Forum Topics Li-S Energy IPO
Shapeshifter
3 years ago

LIS energy floated on the ASX today.

The IPO was heavily oversubscribed.  Shares were issued at $0.85.

LIS opened at $2.00, hit a high of $3.05 before settling at $2.33.

By volume it was the 9th hightest traded on the ASX and by value just outside the top 20.

 Progress continues

  • BNNT cell has now cycled 900 times with a greater than 60% retained capacity.
  • They have started making multi-layer cells
  • They have engaged with a European battery research institution

Things are moving in the right direction although this is clearly just the begining of a challenging path for LIS.

What I think would be great to see is a partnership with a drone manufacturer like DJI.  If LIS energy could prove their high energy density Li-S batteries in this application they would gain significant promotion and propulsion.

20
Shapeshifter
3 years ago

Is this a good opportunity?

I've been looking through the prospectus for the Li-S Energy share issue and I find it an intriguing opportunity.  They will commence trading on the ASX on 30 August.  I'll try and objectively lay down the pros and risks.  I'd be interested in your thoughts.

Offer price $0.85  x 40,000,000 shares = $34,000,000 gross proceeds raised

Total shares on issue would then be 640,200,230 (PPK Aust 45.43%, Deakin uni 13.02%) with a market cap of $544,170,195

What do they do?

Their objective is to develop advanced battery technology based on lithium-sulphur chemistry.  They will leverage a technology in their batteries called boron nitride nanotubes to

a. improve battery energy capacity compared to lithium-ion

b. improve cycle life compared to conventional lithium-sulphur chemistry

It is a joint venture between PPK group, BNNT technology limited (who will produce the boron nitride nanotubes) and Deakin university.

Pros

- Huge increase in the rechargable battery market and forecast to grow strongly

- New battery tech is needed to address the limitations with lithium-ion batteries

- Li-S batteries have 5x energy density of standard lithium-ion, they are also lighter, safer, faster charging, greener

- Their use of boron nitride nano tubes to overcome problems with Li-S battery chemistry has been independently verified by TMPR Consulting who found that at 600 charge and discharge cycles the specific capacity of the Li-S Energy Battery has been maintained at about 3x the specific capacity of current lithium-ion batteries (above 60% of it's initial capacity)

- Experienced senior management.  CEO Dr Lee John Finniear has more than 25 years experience as a senior excutive has a degree in Civil Engineering and is a PhD in Artificial Intelligence and Geographic Informations Systems.  Chief Technological Officer Dr Stephen Rowlands has a degree in Applied Chemistry and a PhD in Electrochemical Supercapacitors for energy storage.

Risks

- Can BNNT technology limited supply boron nitride nanotubes at commercially viable volumes?

- Will there be an alternative, superior technology?  Li-S Energy's technology may become obsolete through the investment of it's peers in superior technology.

- Li-S energy is currently at pilot research and development phase.  Will they have the ability to scale up to commercial production in a reasonable timeframe?

- Li-S energy are likely to need ongoing funding though capital raises

- Liquidity risk as large proportion (73.93%) of shares will be subject to trade restrictions for 2 years

What will they do with the money raised?

- Further optimise the single and multi-layer Li-S technology and retrofit into one or more products

- About $6,000,000 will be spent on a pilot production line to manufacture batteries and prove benefits in commercial products

- Produce different battery formats

- Total Working Capital $16,500,000

 

12
SebastianG
3 years ago

Interesting company to watch, thanks.

4
Muddled
3 years ago

The CEO did an interview with Alan Kohler in the last few days I think... some highlights from that...  sounds like excellent technology and multiple potential revenue sources but two years of very heavy investment ahead before they've got a chance of having a core product.

In terms of the allocation of the money, what the money gets spent on, I see in the prospectus that $29 million is to be spent on the project. Explain to us what exactly that means and over what period are we talking for that money? 

We’re looking at about $29 million over a two-year period. The key thing with the project is we have proven out the – I suppose I ought to go back and explain what we do first of all. The core science has been proven, the point is now to scale and test the envelope on that.

And you think that $29 million gets spent over two years? 

Yes.

What happens at the end of the two years? Are you saying that that’s the time period or at the end of that two years you start making money? 

At this point, what we’ve put forward, and we haven’t said categorically we’re going to make money after two years. R&D and commercialisation doesn’t work that way, we can’t make guarantees. Having said that though, we’ve been able to prove up our battery cycle life, which is the key characteristic we’re trying to improve, is up past 600 cycles now which is remarkable for a lithium-sulphur battery and now it’s about scaling it, getting commercial relationships with product manufacturers that need batteries like this and then moving towards licensing our intellectual property to battery manufacturers to be able to manufacture those at scale.

I may be wrong and this is I suppose what we need to talk to you about, really it feels a little early for you to be IPO-ing, since you’re more or less still in the lab, is that right? Does it feel to you it might be a bit early? 

No, it doesn’t, actually. I guess you can only really draw comparisons from other people in the battery space at the moment. If you look at, for example, QuantumScape, they are trying to do an anode-free battery – there’s no such thing as an anode-free battery. Anyway, they’re currently at a lab scale, they have a single layer pouch battery right now, they’re currently valued at $9.5 billion dollars and are a public company.

Are you satisfied that each of those three things that you’ve mentioned, you’ve licked? 

Yeah, we are. Obviously, we’re doing more testing, we’re testing the envelope in terms of extremes of performance, but our Li-Nanomesh we’ve tested extensively and it seems to be working extremely well and the testing we’ve done so far on the BNNT in the cathode also seems to be working extremely well. We’re obviously testing more and we’re optimising the construction to maximise the performance and that takes a bit of time. But the core science is there and it’s proven and we’ve had battery experts come in and take a look at it who aren’t involved with the project and provide a report as part of the prospectus.

It sounds like one of the main reasons your cycle life is up to 600 now and still going, is that you’ve got this mesh that stops the lithium dendrites causing a short circuit. Is that mesh made of BNNT? 

I’m not saying exactly what’s in the mesh.

I’m just wondering whether that particular process came from PPK or was the mesh developed separately to the PPK technology? 

We developed the mesh – I can’t actually tell you what’s in the mesh, I’m afraid.

Okay, all right, don’t tell me what’s in the mesh, but is that an entirely separate IP that is not…

What I can say is that the IP for the Li-Nanomesh is 100 per cent owned by Li-S Energy, as is the way that the BNNT is used in the battery construction as well. All of the IP that we need to deliver this is owned by Li-S Energy, it’s been either transferred from Deakin University, transferred from PPK or developed in-house.

So it’s not licenced, it’s owned by your company? 

It’s owned by us, yeah.

And that’s global? 

Yes, absolutely.

What sort of interest are you getting from potential customers? 

It’s been kind of crazy actually, in a good way. Deakin put its first announcement out about our results on the 18 May. We’ve had tremendous inbound interest from some of the biggest household names you might think of in the product industry, which has been absolutely awesome. We haven’t gone out there and really touted our capabilities, it’s all been inbound at this point which is great, it really is. I can’t tell you exactly who yet, but I will obviously as soon as we have collaboration agreements signed.

 

11