Invinity Energy Systems (LSE:IES) — Investor Presentation

0:00 Good afternoon, and welcome to the INVINITY ENERGY SYSTEMS PLC Investor Presentation. Throughout this recorded presentation, investors will be in a listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it received during the meeting itself. However, company will view all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Larry Zulch, CEO. Good

0:31 afternoon to you, sir. Good afternoon, and thank you, and welcome, everyone. I'm glad to talk to you today about INVINITY ENERGY SYSTEMS. I'm joined today by Matt Harper, our chief commercial officer and cofounder of Avalon Battery, predecessor to INVINITY, and Peter Dixon Clark, our chief financial officer with a great deal of experience in energy.

0:55 We're gonna start off with Peter talking about our results, so I'm gonna turn it over to Peter right now. Great. Thank you, Larry. So I'll do a quick canter through the highlights, and then we'll get into a little bit more detail if if helpful. So across the top of the slide, we've got 9.3 megawatt hours sold between January and June and delivered a similar quantity and a closed sales backlog of 14,000,000. So that's essentially closed sales not yet delivered, but very near term revenue is the way to think of that number. In terms of 2021 itself, revenue, 3,200,000, almost all of which related to our existing product, the v s three. So that that is a a real milestone for the company.

1:43 There are a number of generations of earlier batteries, but this is this is the revenue that relates to to the existing product, the v s three, and hence, the huge increase in turnover year on year. So, you know, truly historic. Year end inventory, 9,900,000. This includes prepaid inventory. We don't call it inventory until it's sitting in our warehouse, but in with some of our suppliers, we pay them upfront. So effectively, this is how much of our cash is currently sitting within inventory. And you'll see straight away that that 9.9 isn't far off the 14,000,000 of closed sales backlog. So we've already made a really good start around delivering those closed sales. That's why we're confident that they are near term.

2:32 Year end cash at 26,000,000. That essentially reflects a very successful fundraising we had at the towards the end of last year, 29,000,000 before expenses, obviously, less after expenses. Group remains debt free. Technically, we do have leases. So, you know, that but that's more about accounting standards than than than debt. So what I'll do, if I may, is just dive into the primary statements quickly and and just pull out some of the key some of the key points here. So I've talked about the revenue, 3,200,000. Predominantly relating to our Oxford project, we've talked in we talked about that, and it's it's it's it's on our website. But that was very much the sort of the catalyst for the merged the merged group. And, you know, delivering that and the fact it's trading and delivering value to the customer is a huge a huge validation of of of the product and and what we what we offer in this space.

3:30 Tough trading environment last year, as you all know, tough supply chain and and and big increases in in expenses. You know, we managed those as best we could, but we've got cost of sales of 6.6. So a gross loss of 3,000,000. Not unusual for a company at this stage of its growth cycle, but, you know, clearly something we're working hard to address. In terms of admin costs, we split out the the staff costs from the from other costs. Most of those staff costs relate to either our client facing departments or our product facing departments. So, you know, it's very much about the the value drivers. By client facing, I mean, Matt's commercial team, the guys who identify the sales and close the sales, solutions engineering who then take that sale, and they're particularly interested in the in the interface between the battery and the client, you know, the point of offtake. And then we have a customer operations team who are physically out on-site delivering.

4:32 Now part of our business module model is to and part of our opportunities to drive down costs is to step back from some of the physical time on-site, but to sort of appoint EPC contractors. And and that's a sort of tried and tested model. And, you know, as one scales up, it it it works better and better. So and then in terms of the sort of the development, we have two key departments. We have a technology department, and we have a product development. Technology is more about the electrochemistry and the stack, which is, you know, what we think of as the engine in the battery. That's where all the intellectual property is. And, you know, we don't let that part out of our sight, as you can imagine. Product development is more about mechanical and electrical, but, you know, both absolutely critical to the product.

5:20 We got some operating expenses sorry, some other operating income and expenses. Main item in there is what we call onerous contracts. If we close a contract that, you know, prior to delivery, we think we're gonna incur a loss on that contract, then then we we provide for it up front. So and, obviously, as that provision unwinds, it it it works its way into the income statement. The reason it's here is this is this is reflecting the movement on the provision. So that gives us a a bottom line result of about 20,000,000, which is an improvement on last year, so heading in the right direction.

