Proposed Subscription, Capital Reorg & GM Notice

The information contained within this announcement is deemed by CloudCoCo 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. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

10 March 2026

CloudCoCo Group plc

("CloudCoCo", the "Company" or the "Group")

Proposed Equity Fundraising to accelerate growth, Capital Reorganisation

and Notice of General Meeting

CloudCoCo (AIM: CLCO), the Sheffield-based e-commerce and IT procurement group delivering tailored, next-day IT solutions through its Systems Assurance and MoreCoCo divisions, announces its intention to raise approximately £0.275 million, alongside a proposed Capital Reorganisation to amend the nominal value of the Company's existing ordinary shares, subject to, inter alia, Shareholder approval at the forthcoming General Meeting.             

Highlights

·    Proposed raise of £0.275 million of growth capital to launch Project Brightstar, a strategic initiative to enhance the Group's position in the B2B market by leveraging its established digital commerce and IT procurement capabilities.

·    Proposed investment from the Chairman of £0.21 million.

·    Accelerated revenue growth strategy targeting growth beyond the Group's combined initial revenue objective of at least £15 million within three years, driven by expanded B2B engagement, improved direct customer acquisition and growth in higher-value revenue streams with a focus on mid-sized enterprises.

·    Margin and scalability enhancement programme underway, focused on increasing direct and alternative e-commerce marketplace sales and investing in automation and AI-enabled tools to support increased transaction volumes with minimal incremental headcount.

·    A circular with details of the Proposals and notice of a General Meeting to be held on 27 March 2026 will be sent to Shareholders tomorrow (the "Circular") and will be available on the Company's website tomorrow.

Simon Duckworth, Non-Executive Chairman, commented:

"The proposed growth capital raise for Project Brightstar marks a clear step forward in enhancing our B2B strategy and demonstrates my continued commitment to, and confidence in the business.

By leveraging our established digital commerce and IT procurement capabilities, we will target mid-sized enterprise customers with higher-value, integrated solutions designed to accelerate revenue growth and improve margin quality.

With FY25 revenues from the existing business expected to reach at least £8.0 million, exiting the year at an annualised run-rate approaching £10 million, Project Brightstar provides a structured pathway towards achieving our enhanced revenue aspirations over the next three years. Importantly, we are scaling from an existing platform, investing in new sales channels and automation to drive operating leverage while maintaining financial discipline.

We believe this initiative strengthens the Group's competitive position and underpins sustainable, long-term shareholder value."

DETAILS OF THE PROPOSALS

1.    Introduction

The Company today announces that it proposes to raise £275,000 (before expenses) by way of a subscription of 229,166,666 New Ordinary Shares at 0.12 pence per share to fund a new growth initiative.  In order to complete the Subscription, the Company also announces the proposed Capital Reorganisation and its intention to establish a new Employee Option Scheme.

The Company's Existing Ordinary Shares had a mid-market closing price of 0.115p per share at the close of business on 9 March 2026, but have a nominal value of 1 penny per share and under the Companies Act, the Company is unable to issue new shares at less than the nominal value of those shares. In order to implement the Subscription, given that the Subscription Price is set at 0.12 pence per share (being a premium of approximately 4 per cent. to the mid-market closing price of an Ordinary Share on 9 March 2026 and a premium of approximately 5 per cent. to the 10 day VWAP to 9 March 2026), the Company is required to undertake the Capital Reorganisation (details of which are set out in paragraph 5 below), so that the nominal value of each New Ordinary Share to be issued pursuant to the Subscription will be less than the Subscription Price. The Capital Reorganisation is subject to the passing of the Resolutions at the General Meeting.

As a result of the Capital Reorganisation, the Board is proposing to (i) renew its general authorities under sections 551 and 571 (respectively) of the Companies Act, to allot Ordinary Shares and to disapply statutory pre-emption rights in respect of such allotments and (ii) seek authority to allot the Subscription Shares.

These matters will require the approval of Shareholders and accordingly, the Proposals are conditional, inter alia, on the passing of the Resolutions at the General Meeting. The General Meeting has been convened for 10.00 a.m. on 27 March 2026 and will take place at the offices of DAC Beachcroft LLP, The Walbrook Building, 25 Walbrook, London EC4N 8AF for the purpose of seeking such approvals. A notice convening the General Meeting, at which the Resolutions will be proposed, is set out at the end of the Circular.

