365.L Regulatory News (365)

Iafyds plc

 ("Iafyds" or the "Company")

Proposed Acquisition of 365 Agile Limited

Proposed change of name to 365 Agile Group plc

Proposed Share Consolidation

Proposed Placing

Admission of Enlarged Share Capital to trading on AIM

and

Notice of General Meeting

Iafyds is pleased to announce the proposed acquisition of 365 Agile Limited ("365Agile") for an aggregate consideration of £8.5 million to be satisfied by the issue of the Consideration Shares. 365Agile is an IP rich software business with a proprietary Internet of Things offering. In order to fund the related costs of the Proposals and additional working capital, the Company has conditionally raised £2.24 million at a price of 75p per New Ordinary Share.

365Agile

· 365Agile's core product offering, Agile, is an innovative software platform which provides a new way of working:

· Enables businesses to streamline process and reduce operational costs whilst improving customer service.

· Allows field based/ customer facing teams to securely access any system, data and/or document from any global location.

· Users can work remotely whilst having access to all of the information in existing back-office systems.

· Technology stack built on Microsoft's Azure cloud providing secure connectivity from smart phones & tablet devices

· Allows users to capture, upload and stream audio, video, images, documents and data, via a single pane of glass (e.g. smartphones, tablets).

· 365Agile also offers a complete eco-system for Internet of Things ("IoT") solutions

· Includes a secure two-way radio communication protocol allowing devices to be 'smart' enabled.

· Allowing organisations to harvest data from a multitude of smart sensors in the field such as temperature, moisture, movement, light and pressure.

· Microsoft has published a case study about 365Agile's product and is actively working with the company to promote IoT software & hardware solutions built on Azure

Transaction Highlights

· Proposed acquisition of 365Agile for an aggregate consideration of £8.5 million to be satisfied by the issue of New Ordinary Shares at a price of 75p per New Ordinary Share;

· Conversion of debt facilities into New Ordinary Shares at the Issue Price

· £100,000 provided by Jonathan Holyhead, co-founder and CEO of 365Agile

· £850,000 provided by MXC Capital Limited and MXC Guernsey Limited

· Oversubscribed placing of New Ordinary Shares at a price of 75p per New Ordinary share, raising gross proceeds of £2.24 million to be used for:

· Funding the costs related to the Proposals

· Additional working capital for the Enlarged Group

· The Acquisition constitutes a reverse takeover under Rule 14 of the AIM Rules for Companies and accordingly requires Shareholder approval;

· On Admission the Board will comprise Clive Carver (non-executive chairman), Colin Hutchinson (non-executive director), Jonathan Holyhead (chief executive officer) and Jill Collighan (finance director); and

· Proposed consolidation of every 10,000 Existing Ordinary Shares into one New Ordinary Share.

Clive Carver, Non-Executive Chairman of Iafyds commented:

"It has been our stated investment strategy to seek investment in a business with, amongst other characteristics, a strong management team, good growth opportunities, a significant potential market opportunity and the ability to generate strong cash flows in the future. We believe that in 365Agile we have identified a business that meets these criteria and look forward to an exciting future."

Jonathan Holyhead, CEO of 365Agile commented:

"Joining AIM is a big step in developing the potential of our technology; the enhanced profile and additional capital will enable us to accelerate our product development and drive further growth in the company. This will assist us in increasing our presence in our current markets and will drive growth in future emerging solutions. Furthermore we are very excited about the potential of our IoT offering which has already been well received by industry partners and users. We believe our unique software & hardware solutions have the capability to deliver huge operational cost savings and service improvements across all sectors.

The Acquisition constitutes a reverse takeover under Rule 14 of the AIM Rules for Companies and is therefore conditional, inter alia, on approval by Shareholders which will be sought at a general meeting of the Company to be held on 20 August 2015 at 10 a.m. at the offices of K&L Gates LLP, One New Change, London EC4M 9AF, notice of which is set out at the end of the Admission Document, which will be posted to Shareholders today and is available on the Company's website: www.iafyds.com.

finnCap Limited is acting as Nominated Adviser and sole broker to the Company. MXC Capital Advisory LLP, a subsidiary of MXC Capital Limited, is advising 365Agile. Upon Admission, MXC Capital Limited together with MXC Guernsey Limited will own 23.2 per cent. of the Enlarged Group.

