Ilika (LSE:IKA) Q4 2026 Earnings Call

0:00 good afternoon and welcome to the illica plc investor presentation throughout this recorded presentation investors will be in listen only mode questions are encouraged and could be submitted at any time via the q a tab situated on the right hand corner of your screen simply type in your questions and press send the company may not be in a position to answer every question it receives during the meeting itself however the company can review all questions submitted today and publish responses where it's appropriate to do so before we begin i'd like to submit the following poll and I'd now like to hand you over to Graeme Purdy, CEO, good afternoon sir.

0:31 Thank you, Lily, and welcome to everybody who's chosen to attend this IMC session. This is ILICA's annual results for the year that finished at the end of April 26. And I'm joined here by our CFO, Jason, who, despite appearances, is actually sitting next to me. He's looking at the screen on his own laptop. So we are both at the same table. So we will now go into the slides and we will trot through and if you have any questions as Lily said please submit them into the Q&A chat and we will do our best to answer those for you.

1:24 so those of you who've been following the company for some time now will know that we've got two product lines they're both solid state batteries on the one hand we've got our large format goliath batteries which have been designed for evs and consumer appliances and on the other hand We've got our Steriax miniature solid-state batteries which have been designed for active implantable miniature devices and they are principally for medical applications as well as for Internet of Things or wireless sensors.

2:09 So let's have a trot through some of the activities, some of the milestones that we've delivered over the past year. I'll start with Goliath that's shown at the top there. We've secured significant grant funding from the Battery Innovation Programme and also the Advanced Propulsion Centre here in the UK. So we've effectively doubled up on the deployment of shareholder equity for our R&D program by accessing this grant funding. We have been working on prototype development with Jaguar Land Rover and also Agritas. We have a technology collaboration agreement with them.

2:56 We've completed the automation of our megawatt-hour pilot line that we use for making these cells and sharing them with customers. We've also sent out batches of these cells to OEMs and Tier 1 companies. for them to evaluate and give us feedback and we've had some early feedback actually from a defence agency that advises the Ministry of Defence here in the UK on the safety and suitability of batteries and that was a very positive validation and also we've announced that we're collaborating with that well-known folding bike brand Brompton for their e-bike range and that program has just started on Steriax we have commenced production of our m300 batteries we've initiated delivery of the Thank you very much.

4:20 and you'll see actually in our accounts that we've recognized the modest amount of a hundred thousand pounds in the last financial year and of course this is expected to grow in the year that we are now progressing. so just a quick review of our business model for those of you that are not familiar with it so we have an asset light business model which means that we license our technology we've already licensed our Steriax technology through to Certec Medical and in return for that we receive a profit share and royalties that's what's shown in green at the bottom of this graphic as well as revenue from the electrode sales which we were just talking about and then in blue for Goliath we receive grant support for the development of this technology and then in due course we will be licensing it and also receiving engineering fees in fact some of those fees have already started because we sell a prototype product the the 10 amp hour prototypes that we released Just before Christmas and also the technology collaboration agreement that we've got These are fee paying arrangements and then that flips into a royalty bearing license So we've been successful in securing a top-up round of funding just last month

5:54 and actually that's enabled some of these strategic imperatives over the next 12 to 18 months. First of all for Steriax, we're continuing to support Certex marketing efforts. They are of course very active, particularly in the US, selling to their customers and we can Peggy Back of their marketing efforts to actually make sure that the word on Stereax is getting out and of course there's some technical sales support that's required as part of that commercialization. The next thing that you'll see actually is an integration of our batteries into the Certec demonstrator, the Certec technology platform.

6:39 That's one of the real advantages actually of working with them is that they not only and so on. Product Sales to buy Certec rather than buy the final commercialization of the product by the end customer. In terms of Goliath, we've got an opportunity to hit some early commercialization, which we're very excited about, because what's happened is that when we sent out those 10 amp hour prototypes to a range of evaluation partners, some of them were non-automotive.

