AnteoTech Limited (ADO) Earnings Call Transcript

Welcome to you all to AnteoTech's end of financial year 2025 Investor Update. I'm proud and excited to be here today having been formally appointed as MD CEO during the month. The last time you saw me, I was about 10 days into the interim role. And since then, it has been very busy. I can assure you of that. We've had, of course, the strategic review released where we underwent a restructure and took costs out of the business of around $1.6 million. We've had a very strong and serious focus on cash management with an ongoing corporate cost reduction program, and we accelerated our R& Tax rebate return of $2.6 million. And I thank the team for all of the effort that went into that. We have, as part of moving forward, we have changed the way we go to market. It's been pretty substantial, and we've got more work to do on our journey. But greater segmentation of our markets, greater productization, and you will have all seen that through the Ultranode, stepping out the different Ultranode product or formulation technologies that we have. We've updated our collateral. You will have also seen that through the white paper for the Life Sciences business unit that's on our website, and we are working on a similar document for our batteries business. And all of this has been part of a cultural shift for us to move towards being much more commercial sales-oriented company. We've got a new CRM going in, and that will help us to continue on that journey. The one thing is that we have done and we continue to do what we said we would do. We have entered new markets, the U.S. market and South Korea. We'll speak to you a bit more about that. And we've continued -- we are continuing to build where we've already got established markets. So India, obviously, very strongly from a life sciences perspective, and Europe with our battery business. I didn't want to move into the ongoing role as MD CEO until we had a really clear focus and plans in place and underway, and the team are working towards these. And really, that's where we're at. And over the past 12 weeks, the company has received significantly increased interest from customers, from potential partners, from potential strategic partners and around new products. So overall, AnteoTech is on a better course and has a bright future ahead. Today, I've selected for you some key slides out of the slide pack that we released this morning. And what I'll do is take you through that now and then take questions. So this is what I plan to cover with you. And well, we have a sort of starting point or recap for those who have been on this journey with us for a while. AnteoTech is a chemical and materials company with global reach and global sales. We have an expanding customer base, and we are in commercialization and revenue stage as a company. Our expertise, what we really do, which everybody asks me, what is it that you actually focus on, what's your core competency is our core competency lies in the application of chemicals and our cross-linking binders and patent protected into a range of different industries. And our focus, of course, is life sciences and the batteries market. What's really important about this is that we are able to get molecule to molecule. And in life science, bioconjugation is the term for that. And molecule to surface or substrate, very strong bonds on a molecule level. We're a team of 24 mainly based in Brisbane, and that comprises of scientists, sales professional and commercial analysts. And we're acknowledged -- as I get out into the market and spend more time with customers and potential strategic partners, we are acknowledged as leaders in the areas that we're in. On the -- specifically on the Life Sciences, again, just to close out the recap. We -- what we do and what we offer through our AnteoBind and AnteoBind NXT products is we've reduced customers' costs by reducing antibody usage and new tests -- new test development. And then we also can reduce costs in manufacturing by improving the workflow and assay reproducibility. What's really important here is, for example, the Serum Institute, our product is used in quality control across very large batches of vaccines. What's also important in the life sciences side with our product is it can be very specific, highly specific and sensitive, and that then allows in modern medicine, in the development of modern vaccines for it to be used reproducibly and for key decisions about people going into manufacture to be made. On the battery side, with our Anteo X product, it improves high silicon NI performance and as a result, improved battery performance. And we speak constantly to people about the next generation of batteries and where high silicon fits from a competitive advantage perspective around cost of production, performance, access to supply, raw materials and availability of that globally of the raw materials that we use, the silicon that we use. We reduced the costs of other additives that can be added into the anode, including carbon nanotubes and binders. On the Ultranode, and I've got Ultranode X here, but as everyone knows, we have a range of Ultranode formulations, we work with very high content silicon and target 30% increases in energy density. And that's very significant. That's very significant, for example, in terms