Placing to raise £2.14 million ("the Placing") and Shareholder Open Offer to raise up to approximately £3.74 million (the "Open Offer")

ITM Power (AIM: ITM), the energy storage and clean fuel company, is pleased to announce that the Company has raised £2.14 million before expenses, by way of a firm placing with institutional investors for 14,283,722 new ordinary shares at an issue price of 15 pence per share ("the Issue Price"). In addition, the Company will offer up to 24,934,135 new ordinary shares (the "Offer Shares") for qualifying shareholders at the Issue Price potentially raising up to a further £3.74 million before expenses (the "Open Offer"). In each case these capital raisings are subject to shareholder approval. Furthermore, the Company has secured irrevocable undertakings from JCB Research, Peter Hargreaves, Graham Cooley and certain other investors to take up their Basic Entitlement under the Open Offer and to apply for Excess Shares under the Excess Application Facility to an aggregate value of £2.86 million. The total fundraising from the Placing and the Open Offer will be a minimum of £5.00 million and could rise to £5.88 million subject to take up under the Open Offer. The Open Offer provides an opportunity for all Qualifying Shareholders to participate in the fundraising by both subscribing for their respective Basic Entitlements and by subscribing for Excess Shares under the Excess Application Facility, subject to availability. Pursuant to the Open Offer, Qualifying Shareholders will be given the opportunity to subscribe for 14 Open Offer Shares for every 100 Existing Ordinary Shares held on the Record Date. **Graham Cooley, CEO, commented:** "At this time in the Company's development it is important that we have a strong balance sheet to support our commercial relationships and I am delighted that our existing shareholders have shown their commitment to the Company in this funding round. We are making an open offer of shares to existing shareholders at the same price as the placing giving all our existing shareholders an opportunity to participate." For further information please visit [www.itm-power.com](https://www.itm-power.com) or contact:

**ITM Power plc** +44 (0)114 244 5111 Graham Cooley, CEO **Zeus Capital** +44 (0)20 7533 7727 Dan Bate / John Treacy / John Goold **Tavistock** +44 (0)20 7920 3150 Simon Hudson / James Collins

**Placing to raise £2.14 million ("the Placing") and Shareholder Open Offer to raise up to approximately £3.74 million (the "Open Offer")** The Company announces today that it proposes to undertake a Firm Placing to raise £2.14 million (before expenses) together with an Open Offer to raise up to £3.74 million (before expenses), in each case through the issue of New Ordinary Shares at an issue price of 15 pence per New Ordinary Share. The Issue Price represents a discount of 17.81 per cent. to the Closing Price on the Latest Practicable Date. Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will occur on 17 February 2016. The Firm Placing and the Open Offer are conditional, inter alia, on the passing of the Resolutions at the General Meeting. **Overview of ITM** ITM manufactures integrated hydrogen energy solutions which offer rapid response and high pressure delivery designed to meet the requirements for grid balancing and energy storage services, and for the production of clean fuel for transport, renewable heat and chemicals. The Group operates through two divisions: (a) power to gas energy storage: the Group's 'Power-to-Gas' model is a commercial proposition which offers utility companies energy storage options. ITM provides grid balancing services, converting excess energy in the power network into hydrogen for injection into the gas network. ITM delivered the world's first Proton Exchange Membrane Power-to-Gas plant in 2013 and supplied a second Power-to-Gas system to RWE in 2015. The Group has contracts with National Grid and a technology collaboration with AEG. In November 2015, ITM announced completion of the Phaedrus project, a European Union Joint Technology Initiative funded project. The Group was engaged to design an all-electrochemical hydrogen refuelling station, including on-site production by electrolysis; and (b) clean fuel: the Group's refuelling model incorporates the work of national hydrogen infrastructure initiatives to support the growth of hydrogen as a transport fuel, for use in cars and buses initially, with further transport applications in the future. ITM signed a siting agreement with Shell in September 2015, a siting agreement with Arup in December 2015 and a fuel contract with Toyota in October 2015. The Group has won contracts to supply on-site hydrogen generation equipment for refuelling in both the UK and California, building nine stations in the UK and two in the US. In 2015 ITM launched the Group's first public access hydrogen refuelling station and received the UK's first Toyota Mirai, a fuel cell electric vehicle. In March 2015 the Company received a strategic investment of £4.9 million from J.C.B. Research and Valebond Consultants Limited (a company wholly owned by Jo Bamford, and together with J.C.B. Research for the purposes of this Circular, ("JCB")), to fund working capital and projects under contract. JCB is the world's third largest construction equipment manufacturer by volume.

