Xeros Technology : Proposed Placing

December 12, 2017 at 04:54 am EST

PROPOSED PLACING OF 11,111,112 NEW ORDINARY SHARES AT 225 PENCE EACH
APPROVAL OF WAIVER OF OBLIGATIONS UNDER RULE 9 OF THE TAKEOVER CODE

1. INTRODUCTION

The Company intends to raise approximately £25 million before fees and expenses by a Placing of 11,111,112 new Ordinary Shares with existing and new institutional investors at a Placing Price of 225 pence per Placing Share. The Placing will be structured in two parts as detailed in paragraph 4 below.

For the Placing to proceed, the Company requires Shareholders' approval to authorise the Directors to allot the Placing Shares and disapply pre-emption rights in relation to the issue of the Placing Shares in the manner described in paragraphs 4 and 7 below. The Resolutions to grant these authorities are proposed to be passed at a General Meeting to be held at the offices of Squire Patton Boggs (UK) LLP at 7 Devonshire Square, London EC2M 4YH at 10.00 a.m. on 28 December 2017.

The Board believes that raising equity finance using the flexibility provided by a non-pre-emptive placing is the most appropriate and optimal structure for the Company at this time. This allows both existing institutional holders and new institutional investors the opportunity to participate in the Placing and avoids the requirement for a prospectus, which is a costly and time consuming process.

The net proceeds of the Placing are intended to be used for the acceleration of the commercialisation by the Company of each of the applications within the Group's portfolio: Cleaning Technologies in domestic markets, high performance workwear and the hotel and lodging sector, Tanning Technologies in the bovine tanning market and Textile Technologies in the garment dyeing and denim finishing markets. The Company intends to continue to invest in polymer science and engineering and the creation of intellectual property in support of the commercialisation of its applications. It is intended that the proceeds be used to deliver major planned operational milestones in 2018 which provide demonstrable value to commercial partners and investors alike. The 2018 milestones are set out below:

Cleaning Technologies

In the home: The Company has announced that it will demonstrate its new domestic washing machine at the Consumer Electronics Show in Las Vegas in January 2018. The Company also expects to sign an upfront license fee and ongoing royalty stream with at least one global machine original equipment manufacturer (an 'OEM').

High Performance Workwear: The Company expects to achieve a significant penetration of the US firefighter equipment market in 2018 and establish a platform to provide the business with strategic funding options for growth beyond 2018.

Hotel & Lodging: The Company intends to sign royalty agreements, under the Symphony Project, with at least two leading global OEMs. It is also planning a major expansion in EMEA on a fully indirect basis using Forward Channel Partners.

Tanning Technologies

The Company is targeting to sign at least four multi-year contracts with leading European tanneries as well as establishing a commercial presence in the US tannery market. This will establish a platform for strategic funding options to grow the business beyond 2018.

Textile Technologies

In both Denim Finishing and Garment Dyeing the Company is expecting to complete commercial scale trials and demonstrate the potential for a capital light business model for each of the applications.

2. BACKGROUNDTO THE PLACING

2.1. Information on the Company

The Company develops and commercialises proprietary polymer based technologies which materially improve the sustainability, performance and economics of water intensive industrial and consumer processes. Where necessary the Company will enter markets directly to prove and de-risk applications of its technology prior to migrating to intellectual property rich, asset light, licensing business models.

The Company has developed from a single application business to establish a portfolio of strategically selected applications in which to apply its polymer technologies in three world-scale industries: cleaning, tanning and textiles.

Given the scale of the markets in which it operates, the Company's strategy is to commercialise its technology with partners, where appropriate, who already have strong market positions and who also demonstrate a strategic intent to deliver increased levels of sustainability. These markets have been evaluated and selected based upon the size of their potential economic returns net of the investment needed to realise them. For each, the Company seeks to generate returns on its intellectual property and know-how with low capital intensity. These returns can be generated through licensing, trade sale or capital market options for each one of the applications.

The Company's Ordinary Shares were admitted to trading on AIM on 25 March 2014, at which point the Company also raised £27.6 million of gross proceeds via the issue of new Ordinary Shares to investors. On 30 November 2015 the Company raised a further £40.0 million of gross proceeds via the issue of new Ordinary Shares to investors.

Since November 2015 the Company has developed its business from being dependent on a single commercial application in a single market (the North American hotel and lodging laundry market) to having a broad, clearly defined portfolio as described above.

In order to accelerate the commercialisation of polymer technology, the Company has aligned resources to each of the application areas that it is pursuing with the vast majority being applied to those with nearer term profitability. Commercialisation is progressing in Cleaning Technologies with revenue of £2.4 million during the 17-month period to 31 December 2016; Tanning Technologies is expected to deliver its first revenues in 2018 and the Company is targeting 2019 for textile revenues.

2.2. Global Backdrop

Water scarcity is a global imperative. There are 1.3 billion km3 of water on the planet, 97% of which is in our oceans. Of the remaining 3%, 2.5% is inaccessible, for example in polar ice caps or as a result of pollution. So only 0.5% of the world's water is accessible and greater than 80% of this water is from ground sources which are being rapidly depleted. Immediate problems caused by this over extraction include infrastructure collapse, with further stress being caused by pollution. As a result, there are major supply implications to address.

Water scarcity is only expected to increase as populations grow and develop. GDP per capita has been shown to correlate with water demand in developing countries. The price of water is increasing as a result to manage demand and to recover the cost of increasing and replacing ageing infrastructure.

Given the Company's technology's ability to reduce water usage, the potential cost benefits for users will only increase in line with water costs and so these dynamics are likely to drive further adoption of the Company's products.

2.3. Update on progress

Cleaning Technologies

The Company's Cleaning Technologies use re-usable and recyclable nylon polymers within washing machine drums to substantially reduce water, detergent, energy and effluent usage whilst improving cleaning performance. The Company's technology achieves reductions in water of between 50% and 80%, reductions in detergent of between 25% and 50%, reductions in energy of up to 50% and reductions of effluent usage of between 50% and 80%. The polymers are designed in shape, size, density and composition to achieve the above benefits. Additionally, engineering solutions have been developed by the Company and applied to introduce and remove the polymer beads from the garments and fabrics they clean. The Cleaning Technologies business now includes three distinct areas of commercial application:

In the home: The Company has announced that it will demonstrate its new domestic washing machine at the Consumer Electronics Show in Las Vegas in January 2018. It is designed to be incorporated into branded OEMs product lines with very little alteration to the production process. The Company has filed intellectual property against this design.

Globally 119 million washing machines are sold annually with a retail market value of $70 billion per annum. In addition, the consumer laundry detergent market is worth $57 billion per annum. The Company's technology will provide consumers with a reduction in cost per wash, resulting from a reduction in detergent, water and energy usage, along with improved fabric care and a reduced environmental footprint. The Xeros domestic laundry machine incorporates a microparticle filtration system, designed to reduce pollution from washing synthetic garments.

High performance workwear: The Company first started trialling its Cleaning Technology within the personal protective equipment market in 2016. This market includes the uniforms worn by firefighters, military personnel, petrochemical, construction and mining workers. The Company's technology has demonstrated high levels of decontamination, fabric care and garment life extension in the high performance workwear market.

In April 2017, the Company announced the creation of a new division focused on high performance workwear with an initial focus on firefighters' uniforms. Following this, in July 2017, the Company acquired MarKen PPE Restoration ('MarKen'), a specialist independent service provider of cleaning, inspection and repair services to fire and military customers in North America. Since its acquisition by the Company, MarKen has been awarded contracts valued at approximately $175,000 per annum. The acquisition was undertaken as a first step in a plan to have the Company's differentiated technology broadly adopted in the North American market and in due course, in other selected markets and/or geographies. The Company has also signed a contract with Ex Nihilo, a garment fleet provider, to use the Company's technology to clean SNCF uniforms.

Globally, the value of personal protective clothing expenditure is £9.5 billion per annum and the Company estimates that the potential value of the US firefighter protective clothing cleaning, inspection and repair market is $0.3 billion per annum based on an addressable market of c1.5 million firefighter uniforms.

Hotel and lodging: This market addresses on-premise laundries within hotels and it was the first commercial development by the Company with 25kg and, more recently, 16kg Xeros-brand washing machines sold or leased to customers in the Americas under multi-year all requirements contracts, which cover the provision of polymers, chemistry and servicing. The Company is moving from serving customers through a fully integrated business model to a model whereby customers are increasingly served by independent Forward Channel Partners. The financial benefits that accrue from the Company's proprietary technology in the form of water, chemistry, energy and effluent savings are shared between the customer, the Company and the Forward Channel Partners (where used). During the latter part of 2017, the Company entered the Australian and Middle Eastern markets via the Forward Channel Partner sales and delivery model.

At the end of December 2016, the Company was awarded approved supplier status with Hilton Americas which represents over 4,300 hotels across the Americas. The Company intends to achieve similar status with other major hotel chains and is currently in discussion with two hotel groups.

The Company announced its Symphony Project in April 2017 with a product launch at the US Clean Show in June 2017. The Symphony Project is intended to enable other branded commercial washing machine OEMs to incorporate the Company's technology within their products and offer the same to their customers, either directly or via their distributors. The Company intends to offer participating OEMs a proportion of the gain share from the Sbeadycare® agreements described above as an incentive for them to increase the market penetration of the Company's technology. In September 2017 the Company announced that it has entered into an agreement with a major OEM to conduct 'testing and validation' of the Company's technology within one of its commercial washing machines. The agreement allows for commercial discussions to take place upon successful completion of the test and validation.

