Company report

LNU is a semiconductor
equipment company … bla
UltraCharge Limited UltraCharge Ltd.
provide general advice only, and
does not purport to make any
(ASX:UTR)
Targeting the high-growth EV battery market recommendation that any
securities
Capital Goods transaction is
Safer and faster Lithium-ion battery technology appropriate to your particular
Australia
investment objectives, financial
As the saga around exploding Samsung Galaxy Note 7 phones in 2016 Risk: Highor particular needs.
situation
illustrated, smart phone manufacturers are pushing the boundaries of
Prior to making any investment
rechargeable battery technology in order to maximize daily battery usage
and minimize charging times. The same is true for batteries in electric
vehicles (EV) such as Tesla’s and e-busses. UltraCharge (UTR) is building an
intellectual property (IP) portfolio
Most of today’s Lithium-ion batteries contain anodes (the negative pole of around rechargeable battery
a battery) that are made of graphite, which holds the inherent risk of technology. The company is
overheating when charged too fast. This is a major safety issue and limits developing TiO2 nanotubes to
batteries’ charging efficiency. Recently developed anodes made from be used as future anode
Titanium Oxide (TiO2) could provide safer solution and charging speed materials in Lithium-ion
improvements over graphite. However, UltraCharge Limited (UTR) is taking
batteries. UTR is also
this technology one step further.
aggregating third-party
Anodes made from Titanium Oxide nanotubes rechargeable battery IP in a bid
UTR is developing Titanium Oxide nanotubes (TiO2 NT), a novel material to become a one-stop-shop for
based on Titanium Oxide (TiO2), that can be used to manufacture anodes industry players that require
that are faster to charge, have a long-life cycle and enhanced safety. such technologies, e.g. electric
Additionally, TiO2 NT anodes have a higher energy density than Titanium car / E-BUS manufacturers and
Oxide anodes and are thus expected to be lighter and 20% cheaper, while battery cell Manufactures
maintaining the performance benefits of Titanium Oxide over graphite.
Graphite increasingly replaced by TiO2 and potentially TiO2 NT
Graphite anodes account for ~83% of Lithium-ion battery anodes, implying
that the Titanium Oxide battery market is still relatively small today.
However, we expect the Titanium Oxide anode segment to flourish in the
next ten years on the back of superior performance metrics compared to SUBSCRIBE TO OUR
graphite, i.e. safer and faster charging. Given the further benefits of TiO2 NT
RESEARCH HERE
over TiO2, we believe UTR’s technology has very substantial potential.
EV’s present a huge and fast-growing market for TiO2 NT
The market for EV’s, such as the Tesla Model 3 and Model X, BMW’s i3 and
the Nissan Leaf, are expected to grow very substantially in the next ten
years. Simultaneously, the market for e-busses is expected to take off as
well, driven largely by demand from large metropolitan areas struggling
with air pollution, e.g. in China. The total market for EV’s is expected to grow
to nearly US$ 70BN through 2025 from just US$ 17BN in 2017, which
makes EV the main driver of the Lithium-ion battery market longer term.
Share Volume
Company Name ASX:UTR Price
$0.05
$0.05
25,000,000
BUY
Number of shares (m) 635.5 $0.04
$0.04
20,000,000

Number of shares FD (m) 758.75

$0.03
$0.03
15,000,000 Current price: A$ 0.031
$0.02 10,000,000
Market capitalisation (A$ 19.7 $0.02
$0.01 5,000,000 Price target: A$ 0.09
Free Float (%) 88% $0.01
$0.00 0
12 month high/low A$ 0,049 / 0,02 10 October 2017
Average daily volume (k) 1,552

Analyst: Marc Kennis

Readers should be aware that TMT Analytics has been engaged and paid by the
company covered in this report for ongoing research coverage. Please refer to the final [email protected]
page of this report for the General Advice Warning, disclaimer and full disclosures. +61 (0)4 3483 8134
 UltraCharge Limited
Given the anticipated 20% price advantage of Titanium Oxide nanotube anodes versus “regular”
Titanium Oxide anodes, we expect UTR’s technology will have high applicability in the EV
market.
Commercialization through IP licensing and JV deals
UTR’s vision is to become an aggregator of IP around rechargeable battery technology. This
includes current IP around anode technology, but can include other technologies as well, such
as the recently licensed IP portfolio around iron-based flow battery technology from Epsilor.
The company aims to commercialize these technologies through value added IP license deals,
in which UTR not only provides the IP, but also manufacturing process know-how.
UTR may also commercialize its IP through joint ventures with chemicals companies, battery cell
manufacturers and end users of Lithium-ion batteries, such as EV and smart phone
manufacturers.
We expect it will take approximately two years before the first TiO2 nanotube-based anodes will
be commercially available. However, there will likely be early commercial opportunities for UTR,
in our view, for instance through up front licensing fees and Non-Recurring Engineering fees.
Building its sales funnel through initial pilot projects
In March 2017, UTR signed an MoU with Lithium-ion battery manufacturer LaClanché in
Switzerland. Under the MoU, UTR and LaClanché will run a pilot project with the aim of using
TiO2 nanotubes in LaClanché’s anodes. Ultimately, LaClanché aims to use these anodes for its
EV customers, including Automotive OEM’s, distributors and end users, i.e. EV manufacturers.
UTR is currently scaling up its in-house manufacturing capacity for these sorts of test batches.
We expect UTR will be able to close similar pilot projects in the next few months and quarters,
which should help the company build its commercial pipeline.
Substantial valuation upside judging by VC valuations for pre-revenue peers
We believe UTR has the building blocks in place to become a leading-edge supplier of anode
materials through IP licensing and/or joint manufacturing of anode materials, to be used in the
future manufacture of Lithium-ion anodes. Due to superior performance characteristics of TiO2
nanotube anodes and price differential with graphite anodes, we believe the technology will be
very well suited to high-end applications, such as EV batteries and premium smart phones, in
particular.
Additionally, through acquisitions and licensing of complementary technologies, such as the
announced acquisition of IP around LMNO cathode materials, we believe UTR can deliver
complete battery solutions, for instance for the fast-growing EV market.
In terms of valuation, we believe VC-funded emerging battery technology companies provide a
good gauge of valuations the market is willing to pay for promising companies, with Israel-
based StoreDot’s recent pre-money valuation of US$ 500M being a case in point. StoreDot is
highly comparable to UTR and about two years ahead in terms of development progress.
UTR’s key challenge in the near to medium term will be to generate and subsequently convert
industry interest in its TiO2 Nanotube anode materials. If and when successful, we believe there
will be substantial upside to the company’s valuation.
Hence, we start our coverage of UTR with a BUY rating and a price target of A$ 0.09 per share.

