Status Report

10. January 2019
S T A T U S

Report from the Executive Chairman

 

Dear iQ International AG Shareholder;

 

First, we thank you for your continued loyalty and confidence. This has been a special year for both iQ Power Licensing AG and Engenavis Inc. shareholders. With the completion of the merger and reverse share split, we are now one family. Being one family, we share great technologies, management expertise and market know how that current management believes will bring substantial value to our shareholders.

As you may know, the merger and reorganization were completed on December 20, 2018.  As a result of the reverse merger, we expect the stock price to adjust accordingly. We have been informed that iQ International AG’s (Company) share listing on the Berlin Stock Exchange will be finalized on January 23, 2019 when we expect the market to begin to reflect the current value of the synergies of the combined Company based on a total outstanding stock of 33.9 million shares.

During 2018, Engenavis brought to the merged company the benefits from the approximately USD 20 million it has raised in the past two years, USD 14 million of which came from the ExWorks financing. Those funds are being used to grow the battery division of our Company.

As we look forward in this new year, we are in active discussions with institutional investment firms to provide substantial amounts for the Company’s needs during 2019, and we are also in discussions with European investment banking firms for future equity raises. We are confident about closing the upcoming financing based on the Company’s technologies, management and expanding market.

We have formed a wholly owned subsidiary named iQ Power AG which will carry on the Company’s battery business. Bob Sullivan will continue to serve as CEO of this division. We expect great things from our battery division, as Bob is finally able to focus on the creation of battery technologies, factories, distribution and other matters, whereas in the past, he had to carry on those activities as well as manage the Company’s finances and regulatory issues being listed on the Berlin Stock Exchange.  

We are also happy to announce that we are extremely fortunate to have Kevin Loman as the CEO of the Company. Kevin, who has worked closely with Bob Sullivan for many years, is a major factor in our ability to receive major funding and to carry forth an ambitious future for our Shareholders. He is an extraordinary executive, and our Board of Directors are confident that he will lead us to major successes.

There is much more to report, and we will do so periodically. As your Executive Chairman, I look forward to being more involved in shareholder and capital market matters to ensure that we provide current information and that we pursue every possible avenue to corporate success and shareholder value. Stay with us on what will be a fascinating way forward.

 

Respectfully submitted,

George M. Weiss
Executive Chairman of iQ International AG
 

14. January 2017
S T A T U S - R E P O R T

iQ Power Licensing AG  |  Status report of the management

 

Dear Shareholders and Stakeholders.

 

In the first six months of 2016 iQ Power Licensing AG (IQPLAG) was dominated by the strategic decision to continue the active engagement in the revitalization of the JV factory in South Korea. The recent upturn in sales and production in the last half of 2016 has proven the Management decision correct and shows that the potential of the factory and its meaning for the future of IQPLAG justified the sacrifice.

 

Activities in South Korea

In the 1st quarter the aggressive tooling program was completed to assure a full product line for car batteries. This allowed the plant to become a serious supplier to larger customers in North America and Europe.

As noted in earlier reports, the strategic partner of IQPLAG, Discover Energy Corporation (DEC), Canada, has provided working capital and investment capital for the tooling and equipment. More importantly, DEC began to actively market the batteries to its worldwide customer base.

It should be noted that it requires some time for major distributors to switch to new suppliers due to contractual commitments to existing suppliers. Many orders are small test orders to check if the factory can deliver quality products on time.

As orders increased at the end of the 2nd Quarter of 2016, it became apparent that the earlier estimates of production capacity were over-estimated. Production equipment and machinery was purchased to allow for an increase in capacity and output. The equipment was installed in September and October and was fully integrated during the 4th quarter of 2016.

                                                                           

Activities elsewhere

In Brazil, the Licensee finished the testing and tooling to for the start of production of batteries for the first idle-start-stop engine (ISS), which will be equipped with iQ Power technology and iQ Power Licensing has now been qualified for OEM use.

Discussions with potential European and Asian licensees been resumed in mid-year on a limited time basis due to time and logistical constraints resulting from the engagement in Korea. The success of the Korean factory aids in discussions greatly. Increased activities are foreseen for 2017.

Sales in the North America from the Licensee, Smart Battery are now included in the sales numbers of the Korean factory because Smart Battery purchases their batteries from customers of Discover Energy in the USA. The amount of batteries sold by Smart Battery, however, remained small.

 

Outlook

The progress made in 2016 is very encouraging and the plant will contribute significantly to revenue in the 2nd half of the 2016. Following the full implementation of the projected new assembly line in 2017, the sales volume is set to increase significantly during 2017 and provide stable cash flow to IQPLAG. In addition to sales from Korea, sales from Brazil and Bangladesh are expected to contribute to revenue growth.

 

Charles Rober Sullivan
CEO  —  iQ Power Licensing AG