The proposed new Employee Option Scheme is also detailed in paragraph 4 below and will be put to Existing Shareholders at the General Meeting by Resolution 8.

2.    Background to and reasons for the proposals

The Board is now pleased to present the Proposals to Shareholders in order to fund the Company's growth initiative, Project Brightstar, and accelerate the Board's strategy for the Group's transition towards sustainable, long-term profitability.

While the Group has made good progress, the Board recognises that the current trading scale remains modest relative to the fixed costs of maintaining the Company's AIM admission.

To eliminate residual cash burn and reach consistent monthly cash generation, the Board has identified a strategic pathway which it believes could achieve and surpass its initial £10 million annual revenue target, ultimately with further upside towards £15 million annual revenue within three years at improved blended margins.

The Board believes that relying solely on organic cash generation may delay achieving this scale within the desired timeframe. Accordingly, the Company proposes to raise £275,000 via the Subscription to fund Project Brightstar.

Project Brightstar is the Board's strategic initiative to enhance the Group's position in the B2B market, with the recruitment of an identified experienced sales team and by leveraging the digital commerce and IT procurement capabilities developed within the Group to deliver scalable technology solutions to mid-sized enterprise customers.    

The programme represents an enhancement of the Group's existing model - not a change in direction - building on the infrastructure, vendor relationships and operational capability established across the Group utilising the skills and network of the new recruits. It marks a deliberate move up the value chain, combining transactional IT supply with structured procurement frameworks, consultancy-led solutions and recurring service opportunities.

Project Brightstar is designed to:             

Grow and strengthen the Group's B2B presence, delivering IT hardware, structured procurement solutions and integrated technology services to mid-sized enterprise customers.

Accelerate top-line growth, driving revenues towards and beyond the £10 million target through improved direct engagement and expanded enterprise relationships.

Improve blended gross margins, by reducing reliance on high-fee third-party marketplaces (which currently represent approximately 91% of e-commerce revenue) and increasing direct website sales and utilisation of alternative marketplaces such as eBay, Tesco Marketplace and OnBuy.

Expand higher-value revenue streams, including the branded WebStore platform and consultancy-led IT procurement services, generating improved customer lifetime value and repeat revenue.

Enhance platform capability and operating leverage, through continued investment in automation and AI-enabled tools, enabling increased transaction volumes and enterprise onboarding with minimal incremental headcount.

Strategically, Project Brightstar positions the Group to evolve from parallel commerce and services activities into a more integrated, platform-enabled B2B technology partner. By combining digital procurement capability with technical expertise and structured customer engagement, the Board believes that the Group would be strengthening revenue visibility, improving margin quality and building a more scalable operating model capable of supporting sustained growth.

The Board considers that the Group is now in an optimal position to deploy some growth capital, having stabilised its balance sheet, removed legacy debt and established an efficient operating foundation.

If the Resolutions are not passed, the Subscription cannot proceed and nor can Project Brightstar as proposed. This would constrain the Group's ability to accelerate growth and fully absorb its PLC-level costs within the next 12 months. Accordingly, the Board believes that the Proposals are in the best interests of the Company and its Shareholders as a whole.

3.    The Subscription

The Subscription will result in the issue of 229,166,666 Subscription Shares at the Subscription Price (being a premium of approximately 4 per cent. to the mid-market closing price of an Ordinary Share on 9 March 2026 and a premium of approximately 5 per cent. to the 10 day VWAP to 9 March 2026) and raise £275,000 before expenses for the Company. The net proceeds of the Subscription receivable by the Company are estimated to be approximately £260,000. The Company intends to use these proceeds to fund Project Brightstar and pursue revenue growth as set out above.

The Subscription is being subscribed by three private investors as to £65,000 and the Chairman of the Company, Simon Duckworth, and his wife, Lady Caroline Duckworth, are proposing to subscribe for £125,000 and £85,000 respectively in the Subscription at the Subscription Price (the "Chairman's Subscription").

