Announcement PDF Energy Technologies Limited (ASX: EGY) ACN 002 679 469 OFFER BOOKLET Non-renounceable Rights Issue Offer A non-renounceable pro-rata offer to Eligible Shareholders on the basis of one (1) New Share for every one (1) Share held as at the Record Date at an Issue Price of $0.03 (3 cents) per New Share (Offer) to raise up to approximately $12.7 million (less costs). Last date for acceptance and payment 5.00pm (Melbourne time) on 2 October 2024 Important Notices This is an important document and requires your immediate attention. This document and the accompanying Entitlement and Acceptance Form should be read in their entirety. If you are in any doubt about what to do, you should consult your professional adviser without delay. This Offer Booklet is being issued in accordance with paragraph 2(f) of section 708AA of the Corporations Act 2001 (Cth) (Corporations Act). It is not a prospectus or other form of disclosure statement under the Corporations Act and the New Shares offered under this Offer Booklet are being issued without disclosure under the Corporations Act. It does not contain all of the information that an investor would find in a prospectus, or which may be required in order to make an informed investment decision regarding the Offer or about the rights attaching to the New Shares offered by this Offer Booklet. Please read the instructions in this Offer Booklet and on the online Entitlement and Acceptance Form regarding the acceptance of your Entitlement. This Offer Booklet is not for release, publication or distribution in the United States or elsewhere where such an offer would be in contravention of securities laws. Lead manager Legal Adviser This Offer Booklet contains certain “forward-looking statements”. Forward-looking statements include those words such as "believe", "anticipate", "estimate", "expect", "will", "plan", "should", "may", "intend", "likely", "forecast" and other similar expressions but not limited to statements regarding the outcome and effects of the Offer. Forwardlooking statements, opinions and estimates provided in the information in this Offer Booklet are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements in this Offer Booklet are current and speak only as at the date of this Offer Booklet. Important Notes 1. Offer Booklet This Offer Booklet has been prepared by Energy Technologies Limited ACN 002 679 469 (Company). This Offer Booklet is not a prospectus or other form of disclosure document under the Corporations Act 2001 (Cth) (Corporations Act) and has not been lodged with ASIC. The Offer contained in this Offer Booklet is being made without disclosure in accordance with section 708AA of the Corporations Act. As a result, it is important for Eligible Shareholders to read and understand the information on the Company and the Offer made publicly available, before accepting all or part of their Entitlement. In particular, please refer to the information in this Offer Booklet, the Company's annual reports and other announcements made available at www.asx.com.au. 2. No representation or warranty (express or implied) is given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in this Offer Booklet. This is an important document While due care and attention have been used in the preparation of forward-looking statements, you are cautioned not to place undue reliance on such statements. To the maximum extent permitted by law, the Company disclaims any obligation or undertaking to release any updates or revisions to such information to reflect any change in expectations or assumptions. The information contained in this Offer Booklet does not constitute investment advice and has been prepared without taking into account each Eligible Shareholder's investment objectives or financial circumstances. You should seek advice from your professional adviser before deciding to invest. Investing in the Company involves risks. 5. The Offer Booklet does not contain all of the information that an investor would find in a prospectus, or which may be required in order to make an informed investment decision regarding the Offer or about the rights attaching to the New Shares offered by this Offer Booklet. 3. Investors should note that the Company's past performance including Share price performance provides no guarantee or guidance as to future Share price performance. Any past performance information given in this Offer Booklet is provided for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance including the Company's future financial position or Share price performance. Disclaimer No person is authorised to give any information or to make any representation in connection with the Offer which is not contained in this Offer Booklet. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with the Offer. 6. Risks An investment in the Company is subject to investment and other known and unknown risks, uncertainties, and assumptions, many of which are outside the control of the Company and its board, which could cause actual results, performance or achievements to differ materially from future results, performance or achievements expressed or implied by any forward-looking statements in this Offer Booklet. To the extent permitted by law, neither the Company nor any other person warrants the future performance of the Company or any return on any investment made under this Offer Booklet, except as required by law and then only to the extent so required. 4. Past performance Future performance and forward-looking statements Refer to the ‘Risks’ section included in section 5 of this Offer Booklet for a summary of general and specific risk factors that may affect the Company. Neither the Company nor any other person warrants, represents or guarantees (expressly or by implication) the future performance of the New Shares or any particular rate of return on any investment made pursuant to Offer, or any particular tax treatment. 7. Eligibility Shareholders will be eligible to participate in the Offer if they have a registered address in Australia, 2 representation that there has been no breach of such laws, that the Applicant is an Eligible Shareholder, and that the Applicant is physically present in Australia, New Zealand or the United Kingdom. New Zealand and certain shareholders in the United Kingdom as at 7:00pm (AEST) on the Record Date. Applications for New Shares (including Additional New Shares) by Eligible Shareholders can only be made using the Eligible Shareholder’s Entitlement and Acceptance Form to be accompanied by payment via BPAY®, as described herein. The Entitlement and Acceptance Form sets out an Eligible Shareholder's Entitlement to participate in the Offer. Shareholders outside Australia or New Zealand (except for certain shareholders in the United Kingdom) (Ineligible Foreign Shareholders) should refer to Section 2.15 for details of how their Entitlement will be dealt with. 9. 8. Overseas Shareholders Not for Distribution outside Australia and New Zealand This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. The New Shares have not been, nor will be, registered under the U.S. Securities Act of 1933 (U.S. Securities Act) or the securities laws of any state or other jurisdiction of the United States. This Offer does not, and is not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would be unlawful to make such an offer or to issue this Offer Booklet. No action has been taken to permit a public offering of the New Shares under the Offer in any jurisdiction outside of Australia. The Entitlements may not be taken up by, and the New Shares may not be offered or sold to, any person in the United States or any person that is, or is acting for the account or benefit of, any person in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. It is not practicable for the Company to comply with the securities laws of any other overseas jurisdictions other than Australia having regard to the number of overseas Shareholders, the number and value of the New Shares these Shareholders would be offered and the cost of complying with regulatory requirements in each relevant jurisdiction. This document may not be released or distributed in the United States. The distribution of this document in other jurisdictions outside Australia may also be restricted by law and any such restrictions should be observed. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (FPO), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together "relevant persons"). The investment to which this document relates is available only to relevant persons. Any person who is not a relevant person should not act or rely on this document. Shareholders resident in New Zealand should consult their professional advisors as to whether any government or other consents are required, or other formalities need to be observed, to enable them to take up their Entitlements under the Offer. 10. Currency All references to A$, $A, dollar or $ in this Offer Booklet are to Australian currency. 11. Definitions and references to time Capitalised words and expressions in this Offer Booklet have the meaning given to them in Section 7. Unless otherwise stated, any reference to time in this Offer Booklet is a reference to Melbourne, Australia time. It is the responsibility of any Applicant to ensure compliance with any laws of a country relevant to their application. Completion online of the Entitlement and Acceptance Form (and payment by BPAY® or EFT) will be taken by the Company as a 12. Date of this Offer Booklet This Offer Booklet is dated 20 September 2024. 