Digitalbox Regulatory News (DBOX)

THIS ANNOUNCEMENT (AND THE INFORMATION CONTAINED HEREIN) IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, WITHIN, IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, JAPAN, NEW ZEALAND AND SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

This announcement does not constitute an offer of, or a solicitation to subscribe for or purchase, any securities in any jurisdiction including in the United States.

Securities may not be offered or sold in the United States absent registration under the United States Securities Act of 1933, as amended (the "Securities Act"), or an exemption from, or in a transaction not subject to, registration. The Company has not and does not intend to register any securities under the Securities Act, and does not intend to offer any securities to the public in the United States unless registered under the Securities Act or an exemption from such registration is available. No public offering of securities of the Company is being made in the United States.

No communication or information relating to the issue and offering of securities may be disseminated to the public in jurisdictions other than the UK where prior registration or approval is required for that purpose. No action has been taken that would permit an offer of securities in any jurisdiction where action for that purpose is required, other than in the UK.

8 February 2019

 POLEMOS PLC

("Polemos" or the "Company")

Acquisition of Digitalbox Publishing (Holdings) Limited

Acquisition of Mashed Productions Limited

Approval of waiver of obligations under Rule 9 of the Takeover Code

Share Reorganisation

Placing and subscription of up to 7,285,715 New Ordinary Shares at £0.14 per share

Admission to trading on AIM

Change of Name

and

Notice of General Meeting

Polemos plc (AIM: PLMO), is pleased to announce that it has conditionally agreed to acquire the entire issued share capital of Digitalbox Publishing (Holdings) Limited and the entire issued share capital of Mashed Productions Limited.

Highlights

· Acquisition of Digitalbox Publishing (Holdings) Limited ("DBPH"), the parent company of a digital media business Digitalbox Publishing Limited ("DBP"), for a total consideration of approximately £10 million, to be satisfied by the issue of 72,720,346 New Ordinary Shares.

· For the year ended 31 December 2017, DBP generated revenues of £2.3 million and profit before tax of £508,000.

· Acquisition of Mashed Productions ("MP"), a digital media business which owns the online satirical news website "The Daily Mash", for a maximum total consideration of £1.2 million, to be satisfied on completion by the issue of 1,428,571 New Ordinary Shares and payment of up to £1 million in cash.

· For the year ended 31 March 2018, MP generated revenues of £396,000 and a profit before tax of £135,000.

· A conditional placing and subscription to raise £1.02 million (before expenses) by the issue of 7,285,715 New Ordinary Shares at a price of 14 pence per New Ordinary Share (being the closing mid-market price on 7 September 2018, being the date trading in the Company's Existing Ordinary Shares was suspended (as adjusted for the Share Reorganisation).

· To reflect the new direction of the Company, the Board is proposing to change the name of the Company to "Digitalbox plc".

· Subject to, inter alia, shareholder approval and admission to trading on AIM, the Acquisition of DBPH, the placing and subscription are expected to complete on 28 February 2019 and the MP Acquisition is expected to complete on 5 March 2019.

The acquisition of DBPH will constitute a reverse takeover pursuant to Rule 14 of the AIM Rules for Companies and as such will require the approval of Shareholders. An admission document is being posted today to shareholders (the "Admission Document") which sets out in more detail the background and reasons for the acquisitions, the placing and subscription, and certain other proposals and also includes a notice of General Meeting. A General Meeting of the Company is being convened for 10:00 a.m. on 27 February 2019 at the offices of WH Ireland, 24 Martin Lane, London, EC4R 0DR. The Admission Document will be posted today to Shareholders. The Admission Document will be available on the Company's website: www.polemos.co.uk.

The Chairman, Nigel Burton, said: "I am pleased to be able to announce the acquisitions which, subject to Shareholder approval, will result in the successful conclusion of the process announced in September, and will enable Shareholders to benefit from the exciting potential of the Digitalbox platform and management team"

James Carter, CEO of Digitalbox, said: "Our proposed admission to AIM will allow us to realise our ambition to create a market-leading, mobile-first digital media business through a buy and build strategy. Through our success with Entertainment Daily, we have a platform through which we can drive traffic and advertising revenue. The platform is scalable and we intend to add new titles to it. We are excited to announce that our first planned acquisition will be the UK's leading satirical news site, The Daily Mash. With ten years of consistent audience growth under its belt and the Mash Report successfully airing on BBC2, it is a brand with huge potential. We are very much looking forward to working with the team to help them grow. The acquisition of the Daily Mash also demonstrates the high-quality digital publications we are targeting. We believe there is a strong pipeline of other similar opportunities in the digital publishing space which Digitalbox can acquire. The combination of our technology platform and experienced management team means we can create a compelling opportunity for investors as we grow"

