Staffline : Circular to shareholders - proposed placing, open offer, subscription of shares and debt refinancing

THIS DOCUMENT AND ANY ACCOMPANYING DOCUMENTS ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, NEW ZEALAND CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN.

THIS DOCUMENT AND ANY ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker, bank manager, fund manager, solicitor, accountant or other appropriate independent financial adviser authorised under the Financial Services and Markets Act 2000 (as amended) ("FSMA") or, if you are resident outside of the United Kingdom, from another appropriately authorised independent financial adviser. You should be aware that an investment in the Company involves a high degree of risk and prospective investors should in particular carefully consider the section entitled "Risk Factors" set out in Part 2 of this document.

If you sell or transfer or have sold or otherwise transferred all of your Ordinary Shares on or before the Record Date, please send this document and accompanying Form of Proxy and (if relevant) Application Form as soon as possible to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected, for onward transmission to the purchaser or transferee. Such documents should not, however, be forwarded to or transmitted to or in the United States, Australia, New Zealand Canada, the Republic of South Africa or Japan ("Restricted Jurisdiction") or any other jurisdiction outside of the UK where to do so may violate any legal or regulatory requirement. If you have sold only part of your holding of Ordinary Shares on or before the Record Date, please contact immediately your stockbroker, bank or other agent through whom the sale or transfer was effected.

The distribution of this document and the accompanying (if relevant) Application Form to Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdiction in which they are located. Persons who are not resident in the United Kingdom should read paragraph 5 ("Overseas Shareholders") in Part 4 of this document and should inform themselves about, and observe, any applicable legal or regulatory requirements. Any failure to comply with such restriction may constitute a violation of the securities laws of any such jurisdiction.

The maximum amount to be raised under the Open Offer shall be less than €8 million (or an equivalent amount in pounds sterling) and the Placing Shares will only be available to "qualified investors" for the purposes of the Prospectus Regulation Rules or otherwise in circumstances not resulting in an offer of transferable securities to the public under section 102B of FSMA. Accordingly, this document does not constitute a prospectus for the purposes of the Prospectus Regulation Rules and has not been, nor will be, reviewed or approved by the FCA pursuant to sections 85 and 87 of FSMA, the London Stock Exchange or any other authority or regulatory body nor has it been approved for the purposes of section 21 of FSMA. In addition, this document does not constitute an admission document drawn up in accordance with the AIM Rules.

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on the AIM market of the London Stock Exchange ("Admission"). The New Ordinary Shares will not be admitted to trading on any other investment exchange. Subject to certain conditions being satisfied, it is expected that Admission will become effective and that dealings in the New Ordinary Shares will commence on AIM on 10 June 2021. The New Ordinary Shares will, when issued, rank pari passu in all respects with the Existing Ordinary Shares.

AIM is a market designed for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. The AIM Rules are less demanding than those of the Official List and AIM securities are not admitted to the Official List. A prospective investor should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration, and if appropriate, consultation with an authorised independent financial adviser.

STAFFLINE GROUP PLC

(incorporated and registered in England and Wales with registered number 05268636)

Proposed Placing of 87,249,500 New Ordinary Shares at 50 pence per Ordinary Share

Proposed Open Offer of up to 8,837,242 New Ordinary Shares at 50 pence per Ordinary Share

Proposed Subscription of 750,500 New Ordinary Shares at 50 pence per Ordinary Share

Proposed Debt Refinancing

and

Notice of General Meeting

The Directors and the Company accept responsibility, both collectively and individually, for the information contained in this document and compliance with the AIM Rules. To the best of the knowledge and belief of the Directors and the Company (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

This document should be read as a whole. Your attention is drawn, in particular, to the letter from the Chairman set out in Part 1 of this document which provides details of the Fundraising and recommends that you vote in favour of all of the Resolutions to be proposed at the General Meeting referred to below and to the Risk Factors in Part 2 of this document.

Notice of a General Meeting of Staffline Group plc, to be held at the offices of DLA Piper UK LLP at 160 Aldersgate Street, London EC1A 4HT on 9 June 2021 at 11.00 a.m., is set out at the end of this document. Due to the COVID-19 pandemic and the Government's measures to restrict travel and public gatherings currently in force, Shareholders (other than the two necessary to be present in person or by proxy to form a quorum) will not be able to attend and vote at the General Meeting in person and therefore all Shareholders are strongly requested to submit a Form of Proxy. Please see paragraph 9 of the letter from the Chairman set out in Part 1 of this document for further details.

A Form of Proxy for use at the General Meeting accompanies this document and, to be valid, should be completed and returned in accordance with the instructions set out therein as soon as possible but in any event so as to reach the Company's registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY, by not later than 11.00 a.m. on

7 June 2021 (or, if the meeting is adjourned, not less than 48 hours (excluding non-working days) before the time fixed for the adjourned meeting). If you hold your Ordinary Shares in uncertificated form in CREST, you may appoint proxies by using the CREST electronic proxy appointment service in accordance with the procedures set out in the CREST Manual using CREST ID: 3RA50. The latest time by which an instruction must be validly entered through the CREST electronic proxy appointment service is 11.00 a.m. on 7 June 2021 (or, if the meeting is adjourned, not less than 48 hours (excluding non-working days) before the time fixed for the adjourned meeting).

Qualifying non-CREST Shareholders will find an Application Form enclosed with this document. Applications under the Open Offer may only be made by the Qualifying Shareholders originally entitled or by a person entitled by virtue of a bona fide market claim arising out of the sale or transfer of Ordinary Shares prior to the date on which the relevant Ordinary Shares are marked "ex" the entitlement by the London Stock Exchange. Holdings of Ordinary Shares in certificated and uncertificated form will be treated as separate holdings for the purposes of calculating entitlements under the Open Offer. The latest time for application and payment in full under the Open Offer is 11.00 a.m. on 7 June 2021 and the procedure for application and payment is set out in Part 4 of this document.

Liberum Capital Limited ("Liberum"), which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for the Company as Nominated Adviser, Sole Bookrunner and Broker and no-one else in connection with the Fundraising. Liberum will not regard any other person (whether or not a recipient of this document) as a client in relation to the Fundraising and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Fundraising or any other matter referred to herein. Liberum has not authorised the contents of, or any part of, this document and no liability whatsoever is accepted by Liberum nor does it make any representation or warranty, express or implied, for the accuracy of any information or opinion contained in this document or for the omission of any information. Liberum expressly disclaims all and any responsibility or liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this document. The responsibilities of Liberum as the Company's Nominated Adviser and Broker under the AIM Rules and the AIM Rules for Nominated Advisers are owed to the London Stock Exchange solely and are not owed to Staffline Group plc or to any Director, Shareholder or any other person in respect of such Shareholder's decision to acquire Ordinary Shares in reliance on any part of this document or otherwise.

This document is for information purposes only. The Existing Ordinary Shares and the New Ordinary Shares have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, (the "US Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States, and the New Ordinary Shares may not be offered or sold, exercised, resold, transferred or delivered, directly or indirectly, in or into the United States unless registered under the US Securities Act or offered in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. This document does not constitute an offer to issue or sell, or the solicitation of an offer to subscribe for or purchase, any New Ordinary Shares to any person with a registered address, or who is resident or located in, the United States, and there will be no public offer of New Ordinary Shares in the United States. Neither the Existing Ordinary Shares nor the New Ordinary Shares have been approved or disapproved by the US Securities and Exchange Commission, or any other securities commission or regulatory authority of the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the New Ordinary Shares nor have they approved this document or confirmed the accuracy or adequacy of the information contained in this document. Any representation to the contrary is a criminal offence in the United States.

The New Ordinary Shares will not qualify for distribution under the relevant securities laws of Australia, New Zealand, Canada, the Republic of South Africa or Japan. Accordingly, subject to certain exemptions, the New Ordinary Shares may not be offered, sold, taken up, delivered or transferred in, into or from Australia, New Zealand, Canada, the Republic of South Africa, Japan or any other jurisdiction where to do so would constitute a breach of local securities laws or regulations or to or for the account or benefit of any national, resident or citizen of a Placing Restricted Jurisdiction.

This document does not constitute an offer to issue or sell, or the solicitation of an offer to subscribe for or purchase, any Ordinary Shares to any person in Restricted Jurisdiction and this document is not for distribution in, into or from a Restricted Jurisdiction.

This document includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology. These forward looking statements include matters that are not historical facts. They appear in a number of places throughout this document and include statements regarding the Directors' current intentions, beliefs or expectations concerning, among other things, the Group's results of operations, financial condition, liquidity, prospects, growth, strategies and the Group's markets.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual results and developments could differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this document are based on certain factors and assumptions, including the Directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's operations, results of operations, growth strategy and liquidity. Whilst the Directors consider these assumptions to be reasonable based upon information currently available, they may prove to be incorrect. Save as required by law or by the AIM Rules, none of the Company, Liberum nor their respective directors undertakes any obligation to publicly release the results of any revisions to any forward-looking statements in this document that may occur due to any change in the Directors' expectations or to reflect events or circumstances after the date of this document.

Shareholders should not construe the contents of this document as legal, tax or financial advice, and should consult with their own advisers as to the matters described therein.

A copy of this document is available, subject to certain restrictions relating to persons resident in certain overseas jurisdictions, at the Company's website www.stafflinegroupplc.co.uk/investor-relations/. Neither the content of any website referred to in this document nor any hyperlinks on such website is incorporated in, or forms part of, this document.

This document is dated 24 May 2021.

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CONTENTS

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KEY STATISTICS

1. Assuming no further issue of Ordinary Shares prior to the issue of the New Ordinary Shares and excluding the impact from any issue of Open Offer Shares.
2. Assuming no further issue of Ordinary Shares prior to the issue of the New Ordinary Shares and full take up of the Open Offer.
3. Assuming no further issue of Ordinary Shares prior to the issue of the New Ordinary Shares, full take up of the Open Offer and taking into account the issuance of New Ordinary Shares pursuant to the Placing and the Subscription

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