Daily Internet plc
PLUS : DAIP

March 10, 2008 03:00 ET

Official List Notice

LONDON, UNITED KINGDOM--(Marketwire - March 7, 2008) -

Daily Internet Plc (PLUS:DAIP) -

ADMISSION TO PLUS-Quoted Market and successful fundraising

The Directors of Daily Internet Plc ("Daily" or the "Company") is pleased to announce that it has closed its Offer of ordinary shares, having received subscriptions for a total of 5,240,000 new ordinary shares by the close of business on 29th February 2008. The Company has raised a total of Pounds Sterling 524,000 (before expenses) in this fundraising, an amount in excess of the Pounds Sterling 400,000 minimum under the Offer and the ordinary shares will be admitted to trading on PLUS on March 10th 2008.

The Company has 34,575,000 shares in issue, which at the Offer Price of 10p per share gives the Company a market Capitalisation of Pounds Sterling 3.46 million.

LISTING DETAILS

Sector classification:- Software and Computer Services

Principal activities:- The provision of dedicated Web Hosting solutions such as domain registration, professional Email and shared server web hosting services, online remote backup services and e-commerce solutions.

Corporate Adviser:- Loeb Aron & Company Limited, Tel: 020 7628 1128, Fax: 020 7638 0756, peter@loebaron.co.uk or joey@loebaron.co.uk

ADMISSION DATE 10th March 2008

BACKGROUND

Daily Internet is a dedicated Web Hosting solutions provider focused on delivering a broad range of cost effective and scaleable Web hosting services in the UK. Services such as domain registration, email and shared server web hosting services, online remote back up services and e-commerce solutions represent the Company's core business activities.

Abby Hardoon has been involved in Web Hosting since August 1996 when he founded NET Design Ltd. Restructured as Magic Moments Internet Plc, it was listed in September 1999 on AIM. Later, renamed Host Europe Plc, it was sold to Pipex Communications Plc for over Pounds Sterling 30 million in a cash deal in April 2004.

In early 2006 Abby Hardoon established Hostvue (UK) Ltd., later renamed Daily Internet Services Ltd., which is now a wholly owned subsidiary of the Company. Completely funded by Abby Hardoon, Hostvue (UK) Ltd wrote the new software needed for modern Web Hosting solutions and billing systems. On 1st May 2007 the Company acquired the entire issued share capital of Daily Internet Services Ltd. in a share for share exchange.

Directors

Abby Hardoon Adulayavichit, aged 45, ,Managing Director (and Pro-tem Chairman)
Mr. Hardoon is a business administration graduate from George Washington University, Washington DC, USA. He was a founder of NETDesign Limited and Magic Moments Internet Plc. Following the admission of Magic Moments to trading on AIM in September 1999, he served as Chief Executive Officer. Under Mr. Hardoon's leadership that company acquired two other Internet hosting companies; WebFusion Internet Solutions Limited and One2One Gmbh (now Host Europe GmbH). Following the acquisition Magic Moments Internet Plc was renamed Host Europe Plc. Mr Hardoon, together with his team, successfully grew the combined business into profitability until it was sold in April 2004 to PIPEX Communications Plc for over Pounds Sterling 30m.

Julie Ann Joyce, aged 42, Finance Director

Mrs. Julie Joyce is a Fellow of the Chartered Association of Certified Accountants. She was employed as Finance Manager of WebFusion Internet Solutions Limited, an Internet Hosting company which was acquired by Magic Moments Internet Plc in May 2000. She became Group Financial Controller for Host Europe Plc and its group companies following it's acquisition of WebFusion and continued in this role for the SME hosting division of PIPEX Communications Plc after the successful sale to PIPEX in April 2004. She also has extensive auditing and private practice experience, having spent ten years in this sector prior to her move into commerce and industry.

Robert Khalastchy, aged 45, Non-Executive Director

Mr. Khalastchy is a graduate of the University of Sussex where he received a Bachelor's degree in Electronic Engineering. For the past 15 years he has worked in commercial property management. He has been a director of RK Management Limited for the last 6 years. RK Management is a property management company, managing commercial property portfolios.

Senior Employees

Alison Curry-Taylor, Operations Director

Mrs Curry-Taylor worked with WebFusion Internet Solutions Limited since formation and continued to work for Host Europe Plc (formerly Magic Moments Internet Plc) post acquisition. During her tenure with both companies, she successfully directed the growth of the SME hosting business unit and was responsible for delivering several key projects and products. Host Europe Plc's SME hosting business unit consisted of several well known brands such as 123-reg, WebFusion, Donhost and Magic Moments.

