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DFX Defenx Plc

1.60
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Defenx Plc LSE:DFX London Ordinary Share GB00BYNF4J61 ORD GBP0.018
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 1.60 0.50 2.70 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Defenx plc Placing, Subscription & Issue of Convertible Bonds (2204N)

07/08/2017 7:01am

UK Regulatory


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RNS Number : 2204N

Defenx plc

07 August 2017

THIS ANNOUNCEMENT, INCLUDING THE APPIX TO THIS ANNOUNCEMENT, AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, REPUBLIC OF IRELAND, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT, INCLUDING THE APPIX TO THIS ANNOUNCEMENT, IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT AND THE APPIX DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES OF DEFENX PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

7 August 2017

Defenx PLC

("Defenx" or the "Company")

Proposed Placing and Subscription to raise approximately GBP1.37 million at 160 pence per share

Issue of Secured Convertible Bonds to raise up to GBP2 million

Defenx PLC (AIM:DFX), the cyber-security software group, is pleased to announce a proposed Fundraising to raise up to approximately GBP3.37 million (before expenses) comprising approximately GBP1.12 million under a Placing and GBP0.25 million under a Subscription by BV Tech at a price of 160 pence per share, and up to GBP2 million through the issue of Secured Convertible Bonds.

Highlights:

-- Proposed Placing of approximately GBP1.12 million before expenses at a price of 160 pence per share

   --      Subscription by BV Tech for up to GBP250,000 at a price of 160 pence per share 

-- Placing being conducted through an accelerated book build process which will open with immediate effect following this announcement and is intended to close at 7.30 a.m.

-- In addition, the Company has granted the Broker Option to WH Ireland so as to raise up to a further GBP450,000 before expenses in order to enable WH Ireland to deal with additional demand received after the closing of the accelerated book build process

   --      Proceeds to be used to accelerate the Group's growth plans, as further detailed below 

-- Placing Price represents a discount of approximately 13.75 per cent to the closing mid-market price of Defenx's existing ordinary shares of 185.5 pence on 4 August 2017

-- Placing and Subscription Shares, assuming full take-up, will represent approximately 7.2 per cent. of the Company's existing issued share capital

   --      Further details of the Placing are set out in the appendix to this announcement 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 
 Date of publication of                  7 August 2017 
  this announcement 
 Expected date for Admission            11 August 2017 
  of the Placing Shares 
 CREST accounts to be                   11 August 2017 
  credited for Placing 
  Shares in uncertificated 
  form 
 Secured Convertible Bond       9.00 a.m. on 14 August 
  auction opens                                   2017 
 Latest time and date          12.00 p.m. on 21 August 
  for receipt of Forms                            2017 
  of Proxy 
 General Meeting               12.00 p.m. on 23 August 
                                                  2017 
 Expected latest date                   24 August 2017 
  for posting of share 
  certificates for Placing 
  Shares 
 Secured Convertible Bond       4.30 p.m. on 30 August 
  auction closes                                  2017 
 Issue of the Secured                   31 August 2017 
  Convertible Bonds 
 Expected date for admission          1 September 2017 
  of the Subscription Shares 
 

Each of the times and dates above are indicative only and refer to London time and are subject to change. Any such change will be notified by an announcement on a Regulatory Information Service.

There is a pre--auction period, commencing on or around the date of this announcement, for Eligible Investors to review the offering of Secured Convertible Bonds, followed by a two week live auction period, at the end of which the final Convertible Bond Issue size and coupon will be determined.

Additional information on the Fundraising is included below. Attention is also drawn to the section headed 'Important Notice' and to the Appendix to this Announcement containing, inter alia, the terms and conditions of the Placing (representing important information for Placees only). The number of Placing Shares to be issued in connection with the Placing will be determined by WH Ireland at the close of the Bookbuild process, and the results of the Placing will be announced as soon as practicable thereafter. The timing of the closing of the book, pricing and allocations is at the absolute discretion of WH Ireland.

Terms used but not defined in this Announcement shall have the meanings given to such terms in the Definitions section of, otherwise in the text of, the Appendix to this Announcement.

Enquiries

 
 Defenx PLC 
  Andrea Stecconi - Chief Executive 
  Officer 
  Philipp Prince - Chief Financial 
  Officer                                    020 3769 0687 
 IFC Advisory (Financial PR and 
  IR) 
  Tim Metcalfe / Graham Herring 
  / Heather Armstrong                        020 3053 8671 
 Strand Hanson Limited (Nominated 
  and Financial Adviser) 
  Angela Hallett / Richard Tulloch 
  / Ritchie Balmer                           020 7409 3494 
 WH Ireland (Bookrunner and Joint-Broker) 
  Bookrunning queries: Melvyn Brown 
  / David Kilbourn 
  Corporate finance queries: Paul 
  Shackleton / Jessica Cave / James 
  Sinclair Ford                              020 7220 1666 
 Beaufort Securities (Joint-Broker) 
  Jon Belliss                                020 7382 8300 
 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").

Important Notice

MAR became effective from 3 July 2016. Market soundings, as defined in MAR, were taken in respect of the Placing with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this Announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.

This Announcement does not constitute a prospectus for the purposes of the Prospectus Rules of the Financial Conduct Authority, nor does it comprise an admission document prepared in accordance with the AIM Rules. Accordingly, this Announcement has not been approved by or filed with the Financial Conduct Authority.

This Announcement must not be distributed to a US Person (as such term is defined in Rule 902 of Regulation S under the US Securities Act of 1933, as amended (the "Securities Act")) or within or into the United States, Canada, Japan, South Africa, the Republic of Ireland or Australia. Neither the Ordinary Shares nor the Secured Convertible Bonds have been and will not be registered under the Securities Act, and may not be offered or sold or subscribed, directly or indirectly, within the United States, Canada, Japan, South Africa, the Republic of Ireland or Australia or to or by any US Person or any national, resident or citizen of Canada, Japan, the Republic of South Africa, the Republic of Ireland or Australia or any corporation, partnership or other entity created or organised under the laws thereof.

Strand Hanson Limited ("Strand Hanson"), which is a member of the London Stock Exchange and is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as Financial and Nominated Adviser to the Company in connection with the Placing and Subscription and is not acting for any other person and will not be responsible to any person other than the Company for providing the protections afforded to clients of Strand Hanson.

WH Ireland Limited ("WH Ireland") which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for Defenx plc and no-one else in connection with the Placing. WH Ireland will not regard any other person (whether or not a recipient of this Announcement) as its client or be responsible to any other person for providing the protections afforded to clients of WH Ireland nor for providing advice in relation to the transactions and arrangements described in this Announcement. WH Ireland is not making any representation or warranty, express or implied, as to the contents of this Announcement. WH Ireland has not approved the contents of, or any part of, this Announcement and no liability whatsoever is accepted by WH Ireland for the accuracy of any information or opinions contained in this Announcement or for the omission of any information from this Announcement.

