Placing to raise £7.15 million

 23 April 2013

Phorm Corporation Limited ("Phorm" or the "Company")

Placing to raise £7.15 million (the "Placing")

Phorm (AIM: PHRM), the personalisation technology company, today announces that it has conditionally placed 130,000,000 new ordinary shares of nil par value in the capital of the Company (the "Placing Shares") at £0.04 per ordinary share (the "Placing Price") to raise £5.20 million before expenses. In addition, the Company has raised funds through the placing of £1.95m of convertible secured loan notes (the "Loan Notes").

The key terms of the Loan Notes are:

·; Annualised coupon rate of 10%, payable upon redemption

·; Repayable on 25 April 2015

·; Convertible into ordinary shares in Phorm at the holder's discretion at £0.048 per ordinary share at any time prior to the final repayment date of 25 April 2015

·; Secured with a fixed and floating charge on the Company's assets

·; The Company may elect to repay the Loan Notes at any time after issue prior to the redemption date if the ordinary shares of the Company have traded above £1.00 per ordinary share for 10 consecutive business days

The loan notes issued to a new investor referred to in the announcement dated 20 March 2013, of which the first tranche of £1.5m has been drawn down, remain in place at the current time.

Phorm intends to use the proceeds from the Placing for general working capital purposes during the ramp up phase of its recently announced commercial launch in Turkey. The Placing is conditional, inter alia, upon admission of the Placing Shares to trading on the AIM market of the London Stock Exchange plc ("AIM").

Application will be made for the Placing Shares to be admitted to trading on AIM and trading is expected to commence at 8.00 am on 25 April 2013. The Placing Shares will represent approximately 59% of the enlarged issued share capital of the Company. Following the Placing, the total issued share capital of the Company will comprise 221,000,361 ordinary shares.

Related party transactions

Pursuant to the Placing, Viollette Company Limited ("Viollette") and Meditor European Master Fund Limited ("Meditor") are both investing £2,025,000 each in Placing Shares and £975,000 each in Loan Notes. The subscription for the Placing Shares will take Viollette's and Meditor's shareholding in the Company to 29.0% and 29.5% respectively. In the event that both Viollette and Meditor convert their Loan Notes, their shareholding in the Company will increase to 32.3% and 32.7% respectively.

Solely by virtue of Viollette and Meditor currently being substantial shareholders in the Company, Viollette's and Meditor's investment constitute related party transactions for the purposes of Rule 13 of the AIM Rules.

In light of the above, the directors of Phorm consider, having consulted with Liberum Capital Limited (the Company's nominated advisor), that the terms of Viollette's and Meditor's participations in the fundraising are fair and reasonable insofar as the Company's shareholders are concerned.

Operating update

The Company is continuing to make good progress in Turkey. The invitation process has been improved to take into account the new guidelines issued by the BTK in December 2012. The Company is very pleased with the response to the invitation, over 1.7m users have opted in since the beginning of April and numbers are continuing to grow in line with expectations. The Company expects to start showing advertising on a commercial basis in the next few weeks.

In China, the deployments are on track, the first province is expected to launch in Q3 2013 with two other major provinces scheduled for H2 2013.

In addition, a major cost cutting process is underway to maximise the impact and results from this new round of investment. 

Board Changes

The Company has decided to split the role of Chairman and Chief Executive Officer. As such an independent Chairman will be appointed and a further announcement will be made shortly. In addition, as part of the restructuring of the Board, Andrew Croxson will be stepping down as a Director of the Company on 30 April 2013 but will remain Group COO and CFO.

For Enquiries

Phorm Corporation Limited

Mark Williams (analysts & investors) +44 20 7297 2326

Lauren Hendry Parsons (media) +44 20 7297 2326

Liberum Capital +44 20 3100 2222

(Nominated Advisor and Joint Broker)

Chris Bowman

Richard Bootle

Mirabaud Securities LLP +44 20 7321 2508

(Joint Broker and Sole Bookrunner)

Jason Woollard

Peter Krens

Hudson Sandler +44 20 7796 4133

Charlie Jack

Charlie Barker

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About Phorm

Phorm is a global personalisation technology company that makes content and advertising more relevant to the consumer. Phorm's innovative platform preserves user privacy and delivers a more interesting online experience.

Phorm's partners include leading Internet Service Providers (ISPs), Publishers, Ad Networks and Advertisers.

A Singapore incorporated company, Phorm (under a previous holding company) was admitted to the AIM market of the London Stock Exchange in 2004.

For more information, please visit: www.phorm.com