Q4 2022 Amprius Technologies Earnings Conference Call

March 23, 2023

Speaker 1: ...

Speaker 2: Good afternoon and welcome to the Amprius Technologies conference call and webcast. It's now my pleasure to turn the call over to Greg Bribery.

Operator: Good afternoon, and welcome to the Amprius Technologies Conference Call and Webcast. It's now my pleasure to turn the call over to Greg Bradbury.

Greg Bradbury: Good afternoon. Welcome to Amprius Technologies' Q4 and Full Year 2022 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 timing and ability of Amprius to build its large-scale manufacturing facility, expand its manufacturing capacity and scale its business. These statements involve known and unknown risks, uncertainties, and other important factors that may cause Amprius' results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied in such forward-looking statements.

Speaker 3: Good afternoon. Welcome to Amprius Technologies' fourth quarter and full year 2022 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. In management's remarks, we will open the call for questions.

Speaker 3: Please note that this presentation contains forward-looking statements, including but not limited to statements regarding future product commercialization, new customer adoption, and timing and ability of Amprius to build its large-scale manufacturing facility, expand its manufacturing capacity, and scale its business.

Speaker 3: These statements involve known and unknown risks, uncertainties, and other important factors that may cause amperage results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied in such forward-looking statements. For a more complete discussion of these risks and uncertainties, please contact the This team has worked through some review results and published comments and has covered discussion of these risks and uncertainties.

Greg Bradbury: For a more complete discussion of these risks and uncertainties, please refer to Amprius' filings with the Securities and Exchange Commission, including, but not limited to, the discussion of Amprius' risk factors in its quarterly report on Form 10-Q filed on 14 November 2022. Finally, I would like to remind everyone that this conference 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 Sun for his comments. Sir, please proceed.

Speaker 3: Please refer to Ambrace's filings with the Securities and Exchange Commission, including but not limited to the discussion of Ambrace's risk factors in its quarterly report on Form 10Q filed on November 14, 2022. Finally, I would like to remind everyone that this conference call is being webcast.

Speaker 3: 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 Sun, for his comments.

Kang Sun: Welcome everyone, and thank you for joining us this afternoon. To begin today's discussion, I will give the company's background, followed by a review of our recent accomplishments before turning the call over to our CFO, Sandra Wallach, to discuss our financial results for the year in more depth. After that, I will share some closing remarks before opening the call for questions. Amprius develops and manufactures ultra-high energy density lithium-ion batteries based on our proprietary Silicon Anode technology. Our business has four distinct advantages, unmatched technical and product performance, proven manufacturability, years of product commercialization with industrial leaders, and a team of seasoned business operators with a solid track record. Our near-term goal is to scale our manufacturing with the long-term goal of becoming a mainstream battery solution. With applications across all segments of electrical mobility, including the aviation and the EV industries.

Speaker 3: Sir, please proceed.

Speaker 4: Welcome everyone and thank you for joining us this afternoon.

Speaker 4: To begin today's discussion, I will give some companies background, followed by a review of our recent accomplishments.

Speaker 4: before turning the call over to our CFO , Sandro Wallach, to discuss our financial results for the year in more depth.

Speaker 4: After that, I will share some closing remarks before opening the call for questions.

Speaker 4: MPSE develops and manufactures ultra-high energy density DC-on-mion batteries based on our proprietary silicon annual technology.

Speaker 4: Our business has four distinct advantages.

Speaker 4: unmatched technical and product performance.

Speaker 4: Pro manufactability.

Speaker 4: years of product commercialization with industrial leaders.

Speaker 4: and a team of a season.

Speaker 4: business operators with a solid track record.

Speaker 4: Our near-term goal is to scale our manufacturing with the long-term goal of becoming a mainstream battery solution.

Speaker 4: with applications across all segments of electrical mobility, including the aviation and EV industries.

Kang Sun: Over the past years, Amprius has delivered commercial batteries with the highest known energy density and power density. Our current available batteries have as much as 450 Wh/kg in specific energy density and 1150 Wh/L in volumetric energy density, with up to 10C high power capability. Our batteries are also built for the toughest operating environments with the durability to pass the United States military benchmark nail penetration test, as well as the versatility to operate in an extremely wide temperature range of as low as -30 degrees Celsius and up to 55 degrees Celsius. These features, along with extreme fast charging rates of 0 to 80% state of charge in approximately 6 minutes, set Amprius apart. It's our belief that there is no one else in the commercial market that can perform at this level.

Speaker 4: over the past years.

Speaker 4: MPS has delivered commercial batteries with the highest known energy density and power density.

Speaker 4: has delivered commercial batteries with the highest known energy density and power density. acquired more than 4,500,000 Grand and... more couldn't available batteries for

Speaker 4: have as much as 450 Wh per kilo in specific energy density.

Speaker 4: and 1150 Wp in volume metric and density.

Speaker 4: with up to 10C high power capability.

Speaker 4: Our batteries are also built for the past operating time.

Speaker 4: environment.

Speaker 4: with your ability to pass the United States military benchmark Neo-Penetration tab

Speaker 4: as well as the versatility to operate in extremely wide temperature range.

Speaker 4: of as low as minus 30 degrees Celsius and up to 55 degrees Celsius.

Speaker 4: These features, along with extreme fast charging rates of 0 to 80% stay off the charging in approximately 6 minutes.

Speaker 4: That empties the part.

Speaker 4: It is our belief that there is no one else in the commercial market that can perform at this level.

