THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you shouldtake, you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant or otherindependent financial adviser duly authorised under the Financial Services and Markets Act 2000, if you are in the United Kingdom, or otherwise fromanother appropriately authorised and independent financial adviser.
If you have sold or otherwise transferred all of your ordinary shares of 2 pence each (“Ordinary Shares”) in Ubisense Group plc (the “Company”)
please send this document, together with the accompanying Form of Proxy, to the purchaser or transferee or to the stockbroker, bank or otheragent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. However, these documents should
not be forwarded or sent in, into or from the United States, Australia, Canada, New Zealand, the Republic of South Africa or Japan or any otherstate or jurisdiction in which release, publication or distribution would be unlawful, and therefore persons into whose possession this document
and any accompanying documents come should inform themselves about and observe any applicable requirements. Any failure to comply with thisrestriction may constitute a violation of the securities laws of any such jurisdiction. If you have sold or otherwise transferred only part of yourholding of Ordinary Shares, you should retain these documents and contact the stockbroker, bank or other agent through whom the sale ortransfer was effected immediately.
This document does not constitute an offer to buy, acquire or subscribe for, or the solicitation of an offer to buy, acquire or subscribe for, Placing
Shares or an invitation to buy, acquire or subscribe for the Placing Shares. This document has not been examined or approved by the FCA or
the London Stock Exchange or any other regulatory authority.

Ubisense Group plc(Incorporated in England and Wales with company number 05589712)

Proposed Placing to raise £4.8 million
andNotice of General Meeting
Nominated Adviser and Broker: Numis Securities Limited

This document does not constitute an offer of securities and accordingly is not a prospectus, neither does it constitute an admission document
drawn up in accordance with the AIM Rules.
This document should be read in conjunction with the accompanying Form of Proxy and the definitions set out in this document. The whole ofthis document should be read. In particular, your attention is drawn to the letter from the Chairman of the Company at page 8 of this document
which contains the unanimous recommendation of the Directors to Shareholders to vote in favour of the Resolutions to be proposed at theGeneral Meeting and the Risk Factors at page 13 of this document.
A General Meeting to consider the proposals described in this document will be held at 2.00 pm on 25 April 2016 at the registered office of theCompany at St. Andrew’s House, 90 St. Andrew’s Road, Chesterton, Cambridge, Cambridgeshire CB4 1DL. The notice convening the General
Meeting is set out at the end of this document and a Form of Proxy for use at the General Meeting is enclosed. The action to be taken in respectof the General Meeting is set out in the letter from the Chairman of the Company contained in this document. Shareholders are requested tocomplete, sign and return the Form of Proxy whether or not they intend to be present at the General Meeting. To be valid, Forms of Proxy should
be completed, signed and returned, in accordance with the instructions printed thereon, as soon as possible but, in any event, so as to be received by
the Registrars (the address for whom can be found on page 5 of this document) by not later than 2.00 pm on 23 April 2016. Completion and returnof a Form of Proxy or the electronic appointment of a proxy will not preclude a Shareholder from attending and voting at the meeting should
they so wish.
Application will be made for the Placing Shares to be admitted to trading on AIM. Subject to such admission becoming effective, it is expectedthat dealings in the Placing Shares will commence on AIM on 26 April 2016. The Placing Shares will rank equally in all respects with the Existing
Ordinary Shares and all dividends and other distributions declared, paid or made in respect of the Ordinary Shares after admission of the Placing
Shares.
Numis Securities Limited, which is authorised and regulated in the United Kingdom by the FCA and is a member of the London Stock Exchange,is acting as nominated adviser and broker to the Company. Numis Securities Limited is not acting for any other person in connection with thematters referred to in this document and will not be responsible to anyone other than the Company for providing the protections afforded toclients of Numis Securities Limited or for giving advice in relation to the matters referred to in this document. Numis is not making any
representation or warranty, express or implied, as to the contents of this document, including the accuracy, verification or completeness of any
information contained in this document or for any other statement made or purported to be made by the Company, or on the Company’s behalf,or by them or on their behalf, and nothing in this document shall be relied upon as a promise or representation in this respect, whether as to thepast or future. The responsibilities of Numis as the Company’s nominated adviser and broker under the AIM Rules for Companies and the AIM
Rules for Nominated Advisers are owed solely to the London Stock Exchange and are not owed to the Company or to any Director, Shareholder
or any other person, in respect of his decision to acquire shares in the capital of the Company in reliance on any part of this document, orotherwise.
Numis has not approved the contents of, or any part of, this document and no liability whatsoever is accepted by Numis for the accuracy of any
information or opinions contained in this document or for the omission of any information from this document, and accordingly disclaims to thefullest extent permitted by law all and any liability whatsoever whether arising out of tort, contract or otherwise which it might otherwise have toany person in respect of this document or any such statement.
In accordance with the AIM Rules, this document is available to Shareholders on the Company’s website: www.ubisense.net

