Active Energy : Interim Results 2020 Presentation

Interim Results 2020

Developing next generation biomass fuels using sustainable & waste resources

Disclaimer

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2

AEG: Value Proposition

Focused strategy on the waste to energy market

1. Established an operating lumber company at Lumberton site including
2. • Saw log operations for the export market
   • Saw mill operations producing rail ties, and otherco-products
3. On path tobreak-even and generate positive cash flow
4. • Commenced double shift operations per day, 5/6 days/week
   • Saw log export deliveries now being delivered to international customers
5. Lumber operations complementary to AEG's CoalSwitch™ Biomass technology
6. • Granted air quality & construction permit to begin construction of a 5tph
     CoalSwitch™ facility
   • Waste already stored from Lumber operations provideslow-cost biomass feedstock
   • Planning may now commence on a larger scale production facility with its own permits
   • Targeting a rapidly growing market for next generation biomass renewable fuels
7. Highly experienced management team at Lumberton focused on delivering performance targets

Lumberton to become a profitable centre for the forest-to energy supply chain

3

Lumberton - a strategic location

Strategically located hub for lumber and biomass pellet operations in the US

• Established Facility:permitted facility, covering 415,000 sq. ft of covered factory space and circa 151 acres of surrounding land adjacent to an existing biomass power facility
• Established Infrastructure:in-house water treatment facilities, existing power and gas supplies, and research and analysis lab on site with all relevant operational permits
• International Connections:well connected to established export routes for sales to Europe and South East Asia
• Eligible for government grants and support:already awarded US$500,000 grant by U.S. Department of Housing and Urban Development in April 2019
• Additional Revenue Opportunities:Lumberton site is attracting new commercial partners

AEG: A focussed plan for 2020/2021

Huge opportunity at Lumberton

Multiple revenue generating opportunities:

• Currently producing a variety of lumber products from saw mill activities with daily production targets
• Saw log export operations to expand from the US East Coast under contracted volumes
• Construction of the 5tph reference plant to manufacture biomass fuels
• Commence scaled production of CoalSwitchTMfuels for delivery to potential large scale customers both in the US and internationally
• Develop a R&D programme to create new biomass fuels from alternate waste resources
• Commence engineering and design planning for a larger scale commercial black pellet production plant
• Sign additional licences/partnerships in the US and internationally for the IP
• Re-evaluateexisting forestry projects to create complementary commercial opportunities

COVID-19 environment has not slowed the plan to develop existing operations

5

AEG delivering on goals

Unlocking the proven potential

	June 2020	June 2020	August 2020
	Placing to raise
January 2020	Full year results
Final Permit meeting
£1.510 million
Strengthened	demonstrating significant
held
Board	revenue

March 2020	June 2020	August 2020	September 2020
Acquisition of all	£800,000 Fundraising
Permit granted for 5	Commencement of
lumber activities	through CLN
tph CoalSwitch Plant	two sawmill shifts

6

Financial Performance

Consolidated income statement - June 2020

Revenue US$000

US$000

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

0

2017

2018

2019

H1 2020

Loss for the period US$000

Total other comprehensive income (expense)

	2017	2018	2019	H1 2020		US$000
	0				1,400
	-2,000				1,200
				1,000
	-4,000			US$000	800
US$000
-6,000			600
	-8,000				400
				200
-10,000				0
-12,000				-200
-14,000				-400
			-600
-16,000				2017	2018	2019	H1 2020

8

Statement of financial position - June 2020

Intangible assets US$000

10,000

9,000

8,000

US$000	7,000
6,000
	5,000
	4,000
	3,000
	2,000
	1,000
	0

2017 2018 2019 H1 2020

Net current assets /(liabilities) US$000

	2017	2018	2019	H1 2020
	0
US$000	-500
-1,000
	-1,500

-2,000

-2,500

Property, plant and equipment US$000

12,000

10,000

US$000	8,000
6,000
	4,000

2,000

0

2017

2018

2019

H1 2020

Net assets /(liabilities) US$000

	1,000
	500
	0
US$000	-500
-1,000
-1,500
	-2,000
	-2,500
	-3,000
	2017	2018	2019	H1 2020

9

Our immediate focus: Targets to Year End 2020

Production and Strategic Goals

Lumber operations already value accretive

• Implemented a second shift in September 2020 to increase production volumes
• Developing and ramping up a saw logging export business from US east coast with contracted volumes
• Local feedstock supply contracts established
• Examining other niche lumber product opportunities

Increasing production and revenue targets expected during Q4 2020/2021

CoalSwitch™ Biomass Facility construction to begin

• Local Engineering partners appointed
• Target to achieve initial production volumes of CoalSwitch™ biomass black pellets during first half of 2021*
• Planning for production capacity expansion through 2021
• Addressing commercial & licensing enquiries from North America, Asia and Europe
• Planning for new production capacity to meet demand from potential customer contracts

Revenue generation from CoalSwitch™ expected in in first half of 2021; significant step up

in production through 2021 & 2022

*Subject to any further COVID-19 restrictions 10

AEG's product - CoalSwitch ™

Strategy for Biomass Technologies

Become a leading provider in next generation biomass fuels

• AEG has spent the last five years developing and working on its proprietary CoalSwitch™ production technology
• The core component of the process is steam explosion and this creates an ability to transformlow-cost and waste biomass materials into high-value, energy efficient and carbon neutral biomass fuels
• Immediate strategic focus is for production of CoalSwitch™ (black pellet) fuel:
• • Addressing the increasing environmental concerns about white pellet consumption
  • Obtaining sufficient production data to facilitate the manufacture/licence of larger scale production facilities
  • To deliver next generation biomass fuels to customers (mainly utilities, both in the US and internationally) who are requesting the opportunity to burn in existing biomass and/or coal power stations
• Developing additional proprietary technologies to allow AEG to grant licences to commercial partners both within the US and internationally

12

Opportunities for CoalSwitch™

Creating a new pipeline of biomass products using CoalswitchTMtechnology & other waste streams

Animal Waste

Using CoalSwitch™				Agricultural
			Waste

Technology:

Coal Fines

Agricrops

• Blended with animal faeces including hog and chicken waste to produce a biomass based fuel
• Addresses a significant waste and environmental problem in the US, notably on US East Coast
• Blended with unused forestry and farming industry plant waste products
• Opportunity to secure feedstock at a significantly low cost
• Blended with harmful deposited coal fines to produce a environmentally friendly fuel product
• Utilising new crops, such as miscanthus - which are more efficient both for crop yields and cost of production

Future product lines to be the focus of research & development

13

Long term growth strategy

1. Develop an integratedForest-to-Energy/ResidualFibre-to-Energysupply chain capable of producing & delivering biomass fuels.
2. Lumberton provides the first commercial model of a hub facility which can accommodate a variety of complementary activities from lumber to biomass production. AEG is acquiring the knowledge and experience to build or license small or large scale production facilities.
3. Accelerate R&D on next generation biomass, utilising existing waste as a major ingredient and provide improved and more "environmentally aware" biomass products
4. Establish partnerships with (1) engineering suppliers, (2) forestry and agricultural partnerships and (3) customers for long termoff-take agreements
5. Technology and additional IP licencing will be a component of future activities

Focus is to become an environmental biomass solutions supply chain provider

14

Active Energy Group plc

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Registered Office

27-28 Eastcastle Street, London W1W 8DH UK

Registered in England and Wales

Company No. 03148295

Advisers:

Nomad and Joint Broker: SP Angel Corporate Finance LLP

Joint Broker: Allenby Capital Limited

Financial PR: Camarco