Cyanconnode Regulatory News (CYAN)

8 June 2015

Cyan Holdings plc

("Cyan" or "the Company")

Proposed Fundraising, Directors' Dealings &

Notice of General Meeting

Cyan Holdings plc (AIM:CYAN.L), the integrated system and software design company delivering mesh based flexible wireless solutions for utility metering and lighting control, announces that the Company has raised, subject to certain conditions, a total of approximately £4.1 million before expenses, by way of a Placing and a Subscription (collectively the "Fundraising") pursuant to which a total of 2,060,000,000 Ordinary Shares (the "Fundraising Shares") will be issued at 0.20 pence each (the "Placing Price"). The Placing was managed by Allenby Capital Limited ("Allenby") and Beaufort Securities Limited ("Beaufort"). It is intended that the net proceeds from the Fundraising will be used, inter alia, to fund staffing costs for the delivery of customer projects won in India, development and delivery of managed service solutions, business development, customer deployments and further product development work, as set out below.

The Fundraising is conditional, inter alia, on the passing of resolutions at a General Meeting ("GM") to be held at 11.00 a.m. on 30 June 2015 at the registered office, Carisbrooke Court, Buckingway Business Park, Swavesey, Cambridge, CB24 4UQ. A circular containing the notice of the GM (the "Circular") will be posted to all shareholders in the Company on or around 8th June 2015 and will be available to view on the Company's website at: www.cyantechnology.com. Investors should note there will be no Company presentation at the General Meeting, due to it being so soon after the Company's Annual General Meeting.

Application will be made by the Company for the Fundraising Shares to be admitted to trading on AIM. Subject to completion of the Fundraising, it is expected that the Fundraising Shares will be admitted to trading on AIM and that dealings will commence at 8.00 a.m. on 1 July 2015 ("Admission"). Following Admission, the Company will have 6,535,873,628 Ordinary Shares in issue, assuming all of the Fundraising Shares are subscribed for.

Commenting on the Fundraising, John Cronin, Executive Chairman said "We are pleased to be able to continue to attract significant investor interest in the Company and its prospects. Myself and the Cyan Board believe that we have now reached an inflexion point in the business following multiple commercial orders for both our smart metering and lighting solutions from customers in several emerging markets around the world. Cyan shareholders should draw particular encouragement from the recent $3 million Letter of Intent that we received from leading meter vendor, El Sewedy. El Sewedy have informed us that they have selected our mesh based solution for their utility customer in Ghana, subject to contract. In addition, there is an opportunity for Cyan to further develop El Sewedy as a channel into other markets, where they already have a strong presence. The Fundraising proceeds will be invested in the delivery of customer projects (both already won and to be won), as well as incremental investment in extending our software solutions to add new functionality that we will license to utility customers in emerging markets around the world.

I want to take this opportunity to thank our existing shareholders for their continued support as well as to welcome our new institutional and other shareholders." 

Definitions used in this announcement have the meaning set out in the Schedule at the end of this announcement.

Enquiries:

Background to and reasons for the Fundraising

Recent progress

Over the last 11 months, Cyan has announced a number of significant developments involving its wireless solutions for utility metering and lighting control. These developments have principally been within targeted emerging markets, where Cyan's low cost, low power solution provides significant customer benefits. Cyan has initially focused on markets within India, Brazil, China and Sub-Saharan Africa.

India

One of Cyan's most significant developments in 2015 has been the receipt of a purchase order worth approximately £1 million from Enzen Global Solutions Pvt Ltd ("Enzen") for a large pilot project being implemented for Chamundeshwari Electricity Supply Corporation Limited ("CESC"), Mysore, Karnataka in southwest India. CESC is a public utility with responsibility for power distribution to two million domestic customers in India. Under this purchase order, Cyan will supply over 21,000 smart meters and associated hardware and software, acting as Enzen's end-to-end solution provider for smart metering, managing the entire supply chain using local meter manufacturers. The Directors believe that this is the first commercial implementation of advanced metering infrastructure technology by a public utility for consumers in India. In addition, Cyan will provide facility management services to CESC for a period of two years post deployment.

