127368 oxford nutrascience admission doc pt

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt
about the contents of this document you should consult your stockbroker, bank manager, solicitor, accountant or other
independent professional adviser authorised for the purposes of the FSMA, who specialises in advising on the
acquisition of shares and other securities. An investment in the Company involves a significant degree of risk and may
not be suitable for all recipients of this document. Investors should consider carefully the "Risk Factors" which are set
out in Part III of this document.
The Company and its Directors, whose names appear on page 5 of this document, accept individual and collectiveresponsibility for the information contained in this document, including individual and collective responsibility for compliancewith the AIM Rules. To the best of the knowledge and belief of the Company and the Directors who have taken all reasonablecare to ensure that such is the case, the information contained in this document is in accordance with the facts and contains noomission likely to affect the import of such information. In connection with this document, no person is authorised to give anyinformation or to make any representations other than as contained in this document and if given or made, such informationor representation must not be relied upon as having been authorised. Under no circumstances should the information containedin this document be relied upon as remaining accurate at any time after Admission. Each member of the Concert Party accepts responsibility for the information contained in this document relating to themselvesor otherwise expressly referable to them. To the best of the knowledge and belief of each member or the Concert Party (whohas taken reasonable care to ensure such is the case) the information contained in this Document for which they are responsibleis in accordance with the facts and there are no other facts the omission of which is likely to affect the import of suchinformation. This document, which comprises an admission document drawn up in accordance with the AIM Rules for Companies, has beenissued in connection with the application for admission to trading of the Enlarged Issued Share Capital on AIM. This documentdoes not constitute an offer to the public in accordance with section 85 FSMA and is not a prospectus for the purposes of theProspectus Rules and has not been, and will not be, approved by the FSA. A copy of this document has been delivered to theLondon Stock Exchange as an admission document in respect of the Ordinary Shares but a copy has not been filed with theFSA. The London Stock Exchange has not itself examined or approved the contents of this document. Application has beenmade for the Enlarged Issued Share Capital to be admitted to trading on AIM and it is expected that Admission will becomeeffective and that dealings in the Ordinary Shares will commence on 12 February 2010.
The rules of AIM are less demanding than those of the Official List of the UK Listing Authority. AIM is a market
designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to
larger or more established companies. AIM securities are not admitted to the official list of the UK Listing Authority.
A prospective investor should be aware of the risks of investing in such companies and should make the decision to
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Each AIM company is required pursuant to the AIM Rules for Companies to have a nominated adviser. The nominated
adviser is required to make a declaration to the London Stock Exchange on Admission in the form set out in Schedule
Two to the AIM Rules for Nominated Advisers.
Oxford Nutrascience Group PLC
(Incorporated and registered in England and Wales under Companies Act 2006 with registered number 07036758) Placing of 62,857,148 new Ordinary Shares at 1.75p per share
Admission to trading on AIM
Nominated Adviser
ZAI Corporate Finance Ltd
Zimmerman Adams International Limited
Issued and fully paid up share capital immediately following Admission
£464,023.80 divided into 464,023,798 Ordinary Shares The Placing Shares will, following allotment, rank pari passu in all respects with the Existing Ordinary Shares including theright to receive all dividends and other distributions declared, made or paid on the Ordinary Shares after Admission.
ZAI Corporate Finance Ltd, which is authorised and regulated in the United Kingdom by the FSA, is acting as nominatedadviser to the Company in connection with the arrangements described in this document and will not be providing advice toany other person in relation to the Placing or Admission or any other transaction or arrangement referred to in this document.
Its responsibilities as the Company's nominated adviser under the AIM Rules for Nominated Advisers are owed solely toLondon Stock Exchange and are not owed to the Company or to any Director or to any other person in respect of his decisionto acquire Ordinary Shares in reliance on any part of this document. No representation or warranty, express or implied, is made by ZAI Corporate Finance Ltd as to any of the contents of this document (without limiting the statutory rights of any personto whom this document is issued). ZAI Corporate Finance Ltd will not be offering advice and will not otherwise be responsibleto anyone other than the Company for providing the protections afforded to customers of ZAI Corporate Finance Ltd or forproviding advice in relation to the contents of this document or any other matter. No liability is accepted by ZAI CorporateFinance Ltd for the accuracy of any information or opinions contained in, or for the omission of any material information from,this document, for which the Company and the Directors are solely responsible.
Zimmerman Adams International Limited, which is authorised and regulated by the FSA and a member of the London StockExchange, is acting as broker to the Company. Zimmerman Adams International Limited's responsibilities as the broker to theCompany are owed solely to the Company. No representation or warranty, express or implied, is made by Zimmerman AdamsInternational Limited as to any of the contents of this document (without limiting the statutory rights of any person to whomthis document is issued). Zimmerman Adams International Limited will not be offering advice and will not otherwise beresponsible to anyone other than the Company for providing the protections afforded to customers of Zimmerman AdamsInternational Limited or for providing advice in relation to the contents of this document or any other matter. No liability isaccepted by Zimmerman Adams International Limited for the accuracy of any information or opinions contained in, or for theomission of any material information from, this document, for which the Company and the Directors are solely responsible.
The Placing described in this document is only being made in the United Kingdom. The distribution of this document outsidethe United Kingdom may be restricted by law and therefore persons outside the United Kingdom into whose possession thisdocument comes should inform themselves about and observe any restrictions as to the Ordinary Shares of the Company orthe distribution of this document. This document should not be copied or distributed by recipients and, in particular, shouldnot be distributed by any means, including electronic transmission, in, into or from, the United States of America, Canada,Australia, Japan or South Africa or any other jurisdiction where to do so would be in breach of any applicable law and/orregulation. The Ordinary Shares of the Company have not been, and will not be, registered in the United States of Americaunder the United States Securities Act of 1933 (as amended) or under the securities legislation of any state of the United Statesof America, Canada, Australia, Japan or South Africa and they may not be offered or sold, directly or indirectly, within, or into,the United States of America, Canada, Australia, Japan or South Africa or to, or for the account or benefit of, United Statespersons or any national, citizen or resident of the United States of America, Canada, Australia, Japan or South Africa. Thisdocument does not constitute an offer to sell or issue or the solicitation of an offer to buy or subscribe for Ordinary Shares ofthe Company in any jurisdiction in which such an offer or solicitation is unlawful.
The whole text of this document should be read. Investment in the Company is speculative and involves a high degree
of risk. Your attention is also drawn to the section headed "Risk Factors" in Part III of this document.
Placing statistics Expected timetable of principal events Directors, Secretary and Advisers Technical Definitions Part I: Information on the Company Information on the Concert Party Financial Information relating to ONL Section A: Accountants' Report Section B: Historical Financial Information Unaudited Interim Financial Information Part VI: Additional Information This document contains forward-looking statements. These statements relate to the Group's future prospects,developments and business strategy. Forward-looking statements are identified by their use of terms and phrases such as "believe", "could","expect", "envisage", "estimate", "intend", "may", "plan", "will" or the negative of those, variations orcomparable expressions, including references to assumptions. These statements are primarily contained inParts I and V of this document. The forward-looking statements in this document are based on current expectations and are subject to risksand uncertainties that could cause actual results to differ materially from those expressed or implied by thosestatements. Certain risks to and uncertainties for the Company are specifically described in Part III of thisdocument headed "Risk Factors". If one or more of these risk factors or uncertainties materialises, or if theunderlying assumptions prove incorrect, the Group's actual results may vary materially from those expected,estimated or projected. Given these risks and uncertainties, potential investors should not place any relianceon forward-looking statements.
These forward-looking statements speak only as at the date of this document. Neither the Directors, nor theCompany undertake any obligation to update forward-looking statements or risk factors other than asrequired by the AIM Rules for Companies or by the rules of any other securities regulatory authority, whetheras a result of new information, future events or otherwise.
Number of Existing Ordinary Shares Number of Placing Shares Number of Ordinary Shares in issue on Admission Placing Shares as a percentage of the Enlarged Issued Share Capital Market capitalisation on Admission at the Placing Price Gross proceeds of the Placing Estimated net proceeds of the Placing receivable by the Company EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Document publication date Admission effective and commencement of dealings inthe Enlarged Issued Share Capital on AIM Expected date for CREST accounts to be credited Despatch of definitive share certificates in respect ofthe Placing Shares (where applicable) by 26 February 2010 All future dates referred to in this document are subject to change at the discretion of the Company and ZAICorporate Finance Ltd. All times are UK times unless otherwise specified. DIRECTORS, SECRETARY AND ADVISERS OF THE COMPANY
Marcelo Leonardo Bravo, Non-Executive ChairmanNigel James Theobald, Chief Executive OfficerMichael Anthony Bretherton, Finance DirectorJames Nicholas Gerald White, Non-Executive Director Company Secretary Registered Office 4th Floor17 Hanover SquareLondon W1S 1HU Principal Place of Business Part of 1st Floor73 Derby RoadMelbourneDerbyshire DE73 8FE Nominated Adviser ZAI Corporate Finance Ltd12 Camomile StreetLondon EC3A 7PT Zimmerman Adams International Limited12 Camomile StreetLondon EC3A 7PT Reporting Accountants Baker Tilly Corporate Finance LLP2 Bloomsbury StreetLondon WC1B 3ST Auditors to the Company RSM Tenon Audit LimitedThe Poynt, 45 Wollaton StreetNottingham NG1 5FW Legal Advisers to the Company Fasken Martineau LLP4th Floor17 Hanover SquareLondon W1S 1HU Legal Advisers to the Nominated Faegre & Benson LLP Adviser and Broker 7 Pilgrim StreetLondon EC4V 6LB Capita Registrars LimitedNorthern HouseWoodsome ParkFenay BridgeHuddersfield HD8 0GA DEFINITIONS
Except where the context otherwise requires, the following definitions shall apply throughout this document: the admission of the Enlarged Issued Share Capital to trading onAIM becoming effective in accordance with Rule 6 of the AIMRules the market of that name operated by the London Stock Exchange together, the AIM Rules for Companies and the AIM Rules forNominated Advisers "AIM Rules for Companies" the AIM rules for companies published by the London StockExchange, as amended from time to time "AIM Rules for Nominated Advisers" the AIM rules for Nominated Advisers published by the LondonStock Exchange, as amended from time to time the articles of association of the Company, a summary of which isset out in paragraph 6 of Part VI of this document the Companies Act 2006 of the United Kingdom (as amended) the UK City Code on Takeovers and Mergers those persons whose details are set out in Part II of this document "Connected Persons" as defined in section 252 of the CA 2006 "Company" or "ONG" Oxford Nutrascience Group Plc the relevant system (as defined in the CREST Regulations) whichenables title to securities to be evidenced and transferred without awritten instrument and which is operated by Euroclear "CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755)(as amended) "Directors" or "Board" the directors of the Company, whose names are set out on page 5 ofthis document registered trademark for a bone health food supplement for women "EMI Option Scheme" the Oxford Nutrascience Group Plc Enterprise ManagementIncentive Scheme, details of which are set out in paragraph 12 ofPart VI of this document "Enlarged Issued Share Capital" the issued share capital of the Company upon Admission being theaggregate of the Existing Ordinary Shares and the Placing Shares Euroclear UK & Ireland Limited, the operator of CREST "Existing Ordinary Shares" the Ordinary Shares in issue at the date of this document "Existing Shareholders" the holders of Existing Ordinary Shares at the date of this document the UK Financial Services Authority, the single statutory regulatorunder the FSMA the Financial Services and Markets Act 2000, as amended,including any regulations made pursuant thereto the Company and subsidiaries (each a "Group Company") the Shareholders at the date of this document other than those whoare members of the Concert Party "Intellectual Property Rights" means all intellectual property, including (without limitation)patents, trade marks, service marks, trade or business names,goodwill, domain names, database rights, rights in designs,copyrights and topography rights (whether or not any of these rightsare registered, and including applications and the right to apply forregistration of any such rights) and all inventions, know-how, tradesecrets and confidential information, customer and supplier lists andother proprietary knowledge and information and all rights underlicences and consents in relation to any such rights and all rights andforms of protection of a similar nature or having equivalent orsimilar effect to any of these which may subsist anywhere in theworld for their full term, including renewals and extensions "London Stock Exchange" London Stock Exchange plc the Official List of the UK Listing Authority "ONL" or "Oxford Nutrascience" Oxford Nutrascience Limited, (company number 6498279) thewholly owned trading subsidiary of the Company "ONL Acquisition" the acquisition of ONL by the Company and effected under theShare Exchange Agreement ORA (Guernsey) Limited, a company incorporated in Guernseyunder company number 49949 ORA Capital Limited, a company incorporated in England andWales under company number 5614046 "ORA Capital Partners" ORA Capital Partners Limited, company incorporated in Guernseywith Company number 49907, a company traded on AIM "Ordinary Shares" ordinary shares of 0.1p each in the capital of the Company "Patent Family 1" the family of patent applications set out in Part I of this document "Patent Family 2" the family of patent applications set out in Part I of this document "Patents Pending" the filed patent applications, details of which are set out in Part I ofthis document the conditional placing by ZAI on behalf of the Company of thePlacing Shares pursuant to the Placing Agreement "Placing Agreement" the conditional agreement dated 8 February 2010 between theCompany (1), the Directors (2) ZAICF (3) and ZAI (4) relating tothe Placing, details of which are set out in paragraph 13 of Part VIof this document 1.75p per Placing Share 62,857,148 new Ordinary Shares to be issued pursuant to thePlacing "Prospectus Rules" the prospectus rules published by the FSA from time to time for thepurposes of Part IV of FSMA in relation to offers of securities to thepublic "QCA Guidelines'' the Corporate Governance Guidelines for AIM Companies issuedby the Quoted Companies Alliance has the meaning given to that term by the AIM Rules for Companies "Relationship Agreement" the relationship agreement dated 8 February 2010 (and conditionalupon Admission) and entered into between the Company (1) andORA (2), further details of which are set out in paragraph 13 of PartVI of this document holders of Ordinary Shares in the Company from time to time "Share Exchange Agreement" the agreement dated 27 January 2010 and made between theCompany (1) ONL (2) and the Vendors, providing for the ONLAcquisition, further details of which are set out in paragraph 13 ofPart VI of this document "Share Option Schemes" together, the EMI Scheme and the Unapproved Option Scheme ONL and Oxford Nutra Limited, both being subsidiaries of theCompany within the meaning of section 1159 of the CA 2006 the UK Panel on Takeovers and Mergers the subject of the Patents Pending and related know-how includingPatent Family 1 (entitled "confectionary compositions") and PatentFamily 2 (entitled "pharmaceutical, therapeutic or nutritionaldelivery systems for functional ingredients") "Theobald ONL Option" the option granted to Nigel Theobald by ONL which has now beenreplaced by the Theobald Option, details of which are set out inparagraph 12 of Part VI of this document "Theobald Option" the option granted to Nigel Theobald under the EMI OptionScheme, in replacement for the Theobald ONL Option, details ofwhich are set out in paragraph 12 of Part VI of this document "Unapproved Option Scheme" the Oxford Nutrascience Group Plc Unapproved Option Scheme,details of which are set out in paragraph 12 of Part VI of thisdocument "UK Listing Authority" the FSA acting in its capacity as competent authority for thepurposes of Part VI of FSMA ‘'United Kingdom'' or ‘'UK'' the United Kingdom of Great Britain and Northern Ireland ‘'US'' or ‘'USA'' or ‘'United States'' the United States of America, its territories and possessions, anystate in the United States, the District of Columbia and other areassubject to its jurisdiction the vendors under the Share Exchange Agreement being the thenshareholders of ONL ZAI Corporate Finance Ltd, the nominated adviser to the Company Zimmerman Adams International Limited, the broker to theCompany United Kingdom pounds sterling and pence Except where the context otherwise requires, the following technical definitions shall apply throughout thisDocument: any member of the diverse group of drugs used to relieve pain the medical term for the symptom of difficulty in swallowing a material that repels water. In chemistry, hydrophobicity is thephysical property of a substance that is repelled from a mass ofwater. Hydrophobic substances in water often cluster together anddo not disperse or dissolve a medicine or remedy in a specified formulation refers to sensory properties, i.e. those that can be detected by thesense organs. For foods, it is used particularly of the combination oftaste, texture, and astringency (perceived in the mouth) and aroma(perceived in the nose).
"over-the-counter (OTC) medicines" medicines or consumer health care products that do not require aprescription. This includes traditional medicines, cough and coldpreparations, vitamins and minerals, indigestion preparations,analgesics, and other healthcare products including: medicated skinproducts, topical medicines, plasters & bandages, first aid kits, anti-smoking aids, rectal medications, eye/ear drops, sleeping aids,motion sickness treatments, etc.
a large molecule formed by the linkage between a large number ofsmaller molecules (monomer) non-digestible food ingredients that beneficially affect the host byselectively stimulating the growth and/or activity of one or a limitednumber of bacteria in the colon "proof of concept" second stage in the company's product development process. By theend of the stage key milestones achieved or completed includedefinition of final formulations, establishment of raw materialstandards, preliminary process feasibility (pilot plant scale), andconsumer acceptance validation wetting agent that lowers the surface tension of a liquid, allowingeasier spreading, and lowers the tension between two liquids "liquid suspension" solid particles dispersed throughout a liquid phase in which they arenot soluble.
INFORMATION ON THE COMPANY
ONG is the holding company of ONL, a consumer healthcare company developing and commercialisingproprietary delivery systems for medicines and supplements. By leveraging prebiotic soluble fibretechnology, Oxford Nutrascience's proprietary delivery systems which include chewable tablets, chewyconfectionery and liquid suspensions, allow for self medication with ease. They also have functionalbenefits. ONL was founded in February 2008 by two entrepreneurs with corporate experience in consumer healthcare.
Nigel Theobald, Chief Executive Officer, previously worked for Boots (now Alliance Boots) where he heldsenior commercial roles in over-the-counter medicines and healthcare product development. Marcelo Bravo,Non-Executive Chairman, has a background in chemistry and chemical engineering and previously workedin research and development with Procter & Gamble, and new business development with Boots (nowAlliance Boots).
ONL secured £1.039 million in early stage funding from private investors, including ORA, from twoinvestment rounds in May and August 2008. Revenues, to date, are derived from the sale of Ellactiva®, acalcium chewy supplement which is sold in the UK, via Alliance Boots, and in the Middle East, via HauoraProducts Limited. ONG is seeking to license the IP rights to the Technology, subject to grant of the patentspending, to major brand owners in the OTC and prescription pharmaceutical sectors. The Company has conditionally raised £1.1 million (before expenses) by the issue of 62,857,148 PlacingShares at the Placing Price pursuant to the Placing. The net proceeds of the Placing will be used to developand grow the business and fund further research and development in line with the business strategy.
Application has been made to the London Stock Exchange for Admission of the Enlarged Issued ShareCapital to trading on AIM and it is expected that trading will commence in the Ordinary Shares on12 February 2010.
The Technology
Prebiotic soluble fibres are food ingredients that are presenting additional opportunities to the food industryas a result of their digestive health benefits as well as their ability to replace sugar and, in the Directorsopinion, improve taste. The Group has recognised that the functionality of these ingredients can be used toimpart a range of desired effects in medicinal formulations. The Group has developed the Technology for theuse of prebiotic soluble fibres in medicine delivery systems that: disperse and solubilise medicines; improve taste and mouth feel; simplify processing and eliminate additives; and incorporate prebiotic health benefits.
The systems developed by the Group use a range of prebiotic soluble fibres in precise combination to achievedesired effects in taste, mouth feel and active ingredient dispersability. These prebiotic soluble fibres aregenerally non-starch carbohydrate polymers of varying size or chain length. The differences in chain lengthbetween various soluble prebiotic fibres result in distinctly different functional attributes and the precisecombination of different fibres, coupled with proprietary process know-how, is the basis of the Group'sTechnology. The Delivery Systems
Conventional systems to deliver functional ingredients such as drugs and nutritional supplements includetablets, capsules, chews, gels, liquid suspensions and syrups. As evidenced by activity in the patent space,there is ongoing interest in developing new systems for delivering functional and active ingredients such asoral gels, spill-resistant syrups, mouth dissolving soluble tablets, chewable tablets and confectionery chews.
The Group's delivery systems also contain prebiotic fibre and therefore provide additional benefits which arenot associated with current OTC medicine delivery systems that are known to the Directors to be in themarket or in the patent space. The Group has realised that the functional properties of prebiotic soluble fibres can be used to developmedicine delivery systems with favourable organoleptic properties such as taste, texture and mouth feel andwith the potential to provide nutritional benefits via prebiotic fibre intake. Importantly, delivery systemsdeveloped by the Group are based on soluble fibres and which are capable of wetting and dispersinghydrophobic ingredients and stabilise emulsions and dispersions. The Company's initial patent applications cover OTC medicines and food supplements. The Group isconducting ongoing development to extend its intellectual property portfolio as well as establish claims forincreased efficacy of medicine delivery. The Technology is currently the subject of two patent applications, both initially filed in the UK, furtherdetails of which are set out this Part I. The Group's delivery systems include: Chewy Confectionery: the Directors believe that this is a great format suitable for unpleasant to take
supplements (e.g. large calcium tablets) or children's supplements. The Group currently sells a calcium chew
and is developing new products with a view to a launch in early 2010, one of which contains Omega 3.
