Good day, everyone, and welcome to the Electrovaya Q2 2023 financial results. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, John Gibson, Chief Financial Officer of Electrovaya. Sir, the floor is yours. Thank you, good evening, everyone. Thanks for joining us today on the call to discuss Electrovaya's Q2 2023 financial results. Today's call is hosted by Dr. Raj DasGupta, CEO of Electrovaya, and myself, John Gibson, CFO. Today, Electrovaya issued a press release concerning its business highlights and financial results for the 3 and 6-month periods ending March 31, 2023. If you would like a copy of the release, you can access it on our website. If you want to view our financial statements and management discussion and analysis, you can access those documents on the SEDAR website at www.sedar.com. As with previous calls, our comments today are subject to the normal provisions relating to forward-looking information. We will provide information relating to the current views regarding market trends, including their size and potential for growth and our competitive position within our target markets. Although we believe that the expectations reflected in such forward-looking statements are reasonable, they do obviously involve risks and uncertainties, and actual results may differ materially from those expressed or implied in such statements. Additional information about factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the company's press release announcing the Q2 fiscal 2023 results and the most recent annual information form and management discussion and analysis under Risks and Uncertainties, as well as in other public disclosure documents filed with the Canadian security regulatory authorities. Also, please note that the numbers discussed on this call are in US dollars unless they are otherwise noted. Now I'll turn the call over to Raj. Thank you, John. Good evening, everyone. Electrovaya is becoming a serious player in the North American battery space. Whether this be on the technology side, where we have recently had a third-party lab validate the exceptional cycle life performance of our Infinity Battery Technology or on the operational side, where we have just demonstrated that we can scale production in a profitable manner. Our fiscal year Q2 was an important marker in our recent history. Not only did we achieve a quarterly record for revenue, we have also made both an EBITDA and net profit. I can't think of too many clean tech or specifically battery tech companies that have reached this milestone. This is a testament to Electrovaya's commitment to focusing on high-margin applications for our unique battery technology and retaining a frugal mindset overall with respect to how we conduct our operations. In today's risk-averse environment, I hope this will become a more valuable and apparent metric for the public and our investors. Our operations team have been doing a phenomenal job in executing our growing order book while navigating continuing challenges with respect to the global supply chain. With respect to purchase orders, we are seeing an accelerating adoption, which is demonstrated in our receipt of over $20 million worth of purchase orders for the quarter. One trend we have noticed is that the overall sales cycle is reducing. For instance, one recent Fortune 100 customer order which we received was achieved without a physical trial, which used to be a feature as a standard part of the sales cycle. Customers are also becoming more familiar with lithium-ion battery technology in general and Electrovaya's specific performance advantages. I believe material handling customers have come to realize that Electrovaya holds the crown in this space for product quality, safety, and longevity. There really is no comparable battery technology in the industry that I know of. If you consider our list of end users, we have the majority of the large US retailers and a growing list of Fortune 500 and Fortune 100 customers. Just looking at the Fortune 100 company list, we have 10% of these companies using Electrovaya batteries in their operations. Considering that many Fortune 100 companies don't operate warehouses at all, this is a very significant share. These corporations all represent significant potential new sales opportunities as we are currently just scratching the surface of their warehousing fleets. Furthermore, they also offer a pathway to other applications for our battery technology, including energy storage and other vehicle applications. Our relationship with Raymond Corp and the Toyota Industries group in general continues to grow. At ProMat, a material handling trade show that we exhibited at this past March, we had Electrovaya-built batteries powering nearly every Raymond vehicle, in addition to vehicles made by Bastian Solutions, a robotics and AGV manufacturer who's also owned by Toyota Industries. We are also actively working on new products. We recently commissioned a new innovative automated assembly module line at our Kitimat location, which will allow us to manufacture a variety of module configurations and will initially be focused on our new high-voltage module. This module will be used in our upcoming high-voltage battery packs, which are being optimized for electric bus and truck applications, in addition to high-performance energy storage applications. We are expecting to start deliveries of some of these systems this calendar year. The company