AnteoTech Limited (ADO) Earnings Call Transcript & Summary

Good morning, and welcome to AnteoTech's investor webinar, where we have the company's Interim Managing Director and CEO, Merrill Gray, on the line. [Operator Instructions] But just a reminder, Merrill has just been in the seat all of the week, and it's her first week in the office. So we are going to endeavor to answer as many questions as possible. But just noting that there is a strategic review underway as detailed in the quarterly today. So we'll just keep that in mind. But with that, Merrill, I'll just hand it over to you to give an introduction. Thank you.

Well, thank you, Simon. First of all, I'd like to acknowledge that there has been a lot of change. And as Simon said, this is my first week in the office. So forgive me if I'm not able to cover in the depth of detail that some of the questions come through and everything. But it is my intention to be able to do that very soon. I was adamant that we needed to have this webinar to really show that we're seeking to have greater transparency and pure communications with shareholders. And it's a different Board now, and the past Board members and executives certainly did a good job and their very best in terms of the challenges that we're facing in the market, which are very real. And I would like to thank you -- that's a really important message at the outset. Thank you for your support. Thank you for engaging. And I look forward to going through as much as I possibly can, as Simon said, while we go through a strategic review and more fulsomely can come out to you with what we're planning to do. So I'll hand back to Simon.

Great. Thanks, Merrill. So first of all, we'll get started just again. A number of these questions have been submitted. We've amalgamated some of them in terms of double ups and summary. So forgive us for that. But where we'll start is battery metals or battery materials and specifically just around the current performance in technical data, Merrill. Can we just talk to what are the latest performance results for Ultranode, including specifically data at defined silicon percentages?

Yes. Great. Okay. So we've released our quarterly report, and it's got the clear target there, which is 800 cycles at 80% capacity retention. So -- and of course, our focus is the 70% high silicon anode. Now I'd like to start that comment by making it clear that, yes, clearly, we haven't delivered on the commitments that have been made before, which are in the 1,000 cycles at that same capacity. But we're not giving up. And I'll go into a little bit about that. So what we really -- what we're looking to do is really capitalize on the work that's been done to date. Now we're clear that there's more investment required to get to where we need to go to. But by breaking that out into building a product around what we've already got, which is suitable for different markets in the consumer side and the e-mobility side and really finding a partner that is on the same page that is strategically aligned with us is where we're looking to go. We'll have more on that in the future, obviously. And then on the high-performance side, we see that it's something we'll need to step towards. So we actually have loaded up on the website a fact sheet, if you like, or a corporate flyer this morning, which is on one of the front pages and certainly in amongst the brochures that really goes through a bit more about what is it that we do and where are we heading with both of our divisions, so life sciences and the advanced battery materials -- battery technology group. So productizing, commercializing and making sure that we actually get into those unique or slightly more niche markets is where we're going. There were some questions about pouch cells. And yes, they have been tested by multiple parties in the past. And a reminder that Mercedes-Benz is the one party that's doing pouch cell testing. And there were also questions about full cell. So I guess that is a really important part of what we hope to come back with is around how we are engaging on in the value chain with commercial partners. So the answer is yes, pouch cells, we have -- we are doing coin testing, but we are doing pouch cell testing. It has been done in the past. And with some new formulations around the Ultranode that we're currently testing and where we want to go, that is being tested. But I guess the bottom line is we'll have more information as it comes to hand. I'd just like to more fulsomely add to some of the more commercial questions that came in on the advanced battery technology for battery technologies group. So there's genuine market interest. And again, in the quarterly, we've said that we have engaged with 3 global chemicals companies. And so the key for us is to seek to convert that in a way that adds value for everybody. So that is -- and there are many other parties who are actually evaluating our product as everybody knows, but it's about making sure we really get to where the value proposition and make sure that our partners are very committed and incentivized to make the change. It is a very challenging market when doing deals in this market. We're not the only ones who are in new technologies facing that. But of course, my job coming in is to get really, really commercial around the way we look at that. And I just would like to -- everybody is aware of that. But I have to talk about the fact that in a bespoke market where there actually aren't standards around people manufacturing processes for coin cell, cylindricals, prismatics and pouches, that it is a very bespoke process that we've been going through, minimum 6 months for people to validate the technology up to 2 years. So we're really looking at our sales process and streamlining that and the end value proposition, so to try and expedite the engagement we have with like-minded companies. Really a real commercial focus is what I intend to bring to this role. Back to you, Simon.