Pending the anticipated implementation of this and other Symphony Project agreements, the Company announced in September 2017 that it intended to focus its own brand machine sales activities into high added value segments in the US, Europe, the Middle East and Africa. This fully indirect international business model has been established with first machine sales in EMEA.

In July 2017, the Company signed an agreement with Hitachi Capital America Corporation ('Hitachi') whereby Hitachi will provide a range of lease financing packages to the Company's commercial laundry customers and future customers in North America. The agreement also includes the sale of part of the Company's existing lease portfolio.

In September 2017, the Company also announced the commissioning of its 'Connect' information portal which monitors and analyses real-time machine performance and usage data to enable customers to manage their laundry operations and track water, chemistry and energy savings. The 'Connect' information portal also provides access to data to allow Forward Channel Partners to perform preventative maintenance.

Globally the commercial washing machines market is worth $881 million per annum and the value of chemistry sold into commercial laundries is worth $819 million per annum.

Tanning Technologies

In Cleaning Technologies, the Company's polymer technology gently removes unwanted molecules and contaminants from materials; in Tanning Technologies, however, the Company's polymer technology is highly effective in pushing molecules into hides during leather processing. This technology is effective in both the tanning and the retanning and dyeing processes. Initially, the Company has chosen to focus on the retanning and dyeing process. The application of polymer technology in the tanning industry is supported by intellectual property patents.

The Company's Tanning Technologies use re-usable and recyclable polypropylene polymers within tanning drums to substantially reduce the volume and total cost of water and chemistry used, whilst producing leather hides of a comparable quality to that produced in traditional processes. The Company's technology achieves reductions in water and effluent of up to 50% and reductions in chemistry of up to 25%. The polymers are designed in shape, size, density and composition to achieve the above benefits. Additionally, engineering solutions have been developed by the Company and applied to introduce and remove the polymer beads from bovine hides in a tanning drum.

Globally approximately 300 million bovine hides are processed on an annual basis with a value of $55 billion to the tanning industry.

Retanning and Dyeing: Following extensive development and production-scale trials, in July 2017 the Company signed its first contract to provide its polymer technology for the retanning and dyeing activities of Wollsdorf Leder Schmidt and Co., in Austria, on a 10-year basis. Furthermore, the Company has signed Heads of Terms on a multi-year contract with Faeda S.p.A., in Italy. The Company has either completed trials or has trials scheduled with eleven further tanneries across Europe. These trials cover all production types, leather applications and drum material types.

Textile Technologies

In Textile Technologies the Company plans to use re-usable and recyclable polypropylene polymers within rotating drums to substantially reduce the water and chemistry used and the effluent produced in the fading and texturing of denim and in the dyeing of cotton garments. In both cases the intention is at least to match the product quality achieved in traditional processes. The polymers are designed in shape, size, density and composition to achieve the objectives mentioned above. Additionally, engineering solutions have been developed by the Company and applied to introduce and remove the polymer beads from processes they are applied within.

Denim finishing: 1.2 billion pairs of denim jeans are manufactured every year. The global retail market value for denim jeans is $60 billion. The Company aims to reduce the cycle time for the finishing of denim which includes the process steps of de-sizing, cleaving and stonewashing whilst simultaneously reducing the amount of water and chemistry used. The Company has delivered significant improvements in cycle time and water usage in small scale trials and now plans to move to production-scale trials ahead of commercialisation. The Company's process uses a combination of bio-technology and polymer technology to reduce the chemistry that is normally required in traditional processes.

Cotton garment finishing: The global cotton processing industry adds $26 billion of value per annum through the garment finishing process, which includes dyeing. The Company aims to reduce the cycle time for the dyeing and finishing of garments whilst simultaneously reducing the water, salt and chemistry used. The Company has delivered material reductions in water, chemistry and low levels of salt in small scale trials. The Company plans to move to production-scale trials ahead of commercialisation, and is currently in discussions with a global vertically-integrated premium knitwear brand.

The Company supports the commercialisation of the above applications with central functions providing expertise in polymer and engineering development, intellectual property management and corporate function. The Company has a full suite of patents covering all the processes and applications mentioned above. Since the end of 2015 the Company has increased its number of patent families either granted or in application from 39, to its current level of 48 as at the end of June 2017.

2.4. Future plans

Cleaning Technologies

In the home: The Company expects discussions with OEMs regarding licence royalties to follow the demonstration of its domestic machine at the Consumer Electronics Show in Las Vegas in January 2018. These discussions will cover both annual royalties and up-front licence fees. The design offers OEMs the ability to provide their customers with washing processes which are cheaper, more environmentally friendly and which will make their clothes cleaner, last longer and look better. The prototype machine that will be demonstrated involves a simple and inexpensive change to conventional machines which manufacturers can include at the end of their production lines. The Company expects to sign a licensing agreement with at least one global machine OEM during 2018.

The Company's medium-term target is for 1.5% of annual global domestic washing machines sold to incorporate the Company's technology. This is equivalent to 1.8 million units. The Company is targeting an average royalty of 4% of the retail price of a machine.

High performance workwear: Following the acquisition of MarKen, the Company intends to build a national network, both organically and inorganically, to serve the US firefighter cleaning, inspection and repairs market. In order to provide full US coverage, the Company believes it will need between 5 and 10 sites. The Company is targeting a total of 4 sites by the end of 2018, which should achieve a significant penetration of the US firefighter equipment market. This should also establish a platform which would give the business strategic funding options for growth beyond 2018.

The Company has started working with the appropriate US regulators with the objective of making the level of cleaning performance delivered by the Company's cleaning process the national standard. The Company believes that the setting of such a standard will accelerate the adoption of its technology. There is also an opportunity to deploy an extension of the Company's 'Connect' information portal to track and manage firefighters' uniforms. This should demonstrate the benefits of the Company's technology such as increased garment life and allow management to evolve pricing to include a gain share from these benefits.

As the above strategy develops, the Company will evaluate expansion into new sectors and geographies and this evaluation will include the options for further funding.

The Company's medium-term target is to achieve a 15% to 20% share of the US firefighter cleaning, inspection and repair market by 2022 with a target gross margin of 40%. This target margin is before any gain share from garment life extension is included in pricing.

Hotel and lodging:The Company intends to continue its migration towards the licensing model under the Symphony Project, initially in the US with other geographies to follow. Accordingly, in addition to its first OEM agreement, the Company plans to enter into additional agreements with globally recognised OEMs, and is targeting at least two further agreements in 2018. The Company believes that this strategy is the best route to increasing the rate of its adoption at the lowest capital intensity.

During the transition, the Company will focus on selling its own brand machines under its multi-year Sbeadycare® programme in high added value hotel segments and geographies. It is intended that the Company's customers will increasingly be served by Forward Channel Partners thereby reducing the Company's selling, installing, commission and servicing costs. This will allow the Company to maintain its expected overall rate of commissioning of its own machines at between 25 and 30 Sbeadycare® contracts per month in 2018 operating from a lower cost base. This includes further expansion into EMEA in 2018 using Forward Channel Partners to sell and deliver its own brand machines with the Company receiving a royalty for its intellectual property.

This transition is already being implemented in the hotel and lodging business and it will be accelerated during 2018 and 2019.

The Company's medium-term target is to achieve an installed base of between 2,500 - 3,000 machines by the end of 2020 with a target gross margin of between 30% - 40% dependent on the mix between licensing and own sales.

Tanning Technologies

The Company expects to have signed at least 4 multi-year contracts with tanneries in 2018 and it is building an engineering deployment capability to support these tanneries. In 2018 the Company will seek to begin scale trials with larger tannery groups in the Americas having proven the technical and commercial models in Europe. By the end of 2018 the Company expects to be operating with a run-rate of 11m hides per annum being processed by its polymer technology.

During 2018, having established a business platform, the Company will evaluate longer-term growth and funding options.

The Company's medium-term target is to achieve a 15% - 20% market penetration of bovine hide processing by 2021. The estimated total gain per hide of c.£0.6 to £1.05 is expected to be shared equally between each tannery and the Company.

Textile Technologies

The Company will move from small scale trials to larger production-scale trials in 2018 in both denim finishing and cotton garment dyeing and it will seek commercial partners to assist in evaluating the commercialisation options available to the Company. As these options become more fully developed, the Company will recruit dedicated commercial leadership to take these businesses forward and longer-term growth and funding plans will be developed.

2.5. Summary

Since the last fundraising, the Group has achieved a number of key milestones in its transition from a designer and seller of polymer technology commercial washing machines towards an intellectual property-rich, capital-light licenser of polymer-based technologies to multiple scale industries.

Technical validation and increasing market endorsement show that the Company possesses a platform technology that can transform these industries.

The long-term value of the Company's technology in each of the selected markets is substantial, given their scale, the environmental and economic pressures on them, and the quantum of the improvements it delivers in these areas. These benefits are now increasingly being recognised and the Company is in active discussions with a number of partners with the objective of further accelerating commercial development.

The Company now has the foundations in place to demonstrate value in 2018: it has identified the funds it requires and where these will be deployed; it has the key management in place; it has the required intellectual property protections filed or granted; and it has identified the commercial milestones it needs to achieve in 2018 to demonstrate the value of each application within its portfolio and enhance the platform value of the Group as a whole.