Contacts:

BACKGROUND ON IAFYDS PLC

VPhase plc was admitted to AIM on 26 September 2007 as a developer of voltage control products designed to reduce energy consumption. As a result of being unable to secure additional funding for the Company, administrators were appointed in September 2013. In October 2013 the Company disposed of all of the intellectual property and tooling of the Company's operating subsidiary VPhase Smart Energy Limited, which was in administration. In December 2013 the Company exited administration and entered into a company voluntary arrangement with its creditors and members.

In February 2014 the Company raised £150,000 by the issue of shares, changed its name to Iafyds plc and became an investment company under the AIM Rules. Since that time the Company has sought investment opportunities consistent with its published investment policy. In June 2014, the Company raised a further £110,000 by the issue of shares to cover the anticipated running costs of the Company whilst a suitable investment was being sought.

BACKGROUND ON 365AGILE

365Agile was co-founded by Jonathan Holyhead and Davinder Sanghera in November 2014 as part of Documotive Limited. In November 2014, Documotive was acquired by Castleton Technology plc at which point the business and assets of 365Agile were hived out of Documotive.

365Agile acquired South View Solutions in February 2015 and Ciseco Limited in March 2015, which trades as 'Wireless Things'. South View Solutions was established in 2004 and provides mobile working and system integration solutions focusing on the social housing sector. 365Agile is in the process of transitioning the existing South View Solutions customers on to the Agile product. Wireless Things supplies and manufactures a secure two-way radio communication chip which can be fitted to any device. The radio chip is currently available in a number of sensors which can measure, inter alia, temperature, movement, light levels and moisture.

365Agile was established to deliver a completely new way of working for field based teams using the very latest technology. Traditional back-office systems are not designed to be used on smart phones or tablets. The core product offering of 365Agile is designed to operate on top of Microsoft's Azure technology stack. The Agile product allows field based and customer facing teams to securely access any system, data and/or document from any global location. Users can work remotely whilst having access to all of the information in existing back-office systems, as well as having the ability to capture, upload and stream audio, video, images, documents and data via a single pane of glass (e.g. smartphones, tablets). Users can complete field-based tasks in real time and securely connect to the office without the need for any for any third party software. The Agile product removes the need for paper via its business process layer and forms designer that allows real-time updates into back-office systems via 'start' and 'end' points meaning that tasks can be delivered and completed quicker whilst removing duplication of data entry and manual administration. The system is entity based (i.e. an entity can be a person, property, asset, sensor or incident) and therefore can be configured to meet the needs of all areas of any business meaning that a single enterprise mobilisation solution can be deployed across the whole organization. The system can be configured as an on premise, cloud or hybrid cloud/on-premise solution, works both on-line and off-line and will securely synchronise all relevant data.

In addition, the combined technology of Agile and Wireless Things offers a complete eco-system for the Internet of Things ("IoT") solutions that includes a secure two-way radio communication protocol to enable communication between sensors, devices and people in the field. The secure two-way radio communication protocol allows radio chips to be retro-fitted to existing devices or fitted to new devices during the manufacturing process to 'smart' enable them. This allows communication to flow to and from the device via hubs which can be located at a range of up to 1 kilometre from each sensor. This means that data can be accessed in real-time from devices in the field in order to monitor, inter alia, moisture, temperature, light levels or power consumption.

For the eight month period ended 30 April 2015, the summary income statement of Agile Group is as follows:

BACKGROUND TO AND REASONS FOR THE ACQUISITION

In line with its investing policy, the Company's stated strategy has been to seek investment in a business with, amongst other characteristics, strong management team, good growth opportunities, a significant potential market opportunity and the ability to generate strong cash flows in the future. The Board believes that in 365Agile they have identified a business that meets these criteria.

The Directors consider that the opportunity represented by the Acquisition is in the best interests of the Company and Shareholders for the following reasons:

• 365Agile owns the IP behind the Agile product, which the Directors and Proposed Directors believe is superior to that of its competitors.

• In today's business world, ensuring operational efficiency is a high priority within businesses. Any additional costs or inefficiency will give competitors an advantage. In an ever increasing competitive economy Agile provides businesses with a competitive advantage to streamline processes and reduce operational costs whilst improving customer service.

• 365Agile has already achieved traction and proof of concept in a well-established vertical, social housing, which management are extremely familiar with, along with the opportunity to build scale and increase the penetration in the sector.

• 365Agile's management team is highly motivated and ambitious, with a track record of building a profitable, solid and sustainable business.

• The opportunity exists to explore uses of the product in other target markets.

