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CAP-XX will continue its dual strategy of licensing its technology and sales of its own manufactured products. As well as Murata, it has signed non-exclusive licences with AVX, TDK and Cornell-Dubilier Electronics and multiple other discussions are at an advanced stage. The acquisition of the manufacturing capacity and product designs should help with the IP licensing as CAP-XX will be able to demonstrate a broader product set and greater commercial traction.

From Allenby Capital Research Note on CAP-XX

Murata’s manufacturing assets to be acquired by CAP-XX cover all aspects of the process from coating to final device testing. It has a current maximum capacity of over 6.7m units per annum. Using an indicative selling price of A$3.40 per unit, this equates to about A$22.8m per annum of potential revenue. With a target gross margin of 60%, this suggests a potential gross profit of c. A$14m per annum.

From Allenby Capital Research Note on CAP-XX

CAP-XX should also be eligible for increased R&D rebates as a result of the acquisition (c. A$2.0m p.a.), as well as a one-off incentive (c. A$2.2m) and we would expect some lease incentives from the company’s new landlord (c. A$0.3m).

From Allenby Capital Research Note on CAP-XX

It should be noted that Murata will assist CAP-XX with the transport and recommissioning of the lines in Sydney and both Murata and CAP-XX have previously successfully relocated manufacturing lines overseas.

From Allenby Capital Research Note on CAP-XX

To date, CAP- XX’s direct sales have been limited by its high factory production costs compared with Murata. The proposed transaction will put CAP-XX in a much better position to fulfil that demand. It provides CAP-XX with proven manufacturing capacity; a significantly lower cost of production; established products; and access to established customers and Murata’s sales pipeline. This should result in a step change in the company’s revenue and hasten its move to profit and cash generation.

From Allenby Capital Research Note on CAP-XX

The proposed acquisition of certain supercapacitor manufacturing assets, associated spares, product designs and IP from Murata Manufacturing Co Ltd of Japan should substantially increase CAP-XX’s profitability and manufacturing capacity.

From Allenby Capital Research Note on CAP-XX

The proposed decommissioning, relocation and recommissioning is scheduled to be completed during FY20 with CAP-XX’s first shipments from the new line starting in Q1 FY21.

In the run up to decommissioning, Murata is building stock to ensure supply continuity to existing customers.

From Allenby Capital Research Note on CAP-XX

As Murata has focused on higher levels of automation and fewer products, it enjoys longer product runs and this benefits gross margins and minimises downtime. CAP-XX’s new 3V chemistry can be used in the Murata’s manufacturing lines. CAP-XX will have three product tiers post the transaction.

From Allenby Capital Research Note on CAP-XX

This is the research note to read in full a number of times if you want to know more about CAP-XX's Manufacturing.

http://www.allenbycapital.com/research_886_3866217389.pdf

http://www.allenbycapital.com/research_886_3866217389.pdf

Worth reading in full a number of times.

For me, CAP-XX manufacturing their own products is a winner and particularly at such a low cost outlay, it's brilliant.

Personally, I'd like to see CAP-XX putting all future profits into expanding manufacturing even further. I believe this is where the revenue will grow for a company like CAP-XX.

When revenue increases then the share price increases too. In my opinion the future is bright for CAP-XX.

http://www.allenbycapital.com/research_886_3866217389.pdf

I need to read this through a number of times before it goes in.

I think it'll be too late to buy Dungiven123 when the equipment is up and running, when a contract is announced or when a court case is settled. This is the time to buy now when the share price is 3p.

Some share prices may have gone up with fundraising however they usually settle back to the fundraising price. A fundraising price determines a share price.

Chief Executives of all companies promise jam tomorrow. That's what they do. It's important to learn to read between the lines.

The Chief Executive of CAP-XX already owns something like 3.2% of CAP-XX plus his salary is hardly huge.

