Q3 2024 Amprius Technologies Inc Earnings Call

Operator: Please note that this presentation contains forward-looking statements, including, but not limited to, statements regarding future product commercialization, new customer adoption and new applications, and the timing and ability of Amprius to expand its manufacturing capacity, build its large-scale manufacturing facility, scale its business, and achieve a sustainable cost structure. 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.

Statements, including but not limited to statements regarding future product commercialization, new customer adoption of new applications and the timing and ability of Ambry has to expand its manufacturing capacity build as large scale manufacturing facility scale its business and achieve a sustainable cost structure. These statements involve known and unknown risks.

Uncertainties and other important factors that may cause increases 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 refer to <unk> filings with the Securities and Exchange Commission.

Operator: For a more complete discussion of these risks and uncertainties, please refer to Amprius' filings with the Securities and Exchange Commission.

Operator: Finally, I would like to remind everyone that this conference call is being webcasted, 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.

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 Dot Dot Com. In addition to the wet gas. 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 <unk>.

Operator: I will now turn the call over to Amprius Technology CEO, Dr. Kang Sun, for his comments. Sir, please proceed.

Speaker Change: As technology CEO, Dr. Ken Zhang for his comments Sir Please proceed.

Kang Sun: Welcome, everyone, and thank you for joining us this afternoon. On today's call, I will give you an overview of our third quarter accomplishments. while also highlighting some of the upcoming milestones we are looking forward to achieving in the near future.

Speaker Change: Okay.

Speaker Change: And thank you for joining us this opportunity.

Speaker Change: On today's call.

Speaker Change: We'll give you hopefully of our third quarter accomplishments.

Speaker Change: I'll also highlight some of the upcoming milestones we are looking forward to achieving the near future.

Kang Sun: After that, our CFO, Sandra Wallach, will discuss our financial results for the period. Then I will share some closing remarks before opening the call for questions.

Speaker Change: After that our C.

Speaker Change: So Sandra Wallach will discuss our financial results for the period.

Speaker Change: Then I will share some closing remarks before opening the call for questions.

Kang Sun: Before I give a recap of the quarter, I would like to briefly introduce Amprius to those. who may be new to our company. Amprius is a pioneer and a leader in the silicon battery space. At Amprius, we develop, manufacture, and market high-energy technology. and high-power density silicon anode batteries with applications across all segments of electrical mobility. including the aviation and the EV industry. Today, Amprius commends performance leadership with its compilation of battery energy density, power density, charging time, operating temperature range, and safety. across our battery portfolio. we offer unmatched performance. among the commercially available batteries.

Speaker Change: Before I give a recap of the quarter.

Speaker Change: I'd like to briefly introduce N P as to those.

Speaker Change: Who may be new to our company.

Speaker Change: Hum peers, he is a pioneer and a leader.

Speaker Change: In the battery space.

Speaker Change: Okay.

Speaker Change: At MTS, we develop manufacture and market and it tends to be <unk>.

High power density and batteries with applications across all segments of the U S.

Speaker Change: Including the aviation industry.

Speaker Change: Industrious.

Speaker Change: Okay.

Speaker Change: To date <unk> has come in performance leadership.

Speaker Change: He is a combination of battery energy density power density charging time, RPG temperature wrench tend to safety.

Speaker Change: The cross.

Speaker Change: Or better you pulled a 14th.

Speaker Change: We offer unmatched performance Margaret.

Speaker Change: Commercially available batteries.

Kang Sun: Amprius has been delivering commercial batteries to the market with up to 450 Wh per kilo and 1,150 Wh per liter. 10C power capability, the extremely fast charge rate of 0 to 80% rate of charge in approximately 6 minutes. the ability to operate in a wide temperature range of minus 30 degrees Celsius up to 55 degrees Celsius. and safety design features that enable us to pass the United States military's benchmark nail penetration test. Each of these performance parameters is critically important to real-world electrical mobility applications. Not only do our batteries enable certain aircrafts and vehicles to maximize performance, but they enable our customers to achieve their economical targets as well.

Speaker Change: MTS has been delivering commercial batteries to the market.

Speaker Change: With up to 450, Wawa, Caito, and 11 50 Wawa Peter.

Speaker Change: Since he power capability.

Speaker Change: The extremely fast charger reach of the zero to the 80% retail over the charge in proximity six minutes.

Speaker Change: The ability to RP.

Speaker Change: Why is the temperature range of a man or it's a 30 degree Celsius up to 55 degree Celsius.

And the safety features that enable us to pass the United States immediately benchmark new penetration test.

Speaker Change: Each of these performance parameters.

Speaker Change: Critically important to reward the electrical mobility applications.

Speaker Change: Not only do our battery labels certain F crafts the vehicles to maximize the performance.

Speaker Change: But are they enable our customers to achieve their economic targets.

Kang Sun: in addition to what is commercially available today. We have also achieved third-party validation of our latest 500-watt-per-kilo, 1,300-watt-per-liter battery platform.

Speaker Change: In addition to what is a commercially available today.

Speaker Change: We have also achieved a third party validation of our latest 500 Wawa Paquito 13 Congress Wawa police tended to be plentiful.

Kang Sun: This battery will be ready for shipment by end of this year. It is our belief that there are no other commercial batteries on the market that can perform at these levels today. Amprius is a silicon-anode battery technology pioneer with over a decade of development experience and a long track record of commercial shipments and customer achievement. While Amprius's high-energy, high-power batteries are for all electrical mobility applications. company is presently serving two large and high growth segments. Aviation. and Light Electric Vehicles. Both benefit from Amprius battery performance and present Amprius with enormous battery business opportunities. Our aviation customers include manufacturing OEMs in high-altitude pseudo-satellites.

Speaker Change: These pads, we will be ready for shipment at the end of this year.

Speaker Change: It is our belief that there are no other commercial batteries on the marquee.

Speaker Change: Ken perform at this level is today.

Speaker Change: M P. A C. The citizen and the bids where it has a lot of your pioneer.

Speaker Change: Over a decade of development <unk> hearings and a long track record of commercial shipments and the customer achievements.

Speaker Change: Why do I M peers energy high powered batteries or electrical mobility applications.

Speaker Change: Somebody is present to the serving two large and.

Speaker Change: High growth segments.

Speaker Change: Aviation.

Speaker Change: And our lives he likes she later you'd actually called vehicles.

Speaker Change: Both benefits from M P, especially the performance in the <unk>.

Speaker Change: Presenter MTS with enormous opportunities business opportunities.

Speaker Change: Although adhesion cuss customers include the manufacturing Oems.

Speaker Change: Two of the pseudo satellites EV.

Kang Sun: eVTOLs, electrical aircrafts, and various drones from commercial to industrial to military. Fortune Business Insights projects that the global drone market will surge from the 18th building in 2023 to 213 buildings. by 2032.

Speaker Change: EV toss it actually go aircrafts and the various dreams.

Speaker Change: Commercial to industrial to immediately.

Speaker Change: Okay business the insights projects that.

Speaker Change: Global drone market surge you from the 18th beauty in 'twenty two 'twenty three.

Speaker Change: 113 beauty.

Speaker Change: By 2032.

Kang Sun: So we believe we are just at the beginning of a significant expansion of one of our addressable markets. Aerospace Testing International Forecast. the electrical aircraft and the EV tall battery market could be 50 buildings by 2030. The light electrical vehicle market is quite impressive as well. Providence Research Reports estimates the market will have a compound annual growth rate of 9.74% from 2023 to reach $206 billion by 2032.

Speaker Change: So we believe.

Speaker Change: I guess the end of the beginning of a significantly expansion off of one of our addressable markets.

Speaker Change: Aerospace testing international forecast.