Traditional confectionery chews are made soft by balancing the use of crystallising sugars (sucrose) withreducing sugars (glucose syrup). Adding minerals to traditional confectionery chews can lead to a grittytexture as the minerals can change the balance and promote crystallisation.
The Directors believe that the taste benefits of using traditional confectionery chews can also be outweighedby these being high in sugar and furthermore that by reducing the sugar and fat content of a traditionalconfectionery chew this can compromise both taste and texture. The Group uses a blend of prebiotic solublefibres to reduce the sugars and fat traditionally used to make chews and to provide for favourableorganoleptic properties. As a result, the Group's fortified chew is reduced in sugar and fat, high in prebioticfibre, yet with the same soft texture as traditional confectionery chews. Chewable Tablets (Chewitabs™): Chewitabs™, are the Group's proprietary chewable tablets.
Chewitabs™ produce a light crunch when bitten and then form a soft chew that dissolves quickly in the
mouth and therefore can be taken without water. The Directors believe that Chewitabs™, are suited for
convenience driven OTC medicines (such as analgesics, allergy treatments, digestive aids) and medicines for
the elderly.
Dysphagia is a common problem for children and the elderly, so taking tablets may be a difficult event. Forthis reason tablets that can dissolve or disintegrated in the mouth have attracted a great deal of attention. Chewitabs™ can be manufactured using standard tablet compression equipment and pressures and have thepotential to provide additional benefits as they contain prebiotic fibres. Chewitabs™ come in a range of sizesto allow for different doses of ingredients to be incorporated. Liquid Suspension:
Gels, syrups or suspensions are widely used delivery systems for a range of medicaments and nutraceuticalsand are generally used for children's analgesics and cough and cold medicines. The Directors' experience isthat the formulation of these medicines poses a number of challenges including dispersing hydrophobicingredients, maintaining stability and providing for acceptable organoleptic properties. Typically,formulations use a range of dispersants and stabilisers and also tend to have sugars or sweeteners added forflavour enhancement. The Group has developed a suspension system for the delivery of medicines and nutraceuticals without theneed for traditional surfactant and stabiliser ingredients. The Group's suspension system not only remainsstable over time but is also adequately preserved. The Group's suspension system is based on soluble fibresthat are naturally sweet, therefore, the need for extra sweeteners is minimised, or in some instances, in theopinion of the Directors, could be avoided altogether. Moreover, given the ability of the Group's delivery system to effectively wet and disperse hydrophobicingredients, it can be manufactured via a one-step mixing process which is simpler and may offer costsavings relative to a multistep process. The Regulatory environment
ONL's delivery systems are intended for use primarily with OTC medicines and vitamin and mineralsupplements with non-novel nutraceutical ingredients and authorised medicinal products that have alreadybeen approved under the respective regulatory regimes for nutraceuticals and medicinal products by therelevant authorities in the relevant markets including the UK, EU and USA (e.g. the Food and DrugAdministration). The Group is not currently involved in applying the delivery systems to the development ofproducts containing or comprising novel nutraceutical ingredients or medicinal products not already coveredby a marketing authorisation.
Medicinal Products – By way of example and background, medicinal products in the UK are regulated by
the Medicines and Healthcare products Regulatory Agency (MHRA) and in the EU, each member state has
an equivalent national competent authority. A medicinal product may not be marketed in the EU without a
duly granted marketing authorisation. There are a number of routes to obtaining marketing authorisations for
medicinal products in the EU including the centralised route whereby an application is made to the European
Medicines Agency (EMA) for approval throughout the EU and the decentralised route whereby an initial
application is made to a ‘reference' member state and once granted, applications are made to the other
‘concerned' member states in which a marketing authorisation is sought to recognise the initial marketing
authorisation granted and hence grant an authorisation nationally. The route to be taken is partially a matter
of choice but for more high-technology medicinal products the centralised route is compulsory.
However, the Group intends that the inclusion of its delivery systems into already authorised medicinalproducts will not require the marketing authorisation holders to submit an application for a new marketingauthorisation. It is envisaged that such inclusion would instead only entail an application for a variation ofits existing marketing authorisation, which variation application would require the approval of either theEMA or national authorities (as the case may be) which, in the Directors' experience, normally takes 6 to 12months. Alternatively the Group may choose to proceed on the basis of a separate licence application in thename of a Group company as the costs and time implications of such an approach are, in the experience ofthe Directors, similar to a variation. This time frame is and will continue to be factored into the Group'sdevelopment process. Food Supplements/Foodstuffs – Food supplements in the EU/UK are governed by a system whereby
companies are responsible for any claims made on packaging for ingredients that have approved EU status.
Products should contain only prescribed vitamins and minerals and are subject to member state label and
safeguard monitoring powers. EU legislation also covers the labelling and levels of vitamins and minerals
added to foodstuffs, the labelling of foodstuffs intended for particular nutritional purposes and an EU
assessment procedure and labelling requirements for novel foods and novel food ingredients. In October
2009 new guidelines were issued by the European Food Safety Authority in respect of claims which may be
made in respect of approved ingredients.
The Group is aware of the regulatory environment in which it operates and intends only to use ingredients,ingredient claims and ingredient levels approved by these guidelines. In the event food supplementingredients require the approval of the relevant competent authorities in EU member states, the Group willwork in combination with its customers to gain such approvals. The Group has already developed data tosupport any application necessary in relation to its involvement with a calcium supplement and intends toproduce dossiers as required in respect of other food supplement products to which its delivery systems willbe applied.
Intellectual Property Portfolio
ONL, the Group's trading company, has acquired and developed the following intellectual property portfolio,consisting of the following patent applications and trademarks: Patent Family 1 – Confectionery Composition
Filing date Application No. Patent Family 2 – Delivery System
Filing date Application No. Trademark Family 1 – Ellactiva®
Life tastes great (request for assignment to Oxford Nutrascience with authorities) Trademark Family 2 – Chewitabs
The Company has applied for patents under the two patent families above, namely Patent Family 1 (entitled"confectionary compositions") and Patent Family 2 (entitled "pharmaceutical, therapeutic or nutritionaldelivery systems for functional ingredients").
Patent Family 1 Patent Family 1 contains a UK application and a European application. The UK Intellectual Property Office("UK IPO") has searched this application but not yet examined it in substance.
The claims in the European application are in the process of being examined. The original claims were thesame as the UK claims and were rejected by the European Examiner. The claims have now been amendedto distinguish over the prior art cited by the European Patent Office ("EPO") during its search. The EuropeanExaminer must now examine the amended claims and decide whether or not to accept them. There is roomto limit these claims further to create more distance between the claimed invention and the prior art cited byboth the UK IPO and the EPO, if necessary.
The recipes set out as examples within the specification of Patent Family 1 fall within current scope of claim1 in the European patent application as currently drafted for a confectionary composition. There is scope todevelop similar products based on those examples and still have those covered by this claim, either ascurrently drafted or if amended.
Patent Family 2 Patent Family 2 is still at a very early stage. A UK application was filed in April 2009. The Company hasuntil 24 April 2010 to file patent applications around the world, claiming priority from this application.
A request for a search has recently been filed, but the search results have not yet been received. The claimsfiled on the second Patent Family 2 are wide ranging and cover suspensions, chewable tablet and powdertypes of delivery systems. The Company now has the opportunity to strengthen this application so as to seekmore focused protection for the different delivery systems being developed. The Company undertakes toseek protection which covers the products made using its Technology. It is too early to form a view as whatscope of patent claims would be allowed.
While the Group currently has one product on the market (Ellactiva® calcium chews), this is based on a non-proprietary traditional chew recipe. The Group plans to develop products under Patent Family 1(confectionary chews) and Patent Family 2 (pharmaceutical, therapeutic or nutritional delivery systems) andthus the granting of the Patents Pending under Patent Family 1 and 2 are important to the success and futureprofitability of the business of the Group going forward.
Further Research and Development The Group is committed to ongoing research and development that may lead to increases in the Group'sknow-how in relation to the current delivery systems. This could lead to further patent development, eitherin manufacturing or additional embodiments of the current delivery system. The Market
The Group's delivery systems are intended for use in the growing global OTC market. The total OTC selfmedicinal market is growing particularly in the developed economies due to an ageing population. TheDirectors believe that as their patent protection expires or is about to expire, OTC brands are looking todifferentiate their products on the basis of convenience, portability and ease of use. Furthermore, dysphagia,particularly amongst children and the elderly, may, in the opinion of the Directors, drive the need for morepleasant and easier-to-take formats of OTC medicine and food supplements. According to the Datamonitor 2008 Global OTC report, the global OTC pharmaceuticals market generatedtotal revenues of US $104.2 billion in 2008, representing a compound annual growth rate of 4% for theperiod spanning 2004-2008. The market is forecast to grow to a value of US $124 billion in 2013, an increaseof 19% from 2008. The OTC medicinal market consists of the following: traditional medicines (20%), cough and coldpreparations (15.5%), vitamins and minerals (12.5%), indigestion preparations (10.4%), analgesics (10.2%)and other OTC healthcare products including medicated skin products and topical OTC medicines. The Directors' target market for the Chewitabs™ and liquid suspension delivery systems are OTCanalgesics, indigestion preparations and cough and cold medicines. The global market for these totalledapproximately $38bn in 2008. The global market for vitamins and minerals, the Directors' target market forthe chewy confectionery delivery system, totalled £13bn in 2008.
There is evidence to suggest that consumers are increasingly willing to self-medicate, both for convenienceand the cost savings associated with self-medication. New regulations are changing OTC retail channels andsales processes, including the range of products on offer. Also, governments and healthcare providers arepromoting self-medication, viewing the process as a tool to help contain healthcare expenditure. Therefore,the Directors believe that the OTC medicinal market holds potential for continued growth in both developedand emerging markets.
Market Needs As evidenced by activity in the patent space, OTC medicine companies are engaging in the development ofnew medicine delivery systems including gels, emulsions and mouth soluble tablets. Importantly, many patients and consumers find it difficult to swallow tablets and hard gelatin capsules, which can lead to themnot taking their medicines as prescribed. Dysphagia is not only a common problem among the elderly and children, but with all age groups who areill, in bed or on the go. For this reason, tablets that can dissolve or disintegrate in the mouth have attracteda great deal of attention and are an important and attractive alternative to liquid dosage forms. Mouthdissolving tablets are not only suitable for people who have difficulty in swallowing, but also for conditionsof administration where water is not available. For children, syrups that have a nice taste are more appropriate, however, they can be difficult to formulateand stabilise as some medicinal actives are not as stable in liquid form as they are in solid form. The Directors intend to commercialise the Group's intellectual property portfolio through a combination of(a) direct product sales to consumer healthcare companies and distributors, primarily in the vitamins sectorand (b) establishing licenses for its technology with key medicine brand owners on a regional or global basis. The Group currently has one confectionery chew on the market (Ellactiva® calcium chews) and is preparingto have further chews available for commercial sale during 2010, along with advancing development of arange of Chewitab™ based supplements. Currently the Group's medicine development work is focusing onibuprofen suspension and chewable allergy tablets incorporating loratadine. The Group has already engagedin initial discussions with worldwide consumer healthcare companies and has a confidential disclosureagreement in place with a consumer healthcare company to discuss a joint development agreement. The Directors intend to focus the Group's research and development on producing preliminary proof ofconcept product dossiers aimed at facilitating the obtaining by potential partners of the necessary regulatoryapprovals for that partner's products incorporating the Technology as part of development projects with thatpartner. This would be anticipated to lead to a full licence agreement to launch the relevant product in thechosen regions. History and Background on the Group
ONL was incorporated on 8 February 2008 with the aim of developing and commercialising delivery systemsfor medicines and supplements leveraging prebiotic soluble fibre technology. Initially ONL received an investment of £75,000 in order to cover its initial costs and the costs relating tothe acquisitions of the Ellactiva® intellectual property and the Patent Family 1 from Superfoods Limited.
Subsequently during May and August 2008 ONL undertook a number of private fundraising rounds andsecured net proceeds of £1.039 million in early stage funding for the purpose of providing working capitalfor the Group to undergo research and development of the technology.
On 27 January 2010 ONG acquired the entire issued share capital of ONL pursuant to the terms of the ShareExchange Agreement details of which are set out in paragraph 13 of Part VI of this document, and as suchONL is a wholly owned subsidiary of the Company. The Board comprises 1 Executive Director, 1 Non-Executive Chairman, I Non-Independent Non-ExecutiveDirector and 1 Independent Non-Executive Director whose details are as follows: Marcelo Bravo, Non Executive Chairman, Age 50
Marcelo Bravo is a founder of Oxford NutraScience and an entrepreneur with a background in chemistry andchemical engineering and international experience with blue-chip companies. Marcelo spent 16 years inR&D with The Procter & Gamble Company and subsequently spent 3 years in corporate development withBoots (now Boots Alliance Plc). After this he became an entrepreneur and most recently was CEO and Boarddirector of Oxford Advanced Surfaces Group Plc, a company he led from inception as a spin-out fromOxford University which is now quoted on the AIM market. Marcelo has experience in developing, launching and growing new products and businesses across a range of both geographic and product markets.
Marcelo holds a B.A. in Chemistry from the College of Wooster, USA and a B.Sc. in Chemical Engineeringfrom Case Western Reserve University, USA and an M.Sc in Management from the London BusinessSchool.
Nigel Theobald, Chief Executive Officer, Age 45
Nigel Theobald has a background in marketing and product development in the OTC consumer healthcaremarket as well as considerable business development experience with blue chip companies. Nigel workedfor Boots (now Boots Alliance Plc) for 13 years in a number of commercial and strategic roles includingCategory Manager for OTC Medicines and Head of Healthcare Brand Development. Nigel set up aconsultancy to advise ingredient technology firm Alltracel to launch new products and establish commercialpartnerships and worked closely with established health care brands prior to setting up Omscan Ltd, aconsumer healthcare production distribution business in the UK, which he sold in 2008. Nigel holds a B.Scin Economics from Southampton University.
Mike Bretherton, Finance Director, Age 54
Michael Bretherton graduated in Economics from University of Leeds in 1978. He worked as an accountantand manager with PriceWaterhouse for seven years in both London and the Middle East . He subsequentlyworked for The Plessey Company Plc before being appointed finance director of the fully listed BridgendGroup Plc in 1988 where he was involved in the strategic evaluation and commercial implementation of abroad range of business initiatives over a twelve year period. More recently he has worked at the propertyand services company, Mapeley Limited as financial operations director and then at the entertainmentsoftware games developer, Lionhead Studios Limited, in 2002 where he helped to complete a Venture Capitalsyndicate funding and also a trade sale of the business to Microsoft in 2006. Michael is currently an executivedirector of ORA Capital Partners Limited and is also a director for a number of other AIM quoted companies. James White, Non Executive Director, Age 39
James White has extensive experience in operations, product development, regulatory, sales and marketing and general management. James worked for Osmetech Plc for 11 years in a number of senior positionsincluding as Chief Executive for the period 2000 to 2009. Osmetech has operations in the UK and USA andis focused on providing molecular diagnostic technologies through a global sales distribution network.
James has a track record of mergers and acquisitions, disposals and fundraising in the UK, USA and Europeand was previously a senior consultant in Arthur D Little's corporate finance practice where he specialisedin advising on investments in small and medium sized companies.
Summary Financial Information
ONG was incorporated on 7 October 2009 with a called up share capital of £2 and the Company has nottraded since its incorporation. On 27 January 2010 it acquired ONL in an all equity transaction pursuant tothe Share Exchange Agreement. ONL is a wholly owned subsidiary of the Company.
Since the date of incorporation of ONG, it has not yet commenced operations, incurred neither profit nor lossand (save for its acquisition of and current 100% interest in the shareholding of ONL and the incorporationof Oxford Nutra, a dormant subsidiary) has no material assets or liabilities and no financial statements havebeen made up. Accordingly, there is no financial information relating to ONG contained in this document.
The financial information set out in the table below has been extracted from the historical financialinformation of ONL included in Part IV and V of this document. Shareholders should read the full historicalfinancial information in Parts IV and V and not rely solely upon the summary below: From 8 February 8 months to 31 December Cash and cash equivalent balances amounted to £844,000 at 31 August 2009.
Going forward, whilst the Company is preparing audited accounts on ONL for the period ended31 December 2009, no audited accounts will be prepared at that date for ONG on the basis that the Companywas not trading at that date. ONG intends for its first accounting period to be a 15 month accounting periodending 31 December 2010. On this basis ONG's first published accounts will therefore be the unauditedinterim accounts for the period ending 30 June 2010. These interim results will be released by 30 September2010.
The audited financial results for ONL for the period ended 31 December 2009 are expected to be announcedby 31 May 2010.
Current Trading and Prospects
Since 31 August 2009, ONL has traded in line with management expectations. Following Admission, theGroup will have cash resources of approximately £1.5 million after paying expenses of the Placing andAdmission.
Placing and Admission
The Company proposes to raise £1.1 million (before expenses) by the issue of 62,857,148 Placing Shares atthe Placing Price pursuant to the Placing. The Placing has been arranged by ZAI, as agent for the Company.
The Placing is not being underwritten or guaranteed. The Placing Shares will, on issue, rank pari passu inall respects with the Existing Ordinary Shares, including the right to receive all dividends or otherdistributions thereafter declared made or paid. At the Placing Price, the Company will have a marketcapitalisation of approximately £8.1 million on Admission.
The Placing is being effected through and in accordance with the terms and conditions of the PlacingAgreement, full details of which are set out in paragraph 13 of Part VI of this document. Application has been made to the London Stock Exchange for Admission of the Enlarged Issued ShareCapital to trading on AIM and it is expected that trading will commence in the Ordinary Shares on12 February 2010.
Reasons for the Placing, Admission and use of Proceeds
The net proceeds of the Placing will be used primarily to provide funds needed by the Group to develop andgrow the existing business and to provide funding for future research and development in line with thebusiness strategy.
The Directors believe that the profile of the Company will be enhanced by its position as an AIM company.
It will also, inter alia, provide a more liquid market for its shares.
Grant of New Options
As part of the ONL Acquisition, the Company granted to Nigel Theobald, in substitution for his ONLOption, the Theobald Option under which he may subscribe for up to 7,500,000 Ordinary Shares in theCompany at an exercise price of 1.6p per share. The Theobald Options will vest subject to the following conditions, and in the following proportions: in respect of 1,875,000 Ordinary Shares, immediately upon Admission (in line with one of the vestingconditions under the Theobald ONL option); in respect of 3,750,000 Ordinary Shares, as follows provided that Mr Theobald has, for the continuousperiod since 1st January 2009 until the relevant date, remained an employee: in respect of 1,250,000 Option Shares, on 1st January 2010; and in respect of 1,250,000 Option Shares, on 1st January 2011; and in respect of 1,250,000 Option Shares, on 1st January 2012; in respect of 1,875,000 Ordinary Shares, subject to Mr Theobald continuing to be an employee at thetime, immediately upon the satisfaction of either one of the following conditions: where, within four years of 3 April 2009 (being the date upon which the Theobald ONL Optionwas granted), there is a sale (as defined by the EMI Scheme) which values the Company inexcess of £30,000,000; or where in any continuous twelve month period within four years of 3 April 2009 (being the dateupon which the Theobald ONL Option was granted) the Company achieves an aggregate grossrevenue from commercial trading activities (including without limitation revenue derived fromthe provision of services, consultancy fees, sales or products and licensing of its intellectualproperty but not for the avoidance of doubt any capital investments in the Company) of£2,500,000 or more or starts to generate distributable profits (within the meaning of the CA2006). The Theobald Option was granted to Nigel Theobald under the terms of the EMI Scheme.
EMI Option Scheme
The EMI Option Scheme will allow the grant of options to eligible employees of the Group, which includesexecutive directors and employees. To date, the Company has granted Options under the EMI Scheme toNigel Theobald in substitution for the Theobald ONL Option held by him at the date of the ONL Acquisition.
There are currently no proposals to grant any other options under the EMI Option Scheme. Further detailsof the rules of the EMI Option Scheme are set out in paragraph 12 of Part VI of this Document.
The Unapproved Option Scheme
The Unapproved Option Scheme will allow the grant of options to all directors and employees of the Group.
There are currently no proposals to grant any options under the Unapproved Option Scheme. Further detailsof the rules of the Unapproved Option Scheme are set out in paragraph 12 of Part VI of this Document Lock-in and Orderly Market Arrangements
The Directors and their connected persons, and certain other Shareholders, have undertaken, save in certainlimited circumstances (as permitted by the AIM Rules for Companies), not to dispose of any of theirOrdinary Shares for a period of twelve months after Admission. Any disposal of Ordinary Shares by theparties subject to these lock-in arrangements before the second anniversary of Admission will be madethrough the Company's broker, from time to time, in such orderly manner as the Company's broker shallreasonably determine. The number of Ordinary Shares in issue at Admission, which will be subject to suchrestrictions is 326,038,066, representing approximately 70.26 per cent. of the Enlarged Issued Share Capital. Further details of these arrangements are set out in paragraph 13 of Part VI of this Document.
