Mac Equity Partners Equity Capital Markets

CAPITAL STRUCTURE

Original Shares on Issue (m) 39.5

Seed Shares (m) 10.0

Total Shares Post Seed Raising (m) 49.5

Expected Issuance at IPO (m) 25.0

Total Expected Shares at IPO (m) 74.5

Nanollose Ltd | Company Update

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KEY MANAGEMENT

Ranjit Ahl CEO

Gary Cass Director

Dr Wayne Best Director

Dr Brad Berven Lead Materials Scientist

KEY UPDATES

Nanollose is a Perth based R&D company with the aim of revolutionising the way we produce and use cellulose-based products, and in particular, developing non-woven textiles and other materials from nanocellulose. Cellulose is an organic polymer which is the basic building block for many textiles and for paper. Cotton is the purest form of cellulose. However, Nanollose’s nanocellulose is a special type of cellulose produced from non-conventional materials and techniques.

Research and Development: Excellent progress has been made in the lab developing new materials and processes. This will expand the number of Nanollose products that can be offered to interested parties.

Technical and Manufacturing Capability: Increased the manufacturing capability through equipment purchases. Material has also been sent to MoRe Research in Sweden who are conducting substantial testing and development.

Intellectual Property: All developments in the lab are feeding into the IP portfolio. One patent for the processing of microbial cellulose is pending and Nanollose is now working towards a second patent application.

Strategic Relationships:Ongoing discussions with a number of groups from the healthcare and personal hygiene industry and academia. In particular one large-scale manufacturer within Australia has sampled the material for personal hygiene applications.

Input Waste Material Testing: Liquid waste from a major brewery has been used to successfully produce nanocellulose. Initial agreement executed with this party.

BUSINESS OVERVIEW

The Beer Dress – constructed using nanocellulose produced from beer

AVAILABLE FUNDS

Total cash post Seed Raising ($m) 0.6

Expected cash post IPO ($m) 5.0

MAC EQUITY PARTNERS

Jason Skinner | M: +61 439 975 723

jskinner@macequity.com.au

Josh Chadwick | M: +61 439 986 902

jchadwick@macequity.com.au

Ryan Laws | M: +61 438 900 255

rlaws@macequity.com.au

Hugh Pilgrim | M: +61 449 581 256

hpilgrim@macequity.com.au

COMPANY VALUATION

Seed Raising Market Cap ($m) 2.97

Expected IPO Market Cap ($m) 14.9

The Company’s work to date has focused on the production of non-woven textiles for the high fashion scene, predominantly for marketing purposes. This includes a dress made from beer and another made from sparkling wine, both of which have garnered considerable media attention. Nanollose’s business model is to patent the products and process and license the intellectual property to companies already engaged in the cellulose space. Small volume, high value products and prototypes will also be produced in-house.

MAC EQUITY PARTNERS | Equity Research

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Cellulose is the world’s most abundant naturally organic polymer and it is the main structural material used by plants. It is used industrially on a massive scale, primarily in the form of cotton fabrics, absorbent materials, cardboard and paper. Cellulose for industrial use is currently obtained from plant sources, primarily cotton and wood. However, both of these sources have their own significant issues. Cotton requires an enormous amount of water, more than 20,000L to produce just one kg, and vast acres of arable land. On the other hand, the process of breaking down wood produces as much waste as it does cellulose.

However, nanocellulose, differs from conventional plant-based cellulose in that it has nano-sized fibre particles which are much smaller than the more fibrous particles found in plant-based cellulose. It is produced by using certain bacteria to convert sugars into cellulose. The nano-structure of the nanocellulose results in new properties, making it a potentially valuable renewable polymer for engineering and fabrication applications. This includes high purity and density, shape retention, high water binding capacity and enhanced tensile strength.

The main advantage for nanocellulose is its ability to be produced through low-tech fermentation systems using the waste streams from various industries (e.g. sugar, wine, beer and food processing), requiring little land, water or energy.

Nanocellulose can also be grown to shape resulting in one-piece seamless garments with no stitching, a valuable innovation to the fashion industry.

WHAT IS NANOLLOSE The Company has recently garnered significant media attention after releasing their “Beer Dress”, a dress made entirely of beer through Nanollose technology.1 It was first exhibited at Textifood Exhibition, World EXPO 2015 in Milan, Italy, and is currently on tour around Europe and Asia.

Earlier this year, the Company also released the “Sparkling Couture Dress”, made from sparkling wine. Following on from their 2012 fermented-wine dress, Nanollose has shown how significantly their technology has developed as commercialisation draws near.

NANOLLOSE IN THE MEDIA

BOARD & MANAGEMENT Mr Gary Cass Director

Gary is a creative scientist who has been a key collaborator with numerous international arts and science projects, including Micro’be’ fermented fashion, the first dress in the world made from wine. Mr Cass’ collaborative projects have been exhibited around the world, including a fringe event at the Venice Biennale and Documenta, Germany; Signature Art Prize, Singapore and ArtStays, Slovenia.

Dr Wayne Best Director

Wayne has 30 years’ experience in organic chemistry, both in academia and industry.

