Plasmon to Raise 10 Million Pounds

Plasmon Plc announces a major growth strategy update and a proposed placing to raise approximately £10 million, before expenses, by way of a placing of 100,000,000 new ordinary shares at 10 pence per share.

The Placing is subject to shareholder approval.

Reasons for the Placing
To achieve its growth objectives, the Company wants to invest in the development of a direct customer-facing sales and service channel. This will involve the recruitment of senior (predominantly US-based) executives, most of whom have been identified and are ready to join the business. The directors believe that existing facilities will fund the working capital requirement relating to sales growth.
The proceeds of the Placing are expected to be £10 million before expenses and will be
used to:
• fund recruitment and investment in the customer-facing sales and service channel and industry marketing strategy;
• strengthen the Company’s intellectual property in the ‘software solution layer’ of Archive Appliance; and
• fund the working capital requirements of the Company and provide customers and employees with confidence in Plasmon’s long-term growth prospects.

Primarily as a result of this investment in a faster growth strategy, the Company is now deferring its cash break-even target to 2H09.

Proposed Long-Term Incentive Plan
As part of the Placing, the Company proposes to introduce a long-term incentive plan under which Steven Murphy, Chief Executive, will be awarded a conditional grant of shares in the Company ("LTIP"). The LTIP, which is subject to the approval of shareholders at the General Meeting, will grant approximately 6.6 million shares to Steven Murphy which will vest over a three year period depending on share price performance, with a starting threshold of 35p per share and fully vesting if 120p per
share is achieved.