All right, everyone, I think we're going to get started here with our third, I would say, drone defense tech fireside chatter this morning, and we're lucky enough to have here Ricardo Rodriguez, the CFO of Amprius. Amprius, I believe, has the holy grail in battery technology for the drone space. If you ask drone companies, the OEMs building them what they want their drone to do, they're probably going to tell you, fly farther and carry heavier stuff. I would say Ampryous battery solutions allows that better than anyone and so I think just kind of to kick off the conversation Could you provide an overview of Ampryous the battery technology business model and maybe kind of what differentiates you guys?

Absolutely, and thanks for having us again Maybe I think we had some slides that would be helpful to use as backdrop. Oh fast-forward yeah so Tom is pretty good at delivering this analogy but in essence think of it this way we try to deliver you you know double the jolt or the energy and power with the same package or or you know or you require half the weight or half the space to deliver the same amount of power and energy and so So espresso works just like I mentioned, right, compared to a cup of drip coffee. And so we've used this analogy to relate to folks. I'm a little bit more technical. And so I use a chart like this one. And I generally have to remind people that a battery is not just an energy storage device, but also a pump. So folks expect us not just to deliver double the energy DENSITY, BUT ALSO TO GIVE THEM A FLEXIBLE PLATFORM THAT ALLOWS THEM TO SWAP THAT EXTRA ENERGY DENSITY FOR POWER, RIGHT? SO YOU ACTUALLY NEED TO DEPEND ON HOW MUCH POWER IS COMING OUT OF THE CELL AS YOU MOVE A ROBOT, FLY A DRONE, POWER A LIGHT EV, WHATEVER THE APPLICATION ENDS UP BEING. But going back to my previous slide, all else being equal, we try to give you, you know, double the energy density and, you know, proportionally a pretty high level of power more consistently over the same unit of space and weight, right? You know, given this, we're chasing some pretty diverse and fast growing end markets. If we were starting a battery company today, we would probably see a chart from a consultant that says that 70% of the market is EVs, another 15%, 20% of the market is stationary storage. We're focused on the tip of the spear where this additional high energy density that we bring and additional power truly makes a difference and truly enables a duty cycle and a use case that otherwise wouldn't be there. So the first customers who came calling on the company were the UAV suppliers, followed by the light EV customers. We're currently quoting quite a few satellite and space applications. And they were in the very early innings of robotics and have been involved with the EVTOL guys for about a year and a half, developing some custom cells for them. If you look at the lithium-ion side of the market for UAVs, we estimate that this is about a $2 billion market today, going to $3 billion by 2030. And that doesn't factor in a lot of upside that we're seeing today from the likes of the new budget requests from the U.S. and all the spending that they're going to have on drones within that. We like to say that we're fabless but not processless. So, you know, our team in Fremont basically puts together and tests a range of materials to put together the optimum battery for the right application in the right size, kind of coming from the right place in the right time. And that requires quite a bit of coordination, right? So we use a network of contract manufacturers to produce the batteries for us. We do all of our process development and validation in Fremont. One of the things that enables us to move fast and to scale quickly is that we can use standard lithium-ion cell production equipment. So that enables us to have a new SKU on the shelf ready to go within a quarter and to have it in full production coming out of our network of contract manufacturers for customers within a quarter and a half. And, you know, we recently in Q1, we managed $28.5 million of revenue through 25 SKUs. And that, I think, is a sign of just how flexible and how nimble we are. We also, besides this moat that we created by developing SciCore, which is a silicon oxide battery, we are not stopping, right? We're continuing every six months throughout this year and next year to move our cluster of SKUs up in the energy density scale. So we believe that we'll get to 600 watt hours per kilogram by the second half of 2027. And our 450 plus watt hours per kilogram of energy density right now is best in class. A standard lithium-ion cell gives you roughly 270 watt-hours per kilogram, and a silicon-doped cell gives you about 310 or 320 watt-hours per kilogram. So for those folks who really need to enable a duty cycle that otherwise wouldn't be there, thanks to being able to carry higher energy or deliver power more consistently, we're there already with our portfolio of products. I mentioned contract manufacturing. Center of Excellence for a lot of this stuff has been in China recently. That's where we have several of our contract manufacturing partners. We started producing cells in South Korea during the summer of last year. We're ramping that up this year as customers push to be NDAA compliant in advance of, you know, where full NDAA kicks in in 2028, and you need to be producing these cells in the U.S. starting in 2028. We actually won a bake-off last summer that the Defense Innovation Unit of the U.S. put together to develop an American-made high-energy density battery. We've gotten over $18 million from the DIU. They're funding the bulk of our CapEx this year. And we also announced a contract manufacturing partner to produce at least a million cylindrical cells a month starting at the end of the summer of this year here in the U.S. It's no secret that we're out there working right now to find pouch cell capacity in the U.S. And so we will be fully NDA compliant, not just now, but in 2027 and 2028. And this is important to note because a lot of folks are out there right now saying that they're NDA compliant, but in my view, they should put an asterisk to the sign that says NDA compliant for now because the NDA compliant requirements do evolve and as I said by 2028 you need to be producing cells in the U.S. and this is all supplemental right so we're not moving out of China there are plenty of customers within China our business within China is growing our customers in Europe take revenue take product from China and so this is all expansion this is not replacing any of our value chain that we have today you know 2026 we told the street that we'll do at least 130 million dollars of revenues that's up from at least 125 million dollars which is what we told folks when we closed Q4 and reported Q4 of last year and then longer term we want to keep going right We do see paths from our existing relationships to be able to deliver at least $600 million of revenue. If you look at what we do for customers, we believe that we can earn a higher than 30% gross margin. And then that, if we keep the OPEX lien, will translate into at least 20% adjusted EBITDA margins. And so, you know, for us, the path is pretty clear, right? we we've got to keep winning commercially we've been demonstrating early innings of execution ramping up our network of contract manufacturers we continue to increase our supply position particularly in the US as we rush the BNDA compliant and we're pretty committed to this capital efficient model right you know I think most investors want to know what the share count is going to be for a long time so we've shut down our ATM we've walked away and addressed our liability with a facility in Colorado that we had previously signed the lease to back in 2023, so we don't have that drag on our balance sheet anymore, and then last week you saw us announce plans to proactively address some of the warrant overhang that we had related to the public warrants that we had sitting out there that were well the money thanks to how the stock is traded and what the team has enabled us to kind of get to.

