Q4 2023 Hyzon Motors Inc Earnings Call

Operator: Thanks for watching! Hello, and welcome to the Hyzon fourth quarter 2023 earnings call. All lines have been placed on mute to prevent any background noise.

Hello, and welcome to the highs on fourth quarter 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session and if he would like to ask a question. During this time simply press star one on your telephone keypad.

Operator: After the speaker's remarks, there will be a question and answer session, and if you would like to ask a question during this time, simply press star 1 on your telephone keypad. I will now turn the conference over to Henry Kwon.

I will now turn the conference over to Henrik One. Please go ahead.

Henry Kwon: Thank you, operator, and good morning, everyone. Welcome to Hyzon's fourth quarter 2023 earnings call. With me on the call today are Parker Meeks, Chief Executive Officer, Stephen Weiland, Chief Financial Officer, and Dr. Christian Mordick, Chief Technology Officer. As a reminder, you can find the press release detailing our financial results and the presentation accompanying today's call in the investor relations section of our website. Today's discussion includes references to non-GAAP measures. These measures are reconciled to the most comparable US GAAP measures and can be found at the end of the Q4 earnings press release.

Thank you operator, and good morning, everyone welcome to <unk> fourth quarter 2023 earnings call.

Henrik One: With me on the call today are Parker mix, Chief Executive Officer, Steven Weiland, Chief Financial Officer, and Dr. Christian <unk> Chief Technology Officer.

As a reminder, you can find the press release detailing our financial results and the presentation accompanying today's call in the Investor Relations section of our website.

Henrik One: Today's discussions include references to non-GAAP measures. These measures are reconciled to the most comparable U S. GAAP measures can be found at the end of the Q4 earnings press release.

Henry Kwon: This morning's discussions include forward-looking statements regarding future plans and expectations. Actual results might differ materially from those stated, and factors that could cause actual results to differ are explained in the forward-looking statements at the end of the press release and page two of our earnings presentation. Forward-looking statements speak only as of the date on which they are made. Please use your caution not to put undue reliance on forward-looking statements.

Henrik One: This morning's discussions include forward looking statements regarding future plans and expectations.

Henrik One: Actual results might differ materially from those stated and factors that could cause actual results to differ are explained in the forward looking statements at the end of the press release and page two of our earnings presentation.

Henrik One: Forward looking statements speak only as of the date on which they are made.

Henrik One: You are cautioned not to put undue reliance on forward looking statements.

Parker Stewart Meeks: With that, I will turn the call over to our CEO, Parker Meeks. Good morning, everyone, and thank you for joining our fourth quarter 2023 earnings call. I'm pleased to be joined by Steve today and to introduce Dr. Mordick, who we are thrilled to have as Hyzon's CTO.

Henrik One: With that I will turn the call over to our CEO Mark <unk>.

Good morning, everyone and thank you for joining our fourth quarter 2023 earnings call.

Mark: I am pleased to be joined by Steve today.

Mark: And introduce Dr. <unk>, who we are thrilled to have as high as on GTO.

Parker Stewart Meeks: Hyzon continues to progress as a leader in the global transition to clean energy by developing and commercializing our proprietary high-power, zero-emission fuel cell technology. Our leading technology provides a lighter, smaller, more cost-effective, and more fuel-efficient fuel system. Today, we deploy that fuel cell technology in heavy-duty fuel cells. As the hydrogen ecosystem grows, we have the potential to deploy both our existing and our future generation fuel cell technology, and additional heavy-duty industrial ecosystems such as rail, mining, aviation, and stationary power, and several of these opportunities are in early development. We believe 2024 will be a year of foundational commercialization. Our single stack 200 kilowatt fields of technology are coming to start our We believe our accomplishments in the fourth quarter of 2023 demonstrate the inflection point we have achieved for Hyzon's technology and commercial strategy, and I will take a few minutes to describe why. Turning first to technology and manufacturing.

Mark: However continues to progress as a leader in the global transition to clean energy by developing and commercializing our proprietary high power zero emission fuel cell technology.

Mark: Our leading technology provides a lighter smaller more cost effective and more fuel efficient fuel cell system.

Mark: Today, we deploy that fuel cell technology in heavy duty fuel cell trucks.

Mark: As the hydrogen ecosystem grows we have the potential to deploy both our existing and our future generation fuel cell technology and additional heavy duty industrial ecosystems, such as rail mining aviation and stationary power.

Mark: With several of these opportunities in early development.

Mark: We believe 2024 will be a year of foundational commercialization for ISR.

Mark: Our single stack 200 kilowatt, because the technology is coming to serve production or Sop.

Mark: We are commercially deploying fuel cell trucks into customer operations in our prioritized markets on three continents.

And government commercial and regulatory support for hydrogen continues to grow even stronger.

Mark: We believe our accomplishments in the fourth quarter of 2023 demonstrate the inflection point, we have achieved for iphones technology commercialization.

Mark: And I will take a few minutes to describe why.

Mark: Turning first to technology and manufacturing in the fourth quarter, we achieved our full year 2023 operational milestone of manufacturing 25 single stack 200 kilowatt fuel cell system be samples.

Parker Stewart Meeks: In the fourth quarter, we achieved our full year 2023 operational milestone of manufacturing 25 single-stack 200 kilowatt fuel cell systems B and our Fuel Cell Production Facility out of Chicago, Illinois, here in the US. This includes factory acceptance testing, Full Design Verification, and Significant Durability. We also progressed fuel cell system development to the C-sample, a crucial step in the standard automotive product development process. As these samples are built with production tooling to meet all technical requirements for SOPs,

Mark: In our fuel cell production facility outside Chicago, Illinois here in the U S.

Mark: This includes factory acceptance testing full design verification and significant durability testing.

Mark: We also progressed fuel cell system development to the <unk> sample stage, a crucial step in our standard automotive product development process. As these samples are built with production tooling to meet all the technical requirements for ESOP.

Parker Stewart Meeks: With this progress, we are on track for SOP of the 200 kilowatt fuel cell system in the second half of 2025, with minimal CapEx requirements remaining to achieve that S. Additionally, we expect the facility to have an annual capacity of 700-200 kW fuel cells on three shifts at SOP. With plans to de-bottleneck further and efficiently manage associated de-bottlenecking CAPEX, in line with the We expect this approach to maintain the benefits of our asset-light business, fuel cell assembly capacity additions efficiently taken in line with anticipated demand increases from our customers over multi-year commercial contracts. On the commercial front, we're excited to have deployed 19 heavy-duty fuel cell electric vehicles under commercial agreements into customer operations across three continents in 2023, achieving the high end of our guidance of 15 to 20 vehicles commercially deployed. Of those vehicles, five were deployed in the U.S. for both the Rage and Large Fleet, three in Europe, and 11 in Australia. I would like to briefly highlight our U.S. delivery. Four of them were at the Performance Food Group, or PFG, in California.

Mark: With this progress we are on track for ESOP or the 200 kilowatt fuel cell system in the second half of 2024 with minimal capex requirements remaining to achieve that S. O P.

Mark: Additionally, we expect the facility to have an annual capacity of 700 200 kilowatt fuel cell systems on three shifts at our Sop.

Mark: With players to Debottleneck further and efficiently manage associated Debottlenecking Capex in line with demand. We expect this approach to maintain the benefits of our asset light business model.

Mark: Wholesale assembly capacity additions efficiently taken in line with anticipated demand increases from our customers over multiyear commercial agreements.

On the commercial front, we're excited to have deployed 19 heavy duty fuel cell electric vehicles on our commercial agreements and the customer operations across three continents in 2023.

Mark: Achieving the high end of our guidance of 15 to 20 vehicles commercially deployed.

Mark: Are those vehicles fiber deployed in the U S to both rage, a largely customers three in Europe and 11 in Australia.

Mark: I would like to briefly highlight our U S deliveries four of which were to performance food group or PFG in California.

Parker Stewart Meeks: Deployment of these trucks is a foundational step toward achieving emission reduction goals shared by Hyzon, PFG, and the State of California. It also marks a crucial step in Hyzon's progress, and the rest of the team, and the positive cash contribution margin at the truck level to large fleet As previously announced, pending a successful trial with Hyzon's 200 kilowatt heavy-duty fuel cell, Hyzon and PFG intend to work together on an agreement for 15 200 kilowatt fuel cell trucks and a potential further option for an additional 30 fuel cell trucks bring the total potential to 50 fuel cell trucks if all options are fully This is exactly the customer profile and multi-year scaling commercial agreements, We are focused on delivering to large with a number of fleets already through their trials and a full trial schedule anticipated for the U.S. 200 kilowatt fuel cell truck platform kicking off in the first half of this year. We remain focused on converting additional large fleets to similar multi-year commercial agreements on the back of our trial program.

Mark: The deployment of these trucks is a foundational step toward achieving emission reduction goals shared by highs on PFG and the state of California.

Mark: It also marks a crucial step in <unk> progress as it demonstrates our ability to deliver vehicles with a positive cash contribution margin at the truck level to large fleet customers.

Mark: As previously announced pending a successful trial with <unk> 200 kilowatt heavy duty fuel cell truck <unk> intend to work together on an agreement for 15 200 kilowatt fuel cell trucks.

And a potential further option for an additional 30 fuel cell trucks, bringing the total potential to 50 fuel cell trucks, if all options are fully exercised.

Mark: This is exactly the customer profile and multi year scaling commercial agreement structure, we're focused on delivering to large fleets with.

Mark: With a number of fleets already through their trials and a full trial schedule anticipated for the U S 200 kilowatt fuel cell truck platform kicking off in the first half of this year.

Mark: We remain focused on converting additional large fleets to similar multi year commercial agreements on the back of our trial program.

Parker Stewart Meeks: Outside North America, we also launched a commercial trial deployment of our first heavy-rigid fuel cell electric refuse collection truck platform in Australia with Ramon. A Global Recycling, Service, and Water After completing a successful four-month trial, the vehicle delivered performance in line with its combustion engine equivalent, including full shifts. With over 1,200 bin lifts with fuel left over at the end of the workday, no refueling required. That performance is significantly better than even the best battery-electric refuse truck alternatives that our customers are considering, in some cases doubling the daily work rate of the battery life.

Mark: Outside North America, We also launched a commercial trial deployments of our first heavy rigid fuel cell electric refuse collection truck platform in Australia with reminders.

Mark: Global recycling service in water company.

Mark: After completing a successful four month trial the vehicle delivered performance in line with its combustion engine equivalents completing full shifts with over 1200 been lifts with fuel leftover at the end of the workday no refueling required.

Mark: That performance is significantly better than even the best battery electric refuse truck alternatives that our customers are seeing in some cases doubling the daily work rate of battery electric.

Parker Stewart Meeks: demonstrating our clear view that fuel cell trucks are the only viable decarbonization option in reference to the fuel cell industry, and many more. Additionally, the operating cost of the Hyzon fuel cell truck was equivalent to the operating cost of the diesel alternative without subsidizing it, proving that with the right fuel availability, fuel cell heavy duty trucks can do the work at a similar operating cost today. With the trial complete and successful, the team is working with Ramondas to transfer full ownership of the truck to the Ramondas fleet under the existing commercial agreement.

Mark: Australia, our clear view that fuel cell trucks are the only viable de carbonization option and refuse to fully perform the work of combustion engine can deliver and that fleets need.

Mark: Additionally, the operating cost of the hydrogen fuel cell truck was equivalent to the operating cost of the diesel alternative without subsidies.

Mark: Moving that with the right fuel availability youll still heavy duty trucks can do the work in a similar operating cost today.

Mark: With a draw complete and successful the team is working with are modest to transfer our full ownership of the truck to their remind us fleet under the existing commercial agreement.

Parker Stewart Meeks: Hyzon also entered into a revised commercial agreement with TRG, New Zealand's largest heavy-duty truck fleet, for up to 20 fuel cell trucks upfitted with Hyzon's single stack 200 kilowatt fuel cell. Following the initial commercial trial, TR Group has an option to purchase the two trial vehicles, as well as to upfit another 18 trucks with Hyzon's 200 kilowatt fuel. Turning to governance, Throughout 2023, we took significant steps to strengthen our board of directors and management, including appointing two new board members, a new chairman of the board, and accomplished leaders to the executive. We completed the reinforcement of our leadership team by welcoming Dr. Christian Mordick to the team as our Chief Technology Officer.

Mark: How does that also entered into a revised commercial agreement with TR group, New Zealand's largest heavy duty truck fleet owner.

Mark: The 20 fuel cell trucks up fit with highs on single stack 200 kilowatt fuel cell system.

