FOR IMMEDIATE RELEASE                                                                                                                    3 February 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (596/2014/EU) AS THE SAME HAS BEEN RETAINED IN UK LAW AS AMENDED BY THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR").

Nanoco Group PLC

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

Definitive Agreements Signed with Samsung for $150m Litigation Settlement

A transformative outcome for Nanoco

Nanoco Group plc (LSE: NANO), a world leader in the development and manufacture of cadmium-free quantum dots and other specific nanomaterials emanating from its technology platform, announces the final agreements (collectively, the "Settlement") have been signed to settle the litigation with Samsung on a no fault basis for the alleged infringement of the Group's IP.

The Group has separately published a trading update this morning for its half year ended 31 January 2023.

Litigation settlement overview

·    Litigation concluded with $150m cash settlement to be paid in two equal tranches (by 5 March 2023 and by 3 February 2024)

·    Nanoco retain over $90m net proceeds after litigation costs

·    Settlement structured as a sale of non-core patents and a global, perpetual, fully paid up licence agreement

·    Settlement ends all global litigation with Samsung; Nanoco's IP fully validated by the legal process

·    Nanoco retains full freedom to operate in all markets, territories, products and material types

Chris Richards, Chairman of Nanoco Group plc, said:

"This has been a long and hard battle for Nanoco. The outcome is remarkable, given the relative scale of Nanoco and Samsung. The settlement value is almost three times our own low case damages model; settling now avoids the risks associated with further litigation and the adverse impact from the time value of money in an appeals process that would have extended for years. Even more importantly, it validates Nanoco's core IP, which we will continue to defend vigorously.

"In deciding the allocation of the net proceeds, the Board will balance any investment needs of Nanoco's growing organic business with a firm intention to deliver a material return of capital to shareholders."

Brian Tenner, Chief Executive Officer of Nanoco Group plc, said:

"Today marks the start of a new chapter for Nanoco. We have successfully validated our core IP against one of the world's biggest electronics companies, who were advised by one of the most expensive law firms in the world. Others operating in our space should take note.

"We therefore remain vigilant to other potential infringement activity, as well as opportunities to pro-actively deliver new licence agreements. The confirmation of the validity of our IP is already encouraging more commercial interest in Nanoco as a supplier of leading edge nano-materials.

"We have also generated a transformational amount of value for our stakeholders, whilst providing the funding for investment in the business. We have done this while transforming Nanoco and positioning ourselves for significant organic growth in the near term. Most importantly, we have a foundation on which to focus on the organic business as we continue to build on the significant positive momentum achieved in the last few years."

Settlement agreements

The Settlement is structured as two agreements:

·    IP Licence agreement: This global, perpetual, fully paid up licence agreement encapsulates any past or future royalties that would have been paid / come due to be paid.

·    IP Sale agreement: This encapsulates the divestment of a number of non-core patents from Nanoco to Samsung, with Nanoco receiving a fully paid up, perpetual and global licence on the divested patents. Neither of the two patents due to be presented at trial were included in the sale.

For clarity, Nanoco retains complete freedom to operate in all of its markets, territories, products and material types.

Nanoco will receive gross proceeds of $150 million (£125 million[1]), $65m for the IP Licence agreement and $85m for the IP Sale agreement, payable in two equal tranches by 5 March 2023 and by 3 February 2024. Nanoco expect to retain over 60% (over $90m) of this sum, after deducting legal and litigation funding costs. Legal and litigation funding costs have first claim on the proceeds. There will be a tax liability but this is anticipated to be modest.

The Settlement ends all global litigation between the Parties (including Germany and China), and Samsung will receive a fully paid up, perpetual, global licence that runs until the expiration of Nanoco's current individual patents.

Expected accounting impact of the settlement

The notes below set out a summary of the expected accounting treatment of the two agreements in the Group's Financial Statements, subject to confirmation during the statutory audit of the Group's FY23 Annual Report and Accounts.

The sale of IP will be accounted for as a profit on disposal of intangible assets in accordance with the requirements of IAS 38 Intangible Assets. This is expected to generate a net profit on disposal of approximately £70.0m based on the proceeds noted above less the current net book value of the patents at the point of sale. This profit on disposal will be recognised in the FY23 Financial Statements.

