Earnings call transcript: Ensurge Micropower Q1 2025 reveals innovation push

Ensurge Micropower ASA (ENSU) held its Q1 2025 earnings call, showcasing significant advancements in battery technology and operational updates. Despite the lack of specific financial metrics, the company highlighted its robust R&D investments and strategic initiatives, which have kept investor interest steady. The stock saw a minor dip of 0.81% to 1.22 USD, remaining within its 52-week range.

Key Takeaways

• Development of a new 11-layer solid-state battery technology.
• Investment of approximately $400 million in R&D, funded entirely through equity.
• Transition to a new manufacturing line aimed at improving precision and yield.
• Strong customer pipeline with 120+ commercial prospects.

Company Performance

Ensurge Micropower continues to position itself as a leader in the micro solid-state battery market. The company's focus on innovation is evident in its development of a new 11-layer battery technology, promising faster charging times and higher energy density. This technological leap is expected to bolster its competitive edge, especially as it targets sectors like wearables and medical devices.

Financial Highlights

• No revenue or EPS figures were disclosed.
• Significant R&D investment of $400 million.
• Strong balance sheet with no reliance on public funding.

Market Reaction

While the stock has seen recent volatility, with a notable 36.67% gain over the past six months despite the recent weekly decline, market sentiment remains cautiously optimistic. InvestingPro 's Fair Value analysis suggests the stock may be undervalued at current levels, while analysts project an impressive revenue growth forecast of 4,769% for FY2025. The company's overall Financial Health Score is categorized as 'Weak', suggesting investors should carefully monitor its progress toward profitability.

Outlook & Guidance

Ensurge plans to deliver its first batch of 150,000 batteries in the second half of the year. The company is exploring multiple business models, including limited in-house production, partnerships with material suppliers, and licensing its technology. These strategic moves aim to capitalize on its first-mover advantage and expand its market reach.

Executive Commentary

Chairman Thierry Rongne emphasized the transformative potential of Ensurge's technology, stating, "We are very steadily building a powerful technology platform that will allow us to bring this out to customers and transform that to financial excellence." CEO Lars Eikilam highlighted the importance of cycling milestones, noting, "The cycling, when you say 50%, it's a kind of a milestone on the way to higher cycling."

Risks and Challenges

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• Potential increase in import duties by 10-15% could impact costs.
• Uncertainty around immediate financial impact from new manufacturing processes.
• Competitive pressures from companies using alternative substrates.

Q&A

During the Q&A session, analysts probed into Ensurge's customer enthusiasm and potential tariff impacts. The company confirmed strong customer interest and noted that current trade tariffs have not significantly affected operations, although future import duties could pose challenges.

This comprehensive focus on innovation and strategic growth initiatives positions Ensurge Micropower for potential long-term success in the evolving battery technology market.

Full transcript - Ensurge Micropower ASA (ENSU) Q1 2025:

Moderator/Host, EnSearch Micropower: Welcome to this Q1 presentation of EnSearch Micropower. Today, we have with us Chairman of the Board, Thadde Rongne and we have with us CEO, Lars Eikilam.

Thierry Rongne, Chairman of the Board, EnSearch Micropower: Thank you. Okay. Welcome to this company update. This is actually the first quarterly company presentation and it marks a new era for this company after six very heavy, tough ruling R and D efforts, strong testing period, moving very sturdy towards where we are and having spent some $400,000,000 financed through equity by our shareholders and a notice to that, not a single penny from public funding different to most other battery technology adventures. We are now ready to bring our technology to customers to the market.

So, starting bringing you back to February 2024, that was the first time we managed to have a well functioning battery cell. Since that time, as I said, it's been a very disciplined progress towards April of this year when we were able to stack, encapsulate, and cycle up to a reasonable number of charging cycles, a battery that we were comfortable with, that we could demonstrate and leave at a customer premise. So when you saw the enthusiasm and the joy, the energy from our customer looking and playing with this battery, then yes, it's it's a confirmation that we are truly doing something game changing. It's a battery that has extreme fast charging time. It's a battery that is safe and it has a number of features and functionalities that you don't find in any other battery technology.

