FLX.L Regulatory News (FLX)

 Falanx Group Limited

("Falanx" or "the Company")

Acquisition of Cloudified Ltd

Falanx Group Limited (AIM: FLX) a cyber defence and intelligence provider working with blue chip, SME and government clients worldwide, is pleased to announce it has acquired the entire issued share capital of Cloudified Limited ("Cloudified") for a total consideration of approximately £180,000 ("Acquisition").

Acquisition

Cloudified a profitable Software Defined WAN (SD-WAN) vendor specialising in building cost effective Wide Area Network solutions for SME's, has provided its products to major telcos and ISP's, such as BT and Daisy Plc. Having benefited from the investment of £0.5m in the development of its IPR, Falanx bid to acquire its unique assets and contracts, which having achieved a profit of £3.7k and revenue of £12k in the year to 31 May 2017, the Board recognised as significant shareholder value. The Board decided to acquire on the basis of being able to utilise the Cloudified technology in the MidGARD platform, grow the existing SD-WAN accounts and acquire the exceptional software development team.

Cloudified's technology stack brings a significant amount of additional IPR to Falanx's development program. Cloudified's core connectivity technology and data management and monitoring platform complements Falanx's MidGARD. The acquisition of these technologies allows Falanx to significantly accelerate the launch of its SME-focussed offering, MicroSOC.

Cloudified was founded in 2010 by Daniel Waite, its Managing Director and majority shareholder, building on technology he developed over the previous 8 years. Mr Waite is a proven technology innovator, and has 20 years' experience working in technology, with several hands-on, technical roles and has provided consultancy for global enterprises in both finance and communications sectors as well as successfully building and leading teams. He has a very good track record in bringing innovative products to market rapidly that bring clear and tangible value. Daniel will now become Head of Software Development of Falanx Cyber Technologies, driving research, innovation and development of our MidGARD platform and future Cyber Defence products.

To satisfy the consideration for the Acquisition, Falanx will issue 1,122,807 new Ordinary Shares at 7.125p per share and pay £100,000 in cash to the shareholders of Cloudified, valuing the entire issued share capital at approximately £180,000. The Ordinary Shares to be issued to Mr Daniel Waite, are subject to lock-ins expiring on 3rd July 2019 with a subsequent 12 month agreement of orderly market provisions via Falanx.

Admission of the new Ordinary Shares to trading on AIM

Application will be made for the admission of 1,122,807 new Ordinary Shares to be issued pursuant to the Acquisition to trading on the AIM Market of the London Stock Exchange, which is expected to take place on or around 8.00 a.m. on 10 July 2017 ("Admission"). Completion of the Acquisition and is conditional on Admission becoming effective. The new Ordinary Shares will, when issued, be credited as fully paid and will rank equally in all respects with the existing Ordinary Shares, including the right to receive any dividend or other distribution declared, made or paid after Admission.

Following Admission, the Company's enlarged issued share capital will comprise 156,540,075 Ordinary Shares carrying one vote per share. The Company does not hold any Ordinary Shares in treasury.

Chief Executive Officer, Stuart Bladen said:

"I am delighted to announce the acquisition of Cloudified which enables Falanx to broaden its reach and enhance its SME-focussed offering which it is about to launch in the coming months. The acquisition also brings the considerable skillset of the team and in particular its founder Daniel Waite who will help drive research, innovation and development of our MidGARD platform and future Cyber Defence products. We are delighted to include Mr Waite amongst our growing operational management team."

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