Invinity Energy Systems plc

Good afternoon and welcome to the Infinity Energy Systems PLC four-year results investor presentation. Throughout this recorded presentation, investors will be in listening mode. Questions are encouraged and they can be submitted at any time by the Q&A tab situated in the right-hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to CEO Jonathan Maron. Good afternoon to you, sir.

Many thanks and good afternoon, everybody. Welcome to the 2024 results presentation. You'll see this is dated May 2025. I think we did say when we were here about a year ago that we would look to bring forward our results from the end of June. Delighted that we've managed to do that. We hit May, albeit just by one day, but significant improvements. My thanks to Adam, definitely, and the rest of the team for achieving that. And we'll look to continue that in the future. I'm conscious it's only a couple of months since the last trading update. And obviously today, understandably, today's session is anchored around those results. I'm going to hand over to Adam in a moment to go through the numbers. There's understandably some questions on where we sit from a cash position, walking through working capital, particularly in relation to LODES. So I've asked Adam to make sure we address that head on. But before I do that, just a bit of sort of a context on where we are and maybe where I see things. And firstly, just taking stock of where we were from a year ago. I think that's always useful. We'd obviously just had a successful fundraising raising £54 million net. We were working very hard to get Endurium, or then it was Mistral, launched, saying that was the critical product we needed to advance ourselves commercially. And we were saying there were strong signals in the market, but we were still waiting for those to develop. But we were confident they were coming. roll forward what is now 11 months. We've launched Endurium, that is absolutely critical for us. We've shipped that first product, we've shipped it to Gamesa and really pleasingly we have got a delighted partner in Gamesa Electric. They were delighted with the product itself and its characteristics, how it's performing. They were delighted with how we had commissioned that project and that really does take the learnings we have from having delivered so many Vs3s into the market. and we are seeing that there is now evidence in abundance that the market for batteries is there. So, secondly, looking at sort of the context for what we're about to go through, what I'm seeing, what we are seeing now, is that it's undeniable that batteries really are coming of age. We've been saying for a long time that if you're going to get energy security, resilience, you think what happened in Spain recently, reduced reliance on natural gas, and critically reduce prices to consumers, that's going to be achieved by increasing penetration of renewables onto the grid. With that, you also get the benefits of net zero, which is very important to us as an organisation as well, but that is only achievable with battery storage. And that's both from a short and long-term perspective, and that is becoming increasingly clear really on a day-by-day basis. I was recently at Indosolar, which is an exhibition in Munich, seeing our partner Siemens Gamesa. There's such an enormous amount of space set aside for batteries. There are so many companies there and interest across the sector, and it really is staggering to see the amount of both buyers and manufacturers focusing on this area, all the ancillary services that go around this. This is becoming a very, very big industry. Matt is going to talk to you in a few minutes' time about the government support programmes we're seeing. The obvious one for that is the cap and floor regime, and that first application window, excitingly, is closing today. From a PR perspective, I think it was just 10 days ago, we managed to have We were lucky enough to have a clip on ITV News, which was really good to see that out in the mainstream media. Michael Shanks, the energy minister, had come up to see us with the chief architect for the cap and floor from Desnes. But at the same time, we had a thought leadership piece in one of the Scottish national newspapers on zonal pricing. That was all in one day. This is the sort of PR which we might have expected once every six months if we were lucky in years gone past. And that was all came together. I think that just shows you the way the industry and the importance of batteries is really coming to the fore. Now, a little bit on vanadium flare batteries. It's not a new technology. First launched, first found 40 years ago, 1986. What has, though, changed demonstrably, And I'm really reassured that really in the last 12 months is that there's an acceptance that technology really does work, that it's appropriate, and there's a space for it. And that first bullet point, top left-hand corner, I think is one of the reasons for that. We are able to say to our customers, we've dispatched broadly more than five and a half gigawatt hours of power from our VS3 batteries. And that is a calling card. And time and time again, I have a conversation with some potential customers. You sort of say, oh, where are the FBs? And you say that, you're like, oh, okay. What does that mean? That means, one of the key questions I think with that is, if that is the case, why are we not selling gigawatt hours of batteries now? And I think there is a very good answer to that, and I'm really pleased with what that answer is, because it's not do VFBs make sense, do they work? It's where are we from a cost and cost of production perspective? And the reason that's important is that I'm firmly of the opinion that is within our control. And we're going to come on to the slide in a minute about how we are taking costs out of that. What we do know is that when we are quoting on the larger projects, such as for cap and floor and elsewhere, that we are cost competitive. We have a roadmap to take where we are with Endurium platform to take the cost out. And we are quoting and we are competitive and we know we are winning business in that. And the frontier power that's to be put out is really proof of that. Now, look, lithium is our big competitor. I think the markets and those who are Looking at long duration, there is plenty of room for all the long duration storage businesses that have got to this stage to find a place for themselves. But the real competitor is lithium. And there's been lots of conversations about that. The price has dropped for lithium over the last 12 months. We anticipate it dropping further and we are forecasting it dropping further. And when I say we're competitive, it's against the forecast that it will drop further. So we are alive to that. There are plenty of places, though, where Much of the lithium cannot compete. We're seeing tenders in New York. We're seeing rhetoric from places such as India where they do not want Chinese product coming onto their grid. Whether you're right or wrong, that does create extra opportunities for us. Don't lose sight, CATL, probably our biggest competitor. They have 20,000 people in R&D. They recently raised almost $5 billion, a huge market cap, and they measure the number of patents they register almost in the sort of double digits on a per day basis. And if you look across the sort of the LDS space, what we are seeing is that, you know, the number of competitors there is beginning to thin out to those that are looking at being successful. So EOS, we've got huge respect for EOS. I'm sure all of you have sort of looked at EOS. You know, they've got a revenue not too dissimilar to us, you know, 10 million or so in the first quarter, a bit more than us, but you know, where we've been before. you know, they are approaching that cost perspective by selling at a significant gross loss. We are not prepared to do that. We don't have the balance sheet to do that. I'm sure, Sheffielders, you wouldn't want us to do that. But, you know, that does mean it is harder to compete in the shorter term. You know, their OPEX base, you know, probably about four times where we are. Again, you know, that creates challenges, but we're still able to deliver on the R&D front. But, you know, their market cap is just shy of a billion dollars when I looked earlier today. I think when you look at the size of CATL and EOS as our two big competitors, we have a product that competes. I am firmly of the belief that whilst it's stiff competition, and we must be aware of that, there is clearly value we can create as a business when we get that right. So maybe just before I finish on three things, that cost reduction, I've talked about why it's important. That 24% is how we have taken the cost out of Endurium since that first launch. So that's really to date. It was a platform where we knew we could continue to take cost out. And hopefully we've shown a little bit of visibility as to how we are trending against where we first thought. The opportunities are so large. Matt's going to talk about what that means. Those are transformational deals that could and we hope will come through to us. It does mean that sales cycle is slightly longer potentially, but the transformational effect of those coming through is really interesting. And then the third point on strategy, I think about a short, medium and long-term strategy. Maybe focus on that medium term to start with. Our strategy is to get to the position where there are significant volumes of transactions coming through from the programs that we are seeing today. So first and foremost, the cap and floor program. Again, Matt's going to come on to that. That enables us to have volume at the right price, which really does enable us to continue to drive that cost out. In the longer term, I see us being cost competitive against the competition in areas where a vanadium flow actually makes sense from a use perspective, where we can compete without additional support from a program specifically focusing on long duration storage. And that is important because we need own right, and that is what we are challenging ourselves to do, and I believe we can do. When I look at the short to medium term, we are approaching that absolutely through partners, and we have an existing partner with Everdura, but we continue to look at partners elsewhere in the world to approach some of those opportunities. And again, I'm quite excited by some of the conversations we are having, and hopefully more to come in due course on that front. We've got very good visibility on that pipeline in the shorter term. We are focusing on getting through a lower number of profitable deals. That is our strategy. They have to be sold at positive product gross margin. We are all frustrated they don't come through as quickly as we would like, but I am absolutely reassured by the number and volume that are in there and the traction that's there that they will come through. We've got the experience from BS3. It was exactly the same. It was really frustrating seeing those come through. And then they did in the end. There was a much smaller pipeline of deals on those VS3s than we're currently seeing on Endurium. And so that's why I have faith. It's very hard looking at one individual one and saying, yes, we'll definitely do that one. But if you look across the volume and depth of those conversations and what customers are telling us, I really do have confidence that they're going to come through. So that really, I guess, focuses on that middle bullet point, increased deal size. That's just a sort of a hint as to where those average deals are going, I would anticipate, I would expect in years to come that that number would increase significantly. So hopefully that's set the context for what we're all going to talk about now. Adam, if I may, I'll hand over to you.

