LiDCO, the cardiovascular monitoring company, today announces that it has conditionally completed a placing of 17,500,000 new Ordinary Shares of 0.5p each at a price of 20 pence per share (the 'Placing'). The Company announces that, following the close of the Placing the Company will have raised £3.5 million before expenses.

Terry O’Brien, LiDCO’s CEO today commented "I am delighted to announce the proposed placing of shares the proceeds of which will be used for product development, to support our market expansion and working capital requirements and reduce our borrowings. The placing will put LiDCO in a stronger financial position to exploit the growth opportunities referred to in our preliminary results announcement also released today."

The Placing is conditional on the approval of a resolution at an extraordinary general meeting to be held on 23 May 2006 (the "EGM"). A Circular together with notice of EGM will today be dispatched to Shareholders. Subject to the passing of the resolution at the EGM the Company, through Panmure Gordon & Co, will apply for the Placing Shares, which will rank pari passu with existing Ordinary Shares, to be admitted to trading on AIM, and expects that admission will occur on 24 May 2006.

Copies of the Circular (in connection with the Placing) being posted to Shareholders will be available to the public, free of charge, from the date of this announcement for the period of one month at the offices of Panmure Gordon & Co at:

Panmure Gordon & Co
Moorgate Hall
155 Moorgate
London
EC2M 6XB

For more information please contact:

Background to and reasons for the Placing

Sales and Marketing Activity

LiDCO's current direct sales force has achieved good growth in the territories in which the Company operates but is thinly spread, particularly in the US. Furthermore, it has become apparent that the market for minimally invasive cardiovascular monitoring products is growing strongly. In order to take advantage of this market opportunity for LiDCO's products, the Company proposes to increase its direct sales staff, as well as increase understanding of the operation of its products by medical practitioners. The increased sales staff will be able to undertake more of the training required for hospitals to calibrate the LiDCOplus monitor with the sensor. The Directors believe that this will increase sales of LiDCO’s disposable products, as well as further demonstrate the benefits of the new features on the forthcoming release of the version 4.0 LiDCOplus software.

Research and Development

LiDCO continues to invest significant sums in software and other development of the LiDCO products, having created new software versions in each of the last three years, as well as process improvements to the sensor manufacturing. Increasingly, hospitals are interested in improving connectivity of their medical and administrative equipment in order to maximise potential efficiency benefits. For LiDCO, this means that it needs to expand its software programming resources to enable its products to work with a greater variety of communication protocols. Part of the proceeds of the Placing will therefore be used in connection with these research and development activities and to make further improvements to the user interface with the potential for additional derived hemodynamic parameters.

Loan Facility

In August 2005, LiDCO entered into a three year secured revolving convertible loan agreement with Laurus Master Fund Ltd (“Laurus”), a US based provider of finance to small cap growth companies. This agreement provided for a loan facility of $2million, secured on the assets of the Company. Under the terms of the agreement, repayment of any outstanding sum may be made in cash or, alternatively, in an equivalent number of shares, by reference to a specific formula. The current sum outstanding is $2million (approximately £1.1million) and the interest rate is currently 9.25 per cent per annum. The Company intends to use part of the proceeds of the Placing to repay substantially all of the outstanding loan so as to reduce the interest payable, whilst retaining the facility for the remaining life of the loan agreement.

Under the terms of the loan agreement with Laurus, and following notice of the proposed repayment, Laurus will have the right to convert part or all of the amount to be repaid under the facility at the Placing Price, up to a maximum resultant holding of 2.99% of the Company’s outstanding issued share capital. Assuming completion of the Placing and conversion in full by Laurus of the maximum amount of shares permitted by the loan agreement, Laurus’ aggregate holding in the Enlarged Share Capital would amount to 3,007,098 shares or 2.5% of the Enlarged Share Capital, of which 1,116,920 shares are already held by Laurus, following a conversion event announced on 18 November 2005. In the event that Laurus does not choose to convert any of the loan amount to be repaid, Laurus would continue to hold 1.0% of the Enlarged Share Capital.

Regardless of further conversion and subject to agreement, it is expected that Laurus will enter into an orderly market arrangement on customary terms.

Working Capital

In addition, the Directors wish to increase the level of working capital funding available to the Company. This will allow funding for the higher trade debtor position associated with the anticipated growth in sales. The Directors are of the opinion that, taking into account the proceeds of the Placing, the Company will have sufficient working capital for its present requirements, that is to say, for at least the next 12 months.

