THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, NEW ZEALAND OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.  PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT WAS DEEMED BY THE COMPANY TO CONTAIN INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 AS THEY FORM PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. WITH THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

12 August 2021

Creo Medical Group plc

("Creo" or the "Company")

Proposed Placing to raise a minimum of £30 million

Launch of Accelerated Book Build

Proposed Open Offer to raise up to approximately £5 million

Creo Medical Group plc (AIM: CREO), a medical device company focused on the emerging field of surgical endoscopy is pleased to announce a proposed Placing by way of an accelerated bookbuild to raise a minimum of £30 million (before expenses) via a conditional placing of new Ordinary Shares at the issue price of 182.5p per share to new and existing institutional investors, to support further growth of the Group and development of its business. The accelerated book build process is expected to close on 13 August 2021, following which the final quantum of the Placing proceeds will be announced.

Furthermore, the Company is proposing to raise up to approximately £5 million by way of an Open Offer which will be available to all Qualifying Shareholders on the Record Date.

Transaction Highlights

A circular, containing further details of the Fundraising and notice of the General Meeting to be held at 10.00 a.m. on 6 September 2021 to, inter alia, approve the Resolutions required to implement the Fundraising, is expected to be published and despatched to Shareholders on 16 August 2021 (the "Circular").  Following its publication, the Circular will be available on the Company's website at https://www.creomedical.com/investors. Defined terms used in this announcement are set out at the end of the announcement.

Craig Gulliford, Chief Executive Officer of Creo, said: "These additional funds will be used to accelerate the commercial roll-out of our suite of patented electrosurgical devices powered by our CROMA Kamaptive Energy Platform technology, but also provide us with the means to develop this portfolio to allow full integration with some of the leading robotic surgery technologies. This also means that we are well funded to continue to explore further strategic acquisition opportunities, continue our research & development progress for new devices and allow us to the undertake the clinical trials necessary to target markets in China and Japan."

If you would like to participate in the accelerated bookbuild, please contact your usual contact on the Growth Companies Sales Team or call the Cenkos dealing desk on +44 (0)20 7397 1946.

For further information, please visit www.creomedical.com or contact:

Details of the Fundraising

Cenkos Securities plc ("Cenkos") is acting as sole broker, bookrunner and nominated adviser to the Company in connection with the Fundraising and Admission. The Placing is subject to the terms and conditions set out in the Appendix to this Announcement or as otherwise agreed with Placees.

Cenkos will today commence the Bookbuilding Process in respect of the Placing. The final number of Placing Shares to be placed at the Issue Price will be determined at the close of the Bookbuilding Process.

The book will open with immediate effect following this Announcement. The timing of the closing of the Bookbuilding Process and allocations thereunder are at the absolute discretion of Cenkos, having consulted with the Company. Details of the number of Placing Shares will be announced as soon as practicable after the close of the Bookbuilding Process. The Placing is not being underwritten.

In addition, in order to provide Shareholders who do not take part in the Placing with an opportunity to participate in the proposed issue of new Ordinary Shares, the Company is providing all Qualifying Shareholders with the opportunity to subscribe for Open Offer Shares at the Issue Price. Qualifying Shareholders subscribing for their full entitlement under the Open Offer may also request additional Open Offer Shares through the Excess Application Facility. The Open Offer is not being underwritten. 

The Circular, containing further details of the Fundraising and convening the General Meeting in order to pass the Resolutions, is expected to be despatched to Shareholders on or around 16 August 2021 and the Circular, once published, will be available on the Company's website at www.creomedical.com/investors.

The Fundraising and the issue of the New Ordinary Shares are conditional upon, among other things, the Resolutions being duly passed by Shareholders at the General Meeting. The Directors recognise the vast improvement to the UK's COVID-19 situation, however in light of the Company's ongoing desire to protect the health and safety of our shareholders and employees, the Directors recommend shareholders to not attend the General Meeting in person but vote via proxy.

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 after the date of issue.

Admission, Settlement and CREST

Application will be made for the New Ordinary Shares to be admitted to trading on AIM and a further announcement will be made in due course.

Subject to the passing of the Resolutions, settlement for the New Ordinary Shares and Admission are expected to take place at 8.00 a.m. on or around 7 September 2021 (or such later time and/or date as Cenkos may agree with the Company not being later than 8.00 a.m. on 16 September 2021). In addition to the passing of the Resolutions, the Fundraising is conditional upon, among other things, Admission becoming effective and the Placing Agreement not being terminated in accordance with its terms.