The income from the IP Licence agreement will be accounted for in accordance with the requirements of IFRS15 Revenue from Contracts with Customers. It is expected that the revenue from the IP contract will be recognised over the average estimated remaining life of the existing entire IP portfolio after the sale of IP noted above, even though the cash will be received in the two tranches noted earlier (a revenue recognition period of approximately nine years). The patents that would have been presented if the trial had gone ahead had remaining lives of two and a half years and five years respectively.

The cash and receivable due for the IP licence will give rise to a significant deferred income balance of approximately £54.0m in the Group's Financial Statements that will be recognised as revenue in line with the nine year period noted above. Revenue from the IP licence in H2 of FY23 is expected to be approximately £3.0m and then £6.0m each year thereafter until the deferred income has been recognised in full.

The costs of the litigation (approximately £47.0m) will be expensed in full in FY23 as a standalone cost reflecting the fact that the litigation itself has now ceased. There will also be a one off interest charge of approximately £4.7m linked to the Group's loan notes that were executed in July 2021, based on a successful conclusion to the Samsung litigation.

The Group's accumulated tax losses will be available to offset any tax impacts from the above subject to final tax computations, normal UK rules restricting the utilisation of losses in any one year, and any overseas withholding tax. Depending on forecasts of the possible utilisation of tax losses in future financial years, a deferred tax asset may be recognised in the Group's Financial Statements. It is expected that net cash tax payable in respect of FY23 will be modest. The final tax position will also depend on any losses in the organic business in the year (excluding the Samsung agreements) as well as any beneficial impact of both the UK's R&D tax credit and Patent Box regimes.

The Group expects to have net negative distributable reserves in a number of subsidiary companies and in the parent company itself after the impact of the transactions noted above. The Group will therefore review options for its future capital structure prior to the receipt of the second tranche of proceeds around February 2024 in order to facilitate a possible return of funds to shareholders.

For further information, please contact:

Nanoco Group PLC:

Brian Tenner, CEO                                                                                                                                               +44 (0)1928 761 404

Liam Gray, CFO & Company Secretary

Peel Hunt (Joint Corporate Broker):

Paul Gillam                                                                                                                                            +44 (0) 20 7418 8900

James Smith

Turner Pope Investments (Joint Corporate Broker):

Andrew Thacker                                                                                                                                  +44 (0) 20 3657 0050

James Pope

MHP:                                                                                                                                                      +44 (0) 203 128 8570

Reg Hoare

Pete Lambie

[email protected]

- Ends -

The person responsible for arranging for the release of this announcement on behalf of Nanoco is Liam Gray, Chief Financial Officer.

MAR

The information contained within this announcement is considered by the Company to contain inside information for the purposes of UK MAR. Upon the publication of this announcement via a Regulatory Information Service, this inside information will be considered to be in the public domain.

FORWARD LOOKING STATEMENTS

This announcement (including information incorporated by reference in this announcement) and other information published by Nanoco may contain statements about Nanoco that are or may be deemed to be forward looking statements.  Such statements are prospective in nature.  All statements other than historical statements of facts may be forward looking statements.  Without limitation, statements containing the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or "considers" or other similar words may be forward looking statements.

Forward looking statements inherently contain risks and uncertainties as they relate to events or circumstances in the future.  Important factors such as business or economic cycles, the terms and conditions of Nanoco's financing arrangements, tax rates, or increased competition may cause Nanoco's actual financial results, performance or achievements to differ materially from any forward looking statements.  Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof.  Nanoco disclaims any obligation to update any forward looking or other statements contained herein, except as required by applicable law.

Notes for editors:

About Nanoco Group plc

Nanoco (LSE: NANO) harnesses the power of nano-materials. Nano-materials are materials with dimensions typically in the range 1 - 100 nm. Nano-materials have a range of useful properties, including optical and electronic. Quantum dots are a subclass of nano-material that have size-dependent optical and electronic properties. The Group produces quantum dots and other nano-materials. Within the sphere of quantum dots, the Group exploits different characteristics of the quantum dots to target different performance criteria that are attractive to specific markets or end-user applications such as the Display, Sensor and Electronics markets. An interesting property of quantum dots is their absorption spectrum. Nanoco's HEATWAVE™ quantum dots can be tuned to absorb light at different wavelengths across the near-infrared spectrum, rendering them useful for applications including image sensors. Another interesting property of quantum dots is photoluminescence: the emission of longer wavelength light upon excitation by light of a shorter wavelength. The colour of light emitted depends on the particle size. Nanoco's CFQD® quantum dots are free of cadmium and other toxic heavy metals, and can be tuned to emit light at different wavelengths across the visible and infrared spectrum, rendering them useful for a wide range of applications including displays, lighting and biological imaging.

