K TIG : June 2022 Quarter Activities Update and Appendix 4C

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ASX: KTG

ASX Announcement 29 July 2022

JUNE 2022 QUARTERLY ACTIVITIES REPORT

Highlights

• Despite seeing a lengthening in sales cycle due to economic conditions the company achieved quarterly revenue of $765k, which represents 36% growth compared to June Quarter 2021
  (prior corresponding period, or "PCP")
• Quarterly cash receipts of $864k representing 84% growth compared to PCP
• Unaudited full year revenue for twelve (12) months to 30 June 2022 of $3.7m which represents a 137% growth over 2021 financial year
• The Company had c.$3.8m cash as at 30 June 2022
• Improved brand and technology recognition has lead to a record pipeline of 285 opportunities, a 142% increase on PCP
• K-TIGcontinues to make progress in the GBP 1.7bn UK nuclear decommission waste containers sector following the signing of an agreement with UK NAMRC
• K-TIGand Darchem sign non-binding MOU to agree on intent to novate contract for supply of 3M3 ILW nuclear storage containers

K-TIG Limited (ASX: KTG) ("K-TIG" or the "Company"), a technology company deploying a fully commercialised industry-disruptive high-speedwelding technology provides the following summary of activities during the Quarter ended 30 June 2022.

The Company is pleased to report the following June 2022 quarterly results:

• Quarterly sales revenue of $765k representing 36% growth compared to June Quarter 2021.
• Quarterly cash receipts of $864k representing 84% growth over prior comparable period.
• Cash at bank of $3.8m.

The Company is pleased to report the following unaudited full year results:

• Annual sales revenue of $3.70m representing 137% growth over twelve (12) months to 30 June 2021 revenue of $1.56m.
• Annual cash receipts of $4.29m representing 264% growth over twelve (12) months to 30 June 2021 cash receipts of $1.18m.

K-TIG Limited (ACN 158 307 549)	◼ ASX:KTG ◼ 16 Ord Street, West Perth ◼ [phone] ◼ www.k-tig.com
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The June quarter has seen continued significant progress with the achievement of a number of strategically important milestones being achieved across key strategic pillars.

UK Nuclear

As announced to the market on 29 July 2022, the Company has entered into a non-binding MOU with Darchem Engineering Limited ("Darchem") regarding the intent to novate an Intermediate Level Waste, ILW, Nuclear Storage container contract that Darchem has to K-TIG to facilitate company technology development and optimise the design and manufacturing process for Intermediate Level Waste containers.

Darchem is a market leader in the design, manufacture (and if required installation) of a wide range of high integrity engineered products in stainless steel and titanium as well as thermal insulation systems for aerospace, motorsport, marine defence, nuclear and oil & gas applications.

Darchem has extensive experience in the global nuclear industry with products in more than 180 nuclear sites worldwide and is a supplier of 3M3 ILW containers into the UK nuclear decommissioning program.

Previously, K-TIG had entered into a research and development agreement with the Nuclear Advanced Manufacturing Research Centre (NAMRC) with the purpose of optimising the design and manufacturing process for the suite of 3M3 ILW nuclear waste storage containers. A key part of this research is the development of sophisticated Quality Control (QC) and Quality Assurance (QA) technology. The QC/QA technology encompasses acoustic arc, ultrasonic and visual inspection technology to minimise welding defects, reduce rework, reduce the need for expensive X-Ray inspections, and ultimately reduce the total cost of welding quality.

Successful novation of this contract from Darchem to K-TIG will provide K-TIG with direct access to a 3M3 intermediate level waste containers contract and, subject to the establishment of fabrication capability, the production scale to compile the necessary Artificial Intelligence (AI) database to support the development of its QC/QA technology.

The MOU with Darchem is another significant step for K-TIG towards executing its nuclear waste storage strategy and extending its commercial presence in the UK and the EU.

Customer Acceleration

The Company continues to build sales momentum, despite seeing a lengthening in sales cycle due to current economic conditions, with strong progress made during the quarter in the US, UK and European markets.

During the quarter, the Company saw its sales pipeline continue to grow month on month both in the US, UK and European markets as potential customers responded to the increased capabilities.

During the quarter K-TIG further enhanced its US Westmoreland demonstration facility with full pipe spooling capability. This enhanced facility with further support our US based customers.

K-TIG continues to expand third party sales channels to complement K-TIG's direct sales force. As at 30 June 2022 K-TIG has 8 appointed distributors with 9 potential distributors in review.

K-TIG Limited (ACN 158 307 549)	◼ ASX:KTG ◼ 16 Ord Street, West Perth ◼ [phone] ◼ www.k-tig.com
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During the quarter K-TIG appointed Artec as a distributor in Ireland. Artec is a precision tool welding service provider, which includes the use of laser welding technology, to the manufacturing industry throughout Ireland.