Neil Rafferty, co-founder and editor-in-chief of the Daily Mash, said: "This is a great opportunity for the Mash to build on what we have created so far. My co-founder, Paul Stokes, did an incredible job building a profitable business from the ground up. Being part of Digitalbox and accessing their commercial and technical expertise, means we can keep building, while our fantastic team of writers continue to produce great content every day."

This announcement includes inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

1. Introduction

The Company is pleased to announce that it has conditionally agreed to acquire the entire issued share capital of DBPH, the parent company of a digital media business DBP, for a total consideration of approximately £10 million, to be satisfied on First Admission by the issue of the DB Consideration Shares to the DB Sellers. In addition, the Company announces that it had also conditionally agreed to acquire the entire issued share capital of MP, a digital media business which owns the online satirical news website "The Daily Mash", for a maximum total consideration of £1.2 million, to be satisfied on Second Admission by the issue of the MP Consideration Shares and payment of up to £1 million in cash.

The Company also announces that it has undertaken a conditional placing and subscription to certain institutional and other investors, pursuant to which it proposes to raise, £1.02 million (before expenses) by issue of 7,285,715 New Ordinary Shares at a price of 14 pence per New Ordinary Share (being the closing mid-market price on 7 September 2018 being the date trading in the Company's Existing Ordinary Shares was suspended (as adjusted for the Share Reorganisation). The Placing and the MCV Subscription are conditional (amongst other things) upon the passing of certain resolutions in order to ensure that the Directors have the necessary authorities and powers to allot the New Ordinary Shares. As a result, a number of proposals are to be put to Shareholders at the General Meeting.

The DB Acquisition constitutes a reverse takeover pursuant to Rule 14 of the AIM Rules and as such will require the approval of Shareholders which will be sought at the General Meeting. The Acquisitions are conditional, inter alia, on the passing of the Resolutions to authorise the Directors to issue the Consideration Shares, Placing Shares and the MCV Subscription Shares. In addition, because the issue prices are below the nominal value of the Existing Ordinary Shares their respective issues are conditional on the Share Reorganisation being approved by Shareholders.

Implementation of the Proposals will result in certain of the DBPH Shareholders being presumed to be acting in concert for the purposes of the Takeover Code. The Concert Party will hold 30,275,244 New Ordinary Shares, representing approximately 34.08 per cent. of the Enlarged Ordinary Share Capital. In addition, if all the DBPH Warrants and Adviser Warrants held by, or be issued to, members of the Concert Party were exercised (and no other DBPH Warrants, Adviser Warrants or Options were exercised), the Concert Party would hold a total of 33,569,967 New Ordinary Shares, representing 36.44 per cent. of the Company's then issued New Ordinary Share capital. Under Rule 9 of the Takeover Code, the Concert Party would normally be obliged to make an offer to all Shareholders (other than the Concert Party) to acquire their New Ordinary Shares for cash at the Placing Price. The Panel has agreed to waive this obligation, subject to the approval of the Independent Shareholders on a poll of the Whitewash Resolution at the General Meeting.

The Directors believe that it is appropriate, should the Acquisitions be approved by Shareholders at the General Meeting and be completed, that the name of the Company be changed to Digitalbox plc to reflect the business of the Enlarged Group.

The Proposals are conditional, among other things, on the passing of the Resolutions and Admission. If the Resolutions are approved by Shareholders, it is expected that First Admission will become effective and dealings will commence on AIM on or around 28 February 2019 and that Second Admission will become effective and dealings will commence on AIM on or around 5 March 2019. The General Meeting of the Company at which the Resolutions will be proposed has been convened for 10.00 a.m. on 27 February 2019 at the offices of WH Ireland, 24 Martin Lane, London, EC4R 0DR.

2. Background on the Company and reasons for the Acquisitions

Polemos became a "Rule 15 cash shell" under Rule 15 of the AIM Rules for Companies with effect from 8 March 2018. Under Rule 15 of the AIM Rules for Companies, Polemos became obliged to make an acquisition or acquisitions which constitute(s) a reverse takeover under AIM Rule 14 on or before the date falling six months from 8 March 2018, or be re-admitted to trading on AIM as an investing company under the AIM Rules (which requires the raising of at least £6 million) failing which, the Company's Ordinary Shares would then be suspended from trading on AIM pursuant to AIM Rule 40.