Past performance is not a guide to future performance.

Forward Looking Statements

This Announcement contains forward-looking statements. These statements relate to the Group's future prospects, developments and business strategies. Forward-looking statements are identified by their use of terms and phrases such as "potential", "estimate", "expect", "may", "will" or the negative of those, variations or comparable expressions, including references to assumptions. The forward-looking statements in this Announcement are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. These forward-looking statements speak only as at the date of this Announcement. No statement in this Announcement is intended to constitute a profit forecast or profit estimate for any period. Neither the Directors nor the Group undertake any obligation to update forward-looking statements or risk factors other than as required by the AIM Rules or by the rules of any other securities regulatory authority, whether as a result of new information, future events or otherwise.

Defenx PLC

Placing, Subscription and issue of Secured Convertible Bonds to raise up to approximately GBP3.37 million

Additional Information

   1.         Introduction 

Defenx plc (AIM:DFX), the cyber-security software group, is pleased to announce its intention to conduct a placing of approximately 700,000 new ordinary shares of GBP0.018 each in the Company (the "Placing Shares"), at a price of 160 pence per Placing Share ("Placing Price"), to raise approximately GBP1.12 million (before expenses) (the "Placing") and the intention of an existing shareholder of the Company, BV Tech ("BV Tech") to subscribe for up to an additional 156,250 new ordinary shares of GBP0.018 each at the Placing Price to raise up to an additional GBP250,000.

The Company is also proposing to issue secured convertible bonds ("Secured Convertible Bond") to raise up to GBP2 million ("Convertible Bond Issue"). The Convertible Bond Issue is subject to, inter alia, the receipt of shareholder approval of the necessary resolutions at a general meeting of the Company, notice of which is to be dispatched on or about the date of this Announcement. If the requisite resolutions are not passed, the Convertible Bond Issue will not proceed.

The Placing Shares are being offered by way of an accelerated bookbuilding process (the "Bookbuild"), which will be launched immediately following this Announcement in accordance with the terms and conditions set out in the Appendix to this Announcement. WH Ireland Limited ("WH Ireland") will be acting as sole bookrunner in connection with the Bookbuild. A further announcement will be made to confirm the completion of the Bookbuild in due course.

   2.         Background to and reasons for the Fundraising and use of net proceeds 

The Company intends to use the net proceeds from the Fundraising to invest in its product portfolio, and its delivery and sales capability over the next 12 months to accelerate growth in existing and corporate markets.

The Directors believe that with recent high-profile cyber attacks, such as the WannaCry ransomware attack, cyber security is becoming a higher-priority board level issue for companies to address and as such the corporate market is a significant opportunity for the Company. The impact of ransomware on business and the challenges of protecting mobile devices in the workplace, together with the implementation of the EU General Data Protection Regulation ("GDPR") in May 2018, are set to drive corporate investment in cyber security. The Company is keen to capitalise on this current positive market sentiment in order to raise additional funds to build on its existing IP base, to better leverage its value, and to accelerate growth into corporate and non-Italian markets which is expected to de-risk future revenues.

The funds raised from the Fundraising will be used to invest in the Company's product portfolio, broaden the development and operations teams to support the Group's products, and enhance the Group's sales capacity, focusing particularly on the corporate sector. The Company's strategic partnership with BV Tech is expected to provide access to corporate customers to whom the expanded product portfolio can be sold.

The Company intends to use the proceeds from the Fundraising to accelerate software development spend, including:

-- the development of corporate versions of its consumer products e.g. enterprise security suite and mobile device management;

   --      building on Memopal Srl's 'MGFS' technology e.g. end-2-end encrypted cloud backup; 
   --      building privacy protection into its products e.g. addressing GDPR requirements; 
   --      adding features and integrating products to provide 360deg protection; 
   --      accelerating the update cycle of its most popular mobile products; and 
   --      building/acquiring complementary new functionality. 
   3.         Details of the Placing 

The Placing Shares will be offered by way of an accelerated bookbuilding process which will launch immediately following this Announcement. The Placing Price represents a discount of approximately 13.75 per cent. to the closing middle market price of 185.5 pence per Ordinary Share on 4 August 2017, being the Latest Practicable Date.

The New Ordinary Shares to be issued pursuant to the Placing will be conditionally placed by WH Ireland, as agent of the Company, with certain existing Shareholders and new institutional and other investors pursuant to the Placing Agreement. The Placing is not conditional on the passing of any of the Resolutions, although it is conditional, inter alia, on Admission and the Subscription Agreement being entered into.

In addition, the Company has also granted the Broker Option to WH Ireland order to enable WH Ireland to deal with additional demand under the Placing, following the closing of the Bookbuild where requests to participate in the Placing from institutional investors and certain other investors are received during the period from such closing to 4.30 p.m. on the date of this Announcement. The Broker Option is exercisable on more than one occasion at any time prior to 4.30 p.m. on the date of this Announcement. Any Ordinary Shares issued pursuant to the exercise of the Broker Option will be issued on the same terms and conditions as the Placing Shares placed under the Bookbuild. The Broker Option may be exercised by WH Ireland, following consultation with the Company, but there is no obligation on WH Ireland to exercise the Broker Option or to seek to procure subscribers for Ordinary Shares pursuant to the Broker Option. The maximum number of new Ordinary Shares that may be issued under the Placing, including pursuant to the exercise of the Broker Option, is 981,250. Accordingly, the maximum number of Ordinary Shares that may be issued under the Broker Option (assuming 700,000 Ordinary Shares are subscribed under the Bookbuild) is 281,250.

Under the terms of the Placing Agreement, WH Ireland will receive commission from the Company conditional on Admission and the Company will give customary warranties and undertakings to WH Ireland in relation, inter alia, to its business and the performance of its duties.

In addition, the Company has agreed to indemnify WH Ireland in relation to certain liabilities that they may incur in undertaking the Placing. WH Ireland has the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, in the event that there has been, inter alia, a material breach of any of the warranties. The Placing is not being underwritten.

Following the issue of the New Ordinary Shares, the Company is expected to have approximately 12,719,042 Ordinary Shares in issue (assuming no exercise of the Broker Option) and there are no shares held in treasury.

The New Ordinary Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares of the Company, including the right to receive all dividends or other distributions made, paid or declared in respect of such shares after the date of issue of the New Ordinary Shares.

   4.         Details of the Subscription 

BV Tech has indicated that it intends to subscribe for up to 156,250 New Ordinary Shares at the Placing Price pursuant to the Subscription, assuming the full funds are raised under the Placing. The Subscription is taking place on the same terms and conditions as the Placing, other than in respect of settlement. BV Tech currently holds 3,480,388 Ordinary Shares representing 29.34 per cent. of the Existing Ordinary Shares. Following admission of the Subscription Shares, BV Tech will hold up to 3,636,638 Ordinary Shares representing 28.59 per cent. of the Enlarged Share Capital, assuming the full funds are raised under the Placing and Subscription. In the event that the full funds are not raised under the Placing, the Subscription may be reduced to ensure that BV Tech's resultant shareholding in the Company is less than than 30 per cent.. The Subscription is conditional upon the completion of the Placing and if the Placing does not proceed for whatever reason, then the Subscription will also not proceed.

