Trading Update and Proposed Placing

Kelso, the main market listed acquisition vehicle, today announces a pre-close trading update for the full year ending 31 December 2023 ("FY23") and its intention to carry out a capital fundraise by way of a placing (the "Proposed Placing").

Overview

• Significant progress has been made in its inaugural year of operations, having raised £3.0 million in January 2023 at 2.0p and a subsequent £3.0 million in May 2023 at 2.5p, supported by a distinguished group of highly successful entrepreneurs and investors.
• The internal rate of return ("IRR") on our investments1 stands at over 50% for the year, coupled with a cash return on investment exceeding 40%, surpassing our targeted annual return of 25%.

Trading Update

Our investments to date have surpassed the Company's annual return target, highlighting Kelso's proficiency in identifying untapped value within UK-listed companies. These efforts have yielded a combined realised and unrealised gain of approximately £2.6 million across our investments, culminating in a preliminary pre-tax profit2 of approximately £1.8 million after accounting for expenses and management incentive plan ("MIP") accrual. Notably, our gross assets at the year-end totalled £8.1 million3, and Net Asset Value ("NAV") per share at the year-end is estimated at 2.33p.

Kelso intends to announce its audited results for the year ending 31 December 2023 in March 2024. This announcement will provide comprehensive insights into the Company's financial performance and strategic outlook.

During 2024, the Kelso team expects to expand its business by earning revenue from investor relations ('IR') consulting by advising listed companies on maximising shareholder value. Over time, we expect this to develop into a more significant net revenue stream.

Proposed Placing

Kelso has shareholder and regulatory authority to expand its capital base by a maximum of 20% without the necessity for an Extraordinary General Meeting ("EGM") or the issuance of a prospectus.

The Company Directors, recognise the significant market opportunity in the UK small and mid-cap sector, and responding to the demand from existing and new investors, propose issuing shares representing up to 20% of its capital base. The Proposed Placing would amount to a maximum 62.6 million ordinary shares of £0.01 each ("Placing Shares"), issued at 3.0p ("Placing Price"), reflecting a 10% discount to the closing price on 11 January 2024 and a 6% discount to the average of the last 30 days, being 3.2p .

Kelso will use the proceeds of the Proposed Placing to continue to execute its mandate to unlock value in the UK stock market.

In collaboration with its broker, Zeus Capital Limited ("Zeus"), the Company is set to engage in discussions with its current shareholders in the coming days. It is also expected that some of the Company's Directors will participate in the Proposed Placing.

A further announcement confirming the outcome of the Proposed Placing will be made in due course.

1 Calculated on a gross basis prior to accrued MIP, corporation tax and fund raising & administration costs

2 The pre tax profit is after accounting for admin costs of running Kelso of £325k and MIP provision of £330k. There are no property costs or Board fees or salaries during the period. The Board is incentivised via the long term MIP, details of which were announced previously, and continues to own 21% of the issued share capital of Kelso.

3 The NAV consists of 5,000,000 shares in THG plc (52.5% of the NAV), 1,300,000 shares in NCC Group plc (20.6%), 2,320,000 shares in Angling Direct plc (12.3%), and 3,400,000 shares in The Works.co.uk plc (11.6%), alongside other assets (3.0%).

Nick Cowles, Ed Beddows (Investment Banking) Ben Robertson (Corporate Broking)

APPENDIX

Notice to overseas persons

General

Application for listing and admission to trading

An application will be made for admission of the Placing Shares to the Official List (standard segment) and to trading on the main market of the London Stock Exchange.

A further announcement will be made with details of the expected date for Admission, however it is currently anticipated that Admission will occur at or before 8:00 a.m. on 19 January 2024 (London time) or by such later time as the Company and Zeus agree.

Principal terms of the Placing

Zeus is acting as agent for and on behalf of the Company.

Participation in the Placing is by invitation only and will only be available to persons who may lawfully be, and are, invited by Zeus to participate. Zeus and any of its affiliates are entitled to participate in the Placing as principal.

Each Placee will confirm the maximum number of Placing Shares it is willing to acquire in a Recorded Commitment. Once they have made a Recorded Commitment, each Placee will have an immediate, separate, irrevocable and binding obligation, owed to Zeus (as agent for the Company), to subscribe and pay for, at the Placing Price, the number of Placing Shares allocated to it, up to the agreed maximum.

Each Placee's allocation (and whether such Placee participates in the Placing) will be determined by agreement between the Company and Zeus and will be confirmed by Zeus either orally or in writing via a contract note.

