Good morning and welcome to Nuvve Holdings Corp. Third Quarter 2021 Earnings Conference Call. [Operator Instructions] It is my pleasure to introduce, [Edwardo Royce]. Thank you, you may begin.

Thank you. On today's call are Gregory Poilasne, Chief Executive Officer and David Robson, Chief Financial Officer of Nuvve. This morning Nuvve issued a press release announcing its third quarter 2021 results. Following prepared remarks, we will open up the call for questions. Before we begin, I would like to remind you that this call may contain forward-looking statements. While these forward-looking statements reflect Nuvve's best on judgment they are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward- looking projections. These risk factors are discussed with new filings with the SEC. And in the earnings release issued today, which are available on our website. Nuvve undertakes no obligation to revise or update any forward-looking statements to reflect future events or circumstances. With that, I would like to turn the call over to Gregory Poilasne, Chief Executive Officer of Nuvve. Gregory?

Thank you, Edwardo and good morning, everyone. Thanks for joining us today to discuss our results for the third quarter. World leaders have been gathering in Glasgow, Scotland discussing and debating difficult solution we as global citizen must implement to prevent the impact from climate change. Transportation electrification is usually among the highest priority. And this is close to 30% of US greenhouse gas emissions. Electrifying transportation we believe, vehicle-to-grid technology represents a mission critical solution, as it allows us to utilize electric vehicles much more efficiently and cost effectively and for the public group and grid supports while vehicles apart. In doing so, vehicle-to-grid alleviate the need for us to build as much as 40% more electric power generation capacity to support transportation electrification. It also provides main force to increase the economic value of renewable help strengthen load curb and help deliver energy equity. Before I go over latest developments, I want to share how thrilled we are about the $1.2 trillion bipartisan infrastructure bill that the US House Representatives passed on November 5. This set aside $7.5 billion to create a nationwide network of EV charging stations and expedite the adoption of electric cars these decades. $7.5 billion for electric buses and $65 billion to fund an investment in clean energy and people and renewables for the nation's electricity grid, and promises to create a more resilient system. The bill also contains opportunities for grant funding for installation of V2G infrastructure. These are all markets to be exposed to leverage as we continue to execute on our mission. At Nuvve, we're incredibly excited about all the work that we have been and the important partnership we are building in a variety of segments across the broader EV ecosystem. We continue to roll out our proprietary vehicle-to-grid technology…

Thanks Gregory. I want to echo Gregory sentiment that we are very pleased with the progress we are making that will drive future revenue over the long term. In the third quarter, we generated total revenues of $1.2 million compared to $1.3 in the third quarter of 2020. This was a decrease of 13.3% primarily due to declining grant revenues offset by higher charger sales. During Q3 of last year, we earned revenues on a grant project in Japan that was nonrecurring, compared to the second quarter of 2021, our revenues increased by 19%. Product and Service revenues through the third quarter of 2021 represented 59% of total revenues compared with 33% in 2020. We expect product and service revenues will continue to become a larger mix of our business and grant revenues will be a smaller mix. Margins on products and service revenues were 43.2% for the third quarter, compared to 94% for the third quarter of last year. This year-over-year change in margins was a result of a change in sales mix of DC chargers, AC chargers and engineering services. DC charger gross margins generally range from 20% to 25%. AC charger gross margins are approximately 50% and engineering service gross margins are 100%. Total SG&A and R&D expenses were $8.2 million for the third quarter of 2021, compared to $7 million in the second quarter of 2021, and $2.1 million in the third quarter of 2020. This increase over the second quarter of 2021 was primarily attributable to increase payroll expenses, recruiting fees, and incremental expenses associated with Levo. Levo incurred $0.5 million in operating expenses during the third quarter. Other income and expense increased by $432,000, up from $46,000 in income for the three months ended September 30, 2020 to $478,000 of income for the three…

Thanks David. While it is still early in our journey, we are making significant progress executing on our mission to accelerate the electrification of transportation through our proprietary vehicle-to-grid energy and services. We continue to be very pleased with the momentum across our business and the solid foundation we are building through our expanded partnerships and increasing customer contracts. While adoption will take time, our backlog pipeline and megawatts under management are robust and growing, which is a strong indication of future revenue we will generate while delivering value to our customers and shareholders. We look forward to continuing to update you along the way as we dive further into our journey. With that, I will now turn it back over to the operator to begin the question and answer session. Operator?

[Operator Instructions] Our first question comes from the line of Eric Stine with Craig-Hallum.

Yes, good morning. It's Aaron Spychalla on for Eric, thanks for taking the questions. First for us on the BYD, can you just provide maybe a little more details on kind of expected timing as we look out over the next five years on how that might rollout. And then, maybe talk a little bit about how that might be jumpstarting things with -- in the market with other OEMs looking to gain traction there.