Good afternoon, everyone. I'm going to lead you through two slides here. First of all, our financial results from the P&L, a bit of a deep dive into what's been happening there through 2024, and then a little more detail on our cash position and working capital, addressing some of the good questions that have been raised. So first and foremost, we have to acknowledge 2024 is a transition year from BS3 to Endurium. Revenues were down three quarters year on year. And bear in mind that those are essentially BS3s that have been contracted and sold through 2022-23. And you can see how that's playing out here in the margin position. Crucially, the first revenues there were recognised from La Plana with our partner Gamesa in Spain. It's around about a 12-month sales cycle for Endurium and BS3. We'll just have to see some of those first orders come through. The gross loss increased from 3.3 to 3.5 million. Around about 3 million of that comprises the warranty costs and provisions, and then 1 million from the overheads from the new Motherwell facility. Those warranty costs you're seeing flow through, they relate to known issues on the S4 stack and the DCDCs. The S4 stack has since been superseded by the S5, and those DCDCs are being swapped out by the supplier. So those have been remedied and worked through. The gross margin loss in preview on year from minus 20 to minus 8%. Again, those are BS3s, predominantly contracts in 2022, 2023. And then looking elsewhere across the P&L, we're seeing cross-control while growing operations. So that 7% year-on-year increase in OPEX is predominantly driven by increase in R&D investment for Endurium, whereas we're seeing some inflation increases in both our staff costs and our other admin costs in order to pursue our objectives of cost-saving measures. So putting that together is a 20% year-on-year improvement in EBITDA loss after adjusting for R&D, those non-cash items we talked to, and on-off expenses, including our re-domiciliation this year from Jersey to the UK. So, as you say, a couple of comments that have been raised on the financials since they've been released. I think there's a couple of points that haven't necessarily been picked up on, which are worth emphasising here. Specifically, the 3 million in short-term deposits, so this is in there and other current assets. That has since matured, so 35 million total transposition. Secondly, LODES inventory. One of the reasons that LODES was so important for us was that build-up of inventory towards the end of last year, and therefore the push to get that closed out in the first quarter of this year. And then finally, the LODES ring fencing. So we will spend all of those ring fencing monies on LODES plus the CAPEX for the commissioning of our Bathgate line, which will shortly take place And then we do expect to then recover around about 50% of that through grants in order to reinvest back in the business. So walking through those numbers, we finished the year 24 at $35 million of cash, including the short-term deposits. Around about $5 million of that has been spent on LODES. We have around about $20 million of net OPEX after R&D income, and $3 million of CAPEX. A portion of that is also discretionary. and we expect to realise some gross margin through the year as well. So that takes us to the cash position you're seeing forecast by the analysts across the range of 8 to 30 million at the end of the year. We're delighted that BDO, after some thorough work through our financials and our going concern, and also the downside scenario, given that the business is a clean bit of help through to the 30th of June, and the going concern statement that you see in these financials. So then I'm going to pass it back across to Jonathan to take us to our cost plan.

