Corporate News

THIS ANNOUNCEMENT 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 AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA OR THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN POLAREAN IMAGING PLC OR ANY OTHER ENTITY IN ANY JURISDICTION.

22 July 2019

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014 ("MAR"). In addition, market soundings (as defined in MAR) were taken in respect of the Placing with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR.  This inside information is set out in this announcement.  Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

Polarean Imaging plc (AIM: POLX), the medical-imaging technology company, with a proprietary drug-device combination product for the magnetic resonance imaging (MRI) market, announces that it has raised a total of £2.1 million (US$2.625 million) (before expenses) by means of a Placing (the "Placing") via the issue of 11,666,667 ordinary shares of £0.00037 (the "Ordinary Shares") in the capital of the Company with  institutional investors (the "Placing Shares") at a price of 18 pence (the "Placing Price") per Placing Share.

The Placing was undertaken by the Company's broker SP Angel Corporate Finance Limited, details of which are set out below.

Highlights:

• Placing to raise a total of £2.1 million (US$2.625 million) with institutional investors at a price of 18 pence per Placing Share;
• Net proceeds will be used to provide additional support for the Company's ongoing Phase III Clinical Trials (the "Clinical Trials");
• Significant strengthening of the Company's balance sheet ahead of the completion of the Clinical Trials; and
• Funds will enable product launch planning and the further development of relationships with potential strategic partners for the Company.

Richard Hullihen, CEO of Polarean, commented: "We thank our shareholders for their support on this Placing which will enable the swift completion of enrolment for the Clinical Trials via the addition of a third trial site at the University of Cincinnati, allow us to focus our undivided attention on completion of the New Drug Application and submission following readout and provide valuable resource for post submission launch preparation and planning.

We are now entering a crucial period in Polarean's development and I look forward to providing our shareholders with further updates as appropriate."

Background to the Placing

The Group is undertaking the Placing at this time primarily in response to strong demand from institutional and EIS/VCT investors. Secondly, the Group has incurred additional costs as a result of adding a third trial site at the University of Cincinnati ("UC"), as such the net Placing proceeds will provide additional support for the Clinical Trials, ensuring the timely completion of patient enrolment, which is expected by the end of Q3 2019. Finally, the Placing will strengthen the Group's balance sheet ahead of a crucial period in Polarean's development, during which the Directors expect to announce the read-out of the Clinical Trials and, if the trials are successful, prepare and submit a New Drug Application to the US Food and Drug Administration.

Use of Proceeds

The net proceeds of the Placing will be used as follows:

• to provide additional support for the Clinical Trials, ensuring the timely completion of patient enrolment;
• to support the preparation and submission of the NDA following readout;
• to provide additional working capital to build new polarisers for future orders; and
• to further support the preparation for market launch following the submission of the NDA and the development of relationships with potential strategic partners for the Company.

Clinical Trials Update

The Clinical Trials continue to progress at Duke University and at the University of Virginia and aim to demonstrate non-inferiority of the Company's drug-device combination, which uses hyperpolarised 129-Xenon gas MRI, against an approved comparator for the evaluation of pulmonary ventilation.

Enrolment for the Clinical Trials has now passed 91.7% in the lung transplant pathway and 68.8% in the lung resection pathway.

The Company recently activated a third trial site at UC, which is already one of the Company's key clinical collaborators. No patients have been enrolled at UC to date but it is expected that patients will be enrolled at UC shortly to ensure the timely completion of the Clinical Trials.

Details of the Placing

The Company has conditionally raised £2.1 million (US$2.625 million), before expenses, by way of a Placing to institutional investors of 11,666,667 Placing Shares at the Placing Price.

The Placing Price represents a discount of 10 per cent. to the Company's closing price on 19 July 2019. Assuming the issue of all of the Placing Shares, the Placing Shares will represent approximately 11.5 per cent. of the existing Ordinary Shares and will, when issued, represent approximately 10.3 per cent. of the entire issued ordinary share capital of the Company immediately following Admission (the "Enlarged Share Capital").

The Placing Shares will, following Admission, rank in full for all dividends and distributions declared, made or paid in respect of the issued Ordinary Share capital of the Company and otherwise rank pari passu in all other respects with the Ordinary Shares.

Application will be made for the Placing Shares to be admitted to trading on AIM ("Admission") and admission is currently expected to occur at 8.00a.m. on or around 25 July 2019.

Director Participations in the Placing

Richard Hullihen, CEO of the Company, has subscribed for a total of 444,445 Placing Shares. Following Admission, his percentage holding in the total issued share capital of Polarean will increase as per the table below:

In addition, Amati Global Investors ("Amati") have subscribed for 3,888,889 Placing Shares. Following Admission, Amati will hold 12,460,318 Ordinary Shares in the share capital of the Company, representing 11.0 per cent. of the Company's Enlarged Share Capital.

Total Voting Rights

Following Admission, the Company will have a total of 113,102,600 Ordinary Shares in issue with each Ordinary Share carrying the right of one vote. The above figure may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

Enquiries:

About Polarean (www.polarean.com)

The Company and its wholly owned subsidiary, Polarean, Inc. (together the "Group") are revenue generating, medical drug-device combination companies operating in the high resolution functional magnetic resonance imaging market.

The Group develops equipment that enables existing MRI systems to achieve an improved level of pulmonary function imaging and specialises in the use of hyperpolarised Xenon gas (129Xe) as an imaging agent to visualise ventilation and gas exchange regionally in the smallest airways of the lungs, the tissue barrier between the lung and the bloodstream and in the pulmonary vasculature. Xenon gas exhibits solubility and signal properties that enable it to be imaged within other tissues and organs.

The Group operates in an area of significant unmet medical need and the Group's technology provides a novel diagnostic approach, offering a non-invasive and radiation-free functional imaging platform which is more accurate than current methods. The annual burden of pulmonary disease in the US is estimated to be over US$150 billion.