Ladies and gentlemen, thank you for standing by. Welcome to the first quarter 2025 NanoXplore Earnings Conference Call. At this time, all participants are in 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 automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Pierre-Yves Terrisse, Vice President of Corporate Development. Please go ahead. Bonjour à tous et bienvenue à la conférence téléphonique du premier trimestre 2025 de NanoXplore. Good morning, everyone, and thank you for joining this discussion of NanoXplore financial and operating results for the first quarter of fiscal 2025. The press release reporting these results was published yesterday after market close and can also be found on our website along with our financial statement and MD&A. These documents are also available on SEDAR+. Before we begin, I'd like to remind you that today's remarks, including management's outlook and answer to questions, contain forward-looking statements. These forward-looking statements represent our expectations as of today, November 7, 2024, and are accordingly subject to change. Such statements are based on assumptions that may not materialize and are subject to risk and uncertainties. Actual results may differ materially, and listeners are cautioned not to place undue reliance on these forward-looking statements. A description of the risk factors that may affect future results is contained in NanoXplore's Annual Information Form available on our corporate website and our filing with the Canadian Securities Administrators on SEDAR+. On the call with me this morning, we have Soroush Nazarpour, NanoXplore's Chief Executive Officer, and Pedro Azevedo, our Chief Financial Officer. After remarks from Soroush and Pedro, we'll open the call to questions from financial analysts. Let me now turn the call over to Soroush. Thank you, PY, and good morning to everyone joining us on the call. I want to first mention that it's always a priority to provide as much information and clarity as we can on our operation and corporate developments, but it has only been six weeks since our last quarterly call, and the level of developments and various initiatives over this period has been limited. Having said that, I will first start with a review of the economy and the impact on our business. I will then expand on our graphene sales activities, capital allocation plans, and I will end my remarks with an update on our dry graphene and CSPG expansion plan. With the recent wave of central banks' rate cuts, we continue to operate in a more favorable macro environment, with inflation and labor costs abating. This, along with increased activities from our customers, resulted in a constructive start of the year, translating into sales of CAD 33.7 million, up 16% year-over-year. Gross margin continued to expand and reach 20.9%. All in all, we're continuing to operate very well, and I expect both sales and gross margin to continue increasing in the current year. Moreover, first quarter Adjusted EBITDA, excluding VoltaXplore, came in at CAD 1.5 million, and with VoltaXplore, it came in at CAD 1.1 million. I would like to congratulate the NanoXplore team for the performance in the quarter. In general, we continue to perform at a high level, and we're executing on our capital allocation priorities. In regard to our direct graphene powder and compound sales activities, validation and testing activities are ongoing. We remain particularly interested in key application areas like drilling fluid, as the test results have been promising and field trials are still in progress. As a refresher, we are focused on the markets that take graphene powder directly, as it presents higher gross margin than graphene-enhanced composite products. For our graphene-enhanced composite products, demand continues to be strong, and our current capacity is almost fully utilized. During the year, we have made investments in new equipment and will continue to invest more as a part of our five-year strategic plan. A large part of these investments will be in the United States and are supported by booked contracts with existing and new customers. As it relates to VoltaXplore, as mentioned in our previous quarterly call, it's a scaled-down project. We have been working on reducing the burn rate, as demonstrated by reduced EBITDA loss of CAD 388,000 from CAD 619,000 the previous year. Regarding our dry graphene and coated spherical purified graphite expansion, we're making progress with potential customers. We continue to see significant demand for CSBG, as the North American market is currently in a supply deficit. We have made further progress with both federal and provincial governments for our financing package, and the process is following its normal course of development. We expect to reach a conclusion by the end of the year. We anticipate construction of the plant to start imminently. Finally, we are waiting for approval from Hydro-Québec to receive 7 megawatts of power for this facility, which is an extra 2 megawatts on top of the normal supply of 5 megawatts. Even though it may look trivial, Québec Province is dealing with electricity allocation issues for projects, and we are discussing with different levels of the government to receive the required power. With that, I'll now turn the call over to Pedro, who will provide details about our financial performance. Pedro? Merci, Soroush. Bonjour à