Welcome to Smart Wires Technology Q1 Report 2022. Afterwards, there will be a question and answer session. If you wish to ask a question, please press zero one on your telephone keypad. Today, I'm pleased to present CEO, Peter Wells and CFO, Julie Andrews. Please begin your meeting. Thank you. Please go to page two. Well, good morning, everybody, and welcome to the Smart Wires Technology Ltd Q1 2022 earnings results call. The earnings statement was issued earlier today, and this presentation will give you a high-level overview of that report, leaving time for questions at the end of our presentation. Can we go to page three, please? Forward-looking statement. Any forward-looking information is inherently subject to risk, both known and unknown, and does not constitute a guarantee of future results. Page four, please. In terms of the content today, I'll give you an update on the key market dynamics that we're seeing. These are reinforcing the global opportunities for our business. We'll give you an update on technology adoption, pipeline evolution and backlog, and cover Q1 business highlights for you. Julie will also walk you through Q1 and projected full-year financial performance for 2022. I'll provide a summary at the end, and then we'll take any questions you have. Moving to page five. Some market trends. I often speak to the role of the grid, its critical function in energy transition, and the fundamental needs for technology like ours to help modernize and digitalize the grid. This quarter, I wanted to share some recent proof points on what is happening in the market, starting specifically with the regulatory space. In the United States, the dollars from the IIJA, or otherwise known as the Infrastructure Bill, will start rolling out soon. Specifically, grid resiliency grants will be requesting RFIs, or request for information, followed by SGIG RFIs, will kick off deeper analysis and process, leading to grants that will no doubt include grid-enhancing technology projects across the United States. In addition, the DOE's recent case study on grid-enhancing technology quantifies the savings and impact of technology like ours. This study may well come into play in grant and project funding considerations. New legislation that seeks to accelerate energy transition, like the CHARGE Act, that stands for Connecting Hard to Reach Areas with Renewably Generated Energy, calls on FERC to establish a transmission planning and cost allocation process that ensures transmission operators use grid-enhancing technology. This thinking was further evidenced by FERC directly when they released a notice of proposed rulemaking, otherwise known as a NOPR, requiring investor-owned utilities to consider grid-enhancing technology as part of their traditional transmission planning processes. Notably, the NOPR specifically calls out advanced power flow control, which directly correlates to our SmartValve technology. I also note the open letter shared this week from Congressional Democrats calling on FERC to incentivize the use of technologies that can maximize existing capacity on the electric grid with grid-enhancing technologies like the SmartValve. Please know we're actively involved in all of these efforts and we're very excited about the potential that this is bringing in the U.S. market. In Europe, work continues to advance on the grid through the European Green Deal. Projects of Common Interest and policies like the seventy percent rule, which states that by 2025, EU member states must make at least 70% of capacity on their grid available for trade between EU member states, all continue to make a big effort. This has come under even greater scrutiny with the need of the situation created in the Ukraine. The European Commission has proposed joint European action called REPowerEU, which aims to make Europe independent from Russian fossil fuels well before 2030, further emphasizing the importance of existing and future grid infrastructure to integrate more affordable, secure, and sustainable energy sources. Furthermore, we continue to see tremendous variation in electricity prices for consumers. In many cases, due to supply constraints that often emanate from aging or inadequate grids that fail to transmit lower costs, clean, sustainable energy from regions of abundant supply to regions with high demand. These situations and steps indicate deeper awareness of grid needs, the impact of technology like ours leading to action and increased market opportunities for Smart Wires in the mid to long term. Please go to page six. As the market evolves, so does our sales cycle. It is fair to say that our demand creation model and sales cycle steps have remained consistent, moving through defined and established steps from pilot to platform adoption. The duration of this business development process has changed, however, moving from an average of four to five years to reach scale to two to three years, and clear movement towards platform adoption in key markets and regions with lighthouse customers. We expect this trend for acceleration in sales cycle to continue. In addition, we're seeing some customers move straight to adoption