Proposed Subscription and Approval of Waiver

SnackTime plc ("SnackTime" or the "Company")

Proposed Subscription of 12 million New Ordinary Sharesat 15 pence per New Ordinary Share

and

Approval of waiver of Rule 9 of the City Code

The Company is pleased to announce the Subscription of 12 million New Ordinary Shares at 15 pence per New Ordinary Share, by Versatel Co Limited, a company associated with Mr Boris Belotserkovsky, raising a total of £1.8 million (gross). The Subscription is conditional upon, inter alia, the Resolution being passed by Independent Shareholders at the General Meeting, and on Admission.

Versatel is a newly incorporated company registered in the UK and wholly owned by Mr Oleg Chulkov. The directors of Versatel are Mr Chulkov and Mr Belotserkovsky, a current shareholder in, and Director of, the Company. Versatel was established for the sole purpose of investing in Ordinary Shares and currently holds 3.8 million Ordinary Shares representing approximately 18.9 per cent. of the Existing Share Capital as a result of the June Subscription. Following the June Subscription, Mr Belotserkovsky and Mrs Gillian White were appointed to the Board as non-executive Directors. In addition Mr Belotserkovsky directly holds 1,466,400 Ordinary Shares representing approximately 7.3 per cent. of the Existing Share Capital. Versatel, Mr Oleg Chulkov, Mr Belotserkovsky and Mrs White are considered to be acting in concert for the purposes of the City Code and are together the "Belotserkovsky Concert Party".

Assuming that the Resolution is passed by Independent Shareholders at the General Meeting, and all other conditions to the Subscription are satisfied or waived, immediately following Admission the Belotserkovsky Concert Party will be beneficially interested in 17,266,400Ordinary Shares, representing approximately 53.7 per cent. of the Enlarged Share Capital.

Due to the size of its holding in the Company following Admission, the Belotserkovsky Concert Party has agreed to enter into a Relationship Agreement with the Company. The Relationship Agreement, which is conditional upon Admission, will contain provisions to regulate the Belotserkovsky Concert Party's dealings with the Company.

As current Shareholders, Versatel and Mr Belotserkovsky are not considered to be independent for the purposes of voting on the Resolution to approve the Whitewash, therefore only the Independent Shareholders (being all Shareholders other than Versatel, Mr Belotserkovsky and Mr Hamer) are entitled to vote on the Resolution.

As they are members of the Belotserkovsky Concert Party, Mr Belotserkovsky and Mrs White are not deemed to be independent for the purposes of considering the Subscription and the Whitewash. Mr Jeremy Hamer, Chairman of the Company, is also not deemed to be independent for the purposes of considering the Subscription and the Whitewash. This is on the basis he stands to benefit under the terms of his current contractual arrangements with the Company. As a result, the Independent Directors are responsible for considering and recommending the Subscription and the Whitewash to Independent Shareholders.

Certain of the Independent Shareholders and all of the Independent Directors and their related parties have irrevocably undertaken to vote in favour of the Resolution in respect of their aggregate shareholding of 4,771,931 Ordinary Shares, representing approximately 32.2 per cent. of the Existing Share Capital held by Independent Shareholders.

Shareholders will be aware that trading in the Company's shares on AIM was suspended on 30 September 2014 as the Company was unable to publish its report and accounts for the year ended 31 March 2014 within six months of the year end as required by the AIM Rules. Shareholders should also be aware that if the Resolution is not approved by Independent Shareholders at the General Meeting, the funds to be advanced by way of the Subscription will not be provided and there can be no certainty that alternative financing will be available on commercial terms or at all. Should this occur, the Company may be unable to refinance its existing debt facilities and as a result may need to consider commencing liquidation proceedings. This would result in a suspension of trading in the Company's Ordinary Shares on AIM.

For further information:

SnackTime plc 020 8879 8300

Jeremy Hamer, Chairman

Tim James, CFO

Westhouse Securities 020 7601 6100

Tom Griffiths/Richard Johnson

The following has been extracted from the Company's circular which is being published later today:

1. "Introduction

The Company has today announced the Subscription of 12 million New Ordinary Shares at 15 pence per New Ordinary Share, by Versatel Co Limited, a company associated with Mr Boris Belotserkovsky, raising a total of £1.8 million (gross). The Subscription is conditional upon, inter alia, the Resolution being passed by Independent Shareholders at the General Meeting, and on Admission.