3. CURRENT TRADING AND OUTLOOK

Since the Company announced results for the 6 months to 30th June 2017 trading has continued in line with management expectations. In Cleaning Technologies the Company remains on track with its plans to launch its domestic washing machine at the Consumer Electronics Show in January 2018. In the Hotel and Lodging business the Company has signed a Forward Channel Partner agreement with Consolidated International Corporation (CIC) Middle East in the UAE and the first commercial washing machines have been shipped to Dubai, with further shipments expected before the end of the year. The Company also commissioned its first machine in Australia. At the end of June 2017 the Company reported total commercial machine installations and letters of agreement with a high probability of becoming binding contracts of 460. At the end of October this figure now stands at 492 and, as previously announced, the Company continues to focus on increasing the conversion rate of revenue generating machines in the US hotel market and reducing the number of non-revenue generating trial machines, as well as placing new installations into high value customers and geographies.

The high performance workwear business is trading in line with management expectations and planning activity continues to expand the national footprint of the business. In Tanning Technologies the Company continues to progress trials of its technology in European tanneries.

Overall the full year outlook for the Company is in line with management expectations.

4. TAKEOVER CODE, CONCERT PARTY AND RULE 9 WAIVER

4.1. Application of the Takeover Code

The Company is subject to the Takeover Code. Brief details of the Panel, the Takeover Code and the protections they afford are described below.

The Takeover Code is issued and administered by the Panel. The Takeover Code applies to all takeover and merger transactions, however effected, where the offeree company is, inter alia, a listed public company registered in the United Kingdom. The Company is a listed public company registered in the United Kingdom and its Shareholders are therefore entitled to the protections afforded by the Takeover Code.

Under Rule 9 of the Takeover Code, where any person acquires, whether by a series of transactions over a period of time or not, an interest in shares (as defined in the Takeover Code) which (taken together with shares already held by him and any interest in shares held or acquired by persons acting in concert with him) carry 30% or more of the voting rights of such a company, that person is normally required to make a general offer to all the holders of any class of equity share capital or other class of transferable securities carrying voting rights in that company to acquire the balance of their interests in the company.

Rule 9 of the Takeover Code also provides that, among other things, where any person who, together with persons acting in concert with him, is interested in shares which in aggregate carry not less than 30% of the voting rights of such a company but does not hold shares carrying more than 50% of the voting rights of such a company, and such person, or any person acting in concert with him, acquires an additional interest in shares which increases the percentage of shares carrying voting rights in which he is interested, then such person is normally required to make a general offer to all the holders of any class of equity share capital or other class of transferable securities carrying voting rights of that company to acquire the balance of their interests in the company.

An offer under Rule 9 of the Takeover Code must be in cash (or with a cash alternative) and at not less than the highest price paid within the preceding 12 months for any shares in the company by the person required to make the offer or any person acting in concert with him.

For the purposes of the Takeover Code, persons acting in concert comprise persons who, pursuant to an agreement or understanding (whether formal or informal), cooperate to obtain or consolidate control of a company. As explained further below, certain categories of person are presumed to be acting in concert under the Takeover Code unless the contrary is established.

4.2. Historic inadvertent breach of Rule 9 of the Takeover Code by the Concert Party

Presumptions

The Takeover Code provides that certain categories of person are presumed to be acting in concert, including:

- a company, its parent, subsidiaries and fellow subsidiaries, and their associated companies, and companies of which such companies are associated companies, all with each other (for this purpose ownership or control of 20% or more of the equity share capital of a company is regarded as the test of associated company status); and

- a fund manager (including an exempt fund manager) with any investment company, unit trust or other person whose investments such fund manager manages on a discretionary basis, in respect of the relevant investment accounts.

On 9 March 2016, Mercia completed the acquisition of Enterprise Ventures Group Limited, of which EVL is a wholly owned subsidiary. EVL is the discretionary fund manager of, inter alia, the Enterprise Ventures Funds. On the basis that certain members of Woodford (acting through WIML) then held more than 20% of the voting rights of Mercia, Woodford was then presumed to be acting in concert with Mercia, EVL and the Enterprise Venture Funds. At that time, Woodford held 20.50% of the voting rights of the Company and the Enterprise Venture Funds (acting through EVL) held 7.29% of the voting rights of Company. Accordingly, the Concert Party held an aggregate of 27.79% of the voting rights of the Company.

Historic inadvertent breach of Rule 9 of the Takeover Code by the Concert Party

Between 9 March 2016 and 12 July 2017, WIML (as agent and investment manager for Woodford) purchased an aggregate of 5,419,350 Ordinary Shares in approximately 120 separate trades, thereby increasing its holding of voting rights in the Company to 25.96%. On the basis that these purchases increased the Concert Party's aggregate holding of voting rights in the Company from 27.79% to 33.01%, they had the effect of triggering an obligation for the Concert Party to make a mandatory offer for the entire issued share capital in the Company under Rule 9.1 of the Takeover Code. However, Woodford had not appreciated at the time that these acquisitions were made that it was presumed to be acting in concert with the Enterprise Ventures Funds, and the Enterprise Ventures Funds (acting through EVL) were both unaware of Woodford's holding in the Company and the acquisitions being made and therefore had not appreciated that they were presumed to be acting in concert with Woodford, and so no such offer was made.

The Panel has accepted that this obligation for the Concert Party to make a general offer for the Company under Rule 9.1 was triggered inadvertently and has, in accordance with Note 4 on Rule 9.1 of the Takeover Code, accordingly agreed that no offer is required to be made as a result of these purchases. Ordinarily, the Panel would require, as a condition of its not requiring an offer to be made, that sufficient shares are disposed of to independent third parties in order to remedy the breach of Rule 9 that has occurred and, pending the completion of the disposal, the application of restrictions on the exercise of the voting rights attaching to the number of shares as results in the persons acting in concert being able to exercise less than 30% of the voting rights attaching to the shares of the Company. However, the Panel has agreed not to require Woodford to sell approximately 2,682,551 Ordinary Shares in this case on the basis that:

4.2.1. by the time that Woodford had appreciated that it had thereby triggered an obligation under Rule 9.1 of the Takeover Code, it was in confidential discussions with the Company regarding the Placing and, accordingly, Woodford was then restricted under the Market Abuse Regulation from dealing in the Ordinary Shares;

4.2.2. the Concert Party shall exercise less than 30% of the voting rights attaching to the shares of the Company in respect of the Resolutions on which the members of the Concert Party are entitled to vote; and

4.2.3. in the event that the Resolutions are approved and the first part of the Placing (relating to the issue and allotment of the Main Placing Shares) is implemented, then the Concert Party would come to hold less than 30% of the Company's voting rights.

The Concert Party will be able to increase its shareholding in the Company through the issue of the WCP Shares only if the Rule 9 Waiver and the associated Whitewash Resolution is approved by the Independent Shareholders.

4.3. Rule 9 Waiver

As at the date of this announcement, the members of the Concert Party hold existing Ordinary Shares representing 33.01% of the voting rights of the Company. Following the issue of the Main Placing Shares to persons other than the Concert Party, the Concert Party will control approximately 29.99% of the voting rights of the Company (on the assumption that between the date of this announcement and the issue of the Main Placing Shares there is no other issue of shares by the Company, whether pursuant to an exercise of options or otherwise, and there is no other change to the Concert Party's holding of Ordinary Shares).

It is proposed that Woodford subscribe for WCP Shares, which would result in the Concert Party holding Ordinary Shares representing 31.56% of the voting rights of the Company. As a consequence of the issue of the WCP Shares, without a waiver of the obligation under Rule 9 of the Takeover Code, the Concert Party would be required to make a general offer for the balance of Ordinary Shares in issue immediately following Admission. The Panel has been consulted and has agreed, subject to the Whitewash Resolution being passed by the Independent Shareholders (on a poll) at the General Meeting, to waive the obligation that would otherwise arise under Rule 9 of the Takeover Code as a result of the issue of WCP Shares to Woodford pursuant to the Placing. The Whitewash Resolution will be passed if approved by a simple majority of votes cast by Independent Shareholders (on a poll).

Following completion of Admission, Rule 9 of the Takeover Code will continue to apply to the Concert Party, requiring a general offer to be made to all Shareholders if any member of the Concert Party or persons acting in concert with them acquires any Ordinary Shares in addition to those which are the subject of the Whitewash Resolution, unless a further waiver is obtained. The waiver of Rule 9 of the Takeover Code which the Panel has agreed to give (conditional on the Whitewash Resolution being passed by the Shareholders) is only in respect of the acquisition of WCP Shares by Woodford as a result of the Placing and not in respect of any other future acquisition of Ordinary Shares by any member of the Concert Party or persons acting in concert with them.

If the Resolutions are passed, the Concert Party will not be restricted from making an offer for the Company. The members of the Concert Party have confirmed that the Concert Party has no intention of making an offer for the Company.

Further information regarding the Concert Party and the Rule 9 Waiver will be set out in the Additional Information section contained in the Circular.

5. REASONS FOR THE PLACING AND USE OF PROCEEDS

5.1. Reasonsfor the Placing

The Directors are of the view, given the opportunities available to the Group and its limited current cash resources, that this is the appropriate time for the Company to request shareholder approval in order to raise further funds through the Placing. The Placing will enable the Company to maintain the momentum seen since the Company's last equity issue in November 2015 as it seeks to build on its progress within the business.