and scaling, leveraging studies and pilots already completed by others. What is happening? Well, we see two key dynamics at play here. First, the market fundamentals are clear and getting stronger. Regulation, energy policy, consumer awareness, pressure points from new renewable projects, and customer progression all demand greater investment in the grid, and moreover, a modern digital grid that can adopt more renewable energy at a greater pace and enable demand-side electrification. Secondly, as our deployments expand, the awareness of and assurance in our technology grows. Well-documented and publicized use cases clearly help. They connect with the market fundamentals, they increase demand and accelerate the sales cycle. The data speaks to this too. We see strong growth in pipeline in lighthouse markets, which in turn leads to growth in revenues from these core markets. In 2022, we have seen pipeline growth of 38%, 77%, and 74% in the U.K., Colombian and Australian markets respectively, which will greatly influence our 2023 revenues. In addition, we see that lighthouse markets will drive more than 70% of our revenues in 2022. Overall, we see two critical takeaways here. The demand creation model works. The sales cycle time is improving, driven by the market and our customers. Moving to page seven. How is this regulatory activity, along with the market trends in general and our demand creation model translating to pipeline, orders and backlog? Well, we see great progress through the first quarter. We are working in well-established large markets of $200 billion-$300 billion of annual spend. Rather than operating in a simple established segment, we are creating a new market for grid-enhancing technology while also competing with incumbent suppliers and legacy solutions. We know that grid-enhancing technology and specifically advanced modular power flow control is resonating. Why? Regulation, policy, customer plans and pipeline growth. In the first quarter, our advantage in late stage deal flow jumped by 54% from $240 million to $370 million, and backlog for 2022 deliveries grew to $60 million. We also have several significant opportunities that we expect to close in the coming quarters that will bring additional delivery potential in 2022, as well as backlog for 2023 and possibly 2024. These are exciting developments and I look forward to sharing more details in future updates. We remain confident in our guidance for $100 million-$120 million in orders in 2022, and thrilled to see lighthouse customers and markets being strong contributors, where we expect more than 50% of our order flow to come from lighthouse markets. Moving to page eight. Focusing now on Q1 2022 in terms of operational highlights. We completed the Grupo Energía Bogotá project in Colombia. This project improves the security of supply and unlocks 252 MW of additional capacity to support economic development in the region. Important to note, we met rapid delivery and commissioning targets on this project. In Austria, we completed the MOVAT demonstration project for the Austrian Power Grid. Again, we met rapid deployment goals, installed, commissioned, piloted and then decommissioned within a narrow window. This work includes extensive studies demonstrating the potential of our technology across the Austrian grid and is, we believe, the first step towards numerous projects in the broader region. On IP, we continue to expand our patent portfolio up to 66 grants worldwide, focused on core tech and value-added features. We note, as before, no prior art giving us early priority dates and strong coverage. We also announced a new chairperson in quarter one, Dr. Michael Howard. Mike is a renowned industry expert with a background in electrical engineering and power electronics. He was the president and CEO of EPRI and retains the title CEO Emeritus of EPRI. He also sits on the board of the World Energy Council. Other key appointments were made in the quarter across the commercial and technology organizations, strengthening our position in key markets and on core technology development. Additionally, after Q1, we confirmed the appointment of Jeremy Knepper, our Senior Vice President of Quality, another key hire to drive product industrialization with process control and continuous improvement underpinning our ability to scale. I'll now hand over to Julie. Thank you, Peter. Good morning, everyone. Now moving on to slide nine. Total revenue for the quarter was $2.7 million. This was in line with our expectations. Q1 revenue was impacted by the transition from our 10-3600 v1.03 product to the 10-1800 v1.04 product, as well as the continued supply chain challenges that are impacting companies around the world. We are taking a number of steps to address the supply chain challenges, including diversifying our supplier base, onshoring where it makes sense, and building additional safety stocks on harder to source items. Taking all of this into consideration, we continue to expect $65 million-$70 million in revenue for 2022, with a significant ramp in the back half of the year as we transition to the v1.04 product. Moving to slide 10. Gross