• Agile is IoT ready and will allow organisations to harvest data from a multitude of smart sensors in the field such as temperature, moisture, movement, light and pressure. The Directors and Proposed Directors believe that there is significant potential in 365Agile's IoT offering, which has already been well received by industry partners and users such as Microsoft, who are drafting two case studies about the Agile product, and a global blind manufacturer who wants to install sensors on their products to allow remote monitoring.

MARKET OPPORTUNITY AND COMPETITIVE ENVIRONMENT

The Enlarged Group's strategy will be to sell Agile through resellers into the identified target markets to add value to existing ICT infrastructure, systems and services. The product can be installed as a fully hosted solution, partially hosted solution (with on-premise data) or fully on-premise.

Resellers will provide all associated professional services including configuration and forms design with 365Agile providing additional support and on-going product development of the platform.

To increase the recurring revenue base of the Enlarged Group, the Enlarged Group proposes, where possible, to charge licences and support and maintenance on a monthly basis. Licences will be controlled via a central administration portal and the system supports a multi-tenanted architecture. 365Agile can on-board resellers, resellers can on-board customers and configure product functionality & features once appropriate licences are granted. The architecture of Microsoft Azure's technology stack, on which the Agile product is designed to operate, will allow licences to be terminated immediately in cases of non-payment.

The Enlarged Group's target markets will be:

(a) Social Housing

The Social Housing sector is under pressure to work more effectively whilst delivering higher levels of service to its customers. The sector faces a challenge in delivering an effective service due to the deployment of a range of disparate back-office systems that contain information about its customers, their homes, the assets within the home and any associated transactions including Rents, Repairs, Complaints and Cases. At present, the Agile product is sold exclusively in the social housing sector through 365 Agile's reseller arrangements with Castleton Technology plc. Licence fees vary according to the number of properties owned by the Housing Association. Annual support and maintenance fees are charged at 20 per cent. of the licence fee.

(b) Local Authorities

The Government has imposed budget reductions across all Local Authorities in an effort to reduce public spending and the financial deficit. This means authorities need to change the way they deliver services in order to balance their budgets. Shared service and engaging with agency partners and other Local Authorities is essential if cost reductions are to be achieved. In addition, the deployment of smart sensors to enable more effective building and asset monitoring will allow organisations to tailor their maintenance visits to become proactive rather than traditional cyclical visits. This will enable organisations to deploy personnel more effectively and reduce unnecessary journeys, allowing field-based teams to focus on priority actions. Access to a greater range of information and the ability to share data from a range of disparate systems will enable shared service models to be deployed.

(c) Repairs Contractors

Traditional mobile repairs systems are typically 'hard wired' to individual systems via bespoke code. The Agile product is different, it uses a highly configurable business layer that can be tailored to meet the needs of the contractor and the contractor's customer. The Directors and Proposed Directors believe that the ability to provide additional information to the contractor to add value through additional services or products will allow organisations to maximise the effectiveness of the field-based team whilst adding value to the customer.

(d) Care & Support

Access to information is vital so that care workers can provide appropriate care. Paper-based systems with manually recorded timesheets and visit reports are not conducive to a well-managed workforce or high quality service. The Agile product removes the need for paper and allows real-time updates into back-office systems meaning that tasks can be delivered and completed quicker whilst removing duplication of data entry and manual administration. In addition, the Agile product will allow a customer's family members to have access to visit reports so they are assured that the customer is receiving appropriate care & support. The deployment of smart sensors will also allow telemetry data such as, inter alia, movement, temperature and light to provide valuable information that will demonstrate a customer's normal and abnormal behaviour. If changes are identified then automated alerts and tasks can be sent to prompt a visit from a warden or a care worker to check on the customer.

The Potential of IoT

IoT, The Internet of Things (sometimes referred to as the 'Internet of Everything') is rapidly emerging as a game changing way of connecting people to smart devices. According to Gartner approximately 26 billion devices will be connected to IoT by 2020 and McKinsey Global Institute research estimates the impact of IoT on the global economy to be $6.2 trillion by 2025. Recent transactions within the IoT arena include Google's acquisition of Nest in January 2014 for $3.2 billion, and British Gas' acquisition of AlertMe in February 2015, the company that powered its Hive heating system, which valued AlertMe at £65 million.

IoT has the capability to deliver huge operational benefits to businesses across all sectors by allowing smart devices to connect to the internet to report faults, provide readings, provide updates and send alerts. In addition people can connect to smart devices and interact with them over the internet to gain information and updates on the status of devices.

