Amprius Technologies Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 8, 2024

There are 9 speakers on the call.

Operator

Good afternoon. Welcome to the Amprius Technologies Second Quarter 2024 Earnings Conference Call. Joining us for today's presentation are the company's CEO, Doctor. Kang Sun and CFO, Sandra Wallach. At this time, all participants are in listen only mode.

Operator

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 new applications, and the timing and ability of Amprius to expand its 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. For a more complete discussion of these risks and uncertainties, please refer to Amprius' filings with the Securities and Exchange Commission. 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.amprias.com.

Operator

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 Ambrius Technology's CEO, Doctor. Kang Sun, for his comments. Sir, please proceed.

Speaker 1

Welcome, everyone, and thank you for joining us this afternoon. On today's call, I will give you an overview of our Q2 accomplishments, while also highlighting some of our upcoming milestones we are expecting later this year. Our CFO, Sandra Wallach, will then discuss our financial results of the period. After that, we will share some closing remarks before opening the call for questions. Before I give a recap of the quarter, I would like to briefly introduce Ampere to those who may be new to our company.

Speaker 1

At Amperes, we develop, manufacture and market high energy density and high power density batteries with applications across all segments of electrical mobility, including the aviation and the EV industries. Today, Ampere's commenced performance leadership in its completion of battery, energy density, power density, charging time, operating temperature range and safety. Across our battery portfolio, we offer unmatched performance amongst commercially available batteries. Ampria has been delivering commercial battery to the market with up to 4 50 watt per kilo and 11.50 wattler per liter, 10C power capability, the extreme fast charge rates of 0% to 80% state of the charge in approximately 6 minutes the ability to operate in a wide temperature range of -30 degrees Celsius up to 55 degrees Celsius and the safety design features that enable us to pass the United States military's benchmark Neo Penetration Test. Each of these performance parameters is critically important to real world electrical mobility applications.

Speaker 1

Not only do our battery enable certain aircraft and vehicles to maximize performance, but enable our customers to achieve their economic targets as well. In addition to what is commercially available today, we have also achieved 3rd party validation of our latest 500 Whkg, 1300 Wh Per Liter battery platform. This battery will be ready for commercial shipment later this year. It's our belief that there are no other commercial batteries on the market that can perform at these levels today. Ampeus is a silicon anode battery technology pioneer with over a decade of development experience, producing a strong patent portfolio of over 80 issued patents and patent applications, and the long track record of commercial shipments and customer accomplishments.

Speaker 1

Turning to the 2nd quarter results, Ampere had a very productive quarter. We delivered new high performance batteries to the market, developed the larger manufacturing capacities, and engaged with new customers and the new market segments. The launch of Ampere's side core battery early this year has excites our customer base and attract new customers. It also enable Amperes to explore new market segments. Since the launch, we have seen continued demand for cycle battery in aviation, electrical transportation and other industrial applications.

Speaker 1

Amperes has recently further optimized our cell chemistries and cell designs, allowing us to deliver the battery with enhanced performance to the market. One of these high performance batteries is Ampere's SA11 battery. This is an energy and power balanced battery based on Ampere's Cycore cell chemistry. This 30 amp hour cell offers 3 50 watt per kilo with 7 100 cycles. The performance and the cell format are specifically designed for certain electrical mobility applications, such as the eVTOL and the drone market.

Speaker 1

Another battery we delivered in the Q2 is Ampeus SA17. This is the highest known energy density cylindrical battery with this format in the industry. Following the success of our 18,650 battery that was released in January, recreate a larger version of the cylindrical battery, the 2,1700. The larger SC17 offers 6 Ampere Hour Energy, providing customer dropping replacement for those that currently use 5 Ampere Hour batteries. The ASA17 enable us to further target the micro mobility segment, including 2 wheeler applications like scooters and e bikes, as well as other applications in aviation and the industry equipment.

