TIDMPPIX

RNS Number : 0695S

ProPhotonix Limited

11 November 2021

11 November 2021

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

RECOMMED CONDITIONAL CASH ACQUISITION

of

ProPhotonix Limited ("ProPhotonix" or the "Company")

by Exaktera, LLC ("Exaktera")

through its wholly owned subsidiary PPL Merger Sub Inc. ("Merger Sub")

to be effected under the terms of a merger agreement by and among ProPhotonix, Exaktera and Merger Sub

Proposed Cancellation from Trading on AIM

Related Party Transaction

ProPhotonix, a designer and manufacturer of LED illumination systems and laser diode modules with operations in Ireland and the United Kingdom, is pleased to announce that it has reached an agreement on the terms of a recommended acquisition ("Acquisition") under which Exaktera will, subject to stockholder approval, acquire all of the outstanding shares of ProPhotonix ("Company Common Stock") for an aggregate consideration of approximately $11,600,000 (which equates to GBP8,700,000 as of the date of the Merger Agreement, as defined below) in cash (or $0.117 per share) pursuant to the terms of an agreement and plan of merger entered into on 10 November 2021 between ProPhotonix, Exaktera, Merger Sub and others (the "Merger Agreement"). All amounts shown in Pounds Sterling (GBP) are based on the closing foreign currency rate as at 10 November 2021.

Exaktera was founded by Union Park Capital ("Union Park") to act as a holding company for a group of companies Union Park is building in the high-precision OEM market.

The ProPhotonix Board of Directors (the "Board") unanimously approved the Merger Agreement and has recommended that the Stockholders vote in favour of adoption of the Merger Agreement. As described in greater detail below, this transaction will require the approval of Stockholders at the Stockholders Meeting of the Company to be held on 15 December 2021 as described below. At the same time, and conditional upon the successful approval of the Merger Agreement, the Company is also seeking Stockholder approval for the proposed cancellation of the Company's common stock from trading on AIM, a market of the London Stock Exchange. Further details of which, including a timetable of principal events, are set out below.

Certain capitalized terms used in this announcement have the meanings specified in the Appendix affixed hereto.

Key terms of the Acquisition

-- Under the terms of the Merger Agreement, Stockholders will be entitled to receive $0.117 (which equates to GBP0.087 as of the date of the Merger Agreement) for each share of Company Common Stock.

   --     The Acquisition Price is fixed and will be paid in US Dollars. 

-- The Acquisition Price values the entire issued and to be issued share capital of the Company at approximately $11.6 million (which equates to GBP8.7 million as of the date of the Merger Agreement) and represents a premium of:

1. approximately 54.6% over the thirty trading day average closing price of the Company's Common Stock on the OTC market of $0.076 ending on 9 November 2021; and

2. approximately 53.8% over the thirty trading day average closing price of the Company's Common Stock on AIM of 0.056 pence ending on 9 November 2021.

-- As at the date of this announcement, ProPhotonix has 93,300,402 shares of Company Common Stock outstanding and admitted to trading on AIM.

-- Tim Losik, the Company's CEO, has agreed to personally indemnify the acquiror for damages up to $ 341,362 resulting from the potential breach of certain representations and warranties by the Company in the merger agreement.

-- Merger Sub is a newly incorporated company formed for the purpose of implementing the Acquisition. Merger Sub has not carried on any business prior to the date of the Merger Agreement and has not prepared any historical financial accounts. The Acquisition is proposed as a merger of Merger Sub with and into the Company, in accordance with the Delaware General Corporation Law, with the Company being the surviving corporation. The Acquisition is not governed by the UK City Code on Takeovers and Mergers ("Takeover Code") by virtue of ProPhotonix's status as a corporation incorporated in Delaware with its registered office located outside the UK. Accordingly, the Acquisition is not subject to the jurisdiction of, nor is it being regulated by, the Panel on Takeovers and Mergers in the UK and Stockholders will not be afforded the protections of the Takeover Code.

-- The Acquisition is subject to the approval of Stockholders at the Stockholders Meeting of the Company to be convened by way of an explanatory circular and notice of meeting ("Proxy Statement") to be published as soon as practicable and, in any event, within 30 days of the date of this Announcement. A copy of this document will also be available, pursuant to the Aim Rules for Companies, on the Company's website (www.prophotonix.com) from that date. Please see "Expected Timetable of Principal Events" below. At the Stockholders Meeting, the Stockholders will be asked to consider and vote on two resolutions (the "Resolutions") as follows:

1. a resolution approving and adopting the Acquisition and the terms of the Merger Agreement (the "Merger Resolution"), which resolution will require approval by Stockholders holding a majority (greater than 50%) of the issued and outstanding shares of Company Common Stock entitled to vote at the Stockholders Meeting; and

2. a resolution approving the cancellation of the admission of the Company's Common Stock from trading on AIM prior to the closing of the Acquisition (the "Delisting Resolution"), which resolution will require approval by Stockholders holding at least 75% of the votes cast at the Stockholders Meeting.

-- In connection with the entry into the Merger Agreement, Tim Losik, holding approximately 15.6 percent of the outstanding Company Common Stock, entered into the Joinder Agreement, which, among other things, obligates him to affirmatively vote all of his shares of Company Common Stock in favour of the Resolutions and against any competing proposal.

-- The Board considers the terms of the Acquisition to be fair to all Stockholders. Accordingly, the Board has unanimously approved the transaction and intends unanimously to recommend that the Stockholders vote in favour of the Resolutions to be proposed at the Stockholders Meeting.

-- The Proxy Statement, which will be posted to stockholders shortly after this Announcement, incorporates a notice convening the Stockholders Meeting at 11:30 a.m. Eastern Time (U.S.) on 15 December 2021 at the offices of Nutter, McClennen & Fish LLP, 155 Seaport Boulevard, Boston, Massachusetts, 02210, United States.

-- The Acquisition is subject to the satisfaction or waiver of the conditions and further terms that are set out in the Merger Agreement and will be further described in the Proxy Statement.

-- Conditional to the Acquisition closing, Tim Losik, the president and chief executive officer of the Company will receive a performance/retention bonus of US$300,000 (which equates to GBP225,000 as of the date of the Merger Agreement) (the "Performance Bonus") in recognition of the many contributions he made to the Company, including exceptional leadership through challenging periods (including but not limited to those resulting from the COVID-19 global pandemic), reducing the debt burden on the Company (thereby eliminating the Company's dependence on lenders and debt), strengthening the Company's balance sheet, voluntarily reducing his compensation to reduce expenses during the COVID-19 pandemic and then being the last employee to reinstate his full salary, frequent international travel on behalf of the Company, improved operational and financial results, leadership in connection with the Company's efforts to identify and consummate a favorable transaction with an acquiror and his willingness to remain an employee of the Company subsequent to the closing of the transaction.