Simon Amor, Head of R & D

Having worked with WebFusion Internet Solutions Ltd and Host Europe Plc for nearly 6 years, Simon has been involved in developing most of the systems Host Europe Plc used and deployed. He was pivotal in the development of the 123-reg brand, which launched in 2000. In addition to his technical contribution to Host Europe Plc he also managed the research and development team.

The directorships of the Directors currently held and held over the 5 years preceding the date of the Admission Document (other than of the Company) or subsidiaries of the Company are as follows:



Director Current directorships Past directorships

Abby Hardoon None Host Europe Plc
Adulayavichit Magic Moments Internet Services Ltd
Magic Moments Employee Benefit
Trust Ltd
Host Europe GmbH
Robert Khalastchy RK Management Limited Amitz Poplar Lodge Limited
Wymering Mansions
Limited
TwinStar Equity Ltd
Julie Ann Joyce None None


Reasons for the Offer and Admission

The Offer raised Pounds Sterling 524,000 for the Company before expenses (assuming full subscription). The proceeds of the Offer will be used to provide funds needed by the Company to meet the Company's initial operations, running costs and marketing needs while revenues are developed, and to pay the costs of the Offer and Admission, details of which are set out at paragraph 12.4 of Part IV of the Admission Document.

The Directors believe that the benefits of the Offer and Admission include:

- an improved ability to raise further funds in the future, either to enable a proposed acquisition or investment to be completed and/or to raise additional working capital or development capital for the Company;

- ability, in the future, to attract and incentivise high calibre directors and employees by offering share options. The Directors consider that the ability to grant options over publicly traded shares is potentially more attractive to directors and employees than the grant of options over unquoted shares; and

- the ability to provide investors with liquidity and to expose the Company to a wider investor base.

The Directors believe that the profile of the Company will be significantly enhanced by its position as a company whose shares are traded on PLUS Markets. None of the Directors is selling any Ordinary Shares in, or as a consequence, of the Offer.

Ordinary Shares and Warrants

At the date of Admission there are 34,575,000 Ordinary Shares in issue and 1,977,500 Pre-IPO Warrants have been granted to the existing shareholders with rights to subscribe for new Ordinary Shares at a price per share of 10 pence per Ordinary Share at any time within 2 years from the date of Admission or 1 December 2007 if earlier ("Pre- Admission Warrants").

By a deed dated 9 January 2008 ("Convertible Loan Note Instrument"), the Company issued 56 convertible loan notes ("Loan Notes") to secure Pounds Sterling 280,000 (a value of Pounds Sterling 5,000 per Loan Note). Interest on the Loan Notes is payable at an annual rate of 8.6 per cent. Interest will not accrue for the first 3 months following issue of the Convertible Loan Note Instrument. The Convertible Loan Notes are unsecured and are freely transferable.

The Convertible Loan Notes convert into new Ordinary Shares at a conversion rate of 12 pence per Ordinary Share between the date of the Convertible Loan Note Instrument and the Conversion Date (as defined in the Convertible Loan Note Instrument). The Convertible Loan Notes are convertible at any time at the option of the noteholders.

The Company must repay the Convertible Loan Notes (in so far as not converted) before the fourth anniversary of the issue of the Convertible Loan Notes.

The Convertible Loan Notes contain a number of restrictions on what the Company may do whilst they remain outstanding.

The Company, pursuant to a resolution of its board of directors dated 9 January 2008, created and issued warrants to subscribe in cash for up to 2,800,000 Ordinary Shares in the share capital of the Company at 15p per share exercisable for 5 years.

Upon Admission and closing of the Offer, Warrants will have been granted to subscribe for up to 13,186,924 new Ordinary Shares (consisting of the Pre-Admission Warrants, the Arranger Warrants, the Loan Note Warrants, the Committed Investor Warrants and the Offer Warrants) representing 27.61% per cent respectively of the issued capital on a fully diluted basis. If all of these Warrants were to be exercised a further amount of Pounds Sterling 1.41 million would be raised for the Company.

Lock-in Arrangements

As at the date of Admission, the Directors are interested in 21,982,437 Ordinary Shares representing 58.83 per cent of the currently issued share capital of the Company.

Each of Abby Hardoon Adulayavichit, Robert Khalastchy and Julie Ann Joyce have undertaken that, save in limited circumstances or otherwise with the prior written consent of Loeb Aron & Co. and the Company, they will not (and will procure, in so far as they are able, that any person with whom they are connected for the purposes of Section 346 of the Act will not) during a period of twelve months from Admission, dispose of any interest in Ordinary Shares or Warrants held by them on Admission or acquired by them over the following twelve months.

