Xeros Tech Regulatory News (XSG)

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

27 November 2018

Xeros Technology Group plc

Proposed Placing to raise approximately £15 million with Open Offer up to £5 million

Xeros Technology Group plc (AIM: XSG, 'the Company', 'Xeros'), the developer and provider of patented polymer based technologies with multiple commercial applications, intends to raise approximately £15 million before fees and expenses by a placing of 150,000,000 new Ordinary Shares with existing and new institutional investors at a placing price of 10 pence per share (the 'Placing').

In addition to the Placing, Qualifying Shareholders will be given the opportunity to subscribe for up to 49,588,971 new Ordinary Shares through an open offer to raise up to £5 million before expenses (the 'Open Offer').

Current position

Xeros develops and provides water saving technologies with multiple, IP protected, applications which are variously in development, pre-commercialisation or in commercialisation. The applications are focused on large scale markets which are being impacted by increasing water scarcity and water costs.

Xeros' technology increases environmental sustainability through reducing water and chemical use and effluent production and delivers cost benefits to its customer.

The Commercial Laundry business and High Performance Workwear business are both generating revenue and the Tanning business has a contract which is forecast to generate revenue in 2019.

The majority of the technical development for the Group's applications has been completed. The Group's cash burn rate has reduced and Xeros has plans for it to reduce further in 2019.

Use of proceeds

Cleaning Technologies

· Domestic Laundry: Xeros is targeting to negotiate commercialisation and development agreements with domestic laundry machine OEMs. Xeros will look to receive up-front payments and a royalty per machine sold. Xeros is also targeting to license its XFiltraTM technology to OEMs with up-front payments and royalty per unit sold.

· Marken (High Performance Workwear): Having established a four-sites US network, Xeros plans to increase revenues and profitability and to target licensing options to cleaners and owners of large fleets of personal protective equipment.

· Hydrofinity (Commercial): Xeros is forecasting to continue the migration of this business to a licensing model with further agreements targeted with distributors and OEMs. It expects to receive first revenues in 2019 from its China licensing agreement signed with Jiangsu SeaLion Technology Development Co., Ltd.

Tanning Technologies

Xeros expects to receive initial revenues from the contract with Le Farc SA de CV in Mexico in H1 2019. The Company expects to convert further customers, grow its contract base and plans to trial its technology in the upstream tanning process in 2019.

Textile Technologies

Xeros is targeting the completion of trials with denim and garment manufacturers in 2019 and, if successful, to pursue commercial agreements with first revenues in 2019. The target business model for this business would be for Xeros to receive a commission on machine sales as well as ongoing royalties for continued use of the technology.

Mark Nichols, Chief Executive of Xeros, said:

"These additional funds will allow us to continue to execute on our IP-rich, asset-light strategy to commercialise our technologies, which address the key global environmental issues of water scarcity and pollution.

"The commercial benefits and sustainability improvements that our technologies deliver have been validated by a number of recent contracts. These clearly demonstrate that our platform technology is capable of broad deployment in scale industries. 

"Our focus is on increasing the commercialisation of our technology in each of our markets working with channel partners and manufacturers whose businesses and customers are facing ever increasing pressure on their water use."

Placing

For the Placing and Open Offer to proceed, Xeros requires (i) the grant of the Rule 9 Waiver by the Panel Executive, (ii) the Shareholders' approval to authorise the Directors to allot the New Ordinary Shares and disapply pre-emption rights in relation to the issue of the New Ordinary Shares and (iii) the Independent Shareholders' approval of the Rule 9 Waiver by way of the Whitewash Resolution.

Following, and subject to, the Panel Executive granting the Rule 9 Waiver, a Circular will be distributed to Shareholders and made available on Xeros' website with further details of the Placing and the Open Offer and to give notice of the General Meeting to consider and, if thought fit, approve the above resolutions. A further announcement will be made on this in due course

Enquiries:

Notes to Editors

Xeros Technology Group plc (AIM: XSG) is a platform technology company that is reinventing water intensive industrial and commercial processes.

Xeros' uses its patented XOrbTM technologies to significantly reduce the amount of water used in a number of major applications and to increase the efficiency in either affixing or removing molecules from substrates such as fabrics and garments. Adoption of the technology drives significant economic, operational and sustainability outcomes.

