Good morning, and welcome to the Nuvve Holding Corp. First Quarter 2024 Earnings Conference Call. Please note, this event is being recorded. On today's call are Gregory Poilasne, Chief Executive Officer, and David Robson, Chief Financial Officer of Nuvve. Earlier today, Nuvve issued a press release announcing its first quarter 2024 results. Following prepared remarks, we will open the call for questions. Before we begin, I want to remind you that this call may contain forward-looking statements. While these statements reflect Nuvve's best current judgment, they are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these projections. These risk factors are discussed in Nuvve's filings with the SEC and in the earnings release issued today, which are available on our website. Nuvve does not have an obligation to revise or update any forward-looking statements to reflect future events or circumstances. With that, I would like to turn the call over to Gregory Poilasne, Chief Executive Officer of Nuvve. Gregory?

Thank you, and good afternoon to everyone here today. Thank you for joining our first quarter 2024 results call. We are pleased to have the opportunity to update you on the progress we are making in scaling our business and positioning Nuvve for our future growth. The global environment in the electric vehicle space remains tough. The negative perception is real, especially in the consumer space. We can also see that through the outcomes of companies such as Tritium and Proterra. Since Nuvve became a public company, our focus has been on the School Bus business, which is heavily supported by EPA funding. This funding is essential for school districts to adopt clean transportation and bring the cost of school buses down. The current process of reducing funding makes the adoption quite challenging. School districts are waiting for the outcome of the funding before making decisions. The first quarter of 2024 has always been expected to be in between two different funding cycles, and as we have known, it will be soft. We remain very excited about our leadership position in the School Bus space, and it continues to be one of our key revenue drivers for 2024, which results in lumpy revenue. In order to smooth out our revenue and expand our business, we have recently announced two key projects. The first one is with the Fresno Economic Opportunities Commission. In January, we announced that Nuvve has been selected by the Board of the Commission to deliver on the $16 million transportation and renewable energy project. I can share with you today that we have signed a contract with Fresno EOC to execute on these projects; the key subsidies have been finalized, which we expect to be over the next 60 days. As a reminder, these projects include the deployment of 60-plus charging stations, 2.5 megawatts of solar generation, and 1.6 megawatt-hours of batteries. Nuvve will not only drive the project development, but through its GIVe platform, Nuvve will manage the energy on the sites for the next 10 years. We are proud to support the Fresno EOC in achieving its vision in deploying clean transportation and renewable energy generation to reduce pollution in Fresno County. We also now expect that the initial $16 million will be recognized over the next 24 months. In February, we announced that Nuvve has been selected in partnership with e-Formula, a prominent Taiwanese energy solution provider, in order to deliver on a project driven by Thai Power Corporation. This project, based in Shinshu, includes 90-plus charging stations for shuttles, solar, and storage. Though the contract negotiations are being finalized, the project is not only exciting on its own, but it opens the door to many other projects on this island. You can find more details on our V2G hub projects on our hub website www.NuvveV2GHubs.com. As we announced in 2023, battery deployments are always associated with the EV deployments. The capabilities of our platform to manage EV batteries make it perfect to manage both EV and stationary storage or just stationary storage alone. In this critical moment of electrification of transportation, our platform is the only one to provide a unified approach to electrification and energy management while delivering great services. The integration of electric vehicles into the electric system is extremely challenging when considering many other segments that are increasing electric energy consumption. We have always stated that V2G is key to such integration. We are pleased to see that a couple of weeks ago, a very significant conference on V2G was held in San Diego, the city where Nuvve was founded and where we are headquartered. But I keep asking, what is V2G if it does not provide a service to the end users? V2G is a great technology, but to get it adopted, it requires articulation of the value proposition. We have developed our value proposition around three aspects: vehicle readiness, guaranteeing to the user of the vehicle that it will be ready when needed; energy management, which includes the trade-off between charging the vehicle at the lowest cost and providing great services to generate revenue; and finally, battery life extension based on always charging the battery at the exact level that the driver needs. The combination of our game platform that manages electric vehicle batteries and stationary storage in real-time, with our AI platform for forecasting, allows us to truly provide these services. Some of our competitors use these terms very often without the experience to back them up. However, the first step in the EV adoption should never be neglected: the deployment phase, where fleet managers are often left alone to make key decisions without the proper information. On our website, www.nuvve.com, you can find multiple testimonials from different customers, emphasizing how we have been here to help them, execute their EV deployment vision and solve various problems along the way. I'm proud of Nuvve's service and the feedback that we are receiving. Before I pass the microphone to David, I want to reaffirm our expectations for this year 2024 of $15 million to $20 million in revenue. We are managing our destiny and are executing our business plan to achieve our target.

