Good day, ladies and gentlemen. Thank you for standing by. Welcome to NanoXplore fourth quarter 2023 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will 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 automatic message advising your hand is raised. Please note that today's conference is being recorded. I will now hand the conference over to your speaker host for today, Sophie Bhagat. Please go ahead. Merci, opérateur. Bonjour à tous et bienvenue à la conférence téléphonique quatrième trimestre 2023 de NanoXplore. Good morning, everyone, and welcome to NanoXplore fourth quarter and year-end conference call. Today, I'm here with Soroush Nazarpour, our President and CEO, and Pedro Azevedo, our CFO. We will start with our prepared remarks and then a Q&A. Please note that our discussion will include estimates and other forward-looking information, which our actual results may differ from in the future. We invite you to review the cautionary language in yesterday's earnings release and in our MD&A regarding the various factors, assumptions, and risks that could cause our actual results to differ. With that, let me turn it over to Soroush. Merci, Sophie. Hello, everyone, and thank you all for joining our call today. We will first start with a review of the economy and the impact on our business. I will then expand our recent business and commercial development, and I will end my remarks with an update on NanoXplore. After a year of volatility and interest rates hikes by central banks, the economy has proven surprisingly resilient. High labor market, high commodity prices, and the delayed impact of rising interest rates have all helped to sustain growth. While this has set the stage for a period of relative economic calm during the remainder of this year, some signs of slowing growth are emerging on some parts of the economy. Despite these economic uncertainties, our business is growing and our customer forecasts remain strong, as evidenced by our reported financials. Our total revenue increased by 18% from the same quarter last year, increasing from CAD 28 million to CAD 33 million, which is a record quarterly revenue. Also, we closed the year with CAD 123 million of revenue, which is 33% higher than last year and also a record annual revenue. Our gross margin expanded during this quarter again and reached 21%, resulting in a fourth positive Adjusted EBITDA in the last five quarters. In terms of operation, we are performing very well, and I believe this trend will continue in the current fiscal year. We also maintained our healthy balance sheet with more than CAD 36 million of cash on hand. The strength of our current business, along with our healthy balance sheet, will help us execute on our growth strategy as disclosed in our five-year strategy plan. Now, let's talk about our recent business and commercial development related to our five-year strategy plan. Our anode material pilot line is now up and running, and we have fully tested our anode active material products. According to Benchmark Minerals, the United States battery capacity pipeline to 2031 now sits at near 1.2 terawatt hour, which requires around 360,000 tons of anode active material annually. We are planning to produce 8,000 tons per year of anode active material from our upcoming 16,000 tons per year anode and graphene production facility. Even though this facility will supply only a small fraction of North American needs, this is an important milestone for NanoXplore as it paves the way for future expansion in this market. Currently, we are working on the engineering of this facility and are in discussion with suppliers and contractors. We have also shipped samples out to partners and customers for testing and validation. Even though VoltaXplore will be a customer of this facility, we are in discussion with OEMs and their battery production partners to allocate the rest of the capacity. When it comes to the financing of this 300,000 sq ft plant, we'll benefit from federal and provincial Investment Tax Credits, and offtake agreements enable us to secure the credit facility; hence our investment decision is dependent on securing such an offtake contract during the next few months. We're very excited to enter the battery material market, a market where the supply is limited and mainly located in Asia. We have seen several public announcements of new battery projects in Canada also, which will bring a lot of new opportunities for NanoXplore.... Adding to that, our battery research and laboratory located in the vicinity of NanoXplore headquarters is now fully operational. This laboratory is key for our performance additive products and will allow NanoXplore to remain at the forefront of research and development on battery advanced materials. Another aspect of our five-year plan is our investment in advanced composites products, where we leverage graphene performance in light weighting of transportation. We recently acquired a press to support recently awarded program from large commercial vehicle OEM, which will be detailed to our shareholders shortly. We're also receiving strong interest from passenger vehicle OEMs for our sheet molding compound products, and are currently evaluating potential opportunities to capitalize on. Sports car and electric cars are looking to reduce weight, and our graphene solution is