OpSec Security : Placing and Open Offer

 The Company today announces that it proposes to raise approximately £7.0 million before expenses through a conditional Placing and Open Offer (the "Capital Raising") of 21,212,121 New Ordinary Shares at a price of 33 pence per New Ordinary Share (the "Issue Price").

 The Issue Price represents a 5.7 per cent. discount to the closing middle market price of 35 pence per Existing Ordinary Share on 28 March 2014, being the last business day before the date of this announcement.

 The New Ordinary Shares have been conditionally placed at the Issue Price with Orca Holdings Limited (as to 14,141,414 New Ordinary Shares) and Herald Investment Trust plc (as to 7,070,707 New Ordinary Shares), subject to clawback in respect of valid acceptances received in respect of the Open Offer.

 The Company is making available up to 12,121,212 of the New Ordinary Shares to Qualifying Shareholders under the Open Offer at the Issue Price, enabling Qualifying Shareholders to participate in the Capital Raising. Qualifying Shareholders may subscribe for New Ordinary Shares on the basis of 5 New Ordinary Shares for every 33 Existing Ordinary Shares held on the Record Date. Shareholders subscribing for their full entitlement under the Open Offer may also request additional New Ordinary Shares up to 100 per cent. of their Open Offer Entitlement through the Excess Application Facility.
 The Placing and Open Offer are each conditional, inter alia, on the passing of the Resolution by Shareholders at the General Meeting of the Company to be held at 12 noon on 17 April 2014. A Circular setting out details of the Capital Raising and a notice of General Meeting, accompanied by an Application Form (if applicable) is expected to be posted to Shareholders today. Copies of the Circular will be available for a period of 12 months from the date of the Circular on the Company's website www.opsecsecurity.com, free of charge in accordance with the requirements of Rule
26 of the AIM Rules for Companies.

 If the Resolution is passed, the New Ordinary Shares are expected to be allotted, conditionally on Admission, on the date of the General Meeting. It is expected that Admission will become effective and that dealings for normal settlement in the New Ordinary Shares will commence at 8.00 a.m. on 22 April 2014.

 The Company also announces that it has signed an amendment to its facilities with JP Morgan Chase, conditionally upon completion of the Capital Raising, which resets the amortisation schedule of the remaining balance due to the bank and resets the financial covenants. Upon completion of the Capital Raising the Company will be in compliance with all of its obligations under the amended JP Morgan Debt Facility.

As reported in the Interim Results, the Group is starting to see the benefits of the significant investment it has already made in its sales and marketing activities with increased levels of new business being secured. It was also reported that agreement had been reached on a formal shutdown arrangement with the union representing the Robbinsville employees.
The Directors believe that the successful on-boarding of the new business secured and the rationalisation of the Group's operating facilities should, when completed, have a positive impact on Group profitability. In order to be able to pursue these opportunities, the Directors consider it to be in the Company's best interests to strengthen its balance sheet through the Capital Raising.

The Company released its Interim Results on 20 December 2013. Since that date the Group has continued to trade in line with the Directors' expectations as set out in the Interim Results. The Interim Results set out details of a technical breach of one of the financial covenants under the JP Morgan Chase Debt Facility set against the interim results to 30 September
2013. The Company subsequently announced, on 27 January 2014, that it had reached agreement with JP Morgan Chase NA on the forbearance of this technical breach.
On 28 March 2014 the Company signed an amendment to the JP Morgan Debt Facility. The amendment, which is conditional upon completion of the Capital Raising, includes a $1.7 million repayment of the principal owing to JP Morgan Chase NA, resets the amortisation schedule of the remaining balance due over five years and resets the financial covenants relating to the JP Morgan Chase Facility. Upon completion of the Capital Raising the Company will be in compliance with all of its obligations under the amended JP Morgan Debt Facility.

The net proceeds of the Capital Raising, which are expected to amount to approximately £6.8 million, will be used, inter alia, to reduce the Company's borrowings, to pay the Accrued Dividend, to fund the rationalisation of the Group's manufacturing facilities, to fund certain product development and growth expansion initiatives and to provide further working capital for the Group.