5:55 Again, given where we are in our growth story, the balance sheet is is as important as the income statement. Net current asset noncurrent assets, effectively goodwill leftover from the the the merger. As many of you will know, INVINITY is the product of a merger between a North American company called Avalok and a UK company called Red Tea. And the the basis for that merger, the business rationale is still very much in the fall. One company one of the two companies had a much stronger product, particularly the North American company, and the other had a much stronger pipeline sales pipeline. So you put the two together. It's a great combination. Inventory. I've talked about inventory being 9.9. Here, I split it between inventory and prepaid inventory.

6:41 So that's where the 9.9 comes from. And much of this prepaid inventory has already been turned into physical product. It just isn't sitting in our factory. So for now, we've left it in prepaid. But it gives a flavor of how far ahead we are in terms of delivering and and most importantly, seeing revenue from those deliveries. Other assets, cash I've talked about, 26,000,000. Trade payables, fairly straightforward. Contract liabilities, this is where customers have paid us upfront a series of milestone payments. And, obviously, the more the greater the percentage of the contract upfront, the better from a cash flow point of view. And, you know, we find that varies in different different jurisdictions. Australia seems to be particularly generous, so, you know, another very good reason to do do business there.

7:31 And that will unwind as it turns into revenue. Provisions, I've talked about provisions. Much of that is owner's contract. And obviously, the more we sell, the warranty provision will will will build up, and there's some sort of legacy in there as well. So those are the two key primary statements. But, you know, the CFO, the question I always get asked is about cash. So I thought if I set that out here, probably the the the the easiest way to do it. So, you know, we've talked about the loss of about 20,000,000. There's the increase in inventory. So just in this year, we've invested almost £8,000,000 of our and, obviously, this is net of inventory that's left the factory, you know, on contracts. Sorry. Yeah. This is net of inventory that's left the factory. But, you know, build up we've built up the inventory of almost 8,000,000.

8:21 Investing activity is fairly modest, and there's the there's the the financing that I was talking about last year. So that's net of expenses, but does increase some include some warrants that were exercised in the period. And rolling right forward to this year, what does all of this mean in terms of a current cash burn? So opening cash position $2,618,000,000 at the end of May. That's a movement of 8,000,000 back out the inventory. So we're still investing in the inventory even as we talk. That gives GBP 6,000,000 over five months. That's sort of a non inventory cash burn of GBP 1,200,000. So that's what the numbers say. Thank you very much. I'll hand back to Matt and Larry. So we'll turn it over to Matt, our chief commercial officer, and he can tell us about what's going on commercially. Thanks, Larry.

9:15 So look, INVINITY's thesis has always around our path to net zero has always been sort of distilled in in three points. That shifting to renewable energy requires energy storage, that lithium is not going to meet all of our future storage needs, and that lithium has sorry. INVINITY has a utility grade alternative. We have a battery that is safe, that is durable, and has the economics that deliver the long run performance that utilities need to build the grid of the future. What's exciting about the last six months in particular is that we are proving that we have that product. We have proven product that we are delivering in the field, and we are we are proving that that product is capable of being that alternative to lithium.

10:02 The the most recent example of where we've been proving that is at the Sonoma Fire Station California where we're doing both renewables integration and critical infrastructure resilience, making sure that when California wildfires happen, this critical infrastructure remains powered and remains able to serve its community. Similarly, at the European Marine Energy Center up in New York, you know, what we're proving is that we can take we can be part of the not only the sort of path to net zero, but we can also be part of hydrogen economy as well. What you know, taking power that's being delivered from tile generation and using that to generate clean hydrogen twenty four hours a day. Back down here closer to where we are sat today, you know, the ENERGY Subaru of Oxford is has been our marquee project we've been working on installing and operating now over the last few months.

10:58 You know, this is this battery is is doing two different things. It's doing both energy trading on the electric grid, and it's providing ancillary services to the grid, both of which together are operating today to generate some very compelling revenues for our customers at at EDF and Pivot Power. Finally, at Scottish Water Perth, we're proving the portion of our our business where we help commercial and industrial facility operators both decarbonize their operations and ultimately yield much lower electricity costs as they take self generated electricity from their solar panels, wheel load that energy through our batteries, and then deploy that energy into times when the electric grid pricing is at its absolute peak.

11:45 What's exciting about this group of projects is that it comes together in what we view as, you know, the the overall landscape for energy storage. Lithium has done a very good lithium batteries have done a very good job of proving that at the bottom left hand side of this chart that they can be phenomenally profitable on the electric grid. But what we are proving in these four projects that are now operational is that is that there the other areas on this graph, this chart, the other portions of that energy storage landscape are, you know, perhaps even a much larger opportunity for energy storage in general and is ideally suited for the kind of capabilities that we can deliver onto the electric grid and that we are currently performing with these with these projects we now have in place.

