Aeristech Limited

Business Plan
Issue 04
August 2014

Financial Services & Markets Act 2000

Your capital is at risk if you invest in this opportunity. Past performance and future forecasts are
not a reliable indicator of future results. This Business Plan is not a prospectus and does not, and is
not intended to, constitute an offer or invitation to invest in securities, nor shall it, or any part of
it, be relied upon in any way in connection with an offer to subscribe for shares. Private Investor
recipients are assumed to possess a certificate of 'High Net Worth' or 'Sophistication' as set out in
articles 48 & 50 of the Financial Services & Markets Act 2000 (Financial Promotions) Order 2001.
You should seek your own independent advice in relation to the information contained therein.
Investment in a new business carries high risks as well as the possibility of high rewards; it is
highly speculative and investors should be aware that no established market exists for the trading
of shares in private companies. Before investing in a project about which information is given,
potential investors are strongly advised to take advice from an authorised person who specialises
in advising on investments of this kind. All figures are calculated by Aeristech Ltd.

Contents
1

Executive summary

The Company, Management Team and Shareholdings

Aeristech Background Technical and Commercial

Market Background Engine Boosting & Downsizing

Aeristechs Unique Selling Points versus the Competition

Business Model

12

Revenue and Financial Forecast

14

Equity Requirement

18

Conclusion / Exit & Return for Investors

19

Appendix A Directors Background

20

Appendix B Shareholder Breakdown

22

Appendix C Technology Licensing Model

23

Appendix D A-Sample Programme Plan

26

Appendix E Patents Filed and Applied for

28

Appendix F Aeristechs Customers and Partners

29

Motor Industry Terms

OEM - Original Equipment Manufacturer, a car company such as Ford, Honda, etc.
Tier1 Supplier - A company supplying components to an OEM, such as Bosch, Mahle, etc.
A-Sample - A pre-production prototype with the same functional attributes (size, weight,
performance, etc) of the final product, built using expensive one-off processes. A-sample electronics
use the same components, but they are not shrunk, integrated, and packaged as mass-production
electronics. OEM's expect to test 10 to 20 A-samples to test in pre-production vehicles before
commissioning B-, C-, and D-samples and then to mass production orders.
D-Sample - A final prototype ready for mass production
boosting supplying compressed air into an engine
supercharging a type of boosting where power is derived from the engines output power
turbocharging a type of boosting where power is derived from exhaust gas waste power
advanced boosting any system for supplying pressurised air to an engine that mitigates (fully or
partially) the classic problem of turbo lag
electric boosting an advanced boosting system using electric motor/generators

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1 Executive summary
1.1 About the Company
Aeristech was founded in 2006 by Bryn Richards with a unique method of turbocharging a vehicle to
achieve engine downsizing and CO2 savings. With the help of investors, grants, and automotive
customers, Aeristech has proven the technology at prototype level and built a portfolio of patents
and intellectual property around high-speed electric motors, compressors, and turbines (electric
boosting). Aeristech is a company limited by shares, with Bryn Richards as CEO and shareholder,
assisted by a diverse team of executive and non-executive talent.
1.2 The Market
The market for electric boosting has arrived. The market is driven by the trend towards smaller
engines in all car markets. Several economic and legislative factors drive the trend to smaller engines.
European CO2 legislation is a primary near-term driver, so Europe leads the trend. However, the
market is worldwide.
The automotive industry now accepts that advanced boosting technologies, including electric
boosting, will be the principle means of achieving engine downsizing beyond todays state of the art.
This consensus on technical direction is new. In the last two years, this consensus has led to the
creation of a market for Aeristechs technologies.
1.3 Aeristechs Unique Offering
According to Aeristechs inernal engineering analysis and volume cost estimation, Aeristech offers
the cheapest, most compact, most easily integrated, and most high-performance technology
platform for advanced boosting. Mechanical systems are very bulky and complex, but they entail
known component technologies and are often favoured by incumbent turbocharger manufactures.
Conventional electric boosting technologies have poor efficiency and performance because of the
difficulty in controlling electric motors at very high speeds. Aeristech has patented an efficient and
cheap method for controlling high-speed motors and has produced and demonstrated the most
high-performance electric compressors and turbines in the world.
1.4 Business Model
Aeristechs exit strategy is based technology licensing to the volume car market and the business
model is structured in such a way that all activities are complimentary to that goal. Aeristech
completed a research and development phase, working with OEMs and then Tier-1 manufacturers,
and then moved into a phase of revenue-earning application development. Aeristech is involved in
discussions with Tier-1s regarding licensing. Tier-1s are in various stages of technical and
commercial due diligence.
As Aeristechs technology matures, an expanding set of revenue streams become available to
Aeristech. These include:
Niche vehicle design/development and licensing (eg supercars, motorsport, limited edition)
Design/development projects for OEMs/Tier-1s (often in line with licensing discussions)
Low-volume manufacture for niche markets and aftermarket
Heavy diesel (on- and off-highway) applications in main propulsion and ancillary systems
Other electric boosting applications (rail, shipping, power generation)
Other high-speed motor/generator applications (robotics, aviation, oil & gas)

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To unlock these revenue streams, Aeristech needs to achieve a final-size, well-packaged unit to take
the product from proof-of-concept complete to product development ready (A-Sample ready, in
the language of the automotive industry). Aeristechs licensing discussions with Tier-1s are very
encouraging at Aeristechs present stage of development, but it is clear that achieving A-sample
will open doors with more Tier-1 organisations and accelerate decision making processes within the
Tier-1 organisations Aeristech is already engaging.
Aeristechs strategy is to develop revenue opportunities that support volume technology licensing,
either by being directly in line with licensing discussions, by advancing Aeristechs market position,
or by contributing to the development of the technology and company.
1.5 Equity Requirement
Aeristech is presently one step away from A-sample ready Aeristech has completed the prototype,
proof-of-concept stage. Engineering refinement is needed to produce a final size, well-engineered,
A-sample unit. Aeristech has set out a programme for the next two years to produce and publicise
an A-sample unit. Aeristechs Board has authorised an intake of funds up to 1.1m for which a 20%
equity stake is available.
1.6 Exit and Return for Investors
If successful, Aeristech could achieve an exit for investors by a disposal to a Tier-1, or by selling an
annuity from a volume licensing contract or niche manufacturing joint venture.
Niche / low-volume manufacture or licensing is expected to lead to medium-term exit opportunities
(1-3 years). These markets tend not to engage in research and development because the costs are
spread over a small number of sales. These markets therefore need technologies to be developed to
A-sample before they are taken up. An advantage of these markets is that they offer a broader array
of customers and a greater degree of control than high-volume Tier-1 licensing (being less
dependent on the decision making processes and timescales of large Tier-1s).
Profit margins can be high in niche and low-volume applications. For example, one supercar
application of 2000 units per year (two eSuperchargers per vehicle) is expected to offer profits of
1,500 per unit to be shared between Aeirstech and its manufacturing partner. Partnering is almost
certainly required in order to cover DFM (design for manufacture) and tooling costs, once Aeristech
has won the application by providing A-sample units for testing by the customer.
A licensing exit could potentially be achieved before achieving A-sample stage, and discussions are
ongoing with Tier-1s. However, achieving A-sample stage will strengthen the proposition for Tier-1s,
leaving no remaining barrier or risk other than the Tier-1s own business strategy and perceived
market risk. In a large and underserved market such as the present electric supercharger market,
Aeristechs technology at A-sample stage will be a prime candidate for licensing and by far the most
effective way for a Tier-1 to enter this new market. This is because we believe that Aeristechs
technology has been demonstrated as superior in performance and cost to other electric
supercharging and turbocharging technologies.
Aeristechs discussions with Tier-1s align with standard industry practice in technology licensing.
Aeristech predicts a net present value of circa 42 million for a non-exclusive license of an electric
supercharger. Multiple licenses, an exclusive license, and/or licenses for other electric boosting
systems based on Aeristechs technology will all attract further license revenue. Aeristechs
predicted value of an exclusive license deal is 120 million net present value. A license is expected
within two years for the electric supercharger, which could take the form of a non-exclusive license,
an exclusive license, or an outright buy-out, depending on the commercial strategy of the Tier-1.