Speaker Change: Electrical aircrafts and EV Tau pet three marquee could it be 50 Vod.

Speaker Change: <unk> 30.

Speaker Change: The lighting electrical vehicle market is quite impressive as well.

Speaker Change: Providence Research reports estimates the market will have a compound annual gross leaks of Nonplaying southern full person from 'twenty to 'twenty three reached 206 puny.

Speaker Change: 32.

Kang Sun: if there is one constraint in all of this. is the critical role of the battery innovation. At Amprius, we offer solutions to these constraints. And our third quarter results reflect our traction in both the aviation and the light electrical vehicle industries, as customers see the value of our technology. In the third quarter, we more than doubled revenue from the second quarter and engaged with 53 new customers. We have expanded our market participation to the light, electric or vehicle segment. signed 20 million of customer contracts and two ROIs with Fortune 500 industrial leaders. delivered a high-energy density 360-watt-per-kilo-EV battery cells to industrial consortium USABC.

Speaker Change: If there is one common stream in all of this.

Speaker Change: She is the critical role of the bed through innovation.

Speaker Change: At MTS, we all.

Speaker Change: Offer solutions. So this constraint.

Speaker Change: And our third quarter results reflect of attraction in both the aviation and the light electrical vehicle industry as customers see the value of our technology.

Speaker Change: The third quarter.

Speaker Change: Well more than doubled the revenue from the second quarter.

Speaker Change: We're engaged with the 53 new customers.

Speaker Change: We have expanded our market participation delight electrical vehicles segment.

Speaker Change: Signing the 'twenty muni off of customer contracts.

Idaho Weiss: Idaho Weiss with Fortune 500 industrial leaders.

Speaker Change: Hi, Dan. It's these 360 wawa bucket or EV battery cells, So industrial consortium.

Idaho Weiss: D C.

Kang Sun: and the developer, the gigawatt-hour-scale contract manufacturing capacity.

Idaho Weiss: In the develop of the gigawatt hours scaled contract manufacturing capacity.

Kang Sun: All these accomplishments and progress position Amprius for accelerated growth in the coming quarters and years. The introduction of Amprius cycle battery in January has given us a large advantage in battery space by expanding our offering. Amprius offers a very versatile platform that enables the designs of the best performing silicon anode batteries for a variety of customer applications. Today, we offer customers 14 different SKUs that are available in a variety of battery formats and form factors. These cells range from 350 Wh per kilo to 450 Wh per kilo. ensure that we are covering a significant portion of our customers' commercial applications.

Idaho Weiss: All of these accomplishments and the progress position impetus for a Saturday the girls in coming quarters and years.

Idaho Weiss: The introduction of a M. P. S. Cycled batteries generally has given us a large advantage battery space by expanding our offerings.

Idaho Weiss: <unk> offers a very versatile platform that enables the designs over.

Idaho Weiss: Over the best performing city can and batteries.

Idaho Weiss: A variety of customer applications.

Idaho Weiss: Today, we offer customer 14 different skus that are available.

Idaho Weiss: I just had three formats and form factors.

Idaho Weiss: These cells, which prevent you from the 350 wawa potatoes to 450 Wawa potato.

Idaho Weiss: To ensure that we are covering a significant portion of our customers' commercial applications.

Kang Sun: Ampere batteries are recognized as the best in class for energy, power, cycle life, charging time. temperature performance, and the safety for electrical mobility. Our technology leadership and battery performance are validated by increasing customer purchasing volume.

Idaho Weiss: M. P of batteries are recognized as the best in class.

Idaho Weiss: Power cycle life time.

Idaho Weiss: Turning to performance.

Idaho Weiss: Safety for electrical mobility.

Idaho Weiss: Our technological leadership in the bedroom performance validates the increasing customer purchasing volume.

Kang Sun: Now I would like to briefly provide an update on our partnership with the United States Advanced Battery Consortium. or USABC. It is a remarkable technical breakthrough in an important market segment for Amprius. After being awarded a three-million cause-sharing contract from the US CDC in collaboration with the United States Department of Energy approximately a year and a half ago. This quarter, we successfully delivered the EV cells to them. USABC select Amprius to address some of the most challenging issues experienced by EV users. such as the range and the need for faster charging time. Amprius not only addressed this issue, but suppressed many of the initial goals set by USABC.

Idaho Weiss: Now I would like to briefly provide updates.

Idaho Weiss: Our partnership with the United States that events the battery consortium.

Idaho Weiss: Our U S. A D C.

Speaker Change: It is okay.

Speaker Change: Multiple technical breakthrough.

Speaker Change: Importantly, the market segment of Lumpiness.

Speaker Change: After being awarded a three muni caused the sharing contract from the U S. A D C in collaboration with the United States Department of energy.

Speaker Change: Proximity a year and a half ago.

Speaker Change: This quarter, we successfully deliver the EV sales today.

Speaker Change: U S. A b a b C sea legs and peers to address some of the most challenging issues experienced by EV users.

Speaker Change: Such as the range in that.

Speaker Change: Smith.

Speaker Change: Need for faster charging times.

Speaker Change: M. P S. A lotta only address this nishu better surpassed many hope the esol goes.

Speaker Change: U S GDP.

Kang Sun: Amprius EV cell achieved 360 Wh per kilo energy density. 1,200 watt per kilo power density. are charged to 90% of their rate energy in 15 minutes. and Expect a Psycho Life of 1000.

Speaker Change: M. P. S E T cell achieved 360, wawa potato and events.

Speaker Change: 1200 watt per kilo power density.

Speaker Change: A charge of 290% over their REIT energy in 15 minutes.

Speaker Change: And expect say core life of 1000.

Kang Sun: We believe our continued success paves the way for future engagements with the electrical vehicle manufacturers. Amprius batteries have become a great attraction in the electrical mobility market. In many cases, Amprius batteries are the only non-commercial available batteries that meet a certain of our customers' requirements in technical performance and application economics. In Q3, we shipped to 94 customers. Of these, 53 were new customers covering several parts of the electrical mobility sector. Our year-to-date customer count now stands at over 175. Many of these customers are also long-time partners with repeat volume purchase orders, including Otto, Airbus, AeroVarmant, Teledyne Flair.

Speaker Change: We believe our continued success favorably for future engagements with electrical vehicle manufactures.

Speaker Change: I'm Pei as the batteries has become a great attraction.

Speaker Change: In the electrical mobility market.

Speaker Change: In many cases.

Speaker Change: He is battery are the only non commercial available battery now to meet a certain of our customers' requirements.

Speaker Change: <unk> equal performance and application economics.

Speaker Change: In Q3.

Speaker Change: We shipped 294 customers of these 53.

Speaker Change: New customers covering several parts of the United Comorbidity sector.

Speaker Change: Our year to date.

Speaker Change: Count now stands at over 175.

Speaker Change: Many of these customers.

Speaker Change: Our so long I'm.

Speaker Change: Hi partners, please repeat volume purchase orders, including auto Airbus Aerovironment.

Speaker Change: Headed unfair.

Kang Sun: Cross, Hamdan Lee, and the BAE System. The completion of new customers and volume shipments to returning customers allowed us to generate 7.9 million in revenue for the third quarter. Our performance in third quarter represents more than double the amount of the revenue we generated just last quarter.

Speaker Change: Cros haven't done that.

Speaker Change: 15th.

Speaker Change: The combination of new customers and the volume of shipments to returning customers allowed us to generate a seven point that muni in revenue for the third quarter.

Speaker Change: Pro forma as the third quarter represents more than double the amount of the revenue we generate just last quarter.

