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NanoXplore Inc.
5/14/2026
and thank you for standing by. Welcome to the third quarter 2026 NanoExplore earnings conference call. At this time all participants are in listen only mode. After this speaker's presentation there will be the question and answer session. To ask a question during the session you need to press star 1 1 on your telephone keypad. You will hear an automatic message advising your hand is raised. To withdraw a question please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would like to hand the conference over to our first speaker today, Liam Turner, General Counsel and Corporate Secretary.
Please go ahead, sir. Good morning, everyone, and thank you for joining this discussion of Nanoexplore's financial and operating results for the third quarter of fiscal 2026. The press release reporting these results was published yesterday after market close and can also be found on our website, along with our financial statements and MD&A. These documents are also available on CDAR+. Before we begin, I'd like to remind you that today's remarks, including management's outlook and answers to questions, contains forward-looking statements. These forward-looking statements represent our expectations as of today, May 14, 2026. and accordingly are subject to change. Such statements are based on assumptions that may not materialize and are subject to risks 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 NanoExplorer's annual information form, which is available on our corporate website and in our filings with the Canadian Securities Administrators on CDAR+. On the call with me this morning, we have Rocco Marinocchio, our Chief Executive Officer, and Pedro Azevedo, our Chief Financial Officer. After remarks from Rocco and Pedro, we'll open the call to questions from financial analysts Let me now turn the call over to Rocco.
Merci, Liam, et bonjour à tous. I'm Rocco Marinaccio, President and CEO of NanoExplorer, and I'm pleased to have you with us today to discuss our fiscal third quarter 2026 results. Let me start with the key financial metrics. We delivered $32.3 million in revenue, adjusted gross margin of 22.9%, and adjusted EBITDA of $1.2 million. These are sequential improvements over Q2 2026 and year-over-year increases across all three metrics on a normalized basis, excluding one-time items from the prior year. The trajectory is clear and we are executing. The momentum we established in the first half of this year is continuing. Revenues, gross margins, and adjusted EBITDA all moved higher this quarter, driven by steady volumes from the club car launch in Statesville, continued recovery in our transportation business and tribograph sales are a lubricant product which are in line with our expectations. I'll now update you on each of the four priorities I outlined in my recent shareholder address. Number one, execute with discipline and deliver on our commitments. We said Q1 was the trough. The past two quarters have proven this as we have delivered sequential performance improvements on the key business metrics. Over the medium term, we believe this momentum will accelerate, driven by the graphene and graphene enhanced solutions growth impacts. On our dry graphene manufacturing process, we committed to have it up and running by early April, and we delivered. The equipment is powered on, mechanically running, and the team is executing a disciplined scale-up in line with our robust manufacturing protocols. we expect to begin qualifying commercial material in Q4, positioning us to fulfill customer orders from this new platform in fiscal 2027. This is not a future promise. This technology is now in operation and progressing through scale-up. Number two, expand into new markets and applications. NanoExplorer has the largest graphene production capacity in the world, the highest purity, the most competitive pricing, and now multiple product grades to serve multiple industries. That combination is unmatched. Our recently announced XGMP D500 HP product is the clearest example of how graphene is a disruptive technology. At 99.8% purity, with a surface area of 500 meters squared per gram, verified at commercial production volumes, D500 HP is purpose-built for the conductive carbon additives market. a $3-plus billion space currently dominated by carbon black and carbon nanotubes across applications including lithium-ion battery electrodes, electrostatic discharge-safe plastics, and conductive coatings. D500HP matches the conductivity of incumbent products, is price competitive, and delivers double the flexural strength and stiffness. The result? Customers no longer need to trade strength for conductivity. D500HP will be priced competitively with conductive carbon blacks, giving customers graphene-level performance without a graphene-level premium. This is not an emerging opportunity. Competing in large carbon markets is now a reality for NanoExplorer. Number three, convert our growing pipeline into sustained revenue and cash flow. This is where our capital investments are beginning to pay off in a tangible way. We have previously announced $50 million in business wins for our solutions business. Of that, $15 million has been successfully launched in Statesville with ClubCar on time and on plan. The remaining $35 million will ramp over the next 18 months as part deliveries start in line with customer forecasts. These are contracted revenues with clear timelines. For the first time in our company's history, we have clear line of sight to free cash flow generation. As these programs ramp and revenues are recognized, the financial profile of this company changes materially. That inflection point is now within reach. On Tribograph, our partnership with Chevron Phillips Chemical continues to advance. We are progressing through new end-user customer lab and field trials, actively co-promoting the product with a growing list of major customers across multiple geographies. The product is performing as intended. validated by customers moving from lab to field trials. By lowering the coefficient of friction and increasing lubricity, Tribograph is creating tremendous value for the end user by reducing drilling times up to 20%. This is a clear-cut example of our innovation created massive breakthroughs in industries that have been stagnant for many years. Number four, drive shareholder value. We are backing our conviction with action. Our leadership team and board have made meaningful insider share purchases in recent months. We are shareholders too, and we are aligned with you on outcomes. With new product grades like D500HP opening adjacent billion-dollar markets and contracted revenues ramping up in our solutions business, we believe the market has yet to fully reflect the value being built at NanoExplore. We will continue to communicate openly and regularly with the investment community as that value is realized. To summarize, we are executing on our commitments, expanding our addressable markets, converting our pipeline into revenue, and investing in shareholder value with both capital and conviction. The story of Nano Explorer is one of compounding progress, and Q3 is another step forward. With that, I'll turn it over to Pedro to walk you through our financial results.
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