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2 The Company, Management Team and Shareholdings

2.1 Company Structure
Aeristech Ltd (Aeristech) owns patents and patent pending applications in the field of electric turbomachinery, including compressors and turbines. Aeristech Control Technologies Ltd (ACT) a wholly
owned subsidiary of Aeristech owns patents and patent applications in electronics to drive and
control high-speed electric motors and generators. These are used in Aeristech turbo-machinery
applications and have potential applications in robotics, aerospace, and electric vehicles. This
structure allows ACT to be either sold or to license its intellectual property outside the remit of
Aeristechs sector of activity. Aeristechs activities are solely directed to commercialising electric
turbo-machinery in the automotive sector.
ACT has the same Board Members as Aeristech and would if appropriate draw on Aeristechs staff
resources. As a separate exercise, the Chairman and CEO are seeking either an investor or trade
partner to commercialise the ACT technology.
2.2 The Board
The Aeristechs Board members have extensive experience in management, finance and the
commercialisation of automotive and other new technologies. Details are attached as Appendix A.
(Chairman Position Presently Open)
Bryn Richards CEO
Julien Servant Commercial Director
Andy Tempest Non Executive Director
Hugh Kemp Non Executive Director
Clare Twemlow Non Executive Director
Clive Banks Non Executive Director.
Duncan Kerr Observer, EALP and Exceed funds have the right to a Board seat
Richard Ashmore Company Secretary and Accountant
2.3 The Executive and Engineering Teams
The Executive team includes Bryn Richards as CEO and Julien Servant as Commercial Director.
Aeristechs Chief Engineer is Kevin Gray, who has worked for 20 years in Formula 1 and high tech
start-up companies. The staff is divided into mechanical, electrical and operations teams.
2.4 Shareholdings
Aeristech has issued 3,273,998 ordinary shares to its 40 shareholders. A shareholder breakdown is
attached as Appendix B. Aeristech operates an EMI Share Option Scheme and has granted options
amounting to 5% of Aeristechs issued shares; the scheme is limited to 10% of the issued shares.

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3 Aeristech Background Technical and Commercial

To date the Company has raised 2,433,453 of equity and drawn grants to the value of 982,143.
Aeristech generated revenues of circa 150k in the financial year ending March 2014. Aeristech has
also secured 437k of grant revenues for the 2014/15 financial year.
2006

2007

2008

2009

2010

2011

Seed Funding (Private)

2014

14kW eBooster test

Bench Test

High-speed PM Motor
Rapid Acceleration

2013

Engine test with

booster and turbine

First OEM
collaboration

Feasibility

Non-Funded

2012

Performance

FullElectric turbo test

with energy storage
Vehicle Applications

Development Funding (Private and Venture Capital)

3.1 2006 to 2009 Early Research and Development

Aeristech was founded in 2006 with Angel investor funding to develop a fully electric turbocharger.
Aeristech protected this novel concept and associated Intellectual Property through Patent filing.
The turbocharger required a motor capable of delivering the full load air (mass and pressure)
requirements of an engine in less than 1 second. In achieving this, Aeristech developed and patented
a novel architecture for the electronic hardware driving the motor (or generator). In 2007, Aeristech
produced what we believe to be the worlds fastest accelerating permanent magnet motor (also the
worlds fastest, variable-speed, permanent magnet motor with a power greater than 1kW).
3.2 2009 to 2012 Engineering Development and Customer Projects
In 2010, after securing a demonstration project with a global European OEM, Aeristech raised and
entered a development phase to produce superchargers and turbochargers from its core platform
technology, often tailored to suit the needs of particular customers. Throughout collaborative and
customer projects, Aeristech has developed, kept control of, and protected a number of new patents.
(See Appendix C for list of patents both granted and applied for.)
In addition to working with car manufacturers on their engineering research programmes, Aeristech
began working with Tier-1 automotive suppliers. Tier-1 suppliers typically dont have internal
research programmes, but they become involved once they see a mass market. Tier-1 interest in
Aeristech is an important validation of the business model. A number of Aeristechs recent projects
have been with Tier-1 companies, to help them test and develop the technology for mass production.
3.3 2013 onwards Pre-Production Readiness and Technology Licensing
Aeristech expects to license its technology to trial customers and for them to develop the technology
for mass production. Aeristech is in discussion with three Tier1suppliers on that basis. The license
fees and volumes discussed with these companies match Aeristechs expectations (shown in this
plan). However, one Tier-1 expects the product to be developed to the level of A-sample before
they typically consider licensing.
To become A sample ready, Aeristech will need to develop the shaft geometry, refine the cooling
arrangements, and improve the layout of the electronic components. Aeristech has developed a
detailed work programme. A-sample electric supercharger will be available within 12 months. The
remaining technical risk is low engineering development rather than research.

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4 Market Background Engine Boosting & Downsizing

4.1 Market Drivers
Internal combustion engines will continue to be the predominant means of propulsion for vehicles
for many years. The automotive industry has to rise to the following challenges:
Internal Combustion engines need to comply with ever tightening emissions standards
Fuel consumption has to be reduced to meet the growing demand for economical cars
Customers performance expectations have to be fulfilled
Facing these constraints, the industry is rapidly moving towards engines with a lower cubic capacity
but greater specific power (commonly known as downsizing).
4.2 Emissions Legislation
Although today, emissions standards vary between countries, there is a clear trend towards tougher
emissions regulations worldwide.

Source: ICCT, Global Passenger Vehicle Standards, 2011

4.3 The Market for Boosting

Boosting technologies have been recognised as a critical enabling technology for near-term CO2
emissions reduction in vehicles, principally by using smaller engines (downsizing). Achieving target
performance in a downsized engine requires boosting (pushing more air into the engine).
The engine boosting market is currently experiencing a very fast growth, incorporating conventional
turbochargers, superchargers and multi-stage boosting systems. Rapid growth is anticipated in all
markets as well as for both petrol and diesel engines. According to Honeywell and Just-Auto, the
worldwide turbocharger penetration rate could be higher than 40% by 2018.

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4.4 The Limits of Conventional Boosting Technologies

Conventional turbochargers and superchargers can provide boost, but they have inherent drawbacks.
These drawbacks limit the degree of boosting that can be achieved through conventional
(mechanical) systems and the amount of engine downsizing and CO2 reduction. The industry-wide
near-term focus for CO2 reduction is therefore concentrated on the development of advanced
boosting technologies.
Single turbo system (conventional,
mechanical turbocharger)
For extreme downsizing (more than 30%
reduction in engine size), single-turbo systems
will not be capable of producing enough boost
pressure whilst maintaining acceptable
transient response.
Two stage turbochargers
For engine downsizing beyond 30%, advanced
boosting systems are required. One example is
multi-stage boosting, where more than one
turbocharger is used in tandem. Multi-stage
Two Stage Turbocharger System
systems have had many commercial successes,
but they still suffer from the inherent limitations (although partially mitigated) of mechanical turbos
mainly the relatively slow transient response. Furthermore these systems are complex, expensive
and difficult to package in a vehicle, as illustrated by the diagram above.
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4.5 The Role of Electric Superchargers

With very fast response time, the electric supercharger is very effective in addressing the low-speed
turbo lag issues associated with downsized engines.
The electric supercharger can be used as a single stage system on small displacement engines, such
as range extender engines for Hybrid powertrains; or it could be used as the low pressure stage in
tandem with a conventional turbocharger. The electric supercharger market introduction is expected
in 2016-2017, with several OEMs committing to integrate these boosting devices within their new
vehicle platforms.
Aeristechs proprietary electric motor and control technology offer a long-term, low-cost, compact
and efficient solution to the automotive industry at all voltage levels: 12V and 48V for passenger car
applications, 48V for off-road applications, and finally high voltage (200V to 400V) for hybrid and fuel
cell applications.
4.6 The Role of Electric Turbochargers
A fully electric turbocharger is a new concept made possible only by Aeristechs motor and control
technology. It incorporates a turbo-generator in the vehicle exhaust; a battery and control unit; and
a variable speed electric compressor. Given the availability of Aeristechs unique enabling
technology in electric motors, the electric turbocharger is the cheapest and simplest solution for
extreme engine downsizing. (Note: the fully electric turbocharger is not to be confused with
electrically assisted turbochargers used in F1 but not suitable for road cars.)
By connecting the turbine and the compressor electrically rather than mechanically and introducing
energy storage, Aeristech provides a turbocharger that is more efficient than a simple mechanical
connection (averaged across the broad range of operating points required for vehicle applications)
and circumvents the traditional drawback of turbo lag. Packaging and installation is also simpler.
The Fully Electric Turbocharger
Recovers exhaust energy over the complete driving cycle, including deceleration and cruising
when it would have been wasted
Delivers full boost at low engine speeds using stored energy, eliminating turbo lag.
Matches air input to fuel input by controlling compressor speed, improving combustion
efficiency and reducing emissions of carbon monoxide and nitrous oxide.
Installs into a more convenient package space, eliminating extraneous pipework and
electronically controlled valves.