The bonus was approved by the Governance, Nominations and Remuneration committee of the Board at a meeting held on 10 November 2021. Given the nature of this payment, it is deemed to be a related party transaction pursuant to AIM Rule 13 of the AIM Rules for Companies, and further details on this are set out below.

The Board considers the Acquisition to be advisable and in the best interests of the Stockholders. Accordingly , the Board unanimously recommends that Stockholders vote in favour of the Resolutions to be proposed at the Stockholders Meeting.

Proposed Cancellation

If the Merger Agreement is approved then, following the associated Merger, the Common Stock of the Company will cease to exist in its current form and accordingly the Directors have agreed it is necessary to seek the Cancellation. In accordance with Rule 41 of the AIM Rules for Companies (" AIM Rules "), the Company has notified the London Stock Exchange of the proposed Cancellation which is conditional upon the consent of not less than 75 per cent. of votes cast by the Company's stockholders in the meeting detailed above

Subject to the relevant resolutions being passed at the stockholder meeting, it is anticipated that trading in the Common Stock on AIM will cease at close of business on 16 December 2021 with Cancellation taking effect at 7.00 am on 17 December 2021. A full timetable of events is set out below.

Upon Cancellation becoming effective, WH Ireland will cease to be nominated adviser and broker to the Company and the Company will no longer be required to comply with the AIM Rules.

The principal effects of the Cancellation would be that:

-- there would no longer be a formal market mechanism enabling Stockholders to trade their shares on AIM or any other market or trading exchange;

-- the Company would not be bound to announce material events, administrative changes or material transactions nor to announce interim or final results;

-- the Company would no longer be required to comply with any of the additional specific corporate governance requirements for companies admitted to trading on AIM; and

-- the Company would no longer be subject to the AIM Rules and Stockholders will no longer be required to vote on certain matters as provided in the AIM Rules.

Related Party Transaction

The payment of the Performance Bonus is deemed to be a related party transaction pursuant to AIM Rule 13 of the AIM Rules for Companies. The Company's board of directors (excluding Tim Losik, who is the recipient of the Performance Bonus) having consulted with Company's Nominated Adviser, WH Ireland Limited, consider that the terms of the Performance Bonus are fair and reasonable insofar as the Stockholders of the Company are concerned.

For Further Information:

ProPhotonix Limited:

Tim Losik

President and CEO

Tel: +1 603 893 8778

Email: ir@prophotonix.com

WH IRELAND LIMITED (NOMAD and Broker):

Katy Mitchell/Harry Ansell

Nominated Adviser and Broker

Tel: +44 (0) 20 7220 1666

Expected Timetable of Principal Events

 
                Event                            Time and/or Date 
 Execution of Merger Agreement                   10 November 2021 
                                      ------------------------------------- 
 Last time for lodging the Form           11:30 a.m. Eastern Time (U.S.) 
  of Direction                                on 10 December 2021*** 
                                      ------------------------------------- 
 Record Date for determining the                 11 November 2021 
  Stockholders entitled to vote 
  at and receive notice of the 
  Stockholders Meeting 
                                      ------------------------------------- 
 Last time for lodging the Form           11:30 a.m. Eastern Time (U.S.) 
  of Proxy                                    on 13 December 2021*** 
                                      ------------------------------------- 
 Last time for lodging the Form           11:30 a.m. Eastern Time (U.S.) 
  of Declarations                             on 13 December 2021*** 
                                      ------------------------------------- 
 Stockholders Meeting of Company          11:30 a.m. Eastern Time (U.S.) 
                                                on 15 December 2021 
                                      ------------------------------------- 
 Distribution of the Proxy Statement             16 November 2021 
  and Notice of Stockholders Meeting 
                                      ------------------------------------- 
 Last day of dealing in Company                 16 December 2021* 
  Common Stock on AIM 
                                      ------------------------------------- 
 Closing of the Acquisition                     16 December 2021* 
                                      ------------------------------------- 
 Payment of Acquisition Price                   16 December 2021* 
  to Stockholders commences** 
                                      ------------------------------------- 
 Termination of the Depository         7:00 a.m. London Time on 17 December 
  Interest Register                                    2021 
                                      ------------------------------------- 
 Date of Cancellation                  7:00 a.m. London time on 17 December 
                                                       2021* 
                                      ------------------------------------- 
 

*Subject to satisfaction or waiver of other conditions to closing as provided for in the Merger Agreement.

**Further details as to how Stockholders receive the Acquisition Price is set out below.

*** Dates based on current estimates and are subject to change.

Reasons for the Acquisition

In the course of reaching its decision to approve the Merger Agreement, to declare that the Merger Agreement and the Acquisition are fair to, advisable and in the best interests of the Stockholders and to recommend that the Stockholders vote to approve the Merger Agreement, our Board consulted with our senior management. Our Board also received the advice of our financial adviser, Lincoln International, and consulted with outside legal counsel regarding its fiduciary duties, the terms of the Merger Agreement and related legal matters. The following discussion includes the material reasons and factors considered by our Board in making its decision and recommendation, but is not, and is not intended to be, exhaustive.

Factors considered by our Board weighing in favour of the Acquisition included:

Acquisition Price . Our Board considered the following with respect to the Acquisition Price to be received by the Stockholders:

-- that holders of Company Common Stock will be entitled to receive an Acquisition Price that provides liquidity from an otherwise thinly traded stock and as compared to the uncertain future long-term value to Stockholders that might or might not be realized if we remained independent (or if we were sold in a stock deal and the Stockholders received stock of the purchaser or the combined companies as the Acquisition Price);

-- the fact that the per share value of the Acquisition Price represents a significant premium (54.6%) of the Company's Common Stock on the OTC Market over the thirty trading day average closing price of $0.076 ending on 9 November 2021, and (53.8%) of the Company's Common Stock on AIM over the thirty trading day average closing price of 0.056 pence ending on 9 November 2021 (with such calculations done as of the date of the Board's approval of the Merger Agreement) ;

-- an assessment of the Company's business, assets, prospects, competitive position, historical and projected financial performance, short- and long-term capital needs and the nature of the industry in which the Company competes;

-- the fact that the Board carefully evaluated, with the assistance of its legal advisers, its financial adviser Lincoln International LLP, and members of management, the risks and potential benefits associated with other strategic or financial alternatives and the potential for shareholder value creation associated with those alternatives, including wind-up costs associated with the dissolution of the Company, and the Board's belief that, in light of this rigorous evaluation process, Exaktera's offer is the best offer available;

-- the fact that the Board and its advisors vigorously negotiated the terms of the Acquisition with Exaktera and the Board's belief that such negotiations have allowed it to obtain Exaktera's best offer; and

-- the then-current financial market conditions and the recent and historical market prices of our Company Common Stock, including the market price performance of our Company Common Stock relative to that of other industry participants.

