London, 23 June 2015 - Touchstone is pleased to announce an investment in Cambridge Quantum Computing Limited
('CQCL'). On 15 May 2015, the Company announced a fundraising with the use of proceeds to include the exercise an option to invest in unquoted new ordinary shares in CQCL.
The option was granted to TGL in November 2014 for providing professional services regarding several CQCL business development initiatives. Touchstone has now made an investment in CQCL by investing £200,000 into new CQCL convertible preferred shares (nil coupon with no final redemption date).
The convertible preferred shares are convertible into new ordinary shares of CQCL at a price per share that will be 20% below the price per ordinary share paid by CQCL's expected institutional and other investors in a financing that is currently anticipated to occur in 2015.
Based on the expected valuation of CQCL at the time of the forthcoming financing, Touchstone's resultant holding in CQCL will not be expected to represent a significant percentage of CQCL's issued share capital.
In addition to Touchstone making the investment, Touchstone investee GOS Systems has been granted exclusive reseller distribution rights over CQCL's forthcoming Quantum Key Encryption ('QKE') products which will be targeted at governments and corporations that have high security requirements.
The sales right covers European sales of the products and the products are expected to be available for sale from 2016 onwards. The sales right has been granted for a period of 3 years following the first availability of product.
The Directors believe that QKE products will become essential for sensitive communications as soon as the requisite infrastructure is developed.
Countries as diverse as China, Russia, the United States of America and the United Kingdom are investing heavily in quantum technologies, and quantum cryptography is a vital aspect of the motivation for these investments.
Given the advantages that quantum cryptography will have over classical systems of secure communications, governments and security agencies will be an important and large market. GOS is an established supplier to law enforcement and security agencies in UK, Europe, Middle East and South Asia. GOS's established customer network and market expertise is capable of driving sales of CQCL's forthcoming QKE products, and supports GOS's strategy of capitalising on the increasing demand for secure communication products.
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