Creo Medical : Proposed Placing to raise a minimum of £30 million

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

• Conditional Placing to raise a minimum of £30 million at the Issue Price
• Open Offer to raise gross proceeds of up to an additional £5 million at the Issue price
• The Placing is to be conducted by way of an accelerated bookbuild process which will commence immediately following this Announcement and will be subject to the terms and conditions set out in Appendix I to and as otherwise provided in this Announcement.
• The Issue Price of 182.5 pence represents a discount of approximately 3.8 per cent. to the trailing 30 day volume weighted average price of 189.7p
• Minimum of 16,438,357 Placing Shares to be issued in connection with the Placing and up to 2,775,896 Open Offer Shares to be issued in connection with the Open Offer
• The net proceeds from the Fundraising are intended to be used by Creo and its Group to:
• • accelerate the commercial rollout of its products in the US, EMEA and APAC;
  • explore potential strategic acquisition opportunities;
  • develop its CROMA Kamaptive Energy platform technology to allow license potential to be exploited, specifically in relation to robotics potential;
  • continue to develop the Company's IP portfolio in areas such as electroporation, plasma sterilisation and other energy modalities within the CROMA platform;
  • undertake clinical trials for Chinese and Japanese markets;
  • continue R&D to develop new devices; and
  • mitigate funding risk for the foreseeable future.
• Completion of the Fundraising is conditional, inter alia, upon Shareholder approval at the General Meeting to be held on or around 6 September 2021.
• Cenkos reserves the right, by agreement with the Company, to increase the size of the Placing to accommodate additional demand.

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 [phone].

For further information, please visit www.creomedical.comor contact:

Creo Medical Group plc	www.creomedical.com
Richard Rees (CFO)	[phone]
Cenkos Securities plc	[phone]
Camilla Hume/Stephen Keys (NOMAD)
Michael Johnson / Russell Kerr (Sales)
Walbrook PR Ltd	Tel: [phone] or [e-mail]
Paul McManus / Sam Allen	Mob: [phone]

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

			2021
Announcement of the Fundraising		12 August
Record Date for entitlement under the Open Offer		12 August
Announcement of the results of the Placing		13 August
Publication of the Circular, Proxy Form and, to Qualifying Non-Crest		16 August
Shareholders, the Application Form
Ex-entitlement date of the Open Offer		16 August
Open Offer Entitlements and Excess Open Offer Entitlements credited to stock		17 August
accounts in CREST of Qualifying CREST Shareholders
Latest recommended time and date for requested withdrawal of Basic Open		4.30 p.m. on 27 August
Offer Entitlements from CREST
Latest time and date for depositing Open Offer Entitlements in CREST		3.00 p.m. on 31 August
Latest time and date for splitting of Application Forms under the Open Offer		3.00 p.m. on 1 September
Latest time and date for receipt of Forms of Proxy and CREST voting instructions		10.00 a.m. on 2 September
Latest time and date for receipt of Application Forms and payment in full under		11.00 a.m. on 3 September
the Open Offer and settlement of relevant CREST instructions (as appropriate)
General Meeting			10.00 a.m. on 6 September
Results of the General Meeting and the Open Offer announced		6 September
Admission of the New Ordinary Shares to trading on AIM and commencement		8.00 a.m. on 7 September
of dealings
Where applicable, expected date for CREST accounts to be credited in respect		7 September
of New Ordinary Shares in uncertificated form
Where applicable, expected date for despatch of definitive share certificates for		21 September
New Ordinary Shares in certificated form
Notes:
1	Each of the above times and/or dates is subject to change at the absolute discretion of the Company and
	Cenkos. If any of the above times and/or dates should change, the revised times and/or dates will be
	announced through a Regulatory Information Service.
2	All of the above times refer to London time unless otherwise stated.
3	All events listed in the above timetable following the General Meeting are conditional on the passing of
	the Resolutions at the General Meeting.

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 acquisitions of Albyn Medical and Boucart Medical, providing a direct sales presence in key European markets to facilitate the roll-out of the Group's CE marked advanced energy devices and immediate revenue derived from the sale of own, own label and third party GI and Urology products;
• The appointment of David Woods as Chief Commercial Officer, strengthening the Group's executive leadership and bringing a wealth of knowledge and experience to the business;
• The recruitment of a direct sales team in the US and APAC providing greater access to these important markets;
• A tenfold increase in the Group's commercial, marketing and distribution resource;
• An increase in the Group's headcount from 91 employees in 2019 to 217 at the end of 2020;
• The signing of commercialisation agreements with the UK Department of Health and Social Care providing preferential pricing to NHS hospitals for a limited period;
• The clearing of five additional advanced energy devices through the CE mark process and the gaining of US FDA 510(k) clearances for three devices; and
• The launch of the Kamaptive brand and resulting creation of multiple partnership opportunities with significant commercial and industrial partners to license and develop Creo technology under the "powered by Kamaptive" brand.

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:

• accelerate the commercial roll-out of its products in the US, EMEA and APAC;
• explore potential strategic acquisition opportunities;
• Continue to develop its pipeline of commercial licencing and partnering opportunities via its CROMA
  Advanced Energy platform under the "powered by Kamaptive" Brand to allow licence potential to be exploited, specifically in relation to robotics;
• continue to develop the Company's IP portfolio in areas such as electroporation, plasma sterilisation and other energy modalities within CROMA to fuel organic growth and expanding the Kamaptive program;
• undertake clinical trials for Chinese and Japanese markets; and
• mitigate funding risk for the foreseeable future.

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