1414 Degrees provided an update to the ASX on October 31 outlining progress on key milestones during the September quarter.
Executive Chairman, Dr Kevin Moriarty wrote to Shareholders summarising the key updates. His correspondence and the Quarterly update are provided in the link here.
Investment bank, Hannam & Partners, has initiated coverage of 1414 Degrees. The London-based bank has published an independent research report highlighting 1414 Degrees Ltd as a standout player in the thermal energy storage sector.
Read the full report: Hannam & Partners report – click here
The ASX update is provided below.<
Entitlement Offer Results and Notification of Shortfall
1414 Degrees Limited (“1414 Degrees” the “Company”) confirms that the non-renounceable pro-rata offer of new fully paid ordinary shares (Entitlement Offer, New Shares) previously announced on Friday, 14 July 2023, closed at 5:00pm (AEST) on Monday, 14 August 2023 (Closing Date).
The Company is pleased to advise that the Entitlement Offer was strongly supported by existing shareholders, with the Company receiving total applications from Eligible Shareholders of approximately $1.471 million (equal to 32,683,063 New Shares).
Reflecting on this achievement, Dr Kevin Moriarty, Executive Chairman remarked, “We are pleased our shareholders support accelerating the development of a mass-manufacturable energy storage SiBrick and see the potential of the SiBox® heat battery to impact decarbonisation efforts in high temperature industry.”
Applications from Eligible Shareholders consisted of 27,674,311 New Shares from entitlements taken up in full as well as 5,008,752 New Shares from applications for additional New Shares offered under the top up facility (Top Up Facility).
In accordance with the terms and conditions set out in the Prospectus dated 14 July 2023 (Prospectus), one free attaching option exercisable at $0.10 each on or before the day that is 24 months after the date of issue (New Option) will be issued for each New Share applied for and issued under the Entitlement Offer.
In line with the indicative timetable included in the Prospectus, the Company anticipates that New Shares and New Options (together, New Securities) applied for under the Entitlement Offer will be issued on Monday, 21 August 2023. The Company intends to lodge Appendices 2A and 3G on Monday, 21 August 2023 in accordance with this timeline.
The funds raised from the Entitlement Offer and Shortfall Offer will be primarily used to accelerate product development for commercialisation of the Company’s and SiBrickTM and SiBox® products1. This is in the wake of recent technical milestones, including:
Shortfall Offer
The Shortfall following the issue of New Securities is anticipated to be 70,059,980 Shares (Shortfall Offer Securities), equal to approximately $3.153m. Taylor Collison Limited (Lead Manager) is acting as lead manager to the Entitlement Offer and any shortfall to the Entitlement Offer (Shortfall Offer). In accordance with the Lead Manager Mandate, Taylor Collison will place the Shortfall Offer Securities on a best endeavours basis to sophisticated and professional investors, subject to the Board’s discretion as to the allocation of the Shortfall. Please refer to sections 2.2, 2.3, and 8.1 of the Prospectus for more information regarding the Shortfall Offer and the Lead Manager Mandate. The Shortfall Offer Securities will be allocated within three months after the Closing Date.
Conditional Placement Offer
Since the value of the Shortfall Offer Securities is higher than $500,000, the Company confirms that the Conditional Placement Offer will not be proceeding. Refer to section 2.5 of the Prospectus for more information regarding the Conditional Placement Offer.
1414 Degrees (ASX: 14D) is pleased to announce the successful commissioning of its SiBox® Demonstration Module (SDM), marking a key funding milestone in the SiBox Development Agreement with Woodside Energy Technologies Pty Ltd. The commissioning phase involved extensive trials, demonstrating the SDM’s ability to convert electric energy into a controlled very hot air stream for industrial processes.
The SiBricks™ in the SDM showed excellent energy storage performance, successfully undergoing 32 cycles of phase change. As previously reported the SDM has showcased its flexibility to meet a range of industry needs by operating at outlet temperatures ranging from 700°C to 850°C and delivering 6–12 hours continuous output at each set point.
The SDM is now operating autonomously and is ready for continuous cycling and discharge testing over the next 12 months to complete the validation phase. Following successful validation and a commercialisation plan, Woodside will evaluate providing further funding to the SiBox business, including potentially acquiring an equity interest in the business.
SiBox represents a significant advancement in 1414 Degrees’ energy storage technology developed over more than a decade.
Commenting on this milestone achievement, 1414 Degrees Chairman, Dr. Kevin Moriarty, stated, “Over the next 12 months, we anticipate that SiBox will emerge as an important emissions reduction solution for the industrial sectors that manufacture the infrastructure of our societies. With financial support from Woodside and the Australian Government Modern Manufacturing Initiative, we are well-positioned to make significant contributions to industries’ transition to clean energy. Our expertise in converting renewable electricity to zero-carbon heat, can help them tackle their unique challenges of high temperatures, reliability, and cost-effectiveness.”