margins were negative 165% for the quarter, compared to a gross margin of 3% in Q1 of 2021. This was driven primarily by lower production volumes in the quarter, driving deleverage of the fixed manufacturing cost base. In addition, a warranty provision of $1 million for earlier generation products, the v1.03, was recorded, which had a negative 37 percentage point impact to gross margins. While the company believes this provision to be adequate for potential issues relating to a limited production run of the v1.03, we will continue to assess on a quarterly basis and adjust as necessary. We expect sequential improvement in gross margins each quarter as we ramp production of the 10-1800 V1.04 product line and expect full-year gross margins to be in the range of 12%-14%. Moving to slide 11. Operating expenses were $16.2 million for the quarter, an increase of 20% over Q1 of 2021. This increase was driven by key investments that were made in mid- to late 2021 in talent acquisitions, moving costs related to the headquarters relocation, increased investment in engineering support, and an increase in stock-based compensation. Moving on to key balance sheet and cash flow items. We ended the quarter with $70.4 million in cash equivalents, and restricted cash, including $11.8 million of restricted cash related to advance payments and performance guarantees for certain customers. Inventory and prepaid assets increased by $9 million from the prior quarter due to purchases and deposits for raw material associated with the launch of the 10-1800 v1.04 product. Total current assets were $112.4 million, compared with current liabilities of $29.9 million that consist of $9.3 million of trade payables, $8.8 million of accrued expenses, and $11.1 million of deferred revenue and customer deposits. Deferred revenue represents milestone payments received to date that are expected to be recognized in the next 12 months. In Q1, the company recorded a right-of-use asset in the amount of $9.7 million and a long-term lease liability of $10.5 million related to the new company headquarters and research facility in Durham, North Carolina. The company anticipates receiving and recording a tenant improvement allowance of approximately $5.1 million in Q2 of 2022. Our cash outflow for the quarter was $31.2 million. The primary use of cash was to fund ongoing operating expenses and inventory and material purchases. Our cash outflow related to inventory was $9 million as we invested in components to launch our new product, the 10-1800 v1.04. In addition, we also had capital expenditures related to our new company headquarters location of $4.2 million. We expect our cash burn to be higher in the first half of 2022 as we invest in inventory ahead of the new product launch, complete our headquarters relocation, and revenue and the related cash payments are lower in the first half of the year as well. We are managing our cash profile through careful management of quarterly spending, driving improved payment terms with both vendors and suppliers, and exploring strategic opportunities. Moving to slide 12. We are reiterating our guidance for the full year of 2022. We anticipate orders to be in the range of $100 million-$120 million, revenue to be in the range of $65 million-$70 million, gross margins in the 12%-14% range, and an EBITDA loss of $57 million-$62 million for the full year. This guidance is highly sensitive to our assumptions of the impact of global supply chain challenges related to component availability, sub-assembly production, and logistics. As actual conditions differ from these assumptions in either a positive or negative way, we may need to update this guidance and will provide calibration in future releases. Now back to Peter with a summary. Thanks, Julie. Let's go to page 13, please. As a reminder, we are in the energy transition business. At Smart Wires, we reimagine the grid with innovative technology and analytics that provide digital, controllable, and optimized power systems. This will enable renewable energy adoption and consumer electrification at the pace and scale required for a net zero world. Look, this is not just an important vision or a mission statement, but the reality of who we are, what we do, and our purpose and potential. Don't get lost in the noise of reports on the gigawatts of renewable energy projects needed and the studies indicating we are falling way behind, or the excitement around EVs and e-mobility and the possible solutions to intermittent renewable generation from storage solutions. No. While these are undeniably important elements of our future, they are impossible to deliver without a digital grid platform. To be blunt, the energy transition won't happen without a new grid. That new grid cannot be delivered without grid-enhancing technology. When you consider grid-enhancing technology, nothing rivals the power and potential of the Smart Wires SmartValve. We see a very clear pathway. Applications that solve current problems, services that deliver critical grid integration and flexibility, and finally, a digital platform that takes renewable energy adoption and demand-side electrification