Kang Sun: almost triple what we generated in Q3 last year, and that compares to the 9.1 million we generated in all of 2023. The primary driver behind our growth this quarter has been our cycle product. Since its launch in January. We have expanded our contract manufacturing capabilities, enabling us to quickly scale production and deliver large-volume shipments. where we have a strong demand.

Speaker Change: Almost a table what we generally see in Q3 last year.

Speaker Change: And that compares to the Nonpaying 1 million, we generated in all of 2023.

Speaker Change: The primary driver behind our growth this quarter has been our cycle of product.

Speaker Change: Thinks he's along sheen generally.

Speaker Change: Expand our contract manufacturing.

Speaker Change: Identities he may.

Speaker Change:

Speaker Change: US quickly scale production and that deliver large volume shipments.

Speaker Change: We have a strong demand.

Kang Sun: The three customer engagements were announced in Q3 as a result of the cycle platform introduction and the contractor manufacturing strategy. The high performance of our battery and the immediate availability of manufacturing capacities enable us to quickly move customers through the commercial validation process. secure volume purchase commitments and deliver large quantities of sales to customers.

Speaker Change: The three customer engagements where allowance in Q3 are the results of this site called Pediform introduction and the contract manufacturing strategy.

Speaker Change: Yeah.

The high performance of our battery and the immediate availability of our manufacturing capacities enable us to quickly move customer so the commercial validation process.

Speaker Change: Pure <unk>.

Speaker Change: Volume purchase commitments that deliver large quantities of cells to customers.

Kang Sun: Look at some of these new agreements in more detail. In September, we announced that we received two contracts totaling over 20 million to supply 40 ampere-hour high-performance cells for light electrical vehicle applications. which are we. are already shaping. For context, our 40-ampere-hour high-performance cycle battery are produced at a contract manufacturing facility as soon as the battery and the production lines are qualified by the customer. Enabling us to rapidly scale and meet the customer demand, we expect to recognize this revenue by mid-2025.

Speaker Change: Okay. Some of these new agreements in more detail.

Speaker Change: In September we announced that we received two contracts totaling over 20 Muni to supply a 40 on power high performance of cells.

Speaker Change: You like Jacoby cool applications.

Speaker Change: Which are we.

Are already shipping.

Speaker Change: For context.

Speaker Change: Our 40 and power high performance recycled battery are produced.

Speaker Change: Our contract manufacturing facility as soon as the battery under the production lines or quantify the better customer, enabling us to rapidly scale. The media customer demand, we expect to recognize this revenue benefit.

Speaker Change: 2025.

Kang Sun: In the last few months, we have also signed two separate agreements. with Fortune 500 leaders. While we are in the early stage of this project, both engagements have the potential to greatly expand and become high volume orders from Tier 1 customers where we now have the capacity to meet the demand. First of these contracts is a non-binding letter of intent with the Fortune Global 500 Technology OEM to develop a high-energy cycle of symmetrical cells. for the Light Electrical Vehicle Market. This IOI is expected to translate into a commercial supply agreement. That will cover the next five years and could provide Amprius with a battery production order exceeding two gigawatt hours.

Speaker Change: In the last few months, we have also signed two separate agreements.

Speaker Change: With Fortune 500 leaders.

Speaker Change: While we are in the early stage of this project both engagements have the Po.

Speaker Change: Retention to accrete greatly expand and become high volume orders from tier one customers.

Speaker Change: We now have capacity to meet demand.

Speaker Change: The first of these contracts is a nonbinding letter of intent with the Fortune Global 500 technology OEM.

Speaker Change: Developer of high energy side course integral sale.

Speaker Change: The light.

Speaker Change: Critical vehicle market.

Speaker Change: Lisa I O Y is expect to translate into a commercial supply agreement.

Speaker Change: That will cover the next five years that could pull that MTS with peds reproduction order exceeding two gigawatt hours.

Kang Sun: over the proposed contract duration. We will begin shaping the first group of a cycle of cylindrical cells designed for this application later this year. The second Fortune 500 agreement is a development contract for small format custom high energy CYMAX pouch cells. Amprius high energy battery provided a critical solution to the customer's application. The project is expected to reduce the battery weight and size by approximately 50% compared to their current battery without compromising performance. As a smaller and lighter battery enables better product design, enhance the overall customer experience, and offer a significant competitive advantage in the market.

Speaker Change: Over the protests are proposed to the context duration.

Speaker Change: We will begin shipping.

Speaker Change: First the group over cycles cylindrical cells designed for this application later this year.

Speaker Change: The second a fortune 500 agreement is a development contract for small format custom.

Energy dynamics.

Speaker Change: <unk> pouch cells.

Speaker Change: Some piece of energy.

Speaker Change: Battery 12 added a critical solution to the customer's application.

Speaker Change: The project is expect to reduce the bare tree wheat and the size the approximate <unk> 50 per cent compared to their current battery without compromising performance.

Speaker Change: Yes.

Speaker Change: Smaller lighter battery enabled spitzer.

Speaker Change: Product design and enhance the overall customer experience offer a significant competitive advantage in the market.

Kang Sun: The application is a project to require over one million sales per year if the project Objectives are met.

Speaker Change: The application is a project to require over 1 million cells per year, if the project.

Speaker Change: Object to Amit.

Kang Sun: On that note, in order to support a current as well as a future customer commitment. We took additional steps forward this quarter to increase our manufacturing. capabilities. In June, we announced the initial rollout of our contract manufacturing strategy that secured over 500 megawatt hours of additional capacity to several partners. To further diversify and expand our manufacturing capacities, we recently launched two lines designed for the requirements of Amprius batteries with one of our existing partners. These production lines will be supporting the 20 million light electrical vehicle battery orders that I just mentioned. They are already operational and shaping cells.

Speaker Change: On that note in order to support our current as well as the future customer commitments.

Speaker Change: We took additional steps forward this quarter to increase.

Speaker Change: Our manufacturing.

Capabilities.

Speaker Change: In June we announced the initial rollout of our contract manufacturing strategy that as CTO over 500 megawatt hour of additional capacity there with several partners.

Speaker Change: So further diversify and extend our manufacturing capacities.

Speaker Change: We recently launched two lines designed for the requirements of <unk> batteries with a wildflower existing partners.

Speaker Change: This production lines would be supporting the <unk> Munich fly to electrical vehicle battery orders.

Speaker Change: As I mentioned.

Speaker Change: Yes.

Speaker Change: They are already operational in the shaping cells.

Kang Sun: Beyond Creating. additional capacity having lines engineered specifically for our product enable us to provide a more stringent designs for our cell chemistry. which is a key consideration for many of our highly technical customer applications. Just over today, we now have access to up to 800 megawatt hour of a pouch cell and over one gigawatt hour.

Speaker Change: We are creating.

Speaker Change: Additional capacity.

Speaker Change: In lines engineered specifically for our products enable us to pull that a more stringent designs flower cell chemistry.

Speaker Change: Which is a key consideration for many of our Heidi ticket equal customer applications.

Speaker Change: That's all for today.

Speaker Change: Now have access to up to 800 megawatt megawatt hours of our pouch cell and over one gigawatt hour.

Kang Sun: of Ceremical Cell Production Annually.

Speaker Change: Office Sidibe Merkel cell production annually.

Kang Sun: As for our manufacturing facility... we are planning in Brighton, Colorado. We have now a complete production line specifications and selection. Finish the construction design drawings and specifications for the facility. We remain on track from the regulatory standpoint, having recently submitted our side plan and advanced all other regulatory plans, applications for the facility.

Speaker Change: As for our manufacturing facility.

Speaker Change: We are planning in Brighton, Colorado.

Speaker Change: We have now completed production line specifications and to see excellent.

Speaker Change: <unk> finished the construction design drawings and specifications for the facility.

