Process for, and principal effects of, the Cancellation

The Directors are aware that certain Shareholders may be unable or unwilling to hold Ordinary Shares in the event that the Cancellation is approved and becomes effective. Such Shareholders should consider selling their interests in the market prior to the Cancellation becoming effective.

Under the AIM Rules, the Company is required to give at least 20 clear Business Days' notice of Cancellation. Additionally, Cancellation will not take effect until at least five clear business days have passed following the passing of the Cancellation Resolution. If the Cancellation Resolution is passed at the General Meeting, it is proposed that the last day of trading in Ordinary Shares on AIM will be 10 February 2023 and that the Cancellation will take effect at 7.00 am on 13 February 2023.

The principal effects of the Cancellation will include the following:

·      there will be no formal market mechanism enabling the Shareholders to trade Ordinary Shares;

·      it is possible that, following the publication of this Document, the liquidity and marketability of the Ordinary Shares are reduced and their value adversely affected (however, as set out above, the Directors believe that the existing liquidity in the Ordinary Shares is in any event limited);

·      the Ordinary Shares may be more difficult to sell;

·      in the absence of a formal market and quote, it may be difficult for Shareholders to determine the market value of their investment in the Company at any given time;

·      the regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on AIM will no longer apply;

·      shareholders will lose certain protections to minority shareholders under the AIM rules, such as the independence of the Board and scrutiny of transactions with Related Parties, allowing larger shareholders to exercise more influence and control;

·      the Company will no longer be required to seek shareholder approval, where applicable, for reverse takeovers and fundamental changes in the Company's business;

·      the Company will not be bound to announce material developments as required by the AIM Rules, such as the interim results, final results, substantial transactions, related party transactions, and the information maintained on the Company's website under AIM Rule 26;

·      the Company will no longer be subject to UK MAR regulating inside information and other matters;

·      the Company currently follows the 2018 UK Corporate Governance Code. Following Cancellation it will no longer be required to follow a recognised corporate governance code;

·      the Company will no longer be required to publicly disclose any change in major shareholdings in the Company under the Disclosure Guidance and Transparency Rules;

·      Peel Hunt will cease to be Nominated Adviser to the Company;

·      whilst the Company's CREST facility will remain in place immediately post the Cancellation, the Company's CREST facility may be cancelled in the future and, although the Ordinary Shares will remain transferable, they may cease to be transferable through CREST (in which case, Shareholders who hold Ordinary Shares in CREST will receive share certificates);

·      stamp duty will be due on transfers of shares and agreements to transfer shares unless a relevant exemption or relief applies to a particular transfer; and

·      the Cancellation and Re-registration may have personal taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent tax adviser.

The above considerations are not exhaustive, and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them.

For the avoidance of doubt, the Company will remain registered with the Registrar of Companies in England and Wales in accordance with and, subject to the Companies Act, notwithstanding the Cancellation and Re-registration.

The Company currently intends to continue to provide certain facilities and services to Shareholders that they currently enjoy as shareholders of an AIM company. The Company will:

·              continue to maintain its website, www.morsesclubplc.com, although Shareholders should be aware that there will be no obligation on the Company to include all of the information required under the Disclosure Guidance and Transparency Rules, Rule 26 of the AIM Rules or to update the website as required by the AIM Rules; and

·              continue to communicate to Shareholders (via its website) information about the Company including annual accounts (as required by the Companies Act) and half yearly trading updates, with accompanying presentations.

Following Cancellation, the Directors will be focussed on the long term recovery in the Company's business and anticipate this taking place over a 3-5 year time horizon post Cancellation. The Directors will at this stage consider the options for the Company, with such options expected to include a potential sale or exit for its shareholders.

The Resolutions to be proposed at the General Meeting include the adoption of the New Articles, with effect from the Re-registration. A summary of the principal effect of Re-registration and adoption of the New Articles on Shareholders will be included in the Circular. A copy of the New Articles can be viewed at www.morsesclubplc.com/investors/key-corporate-documents.

Transactions in the Ordinary Shares prior to and post the proposed Cancellation

Prior to Cancellation

Shareholders should note that they are able to continue trading in the Ordinary Shares on AIM prior to Cancellation.

Dealing and settlement arrangements

The Directors are aware that Shareholders may wish to acquire or dispose of Ordinary Shares in the Company following the Cancellation. The Company has appointed Asset Match (www.assetmatch.com) to  facilitate trading in the Ordinary Shares on a matched bargain basis following Cancellation ("Matched Bargain Facility"). Asset Match, a firm authorised and regulated by the Financial Conduct Authority, will operate an electronic off-market dealing facility for the Ordinary Shares. This facility will allow existing shareholders of the Company and new investors to trade Ordinary Shares by matching buyers and sellers through periodic auctions. Investors can register their interest for further information on the Asset Match auction process by emailing dealing@assetmatch.com.

The Asset Match trading facility operates under its own code of practice, which governs the behaviour of participants and the running of the periodic auctions. Asset Match operates an open auction system where volumes of bids and offers at different prices are displayed on its website together with the closing date of the auction. At the end of each auction period, Asset Match pass this information through a non-discretionary algorithm that determines a "market-derived" share price based on supply and demand and allocates transactions accordingly. Bids and offers may be made and withdrawn at any time before the closing date of each auction.