Rationale for Capital Raising structure

The Directors have given consideration as to the best way to structure the proposed equity fundraising, having regard to current market conditions, the composition of the Company's shareholder register, the level of the Company's share price and the importance of pre- emption rights to Shareholders. After considering these factors, the Directors have concluded that the structure of the fundraising by way of the Capital Raising is the most suitable option available to the Company and its Shareholders as a whole. The Open Offer provides an opportunity for all Qualifying Shareholders to participate in the Capital Raising, and includes an Excess Application Facility enabling Qualifying Shareholders to apply for up to double their Open Offer Entitlement. However, the Open Offer is limited to 12,121,212 New Ordinary Shares, meaning that 9,090,909 New Ordinary Shares are not being offered to existing Shareholders under, and do not form part of, the Open Offer.

Further details of the Open Offer

Subject to the conditions set out in the Circular, Qualifying Shareholders are being given the opportunity to subscribe for up to 12,121,212 New Ordinary Shares at the Issue Price of 33 pence per share, pro rata to their holdings of Existing Ordinary Shares on the Record Date on the basis of:

Qualifying Shareholders are also being given the opportunity, provided that they take up their Open Offer Entitlement in full, to apply for Excess Shares up to the value of their Open Offer Entitlement through the Excess Application Facility. The number of Excess Shares for which each individual Shareholder may apply pursuant to the Excess Application Facility may not exceed his or her Open Offer Entitlement.
The Excess Application Facility will enable Qualifying Shareholders, provided that they take up their Open Offer Entitlement in full, to apply for Excess Open Offer Entitlements under the Excess Application Facility whereby such Qualifying Shareholders may apply for additional Open Offer Shares amounting to up to 100 per cent. of their Open Offer Entitlement.
Qualifying non-CREST Shareholders who wish to apply to acquire more than their Open Offer Entitlement should complete the relevant sections on the Application Form. Qualifying CREST Shareholders will have Excess CREST Open Offer Entitlements credited to their stock account in CREST and should refer to Part IV of the Circular for information on how to apply for Excess Shares pursuant to the Excess Application Facility.
Application will be made for the Open Offer Entitlements and Excess Open Offer Entitlements in respect of Qualifying CREST Shareholders to be admitted to CREST. It is expected that such Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST at 8.00 a.m. on 1 April 2014. Such Open Offer Entitlements and Excess Open Offer Entitlements will also be enabled for settlement in CREST at 8.00 a.m. on 1 April 2014. Applications through the means of the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.
Qualifying non-CREST Shareholders will receive an Application Form with the Circular which sets out their entitlement to Open Offer Shares as shown by the number of Open Offer Entitlements allocated to them. Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Open Offer Entitlements on 1 April
2014.
Fractions of Open Offer Shares will not be allotted and each Qualifying Shareholder's
entitlement under the Open Offer will be rounded down to the nearest whole number.
Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating the Open Offer Entitlements.
Orca and Herald have undertaken with the Company not themselves to take up any of their respective rights under the Open Offer.
Shareholders should note that the Open Offer is not a rights issue. Qualifying CREST Shareholders should note that although the Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim. Qualifying non- CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded. Qualifying Shareholders should be aware that in the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market or placed for the benefit of Qualifying Shareholders who do not apply under the Open Offer. If applications are made for less than all of the Open Offer Shares available, then the lower number of Open Offer Shares will be issued.

New Ordinary Shares

The allotment and issue of the New Ordinary Shares is conditional, inter alia, on the passing of the Resolution at the General Meeting and upon Admission. The New Ordinary Shares will, upon issue, rank equally with each other and with the Existing Ordinary Shares.

Other information relating to the Capital Raising

The Capital Raising is conditional, inter alia, upon:

 the passing of the Resolution;

 the Subscription Agreement becoming unconditional in all respects (other than

Admission) and having not been terminated in accordance with its terms; and

 Admission of the New Ordinary Shares becoming effective by not later than 8.00 a.m. on 30 April 2014.

If any of such conditions are not satisfied or, if applicable, waived, the Capital Raising will not proceed.
The Capital Raising will result in the issue of in total 21,212,121 New Ordinary Shares representing, in aggregate, approximately 21.0 per cent. of the Enlarged Ordinary Share Capital and approximately 17.5 per cent. of the Enlarged Equity Share Capital (which includes the Preferred Shares).