Mark: Following the initial commercial trial TR group has an option to purchase the two trial trucks as well as the upset another 18 trucks with <unk> 200 kilowatt fuel cell systems.

Speaker Change: Turning to governance.

Speaker Change: Throughout 2023, we took significant steps to strengthen our board of directors and management include.

Speaker Change: Including appointing two new board members, a new chairman of the board and accomplished leaders to the executive team.

Speaker Change: We completed the reinforcement of our leadership team by welcoming Dr. Christian <unk> to the team as our Chief Technology Officer.

Parker Stewart Meeks: Christian is a globally respected leader in the fuel cell industry. He joins us from his role as Chief Commercial Officer at Cellcentric, a joint venture between Diamondware Truck AG and the Volvo Group, which Christian helped establish through his previous role as CEO of Mercedes-Benz Fuel Cell GmbH. Christian's combination of deep experience developing and critically commercializing fuel cell technology will both accelerate our leading US-made 200 kilowatt fuel cell and further bolster our ability to extend our leadership in physical technology R&D and IP generation. With Christian joining an already strong management team, we are confident in the leadership and governance foundation we have in place to drive Hyzon forward into commercialization. Turning briefly to our financial performance, we delivered another quarter with declining net cash burn and met our second half 2023 net cash burn guidance by remaining disciplined in maximizing our technology development and commercialization progress while driving real efficiencies in Hyzon's cost structure and cash burn, which Steve will comment on. We continue to evaluate financing options to support our commercialization, including potential strategic counterparts, and we are all being thoughtful about evaluation and dilution.

Speaker Change: Christian is a globally respected leader in the fuel cell industry.

Speaker Change: He joins us from his role as Chief commercial officer at cell centric, a joint venture between Daimler truck AG and the Volvo Group, which Christian helped establish through his previous role as CEO of Mercedes Benz fuel cell Gmbh's Chris.

Speaker Change: Christian combination of deep experience developing and critically commercializing fuel cell technology.

Speaker Change: Well, both accelerate our leading U S made 200 kilowatt fuel cell system.

And further bolster our ability to extend our leadership in Bristol technology, R&D and IP generation.

Speaker Change: With Christian joining an already strong management team and board we are confident in our leadership and governance Foundation, we have in place to drive high is on forward into commercialization.

Speaker Change: Okay.

Speaker Change: Turning briefly to our financial performance, we delivered another quarter with declining net cash burn and met our second half 2023, net cash burn guidance by remaining disciplined and maximizing our technology development and commercialization progress.

While driving real efficiencies and <unk> cost structure, and cash burn, which Steve will comment on further.

Speaker Change: We continue to evaluate financing options to support our commercialization, including potential strategic counterparties, while being thoughtful about valuation and dilution.

Parker Stewart Meeks: With the operational and commercial milestones achieved in 2023, we start 2024 with strong momentum and a positive outlook. We expect 2024 to be the year Hyzon realizes meaningful commercialization by advancing our 200 kilowatt technology in heavy duty fuel cell trucks, their respective SOPs, and many more. As mentioned previously, Hyzon's innovative single-stack 200-kilowatt fuel cell system continues to advance towards its SOP in the second half of 2021. We are currently completing durability tests, which are set to conclude around the midpoint of the year and pending favorable results. We'll be ready to start production soon. By generating 200 kilowatts from a single fuel cell, Hyzon can offer a significantly lighter, smaller, more cost-effective, and more fuel efficient fuel cell. Compared to the conventional approach of combining two systems or stacks to reach 200 kilowatts or more of fuel cell power.

Speaker Change: With the operational and commercial milestones achieved in 2023, we start 2024 with strong momentum and a positive outlook.

Speaker Change: We expect 2024 will be the year highs unrealized as meaningful commercialization.

Speaker Change: By advancing our 200 kilowatt technology and heavy duty fuel cell trucks their respective sop.

Speaker Change: And cementing and advancing our large fleet customer portfolio as the foundation for scaling through multi year commercial agreements and subsequent deployments.

Speaker Change: As mentioned previously <unk> innovative single stack 200 kilowatt fuel cell system continues to advance towards at the Sop in the second half of 2024.

Speaker Change: We are currently completing durability testing, which is set to conclude around the midpoint of the year and pending favorable results will be ready to start production soon thereafter.

Speaker Change: By generating 200 kilowatts from a single fuel cell system Hasnt can offer significantly lighter smaller more cost effective and more fuel efficient fuel cell system when compared to the conventional approach of combining two systems or stacks to reach 200 kilowatts or more fuel cell power.

Parker Stewart Meeks: Our U.S.-based fuel cell production facility is nearing completion with less than $5 million remaining capital investment to reach us. As I mentioned, the facility is projected to have an initial annual capacity of over 700-200 kilowatt fuel cells operating on three Alongside SOP of the fuel cell system, we also expect to reach SOP with two of our initial vehicle platforms and the 200 kilowatt conventional and a 200 kilowatt cab The 200-kilowatt Cadillac truck was unveiled last week in Australia as the first launch of Hyzon's 200-kilowatt fuel cell system and power plant. The 200-kilowatt powertrain was designed in the US and adapted regionally to maximize efficiencies from a common powertrain solution.

Speaker Change: Our U S based fuel cell production facility.

Speaker Change: Nearing completion with less than $5 million remaining capital investment to reach S&P.

Speaker Change: As I mentioned the facility is projected to have an initial annual capacity of over 700, 200 kilowatt fuel cell systems operating on three shifts.

Speaker Change: Alongside our Sofia the fuel cell system.

Speaker Change: We also expect to reach at Sop with two of our initial vehicle platform.

Speaker Change: The 200 kilowatt conventional and a 200 kilowatt cab-over fuel cell trucks.

Speaker Change: The total kilowatt caliber truck was unveiled last week in Australia is the first launch of <unk> 200 kilowatt fuel cell system in powertrain.

Speaker Change: The total kilowatt powertrain was designed in the U S and adapted regionally to maximize efficiencies from a common powertrain solution.

Parker Stewart Meeks: As one of only two companies with heavy-duty fuel cell trucks commercially deployed in 2023 in the US, and John Zavoli, positions us as well to achieve our commercial targets in 2024 and continue the early mover advantages we established in 2023 with our first deployments to large fleets. From a commercial standpoint, 2024 is focused on securing large fleet multi-year fuel cell truck commercial agreements. Similar in design to the agreement in place with PEF, Securing vehicle contracts with multi-year scaling potential with large fleets, on the back of successfully activating several of these contracts with initial deliveries this year, and then advancing multiple large fleets to their second stage orders and deliveries later in 2025, and the industry. When it is, These fleets with internal and government mandates to decarbonize are experiencing the limitations of heavy-duty battery electric trucks in their operations and are turning to fuel cell trucks for long routes with heavy payloads and minimal downtime for refueling. This real-world customer feedback bolsters our confidence and that of the rest of the world. One application where Battery Electric today cannot compete with hydrogen fuel cell trucks is refuse collection or garbage collection.

Speaker Change: As one of only two companies with heavy duty fuel cell trucks commercially deployed in 2023 in the U S.

Speaker Change: Starting production with these high powered vehicles.

Speaker Change: <unk> us well to achieve our commercial targets in 2024.

Speaker Change: Continuing the early mover advantages, we established in 2023 with our first deployment to large fleets in each region.

Speaker Change: From a commercial standpoint, 2024 is focused on securing large fleet multiyear fuel cell truck commercial agreements similar in design to the agreement in place with PFG.

Speaker Change: Securing vehicle contracts with multi year scaling potential with large fleets on the back of successful trials.

Speaker Change: Activating several of these contracts with initial deliveries in this year.

Speaker Change: And then advancing multiple large fleets to their second stage orders and deliveries later in 2024.

Speaker Change: Which will be a significant milestone for the company and the industry when it is achieved.

Speaker Change: These fleets with internal and government mandates to decarbonize, our experiencing the limitations of heavy duty battery electric trucks in their operations and are turning to fuel cell trucks for long routes with heavy payloads and minimal downtime for refueling.

Speaker Change: This real world customer feedback bolsters, our confidence that the mix of a decarbonize fleet is shifting clearly towards hydrogen.

Speaker Change: One application where battery electric today cannot compete with hydrogen fuel cell trucks is refuse collection, our garbage trucks.

Parker Stewart Meeks: As demonstrated in our trial with Raimondo, our hydrogen refuse truck delivers similar operational capabilities as a traditional diesel. The typical battery electric version today completes roughly half of that, and goes home at, Thank you for watching. The gap in performance is significant, leading us to believe the future of Zero Emission Refuge Collection is clear. It is one that only hydrogen fuel cell electric refuse trucks can deliver.

Speaker Change: As demonstrated in our trial with remind us our hydrogen refuse trucks deliver similar operational capabilities as a traditional diesel truck.

Speaker Change: The typical battery electric version today completed roughly half of that work.

Speaker Change: Goes home at lunch and charges for the next day.

Speaker Change: The gap in performance of significance Linda.

Leading us to believe the future of zero emission refuse collection is clear.

Speaker Change: It is one that only hydrogen fuel cell electric refuse trucks can deliver.

Parker Stewart Meeks: We also see the refuse truck market as one that can develop more quickly and the ability to produce hydrogen on-site from landfill gas or solid waste. Hydrogen-powered refuse can create a circular zero-emission ecosystem, with an estimated 120,000 refuse trucks on the road in the US alone, and many publicly funded fleets in California facing expected near-term zero emission purchase mandates under California's Advanced Clean Sleep. With this in mind, we are accelerating our Refuge Program in North America, building off the development in Australia. We recently announced a joint development agreement for refuse trucks in the U.S. with Newway, the largest private refuse equipment manufacturer in North America. The first US fuel cell waste collection truck is currently in assembly, with a full customer trial schedule expected to launch in the first half of 2020, and additional commercial deliveries projected in 2020. We are excited by the strong response Refuse Fleet customers have shown and the upcoming customer trials. All of this is supported by Strong Tailwinds Worldwide for hydrogen and zero emission vehicles. Major markets globally have policies to accelerate adoption.

We also see the refuse truck market as one that can develop more quickly given the back to base nature of the use case and the ability to produce hydrogen onsite from landfill gas solid waste Hyatt.

Speaker Change: Hydrogen powered refuse can create a circular zero emission ecosystem with an estimated 120000 refuse trucks on the road in the U S alone and many publicly funded fleets in California.

Speaker Change: Expected near term zero emission purchase mandates under California's advanced clean fleet rule.

Speaker Change: With this in mind, we are accelerating our refuse program in North America building off the development in Australia.

Speaker Change: We recently announced a joint development agreement for refuse trucks in the U S with new way the largest private refuse equipment manufacturer in North America.

Speaker Change: The first U S fuel cell waste collection truck.

Speaker Change: Is currently an assembly with a full customer trials scheduled expected to launch in the first half of 2024.

And initial commercial deliveries projected in 2025.

Speaker Change: We are excited by the strong response refuse fleet customers have shown and the upcoming customer trial schedule.

Speaker Change: Yeah.

Speaker Change: All of this is supported by strong tailwind worldwide for hydrogen and zero emission vehicles.

Speaker Change: Major markets globally have policies to accelerate adoption in.

Parker Stewart Meeks: In the U.S., for instance, the Biden administration has allocated $7 billion, Seven Hydra, several of which Hyzon directly. The Inflation Reduction Act earmarks $2.6 billion under the EPA's Clean Ports Program. The Decarbonized Coastal and Inland Ports Nation, including Dredge Trucks and Fueling Infrared, which Hyzon is initially participating in as part of Fort Houston's application. California remains a well-funded zero-emission Class 8 truck hub, with several hundred million dollars available as of the beginning of twenty twenty four, including over $300 million available through CARB's HVIP program. Over $70 million from the Volkswagen Environmental Mitigation Truck and funding specifically for DRADESTRONG and the Port of LA and Long Beach Clean Truck. In short, we are excited to build on this momentum with the following milestones in focus for 2025.

Speaker Change: In the U S. For instance, the by the administration is allocated 7 billion.

Speaker Change: 700 hubs several of which high Saar directly supported.

Speaker Change: The inflation reduction Act earmarks $2 6 billion under the Epa's clean ports program.

Speaker Change: To decarbonize coastal and inland ports nationwide.

Speaker Change: Including drayage trucks and fueling infrastructure.

Speaker Change: Which hydro is initially participating in as part of Fort Houston's application.

Speaker Change: California remains a well funded zero mission class eight trucks subsidy market.

Speaker Change: With several hundred million dollars available as of the beginning of 2024.

Speaker Change: Including over $300 million available through Carbs HVAC program over.

Speaker Change: Over $70 million from the Volkswagen Environmental mitigation Trust and.

