Proposed Placing, Open Offer & General Meeting

RNS Number : 3871B

Xeros Technology Group plc

30 September 2022

 

For immediate release

THIS ANNOUNCEMENT, INCLUDING 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, CANADA, JAPAN, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY NEW ORDINARY SHARES OF XEROS TECHNOLOGY GROUP PLC IN THE UNITED STATES, CANADA, JAPAN, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE MARKET ABUSE REGULATION EU NO. 596/2014, AS RETAINED AND APPLICABLE IN THE UK PURSUANT TO S3 OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Xeros Technology Group plc

("Xeros", the "Group" or the "Company")

Placing and Subscription to raise £6.0 million, Open Offer to raise up to £1.0 million, Issue of up to 140,386,699 Warrants, Capital Reorganisation

and

Notice of General Meeting

Xeros Technology Group plc (AIM: XSG), the creator of technologies that reduce the impact of clothing on the planet, is pleased to announce a proposed conditional placing to raise £6.0 million (before fees and expenses) via a placing of 120,000,000 new ordinary shares (the "Placing Shares") of 15 pence each in the capital of the Company ("Ordinary Shares") at an issue price of 5 pence per share (the "Issue Price") (the "Placing").

In addition to the Placing the Company intends to provide all qualifying shareholders ("Qualifying Shareholders") with the opportunity to subscribe for up to 20,386,699 new Ordinary Shares (the "Open Offer Shares"), to raise up to approximately £1.0 million (before expenses), on the basis of 6 Open Offer Shares for every 7 Existing Ordinary Shares held on the Record Date, at the Issue Price (the "Open Offer") (the Placing and Open Offer together the "Fundraising", and the Placing Shares and the Open Offer Shares together the "New Ordinary Shares").

The Company also proposes to issue warrants to subscribers in the Placing and Open Offer, granting rights to subscribe for one additional Ordinary Share for each warrant held in the ratio of one warrant for every one New Ordinary Share issued to those subscribers (the "Warrants"). The Warrants are exercisable at a price of 5 pence per Ordinary Share during the Warrant Exercise Period.

The Placing will be conducted by way of an accelerated bookbuild ("Bookbuild" or "ABB") which will be launched immediately following this announcement ("Announcement"), in accordance with the terms and conditions set out in the appendix to this Announcement.

Highlights:

· The Placing will raise gross proceeds of £6.0 million in aggregate, with up to an additional £1.0 million being raised through the Open Offer.

· Net proceeds of the Fundraising will be used to fund ongoing activities pending achievement of month on month EBITDA and cash breakeven during 2024.

· Precise timing of breakeven point during 2024 uncertain with further clarity expected during the next year.

· Current key commercial arrangements in place capable of underpinning shift to month on month breakeven.

· The Fundraising is conditional on, amongst other things, shareholder approval of certain resolutions (the "Resolutions") at a general meeting of the Company on 20 October 2022 (the "General Meeting").

· Admission of the New Ordinary Shares is expected on 21 October 2022, subject to the passing of the Resolutions at the General Meeting.

· The Company also intends to issue Warrants to investors in the Placing and Open Offer at the 1:1 ratio described above, resulting in up to 140,386,699 Warrants exercisable at a price of 5 pence per Ordinary Share during the Warrant Exercise Period.

· Share capital reorganisation to sub-divide the existing Ordinary Shares into ordinary shares of 0.1 pence each and deferred shares of 14.9 pence each (the "Capital Reorganisation").

· The Company expects to send a circular to Shareholders (the "Circular") in connection with the Fundraising following the successful closure of the Bookbuild, in order to convene the General Meeting. Full details of the Open Offer, a proxy form and Open Offer application form will also be included within, or sent with, the Circular.

The timing for the close of the Bookbuild and allocation of the Placing Shares shall be at the absolute discretion of finnCap Ltd, in consultation with the Company. The final number of Placing Shares to be issued pursuant to the Placing will be agreed by finnCap and the Company at the close of the Bookbuild. The result of the Placing will be announced as soon as practicable thereafter. The Placing is not underwritten.

The Fundraising is conditional upon admission to trading on AIM becoming effective ("Admission") and the placing agreement between the Company and finnCap (the "Placing Agreement") not being terminated in accordance with its terms.

It is anticipated the New Ordinary Shares will represent approximately 85.5 per cent. of the Company's issued ordinary share capital following Admission (assuming full take up under the Open Offer). The Issue Price of 5 pence per New Ordinary Share represents a discount of approximately 72.6 per cent. to the closing mid-market price of 18.25 pence per Ordinary Share on 29 September 2022, being the last trading day immediately preceding the date of this announcement. 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 in respect of such New Ordinary Shares after the date of their admission to trading on AIM.

finnCap Ltd ("finnCap") acted as nominated adviser, broker and bookrunner in connection with the Placing.  No part of the Placing or the Open Offer is underwritten.

The appendix to this Announcement (which forms part of this Announcement) contains the detailed terms and conditions of the Placing.

Commenting on the Fundraising, Neil Austin, CEO of Xeros, said:

"We are delighted to secure this support from existing and new shareholders.  Xeros has a vital role to play in helping the garment and appliance industry become more sustainable. The Group has made strong progress on our three product categories of filtration, care and finish. This funding will be applied to winning additional contracts in those areas and amplifying our investment in marketing to accelerate new licence agreements. We look forward to updating investors on our progress in due course." 

General Meeting and Shareholder Approval

For the New Ordinary Shares to be admitted to trading on AIM, Shareholder approval is required:

a)  by way of ordinary resolution to give the Directors authority to allot the New Ordinary Shares and issue the Warrants;

b)  by way of special resolution to approve the Capital Reorganisation;

c)  by way of special resolution to adopt New Articles, required in connection with the Capital Reorganisation; and

d)  by way of a special resolution to dis-apply statutory pre-emption rights in respect of the New Ordinary Shares and the Warrants.

The authorities referred to above are in addition to the Company's existing general shareholder authorities to allot Ordinary Shares for cash on a non-pre-emptive basis.

In order to obtain the necessary shareholder approval, a General Meeting is to be held at the offices of Squire Patton Boggs (UK) LLP at Premier Place, 2 & A Half Devonshire Square, London EC2M 4UJ at 10.00 a.m. on 20 October 2022 at which the Resolutions will be proposed. A Circular containing a notice of General Meeting is expected to be sent to shareholders on 3 October 2022. The shareholder Circular and notice of General Meeting will be made available on the Company's website at www.xerostech.com.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

	2022
Record Date for entitlements under the Open Offer	Close of business on 29 Sep
Announce Launch of the Fundraising	30 Sep
Announce Close of the Fundraising	30 Sep
Ex-entitlement date for the Open Offer	8:00 a.m. 3 Oct
Publication and posting of the Circular, the Form of Proxy and, to Qualifying Non-CREST Shareholders only, Application Forms	3 Oct
Basic Entitlements and Excess Entitlements credited to stock accounts of qualifying CREST Shareholders	4 Oct
Recommended latest time for requesting withdrawal of Basic Entitlements and Excess Entitlements from CREST	4:30 p.m. 13 Oct
Latest time and date for depositing Basic Entitlements and Excess Entitlements into CREST	3:00 p.m. 14 Oct
Latest time and date for splitting of Application Forms (to satisfy bona fide market claims only)	3:00 p.m. 17 Oct
Latest time and date for receipt of Forms of Proxy or electronic proxy appointments for use at the General Meeting	10:00 a.m. 18 Oct
Latest time and date for receipt of completed Application Forms from Qualifying Non-CREST Shareholders and payment in full under the Open Offer or settlement of relevant CREST instructions (as appropriate)	11:00 a.m. 19 Oct
Announcement of the results of the Open Offer	19 Oct
General Meeting	10:00 a.m. 20 Oct
Announcement of the results of the General Meeting	20 Oct
Record Date for the Capital Reorganisation	Close of business on 20 Oct
Admission and commencement of dealings in the New Ordinary Shares on AIM	08:00 a.m. 21 Oct
New Ordinary Shares in uncertificated form expected to be credited to accounts in CREST (uncertificated holders only)	21 Oct
Expected date of despatch of definitive share certificates for the New Ordinary Shares in certificated form (certificated holders only) and certificates in respect of the Warrants	Within 10 business days of Admission

  Notes

1.  Each of the times and dates set out in the above timetable and mentioned in this Document is subject to change by the Company (with the agreement of finnCap), in which event details of the new times and dates will be notified to London Stock Exchange plc and the Company will make an appropriate announcement to a Regulatory Information Service.

