Gencell Ltd. — Investor Presentation 2024

Apr 1, 2024

POWER FOR HUMANITY

Investors Presentation | April 2024

Legal Disclaimer

j i i t f f i The information included in this presentation (the "Information"), and any other information which is conveyed by means of this presentation, is presented for convenience purposes only, and does not constitute an exhaustive description of all data regarding Gencell Ltd. and/or its subsidiaries (the "Company") and its activity, and does not constitute a substitute for a review of the company's periodic and immediate reports, as reported to the Israel Securities Authority and to the Tel Aviv Stock Exchange Ltd. This presentation does not constitute an offer to buy or sell, or a request for offers to purchase securities, and is intended exclusively for the presentation of information. The information cannot serve as the basis for reaching any investment decision, and does not constitute any recommendation or opinion, nor any substitute for the potential investor's independent udgment. This presentation does not include all of the company's results, financial information and accompanying notes, and/or the company's business plans or a description of ts entire activity and/or of the company's risk factors. It therefore cannot serve as a substitute for independent evaluation and personally tailored advice, in accordance with the particulars of each investor, and also does not constitute a survey or comprehensive presentation of all of the information which may be relevant for the purpose of reaching nvestment decisions. The company is not responsible for the completeness or accuracy of the information and will not bear any liability for any damages and/or losses which may be incurred due to the use of the information. Insofar as there is any discrepancy between the contents of this presentation and the contents of the company's reports, the contents of the company's reports will take precedence. This presentation includes forward looking information, as defined in the Securities Law, 5728-1968, which includes forecasts, argets, estimates, approximations and other information pertaining to future events and/or matters, , which are uncertain to materialize pertaining to future events and/or matters, which are uncertain to materialize, and which are not under the company's control. Forward looking information does not constitute proven fact, and is based only on the company's subjective assessments, which, although the company considers them likely, are inherently uncertain. The main facts and figures which served as the basis for this information are acts and figures pertaining to the current situation of the company and of its business affairs, as well as macro-economic facts and figures, to the best of the company's knowledge as of the preparation date of this presentation. The forward looking information which is included in this presentation is based, in addition to the information which is available to the company, on the company's current forecasts and estimates regarding future developments in the company, and on the mutual effects that those developments could have on one another. It is emphasized that this presentation may include information which was not provided in the company's past reports and/or which was provided differently, in terms of perspective, presentation, editing, processing, or segmentation, than the way in which said information is provided in the presentation. The materialization or non-materialization of orward looking information will be affected, inter alia, by the risk factors which are characteristic of the company's activity, and by developments in the general environment and in external factors which affect the company's activity, which are unpredictable, and are not under the company's control. The company has no certainty that its forecasts and assessments, including those regarding its plans, will materialize in practice, and the company's operating results may differ significantly from the results which are estimated or mplied based on the above, inter alia, due to changes in any of the above factors. The company also has no certainty that its basic assumptions, which depend on third parties, will materialize. The readers of this presentation are therefore hereby warned that the company's future results and actual performance may differ significantly from those which are presented as part of the forward looking information in this presentation.

I t t is hereby clarified that the forecasts and forward looking projections are based on the figures and data which were available to the company as of the date of preparing his presentation, and the company does not undertake to update and/or change any such forecast and/or assessment, in order to reflect events and/or circumstances which may occur after the preparation date of this presentation.

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KEY POINTS

\$33.2m* Significant steady cost

Cash Balance as of 31.12.23 reduction achieved in FY2023 Sufficient for 18 - 20 months Expecting positive gross margin in 2024

BurnRate Market Alignment

Down from \$2.1m to Sharpen focus on highest \$1.6m per month potential for profit

\$57m GenCell Inc. Sales Pipeline Infrastructure put in place for sales 2024-2026 sales pipeline, operations in USA of this ~\$19m for 2024

