REG - Checkit PLC Crimson Tide PLC - Recommended All-Share Merger with Crimson Tide

Crimson TideAnnouncement

11/02/2025 07:15

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RNS Number : 5963W  Checkit PLC  11 February 2025

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET
ABUSE REGULATION NO. 596/2014 (AS INCORPORATED INTO UK LAW BY VIRTUE OF THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018 AS AMENDED BY VIRTUE OF THE MARKET ABUSE
(AMENDMENT) (EU EXIT) REGULATIONS 2019). UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

 

11 February 2025

 

Recommended Merger

 

of

 

Crimson Tide plc ("Crimson Tide") with Checkit plc ("Checkit")

to be effected by way of a scheme of arrangement

under Part 26 of the Companies Act 2006

 

Summary

 

The boards of Checkit and Crimson Tide are pleased to announce that they have
reached agreement on the terms of a recommended all-share merger (the
"Merger") pursuant to which Checkit will acquire the entire issued and to be
issued share capital of Crimson Tide. The Merger is to be effected by means of
a Court-sanctioned scheme of arrangement between Crimson Tide and Crimson Tide
Scheme Shareholders under Part 26 of the Companies Act 2006.

 

Under the terms of the Merger, each Crimson Tide Scheme Shareholder would
receive:

 

For each Crimson Tide Share: 6 Checkit Shares

 

Under the terms of the Merger, Crimson Tide Scheme Shareholders will receive
six new Checkit Shares (the "Exchange Ratio"). Immediately following
Completion, Crimson Tide Scheme Shareholders will own approximately 26.8 per
cent. of the issued share capital of Checkit (based on the existing issued
share capital of Checkit and the fully diluted share capital of Crimson Tide
as at 10 February 2025, being the latest practicable date prior to the
publication of this Announcement).

 

The Exchange Ratio has been based in all material respects on the ratio of
Checkit's current annual recurring revenues ("ARR") relative to Crimson
Tide's. Based on Checkit's middle market closing price of 16.5 pence per
Checkit Share on 10 February 2025 (being the last practicable date prior to
publication of this Announcement), the Exchange Ratio represents an implied
value of 99 pence per Crimson Tide Share and values the entire issued share
capital of Crimson Tide at approximately £6.5 million.

 

Checkit reserves the right to reduce the Exchange Ratio by the amount of any
dividend (or any distribution) which is paid or becomes payable by Crimson
Tide to its shareholders following this Announcement.

 

The directors of Checkit and Crimson Tide believe that combining the two
companies will create a strong, scaled business, with the platform to
accelerate delivery of their strategic objectives and an opportunity for both
sets of shareholders to share in the benefits accruing to the Combined Group
via the expected realisation of cost and revenue synergies.

 

1.    Background to and reasons for the Merger

Background to the Merger

The Checkit Board has for a long time considered there to be compelling
strategic and financial reasons for a business combination of Checkit with
Crimson Tide and at various times over the last four years engaged in
discussions with the Crimson Tide Board.

In January 2024, the Checkit Board submitted an indicative non-binding
proposal to the Crimson Tide Board regarding an all-share merger. As a result
of the Crimson Tide Board's rejection of such proposal, the Checkit Board
published the Possible Offer Announcement on 4 June 2024 to facilitate direct
discussions with shareholders of both Crimson Tide and Checkit.

On 21 June 2024 the Crimson Tide Board announced that it had received a
conditional and non-binding proposal from Ideagen Limited regarding a possible
cash offer for Crimson Tide. Consequently, on 26 June 2024 the Checkit Board
announced that it no longer intended to make an offer to acquire Crimson Tide.

On 11 July 2024 the Crimson Tide Board announced that Ideagen Limited no
longer intended to make an offer for Crimson Tide. Following Ideagen Limited's
withdrawal of interest, the Boards of Crimson Tide and Checkit re-engaged in
discussions regarding the possible benefits of combining the two businesses
and have since been engaged in constructive mutual due diligence ahead of this
Announcement.

In agreeing the terms of the Merger, the Boards of Crimson Tide and Checkit
have calculated the Exchange Ratio based in all material respects on the ratio
of Checkit's current ARR relative to Crimson Tide's.

Reasons for the Merger and strategic rationale

The Boards of Checkit and Crimson Tide believe that the combination of their
companies presents a compelling strategic opportunity to create a market
leader in workflow software solutions, also providing a boost to Checkit's own
strategic objectives and a range of benefits to all shareholders of the
Combined Group. The key aspects of their rationale for the combination of the
two businesses are set out in further detail below.

Strong Checkit management team with a track record of delivery to be enhanced
by members of Crimson Tide management

Checkit's management team has proven its ability to deliver against its growth
strategy:

·   Accelerating US market growth;

·   Scaling existing customers by upselling and cross-selling;

·   Expanding its presence in the existing verticals it operates in and
into new growth markets;

·   Growing recurring subscription revenues;

·   Driving operating efficiency to accelerate path to profitability; and

·   Investing in R&D to drive value creation opportunities.

Checkit's revenue for the year ended 31 January 2025 ("FY25") was £14.0
million (31 January 2024: £12.0 million), representing a year-on-year
increase of 17%, as Checkit continues to see strong growth opportunities in
the US, where revenues increased by approximately 21%. New booking momentum
was strong in the year with £2.1 million of sales booked in the twelve months
to 31 January 2025, a 39% year-on-year increase. ARR as at 31 January 2025 was
£14.4 million and cash was approximately £5.1 million.

Checkit believes that its management team will be enhanced by the addition of
members of the Crimson Tide management team and further details are set out
below.

Provision of enhanced product offering to customers of the Combined Group

The Boards of Checkit and Crimson Tide believe that the combination of Crimson
Tide and Checkit's product sets will, in due course, provide an enhanced
offering that will benefit both companies' customers. By leveraging Checkit's
enhanced research and development and recognised go-to-market capabilities,
the Combined Group will be able to benefit from the integration of Crimson
Tide's solutions while also expanding the product set available to sell to
both new and existing customers. Crimson Tide has stated its ambition to
expand its IoT sensor offering and there is an opportunity to leverage
Checkit's significant expertise in this area to accelerate these expansion
plans, providing a technological edge and streamlining the integration
process.

Checkit's strategy has been to focus on increasing market share and driving
profitable growth. Its successful land and expand strategy has enhanced its
customer base and delivered year on year revenue growth. The success of its
long term growth strategy, focusing on expanding verticals and geographies, is
demonstrated by the growth in revenues that it has achieved in the key US
market. In addition, Checkit has delivered a 36% compound annual growth rate
("CAGR") in ARR since 2020, providing good visibility over future revenues and
accelerating its path to net cash generation.

Checkit has demonstrated that its products are essential for daily workflow
and operations and boost productivity, reduce costs and ensure compliance for
its clients. In FY25, Checkit significantly enhanced its product offering by
launching Asset Intelligence, its AI/ML analytics platform that provides data
insights that will enhance the return on investment on its products.

The Boards of Checkit and Crimson Tide believe that Checkit's successful land
and expand strategy can be applied to Crimson Tide's existing customer base to
accelerate profitable cash generative growth for the Combined Group. Checkit's
go-to-market approach of securing blue chip customers with entry size deals,
which are then expanded over time providing additional sales and innovative
services, can be applied to Crimson Tide's business model to fuel growth. This
will enable the Combined Group to better cultivate mid to large size deals
within its existing customer base and generate new organic growth
opportunities in focussed verticals.

By implementing a rigorous and systematic approach to pipeline generation, the
Combined Group would benefit from a more efficient sales cycle, enabling
faster revenue generation. Checkit's unique ability to harness customer data
enables deeper insights into customer productivity challenges and will allow
customers of the Combined Group to benefit from the development of targeted
machine learning and artificial intelligence modules that can complement the
core product set.

The benefits of this approach are clear. By offering Crimson Tide's range of
bespoke solutions along with Checkit's scalable products, the Combined Group
will differentiate itself in the market and meet specific customer needs more
effectively. This tailored approach can lead to higher customer satisfaction
and loyalty, as well as open new revenue streams. Overall, the combination of
Crimson Tide and Checkit's product sets, enhanced by Checkit's strategic
initiatives, will create a more robust and competitive company with greater
growth potential and long-term stability.

Substantial cross-selling and upselling opportunities to customers from a
combination of the two businesses, thereby enhancing competitive standing of
the Combined Group in a fragmented workflow management systems market over $17
billion in size

The combination of Checkit and Crimson Tide would present substantial
opportunities for cross-selling and upselling Checkit's product suite to
Crimson Tide's customer base and vice versa. Crimson Tide's established
presence in sectors such as logistics, transportation, healthcare, and retail
align well with Checkit's market focus and growth strategy. This alignment not
only expands the verticals for the Combined Group but also supports a unified
approach to scaling in the US, where Checkit is already well established with
a direct sales team delivering 27% of group ARR.

The ability to offer a broader range of products to customers will allow the
Combined Group to position itself as a one-stop shop in a large market,
offering integrated solutions that enable inherent efficiency benefits to
existing customers whilst opening up further opportunities in new verticals
and geographies. This approach, combined with Checkit's innovative use of
customer data, will enable the acceleration of growth, and enhance the
long-term prospects of the Combined Group.

The combination would enhance the enlarged entity's position in the workflow
software solutions market, thereby leveraging the strengths of both
organisations for an enhanced competitive advantage.

The market for workflow management systems was valued at US$17.1 billion in
2024 and is expected to generate a CAGR of 33.5% between 2024 and 2034 1 
(#_ftn1) . Growth in the sector will be driven by innovation and the
exploitation of data for management information. With the launch of Asset
intelligence, Checkit is well positioned to benefit from this market trend and
applying these insights to Crimson Tide's more bespoke product offering will
bring further benefits and growth opportunities to the Combined Group.

Opportunity to realise synergies from a combination of the two businesses

Under the leadership of the Checkit management team with support from Crimson
Tide management, the Combined Group is expected to benefit from significant
synergies, efficiencies and growth opportunities:

·    Revenue Synergies: The integration of Checkit and Crimson Tide is
expected to unlock revenue synergies from cross-selling and upselling
opportunities. By leveraging Checkit's product suite within Crimson Tide's
established sectors such as logistics, transportation, healthcare and retail
and vice versa, there is the opportunity to drive additional revenue. Offering
more comprehensive solutions to existing customers where there is currently no
significant degree of overlap between the two companies such as Tesco,
Morrisons, Bookers and the NHS should enhance the value proposition and
increase the sales opportunity. It will also open further opportunities to
expand the addressable market via new verticals and geographies.

·    Cost Synergies: In order to unlock the significant potential upside
from a combination of the two businesses, Checkit management has identified
staff and non-staff cost savings in the Combined Group. Elimination of
duplicate costs associated with two listings on the London Stock Exchange will
provide savings alongside the consolidation of some staff and non-staff
functions in sales and marketing, product development, administration and
operations which will streamline operations over time and lead to a more
efficient and cost-effective organisational structure.

·    Accelerated Growth for Crimson Tide: Applying Checkit's proven
go-to-market strategies, which include both land and expand tactics, and
organic growth initiatives, is expected to accelerate Crimson Tide's growth.
Checkit's higher ARR growth rate demonstrates its capability to drive revenue
expansion effectively. Implementing these strategies within Crimson Tide
provides an opportunity to increase Crimson Tide's market penetration and rate
of revenue growth.

·    Enhanced Financial Standing: The Combined Group would, immediately
following Completion, boast an ARR of increased scale and a pro forma cash
balance (before deal costs) of approximately £7.2 million with the potential
for significant future net cash generation. Once profitable, the Combined
Group is also expected to grow its profitability faster than either company
could as standalone businesses. This enhanced financial position would not
only provide stability but also enable strategic investments in innovation and
expansion, further reinforcing the Combined Group's financial standing. The
robust financial health of the Combined Group should increase investor
confidence and provide a solid foundation for sustained long-term profitable
growth.

The Combined Group should be a more attractive investment proposition to
existing and potential new shareholders

The Boards of Checkit and Crimson Tide believe that the Combined Group with
its increased scale and enhanced financial standing would present a more
attractive investment opportunity for existing and potential shareholders than
either business remaining as standalone entities. The Boards of Checkit and
Crimson Tide believe that this, along with the significant potential revenue
and cost synergies identified, could result in the Combined Group attracting a
wider pool of investors and consequently being attributed higher valuation
multiples by the market than either standalone company could reasonably expect
to command. A broader investor base could also reasonably be expected to
increase liquidity for existing and potential investors.

For the reasons set out above, the Boards of Checkit and Crimson Tide believe
that the strategic and financial rationale for the Merger is compelling, in
the best interests of both companies' respective shareholders and provides
significant opportunities for enhanced value for both sets of shareholders.

2.    Board and management of the Combined Group

 

Subject to Completion, it is proposed that, following the Effective Date, the
Checkit Board will comprise:

 

·    Keith Daley, currently Non-Executive Chairman of Checkit, who will
remain Non-Executive Chairman of Checkit;

·    Kit Kyte, currently Chief Executive Officer of Checkit, who will
remain Chief Executive Officer of Checkit;

·    Kris Shaw, currently Chief Financial Officer of Checkit, who will
remain Chief Financial Officer of Checkit;

·    Alex Curran, currently Non-Executive Director of Checkit, who will
remain Non-Executive Director of Checkit; and

·    Jacqueline Daniell, currently Non-Executive Chairman of Crimson Tide,
who will join the Checkit Board as a Non-Executive Director.

 

Upon completion of the Merger, the other Non-Executive Directors of Crimson
Tide would be expected to resign and from that point cease to be directors of
Crimson Tide. The executive directors of Crimson Tide are expected to resign
from their roles as directors of Crimson Tide but will be appointed to the
following senior management roles within the Combined Group:

 

·    Phil Meyers, currently Chief Executive Officer of Crimson Tide, will
be appointed as global Chief Operating Officer of the Combined Group;

·    Luke Jeffrey, currently Chief Technology Officer of Crimson Tide,
will be appointed as Chief Technology Officer of the Combined Group; and

·    Peter Hurter, currently Chief Financial Officer of Crimson Tide, will
be appointed as head of the integration process of Crimson Tide into Checkit
and will be employed by the Combined Group for a period to be agreed from
Completion.

 

3.    Current trading

Current trading of Checkit

Checkit's revenue for the year ended 31 January 2025 ("FY25") was £14.0
million (31 January 2024: £12.0 million), representing a year-on-year
increase of 17%, as Checkit continues to see strong growth opportunities in
the US, where revenues increased by approximately 21%.

New booking momentum was strong in the year with £2.1 million of sales booked
in the twelve months to 31 January 2025, a 39% year-on-year increase.
Expansion revenue from existing customers continues to drive the majority of
revenue growth, complemented by several key new customer wins that are
expected to provide further expansion opportunities in the coming years. New
customer signings in both the UK and US have strengthened Checkit's growing
care home use case, while additional wins in Checkit's core blood plasma and
hospitality verticals offer further land and expand opportunities. As noted in
its interim results to 31 July 2024, Checkit's sales performance in FY25 was
partly impacted by the non-renewal of low margin and non-core business, but
taking into account the growth in sales bookings, ARR as at 31 January 2025
was £14.4 million and cash was approximately £5.1 million.

By increasing revenue whilst maintaining gross margin and cost control, strong
progress towards the Company's longer-term financial objectives including its
path to profitability using its existing financial resources has been
maintained in FY25, with overall trading and year end cash in line with Board
expectations.

Current trading of Crimson Tide

Crimson Tide was pleased in its interim results for the six months to 30 June
2024 ("Crimson Tide FY24 Interims") to report revenue up 3.3% to £3.14m (H1
2023: £3.04m), EBITDA up c209% at £0.33m (H1 2023: £0.11m) and gross
margins of 88.2%, up nearly 4 percentage points on the prior year.  Crimson
Tide has at the same time increased ARR to £5.94m (FY2023: £5.75m) with cash
reserves healthy at £2.5m (H1 2023: £2.9m).  Crimson Tide has and will
continue to develop and invest in the core mpro5 product such that the product
is in the best shape possible, and the Board is confident in its competitive
advantage and market readiness.

Crimson Tide further referred to these achievements coming despite the impact
of two key client losses in the prior year, both occasioned by factors beyond
its control, and the distraction of two unsolicited takeover bids. Crimson
Tide also indicated execution risks arising from the limitations of capacity
in sales areas, against which investment was being made, and a market-wide
pattern of opportunities going to competitive tender and sales cycles
generally becoming extended, a feature which has persisted during the second
half of FY24.

The Company has continued to trade in line with the Board's expectations since
the date of the Crimson Tide FY24 Interims with the second half of the year
unfolding as envisaged, with ARR at the year-end of approximately £5.2m and
cash of approximately £2.1m.  As predicted Crimson Tide experienced further
ARR churn in the second half as certain covid-era deals came to an end, though
the Crimson Tide Board has taken action to adjust Crimson Tide's cost base in
response to changes in its sales cycle and customer requirements, incurring
some exceptional costs in doing so, but has been disciplined to ensure that
the Company's commitment to ongoing investment in capacity or product was not
prejudiced.

Notwithstanding the performance of the business since the FY24 interims the
Crimson Tide Board believes that in the current economic climate client buying
behaviour is unlikely to improve in the short term, with sales cycles only
likely to become more protracted, however well invested the mpro5 platform may
be.  With that in mind the Crimson Tide Board sees little scope to make
top-line progress during the current financial year, with any growth not now
anticipated until FY26.

4.    Recommendations

Crimson Tide

The Crimson Tide Directors, who have been so advised by Cavendish as to the
financial terms of the Merger, unanimously consider the terms of the Merger to
be fair and reasonable. In providing advice to the Crimson Tide Directors,
Cavendish has taken into account the commercial assessments of the Crimson
Tide Directors. Cavendish is providing independent financial advice to the
Crimson Tide Directors for the purposes of Rule 3 of the Takeover Code.

 

Accordingly, the Crimson Tide Directors intend to recommend unanimously that
Crimson Tide Scheme Shareholders vote in favour of the Scheme at the Crimson
Tide Court Meeting and that Crimson Tide Shareholders vote in favour of the
Crimson Tide Resolution to be proposed at the Crimson Tide General Meeting.

Checkit

In order to implement the Merger, Checkit will require the approval of the
Checkit Shareholders to allot the New Checkit Shares at the Checkit General
Meeting. The Merger is accordingly conditional on such approval being
obtained.

 

The Checkit Directors consider the Merger to be in the best interests of
Checkit Shareholders as a whole and accordingly intend to recommend
unanimously that Checkit Shareholders vote in favour of the Checkit Resolution
to be proposed at the Checkit General Meeting.

 

5.    Irrevocable Undertakings & Letters of Intent

In respect of the Crimson Tide Shareholder Meetings

The Crimson Tide Directors who are interested in Crimson Tide Shares have
irrevocably undertaken to vote (or procure votes) in favour of the Scheme at
the Crimson Tide Court Meeting and in favour of the Crimson Tide Resolution to
be proposed at the Crimson Tide General Meeting, in respect of their own
beneficial holdings (or the holdings of certain persons connected with them)
of 90,858 Crimson Tide Shares representing, in aggregate, approximately 1.38
per cent. of Crimson Tide's issued ordinary share capital as at the close of
business on the Latest Practicable Date.

 

In addition, Checkit has received an Irrevocable Undertaking to vote in favour
of the Scheme at the Crimson Tide Court Meeting and to vote in favour of the
Crimson Tide Resolution to be proposed at the Crimson Tide General Meeting in
respect of 347,666 Crimson Tide Shares, being approximately 5.29 per cent. of
Crimson Tide Shares in issue as at 10 February 2025 (being the latest
practicable date prior to the publication of this Announcement).

 

Checkit has also received non-binding letters of support to vote in favour of
the Crimson Tide Resolution to be proposed at the Crimson Tide General
Meeting, in respect of 1,358,333 Crimson Tide Shares representing, in
aggregate, approximately 20.66 per cent. of Crimson Tide's issued ordinary
share capital as at the close of business on the Latest Practicable Date.

 

Checkit has therefore received Irrevocable Undertakings and letters of intent
to vote in favour of the Crimson Tide Resolution in respect of a total number
of 1,796,857 Crimson Tide Shares representing, in aggregate, approximately
27.33 per cent. of Crimson Tide's issued ordinary share capital as at the
close of business on the Latest Practicable Date.