Thank you Adam. So I think in my context I highlighted why this is so important and Hopefully this will give you a bit of a steer on really two places. So first thing to point out is that we said that when we launched Endurium that we wanted to be out the box 30% lower than VS3. And from the prices that we've been quoting on the deals we've announced already on Endurium, we are there. So that is very pleasing. The other thing we pointed out when I took over as the Royal Chief Exec in September was that we needed to head down that cost curve very quickly from the first units that we were shipping from the facility in Vancouver. And what you see at the top there, that grey line, is where we, at that point in time, where we were plotting cost coming out. So the The firm line is what was directly within our two-year cost roadmap and then dotted to 2030 where we saw those projections taking us. Now, that is just to give you a flavour for where we thought we were at that point in time with work to be done based on known projects within the cost roadmap. What we have managed to achieve and what I've tried to show you here is that we are doing better than we first thought last August. Last August, we said we had work to do and we are doing that work, but doing better. So that red line is where we are now forecasting where we are. So that is a greater drop off. And you'll see that that cost, when you come out to 2030, we think will have taken 70% out of the cost from that first launch. So when I talk about how we... have confidence that we can compete against other technologies, both on the eldest front and on the lithium front. It's because we've got that level of confidence to be able to give you this information because we've got the work there. Now this is the known knowns, if I can call them that. I have challenged the team that we need to think outside of the box and try and do better because there is one of the things which Gamesa Electric tell us is that if you ask them to predict where they thought the costs were coming out of their turbine business for interests, they managed to do significantly better than they first thought. So we will not rest on our laurels and say achieving this is a significant achievement. significant achievement, the competition will undoubtedly continue to innovate and we will do the same. So that shows, if you look at the pricing there, that pricing that we are quoting there for 28, 29 is competitive with where we know the competition is quoting for cap and floor for interest. How are we doing that? It certainly comes with additional volume. Volume is very important. The reason that we have a commoditized modular product is so that we can do as on a repetitive basis, take costs out of that. There is still a lot of value engineering to do and to be done. Part of that comes with developing the supply chain further as well and working with them. but also just how we put the product together. We launched our semi-automated stack line. We're about to launch, I should be clear, our semi-automated stack line up in Bathgate. I was up there twice recently, and it's a very, very impressive product. Impressive setup. And replica as well. So we can significantly increase our capacity with not too much lead time and not too much capex. And that takes cost out and improves quality. Hugely important there. And then finally, the other way that we have managed to do that, and I'll hand over to Matt in a minute who will probably give you a bit more clarity on that, is, as I say, we are really pleased with how that first system at La Plana is going. And we are from that able to Increase the operating parameters, and ultimately cost per kilowatt is a function of the numerator and the denominator, and if we can increase that denominator, i.e. you get more from the system, one of the ways of taking cost out earlier and faster than you thought. So, Matt, I'll hand over to you if I may.

