OREANDA-NEWS. Osirium Technologies plc, the holding company of Osirium Limited ("Osirium"), a UK based cyber-security software provider, is pleased to announce a successful fundraising of £8.8 million, with the Company's entire issued and to be issued share capital, comprising 10,394,355 Ordinary Shares, to be admitted to trading on AIM on 15 April 2016 under the ticker symbol OSI.L.

Highlights of the Placing and Admission

· A total of 5,655,773 Placing Shares have been placed with institutional and other investors at a Placing Price of 156 pence per share. The market capitalisation of the Company on Admission at the Placing Price will be £16.2 million. The Placing was significantly oversubscribed.

· 3,846,153 New Shares will be issued by the Company, raising £6 million (gross) and 1,809,620 Sale Shares will be sold by the Seller, raising £2.8 million (gross) representing in aggregate 54.4% per cent. of the Company's Enlarged Issued Share Capital.

· The proceeds of the Placing receivable by the Company will be used to help accelerate the Group's growth in the thriving cyber-security market by appointing additional staff members, as required, to support the Group's sales and marketing strategy, investing in the continued research and development of its software modules and providing additional working capital for what the Directors believe will be a phase of rapid growth.

· Dealings on AIM are expected to begin at 0800hrs on 15 April 2016.

· Panmure Gordon (UK) Limited is acting as Financial Adviser, Nominated Adviser and Broker to the Company.

David Guyatt, Chief Executive Officer, commented:

"We are delighted with the strong support shown by our new investors, which we view as a highly positive endorsement of Osirium's innovative technology that significantly improves the security of companies. The fundraising provides the Group with the capital to continue the growth of the business through the building out and development of relationships with existing and new customers alike in the global cyber-security market. We look forward to an exciting future as an AIM-listed company and generating shareholder value."

Business Overview

Osirium protects critical IT assets, infrastructures and devices by preventing targeted cyber-attacks from directly accessing Privileged Accounts, removing unnecessary access and powers of Privileged Account users, deterring legitimate Privileged Account users from abusing their roles and containing the effects of a breach if one does happen.

Osirium has defined and delivered PAM 2.0, which the Company's Directors view as the next generation Privileged Account management solution. The team has developed the concept of Virtual Air Gap to separate users from passwords, with Osirium's Privileged Task Management module further strengthening Privileged Account security and delivering impressive return on investment ("ROI") benefits for customers.

Key Strengths

Experienced management team with a proven track record

Osirium's operational management team, led by the Company's Chief Executive Officer David Guyatt, has almost 100 years' collective experience of the IT security software industry, including over 20 years working in cyber-security. During this period, David with various members of the senior management team successfully built up Integralis and Content Technologies, the company behind the MIMEsweeper email security and content filtering software solution. Content Technologies was sold to Baltimore Technologies in 2000 for a total consideration of almost $1 billion. The team has been working together at Osirium since 2010.

Proven revenue model, blue chip customer base and long-term relationships

Osirium has a proven recurring revenue model and a customer base which includes blue chip enterprises, managed security service providers ("MSSPs"), large multinational organisations and government bodies. Many have been customers for several years, demonstrating the proven capabilities of Osirium's solution and presenting opportunities for what the Directors believe could be significant further organic revenue growth.

Significant market opportunity

The number of cyber-security incidents detected in 2015 increased by 38 per cent. compared with 2014, according to PwC's 'Global State of Information Security Survey 2016'. The targeting of Privileged Accounts has been cited as the most difficult stage of a cyber-attack to mitigate against and, consequently, the misuse of Privileged Accounts is recognised as one of the most critical cyber-security challenges.

As organisations benefit from new digital connections, tools and platforms, the threat of cyber-attacks increases and the consequential damage to corporate reputations and erosion of public confidence are key drivers in the growth of worldwide spending on cyber-security. Another key driver is the requirement for organisations to adhere to increasing levels of cyber-security legislation, international standards and best practice. According to Gartner, worldwide cyber-security spending reached $76.9 billion in 2015 and is set to grow to $93.0 billion by 2017.

The Directors believe that there is a significant opportunity for the Group to take advantage of the thriving cyber-security market to establish a leading position in the Privileged Account security management software vertical. The extent of this opportunity is supported by the size and growth of some of the Group's larger competitors, which includes a public quoted company with a market capitalisation of in excess of $1 billion.

Differentiated software solution providing a competitive advantage

The Directors believe that Osirium's software offers major competitive advantages which include its ease of deployment, the ROI generated from its automation capabilities and the flexibility of its product architecture ensuring that customer requirements can be quickly implemented.

The ease of use and speed of deployment means that the software can be installed and operational within hours. The software's 'out of the box' functionality means that the provision of extensive consultancy services is not necessary for a successful installation. Once deployed, a customer's internal IT resources can deal with any ongoing maintenance requirements without the necessity for further Osirium support.

