Freemelt Holding AB (publ) (FREEM.ST) Earnings Call Transcript & Summary

Welcome to this investor meeting with Freemelt. The will start off with a presentation and afterwards continue with a Q&A. [Operator Instructions] And with that said, I hand over the word to you, Daniel.

Thank you, Ludvig. Hi, and welcome to Freemelt's first investor update. On this call, we have myself, Daniel Gidlund, I'm the CEO at Freemelt; and our CFO, Martin Granlund. And I'm also very proud and happy to have Professor Arun Bhattacharya, who is the Chair in Fusion Energy at University of Birmingham. And he -- Arun will introduce himself in connection to his part later on as well. As a company, we understand that it can be difficult to get the complete picture on how Freemelt is developing as we continuously have been communicating PMs regarding business or important events. So the purpose of today's event is to summarize 2025, provide more context on the progress of projects, for instance, as well as our focus areas. An important part for Freemelt is to do things actually a bit differently than they have done previously in the AM industry and both in regards to technology, but also commercially. Why? This is actually an industry that has been existing for a bit more than 30 years. It has mainly added value in the prototype manufacturing side of the business, but not actually really managed to break through on a larger scale, at least for serial production, except for a few products. If you take in metals and medical orthopedic implants is one of those areas that pretty much has swapped into -- from the traditional into additive manufacturing for all new kind of products at least. Also, I would say, from an aerospace point of view, then mainly the manufacturing turbine blades for the aero engines. It's another application for serial production as well. So -- and this is more complex materials and also what they try to do is optimize the efficiency of the aircraft engine. So what we try to do different is, first of all, to have an open-source approach. This industry has really been a closed ecosystem where you need to buy the printer. So the hardware, the software and the powder. The other part where we try to do different as well is regarding the design of the machine. We have a more modular design to really get down the cycle times for production and both these two, I would say, is really appreciated features and valued by our customers as well. As I said, this is the first investor update. We will focus on two specific areas. The first one is energy and more specifically on fusion energy. The other part is China, where we had a kickoff last week as well. And why we did choose those 2? It's because we have good expectations on those 2 areas on a relatively, let's say, medium horizon as well. The idea of this forum is to be an interactive forum. So as [ Ludwig ] said, we appreciate questions. You can place the questions during the presentation, and then we will try to answer them after the presentation is done. As this is the first time we have this event. We hope that you find it valuable, but we also appreciate if you give some feedback so we can further improve it for the next time. This slide, I think most of you potentially have seen if you have listened into quarterly reports, et cetera. So I would try to keep it short, but I think it's worth to repeat that we develop and sell advanced 3D printers for especially complex and high performance materials and components. Our technology has been designed actually from its start with the purpose of being optimized for serial production. As I said before, we have a modular unique design. And you can see it here on the screen on the e¯MELT-iD, you can see the build module that is replaceable. And again, this is really now to optimize the productivity and the availability for production. So you swap out the one build unit when that has been finished the print and you put in a new one that has been prepared. So the intention is really to get the lowest cycle time per square meter for the business verticals that we focus on. We also use the same core technology throughout the different kind of machines, the Freemelt ONE, e¯MELT-iD and iM. So this means also that every Freemelt machine or e¯MELT-iD that is installed will actually enable possible demand of serial produced metal components through e¯MELT-iM in the future. The first printer was launched 2019 and I think it's quite impressive that we so far have sold 40 machines spread around Europe, North America and Asia. And as a company, as our only focus is Electron Beam Powder Bed Fusion, E-PBF. We also have stated the ambition that we should be the #1 E-PBF supplier when it comes to those business verticals that we focus in. We are currently a clear runner up with the 40 machines installed, but I would even claim that from a technology innovation point of view, we are #1. If you zoom in on 2025. I mean, so far, this has been the best year for Freemelt in terms of order intake and invoicing. We have worked very hard and also structured so smart over the past 1.5 years to really educate the market about who's Freemelt what is Electron Beam Powder Bed Fusion? What kind of value does it bring to me as a customer? And I think this now starts to really pay off. I think also the geopolitical situation also contributes positively. Why? Both companies, but actually even countries now quickly reviewing their capabilities to manufacture especially critical products and especially in areas like defense and energy. At the same time, I think we are also seeing an increased focus on research in critical materials. So right now, we're actually well positioned with the focus areas that we have and also macro trends that we are seeing that are positively impacting metal additive manufacturing as well. I think it's also important to consider. I mean despite the positive development that we see and the extreme focus and investment in example in defense, there are still relatively long sales cycles. And it's also an industry that has not really changed for a long period of time. So I think a good KPI to track or follow and that actually indicates that there is an increased commercial interest from the industry is first paid products, which you can see we have so far this year, 7, but also Freemelt ONE, which is actually a result of industry that is demanding new development of materials for products that can be manufactured through additive manufacturing an Electron Beam Powder Bed Fusion and year-to-date, we have sold 12 machines. In 2024 and further in 2025, we have seen also an increased demand in all our focus areas globally. And to meet this increased demand, we have also made a strategic decision to outsource our assembly operation, and this is really now to get the more agile supply chain when we're also growing. And this we have outsourced to a manufacturer called Scanfil based in Sweden, actually with a global footprint. And also as a part of this industrialization that we are in now, we have also established a Technical Advisory Board as well with industry experts such as Arun, for instance, from all our core focus areas. And this will also help us as a company to focus on the key drivers for our key customers. So we make sure that we do the right things and can also manage the customers' expectations in the end. We will meet 3 times a year with this Board. Lastly, our focus has been in Europe and North America until now, and we have only done business sporadically in Asia. And one of the main reasons we have stayed out of Asia before is because we haven't really had the bandwidth or the capacity to put in the required efforts to succeed until now. And as we aim to be the leader of E-PBF solutions globally, we must enter the fastest-growing additive market as well, which is China. And I will come back to this later as well and share some further details. So with that said, I would like Martin also to explain the structure of the 2026 June warrant that we have in place as well. Please, Martin.