Speaker Change: We remain on track from the regulatory standpoint.

Speaker Change: Having recently some meat to our site plan.

Speaker Change: And the rents to or other regulatory plans applications for the facility.

Kang Sun: Since we have a gigawatt-hour-scale contract manufacturing capacity available today, we may not need Colorado production capacity to support market demand for some time. We also are continuing to making progress ramping up our facility in Fremont, California. We remain on pace to scale our Fremont production reach entering 2025 with up to 2 megawatt hours scale.

Speaker Change: It seems that we have a gigawatt hour scale contract manufacturing capacity available today.

Speaker Change: We may not need to Colorado production capacity to support our market demand for some time.

Speaker Change: We also continue to making progress ramping up or a facility in Fremont, California.

Speaker Change: We remain on pace to scale, our Fremont production rights until 2020 filed with up to two megawatt hours scale.

Speaker Change: Okay.

Kang Sun: Looking ahead, we are increasingly optimistic about the road ahead of us, as well as our ability to meet the challenge. With technical leadership, greater battery performance, a growing book of customers, and the capacity to now support a larger volume shipments, we believe that we are set up for sustainable growth for the foreseeable future. We are working hard to execute our goal. And we expect to carry our momentum through the end of the 2024 and into 2025.

Speaker Change: Looking ahead.

Speaker Change: We are increasing increasingly optimistic.

But to the road ahead of us as well as our ability to meet the Chinese.

Speaker Change: We've tested equal leadership.

Speaker Change: The battery performance growing book.

Speaker Change: Customers and the capacity to now support a larger volume shipments. We believe that we are set up for sustainable growth for the foreseeable future.

Speaker Change: We're working hard to execute the whole dose and the <unk>.

Speaker Change: We expect to carry our momentum.

Speaker Change: And of the 2024.

Speaker Change: Into 2025.

Kang Sun: With that, I will now turn the call over to our CFO, Sandra Wallach, to review our financial results for the quarter. Thank you.

Speaker Change: With that I will now turn the call over to our CFO Sandra Wallach to review our financial results for the quarter.

Sandra Wallach: Thank you, Kang.

Sandra Wallach: Thank you King I would now like to spend a few minutes covering some key financial update as a reminder, our detailed financials can be found in our shareholder letter.

Sandra Wallach: 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.

Sandra Wallach: We finished the third quarter was $7 9 million in total revenue.

Sandra Wallach: We have previously discussed our total revenue is a combination of our main revenue streams product revenue and development services and grant revenue.

Sandra Wallach: 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.

Sandra Wallach: 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 nonrecurring in nature, leading to greater fluctuations depending on the Parison period.

Sandra Wallach: As we've discussed in the past, development services and grant revenue is nonrecurring 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 percent of revenue, an increase from three in the second quarter, and consistent with the four customers counted in the third quarter of last year.

Sandra Wallach: The combined increases in revenue this quarter were driven by the addition of new customers and grant programs.

Sandra Wallach: <unk> mentioned, we shipped 94 customers in the third quarter.

Sandra Wallach: As 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.

Sandra Wallach: 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.

Sandra Wallach: <unk> 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.

Sandra Wallach: 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.

Sandra Wallach: Moving to our profitability metrics gross margin was negative 65% for the quarter compared to negative 195% in Q2 of 'twenty 'twenty, four and negative 152% in the prior year period.

Sandra Wallach: As a reminder, we see significant gross margin variation as our product and services revenue mix fluctuates.

Sandra Wallach: Margin. This quarter was also impacted by design quick construction costs related to the Colorado facility, which will not recur.

Sandra Wallach: Longer term, we're confident that our gap gross margin will begin to normalize as we approach our capacity expansion goals.

Sandra Wallach: Longer term, we're confident that our GAAP gross margin will begin to normalize as we approach our capacity expansion goals.

Sandra Wallach: 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 in 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 $0.10 per share, with a $110.4 million weighted average number of shares outstanding.

Sandra Wallach: Now onto 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.

Sandra Wallach: And an increase of 1.3 million or 26% from the prior year period.

Sandra Wallach: The sequential decrease was driven by lower share based compensation and outside services the.

Sandra Wallach: 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.

Sandra Wallach: Our GAAP 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.

Sandra Wallach: 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.

Sandra Wallach: In Q2 2024 net loss was negative 13 cents per share with 97 million weighted average number of shares outstanding.

Sandra Wallach: Q3, 2023 net loss was a negative 10 cents per share with $86 4 million weighted average number of shares outstanding.

Sandra Wallach: As of September 32024, 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.

Sandra Wallach: Our share based compensation for the third quarter with 1.7 million compared to 1.9 million in Q2, and $1 1 million in the prior year period.

Sandra Wallach: The sequential decline was due to changes to the board of directors.

Sandra Wallach: 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.

As of September 32024, we had 111.3 million shares outstanding which was up $3 4 million from the prior quarter.

Sandra Wallach: 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 zero point $3 million.

Sandra Wallach: 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 2 megawatt production line in Fremont.

Sandra Wallach: Now turning to the balance sheet.

Sandra Wallach: We exited the third quarter with $35 million and net cash and no debt.

Sandra Wallach: Key drivers for the 11.4 million of cash we used in the quarter.

Sandra Wallach: Were $9 5 million used in operating cash flow, we continue to remain lean with a two and a half to $3 million run rate per month, excluding transaction related cost.

Sandra Wallach: Note that our Q3 24 operating cash included $2 4 million of nonrecurring expenses used for the design of the Colorado facility.

Sandra Wallach: Expense expenses are projected to tail off with the completion of the construction drawings, which are substantially complete.

Sandra Wallach: 1.3 million used to continue the build out of our expanded two megawatt production line in Fremont.

Sandra Wallach: and $0.5 million related to the payment to stock issuance costs. associated with the warrant repricing offer.

Sandra Wallach: And 0.5 million related to the payment to stock issuance costs.

Sandra Wallach: Associated with the warrant repricing offer.

Sandra Wallach: Considering our business achievements and ongoing projects, we believe we are efficiently using capital to drive Amprius forward.

Sandra Wallach: Considering our business achievements and ongoing projects. We believe we are efficiently using capital to drive ampere its far apart.

Sandra Wallach: 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 2-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 in timing.

Speaker Change: Before I turn the call back over to King I would like to take a moment to discuss our capex outlook for the remainder of the year.

Speaker Change: We expect to spend another $1 million on supporting equipment to complete the Tuesday, a lot line in Fremont in addition to our normal operating capital requirements.

King: Now that the designs are effectively complete for Colorado, We will continue to monitor the larger industry dynamics driving our ability to proceed further.

King: 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.

Sandra Wallach: 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 for 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.

King: One last housekeeping item I'd like to discuss is the change to our cap table. After the end of the quarter.

King: On October 23rd we announced at Empress Inc. Our former controlling shareholder had voluntarily liquidated and dissolved as a result, the shares at Empress Inc. Held were distributed pro rata for dissolution plan approved by their board of directors.

King: This distribution removes a controlling shareholder consideration and dispenses of shares more broadly into the hands of the original investors and Empress Inc.

King: And pricing also contributed to US $5 5 million common shares at Empress technologies and will reimburse related expenses in exchange for our assumption of the outstanding stock options of Empress Inc. An aggregate of 7 million options with a weighted average exercise price of $2 10 per share.

Sandra Wallach: There was no operating impact to Amprius Technologies as a result of this distribution or option assumption, and we extinguished the contributed shares.

King: There was no operating impact to embrace technologies as a result of this distribution our option assumption and we extinguished the contributed shares.

Sandra Wallach: The option assumption was approved by a committee of the Amprius Technology's Board of Directors comprised of solely independent and disinterested directors.

