Bergen Carbon Solutions AS ($BCS)

Good morning, and welcome to the presentation and status reporting of BCS for Q1 2026. My name is Odd Stromsnes, and I'm the CEO of Bergen Carbon Solutions. As one of very few true CCU companies, BCS continues to offer an attractive value proposition based on local development of sustainable carbon. And this carbon is a key component into all batteries. And these batteries are today produced with a massive greenhouse gas footprint, mostly in China. Our core CO2 consuming technology leverages electrolysis to convert captured CO2 into conductive carbon powders for advanced battery applications. And as I said before, producing CNT is also all about size and form for conventional battery chemistries as small particles as possible with as much surface as possible, 1,000x thinner than a hair, 10 nanometer to 100 nanometers in diameter with a surface area of up to 200 square meters per gram. And these carbons are normally used as additives to increase the conductivity of the active battery materials in several different chemistry applications. It's all about making small fuel tubes with a high surface area. However, in our case, from a new process, making a product that is produced with a technology that is fundamentally different from the conventional CVD products available out there in the market. And this is a sketch of the core of our pure-play CCU equity story, an attractive value proposition in terms of a local circular and sustainable value chain, consuming 3.7 kilos of CO2 per kilo of produced carbon. Local BCS carbon production from a nearby large CO2 point emitter by using the direct or indirect flue gas as a feeding stock for our CO2-consuming technology. Subsequently, the harvested BCS carbon material put into batteries as conductive agents and/or for mechanical purposes, making the batteries better and greener. Europe is moving from global supply chains to more local and controlled industrial production. The Industrial Accelerator Act aims to increase industry's share of the economy to 20% by 2035. A key measure is Made in Europe requirements and reduce dependency on non-European suppliers, especially important for batteries with stricter rules European content over time and more focus on keeping technology and value creation within Europe. At the same time, the EU will speed up industrial developments, faster permits and more state support for new projects. There is also a growing focus on recycling and low emissions materials. New rules will support use of recycled and sustainable materials. We have already proven our ability to produce valuable carbon directly from large CO2 point emitter during our Enova funded project a couple of years back. This is indeed a true full-scale CCU project and shows there are flexible and local alternatives to large infrastructure-based carbon capture and storage projects. For several large CO2 point emitters, this could be an interesting surplus technology to other CCUS solutions. And now over to Q1 status. I would say, we continue to document good progress in all our key areas. As reported during last quarter, we are now able to produce what we say is a consistent and well-defined carbon powder as we now have an operational recipe of the process to produce CNT at a certain quality on a predictable basis. Our learning in this field continues to improve, both in terms of process understanding as well as investments into new electrolysis equipment, speeding up our development pace. Our unique carbon materials offers characteristics with some clear distinct features, potentially relevant for several battery chemistries. Following our internal coin cell battery tests, enabling us to have a view on performance, we are now testing our material with several major industrial companies. And our financial position remains strong with a steady and reduced burn rate as well as the first Innovation Norway funding payment received. So our financial numbers confirms that we continue to have a robust plan for execution on our strategy. We maintain a steady and reduced cash burn rate from Q1 compared to last year. And this gives us a cash burn rate last year -- last quarter of NOK 3 million, and we will maintain a low cash burn rate going forward. Minimum CapEx is required, and we did receive NOK 10.3 million from Innovation Norway. So overall, still a healthy cash position now at NOK 133 million, which I would say puts us in still a favorable position. This is a good and condensed illustration of our ongoing technological journey. The relationship between a number of process conditions such as temperature, time, current density, among others, and the quality of the carbon powder we produce. We have gone from a more random distribution of powder quality to a more consistent and well-defined powder quality. The development during last quarter is shown here as green dots and is basically a true reflection of an increased process window allowed to deliver the same CNT quality. And this is a very positive development in terms of increasing production robustness, which again is taking speed up and cost down. And this journey continues with steady improvements to the carbon material, both in terms of quality as well as process conditions. This work is resting on a deep process understanding through systematic parameter control and is good documentation on the transition the company has taken. We have, over the last year, built a deep insight into the fundamentals of our technology in order to really understand the key drivers. This work has now resulted in what we define as a process platform, stable, predictable foundation for further development. And it marks a clear breakthrough for Bergen Carbon Solutions and a turning point towards a further industrial development of our technology to achieve a controlled progress. And I would say documentation of a stable process