is also well underway with the development of custom integrated high voltage battery systems for our new material handling vehicle series. This system will utilize Electrovaya's next generation battery management system, which allows increased IoT capabilities amongst other features. This next generation BMS will also feature in all Electrovaya material handling products next year. With regards to our solid-state battery development, our team at Electrovaya Labs is making great progress, and we will be providing a more detailed update at our battery technology event on May 17th. Electrovaya is rapidly growing, and we will ultimately need additional capacity. This was one of the driving factors for our U.S. manufacturing expansion in Jamestown, New York. In March, we acquired the site at One Precision Way by purchasing the shares of Sustainable Energy Jamestown. We are also making good progress with respect to reaching an agreement with a government-backed finance institution to provide the necessary funding to outfit the 1st phase of our planned gigafactory. One of the requirements of this institution is to provide a detailed independent engineering review, for which we have engaged with a leading engineering consultancy. Their initial analysis is well underway, and we expect to receive it later this month. The Jamestown gigafactory will be key in enabling Electrovaya to grow further and also access new incentives tied to the Inflation Reduction Act. I'll pass it back to John. Thanks, Raj. To give everyone a brief highlight of the financials, revenue for Q2 fiscal 2023 was $10.5 million compared to $4.3 million in the fiscal Q2 ended March 31, 2022, an increase of 144%. As Raj mentioned, this quarter represents a record for the company in recent history. We are looking to build on this momentum and continue to break these records. We are on track to meet our 2023 guidance of $42 million, and we are anticipating continued sales growth in fiscal year 2023 as production continues to scale to meet demand. The impact of supply chain issues and inflationary pressures continued during the quarter. Gross margin was 25.6% for the quarter, a slight increase from the December quarter, which was 25.2%. Q2 was the last quarter where customers were locked into historical prices from the summer of 2021. In addition to the price increases carried out during 2022, the company has locked in pricing from key suppliers for 2023 deliveries and will be taking advantage of volume discounts where available. We expect to see an increase in the gross margins in calendar 2023. Adjusted EBITDA for the quarter was $0.8 million, compared to a loss of $1.1 million in the prior year. Furthermore, we recorded a net profit of $0.2 million in the quarter, compared to a loss of $2.3 million in the quarter ending March 31st, 2022. We anticipate the company maintaining a positive adjusted EBITDA position for the remainder of fiscal year 2023, with an overall positive figure for the full year. As Raj mentioned, in March 2023, the company completed its purchase of Sustainable Energy Jamestown, which owns the building that will be the location of our U.S. operations. The company took on the assets and liabilities, including a $3.9 million vendor note, which bears a below-market interest rate. In return for the purchase, the company issued a promissory note for $1.05 million. Further details of that transaction are included in the financial statements and the MD&A. At March 31, 2023, the total debt was $16.8 million, which includes these additional debts from the purchase of Sustainable Energy Jamestown, compared to $16.6 million from the prior year. The company is actively managing our cash to reduce our interest charges. The company believes its available liquidity, along with the collection of $8.2 million of accounts receivable and conversion of $5.1 million of inventory into saleable finished goods, as well as receiving an additional $4.7 million of inventory in process, for which deposits have been recorded in prepaid expenses, is adequate working capital to support our anticipated growth. I'll now turn the call over to Raj for the concluding remarks. Thank you, John. I'd like to start my concluding remarks with a short update regarding our Nasdaq application. The company is well underway with the application process. We are of the opinion that we are compliant with respect to their listing requirements, with exception of the current share price. Earlier this year, we received nearly 99% shareholder approval for a share consolidation, which would lead to an adjusted share price that would meet the Nasdaq listing requirements. At the time when management believes we are imminently close to executing on the Nasdaq listing, we will act on this authorization and move forward with the share consolidation. I personally believe that by listing on Nasdaq, we will improve the company's overall visibility and enable a much larger pool of investors to consider Electrovaya. In conclusion, it has been a successful period at Electrovaya. We are on track to hit our fiscal guidance, have met our internal goals with respect to deliveries and profitability, and are also setting the stage for our US expansion. I believe our technology offers a unique value proposition, especially with regards to the cycle life and safety of our lithium-ion battery products. This technology differentiation is vital to the company's ability to retain