12:37 In terms of what that proof means for our commercial pipeline and our sales prospects, you know, we're we're we've been very excited to see the amount of new inquiries and new qualified business that is sitting in our sales pipeline. Since we reported this same time last year, we're up a 162% on our on our qualified deal flow. That's based in large part because of the kind of proof that we're delivering at these these these projects that are now operational. You you may some of you for this us talk about this before will recall that, you know, that qualified group is not just, you know, someone who's rung us up and sounds like they have something interesting. You know, we go through a very rigorous qualification process to make sure that those projects have the need, that they have funding available, that the project timing is within range, you know, something that we can actually contract for in the next twelve months, and that ultimately, is a reason why our batteries are the best solution for a particular project.

13:43 If those things are established, only then do we count those deals as part of our qualified group. The deals that we talk about as part of our advanced pipeline and part of our base pipeline are essentially those that are advancing through towards contracting and close. Deals in our advanced group, which, again, is up a 115% over this time last year, include projects where, you know, we've been selected as the battery provider, where site engineering is currently in process, and, you know, where we have a very clear line of sight towards when that deal is gonna be completed. Finally, the deals that are in our base group, those are the deals that we are basing our business on. Right? We are reserving working capital. We're reserving manufacturing capacity in our plants. And, you know, we the that that group are the ones that we believe we are going to be working on manufacturing, delivering, and operating in the near term.

14:38 Exciting for us over the past few months is that we've significantly changed how we structure some of our sales activities. We now have dedicated heads of sales in all three of our core markets in The UK, North America, and Australia. And especially as we look to the amount of business and the amount of interest in longer duration nonrithium storage in The United States. You know, we've been adding to our horsepower to be able to address the funds that are going to be available from, you know, Department of Energy, the California Energy Commission, and a number of other funding agencies. So this takes us to the broader view. And, you know, we recently have run into the same kind of problems that every company has been dealing with with COVID and shipping delays and supply chain issues and all of that. We've also had areas specific to energy that have been some of them, people have asked us, isn't that positive?

15:39 You there are energy shortages and energy prices going up. And, certainly, the operators of ENERGY Soup of Oxford have benefited from that and and and been able to help address it and benefited from doing so. But it's also been rather neutral or sometimes negative for us, but those negative things can turn into positive. Energy shortages are leading to push toward renewable energy, but it it can happen in a in a day or a week. It it this is a multi month and even multi year process. And I draw your attention to lithium issues, that second from the bottom there. The environment where we're working to provide an alternative is has its own challenges, and those challenges have been helpful to us in in in making an environment more suitable for our products.

16:34 The price of lithium has been going up, not down. The delivery schedule has been lengthening, not shortening. The perception of and the reality of fire risk has been increasing, not decreasing. And that gets reflected in insurance costs and issues with siding and all of that. So we get a lot of of organizations coming to us and saying, your battery sounds great. We want it. And that's a fantastic thing. But many of them are looking at a scale that we are not able yet to meet. And so we're working on how do we meet that scale.

17:12 And one way that we're doing that is in generating in developing our next generation of flow battery. And we're codeveloping that with Siemens Gamesa, one of the leaders in in global leaders in wind turbines. We signed in 2021, so last year, a joint development and commercialization agreement with them. And that is building a flow battery together that addresses the needs of wind turbines, large solar farms, and other even just pure grid connected needs at a scale that can't be addressed by our current product. Now if you step back for a moment,

17:52 look at lithium batteries are an established market now, But ten years ago, they were at prototype stage. About 500 kilowatt hours was a pretty good sized lithium battery project, and that's certainly the case for many of our competitors and has been the case for us in the past. 500 kilowatt hour project, half a megawatt hour.

18:13 The the next stage would be to go to a pilot level, five megawatt hours or so. And that lithium batteries went through that stage as well. The following stage, 50 megawatt hours. So we're going up by a factor of 10. So we've been doing five megawatt hour projects. Now we're doing and on that scale, now we're working toward 50 megawatt hour projects, commercial scale. And then with this next generation, we're able to address projects that are much larger than that from a 100 megawatt hours and on up. So this is a very

18:53 important part of what we're doing is to develop this next generation product because we're fundamentally a product company. And and it's going well, and we're not talking in detail about what we are doing nor does any product company talk about products in detail while they're still in this development process.