The distributor pipeline is healthy with K-TIG in discussions with multiple tier one (welding automation system manufacturers and integrators) where we anticipate adding additional distributors in coming quarters.

K-TIG's distributor relationship and lead generation activities are actively underway and include active promotion of distributors within K-TIG's digital assets, new geo digital functionality within K-TIG's website of a distributor location and distributor landing page.

Defence

As previously reported K-TIG is actively working with global primes on assisting them to deliver Australia's next generation or maritime capability to provide pipe spooling, deck plate and light weight structure solutions to dramatically lower fabrication costs.

The Australian maritime defence industry is estimated to be worth approx. $90 billion.

During the quarter the Company has been actively working with a customer to undertake CuNi pipe welds. CuNi piping is used extensively in maritime pipes due to its resistance to sea water corrosion and fouling. K-TIG anticipates being able to provide an update to the market shortly.

K-TIG continues discussions with Hanwha Defence regarding technical qualification of Redback subsystems in support of the Australian Land 400 manufacturing program. Further updates will be provided in due course.

Research and Development

The Company continues to make good progress with the Evolve 3 product development. During the quarter K-TIG successfully completed development of the user interface, including multi- language support to target non-English speaking customers and demonstrated control of the torch power supply with the new Evolve 3 software. K-TIG is on-track to undertake our first welding arc with the new software over the coming months.

Corporate

The Company notes the macro and geopolitical headwinds that are impacting global markets. The Company is taking proactive steps to navigate current market conditions including reducing discretionary spend, deferring non-essential capital expenditure and taking steps to reduce its overall cost base.

The Company is also actively assessing R&D tax incentive rebate applications and other grant funding opportunities. The Company advises that it has received a $186k R&D tax incentive in July 2022 for the R&D claim for FY21; and we anticipate future investments will also give rise to eligible R&D claims.

K-TIG Limited (ACN 158 307 549)	◼ ASX:KTG ◼ 16 Ord Street, West Perth ◼ [phone] ◼ www.k-tig.com
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Financial Summary

The attached Appendix 4C provides details on the cashflows for the quarter ended 30 June 2022. As at 30 June 2022 the Company had a cash balance of $3.8m. The Company's net cash used in operating activities for the quarter amounted to $1.091m comprising $0.864m receipts from customers, $0.04m for research and development, $0.376m for product manufacturing and operating costs, $0.118m for advertising and marketing, $1.067m for staff costs and $0.352m for administrative and corporate costs.

As disclosed in item 6.1 of the attached Appendix 4C, $0.209m was paid in respect of directors' fees and consulting fees to entities associated with the directors including company secretarial and accounting & bookkeeping services during the June 2022 quarter.

Pipeline

A summary of the current lead pipeline broken down by sales stage as at 30 June 2022 is set out below.

This announcement was authorised for issue by the Board of K-TIG Limited.

For more information, please contact:

Company enquiries	Corporate enquiries	Media / Investor enquiries
Adrian Smith	George Rogers	Michelle Vella
K-TIG Limited	SRG Partners	Corporate Conversation
P: [phone]	P: [phone]	P: [phone]

K-TIG Limited (ACN 158 307 549)	◼ ASX:KTG ◼ 16 Ord Street, West Perth ◼ [phone] ◼ www.k-tig.com
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About K-TIG Limited

K-TIG is a transformative, industry disrupting welding technology that seeks to change the economics of fabrication. K-TIG's high speed precision technology welds up to 100 times faster than traditional TIG welding, achieving full penetration in a single pass in materials up to 16mm in thickness and typically operates at twice the speed of plasma welding. K-TIG works across a wide range of applications and is particularly well suited to corrosion resistant materials such as stainless steel, nickel alloys, titanium alloys and most exotic materials. It easily handles longitudinal and circumferential welds on pipes, spooling, vessels, tanks and other materials in a single pass. Originally developed by the CSIRO, K-TIG owns all rights, title and interest in and to the proprietary and patented technology and has been awarded Australian Industrial Product of the Year and the DTC Defence Industry Award.

Forward Looking Statements

Statements contained in this release, particularly those regarding possible or assumed future performance, revenue, costs, dividends, production levels or rates, prices or potential growth of K-TIG Limited, are, or may be, forward looking statements. Such statements relate to future events and expectations and, as such, involve known and unknown risks and uncertainties. Actual results and developments may differ materially from those expressed or implied by these forward-looking statements depending on a variety of factors.

K-TIG Limited (ACN 158 307 549)	◼ ASX:KTG ◼ 16 Ord Street, West Perth ◼ [phone] ◼ www.k-tig.com
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