Live 1414 Degrees Ltd ASX: 14D

1414 Degrees - Why We Exist

Fixed Priced IPOType of Offer
29 May 18Offer Open
13 Jul 18Pay By
$0.35Price
$30-50 millionSize of Offer
$2,100 Minimum Investment
Taylor CollisonLead Manager
46
6957

Introduction

1414 Degrees Limited (ASX: 14D) designs, develops and manufactures Thermal Energy Storage Systems (TESS) that utilise the very high energy density of molten silicon to maximise efficiency.  The TESS is intended to provide affordable and reliable renewable energy storage. The Company’s TESS devices are versatile and scalable, differentiating them from other storage systems and technologies.

The ability to deliver heat with high efficiency means 1414 Degrees’ technology has been particularly sought-after by industry, property developers and by entities responsible for self-sufficient networks in the unregulated commercial setting. The Company’s industrial product line is being developed to meet the needs of end users ranging from waste treatment utilities to poultry processors and packaging manufacturers, all of whom have approached the company on their own initiative, seeking solutions to high energy costs and reduction in carbon emissions.

Following years of effort by the Company’s engineering team and the successful development of its commercial demonstrator, together with the support of a Commonwealth Government AusIndustry Accelerated Commercialisation grant, the Company is now in an early stage of product development and commercialisation.

Offer Overview

1414 Degrees Limited is looking to raise between $30 million and $50 million via its IPO with a market capitalisation of approximately $94.0 million at maximum subscription. 

The proceeds of the IPO will primarily be used for:

  • construction and commission of its products on four sites – a wastewater treatment plant, a poultry processing facility, a packaging manufacturer, and a site with heat offtake and connection to the electricity network;
  • engineering and commercial assessment of the local and international proposals received for TESS installations to identify the most profitable and logistically viable sites to build sales; and
  • providing working capital.

The Technology

The 1414 Degrees TESS stores electrical energy as heat in molten silicon in an insulated container, then retrieves this energy to supply heat or to generate electricity when required. Highly efficient variants of the system include burning bio-fuel to heat the store, and a heat-only version outputting steam or hot air.

The novelty of the TESS is in the high temperature use of silicon in its melting phase of 1414°C. This means the TESS is able to store large amounts of energy as both latent and sensible heat (latent heat is heat that causes a change of state with no change in temperature whereas sensible heat is related to changes in temperature with no change in phase).

TESS designs 

The Company has four modular TESS designs based on the core silicon phase change storage technology:

  1. The TESS-GRID has an architecture allowing it to store bulk energy at very high current flows and supply electricity and heat for long periods. The device is aimed at providing energy security in electricity markets with substantial renewable generation. 
  2. The TESS-IND is designed for industries and residential developments requiring reliable electricity and heat energy from renewable generation.
  3. The TESS-STEAM is designed for industries with a very high demand for heat compared to electricity. It is designed as a very high efficiency steam generator to replace gas or other energy sources with renewable energy.
  4. The GAS-TESS is being developed to burn waste gas and store the energy for recovery as electricity and heat. Its market is waste management utilities and entities requiring efficient waste gas disposal and flexible energy supply.

What differentiates the Company’s technology from alternative energy storage technologies is the capacity of its TESS products to efficiently supply high temperature heat as well as energy in the form of electricity in proportions that suit users’ specific requirements, making it unique in the energy storage market and of interest to customers in a range of industries, for a variety of applications

Revenue

1414 Degrees intends to install TESS devices in industry sites to generate operating specifications required for sales to national and international customers.  The Company will generate revenue by:

  • offering lease-purchase plans over a 10 - 20 year term with an option for the customer to purchase, subject to the Company retaining a right to buy back the TESS device. This structure, known as ‘Hardware-as-a-Service’ (HaaS), will have associated long term operating and maintenance agreements (O&M Agreements) also generating revenue; and
  • incorporating special purpose vehicles (SPVs) that integrate its TESSGRID with renewable generation and industry customers The Company would then generate cash flows from sales of its devices to the SPV and from ongoing management fees and/or fees under O&M Agreements entered into with those entities.

Management and Board

1414 Degrees Limited is managed by an energetic and experienced team with a broad range of technical, commercial and financial skills. These include:

  • Dr Kevin Moriarty, Chairman with over 40 years’ mining and oil exploration and development;
  • Robert Shepherd, Non-executive Director and founding investor with over 49 years’ experience in accounting;
  • Dana Larson - Independent Non-Executive Director with 16 years’ experience in the energy sector with a position undertaking technical assessments for American Energy Partners.

 

As set out in Section 6 of the Prospectus, 1414 Degrees Limited is subject to a range of risks, including but not limited to short operating experience; reliance on third parties, failure to build and commission TESS technology, business strategy and shortage of funding.

 

Section 734(6) disclosure: The issuer of the securities is 1414 Degrees Limited ACN 138 803 620. The securities to be issued are ordinary shares. The disclosure document for the offer can be obtained by clicking on the link above. The offers of the securities are made in, or accompanied by, a copy of the disclosure document. Investors should consider the disclosure document in deciding whether to acquire the securities. Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the disclosure document (which can be done via the electronic application form which will become available by clicking the bid button above).‚Äč

 

 

OnMarket has a limited allocation. The offer may close early and the 'Pay By' dates may change. Bids over $10,000 may be scaled back more heavily. Duplicate bids under the same investment profile, investor name or residential address may be cancelled.

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1414 Degrees Ltd ASX: 14D

1414 Degrees Ltd
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