On 10 September 2018 the Company announced that it had agreed conditional heads of terms to acquire the entire issued share capital of DBPH, subject to certain conditions and due diligence. The proposed acquisition would constitute a reverse takeover pursuant to AIM Rule 14, and the Ordinary Shares were suspended pending the publication of the required AIM admission document and Shareholder's approval of the DB Acquisition.

On 9 November 2018 the Company announced that it had raised £220,000 by way of a convertible loan note issue in order to help finance the transaction with DBPH. These Convertible Loan Notes will be converted into the 2,095,238 New Ordinary Shares, being the Convertible Loan Note Shares, following the General Meeting and conditional on Admission. The conversion price is 10.5 pence per share, being a 25 per cent. discount to the Placing Price.

The Existing Directors believe Digitalbox is a dynamic business operating successfully in a growing market that offers significant opportunities for acquisitive growth and therefore that the DB Acquisition presents the Company and its Shareholders with an exciting investment opportunity. The Existing Directors believe this exciting opportunity is illustrated by the MP Acquisition which provides strong credence to the strategy to be adopted by Digitalbox and the Enlarged Group following Admission. Mashed Productions is an example of a niche content digital media business that is profitable but is a small owner-operated business that would benefit from inclusion in a larger media business. The Directors believe it is an ideal acquisition and one to which Digitalbox can add further value.

Accordingly, the Existing Directors propose that subject to approval of the Resolutions by the Shareholders at the General Meeting, the Company should acquire the entire issued share capitals of DBPH and MP respectively. The Enlarged Group's business would therefore constitute exclusively that of Digitalbox Publishing and Mashed Productions, which is the provision of content for digital advertising.

3. Summary information on Digitalbox and Entertainment Daily

Digitalbox is a digital media business based in the UK. Through its brand Entertainment Daily, it produces and publishes online UK entertainment news covering TV shows, showbiz and celebrity news. It generates revenue from the sale of advertising slots in and around the content it publishes.

DBPH is a holding company. Its only subsidiary is DBP which also has one subsidiary, Digitalbox Publishing Inc., which is incorporated in the US. In April 2018, the Digitalbox Directors made the decision to suspend trading in the US due to the level of investment that DBP Inc. was going to require to bring it to an effective operating position. As a result, all the trading activity of Digitalbox is currently conducted through DBP.

The table below sets out DBP's summary audited financial information for the periods indicated, prepared in accordance with IFRS.

 Summary historical financial information of DBP

(1) Is stated after recognition of an exceptional credit of £229,000

(2) Is stated before recognition of an exceptional credit of £229,000

Information on Entertainment Daily

Entertainment Daily (also known as ED) is a digital media platform that focuses its content on TV, showbiz and celebrity news. Its audience is a broad demographic of 25 to 54 year old women who wish to be well informed within this content area. Visitors to the website are served a variety of adverting and (most recently) e-commerce formats which form the core income stream.

Editorial output, typically 25 to 30 articles per day (depending on news-flow), is fast-paced, snackable news which encourages readers to make multiple visits each month to the website. For the year ended 31 December 2018 readers averaged over six visits per month. The content is created by a core editorial team based in Digitalbox's head office in Bath with freelance resource in London, Bristol and Manchester.

Traffic is sourced through a variety of sources including Google and Facebook, via users either searching for related information through the search engine or by ED pushing news stories to its audience via social media feeds. With Google or Facebook as a source, users click on the relevant piece of content which then takes them to ED's website.

ED is able to scale without significant impact on staff resources and for the year ended 31 December 2018 averaged over 13 million monthly sessions and generated an average revenue of £77 per one thousand users from an average of two million monthly unique users. As at 31 December 2018 ED had 2.5 million followers on Facebook.

4. Information on Mashed Productions

Mashed Productions is a digital media business incorporated in Scotland and based in the UK. Through its brand Daily Mash, it produces and publishes online satire spoof news articles in its own distinctive parody style. It generates revenue from the sale of advertising slots in and around the content it publishes.

