Business Plan

FeTu Limited

A unique initiative to reduce Carbon (CO2) emissions;

The new era of machine architecture to reduce energy consumption
and provide a step-change in global energy efficiency

+44 (0) 1422 753 130 www.fetu.co.uk info@fetu.co.uk

Table of Contents
I. Executive Summary...........................................................................................1
FeTu ............................................................................................. 1
Beachhead Market:..................................................................... 1
Commercial exploits: ................................................................. 2
Current Projects: ........................................................................ 2
External support ........................................................................ 2
The FeTu™ Roticulating™ concept ...................................... 2
Broader potential:....................................................................... 2
IP portfolio: ................................................................................ 2
IP valuation: ................................................................................ 3
Our solution ................................................................................ 3
Business strategy ........................................................................ 3
Demand: ...................................................................................... 3
II. Images .............................................................................................................. 4
Compressor test stand ............................................................... 4
Cenex LCV 2018 ........................................................................ 4
III. Description of Business ................................................................................... 5
Company Vision:........................................................................ 5
Vision Statement ........................................................................ 5
Operations................................................................................... 5
Founder: Jon(athan) Fenton..................................................... 6
Office Team ................................................................................ 6
Investment Team ....................................................................... 6
Board of Directors: .................................................................... 7
Business Development .............................................................. 7
External expertise ...................................................................... 7
IV. Marketing ......................................................................................................... 8
Market Analysis .......................................................................... 8
Competition ................................................................................ 8
Pricing .......................................................................................... 8
V. Finances ............................................................................................................ 9
Profit & Loss ............................................................................ 10
12-month forecast .................................................................... 10
2019-2021 objectives ............................................................... 10
VI. Shareholder Table............................................................................................ 11
As of February, 2019 ............................................................... 11
Executive Summary
FeTu is an award winning* northern region design and innovation SME incorporated May 2016. Created
to exploit the founder’s novel technology; a new ‘fluid energy motor’ which simply imparts energy into or
extracts energy from fluids (liquid or gas), a principle commonplace in power generation, propulsion and
fluids handling (pumps & compressors). FeTu’s ‘Roticualting’ system offers a simple system where one
common architecture can disrupt ‘compressor’ ‘energy generation’ and ‘refrigeration’ market segments.
With follow on potential in others; all supporting renewable energy and Green House Gas Emissions
reduction. The diminutive and simple device pertains to a step change efficiency advantage by adopting
the patented design. Since establishing office in March 2017, the team has continued to grow. The company
have demonstrated significant technical progress and good business prowess, having raised £1.5m up to
Dec 2018 (35% Investment, 65% Grant Award) and a wide range of interest and followers.

*Business Green ‘breakthrough’ finalist & runner up Dec 2018,

*Insider Magazine ’50 most exciting companies to watch in 2019’

Beachhead Market: (Independently validated by E4Tech), FeTu identified the US$30bn ‘compressor’
market as having the best potential for market entry, the technology is now mid stage in the product
realisation cycle, pursuant of a licencing model, before exploiting (the same core technology) in other
market segments. Throughout the industry ‘compressors’ have seen extensive development spend of late,
especially in pursuit of cost-effective ‘oil-free’ air, where FeTu have identified a technology gap and already
proved the design to Technology Readiness Level five (TRL5). These tests also validate capability in
vacuum and closed loop energy cycles (a heat engine). The FeTu principle has many other target markets
(applications), all being of significant value, and all in energy-intensive sectors subject to environmental and
governmental pressures to effect improvement in energy efficiency and Carbon (CO2) emissions reduction.

FETUBUSINESS PLAN - DECEMBER 2018 1

Commercial exploits: FeTu exhibited at air-tech 2018 and have already secured an early interest from
a leading compressor manufacturer. FeTu are partnering an automotive tier 1 company in a £250k IDP14
project (Q4 2018 to Q3 2019), their objective being to licence the technology following project success.

