Ilika (LSE:IKA) — Half-year Results

0:01 Good afternoon, ladies and gentlemen, and welcome to the ILIKA PLC Half Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, can be submitted at any time just using the Q and A tab the right hand side of your screen. Just please type in your questions at any time and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company will review your questions submitted today. And where appropriate, we will publish those responses. Before we begin, we'd like to submit the following poll, and I'm sure the company will be most grateful for your participation. And I'd like to hand over to CEO,

0:32 Graham Purdy. Good afternoon, sir. Thank you for that kind introduction, Mark, and many thanks to everybody that's taken the time to listen to this presentation. I'm joined today by Jason Stewart, our new CFO, who, is just getting his feet under the table, and he will be co presenting with me today. Good afternoon, Noel. So let's get into the presentation now. This is a half year update that covers the period from the first of May last year through to the end of October.

1:18 I think many of you know about my own profile, and, of course, this information is on our website. So I'll just give Jason the opportunity to say a few words about his background as he's new to this forum. Thank you, Graham. So to introduce myself, Jason Stewart, I'm a senior qualified accountant, with over twenty years of experience, within the commercial sector. I have a degree in business from Manchester

1:49 Metropolitan University and have then been working through a number of finance roles within a variety of businesses starting first with Kerry Foods before moving on to B and Q as part of the Kingfisher Group before most recently being with Sunseeker International, helping them through the last twelve and a half years. Through that role, I've both helped to deploy significant capital and

2:18 navigate various challenges for the business. But, ultimately, the excitement and the challenge, and the opportunity presented by ILIKA and the products that are being developed were such a great attraction that I was delighted to take the opportunity to come and join Graham and the team and hopefully provide some help towards the success of the business over the coming years. Thanks, Jason. Very welcome. So from luxury yachts to solid state batteries, and that's what we're gonna talk about over the next twenty minutes or so. You know, ILIKA is one of the few global experts really in the design and manufacture of solid state batteries. There you see one of our Steriax miniature batteries on the end of one of my colleague's fingers. That's our m 300 device.

3:11 And then on the other hand, we have our second product line, which is our Goliath solid state pouch cells, which are designed for consumer appliances and EVs. So why are people interested in solid state for medtech? Well, first of all, they're very compact. You can see from the size of these batteries relative to the the tip of that pencil.

3:36 So, clearly, if they're going to be incorporated into an implanted device, they're ideal because of their low volume impact during that surgical procedure. They're also high power density, which is important because you need them to deliver power pulses not only for a therapy, say in the case of neurostimulation, but also, for communication. So to be able to power the data chips, and the radio chips that actually send out information, from the patient that can be picked up and then relayed to the consultant. And, also, they're intrinsically safe. You know, if you're to have an implant, you don't want any risk of toxic fluid leakage.

4:25 And with solid, state batteries, there are no liquids involved. So what are the applications? Well, really, in medical devices, we are building on this wave of tech innovation that is all about replacing traditional pharmaceuticals, which are chemical based with electroceuticals. So typically, stimulation of the the peripheral nervous system, so the PNS, with very small currents and nanoamps of current to avoid the need for patients to ingest what can sometimes be quite toxic chemicals in order to deal with their complaints.

5:16 You know, the the vagus nerve is a a really good example of part of the peripheral nervous system that is linked to a number of organs that you can electrically stimulate and and therefore deal with some unpleasant conditions. And, of course, we have been using electronic devices in medtech for a while. Pacemakers are ubiquitous. And one of the the major advantages of being able to use SteraX miniature devices is that actually the the size of the implant becomes much reduced and therefore the surgical intervention much more palatable.

6:01 The other example is in cardiac sensing. You know, cardiovascular diseases, unfortunately, are the number one cause of death globally. And it's not only stimulation that can help address this problem, but also actually just data collection. So implanted sensors can help with heart failure prevention, and also monitoring, of arrhythmia. And in fact, these devices are being designed so small that they can be implanted via a catheter, which means that the surgical intervention is reduced in scale even further. So where were are are we with our operational implementation?