is absolutely paramount before entering into technology agreements or discussions with larger industrial companies. We know that we are developing a unique CNT with special characteristics compared with conventional fossil CNT from CVD. We make a flexible and fluff magnetic three-dimensional CNT material, which could disrupt how traditional battery players are thinking of CNTs at the same time, with properties potentially interesting for certain applications and the next-generation battery chemistries. And these partner dynamics foster more focus on actual tested battery performance than actually CNT specifications. The better we are in describing our unique CNT with these particular features, the better will our partners be able to define their optimized application areas. As a consequence, we are now testing with competent partners with abilities to use these characteristics within their next-generation materials, not only to replace fossil carbons, but also so doing it while increasing the battery performance. In order to speed up our development work, we have now commissioned the second electrolysis scale cell soon now to be ready for operation. By introducing the second cell, we will be in a position to increase the variation of our testing parameters. This will basically increase the speed of our development work by enabling more variation to the process and most of all, confirm reproducibility as well as it increases the output of the test material. Funding from Innovation Norway enables accelerated development with institute partners. IFE, Institutt for energiteknikk is engaged as top Norwegian expertise on battery development, in particular, relevant for us towards optimization of slurries and pouch cell testing. We will cooperate with IFE on both LFP and Sulfur chemistries in more industrially relevant formats going forward. So over to a mini deep dive in our application areas. We know that at least 70% of today's batteries contain carbon nanotubes, and this is expected to grow with future battery chemistries as the criticality of nanocarbon in new chemistries will increase. The CNT quantity in a typical LFP battery is between 0.5% and 1%, while in the lithium sulfur battery, it's typically up to 20%. And this is why we are applying and participating in several industry-based development projects for new and more sustainable battery chemistries. Note that our carbon material have a function both in the anode as well as on the cathode side. That means adding nanotubes will increase the energy density and enhance the conductivity and the strength. And this basically means faster charging of the batteries, increased durability of the battery between each cycling, longer lifespan of the battery, and it also enables new battery chemistries. And the fact that our electrolysis-based production process is very different than the conventional CVD process makes our CNT unique with some clearly distinct features. For silicon-based battery chemistries, our CNT could, as an example, act as a reinforcement agent on the anode. Another application could be applied towards dry electrodes. Both these potential applications have sparked interests among several of our testing partners. In terms of increased electrical conductivity for conventional chemistries, the nanotube acts as a conductive agent and increases the conductivity between the particles due to that the cathode is a lithium metal compound releasing lithium ions and electrons during charging and accepts them during discharge. Comparing battery cell performance is subject to a strict quality control in assembly of the coin cells. We need to ensure that the cell components are standardized to ensure measured differences only come from the cathode chemistry itself. Hence, we have a strong focus on reducing variances to increase reliability and trust in our coin cell testing results. Battery C-rates describe the charging and the discharging speed within the batteries. Previously, we have presented cycling data for LFP cell. Today, we want to show something on charging rates. We have done charging tests with extremely high rates for charge up to 6 minutes from empty to full charge. This corresponds to 10C. And we have replaced the commodity combination of fossil CNTs and carbon black with our only -- 100% of our own powder. We can report on promising C-rates results shown here in purple with actual performance closer to single-wall carbon nanotubes shown here in blue than towards the commodity CNT combination in orange at both 4C and even 6C. Showing that our CNT functions well in today's mainstream chemistries is important, but we have also seen promising results in next-generation lithium sulfur batteries. And this chemistry is not yet widespread, but our initial coin cell tests indicate that our CNTs may offer particularly interesting advantages. And as you can see from this graph, the capacity retention with BCS and CNT powders in red is 100% higher than the CVD-based reference we have used for this case in blue. And these findings, which now is reproduced by 2 independent European institutes, suggest that our material could play a meaningful role, not only in battery systems, but potentially also in tomorrow's chemistries. And I will emphasize that these tests are coin cell tests and is indeed work in progress. So in order to summarize, a stable and repeatable process platform is both instrumental and enables interactions with global industrial testing partners. Interactions are now based more on battery performance than on specifications. Additional hardware will increase testing speed. Cost levels remain low and predictable, supported by strong financial discipline and innovation Norway grounds. And the battery lab is very important for us as it supports our testing and our partner engagement. That concludes my presentation, and we are now opening up for Q&A.