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5 Aeristechs Unique Selling Points versus the Competition

5.1 Unique and Patented Motor and Controller
At the core of Aeristechs offering is its patented motor/generator and controller, owned by
Aeristech Control Technologies Ltd. The technology is suitable for high-speed and variable-speed
applications, such as Aeristechs electric supercharger and turbocharger. The technology allows a
motor/generator to be more compact, lighter, and cheaper to manufacture than an equivalent
motor based on conventional technology. This is accomplished by providing a smooth and wellmodulated input signal to the motor. Conventional technology can achieve this at low speeds, but
high-speed motors over-stress digital switching components such as MOSFETs and IGBTs. In
Aeristechs controller, the components are not stressed at high speed and provide fine control.
Furthermore, lighter and more compact motors have less inertia, so they are capable of rapid
changes in speed, this is especially useful in transient applications such as automotive turbocharging.
5.2 Low-Voltage Electric Supercharger Applications
These are relatively low-power systems, drawing electric energy from the vehicles battery (at 12 or
48 volts) and providing compressed air on demand. They must operate at high speed and achieve
rapid changes in speed. The job of an electric supercharger is to provide high-pressure air when the
driver wants to accelerate. The electric supercharger supplements a conventional turbocharger,
operating only while the conventional turbocharger is lagging. By supplementing the conventional
turbocharger, the electric supercharger makes a small engine perform like a large engine, helping
OEMs to downsize their engines and reduce CO2. Aeristech believes that it provides the most
compact, efficient, and low-cost alternative for electric superchargers.
Strengths
Fastest response time
Lowest cost
Least power required from the vehicle
Opportunities
OEMs are actively looking for electric
superchargers in the near term.
Interesting Business Case for Tier1
suppliers as new short term market

Weaknesses
Aeristech is not an incumbent / must
partner with a Tier-1
Threats
Conventional technology is viable in this
application, meaning there are
competitors.

5.3 Higher Power, High-Voltage eCompressor Applications

Hybrid and fuel cell vehicles typically require a high-voltage electric compressor operating at
moderate to high power levels. These eCompressors provide the full air requirement of the engine
/ fuel cell and are not supplemented by a conventional turbocharger.
At higher voltage levels, Aeristechs controller becomes the only viable option. Higher voltage levels,
although allowing more compact, efficient, and cheaper systems, require IGBT switching
components rather than MOSFETs. IGBTs are less tolerant of high-speed applications, but Aeritechs
control technology reduces the demands on the components and allows them to operate safely and
efficiently in high-speed applications. Typically a conventional controller, unlike Aristechs controller
requires the IGBTs to operate at ten times the motor frequency.

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Motor

Controller

Conventional
Control System

50 000 Hz

5 000 Hz

150 000 RPM

Aeristech Control
System

5 000 Hz

5 000 Hz

150 000 RPM

Illustrative example of switching frequency

reduction using Aeristechs control system
Strengths
Able to deliver high-speed operation with
conventional components available
today.
Opportunities
Hybrid vehicles and then fuel cells are
likely to follow the electric supercharger
market, providing medium- and longterm opportunities.

Weaknesses
At this time, only a few vehicles are
moving to a high-voltage architecture.
Threats
Future component technologies, such as
silicon carbide, could allow competitors
to enter the market (although high cost
will remain a barrier).

5.4 FullElectric Turbocharger Applications

The fullElectric turbocharger is the ultimate low-cost, full-functionality means of delivering CO2
reduction through engine downsizing. Aeristechs motors and generators, because of their inherent
efficiency and power, make the conventional turbocharger redundant in transient applications such
as passenger cars. This provides a more convenient package (lower cost) and much higher
aerodynamic efficiency (lower CO2) than a conventional turbocharger. Further by adding stored
energy the turbocharger can respond to any driver demand without perceptible lag, allowing more
engine downsizing and still further reductions on CO2.
Strengths
Cheaper than present-day multi-stage
turbo systems based on Aeristechs
analysis. Uses far less battery than hybrid
or electric vehicles.
Opportunities
CO2 legislation provides enough pressure
to force acceptance of new technology,
but not enough to force very high costs.

Weaknesses
At this time, only a few vehicles are
moving to a high-voltage architecture.

Threats
Eventually, the cost of fuel cells and
hybrid architectures will come down.

5.5 Competing Advanced and Electric Boosting Systems

Valeo VTES electric compressor
Valeo obtained an exclusive license from Control Power Technologites Ltd for a switched
reluctance motor driving an turbomachine compressor. The top speed is quoted at 70,000
RPM, and this limits the maximum boost pressure that can be achieved. Switched reluctance
motors are also known to be noisy and inefficient, and power is typically limited low (<5kW).
By offering higher speeds and efficiencies, Aeristech can provide more compact and
potentially cheaper systems at low power levels, and is the only option for higher power.
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Rotrex and HKS turbomachine compressors with geared mechanical input

These devices use a belt connected to the engines crankshaft to power the supercharger.
By using a planetary transmission, these devices operate high-speed turbomachine
compressors, which are more compact, more efficient, less costly than roots and screw-type
conventional mechanical superchargers. Because of the mechanical connection to the
engine, the installation and operation is less flexible than an electric supercharger.
Consequently, we believe the costs are higher and the benefits are lower with these systems
than with Aeristechs system. These companies focus on the aftermarket.
Electric compressors with conventional permanent magnet motors and controllers
Bosche, Borgwarner, and Magna are developing systems of this type. Conventional
permanent magnet motors and controllers are limited in speed and power by the
capabilities of modern electronic components. Whereas Aeristech bypasses these
challenges with its innovative architecture, improvements in components are steadily raising
the bar of what the conventional control method can achieve. At present, conventional
permanent magnet motors can operate up to about 80,000 RPM and 6kW. At such an
extreme performance specification, components are expensive and design freedom is
significantly restricted (eg high efficiency is achievable only in a narrow band of operation).
We believe that Aeristech offers better efficiency and lower cost in all applications and
becomes the only viable option in high-pressure or high-power applications.
Conventional superchargers
Eaton corporation has grown rapidly in recent years, and now supplies Jaguar Land Rover.
Conventional superchargers run at low-speed and are very large, expensive, and heavy.
They derive power from the engines crankshaft and have little flexibility for control. Their
main advantage is that they do not exhibit surge (a technical term for the performance limits
of turbomachine compressors in high-pressure applications), but the cost is much higher
than turbomachine compressors.
Rotak geared mechanical supercharger with supplemental electric motor
Rotrak is a joint venture between Rotrex and Torotrack. This is a variation of turbomachine
compressors with geared mechanical input. To achieve better control, this approach
introduces an electric motor to supplement (add or remove power from) the mechanical
input. This gives a degree of control that is still less than a plain electric compressor and a
cost that is higher than either a plain electric compressor or a plain mechanical supercharger.
But this approach represents an alternative to Aeristech that allows higher power from a
compact turbomachine compressor.
Incremental improvements to conventional turbochargers
As conventional turbochargers improve, the need to supplement them with superchargers
or electrification is reduced (although legislation and mounting consumer expectations
increase steadily the demands placed on turbochargers). Examples of improvements include
high-speed bearings (reducing inertia and turbo lag), variable geometry turbines (reducing
turbo lag and improving off-design efficiency), electrically actuated valves and wategates
(allowing multi-stage turbochargers), and improvements in materials technologies (allowing
tighter packaging and higher temperatures). The industry believed for 10 years from 2000 to
2010 that these incremental improvements would be sufficient to enable engine downsizing
in the medium and long term, but the present analysis is that these incremental
improvements will not be sufficient and that electrification will be needed if increasingly
stringent engine downsizing targets are to be met.

