CALIX LIMITED — AGM Information 2018

Nov 13, 2018

ASX ANNOUNCEMENT 14 November 2018

CALIX AGM AND KEY MILESTONES UPDATE

Highlights:

• Chair’s Address provided below to be presented at the Calix AGM being held today

• CEO and MD’s AGM Presentation includes several highlights from activities since August including:

• First purchase order (PO) received from West Coast US – ACTI-Mag

• Multiple ACTI-Mag biogas trials now underway in Thailand

• First Western Australian assets treated with PROTECTA-Mag

• Calix’s oldest coated manhole passes 36 months with continually improving pH

• New application for AQUA-Cal+ in freshwater lake remediation continues well

• Three container loads of AQUA-Cal+ now shipped to China

• European summer trials of BOOSTER-Mag continue to yield very promising results

• Low Emissions Intensity Lime and Cement (LEILAC) Project progress continues on time and budget, achieving major milestone and received grant funding drawdown

• New patent filed for pharmaceutical applications of Calix’s high surface area, safe and non-toxic MgO

• Calix receives notification from the ATO that a $5.1m R&D Tax rebate will be paid on November 15

Sydney, Australia | November 14, 2018 – Multi-award-winning Australian technology company Calix Limited (ASX: CXL, ‘Calix’ or ‘the Company’), is pleased to provide an update on key milestones achieved as part of its AGM to be held today.

Calix Chair, Peter Turnbull – AGM address:

“Good afternoon everyone, my name is Peter Turnbull and I am the Chair of the Calix Board.

I would like to welcome you all to Calix's 2018 Annual General Meeting – our first as an ASX-listed company.

I would like to start this afternoon's proceedings by introducing the Board and management team:

• Dr. Phil Hodgson (MD and CEO)

• Dr. Mark Sceats (Chief Scientist and Non-Executive Director)

• Dr. Jack Hamilton – (Non-Executive Director)

• Lance O'Neill – (Non-Executive Director)

• Darren Charles (CFO and Company Secretary)

After the formal proceedings of the AGM are complete, our MD and CEO Phil Hodgson will be providing an update on the key activities and goals of the business since we listed and importantly the exciting future that we see ahead.

However, before we commence with formalities of the AGM, I would like to briefly cover some strategic context for our business as we are starting to see some pleasing and material tailwinds across several applications of our technology.

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Level 1, 9-11 Bridge Street, Pymble NSW 2073 www.calix.com.au
Tel: +61 (2) 8199 7400 Fax: +61 (2) 8199 7444 CALIX LIMITED (CXL)
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ASX ANNOUNCEMENT 14 November 2018

For our magnesium businesses, general global trends continue are assisting our sales and US and EU business development efforts with our ACTI-Mag, PROTECTA-Mag and AQUA-Cal+ products. These global trends include:

• More efficient waste water treatment,

• Sewer asset protection and,

• More sustainable and efficient aquaculture practices

BOOSTER-Mag

Turning to the agricultural sector, it is pleasing to note that our key agricultural product, BOOSTER-Mag is now under intense due diligence through multi-crop and season trials by three global major crop protection companies.

Europe, the third largest regional user of plant protection products (after Asia and Latin America) introduced legislation via the European Commission that has seen the number of allowable active substances reduced by about half over the last 25 years. Over the next five years, nearly all remaining active substances reach the end of their historical approvals for use and must re-apply, often with far more detailed supporting evidence of their environmental and toxicological impact.

On top of this pressure, it is estimated that it takes at least 10 years and 200m Euros to develop a new crop protection product. Looking at the European farmer's view of life, they are desperate to maintain productivity in the face of import pressures, while still trying to move to more sustainable farming methods. Provided our trials continue to reflect our experience to date with BOOSTER-Mag, it really could be the “right product at the right time” over the next few years into a A$10 billion per annum global addressable market.

LEILAC

In another application of our technology – our Low emissions Intensity Lime and Cement (or “LEILAC") project is progressing well in Europe and remains on-target for commissioning in early April, 2019.

LEILAC aims to demonstrate the direct, efficient separation of process CO2 emissions from the production of lime and cement. The European Union runs the first, and largest CO2 emissions trading system (or “ETS") in the world, with 31 countries and 11,000 industrial installations. Fast-approaching is the ETS “Phase 4”, which will run from 2021 to 2030, which will see faster reduction in “free” CO2 allowances, forcing CO2 emitters to either mitigate their emissions or buy CO2 allowances.

