16860 GOODWOOD pp01-20 18/10/2017 16:05 Page 1

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as tothe action you should take, you are recommended to seek your own financial advice immediately from your stockbroker, bankmanager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act
2000, if you are in the United Kingdom, or otherwise from another 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 orto the stockbroker, bank or other agent 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 other state 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 this restriction 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 or transfer 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, or an invitation to buy, acquire or subscribe for the Placing Shares. This document has not been examined orapproved by the FCA or the London Stock Exchange or any other regulatory authority.

Ubisense Group plc(Incorporated in England and Wales with company number 5589712)

Proposed Placing to raise £5.5 million
Notice 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 10:00 am on 3 November 2017 at the registered office of
the Company 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 in the Form of Proxy) by not later than 10:00 am on 1 November 2017. 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 6 November 2017. 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 is not acting for any other person in connection with the matters referred toin this document and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Numis or forgiving 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 thisdocument shall be relied upon as a promise or representation in this respect, whether as to the past 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, or otherwise.
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 Numis accordingly disclaims
to the fullest extent permitted by law all and any liability whatsoever whether arising out of tort, contract or otherwise which it might otherwise
have to any 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

16860 GOODWOOD pp01-20 18/10/2017 16:05 Page 2

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16860 GOODWOOD pp01-20 18/10/2017 16:05 Page 3

CONTENTSPage
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 ...............................................................................................

173

16860 GOODWOOD pp01-20 18/10/2017 16:05 Page 4

PLACING STATISTICS
Placing Price

32 pence

Number of Existing Ordinary Shares

55,890,654

Number of Placing Shares to be issued pursuant to the Placing

17,187,500

Number of Ordinary Shares in issue following the issue of the Placing Shares1

73,078,154

Number of Placing Shares as a percentage of the Enlarged Share Capital1

23.5%

Gross proceeds of the Placing receivable by the Company£5.5 million

Estimated net proceeds of the Placing receivable by the Company2£5.15 million

Notes:(1) Assuming there is no exercise of any options.
(2) Net proceeds are stated after deduction of estimated total expenses of approximately £0.35 million.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Posting of this Circular

18 October 2017

Latest time and date for receipt of Forms of Proxy

10:00 am on 1 November 2017

General Meeting

10:00 am on 3 November 2017

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

8:00 am on 6 November 2017

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

8:00 am on 6 November 2017

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

as soon as practicable
after 6 November 2017

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 dates change,
the revised times and/or dates will be notified by the Company to Shareholders by announcement through a Regulatory
Information Service.

4

16860 GOODWOOD pp01-20 18/10/2017 16:05 Page 5

DIRECTORS, SECRETARY AND ADVISERS
Directors

Peter George Harverson (Chairman)
Riccardo (Richard) Ettore Petti (Chief Executive Officer)
Timothy Gingell (Chief Financial Officer)
Ian Edward Kershaw
Robert Daniell Sansom
Oliver Rupert Andrew Scott
Paul Ronald Taylor

Company Secretary

Timothy Gingell

Registered Office, Principal
Place of Business andBusiness Address of eachof 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

CMS Cameron McKenna Nabarro Olswang LLP
Cannon Place
78 Cannon Street
LondonEC4N 6AF

Registrars

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

5

16860 GOODWOOD pp01-20 18/10/2017 16:05 Page 6

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”

AIM, a market operated by the London Stock Exchange“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“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 18 October 2017

“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 5 ofthis document“Enlarged Share Capital”

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

55,890,654 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” or “GM”

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
10:00 am on 3 November 2017, notice of which is set out at theend of this document“London Stock Exchange”

London Stock Exchange plc“Notice”

the notice convening the General Meeting set out at the end of thisdocument“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“Placee”

each placee of the Placing Shares“Placing”

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

the agreement dated 18 October 2017 between the Company andNumis relating to the Placing, further details of which are set out
in this document