19:13 But you will keep hearing from us more and more about it. So I thought I'd take you through a bit of a vision of where we can head in the year 2026. And this is based on real information, but it's not a real project. Let me emphasize. This is not a real project. But in this in this concept, some large organization says they're putting in a gigawatt, 1.2 gigawatts of DC solar. Now to your right, there is an actual project in in Southern California that is a 400 megawatt portion of a 750 megawatt solar farm. So this is just enormous amounts of energy, and they have to put in storage. They need to because there's getting to be a lot of solar in California. And when the sun goes down, they need storage.

20:07 And they're looking they are actually and eight minute is looking at storage, but the scale they're looking at it, we can't address now. But we will address. So in this concept, it's a 100 megawatt project. That's the power. We're for six hours of energy. That's 600 megawatt hours. It's enormous. Cost a $157,000,000, about $262 a kilowatt hour. And that concept and, again, this is not real, but it's but it's based on real information, would in reality use thousands of tons of v two zero five vanadium as we use in our electrolyte. And that is available and will be available at that time. And in this concept, we would be building 2,000 of those modules that we codeveloped with Siemens Gamesa in order to fulfill that. And that's another thing that's entirely within the realm and the scope of our manufacturing. I'll talk about that in a moment.

21:05 And then the those empty modules, the batteries ready to be filled electrolyte

21:10 end up at a vanadium electrolyte plant. That one's US vanadium, but there's one in Oxford. Ox cabin that looks a lot like it. And those are storage tanks for electrolyte. So then the the the modules are filled with electrolyte, they're sent to site. And at the site, the foundations are already there. One of the great things about flow batteries and our flow battery concept is they can be brought to site, tested, and functional, and put on the concrete foundations, wired up, and be ready to go. And that's something that we are getting better and better at already in the projects that we've been delivering. In this case, then they get wired up with some Mesa Electric PCSs. Those are power conditioning systems or inverters that turn the battery DC to AC.

21:58 And that's used by right now, and we use Gomesa ones in Oxford, and we're they're part of the co development project. And then in this case, the batteries are stacked up and placed right next to each other. You will never see lithium batteries placed in as close proximity as ours because if one caught fire, it could propagate all the way through. So they're they're kept apart like ammunition bunkers. But in our case, by stacking them together, there's no fire risk. So then we get energy density that is quite good. It is not as good as lithium. Lithium batteries are famous for their energy density. It's also part of the problem with so called thermal runaway, but it also means you'll never see our batteries in a car or a truck. They are designed for heavy duty stationary use. So this gives you a vision of where we're headed, a possible project where in less than a year, we've gone from contract signing to over a $150,000,000 in this case of revenue.

22:59 So in my last slide, before we get to questions, I wanna tell you about what our focus is moving forward and what you can expect from us. Our focus moving forward is to co develop this next generation product with Gomesa Electric, the fully owned subsidiary of Siemens Gomesa Renewable Energy. You'll also see other commercial partnerships. Announced with Kyoseong. Kyoseong is an enormous company,

23:26 similar in size to Siemens Gamesa. And they are, in Korea, commanding in their ability to deliver electrical product projects, and they have delivered almost a gigawatt hour, a thousand megawatt hours of lithium ion battery systems, stationary battery systems. And they've been looking for alternatives. It may be because catching fire is not a good thing, and they've had that problem. And so they're, looking for alternatives. They bought our batteries. They

23:57 evaluate our battery, and they said this is the one we want, and we now, have them as our representative and are exploring further options on how we can work together. And we're also scaling up manufacturing, and that's moving from a rather bespoke manufacturer who's done a great job for us at the pilot level. I mentioned pilot level sort of at that five megawatt level, but they're not really capable of delivering at the 50 megawatt hour level, 10 times larger and and doing that across multiple projects. But Baozha, a large Chinese manufacturer of renewable energy projects, they are capable of that. And other companies have done that same transition from BCI to Bausch and gone to become very, very large in doing so. Our current product, the one before the one we're codeveloping at Siemens Gamesa, is too expensive to work in some commercial situations and be profitable or to be even breakeven for us. You saw that we'd lost some money on early

24:59 projects, and and that's true. And that often happens with pilot level projects where we're we had a great learning experience. We won't learn lose that same proportion in future projects, but but they are still very hard to be profitable. As soon as the governments come in and say we can help, it makes an enormous difference. And, you know, they're saying that they can help, and they are. And this is across Arena in Australia, based here in The UK, CEC in California, and the US Department of Energy. Why are

25:30 they doing that? Why do they care? They care because they're looking two or three years into the future, and they're seeing that the grid is gonna be incredibly unstable. Their proportion of renewable energy will be higher. The existing assets, coal, gas fired, nuclear will be less, and the energy storage needs can't be met by lithium. It was that original slide that Matt talked about. That is true. They see it. They're putting money where their mouth is. And then the last thing I'll mention for Focus is expanded US trading of our shares. The US market has not been able to trade our shares very effectively. And by doing so, that is a larger market and increased liquidity, which we're looking forward to. We think that the valuation can be more appropriate. There's no one as distressed about our current share price as we are.

