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XL TechGroup, Inc. (XLT)

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Tuesday 16 January, 2007

XL TechGroup, Inc.

Operational Update

XL TechGroup, Inc.
16 January 2007


Press Release                                                    16 January 2007

                               XL TechGroup, Inc.
                       ('XL TechGroup' or 'the Company')

Operational Update

XL TechGroup, Inc. (AIM: XLT), the systematic architect and builder of an
ongoing stream of high value new companies, is pleased to provide an update on
the progress of the Company's portfolio of businesses.

John Scott, CEO of XL TechGroup, commented: 'We are delighted with the advances
made by our companies in 2006.  TyraTech, DxTech, PetroAglae and QuoNova are
each making excellent progress towards increasing value.  TyraTech's pioneering
technology has been endorsed through its recent agreement with Kraft Foods Inc.,
as well as with Arysta, Scott's and Syngenta.  PetroAlgae has exceeded our
expectations and, as we near the completion of a test facility, is making rapid
progress with technology developments and potential partners.  DxTech is also
developing well after very successful first customer demonstrations.  We ended
2006 with the launch of our fifth company, QuoNova, and we have entered 2007
with confidence in our existing companies, as well as a great deal of optimism
about a number of the opportunities within our business creation pipeline.'

TyraTech LLC ('TyraTech')

TyraTech is developing a new class of highly effective, non-toxic pesticides and
parasiticides using cloned insect chemoreceptors, based on approved, safe,
natural oils for a variety of global markets.

XL TechGroup today announced the appointment of Dr R. Douglas Armstrong as full
time Chief Executive Officer of TyraTech.  TyraTech has appointed Nomura Code
Securities Limited and Jefferies International Limited as advisers.

As announced on 6 December 2006, TyraTech entered into an exclusive
co-development agreement with Kraft Foods Inc. for the development of compounds
used in functional foods and beverages intended to help prevent human parasitic
infection in the developing world.  This global, market-disrupting deal will
utilise TyraTech's novel screening platform to identify combinations of natural
ingredients that are highly effective and safe to use on an on-going basis to
break the cycle of re-infection.

TyraTech's other international agreements with Arysta, Scott's and Syngenta, as
announced during 2006, are also making strong progress in developing
horticultural and consumer applications for TyraTech's technology in the global
insecticide and pesticide markets.

PetroAlgae LLC ('PetroAlgae')

PetroAlgae is utilizing a proprietary environmentally-friendly algae and
technology platform which can cost-effectively produce a renewable replacement
for petroleum based products such as biodiesel fuel.

The company is now completing the construction of a second, and larger, test
facility in Florida, which will demonstrate that the algae produce at least two
hundred times more energy per acre than traditional biofuel crops, like
soybeans, and that the modular cultivation process is scalable.

A pilot production facility of 400 acres is then scheduled to be built, with
completion targeted for the end of 2007.  This pilot site is expected to be able
to produce almost 6 million gallons of raw oil per annum.  This yield, which can
be produced from facilities utilising waste ground, is equivalent to that
produced from over 115,000 acres of soybeans and almost 50,000 acres of
rapeseed, which require cultivated land.  Such production is possible as the
algae mature in 24 hours and convert 50 per cent of their weight to usable oil.

Further production facilities, in excess of 10,000 acres, are planned to be
under construction by the end of 2007, with the scale up accelerating into 2008
and beyond.

PetroAlgae is primarily aimed at the global commodity markets and the company is
already in preliminary talks with a number of potential project finance and
joint venture partners and customers.

DxTech LLC ('DxTech')

DxTech is developing a unique micro-fluidic system that essentially replaces the
full range of common blood tests currently performed at reference laboratories
around the world with a fully-automated, low cost point-of-care platform.

This cost effective diagnostic technology has undergone first distribution
customer demonstrations, specifically of a thyroid testing panel, during
November 2006.  These demonstrations have confirmed DxTech's gold standard
performance even compared to the clinical laboratory blood analysing systems
which exceed the standards of other point of care systems already in the market.