Thank you, Daniel. So this is a -- just a reminder of the warrant, which was part of the rights issue package in February 2025. But the warrant is, of course, requires every warrant holder to take action and subscribe when it's time. The warrant is listed. You can find it online wherever you find the Freemelt. It's called Freemelt Holding TO 1. It is entitles a holder to subscribe for 1 new Freemelt share in June 2026. The subscription price is going to be 70% of the volume weighted average price of the company's shares, which is measured in the second half of May. And there is a minimum and there is a maximum. And the cap is SEK 1.33 per share. So it is likely that it's going to be an interesting opportunity for holders to subscribe. But please have a look out in May and June in the coming year for this one. Thank you.

Perfect. Thanks, Martin Okay. So let's zoom in a bit on our 3 core industry verticals. And let me first say that Freemelt -- I mean we are exposed to more industrial verticals than those 3 as well. And just to give a few examples of aerospace, for instance. And one example is our current customer IHI, which have 2 of our machines. I think semiconductors is also something that we are exposed to industrial tooling. But as a company, we have really decided to focus, to really enable the highest chance to succeed. And this is why we have chosen those 3 key industrial verticals. All 3 of them do have a structural growth as well. So where defense and energy are mainly driven now or extra driven, I would say, through the geopolitical situation. I mean defense numbers that you see here on the screen, most probably outdated now. NATO has increased now to 5% of the GDP. EU has set aside a huge budget to ramp up as well. And AM, if you look into as such, of the total manufacturing, the industry expected 19% of the total manufacturing of defense parts by -- it would be 19% by 2035. So it's actually really starting to happen now and get implemented as well. And I think on that note as well, as we're a Swedish company, Sweden also announced this month, it plans to increase its defense budget by 18% next year, it would bring a total budget of SEK 175 billion for specific equipment priorities in air defense, combat vehicles and among other things. But I think it's also interesting when you read is that the Swedish government also said that it's prioritizing investments in research and advanced technology. And I think this is really promising for a company like Freemelt as well. If we look into the energy numbers, and these numbers are only Fusion. I think Arun will come back to some numbers later as well. But we also exposed to land turbines, for instance, where E-PBF can print turbine blades, for instance. This is the same kind of principle like for air engines. Why? For instance, GE acquired Arcam back in 2016 as well. The last vertical is medtech, and this is orthopedic implants specifically. This is also under structural growth as the global population becomes older but also richer and the more people demand or are prepared to pay for surgeries for orthopedic -- new orthopedic implants. And then if we look then at 2024, almost 5 million implants were manufactured. And I think it was approximately 5% of those 5 million that was manufacturing through AM. With that said, this is an industry that has already started to swap into AM. So the industry expected to be 20% of the total manufactured implants by 2032 that will be through AM. So it's also happening. A short update on some of the bigger projects that we have shared externally. Let's start with Saab, where we have 2 ongoing projects, one directly between Freemelt and Saab and one indirectly, which is actually, together with Linköping University and Vinnova. The focus is on pure copper and both projects that are aligned in one way or the other. The direct project, which is in Phase II, is running according to plan and the Vinnova project will be ongoing until early 2026. Regarding one of the other prestige products, Fusion for Energy, which is the European part of Ether, we are making great progress and have already entered in Phase II. This is about tungsten tiles for plasma facing wall and also to join other materials as well to lead out the heat efficiently from the plasma facing part of the reactor. And I think this is a great example where additive manufacturing in this case, electron beam part of the future adds its maximize value. First, you have the design freedom. Secondly, you have a hot and clean process, which really gives you the most functional part with the highest material properties as well. And Arun will come back to this a bit later as well. Regarding the implant OEMs, one of the clients have the e-MELT machine in operation at their production site, and they are performing a proof of concept as we speak. This is a customer with a lot of experience when it comes to additive manufacturing, including Electron Beam Powder Bed Fusion. Why this is more of a benchmark rather than to see if additive manufacturing is a technology that they will go for or not. So -- maybe also to just keep in mind that this is also a regulatory industry, while the process that they establish also has to be approved by FDA. So here, I think we can expect some tangible updates during the second half of 2026. I understand that it can be a bit difficult to grasp what business opportunity that is behind those different projects that we are communicating about. So that's why I want to give you 2 examples and give you some context of, first, when it comes to Fusion. So here, in a very positive scenario over time to produce the amount of products that this client would have a need of that would drive at least more than 70 machines, and this is e-MELT machines. What is also positive here is that also it will generate good aftermarket business, which is important for us, which has a really transactional business at the moment. This industry has, at this moment, a low adoption. They do a lot of traditional manufacturing. So low adoption to AM, but this is also something that is changing while we also spend a lot of time together with those companies and trying to also showcase the capabilities and value through additive. The other one is medtech and implant OEM. So here, as I said, this is a proof of concept. Also in a really positive scenario over a long period of time, that would also drive more than 100 machines. Again, good capital sales over time. And thirdly, I mean, very good aftermarket business as well. This is an industry with high adoption to reality manufacturing. So just 2 examples to give you some more context. So with that said, let's zoom in on the first focus here of Fusion Energy, and it's a great pleasure then once again to welcome Professor Arun Bhattacharya and I think you will see some really exciting insights regarding fusion energy and how also AM can play a role in that development. So please, Arun.