26:23 What to expect? We're gonna actually demonstrate that commercial scale to you. We've already started talking about it where we've been selected to progress toward a 40 megawatt hour system with EDF that that the companies that we did ENERGY Soup of Oxford with. Obviously, they were happy with that or they wouldn't have participated and partnered with us for this next low des base funded project. We also need to deliver. We have a pipeline of projects. We have to deliver both demonstrating our commercial engagement and in delivering the price where we already have them in our backlog. We're gonna be making substantial progress in that Siemens Gamesa product. And these things take time. It always takes time to do big, important new products, but we are working well with them. We will continue to, and we will be telling you more about it.

27:18 And then last, important new relationships, ones that we're working on. We will you should expect hearing from us that we are not gonna be doing this alone. The companies that have the stature, of the existing, relationships we have with Hyosung and Siemens Gamesa and others, they're those will be expanded and progressed. So that concludes our formal presentation, and now we'll go to questions, and I see some have come in. So Larry, Matt, Peter, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just using the q and a tab situated in the top right hand corner of your screen. But just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides can be found on our platform.

28:06 As you can see, we received a number of questions throughout today's presentation, and thank you to all the investors for submitting those. Larry, could I just ask you to read out the questions and give responses where it's appropriate to do so, and then I'll pick up from you at the end. Absolutely. And thank you for the questions. Some of them are hard questions, and that's highly appropriate, and we appreciate them. With Paul asked, with the shares at 42p, what's the point in messing around with the short term warrant expiry date? I'll turn that over to our CFO. It's a great question. So we we can amend the warrants in a number of ways. We can amend the conditions. It really comes down to

28:50 how far the period is extended by and, you know, how much good news we expect to be releasing between now and and and that period. So I I personally think there is a point. I think it's also, you know, a great way to get more capital into the company,

29:06 particularly if it matches good news. So, personally, I think there is a good point to doing it. And let me just follow-up with Roger's question about, know, 50% of warrant holders have to vote yes to amend it. Is that gonna happen, Peter? Look. We well, the first part of the question is, do we have a track of our warrant holders? And, yes, our warrant holders very closely correlate to our our equity holders. So keep in mind that over our top five equity holders hold over 50% of our equity. So, you know, it's reasonable to carry that through to the warrants. And when we admitted the warrants to trading on Aquas earlier this year, that also required a vote.

29:53 And that was a matter of and that was, you know, that was that was heavily supported. But you would we were, as you would expect, very proactive with our bigger shareholders and and warrant holders who have to be the same people, and and they voted accordingly. So I think the the the the the makeup of the company and the the the register should you know, gives us a great deal of confidence around any any future votes. The placing last year this is Roger asking this also. The placing last year was oversubscribed, but the going concern statement is rather grim, especially if you do not win low debts too. Not clear given that cash is tight why you did not take all the money offered. Sure.

30:38 Look. It's well well, let let let's take that one point a time that point at a time. I mean, going concern statement contains material uncertainty, which is obviously not as good as having a completely clean going concern statement. It's not unusual for a company at our growth stage to have an emphasis on matter, particularly in the current environment. Auditors are very nervous at the moment. And when you have a company such as ours that is, a, growing quickly, b, investing a great deal in in inventory, and c, has a a very international supply chain, you know, we do register higher on the scale of of risk. But, you know, that is part and parcel of being a great stock.

31:26 The other point we should make is, you know, the rate we grow is within our discretion. So if, you know, if in the coming months, you know, we we continue to encounter headwinds, we can throttle back on some of the on some of our at the rate we ramp up. So that there's a great deal within our control. But, you know, this company is about growing, is about investing in the business, is about investing in inventory. So so, really, that that statement tries to strike a balance reflecting where the company is in its growth cycle, the macro environment, and in particular, the supply chain issues. Totally take your point about Lotus. One of the reasons we're putting so much resource into it, remember that we are down to the last five.