The Appendix sets out further information relating to the Bookbuilding Process and the terms and conditions of the Placing. Persons who have chosen to participate in the Placing, by making an oral, electronic or written offer to acquire Placing Shares, will be deemed to have read and understood this Announcement in its entirety (including the Appendix) and to be making such offer on the terms and subject to the conditions herein, and to be providing the representations, warranties, agreements, acknowledgements and undertakings contained in the Appendix.

This Announcement should be read in its entirety.

Expected Timetable for the Fundraising

Notes:

Each of the times and dates above refer to London time and are subject to change. Any such change will be notified to Shareholders by an announcement through a Regulatory Information Service. All events listed in the above timetable following the General Meeting are conditional on the passing of the Resolutions at the General Meeting.

FURTHER INFORMATION

BACKGROUND TO AND REASONS FOR THE FUNDRAISING

The Directors believe that, despite the impact from the COVID-19 pandemic, 2020 was a transformational year for the Group, the highlights of which were:

The Company is pursuing the Fundraising to continue building on the success of 2020 and the milestones that it has achieved since IPO and to move into the next stage of its development. The Directors believe that, with the technology it has developed along with its pipeline medical devices and the commercial infrastructure that is now in place, the Company continues to be well placed to capitalise on the rise of endoscopic surgery, enabling the performance of clinical procedures to be carried out via an endoscopic procedure minimally and non-invasively and which, many expect, will replace more traditional open and laparoscopic surgical procedures.

The Company has developed a suite of patented electrosurgical devices, each of which is powered by CROMA Advanced Energy platform, powered by Kamaptive, which enables bipolar radiofrequency energy and high frequency focused microwave energy to be delivered to its devices via a single accessory port. The Company intends to use the net proceeds of the Fundraising to:

Summary of Creo Medical

The Group is a medical device company focused on the development and commercialisation of minimally invasive electrosurgical devices, bringing advanced energy to endoscopy.

The Company's vision is to improve patient outcomes through the development and commercialisation of a suite of electrosurgical devices that are enabled by CROMA, powered by Kamaptive. The Group has developed the CROMA powered by Kamaptive full-spectrum adaptive technology to optimise surgical capability and patient outcomes. Kamaptive is a seamless, intuitive integration of multi-modal energy sources, optimised to dynamically adapt to patient tissue during procedures such as resection, dissection, coagulation and ablation of tissue. Kamaptive technology provides clinicians with increased flexibility, precision and controlled surgical solutions.  CROMA currently delivers bipolar RF energy for precise localised cutting and focused high frequency MW energy for controlled coagulation and ablation via a single accessory port. This technology, combined with the Group's range of patented electrosurgical devices, is designed to provide clinicians with flexible, accurate and controlled clinical solutions. The Group's three initial areas of focus are (1) in the GI, (2) soft tissue ablation (including but not limited to, the liver, pancreas, kidney) and (3) lung interventions for the resection and/or ablation of pre-cancerous and cancerous lesions. The Directors believe the Company's technology can impact the landscape of surgery and endoscopy by providing a safer, less-invasive and more cost-efficient option for procedures.  To date the Company's devices have been used in over 750 procedures.

The Group has four technology families - Speedboat, MicroBlate, SlypSeal and SpydrBlade.

Core Products Utilising CROMA

CROMA delivers bipolar RF and focused high frequency MW advanced energy through a single accessory port to enable a suite of multi and single modality, matched single devices which are optimised around the core tissue effects of dissection, resection, haemostasis and ablation. These core tissue effects, are optimised around a wide range of evolving device families:

Speedboat device technology - is, the Directors believe, a unique device technology with the only known bipolar surgical dissection blade in any form of surgery. Additionally, Speedboat integrates MW technology allowing for precise control of bleeding during surgery. These features can also be uniquely integrated with irrigation and injection capability. As with all the CREO device families, the Speedboat device technology has applications in many different areas of clinical therapy and surgery.

Speedboat Inject (targeting Gastrointestinal lesions (including Bowel and Upper GI cancer) & Swallowing Disorders)

The first device launched by the Group along with CROMA with EU and US clearance, has been used in numerous clinical cases worldwide, is supported by excellent clinical publications, and with strong health economic data already established.  Speedboat Inject is a flexible device aimed at the endoscopist enabling them to lift tissue with viscous fluid injection via a retractable needle, cut tissue precisely using bipolar RF energy delivered along the edge of the instrument for localised energy transfer, reducing the risks associated with monopolar tissue resection, and deliver high frequency controlled and focused coagulation, all within a single instrument. Data from the UK's leading clinical user of Speedboat demonstrates that its use can save NHS hospitals nearly £10,400 per procedure versus a traditional surgical outcome for patients. The Speedboat Inject device was CE marked for lower GI tract use and gained FDA clearance for upper and lower GI tract use in 2017 and was commercially launched in October 2019.  The Board is targeting National Institute for Health & Care Excellence accreditation submission for the Speedboat Inject in 2021.

