Hello everyone, and welcome to Atlantic Sapphire's Q3 Operational Update. I am Johan Andreassen, and with me to present today is, as always, our CFO, Karl Øystein Øyehaug Hello, everyone. As usual, we will open up for a Q&A session after the presentation. You can type your questions directly into the Q&A tab in the Teams window. We will also remind you that we only answer questions from attendees that have identified themselves with name. Johan. Thank you, Karl. We will start with a summary of the biological performance in the third quarter. The net biomass gain in the quarter came in at 1,560 tons, which is up from 1,240 tons in Q2. We saw good performance in July and August, then a slowdown in biomass gain in September, which is linked to the issues that they experienced with appetite drop and elevated mortality in certain systems. In response, we also elected to slow down feeding to de-risk while we were investigating the root cause of the issue. On a positive note, we are continuing to see very low maturation levels across all batches that we currently have in the farm. As of September 30, we had approximately 3,250 tons of standing biomass in the farm, which is lower than we expected in the Q2 update. This is tied to early harvest and lower biomass gain. In Q3, we ended up harvesting approximately 1,050 tons head on gutted weight. As a result of the lower than expected feeding and early harvest, the steady-state standing biomass of 4,200 tons round live weight is now expected to be by the end of the first quarter of next year. That being said, we do have plenty of fish in the Bluehouse that are in good condition health-wise and with a very good growth potential. Switching to the next slide, I want to spend some time on recapping the background for the October sixteenth stock market announcement that we sent out. As announced, fish in certain independent systems was harvested out at suboptimal rates after first experiencing a gradual loss of appetite and later elevated mortality. Other fish that showed similar signs were transferred into other systems that didn't have these issues. Since we started to experience appetite loss, the company has spent a lot of resources to get to the root cause of these challenges using both internal resources as well as external labs and experts, both domestically and abroad. We now know the cause of the issue, which is tied to certain suboptimal operational procedures, which became more of an issue in combination with unfavorable temperatures. Sorry about that. We already have actions in place to avoid running into this issue again in the future. Personally, I'm happy to know that this was that we know what this is and that it is a solvable issue. I also want to underline that no diseases were found and that there is nothing wrong with our water source, nor the way the facility is designed and built. Actions taken after these learnings. One, adjustments to automation programming and minor equipment upgrades, and two, optimization of farm operation and protocols. It is important for us to keep expensive learnings to ourself for competitive reasons. These improvements and changes in the procedures are giving us a competitive advantage versus whoever wants to copy what we're doing. Switching to the next slide, operational focus areas. On this slide, I will update on the most important focus areas in our business, which we also talked about in our last update in August. We expect that these actions will result in significant positive effect on growth rates and biomass gain, while also reducing operational risk. The most important item is our new water chiller system that we have finally started to use. Currently, we have this system up and running in our entire freshwater department, as well as in half of the grow out systems. By end of this month, we expect to have the remaining systems hooked up as well. Why is temperature so important? I think everyone agrees that temperature is one of the most important factors to ensure good growth conditions in fish farming. It is a reason why net pens are placed in countries such as Norway and Chile that has warm winter temperatures and cold, summer temperatures. When you don't have stable temperatures or too high temperatures, it complicates operations significantly. We are farming a fish, salmon, and salmon likes stable, cool temperatures. That being said, we're also farming bacteria in our biofilters, and fluctuations in temperatures creates instability in development of these bacteria cultures and fluctuations in oxygen, ammonia levels, and other changes in multiple, water parameters. Even if salmon can live in fluctuating temperatures and higher temperatures, it makes things more complicated, especially as it relates to the bacteria colonies. Our farm was designed to keep stable temperatures at 14 degrees Celsius. Since our original chiller plant, KEK, broke down back in January of 2021, we have been operating the farm with chillers that have been scattered around the Bluehouse and have been hooked up to each independent grower system. While this has enabled us to grow the fish and keep it alive, it has not given us the temperature stability that we would like to have. In each grower system, there has been a single point of failure in the water chillers, so that when a chiller stops or a heat exchanger must be taken offline for cleaning, the temperature would rise. In the new chiller bank operational now, we are eliminating the impact when a chiller stops, which will happen from time to time, as the new chiller plant is a series of chillers connected with additional