* \$1.8m of the \$33.2m is held as a restricted deposit

ACTIVE MARKETS

COMMUNICATIONS UTILITIES EV CHARGING

COMMUNICATIONS

RECENT WINS LASER FOCUS ON SPECIFIC SEGMENTS

• ↳ A major European telecom provider selected GenCell to provide multiple emergency power backup units in a deal valued at ~\$5m; contract to be finalized in Q2 2024.
• ↳ PTTEP, the national Thai petroleum company purchased two GenCell BOX long-duration backup power units to deploy in Rayong, Thailand;
• ↳ NTT-AT, a subsidiary of Japan's largest telecommunications company NTT, ® remotely activated a first GenCell BOX™ system for site backup testing with support from GenCell and system integration partner JEPICO;

FOCUS MARKET

SUBSTATION RESILIENCE EV CHARGING

– FOR FLEET MANAGEMENT & BACKUP VIA DERS & MICROGRIDS GENCELL

REX GENCELL EVOX

UTILITIES - Substations

PROGRESS IN NORTH AMERICAN UTILITIES MARKET

MEXICO

• ↳ By 2022, GenCell supplied 74 systems to fully comply with CFE's specifications for Tier One auxiliary DC power;
• ↳ In 2023, GenCell provided additional units in a deal valued at ~\$4.5m;
• ↳ In 2024, GenCell is expecting in H1 to deliver a second batch of units in a second deal also valued at ~\$4.5m; the contract includes an option in H2 to expand the deal by another \$4.5m.
• ↳ By EOY2024, CFE will comprise the largest fuel cell deployment at a utility market.

UTILITIES Substations & EV Charging

PROGRESS IN NORTH AMERICAN UTILITIES MARKET

USA

• ↳ Sales of GenCell REX units in an RFI by one Texas-based utility are estimated to reach ~\$30m between 2024-2028.
• ↳ During the first of 2024 GenCell will formally launch its product line for electric utilities in the U.S.
• ↳ To penetrate the US utility market, GenCell has signed partnership agreements with key strategic partners – Turtle, INF and Techflow.

Example of estimated cost of losses over 24hr period due to power outage in a US substation

Total	\$35.1 million
Overtime and Labor:	\$6.5 million
Transportation Revenue Losses:	\$2.6 million
Overtime Payments:	\$2.0 million
Restoration Costs:	\$10.0 million
Banking Industry:	\$3.0 million
Manufacturing Industry:	\$5.0 million
Wages Lost:	\$5.0 million
Food Spoilage:	\$1.0 million

KEY INSIGHTS INTO THE CHANGING EV CHARGING MARKET UTILITIES & End Users – EV Charging

• ↳ GenCell launched its new EVOX solution ® to address the significant power gap that inhibits DC fast EV charging in many locations, especially in the U.S.;
• ↳ The EVOX value proposition has resonated with fleet managers – especially of public institutions, government agencies, communities - offices of emergency management, and microgrids - bodies for whom resilient, uninterrupted EV charging is essential.
• ↳ Each of these end-users leads us to an additional prospect – their local power utility.

Annual energy demand from electric vehicles USA

Source: McKinsey 2022

UTILITIES & End Users – EV Charging PROGRESS IN THE U.S. EV CHARGING MARKET

• ↳ First 2 units enroute to USA assigned to first two USbased sites:
  • ↳ UCLA The Transportation Department of this leading university in California is deploying EVOX to ensure power for its EV fleets & meet its sustainability targets;
  • ↳ California Mobility Center (CMC) showcasing EVOX at its global resource center in Sacramento CA as a prototype for local mobility hubs needed to drive the EV ecosystem;
• ↳ First two installations planned for Q2 2024.
• ↳ EVOX Sales Pipeline in US ~ \$20M.

We have doubled our sales potential to U.S. utilities.