As the Company is currently in a close period pursuant to UK MAR until the publication of its audited results for the year ended 30 September 2025 (the "Results"), expected by 31 March 2026, the Directors and management of the Company are prohibited from acquiring shares in the Subscription at this time. However, Simon Duckworth and his wife have confirmed that following the publication of the Results by 31 March 2026, that they intend to subscribe for, in aggregate, 175,000,000 Subscription Shares at the Issue Price, subject to the passing of the Resolutions. Therefore, if the Subscription completes in full the shareholdings in the Company of Simon and Lady Duckworth will increase from an aggregate 3.25 per cent. to 21.16 per cent.

The Subscription Shares, when issued and fully paid, will represent 24.50 per cent. of the Enlarged Share Capital and will rank pari passu in all respects with the New Ordinary Shares and therefore will rank equally for all dividends or other distributions declared, made or paid after the issue of the Subscription Shares.

The issue of the Subscription Shares is conditional on, inter alia, the passing of the Resolutions at the General Meeting and Admission. The Subscription is not being underwritten by the Company's broker, Allenby Capital, or any other person.

Should the Resolutions not be passed at the General Meeting the Subscription will not proceed and this would constrain the Group's ability to accelerate growth and fully absorb its PLC-level costs within the required timeframe.

4.    New employee share option scheme

To ensure the successful execution of Project Brightstar and to attract and retain the high-calibre talent required to scale the Group towards its £15 million revenue target, the Board proposes the implementation of a new Employee Option Scheme. The Board proposes to implement a new Employee Option Scheme designed to align the interests of the Group's employees with those of Shareholders.

The Scheme is specifically designed to align the interests of the Group's employees with those of Shareholders. The overall pool of options proposed under the Scheme would represent 25 per cent. of the Enlarged Share Capital and the Board considers this amount is important to be available to attract and retain the high-calibre talent required to achieve the Board's strategy. While it is proposed that an initial tranche of 40 million options will be granted under the Scheme at the Subscription Price (0.12p), the vast majority of the remaining pool of options proposed to be available under the Scheme (c.147 million options) features a progressive exercise price target, as set out in the table below. This 'ratchet' mechanism also includes terms that participants only realise value as the Company hits strategic Trading EBITDA milestones over three years that drive the share price upward, with the final tier of options requiring an 81% premium over the current Subscription Price to be 'in the money' and capable of exercise.

Assuming full exercise of all Option Shares, the Company's issued ordinary share capital would increase to approximately 1,169,227,940 Ordinary Shares (assuming all of the Subscription Shares are allotted and no other Ordinary Shares in the Company are allotted), but with the Project Brightstar initiative the cumulative Trading EBITDA would have to exceed £1.9 million over the three-year period for the options to be exercised in full.

5.    Capital reorganisation

The Subscription Price is below the nominal value of the Existing Ordinary Shares. The Companies Act prohibits a company from issuing shares at a discount to the nominal or par value of its shares. Therefore, in order to ensure that the Proposals can be carried out, it is necessary to effect the Capital Reorganisation to change the nominal value of the Company's Existing Ordinary Shares. The Directors therefore propose to effect the Capital Reorganisation on the following basis:

·    each of the Existing Ordinary Shares of 1 penny each will be subdivided into and reclassified as one New Ordinary Share and one Deferred Share;

·    each New Ordinary Share will be an ordinary share in the capital of the Company with a nominal value of £0.0001 (0.01 pence) and having those rights set out in the Amended Articles (further details of which can be found below);

·    each Deferred Share will be a deferred share in the capital of the Company with a nominal value of £0.0099 (0.99 pence) and having those limited rights set out in the Amended Articles. The intention is that the Deferred Shares created pursuant to the Capital Reorganisation will be cancelled in due course following a court approved reduction of capital or other means, if available; and

·    the Existing Articles are amended to include certain new provisions relating to the Deferred Shares.

The Amended Articles

The proposed Capital Reorganisation will necessitate certain amendments to the Company's Existing Articles. The amendments are proposed in Resolution 1 as set out in the Notice of General Meeting and include creating the Deferred Shares and setting out the limited rights to be attached to such Deferred Shares.

