Morning, and welcome to JP Morgan's Industrial Conference. My name is Bill Peterson. I cover CleanTech stocks here at the firm. Really pleased to have Enovix here. Raj Talluri, the new CEO, will walk us through a presentation, then we'll move to Q&A. Raj, thanks for coming. We have in the audience, we have Charlie and Ralph from the team as well. Thanks for supporting our conference. Raj, over to you to present the company. Absolutely. Thank you very much, Bill. Thank you all for joining this presentation, and thank you all for the people on the webcast. It's my great honor and great pleasure to give you guys an overview of this amazing company called Enovix, which I've been the CEO now for about close to two months. You know, before I delve into it, do want to, you know, draw your attention to the disclaimers and safe harbor statement. You know, we will be making some forward-looking statements here based on, you know, what we know here. Please look at our website and all the disclaimers there for any information that I'm gonna present here. Okay. Getting onto the company itself, what is Enovix? Enovix is a company that makes batteries. It makes lithium-ion batteries. It's a truly differentiated technology in lithium-ion batteries. It's differentiated in a few different ways. If you think of lithium-ion batteries, you know, you have them in your laptops, in your smartphones, in your wearable devices, IoT devices, automobiles, computers, you know, everywhere. Any portable electronics device, the EV, electric vehicles have lithium-ion batteries. It's a technology that since it was invented in the 1990s from Sony, hasn't really made a lot of progress in terms of energy density. I mean, it's typically grown 4%-5% a year. Compare that with, I don't know, the speed of your processor in your mobile phone or, how fast, you know, all the consumer electronics devices around you change or the memories change. It's been very, very anemic in growth. That has kind of caused a lot of problem. Or at least it has not allowed all these devices to really fully recognize their potential. You know, I'll give you a simple example. A lot of you wear smartwatches, you know, that kind of do a lot of interesting things for you, and then they talk about the fact that you can measure your sleep and so on. The problem is you got to charge them in the night. It's kind of hard to measure your sleep when you're charging them in the night. There is a, there is a, you know, big secret of these many consumer electronic devices that you buy, that you're not getting the full benefit of what they're supposed to give you for what you already paid for because the battery. That's the problem that Enovix started attacking to solve. The company has been there for 16 years, and here's what they did is to invent basically a silicon anode. Batteries have an anode and a cathode and electrolyte in the middle. And they're actually very simple devices. When you charge, you know, the lithium actually accumulates on one side, and when you discharge, it moves to the other side. The amount of lithium that you can put on the anode is, you know, what basically, you know, is proportional to how much charge or how much capacity energy density that battery has. The more lithium you can put in, the higher the energy density. These batteries, lithium-ion batteries, for a long time have been made using graphite anodes. Graphite can only hold so much charge, so much lithium. That's why the advances have been very slow because nobody has been able to replace graphite with any other material that can actually hold a lot more lithium. It's been long known in literature that silicon can hold a lot more lithium than graphite. The problem with silicon is that it will hold more lithium and you get more charge, but it swells up. It swells up almost to the point if you put the, you know, a silicon-based battery inside your smartphone and you charge it'll swell up to the point where it'll pop the back of the battery off. It exerts that much force. That is a problem that hasn't been solved for a long time. Enovix has a very unique way of solving that problem, which I'm going to talk to you about here. That gives you a step change increase in battery capacity. The other thing you gotta remember is that as you put more energy density in these batteries, there is a problem with safety because if you poke the battery with a nail or some sharp object, you'll short the electrodes. When you short them, the current just goes through it fast. The more charge you have, you know, the hotter these things get to almost to the point where it gets to thermal runaway and it just bursts into flames. There's a real safety hazard of putting more and more charge into these batteries. You know, Enovix also has a very, because of the architecture, a fundamental technology called BrakeFlow, which I'll explain in a minute and show you some videos, that actually stops this from happening or at least mitigates the risk very significantly. That's another great advantage we have. As we, let me click back on this. As we've been on this journey, you know, we've now started sampling these batteries and we've given some of these batteries to our customers. As we started producing more and more batteries, started