appealing to them. This is a very good sign for us and for the graphene market as a whole, as the transportation industry is becoming one of the largest early adopters of graphene, both for batteries and composite light weighting. Moving to the key developments that happened during this quarter with our graphene-related activity. Overall, we are satisfied with our graphene commercialization activity. Testing and validation processes are continuing at an increasing pace in our focused markets, and sales from existing customers increasing each quarter. A clear demonstration that the added value coming from incorporation of graphene are being accepted by our customers. For instance, in the plastic and recycled plastic market, the presence of additives containing graphene can increase several properties, including stiffness, impact resistance, thermal and electrical conductivity, and resistance to degradation. Graphene-enhanced plastics, such as nylon and polyethylene, are selling better to external customers, and the commercial work is advancing on the recycled plastic side, with a few customers already purchasing graphene, and we're expecting to add more. We're also continuing with the drilling fluids, foam, and concrete application. Drilling fluid is an important opportunity for us, as it requires large volumes of graphene in powder form. We are developing our solution with a few global oil and gas companies, one of which is one of the largest in the world. If our solution enters the market, we can expect several tons of graphene to be consumed for every drilling well. Just as a reminder, graphene enhances lubricity and lowers the coefficient of friction, which lead to process efficiency, increasing drilling speed and lowering downtime. Switching to foam, it was proven that graphene increases thermal insulation by more than 10%, improves flame retardancy, and provides a more sustainable solution. We're in discussions with several reputable chemical companies during different stages of validation of our graphene. Results have been consistently promising, and we're confident that we will win business in the insulation foam market. For instance, our discussions with a well-known chemical company is progressing, and we're waiting for official dates for product rollouts. We're also in product validation steps with another leader in the foam market. We're expecting this development to continue in the next year. Another market of interest for us is the concrete market. We are seeing success mainly in the specialty concrete market at this time. We anticipate sales volume to increase further following modification of the related ASTM certification to include graphene. Having said that, larger and more tangible graphene sales volume will come from commodity concrete market. This is an extremely cost-sensitive market, and even though we are the lowest cost supplier of the graphene in the world, performance improvement and cost reduction coming from additional graphene is not yet sufficient for adoption. In other words, for us to enter this market and maintain our target gross margin, we have to produce graphene at lower costs, which will be the case only after commissioning of our 16,000 tons per year graphene and anode material production facility. Switching gears to VoltaXplore. A lot of progress has been made during the last quarter. We signed a deal with a well-known heavy commercial vehicle OEM for supply of lithium-ion battery cells for a duration of 10 years, starting from 2026. This was a key milestone for us and for VoltaXplore investors, and I'm happy that this is done now. Adding to that, we recently announced the appointment of Nicolas Veilleux as the new Director of Automation and Construction of VoltaXplore. Nicolas was previously working as Senior Manager of Cell Controls Engineering at Tesla, and was involved in building Tesla Gigafactories. The appointment of Nicolas, together with the conclusion of our first commercial deal, considerably reduces the risk associated with the construction of VoltaXplore Gigafactory. Moreover, the retooling process at VoltaXplore pilot plant to move from 18650 to 21700 cell format is now complete, and the first cells have been produced.... As a reminder, VoltaXplore Gigafactory will only produce 21700 cells. Finally, we are progressing well on the financing of VoltaXplore, and are getting closer to creating the financing package that will be the most beneficial to our shareholders and the future of our business. We are targeting to conclude the financing this year and start the construction during 2024. With that, I will now give the floor to Pedro, who will discuss the financials and our outlook. Merci, Soroush. Bonjour à tous. Good morning, everyone. Today I will begin with a review of our Q4 financial results, followed by some commentary about our full year performance, and conclude with an update on financing for our five-year plan. Before discussing the results, as you may have seen in the press release, NanoXplore is now reporting financial results in two segments: Advanced Materials, Plastics and Composite Products segment, and the Battery Cells segment. This was necessary so that the financial performance of the VoltaXplore initiative and the historic NanoXplore graphene business be measured independently for our shareholders to