Thanks, Jonathan, and thank you all for being with us this afternoon. Look, we've been thrilled with the performance of our product at La Plana, which is the first version of Endurium or first site where Endurium has been installed. Not only have we been thrilled, but the most exciting thing from our perspective is the degree to which our customers have been very, very happy with this. You'll recall that this first delivery was to our partners at Gamesa Electrics. They were enormously encouraged by three things. The commissioning time, within which we were able to get the system up and running. They were expecting it would take six to eight weeks, and it was operational in two. The degree to which we've exceeded the performance specifications within the product, and the degree to which the performance of the product has indeed been as steady, if not steadier, than everything that we've experienced in This graph you see on the top left-hand side is about eight days' worth of constant charging discharge cycling over the full depth of discharge range, and we are indeed proving that this product has that same rock-solid stability that our previous generations did. Jonathan talked on the previous page about how this ties into cost reduction, and I think I would put it slightly differently. I would say when you look at that product optimization bullet, really what we're trying to do is to do more with less. And that's what we've proven we can do here. We have exceeded the specifications for this product, so we can deliver better than the performance we expected, and therefore we can deliver at lower cost for the same capabilities delivered on site. As our partners at Gamesa are, as many of you may be aware, they are looking towards a potential acquisition of their business by ABB. ABB is very, very active with what they call their battery as a service model. That's an opportunity for large commercial and industrial customers to take advantage of storage on their facilities. And especially where we've now proven we have a battery that can be installed effectively, that performs reliably, and that doesn't have some of the degradation and fire risk that the competition has, we think we're going to have some really interesting discussions about how we could dovetail with similar models to that, similar business models to that in the future. Now, looking beyond that one project, of course, we're keen to see what is coming up. And really, over the next three years, we've got sort of a slightly different evolving view over time. In terms of the projects that we will be delivering in 2025, we have substantially all of our projected revenue for this year covered with four major projects, with Everdura, STS, LODES, and HITT. Those projects are all being manufactured as we speak and are on track for delivery. When we look forward to 2026, we've got a number of very, very large-scale projects that are in negotiation, some of which we've publicly disclosed already, some of which remain confidential. In the U.S., we've talked about the DOE, Long-Distance Energy Storage Programs, where those projects remain in development. I'm sure many of you are aware that anything going on with renewables or new energy technologies in the U.S., and especially related have seen some not insignificant pickups over the last few months, but we are encouraged by the fact that the programs with which we are engaged are still progressing, are still going through their contractual negotiation, and we still expect to close and deliver within 2026. We're also seeing new solicitations from the California Energy Commission. We've been successful in delivering those projects in the past. The CEC remains very encouraged by the progress that we've been able to make. And they are pushing us as one of a small number of selected and encouraged technologies to go forward to their much larger loan duration solicitations from 2026 and ultimately beyond. Beyond that, we've got an active book of business evolving in Europe and the UK, Asia with our partners in Taiwan and Korea. in the country. Looking at 2027, really what we see in 2027 and beyond around the world is a shift from some of these earlier long-duration storage deployments to large-scale programmatic procurement schemes that are supporting classes of technology like ours, especially high-throughput and long-duration proposals, and especially what we're very encouraged by is the degree to which those schemes include carve outs for non lithium storage. You all will be very familiar with the cap and floor scheme here in the UK, where proposals were due in today. And we've been very encouraged by the amount of interest that the developer community here in the UK has in deploying our projects into that program. In the U.S., we see evolving programs in NYSERDA and the CEC and similar projects in Canada as well. Just to do a bit of a deeper dive into some of those larger projects around the world, as I said, the thing that is most of interest to us is the fact that all of these have some form of Advantage or Carva for non-lithium technologies. You know, if you add up these projects around the world, I mean, the cabin floor project here in the UK is the largest one that has been announced and formally launched to date. But there are tens of V1 hours worth of opportunity for us that we are tracking, that we are now working with some of the world's leading project developers and owner operators to put forth solicitations for. And just to do a deep dive into two of those programs, the first one is a program in New York that's funded by NYSERDA. It's their bulk energy storage program. They're looking to deploy about six gigawatt hours worth of storage, of which about 600 megawatts is carved out for non-lithium projects. They've done that in a very interesting way where they're emphasizing non-lithium programs by giving them a longer contract for offtake, which means that they're essentially helping non-lithium technologies become part of their grid without incurring any additional cost to ratepayers. So it's something that is beneficial not only for companies like us, of course, but also beneficial for New York's electricity consumers. Similarly, in British Columbia, there has just been announced what's called the energy procurement, of which storage and capacity is a significant part. This is expected to add about 600 megawatt hours worth of storage on the grid. And they have significant interests and there are stipulations in the program about how domestically produced and locally produced technologies are going to be key to those programs. So very much of interest on our side. Now, I think the thing that's most important about the position that we are in right now and one of the places that we see a lot of our customers, sorry, not our customers, a lot of our competitors struggling is in the progress towards being able to credibly deliver these projects. And what's been so encouraging in our business over the last few months is that we continue to get phenomenal feedback from our customers about how our products are performing, about how our company is supporting them, and about their view of how they expect to have our products as part of their future. We talked a little bit about Gamesa and the work that they've done with their project at La Plana with our initial Endurion battery. But even beyond that, we've had some very encouraging feedback from our partners at Elemental Energy in Alberta with their solar-coupled battery. Pardon me. Our team, the team at Everdura in Taiwan, see phenomenal opportunities for our projects and our products on that island, especially because of their hesitancy to incorporate technologies on the electric grid that have their origin in mainland China. And finally, if we look to California, of course, California has always been a standard bearer in how to deploy more and larger net zero technologies. Our partners at Indian Energy have been enormously encouraged by the degree to which we were able to go in and meet their needs. And as we look into the next couple of years we believe that Indian Energy will again stand beside us as a partner to get those projects done. And with that, I think I'll pass it over to Jonathan to reflect on what is a very sunny outlook.