Mashed Productions, and subsequently the Daily Mash site, was established in 2007 by journalists Neil Rafferty and Paul Stokes who have subsequently built up a large and loyal audience of predominantly educated and affluent 25 to 44 year olds. The audience is split 54:46 between male and female with approximately 79 per cent. of visitors to the site originating within the UK.

The Daily Mash stories are short and punchy and are produced in a series of formats that mimic standard internet news formats such as a news story, a first person piece, a softer feature and a quiz.

All stories are published under the Daily Mash brand, with no writers being individually named. The articles are written in the specific style of Daily Mash which has not changed since 2007. Neil Rafferty is editor-inchief and the site has three other editors. They all write stories and other content is commissioned from a pool of freelancers.

Daily Mash's audience is loyal and traffic is generated through a variety of sources including Facebook where Daily Mash has about 850,000 followers, an email mailing list of 29,000 people, Twitter, Google, and a large number of direct visits to the site. In October 2018, direct visitors made up 24 per cent. of visits, with social media traffic accounting for 63 per cent. In the four months to the end of October Daily Mash generated an average of 3.7 million sessions a month, 1.8 million unique visitors a month and 6.7 million page views. All traffic and social media followings have been generated organically with no paid-for followers or content.

Since 2007, the site has built up an archive of more than 15,000 stories. All Daily Mash stories are originally written and unique. Daily Mash owns the intellectual rights to the articles which allows them to exploit the stories in other formats such as video or TV. Site content is inspired by the daily news agenda but in recent years Daily Mash has increasingly turned its attention to satirising social tribes and trends to produce highly viral content of a more timeless nature that has a much broader and longer appeal than daily news.

In the last year the Daily Mash has successfully transferred to television as the co-developer of BBC Two's weekly satirical show The Mash Report. Video clips from the first series of the Mash Report which aired in July 2017 and Jan-Feb 2018 received more than 200 million views on the internet, making the Mash Report BBC Two's most successful ever social media campaign.

DM has a number of rivals such as The Rochdale Herald, Newsthump, and Southend News Network. However, no competitor has managed to build a significant audience to rival DM. The site benefits from considerable first-mover advantage, its large Facebook following, email list, and brand loyalty. Its strong editorial team and format approach mean it is capable of consistently generating high-quality, original humour content which is extremely hard to replicate.

The table below sets out MP's summary audited financial information for the periods indicated, prepared in accordance with IFRS.

Summary historical financial information of MP

5. Principal terms of the Acquisitions 

On 7 February 2019, the Company entered into the DB Acquisition Agreement with the DBPH Sellers pursuant to which the Company has conditionally agreed to acquire the entire issued share capital of DBPH. The entry into the DB Acquisition Agreement entitled the DBPH Sellers to issue the Drag Along Notice to the DBPH Dragged Sellers requiring them to sell their shares in DBPH to the Company on the same financial terms as the DBPH Sellers.

The total consideration for the DB Acquisition is approximately £10 million payable, in aggregate, to the DB Sellers, which will be satisfied on First Admission by the issue, in aggregate, of 72,720,346 New Ordinary Shares at a price of 13.75 pence per New Ordinary Share, in each case to the DB Sellers pro rata to their shareholding in DBPH.

On 7 February 2019, the Company entered into the MP Acquisition Agreement with the MP Sellers pursuant to which the Company has conditionally agreed to acquire the entire issued share capital of MP.

The total maximum consideration for the MP Acquisition is £1.2 million payable on Second Admission as to a maximum of £1 million in cash and £200,000 by the issue of 1,428,571 New Ordinary Shares at a price of 14 pence per share. The sellers of MP comprise Paul Stokes and Neil Rafferty. Paul Stokes will receive his share of the consideration being up to £600,000 in cash. Neil Rafferty will receive up to £400,000 in cash and £200,000 through the issue of 1,428,571 New Ordinary Shares. £100,000.00 of the cash payment payable to the MP Sellers shall be paid over a 24 month period following Second Admission in equal monthly instalments.

Completion of the Acquisitions are conditional, inter alia, on the approval of the Resolutions at the General Meeting, First and Second Admission occurring and no material adverse change having occurred in respect of DBPH or Digitalbox and Mashed Productions prior to Completion.

Pursuant to the Acquisition Agreements, certain of the DB Sellers and Neil Rafferty have also agreed to enter into restrictions on their ability to sell the Consideration Shares either in the form of Lock-in Deeds, in the case of the DBPH Sellers, or in the MP Acquisition Agreement, in the case of Neil Rafferty.