Unsurprisingly, the price of CO2 allowances has risen since January this year from 7.50 Euro to over 15 Euro today, peaking just a month ago at nearly 25 euro per tonne. Consequently, the lime and cement industries are really starting to move with much more focus and vigour on ways to mitigate their CO2 emissions.

In September this year, Calix was invited to speak at the global cement research congress, held every five years, on our LEILAC project. In 2013, there were no papers presented on CO2 reduction out of 37 papers. In 2018, there were 6, including Calix, out of 41 papers, a dramatic increase in just five years. If LEILAC is commissioned and works as planned, it should generate significant interest over its 21-month demonstration program. Again, put simply – it could very well be the “right technology at the right time” over the next few years into a A$10.8 billion per annum global addressable market.

Calix is pursuing both of these high potential applications (being new and sustainable agricultural application and cost effective carbon capture at scale) largely through having achieved significant grant support over the years and grant funding continues to be a very effective source of support for our research and development activities .

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Level 1, 9-11 Bridge Street, Pymble NSW 2073 www.calix.com.au
Tel: +61 (2) 8199 7400 Fax: +61 (2) 8199 7444 CALIX LIMITED (CXL)
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ASX ANNOUNCEMENT 14 November 2018

We have several other opportunities which also exhibit obvious global tail winds including our battery technology research and development, for which, again, we have achieved two awards of grant funding, and new pharmaceuticals, for which we have recently submitted a new patent application. The result of this approach is that our shareholders can enjoy the optionality brought by a cash-flow positive company with multiple global potential technology plays.

Our strategy in the light of these global tail winds remains consistent – grow revenues from established products into new markets in the US, EU and Asia, and continue to develop high potential medium and longer term technology applications to generate multiple upside optionality and development opportunities

Successful IPO on the ASX

On July 20, 2018, Calix passed a significant milestone with the achievement of an IPO and listing on the ASX. As a result, our shareholder base has grown substantially through this process, including a number of high-quality institutional investors.

I would like to take this opportunity to thank all of our shareholders, both those who have been on a longer-term journey prior to listing, and those who have recently joined our journey since listing – your support is sincerely appreciated and your feedback is always highly valued.

Before moving to the formal resolutions, – I would like to thank the team at Calix for their focus and dedication and their considerable achievements this year. Our whole team shares a passion to ensure our great Australian technology advances on the world stage to become commercially successful at scale.

The entire Calix team of Board, management, and staff are shareholders in the Company, and their interests are therefore very well aligned with those of all shareholders. We all share the prime goal of successfully and profitably commercialising various applications from our core flash calcining technology around the world.” (Calix Chair, Peter Turnbull – AGM address ends)

Key Activities Update

ACTI-Mag

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ACTI-Mag
Plan start trial biogas
o First purchase order (PO) received from West customer Cassava Plant
Coast US – ACTI-Mag for odour control – Roi Et,
Dec 18
o Multiple ACTI-Mag biogas trials now
underway in Thailand – following the
successful trial of ACTI-Mag in a Thai palm oil
mill to increase biogas production for
electricity by 28%, several follow-on trials Plan start trial biogas
customer Palm Oil
have commenced or are about to with other First ACTI‐Mag biogas
Plant –Chantaburi,
customer Palm Oil
Palm Oil plants, as well as a cassava plant. The Nov 18
Plant
ability of Calix’s high surface area product, a Surat Thani,
direct result of its patented technology, to May 18
enhance the efficiency of biotreatment
systems is starting to create very large
opporunities, especially where biogas Started trial biogas customer Palm Oil
produced is used to produce power, in Plant ‐ Surat Thani,
expensive power markets. Oct 18 Plan start trial biogas
customer Palm Oil
Plant ‐ Surat Thani,
Dec 18
Level 1, 9-11 Bridge Street, Pymble NSW 2073 www.calix.com.au
Tel: +61 (2) 8199 7400 Fax: +61 (2) 8199 7444 CALIX LIMITED (CXL)
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ASX ANNOUNCEMENT 14 November 2018

PROTECTA-Mag

• Calix’s oldest coated manhole has successfully passed 36 months with continually improving pH – this deep manhole managed by the Gold Coast Council was highly corroded and sprayed in July 2015 wth PROTECTA-Mag. After 36 months, the surface continues to record high and improving pH, proving the coating is preventing acidic attack and corrosion.