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6 Business Model
Aeristechs core business model and exit strategy are based on technology licensing to the volume
car market through Tier-1 suppliers. Aeristech completed an research and development phase,
working with OEMs and then Tier-1 manufacturers, and recently moved into a phase of revenueearning application development. Aeristech is involved in discussions with Tier-1s regarding
technology licensing. Tier-1s are in various stages of technical investigation and commercial due
diligence.
As Aeristechs technology matures, an expanding set of revenue streams become available to
Aeristech. These include:
Niche vehicle design/development and licensing (eg supercars, motorsport, limited edition)
Design/development projects for OEMs/Tier-1s (often in line with licensing discussions)
Low-volume manufacture for niche markets and aftermarket
Heavy diesel (on- and off-highway) applications in main propulsion and ancillary systems
Other electric boosting applications (rail, shipping, power generation)
Other high-speed motor/generator applications (robotics, aviation, oil & gas)
6.1 Risks in Technology Licensing
To achieve a technology license and capitalise on the near-term market opportunity for electric
superchargers, Aeristech is seeding the market with a 48V electric supercharger proof of concept
prototype. This has proven successful in getting early interest from Tier-1s, but Aeristechs Executive
Team have identified several risks:
1. Tier-1s business model: Typically Tier-1 suppliers invest in technology or product development
with a 2 to 3 years return on investment. Tier-1s business is productionisation, not research
and development, so technologies must be sufficiently near to market before Tier-1s invest.
2. A new market: As a new market opportunity, there are some uncertainties around the timing
for the introduction of advanced electric boosting systems. Product introduction is also closely
linked to new powertrain introduction which life cycle can vary from 4 to 7 years.
Having an A-Sample ready status allows Aeristech to respond quickly when a new product line
opportunity is forthcoming and a Tier-1 makes an enquiry. This also allows the Tier-1 to focus on
their core business of productionisation, so the Tier-1 is able to adopt the technology with lower
level signoff than will be required pre-A-Sample.
6.2 Risks in Accessing Niche and Low-Volume Markets
As Aeristechs technology has matured and passed various research and development milestones it
has begun to attract interest from niche and low-volume markets. The strengths in these markets
include the diversity of opportunities and lower barriers to entry, but certain risks will need to be
mitigated by entering into a joint venture or other commercial partnership with an experienced
niche manufacturer in each target market. Risks include:
1. Warranty exposure must be managed. In many instances, the vehicle manufacturer or
operator absorbs this risk for its suppliers (different from the volume automotive industry),
but certain standards will be required.
2. Up-front investment in manufacturing, although smaller than in volume applications, must
be managed.

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An A-sample is nearly a finished product for the purposes of niche markets, which do not invest in
many stages of cost reduction and product improvement. By achieving the A-sample ready stage,
Aeristech will be equipped to provide customers and partners with the data they require in order to
engage with Aeristech commercially.
6.3 Proposed Strategy A-sample Readiness
To unlock these revenue streams, Aeristech needs to achieve a final-size, well-packaged unit to take
the product from proof-of-concept complete to product development ready (A-Sample ready, in
the language of the automotive industry). Aeristechs licensing discussions with Tier-1s are very
encouraging at Aeristechs present stage of development, but it is clear that achieving A-sample
will open doors with more Tier-1 organisations and accelerate decision making processes within the
Tier-1 organisations Aeristech is already engaging.
Niche and low-volume applications tend to have less supporting infrastructure to carry out research
and development, and Tier-1 manufacturers are less inclined to develop bespoke solutions for those
markets. Therefore, A-sample readiness is essential in order to access niche and low-volume
markets. For these markets, an A-sample is close to a finished product, since niche segments are
less sensitive to piece price and do not invest as heavily in tooling, compared to mass manufacture.
By refining the technology to A-sample readiness, Aeristech positions itself to (1) work efficiently
with Tier-1s on further product development for mass production and (2) offer near-finished
production designs for Niche vehicle applications (where refinement and down-costing expectations
are less). This strategy will open a wide range of new markets to Aeristech, to complement the
research and development programme opportunities Aeristech has presently with OEMs. By
opening this wide range of markets, the A-sample readiness programme will strengthen Aeristechs
revenue base and cash position, as well as accelerate and secure Aeristechs exit strategy.
6.4 Complimentary Activity Customer Revenue Projects
Aeristechs management will aim to leverage its A-sample development program to continue to
attract the interests from Tier-1 suppliers and OEMs, and target strategic collaborative projects for
specific applications. Aeristech has a portfolio of patents and know-how sufficient to convince OEM
customers to make funds available for limited research and development programmes to allow
them to access and explore the portfolio technology. For OEMs this is viewed as a research and
development expense and a precursor to the adoption of the technology. Customer-funded
research and development projects allow Aeristech to further develop its core technology, build
relationships with OEMs and enhance its value to a potential Tier-1 licensee.
6.5 Medium-Term Opportunity Demonstrator Vehicle
A vehicle demonstrator would add value to Aeristechs offering and help to attract a greater license
value, however it would also take time and money. Aeristech is investigating opportunities to build
a grant- or customer-funded vehicle demonstrator in partnership with an automotive consultancy
business such as AVL or Ricardo.
6.6 Low/Medium-Volume Manufacture
A further step would be to embark on a self-funded, low/medium-volume manufacturing
programme. This could be done in partnership with a manufacturing centre of expertise such as
PERA, Springboard, or Productiv. By prototyping the manufacturing processes involved in producing
Aeristechs electronic and mechanical components the aSupercharger be pre-mass production ready.
A joint venture opportunity would be the preferred route for low-volume manufacture.
13
Commercial in Confidence

7 Revenue and Financial Forecast

Aeristech will target four revenue streams comprising of:
UK and EU grants for continued technology development and strategic collaborative work.
Customer revenue from engineering services for specific applications, financial
contributions for leveraging grant projects outcomes and development of prototype
systems.
From FY16 (FY ending 31st March 2016), and A-sample readiness, revenues from niche and
low-volume markets (Niche vehicle manufacturers, Defence, Aeronautics, Motorsport, Offhighway, Heavy Diesel, etc.) through strategic partnerships with key stakeholders in these
markets.
Technology Licensing to Tier-1 suppliers.
The financial forecast shows three of four revenue streams. License revenue, although expected, is
not shown because the timing of license negotiations is difficult to predict. Even without license
revenue, Aeristech forecasts steady progress to profitability. This shows a secure and conservative
position. But technology licensing will continue to be a priority for Aeristech, because we believe it
offers a very lucrative potential exit opportunity.
7.1 Financial Forecast to Profitability
FY14

FY15

FY16

FY17

Actual

Forecast

Forecast

Forecast

Sales & Other Receipts

(1)

Grant Income

179,829

Customer Revenues

149,801

436,743
120,000

Niche and low volume markets

Licence Revenue

329,976

556,743

700,000

1,110,000

Direct Costs (incl. A-sample prog.)

170,750

249,857

233,333

222,000

Director's Remuneration

132,436

132,000

150,000

150,000

Salaries

317,901

254,000

350,000

350,000

Total Receipts

450,000

400,000

200,000

360,000

50,000

350,000

See Section 7.5 and Appendix C

Payments

NIC/PAYE

46,993

42,500

55,052

55,052

Overheads

179,627

144,000

180,000

180,000

Total Payments

847,707

822,357

968,385

957,052

(517,731)

(265,614)

(268,385)

152,948

Operating Profit

(1) Grant value already secured by contract with the Technology Strategy Board.
In FY14 Aeristech generated circa 150k revenue from customers and received an additional 180k
of grants. FY15 grant income has already been secured to circa 437k through TSB.
*License Revenue: Exclusive and non-exclusive license scenarios have been modelled. The total Net
Present Value of an exclusive agreement is estimated to be worth circa 120 million, with three
staggered non-exclusive deals providing similar returns. (See Section 7.5 and Appendix C.)
14
Commercial in Confidence

7.2 12-Month Cash Flow Forecast

The forecast is based on an intake of cash of 600k from the sale of shares. The Board has
authorised up to 1.1m (20% of Aeristech) in order to add robustness to the business plan and to
allow strategic spending to access new markets or seed joint ventures when appropriate.