Well, and Ricardo, on that, I think it'd be helpful because maybe kind of like walk through kind of high level the mechanics of the of the Warren exchange and kind of like how much that actually kind of saved the company with related to dilution.

Totally. So, I mean, I think our math is now even higher than the 70 million that we thought we were going to save investors and save dilution by engaging into this warrant exchange. But in essence, the company had 16 and a half million public warrants that expired in September of next year with a strike price of $11.50. When we started trading significantly above $11.50, they were all well in the money. And we have the right to force to redeem these cash or cashless when we trade above $18 a share for 20 out 30 trading days you know if you look in Bloomberg roughly 10 11 top institutional holders held roughly 7.1 million of these warrants and they run a Delta hedge on these warrants which means that if we're trading below $18 a share they're probably 70% short for every warrant that they hold if we're you know racking up days trading above $18 a share, they increased that short to 100% of their warrant coverage. And we just thought that since we don't need the proceeds and we believe in, if we ever needed to place stock, we believe in better placing it in good hands with long-only folks, we actually reached out to the top warrant holders and struck a deal to pay them 35 cents a warrant in order to agree to an exchange ratio that would be determined by a four-day VWAP of our stock price. And so that's being determined this week. I think it'll, instead of automatically issuing 7.1 million shares, if we call these warrants or if these institutional holders exercise them, we believe that we'll be able to give out less than 3.1 million shares so you know we basically cut the dilution in more than half well um thank you for the overview absolutely i i i think now um would just love to dive in to kind of the core markets you're serving today the uas drone business is a big driver i estimate 70 80 percent of sales are probably derived from that um could

you just kind of walk through where you're seeing the strongest demand today, maybe from a geographic perspective as well as an application perspective? Because I think in the headlines, a lot of people see like these small FPV drones. That's not necessarily the market you are focused on.