capacity. In other words, it has no impact on cooling if two or three chillers are down for maintenance or repair. To expand further on temperatures, the way we have been operating since January 2021 is that we have been sending uncooled, 26 degrees Celsius groundwater from the wells into the systems, relying on the local heat exchangers and chillers in the systems to do all the job on cooling it down. Now we have the capacity to cool the groundwater from the wells down to 14 degrees Celsius or less, which not only reduces the dependency on the local cooling in the systems, but it also gives us a tool to send large volumes of new clean water into a system without increasing the farming temperature, in case we want to improve water quality quickly. The new chiller setup will also enable us to utilize the chillers better, as the chillers we have been using have had too high capacity well, relatively to the heat exchangers they have been hooked up to, leading to inefficiencies in electricity use. With the new setup, we will be able to run chillers at a load where they are optimized in terms of the electrical consumption per ton of cooling. In addition, we will now be able to deploy more of our cooling needs during off-peak hours. Electricity prices are considerably lower during the off-peak hours here in Florida, and this will reduce our power bill. Lower average temperatures will also reduce our consumption of liquid oxygen and chemicals, which is also gonna be contributors to lower our OpEx. This is a huge win for the company that we are celebrating internally. Temperatures has been the biggest challenge to give us the right conditions to farm fish. Now we do believe that this is behind us. That was a lot on temperatures, but I think it deserves that as it is such an important topic for our performance. Over to the other topics we are working on. The additional tank lights that we spoke about last time is now installed in all the systems. This will give us better appetite and reduce risk of early maturation. On the nutritional side, our feed formula improvements have been fully implemented, and we already see positive effects on the fillet color of the fish we are harvesting and the smaller groups of fish that is coming thereafter. This will have a direct impact on price achievement as it reduces the percentage of downgraded fish. We also have a new ozone system up and running. The original ozone system in the farm has never been stable, so most of the farm has been operated with limited ozone or no ozone since we started farming in the United States. Ozone is a tool that improves water clarity by reducing the nutritional load in the water. The water basically looks much clearer and cleaner. This is not only positive for the fish directly, but it also helps us to control water quality. I think that's enough on that slide, and over to you, Karl. Thank you, Johan. Jumping over to price achievement in July, with the first harvest of the new batches, we saw a good improvement in average price achievement to $9.50 per kilo. The price achievement in August and September was a little lower due to harvest of a higher share of small fish, coupled with lower commodity prices for these categories. The price achievement for our superior 3 kilo plus fish was consistent around $12 per kilo mark. In October, you can expect a similar price achievement as in September before we expect it to go back up again with most of the smallest fish harvested out. On the retail location map on the right, the number of stores will gradually increase as we ramp up harvest. Over to the financials. Although we report financials semi-annually, we want to take the opportunity in this operational update to give a summary of the most important financial metrics of the business and what to expect going forward. The group cash position as of September 30th was $53.7 million. Total drawn bank debt at the end of Q3 was $48.6 million, meaning the company was in a net cash position. In Q3, the company was cash flow negative on the operational side. Land-based fish farming comes with a high fixed cost base, making it all about maximizing production volumes. The operational cash losses that we had in Q3 will decrease gradually over the next months as harvest volumes increase until steady state production and cash flow positive operations are achieved. Another important mechanism is that better biological performance will increase both production volumes and product quality, which again will lead to higher average price achievement. Besides the key biological KPIs, the company is focused on reducing its fixed cost base. If you compare the fixed cost base in Q3 to the one reported in the first half of the year, it has been quite stable. In Q3, the run rate fixed cost of production, excluding depreciation and feed, was $3.5 million per month. The overhead cost, the SG&A, was around $1.5 million per month. Added up, the total fixed costs, excluding depreciation to run the company, were around $5 million in the quarter. In Q3, we produced 1,560 tons of fish and had a feed price of $2.4 per kilo, which means that the final piece of information, the final variable to add to the equation to get to our total variable feed cost is the feed conversion ratio. The reason why we bring this up is that these numbers can be used to do some simple but important calculations. The monthly fixed cost, the average price achievement, and the variable cost for incremental kilo produced, multiplied by an assumption on monthly harvest volumes, will dictate the operational cash flow of phase I in any given month. The