Speaker 1

With these new additions, Ampere has 14 SKUs in our product portfolio. Our battery offerings cover the entire performance map of our customer commercial applications, energy, power, cycle life, charging time and more. The combination of Ampere's CEMEX and the cycle platforms enable us to tailor our cell chemistry for various customer requirements. Both Ample's CEMEX and cycle batteries can be high energy and high power solution for EVs. This quarter, we made a material progress toward delivering the 100 amp hour EV form factor battery cells to the United States Advanced Battery Consortium or USABC.

Speaker 1

The cell we have developed will meet or exceed all 2023 USADC low cost fast charging EV cell characteristics, including exceptional fast charging performance and usable energy in a low cost battery solution. This development was under a $3,000,000 cost sharing contract from the US ABC in collaboration with the United States Department Energy. Ampere's high performance batteries have continuously received attention from customers in various market segments. In many cases, Ampere's batteries are the only known commercially available batteries that meet the customer requirements in technical performance and application economics. In Q2, we shipped to 56 customers.

Speaker 1

Of those, 24 were new customers across the electrical mobility sector, complementing strong repeat volume orders from our long time partners such as AeroVironment, Teledyne FLIR, CLAUS AMDAU System. This compilation of 2,000 new customers and the volume of shipments to returning customers allowed us to double our quarterly revenue output compared to Q2 last year. Geographically, we record a 41% year over year increase in shipments within the United States and a robust 2 71% increase in shipments to the rest of the world. With these improvements, we record 50% of total revenue in the Q2 from outside of the United States. Look at the forward demand, we locked $7,600,000 in new sales orders during the quarter, which translated to a 32% increase in our net backlog at the end of Q2 versus Q1.

Speaker 1

During the quarter, we also secured additional orders from non Based on order size and timing, Ampere will now be delivering CEMEX 4 50 watt per kilo high energy battery cells to auto Airbus through 2025. These battery cells will continue to supply the necessary power and endurance for auto Airbus project zephyr Stratospheric Flight Operations. In Q2, we also entered into 3 different partnerships with leading PEG designers and manufacturers. These partnerships are critical as they allowed us to broaden our sales reach and offer our next generation batteries to each manufacturer's respect customer base. With the increase in customers, Amperes has developed a significant manufacturing capacity in the Q2.

Speaker 1

The company took several steps forward to expand both our CEMEX and Saiccor product capacity. For Saiccor, we currently have 3 well equipped and very experienced largest scale manufacturing partners in Asia, providing over 500 Megawatt hour of production capacity across both pouch and the cylindrical battery cells. Amperes today has access to approximately 10,000,000 pouch sales and 125,000,000 cylindrical sales annually. These arrangements provide us with mass global production capacity and they ensure that we deliver our products in a timely manner while maintaining the quality our customers expect. More importantly, the contract manufacturing partnership model allows us to eliminate the upfront capital expenditure, while ensuring immediate capacity to accelerate our sales.

Speaker 1

We are also planning a manufacturing facility in Brighton, Colorado. We have now completed roughly 60 percent of the construction design drawings and specifications for the facility. We remain on track from a regulatory standpoint, having recently submitted our Fed plan and advanced or other regulatory plans and applications for the facility. As we previously discussed, the initial production line in Colorado will be focused on cycle manufacturing, given the more immediate opportunities we have identified for the cycle platform and specifically for customer requesting a U. S.-based supply chain.

Speaker 1

We continue to make important progress to ramp up our facility in Fremont, California. In the Q2, we completed the qualification process for our central thermal machine, which is used in silicon anode fabrication process. Looking further ahead, we remain on pace to scale our Fremont production reach at the end of the year to up to 2 megawatt hours scale. This includes implementing CEMEX cathode production in house to streamline our manufacturing process. We plan to have this capacity up and running in 3 months later this year as well.

Speaker 1

Breakthrough performance of Ampere's battery has continued to gain recognition from the battery industry. The company 500 Whaler Per Kale Battery was selected by Fast Company Magazine for its 2024 Innovation by Design Awards. Ampleas also recognized the CleanTech Breakthrough Awards as the Battery Technology Company of the Year in its inaugural event. Invited by the Taiwan Battery Association, Ampeze hosted its 1st Ampere's battery program in Thailand in April, where over 100 attendees from the industry leading companies and institutions learned about Ampere's Briggs silicon anode battery technology and the partnership opportunities. The 4M received significant interest from potential customers, industrial partners and the Taiwanese investment community.