Great. Thanks, Merrill. Just specifically, just trying to make sure that we ask the questions. How does Anteo involve itself in its dealings with end user clients and their independent battery manufacturers, for example, and its evaluation of both Anteo X and the AnteoTech entrepreneur? Does Mercedes-Benz share its finance with its battery suppliers?

A very good question. So the Mercedes-Benz relationship and where we want it to go is around -- is exactly that, is for the validation in their laboratory, which is what they requested to then be shared with who they're planning to partner up with. And this is a really difficult part, a really difficult part of what we're doing, which is handling the geopolitical and the sustainability and a whole range of frameworks and how people shift to those and how that is actually going to be delivered within the European Union, for example. So the answer is we understand that they do. Who is that exactly and how do we get the introductions and actually get slotted into their future designs and their production schedules is where we're at with Mercedes. So that's what we're hoping we'll get out of the relationship. We've got some more discussions in June, and we certainly will keep them very pointed and very much to how does this all work and how can we make this happen. I'd really like to make it clear that for the likes -- and I won't speak specifically about Mercedes-Benz, but really for the European car manufacturers, Chinese supply of batteries is what it's all about. So how that actually moves commercially, it's really commercial, very, very commercial, they're very, very focused commercially into non-Chinese manufacturer of batteries and how all the technologies come together and how long various car manufacturers will continue with the way they do things, which is putting Chinese components into their EVs. That is a much bigger economic and regulatory, if you like, framework that we must work within. So it's possibly not well known just how extensive all the componentry is and how it comes out of China, and that's the competition we're facing. It's very, very significant.

Great. And just a question on how much Anteo X has provided to Mercedes-Benz for manufacturing trials. And what's the status for a design, for a final decision?

Okay. So this is exactly what I was just talking about. So Anteo X is a component in the overall design. So very small quantities for testing in laboratory -- at laboratory scale. And in terms of Mercedes, and you want to be really aware of this, they are part of ACC, so a group around gigafactory establishment in Europe, and that is on shaky ground. So we're sort of somewhat ahead to how Mercedes -- it's exactly like the last question, which is how do we get into that system where we need to get an update and we need to know what is really happening. Now many, many people are asking the same questions as us. It's -- and that will come through with our strategy around how we see us capitalizing on the work that we've done with Mercedes and where things are shifting. It's just a bit early for us to be able to say that because of the strategic review.

Great. Just a question just around commercial progress. What progress has been made with other major EV companies?

Yes. I think we -- in the past, we've been pretty clear that engagement with OEMs has been -- and in fact, everyone is aware of engagement OEMs has been on the cards. And in writing the quarterly report, I wanted to be very clear that there is some pullback in commitments around where things are going, particularly in the high silicon side of things. And we need to be cognizant of what's going on in the market and be flexible and create options that will really leverage off what we've done to date. So it's not that they're going away. It's just that things are going slower. And as a company and a small Australian-based company, we need to be flexible, nimble and work on how we can get in the systems around e-mobility, for example, that may be going faster at this time. So that's all -- that's everything that's being reviewed under the strategy review.

And just a question further just around commercial progress on consumer electronics companies. I know you spoke, to spare the term, e-bikes, et cetera, but where does that stand at the moment as well?

Yes. No, no. We -- obviously, we have our Vice President of Sales, Fabian Beck, in Germany, and he has a very deep consumer battery experience base through his work at VARTA and his contacts in that area. So yes, that is an area that, again, when we more fulsomely come out with our strategy, we are very much looking at through relationships, networks and also where we can get in as fast as possible. And again, time it takes for validation, new design, to the previous question, which is around in the manufacturing -- into the manufacturing process. It is -- there is a time frame involved in that. And as I said before, 6 months minimum, 2 years to fully validate. So how can we work around that with customers that are already up the learning curve where we can expedite those processes. So the answer is yes, it is a focus.

And just a couple of final questions around commercial progress, just specifically around carbon nanotube companies and chemical companies.

Yes, carbon nanotubing. So I think what I've already explained is that we are taking on board the context of the markets that we're working in, and that relates to how could we diversify, and that's what this question is really about. In the chemicals companies, this is a big focus. And as we've said in the quarterly, we're engaging with 3 global companies who all already supply into battery manufacturers because again, this is about what can we do as a small company with our expertise and our networks. So by leveraging off that and your established customer base and your testing programs and Anteo X being added into those testing programs is what we're seeking to do through distributorships and partnerships, and that's where we're going. So chemical companies, in particular, who are already -- who are great quantums larger than us who are already established, as I said in the quarterly, we're already engaging with them, and we're looking to do that further. Diversification, I guess, I've already referred to that, is something we're looking at, yes.