1
 UltraCharge Limited
Understanding Lithium-Ion Batteries
The basic structure of a battery has a positively charged cathode and negatively charged anode
at either end. An electrolyte exists between the cathode and anode and the entire cell is
connected to an electrical circuit, such as a mobile phone, laptop, power tool or a Tesla electric
vehicle.
A chemical reaction takes place inside the battery to produce a buildup of electrons at the anode
where these electrons are discharged to provide electrical energy (Figure 1). This energy flows
through the circuit to power the device, e.g. a mobile phone. Once the chemical reaction has
finished, the battery is drained and will no longer provide power to the device.
F IGURE 1: L ITHIUM - ION BATTERY POWERING A DEVICE

Source: http://sustainable-nano.com

Rechargeable Lithium-ion batteries can be charged and discharged many times

A lithium-ion battery provides a rechargeable cell for use in powering everyday products like
phones, laptops or cars. Lithium-ions migrate between the cathode and anode of the battery to
either charge or discharge the cell. In a Lithium-ion battery, the chemical reaction is reversible
meaning it can be charged, discharged and recharged many times over its lifetime. But what
exactly happens inside the battery and how does each component contribute to the process?
Cathode
The cathode is the positively charged end of the cell and can be composed of a wide range of
different materials. Commonly, the cathode is made of a lithium metal oxide such as LiCoO 2
(Lithium cobalt oxide) or LiMn2O4 (Lithium manganese oxide). During the charging process, a
chemical reaction occurs which transfers positively charged Lithium-ions (li+) from the cathode
to the anode through a permeable transport medium known as the electrolyte.
Anode
2 The anode is the negatively charged end of the cell and in the clear majority of cases in a
Lithium-ion battery the anode is made of graphite (pure carbon with a unique molecular
structure). The carbon atoms in graphite are covalently bonded to each other in three places
 UltraCharge Limited
(Figure 2). A covalent bond is extremely strong and very difficult to break, resulting in very high
melting and boiling points for graphite. Graphite contains free electrons which can move through
the layered structure of graphite conducting electricity very effectively making it great for power
storage. Furthermore, graphite can reversibly accept the lithium-ions which is crucial to chemical
reaction that charges and discharges the cell.
F IGURE 2: SHEETS OF CARBON ATOMS IN GRAPHITE

Source: scifun.ed.ac.uk
During a battery cell discharge, the positively charged Lithium-ions pass back through the
electrolyte to the cathode while electrons (negatively charged by nature) are sent through the
electrical circuit to the device for power.
Electrolyte
The electrolyte is usually a Lithium salt in an organic solvent and should be pure with as little
water as possible to ensure efficient transfer of Lithium-ions and hence charging of the cell. In
the electrolyte, between the cathode and anode, a separator is placed, which prevents short
circuiting of the cell. The separator is permeable for the Lithium-ions to flow back and forth
between the cathode and anode upon charge and discharge.
The liquid electrolyte plays a key role in transporting Li+ ions between the cathode and anode.
The specific formulation of electrolyte depends on what material is used for the electrodes
(cathode and anode). Importantly, the composition of materials effects the performance and
safety of the cell.
Organic solvents are flammable and volatile resulting in the potential of explosion or fire in some
situations. In a bid to improve safety, solid electrolytes are being developed, which provide a
much safer alternative to organic liquid electrolytes.
Figure 1 shows a basic outline of how a Lithium-ion battery works during discharge, i.e. when
powering a device. Lithium-ions flow from the anode to the cathode and electrons flow from the
anode through the circuit to power the device. During charging, this process is reversed. It can
be seen from the diagram that this example has multiple cells at the anode and cathode. Some
Lithium-ion batteries have multiple cells and some are single cell batteries where there is just
one cell at each anode and cathode.
The number of cells depends on the voltage required. For example, a Lithium-ion battery can
generate around 3.7V while a Nickel Cadmium cell generates around 1.2V. Most smartphones
are single cell batteries while a Tesla vehicle contains thousands of cells, needed to provide the 3
required voltage to drive the electric motor.
 UltraCharge Limited
The quality of material can make a big difference
The amount of energy produced and the duration of the battery (number of charges over its
lifetime) is closely correlated to the quality of materials used. Very simply, the higher the quality
of materials used, the better the outcomes in terms of energy produced and lifespan. As
mentioned above the anode is very commonly made of graphite. Recently, anodes comprised
of Li4Ti5O12 (Lithium Titanite Oxide) have become commercially available.
Most battery innovation has focused on the cathode
However, most of the focus across the industry has been on the composition of the cathode
as current cathode materials have an inferior ability to store electrical charges in comparison to
graphite-based anodes. Thus, most efficiencies have been gained by altering the cathode
composition.
The incumbent cathode technology has been LiCoO2 (Lithium Cobalt Oxide). The technology
provides a moderate life cycle (around 500 times) and moderate energy density. Unfortunately,
the chemistry is less stable than other options which makes it highly combustible if placed in
extreme conditions. Consequently, LiCoO2 is unsuitable for applications such as electric
vehicles.
LiFePO4 (Lithium Iron Phosphate) does not release oxygen when under extreme conditions,
will not combust and thus is less susceptible to thermal runaway. Consequently, this cathode
technology provides higher stability over Cobalt making it safer for use in varying temperatures.
Furthermore, they have a longer life cycle of between 1,000-2,500 cycles. Ultimately, they are
improvement over Cobalt in terms of cost, safety and toxicity.
LiMn2O4 (Lithium Manganese Oxide) provides a higher cell voltage than Cobalt and is more
stable. In addition, Manganese is more environmentally friendly due to its lower toxicity over
Cobalt while it’s also lower in cost. However, energy density is about 20% less than Cobalt.
Overall, this cathode technology is an improvement on Cobalt as well.
Lithium Titanite Oxide is the leading alternative to graphite in anodes
In terms of anode technology, the main competitor of graphite is Li4Ti5O12 (Lithium Titanite
Oxide). This anode technology offers superior charge rates and a wider operating temperature.
This material is also safer than graphite and has a longer life cycle. However, it requires a larger
size than graphite due to the lower energy density (amount of energy able to be stored per kg).

