Proposed Acquisition of American Leak Detection

 

TIDMQTI 
 
RNS Number : 9429O 
Qonnectis plc 
07 July 2010 
 
AIM: QTI 
                                  7 July 2010 
 
 
                                  Qonnectis Plc 
                         ("Qonnectis" or the "Company") 
 
         Proposed acquisition of American Leak Detection Holding Corp., 
Capital Reorganisation, Open Offer of up to 1,332,946 New Ordinary Shares at 75 
  pence per share, Proposed change of name to Water Intelligence plc, Notice of 
 General Meeting and Admission of the Enlarged Share Capital to trading on AIM 
 
 
Highlights 
 
·      Proposed reverse takeover by American Leak Detection Inc. ("ALD") 
 
·      Open Offer to raise up to GBP1 million before expenses with 
sub-underwriting commitments amounting to GBP657,000 
 
·      ALD focuses on the accurate, non-destructive detection of all types of 
leaks including hidden water and sewer leaks, together with repair and other 
related services 
 
·      ALD operates through 114 franchises operating multi service vehicles 
established in the US and additional 15 franchises outside the US (2009 total 
revenue c.$5.5 million) 
 
·      Net proceeds of Open Offer to be used to establish UK operation, maximise 
ALD's franchise and corporate run opportunities and drive product innovation 
 
·      Combined entity to be renamed "Water Intelligence plc" 
 
·      Trading on AIM restored, AIM Admission Document posted to Shareholders 
today 
 
Patrick DeSouza, Chairman, American Leak Detection and Proposed Chairman of the 
Enlarged Group said: 
 
"As a leading brand in non-invasive water leak detection services, American Leak 
Detection is excited about this strategic opportunity.  It will allow us to 
capitalise on our international strategy in the significant water management 
market.  With the ability to distribute current and future Qonnectis products 
through our system, we seek to become a "one-stop-shop" solutions provider - 
providing customers with alerts as to the possibility of water leaks and then 
non-invasively locating and remediating those leaks.  We are very proud of our 
existing franchisees and hope and believe that this opportunity will help and 
benefit them and our shareholders as we aim to grow and expand throughout the UK 
and the EU." 
 
Harry Offer, Chairman, Qonnectis said: 
 
"This combination puts the Company on a sound footing.  We can explore a number 
of attractive opportunities which the market offers.  We hope to offer our 
customers such as Thames Water and Scottish Water the benefits of the leak 
detection/remediation services that we can now bring to the UK. 
 
"I would like to thank the Qonnectis team, including Interim CEO Barbara 
Spurrier, and all our advisers for helping us conclude this transaction." 
 
FURTHER ENQUIRIES: 
 
+----------------------------------------------+---------------------+ 
| Qonnectis plc                                |                     | 
+----------------------------------------------+---------------------+ 
| Harry Offer, Non-executive Chairman          |  Tel: [phone] | 
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|                                              |                     | 
+----------------------------------------------+---------------------+ 
| American Leak Detection Inc.                 |                     | 
+----------------------------------------------+---------------------+ 
| Patrick DeSouza, Chairman                    |     Tel: [phone] | 
|                                              |                5426 | 
+----------------------------------------------+---------------------+ 
|                                              |                     | 
+----------------------------------------------+---------------------+ 
| Merchant John East Securities Limited        |                     | 
+----------------------------------------------+---------------------+ 
| Bidhi Bhoma/David Worlidge                   |  Tel: [phone] | 
+----------------------------------------------+---------------------+ 
 
 
Introduction 
On 11 January 2010, the Company announced that it had reached agreement, subject 
to contract and shareholder and regulatory approval, for the proposed 
acquisition of American Leak Detection, Inc., and that it had raised GBP395,000 
to provide immediate working capital and in anticipation of the proposed 
acquisition. The fundraising was effected by the issue of the Loan Notes and the 
issue of 100,000,000 Existing Ordinary Shares at par. Due to the announcement of 
the identification of a potential acquisition, which would result in a reverse 
takeover under the AIM Rules, trading in the Company's shares has remained 
suspended since that time. 
 
The Company announces that its wholly owned subsidiary, Qonnectis Acquisition 
Co., has entered into the Acquisition Agreements conditional, amongst other 
things, on Admission, to acquire 91.57 per cent. of the issued share capital of 
ALDHC, which owns the entire issued share capital of ALD.  In the event that the 
Acquisition Agreement is completed, Qonnectis Acquisition Co. may elect to enter 
into the Merger under the law of the State of Delaware which would result in the 
compulsory acquisition of any remaining shares of ALDHC.  The Enlarged Group 
will be renamed Water Intelligence plc. ALD will continue to operate in its 
current territories under its existing brand. In addition, the Company also 
announces that it intends to raise up to approximately GBP1 million to fund 
future growth of the Enlarged Group by way of an Open Offer of 1,332,946 New 
Ordinary Shares at 75p per share, following the implementation of the Capital 
Reorganisation, the terms of which are set out below. MJES has procured 
sub-underwriting commitments in respect of 876,553 New Ordinary Shares 
representing GBP657,414 as at the date of this announcement (subject to 
clawback). 
 
The consideration will be satisfied by the issue of the Consideration Shares. 
Based on the Issue Price, the Acquisition values ALD at GBP5.5 million. Further 
details of the terms and conditions of the Acquisition are set out below under 
the heading "Principal Terms of the Acquisition". 
The Acquisition will result in a change of control of the Company and a 
fundamental change in its business and will constitute a reverse takeover under 
the AIM Rules. In addition, both Patrick DeSouza and Stanford Berenbaum are 
significant shareholders in ALDHC. As such, the Independent Directors are 
seeking Shareholder approval for the Acquisition at the General Meeting. 
 
Patrick DeSouza is a director of ALDHC and a major shareholder in Plain Sight 
and Stanford Berenbaum is President and Chief Executive Officer of ALD as well 
as a shareholder in Plain Sight. Accordingly, neither Patrick DeSouza nor 
Standford Berenbaum has taken part in any of the Board's deliberations 
concerning the Acquisition. 
 
Following completion of the Acquisition and the issue of the Offer Shares 
pursuant to the Open Offer, the Concert Party will have a maximum aggregate 
holding of 6,899,048 New Ordinary Shares, representing 73.55 per cent. of the 
Enlarged Share Capital (assuming the minimum take-up under the Open Offer). 
Following Admission and implementation of the Proposals, the Concert Party will 
hold in excess of 30 per cent. of the Enlarged Share Capital and would normally 
incur an obligation, under Rule 9 of the City Code, to make a general offer to 
the other Shareholders to acquire their shares. However, subject to the approval 
of the other Shareholders on a poll (all of whom are independent of the Concert 
Party) at the General Meeting, the Panel has agreed to waive this obligation. 
 
The Proposals are conditional, inter alia, on the passing of the Resolutions, 
the entry into and the drawdown of the Bank Facility and repayment of the ALDHC 
Debt and Admission. If the Resolutions are approved by Shareholders, it is 
expected that Admission will become effective and dealings in the Enlarged Share 
Capital will commence on AIM on 30 July 2010. 
 
Whilst the New Board believes that the combined businesses of ALDHC and the 
Company together represent a significant opportunity for the Enlarged Group, 
Qonnectis shareholders should be aware that in the absence of the Acquisition 
being completed the Company will have exhausted its cash resources and be unable 
to take advantage of business opportunities available as part of a combined 
group.  Therefore, failure to pass the Resolutions will result in the Company 
needing to seek alternative financing arrangements which the Directors believe 
would be difficult to find in the current economic environment.  Failure to 
secure alternative financing would result in the Company being unable to meet 
its obligations as they fall due and lead to inevitable liquidation.  Therefore, 
the Directors believe that the Proposals afford the Company and its last 
realistic opportunity to survive and to restart its business. 
 
Background information on the Company 
Qonnectis was incorporated on 10 February 2000 and admitted to trading on AIM on 
24 February 2005.  At that time, the Company was a telematics and IT services 
provider to the utility markets, offering services aiming to achieve significant 
cost savings through more efficient operation of water and energy networks, 
improved energy conservation and environmental protection and identification of 
problems and irregularities in usage of energy and water. Following admission to 
trading on AIM, the Company went on to win several large contracts, both in the 
UK and internationally, including with a major office and retail complex in Hong 
Kong, a UK-based national water conservation consultancy and a large UK 
emergency services authority. On 11 October 2006, the Company announced that it 
had been awarded a project with a utility customer being Thames Water, to 
develop an innovative product, which was named 'Leakfrog'. Several orders for 
the Leakfrog product were placed in the year to 30 June 2008, building upon the 
significant progress made by the Company since its admission to AIM. However, in 
the first half of the year to 30 June 2009, a significant order originally 
placed in the year to 30 June 2008 was not repeated due to circumstances outside 
the Company's control. 
 
This, combined with certain other factors, placed a variety of working capital 
constraints on the Company, which in turn limited its ability to win and deliver 
new sales contracts. On 3 July 2009, the Company announced that it was in 
discussions with a number of parties which could lead to additional funding, in 
the absence of which, the Directors believed that the Company would have 
insufficient funds to continue trading. The Company subsequently announced on 30 
July 2009 that the attempts to secure this funding had not been successful and 
the directors at that time had requested a suspension in the trading of the 
Company's shares on AIM, pending clarification of its financial position. 
 