The option assumption was approved by a committee of the embryo technologies Board of directors comprised solely of independent and disinterested directors.

Kang Sun: That concludes my financial discussion and I will now pass the call back to Kang. Thanks, Sandra. As we look ahead, our strategy at Amprius remains unchanged. Our top priority are innovating next-generation batteries, growing our customer base, and scaling our manufacturing capability. Today, Amprius 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 the repeated customer orders. Our concrete manufacturing strategy has also shown great results.

Speaker Change: That concludes my financial discussion and I'll now pass the call back to Kim.

Kim: Thanks Sanjay.

Kim: As we look ahead our strategy at MTS.

Kim: It is unchanged.

Kim: Priority <unk>.

Kim: <unk> next generation batteries.

Kim: In our customer base, the scaling our manufacturing capability.

Kim: The <unk> has the best performing battery for the electrical mobility market strong revenue growth and to impress you with customer pipeline and a gigawatt hour scale manufacturing capacity available to us.

Kim: Our technical leadership and amidst the battery performance.

Kim: Industry.

Kim: Has it been validates the industrial leaders and the repeat of customer orders.

Kim: Concord and manufacturing strategy has also shown greater results.

Kang Sun: 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 Amprius line at one of our manufacturing partners. with the capacity for 800 megawatt hour of a pouch cell. At the same time, we are exploring additional manufacturing partners. in Asia and Europe, expanding our Fremont production capacity for CEMEX battery production. and have finalized our design for the factory in Colorado. We believe that the opportunity in front of Amprius is tremendous. Our team are more confident than ever in delivering what we have planned and promised.

Kim: We are already able to support our customers with over 10, Muni pouch battery cells and the 125 muni cylindrical cells annually.

Kim: We also recently celebrated the launch of a dedicated I'm curious lines at a while off our manufacturing partners.

Speaker Change: What is the capacity.

Speaker Change: For 800 megawatt hour of pouch cells.

Speaker Change: At the same time, we are exploring additional manufacturing partner.

Speaker Change: In Asia and Europe.

Speaker Change: Spending our Fremont production capacity for.

Speaker Change: <unk> had three production.

Speaker Change: And to have finalized the design for the factory in Colorado.

Speaker Change: We believe that the opportunity in front of MTS is its tremendous.

Speaker Change: Our team are more confident than ever delivering what we have planned and the promised.

Kang Sun: We look forward to closing out the year strong and heading into 2025 with increasing momentum. over the last 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 Amprius Technology.

Speaker Change: We look forward to closing out the year strong.

Speaker Change: Heading into 2020, followed is the increasing momentum.

Speaker Change: Over the next few months.

Speaker Change: We will also be attending several industrial the financial conferences, and we hope to see you there.

Speaker Change: Thank you for your continued support of Amtrust type of outage.

Kang Sun: We look forward to continuing to deliver on what we have planned and promised in the upcoming quarters.

Speaker Change: Look forward to continuing to deliver on what we have planned the partners.

Speaker Change: Coming quarters.

Operator: With that, I will turn it back to the operator for Q&A. Thank you. At this time, we'll open the line for questions from the company's Publishing Research Analysts.

Speaker Change: With that.

Speaker Change: I will turn it back to the operator for Q&A.

Speaker Change: Thank you at this time, we'll open the line for questions from from the company's publishing research analysis analysts excuse me the company requests that each participant limit their comments to one question and one follow up to ask a question. Please press star one on your telephone keypad at this time.

Operator: The company requests that each participant limit their comments to one question and one follow-up. To ask a question, please press star 1 on your telephone keypad at this time. Again, that's star 1 if you do have a question or comment. Please hold as we poll for questions.

Speaker Change: Again that star one if you do have a question or comment please hold as we poll for questions.

Colin Rusch: And we'll take our first question from Colin Rusch from Oppenheimer. Please go ahead, Colin. Thanks so much, guys. You know, and appreciate all the detail on the contract manufacturing capacity that you have.

Speaker Change: And we will take our first question from Colin Rusch from Oppenheimer. Please go ahead Colin.

Colin Rusch: Thanks, so much guys and I.

Colin Rusch: I appreciate all the detail on the the contract manufacturing.

Colin Rusch: The capacity that you have.

Colin Rusch: We'd love to dig into the customer list a little bit more. You know, can you talk about how many customers are in late-stage negotiations that have the potential to be 10-megawatt hours or more? And how should we think about the cadence of incremental customer announcements like the one you... Yep, I'm calling for the customer, I have a... of the states. three customers. Those are high volume. and potential customers.

Speaker Change: Well a lot to dig into the customer list a little bit more.

Speaker Change: Can you talk about how many customers are in late stage negotiations that have the potential to be 10 megawatt hours or more and how should we think about the cadence of incremental customer announcements like the one you just made.

Speaker Change: Yep.

Speaker Change: For the cost summer have Oh.

Speaker Change: So getting them the volume.

Speaker Change: We have already concluded the.

Speaker Change: Two customer.

Speaker Change: Combined the revenue <unk> meeting followers, we haven't delivered that are within the year. So we expect.

Next to me, we can recognize the revenue.

Speaker Change: In addition to that we have a conversation.

Speaker Change: We are not.

Speaker Change: Another.

Speaker Change: Three customers.

Speaker Change: Those are higher volume.

Speaker Change: Potential customers.

Colin Rusch: Great. That's super helpful.

Speaker Change: Great. That's Super helpful. And then you know just given the you know the changing in our strategy yeah.

Kang Sun: And then, you know, just given the, you know, the change in strategy, you know, way towards a CapEx flight model, can you talk a little bit about the path to operational cash flow breakeven? It seems like you guys, you know, given the differentiated product and the capacity availability, you know, potentially have a pretty straight line towards reaching that operational breakeven. Absolutely. So, as we've mentioned before, the product that we sell under the trademark of PsiCorps is profitable day one without having to put any of our investor money to work in the capital and infrastructure. We have still limitations in how much of the CIMAX we can deliver given the up to 2 megawatts that we're completing in Fremont.

Speaker Change: Towards a capex light model.

Speaker Change: Can you talk a little bit about the path to operational cash flow breakeven. It seems like you guys you know given the differentiated product and the capacity availability.

Speaker Change: Because I actually have a pretty straight line towards reaching that operational breakeven.

Speaker Change: Absolutely.

Speaker Change: So as we've mentioned before the product that we sell under the trademark of Psi Corps is profitable day, one without having to put any of our investor money to work in the capital and infrastructure.

Speaker Change: We have still limitations and how much of the sign acts weekend deliver them given the up to two megawatts that we're completing in Fremont. We expect the near term revenue growth to all come from <unk>. So that gives us a clear view.

Kang Sun: We expect the near-term revenue growth to all come from PsiCorps. So, that gives us a clearer view now that Kang has removed the capacity constraint to really grow into that operational profitability profile as we move forward.

Speaker Change: Now that king has removed the capacity constraint to really grow into that operational profitability profile.

Speaker Change: As we move forward.

Sandra Wallach: And then, you know, just from an organizational capacity perspective on the OPEC side, can you talk a little bit about what investments you need to make to really support a drive towards, you know, breakeven revenue? So this last quarter, we made an investment of two additional salespeople. That's really been our big focus, along with business development and adding some key R&D resources into the Fremont team so we can drive the cycles of learning faster. So that's really where we're looking. But at 92 employees, we're talking about, you know, a handful of really critical hires that we're we're focused on right now.

And then just from an organizational capacity perspective on the Opex side can you talk a little bit about what investments you need to make to really support our drive towards a breakeven revenue levels.

Speaker Change: Yeah.