Shareholdings

Orca currently holds 34,794,963 Ordinary Shares and the 20,000,000 issued Preferred Shares, representing approximately 43.5 per cent. of the Existing Ordinary Shares and approximately 54.8 per cent. of the issued Equity Shares. Depending on the level of valid acceptances received in respect of the Open Offer, Orca has conditionally committed to subscribe for between 9,787,489 and 14,141,414 New Ordinary Shares pursuant to the Placing. Immediately following the Capital Raising, Orca's maximum shareholding will comprise 48,936,377 Ordinary Shares and 20,000,000 Preferred Shares, representing approximately 48.4 per cent. of the Enlarged Ordinary Share Capital and approximately 56.9 per cent. of the Enlarged Equity Share Capital.
Herald currently holds 23,653,103 Ordinary Shares representing approximately 29.6 per cent. of the Existing Ordinary Shares and approximately 23.7 per cent. of the issued Equity Shares. Depending on the level of valid acceptances received in respect of the Open Offer, Herald has conditionally committed to subscribe for between 4,893,744 and 7,070,707 New Ordinary Shares pursuant to the Placing. Immediately following the Capital Raising, Herald's maximum shareholding will comprise 30,723,810 Ordinary Shares, representing approximately 30.4 per cent. of the Enlarged Ordinary Share Capital and approximately 25.3 per cent. of the Enlarged Equity Share Capital.
Following the issue of the New Ordinary Shares pursuant to the Capital Raising, Qualifying
Shareholders:

 who take up their maximum entitlements under the Open Offer (including under the Excess Application Facility) will not suffer any dilution of their interests in the Equity Shares;

 who take up their full entitlements, but without subscribing for any additional New Ordinary Shares through the Excess Application Facility, will undergo a dilution of approximately 5.0 per cent. to their interests in the Company because of the dilutive effect of the Placing; and

 Qualifying Shareholders who do not take up any of their entitlements in respect of the Open Offer will experience a more substantial dilution of approximately 17.5 per cent. to their interests in the Company.

Each of Orca and Herald is a related party of the Company for the purposes of the AIM Rules. The Independent Directors, having consulted with Shore Capital, consider that the terms of the Placing, and the terms of the Subscription Agreement, to be fair and reasonable insofar as all Shareholders are concerned.

The Resolution is a special resolution requiring the support of Shareholders holding 75 per cent. or more of the votes cast at the General Meeting (excluding any votes withheld).
In and subject to the terms of the Subscription Agreement:

 Orca has irrevocably undertaken not to participate in the Open Offer and to vote or procure the voting in favour of the Resolution in respect of 34,794,963 Existing Ordinary Shares and the 20,000,000 Preferred Shares, representing together approximately 54.8 per cent. of the votes capable of being exercised at the General Meeting; and

 Herald has irrevocably undertaken not to participate in the Open Offer and to vote or procure the voting in favour of the Resolution in respect of 23,653,103 Existing Ordinary Shares, representing approximately 23.6 per cent. of the votes capable of being exercised at the General Meeting.

In addition, Mark Turnage, Michael Angus and the OpSec Employee Trust have irrevocably undertaken to vote in favour of the Resolution in respect of an aggregate of 5,238,957
Existing Ordinary Shares representing, in aggregate, approximately 5.2 per cent. of the votes capable of being exercised at the General Meeting.
In aggregate, Shareholders holding Equity Shares representing approximately 83.6 per cent. of the votes capable of being exercised at the General Meeting have irrevocably undertaken to vote in favour of the Resolution at the General Meeting.

Information for Overseas Shareholders who have registered addresses outside the United Kingdom or who are citizens or residents of countries other than the United Kingdom is set out in the Circular, which sets out the restrictions applicable to such persons.

A notice convening the General Meeting, to be held at the offices of Bond Dickinson LLP at 4
More London Riverside, London SE1 2AU on 17 April 2014 at 12.00 noon, is set out at the end of the Circular. At the General Meeting, a special resolution of the Company will be proposed to disapply statutory pre-emption rights in respect of the allotment and issue of equity shares with an aggregate nominal amount of up to £1,060,607, representing the approximate nominal value of the New Ordinary Shares to be issued pursuant to the Capital Raising.

