NanoXplore Inc.

Good day and thank you for standing by. Welcome to the second quarter 2024 NanoExplorer earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Pierre Therese, VP of Corporate Development.

Good morning, everyone, and thank you for joining us today. Before we begin, I'd like to remind you that today's remarks, including management outlook and answers to questions, contain forward-looking statements. These forward-looking statements represent an expectation as of today, February 14, 2024, and accordingly are subject to change. Such statements are based on assumptions that may not materialize and are subject to risk and uncertainties. Actual results may differ materially, and listeners are cautioned not to place undue reliance on these forward-looking statements. a description of the risk factors that may affect future results is contained in NanoExport's annual information forum, available on our corporate website and in our filings with the Canadian Securities Administrators on CDAR. On the call with me this morning are Soroush Nazarpo, NanoExport founder and Chief Executive Officer, and Pedro Azevedo, our Chief Financial Officer. After remarks from Soroush and Pedro, we'll open the call to questions from financial analysts. Let me now turn the call over to Soroush.

Thank you, PY, and good morning. I will first start with the review of the economy as it relates to our business. I will then expand on our capital allocation plans and will end my remarks with an update on Volta Explorer. As the central banks are deciding on the timing of the interest rate cuts, we're seeing increased activities with our customers. Our customers' forecasts are strong and growing. The North American economy continues to show resilience and is giving confidence to our customers. Against that backdrop, I'm very pleased with the performance of the Nanoexplore team. We continue to perform at a high level. Our balance sheet is strong and we're executing on our capital allocation priorities. We delivered good results overall in the second quarter and made excellent progress in our graphene-enhanced composite product. We announced new program awards and expansion of existing programs with more than $30 million in annual incremental revenues. Demand is very strong for our graphene-enhanced composite products, and customers are open to covering the related capital requirements and supporting us financially to increase our production capacity. According to IDTech's Graphene Market Report, composites are currently the largest segment of the graphene market and will continue to be nearly half of the global graphene market in the next 10 years. Our graphene-enhanced composite products are currently sold under the commercial name Graphene Black SMC. It provides up to 15% weight reduction versus conventional SMC at neutral cost to the OEMs through down gauging, which enables the use of less materials per part. Moreover, graphene black SMC improves moisture resistance of the SMC molded components, which leads to less surface blistering after painting and less quality defects as a result. These improvements are so significant that their impact is visible on our gross margin and have been recognized by our customers. Furthermore, these graphene enhanced SMC solutions improve mechanical rigidity, accelerate molding process, and increase flame retardancy. All these improvements enable applications in lithium-ion battery enclosure business, which are of great interest to NanoExplorer. Now, related to graphene sales activities outside of composite market, our sales team have been quite active. We have started supplying graphene to five new customers, three of which are in the coating market, one in the adhesive market, and another in the fabric market. This shows the great potential of our graphene products to enter multiple markets outside of what has been announced before, such as foam, concrete, drilling fluid, and recycled plastics. In these markets, we continue our work with customers and go through validation steps one by one. For instance, the validation process related to our graphene-enhanced products for insulation foam has continued very positively with one of the largest chemical companies in the world. Related to drilling fluids, our graphene is performing very well and testing is ongoing with several oil and gas companies. Sales in the recycled plastic market is continuing and we are expecting volumes to grow with new customers. All in all, we are seeing progress on multiple markets and our graphene is performing well in trials. Even though validation and certification process of a new material takes years and is a difficult endeavor, we are maintaining our financial discipline and successfully navigated uncertainties of the last year. Now looking forward and as economic certainties are improving, our customers and partners are getting their confidence back to introduce new products, And along with them, we're continuing our R&D and customer validation trials. Now, moving on to our five-year strategic plan, we have advanced further in the implementation of our plans, particularly related to capital requirements. I'm pleased to announce that the total capital requirement for our five-year plan is reduced by 15% to $140 to $150 million from originally announced $170 million, mainly due to optimization of engineering work and equipment cost reductions, as well as customer investment on the manufacturing equipment. To finance that, we are finalizing our new credit facility in the next few weeks and in the final discussion with the federal and provincial governments. These discussions started early last year and we are anticipating a conclusion shortly as we have received positive feedbacks from both levels of the government recently. This should cover almost all of our capital requirements for our five-year plan and should remove uncertainties for our shareholders. Volta Explore Financing is also continuing with the due diligence of our lead investor and continuation of the paperwork for government support. Even though it has been a long process to secure the financing of all these projects, I'm quite pleased that we are reaching the end of it and can start construction of these facilities next quarter. With that, I'll now turn the call over to Pedro, who will provide details about our financial performance.