giving it to our customers, the, you know, kind of the reception from the customers has been fantastic. I mean, like, even yesterday I was up in New York. I visited a, you know, company that was using our batteries, and asked them how, you know, as a new CEO I asked them, "Hey, how is our product? How does this product compare to the products you have in your current products?" The comment I got was, it is 50% higher energy density than what they have with the traditional batteries. I mean, it's pretty impressive and they can't wait for us to produce it in high volume, because it's not that easy to make these complex batteries in high volume. I'll talk a little bit about the challenges and how we are working on overcoming them. Because of that, we were able to give these batteries to our customers. Here I show you the customer momentum. In Q4 of 2021, we had 43 customers that were kind of, taking our batteries and qualifying them and giving us feedback on how they work. In Q4 2022, you know, that went up to like 78 customers that we have. Steady progress from there. I'll talk about what that amounts to in terms of potential revenue. If we actually look at these customers, what products they make and the, you know, price of the battery that we get for it, for each of those batteries, and you multiply it by the number of potential units that they could use it in, in Q4, we had over, you know, close to $670 million of revenue in active design wins. Which, you know, will be realized in, in out years, like 2025, 2026. The funnel starts with them taking our batteries and qualifying them. Really exciting technology that's real and we are sampling to customers now. You know, it's taken a long time, you know, taken almost 16 years to get to this stage, and I'm fortunate to, you know, get the job to actually take it to scale. You know, taking to scale, you know, and launching in high volume needs a lot of different kinds of skill sets. You know, my background is actually all in semiconductors. You know, I've been in semis for 30 years. Most recently, I was the Senior Vice President at Micron. We were shipping DRAMs and NANDs into mobile phones. It was a $7 billion P&L in 2022 that I was running. Maybe 20%-25% of the company, $2 billion operating profit. Before that, I was at Micron. I was at Qualcomm for 10 years, running their Snapdragon processor, which many of you have Android phones, will know it's there. I spent 16 years before that at TI, also in semiconductors. I'm very familiar with taking products to high volume production in these kind of markets. Here you see, we have two factories. We have a factory which is our Gen1 design factory, which is in Fremont, and we are now in the middle of building the second factory in Malaysia. We have announced that, where we will build the scale. Our factory in Gen1 is actually a very small factory. It, more of a proof of concept, I would say, as it turned out to be, although it had higher aspirations to be much bigger. It produces about 100 units per hour. Our Gen2 design will produce 1,350 units per hour. Really scaling fast, you know, over 10x here. We've gotten people from Micron, from Qualcomm, and people on our board from Tesla and Cypress and people from AMD. A lot of people very experienced in ramping high volume production are now on the team. A super exciting time for the company. I want to talk a little bit about the market opportunity. The market opportunity is actually tremendous for this technology. I like to maybe broadly classify the market into three segments, or three to four segments. One segment of the market is what I broadly call the Internet of Things, and this is a division I used to run at Qualcomm for about three years. It's a market where there are a lot of different products. You know, wearables, you know, from wearables to, you know, all the things you use at your home. It could be smart speakers. You know, it could be portable speakers, could be headsets, you know, things like that. Could be medical devices like glucose monitoring devices. Could be industrial IoT, which are devices like, you know, UPS. You know, you come to your house, deliver a package, and you sign on that thing. That's actually an industrial IoT device. You know, there's so many products like that. If you just, you know, maybe after this talk, you'll start noticing all the products that use lithium-ion batteries that are just around you or even just in your daily life. That's an $8 billion TAM in 2026 for batteries. What we find is that our battery has anywhere between 25%-120% capacity advantage based on the size of the battery and the product it is. Like I mentioned, the customer we visited yesterday, you know, was able to realize a 50% benefit in energy density. If you look at mobile, that's a huge TAM. You know, actually $11 billion TAM in 2026. You know, between 1,200 million-1,300 million smartphones sold in the world. Every one of them has a lithium-ion battery. There we get anywhere between 32%-100% capacity advantage based on what is the previous generation graphite battery they're using. So really differentiated product there. The third one is computing devices. You know, like the laptops I see all of you using here. That's a $4 billion TAM and 26%-43% capacity