6:50 So in in 2020, we raised sufficient capital to be able to move from our pilot line at the local university, the University of Southampton here, to a a mid scale fab, which we installed on time and on budget in 2021 in the the teeth of the pandemic. And over the last year, we've been carrying out our products qualification and and also process optimization to increase the yield of that process. And, actually, we've made, alpha samples of our first product, the m 300, which are currently undergoing testing ready for, release to customers starting in q two of this year, so starting from April onwards.

7:48 So, you know, what does the commercial traction for Sterex look like? We've actually got commercial orders from a diverse med tech customer base. You see the the company names here are are kept private because, of course, a lot of these orders are placed under NDA, but they cover companies that vary from being startups through to listed multinationals. Actually, you know, in The US, a startup can be very well funded, you know, can have hundreds of millions on the balance sheet. So they're not necessarily small organizations.

8:35 And there you can see the the application area. A lot of med tech applications that we'll talk about in a minute was very interesting sector sizes and addressable markets, and then reduce there to the serviceable addressable and serviceable obtainable markets. So, basically, you know, which are the exact customers in those market sectors that we can talk to, that we are talking to, and how many devices are those customers likely to buy so that we can build bottom up forecasts to support our scale up activities. And here's a bit of analysis actually about those commercial orders, you know, by application.

9:24 You can see that the majority of the orders in the the green pie chart on the left are in implanted medical devices. A number in smart dental applications, and and these are, you know, know, what we'd call braces in in The UK or retainers in The US, you know, compliance monitoring, making sure that patients are wearing them correctly to to ensure that you get proper alignment of teeth so that the efficacy of these retainers is guaranteed, and also actually to monitor the chemical content of saliva. Then we also have smart lenses. This is often used for interacting with the so called metaverse, you know, a very important area of new technology development that has seen massive investments, in particular, on the West Coast Of The US.

10:27 And then some other miscellaneous opportunities typically in industrial IoT applications ranging from aerospace through satellites, applications, and some other industrial deployments. And then on the right hand side, you can see actually the jurisdictions that are key for our business development efforts. The vast majority of these orders have come from The US. So, actually, about three quarters of the orders with the remaining ones in Europe. So, really, the pipeline dominated by US med tech opportunities. And, you know, the the the pathway that we have to navigate for med tech is a reasonably long one.

11:20 Typically, it takes about five years to get products to market, to get regulatory approval. And so, clearly, we need to make sure that we manage our cash through this period as we're supplying relatively low volumes of batteries in the initial years through preclinical trials, the first human trials, through to regulatory approval, and then mass production. And, of course, the ultimate end markets for a lot of these applications are very large as we've seen, in fact, larger than the capacity of The U The UK facility that we've got. And therefore, we need to make sure that, actually, we support our customers on this journey through to full market commercialization.

12:17 What does our business model look like? Well, you know, we have a a mid scale fab manufacturing facility right now that we're using for the the vast majority of the process steps. Although we are outsourcing some of the steps where it makes sense at lower volume production that we're asked right now before forming the batteries, testing them, and dispatching them to customers. But as per our announcement on Monday, we've entered into a tech transfer agreement with Certech in The US that's allowed us to accelerate our licensing model. This is ultimately where we wanted to get to as an organization where ILIKA remains the design authority, effectively selling the IP or licensing the IP.

13:14 In fact, as part of this arrangement, we will retain the responsibility for manufacturing the cathode, which is perhaps the most proprietary of the steps in our process. Surtech will carry out most of the manufacturing, including in particular the mic microfabrication activities before we wrap up with the forming and testing of the cells. And this is a business model that we believe will allow us to significantly scale our business. So we're very excited about the MOU that we've signed with Certech Medical. You know, they're an industry leading vertically integrated outsource partner for the big medical device OEMs who actually outsource platforms as well as components to Certec for manufacture.