Speaker Change: And funding specifically for drayage trucks through the port of La and long Beach clean truck fund.

Speaker Change: In short we are excited to build on this momentum with the following milestones and focus for 2024.

Parker Stewart Meeks: Again, we were on schedule to reach SOP for our single stack 200 kilowatt fuel cell, The second half of twenty twenty four, and for our 200 kilowatt vehicle platform, With the US 200kW Truck Platform SOP expected in the second half of 2020, These will be major technology and commercial models, clearing the path for commercial scale-up of our 200 kilowatt fields of technology to large fleet customers Second, we are progressing well in our trial-based, largely customer-piped, with a focus on converting additional large fleets from trials to multi-year commercial, We are focused on signing new large fleet multi-year customer agreements in 2024 and targeting the advancement of large fleet customers to the second stage of their multi-year order pattern. Third, we will be launching U.S. Refuge Truck Trials in 2024, with initial commercial agreements expected in the second half, Fourth, we are targeting 20 to 40 fuel cell truck deployments under commercial agreements to customers in 2024 globally, and the rest of the team.

Speaker Change: Again, we are on schedule to reach our Sop for a single stack turn a kilowatt fuel cell system in the second half of 2024.

Speaker Change: And for our 200 kilowatt vehicle platforms with a U S 200 kilowatt truck platform SLP expected in the second half of 2024.

Speaker Change: These will be major technology, and commercial milestones clearing the path for commercial scale up of our tour Nikola fuel cell technology to large fleet customers globally.

Speaker Change: Second we are progressing well in our trial based largely customer pipeline with a focus on converting additional large fleet from trials to multiyear commercial agreements.

Speaker Change: We are focused on signing new large fleet multiyear customer agreements in 2024 and targeting the advancement of largely customers to the second stage of their multiyear order pattern as well.

Speaker Change: Third we will be launching U S refuse truck trials in 2024 with initial commercial agreements expected in the second half of 2024.

Speaker Change: Fourth we are targeting 20% to 40 fuel cell truck deployments on our commercial agreements to customers in 2024 globally purposely focusing our deployments to largely customers to activate their multi year commercial agreements.

Speaker Change: Or to advance to the second delivery of their agreements.

Parker Stewart Meeks: By deploying a smaller number of trucks per fleet to priority large fleets, we are purposefully managing working capital and associated net cash burn while maximizing the commercial foundation we have in place to enable scaling in 2025 and 2027. Lastly, we are focused on strengthening our balance sheet and securing additional capital to fund our business. I want to thank our global team for their tenacity and commitment. Our leading technology, in-house manufacturing, and partnership make us ready to scale production and drive commercialization as an early mover in this fast-growing industry. Now I would like to introduce our newly appointed Chief Technology Officer, Dr. Christian Mornick.

Speaker Change: By deploying a smaller number of trucks per fleet to priority large fleets, we are purposefully managing working capital and associated net cash burn while maximizing the commercial foundation, we have in place to enable scaling in 2025 and 2026.

Speaker Change: Lastly, we are focused on strengthening our balance sheet and securing additional capital to fund our business.

Speaker Change: Want to thank our global team for their tenacity and commitment.

Our leading technology enhanced manufacturing and partnerships Mega is ready to scale production and drive commercialization as an early mover.

Speaker Change: In this fast growing industry.

Speaker Change: Now I would like to introduce our newly appointed Chief Technology Officer.

DR Christian: Dr Christian morning Christian.

Dr. Christian Mordick: Thank you, Parker, and thanks for having me. I would like to first start off by saying how excited I am to join the Hyzon team. After having spent two-thirds of my career developing fuel cell technology at automotive OEMs, most recently as Chief Commercial Officer of Cellcentric, a joint venture between Damner Truck AG and the Volvo Group AB, it is refreshing to work for a company solely dedicated to fuel cell technology, especially during this stage of scale-up and commercialization. What makes me stick to automotive fuel cells for more than 25 years? My energy source is based on the three P's, product, people, and purpose. PUSA products are based on a fascinating technology which delights my physicist heart and brain. Knowledgeable people with a strong passion to attack challenges are the biggest assets in this business and drive me to work every single day. Pewters are helping make this better, a zero-emission bar.

DR Christian: Thank you Parker and thanks for having me.

DR Christian: Would like to first start off by saying how excited I am to join the <unk> team.

DR Christian: After having spent two thirds of my career developing fuel cell technology at automotive Oems. Most recently as chief commercial officer, offset centric a joint venture between Daimler truck AG and the Volvo Group a b. It is refreshing to work for a company solely dedicated.

DR Christian: Two fuel cell technology, especially during this stage of scale up and commercialization.

DR Christian: What makes me stick to automotive fuel cells for more than 25 years.

DR Christian: Energy source is based on the three PS product people and purpose.

DR Christian: <unk> products are based on a fascinating technology, which delights mitral heart and brain.

DR Christian: Knowledgeable people with a strong passion to attack challenges the biggest asset in this business and drive me to work every single day.

DR Christian: Few thoughts are helping make this a better is zero emission buses.

Dr. Christian Mordick: This convincing purpose enables me to go high speed, full power all the time. I joined Hyzon because of its existing strength in product and people and because, as a company, we are fully focused on our purpose of decarbonization. On the product side, one of my biggest motivations to join Hyzon was the significant fuel cell technology advantage and the corresponding intellectual property we hold. Hyzon has developed a single stack 200 kilowatt fuel cell system, which brings significant advantages in weight, size, fuel efficiency, cost to manufacture, and product quality.

DR Christian: This convincing purpose enables me to go high speed and full power all the time.

DR Christian: I joined <unk> because of its existing strengths in product and people and because as a company. We are fully focused on our purpose of decarbonization.

DR Christian: On the product side.

DR Christian: One of my biggest motivations to join <unk> zone was the significant fuel cell technology advantage and the corresponding intellectual property we hold.

DR Christian: <unk> has developed a single stack 200 kilowatt fuel cell system, which brings significant advantages in weight.

DR Christian: Fuel efficiency cost to manufacturer and product cost.

Dr. Christian Mordick: There are currently very few companies developing a single-stack 200-kilowatt fuel cell system, and I believe Hyzon is the first to deploy a heavy-duty vehicle with a single-stack 200-kilowatt fuel cell system, which brings me to another reason Hyzon's technology is at an advantage. Hyzon not only develops and manufactures its user systems but also integrates them into heavy-duty vehicles. We have deployed these vehicles on three continents and work directly with fleet customers to understand their real-world operations. With that data, we can intelligently manage and adjust our fuel cell technology to increase durability, reliability, and performance in different environmental circumstances. By doing so, we constantly expand our portfolio of intellectual property, maintaining and building our competitive potential. As we continue to drive fuel cell development, we expect new use cases in new industries to come into view, both for the 200 kilowatt and for future fuel cell generation.

DR Christian: We are currently very few companies developing a single stack 200 kilowatt fuel cell system and I believe <unk> is the first to deploy a heavy duty vehicle with a single stack 200 kilowatt fuel cell system.

DR Christian: Which brings me to another reason hi, <unk> technology is at vantage iPhone, not only develops and manufactures its fuel cell systems, but also integrates them into heavy duty vehicles.

DR Christian: We have deployed these vehicles on three continents and work directly with the fleet customers to understand the real word operations.

DR Christian: With that data, we can intelligently manage and adjust our fuel cell technology to increase durability reliability and performance in different environmental circumstances.

DR Christian: By doing so we constantly expand our portfolio of intellectual property, maintaining and building our competitive edge.

DR Christian: As we continue to drive fuel cell development.

DR Christian: We expect new use cases, and new industry to come into view, both for the 200 kilowatts and for future fuel cell generations.

Dr. Christian Mordick: Our goal is to provide hydrogen-powered decarbonization not only for trucking but across tomorrow's mobility industries, including mining, construction, rail, marine, and airport ecosystems. Earlier this month, we launched the first truck with Hyzon's 200 kW FUSA system and powertrain in Australia. As Parker mentioned, we plan to introduce 200 kilowatt vehicles in North America and Europe later this year. The hydrogen economy grows.

DR Christian: Our goal is to provide hydrogen powered decarbonization not only for trucking, but across tomorrows mobility industries, including mining construction rail marine and Apple ecosystems.

DR Christian: Earlier this month, we launched the first truck with high zones 200 kilowatt fuel cell system in powertrain in Australia.

DR Christian: As <unk> mentioned, we plan to introduce 200 kilowatt vehicles in North America and Europe later this year.

DR Christian: As the hydrogen economy growth Hudson's opportunity to Decarbonize sectors grows all based on the same fuel cell technology.

Stephen Paul Weiland: Hyzon's opportunity to decarbonize sectors grows, all based on the same fuel cell technology. I look forward to working with our team of expert engineers to increase Hyzon's competitive advantage by bringing the 200kW FuCi system to SOP this year and to continue advancing FuCi technology beyond the 200kW system in the future. With that, I would like to turn the call over to Steve for a closer look at the numbers.

Look forward to working with our team of expert engineers to increase <unk> competitive advantage by bringing the 200 kilowatt fuel cell system <unk> this year and to continue advancing fuel cell technology beyond the 200 kilowatt system in the future.

DR Christian: With that I would like to turn the call over to Steve for a closer look at the numbers Steve.

Stephen Paul Weiland: Thank you, Christian. It's great to have you on the team. One of the primary reasons why I joined Hyzon last November was our differentiated technology and intellectual property. I believe that our ability to attract an experienced fuel cell expert such as yourself is an affirmation of this value. It demonstrates that Hyzon's technology is compelling, and I very much look forward to working closely with you.

Steve: Thank you Christian it's great to have you on the team one of the primary reasons why I joined highs on last November was our differentiated technology and intellectual property I believe that our ability to attract and experienced fuel cell experts such as yourself as an affirmation of this value.

Steve: It demonstrates that <unk> technology is compelling and I very much look forward to working closely with you.

Stephen Paul Weiland: I am proud of the execution that we demonstrated throughout 2023 in achieving the important operational milestones set out earlier in the year. Advancing to the sea sample phase of our 200 kilowatt fuel cell system has us on track for the start of production later in the year and also for deploying our first 200 kilowatt FCEV trial. Our continued commercial progress is most recently evidenced with our customer PFP, the Refuse Market Opportunity with New Way Trucks, and Trial Activity. In addition to achieving our operational milestones, we also met or beat the financial guidance established earlier in the year on both the second half and full year basis for SG&A, R&D, and net cash.

Steve: I am proud of the execution that we demonstrated throughout 2023 and achieving important operational milestones set out earlier in the year.

Advancing to the sea sample phase of our 200 kilowatt fuel cell system has us on track for startup production later in the year and also for deploying our first 200 kilowatt FCB trials. Our continued commercial progress as most recently evidenced with our customer PFG refuse market opportunity with new eight trucks and trial activity.

Steve: In addition to achieving our operational milestones, we also met or beat the financial guidance established earlier in the year on both the second half and full year basis for SG&A R&D and net cash burn.

Stephen Paul Weiland: I'll highlight this in more detail as I next walk through our results. I would like to kick off my discussion by pointing to our Q4 and 2023 revenues of approximately $0.3 million versus $3.7 million in 2022. Q4 revenues reflected our first truck sale, one of our 19 truck deployment.

Steve: I'll highlight this in more detail of our next walk through our results.

Steve: I would like to kick off my discussion by pointing to our Q4 and 2023 revenues of approximately zero point $3 million versus $3 7 million in 2020 to the.

Steve: Q4 revenue reflected our first truck sale in the U S. One of our 19th truck deployments. We also delivered four trucks to PFG shortly before year end for which we will begin to recognize revenue starting in Q1 2024, while this was structured as a sale and we collected cash in Q1 2024, given the contract terms.

Stephen Paul Weiland: We also delivered four trucks to PFG shortly before year-end, for which we will begin to recognize revenue starting in Q1 2024. While this was structured as a sale, and we collected cash in Q1 2024, given the contract terms, it is effectively accounted for as a lease in our financials and recognized over time. The 14 remaining 2023 deployments translate into revenue if certain contract terms are achieved and customer acceptance is provided. Cost of revenue came to $15.7 million in 2023 versus $23.3 million in 2022.

Steve: It is effectively accounted for as a lease in our financials and recognized over time.

Steve: The 14 remaining 2023 deployments translate into revenue as certain contract terms are achieved and customer acceptance is provided.

Steve: Cost of revenue came to $15 $7 million in 2023 versus $23 3 million in 2022.