6

16860 GOODWOOD pp01-20 18/10/2017 16:05 Page 7“Placing Price”

32 pence per Placing Share“Placing Shares”

the 17,187,500 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” or “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16860 GOODWOOD pp01-20 18/10/2017 16:05 Page 8

LETTER FROM THE CHAIRMAN

Ubisense Group plc(Incorporated in England and Wales with company number 5589712)

Directors:
Peter George Harverson
Riccardo (Richard) Ettore Petti
Timothy Gingell
Ian Edward Kershaw
Robert Daniell Sansom
Oliver Rupert Andrew Scott
Paul Ronald Taylor

Registered Office:
St. Andrew’s House
90 St. Andrew’s Road
Chesterton
Cambridge
Cambridgeshire
CB4 1DL
18 October 2017

Dear Shareholder

Proposed Placing to raise £5.5 million
andNotice of General Meeting
1.
INTRODUCTION
The Company announced on 18 October 2017 a proposed placing of 17,187,500 new Ordinary Sharesat 32 pence per Placing Share to raise £5.5 million (approximately £5.15 million net of expenses) inorder to support growth plans and 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 6
below, including Shareholder’s 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 10:00 am on 3 November
2017.
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.
CURRENT TRADING OVERVIEW
In its 2016 full year results, Ubisense set out a clear software-focused strategy designed to drive sales
and improve margins across its two product lines: myWorld and RTLS SmartSpace.
Over the course of 2017, the Group has made significant progress implementing its strategy by:–

Focusing on developing scalable software offerings which leverage IIoT (industrial internet ofthings) technology to deliver strong customer Return on Investment “RoI”.

–

Targeting a more focused addressable market consisting of leading global manufacturers and utility
companies in North America, Europe and Asia.

–

Increased focus on selling products relating to the Group’s own IP leading to improved grossmargins.

–

Strengthening its organisation within both divisions with new key appointments.

816860 GOODWOOD pp01-20 18/10/2017 16:05 Page 9

Following these changes, the Company reported a strong set of financial results for the six months
ended 30 June 2017, delivering a revenue increase of 16 per cent. on the prior period, within whichrevenue generated by the Group’s own products increased by 58 per cent.
In addition, the Company has recently announced three significant new contract wins, each worth over
£1 million in revenue:–

a new myWorld contract with a telecoms customer in June–a major strategic sale of its RTLS SmartSpace software platform with a North American aerospaceand defence contractor in July–an order for substantial expansion to one of the largest RTLS SmartSpace installations in Europe
was received in September

as well as securing business in new markets such as Turkey and Thailand.
3.
REASONS FOR THE PLACINGThe Directors believe that the dynamics of the Group’s two key market verticals are strong, positioning
Ubisense to capitalise on significant projected increases in spending relating to two themes:–

Industry 4.0, under which $0.9 trillion is forecast to be invested in smart production technology overthe next five years–

global fibre-to-the-home (“FTTH”) investments, which present significant operational challenges totelecommunications operators.

These strong dynamics are evident in the Group’s recent contract wins.
As such, the Directors anticipate further wins in both its platforms to continue to deliver growth ofrevenues relating to its own products, with a continued increase in the pipeline of enterprise softwaretransactions at higher margins.
As previously announced, the Company expects to see a run-off of historic contracted maintenance anddevelopment services related to third party Geospatial products over the next 12-18 months. Whilst thiswill provide a headwind to revenues, gross margins are expected to improve as its enterprise softwaresales continue to grow.
The Directors believe that in order to capitalise on its market success, and as the Company moves awayfrom third party services revenue, the Company should invest in its sales and pre-sales capacity to drive
growth in revenues and margin from its own products. In addition, it also intends to invest in both its
software and hardware products to maintain market competitiveness.
4.
IMPACT OF THE PLACING ON THE COMPANY’S BANK FACILITIESCurrently the Company’s ability to invest is curtailed by an operating cash flow covenant in its existingbank facilities. As well as providing cash to invest in future growth, the net proceeds of the Placing
will strengthen the Company’s balance sheet.
This anticipated balance sheet strengthening has allowed the Company to negotiate with its lendingbank, with which it has agreed in principle to secure an improved covenant conditional on completionof the Placing and certain re-phasing of the loan amortisation payments. The revised covenant and thenet proceeds are expected to give the Company further flexibility to drive its growth strategy.
5.
USE OF THE PROCEEDS FROM THE PLACING
The Company intends to raise gross proceeds of £5.5 million pursuant to the Placing, equivalent toapproximately £5.15 million net of expenses, which is intended to be used as follows:(i)£1.5 million to invest in the Group’s go-to-market capacity by recruiting significantly more quota
carrying sales and pre-sales personnel, and to invest in targeted marketing capacity;(ii)£0.5 million to invest in product development to recruit additional software developers to accelerate
product modularisation, documentation and to improve the channel readiness of its products;916860 GOODWOOD pp01-20 18/10/2017 16:05 Page 10(iii)£0.5 million to re-engineer its RTLS hardware, re-designing it in order to target a unit cost reduction
to maintain market competitiveness; and(iv)

