Investor Update, page-146

Good questions Peter,

In regard to the valuation assumptions and their multiple increase in market cap following any successful agreement in the battery sector, my take on this was:

If they feel the the probability weighting is now only 12.5% but would increase eight fold on a deal being announced; it would give you a 100% probability weighting (12.5% x 8 = 100%). I took that to mean the anticipated income stream would be deemed to be 100% of their estimate of expected revenue generated from the eventual sales contract.

They currently value ADO at 2.9cps (base) to 4.0cps (optimistic) but I took it that they used 1.5cps as their static calculation price point - see page 26. That means they think we are undervalued by 93% to 167%, meaning our expected share price should be in the range of 3.6c to 5.0c if we used our recent 1.9cps and no share dilution through a cash raising.

This may be a long winded way of going about it but my determination of what they are saying is, upon a successful battery deal our share price should be in the range of 28.8cps to 40.0cps. This is still conservative, with only the Ellume deal being taken into account for POC.

I'm sure others in the HC group will have their own determination of pricing which they may share, but this is what I'll be working with.

As for a fund raising share issue, I'm of the opinion that we may yet avoid that situation if upfront payment for likely deals can be negotiated before 30th June. By then, if good news has been announced, our share price should be much higher and any cap raise would be at a significant premium to our current price, meaning less share dilution for the same dollars raised.