The software's ability to automate repeatable tasks and securely delegate or outsource tasks to third party service providers, help-desk staff or untrained junior staff removes the risk of human error and frees up the time of more expensive resource to focus on more important IT issues. This helps customers drive down operational costs, achieving impressive ROIs at the same time as reducing business risk.

The Group has a team of experienced software developers that focus on the ongoing development and frequent delivery of new features and functionality in response to customer feedback and requests. In this respect, Osirium's adaptability and flexibility enables the product to maintain its competitive advantage, which in turn results in low customer churn rates demonstrated by a contract renewal rate of over 90 per cent.

In February 2016, as a means of marketing the differentiating factors of its offering compared with competitor products, Osirium launched its PAM 2.0 brand, which will feature heavily in the Group's marketing campaigns going forwards.

Significant Barriers to Entry

The Directors believe that the barriers to entry preventing new participants entering the Privileged Account management vertical of the cyber-security market, thereby reinforcing Osirium's competitive position, include the following:

· Osirium's operational management team has almost 100 years' collective experience of the IT security software industry, including over 20 years working in cyber-security. As a consequence, the knowledge, track record and relationships that they have established provides a significant barrier to entry to new entrants;

· The three patent applications pending. Subject to grant, the Directors believe that these patents will force potential entrants to invest time and money in the development of markedly different software solutions;

· Osirium's geographical location and experience of working with UK based customers, providing credibility to the Group's core UK cyber-security market focus; and

· Osirium has a proven, and what the Directors believe to be a unique, task automation software solution.

Product Offering

Osirium, through its three software modules Privileged Account Management, Privileged Task Management and Privileged Session Recorder, protects an organisation's critical IT assets, infrastructures and devices and transforms Privileged Account management activities, whether the infrastructure is hosted on-premises, in the cloud or a mix of both.

Osirium protects critical IT assets, infrastructures and devices by preventing targeted cyber-attacks from directly accessing Privileged Accounts, removing unnecessary access and powers of Privileged Account users, deterring legitimate Privileged Account users from abusing their roles and containing the effects of a breach if one does happen.

Furthermore, the capability to offer repeatable task automation and securely delegate or outsource tasks to help-desk or untrained junior staff or third party service providers removes the risk of human error as well as freeing up the time of more expensive resource to focus on more important IT issues. This can help organisations drive down operational costs, achieving impressive ROIs as well as reducing business risks.

Business Model

Osirium generates revenues through the sale of its software modules and consultancy services. Osirium raised invoices (net of value added tax) totalling £0.42m in the year ended 31 October 2015 (2014: £0.28m), with £0.29m recognised as revenue in the financial period (2014: £0.21m) and £0.13m as deferred income (2014: £0.07m). In the year ended 31 October 2015, 88 per cent. of recognised revenue was made up of subscription based licence fees (2014: 74 per cent.).

Software

Osirium generates software-based revenue through the sale of its three software modules. These modules are sold via a software licence which may have the following features enabled: Privileged Account Management, Privileged Task Management and Privileged Session Recorder. A licence is offered typically for a period of between 12 and 36 months and invoiced periodically in advance.

Consultancy

Osirium engages a team of up to four consultants which, if necessary, can be deployed to customers, charged out at daily rates. Additionally customers can purchase consultancy services to assist with training and updates.

Growth Strategy

The key elements of Osirium's growth strategy are summarised below:

New customer acquisitions in existing and new markets

Building on its reputation with existing customers, Osirium plans to follow a more aggressive sales and marketing strategy through an increased sales force and enhanced branding of its proposition through its PAM 2.0 brand campaign. Osirium will also seek to expand its presence into new industry sectors such as banking, insurance and critical national infrastructure as well as to develop strategic partnerships with MSSPs, strategic integrators and "The Big 4" accountancy firms.

Growth within the existing client base

Osirium plans to increase growth through cross and up selling its software range. Identifying opportunities to increase the number of devices used per client and sell more deeply into its existing customers, for example into new operating divisions or geographical locations, will be two key focus areas.

Product development

Osirium intends to continue expanding its software portfolio in consultation with customers and responding to their feedback. The Group plans to develop additional modules that it will be able to license to customers and to build out the functionality and features of its Privileged Account Management, Privileged Task Management and Privileged Session Recorder modules. Osirium will also continue to develop APIs for technology partnerships and software alliances.