14:12 And we plan to transfer the manufacturing that we currently have in The UK from our facility to their much larger facility in Massachusetts, in Lowell, Massachusetts, which is a a large thin film facility that they've built up there.

14:32 So in terms of the the benefits to ILIKA and their shareholders, it provides validation of Sterex's capabilities. It's a a manufacturing partnership with the economy of scale that we know we need in order to push down the cost of manufacture while going hand in hand with an ability to ramp production. And also, of course, they have a substantial and very skillful business development team that's capable of bringing additional momentum to the activities that we've initiated through building the pipeline that we were just looking at. So in terms of next steps, actually, there's a a show coming up called the MD and M Show that we'll be doing some joint marketing ads in California at the beginning of February, from February 7 through to the ninth in Anaheim.

15:32 We will be completing our contract in the coming months and, of course, initiating transfer of the technology to to bring this through to commercial conclusion. So in summary, for the the first half of this financial year, the highlights for Sterex, we've launched that program for product qualification and process optimization heading towards commercial release in quarter two of this calendar year. We've got these 21 orders from 18 customers as we've seen mainly for medical devices in The US. And most recently, we've signed this MOU with Certech Medical to allow us to transfer

16:18 manufacturing under license. So let's now start talking a bit about Goliath, so a large format solid state batteries. So why is automotive interested in this technology? Well, first of all, actually, you know, the compactness of the technology is very attractive. It it occupies half the volume of standard lithium ion, so it enables, more attractive designs, smaller designs, in vehicles. And also the the high temperature tolerance of Goliath, allows designers to reduce that pack size and weight. So ultimately, confers a greater range on the vehicles that use solid state batteries.

17:09 It's also nonflammable. It doesn't have any flammable liquid in it. So, Goliath solid state batteries are intrinsically safe. And also, there are some environmental benefits. So as as time goes on and a a larger number of batteries enter the markets and some reach the end of their life, we have to have a robust strategy for recycling those cells. And the attraction of solid state is that once we've stripped off the outer packaging, we're able to crumble and granulate the batteries more readily and then extract the the metals, put them back into the supply chain using standard recycling technology.

18:05 In terms of the the market dynamic here, you know, we've got an electric vehicle uptake mechanism that is is growing, actually has significant momentum. And solid state batteries can really enhance this momentum. It can allow designers to overcome range anxiety because we're getting that extension of range that we talked about, a a very robust battery life, so larger number of cycles, and also overcome any safety concerns.

18:45 So where are we in terms of technical readiness? Here, we've got, an updated, technical development program, hopefully, a little bit, simplified relative to previous charts that, we've shared. So, we've achieved, an energy density of about a 100 watt hours per kilo. We're ramping that up to a point data point that we're calling d four, which will be closer to 200 watt hours per kilo, and that will be at a level that then becomes interesting for us to productize with our product p one. So effectively, that's the same performance, but is capable of being manufactured in batches that allow us to send out reproducible pouch cells to customers for their validation and testing.

19:42 We'll then be moving on through lithium ion equivalents towards the end of the year through to what we call d eight, which will then be sufficiently powerful to be able to support our product launch, which is our MVP, minimum viable product, which will be turned into a a a process that will support manufacturing volumes. In parallel with this work, we've been trialing processes on larger scale equipment or or production intense equipment, including roll to roll processes like you see pictured on the bottom right of this chart.

20:31 So where are we going to sell ourselves in the first instance? You've heard us talk about, you know, high end vehicles, high performance, and specialist vehicles in the past. We've probably extended that into luxury vehicles now. It's a large addressable market. We think, it's about 50 gigawatt hours per year, So large enough for ILIKA and its competitors. And, you know, we're actively engaged with brands that you would recognize from this sector. I also wanted to say a few words actually about the outlook for EVs. There's been some talk in the press recently that actually EV sales are perhaps not as robust or or not as significant as perhaps had been forecast earlier in 2022.