Relationship Agreement
On Admission, ORA will hold Ordinary Shares representing approximately 34.89 per cent. of the EnlargedIssued Share Capital and the Concert Party, to which ORA is a party, will hold 48.75 per cent. Furtherinformation on the Concert Party is included in Part II of this document.
The Directors are satisfied that the Company is capable of carrying on its business independently of ORAand that all transactions and relationships between ORA and the Company are and will continue to be atarm's length and on commercial terms.
To ensure that Shareholders are adequately protected in this regard, the Company has entered into theRelationship Agreement with ORA. Pursuant to the Relationship Agreement, ORA has given certainundertakings to the Company to the effect that the Board can amongst other things operate on an independentbasis. In considering any proposed arrangements or contracts between ORA and the Company, MichaelBretherton is not considered to be independent of ORA and will abstain from voting on any sucharrangements or contracts at any Board meeting of the Company. Further details of the RelationshipAgreement are set out in paragraph 13 of Part VI of this document.
City Code on Takeovers and Mergers
The terms of the proposals set out in this letter give rise to certain considerations under the City Code. Briefdetails of the Panel, the City Code and the protection they afford are given below.
The City Code does not currently have the full force of law. It has, however, been acknowledged by bothgovernment and other regulatory authorities that those who seek to take advantage of the facilities of thesecurities markets in the United Kingdom should conduct themselves in matters relating to takeovers (andrelated transactions) in accordance with high business standards and according to the City Code.
The City Code is issued and administered by the Panel. The City Code applies to all listed or unlisted publiccompanies registered in the United Kingdom (and to private companies in certain circumstances) and, wherenot listed on a regulated market, are considered by the Panel to have their place of central management andcontrol in the United Kingdom. The Company is a public company registered in the United Kingdom andmanaged and controlled in the United Kingdom and as such its Shareholders are therefore entitled to theprotections afforded by the City Code.
Under Rule 9 of the City Code, where any person acquires, whether by a single transaction or a series oftransactions over a period of time, an interest in shares which (taken together with shares in which personsacting in concert with him are interested) carry 30 per cent. or more of the voting rights of a company, thatperson is normally required by the Panel to make a general offer, in cash, to the shareholders of that companyto acquire the balance of the equity share capital and any other class of transferable security carrying votingrights of the company at the highest price paid by that person or any person acting in concert with him in theprevious 12 months.
Rule 9 of the City Code further provides that, inter alia, where any person who, together with persons actingin concert with him is interested in shares which in aggregate carry, not less than 30 per cent. of the votingrights of a company but does not hold shares carrying not more than 50 per cent. of such voting rights andsuch person, or any such person acting in concert with him, acquires an interest in additional shares whichincrease his percentage of shares carrying voting rights, such person is normally required by the Panel tomake a general offer to the shareholders of that company to acquire the balance of the equity share capitaland every other class of transferable security carrying voting rights of the company at the highest price paidby that person or any person acting in concert with him in the previous 12 months.
Under the City Code, a concert party arises when persons who, pursuant to an agreement or understanding(whether formal or informal), co-operate to obtain or consolidate control of that company. Under the CityCode, control means an interest, or aggregate interests, in shares carrying 30 per cent. or more of the votingrights of a company, irrespective of whether the interest or interests gives de facto control.
Before Admission, the Concert Party will, in aggregate, be interested in 175,166,650 Ordinary Shares,representing approximately 43.67 per cent. of the then issued ordinary share capital of the Company. Thesubscription for and issue of the Placing Shares to certain members of the Concert Party would normallyresult in an obligation on the part of the Concert Party under Rule 9 of the City Code to make a general offer,in cash, to the shareholders of the Company to acquire the balance of the Ordinary Shares at the highest pricefor Ordinary Shares paid by any member of the Concert Party in the previous 12 months. Details of each ofthe members of the Concert Party, and their interests in the Company are set out below. FollowingAdmission, the Concert Party will, in aggregate, be interested in 226,240,666 Ordinary Shares, representingapproximately 48.75 per cent. of the then issued ordinary share capital of the Company. A waiver of an obligation on a concert party, individually or collectively, to make a general offer under Rule9 of the City Code is normally granted if certain requirements of the City Code ("the Waiver Requirements")are complied with. The Waiver Requirements are that details of the concert party and the prospectiveholdings of the concert party are given to shareholders and the issue of shares to that concert party isapproved either (a) by the passing of an ordinary resolution of the Independent Shareholders or (b) in writingby such number of the Independent Shareholders as hold 50 per cent. or more of the voting rights attachedto the shareholdings of the Independent Shareholders. The Panel has been consulted and has agreed that it will not require the Concert Party, individually
or collectively, to make a general offer for shares in the Company which might otherwise arise as a
result of the Placing, on the basis that 100 per cent. of the Independent Shareholders have approved
the Waiver Requirements in writing as permitted by the Code.
Following Admission the Concert Party will continue to be considered to be acting in concert by the Paneland so, as outlined above, if any member of the Concert Party acquires an interest in additional OrdinaryShares which increase his percentage of shares carrying voting rights, the Concert Party would normallyrequired by the Panel to make a general offer to the shareholders of the Company to acquire the balance ofthe equity share capital in the Company and every other class of transferable security carrying voting rightsof the Company at the highest price paid by any member of the Concert Party in the previous 12 months.
Further information on the Concert Party is included in Part II of this document.
It is the intention of the Board to achieve Shareholder capital growth. In the short term, the Board intends toreinvest any future profits in the Company and, accordingly, is unlikely to declare dividends in theforeseeable future. The Directors will review the dividend policy in due course The declaration and payment of dividends by the Company will be subject to the provisions of the CA 2006and the Articles.
Corporate Governance
The Directors recognise the importance of sound corporate governance and intend that the Company shallcomply with the main provisions of the QCA Guidelines for AIM Companies so far as the same areappropriate for and apply to a company of the Company's size, nature and stage of development.
The Board is responsible for formulating, reviewing and approving the Company's strategy, budgets andcorporate actions. Following Admission, the Company intends to hold Board meetings at least 4 times ineach financial year and at other times as and when required. Upon Admission, the Company will establish an audit committee and a remuneration committee withformally delegated duties and responsibilities.
The audit committee will initially comprise Marcelo Bravo and James White, with Marcelo Bravo asChairman. It will be responsible for ensuring that the financial performance, position and prospects of theCompany are properly monitored and reported on and for meeting the auditors and reviewing their reportsrelating to accounts and internal controls.
The remuneration committee will initially comprise James White and Marcelo Bravo, with James White asChairman. It will review the performance of the Executive Directors and set their remuneration and thepayment of bonuses to executive directors and consider the future allocation of share options to directors andemployees.
Share dealing Code
The Company has adopted a Model Code for Directors' dealings in securities of the Company which isappropriate for a company quoted on AIM. The Directors will comply with Rule 21 of the AIM Rulesrelating to directors' dealings and will take all reasonable steps to ensure compliance by the Group's"applicable employees" (as defined in the AIM Rules).
The Directors having made due and careful enquiry and taking into account the net proceeds of the Placingand existing cash resources available to the Group, are of the opinion that the Group will have sufficientworking capital available to it for its present requirements, that is for at least twelve months from the date ofAdmission.
Admission, Settlement and CREST
Application has been made to the London Stock Exchange for all of the Existing Ordinary Shares and thePlacing Shares to be admitted to trading on AIM. Admission is expected to become effective and trading inthe Enlarged Issued Share Capital to commence on 12 February 2010. CREST is a paperless settlement system enabling securities to be evidenced otherwise than by certificate andtransferred otherwise than by written instrument in accordance with the Regulations. The Articles permit theOrdinary Shares to be evidenced in uncertificated form in accordance with the Regulations.
The Directors have applied for the Ordinary Shares to be admitted to CREST with effect from Admissionand Euroclear has agreed to such admission. Accordingly, settlement of transactions in the Ordinary Sharesfollowing Admission may take place within the CREST system if the relevant shareholders so wish. CRESTis a voluntary system and holders of Ordinary Shares who wish to receive and retain share certificates willbe able to do so.
Following Admission, share certificates representing the Placing Shares are expected to be despatched bypost to placees who do not wish to receive shares in uncertificated form, by no later than 26 February 2010,at the relevant placee's sole risk. The CREST accounts of placees who have duly elected to receive theirOrdinary Shares in uncertificated form are expected to be credited to the designated CREST account on12 February 2010. The Company's Registrars, Capita Registrars, are responsible for keeping the Company'sregister of members.
General information regarding UK taxation in relation to the Admission and the Placing is set out inparagraph 18 of Part VI of this document. These details are, however, intended only as a general guide to thecurrent position under UK taxation law. If investors are in any doubt as to their tax position or who aresubject to tax in jurisdictions other than the UK are strongly advised to consult their own independentfinancial advisor immediately.
Risk Factors
Shareholders should consider carefully the Risk Factors set out in Part III of this document in addition to theother information presented.
Your attention is drawn to the information included in the rest of this document. In particular, you are advisedto carefully consider the Risk Factors contained in Part III of this document.
INFORMATION ON THE CONCERT PARTY
Concert Party Holding of New Ordinary in Enlarged Ordinary in Enlarged Group under option on a fully Concert Party Members Admission the Placing Admission diluted basis Richard Griffiths (*) 0.00 14,285,700 14,285,700 5,142,900 42,642,900 33.24 28,571,400 161,904,725 Annabel Ede-Golightly Michael Bretherton (* ) Beatrice Hollond (*) James Ede-Golightly (* ) 43.67 51,074,016 226,240,666
Richard Griffiths, Michael Bretherton, James Ede-Golightly and Beatrice Hollond are directors of ORA Capital Partners, whichowns 100 per cent. of the issued share capital of ORA James Ede-Golightly and Michael Bretherton are also directors of ORA As the Concert Party will, immediately after Admission, be interested in more than 30 per cent. of the votingrights of the Company but less than 50 per cent. of the voting rights of the Company then if any member ofthe Concert Party were to acquire any additional Ordinary Shares which increases the percentage of votingrights held by the Concert Party (or any person deemed to be acting in concert with it), then the Concert Partywill normally be obliged to make a general offer, in cash, to all the Shareholders pursuant to Rule 9. Other than under the Share Exchange and under the Placing, neither ORA, nor any person who would bedeemed to be acting in concert with it, has purchased Ordinary Shares during the 12 months immediatelypreceding the date of this document. ORA has entered into the Relationship Agreement with the Company under which it has, inter alia, agreedthat the Board can amongst other things operate on an independent basis. In considering any proposedarrangements or contracts between ORA and the Company, Michael Bretherton is not considered to beindependent of ORA and will abstain from voting on any such arrangements or contracts at any Boardmeeting of the Company. Further details of the Relationship Agreement are set out in paragraph 13 of PartVI of this document.
The Concert Party is principally based at PO Box 19 Albert House, South Esplanade, St Peter Port, Guernsey,GY1 3AJ ORA and ORA Capital Partners
ORA is a company incorporated and domiciled in Guernsey and is a wholly owned subsidiary of ORACapital Partners.
ORA Capital Partners is a holding and management company, incorporated and domiciled in Guernsey, theprincipal activity of which is the development and growth of trading businesses within the technology,resources and financial services sectors. ORA Capital Partners may also develop businesses in other sectorsthat provide appropriate value enhancing opportunities.
The following directors of ORA also own shares directly in the Company: Michael Bretherton and JamesEde-Golightly. The following directors of ORA's parent company, ORA Capital Partners, also owns sharesin the Company: Richard Griffiths, Beatrice Hollond, Michael Bretherton and James Ede-Golightly.
Richard has common employer history with the following shareholders of the Company – MichaelBretherton (ORA Capital Partners), Beatrice Hollond (ORA Capital Partners) and James Ede-Golightly(ORA Capital Partners). Richard is also a director of ORA Capital Partners. Beatrice has common employer history with the following shareholders of the Company – MichaelBretherton (ORA Capital Partners), Richard Griffiths (ORA Capital Partners) and James Ede-Golightly(ORA Capital Partners). Beatrice is also a director of ORA Capital Partners.
Michael Bretherton (Director of ONG)
Michael is a director of the Company and a director of both the Company's major shareholder, ORA and itsparent company, ORA Capital Partners. Michael has common employer history with the followingshareholders of the Company: Richard Griffiths (ORA Capital Partners), Beatrice Hollond (ORA CapitalPartners), and James Ede-Golightly (ORA and ORA Capital Partners). Robert is deemed to be acting in concert with ORA solely by virtue of him having an interest of greater than20 per cent. in the total issued share capital of ORA Capital Partners. Annabel is the mother of James Ede-Golightly, a director of both ORA and its parent company, ORA CapitalPartners.
James has common employer history with the following shareholders of the Company – Michael Bretherton(ORA and ORA Capital Partners), Richard Griffiths (ORA Capital Partners) and Beatrice Hollond (ORACapital Partners). James is also a director of ORA and ORA Capital Partners. Nikki is an employee of ORA Capital, a wholly owned subsidiary of ORA Capital Partners.
Erin is the Company Secretary of ONG and an employee of ORA Capital, a wholly owned subsidiary ofORA Capital Partners.
Will is an employee of ORA Capital, a wholly owned subsidiary of ORA Capital Partners.
Information on ORA and ORA Capital Partners
Incorporation and registered office ORA was incorporated and registered in Guernsey with registered number 49949 on 23 January 2009.
ORA is domiciled in Guernsey. The registered office and principal place of business of ORA is AlbertHouse PO Box 19, South Esplanade St Peter Port Guernsey, GY1 3AJ.
ORA's principal activity is that of a holding company.
ORA Capital Partners was incorporated and registered in Guernsey with registered number 49907 on12 January 2009. On 16 March 2009 ORA Capital Partners was admitted to trading to AIM.
ORA Capital Partners is domiciled in Guernsey. The registered office and principal place of businessof ORA Capital Partners is PO Box 19, Albert House, South Esplanade, St Peter Port, Guernsey,GY1 3AJ.
ORA Capital Partners is a holding and management company, the principal activity of which is thedevelopment and growth of trading businesses within the technology, resources and financial servicessectors. ORA Capital Partners may also develop businesses in other sectors that provide appropriatevalue enhancing opportunities.
Share Capital ORA has an unlimited authorised share capital, of which two ordinary shares had been issued to ORACapital Partners at the date of this document.
ORA Capital Partners has an authorised share capital of £1,750,000 divided into 175,000,000 ordinaryshares of 1 pence each of which 100,000,000 had been issued at the date of this document.
No adverse material change In the opinion of the directors of ORA and ORA Capital Partners, there has been no adverse material changein the financial position of ORA or ORA Capital Partners since 31 July 2009 (being the date to which thelatest unaudited interim accounts of ORA Capital Partners were prepared).
Risk Factors
The Directors believe that an investment in the Ordinary Shares may be subject to a number of risks.
Shareholders and prospective investors should consider carefully all of the information set out in this
document and the risks attaching to an investment in the Company, including in particular the risks
described below (which are not set out in any order of priority), before making any investment
decisions. The information below does not purport to be an exhaustive list. Shareholders and
prospective investors should consider carefully whether an investment in Ordinary Shares is suitable
for them in the light of information in this document and their personal circumstances.
The Ordinary Shares should be regarded as a highly speculative investment and an investment in
Ordinary Shares should only be made by those with the necessary expertise to fully evaluate the
investment. Prospective investors are advised to consult an independent adviser authorised under the
Financial Services and Markets Act 2000.
If any of the following risks relating to the Group were to materialise, the Group's business, financial
condition and results of future operations could be materially adversely affected. In such cases, the
market price of the Ordinary Shares could decline and an investor may lose part or all of its
investment. Additional risks and uncertainty not presently known to the Directors, or which the
Directors currently deem immaterial, may also have an adverse effect upon the Company or the
Group.
In addition to the usual risks associated with an investment in any company, the Directors consider the
following risk factors to be significant to potential investors.
Risks relating to the Group
Early Stage of Operations The Group will, when formed, be at an early stage of development. The commencement of the Group'smaterial revenues is difficult to predict and there is no guarantee that the Group will generate any materialrevenues in the foreseeable future. The Group has a limited operating history upon which its performanceand prospects can be evaluated and faces the risks frequently encountered by developing companies. Therisks include the uncertainty as to which areas to target for growth. There can be no assurance that the Groupproposed operations will be profitable or produce a reasonable return, if any, on investment.
Research and Development risk The Group will be engaged in trying to develop delivery systems (some of which are hoped will be novel)for medicines and supplements to address specific market needs identified by the Directors from time totime. The Group will therefore be involved in complex scientific areas and new product development andindustry experience indicates a very high incidence of delay or failure to produce results. The Group maynot be able to develop new technology solutions or identify specific market needs that can be addressed bytechnology solutions developed by the Group. The ability of the Group to develop new technology reliespartly on the recruitment of appropriately qualified staff and engagement of third parties as the Group grows.
The Group may be unable to find a sufficient number of appropriately highly trained individuals to satisfyits growth rate which could affect its ability to develop new technologies as planned. In addition, newmedical and supplement products may face potential regulatory barriers which, by their nature, will vary, forexample, by application, geography, volume of business and thus which are difficult to anticipate at present.
Intellectual Property Protection Going forward the Group plans to develop products under Patent Family 1 (confectionary chews) and PatentFamily 2 (pharmaceutical, therapeutic or nutritional delivery systems) and thus the granting of the patentspending under Patent Family 1 and 2 are vital to the success of the business of the Group going forward.
The commercial success of the Group will largely depend on its ability to protect and enforce its IntellectualProperty Rights so as to preserve its exclusive rights in respect of the Technology and to preserve theconfidentiality of its own and collaborators' know-how. The Group may not be able to protect and preserveits Intellectual Property Rights or to exclude competitors with competing technology products, including theapplication under Patent Families 1 and 2.
The Group will seek to rely on patents to protect its market position. Patents are a monopoly right and areterritorial. They grant to the successful applicant the exclusive right in the country or territory in which thepatent is granted to prevent others in that territory from, amongst other things making, offering, putting onthe market or using a product, which is the subject matter of a patent, and from using a process which is thesubject matter of a patent. No assurance can be given that others will not gain access to the Group's un-patented proprietary technology and/or disclose such technology or that the Group can ultimately protectmeaningful rights to such un-patented technology. The Group's Intellectual Property Rights portfolio does not currently comprise granted patents but insteadcomprises applications for patents. There is no guarantee the Group will obtain granted patents for theinventions set out in the patent applications under any or all of the Patent Families 1 and 2 which have beenfiled under Patent Families 1 and 2, or in relation to any other patent application that it may file. There is noguarantee that the Group will develop other patentable products or processes. Once granted, a patent can be challenged both in the patent office and in the courts by third parties. Thirdparties can bring material and arguments which the patent office granting the patent may not have seen.
Therefore, issued patents may be found by a court of law or by the patent office to be invalid orunenforceable or in need of further restriction. A substantial cost may be incurred if the Group is required to assert its Intellectual Property Rights, includingany patents or trade marks against third parties. Patent litigation is costly and time consuming and there canbe no assurance that the Group will have, or will be able to devote, sufficient resources to pursue suchlitigation. Potentially unfavourable outcomes in such proceedings could limit the Group's IntellectualProperty Rights and activities. There is no assurance that obligations to maintain the Group's or its own orits collaborators' know how would not be breached or otherwise become known in a manner which providesthe Group with no recourse.
Any claims made against the Group's Intellectual Property Rights, even without merit, could be timeconsuming and expensive to defend and could have a materially detrimental effect on the Group's resources.
A third party asserting infringement claims against the Group and its customers could require the Group tocease the infringing activity and/or require the Group to enter into licensing and royalty arrangements. Thethird party could also take legal action which could be costly. In addition, the Group may be required todevelop alternative non-infringing solutions that may require significant time and substantial unanticipatedresources. There can be no assurance that such claims will not have a material adverse effect on the Group'sbusiness, financial condition or results.
The term of a patent is, generally speaking, fixed. Where time is expended in research and development ona product after the patent application has been filed, then this will reduce the period of exclusivity affordedto any marketed product by any patent.
No assurances can be given that any pending or future trade mark applications will result in granted trademark registrations, that the scope of any copyright, trademark protection will exclude competitors or provideadvantages to the Group, that third parties will not in the future claim rights in or ownership of the copyright,patents and other proprietary rights from time to time held by the Group.
Further, there can be no assurances that others have not developed or will not develop similar or competingproducts, duplicate any of the products of the Group or design around any pending patent application orpatents (if any) subsequently granted in favour of the Group. Other persons may hold or receive patentswhich contain claims having a scope that covers products developed by the Group (whether or not patentsare issued to the Group).
