Possible Offer for Crimson Tide plc

Checkit, the augmented workflow and smart sensor automation company for frontline workers, announces a formal approach to the board of Crimson Tide (the "Crimson Tide Board") regarding a possible all-share offer for Crimson Tide pursuant to which Checkit would acquire the entire issued and to be issued share capital of Crimson Tide (the "Possible Offer").

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

For each Crimson Tide share: 7 Checkit shares

Based on Checkit's middle market closing price of 26 pence per Checkit share on 3 June 2024 (being the last practicable date prior to publication of this announcement), the terms of the Possible Offer:

• values each Crimson Tide share at 182 pence;
• values the entire issued ordinary share capital of Crimson Tide at approximately £12 million;
• represents a premium of approximately 12 per cent. to the middle market closing price of 162.5 pence per Crimson Tide share on 3 June 2024; and
• means Crimson Tide shareholders would hold approximately 30 per cent. of the enlarged group.

Strategic Rationale for the Possible Offer

The board of directors of Checkit (the "Checkit Board") believes that the combination of Crimson Tide and Checkit presents a compelling strategic opportunity to create a scaled workflow software company and furthermore believes that a company of this increased scale would present a more attractive investment opportunity for all shareholders than either business as a standalone entity. The Checkit Board believes that this, along with the significant potential revenue and cost synergies identified by Checkit, could result in the enlarged company 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 reasonably be expected to increase liquidity for existing and potential new investors. The Checkit Board therefore believes that the Possible Offer would be in the best interest of both companies' respective shareholders and could enhance value for both sets of shareholders.

The Checkit Board believes that the combination of Crimson Tide's and Checkit's product sets will, in due course, provide an enhanced product offering that will benefit both companies' customers. In addition, the enlarged company could be well positioned to offer staff wider opportunities for training and career progression than either Crimson Tide or Checkit can as standalone entities. The enlarged company would leverage Checkit's enhanced research and development and recognised go-to-market capabilities, making the integration of Crimson Tide's solutions feasible and beneficial, while also expanding the product set available to sell to existing customers. Checkit's significant expertise in IoT sensors may benefit Crimson Tide in its stated aim to expand into this area, providing a technological edge and streamlining the integration process.

The combination of the two companies 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 aligns well with Checkit's market focus and growth strategy. In addition to expanding the verticals for the combined business, focus would be directed towards a combined approach to scaling in the US, where Checkit is already well established.

The combination would enhance the enlarged entity's position in workflow software solutions market leveraging the strengths of both organisations for enhanced profitability and competitive advantage whilst being more attractive to existing and potential new investors. The Checkit Board believes that the strategic and financial rationale to the Possible Offer provides significant opportunities for enhanced value for both Crimson Tide and Checkit shareholders.

Background to the Possible Offer

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 has at various times over the last four years sought to engage in constructive discussions with the Crimson Tide Board, but those discussions have never progressed.

In January 2024, the Checkit Board submitted an indicative non-binding proposal to the Crimson Tide Board regarding an all-share merger on terms similar to those proposed in this announcement. The proposal set out in detail Checkit's views on the strategic rationale behind a combination of the two businesses as well as the proposed terms of an all-share merger. The Crimson Tide Board unequivocally rejected this proposal.

In April 2024, the Checkit Board again contacted the Crimson Tide Board, with a view to establishing whether there was any appetite for an informal discussion regarding a possible combination of the two businesses, however, it was made clear in response to the Checkit Board that there was no willingness on the part of the Crimson Tide Board to enter into any dialogue, even if, as the Checkit Board believes, it might have the benefit of enhancing value for Crimson Tide's shareholders.

The Checkit Board has noted that the Crimson Tide Board has declined to enter into discussions regarding a possible combination given the compelling strategic rationale for the Possible Offer as detailed above. The Checkit Board has therefore decided to announce the terms of the Possible Offer to facilitate direct discussions with shareholders of both Crimson Tide and Checkit, for whom the Checkit Board believes significant benefits would accrue from the proposed business combination. Naturally, the Checkit Board would welcome the opportunity to engage in dialogue with the Crimson Tide Board on the merits of a combination of the two businesses but will be mindful first and foremost of feedback from both sets of shareholders when deciding whether or not to proceed with a firm offer even if it does not receive a unanimous and unqualified recommendation from the directors of Crimson Tide at any point.

Kit Kyte, Chief Executive Officer of Checkit, commented:

"The Checkit Board has long believed that the combination of Checkit and Crimson Tide is an obvious and positive strategic step for both companies. We believe it will position the enlarged entity as a market leader in workflow software solutions, leveraging the strengths of both organisations for enhanced profitability and competitive advantage whilst being more attractive to existing and potential new investors. Most importantly, the Checkit Board believes that the combination of the two businesses has the potential to deliver value for both sets of shareholders.

"Checkit's stable management team and the Checkit Board has a track record of successfully integrating acquired businesses. I look forward to presenting the strategic rationale and benefits of this potential combination to Checkit and Crimson Tide shareholders."

Pre-conditions and Reservations

This announcement does not amount to a firm intention by Checkit to make an offer for Crimson Tide. The Checkit Board emphasises that the Possible Offer is non-binding and as a result, it is emphasised that there can be no certainty that an offer will be made by the Company even if the pre-condition set out below is satisfied or waived.

The preference of the Checkit Board is to implement the Possible Offer based on a recommendation from the Crimson Tide Board but the Checkit Board notes that the Crimson Tide Board has on multiple occasions refused to engage in constructive discussions regarding the Possible Offer. At this time, the announcement by Checkit of a firm intention to make an offer for Crimson Tide under Rule 2.7 of the Code is subject to receipt of a unanimous and unqualified recommendation from the directors of Crimson Tide and the provision of irrevocable undertakings on terms satisfactory to Checkit in favour of the transaction from the directors of Crimson Tide (and their connected persons) who are also shareholders. However, in accordance with Rule 2.5(c)(i) of the Code this pre-condition may be waived in whole or in part by Checkit.

The announcement by Checkit of a firm intention to make an offer for Crimson Tide under Rule 2.7 of the Code is also not subject to the completion of any confirmatory due diligence on Crimson Tide by the Checkit Board nor, as a share exchange offer, is it subject to Checkit finalising any funding requirements necessary to complete the Possible Offer.

Checkit reserves the right to vary the form of the consideration referred to in this announcement.

In addition, pursuant to Rule 2.5 of the Code, Checkit reserves the right to set aside the terms referred to in this announcement and/or at any time to make an offer on less favourable terms, in the following circumstances:

• with the recommendation or consent of the Crimson Tide Board;
• if a third party announces a firm intention to make an offer for Crimson Tide; or
• if Crimson Tide announces a Rule 9 waiver proposal (for the purposes of Note 1 of the Notes on Dispensations from Rule 9 of the Code) or a reverse takeover.

Checkit reserves the right to reduce the Possible Offer consideration by the amount of any dividend (or other distribution) which is paid or becomes payable by Crimson Tide to its shareholders following the date of this announcement.

In accordance with Rule 2.6(a) of the Code, Checkit is required, by no later than 5.00 p.m. on 2 July 2024, being 28 days after today's date, to either announce a firm intention that it will make an offer for Crimson Tide plc in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the Panel on Takeovers and Mergers and Crimson Tide in accordance with Rule 2.6(c) of the Code.

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.

Checkit will make further announcements in due course.

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

Rule 2.9

Pursuant to Rule 2.9 of the Code, the Company confirms that it has 108,008,562 ordinary shares of 5 pence in issue with International Securities Identification Number GB00B0C5RG72.