Loop Energy Inc.

Good morning. My name is Chantel, and I will be your conference operator today. At this time, I would like to welcome everyone to the Loop Energy Q3 Financial Results Conference Call. All lines will be placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I will now hand the call over to Damian Towns. Loop Energy's Chief Financial Officer and Corporate Secretary.

Thank you. Good morning, everyone. My name is Damian Towns, and I have the privilege of being the Chief Financial Officer and Corporate Secretary of Loop Energy. Joining me today for our Q3 2022 results conference call is Loop Energy's President and CEO, Ben Nyland. Yesterday, after market close, the company filed its MD&A financial statements and news release for the three and nine months ended September 30th, 2022, which can be found on our website at www.loopenergy.com. I would like to remind our listeners that our comments and answers to your questions today may contain forward-looking information. Forward-looking information, by its nature, is subject to risks and uncertainties that may cause stated outcomes to differ materially from the actual outcomes. Certain material factors or assumptions were applied in drawing the conclusions or making the forecast or projections which are included in the forward-looking information. Listeners are warned not to place undue reliance on forward-looking statements. please refer to our 2021 Annual Information Form dated March 23, 2022 for more information. I would also like to caution our listeners that any projection provided today regarding Luke's future financial performance are effective as of today's date, November 3, 2022. It is our policy not to comment or update this guidance between quarters. I would now like to turn the call over to Luke's President and CEO, Mr. Ben Nyland, for his initial comments.

