FLX.L Regulatory News (FLX)

Falanx Group Limited

("Falanx" or "the Company")

OPERATIONAL UPDATE

Falanx (AIM:FLX), the global intelligence, security and cyber defence provider, is pleased to provide an Operational Update.

Operational Update

· Opened our new Cyber Security Operations Centre in the heart of Birmingham City Centre, in order to supply the significant increase in demand for cyber services.

· The new Cyber Centre creates a three-fold increase in Operational capacity while decreasing fixed overhead by 20%.

· We have successfully completed phase of one of our Cyber hiring programme; newly appointed Head of Sales and Marketing, Head of Penetration Testing, Head of SOC Operations and Technology and an enlarged operations and services team.

· Cyber Sales continue to grow; Falanx Cyber Defence has secured a new Security-as-a-Service contract with a major IT Services Plc of £136k per annum and extension of services to a major UK Bank of £130k.

· Intelligence revenues are firm; Falanx Intelligence has secured the renewal of an annual service contract with a major European bank of €130k.

· We remain on track to achieve profitability and positive cash flow next financial year.

Falanx Cyber Defence

In 2016 the Cyber Services market was valued at £1.88B and growing at approximately 25% CAGR. Falanx Cyber Defence also continues to grow, increasing the breadth and scope of its facilities and services in order to supply the rapidly increasing market demand. Our new Cyber Security Operations Centre, with significantly increased capacity, is now fully established to meet this market demand, underpinned by the continuous development of our Security-as-a-Service platform.

Our accelerated hiring program, announced earlier in the year, continues apace. New heads of Sales, Penetration Testing and Security Operation Centre have been appointed. Our operations team has also been enlarged to deliver increased demand for on-site assessment and remotely delivered security operations.

Falanx Intelligence

Our highly regarded Intelligence organisation continues to grow steadily and retain Blue-Chip clients due to the high quality of its work. This in turn continues to create further business exposure of Falanx Groups other services to these large international clients.

Stuart Bladen, Chief Executive Officer of Falanx, commented:

"We have successfully executed Phase One of our accelerated hiring program in a highly competitive market. These highly prized new members of the team have joined us due to the progressive culture, opportunity and market leading environment we offer."

Mike Read, Chairman of Falanx Group, commented:

"Falanx has started 2017 with another significant step up. The opening of our new high-capacity Security Operations Centre, a successful hiring program and extension of our business with several of our most important clients, points to us closing out our financial year on a high note and setting strong foundations for FY2017/18"

Enquiries:

About Falanx

Falanx Group Limited, is a global intelligence and cyber defence provider working with blue chip and government clients. The Group listed on AIM in June 2013 under ticker FLX For more information: http://www.falanxgroup.com/

MAR

This announcement contains inside information for purposes of Article 7 of Regulation (EU) No 596/2014