BNN TECHNOLOGY PLC (Incorporated in England and Wales under the Companies Act 2006 with registered number )

Transcription

1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document and/or as to what action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised pursuant to the Financial Services and Markets Act 2000 (as amended) if you are in the United Kingdom or, if not, from another appropriately authorised independent adviser. If you have sold or otherwise transferred all of your Ordinary Shares, please forward this document, together with the accompanying Form of Proxy, at once to the purchaser or transferee or to the stockbroker, banker or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. Such documents should not, however, be forwarded or transmitted in or into any jurisdiction in which such act would constitute a violation of the relevant laws in such jurisdiction. If you have sold or transferred only part of your holding of Ordinary Shares, you should retain these documents. BNN TECHNOLOGY PLC (Incorporated in England and Wales under the Companies Act 2006 with registered number ) Firm Placing of 15,625,000 new Ordinary Shares and Proposed Placing of a further 15,625,000 new Ordinary Shares at 80 pence per share and Notice of General Meeting This document does not constitute a prospectus for the purposes of the prospectus rules of the Financial Conduct Authority nor does it comprise an admission document prepared in accordance with the AIM Rules. Accordingly, this document has not been approved by or filed with the Financial Conduct Authority or the London Stock Exchange. This document does not constitute or form part of any offer or invitation to sell or issue or a solicitation of any offer to acquire, purchase or subscribe for Placing Shares in any jurisdiction. This document must not be distributed to a US Person (as such term is defined in Rule 902 of Regulation S under the US Securities Act of 1933, as amended (the Securities Act )) or within or into the United States, Canada, Japan, South Africa, the Republic of Ireland or Australia. The Ordinary Shares have not been and will not be registered under the Securities Act, and may not be offered or sold or subscribed, directly or indirectly, within the United States, Canada, Japan, South Africa, the Republic of Ireland or Australia or to or by any US Person (as such term is defined in Regulation S promulgated under the Securities Act) or any national, resident or citizen of Canada, Japan, South Africa, the Republic of Ireland or Australia or any corporation, partnership or other entity created or organised under the laws thereof. The Ordinary Shares have not been and will not be registered under the Securities Act and may not be offered or sold to US Persons or otherwise in the United States except to persons reasonably believed after reasonable inquiry to be qualified institutional buyers, or QIBs, as defined in Rule 144A under the Securities Act, in reliance on Rule 144A under the Securities Act or in offshore transactions in reliance on Regulation S. Any failure to comply with this restriction may constitute a violation of the United States or other national securities laws. None of the information contained herein has been filed or will be filed with the US Securities and Exchange Commission, any regulator under any state securities laws or any other governmental or self-regulatory authority. No governmental authority has passed or will pass on the merits of this Placing or the adequacy of this document. Any representation to the contrary is unlawful. Application will be made to the London Stock Exchange for the Second Placing Shares to be admitted to trading on AIM. No application has been made or is currently intended to be made for the Placing Shares to be admitted to trading or dealt in on any other exchange. Admission became effective in respect of, and dealings on AIM commenced in, the First Placing Shares on 21 April 2017 and it is expected, subject, inter alia, to the passing of the Resolutions at the General Meeting, that Admission will become effective in respect of, and that dealings on AIM will commence in, the Second Placing Shares, on or around 23 May Notice of the General Meeting of BNN Technology PLC to be held at 3.00 p.m. on 22 May 2017 at the offices of Fieldfisher LLP, Riverbank House, 2 Swan Lane, London EC4R 3TT, is set out at the

2 end of this document. The Form of Proxy accompanying this document for use in connection with the General Meeting should be completed and returned in accordance with the instructions thereon so as to be received by the Company s registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY by no later than 3.00 p.m. on 18 May The recommendation of the Directors on the Resolutions to be proposed at the General Meeting is set out on page 18 of this document. Completion and return of a Form of Proxy will not preclude Shareholders from attending and voting in person at the General Meeting should they so wish. This document should be read in its entirety in conjunction with the accompanying Form of Proxy and the definitions set out herein. In particular your attention is drawn to the Letter from the Chief Executive Officer, which is set out on pages 11 to 18 of this document, and which recommends that you vote in favour of the Resolutions. Strand Hanson Limited ( Strand Hanson ), which is a member of the London Stock Exchange and is authorised and regulated by the Financial Conduct Authority, is acting as Financial and Nominated Adviser to the Company in connection with the Placing and is not acting for any other person and will not be responsible to any person other than the Company for providing the protections afforded to clients of Strand Hanson. Strand Hanson is not making any representation or warranty, express or implied, as to the contents of this document. Strand Hanson has not approved the contents of, or any part of, this document and no liability whatsoever is accepted by Strand Hanson for the accuracy of any information or opinions contained in this document or for the omission of any information from this document. Mirabaud Securities LLP ( Mirabaud ), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company and no-one else in connection with the Placing. Mirabaud will not regard any other person (whether or not a recipient of this document) as its client or be responsible to any other person for providing the protections to clients of Mirabaud nor for providing advice in relation to the transactions and arrangements described in this document. Mirabaud is not making any representation or warranty, express or implied, as to the contents of this document. Mirabaud has not approved the contents of, or any part of, this document and no liability whatsoever is accepted by Mirabaud for the accuracy of any information or opinions contained in this document or for the omission of any information from this document. The past performance of the Company and its securities is not, and should not be relied on as, a guide to the future performance of the Company and its securities. Neither the content of websites referred to in this document, nor any hyperlinks on such websites is incorporated in, or forms part of, this document. This document is published on 5 May Copies of this document will be available free of charge during normal business hours on weekdays (excluding Saturday, Sunday and public holidays) from the date hereof until 22 May 2017 from the Company s registered office. Copies will also be available to download from the Company s website at 2