Thank you, Matt. Yeah, so in my session at the beginning, I think I covered all of these points, so I think I'd like to move quite quickly on to the Q&A, because I know we've got a significant number coming through. But just to reiterate, For elders, this really is a transformational period. And we're seeing this not just in the UK where there's obvious moves, but elsewhere as well, really across some very interesting jurisdictions, some which are key markets for us, others which are markets where we intend to play with partners. So we are very much reassured by what we are seeing. and delighted that we have Endurium there as the product. If we had not managed to launch Endurium at the back end of last year, when we did it, we would not have been having the conversations we are now in the cabin floor program and elsewhere, both from a product reliability characteristics and from a cost perspective. I've referenced partnerships. They will continue to play a very, very important role for us and a large part of my role is working with partners and potential partners to try and move that forward to assist in our growth. And just to finalise what Madda said, some of those very large-scale projects relating to procurement schemes are those which we are very much focusing on and we believe that will drive significant growth out to the end of this decade.

Brilliant. Okay, I think it's time to go to Q&A. I'm delighted to say we've got a lot of questions in here. So, without further ado, I think suggest we get started. So, the first question I think will go to you, Jonathan. There are a number of questions going in basically pointing out today's deadline on the cap and floor scheme deadline. Can you elaborate on, with that in mind, can you elaborate on plans to scale ahead of sort of potential demand that could arise from the cap and floor and some of the other schemes that Matt actually pointed out in his slides?

Yep, absolutely. So today is the closing deadline, I think close at midnight tonight for those applications and we put out an announcement about our excitement for that that scheme and also our arrangement with Frontier Power but also talking about others and our rhetoric has not changed from that point in time so we are very much looking forward to how those flow through the system over the next period. In terms of scaling up we have been having conversations with potential partners, potential customers, not just on cap and floor, but elsewhere, and what they are reassured by. And when we went through the funding process last year, where we had a number of technical consultants coming up and looking at our manufacturing capabilities, was that the ability to scale up was very much within our control. That semi-automated stat line which we've launched, which was a million pounds worth of investment and that is capable of being replicated in relatively short order. There is space available in the central belt. There's a reason why we are based there and we're getting an awful lot of support from local governments both in the Scottish sense and the central government area as well. We've got a good supply chain. We work in best cost regions, so there's a lot that comes from China, but we are able to make sure that that sort of sits there at the low tech end of the process. Therefore, there's nowhere much cheaper to buy steel than China. We get some of the tanking done there, but any other parts of the supply chain we are concerned by, we can de-risk and move elsewhere. So I am confidence on our ability to scale up, but that's one of the reasons why we have the level of OPEX we do. We are not just looking at the current business at the moment. We have a lot of people who are making those plans such that we can demonstrate to customers we have the ability to scale and fulfil those orders.

Thanks. I'm going to actually just hijack quickly. There's a question here from Greg saying, in the past, Infinity has dismissed other flow battery companies, stating we're well ahead of them. It looks as though some zinc batteries are increasingly looking competitive. How do you feel about competing battery providers for the cap and floor scheme?

Well, I think there's probably a number of parts of your question, specifically at the end of it, relating to the cap and floor scheme, but also on a more wider basis. If we have been dismissive in the past, that would not be something that I've ever been comfortable of. And hopefully under my leadership, you would not hear us being dismissive if we have done that before, if I can say that. I am firm that we need to collaborate across the elder space, whether that be with other flow battery businesses on the vanadium side, whether it might be with other chemistries. There are some great advances being made on the organic side. and whether it's actually across batteries with different chemitries such as EOS. If you look across as a parallel to what's happening in California with the California Energy Commission, they decided to support effectively four technologies to try and get them to the stage that each of them could have a product to be delivered at scale at the right cost. They supported EOS, they supported ESS, They supported Redflow and they supported us. And if you look, Redflow unfortunately went into administration 12 or so months ago. ESS is clearly having its issues as well and you can see that highlighted and you'll see that's just us and EOS left and frankly for the elder space that's not good. I want more people to survive. We don't want to be the only player in the elder space and we need to collaborate so I'm at the International Flow Battery Forum at the end of this month. The discussion is all going to be around collaboration and I think that's really healthy for everybody What I would say is across that cap and floor space, we haven't seen many other technologies in there. You have to be at TRL 8, and our assessment of where a lot of other players are, certainly outside the VFB space, is they're not at that TRL 8 space. EOS obviously announced a partnership with Frontier Power alongside us. We are working closely. with Frontier Power effectively alongside them, and we are competitive. So, again, we don't want to be the only other player in that space. They've said that they will look to set up UK manufacturing if they're successful. Frankly, I've mentioned that to the Energy Minister. I've said, look, you need to put in place some incentives for UK manufacturers, and I'm not just talking our own book. There's a clear signal that if you are giving some support for locally produced content, manufacturers will come, and that is going to assist us as well. So we need more people in this space, and I'm just confident that we've got the technology and we've got the roadmap to compete.

Thanks and just to clarify that CRL stands for Technology Readiness Level which is sort of government standard for the maturity of your technology. There's a number of questions here unsurprisingly given this is a full year results presentation around the finances and sort of speaking about working capital and how that breaks down. Adam, I know you covered this at the top of the call but it's quite possible there's a few people that joined late. Would you mind just sort of summarising the position on working capital just briefly?