Apr 14

Forecast

May 14

Forecast

Jun 14

Forecast

Jul 14

Forecast

Aug 14

Forecast

Sep 14

Forecast

50,517
23,875

57,174
-

23,040

48,687
-

Niche markets
Licence Revenue

Share Premium

150,000

74,392

150,000

57,174

23,040

48,687

Direct Costs
Directors' Salary

19,579
11,000

15,000
11,000

15,000
11,000

15,000
11,000

27,250
11,000

19,796
11,000

Salaries
NIC/PAYE

23,000
3,500

22,000
3,500

22,000
3,500

22,000
3,500

22,000
3,500

22,000
3,500

Overheads

12,000

12,000

12,000

12,000

12,000

12,000

Total Payments

69,079

63,500

63,500

63,500

75,750

68,296

Operating Profit

5,313

-63,500

86,500

-6,326

-52,710

-19,609

Opening Bank Balance

115,809

121,122

57,622

144,122

137,796

85,086

Closing Bank Balance

121,122

57,622

144,122

137,796

85,086

65,477

Oct 14

Forecast

Nov 14

Forecast

Dec 14

Forecast

Jan 15

Forecast

Feb 15

Forecast

Mar 15

Forecast

62,359
10,000

23,040

64,645
10,000

43,388
-

30,720

62,628
-

389,398
120,675

Niche markets
Licence Revenue

Share Premium

450,000

600,000

72,359

473,040

74,645

43,388

30,720

62,628

1,110,073

Direct Costs
Directors' Salary

19,796
11,000

19,796
11,000

18,250
11,000

22,750
11,000

22,250
11,000

17,250
11,000

231,717
132,000

Salaries
NIC/PAYE

22,000
3,500

22,000
3,500

22,000
3,500

22,000
3,500

22,000
3,500

22,000
3,500

265,000
42,000

Overheads

12,000

12,000

12,000

12,000

12,000

12,000

144,000

Total Payments

68,296

68,296

66,750

71,250

70,750

65,750

814,717

Operating Profit

4,063

404,744

7,895

27,862

40,030

3,122

295,356

Opening Bank Balance

65,477

69,540

474,284

482,179

454,317

414,287

Closing Bank Balance

69,540

474,284

482,179

454,317

414,287

411,165

Sales & Other Receipts

Grant Income
Customer Revenues

Total Receipts
Payments

FY15

Forecast

Sales & Other Receipts

Grant Income
Customer Revenues

Total Receipts
Payments

15
Commercial in Confidence

7.3 Prototypes, Research Collaborations, and Niche/Low-Volume Applications

Aeristech earns revenue from providing prototypes and engaging in research collaborations with car
companies (OEMs and Tier-1s). Aeristech forecasts approximately 200k per year of revenue from
these sources, based on the 2013/14 financial year. This revenue will not lead to an exit for investors,
but it is an important mechanism to build relationships and develop the technology in collaboration
with industry experts.
With the development of an A-Sample, Aeristech expects to access niche markets where the
customer does not have the capability or the infrastructure to engage directly in research and
development. Aeristech has engaged supercar manufacturers and is also developing bus, heavy
diesel, off-highway and other niche applications. These form part of a risk mitigation strategy that
could provide significant returns for investors without being dependent on the timing and internal
decision making processes of volume Tier-1 manufacturers.
Profit margins can be high in niche and low-volume applications. For example, one supercar
application of 2000 units per year (two eSuperchargers per vehicle) is expected to offer profits of
1,500 per unit. (Aeristech will share that profit with any joint venture partner that has invested in
tooling costs and other manufacturing up-front costs.) Partnering is almost certainly required in
order to cover DFM (design for manufacture) and tooling costs, once Aeristech has won the
application by providing A-sample units for testing by the customer.
7.4 Technology Licensing / Buy-Out Opportunities
Aeristech has a window of opportunity with a unique offering to become a market leader in the
electric supercharger market through a technology licensing model with established Tier-1 suppliers.
Aeristech is now engaged with 3 different Tier-1 suppliers, at different levels of maturity (see below).
For more information on specific companies that Aeristech works with, see Appendix F.
Company A: 4th largest automotive OEM parts supplier globally ($30 billion sales in 2012)
This is the most advanced opportunity, with Company As management committed to offer a 48V
electric supercharger product to their OEM customers as early as 2017. Company A is currently in an
investigation phase to determine which technology they will take forward to fulfil the market
requirements. In parallel, they are building a complete business case to enable their management to
take a decision in early 2014. Aeristechs 48V electric supercharger is being evaluated as part of this
exercise with positive results thus far.
Company B: 30th largest automotive OEM parts supplier globally ($7.1 billion sales in 2012)
Aeristech is engaged with Company B on several fronts with a general interest in Aeristechs electric
supercharger technology at both 12V and 48V levels.
Aeristech has engaged a UK-based arm of Company B in a collaborative project to
demonstrate the feasibility of boosting their range extender engine from 30kW to 50kW
power output. The demonstration project was successfully completed in January 2014.
Aeristech and Company B are engaging in a simulation exercise to evaluate the benefits of
integrating Aeristechs electric supercharger to their turbocharged 3 cylinder engine.
A technology licensing deal with Company B would be linked to a commitment from an OEM, in
which case demonstration of the technology at A-sample level is a requisite.
Company C: 3rd largest automotive OEM parts supplier globally ($32.8 billion sales in 2012)
Company C have also expressed their interest in Aeristechs technology and are currently planning
an electric supercharger prototype demonstration project for 2014. Aeristechs 48V electric

16
Commercial in Confidence

supercharger proof of concept has led to Aeristech being seriously considered as a potential
technology partner.
7.5 License Revenue
The license model is a standard arrangement for the automotive industry. A license includes an upfront payment and a royalty. The up-front payment is larger in the case of an exclusive license. In
the non-exclusive case, the model assumes three customers licensing the technology on a 2-year
staggered arrangement. Further details of the assumptions and calculations can be found in
Appendix C.

17
Commercial in Confidence

8 Equity Requirement
Appendix D shows a requirement for 540k to cover fully-overheaded costs (parts and labour) to
achieve an example A-sample and to carry out testing and development to make Aeristech Asample ready for a variety of potential applications. This includes an element of marketing to
further develop customer interest.
With the projected revenue shown in Section 7, the funding gap to be filled by equity is 534k.
Section 7 also includes higher cost than the pure A-Sample readiness programme, accounting for
costs associated with customer jobs and further costs associated with runway and operating the
business through to profitability in FY17.
Aeristechs Board has authorised an intake of funds up to 1.1m for which a 20% equity stake is
available.

18
Commercial in Confidence

9 Conclusion / Exit & Return for Investors

Aeristech has a unique and valuable offering, confirmed by commercial traction, early revenue and
pull-through from automotive customers. Further revenue streams are opening up for Aeristech,
including high-volume technology licensing / buy-out for volume car applications and low-volume /
niche opportunities in various industry sectors.
Aeristech could achieve an exit for investors by a disposal to a Tier-1, or by selling an annuity from a
volume licensing contract or niche manufacturing joint venture. A Tier-1 licensing opportunity is the
most lucrative option, and all indications are that there is strong interest in electric supercharging at
this time. FullElectric turbocharging is a further step forward for the field of electric boosting.
Aeristechs unique offering for FullElectric turbocharging has achieved early commercial traction as a
research and development activity with OEMs. This is expected to achieve steadily greater
commercial traction as electric boosting and vehicle electrification trends continue.
While technology licensing remains a lucrative and attractive option with strong market pull,
Aeristech will aim to mitigate risk by seeking revenue from niche and low-volume applications.
These allow a greater degree of control and well as a broader spectrum of potential customers and
joint venture partners for Aeristech. With several industries targeting lower CO2 emissions and
lower component costs, and with electric boosting being a major global trend, Aeristech is wellpositioned to serve a variety of customers if the technology can be demonstrated to the correct level
of maturity expected by those markets.
Aeristechs discussions with Tier-1s align with standard industry practice for the acquisition of hightech products, designs, and patents. Aeristech predicts a net present value of circa 42 million for a
non-exclusive license of an electric supercharger. Multiple licenses, an exclusive license, and/or an
outright buy-out will all attract a greater sum. Aeristechs predicted value of an exclusive license
deal is 120 million net present value. A deal is expected within two years for the electric
supercharger, which could take the form of a non-exclusive license, an exclusive license, or an
outright buy-out, depending on the commercial strategy of the Tier-1.