strong gross margins and expand our business into new heavy-duty markets. That concludes our remarks this evening. John and I would be pleased to hold a question and answer session. Matthew, please open the line for questions. Certainly. At this time, we'll be conducting a question and answer session. If you have any questions or comments, please press star 1 on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star 1 on your phone. Please hold while we poll for questions. Your 1st question is coming from Amit Dayal from H.C. Wainwright. Your line is live. Thank you. Good afternoon, everyone. Raj, with respect to the Jamestown facility, once this engineering report is completed, you know, what's the timeline from that point to you guys, you know, moving forward in the next steps, and what are those milestones? I would expect us to execute on the term sheet pretty much right away, when the engineering review is complete, assuming the engineering review is favorable. You know, there's that risk. We're pretty close to executing on this term sheet. Understood. Okay. In terms of the facility that the U.S. government facility that you are trying to obtain for this, you know, what's the size? I don't know if you have shared that previously. Like, how much are we looking for to get this up and running? Ultimately, this facility will be over a gigawatt hour in capacity. That said, the 1st phase of the project will be looking at more like a third of that capacity because that's what the existing building can handle, and that's what we're looking to finance in this 1st phase. Okay. Understood. Just with respect to the operating expenses for the remaining two quarters for this year, are you expecting any increases, or should we expect steady state, you know, relative to current levels? Yeah, I expect it to be relative to current levels. We don't see any significant increases in the coming months. We've got good visibility from a production standpoint. I don't expect to see any one-offs. Thank you, John. Then just maybe one last question. You know, congrats on some of the, you know, positive results for the Infinity Battery Technology. You know, would there be any overlap with the SSB offering that you guys are also developing in terms of end applications or markets you may be pursuing for these two different batteries? I would say they're complementary. The Infinity Battery Technology is unique. It's got extremely long cycle life, and it's got energy density comparable to typical automotive-grade lithium-ion battery technologies. On the cycle life, you know, we're four, five times the cycle life of a typical lithium-ion battery. In fact, if you compare it to your cell phone battery, you're looking at even higher multiples. The solid-state battery platform that we're developing, that has got completely different performance attributes. In terms of energy density, you're looking at almost doubling the energy density, especially on a volumetric basis. When it comes to cycle life, we're not targeting anything near the Infinity Battery Technology. It is targeting different applications altogether. While the Infinity Battery platform is targeting heavy-duty one or more cycle per day applications, the solid-state battery platform will be targeting high-performance vehicles, which are looking for extremely high energy density for long range or high performance or even new applications like electric aircraft. That said, the solid-state battery platform is definitely still in development. We're not at a stage where we can predict the commercializability of it just yet. Okay. Understood. Is the Infinity battery ready for pilot-type, testing with potential customers? Any interest? Any inbounds on that one so far? You mean the solid-state or the Infinity? Infinity. The Infinity you know, that's present in all our production today, so it's going into all the material handling applications. We have also been providing that cell to some other specialty applications, for instance, in the defense sector, there are two companies who are evaluating the technology. We are looking of course, as we've publicly said, looking to expand into the electric bus market especially, and the energy storage market, and there are companies who are evaluating the technology for those applications as well. Okay. I understand now. That clarifies it for me. Thank you. Appreciate it. That's all I have, guys. Thank you. Your next question is coming from Eric Stine from Craig-Hallum. Your line is live. Hi, Raj. Hey, John. Hey, Erik. Good to hear you. Hey, good to chat. I just want to come back to the cycle life test results. You know, I know that that was underway for, I think it was 2-3 years. You know, just curious, any prospective customers that were tied to that data, you know, waiting for anything triggered on that? Or would you kind of characterize that more as? You know, now you can go to market with these, you know, I mean, I guess they're not necessarily new results that kind of add on to results you've had third party and other in the past. You know, just maybe how should we think about that? Well, first of all, the testing has taken over three years to spread this data. It's a major effort on the part of the lab and us to make sure that testing is continuing for that long a period. It's really, the way I look at it is it's third-party validation of what we've been telling the market and telling our customers. Internally, we