Yeah, absolutely, and thanks, Jay, for the question. So, first of all, we'll start off with the cash position. There's 3 million sitting there in a short-term deposit in other current assets that have since matured. So, our cash position at the end of the year was 35 million, and 5 million of that is ring-fenced for loaders, and so that's the 20 million net of the grant and net of what you're seeing sitting there in inventory at the end of the year. We have around 20 million of net OPEX after our R&D income, And then around 3 million in CapEx, which is largely discretionary. We do expect to receive some gross margin on the sales through 2025. So that's 28 million of outflows plus the gross margin takes us to the 8 to 13 million at the end of the year that you're seeing forecast there by the market. That cash management is around 2 million a month. We will need to manage the OPEX and CAVEC position judiciously through to the 30th of June, which is what we're seeing reflected in the going concern statement there from BDO, which takes us through cash runway to 30 June.

Thanks, Adam. You mentioned Lodez. There's a couple of questions here on the Lodez project. I think I'm conflating three questions together here from various people, but if you could talk in terms of the strategic importance of Lodez. I mean, there's one question here asking, you know, why is it with BS3? There's another question asking about how does this drive future sales? Why does it represent a good use of funds? Jonathan or Matt, do you want to take this?

I'll maybe answer some of that. The reason it's with VS3 is because the grant was specifically for us to deploy VS3 batteries and not Endurium. I think if we tried to switch it, that grant wouldn't have been there. Number two is we have an inventory of VS3s, which are on the balance sheet at the end of the year. One of the reasons why we are keen to push this through is so that we can turn that inventory into cash. When we have been talking to potential competitors and across the stakeholder base, being able to say we have our own project of this size, which is coupled to CERN, is hugely important and very, very helpful. It's also, frankly, really improving our understanding. We are selling batteries into a project, and those batteries are an important part of it, but there's many other aspects that go on, and it is helping us, frankly, to understand more of the sales cycle. So there's a huge number of learnings across that. Matt, anything that you wanted to add on that?

No, look, I would just reinforce it's a big part about walking in our customers' shoes, and that is from a development perspective, from a revenue perspective, from a lifetime operation perspective, and just in terms of structuring and transacting around projects like this. The more we know how it works, the better we'll be able to support our customers, and there's no better way to learn how it works than by doing it ourselves.

Adam and I were at a town council meeting last week where they were initially concerned by the application because they were worried about the fire risk from our batteries, which is a standard response when you see a battery project. Adam and I went to them, talked them through the technology, why we were doing it, how it was looking to progress. And by the end of it, they were delighted. They want an invitation to the opening launch and discussions with, you know, there's various developments going on outside. And is it a possibility to create a PPA potentially from that site to our battery? So you can start to sort of put a sort of an off grid solution, reducing power to the cost of consumers to create an island solution net zero. So, you know, the learnings for us and just to see how this conversation is taking place are really exciting. It is not going to be our core business. I don't want anyone to think that we're going to continue doing this elsewhere. We simply don't need to. I think when we first looked at raising the money and having it deployed here, we had not anticipated capital flow coming through nearly as quickly and at such scale as we do now. And therefore, I think this is a good use of the monies, and I don't think we need to look to replicate that anywhere else. Thank you.

I'm going to go to, there's a question here from Steven, a question here from Peter, which I'm going to sort of slightly bolt together. The first is around, and Matt, I'll aim this at you, I think. Can you elaborate on what the most promising new customer segments are? They then go on to sort of list a couple of the data centers, microgrids, grid resilience. Before you answer that, the second part of this question is, there was obviously a TR1 received recently from an Indian investor in the company, and this question is asking sort of how do we look at India as a future market? So if you could look at it, if you answer it first from the perspective of the customer segment, then maybe on a sort of broader sort of geographical segment, thinking about India in particular.

Thanks. Sure. Look, I would say... Broadly, if you were to look at that slide that I showed earlier on in this hour, the most exciting thing that's happening is that all of the world's regulators are looking at what storage is needed on the electric grid. They are realizing that it has to be ultra high cycle, long duration technologies. And they are realizing that the current incumbent technologies are not going to fit the bill for everything that is going to be needed. That may seem like a triviality or like a sort of a, it may not seem significant for some of you who have been following our company for a while, because I think we've been sharing that message with anyone who will hear it for the past several years now. But the fact that the regulators all around the world have turned around and have developed programs and are launching multi-billion pound programs to address exactly that challenge is hugely significant. If we, you know, outside of that sort of grid space that we've been looking at pretty extensively, I think one of the things that we were very encouraged by, and Joe, you talked about this a little bit, was the degree to which large industrial sites, especially data centers, but also more conventional industries as well, are looking more and more at storage as a way of decarbonizing and driving costs out of their operations. One of the things that has been very encouraging for us as we've gotten under the hood, as it were, with some of the data center providers we're speaking with, is we found that the load at a data center is highly variable. And so in order for a battery to serve that load appropriately, it has to be a battery that can do ultra high cycle camps, not just one or two cycles a day, but cycling almost continuously over a 24 hour period to be able to regulate the energy flowing into one of those data centers. That's a duty cycle where we are ideally suited and especially when you layer on some of the additional benefits of our batteries like the non-flammability, it means that it is a technology that is very, very well suited for being close coupled with those large data centers as they get built up. Finally, Joe, you mentioned new market segments and we talked about India as an example. Look, as we've always said, of end-use products to end customers. You know, it's our view that the fastest way for us to scale our business is to work through really talented, really capable partners in individual regions. You know, that's why we signed our agreement with Everderma in Taiwan. And, you know, nothing to announce here today, obviously, but, you know, we are actively looking at what other partners could be helpful to us in other parts of the world, including, of course, the Indian subcontinent.