He obtained his PhD in Organic Chemistry from the University of Western Australia. Dr Best is also the current Managing Director of Epichem, a construct drug discovery company which he also founded. He is a Fellow of the Royal Australian Chemical Institute as well as a graduate member of the Australian Institute of Company Directors.

Dr Brad Berven Lead Materials Scientist

Brad is an innovative materials chemist with a broad range of experience in academia and industry. He recently returned from Canada where he worked for global materials leader 3M, focused on new coatings, novel materials, product development, commercialization, and intellectual property strategy. He is applying his in-depth knowledge of 3M's commercialization processes for new products and technologies in the WA tech sector.

Sparkling Couture Dress – 2016 Red Wine Dress - 2012

Mr Terry Walsh Director

Terry is a senior commercial lawyer and manager with more than 20 years of experience in project development, mining and general commercial law. He initially worked with leading law firms in Perth and Sydney before moving in house, where he has worked as the General Counsel of Hancock Prospecting Pty Ltd and prior to that as a Corporate Counsel with Rio Tinto Ltd. In these roles he has been involved with the legal and commercial aspects associated with the development and operation of technology and mining projects. In addition to providing consulting services in the mining, technology and finance industries, he currently serves as the Chief Development Officer of Hazer

Nanollose Ltd

MAC EQUITY PARTNERS | Equity Research

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Textiles

Cotton, the most widely used natural fibre, is considered the world’s dirtiest crop because of its heavy use of pesticides and reliance on irrigation water. In an era of increasing water scarcity, clothing retailers are starting to recognise that current cotton production methods are environmentally unsustainable, ultimately undermining the industry’s ability to maintain future production.

This growing trend is pushing major retailers to seek alternatives to cotton or different methods in growing the crop. Brands such as Nike and Eileen Fisher have adopted the use of organic cotton with limited success. Organic cotton is over three times as expensive as conventional cotton which has seen the demand for the product remain low and is not a feasible long term alternative for the masses.Currently the world cotton market is estimated to be an AU$96 billion industry.2

Microbial cellulose is a viable alternative to cotton as it has a similar chemical structure, however is produced from sustainable bioprocess. The fermentation process allows it to be made on an industrial scale without the environmental impacts and expensive inputs.

MARKET OPPORTUNITIES

Personal Hygiene Products

Nanollose’s super absorbent properties make it suitable for use in an array of personal hygiene products. The biggest market in this area is disposable nappies. The global baby diapers market is expected be to a US$64 billion market by 2020.4 Increasing birth rates, rapid urbanisation and continuously improving economic conditions in developing countries is fuelling growth. Another driver is the growing demand for adult disposable nappies in countries with ageing populations such as Japan.

Currently disposable nappies are not biodegradable and take 500 years to decompose. Nanollose fibres offer a 100% biodegradable alternative. Nanollose has been in contact with a large-scale manufacturer of personal hygiene products who will be given samples for testing and analysis.

Medical Textiles Products

The Company’s microbial cellulose is non-toxic, bio-compatible and can potentially be used as a scaffold for cell growth and tissue engineering. Its ability to be grown to shape as a non-woven product within a sterile environment make microbial cellulose an exciting fabric for use in the medical textile market. The Company will target the non-woven segment of the medical textiles industry, which accounted for 55% of global volume in 2014. The global medical textiles market is projected to reach US$20 billion by 2022.3

Paper and Packaging

Microbial cellulose material has the potential to be used in paper for its superior strength properties and can also be used as a wet-end additive to enhance retention in coating and packaging applications. The global market for paper and paperboard packaging is estimated to be US$213 billion in 2020.5 Growth in the paper and paperboard market is driven by the switch in packaging solutions from plastic packaging to paper and paperboard due to the environmental concerns over non-bio-degradable or very slow degradation of plastic and metal packaging. Bio-degradable nano-cellulose produced from recycled waste material could provide a sustainable alternative.

Anti-Bacterial Properties

Microbial cellulose has strong anti-bacterial properties due to the high water binding capacity. Synthetic material allows water to sit on the surface, letting bacteria to fester. Microbial cellulose absorbs the water, impeding the bacteria’s growth. Nanollose is currently undergoing further trials to investigate commercial avenues.

Disposable Nappy Sanitary Pad

Non-Woven Surgical Kit

Beer Dress

Nanollose Ltd

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REFERENCES

MAC EQUITY PARTNERS | Equity Research Nanollose Ltd

1. https://www.cnet.com/au/news/beer-wear-dress-made-from-bacterial-fermented-brew/, https://thewest.com.au/news/wa/cheers-to-dress-made-from-beer-ng-ya-387779, http://www.telegraph.co.uk/foodanddrink/foodanddrinknews/11504374/Can-you-believe-this-dress-is-made-from-beer.html

2. http://cottonaustralia.com.au/cotton-library/fact-sheets/cotton-fact-file-the-world-cotton-market 3. http://www.grandviewresearch.com/press-release/global-medical-textiles-market 4. http://www.grandviewresearch.com/press-release/global-baby-diapers-market 5. http://www.marketsandmarkets.com/PressReleases/paper-paperboard-packaging.asp

Nanollose laboratory image of nano-cellulose being used to propagate human skin cells

Super absorbent microbial cellulose produced by Nanollose