IMPORTANT NOTICENOTICE IN RELATION TO OVERSEAS PERSONSThe distribution of this document and the accompanying Form of Proxy in or into jurisdictions otherthan the UK may be restricted by law and therefore any person into whose possession this document
comes should inform themselves about and observe any of those restrictions. Any failure to comply
with any of those restrictions may constitute a violation of the securities laws of any such jurisdiction.
Subject to certain exceptions, this document is not for release, publication or distribution, directly or
indirectly, in or into the United States, Australia, Canada, Japan, New Zealand or the Republic ofSouth Africa or any jurisdiction where to do so might constitute a violation of local securities laws or
regulations. This document does not constitute an offer to buy or subscribe for, or the solicitation of
an offer to buy or subscribe for, Ordinary Shares or any Placing Shares in any jurisdiction in whichsuch offer or solicitation is unlawful.
The Placing Shares have not been, and will not be, registered under the United States Securities Act
of 1933 (as amended) or under the securities laws of any state of the United States. In addition, thePlacing Shares do not qualify for distribution nor have they been registered under any of the relevant
securities laws of Australia, Canada, Japan, New Zealand or the Republic of South Africa.
The Placing Shares are being offered outside of the United States pursuant to Regulation S of the
Securities Act and may not be offered, sold, resold, transferred or delivered, directly or indirectly,
within the United States except pursuant to an applicable exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. There will be no public offer of the
Placing Shares in the United States. The Placing Shares have not been approved or disapproved by the
US Securities and Exchange Commission, any state securities commission in the United States or any
US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the meritsof the offering of the Placing Shares or the accuracy or adequacy of this document. Any representation
to the contrary is a criminal offence in the United States. In addition, offers, sales or transfers of the
Placing Shares in or into the United States for a period of time following completion of the Placing
by a person (whether or not participating in the Placing) may violate the registration requirement of
the Securities Act.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This document contains a number of forward-looking statements relating to the Ubisense Group,
including with respect to the trading prospects of the Ubisense Group. The Company considers any
statements that are not historical facts as “forward looking statements”. They relate to events andtrends that are subject to risks, uncertainties and assumptions that could cause the actual results andfinancial position of the Ubisense Group to differ materially from the information presented in therelevant forward looking statement. When used in this document the words “estimate”, “project”,“intend”, “aim”, “anticipate”, “believe”, “expect”, “should”, and similar expressions, as they relate to
the Ubisense Group or management of it, are intended to identify such forward looking statements.
Shareholders are cautioned not to place undue reliance on these forward looking statements which
speak only as at the date of this document. Neither the Company nor any member of the UbisenseGroup nor Numis nor any of their respective officers, directors and employees undertakes any
obligation to update publicly or revise any of the forward looking statements whether as a result of
new information, future events or otherwise, save in respect of any requirement under applicable laws,
the AIM Rules and other regulations.

2

CONTENTS
Page
PLACING STATISTICS .....................................................................................................................

4

EXPECTED TIMETABLE OF PRINCIPAL EVENTS ...................................................................

4

DIRECTORS, SECRETARY AND ADVISERS ..............................................................................

5

DEFINITIONS....................................................................................................................................

6

LETTER FROM THE CHAIRMAN................................................................................................

8

RISK FACTORS .................................................................................................................................

13

NOTICE OF GENERAL MEETING ...............................................................................................

16

3

PLACING STATISTICS
Placing Price

25 pence

Number of Existing Ordinary Shares

36,620,247

Number of Placing Shares to be issued pursuant to the Placing

19,230,000

Number of Ordinary Shares in issue following the issue of the Placing Shares(1)55,850,247

Number of Placing Shares as a percentage of the Enlarged Share Capital(1)34.4%Gross proceeds of the Placing receivable by the Company£4.8 million

Net proceeds of the Placing receivable by the Company(2)£4.5 million

Notes:(1) Assuming there is no exercise of any options.
(2) Net proceeds are stated after deduction of estimated total expenses of approximately £270,000.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Posting of this Circular

8 April 2016

Latest time and date for receipt of Forms of Proxy

2.00 pm 23 April 2016

General Meeting2.00 pm 25 April 2016

Expected date for Admission and commencement of dealings in the
Placing Shares on AIM

8.00 am on 26 April 2016

Expected date for CREST accounts to be credited in respect of the
Placing Shares to be held in uncertificated form

8.00 am on 26 April 2016

Expected date for the despatch of definitive certificates in respect of
the Placing Shares to be held in certificated form

as soon as practicable
after 26 April 2016

Notes:(1) All times referred to in this document are, unless otherwise stated, references to London time.
(2) Each of the times and dates above are indicative only and are subject to change. If any of the above times and/or dateschange, the revised times and/or dates will be notified by the Company to Shareholders by announcement through aRegulatory Information Service.

4

DIRECTORS, SECRETARY AND ADVISERS
Directors

Peter George Harverson (Chairman)
Richard Terence Green (Chief Executive Officer)
Ian Edward Kershaw
Robert Daniell Sansom
Paul Ronald Taylor

Company Secretary

Tim Gingell

Registered Office, Principal
Place of Business andBusiness Address of each of
the Directors

St. Andrew’s House
90 St. Andrew’s Road
Chesterton
Cambridge
Cambridgeshire
CB4 1DL

Websitewww.ubisense.net

Nominated Adviser and Broker

Numis Securities Limited
10 Paternoster Square
LondonEC4M 7LT

Legal advisers to the Company

Mills & Reeve LLP
4th Floor
Monument Place
LondonEC3R 8AJ

Legal advisers to Numis

Nabarro LLP
125 London WallLondonEC2Y 5AL

Registrars

Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS13 8AE

5DEFINITIONS
The following definitions apply throughout this document unless the context requires otherwise:“Admission”

admission of the Placing Shares to trading on AIM becoming
effective in accordance with the AIM Rules“AIM Rules”

the AIM Rules for Companies published by the London Stock
Exchange (as amended from time to time) governing admission toand the operation of AIM“AIM”