7:35 Remember that those prototypes were really sent out not because they were the final product, but because they were an important milestone on our EV roadmap. but some of those organizations actually viewed a 10 amp hour cell as being adequate for their applications in particular in the defense sector and for e-bikes too actually the Brompton's another example of where this 10 amp hour cell format is directly relevant to their product line and so based on the feedback that we've got from those evaluations We have decided that we're going to take that prototype and turn it into a product and of course you need a larger amount of testing and validation certification in order to do that and that's part of this MVP delivery.

8:30 and hand in hand with that we've got a series of commercialization agreements that we're talking about with non-automotive organizations so we expect to be able to put letters of intent and of course full commercial agreements in place on the back of those discussions and that will enable us to generate some early revenue close that gap to profitability and give added commercial momentum to the company but we haven't totally forgotten the EV commercialization opportunity we've still got a series of 10 ampere validations of those cells that are in progress it does take a while to complete those tests because cycle life is part of that validation and actually understanding how resilient those batteries are is part of a full spectrum of testing of those cells We are likely to secure some additional grant support for pack integration and other scale up activities and then that will lead into the first option to license so you know before we get to a full license there's likely to be an option phase where a partner takes the technology validates it goes through the BCD sample route that people talk about for automotive Before integrating it into a vehicle design

10:04 Right, so that's the overview. Let's talk a bit about Steriax in some more detail. There you see the Steriax M300 product beside some pharmaceuticals in the central picture. And on the right hand side, that's actually part of the Certec clean room where we've got some of our equipment installed as part of the microfabrication that Certec carry out there. So that partnership is really designed for growth. There are five end users that we'll talk about in a couple of slides time. A nice portfolio of 16 customers that we're dealing with and we've actually got more orders than we've got customers because some of those customers are big organizations and they have issued us with multiple orders.

10:56 So that's why we've got 19 as opposed to 16. We've commenced M300 deliveries to those customers and we've started generating those commercial revenues. The actual electrodes are made on wafers and that's why we say it's wafer processing income and that's what we've started to recognize. and that really will lead into the the profit share and then ultimately revenue share once commercialization volumes have been achieved so we believe that this relationship continues to give us industry validation and one of the questions we we often got from end customers well You know this is great technology guys but you know we're a multi-billion dollar company and we expect to sell millions of this product.

11:49 Can you really scale up? And of course with Certec we've got a convincing scale-up partner. They've got significant multi-million revenues in the US and have been a a trusted commercialization partner for many of these OEMs for many years so there's a lot of credibility associated with that partnership and also they've got a business development scale so they've got a commercial team that has access to the customers that we're dealing with now and of course a portfolio of others too and a strategic alignment in that they're also very keen on commercializing products for active implantable medical devices and this will, we believe, enable faster adoption of StereoX than if we were trying to do it on our own.

12:46 So for the end customer, this has got many benefits. Reduced surgery time, which actually is the biggest cost driver in getting a medical device. You can implant these tiny little devices close to the point of therapy so you don't have to manage leads that run through the body. They have a long life. you can charge the batteries at home inductively and they are powerful enough to be able to power a bluetooth radio and there you see on the bottom right an example of the m300 integrated into an orthopedic application so this is a knee replacement in this example the implant would measure movement in terms of amplitude and frequency of use and send that data out of the joint through to a physiotherapist which would then coach the patient for the optimum recovery after the surgical intervention so effectively securing better outcomes for the patients So there you see a summary of some of the milestones that we've achieved in 2025 and stuff to look forward to in the future.