 

The Irrevocable Undertakings summarised above, inter alia, prohibit the
Shareholders concerned from selling all or any part of their holdings of
Crimson Tide Shares to anyone other than Checkit and, in the case of the
Irrevocable Undertakings given by Crimson Tide Directors, remain binding in
the event of any competing offer. All of the Irrevocable Undertakings will
cease to be binding if the Merger lapses or is otherwise withdrawn. The
Irrevocable Undertaking from a shareholder which is not a Crimson Tide
Director will also lapse if, within ten business days after the despatch of
the Scheme Document, a third party announces a firm intention to make an offer
to acquire all the issued and to be issued equity share capital of Crimson
Tide for a consideration per share which represents at least 10 per cent.
greater than the value of the consideration per share available under the
Merger as at the date of such announcement and Checkit does not within 14
business days of such announcement increase the consideration payable under
the Merger to an amount which is equal to or exceeds the value of such third
party offer.

In respect of the Checkit General Meeting

The Checkit Directors intend to give Irrevocable Undertakings to vote (or
procure votes) in favour of the Checkit Resolution to be proposed at the
Checkit General Meeting in respect of their own beneficial holdings (or the
holdings of certain persons connected with them) of 21,966,976 Checkit Shares
representing, in aggregate, approximately 20.34 per cent. of Checkit's issued
ordinary share capital as at the close of business on the Latest Practicable
Date.

 

Further details of these Irrevocable Undertakings and letters of intent are
set out in Appendix III of this Announcement.

 

6.    Merger Structure & Conditions

 

The Merger is expected to be effected by means of a Court-sanctioned scheme of
arrangement between Crimson Tide and Crimson Tide Scheme Shareholders under
Part 26 of the Companies Act 2006, further details of which are contained in
the full text of this Announcement (and will be included in the Scheme
Document). Checkit also reserves the right to implement the Merger by way of a
Takeover Offer, subject to the Panel's consent.

 

The Merger will also be subject to the conditions and further terms set out in
Appendix I to this Announcement and to be set out in the Scheme Document. The
Conditions include:

 

(i)               the approval by the requisite majorities of,
respectively, the Crimson Tide Scheme Shareholders and Crimson Tide
Shareholders of (A) the Scheme at the Court Meeting and (B) the Crimson Tide
Resolution at the Crimson Tide General Meeting;

 

(ii)              the sanction of the Scheme by the Court;

 

(iii)             an ordinary resolution granting the Checkit
Directors' authority to issue the New Checkit Shares to be issued in
connection with the Merger being proposed at the Checkit General Meeting and
passed (without amendment); and

 

(iv)            the London Stock Exchange having acknowledged to
Checkit or its agent (and such acknowledgement not having been withdrawn) that
the New Checkit Shares will be admitted to trading on AIM;

 

Further details relating to these conditions are set out in paragraph 9 of the
second part of this Announcement.

 

It is expected that the Scheme Document (including notices of the Crimson Tide
Shareholder Meetings) together with the relevant Crimson Tide Forms of Proxy
will be sent to Crimson Tide Shareholders within 28 days of the date of this
Announcement (or on such later date as may be agreed by Checkit and Crimson
Tide with the consent of the Panel).

 

It is expected that the Checkit Circular, which will contain a notice of the
Checkit General Meeting, will be published and mailed to Checkit Shareholders
at or around the same time as the Scheme Document is posted to Crimson Tide
Shareholders.

 

The Scheme Document and the Checkit Circular will each be made available by
Checkit on its website at www.checkit.net and by Crimson Tide on its website
at www.crimsontide.co.uk.

 

The Scheme Document and Checkit Circular will contain details of the dates,
times and locations of the Crimson Tide Shareholder Meetings and Checkit
General Meeting. The Scheme is expected to be Effective in the second quarter
of 2025, subject to satisfaction or (where applicable) waiver of the
Conditions and certain further terms set out in Appendix I to this
Announcement.

Listing & Trading of Crimson Tide Shares and Checkit Shares

Crimson Tide Shares are admitted to trading on the London Stock Exchange's AIM
market. Subject to Completion, it is intended that application will be made
for the cancellation of trading of the Crimson Tide Shares on the London Stock
Exchange's AIM market to take effect on or shortly after the Effective Date.
Crimson Tide is also expected to be re-registered as a private company after
Completion.

 

Checkit will seek approval for the New Checkit Shares to be admitted to
trading on the London Stock Exchange's AIM market alongside the existing
Checkit Shares.

 

7.    About Crimson Tide

 

Crimson Tide is the provider of mpro5, the process management app. mpro5 is
delivered on all modern devices and enables organisations to digitally
transform their business with a view to improving customer experience, safety
and compliance and operational efficiency.  In doing so Crimson Tide is able
to help customers overcome inefficiencies, unlocking substantial cost savings
and productivity gains whilst strengthening customer workforces with smart
mobile working.  Integrating with IoT sensors (such as temperature, or
humidity) mpro5 provides customers with a strong data foundation enabling them
to make informed and actionable decisions about their day to day operations.

 

Crimson Tide is trusted by businesses across a wide variety of verticals
including facilities management, transportation, catering, retail and
healthcare estates and is currently deployed in over 260,000 sites in 11
countries.

 

mpro5 offers Crimson Tide's customers a highly scalable and secure solution
and is typically provided on a long term contracted monthly subscription
basis, whilst the Crimson Tide team is able to provide maintenance and
customer specific adaptations of the solution, allowing organisations to
further refine, automate and adapt their processes to maximise efficiency and
return on their investment in mpro5.

 

8.    About Checkit

 

Checkit is the augmented workflow solution for frontline workers and smart
sensor automation, enabling large multinational and complex organisations to
operate more safely, efficiently and sustainably - driving them towards
achieving intelligent operations.

 

Checkit has hundreds of customers across the globe, including Global Fortune
500 and public health organisations. Checkit's customers are digitising their
manual processes through Checkit's highly customisable workflow software and
top-of-the-line Internet of Things (IoT) sensors, increasingly aided by
Machine Learning and AI. More than 12 billion sensor readings and millions of
completed workflows per year are sent through Checkit's platform enabling
customers to become more efficient, ensure safety and deliver complete
operational visibility.

 

This summary should be read in conjunction with, and is subject to, the full
text of this Announcement and the Appendices. The Merger will be subject to
the satisfaction or, where applicable, waiver of the Conditions and certain
further terms set out in Appendix I to this announcement and to the full terms
and conditions to be set out in the Scheme Document. Appendix II to this
announcement contains sources of information and bases of calculations of
certain information contained in this Announcement. A summary of the
Irrevocable Undertakings and letters of intent received by Checkit in relation
to the Merger is set out in Appendix III to this announcement. Further details
of the FY25 Checkit Profit Estimate and the FY24 Crimson Tide Profit Estimate
are set out in Appendix IV to this Announcement. Certain terms used in this
summary and this Announcement are defined in Appendix V to this Announcement.

 

The individual responsible for releasing this announcement is Kit Kyte, Chief
Executive Officer of Checkit.

 

Enquiries:

 Checkit plc                                                                     +44 (0) 1223 643313
 www.Checkit.net
 Kit Kyte (Chief Executive Officer)
 Kris Shaw (Chief Financial and Operations Officer)

 Singer Capital Markets (Financial Adviser, Nominated Adviser & Broker to        +44 (0) 20 7496 3000
 Checkit)
 Shaun Dobson / Peter Steel / James Fischer

 Yellowstone Advisory (Investor Relations)                                       +44 (0) 203 951 8907
 Alex Schlich                                                                    alex@yellowstoneadvisory.com

 Crimson Tide plc                                                                +44 1892 542444
 www.Crimson Tide.com
 Jacqueline Daniell (Chair)

 Phil Meyers (Chief Executive Officer)
 Peter Hurter (Chief Financial Officer)

 Cavendish Capital Markets (Financial Adviser, Nominated Adviser, Rule 3         +44 (0) 20 7220 0500
 Adviser and Corporate Broker to Crimson Tide)
 Julian Blunt / Henrik Persson / Dan Hodkinson - Corporate Finance
 Andrew Burdis / Harriet Ward - Corporate Broking

 Alma PR (Financial PR)                                                          +44 (0) 7780 901979
 Josh Royston

 

 

Important notices relating to financial advisers

 

Singer Capital Markets Advisory LLP, which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting as Financial
Adviser, Nominated Adviser and Broker exclusively for Checkit and no-one else
in connection with the matters set out in this announcement and will not
regard any other person as their client in relation to such matters and will
not be responsible to anyone other than Checkit for providing the protections
afforded to clients of Singer Capital Markets nor for providing advice in
relation to the Merger or any matter referred to in this announcement.

 

Cavendish Capital Markets Limited, which is authorised and regulated by the
Financial Conduct Authority in the United Kingdom, is acting exclusively for
Crimson Tide and for no one else in connection with the subject matter of this
Announcement and will not be responsible to anyone other than Crimson Tide for
providing the protections afforded to clients of Cavendish or for providing
advice in relation to the contents of this Announcement or any matters
referred to in this Announcement.

 

Further information

 

This Announcement is for information purposes only. It is not intended to and
does not constitute, or form part of, any offer, invitation or the
solicitation of an offer to purchase, otherwise acquire, subscribe for, sell
or otherwise dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the Merger or otherwise, nor shall
there be any sale, issuance or transfer of securities of Crimson Tide pursuant
to the Merger or otherwise in any jurisdiction in contravention of applicable
law. The Merger will be implemented solely by means of the Scheme Document
(or, in the event that the Merger is to be implemented by means of a Takeover
Offer, the offer document) which will contain the full terms and conditions of
the Merger, including details of how to vote in respect of the Merger (or, in
the case of a Takeover Offer, to accept the offer).

 

Crimson Tide will prepare the Scheme Document to be distributed to Crimson
Tide Shareholders. Crimson Tide and Checkit urge Crimson Tide Shareholders to
read the Scheme Document carefully as it will contain important information
relating to the Merger, the New Checkit Shares and the Combined Group. Any
decision to vote in respect of resolutions to be proposed at the Crimson Tide
Shareholder Meetings to approve the Merger, the Scheme or related matters,
should be made only on the basis of the information contained in the Scheme
Document.

 

It is expected that the Scheme Document (including notices of the Crimson Tide
Shareholder Meetings) together with the relevant Crimson Tide Forms of Proxy
will be sent to Crimson Tide Shareholders within 28 days of the date of this
Announcement (or on such later date as may be agreed by Checkit and Crimson
Tide with the consent of the Panel).

 

Checkit will prepare the Checkit Circular to be distributed to Checkit
Shareholders and which will be available on Checkit's website at
www.checkit.net and Crimson Tide's website at www.crimsontide.co.uk. Checkit
urges Checkit Shareholders to read the Checkit Circular when it becomes
available. Any decision to vote in respect of the Checkit Resolution should be
made only on the basis of the information in the Checkit Circular. It is
expected that the Checkit Circular (including the notice of the Checkit
General Meeting) together with the Checkit Form of Proxy, will be posted to
Checkit Shareholders as soon as is reasonably practicable and in any event
within 28 days of this Announcement, unless otherwise agreed with the Panel.

 

The statements contained in this Announcement are made as at the date of this
Announcement, unless some other time is specified in relation to them.

 

This Announcement does not constitute a prospectus or prospectus equivalent
document. The New Checkit Shares to be issued pursuant to the Merger are not
being offered to the public by means of this Announcement. The Merger will be
subject to the applicable requirements of the Takeover Code, the Panel, the
London Stock Exchange, the AIM Rules for Companies and the FCA.

 

Please be aware that addresses, electronic addresses and certain other
information provided by Crimson Tide Shareholders, persons with information
rights and other relevant persons for the receipt of communication by Crimson
Tide may be provided to Checkit during the Offer Period as required by section
4 of Appendix 4 to the Takeover Code.

 

Overseas Shareholders

This Announcement has been prepared for the purpose of complying with English
law, the Takeover Code, the Market Abuse Regulation, the AIM Rules and the
Disclosure Guidance and Transparency Rules and the information disclosed may
not be the same as that which would have been disclosed if this Announcement
had been prepared in accordance with the laws of jurisdictions outside of the
United Kingdom.

The release, publication or distribution of this Announcement in jurisdictions
other than the United Kingdom may be restricted by law and/or regulation.
Persons who are not resident in the United Kingdom, or who are subject to the
laws of other jurisdictions should inform themselves of, and observe, any
applicable legal or regulatory requirements. In particular, the ability of
persons who are not resident in the United Kingdom or who are subject to the
laws of another jurisdiction to participate in the Merger or to vote their
Crimson Tide Shares in respect of the Scheme at the Crimson Tide Court
Meeting, or to execute and deliver Crimson Tide Forms of Proxy appointing
another to vote at the Crimson Tide Court Meeting on their behalf, may be
affected by the laws of the relevant jurisdictions in which they are located
or to which they are subject. Any failure to comply with the applicable
requirements may constitute a violation of the laws and/or regulations of any
such jurisdiction. To the fullest extent permitted by applicable law, the
companies and persons involved in the Merger disclaim any responsibility or
liability for the violation of such restrictions by any person.

Unless otherwise determined by Checkit or required by the Takeover Code and
permitted by applicable law and regulation, participation in the Merger will
not be made available, directly or indirectly, in, into or from a Restricted
Jurisdiction where to do so would violate the laws in that jurisdiction and no
person may vote in favour of the Merger by any such use, means,
instrumentality or form within a Restricted Jurisdiction or any other
jurisdiction if to do so would constitute a violation of the laws of that
jurisdiction. Accordingly, copies of this Announcement and all documentation
relating to the Merger are not being, and must not be, directly or indirectly,
mailed or otherwise forwarded, distributed or sent in, into or from a
Restricted Jurisdiction where to do so would violate the laws in that
jurisdiction, and persons receiving this Announcement and all documents
relating to the Merger (including custodians, nominees and trustees) must not
mail or otherwise distribute or send them in, into or from such jurisdictions
as doing so may invalidate any purported vote in respect of the Merger.

If the Merger is implemented by way of a Takeover Offer (unless otherwise
permitted by applicable law and regulation), the Takeover Offer may not be
made, directly or indirectly, in or into or by use of the mails or any other
means or instrumentality (including, without limitation, facsimile, e-mail or
other electronic transmission, telex or telephone) of interstate or foreign
commerce of, or any facility of a national, state or other securities exchange
of any Restricted Jurisdiction and the Takeover Offer will not be capable of
acceptance by any such use, means, instrumentality or facilities or from
within any Restricted Jurisdiction.

The availability of the New Checkit Shares under the Merger to Crimson Tide
Shareholders who are not resident in the United Kingdom may be affected by the
laws of the relevant jurisdictions in which they are resident or to which they
are subject. Persons who are not resident in the United Kingdom or who are
subject to the laws of other jurisdictions should inform themselves of, and
observe, any applicable legal or regulatory requirements.

Further details in relation to Overseas Shareholders will be contained in the
Scheme Document.

 

Profit forecasts, estimates or quantified financial benefits statements

 

Checkit

 

The FY25 Checkit Profit Estimate is a profit estimate within the meaning of
Rule 28.1 of the Takeover Code. The FY25 Checkit Profit Estimate, the
assumptions and basis of preparation on which it is based and the Checkit
Directors' confirmation as required by Rule 28 of the Takeover Code, are set
out in Appendix IV of this Announcement.

 

Other than the FY25 Checkit Profit Estimate, no statement in this Announcement
is intended as a profit forecast or estimate for any period or a quantified
financial benefits statement and no statement in this Announcement should be
interpreted to mean that earnings or earnings per share for Checkit for the
current or future financial years would necessarily match or exceed the
historical published earnings or earnings per share for Checkit.

 

Crimson Tide

 

The FY24 Crimson Tide Profit Estimate is a profit estimate within the meaning
of Rule 28.1 of the Takeover Code. The FY24 Crimson Tide Profit Estimate, the
assumptions and basis of preparation on which it is based and the Crimson Tide
Directors' confirmation as required by Rule 28 of the Takeover Code, are set
out in Appendix IV of this Announcement.

 

Other than the FY24 Crimson Tide Profit Estimate, no statement in this
Announcement is intended as a profit forecast or estimate for any period or a
quantified financial benefits statement and no statement in this Announcement
should be interpreted to mean that earnings or earnings per share for Crimson
Tide for the current or future financial years would necessarily match or
exceed the historical published earnings or earnings per share for Crimson
Tide.

 

Disclosure requirements of the Code:

 

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of
any class of relevant securities of an offeree or of any securities exchange
offeror (being any offeror other than an offeror in respect of which it has
been announced that its offer is, or is likely to be, solely in cash) must
make an Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any securities
exchange offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in, and rights
to subscribe for, any relevant securities of each of (i) the offeree company
and (ii) any securities exchange offeror(s). An Opening Position Disclosure by
a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m.
(London time) on the 10th business day following the commencement of the offer
period and, if appropriate, by no later than 3.30 p.m. (London time) on the
10th business day following the announcement in which any securities exchange
offeror is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead make a
Dealing Disclosure.

 

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%
or more of any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the dealing
concerned and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree company and
(ii) any securities exchange offeror(s), save to the extent that these details
have previously been disclosed under Rule 8. A Dealing Disclosure by a person
to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London
time) on the business day following the date of the relevant dealing.

 

If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.

 

Opening Position Disclosures must also be made by Crimson Tide and by any
offeror and Dealing Disclosures must also be made by Crimson Tide, by any
offeror and by any persons acting in concert with any of them (see Rules 8.1,
8.2 and 8.4).

 

Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.

 

The defined terms used in this section "Disclosure requirements of the Code"
are defined in the Code which can be found on the Takeover Panel's website.

 

Publication on a website

 

In accordance with Rule 26.1 of the Code, a copy of this announcement will be
made available (subject to certain restrictions relating to persons resident
in restricted jurisdictions) on Checkit's website at www.Checkit.net by no
later than 12 noon (London time) on the business day following the date of
this announcement. For the avoidance of doubt, the content of the website
referred to in this announcement is not incorporated into and does not form
part of this announcement.

 

Forward Looking Statements

 

This announcement may contain "forward-looking statements" relating to each of
Checkit, Crimson Tide and/or the Combined Group and the business sectors in
which they operate. Generally, the words "will", "may", "should", "continue",
"believes", "expects", "intends", "anticipates", "forecast", "plan" and
"project" or similar expressions identify forward-looking statements. Such
statements reflect Checkit's current views with respect to future events and
are subject to risks, assumptions and uncertainties that could cause the
actual results to differ materially from those expressed or implied in the
forward-looking statements. Many of these risks, assumptions and uncertainties
relate to factors that are beyond Checkit's abilities to control or estimate
precisely, such as future market conditions, changes in general economic and
business conditions and the behaviour of other market participants. Checkit
cannot give any assurance that the forward-looking statements will prove to
have been correct. The reader should not, therefore, place undue reliance on
these forward-looking statements, which speak only as of the date of this
announcement. Checkit does not undertake any obligation to update or revise
publicly any of the forward-looking statements set out in this announcement,
whether as a result of new information, future events or otherwise, except to
the extent legally required.

 

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.

 

 

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 THAT JURISDICTION.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET
ABUSE REGULATION NO. 596/2014 (AS INCORPORATED INTO UK LAW BY VIRTUE OF THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018 AS AMENDED BY VIRTUE OF THE MARKET ABUSE
(AMENDMENT) (EU EXIT) REGULATIONS 2019). UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

 

11 February 2025

 

Recommended Merger

 

of

 

Crimson Tide plc ("Crimson Tide") with Checkit plc ("Checkit")

to be effected by way of a scheme of arrangement

under Part 26 of the Companies Act 2006

 

1.    Introduction

 

The boards of Checkit and Crimson Tide are pleased to announce that they have
reached agreement on the terms of a recommended all-share merger pursuant to
which Checkit will acquire the entire issued and to be issued share capital of
Crimson Tide. The Merger is to be effected by means of a Court-sanctioned
scheme of arrangement between Crimson Tide and Crimson Tide Scheme
Shareholders under Part 26 of the Companies Act 2006.

