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.

22 November 2022

Osirium Technologies plc

("Osirium" or the "Company" or, together with its subsidiary, the "Group")

Proposed Placing and Subscription, Board Changes and Notice of General Meeting

Osirium Technologies plc (AIM: OSI), a UK-based leading vendor of cloud-based cybersecurity software, is pleased to announce that it has conditionally raised £1.53 million before expenses by way of:

·    a placing of 63,750,000 new ordinary shares of 1p each in the capital of the Company (the "Placing Shares"), at a price of 2 pence per share (the "Issue Price") to raise £1,275,000 (the "Placing"); and

·    an issue of 12,750,000 new ordinary shares of 1p each in the capital of the Company (the "Subscription Shares") to certain Directors of the Company and others at the Issue Price to raise £255,000 (the "Subscription").

The Company also announces a number of Board changes that will take effect on 1 January 2023, conditional on the completion of the Placing and Subscription, including the appointment of Stuart McGregor, current Sales Director, as Chief Executive Officer of the Company.  

Placing and Subscription highlights

·    Placing to raise £1,275,000 (before expenses), by way of a proposed placing of 63,750,000 new Ordinary Shares with existing and new institutional investors at the Issue Price. The Placing will be carried out in two tranches:

·    9,209,700 Placing Shares (the "First Placing Shares") will be allotted and issued utilising the Company's existing share allotment authorities granted at its 2022 annual general meeting held on 7 June 2022 (the "2022 AGM"); and

·    54,540,300 Placing Shares (the "Second Placing Shares") to be allotted and issued conditional, inter alia, upon the passing of the Resolution (the "Resolution") to grant authority to the Directors to allot new ordinary share of 1p each in the capital of the Company ("Ordinary Shares") otherwise than on a pre-emptive basis at the Company's General Meeting expected to be held at 10:00 am on 12 December 2022 (the "General Meeting").

·    Subscription for an aggregate of 12,750,000 new Ordinary Shares in the Company by certain Directors and others at the Issue Price, to raise an additional £255,000, conditional on the passing of the Resolution.

·    The Issue Price represents a discount of 50% to the closing mid-market share price of an existing Ordinary Share on 21 November 2022, being the last business day prior to this announcement.

·    The Placing Shares and the Subscription Shares will in aggregate represent approximately 62% of the Company's enlarged share capital.

·    The net proceeds of the Placing and Subscription receivable by the Company, which are expected to total approximately £1.36 million, will be used for general working capital purposes.

·    Allenby Capital Limited is acting as nominated adviser and sole broker to the Company in respect of the Placing.

·    A Circular, containing further details of the Placing and Subscription and a notice convening the General Meeting, will shortly be made available to Shareholders and a copy will be available on the Company's website, www.osirium.com.

Operational highlights

·    The Board's strategic focus is to reduce the timeframe to the Company becoming cash flow break-even by maintaining the positive growth achieved in the year to date, combined with a rationalisation of the Group's cost base.

·    The Board has identified £1 million of annualised cost savings, £650,000 of which have been implemented in the year to date and the balance of which are expected to be implemented by the start of 2023.

·    The following Board changes will be taking effect from 1 January 2023 conditional on completion of the Placing and Subscription:

o  Stuart McGregor, current Sales Director, will be appointed as Chief Executive Officer

o  David Guyatt, current Chief Executive Officer, will become Executive Chairman in a part-time capacity

o  Simon Lee, current Chairman, will be appointed as Senior Independent Non-Executive Director and step down as Chairman

o  Steve Purdham, Non-Executive Director, will step down from the Board in order to pursue other business interests and Simon Hember will be appointed chair of the Remuneration Committee.

David Guyatt, Chief Executive Officer, commented:

"We have made considerable strides against our financial and strategic objectives over the course of the year, with our annual recurring revenue indicating record growth for the year. Our customer acquisition continues apace and, through the maturing of our product suite, we are now in an even greater position to expand our engagement with existing customers. Through the proposed fundraise and the intended further rationalisation of our cost base, we expect to accelerate the time to cash flow break-even and fuel our long-term growth ambitions. I would like to thank all shareholders for their support in helping us unlock the Group's potential.

