Issue of Convertible Loan notes and Equity warr...

Issue of Convertible Loan notes and Equity warrants

Coms PLC

COMS PLC

(“Coms” or “the Company”)

Issue of Convertible Loan notes and Equity warrants

The Board of Coms plc (AIM: COMS.L), a provider of internet telephony services to business customers, is today pleased to announce that £225,000 has been raised through the issue of Convertible Loan Notes and Equity Warrants. The proceeds will be invested in working capital and will facilitate future revenue growth.

The Convertible Loan Notes have a term of 2 years, a coupon of 3% per annum above the Bank of England base rate which is paid annually. The Convertible Loan Notes can be converted by the subscriber at anytime within the 2 years duration and at the end of the duration the Company has the option to repay the Convertible Loan Notes or, in the event that the share price exceeds the exercise price, convert the Convertible Loan Notes into equity. The conversion price is 10p per Ordinary Shares of 10p each, which represents a premium of 122% compared to 4.5p, the closing mid price on 14 November 2008.

The subscribers for the Convertible Loan Notes will also receive Equity Warrants. The warrants have an exercise price of 10p and a term of 2 years. For each £1 of Convertible Loan the subscriber will receive £1 of Equity Warrants.

The following Directors subscribed for the Convertible Loan Notes and Equity Warrants:

Director	Â	Â	Â	Value of Convertible Loan Notes subscribed	Â	Â	Â	No. of Equity Warrants over Ordinary shares
Jason Drummond				£99,500				99,500
Jonathan Cole				£25,000				25,000
Terry Martin				£25,000				25,000
Justin Drummond				£15,000				15,000
Andrew Branson				£15,000				15,000
Richard Bennett				£1,000				1,000

The participation of the Directors in the issue of the Convertible Loan Notes and Equity Warrants means this transaction is classified as a Related Party transaction as defined by the AIM Rules. The Independent Directors, having consulted with the Group's Nominated Advisor, consider that the terms of the transaction are fair and reasonable insofar as the shareholders are concerned and to be in the best interests of the Company.

Jason Drummond, Chairman of Coms, said: “The additional funds raised allows Coms to further increase its customer base and continue to drive forward significant revenue growth. This funding is expected to see the business become cash flow positive from the beginning of our next financial year commencing on 1 February 2009, subject to the absence of any further market upheaval.

“I remain very confident that our growth will be sustained through the second half of the year and I continue to be excited about the long term prospects for Coms.”

The requirement for this fund has arisen due to the non-payment of funds by an investment company following their participation in the equity placing announced on 10 April 2008. Since that time there have been prolonged discussions with the investment company regarding the failure to deliver the funds and the Company is now pursuing the matter with the regulatory authorities and has commenced litigation.

Contact:

Coms PLC Jason Drummond Richard Bennett	Â	Â	020 7148 3000
Daniel Stewart & Company plc Simon Leathers Tessa Smith			020 7776 6550
Threadneedle Communications Graham Herring Alex White			020 7653 9850