see, and because this is how we manage these two main product groups of NanoXplore. Now, jumping to our Q4 performance. Total revenues in Q4 grew 18% versus Q4 2022 to CAD 33.3 million. The increase in revenue continues to be driven by a positive product mix, including graphene-enhanced products, higher volume, mainly in the transportation products, and positive foreign exchange impacts. These items were partially offset by lower tooling revenues. If we exclude our lower tooling, which can fluctuate from quarter to quarter as customers launch new programs, our total revenues grew 21%. Q4 gross margin, excluding depreciation and amortization, was CAD 6.8 million, an increase of CAD 2.4 million compared to last year. This represented a gross margin percentage of sales of 21%, an improvement of 400 basis points year-over-year, and was driven by improved productivity, resulting in part manufacturing cost benefits of producing graphene-enhanced products, higher margin product mix, and better cost controls. Our Adjusted EBITDA was positive CAD 526 thousand, which in itself is another record Adjusted EBITDA for NanoXplore. But this amount includes negative CAD 604 thousand related to the VoltaXplore initiative, which in the past has been excluded from Adjusted EBITDA, and now comprises the totality of the battery cell segment. If we only look at advanced materials, plastics, and composite product segment, we achieved a CAD 1.1 million Adjusted EBITDA, which is a gain of CAD 1 million versus last year, and also a record level for NanoXplore. This is our third quarter in a row, and our fourth in the last five quarters of positive and increasing Adjusted EBITDA. The improvement in our Q4 Adjusted EBITDA was a direct result of higher gross margins, but partly offset by higher SG&A. In Q4, the battery cell segment's Adjusted EBITDA loss, which, as I mentioned, is exclusively the VoltaXplore initiative, was in line with expectations and represents the current operating costs of VoltaXplore as we work to secure offtake agreements and secure the finance, the full financing for the project. With regards to our balance sheet, we ended the year with CAD 36.2 million in cash and cash equivalents, and CAD 10.3 million of available space on our line of credit for a total liquidity of CAD 46.5 million. In addition, for a third quarter in a row, we generated positive operating cash flows. Despite now consolidating VoltaXplore's operations, which had negative CAD 450,000 of operating cash flows, our overall operating cash flows came in at a positive CAD 1.7 million. Our total bank debt now stands at CAD 9.4 million, and was comprised of CAD 7.9 million of long-term and CAD 1.5 million of short-term debt. Turning now to the full year 2023 notable achievements. During our 2023 fiscal year, we grew total revenues by 31% from CAD 94 million to CAD 124 million. We improved gross margins as a percentage of sales from 10.2% in 2022 to 17.3% in 2023. We improved Adjusted EBITDA from -CAD 9.2 million in 2022 to nearly breakeven this year at -CAD 240,000, if we exclude the battery cells segment to be comparable. In addition to the significant improvements to the P&L, we also lowered our working capital by nearly CAD 4 million, despite growing revenues by CAD 30 million, as well as completed the acquisition of XG Sciences, which was an important acquisition for our battery material initiative. In addition to the achievements in our financial performance, during the year, we converted one of our OEM clients to fully graphene-enhanced parts, increased our overall volume of graphene-enhanced products, put in place a pilot manufacturing facility for anode material initiative, made significant progress in making the VoltaXplore Gigafactory a reality, and have begun investments in the SMC Material initiative.... Moving now to the financing of our five-year strategic plan. As a reminder, this does not cover the battery Gigafactory initiative, which is being done separately and through different financing. As mentioned during the Q3 investors call, we are in discussions with our current and potential new lenders on an increased credit facility, and the discussions are progressing. We remain confident to finalize an expansion of the current credit level facility before the current year ends. Given the confidence we have in this achievement, that's being achieved, we have already placed POs for long lead time equipment and began the engineering work for the construction work needed in our new North Carolina facility, both related to the SMC expansion strategic initiative. We currently expect the SMC initiative to be producing returns before calendar year 2024 ends. In closing, I'm very pleased with our financial performance and our various achievements during the 2023 fiscal year. I will use this stage to thank all the employees of NanoXplore in each of our operating companies for their hard work and for having helped us achieve these results in this past year. I would also wish to thank our shareholders for their confidence in NanoXplore. We expect, we expect during our 2024 fiscal year to see the continued adoption by our customers of graphene and graphene-enhanced products, continued improvements in our financial results, and to have made great progress on the initiatives from our five-year strategic plan. With that, I will