– MULTIPLY OUR MARKET POTENTIAL BY OFFERING BOTH REX & EVOX

EFFORTS TO ACHIEVE PROFITABILITY

• ↳ During FY2023 the company succeeded to reduce BOX unit cost by 36% and in FY2024 a further decrease in cost of an additional ~20% is planned,
• ↳ These substantial cost reductions are expected to drive GenCell to reach a positive gross margin in FY2024;
• ↳ REX & EVOX deals in 2024 expected to close at margin of 35% (excluding manufacturing overhead expenses);
• ↳ Burn rate has been reduced by 30%, from \$2.3m to \$1.6m (commencing January 2024);
• ↳ Cash balance as of the report date is \$31m, providing a runway of 18 – 20 months;
• ↳ As part of FY2024 financial plans, the Company will act to secure its financial resilience.

Cost Reduction (BOM + Direct Labor)

GENCELL LTD. CONSOLIDATED STATEMENT GENCELL LTD. OF COMPREHENSIVE LOSS CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS (IN \$ THOUSANDS)

Key Points

• ↳ Cost of Sales includes costs of production of all the units manufactured in that year without capitalization of the cost of salaries and related expenses and sub-contractors vis-a-vis inventory in the amount of \$2.5 million against units that were to be manufactured in 2023 but were not sold and remain in inventory. Consequently, the gross losses in 2023 should have reached \$2.6 million.
• ↳ R&D Expenses in 2022 that reached some \$7.8 million, not including expenses in the amount of \$6.3 million that were capitalized as intangible assets, such that the R&D expenses in 2022 reach a total of \$14.1 million in contrast to \$13.2 million in 2023. (The Company did not capitalize R&D costs in 2023.)
• ↳ See Note 21 in the Financial Report.
• ↳ Depreciation in 2023 the Company recognized a depreciation of some \$1.7 million as a result of depreciation according to IAS Accounting Standard 36.

For the year ending December 31st
		2023	2022
	Note	\$ thousands
Sales	19	4,864	7.403
Cost of sales	20	10.034	10.054
Gross loss		5,170	2.651
Research & development expenses, net	21	13,208	7,856
Sales & marketing expenses	22	4.161	5.320
General & administrative expenses	23	7,056	6,111
Loss from Regular Activity		29,595	21,938
Loss from impairment of intangible assets	11		11,472
Impairment Losses	12,4	1,716	3,389
Impairment Losses		31,311	36,799
Financing income	24	3,320	3,515
Financing expenses	24	282	3,228
Financing revenues (expenses), net	24	3.038	287
Other income, net		28	27
Total Loss before taxes on income		28,245	36,485
Taxes on income	30	57	191
Total Loss for the period		28,302	36,676
Amounts which will be classified in the future under profit or loss, net of tax: (Profit (loss) in respect of cash flow hedging, net of tax)		1,712	(1,658)
Total comprehensive loss for the period:		26,590	38,334
Loss per single ordinary share (in USD) worth NIS 1 NV, basic and diluted	26	0.26	0.34
Weighted average of stock capital used to calculate the basic and diluted loss per share		107.656.690	107,508,908

TECHNOLOGICAL DEVELOPMENTS UPDATE

↳ GenCell Energy Management Software (GEMS):

• GEMS Intelligent IoT Edge (Datahub) software platform released, connecting all GenCell units deployed worldwide to headquarters
• EVOX GEMS SW V1 released to optimize costs per kWh, upgrading user experience.
• ↳ Fuel Cells:
  • GenCell OX™ Alpha unit in progress;
  • GenCell FOX™- Post field testing, renewed development efforts;
  • Exploring options for high power EVOX to meet market demand.
• ↳ Green Ammonia :

  - Low-scale Alpha Prototype running;

  -

KEY TAKEAWAYS

Business focus on U.S to drive \$33.2m* exponential growth Cash Balance as of 31.12.23 Dual product approach to expand Sufficient for 18 - 20 months U.S. utility market share

\$57m

Sales Pipeline 2024-2026 sales pipeline, of this ~\$19m for 2024

Achieved key lighthouse accounts in all three focus markets

Significant steady cost reduction in FY2023

Expecting positive gross margin in 2024

Significant Growth 2024 forecast of \$12-14M

* \$1.8m of the \$33.2m is held as a restricted deposit