Final Results

PuriCore plc

("PuriCore" or the "Company" or the "Group")

Final Results for the Year Ended 31 December 2011

PuriCore (LSE: PURI), the water-based clean technology company, today announces its Final Results for the year ended 31 December 2011. PuriCore also separately announces its Interim Management Statement for Q1 2012.

2011 Financial Results

·; Revenue increased 5% (3% at constant currency) to $42.6m (2010: $40.5m)

§ Supermarket Retail revenue up 30% to $19.4m (2010: $14.9m)

§ Endoscopy revenue down 11% (14% at constant currency) to $22.5m (2010: $25.1m)

§ Wound Care revenue up 60% to $0.7m (2010: $0.4m)

·; Operating loss* reduced by 52.4% to $2.2m (2010: $4.2m)

·; EBITDA+ and cash flow positive from operations in Q4

·; Cash of $4.5 million at period end

Business and Operational Highlights

·; Agreement for a two-year extension of the repayment date to 31 December 2013 of £7.95 million in Convertible Loan Notes

·; Secured two debt facilities with Republic Bank totaling for $5.4m to finance Sterilox Fresh System installations

·; Agreement on settlement of claim against Misonix, Inc.

·; Installed base increased by 1,106 Sterilox and FloraFresh Systems during the year to 5,300 as at year end

·; Received confirmation from the US EPA for ActiVita Agriculture System as an on-site generator of fungicidal crop protection

·; Received confirmation for the US EPA for the Aqualox System as an on-site generator of an oil and gas biocide to treat hydraulic fracturing (or frac) water in January 2012

·; A research grant of £500,000 was awarded by the Biotechnology and Biological Sciences Research Council to The University of Oxford to study PuriCore's Activita Agricultural Solution in January 2012

* Excludes non-cash depreciation, amortisation, non-cash stock compensation charges and capitalisation/amortisation of development costs.

+ Earnings before interest, tax, depreciation, and amortisation.

Greg Bosch, Chief Executive Officer, said

"PuriCore achieved both top- and bottom-line improvements in 2011 to drive each business unit to profitability and the Group to EBITDA profitability in the final quarter of the year. For the full year, the Group overcame some market challenges and delivered positive cash flow from operations."

Michael Ashton, Non-Executive Chairman, said:

"PuriCore ended the year by delivering strong results, and the Board remains confident in the Group's potential to deliver sustainable growth. I look forward as Chairman to working with the Board and the management team to continue to grow the company and build shareholder value."

PuriCore will host a conference call for investors and analysts today at 2.00 pm BST, and a recording will be available on the Company's website at www.puricore.com. For details of the call please contact FTI Consulting.

Enquiries:

About PuriCore

PuriCore plc (LSE: PURI) is a water-based clean technology company focused on developing and commercialising proprietary green solutions that safely, effectively and naturally kill infectious pathogens without causing harm to human health or the environment. The Company's products are used in a broad range of markets that depend upon controlling contamination, including food retail and foodservice, medical device disinfection, and wound care. The Company's technologies are proven to be safe, environmentally friendly, and fast acting against a broad range of infectious pathogens, including major public health threats of C.difficile, E.coli, HIV, Human and Animal Influenza (including H1N1 and H5N1), Legionella, MRSA, M.tuberculosis, Norovirus, and Salmonella. PuriCore is headquartered in Malvern, Pennsylvania, with operations in Stafford and Clevedon, UK.

To receive additional information on PuriCore, please visit our website at www.puricore.com, which does not form part of this press release.

Operating & Financial Review

PuriCore achieved its financial goals for 2011, ending the year in a strong position, with robust order flow in the US Supermarket Retail sector, the early indications of a re-initiation of UK National Health Service (NHS) spending in the UK and strong growth in the Wound Care business including initial distribution orders. Q4 full Group sales of $14.3 million, an increase of 39% over Q4 2010, moved PuriCore to group EBITDA profitability for the quarter. Additionally in Q4, each business division was profitable. For the full year, sales reached $42.6 million, an increase of 5% (3% at constant currency) over 2010.

Operations

Supermarket Retail

PuriCore expanded market share with leading US and Canadian retail supermarkets for Sterilox Fresh and FloraFresh Systems. For the full year, sales for Sterilox Fresh and FloraFresh increased 30% to $19.4 million (2010: $14.9 million and installations nearly doubled compared with 2010. Noteworthy sales included full adoption in one regional division and expanded installations for the number-two US supermarket retailer, enterprise-wide contracts with two new leading US supermarket customers, and approximately $5.5 million in year-end orders for Sterilox Fresh and FloraFresh Systems for H1 2012 installations. During the fourth quarter alone, the Supermarket Retail business achieved growth of 148% with $7.3 million in revenue (Q4 2010: $2.9 million), providing a strong foundation for 2012.

The significant increase in installations in 2011 of 1,106 Sterilox Fresh and FloraFresh Systems increases the aggregate total number of Systems sold or leased to date to more than 5,300. PuriCore now has Systems in 19% of the target market stores in the US and Canada. These customers and others in pilot programmes represent 42% of the target market in total.

Endoscopy

The Endoscopy business in the UK improved profitability in 2011 over the prior year despite the reduced sales revenues. The business continued to focus on increasing recurring revenues to reduce the potential impact of capital spending delays by its primary customer, the UK National Health Service (NHS). Significant NHS capital spending delays beginning in April 2011, the fiscal year start for the NHS, resulted in an 11% decrease (14% at a constant currency) in sales (2011: $22.5 million; 2010: $25.1 million) for the year. In addition, public sector spending restrictions led to pressure on capital spending in the Laboratory Clean Air segment of this division. Whilst these purchasing delays contributed to lower than expected sales for the full year, the NHS capital spending landscape improved in Q4 2011. Late in the year, PuriCore was awarded a significant contract valued at £484,000 ($775,000) for the installation of ISIS automatic endoscope reprocessors in the OJEU tender proposal for the Greater Glasgow Health Board to be installed in 2012. Even in light of revenue decreases, PuriCore significantly increased its proportion of the spending that came through the NHS Supply Chain.