 

2.    The Merger

 

Under the terms of the Merger, each Crimson Tide shareholder would receive:

 

For each Crimson Tide Share: 6 Checkit Shares

 

Under the terms of the Merger, Crimson Tide Scheme Shareholders will receive
six new Checkit Shares (the "Exchange Ratio"). Immediately following
Completion, Crimson Tide Scheme Shareholders will own approximately 26.8 per
cent. of the issued share capital of Checkit (based on the existing issued
share capital of Checkit and the fully diluted share capital of Crimson Tide
as at 10 February 2025, being the latest practicable date prior to the
publication of this Announcement).

 

The Exchange Ratio has been based in all material respects on the ratio of
Checkit's current annual recurring revenues ("ARR") relative to Crimson
Tide's. Based on Checkit's middle market closing price of 16.5 pence per
Checkit Share on 10 February 2025 (being the last practicable date prior to
publication of this Announcement), the Exchange Ratio represents an implied
value of 99 pence per Crimson Tide Share and values the entire issued share
capital of Crimson Tide at approximately £6.5 million.

Checkit reserves the right to reduce the Exchange Ratio by the amount of any
dividend (or any distribution) which is paid or becomes payable by Crimson
Tide to its shareholders following this Announcement.

 

The New Checkit Shares will be issued credited as fully paid and will rank
pari passu in all respects with the Checkit Shares in issue at the time the
New Checkit Shares are issued pursuant to the Merger, including the right to
receive and retain dividends and other distributions declared, made or paid by
reference to a record date falling after the Effective Date. Application will
be made to the London Stock Exchange for the New Checkit Shares to be admitted
to trading on AIM.

 

In the event that the Merger is to be implemented instead by way of a Takeover
Offer, the Crimson Tide Shares will be acquired pursuant to such Merger fully
paid and free from all liens, charges, equitable interests, encumbrances and
rights of pre-emption and any other interests of any nature whatsoever and
together with all rights attaching to them.

 

3.    Background to and reasons for the Merger

Background to the Merger

The Checkit Board has for a long time considered there to be compelling
strategic and financial reasons for a business combination of Checkit with
Crimson Tide and at various times over the last four years engaged in
discussions with the Crimson Tide Board.

In January 2024, the Checkit Board submitted an indicative non-binding
proposal to the Crimson Tide Board regarding an all-share merger. As a result
of Crimson Tide's rejection of such proposal, the Checkit Board published the
Possible Offer Announcement on 4 June 2024 to facilitate direct discussions
with shareholders of both Crimson Tide and Checkit.

On 21 June 2024 the Crimson Tide Board announced that it had received a
conditional and non-binding proposal from Ideagen Limited regarding a possible
cash offer for Crimson Tide. Consequently, on 26 June 2024 the Checkit Board
announced that it no longer intended to make an offer to acquire Crimson Tide.

On 11 July 2024 the Crimson Tide Board announced that Ideagen Limited no
longer intended to make an offer for Crimson Tide. Following Ideagen Limited's
withdrawal of interest, the Board's of Crimson Tide and Checkit re-engaged in
discussions regarding the possible benefits of combining the two businesses
and have since been engaged in constructive mutual due diligence ahead of this
Announcement.

In agreeing the terms of the Merger, the Boards of Crimson Tide and Checkit
have calculated the Exchange Ratio based in all material respects on the ratio
of Checkit's current ARR relative to Crimson Tide's.

Reasons for the Merger and strategic rationale

The Boards of Checkit and Crimson Tide believe that the combination of their
companies presents a compelling strategic opportunity to create a market
leader in workflow software solutions also providing a boost to Checkit's own
strategic objectives and a range of benefits to all shareholders of the
Combined Group. The key aspects of their rationale for the combination of the
two businesses set are out in further detail below.

Strong Checkit management team with a track record of delivery to be enhanced
by members of Crimson Tide management

Checkit's management team has proven its ability to deliver against its growth
strategy:

·   Accelerating US market growth;

·   Scaling existing customers by upselling and cross-selling;

·   Expanding its presence in the existing verticals it operates in and
into new growth markets;

·   Growing recurring subscription revenues;

·   Driving operating efficiency to accelerate path to profitability; and

·   Investing in R&D to drive value creation opportunities.

Checkit's revenue for the year ended 31 January 2025 ("FY25") was £14.0
million (31 January 2024: £12.0 million), representing a year-on-year
increase of 17%, as Checkit continues to see strong growth opportunities in
the US, where revenues increased by approximately 21%. New booking momentum
was strong in the year with £2.1 million of sales booked in the twelve months
to 31 January 2025, a 39% year-on-year increase. ARR as at 31 January 2025 was
£14.4 million and cash was approximately £5.1 million.

Checkit believes that its management team will be enhanced by the addition of
members of the Crimson Tide management team and further details are set out
below.

Provision of enhanced product offering to customers of the Combined Group

The Boards of Checkit and Crimson Tide believe that the combination of Crimson
Tide's and Checkit's product sets will, in due course, provide an enhanced
offering that will benefit both companies' customers. By leveraging Checkit's
enhanced research and development and recognised go-to-market capabilities,
the Combined Group will be able to benefit from the integration of Crimson
Tide's solutions while also expanding the product set available to sell to
both new and existing customers. Crimson Tide has stated its ambition to
expand its IoT sensor offering and there is an opportunity to leverage
Checkit's significant expertise in this area to accelerate these expansion
plans, providing a technological edge and streamlining the integration
process.

Checkit's strategy has been to focus on increasing market share and driving
profitable growth. Its successful land and expand strategy has enhanced its
customer base and delivered year on year revenue growth. The success of its
long term growth strategy, focusing on expanding verticals and geographies is
demonstrated by the growth in revenues that it has achieved in the key US
market. In addition, Checkit has delivered a 36% CAGR in ARR since 2020,
providing good visibility over future revenues and accelerating its path to
net cash generation.

Checkit has demonstrated that its products are essential for daily workflow
and operations and boost productivity, reduce costs and ensure compliance for
its clients. In FY25, Checkit significantly enhanced its product offering by
launching Asset Intelligence, its AI/ML analytics platform that provides data
insights that will enhance the return on investment on its products.

The Boards of Checkit and Crimson Tide believe that Checkit's successful land
and expand strategy can be applied to Crimson Tide's existing customer base to
accelerate profitable cash generative growth for the Combined Group. Checkit's
go-to-market approach of securing blue chip customers with entry size deals,
which are then expanded over time providing additional sales and innovative
services, can be applied to Crimson Tide's business model to fuel growth. This
will enable the Combined Group to better cultivate mid to large size deals
within its existing customer base and generate new organic growth
opportunities in focussed verticals.

By implementing a rigorous and systematic approach to pipeline generation, the
Combined Group would benefit from a more efficient sales cycle, enabling
faster revenue generation. Checkit's unique ability to harness customer data
enables deeper insights into customer productivity challenges and will allow
customers of the Combined Group to benefit from the development of targeted
machine learning and artificial intelligence modules that can complement the
core product set.

The benefits of this approach are clear. By offering Crimson Tide's range of
bespoke solutions along with Checkit's scalable products, the Combined Group
will differentiate itself in the market and meet specific customer needs more
effectively. This tailored approach can lead to higher customer satisfaction
and loyalty, as well as open new revenue streams. Overall, the combination of
Crimson Tide and Checkit's product sets, enhanced by Checkit's strategic
initiatives, will create a more robust and competitive company with greater
growth potential and long-term stability.

Substantial cross-selling and upselling opportunities to customers from a
combination of the two businesses, thereby enhancing competitive standing of
the Combined Group in a fragmented workflow management systems market over $17
billion in size

The combination of Checkit and Crimson Tide would present substantial
opportunities for cross-selling and upselling Checkit's product suite to
Crimson Tide's customer base and vice versa. Crimson Tide's established
presence in sectors such as logistics, transportation, healthcare, and retail
align well with Checkit's market focus and growth strategy. This alignment not
only expands the verticals for the Combined Group but also supports a unified
approach to scaling in the US, where Checkit is already well established with
a direct sales team delivering 27% of group ARR.

The ability to offer a broader range of products to customers will allow the
Combined Group to position itself as a one-stop shop in a large market,
offering integrated solutions that enable inherent efficiency benefits to
existing customers whilst opening up further opportunities in new verticals
and geographies. This approach, combined with Checkit's innovative use of
customer data, will enable the acceleration of growth, and enhance the
long-term prospects of the Combined Group.

The combination would enhance the enlarged entity's position in the workflow
software solutions market, thereby leveraging the strengths of both
organisations for an enhanced competitive advantage.

The market for workflow management systems was valued at US$17.1 billion in
2024 and is expected to generate a CAGR of 33.5% between 2024 and 2034 2 
(#_ftn2) . Growth in the sector will be driven by innovation and the
exploitation of data for management information. With the launch of Asset
intelligence, Checkit is well positioned to benefit from this market trend and
applying these insights to Crimson Tide's more bespoke product offering will
bring further benefits and growth opportunities to the Combined Group.

Opportunity to realise synergies from a combination of the two businesses

Under the leadership of the Checkit management team with support from Crimson
Tide management, the Combined Group is expected to benefit from significant
synergies, efficiencies and growth opportunities:

·    Revenue Synergies: The integration of Checkit and Crimson Tide is
expected to unlock revenue synergies from cross-selling and upselling
opportunities. By leveraging Checkit's product suite within Crimson Tide's
established sectors such as logistics, transportation, healthcare and retail
and vice versa, there is the opportunity to drive additional revenue. Offering
more comprehensive solutions to existing customers where there is currently no
significant degree of overlap between the two companies such as Tesco,
Morrisons, Bookers and the NHS should enhance the value proposition and
increase the sales opportunity. It will also open further opportunities to
expand the addressable market via new verticals and geographies.

·    Cost Synergies: In order to unlock the significant potential upside
from a combination of the two businesses, Checkit management has identified
staff and non-staff cost savings in the Combined Group. Elimination of
duplicate costs associated with two listings on the London Stock Exchange will
provide savings alongside the consolidation of some staff and non-staff
functions in sales and marketing, product development, administration and
operations which is expected to streamline operations over time and lead to a
more efficient and cost-effective organisational structure.

·    Accelerated Growth for Crimson Tide: Applying Checkit's proven
go-to-market strategies, which include both land and expand tactics, and
organic growth initiatives, will accelerate Crimson Tide's growth. Checkit's
higher ARR growth rate demonstrates its capability to drive revenue expansion
effectively. Implementing these strategies within Crimson Tide provides an
opportunity to increase Crimson Tide's market penetration and rate of revenue
growth.

·    Enhanced Financial Standing: The Combined Group would, immediately
following Completion, boast an ARR of increased scale and a pro forma cash
balance (before deal costs) of approximately £7.2 million with the potential
for significant future net cash generation. Once profitable, the Combined
Group is also expected to grow profitability faster than either company could
as standalone businesses. This enhanced financial position would not only
provide stability but also enable strategic investments in innovation and
expansion, further reinforcing the Combined Group's financial standing. The
robust financial health of the Combined Group should increase investor
confidence and provide a solid foundation for sustained long-term profitable
growth.

The Combined Group should be a more attractive investment proposition to
existing and potential new shareholders

The Boards of Checkit and Crimson Tide believe that the Combined Group with
its increased scale and enhanced financial standing would present a more
attractive investment opportunity for existing and potential shareholders than
either business remaining as standalone entities. The Boards of Checkit and
Crimson Tide believe that this, along with the significant potential revenue
and cost synergies identified, could result in the Combined Group attracting a
wider pool of investors and consequently being attributed higher valuation
multiples by the market than either standalone company could reasonably expect
to command. A broader investor base could also reasonably be expected to
increase liquidity for existing and potential investors.

For the reasons set out above, the Boards of Checkit and Crimson Tide believe
that the strategic and financial rationale for the Merger is compelling, in
the best interests of both companies' respective shareholders and provides
significant opportunities for enhanced value for both sets of shareholders.

4.    Board of the Combined Group

 

Subject to Completion, it is proposed that, following the Effective Date, the
Checkit Board will comprise:

 

·    Keith Daley, currently Non-Executive Chairman of Checkit, who will
remain Non-Executive Chairman of Checkit;

·    Kit Kyte, currently Chief Executive Officer of Checkit, who will
remain Chief Executive Officer of Checkit;

·    Kris Shaw, currently Chief Financial Officer of Checkit, who will
remain Chief Financial Officer of Checkit;

·    Alex Curran, currently Non-Executive Director of Checkit, who will
remain Non-Executive Director of Checkit; and

·    Jacqueline Daniell, currently Non-Executive Chairman of Crimson Tide,
who will join the Checkit Board as a Non-Executive Director.

 

Upon completion of the Merger, the other Non-Executive Directors of Crimson
Tide would be expected to resign and from that point cease to be directors of
Crimson Tide. The executive directors of Crimson Tide are expected to resign
from their roles as directors of Crimson Tide but will be appointed to the
following senior management roles within the Combined Group:

 

·    Phil Meyers, currently Chief Executive Officer of Crimson Tide, will
be appointed as global Chief Operating officer of the Combined Group;

·    Luke Jeffrey, currently Chief Technology Officer of Crimson Tide,
will be appointed as Chief Technology Officer of the Combined Group; and

·    Peter Hurter, currently Chief Financial Officer of Crimson Tide, will
be appointed as head of the integration process of Crimson Tide into Checkit
and will be employed by the Combined Group for a period to be agreed from
Completion.

 

5.    Governance, Management, Employees, Pensions, Research and Development
and Locations of Business

 

Strategic plans for Crimson Tide

 

The Boards of Checkit and Crimson Tide believe, as set out in paragraph 3
above, that the Merger has a compelling strategic rationale, with the key
aspects of the Checkit Board's growth plan to create a market leader in
workflow software solutions as follows:

 

·    Crimson Tide's mpro5 product with Checkit branding will be retained
for at least the first 12 months following Completion and run during that
period separate to the ecosystem for Checkit's existing product suite.
Thereafter, the Checkit Board may integrate mpro5 into the Combined Group's
wider offering (including application of Checkit's expertise in IoT machine
learning to the mpro5 product), such that it can be sold increasingly
alongside Checkit's existing product suite, with cross-selling opportunities
expected to arise as a result.

 

·    Crimson Tide's sales and marketing function will be integrated into
Checkit's existing go-to-market direct sales infrastructure. The Checkit Board
believes that the application of Checkit's successful land and expand strategy
can be applied to Crimson Tide, thereby accelerating the Combined Group's
profitable cash generative growth.

 

·    Crimson Tide's US footprint will be integrated into Checkit's already
well-established existing US go-to-market direct sales offering.

 

·    Checkit will apply its customer success programme to Crimson Tide's
customer base which is expected to increase cross-selling and upselling
opportunities across the customer base of the Combined Group.

 

Employees and management

 

Checkit recognises the contribution made by existing Crimson Tide management
and employees to Crimson Tide's development to date, however, in order to
recognise the significant potential upside from a combination of the two
businesses, Checkit management has identified staff cost savings in the
Combined Group.

 

Subject to the Merger completing, Checkit proposes that, following Completion,
the board of the Combined Group will consist of the existing members of the
Checkit Board with the addition of Jacqueline Daniell, currently Non-Executive
Chair of Crimson Tide, who will join the Checkit Board as a Non-Executive
Director. Upon Completion, the other Non-Executive directors of Crimson Tide
are expected to resign and from that point cease to be directors of Crimson
Tide. The executive directors of Crimson Tide, being Phil Meyers, Luke Jeffrey
and Peter Hurter, are expected to resign from their roles as directors of
Crimson Tide but will be appointed to the senior management roles within the
Combined Group as set out in paragraph 4.

 

Ahead of this Announcement, Checkit conducted detailed due diligence on
Crimson Tide's operations and employees and has made an assessment on the
future prospects of the Combined Group. This has included a detailed review
with Crimson Tide management to identify potential cost synergies from a
combination of the two companies, including identifying duplicate and
redundant positions thereby informing the process for integrating the Crimson
Tide business into the operations of Checkit.

 

Checkit's analysis during due diligence identified potential cost synergies
across Checkit and Crimson Tide due to a degree of duplication within certain
functions between the two companies and certain existing roles within Crimson
Tide that will no longer be necessary to the Combined Group. In order to
streamline operations in the Combined Group and to realise the benefits of the
Merger, Checkit will make headcount reductions in Crimson Tide following
Completion. Checkit has not as yet formulated its plans as to the number of
headcount reductions it will make in Crimson Tide and intends to assess on
Completion, in coordination with Crimson Tide management, the extent to which
headcount reductions are necessary. Based on Checkit's analysis to date, it
expects that headcount reductions in Crimson Tide following Completion will be
between 5 and 10 employees (from 36 employees as at the date of this
Announcement) with these expected to be in the areas of sales and marketing,
product development, head office administrative functions and operations in
order of materiality. As part of its analysis, Checkit has conducted a review
of Crimson Tide's existing US operations and has worked with Crimson Tide to
evaluate the opportunities that Crimson Tide's market presence provides in the
context of Checkit's existing US strategy. Checkit expects that the Combined
Group will have a reduced overall sales and marketing presence in the US
thereby reducing the losses currently incurred by Crimson Tide in the US.

 

Following Completion, Checkit also intends to make some reductions to the
existing Checkit headcount with Checkit management also intending to implement
these reductions regardless of the Merger completing. By consolidating
operations across the two companies, Checkit intends to streamline operations
in the Combined Group which Checkit believes will lead to a more efficient and
cost-effective organisational structure.

 

No proposals have been finalised yet as to how any such headcount reductions
will be implemented but Checkit intends to work with Crimson Tide's management
to this effect following Completion. During the integration period following
completion of the Acquisition, Checkit intends to complete a comprehensive
organisational review, engagement and planning exercise which will involve a
range of stakeholders, including any affected employees and any appropriate
employee representative bodies. Checkit's intention is to approach management
and employee integration with the aim of retaining and motivating the best
talent to augment its focus on creating a best-in-class organisation.

 

No headcount reductions will proceed without comprehensive planning or the
appropriate conclusion of all applicable information and consultation
procedures with employees and their representatives. Checkit confirms that the
intention is for any individuals impacted to be treated in a manner consistent
with Checkit and Crimson Tide's high standards and culture and that Checkit
will observe Crimson Tide's existing redundancy practices and policies,
including undertaking appropriate consultation with affected employees.

 

The Checkit Board confirms that, upon the Merger completing, the existing
contractual and statutory employment rights, including pension rights, of all
management and employees of Crimson Tide will be fully safeguarded.

 

Existing rights and pension schemes

 

Checkit confirms that, following completion of the Merger, the existing
statutory and contractual rights and terms and conditions of employment of
management and employees of Crimson Tide, including in relation to pensions,
will be fully safeguarded in accordance with applicable law. Checkit has no
intention to make any material modifications to the conditions of employment
of management or employees of the Crimson Tide Group, unless otherwise agreed
upon with the respective employees. There are no plans to make any immediate
changes to any defined contribution scheme(s) operated by Crimson Tide but in
due course Checkit would expect to harmonise terms between the two businesses.

 

Incentivisation and retention arrangements

 

Checkit believes that the ongoing participation of senior management of
Crimson Tide is important to the future success of Crimson Tide. No
discussions in relation to incentivisation arrangements have yet taken place
and no discussions are expected to take place prior to completion of the
Merger, but Checkit intends to put in place appropriate arrangements for
selected members of senior management of the Crimson Tide Group following
completion of the Merger. Such incentivisation would be expected to include
the granting of Checkit options following Completion.

 

Location of business, fixed assets and headquarters; research and development

 

The Checkit Board recognises the importance of a global office network for the
Combined Group. The growing importance of a distributed workforce, whether in
the office, remote or at a customer site is changing the needs of, and
providing flexibility for, both the employee and the customer.

 

The Checkit Directors intend that, following completion of the Merger, the
Combined Group should regularly review its property footprint alongside the
best working practices and commitments on ESG to optimise office space across
each region in which the Combined Group operates.

 

Following completion of the Merger, Checkit intends to commence a review in
relation to the Combined Group's office space. No decisions have yet been
reached, but this review is likely to lead to a rationalisation and closure of
Crimson Tide's current office space in Tunbridge Wells, Dublin and any
presence in the US. The Checkit Directors intend that Checkit's office in
Cambridge will be the corporate headquarters for the Combined Group.