Kang Sun: In addition, we have amassed over 80 patents and over a decade of know-how in silicon anode technology and manufacturing. Moving to our review, 2022 was arguably the most transformational year for Amprius since our funding in 2008. It was also the year of many firsts for our business as we execute our strategy to transform electrical mobility with a focus on aviation applications. I will now take a minute to highlight some of our key milestones from the past year. As I noted a few minutes ago, Amprius has a leading position in the emerging energy storage sector with disruptive technology. We entered 2022 with our first commercial shipments of 450 Wh/kg and the 1150 Wh/L products for high-performance aviation.

Speaker 4: In addition, we have amassed over 80 patents and over a decade of little help in silicon and with hydrology and in manufacturing.

Speaker 5: Moving to our review.

Speaker 4: 2022 was arguably the most transformational year for MTS since our funding in 2008.

Speaker 4: It was also the year of many first-flower business as we execute our strategy to transform electrical mobility with the focus on aviation applications.

Speaker 4: I will now take a minute to highlight some of our key milestones.

Speaker 4: I will now take a minute to highlight some of our key milestones from the past few years.

Speaker 4: As a note a few minutes ago, Amperes has a leading position in the emerging energy transformation sector with disruption technology.

Speaker 4: We entered 2022 with our first commercial shipment of 450 W per kilo and 1150 W per liter products for high-performance aviation.

Kang Sun: We manufacture the only batteries on the market that can produce these specifications, and we are constantly working to improve the performance and capabilities of our technology. As an example, earlier today we announced that our upgraded 500 Wh/kg-capable batteries, although not yet available to the market, have had their capabilities verified by independent third parties, which is a crucial step in the product development timeline. Demand for this next generation of the battery is growing, and we are making great progress. Based on current estimates, we expect to be able to ship prototypes to selected customers before end of 2023. We also complete several important demonstrations of our technology's capability in 2022.

Speaker 4: We manufacture the only batteries on the market that can produce these specifications.

Speaker 4: And we are constantly working to improve the performance and capabilities of our technology.

Speaker 4: As an example, earlier today we announced that

Speaker 4: I will upgrade 500 W per kilo, capable batteries.

Speaker 4: or those not yet available to the market.

Speaker 4: have had their capabilities verified by independent third parties, which is a crucial step in the product development timeline.

Speaker 4: demand for this next generation of the batteries growing.

Speaker 4: and we are making great progress.

Speaker 4: based on trends that this meets.

Speaker 4: we expect to be able to shape prototypes to select customers before the end of 2023. We also completed several important demonstrations of our technology capability in 2022. In October , we successfully exhibited our battery's extreme fast charging ability.

Kang Sun: In October, we successfully exhibit our battery's extreme fast charging ability through a video demonstration, where we were able to achieve a rate of 0 to 80% state of charge in approximately six minutes. Our performance is ahead of the United States Advanced Battery Consortium 2025 goal of 0 to 80% charge in sub-15 minutes. In practice, this will allow the vehicles and other applications to operate much more efficiently with less downtime. Additionally, in November, we announced that an independent third-party testing lab validated our 390 Wh/kg polymer electrolyte cell successful testing of the United States military performance specifications nail penetration test. This test is used to determine the feasibility of a specific product in combat scenarios and is an important benchmark to be considered for military applications.

Speaker 4: through a video demonstration where we were able to achieve a rate of 0 to 80 percent sales of the charge in approximately six minutes.

Speaker 4: Our performance is ahead of the United States Advanced Battery Consortium.

Speaker 4: performance is ahead of the United States Advanced Battery Consortium 2025 goal.

Speaker 4: of zero to 80.

Speaker 4: percentage in stop 15 minutes.

Speaker 4: In practice, this will allow the vehicles and other applications to operate much more efficiently with less downtime.

Speaker 4: performance specifications, new transfusion test.

Speaker 4: This test is used to determine the feasibility of a specific product in complex scenarios.

Kang Sun: We have a unique opportunity to provide a significant energy density performance increase of nearly 100%, doubling the runtime for mobile powered devices without increasing the overall weight of the wearable batteries for our soldiers. Moving to our business development efforts. 2022 was a successful sales year for our aviation and defense segments. Amprius is deeply involved with the aviation and the EVTOL markets because we produce high energy density, lightweight batteries. The single most important issue in EVTOL performance is battery weight, which is why our batteries are in such high demand. Lighter and denser batteries means greater and sustained range, while faster charge turnaround time means increased flight time. To that end, we signed new multi-year agreements with several aviation industry leaders like AeroVironment, Teledyne FLIR, and BAE Systems, and extend our existing commitments with Airbus, the U.S. Army, and the USABC, among others.

Speaker 4: and is an important benchmark to be considered for military applications.

Speaker 4: We have a unique opportunity to provide a significant energy density performance increase of nearly 100%

Speaker 4: doubling the run time for mobile powered devices.

without increasing the overall weight of the variable batteries for our soldiers.

without increasing the overall weight of the wearable batteries for our soldiers. Moving to our business development efforts.

2022 was a successful sales year for our aviation and defense segments. MPS has deep enrolled with aviation and EVTOL market because of the

we produce high-end identity lightweight bedrooms.

Single most important issue in EVTOL performance is battery weight.

which is why our batteries are in such high demand.

lighter and denser batteries means greater and subtended range

while faster charge turnaround time means

increased flight time.

We signed new multi-year agreements with several aviation industry leaders like AirVailment, Teledyne, Flir, and BAE Systems, and extend our existing commitments with Airbus, the US Army, and the US ABC, among others.