The focus on recurring revenues, including rentals and the newly launched PuriSept proprietary disinfectant chemistry, accounted for more than three-quarters of division revenues. In 2011, recurring revenues continued to increase, up 4% to $17.1 million (2010: $16.4 million), accounting for 76% of division sales for the year.

Wound Care

The Wound Care business continues to increase sales organically and through distribution. Revenues for Wound Care (including Dental) increased 60% in 2011 to $0.7 million (2010: $0.4 million), with nearly all growth attributable to the new bottled Vashe Wound Therapy. In late Q4, revenues also included initial shipments to Misonix under the distribution agreement. Q4 sales increased 81% to $0.2 million (Q4 2010: $0.1 million).

PuriCore continued to introduce new size options of its bottled Vashe Wound Therapy and launched a new line of products specifically for instillation applications. These products offer a controlled flow of Vashe solution, addressing increasing prevalence of adjunctive therapies such as ultrasonic debridement and negative-pressure wound therapy.

R&D

PuriCore continued to advance promising new applications of its water-based clean technology in two new industries. In December, PuriCore received confirmation from the US Environmental Protection Agency (EPA) for its ActiVita Agriculture System as a fungicidal crop protection device. Research continues on this potential breakthrough application of PuriCore's technology. In January 2012, the Biotechnology and Biological Sciences Research Council (BBSRC) has awarded a £500,000 research grant to The University of Oxford for the study of its ActiVita Agricultural Solution. The three-year grant will fund research focused on exploring the mode of action of the ActiVita solution on major food crops including wheat, rice, and maize.

In addition, PuriCore is exploring additional R&D opportunities in the oil and gas industry. Early in 2012, the Company received confirmation from the US EPA for its Aqualox System as an oil and gas biocide. The Aqualox System generates on-site a proprietary, environmentally safe biocidal solution formulated for applications including the treatment of hydraulic fracturing (or frac) water, which is used to open deep subterranean natural gas reserves. The Directors believe that Aqualox could be a highly effective biocide that does not damage fracking stimulation fluids and gel agents or cause corrosion. PuriCore will continue work in 2012 to evaluate this application and market opportunity.

Corporate

During the year, PuriCore successfully resolved two corporate issues. In July, the Company announced that it reached a settlement with Misonix following legal action in January 2011 against Misonix, Inc., the seller of the Labcaire business. PuriCore sought damages in excess of £2.1 million for breaches of warranty under the Sale and Purchase Agreement (SPA) in connection with PuriCore's acquisition of Labcaire in August 2009. As part of the settlement, PuriCore is no longer liable for $1 million in commission payments as defined in the SPA, and Misonix reimbursed PuriCore $650,000 towards costs and fees of the litigation. The companies simultaneously agreed to enter into a distribution agreement for a private label version of PuriCore's Wound Care solution for use principally in conjunction with the Misonix line of ultrasonic systems. As part of this agreement, Misonix has agreed either to purchase product or pay a minimum of $2 million in gross margin value over a three-year period to PuriCore's growing Wound Care division.

In addition, PuriCore reached an agreement in December with the requisite majority of holders of the Convertible Loan Notes for a two-year extension of the repayment date, which will now be 31 December 2013. The Convertible Loan Notes, amounting to £7.95 million, were due to be repaid on 31 December 2011, subject to the holders having the right to convert all or part of their holdings into ordinary shares of the Company at a price (following the consolidation of the share capital on 14 June 2010) of 75p per share. There have otherwise been no other changes to the terms of the Convertible Loan Notes. The Company is negotiating additional funding lines and is considering raising further capital.

PuriCore continued to finance installations of its Sterilox Fresh and FloraFresh Systems. In September, the Company successfully secured $1.9 million in debt facilities with Republic Bank for this purpose. This debt facility was repaid and terminated from effective 15 December 2011. In December, PuriCore secured an additional $3.5 million to finance Sterilox Fresh and FloraFresh System installations.

Financial Report

Income Statement

PuriCore increased sales in 2011 with revenues of $42.6 million, an increase of 5% (3% at constant currency) over 2010 ($40.5 million). This growth was driven by strong year-end sales, moving all business divisions to profitability, and moving the business as a whole to EBITDA profitability in the fourth quarter.

The gross profit margin for 2011 was 29.4% (2010: 33.6%). A change in sales mix, particularly in the UK, with a reduction in capital sales versus prior year drove the decrease. The Company leveraged operating expense reductions, which improved the Group's operating loss to $6.7 million (2010: $8.2 million). Operating loss, excluding non-cash depreciation, amortisation, non-cash stock compensation charges, and capitalisation/amortisation of development costs, improved to $2.2 million (2010: $4.2 million).

Operating Expense Controls

During the period, PuriCore remained focused on reducing operating expenses, resulting in further reductions again this year. Net of depreciation, amortisation, and non-cash stock compensation, operating expenses decreased 17.3% to $14.7 million (2010: $17.8 million). Operating expenses - comprising sales and marketing, research and development (R&D), and general and administrative expenses - decreased 11.9% to $19.2 million (2010: $21.8 million). Sales and marketing expenses in 2011 totalled $4.6 million (2010: $5.7 million), a decrease of 20.3%. General and administrative expenses in 2011 totalled $10.2 million compared with $11.2 million in 2010, driven by lower cost expenditures, offset by $0.9 million of costs related to the potential sale of endoscopy business. R&D costs for the year decreased 9.6% to $4.4 million (2010: $4.9 million). Net of amortisation of capitalised development costs, R&D costs decreased 9.8%. PuriCore continues to decrease cash expenditures, appropriately reflecting the Company being predominantly in a commercialisation phase and focusing its investments in core areas. The Company remains focused on investment in engineering, clinical development, chemistry, and microbiology for existing product support and projects with near-term revenue and the greatest potential for being cash flow positive.