Current Projects: A twelve-month ‘open-call’ grant award in collaboration with the University of Bath
completed August 2018 (£430k full commercial value), currently under report. Oil-free test highlights were
7.2:1 PR recorded @ 1,000 rpm and indicated efficiency in excess of 75%. FeTu have received praise on
their technical progress and management, plus excellent feedback from IUK. Tests have demonstrated a
clear capability for the device operating as a gas compressor - a large industrial sector under pressure to
improve its energy profile and environmental impact. The current technology level (TRL) is 5.

On test, whilst not optimised for such a function; the device’s capability to perform as a vacuum pump was
also demonstrated, generating a ‘deadhead’ 45kPa at speeds as low as 50 rpm by simply reversing the
machine, our research leads us to believe that such levels to be impossible with current technology.

In January 2019 FeTu secured a £450k grant award from the UK Department of Business Energy &
Industrial Strategy (BEIS), to continue the compressor development from TRL5 to TRL7, delivering an
Alpha product of market / licence readiness.

External support for the technology is abundant, already stimulating governmental interest and a wide
range of development offers from fifteen leading academic institutes which include Brunel, City (London),
Brighton, Bath, Birmingham, Glasgow, and Sheffield Universities. The Advanced Propulsion Centre (The
APC) based @ Warwick Uni has provided £100k of support through their Technology Development &
Acceleration Program (TDAP), a competitive gateway scheme which saw FeTu succeed and progress
through all rounds against stiff competition (only the fittest survive this stringently monitored program).
Adding credibility, this program has also helped focus business rationale & direction, supported by E4tech.

The FeTu™ Roticulating™ concept seamlessly converts energy between volumetric and
rotational sources, in an inordinately simple manner. This ‘disruptive’ invention affords a light, efficient
system of only two moving parts. Perceived as the world’s first ‘quad-acting’ device - a 4-chamber system
with a single compression entity and one set of mechanical constraints, with inherent ‘downsizing’, ‘down-
weighting’ and ‘down-speeding’ capability. Future development as a heat engine would be ideally suited to
electrical vehicle range extension, or as a primary drive, scalable to even the largest of applications (HDV,
Marine, Rail & aviation).

Broader potential: This concept is many things to many industries, offering a displacement technology
with increased efficiency, reducing energy usage and thereby reduce fuel consumption and resultant
reduction in GHG emissions, particularly Carbon Dioxide and Nitrogen Oxides. It is low cost (financially
and environmentally), simple to manufacture, offers accurate positive displacement, high turndown ratios,
high pressure and high volume in a single compact unit. The design also ideally lends itself to self-priming
pump or thermal/hydro turbine applications. FeTu’s range of applications and its innate characteristics
could potentially transcend the energy landscape and forever change how we create and use energy.

IP portfolio: Secured with £1m IP insurance; granted UK patent and patent applications registered in
the top 20 global manufacturing economies, independent FTO report conducted & available. New

FETUBUSINESS PLAN - DECEMBER 2018 2

applications for additional IP ‘layers’ have also been registered. Granted territories include UK, Europe,
Canada, Hong Kong & Japan

IP valuation: In December 2018 an independent IP valuation was conducted by Inngot (available upon
request). The IP was valued at £6m - £8m (in one market segment).

Our solution is a cost-effective, power-dense, scalable and resilient unit. It is up to 90% smaller and
lighter than matched technology and proving more efficient than the current state of the art.

Business strategy is to prove the technology to a point beyond doubt for the compressor concept (most
accessible route to market) and derive revenue from right-to-use licensing and royalties, the compressor
test result also feeds validation across a broader range of applications. There is no ambition to manufacture
(other than what might be required, on a small scale, to initially break into a given market) and envisage
having a small, professional, administration team running the business once the concept is established; to
refine, protect, enforce rights to their utmost commercial potential.

Demand: The future of the planet relies on finding fully sustainable Carbon (CO2) neutral energy and
there is a pressing need for technology to achieve this goal. As market demand begins to reflect this, the
onus is on low carbon, high-efficiency devices that can improve the way in which people use and create
energy. FeTu is one of those ‘disruptive’ concepts, but unlike others, its benefits have the potential to span
multiple (seemingly most) energy related market segments.