Note:

1 This figure includes 12,121,212 New Ordinary Shares to be offered to Qualifying Shareholders (at the Issue Price)

under the Open Offer.

(1) If you have any questions on the procedure for acceptance and payment relating to the Open Offer or the application procedures please contact Capita Asset Services on 0871 664 0321 from within the UK or on + 44

20 8639 3399 if calling from outside the UK. Calls to the 0871 664 0321 number cost 10 pence per minute

from a BT landline. Other network providers' costs may vary. Lines are open 9.00 am to 5.30 pm (London time) Monday to Friday. Calls to the helpline from outside the UK will be charged at the applicable

international rate. Different charges may apply to calls from mobile telephones and calls may be recorded and

randomly monitored for security and training purposes. The helpline cannot provide advice on the merits of the

Capital Raising nor give any financial, legal or tax advice.

(2) The dates set out in the Expected Timetable of Principal Events above and mentioned throughout this announcement, Circular and the Application Form may be adjusted by OpSec which event details of the new dates will be notified to AIM and, where appropriate, to Shareholders.

(3) All references to time in this announcement are to time in London.

Mark Turnage, Chief Executive (mturnage@opsecsecurity.com) Mike Angus, Finance Director (mangus@opsecsecurity.com)

Stephane Auton/ Patrick Castle

The following definitions apply throughout this announcement:

"Accrued Dividend" ............................................... the accrued but unpaid Preferred Dividend as at 31

March 2014

"Admission" .......................................................... the admission to trading on AIM of the New Ordinary

Shares

"AIM" .................................................................... the market of that name operated by the London

Stock Exchange

"Application Form"................................................. the application form which accompanies this document for Qualifying non-CREST Shareholders for use in connection with the Open Offer

"Capital Raising" ................................................... together, the Placing and the Open Offer

"certificated" or "certificated form" ......................... not in uncertificated form

"Circular" ............................................................... the circular to Shareholders relating to the Capital Raising, and containing the notice of the General Meeting, which is expected to be posted to Shareholders on the date of this announcement

"CREST" ............................................................... the relevant system for the paperless settlement of trades and the holding of uncertificated securities operated by Euroclear in accordance with the CREST Regulations

"CREST Regulations" ........................................... the Uncertified Securities Regulations 2001, as amended

"Directors" ............................................................. the directors of the Company

"Enlarged Equity Share Capital"............................ the issued Equity Shares of the Company immediately following Admission

"Enlarged Ordinary Share Capital" ........................ the issued Ordinary Shares of the Company immediately following Admission

"enabled for settlement" ........................................ in relation to Open Offer Entitlements or Excess Open Offer Entitlements, enabled for the limited purpose of settlement of claim transactions and unmatched stock event transactions (each as described in the CREST Manual issued by Euroclear)

"Equity Shares" ..................................................... Ordinary Shares and Preferred Shares

"Euroclear" ............................................................ Euroclear UK & Ireland Limited, the operator of

CREST

"Excess Application Facility" ................................. the arrangement pursuant to which Qualifying Shareholders who validly accept the Open Offer in respect of their full Open Offer Entitlements may apply for additional Open Offer Shares amounting to up to

100% of their Open Offer Entitlement

"Excess CREST Open Offer Entitlement" ............. in respect of each Qualifying CREST Shareholder, the entitlement to apply for Open Offer Shares in addition to his Open Offer Entitlement credited to that Shareholder's stock account in CREST, pursuant to the Excess Application Facility, which is conditional on the Shareholder taking up his Open Offer Entitlement

in full and which may be subject to scaling back in accordance with the provisions of this document

"Excess Open Offer Entitlement" .......................... an entitlement for each Qualifying Shareholder to apply to subscribe for Open Offer Shares in addition to that Shareholder's Open Offer Entitlement pursuant to the Excess Application Facility which is conditional on the Shareholder taking up their Open Offer Entitlement in full and which may be subject to scaling back in accordance with the provisions of this document

"Excess Shares".................................................... Open Offer Shares in addition to the Open Offer Entitlement for which Qualifying Shareholders may apply under the Excess Application Facility

"Excluded Territories"............................................ the United States, Australia, Canada, Japan, the Republic of South Africa, the Republic of Ireland and any other jurisdiction where the extension or availability of the Open Offer would breach any applicable law or regulations

"Existing Ordinary Shares" .................................... the existing issued Ordinary Shares as at the date of this document

"General Meeting" ................................................. the general meeting of the Company convened for

12.00 noon on 17 April 2014 and to be held at the offices of Bond Dickinson LLP. 4 More London

Riverside, London SE1 2AU (or any adjournment of

it), notice of which is set out in the Circular

"Group" or "OpSec Group" .................................... the Company and its subsidiaries

"Herald" ................................................................. Herald Investment Trust plc, a public limited company incorporated in England and Wales whose registered office is at 10-11 Charterhouse Square, London EC1M 6EE

"Independent Directors" ........................................ the Directors who are independent in relation to the Placing, being each of David Mahony, Mark Turnage and Michael Angus

"Interim Results".................................................... the Group's unaudited interim results for the six months ended 30 September 2013, which were announced through a regulatory information service on 20 December 2013

"Issue Price"......................................................... 33 pence per New Ordinary Share

"JP Morgan Chase Debt Facility" ......................... the credit agreement between OpSec Security Group Inc and JP Morgan Chase NA dated 11 July 2013 (as amended)

"London Stock Exchange"..................................... London Stock Exchange plc

"New Ordinary Shares" ......................................... the 21,212,121 Ordinary Shares to be issued pursuant to the Capital Raising

"Open Offer".......................................................... the invitation to Qualifying Shareholders to subscribe for Open Offer Shares at the Issue Price on the terms of and subject to the conditions set out or referred to in the Circular and, where relevant, in the Application Form

"Open Offer Entitlement" ....................................... the pro rata basic entitlement for Qualifying

Shareholders to apply to subscribe for 5 Open Offer

Shares for every 33 Existing Ordinary Shares held by them on the Record Date pursuant to the Open Offer

"Open Offer Shares" ............................................. the 12,121,212 New Ordinary Shares for which Qualifying Shareholders are being invited to apply under the terms of the Open Offer

"Orca".................................................................... Orca Holdings Limited, a Cayman Islands corporation whose address is c/o Paget Brown Trust Company Limited, Boundary Hall, Cricket Square, PO Box 1111, Grand Cayman, KY1-1102

"Ordinary Shares" ................................................. ordinary shares of 5 pence each in the capital of the

Company

"Overseas Shareholders" ...................................... Shareholders who are resident in, or who are citizens of, or who have registered addresses in, territories other than the United Kingdom

"Placing"................................................................ the conditional placing at the Issue Price of the New Ordinary Shares, as described in Part I of this document

"Preferred Dividend".............................................. the preferred dividend payable to holders of the Preferred Shares pursuant to OpSec's articles of association, being 7.5% per annum of the amount paid up on each Preferred Share

"Preferred Shares" ................................................ the 20,000,000 7.50% redeemable convertible preferred ordinary shares of 5 pence each in the capital of the Company in issue as at the date of this document

"Qualifying CREST Shareholders" ........................ Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company on the Record Date are held in uncertificated form

"Qualifying non-CREST Shareholders" ................. Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company on the Record Date are held in certificated form

"Qualifying Shareholders" ..................................... holders of Existing Ordinary Shares on the Company's register of members at the Record Date (other than holders located in the Excluded Territories)

"Record Date" ....................................................... the close of business on 27 March 2014

"Resolution"........................................................... the resolution set out in the notice of the General

Meeting at the end of this document

"Shareholders" ...................................................... holders of Existing Ordinary Shares and the Preferred

Shares

"Shore Capital" ...................................................... Shore Capital and Corporate Limited, the Company's

nominated adviser

"stock account"...................................................... an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited

"Subscription Agreement" ..................................... the conditional subscription agreement dated 31

March 2014 between the Company, Orca and Herald relating to the Placing and Open Offer

"uncertificated" or "uncertificated form" ................. recorded on the relevant register or other record of the share or other security concerned as being held in

uncertificated form in CREST, and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST

"United Kingdom" or "UK"...................................... the United Kingdom of Great Britain and Northern

Ireland

"£" or "Pounds" ...................................................... UK pounds sterling, being the lawful currency of the

United Kingdom

"United States", "USA'' or "US" ............................. the United States of America, its territories and possessions and any state of the United States of America and the District of Colombia

distributed by