Balance Sheet and Cash Flow

As at 31 December 2011, cash and cash equivalents were $4.5 million (as at 31 December 2010: $5.2 million including restricted cash of $1.2 million).

PuriCore successfully completed several key financing arrangements in 2011. In December, PuriCore reached an agreement with the requisite majority of holders of the Convertible Loan Notes for a two-year extension of the repayment date, which will now be 31 December 2013. PuriCore continued to finance installations of its Sterilox Fresh and FloraFresh Systems, completing two successful debt financings with Republic Bank during the period: $1.9 million in September (which was repaid and terminated as at 15 December 2011), and an additional $3.5 million in December.

Outlook

PuriCore's business mix has been designed to deliver both robust growth and cash generation but continues to maintain a prudent approach to costs in a business that is highly dependent upon NHS spending in the UK and the strength of consumer spending that drives the US supermarket retail market.

In the Supermarket Retail sector, a strong sales pipeline of current and new customers at the end of 2011 is expected to deliver top-line growth and market share expansion. In the UK, the Board is cautiously optimistic regarding 2012 as this business remains focused on rigid cost controls and margins whilst continuing to increase recurring revenues. In the Wound Care market, PuriCore will aim to further grow sales and focus on business development partnerships, extending the Company's market reach to drive rapid growth. In addition, PuriCore will continue its promising R&D efforts in agriculture, and it is our intention to commence partnership discussions by year end.

Although prospects for profitability of the Group are not certain for the full year, the Board will continue to drive margins and remains confident of the Company's potential to deliver sustainable top-line growth across all its businesses.

We wish to thank the PuriCore team in the US and the UK for their outstanding work, diligence, and determination to continue to improve PuriCore's top- and bottom-line results. In addition, we thank our shareholders for their continued commitment to the Company and their belief in the potential of PuriCore's technology.

26 April 2012

Consolidated Statement of Comprehensive Income

For the Year Ended 31 December 2011

Consolidated Statement of Changes in Equity

For the Year Ended 31 December 2011

Consolidated Statement of Financial Position

At 31 December 2011

The consolidated financial statements and related notes were approved by the Board of Directors and authorised for issue on 26 April 2012 and were signed on its behalf by:

Gregory T. Bosch

Chief Executive Officer

Consolidated Statement of Cash Flows 

For the Year Ended 31 December 2011

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS

The Directors are responsible for preparing the Annual Report and the group and parent company financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare group and parent company financial statements for each financial year. Under that law they are required to prepare the group financial statements in accordance with

IFRSs as adopted by the EU and applicable law and have elected to prepare the parent company financial statements on the same basis.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and parent company and of their profit or loss for that period. In preparing each of the group and parent company financial statements, the Directors are required to:

·; select suitable accounting policies and then apply them consistently;

·; make judgements and estimates that are reasonable and prudent;

·; state whether they have been prepared in accordance with IFRSs as adopted by the EU; and

·; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the parent company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company's transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report, and Corporate Governance Statement that comply with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

RESPONSIBILITY STATEMENT OFTHE DIRECTORS IN RESPECT OF THE ANNUAL FINANCIAL REPORT

Each of the Directors, whose names and functions are listed below, confirms that, to the best of his knowledge:

a) the financial statements have been prepared in accordance with the applicable law and International Financial Reporting Standards as adopted by the EU and give a true and fair view of the assets, liabilities, financial position, and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

b) the review of the business includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

Joseph William Birkett

Chairman of the Audit Committee

26 April 2012

Risks and Uncertainties

Risk management is seen as an important element of internal control and is used to mitigate the Group's exposure to such risks.

The risks included here are not exhaustive. The Group operates in a competitive and rapidly changing environment. New risks emerge periodically, and it is not possible to predict all such risk factors for the Group's business or the extent to which any factor or combination of factors might cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

The Group is reliant on its core technology and development.

The Group is reliant on its core technology platform and is subject to competition from companies that might have existing products in development or commercially available that are more advanced and/or less expensive. The Group manages and endeavours to mitigate these concerns through its hiring of employees and advisers who assist with product development, quality, engineering, business strategy, marketing, filing of patents, and management and protection of intellectual property.

The Group's products are subject to US, European, and other legislative and regulatory requirements.

If the Group or its third-party manufacturers fail to satisfy legislative and regulatory requirements, this could result in the imposition of sanctions on the Group, including fines, injunctions, civil penalties, import bans, delays, suspension or withdrawal of approvals, license revocation, seizures or recall of products, operating restrictions, and criminal prosecutions, any of which could materially harm the Group's product development and commercialisation efforts. The Group manages and endeavours to mitigate these risks through effective management and staffing of appropriate quality, regulatory, legal, and engineering personnel who confer with appropriate professional advisers on an ongoing basis.

The Group is dependent on a limited number of sub-contract manufacturers to assemble many of its products and to produce certain components within these products.

Although the Group expects that its products will be manufactured, assembled, and tested as is currently done for the foreseeable future, there is no guarantee that its sub-contractors will continue to devote adequate resources to the production of the Group's devices and components or deliver sufficient quantities of finished devices on a timely basis or at an acceptable cost or to enable the Group to maintain sufficient inventory to meet customer demand. The Group manages and endeavours to mitigate these concerns by maintaining effective and positive communication and relationships with its existing sub-contract manufacturers and regularly considers dual sourcing and potential alternate sub-contract manufacturers. Furthermore, the Group continues to strengthen its operations regarding supply chain, order management, and quality control and to assess potential related risks.

The Group is dependent on key personnel.

