Ms. Rose Carling reports

Three funds advised by AWM Investment Company Inc. have disposed of shares of Xebec Adsorption Inc. in open market transactions.

AWM advises the Special Situations Fund III QP LP, the Special Situations Cayman Fund LP and the Special Situations Private Equity Fund LP.

On April 24, 2015, 510,000 shares of Xebec at a price of 5.08 U.S. cents per share were sold by the funds. Special Situations Fund III QP sold 341,700 shares, Special Situations Cayman Fund sold 71,400 shares and Special Situations Private Equity Fund sold 96,900 shares. The above dispositions represent approximately 1.3 per cent of the outstanding shares.

Following this disposition, the funds own 7,761,761 shares of Xebec and warrants to purchase 2.5 million shares, representing approximately 24.5 per cent of the outstanding shares assuming the exercise of all warrants held by the funds. Special Situations Fund III QP holds 5,458,206 shares and warrants to purchase 1.75 million shares, Special Situations Cayman Fund holds 1,625,875 shares and warrants to purchase 550,000 shares, and Special Situations Private Equity Fund holds 677,680 shares and warrants to purchase 200,000 shares. The funds own the securities and AWM controls such securities.

AWM holds the shares on behalf of the funds for investment purposes. AWM and/or the funds may purchase additional shares, and/or warrants and/or other securities, or dispose of shares, and/or warrants and/or other securities, of Xebec from time to time as circumstances warrant. AWM and the funds may be considered to act jointly or in concert.