fact that such a large part of this simple equation is the fixed cost element illustrates the sensitivity to production volumes in our business. To give some further comments on this and the financial side of Bluehouse Farming, the main focus for Atlantic Sapphire right now is to reach profitability. There are three important areas to attack in order to get there. First, higher production volumes. Second, higher price achievement. Third, lower fixed costs. The key to production volumes and higher price achievement is biological performance, as Johan described in detail in the earlier section. On the fixed cost side, we see several opportunities to cut across many different line items. By reducing the fixed costs, we reduce the harvest volume that is required to reach break-even. One example that Johan described in detail in his update is the new chiller bank, and that this is expected to reduce our chiller rental costs and our electricity consumption by as much as a third from what the run rate has been up until today. We expect to start seeing these effects from now on and onwards. Another example, which we also spoke about back in August, is that we expect to spend around $5 million on chemicals in the second half of 2022. We've identified ways to reduce our consumption of caustic soda without impacting the environment of the fish negatively. Further, as pointed out by Johan, the new chiller system allows us to maintain a lower temperature in the farm, which has a direct impact on both chemical and oxygen consumption. The total effect of this may reduce another of our main cost items, the chemicals, by up to a third from the current run rates. This is also a saving that we expect to start seeing over the next weeks. This is something that has happened and where we expect to see a good drop down. In the same way as with both power and chiller rentals and with chemicals, we are working our way through every line item in our P&L as we target profitability next year. Jumping over to the next slide. This slide gives an overview of the current cash position and a cash flow walk from the June equity raise to September 30th. As communicated in the June equity raise, we paid down the $25 million of short-term debt. In Q3, we invested $10 million, the majority of this towards phase II. We also paid down what we had drawn on our RCF facility to avoid having to pay interest expenses for that facility until the liquidity was actually needed. To give some words on the RCF facility, the $20 million RCF facility, less $2 million that we currently are deploying as a letter of credit for equipment leasing, is available for us to draw upon. As normal with these types of borrowing-based facilities, the availability at any point in time is directly tied to the standing biomass we have in the farm and our credit-insured receivables from our customers. In addition, $5.3 million has been paid to the banks in regular repayment of drawn term debt of $1.4 million, quarterly interest and commitment fees. In other fees, the majority of which were tied to the $100 million of additional phase II debt that was granted at the same time as the June equity raise. We have also reduced our accounts payables tied to operations by $7 million. To give some more color there, for example, we have gone from normal payment terms to cash payments on our biggest production input, the feed, which gives us a small discount on the feed price. If you take all of this into account, that leaves us with $21.7 million spent on phase I operations and investments into building more biomass, overhead costs, and all other items in the last months. If you take the cash position as of September 30th, that was $53.7 million. In addition to this, we also have access to draw upon the $20 million RCF as mentioned, and potential proceeds from phase I claims, insurance claims, and any proceeds that we may or may not get from offloading assets in Denmark. I'll switch over to our CapEx update. When it comes to phase II CapEx, the focus since the equity raise in June has been cash conservation. We have invested approximately $80 million in phase II as of September 30th. Importantly, we have limited our phase II CapEx commitments and projected spending to maximum $15 million before access to the $130 million of phase II term debt has been achieved, and when we plan to ramp up CapEx spending further. Out of those $15 million that we plan to spend, around half is actually committed today, so there is still some flexibility left in the $15 million number as well. As we have discussed in the past, we have been experiencing significant inflationary pressure on the CapEx budget, which is why our expected budget back then was adjusted up to $275 million-$300 million. There are no changes to that estimate. In addition to cash conservation, the focus of the construction team remains value engineering and working with our partners to optimize cost and quality for the outstanding phase II CapEx items. Even though that might mean that the project completion date may be pushed out in time. In conclusion, phase II construction spending will be kept at the minimum until phase I breakeven is accomplished. I give the word back to Johan for his comments. Thank you, Karl. In conclusion, we had good performance in July and August, while September and October was slower due to the operational issues that we addressed earlier on the call. We still expect to harvest between 800,000 and 1 million fish in the second half, unchanged from our last guidance in August. On the operations side, stable temperatures and water quality will improve