tous, good morning, everyone. Today, I will begin with a review of our Q1, followed by an update on progress of our five-year strategic plan, and conclude with some commentary on near-term CapEx spending and guidance for fiscal year 2025. Total revenues in Q1 were 16% higher than Q1 last year at CAD 33.7 million and were attributable to an increase in both product sales volumes and progress revenue recognition on new tooling being manufactured for three different customers. Tooling revenues will continue to be higher than normal during fiscal year 2025 due to the previously announced expansion of an existing program and the launch of two new programs. Once the tooling for these programs is completed, part revenues will increase with the additional capacity and the new programs starting production. Adjusted gross margins, as a percentage of sales, continued to increase year-over-year and were 20.9% during the quarter, an increase of 110 basis points, and were driven by higher activity levels, improved productivity resulting in part from manufacturing cost benefits of producing graphene-enhanced products, and various manufacturing efficiency improvement initiatives. This year-over-year margin improvement has been a trend over the last nine quarters, and we are pleased that it is continuing. As a reminder to our shareholders and analysts, as the proportion of sales of graphene powder and graphene-enhanced materials increases, gross margins as a percentage of sales will also increase. Adjusted EBITDA was CAD 1.12 million versus a loss of CAD 488,000 last year. Looking at our segments, Adjusted EBITDA was CAD 1.51 million in the advanced materials, plastics, and composite products segment compared to CAD 171,000 last year, and a loss of CAD 388,000 in the battery cells segment, which encompasses VoltaXplore Initiative, compared to a loss of CAD 619,000 last year. VoltaXplore expenditures during the quarter were lower, mainly due to a reduction in spending on external consultants related to battery cells and a refocus on silicon graphene battery materials, which is also part of the VoltaXplore Initiative. With regard to our balance sheet and cash flows, we end the quarter with CAD 21.3 million in cash and cash equivalent and CAD 7.1 million in operating loans and long-term debt. Operating cash flows amounted to negative CAD 2.3 million, which is typical in the first quarter and was a CAD 500,000 improvement versus last year. Cash flows from financing activities were positive CAD 300,000 and include proceeds of CAD 2.3 million of equipment leasing related to our U.S. expansion. Cash flows from investing activities were negative CAD 3.1 million related to capital expenditures payments for the U.S. and Canadian plant expansions. Our cash, along with the unused space in our revolving line of credit, resulted in total liquidity of CAD 31.6 million at September 30th. Moving now to an update on financial aspects of our five-year strategic plan. With regard to the expansion of graphene-enhanced SMC capacity, expansion of our Sainte-Clotilde-de-Beauce plant is in its final phase. Construction of the extension has been completed, and the new press and tooling are in transit. We expect incremental production to start in February 2025. Our U.S. expansion, which includes both graphene-enhanced SMC as well as additional capacity for the composites business, is also underway, with most of the equipment having been ordered. We have reduced our site selection to one of two sites near Newton, North Carolina, and expect to make a final decision on the site and to sign the lease before the end of December 2024. With various equipment expected to be delivered during fiscal Q3 2025, we expect production to start towards the end of our fiscal year 2025. Turning now to our near-term CapEx spending and fiscal year 2025 guidance. Given the U.S. and Canadian expansion initiatives, we expect CapEx spending to be CAD 3-CAD 4 million in each of the next three quarters. This CapEx spending amount does not include spending on the dry graphene and anode battery materials initiative but will be updated once the financing for the battery material initiative is finalized. Finally, with regard to fiscal year 2025 guidance, while parts of our business, namely graphene and some graphene-enhanced materials, are growing at the expected pace, our two largest customers are seeing a slowdown in their near-term growth, and the volume increase we expected is not yet present. In addition, since the U.S. expansion will only begin producing incremental revenues in late fiscal Q4, it will limit its sales impact in this fiscal year. As such, we expect fiscal year 2025 total revenue to be between CAD 140 million and CAD 155 million, which is an implied growth of between 8% and 19%. While this range is unusually high and reflects the current market conditions, we will narrow it as the visibility becomes clearer. With that, I will pass it back to Pierre-Yves. Thank you, Pedro. Operator, we can now open the line for questions. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question will come from Amr Ezzat with Ventum Capital Markets. Your line is now open. Good morning. Congrats on a strong quarter. Thanks for taking my questions. Can we start with some high-level comments on how you think the U.S. elections might impact your business? Well, it's very early, to say the least. It just happened, so we are evaluating the impacts. We are seeing positives in the fact that there might be more interest in bringing the supply chain related to the batteries and as well to the car manufacturing more in the U.S. and Canada. So that's the positive side of that. But we have to wait to see how all those things pans out. So I will probably look more to that question in the next quarter call. Okay, fantastic. Then maybe, Pedro, if we could touch again on your guidance. I mean, we saw PACCAR lower expectations for truck deliveries for the year a few months ago, and there was coverage here in the local press about layoffs at their Sainte-Thérèse plant. Is that what you're referencing, I guess, when you're saying it's the wide range you're giving for 2025? Yes, that's exactly it. It's not just with PACCAR, but Volvo has the same kind of indications. The visibility we have right now seems to be more flattish to last year. It's mainly into Q3, Q4, and we'll see how that plays out, but we still have expectations that some of this might be conservative on their part, and maybe PACCAR, with the layoffs, will be recovering into next year, and maybe that's part of their strategy for the negotiations. That's fantastic, but I mean, when I think about your business, these are, yes, definitely large clients, outsized impact on your sales, but in terms of margins, it's not obviously like graphene powder and the high-margin stuff that we all care about, so I'm wondering, to the extent that you can, can you provide us with some insight on how we should be thinking about sales mix for the year? Is the expectation for you guys to continue to high-grade, I guess, your sales into powder? The biggest impact on the range that we have relates to the part sales to our customers. We have the growth in graphene and graphene composite parts that we have visibility on. That's growing well, and we have some potential upside to even what we're thinking right now into second quarter. However, the biggest impact on revenues really comes from these part sales. So that's what we're speaking about. In terms of margins, you're right. As we sell more graphene and graphene powder, it has an influence on our margins. However, the impact is still fairly small in the big scheme of things, right? Because of the mix of those parts that are more for Volvo and PACCAR and tooling, all of those things have much bigger impact by having reductions of activity. The tooling is set, so the tooling revenues will come in during the next three quarters as they would be normally expected because there's no delays there. It's really the parts. It's the volume that's going to come from those customers that's going to have an impact. But we're feeling very comfortable still with graphene and graphene parts that are not for these two industries, this industry, these two customers, I should say. So that's how you should think of it. Okay, fantastic. That's good color. So the higher margin stuff isn't really impacted and sort of increases while the lower margin stuff. That's right. Yeah. Okay. Then when can we expect you got? I mean, the language in the PR, I guess I thought was good on you guys focusing fiscal 2025 on graphene powder. Then you spoke to drilling fluids and foam applications. When do we start to see some sales? Is that a Q3, Q4 event? How do we think of that? The sales are ongoing to a couple of clients as well. There are new clients joining. The older clients' volumes are increasing. So it's not at a point in time that you have suddenly sales coming in. It's not like that. But some of those markets, like drilling fluid, I mean, there's still impact right now for some of the trials. Still, there are sales happening, but we expect that assuming the clients are happy with the products and what they're seeing is good, so the volume grows more toward, I would say, the second part of the fiscal year. But this is not going to be like it starts and it's going to explode. It's not going to be like that. It's going to be more of an increase quarter on quarter. Understood. So continuous as opposed to a huge step function. O kay. That's it for me. I'll pass the line. Congrats again on the strong quarter. Thanks, Amr. The next question comes from Melissa Dean with National Bank. Your line is open. Hi everyone. Just filling in for Rupert here. So for your five-year expansion, can you give us an outlook on how quickly you expect to sell out your new capacity? I know you mentioned for the SMC facility, you already have some sales accounted for there. Anything there would be helpful. The U.S. expansion is going to be over the next few years. The expansion itself will start towards the end of the fiscal year and into the next year where we start seeing the sales. The capacity we're adding will only be selling out probably in 2026, 2027. But we will be, because of the sales cycle, just to understand this, is that the sales cycle is such that we are selling two years out. A lot of the things that we were awarded last year will be starting in 2026, 2027 in those years. So as we fill these plants, we will then add capacity as we continue to win awards and continue to grow the graphene-enhanced SMC materials. Okay, perfect. That's really helpful. And then just on your guidance, for the top line, you mentioned you're expecting a slowdown from your key customers, and you mentioned it would mainly be a Q3, Q4 event. Are you