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Formjet plc

('Formjet' or 'the Company')

Disposal of Panda Software (UK) Limited

Placing to raise £200,000

Proposed directorate changes

Highlights:

• Agreement signed for the disposal of Panda Software (UK) Limited for a cash consideration of up to £1.4 million subject to shareholder approval. 

• Andrew Monk, former founder and joint CEO of Oriel Securities and latterly CEO of Blue Oar Plc will join the board as CEO subject to the resolutions being passed at the Annual General Meeting.

• Andrew Monk will acquire 80,000,000 new shares at 0.25p per share, also subject to the passing of the resolutions at the Annual General Meeting.

• Andrew Monk will be granted share options exercisable at 0.50p per share equivalent to 5% of the enlarged share capital.

• Tony Lee to step down from his role of CEO and will continue as Group Finance Director.

• David Hennell to step down from the board of Formjet plc and to be appointed a director of Formjet Innovations Ltd, a subsidiary company.

• General meeting convened for 11:30 on 8th July 2009.

DISPOSAL 

The board of Formjet plc, the AIM quoted alternative software vendor, is pleased to announce that, on 18 June 2009, it signed a conditional agreement to dispose of the entire issued share capital of its subsidiary Panda Software (UK) Limited to Panda Security S.L. for a consideration of up to £1.4million, which includes an earn-out payment of up to £200,000.

Although the Company will continue with the same business model, the size of the transaction constitutes a fundamental change of business, pursuant to Rule 15 of the AIM Rules. As such, shareholder approval for the disposal is being sought and the board is posting a circular to shareholders convening a general meeting of the Company at 11:30 on 8th July 2009. 

PLACING

The board also announces that it has agreed with Andrew Monk to place 80,000,000 new ordinary shares, at a price of 0.25 pence per share, conditional on the passing of the resolution to empower the directors to issue shares for cash at the Company's Annual General Meeting to be held on 29th June 2009.  The placing will represent 24.23 per cent. of the so enlarged issued share capital of the Company and  raise a total of £200,000. The money raised will provide the Company with additional working capital resources. 

DIRECTORATE CHANGES

To develop the planned future strategy of the Company, the composition of the board will change.

Conditional on the placing detailed above, Antony Lee will relinquish his responsibilities as Chief Executive Officer and remain with the Board as Finance Director. Mr Monk will join the board of the Company as Chief Executive Officer, replacing Mr Lee.

David Hennell will step down from the board to focus his attention on sales and development of marketing strategies for the Company's subsidiaries Formjet Innovations Limited and ASI Ability. Mr Hennell will join the board of Formjet Innovations Limited.

Lyndon Chapman Formjet Chairman explained: 

'It became obvious that the intention of Panda Security S.L. was to take direct ownership of the business of Panda in the UK once the existing contract had expired in 2010. It is therefore an appropriate time to realise value from the business by disposing of it now'.

Chapman added, 'independent of these developments, the board was approached by Andrew Monk with a view to investing in Formjet plc and leading its strategy as CEO into the next phase of its development. With the future emphasis on growth through acquisition and investment, different skills are necessary and this has resulted in the board changes. We hope to welcome Andrew onto the board and are impressed with his vision and confidence of success. His investment and initial remuneration package reflects that confidence. I also thank Tony Lee and David Hennell for embracing these changes.'

A copy of the circular to shareholders will be available on the Company's website, www.formjet.co.uk

ENQUIRIES:

Formjet plc                                                  Tel: 01293 848 860

Lyndon Chapman, Executive Chairman

www.formjetplc.com

Dowgate Capital Advisers Ltd                   Tel: 0207 492 4777

Liam Murray or Jo Turner

www.dowgatecapitaladvisers.co.uk

Dowgate Capital Stockbrokers Ltd           Tel: 01293 517744

Neil Badger

www.dowgatecapitalstockbrokers.co.uk

Notes to Editors:

Formjet plc

Formjet plc is a UK-based company with a highly distinctive business model. It acquires territorial rights to 'alternative' software products, and markets, sells, distributes and supports these products in place of the vendor in worldwide markets. The strategy has at its heart the proposition that the Company can acquire product lines in territories of at least one country without the expense of either product development or the creation of IPR. 

Alternative Products 

• Panda Software (UK) distributes Panda Software antivirus and Internet security products in the UK. With its high margins and recurring annual renewal revenues, Panda is a major contributor to the Group's sales and profitability.  

• Ability Software International (ASI) distributes a powerful suite of office products which, as well as being sold under their own branding, form an integral part of the white label opportunities that Formjet is creating. Ability Software International has also developed the ASI Business Software range. This comprises eight titles, which include fully comprehensive office and graphics suites, Internet security, a business plan development application, small business accounting, appointment book management and staff records management software. In September the Company also added a remote access tool called BeAnywhere to this range.

• EdAlive edutainment software has opened up a new and growing market for Formjet and now covers a wide range of core subjects including maths, word skills and spelling.

Alternative Routes to Market

• Formjet Innovations is the specialist distribution arm of the Formjet Group focusing on its alternative product range and associated alternative routes to market. The focus here is on creating 'white label' software, targeting retail and brand leaders of importance. 

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