Competition for qualified employees and personnel in scientific research and life science industries is intense and there are a limited number of persons with knowledge appropriate to, and experience within, such industries. Identifying personnel with the necessary skills and attributes required to enable the Group to carry out its strategy is difficult and can often entail a lengthy search process. There is no guarantee, therefore, that the Group will be successful in attracting and retaining qualified executives, scientists, and other personnel. In addition, there can be no assurance that the Group will continue to attract persons of sufficient and appropriate experience to serve as executives and Directors. The loss of the services of key personnel or the inability to attract additional qualified personnel could have a material adverse effect on the business, financial condition, results of operations, and cash flows of the Group. The Group endeavours to mitigate this risk by implementing personnel retention strategies.

The Group is subject to inventory risks because it builds its Systems based on forecasts and may continue to place purchase orders with sub-contract manufacturers before orders from its customers are received.

The Group develops forecasts and usually places purchase orders with its sub-contractors for its devices before the Group receives purchase orders from its own customers. This limits the Group's ability to react to fluctuations in demand for its devices and may cause the Group to have a shortage or an excess at any given time. As a result of the variations in lead time for ordering and obtaining the components and services required to build the devices, the Group may from time to time be unable to meet customer orders, which could have a material adverse effect on the Group's business, financial condition, and results of operations. The Group endeavours to mitigate these risks by negotiating cancellation terms in supplier contracts and by drawing down in appropriate increments on blanket purchase orders so as to limit inventory being carried.

The Group's future operating results will be highly dependent on how well it manages the expansion of its operations.

The Group has experienced, and may continue to experience, periods of rapid growth in the number of its customers and the number of systems that it installs. This, in turn, would likely necessitate an increase in the number of the Group's employees, its operating and financial systems, sub-contract manufacturers, and the geographic scope of its operations. This growth and expansion may place a significant strain on the Group's financial, management, or other resources. To manage its expanded operations effectively, the Group will be required to continue to improve its existing operational, financial, and management processes and to implement new systems.

RISKS RELATING TO FUNDING

The Group may not be able to satisfy the £7.95 million Convertible Loan Notes, which are due as at 31 December 2013.

The Group issued £7.95 million in Convertible Loan Notes on 14 June 2010, which were due to be repaid or converted to shares, at a price of 75 p per share, as at 31 December 2011. The Group announced on

13 December 2011 that it had reached an agreement with the requisite majority of note holders for a two-year extension of the repayment date, which will now be 31 December 2013. The Group also announced that it is currently negotiating additional funding lines and is considering raising further capital and that any issue of new equity may be undertaken in conjunction with a renegotiation of the Convertible Loan Notes to include

a reduction in the conversion price (if appropriate) to reflect market conditions and to provide an incentive for early conversion. The Group may not be able to provide sufficient incentive or the market conditions may not be advantageous to result in a conversion of the Notes to shares. Under these circumstances, the Group may not have sufficient cash to repay the Notes.

The Group might be unable to raise future funding should the need arise.

The Directors have prepared cash flow forecasts to 31 December 2013. These forecasts make a number of assumptions, the most significant of which the extension of the June 2012 bank line of credit to June 2013 on similar terms, the release of commitments on approximately $0.5 million of the $1.0 million invested cash, and the projected level of future revenue from the business. The forecasts include planned repayments of the bank loans and other loan notes in full as they fall due and assumes that all of the convertible loan notes will be converted into shares.

RISKS RELATING TO THE GROUP'S FINANCIAL POSITION

The Group is operating during a period of significant macro global economic pressures.

The Group recognises that the global economic dynamics have changed greatly over the past few years and that continuing economic pressures have contributed to slower revenue growth. The Group endeavours to mitigate this concern by monitoring, managing, and adjusting all costs across the business and by ensuring its cash deposits are conservatively managed and invested. Further, the Directors believe that the cost savings provided to customers by PuriCore's products will continue to be an effective value proposition for its core markets.

Failure to use each System for its full budgeted lifespan could cause the Group to incur losses.

As at 31 December 2011, the Group had approximately 37% of its installed US System base on lease contracts. The Group depreciates each leased US System over an operating life of five years. If a rental contract is terminated by the customer prior to the term of the lease agreement and/or the Group fails to gain customer renewals or find for any reason an alternative customer for such System, it could result in the Group writing off the remaining net book value of the System. Furthermore, if a System becomes incapable of operating to the required standard before the expiry of its accounted lifespan and it is not possible to or it is prohibitively expensive to remedy the problem, the Group will lose revenue in respect of such a device. In the event that such a device had been used as security in conjunction with a third-party financing arrangement, the Group would still have the obligation to service the financing arrangement without having the associated benefits of the rental income. Any of these factors could result in the Group incurring losses. The Group manages and endeavours to mitigate this concern by continuously monitoring the performance of existing Systems, providing appropriate service and focusing on the quality of both the manufacture and the design of its Systems.

The Group relies on third-party vendor financing to fund part of the capital costs of its equipment.

PuriCore's sales are principally in two forms: capital purchases and lease agreements. If the Group loses the benefit of its third-party finance relationships, it might not be able to source alternative financing on similar terms. Furthermore, if the Group chooses to fund the costs of its equipment itself, it would result in considerable levels of cash out-flow, which might in turn have a material adverse effect on the Group's business, financial condition, and results of operations. The Group manages and endeavours to mitigate this concern by targeting high quality customers including the leading US and Canadian retail supermarket chains to assure third-party financiers of the economic stability of the Group's customers, by continuously evaluating alternate financial arrangements and business partners, and by engaging in discussions and networking with other financial providers and advisers.

The Group has significant lease and service contracts with several customers.

The Group expanded its Supermarket Retail customer base from 2005 through 2011 and it has entered into lease contracts and service agreements that are significant in nature with several customers. Failure to deliver products and/or service to such customers or termination by any of these customers of its agreements with the Group could have a material adverse effect on the Group's results or operations or financial condition.

