The Company is yet to receive the franchise fee of £3.25m due under the franchise agreement signed with Zink Financial SA on 20 November 2009. Despite extensive and ongoing discussions with Zink, the Board has considered it prudent to pursue alternative financing arrangements. The capital raised today is expected to be sufficient in order for the Company to achieve its business plan.

The Convertible Loan Notes are issued with 16,500,000 warrants attached pro-rata to amount subscribed, each such warrant giving the right to the holder to acquire one Ordinary Share at 11 pence per share. The warrants are exercisable in whole or in part, subject to shareholder approval, any time on or before 31 December 2011 (such period to be extended if shareholder approval is not obtained by 31 March 2010). The Company has also issued an additional 20,085,880 warrants in connection with the strengthening of the Board as referred to in this announcement, and the arrangement of the financing announced today. These warrants are exercisable in whole or in part, subject to shareholder approval, any time on or before 31 December 2014 (such period to be extended if shareholder approval is not obtained by 31 March 2010) and also give each holder the right to acquire one Ordinary Share at 11 pence per share.

The Company will seek shareholder approval for the conversion of the Convertible Loan Notes into Ordinary Shares at a conversion price of 11 pence per share and to enable the exercise of the subscription rights attaching to the warrants. Conversion of the Convertible Loan Notes will happen automatically if shareholder approval is obtained. The directors propose to send out a notice shortly convening a shareholders meeting of the Company for this purpose. Applications will be made for the Ordinary Shares issued today and, if shareholder approval is obtained, the ordinary shares issued on conversion of the Convertible Loan Notes to be admitted to trading on AIM.

If shareholder approval is not obtained the Convertible Loan Notes will accrue interest at a rate of 2.5 per cent. per month with the notes becoming repayable immediately at the option of the relevant noteholder or, if unconverted, at the Company's option at anytime on or after 31 December 2020. In addition, conversion rights will also be triggered by any subsequent approvals granted by shareholders for the issue of Ordinary Shares.

Board Appointment

The directors have resolved to strengthen the Company's Board and are pleased to announce that Hank Uberoi will join the Board of Earthport as an Executive Director following completion of the fundraising. Mr Uberoi is Managing Director of HU Investments LLC, which holds 9,100,000 Ordinary Shares, representing approximately 9.5 per cent. of the issued share capital of the Company prior to the fund raising round. He has been issued 14,420,632 warrants (included in the above 20,085,880) in connection with the arrangement of the financing and acceptance of his appointment as a Director. Mr Uberoi will work part-time for the Company and his major role will be to oversee delivery of the Company's strategy. Mr Uberoi will not be paid any salary or other fees in connection with his appointment. He will receive a fixed travel and expenses allowance.

Mr Uberoi is currently an investor in private and public companies globally. He is a director of several private companies and organisations in the USA, UK and Asia. He has also previously served on the board of a NYSE listed company.

In November 2006 he was appointed by Governor Corzine as the Chairman of the Technology Governing Board for the State of New Jersey, USA, a role he served until 2008.

Until April 2004 he was the Chief Operating Officer and head of an Equities Investment Business at Citadel Investment Group in Chicago where he was on the Management Committee of the firm.

Hank joined Citadel in 2002 from Goldman Sachs, where he spent 14 years, most recently as a partner and co-COO of the Technology Division. While at Goldman, he served on several firm-wide governance boards, including the firm's Compensation Committee.

He graduated from Williams College, Massachusetts with a BA, Magna Cum Laude.

Mike Harrison, Chairman of Earthport plc, said: "The Board is pleased to have raised £4.13m through the fund raising, strengthening the Company's financial position and enabling Earthport to fully implement its strategy.

"The Board is also delighted that Hank Uberoi has agreed to join the Board. Hank is a successful business leader with significant management, operational and investment experience and will strengthen the Company and its position in the global market place."