AIM, a market operated by the London Stock Exchange“Business Day”

any day (excluding Saturdays and Sundays) on which banks areopen in the City of London for the conduct of normal banking
business“Circular”

this circular to shareholders dated 8 April 2016

“Companies Act” or the “Act”

the Companies Act 2006

“Company” or “Ubisense”

Ubisense Group plc of St. Andrew’s House, 90 St. Andrew’s Road,
Chesterton, Cambridge, Cambridgeshire CB4 1DL“CREST”

the relevant system (as defined in the Regulations) in respect ofwhich Euroclear UK & Ireland is the operator (as defined in theRegulations)“Directors” or “Board”

the directors of the Company whose names are set out on page 5of this document“Enlarged Share Capital”

the issued share capital of the Company following Admission, as
enlarged by the Placing Shares“Existing Ordinary Shares”

36,620,247 Ordinary Shares in issue at the date of this document“FCA”

the Financial Conduct Authority“Form of Proxy”

the form of proxy for use by shareholders at the General Meeting,enclosed with this document“General Meeting”

the general meeting of the Company to be held at the registeredoffice of the Company at St. Andrew’s House, 90 St. Andrew’sRoad, Chesterton, Cambridge, Cambridgeshire CB4 1DL at
2.00 pm on 25 April 2016, notice of which is set out at the end of
this document“London Stock Exchange”

London Stock Exchange plc“Notice of General Meeting”

the notice convening the General Meeting set out on page 16 of
this document“Numis”

Numis Securities Limited of 10 Paternoster Square, London,
EC4M 7LT“Ordinary Shares”

the ordinary shares of 2 pence each in the capital of the Company“Placing Agreement”

the agreement dated 7 April 2016 between the Company and Numis
relating to the Placing, further details of which are set out in thisdocument“Placing”

the proposed placing by Numis of the Placing Shares on behalf of
the Company pursuant to the Placing Agreement“Placing Price”

25 pence per Placing Share6

“Placing Shares”

the 19,230,000 new Ordinary Shares to be issued by the Company
at the Placing Price pursuant to the Placing Agreement“Regulations”

the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755)“Resolutions”

the resolutions to be proposed at the General Meeting as set out in
the Notice of General Meeting“Shareholders”

holders of Ordinary Shares“Ubisense Group”

the Company and its subsidiaries“UK” or “United Kingdom”

the United Kingdom of Great Britain and Northern Ireland“United States” or “US”

the United States of America, its territories and possessions, any
State of the United States and the District of Columbia

7

LETTER FROM THE CHAIRMAN

Ubisense Group plc(Incorporated in England and Wales with company number 05589712)

Directors:
Peter Harverson
Richard Green
Ian Kershaw
Robert Sansom
Paul Taylor

Registered Office:
St. Andrew’s House
90 St. Andrew’s Road
Chesterton
Cambridge
Cambridgeshire
CB4 1DL
8 April 2016

Dear Shareholder

Proposed Placing to raise £4.8 million
andNotice of General Meeting
1.
INTRODUCTION
The Company announced on 7 April 2016 a proposed placing of 19,230,000 new Ordinary Shares at
25 pence per Placing Share to raise approximately £4.8 million (approximately £4.5 million net of
expenses) in order to strengthen its balance sheet.
Consequently, a General Meeting has been called to approve the issue of the Placing Shares.
Shareholders should note that the Placing is subject to certain conditions, as set out in paragraph 4
below, including Shareholders’ approval of the Resolutions which are being proposed at the General
Meeting. If the Resolutions are not passed by the requisite majority, the Placing will not proceed.
Accordingly, you will find set out at the end of this document a notice convening a general meetingof the Company to be held at the registered office of the Company at St. Andrew’s House,
90 St. Andrew’s Road, Chesterton, Cambridge, Cambridgeshire CB4 1DL at 2.00 pm on 25 April 2016.
The purpose of this letter is to provide further information on the Placing, including the intended useof the proceeds of the Placing, and to explain why the Board considers the Placing to be in the bestinterests of the Company and Shareholders as a whole.
2.
BACKGROUND TO AND REASONS FOR THE PLACING
As set out in the Company’s 2015 preliminary results announcement released on 7 April 2016, 2015
proved to be a disappointing year for the business as it was hit by weaker than expected demand whichcoincided with the expense of investment to grow the organisation and expand its geographical reach.
In response, the Board took the decision during 2015 to undertake a strategic restructuring of theCompany’s business. That restructuring is now largely complete and the business has been restructured
into two divisions, RTLS and Geospatial. In addition, an increased emphasis has been placed on sales
leadership and pipeline conversion. The annualised controllable cost base (which excludes costs directly
linked to revenues) has been reduced by approximately £5.8 million from its peak to approximately£21.7 million. The Company’s next generation products have been developed and tested in anticipationof future sales and its geographic focus has been concentrated on its priority markets of North
America, Europe and Japan.
The Company’s opening order book at 1 January 2016 was £9.6 million of which £6.8 million
represents recurring revenue. Trading for the first quarter of 2016 was slightly ahead of the8corresponding period in 2015. The Company announced on 17 March 2016 three new contracts inNorth America for its Geospatial division, valued at a combined $2.9 million (£2.0 million), with Tier
1 broadband communications and entertainment providers and one of the largest power companies in
the United States. Since that announcement the Company has signed another significant contract
renewal with a value of £1.6 million to be recognised over a three year period.
Notwithstanding these developments, the Company is in a position where the Board believes it isnecessary to strengthen the Company’s balance sheet in order to provide the stability required tofurther develop the business. The Company had a net debt position of approximately £2.4 million at
31 March 2016 (£0.2 million at 31 December 2016) following the impact of restructuring costs ofapproximately £0.8 million, trading losses incurred in the first quarter of the current financial year andworking capital outflows. This net debt position of £2.4 million comprised £2.1 million of cash and a£4.5 million loan provided by HSBC Bank plc (“HSBC”). The Company repaid its £1.2 million facility
with Mizuho during March 2016.
As announced on 12 November 2015, the Board has been in regular dialogue with its principal lender,
HSBC, which has continued to be supportive of the Company. HSBC has confirmed that it has waived
its right to take action in relation to certain notified covenant defaults that existed at 31 December
2015 and 31 March 2016. The Company has discussed its funding position with HSBC at length andhas agreed to use reasonable endeavours to finalise a revised loan facility with HSBC by 31 May 2016.
The Directors intend to ensure that the new covenant package in the revised loan facility is more
appropriate for the Company’s current circumstances. In this context, the principles of a loan
repayment schedule have been agreed with HSBC with £0.5 million to be repaid on receipt of theproceeds of the Placing, a further £0.75 million scheduled to be repaid on 31 December 2016 andfurther repayments of £0.75 million annually on 31 December thereafter.
In the event that shareholder approval for the Placing is not achieved at the general meeting, it is likelythat the Company and its subsidiaries (the “Group”) will continue to be in covenant breach on its debt
facility at the subsequent quarterly covenant test date and would therefore remain reliant on thecontinuing support of its lending bank. Furthermore, it would be unlikely that the new loan facility
and repayment schedule described above could be agreed. The Company would also be in a position
whereby the limited headroom under its existing facilities would likely impose severe constraints overthe Group’s operations in the short and medium term.
The Board therefore believes that the Placing is necessary to strengthen the balance sheet and allow the
Company to repay a portion of its loan with HSBC and provide working capital headroom required
to stabilise and grow the business.
Following the completion of the Placing, the Group intends to review its long-term incentive
arrangements in order to ensure that the Group is able to recruit and retain appropriate talent in key
management roles. The Board intends to consult with certain of its major shareholders ahead ofproposing any new incentive plan at the Annual General Meeting to be convened for June 2016.
3.
USE OF THE PROCEEDS FROM THE PLACING
The Company intends to raise gross proceeds of £4.8 million pursuant to the Placing, equivalent toapproximately £4.5 million net of expenses, which will be used to repay a portion of existing working
capital facilities and strengthen the Company’s financial position as outlined above.
4.

