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Xeros Technology Group plc (AIM: XSG), the developer and licensor of technologies which reduce the environmental impact and cost of clothing and fabrics, is pleased to announce a proposed conditional placing to raise £8.0 million (before fees and expenses) via a placing of 3,333,333 new ordinary shares (the "Placing Shares") of 15 pence each in the capital of the Company ("Ordinary Shares") with existing and new institutional investors at an issue price of 240 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 416,586 new Ordinary Shares (the "Open Offer Shares") via an open offer 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 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 £8.0 million with up to an additional £1.0 million through the Open Offer;
• Net proceeds of the Fundraise will be used to provide the funding necessary to accelerate commercialisation of the Company's innovative XFiltra technology for the domestic washing machine market over the next two years with revenue anticipated in 2023;
• The net proceeds will also provide funding to continue the execution of the Company's current portfolio of contracts and development agreements and to enter into new agreements in additional geographies as well as providing contingency funding for any further potential COVID-19 related delays;
• The current plans with the Company's licensees and partners mean the directors expect the Company can deliver a cash breakeven position for Xeros by the end of 2022;
• The Fundraising is conditional on, amongst other things, shareholder approval at a General Meeting of the Company on 25 March 2021;
• Admission of the New Ordinary Shares is expected on 26 March 2021, subject to the passing of the Resolutions at the General Meeting;
• 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 18.8 per cent. of the Company's issued share capital prior to the Fundraising. The Issue Price of 240 pence per New Ordinary Share represents a discount of approximately 1.23 per cent. to the closing mid-market price of 243 pence per Ordinary Share on 4 March 2021, 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 Placing, Mark Nichols, CEO of Xeros, said:

"This placing enables the development and commercialisation by licensees of our filtration technology platform, XFiltraTM, in the domestic washing machine market where there is now regulatory and consumer pressure to stop some 280,000,000 kilograms of microfibres from washing clothes reaching the environment. These fibres are now to be found across the trophic range. It will also finance growth in the number of licensing contracts and high margin revenues in our XOrbTM/XDrumTM technology platform which radically reduce environmental impacts and costs across large parts of the clothing and fabric lifecycle.

"The support of existing and new shareholders in delivering these environmental improvements in global scale industries is highly valued by both the Company and the increasing numbers of stakeholders who will now benefit."

 

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

b)  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 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 25 March 2021 at which the Resolutions will be proposed. A Circular containing a notice of General Meeting is expected to be sent to shareholders on 8 March 2021. The shareholder Circular and notice of General Meeting will be made available on the Company's website at www.xerostech.com.

Pursuant to the Stay at Home Order introduced by the UK Government on 6 January 2021 to manage the Covid-19 virus (coronavirus), public gatherings of more than two people and non-essential travel are currently prohibited. The Company will therefore convene the General Meeting with the minimum quorum of two shareholders necessary to conduct the meeting, and it is expected that the Company's Chairman, Klaas de Boer, and Mark Nichols (Chief Executive) will form the necessary quorum.  All other Shareholders must not seek to attend the General Meeting in person.

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

	2021
Announcement Launch of ABB	5 March
Announcement of Result of ABB	5 March
Record date of Open Offer	6:00 p.m. 5 March
Ex-entitlement date for Open Offer	7:00 a.m. 8 March
Publication of Circular & Form of Proxy	8 March
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts of Qualifying CREST Shareholders in CREST	8:00 a.m. 9 March
Latest recommended time and date for requesting withdrawal of Open Offer entitlements from CREST	4:30 p.m. 17 March
Latest time and date for depositing Open Offer entitlements into CREST	3:00 p.m. 18 March
Latest time and date for splitting application forms (to satisfy bona fide market claims only)	3:00 p.m. 19 March
Latest time and date for receipt of Forms of Proxy and CREST voting instructions	10:00 a.m. 23 March
Latest time and date for receipt of Application Forms and payment in full under the Open Offer and settlement of relevant CREST instructions (as appropriate)	11:00 a.m. 23 March
Announcement of results of Open Offer	24 March
General Meeting	10:00 a.m. 25 March
Announcement of results of General Meeting	25 March
Admission of the New Ordinary Shares	08:00 a.m. 26 March
New Ordinary Shares credited to CREST Members' accounts in respect of the Placing Shares and Open Offer Shares	26 March
Dispatch of definitive share certificates in certified form	By 9 April

 

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	www.xerostech.com Tel: 0114 321 6328
Mark Nichols, CEO Paul Denney, CFO
finnCap	www.finncap.com  Tel: +44 (0) 20 7220 0500
Julian Blunt, Teddy Whiley (Corporate Finance) Andrew Burdis, Sunila de Silva (ECM)

Notes for editors:

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.