Kang Sun: I will highlight some of those agreements now. In July, we announced a three-year deal with Teledyne FLIR to supply our batteries as they develop their unmanned aircraft system products. Also in October, we entered into a three-year cooperation agreement with BAE Systems to develop lightweight, high-energy batteries specifically for electrically powered flight applications. In May, we were awarded funding for the second multi-year development program in the United States Advanced Battery Consortium for the development of a low-cost EV battery. This consortium is between Ford, GM, and Stellantis, and is enabled by cooperative agreements with the United States Department of Energy. Their mission is to develop electrochemical energy storage technologies that advance the commercialization of next-generation electrified vehicle applications. I'm pleased to announce that we officially delivered the first set of the reference cells in Q4 2022.

I will highlight some of the agreements now.

In July , we announced a three-year deal with Paladine Flir to supply our batteries as they develop their unmanned aircraft system products.

Also in October , we entered into a three-year cooperation agreement with the BAE Systems to develop lightweight, high-energy batteries specifically for electrically powered flight applications.

In May, we were awarded funding for the

for the second multi-year development program in the United States Advanced Battery Consortium for the development of a low cost EV battery.

This causal zone is between Ford, GM, and Ford.

is between Ford, GM and Steneti.

and is enabled by cooperative agreements with the United States Department of Energy.

Their mission is to develop electrochemical energy storage technologies that advance the commercialization of next-generation electrified vehicle applications.

I'm pleased to put along steps we officially delivered the first set of reference cells in the fourth quarter of 2022.

Kang Sun: All together, these new wins and opportunity expansion amount to a 65% year-over-year boost in battery shipments. We believe our successful early efforts are now driving a positive flywheel effect, leading to orders from new customers and extension orders from existing customers. As we think about our goals for the next several years, our primary focus is on expanding capacity to meet demand and ultimately achieve a sustainable cost structure at scale. We made several strategic moves in 2022 that put us on a clear path to achieve these goals. In September, we closed our business combination with Kensington Capital Acquisition Corp. IV to provide us with greater access to capital via the public market. Through that process, we also raised $70 million in cash net of expenses and added a strategic customer to our investor base in AeroVironment.

These new wings and the opportunity expansion amount to a 65% year-over-year boost in battery treatment.

We believe our successful early efforts are now driving a positive flywheel effect.

leading to orders from the new customers and extension orders from existing customers.

As we think about our goals for the next several years, our primary focus is on expanding capacity to meet demands and ultimately achieve a sustainable cost structure at scale.

We made several strategical moves.

in 2022 that put us on a clear path to achieve these goals.

That put us on a clear path to achieve these goals. In September .

We closed our business combination.

with the Kensington Capital Acquisition Corp. for to provide us with

greater asset to capital via the public market.

So that's the process.

We also reached the 17 units in cash net of expenses

Kang Sun: We could not have asked for a better partner than the Kensington team and have continued to work closely alongside them as we execute on our strategy. More recently, we put in place a committed equity facility which allows us to access up to $200 million of additional funding. After a competitive process, we were selected to receive two cost-sharing grants from the United States Department of Energy in October 2022. The first is a $1 million cost-sharing grant from the DOE's Advanced Manufacturing Office, specifically for the acceleration of development of mass production process we use for our silicon anode. This process, based in our Fremont facility, includes a deposition system presently used in solar cell manufacturing.

and add a strategic customer to our investor base in environment.

We could not have asked for a better partner.

than the Kensington team and have continued to work closely alongside them as we execute our strategy.

More recently, we put in place a commit equity facility which allows us to assess up to 200 million of additional funding.

after a competitive process

We will select to receive two cost-sharing grants from the United States Department of Energy in October of 2022.

The first is a one million cost sharing grant from the DOE's Advanced Naturalization Office.

Specifically for the acceleration of the development of mass production process we use for our critical and. Help.

This process, based on our Fremont facility, includes a deposition system presently used in solar cell manufacturing.

Kang Sun: The second is a $50 million cost-sharing demonstration grant selected for negotiation of the award from the DOE's Office of Manufacturing and Energy Supply Chains. We are among the first set of companies to be selected for negotiation of the awards to receive funding from President Biden's bipartisan infrastructure law to expand the domestic manufacturing of batteries. To that end, in October, we received the first large-scale anode production machine from centrotherm, which is now being installed in our Fremont facility and is expected to increase our capacity for silicon anode production to approximately 2 megawatts exiting 2023. To meet this greater production output, we recently expanded our leased facility in Fremont, California, effectively doubling our footprint in that location.

The second is a 50 million cost sharing demonstration grant selected for negotiation of the award from the DOE's office, manufacturing and energy supply chain.

We are among the first set of the company to be selected for negotiation of the awards to receive funding from President Biden's bipartisan infrastructure law to expand the domestic manufacturing of factories.

Who stays?

In October , we received the first...

largest scale annual production machine from Centro Therm, which is now being installed in our Fremont facility.

scale annual production machine from Centrotherm, which is now being installed in our Fremont facility under ESET.

Expect to increase our capacity for silicon anode production to approximately 2 MW exiting 2023.

To meet this greater production output, we recently expanded our lease facility in Fremont, California, effectively doubling our footprint in that location.

Kang Sun: Our expansion in Fremont is planned to improve our high volume manufacturing processes and increase our capacity by 10x, which will serve strategic aviation customers' increasing needs and support sampling and qualification projects with new customers who are currently in backlog. This takes me to our more exciting news. Early this month, we announced the selection of a site in Brighton, Colorado, as a location for our 775,000 sq ft net production facility. The selection of the Colorado for our gigawatt scale factory marks an important milestone for Amprius. We worked closely with the State of Colorado, the Colorado Economic Development Commission, Adams County, and the City of Brighton to align on terms that are mutually beneficial, which include a comprehensive incentive proposal.

increase our capacity by 10x, which will serve strategical

Asian customers increasing needs.

and support sampling and qualification projects with new customers who are currently in backlog.