Each Placee's commitment will be confirmed in and evidenced by a Recorded Commitment. These Terms and Conditions will be deemed incorporated into each contract which is entered into by way of a Recorded Commitment and will be legally binding on the relevant Placee(s) on behalf of whom the commitment is made with effect from the end of the Recorded Commitment and, except with Zeus's prior written consent, will not be capable of variation or revocation after the close of the Bookbuild. A contract note confirming each Placee's allocation of Placing Shares will be sent to them following the Recorded Commitment and the allocation process. These Terms and Conditions shall be deemed incorporated into any such contract note.

Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to Zeus (as agent for the Company), to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares allocated to such Placee.

Zeus and the Company reserve the right to scale back the number of Placing Shares to be subscribed by any Placee in the event that the Placing is oversubscribed. Zeus and the Company also reserve the right not to accept offers to subscribe for Placing Shares or to accept such offers in part rather than in whole. The acceptance and, if applicable, scaling back of offers shall be at the absolute discretion of Zeus and the Company.

Except as required by law or regulation, no press release or other announcement will be made by Zeus or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms. Zeus's obligations under the Placing Agreement are conditional on certain conditions, including:

• Admission occurring at or before 8:00 a.m. on 19 January 2024 (London time) or by such later time as the Company and Zeus agree not later than 8:00am on 20 February 2024;
• the delivery to Zeus of certain documentary conditions precedent.

If: (i) any of the conditions contained in the Placing Agreement, including those described above, are not fulfilled or (where applicable) waived or extended in writing by Zeus by the relevant time or date specified (or such later time or date as the Company and Zeus may agree); or (ii) the Placing Agreement is terminated in the circumstances specified below, the Placing will lapse and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by it in respect thereof.

Zeus may, at its discretion, extend the time for satisfaction of, or waive compliance by the Company with, the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

Neither Zeus nor any of its affiliates, agents, advisers, directors, officers or employees nor the Company nor any of its affiliates, agents, advisers, directors, officers or employees shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision it may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing, each Placee agrees that any such decision is within the absolute discretion of Zeus and/or the Company (as applicable).

Termination of the Placing

Zeus is entitled, in its discretion acting reasonably, by notice to the Company at any time before Admission, to terminate the Placing Agreement in accordance with its terms in the following (non-exhaustive) circumstances:

• a banking moratorium has been declared by the United Kingdom or in London;
• there has occurred a material adverse change since the date of the Placing Agreement in United Kingdom to Tax affecting the Ordinary Shares or the transfer thereof or exchange controls have been imposed by the United Kingdom; or
• a force majeure event occurs which in the reasonable opinion of Zeus would be likely to be materially prejudicial to the Placing or Admission or the financial or trading position or prospects of the Company or its subsidiaries (the Company and its subsidiaries being the "Group"), taken as whole, or make it impracticable or inadvisable to proceed with the Placing in the manner contemplated by the Placing Documents.

By participating in the Placing, each Placee agrees with the Company and Zeus that the exercise by the Company or Zeus of any right of termination or any other right or other discretion under the Placing Agreement shall be within the absolute discretion of the Company or Zeus or for agreement between the Company and Zeus and that neither the Company nor Zeus need make any reference to such Placee and that none of the Company, Zeus nor any of their respective affiliates, agents, advisers, directors, officers or employees shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise. By agreeing with Zeus (as agent of the Company) to subscribe for Placing Shares under the Placing, a Placee (and any person acting on a Placee's behalf) will irrevocably acknowledge, confirm, warrant, undertake to and agree with, each of the Company and Zeus, in each case as a fundamental term of such Placee's application for Placing Shares and of the Company's obligation to allot and/or issue any Placing Shares to it or at its direction, that its rights and obligations in respect of the Placing (or any part of it) will terminate only in the circumstances described above and under the "Conditions of the Placing" section above and will not be capable of rescission or termination by it in any other circumstances.

Registration and Settlement

Settlement of transactions in the Placing Shares following Admission will take place within the system administered by Euroclear UK & International Limited ("CREST"). Subject to certain exceptions, Zeus and the Company reserve the right to require settlement for, and delivery of, the Placing Shares (or any part thereof) to Placees by such other means that they deem necessary if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation in accordance with the standing arrangements in place with Zeus stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to Zeus and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions in respect of the Placing Shares, or depositary interests representing such Placing Shares, that it has in place with Zeus.

Settlement will take place in accordance with the instructions set out in the trade confirmation.

