Cap-xx Regulatory News (CPX)

1st October 2013

CAP-XX Limited

(the "Company")

Audited Results for the year ended 30 June 2013

CAP-XX Limited, a world leader in the design and manufacture of thin, flat supercapacitors and energy management systems, is pleased to announce its audited results for the year ended 30 June 2013.

Key highlights

· Sales revenue of AUD$3.6 million (2012: AUD$3.5 million) reflected a 3% year on year increase, generated from CAP-XX's traditional markets of handheld and portable devices. This improvement was due to a 6% year on year volume increase, whilst the average selling price reduced by 3%;

· Product Gross Margin (GM) increased to 30.2% (2012: 21.4%) due to improvements in manufacturing yields;

· The reduced operating loss of AUD$2.3 million (2012: AUD$2.9 million) reflects the increased GM and reduction in operating expenditure;

· Cash reserves at the end of June were AUD$1.1 million. Post the year end the Company successfully completed a £1.6 million share placement. A R&D tax rebate from the Australian Tax Office of AUD$1.0 million (2012: AUD$1.1 million) is forecast to be received in December 2013;

· Interest in the CAP-XX technology for automotive and the surface mountable markets continues to increase; and

· The operational cost reduction program remains on track with the new plant being commissioned and cheaper raw materials deployed. The full benefit of the savings is expected to be realised before the end of the current financial year.

Anthony Kongats, CEO of CAP-XX said:

"The past year has seen us move into mass production for our first volume automotive application of our traditional supercapacitor, while Murata has launched its second generation product range based our technology license. Since the commissioning of our prototype production line earlier in the year we have achieved initial sales to automotive manufacturers and their Tier-1 component suppliers of our large automotive supercapacitor. Our manufacturing cost reduction plan is on target to reach its 30% target and is already producing additional sales for our own manufactured product."

For further information contact:

More information is available at www.cap-xx.com

Notes to Editors:

CAP-XX (LSE: CPX) is a world leader in the design and manufacture of thin, flat supercapacitors and energy management systems used in portable and small-scale electronic devices, and to an increasing extent, in larger applications such as automotive and renewable energy. The unique feature of CAP-XX supercapacitors is their very high power density and high energy storage capacity in a space-efficient prismatic package. These attributes are essential in power-hungry consumer and industrial electronics, and deliver similar benefits in automotive and other transportation applications.

Chairman's statement

Interest in supercapacitor technology continues to increase on a worldwide basis, especially in the areas of automotive markets for larger cells and new emerging markets for the traditional CAP-XX products. The Company has made gains in the areas of product development, market awareness and overall operating performance.

Sales revenue for the 12 months to 30 June 2013, increased by AUD$0.1 million to AUD$3.6 million compared to AUD$3.5 million in 2012. This 3% increase is due to a year on year volume increase of 6% despite the average selling price reducing by 3%, over the same period due to a competition in the market place. The focus on operational cost improvement through improved utilisation and increased yields is beginning to pay dividends with the gross margin increasing to 30.2% (2012: 21.4%). The reduction in total research and development expenditure was due to the reduction in other income. The other income in FY12 was comprised of government grants which required a one-off increase in CAP-XX R&D expenditure to support the receipt of the grant. The majority of this work was completed prior to July 2012. The operating result for the twelve months to 30 June 2013 was a loss of AUD$2.3 million (2012: loss of AUD$2.9 million) with cost control being the primary contributor to the improved result. The Company anticipates to be the recipient of a R&D tax incentive from the Australian Taxation Office with AUD$1.0 million (2012: AUD$1.1 million) expected to be received before the end of the current calendar year.

Since the launch of the sample quantity production line for the supercapacitor module for use in automotive applications, we have shipped product to automotive manufacturers and their tier-1 component suppliers for customer evaluation. This has lead to enquiries including Non Disclosure Agreements (NDA's) being in place with world-wide tier 1 suppliers and automotive OEM's. Whilst initially developed for the Start-Stop applications, the module is gaining an interest and appeal in other automotive applications including road service repair. Further refinement and development of the module continues including the utilisation of new raw materials which is enhancing the performance of the module. The modest investment in plant and machinery located at Lane Cove has assisted with the timely delivery of sample modules and demonstrates the Company's capability of being able to produce the product at a relatively low cost of manufacturing. The Company remains confident, with the ongoing interest in the automotive module, that a licensing arrangement will be completed before the end of the current financial year.

As highlighted above, sales volumes were up 6% over the prior year with the majority of the sales still being generated by the Company's strong presence in the hand-held devices, point of sale systems and location tracking equipment. Orders continue to run at 3 months of sales which is consistent with historical averages. Sampling and testing from potential new customers is on the increase with interest from the medical, e-book reader, solid state drive, building and access control, consumer products and energy harvesting being the major markets. The sales start to the new financial year has been promising with the 1st quarter sales forecast to be above the Company's internal budget and above the prior year. The Average Sales Price is being held steady despite continuing competitive pressure from both end customers and competitors and the Directors expect it to remain relatively flat over the next 12 months.

Murata's sales volumes and associated royalties generated from the supercapacitor business remains disappointing at AUD$50k in the financial year. (2012: AUD$47k). We understand through feedback from the distributors and end customers that Murata's presence in the markets is increasing. Murata has also informed the Company that it has been successful in securing design wins. It is also pleasing to note, that Murata continues to improve the product offering and last month released its latest new supercapacitors which are targeted at the solid state drive and communication system backup, power assistance for smart meters, and energy-harvesting markets. Given Murata's continuing commitment to the CAP-XX supercapacitor technology, the Company remains confident that the Murata royalties will grow in the near term.

