NOVONIX Ltd — Interim / Quarterly Report 2021

Apr 29, 2021

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Graphite Graphite

10 µm SC-622 SC 622

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January – March 2021

• NOVONIX was added to the OTCQX Composite Index and the OTCQX International Index – 14 January 2021

• Prof. Jeff Dahn appointed Chief Scientific Advisor to the Company (effective July 2021) – 19 January 2021

• Awarded US$5.57M from U.S. Department of Energy for new furnace technology development – 21 January 2021

• Entered into a new five year research sponsorship agreement with Mark Obrovac’s Research Group of Dalhousie University – 12 February 2021

• Announced Emera and NOVONIX to partner on innovative residential energy storage technology – 19 February 2021

• Completed fully underwritten AUD $115M placement of new fully paid ordinary shares to institutional and sophisticated investors at an offer price of $2.90 (Institutional Placement). Proceeds of the capital raise dedicated to scaling NOVONIX Anode Materials to 10,000 tonnes capacity, investment in R&D, and to pursue international partnership opportunities – 26 February 2021

• Raised AUD $16.45M though a placement to Directors of NOVONIX, pending shareholder approval – 26 February 2021

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Agreements with Battery Makers
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SANYO Electric Co., Ltd. a subsidiary of Panasonic Corporation of Japan

• Cash balance as of 31 March 2021: $131 million

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Post-March Quarter:

• Post-March Quarter:

• Cancellation of Share Purchase Plan –7 April 2021

• Approved director placement at EGM – 27 April 2021

• Generation 2 mass production started, and successful internal qualification of material completed

• NOVONIX continues to:

• Monitor clean energy policies in North America and Europe and liaise with relevant agencies

• Provide samples of anode product and engage in discussion of qualification requirements and production capacity planning with prospective cell manufacturer and automotive OEM customers

• Engage and progress relationships with multiple international partners for potential technology partnership opportunities

• Leverage NOVONIX Battery Technology Solutions’ (BTS) position in the market to identify strategic partnership opportunities for new technology development with new and existing customers

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January – March 2021

• Furnace Systems and Production Capacity:

• Completed installation of first Generation 2 furnace system built by Harper under our strategic partnership program

• Began production of material through Generation 2 system to support next steps in customer qualification programs for Samsung SDI, Sanyo and other cell and automotive manufacturers as potential customers [Post Quarter Event]

• Material produced in Generation 2 system passed internal qualification through labs in both Tennessee and through battery testing at BTS and prepared for shipment to customers [Post Quarter Event]

• Initiated build of first Generation 3 furnace system to be installed in Tennessee before the end of calendar year

• Continued ordering necessary equipment to meet ongoing production targets

• Facilities and Expansion Plans

• Signed lease expansion to 120,000 sq ft with possession date of May 1, 2021

• Significantly progressed site selection process for expansion to 10,000 tpa of total production capacity

• Continued engineering and planning work for 30,000 tpa expansion plant to support 2025 production targets

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January – March 2021

• Continued strong revenue growth and expansion of hardware sales and R&D service offerings

• Target completion of ~8,800 sq ft building addition to current facility of July 2021.

• Entered into conditional Agreement of Purchase and Sale on new ~35,000 sq ft facility in Halifax area for continued expansion [Post Quarter Activity]

• Cathode Commercialization Activities:

• Initial Phase 1 pilot line operational since February for material optimization and performance characterization

• Hiring to expand internal cathode development team

• Continued process development internally and collaboratively with Dr. Obrovac’s group at Dalhousie pursuing new IP

• Equipment selection and facility planning initiated for 10 tonne per annum capable demonstration line to be installed in new BTS facility in 2022.

Battery Material Demand Forecast

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(000’s of Tonnes)
CAGR: 6%
9,300
2,801
CAGR: 26% 6,889
2,068
2,716
2,012
2,194
667 3,783
2,809
637
890
2020 2025 2030
(1)
Graphite Lithium Cathode Material
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Cathode material demand is projected to increase >4x over the next decade

Source: Benchmark Mineral Intelligence January 2021 Assessment.

• (1) Cathode Material based on aggregate of Nickel, Magnesium, and Cobalt (NMC).

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Sources & Uses

Use of Offer Proceeds

Sources(1)	$ million
Institutional Placement	115
Total	115
Uses	$ million
A. NOVONIX Anode Materials	95
B. Research & Development (including Cathode Commercialization Program)	10
C. International Growth Opportunities & Corporate Costs	10
Total	115

A. NOVONIX Anode Materials

• Capex and working capital to scale production to 10,000tpa

• Includes new site expansion and equipment coming online over the next 24 months, as well as working capital associated with increased production levels

• Increased scale is expected to enhance offering to customers that may have minimum contracting volume requirements.