advantage because those take more of these batteries from us that go into cell phone, but you know, bigger form factor or multiple ones stacked next to each other. The market opportunity is huge, and we are just getting started. Now, the other big market opportunity is EV. EVs, as you know, are a huge market opportunity for many, many people. You know, we all know about by 2030 how many electric cars will be there, and they only keep getting more and more because, you know, places like California have already said cars that come out after 2030 have to be electric and so on. Our battery has huge advantage in EV, the advantage it has is, because of the architecture, which I'll describe in a minute, it actually has a 10x improvement in internal temperature gradient. One of the big problems in EV is the battery actually gets very hot when you charge it. Our battery actually ability that it doesn't get that hot, and also it charges much faster. You know, 80% charge in 5.2 minutes, we've demonstrated that. Much higher number of cycles, retaining the capacity. The cycles basically is how many times you charge and discharge a battery. Here we are saying you can charge up to 1,500 times and it still retains 88% of the capacity. We also have, you know, a calendar life that's much higher, almost 10 years based on high temp testing. It's a really differentiated battery. We are now working with the people in the industry, in the automobile companies to actually focus on taking our battery and getting it into their cars and figuring out, you know, how to get it to production, either licensing or manufacturing and so on. This is a huge market. This is a $523 billion EV market TAM. You can see it's a huge market opportunity for these batteries. It'll take a little longer to get into cars, but we will be launching in IoT and smartphones and computers first and then into cars. This slide, it just shows you visually, where we are, how we are doing, you know, combining two things I mentioned, which is our customer traction and then combining that with the TAM. You can see if you take the $23 billion mobile computing TAM, we are engaged now in $754 million of it. If you look at our active designs and an active design means the customer has taken our battery, tested it, they felt it was pretty good, and now they're putting it in a product and then working on, you know, taking it to production. Almost $1.4 billion revenue, that's only 6% of the TAM. Very exciting that there's a lot of market opportunity with even a small TAM that we're addressing right now. What I wanna talk here is about, you know, the question that gets asked, okay, if you can do that, if silicon can store two times, you know, the lithium-ion, you know, lithium, in the silicon anode, how does it compare with competition? There are other companies that actually do talk about making silicon anode batteries. What we've seen, in terms of competition, which again validated by our customers, you know, I asked the customers yesterday, I said, "Hey, you guys seen other silicon batteries that we need to compete with?" It seems like there isn't really anything shipping today at that density. What most of our other competition has done is put a small% of silicon, you know, 3%-7% and then try to get the energy density up. Ours is 100% active silicon content. Our entire anode is 100% active silicon. That gives us a huge advantage in energy density. We're basically replacing the graphite with high-performance silicon. The question now gets asked, how do we do that? What is so special about us that we can replace that? Conventionally, the way the lithium-ion batteries are made is by what is called is a wound lithium-ion coil. Basically, you have a graphite anode and a cathode and a separator between them and an electrolyte in between them, and you just roll the thing like a jelly roll, and that's what it looks like as you see in the picture below. The problem with that is if you just replace the graphite there with silicon, you'll get a roll like that, but the silicon expands, so the roll just pushes out and pushes the back out of anything you constrain it. It's actually pretty amazing. It, the silicon, when it expands, it produces almost 2 tons of PSI pressure per square inch. It's pretty amazing how much, you know, it, you know, pressure it produces. There's just no way to contain the guy. You just can't hold it down. What the team at Enovix has figured out is instead of doing that, why don't we cut, you know, silicon into thin strips and the cathode material also into thin strip and make really small batteries. What you see there, those vertical lines are all each a battery. We stack, you know, hundreds of them like that. What happens is, you put a mechanical constraint, which is like a steel cage around it. Now, what happens is when the silicon expands, it's pushing to the sides of the battery, not the top of the battery. Now here you can see it's pushing to the thinner side. When it pushes the thinner side, suddenly the 2 tons comes down to like, you know, 200, you know, instead of 2 tons 200 pounds. Now we are able to constrain with the mechanical constraint. That is a very innovative patented technology that helps us make these batteries. No one has done this