INVESTOR PRESENTATION 2018 1
THE OFFER Raising A$5M through an ASX IPO listing CAPITAL STRUCTURE Current Shares on Issue 32.5m Shares under prospectus ($5m @ $0.20) 25m Shares to Lead Manager @ IPO 1m Total Post IPO 58.5m Undiluted Market Cap @ $0.20 $11.7m Options on issue post IPO 26.5m Management ownership post IPO 23.94% 41% Working Capital USE OF FUNDS 6% Approvals 18% Development 12% Manufacturing 23% Marketing 2
THE ROLE OF FUMIGATION The global food industry relies on fumigation to control insect and other pest infestation which cause significant economic loss to food products. Fumigation is a key biosecurity tool for controlling pests Protects and improves produce quality Fumigation occurs multiple times along the logistics chain 3
In an assessment of 124 countries threatened by a biosecurity invasion, Australia was classified as high risk and ranked 15 th for the potential cost of an invasion (US$7.8 billion). CSIRO, 2017 4
KEY ISSUES WITH EXISTING FUMIGANTS PEST RESISTANCE Increasing resistance from common grain, fruit and vegetable insects/pests Two of the most widely used fumigants are methyl bromide and phosphine - both are highly toxic to humans and have many drawbacks. These two chemicals make up 47% of the total fumigant market by cost. CONSUMER Fumigant residue on fruit, vegetable and grains are causing consumers to move to organic foods COST Long fumigation times & higher specification PPE leads to inefficiency and higher costs TOXICITY Chemicals used are highly toxic to humans and must be handled with extreme caution ENVIRONMENTAL DEGRADATION Methyl Bromide is an Ozone depleting chemical 5
COMMONLY USED FUMIGANTS PHOSPHINE Used to fumigate 75% of Australia s grain Increasing pest resistance from excessive and improper application High security risk chemical that is highly toxic to humans METHYL BROMIDE Non-specific toxicity to wide range of invertebrates Banned internationally since 2005 except for certified uses Highly toxic to humans, Ozone depleting with detectible residues 6
AN ALTERNATIVE SOLUTION ETHYL FORMATE Food grade product generally regarded as safe by the US FDA Effective fumigant against insects common to infestation of stored commodities Fast acting with exposure times of 3 to 12 hours versus days for phosphine Residue breaks down into natural compounds. No minimum residue levels Safe and easy to store and handle Does not require sealed storage or aeration 7
A WORLD FIRST SOLUTION Universal Biosecurity has developed and lodged a patent application for a safe and effective way to fumigate using ethyl formate and nitrogen gas. To date, ethyl formate has not been widely used as a fumigant due to its flammability. UBL s fumigant system has overcome this issue by utilising inert nitrogen gas to suppress the flammability of ethyl formate. can also be used with existing liquid fumigants. 8
N 2 Onsite nitrogen C 3 H 6 O 2 generator or bottles Liquid Ethyl Formate TECHNOLOGY Fume8 precisely heats and injects nitrogen gas into a stream of liquid ethyl formate through a special mixing chamber. Inert nitrogen gas acts as a carrying gas to overcome the flammability of ethyl formate. Electronically controlled UBL designed mixing chamber Fume8 s nitrogen and ethyl formate fumigant mix produces a safe, cost effective, fast acting and environmentally friendly gas fumigant. FUMIGANT Non-flammable Effective Safe Low residue Environmentally friendly 9
ADVANTAGES Low toxicity to humans (FDA classification - generally recognised as safe) Easy to Store, does not require sealed storage solutions Ethyl formate breaks down into naturally-occurring products - formic acid (food additive) and ethanol (alcohol) Operates at a significantly lower temperature and pressure - lower risk of chemical leak or combustion Acts rapidly, with exposure times of 1-8 hours, significantly less time than comparable fumigants Easy to Transport, the apparatus has been designed to fit inside a suitcase Less phytotoxicity (plant damage) less damage to food commodities Compatible with existing liquid fumigants currently in use 10
TARGET MARKET STORED GRAIN Stored Grain - on-farm, bulk storage and pre-shipment In Australia phosphine is used for 75% of all fumigation of stored grain highly toxic Grain is one of Australia s largest exports and requires fumigating multiple times along the logistics chain One large bulk grain handler in Australia spends between A$200m to A$250m on fumigation annually Chinese Government focusing on regulating food security and safety and is moving away from toxic fumigation methods 11
TARGET MARKET POST HARVEST FRUIT & VEGETABLES Post Harvest Fruit and Vegetable Fumigation Ethyl formate already approved for use on dried fruits providing near term opportunity Experienced team will seek to expand regulatory approvals for ethyl formate to other produce and countries Initially target Australia, South Korea and China but relevant to all global markets China has mandated that pineapples and strawberries being imported from Malaysia must be fumigated with ethyl formate. 12
CAPTURING THE CUSTOMER & BUILDING A BRAND DELIVERY SYSTEM Safe Reliable Cost effective Engineering solutions FUMIGANT Safe & effective Branded ethyl formate JV with chemical manufacturer CUSTOMERS Farmers & Growers Commercial Fumigators Port Operators Bulk Grain Handlers Food Storage & Logistics Freight & Logistics Goverments SERVICE Maintenance contract Spare parts ADVICE Solutions to biosecurity issues Leverage the boards expertise & open up new sales channels at the same time 13
LICENSING License access of technology to fumigation companies charging royalty fee on top-line revenue FUMIGANT SUPPLY PARTNERSHIPS UBL branded organic fumigant sold for use with Fume8, in conjunction with a large fumigant manufacturer or supplier. FIXED SYSTEMS Suitable to larger applications such as grain silos, conveyor system, trucks, trains and ships for in-transit fumigation COMMERCIAL STRATEGY The fumigation market comprises of multiple revenue sources which UBL will target to capture overtime. PORTABLE SYSTEMS Sale of products and services targeting farmers, fruit and veg handlers and distributors EQUIPMENT RENTAL For customers who prefer OPEX, this pathway could translate in to larger ongoing revenue for UBL 14