 

Following completion of the Merger, Checkit intends to commence a review of
Crimson Tides new product development function. Checkit's expectation is that
this review will result in some rationalisation of Crimson Tide's existing
product development roadmap, and this will likely result in reduced third
party development expenditure.

 

Trading Facilities

 

Crimson Tide Shares are admitted to trading on the London Stock Exchange's AIM
market. As set out in paragraph 19, it is intended that an application will be
made for the cancellation of trading of the Crimson Tide Shares on the London
Stock Exchange's AIM market to take effect on or shortly after the Effective
Date.

 

It is intended that Crimson Tide be re-registered as a private limited company
on, or as soon as practicable following, the Effective Date.

 

Name of Checkit

On Completion, Checkit intends that the name of Checkit will remain Checkit
plc.

 

Statements

 

No statements in this paragraph 5 constitute "post-offer undertakings" for the
purposes of Rule 19.5 of the Code.

 

6.    Recommendations

Crimson Tide

The Crimson Tide Directors, who have been so advised by Cavendish as to the
financial terms of the Merger, unanimously consider the terms of the Merger to
be fair and reasonable. In providing advice to the Crimson Tide Directors,
Cavendish has taken into account the commercial assessments of the Crimson
Tide Directors. Cavendish is providing independent financial advice to the
Crimson Tide Directors for the purposes of Rule 3 of the Takeover Code.

 

Accordingly, the Crimson Tide Directors intend to recommend unanimously that
Crimson Tide Shareholders vote in favour of the Scheme at the Crimson Tide
Court Meeting and in favour of the Crimson Tide Resolution to be proposed at
the Crimson Tide General Meeting, as those Crimson Tide Directors who are
interested in Crimson Tide Shares have irrevocably undertaken to do in respect
of their own beneficial holdings (or have undertaken to procure the vote in
respect of the Crimson Tide Shares in which certain of their connected persons
are interested) of 90,858 Crimson Tide Shares representing, in aggregate,
approximately 1.38 per cent. of Crimson Tide's issued ordinary share capital
as at the close of business on the Latest Practicable Date.

Checkit

In order to implement the Merger, Checkit will require the approval of the
Checkit Shareholders to allot the New Checkit Shares at the Checkit General
Meeting. The Merger is accordingly conditional on such approval being
obtained.

 

The Checkit Directors consider the Merger to be in the best interests of
Checkit Shareholders as a whole and accordingly intend to recommend
unanimously that Checkit Shareholders vote in favour of the Checkit Resolution
to be proposed at the Checkit General Meeting, as those Checkit Directors who
are interested in Checkit Shares intend to irrevocably undertake to do in
respect of their own beneficial holdings (or intend to undertake to procure
the vote in respect of the Checkit Shares in which certain of their connected
persons are interested) of 21,966,976 Checkit Shares representing, in
aggregate, approximately 20.34 per cent. of Checkit's issued ordinary share
capital as at the close of business on the Latest Practicable Date.

 

7.    Background to and reasons for the recommendation of the Crimson Tide
Board

 

The Crimson Tide Directors believe that the proposed Merger with Checkit
creates a timely and strategically compelling opportunity to combine two
businesses which share much in common.  Both businesses provide workflow
software and related services with a view to improving and driving
efficiencies within client operations, helping them to run their businesses on
a more data-centric basis, driving improved decision making, compliance,
safety and customer experience. The proposed Merger provides a valuable
opportunity therefore to create a market leader in workflow software
solutions, enabling Crimson Tide Shareholders to participate in a larger, more
resilient and better diversified business, whilst participating fully in
anticipated future value accretion, and any potential re-rating.

 

Accretive opportunities are expected to be considerable post completion. These
are largely anticipated to be cost synergies in the short-term, from
eliminating duplicated operating costs and costs of Crimson Tide being
admitted to trading on AIM. However, in the medium term, revenue synergies are
anticipated to arise from combining the proven functionality of mpro5 with
Checkit's effective sales and marketing function, enabling accelerated sales
and cross-selling opportunities and an enhanced product offering with which to
drive Checkit's proven land and expand strategy.

In considering the recommendation of the Merger to the Crimson Tide
Shareholders, the Crimson Tide Directors have given due consideration to
Checkit's stated intentions with respect to the strategy and future operation
of the business as set out in paragraph 5 above. The Crimson Tide Directors
welcome Checkit's growth plan to create a market leader in workflow software
solutions and its clear commitment to Crimson Tide's current executive team
whose expertise will, the Crimson Tide Directors believe, be critical in
realising the shared vision of the Checkit Board and Crimson Tide Board for
the Combined Group.  The Crimson Tide Directors also welcome the fact that
Crimson Tide's Board will have representation on the Board of the Combined
Group.

The Crimson Tide Directors also welcome that Checkit has no intention to make
material changes to the terms and conditions of employment of Crimson Tide
employees as a result of the Merger and that the existing contractual and
statutory employment rights, including in relation to pensions, of all of
Crimson Tide's management and employees will be fully safeguarded in
accordance with applicable law and regulation.

The Crimson Tide Directors note, however, that property footprint
rationalisation may occur following Completion and that headcount reductions
are anticipated by the removal of duplicative functions across Crimson Tide's
administrative and head office functions, as well as in functions such as
sales and marketing, operations, and product development.  The Crimson Tide
Directors note Checkit's clear commitment to involve the senior Crimson Tide
management team in the post-merger headcount reduction process and acknowledge
that, whilst regrettable, steps of this nature are likely to be necessary in
order to achieve the expected benefits of the Merger and welcome that any
individuals affected will be subject to full consultation procedures and
treated in a manner consistent with the high standards, culture and practices
of both Checkit and Crimson Tide.  The Crimson Tide Directors further
acknowledge the fact that cost savings are expected to be shared within both
Crimson Tide and Checkit.

 

8.    Irrevocable Undertakings & Letters of Intent

In respect of the Crimson Tide Shareholder Meetings

The Crimson Tide Directors who are interested in Crimson Tide Shares have
irrevocably undertaken to vote (or procure votes) in favour of the Scheme at
the Crimson Tide Court Meeting and in favour of the Crimson Tide Resolution to
be proposed at the Crimson Tide General Meeting, in respect of their own
beneficial holdings (or the holdings of certain persons connected with them)
of 90,858 Crimson Tide Shares representing, in aggregate, approximately 1.38
per cent. of Crimson Tide's issued ordinary share capital as at the close of
business on the Latest Practicable Date.

 

In addition, Checkit has received an Irrevocable Undertaking to vote in favour
of the Scheme at the Crimson Tide Court Meeting and to vote in favour of the
Crimson Tide Resolution to be proposed at the Crimson Tide General Meeting in
respect of 347,666 Crimson Tide Shares, being approximately 5.29 per cent. of
Crimson Tide Shares in issue as at 10 February 2025 (being the latest
practicable date prior to the publication of this Announcement).

 

Checkit has also received non-binding letters of support to vote in favour of
the Crimson Tide Resolution to be proposed at the Crimson Tide General
Meeting, in respect of 1,358,333 Crimson Tide Shares representing, in
aggregate, approximately 20.66 per cent. of Crimson Tide's issued ordinary
share capital as at the close of business on the Latest Practicable Date.

 

Checkit has therefore received Irrevocable Undertakings and letters of intent
to vote in favour of the Crimson Tide Resolution in respect of a total number
of 1,796,857 Crimson Tide Shares representing, in aggregate, approximately
27.33 per cent. of Crimson Tide's issued ordinary share capital as at the
close of business on the Latest Practicable Date.

 

The Irrevocable Undertakings summarised above, inter alia, prohibit the
Shareholders concerned from selling all or any part of their holdings of
Crimson Tide Shares to anyone other than Checkit and, in the case of the
Irrevocable Undertakings given by Crimson Tide Directors, remain binding in
the event of any competing offer. All of the Irrevocable Undertakings will
cease to be binding if the Merger lapses or is otherwise withdrawn. The
Irrevocable Undertaking from a shareholder which is not a Crimson Tide
Director will also lapse if, within ten business days after the despatch of
the Scheme Document, a third party announces a firm intention to make an offer
to acquire all the issued and to be issued equity share capital of Crimson
Tide for a consideration per share which represents at least 10 per cent.
greater than the value of the consideration per share available under the
Merger as at the date of such announcement and Checkit does not within 14
business days of such announcement increase the consideration payable under
the Merger to an amount which is equal to or exceeds the value of such third
party offer.

In respect of the Checkit General Meeting

The Checkit Directors intend to give irrevocable undertakings to vote (or
procure votes) in favour of the Checkit Resolution to be proposed at the
Checkit General Meeting in respect of their own beneficial holdings (or the
holdings of certain persons connected with them) of 21,966,976 Checkit Shares
representing, in aggregate, approximately 20.34 per cent. of Checkit's issued
ordinary share capital as at the close of business on the Latest Practicable
Date.

 

Further details of these Irrevocable Undertakings and letters of intent are
set out in Appendix III of this Announcement.

 

9.    Merger Structure & Conditions

Scheme of Arrangement

It is intended that the Merger will be effected by means of a Court-sanctioned
scheme of arrangement between Crimson Tide and Crimson Tide Scheme
Shareholders under Part 26 of the Companies Act. The procedure involves, among
other things, an application by Crimson Tide to the Court to sanction the
Scheme, in consideration for which Crimson Tide Scheme Shareholders, who are
on the register of members at the Scheme Record Time, will receive New Checkit
Shares on the basis set out in paragraph 2 of this part of this Announcement.
The purpose of the Scheme is to provide for Checkit to become the owner of the
entire issued and to be issued ordinary share capital of Crimson Tide.

 

The New Checkit Shares will be issued in registered form and will be capable
of being held in both certificated and uncertificated form. The New Checkit
Shares will be issued by Checkit to Crimson Tide Shareholders no later than 14
days after the Effective Date. Fractions of New Checkit Shares will not be
allotted or issued pursuant to the Merger, but entitlements of Crimson Tide
Shareholders will be rounded down to the nearest whole number of New Checkit
Shares and all fractions of New Checkit Shares will be aggregated and sold in
the market as soon as practicable after the Effective Date. The net proceeds
of such sale (after deduction of all expenses and commissions incurred in
connection with the sale) will be distributed in due proportions to Crimson
Tide Shareholders who would otherwise have been entitled to such fractions
(rounded down to the nearest penny), save that individual entitlements to
amounts of less than £5.00 will be retained for the benefit of the Combined
Group.

Conditions

Implementation of the Scheme

The implementation of the Scheme will be subject to the Conditions and further
terms which are set out in Appendix I of this Announcement and the further
terms and conditions to be set out in the Scheme Document (and the related
Crimson Tide Forms of Proxy when issued) including, among other things:

 

1.         the Scheme becoming Effective by 11:59 p.m. on the Long
Stop Date, failing which the Scheme will lapse and the Merger will not take
place (unless the Panel otherwise consents);

 

2.         the approval of the Scheme by a majority in number of the
Crimson Tide Scheme Shareholders, representing not less than 75 per cent. in
value of the Crimson Tide Scheme Shares held by those Crimson Tide Scheme
Shareholders, present and voting, either in person or by proxy, at the Crimson
Tide Court Meeting or at any adjournment of it, such meeting to be held on or
before the 22nd day after the expected date of the Crimson Tide Court Meeting
(or such later date as may be agreed between Checkit and Crimson Tide and the
Court may allow);

 

3.         the passing of the Crimson Tide Resolution by the requisite
majority at the Crimson Tide General Meeting or at any adjournment of it, such
meeting to be held on or before the 22nd day after the expected date of the
Crimson Tide General Meeting (or such later date as may be agreed between
Checkit and Crimson Tide and the Court may allow);

 

4.         the passing of the Checkit Resolution by the requisite
majority at the Checkit General Meeting;

 

5.         the sanction by the Court of the Scheme at the Court
Hearing, such hearing to be held on or before the 22nd day after the expected
date of the Court Hearing (or such later date as may be agreed between Checkit
and Crimson Tide and the Court may allow);

 

6.         delivery to the Registrar of Companies in England and Wales
of the Court Order sanctioning the Scheme for registration; and

 

7.         the London Stock Exchange having acknowledged to Checkit or
its agent (and such acknowledgement not having been withdrawn) that the New
Checkit Shares will be admitted to trading on AIM.

 

Scheme becoming Effective

Once the necessary approvals from Crimson Tide Shareholders have been obtained
and the other Conditions have been satisfied, or (where applicable) waived, to
become Effective the Scheme must be sanctioned by the Court. The Scheme will
become Effective in accordance with its terms upon a copy of the Court Order
being delivered to the Registrar of Companies for registration. Upon the
Scheme becoming Effective, it will be binding on all Crimson Tide
Shareholders, irrespective of whether or not they attended or voted at the
Crimson Tide Court Meeting or the Crimson Tide General Meeting (and if they
attended and voted, whether or not they voted in favour).

 

The Merger is subject to the terms and Conditions in Appendix I to this
Announcement and on the further terms and conditions that will be set out in
the Scheme Document.

 

10.  Indicative Timing

 

Further details of the Scheme, including an indicative timetable for its
implementation, will be set out in the Scheme Document, which is expected to
be despatched to Crimson Tide Shareholders as soon as reasonably practicable
and, in any event, within 28 days of the date of this Announcement (unless
otherwise agreed with the Panel). The timing of events which relate to the
implementation of the Merger is, however, subject to the approval of the Court
and is therefore subject to change.

 

It is currently expected that the Merger will have an Effective Date in the
second quarter of 2025.

 

11.  Election to switch

Subject to obtaining the consent of the Panel, Checkit reserves the right to
elect to implement the Merger by way of a Takeover Offer as an alternative to
the Scheme. In any such event, a Takeover Offer would be implemented on the
same terms, so far as applicable, as those which apply to the Scheme. Further
details relating to this right are set out in the terms and Conditions in
Appendix I to this Announcement. If Checkit does elect to implement the Merger
by way of a Takeover Offer, and if sufficient acceptances of such Takeover
Offer are received and/or sufficient Crimson Tide Shares are otherwise
acquired, it is the intention of Checkit to apply the provisions of sections
979 to 982 (inclusive) of the Companies Act to acquire compulsorily any
remaining Crimson Tide Shares to which such Takeover Offer relates.

 

12.  Checkit Shareholder approval to issue New Checkit Shares

The Merger involves the issue of New Checkit Shares to Crimson Tide
Shareholders. Accordingly, Checkit will be required to seek the approval of
Checkit Shareholders for the allotment and issue of New Checkit Shares at the
Checkit General Meeting. The Merger will be conditional on, among other
things, the Checkit Resolution being passed by the requisite majority of
Checkit Shareholders at the Checkit General Meeting.

 

Checkit will prepare the Checkit Circular which will contain a notice
convening the Checkit General Meeting. It is expected that the Checkit
Circular will be published and posted to Checkit Shareholders at the same time
as the Scheme Document is posted to Crimson Tide Shareholders. The Checkit
Circular will be made available by Checkit on its website at www.checkit.net
and by Crimson Tide on its website at www.crimsontide.co.uk.

 

13.  Admission of New Checkit Shares

Prior to the Effective Date, an application will be made to the London Stock
Exchange for the New Checkit Shares to be admitted to AIM. It is expected that
Admission will become effective and that unconditional dealings in the New
Checkit Shares will commence at 8.00 a.m. on the first Business Day following
the Effective Date. The New Checkit Shares will not be listed on any stock
exchange other than AIM, and have not been, and will not be, registered under
the US Securities Act or under any laws of any state or other jurisdiction of
the United States.

 

14.  About Crimson Tide

 

Crimson Tide is the provider of mpro5, the process management app. mpro5 is
delivered on all modern devices and enables organisations to digitally
transform their business with a view to improving customer experience, safety
and compliance and operational efficiency.  In doing so Crimson Tide is able
to help customers overcome inefficiencies, unlocking substantial cost savings
and productivity gains whilst strengthening customer workforces with smart
mobile working.  Integrating with IoT sensors (such as temperature, or
humidity) mpro5 provides customers with a strong data foundation enabling them
to make informed and actionable decisions about their day to day operations.

 

Crimson Tide is trusted by businesses across a wide variety of verticals
including facilities management, transportation, catering, retail and
healthcare estates and is currently deployed in over 260,000 sites in 11
countries.

 

mpro5 offers Crimson Tide's customers a highly scalable and secure solution,
hosted in the cloud on Microsoft Azure.  mpro5 is typically provided on a
long term contracted monthly subscription basis, whilst the Crimson Tide team
is also able to provide maintenance and customer specific adaptations of the
solution, allowing organisations to further refine and adapt their processes
to maximise efficiency and return on their investment in mpro5, ultimately
driving contract renewal and customer longevity.

 

15.  About Checkit

 

Checkit is the augmented workflow solution for frontline workers and smart
sensor automation, enabling large multinational and complex organisations to
operate more safely, efficiently and sustainably - driving them towards
achieving intelligent operations.

 

Checkit has hundreds of customers across the globe, including Global Fortune
500 and public health organisations. Checkit's customers are digitising their
manual processes through Checkit's highly customisable workflow software and
top-of-the-line Internet of Things (IoT) sensors, increasingly aided by
Machine Learning and AI. More than 12 billion sensor readings and millions of
completed workflows per year are sent through Checkit's platform enabling
customers to become more efficient, ensure safety and deliver complete
operational visibility.

 

16.  Current trading

Current trading of Checkit

Checkit's revenue for the year ended 31 January 2025 ("FY25") was £14.0
million (31 January 2024: £12.0 million), representing a year-on-year
increase of 17%, as Checkit continues to see strong growth opportunities in
the US, where revenues increased by approximately 21%.

 

New booking momentum was strong in the year with £2.1 million of sales booked
in the twelve months to 31 January 2025, a 39% year-on-year increase.
Expansion revenue from existing customers continues to drive the majority of
revenue growth, complemented by several key new customer wins that are
expected to provide further expansion opportunities in the coming years. New
customer signings in both the UK and US have strengthened Checkit's growing
care home use case, while additional wins in Checkit's core blood plasma and
hospitality verticals offer further land and expand opportunities. As noted in
its interim results to 31 July 2024, Checkit's sales performance in FY25 was
partly impacted by the non-renewal of low margin and non-core business, but
taking into account the growth in sales bookings, ARR as at 31 January 2025
was £14.4 million and cash was approximately £5.1 million.

 

By increasing revenue whilst maintaining gross margin and cost control, strong
progress towards the Company's longer-term financial objectives including its
path to profitability using its existing financial resources has been
maintained in FY25, with overall trading and year end cash in line with Board
expectations.

 

Current trading of Crimson Tide

Crimson Tide was pleased in its interim results for the six months to 30 June
2024 ("Crimson Tide FY24 Interims") to report revenue up 3.3% to £3.14m (H1
2023: £3.04m), EBITDA up c209% at £0.33m (H1 2023: £0.11m) and gross
margins of 88.2%, up nearly 4 percentage points on the prior year.  Crimson
Tide has at the same time increased ARR to £5.94m (FY2023: £5.75m) with cash
reserves healthy at £2.5m (H1 2023: £2.9m).  Crimson Tide has and will
continue to develop and invest in the core mpro5 product such that the product
is in the best shape possible, and the Board is confident in its competitive
advantage and market readiness.

 

Crimson Tide further referred to these achievements coming despite the impact
of two key client losses in the prior year, both occasioned by factors beyond
its control, and the distraction of two unsolicited takeover bids. Crimson
Tide also indicated execution risks arising from the limitations of capacity
in sales areas, against which investment was being made, and a market-wide
pattern of opportunities going to competitive tender and sales cycles
generally becoming extended, a feature which has persisted during the second
half of FY24.

 

The Company has continued to trade in line with the Board's expectations since
the date of the Crimson Tide FY24 Interims with the second half of the year
unfolding as envisaged, with ARR at the year-end of approximately £5.2m and
cash of approximately £2.1m.  As predicted Crimson Tide experienced further
ARR churn in the second half as certain covid-era deals came to an end, though
the Crimson Tide Board has taken action to adjust Crimson Tide's cost base in
response to changes in its sales cycle and customer requirements, incurring
some exceptional costs in doing so, but has been disciplined to ensure that
the Company's commitment to ongoing investment in capacity or product was not
prejudiced.