Following preliminary discussions with ALD, the Company executed a letter of 
agreement with Plain Sight regarding a potential reverse takeover in late 
September 2009. On 11 January 2010, the Company announced that it had raised 
GBP395,000 by the issue of GBP295,000 of Loan Notes and GBP100,000 by the 
placing of 100,000,000 Existing Ordinary Shares at par. The repayment 
obligations under the Loan Notes have been guaranteed in full by ALD. The Loan 
Notes are due to be repaid on Admission and the holders of the Loan Notes have 
agreed to use the proceeds to subscribe for New Ordinary Shares at a 25 per 
cent. discount to the Issue Price. In addition, it was also announced on 11 
January 2010 that Patrick DeSouza and Stanford Berenbaum had joined the Board as 
Non-executive Directors. The Independent Directors believe that the fundraising 
would not have been achieved without the involvement of ALD and the pending 
Acquisition. 
 
The New Board believes that the Enlarged Group, following the Open Offer and 
Admission, will have expansion opportunities as a result of ALD's thirty-year 
track record in providing premium noninvasive water leak detection services and 
the Company's water monitoring line of products. In addition, ALD's balance 
sheet and recurring cashflows, experienced management team, current product 
offering and size of its addressable market all justify the Board's 
recommendation of the transaction to Shareholders. 
 
As stated above, trading in the Company's shares has been suspended since July 
2009.  The suspension has been lifted today on the publication of the AIM 
Admission Document and the release of the Company's results for the 18 month 
period ended 31 December 2009.  It should be noted, however, that completion of 
the Acquistion is subject to a number of conditions being satisfied and that 
there can be no guarantee that such conditions will be satisfied.  Therefore, 
any dealing prior to the Resolutions being passed will be in the Existing 
Ordinary Shares only and not reflect ALDHC as part of the Company's group. 
 
Information on ALD 
History and overview 
ALD's business was founded in California in 1974 by Richard Rennick. The company 
expanded steadily across the US through franchise sales and eventually entered 
the international market in 1989. 
 
In early 2006, ALD was acquired by ALDHC, which is 92 per cent. owned by Plain 
Sight, Patrick DeSouza, Stan Berenbaum and certain other individuals. By 2009, 
ALD and its franchises had grown into a business with in excess of $50 million 
of franchise system-wide sales and a US brand leader in the leak detection 
market. 
 
ALD focuses on the accurate, non-destructive detection of all types of leaks 
including hidden water and sewer leaks, together with repair and other related 
services. ALD's service technicians utilize proprietary training and specialist 
equipment such as infrared cameras and acoustic devices to pinpoint leaks, 
employing less invasive methods to find the source of a leak compared with 
breaking or drilling holes in walls and floors. Because leaking water can travel 
along water lines or leaks may be pinhole size in various places along a water 
pipe, in many instances, ALD's service offerings have the potential to reduce 
the repair costs for the consumer compared with typical plumbing solutions as 
they do not rely on a 'trial-and-error' method of exposing whole sections of 
pipe to locate leaks. 
 
In addition to the four corporate territories directly owned and controlled by 
ALD, ALD operates a franchise structure, with approximately 129 franchise 
agreements executed with franchisees established in the US and seven other 
regions internationally, including Canada, Australia, Brazil, Venezuela and the 
EU. Further details on the franchise system are set out below. 
 
ALD's business 
ALD's principal customers are residential, commercial and municipal and it 
focuses predominantly on the following areas of leak detection: 
 
·      the detection of leaks in interior and exterior plumbing systems; 
·      the detection of the location of indicated leaks; 
·      the detection of slab (concrete/basement/raised floor) leaks; 
·      the detection of leaks in walls; 
·      the detection and location of existing utility pipes; 
·      the detection of leaks in swimming pools, fountains and spas; and 
·      the detection of leaks in sewer systems. 
 
On the detection of a leak or suspicion that a leak has occurred, ALD or one of 
its franchisees will typically receive a call from a homeowner or business 
owner. Calls can also come from referral sources such as insurance adjustors, 
contractors, restoration companies or plumbers, who have been called out but 
require specialist help. A service vehicle is then dispatched to the location 
where the detection work can begin. 
A typical call-out fee for a leak detection job ranges from $250 to $350. After 
two hours, an additional $125 per hour is usually applied for the technician's 
time and skill and in such cases the leak detection is usually more complex. 
Franchisees have flexibility to adjust the typical call-out fee. 
 
The customer is typically then given a report on the location of the leak, the 
recommended course of action and the likely remediation cost, if any. If the 
customer opts to have the remediation work carried out, it can be done 
immediately thereafter if the technician's schedule permits. If not, a further 
appointment is booked and the technician(s) returns as soon as possible. The 
range of remediation work can vary from simple pipe repairs costing a few 
hundred dollars to entire pipe replacement jobs (for example on older 
properties) which can cost in excess of $7,500. 
 
ALD also performs services for municipal customers. This includes leak survey 
work. Typically, municipalities and large water systems are concerned about 
regulatory compliance, water leaks and potential fines and penalties, lost 
revenue, operational efficiency improvements and of course, reducing the 
potential for water contamination, property damage, liability and water outage 
events. In conducting leak surveys, ALD uses sonic leak detection equipment as 
well as correlation equipment. Correlation and computer equipment helps compare 
sound travel times at various pipe locations to help determine the location of a 
leak. 
 
As leaks are detected on behalf of customers, ALD also seeks to leverage its 
customer base by selling additional follow-through solutions for remediation of 
leaks and related solutions to maintain pipes and water quality. For example, in 
addition to leak detection services, certain ALD franchisees also perform 
traditional, as well as, non-invasive methods of leak remediation. Non-invasive 
leak remediation systems made available to ALD franchisees include the 
'ePipeTM', an epoxy based coating system which allows technicians to restore 
pipes in situ. Damaged or leaky pipes are restored within the walls or floors, 
without the need to remove or replace the entire pipe, significantly limiting 
any damage caused in comparison. 
 
Certain ALD franchisees also perform bioremediation services and sell associated 
bioremediation products. These services and products, marketed mainly to 
commercial customers, are designed to help keep drain lines clean and clear by 
removing fats and grease build-up using eco-friendly managed solutions. 
 
ALD has an agreement with Leslie's Swimming Pool Supplies ("Leslie's"), the 
largest specialist retailer of swimming pool supplies in the US, to help 
retro-fit and install new pool drains to comply with a US federal law that 
mandated the installation of specific drain covers. The relevant legislation 
promotes the safe use of commercial pool, spas and hot tubs by imposing 
mandatory federal requirements for suction entrapment avoidance. As a result of 
ALD franchisee presence throughout the US, Leslie's contracted ALD to carry out 
drain cover installations in swimming pools and spas for certain of Leslie's 
nationwide US commercial accounts, including hotel chains. 
 
ALD is also a member of a number of trade associations, including the American 
Water Works Association ("AWWA"), the largest organisation of water 
professionals in the world, representing more than 100 countries. AWWA members 
represent a broad spectrum of the water community: treatment plant operators and 
managers, scientists, environmentalists, manufacturers, academics, regulators, 
and others with an interest in water supply and public health. 
 
Franchisees 
ALD's business operates through a system of franchises. There are currently 114 
franchise agreements with franchisees operating multiple service vehicles 
established in the US, with an additional 15 franchise agreements outside the 
US. The initial investment required from prospective unit-level franchisees on 
the purchase of a franchise currently ranges from approximately $83,000 to 
$233,350.  This investment covers the initial franchise/exclusive territory fee, 
the appropriate training and proprietary and other equipment. The level of the 
fee is dependent on the size of the territory in which the franchise will be 
based and other applicable demographics. The standard franchise agreement is for 
an initial period of ten years after which the agreement is capable of being 
renewed by the parties for an additional period. New franchisees begin by 
offering residential leak detection and associated services. As the business 
develops, they are subsequently authorised to offer services to municipalities, 
water districts, industrial estates and large commercial customers. 
 
Research and development 
ALD uses sophisticated leak detection and related equipment. Certain of ALD's 
equipment is proprietary, including its XLT 50 Leak Finder (ALD's principal leak 
detector) as well as "LeakVue." 
 
LeakVue helps ALD technicians verify any change in a body of water, such as a 
swimming pool, the results of which are transferred wirelessly to a PDA device. 
LeakVue was developed by Plain Sight, historically a major shareholder of ALDHC. 
Incorporated in 2000 by a group of scientists affiliated with Yale University, 
Plain Sight is principally a technology holding company and has a platform of 
over 15 patents and filings for new product offerings focused in various 
markets, including infrastructure services. Through its close relationship with 
Yale and the US Defense Department (particularly Defense Advanced Research 
Projects Agency or DARPA), Plain Sight has developed and owns a diverse patent 
portfolio and a range of proprietary technologies that it licenses to businesses 
across a wide range of markets from defence (e.g. Lockheed Martin) to resource 
management (e.g. Eaton Corporation). Over the last decade, Plain Sight has 
received over $10 million in research funding from DARPA and other government 
agencies to advance its technologies. 
 
ALD will have the right to utilise future technology related to the field of 
water supply and water metering developed by Plain Sight and its scientists 
following Admission on a royalty free basis for the first $5,000,000 of any 
product sales which include intellectual property under the licence, with a fee 
of three per cent. paid on any further sales. Further information on this 
arrangement is set out in paragraph 12.3 of Part VII of the AIM Admission 
Document. 
 