14:10 We've talked about integration in the Certec customer platform and also commencement of royalty payments. and these are the key applications really for stereax there are many potential applications but these are the ones that we believe are the closest fit with what that technology can offer so orthopedic implants like we've just seen that's actually the biggest market lots of knee, hip and shoulder replacements that would benefit from this technology neurostimulation so this is where you Thank you for watching. Implanted sensors to measure blood pressure and also oxygen concentration in blood for patients with COPD Ophthalmic applications where you can measure the chemical composition of tears and help manage different conditions like diabetes and finally orthodontic applications where again it can be a compliance

15:40 thing to make sure that people are wearing aligners but also monitoring of biomarkers in saliva. and this is how we build up the financial projections for each of these applications the hashed areas are the prototype volumes and then we get through to mass manufactured product volumes so when we build up our financial forecasts to assure ourselves of an attractive return on investment we do that from the bottom up so rather than just saying that we're going to capture a percent of the market we work out what's the volume of production that each of our customers are likely to be able to deliver and this is just one of eight prospects actually for orthodontics orthodontics is the most represented application in our customer base and it is also actually the application where we'll probably get a product to market first because it's relatively easy to get FDA approval for this application this is a class 2 medical device and there are some drop-in replacements that are particularly a good fit with this particular technology offering

17:12 So you get this for biomarkers but also things like monitoring sports activities in particular where you might get concussion risk in contact sports like rugby, American football or soccer. Not only for professional athletes, I mean those of you that follow the Six Nations rugby competition will have seen that you get collision monitoring in that event right now but also more broadly in amateur sports and for school kids where you may want to monitor that more closely and clearly the smaller the battery the more comfortable it is for people to wear these particular aligners.

18:03 Right, let's talk about Goliath. There you see a picture of our 10 amp hour prototype held by one of our engineers in the middle. And then on the right hand side you see actually some of our coating equipment. If you look closely you can see a web, and that's what the industry calls these foils that you put the electrode onto. That's in fact a web with some anode coated on it. So why are people interested in solid-state batteries? Why bother with them? Well, people are actually interested in better batteries and we did some modeling together with Balance batteries, which is a well-known consultancy to the automotive industry and they worked out by taking a goliath battery and putting it into a hyundai ionic 5 that they could get a weight saving of 20 percent and of course if you do that that correlates to a range improvement of 20 percent if you actually keep the the weight of the battery the same or you can have a more compact battery There's also a cost saving.

19:21 We know that EVs are more expensive relative to their traditional counterparts, so anything you can do to reduce the cost has got a significant benefit in terms of encouraging customer uptake. and also you can charge batteries more rapidly that are goliath solid state batteries here we've taken about a third of the charge time reducing it from 18 minutes down to 12 minutes so some very compelling reasons to adopt solid state batteries and this is what the path to commercialization looks like when we look at some of these milestones with the green boxes around it we are expecting some more prototype validation back from the companies who have received those 10 amp hour cells of course we've built on some of that positive feedback by entering into discussions regarding letters of intent for non-automotive applications and that will of course turn into commercial relationships in short order further grant support to support the automotive roadmap that we've got and then early revenue actually from those 10 amp hour MVP sales so that's really important really I think to demonstrate the commercial traction

20:53 of this technology and then of course at the end of this the first option to license with an OEM or a tier one counterparty So what does the deal structure look like? Well, look, we've already ticked off the foothills of this particular commercialization model where we've already sold prototypes to companies who are interested in evaluating the batteries. The reason that we don't Thank you very much. sometimes that results in an engineering collaboration we have such a collaboration in place with Agritas which is the sister company to JLR of course both owned by Tata Sons and Agritas of course is the company that's building the UK's largest what will be the UK's largest GigaFactory in Bridgewater in Somerset, not too far away from where Illica is based and we expect that relationships like that will then lead to an option to license through the scale-up process and then when that goes well an upfront license payment and ultimately royalties on the revenue from the sale of those cells.