FETUBUSINESS PLAN - DECEMBER 2018 3

Images

Compressor test stand

Designed and manufactured by FeTu, lab tested at the University of Bath

Cenex LCV 2018

FeTu were invited & formed part of the UK Government Pavilion on Innovation

FETUBUSINESS PLAN - DECEMBER 2018 4

Description of Business
Company Vision:
Business to business trading through indirect sales; licensing the concept to Original Equipment
Manufacturers (OEM’s) for inclusion within their product range. The purchase of a right to use license will
secure the right to manufacture and further refine the product for bespoke needs; unit specific royalties
being an intrinsic part of any licence. The compressor application is envisaged as the most accessible route
to market; early revenue being reinvested to develop the concept in other market segments. FeTu recognise
that rapid market access may dictate the need for small volume manufacture initially.

Vision Statement

“FeTu offer a new architecture for energy machines which is simple, compact, light-weight and
efficient; exhibiting ideal characteristics to influence a step change in GHG emission reduction”.

FeTu remain grounded and realistic due to the enormity of the concept’s potential across a remarkable
range of highly competitive and lucrative markets. Development partnerships are the optimal way to achieve
multi-sector market penetration - testing with an end user to forego dissemination.

Operations
FeTu’s centre of activities is a modest, secure, private and well-appointed office in the North of England,
central to and within 2 minutes of the Leeds/Manchester M62 corridor.

Staffing is currently at four employees. More roles (characterised by sub-contact spend) are planned to be
brought in-house over the coming months, increasing to six persons through 2019; nine a year later will
allow all core skills to be retained in-house following some commercial success.

FETUBUSINESS PLAN - DECEMBER 2018 5

Founder: Jon(athan) Fenton
Jon is the primary driver, inventor and CEO of FeTu Ltd. Jon is a deep and reflective thinker and brings
an optimal balance of technical and commercial skills from thirty-five
years’ managing upwards in operations, project management, sales
and product design / development / realisation. Jon has delivered
successful multi-million-pound projects globally and renown as a
technical, operational and commercial ‘trouble shooter’. More
recently his career took a more production bias and his ability to
interrogate & integrate is second to none. Jon’s studies engineering
but claims his best degree is in ‘common sense’, a leader by example,
with the essential exploitation skills to deliver the concept to market
whilst maximising the commercial and financial opportunity.

Office Team
FeTu has a multi-disciplinary team with the skills and experience to guide the business and manage the
projects that will take the FeTu concept to market.

Kirsty Hinchliffe (Projects & Grants Manager): drawing on her direct and extensive experience of
(technical) document formulation and management, contract review, project management, and auditing
within the manufacturing/engineering sector. Kirsty has a Masters (MSc) in Project Management to
supplement her non-business degree and internal auditing manager qualification. She is also a certified
PRINCE2 practitioner. Her primary responsibilities lie in the identification and managing of all the funding
applications, bid writing and project management.

Anastasis Constanti (Design Engineer): A graduate engineer in Mechanical Engineering (MSc & BEng).
With a keen eye for detail and perfectionist mindset, Anastasis covers the broad range of the design
challenges and offers a crossover skillset between the real and analytic world. Through contribution and
endeavour, engineering projects will provide a green environment for the society along with prosperity of
the economy.

Eve Mortimer (Office Manager): an experienced executive administrator currently studying for an ACCA
accounting qualification, Eve provides PA support to the MD, maintains financial records/accounting, HR
and documentation organisation.

Joseph Subert (Project Engineer): A graduate engineer in Mechanical Engineering (MEng & BEng),
experienced in CFD and FEA, Joe’s responsibilities lie in the design, specification and compliance of
project objectives.

Investment Team
28 investors consist of three high net worth individuals, nine highly experienced business operators, a legal
executive, nine engineers, a skilled business developer and a small group of friends and family.