If the Resolutions are not approved at the General Meeting, the Placing will not occur and the net proceeds of the Placing will not be received by the Company. If this were to happen, the Group would only have sufficient working capital to trade through to mid-February 2018 without taking any mitigating action.

As further detailed in paragraph 9 below, the Company has received, in aggregate, irrevocable undertakings to vote in favour of the Resolutions to be proposed at the General Meeting in respect of:

- the Main Placing Resolutions and WCP Resolutions, 48,215,098 existing Ordinary Shares, representing, in aggregate, approximately 57.22% of the existing issued ordinary share capital entitled to vote on these Resolutions; and

- the Whitewash Resolution, 8,732,962 existing Ordinary Shares, representing, in aggregate, approximately 52.93% of the existing issued ordinary share capitalof the Company entitled to vote on this Resolution.

5.2. Use of proceeds

As at 30 November 2017, the Company had existing cash resources of £4.2 million, which together with the gross proceeds of the Placing would result in a pro forma cash balance of £29.2 million.

The current run-rate of cash expense across all commercial applications and the above central capabilities is approximately £2.2 million per month. Following the Placing, there is expected to be no overall change in the current run-rate cash burn at the Group level.

The Company will deploy its resources in each of its identified applications based upon the size of the potential economic returns. As the Company migrates its Hotel & Lodging business towards an indirect business model, this will enable cash to be invested in these other areas.

The Company currently envisages applying its pro forma cash resources following the Placing in the following areas:

Cleaning Technologies

- £2 million to support the commercialisation of its domestic machine post-launch in January 2018

- £5 million to fund the expansion of the North American high performance workwear business

- £7 million to fund the Symphony Project, and to continue to expand sales of its own brand machine in its chosen premium market segments in the US and select international markets

Tanning Technologies

- £5 million to provide resources to enable delivery of accelerated deployment across Europe and to support the roll-out of commercial operations in the Americas

Textile Technologies

- £2 million to provide resources to enable the scale up of trials to production level and to develop full commercial plans

In addition to the above commercialisation plans, the Group will fund central capabilities as follows:

- £2 million on business IT, and more specifically the Company's 'Connect' portal

- £2 million on engineering (i.e. the design of polymer management systems for all forms of industrial applications)

- £1 million for polymer development

- £2 million for intellectual property management

- £1 million for corporate functions including finance, HR and Communications

- £1 million for PLC related costs

6. DETAILS OF THE PLACING

6.1. Description

The Company is proposing to raise approximately £25 million (before fees and expenses) by way of a conditional, non-pre-emptive placing of 11,111,112 new Ordinary Shares, comprising 8,888,890 Main Placing Shares and 2,222,222 WCP Shares, at the Placing Price.

The Company intends to first allot the Main Placing Shares (conditional on Admission) to certain new and existing institutional shareholders of the Company (but excluding the Concert Party) so that the Concert Party would come to hold less than 30% of the Company's voting rights. The Company then intends to separately allot the WCP Shares to Woodford (also conditional on Admission). The issue of the WCP Shares will be conditional upon the Main Placing Shares having first been allotted and the approval by the Independent Shareholders of the Whitewash Resolution. The Company intends that both the Main Placing Shares and the WCP Shares shall be issued at Admission.

The Company has received irrevocable commitments from Woodford to participate in the Placing in respect of all of the WCP Shares.

The Placing Price represents a discount of approximately 12.49% from the closing mid-market price on 11 December 2017, being the latest practicable date prior to the announcement of the Placing. The Placing Shares will represent approximately 11.20% of the Enlarged Share Capital following Admission. In order to broaden the Company's institutional shareholder base and to minimise the time and transaction costs of the Placing, the Placing Shares are only being placed by Jefferies and Berenberg with a limited number of existing and new institutional shareholders. The Placing Shares are not being made available to the public.

The Placing Shares will be issued credited as fully paid and will be identical to and rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all future distributions, declared, paid or made in respect of the Ordinary Shares following the date of Admission.

6.2. Placing Agreement

In connection with the Placing, the Company has entered into the Placing Agreement pursuant to which Jefferies and Berenberg have agreed, in accordance with its terms, to use reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price. The Placing is not underwritten. In accordance with the terms of the Placing Agreement, the Placing is conditional upon, amongst other things, the passing of the Resolutions, the Rule 9 Waiver being approved, the conditions in the Placing Agreement being satisfied or (if applicable) waived and the Placing Agreement not having been terminated in accordance with its terms prior to Admission occurring on or before 29 December 2017 (or such later date as the Company and Jefferies (having consulted with Berenberg) may agree, not being later than 19 January 2018).

The Placing Agreement contains certain warranties given by the Company concerning the accuracy of information given in the Circular and this announcement, as well as other matters relating to the Group and its business. The Placing Agreement is terminable by Jefferies and Berenberg in certain circumstances up until the time of Admission, including, inter alia, should there be a breach of a warranty contained in the Placing Agreement or a force majeureevent takes place or a material adverse change occurs to the business of the Company or the Group. The Company has also agreed to indemnify Jefferies and Berenberg against all losses, costs, charges and expenses which Jefferies and Berenberg may suffer or incur as a result of, occasioned by or attributable to the carrying out of its duties under the Placing Agreement.

6.3. Admission of the Placing Shares

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. Subject, inter alia, to the passing of the Resolutions at the General Meeting it is expected that admission to AIM will become effective in respect of, and that dealings on AIM will commence in, all of the Placing Shares, on or around 29 December 2017.

It is expected that CREST accounts of the investors in the Placing Shares who hold their Ordinary Shares in CREST will be credited with their Placing Shares on 29 December 2017. In the case of investors in the Placing Shares holding their Ordinary Shares in certificated form, it is expected that certificates will be dispatched by 15 January 2018. Pending dispatch of the share certificates or the crediting of CREST accounts, the Registrar will certify any instruments of transfer against the register.

7. IMPORTANCE OF THE VOTE, IRREVOCABLE UNDERTAKINGS AND RECOMMENDATION

Irrevocable undertakings and letters of intent

In aggregate, the Company has received irrevocable undertakings to vote in favour of the Resolutions to be proposed at the General Meeting in respect of:

John Samuel, who is an Independent Director and holds shares in the Company, has irrevocably undertaken to vote in favour of all Resolutions in respect of his holdings, amounting to 1,477,188 Ordinary Shares representing approximately 1.68% of the existing issued ordinary share capital of the Company.

In addition to John Samuel, certain other Shareholders have irrevocably undertaken to vote in favour of the Resolutions as follows:

- in respect ofthe Main Placing Resolutions and the WCP Resolutions, 46,737,910 existing Ordinary Shares, representing, in aggregate, approximately 55.46% of the existing issued ordinary share capital of the Company entitled to vote on these Resolutions; and

- in respect of the Whitewash Resolution, on which only the Independent Shareholders are entitled to vote, 7,255,774 existing Ordinary Shares, representing, in aggregate, approximately 43.98% of the existing issued ordinary share capital of the Company entitled to vote on this Resolution.

In addition, certain other Shareholders have provided letters of intent to vote in favour of the Main Placing Resolutions and the WCP Resolutions in respect of12,899,275 existing Ordinary Shares, representing, in aggregate, approximately 15.31% of the existing issued ordinary share capital of the Company.

Voting rights limitations

The members of the Concert Party have also irrevocably undertaken to exercise, in aggregate, less than 30% of the voting rights attaching to the shares of the Company, in respect of the Main Placing Resolutions and WCP Resolutions. The members of the Concert Party are not entitled to vote in respect of the Rule 9 Waiver.

Invesco Asset Management Limited, IP Group Plc, Baillie Gifford & Co, Parkwalk Advisors and Mr Alistair Kilgourare considered not to be independent in respect of the Rule 9 Waiver by virtue of their participation in the Placing or by virtue of their being presumed to be acting in concert (within the meaning of the Takeover Code) with participants in the Placing, and will each therefore only be entitled to vote in respect of the Main Placing Resolutions and WCP Resolutions.

Recommendation

The Independent Directors, who have been so advised by Jefferies as to the financial terms of the Placing and Rule 9 Waiver, consider the terms of the Placing and Rule 9 Waiver to be fair and reasonable and in the best interests of the Independent Shareholders and the Company as a whole.

In providing advice to the Independent Directors, Jefferies has taken into account the Independent Directors' commercial assessments.

The Independent Directors consider that the Placing and the Resolutions are in the best interests of the Company and its Shareholders as a whole and unanimously recommend that Shareholders vote in favour of each of the Resolutions to be proposed at the General Meeting on which they are entitled to vote.

Important Notice

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN THE APPENDIX ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ('EEA') WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC, AS AMENDED FROM TIME TO TIME, AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE 'PROSPECTUS DIRECTIVE') ('QUALIFIED INVESTORS'); AND (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE 'ORDER'); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ('HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC') OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS 'RELEVANT PERSONS').

THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THE APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THE APPENDIX IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT AND THE APPENDIX HAS BEEN ISSUED BY AND IS THE SOLE RESPONSIBILITY OF THE COMPANY.

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, IS NOT AN OFFER FOR SALE OR SUBSCRIPTION IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. THE SECURITIES MENTIONED HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE 'SECURITIES ACT') OR UNDER ANY SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, RESOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THERE WILL BE NO PUBLIC OFFER OF THE SECURITIES MENTIONED HEREIN IN THE UNITED STATES.