I think we can cover that market pretty well through the pack houses. So you probably saw the upgrade energy announcement of them being acquired by UMAC here on Monday. We work with Titan, you know, rebuild, a really interesting group of folks are getting into the pack business as well. And so, you know, we could take care of all those drone dominance and smaller drones through the pack houses and not spend many of our precious sales and technical resources, right? They basically purchase sales from us in bulk, integrate them into relatively simple packs and resell them to the drone dominance and the small guys. To answer your question, where we are seeing the bulk of the pool for customized sales, for really that nth degree optimized solution, is on drones that fly above 20,000 feet for surveillance and counterattack. And out of necessity, this started in Ukraine.

I truly do think that even today, Ukraine and some of the more advanced names are the ones leading this field and so those are who our main customers have been historically they're also the ones getting the bulk of the larger awards and they're the ones that are driving our demand right and it's fair to assume from like a geographic perspective i think you guys published this like as of 2025 like 75 of revenues is international probably in that europe region us 25 but i think in this last earnings call like a reason for the uptick of guidance was like i think the momentum that we're seeing in the u.s so maybe could you talk about what's

kind of implied in in the new updated guidance from like a demand driver perspective totally so i mean obviously the the beat uh was reflected in the updated baseline but uh when we look at the rest of the year we do see demand in the U.S. taking drone dominance and the upside from that aside. We do see demand in the U.S. being driven in the second half by sales to some of our main customers like Air of Arm and Krauss-Amdani, Teledyne and others. We'll see how much of it still fits within 2026 and I think we were fairly conservative in what portion of it falls within in 2026 itself, because we still don't know exactly when, whether that'll land, or whether all of it will land in 2026 versus a portion in 2027. And so that's obviously a positive sign. I mean, even in Q1, our sales in the US tripled, our sales in China also grew, and we truly do believe that the Nordics, Ukraine, Germany, and the rest of Europe are going to ratchet up their spending as well. So that has the potential of driving further upside for us in 2026, but definitely in 2027.

Well, I think a unique dynamic with Amprius, and you have the number there, so I don't have to ask you, 600 customers you're working with. But what I think is unique is, could you talk about where your customers are in the adoption cycle? How I've understand it is they value your solution, but it's really only been in maybe one variant or a couple variants. And now what you're seeing is customers adopting yourselves across the whole portfolio. So could you maybe kind of talk about that dynamic?

Yeah, so adoption happens usually within a quarter, a quarter and a half, right? And, you know, my background's in the automotive industry where there's a very clear line between development, prototyping, and when you actually go into production, right? In the UAV space, I'm having to learn that there's more of a gray line, and half of the stuff that's flying out there could be considered a prototype, right? Which means that the validation hurdles are not that high. You can get swapped in, especially for the less expensive drones where we go in through a pack made by somebody else versus it being integrated by the OEM, the swap can happen in a week, within a week, right? And so for us, it's just a matter of getting out there, getting in front of these customers and these customers having the appetite to replace standard sales with us, right? And a lot of this depends on the duty cycle and their willingness to pay, frankly, right? And if you don't need the UAV to go that far, you may just use standard lithium-ion cells, and that's okay. But where we do play a very unique role is on UAVs that carry a lot of devices, right? So if you're having to power multiple cameras, a gimbal, a bunch of communications equipment, you wonder where is their power left to make the thing fly.

And that's where I think we play a critical role. okay okay and i think too when it comes to uh your customers where like and going to that point just kind of like to double down because i think just kind of want to make sure like our investors understand like group two and group three like the long-range precision strike um loitering munitions um you might not be seeing this yet but what's the possibility of like a replenishment cycle because batteries aren't going to last forever if these things are out. Still early, like you said, they're just starting really kind of to scale this up. But has the company given any thought on what that may look like as almost like a recurring revenue stream longer term?

Yeah, there's definitely a bit of a razor blade model to this, especially on the drones that are kept within the fleet and that are upkept and they go out and complete a mission and come back. We do estimate roughly a purchase of two to three packs per year in our market sizing, right? It's still very early innings, right? We've been in these for a year, year and a half at most. And we are starting to see these come back. But at the same time, I would point you to our slide where we had the tech roadmap, right? We're also not standing still. so some of these guys say okay I'm gonna buy as few batteries as possible for the initial installation knowing that you are gonna get better over time right and so our head of sales actually talks about this frequently we don't just sell a cell right now to get installed we actually sell a roadmap and it's a roadmap on where we're gonna be technology and energy density and power wise and also where we're going to be making the stuff okay okay well and I think kind of a key question here because um you guys were very smart if I think going after this market early I think

there was speculation or there was speculation on if this cycle was actually real and I think that's actually now they've proven you've proven the doubters wrong um which probably has now attracted more people going after this market um from a battery perspective um could you talk just about kind of like the competitive landscape today how that's maybe changed over the last six months but like what you think can allow you guys to maintain this moat that you've already built absolutely so i mean frankly the market came to us right we have only been doing outbound outreach since tom joined the company in may of last year almost exactly a year ago right and so this mart