3 Key Offer details Key details of the Offer Offer to Eligible Shareholders 1 New Share for every 1 Share held at the Record Date at the Issue Price plus the Top-Up Facility for Shareholders who subscribe for their full Entitlement Issue Price per New Share $0.03 (3 cents) per New Share payable in full on Application Number of New Shares issued under the Offer 422,074,788 New Shares Maximum proceeds from the Offer (excluding costs associated with the Offer) Approximately $12,662,243 (before expenses and costs of the issue) Maximum number of Shares on issue following the Offer (approximately) (refer to Section 3 below for more detail) 844,149,576 Shares Important dates Event Announcement of Offer Record Date for Offer Date Thursday, 12 September 2024 7pm on Tuesday, 17 September 2024 Offer Booklet sent to Eligible Shareholders Friday, 20 September 2024 Offer opens (Opening Date) Friday, 20 September 2024 Offer closes (Closing Date) 5pm on Wednesday, 2 October 2024 Announcement of results of Offer Wednesday, 9 October 2024 Allotment of Shares issued under the Offer Wednesday, 9 October 2024 Trading of New Shares (on a normal settlement basis) starts Thursday, 10 October 2024 Note: Times and dates shown above are indicative only and subject to change. All times and dates refer to Melbourne time. The Company reserves the right, subject to the Corporations Act, the Listing Rules and the Lead Manager's consent, to vary the dates of the Offer without prior notice, including by extending the Offer or accepting late Applications, either generally or in particular cases, or to withdraw the Offer. The commencement of quotation of New Shares is subject to confirmation from ASX. References in the above noted Offer timetable to "New Shares" includes a reference to "Additional New Shares" if the context requires. Letter from the Chairman 20 September 2024 Dear Shareholder NON-RENOUNCEABLE RIGHTS ISSUE The directors (Directors) of Energy Technologies Limited (ASX: EGY) ACN 002 679 469 (Company) are pleased to offer you the opportunity to participate in a non-renounceable rights issue on the basis of 1 new fully paid ordinary share in the Company (each, a New Share) for every 1 existing share in the Company (each, a Share) held on the Record Date held (Entitlement) at an issue price of $0.03 (3 cents) per New Share (Offer Price) to raise approximately $12.7 million (before costs) (Offer). Shaw and Partners Limited have been appointed as lead manager of the Offer. The Offer is not underwritten. The Offer is available to all Shareholders who are, as at 7.00pm (Melbourne time) on 17 September 2024 (Record Date), registered (in accordance with the records of the Company's Share Registry) with a registered address in Australia, New Zealand and certain shareholders in the United Kingdom (Eligible Shareholders). Under the Offer, Eligible Shareholders are also able to apply for New Shares in excess of their Entitlement (Additional New Shares). The allocation of Additional New Shares and any scale back will be subject to the availability of Additional New Shares and the Company's absolute discretion. The Offer Price ($0.03 (3 cents)) represents a:  14.3% discount to the last traded price of A$0.035 as at 11 September 2024;  14.3% discount to the 10-day volume weighted adjusted price of A$0.035 as at and including 11 September 2024; and  7.7% discount to theoretical ex-rights price of A$0.033. Please note that Additional New Shares will only be allocated to you if there are sufficient New Shares from Eligible Shareholders who do not take up their full Entitlement or from New Shares that would have been offered to Ineligible Shareholders had they been eligible to participate in the Offer (Shortfall). In addition, the Company intends to allow the Lead Manager (defined below) to place any Additional New Shares under a Shortfall in its absolute discretion. The gross proceeds of the Offer will be used by the Company to reduce debt, expand EGY’s sales division, and replenish general working capital reserves. Proceeds will also be applied to the costs of undertaking the Offer. The pro forma consolidated balance sheet illustrates the effect of the Offer on the financial position of the Company. The Offer is to be made pursuant to s708AA of the Corporations Act and may be summarised as follows:  Australian and New Zealand residents and certain shareholders from the United Kingdom holding Shares may subscribe under the Offer for 1 New Share for every 1 Share held as at the Record Date.  The Offer of approximately 422,074,788 New Shares to an amount of approximately $12.7 million (before costs).  