Yes. Thanks, Daniel. Hi, everyone. I am Arun Bhattacharya, I'm Chair in Fusion Energy at the University of Birmingham I'm also the Director of Research for the School of Metallurgy and Materials and Co-Director for the so-called fusion engineering, CDT. And I'm happy to announce that I would be joining Freemelt as the Board of Advisers. I think this is the right methodology, the AM methodology that we have to adopt to make fusion a reality. But in the next few slides, what I would do is I would take an objective approach to highlight that this is the fusion era, 60s and 70s was the rocket age. This is the age of fusion, and it is starting now. And I'll convince you from some sort of technical perspective that, that is the case. But before I go ahead a little bit about myself, I started my career in France with the European fusion development agreement at CEA. I am a nuclear material structural materials person, and it was all related to fusion structural applications, had a bit of a stay in Tata steels on steel metallurgy and manufacturing and in the electron microscopy. They didn't particularly like that as I like National Labs better. So I was -- I then went to Oak Ridge National Lab with the U.S. Department of Energy and for several years and I was leading materials testing and R&D campaign for U.S. Department of Energy's nuclear energy program, Fusion Energy Sciences program, U.S. Japan partnership on materials testing and qualification for Fusion, U.S. Korea program. And also in my last year at Oak Ridge, I set up the partnership between Oak Ridge and U.K. Atomic Energy Authority, regarding materials testing and qualification for U.K.'s own fusion reactor program called STEP. At the back of that, I came to the U.K. to the U.K. Atomic Energy Authority as the Chief Technologist in Fusion Materials. And now this is my entry into so-called traditional academic style research at the University of Birmingham and with the view of aligning university Fusion R&D to the needs of the industry. Next slide, Daniel. So briefly, what is Fusion? Fusion typically happens by fusing hydrogen isotopes. And the classic example that you see is our Sun which fuses 2 helium and hydrogen isotopes together to power your Sun and you enjoy that Sun while you go on holidays on the beaches. We are trying to do exactly the same thing on Earth. But the problem is Earth is much smaller. It does not have the gravitational power that Sun has. So how on Earth do we fuse these tiny hydrogen isotopes to produce tremendous amount of energy? This is obtained in these devices known as Tokamaks and Stellerators, which are essentially magnetic cages. So you use very strong magnetic fields, very, very high temperature, million degree Celsius to fuse them together. I always say to people, "I wish my problem was Sun, because Sun is only 5 million degrees Celsius. If you want to do Fusion on Earth, you need 100 million degrees Celsius and above." But we are getting there. It is done by 2 isotopes of hydrogen, Deuterium and Tritium. Deuterium is abundant seawater, but Tritium is the scarce fusion fuel. It's a radioactive isotope of hydrogen that the fusion needs to breed together. Next slide, Daniel. So are we there? Is many people ask me, infusions several years ago that it has been a topic for discussion for decades now. Why are we not there yet? I would leave that for the open question. But what you are seeing on your screen right now is a successful demonstration of 100 million-degree Celsius plasma in a spherical tokamak. And this was not achieved by a very well-funded governmental program. This was achieved by a start-up private fusion company in the United Kingdom. And that's where I say folks, welcome to the exciting Fusion future. It is not happening in governmental programs, it is happening with the private fusion, and we are just there. The figure on the right is the colored figure of the plasma. You can see the beautiful DD plasma. But you could also see the center line, which attacks the plasma facing components, which is quite illuminated and then you could immediately tell by that, that where I'm getting it with it in the next few slides. Next, Daniel. So a bit in numbers. If you are unaware of Fusion, I urge you to have a look at the Fusion Industry Association reports. They really publish beautiful reports regarding the state of the industry right now. But the most important point