also agreed that during the period between the first and second anniversary
of Admission that they will only dispose of shares by means of a disposal
brokered through Evolution Beeson Gregory and only after an agreed period of
notice and consultation with Evolution Beeson Gregory.


Change of name

To reflect the new business of the Enlarged Group, it is proposed that the
Company change its name to Imagesound plc and this change will take place if the
First Resolution is passed. If Admission does not subsequently take place a
further resolution will be put to Shareholders to change the name.


Details of the Placing

The Company proposes to raise approximately #3 million (before expenses) by the
issue of 15,000,000 Placing Shares at 20p per share.The Placing has been fully
underwritten by Evolution Beeson Gregory. The Placing Shares will, when issued
and fully paid, rank pari passu in all respects with the Existing Ordinary
Shares and the Consideration Shares.


Annual General Meeting and Extraordinary General Meeting

The 2004 Annual General Meeting of the Company will be held at 10.30 a.m. on 16
August 2004 at the offices of Norton Rose, immediately prior to the EGM which
will be held at 11.00 a.m..


                                     -Ends-


For further information please contact:

Advance Capital Invest plc 020 7357 9477
Nigel Whittaker, Chairman

Imagesound 01246 572 990
Michael Clark, Chief Executive

Evolution Beeson Gregory 020 7071 4300
Chris Callaway / Henry Turcan

Hogarth Partnership 020 7357 9477
James Longfield / Georgina Briscoe


                      This information is provided by RNS
            The company news service from the London Stock Exchange

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