**Background to and reasons for the Firm Placing and the Open Offer and use of proceeds** ITM currently has £9.01 million of projects under contract and a further £8.66 million in the final stages of negotiation (£17.67 million in total). A number of these projects are commercial agreements and require upfront expenditure, with corresponding income typically received towards the end of the agreement, providing a working capital shortfall during the earlier stages of the contract. Cash flow remains a key consideration for the Board, and the presiding financial objective for ITM is the achievement of a positive cash flow in the medium term. Short term cash flow is aided by the Group quoting for sales with upfront payments, reducing the working capital outlay of commercial projects. Cash outflow is also enhanced through working with, and receiving support from, partners, on the development of technology. The Directors intend to use the proceeds of the Firm Placing and the Open Offer to: - generate working capital to support the project order book; - achieve a positive cash flow position; and - strengthen the Company's balance sheet, to assist in meeting tender requirements. **Current trading and outlook** The Company today will announce its interim results for the six month period to 31 October 2015. **Details of the Firm Placing and the Open Offer** The Directors have given careful consideration as to the structure of the proposed fundraising and have concluded that the Firm Placing and the Open Offer is the most suitable option available to the Company and its Shareholders at this time. 14,283,722 Firm Placed Shares will be issued through the Firm Placing at 15 pence per New Ordinary Share to raise gross proceeds of £2.14 million. Up to 24,934,135 New Ordinary Shares will be issued through the Open Offer at 15 pence per New Ordinary Share (to raise gross proceeds of up to approximately £3.74 million (assuming full take-up under the Open Offer). **Principal terms of the Firm Placing** The Company is proposing to issue 14,283,722 Firm Placed Shares pursuant to the Firm Placing. In accordance with the terms of the Firm Placing and Open Offer Agreement, Zeus Capital has, as agent for the Company, conditionally placed, with institutional and other investors, the Firm Placed Shares at the Issue Price to raise approximately £2.14 million. The Firm Placed Shares are not subject to clawback and are not part of the Open Offer. ***Principal terms of the Open Offer*** The Board considers it important that Qualifying Shareholders have the opportunity to participate in the fundraising, and the Directors have concluded that the Open Offer is the most suitable option available to the Company and its Shareholders. The Open Offer provides an opportunity for all Qualifying Shareholders to participate in the fundraising by both subscribing for their respective Basic Entitlements and by subscribing for Excess Shares under the Excess Application Facility, subject to availability. Pursuant to the Open Offer, Qualifying Shareholders will be given the opportunity to subscribe for 14 Open Offers Share for every 100 Existing Ordinary Shares held on the Record Date. The Open Offer will raise gross proceeds of up to approximately £3.74 million, assuming full take-up. The Issue Price represents a 17.81 per cent. discount to the Closing Price of 18.25 pence per Ordinary Share on the Latest Practicable Date. The Company has agreed to pay Zeus Capital a commission based on the aggregate value of the Open Offer Shares taken up by Qualifying Shareholders. ***Basic Entitlement*** Qualifying Shareholders are invited, on and subject to the terms and conditions of the Open Offer, to apply for any number of Open Offer Shares (subject to the limit on the number of Excess Shares that can be applied for using the Excess Application Facility) at the Issue Price. Qualifying Shareholders have a Basic Entitlement of: **14 Open Offer Shares for every 100 Existing Ordinary Shares** registered in the name of the relevant Qualifying Shareholder on the Record Date. Basic Entitlements under the Open Offer will be rounded down to the nearest whole number and any fractional entitlements to Open Offer Shares will be disregarded in calculating Basic Entitlements and will be aggregated and made available to Qualifying Shareholders under the Excess Application Facility. The aggregate number of Open Offer Shares available for subscription pursuant to the Open Offer will not exceed 24,934,135 New Ordinary Shares. **Effect of the Firm Placing and the Open Offer** Upon completion of the Firm Placing and the Open Offer, the New Ordinary Shares will represent approximately 18.05 per cent. of the Enlarged Share Capital (assuming the Open Offer is subscribed in full). **Related party transactions** **Participation of certain Directors in the Open Offer***italic text* Dr Graham Cooley, J.C.B. Research and Valebond Consultants Limited intend to participate in the Open Offer. Robert Pendlebury is an associate (for the purposes of Rule 13 of the AIM Rules for Companies) of J.C.B. Research. Accordingly, Dr Graham Cooley, Peter Hargreaves and Robert Pendlebury are considered as related parties of the Company and their participation in the Open Offer is considered a "related party transaction" under the AIM Rules for Companies. The Directors (other than Dr Graham Cooley, Peter Hargreaves and Robert Pendlebury) consider, having consulted with the Company's Nominated Adviser, Zeus Capital, that the terms of participation for Dr Graham Cooley, and J.C.B. Research in the Open Offer are fair and reasonable in so far as its Shareholders are concerned. **Irrevocable voting commitments from certain Directors and certain major Shareholders** Directors and certain major Shareholders, who in aggregate hold 32,520,634 Existing Ordinary Shares, representing approximately 18.26 per cent. of the Existing Issued Share Capital, have irrevocably undertaken to vote (and where such Existing Ordinary Shares are registered in the name of any other persons have irrevocably undertaken to use reasonable endeavours to procure that those persons will vote) in favour of the Resolutions at the General Meeting. **Recommendation and voting intentions** The Directors believe that the Firm Placing and the Open Offer are in the best interests of the Company and its Shareholders as a whole. **The Company is in receipt of undertakings from Directors and certain major Shareholders to vote in favour of the Resolutions representing not less than 18.26 per cent. of the Existing Issued Share Capital.** Terms in this announcement which are not defined herein shall have the same meanings as in the Circular to Shareholders of the Company dated 29 January 2016.

