Mercia Asset Regulatory News (MERC)

Mercia Technologies PLC

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

Mercia completes £1.5million follow on investment into Impression Technologies Ltd

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Electronics, Materials & Manufacturing/Engineering sector update

Mercia Technologies PLC (AIM: MERC), the national investment group focused on the creation, funding and scaling of innovative technology businesses with high growth potential from the UK regions, is pleased to announce that it has completed a £1.5million follow on investment into Impression Technologies Ltd ("ITL"). This investment is part of a £3.0million funding round with co-investor Touchstone Innovations plc and as a result, Mercia's interest in the share capital of ITL increases from 18.2% to 26.4%.

Based in Coventry commercialising a novel forming process initially researched at the University of Birmingham and subsequently developed and spun out of Imperial College, ITL has a patented technology called Hot Form Quench ("HFQ®") for pressing strong, lightweight aluminium components for the automotive sector. Following the opening of the world's first HFQ® production facility in October 2016, the company is already supplying components to manufacturers including Aston Martin and Lotus Cars. ITL is also in discussions with a number of other global automotive brands. This investment will enable the company to scale up its commercial operations and progress its promising international customer pipeline.

Mercia nurtures companies within its managed funds before selectively investing directly from its own balance sheet into what it terms 'Emerging Stars'. The following paragraphs provide updates on the commercial progress of other companies in Mercia's Electronics, Materials & Manufacturing/Engineering investment sector, which in total represents approximately 20% of the Group's direct investment portfolio by value:

sureCore, a provider of memory technology solutions for semiconductor applications and based in Sheffield, has recently launched a range of industry leading embedded low-power memory solutions for application in the rapidly growing wearable and Internet of Things markets. sureCore has developed a low voltage/low power memory ecosystem specifically focused on power efficiency. By integrating sureCore's award winning and patented technology into everyday consumer handheld devices, substantially improved power saving performance and battery life extension has been achieved. sureCore became one of Mercia's Emerging Stars in June 2016.

Faradion, based in Sheffield and also a new Emerging Star since January 2017, is a leading developer of low-cost sodium-ion battery technology working with cell manufacturers to commercialise its technology. The company is currently engaging with potential customers and partners in Europe and China to demonstrate the scalability of its technology, gain commercial traction and validate its supply chain.

Warwick Audio Technologies, a University of Warwick spinout, specialises in the development of a new generation of planar loud speaker, the High Precision Electrostatic Laminate ("HPEL") transducer. The company has recently started production of the Sonoma M1 Headphone System (https://www.sonomaacoustics.com/product/sonoma-one-headphone-system/), a patented premium electrostatic wired headphone system, and has started shipping product. In addition to a wide variety of potential applications under consideration, the company is also developing first in class wireless, portable, low-cost, over-ear electrostatic headphones which it demonstrated at the Consumer Electronics Show in Las Vegas in January 2017. This follows the recent appointment of Gary Waters, former Vice President and General Manager of BOSE Corporation, as a non-executive director to help support the commercialisation of the HPEL.

Smart Antenna Technologies, a spinout from the University of Birmingham, is the creator of the world's most compact multi-antenna system for a range of hardware devices to include laptops and smartphones. The company has recently extended its international reach by opening an office in Taiwan and is currently engaged in evaluations and discussions with several major laptop manufacturers in the region.

LM Technologies, a Bluetooth and Wi-Fi module and adapter manufacturer that originated from Birmingham, has released a new range of Bluetooth 4.x products and has secured a manufacturing agreement with Qualcomm to ensure access to the latest technology. The company has recently launched the world's first dual mode Bluetooth 4.1 Serial Adapter and currently is the only Qualcomm partner to release a module using the CSRb534x Chipset, which will expand the opportunities available to its customers.

Dr Mark Payton, Chief Executive Officer of Mercia Technologies PLC said:

"This short overview provides an insight into a selection of our portfolio of Emerging Stars unearthed from the Midlands and the North of England. As a material shareholder in each company, we are delighted to continue to provide active support and, as highlighted with today's Impression Technologies announcement, additional capital to further their commercial development. These six companies summarised above represent direct investments from just one of our four exciting technology sectors. Other companies across our direct investment portfolio are also making excellent commercial progress and I look forward to providing further information on our growing portfolio, and Mercia's progress in general, when we announce our full year results on 3 July 2017."

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About Mercia Technologies PLC

Mercia is a national investment group focused on the creation, funding and scaling of innovative businesses with high growth potential from the UK regions. Mercia benefits from 18 university partnerships and offices across the Midlands, the North of England and Scotland providing it with access to high quality, regional deal flow. Mercia Technologies PLC is quoted on AIM with the epic "MERC".

Mercia's 'Complete Capital Solution' initially nurtures businesses via its third party funds (now with more than £336.5million under management following the latest mandate wins) and then over time Mercia can provide further funding to its 'Emerging Stars' by deploying direct investment follow-on capital from its own balance sheet.

Since its IPO in December 2014, the Company has invested over £30.0million directly across its portfolio of 'Emerging Stars'.