Speedboat Slim (targeting Gastrointestinal lesions (including Bowel and Upper GI cancer) & Swallowing Disorders)

The second device in the Speedboat family of devices, with a "slim" profile, is Speedboat Slim which enables endoscopists to access more indications in patients where narrower and more flexible devices are required over Speedboat Inject.  The Speedboat Slim device was CE marked in June 2020.

MicroBlate device technology - brings very high frequency 5.8GHz microwave energy into clinical practice for the first time. Operating at such a high frequency offers unrivalled levels of control and feedback via CROMA allowing physicians to precisely ablate diseased tissue in multiple tissue types and many different clinical access methods.

MicroBlate Fine (targeting Lung, Pancreas, Kidney, Liver & GI lesions)

Brings fine needle microwave ablation into clinical practice for the first time and is believed to be the smallest diameter MW ablation needle antenna in the world. With a diameter of less than 1mm, the MicroBlate Fine device can be used in a variety of ablation procedures such as open, laparoscopic and flexible endoscopic procedures. Designed to be the same form and dimensions as a standard biopsy needle, MicroBlate Fine is designed for the ablation of a wide range of tissue types (such as pancreas, liver, kidney, lung and muscle). Due to the small diameter of the device, it can be used to ablate tumours in highly perfused organs without the risk of bleeding prior to energy delivery due to the sub-mm insertion tract. The MicroBlate Fine device received 510(k) clearance from the US Food & Drug Administration in November 2020 and was CE (for use in the UK and EU) marked in June 2020.

MicroBlate Flex (targeting lung lesions)

A new soft tissue ablation device, designed with the aim of being able to ablate nodules and tumours in several tissue types including lung (in particular in the airways), using the highest frequency MW energy used for tumour ablation. This device also has potential to be used to treat a number of other conditions, where a small diameter flexible device enables access into otherwise inaccessible regions of the body. The device could be particularly useful to treat a range of ENT indications, including nasopharyngeal cancer and nasal polyps. Due to its small size and flexibility, MicroBlate Flex has the potential to reach deep into the lung where, once in position, the device can be inserted through a catheter and into the tumour. The MicroBlate Flex device received 510(k) clearance from the US Food & Drug Administration in January 2021 and was CE marked in June 2020.

SpydrBlade device technology optimises the power of CROMA, where advanced bipolar RF energy is used to cut tissue and precisely controlled MW energy is used for the coagulation and sealing of tissue during surgery. The SpydrBlade jaw structure utilises the unique blade technology of the Group's Speedboat technology which allows the surgeon to cut tissue as the jaws close, with the jaws of the device open as well as while the jaws are closed as a blade. No other laparoscopic surgical device is known to have these fundamental resection features. The Directors believe that the patented combination with microwave energy for the sealing and coagulation of tissue adds up to a game-changing device technology platform.

SpydrBlade Flex (targeting Gastrointestinal lesions (including Bowel and Upper GI cancer) & Swallowing Disorders)  

This is the first SpydrBlade device in the family and is described as "the holy grail of interventional endoscopy" by Rob Hawes MD, a world-renowned pioneer in the field of therapeutic endoscopy at the Florida Hospital in Orlando. Designed to operate in flexible endoscopes commonly used around the world, SpydrBlade Flex puts advanced laparoscopic capability into the hands of the endoscopist for the first time. Building on the Speedboat blade technology, SpydrBlade Flex enables the clinician to grasp, cut and coagulate highly perfused tissue (such as in the colon, stomach, liver or spleen). The ability to alternate between cutting and coagulating using RF and MW energy across the 'jaws' of SpydrBlade Flex gives the clinician significantly more control providing a gliding cut using a fixed bipolar RF field as well as a conventional bipolar RF cutting between two jaws at opposite polarities. It offers great utility to bloodlessly resect/dissect and coagulate in a wide range of organs within the human body by sequentially applying the microwave field followed by the RF field to coagulate and then cut. The SpydrBlade Flex device was CE marked in June 2020.

SlypSeal device technology is believed to be the only "non-stick" electrosurgical haemostasis device technology in the market. This key feature overcomes the perennial challenge in surgery and transforms the surgeons' ability to precisely manage bleeding with the unique ability to reapply with the "non-stick" feature addressing the risk of "re-bleeds". This combined with the precision and control of MW coagulation, opens up many different device structures in the future.

SlypSeal Flex (targeting Gastrointestinal Bleeding)

The first device in this family of devices targeting GI bleeds which is one of the most common clinical indications in the GI tract. SlypSeal Flex will target the treatment of upper and lower GI bleeds, such as stomach ulcers or bleeding polyps.  SlypSeal™ Flex received FDA clearance in March 2020 and was CE marked in June 2020.

