React Energy : 10th January 2017Significant Investment by EBIOSS Energy in REACT Energy Group and Notice of EGM

10 January 2017

("REACT", the "Company" and together with its subsidiaries, "REACT Energy Group")

Significant Investment by EBIOSS Energy in REACT Energy Group and Notice of EGM

• EBIOSS Energy has conditionally assigned the benefit of the €5,150,226 debt due to EBIOSS Energy from REACT's 50.02 per cent. subsidiary, Newry Biomass Limited ("NBL"), pursuant to the EQTEC Agreement (the "NBL Debt"), to REACT pursuant to the Settlement Deed

• REACT has conditionally issued, subject to, inter alia, Shareholder approval, 78,210,000 New Ordinary Shares to EBIOSS Energy (the "New EBIOSS Shares") in lieu of cash settlement of the NBL Debt pursuant to the Conversion Agreement, which will result in EBIOSS Energy holding 51 per cent. of the Enlarged Share Capital of REACT

• The New EBIOSS Shares are being issued at a price of 5.53 pence (the "Conversion Price"), which represents a premium of 47.5 per cent. to the closing mid-market share price on 9 January 2017 of REACT of 3.75 pence

• As the Conversion Price is below the nominal value of the Existing Ordinary Shares of €0.10 each, the issue of the New EBIOSS Shares is therefore conditional on, inter alia, Shareholder approval of the Share Capital Reorganisation which will result in each of the Existing Ordinary Shares being divided into and reclassified as one New Ordinary Share of €0.001 and one 2017 Deferred Share of €0.099

• As the issue of the New EBIOSS Shares will result in EBIOSS Energy holding 51 per cent. of the Enlarged Share Capital of REACT, their issue is conditional on, inter alia, Independent Shareholder approval of the waiver of the requirements of Rule 9 of the Irish Takeover Rules that would otherwise arise on EBIOSS Energy to make a general offer to all Shareholders

• At the EGM, the Company is also asking Shareholders to vote on the change of its name to EQTEC PLC

• The Proposals are subject, inter alia, to Shareholder approval of the Resolutions, including the Whitewash Resolution, to be sought at the EGM, convened for 11:30 a.m. on 6 February 2017. A circular will be posted to Shareholders today convening the EGM (the "Circular")

The above highlights should be read in conjunction with the full text of the following announcement.

Strand Hanson Limited ("Strand Hanson"), which is authorised and regulated by the Financial Conduct Authority, is acting exclusively for the Company and no-one else (including the recipients of the Circular) and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for advising any other person on the contents of this document or any matter, transaction or arrangement referred to therein.

Unless otherwise stated, capitalised terms in this announcement are as defined in Appendix 1 of this announcement.

1. Introduction

   REACT, the renewable energy developer and operator focusing on the production of clean energy in the UK and Ireland, today announces that the Company and EBIOSS Energy have entered into the Settlement Deed whereby, subject to, inter alia, Shareholder approval of the Resolutions, including the Whitewash Resolution (which is to be voted upon only by Independent Shareholders), the NBL Debt, amounting to €5,150,226 which is currently due to EBIOSS Energy from NBL pursuant to the EQTEC Agreement entered into between NBL and EBIOSS Energy, will be assigned to REACT such that REACT will become a debtor to EBIOSS Energy and a creditor of NBL for an amount equal to the NBL Debt. The Company intends to settle the NBL Debt through the issue of the 78,210,000 New Ordinary Shares, being the New EBIOSS Shares, pursuant to the Conversion Agreement.

   Shareholders are being asked to vote on the Resolutions at the EGM to, inter alia, approve the Whitewash Resolution (which is to be voted upon only by Independent Shareholders), which is a condition of the Settlement Deed and the Conversion Agreement and therefore the issue of the New EBIOSS Shares. The Company is also asking Shareholders to vote on a change of the Company's name to EQTEC PLC.

   As the Conversion Price, being 5.53 pence per New EBIOSS Share is below the nominal value of the Existing Ordinary Shares (being €0.10 per Existing Ordinary Share), in order to permit the Company to issue the New EBIOSS Shares in compliance with the Companies Act, the Company intends, subject to, inter alia, Shareholder approval, to undertake the Share Capital Reorganisation to enable the Proposals to proceed as, under the Companies Act, new ordinary shares must be issued at a price greater than their nominal value.

   Under the Share Capital Reorganisation, each of the 75,140,494 Existing Ordinary Shares will be divided into and reclassified as one New Ordinary Share of €0.001 and one 2017 Deferred Share of €0.099. Each Shareholder's proportionate interest in the Company's issued ordinary share capital will, and thus the aggregate value of their holding should, remain unchanged as a result of the Share Capital Reorganisation alone. It will, however, be diluted by the issue of the New EBIOSS Shares pursuant to the Conversion Agreement.

   Approval of the Resolutions, including, inter alia, the Whitewash Resolution and therefore the ability to issue and allot the New EBIOSS Shares is being sought at the EGM, convened for 11:30 a.m. on 6 February 2017.

   Section 1111 of the Companies Act 2014 requires the directors of a company to convene an extraordinary general meeting of its shareholders where its net assets are half or less of its called-up share capital, as is the case with the Company. Accordingly, the EGM will also address the requirements of Section 1111.

