Issue of Equity and Directors' Dealings

11 May 2016

FALANX GROUP LIMITED

("Falanx" or "the Company")

Issue of Equity and Directors' Dealings

Falanx Group Limited, a cyber defence and intelligence provider working with blue chip and government clients worldwide, announces that the Company has today issued a total of 2,125,000 new ordinary shares of no par value in the capital of the Company ("Ordinary Shares") to certain of its directors as follows:

· 1,250,000 new Ordinary Shares were issued to Mike Read, non-executive Chairman of the Company, raising gross proceeds for Falanx of £50,000, which the Company will use to execute its growth strategy, supplementing the proceeds of the placing of Ordinary Shares announced on 5 May 2016.

· 875,000 new Ordinary Shares were issued to Desmond Carr, non-executive Director, in lieu of £35,000 of accrued director's fees due to Mr Carr (together with the new Ordinary shares issued to Mr Read, "the Subscription").

The new Ordinary Shares were issued to Mr Read and Mr Carr at an effective price of 4 pence per share ("Subscription Price"). The Company also issued Mr Read and Mr Carr with warrants over a further 1,250,000 new Ordinary shares and 875,000 new Ordinary Shares respectively ("Warrants"). The Warrants are exercisable at 6 pence per Ordinary Share between May 2016 and May 2019. The Subscription Price and the terms of exercise of the Warrants are the same terms as those on which participants in the placing announced on 5 May 2016 invested.

Mr Read is now interested in 1,250,000 Ordinary Shares, representing 1.18 per cent of the Company's issued share capital, as enlarged by the Subscription. Desmond Carr's interest is now in 1,075,000 Ordinary Shares, representing 1.05 per cent of the Company's issued share capital, also as enlarged by the Subscription.

Application will be made for admission of the 2,125,000 new Ordinary Shares to be issued pursuant to the Subscription 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 17 May 2016 ("Admission"). 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 105,612,154 Ordinary Shares carrying one vote per share. The Company does not hold any Ordinary Shares in treasury.

The Board also confirms that the Company's results for the year ended 31 March 2016 will be announced on 18 July 2016.

Non-executive Chairman of Falanx, Mike Read said:

"I am pleased to see the developments made at Falanx since my appointment in February. We are rapidly building a comprehensive cyber security offering that will meet the demands of government organisations, blue chip enterprises and SMEs alike. "

Enquiries:

Falanx Group Limited is a global intelligence, security 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/