Major advantages of Lithium-ion batteries over other rechargeable batteries

• Lithium-ion batteries are lightweight due to composition of Lithium and Carbon. Other
technologies of the same size are heavier. This is especially important for portable
communication devices such as laptops and mobile phones where weight is a significant factor
effecting consumer preferences.
• Lithium is a highly reactive element meaning a lot of energy can be stored in its atomic
bonds. As a result, Lithium-ion batteries have very high energy density. A typical Lithium-ion cell
can produce 150 watt-hours of electricity per 1 kg. A Nickel Metal Hydride battery (used in some
electric cars) would need to be around 2 kg to achieve the same electrical output and a Lead
acid battery would need to be 6 kg to achieve this type of output.
• Lithium-ion batteries tend to hold their charge (without use) more effectively than
4
competing technologies. All batteries experience high rates of self-discharge just after charging.
The rate of discharge significantly reduces after about 24 hours. For example, a Nickel Metal
Hydride battery might lose about 10% of its charge in the first 24 hours and then 10-15% per month
 UltraCharge Limited
thereafter. A Lithium-ion cell, however, loses around 5% in the first 24 hours and around 5% per
month thereafter.
• Some battery chemistries have memory effect meaning the battery needs to fully
discharge (or close to) before it can be charged again. If the battery does not discharge to near
zero it can lose its maximum energy capacity. e.g. repeated recharge at 25% power can result in
the battery not functioning below 25% anymore. This is particularly prevalent in Nickel-based
batteries and is something that doesn’t exist in Lithium-ion technology.
Lithium-ion technology has some clear disadvantages too
• Lithium-ion cells start degrading as soon as they leave the factory, usually only lasting
between 2-3 years from the date of manufacture regardless of use. This is partially due to the
cells susceptibility to heat, which causes the cell to degrade much faster than it otherwise would.
However, storage in a cool dark place at around 40% charge can reduce this effect.
• If a Lithium-ion battery cell with a graphite anode is charged too fast, it may overheat
and explode or catch fire. This risk is significantly reduced to the point of near-elimination by the
addition of a protection circuit for each battery.
This problem manifested itself in the Samsung Galaxy Note 7 in 2016 (Figure 3). In this
occurrence, the separator was made too thin and the battery could short circuit. In some well-
recorded cases, this generated heat, ignited the flammable electrolyte and melted the Lithium
resulting in small explosions and fire.
F IGURE 3: EXPLODED LI ION BATTERY IN SAMSUNG GALAXY NOTE 7

Source: Android Authority

• Current Lithium-ion batteries can endure fewer recharge cycles compared to Nickel
Cadmium batteries. Nickel cadmium tends to last 1,000-2,000 cycles while Lithium-ion cells
have a lifespan somewhere in between 500 to 1,000 cycles.
• Lithium-ion technology is more expensive than Nickel cadmium. Costs will vary
depending on what device the battery is charging and numerous other factors. Nonetheless, the
cost of Lithium-ion technology is approximately 40% higher than Nickel Cadmium technology.

5
 UltraCharge Limited
UTR developing anodes from Titanium Dioxide nanotubes
Current anode technology still largely graphite based
Around 83% of the current Lithium-ion market uses graphite as the anode material. As
discussed previously, graphite has several drawbacks including safety, slower than desired
charging rates and a limited number of full cycle charges, which lowers the useful life of the
battery to 2-3 years.
Lithium Titanium Oxide increasingly used for higher end applications
Fairly recently, however, Li4Ti5O12 (Lithium Titanium Oxide) has become available as an
alternative anode material. Lithium Titanium Oxide (LTO) significantly increases the surface area
of the anode, which allows electrons to be able to enter and leave the anode at an increased
speed. This results in faster charging times and increased life of the battery. However, LTO
anodes have a lower energy density than graphite and therefore require larger cell sizes to store
the same amount of energy. This also increases the weight of the batteries.
UTR’s innovation: Titanium Dioxide Nanotubes
UTR have developed a solution to the LTO energy density issue, at the same time maintaining
the charge rate and lifespan of LTO anode technology. The company aims to replace graphite
and LTO anode material with elongated TiO2 (Titanium Dioxide) nanotubes.
Titanium dioxide is a compound made of titanium and oxygen that occurs naturally and can
also be produced in chemical plants. Products in which TiO2 can be found include paints,
sunscreen and even some food additives, among many others.
A nanotube is an extremely small tube in the order of several nanometers in diameter and can
have many different chemical compositions. For example, carbon nanotubes (graphene) are
used in some sporting equipment and car parts.
In a nanotube, particles can be channeled down the nanotube which, depending on the
material, can be a good electrical conductor or insulator.
F IGURE 4: C ARBON NANOTUBE (LEFT ) AND T IO 2 N ANOTUBES (RIGHT ) UNDER AN ELECTRON MICROSCOPE

Source: Nantero, Argonne National Laboratory

Refinement of TiO2 nanotube manufacturing process to optimize quality and costs

6 For interested readers, UTR’s current nanotube manufacturing process is described in the
appendix. This manufacturing process can be further enhanced to optimize for quality and costs
as discussed below.
 UltraCharge Limited
For instance, the initial ratio of titanite powder to base in the experimental phase was tested in a
range between 1:50 g/ml and 1:300 g/ml. This ratio is an important consideration for
commercialisation of nanotubes as it partially determines the size of the production facilities that
will be required to produce nanotubes on a large scale.
Since this earlier experimental phase, UTR has already lowered this ratio to 1:30 and has
processes in place to reduce this further. The lower ratio will reduce the reactor size required for
large scale production and hence will reduce the costs of the process.
Stirred, not shaken
Another important consideration in UTR’s nanotube manufacturing process is stir rate. The
optimum stir rate is somewhere between 400 rpm and 1,000 rpm. Nanotube structures lengthen
and become longer than usual nanotubes below 400 rpm but without an entangled pattern.
Above 400 rpm the length of the entangled structures exceeds 10 micrometers with a greatest
length achieved of 30 micrometers, which is two orders of magnitude larger than UTR originally
achieved (around 100 times). Above 1,000 rpm no further morphological change is observed.
Nanotube length is critical in the building of a battery anode as the longer the nanotube, the
shorter the distance a Lithium-ion will have to travel to reach the anode, and the quicker an
electrical charge can be transferred.
Furthermore, UTR’s nanotubes have a large surface area (130 square meters/gram). This allows
more places for Lithium-ions to deposit in the structure, speeding up the chemical reaction and
increasing capacity.
We expect UTR and a future, potential, joint manufacturing partner will be able to further optimize
the stirring process to obtain optimal nanotube length.
Hot or not
Temperature is another critical factor during nanotube manufacturing. At temperatures below
80C most of the material remains in particle form instead of forming nanotubes. However,
nanotubes begin forming above 80C, while the product will become straight and solid (non-
porous) forming nanowires instead of nanotubes above 130C. Thus, a temperature between
80C and 130C will form nanotubes with optimal nanotube formation around 130C.
Further finetuning of reaction time
Reaction time also plays a critical role in the quality of nanotubes obtained. As early as 2 hours
into the manufacturing process, nanotubes start to be formed due to the intensity of the stirring,
and start to dominate the morphology at around 4 hours. At around 16 hours, the product will
show a long and entangled nanotubular structure. After 24 hours’ reaction time, the nanotubes
straighten and align in parallel. Consequently, the optimal reaction time is between 16 and 24
hours, a time frame which we expect UTR will be able to further refine on.