DETAILS OF THE PLACING AND THE PLACING AGREEMENTThe Placing
The Placing Shares will represent approximately 34.4 per cent. of the Enlarged Share Capital following
Admission assuming there is no exercise of any options.
It is expected that Placing Shares to be held in uncertificated form will be delivered in CREST on
26 April 2016 and that share certificates for Placing Shares to be held in certificated form will be
despatched by first class post by as soon as practicable after 26 April 2016.

9

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to
trading on AIM and it is anticipated that trading in the Placing Shares will commence on AIM at
8.00 am on 26 April 2016.
The Placing Shares will, when issued and fully paid, rank in full for any dividend or other distribution
declared, made or paid after Admission and otherwise equally in all respects with the Existing Ordinary
Shares.
The Placing is conditional, amongst other things, upon:(i)the Resolutions to be proposed at the General Meeting being passed without amendment;(ii)

the Placing Agreement becoming unconditional in all respects (save for Admission) and it nothaving been terminated; and(iii)

admission of the Placing Shares to trading on AIM becoming effective by not later than 8.00 am on
26 April 2016 (or such later time and date as the Company and Numis may agree, not being later
than 8.30 am on 12 May 2016).

Related Party Transactions
Kestrel Partners LLP (“Kestrel”) is a related party of the Company as defined by the AIM Rules for
Companies by virtue of its status as a substantial shareholder. Kestrel has agreed to subscribe for
6,840,000 Placing Shares as part of the Placing, conditional on Admission.
In addition, Columbia Threadneedle Investments (“Columbia Threadneedle”) is a related party of theCompany as defined by the AIM Rules for Companies by virtue of its status as a substantial
shareholder. Columbia Threadneedle has agreed to subscribe for 4,998,000 Placing Shares as part of
the Placing, conditional on Admission.
Taking into account the related party transactions noted above, the Directors consider, having consulted
with the Company’s nominated adviser, Numis, that the terms of the Placing are fair and reasonable
insofar as the Company’s shareholders are concerned.
Details of the participation in the Placing by certain directors, who also constitute related parties, are
set out below.
Participation of the Directors
Certain of the Directors, together with Tim Gingell, interim Chief Financial Officer, have, conditionalon Admission, participated in the Placing by subscribing for an aggregate of 2,200,000 shares as set
out below:
Number ofRobert SansomPeter Harverson
Paul Taylor
Tim Gingell

Number ofordinary sharesordinary shares

to be held

Percentage ofenlargedin the Placing

on admission

share capital

2,000,000
80,00080,00040,0004,985,899
145,161
113,334
40,000

8.9%
0.3%
0.2%
0.1%

The subscriptions by Robert Sansom, Peter Harverson and Paul Taylor are a related party transaction
under the AIM Rules for Companies and accordingly the independent directors, being Ian Kershaw andRichard Green, confirm that, having consulted with the Company's nominated adviser, Numis, theterms of the Placing are fair and reasonable insofar as the Company's shareholders are concerned.
The Placing Agreement
Pursuant to the terms of the Placing Agreement, Numis as agent for the Company, has agreed
conditionally to use its reasonable endeavours to procure Placees for the Placing Shares at the Placing
Price.