BV Tech is a related party of the Company for the purposes of the AIM Rules by virtue of its status as a substantial shareholder of the Company, therefore the participation by BV Tech in the Subscription is a related party transaction under the AIM Rules. The independent Directors, being the Directors other than Raffaele Boccardo and Franco Francione, consider, having consulted with the Company's nominated adviser, Strand Hanson Limited, that the terms of the Subscription by BV Tech, reflecting those of the Placing, are fair and reasonable insofar as the Company's shareholders are concerned.

   5.         Details of the Secured Convertible Bonds 
   (a)        Summary 

The Company is proposing to raise up to GBP2 million pursuant to the Convertible Bond Issue, with the final amount to be determined by the auction process. Of this amount, UK Bond Network has procured that GBP1.25 million of the Convertible Bond Issue has been underwritten pursuant to the Bond Underwriting Commitment.

The Bonds will pay a coupon of between 8 per cent. and 10 per cent., with the exact rate being determined by participating bond investors through UK Bond Network's auction process. Interest under the Secured Convertible Bonds will be payable quarterly.

The Secured Convertible Bonds will be convertible into Ordinary Shares at the Conversion Price of 200 pence per Ordinary Share, being a 25 per cent. premium to the Placing Price.

The auction process to be carried out in connection with the Convertible Bond Issue will be carried out by UK Bond Network, as agent of the Company, using its designated website auction platform. There will be a pre-auction period commencing on or around the date of this Announcement for Eligible Investors to review the Secured Convertible Bonds offering, followed by a live auction period commencing at 9.00 a.m. on 14 August 2017 and finishing at 4.30 p.m. on 30 August 2017.

Eligible Investors will be the only investors eligible to participate in the Convertible Bond Issue. Eligible Investors will be required to self-certify themselves, in accordance with the procedure required under FSMA, as being an investor falling into one of these categories before participating. Eligible Investors who wish to participate will need to register as a member of UK Bond network's platform (www.ukbondnetwork.com).

   (b)        Terms of the Secured Convertible Bonds 

The Company will create and authorise the issue of up to GBP2 million unlisted Secured Convertible Bonds (in multiples of GBP1 each) by entering into the Convertible Bond Instrument upon completion of the auction. The Secured Convertible Bonds will mature and be due for repayment in full on 31 August 2020. At the option of the Company, the Secured Convertible Bonds may be repaid fully or partially at any time on or after 31 August 2019 (being the second anniversary of the date of the Convertible Bond Instrument), subject to the share price being at least 130 per cent. of the Conversion Price for 20 consecutive Dealing Days.

The Company, Defenx SA, Memopal Srl and the Security Trustee will enter into an all assets debenture and guarantee and a security trust deed (each in customary form) to provide security in respect of the Secured Convertible Bonds.

The full amount of principal under the Secured Convertible Bonds, together with any interest accrued on them, may, at the option of the Security Trustee (acting in its capacity as the Bondholders' trustee), become immediately due and repayable if an "Event of Default" occurs and is continuing. The Events of Default set out in the conditions to the Convertible Bond Instrument include, inter alia, late payment of any sum due under the Secured Convertible Bonds, or the insolvent liquidation of the Company.

The Secured Convertible Bonds accrue interest daily, payable in quarterly instalments by the Company. The rate at which interest will accrue will be between 8 per cent. and 10 per cent. per annum with the exact interest rate payable to be determined through the auction process conducted by UK Bond Network.

Each Bondholder will receive a certificate recording the details of their Secured Convertible Bonds and, at any time before the Secured Convertible Bonds mature, Bondholders will have the right to convert the principal amounts of their Secured Convertible Bonds then outstanding into Ordinary Shares.

The Conversion Price represents a 25 per cent. premium to the Placing Price. However, the conditions attached to the Convertible Bond Instrument set out a number of different circumstances in which this Conversion Price may be adjusted, including in the event of any share capital reorganisation affecting the Ordinary Shares, or if an Event of Default or a Takeover Offer occurs. Accordingly, as at the date of this Announcement, it is not possible to ascertain exactly what effect any conversion of the Secured Convertible Bonds may have on the interests of Shareholders, because the Conversion Price (and therefore the number of Ordinary Shares into which the Secured Convertible Bonds convert) may be subject to change. However, for illustrative purposes only, if the maximum amount of GBP2 million is raised by the Convertible Bond Issue, and each Bondholder were to convert their entire holding of Secured Convertible Bonds into Ordinary Shares, then based upon the current Conversion Price the Company would need to allot and issue 1,000,000 Ordinary Shares in satisfaction of such a conversion.

The Company gives certain customary representations, warranties, covenants and undertakings to the Bondholders under the terms of the Convertible Bond Instrument and the associated security documents, including as to matters relating to the Group and its business.

   (c)         Terms of the Bond Placing Agreement 

Under the terms of the Bond Placing Agreement, for the purpose of procuring Eligible Investors who will subscribe for the Secured Convertible Bonds, UK Bond Network has agreed to make available to the Company its website platform, upon which the auction of the Secured Convertible Bonds to Eligible Investors is to be conducted.

Under the terms of the Bond Placing Agreement, completion of the Convertible Bond Issue is conditional, inter alia, upon the requisite resolutions being passed at the General Meeting referred to below under the heading "Notice of General Meeting".

This means that unless such conditions are satisfied, the Convertible Bond Issue will not complete.

The Bond Placing Agreement incorporates the customary representations and warranties given by the Company under the Convertible Bond Instrument, including as to matters relating to the Group and its business. The Bond Placing Agreement also contains customary rights of termination which could enable UK Bond Network to terminate the Bond Placing Agreement in certain circumstances.

The Secured Convertible Bonds have not been made available to the public and have not been offered or sold in any jurisdiction where it would be unlawful to do so.

   (d)        Terms of the Bond Underwriting Commitment 

Pursuant to the terms of the Bond Underwriting Commitment, UK Bond Network has procured that GBP1.25 million of the Convertible Bond Issue has been underwritten, subject to certain conditions.

The Directors consider the terms of the Convertible Bond Issue to be appropriate in view of the reasons for the Fundraising and use of net proceeds as described above.

   6.         Current trading and outlook 

As announced on 22 June 2017, year-to-date trading remains in line with management expectations.

As seen in previous years, the Group's business is heavily seasonal with the majority of billings falling towards the end of the year, whereas certain costs, notably marketing contributions, are higher in the first half of the year. Whilst the Directors believe that the strategic partnership with BV Tech will, in time, reduce this seasonality, the Company's results for 2017 are inevitably dependent on billings in the second half of 2017 and driven predominately by the existing core business.

