Blur : Proposed Placing 7 July 2017

blur Group Plc

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

Proposed Placing to raise a minimum of £1.5 million

blur Group plc (AIM: BLUR) announces that it intends to raise a minimum of £1.5 million (before expenses) by way of a conditional placing of Ordinary Shares at a price of 1.75 pence per Ordinary Share.

Highlights

• Placing to raise gross proceeds of at least £1.5m at 1.75 pence per Ordinary Share

• Issue of warrants to subscribe for 25,000,000 new Ordinary Shares at an exercise price of 3.5 pence per warrant (a 100 per cent. premium to the Placing Price) on the basis of 1 warrant per 3.43 Ordinary Shares approximately, based on a Placing size of £1.5m, subscribed for in the Placing, with an exercise period of 12 months commencing on the anniversary of Admission (the "Warrants")

• The net proceeds of the Placing are intended to provide blur with sufficient working capital to effect the restructured board's base plan for the business focused on generating new Enterprise customers from the current pipeline during the next 12 months or so

• The Placing Shares are being offered by way of an accelerated bookbuild, which will be launched immediately following this announcement. N+1 Singer will be acting as sole bookrunner in connection with the Bookbuilding Process

• Following completion of the Bookbuilding Process and routine director due diligence, David Sherriff (Chairman), Roger de Peyrecave (non-executive director), Rob Wirszycz (non- executive director) and Kara Cardinale (Chief Delivery Officer) will step down from the board and simultaneously David Rowe will be appointed as Chairman with Preeti Mardia, Richard Rae and Richard Croft being appointed to the board as non-executive directors. Tim Allen, finance director, will also step down from the board shortly after the General Meeting and James Porter, blur's existing financial controller, will serve as interim finance lead whilst a review is performed of a suitable replacement for Tim

• The issue of the Placing Shares is conditional, amongst other things, on the passing of the Resolutions at the General Meeting, publication of the Group's final results for the year ended 31 December 2016, admission of the Placing Shares to trading on AIM and the lifting of the London Stock Exchange's suspension of trading in the Ordinary Shares

• A circular which will provide further details of the Placing and include a notice convening the General Meeting will be sent to Shareholders and be available on the Company's website in the coming days

• It is expected that the Ordinary Shares will resume trading on AIM at 8.00 a.m. on 1 August 2017 following approval of the Resolutions at the General Meeting and the release of the Group's final results for the year ended 31 December 2016

David Rowe, the proposed Chairman, commented:

"Blur has promised a lot but is yet to deliver to shareholders. Its core proposition of applying automation to the Enterprise procurement process has a number of strong prospects in the pipeline. The task of the restructured board is to ensure that the Company has the right approach and support to convert these prospects into reference customers in the next 12 months and build on its A.I. capabilities. The restructured board will be carrying out a review in the coming weeks and months with a view to making recommendations on improvements to the business plan in order to optimise the business."

Expected timetable

Announcement of completion of the Bookbuilding Process

expected by 5pm on 7 July 2017

Board restructuring completed 10 July 2017

Posting of the Circular and Form of Proxy 12 July 2017

Latest time and date for receipt of the Forms of Proxy

10:00 am on 28 July 2017

Time and date of General Meeting 10:00 am on 31 July 2017

Admission, commencement of dealings in the Placing Shares and resumption of trading in Ordinary Shares

8 am on 1 August 2017

Despatch of warrant certificates to Placees 14 August 2017

Expected publication of Annual Report 1 August 2017

Terms used but not defined in this Announcement shall have the meanings given to such terms in the Circular. This Announcement contains inside information for the purposes of Article 7 of EU Regulation 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.

Enquiries: blur Group plc Tim Allen N+1 Singer (Nominated Adviser & Broker)

Shaun Dobson James White

[phone]

[phone]

Additional Information on the Placing Introduction

The Company today announces its intention to raise a minimum of £1.5 million before expenses from the issue and allotment by the Company of the Placing Shares at the Placing Price. The net proceeds of the Placing will be used to effect the restructured board's base plan for the business focused on generating new Enterprise customers from the current pipeline during the next 12 months or so.

Placees will receive one Warrant for every 3.43 Placing Shares approximately, based on a Placing size of £1.5m, subscribed (rounded down to the nearest whole Ordinary Share), to subscribe for one additional new Ordinary Share at a price of 3.5 pence, exercisable at any time in the period commencing on the first anniversary of Admission and ending 12 months thereafter (a total of 25,000,000 Warrants).