2.  References to times in this Document are to London time (unless otherwise stated).

Enquiries:

Xeros Technology Group plc Neil Austin, Chief Executive Officer Paul Denney, Chief Financial Officer	Tel: [phone]
finnCap Limited (Nominated Adviser & Broker) Julian Blunt / Teddy Whiley / George Dollemore, Corporate Finance Andrew Burdis / Sunila de Silva, ECM	Tel: [phone]
Yellow Jersey PR Sarah Hollins / Lilian Filips / Laurie Gellhorn	Tel: [phone]

Notes for editors:

POWERED BY SCIENCE, XEROS CREATE TECHNOLOGIES ENGINEERED FOR THE FUTURE

Born out of textile research and advancing new standards of performance and responsibility, Xeros' technologies revolutionise the way we make and clean our clothes, conserving water and preventing waste. Designed to impact industries and people on a global scale, Xeros transforms the performance, impact and economics of the fashion and washing machine industry.

Xeros enables the scaling of its innovations and impact by licencing its intellectual property to partners across the globe. Their work has, to date, created 38 patent families.

Xeros' technologies are already in use in major global industries, including commercial and home laundry and garment manufacture. So far, these technologies have saved millions of litres of water and could prevent billions of microfibres from ending in our oceans.

TO THE POWER OF CHANGE 

xerostech.com

Forward-Looking Statements

This announcement contains forward-looking statements. These statements relate to the Group's future prospects, developments and business strategies. Forward-looking statements are identified by their use of terms and phrases such as "potential", "estimate", "expect", "may", "will" or the negative of such terms and phrases, variations or comparable expressions, including references to assumptions. The forward-looking statements in this announcement are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. These forward-looking statements speak only as at the date of this announcement. No statement in this announcement is intended to constitute a profit forecast or profit estimate for any period. Neither the Directors nor the Company undertake any obligation to update forward-looking statements other than as required by the AIM Rules or by the rules of any other securities regulatory authority, whether as a result of new information, future events or otherwise.

Market Abuse Regulation

Market soundings, as defined in MAR, were taken in respect of the Placing, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.

ADDITIONAL INFORMATION
ON
THE PROPOSED PLACING AND SUBSCRIPTION OF 120,000,000 ORDINARY SHARES, OPEN OFFER OF UP TO 20,386,699 ORDINARY SHARES, ISSUE OF UP TO 140,386,699 WARRANTS, CAPITAL REORGANISATION
AND
GENERAL MEETING

Introduction

The Company announces that it proposes to raise £6.0 million (before fees and expenses) by way of conditional Placing at the Issue Price. In addition the Company also proposes to raise up to £1.0 million by way of Open Offer to Qualifying Shareholders.

The Issue Price represents a discount of 72.6 per cent. to the Closing Price on 29 September 2022, being the latest practical date prior to the announcement of the Fundraising. It is anticipated the New Ordinary Shares will represent approximately 85.5 per cent. of the Company's issued ordinary share capital following Admission (assuming full take up under the Open Offer).

The Company also proposes to issue Warrants to subscribers in the Placing and Open Offer, granting rights to subscribe for one additional Ordinary Share for each Warrant held in the ratio of one Warrant for every one New Ordinary Share issued to those subscribers. The Warrants are exercisable at a price of 5 pence per Ordinary Share during the Warrant Exercise Period.

For the Fundraising to proceed, the Company requires approval of the Shareholders to undertake the Capital Reorganisation, authorise the allotment of the New Ordinary Shares, issue of Warrants and disapply pre-emption rights in relation to the issue of the New Ordinary Shares and Warrants. A Circular will be sent to shareholders in due course with details of the Fundraising and to give notice of the General Meeting for shareholders to consider and, if thought fit, approve the Resolutions to grant these authorities. The General Meeting is to be held at the offices of Squire Patton Boggs (UK) LLP at Premier Place, 2 & A Half Devonshire Square, London EC2M 4UJ at 10.00 a.m. on 20 October 2022. The Circular is expected to be published on 3 October 2022 and will be available from that date at the Company's website https://www.xerostech.com/investor for the purposes of AIM Rule 26.

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. 

Proposed Capital Reorganisation of Ordinary Shares

The Company is not permitted by law to issue Ordinary Shares at an issue price which is below their nominal value, currently 15 pence per Ordinary Share. In order to enable the Company to issue shares at an issue price which is below their current nominal value, the Company is proposing to complete a Capital Reorganisation of the Ordinary Share capital of the Company. Each of the Existing Ordinary Shares will be subdivided into one new Ordinary Share of 0.1 pence each and one Deferred Share of 14.9 pence each.

The Capital Reorganisation will not of itself affect the value of the shares held by Shareholders. After the Capital Reorganisation, there will be the same number of Ordinary Shares in issue as there are Existing Ordinary Shares in issue (prior to completion of the Fundraising) and therefore your current shareholding will not be diluted by the Capital Reorganisation, unless a further equity fundraising is completed by the Company.

The new Ordinary Shares will have the same rights as those currently accruing to the Existing Ordinary Shares in issue under the Current Articles, including those relating to voting and entitlement to dividends. New share certificates for new Ordinary Shares will not be issued and the existing share certificates will remain valid.

The Deferred Shares will have no significant rights attached to them and carry no right to vote or participate in distribution of surplus assets and will not be admitted to trading on the AIM market of the London Stock Exchange plc. Therefore, the Deferred Shares will effectively carry no value.

Holders of options or warrants over Existing Ordinary Shares will maintain the same rights as currently accruing to them and will not be issued with new warrant or option certificates.

Resolution 3 in the Notice of General Meeting, contained within the Circular, is proposed to amend the Current Articles to, inter alia, create the new Deferred Shares and to set out the rights pertaining thereto relative to the new Ordinary Shares. Resolution 3 is conditional upon the passing of Resolution 2. A copy of the New Articles will be available for inspection throughout the General Meeting. A summary of the changes proposed to the Current Articles is set out in schedule 1 of the Circular.

Background to and reasons for the Fundraising

As we said at the time of the 2021 results, the last financial year was one of mixed fortunes for Xeros with Covid related lockdowns delaying commercial progress, particularly so with our Chinese and Indian partners.  Despite this, progress was made with the pace quickening during 2022 as Covid related restrictions have eased, particularly so in India.  During 2022 we have been able to substantially advance our domestic laundry offering with our Indian partner, IFB, in addition to its established role as an OEM licence partner for our solution in the commercial laundry setting.  Through much of 2022 to date, as travel restrictions have eased we have been able to send teams to India to work alongside colleagues at IFB in the design of domestic machines and cycle programming which has now been finalised.  This was no small undertaking and involved significant resource commitment from IFB and Xeros alike and culminated in IFB's commitment to progress to a launch of a Xeros front-loading washing machine in Q4 of 2022.  This is a significant development for Xeros, given IFB's prominence as the second largest domestic washing machine company in India by sales volume, with over 500 consumer appliance stores across the country as well as its own online operation.  Market launch now awaits the finalisation of consumer trials of the product which are due to start soon in India with machines  being used in homes in India on a trial basis.  A successful launch in India will be a pivotal moment for Xeros, not just in giving a clear line of sight to a significant future revenue stream but, as importantly, it will be key to unlocking wider adoption by the industry and, with the evidence provided by IFB, we will continue our engagement with other major manufacturers with a view to increasing the number of licenses for this application.  Commercial terms agreed with IFB provide for a machine royalty to Xeros of just over 4 per cent. of the retail value of  Xeros machines sold by IFB.

The other significant development during 2022 has been the progress of the commercialisation strategy for XFilter, the Company's proprietary micro-fibre filtration technology.  In June 2022 Xeros signed its first global domestic washing machine filtration licensing agreement with Hanning Elektro Gmbh & Co.KG ("Hanning").  Hanning is a world leading manufacturer of components for the appliance industry, including pumps and motors for some of the world's largest domestic washing machine manufacturers.  Under the terms of the 10-year, non-exclusive agreement, Hanning will manufacture and sell the XFilter technology with products expected to be in market in late 2023 ahead of legislation in France and potentially other European countries, mandating the use of a microplastic filter in all new washing machines from 1 January 2025.  Under the terms of the agreement Xeros will receive a royalty per filter device sold by Hanning. The royalty amount is commercially sensitive though is in line with the Board's expectations. On 27 September 2022 Xeros announced a joint development agreement with another significant European headquartered domestic washing machine component manufacturer for XFilter. The agreement sets out a programme of product development for the manufacture of XFilter devices and a process to reach agreement of multi-year licensing terms. Work under the agreement will commence immediately and the Directors expect to agree license terms in the next six months. In addition, Xeros continues to work with a large Asian domestic washing machine OEM, with whom a trial and testing agreement was signed in 2021, on adoption of XFilter in their machines. Xeros has recently started commercial licensing negotiations with this OEM.

Notable also during 2022 has been the continued progress with denim manufacturers in Bangladesh representing three leading global retail brands.  Trials have resulted in the production of denim jeans, with significant reductions in the process' consumption of water, chemicals, energy and pumice (an important ingredient to the denim finishing process), which have been sold to consumers.  One of these retail brands has invited Xeros to present a proposal for the adoption of its technology in their manufacturing supply chain and the Company expects these discussions to continue through the remainder of 2022. Whilst denim manufacturers themselves are very focused on sustainability the Directors expect that the denim brands and their consumers will hold the key to widespread adoption of Xeros' finishing technology in a global denim market producing c1.2bn pairs of jeans per annum.