21:22 This is actually a chart from the Bloomberg NEF team that are actually revising their forecast for 2030 upwards. They're about 20% higher than they were a year ago. So, actually, the long term forecast for EVs looks very robust. Probably the the near term disappointment of some of the OEMs is more related to short term inflationary effects and supply chain constraints. But most analysts expect those to be overcome in the coming years.

22:02 So what's our scale up plan? I think it's important to understand the direction of travel here and to understand also the amount of capital that we're likely to need to deploy. Currently, we are manufacturing on a prepilot line. The automotive industry uses a certain language to define the stage of maturity of the samples, the cells that they use in their process. So a samples are effectively cells that meet given specification, but are not necessarily manufactured at scale. So often they're manufactured on pilot lines like we intend to do.

22:52 B samples are manufactured on production intense equipment, but are not necessarily available in large quantities. So they're manufactured in limited quantities. And c samples are manufactured at the scale that is required to support a vehicle launch. So with the investment that we raised in 2021,

23:20 We are currently investing in a pilot line that will allow us to make a samples that will enable us to respond to RFQs, which are requests for quotation issued by automotive OEMs. If we're successful in winning those contracts, then we will collaborate to produce b samples and c samples on larger scale equipment. And, typically,

23:54 we've seen that the OEMs would invest in the equipment in order to enable that level of cell production. And so we do not intend to come back to shareholders to try and finance, let's call it, a mega facility or a a gigafactory. A lot of the finance for these facilities would be provided by the ultimate customers who are interested in offtake from these plants and and also manufacturing partners. So that creates then, as in the case of Sterex, licensing opportunities. So we are not a a gigafactory building company. We will work with companies who've got the expertise to be able to manufacture at that scale.

24:54 In terms of commercial interactions, you know, we've met with most of the global automotive OEMs across different countries and and sectors. And we have participated in RFQs to understand timelines and the scale of demand. You know, we will be issuing commercial quotes with our p one product at the end of twenty twenty three. And, actually, some of those OEMs have entered into early evaluation contracts in anticipation of p one availability. And then, of course, further partnerships and and grant support is being pursued, and there'll be some some news flow associated with those interactions as we move forward this year.

25:50 So in in summary, in the first half year, we have increased energy density for Goliath cells by over 80% over the last six months. We've launched these scale up studies. One of them, an equipment design study with Como that's given us lots of insight into the type of equipment that is needed in order to manufacture at scale. We've carried out an economic feasibility study with the UK BIC, which has demonstrated the feasibility of manufacturing at mega scale at at their facility in in Coventry.

26:36 And we've also carried out a series of manufacturing equipment trials with equipment vendors. We've also continued that interaction with both automotive, but also consumer appliance OEMs. So, Jason, this is our half year results. So if you could drop through the numbers, I think that would be useful. Thank you, Graham. So just to review the financial results for the half year, the turnover position of 200,000 is flat year on year, from the same half twenty twenty one, and once again resulted from funding in respect of three ongoing grant funded projects, as part of the evaluation matrix.

27:29 And we will continue to seek further opportunities for that through the latter half of this financial year and, as Graham said, into, next financial year. With regard to the EBITDA loss of 4,100,000 versus 2,700,000 in the prior year, This is a reflection of the increased operational costs associated with Sterak's manufacturing fab facility, which was fully expected as that facility came fully online and up to speed to our capacity expectations. And although that is in line with our expectations for the performance, it does reflect the increased cost base that we're seeing nationally across The UK with expensive energy prices and increasing inflation. So in line with our expectations despite those external factors pushing the cost base up.