Risk Factors

The attention of potential investors is drawn to the fact that the purchase of Ordinary Shares in the Company involves a variety of risks. Investors should be aware of the risks associated with an investment in a business in the early stages of development. All potential investors should carefully consider the entire contents of the Admission Document including, but not limited to, the factors described below before deciding whether or not to invest in the Company. The information below does not purport to be an exhaustive list or summary of the risks affecting the Company and are not set out in any particular order of priority. There may be additional risks of which the Directors are not aware. Investors should consider carefully these risks before making a decision to invest in the Company.

If any of the events described in the following risks actually occur, the Company's business, financial condition, results or future operations could be adversely affected. In such a case, the price of the Ordinary Shares could decline and investors may lose all or part of their investment. Additional risks and uncertainties not presently known to the Directors, or which the Directors currently deem immaterial, may also have an adverse effect upon the Company.

- The success of the Company depends largely upon the expertise of the executive Directors and the senior employees and their ability to develop the Company's intended business activities profitably. The loss of one or more of the executive Directors or their inability to develop the business of the Company would have an adverse effect on the Company and its viability; whilst the Company has entered into contractual arrangements with the aim of securing the services of these personnel, the retention of their services cannot be guaranteed. Accordingly, the loss of any key management of the Company may have an adverse effect on the future of its business.

- The Company's future success will also depend, inter alia, on its future directors and management team. The recruitment of suitably skilled directors and retention of their services or the services of any future management team cannot be guaranteed.

- The Ordinary Shares are not listed or traded on any stock exchange. Notwithstanding the fact that an application will be made for the Ordinary Shares to be traded through PLUS Markets this should not be taken as implying that there will be a "liquid" market in the Ordinary Shares. An investment in the Ordinary Shares may thus be difficult to realise. The value of the Ordinary Shares may go down as well as up. Investors may therefore realise less than their original investment, or sustain a total loss of their investment.

- Continued admission to the PLUS Markets is entirely at the discretion of PLUS Markets Plc.

- PLUS Markets is not AIM or the Official List. Consequently, it may be more difficult for an investor to sell his or her Ordinary Shares and he or she may receive less than the amount paid. The market price of the Ordinary Shares may not reflect the underlying value of the Company's net assets or operations.

- The share prices of public companies are often subject to significant fluctuations. In particular, the market for shares in smaller public companies is less liquid than for larger public companies. Consequently, the Company's share price may be subject to greater fluctuation and the Ordinary Shares may be difficult to sell.

- It is likely that the Company will need to raise further funds in the future, either to complete a proposed acquisition or investment or to raise further working or development capital for such an acquisition or investment. There is no guarantee that the then prevailing market conditions will allow for such a fundraising or that new investors will be prepared to subscribe for Ordinary Shares at the same price as the Offer Price, or higher. Shareholders may be materially diluted by any further issue of Ordinary Shares by the Company.

- No application is being made for the admission of the Ordinary Shares to the Official List of the UK Listing Authority or to trading on AIM. The rules of the PLUS Markets are less demanding than those of the Official List or AIM.

- Any changes to the regulatory environment, in particular the PLUS Markets Rules regarding companies such as the Company, could for example, affect the ability of the Company to maintain a trading facility on PLUS Markets.

- The Company's business may be adversely affected by the introduction of new legislation, amendments to existing legislation by the UK government or the interpretation of those laws by the UK government which could impact adversely on the assets, operations and ultimately the financial performance of the Company.

- The operations of the Company may be disrupted by a variety of risks and hazards which are beyond the control of the Company. No assurance can be given that the Company will be able to obtain insurance coverage at reasonable rates (or at all), or that any coverage it obtains will be adequate and available to cover any such claims.

- The Group may face significant competition, including from competitors who may have greater resources than the Group. There can be no guarantee that the Group will be able to compete successfully in such a marketplace and therefore no guarantee that the Group will be able to grow sales and maintain profit margins in the future.

- The future success of the Group is highly dependant on the continued growth in the use of the internet. There is no assurance that the growth of the internet will continue, or that the demand for the Group's products and services will be in line with such growth or in line with the Group's expectation.

- Although the Directors of the Group are confident that their products and services are attractive to the internet market, there is no assurance that any of the products and services or any new products and services the Group may develop will be accepted by the internet market in the future.

- Rapid technological developments, evolving industry standards and changes in customer demand and expectation characterises the internet. The future success of the Group will depend on a number of factors, including its ability to continually improve its products and services, as well as responding to changes in demand and expectations of the internet.

The investment opportunity offered in the Admission Document may not be suitable for all recipients of the Admission Document. Investors are therefore strongly recommended to consult an adviser authorised under FSMA, who specialises in investments of this nature before making their decision to invest.

Substantial Shareholdings

Following Admission Abby Hardoon will be interested in 21,657,437 Ordinary Shares (58.11% of the issued share capital).

The Directors of the Company accept responsibility for the content of this announcement.

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