   The purpose of this announcement is to provide information on the background to the Company's current position, EBIOSS Energy and the Proposals and to explain why the Board recommends that Shareholders vote in favour of the Resolutions, including the Whitewash Resolution (which is to be voted upon only by Independent Shareholders), at the EGM, notice of which is set out at the end of the Circular, which has today been posted to Shareholders.

2. Background to the relationship between the Company and EBIOSS Energy

   On 31 December 2015, the Company announced that NBL, a 50.02% subsidiary of the Company, which owns the Group's 4MW biomass gasification project in Newry, Northern Ireland, had entered into the EQTEC Agreement to purchase the EQTEC Plant to repower the Newry biomass plant. NBL is effectively a 50/50 joint venture with Farmers, the Company's current largest shareholder with an interest of 23.2% in the Existing Ordinary Shares.

   Pursuant to the EQTEC Agreement, the consideration for the purchase of the EQTEC Plant was €4,963,993, and was to be fully payable in cash. It was also agreed that the equipment purchased would form part of an EPC contract to be signed between EQTEC (or a company designated by EQTEC) and NBL. EBIOSS have subsequently invoiced NBL €186,233 for shipping and delivery and other costs of the EQTEC Plant, bringing the total amount outstanding under the EQTEC Agreement to €5,150,226.

   REACT has since granted EQTEC exclusivity to provide gasification technology, as part of the EPC contract, for

   its biomass gasification project pipeline in the UK.

   On 8 January 2016, the Company announced that it had entered into the EBIOSS Loan Facility with the proceeds to be used by the Company for continued investment in the Newry biomass plant and the Company's portfolio of other biomass gasification projects in the UK. The key terms of the EBIOSS Loan Facility were as follows:

   • quantum of €750,000, which could be drawn down in three equal monthly instalments of €250,000;

   • interest rate of 8% per annum on outstanding capital balances, which would accrue and be repaid in full on repayment of the EBIOSS Loan Facility;

   • drawdown of the EBIOSS Loan Facility to be subject to the agreement of the Company and EBIOSS Energy; and

   • from 7 January 2017, EBIOSS Energy could, at any time, demand that the Company repays the drawn down proportion of the EBIOSS Loan Facility plus accrued interest. The Company could, at any time, elect to repay the EBIOSS Loan Facility plus accrued interest.

   The first instalment of €250,000 was drawn down by the Company on 8 January 2016.

   As announced on 16 March 2016, the terms of the EBIOSS Loan Facility were amended so that the proceeds from the second instalment of €250,000 (the "Second Tranche") could be applied for the working capital needs of the Company as well as for project development costs, at the sole discretion of the Company. Between then and 23 May 2016, the Company drew down the full €250,000 available under the Second Tranche.

   As announced on 22 June 2016, the terms of the EBIOSS Loan Facility were amended again such that the remaining €250,000 available under the facility (the "Third Tranche") could also be utilised by the Company for working capital purposes as well as to fund project development costs. Accordingly, the Company announced that it had drawn down €75,000 of the Third Tranche for working capital needs, with €175,000 available to be used by the Company for project development costs.

   On 12 December 2016, it was announced that the remaining balance of the EBIOSS Loan Facility had been drawn down to be used for the working capital needs of the Company, such that the balance outstanding stood at

   €750,000. It was also announced that the terms of the EBIOSS Loan Facility had been amended by the Amendment and Restatement Deed between the parties such that the amount of the EBIOSS Loan Facility was increased by €600,000 to €1,350,000, with the increased amount to be used for the working capital needs of the Company, and the repayment date of for the facility was extended to 7 January 2018. All other terms of the EBIOSS Loan Facility remain the same.

3. The Settlement Deed, the Conversion Agreement and the Warrant Purchase Agreement

Whilst the Company continues to execute on its strategy, general market conditions continue to impact investment sentiment. As a result of this ongoing uncertainty, and to ensure that the Company continues to have in place the necessary resources to meet this dynamic business environment, the Board continuously reviews the Company's strategy, cost base and financing structures to ensure it is well positioned and appropriately capitalised to take advantage of opportunities that are available to it.

Due in part to the delay in finding funding partners to finance the repowering of Newry, the Group's current cash resources are not sufficient to make the payments due to EBIOSS Energy under the EQTEC Agreement, being the NBL Debt. With this background, the Company has concluded discussions with EBIOSS Energy, such that as a result of assigning the NBL Debt due to EBIOSS Energy from NBL (pursuant to the EQTEC Agreement) to REACT, EBIOSS Energy will be issued such number of New Ordinary Shares so that it has a shareholding of 51 per cent. of the Enlarged Share Capital, thus taking previous commercial transactions and general cooperation between the companies a significant step further.

In order to facilitate this, the Company has entered into the Settlement Deed and the Conversion Agreement to fully convert the debt balances outstanding under the EQTEC Agreement (which amount to €5,150,226) into New Ordinary Shares (known as the New EBIOSS Shares) and thereby extinguish all amounts due to EBIOSS Energy under the EQTEC Agreement. The Company has also earlier entered into the Amendment and Restatement Agreement with EBIOSS Energy as set out above and in paragraph 2 of Part 1 of the Circular to provide additional working capital to the Group, which is expected to be sufficient for the next six months for the Group to undertake the necessary activities to repower NBL and advance its other projects. Pursuant to the Settlement Deed,