19
Commercial in Confidence

Appendix A Directors Backgrounds

CEO: Bryn Richards
Founder of Aeristech Limited and inventor of "Hybrid Turbo-Charging Technology". In 2007, he left
e.on to pursue the concept design, engineering and development fulltime. A leading expert in
electrical and mechanical machines and, in particular, the control of ultra high speed motors. Author
of several patents. During the 3 years from incorporation until Aeristechs first funding round in 2010
he secured 250,000 of angel investment and 250,000 of grant funding. He recruited all company
staff and put in place the necessary management systems for operation of the Company.
Previously employed in power generation in Canada and the UK: experience in plant modelling and
optimisation, as well as strategic planning and energy policy formulation across all energy sectors,
including renewable power and energy storage.
Commercial Director: Julien Servant
A trained engineer and commercially minded individual, who joined Aeristech in December 2012.
After graduation in France of a Masters degree in Engineering, he moved to the UK and started his
career as an electronics engineer in Motorsport. He rapidly moved into Sales, Marketing and
Business Development roles within the automotive arena. Over the years he has gathered a wealth
of experience in the commercialisation of new technologies through technology licensing to Tier1
suppliers and OEMs. Before moving to Aeristech, he held the position of Senior Business
Development Manager with Intelligent Energy Ltd where he secured multi-million pounds
contracts with vehicle manufacturers and initiated, led and successfully negotiated a technology
licensing deal with a major European OEM.
Company Secretary and Accountant: Richard Ashmore
Chartered accountant, director of "Altus Business Consulting & Accountancy Services" - Chartered
accountants and freelance finance director services: Richard spent 17 years in senior finance roles
across manufacturing, service and distribution before forming Altus Business Consulting in 2005. His
practice offers strategic and financial business advice, development of financial systems and controls,
cash flow management and forecasting, business planning and raising finance for a wide variety of
businesses.
Director: Andy Tempest
Although a non-executive director he is committed to making himself available to support the
Aeristech team when a commercialisation proposition is received. He has experience of leading the
negotiation of licencing agreements.
Formed AGT strategic consulting in 2007 providing consultancy to Intelligent Energy and Group Lotus.
He developed the business proposition for a lightweight extended range electric delivery van and in
2011 facilitated the formation of Emerald to commercialise the proposition.
He has held CEO positions in motor sports and high performance car design companies. For 5 years
CEO of Prodrive and of Hawtal Whiting plc. Finance Director and COO of Group Lotus responsible for
two new car development programmes including the "Elise".

20
Commercial in Confidence

Director: Clare Twemlow

CFO and Member of New Wave Ventures LLP, a shareholder in Aeristech since 2010. ACA qualified
with PricewaterhouseCoopers with particular focus on high growth companies. She has 10 years'
experience of Board level positions and is experienced in fund raising and corporate development,
with commercial and financial management skills.
Director: Hugh Kemp
Provides active support, has costed Aeristech design proposals, advised on organisation, project
management and introduced a range of specialist design consultants.
At Lotus for 16 years as Director of Powertrain running programmes with OEMs worldwide
introducing new engine and transmission technology, as Product Director directed and project
managed the Lotus Elise from concept to production. In 1996 with Prodrive the motor sport
company he set up and ran their Engineering consultancy division. He has two businesses one
provides engineering and project management support the other the commercialisation of an
advanced vehicle concept.
Director: Clive Banks
A business angel with 12 years experience investing in start-ups. He learnt his investment skills in the
banking industry, where he specialised in risk management and corporate derivatives, most recently
at Citibank and BNP Paribas. He is passionate about building new businesses and is currently director
of several successful companies besides Aeristech, ranging from graduate recruitment to arts and
entertainment.
Observer: Duncan Kerr
FSA registered Investment Director co-managing Midven's "Early Advantage 8m Venture Capital
Fund". He has both investment and operational experience across a range of technology businesses.
After working as Finance and Compliance Officer at a stockbroker, he co-managed a 30m
technology portfolio for a FTSE 350 company moving on to managing two investee cable television
companies as CEO. Prior to joining Midven, he managed a composites business.xt

21
Commercial in Confidence

Appendix B Shareholder Breakdown

Shareholder
Bryn Richards
Clive Banks
Daniel Michael Woodroffe
Paul Newey
Early Advantage Partnership
Angels Nominees Ltd
Gerard J Blake
Gordon Bott Pension Scheme
Exceed Partnership LP
Mark Siggers
New Wave Ventures LLP
Timothy Bullock
Robert Edward John Bernays
Neil Anthony Morris
Anthony Marrett
MC Trustees Limited (Simon Hunt)
Louis Alain Franck-Steier
Rosemary Jean Franck Steier
Mandy Hutchison
James Rock
Rupert Geoffrey Ryland Thompson
Bob Austin
Gary Dixon & Linda Dixon
Elaine Lester
David Miles Smith
Stephen Cheetham
Graham Clifton
HB&O Retirement Benefit Scheme
David Blunn
Greg Dyson
Vanessa Naylor
Miss Radhika Chadha
Miss Priyanka Chadha
Christopher Paul Corbett
Emma Servant
Kevin David Higgs
Andy Tempest
Hugh Kemp
David Young
Stuart Lawrence
Richard Ashmore
Martin Palmer
Exceed Co-Investment Partnership LP
Nicholas Gill
Valerie Standing Gill

Shares
818,558
328,527
325,852
271,669
267,265
258,691
135,000
119,209
101,844
92,321
84,898
67,915
57,684
52,755
42,429
39,000
37,500
37,500
32,000
30,000
25,083
24,000
22,360
17,360
17,360
14,706
13,569
13,516
12,008
11,305
10,604
10,000
10,000
9,537
9,000
8,680
8,000
7,547
5,882
5,882
4,370
4,000
2,214
1,330
1,330
3,470,260

Percentage
23.59%
9.47%
9.39%
7.83%
7.70%
7.45%
3.89%
3.44%
2.93%
2.66%
2.59%
2.07%
1.66%
1.52%
1.22%
1.12%
1.08%
1.08%
0.92%
0.86%
0.72%
0.69%
0.64%
0.50%
0.50%
0.42%
0.39%
0.39%
0.35%
0.33%
0.31%
0.29%
0.29%
0.27%
0.26%
0.25%
0.23%
0.22%
0.17%
0.17%
0.13%
0.12%
0.06%
0.04%
0.04%
100.00%
22

Commercial in Confidence

Appendix C Technology Licensing Model

With the current market trends, the benefits and versatility of Aeristechs technology and the
demand from OEMs for advanced boosting solutions, Aeristech is in an excellent position to close a
licensing agreement within a 2 year period.
Several scenarios can be envisaged for such license agreement depending on the customer
requirements and market strategy.
A typical license agreement in the automotive industry will be based on:

A royalty fee per system manufactured and sold

The royalty fee can be based on a percentage of the Cost of Manufacture (CoM)
An upfront payment (around 10% of total License value) is usually paid at the time of
signature

Several variables will need to be discussed and agreed with potential licensees in order to fix the
boundaries of such license agreement. These variables will affect the structure and value of such
agreement(s):
Exclusivity
The application (electric supercharger, electric turbocharger, fuel cell compressor, )
The market (automotive)
The field of applications (passenger cars, Commercial Vehicles, Off-highway)
The Geography (Global or specific)
For the purpose of this document, we will describe and detail a typical and proven scenario based on
a worldwide, non-exclusive license agreement for electric supercharger products for ICE engines, for
use in passenger cars and commercial vehicles.
C.1 The Size of the Market
Typical engine production volumes
In order to realistically estimate the potential volumes of electric supercharger systems, here are
some examples of engines currently in production:

Ford 1.0L EcoBoost engine: Ford has planned for a global production capacity between
700,000 and 1.3 million of their 1.0-litre EcoBoost engines per year.

BMWs engine plant in Hams Hall (UK), producing both 1.6L and 2.0L petrol engines for the 1
series, 3 series, X1 and MINI has seen production volumes of 385,410 in 2012, and 408,060
units in 2013

Tier1 Supplier volume prediction

Tier-1 Company A agreed to share their initial volume predictions for a 48V electric supercharger,
shown below. These volumes are in line with typical engine production volumes and are used in the
license model below.
Volume/year

2016

2017

2018

2019

2020

2021

2022

2023

2026

2031

10,000

100,000

200,000

500,000

500,000

500,000

750,000

1,000,000

2,000,000

2,000,000

23
Commercial in Confidence

C.2.3 Cost of Manufacture

The predicted cost of manufacture (y-axis) of Aeristechs electric supercharger is estimated below as
a function of the volume produced per year (x-axis).

C.2.4 Royalty rate

Typical royalty rates in the automotive industry for technology licensing can range between 1% and
5% for more conventional devices and up to 10% for disruptive technologies. These royalty rates can
vary over time and as a function manufacturing volumes per annum. In the following model,
Aeristech has assumed a decreasing royalty rate with volume ramp-up ranging from 5% to 2%:
Volumes

Royalty Rates

100,000

5%

100,001

500,000

4%

500,001

1,000,000

3%

1,000,001

2%

C.2.5 15-yearLicense Model (2016-2031)

Based on a typical non-exclusive royalty bearing license model for the automotive industry and the
above assumptions, the following license model is generated:
2016

2017

2018

2019

2020

Volumes

10,000

100,000

200,000

500,000

500,000

1,000,000

2025

2,000,000

2030

2,000,000

2031

Unit Cost

225

181

169

155

155

145

135

135

Royalty
rate
Royalty
/unit
Total
Royalty

5.0%

5.0%

4.0%

4.0%

4.0%

3.0%

2.0%

2.0%

11

112,591

902,614

1,351,211

3,093,576

3,093,576

4,341,634

5,416,180

5,416,180

Total
17,560,000

60,516,531

Considering only one customer and one application (48V electric supercharger) the total Net Present
Value of such technology licensing is worth circa 42 million.