This is a market that first came to us with Symax. Airbus came to us for the Alto quasi-satellite drones. And then that brought in AVAV, who was also an investor in the company before we went public. And then the outbound outreach really started just a year ago, right? Right. We do see a lot of battery companies out there with trying to repurpose capacity that was originally intended for EVs or for stationary storage into these markets. Right. But, you know, the point that our CTO always makes and we make internally is like you can't go after this market if you don't understand the duty cycle and detail. And by that, I mean, you know, in this spider chart that I showed on the right side, where exactly does the customer want to be for the application that they're building? And we see a lot of EV type cells get repurposed. A lot of these are silicon-doped cylindrical cells that, you know, may be good enough for some duty cycles. but for those customers that are at the tip of the spear leading in terms of energy density performance durability power output etc that's where we are and and doing this quickly and you know with flexibility and with speed we think is what's going to extend our lead even further right the other bit that helps us is that we've consistently been delivering a little bit more than what we promised the folks you can go ask the DIU I think some of our investors have gone and asked our customers hey what are those Amprios guys delivering to you and it's usually a little bit more than what they showed up here and promised and we've seen a lot of battery companies either because they jumped headfirst to build a capacity make a bunch of promises that they then can't sustain in the field and so we believe that as long as we can continue sort of under promising and over delivering both in our products and in the performance of the company we'll be fine and we'll be ahead of the competition but it all starts with really just understanding what exactly is the customer trying to get the thing to do right well i think an important part too like as demand continues to ramp and i think we're in the very early stages we still got this massive 55 billion in dog funding that i think amprius is very well exposed to what um can you walk us through your current manufacturing capacity and your ability to scale production to meet this elevated level of demand yeah so uh you know what happens at the company at any given point of time is we look at what flavor the demand comes in and then we play this game of tetris to fulfill it right across 25 different SKUs and from all of our contract manufacturing partners and it is a pretty dynamic process right because we're trying to not leave any revenue on the table but yet at the same time have enough foresight to understand what flavor the demand is going to come in it and the question on capacity is a pretty theoretical one but if all of our customers were to pick our top four flavors we would have at least 600 million dollars of capacity the reality is that it doesn't work that way right and we are working to drive some convergence for example with DIU we're looking at you know only a couple of standard pouch cell pack sizes that will be made in the US to try to not

proliferate too much beyond 25 SKUs but it's kind of easier said than done right if you want to optimize things you may need a you know a custom sell and we're totally fine as long as we get paid for all the work that goes into it well and I think one kind of important question is like especially like with this drone is like obviously the stocks perform very very well but like I feel like we're still very early kind of in this growth cycle so like maybe walk through kind of like how you guys see this you're guiding to very strong growth north of 80 percent plus but how should we think about this growth cycle over the next two to three years yeah so we see a multi-legged story playing

itself out here right because just when you think uh that UAVs may slow down or that their growth RATE MAY SLOW DOWN, THERE ARE A BUNCH OF OTHER MARKETS OUT THERE THAT HAVE VERY SIMILAR REQUIREMENTS, RIGHT? ROBOTICS, YOU KNOW, WE SEE IT IN LIGHT EVS, ALTHOUGH WE HAVE TO MANAGE THE MIX OF LIGHT EVS PRETTY CAREFULLY. I THINK EV TOLLS, YOU KNOW, ONCE THEY GET THROUGH THEIR FAA CERTIFICATION, THEY'RE GOING TO START PULLING HARD IN THAT 2028 TIME FRAME, WE BELIEVE. FOR SATELLITES IN SPACE, I MEAN, THE EXPERTS HAVE TOTALLY MISSED the potential opportunity that there is there to move from, you know, more exotic chemistries over to lithium ion if you're sending stuff up there faster and more frequently. And so, but at the same time, I do think that for the next give or take two years, it's all going to be about the UAV growth, right? Given what's going on in the world, given increased NATO spend, increased military spend, even in China, in the U.S., etc., it's just a more efficient way to go out on the field. It's this whole notion of bots before boots, and we believe that that's got multiple legs. You know, the drone manufacturers are also just finding out their own reason for being, right? Which is why we can't discriminate on who we sell sales into. And we've got our pack partners sort of leading the front on one end with the, because this is kind of a cottage industry. and then we've got our specialized sales team dealing with the customers that are a little bit more advanced in framing out their requirements.