to note is that most people in the nuclear community and in the fusion community does believe this is the fusion age. And somehow the geopolitical situation is helping us to get there. But at the moment, there is about almost $10 billion in private capital that has been invested in -- by fusion companies by venture capitalists across. Majority of them tends to be in the United States, but it is spreading across the world, particularly in China and in EU. And it has seen a dramatic growth in the last 10 years, but certainly in the last 5 years. And the figure on the right highlights the number of companies that have propped up from 1985 until now. So in the beginning, even up to year 2000, there was really not much happening. And now there is several high-value companies funded by very important people folks like Sam Altman, companies like Microsoft, Google, they are funding Fusion because they know this is the future. This is where things have to happen. So over a time of about 10 years, where there were practically 0 Fusion companies. At the moment, if my memory serves me well, we are close to about 55 global fusion companies trying to get there, trying to be the first one to achieve that. And just to put it in context, at the moment, up to about 1 year ago, the public funding for Fusion was about roughly $800 million, whereas the private is about $10 million -- $10 billion, it's about 10x more funding in private fusion compared to the public programs. Next slide, Daniel. And this -- just to highlight that now that there is so much desire from private, government is waking up from their sleep, basically. And right now, U.K. has launched its own Tokamak program, a reactor program known as STEP, Spherical Tokamak for Energy Production which has been recently funded $2.5 billion for its first phase for development of a fusion pilot plant in an old coal power station. U.S. has a very large public private partnership with about $8 billion of the private capital lying there and then the annual U.S. Department of Energy budget always hovers around $0.5 billion per year. I am in Japan attending the most important fusion conference in the world and U.S. Department of Energy announced drastic increase in funding for Fusion at the moment. And we are seeing similar sentiments from Euratom in Europe, where the 2028 budget is significantly higher, about $6 billion. And out of that $5.4 billion is earmarked for fusion. So even government programs are trying to catch up to the growth in the private sector. Next slide, Daniel. But an important point to note is that fusion engineering is not like a regular engineering. I mean they talk about rocket engines and this and that, yes, if you ask two people like me, it's easy. Fusion is the definition of mega scale engineering and mega scale engineering brings mega scale, investment and growth opportunities. What you're seeing on your screen is the artist rendering to scale of ITER, which is, at the moment, the world's largest fusion program, and you can compare that to this tiny human you could see probably in the front of your figure. And the figure on the right is the actual sector of the vacuum vessel that has been installed at Aix-en-Provence in France. So you could see the size of these things. These are mammoth, gigantic instruments, but they require millimeter precision. So technology developments in materials and manufacturing is the only way to get there. Now not only they are big the operating conditions inside the fusion reactors are one of the most severe you will ever see. And that I'll show in the next slide. Daniel? So what you are seeing here the figure on the left is a bit technical. So please ignore if I use some jargons. But the most important thing for you to note is that Sun's surface has about 100 megawatts per meter square heat flux that often rocket nozzles atmospheric reentry vehicles experience when they enter Earth's surface, but they experience it for really short time. Fusion components will see that heat flux for a really, really long periods of time. This means the materials and the components must survive that. And at the same time, have a look at the line which says disruptions and helms. These are like solar flares. Of course, you are trying to encapsulate sun on earth, it would have solar flares. These are not called solar flares, so please don't use that word, but these are disruptions and