Amprius Technologies, Inc.

Looking ahead, we are increasingly optimistic about the road ahead of us, as well as our ability to meet the challenges. With technical leadership, greater battery performance, a growing book of customers, and the capacity to now support large volume shipments, we believe that we are set up for sustainable growth for the foreseeable future. We are working hard to execute our goals and we expect to carry our momentum through the end of the 2024 and into 2025. With that, I will now turn the call over to our CFO, Sandro Wallach, to review our financial results for the quarter. Sandro.

Thank you, Kang. 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 third quarter with $7.9 million in total revenue. As we have previously discussed, our total revenue is a combination of our main revenue streams, product revenue and development services and grant revenue. This quarter, $6.1 million came from our product revenue. representing a $2.7 million or 81% increase sequentially and a $3.9 million or 176% increase year-over-year. Our development services and grant revenue totaled $1.8 million this quarter, which was up from none in Q2 and up $1.2 million year-over-year. As we've discussed in the past, development services and grant revenue is non-recurring in nature leading to greater fluctuations depending on the comparison period. The combined increases in revenue this quarter were driven by the addition of new customers and grant programs. As Kang mentioned, we shipped 94 customers in the third quarter. Of these customers, only four accounted for greater than 10% of revenue, an increase from three in the second quarter, and consistent with the four customers counted in the third quarter of last year. Going forward, we will continue adding to our customer mix to diversify our revenue streams and provide more reliable product output as we get to a position of scale. Moving to our profitability metrics, gross margin was negative 65% for the quarter compared to negative 195% in Q2 of 2024 and negative 152% in the prior year period. As a reminder, we see significant gross margin variation as our product and services revenue mix fluctuates. Gross margin this quarter was also impacted by design pre-construction costs related to the Colorado facility, which will not recur. 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 third quarter were $6.2 million, a decrease of $0.2 million, or 4%, compared with Q2 2024, and an increase of $1.3 million, or 26%, from the prior year period. The sequential decrease was driven by lower share-based compensation and outside services. The year-over-year increase is primarily attributable to increased investment in sales, allocation of R&D from COGS, as development services agreements run off, and largely flat G&A. Our gap net loss for the third quarter was 10.9 million, or a net loss of 10 cents per share, with 110.4 million weighted average number of shares outstanding. In Q2 2024, net loss was negative 13 cents per share, with 97 million weighted average number of shares outstanding. Q3 2023, Net loss was a negative 10 cents per share, with 86.4 million weighted average number of shares outstanding. As of September 30, 2024, there were 92 full-time employees, up from 88 at the end of the second quarter, with those employees primarily based in our Fremont, California location. Our share-based compensation for the third quarter was 1.7 million compared to 1.9 million in Q2, and 1.1 million in the prior year period. The sequential decline was due to changes to the board of directors. As of September 30, 2024, we had 111.3 million shares outstanding, which was up 3.4 million from the prior quarter. That increase includes 3.1 million shares issued as part of the warrant exchange that reduced the total number of outstanding private warrants from 15.9 million to $0.3 million. Now turning to the balance sheet, we exited the third quarter with $35 million in net cash and no debt. Key drivers for the $11.4 million of cash we used in the quarter were $9.5 million used in operating cash flow. We continue to remain lean with a $2.5 to $3 million run rate per month, excluding transaction-related costs. Note that our Q3-24 operating cash included $2.4 million of non-recurring expenses used for the design of the Colorado facility. These expenses are projected to tail off with the completion of the construction drawings, which are substantially complete. $1.3 million used to continue the build-out of our expanded two-megawatt production line in Fremont, and $0.5 related to the payment of stock issuance costs associated with the warrant repricing offer. 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 CapEx outlook for the remainder of the year. We expect to spend another $1 million on supporting equipment to complete the two-megawatt line in Fremont, in addition to our normal operating capital requirements. Now that the designs are effectively complete for Colorado, we will continue to monitor the larger industry dynamics driving our ability to proceed further. Timing and availability of funding, along with the monitoring of the overall sector for changes in demand, supply, battery cost structure, government incentives, trade tariffs, and other considerations will influence our decision on next steps and timing. One last housekeeping item I'd like to discuss is a change to our cap table after the end of the quarter. On October 23rd, we announced that Amprius Inc., our former controlling shareholder, had voluntarily liquidated and dissolved. As a result, The shares that Amprius Inc. held were distributed pro rata per a dissolution plan approved by their board of directors. This distribution removes a controlling shareholder consideration and dispenses the shares more broadly into the hands of the original investors in Amprius Inc. Amprius Inc. also contributed to us 5.5 million common shares of Amprius Technologies. and will reimburse related expenses in exchange for our assumption of the outstanding stock options of Amprius, Inc., an aggregate of 7 million options with a weighted average exercise price of $2.10 per share. There was no operating impact to Amprius Technologies as a result of this distribution or option assumption, and we extinguished the contributed shares. The option assumption was approved by a committee of the Amperius Technologies Board of Directors comprised of solely independent and disinterested directors. That concludes my financial discussion, and I will now pass the call back to King.

Thanks, Sandra. As we look ahead, our strategy at Amperius remains unchanged. Our top priority are innovating next-generation batteries, growing our customer base, and scaling our manufacturing capability. Today, Amperes has the best performing battery for the electrical mobility market, strong revenue growth, and an impressive customer pipeline, and a gigawatt-hour scale manufacturing capacity available to us. Our technical leadership and unmatched battery performance in the industry has been validated by industrial leaders and repeated customer orders. Our concrete manufacturing strategy has also shown great results. We are already able to support our customer with over 10 million pouch battery cells and 125 million cylindrical cells annually. We also recently celebrated the launch of a dedicated ampoule lines at one of our manufacturing partners with the capacity for 800 megawatt hour of pouch sales. At the same time, we are exploring additional manufacturing partner in Asia and Europe, expanding our Fremont production capacity for CEMEX factory production, and have finalized our design for the factory in Colorado. We believe that the opportunity in front of Ampere is tremendous. Our team are more confident than ever in delivering what we have planned and promised. We look forward to closing out the year strong and heading to 2025 with increasing momentum. Over the next few months, we will also be attending several industrial and financial conferences, and we hope to see you there. Thank you for your continued support of MPS technology. We look forward to continuing to deliver on what we have planned and promised in the upcoming quarters. With that, I will turn it back to the operator for Q&A.