The Company and BV Tech are at an advanced stage of negotiations on a master services agreement ("MSA") pursuant to which BV Tech will (once entered into) develop software for Defenx, which alongside the software distribution contract announced on 22 June 2017, forms part of the strategic partnership between both parties as envisaged at the time of BV Tech's initial investment. The MSA will constitute a related party transaction under the AIM Rules once entered into and further announcements will be made in this regard as appropriate.

The core business, which is focused on the distribution of mobile and PC security software to the Group's channel partners, is maturing and new channel partners - including Multi Time Srl and Arnavalle Telecommunications SL announced on 3 July 2017 - and products are now starting to support future growth. Meanwhile, the sales and technical teams are making good progress with BV Tech, with whom a promising pipeline of opportunities is developing.

Accordingly, the Directors remain confident that Defenx's diversification into the corporate market, supported by BV Tech, will yield significant profitable growth over the medium term and that the results for 2017 will remain in line with expectations.

   7.         Notice of General Meeting 

A notice convening a general meeting of the Company "General Meeting" to be held at the offices of Taylor Vinters LLP, Tower 42, 33rd Floor, 25 Old Broad Street, London EC2N 1HQ on 23 August 2017 at 12.00 p.m., at which resolutions authorising the Convertible Bond Issue and giving the Directors general authorities to allot shares will be proposed, will be dispatched shortly.

   8.         Irrevocable undertakings 

BV Tech, Andrea Stecconi, Philipp Prince, Anthony Reeves and Leonard Seelig are expected to provide irrevocable undertakings to vote in favour of the resolutions to be proposed at the General Meeting ("Resolutions") in respect of their own beneficial holdings of, in aggregate, 5,434,729 Existing Ordinary Shares, in aggregate representing approximately 45.81 per cent. of the Existing Ordinary Shares.

   9.         Admission, Settlement and CREST 

Application will be made to the London Stock Exchange for the admission of the New Ordinary Shares to trading on AIM. It is expected that Admission of the Placing Shares will become effective at 8.00 a.m. on 11 August 2017 and that dealings in the Placing Shares will commence at that time. It is expected that admission of the Subscription Shares will become effective by 8.00 a.m. on 1 September 2017 and that dealings in the Subscription Shares will commence at that time.

The Articles permit the Company to issue shares in uncertificated form. CREST is a computerised paperless share transfer and settlement system which allows shares and other securities to be held in electronic rather than paper form. The Ordinary Shares are already admitted to CREST and therefore the New Ordinary Shares will also be eligible for settlement in CREST.

   10.      Directors' recommendation 

The Directors consider the passing of the Resolutions and the completion of the Proposals to be in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors recommend that all Shareholders vote in favour of the Resolutions.

APPIX

TERMS AND CONDITIONS OF THE PLACING

THIS ANNOUNCEMENT, INCLUDING THIS APPIX (TOGETHER, THE "ANNOUNCEMENT") AND THE INFORMATION IN IT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS APPIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS WHO ARE IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA AND ARE, UNLESS OTHERWISE AGREED BY WH IRELAND, "QUALIFIED INVESTORS" AS DEFINED IN ARTICLE 2.1(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE"); AND (B) IN THE UNITED KINGDOM, PERSONS WHO ARE: (I) "INVESTMENT PROFESSIONALS" WITHIN THE MEANING OF ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

THIS ANNOUNCEMENT IS NOT AN OFFER FOR SALE OR SUBSCRIPTION IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT IS NOT AN OFFER OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR AS PART OF A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES HAS APPROVED OR DISAPPROVED OF AN INVESTMENT IN THE SECURITIES OR PASSED UPON ORORSED THE MERITS OF THE PLACING OR THE ACCURACY OR ADEQUACY OF THE CONTENTS OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES. NO PUBLIC OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO THE LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES. THE PRICE OF ORDINARY SHARES AND THE INCOME FROM THEM (IF ANY) MAY GO DOWN AS WELL AS UP AND INVESTORS MAY NOT GET BACK THE FULL AMOUNT INVESTED ON DISPOSAL OF ORDINARY SHARES.

These terms and conditions apply to persons making an offer to acquire Placing Shares (as defined below). Each person to whom these terms and conditions apply, as described above, who confirms its agreement, either orally or in writing, to WH Ireland to acquire Placing Shares (each a "Placee") hereby agrees with WH Ireland and the Company to be bound by these terms and conditions as being the terms and conditions upon which Placing Shares will be issued or acquired. A Placee shall, without limitation, become so bound if WH Ireland confirms to such Placee its allocation of Placing Shares.

Upon being notified of its allocation of Placing Shares, a Placee shall be contractually committed to acquire the number of Placing Shares allocated to it at the Placing Price and, to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate or otherwise withdraw from such commitment.

This Announcement does not constitute an offer, and may not be used in connection with an offer, to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction in which such offer or solicitation is or may be unlawful. This Announcement and the information contained herein is not for publication or distribution, in whole or in part, directly or indirectly, to persons in the United States, Australia, Canada, Japan, the Republic of South Africa or in any jurisdiction in which such publication or distribution would be unlawful. Persons into whose possession this Announcement may come are required by the Company to inform themselves about and to observe any restrictions on transfer of this Announcement. No public offer of securities of the Company is being made in the United Kingdom, the United States or elsewhere.

In particular, the Placing Shares referred to in this Announcement have not been and will not be registered under the Securities Act or any laws of or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, pledged or otherwise transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States.

The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by the Australian Securities and Investments Commission or the Japanese Ministry of Finance or the South African Reserve Bank; and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or the Republic of South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan, the Republic of South Africa or any other jurisdiction in which such offer, sale, resale or delivery would be unlawful.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or the Announcement of which it forms part should seek appropriate advice before taking any action.

In this Appendix, unless the context otherwise requires, "Placee" means a Relevant Person (including individuals, funds or others) on whose behalf a commitment to subscribe for or acquire Placing Shares has been given.

Details of the Placing Agreement and the Placing Shares

WH Ireland has entered into a Placing Agreement (the "Placing Agreement") with the Company under which WH Ireland has, on the terms and subject to the conditions set out therein, undertaken to use its reasonable endeavours to procure subscribers for new ordinary shares of GBP0.018 each in the capital of the Company (the "Placing Shares"). It is expected that the Placing will raise approximately GBP1.12 million in gross proceeds at a price of 160 pence per ordinary share (the "Placing Price") with approximately 700,000 Placing Shares expected to be placed. The Placing is not being underwritten by WH Ireland or any other person.

The number of Placing Shares will be determined following completion of the Bookbuild (as defined below) as set out in this Announcement.

The Placing Shares will, when issued, be subject to the articles of association of the Company, will be credited as fully paid and will rank pari passu in all respects with the existing issued ordinary shares of GBP0.018 each in the capital of the Company ("Ordinary Shares"), including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of the Ordinary Shares after the date of issue of the Placing Shares.

