Amprius Technologies, Inc.

good afternoon welcome to ampereus technology's first quarter 2024 earnings conference call joining us for today's presentation are the company's ceo dr kang sun and cfo sandra wallach at this time all participants are in listen only mode following management's remarks we will open the call for questions please note that this presentation contains forward-looking statements including but not limited to statements regarding future product commercialization new customer adoption and the timing and ability of Amperius to build its large-scale manufacturing facility, expand its manufacturing capacity, scale its business, and achieve a sustainable cost structure. These statements involve known and unknown risks, uncertainties, and other important factors that may cause Amperius' results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied in such forward-looking statements. For more complete discussion of these risks and uncertainties, please refer to Amprius's filings with the Securities and Exchange Commission. Finally, I would like to remind everyone that this call is being webcast, and a recording will be made available for replay on the company's investor relations website at ir.amprius.com. In addition to the webcast, the company has posted a shareholder letter that accompanies these results, which can also be found on the investor relations website. I will now turn the call over to Amprius Technologies CEO, Dr. Kang Sung, for his comments. Sir, please proceed.

Welcome, everyone, and thank you for joining us this afternoon. On today's call, I will report on our accomplishments from the first quarter. We are also highlighting some of the upcoming milestones we are expecting for this year. Our CFO, Sandra Wallach, will then discuss our financial results for the period. After that, I will share some closing remarks before opening the call for questions. Before I give a recap of the quarter, I would like to briefly introduce Amperes to those who may be new to the company. As a reminder, here at Amperes, we develop, manufacture, and market high energy density and high power density batteries with application across all segments of the electrical mobility, including the aviation and EV industries. Across our battery portfolio, we offer unmatched performance, including batteries capable of a specific energy density of 450 W per kilo and a volumetric energy density of 1150 W per liter. 10C power capability, the extreme fast charge rate of 0% to 80% of the charge in approximately six minutes The ability to operate in a wide temperature range of minus 30 degrees Celsius up to 55 degrees Celsius. And the safety design features that enable us to pass the United States military's benchmark nail penetration test. Later last year, we achieved a third-party validation of our latest 500-watt applicator. 1300-watt-per-liter battery platform, which we expect will be ready for commercial shipment later in 2024. Each of these performance parameters is critically important to electrical mobility applications. Not only do our batteries enable certain aircraft and the vehicles to function, but they enable our customers to achieve their economic targets as well. With our belief that there are no other commercial batteries on the market that can perform at these levels today. Amperes is a silicon-anode battery technology pioneer with over a decade of development experience strong patent portfolio of over 80 issued patents and patent applications, and a long track record of commercial achievements and customer successes. Turning now to a review of our first quarter. To start 2024, in addition to driving industry-leading performance with our battery technology, We took critical steps to drive our scale-up effort and increase our output to meet the growing demand for our solutions. In January, as part of this continued push to make our products available to the electrical mobility space, we launched our all-new cycle product family to go along with our existing silicon nanowire platform. now called CEMEX. Complementary to CEMEX, which is Ampere's highest energy density performance battery offering, the cycle platform services applications that demand both high energy density and longer cycle life, offering up to 400 Wh per kilo and as many as 1,200 cycles at full depth of discharge. The cycle product family also has additional form factor flexibility, capable for both pouch and cylindrical cell form factors. This enables utilization across a broader range of applications, such as e-bike and other micro mobility market segments. In addition to having another product platform available for MPS customers, introduction of a cycle battery accelerates our revenue growth without additional capital investment and serves our customer without delay. To produce cycle batteries, we take advantage of the existing available lithium-ion battery production capacity in the industry and have two manufacturers as a bridge between now and the operation of our own large-scale manufacturing facility. These two manufacturing agreements provide us with hundreds of mega-hours of side core capacity today. Overall, CEMEX and side core are the culmination of years of work in silicon anode space and just beginning of our vision here at Amperes to transform electrical mobility. We look forward to manufacturing both the CEMEX and the Sitecore at our Brighton, Colorado facility in the future. So far, 2024 has been a huge success commercially for Amperes. In Q1, we doubled the number of customers we shipped to over Q4, 2023. shipping to 82 customers, up from 41. 52 of these shipments were to new customers across the electrical mobility sector, complementing our strong repeat customer base that includes Auto, Airbus, Teladon, FLIR, the US Army, and BAE Systems. Sitecore platform and manufacturing capacity is a primary driver of our ability to meet this market demand. In the first quarter, we shipped Sitecore product to 76 customers. As we further build out our book of customer for Sitecore, we are confident that we'll be able to continue to meet the strong demand for our batteries. where our CEMEX production approaches a large-scale capacity. As customer demand for MPS battery is accelerating, expanding production capacity is our priority. In Q1, we continued to make significant progress in ramping up our production in Fremont, California. Also recently, we complete the qualification process for our central thermal machine. which is used in the silicon annual fabrication process. We remain on track to achieve two megawatt hour production in Fremont by end of the year. We are also implementing CEMEX castle production in-house to streamline our manufacturing process. We plan to have this capacity up and running in Fremont later this year. We have continued to make important progress to our largest scale manufacturing site in Brighton, Colorado as well. We currently have completed 30% of construction design drawings and specifications for the facility. And I have taken several regulatory steps forward, including submitting our site plan and advancing all other regulatory plans and applications for the facility. As an additional step, and in response to the market's strong reaction to our cycle platform, we have updated our plans for the Brighton facility. to redesign our initial production line to be cycle-focused. We will continue to produce CEMEX out of Fremont until a second line begins production in Brighton. Looking ahead, we have already carried our momentum from the beginning of the year into the second quarter across several of our initiatives. We recently signed our first long-term manufacturing agreement with one of our two manufacturing partners to confirm our collaboration and strategic alignment. This new agreement establishes overall engagement and move us from operating transitionally to a partnership framework. Second, we have extended our partnership with several customers, including multiple purchase orders from Aalto Airbus for our CEMEX 450-hour Paquero high-energy density cell. They are continuing to use these cells in their project design firm, with CEMEX supplying the necessary power and the endurance for their stratospheric flight operations. We have also received the first production order for the US Army safe cell. And we expect to deliver them later this year. This is the first order we have received after the success completion of the development contract that we discussed during our last call. Third, we have assigned several new strategic partnerships in the second quarter. most notably with the AI bots and the staffer systems. Amperes will soon provide the side core cells to both partners, ensuring maximum power and reliability for AI bots' mission-critical operation and serving as a staffer system preferred battery cell supply. We look forward to partnering with both teams as they work on shaping the future of electric mobility. I believe that these collaborations can provide Ampere with the increase in sales, expanding market reach, and a greater market share in the high-performance battery market segment. Together, these high-profile customers and the strategic partnerships have helped strengthen Ampere's traction in our industry. Just a few weeks ago, in response to the growing global awareness of our battery, Ampere's host is the first Taiwan Battery Forum, where over 100 attendees from the industry-leading companies and institutions learned about Amperes breakthrough silicon annual battery technologies and the partnership opportunities. Fourth in April, Amperes was honored with the inaugural CleanTech Battery Company of the Year award at the Markey Intelligence and the Research Group Tech Breakthrough. This comes on the heels of the Amperes nomination to the best charges annually of the world's most innovative companies, another point of recognition for our business. While we have long known that our products are yet to be matched at the commercial level, we are proud that the industry is taking notice as well. It's clear that our recent customer expansion and the new industrial recognition signal a strong start to 2024 for Amperes. We are working hard to expand our production capacity to meet our sizeable demand, and we are confident in the path forward for Amperes. With that, we will turn the call over to our CFO, Sandra Wallach, to review our financial results for the quarter.

