News

Dear Shareholders,

 

On behalf of the Board, I am pleased to be able to invite Shareholders to participate in a new capital raising, by means of a non-renounceable entitlement issue of one new share for every ten existing full paid ordinary shares held at 7.00pm (Sydney time) on the 3rd of March 2023, at an issue price of 25 cents per new share to raise up to approximately $2.44 million through the issue of 9,777,234 New Shares. 

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Eligible Shareholders may apply to subscribe for new shares up to or equal to their entitlement under the Offer and may also apply for additional Shortfall Shares (which are shares not taken up by Shareholders).

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Ultraclean has developed the patented Ultrex® solution, an innovative technology that separates sulphur from diesel/gas oil and marine heavy fuel oils to produce cleaner ultra-low sulphur diesel and marine very-low-sulphur fuel oil, transport fuels that meet international regulations on sulphur emissions.

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The Company’s Ultrex® solution is now being considered by oil and pipeline companies.

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Pilot testing for the Company’s first large scale plant is expected to commence in May this year at Koch Modular Process Systems, LLC (KMPS) test facility in Houston, USA.  Building on the lab scale work already done between Ultraclean and KMPS, work with KPMS will involve pilot plant testing using KMPS proprietary SCHEIBEL® process technology and Ultraclean’s proprietary chemistry, including catalyst, the successful completion of which will result in process performance guarantees. These physical testing and engineering exercises significantly reduce potential technology risk. In parallel to the pilot testing, the Company will be working with KMPS to prepare a Light Process Design Package which will provide the process flow diagrams, design data, equipment lists, and budgetary cost estimates for the first large scale plant.

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The KMPS key process equipment to facilitate the Ultrex® chemistry as per the pilot plant testing and subsequent Light Process Design Package will be designed and constructed by KMPS who have a proven track record with 40+ years of experience and 200+ modular plants installed.  

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A final investment decision (FID) on the first large scale plant is expected by the end of 2023. Subject to FID, the Company expects the plant to be operational in 2025.

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The proceeds of the Offer will be used to complete the pilot testing and Light Process Design Package with KMPS, as well as to provide working capital and cover the estimated costs of the Offer. This funding is absolutely critical to enable the Company to progress to a final investment decision on a first large scale plant.

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Recognising the potential dilutionary implications of the issue price, the Directors considered it appropriate to first make the Offer to existing Eligible Shareholders via a non-renounceable pro rata rights issue.  The Directors reserve the right to seek to progress a private placement of up to $1.0 million plus the value of any Shortfall, worth of Shares to new or existing sophisticated or institutional investors at the same Issue Price per Share.

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An electronic copy of the Offer Information Statement is being sent to Shareholders next Monday the 6th March, The Offer Information Statement (see attached hard copy of the OIS and supporting Financial Report) contains detailed information about the Offer, the financial and operating performance of the Company and the key risks associated with an investment in the New Shares.  You should read this document carefully before making an investment decision.

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The risks of an investment in the Company are set out in Section 8 of the Offer Information Statement, and you should pay particular attention to that Section of the Offer Information Statement. You should be aware there are risks associated with the Company’s business, including whether and when the Company enters into material binding contracts for the licensing or construction of the Company’s Ultrex® units, and an investment in the Company should be considered speculative. You should carefully consider these factors in light of your personal circumstances and seek professional guidance before deciding whether to apply for New Shares.

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Unless closer earlier, or extended, the Offer will be open to all Eligible Shareholders at 9:00am on 13 March 2023 (Sydney time) and will close at 5:00pm on the Closing Date being 31 March 2023 . To participate, you must be an Eligible Shareholder and you need to ensure that you have lodged your Application with your Application Monies so that they are received before the Closing Date.

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I am personally participating in the OIS and will be taking up my full entitlement under the offer. Please keep your eye out for the OIS and we urge you to consider fully supporting the offer by taking up your entitlement.

 

I thank you for your continued support of the Company.

 

If you have any questions, please do not hesitate to contact us.

 

Sincerely,

 

Andrew McFadden

Chief Executive Officer

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