The Placing Shares will trade on AIM under the TIDM: AIM:DFX, with ISIN: GB00BYNF4J61.

Application for admission to trading

Application will be made to London Stock Exchange plc (the "London Stock Exchange") for admission to trading of the Placing Shares on AIM ("Admission"). It is expected that settlement of any such shares and Admission will become effective on or around 11 August 2017 and that dealings in the Placing Shares will commence at that time.

Bookbuild

WH Ireland will today commence an accelerated bookbuilding process (the "Bookbuild") to determine demand for participation in the Placing by potential Placees at the Placing Price. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

WH Ireland and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.

Participation in, and principal terms of, the Placing

1. WH Ireland is arranging the Placing as agent for, and broker of, the Company.

2. Participation in the Placing is only available to persons who are lawfully able to be, and have been, invited to participate by WH Ireland. WH Ireland is entitled to participate in the Placing as principal.

3. The Bookbuild will establish the number of Placing Shares to be issued at the Placing Price, which will be agreed between WH Ireland and the Company following completion of the Bookbuild. The number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Bookbuild.

4. To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual contact at WH Ireland Corporate & Institutional Broking. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for or purchase at the Placing Price. Bids may be scaled down by WH Ireland on the basis referred to in paragraph 8 below.

5. The closing of the Bookbuild is intended to be at 7.30 a.m. on the date of this Announcement. The Company reserves the right to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion and WH Ireland reserves the right to extend the time for closing of the Bookbuild. WH Ireland is entitled to exercise the Broker Option following the closing of the Bookbuild up to 4.30 p.m. on the date of this Announcement.

6. Each Placee's allocation will be confirmed to Placees orally, or by email, by WH Ireland following the close of the Bookbuild and a trade confirmation or contract note will be dispatched as soon as practicable thereafter. WH Ireland's oral or emailed confirmation will give rise to an irrevocable, legally binding commitment by the person to which it is given (who at that point becomes a Placee), in favour of WH Ireland and the Company, under which that person agrees to acquire by subscription the number of Placing Shares allocated to it at the Placing Price and otherwise on the terms and subject to the conditions set out in this Appendix and in accordance with the Company's articles of association. Except with WH Ireland's consent, such commitment will not be capable of variation or revocation.

7. The Company will make a further announcement following the close of the Bookbuild detailing the number of Placing Shares to be issued at the Placing Price.

8. Subject to paragraphs 4 and 5 above, WH Ireland may choose not to accept bids and/or to accept bids, either in whole or in part, on the basis of allocations determined at their discretion (after consultation with the Company) and may scale down any bids for this purpose on such basis as it may determine. WH Ireland may also, notwithstanding paragraphs 4 and 5 above, subject to the prior consent of the Company, allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time.

9. A bid in the Bookbuild will be made on the terms and subject to the conditions in the Announcement (including this Appendix) and will be legally binding on the Placee on behalf of which it is made and except with WH Ireland's consent will not be capable of variation or revocation from the time at which it is submitted.

10. Except as required by law or regulation, no press release or other announcement will be made by WH Ireland or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

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

12. All obligations of WH Ireland under the Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Right to terminate the Placing Agreement".

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

14. To the fullest extent permissible by law and the applicable rules of the Financial Conduct Authority ("FCA"), neither WH Ireland nor any of its affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise and whether or not a recipient of these terms and conditions) in respect of the Placing. Each Placee acknowledges and agrees that the Company is responsible for the allotment of the Placing Shares to the Placees and WH Ireland and its affiliates shall have no liability to the Placees for the failure of the Company to fulfil those obligations. In particular, neither WH Ireland nor any of its affiliates shall have any liability (or, to the extent permissible by law, any fiduciary duties) in respect of WH Ireland's conduct of the Placing.

Conditions of the Placing

WH Ireland's obligations under the Placing Agreement in respect of the Placing Shares are conditional on, inter alia:

   (a)   the Subscription Agreement being entered into by the Company and BV Tech 

(b) the Company allotting the Placing Shares prior to and conditional only on Admission, in accordance with the terms of the Placing Agreement;

(c) Admission taking place not later than 8.00 a.m. on 11 August 2017 (or such later time or date as the Company and WH Ireland may agree, not being later than 8.00 a.m. on 4 September 2017); and

(d) the Placing Agreement becoming unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms.

If: (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by WH Ireland by the respective time or date where specified (or such later time or date as WH Ireland may agree in writing with the Company, not being later than 8.00 a.m. on 4 September 2017); (ii) any of such conditions becomes incapable of being satisfied; or (iii) the Placing Agreement is terminated in the circumstances specified below, the Placing will lapse and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

WH Ireland may, at its discretion and upon such terms as it thinks fit, waive, or extend the period for, compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement save that the above condition relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

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

Right to terminate the Placing Agreement

WH Ireland is entitled, at any time before Admission, to terminate the Placing Agreement by giving notice to the Company in certain circumstances, including, inter alia:

(a) a material breach by the Company of any of its obligations under the Placing Agreement and such breach is considered by WH Ireland (acting reasonably) to be material and adverse in the context of the Placing;

(b) any of the warranties given in the Placing Agreement not being true and accurate or being misleading, in each case in a way that is material in the context of the Placing in the reasonable opinion of WH Ireland; or

(c) the occurrence of a specified force majeure event, which WHIL in its reasonable opinion considers to be likely to have an adverse effect on the financial or trading position or the business or prospects of the Group which is material in the context of Group as a whole, or which renders the Placing impracticable or inadvisable.

The rights and obligations of the Placees will not be subject to termination by the Placees or any prospective Placees at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by WH Ireland of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of WH Ireland and WH Ireland need not make any reference to Placees and that neither WH Ireland nor any of its affiliates shall have any liability to Placees whatsoever in connection with any such exercise.

No Admission Document or Prospectus

The Placing Shares are being offered to a limited number of specifically invited persons only and have not been nor will be offered in such a way as to require the publication of an admission document or prospectus in the United Kingdom or in any other jurisdiction. No offering document, admission document or prospectus has been or will be submitted to be approved by the FCA in relation to the Placing, and Placees' commitments will be made solely on the basis of the information contained in the Announcement (including this Appendix) and the business and financial information that the Company is required to publish in accordance with the AIM Rules for Companies (the "Exchange Information"). Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than the Exchange Information), representation, warranty, or statement made by or on behalf of the Company or WH Ireland or any other person and neither WH Ireland, the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placee may have obtained or received and, if given or made, such information, representation, warranty or statement must not be relied upon as having been authorised by WH Ireland, the Company, or their respective officers, directors, employees or agents. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Neither the Company nor WH Ireland are making any undertaking or giving any warranty to any Placee regarding the legality of an investment in the Placing Shares by such Placee under any legal, investment or similar laws or regulations. Each Placee should not consider any information in this Announcement to be legal, tax or business advice. Each Placee should consult its own solicitor, tax adviser and financial adviser for independent legal, tax and financial advice regarding an investment in the Placing Shares. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and Settlement

Following the close of the Bookbuild, each Placee allocated Placing Shares in the Placing will be sent a trade confirmation or contract note in accordance with the standing arrangements in place with WH Ireland, stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee (in GBP) and a form of confirmation in relation to settlement instructions.

Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed as directed by WH Ireland in accordance with the standing CREST settlement instructions which they have in place with WH Ireland.

Settlement of transactions in the Placing Shares (ISIN:GB00BYNF4J61) following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST") provided that, subject to certain exceptions, WH Ireland reserves the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

It is expected that settlement will be on 11 August 2017 in accordance with the instructions set out in the form of confirmation.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR.

Each Placee is deemed to agree that, if it does not comply with these obligations, WH Ireland may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for WH Ireland's account and benefit (as agent for the Company), an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable and shall indemnify WH Ireland on demand for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, each Placee confers on WH Ireland such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which WH Ireland lawfully takes in pursuance of such sale.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the form of confirmation is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax or securities transfer tax. Neither WH Ireland nor the Company will be liable in any circumstances for the payment of stamp duty, stamp duty reserve tax or securities transfer tax in connection with any of the Placing Shares. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations, Warranties and Further Terms

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) makes the following representations, warranties, acknowledgements, agreements and undertakings (as the case may be) to WH Ireland (for itself and on behalf of the Company):

1. that it has read and understood this Announcement, including the Appendix, in its entirety and that its subscription for or purchase of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute or duplicate this Announcement;

2. that its obligations are irrevocable and legally binding and shall not be capable of rescission or termination by it in any circumstances;

3. that the exercise by WH Ireland of any right or discretion under the Placing Agreement shall be within the absolute discretion of WH Ireland and WH Ireland does not need to have any reference to it and shall have no liability to it whatsoever in connection with any decision to exercise or not to exercise any such right or discretion and each Placee agrees that it has no rights against WH Ireland or the Company, or any of their respective officers, directors or employees, under the Placing Agreement pursuant to the Contracts (Rights of Third Parties Act) 1999;

4. that these terms and conditions represent the whole and only agreement between it, WH Ireland and the Company in relation to its participation in the Placing and supersede any previous agreement between any of such parties in relation to such participation. Accordingly, each Placee, in accepting its participation in the Placing, is not relying on any information or representation or warranty in relation to the Company or any of its subsidiaries or any of the Placing Shares other than as contained in this Announcement and the Exchange Information. Each Placee agrees that neither the Company nor WH Ireland nor any of their respective officers, directors or employees will have any liability for any such other information, representation or warranty, express or implied;

5. that in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors or in circumstances in which the prior consent of WH Ireland has been given to the offer or resale; or (ii) where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons;

   6.   that neither it nor, as the case may be, its clients expect WH Ireland to have any duties or responsibilities to it or such persons similar or comparable to the duties of "best execution" and "suitability" imposed by the FCA's Conduct of Business Source Book, and that WH Ireland is not acting for it or its clients, and that WH Ireland will not be responsible for providing the protections afforded to customers of WH Ireland or for providing advice in respect of the transactions described herein; 

7. that it is: (i) unless otherwise agreed in writing with WH Ireland, located outside the United States and is not a US person as defined in Regulation S under the Securities Act ("Regulation S") and is subscribing for and/or purchasing the Placing Shares only in "offshore transactions" as defined in and pursuant to Regulation S, and (ii) it is not subscribing for and/or purchasing Placing Shares as a result of any "directed selling efforts" as defined in Regulation S or by means of any form of "general solicitation" or "general advertising" as such terms are defined in Regulation D under the Securities Act;

8. that the Placing Shares have not been and will not be registered under the Securities Act, or under the securities legislation of, or with any securities regulatory authority of, any state or other jurisdiction of the United States and that, subject to certain exceptions, the Placing Shares may not be offered, sold, pledged, resold, transferred, delivered or distributed into or within the United States;

9. that, unless specifically agreed with WH Ireland, it is not and was not acting on a non-discretionary basis for the account or benefit of a person located within the United States at the time the undertaking to subscribe for and/or purchase Placing Shares is or was given and it is not acquiring Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any Placing Shares into the United States and it will not reoffer, resell, pledge or otherwise transfer the Placing Shares except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and otherwise in accordance with any applicable securities laws of any state or jurisdiction of the United States;

10. that it is not a national or resident of Canada, Australia, South Africa or Japan or a corporation, partnership or other entity organised under the laws of Canada, Australia, the Republic of South Africa or Japan and that it will not offer, sell, renounce, transfer or deliver, directly or indirectly, any of the Placing Shares in Canada, Australia, the Republic of South Africa or Japan or to or for the benefit of any person resident in Canada, Australia, the Republic of South Africa or Japan and each Placee acknowledges that the relevant exemptions are not being obtained from the Securities Commission of any province of Canada, that no document has been or will be lodged with, filed with or registered by the Australian Securities and Investments Commission or Japanese Ministry of Finance and that the Placing Shares are not being offered for sale and may not be, directly or indirectly, offered, sold, transferred or delivered in or into Canada, Australia, the Republic South Africa or Japan;

11. that it does not have a registered address in, and is not a citizen, resident or national of, any jurisdiction in which it is unlawful to make or accept an offer of the Placing Shares and it is not acting on a non-discretionary basis for any such person;

12. that it has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted, and will not, directly or indirectly, distribute, forward, transfer or otherwise transmit, any presentation or offering materials concerning the Placing or the Placing Shares to any persons within the United States or to any US persons (as that term is defined in Regulation S);

13. that it is entitled to subscribe for and/or purchase Placing Shares under the laws of all relevant jurisdictions which apply to it and that it has fully observed such laws and obtained all governmental and other consents which may be required thereunder or otherwise and complied with all necessary formalities and that it has not taken any action which will or may result in the Company or WH Ireland or any of their respective directors, officers, employees or agents acting in breach of any regulatory or legal requirements of any territory in connection with the Placing or its acceptance;

14. that it has obtained all necessary consents and authorities to enable it to give its commitment to subscribe for and/or purchase the Placing Shares and to perform its subscription and/or purchase obligations under the Placing;

15. that where it is acquiring Placing Shares for one or more managed accounts, it is authorised in writing by each managed account: (a) to acquire the Placing Shares for each managed account; (b) to make on its behalf the representations, warranties, acknowledgements, undertakings and agreements in this Appendix and the Announcement of which it forms part; and (c) to receive on its behalf any confirmation, contract note or investment letter relating to the Placing in the form provided to it by WH Ireland;

16. that it is either: (a) a person of a kind described in paragraph 5 of Article 19 (persons having professional experience in matters relating to investments and who are investment professionals) of the Order; or (b) a person of a kind described in paragraph 2 of Article 49 (high net worth companies, unincorporated associations, partnerships or trusts or their respective directors, officers or employees) of the Order; or (c) a person to whom it is otherwise lawful for this Announcement to be communicated and in the case of (a) and (b) undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