We have steadily been improving yield and our capacity. Since that presentation demonstration, we've also seen a very solid activity increase from customers, from partners and internally driving our focus, not at the expense of, but in addition to continuous technology product development. Now we're also putting much higher emphasis on the commercial side of our business. We want to capitalize on the investments that our shareholders and all the hard efforts that have been put into this over a period of six years. We're also seeing a new type of customers, medtech customers and it's almost like looking rather than looking into the mirror driving a car where you propose this battery technology to existing users of battery technology into the med tech field where customers they are not allowed to bring their gadgets into the market due to lack limitations of current battery technology.

So now being increasingly so part of the med tech industry and opening up for all these new electronic gadgets that are either on you or inside you, that is very rewarding and enticing new dimension to our company. Yes, we have increased our focus now as we are ready with the 11 layer battery. So we are now increasing our focus on joint development agreements. In terms of strategic partnerships, yes, we have few partners that are increasingly so knocking on our door and we have advanced quite considerably with particular one. We've stated what we want, where we are and what we're prepared to do.

Now it's up to them to continue. In the meantime, we are accelerating our joint development agreement activities with alternatives and other customers and potential partners. Same time, we are accelerating our technology roadmap through these partnerships both in terms of energy density and form factor. At the end of these customer relationships, it's naturally that this moves into some sort of a licensing royalty agreement, because we will never be a large volume producer. And with this battery technology that will open up for high volume IoT related electronic gadgets, it's natural for us to license out our IP and ensure that customers preferred volume producer are able to apply our IP and produce according to the specifications.

Our focus now is to continue to drive this battery technology towards higher layer batteries. First and foremost is our 28 layer battery and second to that, a 43 layer battery. Those are the specified targeted type of standardized batteries that we are moving towards. In order to do so, we need we need to increase the number of battery cells, and we're doing so quite aggressively, and we are moving that into a new production line that allows us to do so. And towards the end of the year, in the second half, yes, we ambition to start delivering on our first customer account, some 150,000 batteries.

So that would be a quick summary of the process progress and state for Lars, do you want to take it into where are we

Lars Eikilam, CEO, EnSearch Micropower: in terms of technology and the capacity and the features? Yes, I can do so. Thank you. Good afternoon, everybody. Good morning, wherever you are.

I'm going to go through a couple of slides where we show a bit more, maybe a bit more details about what Thali summarized in the opening session. So one of the things that we have been talking about is the fast charging and also the post discharge. And we had an ambition to starting with an ambition that we should be twice as fast as the incumbent batteries. And in fact, throughout our sort of production testing and everything, we are in fact more or less five times as fast now. So we can charge the battery using eight minutes to get it up to 80% and fully charged battery at twenty four minutes, which is significantly five times faster than incumbent batteries, if you take the move on.

And then we have a 12.5c post discharge. This specific customer said that we need, we probably need 5c with of post discharge. We think it's driving a 20 milliamp pulse. But it turned out that in fact, this was requiring 50 milliamp. So our four milliamp battery could do that over thirty seconds where we have two 50 microsecond pulses going back and forth to measure blood oxygen, for instance, we measure then 12.5 C, which is quite unique, to be honest.

In terms of commercial customers, we have our pipeline which has been steadily growing and sort of probably accelerating a bit after we did our demo, 120 plus. And you see it's a good mix of wearables, hairables, medical and IoT sensors and a bit of defense. The biggest one is medical in fact. So as Thijs said in the opening, there's a lot of activity there and it's quite exciting to listen to the customer to learn what they want to do and what they need the batteries for. It's mind boggling to be honest and things that can't be done with current battery technology.

Out of that pipeline, we have currently 13 evaluation agreements and that has been kept stable at 13 for quite some time now, because we have been concentrating on sort of technology ready and so on. Yes.