pass it back to Sophie. Merci, Pedro. Operator, we can now open the line for questions. Ladies and gentlemen, to ask a question at this time, you will need to press star one one on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster. Now, first question coming from the line of Michael Glen with Raymond James. Your line is open. Hey, good morning. Soroush, just circling back to the commercial agreement with VoltaXplore. Can you just discuss, like, was this a customer that was using some of the output from the pilot facility? Were they working with the 18650 or 21700 cells? And can you speak to how the, like, the testing that they were doing, how rigorous it was, and maybe describe some of the steps and process that were undertaken prior to reaching this offtake agreement? I don't hear anything. I don't hear anything. Speaker, you are still on mute. Please unmute. Hello? Hello. We can hear you now. Go ahead, speaker. Michael, can you hear me now? All right? I can hear you, Soroush. Did you hear my question? Yeah, yeah. Okay. Just repeating the question so everyone can follow. The question was the 18650 and 21700, and the testing that has been done by the client on those type of batteries. So first, initially the VoltaXplore plant was doing 18650, now it's converted to 21700. So the validation is done on 18650, but the conversion of 18650 to 21700 is well known in the market. So normally, 21700 are seeing about 50% improved numbers in terms of capacity and in everything. So, right now the testing is happening on 21700, but all the testing that's needed for the customer was done on 18650. Okay, and can you just... Is there any, is there any way to describe this sort of testing that they're working through or, or talk, speak to some of the results that they've seen, from the battery, from the testing that they're doing? What are they looking for exactly? Well, customers, they always have a spec for the batteries that they need. So, the specs that we received, we match the performance of the batteries with those. So, it's not, it's not the other way around. It's not like we have certain batteries and they take it and... No, because we're not the only supplier of the battery for them. So, it's the job of the battery suppliers to match the required spec of the customer with their product. Okay. If we circle back to the battery day from early 2022, April 2022, I'm just wondering, is there any updates as to how we should think about CapEx? Top line gross margin, is there any changes with respect to your initial expectations for the size of the plant, the 2 gigawatts? Is that still the part of the plan? Yeah, the plan is still 2 GWh. In terms of top line, the pricing model for us is a material cost plus a lump sum, and the lump sum covers production cost and gross margin, and gross profit. So, there is some level of fluctuation on the top line, depending on the variation of the raw material prices, but the gross margin is very stable. So, you know, we went in the Battery Day, we assumed general numbers and very flat numbers in terms of price per kilowatt hour. That fluctuates a little bit on the top line, but very similar in terms of the bottom line. It doesn't really change much. So you can correlate the same numbers that has been said in the Battery Day with this contract that also announced. Okay. That was the 25% gross margin that was outlined during that day? Yes. Okay. Thanks. I'll get back in queue. Thank you. That's a reminder, ladies and gentlemen, if you have a question, please press star one one. Our next question coming from the line of Rupert Merer with National Bank Financial. Your line is open. Hi, good morning, everyone. Good morning, Rupert. Following up on the battery plant, what are the hurdles to closing financing? And if you're closing this year, what are the remaining milestones that we should be looking out for? We're just not gonna comment too much about the financing and what's happening at this stage. I can tell you that when you're building any plant, you wanna make sure that you de-risk the construction by having experts and skillful employees. So we hired Nicolas to de-risk that. And also you wanna make sure that your output is allocated to the customers, and that's what we announced as well. So these two were the main two requirements for us to look at the next step. At this point, I don't see any specific hurdles in the process. Having said that, we wanna make sure that the financing package, when it comes to the cost of capital, is the best that we can get in the market in these days. So we're trying to optimize more than, more than just doing this. Okay, thank you. And you had some comments on the fact that your graphene production wasn't increasing. Can you give us some color on how much graphene you're producing today, your 4,000-ton plant? And where is it going? If you can give maybe a little color on which customers or which customer groups you're selling to, how much is in powder form versus the finished products, and any changes quarter-over-quarter? Yeah. So when we look at the target markets, still transportation is the main target market for us. And still, graphene-enhanced masterbatch pellet and also graphene-enhanced mold or SMC materials are the main customers or main formats of the graphene that's being sold. So the graphene powder direct