THE SECURITIES MENTIONED HEREIN HAVE NOT BEEN, NOR WILL BE, APPROVED OR DISAPPROVED BY THE US SECURITIES AND EXCHANGE COMMISSION (THE 'SEC'), ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY IN THE UNITED STATES, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE PLACING OR THE ACCURACY OR ADEQUACY OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, REGULATORY, TAX, BUSINESS, FINANCIAL AND RELATED ASPECTS OF AN ACQUISITION OF PLACING SHARES.

No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that the earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The price of Ordinary Shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the Placing Shares.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

Annexure 1
TERMS AND CONDITIONS OF THE Placing
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE Placing

1. Details of the Placing

1.1 Jefferies and Berenberg (the 'Bookrunners') have entered into an agreement with the Company (the 'Placing Agreement') under which, subject to the terms and conditions set out in that agreement, each of the Bookrunners have severally agreed, as agents and on behalf of the Company, to use their respective reasonable endeavours to procure placees (the 'Placees') for the Placing Shares at a price of 225p per Placing Share (the 'Placing Price'), where:

1.1.1 8,888,890 Ordinary Shares (the 'Main Placing Shares') shall be allocated and issued to new and existing shareholders of the Company (other than the Concert Party); and

1.1.2 2,222,222 Ordinary Shares (the 'WCP Shares') shall be allocated and issued to one or more members of the Concert Party,

in accordance with such allocation determined by agreement between the Company and the Bookrunners pursuant to the bookbuilding process (the 'Bookbuild'), described in this announcement and set out in the Placing Agreement. The placing of the Main Placing Shares and the WCP Shares (together, the 'Placing') is not underwritten by the Bookrunners.

1.2 The Placing will be in respect of 8,888,890 Main Placing Shares and 2,222,222 WCP Shares (together, the 'Placing Shares'). The Placing Shares will be issued conditional on, amongst other things, the approval by Shareholders of the Resolutions which will: (i) grant authority to the Directors to allot the Placing Shares and disapply pre-emption rights in respect of the Placing Shares; and (ii) approve a proposed waiver of Rule 9 of the Takeover Code. The Circular containing details of the proposed Placing and the notice of the General Meeting will be sent to shareholders shortly following the publication of this announcement.

1.3 The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares of the Company including the right to receive all dividends and other distributions declared, made or paid on or in respect of such Ordinary Shares after the date of issue of the relevant Placing Shares.

1.4 As a term of the Placing, the Company has agreed that it will not issue or sell any Ordinary Shares (other than the Placing Shares) for a period ending three months after Admission, without Jefferies' prior consent, acting on behalf of the Bookrunners following consultation with Berenberg. This agreement does not however prevent the Company from granting or satisfying exercises of options granted pursuant to existing share schemes of the Company.

2. Application for admission to trading

Application will be made to the London Stock Exchange for the Admission of the Main Placing Shares and the WCP Shares to trading on AIM. It is expected that Admission will become effective and that dealings in the Placing Shares will commence on or around 29 December 2017.

3. Bookbuild

3.1 This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares. The Bookrunners shall be entitled to effect the Placing by such alternative method to the Bookbuild as agreed between the Company and the Bookrunners.

4. Participation in, and principal terms of, the Placing

4.1 Jefferies is acting as nominated adviser, joint bookrunner and joint broker of the Company in respect of the Placing. Berenberg is acting as joint bookrunner and joint broker of the Company in respect of the Placing. The Bookrunners are arranging the Placing severally, and not jointly, nor jointly and severally.

4.2 Participation in the Placing will only be available:

4.2.1 in respect of the Main Placing Shares, to persons who may lawfully be, and are, invited to participate by either of the Bookrunners (but shall not include any member of the Concert Party); and

4.2.2 in respect of the WCP Shares, to persons who may lawfully be, and are, invited to participate by either of the Bookrunners (such Placees being restricted to the members of the Concert Party).

4.3 Jefferies, Berenberg and each of their respective affiliates and partners are entitled to enter bids in the Bookbuild as principal.

4.4 The Bookbuild has been carried out on the basis of the Placing Price of 225p per Placing Share payable by all Placees whose bids are successful in accordance with this Appendix and the settlement instructions contained in the Placee's contract note. The number of the Placing Shares to be allocated and issued to each Placee will be determined by agreement between the Company and the Bookrunners following the Bookbuild.

4.5 The Bookbuild has now closed. Jefferies may, in agreement with the Company and having consulted with Berenberg, accept bids that are received after the Bookbuild has closed. The Company reserves the right (upon the agreement of Jefferies, having consulted with Berenberg) to reduce or seek to increase the amount to be raised pursuant to the Placing.

4.6 Each prospective Placee's allocation will be determined by agreement between the Company and the Bookrunners, and will be confirmed orally by either Jefferies or Berenberg, as agents of the Company. That oral confirmation will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) in favour of Jefferies, Berenberg and the Company to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's articles of association.

4.7 Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to each of the Bookrunners as agents of the Company, to pay in cleared funds, an amount equal to the product of the Placing Price and the number of Placing Shares that such Placee has agreed to subscribe for and the Company has agreed to allot and issue to that Placee, in accordance with this Appendix and the settlement instructions contained in the Placee's contract note.

4.8 Jefferies (acting on behalf of the Bookrunners, following consultation with Berenberg) may choose to accept bids, either in whole or in part, and may scale down any bids for this purpose on such basis as it determines. Jefferies may also, notwithstanding paragraphs 4.6 and 4.7 above, subject to the prior agreement with the Company and Berenberg: (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time.

4.9 A bid in the Bookbuild will be made on the terms and subject to the conditions in this Appendix and will be legally binding on the Placee on behalf of which it is made and, except with Jefferies' consent (acting on behalf of the Bookrunners, following consultation with Berenberg), will not be capable of variation or revocation after the time at which it is submitted. However, each Bookrunner reserves the right (on agreement between the Company and the Bookrunners) to amend the terms and conditions in this Appendix with respect to individual Placees, provided that no such amendment is made to the Placing Price.

4.10 Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be subscribed for pursuant to the Placing will be required to be made at the same time, on the basis explained below under 'Registration and Settlement'.

4.11 All obligations under the Bookbuild and the Placing will be subject to fulfilment or waiver (as applicable) of the conditions referred to below under 'Conditions of the Placing' and to the Placing not being terminated on the basis referred to below under 'Termination of the Placing Agreement'.

4.12 By participating in the Bookbuild, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

4.13 To the fullest extent permissible by law, neither Jefferies, Berenberg nor any of their respective affiliates, agents, directors, officers, partners or employees shall have any responsibility or liability (whether in contract, tort or otherwise) to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither Jefferies, Berenberg nor any of their respective affiliates, agents, directors, officers, partners or employees shall have any responsibility or liability (whether in contract, tort or otherwise and including to the fullest extent permissible by law, any fiduciary duties) in respect of their conduct of the Bookbuild or of such alternative method of effecting the Placing as Jefferies (on behalf of the Bookrunners) may determine.

4.14 Placees will have no rights against either of the Bookrunners, the Company nor any of their respective directors, partners or employees under the Placing Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999 (as amended).

5. Conditions of the Placing

5.1 The Placing is conditional upon the Placing Agreement becoming unconditional with respect to the Placing and not having been terminated in accordance with its terms prior to Admission. The obligations of the Bookrunners under the Placing Agreement in respect of the Placing is conditional on, amongst other things:

5.1.1 the passing of the Resolutions at the General Meeting in the form set out in the notice of general meeting contained in the Circular, subject to any amendment approved by Jefferies (on behalf of the Bookrunners, having consulted with Berenberg);

5.1.2 the Rule 9 Waiver having been granted and not revoked by the Takeover Panel (conditional only on approval by the Independent Shareholders);

5.1.3 the performance by the Company of all its obligations under the Placing Agreement so far as the same fall to be performed prior to Admission;

5.1.4 Admission taking place by 8.00 a.m. (London time) on 29 December 2017 or such later date as the Company and Jefferies (on behalf of the Bookrunners, having consulted with Berenberg) may otherwise agree (the ' Admission Date'); and

5.1.5 in the good faith opinion of Jefferies (having consulted with Berenberg), no material adverse change in, or any development involving a prospective material adverse change in, or affecting, the condition (financial, operational, legal or otherwise) or the earnings, management, business affairs, solvency, credit rating or prospects of the Company, or of the Group (taken as a whole)('Material Adverse Change') having occurred between the date of this Agreement and Admission.

5.2 If:

5.2.1 any of the conditions contained in the Placing Agreement in relation to the Placing (including those described in 5.1above)(the 'Placing Conditions') are not fulfilled or waived by Jefferies (acting on behalf of the Bookrunners, following consultation with Berenberg), by the time or date where specified (or, in each case, such later time and/or date as the Company and Jefferies may agree, having consulted with Berenberg); or

5.2.2 the Placing Agreement is terminated in the circumstances specified below prior to Admission,

the Placing will not proceed and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

5.3 Jefferies (acting on behalf of the Bookrunners, having consulted with Berenberg) may, at its absolute discretion and upon such terms as it thinks fit, waive compliance by the Company with the whole or any part of certain of the Placing Conditions in the Placing Agreement save that the conditions in the Placing Agreement relating to Admission Date. Any such extension or waiver will not affect Placees' commitments as set out in this announcement.