Thierry Rongne, Chairman of the Board, EnSearch Micropower: So I think it's fair that the opportunity to expand that is vast. It's just an internal limitation to our capacity to effectively deal with all these opportunities. And each one of these evaluation agreements, we want to make sure that it is a proper handover of the agreements that we have, the batteries that are to be delivered and that that is followed up by a structured arrangement where so we bring this to the end product, the battery with the specific functionality, the specific design that our customer wants. And then that naturally moves into a volume production agreement with their preferred volume producer. So we want to sort of make sure that we get effective use of each opportunity and that we don't waste any time or resource on activities that does not lead up to a return on our investment.

We want to capitalize as I said, on our investment and where we are. Yes?

Lars Eikilam, CEO, EnSearch Micropower: Yeah, if I can cover this one. Yes. So this is our business model and that stands as it is and has been sort of for a couple of years now. We are going to pursue three different ways to capitalize on our technology. We will do battery production, we spoke.

We will do that ourselves in our in house fab in California, Silicon Valley. That will be limited up to a certain amount of volume. And we will focus on the premium customers that will and premium applications that will sort of pay for the privilege almost of using our batteries. Then we will, as part of our development of generation two and further generations, we may go partnership with certain suppliers of material and they will do part of that manufacturing themselves. And we will do the final assembly of the and stacking of the battery.

And then we also have the licensing route that I talked about that when the volumes are so big and also will require probably a cost that we can't deal with then we will license the battery technology. Not only that, but also the battery manufacturing process IP that we have built up over the years. Right, yes. So, and this is in very simple ways, our manufacturing process. We call it roll to roll manufacturing line.

And we have the front end where we start with a roll to roll stainless steel, we put on the cathode, we go through a furnace, we put on the electrolyte and then coming towards sort of where you see the patterning happens, that's where you do the customization. This is now for what we call flat stacked batteries, rectangular batteries. So and then it goes to test and inspection. And then it goes into the back end where you do quite a lot of sort of packing exercises and then you'd start the stacking in final encapsulation and it goes on to the print board. Yeah.

Thierry Rongne, Chairman of the Board, EnSearch Micropower: This is probably where we've had the greatest change over the recent the last six to eight weeks. So on April, when we finally got our first eleven layer battery proving that we could stack encapsulate and cycle. What that gave us was the confidence to move on. By that time, we knew what works and what doesn't work. And what even more important than that, We knew what worked and why it worked, and we knew what didn't work and why it didn't work.

Having that type of knowledge, we had resolved what we saw as all manufacturing limitations, us to move from what we had. What you see now is where we want to be. What we had was a test batch based front end with a lot of manual handling, gave us the necessary flexibility to change rapidly anything that didn't work. So by April then knowing that we had full control, that gave us the comfort to move our manufacturing now to a newer manufacturing line, higher precision, where we can control things like the temperature, the moisture much better than what we could with the previous batch test line that we made use of. And when we now see the visual inspection of that, it's a different world.

It's totally different type of uniformity and getting now also the test of these battery cells, we see that that will provide the lift up in parameters like the yield or saying that we have north of 90% stack yield that will increase with this kind of uniformity. We see that it has a higher capacity, so the volume energy density will increase. And with that, we also know that it will dramatically improve the charging cycle capacity. So all of this is absolutely necessary together then with a dramatic volume expansion, maybe as much as 10 times for battery cells, just going from 11 layer battery to a 28 layer battery to have the same number of batteries to test and to create the necessary comfort for us to start shipping these batteries to customers and partners. We need at least three times as many battery cells and the same then going to 43 layers.

So obviously, this is a very important step forward for us to bring this into a much more attractive and game changing type of battery.

Lars Eikilam, CEO, EnSearch Micropower: Yes. And if I can just add something there. When we are ramping up and introducing new machines, so we're doing say a roll to roll anneal furnace that is in fact something we already have in our inventory of machines. So now we have decided, now we are ready to go for that. So this is not a big investment.