ALD is a member of the International Franchise Association (IFA). Founded in 
1960, the IFA is comprised of thousands of franchisors, franchisees, and 
suppliers. The organisation seeks to protect, enhance and promote franchising 
worldwide through legislative, educational and networking opportunities.  For 
its franchise system, ALDestablished the American Leak Detection Advisory 
Council (ALDAC).  ALDAC is comprised of ALD franchise owners who provide advice 
and counsel on the planning and growth development of the ALD franchise system. 
One of the objectives of the Enlarged Group following Admission will be to buy 
back and further develop certain existing franchise businesses. 
 
The New Board intends to apply part of the proceeds from the Open Offer in 
expanding ALD's research and development activities in order to maintain ALD's 
competitive advantage over more standardized service providers in the water 
services sector. Further details on the use of proceeds are set out below. 
 
Revenue model 
ALD's key revenue streams are described below: 
 
·      Franchise Royalties 
Royalties typically account for almost two thirds of ALD's revenue. Franchisees 
pay monthly royalties based on a percentage of gross monthly sales, ranging from 
six to 10 per cent. 
 
·      ALD Corporate Owned Locations 
ALD derives revenue from sales at its premises in Palm Springs, San Bernadino, 
Boston and Fort Lauderdale. Corporate sales typically make up approximately 25 
per cent. of ALD's total annual revenue. 
 
·      New Franchise Sales 
ALD also derives revenue from the sale of new franchises to franchisees. While 
not a priority over 
the past few years, the New Board intends to exploit the opportunity it believes 
there exists by expanding franchise operations into the UK, the EU as well as 
underdeveloped areas in the US. 
 
·      ALD Warehouse 
ALD supplies its franchisees with equipment and materials. This service is a 
convenience for franchisees. However, a modest mark-up is applied to the goods 
and hence additional revenue is generated. It is intended that, following 
Admission, Qonnectis products will be available to franchisees for operational 
use or resale through the ALD warehouse. 
 
The Leak Detection Market 
The New Board is of the view that both the residential/commercial and the 
municipal/utility markets present significant opportunities for a business with 
a brand, reputation and existing international presence, such as ALD. 
 
On the residential side, an example of just one market in which ALD franchisees 
achieve higher margin sales is the location and remediation of pool and spa 
leaks. A report published by SBI Energy in May 2007 estimated that there were in 
excess of 8 million swimming pools in the US. The New Board estimates that 
approximately half of these pools are in-ground pools. Most, if not all, pools 
and spas will have leak problems during their service life. The New Board's view 
is that with the application of growth capital, continued penetration of this 
market segment is possible. 
 
From a more general perspective, the Water Infrastructure Network estimated in 
2000 that over 20 years, $940 billion would be required for investment in water 
and sewer infrastructure improvement works. The World Bank has estimated the 
costs to utilities of water lost before reaching the consumer due to leaky pipes 
and poor maintenance at approximately $14 billion per annum. These costs 
increase when also considering water wasted due to leaks after reaching the 
end-user; whether commercial or residential. The US government has estimated 
that more than 1 trillion gallons of water leak from US homes each year, at a 
cost of approximately $1.5 billion. 10 per cent. of these homes have leaks that 
waste more than 90 gallons per day. The costs to end-users can also be 
significant when considering the damage to property following a leak. In the US, 
it is estimated that $10.4 billion is spent each year to repair the effects of 
leaks. In the UK, this figure is approximately GBP1.8 billion. 
 
ALD's customers are not only providers and end-users of water but also 
organisations such as insurance companies and restoration companies. 
Increasingly, with infrastructure spending on the rise in the US and around the 
world, ALD is beginning to focus on municipal work such as water surveys of 
pipes in addition to its traditional leak detection offerings. 
 
The Enlarged Group will seek to address these opportunities using ALD's existing 
established international consumer base as a place from which to grow. In 
addition to the expanded geographical reach, the New Board seeks to identify 
opportunities for the Enlarged Group to cross-sell complimentary products and 
services developed by the Company to ALD's existing customers and Qonnectis's 
prior municipal customers. 
 
Barriers to entry and competition 
The New Board believes that its competitive advantages include its full range of 
service offerings, its brand and over 30 years of experience, the specialised 
equipment it uses, the training it provides its franchise owners and technicians 
working from business run directly by ALD, its marketing system and the key 
relationships it has with channel partners such as insurance and restoration 
companies. For certain segments of its business, ALD may face competition from 
others, including independent plumbers, repair services, other leak detection 
companies and services. 
 
The New Board is aware of certain other companies or businesses that offer leak 
detection services. However, as far as it is aware, these businesses tend to be 
small owner run-operations without the franchise or branding presence of ALD. 
 
Current trading and prospects 
Qonnectis 
In the first quarter of 2010, Qonnectis generated modest revenues through a sale 
of 250 units of its Leakfrog product to Northumbrian Water, a new customer, and 
renewals of contracts for data monitoring services for London Fire Brigade. 
Overhead costs have been kept under control in order to preserve the Company's 
cash resources from the fundraising completed in January 2010, which at 31 March 
2010, stood at approximately GBP144,000. 
 
ALD 
The first two months of 2010 produced a stable trading performance for ALD with 
consistent monthly revenue and earnings during a period in which, in ALD's 
management's opinion, the US economy was still emerging from the poor 
macroeconomic conditions in 2009. ALD generated turnover of approximately 
$930,000 and franchise royalty income remained steady at 65 per cent. of 
revenue. ALD continues to perform in line with its management's expectations for 
the current financial year. 
 
Qonnectis currently provides products which alert the consumer to a potential 
leak through the monitoring of a normal water usage rate and has historically 
supplied its products to utilities, such as Thames Water. At present, ALD 
specialises in pinpointing existing water leaks non-invasively so that they may 
be remediated with minimal damage to the surrounding area, i.e. walls and floors 
etc. Whilst ALD does service municipalities in the United States, the majority 
of its customer base in the US is from the residential market. Following the 
Acquisition, the Enlarged Group aims to be able to provide its collective 
existing customers a broader and more complete range of products and services. 
Specifically, the New Board hopes that Qonnectis's existing UK water utility 
customers will benefit from the offering of non-invasive leak detection services 
and that ALD's current consumers can be supplied with water usage monitoring and 
successor products to help them to more effectively identify the presence of a 
leak. 
 
In contemplation of completion of the Acquisition and Admission, the New Board 
has already been in active discussions with certain water utilities and 
potential franchisees in the UK. Although there can be no guarantees that these 
discussions will be successfully concluded, the New Board is hopeful that new 
revenue streams can be established following Admission. 
 
Reasons for Admission, the Open Offer and use of the proceeds 
The New Board intends to use the net proceeds of the Open Offer to: 
 
·      maximise ALD's franchise and corporate-run opportunities; 
·      establish a UK operation, which will facilitate ALD's services being 
utilised in the UK water services industry, and an additional US operation in 
Connecticut; and 
·      develop, through the Company's arrangements with Plainsight, additional 
water metering products and devices, including possibly a next generation 
wireless water flow analyser to be called 'Reporter', which may be expected to 
be in production by the end of 2011. 
 
The New Board believes that the Acquisition and Admission should: 
 
·      enhance the status of the Enlarged Group's brand and market recognition; 
·      assist the Company in raising additional equity capital for the further 
development of the Enlarged Group's business; 
·      take advantage of future acquisition opportunities complementary to the 
current business model, should any arise; 
·      improve the Enlarged Group's ability to effect buy backs (where possible, 
using New Ordinary Shares to form all or part of the consideration) of developed 
franchise areas in the US which may benefit from being part of corporate run 
operations of the scale of ALD and the resulting efficiencies; 
·      enable the Enlarged Group to better recruit key personnel for expansion; 
and 
·      provide liquidity for investors through the ability to buy and sell New 
Ordinary Shares. 
 
Principal terms of the Acquisition 
On 7 July 2010, Qonnectis entered into the Acquisition Agreements pursuant to 
which it has conditionally agreed to acquire 91.57 per cent. of the issued share 
capital of ALDHC, the consideration for which will be satisfied by the issue of 
the Consideration Shares (representing up to 78.09 per cent. of the Enlarged 
Share Capital), payable on Admission. 
 
The Acquisition Agreements contain warranties from the Vendors in relation to 
their title to the capital stock of ALDHC, warranties by the Company in relation 
to its authority to issue the Consideration Shares and certain indemnities from 
the Vendors and by the Company. 
 
The Acquisition is conditional upon, inter alia: 
(i)         the entry into and drawdown under the Bank Facility and repayment of 
the ALDHC Debt; 
(ii)         the Acquisition Agreements becoming unconditional in all respects, 
save for Admission; and 
(iii)        Admission of the Consideration Shares having occurred. 
 
In the event that the Acquisition Agreements are completed, Qonnectis 
Acquisition Co. may elect to enter into the Merger which would result in the 
compulsory acquisition of any shares of ALDHC held by the remaining ALDHC 
Shareholders and which, if implemented, would to be filed and become effective 
on the day of Admission. 
 
Capital Reorganisation 
The Capital Reorganisation is being proposed because, historically, the 
bid-offer spread for the Company's Existing Ordinary Shares has represented a 
relatively large proportion of the mid-market price. The New Board believe that 
the proposed consolidation will help to reduce the spread and increase liquidity 
when trading in the New Ordinary Shares commences. Accordingly, the New Board 
have decided that a share reorganisation will be effected on the basis of one 
New Ordinary Share and one B Deferred Share for every 1,200 Existing Ordinary 
Shares. 
 