Speaker 1

The momentum built in Q2 has given us a strong tailwind in Q3 as well. Recently, we were awarded a $1,900,000 contract from the U. S. Army's X Tile Primer Program to develop a large form factor, 500 War Per Kilocenic Energy density cell for electrical mobility applications in the defense sector. The recognition of this breakthrough technology by the U.

Speaker 1

S. Military opens much broader applications of our 500 watt of kilo battery that is available only from Amperes today. In summary, we believe we poised for a strong second half of the year, thanks to our increasing sales outlook, growing customer engagements, expanded production portfolio and high volume manufacturing capacity build up. We are working hard to execute our goals and expecting to continue our momentum through 2024, leading to a great 2025. With that, I will now turn the call over to our CFO, Sanjay Walich, to review our financial results for the quarter.

Speaker 1

Sandra?

Speaker 2

Thank you, Cang. 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 2nd quarter with $3,300,000 in total revenue. As we have previously discussed, our total revenue is a combination of our main revenue streams, product revenue, development services and grant revenue.

Speaker 2

This quarter, all $3,300,000 came from our product revenue. As we've discussed in prior quarters, our development services revenue comes from development programs that are non recurring in nature. On a sequential quarter over quarter basis, our product revenue increased $1,000,000 or 43 percent and compared to prior year, revenue increased $1,700,000 or 105%. These increases were driven by shipments to 56 customers in the quarter. Although our product revenue remains largely driven by customer purchase orders that can arise at uneven times throughout the year, we have shown consistent new customer growth and diversification in recent quarters.

Speaker 2

As Cain mentioned, 24 of the 56 customers this quarter were new customers. Also, 3 customers this quarter represented greater than 10% of revenue compared with 3 in Q1 twenty twenty four and 5 in the same period last year. Going forward, we will continue adding to our customer mix to diversify our revenue streams and provide more reliable product output as we get to a position of scale. Moving to our profitability metrics, our gross margin was negative 195% for the quarter, compared with negative 109% in Q1 2024 and negative 186% in the prior year period. As a reminder, we see significant gross margin variation as our product and service revenue mix fluctuates.

Speaker 2

Also, our gross margin continues to be impacted by pre construction costs related to the Colorado facility. Longer term, we are confident that our GAAP gross margin will begin to normalize as we approach our capacity expansion goals. Now on to our operating expense management. Our operating expenses for the 2nd quarter were $6,400,000 an increase of $500,000 or 9% compared with Q1 2024 and a decrease of $700,000 or 9% from the prior year period. The quarter over quarter increase was driven by G and A stock based compensation.

Speaker 2

The year over year decrease is primarily attributable to reductions in G and A costs that were offset by investment in R and D and sales. Our GAAP net loss for the 2nd quarter was 12,500,000 or a net loss of $0.13 per share with 97,000,000 weighted average number of shares outstanding. In Q1, twenty twenty four, net loss was a negative $0.11 per share with 90,000,000 weighted average number of shares outstanding. And in Q2 2023, net loss was also negative $0.11 per share with 85,200,000 weighted average number of shares outstanding. As of June 30, 2024, there were 88 full time employees, up from 81 in the 1st quarter 72 in the prior year same period, with those employees primarily based in our Fremont, California location.

Speaker 2

Our share based compensation for the Q2 was 1,900,000 compared to $1,200,000 in Q1 $900,000 in the prior year period. As of June 30, 2024, we had 108,000,000 shares outstanding, which was up 15,700,000 from the prior quarter and primarily related to the recent work we've done to clean up our cap table, which I'll now discuss. During the Q2, we completed a cash tender offer, which provided a temporary exercise period with a reduced cash exercise price for our private and public warrants. In the cash tender offer, we were able to reduce the number of warrants outstanding from approximately $47,700,000 to approximately $34,600,000 and raised net proceeds of $14,200,000 We have also closed a second tender offer that allowed cashless exercise of the private warrants, which resulted in the extinguishment of $15,600,000 of the $15,900,000 total outstanding in exchange for the issuance of 3,100,000 shares of common stock. In total, more than 60% of the original warrants are no longer outstanding.