The Group is exposed to foreign exchange fluctuations.

As a consequence of the international nature of its business, the Group is exposed to risks associated with foreign currency exchange rates. The Group's corporate headquarters are located in the US and it presents financial statements in US dollars. The Group expects its future revenues to be denominated in several currencies, in particular the US dollar, Euro, and pounds sterling. Therefore, movements in foreign currency exchange rates may have an impact on the Group's reported results of operations, financial position, and cash flows that are not necessarily related to the Group's results of operations. To date, the Group has not entered into any currency transactions to hedge its fixed costs exposures nor has it any plans to do so, although it may enter into such transactions in the future. However, the Group cannot assure investors that such hedging transactions will be available at a reasonable cost or will be successful in reducing these exposures. Any losses incurred in connection with such hedging transactions could have a material adverse effect on the Group's business, financial condition and results of operations.

RISKS RELATING TO INTELLECTUAL PROPERTY AND LITIGATION

The Group might be unable to protect adequately its intellectual property, proprietary information, and know-how or be subject to third-party infringement actions.

The Group is the owner of intellectual property rights, including patents, trademarks, designs, copyright, trade secrets, unpatented proprietary technology, processes, know-how, and other confidential information. Whilst it might apply from time to time to register additional patents, trademarks, designs, and copyright and take reasonable steps to protect its proprietary information, there can be no assurance that any of its intellectual property rights will not be successfully challenged or that third parties will not misappropriate such secrets and information. The Group relies to a great extent on its patents and know-how and whilst no valid challenges have previously been made, there is no guarantee that they will not be made in the future. Any misappropriation or challenge or failure to obtain a license could have a material adverse effect on the Group's business, financial condition, and results of operations and might require it to engage in litigation. The Group manages and endeavours to mitigate these risks by implementing appropriate ongoing legal and managerial oversight of the intellectual property portfolio, by utilising confidentiality agreements with customers, suppliers, and employees, and by working with advisers.

Basis of Preparation

PuriCore plc (the "Company") is incorporated in the UK. PuriCore, Inc., (a US subsidiary) is incorporated under the laws of Delaware in the USA. The Group financial statements were authorised for issue by the Board of Directors on 26 April 2012. European Union law (EULAW) (IAS Regulation EC 1606/2002) requires that the financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the EU (Adopted IFRSs). The financial statements have been prepared on the basis of the recognition and measurement requirements of Adopted IFRSs that are endorsed by the EU and effective as at 31 December 2011.

The financial statements are presented in US dollars (USD), rounded to the nearest dollar. The USD has been chosen as the presentational currency as the Group headquarters are located in the US and a significant portion of the Group's revenue and expenses are denominated in USD.

Some asset and liability amounts reported in the accounts are based on management estimates and assumptions. There is therefore a risk of significant changes to the carrying amounts for these assets and liabilities within the next financial year. Management regularly reviews the estimates and assumptions that drive key financial calculations and disclosures. Key risks are considered in these calculations, where necessary.

The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 December 2011 or 31 December 2010 but is derived from those accounts. Statutory accounts for the year ended 31 December 2010 have been delivered to the Registrar of Companies and those for 2011 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis of matter for 2011 and for 2010 did include a reference to matters to which the auditor drew attention by way of emphasis of matter. For 2010, it drew attention to a material uncertainty in relation to the going concern of the Group for 2010 and (iii) did not contain a statement under section 498 (2) of (3) of the Companies Act 2006. The results for the year ended 31 December 2011 were approved by the Board of Directors on 26 April 2012 and are audited.

Going Concern

The financial statements have been prepared on a going concern basis, which the Directors believe to be appropriate for the following reasons.

The Group meets its day to day working capital requirements through cash balances and external funding facilities. The cash balance was $4.5 million at 31 December 2011 and $6.3 million at 31 March 2012. The external funding facilities include bank loans and loan notes secured on the Group's leased assets and convertible loan notes. The outstanding loans and borrowings had a balance of $16.4 million at 31 December 2011 with $0.6 million repayable in equal monthly installments over the period to September 2012, $0.2 million repayable in equal monthly installments over the period to December 2012, $0.8 million repayable in equal monthly installments over the period to April 2013, $0.5 million repayable in equal annual installments over the period to August 2013, $1.0 million repayable by June 2012, and $1.0 million repayable by September 2012. The convertible loan notes, totalling $12.3 million, are repayable on 31 December 2013 if not already converted.

The Directors have prepared cash flow forecasts to 31 December 2013. These forecasts make a number of assumptions, the most significant of which relate to the level of revenue growth, the extension of the June 2012 bank line of credit to June 2013 on similar terms, and the release of the commitments on approximately $0.5 million of the $1.0 million invested cash in April 2012. The forecasts include planned repayments of the bank loans and other loan notes in full as they fall due. The Directors have entered into discussions with the bank to secure these additional facilities and whilst these discussions have not yet been formally completed, the Directors are confident that these facilities will be extended on similar terms.

If these facilities are extended then the base case cash flow forecasts show that the Group will be able to continue to operate within its available facilities throughout the period to 31 December 2013. The Directors have prepared a reasonably possible downside sensitivity to the base case forecasts, which shows that the Group would have a cash requirement of $0.5 million in March 2013, before returning to a positive cash position in April 2013 and remaining in an increasingly cash positive position throughout the period to November 2013. In these circumstances the Directors have identified several mitigating factors that they could implement in order to continue to operate within their available facilities. These factors include, but are not limited to, stretching of the working capital cycle, utilisation of a currently undrawn £200,000 overdraft facility, reducing the level of discretionary overhead and capital expenditure and procuring a sale and leaseback of certain fixed assets.

