Calix : April 2022 Newsletter

ASX Announcement

April 27, 2022

November Quarter Newsletter - Issue 41

Sydney, Australia | April 27, 2022 - Multi-award-winning Australian technology company Calix Limited (ASX: CXL 'Calix' or 'the Company') is pleased to announce it has released a comprehensive update on activities across its business segments. The newsletter is attached overleaf.

This announcement has been authorised for release to the ASX by:-

Phil Hodgson

Managing Director Calix Limited 9-11 Bridge Street Pymble

NSW 2073

Ph [phone]

About Calix

Calix is a team of dedicated people developing a unique, patented technology to provide industrial solutions that address global sustainability challenges.

The core technology is being used to develop more environmentally friendly solutions for advanced batteries, crop protection, aquaculture, wastewater and carbon reduction.

Calix develops its technology via a global network of research and development collaborations, including governments, research institutes and universities, some of world's largest companies, and a growing customer base and distributor network for its commercialised products and processes.

Because there's only one Earth - Mars is for Quitters.

Website:	https://www.calix.global/
Twitter:	@CalixLimited
Youtube:	CalixLimited

For more information:
Phil Hodgson	Darren Charles
Managing Director and CEO	CFO and Company Secretary
[e-mail]	[e-mail]
[phone]	[phone]
Simon Hinsley
Investor Relations
[e-mail]
[phone]

Innovating for the Earth

Because Mars is for Quitters.

CALIX NEWS ISSUE 41

Welcome to Issue 41 of the Calix Newsletter

In the recent quarter, Calix achieved a significant milestone with the LEILAC-2 Project for CO2 mitigation in the cement and lime industries, passing its Financial Investment Decision with the full support of the project consortium. This achievement was even more significant given the significant supply chain and war risks that have added considerable uncertainty, but is a testament to the resolve of the consortium to push on with the project, given the pressures and commitments to CO2 mitigation.

In this newsletter, we also explore the opportunity for the LEILAC technology in the lime industry, as well as the effort, and reasons, to develop electrification of the Calix technology. The Calix technology is being developed as a "future-proofing" option for industry. CO2 capture is a primary goal for cement and lime, but also the ability to use renewable energy including electricity and waste fuels or biomass is becoming a central value proposition as energy prices soar, and is a subject of renewed focus and development of the technology for application across many other industries.

In our water business, we look at some recent customer case studies in the US for sewer treatment, and in Asia for aquaculture. We look forward to the recession of COVID-constraints to re-ignite our growth in both these industries, given the considerable market opportunity.

In our biotech business, we achieved a significant milestone with the approval of BOOSTER-Mag - our safe, environmentally friendly crop protection product - by the Australia Pesticide and Veterinary Medicines Authority (APVMA).

This represents over two years of independent assessment of safety and efficacy of our unique product and market entry planning for the Australian 22/23 season is underway. We are very encouraged by this progress and while applications such as crop protection take time, the same environmental themes driving investment in CO2 mitigation are also starting to focus on agriculture, where we have a unique product, uniquely positioned.

In this newsletter we also feature our first Communication on Progress

("COP" report) as members of the United Nations Global Compact, focussing on our efforts in Environment, Social and Governance improvement both externally, with our stakeholders and customers, and internally, with goals we are setting for ourselves as a company.

We also feature our new team members and also Doug Kelley - our US colleague leading the IER team - and his background, in our quarterly "meet the team" article. Despite a growing team, Calix remains very focussed on hiring the right people with not only excellent skills and competencies to grow our ambition, but also alignment with our corporate objectives. Both are equally important.

As always, we continue to very much appreciate the support of all our shareholders and stakeholders as we continue our journey and ambition, to help solve global challenges, using our unique technology and dedicated team.

Meet Tim Bartlett

Meet Shammi Ferdousi

Electrical & Control Systems Engineer

Materials Engineer

Tim has over twenty years of combined professional engineering experience in electronic and electrical fields associated with electrical power networks, process control, motor drives, SCADA, telemetry networks and electronic product design. The bulk of his career has been spent working in the mining and resources industry.

He started out with a trade in electronics and then followed up with a bachelor's degree in electronic and electrical engineering. He graduated with first class honours with awards from both Engineers Australia and The Institute of Electrical Engineers.

In recent years, Tim has become a Fellow of Engineers Australia (FIEAust), is a Chartered Practitioner of Engineering (CPEng), and is registered on the National Engineering Register (NER), the Asia-Pacific Economic Cooperation (APEC) Engineer Register, the International Professional Engineer Register and is a Registered Professional Engineer of Queensland (RPEQ).

