Proposed Subscription

RNS Number:6521B
TradingSports Exchange Systems PLC
05 August 2004


                       TRADINGSPORTS EXCHANGE SYSTEMS PLC

                       ("TradingSports" or "the Company")


 Proposed Subscription for 30,000,000 Subscription Shares at a price of 15p per
                                     share


Introduction and summary


The Board announced today, together with the Company's unaudited interim results
for the six months ended 30 June 2004, a proposal to raise #4.5 million (before
expenses) by way of a Subscription for 30,000,000 Subscription Shares at a price
of 15p per Subscription Share. The net proceeds of the Subscription will
strengthen the Company's balance sheet and provide it with additional working
capital for the continuation of its business as described below.


The Subscription is conditional, inter alia, upon the Company obtaining approval
from its

Shareholders to increase its authorised share capital, to disapply statutory
pre-emption rights and to grant the Board authority to allot the Subscription
Shares. The Subscription is also conditional upon Admission.


Subscription Shares will be subscribed by a number of institutional and other
investors, including Mr Terry Ramsden. In addition Mr Ray Ranson has
conditionally committed to subscribe for 2,000,000 Subscription Shares raising
#300,000. The Subscription Shares will, when issued, rank pari passu with the
Existing Shares.


Shareholders should be aware that if the Subscription does not proceed, the
Company will not have sufficient working capital for its present requirements
and the Directors may have to place the Company into administration or
liquidation.


Key points


* Subscription for 30,000,000 Subscription Shares to raise
#4.5 million (before expenses);

* Subscription price of 15p represents a discount of
approximately 70.6 per cent. to the closing middle market price on 4 August 2004
(being the latest practicable date before the announcement of the Subscription);

* Subscription Shares subscribed by a number of institutional
and other investors;

* Subscription proceeds will strengthen the balance sheet,
assist the Company in implementing its revised business strategy and provide
general working capital; and

* Change of Company name from TradingSports Exchange Systems
plc to The Trading Exchange plc.


Background to and reasons for the Subscription


On 7 July 2004, the Company announced that the Board had asked Roger Mitchell,
when he accepted the role of CEO, to undertake a full strategic review of the
Company's business. The Company's original business model is currently not
performing as was expected at the time of the Company's flotation on AIM in May
2003. The Board announced that it was also reviewing the Company's future
funding requirements and would be examining all options in this regard. The
Board is now able to inform Shareholders, and seek their approval, of the
proposals arising out of these reviews.


The Directors have explored a variety of strategic alternatives to address the
immediate and future funding requirements of the Company. In view of the current
financial position of the Company, the Directors have concluded that the
Subscription is the option which is in the best interests of the Company and
Shareholders as a whole. The Subscription is designed to ensure that the Company
has sufficient working capital to fund the next stage of its development.


Shareholders should be aware that if the Subscription does not proceed, the
Company will not have sufficient working capital for its present requirements
and the Directors may have to place the Company into administration or
liquidation.


The Board has decided to effect the fundraising by way of the Subscription
following a limited marketing exercise, rather than offering all Shareholders
the opportunity to acquire shares in an offer, as the Board considered that the
time taken to produce a prospectus might adversely have affected the Company's
ability to raise the required funds within the required timescale.


Details of the Subscription


As stated above, the Company proposes to raise #4.5 million (before expenses)
through the issue of the Subscription Shares at the Subscription Price, which
represents approximately a 70.6 per cent. discount to the closing middle market
price of 51p per Existing Share as at 4 August 2004, being the last practicable
date prior to the announcement of the Subscription.


The 30,000,000 Subscription Shares will be subscribed for by a number of
institutional and other investors. The largest investor will be Mr Terry
Ramsden. Mr Ramsden will subscribe 5,000,000 Subscription Shares and will hold
12.05 per cent. of the enlarged issued share capital. Based on preliminary
discussions, the Board anticipates that Mr Ramsden will work closely with it to
identify and pursue business opportunities that will be of benefit to the
Company. As a condition of his participation in the Subscription, Mr Ramsden has
also been granted, conditional on Shareholder approval, an option to subscribe
for up to 7,448,236 Ordinary Shares, being such number of shares as would,
assuming its exercise in full, take his total shareholding (including the
Subscription Shares for which he has agreed to subscribe) to 29.9 per cent. of
the issued Ordinary Share capital of the Company as enlarged by the
Subscription. This option will be exercisable for a period of 1 year following
Admission at 25p per share, which represents a 66.7 per cent. premium over the
Subscription Price.


The Subscription is conditional, inter alia, on the passing of the Resolutions
at the EGM and Admission becoming effective. Application will be made to the
London Stock Exchange for the Subscription Shares to be admitted to trading on
AIM. It is expected that such Admission will occur on 1 September 2004.


Interim Results


The Interim Results were also announced on 5 August 2004.


Strategy


The returns currently being achieved by the Company from its original "revenue
share only" business model are less than were expected at the time of the
Company's flotation on AIM in May 2003. Consequently, in its future activities,
the Company intends to achieve a greater balance than presently exists between
development, maintenance and the running of the exchanges for its partners.


Change of name


The Board also believes that a change of Company name is appropriate, both to
eliminate the inference that the Company is specifically sports orientated and
to reflect more accurately where the Company's likely activities will lie. It is
the nature of these proposed activities that gives rise to the proposed new
Company name, "The Trading Exchange plc". A special resolution to effect this
change will be proposed at the EGM.


Irrevocable undertakings


The Company has received irrevocable undertakings to vote in favour of the
Resolutions set out in the EGM Notice in respect of holdings amounting to, in
aggregate, 4,108,900 Ordinary Shares, representing approximately 35.7 per cent.
of the current issued share capital.


New directors


Following the completion of the Subscription, the Company is proposing to invite
the incoming investors to nominate up to two new directors of the Company.
Further announcements will be made in due course.


Other


Words and expressions used in this announcement, unless otherwise defined, shall
have the meanings given to them in the circular dated 5 August 2004.


5 August 2004


For further information:

TradingSports Exchange Systems plc                         Tel: [phone]
                                                                          
Roger Mitchell, Chief Executive Officer







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