Well, and kind of to piggyback off the slide here, robotics seems like one of the biggest type of maybe longer term growth markets, but it's such a big category. So could you maybe kind of focus, like where do you feel like your sales are most applicable to? You got industrial robotics, humanoid robotics, consumer robotics, any specific areas you guys will be targeting there?

Yeah, I think this is one that is obviously for untethered robotics, right? It's starting with industrial first. We do see Asia already having a meaningful fleet of humanoids. And so we are trying to understand those requirements earlier because those requirements will be the same requirements that the companies here in the U.S. will have. And so we're starting to see the need for, you know, even though they're all mostly using centralized battery packs today used to get the things to work we're starting to see that get split up and go towards different parts of the robot itself to balance weight to have power closer to where it's needed and you know some of our power cells are perfect candidates for some of those applications and then centrally you can use our you know high energy density cells to you know power the thing for longer same in the same

way as we do with the UAVs good CFO question here capital allocation strategy you talked about kind of cleaning up the balance sheet now you basically kind of like operate like break-even on the net income side or you guys just now are adjusted even profitable still we were investing internally into expanding that capex but like how should we think about the capital allocation strategy kind of over the next 18 months yeah so I mean the the bulk use of our cash from the balance sheet which you know we think is adequate relative to the opportunity at around 72 million dollars as of the end of April is going towards funding the working capital needs to fuel this

growth right we are not using cash to the fund growth more negative gross margins and we're also not using cash to fund OPEX so that puts us in a pretty good spot we're also going to work to set up a debt facility that you know can flex up and down as as we more efficiently work to fund this the bulk of our capex is being funded by the defense innovation unit in combination with our contract manufacturing partners and so our strategy would need to change pretty dramatically in order for us to need additional capital and and that's kind of where we sit and you know five six months ago we developed our little punch list of six or seven things that we thought we would need to do to the company in order to get the stock to work of course assuming that we continue executing this ramp profitably and we keep working our way at doing them and so I think it's it's only a matter of time before we continue progressing as we execute we got about a few minutes left or any questions in the crowd mm-hmm so Scylla Nano and Group 14 are silicon carbon company so even though it's a clearly a battery technology I consider them more material companies very similar to you know Brazilians which is a company that we it's a former subsidiary that we buy the silicon oxide from and we don't discriminate I mean we've tested see less carbon product we've tested group 14 products as well. We think that there's a potential use case for that kind of stuff. We also test other materials from Japan, from South Korea. But our product is the cells, right, not the powder. And this is actually a pretty interesting point because, you know, when we look at M&A or when we look at other opportunities out there, there were plenty of companies that raised a lot of capital in 2021 to develop battery process technologies, materials, and other things that could advance batteries. Now it's time to come back out to the capital markets to raise funds, and we're seeing that unless you have a cell, it's pretty hard to have revenues, or you're selling ounces of this stuff to try to work your way into a battery, right? And so, you know, we will test all of these materials. In fact, that's one of the metrics that our CTO uses in his funnel. Basically, per unit of time, how many materials have I tested and validated and put on the shelf? And then on the M&A side, it informs a lot of what we engage with and what we don't. So, yeah. Questions?

Well, Ricardo, with the last few minutes you have here, I just wanted to pass it back to you. Any kind of last-minute kind of key takeaways you just hope the audience takes home with them?

Yeah, I mean, I think you hit the nail on the head throughout the conversation talking about how this is still very early innings. You know, we did $73 million of revenue last year. I joke with our team, you know, average new car dealership in the U.S. does about $85 million, so we've got ways to go. And so, yeah, stay tuned.

All righty, well, thank you guys for tuning in. that will end the webcast.