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Trackwise Designs, a leading provider of specialist products using printed circuit technology, is pleased to announce that, further to the Company's announcements on 14 September and 30 September 2022, it has concluded its discussions to replace the Product Manufacture and Supply Agreement (PMSA) for the supply of flexible printed circuit boards to its UK EV OEM customer ("EV OEM") and has agreed a new contractual arrangement with its customer.
The new agreement has been entered into for a fixed quantity of flexible printed circuit boards which are due to be delivered through to July 2023. The New Commercial Order provides for a £3.99 million advanced payment in 2022, with the balance of the contract value satisfied by standard payments on delivery of the products.
The advanced payment will be secured by a charge over various manufacturing assets involved in the production of the circuit boards at the new production facility at Stonehouse, Gloucestershire. The charge will be released upon completion of the supply of the full contracted quantity.
Completion of the new contract and release of the charge will conclude contractual arrangements between the two companies. Any further supply of existing parts or development of new parts for the EV OEM, will be under new arrangements to be agreed with the EV OEM.
As previously announced, the wider impact upon Trackwise of the lower production volumes for the EV OEM is that additional funding is required and Trackwise is reviewing a number of options for additional funding with its advisers and will provide further updates in due course. The orders under the New Commercial Order as detailed above are consistent with Trackwise's Base Case forecast as outlined in its interim results announcement of 30 September 2022.
In addition, Trackwise is actively exploring longer term strategic investment partnerships in order to support development and conversion of the very significant pipeline of identified IHT sales opportunities, notably for EV battery cell connection systems ("CCS") for UK and EU OEMs, with Trackwise as a Tier 1 or Tier 2 supplier, and also for other Medical and Aerospace sales opportunities.
Philip Johnston, CEO of Trackwise, commented:
"Both Trackwise and our EV OEM customer have been faced with delivering their respective innovations and capital projects against a massively challenging macro business environment. This has sadly led to the situation where the PMSA supply arrangement has had to be reset.
We remain convinced that the Stonehouse facility, as a state-of-the-art roll to roll FPC and FPCA facility, is the right investment at the right time, especially to meet the potentially very large future demand for EV CCS. The length-agnostic manufacturing process that we have developed and continue to develop, is of particular relevance for cell-to-pack application and Trackwise is actively bidding into a very large EV CCS sales pipeline (in excess of £1bn). We recognise that the scale of such a pipeline is likely to be beyond the balance sheet of Trackwise alone and we are therefore actively exploring longer term strategic investment partnerships with larger global businesses - who can, together with Trackwise, leverage our IHT patent and manufacturing know-how to meet this global demand."