"With our initial product vision now established and gaining market momentum, it is the right time to transition our leadership team and see the Group through its next stage of growth. Stuart McGregor possesses a deep knowledge of the Group's product suite and customers, together with a wealth of experience in IT sales in the UK and internationally, and represents an excellent fit for the Group's strategic aims. At the same time, I would like to thank Steve Purdham for his contribution to the Board over the past few years. As Executive Chairman as of January 2023, I look forward to continuing my active involvement on the Osirium Board, with a strategic focus on scaling the market demand for Privileged Security."

Background to and reasons for the Placing and Subscription

Osirium is a UK-based leading provider of cloud-based cybersecurity and IT automation software to organisations in the UK and internationally. The Group's complementary product portfolio has been purposely built from the ground up to blend powerful functionality with simple deployment - a key aspect of the Group's differentiation. This is gaining increased brand value and appreciation within the core mid-market space.

In 2022 year-to-date, the Company has made significant financial and strategic progress, reporting bookings for the first nine months of the year in excess of the total bookings achieved in any prior year and delivering robust ARR SaaS growth. This is alongside average contract values also increasing, reflecting the return to, and increase in demand for, Osirium's products and the stabilisation in its end markets.

This growth is underpinned by not only its Privileged Access Management solution, but also its Privileged Process Automation and its Privileged Endpoint Management solutions, which have emerged as standalone products in 2022. As a result, its product suite can be sold independently or as a bundled package. This offering enables the Group to cross-sell and upsell to customers as part of its stated 'Land, Expand and Renew' growth model. The Directors believe this model is validated by the Group's rate of customer acquisition throughout 2021 and in 2022 to date.

Current trading and prospects

As set out in its Q3 2022 trading update, announced on 1 November 2022, the Company achieved bookings for the nine months to September 2022 of £2.52 million, which is in excess of the total bookings recorded in any prior full year. The Company's annual recurring revenue ("ARR") at September 2022 was £1.74 million, an increase of 30.0% over the 12 months to 30 September 2022. 

Managing costs remains one of the most important priorities for the business, and the growth in revenues experienced during the period is steadily bringing forward the Group's cash flow break-even point. The Group has implemented measures which are delivering material cost savings within the business without affecting the Company's ability to continue to grow its business. The Board has implemented £650,000 of annualised cost savings in the business so far in 2022 and has identified a further £350,000 of annualised cost saving measures which will be taking effect from 1 January 2023 conditional on completion of the Placing and Subscription. The Directors consider that this total £1 million of annualised cost savings will contribute towards shortening the timeframe by which the Company will become cash flow break-even.

Notwithstanding the progress made in the year to date, as announced at the time of the fundraise in February of this year, the Company requires to raise additional working capital. The Directors believe that the momentum seen in the past 12 months demonstrates the market opportunity for the Group's suite of products and therefore considers that it is appropriate to conduct the Placing and Subscription in order to enable to the Company to continue to pursue its growth strategy. 

The Placing and Subscription

Further details of the Placing and Subscription are set out below.

The first tranche of the Placing will not be conditional upon the passing of the Resolution or the allotment and issue of the Second Placing Shares and the Subscription Shares.

The second tranche of the Placing and the Subscription is conditional, inter alia, upon the passing of the Resolution at the General Meeting. Shareholders should be aware that if the Resolution is not approved at the General Meeting, the second tranche of the Placing and the Subscription will not proceed and the Directors would immediately have to re-evaluate the strategy and outlook of the Group. Shareholders are therefore urged to vote in favour of the Resolution, which the Directors consider to be in the best interests of Shareholders and the Company as a whole.

Use of Proceeds

The net proceeds of the Placing and the Subscription (being approximately £1.36 million, assuming that all Placing Shares and Subscription Shares are subscribed for) will be used for general working capital purposes.

The Directors consider that the Placing and Subscription will position the Group to capture the substantial market opportunity available to deliver long term shareholder value.

Proposed Board Changes

In order to align the management team with the Group's strategy of driving top line growth and conditional on the completion of the Placing and Subscription, the Company has appointed Stuart McGregor as Chief Executive Officer and as a member of the Board of Directors. The appointment will take effect 1 January 2023 to provide an orderly handover.