IoT will allow the effective deployment and management of field-based teams by concentrating efforts on those devices that require attention. For example, an organisation may completely rethink their planned or preventative maintenance schedule and instead allow the plant & machinery to 'self-report' when it needs maintenance visits or repairs. Areas such as Environmental Monitoring, Infrastructure Management, Building Automation, Medical & Healthcare and Energy Management are all key areas that could benefit the deployment of IoT.

365 Agile utilises Microsoft's Azure technology stack to securely connect people with their smart devices. Agile can integrate with any smart device that is internet-enabled. For example, if a company has plant, assets or equipment installed across the globe, with 365 Agile field-based teams can instantly access and interact with the devices. This has the potential to provide huge operational efficiencies and significantly reduce cost.

COMPETITION

365 Agile competes against a small number of traditional mobile working solution vendors including Total Mobile Limited, 1st Touch Limited, Kirona Solutions Limited and CommonTime Limited. All of these competitors utilise traditional technology that does not offer the configurability or scalability of the Agile product and does not provide native product interfaces (i.e. Windows, Android and iOS). These competitors' products are 'hard wired' to a limited number of back-office systems requiring bespoke code and configuration. The Agile product has a fully configurable business and process layer which allows greater flexibility and configuration to the client, thus allowing easier roll-out to serve a wider range of services.

CURRENT TRADING AND PROSPECTS

Iayfds

The Company is currently an investing company and does not trade. Its results for the year ended 31 Deecember 2014 were announced on 21 April 2015 and showed net assets of £52,000 at the year end.

365 Agile

The current trading of 365 Agile since 30 April 2015 remains in line with the Proposed Directors expectations.

Prospects for the Enlarged Group

The Directors and Proposed Directors believe that the Enlarged Group has considerable growth opportunities in its chosen markets, both organically and via further acquisitions and views the future with confidence.

DIRECTORS AND PROPOSED DIRECTORS

Directors

The Board currently comprises the following directors:

Clive Carver, Non-Executive Chairman

Clive Carver, aged 54 is a chartered accountant and has spent 17 years in the corporate broking arena becoming, successively, head of corporate finance at Seymour Pierce, Williams de Broë and finnCap. Since 2006, Clive has been chairman of Roxi Petroleum PLC, becoming executive chairman in June 2012. Clive is also non-executive chairman of Ascent Resources PLC and interim non-executive chairman of Fastjet plc.

Colin Hutchinson, Non-Executive Director

Colin, aged 39 is a chartered accountant and holds an MBA from Warwick Business School. He has 15 years of international experience gained in commercially orientated finance roles with high growth organisations and start-ups. He has experience across a range of different sectors including telecoms, technology & energy. His most recent role has been as finance director of Ascent Resources plc.

Proposed Directors

On Admission, it is proposed that the following will be appointed to the New Board:

Jonathan Holyhead, Proposed Chief Executive Officer

Jonathan, aged 42, was co-founder and managing director of Documotive which was established in March 2007 to deliver electronic document and records management solutions (EDRM) to the social housing sector, and was subsequently acquired by Castleton Technology plc in November 2014. Jonathan, along with Documotive's co-founder Davinder Sanghera, co-founded 365 Agile.

Before establishing Documotive, Jonathan worked within the document management sector for 11 years working for hardware, software & services businesses supplying a range of EDRM solutions. During this time Jonathan was involved in B2B sales & marketing, service operations management and business partner management activities.

Jill Collighan, Proposed Finance Director

Jill, aged 45, qualified as a chartered certified accountant in 1994, initially joining Lathams, before leaving to set up her own accountancy consultancy business. Jill has worked with Broca plc, which subsequently changed its name to MXC Capital plc, since 2002 and became a director in 2004. She has extensive experience in finance, human resources, investor relations and corporate finance. It is proposed that Jill will combine her role as finance director of the Company with her current role as finance director of MXC Capital.

PRINCIPAL TERMS AND CONDITIONS OF THE ACQUISITION

On 31 July 2015, the Company entered into the Acquisition Agreement with (inter alia) the Vendors pursuant to which the Company has conditionally agreed to acquire the entire issued and to be issued share capital of 365 Agile. The consideration for the Acquisition is £8.5 million, to be satisfied by the issue to the Vendors of the Consideration Shares at the Issue Price.

Completion of the Acquisition Agreement is conditional, amongst other things, upon:

· Shareholder approval of the Resolutions; and

· Admission.

