Loop Energy Inc.

Good afternoon. My name is Lisa, and I will be your conference operator today. At this time, I would like to welcome everyone to the second quarter 2023 earnings conference call for Loop Energy. All lines have been 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. Loop Energy, you may now begin your conference. Hello and welcome everyone.

Thank you for joining us this afternoon for the second quarter 2023 earnings conference call for Loop Energy. Joining me is our President and Chief Executive Officer, Ben Nyland, and our Chief Financial Officer and Corporate Secretary, Paul Catterford. We will all be available for questions at the end of the call. Before we begin, I would like to clarify that our comments today will include statements and answers to questions that could affect future events and financial performance and could include the use of non-GAAP and non-IFRS measures. These statements are subject to risks, uncertainties, and assumptions accordingly. Actual performance could differ materially from statements made today, so please do not place undue reliance upon them. We also disclaim any obligation to update forward-looking statements, except as required by law. I ask that you read our legal disclaimer and refer to our risks and assumptions outlined in our public disclosures, in particular, the section entitled Forward-Looking Statements and Risk Factors in our Annual Information Form for the year ended December 31, 2022, and our filings, which are available on CDAR+. Second quarter results were released today after market. The press release, financial statements, and MD&A are available on CDAR Plus and our website at loopenergy.com. I would now like to turn the call over to Ben Nyland.

Thank you, Natalie. In my remarks today, I will update you on the three key initiatives we've been focusing on in the first half of 2023 – And then I will provide some brief comments on our strategic engagement with the company's financial advisor, Credit Suisse. Following that, I will pass the call over to Paul Catterford to provide a summary of our second quarter financial results. And following Paul's comments, we will open the lines for Q&A. We remain focused on projects and design wins that provide clear near-term value creation and market opportunities. In this regard, let me update you on the initiatives that I mentioned on our last call. Firstly, we've been working aggressively on completing the development of our low-profile 60-kilowatt unit, which is targeted at the European municipal bus market, where the demand is for low-profile fuel cell systems designed for rooftop installation. Our OEM bus transport customers are seeing municipal purchasers making their decisions based on reduced emissions and climate change mandates. This is a key growth market for Loop, and in the second quarter, we announced the Polish electric bus manufacturer ARPE Vehicles has selected our T605 fuel cell system for its new hydrogen electric bus platform. This announcement marks Loop's third win with European bus manufacturers and its sixth win globally. Under the agreement, our rooftop fuel cell system will be integrated into ARP's new 12-metre hydrogen-electric transit bus for the European market. We anticipate delivery of the first T605 will take place in Q4 2023. Further, on Tuesday, we announced that our value-added distributor in South Korea, NGVI, has secured a supply contract for a hydrogen-electric bus project with a second municipality in that country. This marks Loop's second design win in South Korea in less than one year and provides strong validation for our product in the bus sector. It is also a strong signal of the South Korean market growth potential and accelerated demand for fuel cell adoption. The two-year government project will see the hydrogen electric bus put into operation in the hydrogen hub of Ulsan in South Korea in 2024. By way of background, the serviceable market for fuel cell electric buses across Europe, South Korea, and Australia is estimated to be up to 12,000 units per year. The second key initiative we have been working on is completing the vertical integration of the bipolar plate manufacturing process for our next-gen products. This has been progressing well, and we are bringing the plate manufacturing in-house at our Burnaby facility to improve our product development process and engineering agility. We see this as one of the key pillars to reducing our cost of goods and improving our gross margins over time. The third key initiative is sourcing a strategic partner to develop an electrolyzer using LUT's proprietary eFlow technology. The preliminary test work with Fraunhofer ISE shows that lube can deliver greater efficiency and compelling value in the development of electrolyzers. Our chief scientist, Sean McKinnon, and our chief commercial officer, George Rubin, have been having productive discussions and workshops on this with potential strategic partners. So I will provide you with more of an update on that during our next quarterly call. Now, let me provide a brief update on the strategic initiative we are undertaking with our financial advisor, Credit Suisse. We remain pleased with the level of interest and engagement from potential investors, acquirers, and government partners. In general, we can say that over the last five months, we've reached out to over 120 companies and organizations and continue in active discussions with a number of interested parties. Given the current state of the capital markets and industry, potential investors and acquirers are being thorough. Both the board and the management team remain open-minded and committed to this process and are taking into consideration the best interests of all our stakeholders, including our employees, partners, customers, and, of course, our shareholders. In conclusion, I would say that the global demand for fuel cell solutions in 2023 is very similar to 2022, supporting the comments that we provided last quarter. In this current macroeconomic environment, we continue to see longer decision-making timelines, which has led to delays in commitments and rollouts. This is impacting demand across the value chain, and we are continuing to work collaboratively with our customers and suppliers to adjust our production schedules accordingly. We expect full-year revenue in 2023 to be in line with or slightly above 2022 on a year-over-year basis. subject to current market uncertainty and the risk factors that the company has outlined in the quarterly MD&A and annual information form. With that, I will now turn the call over to Paul Catterford for his review of the second quarter financials for 2023.