Risks arise where third parties own relevant Intellectual Property Rights which may cover the Group'sactivities. The commercial success of the Group may also depend in part on the Group not infringingIntellectual Property Rights owned by third parties. If this is the case or is likely to be the case, the Groupmay have to obtain appropriate licences of the third party's Intellectual Property Rights or challenge thevalidity of such Intellectual Property Rights in the courts. Alternatively, the Group may have to cease certainactivities or processes or alter them or develop or obtain alternative products and processes, so as to avoidthe third party rights. Developing such alternatives can be costly and time consuming and may requiresubstantial unanticipated resource. If a third party asserts infringement claims in the courts, (even if withoutmerit) then this could be costly and/or take up valuable management time. Where the Group benefits fromany licences of third party Intellectual Property Rights, then it may lose that licence unless it complies withits terms. The Group may face significant competition from organisations which have greater capital resources thanthe Group. There is no assurance that the Group will be able to compete successfully in such a market place.
Dependence on arrangements with third parties The Group may enter into arrangements with third parties in respect of the development, production,marketing and commercialisation of its products where appropriate. An inability to enter into sucharrangements or disagreements between the Group and any of its potential collaborators could lead to delaysin the Group's product development and/or commercialisation plans and this may have a significant adverseeffect on the Group's business, financial condition and results.
Risk that the products will not achieve commercial success There can be no assurance that any of the Group's products currently in development will be successfullydeveloped into any commercially viable product or products, meet applicable regulatory standards and/or bemanufactured in commercial quantities at an acceptable cost or be marketed successfully and profitably. Ifthe Group or its collaborators encounter delays at any stage of development and fail to successfully addresssuch delays there may be material adverse effect on the Group's business, financial condition, and results.
In addition, the success of the Group will depend on the market's acceptance of its products and there canbe no guarantee that this acceptance will be forthcoming or that the Group's technologies will succeed as analternative to other new products. The development of a market for the products is affected by many factors,some of which are beyond the Group's control, including the emergence of newer, more successfultechnologies and products and the cost of the Group's products themselves. Notwithstanding the technicalmerits of a product developed by the Group, there can be no guarantee that the Group's targeted customerbase for the product will purchase or continue to purchase the product. If a market fails to develop ordevelops more slowly than anticipated, the Group may be unable to recover the losses it may have incurredin the development of its products and may never achieve profitability. In addition, the Directors of theCompany cannot guarantee that the Group will continue to develop, manufacture or market its products ifmarket conditions do not support the continuation of such product.
Government regulation may cause increased costs and delays in developing/ marketing/commercializingthe Group's Technology The Group is subject to extensive regulation. The Medicines and Healthcare products Regulatory Agency("MHRA") governs medicinal products in the UK and each EU member state has an equivalent nationalcompetent authority. A medicinal product may not marketed in the EU without a duly granted marketingauthorisation. The MHRA, the European Medicines Agency ("EMeA") and other national regulatoryauthorities require rigorous pre-clinical testing, clinical studies and other procedures prior to approvingmedicinal products for human use. Numerous regulations also govern the manufacturing, safety, labelling,storage, record keeping, reporting and marketing of such medicinal products. These requirements varywidely from country to country, as does the time required to complete pre-clinical testing and clinical studiesand to obtain regulatory approvals to sell medicinal products (or to vary approvals for medicinal products).
The process of obtaining these approvals and complying with applicable government regulations is time consuming and expensive and the applicable requirements vary widely from country to country, as does thetime required to complete pre-clinical testing and clinical studies. If the MHRA or other applicable regulatory authorities change their regulatory policy or adopt additionalregulations during product development (for instance by increasing the number of clinical studies requiredfor the approval of medicinal products), the Group's commercial partners could face increased costs andsignificant development delays before they would be able to sell their products which use the Group'sTechnology commercially. The products that the Group's commercial partners market and sell would require existing authorisations tobe varied to incorporate the Group's Technology, however there can be no guarantee that such variation willbe approved in the anticipated time-frames or at all and thus the Group may not be able to commercialise itsTechnology. Furthermore, as above the current regulatory framework which governs variations may changeand the Group's intended method of commercialisation may be deemed to require its commercial partners tomake applications for new marketing authorisations of existing products and this would have severe timingissues which could hinder the Group's operations and profitability. Additional capital and dilution The Group may require additional capital in the future for expansion and/or business development whichmay significantly dilute the interests of existing Shareholders. If the Group is unable to obtain financing onterms acceptable to it then it may be forced to curtail its planned development. If additional funds are raisedthrough the issuance of new equity or equity-linked securities of the Company other than on a pro rata basisto existing Shareholders, the percentage ownership of Shareholders may be reduced. There can be noguarantee that any further capital raisings will be successful.
There can be no assurance as to the level of future dividends. The declaration, payment and amount of anyfuture dividends of the Company are subject to the discretion of the Shareholders or, in the case of interimdividends to the discretion of the Directors, and will depend upon, among other things, the Company'searnings, financial position, cash requirements, availability of profits, as well as provisions for relevant lawsor generally accepted accounting principles from time to time.
This document contains certain forward-looking statements that are subject to certain risks and uncertainties,in particular statements regarding the Group's plans, goals and prospects. These statements and theassumptions that underlie them are based on the current expectations of the Directors and are subject to anumber of factors, many of which are beyond their control. As a result, there can be no assurance that actualperformance of the Group will not differ materially from the matters described in this document.
Financial risk There are a number of financial risks which are outside the control of the Group and which can affectrevenues and/or costs, although the Group could hedge against such risks if it so desired. These includeinternational exchange rates, interest rates, world commodity prices which in turn affect energy supplies andraw materials changes in world prices of biodiesel, inflation and international trends in trade, tariffs and pro-tectionism and changes in the legal and regulatory framework, under which the Group intends to operate itsbusiness, including the regulation published by the MHRA and the EFSA.
Legal Risk Legal risks include the inability to enforce security arrangements, an absence of adequate protection forIntellectual Property Rights, an inability to enforce foreign judgments, absence of a choice of law, and aninability to refer disputes to arbitration or to have a choice with regard to arbitration rules, venue andlanguage. Mitigation measures for these risks are limited. The risks noted above do not necessarily comprise all those faced by the Group and are not intended
to be an exhausted list or to be presented in any assumed order of priority.
The investment described in this document is speculative and may not be suitable for all recipients of
this document. Potential investors are accordingly advised to consult a person authorised under the
FSMA who specialises in advising in investments of this kind before making any investment decisions.
A prospective investor should consider carefully whether an investment in the Company is suitable in
the light of his personal circumstances and the financial resources available to him.
CONSIDERATIONS RELATING TO THE ORDINARY SHARES
Investment in AIM securities and liquidity of the Ordinary Shares An investment in companies whose shares are traded on AIM are perceived to involve a higher degree of riskand be less liquid than an investment in companies whose shares are listed on the Official List. AIM is amarket designed primarily for emerging or smaller companies. The AIM Rules are less demanding than theOfficial List. The future success of AIM and liquidity in the market for Ordinary Shares cannot beguaranteed. In particular, the market for Ordinary Shares may become or may be relatively illiquid andtherefore, such Ordinary Shares may be or may become difficult to sell.
The market for the Ordinary Shares following Admission may be highly volatile and subject to widefluctuations in response to a variety of potential factors which could lead to losses for Shareholders. Thesepotential factors include amongst others: any additions or departures of key personnel, litigation and press,newspaper and/or other media reports.
Prospective investors should be aware that the value and/or market price of the Ordinary Shares may go downas well as up and that the market price of the Ordinary Shares may not reflect the underlying value of theGroup. Investors may, therefore, realise less than or lose all of their investment.
Trading market for the Ordinary Shares The share price of emerging companies can be highly volatile and shareholdings illiquid. The market priceof the Ordinary Shares may be subject to wide fluctuations in response to many factors, some specific to theGroup and its operations and others to the AIM market in general including, but not limited to, variations inthe operating results of the Group, divergence in financial results from analysts' expectations, changes inearnings estimates by stock market analysts, general economic conditions or legislative changes in earningsestimates by stock market analysts, general economic conditions or legislative changes in the Group's sector.
In addition, stock markets have from time to time experienced extreme price and volume fluctuations, which,as well as general economic and political conditions, could adversely affect the market price for the OrdinaryShares. The trading of the Ordinary Shares on AIM should not be taken as implying that there will be a liquidmarket for the Ordinary Shares and there is no guarantee that an active market will develop or be sustainedafter Admission. It may be more difficult for an investor to realise his investment in the Group than in acompany whose shares are quoted on the Official List.
Dilution of shareholders' interest as a result of additional equity fundraising As mentioned above, the Group may need to raise additional funds in the future to finance, amongst otherthings, expansion of the business, new developments relating to existing operations or new acquisitions. Ifadditional funds are raised through the issuance of new equity or equity-linked securities of the Companyother than on a pro rata basis to existing Shareholders, the percentage ownership of the existing Shareholdersmay be reduced. Shareholders may also experience subsequent dilution and/or such securities may havepreferred rights, options and pre-emption rights senior to the Ordinary Shares.
SECTION A
ACCOUNTANTS' REPORT ON THE HISTORICAL FINANCIAL
INFORMATION OF ONL
The following is the full text of a report on Oxford Nutrascience Limited from Baker Tilly Corporate FinanceLLP, the Reporting Accountants, to the Directors of Oxford Nutrascience Group Plc.
2 Bloomsbury Street The DirectorsOxford Nutrascience Group Plc4th Floor17 Hanover SquareLondon W1S 1HU OXFORD NUTRASCIENCE LIMITED ("ONL")
We report on the financial information set out in Section B of Part IV. This financial information has beenprepared for inclusion in the admission document dated 8 February 2010 ("Admission Document") ofOxford Nutrascience Group Plc (the "Company" or "ONG") on the basis of the accounting policies set outin note 1 to the financial information. This report is required by paragraph 20.1 of Annex I of the Prospectus Rules as applied by part (a) ofSchedule Two to the AIM Rules and is given for the purpose of complying with that paragraph and for noother purpose. Save for any responsibility arising under paragraph 20.1 of Annex I of the Prospectus Rules as applied bypart (a) of Schedule Two to the AIM Rules to any person as and to the extent there provided, to the fullestextent permitted by law we do not assume any responsibility and will not accept any liability to any otherperson for any loss suffered by any such other person as a result of, arising out of, or in connection with thisreport or our statement, required by and given solely for the purposes of complying with paragraph 20.1 ofAnnex I of the Prospectus Rules as applied by part (a) of Schedule Two to the AIM Rules, consenting to itsinclusion in the Admission Document.
The Directors of the Company are responsible for preparing the financial information on the basis ofpreparation set out in note 1 to the Historical Financial Information and in accordance with InternationalFinancial Reporting Standards as adopted by the European Union.
It is our responsibility to form an opinion as to whether the financial information gives a true and fair view,for the purposes of the Admission Document, and to report our opinion to you.
For the avoidance of doubt, you have not requested us to review, comment or otherwise form an opinion onthe interim financial information as at 31 August 2009 or for the period then ended.
Basis of opinion
We conducted our work in accordance with the Standards for Investment Reporting issued by the AuditingPractices Board in the United Kingdom. Our work included an assessment of evidence relevant to theamounts and disclosures in the financial information. It also included an assessment of significant estimatesand judgments made by those responsible for the preparation of the financial information and whether theaccounting policies are appropriate to the entity's circumstances, consistently applied and adequatelydisclosed.
We planned and performed our work so as to obtain all the information and explanations we considerednecessary in order to provide us with sufficient evidence to give reasonable assurance that the financialinformation is free from material misstatement whether caused by fraud or other irregularity or error.
In our opinion, the financial information gives, for the purposes of the Admission Document, a true and fairview of the state of affairs of ONL as at 31 December 2008 and of its losses, cash flows and changes in equityfor the period then ended in accordance with the basis of preparation set out in note 1 and in accordance withand in accordance with International Financial Reporting Standards as adopted by the European Union asdescribed in note 1. Our work has not been carried out in accordance with auditing or other standards and practices generallyaccepted in any jurisdictions other than the United Kingdom and accordingly should not be relied upon as ifit had been carried out in accordance with those other standards and practices.
For the purposes of part (a) of Schedule Two to the AIM Rules we are responsible for this report as part ofthe Admission Document and declare that we have taken all reasonable care to ensure that the informationcontained in this report is, to the best of our knowledge, in accordance with the facts and contains noomission likely to affect its import. Baker Tilly Corporate Finance LLP
Regulated by the Institute of Chartered Accountants in England and Wales
Baker Tilly Corporate Finance LLP is a limited liability partnership registered in England and Wales, registered no. OC325347. Alist of the names of members is open to inspection at the registered office 2 Bloomsbury Street London WC1B 3ST SECTION B
HISTORICAL FINANCIAL INFORMATION OF ONL
Statement of Comprehensive Income
For the period ended 31 December 2008
8 February to 31 December Gross profit
Administrative expenses Loss before taxation
Loss for the period
Other comprehensive income for the period, net of tax Total comprehensive income for the period
Attributable to:Equity holders of ONL The loss for the period arises from ONL's continuing operations.
Statement of Changes in Equity
For the period ended 31 December 2008
Attributable to the equity holders of ONL As at 8 February 2008 Loss for the period As at 31 December 2008
————— ————— ————— ————— Statement of Financial Position
As at 31 December 2008
Trade and other receivables Cash and cash equivalents Total assets
Liabilities
Current liabilities
Trade and other payables
Net assets
Equity
Attributable to equity holders of ONL
Share capital
Net equity
Statement of Cash Flows
For the period ended 31 December 2008
8 February to 31 December Adjustments for non-cash items:Amortisation of intangible assets Increase in inventories Increase in trade and other receivables Increase in trade and other payables Net cash outflow from operations
Investing activities
Purchase of intangible assets
Interest received Net cash inflow from investing activities
Financing activities
Proceeds from issue of share capital
Net cash inflow from financing activities
Increase in cash and cash equivalents
Cash and cash equivalents at start of period Cash and cash equivalents at 31 December 2008
Oxford Nutrascience Limited
Notes to the Financial Information
For the period ended 31 December 2008
BASIS OF ACCOUNTING
The financial information has been prepared by the Directors in accordance with International FinancialReporting Standards ("IFRS") and International Accounting Standards as issued by the InternationalAccounting Standards Board ("IASB") as well as interpretations issued by the International FinancialReporting Interpretations Committee ("IFRIC") as adopted by the European Union.
Application of IFRS 1 First-time adoption of International Financial Reporting Standards The transition to IFRS has been accounted for in accordance with IFRS 1 First-time adoption of InternationalFinancial Reporting Standards, with 8 February 2008 being the date of transition.
At 8 February 2008, ONL early adopted the revised IAS 1 ‘Presentation of Financial Statements' which iseffective for accounting periods commencing on or after 1 January 2009. The previous version of IAS 1 usedthe titles ‘balance sheet' and ‘cash flow statement'. Revised IAS 1 uses ‘statement of financial position' and‘statement of cash flows' for those statements respectively.
ONL has presented income and expenses in one statement, a statement of comprehensive income, which isseparate from owner changes in equity, as required by IAS 1. Components of other comprehensive income,being items of income and expense not recognised in profit or loss as permitted by other IFRS, are alsodisplayed in the statement of comprehensive income.
Application of IFRS 8 Operating Segments At 8 February 2008, ONL early adopted IFRS 8 ‘Operating Segments' which is effective for accountingperiods commencing on or after 1 January 2009. This IFRS replaces IAS 14 ‘Segmental Reporting' whichrequired identification of two sets of segments-one set based on products and services, and the other ongeographical areas. IAS 14 regarded one set as primary segments and the other as secondary segments.
Further, IAS 14 required segment information to be prepared in conformity with the accounting policiesadopted for preparing and presenting the financial statements of the entity. IFRS 8 requires identification of operating segments on the basis of internal reports that are regularlyreviewed by the entity's chief operating decision maker in order to allocate resources to the segment andassess its performance. The IFRS further requires the amount reported for each operating segment to be themeasure reported to the chief operating decision maker for the purposes of allocating resources to thesegment and assessing its performance.
Application of IFRS 7 Financial Instruments: disclosures (amendments) At 8 February 2008, ONL early adopted the amendments to IFRS 7 ‘Financial Instruments: disclosures'which is effective for accounting periods commencing on or after 1 January 2009. The Directors do notbelieve that the adoption of these amendments have had a material impact on the financial information ofONL as none of ONL's financial instruments are measured at fair value. The most significant asset held tomanage liquidity risk is cash, as detailed in note 17.
Historical Cost Convention The financial information has been prepared on the historic cost basis. The principal accounting policiesapplied are set out below.
The reportable disclosures are identified by the chief operating decision maker by the way management hasorganised the firm. The firm operates out of one location and produces one product.
The chief operating decision maker reviews the performance of ONL based on total revenues and costs andnot by any segmental reporting.
Revenue comprises the fair value of the consideration received or receivable for the sale of goods in thenormal course of business, net of discounts, VAT and other sales related taxes and is recognised to the extentthat it is probable that the economic benefits associated with the transaction will flow in to ONL.
Transactions in foreign currencies are initially recorded at the rates of exchange prevailing on the dates ofthe transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreigncurrencies are retranslated at the rates prevailing on the balance sheet date. Gains and losses arising onretranslation are charged to profit or loss as they are incurred.
The functional and presentational currency of ONL is British pounds.
RESEARCH AND DEVELOPMENT
Research costs are charged to profit or loss as they are incurred. Certain development costs will be capitalisedas intangible assets when it is probable that the future economic benefits will flow to ONL. Such intangibleassets will be amortised on a straight-line basis from the point at which the assets are ready for use over theperiod of the expected benefit, and are reviewed for an indication of impairment at each balance sheet date.
Other development costs are charged against profit or loss as incurred since the criteria for their recognitionas an asset are not met.
The criteria for recognising expenditure as an asset are: it is technically feasible to complete the product; management intends to complete the product and use or sell it; there is an ability to use or sell the product; it can be demonstrated how the product will generate probable future economic benefits; adequate technical, financial and other resources are available to complete the development, use orsell the product; and expenditure attributable to the product can be reliably measured.
The costs of an internally generated intangible asset comprise all directly attributable costs necessary tocreate, produce and prepare the asset to be capable of operating in the manner intended by management.
Directly attributable costs include employee costs incurred on technical development, testing andcertification, materials consumed and any relevant third party cost. The costs of internally generateddevelopments are recognised as intangible assets and are subsequently measured in the same way asexternally acquired intangible assets. However, until completion of the development project, the assets aresubject to impairment testing only.
No development costs to date have been capitalised as intangible assets.
Rental payable under operating leases, which are leases where the lessor retains a significant proportion ofthe risks and benefits of the asset are charged in the income statement on a straight line basis over theexpected lease term.
Patent costs and trademarks are stated at historic cost net of amortisation and any provision for impairment.
Patent costs and trademarks are amortised over their useful economic life of 10 years on a straight line basis.
Amortisation is included within Administrative Expenses in the Statement of Comprehensive Income.
IMPAIRMENT OF INTANGIBLE ASSETS
At each balance sheet date, ONL reviews the carrying amounts of its intangible assets to determine whetherthere is any indication that those assets have suffered an impairment loss. If any such indication exists, therecoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Discounted cash flow valuation techniques are generally applied for assessing recoverable amounts usingthree year forward looking cash flow projections and terminal value estimates, together with discount ratesappropriate to the risk of the related cash generating units. The recoverable amount of the intangible asset is the higher of its value in use and its fair value less costs tosell. Discounted cash flows are used to calculate the recoverable amounts which are based on cash generatingunits where assets do not generate cash flows independent from other assets.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amountof the asset is reduced to its recoverable amount. An impairment loss is recognised as an expenseimmediately.
SHARE BASED PAYMENTS
Equity settled share-based payment transactions are measured with reference to the fair value at the date ofgrant, recognised on a straight line basis over the vesting period, based on ONL's estimate of shares that willeventually vest. Fair value is measured using the Black-Scholes model.
At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent towhich the vesting period has expired and management's best estimate of the achievement or otherwise ofnon-market conditions and the number of equity instruments that will ultimately vest. The movement incumulative expense since the previous balance sheet date is recognised in the statement of comprehensiveincome, with a corresponding entry in equity.
FINANCIAL ASSETS AND LIABILITIES
Trade and other receivables
Trade and other receivables do not carry any interest and are initially recognised at fair value. They aresubsequently measured at amortised cost using the effective interest rate method, less any provision forimpairment.
Impairment provisions are recognised when there is objective evidence that ONL will be unable to collectall of the amounts due under the terms receivable, the amount of such a provision being the differencebetween the net carrying amount and the present value of the future expected cash flows associated with theimpaired receivable.