of extending driving range for electric vehicles for the same-size battery pack. It can lead to us having smaller batteries or lighter batteries and faster charging longer run times. So in our strategic review, we're basically -- the blue is where we -- what we were already -- the markets we were already in, and the pink is what we've extended. Now that's been on a very targeted basis. So in India, of course, our major client is Serum Institute, and we continue to work with the Serum Institute. And we are using. We've been accepted into the export growth program by Austrade. We will be using Austrade, and we're already working with Trade Investment Queensland around expanding our channel -- our pipeline and our customer base. And we will work as well on -- in the battery space in India. That is -- to date, that hasn't been our focus. We've been focused in the U.S. where we've been -- we've done with Black Diamond structures, we've done a joint development agreement, which I'll come to in a moment and carbon nanotube. South Korea, we have announced on the battery side, we already have a distributor there for life sciences, but we've announced Kenshun as a distributor, and I just was on a phone call with our team, the battery team and their team on how we're moving -- how we're planning to move forward there. Europe. We continue to engage with WYON and other battery manufacturers in Europe. And on the Life Sciences side, we've actually reengaged with some very large big pharma companies around some of our products and our potential products. So again, operational highlights for the year. We've Black Diamond structures, joint venture -- joint development agreement which is around combining Anteo X with carbon nanotube dispersion technology that they have. And we will actually be visiting Austin, Texas, where their plant is in early October as part of attending the Detroit battery fair, battery expo, which we won't be exhibiting yet, but we are planning to be meeting with a range of potential customers, and we're very focused on that. In terms of WYON, the trialing of Ultranode is still underway. It's a very structured program there. And of course, there's a potential for Ultranode to go into commercial production of their miniature batteries, wearables, of course, of which one customer is cochlear. We're very pleased to be able to announce that we had achieved significant performance milestones around our Ultranode X product and formulation, technology formulation, close to 900 cycles at 80% capacity with the 70% silicon anodes. And we're very, very pleased that, that -- we've achieved that, that we know how to get to what is considered an industry benchmark of 1,000. On the Life Sciences side, we've also been working very well with this Serum Institute where we've actually been receiving orders above the level that we anticipated through the 5-year contract that was struck at the early part of this financial year. And we continue to work with Vid Care, which is a start-up company but they -- what we're very keen and very enthusiastic about there is that it's a platform. If we get into VidCare,we get in as a trusted supplier that could open the door to a number of different applications. So that is very important to us. As I said since the end of the financial year, we announced Kenshun for us to support us in South Korea and build off people who are -- or parties who have already contracted us and their extensive distribution base, and we're really looking forward to working with them, and we've had some good discussions already. And Mobius is -- which stands for molecular biosensor at point of use. The Mobius Australian research center hub was launched this month in -- hosted primarily by Latrobe University. It was opened by John Brumby and has received significant funding, and we were the first industry participant in that center. It's right in our sweet spot. And we're very pleased to be involved, and we're looking forward to seeing how -- with the -- what they do, which is research, development of biosensors and commercialization, how we can really seriously participate and leverage off what goes on there. What I wanted to move to now was just some high-level financials. So in terms of cost, we had a real reduction of 10%. And we -- as I said, we accelerated our R&D tax rebate. Obviously, we have a very keen focus on costs and we are seeking to get further cost reductions over the coming financial year. In terms of revenue, we doubled our revenue and very pleased to be able to say, of course, we are doing everything we have every effort for our continued growth in our revenue profile. So really, at this point, I would like to summarize by saying, we've got this chemical binding, chemical platform technology that has application in multiple industries and our products, which are in life sciences, which is AnteoBind and AnteoBind NXT and in batteries, Anteo X, our technology Ultranode. All of them, they focus on improving performance and lowering production costs for our customers across a range of applications. That's what they do. That's what we offer, and that's what our messaging is being constantly refined. And then our value proposition is obviously specific for that in application. So we're focused on commercializing our products and growing our sales revenue. Over the past