Prospects in Remaining Independent . Our Board considered the possibility of continuing to operate the Company as an independent public company, including the perceived risks and uncertainties of remaining an independent public company. In considering the alternative of pursuing growth as an independent company, our Board considered the following factors:

-- the fact that the Company would likely have difficulty raising additional financing (or raising additional financing on reasonable terms) and would thus have limited growth opportunities and limited resources to operate the business and invest in its infrastructure, and that any equity capital raised would likely be at a price below the Acquisition Price, thus likely substantially diluting the current equity; and

-- the fact that the market for the Company's Shares has been highly illiquid and that, accordingly, it would be difficult for holders of the Shares seeking to liquidate their Shares to do so effectively, if at all.

Financial Forecasts . Our Board considered the financial forecasts provided by our management.

Company Conditions. Our Board considered the following factors with respect to the Company's ongoing business:

-- the uncertainty related to the spread of the COVID-19 pandemic and the current and future potential consequences of such pandemic on the financial markets and the Company's current and future business operations, which have included or may include decreases and delays in supplier and vendor interactions and deliveries, disruptions in the operations of third-party manufacturers, suppliers and other third parties on whom the Company relies, the availability or cost of materials, which could damage the Company's supply chain or otherwise limit its ability to obtain sufficient materials to manufacture its products;

   --     the uncertainties related to Brexit and the economy generally; and 

-- although the Company experienced an improvement in its operations and financial condition in 2021, the Board's ultimately determination that the costs and burdens associated with remaining regulatorily compliant as a small publicly traded company were such that considering an acquisition was in the best interests of the Stockholders.

Terms of the Merger Agreement . Our Board considered the terms and conditions of the Merger Agreement and the course of negotiations thereof, including:

-- the conditions to Exaktera's obligations to complete the Acquisition, including the ability of Exaktera to terminate the Merger Agreement under certain specified circumstances;

-- the structure of the transaction as a merger, and the fact that the Merger Agreement requires approval by our Stockholders , which together would provide a period of time during which a Superior Proposal could be made ;

-- our ability, under certain circumstances, to furnish information to and conduct negotiations with third parties, if our Board determines in good faith that any such third party has made an Acquisition Proposal that is, or would reasonably be expected to lead to, a Superior Proposal;

   --     the ability of our Board, in connection with an Acquisition Proposal and under certain other circumstances, to change its recommendation that our Stockholders approve the Merger Agreement, if our Board determines in good faith, after consultation with its outside counsel and financial advisers, that (A) an Acquisition Proposal either constitutes a Superior Proposal or would reasonably be expected to result in a Superior Proposal, or (B) the failure to do so would be reasonably likely to cause the Board to be in breach of its fiduciary duties to our Stockholders; 

-- Stockholders who do not wish to accept the Acquisition Price and do not vote for the Merger Resolution will be entitled to demand appraisal of their shares of Company Common Stock under Delaware law; and

-- that the Acquisition would only proceed if the resolution to adopt the Merger Agreement are adopted by a majority (greater than 50%) of the issued and outstanding shares of Company Common Stock entitled to vote thereon at the Special Meeting.

Risks of Announcement and Closing

Our Board considered:

   --     the risks and contingencies related to the announcement and pendency of the Acquisition; 

-- the conditions to Exaktera's obligation to complete the Acquisition and the right of Exaktera to terminate the Merger Agreement under certain specified circumstances;

-- the risks of a delay in receiving, or a failure to receive, the necessary approvals and clearances necessary to complete the Acquisition;

-- the potential risks of the Acquisition on the Company's relationships with its employees, vendors and partners and others that do business or may do business in the future with the Company, including management and certain other employees who will have expended considerable time and effort to consummate the Acquisition;

-- the fact that the gain realized by the Company's Stockholders as a result of the Merger generally may be taxable to the Stockholders;

   --     advice from Lincoln International, its financial advisor ; and 

-- the risks and costs to the Company if the Acquisition is not completed, including the diversion of management and the potential impact on our stock price.

Cash Transaction

Our Board considered that the Acquisition Price is all cash and, as a result, our Stockholders will forego any potential future increase in our value that might result from our possible growth, and that income realized as a result of the Acquisition will generally be taxable to our Stockholders.

No Financing Condition

Our Board considered that Exaktera's obligation to complete the Acquisition is not subject to a condition that it be able to obtain financing.

Interests of Directors and Officers

Our Board considered the interests that certain of our Directors and executive officers may have with respect to the Acquisition (including the compensation payable to our chief executive officer in connection with the Acquisition) in addition to their interests as Stockholders and option holders.

Company management and employees

Following the Acquisition, substantially all of the officers of the Company, including the CEO, are expected to continue their employment with the Company.

Related Party Transactions

As set out above, at a meeting held on 10 November 2021, the Governance, Nominations and Remuneration Committee of the Board of Directors approved a performance/success bonus of $300,000 payable to Tim Losik upon closing of the acquisition transaction (so long as he is employed by the Company as of the date of payment). There is no additional compensation being paid to Board members in connection with the transaction.

Current Trading

Recent trading has been in line with market expectations and there has been no recent significant change in the financial position of the Company.

Proxy Statement

ProPhotonix plans to send to its Stockholders a Proxy Statement in connection with the Acquisition and the Merger Agreement. The Proxy Statement will contain important information about the proposed merger and related matters. STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT CAREFULLY WHEN IT BECOMES AVAILABLE AND PROMPTLY RESPOND AS PROVIDED IN SUCH DOCUMENT. Such Proxy Statement will be mailed to all record holders of Company Common Stock as of the Record Date, and we expect that additional copies will be made available to nominee holders to share with their underlying beneficial holders. Stockholders will also be able to obtain free copies of the Proxy Statement (when it is available) and other documents notified by ProPhotonix in accordance with the AIM Rules for Companies through the website maintained by ProPhotonix at https://www.prophotonix.com/. In addition, Stockholders will be able to obtain copies of the Proxy Statement and the Merger Agreement from ProPhotonix by contacting the Company's Secretary: Thomas B Rosedale.

