NanoXplore Inc.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to NanoExplorer fourth quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After this biggest presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automatic message advising your hand is raised. Please note that today's conference is being recorded. I will now hand the conference over to your speaker host for today, Sophie Rossignol. Please go ahead.

Merci, opérateur. Bonjour à tous et bienvenue à la conférence téléphonique du quatrième trimestre 2023 de Nano-Explore. Good morning, everyone, and welcome to Nano-Explore's fourth quarter and year-end conference call. Today, I'm here with Silvush Nazarpur, our president and CEO. and Pedro Azevedo, our CFO. We will start with our prepared remarks and then a Q&A. Please note that our discussion will include estimates and other forward-looking information, which our actual results may differ from in the future. We invite you to review the cautionary language in yesterday's earnings release and in our MD&E regarding the various factors assumption and risk that could cause or actual result to differ. With that, let me turn it over to Sobhush.

Thank you, Sophie. Hello, everyone, and thank you all for joining our call today. We will first start with the review of the economy and the impact on our business. I will then expand our recent business and commercial development, and I will end my remarks with an update on Voltax Pro. After a year of volatility and interest rate hikes by central banks, the economy has proven surprisingly resilient. High labor market, high commodity prices, and the delayed impact of rising interest rates have all helped to sustain growth. While this has set the stage for a period of relative economic calm during the remainder of this year, Some signs of slowing growth are emerging on some parts of the economy. Despite these economic uncertainties, our business is growing, and our customer forecasts remain strong, as evidenced by our reported financing. Our total revenue increased by 18% from the same quarter last year, increasing from $28 million to $33 million, which is a record quarterly revenue. Also, we closed the year with $123 million of revenue, which is 33% higher than last year and also record annual revenue. Our gross margin expanded during this quarter again and reached 21%, resulting in a fourth positive adjusted EBITDA in the last five quarters. In terms of operations, were performing very well, and I believe this trend will continue in the current fiscal year. We also maintained our healthy balance sheet with more than $36 million of cash on hand. The strength of our current business, along with our healthy balance sheet, will help us execute on our growth strategy as disclosed in our five-year strategy plan. Now let's talk about our recent business and commercial development related to our five-year strategy plan. Our anode material pilot line is now up and running, and we have fully tested our anode active material products. According to Benchmark Mineral, the United States battery capacity pipeline to 2031 now sits at near 1.2 terawatt hour which requires around 360,000 tons of anode active material annually. We are planning to produce 8,000 tons per year of anode active material from our upcoming 16,000 tons per year anode and graphene production facility. Even though this facility will supply only a small fraction of North American meat, This is an important milestone for NanoExplore as it paves the way for future expansion in this market. For NC, we are working on the engineering of this facility and are in discussion with suppliers and contractors. We have also shipped samples out to partners and customers for testing and validation. Even though VoltaExplore will be a customer of this facility, We are in discussion with OEMs and their battery production partners to allocate the rest of the capacity. When it comes to the financing of these 300,000 square feet plants with benefits from federal and provincial investment tax credits, an off-take agreement enables us to secure the credit facility. And our investment decision is dependent on securing such an off-take contract during the next few months. We're very excited to enter the battery material market, a market where the supply is limited and mainly located in Asia. We have seen several public announcements of new battery projects in Canada also, which will bring a lot of new opportunities for NanoExplorer. Adding to that, our battery research and laboratory located in the vicinity of NanoExplorer headquarter is now fully operational. This laboratory is key for our performance-added product and will allow NanoXplore to remain at the forefront of research and development on battery-advanced materials. Another aspect of our five-year plan is our investment in advanced composite products, where we leverage graphene performance in light weighting of transportation. We recently acquired a press to support recently awarded programs from large commercial vehicle OEMs, which will be detailed to our shareholders shortly. We're also receiving strong interest from passenger vehicle OEMs for our sheet molding compound products that are currently evaluating potential opportunities to capitalize on. Sports car and electric cars are looking to reduce weight and our graphing solution is appealing to them. This is a very good sign for us and for the graphene market as a whole, as the transportation industry is becoming one of the largest early adopters of graphene, both for batteries and composite lighting. Moving to the key developments that happened during this quarter with our graphene-related activities. Overall, we are satisfied with our graphene commercialization activities. testing and validation processes are continued at an increasing pace in our focused market and sales from existing customers increasing each quarter. A clear demonstration that the added value coming from incorporation of graphene are being accepted by our customers. For instance, in the plastic and recycled plastic market, the presence of additives containing graphene can increase several profits including stiffness, impact resistance, thermal and electrical conductivity, and resistance to degradation. Graphene-enhanced plastics such as nylon and polyethylene are selling better to external customers. And the commercial work is advancing on the recycled plastic side, with a few customers already purchasing graphene and are expecting to add more. We're also continuing with the drilling fluid, foam, and concrete applications. Drilling fluid is an important opportunity for us as it requires large volumes of graphene in powder form. We are developing our solution with a few global oil and gas companies, one of which is one of the largest in the world. If our solution enters the market, we can expect several tons of graphene every drilling well. As a reminder, graphing enhances lubricity and lowers the coefficient of friction, which leads to process efficiency, increasing drilling speed and lowering downtime. Switching to foam, it was proven that graphing increases thermal insulation by more than 10%, improves flame retardancy, and provides a more sustainable solution. We're in discussion with several reputable chemical companies during different stages of validation of our graphics. Results have been consistently promising, and we're confident that we will win business in the insulation foam market. For instance, our discussion with a well-known chemical company is progressing, and we're waiting for official dates for product rollout. We're also in product validation steps with another leader in the foam market. Another market of interest for us is the concrete markets. We are seeing success mainly in the specialty concrete market at this time. We anticipate sales volume to increase further following modification of the related ASTM certification to include graphene. Having said that, larger and more tangible graphene sales volume will come from commodity It's an extremely cost-sensitive market, and even though we are the lowest cost supplier of the graphene in the world, performance improvement and cost reduction coming from additional graphene is not yet sufficient for adoption. In other words, for us to enter this market and maintain our target gross margin, we have to produce graphene at lower costs, which will be the case only after commissioning of our 16,000 tons per year graphene and add-up material production facility. 12 years to Voltaic Store. A lot of progress has been made during the last quarter. We signed a deal with the well-known heavy commercial vehicle OEM for supply of lithium ion battery cells for a duration of 10 years, starting from 2026. This was a key milestone for us and for Voltaic Store investors, and I'm happy that this is done now. Adding to that, we recently announced the appointment of Nicola Veal as the new Director of Automation and Construction of VoltaX Pro. Nicola was previously working as Senior Manager of Self-Controlled Engineering at Tesla and was involved in building Tesla's data packages. The appointment of Nicola together with the conclusion of our first commercial deal consistently reduces the risk associated with the construction of VoltaX Pro data packages. Moreover, the retuning process at VoltaXStore pilot class to move from 18660 to 21700 cell format is now complete and the first cells have been produced. As a reminder, VoltaXStore VivaFactory will only produce 21700 cells. Finally, we are progressing well on the financing of VoltaXStore and are getting closer to creating the financing package and the future of our business. We're targeting to conclude the financing this year and start the construction during 2024. With that, I will now give the floor to Peto, who will discuss the financial and our outlook.