and we are the first ones to do this. We have a lot of patents covering this technology. Now we have moved the complexity of making a battery into a mechanical engineering problem. We have these machines that actually make these batteries, cut the, you know, we cut these anodes and cathodes with the laser and stack them together. I'll show you a couple of videos on how they get made. Now, I wanna talk to you a little bit about this BrakeFlow technology. Here, what you're gonna see on the left side is a conventional, you know, graphite battery. On the right side is our battery. We have this technology because of the way we produce these batteries, we are able to put series resistors in the front of each of these batteries and connect them. What happens is, when a battery gets shorted by poking with a hard, you know, with a nail, or it falls and something rolls over it and whatnot, when the electrodes get shorted, the current limiting resistors we put in series across the electrodes stops the battery from getting too much current in one place and just blowing up. Here you'll actually see what happens if you don't do that. On the left side, you see what is called a nail penetration test. We take a nail and poke it through a graphite battery. On the right side, you'll see us take a nail and poke it through our battery and you see what happens. It's actually pretty scary. That is actually what happens to the conventional graphite batteries if you poke them with a nail. In 0.13 seconds, it goes to 283 degrees Celsius, and then at that point, you know, it just melts ceramic. It's actually really, really dangerous to put that much energy in a battery. On the right side, you can see our stuff doesn't go past 74 because the limiting resistors stop it. This, you know, video is on our website, and you can actually see doing this. That is T.J. Rodgers, by the way, who's the chairman of the company. What is our strategy to scale? Our strategy to scale is to basically, you know, we have a factory in Fremont in 2023, but we're really building our highly automated factory in Southeast Asia, in Malaysia. We're just producing like 180,000 cells today by the end of this year in Fremont and sampling our customers. The high volume will be in Malaysia. The first line we're building will have almost between 9 million-18 million cells, depending on whether we make a small cell or a big cell. We will build more lines, which will be copy exact from the same line that we built. One thing I wanna say is the factories that we build, as we make more advances in energy density by getting different materials, different cathodes, different anodes, the same factory will be able to use that because our factory is makes the batteries using these mechanical constraints that I talked about, and it's kind of agnostic of the material. The better materials we find, we can put them in the same factory. We will get generational increase in energy density and cycles, but the same equipment can be reused. That's actually very advantageous for us. I want to show you know, our Gen1 versus Gen2. Gen1 is slow right now, you know, because it is more prototype, you know, kind of capability. You'll see here our Gen1 doing the stacking, where we cut these little strips of battery material and stack them into this battery, and that's what you see on the left side here. On the right side, you'll see our Gen2 stacking. What you'll see here is the speed of operation of the Gen2. You can see we're stacking now six of them at a time. On the left side, you see the stacking of the Gen1, which it goes click like that, right? You know, we are going from 100 units per hour to 1,350 units per hour. We can just copy these lines and produce in millions. We also used much higher power lasers, so our cut speed is much higher, and we have much higher parallelism and increased automation. Super exciting to see these machines come online. Now, one of the, You know, People ask me many times, you know, "You're, you're a chip guy, and Ajay, my CEO, is a chip guy, and a lot of us are come from semiconductor industry." People ask me, "Hey, you're producing at 100 UPH. Why do you think you can get to 1,300 UPH? How do you think that you can make Gen2 scale that much?" I wanted to put this slide together to show to people that the complexity of producing these batteries is all in the mechanical constraints we create. We got the electrochemistry worked pretty well. I mean, 16 years we've been doing this. We got that part nailed. Now we need to scale in manufacturing. The manufacturing scale, if you look at the tolerances to which these machines have to build these products. On the right side, you see the stacking of what different electrodes and how we package them into a battery. The assembly tolerances are anywhere between 25 micrometers-60 micrometers based on the size of the battery. If you look at the kind of tolerances that we've dealt with in semiconductor industry, they're 1 micrometer-3 micrometers. This is a problem that's been licked long back in semiconductor industry, and we've done this, you know, many, many times. Now our job is to make sure that we use the best-known techniques in semiconductor industry manufacturing to take it to the battery technology. That's what we