32:18 And from that five, at least three will will win will, you know, will win to go through to the next stage. And, you know, we we see us we see ourselves as having a very good chance in that. And, you know, working as we are with EDF gives us a great deal of sort of, you know, internal discipline and and equally a great deal of credibility in the eyes of the, you know, in the eyes of her majesty's government. So, you know, we feel pretty good about that as well. So we see that as a balanced going concern statement rather than a grim one. Although, you know, the macro picture at the moment is it's a it's a it's it's tough out there, but we do expect it to improve. So that's that's where I am on that one. Okay. Mike asked, well, recognizing that no new technology market developed strongly without competing suppliers, can you comment on your present relationship with Bushveld and their choice of CellCube as supplier for their own project?

33:12 So it is true. There are competing suppliers. We're actually supportive of the larger vanadium flow battery market because we think it needs to be a market and a market segment, and then we are going to be the superior one in that in that market segment. So we're we're I just got back, as did Matt, from the International Flow Battery Forum in Brussels. Cell Cube was there. Bushvell was there. We talked with each of them. Others were there as well. And and it's very clear that we're out in front.

33:51 That's very clear because we're the ones who can start flashing up pictures of projects like Matt did and and not be just putting up and we have been very careful in this presentation, you may have noticed, not to be showing renderings of any kind or computer generated images of possible future projects. These everything we've shown you in this presentation are things we've actually already delivered. No one else can do that. Our relationship with Bushvell is great. It's a fine relationship. But it's just a vanadium producer, and we've been using that vanadium in some of the electrolyte made by Ox Chem put in the ENERGY Soup of Oxford. And we're very pleased that we did not get that Vimetco project. We did bid for it.

34:38 We were a bit expensive because we were making sure it wasn't overly loss making. And as I say, we're very pleased we didn't get it in this particular case. I I

34:48 think you can read between the lines, but it isn't something that is causing us a lot of heartburn. Cell Cube is a a very valid competitor, and we're looking forward to seeing their first project actually energized and operated. Paul asked about regulatory news announcements in November and December. Both mentioned closing deals from near term prospects and deals in negotiations. Since then, only one order has been announced. How did the board sign off the statements? I'm not gonna let Matt talk about that. The board signed off, by the way, because it was what we firmly believed was the right thing. But, Matt? Yeah. Sure. I mean, from what was in our near term pipeline in November and December, you know, the the 60 know, 40% or maybe even more than that has been closed. That was that was what we know the elemental deal that we announced earlier this year. And I would say that, you know, the rest of those the rest of those opportunities remain very much in play.

35:54 And, you know, as we've seen what we've seen over the last six months is that customers are, you know, not moving as quickly as we would like to contract for some of these things. Some of that is, know, the the the reverberations of last year in in markets and in supply chain. Some of that is for customers who've been waiting to see us deliver proof of performance in some of the projects that we now have on the ground. But as I said earlier on, now that we have that good performance, we think we are gonna see a significant acceleration in those deals coming to close. We don't feel we have much credibility in telling you about the future. We're only gonna be able to show it to you because we we have told you things that we thought were gonna become true, and they were delayed.

36:40 In every case, the delay wasn't caused by us. I think you may some of you will know that we thought we were gonna be delivering the Yadlamanka Australian project, and and then aboriginal artifacts were found in the original site, and new site was identified. We're getting close to being able to let you know about that new site and getting confirmation of one that has been identified and is very, very close to final approval. So that's, you know, the kind of thing that is out of our hands, and and yet we do everything we can to address it. So another question for for Peter. What's your monthly cash burn in the current year, and how do you see it evolve over the rest of the year? Yes. So I I covered that on my third slide, I think. It's 1,200,000 sterling after adjusting for inventory.

37:37 And in terms of how we see that for the current year, you know, as I said before, it really depends how fast we ramp up. You know, we are you know, investors are looking to us to ramp up and and and and and grow, etcetera, etcetera. You know, if if we do ramp up, then that'll start to tick up. But, you know, we're in a good place with our inventory. And the second half of this year, purely on our closed business, you know, we should we should be looking to be cash neutral, possibly cash positive. As I say, the Australian contract, you know, we've got a good chunk of of of the cash already up front, but, you know, clearly, there's plenty to come. The Canadian contract, that's been signed more recently. So there's a smaller proportion of that cash received. And they're both good sized contracts.

38:29 We deliver them before the end of the year. The cash follows. So I think that's the best way to think of cash. 1,200,000 unless there's a good reason to to to to grow. And then operationally, you know, expecting some big receipts during the second half of the year. Next question. Paul's asking, how can the board expect any more equity funding given the continued destruction in shareholder value? And as I said, we are far from happy about where the the stock price is. We're understanding that some of that is from larger issues that are have to do with the environment and have nothing to do with us. And we also understand a larger amount of it has to do with the fact that we have been unable to tell you about some of the progress that we, in reality, are making.