3 TABLE OF CONTENTS Page DEFINITIONS 4 EXPECTED TIMETABLE OF PRINCIPAL EVENTS 6 PLACING STATISTICS 7 FORWARD LOOKING STATEMENTS 8 LETTER FROM THE CHIEF EXECUTIVE OFFICER 9 NOTICE OF GENERAL MEETING 15 3

4 DEFINITIONS The following definitions apply throughout this document and the Form of Proxy, unless otherwise stated or the context requires otherwise: Act the Companies Act 2006 (as amended); Admission admission of the First Placing Shares, which became effective at 8.00 a.m. on 21 April 2017 or, as the context requires, the Second Placing Shares to trading on AIM and such admission becoming effective in accordance with Rule 6 of the AIM Rules for Companies; AIM the AIM market operated by the London Stock Exchange; AIM Rules for Companies the London Stock Exchange s rules and guidance notes contained in its AIM Rules for Companies publication relating to companies whose securities are traded on AIM, as amended from time to time; Announcement the announcement made by the Company on 13 April 2017 (including the appendices to the announcement); Articles the articles of association of the Company in force on the date hereof; Circular this Shareholder circular; Company or BNN BNN Technology plc, registered in England and Wales with company number ; CREST the computerised settlement system (as defined in the CREST Regulations) operated by Euroclear which facilitates the transfer of title to shares in uncertificated form; CREST Regulations the Uncertificated Securities Regulations 2001 (SI 2001/3755) including any enactment or subordinate legislation which amends or supersedes those regulations and any applicable rules made under those regulations or any such enactment or subordinate legislation for the time being in force; Directors or Board all of the directors of BNN, whose names are set out on page 11 of this document; Enlarged Issued Ordinary Share Capital Existing Issued Ordinary Share Capital Euroclear FCA Firm Placing First Placing Shares Form of Proxy FSMA General Meeting or GM the Existing Issued Ordinary Share Capital as enlarged by the allotment and issue of the Placing Shares; the 222,987,523 Ordinary Shares in issue on the Latest Practicable Date; Euroclear UK & Ireland Limited, a company incorporated in England & Wales with registered number , being the operator of CREST; the Financial Conduct Authority in its capacity as the competent authority for the purposes of Part VI of FSMA; the placing of the First Placing Shares at the Placing Price pursuant to the Placing Agreement; the 15,625,000 new Ordinary Shares issued by the Company as part of the Placing pursuant to existing allotment authority, at the Placing Price; the form of proxy accompanying this document for use by Shareholders in connection with the General Meeting; the Financial Services and Markets Act 2000 (as amended); the general meeting of the Company to be held at the offices of Fieldfisher LLP, Riverbank House, 2 Swan Lane, London EC4R 3TT on 22 May 2017 at 3.00 p.m., formal notice of which is set out at the end of this document; 4

5 Group Latest Practicable Date London Stock Exchange Long Term Incentive Plan Mirabaud Ordinary Shares Placing Placing Agreement Placing Price Placing Shares Proposed Placing Regulation S Resolutions Second Tranche of the Placing Second Placing Shares Securities Act Shareholders Strand Hanson subsidiary or subsidiary undertaking UK or United Kingdom uncertificated or in uncertificated form US the Company together with its subsidiaries from time to time; close of business (5.00 p.m. London time) on 4 May 2017, being the latest practicable date prior to the publication of this document; London Stock Exchange plc; the long term incentive plan as adopted by the Company on 10 December 2016; Mirabaud Securities LLP of 10 Bressenden Place, London SW1E 5DH, the Company s broker for the Placing; the ordinary shares of par value 0.10 each in the share capital of the Company; the Firm Placing and the Proposed Placing; the conditional agreement dated 13 April 2017 between (1) the Company, (2) Mirabaud and (3) Strand Hanson relating to the Placing; 80 pence per Placing Share; the First Placing Shares and the Second Placing Shares issued or to be issued by the Company and subscribed for pursuant to the Placing; the conditional placing of the Second Placing Shares at the Placing Price pursuant to the Placing Agreement; Regulation S as promulgated under the Securities Act; the resolutions contained in the notice of General Meeting, which is set out at the end of this document; that part of the Placing which relates to the Second Placing Shares and which is conditional on, inter alia, the passing of the Resolutions; the 15,625,000 new Ordinary Shares to be issued by the Company at the Placing Price, conditional on, inter alia, the passing of the Resolutions; the United States Securities Act of 1933, as amended; holders of Ordinary Shares, from time to time; Strand Hanson Limited, the nominated and financial adviser to the Company; have the meanings given to them in the Companies Act 2006 of the UK, as amended from time to time; the United Kingdom of Great Britain and Northern Ireland; recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST; the United States of America, its territories and possessions, any state of the United States of America and the district of Columbia and all other areas subject to its jurisdiction; US Persons bears the meaning ascribed to such term by Regulation S promulgated under the Securities Act; and pounds sterling, the lawful currency of the UK from time to time. 5