Thanks, Matt. There's a question here from Gareth around partners. So, Invinity's built an impressive network of partners. As they mature, do you see potential for certain key partners to take equity positions in the business that align long-term interests and de-risk our ambitions for global growth? Jonathan, do you want to take that one? You're on mute as well.

Matt's just talked about the significance and importance of partners. And I will reiterate again, I want us to push for more partnerships. There is no better way of aligning interests than if there is some sort of. equity ownership stakes. It certainly happened when we signed a deal with Everdura, Everbright, made a small investment at that stage. We are certainly alive and welcome any such possibilities with any future partners. That's not to say that it would happen or must happen, but it certainly wouldn't rule us out.

Thanks, Jonathan. There's a couple of questions here from multiple people asking around the sort of tariff situation and how we're sort of managing that. This question is asking about how the Canada-US situation is, how our Chinese supply chain is affected, and also how perhaps the benefit of being in the UK and our plans to move into China. the US. I've completed about five questions there. But can you talk in sort of general about how we're sort of managing, I guess, some of the geopolitical things that are going on and especially concerning sort of the US and moving stuff in and out?

Yeah, I mean, I think the answer is we are trying not to be too reactive because things are changing rapidly. And that in itself is the challenge, is that it's very hard to to come up with a plan when there is a risk that everything could change on a sixpence in short order. We are fortunate that we have capability across the globe. Obviously, we've got manufacturing presence here. We've got manufacturing presence in North America, in Vancouver. Obviously, we can fulfill directly from China, and we've got a partner who is working to fill up in Taiwan. So that creates optionality. At the moment, we seem to have negotiated as benign a tariff regime as anyone else from a U.S. perspective, from the U.K. So it is feasible that we can fulfill into the U.K., so into the U.S. from the U.K., But it has always been within our plans to start to produce in the US. So that remains the case. And we are not going to commit capital to the ground to do that up until we've got the projects in place. So the Department of Energy Awards, which we announced a while ago, are still there and still very much alive. And there are other projects in the US as well. So I am hopeful that we will be able to drag some of those through and start to set up capability in the US. But also there's other jurisdictions we are looking at as well with partners that could potentially come into that mix.

Thank you. Actually, on the subject of partners, there's a question here asking around about STS groups. Obviously, our Hungarian partner saying it's good to see repeat business. Is our relationship with STS group something we'd like to model for future partnerships? Matt?

Look, absolutely. And I think if we look around the world, there are a number of companies already where we've had those kinds of partnerships. Certainly STS is one, but Indian Energy and Everdura would be other ones that I would point to. The easiest way to build our book of business is to work through partners who have already installed our products and you know, almost trying to think of an example, but I would say the vast majority of all the companies that we've delivered to already, we are currently exploring with them how we would turn around and go and build the next bigger projects. Because almost universally, especially our customers who are in the grid-scale storage space, the grid-scale renewable space, they are looking to continue to build their broker business as we are for them to go and deploy known product in a known fashion using a known technology is something that is very much of interest to them.

Thanks, Matt. And I think sort of sticking with you, please, there's a couple of questions, specifically one from Richard here. Just asking around sort of, you know, for those that are a bit new to the story, what are the one or two sort of key competitive differentiators that we have that allows us to win business? You know, your position in the conversation is probably the best place to answer this.

Yeah, for sure. Look, if there were two things, I would say it is durability. This is a technology that can be deployed alongside wind or solar projects and can be relied upon to deliver the regulation of those projects over their 30-year life. That is not a capability that lithium-ion batteries can offer. Second of all, the degree of throughput that we are able to put through one of those batteries on a day or a week or a month is totally unlimited. So a few minutes ago, we were talking about how data centers have a highly stochastic load profile for us to be able to regulate that load 24 hours a day and do so in a way that keeps our customers bills, electricity bills as low as possible is not something that the lithium ion batteries do very much accelerated aging or capacity degradation when you run them continuously like that, when you run them in highly variable duty cycles like that. And so that combination of lifetime and throughput are probably the number one reason why people are looking at buying our batteries over the other things on the market.

A question from Paul asking specifically around some of the criteria under the cap and floor mechanism and I might put this to Jonathan considering the people he met last couple of weeks. Is there any specific benefit to UK manufacturing under the LDIS cap and floor evaluation criteria?

