Water Intelligence : Proposed Fundraising to Accelerate Growth

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THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

Water Intelligence plc

("Water Intelligence" or the "Company" or the "Group")

Proposed Fundraising to Accelerate Growth

PDMR Dealing

Water Intelligence, a leading provider of non-invasive leak detection and remediation services for both potable and non-potable water, today announces that it proposes to raise approximately $9.5 million (£6.9 million) in a placing and subscription through the issue of an aggregate of up to 749,893 new ordinary shares of one penny each in the capital of the Company ("Ordinary Shares") at a price of 920 pence per Ordinary Share (the "Issue Price"), together the ("Fundraising")

The Fundraising comprises a placing (the "Placing") of up to 526,691 new Ordinary Shares ("Placing Shares") to raise up to $6.7 million (£4.8 million) and a subscription (the "Subscription") of up to 223,202 Ordinary Shares ("Subscription Shares") to raise a total of approximately $2.8 million (£2.1 million). As part of the Fundraising, certain directors and persons closely associated with them, as well as certain employees, intend to exercise 250,000 options over Ordinary Shares and to pay up in full Partly Paid Shares ("Exercise Shares") (the Placing Shares, Subscription Shares and Exercise Shares, together the "New Ordinary Shares") and, instead of receiving these shares, have instructed the Company to sell them into the Subscription at the Issue Price.

Summary of the proposed Fundraising

• Fundraising of up to approximately $9.5 million at 920 pence per Ordinary Share, comprising: o Placing of up to 526,691 Ordinary Shares at the Issue Price to raise $6.7 million with
  institutional investors; and
  o Subscription of up to 223,202 Ordinary Shares worth $2.8 million;
• Placing by way of accelerated bookbuild ("ABB");
• Books are open with immediate effect;
• In addition, the exercise and sale of 200,000 options and Partly Paid Shares by Patrick Desouza, Executive Chairman of the Company, and persons closely associated with him, as well as an additional exercise and sale of 50,000 options by other employees of the Group

Reasons for the Fundraising

The proceeds of the Fundraising will be used to provide working capital to fuel further momentum in growth for 2021 and beyond based on the Group's core drivers and five-year growth plan. Since 2016, the Group has grown at a CAGR of 33% in terms of revenues and 53% in terms of profits before tax, with an acceleration of such growth during the four months to 30 April 2021 (47% for revenues and 154% for profits before tax). Global market demand for water and wastewater infrastructure services is growing rapidly due to a number of factors: need for "essential services" with respect to water and wastewater during Covid; adverse impact of climate change on water infrastructure, such as from droughts in the western US and flash freezes in the southern US; increased government spending for

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water infrastructure in various geographies around the world such as the US, particularly the American Jobs Act, and UK. The Group intends to accelerate market capture and will use the proceeds from the Fundraising to:

• invest in accretive corporate reacquisitions of additional franchise-operated locations to further accelerate growth of its American Leak Detection brand; recent franchise re- acquisitions of Las Vegas, Phoenix and North-East Florida, on a pro forma basis, add $8 million of revenue and $2 million of profit before tax annually;
• expand franchise system and corporate-operated locations through national business-to- business sales channels such as insurance and property management;
• expand the Group's American Leak Detection (residential and commercial water and wastewater leaks) and Water Intelligence International (municipal water and wastewater leaks) execution footprint across existing sales geographies in the US, UK, Australia and Canada and select new international territories;
• continue to build-out an expanded organisational infrastructure, especially hiring and training of additional leak detection and repair professionals, to meet market demand and sustain growth throughout Water Intelligence and its subsidiaries;
• continue to automate operations for greater efficiencies through the implementation of technologies such as Salesforce.com's customer relationship management solutions;
• develop proprietary technologies such as sewer diagnostic tools and stormwater and irrigations solutions and provide follow-through sales of such new products to customers; and
• for general working capital purposes.

Details of the Placing and Subscription

WH Ireland Limited ("WH Ireland" or "WHI") is acting as nominated adviser, joint broker and joint bookrunner in connection with the Placing. Dowgate Capital Limited ("Dowgate") is also acting as joint broker and joint bookrunner in connection with the Placing (together the "Bookrunners").

The Placing, by way of an ABB, will be launched immediately upon the release of this announcement and will be made available to eligible new and existing institutional investors. The book will close at the discretion of the Bookrunners. The completion of the Fundraising will be announced as soon as practicable.

The Placing is subject to the terms and conditions set out in the appendix (the "Appendix") to this announcement (which forms part of this announcement, such announcement and the Appendix together being, this "Announcement"). The Placing is not underwritten.

By choosing to participate in the Placing and by making an oral and/or written legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement in its entirety, including the Appendix, and to be making such offer on the terms and subject to the conditions contained herein and to be making the representations, warranties, undertakings and acknowledgements contained in the Appendix to this Announcement.

The Issue Price of 920 pence per New Ordinary Share represents a discount of 1.6 per cent. to the closing mid­ market price of 935 pence per Ordinary Share on 13 July 2021, being the latest practicable date prior to the publication of this Announcement.

The 223,202 New Ordinary Shares issued pursuant to the Subscription will be satisfied by the sale of Exercise Shares.

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The total number of New Ordinary Shares issued pursuant to the Placing and Subscription, when issued, will represent up to approximately 4.2 per cent. of the Company's existing issued share capital.

The New Ordinary Shares, when issued, will be fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of issue.

Application will be made for the New Ordinary Shares to be admitted to trading on the AIM market ("AIM") of London Stock Exchange plc (the "London Stock Exchange"), ("Admission"). Admission is expected to occur on or around 8.00 a.m. on 19 July 2021.

Settlement for the New Ordinary Shares is expected to take place on 19 July 2021. The Fundraising is conditional on, among other things, Admission becoming effective and the placing agreement between the Company and the Bookrunners (the "Placing Agreement") being entered into and not being terminated in accordance with its terms.

The Appendix sets out further information relating to the Placing and the terms and conditions of the Placing.

This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notices" section of this Announcement.

Director Dealings

As indicated above, Patrick DeSouza and persons closely associated with him intend (i) to pay up in full for 120,000 Partly Paid Shares at 85 pence each and to sell the new Ordinary Shares at a price of 920 pence per share and (ii) to exercise 80,000 options over Ordinary Shares at an exercise price of $1.05 and to sell those shares at a price of 920 pence per share. Following such payment, exercise and sale, Patrick DeSouza's interest in the voting rights of the Company will be 4,867,110 (split as to 2,787,110 Ordinary Shares and 2,080,000 Partly Paid Shares), equivalent to 27.60% of the enlarged share capital of the Company, as at Admission.

In addition, Dan Ewell and Laura Hills, directors of the Company have agreed to acquire 7,865 Ordinary Shares and 1,966 Ordinary Shares respectively at a price of 920 pence from an employee who exercised options over Ordinary Shares, subject to regulatory approvals. Following such acquisitions, Mr. Ewell's interest in the voting rights of the Company will be 30,524, equivalent to 0.17% of the enlarged share capital of the Company, as at Admission and Ms Hills' interest in the voting rights of the Company will be 116,196, equivalent to 0.66% of the enlarged share capital of the Company, as at Admission.

Enquiries:

Water Intelligence plc

Patrick DeSouza, Executive Chairman

Tel: +1 203 654 5426

WH Ireland Limited - NOMAD & Joint Broker and Bookrunner

Adrian Hadden

James Sinclair-Ford

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Matthew Chan

Tel: +44 (0)20 7220 1666

Dowgate Capital Ltd - Joint Broker and Bookrunner

Stephen Norcross

Tel: +44 (0)20 3903 7721

This announcement contains inside information for the purposes of the UK version of the market abuse regulation (EU No. 596/2014) as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR"). In addition, market soundings (as defined in UK MAR) were taken in respect of certain of the matters contained in this Announcement, with the result that certain persons became aware of such inside information, as permitted by UK MAR. Upon the publication of this Announcement, this inside information is now considered to be in the public domain and such persons shall therefore cease to be in possession of inside information.

IMPORTANT NOTICES

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT {INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(E) OF REGULATION (EU) 2017/1129 (THE "PROSPECTUS REGULATION"); (2) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(E) OF EU PROSPECTUS REGULATION (EU) 2017/1129 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED (THE "UK PROSPECTUS REGULATION"), WHO (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS) OR (B) FALL WITHIN ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS");

(3) PERSONS TO WHOM THE ANNOUNCEMENT MAY OTHERWISE BE LAWFULLY COMMUNICATED.

THIS ANNOUNCEMENT AND THE INFORMATION IN IT 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 THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN WATER INTELLIGENCE PLC.

THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES

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REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE.

THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

The distribution of this Announcement and/or the Placing and/or issue of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, WH Ireland, Dowgate or any of their respective affiliates, agents, directors, officers or employees that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company, WH Ireland and Dowgate to inform themselves about and to observe any such restrictions.

This Announcement or any part of it does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia (the "United States" or the "US")), Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction in which the same would be unlawful. No public offering of the Placing Shares is being made in any such jurisdiction.

All offers of the Placing Shares will be made pursuant to exemptions under the Prospectus Regulation or the UK Prospectus Regulation from the requirement to produce a prospectus. In the United Kingdom, this Announcement is being directed solely at persons in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 (as amended) does not apply.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or 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. The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained for the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Placing Shares and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or the Republic of South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the United Kingdom.

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