6 EXPECTED TIMETABLE OF PRINCIPAL EVENTS Admission and commencement of dealings in the First Placing Shares on AIM 8.00 a.m. on 21 April 2017 Date of publication of this document 5 May 2017 Latest time and date for receipt of Forms of Proxy 3.00 p.m. on 18 May 2017 General Meeting 3.00 p.m. on 22 May 2017 Admission and commencement of dealings in the Second Placing Shares on AIM Expected date for CREST accounts to be credited (where appropriate) with the Second Placing Shares 8.00 a.m. on 23 May 2017 on 23 May 2017 Notes: 1. Each of the times and dates above are indicative only and are subject to change. If any of the above times and/or dates change, the revised times and/or dates will be notified by the Company to Shareholders by announcement through a regulatory information service. 2. All of the above times refer to London time unless otherwise stated. 3. The admission and commencement of dealings in the Second Placing Shares on AIM are conditional on, inter alia, the passing of the Resolutions at the General Meeting. 6

7 PLACING STATISTICS Placing Price Number of existing Ordinary Shares prior to Admission of the First Placing Shares 80 p 207,362,523 Number of First Placing Shares placed on behalf of the Company 15,625,000 Gross proceeds received by the Company from the First Placing Shares Number of Second Placing Shares being placed on behalf of the Company Gross proceeds receivable by the Company from the Second Placing Shares Total gross proceeds of the Placing Total net proceeds of the Placing Number of Ordinary Shares in issue following Admission of the First Placing Shares Number of Ordinary Shares in issue following Admission of the Second Placing Shares First Placing Shares as a percentage of the enlarged issued ordinary share capital following Admission of the First Placing Shares Second Placing Shares as a percentage of the enlarged issued ordinary share capital following Admission of the Second Placing Shares million 15,625, million 25.0 million 23.3 million 222,987, ,612, % 6.5% 1 For the purposes of this calculation it is assumed that no Ordinary Shares will be issued between the Latest Practicable Date and the allotment and issue of the Second Placing Shares. 7

8 FORWARD LOOKING STATEMENTS This document contains forward-looking statements. These statements relate to the Group s future prospects, developments and business strategies. Forward-looking statements are identified by their use of terms and phrases such as potential, estimate, expect, may, will or the negative of those, variations or comparable expressions, including references to assumptions. The forwardlooking statements in this document are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. These forward-looking statements speak only as at the date of this document. No statement in this document is intended to constitute a profit forecast or profit estimate for any period. Neither the Directors nor the Group undertake any obligation to update forward-looking statements other than as required by the AIM Rules for Companies or by the rules of any other securities regulatory authority, whether as a result of new information, future events or otherwise. 8