Perfect. And just -- we'll move to just around strategic sales and commercial outcomes. Just a question, given past guidance on imminent commercial deals, why have signed contracts not yet materialized? And what specific barriers have been encountered?

Yes. Okay. So this is -- I have -- as part of coming into this role, I have obviously reached out to my networks in the sector around the current status of -- in different parts of the battery componentry and where -- what they're seeing, how it's growing for them. And it's not great for our shareholders to hear that we're not alone. It's a very challenging market for people to be making deals around new technologies and the progress that needs to be made in batteries. With EVs being -- the competition around Chinese EVs, Chinese technology, and we get a lot of comments about how Chinese technology change is going to impact us. We obviously have a watching brief on that. And they are going to impact everybody in the market. So we need to constantly be looking at how do we fit in, how do we move forward as fast as possible, how do we secure a position. So that comes back to commercially, we've been asked some of these questions, why is it taking so long? And why are we not seeing what's expected in terms of commercial outcomes? It's not because we're not engaging and getting to a certain point, but actually getting it across the line is a time frame that is sometimes not in our court. It is with other parties who have other issues going on. And it's a very challenging market that our end customers are facing in terms of their flexibility, their nimbleness as well. So there isn't one reason, one specific reason. We have standard processes we go through. But all I can say is I acknowledge that there's an expectation there and the frustration, but every -- that's every avenue, every potential we are moving forward with. So [ my focus on this ]...

No, I think you -- again, noting you're 1 week in, Merrill, and just with the intention to ask as many of the questions that have been submitted, I think you're doing a great job. So we'll keep going just around -- at what point will AnteoTech consider walking away from "tire kickers" to focus on serious partners?

Right. Well, that is a really good question and very critical that we are using our very limited resources to the best effect. So I'm going to be -- I'm first week in office, as we said, and I have meetings with all of the heads of each of the divisions and across the team to understand how we do make the decisions to do what we do and if we don't get to a certain point, pull out because it's also about the pipeline. And I'm hoping that I can bring some of the networks that I have from being in cathode active materials and through working in recycling to the table and some of that around making sure that we have high-level commercial discussions as soon as possible and where there isn't a clear co-joined commercial value proposition that everyone is on board with, that we move on because filling that pipeline with opportunities is something that we're really going to be focused on in the next month or so.

Great. And just a question just around funding and grants. When does AnteoTech expect to receive funding from QIC and ARENA?

Yes. Okay. So that really -- as everyone knows, that's matching funds, and it will also come down to how the strategy falls out. So bear with me with that one because we want to do everything that makes sense around rolling out our products and commercialization. So bear with me on that, we're still reviewing that. And I guess -- yes, so Simon, I guess that also might lead into life sciences. So I'll leave that one with you.

Correct. So that's the next question. So just around the Serum Institute of India. Is it purchasing AnteoBind at a rate higher than the minimum defined in the agreement?

Yes. So yes, they're at a run rate of AnteoBind that is higher than was anticipated. And in fact, they've used their full 12 -- what we originally sold for the 12 months in 6 months. So we are looking forward to further orders coming through. In fact, there's been a recent visit to meet with them, and they're coming to see us as well. Now that's around usage, but they're also developing -- they're diversifying into new tests. So there's lateral flow-based tests being developed. And the good thing about our Serum Institute relationship is that they've introduced us to other parties who are also developing new tests. So I'd say we're really looking forward to meeting with them here at the office and deepening that relationship.

And just another question just around the diversification of AnteoBind usage within the Serum Institute of India's product lines. Has this been achieved?

Yes. So that comes back to the lateral flow test and other tests that they're looking to get into. I would say that, of course, with clinical trials and us getting into test, that will then lead to larger scale production. That's a good segue perhaps into Vidcare and where we're at with Vidcare. I know we have some questions there as well. So that's where -- with Vidcare, we're in testing. And there's been real serious engagement and a deepening of that relationship as well. So there's -- the team is out for 2 weeks in India doing optimization, assay technology training. And where we're up to there is we're waiting for testing to be completed for us to go into clinical trials, which is the precursor for us to then go into larger -- for approval for us to then go into larger scale production. So I know that there were some questions about where we're up to, when is that all going to happen. It's essentially an ASAP-type situation. So everything going through that stage process is being watched by the team, managed on a daily basis.

And just a question around expansion plans. What sort of opportunities have been identified by Gautam and the life science team in Australia, India, Europe and the U.S.?