APPENDIX

TERMS AND CONDITIONS OF AND IMPORTANT INFORMATION ON THE PLACING

The Placing and the terms and conditions herein, are directed exclusively at persons falling within Article 19 and/or Articles 47 to 50 of the Financial Service and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (such category of investors being referred to as "Relevant Persons") and no other person should respond to this announcement. Accordingly, this announcement is exempt from the general restriction set out in Section 21 of the FSMA on the communication of invitations or inducements to engage in investment activity and has not been approved by a person who is authorised under the FSMA.

Members of the public are not entitled to take part in the Placing and this announcement is communicated to them for the purposes of information only. This announcement and the terms and conditions herein must not be relied on, acted on or responded to by persons who are not Relevant Persons. If you are in any doubt as to whether you are a Relevant Person you should consult a professional adviser for advice.

This announcement and appendix do not constitute an offer to sell or issue or solicitation of an offer to buy or subscribe for new Ordinary Shares in any jurisdiction, and any acquisition or application for Ordinary Shares should only be made on the basis of information contained in this document.

The following definitions have been used in this announcement:

The Placing

Under the Placing, Panmure Gordon & Co on behalf of the Company, has conditionally placed 17,500,000 new Ordinary Shares at the Placing Price to raise £3.5 million (or approximately £3.2 million net of expenses).

Application will be made (conditional on the approval of shareholders at the EGM) to the London Stock Exchange for the admission of the Placing Shares to trading on AIM. It is expected that Admission will occur and that dealings will commence on 24 May 2006 at which time it is also expected that the Placing Shares will be enabled for settlement in CREST.

Terms of the Placing Agreement

Pursuant to the Placing Agreement, Panmure Gordon & Co has agreed to use its reasonable endeavours to place the Placing Shares with placees selected by it. Panmure Gordon & Co has further agreed itself to subscribe such number of the Placing Shares for which it fails to procure placees.

The Placing is conditional upon, inter alia, the passing of a resolution at the EGM, Admission and on the Placing Agreement having become unconditional and not having been terminated in accordance with its terms prior to Admission. If the conditions of the Placing Agreement are not fulfilled or waived on or before 8.00 am on 24 May 2006 (or such later time and date as the Company and Panmure Gordon & Co may agree, being no later than 8.00 am on 8 June 2006) the Placing will not become unconditional and the placing monies will be returned to the placees, without interest, as soon as practicable thereafter.

In consideration of their services in connection with the Placing, the Company will pay to Panmure Gordon & Co a commission of a certain percentage of the aggregate value, at the Placing Price, of the Placing Shares as well as a corporate finance fee. The Placing Agreement contains warranties given by the Company and the Directors with respect to the Group, its business and certain matters connected with the Placing. Panmure Gordon & Co is entitled to terminate the Placing Agreement in certain circumstances prior to Admission, principally in the event that any of the warranties contained therein are, or become, materially untrue, inaccurate or misleading or if an event of force majeure arises.

Overseas shareholders

The Placing Shares have not been and will not be registered under the Securities Act or under the securities law of any state of the United States nor have they been qualified for sale under the securities legislation of any province or territory of Canada and the relevant exemptions are not being obtained from the securities commission of any province of Canada and accordingly, the Placing Shares may not be offered, sold, taken up, delivered or transferred (directly or indirectly) and will not qualify for sale within the United States or Canada or to, or for the account or benefit of, any person or corporation in (or with a registered address in) the United States or Canada.

The Placing Shares will not be lodged or registered with the Australian Securities and Investments Commission under Australia's Corporations Law and are not being offered for subscription or sale and may not be directly or indirectly offered, sold or delivered in or into Australia or for the account or benefit of any person or corporation in (or with a registered address in) Australia.

No document in relation to the Placing Shares has been or will be lodged for registration with the Registrar of Companies in the Republic of Ireland and the Placing Shares will not be offered, sold or delivered, directly or indirectly in the Republic of Ireland. All subscribers for Placing Shares must provide addresses outside the Republic of Ireland for the receipt of certificates for Placing Shares.

The relevant clearances have not been, and will not be, obtained from the Ministry of Finance of Japan and no document in relation to the Placing has been or will be lodged with or registered by the Ministry of Finance of Japan. The Placing Shares may not therefore be offered or sold, directly or indirectly, in or into Japan, its territories and possessions and any areas subject to its jurisdiction.

