This announcement is an advertisement for the purposes of the Prospectus Regulation Rules of the Financial Conduct Authority ("FCA") and not a prospectus and not an offer of securities for sale in any jurisdiction, including in or into the United States of America, Australia, Canada, Japan or the Republic of South Africa.

22 December 2021

Graft Polymer (UK) Plc

(the "Company" or "Graft Polymer", and together with its subsidiaries, the "Group")

Announcement of Intention to List on the London Stock Exchange's Main Market

Graft Polymer (UK) Plc, a business focused on the development of polymer modification and drug delivery systems, today announces its intention for its shares to be admitted to the standard segment of the Official List of the FCA (the "Official List") and to trading on the Main Market for listed securities of the London Stock Exchange plc ("Admission").

Key Highlights:

·    Graft Polymer has developed a proprietary set of polymer modification technologies, which can improve existing products and processing methodologies by enhancing performance, simplifying manufacturing and reducing material consumption, in turn reducing costs.

·    In 2020, the global impact modifier market was estimated to have a value of US$3.9 billion.

·    Graft Polymer develops new and innovative polymer technologies and has made several patent applications. The Company has a layered IP strategy and will continue to submit patents as new applications are developed.

·    The Group provides its customers with the following main types of modification technologies, as follows:

o  Grafting/Block copolymers: The Group has developed a range of grafting techniques, where different polymers, including those normally considered immiscible, can be grafted together to create composite polymers with various properties, leaving behind minimal or nil post-processing residues and without creating discolouration of the finished product. Finished products can be tougher and offer superior adhesion than unmodified blends.

o  Alloying: The Group has developed a range of polymer-polymer nano-alloys, which permit the creation of complex polymer alloys with nano-fillers, self-reinforcing and self-healing polymer alloys and compounds. For instance, the GRAFTALLOY and GRAFTAMID product series can act as stand-alone compounds as well as modifiers for other composite materials.

o  Cross-linking: The Group has developed three families of techniques: thermo-reversible cross-linking, novel irreversible cross-linking and interpenetrating polymer networks. Collectively, these enable the creation and tuning of multiple polymer properties, such as the welding of additional material onto a previously cross-linked substrate. For instance, product series of GRAFTAMER TRC and particularly GRAFTAMER VTR are amongst the most innovative trends in the polymer industry. In particular, GRAFTAMER VTR creates a cost-effective commercial method of manufacturing vitrimers, a novel class of polymers discovered in 2011, and is able to do so from a wide range of precursors including HDPE, polybutylene terephthalate, and polyester.

o  Synthesis: The Group has developed several proprietary synthetic techniques that produce co-agents for the modification process and enable the production of HFFR product families in both liquid and solid forms. HFFRs achieve fire protection by decomposing in the event of fire and creating a barrier layer between the underlying polymer or substrate and the fire. This barrier layer both slows the passage of oxygen and has low thermal conductivity, preventing further fire damage.

·    The Group's products address customer needs across a wide range of end use markets, from automotive through to medical and is not dependent on one market segment.

·    In late 2018, the Group began its first commercial sales to various polymer compounders in the automotive, packaging, construction, consumer products, clothing, aerospace, healthcare and medical markets.

·    The Group has licensed its Drug Delivery System ("DDS") platform IP to MGC Pharmaceuticals ("MGC Pharma") in relation to MGC Pharma's CimetrA™ product. The Group expects to receive royalty payments resulting from the sale of CimetrA™and CannEpil-IL™ products.

·    The Group has distribution relationships with multiple partners globally, including distributors/agents in Europe, India and Russia.

·    Graft Polymer is seeking Admission to accelerate its growth strategy and provide access to new sources of funds. The funds raised will be used as follows:

o  Additional production line and further expansion: the Group's research and production facility in Slovenia is to be expanded to meet customer demand, with an overall expansion in capacity of around 100% compared with current volume;

o  Investment in a HACCP and food grade 'GMP' certification: at the Group's facility in Slovenia, the Group will develop active pharmaceutical ingredients and DDS in its research and development laboratories;

o  Laboratory upgrades, research and development costs and future IP registration: the Group expects to upgrade a number of its production lines to meet specific customer production and research and development needs; and

o  Sales and marketing and general corporate purposes: the expected increase in the Group's sales over the course of the next two years is likely to lead to an increase in both inventory and marketing opportunities.

·    Admission is expected in early January 2022.

Victor Bolduev, Founder and CEO of Graft Polymer, said:

"We are delighted to be bringing Graft Polymer to the London Stock Exchange's Main Market, particularly at a time when demand for combining polymer modification and environmental protection is rising. Graft Polymer's IPO will provide the Company with further capital to accelerate our developing of intellectual property as well as new technologies to provide novel products and solutions for market challenges that arise.

"Led by a highly experienced management team, we believe the diversity of our products enable us to deliver to various industries, distinguishing Graft Polymer from other global polymer modification groups which offer significantly narrower products and solutions."

Appointment of Advisors

The Company has engaged Turner Pope Investments as its UK broker and RBG Legal Services Limited, trading as Memery Crystal, as its UK legal advisor. Graft Polymer has retained Tavistock Communications Ltd. to provide public relations services in the UK.

Enquiries

Company Overview

Graft Polymer is a UK incorporated holding company with an innovative research and manufacturing facility, based in Slovenia. The core business of the Group comprises polymer modification and drug delivery systems developments. Established in 2017, the Group has already introduced more than 50 products to the market.

The Group has developed a proprietary set of polymer modification technologies, which can improve existing products and processing methodologies by enhancing performance, simplifying manufacturing, reducing material consumption, widening the choice of feedstocks, and reducing costs.

In particular, the Group's techniques allow the combination of otherwise incompatible polymers, facilitating the creation of polymer composites engineered at a molecular level, that combine the attractive properties of different input materials. This enables customers to receive a synergism of properties in polymer composites.

The solutions and products offered by the Group are designed to improve performance, reduce raw materials consumption, and enhance the physical characteristic values of finished products or improve or modify their chemical interaction. In the past several years, there has been increased emphasis by the industry as a whole on applications of grafted polymers, which are produced by monomers being covalently bonded and polymerised as side chains onto the main polymer chain (the backbone).

In 2020, the Group launched a new division named GraftBio to develop IP for Bio/Pharma applications. This includes a drug delivery system to support and provide solutions to the market, which had been heavily impacted by the COVID-19 pandemic. The GraftBio division intends to obtain HACCP certification for its small-scale production facility. The Group has developed a set of drug delivery platforms that enable it to licence its DDS platform (IP) to MGC in relation to MGC's CimetrA™ and CannEpil-IL™ products. The Group expects to receive royalty payments resulting from the sale of CimetrA™ and CannEpil-IL™ products.

Strategy

The successful implementation of the Group's strategy and the business plan of the Group is based on certain key assumptions and subject to the sensitivities, as set out below:

·    Developing intellectual property and new technologies to provide novel products and new solutions for new market challenges and retain the Group's key intellectual property creators;

·    To grow the Group's share in its core polymer modifier market using key distributors around the world;

·    Collaborations with a few big players/refiners for mutual development and production of grafted products; and

·    To be intimately involved in product development with clients using the Group's base materials to secure long-term orders.

Board of Directors

Roby Zomer, Non-Executive Chairman

Roby is an entrepreneur with +10 years' experience in the biotech and renewable energy sectors.  Roby is Managing Director of MGC Pharmaceuticals, (LSE/ASX:MXC).

Victor Bolduev, Founder & CEO

Victor is the founder of the Group with over 20 years of international polymer industry experience, particularly in polymer modification. Victor is the author of 11 patents in the polymer modification and pharmaceutical sectors and has developed several products brands for various polymer projects.

Yifat Steuer, CFO

Yifat is a well-versed CFO with 20+ years' experience ranging from global blue-chip companies to hands-on implementation in SMEs/start-ups. Yifat is a qualified CPA, with a proven track record in pharmaceuticals, manufacturing, logistics, distribution, medical technology, and digital health SMEs.

Pavel Kobzev, CMO

Pavel has more than 10 years of experience in project management and markets analysis.  He served in the Israeli Defence Forces Elite Intelligence 8200 unit as Managing Operations Leader and has specific expertise in the security solutions and design industries.

Alex Brooks, Non-Executive Director

Alex is a financial analyst, currently with Canaccord Genuity Ltd (UK), who focusses on publicly traded industrial technology companies in a number of sectors, notably energy, healthcare and chemicals.

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Important Legal Information

This announcement is a financial promotion for the purposes of s 21 Financial Services and Markets Act 2000 ("FSMA"), issued by the Company, whose content has not been approved by a person authorised and regulated under FSMA. It is accordingly directed only at persons or entities who are entitled to receive non-approved financial promotions by virtue of being:

(1)  Investment professionals, for the purposes of art. 19 of the FSMA 2000 (Financial Promotion) Order 2005;

(2)  Corporate, unincorporated, partnership or trust entities meeting relevant minimum asset value criteria pursuant to art. 49 of that Order; or

(3)  Financial journalists for the purposes of art. 47 of that Order.  

Persons outside of the scope of these exemption provisions are not intended to receive this announcement and should place no reliance upon it for any purposes. This announcement is not an offer of any securities to any person for any purposes, nor a solicitation of any such, offer, and should not be construed as such.   No person should consider an investment in shares to be issued by the Company other than by reference to the Company's prospectus.

Turner Pope Investments (TPI) Limited, which is authorised and regulated by FCA, has been appointed to advise the Company, and treats the Company and only the Company as its client for FCA regulatory purposes, and accordingly owes no regulatory duties to any other persons which may be considered to arise from this announcement.