24
Commercial in Confidence

C.2.6 Projected Revenues

Assuming a first license agreement signed in 2015-16, 2 case scenarios are considered below:
Non-Exclusive case: This scenario considers a first non-exclusive license agreement in 201516 and subsequent further agreements with 2 additional customers within a 3-4 year period.
Exclusivity case: It is highly anticipated that a Tier-1 supplier may request exclusivity for this
technology (exact boundaries to be defined), which will attract a much higher license fee.
As shown below, both scenarios have similar potential returns longer term, although an exclusivity
case provides higher returns in the first few years. In the case of an exclusive agreement for
boosting in the automotive industry, the total Net Present Value of such exclusive agreement is
estimated to be worth circa 120 million.

25
Commercial in Confidence

Appendix D A-Sample Readiness Programme Plan

The plan is structured as an experimental development programme, where design variations are
built and tested to gather data and achieve an optimised pre-production design. As such,
procurement and testing activities are spread through a Development phase (WP1) which tails into a
Detailed Design phase (WP2). This approach de-risks the design by reducing the reliance on
simulation and design insight at the outset of the project. The project builds on extensive
performance design and test experience from Aeristechs proof of concept and demonstration
programmes, but design optimisation (for size, mass, efficiency, etc) is a new undertaking.
2014
Q3

Q2
Apr-14 May-14 Jun-14

Project management
b
WP1 Development
g
WP1.1 Performance Specs
b
WP1.2 Outline turbomachines
WP1.3 Concept design motors
WP1.4 Concept power electronic
WP1.5 Concept digital controller
WP1.6 Engine simulations
WP2 Detailed Design
WP2.1 Detailed Turbomachines
WP2.2 Detailed motor design
WP2.3 Detailed power electronic
WP2.4 Detailed digital controller
WP2.5 Detailed engine anciliaries
WP3 Procurement
WP3.1 Turbomachines
WP3.2 Mechanical parts
WP3.3 Power electronics parts
WP3.4 Digital controller
WP4 Assembly
WP4.1 Mechanical parts
WP4.2 Electrical parts
WP5 Testing
WP5.1 Development testing
WP5.2 Test and Tune A-sample
WP5.3 Dissemination

b
g
b

b
g
b

b
g
b

Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15

b
g

b
g

b
g

b
g

b
b
b
b
b

b
b
b
b
b

b
g

b
g

b
b
b
b
g
b

b
b
b
b
g
b

b
g
b

b
g
b

b
g
b

b
g

b
g

b
g
b
b

b
g
b
b

g
b

2015
Q1

Q4

g
b

g
b

g
b
b
b
b
b

g
b
b
b

b
g

b
g
b
b

b
b
g

g
b
g
b

b
g
b

g
b
b

g
b
b
b

g
b
b

g
b
b

g
b
b
b

g
b

g
b
b

g
b
b
g

g
b
g

Milestone: A-Sample

A further advantage of an experimental development programme structure is that it produces trial

units relatively early in the design cycle, giving Aeristech early commercial leverage in unlocking new
revenue streams in parallel with the technical A-sample development activity.
8.2 Programme Cost
The budget includes external costs of 190,000 broken down as:
Material costs: 98,000 for 6 compressor units and 4 control units (budget quantities)
Subcontract costs: 52,000 for design support in impeller optimisation, motor optimisation,
and simulation of electronic components
Capital expenditure: 40,000 for test equipment and instrumentation
Fully overheaded labour with project management is 539,580. This breaks down according to the
table below:

26
Commercial in Confidence

Task Months Eng Mgr Admin

Snr DesignDesigner Tech
WP1.1 Performance
2
Specifications
20%
60%
200%
WP1.2 Outline Tubomachines
2
Designs
20%
50%
WP1.3 Concept 2design 10%
motors
40%
100%
WP1.4 Concept 5d power10%
electronics
20%
100%
WP1.5 Concept 2d digital10%
controller
10%
100%
WP1.6 Engine simulations
3
20%
20%
50%
WP2.1 Detailed 3Turbomachines d
WP2.2 Detailed 2motor design
WP2.3 Detailed
1.5power electronics d
WP2.4 Detailed
1.5digital controller d
WP2.5 Detailed
1.5d engine anciliaries
6
WP3.1 Turbomachines
3
10%
WP3.2 Mechanical
4 parts
10%
WP3.3 Power electronics
3
parts
10%
WP3.4 Digital controller
2
10%
5.5
WP4.1 Mechanical
2 parts
10%
WP4.2 Electrical4 parts
10%
5.5
WP5.1 Development
3.5
testing
20%
WP5.2 Test and2Tune A-sample unit
WP5.3 Ongonig 0testing and dissemination

10%
20%
20%

40%
140%
140%
100%
50%
10%
20%
20%
20%

40%
40%
40%

10%

120%
200%

50%
100%

20%
20%

200%
350%

50%
50%

Internal Cost w Overhead

18,448
36,896
4,612
9,224
10,180
20,360
20,670
41,340
7,312
14,624
9,786
19,572
0
0
3,240
6,480
8,516
17,032
7,104
14,208
4,050
8,100
3,459
6,918
0
0
4,879
9,759
7,586
15,172
5,689
11,379
1,873
3,746
0
0
10,629
21,258
32,786
65,572
0
0
29,792
59,584
23,212
46,424
0
0

27
Commercial in Confidence

Appendix E Patents Filed and Applied for

Patent Description
Hybrid Turbocharger (EP07824564.4)
Mechanically decoupled turbocharger using a
variable frequency AC electric architecture to
transfer power between a turbine and a compressor
(with optional energy storage and/or crankshaft
motor/generator)
Motor Control Architecture (EP11740965.6)
High-speed motor/generators are difficult to
control, and this has been a barrier to entry for
electric superchargers / turbochargers. Aeristechs
new architecture achieve full control without overstressing IGBT/MOSFET components.
Turbine Speed Control (PCT/GB2014/050631)
Achieve better efficiency from a turbine by actively
controlling the load on the turbine shaft, instead of
allowing power to vary with speed squared, as in a
conventional turbine loaded by a turbocompressor.
Requires a controlled high-speed generator (as in
Aeristechs motor control patent).
Compressor Surge Prevention (GB1314270.8)
Using excess power available from a motor drive (as
in Aeristechs high-speed motor), vent excess air to
prevent compressor surge. Recirculate the air to
improve compressor efficiency.
Motor Control Architecture 2
Confidential

Territories
Filed
UK
EU
USA
Canada

UK
EU
USA
China
Japan
Korea
India
UK
other
countries
pending

Status
Granted in UK.
Granted in EU.
Report received from USA,
responded.
Report received from Canada,
responded
Granted in UK.
Report received from EU,
responded
Report received from USA,
responded.

Recently entered PTC

international process.

UK
other
countries
pending

Co-developed with Imperial.

Not yet ready for PTC process.

pending

To be filed

28
Commercial in Confidence

Appendix F Aeristechs Customers and Partners

Customer list without

project details published
with permission.