Shareholders will continue to be able to hold their shares in uncertificated form (i.e. in CREST) and should check with their existing stockbroker whether they are willing or able to trade in unquoted shares. Shareholders wishing to trade shares through Asset Match must do so through a stockbroker.  A comprehensive list of stockbrokers who have signed up to access the Asset Match platform is available on request.

Full details will be made available to Shareholders on the Company's website at www.morsesclubplc.com and directly by letter or e-mail (where appropriate). Shareholders may contact Asset Match in relation to any queries regarding trading via the secondary market trading facility by emailing dealing@assetmatch.com.

The Matched Bargain Facility will operate for a minimum of twelve months after Cancellation. The Directors' current intention is that it will continue beyond that time but Shareholders should note that it could be withdrawn. Further details will be communicated to the Shareholders at the relevant time.

If Shareholders wish to buy or sell Ordinary Shares on AIM, they must do so prior to the Cancellation becoming effective. As noted above, in the event that Shareholders approve the Cancellation, it is anticipated that the last day of dealings in the Ordinary Shares on AIM will be 10 February 2023 and that the effective date of the Cancellation will be 13 February 2023.

Current Trading, Strategy and Prospects

Notwithstanding the information and rationale provided within this Circular, attention is also drawn to the recent communication of the Company's interim financial results, trading performance and other updates which can be accessed at https://www.morsesclubplc.com/news-media/regulatory-news/ specifically:

-      Interim Results (24 November 2022);

-      Issue of Practice Statement Letter and update on Scheme of Arrangement (13 December 2022); and

-      Extension of Term-Out Clause (15 December 2022).

Re-registration

As set out above, following the Cancellation, the Directors believe that the requirements and associated costs of the Company maintaining its public company status will be difficult to justify and that the Company will benefit from the more flexible requirements and lower costs associated with private limited company status. It is therefore proposed to re-register the Company as a private limited company. In connection with the Re-registration, it is proposed that the New Articles be adopted to reflect the change in the Company's status to a private limited company. The principal effects of the Re-registration and the adoption of the New Articles on the rights and obligations of Shareholders and the Company are summarised in the Circular to be sent to Shareholders.

An application will be made to the Registrar of Companies for the Company to be re-registered as a private limited company. Re-registration will take effect when the Registrar of Companies issues a certificate of incorporation on Re-registration when it is satisfied that no valid application can be made to cancel the resolution to re-register as a private limited company or that any such application to cancel the resolution to re-register as a private limited company has been determined and confirmed by the Court.

Takeover Code

The Takeover Code applies to all offers for companies which have their registered offices in the United Kingdom, the Channel Islands or the Isle of Man if any of their equity share capital or other transferable securities carrying voting rights are admitted to trading on a regulated market or a multilateral trading facility in the United Kingdom or on any stock exchange in the Channel Islands or the Isle of Man.

The Takeover Code also applies to all offers for companies (both public and private) which have their registered offices in the United Kingdom, the Channel Islands or the Isle of Man and which are considered by the Panel to have their place of central management and control in the United Kingdom, the Channel Islands or the Isle of Man, but in relation to private companies only if one of a number of conditions are met, including that any of the company's equity share capital or other transferable securities carrying voting rights have been admitted to trading on a regulated market or a multilateral trading facility in the United Kingdom or on any stock exchange in the Channel Islands or the Isle of Man at any time in the preceding 10 years.

Following the Cancellation and the Re-registration, the Takeover Code will continue to apply for a period of ten years from the Cancellation provided that the Company is considered by the Takeover Panel to have its place of central management and control in the United Kingdom, the Channel Islands or the Isle of Man. This is known as the "residency test". The way in which the test for central management and control is applied for the purposes of the Takeover Code may be different from the way in which it is applied by the United Kingdom tax authorities, HMRC. Under the Takeover Code, the Takeover Panel looks to where the majority of the Directors are resident, amongst other factors, for the purposes of determining where the Company has its place of central management and control.

Based on the current position of the Board, the residency test will be satisfied and the Takeover Code will continue to apply to the Company following the Cancellation and the Re-registration. However, the Takeover Code could cease to apply to the Company in the future if any changes to the composition of the Board result in the majority of the Directors not being resident in the United Kingdom, the Channel Islands and Isle of Man.

Process for Cancellation

Under the AIM Rules, it is a requirement that the Cancellation must be approved by Shareholders holding not less than 75 per cent. of votes cast by Shareholders at the General Meeting.  Accordingly, the Notice of General Meeting to be set out in the Circular contains a special resolution to approve the Cancellation.

Furthermore, Rule 41 of the AIM Rules requires any AIM company that wishes the London Stock Exchange to cancel the admission of its shares to trading on AIM to notify shareholders and to separately inform the London Stock Exchange of its preferred cancellation date at least 20 Business Days prior to such date. In accordance with AIM Rule 41, the Directors have notified the London Stock Exchange of the Company's intention, subject to the Cancellation Resolution being passed at the General Meeting, to cancel the Company's admission of the Ordinary Shares to trading on AIM on 13 February 2023. Accordingly, if the Cancellation Resolution is passed, the Cancellation will become effective at 7.00 am on 13 February 2023. If the Cancellation becomes effective, Peel Hunt LLP will cease to be the nominated advisor of the Company and the Company will no longer be required to comply with the AIM Rules.

Blackdown Partners Limited ("Blackdown"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement. Neither Blackdown nor any of its affiliates, directors, officers, employees, advisers or agents owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Blackdown in connection with this announcement, any statement contained herein or otherwise.

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