Inventories are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringingeach product to its present location and condition. Net realisable value is based on estimated selling priceless any further costs expected to be incurred to disposal. Cost is determined using the first in first outmethod of valuation. Provision is made for slow moving or obsolete items. Trade and other payables
Trade and other payables are not interest bearing and are initially recognised at fair value. They aresubsequently measured at amortised cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and deposits on a term of not greater than 3 months.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares oroptions are shown in equity as a deduction, net of tax from proceeds.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the period. ONL's liability for current tax iscalculated by using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount ofassets and liabilities in the financial information and the corresponding tax bases used in the computation oftaxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets arerecognised to the extent that it is probable that taxable profits will be available against which deductibletemporary differences can be utilised. Deferred tax is calculated at the tax rates that are expected to apply tothe period when the asset is realised or the liability is settled using tax rates that have been enacted orsubstantively enacted by the balance sheet date. Deferred tax is charged or credited to profit or loss, exceptwhen it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt within equity.
CRITICAL ACCOUNTING ESTIMATES AND AREAS OF JUDGEMENT
Estimates and judgements are continually evaluated and are based on historical experience and other factors,including expectations of future events that are believed to be reasonable under the circumstances. Actualresults may differ from these estimates. The estimates and assumptions that have the most significant effectson the carrying amounts of the assets and liabilities in the financial information are discussed below: Equity settled share-based payments The estimation of share-based payment costs requires the selection of an appropriate valuation method,consideration as to the inputs necessary for the valuation model chosen and the estimation of the number ofawards that will ultimately vest, inputs for which arise from judgements relating to the future volatility ofthe share price of comparable companies, ONL's expected dividend yields, risk free interest rates andexpected lives of the options. The Directors draw on a variety of sources to aid in the determination of theappropriate data to use in such calculations. Research and development costs Careful judgment by the Directors is applied when deciding whether the recognition requirements forcapitalising development costs have been met. This is necessary as the economic success of any productdevelopment is uncertain and may be subject to future technical problems. Judgements are based on theinformation available at each Balance Sheet date which includes the progress with testing and certificationand progress on, for example, establishment of commercial arrangements with third parties. In addition, allinternal activities related to research and development of new products are continuously monitored by theDirectors.
No development costs to date have been capitalised as intangible assets.
ACCOUNTING STANDARDS AND INTERPRETATIONS NOT APPLIED
At the date of authorisation of the financial information, the following Standards and Interpretations relevantto the operations of ONL, which have not yet been applied in this financial information, were in issue butnot yet effective: Effective for periods on or after Share based payments (amendments) Business combination (revision) Operating segments (amendments) Statement of Cash Flows (amendments) Leases (amendments) Employee benefits (amendments) Consolidated and Separate Financial Statements (amendments) Financial Instruments: Presentation (amendments) Impairment of Assets (amendments) Impairment of Assets (amendments) Intangible Assets (amendments) Financial Instruments: Recognition and Measurement (amendments) The Directors do not anticipate that the adoption of these Standards and Interpretations will have a materialimpact on the financial information of ONL.
The chief operating decision maker is Nigel Theobald who reviews the reports of ONL as one segment only.
The review of ONL's operating results is not broken down into other segments.
Revenue represents amounts derived from the sale of products which fall within ONL's ordinary activitiesafter taking deduction of trade discounts and value added tax. ONL's revenue is solely attributable to the saleof a calcium chew supplement, Ellactiva. The revenues were generated in two main geographic areas, basedon the customer's location, although all are managed in the UK. ONL's revenue per customer orientation isas follows: 8 February to 31 December 2008 76% of the UK revenue is generated from one customer 100% of the Middle East revenue is generated from one customer All ONL's assets are held in the UK and all of its capital expenditure arises in the UK.
LOSS FROM OPERATIONS
8 February to 31 December 2008 Loss from operations is stated after charging to administrative expenses:Amortisation of intangible assets (see note 7) Other operating lease rentals Staff costs (see note 4) Foreign exchange losses Research and development STAFF COSTS
8 February to 31 December 2008 The average monthly number of persons (including directors) employed by ONL during the period was: Administration and management 8 February to 31 December 2008 The aggregate remuneration, including directors, comprised:Wages and salaries Social security costs 8 February to 31 December 2008 Bank interest receivable 8 February to 31 December 2008 Current tax:
UK corporation tax on losses of period
Deferred tax:
Origination and reversal of timing differences
Tax on loss on ordinary activities
The charge for the period can be reconciled to the loss before tax per the Statement of ComprehensiveIncome as follows: 8 February to 31 December 2008 The tax assessed for the period varies from the small company rate of corporation tax as explained below: Loss on ordinary activities before tax Tax at the standard rate of corporation tax (20.8%) Effects of:Expenses not deductable for tax purposes Online filing tax incentive Unutilised tax losses Effective change in UK corporation tax rate Tax charge for the period
ONL has tax losses of £106,232 available to carry forward against future trading profit. ONL has notrecognised a deferred tax asset of £22,316 relating to these losses as their recoverability is uncertain.
CostAt 8 February 2008 At 31 December 2008
Depreciation
At 8 February 2008
Charge for the period At 31 December 2008
Net book value
At 31 December 2008
At 8 February 2008 Raw materials and consumables The inventory expensed to cost of sales in the period is £31,582 and there has been no write off of inventoryin the period.
TRADE AND OTHER RECEIVABLES
Trade receivables Other receivables Prepayments and accrued income The Directors consider that the carrying amount of trade and other receivables approximates to their fairvalue.
No provisions are held against receivables and no amounts past due have been impaired. RISK MANAGEMENT OF FINANCIAL ASSETS AND LIABILITIES
Capital risk management
ONL manages its capital to ensure that ONL will be able to continue as a going concern while maximisingthe return to stakeholders. The capital structure of ONL consists of equity attributable to equity holders of the parent, comprising issuedcapital, reserves and retained earnings as disclosed in notes 12 and 13 and in the Statement of Changes inEquity.
ONL is exposed to a number of risks through its normal operations, the most significant of which are market,credit and liquidity risks. The management of these risks is vested with the Board of Directors. Categorisation of financial instruments
liabilities at receivables amortised cost Financial assets/(liabilities)
At 31 December 2008
Trade and other receivables
Cash and cash equivalents Trade and other payables ————— ————— ————— ONL had no financial instruments measured at fair value through profit and loss.
Management of market risk
The most significant area of market risk to which ONL is exposed is interest risk. As ONL has no significant interest bearing borrowings its risk is limited to the reduction of interest receivedon cash surpluses held. The principal impact to ONL is the result of interest-bearing cash and cash equivalentbalances held as set out below: At 31 December 2008 Fixed rate Floating rate Cash and cash equivalents ————— ————— ————— The impact of an increase/decrease by 10 percentage point in the rate of interest earned on the above interest-bearing cash and cash equivalent balances would have an immaterial impact on ONL's pre tax results for theperiod and on equity Market risk also arises on foreign exchange risk. ONL operates internationally and is exposed to foreignexchange risk arising from currency exposures, primarily with respect to purchases in Euros. At31 December 2008 ONL had no assets or liabilities denominated in foreign currencies.
Management of credit risk
ONL's principal financial assets are bank balances and cash.
ONL deposits surplus liquid funds with counterparty banks that have high credit ratings. The maximum exposure to credit risk on ONL's financial assets and liabilities is represented by theircarrying amounts as outlined in the categorisation of financial instruments table above. ONL does not consider that any changes in fair value of financial assets in the period are attributable to creditrisk. ONL has exposure on receivables. ONL minimises exposure to credit risk by entering into formal contractswith its major customers, as well as using credit checks.
Management of liquidity risk
ONL seeks to manage liquidity risk to ensure that sufficient liquidity is available to meet foreseeable needsand to invest cash assets safely and profitably. ONL deems there is sufficient liquidity for the foreseeablefuture.
ONL had cash and cash equivalents at 31 December 2008 of £988,967.
As at 31 December 2008 all financial assets and liabilities mature for payment within one year.
TRADE AND OTHER PAYABLES
Taxes and social security The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
shares A shares of shares A shares of of 1p each 0.01p each of 1p each 0.01p each Authorised:
At 8 February 2008
Authorised ordinary shares Authorised ordinary A shares At 31 December 2008 ————– ————– ————– ————– ————– Allotted, issued and fully paid shares:
At 8 February 2008
Proceeds from issue of ordinary shares Proceeds from issue of ordinary A shares At 31 December 2008
————– ————– ————– ————– ————– ONL was incorporated on 8 February 2008, on which date the authorised share capital was £500,000 dividedinto 50,000,000 ordinary shares of 1p, of which 2 ordinary shares were issued at par value.
On 12 February 2008, ONL allotted and issued 1,500,000 ordinary shares of 1p each for cash at par value.
On 2 April 2008, ONL allotted and issued 8,999,998 ordinary shares of 1p each for cash at par value.
On 10 June 2008, ONL allotted and issued 3,466,666 ordinary shares of 1p each for cash at a price of 6presulting in cash subscriptions receipts of £208,000, and which gave rise to a share premium of £173,333(see note 13).
On 7 July 2008, ONL purchased for cash and subsequently cancelled 3,000,000 ordinary shares of 1p; theshares were acquired at 0.01p being the amount of the share paid up at that time.
The purpose of this buy back was to facilitate the split of 30,000 ordinary 1p shares into 3,000,000 0.01pshares to be reclassified as ordinary A Shares. This was in order to restructure the shareholding at that datein view of future investment.
On 7 July 2008, ONL authorised 3,000,000 ordinary A shares of 0.01p; 3,000,000 were issued for cash atpar value, which are ranked pari passu in all respects with the ordinary shares.
On 27 August 2008, ONL allotted and issued 2,080,000 ordinary shares of 1p each for cash at a price of 40presulting in cash subscriptions receipts of £832,000, and which gave rise to a share premium of £811,200(see note 13).
Share Premium At 8 February 2008 Premium on issue of shares At 31 December 2008
Operating lease commitments ONL leases premises under non-cancellable operating lease agreements. The future aggregate minimumlease and service charge payments under non-cancellable operating leases are as follows: 31 December 2008 Land and buildings:Expiring in less than one year RELATED PARTY TRANSACTIONS
Transactions with Key Management Personnel
ONL's key management personnel comprise only the directors of ONL.
During the period ONL entered into the following transactions in which its directors had an interest: Remuneration received by the directors from ONL is set out below: Short-term employment benefits ————— ————— ————— David Norwood resigned as a director on 31 December 2008.
EVENTS AFTER THE BALANCE SHEET DATE
On 27 January 2010, ONG acquired 100 per cent of the issued share capital of ONL by issue of 401,164,650new ordinary shares at 1.6 pence per share, which valued ONL at £6,418,634.40.
On 4 April 2009, ONL granted 300,000 options to subscribe for ordinary shares to Nigel Theobald. Alloptions are equity settled. The options have a grant date value of £36,922, an exercise price of 40p and thevesting period is generally 1 or 3 years. If the options remain unexercised after a period of 10 years from thedate of grant, the options expire.
150,000 options are subject to performance conditions based on revenue and market based targets.
There were no share options outstanding at 31 December 2008 which were eligible to be exercised. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and balances with banks, and cash held on short termdeposit. Cash and cash equivalents included in the statement of cash flows comprise the following amountsin the statement of financial position: Cash on hand and balances with bank Cash held on short-term deposits At 31 December 2008
ULTIMATE CONTROLLING PARTY
In the opinion of the Directors there is no ultimate controlling party. However, for the purposes of the CityCode, attention is drawn to the Concert Party referred to in Part II of this document.
UNAUDITED INTERIM FINANCIAL INFORMATION OF ONL
Statement of Comprehensive Income
For the period ended 31 August 2009
31 December Administrative expenses Loss before taxation
Loss for the period
Other comprehensive income for the period, net of tax Total comprehensive income for the period Attributable to:Equity holders of ONL Comparative figures comprise the period from incorporation on 8 February 2008 to 31 December 2008.
The loss for the period arises from ONL's continuing operations.
Statement of Changes in Equity
For the period ended 31 August 2009
Attributable to the equity holders of ONL Share Based Share Share As at 8 February 2008 Loss for the period As at 31 December 2008 Loss for the period Share based payment As at 31 August 2009
Statement of Financial Position
As at 31 August 2009
Trade and other receivables Cash and cash equivalents Total assets
Liabilities
Current liabilities
Trade and other payables
Net assets
Equity
Attributable to equity holders of ONL
Share capital
Share based payment reserve Net equity
Statement of Cash Flows
For the period ended 31 August 2009
31 December Adjustments for non-cash items:Share based payment Amortisation of intangible assets Decrease/(increase) in inventories Decrease/(increase) in trade and other receivables (Decrease)/increase in trade and other payables Net cash outflow from operations
Investing activities
Purchase of intangible assets
Interest received Net cash inflow from investing activities
Financing activities
Proceeds from issue of share capital
Net cash inflow from financing activities
(Decrease)/increase in cash and cash equivalents
Cash and cash equivalents at start of period Cash and cash equivalents at 31 August 2009
Comparative figures comprise the period from incorporation on 8 February 2008 to 31 December 2008.
Oxford Nutrascience Limited
Notes to the Financial Information
For the period ended 31 August 2009
Basis of Accounting
The financial information have been prepared under the historical cost convention in accordance withInternational Financial Reporting Standards ("IFRS") and International Accounting Standards as issued bythe International Accounting Standards Board ("IASB") as well as interpretations issued by the InternationalFinancial Reporting Interpretations Committee ("IFRIC") as adopted by the European Union.
The accounts have been prepared in accordance with IFRS 34: Interim Financial Reporting.
ONL has presented income and expenses in one statement, a statement of comprehensive income, which isseparate from owner changes in equity, as required by IAS 1. Components of other comprehensive income,being items of income and expense not recognised in profit or loss as permitted by other IFRS, are alsodisplayed in the statement of comprehensive income.
Historical Cost Convention The financial information has been prepared on the historic cost basis. The principal accounting policiesapplied are set out below.
The reportable disclosures are identified by the chief operating decision maker by the way management hasorganised the firm. The firm operates out of one location and produces one product.
The chief operating decision maker reviews the performance of ONL based on total revenues and costs andnot by any segmental reporting.
Revenue comprises the fair value of the consideration received or receivable for the sale of goods in thenormal course of business, net of discounts, VAT and other sales related taxes and is recognised to the extentthat it is probable that the economic benefits associated with the transaction will flow in to ONL.
Transactions in foreign currencies are initially recorded at the rates of exchange prevailing on the dates ofthe transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreigncurrencies are retranslated at the rates prevailing on the balance sheet date. Gains and losses arising onretranslation are charged to profit or loss as they are incurred.
The functional and presentational currency of ONL is British pounds.
Research and Development
Research costs are charged to profit and loss as they are incurred. Certain development costs will becapitalised as intangible assets when it is probable that the future economic benefits will flow to ONL. Suchintangible assets will be amortised on a straight-line basis from the point at which the assets are ready foruse over the period of the expected benefit, and are reviewed for an indication of impairment at each balancesheet date. Other development costs are charged against profit or loss as incurred since the criteria for theirrecognition as an asset are not met.
The criteria for recognising expenditure as an asset are: it is technically feasible to complete the product; management intends to complete the product and use or sell it; there is an ability to use or sell the product; it can be demonstrated how the product will generate probable future economic benefits; adequate technical, financial and other resources are available to complete the development, use orsell the product; and expenditure attributable to the product can be reliably measured.
The costs of an internally generated intangible asset comprise all directly attributable costs necessary tocreate, produce and prepare the asset to be capable of operating in the manner intended by management.
Directly attributable costs include employee costs incurred on technical development, testing andcertification, materials consumed and any relevant third party cost. The costs of internally generateddevelopments are recognised as intangible assets and are subsequently measured in the same way asexternally acquired intangible assets. However, until completion of the development project, the assets aresubject to impairment testing only.
No development costs to date have been capitalised as intangible assets.
Rental payable under operating leases, which are leases where the lessor retains a significant proportion ofthe risks and benefits of the asset, are charged in the income statement on a straight line basis over theexpected lease term.
Patent costs and trademarks are stated at historic cost net of amortisation and any provision for impairment.
Patent costs and trademarks are amortised over their useful economic life of 10 years years on a straight linebasis. Amortisation is included within Administrative Expenses in the Statement of Comprehensive Income.
Impairment of Intangible Assets
At each balance sheet date, ONL reviews the carrying amounts of its intangible assets to determine whetherthere is any indication that those assets have suffered an impairment loss. If any such indication exists, therecoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Discounted cash flow valuation techniques are generally applied for assessing recoverable amounts usingthree year forward looking cash flow projections and terminal value estimates, together with discount ratesappropriate to the risk of the related cash generating units.
The recoverable amount of the intangible asset is the higher of its value in use and its fair value less costs tosell. Discounted cash flows are used to calculate the recoverable amounts which are based on cash generatingunits where assets do not generate cash flows independent from other assets.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amountof the asset is reduced to its recoverable amount. An impairment loss is recognised as an expenseimmediately.
Financial Assets and Liabilities
Trade and other receivables Trade and other receivables do not carry any interest and are initially recognised at fair value. They aresubsequently measured at amortised cost using the effective interest rate method, less any provision forimpairment.
Impairment provisions are recognised when there is objective evidence that ONL will be unable to collectall of the amounts due under the terms receivable, the amount of such a provision being the differencebetween the net carrying amount and the present value of the future expected cash flows associated with theimpaired receivable.
Inventories are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringingeach product to its present location and condition. Net realisable value is based on estimated selling priceless any further costs expected to be incurred to disposal. Cost is determined using the first in first outmethod of valuation. Provision is made for slow moving or obsolete items.
Trade and other payables Trade and other payables are not interest bearing and are initially recognised at fair value. They aresubsequently measured at amortised cost using the effective interest method.
Cash and cash equivalents Cash and cash equivalents comprise cash at hand and deposits on a term of not greater than 3 months.
Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares oroptions are shown in equity as a deduction, net of tax from proceeds.
Share Based Payments
ONL undertakes equity settled share-based payment transactions with certain employees.
Equity settled share-based payment transactions are measured with reference to the fair value at the date ofgrant, recognised on a straight line basis over the vesting period, based on ONL's estimate of shares that willeventually vest. Fair value is measured using the Black-Scholes model.
At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent towhich the vesting period has expired and management's best estimate of the achievement or otherwise ofnon-market conditions and the number of equity instruments that will ultimately vest. The movement incumulative expense since the previous balance sheet date is recognised in the statement of comprehensiveincome, with a corresponding entry in equity.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the period. ONL's liability for current tax iscalculated by using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount ofassets and liabilities in the financial information and the corresponding tax bases used in the computation oftaxable profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets arerecognised to the extent that it is probable that taxable profits will be available against which deductibletemporary differences can be utilised. Deferred tax is calculated at the tax rates that are expected to apply tothe period when the asset is realised or the liability is settled using tax rates that have been enacted orsubstantively enacted by the balance sheet date. Deferred tax is charged or credited to profit or loss, exceptwhen it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt within equity.
Critical Accounting Estimates and Areas of Judgement
Estimates and judgements are continually evaluated and are based on historical experience and other factors,including expectations of future events that are believed to be reasonable under the circumstances. Actualresults may differ from these estimates. The estimates and assumptions that have the most significant effectson the carrying amounts of the assets and liabilities in the financial information are discussed below: Equity settled share-based payments The estimation of share-based payment costs requires the selection of an appropriate valuation method,consideration as to the inputs necessary for the valuation model chosen and the estimation of the number ofawards that will ultimately vest, inputs for which arise from judgements relating to the future volatility ofthe share price of comparable companies, ONL's expected dividend yields, risk free interest rates andexpected lives of the options. The Directors draw on a variety of sources to aid in the determination of theappropriate data to use in such calculations.
Research and development costs Careful judgement by the Directors is applied when deciding whether the recognition requirements forcapitalising development costs have been met. This is necessary as the economic success of any productdevelopment is uncertain and may be subject to future technical problems. Judgements are based on theinformation available at each Balance Sheet date which includes the progress with testing and certificationand progress on, for example, establishment of commercial arrangements with third parties. In addition, allinternal activities related to research and development of new products are continuously monitored by theDirectors.
No development costs to date have been capitalised as intangible assets.
Accounting Standards and Interpretations not applied
At the date of authorisation of the financial information, the following Standards and Interpretations relevantto the operations of ONL, which have not yet been applied in this financial information, were in issue butnot yet effective: for periods on or after Share based payments (amendments) Business combination (revision) Operating segments (amendments) Presentation of financial statements (amendments) Statement of Cash Flows (amendments) Leases (amendments) Consolidated and Separate Financial Statements (amendments) Financial Instruments: Presentation (amendments) Impairment of Assets (amendments) Intangible Assets (amendments) Financial Instruments: Recognition and Measurement (amendments) The Directors do not anticipate that the adoption of these Standards and Interpretations will have a materialimpact on the financial information of ONL.
The chief operating decision maker is Nigel Theobald who reviews the reports of ONL as one segment only.
The review of ONL's operating results is not broken down into other segments.