Versatel is a newly incorporated company registered in the UK and wholly owned by Mr Oleg Chulkov. The directors of Versatel are Mr Chulkov and Mr Belotserkovsky, a current shareholder in, and Director of, the Company. Versatel was established for the sole purpose of investing in Ordinary Shares and currently holds 3.8 million Ordinary Shares representing approximately 18.9 per cent. of the Existing Share Capital as a result of the June Subscription. Following the June Subscription, Mr Belotserkovsky and Mrs Gillian White were appointed to the Board as non-executive Directors. In addition Mr Belotserkovsky directly holds 1,466,400 Ordinary Shares representing approximately 7.3 per cent. of the Existing Share Capital. Versatel, Mr Oleg Chulkov, Mr Belotserkovsky and Mrs White are considered to be acting in concert for the purposes of the City Code and are together the "Belotserkovsky Concert Party".

Assuming that the Resolution is passed by Independent Shareholders at the General Meeting, and all other conditions to the Subscription are satisfied or waived, immediately following Admission the Belotserkovsky Concert Party will be beneficially interested in 17,266,400Ordinary Shares, representing approximately 53.7 per cent. of the Enlarged Share Capital. Further information on the Belotserkovsky Concert Party is set out at paragraph 8 of this Part I, at Part III of this document and at paragraph 4.4 of Part IV of this document.

Due to the size of its holding in the Company following Admission, the Belotserkovsky Concert Party has agreed to enter into a Relationship Agreement with the Company. The Relationship Agreement, which is conditional upon Admission, will contain provisions to regulate the Belotserkovsky Concert Party's dealings with the Company. Further details of the Relationship Agreement are set out in paragraph 9 of this Part I and in paragraph 6.1.3 of Part IV of this document.

As current Shareholders, Versatel and Mr Belotserkovsky are not considered to be independent for the purposes of voting on the Resolution to approve the Whitewash, therefore only the Independent Shareholders (being all Shareholders other than Versatel, Mr Belotserkovsky and Mr Hamer) are entitled to vote on the Resolution.

As they are members of the Belotserkovsky Concert Party, Mr Belotserkovsky and Mrs White are not deemed to be independent for the purposes of considering the Subscription and the Whitewash. Mr Jeremy Hamer, Chairman of the Company, is also not deemed to be independent for the purposes of considering the Subscription and the Whitewash. This is on the basis he stands to benefit under the terms of his current contractual arrangements with the Company, as more fully set out at paragraph 5 below. As a result, the Independent Directors are responsible for considering and recommending the Subscription and the Whitewash to Independent Shareholders.

Certain of the Independent Shareholders and all of the Independent Directors and their related parties have irrevocably undertaken to vote in favour of the Resolution in respect of their aggregate shareholding of 4,771,931 Ordinary Shares, representing approximately 32.2 per cent. of the Existing Share Capital held by Independent Shareholders.

The purpose of this document is to explain the background to and reasons for the Subscription and to seek approval of the waiver of Rule 9 of the City Code. It is also to explain why the Independent Directors believe that the Subscription and the Whitewash are in the best interests of the Company and its Shareholders as a whole and to recommend that Independent Shareholders vote in favour of the Resolution to be proposed at the General Meeting, notice of which is set out at the end of this document.

Shareholders will be aware that trading in the Company's shares on AIM was suspended on 30 September 2014 as the Company was unable to publish its report and accounts for the year ended 31 March 2014 within six months of the year end as required by the AIM Rules. Shareholders should also be aware that if the Resolution is not approved by Independent Shareholders at the General Meeting, the funds to be advanced by way of the Subscription will not be provided and there can be no certainty that alternative financing will be available on commercial terms or at all. Should this occur, the Company may be unable to refinance its existing debt facilities and as a result may need to consider commencing liquidation proceedings. This would result in a suspension of trading in the Company's Ordinary Shares on AIM.

2. Background to and reasons for the Subscription

The last few years have been difficult for SnackTime. In particular the vending market has become increasingly competitive which has put pressure on the Company's margins. The Company has also been over-leveraged and this has reduced its ability to generate free cash flow. Furthermore, the management of the Group has experienced significant turnover in a number of key roles. The combined effect of these issues has resulted in poor trading which has been reflected in a fall in the Company's share price.

In April 2013 the Company renegotiated its bank facilities with the Co-operative Bank. The new facilities comprised a term loan of £3.394 million and an overdraft of £750,000. The term loan was subject to minimum repayments of £180,000 in the financial year to 31 March 2014, £890,000 in the financial year to 31 March 2015 and a bullet repayment of the remaining £2.294 million on 5 April 2015, at which time it was anticipated that the facility would be renegotiated. The facility was also subject to a monthly EBITDA covenant that increased over the two year term and a net assets covenant.