have, of course, test results which mirror what we've been seeing at this third party. Really having a third-party validation is a very good thing to have. It makes sales efforts, it makes it easier for OEMs to select this technology. I think this definitely also will help in providing better residual values for battery systems. For instance, currently, Electrovaya is selling the vast majority of battery systems, whether that be direct sales or through our OEM partners. If our OEM partners decide to lease battery systems, this kind of data will really help improve residual values. The ultimate end result will be a much wider adoption of this technology. If you can have a very strong residual value, even if you have a higher CapEx, this can ultimately be a lower energy storage cost. That could be a game changer. I think these are the factors which feed nicely into that. Got it. Then maybe sticking with the Infinity and, as you're thinking about the high voltage product, maybe obviously that's underway. Maybe just kind of where we stand there. I know that I believe you've been have bid for in the, you've got a large project that you're potentially after. I'm particularly interested in just the opportunity with some of your Fortune 100 in retail customers on the stationary or backup side. Yeah, for sure. The high voltage product line can really be applied to a wide variety of applications. Electric buses, delivery trucks, and energy storage would all use something similar. We have been developing this product for some time, and I think the market timing couldn't be better, right? For the last 2 years, there have been companies in this space who have almost subsidized battery system pricing to win contracts. Of course, that type of mentality can no longer be in place, so those companies are suffering or no longer existing as a result of that. The need for batteries is increasing. The timing is good for us to launch this product line. We have an earlier version of it being trialed on a, on a bus right now. Back to your question, yes. Some of these Fortune 100s have asked us about our technology being implemented in some of their energy storage projects, for instance, and even some of their potential delivery truck applications. It's a nice intro into those, into those types of new applications for us. It would seem to me too that, I mean, the attach rate with some of the customers, I mean, given that they've got, you know, stationary power needs, you know, that they're doing that already with something else, I mean, is it fair to say that you would expect potentially a pretty high attach rate? We could. It's too early to say exactly, but we are actively in discussions with a number of these parties with respect to energy storage in particular. We still have a little bit of engineering development work to do in order for us to be ready to make deliveries to those types of projects. That said, you know, I think we've, we alluded to this last quarter is, you know, we bid with a large energy storage developer on a pretty substantial project. We haven't received word yet on the outcome of the RFP, but there are new opportunities coming up with respect to energy storage. In the current fiscal year, we're pretty tied up with the orders and projects that we have to execute on. It's really, these are things that you should be considering for fiscal 2024 and fiscal 2025. Fiscal 2023 is we're essentially fully booked for material handling projects. Yes. No, understood on that. Maybe last question for me, and this might be tough to answer, but I know, you know, maybe a representative customer. I mean, you're clearly at really early stages. I mean, you're starting to see the growth pick up quite a bit, but you're at early stages of penetration. I mean, is there any way to you know, kind of take a representative customer and say, "Hey, you know, we've got," you know, whatever percentage that may be. Just trying to get a sense of, you know, how early it is and what the growth opportunity is. Yeah. These customers, like especially these Fortune 100 companies, they, in some cases, they operate hundreds of warehouses, and each warehouse is an opportunity size of, let's say on average about $2 million. It's a huge pool that we're potentially playing in. For the most part, these companies are early in their adoption. Some of them are at one warehouse, some of them are at multiple warehouses. But we have a lot of room to grow with these customers. I'd say in terms of penetration, yeah, we're definitely around that. In some cases under 5%, in some cases a little bit more. I'll give you one other example. This Fortune 100 company who recently placed their 1st orders with us, these are for new distribution centers that they're building. Most of these types of companies have mandates now that all new distribution centers will go lithium ion or other, next gen technologies. They do have plans to retrofit existing sites, down the line. Got it. Okay, great color. Thanks. Thank you. Your next question is coming from Aaron Martin from AIGH Investment Partners. Your line is live. Hi, Raj. Hi, John. First of all, I want to say thank you to Eric for allowing someone else to ask a question. Appreciate it. In terms of the revenue this quarter, I know you consider it still part of material handling, but how much revenue was from non-forklift in this quarter? Just over $100,000. Okay. Still not material. Then on the