Holders of fewer than 1,200 Existing Ordinary Shares will not be entitled to 
receive a New Ordinary Share following the Capital Reorganisation. Shareholders 
with a holding in excess of 1,200 Existing Ordinary Shares, but which is not 
exactly divisible by 1,200, will have their holding of New Ordinary Shares 
rounded down to the nearest whole number of New Ordinary Shares following the 
Capital Reorganisation. Fractional entitlements, whether arising from holdings 
of fewer or more than 1,200  Existing Ordinary Shares, will be sold in the 
market and the proceeds will be retained for the benefit of the Company. 
 
The Existing Ordinary Shares have been admitted to CREST. Application will be 
made for Enlarged Share Capital to be admitted to CREST, all of which may then 
be held and transferred by means of CREST. It is expected that the New Ordinary 
Shares arising as a result of the Capital Reorganisation in respect of Existing 
Ordinary Shares held in uncertificated form, i.e. in CREST, will be credited to 
the relevant CREST accounts on 30 July 2010 and that definitive share 
certificates in respect of the New Ordinary Shares arising as a result of the 
Capital Reorganisation from Existing Ordinary Shares held in certificated form 
will be despatched to relevant Shareholders by 6 August 2010.  No temporary 
documents of title will be issued. Share certificates in respect of Existing 
Ordinary Shares will cease to be valid on 29 July 2010 and, pending delivery of 
share certificates in respect of New Ordinary Shares will be certified against 
the register. The record date of the Capital Reorganisation is 29 July 2010. 
 
The rights attaching to the New Ordinary Shares will be identical in all 
respects to those of the Existing Ordinary Shares. 
 
The B Deferred Shares will have no voting rights and will not carry any 
entitlement to attend general meetings of the Company; nor will they be admitted 
to AIM or any other market. They will carry only a priority right to participate 
in any return of capital to the extent of GBP1 in aggregate over the class. In 
addition, they will carry only a priority right to participate in any dividend 
or other distribution to the extent of GBP1 in aggregate over the class. In each 
case, a payment to any one holder of B Deferred Shares shall satisfy the payment 
required. The Company will be authorised at any time to effect a transfer of the 
B Deferred Shares without reference to the holders thereof and for no 
consideration. 
 
Accordingly, the B Deferred Shares will, for all practical purposes, be 
valueless and it is the Board's intention, at an appropriate time, to have the B 
Deferred Shares cancelled, whether through an application to the Companies Court 
or otherwise. No certificates will be issued in respect of the B Deferred 
Shares. 
 
The ISIN of the New Ordinary Shares will be GB00B3PFSR32 on Admission. 
 
Details of the Open Offer 
Structure 
The Directors have given a great deal of thought as to how to structure the 
proposed fundraising and have concluded that the Open Offer is the most suitable 
option available to the Company and its Shareholders. 
 
Up to 1,332,946 New Ordinary Shares will be issued through the Open Offer at 75 
pence per Open Offer Share (to raise gross proceeds of approximately GBP1 
million). MJES has agreed as agent for the Company to use its reasonable 
endeavours to procure sub-underwriting commitments in respect of the Open Offer, 
and in accordance with, the terms of the Underwriting Agreement. 
Sub-underwriting commitments in respect of 876,553 New Ordinary Shares 
representing GBP657,414 have been procured at the date of this announcement 
(subject to clawback). 
 
Allocations under the Open Offer 
In the event that valid acceptances are not received in respect of any of the 
Open Offer Shares under the Open Offer, unallocated Open Offer Shares may be 
allotted to Qualifying Shareholders to meet any valid applications under the 
Excess Application Facility. 
 
Basic Entitlements 
Prior to the proposed Capital Reorganisation, and subject to the fulfilment of 
the conditions set out below and in Part III of the AIM Admission Document, 
Qualifying Shareholders are being given the opportunity, on and subject to the 
terms and conditions of the Open Offer, to apply for any number of Open Offer 
Shares (subject to the limit on the number of Excess Shares that can be applied 
for using the Excess Application Facility) at the Issue Price. Qualifying 
Shareholders have a Basic Entitlement of: 
 
          11 Open Offer Shares for every 4,500 Existing Ordinary Shares 
 
registered in the name of the relevant Qualifying Shareholder on the Record Date 
and so in proportion for any other number of Existing Ordinary Shares held. 
 
Basic Entitlements under the Open Offer will be rounded down to the nearest 
whole number and any  fractional entitlements to Open Offer Shares will be 
disregarded in calculating Basic Entitlements and will be aggregated and made 
available to Qualifying Shareholders under the Excess Application Facility. 
Qualifying Shareholders with fewer than 4,500 Existing Ordinary Shares will not 
be able to apply for Excess Shares pursuant to the Excess Application Facility. 
 
The aggregate number of Open Offer Shares available for subscription pursuant to 
the Open Offer will not exceed 1,332,946 New Ordinary Shares. 
 
Excess Application Facility 
Subject to availability, the Excess Application Facility enables Qualifying 
Shareholders to apply for any whole number of Excess Shares in excess of their 
Basic Entitlement up to an aggregate maximum number of shares equal to the 
maximum number of Open Offer Shares available under the Open Offer. 
 
Conditionality 
The Open Offer is conditional upon the following: 
 
·      the drawdown under the Bank Facility and repayment of the ALDHC Debt; 
·      the passing of the Resolutions to be proposed at the General Meeting to 
be held on 29 July 2010; 
·      Admission of the New Ordinary Shares becoming effective by not later than 
8.00 a.m. on 30 July 2010; and 
·      the Underwriting Agreement becoming unconditional in all respects and not 
being terminated prior to Admission. 
 
If the Resolutions are not passed or Admission does not take place at 8.00 a.m. 
on 30 July 2010 (or such later time and/or date as the Company may determine, 
not being later than 1.00 p.m. on 31 July 2010) or if the Underwriting Agreement 
is terminated, the Open Offer will lapse, any Basic Entitlements and Excess 
CREST Open Offer Entitlements admitted to CREST will, after that time and date 
be disabled and application monies under the Open Offer will be refunded to the 
applicants, by cheque (at the applicant's risk) in the case of Qualifying 
Non-CREST Shareholders and by way of a CREST payment in the case of Qualifying 
CREST Shareholders, without interest, as soon as practicable thereafter. 
 
Application for Admission 
Application will be made to the London Stock Exchange for the Enlarged Share 
Capital to be admitted to trading on AIM. Subject to, among other things, the 
Resolutions being passed, it is expected that Admission will become effective at 
8.00 a.m. on 30 July 2010 and that dealings for normal settlement in the New 
Ordinary Shares will commence at 8.00 a.m. on the same day. No temporary 
documents of title will be issued. 
 
The Open Offer Shares to be issued pursuant to the Open Offer will, following 
Admission, rank pari passu in all respects with the Existing Ordinary Shares in 
issue at the date of this announcement and will carry the right to receive all 
dividends and distributions declared, made or paid on or in respect of the New 
Ordinary Shares after Admission. 
 
In connection with the applications for Admission and the Open Offer, the 
Company has entered into the Underwriting Agreement with MJES pursuant to which 
MJES has agreed as agent of the Company to use its reasonable endeavours to 
procure sub-underwriting commitments for the Offer Shares. 
 
Important notice 
Shareholders should note that the Open Offer is not a rights issue. Qualifying 
Shareholders should be aware that in the Open Offer, unlike with a rights issue, 
any Open Offer Shares not applied for by Qualifying Shareholders under their 
Basic Entitlements will not be sold in the market on behalf of, or placed for 
the benefit of, Qualifying Shareholders who do not apply under the Open Offer, 
but may be allotted to Qualifying Shareholders to meet any valid applications 
under the Excess Application Facility or sub-underwriters procured by MJES and 
that the net proceeds will be retained for the benefit of the Company. 
 
Any Qualifying Shareholder who has sold or transferred all or part of his 
registered holding(s) of Shares prior to the close of business on 2 July 2010 is 
advised to consult his stockbroker, bank or other agent through or to whom the 
sale or transfer was effected as soon as possible since the invitation to apply 
for Open Offer Shares under the Open Offer may be a benefit which may be claimed 
from him by the purchasers under the rules of the London Stock Exchange. 
 
Effect of the Open Offer 
Upon completion of the Open Offer, the Open Offer Shares will represent 
approximately 9.35 per cent. of the Enlarged Share Capital, based on the 
estimated minimum proceeds and 13.55 per cent. based on the maximum proceeds 
being received. 
 
 
Open Offer Shares 
The Open Offer Shares will be issued pursuant to authorities to be sought at the 
General Meeting.  Following the issue of the Open Offer Shares pursuant to the 
Open Offer, a Qualifying Shareholder who does not take up any of his Basic 
Entitlement (and does not take up any Excess Shares under the Excess Application 
Facility) will suffer a dilution of approximately 95 per cent. to his economic 
interests in the Company. If a Qualifying Shareholder subscribes for his Basic 
Entitlement in full but does not take up any Excess Shares under the Excess 
Application Facility he will suffer a dilution of approximately 82 per cent. to 
his economic interests in the Company. 
 
New Board 
Harry Offer will remain on the board of the Company as a Non-executive director 
following Admission.  Conditional on Admission, Patrick DeSouza and Stanford 
Berenbaum will assume the roles of Chairman and Chief Executive Officer, 
respectively, Barbara Spurrier will be stepping down and Ric Piper, Michael 
Reisman and Stephen Leeb will be appointed as Non-executive Directors. 
 