In June 2014, Cyan received its first order for 5,000 retrofit modules in a commercial deployment by Essel Utilities in India, as part of a consortium with Aquameas Instrument Pvt. This was quickly followed in July 2014 by another order for 5,000 units by Tata Power Mumbai for Cyan's integrated CyLec solution as part of a consortium led by Larsen & Toubro. The initial contract with Tata Power was for the deployment of 5,000 consumer meters in a district in Mumbai and around 4,000 meters are now live with the remainder expected to be completed before the end of Q2 2015. The Directors believe that this was the first 865MHz AMI commercial volume project in India.

The Company is currently tendering for a variety of smart metering projects and a number of smart metering contracts are currently in discussion. The Cyan sales team in India are currently tracking a pipeline of nineteen smart metering projects/tenders which have been notified to us by our local partner network and these opportunities amount to up to 580,000 smart meters. These opportunities are for advanced metering infrastructure, automated meter reading and retrofitting. Cyan has deployed twelve pilots in India to date with additional pilots in the planning stage.

China

In July 2014, Cyan strengthened its position in China and received a purchase order for 15,000 Cyan smart lighting control modules, as well as the associated licenses for Cyan's server software, from its China lighting solutions distributor, Aska Technology Limited. This order was received just three months after signing a distribution agreement with Aska Technology Limited. To date, approximately 39,000 smart lighting modules have already been shipped to customers in China.

Brazil

Cyan has a growing presence in Brazil, with multiple metering and lighting pilots having been deployed there. In late 2014, Cyan received a purchase order for 1,000 CyLec retrofit modules, 25 CyLec data concentrator units and other smart meter components from the local contract equipment manufacturer selected by its strategic partner in Brazil, Nobre de la Torre. Cyan also has a smart lighting partnership with Ilumatic, which has led to eleven demonstration installations being deployed across Brazil.

Sub-Saharan Africa

Cyan signed a non-exclusive distribution agreement with XLink Communications (Pty) Ltd ("XLink") to distribute Cyan's smart metering and lighting solutions as well as related Internet of Things applications in South Africa. This agreement included an initial order for a 100 unit proof of concept project in South Africa. XLink's technical support team will deploy this project in the first half of 2015, for a leading provider of energy management systems, to demonstrate and evaluate the benefits delivered by CyLec. XLink currently manages machine to machine solutions for over 68,000 businesses in Africa, facilitating 35 million machine to machine connections per month through the XLink portal. XLink, recognised by Frost & Sullivan in 2014 for its technology best practice in the machine to machine sector, aims to be the market leader in the provision of wireless data machine to machine communication services and solutions throughout Africa and globally.

In August 2014, Cyan signed a non-exclusive partnership agreement with Dinsmore & Associates ("D&A"). D&A are acting as a business development partner to identify opportunities for Cyan's smart metering, smart lighting and machine to machine solutions across the sub-Saharan African market. D&A are meeting with potential partners and resellers independently to present Cyan's technology, as well as assisting in the negotiation of commercial contracts for any opportunities that are taken forward.

In May 2015, Cyan received a letter of intent from El Sewedy Electrometer Group EMG ("El Sewedy") to supply CyLec for a smart meter contract which El Sewedy has been awarded in Ghana, where the underlying utility company in Ghana has over 2.5 million customers. Subject to contract, El Sewedy intends to appoint Cyan to provide a full advanced metering infrastructure solution for up to 200,000 consumers in batches over three years. If deployed in full the contract could be worth up to US$3 million to Cyan. Cyan is working towards signing a contractual order with El Sewedy for the 200,000 meters indicated, however, there is no guarantee of the terms or timing of such an order or if a contract will be signed.

Strengthened Team

We are focused on growing our geographical presence and ability to generate new opportunities. As such, we announced the appointment of Mark Coyle as Vice President, with responsibility for business development and sales in Europe, Africa, Americas and Australasia in December 2014. Before joining Cyan, Mark held the position of Managing Director, UK & Ireland, at US smart metering leader Silver Spring Networks.

In January 2015 we announced the appointment of Vikas Kashyap to the role of Vice President Asia, with responsibility for business development and sales across Asia. Before joining Cyan, Vikas held a leadership position at Secure Meters.

Both Mark and Vikas bring significant industry knowledge and contacts to Cyan and the Board is pleased to have secured the appointment of two individuals with such relevant experience.