For further information on 1414 Degrees’ agreement with Woodside Energy Technologies Pty Ltd, refer to the Company’s announcement on 13 October 2021 – https://1414degrees.com.au/1414-degrees-woodside-partnership/.
1414 Degrees Ltd is pleased to announce that all Directors have demonstrated their confidence in 1414 Degrees’ growth by applying to take up new securities in the Company under the entitlement offer announced by the Company on 14 July 2023 (“Entitlement Offer”) in accordance with their intentions set out in the prospectus for the Entitlement Offer.
This Entitlement Offer presents an opportunity for eligible shareholders to extend their investment in 1414 Degrees.
Executive Chairman of 1414 Degrees, Dr Kevin Moriarty, commented:
“The Directors’ active participation in the Entitlement Offer underscores their belief in 1414 Degrees’ potential to decarbonise high-temperature industrial heat and their dedication to maximising shareholder value.”
“Moreover, we are equally pleased to see members of staff applying for securities under the Entitlement Offer, reflecting their commitment to the Company.”
We would like to remind all eligible shareholders that the Entitlement Offer is scheduled to close at 5:00pm (AEST) on August 14, 2023 (unless varied by the Directors in accordance with the Listing Rules and applicable law). We encourage all eligible shareholders to carefully consider this opportunity to join us in our renewed mission to decarbonise high-temperature industrial heat and contribute to global net-zero targets.
Eligible shareholders can view a copy of the prospectus and access their personalised entitlement and acceptance form at www.computersharecas.com.au/14dentitlementoffer.
Your continued support and participation remains vital to your Company’s future.
Today 1414 Degrees provided the June Quarterly updated to the ASX, outlining progress on key milestones in its approach to achieving commercial outcomes for the company’s thermal energy storage technology.
Executive Chairman, Dr Kevin Moriarty wrote to shareholders today summarising the key updates. His correspondence and the Quarterly update are provided below.
Highlights
Chairman’s Letter
The quarter has been pivotal in the development of the Company’s key technologies for commercialisation. Four years of intensive development of our SiBox® latent heat battery is producing very encouraging results. This progress coincides with growing interest from high-temperature industrial heat users. It’s worth mentioning that there are currently few competitive technologies in the industrial heat market, and those that exist are still in their early stages. While hydrogen burning is considered a potential competitor for producing clean industrial heat, its high cost compared to SiBox make it a less viable substitute for fossil fuels.
Interestingly, SiBox has the potential to contribute to reducing the cost and emissions of hydrogen production, therefore contributing to the many complementary technologies needed to reach net zero targets.
Our commercialisation strategy and timeline has been coming into focus during the quarter. Our SiBrick technology is being developed for mass production in existing refractory brick plants. This approach eliminates the need to build new production facilities, thereby removing a significant scale-up barrier to manufacturing large storage capacity. The SiBrick installed in the SiBox Demonstration Module (SDM) comprises a single 1 MWh storage block that can be replicated laterally or extended to increase the capacity and power output.
In the coming months our engineers will use the performance results from the SDM to design a commercial scale SiBox of up to 100 MWh, as specified in our SiBox development agreement with Woodside Energy Technologies (Woodside). As announced in 2021, upon the successful verification of the SDM, Woodside has the option to fund this commercial pilot and earn up to 49% of the SiBox intellectual property.
Our high level economic analysis announced early in the quarter showed that SiBox technology is already competitive in countries exposed to increasing gas and fossil fuel prices. It is even more competitive in countries with emissions penalties, particularly if Carbon Border Adjustment Mechanisms apply. Additionally, our analysts predict that the build cost of SiBox will decrease with increasing capacity. A one GWh SiBox could supply up to 125 MW of highly efficient electrically generated heat to an industrial process.
Our business strategy entails licencing third-party engineering supply companies to build and deploy SiBox while 1414 Degrees continues to focus on the research and development of improved models for evolving technologies as the energy transition progresses. Initial limiting factors are likely to be the willingness of industries to retrofit the devices into existing processes, and the availability of low-cost electricity. Replacing large amounts of fossil fuels in industry will require a great expansion of renewable or other forms of electricity generation.
We had an enthusiastic response to our appeal for shareholders to name our silicon latent heat brick, with some very intriguing suggestions. My personal favourite was the amusing Silibrick, with ‘SiBrick’ being chosen and trademarked as the final name. To provide interested shareholders with a better understanding of SiBox we will be running tours of our workshop in the coming weeks.
