Schedule 1 - Phytopharm plc

ANNOUNCEMENT TO BE MADE BY THE AIM APPLICANT PRIOR TO ADMISSION IN ACCORDANCE WITH RULE 2 OF THE AIM RULES FOR COMPANIES ("AIM RULES")

COMPANY NAME:

Phytopharm plc ("Phytopharm" or the "Company")

COMPANY REGISTERED OFFICE ADDRESS AND IF DIFFERENT, COMPANY TRADING ADDRESS (INCLUDING POSTCODES) :

Lakeview House2 Lakeview CourtErmine Business ParkHuntingdonCambridgeshirePE29 6UA

COUNTRY OF INCORPORATION:

England

COMPANY WEBSITE ADDRESS CONTAINING ALL INFORMATION REQUIRED BY AIM RULE 26:

www.phytopharm.com

COMPANY BUSINESS (INCLUDING MAIN COUNTRY OF OPERATION) OR, IN THE CASE OF AN INVESTING COMPANY, DETAILS OF ITS INVESTING POLICY). IF THE ADMISSION IS SOUGHT AS A RESULT OF A REVERSE TAKE-OVER UNDER RULE 14, THIS SHOULD BE STATED:

The Company will be classified as an investing company on AIM. The Directors intend to pursue suitable corporate acquisitions offering the potential to deliver a favourable return to Shareholders over the medium term, primarily in the form of capital gain.

The Company's Investing Policy is to invest in businesses that typically have attributed to them some or all of the following characteristics:

·; Healthcare sector:

·; Revenue generating or near revenue generating;

·; Embedded or protected IP;

·; UK based;

·; Capable of significant growth potential; and

·; A credible management team.

The Directors have identified a revenue generating UK-based private Company in the healthcare sector (the "Target") being a company which fits this investment strategy and expect to be in a position to enter into a binding agreement to acquire the Target shortly after the Company is due to be admitted to AIM. The proposed acquisition constitutes a reverse takeover pursuant to AIM Rule 14. In the event that the Company and the Target are unable to agree definitive terms then the Directors will identify and pursue other suitable acquisition opportunities which meet the criteria set out in the Company's investing policy.

The Company's Existing Ordinary Shares are currently suspended and will not be restored until such time as the Company publishes the AIM Admission Document (or equivalent) in connection with the proposed acquisition of the Target or discussions with the Target are terminated. Should the Company not be so restored within six months of Admission, then the Company's AIM securities will be cancelled from trading on AIM in the normal course pursuant to AIM Rule 41.

The Directors identified the Target as being a company which fits its investment strategy and expects to be in a position to enter into a binding agreement to acquire the target shortly after Admission. Under the AIM Rules the Company will still require Shareholder approval for the proposed acquisition of the Target and the requisite documentation is expected to be sent to Shareholders in due course.

 In the event that the Company and the Target are unable to agree definitive terms then the Directors will identify and pursue other suitable acquisition opportunities although there can be no assurance that the Company will be successful in identifying or, where identified, executing successful acquisition opportunities.

Within 12 months from the date of Admission to AIM, under the provisions of AIM Rule 9 the Company will be required to undertake one of the following, either:

(i) to complete an acquisition which constitutes a reverse takeover under AIM Rule 14; or

(ii) to implement the Investing Policy to the satisfaction of the London Stock Exchange; or

(iii) to complete an equity fundraise of no less than £3 million so as to fully satisfy the requirements of AIM Rule 8.

Should the Company not satisfy at least one of the required actions in (i), (ii) or (iii) above within 12 months of Admission, the Exchange may suspend trading in the Company's AIM securities pursuant to AIM Rule 40 for the Company's failure to comply with the special condition imposed by AIM Rule 9. Should the Company's AIM securities not be restored to trading within six months of such suspension, the Company's AIM securities will cancelled from trading on AIM in the normal course pursuant to AIM Rule 41. In respect of such suspension, a restoration event will be the satisfaction of at least one of either (i), (ii) or (iii) above.