During the financial year to 31 March 2014, the Group met all the covenant tests imposed by the Co-operative Bank, and repaid £180,000 of outstanding principal. However both the capital repayments and covenant tests for the year to 31 March 2015 were unlikely to be met and as a result the Co-operative Bank asked KPMG to conduct an independent review of the Company's business and its potential sources of future finance in order to determine the appropriate covenant level and repayment schedule for the 2014/2015 financial year. In April 2014 the Company repaid £290,000 of term loan plus interest and in July 2014 the Company was able to make a further loan repayment of £120,000, thereby reducing the amount outstanding under the loan facilities to approximately £2.8 million. However, following completion of its business review, KPMG concluded that in its view the Company had little or no projected free cash flow for the 2014/2015 financial year available to reduce the Company's indebtedness further.

Whilst the Company has been experiencing these challenging times, it was also the subject of an approach in late 2013 from Uvenco UK, a joint venture backed by SnackTime's co-founder and former CEO, Blair Jenkins, and Mr Belotserkovsky, to acquire the entire issued and to be issued share capital of the Company. Following a sharp rise in the Company's share price, details of this approach were announced on 22 January 2014. However discussions were unsuccessful leading to a further announcement on 19 February 2014 under Rule 2.8 of the City Code, that talks between the two parties had been terminated and that no formal offer for the Company would be forthcoming from Uvenco UK. Since the termination of these discussions Mr Belotserkovsky's involvement in the joint venture has ceased.

Despite efforts to make the required repayments and meet the required covenants under the Co-operative Bank facility following its renegotiation in April 2013, by the autumn of 2013 it was clear to the Board that this could not be achieved through the Company's operating cash flow alone and, as a result, it decided to dispose of Drinkmaster, the Company's sealed cup manufacturer. The Drinkmaster sale process, managed by Smith & Williamson, was suspended in January 2014 as a result of the approach from Uvenco UK, and resumed in late February 2014. Whilst there has been some considerable interest throughout the process, no offer for Drinkmaster has yet been received which the Board was minded to accept and it was announced on 4 September 2014 that this sale process has now been stopped.

As part of the Company's efforts to reduce its indebtedness and increase its available working capital, the Company raised £570,000 by way of the June Subscription. On 9 June 2014, Versatel subscribed for 3.8 million new Ordinary Shares at a price of 15p per Ordinary Share. Following the June Subscription, Mr Belotserkovsky and Mrs White were appointed as Non-executive Directors of the Company. The Board now considers that, due to the Company's continued high gearing and limited free cash flow, the Company requires a further injection of capital and has negotiated the proposed subscription by Versatel of a further 12 million New Ordinary Shares in the Company also at 15p per New Ordinary Share for a total of £1.8 million.

Moreover, as part of a complete overhaul of the Company's capital structure, which the Board considers to be necessary, the Board is in the process of negotiating the terms of a new facility with the Co-operative Bank. The Company also has certain outstanding Loan Notes, the 2008 Redeemable Notes, the 2013 Convertible Notes and the 2013 Convertible Notes. The Board has agreed various adjustments to the Loan Notes with the Noteholders, further details of which are set out in paragraph 10 of this Part I.

When aggregated with the other Belotserkovsky Concert Party's holdings in the Company, the subscription by Versatel of 12 million New Ordinary Shares will increase the Belotserkovsky Concert Party's aggregate beneficial interest in the Company to approximately 53.7 per cent. of the Enlarged Share Capital. It is this element of the restructuring, and the waiver of the provisions of Rule 9 of the City Code, that Independent Shareholders are being asked to vote on at the forthcoming General Meeting on 28 October 2014.

Shareholders will be aware that trading in the Company's shares on AIM was suspended on 30 September 2014 as the Company was unable to publish its report and accounts for the year ended 31 March 2014 within six months of the year end as required by the AIM Rules. Shareholders should also be aware that if the Resolution is not approved by Independent Shareholders at the General Meeting, the funds to be advanced by way of the Subscription will not be provided and there can be no certainty that alternative financing will be available on commercial terms or at all. Should this occur, the Company may be unable to refinance its existing debt facilities with the Co-operative Bank and as a result may need to consider commencing liquidation proceedings. This would result in a suspension of trading in the Company's Ordinary Shares on AIM.