Revenue represents amounts derived from the sale of products which fall within ONL's ordinary activitiesafter taking deduction of trade discounts and Value Added Tax. ONL's revenue is solely attributable to thesale of a calcium chew supplement, Ellactiva. The revenues were generated in two main geographic areas,based on the customer's location, although all are managed in the UK. ONL's revenue per customerorientation is as follows: 31 December 99% of the UK revenue is generated from one customer (period to 31 December 2008: 76%) 100% of the Middle East revenue is generated from one customer (period to 31 December 2008: 100%) All ONL's assets are held in the UK and all of its capital expenditure arises in the UK.
LOSS FROM OPERATIONS
Period to 31 December Loss from operations is stated after charging to administrative expenses:Amortisation of intangible assets (see note 8) Other operating lease rentals Staff costs (see note 4) Foreign exchange losses Research and development Auditors remuneration:Fees payable to ONL's auditor for the audit of ONL's accounts STAFF COSTS
31 December The average monthly number of persons (including directors) employed by ONL during the period was: Administration and management 31 December The aggregate remuneration, including directors, comprised:Wages and salaries Social security costs Share based payments SHARE BASED PAYMENTS
ONL operates a share option plan, under which certain directors have been granted options to subscribe forordinary shares. All options are equity settled. The options have an exercise price of 40p and the vestingperiod was generally 1 or 3 years. If the options remain unexercised after a period of 10 years from the dateof grant, the options expire. ONL has no legal or constructive obligation to repurchase or settle the optionsin cash. The number and weighted average exercise prices of share options are as follows: of share price per share At 8 February 2008 and 31 December 2008 Granted during the period Outstanding at 31 August 2009
There were no share options outstanding at 31 August 2009 which were eligible to be exercised. To date noshare options have been exercised, lapsed or forfeited. There are no market based vesting conditions attachedto any of the share options outstanding at 31 August 2009.
The fair value of services received in return for share options granted is measured by reference to the fairvalue of the share options granted. This is estimated based on the Black Scholes model which is consideredmost appropriate considering the effects of the vesting conditions, expected exercise price and the paymentof the dividends by ONL. The following table lists the inputs to the model used for the period ended31 August 2009, market conditions are assumed to be met during the vesting period: Granted period to 31 August 2009 Expected volatility Risk free interest rate Expected vesting life of options Weighted average exercise price Weighted average share price at date of grant A charge has been recognised in the Statement of Comprehensive Income of £10,560 for the period (periodto 31 December 2008: £nil).
31 December Bank interest receivable 31 December Current tax:
UK corporation tax on losses of period
Deferred tax:
Origination and reversal of timing differences
Tax on loss on ordinary activities The charge for the period can be reconciled to the loss before tax per the Statement of ComprehensiveIncome as follows: 31 December The tax assessed for the period varies from the small company rate of corporation tax as explained below: Loss on ordinary activities before tax Tax at the standard rate of corporation tax 21.0% (2008:20.8%) Effects of:Expenses not deductable for tax purposes Online filing tax incentive Unutilised tax losses Change in UK corporation tax rate Tax charge for the period
ONL has estimated losses of £164,739 (2008: loss of £106,518) available for carry forward against futuretrading profit. ONL has not recognised a deferred tax asset of £56,895 relating to these losses as theirrecoverability is uncertain (2008: £22,316).
Cost
At 8 February 2008
At 31 December 2008 At 31 August 2009
Amortisation
At 8 February 2008
Charge for the period At 31 December 2008 Charge for the period At 31 August 2009
Net book value
At 31 August 2009
At 31 December 2008 At 8 February 2008 31 December Raw materials and consumables The inventory expensed to cost of sales in the period is £25,287 (period to 31 December 2008: £31,582) andthere has been no write off of inventory in the period.
TRADE AND OTHER RECEIVABLES
31 December Trade receivables Other receivables Prepayments and accrued income The Directors consider that the carrying amount of trade and other receivables approximates to their fairvalue.
No provisions are held against receivables and no amounts past due have been impaired.
RISK MANAGEMENT OF FINANCIAL ASSETS AND LIABILITIES
Capital risk management
ONL manages its capital to ensure that ONL will be able to continue as a going concern while maximisingthe return to stakeholders.
The capital structure of ONL consists of equity attributable to equity holders of the parent, comprising issuedcapital, reserves and retained earnings as disclosed in notes 13 and 14, and in the Statement of Changes inEquity.
ONL is exposed to a number of risks through its normal operations, the most significant of which are market,credit and liquidity risks. The management of these risks is vested with the Board of Directors. Categorisation of financial instruments
liabilities at receivables amortised cost At 31 December 2008
Trade and other receivables
Cash and cash equivalents Trade and other payables ————— ————— ————— liabilities at receivables amortised cost At 31 August 2009
Trade and other receivables
Cash and cash equivalents Trade and other payables ————— ————— ————— ONL had no financial instruments measured at fair value through profit and loss.
Management of market risk
The most significant area of market risk to which ONL is exposed is interest risk.
As ONL has no significant interest bearing borrowings its risk is limited to the reduction of interest receivedon cash surpluses held. The principal impact to ONL is the result of interest-bearing cash and cash equivalentbalances held as set out below: Audited 31 December 2008 Unaudited 31 August 2009 Cash and cash equivalents ———— ———— ———— ———— ———— ———— The impact of an increase/decrease by 10 percentage point in the rate of interest earned on the above interest-bearing cash and cash equivalent balances would have an immaterial impact on ONL's pre tax results for theperiod and on equity.
Market risk also arises on foreign exchange risk. ONL operates internationally and is exposed to foreignexchange risk arising from currency exposures, primarily with respect to purchases in Euros. At 31 August2009 ONL had no assets or liabilities denominated in foreign currencies.
Management of credit risk
ONL's principal financial assets are bank balances and cash.
ONL deposits surplus liquid funds with counterparty banks that have high credit ratings.
The maximum exposure to credit risk on ONL's financial assets is represented by their carrying amounts asoutlined in the categorisation of financial instruments table above.
ONL does not consider that any changes in fair value of financial assets or liabilities in the period areattributable to credit risk.
ONL has exposure on receivables. ONL minimises exposure to credit risk by entering into formal contractswith its major customers, as well as using credit checks.
Management of liquidity risk
ONL seeks to manage liquidity risk to ensure that sufficient liquidity is available to meet foreseeable needsand to invest cash assets safely and profitably. ONL deems there is sufficient liquidity for the foreseeablefuture.
ONL had cash and cash equivalents at 31 August 2009 of £843,720 (31 December 2008: £988,967).
As at 31 August 2009 all financial assets and liabilities mature for payment within one year.
TRADE AND OTHER PAYABLES
31 December Taxes and social security The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
A shares of A shares of 0.01p each 0.01p each Authorised:
At 8 February 2008
Authorised ordinary shares 49,970,000 Authorised ordinary At 31 December 2008 and 31 August 2009 ————— ————— ————— ————— ————— Allotted, issued and
fully paid shares:
At 8 February 2008 Proceeds from issue of Proceeds from issue of ordinary A shares At 31 December 2008
and 31 August 2009
————— ————— ————— ————— ————— ONL was incorporated on 8 February 2008, on which date the authorised share capital was £500,000 dividedinto 50,000,000 ordinary shares of 1p, of which 2 ordinary shares were issued at par value.
On 12 February 2008, ONL allotted and issued 1,500,000 ordinary shares of 1p each for cash at par value.
On 2 April 2008, ONL allotted and issued 8,999,998 ordinary shares of 1p each for cash at par value.
On 10 June 2008, ONL allotted and issued 3,466,666 ordinary shares of 1p each for cash at a price of 6presulting in cash subscriptions receipts of £208,000 and which gave rise to a share premium of £173,333 (seenote 14).
On 7 July 2008, ONL purchased for cash and subsequently cancelled 3,000,000 ordinary shares of 1p; theshares were acquired at 0.01p being the amount of the share paid up at that time.
The purpose of this buy back was to facilitate the split of 30,000 ordinary 1p shares into 3,000,000 0.01pshares to be reclassified as Ordinary A Shares. This was in order to restructure the shareholding at that datein view of future investment.
On 7 July 2008, ONL authorised 3,000,000 ordinary A shares of 0.01p; 3,000,000 were issued for cash atpar value, which are ranked pari passu in all respects with the ordinary shares.
On 27 August 2008, ONL allotted and issued 2,080,000 ordinary shares of 1p each for cash at a price of 40presulting in cash subscriptions receipts of £832,000 and which gave rise to a share premium of £811,200 (seenote 14).
At 8 February 2008 Premium on issue of shares At 31 December 2008 and 31 August 2009
Operating lease commitments
ONL leases premises under non-cancellable operating lease agreements. The future aggregate minimumlease and service charge payments under non-cancellable operating leases are as follows: 31 December Land and buildings:Expiring in less than one year RELATED PARTY TRANSACTIONS
Transactions with Key Management Personnel
ONL's key management personnel comprise only the directors of ONL.
During the period ONL entered into the following transactions in which its directors had an interest: Remuneration received by the Directors from ONL is set out below: Employer's Salaries & Short-term employment benefits
Nigel Theobald
David Norwood resigned on 31 December 2008 EVENTS AFTER THE BALANCE SHEET DATE
On 27 January 2010, ONG acquired 100 per cent of the issued share capital of ONL by the issue of401,164,650 new ordinary shares at 1.6 pence per share, which valued ONL at £6,418,634.40.
CASH AND CASH EQUIVALENTS
Cash and cash equivalent consist of cash in hand and balances with banks, and cash held on short termdeposit. Cash and cash equivalents included in the statement of cash flows comprise the following amountsin the statement of financial position: 31 December Cash in hand and balances with bank Cash held on short-term deposits At 31 December 2008
ULTIMATE CONTROLLING PARTY
In the opinion of the Directors there is no ultimate controlling party. However, for the purposes of the CityCode, attention is drawn to the Concert Party referred to in Part II of this document.
1 Responsibility
The Directors, whose names appear on page 5 of this document, accept responsibility for theinformation contained in this document including individual and collective responsibility forcompliance with the AIM Rules for Companies. To the best of the knowledge and belief of theDirectors (who have taken reasonable care to ensure that such is the case) the information containedin this document for which they are responsible is in accordance with the facts and there are no otherfacts, the omission of which is likely to affect the import of such information.
Each member of the Concert Party accepts responsibility for the information contained in thisdocument relating to themselves or otherwise expressly referable to them. To the best of theknowledge and belief of each member of the Concert Party (who have taken reasonable care to ensurethat such is the case), the information contained in this document for which they are responsible is inaccordance with the facts and there are no other facts the omission of which is likely to affect theimport of such information.
The Company was incorporated under the name of Prebiosys plc and on 27 January 2010 it changedits name, by special resolution, to Oxford Nutrascience Group Plc. Save for the operations conductedby other companies in the Group, the Company does not operate under any other name.
The Company is domiciled in the United Kingdom and was incorporated and registered in Englandand Wales on 7 October 2009 as a public limited company with registered number 7036758. On27 January 2010, the Company obtained its trading certificate pursuant to section 761 of the CA 2006.
The liability of its members is limited.
The Company was incorporated under the CA 2006 and its securities are governed by the CA 2006.
The Company's registered office is at Fourth Floor, 17 Hanover Square, London W1S 1HU. TheCompany's principal place of business is at Part of 1st Floor, 73 Derby Road, Melbourne, DerbyshireDE73 8FE. The telephone number of the principal places of business is +44 1332 694 310. Its websiteis www.oxfordnutrascience.com.
The Company has no administrative, management or supervisory bodies other than the Board, theremuneration committee and the audit committee. Only the non-executive Directors of the Companywill sit on the remuneration and audit committees.
The Company's auditors are RSM Tenon Audit Limited, The Poynt, 45 Wollaton Street, Nottingham,NG1 5FW, who are members of the Institute of Chartered Accountants in England and Wales.
The Company has two wholly owned subsidiaries, namely: 2.7.1 Oxford Nutrascience, which was incorporated in England and Wales on 8 February 2008. Its principal activities are developing and commercialising advanced delivery systems formedicines and supplements leveraging prebiotic soluble fibre technology. Oxford Nutrasciencewas acquired by the Company on 27 January 2010, subject to the terms of the Share ExchangeAgreement, details of which are set out in paragraph 13 of this Part VI of this document; and 2.7.2 Oxford Nutra Limited, which was incorporated in England & Wales on 11 January 2010 and is and has been, since incorporation, dormant.
Securities being admitted
The Ordinary Shares are ordinary shares of 0.1p each and are issued in British Pounds Sterling. TheISIN of the Ordinary Shares is GB00B3LXPB43.
The Ordinary Shares may be held in certificated form or under the CREST system, which is apaperless settlement procedure enabling securities to be evidenced and transferred otherwise than bya written instrument in accordance with the CREST Regulations. The Company's registrars, CapitaRegistrars are responsible for keeping the Company's register of members.
The dividend and voting rights attaching to the Ordinary Shares are set out in paragraphs 6.10 and 6.2(respectively) of this Part VI.
The Shareholders have no right to share in the profits of the Company other than through a dividend,distribution or return of capital. Further details of such rights are set out in paragraph 6 of this Part VI.
Each Placing Share carries the right, on a pari passu basis with the Existing Ordinary Shares, to sharein any surplus on a liquidation of the Company.
The Ordinary Shares have no redemption or conversion provisions.
It is anticipated that the Placing Shares will be issued on 12 February 2010, the proposed date ofAdmission.
The Ordinary Shares are freely transferable provided that such shares are fully paid, the Company hasno lien over such shares, the instrument of transfer is duly stamped, is in favour of not more than fourjoint transferees and is in respect of only one class of shares.
No person has made a public takeover bid for the Company's issued share capital since incorporation.
Share Capital of the Company
The issued share capital of the Company immediately prior to Admission is as follows: Issued and fully paid up share capital Number of Ordinary Shares of 0.1p The issued share capital of the Company immediately after Admission will be as follows: Issued and fully paid up share capital Number of Ordinary Shares of 0.1p As permitted by the provisions of the CA 2006, the Company does not have an upper limit to itsauthorised share capital.
The Placing will result in the allotment and issue of 62,857,148 Placing Shares, diluting existingholders of Ordinary Shares by approximately 13.5 per cent. At the date of incorporation, the issued share capital of the Company was £2, subscribed for by thetwo subscribers to the Company's memorandum of association, who were the Company'sincorporation agents. On 7 October 2009 the two Ordinary Shares in the Company were transferred(as to one share each) to each of Michael Bretherton and ORA.
Under the Company's original articles of association, the Directors were authorised to allot shares(subject to the provisions of the CA 2006) with no maximum.
At a general meeting of the Company held on 27 January 2010 the Shareholders passed resolutions("Resolutions") approving: 4.7.1 the acquisition by the Company of the entire issued share capital of Oxford Nutrascience for the purposes of section 190 of the CA 2006; 4.7.2 pursuant to section 551 of the CA 2006, the allotment of securities up to an aggregate nominal amount of £563,341.25; 4.7.3 the adoption of the share option schemes 4.7.4 pursuant to section 570 of the CA 2006, the allotment of equity securities for cash as if section 561 of the CA 2006 did not apply and such power is limited to the allotment of equitysecurities: in connection with rights issues to holders of ordinary shares; in connection with the acquisition by the Company of Oxford Nutrasciencepursuant to the Share Exchange Agreement; in connection with the grant of the Theobald Options under the Share OptionSchemes; and (otherwise than pursuant to paragraphs (a) to (c) above) up to a maximumaggregate nominal amount of £109,259.53; and 4.7.5 the sub-division of the two £1.00 shares in the issued share capital to 2,000 shares of 0.1p each; 4.7.6 the adoption of the Articles; and 4.7.7 the change of name from Prebiosys plc to Oxford Nutrascience Group Plc.
On 27 January 2010, pursuant to the Share Exchange Agreement, the Company allotted and issued atotal of 401,164,650 Ordinary Shares credited as fully paid up to 1.6p per share to the Vendors, inreturn for the transfer to the Company of the entire issued share capital of Oxford Nutrascience. AsMichael Bretherton and ORA already held 1,000 Ordinary Shares each in the capital of the Companyprior to the acquisition of the shares of Oxford Nutrascience, the consideration shares which wouldhave otherwise been received by each of them (on the basis of a 25 for 1 share exchange formula) wasreduced by 1,000 each in order to ensure that the shareholdings (in percentage terms) post completionof the ONL Acquisition were identical to the shareholdings in Oxford Nutrascience (in percentageterms) immediately before completion of the ONL Acquisition.
Save as described above, the Company has made no further allotments of Ordinary Shares since thedate of incorporation.
Other than the Theobald Options no person has any rights to subscribe for Ordinary Shares. No person has any rights over any of the capital of the Company and the Company has not agreedconditionally or unconditionally to grant any option over its capital.
5 Memorandum
The Memorandum of Association reflects the subscribers' agreement to become a member of theCompany by taking at least 1 share each.
6 Articles
Association
The model articles of association set out in the Companies (Model Articles) Regulations 2008 areexcluded and a new set have been adopted by ONG. The liability of the members is limited to anyunpaid capital on the shares held by them. Subject to any special rights or restrictions as to voting attached to any shares and subject to anysuspension or abrogation of voting rights pursuant to the Articles at a general meeting, on a show ofhands every member who (being an individual) is present in person and every proxy and everymember (being a corpORAtion) who is present by a duly authorised representative not being himselfa member, shall have one vote, so however that no individual shall have more than one vote and on apoll every member present in person or by proxy shall have one vote for every share of which he isthe holder.
General Meetings of Shareholders
All general meetings which are not annual general meetings are general meetings. General meetingsmay be called by directors whenever they think fit or within not more than 21 days of receipt of arequisition of members served in accordance with the Act, in which case the general meeting must beconvened for a date not more that 28 days after the date of the notice convening the meeting. If thereare insufficient directors in the UK to form a quorum, any director or two members may convene angeneral meeting, in the same manner as nearly as possible as that in which meetings may be convenedby the directors.
An annual general meeting shall be called by at least twenty-one clear days' notice and all othergeneral meetings shall be called by at least fourteen clear days' notice.
The special rights attached to any class of shares may, subject to any applicable law, be modified orabrogated, either with the consent in writing of the holders of three-fourths in nominal value of theissued shares of that class or with the sanction of a special resolution passed at a separate generalmeeting of the holders of shares of that class.
The provisions of the Articles applicable to general meetings apply mutatis mutandis to class meetingsbut the necessary quorum is two persons holding or representing by proxy not less than one third ofthe issued shares of that class except where there is only one holder of the relevant class of shares inwhich case the quorum shall be that holder.
Changes to Share Capital
Unless the Company in a general meeting otherwise resolves by special resolution the Company shallnot have any upper limit to its authorised share capital.
The Company may by ordinary resolution consolidate and divide all or any of its shares into sharesof a larger amount, cancel any shares not taken or agreed to be taken by any person and sub-divide itsshares into shares of a smaller amount.
Any new shares proposed to be issued by the Company shall be offered in the first instance inaccordance with section 561 of the Act (save to the extent disapplied from time to time by specialresolution) to all the shareholders for the time being, on the same or on more favourable terms thanthose offered or to be offered to persons other than shareholders, in proportion to the number of sharesof the same class held by them.
Reduction of Share Capital
The Company may by special resolution (and, with court approval where required) reduce itsauthorised or issued share capital or any capital redemption reserve and any share premium accountin any way subject to any authority required by law. Subject to applicable law, the Company maypurchase its own shares.
The Company may create and sanction the issue of shares which are, or at the option of the Companyor the holder are to be liable, to be redeemed, subject to and in accordance with the provisions of theStatutes and the Directors may determine the terms, conditions and manner of redemption of any suchshares.
6.8.1 A director is not required to hold any qualification shares.
6.8.2 The amount of any fees payable to directors shall be determined by the directors provided that they shall not in any year exceed an aggregate amount of £400,000 or such other sum as mayfrom time to time be approved by ordinary resolution. The directors are also entitled to berepaid all expenses properly incurred by them respectively in the performance of their duties.
Any director holding an executive office or otherwise performing services which in the opinionof the directors are outside the scope of his ordinary duties as a director may be paid suchremuneration as the directors may determine.
6.8.3 The directors may establish and maintain or procure the establishment and maintenance of any non-contributory or contributory pension or superannuation funds for the benefit of, and givedonations, gratuities, pensions, allowances or emoluments to, any persons who are or were atany time in the employment or services of the Company or any other company which is asubsidiary of the Company or is allied to or associated with the Company or any suchsubsidiary of any such other company ("associated companies") and the families anddependents of any such persons and the directors shall have power to purchase and maintaininsurance against liability for any persons who are or were at any time directors or officers ofthe Company, its associated companies and for trustees of any pension fund in whichemployees of the Company or its associated companies are interested.
6.8.4 The directors may from time to time appoint one or more of their body to be the holder of any executive office (including the office of chairman, vice-chairman, managing director or anyother salaried office on such terms and for such period as they may determine.