are doing. These machines that are built in Gen2 are being built by people, you know, who have experience building semiconductor back-end and test. The people who are running the company now actually have a lot of experience in ramping this. We feel pretty good that we can get this to high volume pretty soon. Here shows you a scorecard. Our Fab1, we had a milestone that we were gonna hit in Q4 2022. We made 4,000 batteries, and in Q1, we hit 9,000 batteries, and we're gonna more than double that every quarter. We committed that we'll make 180,000 batteries by end of this year. Our Gen2 line, we got approved from the board to actually make the line on 15th of March was the date, but we actually got it approved by 9th, and we are very confident on the design and ahead of schedule. We mentioned in January that we're gonna get approval for the Southeast Asia location by July. We actually did that ahead of schedule in March. We now have chosen the location, and it's gonna be Malaysia. We'll get a line that can make custom-sized batteries called the Agility Line installed in Fremont end of this year, which is a piece of our manufacturing line that will go into Malaysia, but it'll have the ability to customize the shape of the cell. That's another key important thing in this market is, you know, watches use a different sized cell from phones versus computers and so on. We should be able to customize the size of the cell. The electrochemistry remains the same, just the mechanical constraints for the laser cutting changes. The new machines we're designing actually have the ability, we can program it to make different sized cells. Our line will be able to do that. We'll build a piece of that line in Fremont first, then our main line in Malaysia will start in April next year with that capability. If you look at the team, you know, we have a tremendous set of people that with a lot of experience. Ajay, the CEO, he was, you know, basically this Chief Operating Officer at Lumileds. You know, he ran all the factories in Malaysia for Lumileds. Before that, he was at AMD. 38 years in the industry. You know, I've spent about 30 years in the industry. Stefan, who's the CFO, been with us for a while, you know, varied experiences. Murali is actually been with the company for 16 years. He was one of the founders and kinda inventors of this technology. Ralph, who's in the audience here, you know, ton of experience running public companies and also with, you know, Cypress as the, you know, head of sales there. Very proud of the team, very strong set of people and super excited by the technology. That's actually my last slide. I want to thank you all for the opportunity and, we'll take some questions. Okay, great. Thanks for that overview. Just wanna kinda start on that last point. You know, in many ways, you and Ajay Marathe and Ralph, you know, obviously more prominent faces of the organization, and I think you also announced some further leadership additions this week. At this stage, you know, the new additions, what are they working on? I guess, how would you characterize the team at this point? Any other sorta holes to fill, or how's it looking? Yeah, you know, I think, I feel now that we have all the key people, that the key leadership team, rounded out for this next, you know, phase of the journey of Enovix, in terms of manufacturing to scale. The three people we brought on board, we made a press release recently. We brought in a person, who will report to me, Samira. Her name is Samira. She worked with me at Qualcomm. She will be responsible for the product management and product execution. This company, as it transitions from a technology company to a high volume manufacturer customer-focused company, we need to make products that are more tailored towards each of the customers. We have lots of inbound interest, so we need to choose which ones we make first and which later. Just the discipline of, you know, that hard-nosed P&L and product management is the key. The other hire is actually the head of sourcing. We source a lot of raw materials, and the raw materials are actually, you know, over 60% of the cost of the battery. We need a very senior person to do the sourcing part. We are buying these machines, which are fairly expensive, and we need to make sure that those are done right. The person we hired there, you know, actually used to run, you know, the manufacturing and supply chain and the purchasing at Lam Research. We hired a strong finance person, to actually help with the financials of the company as we scale. I feel like we got all the right people now. Great. Also offer the opportunity to ask questions. Just one thing to clarify, though. you know, in the Q1, at the earnings call, you talked about doubling to around 9,000 units. Just wanna make sure that that's a forecast, not that you're calling that you hit that. Just, you know. That's Q1 is not done yet. Sorry. Q1 is actually end of March, so we are on target to hit that. We haven't, you know. That's a good thank you. Good clarification there. We are on target to get to that by end of this quarter, and we expect to at least double that every quarter. Great. you know, in terms of productization, you've had a personal history of bringing products to market, whether