Speaker Change: It was this last quarter, we made an investment in F. Two additional salespeople, that's really been our pain focused along with business development and adding some key R&D resources into the Fremont team. So we can drive the cycles of learning faster. So that's really where we're looking at it 92 employees who were talking about.

Speaker Change: A handful of really critical hires that where we're focused on right now.

Colin Rusch: Thanks so much, you guys. Thank you.

Speaker Change: Super helpful. Thanks, So much you guys.

Speaker Change: Yes.

Speaker Change: Thank you and we will take our next question from Jed <unk> from William Blair. Please go ahead Chad.

Jed Dorsheimer: And we'll take our next question from Jed Dorsheimer from William Blair. Please go ahead, Jed.

Mark Shooter: You have Mark Shooter on for Jed. Just to put a finer point on Colin's question, are you saying that you'll be recognizing all of the $20 million by May or that you'll start to recognize some revenue by May? Mark, at this time, our plan is to recognize the revenue by May. Okay, so 5 May of next year, you'll have $20 million in revenue. Yeah, there are 20 million from these customers. We already started shipping the product this quarter. Got it.

Speaker Change: Thank you Mark shooter on project.

Speaker Change: Just to put a finer point on Collyns question.

Speaker Change: Are you, saying that you'll be recognizing all of about 20 million by may or that you'll start to recognize some revenue.

Speaker Change: Hi, Matt.

Speaker Change: Mark at this time, our plays to recognize the revenue.

Speaker Change: Hey.

Speaker Change: Okay.

Speaker Change: If next year Youll have $20 million in revenue.

Speaker Change: Yeah that a tiny amount from these customers that we already started shipping that product.

Speaker Change: This quarter.

Mark Shooter: Thank you for the clarification, Tom. And to dive into that a bit more with the customer strategy... Congrats on 175 customers. That is quite a lot.

Speaker Change: Got it thank you for the clarification Tom.

Speaker Change: And.

Speaker Change: To dive into that a bit more of a third the cost of our strategy.

Speaker Change: Congrats on a 175 customers.

Speaker Change: It's quite a lot I'm wondering if your strategy is to.

Kang Sun: I'm wondering if your strategy is to continue to service many customers with more smaller volumes and bespoke cell designs, maybe to capture higher margin? Or are you looking to secure more chunkier, large customers with higher volume? How are you thinking about that? Yeah, we like to focus on large customers with substantial volume. So that way is easier for us and not just the product development, it's also the manufacturing and the service. So those are our. Half of the funnel, and it's going to be powerful. But eventually, we hope there are sizable, large-volume customers. will place the order.

Speaker Change: Continued to service many customers with more smaller volumes and bespoke cell designs, maybe to capture higher margin or are you looking to secure more chunkier large customers a higher volume.

Speaker Change: How are you thinking about that.

Speaker Change: We like to focus on logic.

Speaker Change: Customer with a substantial volume.

Speaker Change: So the other way is easier for us not just the product developments also the manufacturing and the service.

Speaker Change: So those are our.

Speaker Change: Top of the funnel.

Speaker Change: As I said will be powerful.

Speaker Change: But eventually we hope okay.

Speaker Change: Sizable large volume customers.

Speaker Change: So we're pretty flawed.

Kang Sun: Okay.

Speaker Change: Okay, and lastly at steady state and in a couple of years out.

Kang Sun: And lastly, at a steady state day in a couple of years out, when the facilities are ramped, and you have large orders, do you have a gross margin target in mind considering the cost for the toller? We haven't given any guidance about our target model, but again, because the majority of the volume will be coming from SICOR, which is made on traditional graphite manufacturing lines, we've seen a reason why we can't get to parity with graphite.

Speaker Change: When the facilities are ramped and you'd have a large orders.

Speaker Change: Do you have a gross margin target in mind, considering the cost for the taller.

Speaker Change: We haven't given any guidance about our target model.

Speaker Change: But again because.

Speaker Change: The majority of the volume will be coming from sidecar, which is made on traditional graphite manufacturing lines. We see no reason why we can't get to parity with graphite.

Kang Sun: Thank you very much. Thank you.

Speaker Change: Thank you very much.

Speaker Change: Thank you and we'll take our next question from Chip Moore from Roth. Please go ahead chip.

Chip Moore: And we'll take our next question from Chip Moore from Roth. Please go ahead, Chip. Thanks for taking the question. Congrats on all of the progress this quarter. I wanted to follow up on the two $20 million contracts that sounds like you're going to recognize by the middle of next year. Is there potential for those to grow, or should we think about a new set of purchase orders, or what's the opportunity with those customers? Keeper at this time, the orders they placed, the static slider needs until middle of next year. That's why by middle of next year, the schedule will be made and sold and the revenue will be recognized.

Thanks for taking the question congrats.

Speaker Change: Congrats.

Speaker Change: Our progress this quarter.

Speaker Change: I wanted to follow up on the the $220 million contracts that it sounds like you're going to.

Speaker Change: Recognized by the middle of next year.

Speaker Change: Is there potential for those to grow or should we think about a new set of purchase orders or what's the opportunity with those customers.

Speaker Change: However, this time.

Speaker Change: The orders they place.

Speaker Change: It's neither needs until.

Speaker Change: Below last year, that's why I need to collect those.

Speaker Change: <unk> who is <unk>.

Speaker Change: And so the revenue will be recognized but those are very important.

Kang Sun: But those are very important customers. They are the leaders in this particular segment. So we anticipate that they will grow. Choo-ah! They will have an additional order coming sometime next year, because this is only satisfying half of the year of their demand. So we are working with those customers very closely. First task is to get those products made and have revenue regularized by May. Understood.

Speaker Change: And the customer they are the leaders in these particular segments. So we anticipate that they will go.

Speaker Change: To.

Speaker Change: They will have a decent order comedy sometimes ikea because a they saw he said say half of the year of.

Speaker Change: All of that demand.

Speaker Change: We are working with those customers are very closely first task is to get those put avid made it and have a great revenue recognized by me.

Speaker Change: Yes.

Speaker Change: Understood that's helpful Canyon.

Kang Sun: That's helpful, Kang. And maybe for my follow up on the on the LOI in the light electric vehicle space, you know, large potential, right, two gigawatt hours. Yeah, I think you talked about a potential supply agreement over five years. What are the milestones to reach that in terms of, you know, samples and evaluation? I imagine that takes some time, but how should we think about that? Yeah, I think the key, this is a breakthrough technology. This is a require substantial change of the cell chemistry and the cell design. Now we have done most of the work.

Speaker Change: Maybe for my follow up on the on the LOI.

Speaker Change: The electric vehicle space.

Speaker Change: Large potential over a two two gigawatt hours.

Speaker Change: Yeah, I think you talked about a potential supply agreement.

Speaker Change: Here's what what are the milestones to reach that when in terms of samples and evaluation I imagined that takes some time, but but how should we think about that.

Speaker Change: Yeah, I think the key is when he gets into the technology.

Speaker Change: This is a require a substantial change over the sale cabinetry and the sale do you got now we have most of those are this is not a problem for.

Kang Sun: This is not from scratch. Okay, Amprius already has the foundation for both. Now, so we need to perfect the cell design. We are planning to give them the first batch of the sample. Okay, whatever they ask for, there's no one in the industry. has made it. Also, no one in the industry today believes this can be done. But Amprius already demonstrated in the lab. they were planning to come to factory to check the factory out December 5th, okay, because I will not be available. So we delayed this factory inspection probably to early next year. We convinced them they should test the sample first before they come to the factory.

Speaker Change: From scratch, Okay, I'm curious already have the foundation for both so we need to protect the cell design, we are planning to give them.