New Shares are priced at $0.03 (3 cents) per New Share. 5  Shareholders may also subscribe for Additional New Shares beyond their Entitlement (on the basis that some existing Shareholders will be either ineligible or may fail to fully take up their Entitlement). This ability to apply for Additional New Shares is restricted only to Eligible Shareholders (other than Directors and related parties of the Company) who also subscribe for their full Entitlement, is determined at the discretion of the Board and is referred to as a 'Top-Up Facility'.  The Directors reserve the right for up to three months after the close of the Offer to place any Shortfall at the Board's discretion but at a price no less than the Issue Price. A copy of this Offer Document has been lodged with the ASX and can be accessed on the ASX website. The funds from the Offer are important and will significantly strengthen the Company’s balance sheet and provide funds towards the Company’s business development activities, working capital, corporate activities, and offer costs. As a Board, we appreciate the support of our existing Shareholders and we have been mindful of providing existing Shareholders this opportunity to further their investment in the Company. For and on behalf of Energy Technologies Limited Yours sincerely Matthew Driscoll Chairman and Non-Executive Director 6 1. Introduction 1.1 Key Details Matter Explanation Section What is the Offer? The Offer is a non-renounceable rights issue of 1 New Share for every 1 Share held on the Record Date at an Issue Price of $0.03 (3 cents) per New Share to raise approximately $12.7 million (before costs). Section 2.1 Can I sell or transfer my Entitlement? No, the Offer is non-renounceable and, accordingly, you cannot offer to sell or transfer any of your Entitlement on the ASX or via an off-market transfer. Section 2.6 Can I purchase Additional New Shares at the same price? Yes, the Company is offering a Top-Up Facility so Eligible Shareholders who fully subscribe under the Offer will have the right to apply for Additional New Shares (limited to those New Shares not subscribed for by other Eligible Shareholders), at the same offer price. Any Additional New Shares to be issued will only be issued at the Board's discretion. There is no guarantee that the Board will issue any Additional New Shares. Section 2.9 Is there a shortfall facility? If there remains any Shortfall after allocation of Entitlements to Eligible Shareholders under the Offer, and the issue of all Additional New Shares, the Directors reserve the right for up to 3 months after the close of the Offer to place any Shortfall at the Board's discretion but at a price no less than the Issue Price. Section 2.10 Is the underwritten? No, the offer is not underwritten. Section 2.1 Is there a minimum subscription amount? No, there is no minimum subscription amount. Section 4.1 How do the New Shares rank in comparison to existing Shares All New Shares issued under the Offer will rank equally in all respects with existing Shares from the date of their issue. Section 2.20 Who can invest? Eligible Shareholders at the Record Date. Section 2.14 As an Eligible Shareholder you may: Sections 2.9 and 4.1 What are choices? Offer my  take up all or part of your Entitlement under the Offer (and if you have taken up all your Entitlement, you may apply for Additional New Shares in the Top-Up Facility); or  do nothing, in which case all of your Entitlements will lapse and you will receive no value for those lapsed Entitlements. 7 What will be the effect of the Offers on control? The effect of the Offer on the control of the Company will vary with the level of Offer Securities taken up by Eligible Shareholders under the Offer (including the issue of any Shortfall). The Company will not issue any New Shares such that such an allocation would result in the Shareholder or any person acquiring a Relevant Interest in Shares which increases their Voting Power in the Company from: (a) 20% or below to more than 20%; or (b) a starting point that is above 20% and below 90%, unless a relevant exception under Chapter 6 of the Corporations Act applies. The Company reserves the right to scale back any applications for Offer Securities which if accepted may result in a breach of Chapter 6 of the Corporations Act (in the opinion of the Board) in its absolute discretion. It is an express term of the Offer that Eligible Shareholders who apply for Offer Securities are bound to accept a lesser number of Offer Securities than they applied for or may be allocated no Offer Securities at all in the event that acceptance of the application may result in a breach of Chapter 6 of the Corporations Act (in the opinion of the Board). In both cases, excess Application Monies will be refunded without interest. 