NetScientific plc

("NetScientific" or the "Company")

Plastic recycling technology company DeepTech Recycling secures £1 million investment

NetScientific Plc (AIM: NSCI), the deep tech and life sciences VC investment group, announces that its portfolio company DeepTech Recycling Limited ("Deeptech Recycling") has successfully closed a £1 million fundraising ("Fundraising").

DeepTech Recycling is a UK deep tech company born out of a global environmental crisis caused by insufficient and unsustainable management of plastic waste. Its mission is to make plastic sustainable and support the critical global drive towards a circular economy for plastics through chemical recycling of plastic waste. DeepTech Recycling has a unique, patented and proven technology platform, which was developed over more than 10 years of structured and accelerated development and commercialisation, and offers unique and innovative solutions to the environmental challenges of plastic pollution.

The Fundraising, carried out via an advance subscription agreement, constitutes the first closing of a target investment programme of c.£3 million, with further investment anticipated within the next six months. The Fundraising was led and syndicated by EMV Capital, the Company's wholly owned venture capital and corporate finance firm.

In December 2022, DeepTech Recycling, in which the NetScientific group holds a 30 per cent. stake, acquired the majority of assets of Recycling Technologies Limited out of administration. Since the acquisition, the value creation team of EMV Capital has worked closely with DeepTech Recycling to consolidate assets and IP, embark on further research and development programmes, and start on the commercial roadmap of the business.

The proceeds of the Fundraising will, inter alia, support DeepTech Recycling in the completion of a development phase for its pilot plant, development and adaption of its targeted technology and licensing strategy, as well as the set-up of its operating base and development of its core team.

The advance subscription funds will only be applied for shares in the capital of Deeptech Recycling upon, inter alia, Deeptech Recycling raising at least £1.5 million (or such lower amount as may be agreed between the parties) within six months of the first closing of the Fundraising. Such subscription shares are anticipated to be priced at a 20 per cent. discount to the issue price of such £1.5 million fundraising, with an agreed valuation cap of £6 million. Given the subscription price is not yet known, and no new shares in DeepTech Recycling have yet been issued, following completion of the first closing of the Fundraising, the total equity holding of NetScientific in DeepTech Recycling remains at 30 per cent. The capital under advisory of EMV Capital in respect of investors introduced by it to DeepTech Recycling has increased by £1 million.

Related Party Transaction

EMV Capital has agreed with DeepTech Recycling terms of engagement for advising on the Fundraising and the continued investment programme, including the provision of value creation services over up to a three year term ("Engagement Terms"). Pursuant to the Engagement Terms, EMV Capital will charge customary fees to DeepTech Recycling, including a commission of 6 per cent. of investment monies introduced by EMV Capital to DeepTech Recycling, and annual fees for value creation and management support services anticipated to be c.£100,000 for an initial 12 month period. Such fees may, at the election of EMV Capital, be converted into shares in the capital of DeepTech Recycling at a 25 per cent. discount to the prevailing issue price of such shares.

DeepTech Recycling is currently owned as to 70 per cent. of its shares by AB Group Limited, a company owned by Melvin Lawson who is a substantial shareholder of NetScientific. As such the Engagement Terms constitute a related party transaction under Rule 13 of the AIM Rules for Companies. The Directors, excluding Dr Ilian Iliev by reason of his concert party relationship with Melvin Lawson, consider, having consulted with the Company's nominated adviser, Panmure Gordon (UK) Limited, that the Engagement Terms are fair and reasonable in so far as shareholders of NetScientific are concerned.

Marvine Besong, Managing Director and CTO of DeepTech Recycling, said:

"This investment represents a significant vote of confidence in our mission to transform non-recyclable plastic waste into high value oil products, a process that is a key lever in achieving substantial reductions in plastic waste disposal and greenhouse gas emissions. The oil products generated can be used by the petrochemical industry as the feedstock for producing virgin-quality plastics, further re-enforcing our passionate support for the drive towards a circular economy.

"As the business continues to make strong progress, we will leverage this new capital injection to scale up our operations and accelerate the realisation of our robust pipeline of opportunities. EMV Capital has played a key role in facilitating our fundraising initiatives, as well as the relaunch of the business. We are grateful for the insightful contributions of their value creation team."

Dr Ilian Iliev, CEO of NetScientific, and Chair and Investment Director of DeepTech Recycling added:

"We are pleased with the outcome of this pivotal fundraising for DeepTech Recycling. The company's innovative chemical recycling platform can be integrated and scaled into the existing waste management value chain internationally. It is a balanced approach, addressing the global plastic waste crisis, while recognising the importance of plastic in the modern economy. We look forward to continuing to work with DeepTech Recycling as it actively contributes to a cleaner, more sustainable future.

"This transaction is a further example of our capital efficient investment model, where the NetScientific group was able to secure a 30 per cent. stake for nominal value. In turn our subsidiary EMV Capital was able to secure investor support for the company's growth strategy. We look forward to reporting on the company's fundraising programme, and the impact on the net asset value and fair value of our shareholding, upon the company issuing new shares in due course."

The person responsible for arranging the release of this announcement on behalf of the Company is Edward Hooper, General Counsel and Executive Director of the Company.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH IS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

-Ends-

NetScientific

About NetScientific

NetScientific plc (AIM: NSCI) is a deep tech and life sciences VC investment group with an international portfolio of innovative companies.

NetScientific identifies, invests in, and builds high growth companies in the UK and internationally. The company adds value through the proactive management of its portfolio, progressing to key value inflection points, and delivering investment returns through partial or full liquidity events.

NetScientific differentiates itself by employing a capital-efficient investment approach, making judicial use of its balance sheet and syndicating investments through its wholly owned VC subsidiary, EMV Capital. The group secures a mixture of direct equity stakes and carried interest stakes in its portfolio of companies, creating a lean structure that can support a large portfolio.

NetScientific is headquartered in London, United Kingdom, and is admitted to trading on AIM, a market operated by the London Stock Exchange.

www.netscientific.net

About DeepTech Recycling Limited

DeepTech Recycling is a UK-based technology company born out of a global environmental crisis caused by insufficient and unsustainable management of plastic waste. The company's mission is to make plastic sustainable and support the critical global drive towards a circular economy for plastics.

DeepTech Recycling has a unique, patented and demonstrated technology platform, which was developed over more than 10 years of structured and accelerated development and commercialisation, and offers a unique innovative solution to the environmental challenges of plastic pollution.

The technology converts currently unrecyclable plastic waste, that would normally be landfilled or incinerated, into oil that can be used by the petrochemical industry as the feedstock for producing virgin quality plastic.

https://www.deeptech-recycling.co.uk/