few months, certainly, we've seen foundational changes in relation to our people, our systems and the ways we're working to underpin this accelerated commercialization. We have got a strong pipeline of opportunities, of sales opportunities, and we are working with strategic partners, which I'd like to move to next. So growth plans for us for the Life Sciences has continued -- is for us to have continued growth in India; growing markets, such as South Korea, where we're already working with KOMA; the U.S. and Japan. We're working quite heavily on strategic partnerships, potential strategic new product collaborations and partnerships in Europe with some large chemical companies, including large pharmas, big pharmas. And we're looking at China potentially with the right partner and on the correct terms and conditions, and we're taking that very carefully and judiciously. So that's the sort of jurisdictional focus and in terms of the actual products. So growth in our vaccine development and our product being used in vaccine development, growth in our product being used in quality control around vaccines and its use in lateral flow diagnostic test. That's our -- that's what we do now, growing that with other companies is our focus. There are opportunities for us to expand in applications and pharmaceuticals in targeted drug delivery, biotechnology around refining, biorefining and immunoassays around multiplexing in ELISA Chemille renaissance. There is -- we've already started to move, but we would love to see, and we think there are opportunities in the pipeline for us to move into animal use of our products in working with -- in an animal application. So lateral flow tests, we're looking forward to being able to let everyone know about progress there. And through Mobius, there's actually don't -- we believe there'll be some opportunities in terms of biosecurity for our AnteoBind to be used. So what does the pipeline look like? Well, as you can see, from a leads perspective, there's a heavy India focus. And when it comes, there's -- so between AnteoBind and AnteoBind NXT, the split's around 80-20. But what we're focusing on here is expanding the lead pipeline and then systematically moving those leads through and converting them to sales. Similarly, how does that look for advanced battery technology? So our focus is growth in the U.S. with -- off the basis of the BDS joint development agreement with defense and security applications being what we're actually really focused on trying to secure opportunities around. And then growth in South Korea, India and China as well, but on a very structured and a judicious basis. So that's the jurisdictional view. And what does that mean in terms of products. So Anteo X is our product and our focus. Anteo X combined in joint development around already with carbon nanotubes is where we've gone. But binders, new binders -- as new binder technology is developed and potentially in separators, too. So it can be used within the battery in a range of different ways. For -- from an Ultranode perspective, obviously, WYON is a key focus for that to be a success. But for us to get other companies who are looking to use Ultranode formulations in the end product commercial rollout. Strategic partnership wise, we have -- whilst we announced that the Queensland grant -- government grant that we were offered, we would not proceed with, we were able to retain the opportunity to take on the -- to progress the ARENA grant, which is around -- with around $4 million for a strategic partner that might want to work with us on Ultranode X product development. What does that pipeline look like for our Advanced Battery Technologies business unit? Well, we've been doing a lot of work on expanding the leads, the number of leads that we've had through conferences and networking. And now we're working very hard to put the resources and to move those leads in a structured fashion, prioritized, structured very specifically around sales conversion through the pipeline. So the split between Anteo X and Ultranode is shown. And in there, we've also got suppliers who could also be customers as well as strategics. You can also see the geographic spread. So we've been in Europe for a while. We're moving seriously into U.S. India, China. We do get a lot of inquiries from China through South Korea, which is where we expect to seriously expand this further over the coming months. And then in terms of strategic partnerships, not surprising the types of parties that we're talking to, so chemical materials, companies, diversified multinationals, battery manufacturers and big pharma. So what we're looking for is how to structure that to add significant value as it currently moves forward. So in summary, we are very focused on the commercialization of our products and growing sales revenue. As I've said, India, South Korea and U.S.A., they are our focus at this time, reinvigorating relationships, expanding our sales pipeline is what we're doing. Entry into China under right terms with the right partner could take place. So we have -- we're well positioned with the pipeline of opportunities, and we need to put in the effort and the know-how to actually convert those to sales. So we're well positioned to achieve success moving forward. I'll hand back to Simon now I'm very pleased to take questions.

