Proposed Financing Arrangements & Director Change

29 January 2013

Ultrasis plc

("Ultrasis" or the "Company")

Proposed Financing Arrangements

And Directorate Change

The board of directors of Ultrasis (the "Board") is pleased to announce that it has entered into financing arrangements with an existing significant shareholder, Mr. Paul Bell, whereby, conditional upon the passing of the resolutions at the Annual General meeting of the Company, to be held on 30 January 2013 ("the Resolutions"), the Company has had made available to it by Mr Bell, £2.85 million (gross), via a combination of loan facilities and a subscription for ordinary shares of 0.1 pence in Ultrasis (the "Ordinary Shares") (the "Financing Arrangements").

Under the terms of the Financing Arrangements, Mr. Bell has also proposed the appointment of an additional non-executive director, to represent his interests on the Board.

Background

The Company's auditors included an emphasis of matter concerning the Company's finances in their opinion, accompanying the annual accounts for the year ending 31 July 2012, published in December 2012. Since then, the Board has been concerned that any anxiety in the public domain about the Company's long-term financial viability would be damaging to its credibility in the eyes of the Company's stakeholders.

The Board, therefore, welcomed the approach from Mr Bell, having in the meantime satisfied itself that alternative finance, by way of overdraft or longer-term loan facilities, was not available from the Company's bankers and that a pre-emptive share issue was unlikely to raise the required net funds, given the costs of such an offering and the probable significant discount to market price at which such an offering would need to undertaken.

Proposed Financing Arrangements

The subscription

The Company yesterday entered into a conditional subscription agreement with Fitel Nominees Limited ("Fitel"), according to which 178,571,428 Ordinary Shares (the "Subscription Shares") will be issued to Fitel (on behalf of Mr. Bell) at 0.28 pence per Ordinary Share, being the middle market price at the close of business on 28 January 2013 (the last practicable date prior to the publication of this announcement) (the "Subscription Price"), raising, £0.5 million (the "Subscription").

It is anticipated that, subject to the passing of the Resolutions, completion of the Subscription ("Completion") will take place on 12 February 2013 and admission of the Subscription Shares to trading on the AIM market of the London Stock Exchange plc, will occur on 14 February 2013.

Mr. Bell currently holds 155,460,900 Ordinary Shares, representing 10.2 per cent. of the Company's currently issued share capital.

Mr. Bell will, immediately following Completion, be beneficially interested in an aggregate of 334,032,328 Ordinary Shares, representing 19.64 per cent. of the Company's issued share capital.

The loan facilities

Ultrasis yesterday entered into a conditional loan agreement with Mr. Bell, under which Mr. Bell will make available two loan facilities to the Company, the first is a convertible loan of £350,000 (the "Convertible Loan") and the second is a term loan of £2.0 million ("the Term Loan") (together the "Loan Facilities") (the "Loan Agreement").

The material terms of the Loan Facilities are summarised below:

·; the Company is entitled to drawdown funds to a maximum amount of £1.0 million in any 12 month rolling period;

·; the amount of each individual drawdown is to be a multiple of £10,000;

·; no drawdown will be permitted if Mr. Bell shall cease to own at least ten per cent. of the issued share capital of the Company;

·; should Mr. Bell cease to hold at least ten per cent. of the share capital of the Company, otherwise than as a result of a disposal by him of his Shares, the Loan Facilities shall become immediately repayable;

·; the maximum amount of each individual drawdown is determined by the length of the notice period, ranging between 30 days and 60 days, that the Company gives Mr. Bell;

·; an interest rate of 4.00 per cent. per annum is applied to the aggregate, outstanding drawn down amount and is payable by the Company six monthly in arrears;

·; the Loan Facilities are repayable on demand five years following the date of the Loan Agreement;

·; the security for the Loan facilities is a composite guarantee and debenture over the Company's assets;

·; the Convertible Loan can be converted at any time, at his sole discretion by Mr. Bell into 125,000,000 Ordinary Shares; and

·; the conversion price for the Convertible Loan is 0.28 pence per Ordinary Share, being the same as the subscription price referred to above.

Were the full amount of the Convertible Loan converted into Ordinary Shares at the Subscription Price and assuming no further issues of Ordinary Shares, Mr. Bell would be interested in 459,032,328 Ordinary Shares, representing 25.14 per cent. of the Company's then issued share capital.