For further details, please see the Appendix to this announcement. The Appendix is available at www.phytopharm.com

DETAILS OF SECURITIES TO BE ADMITTED INCLUDING ANY RESTRICTIONS AS TO TRANSFER OF THE SECURITIES (i.e. where known, number and type of shares, nominal value and issue price to which it seeks admission and the number and type to be held as treasury shares):

6,938,031 Ordinary Shares of fifty pence each

CAPITAL TO BE RAISED ON ADMISSION (IF APPLICABLE) AND ANTICIPATED MARKET CAPITALISATION ON ADMISSION:

No capital to be raised on Admission.

The Company's shares are currently suspended from trading as a result of the announcement of agreeing heads of terms with the Target on 21 May 2013.

At the close of business the day before the shares were suspended, the Company's market capitalisation was around £4.6 million, which is the anticipated market capitalisation on Admission.

PERCENTAGE OF AIM SECURITIES NOT IN PUBLIC HANDS AT ADMISSION:

56.39% of Ordinary Shares are not in public hands

DETAILS OF ANY OTHER EXCHANGE OR TRADING PLATFORM TO WHICH THE AIM COMPANY HAS APPLIED OR AGREED TO HAVE ANY OF ITS SECURITIES (INCLUDING ITS AIM SECURITIES) ADMITTED OR TRADED:

N/A

FULL NAMES AND FUNCTIONS OF DIRECTORS AND PROPOSED DIRECTORS (underlining the first name by which each is known or including any other name by which each is known):

FULL NAMES AND HOLDINGS OF SIGNIFICANT SHAREHOLDERS EXPRESSED AS A PERCENTAGE OF THE ISSUED SHARE CAPITAL, BEFORE AND AFTER ADMISSION (underlining the first name by which each is known or including any other name by which each is known):

NAMES OF ALL PERSONS TO BE DISCLOSED IN ACCORDANCE WITH SCHEDULE 2, PARAGRAPH (H) OF THE AIM RULES:

None

(i) ANTICIPATED ACCOUNTING REFERENCE DATE

(ii) DATE TO WHICH THE MAIN FINANCIAL INFORMATION IN THE ADMISSION DOCUMENT HAS BEEN PREPARED (this may be represented by unaudited interim financial information)

(iii) DATES BY WHICH IT MUST PUBLISH ITS FIRST THREE REPORTS PURSUANT TO AIM RULES 18 AND 19:

(i) 30 September

(ii) 31 March 2013

(iii) Annual report for the year ended 30 September 2013 to be published by 31 March 2014

Half yearly report for the six months ended 31 March 2014 to be published by 30 June 2014

Annual report for the year ended 30 September 2014 to be published by 31 March 2015

EXPECTED ADMISSION DATE:

3 September 2013

NAME AND ADDRESS OF NOMINATED ADVISER:

Peel Hunt LLP

Moor House

120 London Wall

London

EC2Y 5ET

NAME AND ADDRESS OF BROKER:

Peel Hunt LLP

Moor House

120 London Wall

London

EC2Y 5ET

OTHER THAN IN THE CASE OF A QUOTED APPLICANT, DETAILS OF WHERE (POSTAL OR INTERNET ADDRESS) THE ADMISSION DOCUMENT WILL BE AVAILABLE FROM, WITH A STATEMENT THAT THIS WILL CONTAIN FULL DETAILS ABOUT THE APPLICANT AND THE ADMISSION OF ITS SECURITIES:

N/A

DATE OF NOTIFICATION:

6 August 2013

NEW/ UPDATE:

New

QUOTED APPLICANTS MUST ALSO COMPLETE THE FOLLOWING:

THE NAME OF THE AIM DESIGNATED MARKET UPON WHICH THE APPLICANT'S SECURITIES HAVE BEEN TRADED:

The Company's Ordinary Shares have been traded on the Main Market of the London Stock Exchange plc.