"We were pleased with the professional and flexible approach of the Aeristech team. The electric
supercharger performed well throughout the programme, enabling our supercharged range
extender engine to exceed our performance targets."
Simon Reader, Engineering Director, MAHLE Powertrain Limited
Quote provided for publication with permission from Simon Reader

29
Commercial in Confidence

The$content$of$this$pitch$by$Aeristech$Limited$(the$"Company")$and$the$documents,$comments$and$
information$contained$within$it$(together$the$"Pitch")$are$the$responsibility$of$the$Company$and$have$not$
been$approved$as$a$financial$promotion$by$Syndicate$Room$or$by$any$other$authorised$person$within$the$
meaning$of$the$Financial$Services$and$Markets$Acts$2000$(the$"Act"),$nor$have$they$been$communicated$by$
Syndicate$Room$Ltd$("Syndicate$Room")$The$Pitch$itself$is$not$regulated$and$has$been$prepared$and$is$
communicated$only$by$the$Company.$Investment$in$the$Company$may$expose$the$individual$concerned$to$a$
significant$risk$of$losing$all$of$the$money$or$other$assets$invested.$$
$
IMPORTANT$L$PLEASE$READ$CAREFULLY$$
The$Pitch$is$exempt$from$the$general$restriction$(in$section$21$of$the$Act)$on$the$communication$of$
invitations$or$inducements$to$engage$in$investment$activity$on$the$grounds$that$it$is$made$to$persons$who$
are$exempt$from$the$general$restriction,$by$virtue$of$Articles$43,$48$or$50A$of$the$Financial$Services$and$
Markets$Act$2000$(Financial$Promotion)$Order$2005,$or$who$are$otherwise$exempt.$$
Syndicate$Room$acts$solely$as$a$facilitator$of$the$Pitches$and$does$not$communicate$the$Pitches$or$any$
financial$promotions$to$Investors,$and$any$'financial$promotion'$inherent$in$a$Pitch$is$communicated$LL
exclusively$by$the$Company.$Syndicate$Room$is$not$responsible$for$the$content$of$the$Pitch.$$
Any$recipient$of$the$Pitch$who$does$not$qualify$under$the$terms$of$the$above$exemptions$must$not$view$the$
Pitch,$must$return$the$Pitch$documents$to$the$Company$immediately$and$should$not$read$or$act$upon$any$
of$the$information$contained$within$it.$The$Pitch$does$not$constitute$an$offer$of$or$an$invitation$to$
subscribe$for$securities$to$the$public$that$would$otherwise$be$required$to$comply$with$the$$
Prospectus$Regulations$2005.$No$public$offer$in$any$jurisdiction$is$being$made$by$the$Pitch.$The$Pitch$is$
primarily$intended$for$release$in$the$United$Kingdom$and$does$not$constitute$an$offer,$or$the$solicitation$of$
an$offer,$in$relation$to$shares$in$any$jurisdiction$in$which$such$offer$or$solicitation$is$unlawful.$$
$
CONFIDENTIALITY$$
The$Pitch$has$been$prepared$exclusively$by$the$Company.$It$is$being$provided$to$a$limited$number$of$
persons,$each$of$whom$is$considered$to$be$a$legitimate$recipient,$solely$as$a$guide$for$the$purpose$of$giving$
background$information$to$enable$recipients$to$assess$whether$they$wish$to$place$an$order$to$subscribe$for$
shares$in$the$Company.$The$information$and$opinions$contained$within$the$Pitch$are$strictly$confidential$
and$are$being$made$available$only$to$parties$who$agree$to$keep$them$confidential.$Neither$the$Pitch$nor$
any$part$of$it$may$be$copied,$published,$disclosed,$reproduced$or$distributed$to$any$person$at$any$time$
without$the$prior$written$consent$of$the$Company,$and$shall$not$be$used$for$any$purpose$other$than$in$
connection$with$the$proposed$investment$in$the$Company.$By$accepting$the$Pitch$you$are$deemed$to$
undertake$and$warrant$to$the$Company$that$you$will$keep$it$confidential.$You$agree$to$indemnify$the$
Company$against$any$losses$incurred$by$the$Company$as$a$result$of$any$unauthorised$disclosure,$and$to$
return$on$demand,$the$Pitch$and$any$related$documents$or$information$to$the$Company.$$
$
GENERAL$$
Although$the$Company$has$used$publicly$available$information$in$compiling$the$Pitch$and$has$used$
reasonable$efforts$to$check$the$accuracy$of$the$information$in$the$Pitch,$its$accuracy$cannot$be$guaranteed.$
The$Company$has$not$independently$verified$any$of$the$information,$links$to$other$sites$or$resources$
provided$within$the$Pitch$and$the$Pitch$does$not$purport$to$be$allLinclusive$or$necessarily$to$contain$all$the$
information$that$a$prospective$investor$may$desire$in$investigating$the$Company,$and$may$be$subject$to$
updating,$withdrawal,$revision$or$amendment.$No$representation$or$warranty,$express$or$implied,$is$or$will$

be$given$by$the$Company,$its$advisers$or$any$of$their$respective$directors,$shareholders,$partners$or$
employees$as$to$the$accuracy$or$completeness$of$the$Pitch$or$the$information$or$opinions$contained$
therein.$Any$financial$projections$given$are$illustrative$only$and$none$of$the$projections$or$assumptions$
should$be$taken$as$forecasts$or$promises$on$the$part$of$the$Company$nor$should$they$be$taken$as$implying$
any$indication,$assurance$or$guarantee$that$those$assumptions$are$correct$or$exhaustive.$The$Pitch$is$not$
intended$to$form$the$basis$of$any$investment$decision$and$all$liability$for$reliance$on$the$contents$hereof$is$
excluded.$Each$recipient$of$the$Pitch$must$make$its$own$independent$assessment$of$the$information$
provided$by$the$Company$and$is$advised$to$seek$independent$advice$on$the$contents$hereof$from$an$
authorised$person$specialising$in$advising$on$investments$of$the$kind$in$question.$Neither$the$Company,$
Syndicate$Room$nor$any$of$their$advisers,$nor$their$respective$directors,$partners,$representative,$agents,$
consultants$or$employees$shall$be$liable$for$any$direct,$indirect$or$consequential$loss$or$damage$suffered$by$
any$person$relying$on$statements$or$omissions$from$the$Pitch$and$to$the$maximum$extent$permitted$by$
law,$all$conditions,$warranties$and$other$terms$which$might$be$implied$by$statute,$common$law$or$the$law$
of$equity$and$any$such$liability$are$expressly$excluded.$The$Pitch$should$not$be$construed$as$a$
recommendation$to$prospective$investors$by$the$Company$or$Syndicate$Room$or$any$of$their$respective$
officers$to$invest$in$the$Company,$and$does$not$form$any$commitment$by$the$Company$to$proceed$with$an$
investment.$The$Company$reserves$the$right$to$terminate$the$procedure$at$any$time$and$to$terminate$any$
discussions$and$negotiations$with$any$prospective$investors$at$any$time$and$without$giving$any$reason.$$
Any$and$all$discussions,$negotiations$and$communications,$including$through$any$online$forums,$between$
any$recipient$of$the$Pitch$and$the$Company$and$their$respective$directors,$shareholders,$employees,$
advisers$and/or$representatives$will$remain$subject$to$contract$and$without$commitment$or$obligation$
unless$and$until$definitive$contracts$are$agreed,$executed$and$unconditionally$delivered.$Any$person$who$
invests$in$the$Company$at$any$time$must$comply$with$all$applicable$laws$and$regulations$in$force$in$any$
jurisdiction$in$which$they$acquire,$offer$or$sell$shares$and$must$obtain$any$consent,$approval$or$permission$
required$in$respect$of$any$such$transaction$under$the$laws$and$regulations$in$force$in$any$jurisdiction$to$
which$they$are$subject$or$in$which$any$such$transaction$takes$place$or$in$which$they$possess$the$Pitch.$
Neither$the$Company$nor$any$of$its$agents$shall$have$any$responsibility$for$any$such$matters.$$
The$distribution$of$the$Pitch$in$certain$jurisdictions$other$than$the$United$Kingdom$may$be$restricted$by$law$
and$therefore$persons$accessing$the$Pitch$into$whose$possession$the$Pitch$documents$come$should$inform$
themselves$about$and$observe$any$such$restrictions.$Any$failure$to$comply$with$these$restrictions$may$
constitute$a$violation$of$securities$laws$of$any$such$jurisdiction.$Recipients$represent$and$warrant$to$the$
Company$and$Syndicate$Room$that$they$are$able$to$receive$the$Pitch$without$contravention$of$applicable$
legal$or$regulatory$restrictions$in$the$jurisdiction$in$which$they$reside,$conduct$business$or$receive$the$Pitch,$
including$in$particular$the$requirements$of$the$Act.$$
$$
RISK$WARNING$$
Potential$investors$should$be$aware$of$the$risks$associated$with$an$investment$in$the$Company$especially$at$
an$early$stage$in$its$development.$Your$capital$is$at$risk$if$you$invest$in$this$investment.$Investments$in$
startup$and$earlyLstage$companies$are$high$risk;$do$not$invest$more$than$you$can$afford$to$lose.$Tax$
treatment$of$this$investment$depends$on$the$individual$circumstances$of$each$investor$and$may$be$subject$
to$change$in$the$future.$Past$performance$and$forecasts$are$not$reliable$indicators$of$future$results.$If$you$
are$unsure$about$any$aspect$of$the$information$provided$by$the$company,$you$should$seek$advice$from$an$
independent$financial$adviser.$
$