Speaker 2

Turning now to the balance sheet, we exited the 2nd quarter with $46,400,000 in net cash and no debt. Compared to Q1, we recorded a net increase of $7,400,000 in cash. Key drivers of our cash activity for the quarter were $17,000,000 of cash inflow added with $14,200,000 netted from the cash tender offer and $2,800,000 of cash inflow added primarily the usage of our ATM. Dollars 8,000,000 used in operating cash flow, we continue to remain lean with a $2,000,000 to $2,500,000 run rate per month, excluding transaction related costs and $1,600,000 used to continue build out of our expanded 2 megawatt production line in Fremont and move our Brighton, Colorado facility forward. Considering our business achievements and ongoing projects, we believe we are efficiently using capital to drive Amprius forward.

Speaker 2

Before I turn the call back over to discuss our outlook for the remainder of the year. We expect to spend another $1,000,000 to $2,000,000 on equipment to support the 2 megawatt line in Fremont. This includes the necessary tools to have our cathode line up and running by the end of the Q4 of this year. As Cang mentioned, we're also finalizing the pre construction work for our Colorado facility. The first line will be for SCICOR manufacturing.

Speaker 2

This allows us to use conventional off the shelf processes, which will help us provide a high confidence schedule and cost. The total facility will have room to accommodate 3 to 5 gigawatts of capacity to support both Cymax and SCICOR production. The construction scope and schedule for the facility will be determined based on the final design and the availability and timing of funding. In addition, we're paying close attention to the larger industry dynamics. Changes in demand, supply, battery cost structure, government incentives, trade tariffs and other considerations would also influence our decision.

Speaker 2

To support our strategic plan, we are regularly evaluating our capital resources, including sources of funding that provide the optimal cost of capital for our current production needs. These sources include both equity issuances such as sales under our ATM or warrant exercises and non dilutive sources such as grants, loans and incentives. That concludes my financial discussion and I will now pass the call back to Kang.

Speaker 1

Thanks, Andrew. As we look ahead, our strategy at Ampere has remained unchanged. Our top priorities are innovating in next generation battery, growing our customer base and scaling our manufacturing capacities. We have repeatedly demonstrated unmatched breakthrough battery performance in our industry, amending a firm technology lead with our cell combination of safety, energy, power, charging time and the temperature performance. Our batteries are uniquely positioned for electrical mobility market and they are globally available right now.

Speaker 1

Our breakthrough technology are already validated by our growing book of customers. This quarter alone, we shipped to over 56 customers, as we continue to expand our portfolio of offering to meet a greater range of user cases, we expect significantly more traction with customers. We have developed the contracted manufacturing capacities that support annually over 10,000,000 pouch battery cells and 125,000,000 cylindrical cells for our side core batteries. We are also expanding our Fremont production capacity for CEMEX battery production and finalizing our design process for our Gigawatt hour factory in Colorado. Look ahead, we have several upcoming milestones in the second half of the year that align with our main priorities.

Speaker 1

We expect to fully optimize our CEMEX production process and the ramp up of production to up to 2 Megawatt hour run rate exiting the year at our Fremont facility. This will represent a 10 fold increase in our production levels that we had exited in 2023 and give us additional capacity coming online through 2025. We intend to use this expanded capacity to continue growing our new customer order book as well as move existing strategic customers on the technical to commercial validation process for the CEMEX product. We're looking forward to bring additional new customer segments and expanding applications with our current customers as we're leveraging our unmatched commercially available performance and hundreds of megawatt hours cycle production capacity through our contract manufacturing partnership that are in place today. We also expect to finalize the design plan and the permitting for our Brighton, Colorado facility, which will include Sycor as the first line.