28:26 And the cash balance at 18,600,000 is in line with our expected drawdown on

28:32 the capital both for the consumption required for operating costs, but equally with the deployment of capital towards the Goliath development program as we discussed. Thanks, Jason. So let's just wrap up with a bit of, outlook here. So, what can you expect over the coming months? Well, first of all, you know, delivery of the initial batch of, m 300 samples in quarter two of this year. We'll be progressing that Certek relationship through the joint marketing activities we were talking about and also moving towards contract completion and tech transfer. And, of course, we'll be continuing to mature that Goliath technology, with partners through the defined technical milestones that we covered earlier.

29:24 And we believe that these activities, allow us to build that increasing commercial opportunity to address these large markets, giving us a strong platform for future growth.

29:42 So I think that wraps up the presentation, and happy to move over. That's great, Graham. Jason, thank you very much indeed for updating investors this afternoon. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab just situated on the right hand corner of your screen. I just want to give the company a couple of moments to review the questions you submitted already. I'd just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q and A, will be accessed or can be accessed via your Investor Meet company dashboard. Graham, Jason, as you know, you received a number of pre submitted questions, which you very kindly provided some written responses. And of course, you've got a number of questions that have come in on that Q and A panel on the right hand side. I wondered if I may just hand back to you guys. If I could ask you to read out the questions, of course, where it's appropriate to do so and give a response, and then I'll pick up from you at the end. So you just click on that q and a tab. Hopefully, you should see them all there.

30:37 Thank you, Mark. We will do our best. Let's have a look, see what questions we've got today. So the first one is when will you enter a partnership agreement with an actual automotive manufacturer? So, you know, we're actively in discussions with OEMs, and we'll leverage opportunities to collaborate with these OEMs alongside grant funding. So we we believe that grant funding will be important in in catalyzing those interactions. And, you know, we expect to be able to provide some more news flow on this in in the coming months. You know, the next question is two years to OEM prototype for Goliath is way too slow.

31:26 Why can't you go faster? Well, look. We have a very dedicated technical team working on this technology. Actually, the feedback that we've had from people in the industry that are active in this field is that, actually, this rate of innovation is is realistic and entirely aligned with the road maps of the automotive companies. And, you know, unfortunately, this type of new technology development does take time to mature, but we believe actually that we're moving at a a competitive pace. So there's a question here. Do we have any update on the SteraX fab in terms of yield?

32:16 So the answer is is actually we've been increasing the yield of that facility very effectively. I think last time that we gave you data on on where we were, we were about at 40%. Well, that's been, gradually improving. And in fact, we expect that, with the additional expertise of the Certec team that particularly on the microfabrication steps that we're going to transfer, that we should see some further benefit on increased yield from that process. But the yield is is adequate for us to meet the needs of the initial orders that we've got, and we will be optimizing that further through the tech transfer.

33:06 There's a question here from an investor who recalls that we need to go through a medical testing regime before something can be used, and they'd like a a few words about that time scale. So that that's right. You know, all of us, of course, would like to make sure that any medical device that we use has been properly tested and validated. It depends a bit on the nature of the device. Most of the applications that we've got are either for class three or class two devices. Typically, you know, class three devices are implants and so need to be tested more thoroughly, more rigorously.

33:53 That testing can take up to five years. And then the class two devices require testing that usually is a bit shorter. They're often wearables, and, you know, that can be in the order of about three years. So we'll be supplying products to our customers who will be testing their devices powered by our batteries over that time frame. But, of course, we have a revenue generating opportunity in the sale of those batteries to those customers while they're doing that testing. And that's what we'll be ramping up together with Surtech. Let's have a look at some others.

34:46 Question here. Are we seeing any new technologies that might compete with Stereax? So, yeah, we are we're monitoring that very closely. We have a a function within the company that is responsible for updating competitive landscape. I would say, you know, the the competition really comes from a couple of different angles. One of them is miniaturization of existing technology, so conventional lithium ion technology. This is, you know, getting down to pretty small sizes, but is intrinsically limited in terms of energy density because of the weight and size of the can. These are often cylindrical devices that look a bit like miniature double a batteries.

