Proposed Disposal

Verditek plc has agreed outline terms to sell its solar business (the "Disposal") to a new company ("Newco") to be established by the holders of the Company's secured convertible loan notes ("Notes") ("Bondholders") for: (i) £528,340 (to be satisfied by the surrender of the Notes); and (ii) £50k payable in cash on completion.

The Company will transfer its shareholder loan to Newco on completion for nominal consideration as part of the proposed transaction.

The Bondholders have also agreed to provide a loan facility of up to €100k to fund the operating expenses of the solar business with effect from 6 February 2024. This finance will be provided for specific items for the operation of the Solar Business with the prior written agreement of the bond-holders.

The Company has granted the Bondholders exclusive negotiating rights up until 29 February 2024.

The proposed transaction is conditional on further due diligence, agreeing definitive sale and purchase documentation, and Shareholder consent pursuant to AIM Rule 15. Accordingly, there can be no assurance at this stage that the proposed transaction will complete.

Upon completion of the Disposal, the Company will be regarded as an AIM Rule 15 cash shell, having ceased to own, control or conduct all or substantially all, of its existing trading business, activities or assets. The Company will therefore need to, within six months, make an acquisition or acquisitions which constitute a reverse takeover under AIM Rule 14, failing which trading of the Company's shares on AIM will be cancelled.

The Company is currently in discussions with a group of individuals who it is proposed would come in as a new management team with a view to completing a fundraise of approximately £300k. The aim would be to conduct a reverse takeover within 6 months of completion of the Disposal. There is no guarantee that this proposal will proceed as it still at an exploratory stage and the Company will update the market with more information as soon as it is available.

The parties have agreed a target date for completion of 29 February 2024. If the proposed transaction were not to complete then there is a possibility that the Company would not be funded to meet its liabilities and may have run out of cash resources by 29 February 2024. At this point the Directors would have to consider alternative ways forward.

The Solar Business being sold, pursuant to the Disposal comprises:

• the whole of the issued share capital of Verditek Solar Italy srl ("VSI"),
• all intellectual property rights relating to the Solar Business;
• Verditek's interests in the Net Zero Valley Term Sheet and related MoU with SerendipEquity MANCO LLC, subject to counterparty consent;
• Verditek's interest in the joint development project with Paragraf, subject to the consent of Paragraf; and
• the ICSI receivable, subject to counterparty consent

The company's assets set out in the interim accounts for H1 2023 were

£114,400 plant and machinery

£696,452 stock/inventory

These assets belong to VSI. In addition PLC had as an asset £556,783 the ICSI bond at historic book value which is not considered to be the current market value.

2022 Full year accounts show

£195,470 plant and machinery

£534,959 inventory

ICSI bond value £556,783

2022 full year losses attributable to those assets were £1,872,711

Related Party Transaction

Gavin Mayhew, who was until 2 January 2024 a non-executive Director of the Company, is a Bondholder, holding £165,000 of the Notes and will have a holding in Newco and thus the Disposal and the loan agreement constitute related party transactions for the purposes of Rule 13 of the AIM Rules.

The current directors of Verditek consider, having consulted with the Company's nominated adviser WH Ireland, that the terms of the Disposal and of the loan being agreement are fair and reasonable insofar as the Company's shareholders are concerned.

Verditek will be issuing a circular to Shareholders shortly setting out further information on the proposed transaction, and seeking Shareholder consent at a General Meeting of the Company for the Disposal and to grant authority for the Directors to issue further shares.

About Verditek plc