THE PLACING

In order to fund the costs of the Proposals and provide development capital for the Enlarged Group, the Company is seeking to raise £2.24 million (£1.37 million net of expenses) pursuant to the Placing through the issue of the Placing Shares at the Issue Price. The Placing Shares will represent approximately 18.4 per cent. of the Enlarged Share Capital at Admission.

The Placing is not being underwritten. Following Admission the Placing Shares will rank pari passu with the New Ordinary Shares. Application has been made for the admission of the Enlarged Share Capital to trading on AIM which is expected to take place on 21 August 2015.

CONVERSION OF LOANS AND ISSUE OF WARRANTS

Together, MXC Capital and MXC Guernsey Limited currently hold 24.2 per cent. of the issued share capital of 365 Agile. At the time of its investment in 365 Agile in November 2014, MXC Capital also provided a zero coupon convertible debt facility of £750,000 to 365 Agile in order to further fund the company's development. MXC Guernsey Limited and Jonathan Holyhead also each provided a further £100,000 debt facility to 365 Agile. It is proposed that the debt facilities be converted into the Debt Conversion Shares at the Issue Price alongside the Acquisition and Placing. The Company and MXC Capital have also entered into a warrant instrument whereby, conditional upon Admission, MXC Capital will be issued with warrants to subscribe for 834,118 New Ordinary Shares at the Issue Price (as adjusted for new issues post the date of award) which are exercisable over a three year period dependent on share price performance.

TAKEOVER CODE

The proposed issue of the Consideration Shares and the Debt Conversion Shares gives rise to certain considerations under the Takeover Code. Brief details of the Panel, the Takeover Code and the protections they afford are described below.

The Takeover Code is issued and administered by the Panel. The Takeover Code applies to all takeover and merger transactions, however effected, where the offeree company is, inter alia, a company with a registered office in the United Kingdom and whose securities are admitted to trading on either a regulated market or a multilateral trading facility in the United Kingdom. The Company's shares are admitted to trading on AIM and its Shareholders are, therefore, entitled to the protections afforded by the Takeover Code.

Rule 9 of the Takeover Code

Under Rule 9 of the Takeover Code, where any person acquires, whether by a series of transactions over a period of time or not, an interest in shares which (taken together with any interest in shares already held by that person and any interest in shares held or acquired by persons acting in concert with him or her) carry 30 per cent. or more of the voting rights of a company which is subject to the Takeover Code, that person is normally required to make a general offer, to all the holders of any class of equity share capital or other class of transferable securities carrying voting rights in that company, to acquire the balance of their interests in the company.

Rule 9 of the Takeover Code also provides that, among other things, where any person who, together with persons acting in concert with him or her, is interested in shares which in aggregate carry not less than 30 per cent. but not more than 50 per cent. of the voting rights of a company which is subject to the Takeover Code, and such person, or any person acting in concert with him or her, acquires an additional interest in shares which increases the percentage of shares carrying voting rights in which he or she is interested, then such person is normally required to make a general offer, to all the holders of any class of equity share capital or other class of transferable securities carrying voting rights of that company, to acquire the balance of their interests in the company.

An offer under Rule 9 must be in cash (or with a cash alternative) and at the highest price paid within the preceding 12 months for any shares in the company by the person required to make the offer or any person acting in concert with him or her.

Persons acting in concert comprise persons who, pursuant to an agreement or understanding (whether formal or informal), co-operate to obtain or consolidate control of a company or to frustrate an offer for a company. The Concert Party comprises of Jonathan Holyhead and Davinder Sanghera and details of their current interest in the Existing Ordinary Shares and in the Enlarged Share Capital immediately following Admission are set out below:

Following completion of the Proposals and Consequential Proposals, the Concert Party will hold in aggregate 7,419,682 New Ordinary Shares, representing 44.4 per cent. of the Enlarged Share Capital which, without a waiver of the obligations under Rule 9 of the Takeover Code, would oblige the Concert Party to make a general offer to Shareholders for the remaining shares in the Company under Rule 9 of the Takeover Code.

Dispensation from General Offer

Under Note 1 on the Notes on the Dispensations from Rule 9 of the Takeover Code, the Takeover Panel will normally waive the requirement for a general offer to be made in accordance with Rule 9 of the Takeover Code (a "Rule 9 Offer") if, inter alia, the shareholders of the company who are independent of the person who would otherwise be required to make an offer and any person(s) acting in concert with him or her (the "Independent Shareholders") pass an ordinary resolution on a poll at a general meeting (a "Whitewash Resolution") approving such a waiver.

