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WaveTech GmbH

WaveTech has developed a unique enhancement technology to extend Lead Acid battery life for predominantly industrial, automotive and storage solutions.

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WaveTech GmbH

Germany

www.wavetech.de

  • Introduction

    WaveTech’s patented Crystal Control Technology® addresses the problem of battery waste and high replacement costs by effectively renewing the active material within batteries. CCT® manipulates crystal formation on the electrodes to double battery life and triple the lifecycle capacity.

    WaveTech specializes in the development of technologies to manipulate crystallization formations within fluid media. WaveTech’s patented Crystal Control Technology (CCT®) technique deploys disruptive static and dynamic electrical fields to prevent or to stimulate crystal growth. WaveTech produces highly competitive products that can be used in products where crystal formation plays an important role. Currently used to alter the molecular structures of crystal formations at the electrodes in a lead-acid battery. The applications of CCT® in commercial product lines are numerous for both industrial and domestic use.

    The Company has taken the next step in product evolution with its BEAT (Battery Enhancement And Treatment) product line. This acronym also refers to a “heartbeat” or “pulse”, which is how WaveTech’s products deliver its Crystal Control Technology®; via electric pulses that are sent through the battery when the BEAT® is active. The essence of the BEAT® product line is now caught in a printed circuit board/microchip circuitry that is integrated into the battery lid. This has the advantage that it hardly interferes with the battery manufacturing process. Battery producers can either purchase the lid with CCT® inside or license the technology to manufacture their own lids. This provides a new generation of batteries for multiple applications.

    The company has finalized R&D for their lithium technology and will start first testing by Q1 2018. Internal studies show that a similar effect can be achieved on lithium batteries, which would be a breakthrough.

  • Management

    Management

    Dag Arild Valand | Founder & CEO

    Dag is a constructional engineer with over 20 years of international experience in the battery industry and a pioneer in introducing battery pulsing to the European market. He is founder and director of several businesses and has proved successful in developing and establishing companies in the market.

    Dr. Ove T. Aanensen | Founder

    Vast international experience and the first European to build a Rubin laser. Ove holds a PhD in physics and a Masters degree in business studies from Harvard. He is a member of Norway’s Technical Scientist Academy and has previously held roles as director of Electric Buary (Norway’s largest IT group) and as Norwegian Consul in Germany.

    Silas Poel | COO

    Silas’ background is in business administration. As investment consultant, he supported several family offices in building up their private equity portfolio and formed the clean-tech portfolio for a Munich-based family. He was also in charge for business development within this portfolio. Silas has a broad international background in cleantech, company and business development.

  • Market

    Market Overview

    Governments, and leading environmental authorities all over the world, confirm the urgent need for innovation in energy saving solutions and carbon reduction. Over the next 30 years, trends indicate there will be dramatic change to find and implement global energy solutions; this is driven by the need to implement alternative energy sources to fossil fuels and the sociocultural factors that demand clean air (CO2 reduction), water and sustainable energy that is essential for human beings. These issues are an inspiration and catalyst to new research and the development to solve such technological challenges.

    Today, batteries often fail to reach 1 year. The bus and truck industry put pressure on battery makers to extend the warranty for lead acid batteries to 4 years. In many applications, in countries with extreme climate conditions, the lifespan of lead acid batteries is shortened to between 1 and 3 years. Urbanization in various developing countries has also lead to a higher need for backup power. Trucks, buses and cars require an increasing power supply because of start-stop-systems and on-board electronics. More complex grid structures increase the demand for energy storage solutions. WaveTech’s products have the scope to address the entire lead acid battery market, as well as the rapidly growing lithium battery market. WaveTech is initially concentrating on four market sectors with tests and/or contracts with large customers already advanced in all four segments:

    • Buses & Trucks (€4.2 billion)
    • Telecommunications (€1.7 billion)
    • UPS (uninterrupted power supply) (€1.5 billion)
    • Electrical forklifts (€0.8 billion)

    At a later stage, the automotive industry (revenue potential €19 billion will be addressed)

     

    Lead Acid Battery Market

    The global lead acid battery market size was valued at USD 46.6 billion in 2015 and is expected to witness growth owed to its increasing usage in vehicles and UPS along with advancements in manufacturing processes. The growing demand for stationary lead acid batteries in off-grid renewable energy generation is expected to augment market size.