On the basis that the Group is able to procure the extension to the June 2012 bank line of credit and the release of the commitments on approximately $0.5 million of the $1.0 million invested cash, the Directors consider that the Group will continue to operate with sufficient funding for at least 12 months from the date of approval of these financial statements. However, the Directors acknowledge that there can be no certainty in relation to these matters.

In the medium-term, the Directors intend to expand the US operations to encompass new markets, in order to achieve the critical mass required to become cash positive. This will entail developing new applications for PuriCore Systems and penetrating those related markets.

The Directors have concluded that the ability to generate the forecast revenue growth, the ability to secure the extension to the June 2012 bank line of credit and the ability to secure the release of the commitments on approximately $0.5 million of the $1.0 million invested cash do not represent material uncertainties that may cast significant doubt on the Group's and the Company's ability to continue to operate as a going concern. The financial statements do not contain any adjustments that would result from the basis of preparation being inappropriate.

Restatement of 2010 Results

At the prior year end, the Board had taken the decision to dispose of the PuriCore International Limited subsidiary and therefore the financial statements for the year ended 31 December 2010 included the results and assets and liabilities of PuriCore International Limited as 'discontinued operations', 'assets held for sale', and 'liabilities held for sale', respectively. After the approval of the 2010 financial statements, the Board decided to abandon the plan to dispose of this subsidiary. Consequently, the 2010 comparative figures have been re-presented to include the results of PuriCore International Limited within continuing operations in the Consolidated Statement of Comprehensive Income and to reflect the assets and liabilities of this subsidiary within the captions to which they relate within the Consolidated Statement of Financial Position. There is no impact on the loss for the year or the net assets of the group as a result of this restatement.

Select Notes to the Financial Statements

For the Year Ended 31 December 2011

NOTE 2 - Segmental Analysis

Primary Reporting Format - Business Segments

(1) Segment result is before interest and tax.

(2) Corporate and unallocated includes approximately $0.9 million of one-time costs related to the abandoned subsidiary disposal plan.

(1) Segment result is before interest and tax.

Information about Geographical Areas

The above analysis is based on the location of the customers.

Products and Services Provided

PuriCore's water-based clean technology equipment and services aim to safely, effectively, and naturally kill infectious pathogens without causing harm to human health or the environment. PuriCore's solutions are produced at a range of concentrations to meet the needs of each application. The solutions are considered reliable, safe, effective, and environmentally friendly. PuriCore's UK business also manufactures a range of automated endoscope reprocessors, storage cabinets, and laboratory clean air equipment as well as provide a full line of endoscope reprocessing suite supplies and services.

PuriCore's products are currently used in the following areas:

UK Endoscopy - PuriCore aims to provide a full suite of equipment, supplies, chemistries, and services required for a compliant endoscope decontamination suite. In addition, this business manufactures and sells a line of laboratory clean air equipment. In 2011, no customers made up more than 10% of the total Endoscopy segment revenue.

US & Canadian Supermarket Retail - Sterilox Solution is an intervention that aims to improve shelf life and home life for fresh produce, and FloraFresh Solution improves the quality of final products whilst decreasing labour costs. In 2011, three customers made up 24%, 19% and 11% each of the total Supermarket Retail segment revenue.

US Wound Care - Vashe Wound Therapy is an FDA-cleared medical device for use in debriding, lubricating, and moistening chronic and acute wounds. PuriCore manufactures and sells a line of bottled Vashe Wound Therapy for use in hospitals, wound care clinics, and burn centres, as well as products under a distribution agreement.

US & UK Dental - Sterilox Solution acts to decontaminate water lines and maintain acceptable water quality levels providing a safer, healthier work environment for patients and staff. Additionally, PuriCore offers a root canal rinse and irrigant in the US.

NOTE 3 - Loss for the Year

Loss for the year has been arrived at after charging/(crediting):

NOTE 5 - Finance Costs

NOTE 8 - Loss per Share

The calculation of basic and diluted earnings per share is based on the following data:

During 2010, the 1 pence ordinary shares of the Company were redesignated as 10 pence ordinary shares on the basis of ten 1 pence ordinary shares being consolidated into one 10 pence ordinary share. The Company's issued share capital at 31 December 2011 consists of 25,292,164 10 pence ordinary shares.

The calculation for diluted loss per share is identical to that used for basic loss per share. This is because the exercise of share options would have the effect of reducing the loss per share and is therefore not dilutive under the terms of IAS 33 'Earnings per share.'

NOTE 14 - Trade and Other Receivables

An analysis of the provision for impairment of receivables is as follows:

The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.

The age profile of trade receivables for the Group at the year end is as follows.

An analysis of trade and other receivables by currency is as follows.

An analysis of the provision for impairment of receivables by geographical location is as follows.

NOTE 15 - Operating Lease Rentals

At the balance sheet date the Group has total outstanding receivables commitments under non-cancellable operating leases, which fall due as follows.

Operating lease receipts represent rentals receivable from customers for the use of certain property, plant, and equipment. Leases have varying terms and renewal rights.

NOTE 16 - Cash and Cash Equivalents

Restricted Cash

The terms of the Promissory Notes are such that $nil (2010: $1,002,577) is held in a separate account, with the funds being utilised for any re-payments that the Group does not satisfy on the promissory notes. The Group has no interest in the holdback account, other than to earn accrued interest at competitive market rates. The holdback agreement sets out a specific payment schedule for when the Group is entitled to receive the funds provided there are no non-payments under the Note and Security Agreement. The current agreement is such that the funds become available to the Group quarterly over the term of the Notes. The Company held £100,000 of restricted cash at 31 December 2010, which served as security for an open line of credit for use in PuriCore International Limited. This restriction was released during 2011. At 31 December 2011, $nil was outstanding on this line of credit. See Loans and Borrowings for further details of the terms and conditions of the promissory notes.

NOTE 17 - Trade and Other Payables

The Directors believe that the carrying amount of trade and other payables approximates their fair value.