The New Ordinary Shares created upon implementation of the Capital Reorganisation will have the same rights as the Existing Ordinary Shares including voting, dividend, return of capital and other rights, save that their nominal value will be 0.01 pence per share as opposed to 1 penny per share. The Capital Reorganisation will not change the number of Ordinary Shares that a Shareholder owns, only the nominal value. Existing Ordinary Share certificates will remain valid following the Capital Reorganisation and the New Ordinary Shares will have the same ISIN as the Existing Ordinary Shares.

The Deferred Shares will not have any voting rights and will not carry any entitlement to attend general meetings of the Company; nor will they be admitted to trading on AIM or any other market. They will carry only a right to participate in any return of capital on a winding up to the amount paid up on such shares, but only after holders of Ordinary Shares have together received the nominal amounts paid up on such shares. In addition, they will not carry any right to participate in any dividend or other distribution. In each case a payment, on a return of capital, to any one holder of Deferred Shares shall satisfy the payment required. The Company will be authorised at any time to effect a transfer of the Deferred Shares without reference to the holders thereof and for no consideration pursuant to and in accordance with the Companies Act. Accordingly, the Deferred Shares will, for all practical purposes, be valueless and it is the Board's intention, at an appropriate time, to have the Deferred Shares cancelled, whether through an application to the High Court of Justice in England and Wales or otherwise in accordance with the Companies Act. No share certificates will be issued for the Deferred Shares.

A draft of the Amended Articles, highlighting the amendments to the Existing Articles proposed by Resolution 1 as set out in the Notice of General Meeting, will be available for inspection by Shareholders at the General Meeting until the conclusion of the General Meeting and on the Company's website, www.cloudcoco.co.uk.

In summary, it is proposed that each Existing Ordinary Share of 1 penny in the capital of the Company will be subdivided and redesignated into one New Ordinary Share and one Deferred Share. This will result in 706,215,686 New Ordinary Shares and 706,215,686 Deferred Shares being in issue immediately following the Capital Reorganisation but before the issue of Subscription Shares pursuant to the Subscription.

6.    General meeting

The purpose of the General Meeting is to seek approval of Existing Shareholders for the Resolutions summarised below. The Proposals are conditional upon the passing of the Resolutions as set out in the Notice of General Meeting and summarised below.

At the General Meeting, Resolutions will be proposed to the following effect:

·    Resolution 1 is a special resolution to alter the Existing Articles of the Company with effect from 6.00 p.m. on the dealing day immediately prior to Admission to:

a)    create the Deferred Shares;

b)    specify the rights attached to the Deferred Shares, including that the Deferred Shares:

-      will not have any voting rights;

-      will not carry any entitlement to attend general meetings of the Company;

-      will not carry any right to participate in any dividend or other distribution;

-      will carry only a right to participate in any return of capital on a winding up to the amount paid up on such shares, but only after holders of Ordinary Shares have together received the nominal amounts paid up on such shares;

c)    specify that, on a return of capital, payment to any one holder of Deferred Shares shall satisfy the payment required;

d)    specify that the Company will be authorised at any time to effect a transfer of the Deferred Shares without reference to the holders thereof and for no consideration pursuant to and in accordance with the Companies Act; and

e)    specify that certain steps taken by the Company (including for example a reduction of capital) will not be deemed to vary the rights attaching to the Deferred Shares.

Accordingly, the Deferred Shares will, for all practical purposes, be valueless and it is the Board's intention, at an appropriate time, to have the Deferred Shares cancelled, whether through an application to the High Court of Justice in England and Wales or otherwise in accordance with the Companies Act;

·    Resolution 2, which is conditional on the passing of Resolution 1, is a special resolution to sub-divide and redesignate each Existing Ordinary Share of £0.01 (1 penny) into (i) one New Ordinary Share of 0.01 pence and (ii) one Deferred Share of 0.99 pence;              

·    Resolution 3, which is conditional on the passing of Resolutions 1 and 2, is an ordinary resolution to authorise the Directors to allot shares up to an aggregate nominal value of £22,917, being equal to 229,166,666 New Ordinary Shares, pursuant to the Subscription but for no other purpose;        

·    Resolution 4, which is conditional on the passing of Resolutions 1 and 2, is an ordinary resolution to authorise the Directors to generally allot shares and to grant rights to subscribe for and convert securities into shares up to an aggregate nominal value of £31,179, representing one-third of the issued ordinary share capital of the Company immediately following Admission;   

·    Resolution 5, which is conditional on the passing of the Resolutions 1, 2 and 3, is a special resolution to authorise the Directors to allot equity securities pursuant to the authority granted under Resolution 3 on a non pre-emptive basis;       

·    Resolution 6, which is conditional on the passing of Resolution 2, is a special resolution to cancel the Deferred Shares created under Resolution 2, subject to the approval of the High Court of Justice in England and Wales;          

·    Resolution 7, which is separate to the Subscription, is a special resolution to authorise the Directors to allot equity securities for cash (within the meaning of section 560 of the Companies Act) up to an aggregate nominal amount of £18,708 (representing 20% of the issued ordinary share capital of the Company immediately following Admission) pursuant to the authority granted under Resolution 4 on a non pre-emptive basis; and

·    Resolution 8 is an ordinary resolution to approve the adoption of the Company's new Employee Option Scheme.

Irrevocable undertakings

Darron Giddens and Simon Duckworth have given irrevocable undertakings to the Company to vote in favour of the Resolutions to be proposed at the General Meeting (and, where relevant, to procure that such action is taken by the relevant registered holders if that is not one of them) in respect of their beneficial holdings totalling, in aggregate, 18,753,846 Ordinary Shares, representing approximately 2.66 per cent. of the issued ordinary share capital.

In addition, certain other Shareholders have given irrevocable undertakings to the Company to vote in favour of the Resolutions to be proposed at the General Meeting (and, where relevant, to procure that such action is taken by the relevant registered holders if that is not one of them) in respect of their beneficial holdings totalling, in aggregate, 361,072,727 Ordinary Shares, representing approximately 51.13 per cent. of the issued ordinary share capital.

In aggregate, the Company has received irrevocable undertakings to vote in favour of the Resolutions in respect of 379,826,573 Ordinary Shares, representing approximately 53.78 per cent. of the issued ordinary share capital.

7.    Admission

Subject to, inter alia, the Existing Shareholders' approval of the Resolutions, application will be made to the London Stock Exchange for the New Ordinary Shares (including the Subscription Shares) to be admitted to trading on AIM. Assuming that the Resolutions are passed at the General Meeting, it is anticipated that Admission will become effective and that dealings in the New Ordinary Shares (including the Subscription Shares) will commence on AIM at 8.00 a.m. on or around 30 March 2026. 

8.    Recommendation

The Directors consider that the Proposals and the Resolutions are in the best interests of the Company and would promote the success of the Company for the benefit of its Shareholders as a whole. Accordingly, the Directors unanimously recommend that Existing Shareholders vote in favour of the Resolutions to be proposed at the General Meeting as they and their immediate families and connected persons (within the meaning of section 252 of the Companies Act) intend to do in respect of their aggregate holdings of 229,166,666 Ordinary Shares representing approximately 32.4 per cent. of the Existing Ordinary Shares.

9.    Expected timetable of principal events

Note:

If any of the details contained in the timetable above should change, the revised time and dates will be notified to Shareholders by means of a Regulatory Information Service announcement. All references to times and dates in this announcement are to time and dates in London, United Kingdom.

*assuming that the Resolutions are passed.

10.  Definitions

Capitalised terms in this announcement have the meaning ascribed to them in the definitions section below, unless otherwise defined in this announcement.

Contacts:

About CloudCoCo

CloudCoCo is a streamlined, growth-focused technology group specialising in e-commerce and IT procurement business based in Sheffield. Combining expert IT procurement solutions through Systems Assurance with the scalable e-commerce capabilities of MoreCoCo (www.morecoco.co.uk), helping organisations deliver enhanced efficiency, security, and agility. Backed by strong vendor partnerships and a team of industry specialists, we deliver tailored solutions and next-day access to hundreds of thousands of IT products.            

www.cloudcoco.co.uk