6.8.5 Subject to the provision of applicable law and provided that he has disclosed to the directors the nature and extent of his interest, a director notwithstanding his office: may be a party to, or otherwise interested in, any transaction or arrangement with theCompany or in which the Company is otherwise interested (directly or indirectly); may be a director or other officer of, or employed by, or party to, any transaction orarrangement with, or otherwise interested in, any body corporate promoted by theCompany or in which the Company is otherwise interested; may hold any other office or place of profit under the Company (except that of auditoror auditor of a subsidiary of the Company) in conjunction with the office of Director andmay act in a professional capacity to the Company on such terms as to remuneration andotherwise as the directors may arrange; and shall not, by reason of his office, be accountable to the Company for any benefit whichhe derives from any such office or employment or from any such transaction orarrangement or from any interest in any such body corporate.
6.8.6 For the purposes of Section 175 of the Act, the Board may authorise any matter proposed to it in accordance with the Articles which would, if not so authorised, involve a breach of duty bya director under that section, including, without limitation, any matter which relates to asituation in which a director has, or can have, an interest which conflicts, or possibly mayconflict, with the interests of the Company.
Any such authorisation will be effective only if: any requirement as to quorum at the meeting at which the matter is considered ismet without counting the director in question or any other interested director; and the matter was agreed to without their voting or would have been agreed to if theirvotes had not been counted.
The Board may (whether at the time of the giving of the authorisation or subsequently)make any such authorisation subject to any limits or conditions it expressly imposes butsuch authorisation is otherwise given to the fullest extent permitted.
The Board may vary or terminate any such authorisation at any time.
For the purposes of the Articles, a conflict of interest includes a conflict of interest andduty and a conflict of duties, and interest includes both direct and indirect interests.
6.8.7 Subject to Section 177(5) and Section 177(6) of the Act, provided that he has disclosed to the Board the nature and extent of his interest, a Director notwithstanding his office: may be a party to, or otherwise interested in, any transaction or arrangement with theCompany or in which the Company is otherwise (directly or indirectly) interested; may act by himself or his firm in a professional capacity for the Company (otherwisethan as auditor) and he or his firm shall be entitled to remuneration for professionalservices as if he were not a Director; may be a director or other officer of, or employed by, or a party to a transaction orarrangement with, or otherwise interested in, any body corporate in which the Companyis otherwise (directly or indirectly) interested.
6.8.8 A Director shall not, by reason of his office, be accountable to the Company for any remuneration or other benefit which he derives from any office or employment or from anytransaction or arrangement or from any interest in any body corporate: the acceptance, entry into or existence of which has been approved by the Boardpursuant to Article 100 (subject, in any such case, to any limits or conditions to whichsuch approval was subject); or which he is permitted to hold or enter into by virtue of paragraphs (a), (b) or (c) ofArticle 101 above; nor shall the receipt of any such remuneration or other benefit constitute a breach of his dutyunder Section 176 of the Act.
6.8.9 At every annual general meeting, director's bound to retire under section 177 of the Act and one third of all other directors then serving on the Board shall retire by rotation and stand forre-election. Transfer of Shares
6.9.1 Subject to the restrictions referred to below, any member may transfer all or any of his certified shares by instrument in writing in any usual or common form, or in such other form as thedirectors may approve. The instrument of transfer shall be signed by or on behalf of thetransferor and, in the case of a partly paid up share, by or on behalf of the transferee. The directors may, in their absolute discretion and without assigning any reason, refuse to registera transfer of any share, not being a fully paid up share, or being in respect of a share on whichthe Company has a lien. They may also refuse to register any transfer of any share (whetherfully paid or not) to be held jointly by more than four persons. The directors may also declineto register any instrument of transfer unless: it is deposited duly stamped, at the registration office of the Company, or such otherplace as the directors may appoint, accompanied by the certificate for the shares towhich it relates and such other evidence as the directors may reasonably require to showthe right of the transferor to make the transfer; and it is in respect of only one class of certified share.
The registration of transfers may be suspended by the directors for any period not exceeding30 days in any year as the directors determine.
6.10.1 Subject to the provisions of the Act, the Company may by ordinary resolution declare a dividend to be paid to the members according to their respective rights and interest, but nodividend shall exceed the amount recommended by the directors. Subject to the provisions ofthe Act, the directors may pay such interim dividends as appear to them to be justified by theprofits of the Company available for distribution. No dividend shall be payable except out ofthe profits of the Company.
6.10.2 All dividends shall be declared and paid according to the amounts paid on the shares in respect of which the dividend is paid, but no amount paid on a share in advance of calls shall be treatedas paid up on the share. All dividends shall be apportioned and paid proportionately to theamounts paid on the shares during any portion of the period in respect of which the dividendis paid; but if any share is issued on terms providing that it shall rank for dividends as from aparticular date such share shall rank for dividend accordingly.
6.11.1 The directors may exercise all the powers of the Company to borrow money and to mortgage or charge all or any part of its undertaking, property and assets (both present and future),including its uncalled capital and, subject to the Act, to issue debentures and other securities,whether outright or as collateral security, for any debt, liability or obligation of the Companyor of any third party. The directors shall restrict the borrowings of the Company and exerciseall voting and other rights or powers of control exercisable by the Company in relation to itssubsidiaries so as to secure (but as regards subsidiary undertakings only insofar as, by theexercise of the rights or powers of control, the directors can secure) that the aggregate principalamount outstanding of all borrowings by the Group (exclusive of borrowings owing by onemember of the Company to another member) does not, without the previous sanction of anordinary resolution, exceed the greater of £30,000,000 or an amount equal to four times theadjusted capital and reserves (as defined in the Articles).
6.12 Rights of Shares
6.12.1 The Ordinary Shares rank pari passu as a class in terms of preference, restriction and all other Directors' and other interests
The interests of the Directors (all of which are beneficial) and their connected persons in the issuedshare capital of the Company as at the date of this document and, as they are expected to beimmediately after Admission, are as follows and include such interests which could with reasonablediligence be ascertained by that Director, whether or not held through a third party: of the issued share capital Percentage of this at the date of of Enlarged Options held document this document Admission Share Capital at Admission Michael Bretherton Save as disclosed in this paragraph and paragraph 8 below, the Company is not aware of any interest(within the meaning of Part 22 of the CA 2006) in the Ordinary Shares which amounts or would,immediately following Admission, amount to 3 per cent. or more of the Enlarged Issued ShareCapital. Save as disclosed in paragraph 7.1 and paragraph 8, the Company is not aware of any person orpersons who either alone or, if connected, jointly who currently or, following the completion of thePlacing, will (directly or indirectly) exercise or could exercise control over the Company.
The Shareholders listed in paragraphs 7.1 and 8.1 do not have different voting rights to other holdersof Ordinary Shares.
The Directors are not aware of any arrangements in place or under negotiation which may, at asubsequent date result in a change of control of the Company.
8 Substantial
The Company is aware that, in addition to the holdings referred to in paragraph 7.1 above, thefollowing persons have at the date of this document an interest in, and/or will be following Admissioninterested in, three per cent or more of the issued ordinary share capital of the Company: Percentage of Number of the issued Number of Ordinary share Ordinary Shares capital at the immediately Percentage of at the date of date of this after Enlarged Share Name this ORA (Guernsey) Limited Richard Griffiths Directors' service contracts and remuneration
The following service contracts, letters of appointment and consultancy agreement have been enteredinto, inter alia, between the Company, ONL and the Directors (as applicable): 9.1.1 Nigel Theobald was appointed as a director of the Company at a Board meeting on 12 October 2009. On 8 February 2010, Mr Theobald entered into a service agreement with the Companyto act as a director and as the chief executive officer of the Company. Under the terms of theservice agreement, Mr Theobald's appointment will commence on Admission and willcontinue until terminated by either party giving to the other not less than six months' notice inwriting. The service agreement contains provisions for early termination, inter alia, in the eventof a breach of the terms of such agreement by Mr Theobald. The agreement also contains provisions for payment in lieu of notice, and enables the Company to place Mr Theobald ongarden leave. The Agreement also contains a clause regarding confidentiality of information,ownership of intellectual property and post-termination restrictions prohibiting solicitation ofspecified staff for six months after termination of his employment and also prohibitinginvolvement in a competing business for a period of six months after the termination of hisemployment. Mr Theobald is entitled to receive a salary of £90,000 per annum. He is alsoeligible to participate in the Company's discretionary bonus scheme from time to time and inany private medical and permanent health insurance schemes introduced by the Company fromtime to time.
9.1.2 Michael Bretherton was appointed as a director of the Company at a Board meeting on 12 October 2009. Mr Bretherton entered into a letter of appointment dated 8 February 2010 setsout the terms of his appointment. Mr Bretherton's letter of appointment states that hisappointment will be effective from Admission and will continue until terminated by eitherparty giving to the other three months' written notice. The letter of appointment containsprovisions for early termination, inter alia, in the event of a breach of the terms of theappointment by Mr Bretherton. The fee payable for his services as a Director is £10,000 perannum. 9.1.3 On 8 February 2010, the Company (1), ORA Capital Partners Limited ("OCP") (2) and Michael Anthony Bretherton (3) entered into a consultancy agreement pursuant to which MrBretherton was appointed as consultant Finance Director to the Company. The agreement isterminable on three months' written notice by either party to the other. The fee payable to OCPfor the provision of Mr Bretherton's services is £6,000 plus VAT for providing services for oneday per month. OCP receives a fee of £500 plus VAT per day for any further days worked byMr Bretherton. In addition, OCP receives reimbursement for out of pocket expenses incurredby Mr Bretherton during the provision of the services. The consultancy agreement containsprovision for early termination, inter alia, in the event of a breach by Mr Bretherton or OCP ofthe terms of the agreement. The agreement contains provision protecting the Company'sconfidential information and intellectual property rights. It also contains post-terminationrestrictions which mean that both OCP and Mr Bretherton are restricted from competing withthe business or soliciting or enticing employees or consultants of the Company or the Groupfor a period of six months commencing on the date on which the consultancy agreement isterminated.
9.1.4 Marcelo Bravo was appointed as a director of the Company at a Board meeting on 12 October 2009. Mr Bravo entered into a letter of appointment dated 8 February 2010 which reflects thefact that his appointment is of a non-executive nature Director and sets out the terms of hisappointment. Mr Bravo's letter of appointment states that his appointment will be effectivefrom Admission and will continue until terminated by either party giving to the other threemonths' written notice. The letter of appointment contains provisions for early termination,inter alia, in the event of a breach of the terms of the appointment by Mr Bravo. The fee payablefor his services as a non-executive Director is £10,000 per annum. Mr Bravo will be a memberof the Company's audit and remuneration committees and will chair the audit committee.
9.1.5 James White was appointed as a director of the Company at a Board meeting on 11 November 2009. Mr White entered into a letter of appointment dated 8 February 2010 which reflects thefact that his appointment is of a non-executive nature and sets out the terms of his appointment.
Mr White's letter of appointment states that his appointment will be effective from Admissionand will continue until terminated by either party giving to the other three months' writtennotice. The letter of appointment contains provisions for early termination, inter alia, in theevent of a breach of the terms of the appointment by Mr White. The fee payable for his servicesas a non-executive Director is £10,000 per annum. Mr White will be a member of theCompany's audit and remuneration committees and will chair the remuneration committee.
9.1.6 On 12 November 2009, Andrew Hawken will enter into a service agreement with ONL to act as business development director of ONL. His appointment commenced on 1 January 2010 andwill continue until terminated by either party giving to the other not less than three months'notice in writing. The service agreement contains provisions for early termination, inter alia, inthe event of a breach of the terms of the agreement by Mr Hawken. The agreement alsocontains provisions for payment in lieu of notice, and enables ONL to place Mr Hawken ongarden leave. The Agreement also contains a clause regarding confidentiality of information,ownership of intellectual property and post-termination restrictions prohibiting solicitation ofspecified staff for six months after termination of his employment and prohibiting involvementin a competing business for a period of six months after the termination of his employment. MrHawken is entitled to receive a salary of £50,000 per annum. He is also eligible to participatein ONL's discretionary bonus scheme from time to time, and will receive an annual carallowance.
Save as disclosed in sub-paragraph 9.1 above, there are no service contracts, letters of appointment orconsultancy agreements, existing or proposed, between any Director and the Company and no servicecontracts, letters of engagement or consultancy agreements have been entered into or amended by theCompany or any of its subsidiaries in the six months prior to the date of this document.
Details of the length of time in which the Directors have been in office are set out below: Commencement of Period of office Michael Bretherton Additional Information on the Board
10.1 In addition to directorships of the Company the Directors hold or have held the following directorships or have been partners in the following partnerships within the five years prior to the dateof this document: Current Directorships and Partnerships Past Directorships and Partnerships Michael Bretherton Nanoco Group Plc Novum Securities Ltd Nanoco Tech Limited Novum Private Clients Ltd Obtala Resources Plc Novum Nominees Ltd ORA Capital LtdORA Capital Partners LimitedOxeco PlcOxford Advanced Surfaces Group PlcOxford Nutrascience LimitedOxford Nutra LimitedOxray LimitedORA (Guernsey) Ltd Oxford Nutrascience Limited Super foods Ltd (dissolved)Oxford Advanced Surfaces Group PlcOxford Advanced Surfaces LtdOxford Biomedical Materials LtdOxford Energy Technologies Ltd Current Directorships and Partnerships Past Directorships and Partnerships Oxford Nutrascience Limited Bar Bizarre Limited (dissolved) Oxford Nutra Limited Emerge Marketing Ltd(dissolved)Super foods Ltd(dissolved)Synpart Health & Beauty Limited Osmetech plcOsmetech IncOsmetech Technology IncClinical Micro Sensors IncOsmetech GmbHMolecular Sensing LimitedMolecular Sensors LimitedOsmetech AESOP Trustee Limited Save as disclosed in paragraph 10.3 and 10.4 below, none of the Directors has: 10.2.1 any unspent convictions in relation to indictable offences; 10.2.2 had any bankruptcy order made against him or entered into any voluntary arrangements; 10.2.3 been a director of a company which has been placed in receivership, compulsory liquidation, creditors' voluntary liquidation, administration, been subject to a voluntary arrangement or anycomposition or arrangement with its creditors generally or any class of its creditors whilst hewas a director of that company or within the 12 months after he ceased to be a director of thatcompany; 10.2.4 been a partner in any partnership which has been placed in compulsory liquidation, administration or been the subject of a partnership voluntary arrangement whilst he was apartner in that partnership or within the 12 months after he ceased to be a partner in thatpartnership; 10.2.5 been the owner of any assets or a partner in any partnership which has been placed in receivership whilst he was a partner in that partnership or within the 12 months after he ceasedto be a partner in that partnership; 10.2.6 been publicly criticised by any statutory or regulatory authority (including recognised professional bodies); or 10.2.7 been disqualified by a court from acting as a director of any company or from acting in the management or conduct of the affairs of a company.
Marcelo Bravo was a director of Super Foods Limited ("SFL") at the time it was placed into members'and creditors' liquidation on 20 March 2008. HSBC Bank plc had a floating charge over SFL and wasowed a total of £83,333.30 at the time of the liquidation. Total assets of £11,054.00 were madeavailable as a result of the liquidation and were paid to HSBC Investment Bank plc, leaving£72,279.30 unpaid. SFL had unsecured creditors to whom a total of £124,348.56 was owed andunpaid on completion of the liquidation, which added to an amount of £171,911.00 owed to membersas a result of issued and called up share capital, gave a total deficiency of £368,538.86. NigelTheobald had also been a director of Super Foods Limited but resigned as a director on 2 November2006. Michael Bretherton was a non-executive director of Brimley & Co Limited (‘Brimley'). A whollyowned subsidiary of Bridgend Group plc, until the reverse takeover of that company by HemscottHoldings Limited (‘Hemscott') on 15 August 2000, at which time he resigned from the board of theenlarged Hemscott company and all its subsidiaries, including Brimley. Subsequent to that acquisitionand Mr Bretherton's resignation, the business and certain assets of Brimley were sold, its name changed to XLIV Limited and it was then placed into creditors voluntary liquidation on 30 October2000 with an estimated deficiency as regards external creditors of £168,000.
11 Employees
The Enlarged Group will, on Admission, have 3 employees (including Executive Directors but excludingNon-Executive Directors). The following table shows how many employees will be working for each GroupCompany as at Admission: Group Company Number of Employees Oxford Nutra Limited Share Option Schemes
The rules of both the EMI Scheme and the Unapproved Scheme are incorporated within one schemedocument known as the Rules of the Oxford Nutrascience Group Plc Share Option Plan 2009. Set outbelow is a summary of the main elements of the EMI Scheme. Any specific differences between theEMI Scheme and the Unapproved Scheme are set out in paragraph 12.25 below.
The EMI Scheme is only open to those persons who are classed as "eligible employees" under therelevant Enterprise Management Incentive legislation and includes any bona fide employee of theCompany who satisfies the requirement as to commitment of working time by spending 25 hours perweek (or, if less, 75 per cent. of his working time) on the business of the Group and satisfies the ‘nomaterial interest' requirement which means the person either alone or together with a related partydoes not have a material interest in any Group Company which broadly means more than 30 per cent.
of the share capital of that company.
Grant of Options
12.3 The Board has absolute discretion as to the selection of persons to whom an option is granted. The Company may grant options at any time but may only grant an EMI option to a qualifying employeeand shall not grant an EMI option to any other person.
The grant of an EMI option shall be effected by the Company entering into an EMI option agreementcontaining information which specifies inter alia the date of the grant, the number of shares in respectof which the option is granted, the exercise price, the basis on which the options vest, confirmationthe grantee agrees to indemnify the Company in respect of any option tax liabilities it may suffer andwhether or not the option will lapse on the occurrence of a sale. Relationship of the plan to employment or engagement
The grant of an option does not form part of the grantee's entitlement to remuneration or benefitspursuant to the grantee's contract of employment or contract for services (if any). The grant of anoption shall not afford the grantee any rights or additional rights to compensation or damages.
Neither the grant nor any benefit which may accrue shall form part of that grantee's pensionableremuneration for the purposes of any pension scheme.
Non-Transferability of Option
An option may only be exercised by the individual grantee (or by his personal representatives in thecase of death). Any attempts to transfer or assign an option shall result in the immediate lapse of theoption.
Exercise of Options
An option may not be exercised later than midnight on the day preceding the tenth anniversary of thedate of grant or such earlier time as permitted by the EMI Scheme.
In relation to each option the Board shall determine at the date of grant the basis upon which theoption shall vest and may be conditional on things such as the Company's performance.
12.10 An EMI option agreement may provide that if an option vests in respect of some or all of the shares and the shares are not exercised within a specified period then the option shall lapse and cease to beexercisable. If in consequence of a performance related event an option becomes vested in some butnot all of the shares over which it subsists, but the option does not and cannot vest for the remainingshares, then the option shall lapse with regards the balance of shares but will not lapse in respect ofsuch shares to which the performance related condition does not relate.
12.11 If a performance related condition must be satisfied by a particular date, the option shall lapse after midnight on that date if not satisfied. The Board shall determine whether a performance condition hasbeen satisfied.
12.12 If a grantee ceases to be an employee (other than by reason of his death) then any subsisting option held by him shall cease to be exercisable on the date of such cessation, save that if, within 40 days ofthe date of cessation the Board determines that such option may be exercised, then the grantee may,exercise it within such 40 day period. If a grantee ceases to be an employee by reason of his death,then any subsisting option held by him may be exercised by his personal representatives to the extentthe option has vested within 12 months of the date of the optionholders death. Exercise after the saleof the Company can take place during the period of one month beginning with the date ofunconditional completion.
12.13 If the Board considers a sale is imminent, they may direct that a grantee may exercise a subsisting option, to the extent that such option shall be treated as vested. Such entitlement may be madeconditional upon the sale taking place.
12.14 If the Company is listed, an option may be exercised to the extent vested and the grantee agrees that the shares shall be subject to such restrictions as the Board may determine. Following a listing, thegrantee shall not exercise the option in breach of the rules of the relevant recognised investmentexchange.
Manner of Exercise of Options
12.15 Any subsisting option which is exercisable may be exercised in whole or in part. The minimum number of Shares over which such option shall be exercised must be 250 or 25 per cent. of the sharesover which the option has vested. An option shall be exercised only by the grantee serving a writtennotice upon the Company specifying the number of shares over which the option is granted and isaccompanied by the necessary payment, option certificate, signed grantee documentation andpayment of the option tax liability. Within 30 days of the applicable conditions being satisfied theCompany shall allot the grantee the shares specified in the notice. As soon as reasonably practicablethe Company shall issue a definitive share certificate.
12.16 The allotment of any shares is subject to the Company's MemORAndum and Articles of Association.
If the shares are listed at the time of exercise the Company shall apply to the exchange or market forsuch shares to be admitted.
Overall Limit on the granting of Options
12.17 A qualifying EMI option may not be granted to a qualifying employee if it would cause the aggregate market value of the shares subject to all qualifying EMI options and any option granted under ascheme approved under Schedule 4 to ITEPA 2003 to exceed £120,000.
12.18 A qualifying EMI option may not be granted if as a result of such grant the aggregate market value of the Shares subject to all qualifying EMI options would exceed £3,000,000 or the gross assets of theEnlarged Group exceed £30 million.