Xeros current portfolio of applications are within the areas of garment finishing (Textile Technologies), tanning (Tanning Technologies under the "Qualus" brand) and cleaning/laundry (Cleaning Technologies). The cleaning/laundry business of the Company covers domestic laundry, commercial laundry (under the "Hydrofinity" brand) and the cleaning of high performance workwear (under the "Marken" brand).

For more information, please visit - http://www.xerostech.com/

Jefferies, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority ("FCA"), and Berenberg, which is authorised by the German Federal Financial Conduct Authority and subject to limited regulation by the FCA, are acting exclusively for the Company and for no‐one else in relation to the Placing, and will not be responsible to any other person for providing the protections afforded to their respective clients nor for providing advice in connection with the matters contained in this announcement.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Jefferies, Berenberg nor by any of their respective affiliates, partners or agents (or any of their respective directors, officers, employees or advisers), as to or in relation to, the contents, accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, or any other statement made or purported to be made by or on behalf of either of Jefferies or Berenberg or any of their respective affiliates in connection with the Company or the Placing, and any liability therefor is expressly disclaimed.

Jefferies, Berenberg and each of their respective affiliates accordingly disclaim all and any liability, whether arising in tort, contract or otherwise (save as referred to above) in respect of any statements or other information contained in this announcement.

This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Placing Shares. Any investment decision to buy Placing Shares in the Placing must be made solely on the basis of publicly available information, which has not been independently verified by Jefferies or Berenberg.

APPENDIX 1ADDITIONAL INFORMATIONONTHE PROPOSED PLACING OF 150,000,000 NEW ORDINARY SHARES AT 10 PENCE EACHTHE PROPOSED OPEN OFFER OF UP TO 49,588,971 NEW ORDINARY SHARES AT 10 PENCE EACHANDTHE WAIVER OF OBLIGATIONS UNDER RULE 9 OF THE TAKEOVER CODE

The Placing and Open Offer

Xeros intends to raise approximately £15 million before fees and expenses by the Placing of 150,000,000 new Ordinary Shares with existing and new institutional investors at a Placing Price of 10 pence per Placing Share.

Qualifying Shareholders will be given the opportunity to subscribe for up to 49,588,971 new Ordinary Shares through an open offer to raise up to £5 million before expense in addition and separate to the funds raised pursuant to the Placing on the basis of 1 Open Offer Share for every 2 Existing Ordinary Shares held on the Record Date.

The New Ordinary Shares will rank pari passu in all respects with the Existing Ordinary Shares. Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM.

Subject to the Rule 9 Waiver and passing of the Resolutions at the General Meeting, dealings are expected to commence on or around 20 December 2018.

The Rule 9 Waiver

Mercia holds the entire issued share capital 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; certain members of Woodford (acting through WIML) hold more than 20% of the voting rights of Mercia. Accordingly, under the Takeover Code, Woodford is presumed to be acting in concert with Mercia, EVL and the Enterprise Venture Funds.

The members of the Concert Party, in aggregate are currently beneficially interested in 31,293,624 Ordinary Shares, representing 31.55% of the voting rights of the Company. Following completion of the Placing, assuming no Open Offer Shares are issued in respect of the Open Offer, the Concert Parties' aggregated voting rights in the Company will be 43.46 %.

In order for the Concert Party to avoid a mandatory offer obligation pursuant to Rule 9 of the Takeover Code, the Concert Party will seek a Rule 9 Waiver in respect of the Placing and Open Offer.

The Rule 9 Waiver will be subject to approval by a simple majority of the votes cast on a poll by Independent Shareholders.

Related party transactions

The respective participation of Woodford and IP Group plc in the Placing constitutes a related party transaction under the AIM Rules by virtue of each of them being a substantial shareholder in the Company. The Directors consider, having consulted with Jefferies, the Company's nominated adviser, that the terms of the related party transactions are fair and reasonable insofar as the Company's Shareholders are concerned.

Current trading

Since the Company announced results for the 6 months to 30 June 2018 on 13 September 2018 trading has continued in line with the Director's expectations.

Directors' Participation

Certain Directors are participating in the Placing, amounting to an aggregate subscription for 1,000,000 new Ordinary Shares or approximately 0.67 % of the Placing. Following the Placing, the participating Directors will beneficially own, in aggregate, 0.40 % of the Enlarged Issued Share Capital.

Directors' Participation

___________________________ 

APPENDIX 2TERMS AND CONDITIONS OF THE PLACING

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 THIS 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 THIS 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. THIS 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 THIS 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, 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.

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING

1. Details of the Placing

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 10p per Placing Share (the "Placing Price"), where 150,000,000 Ordinary Shares (the "Placing Shares") shall be allocated and issued to new and existing shareholders of the Company 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 Placing Shares (the "Placing") is not underwritten by the Bookrunners.

1.1 In addition to the Placing, the Company proposes to make the Open Offer to Qualifying Shareholders on the terms and subject to the conditions set out in the Circular and (in the case of Qualifying Shareholders who do not hold their Ordinary Shares in CREST) the Application. The Placing is not conditional upon the Open Offer and the Placing Shares are not part of the Open Offer.

1.2 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 dis-apply pre-emption rights in respect of the Placing Shares; and (ii) approve a proposed waiver of Rule 9 of the Takeover Code.

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 and the Open Offer Shares) for a period ending three months after Admission, without the Bookrunners' prior consent. Such 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 Placing 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 20 December 2018.

3. Bookbuild

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 to persons who may lawfully be, and are, invited to participate by either of the Bookrunners.

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 10p 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. The Bookrunners may, in agreement with the Company, accept bids that are received after the Bookbuild has closed. The Company reserves the right (upon the agreement of the Bookrunners) 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 The Bookrunners 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. The Bookrunners 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 the Bookrunners' written consent, 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 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 Rule 9 Waiver having been granted and not revoked by the Takeover Panel (conditional only on approval by the Independent Shareholders);

5.1.2 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 the Bookrunners;

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;

Admission taking place by 8.00 a.m. (London time) on 20 December 2018 or such later date as the Company and the Bookrunners may otherwise agree (the "Admission Date"); and

5.1.4 in the good faith opinion of the Bookrunners, 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 5.1 above) (the "Placing Conditions") are not fulfilled or waived by the Bookrunners, by the time or date where specified (or, in each case, such later time and/or date as the Company and the Bookrunners may agree); 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 The Bookrunners (acting jointly) may, at their absolute discretion and upon such terms as they 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 Bookrunners (acting jointly).

6. Termination of the Placing Agreement

6.1 The Bookrunners (acting jointly) may at any time prior to Admission terminate the Placing Agreement (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 the Bookrunners, 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 The Bookrunners not having received confirmation in a form acceptable to them confirming irrevocable acceptance of the offer contained in this announcement from proposed Placees reasonably acceptable to the Bookrunners 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 the Bookrunners, 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 the Bookrunners, makes it impractical or inadvisable to proceed with the Placing;

(d) there has occurred an adverse change or a prospective adverse change in United Kingdom taxation affecting the Ordinary Shares or the transfer thereof or exchange controls have been imposed by the United Kingdom, the United States or a member state of the European Union

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 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. The Bookrunners and the Company reserve 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 20 December 2018 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:

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;

9.1.1 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;

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

9.1.3 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; 

9.1.4 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;

9.1.5 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;

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;

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;

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;

unless otherwise specifically agreed with the Bookrunners, 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;

9.1.6 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;

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;

9.1.7 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 the Finance Act of 1986 (depositary receipts and clearance services);

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 Money Laundering Regulations;

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);

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 the Bookrunners has been given to the proposed offer or resale;

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;

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;

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;

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;

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;

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;

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;

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;

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 the Bookrunners may in their absolute discretion determine and without liability to them, 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;

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 the Bookrunners (having agreed with the Company) 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;

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;

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;

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;

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;

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;

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;

9.1.8 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;

9.1.9 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

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.

APPENDIX 3 

DEFINITIONS

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

Admission means the admission of the New Ordinary Shares to trading on AIM and such admission becoming effective in accordance with the AIM Rules.

AIM means the AIM market of the London Stock Exchange.

AIM Rules means the AIM rules for companies published by the London Stock Exchange.

Application means the application to be made by or on behalf of the Company to the London Stock Exchange for Admission.

