Cyanconnode Regulatory News (CYAN)

11 June 2015

Cyan Holdings plc

("Cyan" or "the Company")

Proposed Placing &

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, is pleased to announce that further to the announcement on 8 June 2015, the Company has conditionally raised £490,000 (before expenses) by way of a Placing of 245,000,000 new Ordinary Shares at a price of 0.2 pence per share. The Placing is in addition to the conditional placing and subscription to raise approximately £4.1 million (before expenses) through the issue of 2,060,000,000 Ordinary Shares at 0.2 pence each, as announced on 8 June 2015.

Like the 8 June Fundraising, the Fundraising is conditional, inter alia, on the passing of resolutions at a General Meeting ("GM") to be held at 11.30 a.m. on 30 June 2015 at the Company's registered office, Carisbrooke Court, Buckingway Business Park, Swavesey, Cambridge, CB24 4UQ. The Placing is also conditional upon Admission.

A circular containing the notice of the GM (the "Circular") will be posted to all shareholders of the Company on or around 12 June 2015 and will be available to view on the Company's website at: www.cyantechnology.com. Investors should note that as with the earlier meeting to be held at 11.00 a.m. on 30 June 2015, 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 Placing Shares to be admitted to trading on AIM. Subject to completion of the Placing, it is expected that the Placing Shares will be admitted to trading on AIM and that dealings will commence at 8.00 a.m. on 1 July 2015. Following Admission, the Company will have 6,780,873,628 Ordinary Shares in issue, assuming all of the Placing Shares and all of the new Ordinary Shares to be issued in respect of the 8 June Fundraising are subscribed for.

Commenting on the Placing, John Cronin, Executive Chairman said "We are pleased to announce this further Placing. The Placees wish to take advantage of the HMRC Enterprise Investment Scheme which can provide significant income and capital gains tax advantages for investments which are held for a minimum period of three years. This new investment, together with the institutional investment which was part of the 8 June Fundraising, demonstrates the alignment of interest with the Board and management team's goal to create significant shareholder value over the medium term."

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 Placing

At the time when investor commitments were being received in connection with the 8 June Fundraising, Cyan received interest from certain investors to invest in the 8 June Fundraising so long as their new Ordinary Shares would be eligible for EIS tax relief and the Company had received recent assurance from HMRC of that eligibility. At the time of closing the 8 June Fundraising, the Company had not received that assurance from HMRC, and could not anticipate when such assurance would be received. As such, those investors were unable to partake in the 8 June Fundraising. Cyan has now received the requisite EIS assurance from HMRC and the Board has resolved to secure additional funding from those investors seeking EIS tax relief via the Placing. It is intended that the net proceeds from the Placing will be used for the same purposes as described in the Company's circular to Shareholders dated 5 June 2015 and issued on 10 June 2015.

Details of the Placing

The Company intends to raise £490,000, before expenses, through the issue of 245,000,000 new Ordinary Shares at the Placing Price pursuant to the Placing. The Placing Price is identical to the placing price of the 8 June Fundraising. The Placing 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 Placing 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 Placing Shares to be admitted to trading on AIM. Subject to completion of the Placing, it is expected that the Placing 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 completion of the 8 June Fundraising;

(c) 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

(d) 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, Beaufort has conditionally agreed to use its reasonable endeavours, as agent to the Company, to place the Placing Shares at the Placing Price with certain investors. The above obligations are subject to certain conditions including those listed above. The Placing is not being underwritten by 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 4,165,000 warrants to subscribe for new Ordinary Shares during the six months following Admission exercisable at 0.27 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 the announcement of the Placing.

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 11.30 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:

(a) authorise 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 Placing and the Corporate Finance Warrants (the "Placing Authorities"); and

(b) seek general authorities to authorise the Directors to allot ordinary shares under section 551 of the Companies Act and in disapplication of the statutory pre-emption rights under section 570 of the Companies Act (the "General Authorities").

If approved, the Placing Authorities will be in addition to the authorities granted at the general meeting due to be held on 30 June 2015 at 11.00 a.m. If approved, the General Authorities will supersede the equivalent general authorities granted at the general meeting due to be held on 30 June 2015 at 11.00 a.m.

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: 249,165,000 Ordinary Shares in connection with the Placing and the Corporate Finance Warrants; and a further 2,260,291,209 Ordinary Shares, being approximately one third of the Enlarged Share Capital. The total of these authorities 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, 249,165,000 Ordinary Shares in connection with the Placing and the Corporate Finance Warrants; and, in addition up to 678,087,363 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 or if earlier on the date which is 15 months after the date of the passing of this resolution. The specific authorities sought in relation to the Placing Shares and Corporate Finance Warrants will be in addition to the authorities obtained at the general meeting due to be held on 30 June 2015. At 11.00 a.m. The General Authorities will replace the equivalent authorities obtained at the general meeting held on 30 June 2015 at 11.00 a.m.

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 Placing 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 is 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 11.30 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 Placing 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.

PLACING STATISTICS

Total number of Ordinary Shares as at the date of this announcement 1 4,475,873,628

Number of shares being placed or subscribed for under the 8 June Fundraising 2 2,060,000,000

Number of Placing Shares being placed on behalf of the Company 3 245,000,000

Number of Placing Shares as a percentage of the existing issued share capital 3 5.47 per cent.

Number of Placing Shares as a percentage of the Enlarged Share Capital 2 3 3.61 per cent.

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

following exercise 2 3 4 0.06 per cent.

Total number of Ordinary Shares in issue following Admission 2 3 6,780,873,628

Placing Price 0.2 pence

Market capitalisation of the Company immediately following the Placing

at the Placing Price 2 3 £13.6 million

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

2 Assuming all of the new Ordinary Shares to be issued in respect of the 8 June Fundraising are subscribed for by investors

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

4 Using all 4,165,000 Corporate Finance Warrants for the basis of calculation

DEFINITIONS

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

"8 June Fundraising" the Fundraising announced to shareholders on 8 June 2015;

"Admission" admission of the Placing 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 Company;

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

"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 4,165,000 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 0.27 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;

"Enlarged Share Capital" the Company's issued share capital immediately after the

completion of the 8 June Fundraising and the Placing;

"EIS" Enterprise Investment Scheme under the provisions of Part 5 of the UK Income Tax Act 2007 (as amended);

"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;

"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 11.30 a.m. on 30 June 2015, notice of which is set out in Part 2 of the Circular;

"HMRC" Her Majesty's Revenue & Customs;

"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 10 June 2015 between Allenby, Beaufort and the Company, details of which are set out in the letter from the Chairman with the Circular;

"Placing" the proposed placing by Beaufort, as agent 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" 245,000,000 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;

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