Use of Proceeds

The Directors believe that Cyan remains in a strong position to secure substantial revenues from a very large global market and that the Company has an opportunity to establish a leadership position in smart metering, lighting and Internet of Things solutions in emerging markets.

However, the Board believes that further investment is in order, to deliver against customer commitments, to further develop Cyan's solutions and to secure additional orders in Cyan's target markets. The Fundraising will provide the Company with further working capital for this and is necessary to ensure that the Company is able to capitalise on the numerous opportunities available to it.

The net proceeds of the Fundraising will be used in the following areas:

• To fund staffing costs for the delivery of customer projects won in India, as well as to secure new orders and maintain Cyan's leadership position in key markets.

• For the development and delivery of the managed service solutions that are being requested by customers in India.

• To further develop Cyan's metering solutions, including:

• The delivery of incremental solutions specified by customers in India, such as time of use tariffs, prepaid metering, net metering, load curtailment and in home display support.

• Maintain leadership in the smart metering market in India, through a continued move towards industry standards.

• To invest in business development initiatives to capitalise on opportunities in current emerging markets as well as securing pilots/orders in additional markets.

• The integration of Cyan's solution into additional Tier 1 meter manufacturer partners, in order to access larger contracts.

Cyan's management team and Board of Directors remain highly motivated and confident about the opportunities in the pipeline. This confidence is reflected in the significant participation in the Fundraising by the whole Board of Cyan and key members of the management team who, in aggregate, are subscribing for £125,000 of Subscription Shares in the Subscription.

Details of the Fundraising

The Company intends to raise approximately £4.1 million, before expenses, through the issue of 1,997,500,000 Placing Shares at the Placing Price pursuant to the Placing and 62,500,000 Subscription Shares also at the Placing Price pursuant to the Subscription. The Placing Price represents a discount of approximately 23.08 per cent. to the closing mid-market price of 0.26 pence per Ordinary Share as at 5 June 2015, the latest practicable date prior to the announcement of the Fundraising. The Fundraising Shares will, when issued, rank pari passu in all respects with the Ordinary Shares, including the right to receive dividends and other distributions declared following Admission.

The Fundraising Shares will represent approximately 31.52 per cent. of the Enlarged Share Capital. The Fundraising is being made on a non pre-emptive basis as the time delay and costs associated with a pre-emptive offer are considered by the Directors to be excessive for the Company's requirements.

Application will be made by the Company for the Fundraising Shares to be admitted to trading on AIM. Subject to completion of the Placing, it is expected that the Fundraising Shares will be admitted to trading on AIM and that dealings will commence at 8.00 a.m. on 1 July 2015.

The issue of the Placing Shares, is conditional, inter alia, upon:

(a) the approval of the Resolutions at the GM;

(b) the Placing Agreement becoming wholly unconditional (save as to Admission) and not having been terminated in accordance with its terms at any time prior to Admission; and

(c) Admission,

in each case occurring no later than 8.00 a.m. on 1 July 2015 (or such time and date as the Company, Allenby and Beaufort may agree, being not later than 15 July 2015).

Pursuant to the terms of the Placing Agreement, Allenby and Beaufort have each conditionally agreed to use their reasonable endeavours, as agent to the Company, to place the Placing Shares at the Placing Price with certain institutional and other investors. The above obligations are subject to certain conditions including those listed above. The Placing is not being underwritten by Allenby nor Beaufort.

The Placing Agreement contains customary warranties given by the Company with respect to its business and certain matters connected with the Placing. In addition, the Company has given certain indemnities to Allenby and Beaufort in connection with the Placing. Allenby and Beaufort are entitled to terminate the Placing Agreement in specified circumstances including where there has been a material breach of the warranties.

In accordance with the terms of the Placing Agreement, in addition to commissions payable to Beaufort, the Company will issue to Beaufort 20,009,000 warrants to subscribe for new Ordinary Shares during the six months following Admission exercisable at 0.28 pence per new Ordinary Share, being the average closing mid market share price of the Company's Ordinary Shares for the 45 day period prior to this announcement.

Directors' shareholdings

The beneficial and non-beneficial interests of the Directors in Ordinary Shares as at the date of this announcement and following the Fundraising are set out below:

In addition, a total of 315,239,259 options over Ordinary Shares are granted to the Directors, representing approximately 7.04 per cent. of the current issued share capital.