our biological performance, and our focus has been to get this up and running as quickly as possible. As I said earlier, we do expect steady state production and profitability starting by the end of Q1 of next year. On phase II construction, just to double down on what Karl said, value engineering is in focus and we have capped our spending to no more than $15 million until we get the phase II debt unlocked. On fake, we expect additional programs and customers to be brought online as our harvest volumes increases. We also expect our average price achievement to increase in line with increased product quality and size. On the general U.S. salmon market, we do expect a very strong spot market for fresh salmon in the U.S. next year, which will give us an additional upside on the price achievement versus historical Bluehouse premium prices. This is also enhanced, of course, by everything we see in Norway now with the additional harvest before year-end this year. In summary, the focus of the company now is reaching phase I steady state production and profitability. That's all that we think about here in Miami. With that, I will give the word back to you, Karl All right. Thank you, Johan. Then we will move over to the Q&A session. To repeat, please feel free to type your questions directly into the Q&A tab. Also we'd appreciate if you can identify yourself. Going over to the first question, which comes from Alex Aukner at DNB Markets. How many systems are now hooked up to the new chiller system? How many remain? And any elevated risk during the switch from the old to the new system? Johan, would you like to address that? Absolutely, Karl We have a total of 19 independent RAS systems in the facility. The way this is laid out is that we have 3 cooling loops. We call it loop A, B, and C. Loop A is serving all the fresh water systems. Loop B is serving the west side of the property, and in the OGs. Loop C is on the east side. As of today, we have loop A and loop B hooked up, which means that all the fresh water systems, which is a total of 7, is hooked up, and we have all the 6 OGs on the west side, so a total of 13 with 6 systems remaining. For the other part of the question, on the risk, this is being managed very thoroughly, and we are not removing the old infrastructure, the old chillers that are scattered around the building until we have seen that the new chillers and the new setup is able to give the cooling and the stability that we need. The risk is managed. Great. Thank you. Then we also have a second question from Alex Aukner, if you can take at the same time. How many individuals were harvesting during the third quarter? I can start to just comment quickly that we, as Johan mentioned, we're planning to harvest a total of 1 million fish in the second half of the year. We harvested a little bit more than half of those individuals in Q3, which is also why we commented that there was a lower price achievement in Q3 because there was more small fish that was harvested out. You can expect that there's slightly more numbers in Q3 than in Q4. Johan, do you want to add anything to the topic of harvest? No. No. Got it. Our next question comes from Lars-Erik Aas. The lack of microplastic in the meat of the Bluehouse Salmon compared to salmon from traditional old school ocean production must be an advantage in the eyes of consumers. Has this been heard from customers, or is it still too early days for this kind of healthy customer or consumer focus? Johan, you want to give a shot? Sure, yeah. I mean, one of the big differentiators that we have versus any other salmon farmers is that we are sourcing all our water from deep aquifers, deep groundwater sources under the ground here. The Floridan aquifer, where we're sourcing water from, is basically hundreds, if not thousands, of years-old water. There are no man-made contaminants in that water, such as microplastics. This is, I think, an important differentiator that we also in our marketing department are using actively. We aim to have the cleanest, you know, fish in the marketplace available to us, which is lower on microplastics, PCBs, dioxin, et cetera. It is an important attribute, but the first step is to make sure the fish is looking good and tasting good and has the right size. These all additional brand attributes is further down on the list, but absolutely something that we are using. Great. Thank you. Then I'll also read out a second question also from Lars-Erik Aas. Regarding water temperatures and lighting, is this mirrored from actual lighting and temperature experienced in a regular offshore salmon farming? I'll also give the word back to you on to comment a little bit on where the conditions are influenced by. I mean, the temperatures, yes, both from offshore or net pen farming, but also from other post-smolt land-based facilities and research in general. It is quite clear at what temperatures the fish is growing fastest. But you know, there are other reasons why you not necessarily want to be in the optimal growth temperature range at all times. Generally speaking, I would say that increased temperatures means increased risk and complexity. It might be a prudent approach to be targeting a little bit lower than the optimal growth temperature to have a stable and lower risk environment. As it relates to lighting, there's one big difference between our operation and open net pens, and that is that we have the absence of sun. There's no sunlight here. We need to compensate for that both for maturation purposes but also for growth purposes. The fact that the fish actually can see where it swims