B. Research & Development

• Two year development program for NOVONIX Cathode Materials, with focus on scaling up process technology; demonstrating commercial performance compared to industry standards through a pilot line with in-house testing capabilities; and continuing to bolster IP portfolio

• Expansion of Professor Obrovac’s team at Dalhousie University to focus on other continued technology programs (silicon, lithium-metal / solid state and beyond lithium-ion)

• Expect to leverage Canadian government (state and local) support in these R&D funding initiatives

C. International Growth Opportunities & Corporate Costs

• Working capital associated with further growth initiatives

• Pursue global growth initiatives including expansion, partnerships and licensing

• Transaction costs linked to the offer

(1) Excludes funds raised through the non-underwritten SPP and Conditional Placements. Funds raised via the SPP and Conditional Placements will further strengthen R&D investment and the ability to pursue international growth opportunities.

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Professor Jeff Dahn Overview

• Leading researcher in the field of lithium-ion batteries and materials

• Currently holds the title of NSERC/Tesla Canada Industrial Research Chair with Dalhousie University

• Long career across both industry and academia, and has spent the last 25 years as a professor at Dalhousie University, with support from 3M Company and most recently, from Tesla

• Co-authored 730 papers and has 73 inventions with patents issued or filed, including some of the early patents related to Li[NiMnCo]O2 (NMC) cathode material in 2001

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(1) Appointment effective July 1, 2021

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Professor Mark Obrovac Overview

• Leading researcher in the field of lithium-ion batteries and materials with strong background in new material synthesis

• Completed PhD under Dr. Jeff Dahn’s supervision in 2001

• Career across both industry and academia, 8 years at 3M Company working on silicon anode materials and nickelbased cathode materials

• Professor at Dalhousie University since 2010 beginning partnership with Novonix in 2018 as the NSERC/NOVONIX Industrial Research Chair

• New sponsorship under NSERC Alliance Grant for 5-years

• Co-authored 90 papers and has 27 inventions with patents issued or filed spanning anodes, cathodes, electrolytes and binder materials for lithium-ion batteries

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• Mark Obrovac is a multiple winner of The 3M Company’s highest award given for technical achievement, the Circle of Technical Excellence

• Research sponsorship program recently extended through 2026

• Team responsible for recent DPMG patent

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DOE Project Team and Goals

Anode Materials World Leader in World-wide Leader in State of the Art Anode Petroleum Coke High Temperature Materials Processing Production Furnaces

• Buffalo, NY

• Chattanooga, TN

• Houston, TX

• First Qualified US Supplier of Synthetic Graphite to Tier 1 Cell Manufacturer

• Multiple US and Global Production Sites

• Expertise in High Temperature Furnace Technology

• Strategic Alliance Between NOVONIX and Harper

First-in-the-world production scale graphitization furnace technology

• Developing valuable IP

• Highly scalable manufacturing process

• USA-made premium synthetic graphite for lithium-ion batteries

• NOVONIX will contribute US$5.92M over the project duration

• First “Generation 3” furnace system will be deployed at NOVONIX in 2021

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• Cathode Opportunity Overview

• • Cathode materials represent about 30% of the cost of a battery cell

• Current precursor synthesis (CSTR) is complex, wasteful

• Opportunity and costly

Overview:

• Novel “Dry Particle Microgranulation” (DPMG) process performs dry synthesis of high nickel materials with lower cost

• First phase pilot line running in February

• Expanding staff and scope including optimization of different key materials (NMC, NCA, and Cobalt-Free Nickel-

• Commercial based cathodes)

• Progress: • Beginning expansion plans for next phase of pilot synthesis capability for larger volumes

• Continue electrochemical testing at NOVONIX BTS’s battery pilot line and cell testing facility

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Analytical Equipment and SEM
10 µm
SC 622
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• Developing state of the art residential energy storage systems for community microgrids to be deployed under the BLOCKENERGY brand

• Focused on deployment in North American residential market for improved grid reliability

• Emera Technologies is a subsidiary of Emera Inc. (TSE: EMA), a multinational energy holding company based in Nova Scotia with more than CA$32 billion in assets in 2019

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• Chairman:

Tony Bellas

CORPORATE

• Group CEO: Dr Chris Burns

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OPERATIONS
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BTS - Bedford, Nova Scotia, CANADA

177 Bluewater Road, Bedford, NS B4B 1H1, Canada

Email: tony@novonixgroup.com Email: chris@novonixgroup.com

• Company Secretary and Financial • Group CFO: Controller: Nick Liveris Suzanne Yeates Email: nick@novonixgroup.com

Email: suzie@novonixgroup.com

PUREgraphite - Chattanooga, Tennessee, USA

Send all investor queries to: IR@novonixgroup.com

353 Corporate Place, Chattanooga, TN, 37419, USA

This announcement has been authorised for release to the ASX by the Chairman, Tony Bellas.

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