 

Notwithstanding the performance of the business since the FY24 interims the
Crimson Tide Board believes that in the current economic climate client buying
behaviour is unlikely to improve in the short term, with sales cycles only
likely to become more protracted, however well invested the mpro5 platform may
be.  With that in mind the Crimson Tide board sees little scope to make
top-line progress during the current financial year, with any growth not now
anticipated until FY26.

 

17.  Overseas Shareholders

The distribution of this Announcement to, and the availability of the New
Checkit Shares to be issued pursuant to the Merger to, persons who are not
resident in the United Kingdom may be affected by the laws of their relevant
jurisdiction. Such persons should inform themselves of and observe any
applicable legal or regulatory requirements of their jurisdiction. Further
details in relation to Overseas Shareholders of Crimson Tide will be found in
the Scheme Document.

 

This Announcement is provided for information purposes only. This Announcement
is not intended to, and does not constitute, or form part of, an offer,
invitation or the solicitation of an offer to purchase, otherwise acquire,
subscribe for, exchange, sell or otherwise dispose of any securities, nor is
it a solicitation of any vote or approval in any jurisdiction, nor will there
be any purchase or transfer of the securities referred to in this Announcement
in any jurisdiction in contravention of applicable law or regulation.

 

The New Checkit Shares to be issued under the terms of the Merger have not
been and will not be registered under the US Securities Act or under any laws
or with any securities regulatory authority of any state or other jurisdiction
of the United States. Accordingly, unless an exemption under relevant
securities laws is available, including the exemption from the registration
requirements of the US Securities Act provided by section 3(a)(10) of that
Act, the New Checkit Shares are not being, and may not be, offered, sold,
resold, delivered or distributed, directly or indirectly, in, into or from the
United States. Neither the US Securities and Exchange Commission nor any US
state securities commission has approved or disapproved of the New Checkit
Shares, or determined if this Announcement is accurate or complete. Any
representation to the contrary is a criminal offence.

 

18.  Crimson Tide Option Holders

 

Participants in the Crimson Tide Share Scheme and other option holders will be
contacted regarding the effect of the Merger on their rights under such
schemes or options and an appropriate proposal in accordance with Rule 15 of
the Code will be made by Checkit to such participants in due course. Details
of the proposals will be set out in separate letters to be sent to
participants in Crimson Tide option schemes and other option holders.

 

19.  Cancellation of admission to trading on AIM & Re-registration

 

Prior to the Scheme becoming Effective, it is intended that an application
will be made to the London Stock Exchange for the cancellation of the trading
of the Crimson Tide Shares on the London Stock Exchange's AIM market with
effect from or shortly after the Effective Date. The last day of dealings in
Crimson Tide Shares on AIM is expected to be the date of the Court Hearing and
no transfers will be registered after 6.00 p.m. on that date.

 

On the Effective Date, Crimson Tide will become a subsidiary of Checkit and
share certificates in respect of Crimson Tide Shares will cease to be valid
and should be destroyed. In addition, entitlements to Crimson Tide Shares held
within the CREST system will be cancelled on the Effective Date.

 

Upon the Scheme becoming Effective, Checkit will acquire the Crimson Tide
Shares fully paid and free from all liens, equitable interests, charges,
encumbrances and other third party rights of any nature whatsoever and
together with all rights attaching to them including the right to receive and
retain all dividends and distributions (if any) declared, made or paid by
reference to a record date falling on or after the Effective Date.

 

It is also intended that, following the Effective Date, Crimson Tide will be
re-registered as a private company under the relevant provisions of the
Companies Act.

 

20.  Disclosure of interests in Crimson Tide

 

As at the close of business on 10 February 2025, being the last Business Day
prior to this Announcement, save for the irrevocable undertakings referred to
in paragraph 8 (Irrevocable undertakings & Letters of Intent) above, so
far as Checkit is aware, no person acting, or deemed to be acting, in concert
with Checkit:

·    had an interest in, or right to subscribe for, relevant securities of
Crimson Tide;

 

·    had any short position in (whether conditional or absolute and
whether in the money or otherwise), including any short position under a
derivative, any agreement to sell or any delivery obligation or right to
require another person to purchase or take delivery of, relevant securities of
Crimson Tide;

 

·    had procured an irrevocable commitment or letters of intent to accept
the terms of the Merger in respect of relevant securities of Crimson Tide; or

 

·    had borrowed or lent any Crimson Tide Shares (including, for these
purposes, any financial collateral arrangements of the kind referred to in
Note 4 to Rule 4.6 of the Code).

Furthermore, save for the irrevocable undertakings described in paragraph 8
(Irrevocable undertakings & Letters of Intent) above, no arrangement
exists between Checkit or Crimson Tide or a person acting in concert with
Checkit or Crimson Tide in relation to Crimson Tide Shares. For these
purposes, an "arrangement" includes any indemnity or option arrangement, any
agreement or any understanding, formal or informal, of whatever nature,
relating to Crimson Tide Shares which may be an inducement to deal or refrain
from dealing in such securities.

Checkit is not aware of any dealings in Crimson Tide Shares that would require
a minimum level, or particular form of consideration that it would be obliged
to offer under Rule 6 or Rule 11 of the Code (as appropriate).

21.  Documents Available For Inspection

 

Copies of the following documents are available, or will be made available
promptly and by no later than 12 noon (London time) on the Business Day
following this announcement, on www.checkit.net subject to certain
restrictions relating to persons resident in restricted jurisdictions:

·    This Announcement;

·    The irrevocable undertakings and letters of intent listed in Appendix
III;

·    The consent letters referred to in Section 22 below; and

·    The investor presentation titled "Creating a market leader in
workflow software solutions".

For the avoidance of doubt, the contents of any website referred to in this
announcement are not incorporated into and do not form part of this
announcement.

22.  General

 

The Scheme will be governed by English law and will be subject to the
jurisdiction of the courts of England and Wales. The Scheme will be subject to
the applicable requirements of the Takeover Code, the Panel, the London Stock
Exchange and the FCA.

 

The bases and sources of certain information contained in this announcement
are set out in Appendix II. Certain terms used in this announcement are
defined in Appendix V.

 

It is expected that the Scheme Document will be published as soon as
reasonably practicable and in any event within 28 days of the date of this
Announcement (unless agreed otherwise with the Panel). Further information
about the Merger will be set out in the Scheme Document.

 

This Announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation. For such purposes, the person responsible for
this Announcement on behalf of Checkit is Kit Kyte, Chief Executive Officer of
Checkit. The person responsible for this Announcement on behalf of Crimson
Tide is Philip Meyers, Chief Executive Officer of Crimson Tide

 

The LEI of Checkit is 213800556WJOWQNT2R68 and the LEI of Crimson Tide
is 213800YUNLNBVYR3G129.

 

Each of Singer Capital Markets Advisory LLP and Cavendish Capital Markets
Limited has given and not withdrawn its consent to the inclusion in this
announcement of references to its name in the form and context in which it
appears.

 

Important notices relating to financial advisers

 

Singer Capital Markets Advisory LLP, which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting as Financial
Adviser, Nominated Adviser and Broker exclusively for Checkit and no-one else
in connection with the matters set out in this announcement and will not
regard any other person as their client in relation to such matters and will
not be responsible to anyone other than Checkit for providing the protections
afforded to clients of Singer Capital Markets nor for providing advice in
relation to the Merger or any matter referred to in this announcement.

 

Cavendish Capital Markets Limited, which is authorised and regulated by the
Financial Conduct Authority in the United Kingdom, is acting exclusively for
Crimson Tide and for no one else in connection with the subject matter of this
Announcement and will not be responsible to anyone other than Crimson Tide for
providing the protections afforded to clients of Cavendish or for providing
advice in relation to the contents of this Announcement or any matters
referred to in this Announcement.

 

Further information

 

This Announcement is for information purposes only. It is not intended to and
does not constitute, or form part of, any offer, invitation or the
solicitation of an offer to purchase, otherwise acquire, subscribe for, sell
or otherwise dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the Merger or otherwise, nor shall
there be any sale, issuance or transfer of securities of Crimson Tide pursuant
to the Merger or otherwise in any jurisdiction in contravention of applicable
law. The Merger will be implemented solely by means of the Scheme Document
(or, in the event that the Merger is to be implemented by means of a Takeover
Offer, the offer document) which will contain the full terms and conditions of
the Merger, including details of how to vote in respect of the Merger (or, in
the case of a Takeover Offer, to accept the offer).

 

Crimson Tide will prepare the Scheme Document to be distributed to Crimson
Tide Shareholders. Crimson Tide and Checkit urge Crimson Tide Shareholders to
read the Scheme Document carefully as it will contain important information
relating to the Merger, the New Checkit Shares and the Combined Group. Any
decision to vote in respect of resolutions to be proposed at the Crimson Tide
Shareholder Meetings to approve the Merger, the Scheme or related matters,
should be made only on the basis of the information contained in the Scheme
Document.

 

It is expected that the Scheme Document (including notices of the Crimson Tide
Shareholder Meetings) together with the relevant Crimson Tide Forms of Proxy
will be sent to Crimson Tide Shareholders within 28 days of the date of this
Announcement (or on such later date as may be agreed by Checkit and Crimson
Tide with the consent of the Panel).

 

Checkit will prepare the Checkit Circular to be distributed to Checkit
Shareholders and which will be available on Checkit's website at
www.checkit.net and Crimson Tide's website at www.crimsontide.co.uk. Checkit
urges Checkit Shareholders to read the Checkit Circular when it becomes
available. Any decision to vote in respect of the Checkit Resolution should be
made only on the basis of the information in the Checkit Circular. It is
expected that the Checkit Circular (including the notice of the Checkit
General Meeting) together with the Checkit Form of Proxy, will be posted to
Checkit Shareholders as soon as is reasonably practicable and in any event
within 28 days of this Announcement, unless otherwise agreed with the Panel.

 

The statements contained in this Announcement are made as at the date of this
Announcement, unless some other time is specified in relation to them.

 

This Announcement does not constitute a prospectus or prospectus equivalent
document. The New Checkit Shares to be issued pursuant to the Merger are not
being offered to the public by means of this Announcement. The Merger will be
subject to the applicable requirements of the Takeover Code, the Panel, the
London Stock Exchange, the AIM Rules for Companies and the FCA.

 

Please be aware that addresses, electronic addresses and certain other
information provided by Crimson Tide Shareholders, persons with information
rights and other relevant persons for the receipt of communication by Crimson
Tide may be provided to Checkit during the Offer Period as required by section
4 of Appendix 4 to the Takeover Code.

 

Overseas Shareholders

This Announcement has been prepared for the purpose of complying with English
law, the Takeover Code, the Market Abuse Regulation, the AIM Rules and the
Disclosure Guidance and Transparency Rules and the information disclosed may
not be the same as that which would have been disclosed if this Announcement
had been prepared in accordance with the laws of jurisdictions outside of the
United Kingdom.

The release, publication or distribution of this Announcement in jurisdictions
other than the United Kingdom may be restricted by law and/or regulation.
Persons who are not resident in the United Kingdom, or who are subject to the
laws of other jurisdictions should inform themselves of, and observe, any
applicable legal or regulatory requirements. In particular, the ability of
persons who are not resident in the United Kingdom or who are subject to the
laws of another jurisdiction to participate in the Merger or to vote their
Crimson Tide Shares in respect of the Scheme at the Crimson Tide Court
Meeting, or to execute and deliver Crimson Tide Forms of Proxy appointing
another to vote at the Crimson Tide Court Meeting on their behalf, may be
affected by the laws of the relevant jurisdictions in which they are located
or to which they are subject. Any failure to comply with the applicable
requirements may constitute a violation of the laws and/or regulations of any
such jurisdiction. To the fullest extent permitted by applicable law, the
companies and persons involved in the Merger disclaim any responsibility or
liability for the violation of such restrictions by any person.

Unless otherwise determined by Checkit or required by the Takeover Code and
permitted by applicable law and regulation, participation in the Merger will
not be made available, directly or indirectly, in, into or from a Restricted
Jurisdiction where to do so would violate the laws in that jurisdiction and no
person may vote in favour of the Merger by any such use, means,
instrumentality or form within a Restricted Jurisdiction or any other
jurisdiction if to do so would constitute a violation of the laws of that
jurisdiction. Accordingly, copies of this Announcement and all documentation
relating to the Merger are not being, and must not be, directly or indirectly,
mailed or otherwise forwarded, distributed or sent in, into or from a
Restricted Jurisdiction where to do so would violate the laws in that
jurisdiction, and persons receiving this Announcement and all documents
relating to the Merger (including custodians, nominees and trustees) must not
mail or otherwise distribute or send them in, into or from such jurisdictions
as doing so may invalidate any purported vote in respect of the Merger.

If the Merger is implemented by way of a Takeover Offer (unless otherwise
permitted by applicable law and regulation), the Takeover Offer may not be
made, directly or indirectly, in or into or by use of the mails or any other
means or instrumentality (including, without limitation, facsimile, e-mail or
other electronic transmission, telex or telephone) of interstate or foreign
commerce of, or any facility of a national, state or other securities exchange
of any Restricted Jurisdiction and the Takeover Offer will not be capable of
acceptance by any such use, means, instrumentality or facilities or from
within any Restricted Jurisdiction.

The availability of the New Checkit Shares under the Merger to Crimson Tide
Shareholders who are not resident in the United Kingdom may be affected by the
laws of the relevant jurisdictions in which they are resident or to which they
are subject. Persons who are not resident in the United Kingdom or who are
subject to the laws of other jurisdictions should inform themselves of, and
observe, any applicable legal or regulatory requirements.

Further details in relation to Overseas Shareholders will be contained in the
Scheme Document.

 

Profit forecasts, estimates or quantified financial benefits statements

 

Checkit

 

The FY25 Checkit Profit Estimate is a profit estimate within the meaning of
Rule 28.1 of the Takeover Code. The FY25 Checkit Profit Estimate, the
assumptions and basis of preparation on which it is based and the Checkit
Directors' confirmation as required by Rule 28 of the Takeover Code, are set
out in Appendix IV of this Announcement.

 

Other than the FY25 Checkit Profit Estimate, no statement in this Announcement
is intended as a profit forecast or estimate for any period or a quantified
financial benefits statement and no statement in this Announcement should be
interpreted to mean that earnings or earnings per share for Checkit for the
current or future financial years would necessarily match or exceed the
historical published earnings or earnings per share for Checkit.

 

Crimson Tide

 

The FY24 Crimson Tide Profit Estimate is a profit estimate within the meaning
of Rule 28.1 of the Takeover Code. The FY24 Crimson Tide Profit Estimate, the
assumptions and basis of preparation on which it is based and the Crimson Tide
Directors' confirmation as required by Rule 28 of the Takeover Code, are set
out in Appendix IV of this Announcement.

 

Other than the FY24 Crimson Tide Profit Estimate, no statement in this
Announcement is intended as a profit forecast or estimate for any period or a
quantified financial benefits statement and no statement in this Announcement
should be interpreted to mean that earnings or earnings per share for Crimson
Tide for the current or future financial years would necessarily match or
exceed the historical published earnings or earnings per share for Crimson
Tide.

 

Disclosure requirements of the Code:

 

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of
any class of relevant securities of an offeree or of any securities exchange
offeror (being any offeror other than an offeror in respect of which it has
been announced that its offer is, or is likely to be, solely in cash) must
make an Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any securities
exchange offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in, and rights
to subscribe for, any relevant securities of each of (i) the offeree company
and (ii) any securities exchange offeror(s). An Opening Position Disclosure by
a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m.
(London time) on the 10th business day following the commencement of the offer
period and, if appropriate, by no later than 3.30 p.m. (London time) on the
10th business day following the announcement in which any securities exchange
offeror is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead make a
Dealing Disclosure.

 

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%
or more of any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the dealing
concerned and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree company and
(ii) any securities exchange offeror(s), save to the extent that these details
have previously been disclosed under Rule 8. A Dealing Disclosure by a person
to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London
time) on the business day following the date of the relevant dealing.

 

If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.

 

Opening Position Disclosures must also be made by Crimson Tide and by any
offeror and Dealing Disclosures must also be made by Crimson Tide, by any
offeror and by any persons acting in concert with any of them (see Rules 8.1,
8.2 and 8.4).

 

Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.

 

The defined terms used in this section "Disclosure requirements of the Code"
are defined in the Code which can be found on the Takeover Panel's website.

 

Rule 2.9 Disclosure

 

In accordance with Rule 2.9 of the Takeover Code, Crimson Tide announces that,
as at close of business on the Latest Practicable Date, it has 6,574,863
Crimson Tide Shares in issue and admitted to trading on the London Stock
Exchange. Crimson Tide has no Crimson Tide Shares held in treasury. The
International Securities Identification Number (ISIN) of the Crimson Tide
Shares is GB00BRJRV969.

 

In accordance with Rule 2.9 of the Takeover Code, Checkit announces that as at
close of business on the Latest Practicable Date, it has 108,008,562 Checkit
Shares in issue and admitted to trading on AIM. Checkit has no Checkit Shares
held in treasury. The ISIN of the Checkit Shares is GB00B0C5RG72.

 

Publication on a website

 

In accordance with Rule 26.1 of the Code, a copy of this announcement will be
made available (subject to certain restrictions relating to persons resident
in restricted jurisdictions) on Checkit's website at www.Checkit.net by no
later than 12 noon (London time) on the business day following the date of
this announcement. For the avoidance of doubt, the content of the website
referred to in this announcement is not incorporated into and does not form
part of this announcement.

 

Requesting Hard Copy Documents

 

Pursuant to Rule 30.3 of the Takeover Code, a person so entitled may request a
copy of this Announcement and any information incorporated into it by
reference to another source in hard copy form. A person may also request that
all future documents, announcements and information to be sent to that person
in relation to the Merger should be in hard copy form.

 

Checkit Shareholders may request a hard copy of this Announcement (and any
information incorporated by reference in this Announcement) by writing to MUFG
Corporate Markets, Central Square, 29 Wellington Street, Leeds LS1 4DL or by
calling MUFG Corporate Markets on +44 (0) 371 664 0321. Calls are charged at
the standard geographic rate and will vary by provider. Calls outside the
United Kingdom will be charged at the applicable international rate. The
helpline is open between 9.00 am - 5.30 pm, Monday to Friday excluding public
holidays in England and Wales. Please note that MUFG Corporate Markets cannot
provide any financial, legal or tax advice and calls may be recorded and
monitored for security and training purposes. It is important that you note
that unless you make such a request, a hard copy of this Announcement and any
such information incorporated by reference in it will not be sent to you. You
may also request that all future documents, announcements and information to
be sent to you in relation to the Merger should be in hard copy form.

 

Crimson Tide Shareholders may request a hard copy of this Announcement (and
any information incorporated by reference in this Announcement) by writing to
Neville Registrars Limited, Neville House, Steelpark Road, Halesowen, B62 8HD
or by calling Neville Registrars on +44 (0) 121 585 1131. Calls are charged at
the standard geographic rate and will vary by provider. Calls outside the
United Kingdom will be charged at the applicable international rate. The
helpline is open between 9.00 am - 5.00 pm, Monday to Friday excluding public
holidays in England and Wales. Please note that Neville Registrars cannot
provide any financial, legal or tax advice and calls may be recorded and
monitored for security and training purposes. It is important that you note
that unless you make such a request, a hard copy of this Announcement and any
such information incorporated by reference in it will not be sent to you. You
may also request that all future documents, announcements and information to
be sent to you in relation to the Merger should be in hard copy form.

 

Forward Looking Statements

 

This announcement may contain "forward-looking statements" relating to each of
Checkit, Crimson Tide and/or the Combined Group and the business sectors in
which they operate. Generally, the words "will", "may", "should", "continue",
"believes", "expects", "intends", "anticipates", "forecast", "plan" and
"project" or similar expressions identify forward-looking statements. Such
statements reflect Checkit's current views with respect to future events and
are subject to risks, assumptions and uncertainties that could cause the
actual results to differ materially from those expressed or implied in the
forward-looking statements. Many of these risks, assumptions and uncertainties
relate to factors that are beyond Checkit's abilities to control or estimate
precisely, such as future market conditions, changes in general economic and
business conditions and the behaviour of other market participants. Checkit
cannot give any assurance that the forward-looking statements will prove to
have been correct. The reader should not, therefore, place undue reliance on
these forward-looking statements, which speak only as of the date of this
announcement. Checkit does not undertake any obligation to update or revise
publicly any of the forward-looking statements set out in this announcement,
whether as a result of new information, future events or otherwise, except to
the extent legally required.

