PyroGenesis Inc.

Good day, and thank you for standing by. Welcome to the Pyrogenesis Canada First Quarter 2022 Business Update Conference Call. At this time, all participants are on a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your first speaker today, to Rodina Cafal, Vice President, Investor Relations. Please go ahead.

Thank you. Good morning, and thank you for joining Paragenesis' first quarter 2022 Financial Results and Business Updates Conference Call. On the call with us today are Peter Pascali, Chief Executive Officer, Andre Manella, Chief Financial Officer, Costa, the Packers Controller, and Steve McCormick, Vice President, Corporate Affairs of Paragenesis. The company issued a press release yesterday on May 16, 2022, containing business update and financial results for the 2022 first quarter ended March 31, 2022, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact the IR department. The company's management will now provide prepared remarks reviewing the financial and operational results for the 2022 first quarter ended March 31st, 2022. I would like to remind everyone that this discussion will include forward-looking information that is based on certain assumptions and is subject to risk and uncertainties that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information. Forward-looking information provided in this call speaks only as of the date of this call and is based on the plans, beliefs, estimates, projections, expectations, opinions, and assumptions of management as of today's date. There can be no assurance that forward-looking information will prove to be accurate, and you should not place and do reliance on forward-looking information. Prior genesis disclaims any obligation to update any forward-looking information or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law. In addition, during the course of this call, there may also be reference to certain non-IFRS financial measures, including references to adjusted net loss and adjusted EBITDA, which do not have any standardized meaning under IFRS, and therefore may not be comparable to similar measures presented by other companies. For more information about both forward-looking information and non-IFRS financial measures, including a reconciliation of each of adjusted net loss and adjusted epic delta net loss, please refer to the company's management discussion and analysis, which, along with the financial statements, are available on the company's website at www.paragenesis.com and the company's corporate filings on CEDAR With that, I will now turn the call over to Peter Pascali, President and Chief Executive Officer. Please go ahead, Peter.