The investment was made back in 2017 when we took over the park of a lot of high-tech roll to roll equipment. So now we feel we are ready to start doing this.

Thierry Rongne, Chairman of the Board, EnSearch Micropower: Okay. So before we go into q and a, let's let me try to summarize. And I want to draw a parallel what we're doing that's precisely the same thing that we did at Thandberg that I had to be a part of and what Nordic Semiconductor have done. And that has been the core for their success. That is a very steady grinding on the core technology platform, a technology platform that allowed Tandberg to bulldoze down competitive efforts that allow them to bulldoze into customer accounts and that were transformed into a financial excellence.

The same thing takes place for Nordic Semiconductor, and that's what we're doing. We are very steadily building a powerful technology platform that will allow us to bring this out to customers and transform that to financial excellence. We know that we have a unique product. It has features, functionalities, and qualities that existing battery technology cannot match. We know that we have the infrastructure to grow the current generation of batteries and we have the infrastructure to pursue the technology roadmap that we have defined.

The market, obviously, is big. Yes, you do have the existing market, existing market with existing battery technology, but we also have the future, the future market opportunity that this battery technology will pave the way for. Yes. We've spent more than actually, it's closer to $400,000,000. The money is one thing, but it is that continuous learning process that has been taking place.

I said the last six years, over the last six years, it's been very focused on battery technology, but also the foundation for our competence and our knowledge than the previous history of this company that was its legacy business with thin film and but it all were made possible on the same substrate that we're applying today, stainless steel. So knowing the characteristic of that substrate has allowed us to convert that into, yes, I say, some of the first solid state battery technologies being presented to the market and definitely so in the micro battery space. Being the first, being in front allows us to build up a very powerful extensive IP portfolio. We see, yes, there's competition and typically, we see two different type of competitors. We see that we have the companies like ourselves that doesn't have much of a history in the battery space.

We know that quite well. A lot of them are based in the same region, Americas, that we are. But we also see existing battery technology companies applying what they know, And what they know is based on different substrates, ceramic substrate and that has some limitations. Yes, they know the substrate and they are able to apply that into a solid state battery, but it's a fragile substrate that cannot match stainless steel in terms of thickness or thinness, doesn't have any flexibility. So from a technology point of view, we know that the capacity of converting a stainless steel substrate into a solid state battery is far superior to any ceramic substrate.

So that's where I want to leave this presentation and I welcome you all to raise questions and then take it from there. Yes?

Moderator/Host, EnSearch Micropower: Thank you very much, Thierry, and thank you, Lars. And as Thierry mentioned, if you have any questions, feel free to write them in the chat. So we have received couple of questions. We can start with the first one. Following the private placement, you have indicated earlier that a strong balance sheet provides higher standing towards the potential partners.

Have you seen this materializes?

Thierry Rongne, Chairman of the Board, EnSearch Micropower: Yes, definitely. It's an important aspect of any customer discussion and not being at sort of at the edge of any financial situation allows us to like what we've done now. We have one particular joint development opportunity and that's a much, much larger company than ourselves. They have their internal things. They have their own internal agenda.

But being a small company, we cannot afford to sort of be lured into their agenda. So we have parked that and basically said that, hey, this is it. This is what we can do. This is what we need. Come back when you're ready, and then we are allowed to continue to work with alternatives.

So, yes, that has allowed us a bit flexibility, I would say. Thank you. And have you noticed any changes with your customers or decision makers of your customers in regards to the increased trade tariffs?

Lars Eikilam, CEO, EnSearch Micropower: To be honest, no, not yet. And the situation is quite unpredictable as well. So but we have obviously, we have looked into it and on the supply side, so the import duties we may have to pay on things that we are importing from abroad and a lot of the materials, the specific materials are coming from Europe, some from Asia, but also machinery that we are ordering. So we are kind of we expect that there will be an increase and could up to 10% to 15%. But as I said, this is almost changing by the day as the countries are negotiating and dropping tariffs and yeah, but we keep on it and we also see where we can maybe shift to a American supplier if they are available.