the balance being used to strengthen the Company’s balance sheet.

6.
DETAILS OF THE PLACING AND THE PLACING AGREEMENTThe Placing
The Placing Shares will represent approximately 23.5 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
6 November 2017 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 6 November 2017.
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 6 November 2017.
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
6 November 2017 (or such later time and date as the Company and Numis may agree, not being
later than 8:30 am on 27 November 2017).

Participation of the Directors and other related parties
Certain of the Directors and Kestrel Partners LLP (which has a representative on the Board) have,conditional on Admission, participated in the Placing by subscribing for an aggregate of 6,081,250
Placing Shares as set out below:

Robert SansomPeter Harverson
Paul Taylor
Richard Petti
Timothy Gingell
Kestrel Partners LLP (Oliver Scott)Number of
Placing
SharesNumber of
Ordinary Shares
to be held
on Admission

Percentage of
Enlarged Share
Capital1,250,000
78,12578,12578,12546,8754,550,000

6,235,899
223,286
191,459
78,12586,875
20,645,493

8.5%
0.3%
0.3%
0.1%
0.1%
28.3%

Kestrel Partners LLP (“Kestrel”) is a related party (as defined by the AIM Rules) of the Company byvirtue of its status as a substantial shareholder in the Company and also due to Oliver Scott, a NonExecutive Director of the Company, being a partner of, and holding a beneficial interest in, Kestrel.
In addition Columbia Threadneedle Investments (“Columbia Threadneedle”) has agreed to subscribe for
3,000,000 Placing Shares pursuant to the Placing. Columbia Threadneedle is a related party of theCompany by virtue of its status as a substantial shareholder in the Company.
The subscriptions by Robert Sansom, Peter Harverson, Paul Taylor, Richard Petti, Timothy Gingell,
Kestrel and Columbia Threadneedle are all related party transactions under the AIM Rules.
Taking into account the related party transactions noted above, the independent director, being Ian
Kershaw, confirms that he considers, having consulted with the Company’s nominated adviser, Numis,
the terms of the Placing are fair and reasonable insofar as the Company’s shareholders are concerned.

1016860 GOODWOOD pp01-20 18/10/2017 16:05 Page 11

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.
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 am on 6 November 2017(or such later date as the Company and Numis may agree, but not later than 8:30 am on 27 November2017), (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.
7.
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 10:00 am on 3 November 2017 is set out at the end of this document. The business tobe considered at the General Meeting is set out in the Notice together with the explanatory notes toeach resolution below.
At the annual general meeting of the Company held on 7 April 2017, Shareholders passed resolutions
in order to, amongst other things, grant the Directors authority to allot equity securities up to a
maximum nominal value of £55,880. This authority is insufficient to allow the placing of the Placing
Shares to proceed without further shareholder approval. Accordingly, at the General Meeting, thefollowing 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 toa maximum nominal amount of £343,750 (representing, as at 17 October 2017 (being the latest
practicable date before the publication of this document), approximately 23.5 per cent. of the Existing
Ordinary Shares) being 17,187,500 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