Each Placee is deemed to agree that, if it does not comply with these obligations, Zeus may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Zeus's account and benefit, an amount equal to the aggregate amount owed by the Placee. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in these Terms and Conditions) or other similar taxes imposed in any jurisdiction which may arise upon the sale of such Placing Shares on such Placee's behalf.

Representations, Warranties and Further Terms

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) irrevocably represents, warrants, acknowledges, undertakes, confirms and agrees (for itself and for any such prospective Placee) that (save where Zeus expressly agrees in writing to the contrary):

2. it has made its own assessment of the Placing Shares and has relied on its own investigation of the business, financial position and other aspects of the Company in accepting a participation in the Placing and neither Zeus nor the Company nor any of their respective affiliates, agents, advisers, directors, officers or employees nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company or any other person other than the information in the Announcement and these Terms and Conditions or the Publicly Available Information (as defined in the Terms and Conditions); nor has it requested Zeus, the Company or any of their respective affiliates, agents, advisers, directors, employees or officers or any person acting on behalf of any of them to provide it with any such information;

• neither Zeus nor any person acting on its behalf, nor any of its respective affiliates, agents, directors, officers or employees, has or shall have any liability for any Publicly Available Information or any representation relating to the Company, provided that nothing in these Terms and Conditions excludes the liability of any person for any fraudulent misrepresentation made by that person;
• neither Zeus nor any of its affiliates, agents, directors, officers or employees have made any representation or warranty to it, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of the Announcement or Publicly Available Information;
• it may not rely, and has not relied, on any investigation that either Zeus, any of its affiliates or any person acting on their behalf, may have conducted with respect to the Placing Shares or the Company, and none of such persons has made any representation, express or implied, with respect to the Company, the Placing Shares or the accuracy, completeness or adequacy of the information from the LSE or any other information; each Placee further acknowledges that it has conducted its own investigation of the Company and the Placing Shares and has received all information it believes necessary or appropriate in connection with its investment in the Placing Shares;
• it has the funds available to pay for the Placing Shares which it has agreed to acquire and acknowledges and agrees that it will pay the total subscription amount for such Placing Shares in accordance with the Announcement and these Terms and Conditions by the due time and date set out herein, failing which the relevant Placing Shares may be placed with other Placees or sold at such price as Zeus determines;
• it and each person on whose behalf it is participating:
• has fully observed such laws and regulations;
• none of Zeus, its affiliates and/or any person acting on behalf of any of them is making any recommendations to it or advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of Zeus and that Zeus has no duties or responsibilities to it for providing the protections afforded to its clients or for providing advice in relation to the Placing or in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement or for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;
• it will make payment to Zeus for the Placing Shares allocated to it in accordance with these Terms and Conditions on or by such date as notified by Zeus or the Company, failing which the relevant Placing Shares may be placed with others on such terms as Zeus determines in its absolute discretion without liability to the Placee and the Placee will remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in these Terms and Conditions) or other similar taxes imposed in any jurisdiction which may arise upon the sale of such Placing Shares on such Placee's behalf;
• its Recorded Commitment to acquire Placing Shares will represent a maximum number of Placing Shares which it may be required to subscribe for, and that following the allocation process Zeus may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;
• neither Zeus nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe the above requirement. Each Placee and any person acting on behalf of such Placee agrees to acquire Placing Shares pursuant to the Placing and agrees to indemnify the Company and Zeus in respect of the same on the basis that the Placing Shares will be allotted to a CREST stock account of Zeus or transferred to a CREST stock account of Zeus who will hold them as nominee on behalf of the Placee until settlement in accordance with such Placee's standing settlement instructions with Zeus;
• it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA or an offer to the public in any member state of the EEA within the meaning of Article 2(e) of the Prospectus Regulation as it forms part of the UK domestic law by virtue of the European Union (Withdrawal) Act 2018, or an offer to the public in any Relevant State within the meaning of the Prospectus Regulation;
• it has only communicated or caused to be communicated and it will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person and it acknowledges and agrees that neither the Announcement nor these Terms and Conditions has been or will be approved by Zeus in its capacity as an authorised person under section 21 of the FSMA and it may not therefore be subject to the controls which would apply if it was made or approved as a financial promotion by an authorised person;
• neither Zeus, the Company nor any of their respective affiliates, agents, advisers, directors, officers or employees nor any person acting on behalf of Zeus, the Company or their respective affiliates, agents, advisers, directors, officers or employees nor any person acting on behalf of any of them is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing nor providing advice in relation to the Placing nor in respect of any representations, warranties, acknowledgements, agreements, undertakings, or indemnities contained in the Placing Agreement nor the exercise or performance of Zeus's rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;
• either of Zeus and its affiliates, acting as an investor for its or their own account(s), may bid or subscribe for and/or purchase Placing Shares and, in that capacity, may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise. Accordingly, references in these Terms and Conditions and/or the Announcement to the Placing Shares being offered, subscribed, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by, Zeus and/or any of its affiliates acting as an investor for its or their own account(s). Neither Zeus nor the Company intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so;
• it:
• is not a person: (i) with whom transactions are prohibited under the US Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury; (ii) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations or other applicable law, all such statutes, rules and regulations referred to in this paragraph 29 together, the "Regulations"); and if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to Zeus such evidence, if any, as to the identity or location or legal status of any person which Zeus may request from it in connection with the Placing (for the purpose of complying with the Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by Zeus on the basis that any failure by it to do so may result in the number of Placing Shares that are to be acquired by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as Zeus may decide at its sole discretion;
• in order to ensure compliance with the Regulations, Zeus (for itself and as agent on behalf of the Company) or the Company's registrar may, in their absolute discretion, require verification of its identity. Pending the provision to Zeus or the Company's registrar, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at Zeus's absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed at Zeus's or the Company's registrar's, as the case may be, absolute discretion. If, within a reasonable time after a request for verification of identity, Zeus (for itself and as agent on behalf of the Company) or the Company's registrar have not received evidence satisfactory to them, either Zeus and/or the Company may, at its absolute discretion, terminate its commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;
• its commitment to acquire Placing Shares on the Terms and Conditions will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or Zeus's conduct of the Placing;
• neither Zeus nor any of its affiliates, agents, advisers, directors, officers or employees makes any representation in respect of or shall have any responsibility for the tax treatment that any Placee may receive or expect in relation to their investment in Placing Shares;
• it irrevocably appoints any duly authorised officer of Zeus as its agent for the purpose of executing and delivering to the Company and/or its registrar any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares which it agrees to acquire upon these Terms and Conditions;
• the Company, Zeus and others (including each of their respective affiliates, agents, advisers, directors, officers and employees) will rely upon the truth and accuracy of the foregoing representations, warranties, undertakings, acknowledgements and agreements, which are given to Zeus on their own behalf and on behalf of the Company and are irrevocable;
• time is of the essence as regards its obligations under these Terms and Conditions;
• the Placing Shares will be issued subject to these Terms and Conditions; and
• these Terms and Conditions and all documents into which these Terms and Conditions are incorporated by reference or otherwise validly forms a part and/or any agreements entered into pursuant to these Terms and Conditions and all agreements to acquire Placing Shares pursuant to the Placing will be governed by and construed in accordance with English law and it submits to the exclusive jurisdiction of the English courts in relation to any claim, dispute (contractual or otherwise) or matter arising out of or in connection with such contract except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with interest chargeable thereon) may be taken by the Company or Zeus in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify and hold the Company, Zeus and each of their respective affiliates, agents, directors, officers and employees harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings given by the Placee (and any person acting on such Placee's behalf) in these Terms and Conditions or incurred by Zeus, the Company or any of their respective affiliates, agents, directors, officers or employees arising from the non-performance of the Placee's obligations as set out in these Terms and Conditions, and further agrees that the provisions of these Terms and Conditions shall survive after the completion of the Placing.

The agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the United Kingdom relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct by the Company. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement related to any other dealings in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event, the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax and neither the Company nor Zeus shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and they should notify Zeus accordingly. In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares, and each Placee, or the Placee's nominee, in respect of whom (or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such non-United Kingdom stamp, registration, documentary, transfer or similar taxes or duties, undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company and Zeus in the event that any of the Company and/or Zeus have incurred any such liability to such taxes or duties.

The representations, warranties, acknowledgements, agreements, indemnities and undertakings contained in these Terms and Conditions are given to Zeus for itself and on behalf of the Company and are irrevocable.

The provisions of these Terms and Conditions may be varied, waived or modified as regards specific Placees or on a general basis by Zeus provided always that such variation, waiver or modification is not materially prejudicial to the interests of the Company or Zeus.

Information to Distributors

The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Zeus will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.

General

When a Placee or any person acting on behalf of the Placee is dealing with Zeus, any money held in an account with Zeus on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the relevant rules and regulations of the FCA made under the FSMA. Each Placee acknowledges that the money will not be subject to the protections conferred by the client money rules: as a consequence this money will not be segregated from Zeus's money in accordance with the client money rules and will be held by it under a banking relationship and not as trustee.

References to time in the Terms and Conditions are to London time, unless otherwise stated.