8 2. Details of the Offer 2.1 The Offer The Company is conducting a pro rata non-underwritten, non-renounceable rights issue to Eligible Shareholders to subscribe for 1 New Share at the Issue Price per New Share for every 1 Share held at the Record Date. Fractional Entitlements to New Shares will be rounded up to the nearest whole New Share. Your precise pro rata Entitlement to New Shares under the Offer is shown on your personalised entitlement and acceptance form (Entitlement and Acceptance Form). Details on how to accept your Entitlement (or part of it) are set out in Section 3.2(b). This Offer Booklet will be despatched to Eligible Shareholders on or about 20 September 2024 together with a personalised Entitlement and Acceptance Form. In the event that there are any Shortfall Shares, Eligible Shareholders may also apply for Additional New Shares in excess of their Entitlement. Additional New Shares will only be allocated to you if there are sufficient New Shares from Eligible Shareholders who do not take up their Entitlement in full together with any New Shares that would have been offered to Ineligible Shareholders had they been eligible to participate in the Offer, subject to any scale back that the Company might apply (in its absolute discretion). The Directors, as permitted under Listing Rule 7.2 Exception 3, reserve the right at their discretion to place any Shortfall Shares remaining after the satisfaction of Applications for New Shares by Eligible Shareholders (including Applications for Additional New Shares). The Directors intend to allow the Lead Manager to place up to the entirety of any Additional New Shares available under a Shortfall at their discretion at an Issue Price no less that the Issue Price under this Offer. Accordingly, if you apply for Additional New Shares, there is no guarantee you will be allocated with any. You should note that if you do not take up all of your Entitlement, then your percentage holding in the Company will be diluted. 2.2 Size of the Offer As at the Record Date the Company has the following securities on issue: Securities Number Shares (EGY) 422,074,788 Listed options expiring 31 Oct 2024 (EGYO) 25,000,058 Unlisted options expiring various dates (EGYAD and EGYAE) 9,000,000 Convertible notes (EGYAC) 11,361,500 It is expected that 422,074,788 New Shares will be issued by the Company under the Offer. Section 3.1 sets out more information regarding the expected impact of the Offer on the Company's equity capital structure. 9 2.3 Use of funds The Company is seeking approximately $12.7 million (before fees and costs) under the Offer. These funds will be used by the Company as general working capital and applied to the execution of the Company's strategic growth plan as set out below. Use of funds $A* Reduction of debt $6.6 million Expansion of sales division $0.5 million The Company’s business development activities, working capital, and corporate activities. $4.9 million Costs of the Offer $0.7 million Total $12.7 million * Subject to rounding up 2.4 Opening and Closing Date The Offer will open for receipt of acceptances on 20 September 2024. The Closing Date for acceptance of your Entitlement is 5.00 pm (Melbourne time) on 2 October 2024. The Company reserves the right, subject to the Corporations Act and the Listing Rules, to extend the last date for completion online of the Entitlement and Acceptance Form (and payment by BPAY® or EFT), or to delay or withdraw the Offer at any time without prior notice. Where the Offer is withdrawn, all Application Monies will be refunded (without interest) as soon as practicable by cheque to your registered address as noted on the Company’s share register. Any extension of the Closing Date will have a consequential effect on the issue date of New Shares. 2.5 Pro Forma Balance Sheet Set out below is the Company's (i) statement of financial position as at 30 June 2024 (unaudited) and (ii) pro forma statement of financial position as at 30 June 2024 (unaudited), giving effect to the Offer as if it occurred as at 30 June 2024 (Pro Forma Balance Sheet). 