Amprius Technologies, Inc.

Good afternoon. Welcome to Imperious Technologies presentation of its third quarter 2022 earnings call. My name is Ryan, and I will be your operator this afternoon. Joining us for today's presentation are the company's CEO, Dr. Kang Sun, and CFO, Sandra Wallach. Following management's remarks, we will open the call for questions. Please note, that this presentation contains forward-looking statements. These statements are based on imperious technology, business, and expected market opportunities and are subject to uncertainty and changes in circumstance, many of which are beyond imperious control, which may cause actual results to differ materially for those expressed or implied in such forward-looking statements. For a more complete discussion on forward-looking statements and the uncertainties related to imperious technologies, business, and expected market opportunities, please refer to its filing with the Securities and Exchange Commission, including the discussion of imperious risk factors in its 8K file on September 16, 2022. I will now turn the call over to CEO, Dr. Kang Sun, for his comments. Sir? Please proceed.

Good afternoon, everyone, and thank you for joining us today for NPS inaugural earnings call. Today is an important milestone for NPS, and we are so glad that you could join us for our first quarterly earnings call as a public company. Today, we will discuss our third quarter financial results, key business drivers, As I said, we are taking to advance our strategic plan for high volume production of our silicon nanowire anode batteries. For those new to the AMPIS story, I'd like to begin today's call by providing some background on who we are. AMPIS was founded in 2008 to commercialize the silicon nanowire anode concept that was originally developed at Stanford University. In 2014, we finalized our silicon nanowire annual structure design and its manufacturing process. In 2016, we built our first kilowatt-hour scale manufacturing line in California. Two years later, Amperes received its first purchase order from Airbus and began its journey towards commercialization. Last year, we initiated our gigawatt-hour scale manufacturing project to build a high-volume facility in the United States to meet the strong customer demand for our silicon nanowire and battery technology. In September of this year, we closed our business combination with Kensington Capital, a critical step on our roadmap to build a scale that can help fulfill market demand. we could not have found a better partner than Kensington's team. This transaction provided Amperes with access to the capital market in addition to the proceeds raised to today. That accelerated the development timeline of our gigawatt-hour scale manufacturing facility. Following the close, Kensington's Chairman and CEO, Justin Merrill, joined our board We are fortunate to continue working with Justin and be able to leverage the entire Kensington team's deeper expertise in automotive industry. As our long-term goal is to see our silicon nanowire technology become a mainstream technology with applications across all segments of electrical mobility, including the EV industry. Amperes is in the business of developing and manufacturing ultra-high energy density lithium-ion batteries based on our proprietary silicon nanowire anode technology. Our business has four distinct advantages. Unmatched technical and product performance, proven manufacturability, years of product and commercialization experience, and a team of experienced business operators with a solid track record. Today, MPS delivers commercial batteries with the highest known energy density and power density. Our batteries have 450 Wh per kilo specific energy density and 1150 Wh per liter volumetric energy density with up to 10C high power capability. A few weeks ago, we hosted a demonstration of our extremely fast charge capability in which we charged one of our batteries from 0% to 80% in six minutes. In addition, Amperes batteries offer a wide operating temperature range from minus 30 degrees Celsius to 55 degrees Celsius, which is particularly important for the aviation market that we are currently targeting. UMPRIS stands apart, and we currently do not have any competition in the commercial market at this performance level. UMPRIS is currently focusing on addressing the aviation market, which we expect will go to 50 building camp by 2025. We have a group of blue-chip aviation industry customers that are currently using our batteries in real-world situation. Among them, Airbus, which is Zephyr HEP programs, AeroVironment, and Teletransfer. Most recently, we announced a three-year cooperation agreement with the defense industry leader BAE Systems. This agreement further validates the significant potential of our silicon nanowire anode technology in rigorous area and the military applications. As BAE intends to investigate the business opportunities enabled by the use and the supply of MPS batteries in their electrical aviation product portfolio. In addition to commercial customers, The US government has also consistently shown its support for Amperes and our silicon nanotechnology. In total, we have received four grants from the US Department of Energy. We have also been awarded funding for a second multi-year development program with the United States Advanced Battery Consortium to advance the development of high energy density and the low-cost EV batteries. After a decade of the development, Amperes has developed the most advanced lithium-ion battery commercially available today. Secure T01 customers in the aviation industry demonstrated the battery manufacturability and built a strong technology roadmap. Today, the company's top priority is to quickly scale its production capacity to meet the customer demands and accelerate the growth. We have made progress on this goal in several ways. In October, we received the first high-volume silicon nanowire anode production machine from Central Therm at our California facility. This machine provides us with approximately 10 times more production capacity to serve critical customers sampling and qualification exiting 2023. Furthermore, it allows us to accelerate the development of our process for building batteries at a gigawatt-hour scale since we have been limited to the kilowatt-hour scale until this point. This expertise is necessary as we prepare to begin construction of our high-volume manufacturing facility Next, our Vice President of Infrastructure, Andrew Hui, recently came on board to spearhead our expansion efforts. Andrew brings over 30 years of facility development and management experience to Amperes, and was most recently at the Panasonic Energy of North America, working at the Tesla First Gigafactory. They will lead the development of our high-volume manufacturing facility as we begin to scale our production capacity, focusing on factory planning, facility development, and the regulatory compliance. Last month, Amtris was awarded a $50 million cost of sharing grant as a part of President Biden's bipartisan infrastructure law, which reflects our position as a pioneer in electrical mobility and exhibit the government's confidence in our technology. We believe this will be a catalyst to our production capacity expansion as this funding is focused on growing the domestic manufacturing of next generation lithium-ion batteries. With all this hard work and effort, our silicon nanowire and battery technology is a business point to scale into high volume production. We believe our technology and the products are well positioned to enable the future of electrical mobility. Our production capability is in the progress of expanding our battery performance unmatched in current market. And we have several blue-chip customers, including many others who are interested in working with us. Now, I will turn the call over to our CFO, Sandra Warlick, who will review our financial results for the third quarter. Sandra.