Massive advantages of TiO2 NT over graphite and LTO anode

TiO2 Nanotube anodes have several very significant advantages over today’s graphite and LTO
anodes.
Rapid Charging
UTR’s anode technology allows a 70% charge in just 6 minutes with full charge achieved in 15
minutes. In an increasingly mobile world this ability will likely appeal significantly to consumers
7
who wish to spend as little as time as possible charging their devices.
 UltraCharge Limited
Much longer battery life
Battery lifespan is another important factor affecting consumer choices. UTR’s anode
technology can endure around 10,000 charge cycles, which is between 10x to 20x more than
current graphite-based anode technology allows.
Such high cycles may not be important for devices such as mobile phones or laptops given that
people generally replace these devices every 2 to 3 years, making the extra charge cycles
redundant. However, people replace their cars much less often. A electric vehicle (EV) battery
that does not need to be replaced could be an extremely attractive proposition for consumers.
This is also an attractive proposition for applications such as electric buses.
Higher energy density than LTO-based anodes
Energy density is an important consideration in a cell. The higher the energy density, the more
charge can be assigned to a battery of the same weight. This is extremely important for devices
that people carry around with them, such as smart phones and laptops. TiO2 nanotube anodes
provide an energy density of around 250 mAh/g compared to 170 mAh/g for LTO anodes.
Neither LTO and TiO2 nanotubes reach the energy density of graphite-based anode of around
350 mAh/g.
About 20% cheaper than LTO technology
Cost of raw materials is an important factor for consideration during commercialisation. UTR
believes the cost to produce TiO2 nanotube anodes will likely be lower than for current LTO
anodes. The company anticipates that once it moves into production the cost of their anode will
likely be at least 20% cheaper than current LTO technology.
However, Titanium Dioxide Nanotubes are more expensive than graphite
While TiO2 nanotube anodes, once in production, are expected to be cheaper than LTO anodes,
the cost will be higher than for graphite anodes. UTR believes their anode technology will always
cost more than graphite technologies.
Furthermore, while the energy density of a TiO2 nanotube anode is higher than for LTO anodes,
it is still lower than for graphite anodes, despite recent improvements. UTR is working on further
increasing energy density in a bid to match and overtake the energy density of graphite anodes.
TiO2 nanotube anode voltage is currently lower than graphite anodes
The effective voltage of a battery is determined by the difference between the respective
cathode and anode voltages. The operating voltage of a graphite anode is >0.1V while typical
cathodes have an operating voltage of 3.7V. The difference of 3.7V is the operating voltage of
the battery.
The operating voltage of UTR’s TiO2 nanotube anodes is 1.5V, so the battery’s effective voltage
output is only 2.4V. This means more cells are required to achieve the same voltage output.
However, the lower voltage also means TiO2 nanotube anodes are safer than graphite anodes
as they can avoid overheating and thermal runaway, which is a major safety concern in
traditional Lithium-ion cells. This issue manifested itself in the Samsung Galaxy Note 7 saga.
Another solution to the lower voltage problem would be using cathodes with higher operating
voltages, e.g. 4.7V, which would yield an effective battery voltage of 3.2V. UTR is actively
pursuing such solutions.

8
 UltraCharge Limited
In summary, TiO2 NT is clearly an improvement over existing technologies
Figure 5 illustrates the differences between the two major anode technologies available today
and UTR’s TiO2 nanotube solution. The UTR technology is clearly an improvement on current
LTO technology due to the increased energy density. However, graphite does hold some
advantages over TiO2-NT in the form of energy density and cost. UTR expects it will be able to
solve the energy density deficiency but anticipates TiO2 nanotube anodes will always have a
higher cost of production than graphite anodes.
F IGURE 5: SPECS FOR GRAPHITE , LTO AND T I O2 NANOTUBE ANODES
TiO2 Nano
Graphite LTO tubes
Capacity (mAh/g) ~350 ~170 ~250
Typical charge time (hours) >2 0.1 0.1
Cycle life <1,000 >10,000 >10,000
Safety Low Medium Medium
Cost Low Medium Medium
Source: UltraCharge, TMT Analytics

The commercial application will dictate which anode technology is preferred

Which anode technology is best will depend greatly on the end application it serves. For
example, in portable consumer electronics weight is a very significant factor. Consequently, UTR
may initially see lower use of their technology in mobile phones and laptops. However, as
mentioned, UTR is enhancing energy density and believes it will achieve the same density as
graphite over time.
On the other hand, TiO2-NT charge time is greatly improved over graphite. Charge time is a
significant factor for consumer electronics in an increasingly mobile world. Furthermore, in light
of the Samsung Galaxy Note 7 battery safety issues in 2016, the absence of carbon in UTR’s
technology is a key selling point for battery manufacturers, in our view. These factors may prove
to be more important to consumers/producers than weight.

UTR to strategically expand Intellectual Property base

An integral part of UTR’s strategy is to expand the company’s IP portfolio in the broader battery
markets in order to become a diversified IP provider to chemical companies, cell manufacturers
and end users, such as EV and smart phone manufacturers.
UTR recently concluded a deal with Epsilor Electric Fuel Limited, owned by Arotech Corporation
(NASDAQ: ARTX). in which UTR was granted an exclusive license to exploit Epsilor’s flow battery
patents and associated intellectual property rights for US$ 3,000 per month. UTR will also lease
Epsilor’s Israel-based research facilities, hire specialized equipment from Epsilor and expand its
research team with Epsilor staff for a total consideration of US$ 113,000 annually.
The Epsilor agreement expires on 31 December 2019, with UTR having an option to purchase
100% of all Epsilor IP it currently licenses before then.
Additional cathode technology to complement TiO2 nanotube anodes
UTR also announced the intended acquisition of certain IP from Israel-based ETV Energy
Limited (ETV). This IP centers around high voltage LiMnNO (Lithium Manganese Nickel Oxygen) 9
cathode material that is expected to come in 50% cheaper than current cathode materials when
in full production.
 UltraCharge Limited
Furthermore, high voltage cathodes (4.65V) from LiMnNO would be very complementary to
UTR’s TiO2 nanotube anodes, given that these anodes have a higher voltage than graphite
anodes, and hence have a lower voltage output when using traditional cathode technology.

By using LiMnNO cathodes, the effective voltage output of Lithium-ion batteries with TiO2
nanotube anodes will be closer to traditional Lithium-ion batteries, while maintaining the
safety and charging speed advantages of UTR’s technology.

We expect the IP from ETV may enable UTR to develop high-energy batteries that will allow for
smaller and thus cheaper battery packs. Furthermore, such high-energy batteries will have very
high applicability in the EV markets (both cars and busses), as they have the potential to
substantially extent the effective range of EV’s.
UTR will be looking to file proper patent applications around ETV’s IP in the near term.