Yes, I mean, Aaron, Gregory here, we are looking at it as a portfolio of vehicles. We are actually -- we have some projects underway with BYD on the East Coast. And so now we have engaged in the first phase is always the technology integration right to make sure that one, the vehicles and the charging stations are all able to talk to the platform. And then two, we go through the qualification of that implementation. But in parallel, we also have some commercial deployment that are underway, used trucks is an interesting category of vehicles that we talked about in the past. So that would be one example.

All right, thanks for the color there, and then maybe second on Wallbox. can you maybe talk about some initial traction there and kind of the planned rollout, and then just help frame, kind of the opportunity there and kind of how you see that contributing to the P&L over the next handful of years?

Yes, I think this is very interesting, right, because this is a market that is -- that has been closed so far for grid services. When I say closed, I mean, it was limited to basically large power plants in order to provide those grid services. There has been changed recently, we have a project right now in Spain with different partners where we are helping setting up the regulatory environment. And we've done that many times already in our history. And so two aspects to me that are very important. One is opening a market, where we'll be able to access different value chain going from providing ancillary services all the way to basically providing vehicle to home type of services, the whole range. And the other thing that's interesting to me that the partnership with Wallbox is such that this will address the consumer market, which so far, as we've always said, we've been very, very focused on the fleet market. We obviously are not under estimating the consumer market. We've already said also that, no, we will do that with partners. And this is a perfect example on how we are executing our strategy, as it relates to expanding across a variety of segments. And to focus on our core competency, which is aggregating the vehicles, making sure they are ready for the drivers while delivering our commitment to the grid, and while protecting the battery at the same time.

Good. And then if I can sneak one more in just maybe on the competitive environment, I mean, obviously you're starting to win a lot more bids. Can you just kind of talk about what you're seeing there? Why you're winning. I know there's, a lot of guys in the market that talk about V2G. But aren't really at the end of the day. So maybe just kind of talk about that a little bit further.

Yes. And that's very exciting to me, right, because, on the one hand, as you said, V2G is a subject that is now becoming at the heart of EV deployments. There's an awareness that is building that EV deployment could have a significant cost if it's not done in a smart way. Now, the benefits we have is that our technology was started to be developed in 1996, by the -- we think the professor will attend at the University of Delaware, during all this time, there has been significant work in order to deploy, to develop the technology and then to deploy it around the world. We've also - when we -- when I started Nuvve and the University of Delaware, I've developed some variety IT around the implementation that we can develop, and that IT was based on a working platform because in 2009, that platform has started to participate into grid services in the PGM region. Since that we've been building more and more services. We, I think, have an understanding that nobody else has and I think this is why we are recognized as the V2G leader around the world, not just here in the US, but also as we were just discussing in Europe, either in the Nordics, through our joint venture with EDF in UK, France, Italy, Belgium and Germany or in the Iberia peninsula, as well as the deployment that we have and the work that we've been doing with Toyota to show an early investor in the organization in Japan. So I think all those reasons, making us really the leader and because we just have more experience, we have a much deeper understanding on how all those things have to work together.

Our next question comes from the line of Craig Irwin with Roth.

Good morning and thanks for taking my questions. So, Gregory, I wanted to start with the financial impact of Levo on the P&L, right. So this is a quarter you closed the partnership and really started, you mentioned $0.5 million impact in the quarter. Is it fair to take the August 4 start date and approximate a run rate of around $0.75 million a quarter and expenses? And then can you maybe share with us what the cost was prior to August 4, to set up an initiate this joint venture?

I will let David address this question.

Yes. Hi, Craig. I think our expenses that we show which $0.5 million was this quarter, it'll be about that amount in the fourth quarter, maybe a little bit more. So running the $0.5 million, maybe $600,000 in the fourth quarter.

Okay, excellent. And then cash expenses in front of the official launch? Were there any expenses you can call out?

Yes, you can see those that we capitalize included in deferred financing costs. So the total amount was around $4 million.

Okay, excellent. Then 200 buses, 25 megawatts, you're obviously looking at 125 kilowatts bus. And that seems to be what most of the school districts would probably ask for. When we step back and look at the bigger picture, the total Levo joint venture, if it does satisfy the $750 million entirely with school buses. And President Biden seems to be doing the right things, but I know Levo has other customers as well. But just assuming it's school buses that means you could have as much as 375 megawatts under management, once it's fully invested. I mean is that a reasonable expectation? Or should we be potentially looking at smaller batteries and a broader mix to generate a slightly lower megawatt number?