But we have long term relationship with our suppliers and this is specialized equipment, specialized materials. So you're not hundreds to choose from. In

Moderator/Host, EnSearch Micropower: regards to potential sales, will regard that it's an advantage of course to be.

Lars Eikilam, CEO, EnSearch Micropower: Yes. And you can say most of our customers, if you look at our pipeline, 60% are Americans. So that that's an advantage. Yeah.

Moderator/Host, EnSearch Micropower: Very good. Yeah. And then very you you touched upon this, of course, but how many batteries are you producing now and how many partners have you received for the batteries? I mean Well,

Thierry Rongne, Chairman of the Board, EnSearch Micropower: as I said, moving to newer and a higher volume because it's not a sort of high volume manufacturing line like what you would expect to see from contract manufacturers, but to us it's a much higher volume manufacturing process that we are now entering into. And that provides at least 10 times as many battery cells where we are right now and there's a further potential on that.

Lars Eikilam, CEO, EnSearch Micropower: And there is a reason why we went to 20 fourseven operation that is to deal with, I wouldn't say demand, because we are still getting, it's our internal demand in order to have enough numbers to get into stacks and so on. But we need twenty four seven operation and that also increases our the learning cycle. So we learn faster, we can solve problems faster if we if we encounter problems. Mhmm.

Moderator/Host, EnSearch Micropower: Good. And from the q '1 report, it says that three out of 13 evaluation customers have specified the 28 layer variant. And then the question is, can you explain what it means to specify

Lars Eikilam, CEO, EnSearch Micropower: a variant? Yeah. This is for evaluation agreements. So then we have three, basically, three alternatives. So it's the eleven, twenty eight and forty three.

So that you can say that's our standards. And then they will say, alright, my application will require say 10. Milliamp hour and our space for two batteries, then you could fit two forty three layers. They are about 4.5 milliamp each. And another customer was I repeat sorry, 28 layers, they are 4.5 each, 43 is 6.5 milliamp.

So that kind of determines it. Some of customers may not have, they may have a different need altogether. They just want to test that the battery technology is working, that in fact it does what we we say on the tin.

Thierry Rongne, Chairman of the Board, EnSearch Micropower: Yeah. Typically, that will because as Lars says, I suspect very few of them wants exactly that form. They have different needs, but they want to feel the comfort that we are able to do the basics, and then that then naturally transforms into joint development agreements that, hey, you know what? This is what we need. We need a rounded battery.

We need a different shape. We need a different size. And then by proving that, okay, we can transform this baseline technology into the specific form, the specific size, the specific character of your needs. And as that then matures, then that evolves into, okay, we're not your manufacturing partner. We're not the typical high volume manufacturer.

So who do you prefer? And then that is being taken then into a license agreement with their preferred volume producer. So that's sort of the road map.

Moderator/Host, EnSearch Micropower: Thank you. And in regards to the competitors, you touched upon this in the presentation, so it's a follow-up question to that. Will you still have the same tech technological advantages by the time your batteries are actually ready

Thierry Rongne, Chairman of the Board, EnSearch Micropower: to ship in volume? Yeah. Nice. Yeah. Good.

It's it's it's when you your technology strategy is based on one type of substrate. You are fairly limited to how far you can bring that in terms of functionality, features, and qualities. It has so defined limitations. So that is yeah. Yeah.

And

Moderator/Host, EnSearch Micropower: then it was reported that that two people from the nomination committee resigned.

Lars Eikilam, CEO, EnSearch Micropower: Do you have

Moderator/Host, EnSearch Micropower: any color on that?

Thierry Rongne, Chairman of the Board, EnSearch Micropower: Yes. So we have had a an AGM today and where the proposal was to cancel all the all the proposals from the nomination committee as was stated that and which is correct, that the nomination committee was not according to the statues having two of three resigning. So there will be a new AGM with with the nomination committee that has been proposed.