10
 UltraCharge Limited
Rechargeable batteries are eating the world
Application areas for rechargeable batteries are plentiful (Figure 6) with demand for increasing
capacity seemingly insatiable. Consumer electronics applications, in particular, require longer
everyday battery life as product categories such as smart phones and wearables still struggle
to get a full day’s worth of charge out of today’s Lithium-ion batteries.
However, proliferation of electric vehicles (EV) is also providing a very strong incentive for battery
innovation as most EV’s still only have a range up to 400 km on one charge making EV’s
unsuitable for longer trips.
Overall, the battery market is expected to grow from 75 GWH in 2017 to more than 400 GWH by
2025, representing a value of nearly US$ 110BN according to LUX Research.
F IGURE 6: THE EVER - GROWING APPLICATION AREAS FOR RECHARGEABLE BATTERIES

Source: UltraCharge

Electric transportation is the industry’s main driver

Electric vehicles, such as cars, scooters and busses are expected to be the largest off takers of
rechargeable batteries longer term, Lithium-ion batteries in particular. The value of the
transportation battery market is expected to grow from approximately US$ 17BN in 2017 to
US$ 69BN in 2025.
The value of the passenger EV battery market is expected to amount to US$ 32BN in 2025 while
LUX Research expects the market for e-Bus batteries to amount to nearly US$ 10BN by then.
However, other research indicates the e-Bus market may be substantially larger than that, i.e.
closer to US$ 30BN in 2026 according to IDTechEx Research.
In any case, the potential of Lithium-ion batteries in the transportation segment should be overly
clear as also illustrated by Tesla’s big push into this segment through its Gigafactory.
Consumer electronics segment growing in GWH demand but falling in value
Falling global prices for small form factor Lithium-ion batteries as a result of production
11
efficiencies and fast capacity growth, are expected to offset strong battery unit growth.
 UltraCharge Limited
Consequently, the value of the Consumer Electronics Lithium-ion battery market is expected to
be flat to down in the next eight years through 2025 at around US$ 20BN annually.
Off grid Storage market expected to remain relatively small segment
We believe decentralized energy storage, i.e. households storing self-generated solar power in
their own batteries, will be a modest driver of Lithium-ion battery demand going forward with a
total market size of US$ 3BN by 2020.
China set to dominate the Lithium-ion battery market by 2020
Chinese Lithium-ion battery manufacturers, such as Contemporary Amperex Technology
(CATL), are rapidly expanding production capacity. CATL is working to expand its capacity to 50
GWH by 2020, while others, including Boston Power, LG Chem and car manufacturer BYD, are
not far behind. On aggregate, Chinese capacity is set to grow from 16 GWH in 2017 to
approximately 108 GWH by 2020, resulting in an expected global market share for Chinese
manufacturers of more than 60%.

Graphite dominates anode market, but TiO2 growing nearly 47% CAGR to 2025
Natural or synthesized graphite is used in approximately 83% of Lithium-ion anodes today
(Figure 7). The remaining 17% is accounted for by other materials including TiO2.
While TiO2 clearly has several key advantages over graphite as an anode material, as discussed
earlier, TiO2 pricing is expected to remain higher than graphite for the foreseeable future, making
the use of LTO batteries in price sensitive Consumer Electronics applications, such as toys,
power tools, lower end smart phones etc, less obvious.
F IGURE 7: GRAPHITE STILL MOST USED MATERIAL IN L ITHIUM - ION ANODES

Graphite (natural, synthetic) Other materials (incl. TiO2)

Source: Research and Markets, TMT Analytics

Growth of LTO is driven by less price sensitive applications such as EV

However, price is less of an issue in higher end applications that require fast charging, frequent
cycling and long lifetimes, such as in EV and e-buses, start-stop modules in cars, and certain
Consumer Electronics, e.g. high-end smart phones, tablets and laptops. And with electric
transportation being the main driver of the Lithium-ion battery market through 2025, the LTO
12 battery market is expected to grow from 1 GWH in 2017 to approximately 16 GWH by 2025,
implying a CAGR of more than 46% during that period (Figure 8).
 UltraCharge Limited
F IGURE 8: GLOBAL LTO ENERGY CAPACITY (MWH; 1 GWH = 1,000 MWH)
18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Source: Cairn ERA, TMT Analytics

Lithium Titanium Oxide battery market capacity to grow to US$ 13BN by 2025
In monetary terms, this strong growth in GWH’s represents revenue growth from approximately
US$ 900M in 2016 to an estimated US$ 13BN by 2025, or a 37% CAGR, according to Cairn ERA.
Interestingly, Asia Pacific is expected to overtake Western Europe as the dominant region where
manufacturing of LTO batteries is concerned. By 2025, Asia Pacific is expected to account for
more than 40% of global LTO sales, while Western Europe is expected to account for 29%, down
from more than 40% today.

In summary, while the LTO battery market is still relatively small today, we expect this
market segment to flourish in the next 10 years on the back of superior performance
metrics compared to graphite (Figure 5). These superior metrics are in high demand for
use in higher-end applications of Lithium-ion batteries.

F IGURE 9: RAPID VOLUME GROWTH FOR L ITHIUM - ION BATTERIES WITH T I O2 ANODES (LTO)

~ 75 GWH ~ 40 GWH ~ 16 GWH

by 2025
~ 1 GWH
in 2017

Lithium ion
Lithium ion battery 46.5% CAGR
Global battery market 2017 battery market
market 2017 2016-2025
with TiO2 anodes
13
Source: Benchmark Mineral Intelligence, Cairn ERA, TMT Analytics estimates
 UltraCharge Limited
TiO2 nanotubes even more suited to high end applications
Given that the energy density of TiO2 nanotubes (LTO NT) of approximately 250 mAh/gram is
expected to be superior to today’s LTO batteries (~170 mAh/gram), we believe that LTO NT
should be able to capture a substantial part of the Lithium-ion battery market once commercially
available.
Pricing will be a crucial factor in manufacturers price/performance equation. UTR currently
anticipates LTO NT to be at least 20% cheaper than LTO given that fewer cells are required to
achieve the same voltage output with LTO NT compared to LTO.