On 7 February 2019, DBPH entered into the DBP Acquisition Agreement with James Carter and James Douglas pursuant to which the Company has conditionally agreed to acquire the ordinary shares in DBP held by James Carter and James Douglas in exchange for DBPH issuing, in aggregate, 82,064 ordinary shares in DBPH credited as fully paid. The DBP Acquisition Agreement will complete immediately prior to the DB Acquisition and result in DBPH owning, prior to completion of the DB Acquisition Agreement, 100 per cent. of the issued share capital of DBP.

6. Change of Name

To reflect the new direction of the Company, the Board is proposing to change the name of the Company. Under the Companies Act 2006, a change of name requires the passing of a special resolution of Shareholders at a general meeting. Therefore a special resolution will be put to the General Meeting to approve the change of the Company's name to:

"Digitalbox plc"

The change of name will become effective once the Registrar of Companies has issued a new certificate of incorporation on the change of name. This is expected to occur on or around 27 February 2019, being the day following the General Meeting. The tradeable instrument display mnemonic ("TIDM") of the Company is expected to change to AIM: DBOX effective from 7.00 a.m. on 28 February 2019.

7. Share Reorganisation

Under the Companies Act a company is unable to issue shares at a subscription price which is less than their nominal value. The par value of each Existing Ordinary Share is more than the issue prices of the Placing Shares, the MCV Subscription Shares, the Convertible Loan Note Shares and the Consideration Shares, were the Share Reorganisation not to occur. Therefore in order to proceed with, inter alia, the Acquisitions and the Placing, the Company is proposing to undertake the Consolidation and Subdivision so that the par value of the Existing Ordinary Shares is reduced to below the Placing Price.

At close of business on 10 September 2018, the date on which trading in the Company's Ordinary Shares was suspended, the Company had 465 Shareholders of which 372 had shareholdings of less than 2,500 shares. These 372 Shareholders account for 80 per cent. of the Shareholders by number, but represent only 0.08 per cent. of the total number of Existing Ordinary Shares.

At the closing bid price of 0.7 pence on 10 September 2018, the date on which trading in the Company's Ordinary Shares was suspended, the market value of 2,500 shares was £17.50. The Existing Directors consider that should a Shareholder with 2,500 shares or less choose to sell their shares, the proceeds may be significantly reduced by the dealing costs of selling. Therefore the Existing Directors recognise that for small Shareholders it may be uneconomic for them to dispose of their shares. The Capital Reorganisation will allow small Shareholders to realise value for their shares free of dealing costs.

Under the Capital Reorganisation, 907 new Ordinary Shares will be issued at nominal value to ensure that as part of the Capital Reorganisation an exact whole number of Consolidated Ordinary Shares will be issued. Then, the Ordinary Shares in issue at the Record Date will be consolidated into Consolidated Ordinary Shares on the basis of one Consolidated Ordinary Share for each 2,500 Ordinary Shares. Each Consolidated Ordinary Share will then be sub-divided into 125 New Ordinary Shares and 2,375 New Deferred Shares.

Most Shareholders will not hold at the Record Date a number of Existing Ordinary Shares that is exactly divisible by the consolidation ratio. The result of the Consolidation, if approved, will be that such Shareholders will be left with a fractional entitlement to a resulting New Ordinary Share. Any such fractions as a result of the Consolidation will be aggregated and, following the Sub-division, the Directors will in accordance with the Articles sell the aggregated shares in the market for the benefit of the relevant Shareholders.

The proceeds from the sale of the fractional entitlements shall be distributed pro rata amongst the relevant Shareholders save that where a Shareholder is entitled to an amount which is less than £3 it will (in accordance with the New Articles) not be distributed to such Shareholder but will be donated to charity by the Company.

The rights attaching to the New Ordinary Shares will be identical in all respects to those of the Existing Ordinary Shares.

In order to effect the Share Reorganisation, the Company proposes to adopt the New Articles with effect from First Admission. The New Deferred Shares created as a result of the Sub-division will have the same rights as the Existing Deferred Shares. These rights are minimal, thereby rendering the Deferred Shares, effectively valueless. The rights attaching to the Deferred Shares can be summarised as follows:

· they will not entitle holders to receive any dividend or other distribution or to receive notice or speak or vote at general meetings of the Company;

· they will have no rights to participate in a return of assets on a winding up;

· they will not be freely transferable;

· the creation and issue of further shares will rank equally or in priority to the Deferred Shares;

· the passing of a resolution of the Company to cancel the Deferred Shares or to effect a reduction of capital shall not constitute a modification or abrogation of their rights; and

· the Company shall have the right at any time to purchase all of the Deferred Shares in issue for an aggregate consideration of £0.01.

