Barclays PLC Price & Performance (BCS)

The world's massive electrification transformation needs more batteries. As the global battery demand will significantly increase, until 02/1930. The global increase in the battery market which we have just seen the start of, will take place regardless of the geopolitical uncertainty we now see. The growth will also be based upon an increased focus going forward on developing a sustainable and locally battery value chain. Morve has good fundamentals for production of critical battery components based on our long term sophisticated material knowledge. And process experience from other industries. And the fundamentals of our process is simple and based on exactly that, splitting the CO2 into Bergen, and carbon through an electrolysis process, emitting the oxygen and harvesting the carbon on the cathode side of the process. We do this by consuming CO2 And with less power than by conventional production, of carbon, where we are where it's emitted CO2. It's simple. But it's difficult Development of cheaper and more effective batteries is ongoing on a global scale. New chemistries are continuously being developed with the aim to develop more energy storage per unit weight. C and T is a key component for all this. An important element in many of these new chemistries. [indiscernible] we know that demand will increase.

And the CNT is a conductive agent increasing the battery's conductivity which makes the battery faster to charge and more durable. Our technology is novel, It's sustainable, and offers a local alternative to the C and T production taking place globally today. And the electricity consumption is a fraction existing production methods, and in a scaled production implementing over new process steps, We believe we can compete on cost. In a geopolitical context, Bergen Carbon Solution basically ticks all the boxes. In a world where the price for CO2 emissions will probably increase and protective incentives for sustainable and local production will stimulate industries like ours The battery value chain is a true global industry with many players. Here, we have listed some of them. Areas: raw materials, materials processing, cell components, cell manufacturing, and system assembly. And it's important to know, BCS is an upstream company in this value chain. We are a raw material supplier. Providing critical material potentially to all the four subsequent downstream areas shown here. And this picture is just a snapshot of some of the companies in the value chain. Hook comes, for instance, as a chemical company, is typically within material processing. While Moro and beyond are typically cell manufacturing companies.

This means that our client ecosystem is massive with a huge number of potential of takers. Where we could go from drop in replacement of our green carbon into a fossil blend for processing or sell component company. Or as critically sustainable material towards the cell manufacturer or assemblers themselves. And all they all need active and conductive additives to improve the battery's performance and the greener and the more low Klipsch produced, the better. A recent contract award to a local player providing sustainable anode raw material for a large American automobile manufacturer is definitely [indiscernible] Proof of this Another long term aspect of the benefit of being to the left on this chart is the flexibility towards new technologies As the continuous change in battery chemistries will call from Modvik manufacturing, with consequential higher CapEx the longer to the right you go on this chart. I think it's prudent to state that this is a complex and new value chain to not only in the region, industry, but to a certain degree also European industry. Many players have internal vertical value chains. And many have focused today on completion of their large CapEx investments rather than exploring the potential of new value change.

We believe this will change, That's why we have been active presenting on a number of events and conferences, resulting in dialogue with more than 35 companies [indiscernible] Which is only snapshot of the massive client universe we can see. The potential here, we believe, is enormous. As a consequence of my previous slide, and by the fact that we have a number of potential partners, and clients in the carbon raw material space, we have been accepted as a member of the European Advanced Carbon and Graphite Material Association. This association of the European carbon value chain aims to build a competence with a global goal of delivering European Carbon. We believe this can be beneficial for us going forward and we will have our meeting during this spring. Electrification through the global growth in the battery market is indeed a megatrend. A megatrends are always important to watch Never take your eyes away from that. In five years from now, 50% of all new cars sold are electric vehicles, on the global scale In Europe alone, it's 70% and in China, 90%. Today, there are a fair competition with falling prices and oversupply of batteries. And the global battery value chain is dominantly totally by China.

However, we anticipate the global growth the battery oversupply is considered by most to be temporarily. With a global geopolitical situation, local actions will be taken to aim to reduce the substantial [indiscernible] [indiscernible] To assume that European and U. S. Players in the battery value chain will succeed And at the Western battery supply chain, will not be a copy of the collapsed Western solar industry we saw for some years back. Then will go through 2024 highlights. So I'm actually very satisfied to summarize the key developments which took place last year. [indiscernible] of new small and medium scale electrolyzer cells for increasing our ability to development and speed up the development for a well defined and consistent carbon powder. We progressed on advanced electrolyte recycling and the purification process and the were kicking off the battery lab in house and we have actually produced more than 100 coin cell batteries during last year. We strengthened our financial position and [indiscernible] By reducing burn rate through old 2024, we have now seen a percent cut relative to 25% due to cost reduction. And organizational reshaping. Achieving a higher efficiency with fewer employees. We secured NOK 14,000,000 from Scott DeFun, funded over three years and additional support from Inertjol, Nordge, We signed LOIs with Moro batteries and beyond and extended over existing MoU with [indiscernible] our financial numbers presented here confirms no need for further [indiscernible] As we continue to have the finances In [indiscernible] on our strategy.