Commercialisation strategy mainly focused on IP licensing

UTR’s vision is to become an aggregator of IP around rechargeable battery technology. This
includes current IP around anode technology, but can include other technologies as well. For
instance, UTR recently acquired an IP portfolio around iron-based flow battery technology in the
aforementioned license agreement it struck with Epsilor.
Commercialization of UTR’s IP will be focused on value-added licensing of this technology, i.e.
in addition to providing clients with a license to use its technology, UTR also aims to bring its
electrochemistry process know-how to the table, which should assist licensees in bringing
UTR’s technology to market quickly.
Additionally, through its extensive industry network UTR will aim to provide its licensees with
access to potential customers as well, e.g. mobile phone and laptop manufacturers, EV
manufacturers and other end users of Lithium-ion batteries.
Revenues through joint ventures with industry players
A second avenue of commercialization will be potential joint ventures with industry participants,
such as chemical companies, battery cell manufacturers and end users, like electric vehicle (EV)
companies, mobile phone manufacturers etc.
TiO2 manufacturers most likely JV partners
Potential joint venture partners among the chemical producers naturally include the largest
players in the Titanium Dioxide market segment, i.e. DuPont spin-off Chemours (NYSE:CC),
Tronox (NASDAQ:TROX) and privately-owned Cristal. The latter two are in advanced takeover
proceedings that would see Tronox acquire Cristal to become the world’s largest producer of
TiO2. ahead of Chemours.
A typical JV deal with a TiO2 manufacturing company would see UTR provide process IP to
manufacture TiO2 nanotubes with the manufacturing partner providing processing capacity in
large volumes.
The commoditizing battery cell market also makes cell manufacturers potential JV partners
In addition to chemicals manufacturers, we believe the Chinese, Korean and Japanese Lithium-
ion battery manufacturers would be likely JV candidates. Companies such as Panasonic,
Samsung SDI, LG Chem, CATL, Sony and Lishen dominate this sector globally and are
increasingly competing on price.
Enhanced performance features offered by UTR’s TiO2 nanotube technology, such a faster
charging and substantially more charging cycles, will enable these companies to differentiate
their battery cells for end customers and compete on specs rather than on price.
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 UltraCharge Limited
Lithium-ion end users need differentiation as well
This need to differentiate on battery specs also applies to end users of Lithium-ion batteries, i.e.
EV manufacturers as well as manufacturers of mobile phones and other wearables. Fast
charging, safer use and more charging cycles are key selling points for most of these
manufacturers. Hence, we expect UTR’s TiO2 nanotube technology will garner very substantial
interest from companies in these various sectors.
For instance, Chinese car manufacturer BYD is growing very fast in the EV market and owns
substantial Lithium-ion battery manufacturing capacity, as discussed earlier. We would expect
companies, such as BYD, to be highly interested in technologies that improve the overall
performance of their batteries. This also goes for other car companies that are making a big
push into EV, e.g. Audi, Volkswagen, BMW and General Motors.
Establish proprietary TiO2 nanotube manufacturing capacity
A third way for UTR to monetize its technology is to become a manufacturer of TiO2 nanotubes
itself, potentially assisted by one of the TiO2 manufacturers mentioned before. While this
strategy would provide UTR with full control over the manufacturing process and potentially
attractive operating margins, it would require a very substantial capital investment of at least
A$ 10M to A$ 15M to get going. Subsequent production growth would naturally require further
capital investment.
In a global chemicals market dominated by very large, well-capitalized companies, production
scale is extremely important. We believe it would take substantial time and investments for UTR
to reach a production scale that would allow the company to compete with established TiO2
players, such as Chemours and Tronox. Additionally, we believe the company’s risk profile
would change substantially. Therefore, this would not be our preferred scenario from an
investment point of view.
Potential revenue streams mainly based on IP licensing
IP licensing agreements typically comprise of one-off license fees, paid up front, and recurring
royalty payments that are based on licensees’ actual revenues. The royalty payments usually
range between 5% and 15% of the sales value of the product using the licensed IP.
In the case of UTR, we would expect the company to be able to secure license fees ahead of
production ramp up by a licensee, with royalty payments to follow six to twelve months later
when actual product sales commence.
In certain instances, there may be scope for UTR to generate revenues from Non-Recurring
Engineering (NRE) work, in which the company provides customization and integration services
to the licensee in order to bring TiO2 nanotube technology into production.
First customer pilot project with battery manufacturer
In March 2017 UTR signed an MoU with Lithium-ion battery manufacturer LaClanché in
Switzerland. Under the MoU, UTR and LaClanché will run a pilot project with the aim to use TiO2
nanotubes in LaClanché’s anodes. Ultimately, LaClanché aims to use these anodes for its EV
customers, including Automotive OEM’s, distributors and end users, i.e. EV manufacturers.
Initial focus of the pilot will be on Lithium-ion batteries for electrical busses, a market expected
to grow to US$ 30BN by 2026.

15
 UltraCharge Limited
Key challenges ahead of commercial licensing discussions
However, before UTR can engage in concrete discussions around IP licensing with LaClanché,
or other potential licensees, key challenges remain:
1. UTR’s current laboratory setup is capable of producing approximately 50 grams of TiO2
nanotube material per day. Through incremental production steps, UTR aims to
manufacture up to 300 kg per month by mid-2018, allowing LaClanché to manufacture
and properly evaluate sufficient numbers of anodes using TiO2 nanotubes.
2. Other prospective licensees will require similar volumes for evaluation purposes.
Therefore, UTR will likely need to further expand its production capacity, i.e. beyond
supplying just LaClanché. We expect UTR will need to establish at least 10 tons of annual
capacity in the next few years, just for evaluation purposes by prospective licensees.

Considering these development and scale-up challenges, we expect it will take

approximately two years before the first TiO2 nanotube-based anodes will be
commercially available. However, we believe there will be early commercial opportunities
for UTR, for instance through up front licensing and NRE fees.

Valuation based on peer group funding

UTR has three separate routes to commercialization, i.e. IP licensing, JV’s with chemical
manufacturers and potentially setting up its own manufacturing facilities. The company may go
down just one or two of these routes or all three simultaneously.
Trying to capture the financial implications of each of these routes in a financial model would
require making a significant amount of assumptions, such as the number of future licensees,
royalty rates, payment schemes, revenue sharing percentages with JV partners, future selling
prices of anode material, manufacturing volumes, Capex for proprietary manufacturing facilities
etc.
Given the sheer number of assumptions to be made and the early-stage nature of UTR’s
commercialization strategy, we believe any financial model based on these assumptions would
be highly fluid and not likely to be very accurate in hindsight.

Therefore, we believe looking at peer group funding and valuations will provide a better
measure of valuations the market attributes to emerging Lithium-ion battery players.

Relevant peer group mostly comprises of Venture Capital funded companies

As illustrated in Figure 10 there are quite a few publicly listed energy storage technology
companies around, including ASX-listed Red Flow Limited (RFX). However, all of these
companies already generate revenues (small or large), whereas we expect UTR to be about two
years away from generating recurring revenues based on commercial availability of TiO2
nanotube-based anodes. Furthermore, many of the listed peers are commercializing fairly
established technologies rather than newly emerging battery technologies.
16 Hence, we believe this group of listed companies doesn’t necessarily make the best
comparison base for UTR.
 UltraCharge Limited
F IGURE 10: LISTED ENERGY STORAGE TECHNOLOGY COMPANIES
Ticker Revenues FY18 Market cap EV/Sales
(US$ M) (US$ M) 2018
Red Flow Limited RFX 37.9 29.9 0.8
Energous Corporation WATT 59.5 304.9 5.1
AroTech corporation ARTX 101.3 106.4 1.1
Highpower International HPJ 202 77.2 0.4
Electrovaya EFL 38.7 91.6 2.4
Powin Energy Corporation PWON 0.5 65.3 130.6
Link Reservations LRSV N/A 5.8 N/A
Average 73.3 97.3 23.4

UltraCharge UTR - 15.6 N/A

Source: S&P Capital IQ, TMT Analytics

Israel-based, pre-revenue StoreDot valued at US$ 500M (pre-money)