Speaker 1

We will deliver the 100 Ampere EV Form Factor sale to the U. S. ADC as part of our grand program in coming weeks. This will make a major milestone and a practical step for Amperes as we move into the EV market. We continue to bring the market new and innovative products that push the boundaries of what is possible for our industry.

Speaker 1

As part of this, we look forward to commercializing our 500 Wacker CEMEX sales later this year. We believe that the opportunity in front of Ampere is tremendous. We have what we believe are the best performing commercial battery in the industry. We have added 100 of Megawatt hours production capacity available to us. We have a strong customer portfolio and pipeline.

Speaker 1

As we have demonstrated, we will execute the plan and deliver the results. We look forward to carrying the momentum from the first half of the year into the rest of 2024 and delivering on what we have planned and promised. Over the next few weeks, we'll also be attending several industry and financial conferences. Will be participating in the UBS Energy Transition Call Series on August 14, the Leaden Industrial Tech Robotics and the CleanTech Conference on August 1920th the Gateway Conference on September 4 the H. V.

Speaker 1

OneRite Conference on September 9 10 the Oppenheimer Sustainability Summit on September 24. We look forward to speaking with many of you at these events and over the coming days. Thank you for your continued support of Amprius Technology. With that, I will turn it back to the operator for Q and A.

Speaker 3

Thank you. The floor is now open for questions. Our first question comes from Colin Rusch from Oppenheimer. Go ahead.

Speaker 4

Thanks so much guys. You've got an impressive customer list and it continues to grow. As you brought on the potential side core capacity, can you talk a little bit about the design cycles and the cycle times for when we might start seeing some of those customers start to drive more significant volumes?

Speaker 1

Yes, Collin, we introduced the SIC Core early this year in January 2024. So the customer need to go through the qualification, 2 steps of qualification. The first thing is the product qualification. That normally takes 9 to 12 months. So after that today is the production qualification.

Speaker 1

We already have a customer start of the second stage of the qualification. In September, we will have customer come to our manufacturing site to look at our manufacturing facility. So normally, this takes 9 to 18 months, depends on the size and the complexity of the project.

Speaker 4

Great. And then, as you look at the ramp up in Fremont, can you talk a little bit about any sort of surprises that you're running into as you start getting a little bit more into the meat of that ramp up?

Speaker 1

Fremont, we qualify the Fremont, the first the most important thing is to grow the silicon nanowire, that's the CEMEX product. We already qualified the central thermos tool for silicon nanowire growth. That's the step we have. But the entire manufacturing process need to be optimized to reach the nameplate capacity. So we in the next few months will be the time for us to develop and optimize those process.

Speaker 1

By end of the year, we will have this is our plan, the end of the year, we should have better facility in full production.

Speaker 4

Thanks so much guys. I'll take it offline.

Speaker 3

Thank you. And the next question comes from Chip Moore from ROTH. Go ahead, Chip.

Speaker 5

Thank you. Hey, everybody. Thanks for taking the question. I wanted to ask about the I think it was $7,600,000 in new bookings that you mentioned. Is that all Cymax?

Speaker 5

And how should we think about timeline on those orders?

Speaker 2

That's across both SINAX and Xicor and most of those are for the upcoming quarters.

Speaker 5

Got it. So most of that in the back half of the year is a fair assumption?

Speaker 2

Right. With the exception of some large purchase orders that we got from eligible Airbus, which include committing capacity through 2025. But I would say the majority of it is for the next couple of quarters along with the backlog that we had coming into the quarter.

Speaker 5

Got it. Okay. That's helpful. Thanks, Sandra. And then maybe just my follow-up, You mentioned maybe some factors that might impact Colorado.

Speaker 5

I think it was maybe scope and schedule. Just any more detail there on how you're thinking about things right now and what you might contemplate as some key swing factors?

Speaker 1

Chip, there are many factors. You know the last 12 months, the battery industry has changed significantly. The supply, the demand, the government policies, there are many possible factors that could influence our design and influence how we operate at the factory. So we need to wait for a couple we have not stopped moving forward. We just have not put all the effort and accelerated the process.