I mean, I think the trend we've seen so far is the batteries on the school bus I think it's the heart of the question. The various school buses have a battery of 155 kilowatt hour; I think this is serving most of the routes. Now you are brought sometimes that are slightly longer or special trips that would be needed to be covered. And so I think we're still on the low side of the size of the batteries, I think 200 kilowatt hour and maybe more than that might be -- this is where we think the numbers are going to be, which is why now we decided on that deployment to go with 125 kilowatt charging stations. Now keep in mind, though those two dispensers on those, so the first implementation will be a switch. So it will be 125 on one side and 125 on the other side. But still, no, it gives us a little bit more flexibility in how we are using the current buses, of buses that are maybe running at 200 kilowatt hour, I think, between 200 and 300 kilowatt hour, that's probably where all the school bus would end up. But you're right. I mean, hey, there are 480,000 school buses in the US, if you have 60 kilowatts on that, that's 25 gigawatts, if you put -- if you consider $100 per kilowatt year, that $3.5 billion of grid services that those vehicles will be able to provide. And so, no, this is why we are here right is a gigantic market. We are at the bottom of the hill. I think we are putting all the partnership in place in order to support our vision. And we are executing on it. We're extremely focused on education. And I hope, this blueprint that we've been putting together, will help us to expand, but finally V2G is at the heart of many players, as Aaron was saying and it's at the heart of the infrastructure bill as well. So that's really what was really exciting for us is we look at now, all those vehicles are potential revenue generation sources for us.

Thank you. So then, when I talked to Blue Bird about this a number of weeks ago, they had suggested that working with Nuvve and putting the systems in their manufacturing facility would allow them to hold inventory of EV school buses and to condition and exercise the batteries so that the battery is not impaired from sitting idle for months, while the full batch of buses is prepared for delivery, would you expect full participation of these vehicles in grid services while they're parked in the lot, as they bring vehicles off the line, and they wait for their full allocation of different customer orders so that can deliver? Or is there potentially, maybe a percentage of participation that we could see, given that, the functionality will be used for a couple different things.

So that now there are a variety of grid services, I think this is what you're aiming at also right, the grid service and the capacity as we talked about here, we took, the $2 million of annual revenue is based on an $80 to $85 per kilowatt year, this is very much in the low end of the range that we see. And that means that limited amount of these charges that would happen at very specific times, especially when you have continental peaks right now for longer system. Usually those goes with like maybe $50 charge a year or less. So it's not that it is extremely straining on the battery because it's a limited number of discharges that you do every year. Is that answered your question?

Yes, no, that's perfect. So then if I could ask a question about timing, right. So I know Phil Horlock was very excited about the opportunity and [Indiscernible] and the support from President Biden, and what this is really going to mean for our children in different school districts across the US. Can you talk about the probable timeline for the hardware installations, and the revenue recognition around that?

Yes. And the installation, as we said, with whole setup will happen sometimes in 2022, towards probably towards the end of 2022. And we are now targeting to be up and running in early 2023. And the model we have is a limited number of buses initially, and the scale that goes all the way to 200 to 400 buses that we'll be covering on the parking lots. So there is a timeline and a rollout that goes between 2020, end of 2022 for the full installation, and then 2023 to 2025 in order to fill up all these spots, and then we've reached full capacity, this could go faster, but we wanted to have a conservative approach. I think your question goes along the line up, we consider potentially trying recognizing more of these deployments early. But two things, one is our core business is really the vision of hubs is a long term, recurring revenue that it develops with charger deployment. In this case, it's 20 years now with $2 million plus dollar per year of revenue on that specific site, potentially, being a lot more than that. So the other piece is that there's still quite a bit of uncertainty on supply chain, we have the good news is we have inventory of charging stations, and we've been very careful in placing orders early on, but there is still some uncertainty in delivery. And therefore this is also why we didn't see the need of trying to recognize as much as possible up front, and rather to go on the path of building and helping our investors understand the true core of our business model, this recurring revenue that we are able to build and not based on the cost of the infrastructure and the maintenance which we under value those assets are providing to the grid.

Ladies and gentlemen, we have reached the end of today's question-and-answer session. I would like to turn this call back over to Gregory, for closing remarks.

Thank you. I want to thank everybody on the call today. I think again, what I need to emphasize is this hub, which is really at the heart of our strategy, and the first one with Blue Bird is really the blueprint of the deployments that we are targeting, and not just in parking lot of manufacturers, but also in hub and other places. And I hope that we'll be able to share some progress on further deployments that we are working on in the near future. Now to look really at the size of the business, we've talked about the school buses. But when we look globally, at all the vehicles and the target that we have of converting vehicles into electric vehicles 2040, could be a time where we have 3,580 kilowatt year to account for seven kilowatts per consumer vehicles. And if you consider, again, $100 per kilowatt year, that's a market of about $420 billion. If you consider $240 per kilowatt year, that's $840 billion market size. So we have a gigantic market in front of us, we have very exciting opportunities. We -- I have been very focused on fleet. As I shared with you, we are also starting to look into the consumer space at the same time with a little different approach than anybody else because of the capabilities of our platform. So we are very, very excited of the progress. And we look forward to sharing more about our progress in the near future with you. Thank you very much.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. And enjoy the rest of your day.