For your information @ordosMy notes from the latest interview with Bernard (CEO of HPQ Silicon):
Battery SiOx anode material
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- Latest Gen3 18650 cycle results shows continuation and that we understand what we are doing, that's very important
- Bernard thought it would be beneficial to press release the odd 650 cycles result before holidays, because if they reach 750 at Christmas / New Year, there is not going to be much attention from wider audience as everyone will be busy with the holiday celebrations. Not only less attention from potential SiOx clients (graphite producers, battery manufacturers, etc), but also (I assume) staff at the grant office, where they applied for the $4MM grant to manufacture SiOx in Canada. The application was submitted before they reached the 500 cycle results
- It's very rare to get a grant of this size in Canada and at this stage of R&D, but this could finance up to 75% of the cost of SiOx pilot plant. They have not gotten the grant yet, they just made the "first cut". However, various university professors with battery expertise in Canada confirmed that no one is doing what HPQ Silicon is doing in Canada. So HPQ Silicon \ Novacium has a good shot at this grant.
- We already know the cost of building the SiOx production pilot plant, so even if we do not get the grant, we have multiple backup plans (we are already in discussion with other groups). The preferred approach, of course, is the grant, which means there will be no dilution. Otherwise there are many very interested parties willing to finance the SiOx production
- Natural graphite association of the US is asking the Trump administration to put 920% tariffs on artificially subsidized graphite coming from China. If that goes through, then the price of graphite is going to go through the roof and therefore there is going to be a massive need for a material that can replace at least some of the graphite in battery. Not only HPQ Silicon's SiOx would be ideal fit in balancing price of end product - battery, but it also very significantly improves the actual battery preformance
- There are very interesting SiOx related leads that Bernard needs to go through in advance. There were very interesting news recently about other entities getting grants for their advanced graphite based material and that's a positive for HPQ. We don't replace graphite, we make graphite better (!)
- We are going to be in a much stronger position in 2025 as we plan our pilot plant for SiOx production and will sign multiple LOI/MOUs precursor agreements with graphite producers, battery manufacturers, and even some entities which want to white label HPQ/Novacium batteries (e.g. not just material itself, but actual batteries) to use in their products
- We are lining ourselves up to get Gen4 ready. Bernard was having a discussion with the team and they are already thinking even further down the line
- 30% larger cumulative return than graphite references is massive
- The trend towards bigger batteries is not going to affect HPQ Silicon / Novacium at all, it's the same recipe and will yield at least the same results
- The current testing of Gen3 is done with 3 batches of 18650 prototype batteries. The results are then averaged to produce the publicized results. During such testing it's not uncommon that one of batches may start short circuiting. One of the 3 battery batches that Novacium is testing for Gen3 recently started having such issue and unfairly dragging down the average. The team knows what is the issue, which doesn't affect the other 2 batches, and therefore came up with the more precise number of expected improvement of 13% to the average via a minor adjustment. This is normal and expected in battery R&D
- We are going to become more of a licensing and technology partners to bigger entities to get it moving faster
- As mentioned previously, Gen3 has already garnered a lot of interest and those big graphite producers, battery manufacturers want to move to next step, which is to get it scaled up. We know how we will build the pilot system, hence the patent filed for continuous production of SiOx. Therefore, going to next generations of the material has less of an effect at this point, since, again, Gen3 reached that threshold of massive interest from the industry
- There will continually be incremental improvements to the system. Gen3 gave us a lot of information and we are ready to go to Gen4
- There are not many companies out there doing SiOx material. In Canada HPQ Silicon is the only one. In the US, Group14 and Sila, for example, use very expensive process
Shares for debt
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- This debt has been on Pyrogenesis's books since 2022
- End of the fiscal year. A lot of financing decisions are made based on audited financial statements. If we waited to settle the debt after new year when we have fumed silica news, etc, possibly higher share price, we would still have shown negative working capital, negative equity on our financials. That's a negative when you talk to investors. New investors interested in investing money because they really like what you are doing, do not want to put their money to pay off your old debt. It wasn't making sense having this debt on the books for another 12 months
- Pyrogenesis also wanted to clear out their 3 year old account receivable which has had zero value all this time
- It was also a contention point that was already brought up by entities interested in financing HPQ Silicon, it's not something that HPQ Silicon was anticipating ahead of time and went ahead to resolve it
- Peter never wanted to sell the previous HPQ shares Pyrogenesis was holding, but they had to do it. Now with this settlement they are once again a large shareholder of HPQ Silicon, which is very good from strategic point of view
Fumed silica
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- Bernard had a tour of the pilot plant and it's ready to go starting January, 2025. Bernard hoped it would be earlier, but those are the R&D timelines