Stephen Paul Weiland: 2023 cost of revenue primarily represents inventory write-downs and customer contract cost provisions, and the rest. R&D expenses came to $43.7 million in 2022, versus $39.1 million in 2022 and slightly below our guidance of 45 to 49 million. The primary driver for the increase in R&D over 2022 is higher personnel costs supporting our development. SG&A came to 121.2 million in 2023 versus 114.1 million in 2022 and below our guidance range of 130 to 134 million. The primary reason we fell below the guidance range is because we began recognizing asset impairment charges as a separate line item in Q3 2023.

Steve: 2023 cost of revenue primarily represents inventory write downs and customer contract cost provisions. The decrease from 2022 is primarily driven by costs incurred in 2022 in China and Europe for Ftes up fit services and other charges that did not occur in 2023.

Steve: R&D expenses came to $43 $7 million in 2023 versus $39 1 million in 2022, and slightly below our guidance range of $45 to $49 million.

Steve: The primary driver for the increase in R&D over 2022, as higher personnel costs supporting our development efforts.

Steve: SG&A came to $121 2 million in 2023 versus $114 1 million in 2022 and below our guidance range of $130 million to $134 million.

The primary reason, we fell below the guidance range is because we began recognizing asset impairment charges as a separate line item in Q3 2023.

Stephen Paul Weiland: The drivers behind the increase in SG&A over 2022 were the $25 million SEC charge offset by certain activities that did not occur in 2020, such as the Orton cancellation. A significant portion of our 2023 SG&A came from an elevated level of legal, accounting, and legal work relating to the SEC investigations, which are now being We recognize $7.8 million in restructuring and asset impairment charges in 2023, driven primarily by charges in Europe. On the This represents our lowest quarterly net cash burn over the last nine quarters and the fourth consecutive quarter of declining cash. Our full year 2023 net cash burn of $143 million came in below our guidance of $148 to $156 million, driven by the timing of our $8.5 million first tranche SEC payout, and we would have fallen in the range had that payment occurred in Q4. That payment landed this January versus in Q4 due to the timing of the court approval, as previously discussed, could happen.

Steve: The drivers behind the increase in SG&A over 2022, where the $25 million SEC charge offset by certain activities that did not occur in 2023, such as the Orton cancellation charge a significant portion of our 2023 SG&A came from an elevated level of legal accounting and consulting fees from.

Steve: Ensuring filing compliance and legal work relating to the SEC investigations, which are now behind us.

Steve: We recognized $7 8 million in restructuring and asset impairment charges in 2023, driven primarily by charges in Europe and the U S. On.

On the balance sheet, we ended 2023 with $112 3 million in cash and equivalents, representing a net cash burn of $25 5 million in Q4. This represents our lowest quarterly net cash burn over the last nine quarters and fourth consecutive quarter of defining Brian.

Steve: Our full year 2023, net cash burn of $143 million came in below our guidance of $148 million to $156 million driven by the timing of our $8 5 million first tranche SEC payment and we would've fallen in the range had that payment occurred in Q4.

Steve: At payment landed this January versus in Q4 due to the timing of the court approval as previously discussed could happen.

Stephen Paul Weiland: We have an additional $8.5 million due at the end of 2024 and the remaining $8 million in January. Turning to guidance, we are not providing annual net cash flow guidance for 2024 at this time but are currently reviewing our assumptions for the full year, and to a large extent, the timing of any capital raise can impact our outlook. However, we do want to provide insight on our first. We are targeting a net cash burn range of approximately 24 to 27 million in the first, not including the impact of the $8.5 million SEC payment. We have also not included the impact of approximately $3 million from the sale of our Rochester facility in this range, given that the timing of that payment could fall to either the end of Q1 or the beginning of Q2 2020.

Steve: We have an additional $8 $5 million due at the end of 2024 and the remaining $8 million in January of 2026.

Steve: Turning to guidance, we are not providing annual net cash burn guidance for 2024 at this time, but are currently reviewing our assumptions for the full year and to a large extent the timing of any capital rates can impact our outlook.

Steve: However, we do want to provide insight on our first quarter. We are targeting a net cash burn range of approximately $24 million to $27 million in the first quarter.

Steve: Including the impact of the $8 5 million SEC payment in January we have also not included the impact of approximately $3 million from the sale of our Rochester facility in this range given that the timing of that payment could fall through either the end of Q1 or the beginning of Q2 2024 exclude.

Stephen Paul Weiland: Excluding these one-time items, we believe that this range is representative of how we are operating at the moment below $10 million in average recurring monthly net cash burn. We are anticipating that our Q1 2024 SG&A will likely come in a range of $22 to $24 million and that our R&D expenses will likely come in a range of $12 to $14 million.

Steve: Excluding these onetime items, we believe that this range is representative of how we are operating at the moment below $10 million in average recurring monthly net cash burn.

Steve: We are anticipating that our Q1 2020 for SG&A will likely come in a range of $22 million to $24 million and that our R&D expenses will likely come in a range of 12% to $14 million.

Stephen Paul Weiland: We continue to remain focused on raising capital. We will provide updates as appropriate. I'd also like to point out that, should we need to, we have identified levers to reduce our cash burn and extend cash into 2025 as financing activities continue. We are keenly focused on maintaining financial flexibility while ensuring that we are well positioned to achieve our near-term growth. Something that investors have raised in our discussion over the past quarter is, as we look to exercise financial discipline in 2024, what is our priority? The answer clearly is that our fuel cell IP is foundational to our technology and We will continue to prioritize our fuel cell development, and having Christian join us as CTO at this time clearly demonstrates our ongoing commitment to our technology and its strategic direction. Thank you for listening, and now I will hand the call back over to you. Thank you, Steve.

We continue to remain focused on raising capital we will provide updates as appropriate I'd also like to point out that should we need to we have identified levers to reduce our cash burn and extend cash into 2025 as financing activities continue.

Steve: We are keenly focused on maintaining financial flexibility, while ensuring that we are well positioned to achieve our near term growth objectives.

Speaker Change: Something that investors have raised in our discussion over the past quarter is as we look to exercise financial discipline in 2024, what is our priority.

The answer clearly is that our fuel cell IP is foundational to our technology and strategic value. We will continue to prioritize our fuel cell development efforts and having kristian join the CTO at this time clearly demonstrates our ongoing commitment to our technology and its strategic value.

Speaker Change: Thank you for listening and now I will hand, the call back over to Parker.

Parker Stewart Meeks: Thank you Steve I am incredibly excited for 2024 is it promises to pave the way for our long term growth.

Parker Stewart Meeks: I am incredibly excited for 2024 as it promises to pave the way for our long-term growth. Our seasoned management team and board provide us with the right mix of expertise, experience, and governance, enabling us to concentrate fully on our streamlined, refocused, and centralized business with a clear vision for the future. Centered in Technology and Driving Commercialization in 2024. We are confident in the capabilities of our technology and our differentiated asset-light businesses. We anticipate substantial commercial progress and minimal capital spending requirements to achieve center production of our 200 kilowatt fuel cell in the second half of 2024, and many more, and the rest of the team, while maintaining our early mover advantage in a growing movement to decarbonize. The addition of the fuel cell refuse vehicle as an international platform, with a significant performance and economic advantage versus battery-electric alternatives, is yet another example of the heavy-duty industry requiring We look forward to a growing set of major U.S. fleets experiencing that leading technology in truck plunges in the first half of this year.

Parker Stewart Meeks: Our seasoned management team and board provide us with the right mix of expertise experience and governance, enabling us to concentrate fully on our streamlined refocused and centralized business model with a clear vision for the future centered in technology and driving commercialization in 2024.

Parker Stewart Meeks: We are confident in the capabilities of our technology and our differentiated asset light business model.

We anticipate substantial commercial progress and minimal capital spending requirements to achieve sort of production of our 200 kilowatt fuel cell system in the second half of 2024 positions.

Parker Stewart Meeks: Positioning us favorably as we push to capture critical capital.

Parker Stewart Meeks: To expand our large fleet customer commercial agreements and activations strengthening the balance sheet, while maintaining our early mover advantage in a growing movement to decarbonize trucking.

The addition of the fuel cell refuse vehicle as an international platform with a significant performance and economic advantage versus battery electric alternatives is yet. Another example of heavy duty industry, requiring hydrogen fuel cell technology to do the work it needs to do.

We look forward to a growing set of major U S refuse fleets experiencing that leading technology and truck platform in the first half of this year.

Operator: I would like to thank all of my colleagues here at Heinz for their dedication and execution throughout 2020. Finally, we appreciate your ongoing engagement as we collaborate with customers and partners to bring Hyzon's cutting-edge hydrogen fuel cell technology to the forefront of the trucking industry today and various other applications in the future. Now I'll hand it back to the operator for any questions. Operator?

Parker Stewart Meeks: I would like to thank all of my colleagues here at Hi zone for their dedication and execution throughout 2023.

Parker Stewart Meeks: Finally, we appreciate your ongoing engagements as we collaborate with customers and partners to bring <unk> cutting edge hydrogen fuel cell technology to the forefront of the trucking industry today and.

Parker Stewart Meeks: And various other applications in the future.

Speaker Change: Now I'll hand, it back to the operator for any questions operator.

Operator: Thank you. If you have a question, please press star 1 on your telephone keypad. If you have queued up and want to withdraw your question, simply press star 1 again.

Speaker Change: Thank you if you have a question. Please press star one on your telephone keypad. If you have queued up and want to withdraw your question simply press Star one again.

Steven Bryant Fox: Your first question comes from the line of Steven Fox with Fox Advisors. Your line is open. Hi, good morning.

Speaker Change: Your first question comes from the line of Steven Fox with Fox Advisors. Your line is open.

Steven Bryant Fox: Hi, Good morning, I guess I had two questions first off.

Parker Stewart Meeks: I guess I had two questions. First off, I was wondering if you could talk a little bit about any learnings from the trials that you did throughout 2023 into 24 that maybe, you know, either help you to engage with other fleets or applications or just maybe speed up the trialing process. And then I had a follow-up. Great. Hey, Steve, good morning.

Steven Bryant Fox: Was wondering excuse me if you could talk a little bit about any learnings from the trials that you did throughout 2023 into 24, then maybe.

Steven Bryant Fox: Either engaged helping to engage with other fleets or applications or just maybe speed up the trialing process and then I had a follow up.

Steven Bryant Fox: Great Hey, Steve Good morning. Thanks, So much for the question and we're always excited to talk about the process to try and lay in learning and improving the fuel cell technology in the powertrain. So.

Parker Stewart Meeks: Well, thanks so much for the question. And we're always excited to talk about the process of trialing, learning, and improving fuel cell technology in the powertrain. So, as we've noted in previous calls, we have been in trial for quite some time. We launched our Class A trial program in March of 2022.

Speaker Change: As we've noted in previous calls we have been in trial for quite some time, we launched our class a trial program in March 2022.

Parker Stewart Meeks: We completed 20 major trials just in North America, as one example, since March of 22, 14 trials in the 2023 calendar year. And we're excited that that's expanding, right? We have 24 total trials planned in 2024 across both the Class A truck and the refuse truck in the U.S. alone. And the learnings have been significant over that time.

Speaker Change: So putting 20 major trials just in North America as an example, since March 22, 2014 trials in 2023 calendar year and we're excited that that's expanding right. We have 24 total trials planned in 2024 across both the class a truck and the refuse truck in the U S alone and the learnings have been significant over that time, what's exciting.

Parker Stewart Meeks: What's exciting is that we still have the first trucks that we put together, of course. And when you look at those Class A trucks, the first trucks in the trials, side by side with the latest technology, so much has changed from the powertrain, from the integration approach, even the look and feel of the truck for the driver, where the steps are positioned, how they get in and out of the truck, how they operate the truck. And the learnings, frankly, for us have been as much about the performance of the truck and optimizing and upgrading that as it has been how we interact with the fleet, and how we improve the experience for the driver. And I'll give you a couple of examples of that.

Speaker Change: We still have the first trucks that we put together of course when you look at those class eight truck the first trucks and trial side by side with the latest technology.

Speaker Change: So much has changed from the powertrain from the integration approach, even the look and feel of the truck to the driver were the steps are positioned how they get in and out of the truck how they operate the truck.

Speaker Change: And the learnings frankly for us have been as much about the performance of the truck and optimizing and upgrading that as it has how we interact with the fleets how we improve the experience for the driver and I'll give a couple of examples of that one when we launched the first ever fuel cell trucks.