helms and they can cause severe damage to your structural components. They can impact gigawatts of heat. It's like lightning hitting your material. So that means we must design materials and components which are resilient to this amount of heat impinging. And at the same time, you saw the video that I showed before that not only you have heat, you have plasma, which has been created and plasma is particle, these are gases. They are hitting your component, in this case, tungsten and slowly, you are eroding it, you're destroying it. So we require materials that can sustain the heat and then also can sustain the particle fluxes inside the plasma, without any loss of fusion fuel because Tritium is expensive. So at the moment, that material has been chosen to be tungsten by the international nuclear community. Daniel, next slide. So with this, I come to a very important point here, and maybe it's a take-home message for you all that Fusion Energy will not happen. If we do not solve the plasma facing component problem. And at that moment, that problem is tungsten. We have to have components which show high performance and also in complicated shapes. So the figure on the left is the Wendelstein-7 stellarator geometry. Several companies are using this as they tend to be better than Tokamaks. So you've got to be able to generate these geometries, which is not possible by a traditional way of manufacturing tungsten. So AM is the way to go. So we did some work with Freemelt. You see the figure that is in the middle. These are some tiles that we had produced for our test campaign. And in partnership with Freemelt, we tested them using world's best fusion facilities, which is the DIII-D Tokamak in the United States and PSI-2 Linear Plasma Device in Julich in Germany. And what they allow you to do is to test materials and components to extreme heats and extreme particle loading that you would see in the real reactor conditions without the presence of neutrons. And we have some really good results that we have shown here in ICFRM conference that is stimulating a tremendous amount of discussion. So I expect Daniel's phone ringing buzz buzz next week. Daniel, do you want to move on to the next slide? So a brief of maybe a climax that I want to give a slight improvement is, as I said, we have to have Tungsten and plasma facing components work better. They must sustain heat. They must not fail. But at the same time, I mentioned to you that we operate Deuterium and Tritium as the fusion fuel. Tritium is very, very expensive because it's scarce. So Fusion must breed its own Tritium and it is so scarce that even nanograms of it would be controlled in extremely severe quantities. And one of the problems is tungsten traps Tritium. And once it goes in there, it is hydrogen isotope, it could diffuse to other sections of a reactor and then you lose it, which means slowly, you might lose Tritium and then your Tritium economy is just not economical to have running it in Tritium where Tritium is getting lost. So we need plasma facing components, which does not absorb Tritium compared to pure Tungsten. Here, we tested 3 mills material in PSI-2 Linear plasma device. And what we notice is that in AM Tungsten with Freemelt technology, we get about 30% less fuel retention in the plasma facing components. In my view, this is game-changing for fusion industry and also for the Tritium economy. This is getting a lot of attention. I'm pasting that nice 80s looking logo from ICFRM. It's really -- believe me, the conference is happening right now. We chose those colors just to make it a bit more -- look more sexy. And people are interested, community is interested. And actually, this is where we need to go. We need to go towards development of materials and technologies which can minimize fuel retention because then you have more fuel available, and hence, you run your reactor longer. Just for everybody to see, at the bottom, there is a scanning electron microscopy image which gives nice beautiful surface features and we have formed these beautiful hills and valleys. And I come from the mountain parts of India. So I'm used to hills and valleys. And this is caused by plasma exposure on the surface of tungsten. So you go completely flat. And when you expose it to plasma, and you create these hills and valleys. With that, I would conclude my talk, and I'll be happy to take any questions that you have.