3. Details of the Subscription and use of proceeds

The Company announced earlier today that it is raising approximately £1.8 million by way of the Subscription. The Subscription Price represents a premium of approximately 46 per cent. to the closing mid-market price of 10.25 pence per Ordinary Share on 29 September 2014, the last day prior to the suspension of trading.

The Company has had initial discussions with certain of its Significant Shareholders to seek informal confirmation that they would support the issue of the New Ordinary Shares to Versatel at the Subscription Price. The Board received unanimous support in favour of the Subscription from those Independent Shareholders who were approached. The Board considers that the Subscription is in the best interests of the Company and its Shareholders as a whole.

The Subscription is conditional upon, inter alia, the Resolution being passed by Independent Shareholders at the General Meeting and on Admission. Application has been made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM, conditional upon, inter alia, the approval of the Resolution at the General Meeting.

Subject to Admission becoming effective, dealings in the New Ordinary Shares are expected to commence at 8.00 a.m. on 29 October 2014 (or such later time and/or date as the Company and Versatel may agree, but in any event no later than 5.30 p.m. on 30 November 2014). The New Ordinary Shares will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of the Ordinary Shares following Admission.

Versatel is a substantial shareholder in the Company as defined in the AIM Rules. The Subscription is therefore classified as a transaction with a related party for the purposes of the AIM Rules. In accordance, therefore, with the AIM Rules, the Independent Directors, having consulted with the Company's nominated adviser, Westhouse, consider that the terms of the Subscription are fair and reasonable insofar as the Company's shareholders are concerned.

The Directors intend to apply the net proceeds of the Subscription to reduce the Company's financing costs and for working capital purposes.

4. Changes to the Board

In the event that Independent Shareholders approve the Resolution, the Board of the Company will be restructured from the conclusion of the General Meeting as follows.

Ian Forde and Michiel Slinkert, both Non-Executive Directors, have agreed to resign with effect from the conclusion of the General Meeting. They have both served on the Board for several years, in the case of Ian Forde since the start of the Company as a co-founder of the business. The rest of the Board wishes to thank them both for their significant individual contributions.

The announcement of Mr Belotserkovsky's and Mrs White's appointment as Non-Executive Directors of the Company was made on 9 June 2014. Mr Belotserkovsky introduced Mrs White to the Company and proposed her directorship on the grounds that she could provide an experienced and expert contribution to the Company in the areas of marketing and technology. Save as set out at paragraph [8] below, and as Directors of the Company, there is no relationship between Mr Belotserkovsky and Mrs White. Mr Belotserkovsky and Mrs White are considered by the Panel to be part of the Belotserkovsky Concert Party. Mr Belotserkovsky and Mrs White will remain on the Board and will stand for re-election at the Company's forthcoming Annual General Meeting in accordance with the Articles.

The Company is also currently conducting negotiations with a potential Chief Executive Officer for the Company. It is currently envisaged that this individual would commence employment in this capacity on 1 January 2015.

5. Arrangements with the Chairman of the Board

The Concert Party and the Chairman of the Board, Mr Jeremy Hamer, have had preliminary discussions regarding potential arrangements to be put in place following the Subscription. Whilst nothing has been formally agreed, Mr Hamer may be entitled to receive a bonus of £100,000 from the Company in the event that the Subscription proceeds.

Mr Hamer's service agreement, which was entered into over two years ago, is subject to a change of control provision which provides that if the Company is the subject of a sale (being the acquisition by any person of shares in the Company which confer in the aggregate more than 50 per cent. of the total voting rights at general meetings on the acquiror) he may within three months give one week's written notice to the Company to terminate the agreement. Within seven days of such termination the Company must pay him £100,000 (minus any deductions for income tax and National Insurance contributions). This bonus was originally part of this service agreement as recognition that one of the key objectives of his appointment was the search for further investment in the Company and the likelihood that in the event he was successful in achieving this objective, his services would no longer be required. The terms of his service agreement are set out more fully at paragraph 5.1.1 of Part IV of this document.

Mr Hamer and the Concert Party have had preliminary discussions with regard to his continued involvement with the Company following the Subscription, in the role of non-executive Chairman of the Board. The Concert Party consider Mr Hamer's employment in such a role as beneficial for the Company on the grounds of his experience and the need for continuity at a time of considerable change for the Company. However, any employment of Mr Hamer in this role would be contingent on the Company having appointed a suitable individual to the post of Chief Executive Officer. Therefore, if the Board and Mr Hamer agree, it is a possibility that he will terminate his existing contract, receive a bonus of £100,000 and then be immediately employed as a Non-Executive Chairman. This is arguably not within the spirit of the rights conferred by his service agreement, which envisages such a payment being made only in the event that his involvement with the Company has ceased (and he has issued a notice to terminate).

