Mobile Tornado Regulatory News (MBT)

The information contained within this announcement is deemed by the Company to constitute inside information pursuant to Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended.

1 March 2023

Mobile Tornado Group plc

("Mobile Tornado", the "Company" and, together with its subsidiary undertakings, the "Group")

Subscription to raise £500,000, debt conversion and trading update

Mobile Tornado (AIM: MBT) today announces a subscription for 25,000,000 new ordinary shares of 2 pence each ("Ordinary Shares"), representing approximately 6.6 per cent. of the existing issued ordinary share capital of the Company (the "Subscription Shares") at a price of 2 pence per Subscription Share (the "Issue Price") to raise approximately £500,000 (before expenses) (the "Subscription"). The Company also announces the capitalisation of £259,490 of indebtedness owed by the Company to InTechnology plc ("InTechnology") into 12,974,492 new Ordinary Shares, also at the Issue Price.

Jeremy Fenn, Chairman and acting CEO of Mobile Tornado, commented:

"Since we announced the Board changes on 9 January 2023, I'm pleased to report that the business has moved quickly to scale up its sales and business development operation and is now actively engaged with a number of potential new partners and customers.

"Having combined our robust and reliable push to talk over cellular ("PTToC") platform with the very latest in workforce management technology, our solution gives organisations everything they need to seamlessly communicate with and manage their team members using one application and one device, wherever they are in the world. This is a first for our global market and creates exciting growth opportunities for the Company and our partners.

"This small fundraise will allow us to accelerate our business development activities further, with the recruitment of additional sales professionals in key markets and the execution of a much more intensive outreach campaign. I look forward to further updating the market with our 2022 results during the week commencing 17 April."

Enquiries:

Background to and reasons for the Subscription

Mobile Tornado plc has developed the world's first PTToC platform with integrated workforce management technology.

The Company's established PTToC platform uses cellular and broadband networks to provide always-on instant communications for mission critical requirements in challenging environments. It has been deployed in more than 30 countries worldwide with mobile network operators, government agencies and enterprises in Europe, the Middle East, Africa and the Americas.

The platform's PTToC integration with workforce management technology gives organisations a single application to communicate with and manage remote and mobile operatives using a single device: either an Android or iOS smartphone or ruggedised handset. The solution increases safety, productivity and performance while cutting paperwork and total cost of ownership.

Developed in-house, the workforce management technology enables the digital transformation of multiple manual tasks and assignments and generates advanced business intelligence for the streamlining of operations and enhanced allocation of resources. The workforce management technology offers tools including attendance and time monitoring, forms and checklists, reporting, scheduling and task creation. These are available via a dispatch console, which allows organisations to manage teams from a control room.

The Directors consider it appropriate to undertake the Subscription at the current time in order to provide the Company with the resources to increase its business development capabilities through the recruitment of additional sales professionals and the development and execution of a much broader outreach campaign.

Trading update and notice of results

The Company expects to announce its audited results for the 12 months ended 31 December 2022 in the week commencing 17 April 2023. Total revenue for the year is expected to be approximately £2.28 million, compared to £2.59 million in 2021, a reduction of 12%. Gross profit is expected to be approximately £2.23 million (2021: £2.49 million), a reduction of 11%. EBITDA loss is expected to be approximately £0.29 million, compared to a loss of £0.03 million for 2021.

Recurring revenues for the year are expected to be approximately £1.97 million, compared to £2.11 million in 2021, a reduction of 7%. Our previous customer in Canada which ceased at the end of 2021 as previously reported, accounted for 20% of total revenue and 10% of recurring revenues in the prior year comparative figures. It is pleasing to report therefore, that outside of this, we recorded a modest increase in both our total and recurring revenues across the remainder of our customer base.

The Company is exploring new routes to market, to ensure that its enhanced proposition is given the opportunity to deliver its full potential, and the planned acceleration of our business development activities will further support this. The Board will update on these initiatives when the Company reports its full year results during April 2023.

Details of the Subscription

The Company has raised £500,000 gross proceeds pursuant to the Subscription. The Subscription will result in the issue of 25,000,000 Subscription Shares at the Issue Price representing, in aggregate, 6.6 per cent. of the existing issued ordinary share capital of the Company and have been subscribed for by certain new and existing shareholders of the Company. The Subscription Shares have been issued utilising the Company's existing share authorities.

The Subscription Shares, when issued, will be fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of issue.

Settlement for the Subscription Shares is expected to take place at 8.00 a.m. on 6 March 2023.

Capital Reorganisation

The Company announces the capitalisation of £259,490 of short-term indebtedness owed by the Company to InTechnology at the Issue Price, resulting in the issue of 12,974,492 new Ordinary Shares (the "Capitalisation Shares") to InTechnology (the "Capital Reorganisation"). The indebtedness comprises accrued interest over preference shares held by InTechnology. The Directors believe that it is in the best interests of the Company to take this opportunity to strengthen its balance sheet by undertaking the Capital Reorganisation.

The Capitalisation Shares, when issued, will be fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of issue. The Capitalisation Shares have been issued utilising the Company's existing share authorities.

Related party transaction

As InTechnology is a substantial shareholder in the Company, the Capital Reorganisation constitutes a related party transaction pursuant to Rule 13 of the AIM Rules for Companies.

The Directors of the Company (excluding Peter Wilkinson, as he is the controlling shareholder of InTechnology and therefore not considered to be independent) consider, having consulted with the Company's nominated adviser, Allenby Capital Limited, that the terms of the Capital Reorganisation are fair and reasonable insofar as the Company's shareholders are concerned.

Admission to trading and total voting rights

Application has been made for the Subscription Shares and Capitalisation Shares to be admitted to trading on the AIM ("Admission"). It is anticipated that Admission will occur and dealings will commence in the Subscription Shares and Capitalisation Shares at 8:00 a.m. on 6 March 2023.

Following Admission, and for the purposes of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules, the Company's total issued share capital will consist of 417,719,415 Ordinary Shares.

The above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company, under the Disclosure Guidance and Transparency Rules.

InTechnology shareholding

Following Admission, InTechnology will hold a total of 205,988,314 Ordinary Shares in the Company, equivalent to 49.3% of the total issued ordinary share capital of the Company as enlarged by Admission. In addition, Peter Wilkinson holds a further 38,146,141 Ordinary Shares, equivalent to 9.1% of the total issued ordinary share capital of the Company on Admission. InTechnology also holds 71,276,735 Preference Shares.