The Group 's products are distributed via direct and indirect sales channels.  The Group has a direct presence in 8 countries across Europe, the US and Hong Kong and access to a further 19 countries through 11 signed distribution agreements and 8 more agreements which are currently under negotiation and predominantly in the EMEA and APAC regions.

As of 31 May 2021, the Group has 112 patent families, which currently comprise in total 296 granted patents and 815 pending applications. The Group's patent estate is growing at a steady rate covering existing products, future enhancements to CROMA and future product ideas.

Strategy

The Directors believe that they have the opportunity to develop the business in multiple ways through a three-tiered build, buy and partner strategy.

Build

The "Build" aspect first tier of the Company's strategy is to organically build the team across global markets to commercialise and develop its existing and continually developing technology.  This strategy includes bringing CROMA to market through the suite of electrosurgical devices, described above. Unlike traditional open surgery and more advanced keyhole/laparoscopic surgeries that require incisions to be made in the patient to gain access to diseased tissue, endoscopic devices gain access via natural orifices.  As no incisions are made through the skin, the risks associated with infection are significantly reduced, as are the procedure and recovery times. Furthermore, patients can undergo certain procedures without general anaesthetic and under mild or no sedation and can, therefore, usually be treated as day patients in endoscopy suites or outpatient clinics. In turn, this reduces the length of stay in hospital, the risk of infection, and the cost of procedure by transferring therapy from the operating theatre to the endoscopy suite.

Market overview, activities and opportunity

Speedboat and Speedboat submucosal dissection procedure.  There are c.28 million colonoscopy procedures performed annually in the US and Europe which result in c.5.5 million procedures to remove lesions. Up to 15 per cent. (approximately 800,000) of these procedures are complex lesions which would, the Directors believe, benefit from the use of the Company's Speedboat device and a Speedboat submucosal dissection procedure.  Furthermore, the Directors believe that the numbers of addressable procedures will increase as the screening age of patients is lowered as well as a follow on from physicians utilising the devices discovering additional procedures that can leverage the benefits of the devices.

As announced in May 2021, the Group's Speedboat submucosal dissection procedure is estimated to lead to cost savings in NHS Hospitals of over £10,000 per procedure versus a traditional surgical outcome for patients and represents an approximate saving of 50 per cent. compared to a surgical intervention.  As a result, the Board expects cumulative NHS savings achieved from the Speedboat devices to be in excess of £2.5 million by the end of 2021.  Based on "The 2020 National Bowel Cancer Audit", the Board also believes that potential NHS savings could amount to c. £180 million per annum.

To date the Company has held 35 training programmes, 19 of which were conducted during the global pandemic with 93 clinicians and has trained over 150 clinicians today. The Company has a further 16 courses scheduled during 2021 to train additional clinicians. 

MicroBlate Fine. Pancreatic and liver cancers account for over 1.4 million cancers globally per annum.  These types of cancers have a high mortality rate (liver at 80 per cent. and pancreas at 90 per cent. at five years) and most are inoperable due to the late diagnosis (less than 20 per cent. of pancreatic cancers are operable).  The Group's MicroBlate Fine device, with endoscopic ultrasound, enables a less invasive, endoscopic alternative to treat hepatobiliary tumours and to treat patients where surgery is not an option and has an estimated cost per procedure of c.£3,000 to £4,000.

The Group has established a key opinion leader user community in the US, EMEA and APAC. The first in-man clinical use of the MicroBlate Fine device to successfully ablate pancreatic tumour tissue under endoscopic ultrasound guidance was completed in December 2020 with further cases expected to follow during Q3 and Q4 2021 in EMEA, Asia and the US.  Other activities ongoing are an international, multi-centre trial introducing the first minimally invasive treatment option for liver cancer, a single site study on the use of MicroBlate Fine to treat gastric varices and a single site study for nerve ablation for pain management.

The Board is targeting over 500,000 potential procedures where the MicroBlate Fine device could be used to target inoperable cancers and small tumours. Subject to further studies the Board also believes that as physicians utilise the MicroBlate Fine they will suggest additional procedures that could potentially leverage the benefits of the device.

MicroBlate Flex.  Lung cancer is the leading cause of cancer deaths globally with over 2.2 million new cases each year.  Only 34 per cent. of lung cancers are diagnosed at early stages due to poor screening techniques resulting in high mortality.  Surgery or percutaneous approaches have been the primary therapeutic treatments for early-stage cancer although these are invasive with a high risk of complications.  Whilst significant investments have been made recently in diagnostic imaging/pathology for lung cancer, chronic obstructive pulmonary disease, emphysema and others, there is no flexible endoscopic therapy currently available.  MicroBlate Flex enables a less invasive, endoscopic alternative to treat pre-cancerous nodules as a first-line option, as well as treatment of patients not eligible for surgery.