• First Western Australian assets treated with PROTECTAMag – Calix is completing its first PROTECTA-Mag spray campaign in Western Australia over June to October – with new partner Hutton Contracting.

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PROTECTA‐Mag
application
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Jul 2015 – highly
corroded manhole
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12 months – pH 8.3
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36 months – pH 9.5
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AQUA-Cal+

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Lake at Petaling Jaya –Malaysia
– May 2018
Dead fish and algae
– early March 2018
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o New application for AQUA-Cal+ in freshwater lake remediation continues well – 8 months into a 12-month trial.

o Additional freshwater lakes are being looked at in Malaysia for futher trialling

o Prawn trials continue in Indonesia, Thailand and Vietnam

o 3 containers of AQUA-Cal+ have now been shipped to China for shrimp farming – by far the largesty market globally.

BOOSTER-Mag

Since executing a third Material Transfer Agreement (MTA) in August covering a multi-crop trial of Calix’s BOOSTER-Mag crop protection product with a third global crop protection major corporation, trials have continued during the European summer with highly encouraging results:

• Reims, France (grape & maize) – the regional famers’ cooperative is targeting to be chemical free within five years. In the Company’s 3[rd] year of trials with this co-operative, BOOSTER-Mag again performed well – in a high disease (powdery mildew) season it performed as well as the standard in-market chemical

• Holland (onions) – the local farmers are looking for a standard in-market chemical substitute (expecting it will be

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ASX ANNOUNCEMENT

14 November 2018

banned in next few years) – vs downy mildew. Again, BOOSTER-Mag demonstrated similar control of this disease as the in-market chemicals

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Calix’s commercialisation strategy for BOOSTER-Mag is to pursue a sales and marketing licensing model with crop protection companies, whilst continuing to manufacture BOOSTER-Mag in-house. Calix commenced this process in 2017. Calix’s key milestones in this process are:

1. Initiate contact with the world’s largest crop protection companies (22 engaged)

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2. If high level BOOSTER-Mag results already achieved are of interest - put in place Confidentiality Agreements and disclose more detailed data (12 in place)

3. If counter-party wishes to progress - invest in their own DD trials – put in place Material Transfer Agreements (MTAs) to cover Intellectual Property terms and conditions to protect Calix’s interests as well as agreed trial scope and protocols (3 in place)

Next steps:

1. Counter-party to conduct trials – typically a minimum of two seasons– on specific crop / disease / geographic region

2. If deemed successful – commercial license arrangements to be negotiated

3. If agreed – commencement of sales and marekting licenses by crop / disease / geographic region

The MTA represents a considerable investment of time and money by the counter-party, following their independent assessments of efficacy testing of BOOSTER-Mag over the past three years.

Low Emissions Intensity Lime and Cement (LEILAC)

The LEILAC Project (www.project-leilac.eu) is a €21m project (€12m is funded by the EU Horizon 2020 Research and Innovation program) piloting Calix’s technology in CO2 abatement for the lime and cement industries. As part of this project, Calix is leading a consortium of some of the world’s largest cement and lime companies, as well as leading European universities and research institutes.

Construction at HeidelbergCement’s Lixhe cement plant in Belgium remains on time and budget for commisioning in April 2019. Commissioning, and then extensive testing will then follow over the remainder of 2019, and into 2020.

October, 2018

During the quarter, Calix’s CEO, Phil Hodgson, visited the LEILAC Project and also presented at the VDZ Conference in Duesseldorf to more than 600 representatives from the international cement industry and associated suppliers, as well as from scientific and research institutes around the world.

In October, the Company successfully received €4.1m (~A$6.6m) in grant funding drawdown, out of the total €12m (~A$19.4m) funding for the project as a result of European Commission completing its second review. The total funds drawn down in the project are now around €9m (~A$14.6m), with the project remaining on time and budget for commissioning in April, 2019.

ASX ANNOUNCEMENT 14 November 2018

Calix’s portion of the funding drawdown is €3m (~A$4.85m), which has been used to pay back ~€1.15m (~A$1.85m) on an EFIC facility put in place to help with financing the project, as well as pay back Calix on cash and resources spent on the project over the last 18 months. As a result, Calix’s cash balance increased by A$3m, and Calix is now debt-free.