gross margin, obviously a step in the right direction, and I heard what you said in terms of pricing finally, you know, working through the old POs with the lower pricing. You know, where should we expect gross margin to go? You know, is that purely coming from, you know, pricing increases? Are there other stuff that's happening there on the gross margin in terms of the supply chain, you know, working better, that adds to that? It's probably a combination of three things. It's our price increases that were initiated last year, locking in supplier prices and then operational efficiency. We're getting into our groove now in terms of what's actually happening on the floor. There's very little overtime in that quarter, which is very different from where we were at the end of fiscal Q4 last year. We had a lot of overtime to hit that $9.9 million. We're getting better with how we're doing things. We're seeing some prices come down, and we're seeing some supplier prices go up. It's hard to say where they're gonna be by the end of next quarter's, the end of Q3. you know, what we're seeing right now is we expect it to creep up, the gross margins to creep up as we continue to progress through the year. Based upon what you just said, that we're not doing any overtime, Raj talked about us being, you know, basically at capacity for this year. That's, you know, not running extra shifts or anything like that. If we had to, could we run extra shifts? Obviously that would be at lower gross margins. If it's over time, it's slightly more, you know, it's less cost efficient. You know, could we do that if need be? Yeah, we could. We currently run one shift here in the plant. If we wanted to increase that, we can, you know, we can run a four-day, 10-hour shift to give everybody full-time hours, and add another shift on top of that. We still wouldn't be recording any overtime, but we can increase the output. That would involve us hiring more people. That's inevitable as we kind of increase our output from the plant on a monthly, and weekly basis. Yeah. Aaron, we've also been making some building, you know, infrastructure upgrades here to enable higher throughput. We have quite a bit of room to grow still before we max out capacity here in Mississauga. You know, we do see, you know, we're looking, you know, even 6 months, we do see us hitting capacity limits and or getting close to it. Having that operation, you know, a mirrored operation in Jamestown sooner than later is what we're planning. I mean, obviously, in terms of driving with your annual guidance, which you're basically booked for without doing these things, you're talking about going, you know, needing more capacity. It seems like you're being conservative there, but I won't back you into the corner. Just a question for John. On the, on the purchase of the building or the entity that owned the building, obviously it added the asset and the liabilities to your to the balance sheet, then increased the equity. The net income of $170,000, $180,000, that's not including any, you know, non-cash gain from that asset coming onto the balance sheet? Correct. There's no, there's no unrealized gain or revaluation surplus within that $170,000. That net profit is a net profit from operations. It's not- Yeah. Not including the investment. Okay. Correct. All right. Thank you very much, and congratulations on the progress. Thanks, Aaron. Thank you. Your next question is coming from Shawn Severson from Water Tower Research. Your line is live. Great. Thank you. Raj, I was wondering if you could talk a little bit about the pricing you saw. I understand you locked up the supply chain and some supply agreements for this year, for the rest of the year. I'm just wondering on average, is that, are prices up higher or lower relative to the 2022 prices? Are things going up, down, or the same? I mean, is the battle to keep things the same, or are you actually getting pricing down? I think it's going in both directions. It depends on the commodity in question. The net result is our bill of material costs is more or less unchanged. Okay. Second question is I know you got a lot of balls in the air, both in the stationary power and in the commercial side. If you were to boil it down to a couple milestones in each of them that we should look for to kinda, you know. What should we expect, you know, the type of news? Obviously not asking you when, but the type of news flow that we would see coming from each of those respective markets as they develop for you. On the high voltage side, for instance, on energy storage, look out for, you know, potential partnership announcements, maybe even distribution announcements. And then on the bus and other vehicle applications, it would be, you know, what we're seeking really are OEM partnerships. Those take time. We're working diligently to get a few, and they will, you know... We hope we're gonna be successful in getting some new OEM customers for those applications. That also said, we're making wins on the additional OEM partners on the material handling side of things as well. Whether that be just material handling or even on the robotics side. I mentioned in the call that, you know, Bastian Solutions, which is another Toyota company, had our batteries operating at ProMat. We're starting to market through them as well. We're seeing, you know, I would say, additional OEMs in that sector as well. Great. Thank you for the color. Last question