Acquisition and Trading Update

18 May 2018

European Wealth Group

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

Acquisition and Trading Update, Amendment to Syndicated Facilities Agreement and Related Party Transaction

European Wealth Group, the integrated wealth management group, today provides an update on its proposed acquisition of Newbridge Corporation ("Newbridge") and issues a trading update for the year ended 31 December 2017. The Board expects to announce the final results on or around 29 June 2018 and intends (subject to the completion of the acquisition of Newbridge) to change the Company's name to Kingswood Holdings in early July 2018.

Acquisition of Newbridge

On 7 November 2017, the Group announced the Newbridge Acquisition (as defined in the Company's announcement dated 7 November 2017). The deal is pending final approval from FINRA, the US regulator to which Newbridge applied for approval of a change of ownership. FINRA has informed Newbridge and the Board of EWG that it is in the final stages of its internal review process and EWG anticipates that FINRA's review will be completed shortly. EWG continues to work closely with Newbridge on the proposed acquisition and on future plans for a combined business, which the Directors believe would have a positive impact for EWG in terms of market reach in the US, the largest wealth management market globally.

Amendment to Syndicated Facilities Agreement and Related Party Transaction

At the same time as announcing the Acquisition, the Company entered into a facilities agreement with KPI (Nominees) Limited ("Kingswood"), a substantial shareholder in EWG. This was subsequently amended into a syndicated facilities agreement, capable of conversion into ordinary shares of 5p each in the Company ("Ordinary Shares"), as approved by shareholders at an EGM on 29 January 2018 (the "Convertible Facilities").

Regardless of FINRA approval and the completion of the Newbridge Acquisition, the Board of EWG has decided to seek to strengthen the balance sheet now by asking Kingswood to proceed with the conversion of a proportion of the Convertible Facilities. Kingswood will seek to procure syndicatees for these Convertible Facilities on the basis that these syndicatees will immediately convert their portion of the Convertible Facilities in the Company into Ordinary Shares at an anticipated conversion price of 16.5 pence per Ordinary Share (the "Conversion Price") (the "Conversion"). Kingswood has also indicated that it will also convert a part of the Facilities, such that its shareholding in the Company remains at or below 39.65 per cent.

The proposed immediate conversion of the Convertible Facilities has required the Company to enter into an amendment to the Convertible Facilities (the "Facilities Amendment"), and into other applicable documentation, with Kingswood, pursuant to which the terms of the Convertible Facilities will remain in force, save for:

· the Convertible Facilities will no longer terminate on 31 May 2018 should the acquisition of Newbridge not complete, but will continue to be available to the Company until 18 May 2021 for purposes to be agreed. Subsequent drawings under the Convertible Facilities will trigger arrangement and non-utilisation fees calculated on the amounts drawn at the rates previously applicable under the Facilities Agreement, notwithstanding that the acquisition of Newbridge has not completed;

· in the event that the acquisition of Newbridge does complete, the initial nominal consideration of one dollar for the proposed acquisition of KPI US Holdco, Inc will be increased to $3,000,000, based on the confirmation from Kingswood that the Company would no longer need to fund the $3,000,000 of Newbridge related acquisition costs that would have been incurred by KPI US Holdco, Inc (or by its subsidiary KPI Newbridge) and which were to be paid (or reimbursed) by the Company due to the fact that such costs were instead incurred by entities not being acquired by the Company; and

· the Company agrees to pay for certain transaction fees incurred by or on behalf of the Company relating to the acquisition of Newbridge, the sum of which is expected to be approximately $400,000.

The syndication process described above is expected to complete on or around 30 May 2018 and the Company will provide an update in due course. Shareholders should note that there is no guarantee that the syndication or conversion referred to above will complete.

Since KPI currently own 39.65 per cent. of the equity of EWG and has two representatives on the Board of EWG (being Jonathan Massing and Gary Wilder), the Facilities Amendment (and applicable supporting documentation) is a related party transaction pursuant to the AIM Rules. All the Independent Directors consider, having consulted with the Company's nominated adviser, finnCap, that the terms of the Facilities Amendment (and that supporting documentation) are fair and reasonable insofar as the Company's shareholders are concerned.

Trading Update

The Directors anticipate revenue for the year ending 31 December 2017 to be in the region of £10 million (2016: £9.4 million), while AUM grew to £1.74 billion (2016: £1.46 billion). 2017 was a year of significant change for EWG with the repayment of outstanding convertible loan stock in June 2017 and a capital raise in July 2017.

In September 2017, the Board appointed a new Group Chief Executive Officer, Marianne Ismail. Ms Ismail has conducted an extensive strategic review of the operating businesses and put in place a significant number of positive measures to position the Group for growth, to markedly reduce operating costs and to grow AUM and recurring fee income. As a consequence of the repositioning, significant exceptional one off restructuring costs have been incurred, together with expenses incurred in the capital raise and a decision to substantially write-down goodwill, and, as a result, the Group will report a material loss for 2017. During 2018 the Company has already started to see positive benefits derived from the restructuring and cost cutting initiatives.

The Directors remain confident that a restructuring of the business and a strong balance sheet will enable the Group to take advantage of the long-term growth opportunities present in the global wealth management and financial planning market.

The Company expects to announce its full year results on or around 29 June 2018.

For further details, please contact:

European Wealth Group Limited +44 (0)20 7623 2368

Marianne Ismail

Hugo Evans

finnCap Ltd (Nomad and Broker) +44 (0)20 7220 0500

Adrian Hargrave

Anthony Adams

Redleaf Communications (for media) +44 (0)20 3757 6865; [email protected]

Robin Tozer

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014