The efficacy of the MicroBlate Flex has been validated for all areas of the lung in a cadaver lab.  The first in man procedure utilising the device is schedule to be performed by Dr NG Sze Hang Calvin, a professor in thoracic surgery at the Prince of Wales Hospital, The Chinese University of Hong Kong in Q3 2021 with further cases in UK, EMEA and US planned for later in the year. Furthermore, a global multi-centre study is planned to demonstrate efficacy for ablation of liver tumours and pulmonary nodules that are not suitable for surgery, and the Group is investigating compatibility testing with a potential robotics partner.

The Board estimates that each year there are over 754,000 cases that would have the potential for non-surgical treatment of early stage (1 or 2) disease with earlier screening increasing detection rates and thereby increasing the number of potential procedures and that via the MicroBlate Flex device it may be possible to manage advanced disease by addressing recurring or localised small lesions. 

The Board believes that there is a significant and growing market opportunity for the Group's suite of products.  To date the Group has trained 150 clinicians with more than 30 hospitals evaluating purchasing the product post training. There are more than 50 CROMA boxes currently in situ and the Board is targeting having over 2000 customers with 500 Power Users (a user who performs at least two procedures per week) within 3-5 years with the potential to create a £40-50 million business. 

The Board also believes that there is the scope to create future instruments for use with CROMA which can be evolved to deliver existing and new energy frequencies and modalities including electroporation, for a range of laparoscopic, robotic, surgery and other open-source devices.

Buy

The "Buy" aspect to the Company's strategy is to acquire target companies with existing and mature sales, distribution and/or manufacturing operations to complement and add infrastructure and capability in our direct sales markets. The Directors believe that an opportunity available to the Group is the ability to enhance the Group's existing technology, accelerate its route to market and/or expand the Company's geographic reach, empower new surgical disciplines (e.g. urology or gynaecology) or access method (e.g. laparoscopy and robotic surgery) when it is commercially more efficient do to so.

The Group made two acquisitions in 2020; Albyn Medical and Boucart Medical.  The Board believes that these acquisitions were transformational for the Group providing the Group with direct access to key European markets as well as bringing a wide range of complementary GI products and to broaden the Company's portfolio into urology. The sales teams at both companies have integrated well and the businesses are performing above management's original expectations. The Board is looking to replicate the success of these two acquisitions and, accordingly, continues to identify, and has been presented with, a number of potential acquisition opportunities which, the Board believes, could give the Company the opportunity to further utilise the potential in CROMA and accelerate its ability to place products in the market. When assessing opportunities, the Board aims to accelerate access to market either with adjacent technologies or infrastructure whilst seeking synergistic benefits to the Group as a whole. 

Partner

The third aspect of the Company's strategy is to partner. Partnering may include the license of the Group's advanced energy technology, Kamaptive, to third parties to embed in their own solutions, and apply to new markets.

The Directors believe that there is significant potential to work closely with third parties where certain mutual benefits can be identified.  The Company has developed relationships with a number of significant industrial and commercial partners to commercialise the Group's technology.

The Board sees a sizeable opportunity for the Group in licensing its advanced energy, Kamaptive, to third parties for use in:

·      Laparoscopic and endoscopic Robotic applications - platform for delivery of advanced energy and device technology into a number of surgical applications

·      Handheld laparoscopic applications - a capsule advanced energy platform for delivery of advanced energy and device technology to support a number of surgical applications

·      Non-thermal plasma - platform for wound care and scope decontamination

·      Electroporation - platform for non-thermal tissue effects including irreversible tissue "ablation" and cellular level sensitisation.

In addition to the Kamaptive licensing partners mentioned above, discussions with potential industrial partners have recently developed with specific discussion relating to a potential commercial partnership agreement alongside a potential equity investment in Creo.

Concluding any and all such agreements with potential partners is a key focus for management.  Whilst the timing of any due diligence processes required to establish such relationships is outside the Company's control, the Board remains confident that pursuing such relationships not only creates long term shareholder value but also aligns with the Company's objectives to improve lives.

CURRENT TRADING AND PROSPECTS

The Company gave a trading update on 19 May 2021 (RNS No: 0640Z) and subsequently announced its annual results for the 12 months ended 31 December 2020 on 4 June 2021 (RNS No: 8011A).  Since 19 May 2021, the Company has performed above management's expectations and has generated revenue in excess of £12 million in the 6 months to 30 June 2021 with the Company's cash balance as at 30 June 2021 being in excess of £30 million. The Executive team continues to execute against the Company's original plan at IPO and deliver against the operational milestones set out at the time and, accordingly, the Board looks to the Company's future with increasing confidence.