is, on the commercial side and on the bus side, in general, are you just placing an incumbent battery provider, or are these types of OEMs that you're talking to? Is there gonna be a new product launch, let's say a new line launch, and you're going to be on that? I'm trying to understand if are these already well established and you're displacing, or are these going to be new programs at OEMs? Everything is a little bit new, because this is a new sector. That said, the projects that we're looking at currently are displacing, other players. Great. Thanks, Raj. Congratulations as well. Thank you. Thanks, Shawn. Thank you. Your next question is coming from Orin Hirschman from AIGH Investment Partners. Your line is live. Hi. Congratulations on the progress as well. A couple of additional questions. Poe Fratt, thank you for letting me ask some questions. Let's say, for example, the bus application, Infinity Technology, is that critical in the bus application, where that's the differentiator for you? Or it's not as critical for the bus application? And what I mean to say is it's very easy to understand for a stationary application for energy storage, how it can make a massive difference in terms of lifetime and financability, et cetera. Does it make as much of a difference on the bus side? Surprisingly, it does. Buses, they traditionally, are looking for at least 12 year life on these buses, and sometimes up to 16 years. They're doing at least 1 cycle on the battery system per day. Wow. Basically no battery system other than ours that can last the lifetime of the, of the bus. That in itself is a major selling point. The second thing that is happening on the bus side is, again, this is a nascent industry in terms of having electric buses, especially in North America, and there have been some safety incidents in the industry. We believe that the bus OEMs are gonna start placing a higher emphasis on safety, and that also plays well into Electrovaya's hand. Those two factors I think are going to beat the capital costs of the solution. This is a good example of a market getting more mature in what they're looking for. Meaning you're saying the capital cost, meaning that it's not just price that makes the difference. You don't have to beat on price because of the advantages on the lifetime, really the IRR is what you're saying, and the safety. Exactly. The tangible. We never wanna beat anyone on price. We wanna sell things at a higher price. Yeah. That's why we're profitable, that's why we wanna remain profitable. We're selling a technology, not a commodity. Okay. On the, on the stationary for energy storage, yeah, I know you still have some work to do. Do you have any idea yet on the calculations or maybe you won't until you're running, you know, a durable system for a certain amount of time in real life, 6 months or 1 year, to understand just the extension of the life cycle, just how far it can go and, you know, what that means? So the stationary application, has the safety aspect come up yet when you've had preliminary discussions? It does to some extent. They have some. There are some new standards coming up, for instance, in New York, where they require some of these new fire propagation tests, which again plays in our favor. Energy storage, for the most part, it's all about the numbers. Again, it fits well with this technology. We talking to our, I guess, our prospective developer partner, they've been informing us there's certain markets where there are more than 1 cycle per day applications for energy storage. One example was the Texas market, and there are a few others. Again, this is similar to the bus segment, where there's a certain degree of maturity forming with respect to the selection criteria of the battery technology. It's no longer just $/kWh, what's the cheapest solution for my energy storage site. It's now I'm looking at lifecycle costs. You're looking at how many cycles you can do on the battery, and even on a little bit on the safety side of things as well. Okay. My last two questions. One is the component side. Is there anything we're having trouble sourcing, the potential for trouble sourcing components, particularly and any power-related semiconductors that to be the silicon carbide or not? I'm unfortunately I should be, but I'm not familiar with what goes into the incipient electronic side. If there's anything that might be a gating factor and will that change at all on the, on the stationary? I'd say for the most part, those concerns are definitely being allayed, right? We did have last year we had a chip shortage for certain microprocessors that we were using in our battery management system. Our engineering team was very quick in redesigning our BMS to use more easily obtainable chips. That was a good example of how nimble our team has been. Now, those types of challenges are definitely decreasing. You know, not to say it couldn't happen again, but right now we don't see any significant supply chain shortages with those key electronic parts. Are there any exotic material semis systems, silicon carbide or anything like that? No. Not that I know of offhand. Okay, great. Okay, thank you so much. Thank you. There are no further questions in the queue. Thank you everybody for your participation. That will conclude today's conference call. Thank you very much and have a good evening. Thank you everyone. This concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.