seeing any delays in orders yet in Q2? And have you seen any incremental customer adds during the quarter or from any interest from newer or less exposed markets? For the first part of your question, we're seeing a slowdown in the forecasts. We're not necessarily saying that we're going to be coming down. We don't know. We just have visibility that there's going to be potentially on the lower end. The guidance still shows that we have a robust increase because we believe that these forecasts may be a bit conservative today, and we will update again in the future. Q2 should still be a good quarter with the expected kind of growth double digits for Q2. Q3 and Q4 is the question marks that we have more uncertainty. We're not being pessimistic about Q2 and Q3, Q4. It's more about the uncertainty as to what the numbers we're seeing right now are. We just feel that they may be a bit on the cautious side. Perfect. And just last thing on the gross margin cadence for 2025. You mentioned last quarter that you expect full-year gross profit margin to increase 100 to 200 basis points higher. Do you think that there will be some margin impacts from the slowdown? Or I know you mentioned tooling margins will kind of come down. They were abnormally close to product margins. So do you still expect that 100 to 200 basis points? Absolutely. This will come depending on the volume. If we get closer to the 155, the margin will be higher. If we come closer to the 140, the margin will be lower. And it also depends on the tooling proportionality. Tooling is less profitable, let's say, less margins on that revenue. So depending on the proportionality of those sales, it might be on the lower end. But we still see expansion for sure as an average year- over- year and quarter- over- quarter for sure. Perfect. Thank you. That's it for me. The next question comes from Michael Glen with Raymond James. Your line is open. Hey, good morning. Just looking for an update on the plastic composites business. Is that something where you're seeing some progress with some customers? Plastic composite business? You mean the SMC business? No. I was talking about that acquisition you did a few years ago down in Southwestern Ontario. On the recycling side, yeah. Definitely. Definitely. So as you know, Michael, when we acquire companies, they don't have graphene in their product line. So the focus point for us at the beginning is to introduce graphene. There's a lot of different products in that plant that now benefit from the graphene and graphene-enhanced performance. I would say that that facility, there's definitely impact from the supply of the recycled plastic and the pricing. So there is a constant challenge of matching those raw material costs versus the selling price. So that's a constant battle that we have in that facility. But the interest is the capacity is fully utilized. The interest is there. It's all about us trying to put more of a graphene-enhanced product there. I mean, recently, I think announced in our social media about the graphene-enhanced products from that facility that's being introduced to the market. If you look at our LinkedIn page, you can find the story about that client. These are the type of graphene-enhanced recycled plastic products that we are supplying out to the market. I hadn't seen that, but the end markets that you're seeing most success with out of those initiatives would be what would be the top three end markets? I think packaging and transportation are the main target markets for us. Okay. And then just to go back to the CapEx, can you guys just talk about your near-term CapEx relative to where your liquidity is at the end of the quarter, like your comfort level with being able to meet your capital requirements over the coming quarters? Just some commentary to that. Sure. Well, first and foremost, the liquidity is not an issue right now for us simply because most of the investments that we're making for the U.S. expansion, and even in Canada, are going to be financed through the RBC equipment leasing facility, which is not liquidity. It's effectively equipment leasing. And we already have CAD 5-6 million that's already been spent on deposits of equipment that hasn't been financed yet. So a lot of that cash will come in when we finance the equipment as it arrives into our facilities. So going into the next three quarters until the end of the year, we should be spending about CAD 1-1.5 million just on regular CapEx for maintenance and equipment for all the plants, plus another CAD 2-3 million related to the U.S. investments. But like I said, as these investments get made, as equipment gets received, we then get financed from RBC, and it doesn't touch the liquidity calculation. And the cash that we have today should be increased as the cash comes in from the financing of the equipment itself. So I don't know if that answers your question, but I'm not concerned about the liquidity of the company. Okay. So over the next three quarters, that's about CAD 12 million or CAD 13 million of CapEx that you're expecting. That's right. right. Yeah. Okay. Okay. Perfect. Thank you. Our next question comes from Matthew Key with B. Riley Securities. Your line is open. Hey, good morning, and thank you for taking my question. I wanted to touch a little bit on graphene powder, realized pricing. I think for the last several quarters, I've been modeling at approximately 