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For each enemy in a battle the timer is increased by 10s. If you beat all enemies before the timer runs out, you get additional experience. You get 0.1 Megs per enemy killed, if the timer is below 10s. 0.2 Megs, if the timer is below 20s and 0.3 Megs, if the timer is blow 30s.

Also note that the capsules disappear once the timer runs out. You can “waste” time opening capsules to gain items, effects or upgrades. E.g. Bombs cannot be leveled at the invention machine. But they can be upgraded with level-up finds from the capsules.