Thank you so much, Arun. Very exciting. And I hope that everyone on the call as well appreciates some further insight regarded fusion as such, but also what happens behind the scenes when we talk about that we work in Fusion and what we do within that space as well. So thanks, once again, Arun. Okay. Let's move into our second focus here for today's event, which is China. So as I said before, we have the ambition to become the leader of E-PBF solutions globally. And yes, then we need to enter the fastest growing AM market as well. Personally, and maybe it's more me as well, I think there is still a lot of perception of China being a high labor-intensive manufacturing country and maybe it is for some industries. But China actually has one of the highest adoption rates when it comes to transition into additive manufacturing in the ED factories actual globally. Another key reason for the timing for us was that also China announced that they also will take an active role in Fusion Energy development. And this is a push part of China's broader strategy to achieve energy independence and also to be a leading development of clean energy, which also Arun mentioned a bit before as well. So Freemelt we have a good position, and we have technology that is highly beneficial to manufacture certain parts, as Arun also mentioned, within this application. And lastly, China is also having a rapid increase, let's say, population that has the capabilities money-wise, et cetera, to also expect and demand to get replacement of hips, knees, et cetera, why the orthopedic implant market in China is also growing substantially. And so these were the 2 main reasons for us from a timing point of view to enter China. Last week, maybe you've seen on -- if you follow Freemelt on LinkedIn, you have seen that we've made some updates from last week. I together with [ Pat ] and Viktor, were in China, where our partner Julich, organized the customer event and, let's say, official kickoff. This is my first visit to China as the pandemic and I would say that my first impression already from arriving at the airport than traveling in the taxi on the highway and then to visiting several of the factories that Julich is operating was, first of all, efficiency, second electrification and thirdly, digitization. So the customer event as such was well represented by prospects in China, representing actually all the categories of academia, Medtech and Energy. I would say that the -- it was a very good engagement, a lot of interest regarding Freemelt and the technology. And what I also learned is how strategic and long-term oriented that the Chinese companies are when they invest in a new strategic area they always raise high ambitions, but I think they also saw always commit highly as well. So if you take Julich, for instance, they really invest for 2 decades ahead and always claim -- or aim sorry, to be a leader in their niche as well. And before we formalize the decision to enter China, we, of course, also made an assessment regarding any, let's say, concerns to technology, et cetera, that could occur while starting to sell products into China. And one of the key mitigations was to find a partner with successful experience in working internationally. We also aim to find some with, let's say, mutual interest on keeping the technology close to its chest and also to be able to have it as a unique selling point towards competition. And yes, the reward though, is really big. So if I would wrap up, so Freemelt as a company, I mean, we are scaling up, I think it really now showcase, we have 40 machines sold in total. We have 12 only in 2025. So we have breakthroughs in all our focus areas. We also see it in the numbers in 2025, both from order intake, but also from sales. We have established an operating model and a business structure now to really establish a sustainable, profitable growth as a company. The industrialization part has also started. We took a very strategic decision to outsource our assembly to really get the more agile supply chain during this growth journey. And I think what Arun really put some really nice words on and light too as well is after years of development, Fusion is happening now and Fusion test reactors are built worldwide. There is, let's say, a strategic race and competition out there to really be the first one to commercialize this now. And we have a technology that really adds a critical value for that application as well. Also after years of development, I think it's clear in China. I mean it's an industry that is really becoming advanced and also digital and also adopting additive manufacturing, so therefore, we're also now entering into China. And also at the years of development from additive manufacturing, I mean, it's been 30 years, a bit more than 30 years. It's been struggling. It's been most focused on prototype printing, but maybe not as much on serial production. Now new technology development, also market consolidation has happened and is happening and with the geopolitical situation that is giving the technology more tailwind as well. So with that said, we open up for questions.