Brief details on the proposed New Board are set out below: 
 
Patrick J. DeSouza (aged 51), Proposed Executive Chairman 
Dr DeSouza is President and Chief Executive Officer of Plain Sight and is a 
graduate of Columbia College, the Yale Law School and Stanford Graduate School. 
He has 18 years of operating and advisory leadership experience with both public 
and private companies in the defence, software/Internet and asset management 
industries. Over the course of his career, Mr DeSouza has had significant 
experience in corporate finance and cross-border mergers and acquisition 
transactions. He has practised corporate and securities law as a member of the 
New York and California bars. Mr DeSouza has also worked at the White House as 
Director for Inter-American Affairs on the National Security Council. He is the 
author of Economic Strategy and National Security (2000) and has been a visiting 
lecturer at Yale Law School. 
 
Stanford P. Berenbaum (aged 43), Proposed Chief Executive 
Mr Berenbaum is President and Chief Executive Officer of ALD. He earned his 
Doctor of Jurisprudence degree, cum laude, from Wayne State University. He was 
formerly partner in the Antitrust, Trade Regulation and Franchising Department 
of the Detroit-based law firm Honigman Miller, as well as Vice President and 
General Counsel of Little Caesar Enterprises, Inc., an international pizza 
restaurant operator and franchisor. Mr Berenbaum, licensed to practice before 
the US Supreme Court, is a member of the California and Michigan state bars and 
is also an International Franchise Association Certified Franchise Executive. 
 
Harry Offer (aged 48), Proposed Non-executive Director 
Mr Offer is a Director of the Offer Group Ltd and sold his interest in 
Screenedata Limited, a start up business in which he was a 50 per cent. 
shareholder and director in a trade sale in 2007. Harry has an MA from Cambridge 
and gained an MBA from Cranfield in 1993 in addition to his MRICS qualification 
in 1990 and is currently a trustee of The Richmond Charities' Almhouses. 
 
Ric Piper (aged 57), Proposed Non-executive Director 
Mr Piper qualified as a Chartered Accountant in 1977. He was appointed Finance 
Director of Logica (UK) in 1990 and was Group Finance Director of WS Atkins from 
1993 to 2002. Since 2003, he has held the role of Chairman or Non-executive 
Director for several AIM and privately owned businesses.  Mr Piper has been a 
partner with Restoration Partners Limited, which advises technology businesses, 
since 2006.  Mr Piper is an Audit Committee member of the Science and 
Technologies Facilities Council (and its predecessor, the Particle Physics & 
Astronomy Research Council), and is a member of the Financial Reporting Review 
Panel. Currently he is a Non-executive Director with Matchtech Group plc, an AIM 
 listed technical and professional recruitment company, and with Turbo Power 
systems Inc, the Toronto Stock Exchange and AIM listed power generation and 
conditioning equipment supplier. 
 
Michael Reisman (aged 70), Proposed Non-executive Director 
Prof. Reisman is a director of Plain Sight and currently serves as Myres S. 
McDougal Professor of International Law at the Yale Law School, where he has 
been on the faculty since 1965 and has previously been a visiting professor in 
Tokyo, Berlin, Basel, Paris, Geneva and Hong Kong. He is a Fellow of the World 
Academy of Art and Science and a former member of its Executive Council, the 
President of the Arbitration Tribunal of the Bank for International Settlements, 
a member of the Advisory Committee on International Law of the Department of 
State, Vice-Chairman of the Policy Sciences Center, Inc., and a member of the 
Board of The Foreign Policy Association. 
 
He has published widely in the area of international law and served as 
arbitrator and counsel in many international cases. He was also President of the 
Inter-American Commission on Human Rights of the Organization of American 
States, Vice-President and Honorary Vice-President of the American Society of 
International Law and Editor-in-Chief of the American Journal of International 
Law. He has served as arbitrator in the Eritrea/Ethiopia Boundary Dispute and in 
the Abyei (Sudan) Boundary Dispute. 
 
Stephen Leeb (aged 63), Proposed Non-executive Director 
Dr Leeb has been a director of Plain Sight since 2008 and acts as chairman of 
Leeb Capital Management, Inc., a registered investment advisory firm based in 
the New York. In his role as 
chairman, Dr Leeb guides the company's investment decisions which are then 
implemented within the portfolios under the firm's management. 
 
He is also a member of the advisory boards of a number of private US companies 
and founded the Leeb Group, a publisher of financial newsletters. Dr Leeb has 
written seven published books on investments and financial trends. 
 
Dr Leeb received his bachelor's degree in Economics from the University of 
Pennsylvania's Wharton School of Business and earned his master's degree in 
Mathematics and Ph.D. in Psychology from the University of Illinois. 
 
Senior Management of ALD 
Pamela Vigue (aged 49), Chief Financial Officer 
Ms Vigue, having received her Bachelor of Science degree in Accounting from 
California State University, San Bernardino, joined ALD in 1998 and has over 25 
years experience in the accounting field. 
 
Jimmy Carter Sr. (aged 46), Director of Corporate Field Services 
Mr Carter has 25 years experience in leak detection and repair. As an expert in 
the municipal leak  detection field, Mr Carter is as a frequent lecturer, 
speaker and advisor to Rural Water Association andAmerican Water Works 
Association. Mr Carter has a variety of licenses, including several California 
State Plumbing Licenses, and is certified in Infrared Thermagraphy and PADI open 
water diving, which allows him to investigate difficult to locate leaks, such as 
those in residential pools 
 
Lisa Stickley (aged 45), Director of Marketing 
Ms Stickley has over 20 years experience in the marketing, advertising, 
communications and PR sectors. She received her degree in Fashion and Business 
Marketing from Oregon State University and is also an International Franchise 
Association Certified Franchise Executive. 
 
Judy Howard (aged 56), Director of Franchisee Relations 
Having joined ALD over 13 years ago, Ms Howard is the company's director of 
Franchise Relations and provides support to ALD franchise owners. 
 
Michelle Hoglund (aged 55), Director of Human Resources and Administration 
Ms Hoglund, having completed Portland State University's Professional 
Development Program and received the university's Certificate in Human Resource 
Management, is ALD's director of Human Resources and Administration and has over 
13 years of experience in the human resource field. 
 
Lock-in and orderly market arrangements 
Each of the New Board and Plain Sight has undertaken to the Company and MJES 
that he or she will not (and will procure that any person with whom he or she is 
connected will not) sell or otherwise dispose of any interest in New Ordinary 
Shares (excluding any Open Offer Shares) beneficially owned or otherwise held or 
controlled by him or her for a period of 12 months following Admission, save in 
limited circumstances such as, inter alia, the acceptance of an offer for the 
Company or the giving of an irrevocable undertaking to accept an offer so long 
as it is open to all shareholders; or a disposal pursuant to a court order, or 
required by law or any competent authority. Each of the New Board and Plain 
Sight has also undertaken that for a further period of 12 months after the first 
anniversary of the date of Admission, he or she will not (and will use all 
reasonable endeavours to procure that no person connected with him or her shall) 
dispose of any New Ordinary Shares, save in certain limited circumstances, 
without the consent of MJES, not to be unreasonably withheld. Ronald Coifman has 
agreed to the same terms pursuant to the terms of a lock in deed. In addition, 
Barbara Spurrier, who is standing down from the Board on Admission, has 
undertaken not to dispose of any New Ordinary Shares for a period of one year 
from Admission without the consent of MJES. 
 
Financial information on the Company and ALD 
The Company's annual report and accounts for the 18 month period ended 31 
December 2009 will be posted to Shareholders today and are available to download 
from the Company's website, www.qonnectis.com. Your attention is drawn to the 
"Current Trading and Prospects" section above. 
 
Loan Notes and Warrants 
On 11 January 2010 Qonnectis announced that it had issued GBP295,000 principal 
of guaranteed loan notes. The Loan Notes attract an interest rate of eight per 
cent. per annum and are repayable (together with accrued interest) upon 
completion of the proposed acquisition of ALD. Holders of Loan Notes have also 
been issued with Warrants to subscribe for Ordinary Shares at a 25 per cent. 
discount to the Issue Price. Loan Note holders have agreed to apply the proceeds 
of the repayment of Loan Notes upon completion of the proposed acquisition of 
ALD to exercise the Warrants granted to them. 
 
If the Acquisition does not occur, the Loan Notes are repayable in two equal 
tranches on the first and second anniversaries of the date of issue. Repayment 
of the Loan Notes has been guaranteed in full by ALD, in consideration for 
which, ALD has been granted security by way of a fixed and floating charge over 
all of the Company's assets. In addition and again, if Admission does not occur, 
the Company has agreed to issue preferred convertible loan notes ("Preferred 
Loan Notes") to ALD in consideration of, among other things, any amounts loaned 
to the Company by ALD and any monies paid to any thirdparty by ALD as a result 
of the repayment guarantee under the Loan Notes. The Preferred Loan Notes shall 
bear interest at 18 per cent. per annum and shall be redeemable at twice the 
principal amount (and unpaid interest). The Preferred Loan Notes shall be 
convertible, at ALD's option and subject to the grant of a waiver of the 
obligations under Rule 9 of the Code by independent shareholders at that time 
(if necessary), into Ordinary Shares at 0.1p per share. The Company has also 
agreed to permit ALD, at that time, to appoint a majority of the directors on 
the Board of the Company. 
 