DxTech is in negotiations with a number of leading companies who are interested
in acting as partners and distributors, and has expectations of completing its
first commercial deal in the first half of 2007.

QuoNova LLC ('QuoNova')

As announced on 28 December 2006, XL TechGroup has created QuoNova, the fifth
company to reach the development stage of XL TechGroup's proven methodology for
value creation.

QuoNova is commercialising a novel Quorum Sensing Blocker technology which
prevents bacteria that form biofilms from doing so, and inhibits bacteria from
producing toxins which in addition, opens completely new application avenues in
a broad range of high value markets.  The breadth of the technology base puts
QuoNova in a leading position to achieve a breakthrough in addressing an ever
increasing need, and multi billion dollar markets, for safer, efficacious agents
in the global fight against infection and the damage caused by bacterial
biofilms.

QuoNova's business plan addresses multiple markets, such as treatments for lung
infections, medical device coatings, oral and optical care products, domestic or
industrial cleaners, anti-fouling paints, agrochemicals and large scale
industrial applications in the water and petroleum industries.  Proof of concept
for the technology has already been established, and commercialisation is
envisaged within two years for the most advanced applications.

GenXL LLC ('GenXL')

GenXL is a new value creation entity jointly owned by XL TechGroup and US-based
product innovation and technology development firm, GEN3 Partners Inc.

GenXL has now assembled an experienced management team and is currently
evaluating an initial 25 opportunities, which originate from the combined
pipelines of both XL TechGroup and GEN3.  Those opportunities selected for
development could result in individual new companies, standalone product lines,
technology licensing opportunities or an appropriate mix of these.

XL TechGroup looks forward to further announcements from GenXL during 2007 as
the company begins to create an additional income stream for our shareholders
above and beyond XL TechGroup's core business model.

Additional mezzanine borrowing facility

As announced on 9 January 2007, XL TechGroup has also raised additional
mezzanine funding of US$20 million from Laurus Master Fund, a New York based
institutional equity fund that specialises in making direct investments in
growing public companies.  These funds will be used to continue development of
XL TechGroup's existing companies as well as new opportunities in the pipeline.

                                    - Ends -

For further information:
XL TechGroup Inc.
John Scott / Harold Gubnitsky                              Tel: +1 321 409 7403
[email protected]                                         www.xltechgroup.com
Chris Munden, Director of Investor Relations          Tel: +44 (0) 20 7398 7720
[email protected]

For media enquiries:
Abchurch Communications

Heather Salmond / Gareth Mead                         Tel: +44 (0) 20 7398 7700
[email protected]                           www.abchurch-group.com


NOTES TO EDITORS

About XL TechGroup

XL TechGroup is in the business of significant value creation.  Working with
major international corporate and technology partners such as AES, Procter &
Gamble and leading universities, XL TechGroup first identifies global unmet
market needs and then targets and exploits these by the systematic creation of
successful, disruptive technology businesses.  These are built from scratch, and
are then funded and developed by XL TechGroup through to the point of a trade
sale or a stock market listing.

XL TechGroup's unique and proven methodology selects the best opportunities in
order to create one-to-two new companies annually, where each company is
expected to achieve a valuation of at least US$400 million within four years
from its creation.  While an XL TechGroup company might perform a stock market
listing at an earlier point in this four year timeframe, XL TechGroup would
retain its controlling interest and would continue to assist with the company's
development.

XL TechGroup's companies to date are: AgCert International plc (www.agcert.com),
TyraTech LLC (www.tyratech.com), DxTech LLC (www.dxtech.com), PetroAlgae LLC and
QuoNova LLC.

XL TechGroup has also established GenXL LLC as a joint venture to capture the
value of those prospects that do not quite meet the US$400 million, four year
criteria but still demonstrate considerable potential worth.  Over and above XL
TechGroup's core business model, GenXL will review a significant flow of
opportunities from both XL TechGroup and GEN3 in order to generate new
companies, standalone product lines and technology licensing opportunities or an
appropriate mix of these.

For further information, see www.xltechgroup.com




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