Shammi is a material scientist with more than 12 years research experience as a laboratory researcher in nanomaterials, electrochemistry and surface science. She joined Calix in January 2022 as a Materials Engineer. Before joining, she was working as Associate Research Fellow at the Institute for Frontier Materials (IFM), Deakin University which was a collaborative project with Calix. Previously she worked on the project 'moisture harvesting technology using metal doped nanotubes' at The Hong Kong University of Science and Technology (HKUST), Hong Kong SAR. She finished her undergraduate (Hons) and master's (research based) degree in Chemical Engineering from Bangladesh University of Engineering and Technology (BUET), Bangladesh.

Her research interest is battery materials, electrode preparation, electrolyte development and optimisation from laboratory to pilot scale and battery fabrication.

Tim has joined Calix as an Electrical and Control Systems Engineer, assisting the team with electrical challenges on the development of the technology and its various applications.

Meet Aqeel Mohaisen

CAD Technician

Meet Max Strokon

Technical Development Support Engineer

Aqeel Mohaisen is our new CAD technician. Because he has a strong interest for anything related to sustainability, Aqeel saw an opportunity to use his practical skills to solve environmental problems by joining Calix.

Max graduated from the University of Sydney with a bachelor's degree in Chemical and Biomolecular Engineering. His honours thesis focused on the effects of mechanical stress on 3D-printed plastics and how heat exposure affected the molecular structure printing filament.

Aqeel graduated with a master's of Engineering-Research, a CERT IV in Engieering Drafting and a CERT III in Manufacturing Technology (CAD/Drafting) both from TAFE NSW.

Max's early career began with boutique prototyping consultation and technical advice regarding CAD-CAM systems. Most recently he worked in the medical device industry as a design engineer, specialising in primary packaging for high value sterilised devices.

He has also successfully completed courses in CAD for Building Design, TAFE NSW, Energy Auditing and Efficiency in Industrial Systems and Energy Auditing and De-carbonisation of the Built Environment, both from SBRC-UOW.

Max has joined Calix as a Technical Development Support Engineer, with a view to leveraging his prototyping and production experience to assist with ongoing engineering projects. "I care about implementing technology that is sustainable, to protect the environment of the planet we all share."

Outside of work, Aqeel loves reading, researching, continuing professional development and of course cooking.

WE ARE HIRING

To learn more and apply, email:[e-mail] check out our LinkedIn page:https://www.linkedin.com/company/calix-limited/

CO2 MITIGATION

Calix's innovative project for capturing CO2 emissions from the cement and lime sectors

"LEILAC-2" - passes Financial Investment Decision milestone

Highlights

• • The Calix lead LEILAC-2 project has passed its Financial Investment Decision (FID) to build a plant capable of capturing 20% of a cement plant's CO2 at very low cost. It will be integrated into HeidelbergCement's operational plant in Hannover, Germany.

• • Supported by the EU's Horizon 2020 scheme, the Calix design is for a new type of capture technology, designed as a retrofit, scalable module, that aims to use alternative and renewable fuels.

• • This FID milestone has been achieved despite the complications arising from the global pandemic and the Russian invasion of Ukraine. We are now proceeding with detailed design, purchasing long-lead items, and expecting to commence construction in 2023. There remain key project risk flag points prior to purchasing major components, given the market situation.

• • The LEILAC approach is designed to enable a green and just transition to a low-carbon future with the objective of strengthening local industry and maximising the use of local resources, whilst also addressing climate change.

• • This first-of-a-kind modular retrofit, which addresses a cement plant's unavoidable emissions, is aiming to ultimately separate CO2 for a cost of €20 to 25 per tonne of CO2.

• • The LEILAC-2 plant is located in Hannover, providing a potential testing and backbone for future use and offshore storage options, and an excellent opportunity for decarbonising central European industry.

• • The LEILAC-2 Project Consortium includes HeidelbergCement, Calix, CEMEX, Cimpor, Engie, IKN, Lhoist, and other global research and governmental partners.

• • Critical global climate change targets have been committed to for 2050, with the Intergovernmental Panel on Climate Change (IPCC) assessment reports emphasising the need to accelerate the deployment of all CO2 mitigation technologies, and it is hoped that LEILAC can play a key role.

LEILAC - Low Emissions Intensity Lime And Cement - aims to demonstrate, at industrial scale, a breakthrough technology that can capture a cement or lime plant's unavoidable process emissions for minimal cost, thereby providing a viable and effective decarbonisation solution. The LEILAC-2 plant is being designed to capture 100ktpa of CO2.