The continued progress noted above in both domestic laundry, filtration and denim finishing has been made in spite of the significant impact of COVID-19 in previous years.  The disruption of the COVID-19 pandemic, which remains ongoing in China, has delayed the Company's licensees entering their markets on time, resulting in delays to the timing of initial revenues for Xeros.  Whilst the monthly rate of cash burn is well controlled at approximately £0.5m per month, in line with previous statements the Directors believe that, given the significant amount of commercial progress made, now is the time to seek additional investment into the business.

Use of proceeds

As reported at the time of the FY21 results the Board now anticipates the Company reaching month on month EBITDA and cash breakeven during 2024, later than originally envisaged due to previously highlighted COVID-19 related delays.  Whilst the Directors are yet to ascertain exactly when in 2024 this point will be reached, with further clarity expected during the next year, they are clear that the current key commercial arrangements between the Company and Hanning (in relation to XFilter) and with IFB (in relation to the launch of Xeros enabled domestic washing machines into the Indian market), each as referred to above, are capable of underpinning this shift to month on month cashflow/EBITDA breakeven, with any further commercial arrangements only improving the position. The net proceeds of the Fundraise will therefore be used to fund activities pending achievement of this breakeven point with no current plans to alter the current rate of monthly cash consumption in support of these activities.

Current trading and outlook

The Company published its preliminary full year results for the 12 months ending 30 December 2021 on the 22 June 2022, reporting revenue of £0.5m and an EBITDA loss of £6.3m, a reduction of 7.1 per cent. over 2021. The Company reported the expectation that monthly cash burn would remain £0.5m per month on an ongoing basis.  Cash balances at the end of August 2022 stood at £2.6m.

Since the year end the Company has continued to trade in line with Board expectations with further progress made on a number of fronts:

· A number of additional component suppliers have contacted the Company in relation to XFilter since the announcement of the agreement with Hanning on 14 June 2022 and the further independent validation of XFilter by the highly respected Hohenstein testing institute carried out on behalf of a leading Asian domestic washing machine OEM as part of its test and trial agreement signed with Xeros in July 2021. On 27 September 2022 the Company entered into a joint development agreement with another significant European domestic washing machine component supplier, as referred to above, and expects to enter into further commercial XFilter arrangements as the environmental imperative for effective filtration builds ahead of regulation scheduled at the start of 2025;

· The Company has continued to lobby at central government level with a view to accelerating the drive for legislation and regulation around microfibre filtration;

· The IFB domestic washing machine launch progress remains on-track with Xeros enabled washing machines soon to be used on a trial basis in homes in India and the first order of XOrbs for the IFB domestic launch now placed by the Company with its supplier, BASF;

· A leading global retail brand, with whom Xeros has been conducting denim finishing trials in 2022, has invited the Company to propose a model for widespread adoption of its technology in its manufacturing supply chain.

As consumers and other stakeholders continue to call for the reduction of the environmental impact of clothing on the planet and as demands for reduced water usage, lower energy consumption and less microplastic pollution from the manufacture and cleaning of clothes have increased so the Board has become more sure than ever of a secure future for Xeros. 

The Company expects to announce interim unaudited results for the six months ending 30 June 2022 shortly. In line with expectations these will show revenues of £0.04m (H1 2021: £0.3m) and EBITDA losses of £3.9m (H1 2021: £2.8m) and reconfirm stable monthly cash burn of £0.5m. The statement also confirms the Board's comfort as regards current forward guidance.

Board and incentivisation arrangements

On 1 August 2022 Neil Austin joined the Board as Chief Executive Officer of the Company. The outgoing Chief Executive Officer, Mark Nichols, stepped down from the Board on the 1 August 2022. Mark Nichols will remain an employee of the Company until 30 September 2022.

The Board intends to award up to 4,925,134 share options to Neil Austin conditional upon shareholder approval of the Fundraising resolutions at the General Meeting. These options will be issued at the Issue Price. In addition the Board intends to award up to 5,138,100 Ordinary Shares to incentivise key members of staff following shareholder approval of the Fundraising resolutions.

Details of The Fundraising

The Company is undertaking the Fundraise to raise up to £7.0 million (before fees and expenses) from new and existing investors, through the Placing to raise £6.0 million plus the Open Offer to raise up to an additional £1.0 million.

The Issue Price represents a discount of approximately 72.6 per cent. from the Closing Price. It is anticipated the New Ordinary Shares will represent approximately 85.5 per cent. of the Enlarged Share Capital following Admission (assuming full take up under the Open Offer).

The New Ordinary Shares will be free of all liens, charges and encumbrances and will, when issued and fully paid, 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.

The Placing is being conducted via an accelerated bookbuild process which will commence immediately following the release of this Announcement. The Placing is not being underwritten. The Placing Shares are not subject to clawback and are not part of the Open Offer.

The timing for the close of the Bookbuild and the allocation of the Placing Shares shall be at the absolute discretion of finnCap, in consultation with the Company. The final number of Placing Shares to be issued pursuant to the Placing will be agreed by finnCap and the Company at the close of the bookbuild and the results of the Placing will be announced as soon as practicable thereafter.

As part of the Placing, pursuant to a subscription agreement entered into between the Company and Entrepreneurs Fund (the "Subscription Agreement"), Entrepreneurs Fund has committed to participating in the Fundraising and will subscribe under the terms of the Subscription Agreement for 30,000,000 New Ordinary Shares at the Issue Price, taking its holding to 21.79 per cent. of the Enlarged Share Capital (assuming full take up under the Open Offer). The Subscription Agreement is conditional upon, inter alia, the passing of the Resolutions and contains certain warranties given by the Company in favour of Entrepreneurs Fund. Entrepreneurs Fund has also provided an irrevocable undertaking to vote in favour of the Resolutions.

Klaas de Boer, Neil Austin, Paul Denney, Rachel Nooney and Mark Nichols are also participating in the Fundraising, pursuant to separate subscription agreements on broadly the same terms as those for Entrepreneurs Fund as set out above. Their aggregate participation will amount to 3,200,000 New Ordinary Shares. Further details are set out below.

The Placing Agreement

In connection with the Placing, the Company has entered into the Placing Agreement pursuant to which finnCap has agreed, in accordance with its terms, to use reasonable endeavours to procure placees ("Placees") for the Placing Shares at the Issue Price. The Placing is not underwritten.

In accordance with the terms of the Placing Agreement, the Placing is conditional upon, amongst other things, finnCap having received legally binding commitments from Placees to subscribe for the Placing Shares, the passing of the Resolutions, 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 21 October 2022 (or such later date as finnCap may agree).

The Placing Agreement contains certain warranties given by the Company in favour of finnCap concerning, amongst other things, the accuracy of information given in this Announcement and the Circular made by the Company in respect of the Placing as well as other matters relating to the Group and its business.

The Placing Agreement is terminable by finnCap 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 majeure event takes place or a material adverse change occurs to the business of the Company or the Group. The Company has also agreed to indemnify finnCap against all losses, costs, charges and expenses which finnCap may suffer or incur as a result of, occasioned by or attributable to the carrying out of its duties under the Placing Agreement.

The Placing is not conditional on the Open Offer proceeding or on any minimum take-up under the Open Offer.

Admission of the New Ordinary Shares

Application will be made to the London Stock Exchange for the New Ordinary 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 will become effective in respect of, and that dealings on AIM will commence in, all of the New Ordinary Shares, on or around 21 October 2022.

It is expected that CREST ("CREST") accounts of the investors in the New Ordinary Shares who hold their Ordinary Shares in CREST will be credited with their New Ordinary Shares on 21 October 2022. In the case of investors in the New Ordinary Shares holding their Ordinary Shares in certificated form, it is expected that certificates will be dispatched within 10 business days of Admission. Pending dispatch of the share certificates or the crediting of CREST accounts, the Registrar ("Registrar") will certify any instruments of transfer against the register.

Open Offer

In order to provide all Qualifying Shareholders with an opportunity to participate, the Company is intending to conduct an Open Offer to provide those shareholders the opportunity to subscribe at the Issue Price for an aggregate of 20,386,699 Open Offer Shares. This will allow Qualifying Shareholders to participate on a pre-emptive basis whilst providing the Company with the flexibility to raise additional equity capital to further improve its financial position.

Qualifying Shareholders will also be offered the opportunity to apply for additional Open Offer Shares in excess of their pro rata entitlements to the extent that other Qualifying Shareholders do not take up their entitlements in full. In the event applications exceed the maximum number of Open Offer Shares available, the Company will decide on the basis for allocation, however if this scenario occurs, preference is likely to be given to Qualifying Shareholders with smaller shareholdings (who historically may have had less opportunity to participate in placings conducted by the Company). The Open Offer Shares will not be placed subject to clawback nor will they be underwritten. Consequently, there may be fewer than 20,386,699 Open Offer Shares issued pursuant to the Open Offer. Qualifying Shareholders are able to to apply for Open Offer Shares under the Open Offer at the Issue Price on the following basis:

6  Open Offer Shares for every 7 Existing Ordinary Shares held by the Qualifying Shareholder on the Record Date

The Open Offer is conditional upon, inter alia, the approval of Shareholders of the Resolutions at the General Meeting and upon the Placing Agreement becoming unconditional in all respects.