Thank you, Kang. I'd also like to thank our analysts and investors for joining us on this first earnings call. Our detailed financials can be found in our shareholder letter. I will spend a few minutes covering a few key topics. As Kang mentioned, we have the proprietary technology, proven manufacturability, and commercial success, so we are focusing on scaling our production capacity to meet the growing demand in these fast-moving markets. In our financials, particularly in our revenue results, you will see data points that reinforce the strength of our customer development efforts as we scale. Those results, when paired with the investments in our Fremont capacity and gigawatt scale capabilities, we believe position the company well to achieve its growth and profitability potential. We closed out the third quarter of 2022 with 0.8 million in revenue. Product revenue was 0.5 million, including nine customers sampled in total, including two leading eVTOL manufacturers. We delivered commercial quantity shipments to AeroVironment and Teledyne FLIR, and we shipped the ninth flight set to Airbus for their high-altitude pseudosatellite program with a backlog of six more sets for future deliveries. Development services revenue was $0.3 million based on the delivery of cells, and reports under contract with the U.S. Army for development of cells with gel electrolytes. For the third quarter of 2022, our GAAP gross profit margin was negative 180%. Variation in gross margin, period over period, is based on the mix of product and services. Moving now to our operating expense management, our GAAP operating expense for the third quarter of 2022 was 2.9 million. Our Q3 gap net loss was $4.2 million, or a loss of $0.06 per share. As of September 30, 2022, there were 54 full-time employees based in our Fremont, California location. Share-based compensation for the third quarter was $0.7 million. Turning to the balance sheet, we exited Q3 2022 with $73.8 million in cash and no debt, a net increase of 68.6 million from Q2 22. The key drivers of our cash activity for the quarter were 2.7 million used in operating activities, 0.5 million in capital expenditures invested in our current manufacturing facility as we are investing into opportunities to expand our footprint and accelerate our capacity to support customer qualifications and scale up. Under financing activities, we had 71.8 million net cash provided driven by proceeds received in connection with the business combination and the pipe investment net of issuance cost. For projections, we expect higher capital expenditures going forward as we continue to invest in our Fremont facility and fully build out the two megawatt capacity in Fremont, California. while in parallel starting design, site selection, and construction of our gigawatt scale facility. With the strength of our balance sheet and multiple vehicles to generate additional funding through both equity via warrants and committed equity facility and non-dilutive sources via grants, we believe we have enough cash to execute our strategic plan. With that, I will conclude the financial discussion and pass the call back to Cain.