Thanks Joe and Paul thank you for asking that question because this is probably one of my key points at the moment. The answer is possibly. And the reason I say possibly is because whilst there was an awful lot of documentation around cap and floor, it hasn't gone into any specific detail on this point. We are told that there will be. We're told that it is certainly something they want to push forward, but there isn't a huge level of detail. So I'm talking to anybody that will listen from Michael Shanks, to Desnes, to Ofgem, to our Dash to Wealth Fund shareholder to GB Energy, to anyone else, to say, look, within the wind regime, the CFD regime there, there was a financial incentive for local content, and there would be a huge lost opportunity if that isn't replicated in the UK. I think when you look at some of what's within how cap and floor has been put together, there must have been some uncertainty as to the level of interest and the ability for manufacturers to build up capacity. We are the only UK factory manufacturer and therefore, you know, it's difficult to just support one. You know, I'm pleased that, I'm really pleased that EOS said that they would potentially look to start up manufacturing here. And we have been, and I said very specifically to Minister Shanks, if you provide an incentive We will build extra capacity here and jobs going into the hundreds. And we have the MP for Bathgate with us whose eyes lit up at that thought. And Minister Shanks is actually the MP in the area next door. So, yeah, there is a real incentive. And I said, look, you've got to bring together what we talk about, that just transition and the industrial strategy. to be very specific as to how manufacturing businesses such as ours will react, because the alternative is our clients will say we need the absolute low cost, there's no benefit from UK manufacturing, every other battery arrives on a container ship from China, deliver one from China, we can do it, it's a little bit less, it's not a significantly greater cost than the UK, the benefits to the UK will significantly outweigh what would be, doesn't need to be a significant incentive. And it's within our gift to do that. So, you know, I am pushing anyone that will listen to hopefully give us that advantage. But if not, we have the ability to fulfil from elsewhere. And I really hope we don't have to do that because we've got the chance as a UK of creating something really exciting here.

Thanks, Jonathan. I think we all agree with that. I'm just going to sort of slightly carry on from that point. There's a question in from Peter asking around the – asking if there's any risk of price turmoil caused by product dumping, so triggered by sort of the stuff coming in from China and dropping the prices. Is this something – I know we talked about sort of lithium-ion prices at the – when you open the call, is this something that we're still looking at, sort of having to deal with in the future? And how does that sort of link into our cost competitiveness and the sort of product cost down roadmap we've got?

Matt, do you want to take that? Yeah, happy to. I mean, like, we could... Usually when you talk about dumping, it's where there is an equivalent product that's being manufactured in country and where one country is... public cost. We don't see direct equivalents, you know, where there are no lithium ion batteries being manufactured in the UK. So I don't know if you'd necessarily call it dumping. What we have absolutely seen is that in terms of getting lithium ion costs down, we've seen some anti-competitive behavior coming out of China and using that anti-competitive advantage to try and squeezed out all other forms of storage, not just ours. So it's not just a question of trying to replace something with a cheaper version of that same thing. It's trying to use ultra low manufacturing costs supported by, let's call it non-market incentives, to basically skew the entire movement of the industry in a single direction. to the degree that we think this is why we've seen all of these solicitations that I was talking about earlier have carve-outs for non-lithium storage. Because if you are going to make the case that dumping is happening, you want to have goods at scale to be able to make that, to be able to make that comparison. You know, when we, or if, I guess, to not say anything too forward-looking, if we are able to spin up our manufacturing at the scale that we intend under programs like Hap and Floor or some of the programs energy dumping legislation will be available to us.

Just to add to that, I mean, there's been broadly two phases as well. The first phase has been about short, sharp bursts of energy for ancillary services, and lithium did that very well. That market became strong quite quickly, which is why those assets became less profitable. The next stage is really about assets that last a long time and can work much harder. and long-dated assets, which manage their state of charge better. In the UK, there's a lot of benefit to assets that will last 25 years and not degrade. In the maps in Italy, there's a degradation limit. They're really looking for different features that that first generation couldn't necessarily provide in the same way. And that's where we're looking to position on top of what's becoming quite And there's a couple of important differentiators to add to that beyond the cost piece that you see from China.

Thanks, both. And noting we're almost at time, I might just do one last question, which I'll point this to you and I'll let you answer that and maybe give us some closing comments. So can you explain the current market disconnect that sees the company's share price valuing Divinity at 70 million, close to net cash and a fraction of the potential value of even one or two large oldest projects? I can sense some frustration in that question, but I think it's one we all share. I'll let you answer.

Yeah, I share that frustration as well. My understanding of the way UK markets at the moment is that this isn't an issue just for us. And very specifically, what you are seeing is fund managers who are running money are seeing significant outflows. And they are effectively for sellers of companies that are relatively illiquid. And so what happens is on any amount of buying interest or news flow, you're creating a trading opportunity at that share price. And so what you're not getting is any positive movements up from that sort of activity that would ordinarily dry that up. And so we've seen that with some of our shareholders who we've got good relationships with, who are supportive, who just had to find cash or somewhere to pay for those outflows. So in the very short term, That's fundamentally what is driving share price performance across the UK market, particularly the UK small cap markets. And there is talk about inflows coming in for various reasons. And hopefully that will start to sort of address some of that balance, because it is very hard to explain on a, on a practical basis, the valuation differences between us and others. But once we do start delivering, I'm sure that will resolve itself. It's just really quite frustrating to see in the short term. But I think I share that and we will do all we can to resolve it as we can do.

Thanks. I think we're going to leave it there. So, Jonathan, I'll hand over to you to wrap up.

okay and thank you to all of those who've attended today thank you also for your patience and you know your your concerns on where we are from a commercial perspective we are from a working capital perspective are shared by by the wider board and we have those discussions on a regular basis and be reassured that we are putting our shoulders to the wheel to make sure that we address those judiciously and deliver on the the opportunity for this business which we think is is is very significant so Thank you again, and I shall say my goodbyes until next time.

That's great. Thank you all for updating investors today. Could I please ask investors not to close the session? As you know, we automatically redirected to provide your feedback in order the management team can better understand your views and expectations. On behalf of the management team of Infinity Energy Systems, PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.