35:45 And clearly, there's a limit to how small you can make these these containers effectively. They become more container than active material at a certain point. But also solid state has got the advantage of of being, you know, completely solid and more safe. The other area of competition comes from something called MLCCs, which are multilayer capacitors or ceramic capacitors. They they typically act in situations that require a high power but have got a a lower or or shorter energy storage life so that they're they're reasonably leaky in terms of draining over time. So you charge them and they don't really hold their charge as well as batteries.

36:46 So, you know, if you don't need to hold charge for a very long time, then sometimes MLCCs can be very effective. So question here, are you looking for other industrial applications for Sterex batteries outside of aerospace? Is that what is shown as the other 17% in the pie chart? Yeah. So, actually, a lot of those other applications are are miscellaneous industrial applications. And the you know, that is the minority of our pipeline at the moment, but we believe that as we get to larger scale, that we'll be able to offer the product at a price point which will be interesting to a number of other application sectors.

37:37 So, you know, typically, are interested in sales for aerospace, satellite applications, and and hostile environments where normal lithium ion technology struggles to deliver the performance that's required. Let's have a look. There's a question here, a technical question. So a recent QuantumScape press release mentioned a new hybrid prismatic and pouch architecture to support the uniaxial expansion and contraction during charge and discharge. Is this the direction you're heading in, or is your architecture different? So, actually, we we use a traditional pouch cell architecture.

38:27 You know, the the mechanism with which our batteries charge and discharge is not the same as QuantumScape batteries. As you probably recall, they have a an anode less design, which means that the the anode is plated out during the charging of the cell. And our cells actually use a a structured anode, which absorbs the lithium as you charge the cell. So we haven't got the same mechanical stresses in our design as the quantum escape architecture. Question here. Can we comment on potential revenue values you'll be able to generate for Sterex line in 2325?

39:19 What level of gross margins are you expecting as well in this time period? Well, I gotta be careful not to give forecasts here as we want to stay on the right side of the regulations. But, you know, gross margins that we expect are for the product, you know, in excess of 50%. And once we get through licensing, of course, the the revenue that you get from that activity is typically higher margin in the order of 95% because, of course, your your cost base for the licensing model is much reduced. Targeted time scale for Goliath achieving lithium ion equivalence looks extremely ambitious.

40:10 Confident are you of achieving this? Well, you know, these charts are done in close collaboration with our technical team, and, you know, we take guidance from them on what can be achieved. And, And, actually, you know, we've seen great progress over the last six months that we expect to extrapolate. And, also, we expect an acceleration of energy density progress as we move into the stacking activities that we've got, which become more of a a packaging challenge rather than a chemistry challenge. You know, chemistry is quite difficult to get to work, particularly when you're dealing with novel chemistries and compatibilities.

40:56 Whereas once you get into the realm of stacking and mechanical engineering, then that becomes more predictable in terms of the likely outcome. A question here on the Certik deal. Congratulations on the Certik deal. Besides medical, are you considering other market sectors in the future that could use miniature batteries? Yeah. So, you know, one of the advantages of that particular deal is that it gives us an economy of scale. And, you know, we're pretty agnostic as to the end applications as long as they leverage the advantages of the Sterex technology.

41:42 So, you know, once we've done some joint marketing and and had, you know, feedback from people who have been able to consider the use of Sterex in their devices in more detail and have probably been given comfort from our ability to manufacture at scale, then, you know, we we will incorporate these opportunities within our forecast. Question here on what our monthly cash burn is. So I'll let Jason answer that. Okay. So with regard to the monthly cash burn, that element is actually just under review as a result of the MoU and tech transfer. So part of the text transfer activity is allowing us to transfer through the microfabrication activities that are experts at.