10

The Placing Agreement contains warranties from the Company in favour of Numis in relation to,amongst other things, the accuracy of the information contained in the documents relating to thePlacing and certain other matters relating to the Group and its business. In addition, the Company has
agreed to indemnify Numis in relation to certain liabilities that it may incur in respect of the Placing.
The obligations of Numis under the Placing Agreement in respect of the Placing are conditional upon,amongst other things: (i) Admission becoming effective on or before 8.00 a.m. on 26 April 2016 (orsuch later date as the Company and Numis may agree, but not later than 8.30 am on 12 May 2016);(ii) there being prior to Admission no material breach of the warranties given to Numis; and(iii) Shareholders passing the Resolutions at the General Meeting.
Numis may terminate the Placing Agreement in specified circumstances (including for breach of
warranty at any time prior to Admission, if such breach is reasonably considered by Numis to bematerial in the context of the Placing) and in the event of a force majeure event occurring at any timeprior to Admission. If the conditions of the Placing Agreement which apply to the Placing as a whole
are not fulfilled on or before the relevant date in the Placing Agreement, subscription monies will be
returned to Placees without interest as soon as possible thereafter.
In consideration for the services to be provided to the Company by Numis in connection with
Admission and the Placing, the Company has agreed to pay Numis certain fees and commissions andcertain other costs and expenses incidental to Admission and/or the Placing.
5.
GENERAL MEETINGThe Notice convening the General Meeting of the Company, to be held at the registered office of theCompany at St. Andrew’s House, 90 St. Andrew’s Road, Chesterton, Cambridge, Cambridgeshire
CB4 1DL at 2.00 pm on 25 April 2016 is set out at the end of this document. The business to beconsidered at the General Meeting is set out in the notice together with the explanatory notes to eachresolution below.
At the general meeting of the Company held on 29 May 2015, Shareholders passed resolutions in order
to, amongst other things, grant the Directors authority to allot equity securities up to a maximum
nominal value of £50,125. This authority is insufficient to allow the placing of the Placing Shares toproceed without further shareholder approval. Accordingly, at the General Meeting, the following
Resolutions will be proposed:
Resolution 1 – Authority to allot Ordinary Shares for the Placing
The Directors require the authority of Shareholders in order to allot the Placing Shares. Resolution 1
in the Notice provides such authority by granting the Directors authority to allot Ordinary Shares up
to a maximum nominal amount of £384,600 (representing, as at 7 April 2016 (being the latest
practicable date before the publication of this document), approximately 52.5 per cent. of the Existing
Ordinary Shares) being 19,230,000 Ordinary Shares in number.
Resolution 1 is being proposed as an ordinary resolution and will therefore require more than 50 per
cent. of the votes cast, whether in person or by proxy, to be in favour of the resolution. This authority,
if granted, will be in addition to any existing authorities to allot Ordinary Shares granted to the
Directors prior to the date of this document, and will enable the Directors to effect the Placing. Thisauthority can only be used for the purpose of the Placing and will expire on the date of the next
Annual General Meeting of the Company.
Resolution 2 – Disapplication of pre-emption rights for the Placing
Section 561 of the Companies Act requires that, on an allotment of “equity securities” for cash, such
equity securities must first be offered to existing Shareholders in proportion to the number of Ordinary
Shares they each hold at that time. This is known as a shareholder’s pre-emption right. The Placing
Shares are “equity securities” for these purposes. Accordingly, the Placing Shares cannot be allotted for
cash on a non pre-emptive basis unless Shareholders have first waived their pre-emption rights.
Resolution 2, if passed, provides such a waiver. If Resolution 2 is passed, the Directors will be able toallot the Placing Shares, on a non pre-emptive basis, to the extent of the authority granted by
Resolution 1. The authority to allot the Placing Shares for cash on a non pre-emptive basis in respect11

of the Placing can only be used for the purpose of the Placing and will, if granted, expire on the dateof the next Annual General Meeting of the Company.
Resolution 2 is being proposed as a special resolution and will therefore require not less than 75 percent. of the votes cast, whether in person or by proxy, to be in favour of the resolution.
If Resolutions 1 and 2 are passed by Shareholders at the General Meeting but the Placing does notcomplete, the Company undertakes not to use the authorities granted by Resolutions 1 and 2.
6.
ACTION TO BE TAKEN
A Form of Proxy for use at the General Meeting is enclosed.
Whether or not you intend to attend the General Meeting, it is important that you complete and sign theenclosed Form of Proxy in accordance with the instructions printed thereon and return it to the Registrars
at the address set out on page 5 of this document as soon as possible and in any event so as to be received
by no later than 2.00 pm on 23 April 2016. Alternatively, a proxy may be appointed electronically byfollowing the instructions in note 5 to the Notice of General Meeting. Completion and return of theForm of Proxy or the electronic appointment of a proxy will not preclude you from attending andvoting at the meeting, should you wish to do so.
7.
ADDITIONAL INFORMATIONYour attention is drawn to the Risk Factors set out on pages 13 to 15 of this document.
8.
IMPORTANCE OF THE SHAREHOLDER VOTE
As described in further detail above, the Board believes that the Group will operate under severe
funding constraints if the Placing does not proceed. The Group is in covenant breach on its principal
debt facilities and has received from its lending bank a waiver, conditional on announcing an equity
raise and pursuant to which the Company has undertaken to use its reasonable endeavours to agree a
new loan facility with HSBC by 31 May 2016 containing new covenant conditions and a repayment
profile of £0.75 million annually on 31 December, in addition to repaying £0.5 million of the loan
facility within 24 hours of receiving the net proceeds. Consequently, if the Resolutions are not passed
and the Placing does not proceed, the Group will likely breach its covenants at future quarterly testing
dates, will continue to be reliant on the ongoing support of its lending bank and may need to seek
alternative sources of financing which may not be available and (to the extent available) may be on
terms less favourable to the Company.
9.
RECOMMENDATIONThe Directors believe that completion of the Placing and the approval of the Resolutions are in thebest interests of the Company and Shareholders as a whole. Accordingly, the Directors unanimously
recommend that you vote in favour of the Resolutions at the General Meeting, as they intend to do inrespect of their own beneficial holdings of Ordinary Shares amounting to, in aggregate, 4,930,856
Ordinary Shares, representing approximately 13.5 per cent. of the Existing Ordinary Shares.
Yours sincerelyPeter Harverson
Chairman