39:20 So, we need to demonstrate that progress. We have the money that will allow us to progress long enough to demonstrate that progress, and the shares will reflect that. And then the the shareholder value will be back, and that is our determination. And we're spending every working minute of every day on that very on that very thing. And then if we can get to where the short term warrants are in the money, that's terrific. And and that's our plan. But if we can't, we have other plans as well. So there's a lot of opportunity in front of us because we are the leader, literally the leader in nonlithium energy storage.

40:10 There's no other company that is as far along as we are at this point. Our our our shareholder value doesn't reflect that. There are companies, especially on The US markets, that are far behind where we are with far greater market caps. And, you know, it when you look at companies that have twice our revenue in 2021, like ITM and and and with much greater market caps than we have. Do we think that's right? No. Will we have to do a lot of work and demonstrate a lot to get where we need to go? Yes. Are we in a position to do that? The company has never been in better shape than it is right now, not in terms of prospects, products, in terms of commercial engagement, in terms of resources, and finally, and most importantly, in terms of the commitment and capability of the people in this company.

41:10 So we need to demonstrate it. I'm not saying that anybody should think differently about us until we prove it, but we will prove it. Please comment on the discrepancy between your optimism as expressed in as as I just evidenced, because I'm now reading this as evidence in this webinar, and the market view of the company value. Well, I think I pretty much covered that. Look. It's I covered it. It it what what can I say? The the it takes time to do things. It's already was taking time whether there was COVID and delays and everything else or not. Those pushed it to the point where greater delays created greater problems and prevented us from talking about things that are were in progress on and I'd like to have been able to talk about by now as it will get there.

42:03 Have you seen any meaningful changes in your share register in the last six months? I would I would say no. No. Certainly not at the top of the register anyway. We we really have had a great deal of support from our major, you know, benchmark shareholders. They've they've been terrific. They understand that the time frame on which we need to deliver and can deliver is longer than some people's and some of our shareholders' time frames are are comfortable with. We understand that. Theirs is is you know, they're taking a a broader view because they see, like we do, this incredible potential for the company and the market. When I put in when we put in that slide with the arrows, some of them pointing up and and many of us even now and then in the near term, many more, that that is reality. That is the reality that we need to take advantage of. It's not automatic. It's not it's not gonna just happen. We have to push very hard to make that happen, and we will.

43:08 How does the v s three product directly compare to the equivalent VRFB? We just say VFB. We don't need the redox in there, the vanadium flow battery products of other competitors in terms of both performance and cost. Another good question. Matt, you've been around the industry forever. I'll let you I'll let you address that even though it's fun for me too as well. Sure. They're broadly equivalent in terms of performance and cost. But performance and cost mean nothing if you don't have a product that makes customers money. And I think what the major differentiator that we have in the marketplace that is being proven as we deliver these product these projects is that because of the approach we've taken with that technology in terms of standardization, in terms of modularization, in terms of mass production and manufacturing, you know, mean that our products are the ones that even if they have similar characteristics in terms of the performance they deliver, they are what they are ones that we can actually get in our customer hands within a reasonable period of time and have them that use the revenues that come from those factories be an impetus to future sales?

44:32 You know, the company that's actually delivering real projects other than us right now is Sumitomo of Japan. They are real projects. They do it. They build them. They put them in. They're incredibly expensive because they build these custom factories to store energy in effect and using similar technology to ours. But who else has the ability to take and deliver on-site a fully operational batter flow battery? We're not seeing it yet. We're not seeing it. It's easy to make a flow battery. It's hard to make a good one. And v s three is a good flow battery. It's it it we're cost reducing it through Mistral, through the next generation product, but but it's still a good product, and we'll be selling that product and delivering that product all the way through next year, which goes to the next question. How confident let's see.

45:31 I thought I saw one. I missed I guess I missed the question. Oh, okay. Yeah. Assuming all goes well with Siemens Gamesa with the development project, how long the first commercial sales after development complete? Well, the first commercial sales after the development complete, the first commercial sales will be before development is complete. But the real milestone that we're very focused on is is called the commercial release date. This is actually occurs before the development is fully complete, but it comes at the point when we and Siemens Gamesa believe that the product is ready to be disclosed to the world. And this isn't just INVINITY coming out, little INVINITY saying, hey. We've got this new great flow battery. This is us jointly saying we have codeveloped and will make available at this price with this specification on this schedule, this next generation flow battery.