5.4 None of Jefferies, Berenberg, the Company nor any other person shall have any liability (whether in contract, tort or otherwise) to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating the Placing each Placee agrees that any such decision is within the absolute discretion of the Jefferies (acting on behalf of the Bookrunners).

6. Termination of the Placing Agreement

6.1 Jefferies may at any time prior to Admission terminate the Placing Agreement (having consulted with Berenberg) by giving notice in writing to the Company if, amongst other things:

6.1.1 the Company's application for Admission is refused by the London Stock Exchange or, in the judgement of Jefferies acting in good faith in pursuance of its duties as nominated adviser, will not be granted

6.1.2 there has occurred since the date of the Placing Agreement a Material Adverse Change in and, in the good faith opinion of Jefferies, the effect of such change is such that it would materially prejudice the success of the Placing or the distribution of Placing Shares; or

6.1.3 Jefferies not having received confirmation in a form acceptable to it confirming irrevocable acceptance of the offer contained in this announcement from proposed Placees reasonably acceptable to Jefferies in respect of all the Placing Shares; or

6.1.4 there has occurred:

(a) any government regulation or other occurrence of any nature whatsoever which, in the opinion of Jefferies, materially and adversely affects or will or is reasonably likely materially and adversely to affect the business of the Group taken as a whole;

(b) a suspension or limitation in trading in securities generally on the London Stock Exchange's market for listed securities, or a banking moratorium has been declared by the United Kingdom, the United States federal authorities, a member of the European Union, or New York state authorities; or

(c) any outbreak of hostilities or escalation of hostilities or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, or currency exchange rates in any case the effect of which, in the good faith opinion of Jefferies, makes it impractical or inadvisable to proceed with the Placing.

6.2 Upon such termination of the Placing Agreement, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions. For the avoidance of doubt, the Placing cannot be terminated after Admission has occurred to the extent it relates to the Placing Shares.

6.3 Whilst, in certain circumstances broadly equivalent to those described above, Berenberg may also have the right to terminate its obligations under the Placing Agreement, such right shall not entitle Berenberg to unilaterally terminate the Placing Agreement unless also elected by Jefferies and accordingly (subject to Jefferies' right to terminate the Placing Agreement in such circumstances) the termination by Berenberg of its obligations under the Placing Agreement shall be without prejudice to the surviving rights and obligations of Jefferies, the Company and any Placees.

6.4 The rights and obligations of the Placees shall terminate only in the circumstances described in these terms and conditions and in the Placing Agreement and will not be subject to termination by the Placee or any prospective Placee at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by Jefferies and/or Berenberg of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of such Bookrunner and that it need not make any reference to, or consult with, Placees and that it shall have no responsibility or liability to Placees whatsoever in connection with any such exercise and neither the Company nor the Bookrunners nor any of their respective directors, officers, employees, agents or affiliates shall have any liability to Placees whatsoever in connection with any such exercise or failure to exercise or otherwise.

7. No prospectus

7.1 The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require a prospectus in the UK. No offering document, prospectus or admission document has been or will be submitted to be approved by the FCA or submitted to the London Stock Exchange in relation to the Placing and Placees' commitments will be made solely on the basis of their own assessment of the Company, the Placing Shares and the Placing based on the Company's publicly available information taken together with the information contained in this announcement (including this Appendix), and subject to the further terms set forth in the contract note to be provided to individual prospective Placees.

7.2 Each Placee, by accepting a participation in the Placing, agrees that the content of this announcement (including this Appendix) is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information representation, warranty, or statement made by or on behalf of the Company, Berenberg or Jefferies or any other person and none of Jefferies, Berenberg or the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude or limit the liability of any person for fraudulent misrepresentation by that person.

8. Registration and Settlement

8.1 Settlement of transactions in the Placing Shares following Admission will take place within the system administered by CREST, subject to certain exceptions. Jefferies (acting on behalf of the Bookrunners, having consulted with Berenberg) and the Company reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if, in their opinion, delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

8.2 Each Placee to be allocated Placing Shares in the Placing will be sent a contract note stating the number of Placing Shares allocated to it at the Placing Price and settlement instructions. The number of Placing Shares allocated to each Placee will be allocated in a manner determined by agreement between the Company and the Bookrunners, and Placees will be notified of the relevant allocation in the contract note.

8.3 Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with Jefferies and/or Berenberg (as the case may be).

8.4 The Company will deliver the Placing Shares to a CREST account operated by Jefferies as agent for the Company and Jefferies will enter its delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

8.5 It is expected that settlement of the Placing Shares will take place on 29 December 2017 on a delivery versus payment basis.

8.6 Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by Jefferies (acting on behalf of the Bookrunners).

8.7 Each Placee is deemed to agree that, if it does not comply with these obligations, Jefferies may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Jefferies' account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties thereon) or other similar taxes imposed in any jurisdiction which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating an intention to subscribe for Placing Shares, each Placee confers on Jefferies all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which Jefferies lawfully takes in pursuance of such sale.

8.8 If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation or contract note is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee of such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

8.9 Each Placee acknowledges and agrees that the Company is responsible for the allotment of the Placing Shares to the Placees and each of the Bookrunners shall have no liability to the Placees for the failure of the Company to fulfil those obligations.

9. Representations and warranties

9.1 By participating in the Placing, each Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with Jefferies and Berenberg (in their respective capacities as joint bookrunners and agents of the Company, in each case as a fundamental term of their application for relevant Placing Shares), the following:

9.1.1 it has read and understood this announcement (including this Appendix) in its entirety and that its subscription of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein;

9.1.2 the Placing does not constitutes a recommendation or financial product advice and neither Jefferies nor Berenberg has had regard to its particular objectives, financial situation or needs;

9.1.3 unless paragraph 9.1.4below applies, it has neither received nor relied on any 'inside information' (for the purposes of EU Market Abuse Regulation (2014/596/EU)('MAR') and section 56 of the Criminal Justice Act 1993) concerning the Company in accepting this invitation to participate in the Placing;

9.1.4 if it has received any 'inside information' (for the purposes of MAR and section 56 of the Criminal Justice Act 1993) in relation to the Company and its securities, it confirms that it has received such information within the market soundings regime provided for in article 11 of MAR and associated delegated regulations and it has not: (i) dealt (or attempted to deal) in the securities of the Company; (ii) encouraged, recommended or induced another person to deal in the securities of the Company; or (iii) unlawfully disclosed inside information to any person, prior to the information being made publicly available;

9.1.5 subject to the Rule 9 Waiver and the Resolutions being passed at the General Meeting, its participation in the Placing would not give rise to an offer being required to be made by it or any person with whom it is acting in concert pursuant to Rule 9 of the Takeover Code;

9.1.6 it has the power and authority to carry on the activities in which it is engaged, to subscribe for and/or acquire the Placing Shares and to execute and deliver all documents necessary for such acquisition and/or subscription;

9.1.7 that no offering document listing particulars, prospectus or admission document has been or will be prepared in connection with the Placing and it has not received and will not receive a prospectus, admission document or other offering document in connection with the Bookbuild, the Placing or the Placing Shares;

9.1.8 that the existing Ordinary Shares in the capital of the Company are admitted to trading on AIM and that the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of AIM which includes a description of the nature of the Company's business and its most recent balance sheet and profit and loss account and that it is able to obtain or access such information and such information or comparable information concerning any other publicly traded company, in each case without undue difficulty;

9.1.9 that neither Jefferies, Berenberg nor the Company nor any of their respective affiliates, agents, directors, officers, partners or employees nor any person acting on behalf of any of them has provided, and none of them will provide it, with any material regarding the Placing Shares or the Company or any other person other than this announcement nor has it requested Jefferies, Berenberg, the Company, any of their respective affiliates, agents, directors, officers, partners or employees nor any person acting on behalf of any of them to provide it with any such information;

9.1.10 unless otherwise specifically agreed with Jefferies (acting on behalf of the Bookrunners, having consulted with Berenberg), that neither it nor the beneficial owner of the Placing Shares is, or at the time the Placing Shares are acquired, neither it nor the beneficial owner of the Placing Shares will be, a resident of, or otherwise located in, the United States, Australia, Canada, Japan or the Republic of South Africa, and it further acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada, Japan or the Republic of South Africa and subject to certain exceptions, may not be offered, sold transferred delivered or distributed, directly or indirectly, in or into those jurisdictions;

9.1.11 that: (i) it is outside the United States and is not acquiring the Placing Shares for the account of any person who is located in the United States; (ii) it is acquiring the Placing Shares in an 'offshore transaction' (within the meaning of Regulation S ('Regulation S') under the US Securities Act of 1933, as amended (the 'Securities Act')); (iii) it is not acquiring any of the Placing Shares as a result of any form of 'directed selling efforts' as defined in Rule 902(c) under Regulation S; (iv) it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution directly or indirectly, of any such Placing Shares into the United States; and (v) it is not within Australia, Canada, Japan, the Republic of South Africa or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares, and it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution directly or indirectly, of any such Placing Shares into any of the jurisdictions referred to above,