sales are still low, and we are mixing it with different type of medium. And so these two form factors are still the best sellers, and transportation is still the main segment for the graphene itself. Having said that- Current graphene. Yeah. Current graphene. Having said that, we're seeing a growth in both agriculture and industrial and construction. That's happening right now. Any chance you can give us some color on how much of your capacity you're utilizing today? We're not commenting as before about the volumes produced, sold, and anything about that in for the 4,000-ton facility. But as said before, we're expecting that we get out of the remaining capacity and we'll be fully allocated very soon. All right, thank you. Then maybe just one final follow-up there. On the drilling fluids, so looking at that market, you mentioned that the drilling market would use a few tons, and I missed what the reference point was, if it was a time frame or an application. Maybe you could just repeat the timing and opportunity for drilling fluids, please. Well, it's a couple of tons, a few tons, every drilling well. That's what we mentioned. So, you know, you can imagine, in North America, I think it's about 30,000-40,000 wells are being drilled every year. So you can just correlate the numbers and get to a potential addressable market, to the addressable market on that. But it's a few tons every drilling well that we mentioned. And the timing on that market, what would be the hurdles to moving forward with commercialization there? Well, we're still in... These, these three markets, foam, concrete, and drilling fluid, is more of the, the markets that are we're working to expand. It's hard to say when or how much, but we're working now. We are- we're towards the end of the validation step with one large oil and gas company. And again, this type of new products, it's not just getting the product done. You have to roll it out, and we have to see how the market is responding to those products. And if their customers are happy with what they're seeing, the volume can grow. So it's, it's difficult to, to put a number around, the future growth on that market. Okay, thank you. I'll get back in the queue. Thank you. And next we have a follow-up question from Michael, Michael Glen with Raymond James. Your line is open. Oh, hey. Soroush, on the anode material, this was the 8,000 tons per year of anode material. Can you just remind us how the graphene fits into the anode material, and what the benefits of the graphene, using the graphene in the anode material are? Yeah. So the way we are looking at the anode material production, there is a traditional way of turning graphite to spherical graphite and converting it, and putting a coating around it that make it a material called CSPG or coated spherical purified graphite. And there is a way also that we have developed, which is from the path of converting graphite first to graphene, and then wrapping the graphene particles together to make a round particle. So this facility is addressing graphene anode material from both angles, producing anode material from the traditional route, and also producing that from the path of graphene. In reality, anode production, we call it either top-down or bottom-up method. Bottom-up method is the graphene path, and top-down method is the graphene, the graphite path that you go through micronization and dispersion and you produce CSPG on typical path. So this facility will produce both, both material. Okay. And is there any between the both materials, the advantages for the bottom-up approach over the traditional approach are? Can you describe those specifically? Yeah, because, yeah, because if the source of the graphene at the bottom-up approach, you have a slight increase in terms of, capacity, or let's say energy density that the battery will experience. And also you have a little bit better charging speed that comes from the conductivity of the graphene. So there's a slight improvement versus the typical material that's out there. Okay. And just to circle back to the drilling fluids, I'm just trying to remember exactly, like, the primary advantages from using graphene in the drilling fluid application. Can you describe that again? I might have missed it. Yeah. So, so we look at adding graphene to two types of drilling fluids. One is the geothermal drilling fluid, and one is the normal. So in the geothermal fluid, which is a much smaller market, this improves the depth of the drilling that you can achieve. So that's good for deeper well application. And on the normal drilling fluid, it's pretty much a lubricating additive, so it can reduce the friction, it can improve the lifetime of your drilling bits and also reduce the downtime of the drilling. Okay. Okay, thank you. Thank you. And next follow-up question coming from the line of Rupert Merer. Your line is open. Hello again. Just following up on some of the questions from Michael. So if we look at your battery materials, you have the ability to produce a range of different specs for those battery materials. Can you talk about where you're going to hone in on your initial 1 gigawatt hour customer? I imagine you're not going to be throwing in too much silicon into the mix there, given the life requirements for that target market. But can you just talk about what that first