9 LETTER FROM THE CHIEF EXECUTIVE OFFICER BNN TECHNOLOGY PLC (Incorporated in England and Wales under the Companies Act 2006 with registered number ) Directors: Harry Keiley (Non-Executive Chairman) Darren Mercer (Chief Executive Officer) Scott Kennedy (Finance Director) Wei Qi (China CEO and Chief Operating Officer) Dong Jinhua (Non-Executive Director) Lord Benjamin Mancroft (Non-Executive Director) Registered office: First Floor Mallory House Goostrey Way Knutsford Cheshire WA16 7GY 5 May 2017 Dear Shareholder, Firm Placing of 15,625,000 new Ordinary Shares and Proposed Placing of a further 15,625,000 new Ordinary Shares at 80 pence per share and Notice of General Meeting 1. Introduction The Company announced on 13 April 2017 that it had conditionally raised 25 million (before expenses) through the placing of 31,250,000 new Ordinary Shares at a placing price of 80 pence per Ordinary Share (the Placing Price ) with certain existing and new institutional investors via an accelerated book-build (the Placing ). The Placing, which has been arranged by Mirabaud pursuant to the terms of the Placing Agreement, is conditional in part, inter alia, upon Admission. The Placing is being undertaken in two stages, with an initial 15,625,000 new Ordinary Shares (the First Placing Shares ) having been firmly placed using the Directors existing authority to allot shares for cash on a non pre-emptive basis, raising gross proceeds of 12.5 million (the Firm Placing ). The Company does not have sufficient existing authority to allot shares for cash on a non preemptive basis for all of the Placing Shares. Accordingly, your Board is today convening a General Meeting (the General Meeting ) to seek Shareholders approval to update the relevant Board authorities to allot shares in the Company. These renewed authorities will enable the Directors to, inter alia, complete the second stage of the Placing involving the allotment of a further 15,625,000 new Ordinary Shares (the Second Placing Shares ) for cash on a non pre-emptive basis to raise additional gross proceeds of 12.5 million (the Proposed Placing ). Accordingly, completion of the Proposed Placing is subject to Shareholders approval as well as Admission. The net proceeds of the Placing will be used in conjunction with existing resources to invest in the Student Services Platform and Credit Rating Services Platform, further details on which are set out below, and for general working capital purposes. The Company is convening the requisite General Meeting for 3.00 p.m. on 22 May 2017 at the offices of Fieldfisher LLP, Riverbank House, 2 Swan Lane, London EC4R 3TT. This document explains the background to and reasons for the Placing and why the Directors consider the Placing to be in the best interests of the Company and its Shareholders as a whole and recommend that you vote in favour of the Resolutions to be proposed at the General Meeting, notice of which is set out at the end of this document. 2. Background to the Student Services Platform and Credit Rating Services Platform One of the key initiatives in China s 13th Five-Year plan ( ) is to promote education. Amongst other educational initiatives, the plan encourages the cultivation of students entrepreneurship and innovation capabilities and practical skills, as well as emphasising the need 9

10 for recruitment reforms relating to students. As such, a key government initiative over the next four years is to ensure that the 35 million students who are in higher education are either successful in getting an appropriate job upon graduation or successful in launching a new business. In support of this critical initiative, the Company announced on 13 April 2017 its intention, subject to the successful completion of the Placing, to build a leading student services platform in China. Further education students are an important segment for BNN to address, offering both significant potential to acquire valuable data and access to a market which the Group expects to be more attractive to advertisers than many other demographic groups. We anticipate building relationships with a number of partners in connection with the student platform, including leveraging relationships with existing partners. It is intended that this student services platform will comprise three key elements: a. Recruitment More than seven million students graduate from Chinese higher education establishments each year. As these students seek to enter the job market, the existing recruitment process for both candidates and employers in China is fragmented and complex. Most notably, it lacks the capability for employers to verify the qualifications and backgrounds of student applicants, while candidates have limited means of establishing the validity of opportunities offered by employers. This element of the platform is aimed at connecting verified students with potential employers which have also been validated, acting as an agent to help maximise success for both parties in the recruitment process. The Directors believe that BNN s digital platform will streamline and modernise the process with online chat and video, which are particularly valuable when conducting interviews across large geographical distances. BNN will seek to partner with organisations which can support it in developing verification services, which will provide a distinctive advantage for the platform in the marketplace. The Group intends to develop a fee based revenue model for this element, based on commissions for the successful recruitment of students for employers. b. Online financial services China s large online financial services market will be the second focus for the student platform, again with an emphasis on information verification. Outstanding balances on online credit platforms in China totalled RMB 816 billion in December Harnessing technology and big data, high quality platforms connect customers to fixed income investors faster and cheaper than any bank. The sector is highly fragmented, with more than 2,000 platforms in operation, and the China Banking Regulatory Commission is accelerating the process of building support systems to ensure risk prevention, early warnings, control and proper registration. Research by Analysys China claims that 67% of students prefer to pay for purchases in instalments and estimates the university student credit market to be worth approximately RMB 103 billion ( 12 billion) as of August Focusing on enabling flexible, instalment-based purchases exclusively to college students with no credit history or credit cards, BNN intends to develop a proprietary, merit based credit score system which will be used to support online sales of instalment plans by or on behalf of established financial institutions. A fixed service fee will be charged to customers for each credit score. The system is aimed at purchases such as mobile phones, tablets, laptops and cameras using monthly instalment plans. In addition, BNN will work with a number of parties to offer significant discounts in product areas attractive to customers, as well as with financial institutions to support the platform in offering instalment plans. c. Business Incubator The platform s third element will focus on supporting innovation and enterprise. BNN has identified what it believes is a material opportunity to work with financial institutions and key local government departments to provide financial backing for business plans developed by Chinese college students, with the aim of identifying innovative new technologies and business processes, which will form the basis of exciting growth companies. Our digital platform will offer college students the following services: * Business plan advice and support * Angel and Crowd funding * Specialist university expertise and advice 10