This takes me to our more exciting news.

Early this month, we announced the selection of a site in Brighton, Colorado as a location for our 775,000 square foot nest production facility.

The selection of the carado for our Kekoa scale factory

Masks are important milestones for amperes.

We worked closely with the State of Colorado.

closely with the state of Colorado.

Economic Development Commission as a county and the City of Brighton to allow terms that are mutually beneficial.

Kang Sun: The initial phase of our build-out of the existing facility will provide a potential of up to 5 GWh, and is also expanded to create over 330 new jobs. For the subsequent phases, the site has expansion capability for up to a total potential manufacturing capacity of 10 GWh. This site also holds a few advantages over our other potential locations. Notably, it's already equipped with the electrical power and existing structural layout needed for a gigawatt-scale lithium-ion battery factory, which will reduce build-out costs and time to market, with a goal of being operational in 2025. Also, Brighton is closer to some of our material distributors in the northwestern US, which we expect will lower operational costs over the long term. Lastly, our commitment to Colorado allows us to establish our largest scale operations here in the United States.

which include a comprehensive incentive proposal. The initial phase of our build-out of the existing facility will provide a potential of up to 5 GWh.

and it also expanded to create over 330 new jobs. For the subsequent phases.

The faith has the expansion capability for up to a total potential manufacturing capacity of 10 GWh.

This side also holds.

few advantages over our other potential locations.

Motorbody is already equipped with the electrical power and existing structural layout.

Need for gigawatt scale lithium ion battery factory

which will reduce build-out costs and time to market with a goal of being operational in 2025.

Also, our brighten is closer to some of our material distributors in the northwestern U.S., which we expect will lower operational costs over the long term.

Lastly, our commitment to Colorado allows us to establish our largest scale operation here in the United States. MPS batteries will be designed and made in the US.

Kang Sun: Amprius battery will be designed and made in the US. This new facility will transform our long-term production capabilities. In the near term, we will continue to develop and shape cutting-edge products from our Fremont facility while we refine our manufacturing processes to further de-risk the handoff of our mass production products to Brighton in the coming years. To help with this transition, we made a strategic decision to form two new business units, Amprius Lab and Amprius Fab. Amprius Lab, located in Fremont, will focus on advanced battery technology products and manufacturing process development. While Amprius Fab, located in Brighton, will focus on large-scale fabrication of silicon anode batteries. To support this transition, Jon Bornstein, currently the company's COO, will take a new role to lead Amprius Lab as the division business unit president. In the interim, I will serve as acting president of Amprius Fab.

This new facility will transform our long-term production capabilities.

In the near term, we will continue to develop and shape the future.

cutting edge products from our Fremont facility while we refine our manufacturing processes.

products from our Fremont facility while we refine our manufacturing processes to further de-risk.

the handle of our mass production products to brighten.

in the coming years.

years to help with those transition.

We made a strategic decision to form two new business units.

Ampris lab and AmprisFED. Ampris lab located in Fremont will focus on advanced advanced technology products and the manufacturing process development.

For our M-PIS fab, located in Brighton, we will focus on large scale fabrication of silicon panel batteries.

While MPSAB, located in Brighton, will focus on large-scale fabrication of silicon anode batteries. to support this transition.

John Bournstein, currently the company's COO, will take a new role to lead Andrei's lab as the division business unit president.

Kang Sun: I have one final update before I turn the call over to Sandra. One of the areas which I'm most proud is the team we have built. Over the last several months, we have added critical roles to lead our efforts to scale. In my acting president role for Amprius Fab, I'm working with our new Vice President of Infrastructure, Andrew Huie, who joined us last September. Andrew brings over 30 years of facility development and management experience, and most recently served as the director of facilities at Panasonic Energy of North America. He will be spearheading our efforts to scale production capacity, focusing on factory planning, facility development, and regulatory compliance. With our leadership team in place, we believe that we are well-positioned to execute on our growth strategy.

In the interim, I will serve as acting president of AmprisFEP.

I have one final update before turn the call over to Sandra.

One of the areas which I am most proud of is the team we have built. Over the last several months.

We have added critical roles to lead our efforts to scale.

In my acting president role for Ampere SPED, I'm working with our new president of infrastructure, Andrew Huiz, who joined us last September . Andrew brings over 30 years of facility development and management experience.

and most recently served as the Director of Facilities and the Panathenica Energy of North America.

They will be spearheading our efforts to scale production capacity, focusing on factory planning, facility development, and regulatory compliance.

With our leadership team in place, we believe that we are well positioned to execute on our growth strategy.

Kang Sun: With that overview complete, I will now turn the call over to our CFO, Sandra Wallach, to review our financial results for the full year. Sandra?

With that overview complete.

I will now turn the call over to our CFO , Sandra Orlick, to review our financial results for the full year. Sandra. Most recently, with my first call out for innovation, I recently avoidance from B Mitsubishi

Sandra Wallach: Thank you, Kang. I would now like to spend a few minutes covering some key updates. As a reminder, our detailed financials can be found in our shareholder letter. As Kang mentioned, we believe that we have the proprietary technology in place and that we have shown consistent manufacturability and commercial success. We've been shipping commercial products since 2018, so our focus today is not on commercializing, but is instead 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. We believe that those results, especially when paired with our investments in both our Fremont capacity and gigawatt hour scale capabilities, position the company well to achieve its growth and profitability potential.

