Electreon Wireless Ltd. — Regulatory Filings 2020

Sep 1, 2020

R E S E A R C H & C O N S U L T I N G L T D

Update Report September 1, 2020

First commercial agreement in Germany; First line is expected to operate in Tel Aviv in Q4 20; NIS 182 million was raised creating financial feasibility; Target price raised to NIS 293.

Stock Exchange: TASE Conclusion

Symbol: TLV:ELWS

Sector: Technology

Sub-sector: Cleantech

Stock Price Target: NIS 293

Closing Price: NIS 263

Market Cap: 2.5 billion NIS

of Shares: 9.6 million

Stock Performance (3 mos.): 49%

Average Daily Trading Volume (3 mos.): 8,208 shares

Dr. Tiran Rothman - Lead Analyst _________________________________

Email:Equity.Research@frost.com Tel.: +972-9-9502888 www.frost.com/EquityResearch

During the first half of 2020, Electreon made significant progress in product maturation and serial production processes, thus moving closer to commercial readiness. For the upcoming year, the company is focusing on tenders for public transport in major European cities, and on demonstration projects for countries and private entities interested in testing the technology. The company is already in the early stages of sales in a number of countries, including France, Germany, Israel, Italy, and Sweden, and is also considering entering the American market.

In light of recent developments, primarily the sale agreement to EnBW, and progress in existing projects, we are updating the value of the company to NIS 2.8B, and raising the average target price to NIS 293.

Company reports and updates during and after the second quarter:

• Sales project for EnBW This is Electreon's first and most significant sales agreement. It includes a static charging system, an electric bus (battery-based), and maintenance and operation services. The transaction amount has not been announced at this time. In the second phase, EnBW will purchase a dynamic road section within a complex, and in the third phase, EnBW will purchase a dynamic road section on a public road. The second and third phases are conditional on an announcement by EnBW that will be delivered to the company by December 31, 2020.
• Raising capital During the second quarter, the Company raised NIS 182 million. Options were also issued during this quarter, which, if exercised, will amount to an additional NIS 122 million.
• Tel Aviv Project During the next month, work and operations will begin on the road near Tel Aviv University. The electric bus has arrived in Israel and will undergo testing. In October, a shuttle will operate on a two-kilometer route, part of which, approximately 600 meters, is a dynamic electric road. There is also a static charging station at the terminal.
• Sweden project In October, work on a 1.6 km route is expected to be completed and a bus and truck will start operating.
• California California has outlined a plan to convert heavy transportation (buses and trucks in the first phase) to electric propulsion in the coming years. The company sees great market potential in this direction and is currently examining the possibilities for entering the American market.

Electreon's solution provides an answer to two of the world's current pressing challenges – urban pollution and the need for low-key charging infrastructures within urban areas.

The Company's go-to-market strategy is to focus on cities (buses, taxis and fleet operations); and on highways (trollies, trucks, and intercity buses). The Company has also identified Europe as the main entry point, focusing on France, Germany, Italy, and Sweden, as well as on the U.S. (California), while continuing its activity with the Tel Aviv municipality.

From a business model standpoint, it has expanded its business model from an only charging infrastructure (kms of roads and vehicle units) to a service model. The Company is focusing on charging as a service, a part of MaaS (Mobility as a Service), a growing business model used by leading mobility firms.

We will update our valuation based on upcoming potential catalysts as well as new commercial agreements. For a comprehensive analysis of Electreon, including market players, business models, trends, market sizes, and valuations, see our last Annual Q4 Report published May 27.

Executive Summary:

Analysis of Company Progress

Upcoming Potential Catalysts

Type	Event	Significance	Timeline	Status
Market Validation for Highway	Initiating a pilot in Sweden for buses and long-haul trucks	High	Q4 2019	Achieved
Market Validation for City Bus	Initiating a pilot in Tel Aviv for buses	High	Q4 2019	Achieved
Regulatory Validation	Approval from Swedish authorities for the deployment of the ERS system	High	Q4 2019	Achieved
Technology Capability	Presenting a static and dynamic charging of long haul trucks	High	Q1 2020	Achieved
Technology Validation	Completion of deployment of ERS in Sweden and Tel Aviv projects	High	Q4 2020	In Progress
Commercial Project	Signing an agreement for a commercial project	Medium	Q4 2020	In Progress

About Frost & Sullivan

Frost & Sullivan* is a global leader in strategic and financial consulting, as well as, market and technology research. Frost & Sullivan is comprised of an integrated global team of 1,800, including; analysts, experts, and growth strategy consultants across 50 branches on six continents, including in Herzliya Pituach, Israel. Frost & Sullivan's Independent Equity Research leverages the in-house experience accumulated from working with leading players in medical technologies, life sciences, ICT, cybersecurity, renewable energy, and other industrial fields, for the past 55 years. Alongside, we utilize our tens of thousands proprietary of market and technology research reports, and economic forecasts. For additional information visit: www.frost.com. For access to our reports and further information on our Independent Equity Research program visit www.frost.com/equityresearch.

