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Xeros Technology Group plc (AIM: XSG), the developer and provider of patented water saving and filtration products with multiple commercial applications, proposes to raise approximately £5.0 million before fees and expenses by a placing of 505,000,000 new ordinary shares ("Ordinary Shares") with existing and new institutional investors at an issue price of 1 pence per share (the "Placing") (the "Issue Price"). In addition to the Placing, qualifying shareholders will be given the opportunity to subscribe for up to 199,932,635 new Ordinary Shares through an open offer to raise up to £2 million before expenses (the "Open Offer") (together the "Fundraising").

To read the full release, please click here.

Highlights

• The Fundraising will raise gross proceeds of up to £7.05 million at the Issue Price;
• The net proceeds are intended to be used to fund the Group's operations through to the end of 2020 and the Directors will seek to raise further funds at the end of 2020, if not sooner. The Directors believe the Group will be generating sufficient cashflows to be break-even by the end of 2021.
• The Fundraising is conditional upon the granting of shareholder authorities to issue new Ordinary Shares and to dis-apply pre-emption rights, such authorities are to be sought at a general meeting of the Company's shareholders ("General Meeting"), details of which are within this announcement;
• As previously announced, the Company aims to achieve the above plan by becoming a pure-play licensing business. The Company believes this is achievable in three main areas: firstly, signing and executing license agreements with acceptable levels of royalties with selected partners in target markets/geographies; secondly, exiting operational business once market and product viability is proven; and lastly, reducing its cost and asset base to that of a pure-play licensing company. 
• Admission of the 505,000,000 Ordinary Shares ("Placing Shares") is expected to be on 20 November 2019, although this is conditional on the passing of resolutions (the "Resolutions") to be put to shareholders at the General Meeting.
• Admission of up to 199,932,635 Ordinary Shares ("Open Offer Shares") is expected to be on 20 November 2019, although the final number of Open Offer Shares is conditional on the passing of resolutions to be put to shareholders at the General Meeting.
• General Meeting to be held at the offices of Squire Patton Boggs (UK) LLP at 7 Devonshire Square, London, EC2M 4YH at 10.00 a.m. on 19  November 2019.

Commenting on the Placing, Mark Nichols, CEO of Xeros, said:

"Xeros' products help reduce the increasing pressures on the world's supply of water. Testament to this are the development and license agreements we have signed in India and China, the world's two largest water users.

"This funding, provided by both existing and new shareholders, will enable us to complete our full migration to becoming a high-margin royalty business delivering sustainability and cost benefits to our licensees' customers.

"Having completed much of the development and protection of our products, we are now well-positioned to continue the commercialisation of our intellectual property with major OEMs across multiple large-scale markets."

Details of the Placing

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

The Placing of the Placing Shares 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.

The Placing Shares, when issued, will represent approximately 196.5 per cent. of the Company's issued share capital prior to the Placing. The Issue Price of 1 pence per new Ordinary Share represents a discount of approximately 81 per cent. to the closing mid-market price of 5.17 pence per Ordinary Share on 30 October 2019, being the last trading day immediately preceding the date of this Announcement.

Details of the Open Offer

At the same time as the Placing, the Company also proposes to raise up to a further £2 million before fees and expenses (assuming full take up of the Open Offer) by way of the Open Offer. The Open Offer will be made to all Qualifying Shareholders in order to provide them with the opportunity to participate in the Fundraising at the Issue Price. The Open Issue is being conducted on the basis of 7 Open Offer Shares for every 9 Existing Ordinary Shares held on the Record Date. Qualifying Shareholders subscribing for their full Basic Entitlement under the Open Offer may also apply for additional Open Offer Shares through the Excess Application Facility.

Neither the Placing nor the Open Offer are being underwritten.

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.

General Meeting and Shareholder Approval

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

1. by way of ordinary resolution to give the Directors authority to allot the New Ordinary Shares; and
2. by way of a special resolution to dis-apply statutory pre-emption rights in respect thereof.

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 of the Company is to be held at the offices of Squire Patton Boggs (UK) LLP at 7 Devonshire Square, London, EC2M 4YH  at 10.00 a.m. on 19 November 2019 at which the Resolutions will be proposed. A Circular containing a notice of General Meeting will be sent to shareholders on 1 November 2019. The shareholder Circular and notice of General Meeting will be made available on the Company's website at www.xerostech.com.

Enquiries:

Xeros Technology Group plc	www.xerostech.com Tel: 0114 321 6328
Mark Nichols, CEO Paul Denney, CFO
finnCap	www.finncap.com +44 (0) 20 7220 0500
Julian Blunt, Teddy Whiley (Corporate Finance) Andrew Burdis, Sunila de Silva (ECM)
Instinctif Partners	+44 (0) 20 7457 2020
Adrian Duffield, Chantal Woolcock & James Gray

 

Notes for editors:

About Xeros Technology Group plc

Xeros Technology Group plc is a platform technology Group that is transforming water intensive industrial and commercial processes.

Xeros' patented XOrbTM technologies significantly reduce the amount of water used in the washing or dyeing of soft substrates such as garments and fabrics. It enables the remaining water to become far more efficient  and effective in either affixing or removing molecules, the result being improvements in economic, operational, product and sustainability outcomes. The Group is applying its technology in the fields of cleaning, tanning and textiles.

Xeros' XDrumTM technology is a patented, simple, low cost machine drum design which enables XOrbs to be introduced into and subsequently removed from process cycles in Xeros' chosen markets. The design enables rotating drum machine Original Equipment Manufacturers ("OEMs") in the fields of garment manufacture and cleaning, the ability to make simple and low cost changes in their production lines to incorporate the Company's XOrb technology.

The Group has signed multiple agreements to develop and license its XDrum and XOrb products in major commercial and domestic markets.

XFiltraTM is a patented in-machine filtration technology which is designed to prevent harmful micro-plastics generated by washing cycles from being released into the aquacycle. Plastics released from synthetic clothing during washing cycles is one of the single largest sources of primary micro-plastic pollution.

To read the full release, please click here.