Process for Stockholders to Receive Acquisition Consideration

Subject to the Acquisition becoming effective, the settlement of the Acquisition Price will generally be effected by the despatch of cheques or by the crediting of CREST accounts, as applicable, in the following manner:

-- in the case of Depository Interests held in CREST, the cash consideration to which the Depository Interest holder is entitled to be paid by means of CREST by Exaktera procuring the creation of an assured payment obligation in favour of such Depository Interest holder; and

-- in the case of Company Common Stock held outside of CREST, the cash consideration to which a Stockholder is entitled will be made in U.S. Dollars.

All such payments will be made net of any withholding tax required to be deducted by the Paying Agent and will be remitted by the Paying Agent on behalf of Exaktera.

In the case of Company Common Stock held by U.S. Stockholders in certificated or book entry form, Stockholders may be required to provide a letter of instruction with respect to where and through which method Acquisition Consideration should be delivered.

Acquisition Consideration will be distributed to validated Stockholders as of the date of Closing within five business days of Closing. Stockholders requiring validation, Stockholders who are not holding Company Common Stock through a brokerage account and/or those Stockholders holding Company Common Stock without valid addresses of record shall receive the Acquisition Consideration upon submission of appropriate information supplied by the Paying Agent.

It should be noted that all documents and remittances sent through the post will be sent at the risk of the person(s) entitled thereto and none of the Company, Exaktera or any of their respective subsidiaries nor their nominees shall be responsible for any loss or delay in the transmission or delivery of documents and/or remittances sent in accordance with the above provisions.

Payments made by cheque shall be payable to the Stockholder concerned. Cheques will be despatched to the address appearing on the register of members of the Company (or, in the case of joint holders, to the address of the joint holder whose name stands first in the register in respect of such holdings). The encashment of any such cheque as is referred to in this paragraph shall be a complete discharge for the monies represented thereby.

For the avoidance of doubt, stockholders who hold their stock through CREST do not need to take any further action if the Merger completes as their CREST accounts will be credited automatically within five Business Days of Closing.

Disclaimers

WH Ireland Limited, which is authorised and regulated in the UK by the Financial Conduct Authority is acting exclusively for ProPhotonix and no one else in connection with the matters set out in this announcement. In connection with such matters, WH Ireland Limited will not regard any other person as their client, nor will they be responsible to any other person for providing the protections afforded to clients of WH Ireland Limited or for providing advice in relation any matter referred to herein.

This announcement is for information purposes only and is not intended to, and does not constitute, or form part of any offer, invitation, inducement or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of or exercise rights in respect of any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise. Any vote, decision in respect of, or other response to, the Acquisition should be made only on the basis of the information contained in the Proxy Statement. Each Stockholder is urged to consult its independent professional advisers immediately regarding the tax consequences of the Acquisition applicable to them.

In accordance with normal practice in the United Kingdom, Exaktera or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Company Common Stock, other than pursuant to the Acquisition, until the date on which the Acquisition becomes effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the United Kingdom, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com.

Stockholders Outside of the United Kingdom

The implications of the Acquisition for Stockholders Outside of the United Kingdom may be affected by the laws of the relevant jurisdictions. Such Stockholders should inform themselves about and observe any applicable legal requirements. It is the responsibility of each such Stockholder to satisfy himself as to the full observance of the laws of the relevant jurisdiction in connection therewith, including the obtaining of any governmental, exchange control or other consents which may be required, or the compliance with other necessary formalities which are required to be observed and the payment of any issue, transfer or other taxes due in such jurisdiction.

Any person (including without limitation, nominees, trustees and custodians) who would, or otherwise intends to, forward this announcement, the Proxy Statement or any accompanying document to any jurisdiction outside the United Kingdom should refrain from doing so and seek appropriate professional advice before taking any action.

If any such Stockholder remains in any doubt, it should consult an appropriate independent professional adviser in its relevant jurisdiction without delay. In particular, the ability of persons who are not resident in the United Kingdom to vote their Company Common Stocks at the Stockholders Meeting or to execute and deliver a Form of Proxy appointing another to vote their Company Common Stocks in respect of the Stockholders Meeting on their behalf, may be affected by the laws of the relevant jurisdiction in which they are located.

Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. Such Stockholders should consult their own legal and tax advisers with regard to the legal and tax consequences of the Acquisition on their particular circumstances.

Forward Looking Statements

This announcement contains statements that are or may be forward-looking statements. All statements other than statements of historical facts included in this announcement may be forward-looking statements, including statements that relate to Company, Exaktera and/or their respective subsidiaries' future prospects, developments and strategies prior to and after the consummation of the Acquisition.

Forward-looking statements may be identified by their use of terms and phrases such as "believe", "targets", "expects", "aim", "anticipate", "projects", "would", "could", "envisage", "estimate", "intend", "may", "plan", "will" or the negative of those, variations or comparable expressions, including references to assumptions. Forward-looking statements may include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Company's and Exaktera's operations and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on Company's and Exaktera's business. The forward-looking statements in this announcement are based on current expectations and are subject to known and unknown risks and uncertainties that could cause actual results, performance and achievements to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of Company, Exaktera and/or their respective subsidiaries and the environment in which each will operate in the future prior to and after the consummation of the Acquisition and readers are cautioned not to place undue reliance on such forward-looking statements. All subsequent oral or written forward-looking statements attributed to Company, Exaktera and/or their respective subsidiaries or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above.

Each forward-looking statement speaks only as at the date of this announcement. Except as required by applicable law or regulatory requirement (including the AIM Rules), neither Company nor any other party intends to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

No Revenue or Profit Forecasts or Estimates

No statement in this announcement is intended as a revenue or profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings/loss or earnings/loss per share for ProPhotonix or Exaktera, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings/loss or earnings/loss per share for ProPhotonix or Exaktera, as appropriate.

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Exchange Rates

The Acquisition Price is fixed in USD and the risk of fluctuations of equivalent currencies at closing will be borne by Stockholders.