The Takeover Panel may waive the requirement for a Whitewash Resolution to be considered at a general meeting (and for a circular to be prepared in accordance with Section 4 of Appendix 1 to the Takeover Code) if Independent Shareholders holding more than 50 per cent. of the company's shares capable of being voted on such a resolution confirm in writing that they would vote in favour of the Whitewash Resolution, were such a resolution to be put to the shareholders of the company at a general meeting.

The Company has obtained such written confirmation from Henderson, being an Independent Shareholder holding 90 per cent. of the Existing Ordinary Shares, and the Panel has accordingly waived the requirement for a Whitewash Resolution.

Accordingly, by voting in favour of the Resolutions to be proposed at the General Meeting, the issue of the Consideration Shares will be effected without the requirement for the Concert Party to make a Rule 9 Offer. Shareholders should note that, on Admission, the Concert Party will control approximately 44.4 per cent. of the Enlarged Share Capital and (for so long as they continue to be treated as acting in concert) any further increase in that interest in shares will be subject to the provisions of Rule 9 of the Takeover Code.

About the Concert Party

Jonathan Holyhead and Davinder Sanghera, who are currently in a long term relationship, are the co-founders of 365 Agile. Further information on Jonathan, the proposed chief executive officer, can be found above.

Jonathan Holyhead and Davinder Sanghera were also the co-founders of Documotive, further details on which can be found above. Davinder is chief operating officer of Castleton Technology plc, having been sales director of Documotive. Davinder is a director of 365 Agile, but will resign upon completion of the Proposals.

INCENTIVISATION ARRANGEMENTS

The New Board believe that the success of the Enlarged Group will depend to a high degree on management and other members of staff being appropriately motivated and rewarded. The Enlarged Group is therefore proposing to establish a Long Term Incentive Plan, designed to assist in recruitment, motivation, and retention of staff and which will carry performance conditions that will align the interests of management with those of Shareholders.

Participants in the LTIP will receive a share in a pool of 7.5 per cent. of Shareholder value created, which will be the growth in the market capitalisation of the Company since Admission over a period of between 3 to 7 years, as adjusted for the issue of New Ordinary Shares after Admission (but excluding New Ordinary Shares issued pursuant to the LTIP) and taking into account dividends and capital returns, if any.

RELATED PARTY TRANSACTION

Henderson has subscribed for 1,333,333 New Ordinary Shares in the Placing and its participation is classified as a related party transaction for the purposes of Rule13 of the AIM Rules as it is a substantial shareholder in the Company.

Henderson are a material placee and important to the success of the Placing. As disclosed in the Admission Document the Directors are due remuneration on Completion. Accordingly there are not deemed to be any independent directors for the purposes of providing the fair and reasonable opinion required under Rule 13 of the AIM Rules for Companies. finnCap Limited, the Company's nominated adviser, considers that the terms of Henderson's participation in the Placing of New Ordinary Shares are fair and reasonable insofar as the Shareholders of the Company are concerned.

DIVIDEND POLICY

Any future dividends will naturally be proposed or declared taking account of the Enlarged Group's profitability, current cash position and prospects, whilst also having regard to the future cash demands of the business. The Directors and Proposed Directors do not anticipate the proposal or any payment of any dividends during the next full financial year to 31 December 2015.

CORPORATE GOVERNANCE

The Directors and Proposed Directors support high standards of corporate governance. Accordingly, the New Board will meet regularly throughout the year and all necessary information will be supplied to the New Board on a timely basis to enable it to discharge its duties effectively. Additionally, special meetings will take place or other arrangements will be made when Board decisions are required in advance of regular meetings. The New Board has established financial controls and reporting procedures which are considered appropriate given the size and structure of the Enlarged Group. It is the intention of the New Board that these controls will be reviewed regularly in light of the future growth and development of the Enlarged Group and adjusted accordingly.

Share dealing code

The Directors comply with Rule 21 of the AIM Rules for Companies relating to directors' and applicable employees' dealings in the Company's securities. Accordingly, the Company has adopted a share dealing code for directors and applicable employees and the Company will take all reasonable steps to ensure compliance by its directors and applicable employees with the provisions of the AIM Rules for Companies relating to dealing in securities.