Most of the VC funded peers, on the other hand, are early stage, pre-revenue companies that
have been established within the last five years (Figure 11), similar to UTR. And almost without
exception, these VC funded peers are developing technologies that have only started to be
developed in the last several years with commercialisation slated within the next two to three
years, again, similar to UTR.
F IGURE 11: VC FUNDING FOR BATTERY TECHNOLOGY
Company Headquartered Equity funding
to-date (US$ M)
Nexeon UK 108
StoreDot Israel 126
Amprius US 55
Enevate US 40
SolidEnergy US 20.5
Source: CrunchBase, TMT Analytics

One of the most noteworthy companies in this group is StoreDot, which is based in Israel.
StoreDot develops organic compounds using nanotechnology for use in batteries, displays,
sensors and digital memories. We believe the company is approximately two years ahead of
UTR in terms of development progress of its materials and has development labs, scaling
facilities and a pilot production line at its disposal.
US$ 500M pre-money valuation illustrates appetite for early stage battery technology
In its latest funding round in August 2017, in which Daimler, Samsung Ventures and Norma
Investments participated, StoreDot raised US$ 60M, bringing its total funding to date to
US$ 126M.
Interest from VC’s and strategic players
Most notable, however, was the pre-money valuation of US$ 500M (A$ 633M) attributed to
StoreDot in this funding round, given that the company is still pre-revenue. The post-money
valuation was US$ 560M (A$ 709M). In our view, these sorts of valuations illustrate there is
substantial appetite for promising, early-stage battery technologies.
17
 UltraCharge Limited
Furthermore, the fact that car manufacturer Daimler and handset manufacturer Samsung
participated in this round illustrates there is significant interest from strategic players as well, not
just from VC’s.
Growing partner pipeline to demonstrate UTR’s commercial value
Compared to StoreDot’s valuation, UTR’s current market cap of A$ 19.7M reflects the early-stage
nature of the company. However, as the company builds its network of potential JV partners
and IP licensees in the next several months and quarters, we expect to see the revenue
opportunities materialize.
In other words, more agreements, such as the LaClanché deal, will validate UTR’s technology
and build up the sales funnel. In turn, this should serve to illustrate the company’s commercial
potential, which should drive UTR’s valuation.
Even deeply discounted, there is substantial upside to UTR’s valuation
Taking StoreDot’s post-money valuation as a starting point, and applying very substantial
discounts to this valuation because of StoreDot’s development lead versus UTR, we believe
there is substantial upside to UTR’s valuation if the company is able to close a number of deals
with industry players in the next several quarters, including agreements to test TiO 2 nanotube
materials and a potential manufacturing JV.
Applying a 95% discount to StoreDot’s valuation implies a UTR valuation of A$ 36M, or
approximately double the current market cap (Figure 12). A 90% discount implies a value of
A$ 71M, or A$ 0.093 per share.
F IGURE 12: UTR VALUATION RANGE BASED ON STORE DOT POST -MONEY VALUATION
Discount to StoreDot’s Implied UTR Fully diluted valuation
Post-money valuation (A$ 709M) valuation (A$ M) per share (A$)

95% 35.5 0.047

90% 70.9 0.093
85% 106.4 0.140
80% 141.8 0.187
75% 177.3 0.234

Source: TMT Analytics

Initial share price target of A$ 0.09 per share

Even though valuation discount rates are arbitrary by default, we believe a 90% discount for UTR
versus an Israeli-based peer in the same high-growth sector, just two years ahead in terms of
development, is conservative enough to serve as the basis for an initial share price target. At
A$ 0.09 we believe UTR’s shares would reflect initial success in commercializing the company’s
technology in the next 12 months.
Key challenge: Generating and converting industry interest in TiO2 NT
This initial success will hinge on the company’s ability to garner sufficient industry interest in the
use TiO2 NT material for the manufacturing of Lithium-ion batteries, and the subsequent
conversion of this interest into initial IP licensing deals.

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 UltraCharge Limited
Conclusion
We believe UTR has the building blocks in place to become a leading-edge supplier of anode
materials through IP licensing and/or joint manufacturing of anode materials, to be used in the
future manufacture of Lithium-ion anodes. Due to superior performance characteristics of TiO2
nanotube anodes and price differential with graphite anodes, we believe the technology will be
very well suited to high-end applications, such as EV batteries and premium smart phones, in
particular.
Additionally, through acquisitions and licensing of complementary technologies, such as IP
around LMNO cathode materials, we believe UTR can deliver complete battery solutions, for
instance for the fast-growing EV market.
In terms of valuation, we believe VC-funded emerging battery technology companies provide a
good gauge of valuations the market is willing to pay for promising companies, with StoreDot
being highly comparable to UTR.
UTR’s key challenge in the near to medium term will be to generate and subsequently convert
industry interest in its TiO2 Nanotube anode materials. If and when successful, we believe there
will be substantial upside to the company’s valuation.
Hence, we start our coverage of UTR with a BUY rating and a price target of A$ 0.09 per share.
Near term share price drivers:
- MOU’s and /or commercial IP deals with suppliers to the Lithium-ion battery industry as
well as to battery manufacturers directly will support the business case.
- The production scale-up of TiO2 nanotube test materials will enable UTR to have more
prospects test the technology, which would expedite the commercial roll out. We expect
news flow around volume scale-up in the next several months.
- A joint venture agreement with one of the large TiO2 manufacturers, to potentially start
joint nanotube manufacturing, is actively being pursued by UTR.