Speaker 1

We finished the 60% of design. We are working on 90% design, we finished most of the regulatory issues, we are moving forward with caution, not just us, the entire industry now will pay attention to the supply and the demand and the cost of operation and the government incentives today or government incentives in the future.

Speaker 5

Understood. Yes. We'll see what happens, right, in November as well. Okay. Thanks very much.

Speaker 3

Thank you. And our next question comes from Jeff Grampp from Alliance Global Partners. Go ahead, Jeff.

Speaker 4

Afternoon, everyone. I wanted to touch on the customer count, was down a bit sequentially, but obviously Q1 was a super strong quarter for you guys from a customer count perspective. I'm wondering how you guys are interpreting that. Do you see customers order and then maybe take a few months or a couple of quarters to kind of assess and then potentially come back where some of these maybe anticipated one offs, so perhaps that Q1 was inflated. Just wondering how you guys are interpreting that customer count change from Q1 to Q2 and how you see it going forward?

Speaker 1

Customer account change does not mean we have less customer, Jeff, because of the pharma customer, they acquired the sample, they take time to evaluate the sample. During this period of time, we did ship to them additional samples. So they are not accounted for our shipment.

Speaker 4

Understood. Okay. Thank you. And for my follow-up, I'm curious the customer receptivity with Saiccor is obviously very strong. You have the 3rd parties that obviously have a lot of capacity, but at the same time you guys are focused within Colorado on SCICOR.

Speaker 4

I'm curious, do you expect customers will only order from a U. S. Domiciled SCICOR facility or would that kind of be a natural transition as you stand that facility up whereby you're fulfilling that through your tolling partners and then over time would transition that once Colorado is online? Like what is how important is that for customers having that U. S.

Speaker 4

Supply chain in place?

Speaker 1

Most of the customers only 2 parameters, quality and the cost. Another one is the performance. We have leading performance batteries, but they expect us our factory to deliver quality and the cost and the affordable cost. So for now, I would say majority of the customer really don't pay attention where the battery are made. Of course, we have some special application that require we make batteries in the United States.

Speaker 1

So we developed a significant manufacturing capacity there. You can see we have over 10,000,000 partial cell available to us in 2024. We have over 100,000,000 cylindrical cell manufacturing capacity available to us in 2024. So, the manufacturing for Thicore is no longer manufacturing capacity for Physicore is no longer an issue for us. We just need to sell more.

Speaker 1

At the same time, we do have a customer hope we can produce domestically. So we are working on that, okay, that's the Colorado. In addition to that, we are also planning to have more manufacturing partners in other region, for example, in Europe.

Speaker 4

Okay, great details, Ken. Thank you guys for the time.

Speaker 3

Thank you. And our next question comes from Donovan Shafer from Northland Capital. Go ahead, Donovan.

Speaker 6

Hey, guys. Thanks for taking the questions. So first, I want to ask, in the letter to shareholders, you mentioned that 50% of the Q2 deliveries or revenue was from outside the U. S. Is that a mix that we would expect to continue going forward or was that kind of an outlier for the quarter?

Speaker 1

So, Jonathan, in last year or earlier, our primary focus is in U. S. And some in Europe, such as Airbus. So now we want to go globally, okay. We want to expand our market reach and that means not just the U.

Speaker 1

S, not just Europe, okay, we're including Asia in our market engagement.

Speaker 6

Okay. And then with the ATM, if you can just give us an update whether there has been any usage of the ATM so far into the Q3?

Speaker 2

Yes. So we have not been active on the ATM in the Q3.

Speaker 6

Okay. And then just one last one to squeeze in is for the milestones for the rest of the year, when you say you plan to finalize design drawings for the Brighton facility by the year end, does that mean mean does it follow the same goal or that we can have the expectation that there will be a cost estimate by year end as well or could that take longer?

Speaker 1

By year end, we would have more accurate cost estimation. We do have cost estimation today, but based on 60% design, we like to finish this design before year end and have the cost estimate, more accurate cost estimate. And the entire construction market and the materials market, the raw materials for construction, all those things have been very dynamic. So we up date our information almost on a monthly basis. So before end of the year, we should have regulatory issues resolved and we should have a design finished, we should have a construction cost estimate.

