Ilika Plc (LON:IKA) Chief Executive Officer Graeme Purdy caught up with DirectorsTalk to discuss the company’s recent £3.5 million fundraise, its commercialisation plans for Stereax batteries, and development roadmap for Goliath solid-state batteries.
Q1: Graeme, why did Ilika choose to raise capital now?
A1: It’s a really exciting time for the company as we actually head towards commercialisation of our Stereax batteries, our small miniature, in fact, batteries for active implantable medical devices.
As you know, they are going through an engineering batch production phase, so we’ve transferred all of the equipment across to Cirtec in the US for manufacturing and we’re making the initial batches. Of course, we’ll be starting to release those batches for our pipeline of customers towards the end of the year, and we just want to make sure we have sufficient financial resources to support Cirtec in that endeavour.
On the other hand, we need to support the progression of the Goliath roadmap, which has hit some fantastic milestones over the past few months, and of course, there’s more to come. It’s certainly an exciting time for the company.
Q2: How will the group deploy the capital?
A2: So, round numbers, if we say that we’re successful in raising £3.5 million, actually, £3.3 million has already been raised through the capital placing so the institutional investors supporting the company, and that will be topped up by the open retail offer.
If you take £1.1 million of that £3.5 million, that will go towards supporting Stereax in particular, this tech transfer activity that we’re undertaking with Cirtec testing and validation of the batteries that come out of that production process and the ensuing customer support to make sure that the people who are deploying these batteries get the technical support they need in order to get the best out of the product.
The remaining £2.4 million is earmarked for development of Goliath through the prototype design and build. Remember, later on this year, we’ll be releasing our P1.5 and P2 prototypes, our 10-amp power and 50-amp power prototypes. We need to purchase some testing equipment in order to make sure those prototypes do what we expect and then we’ll be carrying out that test programme and leading into then customer support and further engagement with that pipeline that we’ve already got in place.
Q3: Why does it need capital though for Stereax? Surely Cirtec is paying for the implementation of the manufacturing?
A3: Yes, it’s a fair question, but we have to uphold our side of the bargain. Cirtec is investing significantly in the installation of the equipment at their facility in Lowell in Massachusetts and they’ve got a team commissioning and operating that equipment. There’s an awful lot of know-how and we need to be able to ensure that our team is supporting those activities. Also, we’re the experts actually in batteries and we need to be able to execute that test and validation programme just to make sure that the batteries are exactly what we’re expecting and meet specification.
We’re then working together very much in a collaborative manner with Cirtec from a business development perspective, making sure that actually customers get the level of sales support, the technical support really that they need in order to be successful.
Q4: Will the group be able to amplify its development expenses for Goliath with grant funding?
A4: That’s the great thing for investors in Ilika, actually, and in Goliath in particular, is that in the autumn statement last year, you’ll remember that the government pledged £2 billion worth of investment over the following five years and that is for the electrical transformation of the automotive sector. We’re waiting for the outcome of the comprehensive spending review that’s being carried out in government circles to see how that money will be deployed across the different government agencies.
We have got some further applications in flight, you’ll remember that actually quite recently we have successfully completed the APC grant for scale up activities, including partnerships with Agratas and UKBIC and MPAC, as well as the Faraday Battery Challenge history programme, which was all about the development of our prototypes. We got to our first pass at our D8 development point, which is the 50-amp power battery through that grant supported programme.
So, we’re expecting further support. The great thing is that our business model and our technology is perfectly aligned with government industrial strategy.
Q5: Can retail investors participate in the raise under the same terms as institutional investors?
A5: They can, absolutely, and that retail offer is now open. It will remain open until the 28th of May at 4.30 p.m. UK time. So, it’s important that if retail investors wish to participate in that, they have a look at the RNS, which has gone out explaining how they do that and there’s a book build process that they can go through. There’s a link to that in the RNS. They then can subscribe on exactly the same terms as the institutional investors who’ve already committed that £3.3 million to strengthening the company’s balance sheet.