The Company has also agreed to issue warrants to MJES to subscribe for 187,526 
New Ordinary Shares at the Issue Price for a period of four years from 
Admission. 
 
Under the Bank Facility, ALDHC will grant The Bank of Southern Connecticut a 
warrant over 70,000 shares of common stock of ALDHC at an exercise price of $1 
per share.  The New Board will procure that the Company will grant replacement 
warrants over 70,000 New Ordinary Shares with an exercise price of 63p per 
share. 
 
Share options 
The New Board believes that the recruitment, motivation and retention of key 
employees is vital for the successful growth of the Enlarged Group. The New 
Board considers that an important element in achieving these objectives is the 
ability to incentivise and reward staff (including executive directors) by 
reference to the market performance of the Company in a manner which aligns the 
interests of those staff with the interest of shareholders generally. The New 
Board intends to adopt new share option plans following Admission, pursuant to 
which options to acquire New Ordinary Shares will be granted to directors and 
employees of the Enlarged Group. If appropriate, the Board intends to adopt one 
policy for eligible employees based in the UK and one for eligible employees 
based in the US.  It is expected that the total number of New Ordinary Shares 
that may be committed under the schemes,if implemented, will represent in 
aggregate a maximum of 15 per cent. of the Company's issued ordinary share 
capital from time to time. 
 
Corporate governance 
The New Board recognises the importance of sound corporate governance and the 
New Board intends to ensure that, following Admission, the Company adopts 
policies and procedures which reflect the Corporate Governance Guidelines for 
AIM companies published by the Quoted Companies Alliance ("QCA"). 
 
Following the implementation of the Proposals, the New Board will meet monthly 
to review key operational issues and the strategic development of the Enlarged 
Group. The financial performance of the Enlarged Group will be reported and 
monitored. All matters of a significant nature will continue to be discussed in 
the forum of a board meeting. The New Board will be responsible for internal 
controls to minimise the risk of financial or operational loss or material 
misstatement. The controls established will be designed to meet the particular 
needs of the Company having regard to the nature of its business. 
 
The Company has also established an Audit Committee and a Remuneration Committee 
with formally delegated duties and responsibilities. Each committee will consist 
of Ric Piper and Michael Reisman, with Ric Piper chairing the Audit Committee 
and Michael Reisman chairing the Remuneration Committee. 
 
The Audit Committee will determine the terms of engagement of the Enlarged 
Group's auditors and will determine, in consultation with the auditors, the 
scope of the audit. The Audit Committee will receive and review reports from 
management and the Enlarged Group's auditors relating to the interim and annual 
accounts and the accounting and internal control systems in use throughout the 
Enlarged Group. 
 
The Audit Committee will have unrestricted access to the Enlarged Group's 
auditors. 
The Remuneration Committee will review the scale and structure of the executive 
directors' and senior employees' remuneration and the terms of their service or 
employment contracts, including share option schemes and other bonus 
arrangements. The remuneration and terms and conditions of the nonexecutive 
directors will be set by the entire board. 
 
Corporate governance measures are designed to manage rather than eliminate risk 
of failure to achieve business objectives or abuse of internal controls, and can 
only provide reasonable and not absolute insurance against material 
misstatement, loss or abuse. 
 
The Company will on Admission adopt a share dealing code and ensure, in 
accordance with Rule 21 of the AIM Rules, that the New Board and applicable 
employees do not deal in any New Ordinary Shares during a close period (as 
defined in the AIM Rules) and will take all reasonable steps to ensure 
compliance by the Directors and applicable employees. 
 
The Directors believe that the Company has sufficient experience in accounting 
systems and controls which will provide a reasonable basis for them to make 
proper judgements as to the financial position and prospects of the Enlarged 
Group. 
 
Dividend policy 
The New Board's objective is to grow the Enlarged Group's business. Future 
income generated by the Enlarged Group in the first three years following 
Admission, will be re-invested to implement its growth strategy. In view of this 
and the adverse tax consequences arising out of the Company's potential dual tax 
status, it is very unlikely that the New Board will recommend a dividend in the 
early years following Admission. 
 
However, the New Board intends that the Company will recommend or declare 
dividends at some future date once they consider it commercially prudent for the 
Company to do so, bearing in mind the financial position and resources required 
for its development. 
 
Taxation 
The Company has received provisional clearance from HMRC that the Enlarged Group 
will meet the investor company requirements for the Enterprise Investment Scheme 
("EIS") and Venture Capital Trust ("VCT") legislation. 
 
CREST 
The Existing Ordinary Shares are eligible for CREST settlement. Accordingly, 
following Admission, settlement of transactions in the New Ordinary Shares may 
take place within the CREST system if the relevant shareholder so wishes. 
 
CREST is a voluntary system and Shareholders who wish to receive and retain 
share certificates will be able to do so. 
 
General Meeting 
A General Meeting has been convened for 10.00 a.m. on 29 July 2010 at the 
offices of MJES, 51-55 Gresham Street, London EC2V 7HQ for the purpose of 
considering and, if thought fit, passing the following resolutions: 
 
Ordinary resolutions to: 
(1) approve the Acquisition; 
(2) approve the Waiver; 
(3) authorise the Directors to allot relevant equity securities under Section 
551 of the Act;    and 
(4) approve the Capital Reorganisation. 
 
Special resolutions to: 
(5) disapply statutory pre-emption rights; 
(6) change the name of the Company to Water Intelligence plc; and 
(7) adopt the Articles of Association to reflect certain provisions of the Act. 
 
To be passed, Resolutions 1 to 4 require a majority of not less than 50 per 
cent. and Resolutions 5 to 7 will require a majority of not less than 75 per 
cent. of the Shareholders voting in person or by proxy in favour of each 
Resolution. In addition, in accordance with the requirements by the Panel, 
Resolution 2 shall be taken on a poll of Shareholders. 
 
Irrevocable undertakings to approve the Proposals 
The Independent Directors have irrevocably undertaken to the Company to vote in 
favour of the Resolutions to be proposed at the General Meeting, in respect of 
their aggregate beneficial holdings totalling 40,097,300 Existing Ordinary 
Shares, representing approximately 7.35 per cent. of the Existing Ordinary 
Shares. 
 
Admission and dealings 
Application will be made to the London Stock Exchange for the Enlarged Share 
Capital to be admitted to trading on AIM. It is expected that Admission will 
become effective and that dealings in the Enlarged Share Capital will commence 
on 30 July 2010. 
 
+--------------------------------------------+------------------+ 
|                                                               | 
|            Expected Timetable of Principal Events             | 
|                                                               | 
+---------------------------------------------------------------+ 
|                                            |             2010 | 
+--------------------------------------------+------------------+ 
| Record date for the Open Offer             |           2 July | 
+--------------------------------------------+------------------+ 
| Announcement of ALD Acquisition and Open   |           7 July | 
| Offer                                      |                  | 
+--------------------------------------------+------------------+ 
| Posting of AIM Admission Document, Form of |           7 July | 
| Proxy and, to Qualifying non-CREST         |                  | 
| Shareholders, the Non-CREST Application    |                  | 
| Forms                                      |                  | 
+--------------------------------------------+------------------+ 
| Basic Entitlements credited to stock       |           8 July | 
| accounts in CREST of Qualifying CREST      |                  | 
| Shareholders                               |                  | 
+--------------------------------------------+------------------+ 
| Recommended latest time for requesting     |  4.30 p.m. on 22 | 
| withdrawal of nil paid stock from CREST    |             July | 
+--------------------------------------------+------------------+ 
| Latest time for depositing Basic           |  3.00 p.m. on 23 | 
| Entitlements and Excess CREST Open Offer   |             July | 
| Entitlements into CREST                    |                  | 
+--------------------------------------------+------------------+ 
| Latest time and date for splitting         |  3.00 p.m. on 26 | 
| Non-CREST Application Forms (to satisfy    |             July | 
| bona fide market claims)                   |                  | 
+--------------------------------------------+------------------+ 
| Latest time and date for receipt of Forms  | 10.00 a.m. on 27 | 
| of Proxy for General Meeting and receipt   |             July | 
| of electronic proxy appointments via the   |                  | 
| CREST system                               |                  | 
+--------------------------------------------+------------------+ 
| Latest time and date for receipt of        | 11.00 a.m. on 28 | 
| completed Non-CREST Application Forms and  |             July | 
| payment in full under the Open Offer or    |                  | 
| settlement of relevant CREST instruction   |                  | 
| (as appropriate)                           |                  | 
+--------------------------------------------+------------------+ 
| Expected time and date of announcement of  |  7.00 a.m. on 29 | 
| results of the Open Offer                  |             July | 
+--------------------------------------------+------------------+ 
| General Meeting                            | 10.00 a.m. on 29 | 
|                                            |             July | 
+--------------------------------------------+------------------+ 
| Expected time of announcement of results   |  By 4.30 p.m. on | 
| of the General Meeting                     |          29 July | 
+--------------------------------------------+------------------+ 
| Record date for the Capital Reorganisation |  6.00 p.m. on 29 | 
|                                            |             July | 
+--------------------------------------------+------------------+ 
| Admission of Enlarged Share Capital and    |  8.00 a.m. on 30 | 
| commencement of dealings on AIM            |             July | 
+--------------------------------------------+------------------+ 
| Expected date for CREST accounts to be     |          30 July | 
| credited                                   |                  | 
+--------------------------------------------+------------------+ 
| Despatch of share certificates by no later |         6 August | 
| than                                       |                  | 
+--------------------------------------------+------------------+ 
 