We're showing here a 23% reduced yearly cash burn rate from 2024 to 2025, [indiscernible] the need for CapEx going forward is very limited. So the cash burn in this last quarter is NOK 13,300,000.0, and this corresponds to NOK 3,300,000.0 quarterly cash burn reduction compared to Q4 in 2023. We still have a solid cash position of 170,000,000. Still zero debts and a satisfactory equity position. In addition to the NOK 14,000,000 from Scott DeFern, we are continuously working on other relevant funding opportunities. Then an update of the technology development work we do. During 2024, we announced two intentional technology agreements with Moro and Beyonder. The parties believe that a local high quality raw material supply of tailor made carbon products, produced with our CO2 consuming production process could actually become one of the most valued competitive going forward, Following completion of their ongoing ramp up and market penetration based on their existing battery MSGs we anticipate to start testing an evaluation of over carbon powder within new and adjusted battery chemistries going forward. The one year extension of the HOKEMES MOU is definitely a clear sign of interest to our technology despite our delays [indiscernible] their specifications.

We have previously announced several types, VCS progress is currently being monitored by Hukentz as part of the current agreement. The Broadbit project is currently closed However, further development tests will be conducted internally in our own battery lab. At a different domestic academic institution, in Oslo, Bergen and Trondheim Bergen, are conducting various tests specialized equipment and experiments. This work will be strengthened from our side. As it's also key for participation into future funding initiatives. The degree of cooperation between the players in the Norwegian battery industry was in 2024 strengthened. [indiscernible] very much by general common interest [indiscernible] And the intention is to strengthen the cooperation in the industry and bringing new and sustainable carbon materials into the next generation battery market Joint research projects [indiscernible] on the development of next generation sodium ion batteries. Is progressing well. Our polders is evaluated as potential conductive additives in their chemistries. Setup will bring valuable feedback on the performance of our potters and propose next step. As well as intelligence. On other materials. For this, it's very interesting for next generation battery chemistry. In end of twenty twenty two, we changed our strategy. As we have talked a lot about that.

And as part of this change to strategy, where we moved away from targeting production for general copper market for a wide number of applications We move towards being a technology development provider, focusing towards the battery market. So this is a growing sustainable, high end market. With a high entry barrier but also high willingness to pay for the right quality. Investment into battery lab and smaller cell testing equipment has enabled us to reduce [indiscernible] and significantly speed up the development work much faster feedback loop of our test results. We are now a technology development company. We are not a production company. That's important message This has required new skill sets and competences. No focusing 100% towards our core technology process. So today, we have a steady headcount of 22 That is actually a 35% reduction in fifteen months. And I would say humbly that we have never progressed over development work than we do today. And here is a picture of most of the Technology Group. Headled up by our temporary CTO, Eritha Glene, supported by our two technology managers, [indiscernible] This is a technology leadership team with massive relevant relevant competency. And industrial experience. This is just what we need.

BCS' ability to attract young talent I would say now, is undisputable. Can offer an attractive sustainable technology solution to young engineers. And I'm very pleased with this team. And I'm confident that they formed a competence base we need to build the company going forward. Producing CNT is difficult, and it's all about size and form. As small particles as possible with as much surface as possible. Thousand times thinner than the hair, 10 to 100 nanometers diameter with a surface area of 100 to 200 square meter per gram. The vast majority of all major battery chemistries today contain CNT, and it's today produced fossil based in China, as I've said several times. So for us now, it's still all about further developing our technology. [indiscernible] here into three stages. First, transforming the CO2 into solid carbon through over electrolysis process. Achieving a stable and well defined technology platform, by optimizing the input parameters. Secondly, the post electrolysis phase. Defined by separation and filtering out the carbon as well as cleaning of the electrolyte, enabling full recycling. This is very important for a total OpEx picture. Thirdly, testing out our carbon products product in different battery chemistries In order to verify and benchmark benchmark overproduct versus the market can offer.

The first and most important step here is obviously the electrolysis. And for this equipment, it's all about operability. It's all about size. And it's all about speed. The smaller volume we tested, the faster we get results. And the cheaper So during 2024, we have been investing into new equipment [indiscernible] same principal function, but for slightly different purposes. [indiscernible] fundamental studies in the smallest unit, the microcell. For further technology verification, And the Selvie Bergen mostly for the time being. The use is the lab cell, which has a volume of four liters. Here, we now harvest the results of two runs per day, seven days per week. And from this unit, great leaps our technical progress. In addition, we now have a 40 liter scale cell ready and commissioned. Where we will do pre pilot testing and work to monitor larger volumes when we are ready. For more extensive volume testing, we can use our Handelita production cell. However, this is not used much for the time being. We expect that this equipment setup is for us to conclude on our technology platform going forward. And as such, we do not expect further major investments. So it's important to note that we are focusing on quality and we're not focusing on volume.