Moderator/Host, EnSearch Micropower: Good. And then, yeah, when can we expect the cooperation with the development company?

Thierry Rongne, Chairman of the Board, EnSearch Micropower: Again, it takes two for a dance. We are ready to dance and that may happen sooner or later. It's it's it's as I say, they had their internal processes. They have their own internal agendas and I don't want to speculate in that. What typically or what most likely will always be the case is that we're a small company compared to the JDA partners.

Now what can we do in order to leverage some kind of a bargaining power? The only way we can bring bargaining power in our favor is to create competition, and that's what we're doing. We are leveraging a unique battery technology, driving up alternative joint development agreement partners, so that we have alternatives.

Lars Eikilam, CEO, EnSearch Micropower: That's what we do.

Moderator/Host, EnSearch Micropower: And some of the questions are a little bit of the same. So I can just follow-up on that, which specific milestones or similar are the customers' partners awaiting before they're ready to put a signature on the GDA?

Thierry Rongne, Chairman of the Board, EnSearch Micropower: Specific, I think there are the for the current discussions that we have, it's their internal process. It doesn't have anything to do

Moderator/Host, EnSearch Micropower: with us any longer. And then several other questions are, of course, also related But

Thierry Rongne, Chairman of the Board, EnSearch Micropower: let me add to that. Then you have alternative JDA partners, where 28 layer will definitely be an important aspect to the decision making process. Moving from 11 layer to 28 layer will dramatically increase our confidence, our stated volume energy density level. We said that the 11 layer, yes, it is at north of 200 watt hours per liter moving to 28 and then finally to 43. We know that we will approach seven fifty watt hours per liter, then you're so far above what competing battery technology can provide.

So obviously, the development here will be and pay importance into further and additional JDI agreements. But it's not limited to that progress. It's we're seeing based on what we achieved with the 11 layer where we demonstrated that we can stack, we are able to encapsulate it and we are able to have a decent amount of charge cycles. Just that. But no one else has been able to prove this.

So just by doing so, that in itself has opened up for these additional discussions and JDA opportunities.

Moderator/Host, EnSearch Micropower: Good. And in relations to the production process, this is more of a detailed question, but in the Q1 report, I mentioned two different processes. One is the introduction of a new carrier transition process to further improve yield and simplicity back end processing, and also then it's automated testing to replace visual inspections, increasing level data, etcetera. Can you explain what this means? And what what's the difference between these two processes, Justice?

Lars Eikilam, CEO, EnSearch Micropower: Yeah. Well, they they are they are complementing processes. Yeah. If we if we go to the back end, then we have it is still, you see it's a lot of steps there and we are working with quads and a lot of different elements where we put in insulation and so on and so forth, We do laser cutting. So we are with a new carrier, we are having more steady stream.

So it takes out manual handling of dealing moving these batteries along. It will which creates better uniformity and a smoother process. And it will also simplify the number of laser steps needed. So again, that will also then as a side side effect, it will increase our throughput in the factory.

Thierry Rongne, Chairman of the Board, EnSearch Micropower: So it will increase volume, reduce the number of manual handling steps, through that reduce the potential failure sources. It will improve quality. So it's a natural logical step forward to us. Yeah. It's a much more automated manufacturing process, but one that we could not move into before we knew what I said.

We need to know what works, what doesn't work, why it works, and why it doesn't work. Knowing that, now we have paved the way, we've taken away all the manufacturing issues, questions that we had. For that reason, we're able to move to a much more automated manufacturing line that allows us to bring this company, as I said, the next level producing 28 layer, producing 43 layer, engaging with new and additional customers and expand the commercial activity level. And there will be more automation added later

Lars Eikilam, CEO, EnSearch Micropower: as we progress. But then the inspection tool, that is at the end when you have the stacks there. And then right now, I would say, before we were looking at basically visual inspection with your eyes, doesn't look right.