THE PLACING AGREEMENT

Pursuant to the terms of the Placing Agreement, the Broker, as agent for the Company, has conditionally agreed to use its reasonable endeavours to procure subscribers for the Placing Shares. The Broker has conditionally placed the Placing Shares with certain institutional and other investors at the Issue Price. Neither the Placing nor the Open Offer has been underwritten by the Broker. The Placing Agreement is conditional upon, inter alia, the Resolutions being duly passed at the General Meeting and Admission becoming effective on or before 8.00 a.m. on 7 September 2021 (or such later time and/or date as Cenkos may agree, but in any event by no later than 8.00 a.m. on 21 September 2021).

The Placing Agreement contains customary warranties from the Company in favour of the Broker in relation to, inter alia, the accuracy of the information in the Circular and other matters relating to the Group and its business. In addition, the Company has agreed to indemnify the Broker in relation to certain defined liabilities that it may incur in respect of the Fundraising.

The Broker has the right to terminate the Placing Agreement in certain circumstances prior to the Admission, in particular, in the event that any of the warranties in the Placing Agreement  were untrue or inaccurate, or were misleading when given or in the event of a material adverse change affecting the business, financial trading position or prospects of the Company or the Group as a whole, whether or not arising in the ordinary course of business and whether or not foreseeable at the date of the Placing Agreement.

The Placing Agreement also provides for the Company to pay all costs, charges and expenses of, or incidental to, the Fundraising and the Admission including all legal and other professional fees and expenses.

The Placing Shares have not been made available to the public and have not been offered or sold in any jurisdiction where it would be unlawful to do so.

The Open Offer

The Company considers it important that Shareholders have an opportunity (where it is practicable for them to do so) to participate in the Fundraising and accordingly the Company is making the Open Offer to Qualifying Shareholders. The Company is proposing to raise up to approximately £5.07 million (before fees and expenses) through the issue of up to 1,642,877 Open Offer Shares at the Issue Price. Any Open Offer Shares not subscribed for by Qualifying Shareholders will be available to Qualifying Shareholders under the Excess Application Facility. The Open Offer is not being underwritten.

Qualifying Shareholders may apply for Open Offer Shares under the Open Offer at the Issue Price on the following basis:

1 Open Offer Share for every 58 Existing Ordinary Shares held by
the Shareholder on the Record Date

Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Open Offer Shares. Fractional entitlements which would otherwise arise will not be issued to Qualifying Shareholders but will be aggregated and made available under the Excess Application Facility. The Excess Application Facility enables Qualifying Shareholders to apply for Excess Shares in excess of their Open Offer Entitlement.

Further details of the Open Offer and the application process relating to the Open Offer will be set out in the Circular.

Recommendation

The Directors consider the Fundraising to be in the best interests of the Company and its Shareholders as a whole and accordingly recommend unanimously Shareholders to vote in favour of the Resolutions to be proposed at the General Meeting and the Directors confirm that they intend to vote in favour of the Resolutions in respect of their beneficial holdings amounting, in aggregate, to 5,156,303 Existing Ordinary Shares, representing approximately 3.2 per cent. of the existing issued Ordinary Share capital of the Company.

This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the Appendix below.

The Appendix to this Announcement (which forms part of this Announcement) sets out the terms and conditions of the Placing. Persons who have chosen to participate in the Placing, by making an oral or written offer to acquire Placing Shares, will be deemed to have read and understood this Announcement in its entirety (including the Appendix) and to be making such offer on the terms and subject to the conditions herein, and to be providing the representations, warranties, agreements, acknowledgements and undertakings contained in the Appendix.

APPENDIX I - TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING.

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX AND THE INFORMATION CONTAINED HEREIN (TOGETHER THE "ANNOUNCEMENT") IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY THE LONDON STOCK EXCHANGE, NOR IS IT INTENDED THAT IT WILL BE SO APPROVED.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA") WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(e) OF REGULATION (EU) 2017/1129, AS AMENDED FROM TIME TO TIME (THE "PROSPECTUS REGULATION") ("QUALIFIED INVESTORS"); AND (B) IN THE UNITED KINGDOM, PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF REGULATION 2017/1129/EU AS IT FORMS PART OF DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 AND WHO ALSO: (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) (INVESTMENT PROFESSIONALS) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN CREO MEDICAL GROUP PLC.

THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES. THE PLACING SHARES (AS DEFINED BELOW) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. SUBJECT TO CERTAIN EXCEPTIONS AND AT THE SOLE DISCRETION OF THE COMPANY, THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES, THE UNITED KINGDOM OR ELSEWHERE. NO MONEY, SECURITIES OR OTHER CONSIDERATION FROM ANY PERSON INSIDE THE UNITED STATES IS BEING SOLICITED AND, IF SENT IN RESPONSE TO THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT, WILL NOT BE ACCEPTED.

EACH PLACEE SHOULD CONSULT WITH ITS ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES. THE DISTRIBUTION OF THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS, AND ANY PERSON INTO WHOSE POSSESSION THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, SUCH RESTRICTIONS.

The distribution of this Announcement and/or the Placing and/or issue of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, Cenkos Securities plc ("Cenkos") or any of their respective affiliates, agents, directors, officers or employees that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Cenkos to inform themselves about and to observe any such restrictions.

This Announcement or any part of it is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, Japan, New Zealand, the Republic of South Africa or any other jurisdiction in which the same would be unlawful. No public offering of the Placing Shares is being made in any such jurisdiction.

All offers of the Placing Shares will be made pursuant to an exemption under the UK Prospectus Regulation from the requirement to produce a prospectus. In the United Kingdom, this Announcement is being directed solely at persons in circumstances in which section 21(1) of FSMA does not apply.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Fundraising or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States. The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission, the Financial Markets Authority of New Zealand or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained for the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Placing Shares and the Placing Shares have not been, nor will they be, registered under or offering in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan, New Zealand or the Republic of South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan, New Zealand or the Republic of South Africa or any other jurisdiction outside the United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any action.

This Announcement should be read in its entirety. In particular, you should read and understand the information provided in this "Important Information" section of this Announcement.

The Company proposes to raise capital by way of the Placing and Open Offer.

By participating in the Placing, each Placee will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring the Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix.

In particular, each such Placee represents, warrants, undertakes, agrees and acknowledges (amongst other things) that:

No prospectus

No prospectus or other offering document has been or will be submitted to be approved by the FCA in relation to the Fundraising or the Placing Shares and Placees' commitments will be made solely on the basis of the information contained in this Announcement and any Publicly Available Information and subject to any further terms set forth in the form of confirmation to be sent to individual Placees.

Each Placee, by participating in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any information (other than the Publicly Available Information), representation, warranty or statement made by or on behalf of the Company, Cenkos or any other person and none of the Company, Cenkos or any other person acting on such person's behalf nor any of their respective affiliates has or shall have any liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. No Placees should consider any information in this Announcement to be legal, tax or business advice, Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Details of the Placing Agreement and the Placing Shares

Cenkos has today entered into the Placing Agreement with the Company under which, on the terms and subject to the conditions set out in the Placing Agreement, Cenkos, as agent for and on behalf of the Company, has agreed to use its reasonable endeavours to procure placees for the Placing Shares at the Issue Price of 182.5 pence per Placing Share.

The Placing Shares will, when issued, be subject to the Articles and credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid in respect of such ordinary shares after the date of issue of the Placing Shares.

Application for admission to trading

Application will be made to the London Stock Exchange for Admission of the Placing Shares to trading on AIM.

It is expected that Admission will take place no later than 8.00 a.m. on 7 September 2021 and that dealings in the Placing Shares on AIM will commence at the same time.

Principal terms of the Placing

Registration and Settlement

If Placees are allocated any Placing Shares in the Placing they will be sent a form of confirmation or electronic confirmation by Cenkos (or either one of them), as soon as it is able which will confirm the number of Placing Shares allocated to them, the Issue Price and the aggregate amount owed by them to Cenkos.

Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed as directed by Cenkos in accordance with either the standing CREST or certificated settlement instructions which they have in place with Cenkos.

Settlement of transactions in the Placing Shares (ISIN: GB00BZ1BLL44) following Admission will take place within the CREST system, subject to certain exceptions. Settlement through CREST is expected to take place on 7 September 2021 unless otherwise notified by the Cenkos and Admission is expected to occur no later than 8.00 a.m. on 7 September 2021 unless otherwise notified by Cenkos. Admission and settlement may occur at an earlier date, which if achievable, will be set out in the Circular. Settlement will be on a delivery versus payment basis. However, in the event of any difficulties or delays in the admission of the Placing Shares to CREST or the use of CREST in relation to the Placing, the Company, Cenkos may agree that the Placing Shares should be issued in certificated form. Cenkos reserves the right to require settlement of the Placing Shares, and to deliver the Placing Shares to Placees, by such other means as they deem necessary if delivery or settlement to Placees is not practicable within the CREST system or would not be consistent with regulatory requirements in a Placee's jurisdiction.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above, in respect of either CREST or certificated deliveries, at the rate of 2 percentage points above prevailing LIBOR as determined by Cenkos.