Application will be made to the London Stock Exchange for admission of the Open Offer Shares to trading on AIM. Admission of the Open Offer Shares is expected to take place, and dealings on AIM are expected to commence, at 8.00 a.m. on 21 October 2022.

The Warrants

As referred to above, the Company has also agreed to issue Warrants to investors in the Placing and Open Offer on the basis of one Warrant for every one New Ordinary Shares subscribed for. Accordingly, there will be up to 140,386,699 Warrants in issue following Admission, with each Warrant granting the holder the right to subscribe for one new Ordinary Share. The Warrants are exercisable at a price of 5 pence per Ordinary Share during the Warrant Exercise Period.

The issue and validity of the Warrants is conditional, amongst other things, on the passing of the Resolutions and Admission on or before 8.00 a.m. on 21 October 2022 (or such later date as finnCap and the Company may agree being not later than 8.00 a.m. on 11 November 2022).

The other key terms and conditions of the Warrants are set out in the table below:

Subscription Rights   Each Warrant issued will confer on the holder the right to subscribe for one new Ordinary Share at a price of 5 pence per Ordinary Share by notice to the Company during the Warrant Exercise Period.

Warrant Exercise Period   The exercise period for a Warrant is the period from the date of issue of the Warrant to (and including) 5.00 p.m. on the date falling 18 months thereafter (unless terminated earlier in accordance with the terms of the Warrants).

Exercise of Warrants   The Warrants may be exercised in whole or in part during the Warrant Exercise Period, provided that any partial exercise of Warrants by a holder shall be for a minimum aggregate exercise price of £10,000 or, if less, the balance of the relevant holder's Warrants then outstanding.

Adjustment to Subscription Rights  The subscription rights conferred by the Warrants and/or the exercise price of the Warrants shall be adjusted by the Board in its sole discretion on the occurrence of certain events in relation to the Company, including

a)  a subdivision, consolidation or reclassification of the Ordinary Shares;

b)  a reduction of capital or any other reduction in the number of Ordinary Shares in issue from time to time;

c)  an issue of Ordinary Shares by way of dividend or distribution or by way of capitalisation of profits or reserves; or

d)  a consolidation, amalgamation or merger of the Company with or into another entity in certain circumstances,

with the intention, in broad terms, that any such adjustment will leave the holder(s) of the Warrant(s) in a similar position to the position they were in immediately before the event giving rise to the adjustment.

Transfer   The Warrants are non-transferable by the holders without the prior consent of the Company.

Security   The Warrants are not secured.

Modifications   The Company may amend the provisions of the instrument constituting the Warrants without the consent of the holders of the Warrants where such amendment is of a minor nature or to correct a manifest error. Otherwise no amendment or abrogation to the terms of the instrument are permitted without the consent of holders of at least 75 per cent. of the Warrants in issue at the time.

Information Rights   The Warrants entitle holders to receive the Company's annual report and accounts and all accompanying documents, together with every other document sent to the holders of the Ordinary Shares, in each case at the same time as it is sent to the holders of Ordinary Shares.

Administration   The Warrants are in certificated form and the Registrar has established and will maintain a register of the holders of Warrants. There are also provisions in the Warrant Instrument for convening meetings of the holders of Warrants.

A copy of the Warrant Instrument is available on the Company's website at https://www.xerostech.com/ .

Related Party Transactions

Entrepreneurs Fund L.P., Lombard Odier Investment Managers, Klaas de Boer, Neil Austin, Paul Denney Rachel Nooney and Mark Nichols each a Related Party (as defined by the AIM Rules), will be participating in the Placing as follows:

Name	Existing holding	Existing % holding	New Ordinary Shares issued  in Fundraising	Holdings post Fundraising	% Holding post Fundraising1
Neil Austin	nil	nil	200,000	200,000	0.12%
Paul Denney	75,000	0.32%	200,000	275,000	0.17%
Klaas de Boer	250,000	1.05%	2,400,000	2,650,000	1.61%
Rachel Nooney	nil	nil	200,000	200,000	0.12%
Mark Nichols	87,482	0.37%	200,000	287,482	0.18%
Entrepreneurs Fund L.P.	5,767,534	24.25%	30,000,000	35,767,534	21.79%
Lombard Odier Investment Managers	2,905,027	12.21%	10,000,000	12,905,027	7.86%

Notes:

1.  Assuming full take up under the Open Offer.

The entering into of the Subscription Agreement and the participation of Entrepreneurs Fund in the Placing constitutes a related party transaction by virtue of Entrepreneurs Fund (and its affiliates) being classified as significant shareholders in the Company. The Directors consider, having consulted with finnCap (the Company's nominated adviser) that the terms of the Subscription Agreement and the participation in the Placing by Entrepreneurs Fund are fair and reasonable insofar as the Company's Shareholders are concerned.

The entering into the Subscription Agreements with the Company and the participation in the Fundraising of Klaas De Boer, Neil Austin, Paul Denney, Rachel Nooney and Mark Nichols constitute related party transactions under the AIM Rules by virtue of them each being Directors (or a director within the last 12 months in the case of Mark Nichols).  The Directors (excluding the aforementioned Directors participating in the Placing) consider, having consulted with finnCap (the Company's nominated adviser), that the terms of their participation in the Fundraising are fair and reasonable insofar as the Company's Shareholders are concerned.

The participation in the Placing by Lombard Odier Investment Managers constitutes a related party transaction by virtue of them being a significant shareholder in the Company. The Directors consider, having consulted with finnCap (the Company's nominated adviser), that the terms of their participation in the Fundraising are fair and reasonable insofar as the Company's Shareholders are concerned. 

Recommendation

The Directors consider the Resolutions being proposed at the General Meeting to be in the best interests of the Company and the Shareholders as a whole. Consequently, the Directors are recommending in the Circular that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting, as they intend to do in respect of the 462,482 Existing Ordinary Shares held, directly or indirectly, by them representing approximately 1.94 per cent. of the total current voting rights of the Company.

APPENDIX 1

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING.  THE  ANNOUNCEMENT REGARDING THE PLACING (THE "ANNOUNCEMENT") AND THE TERMS AND CONDITIONS  SET OUT HEREIN ("TERMS AND CONDITIONS") 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: (A) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(E) OF THE EU DIRECTIVE 2017/1129 WHICH FORMS PART OF DOMESTIC LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 WHO ALSO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS WHO FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS) OR (II) FALL WITHIN ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; OR (B) PERSONS TO WHOM THEY MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THE ANNOUNCEMENT AND THE TERMS AND CONDITIONS AND THE INFORMATION HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS.  PERSONS DISTRIBUTING THE ANNOUNCEMENT OR THE TERMS AND CONDITIONS MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.  ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THE TERMS AND CONDITIONS RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.  THE ANNOUNCEMENT AND THE TERMS AND CONDITIONS DO NOT THEMSELVES CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN XEROS TECHNOLOGY GROUP 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 UNDER THE APPLICABLE SECURITIES LAWS OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE 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.  THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS.  NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE.

THE ANNOUNCEMENT AND THE TERMS AND CONDITIONS ARE RESTRICTED AND ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

The distribution of the Terms and Conditions 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, finnCap Limited (the "Bookrunner") 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 the Terms and Conditions 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 these Terms and Conditions come are required by the Company and the Bookrunner to inform themselves about and to observe any such restrictions.

The Announcement and these Terms and Conditions or any part of them are for information purposes only and do 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, Australia, Canada, the Republic of South Africa, the Republic of Ireland or Japan 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.

In the United Kingdom, the Announcement and these Terms and Conditions are being directed solely at persons in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 (as amended) (the "FSMA") does not apply.

Solely for the purposes of the product governance requirements of Chapter 3 of the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK MiFIR Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK MiFIR Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in paragraphs 3.5 and 3.6 of COBS; and (ii) eligible for distribution through all permitted distribution channels (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, finnCap will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapters 9A or 10A respectively of COBS; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

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 the Announcement and these Terms and Conditions or the Circular.  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 offering in compliance with the securities laws of any state, province or territory of Australia, Canada, the Republic of South Africa, the Republic of Ireland or Japan.  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, the Republic of South Africa, the Republic of Ireland or Japan or any other jurisdiction in which such offer, sale, re-sale or delivery would be unlawful.

Persons (including, without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of the Announcement (or any part of it) and/or these Terms and Conditions should seek appropriate advice before taking any action.

The Terms and Conditions should be read in their entirety. 

Details of the Placing Agreement and the Placing Shares

The Bookrunner has entered into the Placing Agreement with the Company under which, on the terms and subject to the conditions set out in the Placing Agreement, the Bookrunner, as agent for and on behalf of the Company, has agreed to use its reasonable endeavours to procure Placees for the Placing Shares at the Issue Price. The Placing is not being underwritten by the Bookrunner or any other person.

The exact number of Placing Shares to be allocated and issued to Placees shall be determined by the Bookrunner and the Company following completion of the Bookbuild (as defined below).

The Placing Shares will, when issued, be subject to the memorandum and articles of association of the Company and credited as 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 in respect of such Ordinary Shares after the date of issue of the Placing Shares.

Accelerated bookbuilding process

Commencing today, the Bookrunner will be conducting an accelerated bookbuilding process to determine demand for participation in the Placing by Placees (the "Bookbuild"). The Announcement gives details of the terms and conditions of, and the mechanics of participation in, the Placing. However, the Bookrunner will be entitled to effect the Placing by such alternative method to the Bookbuild as they may, after consultation with the Company, determine. No commissions will be paid by or to Placees in respect of any participation in the Placing for Placing Shares.

A bid in the Bookbuild will be made on these Terms and Conditions which are attached to the Announcement and will be legally binding on the Placee on behalf of which it is made and, except with the Bookrunner's consent, will not be capable of variation or revocation after the close of the Bookbuild.

The book will open with immediate effect. The final number of Placing Shares to be issued pursuant to the Placing will be agreed by the Bookrunner and the Company at the close of the Bookbuild, and the result of the Placing will be announced as soon as practicable thereafter.  The timing for the close of the Bookbuild and the allocation of the Placing Shares shall be at the absolute discretion of the Bookrunner, in consultation with the Company.

To the fullest extent permissible by law, neither:

(a)  the Bookrunner;

(b) any of their respective affiliates, agents, advisers, directors, officers, consultants or employees; nor

(c)  to the extent not contained within (a) or (b), any person connected with the Bookrunner as defined in the FSMA ((b) and (c) being together "affiliates" and individually an "affiliate" of the Bookrunner),

shall have any liability (including to the extent permissible by law, any fiduciary duties) to Placees or to any other person whether acting on behalf of a Placee or otherwise. In particular, neither the Bookrunner nor any of their respective affiliates shall have any liability (including, to the extent legally permissible, any fiduciary duties), in respect of their conduct of the Bookbuild or of such alternative method of effecting the Placing as the Bookrunner may determine.

By participating in the Placing (such participation up to an agreed maximum level to be confirmed in and evidenced by either (i) a recorded telephone call or (ii) email correspondence, in either case between representatives of the Bookrunner to whom the Placee's commitment is given and the relevant Placee (a "Recorded Commitment")), each Placee will be deemed to have read and understood the Announcement and these Terms and Conditions in their entirety, to be participating and acquiring Placing Shares on these Terms and Conditions and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in these Terms and Conditions.

In particular, each such Placee irrevocably represents, warrants, undertakes, agrees and acknowledges (amongst other things) severally to the Company and the Bookrunner that:

1. it is a Relevant Person and that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

2. it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the representations, warranties, indemnities, acknowledgements, undertakings and agreements contained in these Terms and Conditions; and

3. it understands (or if acting for the account of another person, such person has confirmed that such person understands) and agreed to comply with the resale and transfer restrictions set out in these Terms and Conditions; and

4. except as otherwise permitted by the Company and subject to any available exemptions from applicable securities laws, it (and any account referred to in paragraph 3 above) is outside the United States acquiring the Placing Shares in offshore transactions as defined in and in accordance with Regulation S under the Securities Act.

No prospectus

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 any prospectus or other offering document to be published.  No prospectus or other offering document has been or will be submitted to be approved by the Financial Conduct Authority ("FCA") in relation to the Placing or the Placing Shares and Placees' commitments will be made solely on the basis of the information contained in the Announcement and any information publicly announced through a Regulatory Information Service (as defined in the AIM Rules for Companies (the "AIM Rules")) by or on behalf of the Company on or prior to the date of these Terms and Conditions (the "Publicly Available Information") and subject to any further terms set forth in writing in any contract note sent to an individual Placee.

Each Placee, by participating in the Placing, agrees that the content of the Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any information (other than the Publicly Available Information), representation, warranty or statement made by or on behalf of the Bookrunner or the Company or any other person and none of the Bookrunner, the Company nor any other person acting on such person's behalf nor any of their respective affiliates has or shall have any liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement.  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.  No Placee should consider any information in the Announcement or these Terms and Conditions to be legal, tax, business or other advice.  Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Application for admission to trading

Application(s) will be made to the London Stock Exchange for admission of the Placing Shares to trading on AIM.

It is expected that Admission will take place on the Admission Date and that dealings in the New Ordinary Shares on AIM will commence at the same time.

Principal terms of the Placing

1. finnCap is acting as nominated adviser and broker to the Placing, as agent for and on behalf of the Company.

2. Participation in the Placing is by invitation only and will only be available to persons who may lawfully be, and are, invited by the Bookrunner to participate.  The Bookrunner and any of their respective affiliates are entitled to participate in the Placing as principal.

3. Each Placee will confirm the maximum number of Placing Shares it is willing to acquire in a Recorded Commitment.  Once they have made a Recorded Commitment, each Placee will have an immediate, separate, irrevocable and binding obligation, owed to the Bookrunner (as agent for the Company), to subscribe and pay for, at the Issue Price, the number of Placing Shares allocated to it, up to the agreed maximum.

4. Each Placee's allocation and whether such Placee participates in the Placing has or will be determined by the Bookrunner in their discretion following consultation with the Company will be confirmed by the Bookrunner either orally or in writing via a contract note.

5. Each Placee's commitment will be confirmed in and evidenced by a Recorded Commitment.  These Terms and Conditions will be deemed incorporated into each contract which is entered into by way of a Recorded Commitment and will be legally binding on the relevant Placee(s) on behalf of whom the commitment is made with effect from the end of the Recorded Commitment and, except with the Bookrunner's prior written consent, will not be capable of variation or revocation after such time.  A contract note confirming each Placee's allocation of Placing Shares will be sent to them following the Recorded Commitment and the allocation process.  These Terms and Conditions shall be deemed incorporated into any such contract note.

6. Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to the Bookrunner (as agent for the Company), to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Issue Price and the number of Placing Shares allocated to such Placee (subject always to such Placee's agreed maximum).

7. The Bookrunner reserves the right to scale back the number of Placing Shares to be subscribed by any Placee in the event that the Placing is oversubscribed. The Bookrunner also reserves the right not to accept offers to subscribe for Placing Shares or to accept such offers in part rather than in whole. The acceptance and, if applicable, scaling back of offers shall be at the absolute discretion of the Bookrunner.

8. Except as required by law or regulation, no press release or other announcement will be made by the Bookrunner or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

9. All obligations under the Placing will be subject to fulfilment 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".

10. By participating in the Placing, each Placee  agrees 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.

Registration and settlement

By participating in the Placing, each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed as directed by the Bookrunner in accordance with either the standing CREST or certificated settlement instructions which they have in place with the Bookrunner.

Settlement of transactions in the New Ordinary Shares following Admission will take place within the CREST system, subject to certain exceptions.  Settlement through CREST will be on a delivery versus payment basis ("DVP") unless otherwise notified by the Bookrunner and is expected to occur on the Admission Date. 

In the event of any difficulties or delays in the admission of any Placing Shares to CREST or the use of CREST in relation to the Placing, the Company and the Bookrunner may agree that the Placing Shares (or any of them) should be issued in certificated form.  The Bookrunner reserves the right to require settlement for any of the Placing Shares, and to deliver any of the Placing Shares to any Placees, by such other means as it deems necessary if delivery or settlement to any Placee is not practicable within the CREST system or would not be consistent with regulatory requirements in the jurisdiction in which a Placee is located.

Interest is chargeable daily on payments not received from Placees on or before the due date in accordance with the arrangements set out above, in respect of either CREST or certificated deliveries, at the rate of 3 percentage points above prevailing base rate of Barclays Bank plc as determined by the Bookrunner.

Each Placee is deemed to agree that if it does not comply with these obligations, the Bookrunner may sell any or all of their Placing Shares on their behalf and retain from the proceeds, for the Bookrunner's own 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 Issue Price and for any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of its Placing Shares on its behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees must ensure that, upon receipt, any relevant 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 for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to United Kingdom stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.

Subject to the proviso that once Admission has occurred no party to the Placing Agreement shall be entitled to terminate any part of the Placing Agreement which relates to Admission and/or the placing, allotment or issue of the/New Ordinary Shares, the obligations of the Bookrunner under the Placing Agreement are, and the Placing is, conditional upon, inter alia:

(a)  the Resolutions being passed at the General Meeting;

(b) the warranties and undertakings contained in the Placing Agreement ("Warranties") being true, accurate and not misleading when made on the date of the Placing Agreement and immediately prior to Admission by reference to the facts and circumstances subsisting at that time;

(c)  the Company having fully performed its obligations under the Placing Agreement to the extent that they fall to be performed prior to Admission;

(d) the Bookrunner not having exercised their right to terminate the Placing Agreement; and

(e)  Admission having become effective at or around the Admission Date;

(f)  all conditions to the obligations of the Bookrunner included in the Placing Agreement being together, the "conditions").