NOTE 18 - Loans and Borrowings

This note provides information about the contractual terms of the Group and interest bearing loans and borrowings. For more information about the Group's exposure to interest rate and foreign currency risk see below.

Notes Payable

In August 2009, PuriCore, Inc., borrowed $2,067,795 in the form of a secured promissory note. The note is payable in

37 monthly instalments beginning September 2009, bears interest at a rate of 5.9%, and is secured by leased equipment (and related payments). Monthly payments on this note are aligned with the payments due to PuriCore, Inc., for the leased equipment. As at 31 December 2011, $555,694 (2010: $1,254,138) was outstanding on this note.

In December 2009, PuriCore, Inc., borrowed $659,308 in the form of a secured promissory note. The note is payable in 36 monthly instalments beginning January 2010, bears interest at a rate of 6.0%, and is secured by leased equipment (and related payments). Monthly payments on this note are aligned with the payments due to PuriCore, Inc., for the leased equipment. As at 31 December 2011, $232,458 (2010: $451,412) was outstanding on this note.

In April 2010, PuriCore, Inc., borrowed $1,770,363 in the form of a secured promissory note. The note is payable in 36 monthly instalments beginning May 2010, bears interest at a rate of 6.0%, and is secured by leased equipment (and related payments). Monthly payments on this note are aligned with the payments due to PuriCore, Inc., for the leased equipment. As at 31 December 2011, $826,176 (2010: $1,403,951) was outstanding on this note.

In December 2010, PuriCore, Inc. entered into a $1,000,000 secured line of credit facility. The line of credit bears interest at the greater of 4% and prime rate +1%, and it expired on 30 June 2011. It was secured by specific customer receivables. At 31 December 2011, this line of credit had been closed.

In April 2011, PuriCore, Inc. entered into a $4,000,000 line of credit facility. The line of credit bears interest at 12-20%, and it expires on 30 September 2012. Warrants in the amount of 400,000 were issued at the signing of this facility. There is a potential further 1 million warrants to be issued based on amounts drawn down under this facility. The warrants are exercisable at a price of 52.8 pence per share for a period of three years. At 31 December 2011, $1,000,000 had been drawn down.

In September 2011, PuriCore, Inc. entered into a $1,900,000 secured line of credit facility. The line of credit bears interest at the greater of 4.25% and prime rate +1%, and it expired on 15 December 2011. It was secured by specific customer receivables. At 31 December 2011, this line of credit had been closed.

In December 2011, PuriCore, Inc. entered into a $3,500,000 secured line of credit facility. The line of credit bears interest at the greater of 4% and prime rate +1%, and it expires on 30 June 2012. It was secured by specific customer receivables. At 31 December 2011, $1,000,000 had been drawn down.

Bank Loan

In September 2008, PuriCore, Inc., borrowed $9,737,997 in the form of a secured bank loan. The loan is repayable in 35 monthly instalments beginning November 2008, bears interest at 6.38%, and is secured by leased equipment (and related payments). As at 31 December 2011, $nil (2010: $1,099,251) was outstanding on this loan. The loan was fully paid in January 2011.

Loan Note: Deferred Consideration

On 4 August 2009, PuriCore International Ltd. acquired the entire issued share capital of Labcaire Systems Ltd. In exchange for an upfront payment of $3.6 million in cash and a further $1 million to be paid in equal instalments over the next four years by way of a loan note. The note is payable in four equal instalments of $250,000 per annum on the anniversary date of the acquisition. The note is not interest bearing.

Loan Note: Convertible Debt

In June 2010, PuriCore plc issued £7,950,000 (gross) ($11,981,445) secured Convertible Loan Notes. The Loan Notes are secured by the grant of security over certain intellectual property owned by the Group. The Loan Notes bear interest at a rate of 6% per annum payable on 30 June and 31 December each year. The Convertible Notes were originally repayable on 31 December 2011 subject to a holder having a right to convert all or part of its Convertible Loan Notes into Ordinary Shares at a conversion price of 7.5 pence per Ordinary Share. PuriCore plc announced on 13 December 2011 that it had reached an agreement with the requisite majority of Note holders for a two-year extension of the repayment date, which will now be 31 December 2013. The Convertible Loan Notes may be converted at any time after 1 January 2011. William Birkett, Neil Blewitt, Gregory Bosch, and Christopher Wightman (through an associate), who collectively hold 4% of the Convertible Loan Notes, were related parties of the Company in accordance with Chapter 11 of the Listing Rules for purposes of the negotiation of an extension of the repayment date. No consideration was paid by the Company to any note holders (including these individuals) in connection with the extension of the repayment date of the Convertible Loan Notes to 31 December 2013.

Convertible Notes

The borrowings are repayable as follows:

Finance lease liabilities are payable as follows:

The above leasing arrangements do not contain any restrictive covenants or contingent rents.

NOTE 19 - Financial Instruments

All financial instruments held by the Group, as detailed in this note, are classified as "Loans and Receivables" and "Financial Liabilities Measured at Amortised Cost" under IAS 39. See notes 14, 17, and 18, respectively, for the carrying amount of these financial instruments.

ANALYSIS BY CURRENCY

UNDRAWN COMMITTEED BORROWING FACILITIES

At year end the Group had the following undrawn committed borrowing facilities:

INTEREST BEARING ASSETS AND LIABILITIES

The interest rate exposure of the Group is as follows:

INTEREST BEARING ASSETS AND LIABILITIES

The interest rate exposure of the Company is as follows:

FAIR VALUE OF BORROWINGS AND CASH AND CASH EQUIVALENTS

The comparison of book and fair values of all the Group's financial assets and liabilities at the year end is set out below:

FAIR VALUE OF BORROWINGS AND CASH AND CASH EQUIVALENTS

The comparison of book and fair values of all the Company's financial assets and liabilities at the period end is set out below:

The following methods and assumptions were used in estimating fair values for financial instruments. Short-term borrowings, cash, and deposits approximate to book value due to their short maturities. For bank and other loans, carrying fixed rates of interest, included within long-term borrowings, the repayments which the Group is committed to make have been discounted at the respective interest rates as presented in note 18. These rates are comparable to those applicable to a borrower with a similar credit rating.