APPIX

DEFINITIONS

The following definitions apply throughout this announcement, unless the context otherwise requires:

 
 
 
 
 "GBP" or "sterling"                      Pounds Sterling, the lawful currency 
                                           of the United Kingdom and reference 
                                           to "pence" and "p" shall be construed 
                                           accordingly; 
 "$" or "USD"                             US dollars, the lawful currency 
                                           of the United States of America 
                                           and reference to "cents" shall 
                                           be construed accordingly; 
 "EUR"                                    Euro, the lawful currency of 
                                           the European union; 
 "Acquisition Price"                      $0.117 in cash per share; 
 "Acquisition Proposal"                   any inquiry, proposal, or offer 
                                           from, or indication of interest 
                                           in making a proposal or offer 
                                           by, any Person or group (other 
                                           than Exaktera and its Subsidiaries, 
                                           including PPL Merger Sub Inc.), 
                                           relating to any transaction or 
                                           series of related transactions 
                                           (other than the transactions 
                                           contemplated by the Merger Agreement), 
                                           involving any: (a) direct or 
                                           indirect acquisition of assets 
                                           of the Company or its Subsidiaries 
                                           (including any voting equity 
                                           interests of Subsidiaries, but 
                                           excluding sales of assets in 
                                           the ordinary course of business) 
                                           equal to 15% or more of the fair 
                                           market value of the Company's 
                                           and its Subsidiaries' consolidated 
                                           assets or to which 15% or more 
                                           of the Company's and its Subsidiaries' 
                                           net revenues or net income on 
                                           a consolidated basis are attributable; 
                                           (b) direct or indirect acquisition 
                                           of 15% or more of the voting 
                                           equity interests of the Company 
                                           or any of its Subsidiaries whose 
                                           business constitutes 15% or more 
                                           of the consolidated net revenues, 
                                           net income, or assets of the 
                                           Company and its Subsidiaries, 
                                           taken as a whole; (c) tender 
                                           offer or exchange offer that 
                                           if consummated would result in 
                                           any Person or group (as defined 
                                           in Section 13(d) of the Exchange 
                                           Act) beneficially owning (within 
                                           the meaning of Section 13(d) 
                                           of the Exchange Act) 15% or more 
                                           of the voting power of the Company; 
                                           (d) merger, consolidation, other 
                                           business combination, or similar 
                                           transaction involving the Company 
                                           or any of its Subsidiaries, pursuant 
                                           to which such Person or group 
                                           (as defined in Section 13(d) 
                                           of the Exchange Act) would own 
                                           15% or more of the consolidated 
                                           net revenues, net income, or 
                                           assets of the Company, and its 
                                           Subsidiaries, taken as a whole; 
                                           (e) liquidation, dissolution 
                                           (or the adoption of a plan of 
                                           liquidation or dissolution), 
                                           or recapitalization or other 
                                           significant corporate reorganization 
                                           of the Company or one or more 
                                           of its Subsidiaries which, individually 
                                           or in the aggregate, generate 
                                           or constitute 15% or more of 
                                           the consolidated net revenues, 
                                           net income, or assets of the 
                                           Company and its Subsidiaries, 
                                           taken as a whole; or (f) any 
                                           combination of the foregoing. 
 " Acquisition " or " Merger "            the recommended acquisition of 
                                           the Company by the Exaktera at 
                                           the Acquisition Price in cash 
                                           through the merger of PPL Merger 
                                           Sub Inc. with and into the Company 
                                           pursuant to the laws of the State 
                                           of Delaware and the terms of 
                                           the Merger Agreement, with the 
                                           Company being the surviving corporation; 
 "Affiliate"                              when used with respect to any 
                                           party, shall mean any Person 
                                           that directly, or indirectly 
                                           through one or more intermediaries, 
                                           Controls or is Controlled by, 
                                           or is under common Control with, 
                                           the Person specified; 
 "AIM Rules"                              the AIM Rules for Companies as 
                                           published by the London Stock 
                                           Exchange from time to time; 
 "AIM"                                    AIM, the market of that name 
                                           operated and regulated by the 
                                           London Stock Exchange; 
 "Alternative Acquisition Agreement"      any letter of intent, memorandum 
                                           of understanding, agreement in 
                                           principle, acquisition agreement, 
                                           merger agreement, option agreement, 
                                           joint venture agreement, partnership 
                                           agreement or other agreement 
                                           (other than a confidentiality 
                                           agreement referred to in Section 
                                           6.2(b) of the Merger Agreement 
                                           entered into in compliance with 
                                           Section 6.2(b) of the Merger 
                                           Agreement) relating to any Acquisition 
                                           Proposal; 
 "Board" or "Company Board"               the Board of Directors of the 
                                           Company; 
 "Business Day"                           any day ending at 11:59 p.m. 
                                           (New York time) other than a 
                                           Saturday or Sunday or a day on 
                                           which banks in the City of New 
                                           York or London or the Department 
                                           of State of the State of Delaware 
                                           is required or authorized by 
                                           Law to close; 
 "Change in Recommendation"               if the Board or any committee 
                                           thereof: (i) withholds, withdraws, 
                                           qualifies or modifies (or publicly 
                                           proposes or resolves to withhold, 
                                           withdraw, qualify or modify) 
                                           the Company Recommendation with 
                                           respect to the Merger in a manner 
                                           adverse to Exaktera; (ii) approves 
                                           or recommends, or publicly declares 
                                           advisable or publicly proposes 
                                           to enter into, any Alternative 
                                           Acquisition Agreement; (iii) 
                                           fails to recommend against acceptance 
                                           of any tender offer or exchange 
                                           offer for the shares of Company 
                                           Common Stock within ten (10) 
                                           Business Days after commencement 
                                           of such offer, (iv) at any time 
                                           following receipt of an Acquisition 
                                           Proposal, fails to reaffirm its 
                                           recommendation of the Merger 
                                           Agreement and the Merger as promptly 
                                           as practicable (but in any event 
                                           within five Business Days) after 
                                           receipt of any written request 
                                           to do so from Exaktera; (v) makes 
                                           any public statement inconsistent 
                                           with the Company Recommendation; 
                                           or (vi) resolves or agrees to 
                                           take any of the foregoing actions; 
 "Chosen Courts"                          the United States District Court 
                                           for the District of Delaware 
                                           and any appellate court from 
                                           any thereof; 
 "Closing Date"                           unless otherwise mutually agreed 
                                           in writing between the Company 
                                           and Exaktera, the fifth Business 
                                           Day following the day on which 
                                           the last to be satisfied or waived 