Under Rule 16 of the City Code, except with the consent of the Panel, an offeror or persons acting in concert with it may not make any arrangements with shareholders and may not deal or enter into arrangements to deal in shares of the offeree company, or enter into arrangements which involve acceptance of an offer, either during an offer period or when one is reasonably in contemplation, if there are favourable conditions attached which are not being extended to all shareholders.

As Mr Hamer is a Shareholder, the potential payment of a bonus of £100,000 that could be construed as outside the spirit of the rights set out in his existing service contract constitutes a special arrangement with more favourable conditions attached, which is not being offered to other Shareholders. As a result of these arrangements, Mr Hamer is not considered to be independent for the purposes of recommending that Independent Shareholders vote in favour of the Resolution and is not able to vote on the Resolution.

6. Results for year ended 31 March 2014 and SnackTime current trading and future prospects

On 30 September 2014, the Company has separately today announced its unaudited preliminary results for the year ended 31 March 2014. Turnover was down 8.3 per cent. to £18.811m (2013: £20.506m) producing an operating loss before amortisation and exceptional costs of £0.427m (2013: loss £1.125m). Operating loss for the period was £8.033m (2013: loss £7.873m). Ebitda before exceptional costs and share based payments for the year was up 74 per cent. to £1.138m (2013: £655k). Following exceptional costs of £7.2m, including non-cash goodwill and intangible impairments of £6.579m (2013: £6.391m including a non cash goodwill impairment charge of £5.440m), the pre-tax loss was £8.537m (2013: loss £8.255m) and loss after tax attributable to the shareholders was £7.742m (2013: loss £8.312m). Gross margins improved by 3 per cent. to 55 per cent. (2013: 52 per cent.) while distribution and administration costs before exceptional, share option costs and amortisation dropped by 8.3 per cent. to £10.784m (2013: £11.755m). Net finance charges, excluding exceptional costs, increased to £504k (2013: £271k) and net borrowings at 31 March 2014 had increased to £4.806m (2013: £3.845m) including shareholder loans of £1.621m (2013: £600k).

The Group ended the year with headroom of £320,000 on its £750,000 overdraft facility. Following loan repayments in April 2014 of £290,000 and in July 2014 of £120,000, the Company has reduced its term loan with the Co-operative Bank by £590,000 in the last 12 months to approximately £2.8 million.

Since April 2014, when the Company announced that the proposed sale of Drinkmaster was progressing well, interest in acquiring Drinkmaster has waned mainly due to a major change in the relationship with its largest customer which has reduced profitability materially. As the Board no longer has an acceptable offer for the business, it has decided that it is in the best interests of the Company and Shareholders as a whole to stop the sale process.

On 4 September 2014, the Company released a trading statement in which it stated that trading in the first five months of the current financial year had been behind the same period last year due mainly to disappointing cash takings through the Group's vending machines and the loss of business at Drinkmaster referred to above. In addition, the Company announced that franchise sales had been stronger than a year ago and the machine sales pipeline for the next few months was encouraging.

7. Waiver of Rule 9 of the City Code

The Company is registered in England and Wales and Shareholders are protected under the City Code.

Under Rule 9 of the City Code, any person who acquires an interest (as defined in the City Code) in shares which, taken together with shares in which he is already interested and in which persons acting in concert with him are interested, carry 30 per cent. or more of the voting rights of a company which is subject to the City Code, is normally required to make a general offer to all the remaining shareholders to acquire their shares. An offer under Rule 9 of the City Code must be made in cash and at the highest price paid by the person required to make the offer, or any person acting in concert with him, for any interest in shares of the Company during the 12 months prior to the announcement of the offer.

Shareholders should be aware that, under the City Code, if a person (or group of persons acting in concert) holds interests in shares carrying more than 50 per cent. of the Company's voting rights, that person (or any person(s) acting in concert with him) will normally be entitled to increase their holding or voting rights without incurring any further obligations under Rule 9 to make a mandatory offer, although individual members of any concert part will not be able to increase their percentage shareholding above a Rule 9 threshold without Panel consent. Such persons should however consult with the Panel in advance of making such further acquisitions. Shareholders should be aware that should the Resolution be passed, and all the conditions to the Subscription be satisfied including Admission, the Belotserkovsky Concert Party will hold, in aggregate, 17,266,400 Ordinary Shares, representing approximately 53.7 per cent. of the Enlarged Share Capital.