17. that, unless otherwise agreed by WH Ireland, it is a qualified investor (as defined in section 86(7) of the Financial Services and Markets Act 2000, as amended ("FSMA"));

18. that, unless otherwise agreed by WH Ireland, it is a "professional client" or an "eligible counterparty" within the meaning of Chapter 3 of the FCA's Conduct of Business Sourcebook and it is purchasing Placing Shares for investment only and not with a view to resale or distribution;

19. it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

20. that any money held in an account with each of WH Ireland (or its nominee) on its behalf and/or any person acting on WH Ireland's behalf will not be treated as client money within the meaning of the rules and regulations of the FCA. Each Placee further acknowledges that the money will not be subject to the protections conferred by the FCA's client money rules. As a consequence, this money will not be segregated from WH Ireland's (or its nominee's) or such person's money in accordance with such client money rules and will be used by WH Ireland or such person in the course of its own business and each Placee will rank only as a general creditor of WH Ireland or such person;

21. that it will (or will procure that its nominee will) if applicable, make notification to the Company of the interest in its ordinary shares in accordance with the Disclosure Guidance and Transparency Rules published by the FCA;

22. that it is not, and it is not acting on behalf of, a person falling within subsections (6), (7) or (8) of sections 67 or 70 respectively or subsections (2) and (3) of section 93 or subsection (1) of section 96 of the Finance Act 1986;

23. that it is not relying on any representations or warranties or agreements by the Company or WH Ireland or by any of their respective directors, employees or agents or any other person except as set out in the express terms of this Announcement;

24. that it will not deal or cause or permit any other person to deal in all or any of the Placing Shares which it is subscribing for and/or purchasing under the Placing unless and until Admission becomes effective;

25. that it appoints irrevocably any director of WH Ireland as its agent for the purpose of executing and delivering to the Company and/or its registrars any document on its behalf necessary to enable it to be registered as the holder of the Placing Shares or to deliver its Placing Shares into CREST;

26. that, as far as it is aware, it is not acting in concert (within the meaning given in The City Code on Takeovers and Mergers) with any other person in relation to the Company;

27. that this Announcement does not constitute a securities recommendation or financial product advice and that neither WH Ireland nor the Company has considered its particular objectives, financial situation and needs;

28. that it is aware that it may be required to bear, and it, and any accounts for which it may be acting, are able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing;

29. that it will indemnify and hold the Company and WH Ireland and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, confirmations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the Company and WH Ireland will rely on the truth and accuracy of the representations, confirmations, warranties, acknowledgements, agreements and undertakings herein and, if any of the foregoing is or becomes no longer true or accurate, the Placee shall promptly notify WH Ireland and the Company. All representations, confirmations, warranties, acknowledgements, agreements and undertakings given by the Placee, pursuant to this Announcement (including this Appendix) are given to WH Ireland for itself and on behalf of the Company and will survive completion of the Placing and Admission;

30. that time shall be of the essence as regards obligations pursuant to this Appendix;

31. that it is responsible for obtaining any legal, tax and other advice that it deems necessary for the execution, delivery and performance of its obligations in accepting the terms and conditions of the Placing, and that it is not relying on the Company or WH Ireland to provide any legal, tax or other advice to it;

32. that all dates and times in this Announcement (including this Appendix) may be subject to amendment and that WH Ireland shall notify it of such amendments;

33. that (i) it has complied with its obligations under the Criminal Justice Act 1993, Part VIII of FSMA and MAR, (ii) in connection with money laundering and terrorist financing, it has complied with its obligations under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering Regulations 2007 and 2017 and (iii) it is not a person: (a) with whom transactions are prohibited under the United States Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the US Department of the Treasury; (b) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or (c) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations (together, the "Regulations"); and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and it has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such subscription or purchase, and it will provide promptly to WH Ireland such evidence, if any, as to the identity or location or legal status of any person which WH Ireland may request from it in connection with the Placing (for the purpose of complying with such Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by WH Ireland on the basis that any failure by it to do so may result in the number of Placing Shares that are to be subscribed for and/or purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as WH Ireland may decide in its absolute discretion;

34. that it will not make any offer to the public of those Placing Shares to be subscribed for and/or purchased by it for the purposes of the Prospectus Rules made by the FCA pursuant to Commission Regulation (EC) No. 809/2004;

35. that it will not distribute any document relating to the Placing Shares and it will be acquiring the Placing Shares for its own account as principal or for a discretionary account or accounts (as to which it has the authority to make the statements set out herein) for investment purposes only and it does not have any contract, understanding or arrangement with any person to sell, pledge, transfer or grant a participation therein to such person or any third person with respect to any Placing Shares; save that that if it is a private client stockbroker or fund manager it confirms that in purchasing the Placing Shares it is acting under the terms of one or more discretionary mandates granted to it by private clients and it is not acting on an execution only basis or under specific instructions to purchase the Placing Shares for the account of any third party;

36. that it acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract or agreement, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or WH Ireland in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

37. that any documents sent to Placees will be sent at the Placees' risk. They may be sent by post to such Placees at an address notified to WH Ireland;

38. that WH Ireland owes no fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement;

39. that WH Ireland or any of its affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares;

40. that no prospectus or offering document has been or will be prepared in connection with the Placing and it has not received and will not receive a prospectus or other offering document in connection with the Placing or the Placing Shares; and

41. that it has neither received nor relied on any confidential price sensitive information concerning the Company in accepting its invitation to participate in the Placing.

The Company and WH Ireland and their respective affiliates will rely upon the truth and accuracy of each of the foregoing representations, warranties, acknowledgements, agreements and undertakings which are given to WH Ireland for itself and on behalf of the Company and are irrevocable.

The provisions of this Appendix may be waived, varied or modified as regards specific Placees or on a general basis by WH Ireland.

The agreement to settle a Placee's subscription and/or purchase (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor WH Ireland will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom, it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and WH Ireland in the event that either of the Company and/or WH Ireland has incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify WH Ireland accordingly.

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the subscription or purchase by them of any Placing Shares or the agreement by them to subscribe for or purchase any Placing Shares.

All times and dates in this Announcement (including this Appendix) may be subject to amendment. WH Ireland shall notify the Placees and any person acting on behalf of a Placee of any changes.

This Announcement has been issued by, and is the sole responsibility of, the Company. No representation, warranty or undertaking express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by WH Ireland or by any of its affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.