 

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.

 

 

 

APPENDIX I

 

CONDITIONS AND FURTHER TERMS OF THE MERGER

 

Part A: The Conditions

 

1.    The Merger will be conditional upon the Scheme becoming unconditional
and becoming Effective, subject to the Takeover Code, by not later than 11.59
p.m. on the Long Stop Date.

                Scheme conditions

2.    In addition, subject to Part B of this Appendix I and to the
requirements of the Panel, the Scheme will be conditional upon:

(a)

(i)        the approval of the Scheme by a majority in number of
Crimson Tide Scheme Shareholders representing not less than 75 per cent. of
the voting rights attaching to the Crimson Tide Scheme Shares held by such
Crimson Tide Scheme Shareholders (or the relevant class or classes thereof)
who are on the register of members of Crimson Tide at the Voting Record Time,
present and voting, either in person or by proxy, at the Crimson Tide Court
Meeting and at any separate class meeting which may be required by the Court
or at any adjournment of any such meetings;

(ii)       the Crimson Tide Court Meeting and any separate class meeting
which may be required by the Court or any adjournment of any such meeting
being held on or before the 22nd day after the expected date of the Crimson
Tide Court Meeting, to be set out in the Scheme Document in due course (or
such later date, if any, as may be agreed by Checkit and Crimson Tide in
writing and, if required, the Court may allow);

(b)

(i)        all resolutions necessary to approve and implement the
Scheme being duly passed by the requisite majority or majorities at the
Crimson Tide General Meeting, or at any adjournment of that meeting;

(ii)       the Crimson Tide General Meeting or any adjournment of that
meeting being held on or before the 22nd day after the expected date of the
Crimson Tide General Meeting, to be set out in the Scheme Document in due
course (or such later date, if any, as may be agreed by Checkit and Crimson
Tide in writing and, if required, the Court may allow);

(c)

(i)        the sanction of the Scheme by the Court with or without
modification (but subject to any such modification being acceptable to Checkit
and Crimson Tide) and the delivery of the Court Order to the Registrar of
Companies; and

(ii)       the Court Hearing being held on or before the 22nd day after
the expected date of the Court Hearing to be set out in the Scheme Document in
due course (or such later date, if any, as Checkit and Crimson Tide may agree
and, if required, the Court may allow);

Other conditions

3.         In addition, subject to Part B of this Appendix I and to
the requirements of the Panel, the Merger will be conditional upon the
following conditions and, accordingly, the necessary actions to make the
Scheme Effective will only be taken on the satisfaction or, where relevant,
waiver of the following conditions:

Checkit General Meeting

(a)             the passing at the Checkit General Meeting of any
resolution required to approve and implement the Merger and to authorise the
allotment and issue of the New Checkit Shares to Crimson Tide Scheme
Shareholders pursuant to the Merger;

Admission to trading on AIM

(b)             the London Stock Exchange having acknowledged to
Checkit or its agent (and such acknowledgement not having been withdrawn) that
the New Checkit Shares will be admitted to trading on AIM;

General Third Party official authorisations and regulatory clearances

(c)              no Third Party having given notice of a decision
to take, institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference (and, in each case, not having withdrawn
the same), or having enacted, made or proposed any statute, regulation,
decision or order, or change to published practice or having taken any other
steps, and there not continuing to be outstanding any statute, regulation,
decision or order, which in each case would or might reasonably be expected
to:

(i)           require, prevent or delay the divestiture, or
materially alter the terms envisaged for any proposed divestiture by any
member of the Wider Checkit Group or any member of the Wider Crimson Tide
Group of all or any portion of their respective businesses, assets or property
or impose any limitation on the ability of any of them to conduct their
respective businesses (or any of them) or to own any of their respective
assets or properties or any part thereof which, in any such case, is material
in the context of the Wider Checkit Group or the Wider Crimson Tide Group in
either case taken as a whole;

(ii)          require, prevent or delay the divestiture by any member
of the Wider Checkit Group of any shares or other securities in Crimson Tide;

(iii)         impose any material limitation on, or result in a delay
in, the ability of any member of the Wider Checkit Group directly or
indirectly to acquire or to hold or to exercise effectively any rights of
ownership in respect of shares or loans or securities convertible into shares
or any other securities (or the equivalent) in any member of the Wider Crimson
Tide Group or the Wider Checkit Group or to exercise voting or management
control over any such member;

(iv)         otherwise adversely affect the business, assets, profits
or prospects of any member of the Wider Checkit Group or of any member of the
Wider Crimson Tide Group to an extent which is material in the context of the
Wider Checkit Group or the Wider Crimson Tide Group in either case taken as a
whole;

(v)          make the Merger or its implementation or the offer or
proposed offer by Checkit or any member of the Wider Checkit Group of any
shares or other securities in, or control of Crimson Tide void, illegal,
and/or unenforceable under the laws of any jurisdiction, or otherwise,
directly or indirectly, restrain, restrict, prohibit, delay or otherwise
interfere with the same, or impose additional conditions or obligations with
respect thereto;

(vi)         except pursuant to the implementation of the Merger or,
if applicable, sections 974 to 991 of the Companies Act, require any member of
the Wider Checkit Group or the Wider Crimson Tide Group to offer to acquire
any shares or other securities (or the equivalent) or interest in any member
of the Wider Crimson Tide Group or the Wider Checkit Group owned by any third
party;

(vii)        impose any limitation on the ability of any member of the
Wider Crimson Tide Group to co-ordinate its business, or any part of it, with
the businesses of any other members which is adverse to and material in the
context of the Wider Crimson Tide Group taken as a whole or in the context of
the Merger; or

(viii)       result in any member of the Wider Crimson Tide Group
ceasing to be able to carry on business under any name under which it
presently does so, and all applicable waiting and other time periods
(including any extensions thereof) during which any such Third Party could
institute, implement or threaten any action, proceeding, suit, investigation,
enquiry or reference or any other step under the laws of any jurisdiction in
respect of the Merger or proposed offer for any Crimson Tide Shares having
expired, lapsed or been terminated;

(d)             the waiver (or non-exercise within any applicable
time limits) by any Third Party of any termination right, right of
pre-emption, first refusal or similar right (which is material in the context
of the Wider Crimson Tide Group taken as a whole) arising as a result of or in
connection with the Merger including, without limitation, its implementation
and financing or the proposed direct or indirect offer for any shares or other
securities in, or control or management of, Crimson Tide by Checkit or any
member of the Wider Checkit Group;

(e)             all necessary filings or applications having been
made in connection with the Merger and all statutory or regulatory obligations
in any jurisdiction having been complied with in connection with the Merger or
the offer by any member of the Wider Checkit Group for any shares or other
securities in, or control of, Crimson Tide and all authorisations, orders,
grants, recognitions, determinations, confirmations, consents, licences,
clearances, permissions, exemptions and approvals reasonably deemed necessary
or appropriate by Checkit or any member of the Wider Checkit Group for or in
respect of the Merger including without limitation, its implementation and
financing or the proposed direct or indirect offer for any shares or other
securities in, or control of, Crimson Tide or any member of the Wider Crimson
Tide Group by any member of the Wider Checkit Group having been obtained in
terms and in a form satisfactory to Checkit from all appropriate Third Parties
or persons with whom any member of the Wider Crimson Tide Group has entered
into contractual arrangements and all such material authorisations, orders,
grants, recognitions, determinations, confirmations, consents, licences,
clearances, permissions, exemptions and approvals necessary or appropriate to
carry on the business of any member of the Wider Crimson Tide Group which is
material in the context of the Checkit Group or the Crimson Tide Group as a
whole or of the financing of the Merger remaining in full force and effect and
all filings necessary for such purpose having been made and there being no
notice or intimation of any intention to revoke or not to renew any of the
same at the time at which the Merger becomes otherwise unconditional and all
necessary statutory or regulatory obligations in any jurisdiction having been
complied with;

Certain matters arising as a result of any arrangement, agreement etc.

(f)              save as Disclosed, there being no provision of
any agreement, arrangement, licence, permit or other instrument to which any
member of the Wider Crimson Tide Group is a party or by or to which any such
member or any of its assets may be bound, entitled or subject, or any
circumstance which in consequence of the Merger or the proposed offer for any
shares or other securities (or equivalent) in Crimson Tide or because of a
change in the control or management of Crimson Tide or otherwise, could or
might result in any of the following to an extent which is material and
adverse in the context of the Wider Crimson Tide Group, or the Wider Checkit
Group, in either case taken as a whole, or in the context of the Merger:

(i)           any monies borrowed by or any other indebtedness or
liabilities (actual or contingent) of, or grant available to any such member,
being or becoming repayable or capable of being declared repayable immediately
or earlier than their or its stated maturity date or repayment date or the
ability of any such member to borrow moneys or incur any indebtedness being
withdrawn or inhibited or being capable of becoming or being withdrawn or
inhibited;

(ii)          any such agreement, arrangement, licence, permit or
instrument or the rights, liabilities, obligations or interests of any such
member thereunder being terminated or adversely modified or affected or any
obligation or liability arising or any action being taken or arising
thereunder;

(iii)         any asset or interest of any such member being or
failing to be disposed of or charged or ceasing to be available to any such
member or any right arising under which any such asset or interest could be
required to be disposed of or charged or could cease to be available to any
such member otherwise than in the ordinary course of business;

(iv)         the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business, property,
assets or interest of any such member;

(v)          the rights, liabilities, obligations or interests of any
such member, or the business of any such member with, any person, firm,
company or body (or any arrangement or arrangements relating to any such
interest or business) being terminated, adversely modified or affected;

(vi)         the value of any such member or its financial or trading
position or prospects being prejudiced or adversely affected;

(vii)        any such member ceasing to be able to carry on business
under any name under which it presently does so; or

(viii)       the creation or acceleration of any liability, actual or
contingent, by any such member (including any material tax liability or any
obligation to obtain or acquire any material Authorisation, notice, waiver,
concession, agreement or exemption from any Third Party or any person) other
than trade creditors or other liabilities incurred in the ordinary course of
business or in connection with the Merger,

and no event having occurred which, under any provision of any agreement,
arrangement, licence, permit or other instrument to which any member of the
Wider Crimson Tide Group is a party or by or to which any such member or any
of its assets may be bound, entitled or subject, would or might reasonably be
expected to result in any of the events or circumstances as are referred to in
sub-paragraphs (i) to (viii) of this Condition;

Certain events occurring since Last Accounts Date

(g)             save as Disclosed, no member of the Wider Crimson
Tide Group having, since the Last Accounts Date:

(i)           save as between Crimson Tide and wholly-owned
subsidiaries of Crimson Tide or for Crimson Tide Shares issued under or
pursuant to the exercise of options and vesting of awards granted under the
Crimson Tide Share Scheme, issued or agreed to issue, authorised or proposed
the issue of additional shares of any class;

(ii)          save as between Crimson Tide and wholly-owned
subsidiaries of Crimson Tide or for the grant of options and awards and other
rights under the Crimson Tide Share Scheme, issued or agreed to issue,
authorised or proposed the issue of securities convertible into shares of any
class or rights, warrants or options to subscribe for, or acquire, any such
shares or convertible securities;

(iii)         other than to another member of the Crimson Tide Group,
prior to completion of the Merger, recommended, declared, paid or made any
dividend or other distribution payable in cash or otherwise or made any bonus
issue;

(iv)         save for intra-Crimson Tide Group transactions, merged or
demerged with any body corporate or acquired or disposed of or transferred,
mortgaged or charged or created any security interest over any assets or any
right, title or interest in any asset (including shares and trade investments)
or authorised or proposed or announced any intention to propose any merger,
demerger, disposal, transfer, mortgage, charge or security interest, in each
case, other than in the ordinary course of business and, in each case, to the
extent which is material in the context of the Wider Crimson Tide Group taken
as a whole;

(v)          save for intra-Crimson Tide Group transactions, made or
authorised or proposed or announced an intention to propose any change in its
loan capital in each case, to the extent which is material in the context of
the Wider Crimson Tide Group taken as a whole;

(vi)         issued, authorised or proposed the issue of, or made any
change in or to, any debentures or (save for intra-Crimson Tide Group
transactions), save in the ordinary course of business, incurred or increased
any indebtedness or become subject to any contingent liability;

(vii)        purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or, save in respect to the matters mentioned in sub-paragraphs (i) or (ii)
above, made any other change to any part of its share capital in each case, to
the extent which is material in the context of the Wider Crimson Tide Group
taken as a whole;

(viii)       save for intra-Crimson Tide Group transactions,
implemented, or authorised, proposed or announced its intention to implement,
any reconstruction, merger, demerger, amalgamation, scheme, commitment or
other transaction or arrangement otherwise than in the ordinary course of
business;

(ix)         entered into or varied or authorised, proposed or
announced its intention to enter into or vary any contract, transaction or
commitment (whether in respect of capital expenditure or otherwise) which is
of a long term, onerous or unusual nature or magnitude or which involves or
could involve an obligation of such a nature or magnitude other than in the
ordinary course of business, in each case, to the extent which is material in
the context of the Wider Crimson Tide Group taken as a whole;

(x)          (other than in respect of a member which is dormant and
was solvent at the relevant time) taken any corporate action or steps or had
any legal proceedings started or threatened against it in relation to the
suspension of payments, a moratorium of any indebtedness, its winding-up,
dissolution or reorganisation or for the appointment of a receiver,
administrative receiver, administrator, manager, trustee or similar officer of
all or any part of its assets or revenues or any analogous proceedings in any
jurisdiction or appointed any analogous person in any jurisdiction or had any
such person appointed, in each case, to the extent which is material in the
context of the Wider Crimson Tide Group taken as a whole;

(xi)         entered into any contract, transaction or arrangement
which would be restrictive on the business of any member of the Wider Crimson
Tide Group or the Wider Checkit Group other than of a nature and extent which
is normal in the context of the business concerned;

(xii)        waived or compromised any claim otherwise than in the
ordinary course of business which is material in the context of the Wider
Crimson Tide Group taken as a whole;

(xiii)       made any material alteration to its memorandum or articles
of association or other incorporation documents;

(xiv)       been unable, or admitted in writing that it is unable, to
pay its debts or commenced negotiations with one or more of its creditors with
a view to rescheduling or restructuring any of its indebtedness, or having
stopped or suspended (or threatened to stop or suspend) payment of its debts
generally or ceased or threatened to cease carrying on all or a substantial
part of its business;

(xv)        entered into any contract, commitment, arrangement or
agreement otherwise than in the ordinary course of business or passed any
resolution or made any offer (which remains open for acceptance) with respect
to or announced any intention to, or proposed to, effect any of the
transactions, matters or events referred to in this Condition 3(g);

(xvi)       made or agreed or consented to any change to:

(A)      the terms of the trust deeds constituting the pension scheme(s)
established by any member of the Wider Crimson Tide Group for its directors,
employees or their dependents;

(B)       the contributions payable to any such scheme(s) or to the
benefits which accrue or to the pensions which are payable thereunder;

(C)       the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or determined; or

(D)      the basis upon which the liabilities (including pensions) of
such pension schemes are funded, valued or made, in each case, to the extent
which is material in the context of the Wider Crimson Tide Group taken as a
whole;

(xvii)      proposed, agreed to provide or modified the terms of the
Crimson Tide Share Scheme or other benefit constituting a material change
relating to the employment or termination of employment of a material category
of persons employed by the Wider Crimson Tide Group or which constitutes a
material change to the terms or conditions of employment of any senior
employee of the Wider Crimson Tide Group, save as agreed by the Panel (if
required) and by Checkit, or entered into or changed the terms of any contract
with any director or senior executive;

(xviii)     taken (or agreed or proposed to take) any action which
requires, or would require, the consent of the Panel or the approval of
Crimson Tide Shareholders in general meeting in accordance with, or as
contemplated by, Rule 21.1 of the Code;

(xix)       entered into or varied in a material way the terms of, any
contracts, agreement or arrangement with any of the directors or senior
executives of any members of the Wider Crimson Tide Group; or

(xx)        waived or compromised any claim which is material in the
context of the Wider Crimson Tide Group taken as a whole, otherwise than in
the ordinary course;

No adverse change, litigation, regulatory enquiry or similar

(h)             except as Disclosed, since the date of the Last
Accounts Date:

(i)           no adverse change or deterioration having occurred in
the business, assets, financial or trading position or profits or prospects or
operational performance of any member of the Wider Crimson Tide Group which,
in any such case, is material in the context of the Wider Crimson Tide Group
taken as a whole and no circumstances have arisen which would or might
reasonably be expected to result in such adverse change or deterioration;

(ii)          no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the Wider Crimson Tide Group is
or may become a party (whether as a plaintiff, defendant or otherwise) and no
enquiry, review or investigation by, or complaint or reference to, any Third
Party or other investigative body against or in respect of any member of the
Wider Crimson Tide Group having been instituted, announced, implemented or
threatened by or against or remaining outstanding in respect of any member of
the Wider Crimson Tide Group which in any such case has had or might
reasonably be expected to have a material adverse effect on the Wider Crimson
Tide Group taken as a whole or in the context of the Merger;

(iii)         no contingent or other liability of any member of the
Wider Crimson Tide Group having arisen or become apparent to Checkit or
increased which has had or might reasonably be expected to have a material
adverse effect on the Wider Crimson Tide Group taken as a whole or in the
context of the Merger;

(iv)         no enquiry or investigation by, or complaint or reference
to, any Third Party having been threatened, announced, implemented, instituted
by or remaining outstanding against or in respect of any member by or the
Wider Crimson Tide Group which in any case is material in the context of the
Wider Crimson Tide Group taken as a whole;

(v)          no member of the Wider Crimson Tide Group having
conducted its business in breach of any applicable laws and regulations and
which is material in the context of the Wider Crimson Tide Group as a whole or
material in the context of the Merger; and

(vi)         no steps having been taken which are likely to result in
the withdrawal, cancellation, termination or modification of any licence or
permit held by any member of the Wider Crimson Tide Group which is necessary
for the proper carrying on of its business and the withdrawal, cancellation,
termination or modification of which has had, or would reasonably be expected
to have, a material adverse effect on the Wider Crimson Tide Group taken as a
whole;

No discovery of certain matters

(i)               save as Disclosed, Checkit not having
discovered:

(i)           that any financial or business or other information
concerning the Wider Crimson Tide Group disclosed at any time by or on behalf
of any member of the Wider Crimson Tide Group, whether publicly, to any member
of the Wider Checkit Group or otherwise, is materially misleading or contains
any material misrepresentation of fact or omits to state a fact necessary to
make any information contained therein not misleading, in each case to an
extent which is material in the context of the Wider Crimson Tide Group taken
as a whole; or

(ii)          that any member of the Wider Crimson Tide Group is
subject to any liability (actual or contingent) which is material in the
context of the Wider Crimson Tide Group taken as a whole; or

(iii)         any information which affects the import of any
information disclosed at any time by or on behalf of any member of the Wider
Crimson Tide Group and which is material in the context of the Wider Crimson
Tide Group taken as a whole;

Environmental

(j)              save as Disclosed, Checkit not having
discovered:

(i)           any past or present member of the Wider Crimson Tide
Group has not complied in all material respects with all applicable
legislation or regulations of any jurisdiction relating to the use, treatment,
storage, carriage, disposal, discharge, spillage, release, leak or emission of
any waste or hazardous substance or any substance likely to impair the
environment (including property) or harm human health or otherwise relating to
environmental matters or the health and safety of any person, or that there
has otherwise been any such use, treatment, handling, storage, transport,
release, disposal, discharge, spillage, leak or emission (whether or not this
constituted a non-compliance by any person with any legislation or regulations
and wherever the same may have taken place), which non-compliance would be
likely to give rise to any material liability including any penalty for
non-compliance (whether actual or contingent) or cost on the part of any
member of the Wider Crimson Tide Group, which in any case is material in the
context of the Wider Crimson Tide Group as a whole; or