46:26 That's not gonna happen this year. It will happen next year. Or my stake in the ground is happening in the first half of next year that we'll have that commercial release. The product won't be shipping. It won't be shipping. It will be announced, and we'll be selling it. We will have actually already as in reality, we already have. We will already be discussing commercial opportunities for that project. If we do it now, we do it under nondisclosure. And none of the numbers that Matt showed you in the pipeline have any of the next generation product in them. They're entirely the v s three product, the current product. All of that pipeline is v s three. So when we talk about the next generation one, we're only talking about the concept at this point, but in the future reality.

47:19 So when will we ship it is the logical question. And and stake in the ground, end of next year. But that's a stake in the ground. Do do do hear that. Alright. You referred to IESTEMS. They and SYSTEMS both have his large shareholder partner have large shareholder partner come what comments do you have? How to make the feasibility of a large partner company being a major shareholder in the next nine to twelve months? You know, I did talk about new relationships and enhancing existing relationships. I think any company that we work closely with, if we do a good job and meet their expectations, they start looking at how wanting to have a closer and and an equity relationship. But, listen, I think that's an important thing. We certainly are focused on having a good relationship, and then we'll follow through on that. And we're not just open to that. We're we're we're looking forward to that happening.

48:15 So there's nothing to announce, of course. We're not telling you that that will happen. What we are telling you is that it makes sense, and it's a good question. How confident are you that your IPR? Property. Yeah. IP. I see the IPR. I'm sorry. It's US thing. It's IP, and I thought there's an there's an initialism. I'm not familiar. The IPR will hold up if the market development continues to be slow and competitors get more time to catch up. That's making some assumptions that I don't fully accept. You know, there's the classic concept. Don't accept the premise of the question if you don't believe it's true.

49:01 Our market development isn't where the IPR is. The market development is the market development, and we're we are far in advance. We're working on commercial level projects at a point when everybody else is working on trying to get their pilot level projects. I was meeting with the CEO of a company that has flow bills sells flow batteries. And they really have one current project going in, and that one current project is it turns out is actually one of their older ones being put in place, you know, after a little bit of remodeling and reconditioning, they admitted.

49:48 We're we're way far ahead, and I'm not worried about it. So they're not gonna get more time to catch up because we're gonna stay ahead. Alright. Were awarded significant projects from Eskom in South Africa recently. Is this covered under the MOU and other projects that IES could be involved in? They're not projects that we can comment on. I'm sorry. Nothing to say there. Absolutely nothing. Have Siemens Gamesa placed any restrictions on who the next generation battery can be sold to? That's a very good question. EG, can it be sold to their competitors such as Vestas and Erstek? Matt, do you wanna address that one since I've been talking a lot? Absolutely.

50:35 Look. The answer is no. There's there's there's there's no restriction on who we consult to. You know, this this is very this relationship is very much around building volume within the the the joint product. Right? We wanna be able to get as many of these products into the market as possible because both Siemens Gamesa and we recognize that the number one way beyond the refreshed product design to get the, you know, the cost of reliability of these things to where they need to be is to sell a whole lot more of them. So, you know, if there is an opportunity where one of their competitors were developing a project, you know, they would be they would be quite happy for for us to deploy this product into into that project. We may not keep our pencils quite as sharp as we would, you know, in in in selling to, you know, a competitive entity. And, there are natural efficiencies in doing something in doing business with, you know, someone who's a direct partners compared to someone who may be competitive with one of those partners.

51:38 But, you know, in terms of, you know, overall commercial restrictions, no. There's it there's nothing that there's nothing that paints us into a partner. Larry, Matt, Peter, thank you for that. I think you've actually managed to address all those questions you can from investors. And, of course, the company will review all questions submitted today and will publish those responses on the INVESTMEAT company platform. But just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Larry, could I just ask you for a few closing comments? Certainly. Thank you. INVINITY has never been in a position that is stronger than it is today. We're looking at a market that is highly receptive to alternatives to lithium batteries, but they have not been able to find one yet that makes commercial sense at at the what we call the commercial scale at the tens of megawatt hour scales. And that's what we're focused on right now with our current product currently shipping, working, delivered in customers' hands. And we're also working on the next generation product, one that is in the hundreds of megawatt hours scale and size, grid scale and utility scale, something that will help meet the energy requirements of the future.

52:52 So we're very confident in our future. We have overcome many impediments to get to this place where we are, but we have the resources and the drive, the products, the environment to succeed in the future. So we're we're very grateful for your listening to us today, for asking good questions, and thank you for your attention. Larry, Matt, Peter, thanks once again for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of INVINITY ENERGY SYSTEMS PLC, I'd like to thank you for attending today's presentation, and good afternoon to you all.

53:43 Thank you.