42:36 Some of the more energy intensive and cost intensive aspects of the production process within our fab that then allows us to reduce the monthly spend that we're experiencing to better protect the cash flow that we have and capital available so that we can then better deploy that to the longevity and development of both Sterex and the Goliath product. So currently under review at the moment, but we would expect that to be reduced as part of the tech transfer negotiations as we see that through to conclusion. Thanks, Jason. So as our patents regarding solid state sorry. I'm not reading that correctly. Are our patents regarding solid state still in date, and will they effectively protect our IP from competitors?

43:31 Different between Sterex and Goliath? Yeah. So a lot of our patents are still in date. You know, patents typically are valid for twenty years, so we haven't been active in in solid state for that length of time. We've we've got good patent coverage in Sterex. More of our patents cover the Sterex technology than Goliath because, actually, we started earlier developing the Sterex technology. So that's proportionately a a bigger part of that protection. But, you know, we we we maintain a freedom to operate search with our in house patents attorney and where we identify potential problems or where we believe that patents have been incorrectly granted to competitors, then we will challenge those patents and, you know, make sure that we retain the ability to market our product.

44:39 How confident are we in being granted the funds to finish the job? I guess this question so granted is written in capitals here. I I think this question is asking if we are likely to get further grant support for our work. I think, you know, that is likely. The UK government has reiterated its commitment to the industrial strategy of supporting battery development and vehicle electrification, and I'm sure there'll be some news flow regarding this as we go through 2023. So here's a question that says, in view of of current levels of expenditure and delays to product sales, do you envisage a further capital fundraise in 2324 given cash deposits of only 18,000,000?

45:44 How long before Certik have an approved production facility capable of manufacture? What is projected product sales, licensing revenue in the next twelve months? So there's a few questions stacked on top of each other there. So If I take the the first one, Graham K. In terms of the level of expenditure. So as I explained earlier, we're looking to reduce the level of expenditure on an annual basis as we go through the tech transfer piece. So as mentioned, that will help to protect the capital that we do have and allow us to deploy that appropriately. Although we have always said through the Goliath scale up process, as we move to the scaling from our pilot line to the more industrial applications, we will have to deploy capital into machinery to make sure that we are proving that we'll operate at scale, and that's where we will be looking to utilize our capital to best effect.

46:52 And, ultimately, as we are looking to go to sort of the final stage with automotive OEMs, we will probably need to look for additional funding, but hopefully to do that with news around an OEM partner, that is coming on that journey with us. So, no need for additional capital in the immediate future, and looking to shepherd our capital that we do have, for that term. However, as we look out into the longer term development, to be able to bring the product to conclusion, we will need to review the needs to deploy further capital. Alright. And it says, you know, how long before Certec have an approved facility capable of manufacture? Well, you have to bear with us on that. We're in the middle of a tech transfer discussion with Certec, so I don't wanna preempt that.

47:43 But needless to say, we're targeting early completion on that, and we expect that to be done certainly within this calendar year. And then finally, what's the projected product sales and licensing revenue over the next twelve months? Well, analysts who cover us are predicting, you know, between 400,000 and 800,000 k in this financial year, which ends in in April '23. And then beyond that, we expect to see a ramp up, particularly actually in in grant funding. Question here. You talked about increasing Goliath capacity 80%, but how does this compare in absolute output vis a vis the competition that you track? Well, actually, I I think we feel pretty comfortable that we're still in that cohort of leading large format solid state battery developers.

48:48 And the fact that OEMs continue to interact with us and support us in our grant applications means that, actually, we must still have a competitive offering. Another question here. Have you considered, solid state batteries for storage purposes? So the renewable energy sector, and how does solid state compare with vanadium flow batteries? Yeah. So that's a a good question. So, you know, for renewable energy storage, typically, you're not too worried about the volumetric or gravimetric energy density of the batteries.

49:35 You've typically got, you know, a larger space in which to place those batteries. So often, you know, lower cost, larger scale energy storage formats are used for that. Flow batteries are a good example, actually, that are often deployed. And more recently, people have been talking about using sodium ion batteries for that application. So they're they're probably more suitable than solid state. You know, solid state is is more useful when you're dealing with a constrained space or you have constrained weight considerations, particularly, you know, in in the applications we've been talking about this afternoon.