Thank you, Kang. I would now like to spend a few minutes covering some key updates. As a reminder, our detailed financials can be found in our shareholder letter.

As Kang mentioned, we believe that we have the proprietary technology in place.

and that we have shown consistent manufacturability and commercial success.

We've been shipping commercial products since 2018, so our focus today is not on commercializing but is instead 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.

We believe that those results, especially when paired with our investments in both our Fremont capacity and gigawatt hour scale capabilities, position the company well to achieve its growth and profitability potential.

Sandra Wallach: We closed out 2022 with $4.4 million in revenue. Product revenue was $2.4 million, including over 25 new customers to which we shipped batteries within calendar 2022. Within that set of new customers, 4 are leading EVTOL manufacturers and 2 are global battery pack suppliers for the aviation sector. Also, we delivered commercial quantity shipments to AeroVironment and Teledyne FLIR and completed 2 flight sets for Airbus's HAPS program with a backlog of 6 more sets for future delivery still pending. Development services revenue totaled $1.8 million, driven by both the delivery of cells and the timing of other deliverables under multiple contracts. We also recognized the first portion of the $1 million DOE cost-sharing grant revenue, which was $0.2 million. For 2022, our GAAP gross profit margin was -123%.

We closed out 2022 with $4.4 million in revenue. Product revenue was $2.4 million, including over 25 new customers to which we shipped batteries within calendar 2022. Within that set of new customers, four are leading eVTOL manufacturers and two are leading EVTOL manufacturers.

our global battery pack suppliers for the aviation sector. Also, we delivered commercial quantity shipments to AeroVironment and Teledyne FLIR and completed two flight sets for Airbus' HAPS program with a backlog of six more sets for future deliveries still pending.

Development services revenue totaled $1.8 million, driven by both the delivery of sales and the timing of other deliverables under multiple contracts.

We also recognize the first portion of the $1 million DOE cost-sharing grant revenue, which was $0.2 million.

Sandra Wallach: Our gross margin displays variations period over period based on the mix of products and services. Now moving to our operating expense management. Our GAAP operating expenses for 2022 were $12.6 million, with higher G&A expenses in Q3 and Q4 due to increased public company cost. Our 2022 GAAP net loss was $17.3 million, or a loss of $0.24 per share. Our shares outstanding at December 31, 2022 were 84.6 million, with 71.3 million weighted average shares of common stock outstanding for the year. As of December 31, 2022, there were 59 full-time employees, primarily based in our Fremont, California location. Share-based compensation for 2022 was $2.7 million.

For 2022, our GAAP gross profit margin was negative 123%. Our gross margin displays variations period over period based on the mix of products and services.

Now moving to our operating expense management, our gap operating expenses for 2022 were $12.6 million with higher G&A expenses in Q3 and Q4 due to increased public company cost.

Our 2022 gap net loss was $17.3 million or a loss of $0.24 per share.

Our shares outstanding at December 31, 2022 were $84.6 million with 71.3 million weighted average shares of common stock outstanding for the year.

As of December 31, 2022, there were 59 full-time employees primarily based in our Fremont, California location. Air Base compensation for 2022 was $2.7 million.

Sandra Wallach: Turning to the balance sheet, we exited 2022 with $69.7 million in cash and no debt, a net increase of $58.2 million from December 31, 2021. The key drivers of our cash activity for the year were $13.9 million used in operating activities, $1.5 million in capital expenditures, which represents our investment in our current manufacturing facility, as well as in opportunities to expand our footprint and accelerate our capacity to support customer qualifications and scale up. $73.6 million net cash provided by financing activities driven by proceeds received in connection with the business combination and PIPE investment, net of issuance costs, plus proceeds from the exercise of stock warrants and options.

Turning to the balance sheet, we exited 2022 with $69.7 million in cash and no debt, a net increase of $58.2 million from December 31, 2021.

The key drivers of our cash activity for the year were 13.9 million used in operating activities, 1.5 million in capital expenditures, which represents our investment in our current manufacturing facility, as well as an opportunity to expand our footprint and accelerate our capacity to support.

customer qualifications and scale-up, 73.6 million net cash provided by financing activities, driven by proceeds received in connection with the business combination and pipe investment, net of issuance costs, plus proceeds from the exercise of stock warrants and options. Moving to our outlook, we expect to continue to be limited by manufacturing capacity until we...

Sandra Wallach: Moving to our outlook, we expect to continue to be limited by manufacturing capacity until we exit 2023 with the new 2MW capacity coming online. Regarding revenue, we have several ongoing development services programs with performance obligations that we expect to complete within 2023, which means that we expect increased revenue recognition weighted more heavily towards the latter part of the year. We expect that our G&A costs will continue at the higher rate exiting 2022, noting additional public company expenses. We will continue to be lean on other operating expenses, strategically adding critical mass to the new business units that we announced and allocating the majority of our capital to scaling up our manufacturing.

We expect that our G&A costs will continue at the higher rate exiting 2022, noting additional public company expenses.

We will continue to be lean on other operating expenses, strategically adding critical mass to the new business units that we announced, and allocating the majority of our capital to scaling up our manufacturing.

Sandra Wallach: We expect higher capital expenditures going forward as we continue to build out the 2MW capacity in Fremont, California, while we in parallel design and construct our newly announced Brighton, Colorado GWh-scale facility. Our spending pattern is dependent on several factors outside of our control, including the timing of approval for rezoning for the Colorado site. We will provide more specific projections as we have additional information to share. Also, we expect that we will continue to have strong support from the US Inflation Reduction Act as we access production tax credits at the anode and cell levels. In addition, we have received over $10 million in state and local incentives packages relating to our GWh-scale facility, which is the result of significant partnerships built in Colorado through our selection process.