PLATFORM ESTABLISHED FOR GROWTH First commercial grade Fume8 apparatus already built and delivered Plans to enter into manufacturing agreement to accommodate large Fume8 orders Form partnerships with industry leaders and Governments for broad exposure to markets On-going Ethyl formate regulatory approval in additional countries Expansion into other supply chains elements such as chemical supply, maintenance and consultancy TODAY 2018 2019 2020 Executed two licensing agreements for roll-out of Fume8 in Australia Ethyl formate regulatory approval for different food produce in Australia International expansion into significant fumigant markets USA, China, EU, NZ Continuing R&D to remain at forefront of ethyl formate fumigation South Korea license agreements Ongoing development of additional products and next generation of devices 15
THE TEAM BIOSECURITY & FUMIGATION EXPERTS ASX & CAPTIAL MARKETS EXPERIENCE PROF. SIMON MCKIRDY Non-Executive Chairman PROF. SIMON MCKIRDY Non-Executive Chairman PhD, BSci (Agric) Mr SIMON ANDREW Managing Director BSci, Hon (Applied Chemistry) Prof. YONG LIN REN Non-Executive Director PhD, BSci (Chem) MS DANIELLE LEE Non-Executive Director LLB Internationally recognised biosecurity expert with particular expertise in plant biosecurity Deputy Chairman of the WA Biosecurity Council providing advice to WA government on biosecurity matters Most recently Biosecurity Science and Risk Manager at Chevron Australia Over 20 years experience in financial markets in Asia and Australia Equity research analyst for several global investment banks including Deutsche Bank and BoAMerrill Lynch High level management experience as founding director of ASX listed Emmerson Resources Limited (ASX:ERM) and CIO of Yowie Group (ASX:YOW) Internationally recognised scientist with expertise in management and commercialisation strategies for grain pest technology Co-author of numerous biosecurity and fumigation publications Australian representative to the Plant Health Quadrilaterals Scientific Collaboration Working Group: Methyl Bromide Alternative Project Special counsel at Jackson McDonald corporate advisory team Corporate lawyer with more than 20 years experience with approximately 9 years as legal counsel at ASX Sydney and Assistant Manager at ASX Perth Main practice areas are corporate advisory, governance and equity capital markets; regularly advises on issues relating to the Corporations Act and ASX Listing Rules 16
The Problem Increasing pest resistance, ethical awareness and regulation is forcing industry change away from traditional fumigation chemicals WHY UNIVERSAL BIOSECURITY The Solution Ethyl Formate Board & Management UBL has developed and lodged a patent application for the Fume8 technology for the application of fumigation chemicals which will address industry challenges Fast acting, effective fumigant with low toxicity and residue Internationally recognised fumigation experts Global Thematic Global sector with wide applications across different food groups for the unique Fume8 technology Commercially Ready Fume8 technology is proven and ready for commercialisation 17
Simon Andrew Managing Director M: 0488 434 483 E: sandrew@universalbiosecurity.com Simon McKirdy Chairman M: 0437 991 625 E: smckirdy@universalbiosecurity.com www.universalbiosecurity.com 18
DISCLAIMER The information contained in this document is disclosed to you by Universal Biosecurity (ACN 605 963 611) (the Company). This document does not constitute investment, financial product, legal, tax or other advice. The information in this document does not take into account your investment objectives, financial situation or particular needs. This document is intended to provide background information only and does not purport to contain all the information that a prospective investor may require. The document further does not seek to make any recommendation upon which you may reasonably rely without taking further and more specific advice. Potential investors should make their own decision whether to purchase any shares in the Company based on their own enquiries. Potential investors are advised to seek appropriate independent advice, if necessary, to determine the suitability of the investment. An investment in the Company should be considered highly speculative. The presentation contains reference to certain intentions, expectations and plans of the Company. Those intentions, expectations and plans may or may not be achieved. They are based on certain assumptions which may not be met or on which views may differ. The performance and operations of the Company may be influenced by a number of factors, many of which are outside the control of the Company. No representation or warranty, express or implied, is made by the Company or any of its directors, officers employees, advisers or agents that any intentions, expectations or plans or forward looking statements will be achieved either totally or partially. In particular, no representation or warranty is made that any particular future milestones or production will be achieved. The information contained in this document is confidential and proprietary to the Company and is included solely for prospective investors confidential use and on the understanding the prospective investor will not release or disclose the information to any other person without the permission of the Company. The information disclosed relates to the business of the Company at the date of this document. No responsibility is accepted to advise any person of any change subsequent to this date. This document is not a prospectus or other disclosure document. 19