Section 2.0: Carbon Revolution Limited business update as on 17^th November 2022

2.1 Company Details

Carbon Revolution Limited (ASX: CBR) is involved in the manufacturing and sale of carbon fibre wheels for automotive applications based in Australia.

2.2 Business Update

Latest Business Updates: Effective from October 31, 2022, CBR went on a trading halt. At the request of ASX, CBR requests that its securities be placed in voluntary suspension immediately pursuant to ASX Listing Rule 17.2. Prior to that, the company announced its quarterly report along with an announcement of a prospective merger with a US-based SPAC (special purpose acquisition company). The main reason of suspension remained the non-disclosure of the SPAC’s name to the shareholders. The company believed naming the SPAC may have a significant detrimental impact on the Proposed Transaction and may result in the SPAC withdrawing from transaction.

Quarterly Highlights: The revenue for the company stood at AUD 10.4mn in 1QFY23, ~66.2% hike on pcp basis. Wheel sales volume was 3,739 wheels delivering growth of ~78.0% over pcp at a relatively high average selling price per wheel at AUD 2,778. Despite the disruption to the operations team related to the necessary downsizing during the quarter, the direct cost per wheel was in line with 4QFY22 and it witnessed improved contribution margin of AUD 481 per wheel for the month. CBR closed the quarter as of 30th September with a cash balance was AUD 10.7mn.

Future Updates: Going forward, the security will probably remain suspended till ASX is satisfied about CBR’s compliance with the Listing Rules in relation to the level of information disclosed about the SPAC Merger, including the information sought in paragraph 1 of the ASX Query dated 10^th November 2022. The next date to be kept in mind for the shareholders is the date of Annual General Meeting (AGM), which is on 30^th November 2022.

Note 1: Past performance is not a reliable indicator of future performance.

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Note 3: Related Risks: This report may be looked at from a high-risk perspective. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.

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