1116860 GOODWOOD pp01-20 18/10/2017 16:05 Page 12

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 respectof 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.
8.
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 in the Form of Proxy as soon as possible and in any event so as to be received byno later than 10:00 am on 1 November 2017. Alternatively, a proxy may be appointed electronically byfollowing the instructions in Note 5 to the Notice. Completion and return of the Form of Proxy or
the electronic appointment of a proxy will not preclude you from attending and voting at the meeting,should you wish to do so.
9.
ADDITIONAL INFORMATIONYour attention is drawn to the Risk Factors set out on pages 13 to 16 of this document.
10.
IMPORTANCE OF THE SHAREHOLDER VOTE
As described in further detail above, the Directors believe that the Group has compelling investment
opportunities to expand its go-to-market capabilities and develop its products. Its ability to invest in
future growth is currently significantly curtailed by its bank covenants, which are based on maintaining
a minimum level of operating cash flow and which follow a profile of continued tightening in futureyears. The Company has agreed in principle with its lending bank, conditional on completion of the
Placing and certain re-phasing of the loan amortisation payments, to loosen the current and future
covenant which, together with the net proceeds of the Placing, will allow the Company to invest as
further described above.
The Directors believe that the Company has sufficient liquidity for its present requirements. However,if the Resolutions are not passed and the Placing does not proceed the Directors will pursue alternative
sources of funding to support the Company’s strategy. Whilst the Company has received indicative
offers, including an advanced proposal cornerstoned by its major shareholder Kestrel, subject to bankand shareholder approval, there can be no guarantee that such additional sources of financing would
be secured. If no additional funding were to be secured, the Directors believe the Group’s growthprospects would be reduced and there would be an increased risk that it will breach its banking
covenants.
11.
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 and non-beneficial holdings of Ordinary Shares amounting to, in aggregate,
21,379,887 Ordinary Shares, representing approximately 38.3 per cent. of the Existing Ordinary Shares.
Yours sincerelyPeter Harverson
Chairman12

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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 Group’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 AND MARKET 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.
The Group faces competitive and strategic risks that are inherent in a rapidly growing emerging market.
Its products are complex and may contain undetected defects when first introduced which could
increase the Group’s costs or reduce revenues. The Group’s success will depend on market acceptanceof the Group’s products.
STAFF RECRUITMENT AND RETENTION
The contribution made by the Company’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.

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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.
Any delay in a customer accepting the Group’s products and/or performance under the relevant
contract or in reselling the Group’s products may lead to the Group not receiving the expected revenues
under the relevant contract either within the timeframes expected by the Group or in full or at all, anyof which may have an adverse effect in the Group’s business and financial results.
Certain of the Group’s legacy contracts related to services on third party products are anticipated to
expire in the next 12 to 18 months and a material proportion are not expected to renew. Whilst the
Directors expect to control the Group’s cost base to mitigate the impact of this transition, it is possiblethat the cost implications will have a more significant impact on the Group’s financial performance
than the Directors currently anticipate.
IMPACT OF IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERSIFRS 15 introduces a number of new concepts and requirements and is applicable from 1 January
2018. The Company is continuing to assess the impact of the first year adoption of IFRS 15.
The Company anticipates that some elements of revenue recognition may be deferred as a result of therequirement to identify when the customer has control over the deliverables provided by the Group.
The Directors believe that the majority of sales orders will be unaffected by the application of
IFRS 15; however, significant contracts which involve multiple performance obligations are being
reviewed in detail. These obligations may include a combination of software, hardware, maintenance &support, and service revenues. Accordingly, the significance of the impact of IFRS 15 is dependent
upon the timing of delivery for significant contracts close to a financial reporting period end.
Additionally, IFRS 15 states that costs incurred in acquiring and fulfilling a customer contract shall bedeferred and recognised as an expense over a period that is consistent with the transfer to the customerof the goods or services. The Directors continue to assess the appropriateness of deferring costs against
specific projects.
COMPETITION
Current and potential competitors may have substantially greater financial, technical and marketing
resources than the Group and so may be better able to compete in the Group’s target market.
GROWTH MANAGEMENT
Further expansion will be required in the future to capitalise on the anticipated increase in demand for
the Group’s products and to offset the anticipated decline in the Group’s services revenue related tothird party products. The Group’s future success will depend, in part, on its ability to manage thisanticipated expansion.
CREDIT
The 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.
INTERNATIONAL TRADE AND FOREIGN EXCHANGE
The Group is a multi-national Group with significant foreign and export operations, creating revenues
and costs denominated in major currencies other than GBP. Volatility in exchange rates will mean that
there may be positive or negative impact on the financial results of the Group. Additional risks exist