9.1.12 that the content of this announcement is exclusively the responsibility of the Company and that neither Berenberg, Jefferies nor any person acting on their respective behalf have or shall have any liability for any information, representation or statement contained in this announcement or any information previously or subsequently published by or on behalf of the Company, including, without limitation, any information required to be published by the Company pursuant to applicable laws (the 'Exchange Information') and will not be liable for its decision to participate in the Placing based on any information, representation or statement contained in this announcement or otherwise. It further represents, warrants and agrees that the only information on which it is entitled to rely and on which it has relied in committing itself to subscribe for the Placing Shares is contained in this announcement and any information previously published by the Company by notification to a RNS, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by Jefferies, Berenberg or the Company and neither Jefferies, Berenberg nor the Company will be liable for its decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. It further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing. None of Jefferies, Berenberg, the Company or any of their respective affiliates, agents, directors, officers, partners or employees has made any representations to it express or implied, with respect to the Company, the Placing and the Placing Shares or the accuracy, completeness or adequacy of the Exchange Information, and each of them expressly disclaims any liability in respect thereof. Nothing in this paragraph or otherwise in this announcement excludes the liability of any person for fraudulent misrepresentation made by that person;

9.1.13 neither it, nor the person specified by it for registration as holder of Placing Shares is, or is acting as nominee or agent for, and the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of theFinance Act of 1986 (depositary receipts and clearance services);

9.1.14 that it has complied with its obligations under the Criminal Justice Act 1993, MAR and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000, the Terrorism Act 2006, the Money Laundering Regulations 2007 and the Money Laundering Sourcebook of the FCA (the 'Money Laundering Regulations') and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

9.1.15 that it is acting as principal only in respect of the Placing or, if it is acting for any other person (i) it is duly authorised to do so and has full power to make the acknowledgments, representations and agreements herein on behalf of each such person; and (ii) it is and will remain liable to the Company, Berenberg and/or Jefferies for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person);

9.1.16 if it is a financial intermediary, as that term is used in Article 3(2) of the EU Prospectus Directive (which shall mean Directive 2003/71/EC and amendments thereto, including the 2010 PD Amending Directive to the extent implemented in the Relevant Member State), that the Placing Shares subscribed by it in the Placing will not be acquired on a non-discretionary basis on behalf of nor will they be acquired with a view to their offer or resale to persons in a member state of the EEA other than qualified investors or in circumstances in which the prior consent of Jefferies (acting on behalf of the Bookrunners, having consulted with Berenberg) has been given to the proposed offer or resale;

9.1.17 that it has not offered or sold and will not offer or sell any Placing Shares to the public in any member state of the EEA except in circumstances falling within Article 3(2) of the Prospectus Directive which do not result in any requirement for the publication of a prospectus pursuant to Article 3 of that Directive;

9.1.18 that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

9.1.19 that it has complied with and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

9.1.20 if in a member state of the EEA, unless otherwise specifically agreed with Jefferies in writing, that it is a qualified investor within the meaning of Article 2(l)(e) of the Prospectus Directive;

9.1.21 if in the United Kingdom, that it is a person (i) having professional experience in matters relating to investments who falls within the definition of 'investment professionals' in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the 'Order') or (ii) who falls within Article 49(2) (a) to (d) ('High Net Worth Companies, Unincorporated Associations, etc') of the Order, or (iii) to whom this announcement may otherwise lawfully be communicated;

9.1.22 that no action has been or will be taken by either the Company, Berenberg or Jefferies or any person acting on behalf of the Company, Berenberg or Jefferies that would or is intended to permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

9.1.23 that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions which apply to it and that it has fully observed such laws and obtained all such governmental and other guarantees, permits authorisations, approvals and consents which may be required thereunder and complied with all necessary formalities and that it has not taken any action or omitted to take any action which will or may result in Jefferies, Berenberg, the Company or any of their respective directors officers, partners, agents, employees or advisers acting in breach of the legal or regulatory requirements of any jurisdiction in connection with the Placing;

9.1.24 that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to its participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this announcement) and will honour such obligations;

9.1.25 that it and any person acting on its behalf will make payment for the Placing Shares allocated to it in accordance with this announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as Jefferies may in its absolute discretion determine and without liability to it, but it will remain liable for any amount by which the net proceeds of such sale falls short of the product of the Placing Price and the number of Placing Shares allocated to it and may be required to bear and indemnify the Bookrunners and their affiliates, directors, partners, officers and employees on an after-tax basis against any stamp duty, stamp duty reserve tax or other similar taxes (together with any interest or penalties due pursuant to the terms set out or referred to in this Announcement) which may arise upon the sale of its Placing Shares on its behalf;

9.1.26 that its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares to which it will be entitled, and required, to subscribe for, and that Jefferies (having agreed with the Company and Berenberg) may call upon it to subscribe for a lower number of Placing Shares (if any) but in no event in aggregate more than the aforementioned maximum;

9.1.27 that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither Jefferies, Berenberg nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax or other similar taxes resulting from a failure to observe this requirement. It and any person acting on its behalf agrees to indemnify the Company, Berenberg and Jefferies in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of Jefferies who will hold them as nominee on its behalf until settlement in accordance with standing settlement instructions;

9.1.28 that neither Jefferies, Berenberg nor any of their respective affiliates, agents, directors, officers, partners or employees, nor any person acting on their behalf is making any recommendations to it or advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of either Bookrunner and that neither Bookrunner has any duties or responsibilities to it for providing the protections afforded to its clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

9.1.29 that in making any decision to subscribe for the Placing Shares, it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for or purchasing the Placing Shares. It further confirms that it is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear the economic risk of participating in, and is able to sustain a complete loss in connection with, the Placing. It further confirms that it relied on its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved, and not upon any view expressed or information provided by or on behalf of either Bookrunner;

9.1.30 that in connection with the Placing, Jefferies, Berenberg and any of their respective affiliates acting as an investor for their own account may take up Placing Shares in the Company and in that capacity may retain, purchase or sell for its own account such Placing Shares in the Company and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing. Neither Jefferies nor Berenberg intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so;

9.1.31 that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits, on its own behalf and on behalf of any person on whose behalf it is acting, to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company, Berenberg or Jefferies in any jurisdiction in which it is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

9.1.32 that the Company, Berenberg, Jefferies and their respective affiliates, agents, directors, officers, partners or employees and others will rely upon the truth and accuracy of the representations, warranties and acknowledgements set forth herein and which are given to the Bookrunners on their own behalf and on behalf of the Company and are irrevocable and it irrevocably authorises the Company, Berenberg and Jefferies to produce this announcement, pursuant to in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein;

9.1.33 none of the Company, Berenberg or Jefferies owes any fiduciary or other duties to any Placee in respect of any acknowledgements, confirmations, undertakings, representations, warranties or indemnities in the Placing Agreement;

9.1.34 its commitment to take up Placing Shares on the terms set out in this Announcement (including this Appendix) will continue notwithstanding any amendment that may or in the future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company, Berenberg or Jefferies' conduct of the Placing; and

9.1.35 that it will indemnify and hold the Company, Berenberg and Jefferies and their respective affiliates, agents, directors, officers, partners or employees harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this announcement and further agrees that the provisions of this announcement shall survive after completion of the Placing.

9.2 By participating in the Placing, each Placee (and any person acting on the Placee's behalf) subscribing for Placing Shares acknowledges that the Placing Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and are being offered and sold solely outside the United States in 'offshore transactions' pursuant to and in reliance on Regulation S, in a transaction not involving a public offering of securities in the United States.

9.3 Please also note that the agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the UK relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct from the Company for the Placing Shares in question. The Company, Berenberg and Jefferies are not liable to bear any transfer taxes that arise on a sale of Placing Shares subsequent to their acquisition by Placees or for transfer taxes arising otherwise than under the laws of the United Kingdom. Each Placee should, therefore, take its own advice as to whether any such transfer tax liability arises. Furthermore, each Placee agrees to indemnify on an after-tax basis and hold Jefferies, Berenberg and the Company and their respective affiliates harmless from any and all interest, fines or penalties in relation to stamp duty, stamp duty reserve tax and all other similar duties or taxes to the extent that such interest, fines or penalties arise from the unreasonable default or delay of that Placee or its agent.

9.4 Each Placee and any person acting on behalf of each Placee acknowledges and agrees that Jefferies, Berenberg or any of their respective affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

9.5 When a Placee or person acting on behalf of the Placee is dealing with either Bookrunner, any money held in an account with such Bookrunner on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from such Bookrunner's money in accordance with the client money rules and will be used by the relevant Bookrunner in the course of its own business; and the Placee will rank only as a general creditor of such Bookrunner.

9.6 All times and dates in this announcement may be subject to amendment. Jefferies and/or Berenberg shall notify the Placees and any person acting on behalf of the Placees of any changes.

9.7 The rights and remedies of Jefferies, Berenberg and the Company under these Terms and Conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

9.8 Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

DEFINITIONS

The following definitions apply throughout this announcement, unless the context requires otherwise:

'Admission' the admission of the Placing Shares to trading on AIM and suchadmission becoming effective in accordance with the AIM Rules

'AIM' a market operated by the London Stock Exchange

'AIM Rules' the rules for AIM companies and their nominated advisersissued by the London Stock Exchange

'Americas' North and South America

'Berenberg' Joh. Berenberg, Gossler & Co. KG, London Branch, joint broker and joint bookrunner

'CF Woodford Investment Fund' a company incorporated in England and Wales with registered number IC001010

'Circular'means the circular to be published by the Company on or around 12 December 2017 in relation to the Placing which includes notice convening the General Meeting at which the resolutions will be proposed.