12

RISK FACTORS
An investment in Ordinary Shares involves a high degree of risk. Accordingly, prospective investors shouldcarefully consider the specific risks set out below in addition to all of the other information set out in thisdocument before investing in Ordinary Shares.
The Directors believe the following risks to be among the most significant risks for potential investors.
However, the risks listed do not necessarily comprise all those associated with an investment in the
Company and are not set out in any particular order of priority. Additional risks and uncertainties not
currently known to the Directors or which the Directors currently deem immaterial may also have an
adverse effect on the Group and the information set out below does not purport to be an exhaustive
summary of the risks affecting the Group. In particular, the Company’s performance may be affected bychanges in market or economic conditions and in legal, regulatory and tax requirements.
If any of the following risks were to materialise, the Company’s business, financial condition, results or
future operations could be materially adversely affected. In such cases, the market price of the Company’s
shares could decline and an investor may lose part or all of his or her investment.
TECHNOLOGICAL RISKSThe Group operates in an industry where competitive advantage is heavily dependent on technology. It
is possible that technological development may reduce the importance of the Group’s function in themarket or render the patents on which it relies redundant. For instance, the Group’s enterprise location
systems rely on ultra-wideband radio signals to operate. There is no guarantee that technologicaladvances will not render systems based on ultra-wideband radio obsolete.
STAFF RECRUITMENT AND RETENTION
The contribution made by Ubisense’s highly skilled and experienced staff is vital to the Group’s success.
Any inability to recruit and/or retain staff to fill key management roles would likely adversely impact
the Group’s future development and financial performance.
RELIANCE ON THIRD PARTIES, INCLUDING MANUFACTURERS
The Group relies on certain key third party equipment manufacturers in the completion of its products,
and therefore does not always have complete control over the supply of the equipment and materials
it requires to comply with its obligations under customer contracts. To the extent that the Group
cannot acquire equipment or materials according to its plans and budgets, its ability to complete its
work for its customers within the timetable laid down by the contract or at a profit may be impaired.
If a manufacturer is unable to deliver the products for any reason, the Group may be required topurchase such equipment or materials from another source at a higher price. The resulting additionalcosts may be substantial and the Group may be in breach of its contracts with customers, which may
result in a financial loss on a particular contract or a loss of business. In addition, any resulting failure
to fulfil contracts with customers and other business partners may have an adverse effect on theGroup’s future profitability and reputation.
DEPENDENCE ON KEY CUSTOMERSThe Group has a concentrated customer base, many of which are substantially larger enterprises thanthe Group. As such, the purchasing power of the Group’s customers is often significant, which may
impact the ability of the Group to negotiate terms which are favourable to it in contracts. The Groupis reliant on significant projects with its key customers to deliver its projected financial results. Changes
to the timing and/or terms of significant projects, to the investment decisions of key customers or
failure by the Group to retain key customers may have a significant adverse effect on the Group’sbusiness and financial results. The loss of a major customer would likely result in a decrease in Grouprevenues, margins and profitability.
CONTRACTS
Some of the Group’s commercial contracts include terms where revenues and/or invoicing are related
to customer acceptance. Other contracts contain terms whereby the timing of cash collections iscontingent on the customer re-selling the Group’s products to end users.