Speaker 6

And then we'll continue. And would you expect to share the cost estimate publicly at that time?

Speaker 1

We will see how I created the data, Sanjay.

Speaker 2

Yes. I think it depends on how quickly we're going to move the facility forward. And I think that's the part that we're still evaluating.

Speaker 7

Okay.

Speaker 6

All right. That's helpful.

Speaker 1

Thank you. I'll take the rest.

Speaker 6

Okay. Okay.

Speaker 3

Thank you. Our next question comes from Ryan Fiske from B. Riley. Go ahead, Ryan.

Speaker 8

Hey, thanks for taking my questions. Just a follow-up on some commentary you had earlier. Could you just tell us what some of the risks are on the policy side if we do get a change in administration in November?

Speaker 1

That one is difficult for us to comment, right. All those are speculations, right, there is no effect at this moment. For us, not just the government incentives, we need to look at the market dynamics. At this moment, the manufacturing capacity for our cycle product is not an issue. We have tremendous manufacturing capacity behind us.

Speaker 1

At the same time, we are developing our CEMEX manufacturing capacity here. So the company has a product, has a manufacturing capacity. We have a customer base, we just need to accelerate the customer modification and process to grow the revenue.

Speaker 4

Fair enough. And then understanding that EVs are a

Speaker 8

longer term focus, but wondering if you had an update on your engagement with OEMs and if we might see related announcement in the near term there?

Speaker 1

As we mentioned earlier, last few calls, we do have engagement with all segments of electric mobility including EVs, But we don't have commercial products for EV customers, but we do have technical exchanges.

Speaker 4

Got it. Thanks for those answers.

Speaker 3

Thank you. And our next question comes from Amit Dayal from H. C. Wainwright. Your line is now open.

Speaker 7

Thank you. Good afternoon, everyone. Most of my questions have been asked. Just one question around the Colorado facility. Are we fully committed to building this facility out or in the for preserving the balance sheet and capital etcetera, as you scale up, could you potentially both contract manufacture both the SCI COR and SCI MAX offerings while you build the market for these products?

Speaker 1

In terms of cycle manufacturing capacity, we have a plan probably can support us for the next few years. Even today, this year we have 10,000,000, next year we will have much more capacity available to us. In better sense, there is no additional capacity needed. However, we consider as a manufacturing company, we do need to have our own manufacturing facility. So that's why we are still working on the Colorado factory, as Sandro mentioned it before, many factors needed to be considered, okay, and we will see what kind of design, what kind of capacity we need in Colorado, because the market has been changed compared to 2 years ago.

Speaker 1

So we need to reevaluate our design, the scale of our own factory in the United States. The manufacturing capacity for SAICOR, as I mentioned, is no longer the issue for Amperes.

Speaker 7

Understood. I'm just trying to get a sense when by when you might make that call because it gives investors a sense of how you can use your balance sheet to progress the commercialization efforts?

Speaker 1

Understood. We at this moment, we're still working on the project, because we need to see the market dynamics. The market is changing very fast. I think at the end of the year, not just the market dynamics or so the political dynamics will influence what we are going to do.

Speaker 7

Okay. That's all I have guys. I'll take my other questions offline. Thank you. Thanks.

Speaker 3

At this time, this concludes our question and answer session. If your question was not taken, you may contact Amprius Investor Relations team at iramprius.com. I would now like to turn the call back over to Doctor. Sun for any closing remarks.

Speaker 1

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 the presentations from the Investor Relations section of our website. We hope to see you at one of our upcoming conferences and we'll continue to update you on the exciting progress we are making in transforming the electrical mobility market. Finally, I would like to thank our employees, partners and shareholders for their continued support. Operator?

Speaker 3

Thank you. Thank you for joining us today for Amprius Technology First Quarter 2023 Earnings Conference Call. You may disconnect your lines at this time and have a wonderful day.

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