Parker Stewart Meeks: One, when we launched the first ever fuel cell truck in commercial operation in Texas at Port Houston in December of 2022, which we did to show U.S. fuel cell trucks are ready to do drayage, not just in California, but across the country, which we're excited, hopefully, to expand through the zero emission port equipment funding coming out shortly in the Inflation Reduction Act. That trial was the next step in our testing of various weather environments. So we tested the trial through its paces in cold weather in Edmonton, Canada, starting in that winter of 2022, with the truck showing up in minus 20 and minus 30 degree temperatures, which went through learnings on preheat and other things to now have run for two consecutive winters up in Canada. We've done hot weather testing in the LA Basin and in central Texas in the summer with up to 100 and 105 degree Fahrenheit temperatures.

Speaker Change: Actual operation in Texas at Port Houston in December 2022, which we did to show.

Speaker Change: The U S fuel cell trucks are ready to do drayage, not just in California, but across the country, which we're excited hopefully to expand through the zero emission for equipment funding coming out shortly.

Speaker Change: Inflation reduction act that trial was a next step in our in our testing of various weather environment. So we tested the trial through its paces and cold weather in Edmonton, Canada, starting in that winter of 2022.

Speaker Change: The truck showing up and minus 20 minus 30 degree temperatures.

Speaker Change: Went through learnings on pre heat and other things. So now have run for two consecutive winters up in Canada, We've done hot weather testing in the La basin and Central Texas in the summer with up to 100 105 degree Fahrenheit attempts that have a lot of learning.

Parker Stewart Meeks: And a lot of learning on how to keep the truck and the technology cool through that. And we've done a lot of testing in the LA Basin and in central Texas in the summer with up to 100, 105 degree Fahrenheit temperatures, trial test, because I'm from Houston originally. The monsoon season comes through in Houston. When we lost that trial the first day, there was a significant rainstorm the night before.

Speaker Change: And I keep the truck and the technology pull through that experience in Houston I'll call. It our wet weather.

Speaker Change: <unk> trial.

While trial test because I'm from Houston originally at the monsoon season comes through in Houston, and then we lost that trial the first day.

Speaker Change: There was a significant rainstorm when I before we always tell our drivers of our of our fleet.

Parker Stewart Meeks: We always tell our drivers of our fleet customers to take that truck anywhere it needs to go. We need to really test it and learn. So, long story short, there's been a foot of standing water on the feeder road in South Houston near the airport, and the driver takes it at 45 miles an hour.

Speaker Change: Customers take that truck anywhere needs to go we need to really test it and learn so long story short there has been a photo standing water on the feeder road.

Speaker Change: South of Houston near the fourth driver it takes it to 45 miles an hour and when you do that through our photo standing water that water permeates every crevice of that truck is actually found a high voltage faults safely shut the dropdown, we get it back to the the service Bay dry it out doesn't operation about 'twenty.

Parker Stewart Meeks: And when you do that through a foot of standing water, that water permeates every crevice of that truck. It actually found a high-voltage fault and safely shut the truck down. We got it back to the service bay, dried it out, got it into operation about 24 hours later, and completed the rest of that trial very successfully. We found the storm. We found the water, waterproof fault source and swapped that out in the design, and we haven't seen that issue come back since.

Speaker Change: Hours later and complete the rest of that trial very successfully we found the water waterproof fault.

Speaker Change: Source swap that out in the design and haven't seen that issue come back. So we're very transparent about the learnings from trials and our customers see that appreciate that and we're very thankful to have tremendous customers like performance food group.

Parker Stewart Meeks: So, we're very transparent about the learnings from trials, and our customers see that, and appreciate that. And we're very thankful to have tremendous customers like Performance Food Group that we've been working with now for over two years since their trial. And Kalka in the port of Houston, who ran that trial for us and has been a great partner to us since. And these leaders, these customer leader fleets who are really motivated to not just get going but learn and help everyone improve, are why we've been able to get the experience we have at tens of thousands of miles and kilometers globally on our powertrain and why we're so confident in the powertrain that we've developed and are launching Great, that's very helpful.

Speaker Change: We've been working with now for over over two years since their trial and target and the port of Houston, who ran that trial for us and has been a great quarter to assess and these leaders. These customer leader fleets, who really are motivated to not just get going but learn and help everyone. In Peru are why we've been able.

Speaker Change: To get the experience, we have the tens of thousands of miles and kilometers globally, our powertrain and why we're so confident in the powertrain that we've developed and are launching now.

Speaker Change: Great Great. That's helpful and then just.

Parker Stewart Meeks: And just from a funding slash regulatory standpoint, like you mentioned a bunch of opportunities where the technology could be advanced through new funding in the U.S., but how would that sort of relate to maybe direct funding or your ability to, you know, have a more pronounced position in the supply chain as hydrogen develops? Is there anything you could point to that we should be watching closely for 24 that will be sort of, if not a game changer, an incremental positive on the next one? Thank you. Absolutely, Steven. Thank you for that, as well.

Speaker Change: From a funding slashed regulatory standpoint, you mentioned a bunch of opportunities were.

Speaker Change: The technology could be advance through new funding in the U S, but how.

Speaker Change: How would that sort of relate to may be direct funding or your ability.

Speaker Change: <unk> two <unk>.

Speaker Change: I have a more pronounced.

Our position in the supply chain as as hydrogen develops is there anything you can point to that we should be watching closely for 'twenty for that will be sort of it's not a game changer in incremental positives on excellent. Thank you.

Speaker Change: Absolutely David Thank you for that as well we are very excited by the tailwind that have continued to grow globally in particular here in the U S for subsidy to deploy and start to Decarbonize.

Parker Stewart Meeks: We are very excited by the tailwinds that have continued to grow globally, and in particular here in the U.S., for subsidies to deploy and start to decarbonize trucks. We see a clear three-step pathway for subsidies here for us to scale with our customers in line with our production capacity and in line with their appetite over a three to four-year scaling plan. The first step is active today, and it's very deep, which is California, right? The state of California still has over $300 million available right now for Class 8 zero emission trucks with a $240,000 per truck base voucher for large fleets that can go up to over $400,000 for small fleets and drays and certain other applications, stacking various subsidy sources on top of the HVACAR voucher. That's active now.

Speaker Change: Trucks.

Speaker Change: We see a clear three step pathway for subsidy here for us to scale with our customers in line with our production capacity and in line with their appetite over a three to four year scaling plan. The first step is actually today and has very deep, which is California state of California still has over $300 million available right now for class eight zero emission trucks.

Speaker Change: With the $240000 per truck based voucher for large fleets that can go up to or $1000 for small fleets and your agent certain other applications.

Speaker Change: <unk> <unk>.

Speaker Change: Various subsidy sources on top of the HVAC card voucher.

Parker Stewart Meeks: We said on our last earnings call that even if we only had what we see as our opportunity share of fuel cell trucks in California, based on what we expect fuel cell trucks to make up of California's decarbonization goals through 2030, we would take the company to its cash flow breakeven by 2030 just with California. The second step is ports, right? And that's under the Inflation Reduction Act's clean ports funding, which includes the Zero Emission Port Equipment Fund. That's $2.6 billion of funding with applications going in now and awards expected to be awarded starting in December of this year. That's up to $500 million per port, which includes drayage trucks and hydrogen refueling infrastructure. And as we mentioned in the comments, we're excited to have our joint application with a customer and a fueling partner selected by Port Houston to be a part of their application to that program. So that's the first example of HIZON supporting an application to go in. And we'll see; we hope that that application is successful. There are other ports that we're in discussions with.

Speaker Change: As active now we said on our last earnings call that even if we only.

Speaker Change: What we see as our opportunity share a fuel cell trucks in California, there is and what we expect fuel cell trucks to makeup of California's decompensation goals through 2030, we would.

Speaker Change: Take the company to its cash flow breakeven by 2030, just with California.

Speaker Change: The second step is.

Speaker Change: Ports, right and Thats under the inflation reduction acts clean ports funding, which includes the zero emission political coupon is $2 $6 billion of funding with applications going in now and award is expected to be awarded starting in December of this year net of a $500 million per port which includes drayage trucks.

Speaker Change: And hydrogen refueling infrastructure and we actually mentioned in the comments, we're excited to have our joint application with a customer and fueling partner to be selected by port Houston to be a part of their application to that program. So that's the first example of <unk> support.

<unk> <unk> application to go win but we'll see we hope that that application is successful and the other <unk>.

Speaker Change: So we are in discussions with and we see that as a critical program to put drayage trucks and fueling infrastructure at major ports, both coastal and inland and then the third step is of course the dose.

Parker Stewart Meeks: And we see that as a critical program to put drayage trucks and fueling infrastructure at major ports, both coastal and inland. And then the third step is, of course, the DOE Hydrogen Hub Program, which I think we're all aware of, $7 billion awarded to seven hubs. HIZON is proud to have supported several of the awarded hubs and is currently actively working to help those hubs and our fleet customers with applications.

Speaker Change: Hydrogen hub program.

Speaker Change: We're all aware of $7 billion.

Speaker Change: Awarded seven hubs <unk> proud of supported several other of the awarded hubs and are currently actively working to help those subs and our fleet customers with applications.

Parker Stewart Meeks: So we have a tremendous opportunity we see on the truck side. On the fueling side, the 45V production tax credit in the IRA is also critical to us and to the industry. Now, anyone who's in hydrogen has seen the significant discussions going up to Congress about how that initial guidance has come back and what we all think are prudent changes that are critical to be made. Even without that 45V PTC, we still see a clear path and opportunity, given what we've said publicly, we believe that 1,000 trucks per year, 1,000 fuel cell systems per year capacity, we will be on a significant path toward TCO parity without needing subsidy But that fuel subsidy, we do think is important to us.

Speaker Change: So we have tremendous.

Tremendous opportunity, we see on the truck side on the fueling side the 45.

Speaker Change: Yes.

Production tax credit and the Iras that are so critical to us and to the industry and I think that anybody is in hydrogen has seen the significant discussions going up the Congress about how that initial guidance has come back and what we all think are prudent changes that are critical to be made.

Speaker Change: Even without that fortify the PTC, we still see a clear path and opportunity given we've said publicly we believe that 1000 trucks per year 1000 fuel cell systems per year capacity.

Speaker Change: We will be at a.

Speaker Change: Significant path towards TCR parity without meeting subsidy on the truck side.

Speaker Change: That fuel subsequent to think is important to us. The last thing I'll say is there's other provisions that are under the radar that all help us.

Steven Bryant Fox: The last thing I'll say is there are other provisions that are under the radar that all help us get this cost down. One is the 45W clean truck tax credit, which gives us $40,000 per truck that we're working right now to ensure that HIZON trucks are able to qualify for. So, a very clear path we see for subsidy. I think some of the major things to look for are continued deployments and voucher applications by Hyzon customers under the California CARB H-5 program. And then we're all focused on this first application. Others hope it will come in the zero emission port equipment funding, with awards currently slated for December of 2024. Great, that's a helpful perspective. Thank you. Thank you, Steve. Your next question comes from the line of Craig Irwin with Ross MKM. Your line is open.

Speaker Change: Get this cost down one is the 45 W. Clean truck tax credit, which gives us $40000 per truck that we're working right now to ensure the highest on trucks are able to.

Speaker Change: Qualify for them, so very clear path, we see for subsidy I think some of the major things to look for our continued deployments and Bachelor applications by iPhone customers under the California Carb Hbf program and then we're all focused on this first application of this hopefully to come and as Eric mentioned Port equipment funding with awards currently slated for dollars.

Speaker Change: Remember about 2024.

Speaker Change: Great. That's helpful perspective, thank you.

Speaker Change: Thanks, Steve.

Speaker Change: Your next question comes from the line of Craig Irwin with Roth and Pam Your line is open.

Craig Irwin: Good morning, gentlemen. Thank you for taking my questions. Parker, I just wanted to start off with the improved cash use. You guys seem to be tracking ahead of what you were guiding us for earlier in 2023 and even ahead of what you were discussing for the outlook for 2024. Can you maybe describe for us what's working for you?

Craig Irwin: Hi, Good morning, gentlemen, thank you for taking my questions.

Craig Irwin: I just wanted to start off with the improved cash cash use.

Craig Irwin: You guys seem to be tracking ahead of what you are guiding us for.

Speaker Change: In our earlier in 2023 and <unk>.

Craig Irwin: Even ahead of sort of what you were discussing for the outlook for 'twenty four.

Craig Irwin: Can you maybe describe for us what's working for you maybe some of the actions that you've taken that are getting these results.

Parker Stewart Meeks: Maybe some of the actions that you've taken that are getting these results? Thanks so much, Craig, and great to hear your voice. So I'll pass it over to Steve for comments. Yeah. Hey, Craig, thanks for the question and thanks for bringing it up. We're really proud of our performance in managing cash burn expenses here at Hyzon. I think if you look at the numbers, you'll see that, you know, just from Q1 to 23, our net cash burn was about 46 million, and here in Q4, about 25 and a half million. So that's a significant reduction over the course of the year. And even if we had included that SEC payment in Q4, like I mentioned, we still would have come in in that range. And so it really represents, you know, a number of things.