22:26 So I probably don't need to convince you as an audience that EVs are here to stay, but of course if you read the media sometimes you might doubt that. Here's a bit of data from the International Energy Agency. um and actually this is global electric vehicle sales that's historical data up to last year and for this year it is a forecast of course we're halfway through this year already so plenty of evidence You see that China remains the country that has adopted the largest number of electric vehicles and continues to buy new EVs, but Europe has also shown significant growth um actually in europe um in 2025 we got 27 percent growth of ev sales the us has shown a drop actually in the number of new ev sales that's a bit of an outlier globally largely due to the removal of incentives that are still in place in many other jurisdictions around the world although of course in China they've been removed and there's still strong growth there the UK is very much in line with the rest of Europe with the larger economies here in Europe and is also showing strong growth and in fact if you look

23:58 at this chart on the right This is from the OBR, so the Office of Budget Responsibility here in the UK, and at the end of 2025 they were still expecting that by 2035 that the total car stock on the road, so not just new purchases but all of the cars, all of the vehicles that are on the road, the majority of them would be electric. In the first half of 2026, we've actually seen a bit of an acceleration of new vehicle registrations as EVs as a result of higher oil prices, so petrol and diesel prices at the pump through the war in Iran. that's impacted fuel prices here but let's see if that's sustained through the rest of the year.

24:55 Most analysts think that actually that demand will continue to grow very strongly this year. So part of the feedback, part of the validation that we got as our 10 Ampower batteries were tested was a piece of testing that we hadn't done before. and this probably wouldn't surprise you but it was actually a Ministry of Defence advisory agency that took our cells and shot them to bits on a firing range and of course that's not part of the standard tests that you would put an automotive battery through so we hadn't done that before. and we actually saw that there was a series of results that were very positive. Batteries, as you know, are used increasingly on the battlefield because of the large amount of electronics that soldiers carry for communication and location determination and intelligence gathering.

26:04 and you can see actually in that picture a battery pack that a soldier's got there a conformal battery pack really that the soldier's wearing on the vest and these have become a bit of a target because normal lithium-ion batteries when they're hit tend to go up with a small explosion so they can cause more injury than even being shot by a bullet so having ones that are Thank you for watching. And also there's a sovereignty angle here where a lot of defense spending is being accelerated, particularly here in Europe, and countries are wanting to use it to stimulate their own economies and not be reliant on long supply chains from other jurisdictions.

27:07 and I also wanted to mention the e-bike opportunity with Brompton so this is a piece of grant funding that we've just recently received from the battery innovation program and this is really supporting integration of those 10 ampere cells onto Brompton e-bikes Brompton being the biggest bike manufacturer in the uk the biggest e-bike manufacturer as well and the biggest exporter of e-bikes from the uk and there are some real advantages to using goliath batteries increased energy density and enhanced safety so we're very excited about this application and yeah there's obviously a lot of Demand really for improved e-bike safety you do read about incidents where people have got e-bikes on charge at home and perhaps it's a poor quality battery that ends up causing a fire so there's a lot of scrutiny of e-bikes and also of course you're not allowed to currently put them on aircraft so if you can come up with a safer battery that gives the regulator more comfort that it wouldn't trigger an incident then there are commercial advantages to that.

28:33 so these are our annual results at this point I'm going to let Jason talk you through the financials thanks Graeme so just picking up the highlights from the financial reports that we've published out this morning revenue was flat year on year against numbers published last year at 1.1 million pounds although it's important to note from within that as Graeme has already touched on We've got 100,000 of the first revenue started to come through from Sterix and if those eagle-eyed of you that have been watching the R&S announcements that have come out would have noticed that that came at the end of February, beginning of March so really in the year to the end of April we only just managed to get a couple of months of that in at the end of this financial period so we would expect that to build through this financial year as we go forward that's really the start of revenue coming and it's a great inflection point for the company so really we're starting to get revenue from the wafers now as Graeme has said we'll look to see the actual batteries being delivered into that development activity at the customer end grant income continued on so one million pounds from grant income and we would expect to see that continue into future years as Graeme's already said we've got the Brompton activity and there are other applications we have in the process. Grants are not just a great way for us to get non-diluted funding but they're also a fantastic opportunity for us to work with people in the commercial sector

30:06 so as a battery developer you want to have access to people who are either further up the supply chain and closer to the end use product or the end use product themselves so Brompton is a prime example of doing that and the previous grant funded projects, Primed being the main one that we had in this financial year was a great opportunity to work within the automotive industry with both partners and oversight from people in that industry. The EBITDA loss was £6.2 million versus £5.2 million and that's excluding the share based payments. The reason for that increase was really a ramp up of material. So as we move from 2Ah batteries that we were making a year ago up to 10Ah batteries on the Goliath side, really we're consuming a significant increase in material.