If any of the conditions is not fulfilled or, where permitted, waived in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as the Company and the Bookrunner may agree), or the Placing Agreement is terminated in accordance with its terms, the Placing (or such part of it as may then remain to be completed) will lapse and the Placee's rights and obligations shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.

By participating in the Placing, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Termination of the Placing" below and will not be capable of rescission or termination by it.

The Bookrunner may, in its absolute discretion and upon such terms as it thinks fit, waive fulfilment of all or any of the conditions in the Placing Agreement in whole or in part, or extend the time provided for fulfilment of one or more conditions, save that certain conditions may not be waived.  Any such extension or waiver will not affect Placees' commitments as set out in these Terms and Conditions.

The Bookrunner may terminate the Placing Agreement in certain circumstances, details of which are set out below.

Neither the Bookrunner nor any of their respective affiliates, agents, advisers, directors, officers or employees nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision any of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing (or any part thereof) nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally (or any part thereof) and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Bookrunner.

Termination of the Placing

If in the Bookrunner's reasonable opinion:

(a)  the Company is in breach of any of its obligations under the Placing Agreement, or is likely to be so in breach, or cannot comply with any such obligation, or is unlikely to able to do so; or any warranty is or if repeated at any time up to Admission (by reference to the facts and circumstances then existing) would be untrue, inaccurate or misleading; or

(b)  there has been an adverse development or other adverse occurrence relating to any director or any group member (whether or not occurring or arising before or after the date of the Placing Agreement) of which the Bookrunner was unaware when entering into the Placing Agreement, (in any case by itself or together with any other such occurrence) to an extent which the Bookrunner reasonably regards as material; or

(c)  on or after the date of the Placing Agreement there happens, develops or comes into effect:

i.  a general moratorium on commercial banking activities in London or New York declared by the relevant authorities or a material disruption in commercial banking or securities settlement or clearance services in the United Kingdom, any member state of the EEA or the United States; or

ii.  the declaration, outbreak or escalation of war or other hostilities, or the occurrence of any acts of terrorism, involving the United Kingdom or the United States or the declaration by or for the government of the United Kingdom or the United States of a national emergency; or

iii.  any calamity, disaster, natural event or other occurrence of any kind (including without limitation as a result of a significant new mutation or escalation of the infection rate of COVID-19 after the date of the Placing Agreement) which (by itself or together with any other such occurrence) in the Bookrunner's reasonable opinion is likely to materially and adversely affect or prejudice the market's perception of the Company or the financial position or trading position or prospects of the Group taken as a whole; or

iv.  a change, or any development likely to involve a prospective change (in each case whether or not foreseeable at the date of the Placing Agreement) in or affecting the condition (financial or other), business prospects, earnings, business affairs or results of the Group, whether or not arising in the ordinary course of business which, in any such case, in the Bookrunner's reasonable opinion is materially adverse; or

v.  any crisis of international or national effect (including without limitation as a result of a significant new mutation or escalation of the infection rate of COVID-19 after the date of the Placing Agreement and a material escalation of the conflict in Ukraine) or any change in any currency exchange rates or controls or in any financial, political, economic or market conditions (including disruption to trading on any stock exchange, multilateral trading facility or over-the-counter market) or in market sentiment or any other calamity or crisis which, in any such case, in the Bookrunner's reasonable opinion is materially adverse; or the suspension or limitation of trading generally on the London Stock Exchange, the American Stock Exchange, the New York Stock Exchange, the NASDAQ National Market or any other market operated within the United Kingdom that is a "prescribed market" for the purpose of section 118 of FSMA or the fixing of any minimum or maximum prices or price ranges for any such trading; or

vi.  a change or development involving a prospective change in taxation affecting any Group Member, the Placing or the holding or ownership or transfer of any Ordinary Shares which, in any such case, in the Bookrunner's reasonable opinion is materially adverse; or

vii.  the imposing of exchange controls by the United Kingdom, any member state of the EEA, the United States or China,

the Bookrunner may terminate its obligations under the Placing Agreement with immediate effect by notice in writing delivered to the Company or (if such delivery is not practicable in the circumstances) by a verbal communication to any Director (such communication to be confirmed in writing by the Bookrunner as soon as reasonably practicable afterwards), such delivery or communication to be made before Admission.

If the Placing Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in these Terms and Conditions shall cease and terminate at such time and no claim can be made by any Placee in respect thereof.

By participating in the Placing, each Placee agrees with the Company and the Bookrunner that the exercise by the Company or the Bookrunner of any right of termination or any other right or other discretion under the Placing Agreement shall be within the absolute discretion of the Company or the Bookrunner or for agreement between the Company and the Bookrunner (as the case may be) and that neither the Company nor the Bookrunner need make any reference to such Placee and that none of the Company, the Bookrunner nor any of their respective affiliates, agents, advisers, directors, officers or employees shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.

By agreeing with the Bookrunner (as agent of the Company) to subscribe for Placing Shares under the Placing, a Placee (and any person acting on a Placee's behalf) will irrevocably acknowledge and confirm and warrant and undertake to, and agree with, each of the Company and the Bookrunner, in each case as a fundamental term of such Placee's application for Placing Shares and of the Company's obligation to allot and/or issue any Placing Shares to it or at its direction, that its rights and obligations in respect of the Placing (or any part of it) will terminate only in the circumstances described above and under the "Conditions of the Placing" section above and will not be capable of rescission or termination by it in any other circumstances.

Representations, warranties and further terms

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) represents, warrants, acknowledges, undertakes, confirms and agrees (for itself and for any such prospective Placee) that (save where the Bookrunner expressly agrees in writing to the contrary):

1. it has read and understood the Announcement and these Terms and Conditions in their entirety and its acquisition of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained herein and it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Placing, the Company, the Placing Shares or otherwise, other than the information contained in the Announcement and the Publicly Available Information;

2. it has not received a prospectus or other offering document in connection with the Placing and acknowledges that no prospectus or other offering document:

(a) is required under any applicable law; and

(b) has been or will be prepared in connection with the Placing

and, in particular, that the Subscription and Open Offer referred to in the Announcement and the Circular relating thereto are separate from the Placing and do not form part of any offer or agreement concerning the Placing and/or any Placing Shares;

3. the Ordinary Shares are admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules and the Market Abuse Regulation (EU Regulation No. 596/2014, as retained and applicable in the UK pursuant to s3 of the European Union (Withdrawal) Act 2018 (the "MAR")), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;

4. it has made its own assessment of the Placing Shares and has relied on its own investigation of the business, financial position and other aspects of the Company in accepting a participation in the Placing and neither the Bookrunner nor the Company nor any of their respective affiliates, agents, advisers, directors, officers or employees nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company or any other person other than the information in the Announcement and these Terms and Conditions or the Publicly Available Information; nor has it requested either of the Bookrunner, the Company, any of their respective affiliates, agents, advisers, directors, employees or officers or any person acting on behalf of any of them to provide it with any such information;

5. neither the Bookrunner nor any person acting on behalf of them nor any of their respective affiliates, agents, directors, officers or employees has or shall have any liability for any Publicly Available Information, or any representation relating to the Company, provided that nothing in these Terms and Conditions excludes the liability of any person for any fraudulent misrepresentation made by that person;

6. 

(a)         the only information on which it is entitled to rely on and on which it has relied in committing to acquire the Placing Shares is contained in this Announcement and the Publicly Available Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on this Announcement and the Publicly Available Information;

(b) neither the Bookrunner nor any of their respective affiliates, agents, directors, officers or employees have made any representation or warranty to it, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of this Announcement, the Circular or the Publicly Available Information;

(c) it has conducted its own investigation of the Company, the Placing and the Placing Shares, satisfied itself that the information is still current and relied on that investigation for the purposes of its decision to participate in the Placing; and

(d) it has not relied on any investigation that the Bookrunner or any person acting on their behalf may have conducted with respect to the Company, the Placing or the Placing Shares;

7. the contents of this Announcement, the Circular and the other Publicly Available Information as well as any information made available (in written or oral form) in presentations or as part of roadshow discussions with investors relating to the Company (the "Information") has been prepared by and is exclusively the responsibility of the Company and neither the Bookrunner nor any persons acting on their behalf is responsible for or has or shall have any liability for any such Information, or for any representation, warranty or statement relating to the Company contained therein nor will they be liable for any Placee's decision to participate in the Placing based on any Information or any representation, warranty or statement contained therein or otherwise;

8. it has the funds available to pay for the Placing Shares which it has agreed to acquire and acknowledges and agrees that it will pay the total subscription amount in accordance with the Announcement and  these Terms and Conditions by the due time and date set out herein, failing which the relevant Placing Shares may be placed with other Placees or sold at such price as the Bookrunner determines;

