Ann: Battery Performance Update, page-2

Executive Summary

• The Strategic Review commenced late last year is now complete and the Board is
considering its response. Redflow will release details of its planned operating path within
the next few weeks.

• Redflow has about $1 million worth of product backorders, with 96 batteries in stock and
another 120 batteries in transit from the factory.

• Redflow has recorded some unexpected product failure modes from remote monitoring of
batteries deployed at customer sites. Most of these problems were resolved on an ongoing
basis via ‘over the air’ remote deployment of updates to battery software. Thus, lessons
learned from ‘real world’ customer deployments are being fed back into product
improvement.

• Laboratory testing of electrolyte samples from one specifically identified batch of ten
batteries indicate that they may be at risk of failure due to the presence of impurities in
battery electrolyte.

• Based on manufacturing test data and ongoing operational product testing, Redflow's
expectation is that this issue is likely to be confined to a small subset of our stocks.

• Samples from a further 20 batteries out of our Australian stock have just been sent for
laboratory testing. The laboratory testing cycle typically takes about 10 working days.

• Delivery of new batteries has been paused pending the outcome of this further testing. If
the tests being conducted return satisfactory results, Redflow expects to resume customer
shipments at that point.

• Redflow also believes the issue can be remedied economically in any affected batteries by
the application of a simple chemical remediation (cleaning) process. Redflow is now​

undertaking a trial to confirm this.