30:53 as we're feeding into the larger batteries and producing more batteries that are then going into the testing evaluation program both for us and for those customer partners that we've provided those batteries to so that really takes an increase in material coming through to be able to do that and also for anyone who's eagle-eyed and looked through the accounts you'll have seen that up until this year we have been capitalizing some of the development costs of the Steriax activity so that's the final stages of development as we move from an A sample through to a B sample we were capitalising that to create an intangible asset once we started generating that revenue we brought that asset into its useful life so that means that we no longer capitalise cost to that so any of those costs from February onwards that we were experiencing anyway so no difference in cash now falls onto the P&L or the Unincome Statement so no impact from a cash flow perspective but you would see that on the income statement rather than the balance sheet and therefore that makes that loss a little bit larger.

31:58 That reflects down into that loss per share of four Thank you very much.

32:31 Thanks Jason. Let's have a final slide to wrap up with before we go and take a look at some of the questions that might have come in. So we have a really strong patented portfolio across multiple jurisdictions. In fact we've got 88 granted patents now. We are diversified across multiple markets that we've been talking about during this presentation with some near-term opportunities for commercialization so I believe that the company now has a reduced execution risk. We have got in-house fabrication facilities which allow us really to supply batteries through to our partners and validate any scale-up plans that we have in place.

33:19 We've already got a licensing and royalty agreement in place with Certec which is set to deliver that economy of scale that we are chasing. and it provides us with the ability to rapidly ramp production of the batteries and the GlyEarth prototypes have already been shipped to a series of OEMs and Tier 1s, very positive feedback on that in commercially sponsored evaluation trials. Thank you very much. I'll just hand back to Lily for a moment. That's great, thank you very much for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab situated on the right hand corner of your screen.

34:05 Just while the company take a few moments to review those questions submitted today, I'd like to remind you the recording of this presentation along with a copy of the slides and the published Q&A can be accessed via our investor dashboard. As you can see, we have received a number of questions throughout today's presentation. Can I please ask you to read out the questions and give responses where appropriate to do so and I'll pick up from you at the end.

34:26 very good thank you Lily so yeah we've received actually quite a few questions in advance of this session which we have answered and they'll be published shortly once we've wrapped up this presentation but we've seen some more come in actually as we've been speaking so we will do our best to review and answer these um and let's see what we've got so um the first one is um what is the status of the Agritas development uh so the status of that is that we have um a technology collaboration agreement and within that we have a series of workshops and products deliveries um we have already delivered a number of prototypes as part of that relationship and actually we expect to deliver some further ones and that's a a close interaction and we value the opportunity to work together with the Agritas team and exchange views on the competitiveness of our batteries as well as their needs in order to ensure Thank you for watching.

36:14 what we have decided to do is optimize the performance at the 10 amp hour prototype level and actually because we have limited resources focus some of those resources on commercialization of that 10 amp hour cell rather than have a full allocation of resource on further r d We realized that we want to make a strong and convincing return on investment and when we've run the numbers actually we've convinced ourselves that it's better to deploy resources to commercialize what we have in hand rather than continue to develop a larger product.