The generator performance study for the Aurora Energy Project (Aurora) grid scale battery is complete, with the report expected by the end of July, but will not be submitted for regulatory approval until access to the transmission line has been secured. This will further delay the project and the benefits it brings to the national electricity network.
The quarter also saw the company provide some outlook on generating revenue from commercialisation. The Aurora BESS is still the most immediate prospect for generating net revenue.
The proposed commercial SiBox pilot could earn net revenues by displacing gas in an existing plant, so our technical analysts have been modelling potential revenue generation from growing SiBox deployment over decades as heat energy transitions to electricity. The results will be refined in the coming months with input from experienced economic analysts.
I look forward to reporting on a productive next quarter for shareholders.
Dr Kevin Moriarty
SiBox® Development Report
The commissioning trials of the SiBox Demonstration Module (SDM) have been successfully concluded, preparing for long term operational testing.
The SDM comprises a modular arrangement of SiBricks optimised for energy storage capacity and effective heat transfer from the heating system through to hot clean air to recover the heat on demand. The SiBricks are contained within an insulated heat store and integrated with an energy recovery system that simulates a commercial application process such as a gas burner replacement in an alumina calciner.
The commissioning process included extensive trials to demonstrate SiBox operational capabilities, optimise control setpoints, generate initial results for analysis, and identify key parameters to inform future tests. The SiBox performed to expectations and analysis and comparison of the results with the theoretical models is ongoing.
As announced during the quarter, the commissioning trials successfully demonstrated the ability to deliver sustained clean heat for 6-12 hours at temperatures of 700°C to 850°C.
Data from these trials closely align with the expectations from the engineering design tools and models developed, providing confidence for scale up designs of SiBox technology.
The 1 MWh of internal SiBricks performed robustly and were found in excellent condition on visual inspection. Several SiBricks were removed for analytical testing at different stages.
The 12-month test runs of the SDM will simulate a variety of process conditions to validate both the SiBrick material and SiBox system performance. The key assessments include temperature distribution, heat transfer mechanics and fluid dynamics for outlet temperature control.
Figure 1. Discharge temperature versus time for SiBox runs with and without control system intervention. Note longer and precise temperature in controlled runs.
Commercialisation Report
SiBox®
SiBox® thermal energy storage aims to facilitate a cost-efficient energy transition pathway for even the hardest-to-decarbonise industrial sectors, replacing significant amounts of fossil fuels. Decarbonising high temperature processes that rely on natural gas presents a significant challenge and our SiBox is specifically designed for this very high temperature market. Recent analysis by 1414 Degrees revealed a significant finding: retrofitting a renewable powered SiBox can provide a much higher value proposition than incumbent fossil fuels as it can provide grid stability services in addition to the decarbonisation benefits. The analysis also found that gas supply constraints that are likely to continue in the foreseeable future will enable the SiBox technology to achieve cost-competitiveness earlier than anticipated.
SiBrick™️
1414 Degrees’ proprietary thermal storage media, named SiBrick from 260 names suggested by shareholders, is at the core of the SiBox technology. It represents a significant breakthrough in harnessing the powerful latent heat capabilities of silicon for enabling a zero-carbon future. For over three years 1414 Degrees has been working under a technology partnership agreement with a global refractory manufacturer, Refratechnik-Steel Gmbh, to develop a mass-producible SiBrick. Refratechnik and 1414 Degrees are preparing for a production trial of 600 bricks in the next quarter. Future SiBox models could utilise up to 100,000 SiBricks per unit and underpin the commercialisation strategy with lower unit production costs.
Marketing
Green heat is a relatively new, but very large, market targeted by SiBox. The Demonstration Module showcases the technical and engineering capabilities of our technology for ultra-high temperature industries. Replacing even a portion of fossil fuel consumption in this multi-trillion-dollar market is incentivised by various forms of carbon taxes or penalties. 1414 Degrees’ technology can help major industries to reduce their compliance costs while producing greener products — cement, aluminium and steel. Our team are using data provided by industries to prepare the financial case to adopt our technology to reduce production cost and emissions. The results are being analysed by specialists and a report is expected in the current quarter.
Corporate
Graham Davies has taken over from Tom Thwaites as General Manager – Aurora for 1414 Degrees. On secondment from Arup, Graham is a chartered engineer with over 25 years experience and a particular interest in heat transfer and renewable energy. We thank Tom for his service to the company at a critical juncture. Graham’s focus is on obtaining transmission line connection for the Aurora Energy Project initiatives in renewable generation, grid stability and transition technology.
Finance
Your Company ended the quarter with $1.95 million in cash, a decrease of $755,000 from the previous quarter.
As required by ASX Listing Rule 4.7C3, the Company notes that $50,000 was paid to related parties during the quarter. These payments were Directors Fees.