Craig Irwin: Thanks, So much Greg and great to hear your voice, so I'll pass that over to Steve to comment, Yes, Hey, Craig. Thanks for the question and thanks for bringing it up we're really proud of our performance in managing.

Steve: Cash burn and expenses here at highs on I think if you look at the numbers, you'll see that just from Q1 'twenty three our net cash burn was about $46 million and here in Q4 about $25 $5 million right. So that's a significant reduction over the over the course of the year.

Steve: And even if we had included that SEC payment in Q4 like I mentioned, we still would have come in that in that range and so it really represents a number of things. It's our renewed strategic focus really focusing the business on the most important things as we rolled out our new strategy earlier in the year driving cost efficiencies.

Stephen Paul Weiland: It's our renewed strategic focus, really focusing the business on the most important things as we rolled out our new strategy early in the year, striving for cost efficiencies. And we're also benefiting from, of course, seeing the kinds of legal and consulting and accounting costs come down as we move.

Steve: And we're also benefiting from of course, seeing kind of legal and consulting and accounting fees come down as we move we move out of that investigation.

Stephen Paul Weiland: We move out of that investigation. So, you know, right now in that fourth quarter, that worked out to about eight and a half million in monthly average recurring cash burn. You know, that level of sub-10 million per month is pretty representative of how the business is operating right now. And we're not giving guidance for the full year, but I think that's pretty indicative of what we're doing. And it also lets us continue to prioritize and invest in the key areas of our technology and move that forward.

Steve: So right now and therefore that worked out to about $8 $5 million of monthly average recurring cash burn.

Steve: That level sub $10 million per month level is pretty representative of how the business is operating right now and we're not giving guidance for the full year, but I think thats pretty indicative of what we're doing and it also lets us.

Steve: To prioritize and invest in key areas of our technology and move that forward and I'll just add to that.

Parker Stewart Meeks: You know, we're really proud of the fact that I feel, you know, we believe we're showing significant progress and a real inflection point in the region of commercialization, not just in the development towards SOP of the 200 Catalog fuel cell system and our plant here in Bolingbrook, in the Chicago area, which we're very excited about the upcoming SOP that we're anticipating in the second half of this year. I mean, it's a major step, not just for us but for the fuel cell industry in the U.S. And a plant like this coming online. And additionally, with this global powertrain, I mean, we've just, you know, brought the refuse program and platform from Australia to the U.S., and we're eager to get that leading refuse truck into trial here in the U.S. soon. Additionally, launching the 200 kilowatt powertrain in the right-hand drive six by four cab over truck in Australia. Australia this past month.

Steve: We're really proud of the fact that.

Steve: We believe we're showing significant progress.

Steve: No inflection point that we've reached and commercialization not just in the development towards the Sofia 200 kilowatt fuel cell system in our plant here in Bolingbrook, and Chicago area, which we're very excited about.

Steve: The upcoming ESOP that we're anticipating in the second half of this year. There is a major step not just for us but for the fuel cell industry in the U S. In a plant like this coming online.

Steve: And then additionally, with this global powertrain I mean, we've just.

Steve: Brought the refuse program and platform from Australia to the U S.

Steve: Eager to get that leading refuse truck.

Trial here in the U S.

Steve: Soon and additionally, launching the tuner kilowatt powertrain and the right hand drive $6 four catalog where truck.

Steve: Australia this.

Parker Stewart Meeks: So making all that progress while continuing to drive cash burn down, we think shows that we've been effective in maintaining and driving the commercialization of Hyzon, our technology, while also continuing to find opportunities to reduce cash burn. So that remains our focus, driving cash burn, managing it. We have a clear view of the levers we can continue to pull to manage cash burn appropriately to make sure that we're maximizing value for shareholders and how we're advancing the business and being prudent with our resources. Great, thank you for that.

Steve: Past loss, making all of that progress while continuing to drive cash burn down we think shows that we've been effective in maintaining and driving the commercialization of high is one of our technology, while also continuing to find opportunities to reduce cash burn.

Steve: That remains our focus is driving cash burn managing it we have a clear view of the levers. We can continue to pull to manage cash burn appropriately to make sure that we're maximizing value for shareholders and how we are advancing the business and being prudent with our resources.

Steve: Okay.

Speaker Change: Great. Thank you for that so then as the focus of the company is shifting right.

Craig Irwin: So then as the focus of the company is shifting, right, you know, moving from B samples to C samples, moving from testing primarily on, I guess, rigs, I guess we call them, not big rigs, but benchtop rigs, right, to rolling this year ahead of SOP. All those efficiencies that you've achieved on, you know, sort of tightening the screws, delivering a little bit of savings on how you're executing your strategy, do those continue to translate through likely over the next number of months? You know, are those lessons things that have long-term applications?

Speaker Change: Moving from beef samples to see samples moving from testing.

Primarily on.

Speaker Change: Yes.

Speaker Change: I guess, we call them <unk>.

Speaker Change: But a bench top breaks right to rolling this year ahead of vessel.

Speaker Change: All of those efficiencies that you've achieved.

Speaker Change: Sort of tightening the screws will learn a little bit of savings.

Speaker Change: And how you are executing a strategy did those continue to translate through.

Speaker Change: Likely over the next number of months.

Speaker Change: Are those lessons things there that are that are long term applicable.

Parker Stewart Meeks: They are, yeah. So that's a really important topic to us, Craig. So how we think about testing, trialing as a comprehensive system, and I'll give an answer and then ask Dr. Mordick to add any thoughts he may have. But it does run from the bench tests in our full-scale 250-kilowatt load bank testing facilities here in Bolingbrook, which is a lab that we think is a highly productive and and a real showcase for the company that we love to show off any time people come to visit us, to the on-track program that we run at the test track utilized in Michigan here in the U.S. and test track in Europe and in Australia that we have to test each of our truck platforms and our customer trial programs as well.

Speaker Change: They are yes, that's a really important topic to us Craig So how do we think about testing and Trialing is a comprehensive system and I'll give you an answer and then ask Dr. <unk> to.

Dr. Christian: To add any thoughts you may have.

Speaker Change: But it does run from the bench test in our.

Speaker Change: R R.

Speaker Change: Full scale terrific kilowatt load bank testing facilities here in Bolingbrook, which is a lab that we think is a highly productive.

Speaker Change: And a real showcase for the company that we love to show up anytime people come to visit us to the on track program that we ran at the test truck utilize in Michigan here in the U S. <unk> in Europe, and Australia that we have to test each of our truck platforms.

Speaker Change: And our customer trial program as well and what's important is it's a multi stage program. The test durability that test performance on the test fuel efficiency.

Parker Stewart Meeks: And what's important is it's a multi-stage program that tests durability, that tests performance, and that tests fuel efficiency that allows us to optimize every element of the powertrain. So it starts, of course, with the fuel cell itself. Our 200-kilowatt fuel cell system, SOP, is not just testing the system, right? It is testing single cells. It is testing short stacks. It is testing full stacks.

Speaker Change: Laos us to optimize every element of the powertrain. So it starts of course with the fuel cell itself or join a kilowatt.

Speaker Change: Fuel cell system Sop is not just testing the system right. It is testing single celled assessing short stack and assessed and full stack testing the full system. It is documenting learnings and integrating those throughout the SLP. So I can tell you that even in the 200 kilowatt fuel cell system itself, we're already on.

Parker Stewart Meeks: It is testing the full system. It is documenting learnings and integrating those throughout the SOP. So I can tell you that even in the 200-kilowatt fuel cell system itself, we're already on multiple sub-generations of that technology as we've identified and built in additional improvements in the design even over the past 12 months. And what's exciting about that is we are confident when we bring that system to SOP here in Bolingbrook that we're still on track for later this year. That system will not just be a high-performance fuel cell system that we think is ahead of others that are in trucks today, but it also will start to go through cost, performance, and quality improvements in the balance of plants in the MEA, the catalyst design, as we're optimizing and improving it based on the findings through our very rigorous A-sample through C-sample pre-production and SOP processes.

Speaker Change: Multiple sub generations of that technology as we've identified and built an additional improvement in the design even over at all.

Speaker Change: The past 12 months and that is what's exciting about that is we are confident when we bring that system <unk> here in Bolling Brook, if we're still on track for later this year that system will not just be a high performance fuel cell system.

Speaker Change: We think as ahead of others that are in trucks today.

Speaker Change: But it also is one that will already have started to go through cost performance and quality improvements and about the plans in the EMEA. The catalyst design as we're optimizing improving it based on the findings through our very rigorous.

Speaker Change: And pull through.

Speaker Change: <unk> ample preproduction and Sop.

Speaker Change: Process and on the truck side as I said before all.

Parker Stewart Meeks: And on the truck side, as I said before, all the testing that we've done now for tens of thousands of miles and kilometers, look, in the grand scheme of this technology, we all across the industry have a long way to go to test and validate and prove performance in the use case, but we've already shown tremendous gains in performance and the optimization of the powertrain and the performance of the truck. Even going from the 110 kilowatt technology in the truck to the 200 kilowatt technology in the truck, we're seeing an expectation of 20 percent better fuel efficiency on the test track with that 200 kilowatt powertrain in the truck in the same use case, which, by the way, is 20 percent better than diesel. And when half the cost of a truck's life is fuel, that has a tremendous impact on our progress towards So, all of that learning applies.

Speaker Change: All the testing that we've done now over tens of thousands of miles and kilometers look in the Grand scheme of this technology.

Speaker Change: All across the industry have a long way to go to two to test and validate and improve performance.

Speaker Change: In the use case, but we've already shown tremendous gains and the performance and the acquisition of the powertrain and the performance of the truck even going from the 110 kilowatt technology in the truck the 200 kilowatt technology in the truck, we're seeing an expectation of 20% better fuel efficiency.

Speaker Change: On the test track with that 200 kilowatt powertrain in the truck and the same use case, which by the way, that's 20% better than diesel and when half the cost of a truck in the slides is fuel that has a tremendous impact on our progress towards silica cost of ownership parity with visa and so all of that learning applies and what's also exciting for the company long term.

Parker Stewart Meeks: And what's also exciting for the company long term is that it has a direct impact on the truck use case today, right? And that's what we need to deliver to commercialize the technology. But when you look at the valuation of Hyzon, the option value and the upside in putting the same 200 kilowatt technology into ground support equipment at airports, into stationary and remote power concepts, are relatively near term in the grand scheme of this industry evolving. And all those learnings on fuel sales performance, and powertrain integration have a real benefit to us in all these cases that will come as well. So we're excited.

Speaker Change: Its direct impact on the truck use case today, right and Thats, what we need to deliver to commercialize the technology, but when you look at the valuation of high zone, the option value in the upside and putting the same store. If you a lot of technology in the ground the ground support equipment at airports and the stationary power concepts are.

Speaker Change: <unk> near term in the Grand scheme of this industry evolving and all of those learnings on the fuel cell. Its performance. The powertrain integration has a real benefit to us.

In all these cases that will come as well. So we're excited our customers see it and that's why they are with us and the other example that I'll give you which shows the progress the first chalk that we brought into the trial was the U S. One kilowatt truck in March 2022. Since then the U S drug spend through all the testing that you've talked about the fuel sales trends throughout the test.

Parker Stewart Meeks: Our customers see it, and that's why they're with us. And the other example that I'll give you, which shows the progress, the first truck that we brought into trial was the US 110 kilowatt truck in March 2022. Since then, the US truck's gone through all the testing that we've talked about. The fuel cell has gone through all the testing that we've talked about. We've launched the truck in Europe. We've launched the refuse vehicle in Australia. That refuse vehicle in Australia, I can't emphasize how excited we are about that enough. That truck ran four months with remanufactured parts, unconstrained, up and down, 18% grade, and had zero unplanned downfall, which is a tremendous outcome for a technology at this stage and one that we're quite excited to build on, which we think shows the progression of not just our fuel cell technology but our powertrain as well. Excellent. That's really impressive.

Speaker Change: We've talked about we've launched the truck in Europe, we've launched the refuse vehicle in Australia that refuse dig in Australia I can't underscore how excited we are about that enough that truck rack four months with the reminders unconstrained up and down 18% range and near Sydney, Australia and had zero unplanned.

Speaker Change: And downtown which is a tremendous outcome for our technology at this stage and one that we're quite excited to build on which we think shows.

Speaker Change: The progression of not just our fuel cell technology, but our powertrain as well.