12.19 The total number of shares in respect of which options may be granted shall not exceed 10 per cent.
of the then issued share capital of the Company from time to time. Where a qualifying employee hasbeen cumulatively granted EMI options with an aggregate market value equal to or greater than£120,000, any further option granted within three years is to be treated as an unapproved option.
12.20 Any ‘option tax liability' (which is any tax liability of a grantor company arising from the grant or exercise of the options or whether such options qualify for the Enterprise Management Incentivelegislation or not) is the responsibility of the grantee and the grantee agrees to indemnify the Companyin respect of such liability (howsoever arising).
Variation of share capital
12.21 In the event of any alteration of the ordinary share capital by way of capitalisation or rights issue, or sub-division, consolidation or reduction or any other variation in the share capital of the Company orany purchase by the Company of its own share, if the Board so chooses, it may determine the numberor amount of shares that are the subject of an option and the exercise price of those shares providedthe nominal value of the shares is not reduced below the nominal value of the share. The Board mayreduce the exercise price of any share subject to an option, to the extent the Board is authorised tocapitalise from the Company's reserves a sum equal to the amount by which the aggregate nominalvalue of the shares exceeds the aggregate adjusted exercise price under such options.
Alteration of the Share Option Scheme
12.22 The Board may alter the rules of the EMI Scheme provided no alteration to the rules will effect any option granted prior to the date of such alteration except with the consent of the grantee, such consentto be given in writing and by deed.
12.23 The plan shall be administered by the Board acting on behalf of the Company. The Board may make and vary such regulations as they think fit. In the event of any dispute or disagreement the decision ofthe Board is final and binding.
12.24 The company shall keep available sufficient authorised but unissued ordinary Shares to enable it to satisfy the exercise in full of all options to subscribe for shares. The plan shall terminate on the tenthanniversary of its date of adoption and may be terminated at any time before that by the Board but ineither case the then existing rights and liabilities of the grantees shall not be effected. The existenceof any option shall not affect the right or power of the Company or its shareholders. to carry onbusiness in any particular way.
The Unapproved Scheme
12.25 The Unapproved Scheme rules contain the same basic criteria are used as far as the EMI Scheme save for the following: The Unapproved Scheme is open to those persons who are classed as "employees" of theGroup. The grant of an Unapproved option is affected by the Company executing as a deedand issuing the grantee an Unapproved Option Certificate containing an undertaking by thegrantee to be executed as a deed of acceptance that the grantee agrees to be bound by theShare Option Plan rules. The Company may only grant an Unapproved option to an employee and shall not grant anUnapproved option to any other person. An Unapproved option certificate may provide thatif an option vests in respect of some or all of the shares and the shares are not exercisedwithin a specified period then the option shall lapse and cease to be exercisable. There is noupper limit to the value of options which may be granted under the Unapproved Scheme,other than as set out by the shareholders in general meeting, and subject always to there notbeing more than 10 per cent. of the issued share capital (from time to time) under option.
The above summary of the principal terms of the Share Option Schemes does not form part of the
rules of the Share Option Schemes and should not be taken as affecting the interpretation of the
detailed terms and conditions. The Board reserves the right to make amendments and any additions
to the rules of the Share Option Schemes that they consider necessary or appropriate, provided that
any amendment may not conflict in any material respect with the above summary.
13 Material
The following contracts, not being contracts entered into in the ordinary course of business, have beenentered into by the Group since its incorporation and are, or may be, material: Oxford Nutrascience Group plc
Share Exchange Agreement 13.1 A share exchange agreement dated 8 February 2010 between the Vendors (1) the Company (2) and ONL (3) pursuant to which the Company acquired the entire issued share capital of OxfordNutrascience for a total consideration of £6,418,634.40 satisfied by the issue by the Company of401,164,650 Ordinary Shares to the Sellers credited as fully paid at 1.6p per share, such that the issuedshare capital of the Company immediately after completion of the ONL Acquisition replicated theissued share capital of Oxford Nutrascience, in percentage holdings terms. Under the Share ExchangeAgreement the Vendors gave limited warranties as to title of the shares then held in OxfordNutrascience.
Placing Agreement On 8 February 2010, the Company entered into a Placing Agreement with the Directors, ZAI andZAICF. Under the agreement, ZAI undertook as agent for the Company to use its reasonableendeavours to procure persons to subscribe for the Placing Shares at the Placing Price and ZAICFundertook to assist the Company in relation to Admission. The Placing Agreement contains customarywarranties from the Company and the Directors in favour of ZAI and ZAICF, and customaryindemnities from the Company in favour of ZAI and ZAICF. The liability of the Directors is subjectto certain limitations. Under the Placing Agreement the Company agreed to pay to ZAI a corporatefinance fee. The Placing Agreement is conditional on, inter alia, Admission becoming effective on orbefore 12 February 2010 or such later time as the Company, ZAI and ZAICF may agree being, in anyevent, not later than 26 February 2010. The agreement may be terminated if certain conditions,including Admission, are not satisfied.
Nominated Adviser Agreement A nominated adviser agreement dated 8 February 2010 made between the Company (1) and ZAI (2)pursuant to which the Company appointed ZAI to act as nominated adviser for the purposes of theAIM Rules. The Company has agreed to pay ZAI an annual fee of £19,999 plus VAT for its servicesas nominated adviser. The Agreement contains certain undertakings and indemnities given by theCompany in respect of, inter alia, compliance with applicable laws and regulations. The Agreementis for a fixed term of 12 months and subject to termination on three months' notice by either partythereafter.
Broker Agreement A broker agreement dated 8 February 2010 made between the Company (1), the Directors (2) andZAICF (3) pursuant to which the Company has appointed ZAICF to act as broker to the Company forthe purposes of the AIM Rules. The Company agreed to pay ZAICF an annual fee of £1 plus VAT forits services as broker. The Broker Agreement contains certain undertakings and indemnities given by(1) the Company and (2) the Directors in respect of, inter alia, compliance with applicable laws andregulations. The Broker Agreement is subject to termination on three months' notice by either party.
The Directors, David Norwood and ORA have agreed, with the Company and ZAICF (under the termsof the Placing Agreement in the case of the Directors) that they will not (save in certain specificcircumstances) dispose of, agree to dispose of or charge any Ordinary Shares or interests in OrdinaryShares for a period of one year following Admission, and then for a further period of one yearthereafter to only dispose of Ordinary Shares through the Company's broker from time to time in suchmanner as the broker may reasonably require in order to maintain an orderly market in the OrdinaryShares of the Company.
A relationship agreement dated 8 February made between the Company (1) and ORA (2) conditionalupon Admission pursuant to which ORA has agreed: to exercise its rights as a shareholder to ensure that all transactions, relationships andagreements between the Company and ORA or any associate of ORA (as defined inAppendix I to the Listing Rules of the FSA) are on arm's length terms; that neither it nor its associates will acquire, agree to acquire or announce any intention toacquire shares in the Company nor make a general offer for all or part of the share capitalof the Company; to give the Company 2 days notice of any intention of ORA, or an associate, to dispose ofany interest in the share capital of the Company which would reduce ORA and its associatesaggregate shareholding to less than 25 per cent.; to procure (as far as it is able) that Non-Independent Directors (as defined in the agreementand being, at Admission, Michael Bretherton) do not vote at a Board meeting on anyresolution relating to any proposed contract or arrangement with ORA and/or its associates;and in such manner so as to procure (so far as it is able) that it will not vote at meetings ofShareholders on any resolution relating to any proposed contract or arrangement with ORAand/or its associates.
The agreement is effective for so long as ORA, together with its associates, hold (whether directly orindirectly) in aggregate, shares in the capital of the Company representing 25 per cent. of more of theCompany's entire issued ordinary share capital.
Oxford Nutrascience Limited
A share exchange agreement dated 27 January 2010 between the Vendors (1) the Company (2) andONL (3) pursuant to which the Company acquired the entire issued share capital of OxfordNutrascience for a total consideration of £6,418,634.40 satisfied by the issue by the Company of401,164,650 Ordinary Shares to the Sellers credited as fully paid at 1.6p per share, such that the issuedshare capital of the Company immediately after completion of the ONL Acquisition replicated theissued share capital of Oxford Nutrascience, in percentage holdings terms. Under the Share ExchangeAgreement the Vendors gave limited warranties as to title of the shares then held in OxfordNutrascience.
Assignment Agreement dated 29 January 2010 between ONL and Co-Formulate Limited This agreement provides for the assignment by Co-Formulate to ONL of all and any right, title andinterest that Co-Formulate had in respect of the technology which is the subject of the second patentfamily (patent application GB0907019.4), together with all rights in any inventions and materialsgenerated by Co-Formulate pursuant to the consultancy service agreement entered into by the partiesor otherwise.
In consideration for the assignment of Co-Formulate's rights, ONL paid £20,000 to Co-Formulatepursuant to this agreement.
This agreement contains the usual warranty and further assurance provisions that you would expectto see in an assignment of this nature.
ONL is required, pursuant to this agreement, to execute and file all necessary documents at theIntellectual Property Office to name Huw Jones and Nazim Kanji as co-inventors, together withMarcelo Bravo, of the patent to which patent application GB0907019.4 relates.
Deed of Assignment dated 29 January 2010 between ONL and Huw Jones This agreement provides for the assignment by Huw Jones to ONL of all and any right, title andinterest that Huw Jones had in respect of the technology which is the subject of the second patentfamily (patent application GB0907019.4), together with all rights in any inventions and materialsgenerated by Huw Jones in the provision of services for or on behalf of Co-Formulate in relation tothe consultancy service agreement entered into by ONL and Co-Formulate.
This agreement contains the usual warranty and further assurance provisions that you would expectto see in an assignment of this nature.
ONL is required, pursuant to this agreement, to execute and file all necessary documents at theIntellectual Property Office to name Huw Jones and Nazim Kanji as co-inventors, together withMarcelo Bravo, of the patent to which patent application GB0907019.4 relates.
13.10 Deed of Assignment dated 29 January 2010 between ONL and Nazim Kanji This agreement provides for the assignment by Nazim Kanji to ONL of all and any right, title andinterest that Nazim Kanji had in respect of the technology which is the subject of the second patentfamily (patent application GB0907019.4), together with all rights in any inventions and materialsgenerated by Nazim Kanji in the provision of services for or on behalf of Co-Formulate in relation tothe consultancy service agreement entered into by ONL and Co-Formulate.
This agreement contains the usual warranty and further assurance provisions that you would expectto see in an assignment of this nature.
ONL is required, pursuant to this agreement, to execute and file all necessary documents at theIntellectual Property Office to name Huw Jones and Nazim Kanji as co-inventors, together withMarcelo Bravo, of the patent to which patent application GB0907019.4 relates.
13.11 Deed of Assignment dated 29 January 2010 between ONL and Pharmasci Limited This agreement provides for the assignment by Pharmasci Limited to ONL of all and any right, titleand interest that Pharmasci Limited had in respect of the technology which is the subject of the secondpatent family (patent application GB0907019.4), together with all rights in any inventions andmaterials generated by Pharmasci Limited in the provision of services for or on behalf of Co-Formulate in relation to the consultancy service agreement entered into by ONL and Co-Formulate.
This agreement contains the usual warranty and further assurance provisions that you would expectto see in an assignment of this nature.
ONL is required, pursuant to this agreement, to execute and file all necessary documents at theIntellectual Property Office to name Huw Jones and Nazim Kanji as co-inventors, together withMarcelo Bravo, of the patent to which patent application GB0907019.4 relates.
13.12 Assignment of Ellactiva Trademark 3541323 On 10th March 2008 the Company entered into an assignment pursuant to which the Ellactivatrademark, registered at the European Trademark Office with application number 3541323 andregistered April 2005 in respect of classes 05, 29, 30 and 32, was assigned to the Company togetherwith all rights, title and interest to such trademark in consideration for the sum of £1. In accordancewith the assignment, the Company has full and exclusive benefit of the trademark.
Dependence on Intellectual Property
Save as set out in Parts I and VI of this document, there are no patents, patent applications or otherIntellectual Property Rights, licences, industrial, financial, commercial or financial contracts whichare of material importance to the Group's business or profitability.
15 Related
Save for the relevant transactions described in the agreements referred to in paragraph 13 of thisPart VI, during the period from incorporation of the Company until the date of this document, theCompany has not entered into any related party transactions. The Company is not involved nor has it been involved in any governmental, legal or arbitrationproceedings in the previous twelve months which may have or had had in the recent past a significanteffect on the Company's financial position or profitability and so far as the Directors are aware, thereare no such proceedings pending or threatened against any member of the Company.
No Significant Change
Save as disclosed in this document, there has been no significant or material change in the financialor trading position of the Company since the date of incorporation of the Company.
Save as disclosed in this document, there has been no significant or material change in the financialor trading position of the ONL since the date of the unaudited interim historical financial information,being 31 August 2009.
18 Taxation
The following paragraphs are intended as a general guide only for shareholders who are resident andordinarily resident in the United Kingdom for tax purposes, holding Ordinary Shares as investmentsand not as securities to be realised in the course of a trade, and are based on current legislation andHM Revenue & Customs practice. Any prospective purchaser of Ordinary Shares who is in any doubtabout his tax position, or who is subject to taxation in a jurisdiction other than the UK, should consulthis own professional adviser immediately.
Taxation of Chargeable Gains
For the purpose of UK tax on chargeable gains, the issue of Ordinary Shares pursuant to the Placingwill be regarded as an acquisition of a new holding in the share capital of the Company.
To the extent that a Shareholder acquires Ordinary shares allotted to him, the Ordinary Shares soallotted will, for the purposes of tax on chargeable gains, be treated as acquired on the date ofallotment. The amount paid for the Ordinary Shares will constitute the base cost of a Shareholder'sholding.
If a Shareholder disposes of all or some of his Ordinary Shares, a liability to tax on chargeable gainsmay, depending on his circumstances, arise.
A disposal of Shares by an individual who is within the charge to UK capital gains tax will, subjectto the availability of any exemptions, reliefs and/or allowable losses, be subject to tax at the rate of 18per cent. with no taper relief or indexation allowance being available.
Individuals who are temporarily non-UK resident may, in certain circumstances, be subject to tax inrespect of gains realised whilst they are not resident in the UK.
Any gains arising on the disposal of Ordinary Shares by a company should be reduced by indexationallowance applied to the base cost of the Ordinary Shares. Any such gains will, subject to theavailability of any exemptions, reliefs and/or allowable losses, be subject to corporation tax.
If an investor is an individual or an investment company, relief for losses incurred by that investor ondisposal of the Ordinary Shares may be available under Sections 131 to 133 Income Tax Act 2007 forindividuals and Sections 573 to 576 of the Income and Corporation Taxes Act 1988 for investmentcompanies.
Inheritance Tax / Business Property Relief
Unquoted ordinary shares representing minority interests in trading companies potentially qualify forbusiness property relief which gives up to 100 per cent. exemption from Inheritance Tax for investorswho are individuals. Where such individual investors make a lifetime gift of qualifying shares or dieswhilst still owner of the shares, no inheritance tax will be payable in respect of the value of the shares,provided certain conditions are met, including that the investor held the shares for two years beforethe date of transfer or death.
Stamp duty and Stamp Duty Reserve Tax
18.9 No stamp duty or stamp duty reserve tax ("SDRT") will generally be payable on the issue of the Ordinary Shares.
Dividends and other distributions
18.10 Under current UK tax legislation, no amounts in respect of tax will be withheld at source from dividend payments made by the Company. A dividend paid to a non-corporate Shareholder is treatedas being paid with a tax credit equal to one ninth of the net dividend. Thus there will be a tax creditof 10 per cent. on the gross dividend, that gross dividend being equal to the sum of the net dividendand the accompanying tax credit. Individual Shareholders whose income is within the starting or basicrate bands will be liable to tax at 10 per cent. on their gross dividend income and the tax credit willtherefore satisfy their income tax liability on UK dividends. Individual Shareholders who are liable toincome tax at the higher rate of tax will be charged to tax at 32.5 per cent. on their gross dividend, aswill trustees of discretionary trusts. After taking account of the 10 per cent. tax credit, this willrepresent additional tax of 25 per cent. of the net dividend received.
18.11 Individual shareholders whose income tax liability is less than the tax credit will not be entitled to claim a repayment of all or part of the tax credit associated with such dividends.
18.12 The UK government has announced that legislation will be introduced, with effect from April 2010, to make dividends received by UK resident shareholders with taxable income in excess of £150,000subject to income tax at 42.5 per cent. The tax credit referred to above will, if available, have the effectthat such shareholders will have to account for additional UK tax equal to 36.11 per cent. of the netcash dividend received.
18.13 A UK resident corporate shareholder should not be liable to corporation tax or income tax in respect of dividends received from the Company unless that company is carrying on a trade of dealing inshares.
18.14 If you are in any doubt as to your tax position, or are subject to tax in a jurisdiction other than the UK, you should consult your professional adviser.
19 General
Since the date of incorporation of the Company, it has not yet commenced operations, incurred neitherprofit nor loss and (save for its acquisition of and current 100 per cent. interest in the shareholding ofONL) has no material assets or liabilities and no financial statements have been made up. Accordinglythere is no historical financial information relating to the Company contained in this document.
The financial information for the relevant accounting period as set out in Section B of Part IV of thisdocument concerning ONL does not constitute statutory accounts of ONL.
Save as disclosed in this document, no person (other than professional advisers named in thisdocument) has: received, directly or indirectly, from the Company within the 12 months preceding theapplication for Admission: or entered into any contractual arrangements (not otherwise disclosed in this document) toreceive, directly or indirectly, from the Company on or after Admission any of the following: fees totalling £10,000 or more; securities in the Company where these have a value of £10,000 or more calculated byreference to the Placing Price; or any other benefit with the value of £10,000 or more at the date of Admission.
The estimated amount of the expenses of the Placing and Admission which are all payable by theCompany are £210,000 (excluding VAT). The net proceeds of the Placing are estimated at £890,000for the Company. The Placing Price represents a premium of 1.65p to the nominal value of eachOrdinary Share.
ZAICF has been appointed as nominated adviser to the Company. ZAICF is registered in England andWales with number 06814163 and its registered office is at 12 Camomile Street, London, EC3A 7PTand it is authorised and regulated by the Financial Services Authority in the conduct of investmentbusiness.
ZAI has been appointed as broker to the Company. ZAI is registered in England and Wales withnumber 0513601 and its registered office is at 12 Camomile Street, London, EC3A 7PT and isauthorised and regulated by the Financial Services Authority and is a member of the London StockExchange.
ZAICF and ZAI have each given and have not withdrawn their consent to the issue of this documentwith the inclusion of their names in the form and context in which they appear.
Baker Tilly Corporate Finance LLP has given and not withdrawn its written consent to the inclusionof its report in Section A of Part IV of this document and references thereto in the form and contextin which they are included.
Save as set out in this document, the Directors are not aware of any exceptional factors which haveinfluenced the activities of the Company.
19.10 Save as disclosed in this document, the Company has not made any investments since incorporation up to the date of this document nor are there any investments by the Company in progress oranticipated which are significant.
19.11 Save as disclosed in this document, the Directors are not aware of any environmental issues or risks affecting the Company or its operations.
Availability of this Document
Copies of this document will be available free of charge from the Company's registered office and atthe offices of ZAICF, 12 Camomile Street London EC3A 7PT during normal business hours on anyweekday (Saturdays and public holidays excepted) and shall remain available for at least one monthafter Admission.
Date: 8 February 2010 sterling 127368

Source: http://nutrascience.co.uk/archive/docs/ad_doc.pdf

aet-d.de

43. AET-d Jahrestagung - 16. und 17. Juni 2016 - in Neustadt a.d. Aisch Vetoquinol GmbH Besamungsverein Neustadt a.d.Aisch e.V. Karl-Eibl-Straße 17 - 27 88212 Ravensburg 91413 Neustadt an der Aisch Silbersponsor IMV Technologies Rue Clemenceau, Postfach 61302 L'Aigle-Cedex, France Bodinco B.V. MOFA Global

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Advantage by Buckeye Community Health Plan (HMO SNP) 2011 Comprehensive Formulary (List of Covered Drugs) Approved July 2011 Effective August 2011 PLEASE READ: THIS DOCUMENT CONTAINS INFORMATION ABOUT THE DRUGS WE COVER IN THIS PLAN Note to existing members: This formulary has changed since last year. Please review this document to make sure that it still contains the drugs you take. Beneficiaries must use network pharmacies to access their prescription drug benefit. Benefits, formulary, pharmacy network, premium and/or copayments/ coinsurance may change on January 1, 2012. Advantage by Buckeye Community Health Plan is a Medicare Advantage Special Needs Plan for Dual Eligible Members with a Medicare Contract. This document is available in alternative formats and languages. To request information in alternative formats or languages please call our Member Services Department at 866-389-7690 (TTY 800-750-0750) 8:00AM to 8:00PM, 7 days a week.