11 * Online coaching and advice from angels, professors and in-field experts. Rollout of the student services platform Subject to the successful completion of the Placing, the Recruitment element of the student service platform is expected to be launched in Q4 2017, with the Financial Services and Business Incubator elements launched by Q The Board expects these initiatives to contribute to Group revenues in 2018 and beyond. BNN intends to invest cash resources into recruiting executives and management to execute its plans for the student services platform. Cash resources will also be made available to provide working capital for the platform and, subject to cash flow generated within the Group, for investing in the capital pool for the Business Incubator element. Credit Rating Services Platform BNN also intends, subject to the successful completion of the Placing, to build a credit rating services platform with a view to launching before the end of 2017 with local partners. The Board views the establishment of a credit rating services platform as an exciting opportunity for the Company to participate in a market that has been described as probably the largest untapped consumer finance market globally, by the founder and chief executive of China Rapid Finance, Zane Wang, previously head of analytics at the credit arm of Sears, the American retailer. In western markets, the large established credit rating companies, such as Equifax, and Experian, compile borrowing and repayment records to create credit ratings or scores. In more developed markets, lending institutions, including banks, rely heavily on those scores when making lending decisions for both companies and individuals. China lacks a direct equivalent of this as there are only limited established credit rating companies operating in the country. Research by Analysys China notes that whilst the Chinese central bank holds basic data on 880 million people, in June 2016, it had credit records for only 380 million, or around one-third of Chinese adults. By comparison, 89 per cent of the US population has a credit score. The Directors believe that BNN s platform will also be well placed to address a significant, regulation-driven opportunity working with local partners serving government departments. China s central government is pursuing a plan to establish by 2020 a social credit score programme administered by provincial authorities to establish the status of individuals administrative affairs, commercial activities, social behaviour and experiences of the judicial system, as well as corporate credit checking platforms. No internet technology company has yet established a dominant position in this market, in which the robust and secure features of BNN s platform, combined with an experienced team in the sector recently recruited by BNN, position the group well to benefit from the very significant size of the Chinese marketplace. In addition to the initial build-out phase where we will invest heavily in people and technology over the next few months, we will be reaching out to, and working with, a number of companies to provide them access to our technology platform and expertise and begin to develop the commercial elements of the business. 3. Use of proceeds As detailed above, the net proceeds of the Placing will be used in conjunction with existing resources to invest in the Student Services Platform and Credit Rating Services Platform, and for general working capital purposes. 4. Details of the Placing The Company has placed the First Placing Shares using the Directors existing authority to allot shares for cash on a non pre-emptive basis. The placing of the First Placing Shares to raise, in aggregate, 12.5 million gross was conditional only on Admission, which occurred at 8.00 a.m. on 21 April Following their Admission, the First Placing Shares represent approximately 7.0 per cent. of the Company s enlarged issued ordinary share capital and they will be eligible to vote on the Resolutions. In addition, the Company has conditionally placed the Second Placing Shares. As the Company does not have sufficient existing authority to allot shares for cash on a non pre-emptive basis to permit the allotment of the Second Placing Shares following Admission of the First Placing Shares, the Proposed Placing of the Second Placing Shares to raise, in aggregate, a further 12.5 million 11

12 gross is conditional upon, inter alia, the passing of the Resolutions at the General Meeting and Admission occurring on or before 23 May 2017 (or such later date as Mirabaud and Strand Hanson may agree, not being later than 29 May 2017). Following their Admission, it is expected that the Second Placing Shares will represent approximately 6.5 per cent. of the Company s then enlarged issued ordinary share capital. The Placing Shares will be fully paid and will rank pari passu in all respects with the existing Ordinary Shares. The Placing Shares have been conditionally placed by Mirabaud, as agent of the Company, with certain existing and new institutional investors pursuant to the Placing Agreement. Under the terms of the Placing Agreement, which was signed by the Company, Strand Hanson and Mirabaud, Mirabaud will receive commission from the Company conditional on Admission and the Company has given customary warranties, undertakings and indemnities to Mirabaud and Strand Hanson in relation, inter alia, to its business and the performance of its duties. Strand Hanson will also be paid certain fees in relation to the Placing. There is no other investment banker, broker, finder or other intermediary that has been retained by or is authorised to act on behalf of the Company who might be entitled to any fee or commission in connection with the Placing. Mirabaud and Strand Hanson each have the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, in the event that there has been, inter alia, a material breach of any of the warranties given by the Company to Mirabaud and Strand Hanson. The Placing is not being underwritten. Admission of the First Placing Shares to trading on AIM became effective on 21 April Application will be made for the Second Placing Shares to be admitted to trading on AIM and it is currently expected that trading in the Second Placing Shares will commence on 23 May NASDAQ Update As noted in the Company s announcement on 5 April 2017, BNN is working towards completing the listing on NASDAQ in Q3 2017, which the Board fully appreciates is later than originally intended. This delay has been driven by two important factors: Firstly, the Board has been focused on refining the internal structure of the Company to ensure it can comply with the stricter internal control requirements required by NASDAQ, particularly with respect to ensuring that it can meet its quarterly reporting requirements. In December of last year, BNN engaged a big four accountancy firm to help support the Company through the NASDAQ application process and we are grateful for their support and advice. They have worked with many clients in China in helping them prepare for a NASDAQ IPO and we expect them to be supporting us in the run up to the NASDAQ listing and beyond, as we work towards full Sarbanes-Oxley compliance. Secondly, as part of the application process, all material initiatives and contracts must be disclosed in BNN s application documents. As such, we have deliberately delayed the application process to ensure that all current initiatives, including those referred to above, are able to be fully reflected in the application document. We believe this inclusion will benefit shareholder value by allowing the Company to be rated as a technology portal with the potential to build one of the largest databases in China, rather than solely reflecting the business as a payments provider. As a result, it is the Board s hope that BNN will be appropriately positioned alongside a peer group of other technology portals. 6. Current trading and future prospects On 21 April 2017, the Company announced it had posted to Shareholders its Annual Report and Accounts for the year ended 31 December 2016, which describes, inter alia, our strategic vision and key business areas as well as providing a detailed update on current trading and prospects. A copy is available on the Company s website at 7. Board changes On 21 April 2017, the Company also announced the appointment of Harry Keiley as Non-Executive Chairman and that Lord Mancroft would be moving to Non-Executive Director, with effect from 1 May Harry is Chair of the Investment Committee of the California State Teachers Retirement System (CalSTRS), the largest educator-only pension fund in the world and the second largest pension 12