+--------------------+-----------------------------------------+ 
|                                                              | 
| Definitions                                                  | 
|                                                              | 
| The following words and expressions shall have the following | 
| meanings in this announcement unless the context otherwise   | 
| requires:                                                    | 
|                                                              | 
+--------------------------------------------------------------+ 
| "A Deferred        | the existing A deferred shares of 0.01p | 
| Shares"            | each in the capital of the Company      | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Act"              | the UK Companies Act 2006 (as amended)  | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Acquisition"      | the proposed acquisition by the Company | 
|                    | of the entire issued share capital of   | 
|                    | ALDHC, further details of which are set | 
|                    | out in the AIM Admission Document       | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Acquisition       | the conditional agreements dated 7 July | 
| Agreements"        | 2010 between (1) the Company; and (2)   | 
|                    | the Vendors, further details of which   | 
|                    | are set out in the AIM Admission        | 
|                    | Document                                | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Admission"        | admission of the Enlarged Share Capital | 
|                    | to trading on AIM and such admission    | 
|                    | becoming effective in accordance with   | 
|                    | Rule 6 of the AIM Rules                 | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "ALD"              | American Leak Detection, Inc., a        | 
|                    | company incorporated in California      | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "ALDHC"            | American Leak Detection Holding Corp.,  | 
|                    | a Delaware corporation and parent       | 
|                    | company of ALD                          | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "ALDHC Debt"       | the Rennick Notes and the Porter Note   | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "AIM"              | AIM, the market of that name operated   | 
|                    | by the London Stock Exchange            | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "AIM Admission     | the AIM admission document dated 7 July | 
| Document"          | 2010 issued by the Company              | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "AIM Rules"        | the AIM Rules for Companies published   | 
|                    | by the London Stock Exchange            | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Annual General    | the annual general meeting of the       | 
| Meeting"           | Company convened for 10.00 a.m. on 2    | 
|                    | August 2010                             | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Articles" or      | the articles of association of the      | 
| "Articles of       | Company to be adopted pursuant to       | 
| Association"       | Resolution 7 at the General Meeting, a  | 
|                    | summary of which is set out in          | 
|                    | paragraph 4 of Part VII in the AIM      | 
|                    | Admission Document                      | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "B Deferred        | the new deferred shares of 119p each    | 
| Shares"            | arising from the Capital Reorganisation | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Bank Facility"    | the bank facility from The Bank of      | 
|                    | Southern Conneticut, as described in    | 
|                    | paragraph 11.2.1 of Part VII of the AIM | 
|                    | Admission Document                      | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Basic             | an entitlement to apply to subscribe    | 
| Entitlement"       | for 11 Open Offer Shares for every      | 
|                    | 4,500 Existing Ordinary Shares held on  | 
|                    | the Record Date pursuant to the Open    | 
|                    | Offer and so in proportion for any      | 
|                    | other number of Existing Ordinary       | 
|                    | Shares held                             | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Board" or         | the existing directors of the Company   | 
| "Directors"        |                                         | 
+--------------------+-----------------------------------------+ 
| "Business Days"    | any day (excluding Saturdays, Sundays   | 
|                    | or public holidays) on which banks are  | 
|                    | open in London for normal banking       | 
|                    | business and the London Stock Exchange  | 
|                    | is open for trading                     | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Buyer"            | Qonnectis Acquisition Co., a wholly     | 
|                    | owned subsidiary of the Company         | 
|                    | incorporated in the State of Delaware   | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "BWGF"             | Blue Water and Green Fields. Inc. a     | 
|                    | Delaware corporation owned as to 20 per | 
|                    | cent. by ALD and 80 per cent. by Plain  | 
|                    | Sight                                   | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Capital           | the proposed consolidation and          | 
| Reorganisation"    | sub-division of every 1,200 Existing    | 
|                    | Ordinary Shares into one New Ordinary   | 
|                    | Share and one B Deferred Share          | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Capital           | 6.00 p.m. on 29 July 2010 (or such      | 
| Reorganisation     | later time and date as the Board (or    | 
| Record Date"       | duly authorised committee of the Board) | 
|                    | may determine)                          | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Capita            | a trading name of Capita Registrars     | 
| Registrars"        | Limited                                 | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "City Code" or     | the City Code on Takeovers and Mergers  | 
| "Code"             |                                         | 
+--------------------+-----------------------------------------+ 
 
+--------------------+-----------------------------------------+ 
| "Company" or       | Qonnectis plc, a public limited company | 
| "Qonnectis"        | registered in England and Wales under   | 
|                    | registered number 3923150               | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Concert Party"    | certain of the Vendors, as described on | 
|                    | page 20 of Part I of the AIM Admission  | 
|                    | Document                                | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Consideration     | up to 7,324,689 New Ordinary Shares to  | 
| Shares"            | be issued to the Vendors and the        | 
|                    | Remaining ALDHC Shareholders as         | 
|                    | consideration for the Acquisition       | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "CREST"            | the computer-based system established   | 
|                    | under the CREST Regulations which       | 
|                    | enables title to units of relevant      | 
|                    | securities (as defined in the CREST     | 
|                    | regulations) to be evidenced and        | 
|                    | transferred without a written           | 
|                    | instrument and in respect of which      | 
|                    | Euroclear UK & Ireland Limited is the   | 
|                    | operator (as defined in the CREST       | 
|                    | Regulations)                            | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "CREST Manual"     | the rules governing the operation of    | 
|                    | CREST, consisting of the CREST          | 
|                    | Reference Manual, CREST International   | 
|                    | Manual, CREST Central Counterparty      | 
|                    | Service Manual, CREST Rules, Registrars | 
|                    | Service Standards, Settlement           | 
|                    | Discipline Rules, CCSS Operations       | 
|                    | Manual, Daily Timetable, CREST          | 
|                    | Application Procedure and CREST         | 
|                    | Glossary of Terms (all as defined in    | 
|                    | the CREST Glossary of Terms)            | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "CREST member"     | a person who has been admitted by CREST | 
|                    | as a system-member (as defined in the   | 
|                    | CREST Manual)                           | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "CREST             | the Uncertificated Securities           | 
| Regulations"       | Regulations 2001 (SI 2001/3755) (as     | 
|                    | amended)                                | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "CREST sponsor"    | a CREST participant admitted to CREST   | 
|                    | as a CREST sponsor a CREST member       | 
|                    | admitted to CREST as a sponsored member | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Deferred Shares"  | the existing deferred shares of 1p each | 
|                    | in the capital of the Company           | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "DTR" or           | the Disclosure and Transparency Rules   | 
| "Disclosure and    | (in accordance with section 73A(3) of   | 
| Transparency       | FSMA) being the rules published by the  | 
| Rules"             | Financial Services Authority from       | 
|                    | time-to-time relating to the disclosure | 
|                    | of information in respect of financial  | 
|                    | instruments which have been admitted to | 
|                    | trading on a regulated market or for    | 
|                    | which a request for admission to        | 
|                    | trading on such a market has been made  | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Enlarged Group"   | the Company as enlarged by the          | 
|                    | Acquisition, to include ALDHC and its   | 
|                    | subsidiaries                            | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Enlarged Share    | the ordinary share capital of the       | 
| Capital"           | Company following Admission and the     | 
|                    | completion of the Acquisition and the   | 
|                    | Open Offer                              | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Excess            | the arrangement pursuant to which       | 
| Application        | Qualifying Shareholders may apply for   | 
| Facility"          | Open Offer Shares in excess of their    | 
|                    | Basic Entitlements                      | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
 