10,000 per metric ton in my model. As we look ahead to the next few years, is it possible that you'll gradually move that up, or are you pretty comfortable with that ASP over the near to medium term? I think that the pricing will stay close to where it is now. There would be a dry graphene product coming out of that new facility, which is within our five-year plan. That product line itself is designed for a lower sales price. It's designed to compete with the carbon black on a one-to-one basis. So you're talking about CAD 3 a kilo type price range or something in that sense for that product line, but that's going to be in a couple of years in the future. Got it. That's clear. Thank you for that. I guess I just wanted to touch a little bit more on the five-year strategic plan. Obviously, a lot of capacity coming online over the next few years. To what extent do you expect margins will improve just kind of based on economies of scale? Will that be a notable impact that kind of we'll see in our model as we get out to that? Well, so the expansion, just to kind of put it in perspective, a lot of the expansion that's already been committed to right now as we speak is all in downstream applications. It's in SMC materials. It's in the ability to actually capture that part of graphene-enhanced materials in our product line. So from that perspective, the margins should nudge up a little bit. So I wouldn't see significant improvements on margins, but definitely sales growth, utilization of graphene. But the capacity of graphene production is not running out right now. And the expansion that we're talking about that hasn't been finalized, but hopefully in the next few months, we'll be able to confirm something. The anode production, anode materials production, along with dry process graphene, coming online in a couple of years, that is, depending on the volume that we're able to achieve, that should have a noticeable impact on our margins overall by probably a few basis points, a few hundred basis points when that comes online. But like Soroush said, this is a couple of years from now, but we have line of sight in that aspect, and the margins should really give a good nice boost only at that time. Got it. Super helpful. That's it for me, and great job in the quarter. Thank you. Thank you. The next question comes from MacMurray Whale with Cormark Securities. Your line is open. Hi. Just a quick call, quick question on the SG&A. It's come down a lot this quarter. I noticed that if you look at the way it's trend through the year, can you remind us on the seasonality of that? If there's any sort of particular things in the quarter that might not repeat in terms of some savings there? To be honest, I'm not sure I see what you're seeing. The financials were pretty flat to last year in terms of SG&A. Yeah. I'm thinking of the way it goes through the year. It typically trends up. Are you going to expect to see that trend again this year, or are we at a new level? Oh, in terms of percentage, I think that no, I think that that's going to continue to be stable. As the revenues increase, we don't see the SG&A increasing very much, so that should average down, let's say, throughout the year. Just as a reminder, Q1 and Q2 are always the slower parts of the year, let's say. Typically, Q1 more than Q2. And then Q3 and Q4 ramp up more. So as a percentage, typically the second half is better than the first half. Okay. But in terms of there isn't a seasonality, say, on selling that you typically incur a lot more in the other quarters? Not in terms of selling costs. In sales, yes, but SG&A is fairly flat for the business. We don't have a lot of incremental sales costs that are directly related to our sales, like for example, commissions or other things that are directly related to sales process. Okay. And then I think you mentioned this before, but in those three programs that you were awarded last year, one of them is starting up this year. Did you share with us the impact of what proportion of the additional revenue that that first contract is? Yeah. So the first contract is a good question. The first contract is actually going to start sometime in late December, January, and that should have a quarterly. There's a ramp-up period as well, but that should generate about CAD 1 million-CAD 2 million per quarter. It's not right at the first part. It might increase, but right now we don't have sufficient visibility as to that would be, let's say, three or four quarters from now. Okay. And then the other two are coming in 2026. Is that a calendar 2026? It'll be no, it'll be financial period 2026. Okay. Could be 2026, 2027, though. Okay. Okay. Great. Those are all my questions. Thanks, guys. One thing is the expansion that's occurring in Sainte-Clotilde-de-Beauce, though. We expect some additional volume to come in starting next quarter, probably in February or March. Yeah. But that's still a question mark as to when it starts. The production capacity will be available. Whether the production starts is dependent on our PACCAR in this case, the activity volumes from them. Okay. Okay. Great. That's all my questions. Thanks. Okay. I show no further questions at this time. I would now like to turn the call back over to Pierre for closing remarks. Thank you, operator. We would like to thank everyone for participating in this call, and we wish everyone a great day. Thank you very much.