Thank you very much, Rubina, and thanks for everyone for joining us today on this call. To say that I'm disappointed would be an understatement because what should have been one of our best quarters was negated by logistic issues being dealt with by our clients. In fact, this is the first quarter throughout the pandemic where logistics issues have impacted our bottom line. But although I'm disappointed for investors and for our production team, because as I said, this should have been one of our best quarters, I'm extremely excited at where we are, where we're going, and the foundation upon which we have built. this company, as you'll soon see as we peel back the numbers for you. I'm pleased to report that we continue to execute on our business growth strategy by offering technology solutions that provide benefits from greenhouse gas emissions reduction. We also continue to build upon established customer relationships, introducing new solutions, and entering new markets. which is setting us up for ongoing success for years to come. Despite the continuing challenges of the global marketplace due to COVID, plus new challenges resulting from the conflict in Ukraine, as well as energy supply shortages in Europe and China, impacting both the cost and output of aluminum and steel opportunities for aerogenesis continue to expand across the board. In fact, these factors and the global push towards fossil fuel reduction at both industry and government levels give us the ability to further showcase the pyrogenesis advantage. We expect that the tailwind into an already strong pipeline will continue throughout 2022 and beyond. The company's backlog of signed contracts is 41.2 million. We expect to maintain this backlog and more than likely raced past the 50 million mark due to the numerous proposals and bids well underway with many more in development. We maintain our competitive advantage by remaining at the forefront of technology development and commercialization. Excuse me. Our core competencies allow Pyrogenesis to lead the way in providing innovative, ultra-high temperature solutions including plasma torches, plasma waste processes, metallurgical processes, and engineering services to the global marketplace of heavy industry sectors such as aluminum, steelmaking, and iron ore production. Additionally, since our acquisition of Pyro Green Gas, we now offer technologies, equipment, and expertise in the area of biogas upgrading and air pollution control which further demonstrates our commitment to offer technology solutions that provide benefits from greenhouse gas emissions reduction. World events in 2022 have served to highlight how our technology solutions are now in even greater demand. In particular, the conflict in the Ukraine has demonstrated once again how geopolitical influences will continue to impact the supply of metals that are already under extraordinary supply pressure. As the war in the Ukraine drove supply chain issues with additional sanctions on Russia, aluminum spot prices spiked as high as 60% year-over-year in March 2022, up to $3,487 a ton, which was a 30-year high. The conflict has also fully exposed the vulnerability of aluminum producers to power availability and energy price uncertainty, and current energy supply challenges are being experienced by European and Asian metal producers were exasperated during the war. All of these factors underscore that with global metal demand growing, anticipated to grow, sorry, by 80% by 2050, and industry carbon reduction targets not yet on track to meet their goals, aluminum producers must find ways to improve their efficiency and increase their yield of high-quality metal from current production, all while lowering their carbon footprint. Our range of technology solutions provide just such an opportunity, with the company's dross rate systems providing industry-leading dross recovery rates of high-quality aluminum in line and on site, with a lower OPEX and lower carbon footprint than all current competing technologies. Additionally, the company's mainstream plasma torch offering provides another technology-driven solution for metal producers looking to reduce their reliance on the volatile natural gas supply chain, or any fossil fuel for that matter, within any aspect of their operations that require metal melting or heating. These same or similar pressures are affecting the global steelmaking industry, into which we have already sold initial torches for final pre-ordered trials. and we expect similar positive outcomes as a result of these additional pressures. For clarity, as stated many times, most of Pyrogenesis' product lines do not depend on environmental initiatives such as tax credits, GHG certificates, environmental subsidies to be economically viable. We believe that with the increased commitments by the steelmaking and aluminum industries to carbon reduction, it is anticipated that our growth drivers will expand and shareholders will see increased value. We believe that the pyrogenesis organic growth will be spurred on by a multitude of events including, one, the natural growth of our existing offerings which continue to accelerate given our strong balance sheet. Two, leveraging off of our insider golden ticket advantage For example, and the fact that the inline hot dross-enabled dross right metal recovery system is installed inside a customer's facility versus the legacy cold dross rotary salt furnace approach that is installed off-site. This allows us to see firsthand some of the additional and peripheral needs of our customers. And three, exploring, testing, and rapidly commercializing new ways to provide unique solutions and value that helps industries deal with some of the most pressing environmental, engineering, and energy problems they have ever seen. Our insider golden ticket provides the opportunity to either cross-sell other products or, ideally, identify new areas of concern that can be addressed uniquely by PyroGenesis' solutions. Over the past several years, PyroGenesis has successfully positioned each of its business lines for rapid growth by strategically partnering with multi-billion dollar entities. These entities have identified PyroGenesis offerings to be unique, in-demand, and commercially viable. We expect that these relationships are now positioned to transition into significant additional revenue streams. I'd like to highlight that we are now one of the largest, if not the fastest growing dross recovery solution in the world. with 11 DrossRite systems in use or slated for delivery to markets around the world, and three more under LOI. Once all systems are fully operational, we will expect to generate recurring revenue from ongoing maintenance and spare parts contracts. We also continue to increase the price and efficiency of our systems and are pitching several more contracts as we speak. During the quarter, we received a $4 million purchase order for the first of three 10-ton DrossRite systems from an existing client. which follows the receipt of an LOI from the existing client in June 2021. We believe this further validation of the success we're having in introducing our environmental technologies within the aluminum industry. Turning now to the steelmaking and iron ore business. As most of you know, steelmaking is one of the most carbon emission intensive industries in the world. estimated to be responsible for between 7% and 12% of all global fossil fuel and greenhouse gas emissions. When combined with iron ore, these two related issues account for almost one quarter of all industrial emissions. The industry continues to be under intense pressure, including huge financial penalties to reduce these emissions. This pressure on the steelmaking industry allows pyrogenesis to expect demand for its upstream iron ore pelletization solution to increase significantly as deal makers look to all aspects of the production life cycle for carbon reduction opportunities. In fact, during the quarter, we announced the scheduling of a factory acceptance test for plasma torches for Client A, a multi-billion dollar international producer of iron ore. Subsequently, on February 8th, we announced the completion of the factory acceptance test and further announced that the torch system would be shipped to the client's facility and it is expected to arrive on or about the end of the second quarter of 2022. On February 1st, we also announced a request for a cost estimate for 36 plasma torches from the same client A. The estimate was provided at a value of between $95 and $115 million. This was for 36 plasma torches from client A that we expect has a need for at least $500 million. In addition, we are proactively targeting other industries which are experiencing significant pressure to reduce greenhouse gases and which utilize fossil fuel burners as well, such as the cement, aluminum, and automotive industries. Additionally, we are also offering plasma torches to emerging niche markets where there's a high probability of ongoing sales from successful implementation. An example of this was our announcement that we had signed a contract with the European Research Center to manufacture and deliver a 50-kilowatt methane plasma torch, which will be used by the client to develop a process to convert hydrocarbons, including methane and greenhouse gas, into useful chemicals such as olefins, thereby significantly reducing greenhouse gases. For each new market we open, we also benefit from providing proprietary spare parts and services. which generates significant recurring revenue, thus complementing our long-term strategy to build a recurring revenue business model. With respect to added manufacturing, we continue to expect to see significant year-over-year improvements in our 3D metal powders offering, as our next-gen facility is now officially online and operational. This new facility incorporates all the previously disclosed benefits, such as increased production rates and lower capital and operating expenditures. Notably, a major tier one global aerospace company has already entered into an agreement with us to formally qualify our powders at considerable expense to the global aerospace company with a view towards having us become a supplier. This qualification process has been ongoing for quite some time as the customer undertakes this critical process in a very methodical manner, analyzing our process, our facilities, and our powders again and again to ensure absolute accuracy. It's a slow but necessary process that speaks to the safety and caution of the aerospace industry. There are additional major top-tier aerospace companies and OEMs in both Europe and North America eagerly awaiting powders from this new state-of-the-art production line, and we are currently in the process of supplying sample powders to them for analysis as we speak. We expect that such developments will continue, will translate into improvements and contributions to revenue by this segment in the mid to long term. In conclusion, Cryogenesis sees 2022 as a foundational year from which we will drive exponential growth and position ourselves as a leader in the market for decades to come. We plan to take advantage of our unique position in the market and our broad offerings to accelerate growth, with a particular emphasis on offerings geared to aggressively reducing greenhouse gas emissions and the world's carbon footprint, while finding and offering solutions to pressing environmental, engineering, and energy challenges while driving cost savings for our clients. I'll be back with some final thoughts at the end, but at this point, I'd like to turn the call over to our Chief Financial Officer, Andre Manella, to go over the financials in detail. Andre, please go ahead.