and how to find food and et cetera. It is not directly comparable with open net pens where you primarily only use feed for a certain period of the year to delay maturation. We have a lot of experts that are working with the leading companies in and around the world to make sure we have the best lighting regime possible. Super. Thank you for the question and the answer, Johan. We move over to two questions from Carl-Emil Kjølås Johannessen from Pareto. The first one is: Should we assume full production from Q2 next year, aka 2.4 thousand tons per quarter, or will it take some time to optimize harvest after maximum biomass is reached? I can answer that question. The answer is yes, we do expect to be in full production from Q2. We have no reason to believe we should not be that. To add to that, when we say that we expect to have a fully stocked farm by the end of Q1, that is our base case. It could also be that we actually have an ability to achieve a fully stocked farm a little bit before that if things go well, which would give us even more time to ramp up. To Johan's comment in the presentation, we have all the healthy fish we need in order to reach steady state production quite early next year. We definitely think it is realistic to be in full production by the end of Q1. The second question from Carl-Emil Kjølås Johannessen is, what temperature are you aiming to have in your grow out tanks when the new water cooling system is fully up and running? Johan, you want to take that one? Yeah. The way it's designed, with the cooling capacity that we have installed, we believe we have the capacity to keep the temperatures under 14 degrees Celsius across the farm. That is where we are aiming to be, to basically make sure it stays under 14. That being said, if it goes up to 15, we don't see a big challenge in that either, especially on the smaller fish sizes that kind of thrives a little bit better in higher temperatures. In general, I would say that 14 degrees Celsius is where we would like to be. Great. Thank you. Next question comes from Christian Nordby at Kepler Cheuvreux. Did you sell all the fish you harvested in Q3 with the cash flow slide, number 8? Or is this something that will be for Q4? No, there is not this much bigger than normal inventory that goes from Q2 to Q4 to answer your question. Of course, at any point in time, there will always be some accounts receivable from fish that has been harvested and where you will collect the money the following month, but nothing more than ordinary. Well, going over to the next question Bent Rølland in SEB. Harvest weight plan for next year, when you expect to break even, is what he is curious about. Johan, you want to comment on our expected harvest weight next year? Absolutely. In an ideal world, this facility should only produce 3-4 kilo fish head on gutted, because that is the industry size, the minimum industry size, that we need to make a 2-3 pound Trim B fillet. Why we are not targeting a higher average rate than that is because bigger fish has a slower growth rate. The higher average rate that we are harvesting, the less fish we will be able to produce. We are finding the ideal spot, which is big enough to get the good prices, but not bigger than necessary. Obviously, we will never be able to farm. We are not farming iPhones here. We will be having a few percentages of fish that are smaller than that and a few percentage of fish that are bigger. Between 3 and 4 kilos HOG is the target. Super. Next question comes from Jone Klinge. Has Atlantic Sapphire experienced an increased interest from customers in the U.S. as a result of the ongoing tax discussion in Norway? I assume that you are referring to customers of the product, not investors. There I would say that we don't see a direct effect of the tax discussion at all. We think that, of course, what is going on in Norway gets a lot of investor focus, without doubt. That there are more people who are interested in looking abroad is the general sense that we have. In the market itself, we don't see any large changes in consumer demand for the products. Johan, feel free to add if you have anything to add on market or taxation for that matter. No, I think for the end customer, they are not aware of the tax discussion in Norway. Most of them are not aware of where Norway is on the map even. I think for the retailers and for our direct customers, obviously they are seeing and have been seeing over the last few years additional risk in the supply chain. They have a preference on sourcing locally produced or domestically produced product whenever they can. Very good. We are through the list of questions published in the Q&A tab. I'll give it a few more seconds to see if there are any last-minute questions that pop up before I'll give the word back to you to come with a concluding remark. Okay. It does not look like we have any more questions. As always, feel free to reach out to us directly after the call if there's anything else that you forgot to ask about. Now I'll give you the word to say thank you. Right, Karl. Yeah. I want to thank everyone that attended this call today. From Miami here I can say that we have never been closer than what we are today. We are very excited about these operational improvements that we finally have in place. It motivates us when we see the beautiful fish swimming in the tanks and we see that our product quality is increasing every month. Obviously, I wish that this should have taken shorter time, but we're getting closer and closer and very excited about the future here. Thank you, everyone. Have a good rest of the day.