(ii)          there is, or is likely to be, for any reason
whatsoever, any liability (actual or contingent) of any past or present member
of the Wider Crimson Tide Group to make good, remediate, repair, reinstate or
clean up any property or any controlled waters now or previously owned,
occupied, operated or made use of or controlled by any such past or present
member of the Wider Crimson Tide Group (or on its behalf) or by any person for
which a member of the Wider Crimson Tide Group is or has been responsible, or
in which any such member may have or previously have had or be deemed to have
had an interest, under any environmental legislation, regulation, notice,
circular or order of any Third Party and which is material in the context of
the Wider Crimson Tide Group taken as a whole or the Merger; or

(iii)         circumstances exist (whether as a result of the making
of the Merger or otherwise) which would be reasonably likely to lead to any
Third Party instituting, or whereby any member of the Wider Checkit Group or
any present or past member of the Wider Crimson Tide Group would be likely to
be required to institute, an environmental audit or take any other steps which
would in any such case be reasonably likely to result in any liability
(whether actual or contingent) to improve, modify existing or install new
plant, machinery or equipment or carry out changes in the processes currently
carried out or make good, remediate, repair, re-instate or clean up any land
or other asset currently or previously owned, occupied or made use of by any
past or present member of the Wider Crimson Tide Group (or on its behalf) or
by any person for which a member of the Wider Crimson Tide Group is or has
been responsible, or in which any such member may have or previously have had
or be deemed to have had an interest which is material in the context of the
Wider Crimson Tide Group taken as a whole or the Merger; or

(iv)         circumstances exist whereby a person or class of persons
would be likely to have any claim or claims in respect of any product or
process of manufacture or materials used therein currently or previously
manufactured, sold or carried out by any past or present member of the Wider
Crimson Tide Group which claim or claims would be likely, materially and
adversely, to affect any member of the Wider Crimson Tide Group and which is
material in the context of the Wider Crimson Tide Group taken as a whole or
the Merger;

Anti-corruption, economic sanctions, criminal property and money laundering

(k)             save as Disclosed, Checkit not having discovered:

(i)           (A) any past or present member, director, officer or
employee of the Wider Crimson Tide Group is or has at any time engaged in any
activity, practice or conduct which would constitute an offence under the
Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other
applicable anti-corruption or anti-bribery law, rule or regulation or any
other applicable law, rule, or regulation concerning improper payments or
kickbacks or (B) any person that performs or has performed services for or on
behalf of the Wider Crimson Tide Group is or has at any time engaged in any
activity, practice or conduct in connection with the performance of such
services which would constitute an offence under the Bribery Act 2010, the US
Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption
or anti-bribery law, rule or regulation or any other applicable law, rule, or
regulation concerning improper payments or kickbacks; or

(ii)          any asset of any member of the Wider Crimson Tide Group
constitutes criminal property as defined by section 340(3) of the Proceeds of
Crime Act 2002 (but disregarding paragraph (b) of that definition) or proceeds
of crime under any other applicable law, rule, or regulation concerning money
laundering or proceeds of crime or any member of the Wider Crimson Tide Group
is found to have engaged in activities constituting money laundering under any
applicable law, rule, or regulation concerning money laundering; or

(iii)         any past or present member, director, officer or
employee of the Wider Crimson Tide Group, or any other person for whom any
such person may be liable or responsible, is or has engaged in any business
with, made any investments in, made any funds or assets available to or
received any funds or assets from:

(A)      any government, entity or individual in respect of which US, UK
or European Union persons, or persons operating in those territories, are
prohibited from engaging in activities or doing business, or from receiving or
making available funds or economic resources, by US, UK or European Union laws
or regulations, including the economic sanctions administered by the United
States Office of Foreign Assets Control, or HMRC; or

(B)       any government, entity or individual targeted by any of the
economic sanctions of the United Nations, the United States, the United
Kingdom, the European Union or any of its member states, save that this shall
not apply if and to the extent that it is or would be unenforceable by reason
of breach of any applicable Blocking Law; or

(iv)         any past or present member, director, officer or employee
of the Wider Crimson Tide Group, or any other person for whom any such person
may be liable or responsible:

(A)      has engaged in conduct which would violate any relevant
anti-terrorism laws, rules, or regulations, including but not limited to the
U.S. Anti-Terrorism Act; or

(B)       has engaged in conduct which would violate any relevant
anti-boycott law, rule, or regulation or any applicable export controls,
including but not limited to the Export Administration Regulations
administered and enforced by the U.S. Department of Commerce or the
International Traffic in Arms Regulations administered and enforced by the
U.S. Department of State; or

(C)       has engaged in conduct which would violate any relevant laws,
rules, or regulations concerning human rights, including but not limited to
any law, rule, or regulation concerning false imprisonment, torture or other
cruel and unusual punishment, or child labour; or

(D)      is debarred or otherwise rendered ineligible to bid for or to
perform contracts for or with any government, governmental instrumentality, or
international organization or found to have violated any applicable law, rule,
or regulation concerning government contracting or public procurement; or

(E)       any member of the Wider Crimson Tide Group is or has been
engaged in any transaction which would cause Checkit to be in breach of any
law or regulation in connection with the Merger, including but not limited to
the economic sanctions of the United States Office of Foreign Assets Control,
or HMRC, or any other relevant government authority; and

Intellectual Property

(l)               save as Disclosed, no circumstance having
arisen or event having occurred in relation to any intellectual property owned
or used by any member of the Wider Crimson Tide Group which would have a
material adverse effect on the Wider Crimson Tide Group taken as a whole or is
otherwise material in the context of the Merger, including:

(i)           any member of the Wider Crimson Tide Group losing its
title to any intellectual property, or any intellectual property owned by the
Wider Crimson Tide Group being revoked, cancelled or declared invalid; or

(ii)          any claim being asserted in writing or threatened in
writing by any person challenging the ownership of any member of the Wider
Crimson Tide Group to, or the validity or effectiveness of, any of its
intellectual property; or

(iii)         any agreement regarding the use of any intellectual
property licensed to or by any member of the Wider Crimson Tide Group being
terminated or varied.

For the purpose of these Conditions:

1.           "Third Party" means any central bank, government,
government department or governmental, quasi-governmental, supranational,
statutory, regulatory, environmental or investigative body, authority, court,
trade agency, association, institution or professional or environmental body
in any relevant jurisdiction, including, for the avoidance of doubt, the
Panel; and

 

2.           a Third Party shall be regarded as having "intervened"
if it has given notice to take, institute, implement or threaten any action,
proceeding, suit, investigation, enquiry or reference or made, proposed or
enacted any statute, regulation, decision or order or taken any measures or
other steps or required any action to be taken or information to be provided
or otherwise having done anything and "intervene" shall be construed
accordingly.

 

Part B: Further terms of the Merger and the Scheme

Waiver and Invocation of Conditions

1.           Subject to the requirements of the Panel, Checkit
reserves the right in its sole discretion to waive in whole or in part, all or
any of the Conditions set out in Part A above, except Conditions 2(a)(i),
2(b)(i), 2(c)(i), 3(a) and 3(b) which cannot be waived. If any of the
Conditions 2(a)(ii), 2(b)(ii) or 2(c)(ii) is not satisfied by the relevant
deadline specified in the relevant Condition, Checkit shall make an
announcement by 8.00 a.m. on the Business Day following such deadline
confirming whether it has invoked the relevant Condition, waived the relevant
deadlines or agreed with Crimson Tide to extend the relevant deadline.

2.           Conditions 2(a)(i), 2(b)(i) and 3(a) to 3(l)
(inclusive) in Part A above must each be fulfilled by, or (if capable of
waiver) be waived by, Checkit or Crimson Tide (as the case may be) by no later
than 11.59 p.m. on the date immediately preceding the date of the Court
Hearing (or such later date as Checkit, Crimson Tide, the Panel and, if
required, the Court may allow) failing which the Scheme will lapse.

3.           Under Rule 13.5(a) of the Code, Checkit may not invoke
a Condition that is subject to Rule 13.5(a) of the Code so as to cause the
Scheme not to proceed, to lapse or to be withdrawn unless the circumstances
which give rise to the right to invoke the condition are of material
significance to Checkit in the context of the Merger. Checkit may only invoke
a Condition that is subject to Rule 13.5(a) of the Code with the consent of
the Panel and any Condition that is subject to Rule 13.5(a) of the Code may be
waived by Checkit. Conditions 1, 2(a)(i), 2(b)(i) and 2(c)(i), 3(a) and 3(b)
in Part A above and, if applicable, any acceptance condition (if the Merger is
implemented by means of a Takeover Offer), are not subject to Rule 13.5(a) of
the Code.

4.           Checkit shall not be under any obligation to waive (if
capable of waiver), to determine to be or remain satisfied or to treat as
fulfilled any of the Conditions by a date earlier than the latest date of the
fulfilment of that Condition notwithstanding that the other Conditions to the
Merger may at such earlier date have been waived or fulfilled and that there
are at such earlier date no circumstances indicating that any such conditions
may not be capable of fulfilment.

Implementation by way of Takeover Offer

5.           Subject to obtaining the consent of the Panel, Checkit
reserves the right to elect to implement the Merger by way of a Takeover Offer
as an alternative to the Scheme.

6.           In such event, such Takeover Offer will be implemented
on the same terms and conditions and conditions so far as applicable, as those
which would apply to the Scheme (subject to appropriate amendments, including
an acceptance condition set at up to 90 per cent. of the Crimson Tide Shares
to which the Takeover Offer relates (or such lower percentage as the Panel may
agree provided that if the Takeover Offer became or was declared unconditional
in all respects, it would result in Checkit holding Crimson Tide Shares
carrying greater than 50 per cent. of the voting rights in Crimson Tide)).

Rights attaching to Crimson Tide Shares and Dividends

7.           Crimson Tide Shares will be acquired by Checkit fully
paid and free from all liens, charges, encumbrances and other third party
rights of any nature whatsoever and together with all rights attaching to
them, including the right to receive and retain all dividends and
distributions (if any) declared, made or paid or becoming payable by reference
to a record date falling on or after the Effective Date.

8.           The New Checkit Shares will be issued credited as fully
paid and will rank pari passu in all respects with the existing Checkit
Shares. Application will be made to the London Stock Exchange for the New
Checkit Shares to be admitted to trading on the AIM Market of the London Stock
Exchange.

9.           Fractions of New Checkit Shares will not be allotted or
issued pursuant to the Merger, but entitlements of Crimson Tide Shareholders
will be rounded down to the nearest whole number of New Checkit Shares and all
fractions of New Checkit Shares will be aggregated and sold in the market as
soon as practicable after the Merger becomes Effective. The net proceeds of
such sale (after deduction of all expenses and commissions incurred in
connection with the sale) will be distributed in due proportions to Crimson
Tide Shareholders who would otherwise have been entitled to such fractions
(rounded down to the nearest penny), save that individual entitlements to
amounts of less than £5.00 will be retained for the benefit of the Combined
Group.

10.         If, on or after the date of this Announcement, and prior
to the Merger becoming Effective, any dividend, distribution or return of
capital or value is declared, made or paid or becomes payable in respect of
Crimson Tide Shares with a record date on or before the Effective Date (a
"Crimson Tide Dividend"), Checkit reserves the right (without prejudice to any
right of Checkit, with the consent of the Panel, to invoke the Condition set
out in paragraph 3(g)(iii) of Part A of this Appendix I) to reduce Exchange
Ratio accordingly so as to reflect the aggregate value attributable to any
such Crimson Tide Dividend. Any exercise by Checkit of its rights to reduce
the Exchange Ratio in the circumstances described above shall be the subject
of an announcement but, for the avoidance of doubt, shall not be regarded as
constituting any revision or variation of the terms of the Merger. For the
avoidance of doubt, to the extent that a dividend, distribution or other
return of value in respect of Crimson Tide Shares has been declared, paid,
made or is payable, and is or shall be: (i) transferred pursuant to the Merger
on a basis which entitles Checkit to receive the dividend, distribution or
other return of value and to retain it; or (ii) cancelled before the Effective
Date, the Exchange Ratio payable and the terms of the Merger shall not be
subject to change and shall not be reduced in accordance with the above.

Other terms of the Merger

11.         If Checkit is required by the Panel to make an offer for
Crimson Tide Shares under the provisions of Rule 9 of the Code, Checkit may
make such alterations to the Conditions and certain further terms of the
Merger as are necessary to comply with the provisions of that Rule.

12.         The availability of the Merger to persons not resident in
the United Kingdom may be affected by the laws of the relevant jurisdictions.
Persons who are not resident in the United Kingdom or who are subject to the
laws of any jurisdiction other than the United Kingdom should inform
themselves about and observe any applicable requirements. Further details in
relation to Overseas Shareholders will be contained in the Scheme Document.

13.         The Merger will not be made, directly or indirectly, in or
into, or by use of the mails of, or by any means or instrumentality
(including, without limitation, facsimile transmission, telephone, internet or
e-mail) of interstate or foreign commerce of, or of any facility of a national
securities exchange of, any Restricted Jurisdiction and it will not be capable
of acceptance by any such use, means, instrumentality or facility or from
within any Restricted Jurisdiction.

14.         The New Checkit Shares to be issued pursuant to the Merger
have not been and will not be registered under the US Securities Act or under
any laws or with any securities regulatory authority of any state or other
jurisdiction of the United States nor under any of the relevant securities
laws of any Restricted Jurisdiction. Accordingly, the New Checkit Shares may
not be offered, sold or delivered, directly or indirectly, into the United
States, or any other Restricted Jurisdiction, except pursuant to exemptions
from applicable requirements of any such jurisdiction.

15.         The Merger will be subject, inter alia, to the Conditions
and certain further terms which are set out in this Appendix I and to the full
terms and conditions which will be set out in the Scheme Document and such
further terms as may be required to comply with the AIM Rules and the
provisions of the Code.

16.         This announcement and any rights or liabilities arising
hereunder are, and the Merger, the Scheme, and any proxies will be, governed
by English law and will be subject to the jurisdiction of the courts of
England and Wales. The Scheme will be subject to the applicable requirements
of the Code, the Panel, the London Stock Exchange, the FCA and the AIM Rules.

17.         Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other Condition.

 

 

 

APPENDIX II

 

SOURCES OF INFORMATION AND BASES OF CALCULATION

 

(i)            As at 10 February 2024 (being the latest practicable
day prior to this Announcement), there were 6,574,863 Crimson Tide Shares in
issue. The International Securities Identification number for Crimson Tide
Shares is GB00BRJRV969.

 

(ii)           As at 10 February 2024 (being the latest practicable
day prior to this Announcement), there were 108,008,562 Checkit Shares in
issue. The International Securities Identification number for Checkit Shares
is GB00B0C5RG72.

 

(iii)          Any reference to the issued and to be issued share
capital of Crimson Tide are based on the 6,574,863 Crimson Tide Shares
referred to in paragraph (i).

 

(iv)         The value of the Merger by reference to the existing
issued share capital of Crimson Tide is based on the issued and to be issued
share capital of Crimson Tide (as set out in paragraph (iii) above).

 

(v)          Unless otherwise stated, all prices and closing prices
for the Crimson Tide Shares and Checkit Shares are closing middle market
quotations derived from the Daily Official List.

 

(vi)         The enlarged share capital of 147,457,740 shares in
Checkit immediately following Completion has been calculated as the sum of:

a.    The current share capital of Checkit; plus

b.    39,449,178 New Checkit Shares, which may be issued under the terms of
the Merger (calculated as the number of the issued and to be issued ordinary
share capital of Crimson Tide as set out in paragraph (iii) above multiplied
by the Exchange Ratio).

 

(vii)        The percentage of the share capital of Checkit that
Crimson Tide Shareholders will own following Completion is calculated on the
basis of:

a.    The issued share capital of Checkit (as set out in paragraph (ii)
above); and

b.    The 39,449,178 New Checkit Shares that Crimson Tide Shareholders will
receive under the terms of the Merger, based on the fully diluted share
capital of Crimson Tide (as set out in paragraph (iii) and an exchange ratio
of 6 New Checkit Shares for each Crimson Tide Share.

 

(viii)       The pro forma cash balance of the Enlarged Group following
Completion of approximately £7.2 million (before deal costs) has been
calculated as the sum of:

a.    Checkit's cash balance as at 31 January 2025 of approximately £5.1
million; and

b.    Crimson Tide's cash balance as at 31 December 2024 of approximately
£2.1 million.

 

(ix)         Based on a valuation of 16.5 pence per New Checkit Share
(being the middle market closing price of a Checkit Share on 10 February 2024,
being the latest practicable day prior to this Announcement), the Merger
values each Crimson Tide Share at 99 pence.

 

(x)          Unless otherwise stated, the financial information
relating to the Checkit Group is extracted (without adjustment) from the
audited financial statements of the Checkit Group for the 12 months ended 31
January 2024 and the unaudited interim results of the Checkit Group for the 6
months ended 31 July 2024.

 

(xi)         Unless otherwise stated, the financial information
relating to the Crimson Tide Group is extracted (without adjustment) from the
audited financial statements of the Crimson Tide Group for the 12 months ended
31 December 2023 and the unaudited interim results of the Crimson Tide Group
for the 6 months ended 30 June 2024.

 

(xii)        All information relating to Checkit has been provided by
persons duly authorised by the Checkit Board.

(xiii)       All information relating to Crimson Tide has been provided
by persons duly authorised by the Crimson Tide Board.

(xiv)       Certain figures contained in this announcement have been
subject 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.

 

 

APPENDIX III

 

DETAILS OF IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT

 

Irrevocable Undertakings and letters of support in connection with the Crimson
Tide Shareholder Meetings

 

PART A - Irrevocable undertakings in respect of Crimson Tide Shares from
Crimson Tide Directors

 

The following Crimson Tide Directors have given irrevocable undertakings in
respect of their entire beneficial holdings of Crimson Tide Shares (and in
respect of the Crimson Tide Shares in which certain of their connected persons
are interested) to vote, or procure votes, in favour of the Scheme at the
Crimson Tide Court Meeting and in favour of the Crimson Tide Resolution to be
proposed at the Crimson Tide General Meeting (or in the event that the Merger
is implemented by way of a Takeover Offer, accept or procure the acceptance of
the Takeover Offer), in relation to 90,858 Crimson Tide Shares, representing,
in aggregate, approximately 1.38 per cent. of Crimson Tide's existing issued
ordinary share capital as at the Latest Practicable Date:

 

 Name of Crimson Tide Director  Number of Crimson Tide Shares  Percentage of issued ordinary share capital of Crimson Tide as at the Latest
                                                               Practicable Date
 Jacqueline Daniell             16,722                         0.25
 Philip Meyers                  -                              -
 Luke Jeffrey                   73,251                         1.11
 Pieter Hurter                  885                            0.01
 Janet Morris                   -                              -
 James Joyce                    -                              -

These irrevocable undertakings will continue to be binding in the event that a
higher competing offer is made for Crimson Tide.

 

Each of these irrevocable undertakings will lapse, among other things:

 

·        if Checkit announces, with the consent of the Panel, that it
does not intend to proceed with the Merger;

 

·        if any competing offer for Crimson Tide becomes or is
declared unconditional in all respects or otherwise becomes effective; or

 

·        on and from the earlier of (a) the Long Stop Date or (b) the
time and date on which the Merger is withdrawn, lapses or otherwise terminates
in accordance with its terms (provided that the reason is not because Checkit
has elected to proceed by way of a Takeover Offer rather than by way of a
Scheme or vice versa).