Subject to the approval of Independent Shareholders at the General Meeting, the Panel has agreed to waive the obligation to make a general offer that would otherwise arise as a result of the Subscription. Accordingly, the Resolution is being proposed at the General Meeting and will be taken by means of a poll of Independent Shareholders attending and voting at the General Meeting.

8. Information on the Belotserkovsky Concert Party

Under the City Code, a concert party arises where persons acting together pursuant to an agreement or understanding (whether formal or informal and whether or not in writing) co-operate to obtain or consolidate control of the company. Control means an interest or interests in shares carrying in aggregate 30 per cent. or more of the voting rights of the company, irrespective of whether the holding or holdings give de facto control.

As set out above, previously, in relation to the possible offer discussions in February 2014, Mr Belotserkovsky was treated as acting in concert with Mr Jenkins and Uvenco UK under the City Code. Talks between Uvenco UK and the Company with regard to a possible offer for the Company were terminated on 19 February 2014 and at the current time these two parties are not treated as acting in concert.

Versatel, Mr Boris Belotserkovsky, Mrs Gillian White and Mr Oleg Chulkov, together the Belotserkovsky Concert Party, further details of whom are set out below, are deemed to be acting in concert pursuant to the City Code. Immediately following Admission, the Belotserkovsky Concert Party will be beneficially entitled to 17,266,400 Ordinary Shares, representing approximately 53.7 per cent. of the Enlarged Share Capital.

Save as disclosed in this document, the Belotserkovsky Concert Party has no intention regarding any changes to the business of the Group, including the continued employment of employees and management of the Group (including any material changes in conditions of employment), strategic plans including repercussions on employment, the locations of the Group's places of business, the employer contributions made into any Group pension scheme (including the accrual of benefits for existing members and the admission of new members), the deployment of the Group's fixed assets and the maintenance of the Company's existing trading facility on AIM. The Belotserkovsky Concert Party confirms that it supports the continued delegation of responsibilities and authorities to the Company's executive management team to develop the business in line with the Group's stated strategy. The Belotserkovsky Concert Party confirms that it is pursuing a further investment on the terms outlined in this document on the basis of the long term commercial justification set out at paragraph 2 of this Part I.

Belotserkovsky Concert Party links

Mr Chulkov is the sole shareholder in Versatel and he and Mr Belotserkovsky are the only two directors of it. Mr Chulkov and Mr Belotserkovsky are longstanding friends who have known each other for almost 30 years. Mr Chulkov is not involved with Uvenco or any of Mr Belotserkovsky's other business ventures. Mr Chulkov and Mr Belotserkovsky have entered into a verbal agreement whereby Mr Belotserkovsky has the right of first refusal in the event that Mr Chulkov decides to sell his shareholding in Versatel, or Versatel decides to sell its shareholding in the Company.

Mr Belotserkovsky and Mrs White are business acquaintances who know one another as a result of both having longstanding careers and a multitude of contacts in the vending industry. Mr Belotserkovsky was appointed to the Board, alongside Mrs White, when Versatel previously subscribed for shares in the Company (in the June Subscription). Mrs White's appointment was a condition of the June Subscription. Additionally, 24vend Limited, a company established and 50 per cent. owned by Mrs White, has entered into a joint venture agreement for the purpose of developing vending technology with Uvenco Holding, a company in which Mr Belotserkovsky has an interest.

There are no relationships between the members of the Belotserkovsky Concert Party and any of the other Shareholders.

Mr Belotserkovsky

Mr Belotserkovsky graduated from the Leningrad Institute of Aviation Instrument-Making. Between 1990 and 2010, he was both owner and CEO of the Unicum Group of Companies, the leading Russian provider of gaming and amusement industry products, including vending machines. In 2002 Mr Belotserkovsky founded Ritzio Entertainment Group Limited, a leading multinational gaming operator, with business spanning 15 jurisdictions globally. Mr Belotserkovsky co-owned the company and served as a member of its board of directors until 2011.

Since 2008, the Uvenco group of companies has also been 100 per cent. controlled by the Belotserkovsky family, with Mr Belotserkovsky acting as Chairman of the board. Specialising in vending and other self-service products, the Uvenco group quickly became the largest vending operator in the Russian market. According to a report by the European Vending Association on the Russian vending market in 2012, the Russian vending industry operates 115,500 vending machines with a combined turnover of €167 million. The report describes the Russian vending market as "highly fragmented" as the top five operators account for only 33 per cent. by value. The report states that the largest operator is Uvenco which is believed to have as much as 25 per cent. of the market.