    The development of the passenger car, commercial vehicle, and motorcycle industries, along with growing application of energy storage applications is expected to drive industry demand in the near future. Increasing requirement of UPS in industrial sectors including oil & gas, manufacturing, chemical, and healthcare has spurred industry demand.

    U.S. lead acid battery market, by product, 2014 - 2025 (USD Million)

    US Lead Acid Battery Market

     

    Low cost coupled with reliable performance is anticipated to drive the growth in the future. However, high lead content in the product can harm the environment and is expected to restrain growth. In addition, the low energy density of these products is anticipated to restrict growth. However, the increasing demand for alternatives such as lithium ion battery in automobiles is likely to pose challenges for growth in the future.

    Development of the auto industry in India, Mexico, Indonesia, South Korea, Thailand, and Vietnam is anticipated to stimulate industry size. Growing inclination towards pollution-free electric vehicles coupled with technological developments is expected to fuel product demand over the upcoming years.

    The global market is dominated by major players including Johnson Controls, GS YUASA, Exide Technologies, East Penn, and EnerSys. Johnson Controls was one of the prominent lead acid battery industry players in 2015 and accounted for over 25% of the market share

    Automotive was the largest segment in 2015 and accounted for 59% of the global market revenue. The extensive usage of these products in the automotive sector is expected to grow as a result of increasing manufacturing of vehicles globally. The enriched distribution system of lead acid batteries along with the ready availability has also fueled the growth of the industry. 

     

    Global lead acid battery market volume, by application, 2015 (%)

     

    UPS is expected to gain substantially over the projected period at a CAGR of 7.2% owing to an increasing requirement for uninterrupted power supply in residential, commercial, and industrial sectors. Asia Pacific industry for UPS is expected to rise significantly over the forecast period on account of the rapid development of data centers and IT industries in the region.

    Market share by application over the period is expected to remain with minimal change to individual market shares. The automotive segment will continue to dominate the market with a 60% share.

     

     

    Lithium-Ion Battery Market

    The lithium-ion battery market is highly competitive in nature because of the presence of large and small-scale manufacturers, specifically in the U.S., China, and Japan. The global lithium-ion battery market size was valued at USD 22.8 billion in 2016 due to its increasing demand for grid storage and electric vehicles as it offers lightweight and high-energy density solutions. Increasing registration of electric vehicles (EVs) along with decreasing lithium-ion battery cost is anticipated to augment industry size over the forecast period.

    The rising number of PV installations and nuclear power plants along with the commencement of New Wind Energy Projects are anticipated to stimulate the market growth over the forecast period. Rising off-grid installations in China, U.S., Germany and India along with increasing adoption of lithium-ion batteries in medical equipment is expected to promote industry expansion over the forecast period.

     

    U.S. lithium-ion battery market revenue by product, 2014 – 2025 (USD Million)

     

    The product is commonly used in electronic devices such as mobile phones, digital cameras, and power tools. The demand for the product in the manufacturing, solar power, and railway industries is expected to increase with the growing need for power backup and storage. High density, long life span and reduction in battery prices will drive product demand over the forecast period.

    Rising demand for other batteries including lead acid battery, lithium-air, flow battery, and sodium nickel chloride batteries in electric vehicles, energy storage, and consumer electronics is expected to restrain lithium-ion battery market over the forecast period.

    The trend of renewable energy generation was driven by increasing concerns about climate change, favorable government incentives, decreasing price of solar photovoltaic cells, and declining cost of batteries.

    Hybrid & electric vehicles will witness growth on account of substitution from fuel to electric batteries. In addition, government's stringent regulations on emission norms in order to safeguard the environment and to reduce the degradation based options are expected to play a critical role in shaping the overall battery market.