In terms of production. Our second step, we applied a separation unit. To separate carbon from the electrolyte. And subsequently rinse this and recycle the electrolyte. And we have not developed a method a more than 95% electrolyte recycling, cutting costs and definitely increasing our competitiveness. We have filed a patent on this, and that's progressed. Both in Norway and globally. In our final step, the Battery Lab, have equipment for testing our polders, in different applications. The lab will allow us to conduct in house cell manufacturing and performance testing, significantly reducing development time and time to market. Previously, that loop took many months. As we know, our down to two weeks Material testing and production of battery cells has started we have successfully fabricated more than two more than 100 test cells. And this initiative is a training ground and a showroom, I would say, for innovation and indeed welcomed among key stakeholders we talked to. And further news from the Battery Lab will be available on our webpage as we progress. And together with our industrial partners, we have worked with several of the dominating cathode technologies including LFP and NMC. Initial tests show good results with our powder into LFP chemistries.

Is a chemistry With the increased global footprint. There will be a blend of different chemistries for a number of varying applications going forward. And one of them one of these chemistries that we have pinned down as a high potential is lithium [indiscernible] While this is not a very commercially ready chemistry yet, some of the unique characteristics of ore materials add much value to this final product. And may help overcome some of the challenges [indiscernible] to commercialization of this battery chemistry. And we have recently conducted initial battery cell performance test carbon powder with, I would say, promising results. And also to learn more on this progress, we will ask you to look on our web pages. So we continuously develop our technology in all aspects I would say, of our process. Our testing shows steady improvements However, our process still [indiscernible] To create a consistent and well defined powder in order to meet the quality requirements from the industry. This is also what we have said in previously quarter presentations, So we are not there today. That we are meeting all the market specs. For the battery industry. This is a novel technology process is complex and has taken longer time to develop than we expect.

But we are narrowing in on the process. Window by exploring optimized routes also close in on the specs. The technology barrier is high. But so is the reward when we are there. So I'm confident that we we do now is the right thing. That our efforts and our full focus towards our core technology is the correct priority. At 100%, our focus remains on the process quality An advancement in test equipment and speeding up the result of our [indiscernible] So in order to summarize, overall, I'm very satisfied with my team and what we have been able to achieve during 2024. And during the last two years, we have turned the company into a pure play technology development company, in line With the strategy towards developing carbon powders for the battery industry, So during the last year, I've seen a massive [indiscernible] cash burn rates achieved through organizational reshaping, fewer employees, did higher efficiency and lower [indiscernible] We secured funding from Scott DeFun, with additional funding applications ongoing as we speak. We have a steady on technology development focus with new scale electrolyte now commissioned, accelerating our process optimization speed, So I would say that we have cemented our strategic direction towards developing carbon powders for the battery industry.

So that concludes my presentation. Q and A. Thank you. [indiscernible] First, we would like to clarify that we do not comment on inquiries that are not directly addressed to the company. Additionally, we do not comment on unfounded rumors, speculations or matters that falls outside the scope of business for BCS. Question number one. Do the people around Odd have the right competency for BCS I mean, I just talked about 35% headcount reduction during the last fifteen months. So I would say the competence blend is definitely changed. I would say no, we do have the right competency. There are still room for improvements in terms of experience relevant industrial experience I would say that we are definitely an attractive employer. We are able to recruit talent So I'm very, very happy now with the team we have. With the complete focus on the core technology We don't have much resources now supporting expansion general engineering, So we have a completely different strategy there. So the answer is yes. Question number two.

The lack of media visibility, is this a deliberate strategy or a weakness? First of all, I would say that I would argue that we lack visibility I would say that we have participated in many visible events over last years. All the major conferences. We are a presenter We have been participating on many relevant events in Europe. Large event, But we are technology development company. We need to focus on the core process. And I think that there are probably strategic elements with our visibility, which is different than it was three, four years ago. But that is deliberate.

Focusing on the MAX on the most complex applications wouldn't it have made more sense to start with simpler applications to get to market faster?

Okay. This is a good question. I think the company was started off by looking at the general market with a lot of potential end products. I mean, we are looking to a market which has a 30% global growth per year. It's a huge market, with a dramatically increase. It's a difficult product, high entry barrier, But when we are staffing up, and qualifying our team, we will manage that technology entry barrier. And then we believe the reward is huge. High willingness to pay, But I think what's important to note is that the real driver for large scale [indiscernible] of multiple carbon nano tubes in the world is through batteries. So it is natural to focusing totally on that market. Then as a general comment, I will also say it's always a good strategy for a company to [indiscernible] The focus on what kind of products you are looking into. All kind of products will have their specifications. And requirements.

