NanoXplore Inc.

Good day, and thank you for standing by. Welcome to the Q4 2026 Nano Explore Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a 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 one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker for today. Liam Turner, please go ahead.

Bonjour à tous et bienvenue à la conférence téléphonique du quatrième trimestre 2026 de NanoExplore. Good afternoon everyone and thank you for joining the discussion of NanoExplore's financial and operating results for the fourth quarter of fiscal 2026. The press release reporting these results was published after market closed today 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, contain forward-looking statements. These forward-looking statements represent our expectations as of today, September 15, 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 Nano Explore's annual information form available on our corporate website and in our filings with the Canadian Securities Administrators on CDAR+. On the call with me today, we have Rocco Marinaccio, 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.

Thank you, Liam, and good afternoon, everyone. I'm Rocco Marinaccio, President and CEO of NanoXplore, and I'm pleased to have you with us today. to discuss our fourth quarter 2026 results. Reflecting on fiscal 2026, our company made some tremendous breakthroughs and advancements, and I can say with confidence that Nano Explorer is in the strongest position we have ever been in as a company. We have a solid cash position, a robust $35 million pipeline of graphing enhanced solutions business launching over the next 18 months, and a set of exceptional Thank you for joining us today. and are actively promoting and driving commercial tribograph revenues. Most importantly, we advanced our proprietary dry process or D-series graphene technology from development into commercial production, engineering and commissioning a dedicated production line entirely in-house. This capability has already resulted in the launch of new D-series products, opening new markets for the company. We also successfully completed a CEO leadership transition while strengthening our team through the promotions of Nima Moghimian to Chief Technology Officer and Ilia Chliapnikov to Chief Operating Officer. None of these advancements happen without our people. Our team members across every facility are the foundation of everything we've accomplished this year and I want to recognize their dedication and hard work. I'm also proud to say that we achieved our best safety record in company history this year. Reducing our total recordable injury frequency from 9.99 to 3.10. And that commitment to a safe workplace goes hand in hand with the operational discipline that's driving our results. NanoExplore is the global leader in graphene. With up to 5,000 tons of annual capacity, there is no other company that can produce commercial scale graphene while maintaining quality and consistency. We hold over 100 patents and patent applications, protecting our IP, product and process knowledge, and we are one of very few companies legally permitted to produce and sell graphene in Canada, the United States, and Europe. Holding Environment and Climate Change of Canada, Health Canada, EPA and REACH certifications, Nanoexplore's regulatory position in this industry is unmatched. When we built our initial 4,000-ton capacity facility in 2020, we designed it for scale. As we engaged with a broader range of end markets, it became clear that different applications demand different graphene characteristics, and that insight has shaped our platform strategy. Our traditional graphene grades, or X-series, have a high aspect ratio. Put simply, these are thin, long sheets of graphene that offer Our newly launched D-series grades have high surface area, offering attributes such as electrical conductivity, EMI shielding, and UV protection. In either case, we can produce purity levels up to 99.8% when our customers require it. Our platform allows us to tailor grades to specific customer needs. So we're not over-processing material, which allows us to price our products appropriately and in line with market expectations. Let me bring this platform strategy to life with an example. Concrete and cement are multi-billion dollar global industries. Back in 2018, a widely cited study highlighted the performance improvements graphene can bring to cement. We worked with multiple companies at the time. Achieve excellent lab results, but ultimately cannot translate that into commercial traction with our X-series graphene. Our D-series grade has revived that opportunity, and we're now working with one of the top five cement producers globally to bring graphene into mainstream cement applications. We'll provide more details as partnership advances, but I'd caution that it will take several months. We're still in the early stages, and our product is being validated. Before I walk through our individual growth opportunities, I want to take a moment to explain the strategy behind Nanoexplore's acquisitions over the years, because I think it's important context for how you should think about our margin profile going forward. We've acquired several operating companies, and we've done so for two reasons. First, to generate a profit. Developing and commercializing a new material from the ground up is time-consuming and expensive, and these operating businesses provide a source of revenue and cash flow along the way. Second, and more importantly, to demonstrate the value and real-world importance of graphene in actual applications. NanoExplore has successfully integrated graphene into most of the products we produce and sell today. and that track record is a big part of why customers trust us to deliver at commercial scale. The graphene benefits recognized by our customers are the reason we have a large pipeline of business launching over the next 18 months. A pipeline that we expect will build on our EBITDA positive foundation and move NanoExplore towards sustained free cash flow generation. That said, I want to be clear about how this mix shows up in our margins today. Many of the products sold through our existing operating companies carry a lower overall margin profile because graphene represents a relatively small portion of the finished product, typically under 5% loading. As our newer graphene opportunities begin to scale, we expect that mix to change meaningfully. These applications generally involve higher graphene content and therefore carry substantially stronger margins. Tribograph is a good example. It is sold as 100% powder, without the same raw material pass-throughs or transformation costs that dilute margins in some of our finished product businesses. Master batches also sit higher on the value curve, combining plastic with meaningfully higher graphing and loading levels than we see across most of our existing operating company products. As these newer, higher-loading, and higher-margin applications convert into revenue over the coming years, we expect them to become a major driver of margin expansion for NanoExplore as a whole. With that context in mind, I want to walk you through five specific opportunities worth seeing this platform strategy translate into real commercial momentum. Starting with drilling fluids and our tribograph technology, I want to be candid with you because we know this is an area where investors have been watching closely. As a reminder, on September 18, 2025, we announced a multi-year supply agreement with CP Chem for the sale of Tribograph, our proprietary carbon-based formulation additive for drilling fluids. That agreement was the product of more than 18 months of close collaboration between our two teams, spanning extensive lab testing and field well trials. The results were exceptional. Tribograph delivered meaningful cost reductions for operators, and CP Chem has taken the product to market under their own brand, NanoSlide. I want to be transparent with you on where things stand. CP Chem's initial activity forecasts reflected the strength of those well trial results. Since then, CP Chem informed us that they lost a major prospective customer, and based on what they have shared with us, That loss was related to commercial issues on the customer side rather than NanoSlide's performance.