Calix’s commercialisation strategy for this application of its technology is to prove its application via this pilot project, and proceed to a license / royalty model to the cement and lime industries.

Advanced Batteries

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Calix’s BATMn reactor
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Calix’s Advanced Manufacturing Growth Fund project “BATMn” has passed milestone 2 of the grant fund, which saw purchase orders issued for major long-lead items in late October.

The BATMn reactor, wihch is being built next to our Bacchus Marsh facility, remains on-time and budget for commissioning in August, 2019.

Calix’s commercialisation strategy for this application of its technology is to develop new “drop-in” materials that improve the performance and cost of lithium-ion batteries, and ultimately investigate alternate chemistries for improved battery performance, based upon the Company’s unique “kiln” technology’s ability to produce highly porous micro-crystals.

R&D Update – Pathway for potential treament of disease using nano-active particles

There continues to be demand for products that treat diseases in humans, animals and plants, bypassing the use of expensive, toxic, antibiotics to which many diseases have become resistant.

The Company has established a collaboration with Professor George Karagiannakis and the team at the research institute, CERTH, in Thessaloniki, Greece, to test whether the mode of action of BOOSTER-Mag, Calix’s nano-active Magnesium Oxide (MgO), was a source of Reactive Oxygen Species (ROS). ROS generation is used by animals and plants as the first defence to combat most diseases that originate from pathogenic anaerobic microorganisms. CERTH uses spin-trap Electron Paramagnetic Resonance to quantify ROS. The results confirmed BOOSTER-Mag produces ROS.

Other experiments on the nano-active MgO powder showed a higher dose of ROS was generated as the particle was being dissolved by weak acids. This implies that direct application will be even more effective against disease, because acids exuded by the pathogens will trigger a burst of ROS (ROS Bomb[TM] ) when the particle meets the pathogen. Calix has been awarded a Global Connections Fund grant of A$45,000 through the Australian Academy of Technology and Engineering to investigate the ROS Bomb impact, and then set up a broad Australian-European collaboration with Calix and CERTH to explore its use in combating diseases.

A patent application has been filed covering this exciting new opportunity.

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Level 1, 9-11 Bridge Street, Pymble NSW 2073 www.calix.com.au
Tel: +61 (2) 8199 7400 Fax: +61 (2) 8199 7444 CALIX LIMITED (CXL)
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ASX ANNOUNCEMENT 14 November 2018

R&D Rebate and Grant Funding

The Company is pleased to announce that following the annual review by the ATO of our R&D activities and rebate claim, that we have received notification that an R&D Rebate of A$5.1m will be paid on November 15. The amount is as expected.

This rebate brings Calix’s total R&D rebate over the last 4 financial years to $16.6m, or about $4m per year, which will be the R&D Rebate cap moving forward from the FY19 tax year.

These rebates are in addition to A$10m in grant funding Calix has earned over the same period, bringing the total to A$26.6m in earned grant and R&D funding over the last 4 years.

Calix will continue its R&D efforts as long as it continues to receive appropriate funding (ie not with shareholder equity). The number of products near commercialisation demonstrates the value produced as a result of our R&D.

For more information:

Phil Hodgson Managing Director and CEO phodgson@calix.com.au +61 2 8199 7400

Simon Hinsley Investor Relations simon@nwrcommunications.com.au +61 401 809 653

Darren Charles

Company Secretary and CFO dcharles@calix.com.au +61 2 8199 7400

Michelle Taylor Media

Michelle_Taylor@recognition.com.au +61 2 9252 2266

About Calix

Calix is a multi-award-winning Australian technology company that is developing new processes and materials to solve global challenges.

The core technology is a world-first, patented kiln built in Bacchus Marsh, Victoria that produces mineral honeycomb, which are very highly active minerals.

Calix uses these minerals, which are safe and environmentally friendly, to improve waste water treatment and phosphate removal, help protect sewer assets from corrosion, and help improve food production from aquaculture and agriculture with reduced antibiotic, fungicide, and pesticide use.

Calix's technology has also been adopted overseas, where the company is working with some of the world's largest companies, governments and research institutions on CO2 capture.

www.calix.com.au

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Level 1, 9-11 Bridge Street, Pymble NSW 2073 www.calix.com.au
Tel: +61 (2) 8199 7400 Fax: +61 (2) 8199 7444 CALIX LIMITED (CXL)
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