'Company' Xeros Technology Group plc

'Concert Party' Woodford, WIML, Mercia, EVL and the Enterprise Ventures Funds, (as further detailed in the Additional Information section of the Circular) who are presumed to be acting in concert for the purposes of the Takeover Code

'CREST' the relevant system (as defined in the CREST Regulations) in respectof which Euroclear is the Operator (as defined in the CREST Regulations)

'CREST Regulations' The Uncertificated Securities Regulations 2001 (SI 2001/3755)

'Directors' or 'Board' the board of directors of the Company

'EMEA' Europe, the Middle East and Africa

'Enlarged Share Capital' the number of Ordinary Shares in issue assuming completion of the Placing

'Enterprise Ventures Funds' RisingStars Growth Fund II, Finance Yorkshire Seedcorn LP and South Yorkshire Investment Fund Limited

'EU' the EuropeanUnion

'Euroclear' Euroclear UK & Ireland Limited

'EVL' Enterprise Ventures Limited

'Financial Conduct Authority' the UK's Financial Conduct Authority

'Forward Channel Partner' an independent distributor of commercial laundry equipment who sells, installs, commissions and services the Company's washing machines on a non-exclusive basis within a defined geographic region

'Form of Proxy' the form of proxy for use in connection with the General Meeting accompanying the circular

'FP Omnis Portfolio Investments ICVC' a company incorporated in England and Wales with registered number IC000982

'FSMA'means Financial Services and Markets Act 2000

'General Meeting' the general meeting of the Company convened for 10.00 a.m. on 28 December 2017 at Squire Patton Boggs (UK) LLP at 7 Devonshire Square, London EC2M 4YH.

'Group' the Company and its subsidiaries Xeros Limited, Xeros Inc. and Xeros High Performance Work Wear, Inc.

'Independent Directors' the Directors, other than Julian Viggars (who is a board representative of the Enterprise Ventures Funds);

'Independent Shareholders' the Shareholders, other than (i) members of the Concert Party and any person acting in concert with them (including any members of their immediate families, related trusts or connected persons) who holds Ordinary Shares and (ii) the Shareholders who subscribe for Main Placing Shares and any person acting in concert with them (including any members of their immediate families, related trusts or connected persons)

'Jefferies' Jefferies International Limited, the Company's nominated adviser, joint broker and joint bookrunner

'London Stock Exchange' London Stock Exchange plc

'Main Placing Resolutions' Resolutions 1 and 4 proposed to be passed at the General Meeting, which relates to the issue of the Main Placing Shares

'Main Placing Shares' 8,888,890 new Ordinary Shares to be allotted and issued to new and existing institutional shareholders (other than the Concert Party) by the Company pursuant to the Placing

'MAR'means the EU Market Abuse Regulation (2014 / 596 / EU)

'Mercia' Mercia Technologies PLC

'Notice of General Meeting' the notice of the General Meeting set out in the Circular

'North America' the US and Canada

'OI&G' Omnis Income and Growth Fund, being a sub fund of FP Omnis Portfolio Investments ICVC

'OMWEIF' Old Mutual Woodford Equity Income Fund, being a sub-fund of Old Mutual MultiManager Trust

'Old Mutual MultiManager Trust' an authorised unit trust established in England and Wales and authorised by the Financial Conduct Authority with product reference number 200108

'OPL' the on-premise laundry market

'Ordinary Shares' ordinary shares of 0.15 pence each in the capital of the Company

'Panel' UK Panel on Takeovers and Mergers

'Placing' the proposed placing by Jefferies and Berenberg, as agents to the Company, of the Placing Shares at the Placing Price on a non-pre-emptive basis, on the terms and conditions set out in the Placing Agreement

'Placing Agreement' the agreement between the Company, Jefferies andBerenberg dated 12 December 2017 in connection with the Placing

'Placing Price' 225 pence per Placing Share

'Placing Shares' the Main Placing Shares and the WCP Shares

'Resolutions' the resolutions to be proposed at the General Meeting, as set out inthe Notice of General Meeting in the Circular

'RNS'means the regulatory information service approved by the London Stock exchange for the distribution of AIM announcements

'Rule 9 Waiver' the conditional waiver by the Panel of the obligation that, following the issue of the Main Placing Shares, would otherwise arise on the Concert Party to make a general offer to all Shareholders pursuant to Rule 9 of the Takeover Code as a result of the allotment and issue of the WCP Shares

'Shareholders' holders of Ordinary Shares

'Symphony Project' the project pursuant to which the Company provides its technology to partner OEMs to allow them to incorporate polymer cleaning systems into their commercial washing machines

'Takeover Code' City Code on Takeovers and Mergers published by the Panel

'Takeover Panel'means the panel on Takeover and Mergers

'UK' means United Kingdom

'US' or 'United States' means United States of America, its territories and possessions, any state of the United States of America and the District of Columbia

'WEIF' the CF Woodford Equity Income Fund, being a sub fund of CF Woodford Investment Fund

'WIML' Woodford Investment Management Limited, being the investment manager for Woodford

'WCP Resolutions' Resolutions 2 and 5 proposed to be passed at the General Meeting, which relates to the issue of WCP Shares

'WCP Shares' 2,222,222 new Ordinary Shares to be allotted and issued to one or more members of the Concert Party by the Company pursuant to the Placing

'WPCT' Woodford Patient Capital Trust plc (being a fund managed by WIML)

'Whitewash Resolution' Resolution 3 proposed to be passed at the General Meeting, which relates to the Rule 9 Waiver

'Woodford' together WEIF, WPCT, OI&G and OMWEIF (each being a fund managed by WIML)

All references in this announcement to '£', 'pence' or 'p' are to the lawful currency of the United Kingdom, all references to 'US$' or '$' are to the lawful currency of the United States

Xeros Technology Group plc published this content on 12 December 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 12 December 2017 09:53:05 UTC.

Original documenthttp://otp.investis.com/clients/uk/xeros/rns/regulatory-story.aspx?cid=809&newsid=957327

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Delayed London S.E. Other stock markets 02:59:59 2024-04-24 am EDT			5-day change	1st Jan Change
1.45 ^GBX	0.00%		+3.57%	-50.00%

Apr. 19	Xeros Technology Group Concludes Retail Offer	MT
Apr. 19	Xeros Technology closes retail offer having raised GBP110,000	AN

Xeros Technology Group Concludes Retail Offer	Apr. 19	MT
Xeros Technology closes retail offer having raised GBP110,000	Apr. 19	AN
Shanta Gold takeover approved; Experian to buy illion	Apr. 04	AN
Xeros Technology promotes Alex Tristram to finance director	Mar. 11	AN
Xeros Technology Group plc Appoints Alex Tristram as Finance Director	Mar. 11	CI
Synectics announces contract win; LifeSafe revenue up	Nov. 29	AN
EARNINGS: Xeros expects breakeven next year, Zinc Media narrows loss	23-09-27	AN
AIM WINNERS & LOSERS: Tasty's interim loss widens, shares plunge 31%	23-09-27	AN
Xeros Technology Group plc Reports Earnings Results for the Half Year Ended June 30, 2023	23-09-27	CI
Harworth optimistic on 2027; Plexus extends agreement	23-05-23	AN
Xeros Technology shares surge on garment finishing licensing	23-05-17	AN
AIM WINNERS & LOSERS: Purplebricks sells itself to rival for GBP1	23-05-17	AN
Xeros Technology Group plc Signs Technology License and Distribution Agreement for its Garment Finishing Technology with KRM Tekstil Boya San. Tic Ltd	23-05-17	CI
Xeros Technology Group plc Auditor Raises 'Going Concern' Doubt	23-05-01	CI
FTSE 100 Closed Up 0.4% as China Data Reassures on State of Global Economy	23-04-18	DJ
UK Wage Growth Momentum is Easing, But Pace Is Slower Than Expected	23-04-18	DJ
Xeros Technology shares plunge as loss widens; revenue down	23-04-18	AN
Xeros Technology Group's FY22 Loss Grows	23-04-18	MT
Earnings Flash (XSG.L) XEROS TECHNOLOGY GROUP Reports FY22 Revenue GBP164,000	23-04-18	MT
Earnings Flash (XSG.L) XEROS TECHNOLOGY GROUP Posts FY22 Loss GBX-14.29	23-04-18	MT
Xeros Technology Group plc Reports Earnings Results for the Full Year Ended December 31, 2022	23-04-18	CI
Xeros Technology Enter Filtration Tech Licensing Deal; Shares Up 5%	23-03-20	MT
Xeros Technology signs third licensing agreement for XFilter	23-03-20	AN
Xeros Technology Group plc Announces the Signing of a Third Licensing Agreement for its XFilter Filtration Technology	23-03-20	CI
Xeros Technology Group Signs Five-year Licensing Deal for XFilter Tech; Stock Rises 7%	23-03-09	MT

	1st Jan change	Capi.
XEROS TECHNOLOGY GROUP PLC	-50.00%	4.06M
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PARKER-HANNIFIN CORPORATION	+19.47%	70.68B
INGERSOLL RAND INC.	+17.11%	36.54B
XYLEM INC.	+14.26%	31.6B
FORTIVE CORPORATION	+9.43%	28.41B
FANUC CORPORATION	+11.24%	26.88B
SANDVIK AB	+5.14%	26.57B
TECHTRONIC INDUSTRIES CO. LTD.	+13.92%	24.58B
DOVER CORPORATION	+12.01%	23.67B

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