New Option Schemes

Dianomi, a leading provider of native digital advertising services to premium clients in the Business, Finance and Lifestyle sectors, announces the cancellation of all options over ordinary shares of 0.2 pence each in the capital of the Company ("Options") issued at the time of the Company's IPO under its existing option schemes (the "IPO Option Plans") alongside the establishment of new option schemes (the "New Option Plans").

Background

At the time of the Company's IPO in May 2021, the IPO Option Plans were implemented in order to align, incentivise and retain employees in the Group and certain Directors. The Options granted at IPO under the IPO Option Plans were exercisable at the IPO price of £2.73 after the later of the third anniversary of the date on which they were granted and the satisfaction of the applicable performance condition.

Against a challenging market and macro-economic backdrop, Dianomi has underperformed financial forecasts for the previous and current financial year. To address the challenges it has faced, as previously announced, the Group has undertaken an organisational restructuring resulting in cost reductions and has focused its strategic initiatives to re-invigorate growth and profitability.

The Group's financial performance over the past and current year means the Options granted at IPO under the IPO Option Plans are unlikely to be exercised as the performance condition will not be met and strike prices are significantly above the Group's current share price.

Therefore the Group's Remuneration Committee and Board were of the view that the IPO Option Plans did not meet the three principles of its remuneration strategy (the "Remuneration Principles"), namely; alignment with shareholders, and incentivisation and retention of employees and have therefore cancelled the Options granted at IPO under the IPO Option Plans (the "Cancellation") and introduced the New Option Plans.

New Option Plans

Conscious that the reason that the Remuneration Principles are not being met is due to the Group's financial performance, in introducing the New Option Plans, the Remuneration Committee has sought to introduce areas of compromise to promote alignment and protect shareholder dilution. These measures include a reduction in quantum of options granted to individuals, and a principle that until financial performance recovers to IPO levels, there is no reward to participants.

Therefore, employees have been granted new Options under the New Option Plans representing 75% in number of the Options granted at IPO. Certain employees have been granted Options under the New Option Plans who did not previously hold Options under the IPO Option Plans. Prior to the Cancellation, the total number of Options in issue represented 5.5% of the issued share capital of the Company whereas the total Options in issue following the new Option grants represent 4.6%. Furthermore, under the New Option Schemes, the vesting period has been extended so that the new Options will vest in October 2026. Alongside the reduction to the number of Options granted and extension of the vesting period, the performance criteria have been amended as well as the exercise price which is 50 pence.

Certain Directors and persons discharging managerial responsibilities ("PDMRs") have been granted Options under the New Option Schemes as follows:

Michael Kelly, Non-Executive Chairman of the Company, whose Options have been cancelled along with all Options granted at IPO, declined to be granted new Options under the New Option Plans and as such no longer holds any Options.

Rupert Hodson, Chief Executive Officer, has also not been granted Options under the New Option Plans and does not hold any Options.

Chair of Remuneration Committee and Non-Executive Chairman of Dianomi, Michael Kelly, commented: "Whilst the business has been through a period of underperformance, we believe that the New Option Schemes strike the right balance between re-incentivising employees to drive shareholder value creation, whilst putting in place appropriately stretching performance criteria and other protections to ensure alignment with shareholders and mitigate the risk of rewarding underperformance. Our experienced leadership team and the wider talent base across the Group are the key to our success and it is therefore essential that we retain, motivate and strengthen the team over the next three years."

Aggregate volume of 467,033 options cancelled of at a price of £2.73

Aggregated volume

Aggregate volume of 467,033 options granted of at a price of £0.50

Price

• Date of the transaction 3 November 2023
• Place of the transaction Outside a trading venue