Proposed Fundraising

TERMS NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS GIVEN IN THE SECTION ENTITLED "DEFINITIONS" OF THIS ANNOUNCEMENT.

PENNANT INTERNATIONAL GROUP PLC

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

Proposed Fundraising

Pennant International Group plc (AIM:PEN), the systems support and training solutions company, announces a proposed Fundraising, comprising a Placing, Subscription and, potentially, a Directors' Intended Subscription, to raise a minimum of approximately £1.51 million (before expenses) through the issue of new Ordinary Shares, assuming completion of the Directors' Intended Subscription. The net proceeds from the Fundraising will provide additional working capital to support inter alia the development of the Company's proprietary software suite. The proposed Issue Price is 25 pence per Ordinary Share.

Cavendish is acting as sole broker in connection with the Placing. The Placing will be conducted by way of an accelerated bookbuild, which will be launched immediately following this Announcement, in accordance with the terms and conditions set out in the Appendix to this Announcement.

Transaction Highlights

• Placing and Subscription with new and existing investors to raise gross proceeds of a minimum of approximately £1.31 million, assuming the Directors' Intended Subscription completes.
• In addition to the Placing and Subscription, the Company's management team intend to subscribe for, in aggregate, £200,000 through the issue of the Directors' Subscription Shares. As the Company is currently in a closed period under MAR until the publication of its final results for the period ended 31 December 2023 ("FY23 Results"), the Directors are not permitted to deal in the Company's shares until after publication of the FY23 Results (and subject to each not being in possession of any other unpublished price sensitive information at such time). Assuming the Directors' Intended Subscriptions proceeds, the Company will apply for admission of the relevant Directors' Subscription Shares to trading on AIM separately and to take effect following the admission of the Placing Shares and Subscription Shares.
• The Issue Price represents a discount of approximately 16 per cent. to the closing mid-market price of an Ordinary Share of 29 pence on 22 May 2024 (being the latest practicable date prior to the publication of this Announcement).
• The net proceeds of the Fundraising will be used inter alia to provide further working capital, including to support the development and marketing of Pennant's proprietary software suite.

Completion of the Placing, Subscription and Admission is expected to take place on or around 31 May 2024. A further announcement will be made in relation to the Directors' Intended Subscription (whether or not it proceeds) in due course.

Accelerated Bookbuild

The timing for the close of the accelerated bookbuild and allocation of the Placing Shares shall be at the absolute discretion of Cavendish, in consultation with the Company. The final number of Placing Shares to be issued pursuant to the Placing will be agreed by Cavendish and the Company at the close of the accelerated bookbuild. The result of the Placing will be announced as soon as practicable thereafter. The Placing is not underwritten.

The Company announces that it is seeking to raise a minimum of approximately £1.51 million (before expenses) by way of the Fundraising, comprising the Placing, Subscription and Directors' Intended Subscription, assuming the Directors Intended Subscription completes. The net proceeds of the Fundraising will be used, inter alia, to provide further working capital to support the development and marketing of Pennant's proprietary software suite.

As the Company is currently in a closed period under MAR until the publication of its FY23 Results, the Directors are not permitted to subscribe for new Ordinary Shares until after publication of the FY23 Results (and subject to each not being in possession of any other unpublished price sensitive information at such time). Any such subscription is, in any case, not expected to take place until after the Company's upcoming Annual General Meeting (as it is contemplated that any Directors' Subscription Shares will be issued pursuant to fresh authorities approved by the Shareholders at that meeting). Assuming that the Directors' Intended Subscription proceeds as contemplated, the Company will, therefore, apply for admission of any Directors' Subscription Shares to trading on AIM separately, to take effect following admission of the Placing Shares. Further announcements will be made in respect of the Annual General Meeting and Directors' Intended Subscription in due course.

The Placing Shares and Subscription Shares (which do not include the Directors' Subscription Shares that are expected to be issued post Admission), represent approximately 14.3 per cent. of the Existing Ordinary Shares, and approximately 12.5 per cent. of the Enlarged Share Capital (assuming that the minimum number of Placing Shares are subscribed for).