Speaker Change: The first batch of the sample okay.

Speaker Change: But the offer for new wind industry.

Speaker Change: It has made it or so no one in the industry today. It believes that it can be that okay, but a M P as already demonstrated in the labs.

Speaker Change: We're planning to come.

Speaker Change: Come to factory to check of the factory out December 5th Okay, because I will not be available so with delay.

Factory inspection, probably two rdx here.

Speaker Change: We are convinced that they should have tested the sample first before they come to the factory. So this is a.

Kang Sun: So this is a very reputable. customer is the industry leader, definitely is the industry leader, is number, is not a number one, is number two in this particular market segment. So we are very proud of having this opportunity to serve them. Excellent.

Speaker Change: Very reputable customer.

Speaker Change: Customer is industrial leader definitely either you can go straight either number is another number one he is a member to.

Speaker Change: These are particular market segments. So we are very proud off.

Speaker Change: Having this opportunity to circle.

Speaker Change: So that.

Speaker Change: Excellent.

Kang Sun: Appreciate it.

Chip Moore: I'll take the rest of mine offline. Thanks.

Speaker Change: I appreciate it I'll take the rest of mine offline. Thanks.

Speaker Change: Yeah.

Jeff Grampp: Thank you. And we'll take our next question from Jeff Grampp from Alliance Global. Please go ahead, Jeff. Good afternoon. I had a question on the customer count metrics you guys provided. I think this was a new record, both for new customers as well as total, which I guess also kind of means it looks like existing customer count was also at a record.

Speaker Change: Thank you and we will take our next question from Jeff Gramm from Alliance Global. Please go ahead Jeff.

Speaker Change: Afternoon.

Speaker Change: I had a question on the on the customer count metrics you guys provided I think this was a new record both for new customers as well as total which I guess also kind of means it looks like existing customer count was also at a record. So I'm curious to drive into the are the main drivers of that in particular wondering.

Kang Sun: So I'm curious to drive into the main drivers of that, and in particular wondering, you know, is this PSI core expansion and the capacity that you guys have secured, would you say that's the main catalyst to the increased receptivity, if you will, from customers, that they feel more conviction in your ability to deliver in volume, or what other factors might you see at play to drive this acceleration? Just the first driver is our battery performance. There's no doubt about it, they couldn't get a battery with the same performance anywhere in the industry. I think that's the key driver.

Speaker Change: It is this site for expansion and the capacity that you guys have secured.

Speaker Change: Would you say that's the main catalyst to the increased.

Speaker Change: Receptivity, if you will from customers that they feel more conviction in your ability to deliver in volume or what other factors might you see a play to drive this acceleration.

Speaker Change: Just the first driver is our battery performance hasn't moved out about okay. They couldnt get a battery, whereas the same performance anywhere in the industry today I.

Speaker Change: I think that's the key driver that's the key traction troublesome.

Kang Sun: That's the key attraction for us in the marketplace. So before, you know, we have a capacity limitation. So our qualification process has been long and lengthy. For some customers, we had to give up because we don't have enough capacity to serve them. So the PsiCore introduction plus our contract manufacturing strategy works very well for us. And not only we have a sufficient capacity to serve the customer, also the customer is quite familiar with our manufacturing process.

Speaker Change: <unk> seen in the marketplace. So biff.

Speaker Change: Before and we have a capacity limitation.

Speaker Change: Qualification process has been lull in demand for some customers that we have we had to give up because we don't have enough capacity to serve them.

Speaker Change: So all.

Speaker Change: The south Koreans with oxygen plus our contracted and manufacturing strategies worked very well for us.

Speaker Change: We have sufficient capacity to serve the customer.

Speaker Change: So the customer credits with linear with our manufacturing process and we have a customer.

Kang Sun: We have a customer. November 18th, we have another large customer coming to China to look at our factory. That's why I will make a trip to Asia next week. So the driver is technology leadership and available manufacturing capacity, also manufacturing capability. Capacity and capability are two different things. Our manufacturing line can deliver quality.

Speaker Change: November 18th we have another large customer had come to China and to look out for a factory that's why.

Speaker Change: Because trips to Asia.

Speaker Change: Weak so the driver is our technological leadership and the.

Speaker Change: Variable manufacturing capacity or so manufacturing capability capacity and capability are two different things.

Speaker Change: Capability means that our manufacturing lines.

Speaker Change: Steve or quality.

Jeff Grampp: can't deliver the format and the form factor you want, also can't deliver on time. Great. That's really helpful details.

Speaker Change: So I can see reversed the format and the form factor you want.

Speaker Change: Or so cant deliver on time.

Speaker Change: Okay.

Speaker Change: Great. That's really helpful details for my follow up I was curious the that $20 million plus.

Jeff Grampp: For my follow-up, I was curious, that $20 million plus level order that you guys had a couple months ago now, given that that was for PsiCorps, you know, it really hasn't even been in the market, I think, for a full year yet, it would seem to suggest, I guess, a pretty quick qualifying period for the customer. I'm curious if, in your sense, that's unique for that particular need or how you're generally seeing customer qualification timelines changing, if at all, with PsiCorps and with, you know, some of your recent, you know, proof points, if you will, in de-risking this for customers.

Speaker Change: <unk> order that you guys had a couple of months ago now given that that was for Psi Corps, which really hasn't even been in the market I think for a full year yet it would seem to suggest a pretty quick qualifying period for the customer I am curious if in your sense, that's unique for that that particular need or how you're generally seeing a customer.

Speaker Change: Qualification timelines I'm changing if at all with.

Speaker Change: With <unk> and with our you know some of your recent.

Speaker Change: No proof points, if you will and Derisking that's for customers. Thanks.

Kang Sun: Thanks. Yeah, we accumulate sufficient data points for customers to review. Now, this is Amprius battery. We have a long history. Now, we have We have a lot of data available for various batteries for customers to take a look. So what dragged the qualification? Most times, not our batteries. that won't be the certification process. Now, for depend on the application, this particular application, the certification process is much simpler than other applications. For example, EVTOL, Battery Qualification, is much longer than the drone. The drone is much longer than light electrical vehicle. So it depends on the application.

Speaker Change: Yeah, we accumulate sufficient data.

Speaker Change: 0.4 customers, who we view this as a.

Here's the bad too we have a long history, we have I'll call it.

Speaker Change: We have a lot of data available for various batteries will constantly take a look so what's the drag of the qualification.

Speaker Change: Most times are not Hollywood battery, Okay, what would be the certification process.

Speaker Change: Now for us depends on the application at this particular application that certification process is much simpler than other applications.

Speaker Change: For example, you leave hall battery qualification is much longer than the chrome, but only so much longer that light electrical vehicles.

So.

Depends on the application the qualification.

Kang Sun: The qualification cycle could be quite short, quite quick. The customer can fairly quickly to qualify our battery. In this case, it is a 20-minute contract. We present our database. Customer did a very quick test to validate our data. At the same time, their qualification process is much shorter than other qualification processes. Got it. That's really helpful. I appreciate it.

Speaker Change: Cycle could it be quite a short.

Speaker Change: The customer count.

Speaker Change: Fairly quickly and to us to qualify our battery lease cases these honeymoon.

Speaker Change: Contract, we presented all with database customer did a very creek test validate our data.

Speaker Change: At the same time, they are a qualification process.

Speaker Change: Is much shorter than other qualification processes.

Speaker Change: Got it that's really helpful. I appreciate it thank you guys.

Operator: Thank you guys. As a reminder, that's star one.

Speaker Change: As a reminder, that star one if you do have a question or comment and we will take our next question from Ted Jackson from Northland Securities. Please go ahead Ken.