Speaker Change: Excellent that's really that's really impressive.

Craig Irwin: So Parker, my next question, I guess I should preface it, right? We all know that you are using very conservative accounting, right? Your customer acceptance tests are robust. When the customer accepts a product, it's not coming back, right?

Speaker Change: My next question I guess I should preface right. We all know that you are using very conservative accounting right.

Speaker Change: Customer acceptance tests.

Speaker Change: Our robust when the customer accepts a product it's not coming back right, but if we were to go to the other the other end of the spectrum. If we were to maybe look at F O B.

Parker Stewart Meeks: But if we were to go to the other end of the spectrum, if we were to maybe look at FOB, like if we were selling widgets that weren't this technological innovation that you guys have come up with, if we were selling simple widgets, you know, what would revenue possibly look like, you know, for 2023? You know, would we potentially have seen something in the teens or mid-teens from the 19 trucks that you delivered? You know, just so we can, just so we can.

Speaker Change: If we were selling widgets.

Speaker Change: We're at this site technology.

Speaker Change: The innovation that you guys come up with if we were selling simple widgets.

Speaker Change: And what would revenue or possibly look like.

Speaker Change: For 2023.

Speaker Change: Would we potentially have seen something in the.

Speaker Change: In the teens mid teens.

Speaker Change: From the 19 trucks that you delivered.

Speaker Change: Just so we can just so we can.

Stephen Paul Weiland: Scope out how the separation from shipments and revenue recognition works and understand how to compare this to others that might not be using as conservative accounting. Yeah, look, it's a great question, Craig. I do appreciate you recognizing that, you know, we are always driving to achieve transparency and appropriate accounting principles. I'll give a high-level answer and then hand it over to Steve. But at a top level, you're correct that as we're deploying vehicles this year, sorry, last year and this year, we are deploying them into a commercial construct, which will typically reflect the commercial agreement that we have with Performance Food Group, PFG, in the US. This is a multi-year commercial agreement with a total of, in PFG's case, 50 potential vehicles across three stages, where the first five are binding, and the next tranches unlock as we deliver the prior tranche.

Speaker Change: Scope out how the separation from shipments and revenue recognition works.

Speaker Change: And understand how to compare this to others that might not be using its conservative accountable.

Speaker Change: Yeah look it's a great question, Craig and I do appreciate you recognizing that.

Speaker Change: We always.

Speaker Change: Our driving to achieve transparency and appropriate accounting principles I'll give a.

Speaker Change: A high level answer and hand, it over to Steve.

Steve: At a top level you are correct that as we're deploying vehicles. This year, sorry last year and this year.

Steve: We are deploying them into a commercial construct which typically will reflect the commercial agreement that we have with performance food group PFG in the U S.

Steve: Which is a multiyear commercial agreement with a total of in Pfg's case 50 potential vehicles total across three stages, where the first five are what our binding and the next tranches unlock as we deliver the prior charge and we said before.

Stephen Paul Weiland: And we said before, you know, that first tranche of deliveries, we typically will have some kind of a risk share mechanism in place in the commercial agreement, like a buyback provision that drives us more towards operating lease accounting when we look at that financially, even though the cash may come in all up front, which is very important to us, obviously, and we're happy to have that happen. The accounting itself is a bit more conservative given some of those risk share mechanisms that are in place in most of our, not all, but most of our contracts. So when that flips, you know, when will that flip?

Steve: That first of all the deliveries, we typically will have some kind of a risk sharing mechanism in place in the commercial agreement like a buyback provision.

Steve: That drives us more towards of operating lease accounting when we look at that financial even though the cash may come in all upfront, which is very important to us obviously and we're we're happy to have that have that happen.

Steve: The accounting itself is a bit more conservative given some of those risk share.

Steve: Mechanisms are in place in most of our not all but most of our contracts.

Steve: So when that flips.

Steve: No.

Steve: When when will that flip we will see.

Parker Stewart Meeks: We will see. Our hope is that after the first tranche is delivered to a fleet and proven, and the technology is proven in the use case, that second tranche, we're then able to release those buyback provisions at more of a traditional sale. But that's all to be proven as we push towards second orders that we're hoping to achieve from our early fleets this year. Steve, do you want to add anything?

Our hope is that after the first tranche is delivered to our fleet and prove it and then the technology is proven and the use case that second tranche or been able to release those.

Speaker Change: Back provisions that more of a traditional sale, but that's all to be to be proven as we push towards second orders that were hoping to achieve from our early fleets. This year. If you want to add yes. Thanks Carter I'll just add a few things Craig of course here at <unk>, we take compliance and our accounting reporting very seriously right. So we're following.

Stephen Paul Weiland: Yeah, thanks, Parker. I'll just add a few things, Craig. Of course, here at Hyzon, we take compliance and our accounting reporting very seriously, don't we? So we're following all the appropriate rules. We're recognizing revenue. We're working closely with our auditors to make sure everything is solid there.

The appropriate rules of recognizing revenue and working closely with our auditors to make sure everything is solid there. So I don't want to necessarily say what pro forma revenue could have been like from a 2023 perspective I guess.

Stephen Paul Weiland: So I don't necessarily want to necessarily say, you know, what pro forma revenue could have been like from a 2023 perspective. I guess, you know, the best I could do here to help you out is maybe just point you to the financials and take a look at our remaining performance obligation, right, on the balance sheet. It's about $14.8 million, and our disclosure that, you know, we expect 72% of that to translate over the next 12 months. I think you could kind of take a look at that and get an idea. Fantastic! That was what I was looking for.

Speaker Change: The best I can do here to help you out as maybe just point you into the financials and take a look at our.

Speaker Change: Remaining performance obligation right on the on the balance sheet about $14 8 million in our disclosure that we expect 72% of that to translate over the next 12 months 12 months I think you can kind of take a look at that and get an idea.

Speaker Change: That was what I was looking at so that's good.

Craig Irwin: So that's good to hear. Last question, if I may. You know, President Biden's support for the IRA for hydrogen infrastructure, you know, $7 billion we've seen awarded for infrastructure hubs, not something that was anticipated a year or two ago, right? So, really positive and helpful for the long-term development of the market. Can you talk about whether or not this is widening the circle as far as the fleets that are taking a serious look at hydrogen? Is this changing the pace of activity in some areas of the country? You know, I know in the short term, it does impact deliveries as people figure out, you know, where they get the best funding opportunities. But can you maybe unpack for us?

Speaker Change: Good to hear last question if I may.

Speaker Change: You know our president Biden support in the IRA for hydrogen infrastructure $7 billion, we've seen.

Speaker Change: Awarded for our infrastructure hubs, not something that was anticipated that.

Speaker Change: A year or two about right. So.

Speaker Change: Really positive and helpful for the long term development of the market.

Speaker Change: Can you talk about whether or not this is widening the circle as far as the fleets that are that are taking a serious look at hydrogen.

Speaker Change: Is this is this changing the tempo of activity in some areas of the country.

Speaker Change: I know in the short term.

Speaker Change: It does impact deliveries as people figure out.

Speaker Change: Where they get the best funding opportunity.

But can you maybe unpack for us what this has done to change the long term future for you guys.

Parker Stewart Meeks: You know, how has this changed the long-term future for you guys? Yeah, no, I would love to, because it's a really exciting future when you look at how this technology and the decarbonization of trucking is going to grow across the United States, and that hub program is critical to it. What it's done for our fleets, right, what's fantastic is really over the past 18 months, once we started our trial program on March 22 and started to progress it, we have a very clear picture as to where the fleets would like these trucks to go. California, everyone's focused on that because of very deep funding, like I said before, $300 million available and a voucher which pushes the price of the truck and nets the customer in But they all want to run trucks; most want to run trucks in Texas, most want to run trucks in the Midwest, want to run trucks on the East Coast as well, wherever they're located, where there's volume. The Texas Triangle, Houston, Dallas, Austin, and San Antonio, is a great example.

Speaker Change: Yes, no I would love to because it's a really exciting future. When you look at how this technology and the de carbonization of trucking is going to grow across the United States in that hub program is critical to it what it's done for our fleet right. What's that what's fantastic is really over the past 18 months. Once we started our trial program.

Speaker Change: 'twenty two is started to progress at a very clear picture as to where the fleets would like these trucks to go California everyone's focused on that because of the very deep funding like I said before $300 million available and a voucher, which pushes the price of the truck net the customer in a place where economics are feasible today.

Speaker Change: But they all want to run trucks, most one of our charts in Texas, most one or on trucks in the Midwest one of our trucks on the east coast as well wherever they're located where theres volume, the Texas Triangle, Houston, Dallas Austin, San Antonio is a great example, that triangle is perfectly suited for fuel cell technology at today's stage, it's about 200 miles per leg.

Parker Stewart Meeks: That triangle is perfectly suited for fuel cell technology at today's stage. It's about 200 miles per leg of the triangle, and fits very well within the current range of our truck. And there are initiatives already ongoing that are small scale. For instance, Interstate 45 between Houston and Dallas is a federal hydrogen highway with three hydrogen stations that are already operating under a prior funding mechanism. And as I mentioned before, Houston's been quite aggressive in driving decarbonization grant applications, like the one that we're very fortunate to have been selected with our partners as their application going in under the Clean Ports Funding. And so what we see that this hub program is doing, as one example, the Houston-based High Velocity Hub is one of the seven, right?

Speaker Change: The triangle fit very well within the target range of art of Archrock and their initiatives already ongoing there is small scale, you're going for instance, Interstate 45 between Houston and Dallas, the federal hydrogen highway with three hydrogen stations that are already in siding under.

Speaker Change: Our prior funding mechanism and as I mentioned before for Houston has been quite aggressive in driving de carbonization grant applications like the one that we're very fortunate to have been selected with our partners at their application going in under the Queen towards funding.

Speaker Change: And so what we see that the sub where gaming is doing as one example, the Houston based high velocity hub is more to the right and so that hub is a tremendous opportunity we believe for fleets to.

Speaker Change: Put in projects with us and fueling providers.

Parker Stewart Meeks: And so that hub is a tremendous opportunity, we believe, for fleets to put in projects with us and fueling providers to be a part of that hub and to drive trucks once that hub is ideally funded and deployed into that Texas Triangle with significant freight demand and opportunity. So what it's done is it's given our fleet customers, and many more. You know, experienced fleets have gotten used to trying battery electric trucks for up to six to 12 months, right? And then making purchase decisions on battery electric trucks and trying to get chargers permitted and sited behind warehouse fences for those battery trucks. The fact that in many parts of the country, including parts of California, where you have customers, where you have freight, you also have a grid that's stressed.

Speaker Change: To be a part of that hub and to drive trucks. Once that hub is ideally funded and deployed into that Texas triangle with a significant freight demand and opt.

Speaker Change: Opportunity. So what it's done is it's given our fleet customers are tangible visibility into how they can run trucks outside of California relatively near or mid term timing given that those funds. We do hope start to flow certainly in the decade.

Speaker Change: And the additional thing is when you pair that with the other driver fleets.

Speaker Change: Which has been.

Speaker Change: The performance of fuel cell trucks versus the performance and availability of battery trucks, that's frankly been an even bigger driver of fleets and fleets coming to us. They may not have been looking at origin before the experienced fleets have gotten trying battery electric trucks for up to $6 six to 12 months and then making purchases.

Speaker Change: Purchase decisions on battery electric trucks, and try to get Chargers permitted incited behind warehouse fences for those battery trucks. The fact that in many parts of the country, including parts of California, where you have customers, where you have freight you also have a grid that stressed you have substations.

Parker Stewart Meeks: You have substations that don't have the capacity, in some cases, to put more than 20 trucks with the chargers behind a single warehouse fence. And you have five to six year lead times, some customers tell us, to get any material number of chargers with enough power per charger to not have them sit there for eight hours, which a lot of Class 8 fleets can't have eight-hour charging. So that's driven fleets to also expand their view of the use case for fuel cell trucks and how much it needs to be a part of their future. Given the frictions on weight penalty, and the frictions on operating performance profile on range.

Speaker Change: We have capacity in some cases to put more than 20 trucks with the charters by in a single warehouse fence.

Speaker Change: Five to six year lead times dropped some customers tell us to get any material number of Chargers with enough power per charger to not have them sit there for eight hours, which a lot of class a police can't have eight hour charges. So that's driven fleets to also expand their view of the use case for fuel cell trucks and how much it needs to.

Speaker Change: Be a part of their future given the frictions on weight penalty. The frictions on operating performance profile a range and then on infrastructure availabilities when you add the battery truck challenges.