Berenberg means Joh. Berenberg, Gossler & Co. KG, London Branch, being the Company's joint broker and joint bookrunner in relation to the Placing.

Circular means the circular, to be published by the Company upon the Panel having granted the Rule 9 Waiver, in relation to the Placing and Open Offer which will include notice of convening the General Meeting at which the Resolutions will be proposed.

Company or Xeros means Xeros Technology Group plc, a company incorporated in England and Wales with registered number 8684474, with its registered office at Unit 2, Evolution, Advanced Manufacturing Park, Whittle Way, Catcliffe, Rotherham, South Yorkshire S60 SBL.

Concert Party means Woodford, WIML, Mercia, EVL and the Enterprise Ventures Funds, who are presumed to be acting in concert for the purposes of the Takeover Code.

CREST means a relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations).

CREST Regulations means the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) (as amended).

Directors means the board of directors of the Company.

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

EU means the European Union.

Euroclear means Euroclear UK & Ireland Limited.

EVL means Enterprise Ventures Limited.

Existing Ordinary Shares means the 99,177,942 Ordinary Shares in issue at the date of this document, all of which are admitted to trading on AIM and being the entire issued ordinary share capital of the Company.

FCA means Financial Conduct Authority.

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

FSMA means Financial Services and Markets Act 2000.

General Meeting means the general meeting of the Company to be convened by the Circular.

Group means the Company and its subsidiaries Xeros Limited, Xeros Inc., Xeros High Performance Work Wear, Inc. and Xeros Environmental Protection Technology (Shanghai) Co., Ltd.

Independent Shareholders means 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 Placing Shares and any person acting in concert with them (including any members of their immediate families, related trusts or connected persons).

Jefferies means Jefferies International Limited, being the Company's nominated adviser and joint broker and joint bookrunner in relation to the Placing.

LF Woodford Investment Fund means a company incorporated in England and Wales with registered number IC001010.

London Stock Exchange means London Stock Exchange plc.

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

Mercia means Mercia Technologies PLC.

New Ordinary Shares means the Placing Shares and the Open Offer Shares.

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

Open Offer means the offer by the Company to Qualifying Shareholders, constituting an invitation to apply for the Open Offer Shares, on and subject to the terms and conditions set out in the Circular (and in the case of Qualifying Shareholders who do not hold their Ordinary Shares in CREST, the Application).

Open Offer Shares means the new Ordinary Shares to be offered to Qualifying Shareholders under the Open Offer.

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

Placing means 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 means the agreement to be entered into between the Company, Jefferies and Berenberg in connection with the Placing.

Placing Price means 10p per Placing Share.

Placing Shares means 150,000,000 Ordinary Shares which may, pursuant to the Placing, be allotted and issued fully paid up at the Placing Price and admitted to trading on AIM.

Qualifying Shareholder means shareholders set out in the register of members of the Company on the Record Date (as defined in the Circular).

Quilter Investors UKEI2 means Quilter Investors UK Equity Income II Fund, being a sub-fund of Quilter Investors Trust.

Quilter Investors Trust means an authorised unit trust established in England and Wales and authorised by the FCA with product reference number 200108.

Resolutions means the resolutions relating to the Placing and the Open Offer in the approved terms set out in the notice convening the General Meeting contained in the Circular.

RNS means the regulatory information service approved by the London Stock Exchange for the distribution of AIM announcements.

Rule 9 Waiver means the waiver, conditional on its approval by the Independent Shareholders taken by a poll, by the Panel Executive of the obligation that, following the issue of the 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 certain Placing Shares to one or more members of the Concert Party.

Shareholders means holders of Ordinary Shares.

Takeover Code means the City Code on Takeovers and Mergers.

United Kingdom or UK means United Kingdom.

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

WEIF means the LF Woodford Equity Income Fund, being a sub fund of LF Woodford Investment Fund.

WIML means Woodford Investment Management Limited, being the investment manager for Woodford.

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

Whitewash Resolution means the resolution to be proposed to be passed at the General Meeting, which relates to the Rule 9 Waiver.

Woodford means together WEIF, WPCT, OI&G and Quilter Investors UKEI2 (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 "USS" or "$" are to the lawful currency of the United States.