LanzaTech Global, Inc.

Good day, everyone, and welcome to Lancetec Global, Inc.' 's third quarter of 2024 earnings conference call. At this time, all participants are in a listen-only mode. Later in the call, there will be a question-and-answer session. If you would like to ask a question, please press the star and 1 on your telephone keypad. Also, today's call is being recorded, and I will be sending by should you need any assistance. And now, at this time, I will turn things over to Kate Walsh, Vice President of Investor Relations and Tax. Please go ahead.

Good morning, and thank you for joining us for Lanza Tech Global, Inc.' 's third quarter of 2024 earnings conference call. On the call today, I'm joined by our Board Chair and CEO, Dr. Jennifer Holmgren, and our CFO, Jeff Strachanbrode. Earlier this morning, we issued a press release with our third quarter 2024 financial and operating results, as well as an investor presentation summarizing the company's performance and key operational highlights for the quarter. Please also reference our quarterly report on Form 10Q for the quarter ended September 30, 2024, filed today. Both our press release and investor presentation can be found in the investor relations section of our website at www.lanzatech.com. Before we begin, I'd like to direct you to the disclaimers in the front of our investor presentation and remind you that today's call includes forward-looking statements. Any statements describing our beliefs, goals, plans, strategies, expectations, projections, forecasts and assumptions are forward-looking statements. Please note that the company's actual results may differ from those anticipated by such forward-looking statements for a variety of reasons, many of which are beyond our control. Please see our recent filings with the Securities and Exchange Commission, which identify the principal risks and uncertainties that could affect our business, prospects, and future results. Unless required by law, we assume no obligation to update publicly any forward-looking statements. In addition, we will be discussing and providing certain non-GAAP financial measures today, including adjusted EBITDA. Please see our earnings release and filings for reconciliation of these non-GAAP measures to their most directly comparable GAAP measures. With that, I'll turn the call over to Jennifer.

