Trading update and two new agreements signed

Gelion PLC

15 August 2023

 

15 August 2023

Gelion plc

("Gelion" or the "Company")

Trading update and new agreements for progressing Zinc-based Energy Storage solution

Agreements signed with The University of Sydney and Professor Yuan Chen

Gelion (AIM: GELN), the Anglo-Australian battery innovator, today provides an update on the Group's trading for the year ended 30 June 2023 and announces the signing of two agreements with The University of Sydney and Professor Yuan Chen for Gelion's Advanced Cathode Project, accelerating progress towards its Zinc-based Energy Storage Solution. The agreements are to utilise Gelion's recent zinc anode performance breakthroughs leading to Gelion's next generation of energy solutions - Gelion's Gen 5 Zinc Hybrid Cell.

Gelion's advanced Zinc technology offers not only a low cost, safe and robust chemistry, but by deploying it in a novel bromine-free hybrid cell format it also offers an inherently non-toxic improved power capability (higher currents) and cycle life performance. Initially, it is expected to be highly competitive against lead acid batteries in applications such as Stand-Alone Power Systems (SAPs), Voltage Regulation, Telecom, and home Uninterrupted Power Supplies (UPS), with market size estimated to be over US$7 billion. Following additional later development, Long Duration Energy Storage (LDES) applications will be targeted as well.

Trading Update

Unaudited financial results for the year ended 30 June 2023 are expected to be ahead of current guidance:

·	Revenues for the year are expected to be £2.0m ahead of current guidance of £1.7m.
·	Adjusted EBITDA loss* expected to be approximately £6.0m, lower than guidance of £6.4m.
·	Net cash at 30 June 2023 was £7.3m, marginally higher than the current guidance of £7.1m. The balance at 30 June 2023 is post the £3.0m cash used to acquire the Johnson Matthey Intellectual Property (IP) portfolio in March 2023.
·	Since March 2023, the Company has been focused on reducing costs and has taken steps to reduce cash consumption by c. £1.0m on an annualised basis.

*Adjusted EBITDA loss (defined as the Earnings Before Interest, Tax, Depreciation, Amortisation, & other non-recurring items)

Highlights of agreements with the University of Sydney to accelerate progress of Gen 5 Zinc Hybrid Cell

·	Signed two agreements with The University of Sydney, centered on Professor Yuan Chen and his Laboratory for Advanced Carbon Research. Gelion's Advanced Cathode Project will work to jointly progress an advanced cathode for its Gen 5 Zinc Hybrid Cell. These research streams are expected to generate commercially relevant prototypes by the end of 2023.
·	This programme leverages the learnings from the manufacture of 1,200 Zinc Bromide (ZnBr2) batteries at the pilot manufacturing facility in February 2023 and the Battery Management Systems (BMS) development since then, as part of the R&D pathway to commercialisation.
·	Professor Chen will act as a consultant to Gelion, providing his guidance and experience to accelerate progress in both technical and commercial aspects of the Gen 5 Zinc Hybrid Cell development.
·	Any IP developed during the project will be retained by Gelion.

The two agreements follow the announcement on 6 July 2023, regarding the achievement of significantly improved zinc plating behaviour that reduces cell maintenance requirements. This breakthrough resulted from the 12‑month ZnBr₂ research programme (R&D Programme) launched earlier this year to achieve all three key objectives in the one design simultaneously, i.e. safety, energy density, and cost.

Due to this zinc technology innovation, Gelion was able to identify and migrate to a zinc-based energy storage solution that is bromine-free, i.e. a Zinc Hybrid Cell. It will continue to validate this technology for the remainder of 2023, consistent with the timelines communicated for Gelion's R&D Programme earlier this year.

Commenting on the update, John Wood, CEO said: "Zinc is positioned to be a very important battery element due to its abundance and low cost. We have now modified the direction of our Gelion Zinc cell activities toward a hybrid cell that is designed to both be readily scalable because of its safety, cost, and the materials chosen, while delivering features important to the market including robustness, a wide temperature tolerance, the ability to use a wide range of charge and be stored and transported in a discharged state.

"We are very fortunate to be able to work with Professor Yuan Chen to incorporate his research, understanding, and experience to move both quickly and directly towards our goals. We are conducting an accelerated validation until the end of this year before setting out our zinc commercialisation plan and will update soon after. We are very confident this is a key positive inflection point in our zinc activities.

"I am also very pleased with the progress we have made so far, be it the strategic Lithium Sulfur IP acquisition, plans to expand the Lithium Sulfur R&D facility, pivoting from Zinc Bromine to Gelion's Gen 5 Zinc Hybrid Cell, or securing the collaboration with The University of Sydney. These are all a result of focused efforts on product refinement to reduce costs to market, improve processes and speed to market. I am also delighted to report that we have slowed down our cash consumption considerably and will provide an update on the cost saving measures and the 12-month plan at the time of announcing our final results."

Professor Chen commented: "I am excited to be part of this programme as all my research aims to develop efficient, cost-effective, and reliable energy storage solutions. It is a perfect fit, underpinning Gelion's commercialisation in a highly prospective space."

Background

On 6 July 2023, the Company announced that it had identified a Zinc Energy Storage Solution which will comprise a zinc cell with an alternate cathode technology to progress beyond challenges that had been identified with dendritic growth and Bromine sequestration that were resulting in higher costs and safety issues under forcing conditions. 

Continuing with its progress on the R&D programme, the new Advanced Cathode Project will aim to develop an advanced cathode for Gelion's Gen 5 Zinc Hybrid Cell with key research on carbon-based cathode materials, current collectors, and advancements in electrolyte formulations that will directly contribute to increased safety, higher energy density, and cost improvements.

Professor Chen has a PhD from Yale University and is a Fellow of The Royal Society for Chemistry (UK), the Royal Australian Chemical Institute, and the Institution of Chemical Engineers. He also serves as editor for a highly regarded scientific journal Carbon (Elsevier) and has over 20 years of experience in researching energy storage related materials, including zinc-based systems.  

The collaboration will initially run for up to two years as part of an intensive commissioned R&D project including the initial validation of the technology in 2023 followed by ongoing development work to progress to commercialisation. This project will have combined teams from The University of Sydney and Gelion's experienced zinc cell research team as well as strong involvement from Gelion's Founder and Principal Technology Advisor, Professor Thomas Maschmeyer. Importantly, the new system will leverage the progress achieved with Gelion's zinc anode, prismatic cell design, and systems, and intellectual property rights relating to key deliverables of the advanced cathode project will be retained by Gelion.

CONTACTS

Gelion plc John Wood, CEO Amit Gupta, CFO Thomas Maschmeyer, Founder and Principal Technology Advisor	via Alma PR
finnCap Ltd (Nominated Adviser and Sole Broker)	[phone]
Corporate Finance Christopher Raggett Seamus Fricker Fergus Sullivan ECM Barney Hayward
Alma PR (Financial PR Adviser) Justine James Hannah Campbell Will Ellis Hancock	[phone] [e-mail]

 

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