FINANCIAL RISK MANAGEMENT

The Group's multi-national operations and debt financing expose it to a variety of financial risks that include the effects of changes in debt market prices, foreign exchange rates, credit risks, liquidity, and interest rates. The Group has in place risk management policies that seek to limit the adverse effects on the financial performance of the Group by using various

instruments and techniques.

Risk management policies have been set by the Board and applied by the Group.

(a) Foreign Exchange Risk

The Group has transactional currency exposures arising from sales or purchases by operating subsidiaries in currencies other than the Group's functional currency. However, the operating subsidiaries require sales be denominated in local currency (US dollars for PuriCore, Inc., and Sterling for PuriCore International, Ltd.) and minimal purchases are made in currency other than the local currency. A 5% change in foreign exchange (USD) would change operating loss from continuing operations by approximately $140,000.

(b) Interest Rate Risk

The Group operates an interest rate policy designed to optimise interest costs and reduce volatility in reported earnings. This policy is achieved by maintaining a target range of fixed and floating rate debt for discrete annual periods, over a defined time horizon. As at 31 December 2011, $4,490,746 (Group), $9,263 (Company) [2010: $5,193,072 (Group), $283,045 (Company)] was on deposit with various banks. A 1% change in interest rates would have a minimal impact on the loss before tax for both the Group and the Company in the current and prior year.

(c) Credit Risk

The Group's financial assets are bank balances and cash, trade and other receivables. The carrying value of these assets represent the Group's maximum exposure to credit risk in relation to financial assets.

The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.

The Group's credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables, estimated by the Group's management based on prior experience and their assessment of the current economic environment. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. The Group continually reviews customer credit limits based on market conditions and historical experience. The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.

Note 14 sets out the impairment provision for credit losses on trade receivables and the ageing analysis of overdue trade receivables. There are no impairment losses recognised on other financial assets.

(d) Liquidity Risk

The Group actively maintains committed facilities that are designed to ensure the Group has sufficient funds for operations and planned expansions. The maturity analysis of financial liabilities is given in note 18 and further discussion in respect of future funding requirements is given in the basis of preparation note to the financial statements.

NOTE 21 - Share-Based Payments

During the year ended 31 December 2011 PuriCore plc operated an Employee Share Option Scheme. The share options granted under the scheme are not subject to performance conditions and have an exercise period of up to 10 years. There are no vesting conditions attached to the options other than completion of service, with options becoming vested at various points in time following the completion of one year's employment with PuriCore plc.

The weighted average share price for the year was $0.60 (2010: $1.31). The options shown above relate to options of PuriCore plc.

The following table summarises the options outstanding for the Group at the year-end.

The above exercise prices have been translated at the exchange rate at the year-end closing date.

The weighted average fair value of the options granted in 2011 was calculated as $0.12 (2010: $0.28) per option according to the Black Scholes option valuation model.

Expected volatility has been estimated using a weighted average of comparable companies and indices relevant to the Group's operations. Awards are considered to be equity settled under IFRS 2. PuriCore plc has recognised total expenses of $69,890 (2010: $347,756) related to Director and employee equity settled share based payment transactions during the year. The cumulative expense of $8,389,268 is reflected in Other Reserves in the Consolidated Statement of Financial Position.

NOTE 25 - Related-Party Transactions

In the ordinary course of business, sales and purchases of goods take place between Group companies. These transactions take place on an arm's length basis. PuriCore International Ltd. charges PuriCore, Inc., for research and development services performed on behalf of the parent. In 2011, that research and development charge was $108,990 (2010: $548,964).

There are no related party transactions between the Company and Group companies.

Payments to key management in the year are disclosed in note 4 to the financial statements.

In 2010 the Group paid Equinox Capital Limited, a company controlled by its then Chairman, Christopher Wightman, fees of £10,000 for administrative services that enable the Executive Directors to have offices in London when they are traveling to meet with current and prospective institutional investors. Services include use of offices, phones, computers, administrative personnel, etc. The Group considers the fees paid to be fair market value for the services rendered. Additionally in 2010, the Company used its Chairman's address as its registered office in the United Kingdom.

As referred to in Note 18, William Birkett, Neil Blewitt, Gregory Bosch, and Christopher Wightman (through an associate) were related parties of the Company in accordance with Chapter 11 of the Listing Rules for purposes of the negotiation of an extension of the repayment date. No consideration was paid by the Company to any note holders (including these individuals) in connection with the extension.

Post Balance Sheet Events

·; The Group received confirmation for the US EPA for the Aqualox System as an on-site generator of an oil and gas biocide to treat hydraulic fracturing (or frac) water.

·; A research grant of £500,000 was awarded by the Biotechnology and Biological Sciences Research Council to The University of Oxford to study PuriCore's Activita Agricultural Solution.

2011 Annual Report Availability

PuriCore's 2011 annual report and accounts will be available in due course on the PuriCore website at www.puricore.com, will be posted to shareholders, and will be available for inspection at the National Storage Mechanism at www.hemscott.com/nsm.do.

Additionally, the report can be viewed at the offices of CMS Cameron McKenna LLP, Mitre House, 160 Aldersdate Street, London EC1A 4DD shortly before and during the Annual General Meeting scheduled to commence at 9am on 12 June 2012.

Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Company's current expectations, estimates, and projections about its industry; its beliefs; and assumptions. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the Company's control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The Company cautions shareholders and prospective shareholders not to place undue reliance on these forward-looking statements, which reflect the view of the Company only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Company will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances, or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.