Compliance with the Corporate Governance Code

The New Board recognises the importance of, and is committed to, good corporate governance and intends, following Admission, so far as is practicable and appropriate for a company of its size, stage of development and nature as a company whose securities are traded on AIM to follow the provisions of the Corporate Governance Code. In any event, the New Board intends to comply with the provisions of the QCA Guidelines.

On Admission, the New Board will comprise four directors consisting of two executive directors and two non-executive directors. The Corporate Governance Code states that the board should determine whether a director is independent in character and judgment and whether there are relationships or circumstances which are likely to affect, or could appear to affect, the director's judgment.

The New Board considers that Clive Carver and Colin Hutchinson are independent within the meaning of the QCA Guidelines.

LOCK-INS AND ORDERLY MARKET ARRANGEMENTS

Each of the Directors and the Proposed Directors have given undertakings in the Placing Agreement and each of MXC Capital, Davinder Sanghera, Miles Hodkinson and Maria Crouchley have given undertakings in their respective lock-in deed not to sell, charge or grant any interests over any New Ordinary Shares held by them (subject to certain exemptions) during the 12 month period commencing on Admission. In addition, each of these parties have undertaken to make any disposal through the Company's brokers for a 12 month period thereafter so as to maintain an orderly market in the shares.

RELATIONSHIP AGREEMENT

On Admission, the Concert Party will hold 44.4 per cent. of the Enlarged Share Capital. The Company, the Concert Party and finnCap have entered into a relationship agreement to regulate aspects of the continuing relationship between the Company and the Concert Party to ensure that the Company is capable at all times of carrying on its business independently of the Concert Party and that future transactions between the Company and the Concert Party are on arm's length terms and on a normal commercial basis.

IRREVOCABLE UNDERTAKING

Henderson has irrevocably undertaken to the Company to vote in favour of the Resolutions to be proposed at the General Meeting, in respect of the 9,023,061,648 Existing Ordinary Shares controlled by it, representing approximately 89.7 per cent. of the Existing Ordinary Shares.

CHANGE OF NAME

It is proposed to change the name of the Company to 365 Agile Group plc with effect from Admission by resolution of the Board in accordance with the power conferred by the Articles.

Upon the change of name being registered at Companies House, the Company's AIM ticker symbol will be changed to 365. The Company's website address will be changed to www.365agile.com with effect from Admission.

SHARE CONSOLIDATION

Under the Share Consolidation it is proposed that every 10,000 Existing Ordinary Shares be consolidated into one New Ordinary Share. Accordingly, the proportion of Existing Ordinary Shares held by each Shareholder immediately before the Share Consolidation will, save for fractional entitlements (which are discussed further below), be the same as the proportion of New Ordinary Shares held by each Shareholder immediately after the Share Consolidation. In the event that the number of Existing Ordinary Shares held by a Shareholder is not exactly divisible by 10,000, the Share Consolidation will generate an entitlement to a fraction of a New Ordinary Share. Any New Ordinary Shares in respect of which there are such fractional entitlements will be aggregated and sold in the market for the best price reasonably obtainable and the net proceeds of such sale distributed in due proportion among those members entitled to fractions of a New Ordinary Share except that any amount otherwise due to a member of less than £5 will be retained for the benefit of the Company. Any Shareholder holding fewer than 10,000 Existing Ordinary Shares at the Record Date will cease to be a Shareholder. The Directors and Proposed Directors believe that the Share Consolidation will result in a more appropriate number of shares in issue given the Company's size.

BUY-BACK OF DEFERRED SHARES

The Deferred Shares were created pursuant to a resolution passed at a general meeting of Shareholders held on 2 February 2014 to effect a share split, variation of share rights and reclassification of share capital to reduce the nominal value of the Existing Ordinary Shares to its current value. The Deferred Shares were created with rights that gave them no economic value. The New Board can see no reason for the Deferred Shares to remain on the balance sheet and recommends that the Deferred Shares are purchased by the Company. Under the provisions of the Act, a public limited company may not fund the purchase of its shares except out of its distributable reserves or the proceeds of a fresh issue of shares made solely for the purpose of such buy-back. The Company has no distributable reserves with which to fund the Buy-Back and therefore it is proposed that the Buy-Back is funded out of a fresh issue of shares issued solely for the purpose of the Buy-Back as permitted by the Act. Accordingly, the Company has issued Existing Ordinary Shares to the Registrar to raise sufficient funds to acquire the Deferred Shares. Under the provisions of the Articles, the Company has the power to buy back the Deferred Shares for one penny in aggregate per each holder of Deferred Shares. To simplify the Buy-Back, the Company will use its irrevocable authority under the provisions of the Articles to appoint any person to execute on behalf of the holders of the Deferred Shares a transfer of the Deferred Shares to a custodian pending completion of the Buy-Back. In accordance with this authority, prior to the acquisition of the Deferred Shares by the Company pursuant to the Buy-Back Agreement, the Deferred Shares will be transferred to Gravitas Nominees Limited, a nominee of the Company's solicitors, K&L Gates LLP. Accordingly, the total cost of the Buy-Back will be one penny. Once the Buy-Back has been completed the Deferred Shares will be cancelled. A copy of the Buy-Back Agreement is currently available for inspection on the Company's website at www.iafyds.com and at the office of its Registered Office. A copy of the Buy-Back Agreement will also be available for inspection at the General Meeting. The Buy-Back is conditional upon Shareholder approval, and, at the General Meeting, Shareholders will be asked to approve, if thought fit, the terms of the Buy-Back Agreement.

