CEO's message

Laying the groundwork for large-volume deliveries

During and after the quarter, we received orders and signed agreements that have broadened our customer base and prepared us to increase production in line with the growing demand from existing and new customers.

As we already anticipated in our year-end report for 2023, turnover during the first quarter of 2024 was higher than during the preceding quarter, amounting to SEK 5.8 million (20.0). This is 71 percent lower than the first quarter 2023, but at the same time higher than what we estimated in the business plan that formed the basis for the rights issue we carried out in December 2023.

Continued cooperation with F.C.C.

During the quarter, we continued to deepen our cooperation with F.C.C. which after the end of the quarter led to two formal agreements. Both are based on the demonstration line that Cell Impact installed in February 2023 at F.C.C.’s production facility in Hamamatsu, Japan.

The first is a formal extension of the current cooperation agreement in the form of a leasing agreement that allows F.C.C. to continue to demonstrate Cell Impact Forming™, our patented, sustainable and cost-effective forming technology, to the company’s customers and other participants in the automotive industry and other sectors. The leasing agreement applies retroactively from October 2023 and extends up to and including December 2024.

The other agreement is a framework agreement that regulates the conditions for continued cooperation between the companies. As F.C.C. is a leading Japanese supplier of components to the automotive industry, this is an important step in Cell Impact’s continued development. The agreement paves the way for Cell Impact’s cutting edge technology and F.C.C.’s experience, commercial infrastructure and global presence to reach prospective customers in Japan, China and India with Cell Impact’s products.

Making strides in the electrolysis market

Manufacturing electrolyzers is critical to be able to produce green hydrogen. By driving electrolysis with renewable energy, it is possible to produce hydrogen sustainably. In recent years, Cell Impact has had a clear focus on also producing flow plates for electrolyzers, which among other things has included deliveries of product samples and carrying out a number of projects for customers.

In March, we announced our first deal in the area of electrolysis. The agreement extends over 30 months and was signed with a new European customer. It includes an initial delivery of flow plates, tooling and fixtures worth just over SEK 18 million. The project started in March and is expected to include deliveries up until mid-2026. One clear advantage is that we can deliver flow plates for electrolyzers from our existing production lines without having to modify machinery. The agreement constitutes an important step for Cell Impact.

Delivery to Plug Power

During the quarter, we carried out deliveries in accordance with the agreement with Plug Power that we announced in October 2022. Most of the deliveries will take place during the second quarter of 2024.

“During the first quarter, we continued to deepen our cooperation with F.C.C.”

Expanded business

Cell Impact has always striven to broaden its business, in part through the above-mentioned activities and also by acquiring new customers. During the quarter, my colleagues and I visited companies in North America, Europa and Asia, and we met many existing and prospective customers. These visits have led to projects that will create new revenue streams during the current year as well as in years to come.

Cell Impact is a center of expertise for these customers, and we are helping them with product design and production processes. Among other things, we are developing customers’ flow plates so they are easier to manufacture with more efficiency – at half the cost of conventional forming. Since flow plates account for up to 40 percent of fuel cell production costs, Cell Impact Forming is a very attractive offering. We are seeing great interest from existing, new and prospective customers in our production lines which among other things include forming, high-precision punching and laser welding.

One proof that customers need our expertise and offerings is evident in the large number of concrete test tools being requested. While these agreements will not initially generate significant revenues, they are of great importance since tool manufacturing is a necessary step in every agreement that lays the groundwork for high-volume production in the future.

During the quarter, we also concluded the cost-reduction initiatives we decided upon in December 2023, and we now have a clear cost focus on maximizing the results of our new prospects and possibilities.

The great interest in Cell Impact during the quarter from existing and potential customers that involves a number of upcoming projects gives me great confidence in the company’s future development. Our secured financing for 2024 and into 2025 gives us the platform we need to translate some of these projects into new revenues.

Daniel Vallin, Interim CEO
Karlskoga, May 2024