9. it and/or each person on whose behalf it is participating:

(a) is entitled to acquire Placing Shares pursuant to the Placing under the laws and regulations of all relevant jurisdictions;

(b) has fully observed such laws and regulations;

(c) has capacity and authority and is entitled to enter into and perform its obligations as an acquirer of Placing Shares and will honour such obligations; and

(d) has obtained all necessary consents and authorities (including, without limitation, in the case of a person acting on behalf of a Placee, all necessary consents and authorities to agree to the terms set out or referred to in these Terms and Conditions) under those laws or otherwise and complied with all necessary formalities to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto and, in particular, if it is a pension fund or investment company it is aware of and acknowledges it is required to comply with all applicable laws and regulations with respect to its acquisition of Placing Shares;

10. it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are acquired will not be, a resident of, or with an address in, or subject to the laws of, Australia, Canada, the Republic of South Africa, the Republic of Ireland or Japan, and it acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of Australia, Canada, the Republic of South Africa, the Republic of Ireland or Japan and may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;

11. it and the beneficial owner of the Placing Shares is, and at the time the Placing Shares are acquired will be, outside the United States and acquiring the Placing Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S under the Securities Act;

12. it understands that the Placing Shares have not been, and will not be, registered under the Securities Act and may not be offered, sold or resold in or into or from the United States except pursuant to an effective registration under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in accordance with applicable state securities laws; and no representation is being made as to the availability of any exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;

13. it (and any account for which it is purchasing) is not acquiring the Placing Shares with a view to any offer, sale or distribution thereof within the meaning of the Securities Act;

14. it understands that:

(a) the Placing Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act and will be subject to restrictions on resale and transfer subject to certain exceptions under US law; and

(b) it will not deposit the Placing Shares in an unrestricted depositary receipt programme in the United States or for US persons (as defined in the Securities Act);

15. it will not offer, sell, transfer, pledge or otherwise dispose of any Placing Shares except:

(a) in an offshore transaction in accordance with Rules 903 or 904 of Regulation S under the Securities Act; or

(b) pursuant to another exemption from registration under the Securities Act, if available,

and in each case in accordance with all applicable securities laws of the states of the United States and all other applicable jurisdictions;

16. no representation has been made as to the availability of the exemption provided by Rule 144, Rule 144A or any other exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;

17.  it understands that the Placing Shares are expected to be issued to it through CREST but may be issued to it in certificated, definitive form and acknowledges and agrees that the Placing Shares will, to the extent they are delivered in certificated form, bear a legend to the following effect unless agreed otherwise with the Company and the Bookrunner:

"THESE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE APPLICABLE SECURITIES LAWS OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (C) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES.  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THE SECURITIES MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF THE COMPANY'S SECURITIES ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK.  EACH HOLDER, BY ITS ACCEPTANCE OF THESE SHARES, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS.";

18. it is not taking up the Placing Shares as a result of any "general solicitation" or "general advertising" efforts (as those terms are defined in Regulation D under the Securities Act) or any "directed selling efforts" (as such term is defined in Regulation S under the Securities Act);

19. if located in the United States, it understands that there may be certain consequences under United States and other tax laws resulting from an investment in the Placing and it has made such investigation and has consulted its own independent advisers or otherwise has satisfied itself concerning, without limitation, the effects of United States federal, state and local income tax laws and foreign tax laws generally;

20. it will not distribute, forward, transfer or otherwise transmit this Announcement or these Terms and Conditions and/or the Circular or any part of them, or any other presentational or other materials concerning the Placing in or into or from the United States (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;

21. none of the Bookrunner, their respective affiliates and/or any person acting on behalf of any of them 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 the Bookrunner and that the Bookrunner has no duties or responsibilities to it for providing the protections afforded to its clients 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;

22. it will make payment to the Bookrunner for the Placing Shares allocated to it in accordance with these Terms and Conditions on or by the specified time (being the Admission Date), failing which the relevant Placing Shares may be placed with others on such terms as the Bookrunner determines in its absolute discretion without liability to the Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in these Terms and Conditions) which may arise upon the sale of such Placee's Placing Shares on its behalf;

23. its Recorded Commitment to acquire Placing Shares will represent a maximum number of Placing Shares which it may be required to subscribe for, and that following the allocation process the Bookrunner 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;

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

25. the person who it specifies for registration as holder of the Placing Shares will be:

(a) the Placee; or

(b) a nominee of the Placee, as the case may be. 

26. neither the Bookrunner nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe the above requirement.  Each Placee and any person acting on behalf of such Placee agrees to acquire Placing Shares pursuant to the Placing and agrees to indemnify the Company and the Bookrunner in respect of the same on the basis that the Placing Shares will be allotted to a CREST stock account of the Bookrunner or transferred to a CREST stock account of the Bookrunner who will hold them as nominee on behalf of the Placee until settlement in accordance with its standing settlement instructions with it;

27. the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a stamp duty or stamp duty reserve tax liability under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depository receipts and clearance services) and it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability;

28. if it is within the United Kingdom, it and any person acting on its behalf (if within the United Kingdom) falls within Article 19(5) and/or 49(2) of the Order and undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;

29. it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted, and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA;

30. it has only communicated or caused to be communicated and it will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person and it acknowledges and agrees that neither the Announcement, these Terms and Conditions nor the Circular has been or will be approved by the Bookrunner in their capacity as an authorised person under section 21 of the FSMA and it may not therefore be subject to the controls which would apply if it was made or approved as financial promotion by an authorised person;

31. it has complied, and it will comply with all applicable laws in any jurisdiction with respect to anything done by it or on its behalf in relation to the Placing Shares (including all relevant provisions of the FSMA in respect of anything done in, from or otherwise involving the United Kingdom);

32. the Placing Shares acquired 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 any person save in circumstances in which the express prior written consent of the Bookrunner has been given to the offer or resale;

33. if it has received any inside information (for the purposes of the MAR and/or section 56 of the Criminal Justice Act 1993 or other applicable law) about the Company in advance of the Placing, it has not:

(a) dealt (or attempted to deal) in the securities of the Company;

(b) encouraged, recommended or induced another person to deal in the securities of the Company; or

(c) unlawfully disclosed such information to any person, prior to the information being made publicly available;

34. neither the Bookrunner, the Company nor any of their respective affiliates, agents, advisers, directors, officers or employees nor any person acting on behalf of the Bookrunner or their respective affiliates, agents, advisers, directors, officers or employees nor any person acting on behalf of any of them is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing nor providing advice in relation to the Placing nor in respect of any representations, warranties, acknowledgements, agreements, undertakings, or indemnities contained in the Placing Agreement nor the exercise or performance of any of the Bookrunner's rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

35. the Bookrunner and their respective affiliates, acting as an investor for its or their own account(s), may bid or subscribe for and/or purchase Placing Shares and, in that capacity, may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise.  Accordingly, references in these Terms and Conditions and/or the Announcement to the Placing Shares being offered, subscribed, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by, the Bookrunner and/or any of their respective affiliates acting as an investor for its or their own account(s).  Neither the Bookrunner nor the Company intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so;

36. it:

(a) has complied, and will comply, with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017;

(b) is not a person:

(i) with whom transactions are prohibited under the US Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury;

(ii) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or

(iii) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations or other applicable law,

(all such statutes, rules and regulations referred to in this paragraph 36 together, the "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 and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to the Bookrunner such evidence, if any, as to the identity or location or legal status of any person which it may request from it in connection with the Placing (for the purpose of complying with the Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by the Bookrunner on the basis that any failure by it to do so may result in the number of Placing Shares that are to be acquired by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as the Bookrunner may decide at its sole discretion;

37. in order to ensure compliance with the Regulations, the Bookrunner (for itself and as agent on behalf of the Company) or the Company's registrars may, in their absolute discretion, require verification of its identity.  Pending the provision to the Bookrunner or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at the Bookrunner's  absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed at the Bookrunner or the Company's registrars', as the case may be, absolute discretion. If within a reasonable time after a request for verification of identity the Bookrunner (for itself and as agent on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, either the Bookrunner and/or the Company may, at its absolute discretion, terminate its commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;

38. its commitment to acquire Placing Shares on the Terms and Conditions will continue notwithstanding any amendment that may in 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's or the Bookrunner's conduct of the Placing;

39. neither of the Bookrunner nor any of their respective affiliates, agents, advisers, directors, officers or employees makes any representation in respect of or shall have any responsibility for the tax treatment that any Placee may receive or expect in relation to their investment in Placing Shares;

40. it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of acquiring the Placing Shares.  It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing.  It has relied upon its own examination and due diligence of the Company and its affiliates taken as a whole, and the terms of the Placing, including the merits and risks involved;

41. it irrevocably appoints any duly authorised officer of the Bookrunner as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares which it agrees to acquire upon these Terms and Conditions;

42. the Company, the Bookrunner and others (including each of their respective affiliates, agents, advisers, directors, officers and employees) will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements, which are given to the Bookrunner on their own behalf and on behalf of the Company and are irrevocable;