                                           of the Conditions (other than 
                                           any Conditions that by their 
                                           nature are to be satisfied at 
                                           closing) have been satisfied 
                                           or waived; 
 "Code"                                   Internal Revenue Code of 1986, 
                                           as amended; 
 "Company Common Stock"                   The Company's common stock, par 
                                           value $0.001 per share; 
 "Company Recommendation"                 the Board unanimously determining 
                                           that the Merger is fair to, and 
                                           in the best interests of, the 
                                           Company and its Stockholders, 
                                           approving and declaring advisable 
                                           the Merger Agreement and the 
                                           Merger and the other transactions 
                                           contemplated by the Merger Agreement 
                                           and resolving to recommend approval 
                                           of the Merger Agreement to the 
                                           holders of shares of Company 
                                           Common Stock and the delisting 
                                           from AIM; 
 "Company"                                ProPhotonix Limited, a Delaware 
                                           corporation; 
 "Conditions"                             the conditions to the Acquisition 
                                           set out in the Merger Agreement 
                                           and summarised in Part 1 of the 
                                           Proxy Statement; 
 "Contract"                               any oral or written agreement, 
                                           lease, license, contract, note, 
                                           mortgage, indenture, arrangement 
                                           or other obligation; 
 "Control"                                the possession, direct or indirect, 
                                           of the power to direct or cause 
                                           the direction of the management 
                                           and policies of a Person, whether 
                                           through the ownership of voting 
                                           securities, by contract, or otherwise; 
 "CREST"                                  a relevant system (as defined 
                                           in the Regulations) in respect 
                                           of which Euroclear UK & Ireland 
                                           Limited is the Operator (as defined 
                                           in the Regulations); 
 "D&O Insurance"                          means directors' and officers' 
                                           liability insurance and fiduciary 
                                           liability insurance; 
 "Delisting"                              the cancellation of the admission 
                                           of the Company Common Stock to 
                                           trading on AIM; 
 "Delisting Approval"                     the affirmative vote in favour 
                                           of the Delisting Resolution by 
                                           at least 75% of the votes cast 
                                           at the meeting; 
 "Delisting Resolution"                   the resolution to be proposed 
                                           at the Special Meeting to approve 
                                           the Delisting; 
 "Depository"                             Computershare Investor Services 
                                           PLC 
 "Common Stock" or "DI"                   interests which represent Company 
                                           Common Stock (which are held 
                                           by Computershare Investor Services 
                                           PLC in exchange for the issue 
                                           of a dematerialised depository 
                                           interest representing Company 
                                           Common Stock and which are held 
                                           on trust for the holders of such 
                                           interests) and are tradable through 
                                           CREST; 
 "DGCL"                                   General Corporation Law of the 
                                           State of Delaware; 
 "DI holders"                             holders of Company Common Stock; 
 "Director" or "Company Director"         a director of the Company; 
 "Effective Date"                         the date on which the Acquisition 
                                           becomes effective in accordance 
                                           with its terms; 
 "Effective Time"                         the time when the Certificate 
                                           of Merger has been duly filed 
                                           with the Secretary of State of 
                                           the State of Delaware or at such 
                                           later time as may be agreed by 
                                           the parties in writing and specified 
                                           in the Certificate of Merger; 
 "Excluded Shares"                        (i) shares of Company Common 
                                           Stock owned by Exaktera, PPL 
                                           Merger Sub Inc. or any other 
                                           direct or indirect wholly owned 
                                           Subsidiary of Exaktera, (ii) 
                                           shares owned by the Company or 
                                           any direct or indirect wholly 
                                           owned Subsidiary of the Company, 
                                           in each case not held in behalf 
                                           of third parties, and (iii) shares 
                                           owned by Stockholders who have 
                                           properly demanded and not withdrawn 
                                           a demand for, and not lost their 
                                           right to, an appraisal pursuant 
                                           to Section 262 of the DGCL; 
 "FCA" or "Financial Conduct Authority"   the UK Financial Conduct Authority; 
 "Form of Declarations"                   the form of declarations relating 
                                           the ultimate beneficial ownership 
                                           of Company Common Stock, a copy 
                                           of which is available on the 
                                           Company's website at https://www.prophotonix.com/; 
 "Form of Direction"                      the form of direction for use 
                                           at the Special Meeting, which 
                                           accompanies the Proxy Statement; 
 "Form of Proxy"                          the form of proxy for use at 
                                           the Special Meetings, which accompanies 
                                           the Proxy Statement; 
 "FSMA" or "Financial Services            the Financial Services and Markets 
  and Markets Act"                         Act 2000 (as amended); 
 "Governmental Consents"                  all authorizations, consents, 
                                           orders or approvals of, or declarations, 
                                           notices or filings with, or expirations 
                                           of waiting periods imposed by, 
                                           any Governmental Entity in connection 
                                           with the Merger and the consummation 
                                           of the other transactions contemplated 
                                           by the Merger Agreement by the 
                                           Company, Exaktera and PPL Merger 
                                           Sub Inc. (except for a Certificate 
                                           of Merger); 
 "Governmental Entity"                    any domestic, foreign or transnational 
                                           governmental, quasi-governmental, 
                                           regulatory or self-regulatory 
                                           authority, agency, commission, 
                                           body, department or instrumentality 
                                           or any court, tribunal or arbitrator 
                                           or other entity or subdivision 
                                           thereof or other legislative, 
                                           executive or judicial entity 
                                           of any nature and any corporate 
                                           entity, instrumentality or subdivision 
                                           of any government, military or 
                                           international organization, including 
                                           any state-owned or affiliated 
                                           company or hospital and any non-governmental 
                                           body that has been authorized 
                                           by Law to act for a governmental 
                                           body; 
 "IRS"                                    the US Internal Revenue Services; 
 "Nutter"                                 Nutter, McClennen & Fish, LLP, 
                                           legal advisers to the Company; 
 "Law"                                    means any federal, state, local, 
                                           foreign, international or transnational 
                                           law, statute, ordinance, common 
                                           law, rule, regulation, standard, 
                                           judgment, determination, order, 
                                           writ, injunction, decree, arbitration 
                                           award, treaty, agency requirement, 
                                           authorization, license or permit 
                                           of any Governmental Entity; 
 "London Stock Exchange"                  London Stock Exchange Group plc, 
                                           a public limited company incorporated 
                                           in England and Wales; 
 "Material Adverse Effect"                any change, event, occurrence 
                                           or effect that, individually 
                                           or taken together with any other 
                                           changes, events, occurrences 
                                           or effects is, or would reasonably 
                                           be expected to be, materially 
                                           adverse to (A) the financial 
                                           condition, properties, assets, 
                                           liabilities, business, or results 