Yes. So there's a number of high-value research groups that are evaluating AnteoBind. So there's -- some of those are in the medical device field, for those who are specifically interested in what we're doing in life sciences. And we -- as part of the strategy, we're also looking at deepening and expanding our relationships in terms of distributors and opportunity finding. So we've got a whole piece which we're trying to pull together and we'll be able to communicate more fulsomely on. But the last trip did expand our pipeline. And I guess the one really key message that Gautam has shared with me is that they're very -- the people we're working with are very well credentialed, very well regarded. This is part of our process -- which someone asked again about tire kicking, part of the -- our process of making sure that we're working with the right parties to really get us into the system and up and running.

And just final question around life sciences. How does the team plan to address these opportunities and grow the customer base?

Yes. That is a part of the strategy review, again, making sure that we've got -- that we're rightsizing that team, got the right skills in that team, and we're really clear about the opportunities we're going after.

Perfect. And just leading into more of a corporate and sales commercial team discussion. Can we just have an update on the progress of Fabian Beck as a VP of International Sales?

Yes, excellent. Yes. So Fabian and I have been talking on a very regular basis as we've gone through these changes. And it's actually really great to have him on the team and for us to have some very similar views about where some opportunities may lie. So we will very much rely on him and his deep networks in terms of where we go next. Very, very pleased to have him and to be able to leverage off his networks and knowledge base.

And I understand there's a strategic review underway. So this probably leads into this, but is there an intention to review staffing and costs based on performance?

Absolutely. Across the strategic review, it's everything from costs, revenue streams, which we've been talking about, which is the marketing, sales and communication thereof. And also, we've already talked about that around investment. So in terms of customers, some of the customers we're talking to, particularly on the chemical companies and battery materials companies, are also potentially strategic that we would -- we are seeking to engage with. So it's across cost, revenue and investment and how to manage our overall -- our resource base and our cash flow. So the answer is everything is on the table, and we are looking to be able to come out to the market with how we've changed things or how we've rearranged things very shortly.

And just pivoting back just around intellectual property to make sure that we've covered this as well. When is the Ultranode patents expected to be granted?

With that one, sorry, I'm not -- that one I'll come back to.

That's fine. Again, any question that we haven't comprehensively covered or if you did have any more questions, more than happy to receive e-mails and come back on those. So apologies if we can't get to everything. Merrill is trying her utmost. So we'll come back on that as well. And again, we'll just come back on any feedback around patent [ lawyers ] that they've provided as well as some of the discussions around Anteo X being registered under REACH. But if we just go now to just around the company's website, company image and operations, when will that be updated and approved? And I can probably cover that one. We're currently working over time in terms of updating that and ensuring that it reflects the current operations. So stand by and watch that space. But more so probably for you, Merrill, just around shareholder communication. Can shareholders expect clearer, more regular updates on the true state of commercial prospects?

Yes. That's really good. It's probably a good place for me just to circle back around and really make sure I clearly message that. Now there is a different Board involved. And we're very committed to transparent communications with shareholders and to improving our overall marketing and sales communications with potential customers. And as I said, we put up a brochure this morning, which is a general brochure, and we've got conferences coming up, 3 we're looking to -- which is also in the quarterly, which we're looking to attend and really working on our collateral and the connections that we can get through that. But really focusing down -- focusing in our message about what it is that we offer and the very, very significant improvements that Anteo X can deliver as well as working with partners around where Ultranode can fit into the manufacturing processes. So as I've already said, I'm looking forward to coming back more fulsomely on a strategy that we plan to execute. And we're really looking forward to engaging. We've got our Investor Relations e-mail for anyone to send in questions that they have that haven't been answered today or ongoing questions. And I would really like to thank you again. I'd like to thank everyone on the call and everyone -- all of our shareholders for their support. And we're really looking forward, I don't know to say it better, to getting stuck in and very committed to delivering shareholder value.

Great. It's been comprehensive. And as I said from the top, in terms of Merrill just starting, we did want to ensure that we asked and addressed as many possible questions. So hopefully, we've done that. But if we haven't, more than happy, as Merrill said, in terms of having any submitted questions on the e-mail, and we'll endeavor to come back to those in the coming days. I think the only other thing that I'll just cover off is we will aim to communicate a bit more through the mail out system that we do have, so around different conferences that we're attending and presentations that are included on those. We'll endeavor to communicate with shareholders so that they're across it. But Merrill, well done. And if there's any further questions, as I said, please just send them through. But thanks all for attending. There's a lot on the call. And Merrill, well done again. Thank you very much.

Thank you. Thank you, everybody.

Thank you.