13 fund in the US. The market value of the CalSTRS investment portfolio was approximately $202.1bn as of 28 February CalSTRS has a long-term investment philosophy, aimed at maintaining a strong stable fund in order to deliver the retirement benefits for its members, and good corporate governance is essential to the safety of that portfolio. Harry was first elected to the Board of CalSTRS in 2007 and re-elected in 2011 and 2015, and has served as Chair of the Board and Chair of the Compensation Committee. He is currently also a serving member of the Audit, Risk Management and Board Governance Committees. 8. Share Options As announced by the Company on 13 April 2017, the Company intends to issue share options to retain and incentivise certain Directors and senior management. The Company has issued an aggregate of 1,210,000 options to senior management pursuant to the Long Term Incentive Plan. In addition, the Company proposes to issue further options to certain Directors and will seek shareholder approval for such option grants following consultation with the new Chairman and will provide further details in due course. 9. Disapplication of pre-emption rights and share capital authorities As mentioned above, the Directors do not currently have sufficient authority in place under the Articles to undertake the Proposed Placing of the Second Placing Shares. Therefore, the Directors are seeking a specific disapplication of the pre-emption rights under the Articles up to an aggregate nominal amount of 1,562,500, to allow the Proposed Placing to proceed. In addition, the Directors are seeking further authority to allot up to 23,861,252 new Ordinary Shares (representing approximately 10 per cent. of the enlarged issued share capital of the Company following the Placing), together with an authority to disapply pre-emption rights in respect of such new Ordinary Shares, subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or any legal or practical problems relating to such an allotment. These renewed authorities will enable the Directors to carry out the Company s objectives and will ensure that the Company is in a position to pursue and take advantage of growth opportunities as and when they arise. The Directors have no present intention to exercise their power and use the proposed authorities, but they consider having it in place is necessary to retain flexibility. 10. General Meeting Attached at the end of this document is a formal notice convening a General Meeting to be held at the offices of Fieldfisher LLP on 22 May 2017 at 3.00 p.m. At the General Meeting, the following Resolutions will be proposed: (1) an ordinary resolution to grant authority to the Directors to allot up to 15,625,000 Second Placing Shares in the capital of the Company or to grant rights to subscribe for or convert any security into shares in the capital of the Company pursuant to section 551 of the Act, being up to an aggregate nominal amount of 1,562,500. The Directors will limit this authority to the allotment of Second Placing Shares pursuant to the Proposed Placing; (2) subject to and conditional on the passing of the resolution referred to in paragraph (1) above, a special resolution to disapply the statutory pre-emption rights contained in section 561(1) of the Act in respect of the allotment of up to 15,625,000 Second Placing Shares with an aggregate nominal amount of up to 1,562,500. The Directors will limit this authority to the allotment of Second Placing Shares pursuant to the Proposed Placing; (3) an ordinary resolution to grant a general authority to the Directors to allot up to 80,000,000 Ordinary Shares in the capital of the Company or to grant rights to subscribe for or convert any security into shares in the capital of the Company pursuant to section 551 of the Act, being up to an aggregate nominal amount of 8,000,000. This authority will represent approximately a third of the Enlarged Issued Ordinary Share Capital. The authority replaces all existing authorities under section 551 of the Act (other than the authority referred to in paragraph (1) above) and will expire at the conclusion of the Annual General Meeting of the Company to be held later this year; and (4) subject to and conditional on the passing of the resolution referred to in paragraph (3) above, a special resolution to disapply the statutory pre-emption rights contained in section 561(1) of the Act in respect of the allotment of up to 23,861,252 equity shares with an aggregate 13