to an unprecedented level, a new grid paradigm. Our ability, therefore, to drive and support technology adoption, industrialize, and scale is critical. I referenced some key performance indicators in these areas on our last call and have some updates today. On technology adoption, I focus on two areas, patent portfolio and Net Promoter Score. In both areas, we have positive progress. Our patent portfolio stepped up to 66, and our Net Promoter Score is sitting at 42. I should also note the incredible market signals and action we are seeing on regulations, policy, and lighthouse markets. Secondly, on industrialization, I noted on-time delivery and product cost reduction. We face challenges here, and to a large extent, these are driven by the global supply chain situation. Even so, we remain confident that we can deliver on-time project commissioning for our customers and cost reduction will come through. Consider the following data points. The number of parts per SmartValve is dropping from almost 32,000 in the v1.03 to about 20,000 in the v1.04. That's almost 40% down. Cost pressure remains, but we believe we have a strong grasp of the situation, great momentum, and huge potential. On supply chain, we have a clear strategy that is established and well into execution mode. Lastly, on growth, when it comes to orders guidance of $100 million-$120 million and gross margins of 12%-14%, we remain very confident on meeting these goals despite the back-end-loaded year. Why? We always knew this year would be skewed. Moving the headquarters, introducing a new product, and so on. The real measure is annual rather than quarterly. Our deal flow is getting stronger and volume will support gross margin improvements in 2022 compared to 2021. Of note, we also continue to build and strengthen our mid- to long-term position. I remain very confident in who we are, what we are, and why our technology is vital. The market signals are so compelling and our journey, while challenged with outdated market designs and global supply chain headwinds, is on track for a strong 2022, followed by an even stronger 2023. If you're an investor, thank you for your support. If you're thinking about us, thanks for following our business. As always, we appreciate the time you've given us today, and we can now take any questions you may have. Thank you. Thank you. If you wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There will be a brief pause while questions are being registered. There are no questions at this time. I hand over to you, Peter and Julie. Okay. We have a question that came in from Gard with Pareto via the email that we'll talk about. He's asking about the pipeline growth in Lighthouse Market, which we show on page six of the PowerPoint slide of $842 million, which is meaningfully higher than the defined late-stage deal flow in the report at $370 million. Can you comment on the advanced pipeline figure in the Lighthouse Market? Yeah. Hey, Gard. Thanks for the question. Well, that you're sort of comparing different numbers really, Gard. $842 million, I do agree with you that it is very significant and encouraging, is part of the overall total pipeline. A subset of that is in the late-stage advancement. Obviously, I would say a significant part of the $370 million number is made up of Lighthouse markets and Lighthouse customers. I would prefer not to give the specific number, to be honest. It's somewhat commercially sensitive because it's not too difficult to figure out for our competitors who we're working with. I'd rather not go to specifics. But it is a decent chunk of that number. Of course, the $370 million is Lighthouse. We've seen a significant uptick in that this year, really driven by all of the factors that we were talking about today. The markets are clearly demanding movement now, and we see that traction coming. Good. Thank you, Peter. Although we see political developments point in the right direction, what more is needed until grid operators have no option but to apply grid enhancing technologies? Yeah, you sound like me, Gard, now. Look, I think it's a great question and a great thought. I don't know. At this point, there is a whole lot more that is needed. If you look at what's happening, the pressure points in terms of the amount of gigawatts of renewable projects waiting for grid connections globally is enormous. The pressure points coming from consumer awareness driven by electricity prices is enormous. Regulatory pressure, market design, policy, all of these factors are up for grabs now. Depending on where you are in the world, Gard, it's a little different. I think, you know, in the key markets where we have really good traction, like the U.K., like Australia, like Colombia, we don't need a lot more there, frankly, from the policy and regulatory side. Those markets are working really well, and the customer traction is there. They're like a really good example of what we need to see. In other markets like the U.S., it's lagging, you know. It's lagging principally because of market design that provides basically a monopolistic position for for-profit organizations that are really incentivized