Thank you, Kate, and everyone joining us today. It's been a dynamic news week, and we appreciate your time and ongoing support of Landsat Tech. First, let's address the elephant in the room. Our third quarter revenue was $9.9 million, about $7 million below target. This was primarily due to two factors. One, we were expecting another Landsat Jet sublicense event that would have resulted in the issuance of a second tranche of LamsaJet shares to LamsaTech in the third quarter and close to $8 million in revenue associated with that event, similar to our second quarter. And two, while our carbon smart revenue more than doubled quarter over quarter to $2.2 million in Q3, due to the market dynamics of ethanol pricing being depressed in a target market for Q3, that was still significantly below our expectations for the quarter. While we are actively evaluating material cost reduction opportunities across the business, as well as opportunities to reallocate resources to focus on and accelerate commercial activities, I also want to talk with you today about the evolution of our business model to accelerate revenues and profitability. Having worked with partners like Shogang, our solar middle, and Indian Oil Corporation to develop and construct, start up, and operate six commercial-scale biorefineries, We believe we have established the know-how and infrastructure to develop our own commercial projects. While Lensatech has grown primarily with our licensing business model, which allows for rapid capital light scaling, it is a tough model that leaves us dependent upon the adoption and decision cycles of our licensees and often does not allow us to capture the full value of our technology. Over the course of the past year, we have been evolving our business model to complement our licensing business and enhance our capability to develop and finance our own projects where we have more control over their timing and ultimate performance and in which we expect to achieve greater economics, including greater upside for Landsat Tech in the product and profits of these projects. This evolution can be seen in our recently announced project in Norway, which is expected to reach final investment decision within six months, and which we expect to be the first project to be developed with our infrastructure capital partner, Brookfield Asset Management, which committed $500 million for such Lamsa Tech projects. It can also be seen in the creation of our joint venture with the Olayan Group in the Middle East, which we expect will finance and cultivate a growing pipeline of commercial opportunities in that region. And it can be seen in another project, our Project Drake, which I'm excited to announce today as it has reached a major milestone, which should have significant positive impact on our fourth quarter financial performance and drive a meaningful amount of income for 2025 if we rapidly finalize the agreements as expected. Comparable to a Project Dragon in the UK, Project Drake is a 30 million gallon per year EU-based ethanol to sustainable aviation fuel project that we have been developing over the last three years, which will utilize ethanol from Landsat X-Waste to ethanol technology platform and convert it to SAF via the Landsat Jet platform. We have completed the front-end engineering and design, or feed work, for inside the battery limits of this project and expect to reach final investment decision and fully finance the construction stage of this project in 2025. Today, I'm announcing that we have entered into an exclusivity and financing commitment agreement with a new financial partner, whereby they intend to acquire certain rights in the development of this project, fund the remaining capital needed to reach FID, and enter into a development services agreement with Lands Effect for this remaining work. We expect to maintain significant upside participation in this project and have already received the first $5 million in fees associated with this agreement and expect to share more about this exciting project and its potential additional impact on our 2024 and 2025 results later in the quarter as we finalize these agreements. I want to clarify that we are not shifting to a capital-intensive business model. where we're taking binary company risk on individual projects. Rather, we're taking more control over our own success, shortening project development life cycles, and positioning ourselves for greater upside in multiple projects by partnering with world-class visionary capital partners from the earliest stages of our project development. Securing capital for development stage projects is difficult and time-consuming, especially on a project-by-project basis, which is why we have adopted this partnership approach with strong capital partners for financing the various stages of project development and securing financing partnerships up front and then designing and developing projects to meet our partners' investment criteria. We are also continuing to expand access to ethanol volumes produced from our licensee biorefineries in order to grow our carbon smart business and its margins. Today, we also announced a two-stage ethanol offtake agreement with our solar metal, a short-term contract with a $6 million annual revenue potential, and a five-year contract with annual commitments of 5,000 to 10,000 tons, generating a potential $10 to $20 million per year. This is our first long-term ethanol purchase agreement, which enhances our access to products and allows CarbonSmart customers to make longer, larger commitments, which has the potential to significantly boost our future revenues. This progress is thanks to the foundation we developed for delivering CarbonSmart ethanol to our customers and trading ethanol from our China plants. Now, let's talk further about why we're in a strong position for 2025 and beyond. If we look back at what the Lancetec team has accomplished since our last earnings call, it is truly impressive and speaks to the solid foundation we continue to build for long-term growth. First, on the sustainable aviation fuel front, in addition to Project Drake, we have announced several projects and milestones which demonstrate the interest in Lancetec ethanol produced from waste resources to produce SAF through Circular. That is our joint offering in partnership with Lancetec. The global market for sustainable aviation fuel produced from ethanol is experiencing significant growth, and we expect the pull of our ethanol's feedstock for SAF to grow right along with it. There are projects underway in the UK, the EU, India, Australia, and New Zealand, and we expect Lancet's Freedom Pines fuel facility here in the U.S. to start producing barrels imminently. What all these projects reinforce is the massive interest in our ethanol-producing technology, which provides a critical source of feedstock for the multiple SAF projects underway, leveraging Lansaget's technology. During the third quarter, we also expanded the scope of our work with our New Zealand and Lansaget to assess the use of municipal solid waste as a local feedstock for SAF production in New Zealand. After successfully completing a feasibility study for locally grown woody waste, This builds upon the work we're doing with Wagner Sustainable Fuels in Australia, our first circular project around municipal solid waste as feedstock for their planned SAF refinery at the Port of Brisbane. And adding to our project using municipal solid waste as feedstock to ethanol production is the master licensing agreement with City Suite that we signed in September to develop multiple waste to ethanol plants across Japan. We are in the early stages of executing this plan, but are truly excited about developing a replicable global blueprint for other countries and businesses to follow on how to access and utilize the carbon log in local garbage. Turning now to progress with industrial off-gases as a feedstock for ethanol production. Our collaboration with Aramid in Norway represents what we believe to be the first-of-a-kind integrated CCU and CCS facility designed to achieve leading-edge carbon abatement results for hard-to-abate industries. Metals, cement, chemicals, shipping, and aviation are among the hardest industrial sectors to abate, and we see a number of avenues ahead where we can leverage and replicate the work we're doing in Norway to provide profitable decarbonization solutions to other companies grappling with the same situation. As we expand our biorefining global reach, we're also expanding our platform's capabilities. In early October, we announced our ability to produce single-celled protein, a product we're calling Lansatec Nutritional Protein. The estimated $1 trillion alternative protein market is expected to grow significantly in And our nutrient-rich product is designed to be an ideal ingredient for animal feed, pet food, and human nutrition that can be produced from CO2, oxygen, and hydrogen anywhere in the world. Our bioreactors have been producing protein as a co-product to ethanol for years, and now we have developed the capability to produce protein as the primary product. Importantly, we continue to develop partnerships with animal, pet, and human food producers to enable us to aggregate demand for the production of Lansetec nutritional protein at commercial scale. To close, we are focused on a strong Q4 to finish the year. With nearly two months left, there's still a lot of time on the clock, to execute what we have in process. Several of the largest initiatives we have in development right now have some element of timing uncertainty, which results in a large range of potential fourth quarter financial outcomes. Those initiatives are Project Drake, where we are finalizing agreements, our project in Norway, where we are preparing a package for FID review by Brookfield, and Project Secure, which we announced in March of this year, and is progressing well. We are working on finalizing the contracting framework with Technique Energies and the Department of Energy. Additionally, the next Landsat Jet sublicensing event and the related issuance of additional shares of Landsat Jet to Landsat Tech has timing uncertainty as well. It's important to note that we expect these projects will unlock access to cash that will significantly bolster our financial liquidity. I am confident that the moves we're making with our business model will improve the certainty of development timelines as we go forward and will be accretive to our short-term and long-term business economics. We expect these moves will allow us to control more of the feedstock operations and offtake in our asset portfolio, which should increase our cash flow generation and accelerate our path to profitability. And with that, I'll turn it over to Jeff for the financial update.