Uvenco's machines cover almost all Russian cities with a population of more than 500,000 people (65 in total), covering a combined population of approximately 45 million, and covering the most attractive locations within such cities through partnerships with Russian Railways, the Moscow subway and nine major Russian airports. Uvenco's main competitors cover only three to five cities. Uvenco was the official vending operator to the Sochi 2014 Winter Olympic Games.

From 2004, Mr Belotserkovsky also published magazines under licence from the "Time Out London" group, including "Time Out Moscow" and "Time Out Petersburg". He was also involved with related products, including the Time Out websites, and related fashion and lifestyle publications. In 2008 Mr Belotserkovsky founded "Inflight Entertainment Group" a company which publishes in-flight magazines for airlines such as Aeroflot, S7 and GTK Rossiya.In 2004 Mr Belotserkovsky was given an award "For Merits in Strengthening of Competitiveness in Russia". In 2009, Mr Belotserkovsky was elected President of the Russian National Vending Association, and in 2014, he joined the European Vending Association's Executive Committee.

For the avoidance of doubt, Uvenco UK is not connected to Mr Belotserkovsky's main investment vehicle Uvenco and neither company holds any shares in the other. Furthermore, there are no cross shareholdings in Uvenco UK and Versatel.

Mrs Gillian White

Mrs White obtained a B.Eng in Mechanical Engineering and Management from Liverpool University. Mrs White spent 19 years with Mars Inc., latterly in a senior strategic market development role responsible for a multi-million dollar global vending business, prior to establishing 24vend Limited, an international specialist vending consultancy.

Mrs White is an executive board member of both the European Vending Association, based in Brussels, and the Automatic Vending Association (the UK and Ireland vending trade association). Her areas of responsibility include technical, legal and health including specific topics such as allergens. Additionally, Gillian is Vice Chair of Coeliac UK, the national health charity for those with Coeliac Disease and Dermatitis Herpetiformis.

Mr Oleg Chulkov

Mr Chulkov holds a degree in Navigational Engineering from the St Petersburg Marine Academy together with a Masters in Psychology from the University of London. He served as an officer in the merchant navy with the Baltic Shipping Co and following this worked as a broadcaster with the BBC World Service and then as a lecturer at the University of Westminster.

Mr Chulkov subsequently set up a property development and construction business specialising in the residential sector. He has been involved in development projects in the UK, France, Switzerland and Italy and has held consulting and director positions in various property investment projects. His areas of expertise include sourcing opportunities, acquisitions, securing finance and adding value to investment projects through maximising their development potential. Since August 2011 Mr Chulkov has been director and head of property investments of The Leading Properties of the World (LPW) group based in Switzerland.

Versatel

Versatel was incorporated in the United Kingdom on 12 May 2014 as a private limited company with registered number 09033409. Versatel's registered office is at 15 Whitehall, London, SW1A 2DD. The directors of Versatel are Mr Chulkov and Mr Belotserkovsky. Versatel was incorporated with a share capital of 1,000 Ordinary Shares of £1 each and is 100 per cent. owned by Mr Oleg Chulkov who has paid up these shares in full.

Versatel has not yet filed accounts. Versatel has no subsidiaries, and has only one shareholder, Mr Chulkov. Versatel has no trading business and was incorporated and capitalised for the sole purpose of investing in shares in the Company. Following the Subscription the only asset held by Versatel will be 15.8 million Ordinary Shares representing approximately 49.15 per cent. of the Enlarged Share Capital. Other than the June Subscription Agreement, the Subscription Agreement and the Facility Agreement, Versatel has not entered into any material contracts.

9. Relationship Agreement

It is now compulsory for a premium listed company with a controlling shareholder to have a written and legally binding agreement in place regulating their relationship. Whilst the Company is not admitted to the Official List of the UK Listing Authority, and is instead admitted to AIM, it is nevertheless now considered to be good market practice to have a relationship agreement in place where a Company has a controlling shareholder. As a result the Company and the Belotserkovsky Concert Party have agreed that it would be appropriate for them to enter into such an agreement.