14 nominal amount of up to 2,386, This authority will represent approximately 10 per cent. of the Enlarged Issued Ordinary Share Capital. The authority replaces all existing authorities under section 570 of the Act (other than the authority referred to in paragraph (2) above) and will expire at the conclusion of the Annual General Meeting of the Company to be held later this year. You should be aware that the issue of the Second Placing Shares cannot take place if the Resolutions are not passed and you are strongly encouraged to vote in favour of all Resolutions. 11. Action to be taken by Shareholders Shareholders will find enclosed with this document a Form of Proxy for use in connection with the General Meeting. Whether or not you propose to attend the General Meeting in person, you are requested to complete, sign and return the Form of Proxy in accordance with the instructions printed thereon. To be valid, completed Forms of Proxy must be received by the Company s registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY as soon as possible but in any event not later than 3.00 p.m. on 18 May If you complete and return a Form of Proxy, you may still attend and vote at the General Meeting in person should you subsequently decide to do so. Please read the notes to the notice of General Meeting and the accompanying Form of Proxy for detailed instructions. The attention of Shareholders is also drawn to the voting intentions of the Directors set out below. 12. Recommendation The Directors believe that the Placing will promote the success of the Company for the benefit of its members as a whole and, accordingly, unanimously recommend that Shareholders vote in favour of all of the Resolutions to be proposed at the General Meeting, as they intend so to do or procure to be done in respect of their own beneficial and other connected interests, amounting in aggregate to 33,703,681 existing Ordinary Shares which represent approximately 16.3 per cent. of the Company s existing issued share capital. Shareholders are reminded that the Proposed Placing of the Second Placing Shares is conditional, inter alia, on the passing of the Resolutions to be proposed at the General Meeting. Should the Resolutions not be passed, the Proposed Placing of the Second Placing Shares will not proceed and the associated subscription monies in respect of the Second Placing Shares will be returned to investors. Yours faithfully Darren Mercer Chief Executive Officer 14

15 NOTICE OF GENERAL MEETING BNN TECHNOLOGY PLC (Incorporated in England and Wales under the Companies Act 2006 with registered number ) NOTICE IS GIVEN that a general meeting of the above named company (the Company ) will be held at 3.00 p.m. on 22 May 2017 at the offices of Fieldfisher LLP, Riverbank House, 2 Swan Lane, London, EC4R 3TT, for the purpose of considering and, if thought fit, passing the following resolutions, of which resolutions 1 and 3 shall be proposed as ordinary resolutions and resolutions 2 and 4 shall be proposed as special resolutions: 1. THAT, the Directors be and they are hereby generally and unconditionally authorised pursuant to and for the purposes of Section 551 of the Companies Act 2006 (the Act ) to allot shares in the Company or grant rights to subscribe for or to convert any security into shares in the Company ( Rights ) up to an aggregate nominal amount of 1,562,500, provided that this authority shall be limited to the allotment of shares pursuant to the Proposed Placing (as defined in the circular dated 5 May 2017, of which this notice forms part ( Circular )), and that this authority shall be in addition to all existing authorities under Section 551 of the Act and shall expire at the conclusion of the Annual General Meeting of the Company to be held in THAT subject to the passing of resolution 1 above, the Directors be and they are hereby generally empowered pursuant to Section 570 of the Act to allot equity securities (as defined in Section 560 of the Act) pursuant to the authority conferred by resolution 1 above as if Section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities up to an aggregate nominal amount of 1,562,500 pursuant to the Proposed Placing (as defined in the Circular), and that this authority shall be in addition to all existing authorities under Section 570 of the Act and shall expire at the conclusion of the next Annual General Meeting of the Company to be held in THAT, the Directors be and they are hereby authorised generally and unconditionally pursuant to and for the purposes of Section 551 of the Act to allot shares in the Company or grant Rights up to an aggregate nominal amount of 8,000,000 (which represents approximately one third of the enlarged issued share capital following the Proposed Placing), provided that this authority shall be in substitution for all existing authorities under Section 551 of the Act (other than the authority to be granted pursuant to resolution 1 above) and shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2017 and save that the Company may make an offer or agreement before the expiry of this authority which would or might require shares to be allotted or Rights to be granted after such expiry and the Directors may allot shares or grant Rights pursuant thereto as if the authority conferred hereby had not expired. 4. THAT subject to the passing of resolution 3 above, the Directors be and they are hereby generally empowered pursuant to Section 570 of the Act to allot equity securities (as defined in Section 560 of the Act) pursuant to the authority conferred by resolution 3 above as if Section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to: 4.1. allotments made in connection with offers of equity securities to the holders of ordinary shares in proportion (as nearly as may be) to the respective numbers of ordinary shares held by them, but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or legal or practical problems under the laws of any overseas territory or the requirements of any recognised regulatory body or any stock exchange in any territory; and 4.2. the allotment (otherwise than pursuant to sub-paragraph 4.1 above) of further equity securities up to an aggregate nominal amount of 2,386, (which represents approximately 10% of the enlarged issued share capital following the Proposed Placing), and that this authority shall be in substitution for all existing authorities under Section 570 of the Act (other than the authority to be granted pursuant to resolution 2 above) and shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2017 and save that the Company may make an offer or agreement before the expiry of this power 15

