Proposed Secondary Placing of Existing Shares

IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN MAR) WERE TAKEN IN RESPECT OF CERTAIN MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION, AS PERMITTED BY MAR. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

Fonix Mobile PLC

("Fonix", or the "Company")

Proposed Secondary Placing of not less than 4,444,444 Existing Ordinary Shares in the Company

Fonix Mobile plc (AIM:FNX), the mobile payments and messaging company, announces that it has been informed by certain Directors, shareholders and employees of the Company of their intention to sell, in aggregate, not less than 4,444,444 ordinary shares of 0.01 pence each ("Ordinary Shares") in the capital of Company (the "Placing Shares") at a price of 225 pence per Placing Share (the "Placing") in order to satisfy strong institutional demand.

Each of Ganton Limited (an investment vehicle of William Neale, Founder and Non-Executive Director), Robert Weisz (Chief Executive Officer) and Starnevesse Limited (an investment vehicle of Richard Thompson), who together as the selling shareholders (the "Selling Shareholders") intend to participate in the Placing.

Following a series of meetings with both new and existing institutional investors, it became apparent that demand for the Ordinary Shares was in excess of those readily available for sale. The Selling Shareholders recognise the strategic importance of a strong and supportive institutional shareholder base, and have therefore decided to release a portion of their own holdings in order to help satisfy this demand.

Further to the above, an independent committee of the board (being the directors of the Company other than William Neale and Robert Weisz, the "Independent Directors") has indicated a possible interest on the Company's part to make on market purchases in the Placing of up to 1,000,000 Placing Shares under the Company's existing buyback authority granted at the Company's Annual General Meeting held on 14 November 2023 (the "Buyback"). Given the Company has limited opportunity to deploy some of the Company's excess capital through a buyback without triggering the need for a Whitewash under the Takeover Code, given the Concert Party (as defined in the Company's Admission Document) holds more than 30% of the issued share capital, the Company has indicated that it intends to participate in the Placing. For the avoidance of doubt, the shareholding of the Concert Party will not increase as a result of either the Placing or the Buyback. Cavendish Capital Markets Limited ("Cavendish") is acting as sole bookrunner ("Bookrunner") in relation to the Placing.

The sale of the Placing Shares will be effected by way of an accelerated bookbuild to institutional investors which will be launched immediately following this announcement (the "Bookbuild"). Cavendish will determine the amount of Placing Shares each of the Selling Shareholders will sell as part of the Placing.

Any participation by the Company in the Placing would fall to be a related party transaction for the purpose of Rule 13 of the AIM Rules for Companies. The Independent Directors, having consulted with Cavendish, the Company's Nominated Adviser, consider the terms of this transaction to be fair and reasonable insofar as the Company's shareholders are concerned. A further announcement will be made if and when appropriate.

A further announcement noting the number of Placing Shares sold by and subsequent holdings of the Selling Shareholders some of whom are also Directors or PDMRs of the Company will be made following completion of the Bookbuild.

The timing for the close of the Bookbuild and the distribution of allocations will be at the absolute discretion of Cavendish.

Information to Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of (a) retail investors, (b) investors who meet the criteria of professional clients and (c) eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Cavendish will only procure investors who meet the criteria of professional clients and eligible counterparties.