And we expect higher capital expenditures going forward as we continue to build out the two-megawatt capacity in Fremont, California, while we in parallel design and construct our newly announced Brighton, Colorado gigawatt-hour scale facility.

Our spending pattern is dependent on several factors outside of our control, including the timing of approval for rezoning for the Colorado site, so we will provide more specific projections as we have additional information to share.

Also, we expect that we will continue to have strong support from the U.S. Inflation Reduction Act as we access production tax credits at the anode and cell levels. In addition, we have received over $10 million in state and local incentive packages relating to our gigawatt scale facility.

Sandra Wallach: We believe that these tailwinds will further enhance our economics as we accelerate our scale to meet our massive market. With the strength of our balance sheet and multiple vehicles to generate additional funding through both equity, such as warrants and our committed equity facility, and non-dilutive sources such as grants, loans, and incentives, we believe we will have enough cash to execute on our strategic plan. With that, I will conclude the financial discussion and pass the call back to Kang.

which is a result of significant partnerships built in Colorado through our selection process.

We believe that these tailwinds will further enhance our economics as we accelerate our scale to meet our massive market.

With the strength of our balance sheet and multiple vehicles to generate additional funding to both equity, such as warrants in our committed equity facility, and the non-dilutive sources such as grants, loans, and incentives, we believe we will have enough cash to execute on our strategic plan.

Kang Sun: Thanks, Kang Sun. I'd like to re-emphasize a few key points before closing. First, today, we have a market leading technology and position in aviation that are reflective of our unmatched performance in real-world applications. Over the past year, we demonstrate extreme fast charging capability, enhanced our battery specific energy density from 450 Wh/kg to 500 Wh/kg, and successfully passed the key performance test important to future work with US government. Second, we are building out the scale to serve tremendous demand in the US and to support US-based supply chain resiliency. Exiting 2023, we will further roll out our large scale manufacturing process and parameters with the 2MW pilot line coming up in our Fremont, California facility.

With that, I will conclude the financial discussion and pass the call back to King.

Thanks, Dangju. I'd like to re-emphasize a few key points before closing.

I'd like to re-emphasize a few key points before closing.

Today, we have a market-leading technology and position in aviation that are reflective of our unmatched performance in real-world applications.

have a market-leading technology and position in aviation that are reflective of our unmatched performance in real-world applications. Over the past few years, we have been working on

We demonstrate extreme fast charging capabilities, enhanced our battery specific energy density from 450 to 500 Wha. And successfully passed the key performance test important to future work with US government.

Second, we are building up the skill to

So tremendous demand in the US and to support US based supply chain resiliency.

Exiting 2023, we will further pull out our large-scale manufacturing process and parameters with 2 MW pylons coming up in our Fremont, CA facility.

Kang Sun: We are also now moving swiftly to prepare to build out our gigawatt-scale facility in Brighton, Colorado for the first 500MW demonstration program with the United States Department of Energy. Third, we are continuing to build a pipeline of blue-chip customers to meet our planned expansion efforts, which have us operating at a scale of hundreds of MW exiting 2024. As we look to the rest of 2023, our strategy and focus at Amprius remains unchanged. We have a tremendous opportunity ahead with the product portfolio that positions us to both growth in aviation market and expand it to other industries, taking batteries with stronger performance and faster charge time. We are continuing to build on our early lead through technological advancement and strategic partnerships.

We are also now moving swiftly to prepare to build up our SGWA skills.

facility in Brighton, Colorado, for the first 500 megawatt administration program with the United States Department of the Energy.

Third, we are continuing to build a pipeline of Bluetooth customers to meet our planned expansion efforts.

which have us operating at a scale of hundreds of megawatts existing 2024.

As we look to the rest of 2023,

Our strategy and focus at Ampere remains unchanged. We have a tremendous opportunity ahead with the product portfolio that positions us to boost growth in aviation market and expand to other industries, taking batteries with stronger performance.

and faster charge time. We are continuing to build our early lead through technological advancement and strategic partnerships.

Kang Sun: Through the private and the public sector, we now have the capital and are building the capacity to become a leading commercial provider in the sustainable mobility sector. Finally, we have the team in place to execute our mission. Thank you for your continued support of Amprius Technologies. With that, I will turn it back to the operator for Q&A.

Through the private and the public sector, we now have the capital to

and building the capacity to become a leading commercial provider.

in the sustainable mobility sector.

the biomodility sector.'S list?

we have the team in place to execute our mission. Thank you for your continued support of MPS Tagalogies.

Operator: Thank you. We'll now be conducting a question and answer session. If you'd like to be placed into question queue, please press star one on your telephone keypad. We ask you please ask one question, one follow-up, then return to the queue. One moment please while we pull for questions. Once again, that's star one to be placed into question queue. Our first question today is coming from Colin Rusch from Oppenheimer. Your line is now live.

With that, I will turn it back to the operator for Q&A.

Thank you. We'll now be conducting a question and answer session. If you'd like to be placed into question queue, please press star 1 on your telephone keypad.

We ask you please ask one question one follow-up then return to the queue

One moment, please, while we pull for questions. And once again, that's star one to be placed in the question queue. Our first question today is coming from Colin Rush from Oppenheimer. Your line is now live. Thanks so much, guys. And congratulations on all the progress. We're really glad to see you guys get that award this week with the battery show. You know, Kang, as you started installing the megawatt tools and…

Colin Rusch: Thanks so much, guys. Congratulations on all the progress. You know, really glad to see you guys get that award this week with the battery show. You know, Kang, as you have started installing the megawatt tools and evaluating them, can you talk about any surprises, either positive or negative, that you're seeing from the tools or the installation at this point?