For me, the best Chief Executives are always the people who founded the Companies. It's often when founders hand over the reins to to others that the companies hit big problems. Founders want more than anything to see their companies be successful and they work very hard to achieve this. Founders are heavily invested in their companies financially and emotionally.

It sounds to me like you're allowing the past along with buying some of your shares at 15p to cloud your judgment. For me, it's important to have faith in a company you've invested in otherwise your glass will always be half empty towards it.

Murata are helping with the decommissioning, relocation and recommissioning of the equipment at Lane Cove, Sydney. Murata are training CAP-XX employees to use the equipment. Murata are introducing CAP-XX to its customers who buy the CAP-XX products from Murata. Murata want CAP-XX to succeed.

World-leading biometrics company, Fingerprint Cards AB and Valid, a global payment technology provider, are collaborating to bring contactless biometric payment cards to the market. The card, recently demonstrated at Money 2020 USA, features Fingerprints' T-Shape module which is part of the 1300-series. It has ultra-low power consumption and is tailored to be integrated in smartcards using standard processes.

I think this is a brilliant move for CAP-XX.

Licences and royalties were never going to make this a hugely profitable company. Maybe something like £2 million for a licence and about 5% royalties were never gong to make them huge profits. There's not enough Companies out there selling supercapacitors for CAP-XX to make a huge profit out of licences and royalties. With say 5% royalties the Companies have to sell a lot of CAP-XX products for CAP-XX to make a huge profit. Companies will put their efforts into where they make the most money for their own Company and not for another Company.

It's a no-brainer moving into manufacturing and selling your own products. This way you get all the profits and you're not handing over 95% of the profit to another company who is only paying you 5% royalties. CAP-XX are in control of everything and are not reliant on other companies to manufacture and sell their products. CAP-XX can focus on manufacturing and selling their own great products. Best place to be for CAP-XX. Any profits made from manufacturing can be used to expand their manufacturing further to make even more profit.

Furthermore, CAP-XX in manufacturing may well be able to up the licence price and royalties to to other companies who want to sell CAP-XX products. The profit margin is about 60% to CAP-XX for manufacturing their own products. That's a great profit margin. And the manufacturing is being done by CAP-XX next door to its headquarters in Cove Lane, Sydney. This means CAP-XX can make sure everything is going well.

I can see why CAP-XX started first with licences and royalties. They had to start somewhere and this was an obvious place for a small company like CAP-XX to do this. It was also a great learning place, a great stepping stone to get into your own manufacturing. This is where more money will be made, i.e. manufacturing and selling your own great products as well as still doing licences and royalties with other companies.. Now they can do everything, manufacturing and agree licences and royalties maybe even at much higher prices with other companies.

CAP-XX are ahead of the pack with their patents hence why they have to issue patent infringement complaint letters and then where there is no alternative take them to court.

CAP-XX have taken on Marco Ranalli because Murata's biggest market for supercapacitors was Europe. 60% sold to Europe. 30% to America. 10% to Asia.

CAP-XX are taking on sales people for Europe because this was Murata's biggest market for CAP-XX products.

CAP-XX are getting $100 million of manufacturing equipment for nearly bu**er all.

I think it's an excellent move. It's a no brainer for me.

The fact they've already raised £2.75 million from institutions shows the institutions like it too.

CAP-XX aren't allowed to release this information until it's agreed with all the parties involved and then they must release this information in a RNS. These are th

It amazes me that people don't understand how share prices work and yet they invest in shares.

When there's a placing/fundraising then the share price will go down to the placing/fundraising price. The share price will stay at the placing/fundraising price until the placing/fundraising has been completed.

Warren Buffet wisely said “The stock market is a device for transferring money from the impatient to the patient”.

Allenby Capital's estimated revenue for final year 2022 is more than 5 times the revenue for final year 2019.