Thierry Rongne, Chairman of the Board, EnSearch Micropower: It's a bit

Lars Eikilam, CEO, EnSearch Micropower: bad. It's peeling on the side and you basically spot check and you can't do 100%. Now with a tool, you do 100% and they, I mean, you look inside the stack. So it's not just visual inspection. So that will help us.

That will also I think, again, talking about artificial intelligence that will give us plenty of sort of needs to work with in order to learn from it

Moderator/Host, EnSearch Micropower: and then

Lars Eikilam, CEO, EnSearch Micropower: transfer that knowledge to earlier the manufacturing process? So our customer

Thierry Rongne, Chairman of the Board, EnSearch Micropower: that has placed a 50,000 unit order, their end product is much more expensive than our battery. They don't want to have to recall. So when we today say that we have a 90% stack yield, that's not good enough. We need to approach hundred percent.

Moderator/Host, EnSearch Micropower: Mhmm. Okay.

Thierry Rongne, Chairman of the Board, EnSearch Micropower: A automatic inspection tool that inspects 100% of our batteries will be a dramatic improvement in that

Lars Eikilam, CEO, EnSearch Micropower: stack yield.

Moderator/Host, EnSearch Micropower: That was also a question. Just to confirm, net order is, of course, still active. It It was just a question

Thierry Rongne, Chairman of the Board, EnSearch Micropower: is, as I said, when we demonstrated the 11 layer, if you would have been in the room and see the joy, the enthusiasm, the energy from our customer. You would yeah. You wouldn't ask the question.

Moderator/Host, EnSearch Micropower: Yeah. And in regards to financing, this is just assumption, but from the from the client that asked the questions, it it seems that indicate that you are financing through q three. But are you looking at other other financing options like traditional loans, etcetera, going forward? It's just in general.

Lars Eikilam, CEO, EnSearch Micropower: Well, yes, looking at it, but our balance sheet is not strong enough to get traditional loans. So we haven't pursued that. We do look at, of course, financing through the joint development agreements that is an avenue we are pursuing.

Thierry Rongne, Chairman of the Board, EnSearch Micropower: We want to capitalize on what we're now able to demonstrate and to start ship to customers. Yeah. Yeah. So that technology needs you if we want to transform and make use of that to fund the company as we move forward.

Moderator/Host, EnSearch Micropower: And are you able to start commercial production as soon as the 28 layer battery has been validated by customers?

Lars Eikilam, CEO, EnSearch Micropower: Well In smaller volumes? In theoretically, yes, in smaller still smaller volumes. But also, let's say, when we are ready, and it's all good, there is a product qualification and certification process that sort of needs to go through because at the end of the day, these batteries will be approved by the EU, by US sort of standards committees. So we have to go through that process and that would be probably three months, but we can do things in parallel and a lot of, let's let's call it the lead customer with 150,000, they can do a lot of their own sort of characterization for the product whilst we are working on it.

Moderator/Host, EnSearch Micropower: And then, yeah, several clients have asked the same question about when is the expected time span then until the 28 layer battery is finalized approximately? Would say If you would guide on I

Thierry Rongne, Chairman of the Board, EnSearch Micropower: would say, let me start in in in a different end. The time lapse between the 43 layer and the 28 layer will be shorter, will definitely be shorter than the time lapse between the 28 and the 11 layer. Because now, as I said, now we're moving our manufacturing of the battery cells to a newer higher volume and manufacturing line with higher precision. And with that, I would say this summer and where we target sooner rather than later. That's how I would answer or yep.

Moderator/Host, EnSearch Micropower: Do you see any commercial interest for the 11 layer battery? Or is it more

Thierry Rongne, Chairman of the Board, EnSearch Micropower: It's a door opener.

Moderator/Host, EnSearch Micropower: Yeah. Yeah.

Lars Eikilam, CEO, EnSearch Micropower: It's a door opener. There will there will be commercial interest for it.