The Company has embarked on a operational cost reduction process investigating methods to increase plant efficiency, reduce the cost of raw materials and improve current production yields. Progress to date is on track with the majority of the initiatives expected to begin making a positive contribution in the first half of the current financial year. Both contract manufacturers are progressing steadily and the Company is in the fortunate position of having excess production capacity which will be beneficial with the new sales opportunities that are being pursued.

CAP-XX was successful in completing a capital raise in August with 28,181,819 ordinary shares being issued at £0.055 per share. The proceeds will be used to further develop the automotive and surface mountable device and to extend the cost reduction program. Cash reserves, before the capital raising exercise stood at AUD$1.1 million as at June 2013.

The Company has made solid progress in the areas of product development, cost reduction and the increase in sales. The Board remain confident that the progress will be sustained over the next 12 months especially in the above areas.

Patrick Elliott

Chairman

26 September 2013

Business Review

Review of Operations and Activities

Since CAP-XX, launched its first supercapacitor in 2002, approximately 9 million units have been sold. Since 2008, CAP-XX has established a new revenue stream with the commencement of license fees and other related payments including royalties from Murata. Whilst these payments have so far been modest, the Directors anticipate that they will increase in the future.

Sales revenue for the 12 months to 30 June 2013, increased by AUD$0.1 million to AUD$3.6 million compared to AUD$3.5 million in 2012. This 3% increase is due to a year on year volume increase of 6% whilst the average selling price reduced by 3%, over the same period, due to a competitive market place. The Directors believe that the focus on operational cost improvement through improved utilisation and increased yields is beginning to pay dividends with the Gross Margin increasing to 30.2% (2012: 21.4%). The reduction in total research and development expenditure was due to the reduction in other income. The other income in FY12 was comprised of government grants which required a one-off increase in CAP-XX R&D expenditure to support the receipt of the grant. The major majority of this work was completed prior to July 2012. The operating result for the twelve months to 30 June 2013 was a loss of AUD$2.3 million (2012: loss of AUD$2.9 million) with cost control being the primary contributor to the improved result.

During the year, significant effort was made to redesign the Company's our products and processes to reduce manufacturing costs and to improve product performance. Results to date are encouraging and the Board expects to see the benefits progressively through the current financial year.

Business Environment

The Board believes that the portable electronic devices, one of the fastest growing segments of the electronics market, provide one of the greatest opportunities for CAP-XX's products. Driven by customer requests, manufacturers are constantly adding to the functions and applications available on these devices. This means that power management continues to be an increasingly important consideration. The other important factor is size as devices becomes smaller their capabilities increase.

Automotive applications such as Stop-Start systems, flat battery jump-starters, hybrid electric vehicles and electric vehicles are very attractive opportunity for CAP-XX's products. Numerous automotive OEMs and battery manufacturers have purchased samples and are currently evaluating CAP-XX's automotive products and the feedback to date has been pleasing. During the year, additional plant and equipment was purchased and commissioned to enhance our ability to produce these large supercapacitors and to assemble them into modules suitable for use in motor vehicles.

CAP-XX technology provides a competitive advantage over other supercapacitor manufacturers who are unable to match the CAP-XX technology for thinness, energy density and power density. Many competitors manufacture higher-capacity, large package devices and focus on applications where the combination of thinness, energy density and power density is not an issue. In the future, CAP-XX's surface mount capability will offer another very significant point of difference with the competition.

Strategies for Growth

The Company is in detailed discussions to secure business with global original equipment manufacturers active in portable consumer electronics. Relationships are being strengthened with these organisations and regular engineering meetings are held together with their integrated board providers and design teams. The Board are pleased with overall progress and is confident that the available market for supercapacitors is increasing as manufacturers become familiar with the technology. During the year new business was won in markets such as: security products; metering systems; flow control systems; location tracking; military products and mobile phone accessories.

The Company will continue to explore additional opportunities to increase the product offering both through the current distributors and direct to customers. These offerings may take the form of complementary energy storage devices and modules.

Separately, the Company is exploring the opportunities in several new markets to leverage its strong intellectual property and engineering expertise through new license agreements or joint ventures. Given the increasing levels of market interest in CAP-XX technology and high performance supercapacitors, the Company believes that the automotive market in particular offers significant opportunities for growth.

Outlook

The major short term focus for CAP-XX is to successfully complete the implementation of the product cost reduction strategies already underway and the licensing of its automotive and SMD technologies to end users and contract manufacturer partners. We will ensure that the increase in sales enquiries and associated demand are followed up, to maximise sales volumes from current and emerging markets; and to ensure that distributors are in place to support international demand for supercapacitor technology. We are encouraged by Murata's September launch of its second generation supercapacitor product, which is expected to drive royalties in 2014 and beyond. We are also delighted by the strong uptake from automotive manufacturers and their Tier-1 suppliers of our large supercapacitor as well as growing interest in our traditional product, following our first automotive contract award.

CAP-XX Limited

Income statement

For the year ended 30 June 2013

The above income statement should be read in conjunction with the accompanying notes.

CAP-XX Limited

Statement of comprehensive income

For the year ended 30 June 2013

CAP-XX Limited

Balance sheet

As at 30 June 2013

.

CAP-XX Limited

Statement of changes in equity

For the year ended 30 June 2013

CAP-XX Limited

Cash flow statement

For the year ended 30 June 2013

Notes to the financial statements

Basis of preparation

The financial information included in this announcement does not constitute statutory accounts within the meaning of the Australian Corporations Act 2001. Whilst the financial information has been computed in accordance with Australian equivalents to International Financial Reporting standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001, this announcement does not itself contain sufficient information to comply with those requirements.

Note 5 Loss per share