13

CREDITThe main credit risk is attributable to trade receivables owed by customers. As the majority of theGroup’s customers are very large, blue chip utilities, telecoms and manufacturing companies, the riskof non-payment tends to be less of a traditional credit nature and more related to customer
satisfaction.
Credit exposure by customer is reviewed regularly by the executive management team and the main
Board with provision made for doubtful receivables when there are circumstances which, based on
experience, are evidence of a likely reduction in the recoverability of the receivable.
FINANCIAL PROFILEThe Group has suffered from declining revenues and increased losses and resultant cash burn during
2015, which the Group did not anticipate. Although the Board has taken actions to address thecontrollable cost base in order to prevent this from reoccurring, a failure to arrest the decline inrevenues and/or to control costs could give rise to the Group needing to raise further equity finance inthe future.
BANK COVENANTS
The Group is required to meet certain financial criteria agreed as covenants for its bank. The financial
measures are regularly reviewed against covenant requirements to ensure the Group’s obligations can bemet.
The Group notified its bank, HSBC Bank plc, of a breach of certain covenants as at 31 December
2015 and 31 March 2016, against which HSBC has provided a waiver, conditional on announcing anequity raise and pursuant to which the Company has undertaken to use its reasonable endeavours toagree a new loan facility with HSBC by 31 May 2016 containing new covenant conditions and a
repayment profile of £0.75 million annually on 31 December, in addition to repaying £0.5 million of
the loan facility within 24 hours of receiving the net proceeds of the Placing.
If the Group is unable to agree such a new loan facility, there is a risk that it would be unable to meetcovenant tests under the existing facility, particularly in the event that the Group is not in a net cash
position as at upcoming quarter ends, or in the event that adjusted EBITDA for the 12 months to
31 December 2016 is less than zero. The Group and HSBC have agreed to use reasonable endeavours
to agree and finalise a new loan facility on or before 31 May 2016 which will have new covenantconditions.
INTELLECTUAL PROPERTYThe Group has a number of trademarks registered, and is pursuing registration of a number of
trademarks, in the major territories in which it operates. The Group also has a patent portfolio
comprising a number of patents filed in territories worldwide. Should a third party successfully
demonstrate priority over any of these rights, it could inhibit the Group, or the Group’s customers,from selling products in certain territories.
Any failure to protect the Group’s intellectual property may result in another party copying orotherwise obtaining and using its proprietary technology without authorisation. There may not beadequate protection for the intellectual property in every country in which the Group’s products are
made available and policing unauthorised use of proprietary information is difficult and expensive. Dueto the Group’s size and limited cash resources, it may not be able to detect and prevent infringementof its intellectual property.
The Group has received (and expects to continue to receive in its normal course of business)
communications from third parties alleging breach and/or infringement of their intellectual property
rights. The Group’s policy is to diligently investigate all intellectual property rights allegations madeagainst it by third parties. These third parties range from non-practising entities, whose sole focus is togenerate income from licensing their intellectual property rights, to corporations with competing and/or
adjacent trading activities, including a large, multinational corporation. No such communications havebeen received for over 18 months. The Directors, having taken expert advice, believe that the allegationsof infringement made in such communications are unjustified. However, the timeframes under which

14third parties can allege breach of their intellectual property rights are potentially prolonged, and the
Directors cannot exclude the possibility that third party assertions which the Directors believe to beunjustified require the Group to incur significant expenditure to defend against such assertions, orultimately that such assertions may subsequently be upheld by the competent authorities resulting in amaterial negative impact on the Group.
In addition, some of the Group’s patents are licensed from a third party. The terms of that licence areon relatively standard commercial terms. However, there can be no guarantee that such third party will
adequately maintain such patents and therefore the protection and benefit afforded to the Company bysuch patents cannot be guaranteed.
The steps which the Group has taken to protect its intellectual property may be inadequate to preventthe misappropriation of its proprietary technology. Any misappropriation of the Group’s intellectual
property could have an adverse impact on the Group’s business and its operating results. Furthermore,
the Group may need to take legal action to enforce its intellectual property, to protect trade secrets or
to determine the validity or scope of the proprietary rights of others. Litigation relating to the Group’s
intellectual property, whether instigated by the Group to protect its rights or arising out of alleged
infringement of third party rights, may result in substantial costs and the diversion of resources andmanagement attention and there can be no guarantees as to the outcome of any such litigation.
DIGITAL INFRASTRUCTURE AND CYBERSECURITY
Breaches of the Group’s digital security, through cyber attacks or otherwise, or failure of the Group’s
digital infrastructure, could seriously disrupt operations and result in the loss or misuse of data or
sensitive information, legal or regulatory breaches and potentially legal liability. These could result insignificant costs or have reputational consequences.
Following a review of the resilience and disaster recovery capability of the Group’s critical systems andexchanges in 2015, the Group has invested resources in enhancing site resilience and defences,improving network monitoring and reviewing the incident response processes to mitigate the impact ofa security breach.
The risks noted above do not necessarily comprise all those potentially faced by the Group and are
not intended to be presented in any assumed order of priority.
Although the Directors will seek to minimise the impact of the Risk Factors, investment in the
Company should only be made by investors able to sustain a total loss of their investment. Investors
are strongly recommended to consult an investment adviser authorised under the FSMA who specialises
in investments of this nature before making any decision to invest.
The risks noted above do not necessarily comprise all those potentially faced by the Group and are notintended to be presented in any assumed order of priority.
Although the Directors will seek to minimise the impact of the Risk Factors, investment in the Company
should only be made by investors able to sustain a total loss of their investment. Investors are strongly
recommended to consult an investment adviser authorised under the FSMA who specialises in investmentsof this nature before making any decision to invest.

15

NOTICE OF GENERAL MEETING

Ubisense Group plc(Incorporated in England and Wales with company number 05589712)