THE DATE FROM WHICH THE APPLICANT'S SECURITIES HAVE BEEN SO TRADED:

26 April 1996

CONFIRMATION THAT, FOLLOWING DUE AND CAREFUL ENQUIRY, THE APPLICANT HAS ADHERED TO ANY LEGAL AND REGULATORY REQUIREMENTS INVOLVED IN HAVING ITS SECURITIES TRADED UPON SUCH A MARKET OR DETAILS OF WHERE THERE HAS BEEN ANY BREACH:

Phytopharm, having made due and careful enquiry, confirms that as at the date hereof it has adhered to the legal and regulatory requirements involved in having its securities traded on the Main Market of the London Stock Exchange Plc. In 2010, the Company received a private warning letter from the Financial Services Authority (now Financial Conduct Authority) considering a potential breach of the Disclosure & Transparency Rules and Listing Rules. The private warning letter did not amount to a formal determination of a breach but forms a part of Phytopharm's compliance history and constitutes a private warning in accordance with paragraphs 7.10 - 7.19 of the Enforcement Guide.

AN ADDRESS OR WEB-SITE ADDRESS WHERE ANY DOCUMENTS OR ANNOUNCEMENTS WHICH THE APPLICANT HAS MADE PUBLIC OVER THE LAST TWO YEARS (IN CONSEQUENCE OF HAVING ITS SECURITIES SO TRADED) ARE AVAILABLE:

www.phytopharm.com

DETAILS OF THE APPLICANT'S STRATEGY FOLLOWING ADMISSION INCLUDING, IN THE CASE OF AN INVESTING COMPANY, DETAILS OF ITS INVESTING STRATEGY:

It is the intention of the Directors of the Company that following Admission of Phytopharm to AIM, the business of the Company will be continued in the same manner as set out above.

A DESCRIPTION OF ANY SIGNIFICANT CHANGE IN FINANCIAL OR TRADING POSITION OF THE APPLICANT, WHICH HAS OCCURRED SINCE THE END OF THE LAST FINANCIAL PERIOD FOR WHICH AUDITED STATEMENTS HAVE BEEN PUBLISHED:

There has been no significant change in the financial or trading position of the Company since 31 March 2013

A STATEMENT THAT THE DIRECTORS OF THE APPLICANT HAVE NO REASON TO BELIEVE THAT THE WORKING CAPITAL AVAILABLE TO IT OR ITS GROUP WILL BE INSUFFICIENT FOR AT LEAST TWELVE MONTHS FROM THE DATE OF ITS ADMISSION:

The Directors of Phytopharm have no reason to believe that the working capital available to the Company, or its Group, will be insufficient for at least 12 months from the date of its admission to AIM.

DETAILS OF ANY LOCK-IN ARRANGEMENTS PURSUANT TO RULE 7 OF THE AIM RULES:

None

A BRIEF DESCRIPTION OF THE ARRANGEMENTS FOR SETTLING THE APPLICANT'S SECURITIES:

The securities are eligible for electronic settlement via CREST

A WEBSITE ADDRESS DETAILING THE RIGHTS ATTACHING TO THE APPLICANT'S SECURITIES:

www.phytopharm.com

INFORMATION EQUIVALENT TO THAT REQUIRED FOR AN ADMISSION DOCUMENT WHICH IS NOT CURRENTLY PUBLIC:

As set out in the Appendix to this announcement. The Appendix is available at www.phytopharm.com

A WEBSITE ADDRESS OF A PAGE CONTAINING THE APPLICANT'S LATEST ANNUAL REPORT AND ACCOUNTS WHICH MUST HAVE A FINANCIAL YEAR END NOT MORE THEN NINE MONTHS PRIOR TO ADMISSION AND INTERIM RESULTS WHERE APPLICABLE. THE ACCOUNTS MUST BE PREPARED IN ACCORDANCE WITH ACCOUNTING STANDARDS PERMISSIBLE UNDER AIM RULE 19:

www.phytopharm.com

THE NUMBER OF EACH CLASS OF SECURITIES HELD IN TREASURY:

None