Have BC has reached any milestones or are they continuously being pushed forward into the future? I mean, what we are working on now is really It's simple and it's not that simple. We are developing a consistent and well defined powder. And in order to do that, we need to have full control or of a process, and that's what we're working on. I would say we are reaching small milestones every day But that is technology [indiscernible] We are talking to relevant clients every day. Some of them we announced, but most of them we have not. So I would say that we are working on internal milestones as part of a technology development company.

How does BCS envision scaling? After achieving their required specification what are the biggest challenges in moving from producing, let's say, 100 grams to a ton with consistent quality?

Today, as I said, are not producing for volume. You're producing very small amounts for testing verification purposes only. And again, developing a process for a consistent and well defined powder. And that's basically what we do. And for the and then to comment more on that, I'm not going to do.

It's always difficult to give predictions and forecasting for development company.

Yes. Previously, I mentioned that you're working with multiple customers. Have any of them withdraw? Or are you still in dialogue with with them all and potentially other players?

I think one of those pages we showed there today is quite interesting. It's a snapshot of the global value chain. I mean, there's a huge number of potential partners out there. And we are talking to a few. [indiscernible] process is continuing. And that's going well. But that is long processes. And at one point in time, we need to start qualifying the product with certain partners.

If our breakthrough is achieved. What will be the next steps in the development? Process.

I mean, a breakthrough for us now is achieving a process where we are repeatable basis, ABOL, to make consistent and well defined powder. I mean, that is basically to really get control over process. And that's what we're working on. And that is what we know will define as a breakthrough to really have control over our technology.

Yes, another one here. What is PCS main problem? Is it quality, price, technology, lack of qualified personnel funding, something else?

That was a big question. I wouldn't say that we have a problem. We have challenges. Of technical nature. We have the right team in place to handle it. Again, these are new technology frontiers You're not able to predict everything around next turn. But that is work we are doing on a gradual basis. And we're aiming to really again get full control of the process we're running.

Got it. And one our final question [indiscernible] similar amounts of resources internally on producing graphite? As CNT.

Today, we are focusing on the CNT as a product primarily. [indiscernible] that process window which we are now doing, will be applicable for many of these carbon alloys or products. [indiscernible] will be deterministic for a wide number of of carbon products. Just off, significantly, did you move more of the testing to partners or it's the battery lab [indiscernible] central in your would say that the battery lab is indeed very central. And it's getting more and more important for us. So that is no question about that. That one that's was investment we did last year. I mean, we have done a dramatic change in the mix of our stuff.

Much less for on expansion, general engineering, We are buying equipment much more on the off shelf type of philosophy versus previously where we designed it ourselves. Our OpEx cost is reduced by the fact that we are spending much less consumables of doing our tests since we are running much smaller test cells. And with our focus and with our new strategy, I think that we are in a much better position in terms of the number of headcounts we need to solve the problems we are working on.

You mentioned [indiscernible] [indiscernible] does this battery cells, do they work?

Well, they work. [indiscernible] Using our own carbon polder constructing the battery cells. And testing them and check out the battery's performance we do that versus other battery cells, which has commercially available carbon powders, which are made for sale. So we're checking our performance batteries with our CNT. Competition powders and benchmark performance. [indiscernible] focusing on lithium sulfur batteries.

Is this a relatively novel thing?

Yes. I mean, as I said, it's a better chemistry, which is not really commercialized yet, but I think the market did not view it as a massively high potential market with a high energy density. So we think that that type of chemistry will be the answer to many of the battery chemistries of tomorrow. So we have started off by testing out that chemistry, but now we are also testing other chemistries. We have just started LFP chemistry testing. So we will basically broaden our testing applications as we go along.

Do you see an historical commercialization of just this process or is that off the table now?

So I mean the commercialization element of it is the fact that we will be able to run our process much more cost effective. So is for internal purposes.

So the last thing I have to say is Scott Bloforden, a grant When will this be recorded as revenue?

Have you all ready for twenty twenty? That's the next for the next three years. Next three years. Did you some of it in the fourth quarter No, we did not. That's starting this year.

Okay. Thank you, Patna, for your questions. Patna Slungstahliv from Nordnes this, I I think if we have time, we have one more question from from our live audience that we can try to follow-up. Are you using the CNTs primarily as an additive for the anode or the cathode.

Primarily, it's for the cathode.

So that will form part of the chemistry mix on the cathode side, but there are also battery applications can use the CNT also as a as a mix into the anode side.

And our last question for today will be are you delivering this material, is it like a dry powder or in fluid or how how is it distributed?

Mean, we are producing it as a dry powder. And then we're mixing it to different fluid based solvents, I would say, in order to apply into the into the battery.

Okay. I think that concludes the Q and A. And therefore also the presentation. Thank you.