*Frost & Sullivan Research and Consulting Ltd., a wholly owned subsidiary of Frost & Sullivan, is registered and licensed in Israel to practice as an investment adviser.

What is Independent Equity Research?

Nearly all equity research is nowadays performed by stock brokers, investment banks, and other entities which have a financial interest in the stock being analyzed. On the other hand, Independent Equity Research is a boutique service offered by only a few firms worldwide. The aim of such research is to provide an unbiased opinion on the state of the company and potential forthcoming changes, including in their share price. The analysis does not constitute investment advice, and analysts are prohibited from trading any securities being analyzed. Furthermore, a company like Frost & Sullivan conducting Independent Equity Research services is reimbursed by a third party entity and not the company directly. Compensation is received up front to further secure the independence of the coverage.

Analysis Program with the Tel Aviv Stock Exchange (TASE)

Frost & Sullivan is delighted to have been selected to participate in the Analysis Program initiated by the Tel Aviv Stock Exchange Analysis (TASE). Within the framework of the program, Frost & Sullivan produces equity research reports on Technology and Biomed (Healthcare) companies that are listed on the TASE, and disseminates them on exchange message boards and through leading business media channels. Key goals of the program are to enhance global awareness of these companies and to enable more informed investment decisions by investors that are interested in "hot" Israeli hi-tech and healthcare companies. The terms of the program are governed by the agreement that we signed with the TASE and the Israel Securities Authority (ISA) regulator.

For further inquiries, please contact our lead analyst.

Dr. Tiran Rothman T: +972 (0) 9 950 2888 E: equity.research@frost.com

R E S E A R C H & C O N S U L T I N G L T D.

Disclaimers, disclosures, and insights for more responsible investment decisions

Definitions: "Frost & Sullivan" – A company registered in California, USA with branches and subsidiaries in other regions, including in Israel, and including any other relevant Frost & Sullivan entities, such as Frost & Sullivan Research & Consulting Ltd. ("FSRC"), a wholly owned subsidiary of Frost & Sullivan that is registered in Israel – as applicable. "The Company" or "Participant" – The company that is analyzed in a report and participates in the TASE Scheme; "Report", "Research Note" or "Analysis" – The content, or any part thereof where applicable, contained in a document such as a Research Note and/or any other previous or later document authored by "Frost & Sullivan", regardless if it has been authored in the frame of the "Analysis Program", if included in the database at www.frost.com and regardless of the Analysis formatonline, a digital file or hard copy; "Invest", "Investment" or "Investment decision" – Any decision and/or a recommendation to Buy, Hold or Sell any security of The Company.

The purpose of the Report is to enable a more informed investment decision. Yet, nothing in a Report shall constitute a recommendation or solicitation to make any Investment Decision, so Frost & Sullivan takes no responsibility and shall not be deemed responsible for any specific decision, including an Investment Decision, and will not be liable for any actual, consequential, or punitive damages directly or indirectly related to The Report. Without derogating from the generality of the above, you shall consider the following clarifications, disclosure recommendations, and disclaimers. The Report does not include any personal or personalized advice as it cannot consider the particular investment criteria, needs, preferences, priorities, limitations, financial situation, risk aversion, and any other particular circumstances and factors that shall impact an investment decision. Nevertheless, according to the Israeli law, this report can serve as a raison d'etre off which an individual/entity may make an investment decision.

Frost & Sullivan makes no warranty nor representation, expressed or implied, as to the completeness and accuracy of the Report at the time of any investment decision, and no liability shall attach thereto, considering the following among other reasons: The Report may not include the most updated and relevant information from all relevant sources, including later Reports, if any, at the time of the investment decision, so any investment decision shall consider these; The Analysis considers data, information and assessments provided by the company and from sources that were published by third parties (however, even reliable sources contain unknown errors from time to time); the methodology focused on major known products, activities and target markets of the Company that may have a significant impact on its performance as per our discretion, but it may ignore other elements; the Company was not allowed to share any insider information; any investment decision must be based on a clear understanding of the technologies, products, business environments, and any other drivers and restraints of the company's performance, regardless if such information is mentioned in the Report or not; an investment decision shall consider any relevant updated information, such as the company's website and reports on Magna; information and assessments contained in the Report are obtained from sources believed by us to be reliable (however, any source may contain unknown errors. All expressions of opinions, forecasts or estimates reflect the judgment at the time of writing, based on the Company's latest financial report, and some additional information (they are subject to change without any notice). You shall consider the entire analysis contained in the Reports. No specific part of a Report, including any summary that is provided for convenience only, shall serve per se as a basis for any investment decision. In case you perceive a contradiction between any parts of the Report, you shall avoid any investment decision before such contradiction is resolved. Frost and Sullivan only produces research that falls under the non-monetary minor benefit group in MiFID II. As we do not seek payment from the asset management community and do not have any execution function, you are able to continue receiving our research under the new MiFiD II regime. This applies to all forms of transmission, including email, website and financial platforms such as Bloomberg and Thomson.

