Circa Group AS — Investor Presentation 2021

Nov 25, 2021

DELIVERING ON THE PROMISE OF BIOCHEMICALS AT SCALE

Q3 RESULTS PRESENTATION

25 November 2021

Agenda

INTRODUCTION

Q3 RESULTS OVERVIEW

FINANCIAL REPORT

RESOLUTE UPDATE

PRODUCT AND MARKET DEVELOPMENT

OUTLOOK

Circa is enabling the transition to lower carbon & sustainable production of advanced bio-based materials

The world demands change from toxic fossil-based chemicals to a better alternative - Circa is part of the answer.

• Circa converts waste biomass into a platform molecule that enables the production of high value bio-based chemicals. Our patented technology equips industries to innovate safer, more sustainable and better chemical products.

• We plan to grow our manufacturing capacity to 80,000 tonnes per year (tpa) by 2030, refining our technology and optimising our cost base and yield as we scale.
• In parallel we develop markets for Cyrene™ a bio-solvent that often out-performs and is up to 80% less carbon intense than NMP and DMF, substances of very high concern identified by the European Chemicals Agency (ECHA).

• Cyrene™ is a levoglucosenone (LGO) derivative, a platform molecule that has the potential for many more derivatives to be commercialised in high-margin applications, such as drug discovery and production of biopolymers.

Today we report on our Q3 progress building an industrial scale plant and developing markets for its novel products.

Q3 results overview

• Cashflow remains at expected levels
• Royalty agreement with University of York renegotiated
• rates reduce from 4% to 1.5% for quantities up to 1,000 tpa and 2% to 0.75% over 1,000 tpa
• ReSolute cost increases advised to market 14 October 2021
• finance options being worked on include re-allocation of capital resources, financial support from regional grants, supplier and export funding programs
• new scope brings in new suppliers, increased yields and annual opex reduction opportunities (approx €2m)
• Further distribution agreement opportunities underway with distributors (OQEMA and DKSH)
• Textile opportunity underway with major Korean supplier to tier one brand
• Invitation to EU COP 26 panel on bioeconomy enabling climate transition
• Tone Leivestad commences as CFO
• Appointment of Philipp Morgenthaler as head of global manufacturing
• New product development team in place, led by Dr Marc Hein

Spend remains in line with expected quarterly run rate

Q321 Income statement

(EUR)

	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020
Product sales	3,288	11,835	52,734	16,457	70,195
Other revenue	1,728	31,049	1,168,694	36,843	1,660,707
Total revenue	5,016	42,884	1,221,428	53,300	1,730,902
Cost of sales	73,039	75,014	41,947	211,408	222,010
Employee benefit expenses	604,259	601,844	133,725	2,849,973	411,494
Other operating expenses	709,392	802,622	662,845	3,047,657	3,962,130
Total operating expenses	1,386,690	1,479,480	838,517	6,109,039	4,595,635
Operating result	-1,381,674	-1,436,596	382,911	-6,055,739	-2,864,733
Net financial income/ expenses	-208,322	-114,954	-29,211	-530,093	-33,917
Net profit/ loss before tax	-1,589,996	-1,551,550	353,700	-6,585,831	-2,898,650
Tax expenses
Net profit/ loss	-1,589,996	-1,551,550	353,700	-6,585,831	-2,898,650
Other comprehensive income:
Foreign exchange gains/(losses)	15,997	22,707		17,193
Total comprehensive profit/ loss for the period	-1,573,999	-1,528,843	353,700	-6,568,639	-2,898,650

• FC5 continues to provide product for Cyrene sales and trial product to customers
• Q321 employee and other operational expenses continue to be in line with the quarterly run rate
• Financial expense is mainly related to unrealized FX (NOK account in Circa Group AS) and negative interests related to the EUR account

And focus on cash remains critical

Q321 Assets

(EUR)	30.09.2021	30.06.2021	31.12.2020	30.09.2020
ASSETS
Tangible assets	874 964	571 281	53 196	2 361
Total non-current assets	874 964	571 281	53 196	2 361
Inventory	44 306	33 748	49 899	37 156
Short term receivables	262 578	408 500	1 708 519	77 601
Cash and cash equivalent	46 849 307	49 717 972	4 724 408	243 975
Total current assets	47 156 191	50 160 220	6 482 826	358 732
Total assets	48 031 155	50 731 501	6 536 022	361 094

• ReSolute™ capex is EUR 565k gross in Q321. Total capex is offset by the BBI contribution of EUR 261k.
• Decrease in short term receivables, reduction is mainly due to retroactive VAT included in Q2 after Circa Group AS has been registered for VAT.
• Cash in Q3 used on:
• Operation activities EUR 2.3 millions, related to operations in the quarter, as well as payments for STI and Wood where expenses are included in previous periods.
• ReSolute payments EUR 565k