Admission of the Placing Shares and Subscription Shares is expected to occur at 8.00 a.m. on 31 May 2024 (or such later time and/or date as Cavendish and the Company may agree, not being later than the Longstop Date). A further announcement will be made regarding admission to trading on AIM of the Directors' Subscription Shares. The Placing Shares, Subscription Shares and Directors' Subscription Shares will rank pari passu in all respects with the Existing Ordinary Shares and will rank in full for all dividends and other distributions declared, made or paid on the new Ordinary Shares after the relevant Admission.

Background to and reasons for the Fundraising

Pennant provides systems support and training solutions to defence departments and major original equipment manufacturers ("OEMs") worldwide, maximising operational and maintenance effectiveness. Its aspiration in the medium term is to generate revenues in excess of £30 million globally with c.75 per cent. being recurring revenues and to achieve operating margins of 30 per cent.

In recent years, the Group has made significant progress in transitioning to a software and service-led business and away from manufacturing and hardware revenues, with the proportion of software and services revenue having grown from c.45 per cent. in FY17A to over 60 per cent. in FY23E. As the Company pivots its operations toward software and services, and the quality of its earnings improves, the Board would expect the market to value those earnings more highly than Pennant's other revenues.

As recently announced, the Group's programme of investment into its proprietary software suite is moving into its next phase, which will see all three of Pennant's core applications - GenS, Analyzer and R4i - being integrated into one, holistic solution which will provide its customers in defence and other sectors with a powerful, market-leading toolset to manage, model and utilise vast amounts of complex equipment data. The planned investment for 2024 is expected to be similar in quantum to 2023, being approximately £1.3 million. This 'integrated suite' is targeted for launch by year-end, and marketing and early engagement with key customers has been ongoing since 2022.

The Fundraising will enable to the Company to continue to finance this strategic software development through to completion and marketing, accelerating relevant workstreams where possible.

Current trading

The Company recently announced that trading in the year to date has been in line with the Board's expectations although the Group has incurred exceptional, non-recurring costs of circa £0.3 million in relation to aborted corporate activity.

Management's assessment is that the Group's key markets are starting to see a significant increase in activity, and in response to customer tenders and requests for proposals, the Group has quoted on over £32 million of new business opportunities during the last six months (spanning the entire spectrum of the Group's product and services offering).

That said, the expected level of order conversion has not occurred in the year to date, which is primarily attributable to extended customer procurement timeframes, not the loss of opportunities. While challenging in the short term, it is not unusual for the acquisition of training and support solutions to be finalised after the commencement of the main vehicle/platform purchase.

The Group is continuing to actively progress several material sales prospects with the expectation that these are now likely to crystallise into new orders in the second half of the year. The timing and quantum of these potential awards remains subject to contract and, in certain cases, the completion of processes at defence department and prime contractor level. In the meantime, the Group is actively managing its allocation of resources, for example since the start of the year, giving notice to exit two premises which are not expected to be needed to deliver the pipeline opportunities.

Use of proceeds

As set out above, the minimum net proceeds from the Fundraising, expected to be approximately £1.4 million assuming the Directors' Intended Subscription completes, will provide working capital to support inter alia the Group's next phase of its investment programme that will see all three of Pennant's core applications - GenS, Analyzer and R4i - being integrated into one, holistic solution.

The terms of the Fundraising

The Placing

The Company is seeking to raise a minimum of approximately £0.91 million (before expenses) by way of a placing of a minimum of 3,655,644 new Ordinary Shares at a price of 25 pence per share pursuant to the Placing Agreement. The Placing Shares have been conditionally placed with institutional investors and certain existing shareholders of the Company. The Placing is not being underwritten. Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM.