Each Placee agrees that if it does not comply with these obligations, Cenkos may sell, charge by way of security (to any funder of Cenkos) or otherwise deal with any or all of their Placing Shares on their behalf and retain from the proceeds, for either the Broker's own accounts and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due and any costs and expenses properly incurred by Cenkos as a result of the Placee's failure to comply with its obligations. The relevant Placee will, however, remain liable for any shortfall below the amount owed by it and for any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of their Placing Shares on their behalf. Legal and/or beneficial title in and to any Placing Shares shall not pass to the relevant Placee until such time as it has fully complied with its obligations hereunder.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees must ensure that, upon receipt, the conditional form of confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to United Kingdom stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.

The obligations of Cenkos under the Placing Agreement are, and the Placing is, conditional upon, inter alia:

If any of the conditions set out in the Placing Agreement are not fulfilled or, where permitted, waived in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as the Company and the Cenkos may agree), or the Placing Agreement is terminated in accordance with its terms, the Fundraising will lapse and the Placee's rights and obligations shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.

By participating in the Placing, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Termination of the Fundraising" below and will not be capable of rescission or termination by it.

Certain conditions may be waived in whole or in part by Cenkos, in their absolute discretion, by notice in writing to the Company and Cenkos may also agree in writing with the Company to extend the time for satisfaction of any condition. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

Cenkos may terminate the Placing Agreement in certain circumstances, details of which are set out below.

Neither Cenkos, the Company nor any of their respective affiliates, agents, directors, officers or employees shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision any of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Cenkos.

Termination of the Fundraising

Cenkos may terminate the Placing Agreement, in accordance with its terms, at any time prior to Admission if, inter alia:

If the Placing Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in this Announcement shall cease and terminate at such time and no claim can be made by any Placee in respect thereof.

By participating in the Placing, each Placee agrees with the Company and Cenkos that the exercise by the Company or the Cenkos of any right of termination or any other right or other discretion under the Placing Agreement shall be within the absolute discretion of the Company or Cenkos and that none of the Company nor Cenkos need make any reference to such Placee and that none of the Company, Cenkos nor any of their respective affiliates, agents, directors, officers or employees shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.

By participating in the Placing, each Placee agrees that its rights and obligations terminate only in the circumstances described above and under the "Conditions of the Fundraising" section above and will not be capable of rescission or termination by it after the issue by the Cenkos of a form of confirmation confirming each Placee's allocation and commitment in the Placing.

Representations, warranties and further terms

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) irrevocably represents, warrants, acknowledges, undertakes and agrees (for itself and for any such prospective Placee) that in each case as a fundamental term of such Placee's application for Placing Shares (save where Cenkos expressly agree in writing to the contrary):

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify and hold the Company, Cenkos and each of their respective affiliates, agents, directors, officers and employees harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings given by the Placee (and any person acting on such Placee's behalf) in this Appendix or incurred by the Company, Cenkos or each of their respective affiliates, agents, directors, officers or employees arising from the performance of the Placee's obligations as set out in this Announcement, and further agrees that the provisions of this Appendix shall survive after the completion of the Placing.

The agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the United Kingdom relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct by the Company. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement related to any other dealings in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event, the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax and none of the Company or Cenkos shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and they should notify Cenkos accordingly. In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares and each Placee, or the Placee's nominee, in respect of whom (or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such non-United Kingdom stamp, registration, documentary, transfer or similar taxes or duties undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company and Cenkos in the event that any of the Company and/or Cenkos has incurred any such liability to such taxes or duties.

The representations, warranties, acknowledgements and undertakings contained in this Appendix are given to Cenkos for themselves and on behalf of the Company and are irrevocable.

Each Placee and any person acting on behalf of the Placee acknowledges that Cenkos do not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings, acknowledgements, agreements or indemnities in the Placing Agreement.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that Cenkos may (at their absolute discretion) satisfy their obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any connected or associated person to do so.

When a Placee or any person acting on behalf of the Placee is dealing with Cenkos, any money held in an account with Cenkos on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the relevant rules and regulations of the FCA made under FSMA. Each Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence this money will not be segregated from Cenkos' money (as applicable) in accordance with the client money rules and will be held by it under a banking relationship and not as trustee.

References to time in this Announcement are to London time, unless otherwise stated.

All times and dates in this Announcement may be subject to amendment.

No statement in this Announcement is intended to be a profit forecast, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

The Placing Shares to be issued or sold pursuant to the Placing will not be admitted to trading on any stock exchange other than AIM.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

DEFINITIONS

The following definitions apply throughout this Announcement unless the context otherwise requires: