Xeros Tech Regulatory News (XSG)

29 May 2014

Xeros Technology Group plc

("Xeros" or the "Group")

FIRST INCENTIVE PAYMENT BY A UTILITY UNDER AN ENERGY EFFICIENCY PROGRAMME FOR A COMMERCIAL LAUNDRY FACILITY USING XEROS POLYMER TECHNOLOGY

Xeros Technology Group plc (AIM: XSG), the innovative developer of a patented polymer bead cleaning system with multiple identified commercial applications, today announces the first incentive payment by a utility company in the US to an operator of a commercial laundry facility pursuant to an energy incentive programme available when using a Xeros Commercial Laundry System.

Liberty Utilities ("Liberty"), an independent water, natural gas and electric company providing local utility management, service and support to small and mid-sized communities across the United States with more than 350,000 customers, has paid an incentive of $28,000 to Sterling Linen Services, one of the largest commercial hospitality laundries in New England, under its Natural Gas Energy Efficiency programme. Sterling installed the Xeros Commercial Laundry System in its headquarters and is the first business to benefit from the incentives available to operators of Xeros bead technology from Liberty.

Customers in certain US states are able to apply for financial incentives to install energy efficient washing machines supported by the Federal Energy Management Program's Energy Incentive Program. The Xeros 25kg machine has been evaluated for energy efficient incentives through the Liberty Utilities Natural Gas Energy Efficiency Program. An extensive technical assistance study conducted by RISE Engineering at Sterling (www.riseengineering.com), included the metering of energy and water usage for the Xeros Commercial Laundry System and an industry standard machine. The Xeros polymer bead machine demonstrated a 100% reduction in natural gas usage, a 76% reduction in water usage, and reduction of the wash time by up to 28 minutes. This study is available to all utility companies at www.esource.com.

Liberty offers a rebate of the project cost equivalent to 50 per cent. of the purchase, installation and first year support costs of a Xeros machine where a customer is replacing existing equipment before it reaches the end of its useful life or does not need to be replaced. Alternatively Liberty offers a financial incentive equivalent to 75 per cent. of the incremental cost of the Xeros machine against a standard machine where a customer is installing equipment in a new building or where it is replacing a machine which has passed its useful life.

Bill Westwater, CEO of Xeros, commented:

"This first incentive payment received by one of our customers further underlines the attraction of Xeros's polymer bead technology to the commercial laundry sector by ensuring our customers not only make significant financial savings but also reduce energy and water use, all whilst providing superior cleaning results. We look forward to working with utility companies on future incentives for their customers using Xeros technology.

Liberty is pointing the way but since our IPO, we are also now in active discussions with a number of other US utility companies about assessing Xeros machines for energy incentive programme eligibility and I look forward to updating shareholders on progress with these discussions in due course."

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Further information on the Group can be found on the Company's website: www.xeroscleaning.com

About Xeros

Xeros has developed a patented polymer bead cleaning system with multiple identified potential commercial applications. The Group has targeted the commercial laundry market and has begun the roll-out of 25kg capacity washing machines which exclusively use Xeros' patented polymer bead cleaning system. In trials with customers, this system has been shown to achieve superior cleaning performance as well as material reductions in water, energy and chemical usages compared to conventional commercial laundry methods. The Xeros proprietary polymer bead cleaning system also reduces the carbon footprint of the entire laundry process. In addition to the commercial laundry market, the Group's polymer bead technology has a range of potential applications in other industries including domestic laundry, leather processing, garment finishing and metal cleaning. The Group is currently in various stages of development and preparation for commercialisation of other identified applications, the most advanced of which is domestic laundry.

In May 2014, the Group at the Edison Awards 2014 in San Francisco won Bronze in the Energy/Sustainability category for its virtually waterless commercial laundry system and, on the same evening, the Group was named University Spin-Out of the Year at the New Energy & Cleantech Awards 2014 in London.