Ted Jackson: If you do have a question or comment, then we'll take our next question from Ted Jackson from Northland Securities.

Ted Jackson: Please go ahead, Ted. Thank you very much. Good evening or good afternoon to you. I've got a couple of questions that are still left on my list. One is with regards to the spending on the Colorado facility and its impact on your third quarter gross margins. You said, if I listened to the call correctly, that it was $2.4 million.

Speaker Change: Thank you very much good evening or good afternoon to you.

Speaker Change: I've got a couple of questions that are still left on my list. One is with regards to the spending on the Colorado facility and its impact on your third quarter gross margins.

Speaker Change: You said it well.

Speaker Change: To conclude the call correctly that it was $2 4 million first of all I want to verify that what you said and then secondly.

Sandra Wallach: First of all, I want to verify that's what you said, and then secondly, can I assume from your commentary that the spend for kind of the legwork for that facility is kind of ramped down and we could expect it to essentially be non-existent with the fourth quarter and going forward? That's my first question. Yeah, Ted. So the $2.4 million was based on cash flow for operating cash. That's what we spent in the third quarter. There's always a difference between the P&L and cash, but the $2.4 million is related to the P&L. I'm sorry, to cash.

Speaker Change: Can I assume from your commentary that the spend for kind of the the leg work for that facility is kind of a ramp down and nobody could expect it to essentially be nonexistent with the fourth quarter and going forward. That's my first question.

Speaker Change: Yeah, Ted so the 2.4 million lift based on cash flow for operating cash that's a what we spent in the third quarter. There's always a difference between the P&L and cash, but the two point for a million dollars related to the P&L I'm sorry to cash.

Sandra Wallach: And yes, we substantially completed all of the design and construction specifications in October. So we're expecting that to ramp down and drop to a very low rate until we're ready to spin back up and get started.

Speaker Change: And yes, we substantially completed all of the design and construction specifications.

Speaker Change: In October so we're expecting that to ramp down.

Speaker Change: And drop you know to a very low rate until we're ready to spin back up and get started.

Sandra Wallach: So what was the, um, you know, the, uh, the nut that was in your cogs for Colorado in the third quarter. Just kind of a, you know, an apples to apples comparison when I think about your fourth quarter. since that won't be in it. It was a little bit higher than the cash basis so it was Closer to... $2.9 million. Okay, so then just make sure I understand right. So all else being equal, if we had the exact same shipment levels in the fourth quarter that you had in the third quarter, that we would see your margin improved by just under three million bucks simply because of that?

Speaker Change: So what was the.

Speaker Change:

Speaker Change: Not that was in your Cogs for Colorado in the third quarter.

Speaker Change: Kind of a you know an.

Speaker Change: Apples to apples comparison, when I think about your work with your fourth quarter.

Speaker Change: Since that won't be in there anymore.

Speaker Change: Okay.

Speaker Change: It was a little bit higher than the cash basis. So it was.

Speaker Change: Closer to.

Speaker Change: A $2 9 million.

Speaker Change: Okay. So then just to make sure I understand right. So all else being equal if we had the exact same.

Speaker Change: Shipment levels in the fourth quarter that you had in the third quarter.

Speaker Change: That we would see your margin improved by just under 3 million Bucks simply because of that.

Sandra Wallach: Yes.

Speaker Change: Yes.

Sandra Wallach: Okay, again, our margin fluctuates based on the mix of Yep, that's why I do my caveat. So, yeah, my next my next thing is just a bit of clarification. And when you talked about the Fremont facility and having to put another million in it in the fourth quarter, Is that on top of, is that additional CapEx? Are you saying that your fourth quarter CapEx will basically be about $3 million? I mean at one million dollars. So it's $1 million to finish off the build-out for the balance of the up to 2 megawatt capacity. Every factory I've ever been with has some normal run rate of capex for replacement and upgrade, but it's not a material number.

Speaker Change: Okay.

Speaker Change: Again, our margin fluctuates based on the mix of.

Speaker Change: Yeah, that's right in your backyard.

Speaker Change: So yeah. My next my next thing is just a bit of clarification and.

Speaker Change: When you talked about.

Speaker Change: The Fremont.

Speaker Change: Fremont facility and having to.

Speaker Change: Put another million dollars in it.

Speaker Change: In the fourth quarter.

Speaker Change: Is that on top of it.

Speaker Change: Is that additional Capex are you, saying that your fourth quarter Capex will basically be about $3 million.

Speaker Change: I mean at $1 billion excuse me.

Speaker Change: So it's 1 million to finish off the build out for the balance of the up to two megawatt capacity every factory has ever been with has some more normal run rate of capex for replacement and upgrade so it'll it but it's not a material number.

Sandra Wallach: Okay, I mean, that's, that's helpful. And then when you and then and then I'm sneaking this in, but it's still on the free mountain, then I'll get out of line and come back in. But if I, when I listened to the commentary in red, you're expecting to exit. 2024 with two megawatts of capacity available at Fremont. That that will be. you know, that's, that's, you're there. Is that correct? So, we... We believe that we will be entering 2025. with the up to two megawatts of capacity. So two megawatts is the nameplate, and we've been ramping through that, but we've always said that we'll be up to two megawatts.

Speaker Change: Okay.

Speaker Change: That's that's helpful. And then when you and then this I'm speaking to send but it's still on the Fremont and then I'll get out of line and come back in but if I when I listened to the commentary in Red Youre expecting to exit 2024.

Speaker Change: With two megawatts of capacity available at Fremont, but that will be.

Speaker Change: Yeah. That's that's the year there is that correct.

Speaker Change: So we.

Speaker Change: We believe that we will be entering 'twenty 'twenty five.

Speaker Change: With the up to two megawatts of capacity. So two megawatts is the nameplate.

Speaker Change: And we've been ramping through that.

Speaker Change: But we've always said it will be up to two megawatts.

Sandra Wallach: Okay, that's fair.

Speaker Change: Okay. That's fair that's fair I'll step out of line and let somebody else jump in thanks.

Ted Jackson: That's fair. I'll stop by the line and let someone else jump in. Thanks.

Speaker Change: Yeah.

Speaker Change: Okay.

Operator: And at this time, this concludes our question and answer session. If you have any additional questions, you may contact Amprius' Investor Relations Team at IR at Amprius.com.

Speaker Change: And at this time this concludes our question and answer session.

Speaker Change: Do you have any additional questions you may contact <unk>.

Speaker Change: After relations team the IR at <unk> Dot Com I would now like to turn the call back over to Doctor Stan for his closing remarks.

Kang Sun: I'd now like to turn the call back over to Dr. Sun for his closing remarks. Thanks again everyone for joining us today. As a reminder, you can find out more about our company, receive additional updates, and learn about upcoming events and presentations from the investor relations section of our website. We hope to see you at one of our upcoming events, and we'll continue to update you on the exciting progress we are making in transforming the electrical mobility market. Finally, I'd like to thank our employees, partners, and the shareholders for their continued support.

Speaker Change: Thanks again, everyone for joining us today as a reminder, you can find out more about our company receive additional updates and to learn about the upcoming events and presentations from the Investor Relations section of our website.

Speaker Change: We hope to see you at wildfire upcoming events and we'll continue to update you on the exciting progress we are making in transforming the electrical mobility market finally, I'd like to thank our employees partners shareholders for their continued support.

Operator: I'll be there.

Speaker Change: Peter.

Speaker Change: Yeah.

Operator: Thank you for joining us today for Amprius Technology's third quarter 2024 earnings conference call.

Speaker Change: Thank you for joining us today for <unk> technologies third quarter 2024 earnings Conference call. You May now disconnect and have a great day.

Operator: You may now disconnect and have a great day. you

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].