+--------------------+-----------------------------------------+ 
| "Excess CREST Open | in respect of each Qualifying CREST     | 
| Offer Entitlement" | Shareholder, the entitlement to apply   | 
|                    | for Open Offer Shares in addition to    | 
|                    | his Basic Entitlement credited to his   | 
|                    | stock account in CREST, pursuant to the | 
|                    | Excess Application Facility, which is   | 
|                    | conditional, inter alia, on him taking  | 
|                    | up his Basic Entitlement in full and    | 
|                    | which may be subject to scaling back in | 
|                    | accordance with the provisions of the   | 
|                    | AIM Admission Document                  | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Excess Open Offer | in respect of each Qualifying non-CREST | 
| Entitlement"       | Shareholder, the entitlement to apply   | 
|                    | for Open Offer Shares in addition to    | 
|                    | his Basic Entitlement pursuant to the   | 
|                    | Excess Application Facility, which is   | 
|                    | conditional, inter alia, on him taking  | 
|                    | up his Basic Entitlement in full and    | 
|                    | which may be subject to scaling back in | 
|                    | accordance with the provisions of the   | 
|                    | AIM Admission Document                  | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Excess Shares"    | the Open Offer Shares for which         | 
|                    | Qualifying Shareholders may apply in    | 
|                    | excess of their Basic Entitlement       | 
|                    | through the Excess Application Facility | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Excluded Overseas | other than as agreed in writing by the  | 
| Shareholder(s)"    | Company, MJES and as permitted by       | 
|                    | applicable law, Shareholders who are    | 
|                    | located or have registered addresses in | 
|                    | a Restricted Jurisdiction               | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Excluded          | the United States, Australia, Canada,   | 
| Territories"       | Japan and any other jurisdiction where  | 
|                    | the extension or availability of the    | 
|                    | Open Offer would breach any applicable  | 
|                    | law                                     | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Existing Ordinary | the 545,296,103 Ordinary Shares in      | 
| Shares"            | issue at the date of the AIM Admission  | 
|                    | Document                                | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Euroclear"        | Euroclear UK & Ireland Limited, a       | 
|                    | company registered in England and Wales | 
|                    | with registered number 2878738, the     | 
|                    | operator of CREST                       | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Form of Proxy"    | the form of proxy sent to Shareholders  | 
|                    | for use by Shareholders in connection   | 
|                    | with the General Meeting                | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "FSMA"             | the Financial Services and Markets Act  | 
|                    | 2000                                    | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "General Meeting"  | the general meeting of the Company, to  | 
|                    | be held at the offices of MJES, 51-55   | 
|                    | Gresham Street, London EC2V 7HQ on 29   | 
|                    | July 2010 at 10.00 a.m. and any         | 
|                    | adjournment thereof to be held for the  | 
|                    | purpose of considering and, if thought  | 
|                    | fit, passing the Resolutions            | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "HMRC"             | HM Revenue & Customs                    | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Independent       | Harry Offer and Barbara Spurrier        | 
| Directors"         |                                         | 
+--------------------+-----------------------------------------+ 
| "Irrevocable       | the undertaking by each of the          | 
| Undertakings"      | Independent Directors to vote in favour | 
|                    | of the Resolutions                      | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Issue Price"      | 75p per Offer Share                     | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Loan Notes"       | GBP295,000 principal of loan notes      | 
|                    | issued by the Company pursuant to an    | 
|                    | instrument dated 8 January 2010 and     | 
|                    | which are guaranteed by ALD             | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "London Stock      | London Stock Exchange plc               | 
| Exchange"          |                                         | 
+--------------------+-----------------------------------------+ 
 
+--------------------+-----------------------------------------+ 
| "Merger"           | the short form merger under the law of  | 
|                    | the State of Delaware which may be      | 
|                    | entered into to acquire any stock in    | 
|                    | ALDHC held by the Remaining ALDHC       | 
|                    | Shareholders                            | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "MJES"             | Merchant John East Securities Limited,  | 
|                    | the Company's nominated adviser and     | 
|                    | broker                                  | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Money Laundering  | the Money Laundering Regulations 2007   | 
| Regulations"       | (SI 2007/2 157)                         | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "New Board"        | Patrick DeSouza, Stanford Berenbaum,    | 
|                    | Harry Offer, Ric Piper, Michael Reisman | 
|                    | and Stephen Leeb                        | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "New Ordinary      | new ordinary shares of 1p each in the   | 
| Shares"            | capital of the Company arising from the | 
|                    | Capital Reorganisation                  | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Non-CREST         | the application form which accompanies  | 
| Application        | the AIM Admission Document for use by   | 
| Form"              | Qualifying Non-CREST Shareholders       | 
|                    | relating to applications for Open Offer | 
|                    | Shares (including in respect of Excess  | 
|                    | Shares under the Excess Application     | 
|                    | Facility)                               | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Notice"           | the notice convening the General        | 
|                    | Meeting                                 | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Open Offer"       | the invitation to Qualifying            | 
|                    | Shareholders to subscribe for Open      | 
|                    | Offer Shares at the Issue Price on the  | 
|                    | terms and subject to the conditions set | 
|                    | out or referred to in Part III of the   | 
|                    | AIM Admission Document and, where       | 
|                    | relevant, in the Non-CREST Application  | 
|                    | Form                                    | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Open Offer        | up to 1,332,946 New Ordinary Shares for | 
| Shares"            | which Qualifying Shareholders are being | 
|                    | invited to apply under the terms of the | 
|                    | Open Offer                              | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Options" or       | options to subscribe for New Ordinary   | 
| "Share Options"    | Shares under the Share Option Scheme    | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Ordinary Shares"  | ordinary shares of 0.1p each in the     | 
|                    | capital of the Company                  | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Overseas          | Shareholders who are located or         | 
| Shareholders"      | resident in, or who are citizens of, or | 
|                    | who have registered addresses in,       | 
|                    | territories other than the United       | 
|                    | Kingdom                                 | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Panel"            | the Panel on Takeovers and Mergers      | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Plain Sight"      | Plain Sight Systems, Inc., a principal  | 
|                    | shareholder of ALDHC                    | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Porter Note"      | a promissory note dated 18 December     | 
|                    | 2009 issued by BWGF in favour of Porter | 
|                    | Capital Corporation in the amount of    | 
|                    | $350,987 which is described at          | 
|                    | paragraph 11.4 of Part VII of the AIM   | 
|                    | Admission Document                      | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Proposals"        | means (a) the Capital Reorganisation;   | 
|                    | (b) the Acquisition; (c) the Open       | 
|                    | Offer; (d) the Waiver; (e) the change   | 
|                    | of name of the Company; and (f)         | 
|                    | Admission                               | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Proposed          | Ric Piper, Michael Reisman and Stephen  | 
| Directors"         | Leeb, the proposed directors of the     | 
|                    | Company and whose appointments will     | 
|                    | become effective on Admission           | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Qualifying CREST  | Qualifying Shareholders whose Existing  | 
| Shareholders"      | Ordinary Shares on the register of      | 
|                    | members of the Company at the close of  | 
|                    | business on the Record Date are in      | 
|                    | uncertificated form                     | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Qualifying        | Qualifying Shareholders whose Existing  | 
| non-CREST          | Ordinary Shares on the register of      | 
| Shareholders"      | members of the Company at the close of  | 
|                    | business on the Record Date are in      | 
|                    | certificated form                       | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Qualifying        | holders of Existing Ordinary Shares on  | 
| Shareholders"      | the Company's register of members at    | 
|                    | the Record Date (other than certain     | 
|                    | Overseas Shareholders)                  | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
 
+--------------------+-----------------------------------------+ 
| "Receiving Agent"  | Capita Registrars, Corporate Actions,   | 
|                    | The Registry, 34 Beckenham Road,        | 
|                    | Beckenham, Kent BR3 4TU                 | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Record Date"      | close of business on 2 July 2010        | 
+--------------------+-----------------------------------------+ 
| "Remaining ALDHC   | those shareholders of ALDHC whose stock | 
| Shareholders"      | may be acquired pursuant to the Merger  | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Rennick Notes"    | the two promissory notes delivered by   | 
|                    | ALDHC and Plain Sight to The Rennick    | 
|                    | Living Trust on 26 February 2006 in an  | 
|                    | aggregate amount of $6.2 million which  | 
|                    | is described at paragraph 11.2.2 of     | 
|                    | Part VII of the AIM Admission Document  | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Resolutions"      | the resolutions set out in the Notice   | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Restricted        | each of Australia, Canada, Japan, New   | 
| Jurisdiction(s)"   | Zealand, The Republic of South Africa,  | 
|                    | The Republic of Ireland and the United  | 
|                    | States                                  | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Share Option      | the Company's existing share option     | 
| Scheme"            | scheme, a summary of which is set out   | 
|                    | in paragraph 9 of Part VII of the AIM   | 
|                    | Admission Document                      | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Shareholders"     | holder(s) of Existing Ordinary Shares,  | 
|                    | all of whom are deemed to be            | 
|                    | independent for the purposes of the     | 
|                    | Code                                    | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "UK" or "United    | the United Kingdom of Great Britain and | 
| Kingdom"           | Northern Ireland                        | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "UKLA"             | the Financial Services Authority acting | 
|                    | in its capacity as the competent        | 
|                    | authority for the purposes Part VI of   | 
|                    | FSMA                                    | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "uncertificated"   | an Ordinary Share recorded on the       | 
| or "in             | Company's register as being held in     | 
| uncertificated     | uncertificated form in CREST and title  | 
| form"              | to which, by virtue of the CREST        | 
|                    | Regulations, may be transferred by      | 
|                    | means of CREST                          | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Underwriting      | the conditional agreement dated 7 July  | 
| Agreement"         | 2010, between (1) the Company, (2) the  | 
|                    | Directors and the Proposed Directors,   | 
|                    | (3) Plain Sight and (4) MJES relating   | 
|                    | to the Open Offer, details of which are | 
|                    | set out in paragraph 11.1.7 of Part VII | 
|                    | of the AIM Admission Document           | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "US" OR "United    | the United States of America            | 
| States"            |                                         | 
+--------------------+-----------------------------------------+ 
| "USE instruction"  | has the meaning given in the CREST      | 
|                    | Manual                                  | 
+--------------------+-----------------------------------------+ 
| "Vendors"          | the Concert Party (whose details are    | 
|                    | set out in Part I of the AIM Admission  | 
|                    | Document) (other than James Carter and  | 
|                    | Pam Vigue) and such other shareholders  | 
|                    | of ALDHC who become parties to the      | 
|                    | Acquisition Agreements prior to         | 
|                    | Admission                               | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "Waiver"           | the waiver by the Panel of obligations  | 
|                    | under Rule 9 of the City Code as        | 
|                    | described in Part I of the AIM          | 
|                    | Admission document                      | 
|                    |                                         | 
+--------------------+-----------------------------------------+ 
| "$"                | US dollars, the lawful currency of the  | 
|                    | United States                           | 
+--------------------+-----------------------------------------+ 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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