Stuart is a Sales leader with over 20 years in the IT industry. Stuart has a breadth of experience in leading direct and channel sales teams of SaaS and on premise solutions into mid-market and enterprises across EMEA. As Sales Director for Privileged Access Management vendor, Bomgar, where he established an EMEA operation and led the UK and Northern Europe sales teams. Stuart saw local revenues grow significantly and sales operations created in the UK, Netherlands, Germany and France.

Stuart was also a member of Bomgar's Global Leadership team and managed the integration of sales operations of the acquired Lieberman, Avecto and BeyondTrust businesses. Stuart has also held successful sales and consulting management positions at EMC, UK start-up software company Thunderhead, BroadVision and Oracle.

Most recently he has spent over three years building and leading the Group's sales teams as Osirium's Sales Director. During this time he has worked closely with the executive team in implementing the Group's go-to-market strategy, building key client relationships and building new business pipeline.

Also effective 1 January 2023 (and conditional on the completion of the Placing and Subscription), David Guyatt, the Company's existing Chief Executive Officer will assume the position of Executive Chairman in a part-time capacity. Simon Lee, the Group's current Chairman, will stand down as Chairman and take on the role of Senior Independent Non-Executive Director and current Non-Executive Director, Steve Purdham will be stepping down from the Board to pursue other business interests and Simon Hember will be appointed chair of the Remuneration Committee. Steve was principally involved in the Company's admission to AIM on the London Stock Exchange in 2016 and has been with the Company since. The Company takes this opportunity to thank him for his contributions.  Following these Board changes, the composition of the Company's Board of Directors will be as follows:

·    Stuart McGregor, Chief Executive Officer

·    David Guyatt, Executive Chairman

·    Rupert Hutton, Chief Financial Officer

·    Simon Lee, Senior Independent Non-Executive Director

·    Simon Hember, Independent Non-Executive Director

The following information is provided pursuant to Rule 17 and Schedule 2(g) of the AIM Rules: Stuart Lindsay McGregor, aged 54, does not have any current directorships and has not held any directorships in the past five years.

Further details of the Placing

Under the Placing, the Company has conditionally raised £1,275,000 (before expenses) through a placing of 63,750,000 Ordinary Shares at 2pence per share with institutional and other investors. The Company has entered into a Placing Agreement with Allenby Capital under which Allenby Capital has agreed to use its reasonable endeavours to procure Placees for the Placing Shares at the Issue Price. The Placing has not been underwritten.

The Placing Shares will represent approximately 52% of the enlarged share capital of the Company following completion of the Placing and the Subscription.

The Company currently has limited authority to issue new ordinary shares for cash on a non-pre-emptive basis. Accordingly, the Placing is being conducted in two tranches.

The first tranche to raise a total of £184,194 by the issue of 9,209,700 Placing Shares (being the First Placing Shares) at the Issue Price, has been carried out within the Company's existing share allotment authorities granted at the 2022 AGM. The allotment of the First Placing Shares is conditional, inter alia, upon admission to AIM (First Admission) and the Placing Agreement becoming unconditional in respect of the First Placing Shares and not being terminated in accordance with its terms prior to First Admission.  Application has been made for the First Placing Shares to be admitted to trading on AIM and it is expected that First Admission will take place on 25 November 2022. The First Placing is not conditional on completion of the second tranche of the Placing or completion of the Subscription.

The second tranche of the Placing, to raise a total of £1,090,806 by the issue of 54,540,300 Placing Shares (being the Second Placing Shares) at the Issue Price, is conditional upon, inter alia, the passing of the Resolution to be put to Shareholders at the General Meeting (granting the Directors authority to allot new ordinary shares otherwise than on a pre-emptive basis). In addition, the allotment of the Second Placing Shares is conditional, inter alia, on the Placing Agreement becoming unconditional in respect of the Second Placing Shares and not being terminated in accordance with its terms prior to admission to AIM (Second Admission). It is expected that Second Admission will take place on 14 December 2022.  