Sandra. Thank you, King. I would now like to spend a few minutes covering some key financial updates. As a reminder, our detailed financials can be found in our shareholder letter. We finished the first quarter with 2.3 million in total revenue. As we've previously discussed, our total revenue is the combination of two main revenue streams, product revenue and development services and grant revenue. This quarter, all 2.3 million of our revenue came from our product revenue, representing a 397% increase from the prior year period and 147% sequential increase. These increases were largely driven by shipments to 82 customers in the quarter, a significant increase for Amprius. Although our product revenue remains largely driven by customer purchase orders that can arrive at uneven times throughout the year, we have shown consistent new customer growth and diversification in recent quarters. Also, of these customers, Only three customers represented greater than 10% of revenue, a testament to our diverse customer set. As we've discussed in prior quarters, our development services revenue comes largely from large development programs that are non-recurring in nature. Moving to our profitability metrics, our gross margin was negative 190% for the quarter, compared to negative 518% in the prior year period, and negative 98% in Q4 of 2023. As a reminder, we see significant gross margin variation as our product and services revenue mix fluctuates. Also, we anticipated that factory startup costs would ramp up as we start Colorado design and pre-construction and still expect this to be the case through at least 2024. Longer term, we're confident that our GAAP gross margin will begin to normalize as we approach our capacity expansion goals. Now on to our operating expense management. Our operating expenses for the first quarter were $5.9 million, a 6% decrease from the prior year period, and flat quarter over quarter. This decrease is primarily attributable to a decrease in G&A costs that were offset by investment in R&D and sales. Our gap net loss for the first quarter was 9.9 million, or a net loss of 11 cents per share, with 90 million weighted average number of shares outstanding, compared to a net loss of 11 cents per share with 84.6 million weighted average number of shares outstanding in the prior year period. Also, as of March 31, 2024, there were 81 full-time employees, up from 80 in the fourth quarter, and 65 in the prior year period. with those employees primarily based in our Fremont, California location. Our share-based compensation for the first quarter was 1.2 million compared to 1.1 million in Q4 of 2023 and 0.7 million in the prior year period. As of March 31st, 2024, we have 92.3 million shares outstanding. Now, turning to the balance sheet, we exited the first quarter with 39 million in cash and no debt. Key drivers of our cash activity for the quarter were 9.8 million used in operating cash flow, 3.1 million used to continue our build out of our expanded two megawatt production line in Fremont, 0.8 million used for progress payments to secure our production slots for mechanical, electrical, and plumbing equipment, and 8.2 million of cash inflow added primarily through the usage of our ATM. Considering our business achievements and ongoing projects, we believe we are efficiently using capital to drive AMPRIUS forward. Before I turn the call back over to Kang, I would like to take a moment to discuss our outlook for the remainder of the year. We expect to spend another one to two million on equipment to support the two megawatt line in Fremont. This includes the necessary tools to have our cathode line up and running by the fourth quarter of this year. As Kang mentioned, we're also finalizing the design work for our Colorado facility. We expect to publicly communicate a construction cost forecast once the plan is finished. As part of our ongoing strategic planning efforts, we filed a shelf registration on Form S3 back in October of 2023, and once effective, established a new ATM facility for $100 million. Subsequent to March 31st, 2024, and through May 3rd, We have raised gross proceeds of about 2.1 million through the sale of approximately 1 million shares under the ATM facility. To support our strategic plan, we are pursuing additional funding through multiple vehicles, including equity issuances, such as warrant exercises and sales under our ATM, and non-diluted sources such as grants, loans, and incentives. With that, I will conclude the financial discussion and pass the call back to Kang.