Reasons for Admission and Use of Proceeds

The Directors believe that Admission is a key step in the Group's further development, enabling Osirium to obtain funding to realise its strategic objectives as well as enhancing its credibility and profile in the market place. The Directors plan to use the net proceeds of the Placing receivable by the Company of approximately £5.1 million to:

· continue to build momentum and the value of Osirium's cyber-security PAM 2.0 brand which will feature heavily in the Group's marketing campaign going forwards;

· fund the appointment of additional sales and marketing staff members, as required, to support the Group's sales strategy;

· invest in the full range of marketing initiatives, including digital marketing (e.g. Search Engine Optimisation, Google AdWords, Google Analytics and webinars) and increasing the attendance and the Group's profile at exhibitions, conferences and other PR events;

· invest in additional research and development resources to accelerate delivery of customer-driven functionality;

· fund ongoing product management; and

· provide additional working capital headroom to fund the continued operations of the Group through what the Directors expect to be a phase of expected and rapid growth.

Admission will also allow the Group to attract, retain, and incentivise existing and future employees and provide access to capital should further financing be required in the future to further expand the business.

Directors

Simon Lee, Non-Executive Chairman
Simon Lee is an International Advisor to Fairfax Financial where he sits on the Boards of Brit Syndicates Ltd and Advent Underwriting Ltd. He is also on the Global Advisory Board to Afiniti Inc., Non-Executive Director of TIA Technology and DGS Ltd. and Chairman of Hospice in the Weald. Until December 2013, Simon was Group Chief Executive of RSA Insurance Group plc, a FTSE 100 company, operating at the time in 32 countries, employing around 23,000 people, writing c.£9 billion p.a. in premiums with assets of c. £21 billion. Previously, Simon spent 17 years with NatWest Group, working in a variety of roles including; Chief Executive NatWest Offshore, Head of US Retail Banking, CEO NatWest Mortgage Corporation (US) and Director of Global Wholesale Markets.

David Guyatt, Chief Executive Officer
Co-founder of Osirium, the management team is led by David Guyatt, who has over 25 years' experience in turning next generation IT products into successful technology businesses. He is a recognised pioneer in establishing the content security software market, being a co-founder and CEO of the Content Technologies group, which developed MIMEsweeper and became the recognised world leader in content security solutions, with a 40 per cent. global market share. Previously, David was Sales & Marketing Director at Integralis from 1990 to 1996, as it established itself as Europe's leading IT Security integrator.

Rupert Hutton, Chief Financial Officer
Rupert served for 12 years as Finance Director of AIM quoted Atlantic Global Plc, a cloud-based project portfolio management software company before being sold in February 2012 to an international, US Private Equity-backed, software business based in Bloomington, Minnesota. Previously, Rupert was Group Financial Controller of the Milton Keynes and North Bucks Chamber of Commerce Training and Enterprise. Rupert spent his early career with Grant Thornton and has an AMBA accredited Masters in Business Administration and is a Fellow of the Association of Chartered Certified Accountants.

John Townsend, Non-Executive Director
John started his career as a financial analyst with Hoare Govett, subsequently moving into senior roles in the fund management industry with Warburg Investment Management (which became Mercury Asset Management plc) and Citibank Global Asset Management. John was a founder of Sagitta Asset Management Ltd in 1995. After exiting Sagitta in 2000, John became CEO of Vesta Capital Partners, a venture capital firm focused on financial services technology. In 2008 alongside David Farmer, John acquired Chord Capital from Sagentia plc. John is Chord Capital's representative on the Board.

Steve Purdham, Non-Executive Director
Steve has spent his entire career in the technology industry, starting with International Computers Limited in 1978 before moving to JSB Computer Systems Ltd. As co-founder of web and email filtering products Surfcontrol, Steve led JSB's flotation on AIM in 1997 as JSB Software Technologies PLC followed by its flotation on EASDAQ and then FTSE Main Market listing in February 2000. Changing its name to SurfControl Plc, the company entered the Techmark index and became a FTSE 250 company for a period of time. Acting as its CEO between 2000 and 2005 and then as a non-executive director until 2007, when the company was sold to Websense Inc. for $400 million. He was also a founder investor in WE7 Limited, acting as the company's CEO between 2008 and 2013 when it was sold to Tesco plc for £10.8 million. Steve is currently Executive Chairman and co-founder of 3rings Care Ltd and since 2002, held a number of other non-executive directorships including with the Manchester Technology Fund Limited and Identum Limited.

Glossary

What is a Privileged Account?

A Privileged Account has elevated permissions and rights compared with an average user account.
An organisation's IT assets, infrastructures and devices such as directory services, application tiers,
databases, network and security appliances and backup and service infrastructures are all operationally managed by employees or third party outsourcers. By virtue of their function, these employees and third parties are issued with Privileged Account access to ensure the uptime (i.e. less downtime), performance and security of an organisation's IT assets, infrastructures and devices. Users that require access to Privileged Accounts include database and system administrators, network engineers, IT security and audit practitioners, data centre operators, application developers and cloud custodians. Privileged Account users therefore have extensive access to IT systems and sensitive data.