Perfect. Thanks very much, Merrill. [Operator Instructions] Will carbon nanotubes be functionalized with AnteoBind?

Will that be functionalized? So in terms of the products that we are developing, not with the product that we are developing, the product offering around that is to do with how Anteo X interacts with the carbon nanotube. So Black Diamond Structures is actually a dispersion technology company. They purchase carbon nanotube, okay? So it's about the dispersion and the functionality of those carbon nanotube. Our product offering is that Anteo X allows for lower consumption potentially of carbon nanotube, which are very expensive and better performance. So it's really more to do with -- you asked me, is it coating or is it dispersion? From my perspective, it's more from dispersion and electrochemical conductivity. I hope that answers the question.

Just a follow-up question. Will Anteo X be used to improve lead acid batteries?

No. Our focus is purely high silicon NI. But I have one small exception to that. We will always pursue what's in the best interest of the company in terms of opportunities that come our way. And quite recently, we've been introduced to a polymer cathode company, and we will have already purchased or in the process of purchasing a sample from us. And we are pretty excited about what might be -- we might be able to do between a polymer cathode and high silicon anode. But the answer is that's our focus. Let's hope it [indiscernible].

And Burnett Diagnostics Institute engaging with AnteoTech?

Not as far as I'm aware. Most of -- so Burnett -- what we tend to do is very international. So we have got a number of -- or we are talking to some very well-known research groups in laboratories. And we look forward to being able to say more about that into the future. We're always open, and we do actually get -- we do actually sell a lot of AnteoBind into laboratories across Australia -- Australia and New Zealand. The thing is that they can be quite small volumes. So again, it depends how we interact. Whether that laboratory is promoting our product, using our product, looking to collaborate with us, there's a whole lot of ways, but I'm not familiar with that one, in particular so.

And just mindful that the company doesn't give guidance, but just a question around future revenue. Can you give us an indication as to when will we receive significant revenue?

Okay. So what I can say is that, as I've said throughout the presentation, that is the focus. So the specifics of when that may or may not drop and how that's going to unfold, yes, we're not in a position to do that. But I think talking to the team before I came here, it's really important to share that everyone is doing everything they can to make this happen and for things to be accelerated in terms of sales execution. So I guess that's my answer to that question is we're going as hard as fast as we possibly can.

Perfect. Just a question, are you able to provide an update on our business relationship with EV1, EV2, EV3, et cetera.

All right. Okay. That's a good question. So what we've tried to communicate in our -- is that we are very focused on Ultranode in terms of where that could go. It could be groundbreaking. It could be a really big thing, and there's no doubt about that. But there are a number of aspects to that. So the earlier question was just about lithium ion batteries. So from a lithium ion battery perspective, silicon anodes are not -- require people to -- most of the industry is still working at less than 10% silicon. And we're way out there at 70% and 95%. So I'd just say there is a sort of threshold, and there is a journey -- that's probably a better way of putting it, that people need to go on and understand how the sort of silicon that we're using in Ultranode is readily available, it can be low cost at volume, and that moving into high silicon anodes, we address some of the issues around -- we address key issues around swelling, and there's all the benefits that you get from silicon. So the answer to that question is, we see massive opportunity in the future around high-performance, high silicon anodes. The thing is we have to bring the market through a market with us, and Ultranode X will require more investment. Now we understand that. We are continuing to work on that on a very low-cost basis, but we've been clear that, that will require us to engage with a strategic partner who is fully focused on that much higher energy density, essentially kick it out of the park type high silicon anode at that performance level. Page break So we've shown through our performance milestones results that we had this year that we're right there, but it will require further investment for us to get seriously into the EV market. And we made it clear on the strategic review that we've got formulations and opportunity for us to create revenue through what we've already tested, and we're working to capitalize on that and create sales opportunities. So there's the answer to that one. It's -- the European EV market, we've been clear about that, it is quite difficult. And so hence, the South Korean approach, and we'll be looking to leverage everything we've done into there.

Right. Let's move into our next question. Can you just expand on the relationship with the Korean distributor Kanen and how you see that developing?

Yes. Okay. So what we -- how we see that developing is it came out of actually an introduction from our client or related clients is something we're working on. And we have a number of parties in South Korea we've been having conversations with. The view was that we would benefit from having local and local representative and who could help us to accelerate our vision for sales there across Anteo X, potentially Anteo X in the separator side as well as Ultranode. So how -- we think we've had some very good discussions. We feel like they're across -- they have already a customer base in batteries. And we are looking to work with them creatively and expediently. So it was really on ground, know the market, existing customer base, how can we get in there, and so far, so good.

Are we now more focused on working with battery manufacturers rather than EV companies? And if so, why the change in direction?

Yes. Yes, the answer is yes. We -- because we've expanded our focus across different applications, so of course, WYON is wearables. We're also working with a company that does consumer products in mobile phones. Now don't get too excited about that. They have to do testing and they have to move through new commercial products evaluations. And there's a horizon that sits with it. We are very focused on drones, and we see very significant opportunity for Ultranode in there in terms of lighter -- it's also about what that application is for, unmanned aircraft and drones, biosensors, all sorts of things. So we basically see Ultranode has a potential to move out into those products. So back to EVs and -- sorry, there was about why we're not just an EV was that on?