The Placing is conditional, so far as concerns the Second Placing Shares upon, inter alia, Second Admission occurring by no later than 8.00 a.m. on 14 December 2022 (or such later time and/or date as the Company and Allenby Capital may agree, not being later than 8.00 a.m. on 30 December 2022). If such condition is not satisfied or, if applicable, waived, the placing of the Second Placing Shares will not proceed.

The Placing Shares will be issued credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive dividends and other distributions declared on or after the date on which they are issued.

It is expected that CREST accounts will be credited on the relevant day of Admission and that share certificates (where applicable) will be despatched within five working days of Admission.

The Placing will entitle holders of the Company's £2,700,000 convertible unsecured 7.5% notes, due in 2024 and created by the loan note instrument dated 21 October 2019 (the "Convertible Loan Notes"), to elect to convert the principal amount of their loan notes into fully paid Ordinary Shares ranking pari passu in all respects with the Ordinary Shares of the Company in issue on the date of conversion. Conversion will be at a rate equal to 6 pence per share, being the placing price of the Company's last placing announced on 11 February 2022. Notice of conversion may be given by holders of the Convertible Loan Notes at any time within 20 business days of First Admission.

Further details of the Subscription and Director dealings

Concurrent with and conditional on the Placing, certain Directors (including their families) and others have agreed to subscribe for an aggregate of 12,750,000 new Ordinary Shares at the Issue Price to raise an additional £255,000.

The following Directors and proposed Director of the Company have subscribed for Subscription Shares pursuant to the Subscription:

*includes spouse

Further details of the Subscription by the Directors are set out in the table below (Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them).

Related party transactions

The participation of certain Directors in the Subscription constitutes a related party transaction pursuant to the AIM Rules for Companies. The Directors (excluding Simon Lee, David Guyatt and Rupert Hutton, each of whom has participated in the Subscription), having consulted with the Company's nominated adviser, Allenby Capital Limited, consider the terms of the Subscription to be fair and reasonable insofar as the Company's shareholders are concerned.

Admission to trading and total voting rights

Application has been made for the admission of the First Placing Shares to trading on AIM ("First Admission"), which is expected to occur on 25November 2022. Following First Admission, the number of Ordinary Shares in issue and number of voting rights will be 55,258,318. The above figure may be used by shareholders as the denominator for the calculations by which they will determine whether they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules

Posting of Circular and notice of General Meeting

The Company will shortly be making available to Shareholders a circular (the "Circular") containing a notice of the General Meeting, to be held at the Company's offices at Theale Court, 11-13 High Street, Theale, RG7 5AH at 10:00 a.m. on 12December 2022. A copy of the Circular will be available on the Company's website, www.osirium.com.

Expected timetable

Words and expressions defined in the Circular have the same meanings where used herein.

- Ends -

About Osirium Technologies Plc

Osirium Technologies plc (AIM: OSI) is a leading UK-based cybersecurity software vendor delivering Privileged Access Management (PAM), Privileged Endpoint Management (PEM) and Osirium Automation solutions that are uniquely simple to deploy and maintain. 

With privileged credentials involved in over 80% of security breaches, customers rely on Osirium PAM's innovative technology to secure their critical infrastructure by controlling 3^rd party access, protecting against insider threats, and demonstrating rigorous compliance. Osirium Automation delivers time and cost savings by automating complex, multi-system processes securely, allowing them to be delegated to Help Desk engineers or end-users and to free up specialist IT resources. The Osirium PEM solution balances security and productivity by removing risky local administrator rights from users, while at the same time allowing escalated privileges for specific applications.

Founded in 2008 and with its headquarters in Reading, UK, the Company's shares were admitted to trading on AIM in April 2016. For further information please visit www.osirium.com.

Notice to Distributors

Solely for the purposes of the temporary product intervention rules made under sections S137D and 138M of the Financial Services and Markets Act 2000 and the FCA Product Intervention and Product Governance Sourcebook (together, the "Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, as defined under the FCA Conduct of Business Sourcebook COBS 3 Client categorisation, and are eligible for distribution through all distribution channels as are permitted by the FCA Product Intervention and Product Governance Sourcebook (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Allenby Capital Limited will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of the FCA Conduct of Business Sourcebook COBS 9A and 10A respectively; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them.