     

  • Products/Services

    Global Problems of Lead Acid Batteries

    Overview of Battery Processes

    Negative electrode: pure lead (Pb) Positive electrode: lead dioxide layer (PbO2). The different surface materials generate voltage and potential energy.

    When a load is connected, chemical energy converts to electrical energy. The surfaces of the two electrodes slowly change. Lead sulfate crystals (PbSO4) form on both electrodes.

    Current flows as long as there is an imbalance between the electrodes. When both electrodes are covered with PbSO4, the battery is fully discharged and must be charged again

    DC current is applied to recharge the battery. Negative electrode: PBSO4 detaches & dissolves in acid. Positive electrode: PBSO4 detaches and dissolves in acid strengthening the electrolyte and forms lead dioxide crystals (PBO2).

    Limitations of Battery Performance

    Negative Electrode: Not all lead sulfate crystals are removed. Progressive build up during charges leads to loss of active mass: this results in reduced life time

    Positive Electrode: Lead dioxide crystals prefer to bind to existing crystals. Leads to uneven crystal distribution: this results in less capacity. Not all lead sulfate crystals are removed during charging: reduction in surface area on electrode

    Battery Aging: Occurs during charging / discharging process

     

    Crystal Control Technology

    Lead-acid batteries store electrical energy by means of a chemical reaction between lead, lead dioxide and sulfuric acid. This happens in all kinds of lead-acid batteries, regardless of the type of battery: liquid, gel, AGM (Absorbent Glass Mat) or advanced lead-acid batteries. The most common damaging side effects in these chemical reactions are the growth of large lead sulfate crystals on the negative electrodes. That damaging effect is matched by the lack of density in the lead dioxide crystals that are formed on the positive electrode. CCT® offers a method to increase the growth of small, dense lead dioxide crystals on the positive electrode, while reducing the growth of unwanted large lead sulfate crystals on the negative electrode of a battery. This effect is achieved by WaveTech’s BEAT® products through the delivery of custom made high-frequency electric pulses to the battery during charging. When extra energy is applied to the ions in the electrolyte, the undesirable accretions of larger (difficult to break down) lead sulfate crystals are slowed considerably, if not reversed, while the growth of desirable lead dioxide crystals is increased. 

    Crystal Control Technology® is applied during charging. CCT® electro-dynamically modifies the electrochemical charge/discharge processes in the battery. Especially modulated voltage pulses achieve an electro-dynamic manipulation of the dynamic equilibrium state inside the battery. It creates ‘overvoltage’ over the electrodes. (Overvoltage refers to a potential difference between the electrodes that is higher than the steady state given by the Boltzmann equation.) The additional energy, which is included into the electrode and electrolyte system, helps to increases the movement of ions in the electrolyte leading to enhanced dissolution of undesirable large lead sulfate crystals on the negative electrode (increased cycle life), as well as, increased re-establishment of a homogeneous layer of desired lead dioxide crystals on the positive electrode (more capacity). With every charge cycle, the active material within the battery is effectively renewed, which slows down battery aging. Crystal growth is manipulated to create a smoother and more homogenous surface structure for better functioning electrodes.

     

    CCT® provides

    • Electrodynamic influence on ions in the electrolyte and on the electrodes, reducing the formation of larger unwanted lead sulfate crystals;
    • Renewal of the active material in a battery;
    • Conversion of non-active, large, lead sulfate crystals on the negative electrode into lead and sulfuric acid;
    • Renewal of the active material on the positive electrode by the formation of fine crystals of lead dioxide;
    • Improved structure of the positive electrode, making it more homogeneous and making the electrode work better, with increased durability;
    • A substantial saving of the electric current needed to charge the batteries, and subsequently, a substantial cut in the electricity bill and on the emission of greenhouse gasses.