 

PART B - Irrevocable undertakings in respect of Crimson Tide Shares from other
Crimson Tide Shareholders

 

The following Crimson Tide Shareholder has given an irrevocable undertaking in
respect of the Crimson Tide Shares in which it is interested to vote, or
procure votes, in favour of the Scheme at the Crimson Tide Court Meeting and
in favour of the Crimson Tide Resolution to be proposed at the Crimson Tide
General Meeting (or in the event that the Merger is implemented by way of a
Takeover Offer, accept or procure the acceptance of the Takeover Offer), in
relation to 347,666 Crimson Tide Shares, representing, in aggregate,
approximately 5.29 per cent. of Crimson Tide's existing issued ordinary share
capital as at the Latest Practicable Date:

 

 Name of Crimson Tide Shareholder    Number of Crimson Tide Shares  Percentage of issued ordinary share capital of Crimson Tide as at the Latest
                                                                    Practicable Date
 William Currie Investments Limited  347,666                        5.29

 

This irrevocable undertaking will lapse, among other things:

 

·        if Checkit announces, with the consent of the Panel, that it
does not intend to proceed with the Merger;

 

·        if any competing offer for Crimson Tide becomes or is
declared unconditional in all respects or otherwise becoming effective;

 

·        on and from the earlier of (a) the Long Stop Date or (b) the
time and date on which the Merger is withdrawn, lapses or otherwise terminates
in accordance with its terms (provided that the reason is not because Checkit
has elected to proceed by way of a Takeover Offer rather than by way of a
Scheme or vice versa); or

 

·        if, within ten business days after the despatch of the Scheme
Document, a third party announces, in accordance with Rule 2.7 of the Takeover
Code, a firm intention to make an offer to acquire all the issued and to be
issued equity share capital of Crimson Tide for a consideration per share
which represents at least 10 per cent. greater than the value of the
consideration per share available under the Merger as at the date of such
third party announcement and Checkit does not within 14 business days of such
third party announcement increase the consideration payable under the Merger
to an amount which is equal to or exceeds the value of such third party offer.

 

PART C - Letters of support in respect of Crimson Tide Shares from Crimson
Tide Shareholders

 

The following Crimson Tide Shareholders have given a non-binding letter of
support indicating their intention to vote, or procure votes, in favour of the
Crimson Tide Resolution to be proposed at the Crimson Tide General Meeting, in
relation to 1,358,333 Crimson Tide Shares, representing, in aggregate,
approximately 20.66 per cent. of Crimson Tide's existing issued ordinary share
capital as at close of business on the Latest Practicable Date:

 

 Name of Crimson Tide Shareholder            Number of Crimson Tide Shares  Percentage of issued share capital of Crimson Tide as at the Latest
                                                                            Practicable Date
 Canaccord Genuity Asset Management Limited  720,000                        10.95
 Herald Investment Management Limited        323,333                        4.92
 Octopus Investments                         315,000                        4.79

 

Copies of these irrevocable undertakings and letters of intent will be made
available promptly and by no later than 12 noon (London time) on the Business
Day following this announcement, on www.Checkit.net, subject to certain
restrictions relating to persons resident in Restricted Jurisdictions, until
the end of the Merger.

 

 

APPENDIX IV

 

PROFIT ESTIMATES

 

Part A: Checkit Profit Estimate

On 25 April 2024, in the announcement of its final results for the year ended
31 January 2024, Checkit updated the market in relation to FY25 trading with
reference to the market expectations immediately prior to that announcement
and which were for Adjusted LBITDA of £2.3 million:

"Trading since the start of the new financial year has seen continued momentum
in line with the Board's and market expectations."

 

"Looking forward, the Board is optimistic about meeting market expectations
for FY25."

 

On 12 September 2024, in the announcement of its interim results for the six
months ended 31 July 2024, Checkit again updated the market in relation to
FY25 with reference to the market expectations immediately prior to that
announcement which were for Adjusted LBITDA of £2.3 million.

 

"the Board remains confident of delivering market expectations for revenue and
LBITDA for this financial year."

 

"we remain on track to meet market revenue and LBITDA expectations for the
current year."

 

Application of Rule 28 to the Checkit Profit Estimate

The statements from Checkit above set an expectation for the 12 months ended
31 January 2025 (the "FY25 Checkit Profit Estimate"). The FY25 Checkit Profit
Estimate is a profit estimate for the purposes of Rule 28.1 of the Takeover
Code.

Checkit Directors' confirmation

The Checkit Directors have considered the FY25 Checkit Profit Estimate and
confirm that it remains valid as at the date of this Announcement. The Checkit
Directors confirm that the FY25 Checkit Profit Estimate has been properly
compiled and that the basis of accounting used is consistent with Checkit's
accounting policies which are in accordance with International Financial
Reporting Standards and those that Checkit applied in preparing its financial
statements for the year ended 31 January 2024.

Basis of preparation and assumptions

The Checkit Profit Estimate is based on the unaudited management accounts of
Checkit for the year ended 31 January 2025. The Checkit Profit Estimate is not
based on any assumptions.

Part B: FY24 Crimson Tide Profit Estimate

On 26 September 2024, in the announcement of its interim results for the six
months to 30 June 2024, Crimson Tide updated the market in relation to trading
for the full year to 31 December 2024 with reference to board expectations
immediately prior to that announcement:

 

"Given the increased sales cycle, our expectation is that revenue and EBITDA
for H2 2024 will be broadly in line with H1 2024, evidencing good year on year
EBITDA growth, albeit on flat revenues."

Application of Rule 28 to the FY24 Crimson Tide Profit Estimate

The FY24 Crimson Tide Profit Estimate is a profit estimate for the purpose of
Rule 28.1 of the Takeover Code.

 

Crimson Tide Directors' confirmation

The Crimson Tide Directors have considered the FY24 Crimson Tide Profit
Estimate and confirm that it remains valid as at the date of this
Announcement.  The Crimson Tide Directors confirm that the FY24 Crimson Tide
Profit Estimate has been properly compiled and that the basis of accounting
used is consistent with Crimson Tide's accounting policies which are in
accordance with International Financial Reporting Standards and those that
Crimson Tide applied in preparing its financial statements for the year ended
31 December 2023.

Basis of preparation and assumptions

The FY24 Crimson Tide Profit Estimate is based on the unaudited management
accounts of Crimson Tide for the year ended 31 December 2024.  The FY24
Crimson Tide Profit Estimate is not based on any assumptions.

 

 

 

APPENDIX V

 

DEFINITIONS

 

 Admission                                   admission of the New Checkit Shares to trading on AIM
 AIM                                         the AIM Market operated by the London Stock Exchange
 AIM Rules                                   the AIM Rules for Companies published by the London Stock Exchange (as
                                             amended from time to time)
 Announcement                                this Announcement of which the Appendices form part
 Appendices                                  the appendices to this Announcement
 Authorisations                              authorisations, orders, grants, recognitions, determinations, certificates,
                                             confirmations, consents, licences, clearances, provisions, permissions and
                                             approvals;
 Blocking Law                                Council Regulation EC No 2271/1996 of 22 November 1996 ("Blocking Regulation")
                                             or any law or regulation implementing the Blocking Regulation in any member
                                             state of the European Union or the United Kingdom
 Board                                       board of directors
 Business Day                                a day (excluding Saturdays, Sundays and public holidays) on which banks are
                                             open for business in the City of London and Jersey
 Cavendish                                   Cavendish Capital Markets Limited
 Checkit                                     Checkit plc
 Checkit Circular                            the circular relating to the Checkit Resolution and convening the Checkit
                                             General Meeting to be published and sent by Checkit to the Checkit
                                             Shareholders
 Checkit Directors                           the directors of Checkit at the time of this announcement
 Checkit Form of Proxy                       the form of proxy which will accompany the Checkit Circular
 Checkit General Meeting                     the general meeting of Checkit to be convened in connection with the Merger,
                                             notice of which will be set out in the Checkit Circular, including any
                                             adjournment thereof
 Checkit Group                               Checkit and its subsidiaries as at the date of this Announcement
 Checkit Resolution                          the resolution to be proposed at the Checkit General Meeting to authorise the
                                             allotment of the New Checkit Shares
 Checkit Shareholders                        the holders of Checkit Shares
 Checkit Shares                              the allotted and issued ordinary shares of 5 pence each in the capital of
                                             Checkit
 Closing Price                               the closing middle market quotation of a share derived from the AIM Appendix
                                             to the Daily Official List of the London Stock Exchange
 Code or Takeover Code                       the City Code on Takeovers and Offers
 Combined Group                              the Checkit Group as enlarged by the acquisition of the Crimson Tide Group
                                             following Completion
 Companies Act                               the UK Companies Act 2006, as amended from time to time
 Completion                                  the date on which the Merger becomes Effective
 Conditions                                  the conditions to the Merger set out in ‎Appendix I of this Announcement,
                                             and Condition means any one of them
 Court                                       the High Court of Justice in England and Wales;
 Court Hearing                               the hearing by the Court of the application to sanction the Scheme;
 Court Order                                 the order of the Court sanctioning the Scheme under section 899 of the
                                             Companies Act;
 CREST                                       the computerised settlement system (as defined in the CREST Regulations)
                                             operated by Euroclear UK & International Limited which facilitates the
                                             transfer of title to shares in uncertificated form
 CREST Regulations                           the Uncertificated Securities Regulations 2001 (SI 2001/3755), as amended
 Crimson Tide                                Crimson Tide plc
 Crimson Tide Court Meeting                  the meeting of the Crimson Tide Scheme Shareholders to be convened by order of
                                             the Court pursuant to section 896 of the Companies Act, for the purpose of
                                             approving the Scheme, including any adjournment of it, notice of which shall
                                             be contained in the Scheme Document
 Crimson Tide Directors                      the directors of Crimson Tide at the time of this announcement
 Crimson Tide Forms of Proxy                 the forms of proxy for voting at the Crimson Tide Shareholder Meetings which
                                             will accompany the Scheme Document;
 Crimson Tide General Meeting                the general meeting of Crimson Tide to be convened in connection with the
                                             Scheme, including any adjournment of it, and expected to be held immediately
                                             following the Crimson Tide Court Meeting and notice of which shall be
                                             contained in the Scheme Document
 Crimson Tide Group                          Crimson Tide and its subsidiaries as at the date of this Announcement
 Crimson Tide Resolution                     the special resolution to be proposed at the Crimson Tide General Meeting
                                             authorising the Crimson Tide Directors to take all required action in relation
                                             to the Scheme and amending Crimson Tide's articles of association and such
                                             other matters as may be necessary to implement the Scheme
 Crimson Tide Scheme Shareholders            the holders of Crimson Tide Scheme Shares from time to time
 Crimson Tide Scheme Shares                  the Crimson Tide Shares:

                                             (a)       in issue at the date of the Scheme Document;

                                             (b)       (if any) issued after the date of the Scheme Document and
                                             before the Voting Record Time; and

                                             (c)        (if any) issued at or after the Voting Record Time but at or
                                             before the Scheme Record Time, either on terms that the original or any
                                             subsequent holders of such shares are to be bound by the Scheme or in respect
                                             of which their holders are, or shall by such time have agreed in writing to
                                             be, bound by the Scheme,

                                             and, in each case, remaining in issue at the Scheme Record Time but excluding
                                             any Crimson Tide Scheme Shares held as treasury shares at any relevant date or
                                             time and any Crimson Tide Scheme Shares registered in the name of, or
                                             beneficially owned by, Checkit or its nominees or any other member of the
                                             Checkit Group at any relevant date or time
 Crimson Tide Shareholder Meetings           together, the Crimson Tide Court Meeting and the Crimson Tide General Meeting
 Crimson Tide Shareholders                   the holders of Crimson Tide Shares
 Crimson Tide Shares                         the allotted and issued ordinary shares of 10 pence each in the capital of
                                             Crimson Tide
 Crimson Tide Share Scheme                   Crimson Tide's Enterprise Management Incentive share option scheme
 Daily Official List                         the Daily Official List published by the London Stock Exchange
 Dealing Disclosure                          an announcement pursuant to Rule 8 of the Takeover Code containing details of
                                             dealings in the relevant securities of a party to an offer
 Disclosed                                   the information fairly disclosed by or on behalf of Crimson Tide: (i) in the
                                             annual report and accounts of Crimson Tide for the financial year ended 31
                                             December 2023 and the interim results for the period 30 June 2024; (ii) in any
                                             other public announcement made by Crimson Tide on a Regulatory Information
                                             Service before the date of the Announcement; (iii) in this Announcement; (iv)
                                             in the information made available to Checkit in the data room established by
                                             Crimson Tide (or Crimson Tide's advisers) for the purposes of the Merger on or
                                             before 6.30 p.m. on 10 February 2025; or (v) as otherwise fairly disclosed by
                                             or on behalf of Crimson Tide to Checkit (or its officers, employees, agents or
                                             advisers) before the date of this Announcement
 Disclosure Guidance and Transparency Rules  the disclosure rules and transparency rules made by the FCA pursuant to
                                             section 73A of FSMA
 Effective                                   in the context of the Merger:

                                             (i) if the Merger is implemented by way of a Scheme of Arrangement, the Scheme
                                             having become effective in accordance with its terms; or

                                             (ii) if the Merger is implemented by way of a takeover offer as defined in
                                             Chapter 3 of Part 28 of the Companies Act, the Merger having been declared or
                                             become unconditional in accordance with the requirements of the Code
 Effective Date                              the date on which the Merger becomes or is declared Effective
 EMI Scheme                                  Crimson Tide's Enterprise Management Incentive Scheme
 Exchange Ratio                              6 new Checkit Shares for every 1 Crimson Tide Share and, where the terms of
                                             the Merger allow, any subsequent adjustment thereof
 FCA                                         the Financial Conduct Authority or its successor from time to time
 FSMA                                        the Financial Services and Markets Act 2000 (as amended from time to time)
 "FY24 Crimson Tide Profit Estimate"         the profit estimate included within Crimson Tide's interim results
                                             announcement released on 26 September 2024 in respect of the six months to 30
                                             June 2024, as set out in Appendix IV to this Announcement
 Irrevocable Undertakings                    the irrevocable undertakings obtained by Checkit as detailed in Appendix III;
 Last Accounts Date                          17 April 2024, being the date to which the last audited financial statements
                                             of Crimson Tide were published
 Latest Practicable Date                     10 February 2025, being the latest practicable date before the date of this
                                             Announcement
 London Stock Exchange                       London Stock Exchange plc or its successor from time to time
 Long Stop Date                              11.59 p.m. on 30 June 2025 or such later date (if any) as may be agreed in
                                             writing by Checkit and Crimson Tide (with the Panel's consent and as the Court
                                             may approve (if such approval(s) are required))
 Market Abuse Regulation                     the Market Abuse Regulation (EU) (No 596/2014) incorporated into UK law by
                                             virtue of the European Union (Withdrawal) Act 2018 as amended by virtue of the
                                             Market Abuse (Amendment)(EU Exit) Regulations 2019)
 Merger                                      the proposed acquisition by Checkit of the entire issued and to be issued
                                             ordinary share capital of Crimson Tide (other than any Crimson Tide Shares
                                             already held by the Checkit Group) to be implemented by way of the Scheme as
                                             described in this Announcement or (should Checkit so elect, subject to the
                                             consent of the Panel (where necessary)) by way of a Takeover Offer
 Neville Registrars                          Neville Registrars Limited, Neville House, Steelpark Road, Halesowen, B62 8HD,
                                             the registrars to Crimson Tide
 New Checkit Shares                          the new Checkit Shares proposed to be issued credited as fully paid to the
                                             Crimson Tide Scheme Shareholders pursuant to the Scheme (and any other Crimson
                                             Tide Shareholders whose Crimson Tide Shares are issued after the Scheme
                                             becomes Effective)
 Offer Period                                the period commencing on the date of this Announcement and ending on (i) the
                                             earlier of the date on which the Scheme becomes Effective and/or the date on
                                             which the Scheme lapses or is withdrawn (or such other date as the Panel may
                                             decide) or (ii) the earlier of the date on which the Takeover Offer has become
                                             or has been declared unconditional as to acceptances and/or the date on which
                                             the Takeover Offer lapses or is withdrawn (or such other date as the Panel may
                                             decide), in each case other than where such lapsing or withdrawal is a result
                                             of Checkit exercising its right to implement the Merger by way of a Takeover
                                             Offer
 Opening Position Disclosure                 an announcement containing details of interests or short positions in, or
                                             rights to subscribe for, any relevant securities of a party to the Merger if
                                             the person concerned has such a position, as defined in Rule 8 of the Takeover
                                             Code
 Overseas Shareholders                       Crimson Tide Shareholders who have a registered address in, or are citizens,
                                             residents or nationals of, a jurisdiction outside the UK
 Panel or Takeover Panel                     the Panel on Takeovers and Offers
 Possible Offer Announcement                 the announcement on 4 June 2024 of a possible offer by Checkit for Crimson
                                             Tide
 Registrar of Companies                      the Registrar of Companies in England and Wales
 Regulatory Information Service              the regulatory information service as defined in the handbook of rules and
                                             guidance made by the FCA
 Restricted Jurisdiction                     any jurisdiction where the release, publication or distribution in whole or in
                                             part, in, into or from or where the extension of the Merger would constitute a
                                             violation of the relevant laws of the jurisdiction or would result in a
                                             requirement to comply with any governmental or other consent or any
                                             registration, filing or other formality which Checkit regards as unduly
                                             onerous, in particular the United States of
                                             America, Canada, Japan or Australia
 Restricted Overseas Shareholder             any Crimson Tide Shareholder not resident in, or nationals or citizens of the
                                             United Kingdom who have not prior to the Effective Date been able to satisfy
                                             Checkit in its absolute discretion that receipt of New Checkit Shares pursuant
                                             to the Merger is exempt from or not subject to the registration or other legal
                                             or regulatory requirements or restrictions of the relevant jurisdiction
 Scheme or Scheme of Arrangement             the proposed scheme of arrangement under Part 26 of the Companies Act between
                                             Crimson Tide and the Crimson Tide Scheme Shareholders the terms of which are
                                             to be set out in the Scheme Document
 Scheme Document                             the document to be dispatched to (among others) Crimson Tide Shareholders
                                             including, among other things, the Scheme and the notices convening the
                                             Crimson Tide Court Meeting and the Crimson Tide General Meeting
 Scheme Record Time                          the time and date to be specified in the Scheme Document by reference to which
                                             the entitlements of Crimson Tide Shareholders under the Scheme will be
                                             determined, expected to be 6.00 p.m. on the Business Day before the Scheme
                                             becomes Effective
 Significant Interest                        in relation to an undertaking, a direct or indirect interest of 20 per cent.
                                             or more of: (i) the total voting rights conferred by the equity share capital
                                             (as defined in section 548 of the Companies Act) of such undertaking or (ii)
                                             the relevant partnership interest;
 Singer Capital Markets                      Singer Capital Markets Advisory LLP, financial adviser to Checkit
 Takeover Offer                              should the Merger be implemented by way of a takeover offer as defined in
                                             section 974 of the Companies Act, the takeover offer to be made by or on
                                             behalf of Checkit to acquire the entire issued and to be issued ordinary share
                                             capital of Crimson Tide and, where the context requires, any subsequent
                                             revision, variation, extension or renewal of such takeover offer
 Third Party                                 any government, government department or governmental, quasi-governmental,
                                             supranational, statutory, regulatory, environmental or investigative body or
                                             association, institution or agency (including, without limitation, any trade
                                             agency) or authority (including, without limitation, any anti-trust or merger
                                             control authority), any court or professional or environmental body or any
                                             other person or body whatsoever in any relevant jurisdiction;
 UK or United Kingdom                        the United Kingdom of Great Britain and Northern Ireland
 US Person                                   a US person as defined in Regulation S under the United States Securities Act
                                             of 1933, as amended
 US Securities Act                           the United States Securities Act of 1993
 Voting Record Time                          the time and date specified in the Scheme Document by reference to which
                                             entitlement to vote at the Crimson Tide Court Meeting will be determined,
                                             expected to be 6.00 p.m. on the day two days prior to the Crimson Tide Court
                                             Meeting or any adjournment of it (as the case may be)
 Wider Checkit Group                         Checkit and its subsidiary undertakings and associated undertakings and any
                                             other body corporate partnership, joint venture or person in which Checkit and
                                             all such undertakings (aggregating their interests) have a Significant
                                             Interest (other than any member of the Wider Crimson Tide Group)
 Wider Crimson Tide Group                    Crimson Tide and its subsidiaries, subsidiary undertakings, associated
                                             undertakings and any other body corporate, partnership, joint venture or
                                             person in which Crimson Tide and all such undertakings (aggregating their
                                             interests) have a Significant Interest.

 

 1  (#_ftnref1) Source: Workflow Management System Market Size To Hit USD
307.64 Bn By 2034
(https://url.uk.m.mimecastprotect.com/s/DwMBC90VTkVzxJfofXTqlYws?domain=precedenceresearch.com)

 2  (#_ftnref2) Source: Workflow Management System Market Size To Hit USD
307.64 Bn By 2034
(https://url.uk.m.mimecastprotect.com/s/DwMBC90VTkVzxJfofXTqlYws?domain=precedenceresearch.com)

 

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