The cement and lime industries play a vital role in our society. Cement is used in our roads, buildings, homes, offices and al-most all infrastructure. Lime is used in a variety of applications,including the iron and steel, chemical, paper, pharmaceutical, drinking water, food, and farming industries. However, the cement industry alone is responsible for around 8% of global CO2 emission, as most of its emissions are inherent to the production process and are therefore difficult to avoid.

Most cement associations and companies have committed to "net-zero" environmental processes, requiring the majority of cement plants to have carbon capture and storage solutions in place as quickly as possible.

The LEILAC Group, a subsidiary of Calix Limited, aims to apply a breakthrough in carbon capture technology that will enable the cement and lime industries to reduce their emissions dramatically - while retaining their international competitiveness - by capturing those process emissions at low cost. This is a completely new 'type' of carbon capture technology, which is a "process modification" approach, rather than requiring additional chemicals or processes, so CO2 can be separated at very low cost. The technology can also be retrofitted in a modular form at any scale, and aims to use any fuel or energy source (such as biomass, hydrogen, or electricity) - providing a 'future proof' solution.

The LEILAC-2 project was established to: demonstrate that the Calix technology can be a retrofitted solution capable of capturing 20% of a plant's emissions; be integrated without causing issues or major interruptions to the host plant; investigate the use of alternative fuels; and, be a replicable module enabling significant scale up. Since the LEILAC-2 project commenced in 2020, as a global society we have faced significant challenges resulting in delays and price increases across the supply chain. Despite these challenges, the project teams - involving talented individuals from all of the project partners - have managed to progress, de-risk and develop a costed and technically viable design. The project successfully passed its FID decision milestone, and will now proceed into the detailed design phase through 2022, followed by procurement and construction of the plant itself. There will be risk related gateways throughout the coming months to assess and deal with various risks, particularly for purchasing long lead items, and to address the current market volatility.

Although there are considerable challenges ahead, LEILAC-2, despite being a first of a kind demonstration retrofit, has the potential to separate CO2 at low cost at a commercial scale. Including expected compression, fees and, capex costs - this equates to an "abatement" (not just capture) cost of around €20-25 per tonne.

SOLVING GLOBAL CHALLENGES

If the LEILAC-2 plant can reach its nameplate capacity, this EU funded plant may capture €7.5 - 9.5million worth (EU ETS - or European Union Emissions Trading System) of CO2 annually for a total annual operating cost of €2million. The design is a replicable module, that can be duplicated to and scaled to capture 100% of a plant's process CO2 emissions. The storage of the CO2, using well established, regulated and safe practices, would be required to ensure it does not reach the atmosphere, with a variety of options being put in place globally.

LEILAC-2 remains a research and development plant, with risks as noted above, but is designed to deliver a replicable module that will be a step change in capturing carbon emissions in the cement and lime sectors. To mark this success, there will be a new website, and logo for the LEILAC Group - underscoring the central vision of successfully and economically decarbonising hard-to-abate sectors. The LEILAC technology is unfolding as a practical and affordable pathway for local industries to thrive in a carbon-constrained future.

Antonio Clausi

HeidelbergCement Group Director Competence Center Cement

"At HeidelbergCement, we are testing a wide range of new technologies to decarbonise the cement production process. Our goal is to achieve these CO2 reductions while minimising the need for additional resources, particularly fossil-based energy, and lowering costs. Maturing the LEILAC technology, steered by the highly committed Calix team, is therefore one of our priorities."

Phil Hodgson

Calix MD and CEO and Chairman of the LEILAC-2

Executive Board commented

"The positive FID decision marks a significant milestone and further demonstrates the momentum which is building around the LEILAC-2 project. The completion of the FEED* has been achieved despite the challenging circumstances and is a testament to the strong level of collaboration which has been cultivated between the consortium partners, who have all worked together to make significant progress on this breakthrough project."

The consortium is led by the LEILAC Group (technology provider Calix), and comprises HeidelbergCement, CEMEX, Cimpor, IKN GmbH, Lhoist, Port of Rotterdam, Federal Institute for Geosciences and Natural Resources (BGR), Geological Survey of Belgium (GSB), the Centre for Research and Technology-Hellas (CERTH), Polytechnic University of Milan (POLIMI), and Engie.

It is supported by the Global Cement and Concrete Association (GCCA), Global Carbon Capture and Storage Institute (GCCSI), CEMBUREAU, European Climate Research Alliance (ECRA), European Lime Association (EuLA). The project aims to apply and demonstrate a breakthrough technology that will enable the cement and lime industries to reduce their carbon footprint significantly.

*FEED - Front End Engineering Design