    Batteries treated with CCT® demonstrate an increased number of “reaction sites” and a more homogeneous lead dioxide structure on the positive electrode. This homogeneous structure is beneficial to overcome mass transfer limiting processes. The electrodes then work more efficiently and reliably. They also can better withstand unfavorable treatment (i.e. shock or impact) and/or extreme environmental conditions (i.e. operating temperatures).

     

    CCT® benefits

    • The doubling of the lifespan of a lead-acid battery naturally means that battery maintenance and replacements costs are greatly reduced (Cost for buying replacement batteries is reduced by more than 50%
      (The BCL* improves by at least 100%; *BCL, or the Battery Cycle Life is the number of times a battery can be charged and discharged (charging cycles) before the battery capacity is reduced to 50% of the capacity of a new battery.).
    • The costs for installing and uninstalling the batteries is cut by 50%.
    • The tripling of the effective capacity of the battery (improvements in LET* by at least 300%), increases the effective use of the electrical device and reduces the downtime of the electrical device that is powered by the batteries
      The *LET, or the Lifetime Energy Throughput, triples. The LET is the amount of electrical energy (measured in Watt-hours) that a battery, during its active life, can absorb and again release.
    • Less current is needed to charge the batteries, resulting in electricity bill savings (typically 20%).
    • The batteries show an optimized charging cycle, causing the battery to more quickly be charged to the voltage for which they are designed.
    • The charge time is shorter, batteries charge better (reach a higher voltage) and require less charge (a decrease in energy conversion losses).
    • The batteries require less attention and maintenance
    • The improvement of the performance of the battery go hand in hand with an improvement in the physical structure of the battery, they are more stable and robust, which obviously has a positive effect on the durability of the battery. The battery is less likely to fail due to causes associated with sulfation;
    • Batteries are more stable under extreme conditions (extreme heat or cold). The cost of a cooling system is extremely reduced
    • Reduces the downtime of the electrical vehicle that is propelled by the batteries. Sensitive electronic equipment attached to the battery equipment experiences less wear and tear. (CCT®keeps the battery voltage higher and more stable.)

     

    BEAT® Products

    The BEAT®50 is WaveTech’s standard product and can be used on all standard 12V lead-acid battery variety: flooded batteries, gel batteries or AGM batteries.

    WaveTech’s product line now holds two products aimed at the lead-acid battery market:

    • BEAT®50 – Standard product which can be used on virtually all lead-acid batteries (12V onwards) up to 2,000Ah.
    • BEAT®300 – Product that is integrated into the battery lid. The first product is a battery lid type C flat used mainly for bus and truck batteries.

     

    Lithium Development

    The R&D process of adapting WaveTech’s technology towards lithium batteries has been concluded and shows that similar results can be expected as with lead acid batteries (doubling of battery lifespan). WaveTech’s current patent applies to lithium batteries as well. The Company is currently preparing additional test cases to validate the technology applied towards Lithium batteries. The aim is to reach the highest benefit possible on lithium batteries. The first testing will start during Q1 2018.

    Intellectual Property

    WaveTech holds a method patent for its CCT technology. This patent covers all battery chemistries where the CCT® method applies. The patent is not limited to a certain product or packaging method. The patent is approved in 84 countries and is pending in 26 countries. Also, WaveTech’s IP has been stress tested with respect to lithium usability and coverage.

     

    TEST CASES

    PACE Power Systems – Indian Telecom Service Provider (test with old batteries)

    • 12 months after installation reduction of average monthly battery aging from 3.01% to 0.21%
    • 20 months after installation battery aging was stabilized and the remaining lifetime was doubled

     

    Leading European Bus & Truck Manufacturer

    • Due to extreme operating conditions (cold weather / short runs / stop & start) customer experiences regular battery failure within their new product warranty periods–generally after 6-18 months
    • With BEAT, customer has had zero battery failures for over two years and a better starting performance. Customer saves €300 per saved battery replacement

     

    Danish Distribution Centre–Electric Forklifts

    • Less energy used (-16%) and less time needed (-14%) to charge treated batteries
    • Increased operating hours of treated batteries (+17%) and increased work time efficiency (+35%)

