Placing to raise £2,500,000, and Notice of GM

Energetix Group plc

("Energetix" or "the Group")

Placing to raise £2,500,000 and Notice of General Meeting

Energetix Group, (AIM:EGX), a group of companies with three cost-effective products (Pnu Power, Genlec and VPhase), is pleased to announce that it has placed 10,000,000 new ordinary shares of 5p each ("Ordinary Shares") at a price of 25p per share to raise gross proceeds of £2,500,000 (the "Placing"), which was arranged by Ambrian Partners Limited ("Ambrian") with institutional investors. The Placing is conditional upon, amongst other things, the passing of a special resolution by the members of the Company at a General Meeting of the Company called for 9.00 am on Monday 14 March 2011 at Castlefield House, Liverpool Road, Castlefield, Manchester M3 4SB.

Reasons for the Placing

The net proceeds of the Placing will be used to accelerate the commercial development of both Genlec and Pnu Power, and for general working capital purposes. 

VPhase has completed the transition to an associate company, which is fully funded and has an independent management team with significant commercialisation and sales and marketing experience at senior level. VPhase is now an asset worth approximately £8.4 million on Energetix Group's balance sheet, and it is anticipated that this asset has the potential to grow as VPhase increases its commercial activities. 

As outlined in the Chairman's interim statement for the six months ended 30 June 2010, progress in bringing new technology developments to commercialisation can be delayed by technical hurdles and take up of the product by large corporate customers can be a slow process.

Whilst the development of the Group's Genlec microCHP product has taken longer than anticipated, Energetix is pleased that the first Kingston boilers are operating in staff homes, and is confident that the major technical hurdles have now been overcome. The development of the Genlec product is now predominantly complete with workshop testing demonstrating performance in excess of specification. Sales of demonstration and testing units have commenced. CE certification of the boiler has been obtained and initial units have been installed in employee homes. It is expected that CE certification of the power module will follow in the first quarter of 2011. Genlec will carry on field testing whilst continuing market engagement through multiple channel partners to continue commercial sales and establish a basis for growth from 2012.

Energetix is continuing to work with the major customers it has in the Pnu Power product range, and believes that these relationships will deliver volume orders. In addition the Group is pleased that the Pnu Power range has been extended to include the DC 100 product that can now meet the demand of the rapidly growing Green Data Centre market. The net proceeds of the Placing will allow the Company to put in place sales and marketing leadership to drive commercialisation of the Pnu Power business.

Following the Placing, the Company will have sufficient working capital for at least the next 12 months.

Details of the Placing

The Company has entered into a conditional placing agreement with Ambrian, under which Ambrian has agreed to use its reasonable endeavours to procure placees for up to 10,000,000 new Ordinary Shares of 5p each ("Placing Shares") at a price of 25p per share ("Placing Price"). The Placing Price represents a discount of 14 per cent. to the official closing market price of 29p of an existing Ordinary Share on 21 February 2011, being the latest practicable date prior to the release of this announcement. Assuming the maximum number of Placing Shares are issued pursuant to the Placing, such shares will represent 15.35 per cent. of the Company's enlarged issued share capital and following the Placing, the Company will have a total of 65,155,008 Ordinary Shares in issue.

The Placing Shares are being offered to existing and new institutional and other investors subject to the terms and conditions set out in the placing letters which have been sent out by Ambrian to placees. The Placing is not being underwritten.

General Meeting

A circular containing a notice of a General Meeting of the Company, convened for 9.00 am on 14 March 2011 at Castlefield House, Liverpool Road, Castlefield, Manchester M3 4SB, will today be posted to shareholders of the Company outlining the terms of the Placing and seeking authority from shareholders to exclude statutory pre-emption rights for shareholders. This will allow the Directors to allot the Placing Shares in connection with the Placing ("the Resolution").

The Directors unanimously recommend that shareholders vote in favour of the Resolution to be proposed at the General Meeting as they intend to do so in respect of the 14,082,828 ordinary shares beneficially held by them, representing approximately 25.53 per cent. of the entire issued share capital of the Company.

A copy of the circular will also be available from the Company's website at www.energetixgroup.com.

Settlement and dealings

Application has been made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will occur, and dealings in the Placing Shares will begin, at 8.00 am on 15 March 2011. The Placing Shares will, when issued, rank pari passu in all respects with the existing Ordinary Shares in issue.

Commenting on the placing, Adrian Hutchings, Chief Executive Officer said: 

"This funding should enable the Company to deliver the significant value we believe exists in both the Genlec and Pnu Power businesses.

"VPhase has already transitioned to a stand alone business, Pnu Power has completed the development of a range of products and this funding will enable us to provide Pnu Power with sales and marketing leadership. Genlec has predominately completed product development of the Kingston mCHP boiler and this funding will enable us to undertake the necessary field trials before commercial sales of this product. I am pleased that new and existing investors supported this placement. "

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About Energetix Group plc

Energetix Group plc has three businesses with cost-effective products to meet the growing global demand for alternative energy. With a focus on distributed generation, energy storage and energy efficiency, the Energetix businesses are:

·; Energetix (Pnu) Power Limited - compressed-air back-up power;

·; Energetix Genlec Limited - distributed generation in the home; and

·; VPhase plc - domestic energy efficiency.(c.43% owned by the Group)

Energetix's strategy is to create products based on robust engineering principles, regularly utilising existing mass-produced components configured in a novel and patentable way. Avoiding cutting-edge science has enabled the Group's businesses to de-risk the new product development process which in turn reduces development time and costs. This has enabled the businesses to have a lower-than-normal technology risk while still producing strong intellectual property. In addition, this facilitates the outsourcing of production and assembly, significantly reducing the Group's investment in capital equipment. The body of know-how developed within the Group has also enabled the businesses to modify the design of existing mass-produced components to reduce costs, improve efficiency and strengthen the Group's intellectual property position.

Energetix Group joined AIM in August 2006. The Group and its subsidiaries and associates are all based near Chester, North West England.

www.energetixgroup.com