Thank you, Damian. Welcome, everybody. Q3 has been another great quarter of momentum in both our industry and our company. The themes of industry and corporate growth that we outlined in our last quarterly call have continued with the result of building our momentum and strengthening our company. As a reminder, the themes we discussed on the last call were that LUT's continued successful execution of our business plan is resulting in us exceeding the targets that we have set up for ourselves. The second theme is that ongoing growth in the zero-emission commercial mobility vehicle space, and specifically the recognition of the critical role fuel cells are expected to play in this arena. And the third is that there's growing momentum in the macro environment for both hydrogen and fuel cells. We are seeing growth in all sectors of our business, staff, resources, customers, orders, and perhaps most importantly, revenue. In the first nine months of 2022, we have already exceeded our original target of 60 purchase orders and are well on our way to our revised target of 100 purchase orders this year. In the first nine months, we have almost doubled our 2021 annual revenues and almost tripled the number of units shipped. Our customer base continues to grow with almost double the number of customers in our customer adoption cycle than we had at the beginning of the year. We feel it is particularly notable that we have had zero customer attrition from our customer adoption cycle ever. A testament, we believe, to the quality of both our products and the customer service that we provide. We have more than tripled our staff since our IPO in February 2021. This team demonstrates day in and day out a desire to go above and beyond the call of duty. It is only through this type of exceptional effort that companies can achieve the continuously improving results that we are. To accommodate this growth in staff and activity, we have added manufacturing service and support facilities in Vancouver and Shanghai and a service and distribution center in the UK. This expanded global footprint positions Loop very well to effectively service our customers today while building capacity to service the growing needs tomorrow. Major economies around the world continue to pour resources into clean energy technologies in general, and hydrogen in particular. Europe's momentum continues with the recent announcement of the ban on all new internal combustion cars and vans as of 2035. The creation of the European Hydrogen Bank and numerous other announcements. In Q3, the United States passed the Inflation Reduction Act, which included landmark provisions for the build-out of clean energy infrastructure across the United States. These provisions included some of the most aggressive production tax credits for green hydrogen that have ever been rolled out. The expected impact of this incentive is to drive up the production and drive down the cost per kilogram of green hydrogen. This effort parallels similar initiatives in Europe and China to dramatically increase the cost competitiveness of hydrogen. We believe that major anticipated reductions in hydrogen costs from programs like the Inflation Reduction Act may pave the way for TCO parity with diesel vehicles on a complete CapEx and OpEx basis. We would expect such a development to result in a tipping point and dramatic escalation in the quantity of hydrogen fuel cell-powered vehicles deployed. We believe that with the launch of our newest product line, our continually growing customer base, and rapidly growing order book, Loop is positioning to be one of the leading fuel cell engine suppliers in the world. The third quarter was particularly strong in terms of customer activity. we began the quarter with the announcement of the supply agreement with Teva, becoming our first loop customer to enter the commercialization phase of our customer adoption cycle. This agreement, which carries a minimum purchase commitment of U.S. $12 million by the end of 2023, set the stage for a strong finish to 2022 and solid growth in 2023. Teva's commitment to hydrogen vehicles was underscored by their announcement of both their 7.5-ton and 19-ton products during the quarter. During Q3, Loop delivered some of the first systems covered by this supply agreement. Teva wasn't the only customer moving through the customer adoption cycle. In August, we were able to announce that Mobility and Innovation, a manufacturer of buses for the European market, had moved from pilot phase to scale-up phase with the order of an additional 10 loop fuel cell systems. These orders came after a successful European tour of the first M&I loop bus resulted in strong customer demand. Our expansion in the bus vertical continues across the core markets. NGVI in Korea in September, ARCC in Australia in October, and Rampini in Italy just a few weeks ago. Rampini is an Italian manufacturer of buses and trucks with over 50 years of distinguished history in the specialty vehicle service, design, and manufacturing sectors. As a company, they decided to turn away from diesel and internal combustion engines in 2018 and towards the future of electric vehicles and fuel cells. Rampini brings decades of experience developing bus, truck, and specialty vehicles for the European market. With that comes not only deep expertise in vehicle development and manufacture, but a wide and very well-respected set of channels into the European market. They have selected Loop's 30 kilowatt fuel cell module after a rigorous testing process. We are very proud to have been selected by Rampini and are looking forward to a long and prosperous relationship together. We believe the success of our product offerings is a result of, among other things, a strong grounding in performance, specifically fuel consumption in buses and trucks. We believe that our recent market experience confirms two things. First, that our products perform as advertised and better in the field. And second, our focus on fuel efficiency as a key value proposition is being recognized and rewarded by the market. In addition to growing our customer base and product shipments, we continue to advance our technology into new products. In September, we launched the first product from our next generation platform at the IAA Transportation in Hannover, Germany. Our next generation platform takes advantage of a larger plate combined with our learnings from the first generation to deliver further improved efficiency and performance with an increased available set of power ranges. Our next generation plate is designed to support products ranging from 60 to 300 kilowatts in single and multi-stack configurations. The first product launched at IAA was our 120-kilowatt single-stack fuel cell module. This larger-sized module opens new markets for Loop products and, more importantly, continues to enhance Loop's core value propositions of greater fuel efficiency, power, and durability. We believe that a strong sense of urgency is required for fuel cell companies to effectively address the needs of climate change and energy security. For this reason, we chose to model a new level of transparency for the fuel cell industry. We published the fuel efficiency for this new module, not just at a single carefully selected operating point, but across the entire operating range of the module. We believe this is essential information that vehicle manufacturers and operators need to know in order to make informed and expedient decisions in the transition to zero emission commercial vehicles. We believe this efficiency curve shows that a user of a vehicle powered by a loop 120 kilowatt system could expect fuel cost parity with a comparable diesel vehicle, assuming today's hydrogen and diesel prices. We believe that this fuel cost parity is a critical step forward towards a competitive total cost of ownership between today's internal combustion vehicles and fuel cell vehicles. As many in the industry We believe the achievement of total cost of ownership parity with diesel may represent a tipping point for adoption of fuel cell vehicles. We believe loop products can help get the industry to that tipping point faster, and that objective will continue to drive our innovation, product development, and go-to-market plans. In addition to the advancement of our fuel cell product line, we continue to progress our work in electrolyzers. Development work on the use of eFlow and electrolyzers continues to progress with our partners, and we look forward to providing updates on the results of this work in the coming months. I'd like to now turn the call back over to Luke CFO Damien Towns.