     

    European Battery Manufacturer over First 25% Battery Capacity

    • Customer was unable to reach target of 250 charge cycles
    • Without BEAT, batteries dropped below 75% capacity after 240 cycles; with BEAT, they reached >340 cycles with an increase in capacity and charge acceptance

     

  • Milestones

    Road to IPO

     

  • Key Data

    Please note that the financial information has been compiled solely by the Company and has not been reviewed by external accountants or advisers. The financial information set out below is based on the Directors’ beliefs, assumptions and information only as of 2nd January 2018, and the assumptions and forward-looking events on which such financial information is based might not be correct or accurate. Therefore, Investors should not place any reliance on such financial information.

     

    Financials

    Forecasts: >€158m revenues and >€135m EBITDA for 2021

    • High cash flow business model with minimal operational costs (sales & marketing, further R&D)
    • Conservative, probability weighted ‘bottom-up’ forecasts based on existing customer pipeline. 

    Investor offering: up to ~$5m for newly Convertible Notes to be issued to current investors in the Company for the last Pre-Reverse- IPO round

    • Funds are to be used for finalizing the integration process of the technology into the battery and for strengthening the organization to merge into the new US publicly traded company (NewCo)
    • WaveTech forecast equity valuation of €1,240m in 2021
    • Potential for high dividend distribution from 2019
    • Funds sufficient to support WaveTech through to positive cashflow

     

    Year End

    2018

    2019

    2020

    2021

    Revenue*

    € 10.6m

    € 72.0m

    € 115.0m

    € 157.5m

    COGS**

    -€ 5.9m

    -€ 18.4m

    -€ 19.0m

    -€ 19.5m

    Gross Profit

    € 4.7m

    € 53.5m

    € 96.0m

    € 138.0m

    OPEX (incl. R&D)

    -€ 3.9m

    -€ 2.5m

    -€ 2.7m

    -€ 2.9m

    EBITDA

    € 0.8m

    € 51.0m

    € 93.3m

    € 135.1m

    Net Profit

    € 0.5m

    € 35.5m

    € 65.1m

    € 94.4m

     

    * Revenues for lithium products are not included  ** COGS decreasing from 2019 on, because licensing will be main income

     

    WaveTech Estimated 2021 Valuation

    EV/EBITDA Multiple

    8x

    Enterprise Value

    1081.2m €

    Equity Value

    1234.5m €

    Period End Net Cash

    157.3m €

     

    Transactions

    WaveTech will merge with a public US company and raise ~$10 million in conjunction with the merger to grow its global business. Following the successful completion of WaveTech’s current pilot trials (Telecom, Auto, & Power), the Company will launch its commercial products with multiple joint venture partners.

     

    Transaction Rationale

    WaveTech provides a new generation of energy storage enhancing technology for multiple applications, creating a leading company in this rapidly growing space. The company will be publicly traded and is projected to achieve revenue of $157.5. million euros in 2021 with an Enterprise Value of ~$1.081 billion euros. The company intends to uplist to the NASDAQ main board in the 1Q of 2018. The company will boast a highly proprietary patented technology with multiple monetization paths. The experienced and dynamic management team has been very successful in developing and establishing companies 

    The entity will be well positioned to become the leader in battery technology (lead-acid and lithium). The company will pave the way towards the use of safer and more efficient battery platforms worldwide. There is tremendous potential to provide the industry with an economical/environmental solution for addressing these issues, which present a great risk to the global market.

    • Conservative assumption for EBITDA valuation (currently about 10x)
    • Investment into a disruptive technology company
    • Growth comes through license agreements with large battery makers and through new products coming to the market

     

    Name WaveTech GmbH
    ISIN N/A
    Currency USD
    Vat number
    Entity number
    Country Germany
    Address

    WaveTech GmbH

    Marie-Curie-Straße 5

    53359 Rheinbach

    Germany

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