General Meeting and action to be taken

A notice convening the GM to be held at the registered office of the Company, Carisbrooke Court, Buckingway Business Park, Swavesey, Cambridge, CB24 4UQ at 11.00 a.m. on 30 June 2015 is set out in Part 2 of the Circular. The Resolutions to be proposed at that meeting are, inter alia, to empower the Directors to allot equity securities for cash and to do so otherwise than in accordance with the statutory pre-emption provisions, as set out in the Companies Act, in connection with the Fundraising, the Corporate Finance Warrants and otherwise. If approved, the authorities will supersede the authorities granted at the annual general meeting due to be held on 16 June 2015.

The authority proposed to be given to the Directors to allot Ordinary Shares in the capital of the Company requires the prior authorisation of the Shareholders at a GM under section 551 of the Companies Act. Following the passing of Resolution 1, the Directors will have authority to allot: 2,080,009,000 Ordinary Shares in connection with the Fundraising and the Corporate Finance Warrants; and a further 2,178,624,543 Ordinary Shares, being approximately one third of the Enlarged Share Capital. This authority will expire immediately following the annual general meeting of the Company in 2016 or if earlier on the date which is 15 months after the date of the passing of this resolution. Subject to the passing of Resolution 2, the Directors will have the power under section 570 of the Companies Act to allot, for cash, 2,080,009,000 Ordinary Shares in connection with the Fundraising and the Corporate Finance Warrants; and, in addition up to 653,587,363 Ordinary Shares (being approximately 10 per cent. of the Enlarged Share Capital), without being required first to offer such securities to Shareholders in accordance with the statutory pre-emption rights. This authority will expire immediately following the annual general meeting of the Company in 2016 and will replace the authority obtained at the annual general meeting held in June 2015 or if earlier on the date which is 15 months after the date of the passing of this resolution.

While the Directors have no present intention to allot any relevant securities pursuant to the authority proposed to be granted to them pursuant to the Resolutions (save for the allotment of the Fundraising Shares or the issue of the Corporate Finance Warrants), the authorities described above would provide flexibility in the future for raising additional funds or making acquisitions should suitable opportunities arise.

A Form of Proxy for use by Shareholders in connection with the GM will be enclosed with the Circular. Whether or not you propose to attend the GM in person, you are requested to complete the Form of Proxy in accordance with the instructions printed on it and to return it to the Company's Registrars, Share Registrars Limited, 9 Lion & Lamb Yard, Farnham, GU9 7LL as soon as possible and in any event so as to arrive no later than 11.00 a.m. on 26 June 2015. Completion and return of the Form of Proxy will not preclude you from attending the GM and voting in person should you so wish.

Recommendation

The Directors consider the terms of the Fundraising to be in the best interests of the Company and accordingly recommend that you vote in favour of the Resolutions to be proposed at the GM as they intend to do in respect of those Ordinary Shares in respect of which they have an interest, being 210,493,451 Ordinary Shares, representing 4.70 per cent. of the current issued ordinary share capital of the Company as at the date of this announcement.

FUNDRAISING STATISTICS

Total number of Ordinary Shares as at the date of this announcement* 4,475,873,628

Number of Placing Shares being placed on behalf of the Company** 1,997,500,000

Number of Subscription Shares being subscribed for 62,500,000

Number of Fundraising Shares as a percentage of the existing issued share capital** 46.02 per cent.

Number of Fundraising Shares as a percentage of the Enlarged Share Capital** 31.52 per cent.

Number of Corporate Finance Warrants as a percentage of the Enlarged Share Capital

Following exercise*** 0.45 per cent.