The abovementioned agreement will come into effect as at the date of Admission and will remain in effect for so long as the members of the Belotserkovsky Concert Party remain beneficially entitled, either individually or together, to Ordinary Shares representing more than 30 per cent. of the voting rights attaching to Ordinary Shares issued by the Company. Whilst the agreement remains in effect, the members of the Belotserkovsky Concert Party have also agreed that they will exercise their voting rights as Shareholders to procure that: (i) the Company is managed independently; and (ii) transactions with the Company are conducted on an arm's length basis. Further details of the Relationship Agreement are set out at paragraph [6.1.2] of Part IV of this document.

10. Loan Note Adjustments

The Company has agreed certain adjustments to the terms of the Loan Notes with the Noteholders. The Company has agreed: (i) with the holders of the 2008 Convertible Loan Notes and a majority of the holders of the 2013 Redeemable Loan Notes that the premium of 6 per cent. previously payable on redemption be waived; and (ii) with a majority of the holders of the 2013 Redeemable Notes, that the interest rate payable be reduced from 12 per cent. to 9 per cent. These amendments are conditional on Admission and only become effective from this date.

The Company has negotiated these amendments in order to improve the Company's cash flow. Those Directors who are also Noteholders have agreed to these amendments in respect of their own holdings of Loan Notes.

11. General Meeting

Set out at the end of this document is a notice convening the General Meeting to be held on 28 October 2014, at the offices of Westhouse at 110 Bishopsgate, London, EC2N 4AY commencing at 10.00 a.m.

The Resolution will be proposed as an Ordinary Resolution, to be taken on a poll of Independent Shareholders to approve the Whitewash and requiring more than 50 per cent. of Independent Shareholders present in person or by proxy and exercising their vote, to vote in favour for it to be passed.

12. Irrevocable undertakings

Certain of the Independent Shareholders and all of the Independent Directors and their related parties have irrevocably undertaken to vote in favour of the Resolution in respect of their aggregate shareholding of 4,771,931 Ordinary Shares, representing approximately 32.2 per cent. of the Existing Share Capital held by Independent Shareholders.

Further details of the irrevocable undertakings received by the Company are set out in paragraph 3 of Part IV of this document.

13. Action to be taken

You will find enclosed with this document a Form of Proxy for use at the General Meeting.

Whether or not Shareholders propose to attend the General Meeting in person, it is important that Shareholders complete and sign the enclosed Form of Proxy in accordance with the instructions printed thereon and return it to the Company's Registrars, Capital Asset Services, at PXS1, 34 Beckenham Road, Kent, BR3 4ZF, as soon as possible and, in any event, so as to be received not later than 10.00 a.m. on 26 October 2014.

The completion and return of a Form of Proxy will enable you to vote at the General Meeting without having to be present in person but will not preclude you from attending the General Meeting and voting in person if you so wish. If a Shareholder has appointed a proxy and attends the General Meeting in person, his proxy appointment will automatically be terminated and his votes in person will stand in its place.

If you hold Ordinary Shares in CREST, you may appoint a proxy by completing and transmitting a CREST Proxy Instruction to Capita Asset Services so that it is received no later than 10.00 a.m. on 26 October 2014.

14. Recommendation

The Independent Directors, who have been so advised by Westhouse, consider the Whitewash to be fair and reasonable and in the best interests of the Independent Shareholders and the Company as a whole. In providing its advice to the Independent Directors, Westhouse has taken into account the Independent Directors' commercial assessments.

Accordingly, the Independent Directors recommend that Independent Shareholders vote in favour of the Resolution, as they have irrevocably undertaken to do in respect of their entire beneficial holdings amounting, in aggregate, to 1,582,888 Ordinary Shares, representing approximately 10.7 per cent. of the Existing Share Capital held by Independent Shareholders.

Mr Belotserkovsky, Mrs White and Mr Hamer are not considered to be independent for the purposes of considering the Resolution, and are not participating as Directors in this recommendation to Independent Shareholders and not able to vote on the Resolution.

Yours faithfully,

Michael Jacksonfor and on behalf of the Independent Directors"

SUBSCRIPTION STATISTICS

expected timetable of principal events

Each of the times and dates in the above timetable may be subject to change.

DEFINITIONS

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

All references to times in this document are to GMT unless otherwise stated. References to the singular shall include references to the plural, where applicable and vice versa.

Save where specifically required or indicated otherwise, words importing one gender shall be treated as importing any gender and words importing the singular shall be treated as importing the plural and vice versa. All references to legislation are to English legislation, unless the contrary is indicated, and any reference to any provision of any legislation includes any amendment, modification, re-enactment or extension thereof.