43. it is acting as principal only in respect of the Placing or, if it is acquiring the Placing Shares as a fiduciary or agent for one or more investor accounts, it is duly authorised to do so and it has full power and authority to make, and does make, the foregoing representations, warranties, acknowledgements, agreements and undertakings on behalf of each such accounts;

44. time is of the essence as regards its obligations under these Terms and Conditions;

45. any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to the Bookrunner;

46. the Placing Shares will be issued subject to these Terms and Conditions; and

47. these Terms and Conditions and all documents into which these Terms and Conditions are incorporated by reference or otherwise validly forms a part and/or any agreements entered into pursuant to these terms and conditions and all agreements to acquire Placing Shares pursuant to the Placing will be governed by and construed in accordance with English law and it submits to the exclusive jurisdiction of the English courts in relation to any claim, dispute (contractual or otherwise) or matter arising out of or in connection with such contract except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with interest chargeable thereon) may be taken by the Company or the Bookrunner in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify and hold the Company, the Bookrunner and each of their respective affiliates, agents, directors, officers and 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 given by the Placee (and any person acting on such Placee's behalf) in these Terms and Conditions or incurred by either of the Bookrunner, the Company or any of their respective affiliates, agents, directors, officers or employees arising from the non-performance of the Placee's obligations as set out in these Terms and Conditions, and further agrees that the provisions of these Terms and Conditions shall survive after the completion of the Placing.

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 United Kingdom relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct by the Company.  Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service.  If there are any such arrangements, or the settlement related to any other dealings in the Placing Shares, stamp duty or stamp duty reserve tax may be payable.  In that event, the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax and neither the Company nor the Bookrunner shall be responsible for such stamp duty or stamp duty reserve tax.  If this is the case, each Placee should seek its own advice and they should notify the Bookrunner accordingly.  In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares and each Placee, or the Placee's nominee, in respect of whom (or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such non-United Kingdom stamp, registration, documentary, transfer or similar taxes or duties undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company and the Bookrunner in the event that any of the Company and/or the Bookrunner have incurred any such liability to such taxes or duties.

The representations, warranties, acknowledgements and undertakings contained in these Terms and Conditions are given to the Bookrunner for itself and on behalf of the Company and are irrevocable.

The Bookrunner is authorised and regulated by the FCA in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Placing, and will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to their clients or for providing advice in relation to the Placing or any other matters referred to in these Terms and Conditions.

Each Placee and any person acting on behalf of the Placee acknowledges that the Bookrunner does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings, acknowledgements, agreements or indemnities in the Placing Agreement.

The provisions of these Terms and Conditions may be varied, waived or modified as regards specific Placees or on a general basis by the Bookrunner provided always that such variation, waiver or modification is not materially prejudicial to the interests of the Company.

In the case of a joint agreement to acquire Placing Shares, references to a "Placee" in these Terms and Conditions are to each of such Placees and such joint Placees' liability is joint and several.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that the Bookrunner may (at its absolute discretion) satisfy its obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any connected or associated person to do so.

When a Placee or any person acting on behalf of the Placee is dealing with the Bookrunner, any money held in an account with the 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 relevant rules and regulations of the FCA made under the FSMA.  Each 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 the Bookrunner's money in accordance with the client money rules and will be held by it under a banking relationship and not as trustee.

In these Terms and Conditions any words following the terms "including", "include", "in particular", "for example" or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms.

References to time in the Terms and Conditions are to London time, unless otherwise stated.

All times and dates in these Terms and Conditions may be subject to amendment.  Placees will be notified of any changes.

No statement in this Announcement, these Terms and Conditions or the Circular is intended to be a profit forecast or estimate, and no statement in this Announcement, these Terms and Conditions or the Circular should be interpreted to mean that 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 shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares.  Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than AIM.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, these Terms and Conditions and/or this Announcement.

APPENDIX 2

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.

Admission Date means the admission of the New Ordinary Shares to trading on AIM becoming effective as provided in Rule 6 of the AIM Rules for Companies. 

Admission Settlement Date means the date of settlement of transactions in the New Ordinary Shares following Admission which will take place within the CREST system (subject to certain exceptions).

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.

Bookbuild means an accelerated process conducted by the Bookrunner to determine demand for participation in the Placing by Placees.

Capital Reorganisation means the proposed subdivision of the Company's 23,784,483 Existing Ordinary Shares of 15 pence into 23,784,483 ordinary shares of 0.1 pence and 23,784,483 Deferred Shares of 14.9 pence in accordance with Resolution 3, contained in the Notice of General Meeting set out within the Circular.

Circular means the circular, to be published by the Company on 3 October 2022 in relation to the Placing and Open Offer which will include notice of convening the General Meeting at which the Resolutions will be proposed.

Closing Price means the closing middle market quotation of an Ordinary Share as derived from the Daily Official List of the London Stock Exchange on 29 September 2022.

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. 

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).

Current Articles means the articles of association of the Company dated 25 November 2020.

Directors or Board means the board of directors of the Company.

EBITDA means earnings before interest, taxation, depreciation and amortisation.

EEA means The European Economic Area.

Enlarged Share Capital means the Issued share capital of the Company immediately following Admission comprising the Existing Ordinary Shares and the New Ordinary Shares.

Entrepreneurs Fund means Entrepreneurs Fund L.P.

EU means the European Union.

Euroclear means Euroclear UK & Ireland Limited.

Existing Ordinary Shares means the 23,784,483 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. 

finnCap means finnCap Ltd, Nominated Advisor, Broker and Bookrunner to the Company.

Form of Proxy means the form of proxy for use in connection with the General Meeting accompanying the Circular.

FSMA means Financial Services and Markets Act 2000.

Fundraising means the Placing and the Open Offer (and "Fundraise" shall be constructed accordingly).

General Meeting means the general meeting of the Company to be convened pursuant to the notice of general meeting included within the Circular.

Group means the group of which the Company is the parent.

Group Member means a member of the Group.

IFB means IFB Industries Limited.

Issue Price means 5 pence per New Ordinary Share.

London Stock Exchange means London Stock Exchange plc.

MAR  means the Market Abuse Regulation (EU)No.596/2014, as retained and applicable in the UK pursuant to s3 of the European Union (Withdrawal) Act 2018. 

New Articles means the proposed new articles of association to be adopted in the event Resolution 3 as set out in the notice of General Meeting included within the Circular is passed at the General Meeting

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

Notice of General Meeting means the notice of the General Meeting included within the Circular.

OEMs means original equipment manufacturers.

Open Offer means the conditional invitation proposed to be made by the Company to Qualifying Shareholders to subscribe for the Open Offer Shares.

Open Offer Shares means up to 20,386,699 new Ordinary Shares which are to be the subject of the Open Offer.

Ordinary Shares means ordinary shares of 15 pence each in the capital of the Company and following the Capital Reorganisation the ordinary shares of 0.1 pence each in the capital of the Company.

Placees means the institutional investors participating in the proposed Placing.

Placing means the proposed placing by finnCap as agent for the Company, of the Placing Shares at the Issue Price on a non-pre-emptive basis, on the terms and conditions set out in the Placing Agreement and/or the Subscription Agreements (as applicable).

Placing Agreement means the agreement to be entered into between the Company and finnCap in connection with the Placing.

Placing Conditions are as defined in Appendix 1.

Placing Shares means 120,000,000 Ordinary Shares which may, pursuant to the Placing, be allotted and issued fully paid up at the Issue Price and admitted to trading on AIM.

Qualifying Shareholders means Shareholders on the register of members of the Company as at the Record Date, excluding certain overseas Shareholders (as further described in the Circular).

Record Date means close of business on 29 September 2022.

Registrar means Neville Registrars Limited.

Relevant Persons are as defined in Appendix 1.

Resolutions means the resolutions relating to the Placing and 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. 

Securities Act means the US Securities Act of 1933, as amended.

Shareholders means holders of Ordinary Shares.

Subscription means the conditional subscription for 33,200,000 New Ordinary Shares by Entrepreneurs Fund L.P., Klaas de Boer, Neil Austin, Paul Denney, Rachel Nooney and Mark Nichols as part of the Placing.

Takeover Code means the City Code on Takeovers and Mergers.

United Kingdom or UK means United Kingdom of Great Britain and Northern Ireland.

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

Warrant Instrument means the instrument dated 20 October 2022 constituting the Warrants.

Warrants means the unlisted warrants to be issued, conditional on the passing of the Resolutions and completion of the Fundraising, to subscribers of Placing Share, Subscription Shares and Open Offer Shares granting to the holders thereof rights to subscribe for new Ordinary Shares exercisable at a price of 5 pence per Ordinary Share during the Warrant Exercise Period in accordance with the terms of the Warrant Instrument.

Warrant Exercise Period means the period of 18 months from Admission in accordance with the terms of the Warrant Instrument.

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.

 

END

 

 

MSCFLFSLADIIVIF