There are no immediate plans to purchase or to cancel the Deferred Shares, although the Directors propose to keep the situation under review.

A copy of the New Articles proposed to be adopted at the General Meeting will be available for inspection at the General Meeting and will be made available free of charge on the Company's website at www.polemos.com and following First Admission on www.digitalbox.com.

Existing share certificates will cease to be valid following the Share Reorganisation. New share certificates in respect of the New Ordinary Shares will be issued by first class post at the risk of the Shareholder within 10 Business Days of each Admission. No certificates will be issued in respect of the New Deferred Shares, nor will CREST accounts of Shareholders be credited in respect of any entitlement to the New Deferred Shares. No application will be made for the Deferred Shares to be admitted to trading on AIM or any other investment exchange.

A CREST Shareholder will have their CREST account credited with their New Ordinary Shares following their Admission, which is expected to be on 28 February 2019 and on 5 March 2019 in respect of First Admission and Second Admission respectively.

8. Existing Directors, Proposed Directors and corporate governance

The Existing Directors comprise Nigel Burton and John Treacy. John Treacy will stand down from the Board and also as company secretary with effect from, and subject to, First Admission. The Proposed Directors will be appointed to the Board effective from and conditional on First Admission.

On First Admission the Board will comprise:

Robin Miller (Non-executive Chairman)

James Carter (Chief Executive Officer)

Jim Douglas (Chief Operating Officer)

David Joseph (Chief Financial Officer)

Nigel Burton (Non-executive Director)

Martin Higginson (Non-executive Director)

David Joseph will be appointed as company secretary effective from and conditional on First Admission.

9. Details of the Placing and the MCV Subscription

Subject to First Admission, Leander has, as agent for the Company, conditionally placed 5,642,858 Placing Shares at the Placing Price with institutional and other investors in accordance with the terms of the Placing Agreement.

Subject to First Admission, M Capital Ventures has agreed to subscribe for 1,642,857 MCV Subscription Shares at the Placing Price.

Together, the Placing and MCV Subscription are expected to raise £1.02 million (before expenses). After the expenses of the Proposals, estimated to be £0.75 million (excluding VAT) in total, of which approximately £0.12 million will be settled by the issue of the Adviser Shares, the Company is expected to received approximately £0.39 million from the Placing and MCV Subscription. Leander and WH Ireland have agreed that part of the fees and commissions payable under the Placing Agreement will be satisfied via the issue by the Company of the Adviser Shares, treated as fully paid, on First Admission.

The Placing Shares and the MCV Subscription Shares to be issued pursuant to the Placing and the MCV Subscription will to represent approximately 8.1 per cent. of the Enlarged Ordinary Share Capital. The Placing Shares and the MCV Subscription shares will, following First Admission, rank in full for all dividends and pari passu in all other respects with the New Ordinary Shares and will have the right to receive all dividends and distributions declared, made or paid in respect of the Enlarged Ordinary Share Capital after First Admission.

The Existing Ordinary Shares and the New Ordinary Shares have not been, and will not be registered under the US Securities Act or with any regulatory authority of any state or other jurisdiction of the US and may not be offered or sold within the US.

10. Use of the proceeds of the Placing and MCV Subscription

The proceeds of the Placing and MCV Subscription are expected, in aggregate, to be approximately £1.02 million and are intended to be used to meet the cash consideration of the MP acquisition and to part fund the expenses of the Proposals.

11. Future strategy of the Enlarged Group

Conditional on First Admission, John Treacy will resign as an Existing Director and company secretary. Nigel Burton will continue as a Non-Executive Director of the Company. Also conditional on First Admission, the registered office will be moved to Digitalbox's offices in Bath.

The Directors believe that the DB Acquisition, MP Acquisition and Admission will provide the Enlarged Group with considerable growth opportunities and that it initiates the broader growth strategy of the Company. Digitalbox has proven its model and built a profitable UK business around Entertainment Daily. It is now seeking to expand through the acquisition of targets, of which the MP Acquisition is the first example, to which it can apply its model. The Proposed Directors believe the timing is right for this given the rising tide of mobile use and the state of flux of the media market itself. The Directors look forward to focusing on delivery of the Enlarged Group's strategy of building a UK-based group providing a profitable, mobile-first digital media business of scale.