DEFINITIONS

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

 
 "Act"                  the Companies Act 2006 (as amended); 
 "Admission"            admission of the Placing Shares 
                         to trading on AIM becoming effective 
                         in accordance with the AIM Rules; 
 "AIM"                  the market of that name operated 
                         by London Stock Exchange; 
 "AIM Rules"            the rules for AIM companies and 
                         their AIM advisers, as published 
                         from time to time by the London 
                         Stock Exchange in relation to AIM 
                         traded securities; 
 "Announcement"         this announcement regarding the 
                         Placing, Subscription and Convertible 
                         Bond Issue released by the Company 
                         on 7 August 2017; 
 "Articles"             the articles of association of 
                         the Company; 
 "Bond Conversion       Ordinary Shares issued upon any 
  Shares"                conversion of the Secured Convertible 
                         Bonds; 
 "Bond Placing          the conditional agreement dated 
  Agreement"             7 August 2017 between the Company 
                         and UK Bond Network relating to 
                         the Convertible Bond Issue; 
 "Bond Underwriting     the conditional agreement dated 
  Commitment"            23 June 2017 relating to the underwriting 
                         of the Convertible Bond Issue; 
 "Bondholder"           each Eligible Investor (or its 
                         nominee) who holds a Secured Convertible 
                         Bond from time to time; 
 "Broker Option"        the option granted to WH Ireland 
                         pursuant to the Placing Agreement; 
 "Broker Option         new Ordinary Shares, if any, to 
  Shares"                be allotted and issued by the Company 
                         to Placees following the exercise 
                         of the Broker Option; 
 "BV Tech"              BV Tech S.p.A; 
 "Conversion Price"     200 pence per Ordinary Share; 
 "Convertible           the instrument to be entered into 
  Bond Instrument"       by the Company following completion 
                         of the auction of the Secured Convertible 
                         Bonds, which will constitute the 
                         Secured Convertible Bonds; 
 "Convertible           the proposed issue by the Company 
  Bond Issue"            of the Secured Convertible Bonds, 
                         as arranged by UK Bond Network, 
                         as agent of the Company, further 
                         details of which are set out in 
                         paragraph 4 of this Announcement; 
 "Company" or           Defenx PLC, a public limited company 
  "Defenx"               registered in England and Wales 
                         with registration number 08993398; 
 "CREST"                the computerised settlement system 
                         (as defined in the CREST Regulations) 
                         operated by Euroclear which facilitates 
                         the transfer of title to shares 
                         in uncertificated form; 
 "CREST Regulations"    the Uncertificated Securities Regulations 
                         2001 (SI 2001/3755) including any 
                         enactment or subordinate legislation 
                         which amends or supersedes those 
                         regulations and any applicable 
                         rules made under those regulations 
                         or any such enactment or subordinate 
                         legislation for the time being 
                         in force; 
 "Directors" or         the directors of Defenx; 
  "Board" 
 "Dealing Day"          a day on which AIM (or other relevant 
                         stock exchange or securities market) 
                         is open for business, other than 
                         a day on which AIM (or other relevant 
                         stock exchange or securities market) 
                         is scheduled to or does close prior 
                         to its regular weekday closing 
                         time; 
 "Eligible Investors"   high net worth, sophisticated, 
                         professional and institutional 
                         investors (in each case as defined 
                         in FSMA and regulations under FSMA); 
 "Enlarged Share        the entire issued Ordinary Share 
  Capital"               capital of the Company immediately 
                         following admission of the Placing 
                         and Subscription Shares (assuming 
                         no exercise of the Broker Option); 
 "Euroclear"            Euroclear UK & Ireland Limited; 
 "Existing Ordinary     the 11,862,792 Ordinary Shares 
  Shares"                in issue on the Latest Practicable 
                         Date; 
 "FSMA"                 the Financial Services and Markets 
                         Act 2000; 
 "Fundraising"          the Placing, Subscription and Convertible 
                         Bond Issue; 
 "General Meeting"      the general meeting of the Shareholders 
  or "GM"                convened pursuant to the notice 
                         of General Meeting at which the 
                         Resolutions will be proposed; 
 "Group"                the Company and its subsidiaries; 
 "Latest Practicable    close of business (5.00 p.m. London 
  Date"                  time) on 4 August 2017, being the 
                         latest practicable date prior to 
                         the publication of this Announcement; 
 "London Stock          London Stock Exchange PLC; 
  Exchange" 
 "New Ordinary          the approximately 856,250 new Ordinary 
  Shares"                Shares to be issued by the Company 
                         pursuant to the Placing and Subscription, 
                         and the Ordinary Shares (if any) 
                         to be issued on exercise of the 
                         Broker Option; 
 "Ordinary Shares'      the ordinary shares of GBP0.018 
                         each in the capital of the Company; 
 "Placing"              The placing of the Placing Shares 
                         at the Placing Price by WH Ireland 
                         as agent for the Company by way 
                         of an accelerated bookbuilding 
                         process and the allotment of the 
                         Broker Option Shares (if any) to 
                         Placees, subject to a maximum of 
                         981,250 Placing Shares being allotted; 
 "Placing Agreement"    the placing agreement between the 
                         Company and WH Ireland dated 7 
                         August 2017 relating to the Placing; 
 "Placing Price"        160 pence per Placing Share; 
 "Placing Shares"       the approximately 700,000 new Ordinary 
                         Shares and (where applicable) the 
                         Broker Option Shares to be placed 
                         with institutional and certain 
                         other investors at the Placing 
                         Price pursuant to the Placing; 
 "Proposals"            together the Placing, Subscription 
                         and the Convertible Bond Issue; 
 "Resolutions"          the resolutions to be set out in 
                         the notice of General Meeting and 
                         which are to be proposed as ordinary 
                         and special resolutions as indicated; 
 "Secured Convertible   up to GBP2 million in convertible 
  Bonds"                 bonds to be issued by the Company 
                         on completion of the Convertible 
                         Bond Issue; 
 "Security Trustee"     Jade State Wealth Limited of 59-60 
                         Thames Street, Windsor, Berkshire 
                         SL4 1TX; 
 "Shareholders"         the holders of Ordinary Shares 
                         from time to time; 
 "Strand Hanson"        Strand Hanson Limited, the nominated 
                         and financial adviser to the Company; 
 "Subscription"         the conditional allotment and issue 
                         of up to 156,250 New Ordinary Shares 
                         to BV Tech pursuant to the Subscription 
                         Agreement; 
 "Subscription          the agreement to be entered into 
  Agreement"             between the Company and BV Tech 
                         providing for BV Tech to make the 
                         Subscription; 
 "Subscription          the New Ordinary Shares subscribed 
  Shares"                for under the Subscription; 
 "Takeover Offer"       an offer made to all Shareholders 
                         to acquire the whole or any part 
                         of the issued Ordinary Share capital 
                         of the Company, or the proposal 
                         to carry out such an acquisition 
                         by way of a scheme of arrangement; 
 "UK Bond Network"      UK Bond Network Limited; and 
 "WH Ireland"           WH Ireland Limited of 24 Martin 
                         Lane, London EC4R 0DR. 
 

References to "GBP", "pence" and "p" are to British pounds and pence sterling, the currency of the United Kingdom.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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