it be TI or Qualcomm or, you know, Micron. I recall from the recent earnings call, you know, the importance that you attribute to customization. do you know, you know, drawing from your prior experience, why is that important when you're working with customers? Yeah, that's actually a very good question. I mean, when I talk about customization, I'm actually talking about, in this context, mainly the customization of the physical dimensions of the battery, not the battery chemistry itself. If you look at consumer electronic products, people, you know, whether they're IoT or laptops or phones or watches, our customers spend a lot of time on the ID of the product. You know, a watch, you know, how it fits. A phone, you know, the shape of the phone, the display, the cameras, where they go and all that. Once they choose all those things and choose the ID, they have a slot for the battery. Every product has slightly different slot. Not completely different, but slightly different. They're all still rectangular, varying X and Y dimensions, and the Z dimension doesn't vary a lot. It's important for us to be able to make batteries to fit those dimensions that they have. That's why our machines now are built to be able to customize those. You know, I'm not saying we're gonna make infinite shapes, but, you know, it's important to make a few different shapes at least to hit all those high volume markets. You know, as we're in an industrial conference, I think, you know, a lot of people think, you know, mobile and maybe IoT as it relates to wearables like watches. You know, tying into this theme of industrial conference, what can your battery offer to, you know, I'd say broader industries that don't really, people don't think about when it comes to lithium-ion batteries? Yeah. I mean, you know, when you talk about industrial IoT, industrial IoT is actually a pretty big space, and a space that I'm quite familiar with because when I was at Qualcomm, we sold a lot of product, you know, a lot of Snapdragon processors and Wi-Fi and Bluetooth and power management and RF components into industrial IoT markets. You can think of industrial IoT markets as many different applications. You know, we saw an application where, for example, you wear something on your hand. It's available, but it's got a scanner, and when somebody's picking up a box, it just automatically scans the label on the box, and that's a battery-operated device. You don't think about that, but there's ton of them of people stacking boxes. I've seen products that where, you know, you have it in your shopping cart and you work through, go through grocery stores and you can quickly, you know, tag what products you're buying. You can think of, you know, two-way radios. You can think of, you know, like I said, you know, when you return your car at Avis or whatever, you know, it's done that way. When you think of all the factory automation. There's actually a ton of products, from helmets to wearables to so on, that are in industrial IoT spaces. Security cameras, you know, surveillance cameras and so on. Those are all products for which people need lithium-ion batteries. I think it's a huge space. Also the other thing you find in those markets is, the life of those products goes for five to 10 years. Mm. What happens is, but the batteries don't last that long. Those products, unlike the phones, have a back that can be taken out and you buy a new extra battery, and you recycle the old one. This technology is great because now, because we produce so much more density, they don't have to charge it as often. When you don't charge as often, these things last much longer. There is a huge opportunity for the whole renewable space. One of the big problems with batteries is that they don't last as long, so you charge them a lot, and then you have to get rid of them, and it's a big problem, right? Hmm. Makes sense. Wanna make sure anyone has any questions in the audience before moving forward. Let's pivot to manufacturing. You know, it's Oh, sorry, go ahead, please. Hi. Just quick question on sort of cash, the $300 million of cash on the balance sheet. Could you sort of remind us on the cadence of cash burn from here? Is it your view that a capital raise isn't a necessary outcome? As you think about ramping new lines, what the appetite is for customers to take on that funding, what the trade-off is between sort of that route versus you taking it on yourselves, just if you could talk through the puts and takes there. Yeah. Yeah, great question. You know, I mentioned in the earnings call that we expect to spend $120 million in OpEx and $120 million on CapEx this year. We have $320 million in the bank, you know, we can fund, you know, the first line and go through this year. We are, of course, as we need to bring in more lines, you know, commensurate with the demand, we will need to, you know, raise more money. We have a bunch of options for that. You know, going into Asia helps us because a lot of governments there and government agencies there want us to create factories there. There's an opportunity to work with them, to actually get some of that CapEx stuff worked out. A lot of companies have done that in the chip industry. It's quite common practice. You know, customers