So if the expected revenue for final year 2022 is 5 times more than than the revenue from final year 2019 then the expected share price is at least 5 times more than the share price is now. This would work out at about 15p and could be possibly much higher because CAP-XX will be in profit by then. It's getting into profit that will be the big changer for CAP-XX's share price.

Final year 2022 for CAP-XX is 30 June 2022.

The DMT is a high-power, ultra long life, high temperature supercapacitor that is ideally suited for extreme applications such as solid state drives and automotive applications. Because of its thinness it can be assembled onto printed circuit boards similar to the majority of electronic components. This provides considerable scalability.

The DMF is a general purpose, very high power, long life supercapacitor that has a very low ESR and a wide operating range. It is suitable for high-brightness LED flash, high-power audio, smart meters etc. Its thinness means it can also be assembled onto printed circuit boards similar to the majority of electronic components and this provides considerable scalability.

The DMH is a ultra-thin supercapacitor with a wide operating temperature range. At only 0.4mm thick it is targeted at smart phones, smart credit cards, wearable devices, 3V coin cell battery applications and other IoT applications where thickness is critical.

The acquisition potentially expands CAP-XX’s sales and customer base in its target markets for small form factor supercapacitors (automotive, smart meters, IoT and solid state drives) as CAP-XX expects to retain the majority of Murata’s existing customers. Murata is already introducing CAP-XX to its existing customers. This includes a number of customers that are scheduled to go into volume production with Murata components that use CAP-XX’s IP.

CAP-XX will be a much larger supercapacitor manufacturer with reach into multiple markets with a broader product offering. As such, it will have a higher profile and is more likely to have the necessary product for a potential licensee.

From Allenby Capital Research Note On CAP-XX

CAP-XX’s new 3V chemistry can be used in the Murata’s manufacturing lines. CAP-XX will have three product tiers post the transaction.

The proposed decommissioning, relocation and recommissioning is scheduled to be completed during FY20 with CAP-XX’s first shipments from the new line starting in Q1 FY21. In the run up to decommissioning, Murata is building stock to ensure supply continuity to existing customers.

The estimated revenue for final year 2022 is more than 5 times the revenue for final year 2019.

The proposed acquisition of certain supercapacitor manufacturing assets, associated spares, product designs and IP from Murata Manufacturing Co Ltd of Japan should substantially increase CAP-XX’s profitability and manufacturing capacity.

Murata is already generating more than A$13m in sales and a number of its customers are keen for CAP-XX to recommission production and commence sales as quickly as possible. As reported in itsFY19 results, CAP-XX is receiving strong levels of interest in its expanded range of supercapacitors across a number of small form factor verticals (automotive, IoT and smart meters) and has been exploring how to expand its capacity for some time. To date, CAP- XX’s direct sales have been limited by its high factory production costs compared with Murata. The proposed transaction will put CAP-XX in a much better position to fulfil that demand. It provides CAP-XX with proven manufacturing capacity; a significantly lower cost of production; established products; and access to established customers and Murata’s sales pipeline. This should result in a step change in the company’s revenue and hasten its move to profit and cash generation.

CAP-XX should also be eligible for increased R&D rebates as a result of the acquisition (c. A$2.0m p.a.), as well as a one-off incentive (c. A$2.2m) and we would expect some lease incentives from the company’s new landlord (c. A$0.3m). The additional funds (A$1.9m/£1.0m) will be used for general working capital and the increased operating cost base required for the expanded manufacturing operations.

Murata’s manufacturing assets to be acquired cover all aspects of the process from coating to final device testing. It has a current maximum capacity of over 6.7m units per annum. Using an indicative selling price of A$3.40 per unit, this equates to about A$22.8m per annum of potential revenue. With a target gross margin of 60%, this suggests a potential gross profit of c. A$14m per annum.

Importantly the 2.75V and 3V chemistries that CAP-XX has developed for its new range of products, that are designed to be used with 3V coin batteries, will be improved when made on the Murata manufacturing lines.

From Allenby Capital Research Note On CAP-XX