Circa remains well-funded

Q321 Equity and liability

(EUR)	30.09.2021	30.06.2021	31.12.2020	30.09.2020
EQUITY
Issued and paid in equity	54 013 611	56 808 253	7 335 180	7 141 563
Other equity	-11 695 589	-12 882 966	-7 685 095	-8 235 540
Non-controlling interests
Total equity	42 318 023	43 925 288	-349 915	-1 093 977
LIABILITIES
Employee benefits	639 647	550 482	0	0
Other non-current liabilities	0	0	562 590	0
Total non-current liabilities	639 647	550 482	562 590	0
Employees and related	646 830	989 966	32 408	10 373
Borrowings	0	0	0	0
Trade and other payables	248 019	803 112	179 363	430 071
Public duties and related	40 334	47 754	0	0
Other current liabilities	4 138 303	4 414 900	6 111 576	1 014 626
Total current liabilities	5 073 486	6 255 732	6 323 347	1 455 071
Total liabilies	5 713 133	6 806 213	6 885 937	1 455 071
Total equity and liabilies	48 031 155	50 731 501	6 536 022	361 094

• Total Equity is EUR 42.3 mill as of Q321
• Decrease in Trade payables is mainly due to payment to Wood (EUR 400k)
• Decrease in Employee and related is mainly due to short term incentives (STI) related to the IPO that are paid out in Q3 (EUR 326k)
• Decrease in Other current liabilities are mainly due to utilization of the Horizon 2020-grant of EUR 261k in Q321

Activities following capex announcement Oct 14th are building confidence in the estimate - and opportunities for non dilutionary financing

• Activities to reduce capex as well as various financing options is building confidence. The work is ongoing, and with a conservative approach, the cash forecast is presently unchanged from the announcement at October 14th.
• Circa Group's available cash balance as per Q321 is approximately €47m
• Available cash balance in the two year period includes outgoing cash balance as per Q321, BBI grant of €5m (55 %) and an assumption of €3m in other grants, which is considered conservative (current commitments approx €1.35m)
• Cash spending on ReSolute plant is given as a range from €50-55m based on the most recent estimates. The graph is based on the highest figure.
• Circa has a well funded and long financial runway. The company is working with various financing options, such as exploring grants and vendor financing opportunities, and will update the forecast as soon as they are confirmed.

Based on preliminary phasing of ReSolute cash spending. Final phasing after value engineering may impact the timing of cash flows

ReSolute plant progresses, with increasing support from local communities and governments

ReSolute timetable and capex expectations remain as advised in October

• Significant savings opportunities being studied / negotiated include:
• On site conversion of char to energy (>€2m opex/year).
• Internalise waste water treatment (€1m capex savings)
• Increase in capacity based on improvements in FC5 operations: approx 20%.
• Working with LUKE on sustainable pre-reactor fractionation. – Not anticipated for start-up, but upside is ~25-30% capacity uplift.
• Ongoing optimisation work is lowering capex risk for FC6 (10 000+ tonnes) large scale plant.

Product and market development

• Engagement with Merck continues, discussions extended to levoglucosenone derivatives
• Momentum building in the development of new commercial relationships to distribute Cyrene™:
• OQEMA for UK and Euro market opportunities.
• DKSH in Australian and Asian agrochemical markets.
• Chinese research published using Cyrene™ to remove CO2 and convert into value-added chemicals.
• Recent Shell patent on Cyrene™ use in distillation processes to replace high-C product.
• Strong visibility at key events:
• October 6: Spoke on Cyrene™ as a replacement for substances of very high concern at ECHA Safer Chemicals conference.
• October 20: Participated in COP 26 panel following invitation from EU Deputy DG Climate. "The Role of Life Sciences in Delivering Climate Neutrality" alongside BASF and Tetra Pak.

LGO Derivatives: Focused on 4 target markets

HEALTH SCIENCE & PHARMACEUTICALS

• \$140 B (CAGR of 5.1%)
• Targeting derivatives that are well aligned with known intermediates used in API and genomics applications

AGRICHEMICALS – INTEGRATED PEST MANAGEMENT

• \$2.6 B (16% CAGR)
• Focus on sustainable production of unique and difficult to obtain molecules which are well suited and prevalent in the application

FLAVORS & FRAGRANCES

• \$8.9 B for Dairy (CAGR 3.9%) and Convenience Foods (CAGR 5.5%)
• Development of useful precursors and targeted end-use products

BIO-POLYMERS

• \$26.1 B (CAGR 7.3%)

• Investigating the synthesis of unique bio-based monomers for use in the production of novel polyester and polyacrylate polymer systems

• Grow LGO platform in niche applications that are high value and high growth

• Provide unique solutions that offer value through:
• Sustainability
• Simplified synthetic
• pathways
• Scalability
• Secure Supply

We are leveraging robust scientific evidence to progress the use of LGO and its derivatives:

HEALTH SCIENCE & PHARMACEUTICALS

Merck MSD used an LGO derivative to synthesize MK1026, currently in Phase II trial for treatment of lymphoma.