Kang Sun: At this point, we already powered the tool in 3 months. This centrotherm tool. We also try to tune the source, because this thing, we need to work with the supplier to get the deposition source adjusted. We expect sometime in summer, late summer, early fall. Okay. These two will be fully in operation. This particular tool, okay, for Silicon Anode growth will be fully in operation.

tune the source because this thing we need to work with the supplier to get the deposition source adjusted. We expect sometime in summer, late summer, early fall. This particular tool for silica nanowire growth.

Colin Rusch: Okay. That's tremendous. You know, in terms of the selection of Colorado, you know, obviously, you know, the building site has some advantages, but can you talk a little bit more about supply chain advantages in terms of location as well as hiring opportunities? Because there seems to be, you know, potentially some efficiencies that you guys are gaining by choosing this location.

will be fully in operation. Okay, that's tremendous. And then, in terms of the selection of Colorado, obviously the building site has some advantages, but can you talk a little bit more about supply chain advantages in terms of location as well as hiring opportunities, because there seems to be potentially some efficiencies that you guys are gaining by choosing this location.

Kang Sun: Yeah. The most obvious one, of course, is close to our silane source. Silane today is manufactured in the state of Montana. Colorado compared to the other state, we looked Georgia, Texas. Now we select Colorado. Now, this is probably the most, you know, visible supply chain advantage. Now, in addition to that, Colorado's weather is much drier. That is very important for us. I think the most important thing is Colorado. They have sufficient power for us. You know, as a battery manufacturer, we cannot afford to have a power disruption. They almost guaranteed the power supply. The current power supply already adequate for our phase one.

Yeah, the most obvious one, of course, is close to our saline source. Saline today is manufactured in the state of Montana. So Colorado compared to the other states, we looked at Georgia, Texas, and now we see Colorado. This is probably the most visible supply chain advantage.

Now in addition to that and the Colorado's weather is much drier, that is very important for us. I think the most important thing in Colorado, they have sufficient power for us. As a factory manufacturer, we cannot afford to have power disruption. So they almost guarantee the power supply.

Colin Rusch: Okay. That's super helpful. Just a final one with the introduction of the new product and the validation by the third party. You know, I guess, can you talk about, you know, what your customers are looking for and in terms of incremental validation on that before you start to see some orders? Or is it really just a capacity issue for you guys right now on that product, given the performance that you've been able to demonstrate?

the current power supply already adequate for our phase one. Okay, that's super helpful. And then just a final one with the introduction of the new product and the validation of the third party. Can you talk about what your customers are looking for in terms of incremental validation?

Kang Sun: Yeah. We have capacity issue with a lot of customers, a lot of inquiries.

Kang Sun: We have inquiries from industrial players, even from the government, right? We don't have enough capacity to satisfy their demand. That's the one challenge for us. That's why the capacity expansion is our priority. The second demand from the customer, of course, we are currently focusing on aviation segment. Aviation segment, so far, we are the only one can provide high energy, high power batteries. Early today, we announced the 500 Wh/kg. That's the battery the Airbus has for when they really need it to make second generation products work. We have capacity challenge. At the same time, you know, we have customer demand on energy and the power. Okay.

queries from industrial players, even from the government, but we don't have enough capacity to satisfy their demand. That's one challenge for us. That's why capacity expansion is our priority.

The second demand from the customer, of course, we are currently focusing on aviation segments. So aviation segments, so far we are the only ones that can provide high energy, high power batteries.

Already today we announced the 500-hour kilo and that's the battery the Airbus has for when I really need it to make a second generation product work.

So we have a capacity, a challenge at the same time. You know, we have customer demand from energy.

Kang Sun: When I say energy and the power, Amprius today probably the only company they can get, okay, high energy, high power. I have not seen other battery can give you. Okay. Thanks so much, guys.

and the power okay the energy and the power i'm pleased today probably the only company we can get okay high energy high power i have not seen other battery can give you

Operator: Thank you. As a reminder, that's star one to be placed into question queue. Our next question is coming from Chris Souther from B. Riley. Your line is now live.

Thanks so much, guys.

Thank you. As a reminder, that's star one to be placed in the question queue. Our next question is coming from Chris Saldor from B-Riley. Your line is now live.

Chris Souther: Hey, guys, thanks for taking my questions here. Maybe just touch on the Colorado facility. You called out in the letter a rezoning process that you're going through there. Anything you'd share about that process? And how we should think about, you know, the timing, assuming you get clarity on that over the next, you know, couple weeks, months, whatever. And then, you know, the overall capital needs expected through the end of next year. Any update there, given the plans appear to be pretty solidified in Colorado?

Hey guys, thanks for taking my questions here. Maybe just touch on the Colorado facility. You called out in the letter a rezoning process that you're going through there. Anything you care about that process and how we should think about the timing, assuming you get clarity on that over the next, you know.

couple weeks, months, whatever, and then the overall capital needs expected through the end of next year. Any update there given the plan to be here to be pretty solidified in Colorado.

Kang Sun: Yeah, I can answer the timing issue, and then timing question, then Sandra can elaborate more on the financing. We are currently working with the regulatory authorities. I think this is the most time-consuming part of this project. I'm currently sourcing the production line, and we have now lined up. I believe our production line can be delivered on time. Construction discussion went well. We are planning to have this construction start late summer and early fall. It took us about 18 months to get the building retrofitted, then have our production line installed.