GENERAL MEETING

Set out at the end of the Admission Document is a notice convening the General Meeting to be held on 20 August 2015 at 10 a.m. at the offices of K&L Gates LLP at One New Change, London EC4M 9AF at which the following Resolutions will be proposed, of which Resolutions 1 to 6 (inclusive) will be proposed as ordinary resolutions and Resolutions 7 to 8 (inclusive) will be proposed as special resolutions:

1. the approval of Acquisition for the purposes of Rule 14 of the AIM Rules for Companies;

2. the appointment of Jonathan Holyhead as a director of the Company;

3. the appointment of Jill Collighan as a director of the Company;

4. the approval of Buy-Back Agreement;

5. the approval of Share Consolidation;

6. the authorisation of the Directors to allot New Ordinary Shares in connection with the Acquisition, the Placing, the Warrant Instrument and the LTIP as well as a general authorisation to allot or grant rights to subscribe for New Ordinary Shares with an aggregate nominal value equal to one third of the aggregate nominal value of the Enlarged Share Capital at Admission;

7. the adoption of the New Articles; and

8. the disapplication of statutory pre-emption rights in respect of the allotment of New Ordinary Shares in connection with the Placing and, the Warrant Instrument and the LTIP otherwise up to an aggregate nominal value equal to 15 per cent. of the aggregate nominal value of the Enlarged Share Capital at Admission.

ADMISSION AND CREST SETTLEMENT

As the Acquisition constitutes a reverse takeover of the Company under the AIM Rules for Companies, Shareholder consent to the Acquisition is required at the General Meeting. If the Resolutions are duly passed at the General Meeting, the admission of the Company's Existing Ordinary Shares to trading on AIM will be cancelled (immediately prior to Admission) and the Enlarged Share Capital will be admitted to trading on AIM.

Application has been made to London Stock Exchange for the Enlarged Share Capital to be admitted to trading on AIM. Admission is expected to take place at 8 a.m. on 21 August 2015.

Clearance has been obtained from HMRC that the Company is a qualifying company for the purposes of EIS and, that they would be able to authorise certificates on receipt of an EIS1 and that the New Ordinary Shares would be qualifying holdings for the purpose of VCT. No guarantee is given that the qualifying conditions will continue to be met such as to retain any qualifying status for VCT and EIS purposes and no assurance is given as to the investors' qualifying status.

The Company was suspended from trading on AIM on 9 February 2015 and under the AIM Rules, a company may remain suspended for a maximum period of six months. If Shareholders do not vote in favour of the Proposals then, pursuant to Rule 41 of the AIM Rules for Companies, admission of the Company's Existing Ordinary Shares will be cancelled at 7am on the business day following the General Meeting and the Company will be wound up.

RECOMMENDATION

As described in the Admission Document which will be posted to Shareholders later today, Clive Carver and Colin Hutchinson are entitled to receive payments on Completion and, consequently, they are not deemed independent of the Proposals. The Directors consider, for the reasons set out above, that the Proposals are in the best interests of the Company and Shareholders as a whole. Accordingly, the Directors recommend that you vote in favour of the Resolutions at the General Meeting.

Expected timetable of principal events

Admission and acquisition statistics

1 Includes 10,056 New Ordinary Shares issued to Panmure Gordon (UK) Limited on exercise of its warrant.

2 Includes 80,000 New Ordinary Shares issued to the Directors in satisfaction of fees due.

The following definitions apply throughout this announcement, unless the context otherwise requires: