Filtration Licence Agreement with Donlim Group

Xeros Technology Group plc (AIM: XSG), the creator of technologies that reduce the impact of clothing on the planet, today announces the signing of a contract with Donlim Group ("Donlim") to manufacture its XF3 External Filter under licence. It has also entered a strategic partnership agreement with Donlim, combining the expertise of each party to maximise marketing and distribution and, in addition, to work together on further product development.

Donlim will also receive a licence to manufacture and distribute the XF1, which is the internal filter for domestic washing machines. This will take the total number of licensees for XF1 to four. The XF1 currently has three licences with European manufacturers.

Donlim, the owner of the Morphy Richards brand, is a world-leading manufacturer of electrical appliances, employing over 26,000 people and generating revenues in excess of US$2bn from three manufacturing sites across China and Indonesia.

Under the strategic partnership agreement, marketing of the XF3 will be done jointly bringing together the expertise and industry contacts of the two businesses. Xeros will support Donlim to generate sales leads to maximise interest in the products, with mass production targeted for Q2 FY25. Donlim will pay Xeros a licence fee for every unit sold.

The strategic partnership further enables Donlim and Xeros to collaborate on the future development of innovative filtration & water saving products.

Donlim has world leading expertise in manufacturing small domestic appliances and R&D, working with many leading global brands. Xeros has unique and substantive expertise in microplastic filtration, IP and prototyping, as well as connections to the Major Domestic Appliance market. Together, Donlim and Xeros have relationships with most of the leading global electrical product brands.

Neil Austin, CEO of Xeros, said:

"We are delighted to announce this strategic partnership and contract with Donlim. It forms a key part of our commercialisation plan and, whilst we are hugely excited by the wider possibilities for our collaboration, in the short-term we will focus solely on helping Donlim bring XF3 to market successfully.

"Accessory sales of external microfibre-capture devices for domestic washing machines are forecast to be significant in Europe in the next few years, and XF3 is the perfect plug and play solution to meet this demand. Working with Donlim not only enables scaled production but allows us to work together to promote wider industry take up."

Lydia Zhu, Donlim Sales Vice President, added:

"We are excited to be working with Xeros to manufacture and market the XF3, which we see as an entry point into further innovative, green technologies. Our agreement brings together the expertise of two leading businesses. Xeros' unique and substantive expertise in microplastic filtration IP, prototyping, and scientific capability in developing innovative, green technology, fits perfectly with Donlim's ambition to bring new energy and water efficient products to market."

Further background

Consumer awareness of the impact of microplastics in the sea is becoming increasingly widespread and a survey, undertaken by Xeros, demonstrates that there is latent demand for a filtration solution. 79% of those surveyed were concerned or very concerned by the impact of microplastics with 69% stating that they would consider purchasing if a product was available. Industry interest is also growing, alongside governmental focus on regulating around microplastics from domestic and commercial laundry.

XF3 is a retro-fitted, 'outside-of-machine' microplastic, filtration device with full flexibility of placement for domestic washing machines. The product was the subject of overwhelming interest at its launch at IFA Berlin, Europe's largest consumer electronics show, in September last year. The XF3 has all the features of Xeros' integrated washing machine filter, the XF1, with a market-leading microfibre capture rate of 99%, one of the lowest emptying frequencies of all available filters, and no requirement for replacement cartridges.