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 UltraCharge Limited
SWOT analysis
Strengths
- UTR’s TiO2 nanotube technology combines fast charging and long lifespan with lower
weight and lower costs compared to current LTO technologies.
- UTR’s technology is faster, safer and lasts substantially longer than to graphite anodes.
- Through further development UTR should be able to improve the energy density of its
technology, bringing TiO2 nanotube at par with graphite energy density, or potentially better.
- UTR is currently an asset-light development company with the potential to generate very
attractive IP licensing margins if and when the company succeeds in licensing out its
technology.
Weaknesses
- Compared to graphite anodes, TiO2 nanotube anodes will likely remain more expensive.
- Lower operating voltages of TiO2 nanotube anodes implies the use of more cells or a
different cathode technology will be required to achieve a similar voltage output.
- UTR is a relatively young company with modest financial means, which may result in a
lower than hoped for pace of technological development and commercialization.
- UTR does not own the patents underlying the IP it is building upon. Should these patents
be infringed upon or challenged, UTR will be dependent on Nanyang Technology
University, the owner of the underlying patents, to successfully defend these patents.
However, new IP will be generated via the scale up process that will reduce that risk
substantially
Opportunities
- Lithium-ion battery demand is growing very substantially driven by strong growth in electric
vehicles sales, such as cars, e-busses and e-scooters, a market which will potentially be
larger than US$ 60BN by 2026, according to some estimates.
- There are potential opportunities for UTR to partner with established chemical companies
to bring the technology to market through joint ventures, which would give UTR more control
over the production and sales process when compared to a pure IP licensing arrangement
with potential licensees.
- As production scale of TiO2 nanotube material increases over time, assuming UTR will
license its technology to one or more chemical companies and cell manufacturers, we
expect pricing to fall, potentially opening up the market for TiO2 nanotube material to
broader markets.
Threats
- The Lithium-ion battery market is highly competitive with a number of large players chasing
market share. Additionally, there are many battery startups, i.e. innovative new companies
aiming to commercialize new technologies, not all of which have managed to stay in
business due to lack of funds and/or stagnating technological development.
- Other, superior, battery technologies may emerge, which could inhibit UTR’s roll out.
- Several of UTR’s new innovative technologies may require regulatory approval before they
20 can be applied commercially. Such approval processes with various authorities can be
lengthy and expensive, inhibiting UTR’s commercial roll out.
 UltraCharge Limited
Appendices
A: Board members
Doron Nevo (Non-Executive Chairman): Mr. Nevo is president and chief executive officer of
KiloLambda Technologies Ltd., an optical nanotechnology company, which he co-founded in
2001. From 1999 to 2001, Mr. Nevo was involved in fundraising activities for Israeli-based startup
companies. From 1996 to 1999, Mr. Nevo served as president and chief executive officer of NKO,
Inc., having established NKO in early 1995 as a start-up subsidiary of Clalcom Ltd. NKO designed
and developed a full scale, carrier grade, IP telephony system and established its own IP
network. From 1992 to 1996, Mr. Nevo served as president and chief executive officer of Clalcom
Ltd having established Clalcom in 1992 as a telecom service provider in Israel. Mr. Nevo holds a
B.Sc. in Electrical Engineering from the Technion -Israel Institute of Technology and a M.Sc. in
Telecommunications Management from Brooklyn Polytechnic. Mr. Nevo has served as a
director of NASDAQ-listed AudioCodes Ltd since 2000.
Kobi Ben-Shabat (Managing Director): Mr. Ben-Shabat was educated in Israel's Ruppin
Academic Centre in Business and Administration and concluded his tertiary studies with an
MBA in Marketing and Information Technology from the University of Manchester in 2000. After
working for various US-based technology companies, Mr. Ben-Shabat was seconded to
Australia where he was instrumental in the growth of the region's IP Surveillance and Security
industry. After noticing a market opportunity, he established Open Platform Systems Limited
(OPS). OPS swiftly became recognized as the predominant player in its technology space and
became a "pain point" for the region's long-established tier one providers. Australia's Business
Review Weekly magazine recognized OPS in its annual BRW Fastest Growing Companies index
three years consecutively. OPS was acquired by Hills Ltd (ASX:HIL) in April 2014. Mr. Ben-Shabat
has extensive experience with sales and senior management with a particular emphasis on
emerging markets and technologies.
Yury Nehushtan (Non-Executive Director): Mr. Nehushtan is a lawyer and has been a Member
of the Israeli Bar Association since November 1991. He is the Managing Partner of Nehushtan,
Zafran, Scharf, Jaffe & Co. Law offices, a boutique law firm specializing in commercial litigation
and labor law. Mr. Nehushtan gained a Law Degree at the Hebrew University in Jerusalem (1985-
1989) and a Master's Degree at the London School of Economics (1990) with a focus on
banking, finance and securities law. He has extensive experience in commercial and corporate
law, with a focus on large and complex legal disputes, including corporate, securities, contract
and commercial disputes, class actions, arbitrations and alternative dispute resolution.
John Paitaridis (Non-Executive Director): As the managing director of Optus Business, Mr.
Paitaridis leads the Optus' enterprise, business and government organisation. With 25 years'
industry experience, he is accountable for all aspects of sales, marketing, products, operations
and service delivery. Mr. Paitaridis joined Optus Business in 2012, bringing a deep understanding
of the telecommunications and ICT needs of enterprise and government customers. Previously,
he was an executive at Telstra. Mr. Paitaridis has extensive experience managing businesses in
international markets including almost 10 years based in Europe and Asia. He has a strong track
record of driving growth in sales, revenue and profitability as well as building high performance
teams. Mr. Paitaridis holds a Bachelor of Economics degree and is a graduate member of the
Australian Institute of Company Directors. In 2012, he was appointed as a member of the
Australian Information Industry Association's (AIIA) board of directors and in 2014 was
appointed deputy chair of the AIIA board.
David Wheeler (Non-Executive Director): Mr. Wheeler has more than 30 years executive
management experience, through general management, CEO and managing director roles 21
across a range of companies and industries. He has worked on business projects in the US, UK,
 UltraCharge Limited
Europe, New Zealand, China, Malaysia and Iran. He has been a Fellow of the Australian Institute
of Company Directors (FAICD) since 1990.

B: Titanium Dioxide Nanotube manufacturing process

Below is a step by step outline of the manufacturing process used by UTR to produce TiO2
nanotubes:
1. Titanium dioxide power is mixed with a base (Sodium Hydroxide also known as NAOH).
The NaOH has a molarity of 10 (10M NaOH). Molarity is a measure of concentration and
10M is a particularly concentrated sample of NaOH dissolved in water. This mixture is stirred
for 5 minutes and then transferred to a stainless-steel autoclave with a magnetic stirrer.
2. The autoclave is then placed in a silicon oil bath set at 130C for 24 hours during which the
mixture is stirred continuously by the magnetic stirrer.
3. The autoclave is removed from the oil and let to rest and come to room temperature.
4. The resulting product is Sodium Titanite (Na2O7Ti3) collected by centrifugation (using force
to settle solids out of a solid-liquid mixture).
5. The solids are mixed with de-ionized water (water with negatively or positively charged
atoms removed) several times to reach a pH (measure of acidity and basicity) of 9.
6. The now wet Sodium Titanite is subjected to a hydrogen ion exchange process. This is
achieved by passing the mix through a diluted Nitric Acid (HNO3) mixture three times.
7. The suspension is again centrifuged, washed with de-ionized water several times until it
reaches a pH of 7 (neutral pH). Now the Hydrogen Titanite nanotubes have been produced.

After the nanotubes have been produced as a gel or slurry they need to be incorporated into an
electrode for commercial purposes:
1. The titanite nanotube paste is dispersed in an ethanol (C2H6O) solution of concentration 4
to 6 mg/L and intensively stirred.
2. The paste is then spread on copper foil and heated at either 400C or 500C for 2 hours in
a vacuum environment.
The anode is then incorporated with a cathode and electrolyte materials to create a cell.

C: UTR capital structure

Ordinary shares 535.5
Escrowed shares 100
Performance shares 41.25
Options 82
Warrants 0
Fully diluted 758.8
Source: TMT Analytics

22
 UltraCharge Limited
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