battery will look like and maybe how much graphene it might use and how it might compare to competing technologies? All right. So on our battery material, we have different products coming out. One, of course, is the conductive additive products, which is some sort of a conductive carbon black replacement by the graphene. So So that's one set of product, is graphene-enhanced silicon compounds. And there's also anode active material, which is the anode material produced either through a traditional way or through this, through the graphene path, right? So these are the type of products that we are focusing on the battery material side. Now, looking at VoltaXplore. VoltaXplore, when we're looking at the transportation, we have a tendency to limit the amount of silicon that we put in the battery. So, you know, when it comes to application with really long cycle life, like transportation or it's called energy cells, we're looking at, you know, maximum 3%-4% of silicon additives in the anode. We're looking at normally 2% of graphene as conductive material in both anode and cathode side of it. And we're also looking at the typical, the anode active material, which is about 95% of the anode of the battery is coming from those active materials, which, you know, you put them together. Well, I think, you know, close to, I would say, 500 tons of the graphene will be used in that, in that batteries. But again, it's, it's, it's. I have to get back to you with the exact numbers on that. Well, that's, that was helpful. Thank you. And, you, you mentioned with your 16,000-ton plant, that you, your investment decision was going to depend on the outcome of certain contracts. I'm wondering if you can give us some color on that, and, and any initial feedback you might be getting on, your materials from, from your initial customers. Yeah. So they're testing. A couple of these potential customers are testing this material. The sales cycle is much faster in their first battery market, has a strong pull. Battery material supply is limited, and battery producers are all looking for material. So we have a strong pull there that helps the sales cycle. And second, even though we produce from different paths, the final product is pretty clear in terms of the spec that this should have. So the spec of the anode material is coming from the customer to us, and we try to adjust our supply to the specs that came from the customer. So again, this is a lot more clear. When we look at the graphene cells, the graphene doesn't exist in different customer product. We go through a much longer sales cycle with them, and validation takes time. We have standards that we have to pass. When it comes to battery material, it's not like that. So in that dynamic, we should be able to secure contracts for our material, before really deciding to put CAD 120 million or so on the battery material and graphene facility. So our focus is to secure the contracts first, before we decide on allocating capital. Okay. Do you have any sense of what the timing on that could look like, how long the process is for material validation? Well, we're hoping to conclude something the next couple of months. But, I think we're a little bit more flexible when it comes to the battery material, which we cannot start producing or spending capital on those programs before having 2024 started because of the ITC program. So there's some flexibility that we have until that time. But I would say, you know, in the next few months, we should have this secured, and move to the construction step. Okay. Thank you. And then just one final one for me. With the SMC plant, you gave us some color on how that is ramping up and how you're looking for financing solutions. What does the ramp up look like for that plant? I believe you're adding five presses at 2 million pounds each. Does this come on gradually, or is it really a step change in your production volume as you build that plant? Well, with the... So it's Pedro. So the lead times are about a year, and the focus right now is about buying some of the equipment. Yes, some of the presses are gonna be reordered. There's other equipment that are needing to be ordered. But right now the focus is on the construction, the build-out of our current facility in Newton, North Carolina, to be ready to accept those equipment. So right now, the focus over the next six months is really the physical establishment, the construction of the facility, so that it's able to receive the equipment in about nine months now. Is the market there, the customer demand there, so that when you install these plants that you see a step change in volume, or is there more of a gradual ramp up in production from that plant? It'll definitely be a gradual ramp up, but the customers are there. We already have orders for 2026, 2025 and 2026, that we see additional volumes that are needed. So we're putting in place the capacity for that. All right. Very good. I'll leave it there. Thank you. Yeah. Thank you, and I see no further questions in the Q&A queue at this time. I'll turn the call back over to Sophie for any closing remarks. Merci, opérateur. Nous voudrions vous remercier d'avoir participé à cet appel, et nous vous souhaitons une excellente journée. We would like to thank everyone for attending this call, and we wish everyone a great day. Thank you.