Thank you so much for the presentation, Daniel. We have received a lot of questions, so we'll get started here right away. And the first one here is for Martin. What is the runway with current funding? Can we expect another rights issue?

Well, the company has sufficient funds to execute the business plan. And as I explained, there's a tail of financing coming in, in June 2026. And I mean, as opportunities arise, we will evaluate our financing strategy going forward. But that's, I think, what I can say on that point.

Thank you. Another question for you here as well. In what way does U.S. tariffs impact Freemelt sales?

Yes. So beginning of the year, we had the new situation with tariffs. Freemelt typically quotes all our machines, excluding tariffs, meaning that the customer bears the burden of the tariffs. It is, of course, a little bit too early. We think we have good pricing power, but it is a little bit too early to state whether this is the case or not. So it's something we'll have to see how it plays out going forward.

Another question here is for Arun. Thanks for a very interesting presentation. Given that Fusion has been under development for many years and always been 30 years away, what milestone or breakthroughs have been achieved now to succeed commercially?

Several. Let me address the first question on why it has been 30 years away. It has been 30 years away because there was no desire to do it. In the fusion community, we could have done this in the '90s, the historically low oil prices in the U.S. meant that nuclear technologies were deprioritized at that time. U.S. program went from Fusion Energy to Fusion Energy Sciences program. At the moment, there are several breakthroughs that have happened. One of the most important one is diverter, the power exhaust technology, which is where tungsten is needed. We didn't have a solution even up to 20 years ago to hold these components in place in such heat at the moment that has been developed. The second really key technology is the development of high-temperature super conducting magnets. What they have done is they have reduced the size of the reactors significantly so that then they could be deployed in areas where you would not have thought a fusion reactor could be built. So HTS combined with the development in -- of diverted technology is what is really driving it. The third non-negligible case is the growth in the AI sector, which is solving the problems of plasma instabilities, better understanding, heat flux management and so on and so forth. And to a lesser extent, actually, manufacturing has also played a role. There were components that we couldn't have thought could be built 15, 20 years ago. Now we can, with conventional methods, but also by additive methods. So there are several factors. I could go on and on about it as there are so much that has happened, these are the ones that I would say are probably the key. But we also have to put the geopolitical context. Whatever is happening in Ukraine right now has highlighted the need for alternative energy secure technologies, which are energy dense and that energy density matters a lot. Hence, that is fission infusion. Fission always has the bad rep with the waste and whatnot. And Fusion is the ultimate Holy Grail and we are just there. The only thing that is remaining is the component design aspect, which is where organizations like Freemelt and the universities and manufacturers are helping get there faster.

Another question here for you as well. You don't mention the mirror technology infusion. Why is that? Is it really game changing to get 30% less Tritium fuel retention? Don't you need almost a 100% hit rate of the Tritium to fuse atoms in order to make the fusion process economical? A long question there. I hope you got it all.

I think I got it, but let me answer it this way. Yes, good question. The most important thing in fusion is to extract Tritium out. So majority of the tritium when fusion is happening is not in the plasma. It is in the wall. And the more you have it in the wall, the more our chances of losing that tritium into the other sectors because it is a hydrogen isotope it would diffuse out. Hence, you really want evolve that does not retain Tritium. Majority of our experimental fusion power plants are made from graphite. Why is that not commercial? Why are we going towards Tungsten? Graphite doesn't really melt. That's because graphite captures Tritium, it forms hydrocarbons. So if you have a high retaining wall, you don't have the fuel in the plasma, you have fuel in the wall. So you've got to have fuel in the plasma to be able to cause the plasma. Rest everything else comes later, how you heat the plasma, what are the different things that one needs to do, how you extract the heat out, but you ought to have the fuel to be able to do that. With the current devices, the fuel isn't going into the plasma. So you have to have always more than what is needed. When you have less fuel in your structure when you have less fuel in your wall, you can end up having a completely full fuel cycle where you never have to buy Tritium ever again from places like Canada you just need that initial uptick of Tritium to just restart your reactor. That's about it.