Risks, valuation, and projections: Any stock price or equity value referred to in The Report may fluctuate. Past performance is not indicative of future performance, future returns are not guaranteed, and a loss of original capital may occur. Nothing contained in the Report is or should be relied on as, a promise or representation as to the future. The projected financial information is prepared expressly for use herein and is based upon the stated assumptions and Frost & Sullivan's analysis of information available at the time that this Report was prepared. There is no representation, warranty, or other assurance that any of the projections will be realized. The Report contains forward-looking statements, such as "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions. Undue reliance should not be placed on the forward-looking statements because there is no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, they involve inherent risks and uncertainties. Forward-looking information or statements contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from current projections. Macro level factors that are not directly analyzed in the Report, such as interest rates and exchange rates, any events related to the eco-system, clients, suppliers, competitors, regulators, and others may fluctuate at any time. An investment decision must consider the Risks described in the Report and any other relevant Reports, if any, including the latest financial reports of the company. R&D activities shall be considered as high risk, even if such risks are not specifically discussed in the Report. Any investment decision shall consider the impact of negative and even worst case scenarios. Any relevant forward-looking statements as defined in Section 27A of the Securities Act of 1933 and Section 21E the Securities Exchange Act of 1934 (as amended) are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

TASE Analysis Scheme: The Report is authored by Frost & Sullivan Research & Consulting Ltd. within the framework of the Analysis Scheme of the Tel Aviv Stock Exchange ("TASE") regarding the provision of analysis services on companies that participate in the analysis scheme (see details: www.tase.co.il/LPages/TechAnalysis/Tase\_Analysis\_Site/index.html, www.tase.co.il/LPages/InvestorRelations/english/tase-analysis-program.html), an agreement that the company has signed with TASE ("The Agreement") and the regulation and supervision of the Israel Security Authority (ISA). FSRC and its lead analyst are licensed by the ISA as investment advisors. Accordingly, the following implications and disclosure requirements shall apply.

The agreement with the Tel-Aviv Stock Exchange Ltd. regarding participation in the scheme for research analysis of public companies does not and shall not constitute an agreement on the part of the Tel-Aviv Stock Exchange Ltd. or the Israel Securities Authority to the content of the Equity Research Notes or to the recommendations contained therein.

As per the Agreement and/or ISA regulations: A summary of the Report shall also be published in Hebrew. In the event of any contradiction, inconsistency, discrepancy, ambiguity or variance between the English Report and the Hebrew summary of said Report, the English version shall prevail. The Report shall include a description of the Participant and its business activities, which shall inter alia relate to matters such as: shareholders; management; products; relevant intellectual property; the business environment in which the Participant operates; the Participant's standing in such an environment including current and forecasted trends; a description of past and current financial positions of the Participant; and a forecast regarding future developments and any other matter which in the professional view of Frost & Sullivan (as defined below) should be addressed in a research Report (of the nature published) and which may affect the decision of a reasonable investor contemplating an investment in the Participant's securities. An equity research abstract shall accompany each Equity Research Report, describing the main points addressed. A thorough analysis and discussion will be included in Reports where the investment case has materially changed. Short update notes, in which the investment case has not materially changed, will include a summary valuation discussion. Subject to the agreement, Frost & Sullivan Research & Consulting Ltd. is entitled to an annual fee to be paid directly by the TASE. The fees shall be in the range of 35 to 50 thousand USD per each participant. Each participant shall pay fees for its participation in the Scheme directly to the TASE.

The named lead analyst and analysts responsible for this Report certify that the views expressed in the Report accurately reflect their personal views about the Company and its securities and that no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation or view contained in the Report. Neither said analysts nor Frost & Sullivan trade or directly own any securities in the company. The lead analyst has a limited investment advisor license for analysis only.

© 2020 All rights reserved to Frost & Sullivan and Frost & Sullivan Research & Consulting Ltd. Any content, including any documents, may not be published, lent, reproduced, quoted or resold without the written permission of the companies.