                                           of operations of the Company 
                                           and its Subsidiaries, taken as 
                                           a whole or (B) the ability of 
                                           the Company to timely perform 
                                           its obligations hereunder or 
                                           consummate the transactions contemplated 
                                           hereby on a timely basis; provided, 
                                           however, that none of the following 
                                           shall be deemed to constitute 
                                           a Material Adverse Effect: (A) 
                                           changes in the economy, credit, 
                                           capital, securities or financial 
                                           markets in the United States 
                                           or in any jurisdiction in which 
                                           the Company or any of its Subsidiaries 
                                           operates (including Brexit and 
                                           any governmental response thereto); 
                                           (B) changes that are the result 
                                           of factors generally affecting 
                                           the LED systems, laser modules 
                                           or laser diode industries, including 
                                           disruption in the global supply 
                                           chain; (C) changes in United 
                                           States generally accepted accounting 
                                           principles ("GAAP") or in any 
                                           Law unrelated to the Merger and 
                                           of general applicability after 
                                           the date of the Merger Agreement; 
                                           (D) any failure by the Company 
                                           to meet any internal or public 
                                           projections or forecasts or estimates 
                                           of revenues or earnings for any 
                                           period ending prior to the Closing; 
                                           provided that the exception in 
                                           this clause (D) shall not prevent 
                                           or otherwise affect a determination 
                                           that any change, event, occurrence 
                                           or effect underlying such failure 
                                           (if not otherwise excluded under 
                                           this definition) has resulted 
                                           in, or contributed to, a Material 
                                           Adverse Effect; (E) any change, 
                                           event, occurrence or effect resulting 
                                           from acts of war (whether or 
                                           not declared), civil disobedience 
                                           or insurrection, hostilities, 
                                           sabotage, terrorism, military 
                                           actions or the escalation of 
                                           any of the foregoing, any hurricane, 
                                           flood, tornado, earthquake or 
                                           other weather or natural disaster, 
                                           any outbreak of illness or other 
                                           public health event (including 
                                           the COVID-19 pandemic and any 
                                           governmental or public health 
                                           response thereto) or any other 
                                           force majeure event, whether 
                                           or not caused by any Person, 
                                           or any national or international 
                                           calamity or crisis; (F) a decline 
                                           in the market price, or change 
                                           in trading volume, of the shares 
                                           of Company Common Stock on AIM; 
                                           provided that the exception in 
                                           this clause (F) shall not prevent 
                                           or otherwise affect a determination 
                                           that any change, event, occurrence 
                                           or effect underlying such decline 
                                           (if not otherwise excluded under 
                                           this definition) has resulted 
                                           in, or contributed to, a Material 
                                           Adverse Effect; and (G) (i) the 
                                           negotiation, execution, announcement, 
                                           pendency or performance of the 
                                           Merger Agreement or the consummation 
                                           or pendency of the Transactions 
                                           (other than for purposes of any 
                                           representation or warranty contained 
                                           in Section 4.4 of the Merger 
                                           Agreement) or (ii) any action 
                                           taken by the Company or its Subsidiaries 
                                           that is required by the Merger 
                                           Agreement or with Exaktera's 
                                           written consent or at Exaktera's 
                                           written request, or the failure 
                                           to take any action by the Company 
                                           or its Subsidiaries if that action 
                                           is prohibited by the Merger Agreement 
                                           to the extent Exaktera fails 
                                           to give its consent thereto after 
                                           a written request therefor pursuant 
                                           to Section 6.1 of the Merger 
                                           Agreement; provided, further 
                                           that, any change, event, occurrence 
                                           or effect referred to in clauses 
                                           (A), (B), (C) and (E) immediately 
                                           above shall be taken into account 
                                           in determining whether a Material 
                                           Adverse Effect has occurred or 
                                           would reasonably be expected 
                                           to occur if it (1) primarily 
                                           relates to (or has the effect 
                                           of primarily relating to) the 
                                           Company and its Subsidiaries 
                                           or (2) disproportionately adversely 
                                           affects the Company and its Subsidiaries 
                                           compared to other participants 
                                           in the industries in which the 
                                           Company or its Subsidiaries conduct 
                                           their business (in which case, 
                                           only the incremental disproportionate 
                                           adverse effect may be taken into 
                                           account in determining whether 
                                           a Material Adverse Effect has 
                                           occurred); 
 "Merger Agreement"                       the Agreement and Plan of Merger, 
                                           dated 10 November 2021, by and 
                                           among the Company, Exaktera, 
                                           and PPL Merger Sub Inc., as described 
                                           in Part 1; 
 "Merger Approval"                        the affirmative vote in favour 
                                           of the Merger Resolution of a 
                                           majority (greater than 50%) of 
                                           the issued and outstanding shares 
                                           of Company Common Stock entitled 
                                           to vote thereon at the Special 
                                           Meeting; 
 "Merger Resolution"                      the resolution to be proposed 
                                           at the Special Meeting to approve 
                                           the Acquisition and the Merger 
                                           Agreement; 
 "NDA"                                    any Non-Disclosure Agreement; 
 "Non-US Holder"                          any beneficial owner of Company 
                                           Common Stock that is not a US 
                                           Holder; 
 "Notice of Special Meeting"              the Notice of Special Meeting 
                                           set out at the end of the Proxy 
                                           Statement; 
 "Official List"                          the Official List is the definitive 
                                           record of whether a company's 
                                           securities are officially listed 
                                           in the UK; 
 "Order"                                  any Law (whether temporary, preliminary 
                                           or permanent) that is in effect 
                                           and restrains, enjoins or otherwise 
                                           prohibits consummation of the 
                                           Merger or the other transactions 
                                           contemplated by the Merger Agreement; 
 "Outside Date"                           5:00 p.m., New York time on 11 
                                           February 2022; 
 "Overseas Stockholders"                  Stockholders (or nominees, custodians 
                                           or trustees of Stockholders) 
                                           who are resident in, or nationals 
                                           or citizens of jurisdictions 
                                           outside of the United States 
                                           or who are citizens or residents 
                                           of countries other than the United 
                                           States; 
 "Paying Agent"                           Computershare Limited; 
 "Person" or "Persons"                    any individual, corporation (including 
                                           not-for-profit), general or limited 