are super interested in working with us. You know, when we provide this kind of differentiated technology, they want to use it, but they also want to have assurance of supply, which means they would like to, you know, help us, you know, maybe fund some lines so they can get assurance of supply. That's also an opportunity. That may be a little bit later in the year because we gotta give them enough samples from our Gen1 line for them to get comfortable. Of course, we will be opportunistic with the capital markets. You know, whenever there's a good opportunity presents itself, we are open to raising more capital that way. All of them are on open, right now. There's one question right now. Hi. Sorry. Yes. On the maybe you call it design wins, and you had a number of, like, $600 million-$700 million. Yeah. Yeah. Could you just help kind of define that a little bit? Yeah. What it means. Is that like a contract that, you know, has to be? Yeah. fulfilled? Is it sort of contingent on, you know, on your, second factory up and running? I look at some of the sell side projections for your revenues- Mm-hmm. Right? It's quite different from that number. Mm-hmm. I'm just trying to. Yeah. figure out the two. How to write it. Yeah, absolutely. This is again, sometimes I'm at a fault of speaking too much semiconductor lingo. You know, I'll kind of explain how the process works. You know, typically what we do is, you know, we have a customer that'll come in, or we'll call them and say, "Hey, we have this great battery technology." Then they would say, "Give us samples." And we give them some samples of our battery, and we look at, you know, the market opportunity there at that customer, how much are they shipping and so on. They will test it, and then they will say, "Okay, this battery is holding up just like how you said it would. It's got the energy density, it's running a number of cycles. They move from what we call a, I don't know, supported business opportunity to design-in. Now the customer has a product, and we consider that a design-in, but they haven't decided at that point. They will say, "Okay, we're gonna put this in this particular product." Because the same customer could be making six, seven different products, but they will say, "Okay, we'll put you in this wearable device," or, "We'll put you in this smartphone device." They will do tests that are specific to that device because a watch operates differently from a phone, for example. When our stuff is in there and they're doing those tests, and after the passing of those tests, they'll say, "Okay, this looks good now. It can go into this." That's when we call a design win. We now are in that product. Now, the next question is, they will put it in there and be able to give them enough samples, like hundreds to, you know, sometimes thousands, and then they will test them more rigorously. When it passes all the qualifications of that, then they'll place a purchase order. That's when we call it true design win, that we're actually getting purchase orders. The numbers you see are. We don't have that many batteries right now. You know, we're only making, you know, we will make 180,000 by end of this year. Clearly, that number won't meet up those millions that you saw there. The idea is, you know, we do have customer interest and customer traction and customer funnel of the opportunities where they're getting qualified, so that when we do produce them next year, we have places to put them, and the year after. All of those numbers might not happen next year. Typically, this takes two to three years before they go to production. This is kind of an indication of, how should I say? A more confident, more solid indication of the true demand that's out there for our products at these customers. They're not purchase orders, then. Is that correct there? Uh, not They've been approved, like we're, you know, if we do this product when we do it, you are the battery that's gonna be in there, but. No, no. That will happen only after we get to a full design win stage where they've made the product, it looks good. That's when we make the purchase order. The lead time of purchase orders is more in the weeks, not years. Right. You know, the design activity's been pretty exciting. That was kind of what I'd say drove a lot of the interest maybe last year. As the year progressed, it became more clear that it's all about sort of your ability to make this at scale and manufacturing and cost. It was a good milestone last week with the completion of the design review. I guess, what gave you and the board confidence to move forward with that? Maybe more importantly, what's next in terms of timing? You know, when will the POs get cut? I guess, how should we look at the progress this year to really be the first as we think about next year when you're really starting to ramp in volume? Yeah, really good question. I mean, I think that question is on top of many people's mind because the technology is very compelling, and the question is, when is it gonna come to the market? When can people take it? We did have some challenges in getting our Gen1 line to the throughput that we thought it would get to, you know, in the previous management, and we had some issues of scaling. What happened