16 which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities pursuant thereto as if the power conferred hereby had not expired. Dated 5 May 2017 Registered Office: First Floor Mallory House Goostrey Way Knutsford Cheshire WA16 7GY BY ORDER OF THE BOARD Company Secretary 16

17 Notes: 1. The Resolutions are subject to the approval of the Shareholders (being the holders of Ordinary Shares in the Company). 2. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those members holding ordinary shares in the capital of the Company and registered on the Company s register of members at 6.00 p.m. on 18 May 2017 (London time) (or, if the General Meeting is adjourned, 6.00 p.m. on the day which is two days before the date of the adjourned meeting) shall be entitled to attend and vote at the General Meeting. 3. If you are a member of the Company at the time set out in note 2 above, you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at the meeting and you should have received a form of proxy with this document. You can only appoint a proxy using the procedures set out in these notes and the notes to the proxy form. If you do not have a form of proxy and believe that you should have one, or if you require additional forms, please contact the Company s registrars using the contact details set out at note 13 below. 4. A proxy does not need to be a member of the Company but must attend the meeting to represent you. Details of how to appoint the Chairman of the Meeting or another person as your proxy using the proxy form are set out in the notes to the proxy form. If you wish your proxy to speak on your behalf at the meeting you will need to appoint your own choice of proxy (not the Chairman) and give your instructions directly to them. 5. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy, please contact the Company s registrars using the contact details set out at note 13 below. 6. To direct your proxy on how to vote on the Resolutions, please mark the appropriate box with an X. To abstain from voting, select the relevant Vote Withheld box. A vote withheld is not a vote in law, which means that the vote will not be counted in calculation of votes for or against the relevant Resolution. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. 7. The notes to the proxy form explain how to direct your proxy how to vote on each Resolution or withhold their vote. If you return more than one proxy appointment, either by paper or electronic communication, the proxy appointment received last by the Company s registrars before the latest time for receipt of proxies will take precedence. To appoint a proxy using the proxy form, the form must be: (a) completed and signed; (b) sent or delivered to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY or scanned by to externalproxyqueries@computershare.co.uk; and received no later than 3.00 p.m. on 18 May 2017 or 48 hours before the time fixed for any adjourned meeting at which the proxy is to vote. In the case of a member which is a company, the proxy form must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power or authority) must be included with the proxy form. 8. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company s register of members in respect of the joint holding (the first-named being the most senior). 9. The return of a completed form of proxy, other such instrument or any CREST Proxy Instruction (as described in Note 12 below) will not prevent a shareholder attending the General Meeting and voting in person if he/she wishes to do so. 10. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the General Meeting (and any adjournment of the General Meeting) by using the procedures described in the CREST Manual (available from CREST personal members or other CREST sponsored members, and those CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. 11. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a CREST Proxy Instruction ) must be properly authenticated in accordance with Euroclear UK & Ireland Limited s specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the issuers agent 3RA50 by 3.00 p.m. on 18 May For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST application host) from which the issuers agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. 12. CREST members and, where applicable, their CREST sponsors, or voting service providers should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5) (a) of the Uncertificated Securities Regulations Members who have general queries about the meeting should do so by calling Computershare Investor Services PLC on (or, if calling from outside the UK, on +44 (0) ). Calls from within the UK are charged at the local rate plus network extras, lines are open 8.30 a.m p.m., Monday to Friday. Calls from outside the UK will be charged at the applicable international rate. Different charges may apply to calls made from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. Please note that Computershare Investor Services PLC cannot provide investment advice, nor advise you on how to cast your vote on the Resolutions. 14. If a corporation is a member of the Company, it may by resolution of its directors or other governing body authorise one or more persons to act as its representative or representatives at the meeting and any such representative or representatives shall be entitled to exercise on behalf of the corporation all the powers that the corporation could exercise if it were an individual member of the Company. Corporate representatives should bring with them either an original or certified copy of the appropriate board resolution or an original letter confirming the appointment, provided it is on the corporation s letterhead and is signed by an authorised signatory and accompanied by evidence of the signatory s authority. 15. As at 4 May 2017 (being the latest practicable business day prior to the date of posting of this notice of General Meeting) the Company s issued Ordinary Share capital comprised 222,987,523 Ordinary Shares of 0.10 each and therefore the total voting rights in the Company as at that time were 222,987,