37:02 Next one maybe if I take it to give your voice a rest for a moment. So have you had any input on any aspects of the design of the new Agrasys factory in Bridgewater? Understandably, no, we have had no impact or advice given to that. Really that plays back to where we are looking to focus to our own strengths. So we recognise that our skills are in that R&D sector, not in that mass manufacturing. And you can see that in our relationship with Certec. you know we chose a partner that was best placed to manufacture at scale for our Stereax partnership so giving advice into Agrartis in how they should set up a factory is not really appropriate however what i would say is our choice of chemistry and cells has been designed around making it as applicable as possible to the standard gigafactories that are out there and also the model that Agrartis are using so that The cost of change or the cost of implementation of the illica goliath cells is much lower than maybe some of the other sulfides or lithium metal chemistries that are out there that might need changes away from the current manufacturing sites and we've been able to prove that out and demonstrate that with some of the work that we've been able to do with the UK Battery Industrialisation Centre, the UK BIC, where they have taken our designs and run it on their larger gigascale type equipment to be able to prove that out.

38:33 So no direct input there, but also we've worked very closely in those conversations, as Graeme said, with the gratis collaboration to make sure that our technology is applicable to what they're doing within that factory.

38:49 What's the annual battery capacity of your pilot line and how is it affected by battery applications for automotive, defense or consumer? So annual capacity broad brush is one and a half megawatt hours per year. um and um that means that when you take into account yields that um ultimately we will be able to produce uh up to 20 000 10 amp hour batteries a year um so it is an interesting question because what we built as a pilot line for automotive is actually the right size to be a commercial manufacturing line for some of these other smaller applications so low volume high margin manufacturing is something that we are evaluating in order to deploy that pilot line. Maybe we should call it a mega factory line instead of a gigafactory line more usefully in order to enhance our return on investment.

40:07 Next question here is, can you give us better clarity on what the future holds in terms of projected sales figures within specific quarters? unfortunately we are tightly regulated as a name market listed company and what we can and can't say so we are not in a position to be able to give that what i would do is point you towards our own website and the analyst section there which is available for anyone to access you have to just click a couple of confirmations as you go into that and that will give you a better understanding of where the analysts who've looked in depth at what we're doing have put in terms of this next financial year and I think the Cavendish analyst goes a little bit further out than that and they give their own rationale for those calculations so while we can't provide it here I'd point you in that direction and hopefully that will help answer your questions.

40:58 very good um could defense become an earlier commercial opportunity than automotive i think that's a really good question um we are seeing the defense sector uh radically reinvent itself i think you know historically timelines for new technology adoption in the defense sector were quite long um but We have learned a lot from the war in Ukraine. I think a lot of defense authorities in Europe are looking to re-equip themselves with relevant technology as quickly as possible and actually from being one of the slowest moving sectors it appears to be rapidly becoming one of the Fastest moving sectors with hybrid approaches to defense.

41:50 For instance, you know, in the Navy, not just large ships that take many years to build large aircraft carriers and frigates, but actually a lot of marine autonomous uncrewed vehicles and some very sophisticated technology, state of the art technology that's being deployed. So I actually think that there's a very exciting opportunity for us in that sector. Next question we've got here, how does Trump's tariffs impact Illica? Actually we are relatively well placed to avoid any impact and that goes back to that licensing model so one of the main reasons for choosing Certec as our partner for the SteriX battery is obviously they are in America for their main manufacturing process and as they are using us for one of the stages of that manufacturing process we have an ability to pass materials through with very little impact of that and that really goes back to you know the us looking to help themselves but by choosing the right partner in the right market we've been able to make sure we're in a position where we're not impacted by that obviously as we scale up Goliath or the defense opportunities and look for any further partners what the global situation is at the time we'll try and position ourselves so that we are as protected as we possibly can but we don't have a crystal balls to understand what happens in the longer future but we'll look for mitigations as we go forward

43:24 Next question, do you currently have the manufacturing capability to meet the demand for Steriax needs in 2030 and beyond? And what is the level of capital investments that are needed by Illica to meet the demand? So I would say to that that of course we've transferred manufacturing capability to Certec and the capacity that we have in place with that equipment that's now installed in the US will meet our needs for the forthcoming period and when we max out that capacity which actually I hope is sooner rather than later actually it would be Certec that would invest in that equipment for larger volumes of manufacturing.