The Placing Shares will be placed with specific institutional and other investors, and the Placing and the issue of the Warrants is conditional, inter alia, upon the Company obtaining approval from Shareholders to disapply pre-emption rights and grant the Board authority to allot the Placing Shares and issue the Warrants. Completion of the Placing and the issue of the Warrants is therefore conditional upon the passing of the Resolutions to be set out in the Notice of General Meeting. The Placing, which has been arranged by N+1 Singer pursuant to the terms of the Placing Agreement, is not being underwritten.

Background to, and reasons for, the Placing

As set out in blur's quarterly business update announcement on 8 February 2017, cash burn for Q4 FY2016 was $0.9 million ($1.0m in Q3 2016), excluding R&D tax credits and foreign exchange movements. This rate of cash burn has stayed broadly constant in the year to date, with cash balances at 30 June 2017 being $0.98m.

Whilst blur is making progress in engaging with and delivering projects for multinational blue chip organisations (as announced by the Company on 23 June 2017), converting customer engagement into significant revenues has been slower than anticipated at the time of the Group's admission to AIM in 2012.

The net proceeds of the Placing are intended to be used as general working capital to enable the restructured board to implement its revised growth plan, which is intended to result in the conversion of customer engagements into projects and revenue growth. The revised growth plan aims to deliver significant progress in establishing relationships with blue chip multinational customers from a variety of sectors whilst minimising the cash requirement of the business.

Shareholders should be aware that if any of the Resolutions are not passed, the Placing will not proceed. The Company would then need to secure alternative funding in the near future which may not be forthcoming and in this event, the Directors may be required to take action which could result in the value attributable to Shareholders being severely reduced or becoming nil.

Business plan and cost savings

The Company aims to focus on generating new Enterprise customers from the current pipeline and on-boarding these customers successfully, growing the number of contracts going through the blur platform. To maximise efficiency, blur plans the following changes to its cost base:

• reduction in management team and board salaries

• assessment of current rented office space and potentially more efficient alternatives

• reconfiguration of delivery team size as platform roll outs are achieved

  Based on the expected net Placing proceeds and the base business plan and cost savings agreed between both the existing board and the restructured board, the existing board and the restructured board believe that the Company will have sufficient working capital for a period of at least 12 months from the expected date of Admission.

  Board changes and committees

  Following completion of the Bookbuilding Process and completion of routine director due diligence, it is expected that a number of board changes will be implemented to position the Group for the next phase of its growth. David Rowe will be appointed as chairman with Preeti Mardia, Richard Rae and Richard Croft being appointed to the board as non-executive directors. Simultaneous with these new appointments, David Sherriff (Chairman), Roger de Peyrecave (non-executive director), Rob Wirszycz (non-executive director) and Kara Cardinale (Chief Delivery Officer) will step down from the board. Tim Allen, finance director, will also step down from the board shortly after the General Meeting and James Porter, blur's existing financial controller, will serve as interim finance lead whilst a review is performed of a suitable replacement for Tim.

  David Rowe (proposed non-executive Chairman)

  David Rowe is the CEO of Black Green Capital, a Venture Capital investment company based in London specialising in disruptive digital transformation.

  Companies in the portfolio include http://levelupmedia.tv/, hydro66.com, sendwyre.com, and message.io.

  David Rowe was CEO and founder of Easynet Group, a U.K. listed global Enterprise Cloud services business sold to BSkyB in 2006. David Rowe subsequently headed up B2B at BSkyB.

  David Rowe has indicated an interest in investing approximately £150,000 in the Placing, and it is the intention of the restructured board to match his investment in additional shares (subject to agreeing a suitable mechanism).

  Options over Ordinary Shares are expected to be granted by the restructured board to David Rowe as part of his incentive based remuneration package. The anticipated terms, which are yet to be agreed, are currently expected to be as follows:

• If the Company's average share price is 10 pence or more for 3 months David Rowe will be entitled to subscribe for Ordinary Shares equivalent to 2.5% of the Company's issued share capital at that time.

• If the Company's average share price is 15 pence or more for 3 months David Rowe will be entitled to subscribe for Ordinary Shares equivalent to 2.5% of the Company's issued share capital at that time.

• If the Company becomes EBITDA positive David Rowe will be entitled to subscribe for Ordinary Shares equivalent to 2.5% of the Company's issued share capital at that time.