General

This announcement is the sole responsibility of the Company. Panmure Gordon & Co is acting as nominated adviser, broker and financial adviser to the Company and to no other person in relation to the Placing. Panmure Gordon & Co will not be responsible to any person other than the Company for providing the protections afforded to the customers of Panmure Gordon & Co nor for advising any person other than the Company on the transactions and arrangements referred to in this document.

These terms and conditions apply to persons making an offer to subscribe for Placing Shares under the Placing. Each person to whom these conditions apply, as described above, who confirms his agreement to Panmure Gordon & Co (on behalf of itself and the Company) to subscribe for Placing Shares (which may include Panmure Gordon & Co and/or its nominee(s)) hereby agrees with each of Panmure Gordon & Co and the Company to be bound by these terms and conditions as being the terms and conditions on which the Placing Shares will be issued under the Placing. A Placee shall, without limitation, become so bound if Panmure Gordon & Co confirms to it by telephone (i) the Placing Price and (ii) its allocation (the "Confirmation") and Panmure Gordon & Co so notifies the Company’s registrar on behalf of the Company.

Conditional on (i) the passing of the resolution at the EGM, (ii) Admission occurring on 24 May 2006 or such later date as the Company and Panmure Gordon & Co may agree (not being later than 8 June 2006), (iii) the Confirmation, each Placee agrees to subscribe for the number of Placing Shares allocated to it, at the Placing Price. To the fullest extent permitted by law, each Placee acknowledges and agrees that it will not be entitled to exercise any remedy of rescission at any time. This does not affect any other rights a Placee may have. A conditional contract note will be dispatched as soon as possible following the Confirmation.

Each Placee undertakes to pay the Placing Price for the Placing Shares issued to such Placee in such manner as shall be directed by Panmure Gordon & Co. Liability for stamp duty and stamp duty reserve tax is described below. In the event of failure by any Placee to pay as so directed, the relevant Placee shall be deemed hereby to have appointed Panmure Gordon & Co or any nominee of Panmure Gordon & Co to sell (in one or more transactions) any or all of the Placing Shares in respect of which payment shall not have been made as directed by Panmure Gordon & Co.

By participating in the placing, each Placee irrevocably represents, warrants and undertakes to Panmure Gordon & Co (for itself and as agent of the Company) that:

(a) it and/or each person on whose behalf it is participating (in whole or in part) in the Placing or to whom it allocates its Placing Shares in whole or in part:

(i) has the capacity and authority and is entitled to enter into and perform its obligations as a subscriber of Placing Shares and will honour such obligations; and

(ii) has fully observed all laws of relevant jurisdictions and obtained all necessary governmental or other consents in either case which may be required in relation to the subscription by it of Placing Shares;

(b) it is not a person who is resident in, or a citizen of, the United States, Canada, Australia, the Republic of Ireland or Japan (or an agent or nominee of such a person) or a corporation, partnership or other entity organised under the laws of any such jurisdiction (or an agent or nominee of such a person);

(c) it is a Relevant Person;

(d) in agreeing to subscribe for Placing Shares it has received and read this document including this appendix and is not relying on any information, representation or warranty relating to the Placing, Placing Shares or the Company other than as contained in this document and it has not relied on and is not relying on any representation or warranty or agreement by Panmure Gordon & Co or the Company or any of their respective directors, employees or agents or any other person except as set out in the express terms herein;

(e) save where Panmure Gordon & Co has been given prior written notice to the contrary, in participating in the Placing it is acting as principal and for no other person and that its acceptance of that participation will not give any other person a contractual right to require the issue by the Company of any of the Placing Shares;

(f) it irrevocably confirms Panmure Gordon & Co's discretion with regard to the Placing Agreement and agrees that Panmure Gordon & Co does not owe it any fiduciary duties in respect of any claim it may have relating to the Placing;

(g) it acknowledges that the Placing Shares have not been and will not be registered under the Securities Act or under the securities laws of any State of the United States, that the relevant clearances have not been and will not be obtained from the Securities Commission of any province of Canada and that the Ordinary Shares have not been and will not be registered under the securities laws of Australia, the Republic of Ireland or Japan and, therefore, the Placing Shares may not, subject to certain exceptions, be directly or indirectly offered or sold in the United States, Canada, Australia, the Republic of Ireland or Japan;

(h) it acknowledges and agrees that neither it nor any affiliate, nor any person acting on its or any affiliate's behalf, has or will offer, sell, take up, renounce, transfer or deliver directly or indirectly any Placing Shares within the United States, Canada, Australia, the Republic of Ireland or Japan or offer, sell, take up, renounce, transfer or deliver in favour of a resident of Canada, Australia, the Republic of Ireland or Japan;