44:12 The only piece that we have retained is our ability to make electrodes, so actually the cathode electrode, the positive electrode, within our Stereax batteries. We've still got the piece of equipment for doing that here in the UK. That has significant capacity but in due course we may replace that but that is not a particularly significant piece of investment that is going to make a radical change to our financial profiles. um next question is an interesting one um how are you as a company dealing with your battery being used in robotics i remind myself of a newsletter where a robot was not allowed to travel with its owner in the plane because of the danger with lithium-ion batteries which are now the standard is this a market you're looking for ahead uh in the coming future yeah so um yeah airlines are very nervous about lithium-ion batteries on board if you've flown recently you will realize that you know you get asked if if you're carrying auxiliary power packs and Thank you for watching.

45:51 and that's very interesting for us because of course we specialize in a technology that has got an enhanced safety profile some of you will have seen the videos that we've published of our two ampere cells on youtube that show that the batteries are more resilient to penetration tests So this is part of our mission that ultimately we make batteries that are safe for air travel and use on public transport and we remove this risk that users of lithium-ion batteries are currently having to manage. We've got a question here. Are modules and packs for the cells going to be provided by Illica or will the licensees create them? Have the materials to be used been decided?

46:45 I think going to the theme that we've talked about already we know to stick to our strengths so we would look for the licensees to be integrating those into packs and modules however in some of the smaller options certainly on the automotive scale we'd be looking for that to happen at a licensee at the smaller opportunities in and around the and many others. We would certainly look to collaborate with experts in that field and have already had a number of conversations with those people to make sure that the products that we are producing in terms of our turnaround power is applicable and how they would fit into those applications. So once again we wouldn't look to delay ourselves and go backwards. We need to draw on the right expertise to make sure we were Staying relevant. And in terms of the materials, certainly the materials we've identified for that 10 amp hour prototype are decided that we would use for commercialization.

47:49 Although as an R&D company, we continue to obviously look to optimize and look for improvements wherever we possibly can. So always one eye open to the future.

48:02 What are the lead times for new battery formation and testing equipment? Are there third-party facilities that could be used in the interim? So actually we pride ourselves in our ability to plan ahead. The reason that we specified that we were going to use some of the funds that we raised in the last placing for the battery formation and testing equipment is to make sure we've got sufficient equipment in place for when we need it. We of course have equipment already and that's enough to deal with the levels of production that we've got. but as demand starts to ramp and we define this 10 amp hour MVP then we need to increase that capacity so we probably won't need to go to third party in order to access external capacity unless we're totally overwhelmed in which case we might be ringing up our friends at facilities like UK Big that has the ability to be able to do that Are the facilities at UKBit capable of producing a complete 10Ah Goliath battery from start to finish? Is it a cost-effective alternative? Should demand for the 10Ah batteries exceed

49:33 Ilika's pilot line capability. So yeah, the facilities at UKBIG are capable of producing a complete Goliath battery, 10 mAh Goliath battery from start to finish. And well, whether it's cost effective or not depends a bit on the batch size and also whether the application would tolerate those costs. but it's certainly a capability that we are aware of and we'd be happy to work together with the UK BIC again should the commercial and business case justify it. Next question here is the benefits of grant funding are obvious however the government and its affiliates are generally not viewed as dynamic in the same way a private company is answerable to its shareholders given illica's university roots is it staying within its comfort zone and pursuing a grant every step that's this in the concept context of every We are absolutely pursuing commercial interactions and conversations with non-grant bodies where you see a lot of the news flow happening around grant funded is obviously because it's publicly funded and Thank you very much.

51:12 Does the Brompton JDA help you to develop an MVP for scooters and maybe drones as well?