12. Lock-in and orderly market arrangements

(a) Lock-in Persons

The Company, WH Ireland, Leander and the Locked-in Persons who together will hold 46.0 per cent. of the Enlarged Ordinary Share Capital have entered into the Lock-in Deed, pursuant to which the Locked-in Persons have agreed that subject to certain customary exceptions, (i) for a period of 12 months from the date of First Admission, neither they nor their connected persons shall transfer or dispose of the Consideration Shares or shares which they hold upon exercise of any options or warrants over New Ordinary Shares granted to them; and (ii) for a further period of 12 months, the Locked-in Persons shall only be able transfer or dispose of New Ordinary Shares in which they have a beneficial interest through the Company's broker in order to maintain an orderly market in the New Ordinary Shares.

 (b) Directors

Pursuant to the Placing Agreement:

· each of the Directors has agreed that, subject to certain exceptions, during the period from the date of the Placing Agreement until the date falling 365 days after First Admission, he will not, subject to limited exceptions, without the prior consent of WH Ireland and Leander, dispose of any New Ordinary Shares held by him at the time of First Admission; and

· each of the Directors has also agreed that, for a period of 365 days from the date of expiry of the lock-in arrangements described above, to comply with certain requirements designed to maintain an orderly market in the New Ordinary Shares.

The Placing Agreement also provides that WH Ireland and Leander may require the Directors who are also DBPH Sellers (being James Carter, Jim Douglas and Martin Higginson (via the shares held by Samuel Higginson)) to dispose of their DB Consideration Shares in order to satisfy certain claims under the Placing Agreement.

(c) Neil Rafferty

Pursuant to the MP Acquisition Agreement Neil Rafferty has agreed that, subject to certain exceptions, during the period of 12 months from the date of completion of the MP Acquisition Agreement that he will not, subject to certain limitations, dispose of any MP Consideration Shares. He has further agreed that for a period of 12 months after the first anniversary of the date of completion of the MP Acquisition Agreement that the MP Consideration Shares will be subject to an orderly market arrangement.

The Locked-in Persons, Neil Rafferty and the Directors will together hold 73.2 per cent. of the Enlarged Ordinary Share Capital and such New Ordinary Shares will be subject to the lock-in and orderly market arrangements set out in the above-mentioned Lock-in Deeds, Placing Agreement and MP Acquisition Agreement.

13. Admission, settlement, CREST and dealings

Application will be made to the London Stock Exchange for the number of New Ordinary Shares in issue following First Admission to be admitted to trading on AIM, conditional on (amongst other things) Shareholders' approval at the General Meeting. It is expected that First Admission will become effective and that dealings will commence at 8.00 a.m. on 28 February 2019.

Application will be made to the London Stock Exchange for the MP Consideration Shares to be admitted to trading on AIM, conditional on (amongst other things) Shareholders' approval at the General Meeting. It is expected that Second Admission will become effective and that dealings will commence at 8.00 a.m. on 5 March 2019.

Following each Admission, share certificates representing the New Ordinary Shares are expected to be despatched by first class post at the risk of the Shareholder to subscribers who wish to receive New Ordinary Shares in certificated form by no later than 10 Business Days following each Admission.

In respect of Shareholders who wish to receive New Ordinary Shares in uncertificated form, New Ordinary Shares will be credited to their CREST stock accounts at 8.00 a.m. on 28 February 2019 in respect of First Admission and 5 March 2019 in respect of Second Admission. The Company reserves the right to issue any New Ordinary Shares in certificated form should it consider this to be necessary or desirable.

14. Share Options

At the date of this announcement, the Company has no share options which are likely to be exercised. It has share options outstanding over 160,000 Existing Ordinary Shares exercisable at a price of 20 pence per Ordinary Share, equivalent, following completion of the Share Reorganisation, to 8,000 New Ordinary Shares at an exercise price of 400 pence per New Ordinary Share.

The Directors believe that the success of the Company will depend to a high degree on the future performance of key employees in executing the Company's growth strategy. The Company has therefore established, with effect from First Admission, the Share Option Scheme as an important means of retaining, attracting and motivating key employees and contractors, and also for aligning the interests of the management team with those of Shareholders.