Parker Stewart Meeks: And then on infrastructure availability. So when you add the battery truck challenges, which is the biggest driver, if you ask us, of why there's $300 million sitting in California's CARB HVIP program today. You know, when I joined Hyzon in June of 2021, when CARB opened up HVIP funding, they'd released anywhere from $50 to $100 million at a time. It would sell out in 20 minutes.

Speaker Change: <unk> is the biggest driver if you ask us of why there's $300 million sitting in the California Carb HVAC program today, when I joined <unk> in June of 2021, when Carb opened up Agi funding, they released anywhere from $50 million to $100 million out of time.

Speaker Change: 20 minutes does better trucks were.

Parker Stewart Meeks: The battery trucks were being applied for in significant numbers. That money is built and sitting as fuel cell trucks come to market, in part because of all these frictions on the battery truck side. So, we're seeing a clear movement to hydrogen.

Speaker Change: We're being applied for insignificant numbers that money is built and is sitting as fuel cell trucks come to market in part because of all these frictions on the battery truck side. So we're seeing a clear movement to hydrogen we're seeing the use case for hydrogen trucks expand because of both the challenges of battery trucks do the work the diesel.

Parker Stewart Meeks: We're seeing the use case for hydrogen trucks expand because of both the challenges of battery trucks to do the work that diesel does today and, to your point, the clear path that the government at the federal and the state level is taking in this three-step approach to fund this program from California to the ports, but certainly the hub. Your next question comes from the line of Rob Wertheimer with Melius Research. Your line is open. Thank you. I'll have two if I can.

Speaker Change: Does today and to your point the clear path that the government at the federal and state level are showing in this three step approach to fund this program from California to the ports, but certainly the hubs.

Speaker Change: Your next question comes from the line of Rob Wertheimer with Melius Research. Your line is open.

Robert Cameron Wertheimer: Thank you will have two if I can you mentioned I guess with the 200.

Robert Cameron Wertheimer: You mentioned, I guess, with the 200, the potential at least for expansion compared to the other industrial end markets, including rail Stationery and others. Is that more of an outreach program from you guys, or is it demand pull? And does that extend to potential strategic partners? I mean, can you just kind of describe that ecosystem and the level of interest in what's driving those? Hey, Rob. Good morning. Thanks so much.

Robert Cameron Wertheimer: Potential at least for expansion into other industrial end markets, including rail stationery and other is that more of an outreach program from you guys or is that demand pool and does that extend to potential strategic partners. I mean can you just kind of describe that ecosystem and the level of interest in what's driving those comments.

Speaker Change: Hey, Rob good morning, Thanks, so much I mean, the future for fuel cell technology is significant and we're excited to talk about the next market that we see after after truck so to answer it directly.

Parker Stewart Meeks: I mean, the future for fuel cell technology is significant, and we're excited to talk about the next markets that we see after trucks. So, to answer it directly, the opportunity is as much a pull from strategic counterparties and other entities that want to get going and have real decarbonization goals as it is us pushing and identifying where that could happen. And let me give you a couple of case studies on that. One is stationary and mobile power.

Robert Cameron Wertheimer: The opportunity is as much a poll from strategic Counterparties and other entities that want to get going and our royalty carbonization goals as it is us.

Robert Cameron Wertheimer: Pushing and identify where that could happen and let me give you a couple of case studies on that one.

Robert Cameron Wertheimer: Stationary and mobile power, we announced <unk>.

Parker Stewart Meeks: You know, we announced previously a joint development agreement with Schlumberger. To do that, there's significant appetite from many in the industrial and remote work use cases for a decarbonized solution for power that can work. That's both inbound from partners, inbound from customers, and that's a pretty broad set of opportunities. It's inbound from data center operators, inbound from the entertainment industry who's using diesel generators to film movies and TV shows and other things, inbound from industrial operators that run off remote obstacle oil and gas and power and chemicals that need to replace generator power that's on diesel today with something that is zero carbon and find batteries to be The other example I'll give is the airport ecosystem with support equipment.

Robert Cameron Wertheimer: Obviously, a joint development agreement with.

Robert Cameron Wertheimer: Slumber J to do that.

Robert Cameron Wertheimer: Again appetite from many of the industrial.

Robert Cameron Wertheimer: And remote work use cases.

Robert Cameron Wertheimer: For Decarbonize solution for power that can work, that's both inbound from partners inbound from customers and Thats, a pretty broad set of opportunities Thats inbound from data center operators inbound from.

Robert Cameron Wertheimer: Entertainment industry is using diesel generators to fill movies and TV shows and other things.

Robert Cameron Wertheimer: For industrial operators, which will run off remote Arctic oil and gas and power and chemicals that need to replace generator power is on diesel today with something that is zero carbon and find batteries to be a tough tough solution. The other example, I'll give is the airport ecosystem with broad support equipment. There are funding programs at airports today, both in the U S.

Parker Stewart Meeks: There are funding programs at airports today, both in the U.S. and Europe, to start decarbonizing airports. I think people realize, look, we hope fuel cells are in planes, certainly, but that's going to take some time. 75% of the emission profile

Robert Cameron Wertheimer: Europe the start Decarbonising airports I think people realize what we hope fuel cells are in play and certainly but that it's going to take some time, 75% of the emission profile. When you take the planes out of the equation at an airport as ground support equipment in those cases, those use cases like aircraft hubs and ground power units are perfect. These cases to slot into <unk>.

Parker Stewart Meeks: When you take the planes out of the equation at an airport, it's ground support equipment, and those use cases like aircraft tubs and ground power units are perfect places to slot in 200 kilowatts of fuel cell power today. So that's airports and airlines and others in the aviation ecosystem who are quite interested and have goals they need to achieve. So those are things that we're actively working on that we would like to see come to market. As we have the trucks launched and scaled, we're taking a prudent approach to manage our work. We're taking a prudent approach to managing capital and our resources. But those are markets that we fundamentally believe are going to be ready to go as soon as the trucks are launched. All right, perfect.

Robert Cameron Wertheimer: <unk> fuel cell power today, so that the airports and airlines and others in the aviation ecosystem, who are quite interested in have goals. They need to achieve so those are things that we're working on actively that we would like to see come to market as we have the trucks, Washington scaling, we're taking a prudent approach to manage our working capital and our resources.

Robert Cameron Wertheimer: But those are markets that we fundamentally believe we're going to be ready to go as soon as the trucks are launched.

Robert Cameron Wertheimer: Launched.

Speaker Change: Alright, perfect. Thank you.

Parker Stewart Meeks: Thank you. And then Parker, you've touched on this in two questions in a couple different ways, but just contextualize California. Clean truck mandates are difficult to meet. I think you've mentioned that sometimes battery electric just isn't up to the duty cycle, etc.

Speaker Change: You've touched on this in two questions in a couple of different ways, but just just contextualize, California clean truck mandates are difficult to meet I think you've mentioned.

Speaker Change: Sometimes a battery electric just isn't up to the duty cycle et cetera, what are your customers, saying a potential customer is saying I think waiting around until fuel cells are fully tested and mature.

Robert Cameron Wertheimer: What are your customers saying, your potential customers saying? Are they waiting around until fuel cells are fully tested and mature? Do they expect to have to buy batteries?

Speaker Change: We expect to have to buy batteries I am just curious what that environment feels like and if theres a real launch in 'twenty six or whatever people like way for them to go after it and if I may.

Parker Stewart Meeks: I'm just curious what that environment feels like and if there will be a real launch in 2030. Are they typically playing you against and benchmarking you against other fuel cell providers, or is everybody just, you know, finding a customer and testing it out at this point? It's not really competitive between you all on fuel cells, so I'll stop there. I know that was two questions. No, it's great.

Speaker Change: Youre dealing with your your trial customers and customers are they typically playing you against and benchmarking against other fuel cell providers or or as everybody would like.

Speaker Change: Finding a customer in testing it out at this point, it's not really competitive between you all on fuel cells I'll stop there I know that was two questions.

Speaker Change: No that's great. Thanks, Thanks, Robin happy to describe it.

Parker Stewart Meeks: Thanks, Robin. I'm happy to describe transparently how we're seeing it today. All the police that we're working with, we are screening our pipelines of focus, right? We believe we only need at least 10 large fleets, like Performance Food Group, to scale over a four-year scaling program to 1,000 trucks per year in total, up to 100 trucks per fleet, right? So we're very focused on back-to-base large fleets plus concentrated ports, right? But back-to-base large fleets that have concentrated demand behind warehouse fences and have the use case that stretches beyond, you know, the 200-mile sort of breakpoint that's now reducing probably to 150 miles where the battery struggles, right? And with that in mind, all of our fleets are trying everything, right? The fleets that are truly motivated.

Speaker Change: Transparently, how thats how were seeing that today so first.

Speaker Change: All of which they were working with we are screening our pipelines are focus right. We believe we only need at least 10 large fleet by performance food group. So scale over a four year scaling program to 1000 trucks per year in total up to 100 trucks per fleet right. So we're very focused on back to base large fleets plus concentrated towards right.

Speaker Change: Base large fleets.

Speaker Change: Concentrate demand by warehouse fences and I have had the use case that stretches beyond the 200 mile.

Speaker Change: Breakpoint is now producing probably 150 miles where battery struggles right.

Speaker Change: And with that in mind all of our fleets are trying everything right. The fleets that are truly motivated and these flight performance food group are typically leaders right. So PFG as a stated goal to decarbonize to reduce the diesel applications their fleets significantly by 2030, that's a real goal and you see them leading in taking our trucks into.

Parker Stewart Meeks: And these fleets, like Performance Food Group, are typically leaders, right? So PFG has a stated goal to decarbonize, to reduce the diesel per case in their fleet significantly by 2030. That's their real goal, and you see them leading and taking our trucks into operation because they want to get going, right? And they're very proud of that. Those are the ships that we're focused on. There's a significant number of those out there. As I mentioned before, 20 trials have been completed in North America alone since March of 2022. They are – every fleet is trying multiple solutions, right?

Speaker Change: Into operation because they want to get going right and they're very proud of that those are the places that we're focused on there is a significant number of those out there as I mentioned before 20 trials completed North America alone since March of 2022. They are every fleet is trying multiple solutions right and we want them to because we're confident in first of all it gives them.

Parker Stewart Meeks: And we want them to because we're confident in, first of all, fuel-sensitive technology being the right answer for the use case that we're focused on, which is the majority of what Class A is. The over 150-mile back-to-base to long-haul transition. And then also benchmarking us against other fuel-sensitive technology, we're happy whenever fleets are trying other fuel-sensitive trucks because we fundamentally believe our 200-kilowatt single-stack fuel-sensitive system has a weight advantage that's significant, a volume advantage, and a cost advantage, which allows our trucks to be positive cash contribution margins today to large fleets, which is a unique statement in this business versus others who are And fleets see that and see a technology that's leading, and they see a business model that can scale.

Speaker Change: Technology being the right answer for the use cases that we're focused on which is the majority of our class a does the over 150 mile back.

Speaker Change: Dr Bates to long haul transition and then.

Speaker Change: Also benchmarking us.

Speaker Change: Against other fuel cell technology, we're happy whatever fleet you try other fuel cell trucks, because we fundamentally believe are 200 kilowatt single stack. This whole system has a weight advantage that significant a volume advantage a cost advantage, which allows our trucks to be positive cash contribution margin today to <unk>.

Speaker Change: Large fleets, which is a unique statement in this business versus others, who are significantly cash negative.

Speaker Change: And please see that and see a technology, that's leading and they see a business model that Ken can scan.

Robert Cameron Wertheimer: All right. Thank you. That is all the time we have for questions.

Speaker Change: Alright, thank you.

Speaker Change: Thank you.

Speaker Change: That is all the time, we have for questions I'll turn the call to cracker mix for closing remarks.

Parker Stewart Meeks: I'll turn the call over to Parker Meeks for closing remarks. Thank you very much, Operator, and thank you all for joining us and for the tremendous questions and discussions today. As you can tell, I and we are incredibly excited for 2024. It promises to pave the way for Hyzon's long-term growth, and we look forward to continuing to update you as we achieve our commercialization goals this year. Thank you so much for taking the time to engage with us. Take care. This concludes today's conference call. We thank you for joining us. You may now disconnect your line. Thank you for watching! Thank you for watching!

Cracker Mix: Great. Thank you very much operator, and thank you all for joining and for the tremendous questions and discussions today as you can tell I and we are incredibly excited for 2024, it promises to pave the way for highest on long term growth and we look forward to continuing to update you as we achieve our commercialization goals. This year and thank you so much for taking the time to engage with us.

Speaker Change: Sure.

This concludes today's conference call. We thank you for joining you may now disconnect your lines.

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