The Issue Price was determined having regard to market conditions at the time the Placing Agreement was entered into. The closing mid-market price on AIM on the trading day prior to this Announcement of the Placing was 29 pence and the Issue Price therefore represents a 16 per cent. discount to that price. The Directors believe that the Issue Price is fair and reasonable insofar as Shareholders are concerned.

The Placing is conditional, inter alia, on the following:

• the Placing Agreement not having been terminated prior to Admission and becoming unconditional in all respects; and
• Admission having become effective.

Admission is expected to occur at 8.00 a.m. on 31 May 2024 (or such later time and/or date as Cavendish and the Company may agree, not being later than the Longstop Date).

The Subscription

The Company has also entered into a Subscription Letter with Brett Gordon, an existing Shareholder, in relation to the Subscription to purchase 1,600,000 Subscription Shares at the Issue Price. The Subscription Letter agreements contain customary conditions. The Subscription Shares are expected to be issued alongside the Placing Shares on Admission.

Change of adviser

The Company announces that it has appointed Cavendish Capital Markets Limited as its sole broker with immediate effect. WH Ireland continues to act as the Company's Nominated Adviser.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

2024

All references to time in this Announcement are to London time, unless otherwise stated.

FUNDRAISING STATISTICS

• Assumes that the minimum number of Placing Shares are issued and that no other Ordinary Shares are issued following the date of this Announcement prior to Admission.

DEFINITIONS

APPENDIX

No prospectus

Details of the Placing Agreement and the Placing Shares

Cavendish has today entered into a Placing Agreement with the Company under which, on the terms and subject to the conditions set out in the Placing Agreement, Cavendish, as agent for and on behalf of the Company, has agreed to use its reasonable endeavours to procure placees for the Placing Shares at the Issue Price.

Application for admission to trading

Subject to the fulfilments of the Conditions of the Placing (as set out below), it is expected that Admission will take place no later than 8.00 a.m. on 31 May 2024 and that dealings in the Placing Shares on AIM will commence at the same time.

Principal terms of the Placing

3 The Issue Price per Placing Share is 25 pence and is payable to Cavendish as agent of the Company by all Placees.

4 Subject to the Company's final approval, each Placee's allocation is determined by Cavendish following consultation with the Company and has been or will be confirmed orally by Cavendish, as applicable, and a form of confirmation will be dispatched as soon as possible thereafter. That oral confirmation will give rise to an irrevocable, legally binding commitment by that person (who at that point becomes a Placee), in favour of Cavendish and the Company, under which it agrees to acquire the number of Placing Shares allocated to the Placee at the Issue Price and otherwise on the terms and subject to the conditions set out in this Appendix and in accordance with the Articles. Except with the prior written consent of Cavendish, such commitment will not be capable of variation or revocation at the time at which it is submitted.

5 Each Placee's allocation and commitment will be evidenced by a form of confirmation issued to such Placee by Cavendish. The terms of this Appendix will be deemed incorporated in that form of confirmation.

Registration and Settlement

Settlement of transactions in the Placing Shares (ISIN: GB0002570660) following Admission will take place within the CREST system, subject to certain exceptions. Settlement through CREST is expected to take place on 31 May 2024 unless otherwise notified by Cavendish and Admission is expected to occur no later than 8.00 a.m. on 31 May 2024 unless otherwise notified by Cavendish. The deadline for Placee to input instructions into CREST is 4.00 pm on 29 May 2024. Settlement will be on a delivery versus payment basis. However, in the event of any difficulties or delays in the admission of the Placing Shares to CREST or the use of CREST in relation to the Placing, the Company and Cavendish may agree that the Placing Shares should be issued in certificated form. Cavendish reserves the right to require settlement of the Placing Shares, and to deliver the Placing Shares to Placees, by such other means as it deems necessary if delivery or settlement to Placees is not practicable within the CREST system or would not be consistent with regulatory requirements in a Placee's jurisdiction.

Conditions of the Placing

Cavendish's obligations under the Placing Agreement are, and the Placing is, conditional upon, inter alia:

1 Admission taking place not later than 8.00 a.m. on 31 May 2024 or such later date as is agreed in writing between the Company and Cavendish, but in any event not later than the Long Stop Date;

3 there not occurring, in Cavendish's opinion (acting in good faith), a Material Adverse Change;

Termination of the Placing

1 any of the warranties in the Placing Agreement were, when given, materially untrue, inaccurate, or misleading; or

2 the Company fails or is unable to comply with its obligations under the Placing Agreement; or

3 any statement contained in the Placing Documents (as defined in the Placing Agreement) has become or been discovered to be materially untrue, inaccurate or misleading or there has been a material omission therefrom; or

4 a matter, fact, circumstance or event has arisen such that in the opinion of Cavendish (acting in good faith) a supplementary press announcement is required to be released; or

5 in Cavendish's opinion (acting in good faith), a Material Adverse Change has occurred.

Restrictions on issues of shares and other securities by the Company

The Company has undertaken to Cavendish that, during the period ending on the later of (i) 180 days after the date of Admission, and (ii) publication of the unaudited results of the Company for financial period ending 30 June 2024, it will not without the prior consent of Cavendish (such consent not to be unreasonably withheld, delayed or conditioned) allot or issue, or enter into any agreement or arrangement which would give rise to an obligation or an increased obligation (in each case whether contingent or otherwise) to allot or issue, any share or any instrument or security convertible into a share in the capital of the Company (save for the potential allotment and issue of certain new ordinary shares in the capital of the Company which Cavendish has consented to in the Placing Agreement or the issue of shares or the grant and exercise of options pursuant to any option schemes, agreements and arrangements disclosed in the Publicly Available Information).

Representations, warranties and further terms

3 the Ordinary Shares are admitted to trading on AIM, and that, in addition to complying with its obligations pursuant to MAR, the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules, which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;

11 the Placing is not conditional on the Subscription

13 it and/or each person on whose behalf it is participating:

has fully observed such laws and regulations;

14 it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are subscribed will not be, a resident of, or with an address in, or subject to the laws of, the United States, Australia, Canada, Japan, New Zealand, the Republic of South Africa or Hong Kong and it acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of the United States, Australia, Canada, Japan, New Zealand, the Republic of South Africa or Hong Kong and may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;

26 if it is within the United Kingdom, it and any person acting on its behalf (if within the United Kingdom) is a person of a kind described in: (a) Article 19(5) (Investment Professionals) and/or 49(2) (High net worth companies etc.) of the FSMA (Financial Promotion) Order 2005, as amended, and/or an authorised person as defined in section 31 of FSMA; and (b) section 86(7) of FSMA ("Qualified Investor"), being a person falling within Article 2(e) of the UK Prospectus Regulation. If it is within a member state of the EEA, it is a Qualified Investor as defined in Article 2(e) of the Prospectus Regulation. For such purposes, it undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;

36 in order to ensure compliance with the Regulations, either Cavendish (for itself and as agent on behalf of the Company) or the Company's registrars may, in their absolute discretion, require verification of its identity. Pending the provision to Cavendish or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at Cavendish's absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed at either Cavendish's or the Company's registrars', as the case may be, absolute discretion. If within a reasonable time after a request for verification of identity, Cavendish (for itself and as agent on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, Cavendish and/or the Company may, at their absolute discretion, terminate their commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;

42 time is of the essence as regards its obligations under this Appendix;

44 the Placing Shares will be issued subject to the terms and conditions of this Appendix; and

45 these terms and conditions in this Appendix and all documents into which this Appendix is incorporated by reference or otherwise validly forms a part and/or any agreements entered into pursuant to these terms and conditions and all agreements to acquire shares pursuant to the Placing will be governed by and construed in accordance with English law and it submits to the exclusive jurisdiction of the English courts in relation to any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or Cavendish in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.

References to time in this Announcement are to London time, unless otherwise stated.

All times and dates in this Announcement may be subject to amendment.