The Company shall have a pool of shares available for employee and management share options equivalent to 10 per cent. of the entire issued share capital of the Company. James Carter and Jim Douglas are each to be granted Management Options to acquire New Ordinary Shares equivalent to 16.667 per cent. of the number of New Ordinary Shares in the option pool. This will equate to James Carter and James Douglas each holding Management Options over 1,504,226 New Ordinary Shares.

The Management Options are exercisable after the third anniversary of First Admission or in the event of an earlier exercise event subject to certain performance conditions. In addition, subject to First Admission, the Board proposes to issue further Options to certain employees to acquire New Ordinary Shares equivalent to 33.333 per cent. of the number of New Ordinary Shares in the option pool. These Options will be exercisable at the Placing Price after the third anniversary of First Admission or on the occurrence of an exercise event, if earlier.

15. Warrants

At the date of this announcement, the Company has no outstanding warrants.

David Marks, Martin Higginson, James Carter and Jim Douglas hold, in aggregate, DBPH Warrants over 20,244 ordinary shares in DBPH which they will continue to hold following First Admission.

Whenever these warrants are exercised (in whole or in tranches of not less than 100 DBPH Warrants), it has been agreed, pursuant to the terms of the Warrant Acquisition Agreement, that the Company will acquire such underlying DBPH shares at ratio of one DBPH share in exchange for the issue of 224.55 New Ordinary Share to be issued by the Company.

In addition, the Company has agreed to issue Adviser Warrants on First Admission over an aggregate of 169,285 New Ordinary Shares to WH Ireland and Leander.

16. Dividend policy

The Directors believe that the Enlarged Group should seek principally to generate capital growth for its Shareholders but may recommend dividends at some future date, depending upon the generation of sustainable profits, if and when it becomes commercially prudent to do so and subject to having distributable reserves available for the purpose. There can be no assurance that the Company will declare and pay, or have the ability to declare and pay, any dividends in the future.

17. General Meeting and Resolutions

The Admission Document will contain a notice convening a General Meeting of the Company to be held at 10:00 a.m. on 27 February 2019 at the offices of WH Ireland, 24 Martin Lane, London, EC4R 0DR at which resolutions will be proposed to, inter alia, approve the authorities required in order to effect the Acquisitions, the Placing, the MCV Subscription, the Share Reorganisation and Change of Name and certain other shareholder authorities.

STATISTICS FOR ACQUISITIONS, SHARE REORGANISATION,

PLACING AND ADMISSIONS

* only includes Options for which a future exercise is considered likely

**assumes the exercise of the Adviser Warrants and Options for which the future exercise is considered likely

*** based on the Placing Price

**** the new AIM symbol shall become effective only if the Resolutions are passed at the General Meeting

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Notes:

Each of the dates and times in the above timetable are subject to change at the absolute discretion of the Company and WH Ireland. In this announcement all references to times and dates are in reference to those observed in London, United Kingdom.

DEFINITIONS

FORWARD LOOKING STATEMENTS

Certain statements in this announcement are forward-looking statements. Words such as "expects", "anticipates", "may", "should", "will", "intends", "plans", "believes", "targets", "seeks", "estimates", "aims", "projects", "pipeline" and variations of such words and similar expressions are intended to identify such forward looking statements and expectations. These statements are not guarantees of future performance or the ability to identify and consummate investments and involve certain risks, uncertainties, outcomes of negotiations and due diligence and assumptions that are difficult to predict, qualify or quantify. These forward-looking statements are not based on historical facts but rather on the Existing Directors' and Proposed Directors' expectations regarding the Enlarged Group's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward-looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to management. Forward-looking statements involve significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward looking statements including risks associated with vulnerability to general economic and business conditions, competition and other regulatory changes, actions by governmental authorities, the availability of capital markets, reliance on key personnel and other factors, many of which are beyond the control of the Company. These forward-looking statements are subject to, among other things, the risk factors described in Part III of the Admission Document. Although the forward-looking statements contained in this announcement are based upon what the Existing Directors and Proposed Directors believe to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with these forward-looking statements.

IMPORTANT INFORMATION

WH Ireland Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company in relation to the Fundraising and will not be responsible to any person other than the Company under the Financial Services and Markets Act 2000, the rules of the Financial Conduct Authority or otherwise for providing the protections afforded to its clients or for advising any other person in relation to the contents of this announcement, the Placing or any matter, transaction or arrangement referred to in this announcement. WH Ireland Limited is not making any representation or warranty, express or implied, as to the contents of this announcement.