Redflow : Quarterly Update and Appendix 4C

For personal use only

June 2022 QUARTERLY ACTIVITIES REPORT

29th July 2022

Redflow launches Gen3 battery and advances sales activity

Redflow Limited (ASX: RFX) (the 'Company' or 'Redflow') is pleased to provide its quarterly activities report, together with its Appendix 4C for the quarter ended 30 June 2022 (Q4 FY2022).

Key highlights of the Quarter and subsequent developments include:

• Q4 FY2022 cash receipts of $291k with Year to Date cash receipts of $2,715k. This represents a 75% increase on previous corresponding period (Q4 YTD FY2021: $1,556k)
• Gen3 battery released into production with major technology advances
• Uplift in interest and orders received since Gen3 announcement, including a 560 kWh system for the Iconic Southern Ocean Lodge rebuild on Kangaroo Island, South Australia
• Over 250 active deployments globally, a 25% increase over the previous 12 months
• Exclusive LOI for new 5.8MWh Anaergia project progressing through site development
• Cash balance of $9.04 million as at 30 June 2022 underpins growth initiatives

Commenting on the progress made in Q4 FY2022 and outlook, Redflow CEO and Managing Director Tim Harris said:

"During the quarter we focused on final testing for our Generation 3 battery, and I am delighted that the battery is now in production in Thailand and ready for commercial sale. Importantly, the Gen3 battery has been designed to enable productivity and drive automation into our manufacturing line, which will generate significant cost, productivity and quality benefits.

"We have continued to progress our significant pipeline of opportunities in the US and Australia, and have received a number of initial Gen3 orders since our official launch on the 7th of July, including a 560 kWh order for the landmark Southern Ocean Lodge in South Australia. I look forward to providing more information to the market as we convert opportunities in our sales pipeline into purchase orders.

"More broadly, the global energy storage market has continued to accelerate. When combined with

For personal use only

the ongoing supply side challenges with Lithium, the need for proven, scalable commercially competitive energy storage alternatives is higher than ever. Redflow is also well placed to support the new US - Australian Clean Energy Partnership, signed earlier this month which has a goal to unlock innovation to accelerate the global clean energy transition, including a specific reference to long duration storage.

"Redflow is uniquely placed as a global leader in lithium alternative stationary energy storage solutions to support companies, industry and governments as they look to execute on their renewable energy commitments."

Sales update

Activity has continued around the partnership with Anaergia following the previously announced non-binding Letter of Intent (LOI) with Anaergia's subsidiary SoCal Biomethane, to collaborate on a potential new fully wrapped solar and 5.8 MWh energy storage system in California. This has included Anaergia formally selecting a project developer and an on-site review of the Victor Valley site with Anaergia, RFX and the developer management in June, to finalise the design. Engineering work has commenced in anticipation of filing the required grid connection application and environmental permit applications. Pending approvals, the Gen3 batteries and Energy Pods for the project will be expected to be delivered in the second half of 2023.

Earlier this week, Redflow was delighted to announce an order for 56 of its Gen3 batteries for the iconic Southern Ocean Lodge rebuild on Kangaroo Island, South Australia. The batteries will form part of its new hybrid renewable energy system. The project will be the first large scale deployment of the Gen3 battery in Australia, with batteries deployed by the end of the year.

Redflow continues to expand its sales pipeline, and has received substantial interest in its Gen3 batteries, which are now ready for commercial sale. Redflow's 2 MWh California project has continued to raise Redflow's visibility in the US energy market, with the site visited by a number of prospective customers, partners and project developers. In addition, Redflow has continued to progress engagement with a number of leading US Engineering Procurement and Construction companies (EPCs), which are targeted to support execution of key deals in the sales pipeline.

Engineering update

Redflow's new Gen3 battery commenced production in Thailand at the beginning of July, and is now ready for commercial sale. Production will be steadily increased over the next few months to bed down new Gen3 specific processes.

The Gen3 battery design delivers significant manufacturing cost reductions while also improving performance through innovations in stack design, updated electronics with increased functionality, and a new tank design and cooling system. This was achieved by applying significant operational learnings from the Gen2.5 batteries, which have delivered over 2 GWh of energy and exceeded 10 million hours of field operations since 2018. The Gen 3 battery has approximately 50% less parts and will enable a 40% reduction in production time compared to the Gen2.5 model.

The combination of Redflow's new Energy Pod products with the Gen3 battery provides a platform for the company to capitalise on the global demand for large scale, medium to long duration energy

For personal use only

storage systems. The new Gen3 battery allows for Redflow to operate at a competitive price that will deliver further benefits as production scales up, supporting its immediate growth plans.

Financial update

The Appendix 4C quarterly cashflow report for Q4 FY2022 is attached.

Cash receipts for Q4 FY2022 were $291k (Q4 FY2021: $214k), and trade receivables were $382k.

As at 30 June 2022, Redflow had a cash balance of $9.04 million.

The following is a Summary of Receipts and Expenditures for the June quarter 2022 business activities (refer also accompanying ASX Appendix 4C):

Notes:

1. Numbers in the table are presented on a cash basis, consistent with the ASX Appendix 4C.
2. Numbers exclude the effect of movement in exchange rates on cash held.
3. Expenditures include allocation of staff costs, which are shown as a separate line in the ASX Appendix 4C.

Payments to related parties over Q4 FY22 were $203k, relating to fees paid to directors over the quarter.

This announcement was authorised for release by the Chairman of the Board of Redflow Limited.

-- ENDS --

About Redflow