                                           partnership, limited liability 
                                           company, joint venture, estate, 
                                           trust, association, organization, 
                                           Governmental Entity or other 
                                           entity of any kind or nature; 
 "Potential Transaction"                  any potential transaction with 
                                           the Company; 
 "Prospectus Rules"                       the prospectus rules of the Financial 
                                           Conduct Authority made under 
                                           Part VI of FSMA; 
 "Proxy Statement"                        the document to be sent to Stockholders 
                                           in connection with seeking the 
                                           approval of the Merger Agreement, 
                                           containing and setting out the 
                                           terms of the Acquisition and 
                                           the notice convening the Special 
                                           Meeting; 
 "Record Date"                            close of trading on AIM on 11 
                                           November 2021, the time and date 
                                           set by the Board as the record 
                                           time and date for determining 
                                           the Stockholders entitled to 
                                           notice of and to vote at the 
                                           Special Meeting; 
 "Regulations"                            the Uncertificated Securities 
                                           Regulations 2001 (SI2001 No. 
                                           3755), as amended from time to 
                                           time; 
 "Regulatory Information Service"         a service approved by the London 
                                           Stock Exchange for the distribution 
                                           to the public of announcements 
                                           and included on the list maintained 
                                           on the London Stock Exchange's 
                                           website; 
 "Resolutions"                            the Delisting Resolution and 
                                           the Merger Resolution; 
 "Special Meeting"                        the Special Meeting of the Stockholders 
                                           to be held at 11:30 a.m. Eastern 
                                           Time (U.S.) on 15 December 2021 
                                           at the offices of Nutter, McClennen 
                                           & Fish, LLP, 155 Seaport Boulevard, 
                                           Boston, Massachusetts, 02210, 
                                           United States; 
 "Stockholder"                            a holder of shares of Company 
                                           Common Stock; 
 "Stockholder Approval"                   the Delisting Approval and the 
                                           Merger Approval, collectively; 
 "Subsidiary"                             means, with respect to any Person, 
                                           any other Person of which at 
                                           least a majority of the securities 
                                           or ownership interests having 
                                           by their terms ordinary voting 
                                           power to elect a majority of 
                                           the board of directors or other 
                                           persons performing similar functions 
                                           is directly or indirectly owned 
                                           or controlled by such Person 
                                           and/or by one or more of its 
                                           Subsidiaries; 
 "Superior Proposal"                      a bona fide written Takeover 
                                           Proposal (except that, for purposes 
                                           of this definition, each reference 
                                           in the definition of "Takeover 
                                           Proposal" to "15% or more" shall 
                                           be "more than 50%") that the 
                                           Company Board determines in good 
                                           faith (after consultation with 
                                           outside legal counsel and the 
                                           Company financial advisor) is 
                                           more favorable from a financial 
                                           point of view to the holders 
                                           of Company Common Stock than 
                                           the transactions contemplated 
                                           by the Merger Agreement, taking 
                                           into account: (a) all financial 
                                           considerations; (b) the identity 
                                           of the third party making such 
                                           Takeover Proposal; (c) the anticipated 
                                           timing, conditions (including 
                                           any financing condition or the 
                                           reliability of any debt or equity 
                                           funding commitments) and prospects 
                                           for completion of such Takeover 
                                           Proposal; (d) the other terms 
                                           and conditions of such Takeover 
                                           Proposal and the implications 
                                           thereof on the Company, including 
                                           relevant legal, regulatory, and 
                                           other aspects of such Takeover 
                                           Proposal deemed relevant by the 
                                           Company Board (including any 
                                           conditions relating to financing, 
                                           stockholder approval, regulatory 
                                           approvals, or other events or 
                                           circumstances beyond the control 
                                           of the party invoking the condition); 
                                           and (e) any revisions to the 
                                           terms of the Agreement and the 
                                           Merger proposed by Exaktera during 
                                           the Superior Proposal Notice 
                                           Period set forth in Section 6.4(d) 
                                           of the Merger Agreement ; 
 "Surviving Corporation"                  the Company, as the surviving 
                                           corporation in the Merger; 
 "Takeover Code"                          the UK City Code on Takeovers 
                                           and Mergers; 
 "Tax"                                    all federal, state, local and 
                                           foreign income, windfall or other 
                                           profits, franchise, net income, 
                                           gross receipts, environmental, 
                                           customs duty, capital stock, 
                                           severances, stamp, transfer, 
                                           payroll, sales, employment, unemployment, 
                                           disability, use, property, withholding, 
                                           excise (including medical device 
                                           excise taxes), production, value 
                                           added, escheat, unclaimed property, 
                                           occupancy and other taxes, duties 
                                           or assessments in the nature 
                                           of a tax, together with all interest, 
                                           penalties and additions imposed 
                                           with respect to such amounts 
                                           and any interest in respect of 
                                           such penalties and additions 
                                           ; 
 "United Kingdom" or "UK"                 the United Kingdom of Great Britain 
                                           and Northern Ireland; 
                                          the United States of America, 
   "United States" or "US"                 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 Holder"                              a beneficial owner of Company 
                                           Common Stock that is for US federal 
                                           income tax purposes: (a) an individual 
                                           citizen or resident of the United 
                                           States, (b) a corporation or 
                                           entity treated as a corporation 
                                           for US federal income tax purposes, 
                                           in each case organized in or 
                                           under the laws of the United 
                                           States, any state thereof or 
                                           the District of Columbia, (c) 
                                           an estate the income of which 
                                           is subject to US federal income 
                                           taxation regardless of its source, 
                                           or (d) a trust if a court within 
                                           the United States can exercise 
                                           primary supervision of the trust's 
                                           administration and one or more 
                                           United States persons have the 
                                           authority to control all substantial 
                                           decisions of the trust or if 
                                           the trust has validly elected 
                                           under US Treasury regulations 
                                           to be treated as a United States 
                                           person; 
 "WH Ireland Limited"                     WH Ireland Limited, the nominated 
                                           adviser and broker to the Company 
                                           for the purposes of the AIM Rules. 
 

References to an enactment include references to that enactment as amended, replaced, consolidated or re-enacted by or under any other enactment before or after the date of this announcement

All the times referred to in the Proxy Statement are Eastern Times of the United States unless otherwise stated.

References to the singular include the plural and vice versa.

5361657.3

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November 11, 2021 02:00 ET (07:00 GMT)

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