Nanoco was founded in 2001 and is headquartered in Runcorn, UK, with a US subsidiary, Nanoco Inc., in Concord, MA. Nanoco continues to build out a world-class, patent-protected IP portfolio generated both by its own innovation engine, as well as through acquisition.

Nanoco is listed on the Main Market of the London Stock Exchange and trades under the ticker symbol NANO. For further information please visit: www.nanocotechnologies.com.

visit: www.nanocotechnologies.com.

Litigation Funder - GLS Capital LLC

The litigation against Samsung was funded by GLS Capital LLC of Chicago and the GLS team was led Adam Gill.

GLS Capital is a commercial litigation finance firm with more than $500 million under management. Founded by litigation finance industry veterans, GLS focuses on investments in complex commercial litigation and arbitration, patent infringement litigation, and life sciences litigation. GLS prides itself on decision-making speed and the pace of its investment process. Armed with a broad investment mandate and fully discretionary capital, all investment decisions are made internally by the GLS investment committee, which provides certainty and transparency for counterparties throughout the investment lifecycle. More information about GLS Capital can be found at www.glscap.com.

Strategic Adviser

Epicentre Law, PC

Ron Epstein has been an adviser to Nanoco on strategic IP issues for a number of years. He supported Nanoco throughout the litigation against Samsung as the Strategic Adviser to the Board and as a member of the Litigation Sub-Committee.

With more than 30 years of experience in developing, optimizing, and transacting Intellectual Property (IP) asset portfolios, Ron is recognized as a global leader in helping patent owners maximize the value of their IP. As a market-maker, Ron has been instrumental in defining the category of patent brokers in the emerging patent marketplace, delivering over $1 billion of value from the sale or licensing of patents in over 150 transactions. As a thought leader, Ron has contributed to the public discourse, consulted with companies and law firms on complex IP transactions, and has helped to develop many who are now leaders in their own right in the IP monetization industry. More information about Epicentre Law can be found at http://www.epicenterip.com/.

Litigation Advisers

Caldwell Cassady Curry - Trial Counsel ('CCC')

The trial team at CCC was led by Bradley Caldwell, a trial lawyer who focuses on patent infringement and complex commercial litigation.

Caldwell Cassady & Curry is a U.S.-based law firm specializing in high-stakes patent infringement lawsuits and complex business disputes. Caldwell Cassady & Curry's track record includes cases involving a diverse array of leading technologies. The firm has won billions of dollars in verdicts and settlements against some of the largest companies in the world. More information about CCC can be found at https://caldwellcc.com/.

Mintz, Levin, Cohn, Ferris, Glovsky, and Popeo ("Mintz") - Lead Legal Advisers

Michael Newman at Mintz led the litigation team in prosecuting the US suit as well as co-ordinating actions in overseas jurisdictions. Mr Newman was also personally instrumental in all five of Nanoco's patents and all 47 claims being validated by the Patent Trial and Appeal Board.

Mintz Levin has a proven track-record of successfully representing patent owners of all sizes and across all industries in disputes before the Patent Trial and Appeal Board, the International Trade Commission, and the federal district courts. Mintz also advises clients on a wide range of other strategic patent matters, including licensing, portfolio management and valuation, and patent prosecution. More information about Mintz can be found at https://www.mintz.com/.

Ward, Smith & Hill PLLC - Local Counsel

Our local counsel team in Texas was led by Johnny Ward.

Ward, Smith & Hill is a trial law firm with a long history of representing clients throughout the Lone Star State. Our office in Longview supports the firm's emphasis on cases tried in every division of the U.S. District Court for the Eastern District of Texas and in state courts throughout the East Texas region. Ward, Smith & Hill is well-known among law firms throughout the U.S. based on our work together in high-stakes trials involving intellectual property claims, oil and gas disputes, business litigation matters, breach of contract, and serious personal injuries. Our attorneys have tried more than 350 cases with impressive results. Our team is made up of seasoned, ethical attorneys who provide clients with proven courtroom track records, including AV-rated lawyers, two former federal judges, and two attorneys Certified by the Texas Board of Legal Specialization. More information about Ward, Smith & Hill can be found at https://wsfirm.com/.

MHP - Litigation and Financial PR advisers

Reg Hoare

Pete Lambie

Christian Harte