there was that, you know, when we built the Gen1 line, it was, you know, expected to run much higher throughput than it is running now. There were a lot of. You know, the team that was there before was, you know, a great team that did phenomenal, you know, R&D to come up with this battery, but we didn't quite have the manufacturing expertise to build the right machines. We learned a lot by building the Gen1 line of what not to do in terms of high volume manufacturing. What we did since mid last year to now is to come up with a lot of what I call proof of concept experiments on both Gen1 and with our new suppliers on Gen2 machines to make sure that the problems we had in Gen1, we will not see them on Gen2. For example, you saw there a little video of Gen2 line already up and running. We actually have this time around, got some of our suppliers on their own dime to actually make prototypes of the Gen2 machines and show that they're working, and we tested them, and we demonstrated. We had like a 53 proof of concept experiments that we defined, and many of them are in different stages of completion. The ones that we actually feel confident completed, we presented to the board, and the board was like, "Okay, I think this time around we got it right." We placed POs for those machines, but we only placed 10% of the money. Now they need to build those, and then there's different acceptance milestones through this year where we will look at the machines, see what it's producing. I know there's things like, is it producing at the right rate? Are we getting the yields properly? Is, you know, the units per hour coming out properly? Are the cells holding? Then we release more money. Then finally, there's a factory acceptance as everything looks good in their site. Then the site acceptance when they have delivered to our site, that's when it all gets done. We feel like those will be the milestones that will be communicated through this year. To kind of build more confidence that we can actually manufacture these batteries in these new lines. I wanna see if there's any last-minute questions here. All right. You know, you and I both worked in semiconductors, you know, at fabs companies. Yeah. as fabless companies as well. I've seen the Fab1 line. You know, I guess from your perspective, how do you compare and contrast this process with a manufacturing process? I guess from your view, what's hard and what's comparably, you know, comparably easier? Yeah. No, that's a great question. I mean, actually, if you look at semiconductor manufacturing, there is a front-end and there's back-end, as they broadly call it. front-end is where you actually make these wafers, and that's very complicated, very expensive machines, $200 million-$250 million machines. Clean rooms, you can't even have any dust particle anywhere. Huge manufacturing facilities. We have those. Once it's done, you cut that wafer into small dies. Then there's the concept of back-end. Back-end basically means you take all those pieces, the dies, which went a lot of engineering, a lot of money went in to make, and put them inside a package and seal the package and get the wire, you know, get the pins to come out. Then, you know, if you have multiple dies, you stack multiple dies and put them in one complex package. That's the back-end, and then you test them. This manufacturing is similar to the back-end and test. It's not like the front-end manufacturing of making complex wafers. That is done. The equivalent of that is actually in the materials, which is done by the people who make the materials, and we buy the materials. We're not building factories to make materials. We're building factories to do the back-end and test. That is the least expensive part of the semiconductor manufacturing. That is something very important to understand. The other thing to understand is the tolerances. You know, back-end and test machines, as I showed, are still 1 to 2 micron tolerances. We are building in the 25 to 60 micron tolerances. This is not a very complicated problem for someone like me who grew up in semiconductors, but we just have to make sure the diligence and the acceptance criteria and the proof of concept experiments and making sure a little bit of it is working before you move to the little one. That discipline has to be brought in, and that's what we're bringing in. I'm not too concerned about the ability to make them. The other very interesting parallel, which I think is important to realize, is that in semiconductor manufacturing, when you move from one process node to the other, you gotta buy a whole new set of machines because they shrink. In battery technology, we change the chemistry, we get much higher energy density and more cycles. When I say change the chemistry, change the anode and the cathode, but our exact same machines still work. That's the beauty of this, is that the investment in the factories is a one-time, and we can keep improving on the process nodes. That's a great explanation. Well, unfortunately, we're out of time. We really could go on and talk about all the great things company's doing. Thanks for supporting the conference, and we look forward to following the progress. Thank you. Thank you very much, Bill. Thank you all for listening. Yeah.