Another question here, and this one is for Daniel. Regarding the business opportunity with a medtech company is the potential of 120 machines based on Freemelt replacing current manufacturing methods or rather than the customer future growth. Also, does the company already use AM?

Good question. So in this case, it's actually based on new application and future growth, so not replacing. And the other part can you repeat what was the second part of the question?

I think it was -- and also does the company already use AM?

Yes. Yes, this is a highly experienced customer using additive manufacturing currently, yes.

And another question for you as well. What do you think about the problems for additive manufacturing to become competitive when it comes to production in large scale?

Yes. As I said before, personally, I think one of the big challenges has been the -- this industry has been too technology focused, not as customer-focused as it should, which means that the technology has been -- I think someone said once that additive manufacturing has been like a Swiss army knife, can do a lot of things good but not great. So -- the key thing is actually to first focus on the customers' challenge in the operations. Secondly, to integrate additive manufacturing as a part of the production line as well. And we believe that one of the issues is that how these machines has been designed in the past where you need to -- first, before the print, you block the machine, you don't work at the machine, you do all the preparation, which means this machine cannot produce parts. Secondly, after when the machine has been finished a print, it's standard to cool down for many hours as well, which means you block the machine. So the cycle times has been too long, which means the machine has been -- has not been enough available for production, which means that the productivity is not good enough and then the cost to produce is too high. So I think that is the challenge we have tried to focus on to really get down the cost. I think another part has been about the powder costs as well. And I think this is also another area which I haven't mentioned, but we also have a unique capability of using pretty much any kind of powder. And we work with Sandvik, for instance, with chemically reduced powder, which would also reduce the price substantially. So again, focus on the production process, focused more on short and down the cycle times and then we get the reduction in cost of powder, then we will be definitely up to compete with traditional manufacture or even, let's say, commodity kind of items and not just highly complex items.

Another question for you here. Regarding sourcing, do you have a dual sourcing of the most important components and subsystems?

That's a very good question. Yes, we have tried to find dual source for the majority of the of the key components. And we have also tried to get as many, let's say, standard items as well as possible to avoid to end up in only a few, let's say, sources of key components.

And now we have a question for Martin here. Why has the proposal been put forward to issue additional employee stock options? And why is the strike at SEK 2.5? It can be indicated as a very, very low. Are there low beliefs in the company's potential? Or could you add some color to that?

Right. So this is a follow-up from the incentive scheme that was decided at the AGM in May 2025. So what happened was that there was a decision, the -- and then when the scheme was implemented, the share price rallied during the summer, which made it impossible to fully implement the scheme as it was decided. So therefore, some of the largest shareholders put forward a proposal to complement the previous scheme, and that's also why the terms are aligned as far as possible with the previous scheme. And that's up for a decision then on the extraordinary general meeting on October 8. There's also a second component to the proposal, and this is a new addition, and that's a proposal where there will be an incentive scheme also for the Chairman of the Board.

To sum it up here with the last question for Daniel. We saw a healthy inflow of orders during the summer, but now it's a bit quieter. What does the sales funnel look like and what can we expect here?

Yes. I mean we -- for sure, we had a strong first half of 2025 and a somewhat softer start of the second half. Having that said, I think the pipeline looks healthy and promising. And then definitely geopolitical situation is also helping even with an interest and increased demand for material research and also for the industrial applications. So -- but I think we still have a transactional business why it will vary between the quarters as well.

Thank you so much. That was all the questions we have received. So thank you so much for presenting here today and answering all questions.

And thank you, everyone, for listening in and for your interest. I hope it was valuable for you. And as I said, initially, I mean, if you have any feedback regarding this moving forward, let us know and we'll try to adjust accordingly as well. Have a nice day. Thank you very much.

Thank you very much.

Bye. Thank you.