The availability to the Company of the Loan Facilities is subject to, inter alia:

·; the written authorisation of each member of the Board; and

·; evidence that the Company has sufficient authorised unissued share capital to satisfy full conversion of the Convertible Loan and the requisite authority to allot those shares.

Related Party Transaction and application of funds

Mr. Bell is currently interested in 155,460,900 Ordinary Shares, representing approximately 10.2 per cent. of the issued Ordinary Shares of the Company.

As a result, Mr. Bell is deemed to be a related party of the Company and the Financing Arrangements are considered to be a related party transaction, pursuant to AIM Rule 13 of the AIM Rules for Companies.

The Board believes that the Financing Arrangements are in the best interest of shareholders, and the Company, as they will:

·; place Ultrasis on a sounder, long-term, financial footing;

·; sustain the Company through the current pause in the NHS market and will enable it to address the UK domestic market afresh, when new health care commissioning groups become fully operational in April this year;

·; significantly enhance the ability of the Company better to exploit international opportunities, especially in the USA and China; and

·; place Ultrasis in an improved positioned to pursue strategic growth in the health and wellbeing market, where the Board believes that a period of consolidation is probable.

Accordingly, for the purposes of considering the related party transaction, the Board, having consulted with Strand Hanson Limited, the Company's Nominated Adviser, considers that the terms of the Financing Arrangements are fair and reasonable insofar as the Company's shareholders are concerned.

The Board intends to use the funds from the Financing Arrangements for general working capital purposes in order to pursue its strategic aims, as set out above.

Directorate Change

As stated above, Mr. Bell has also proposed the appointment of an additional non-executive director, expected to be Mr. Daniel Llywelyn Bate, whose appointment will be effective on 14 February 2013, subject to the passing of the Resolutions.

Mr. Bate began his career as a paralegal with Clifford Chance in 1998, before completing a training contract with Christopher Bate Solicitors. He went on to work at Stringer Saul (now Fasken Martineau) and Halliwells, before joining W.H. Ireland in 2007 as a Corporate Finance Director and where he is now Head of Corporate Finance, Manchester. Since joining W.H. Ireland, he has taken on the role of Group Company Secretary and he now holds a number of directorships with W.H. Ireland and its subsidiaries. His experience in financial markets, together with his legal expertise in corporate law, is expected to add value to the Board of the Company in the future.

Daniel Llywelyn Bate (aged 41):

Current Directorships Past Directorships (past 5 years)

W.H. Ireland Nominees Limited W.H. Ireland (Stockbrokers) Limited

Fitel Nominees Limited W.H. Ireland Leasing Limited

A.R.E. business & Professional Limited Acceleris Limited

Readycount Limited

S.R.S. Business & Professional Limited

Stockholm Investments Limited

W.H. Ireland (Financial Services) Limited

W.H. Ireland Trustees Limited

There is no further information to be disclosed pursuant to Schedule Two part (g) of the AIM Rules for Companies.

Nigel Brabbins, CEO of Ultrasis, said:

"This is an important and exciting step for Ultrasis. The investment from Paul Bell takes Ultrasis to a new level, providing long-term financial security during difficult times and allowing the management team to focus on business development, both in the UK and internationally.

The Board strongly encourages shareholders to support Resolutions 6 and 7 on the agenda of the Annual General meeting on 30 January 2013. The equity subscription and loan facility are conditional upon those Resolutions, giving the board authority to issue up to 20 per cent. of the company's share capital, being ca. 304.5 million ordinary shares, being passed.

The pricing of the equity at the mid-market closing price on the date of Paul Bell's offer is, in the opinion of the Board, fair to all shareholders. The Board believes that the coupon of 4 per cent. on the drawn-down element of the loan facility is significantly lower than Ultrasis would have expected to pay, should the Company have sought a similar facility in the commercial market.

We look forward to welcoming Daniel Bate, Paul Bell's nominee, to the Board, when the Financing Arrangements are completed and believe that he will add to the experience and expertise of the Board.

The e-health and wellbeing market is developing rapidly and the Board believes that Ultrasis will now be strongly placed to address that market with its portfolio of products, particularly its leading therapy for stress, anxiety and depression, "Beating the Blues".

**ENDS**

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