Okay. This Q&A session is moderated by Fredrik Oksnes, CCO in BCS. And with us today, we have Petter Slyngstadli, who will also be given the opportunity to ask some questions. But this prerecorded question #1. With regards to the Morrow bankruptcy newly announced, does the company have any direct financial exposure to Morrow that could result in losses?

I understand why the question is raised. First of all, I would say it's very unfortunate and sad that Morrow is now filing for bankruptcy. It's always good with cooperation with a competent company based on the local performance. It makes the speed -- increases the speed, it's convenient and it's very valuable. And to answer the question, we have no direct or indirect financial exposure to Morrow. As previously communicated, our relationship was based on a nonbinding intentional technical agreement related to the development of sustainable carbon materials for certain battery applications.

#2, you appear to be losing a partner that was expected to test and validate the material and contribute to solution development. What are the implications of this in terms of proof of concept in the market for BCS? Do you have other partners for technical validation?

As communicated on several occasions, we are in dialogue with a number of different companies, and we are currently conducting tests with several of them, some in Europe, but most of them in Asia. In case of Morrow, the technology development and testing of our CNT, they are ongoing and much of it is ongoing via IFE, which is doing most of the work on behalf of this corporation as it stands today. And as I mentioned in my presentation, we have an increasingly strong relationship to IFE. I would say that the progress of the work we now have initiated with Morrow will continuing through IFE. We have an excellent and growing cooperation with IFE, as I said. It's indeed a loss for European battery industry that yet another company is going under. But we have always communicated our ambition to serve a global market. Therefore, several of our Asian partners are just as important to us as Morrow has been.

And then a more general question. What is the current status of samples shipments to industrial players? Are you exploring markets outside batteries? And if so, which one does look -- which one advantage from your material? Is data center cooling a relevant application?

As mentioned in my presentation, we have a number of concrete tests ongoing with both commercial companies and academic institutions. And these tests cover a range of different use cases within the battery applications. Due to the distinct properties of our CNT, which we are now able to define much more clearly, we are identifying and engaging with partners who are interested in testing impact on performance within their specific battery chemistries. And with reference to BCS' previous strategy, we have currently no immediate plans to return to a multi-application approach. We believe that the battery sector is where our advanced carbon materials has the greatest value proposition of today. We did spend time looking at many applications previously, aluminum, steel, jogging shoes, cannons, et cetera, et cetera. And we will continue our strategy towards the electrification market in general and the battery market in particular.

Okay. Petter?

Thank you. Interesting presentation as always. Just a technical -- more or less technical question or financial technical question. The installment from Innovation Norway, NOK 10.3 million, this is the first of three, right? Will it be over 3 years, so each first quarter, the next year and the year after?

It is 50% -- after 50%, we will get the next installment.

50% is in progress.

Okay, I see.

It's over 3 years.

Yes. Okay. So it's a bit difficult to model then, I guess, because it will depend on your progress to a certain extent?

Yes, exactly.

Okay. Good. The lithium sulfur industry, what's the timeline? When will the Teslas be powered by lithium sulfur?

You know. We are -- we have decided to spend all our time in describing and characterizing what we make. We are speculating much less in the application area. And if we are able to document what we make on the best possible way and test it in different applications, I would say it's much more up to the partners on the other side of the table to identify where they think this can make most use. And for us, even though the sulfur battery industry is not huge, just the fact that it's one potential battery chemistries of tomorrow makes a great value for us. And if we have a product which could boost that effectively up, that has a huge impact for us. So I will not speculate too much if sulfur is going to be a success tomorrow or not. But it's one of many candidates.

I see. So do you see our product as an add-on to existing carbon nanotubes out there or as a replacement?

No, that's a good question. And of course, all the time we have spent this last year is really to understand the key features of what we make. We don't match all the specifications of the conventional Chinese-made CNT of today. And we have said previously, we don't intend to compete on price towards the Chinese on that product either. Our CNT is a bit different. It has certain peculiarities, and that could be beneficial in some areas, either on the cathode or the anode. And I mean, every week, we are identifying potential application areas, which we haven't really been thinking of. And that is very much due to the dynamics with many of these companies we talk to. And that makes this industry so interesting. It's a huge dynamics in it. And it's extremely important for us now that we enter into a much more external oriented phase where we get that input because now we are in the position to define what we make.

We discussed this that there seem to be a market for carbon nanotubes out there sort of off the over-the-counter stuff. Do you see yourself as having a product now that could be sold in small boxes?

Not tomorrow. But I mean, of course, that is the aim -- but I mean, the aim of what we do can inform in many ways. But first, we need to document that this is really value added for certain application areas, and that's what we do. And then we take the next step when we are ready. Technology development takes a lot of time. And to give a precise time lines for this, it is very difficult and it's very dangerous. We need to have patients because we're doing the right things.

Yes. The parallel to biotech is -- comes to mind then. And hopefully, you will be in the later stages of Phase I then, where Phase II is where you are sort of commercializing the product and where you are more -- when you have exited Phase II, then it's where the big guys comes along with a huge pile of cash. But I would say that you are in the last innings of Phase II in that perspective?

Petter, I'm not going to say too much about that. What I would say is that we are -- I would like to emphasize, we are not a battery company. We are providing valuable raw material based on process knowledge and material technology knowledge, which are some prerequisite advantages historically in this country. So I think that we are very well positioned within the battery value chain. Going forward, we know that the battery market is going to increase tremendously. The batteries are here to stay. And the push for local for sustainable materials is increasing. So I think we tick 11 out of 10 boxes in terms of equity story.

Do you see the price -- we were in a raw material mini super cycle, I would say. Do you see the price for conventional CNTs increasing?

We don't see it increasing. We have -- we are seeing a very...

Stable market.

Yes, but also it's a huge variances between the prices. And it's a complex value chain. And I think -- the pricing is always based on what value adds to the battery performance. That's what counts. And if you are able to document efficiency increase, I think the payments can be pretty good.

That concludes the Q&A. Thank you all.

Okay. Thanks for listening.