50:29 Timeline for Goliath, please. Sales twenty thirty question mark. So, you know, the the timeline really is is given on page 20 that we we reviewed earlier. You can expect early revenue generation in addition to grant income from the point in time when we are able to sell a samples. So, you know, OEMs and other evaluators are happy to to pay for those prototypes. And then as you go through the different stages and gets to larger volumes, obviously, we're able to ramp revenue. So, you know, significant revenue probably from 2025 onwards for for Goliath.

51:19 Question here. Please, could you talk about your choice of chemistry, I e, lithium or silicon anodes, and why you chose that? Well, you know, we we've had quite a long history, a successful history of using silicon anode technology. I know historically, actually, lot of commentators have said, well, solid state is really just the use of solid lithium anodes. But our stereoc cells use a silicon anode, and that's been very effective in increasing the cycle life of cells beyond that which we achieved when we used a similar construction and lithium anode architectures.

52:14 And we've decided in our Goliath program to use a similar approach. So we find that by using a structured anode that we actually get a better longevity from the cells and also less expansion and contraction of the cells when you charge and discharge them. And, actually, other solid state developers seem to agree with us. You know, recently, solid power in The US moved from using a a lithium metal anode to a a silicon anode. So there's an increasing wave of of support for for that approach. Let's have a look. There's a question here.

53:19 Is the Certik MOU exclusive, or can you seek similar relationships with others if necessary? And what's the history of the relationship? Did Certik come to you, or did you approach them? Well, you know, I I can't disclose any confidentialities here. But, you know, for the moment, actually, the the MOU is a a nonexclusive relationship. We're very excited about it. We think it's the the best way for us to approach the the medical device sector. And, you know, we we've had a reasonably long exchange with Surtech over the past year or so. You know, they have a a strategic interest in acquiring battery technology expertise to supplement the rest of their portfolio, and and we have a strategic interest in scaling up our manufacturing capability.

54:21 So so far, it appears to be a very well matched relationship. Great. I might just, interject just coming on the basis that we're coming up to time, and I'm mindful that you have a follow on meeting beyond here. And for every question you answer, there's another one or two that pop their way through. So if there are any further questions within that list that you wish to go through at this time, if not, obviously, we'll make those available post the meeting for your responses where it's appropriate. I don't know if there's anything there that you wish to address. And if not, if I may just ask you for some closing comments because I will then redirect investors to give you their feedback. Very good. I think maybe I'll just take one closing question, which I think is is probably pertinent this week. There's a question here. You know?

55:08 Any implications up or down in Britain for for British folk? Well, you know, I I think it's a very sad announcement that British folk were not able to secure the finance that they required for their business model. I just want to emphasize the difference in business model that IKA represents relative to the one that British Vault were pursuing. In British Vault, we're planning to build a gigafactory or, in fact, gigafactories. And, you know, I I see that really as an infrastructure type project that requires substantial project based financing with, you know, a mix of of equity and structured debt.

55:56 ILIKA is a a development a technology development offering, and, you know, we're developing a differentiated novel type of battery technology which will be licensed. You know, we we don't intend trying to finance our own Gigafactory. So they are very different propositions, and I I don't think really that the British folk story is is really relevant to the journey that we're on here at IKA. Thanks very much for your interest today, guys. We will endeavor to answer the rest of the questions that you've raised. And I'd like to thank you for your continued support, and I look forward to updating you again shortly.

56:46 That's great. Thank you, Graham. Jason, thank you once again for updating investors this afternoon. Companies ask investors on the call not to close this session. We'll now automatically redirect you for the opportunity to provide your feedback in order the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of ILIKA PLC, we'd like to thank you for attending today's presentation. Good afternoon to you all.