**EXPECTED TIMETABLE OF PRINCIPAL EVENTS** Record Date for entitlement to participate in the Open Offer 5.00 p.m. on 26 January 2016 Announcement of the Firm Placing and the Open Offer and despatch of the Circular, the Form of Proxy and, to certain Qualifying Non-CREST Shareholders, the Application Form 29 January 2016 Expected ex-entitlement date for the Open Offer 8.00 a.m. on 29 January 2016 Basic Entitlements and Excess CREST Open Offer Entitlements credited to CREST stock accounts of Qualifying CREST Shareholders 1 February 2016 Recommended latest time and date for requesting withdrawal of Basic Entitlements and Excess CREST Open Offer Entitlements from CREST 4.30 p.m. on 9 February 2016 Latest time for depositing Basic Entitlements and Excess CREST Open Offer Entitlements into CREST 3.00 p.m. on 10 February 2016 Latest time and date for splitting Application Forms (to satisfy bona fide market claims only) 3.00 p.m. on 11 February 2016 Latest time and date for receipt of Forms of Proxy for the General Meeting 11.30 a.m. on 12 February 2016 **11.00 a.m. on 15 February 2016** General Meeting 11.30 a.m. on 16 February 2016 Result of Open Offer announced through RNS 16 February 2016 Admission of the New Ordinary Shares to trading on AIM 8.00 a.m. on 17 February 2016 New Ordinary Shares in uncertificated form expected to be credited to accounts in CREST (uncertificated holders only) as soon as practicable after 8.00 a.m. on 17 February 2016 Expected date of despatch of definitive share certificates for the New Ordinary Shares in certificated form (certificated holders only) by 27 February 2016 1. The ability to participate in the Open Offer is subject to certain restrictions relating to Qualifying Shareholders with registered addresses or located or resident in countries outside the UK (particularly the Excluded Overseas Shareholders. Subject to certain exceptions, Application Forms will not be despatched to, and Open Offer Entitlements will not be credited to the stock accounts in CREST of, Shareholders with registered addresses in any of the Restricted Jurisdictions. 2. Each of the times and dates set out in the above timetable and mentioned in this document is subject to change by the Company (with the agreement of Zeus Capital Limited), in which event details of the new times and dates will be notified to the London Stock Exchange and the Company will make an appropriate announcement to a Regulatory Information Service. 3. References to times in this document are to London times unless otherwise stated. 4. Different deadlines and procedures for applications may apply in certain cases. For example, if you hold your Ordinary Shares through a CREST member or other nominee, that person may set an earlier date for application and payment than the dates noted above. 5. Assumes that resolutions 1 and 3 of the Resolutions that are set out in the Notice of General Meeting are passed. 6. If you require assistance please contact Capita Asset Services on 0371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9.00 a.m. - 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.