NOTICE IS HEREBY GIVEN that a General Meeting of Ubisense Group plc (the “Company”) will
be held at the Company’s registered office at St. Andrew’s House, 90 St. Andrew’s Road, Chesterton,
Cambridge, Cambridgeshire CB4 1DL on 25 April 2016 at 2.00 pm for the purpose of considering and,if thought fit, passing the following resolutions, of which Resolution 1 will be proposed as an ordinary
resolution and Resolution 2 will be proposed as a special resolution.
ORDINARY RESOLUTION
1.
THAT conditional upon the Placing Agreement (as defined in the circular to shareholders of theCompany dated 8 April 2016 (the “Circular”)) becoming unconditional in all respects (save only for
any conditions dependent on the passing of the Resolutions and Admission (as defined in the
Circular)) and not being terminated in accordance with its terms, and in addition to any otherauthority which may have been given to the directors pursuant to section 551 of the Companies Act
2006 (the “Act”) prior to the date of the passing of this resolution, the directors be and they are
hereby generally and unconditionally authorised pursuant to section 551 of the Act to exercise all
powers of the Company to allot shares in the Company up to an aggregate nominal value of£384,600 pursuant to or in connection with the allotment of 19,230,000 new ordinary shares of
2 pence each in the capital of the Company to such persons as may be entitled in connection with
the Placing (as defined in the Circular), such authority shall expire on the date of the next Annual
General Meeting of the Company (unless previously revoked or varied by the Company in a general
meeting), save that the Company may make offers and enter into agreements during the relevant
period which would, or might, require equity securities to be allotted after the authority ends andthe Board may allot equity securities under any such offer or agreement as if the authority conferredhereby had not expired.
SPECIAL RESOLUTION
2.
THAT conditional upon the passing of Resolution 1 and the Placing Agreement becoming
unconditional in all respects (save only for any conditions dependent on the passing of Resolution
1, Resolution 2 and Admission) and not being terminated in accordance with its terms, and in
addition to any existing power given to the directors pursuant to section 571 of the Act prior to thedate of the passing of this resolution, the directors be and they are hereby empowered pursuant tosection 571 of the Act to allot the shares that are the subject of Resolution 1 for cash, pursuant tothe authority of the directors under section 551 of the Act conferred by Resolution 1, as if section
561(1) of the Act did not apply to such allotment, such authority shall expire on the date of the next
Annual General Meeting of the Company (unless previously revoked or varied by the Company ina general meeting), save that the Company may make offers and enter into agreements during therelevant period which would, or might, require equity securities to be allotted after the authority
ends and the Board may allot equity securities under any such offer or agreement as if the authority
conferred hereby had not expired.

Registered office:
St. Andrew’s House
90 St. Andrew’s Road
Chesterton
Cambridge
Cambridgeshire
CB4 1DLBY ORDER OF THE BOARDTim Gingell
Company Secretary

8 April 201616

Notes:1.

A member entitled to attend and vote at the meeting is entitled to appoint another person(s) (who need not be a member of theCompany) to exercise all or any of his rights to attend, speak and vote at the meeting. A member can appoint more than one
proxy in relation to the meeting, provided that each proxy is appointed to exercise the rights attaching to different shares held by
the member.

2.

Your proxy could be the Chairman, another Director of the Company or another person who has agreed to attend to represent
you. Your proxy will vote as you instruct and must attend the meeting for your vote to be counted. Details of how to appoint the
Chairman or another person as your proxy using the proxy form are set out in the notes to the proxy form. Appointing a proxydoes not preclude you from attending the meeting and voting in person. If you attend the meeting in person, your proxyappointment will automatically be terminated.

3.

An appointment of proxy is provided with this notice and instructions for use are shown on the form. In order to be valid, acompleted appointment of proxy must be returned to the Company by one of the following methods:
3.1 in hard copy form by post, by courier or by hand to the Company’s Registrar at the address shown on the form of proxy; or
3.2 in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with theprocedures set out below, and in each case must be received by the Company by 2.00 pm on 23 April 2016. Please note thatany electronic communication sent to us/our registrars in respect of the appointment of a proxy that is found to contain acomputer virus will not be accepted.

4.

To change your proxy instructions you may return a new proxy appointment using the methods set out above. Where you haveappointed a proxy using the hard copy proxy form and would like to change the instructions using another hard copy proxy form,
please contact Computershare at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY.
The deadline for receipt of proxy appointments (see above) also applies in relation to amended instructions.

5.

You can appoint a proxy electronically by going to www.investorcentre.co.uk/eproxy and following the online instructions. For anelectronic proxy appointment to be valid, your appointment must be logged on the website using the details contained in yourproxy form no later than 2.00 pm on 23 April 2016.

6.

CREST
6.1 CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may
do so by utilising the procedures described in the CREST Manual, which can be viewed at www.euroclear.com/CREST.
CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a voting
service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take theappropriate action on their behalf.
6.2 In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a “CREST Proxy
Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland’s specifications and must containthe information required for such instructions, as described in the CREST Manual. The message, regardless of whether it
constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy, must, inorder to be valid, be transmitted so as to be received by the issuer’s agent (ID 3RA50) by the latest time(s) for receipt of proxyappointments specified in the notice of meeting. For this purpose, the time of receipt will be taken to be the time (asdetermined by the timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent is able
to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
6.3 The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
6.4 CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK &Ireland does not make available special procedures in CREST for any particular messages. Normal system timings andlimitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST
member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed
a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall benecessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection,
CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to thosesections of the CREST Manual concerning practical limitations of the CREST system and timings.

7.

Only those shareholders registered in the Register of Members of the Company as at 6.00 p.m. on 21 April 2016 (or, if themeeting is adjourned, 6.00 p.m. on the date which is two business days before the time of the adjourned meeting) shall be entitled
to attend and vote at the meeting or adjourned meeting in respect of the number of shares registered in their respective names atthat time. Changes to the Register of Members after that time will be disregarded in determining the rights of any person toattend or vote at the meeting or adjourned meeting.

8.

Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its
powers as a member provided that they do not do so in relation to the same shares.

17

Linkway Financial Printers
Typeset & Printed in London (UK) 16616