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with changes to international trade (including the UK’s referendum result regarding membership of theEuropean Union), which may impact trade tariffs, currency volatility and customer investment plans.
FINANCIAL PROFILE
A majority of the Group’s revenue is derived from a small number of large deals, the timing of which
is not within the control of the Group. Such a profile makes forecasting difficult and changes against
expectations have had and may continue to have a significant impact on the Group’s results,
particularly given the Group’s significant level of operational gearing.
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 be
met. The Group has agreed in principle with its lending bank to amend its operating cash flow
covenant as follows: 2017 – from nil to £2 million negative; 2018 – from £1 million positive to£2 million negative; 2019 – from £1 million positive to £1 million negative. If the operating performanceof the Group is not sufficient to meet its current covenants, or provided its lending bank formalises
the agreement in principle to amend its covenants, the Group would be reliant on the ongoing supportof its lending bank.
INTELLECTUAL PROPERTYThe Group has a number of trade marks registered, and is pursuing further trade mark registrations,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 incertain 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 three years. The Directors, having taken expert advice, believe that the allegationsof infringement made in such communications are unjustified. However, the timeframes under which
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 ina material 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 and the licence is not due to expire until 2025. However, there
can be no guarantee that such third party will adequately maintain such patents and therefore theprotection and benefit afforded to the Company by such 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 alleged15

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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 or of the security related to the Group’s products, throughcyber attacks or otherwise, or failure of the Group’s digital infrastructure, could seriously disrupt theGroup’s operations or those of its customers and result in the loss or misuse of data or sensitive
information, legal or regulatory breaches and potentially legal liability. These could result in significant
costs or have reputational consequences.
The Group continues to invest in assessing its product structure and strategy, enhancing its site
resilience and defences, improving network monitoring and reviewing the incident response processes tomitigate the impact of a security breach.
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.

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NOTICE OF GENERAL MEETING

Ubisense Group plc(Incorporated in England and Wales with company number 5589712)

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 3 November 2017 at 10:00 am 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 18 October 2017 (the “Circular”)) becoming unconditional in all respects (save only
for any conditions dependent on the passing of Resolution 1, Resolution 2 and Admission(as defined in the Circular)) and not being terminated in accordance with its terms, and in addition
to any other authority which may have been given to the directors pursuant to section 551 of theCompanies Act 2006 (the “Act”) prior to the date of the passing of this resolution, the directors be
generally and unconditionally authorised pursuant to section 551 of the Act to exercise all powersof the Company to allot shares in the Company up to an aggregate nominal value of £343,750
pursuant to or in connection with the allotment of up to 17,187,500 new ordinary shares of 2 penceeach in the capital of the Company to such persons as may be entitled in connection with thePlacing (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 empowered pursuant to section 571 of the Act
to allot the shares that are the subject of Resolution 1 for cash, pursuant to the authority of thedirectors 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 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.

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

Timothy Gingell
Company Secretary

18 October 201717

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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,a completed 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 Registrars 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 10:00 am on 1 November 2017. Please notethat any electronic communication sent to us/our registrars in respect of the appointment of a proxy that is found to containa computer 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 10:00 am on 1 November 2017.

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
(as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent isable 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 6:30pm on 1 November 2017 (or, if themeeting is adjourned, 6:30 pm 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.

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