to take on large multi-billion-dollar projects and put them in the rate base for 40 years. We can do something much faster, and actually, you know, deliver a lot more flexibility for those owners. What's needed there, I think, is the ongoing pressure. The fact that the Congressional Democrats this week issued an open letter to FERC categorically calling out this very issue, and basically calling on FERC to say, make changes, incentivize these utility and investor-owned operators, to do the right things, for the consumers at the end of the day. I think all those things, Gard, are building and building and building. The pressure points are not going away. They're only gonna get tougher. I think we're well on the path now, to seeing really the kind of traction we see in the U.K., Australia, Colombia. That's close now, I think, to happening everywhere in the world. In Europe, there was really good momentum anyway, but I think this REPowerEU, you know, obviously very unfortunate circumstances that's driving that, but that puts a lot more pressure on policies like the 70% rule coming into place quickly. Okay. The final question. Given the cash burn in the quarter and your expectations for the coming quarters, when do you expect new funding must be secured? Our cash burn for Q1 was as expected, and our cash balance was slightly ahead of plan for the quarter. We continue to monitor cash closely and are managing our quarterly spend, negotiating improved payment terms with vendors and customers, and exploring strategic opportunities. We are not providing guidance beyond the 2022 window at this point, and we'll come back to answer the question in a longer-term view when we provide 2023 and beyond guidance. Yeah. Okay. Good, good points of leverage, I would say. Yeah. Peter, another question. Regarding supply chain, can you explain to us the current situation and what you're doing to improve the situation? Yeah, I can. Look, obviously I mentioned earlier in the presentation the sort of 40% drop in the number of parts from the V103 to the V104. Clearly, that helps us significantly in terms of supply chain and obviously cost as well. I guess the key things to talk about, we've diversified and continue to diversify the supply chain, meaning, you know, multiple supplier options, multiple regions and onshoring options where possible. The goal for us isn't really to onshore everything or avoid a particular region, but to create balance at the end of the day, optionality and the ability to pivot when we need to. You know, there's been challenges, I would say, obviously across the board on all commodities as well as logistics. We know, like many industries, printed circuit boards, PCB components, and therefore the full printed circuit board assembly is a key area challenge. There we've locked in sort of, I would say, very stable design on 10 of 11 of our standard SKUs. We've got one, we've got a bit of a variability on at the moment that we're gonna be resolving over the next couple of weeks. I think getting that stability in a design obviously is a big step for us as well. Bear in mind, guys, that, you know, when we cut in a V104 here, that's gonna be the lion's share of our revenues for the next two to three years. That's a really big deal for us because it gives us huge stability and obviously massive opportunities for leveraging volume really from supply chain all the way through to delivery. I would say maybe I could just wrap it with it's a five-part sourcing plan really, stable design, plan, ramp and repeat on the volume side. As I said, the 104 runs through most of our revenue through 2024 and beyond. Diversification of the supply chain, quality, lead time, cost options, simplify our logistics. And then we do a very deep dive three times a week on clear to start, where we're basically assessing available materials for production plans. We're on top of it. I don't think we've seen the last of the supply chain issues that are out there. Obviously the situation in Ukraine is adding a wrinkle, I think, on the recovery sort of post-COVID pandemic. We hope that will be resolved in the coming months. We think with both the actions we've taken, we've more than covered our bases. Thank you, Peter. Now back to the moderator. Thank you. There are no further questions at this time. I hand over to you speakers if you have any closing remarks. Yes, sure. Yeah. Thank you and thanks for the interaction, the questions. As I said, we're remaining very confident on where we are and what we're doing. No surprises for us there frankly, on the back-end load of numbers for the year. We always knew that would be the case. When you move your research location, your testing facilities and headquarters, obviously that takes some time to do. Working to get ahead of a new product cut in, working to get ahead of supply chain issues, the backlogs there. Backlog looks really good for this year. All this potential that we'll drive the coming years is also looking really, really strong. The market fundamentals are crystal clear. We feel great about where we are. We look forward to giving you updates in the future. Thanks for your time.