Total number of Ordinary Shares in issue following Admission** 6,535,873,628

Placing Price 0.2 pence

Market capitalisation of the Company immediately following the Fundraising

at the Placing Price** £13.1 million

* Including 1,943,397 Ordinary Shares allotted pursuant to the Company's block listing arrangements on 1 June 2015

** Assuming all of the Placing Shares are subscribed for by the Placees

*** Assuming all the Corporate Finance Warrants are exercised

DEFINITIONS

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

"Admission" admission of the Fundraising Shares to trading on AIM becoming effective in accordance with the AIM Rules;

"AIM" the market of that name operated by the London Stock Exchange;

"AIM Rules" together, the AIM Rules for Companies and the AIM Rules for

 Nominated Advisers;

"Allenby" Allenby Capital Limited, 3 St. Helen's Place, London EC3A 6AB, being the Company's nominated adviser for the purposes of the AIM Rules and joint broker to the Placing;

"Beaufort" Beaufort Securities Limited, 131 Finsbury Pavement, London EC2A 1NT, as joint broker to the Placing;

"Board" or "Directors" the directors of Cyan;

"Companies Act" the Companies Act 2006 (as amended);

"Company" or "Cyan" Cyan Holdings plc, a company incorporated and registered in

England and Wales with company number 04554942;

"Corporate Finance Warrants" the 20,009,000 warrants created under the Corporate Finance Warrant Instrument to subscribe for Ordinary Shares during the 6 months following Admission (on the basis of one Corporate Finance Warrant for one Ordinary Share) exercisable at 0.28 pence (being the average closing mid-price of Ordinary Shares for the 45 day period prior to the date of this announcement);

"Corporate Finance Warrant the warrant instrument of the Company to be entered into,

Instrument" conditional upon the passing of the Resolutions, on 30 June

2015 constituting the Corporate Finance Warrants to be granted to Beaufort Securities;

"CREST" the computerised settlement system (as defined in the CREST Regulations) operated by Euroclear UK & Ireland Limited;

"CyLec" Cyan's integrated solution for automated meter reading and advanced metering infrastructure deployments, which is dedicated to electricity metering and is optimised for range, data communications, interoperability and security;

"Enlarged Share Capital" the Company's issued share capital immediately after the completion of the Fundraising;

"FCA" or "Financial Conduct the Financial Conduct Authority;

Authority"

"Form of Proxy" the form of proxy enclosed with the Circular for use by Shareholders in connection with the GM;

"Fundraising" together the Placing and Subscription of a total of 2,060,000,000 new Ordinary Shares at 0.2p per share to raise approximately £4.1 million before expenses;

"Fundraising Shares" together the 1,997,500,000 Placing Shares and the 62,500,000 Subscription Shares;

"GM" or "General Meeting" the general meeting of Cyan to be held at its registered office, Carisbrooke Court, Buckingway Business Park, Swavesey Cambridge, CB24 4UQ at 11.00 a.m. on 30 June 2015, notice of which is set out in Part 2 of the Circular;

"Internet of Things" the network of physical objects of "things" embedded with electronics, software, sensors and connectivity to enable it to achieve greater value and service by exchanging data with the manufacturer, operator and/or other connected devices. Each thing is uniquely identifiable through its embedded computing system but is able to interoperate within the existing Internet infrastructure;

"London Stock Exchange" London Stock Exchange plc;

"Ordinary Shares" the ordinary shares of 0.01 pence each in the capital of the Company;

"Placees" the placees subscribing for Placing Shares pursuant to the Placing;

"Placing Agreement" the conditional placing agreement dated 5 June 2015 between Allenby, Beaufort and the Company, details of which are set out in the letter from the Chairman;

"Placing" the proposed placing by Allenby and Beaufort, as agents for the Company, of the Placing Shares at the Placing Price on the terms of the Placing Agreement;

"Placing Price" 0.2 pence per Placing Share;

"Placing Shares" 1,997,500,000 Ordinary Shares to be allotted on the terms of the Placing Agreement;

"Registrars" Share Registrars Limited, 9 Lion & Lamb Yard, Farnham, GU9 7LL;

"Resolutions" the resolutions to be proposed at the GM, as set out in the notice of

GM contained in Part 2 of the Circular;

"Shareholders" holders of Ordinary Shares at the date of the Circular;

"Share Option Scheme" the Cyan Holdings plc Enterprise Management Incentive Scheme;

"Subscription" the conditional subscription by the Directors and members of the Company's management team for the Subscription Shares at the Placing Price;

"Subscription Shares" the 62,500,000 new Ordinary Shares to be issued to subscribers pursuant to the Subscription; and

"UK" or "the United Kingdom" the United Kingdom of Great Britain and Northern Ireland.

Enquiries: