Issue of Convertible Loan Notes

DDD Group plc (“DDD” or the “Company”) announces that it is currently raising up to £2,100,000 of Convertible Unsecured Loan Notes (“Notes”) pursuant to the existing authorities granted to the board of directors and that on 30 July 2014 it received firm commitments from related parties for the issue of 25.5% of the nominal value or £535,000 of the Notes.

The issue of the Notes will be conducted under the authority granted to the board of directors pursuant to Section 120 the Company’s Articles of Association. The right of conversion of the Notes into ordinary shares falls within the current partial dis-application of pre-emption rights approved by shareholders at the June 10th 2014 Annual Shareholders Meeting.

The net proceeds from the Notes will allow the Company to continue to develop its new technologies and business development activities for the 2D image processing market while continuing ongoing support of the 3D market.

The following is a summary of the main provisions of the Notes. The Notes have an annual interest rate of 7%. The Notes can be converted by the holders into ordinary shares of 1 pence each in the capital of the Company (“Shares”) at a conversion price of 10 pence nominal amount of Notes per Share. The Company has the option to redeem the Notes at any time at a 5% premium to their nominal value plus accrued interest. Any Notes outstanding on 30 January 2016 will at the option of the Company be repaid in cash or settled by the issue of Shares at the conversion price; in both cases accrued interest will be payable in cash.

Four of the Directors of DDD or their affiliates have agreed to subscribe for Notes. The nominal amount of the Notes that they have agreed to acquire are as follows: Christopher Yewdall £20,000; Nicholas Brigstocke £25,000; Hans Snook affiliate £50,000; and Dr. Sanji Arisawa £20,000.

Additionally, Arisawa Manufacturing Co., Ltd. (“Arisawa”), currently a holder of 20.8% of the existing issued ordinary share capital of the Company has agreed to acquire £420,000 of the Notes (the “Transaction”).

The Transaction is a related party transaction for the purpose of AIM rule 13, Arisawa and certain Directors being related parties within the meaning of the AIM rules. The Directors of the Company who are independent to this Transaction, Paul Kristensen and Victoria Stull, consider, having consulted with the Company’s nominated adviser, that the terms of the Transaction are fair and reasonable insofar as the shareholders are concerned.

Final details regarding percentage interests of significant shareholders should the notes be converted to share capital in the future will be provided in a subsequent announcement once the remainder of the debt financing has been completed.

Commenting on the issue of the Notes, Chris Yewdall, CEO of DDD said:

This additional funding will allow the continued expansion of our technologies into markets beyond 3D. DDD’s new sensor software technology is applicable to the sizeable 2D consumer electronic device markets of PCs, tablets and smartphones. We anticipate having the first PC versions of these new technologies available for our prospective customers to evaluate early in the fourth quarter.

The Company anticipates releasing the 2014 Interim financial results on 30 September 2014.

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