(i) it has not offered or sold and will not offer or sell any Placing Shares in the United Kingdom prior to Admission except in circumstances which have not resulted and will not result in an obligation to publish an approved prospectus arising under section 85(1) of the FSMA or a breach of such section;

(j) it has complied with all relevant laws of all territories, or obtained all requisite governmental or other consents which may be required in connection with its participation in the Placing; that it has complied with all requisite formalities and that it has not taken any action or omitted to take any action which will or may result in Panmure Gordon & Co, or the Company or any of its directors, officers, agents, employees or advisors acting in breach of the legal and regulatory requirements of any territory in connection with the Placing or its application; that it is not in a territory in which it is unlawful to make an offer to subscribe for Placing Shares; and that it will pay any issue or other taxes due under any relevant non-UK laws;

(k) it acknowledges and agrees in connection with its participation in the Placing that Panmure Gordon & Co is not acting for it in relation to the Placing or otherwise and that Panmure Gordon & Co will not have any duties or responsibilities to it for providing the protections afforded to its customers or for advising it with regard to the Placing or the Placing Shares, nor do the contents of this announcement constitute the giving of investment advice by Panmure Gordon & Co to it;

(l) it has obtained all necessary consents and authorities to enable it to give its commitment to subscribe for Placing Shares and to perform its obligations as set out herein;

(m) save where Panmure Gordon & Co has been given prior written notice to the contrary, it is not a person falling within subsections (6), (7) or (8) of sections 67 or 70 or subsections (2) and (3) of section 93 or subsection (1) of section 96 of the Finance Act 1986 (or an agent or nominee of such person);

(n) save where Panmure Gordon & Co has been given prior written notice to the contrary, the issue of Placing Shares to it (whether as principal, agent or nominee) will not be subject to stamp duty or stamp duty reserve tax at the increased rates referred to in sections 67 or 93 (Depositary Receipts) or sections 70 or 96 (Clearance Services) of the Finance Act 1986;

(o) in the case of a person who confirms to Panmure Gordon & Co on behalf of a Placee an agreement to subscribe for Placing Shares and/or who authorises Panmure Gordon & Co to notify the Placee's name to the Company’s registrar, that person represents and warrants that he has authority to do all such acts on behalf of the Placee;

(p) to the extent that a Placee is subscribing for Placing Shares on behalf of a third party and prior written notice of such matter has been given to Panmure Gordon & Co as contemplated by paragraph (e) of this appendix;

(i) such Placee has carried out applicable procedures to verify the identity of such third party for the purposes of the Money Laundering Regulations 2003 (the "Regulations");

(ii) such Placee has complied fully with its obligations pursuant to the Regulations; and

(iii) such Placee will provide Panmure Gordon & Co on demand with any information it might require for the purposes of verification under the Regulations;

(q) it is aware of, has complied with and will comply with its obligations in connection with money laundering under the Proceeds of Crime Act 2002; and

(r) it acknowledges that the issue of the Placing Shares to it will be issued subject to the terms and conditions set out herein.

In the event that a Placee is not able to give the warranties in (m) and (n) above, stamp duty or stamp duty reserve tax may be chargeable or may be chargeable at a higher rate: neither Panmure Gordon & Co nor the Company will be responsible for any resulting liability to stamp duty or stamp duty reserve tax, which shall be for the account of the Placee and in respect of which the Placee agrees to indemnify, and keep indemnified, Panmure Gordon & Co and the Company.

Each Placee irrevocably appoints any director of Panmure Gordon & Co as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares offered to it;

Settlement of the transactions in the Placing Shares following Admission will take place within the CREST system against Panmure Gordon & Co's CREST account 83801. The usual rules of secondary settlement and trading will apply.

Panmure Gordon & Co will endeavour to meet the demands of those Placees indicating that they wish to hold their Placing Shares in certificated form.

In the case of a joint agreement to subscribe for Placing Shares, references to a Placee in these terms and conditions are to each Placee who is a party to such agreement and each such Placee’s liability is joint and several.

These terms and conditions and all documents and agreements into which these terms and conditions are incorporated by reference or otherwise validly form a part will be governed by and construed in accordance with English law. For the exclusive benefit of Panmure Gordon & Co and the Company each Placee irrevocably submits to the exclusive jurisdiction of the English courts in respect of these matters. This does not prevent an action being taken against the Placee in another jurisdiction.