Yeah, I can answer the timing issue and then a pending question and Sanjur can elaborate even more on the financing.

So we are currently working with the regulatory authorities. I think that this is the most time consuming part of this project.

I'm a currently source of the production line and we have never lined up. I believe our production line can be delivered on time Construction discussion went well If we are planning to have this construction start late summer and early fall.

So it took us about 18 months to get the to get building retrofit and have our production line installed.

Chris Souther: Got it. Any update on the capital, you know, expectations through the end of next year, you know, given, you know, I think we've probably got a pretty good idea of, you know, your expected costs at this point, you know, given the site selection and all that.

And then any update on the capital expectations through the end of next year given I think we've probably got a pretty good idea of your expected cost at this point given the site selection and all that.

Sandra Wallach: Yeah. That's a great question. Our production equipment capital needs are still in the $120 to 150 million per gigawatt. That's the total cost without government grant offsets. We're estimating possibly another $100 million on construction TI. Somewhere in total between $220 and 250.

Yeah, so that's a great question. So our production equipment capital needs are still in the 120 to 150 million per gigawatt. That's the total cost without government grant offsets. And we're estimating possibly another...

100 million on construction and TI. So somewhere in total between 220 and 250.

Chris Souther: Got it. Okay. That's really helpful. On the customer side, it seems like you know, you guys are continuing to add new customers testing. You know, maybe you could just talk a little bit more about some of the demand end segments. Aside from USABC, are there any other non-aerospace, you know, defense type customers in there? And then maybe within aerospace, curious if you could talk about you know, either size or you know, use cases within that kind of broader sector to give us some kind of breakdown around you know, the types of demand you're seeing out there.

Got it. Okay. That's really helpful. And then on the customer side, it seems like you guys are continuing to add new customers testing. Maybe you could just talk a little bit more about some of the demand end segments. Aside from US ABC, are there any other non aerospace companies out there?

defense set customers in there and then maybe within Airspace. Curious if you could talk about either size or use cases within that broader sector to give us some kind of breakdown around the types of demand you're seeing out there. We are working with...

Kang Sun: We are working with, of course, most of our customer are aviation battery customers. At the same time, we have been last few years engaging with non-aviation battery customers, primarily in the electric vehicle battery space. Because we don't have a large format and production line at this time, so we only can stay at the evaluation stage. At this phase, I would call it the technical exchange phase. As you know, the USABC award us the grant this twice, ask us to proceed the low cost, high energy density electric vehicle. We also have interaction with the other OEM, EV OEMs, but at this time, still at a technical exchange phase.

Of course, most of our customer aviation battery customers, at the same time, we have been for the last few years engaging with non-aviation battery customers primarily in the electrical vehicle battery space.

Because we don't have a large format production line at this time, so we only can see at the evaluation stage. At this phase I would call it the technical exchange phase.

As you know, the USABC awarded us.

as you know the USABC award us the grant is twice.

ask us to proceed the low-cost, high-energy-density electrical vehicle. We also have interaction with other

gas to proceed the low cost, high energy density electrical vehicle. We also have interaction with other OEMs.

Kang Sun: Until we have large format, EV format, I mean, 100 amp hour, 120 amp hour cells, we will stay at technical exchange stage.

But at this time, it's still at a technical exchange stage until we have a larger format, a 100 amp hour, 120 amp hour cell.

Chris Souther: Yeah, that makes sense. Maybe just within aerospace, any other, if any ways you can kind of segment out, you know, the types of customers, or the use cases, would be helpful there.

we will stay at a technical exchange stage. Yeah, that makes sense. But maybe just within aerospace, any other, any ways you can kind of segment out the types of customers or the use cases would be helpful there. Right, so as of today, we have...

Kang Sun: Right. For us today, you see, we have industrial customers. We have a customer in defense segment. Those batteries are dedicated for other applications. We just need to have the capacity and the right format of the battery and the right size of the battery, for those applications. I think this is our effort the next 18 to 24 months. We will get there. As we repeatedly mention, you know, our challenge is capacity. Once we get a capacity issue resolved, we will have a much better situation in revenue generation and serve the customers.

for those applications. I think this is our effort in the next 18 to 24 months. We will get there.

repeat the dimensioning in our challenges in capacity.

piece of dimensioning in our challenges is of capacity. Once we get capacity here resolved.

We'll have a much better.

Chris Souther: All right. Makes sense. I'll hop in the queue. Thanks, guys.

saturation, revenue generation and serve the customers. Makes sense. I'll hop in the queue. Here it is.

Operator: Thank you. As a reminder, that's star one to be placed into question queue. One moment, please, while we poll for further questions. We've reached the end of the question and answer session. I'd like to turn the floor back over to Dr. Sun for any further closing comments.

Thank you. As a reminder, that's star one to be placed into question queue. One moment please while we pull for further questions.

We've reached the end of the question and answer session. I'd like to turn the floor back over to Dr. Sun for any further closing comments.

Kang Sun: Thanks again, everyone, for joining us today. I'd like to thank our employees, partners, and shareholders for their continued support. As a reminder, you may learn more about our company updates and where we will be presenting in the investor relations section of our website. We look forward to updating you on Amprius' progress on our next call. Operator.

Thanks again everyone for joining us today. I'd like to thank our employees, partners, and shareholders for their continued support.

As a reminder, you may learn more about our company updates and where we will be presenting in the investor relations section of our website. We look forward to updating you on Amped's progress on our next call.

You may learn more about our company updates and where we will be presenting in the investor relations section of our website. We look forward to updating you on Amped's progress on our next call.

Operator: Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

Q4 2022 Amprius Technologies Earnings Conference Call

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