Thanks, Gregory. I will start with a recap of first quarter 2024 results. In the first quarter, we generated total revenues of $780,000 compared to $1.85 million in the first quarter of 2023. The decrease was primarily driven by the reduction in charger hardware sales impacted by the timing of the EPA funding award. Margins on product and service revenues were 34.7% for the first quarter of 2024 compared to 21.2% in the year-ago period. The increase is primarily due to a higher mix of service revenues and improved pricing on hardware sales this quarter compared with last year. As a reminder, margins can be lumpy from quarter to quarter depending on the mix. DC charger gross margins at standard pricing generally range from 15% to 25%, while AC charger gross margins are approximately 50%, but in dollar terms, are a small fraction of the revenue of the DC charger. Risk service revenue margins are generally 30%, while software and engineering service margins can be as high as 100%. Operating costs, excluding cost of sales, were $7.5 million for the first quarter of 2024 compared to $7.9 million for the fourth quarter of 2023 and $8.3 million in the first quarter of 2022. We have continued to drive efficiencies through 2023 and into 2024, resulting in lower overhead costs. We expect to realize additional improvements in our operating expenses in future quarters this year. Cash operating expenses, excluding cost of sales, stock compensation, and depreciation and amortization expense, declined to $6.3 million in the first quarter of 2024 versus $6.9 million in the fourth quarter of 2023 and $7.2 million in the first quarter of 2023. Other income was $0.5 million in the first quarter of 2024, up from $0.2 million in the year-ago quarter. The current period benefits from a non-cash gain from the change in the fair value of warrants. Net loss attributable to common stockholders decreased in the first quarter of 2024 to $6.7 million from a net loss of $7.7 million in Q1 of 2023. The improvement was primarily a result of lower operating expenses this quarter compared to the first quarter of 2023. Now turning to our balance sheet. We had approximately $5.3 million in cash as of March 31, 2024, excluding $0.5 million in restricted cash, which represents an increase of $3.7 million from December 2023. The increase was a result of a net capital raise of $8.5 million during the quarter, primarily offset by $4.7 million used in operating activities. During the quarter, inventories increased by $0.2 million to $6.1 million at March 31, 2024, as we purchased additional DC charging stations to support our sales pipeline. Accounts payable at the end of the first quarter of 2024 decreased by $0.2 million to $1.5 million. At the end of the first quarter of 2024, the balance sheet reflects the addition of a warrant liability related to warrants issued in connection with our capital raise in January. These warrants were valued at $3.8 million on the issuance date and $3.1 million at March 31, 2024, resulting in a $700,000 gain during the quarter recorded as other income. Now turning to our megawatts under management and estimated future grid service revenues. As a reminder, megawatts under management is a metric we use to quantify the aggregated amount of electrical capacity from the deployment of our V1G and V2G chargers, which are primarily deployed in the electric school bus market in the U.S. and in light-duty fleet deployments in Europe, in addition to stationary batteries. Currently, these chargers and batteries are located throughout the United States, Europe, and Japan. Megawatts under management in the first quarter increased by 6% over the fourth quarter of 2023, from 25.1 to 26.6, a 45.4% increase compared to the first quarter of 2023. In terms of its composition, 7.1 megawatts were from stationary batteries, and 19.5 megawatts were from EV chargers. We continue to expect an acceleration in our megawatts under management as we move through the remainder of the year and continue to commission our backlog of customer orders we have earned in 2023 and the beginning of 2024. Additionally, we anticipate winning new business which we have visibility to in our pipeline for both EV chargers and stationary batteries. Now turning to backlog, on March 31, our hardware and service backlog reached a milestone record for Nuvve at $19 million, increasing by $15.1 million from $3.9 million at December 31, 2023. Our hub project in Fresno, California, which we closed during Q1 of this year, was the primary driver of the increase. That concludes my portion of the prepared remarks. Gregory, back to you to conclude.

Thanks, David. Though this first quarter of 2024 has been soft, this does not come as a surprise. Our expectations for 2024 have not changed. We expect the School Bus business to pick up in the second and third quarters with the EPA Round 2 and Round 3. We are also executing on the awards that we have received at the beginning of the year, with some of them contributing to our 2024 revenue. We look forward to sharing more with you in the near future.

Our first question comes from Brian Dobson with Chardan.

It's Greg Pendy in for Brian Dobson. I have a question regarding the revenue guidance of $15 million to $20 million and the current inventory increase to $6.1 million. What do you estimate a normalized year-end inventory level could be? Could it be around $2 million? I'm trying to understand how much of the $15 million to $20 million can be allocated for working capital and inventory.

Greg, I think that inventory level can come down a couple more million dollars between now and the end of the year. Of course, it really depends on the timing of when we deliver orders. But I think about it as, call it, longer term, 3 to 4 months of inventory on hand of future sales.

Okay. And then just one more question. You mentioned the EPA rounds hitting in Q2 and Q3. Can you kind of give us a little bit more color on notable dates that we should be looking out for within those two quarters?

David, do you want to take that?

Greg, I just cut out for a second. Can you just repeat it one more time? I didn't hear.

Sure. Sorry about that. Just in light of the EPA round hitting in Q2 and Q3, can you call out any notable dates we should be looking out for that would be publicly released on some of these school bus orders or timelines?

From what Gregory said in his remarks, the timing of when we see those announcements coming out is in the Q2 to Q3 timing, but I don't have any more precision on that.

Okay. No problem. All right.

And to answer more the question, it's really about when we get the orders from the school districts, right? So I mean the Round 2 has a few possibilities for larger orders, and so we might publicize that. But the timeline is really in the hands of the school districts very often, right?

This concludes our question-and-answer session. I would like to turn the conference back over to Gregory Poilasne for any closing remarks.

We appreciate everybody listening in today, and we are looking forward to sharing more with you on the progress we are making. We're very excited about 2024 and beyond, and we look forward to communicating with you about Q2. Thank you. Bye-bye.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.