Research partner showing positive in-vivo results using an LGO derivative for the potential treatment of breast cancer.

Provider of wound care applications evaluating 2-deoxy-D-ribose synthesized from LGO.

FLAVORS, FRAGRANCES & AGRICHEMICALS

Range of lactone structures are known and readily accessible from LGO.

Project to scale up the production of dairy lactone from LGO.

Working with a partner in the synthesis of pheromones from LGO for use in pest management applications.

BIO-POLYMER APPLICATIONS

EU CHAMPION project: Circa providing LGO derived monomers to create sustainable bio-based polymer.

Active discussions with a leading paint and coatings brand to produce LGO based monomers for use in products.

Our objective is to demonstrate commercially viable production capability at scale quickly, leading to meaningful commercial engagements in each of our target areas

Accelerating corporate climate commitments puts \$2.6 trillion of chemical revenue under scrutiny

40		$+34%$
30		per year
20	$+7%$
1.0 $\overline{O}$	per year

2030 targets are driving industry transition, and Circa is scaling low-carbon alternatives for this technology cycle

TRANSITION TO A LOW CARBON ECONOMY SUSTAINABLE ALTERNATIVES IN DEMAND

• COP26 has drawn attention to the hard to abate sectors, including chemicals	• Accountability for interim targets towards net zero addressing every scope
• A few systemically important carbon emitters	• Fossil solvent customers demand an alternative
account for the bulk of emissions	• sets net zero targets BASF in March 2021
• What was seen as a burden is increasingly being framed as a way for boards to manage risk, and a market opportunity for those that have the	• Royal Dutch Shell, under pressure to increase emissions reductions, departs the Netherlands • Industry bodies withhold
foresight to act	support for new entrants

Drivers	Industry in transition	Market development	Demand for Cyrene™
	• Accountability for interim targets towards net zero addressing every scope	• Target markets with strong sustainability drivers and in applications where Cyrene™	• Tier 1 textile engagement underway and engagement with major Korean supplier
	• Fossil solvent customers demand an alternative	has out-performed NMP and DMF	• Ongoing interest from major industrial
	• sets net zero targets BASF in March 2021	• Interest from textiles in PU leather manufacture	conglomerates to understand Cyrene™ and volume availability
	• Royal Dutch Shell, under pressure to increase emissions reductions, departs the Netherlands • Industry bodies withhold support for new entrants	• Graphene applications highlight Cyrene™ as solvent of choice • Shell patent demonstrates Cyrene™ performance in petroleum distillation application	• Momentum building in the development commercial relationships to distribute Cyrene™ OQEMA and DKSH

SUSTAINABILITY

Circa Group AS Sjølyst plass 2 0278 Oslo Norway

Contact CEO – Tony Duncan Tony.Duncan@circagroup.com.au CFO – Tone Leivestad Tone.Leivestad@circa-group.com

This presentation contains statements regarding the future in connection with Circa Group's growth initiatives, profit figures, outlook, strategies and objectives. All statements regarding the future are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements.

ReSolute start-up timetable remains as advised in October

						Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23
Schedule	M13	M14	M15	M16	M17	M18	M19	M20	M21	M22	M23	M24	M25	M26	M27	M28	M29	M30	M31	M32	M33	M34	M35	M36	M37	M38	M39
		Q1 Year 2			Q2 Year 2			Q3 Year 2			Q4 Year 2			Q1 Year 3			Q2 Year 3			Q3 Year 3			Q4 Year 3			Q1 Year 3
Reactor Engineering Design • Valmet Basic Engineering Design
Permitting
• EPC BoP Detail Engineering
FEL-4 Equipment Procurement & Manufacturing
FEL-4 Equipment Delivery at site
FEL-4 Construction
FEL-4 Erection
FEL-4 E&I Installation
COMMISSIONING - Cold
COMMISSIONING - Hot
Start-up

Circa converts waste biomass to high-value biochemicals

Biocoal is a valuable by-product from the production process and will be used for industry and heating, offtake for 100% of biocoal volumes

Polymers

Paints Coatings Flavours Fragrance