FETUBUSINESS PLAN - DECEMBER 2018 6

Board of Directors:
Currently one registered director, supported by a ‘virtual board’ of investors which has delivered highly
cost-effective results to date (zero cost). A formal board of directors is to be formed; Chair and three
Directors covering Operations, Finance, Business Development & Commercial responsibilities.

Business Development
General business development has been provisioned from within the team via our shareholder Mark
Matchett.

Compressor Specific business development has been supported by:-

Prof Ian Arbon CEng, CEnv, Ian has worked in the global gas compressor manufacturing industry for
over 50 years and in renewable energy applications for over 40 years; he is a Fellow of IMechE, ASME, EI,
IoR & IESIS and also holds an MBA degree in addition to his technical qualifications; he is the author of
two textbooks on gas compression technology. Ian worked as a design/applications/project engineer with
major compressor manufacturers in the UK, the Netherlands, Germany, the USA and Canada before
becoming, successively, Managing Director of Howden Compressors Ltd, Caledonian Compressors Ltd
and Peter Brotherhood Ltd., in each of which he was responsible for ground-breaking development and
innovation in gas compression technology, particularly in renewable/sustainable energy applications; he
also returned all three businesses to significant profitability. His consultancy business, Engineered Solutions,
has worked with numerous SMEs, in the UK and overseas, particularly in helping to bring innovative
concepts to commercialisation. He has been a Visiting Professor in Alternative Energy at Newcastle
University (where he still teaches) and is currently an Honorary Professor in Sustainable Energy at the
University of Glasgow.

Tony Kitchener. 40 years as compressor designer, manufacturer, inventor & company director. Sold &/or
licensed IP to major compressor makers in Denmark, Germany, Korea, USA, Australia, Belgium, China &
Japan.

External expertise
The commercial knowledge and experience of team FeTu has assembled an impressive group of external
professionals who have and will continue to contribute to the concept’s ongoing evaluation and
development.

University of Bath
As collaborative partners on our Innovate UK funded Roticulating Compressor Feasibility study, Dr Colin
Copeland and Professor Jamie Turner bring a wealth of knowledge, and commercial acumen, to our initial
‘proof of concept’ project.

AVID Technology
In September 2018 FeTu’s next Innovate UK supported study will commence in collaboration with rising
stars of the automotive industry AVID Technology. This project will develop the pump variant of the FeTu
device for us within AVID’s electric vehicle powertrain. A successful outcome could see a licensing deal
with AVID as early as September 2019.

FETUBUSINESS PLAN - DECEMBER 2018 7

Marketing
Market Analysis
Legislation and regulation will dictate the market and its dynamics with the onus placed on low carbon
technology. The world understands the needs to reduce Carbon and Nitrogen emissions, and this is what
will drive ‘clean-tech’ to the forefront of the market. Industry is desperate to improve efficiency, reduce
costs, size, weight, noise, reduce energy need (fuel) and recover waste energy (common FeTu USP’s).

Critical markets that are predicted to be high growth in the next five years and are foreseen to be less of a
challenge to break into include; the air compressor market, water treatment and wastewater, heat pumps
and heat recovery/reuse. Projections place the oil-free compressor market at $15 billion by 2025 as
regulation, health and safety and growth of overseas manufacturing plants drive requirement. Oil-free
vacuum pumps are known as an output from current tests, and similar market predictions exist for the
pump application, even small markets can be worth millions annually for niche products.

With interest already shown by all the major compressor OEMs, FeTu is well placed to develop that interest
into commercial success at an early stage of our company development (first three years).

Other verticals: The automotive market is potentially the most lucrative but also the most difficult to break
into, instead, specific markets such as Heavy-Duty Vehicle (HDV’s), marine propulsion and defence may
be prioritised. Given our applicability across many sectors, we intend to target markets that offer the least
resistance. It is these specific markets that we can have the most significant impact in and disrupt incumbent
technology.

FeTu’s potential as a closed loop thermal power generation system (converting abundant waste and
renewable heat into electricity) is an exciting and new market opportunity against existing systems which
cannot provision over 10% system efficiency. Such is likely to the most profound environmental impact
but is difficult to value given the absence of adequate technology in the sector.