Thierry Rongne, Chairman of the Board, EnSearch Micropower: Yes. And particularly within the field of the medtech field, there, they are not necessarily looking at these higher resource batteries. They are looking at smaller devices.

Lars Eikilam, CEO, EnSearch Micropower: So So we can go below 11 as well. Exactly. So Exactly. And

Moderator/Host, EnSearch Micropower: then you touched upon this also, but in April on the press release, it was it was, of course, focusing on the the cycle rate of 50 plus cycles for the 11 layer battery. Mhmm. And was the number of 50 cycles a threshold that the battery was validated to? Or or is it how How's our confidence? Our internal own confidence.

Okay. But how long is potential cycle life of the 11 layer?

Lars Eikilam, CEO, EnSearch Micropower: I mean, it doesn't matter whether it's eleven, twenty, eight, or three. So it's just inherent qualities of the battery, so that you get full capacity out of each cell, which you have 11 of in a stack of 11, and then also the right level of impedance. Both those will have a positive influence on the cycling. So I would say the cycling, when you say 50%, it's a kind of a milestone on the way to higher cycling. And it will be uniform for all all batteries.

It's the it's the inherent quality in the battery itself, not the size of it that determines the cycle. Yeah.

Thierry Rongne, Chairman of the Board, EnSearch Micropower: We know that we know that the theoretical number of charge cycles that this material may be able to handle is up towards 3,000 charge cycles. We do have discussions within the field of med tech applications requiring some 1,800 charge cycles. Which is

Lars Eikilam, CEO, EnSearch Micropower: five years, if you charge every night, for instance.

Thierry Rongne, Chairman of the Board, EnSearch Micropower: And obviously, when you talk about medtech, yeah, you do have devices that go inside your body and and you want it to last for some time. So it's it's natural that you require a certain amount of charge cycles. If you look at our current production order, then you're talking about some 200 plus charge cycles. Okay. And remember remember that compared to normal battery, today's battery technology, liquid lithium battery technology, we're not talking about each charge cycle last with the same performance, some three times longer.

Moderator/Host, EnSearch Micropower: I think we'll take three more questions. This yeah. In in general, what kind of products does the partner want to make with your technology? If you can just

Thierry Rongne, Chairman of the Board, EnSearch Micropower: Today is smaller. Yeah. Today's space constraint. Looking at our technology roadmap, being able to increase our volume energy density north of 750 watt hours per liter, beyond way beyond that, then suddenly you expand the footprint of our technology into a wider array of electronic gadgets. In theory, you could basically talk about all electronics.

Lars Eikilam, CEO, EnSearch Micropower: Mhmm. Yeah. And it's of it's of course, they want smaller smaller, but be able to power more more functions and function. So the 12 and a half c, it's a it's an important criteria in that in that sense.

Thierry Rongne, Chairman of the Board, EnSearch Micropower: Mhmm. Mhmm.

Moderator/Host, EnSearch Micropower: Then the quality of the batteries, it seems to depend very much on the manufacturing process, of course. But is your preferred manufacturing strategy to license manufacturing of TLMA batteries or to have one partner for manufacturing? No. No. We will have multiple.

Yeah.

Thierry Rongne, Chairman of the Board, EnSearch Micropower: Each of our customers, then you're talking larger high volume customer applications. They have their own preferred manufacturer Yeah. Volume manufacturer. So we will team up with each one of these, enable them to manufacture batteries according to our customers specifications using our IP, paying the license and paying the royalty for each battery. So, yes, we will have a certain manufacturing capacity, but that's for targeted customers, high value, challenging customers, driving our technology roadmap higher and higher.

Moderator/Host, EnSearch Micropower: Thank you very much. I think, I mean, many of the questions are fulfilled and are answering each other. So I wish to say thank you very much, Thierry. Thank you very much, Lars. If you have any more follow-up questions, you can feel free to reach out to your Arctic broker or or reach out to to to Thijer or Lars on email.

So thank you very much for your time. Thank you. Thank you.

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