51:42 so the reality is that there are lots of different applications for batteries you're absolutely right that there is a big demand for batteries for e-scooters and of course you know drones land sea and air um what's key for us actually is to just evaluate the the business case for each of these different applications in turn and to work out what product would be required in order to realistically develop the applications and actually you often find that the duty cycles for different applications require different battery designs So what we've got to avoid is becoming jacks of all trades and masters of none. What we'll probably do is we will identify one, maybe two market opportunities that are a really good fit for our 10 amp hour prototypes and focus on them, deliver them, generate commercial revenues and then use them as a platform to diversify into other markets in due course. We've always got to avoid going head to head with less expensive Chinese principally manufactured batteries that we're not differentiated with. So we always choose the applications very carefully so that we can emphasize the USPs of our products and make sure that

53:15 we can sell the products for a profit margin. That's a good segue into a question here. What are the risks from China given their reputation for copying our technologies already? Obviously, that's a risk that we discuss, IP leakage, and therefore we make sure that All of our activity where possible is protected by patents and trade secrets. We employ external IP experts, lawyers to make sure that we are looking after and protecting as much as possible everything that we have. We're also using trade secrets where putting information into an IP application might give and many others. that's where as we've talked in previous presentations our markets are primarily focused around the western hemisphere in terms of the European and US market although you know clearly the Korean market and maybe outside of greater China is an opportunity for in the future but we certainly wouldn't look to do anything there in the near term to make sure that we're giving as much protection to our technology for it to be out

54:45 in the market.

54:49 Here's a great one. The government announces X billions for ILICA-related fields, but ILICA itself receives relatively tiny amounts. Given the potential for ILICA to redefine aspects of automotive and defense applications, why is more money not forthcoming? Well, we would be delighted actually to receive more grant funding. The reality is that the government agencies that are responsible for dispersing government grants are under an obligation to run competitions for companies that wish to access that funding. Actually, the amounts that are on offer are typically massively oversubscribed.

55:38 sometimes there's only a 10% chance actually that a company can secure funding that's made available so we have to choose which competitions we enter very carefully and you know we've got a pretty experienced grants team that has been very successful over the years and continues to be successful so we we try and make sure that when we put in for a piece of grant funding that it's a compelling proposition and one that will score highly otherwise you know we end up spending an awful lot of time writing applications that wouldn't go anywhere Grant funding is very important and the agencies responsible for dispersing those funds are doing their very best to make sure it's dispersed on an egalitarian basis and on merit.

56:45 There's a clarification here actually from an earlier question. With the question about robotics, I meant the current future vision on robotics as a business. So industrial robotics, autonomous robotics, human-like robotics. So that's a good question. There is actually a massive diversity of um robotic applications uh depends you know what you mean by a robot and um there are lots of uncrewed vehicles and autonomous robots that all have slightly different duty cycles It comes a bit back to the question on what should we be developing Goliath batteries for.

57:34 Some applications require a really long cycle life. Some are really power intensive and require batteries that will release their energy very rapidly. Some are very low power robots that just require a really high energy density so that the the robot can operate for a long period of time sometimes in a sort of sleep mode so um you know we're evaluating all of these these are really important applications uh of the future uh whether we like it or not actually i mean there's some concerns about the rise of robotics but um you know they are here to stay and and we are currently evaluating them very closely I think we're just about out of time so we'll take the opportunity to look at any other questions that have been submitted that we weren't able to get to and we will do our best to answer them if we can.

58:34 That's great thank you for answering all those questions you can from investors and of course the company can review all questions submitted today and will publish those responses on the Invest to Meet company platform. Just before redirecting investors to provide you with their feedback which I know is particularly important to the company, Graeme could I please just ask you for a few closing comments.

58:50 Well many thanks for the exciting Q&A interaction today. I really value the opportunity to be able to engage and talk through some of your ideas and concerns and as Jason said we will follow up with the few remaining questions that we haven't managed to get around to verbally today. that's great thank you for updating investors today now please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations this won't take a few moments to complete and i'm sure be greatly valued by the company on behalf of the management team we'd like to thank you for attending today's presentation and good afternoon to you all