Competition
To date, there has never been a viable contender with few enough disadvantages to displace today's ‘evolved’
engine, turbine, pump or compressor designs based on refinements to a two- century old concept. There
will be resistance from those heavily invested in current technology, but regulation is forcing their hand. It
is the innate characteristics that FeTu possesses across all applications that make it a superior product
compared to current technology, and it is these advantages that give FeTu a vast and incomparable
competitive edge. We are not aware of any viable or proven concept to match or exceed our performance
expectations.

Pricing
The purchase price of an RTU license and royalty plan would be on a case by case basis. The unit price of
the technology compares favourably with other technology currently in the marketplace.

FETUBUSINESS PLAN - DECEMBER 2018 8

Finances
Main Expenditure since inception.

• £220,000 - Design Consultancy (CFD, FEA, Tribology, Materials)

• £175,000 - IP Spend, Professional, Admin, Translation & Filing fees
• £160,000 - Materials / Prototyping
• £148,000 - Payroll
• £145,000 - Academic Research
• £50,000 - Legal services & IP insurance
• £36,000 - Business Development Services
• £35,000 - Events, sundries, travel, and accommodation
• £30,000 - Accountancy fees
• £25,000 - Office set-up
• £25,000 - other overhead

Spend Profile

Office Set-Up Buss. Dev

2% 4%
Other
Events Accounts 2%
3% 3%

Legal & Ins Design

5% Consultancy
21%

Academic
14% IP
17%
Payroll
14% Materials
15%

FETUBUSINESS PLAN - DECEMBER 2018 9

Profit & Loss
FeTu are currently pre-revenue, two audited accounting periods are available (provisioned upon request).

Test results show good commercial credibility (TRL5), exploitation has begun in parallel whilst developing
to TRL7. Good expressions of interest are already in place & communication routes exist with OEM’s
provisioning 90% of the current market, targeting a licensing arrangement within 12-24 months.

12-month forecast
Budget and cash flow forecast are reviewed weekly and are selectively available on request.

2019-2021 objectives
1. Completion of national IP phase & securing grant status in all applied territories

2. Revenue in at least one vertical, primarily Compressor & possibly pump through the IDP14 project.

3. Proof of the FeTu technology in Energy Harvesting & Refrigeration (closed loop cycle)

4. Commencement of FeTu technology as a lightweight range extender (open loop external combustion)

5. Exec & Office team development, premises expansion (9-12 FTE persons)

6. Exponential growth is expected to start 2025, a point at which a feeding frenzy for the technology with
spread across multiple sectors

Financial Summary
Millions

£14.0 Grant & Equity

£12.0 Revenue

Expense
£10.0
Retained
£8.0

£6.0

£4.0

£2.0

£-
2019 2020 2021 2022 2023 2024

FETUBUSINESS PLAN - DECEMBER 2018 10

Shareholder Table

Shareholder No. Share

Jonathan Paul Fenton 9179 79.62%
Fe2i (7 members F&F) 700 6.07%
Mike Hughes 530 4.60%
Andrew Pearson 226 1.96%
Phil Wilkinson 170 1.47%
Antony Langley 110 0.95%
Lee Dawson 88 0.76%
June Wilkinson 60 0.52%
Max Nicholson 60 0.52%
Ray Wilkinson 60 0.52%
Vernon Robinson 44 0.38%
Marc Cochrane 30 0.26%
Trevor Davis 27 0.23%
Danny Hilton 22 0.19%
John Webster 22 0.19%
Martin Berry 22 0.19%
Martin Bottom 22 0.19%
Norman O'Reilly 22 0.19%
Paul Stevens 22 0.19%
Peter Crabtree 22 0.19%
Robert Ledwold 22 0.19%
Steve Savage 22 0.19%
John Allan 18 0.16%
Matt Barrick 18 0.16%
Mark Matchett 10 0.09%
Kelly Ann Williams 1 0.01%
Total 11529 100.00%

As of February, 2019

FETUBUSINESS PLAN - DECEMBER 2018 11