30 June 2024 (unaudited) Pro forma at 20 September 2024 Effect of Offer ASSETS CURRENT ASSETS Cash and cash equivalents 66,683 5,400,000 5,566,683 Trade and other receivables 2,158,378 - 2,158,378 Inventory and other current assets 4,831,875 - 4,831,875 88,832 - 88,832 7,145,768 5,400,000 12,545,768 Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS 10 30 June 2024 (unaudited) Pro forma at 20 September 2024 Effect of Offer Property, plant and equipment 9,710,646 - 9,710,646 Right of use assets 3,050,916 - 3,050,916 Intangible assets 119,089 - 119,089 Other non-current assets 102,051 - 102,051 TOTAL NON-CURRENT ASSETS 12,982,702 - 12,982,702 TOTAL ASSETS 20,128,470 5,400,000 25,528,470 Trade and other payables 2,519,510 - 2,519,510 Borrowings 6,283,171 - 6,283,171 Lease Liabilities 836,614 - 836,614 Employee provisions 764,364 - 764,364 10,403,659 - 10,403,659 Borrowings 10,874,712 (6,600,000) 4,274,712 Lease Liabilities 2,633,687 - 2,633,687 26,945 - 26,945 TOTAL NON-CURRENT LIABILITIES 13,535,344 (6,600,000) 6,935,344 TOTAL LIABILITIES 23,939,003 (6,600,000) 17,339,003 NET ASSETS / (LIABILITIES) (3,810,533) 12,000,000 8,189,467 Issued capital 48,055,587 12,000,000 60,055,587 Reserves 6,459,684 - 6,459,684 LIABILITIES CURRENT LIABILITIES TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Employee provisions EQUITY Accumulated losses (57,700,613) Non-controlling interest (625,191) - (625,191) (3,810,533) 12,000,000 8,189,467 TOTAL EQUITY/ (DEFICIENCY IN EQUITY) (57,700,613) The Pro Forma Balance Sheet is not intended to represent the actual financial position of the Company upon completion of the Offer. It is provided as an illustration of the effect of the Offer. The actual impact on the Company is dependent on a range of factors, many of which are outside the control of the Company and unknown at this stage. The pro-forma balance sheet has been prepared to provide Eligible Shareholders with information on the pro-forma assets and liabilities of the Company. The pro-forma financial information is presented in an abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements. The financial information "as at" 30 June 2024 has been derived from the Appendix 4E Preliminary Final Report lodged with ASX on 29 August 2024. The Pro Forma Balance Sheet is indicative only and not intended to be a statement of the Company's current financial position. 11 The Pro Forma Balance Sheet has not been audited, has been prepared for illustrative purposes only and gives effect to the Offer transactions as if they had occurred on 30 June 2024. Investors should be aware that a number of transactions have occurred after 30 June 2024 which have not been reflected in the pro forma balance sheet. These omitted transactions include:  2.6 The Company raising $2,450,000 by way of an unsecured short-term loan with an interest rate of 18% per annum. Entitlements under the Offer The Offer is non-renounceable and therefore Eligible Shareholders cannot offer to sell or transfer any of their Entitlement on the ASX or via an off-market transfer (or any other exchange or privately transferred). Shareholders who do not take up their Entitlements in full will have their percentage interest in the Company diluted as compared to that percentage as at the Record Date. As described in Section 2.10, any New Shares not taken up by an Eligible Shareholder by the Closing Date will form part of the Shares available under the Shortfall Offer, including the TopUp Facility. 2.7 No rights trading The Offer is non-renounceable. Accordingly, Entitlements will not be tradeable on ASX or otherwise transferrable. 2.8 No cooling off rights Cooling off rights do not apply to an investment in New Shares. You cannot withdraw your Application under your Entitlement and Acceptance Form once it has been received by the Company. 2.9 Top-Up Facility Eligible Shareholders (other than Directors and related parties of the Company) who fully subscribe for their entire Entitlement under the Offer may, in addition to taking up their Entitlements in full, apply for any number of Additional New Shares in excess of their Entitlements by using the Top-Up Facility. Additional New Shares will only be available where the number of New Shares the subject of Applications received under the Offer is less than the aggregate Entitlements. Any Additional New Shares issued will be at the same Issue Price of $0.03 (3 cents) per New Share. Details on how to apply for Additional New Shares under the Top-Up Facility are set out in Section 4.3. There can be no guarantee that there will be any allocation of Additional New Shares under the Top-Up Facility. Subject to the Corporations Act and the Listing Rules, the Board in its discretion may determine the allocation subscriptions for Additional New Shares (if any). It is an express term of the Offer that Eligible Shareholders who apply for Additional New Shares are bound to accept a lesser number of Additional New Shares than they applied for or may be allocated no Additional New Shares at all. In both cases, excess Application Monies will be refunded without interest. The Company reserves the right to scale back any applications for Additional Securities in its absolute discretion.