Good day, and welcome to the Nuvve Holding Corporation First Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Eduardo Royes. Please go ahead, sir.

Thank you. On today's call are Gregory Poilasne, Chief Executive Officer and David Robson, Chief Financial Officer of Nuvve. Earlier today Nuvve issued a press release announcing its first quarter 2022 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 current 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 in Nuvve’s 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?

Thanks, Eduardo, and good day to all. Thank you for joining us as we review our results for the first quarter of 2022. In the short period since our last earnings call in late March, we have continued to see strong secular tailwinds for our vehicle electrification and the adoption of vehicle-to-grid technology, V2G. As an example, I'd like to start today's call by highlighting our recent announcement of a Memorandum of Understanding, our MOU with the US Department of Energy, DOE. This announcement is not only an example of the continued expansion in interest in V2G, but the recognition at the federal level of the critical role that V2G will play in the energy transition. We view the DOE's decision to form this partnership to be an admission that transportation electrification cannot unfold with the grid today as is. The load requirements and variation associated with EVs charging are simply too high. However, while EVs will be a source of stress on the grid by directional charging and the vehicle to grid technology that we have find for over a decade also run their EVs a key part of the solution. The federal government realizes vehicles should evolve to become in paid grid resources. To elaborate briefly on the MOU as a collaboration partner to the DOE, we'll be working with government agencies, utilities and electrification industry leaders to accelerate the commercialization of vehicle-to-grid, vehicle-to-building, vehicle-to-home and other vehicle grid integration technologies, all echoing vehicle-to-everything or V2X. DOE chose Nuvve because it recognizes that we are best positioned to be a leading enabler of the solution given our experience in commercially deploying V2G around the world. Through Nuvve’s Grid Integrated Vehicle, or GIVe platform, we are able to aggregate and provide power for EVs at scale back into the…

Thanks, Gregory. I will start with a recap of first quarter 2022 results. In the first quarter, we generated total revenues of $2.4 million, compared to $799,000 in the first quarter of 2021. This represents a year-over-year increase of nearly 200%, primarily due to hardware and service revenues growing by more than 7 times, reflecting the sale of 5 electric school buses and an increase in revenues from the sale of charging stations. The sales of these EVs during the first quarter is a means for us to deploy hardware that can expand our platform to grow megawatts under management and create an avenue for future grid service revenues. This supports our business model of short-term hardware sales with potential long-term grid service revenues. Product and service revenues in the first quarter of 2022 represented 95% of total revenues compared with 39% of first quarter 2021 revenues. We expect product and service revenues to be the lion's share of revenues going forward. Margin on product and service revenues was 4.9% for the first quarter 2022, compared to 59.2% for the first quarter last year. Our gross margins were lower than the prior year, primarily due to the aforementioned bus sale and higher installation expenses on charging station deployments. Total operating costs, excluding cost of sales, were $9.8 million for the first quarter of 2022 compared to $5.7 million in the first quarter of 2021. This increase was primarily attributable to increased costs associated with being a public company, an increase in payroll costs from increased staffing and the costs associated with Levo which we established last year. On a sequential basis versus the fourth quarter of 2021, the increase was $1.3 million, up from $8.5 million, largely due to higher legal and professional fees and higher costs to support legal…

Thanks David. 2023 is off to a strong start and as we diversify and expand our partner base, expand our megawatt under management and grow our revenue, the tailwinds for V2G remains strong, and our recent MOU with the DOE underscores the importance of V2G in the energy transition and a significant role as a pioneer for this technology. Our wins in the first quarter position us well for the future and the conversation we're having across a variety of partner types excite us about what is to come over the balance of the year. We look forward to speaking with you again on our second quarter 2022 earnings call. With that, we will now turn the call back over to the operator to begin our Q&A. Operator?

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question will come from Brian Dobson with Chardan Capital Markets. Please proceed.

Hi, good evening. Thanks for taking my question.

Hey, Brian.

Hey. So you recently signed a memorandum of understanding the US Department of Energy. What type of long-term opportunities do you believe that could open for the company?

I think there are a couple of aspects that are associated with it. One is obviously to make sure that markets are accessible for EVs and the diversity of an energy market, so accessible for electric vehicles that are bidirectional capabilities, and also harmonize some of those. For example, there's a ruling from FERC to 2022-2022 that is being implemented right now. And we just need to make sure that the B2G piece can access FERC 2022-2023 is targeting behind the meter energy storage and B2G is included in that. So the execution on FERC 2020-2022 is important. Another piece, I think that matters for the DOE, is standardization. And we also strongly believe in standardization. We think it's important that all those resources are accessible and can be controlled. And the last piece is making sure that you do all of that while you are taking care of the ultimate customer experience by the drivers, it’s to make sure that all of this is not impacting the drivers. And so we think it's all very much in line with our own strategy and our own path.

Great. Thanks very much. And a similar question, you also gained approval from the Japanese transmission system operator. Could you speak to some of the opportunities that, that could lead to.

Can you say it again that we didn’t hear the end of that?

Sorry about that. I think I have a connection issue. Just regarding your recent approval from the Japanese transmission system operator. Could you speak to some of the strategic opportunities that, that approval could lead to?

Yes, absolutely. So, we -- depending on the market that you're addressing, that you're ready to get an entry point. Japan at this point, after shutting down all the nuclear power plants, that EV path was less important to them. And so, storage in Japan has been a very exciting way to help them further introduce renewable generation and help them to keep the grid stable. And so that has been the entry point. In the meantime, over the last three years, we've been working with the regulator in looking at how B2G would also be able to cultivate into those markets, and we are expecting that to happen over the next 18 months or so. And so, this is a way for us to establish ourselves, build experience in participating in those markets through stationary storage and then to, over time, bring a variety of unirational vehicles as well as V2G vehicles -- and again, you should expect that to happen over the next 12 to 18 months as we are rolling out in Japan. And so the first step is expanding the amount of stationary storage we have over there and then few combining with EVs.

Yes. Excellent. And my final question. We've been speaking with many of the charging companies and feedback we're hearing is unanimously positive regarding the consumer demand for vehicle-to-grid charging technology. Do you think that there'll be more opportunities for you to partner in ways similar to the partnership that you have with Wallbox regarding your technology into their products?

Absolutely. I think -- so first of all, at this point, we are very, very focused on fleets, right? And it emphasize that as an organization. But we -- like the Wallbox, we are, as I said, gain in the consumer space, we don't see ourselves becoming a consumer company, but we see ourselves working with partners, either charging station manufacturers or vehicle manufacturers in order to support them in deploying V2G. And we think that the consumer opportunity is going to be very, very large. We see the fleet opportunity being the underlying value with less productivity in terms of how we are managing those vehicles and then combining that with the consumer on top of it, which are going to be naturally more volatile because the use of those vehicle is a lot more random. But the combination of those two is very, very exciting for us. And the way we address this random aspect is -- for example, the work that we are doing with Astrea AI, our AI platform and our partnership with 2021 of AI in order to account for all that volatility in how we are treating those vehicles in activating into the high battery markets we are getting into.

Excellent, thank you very much for the color.

[Operator Instructions] Our next question will come from Eric Stine with Craig-Hallum. Please go ahead.

Hi, Gregory. Hi, David.

Hi, Eric.

Hi, Eric.

Hey. So just thinking about the demand you're starting to see early here, and obviously, people trying to answer the million-dollar question about when is the AM kind of break. I mean do you feel like people are waiting for the lottery for the infrastructure funding -- and once that sorts itself out, you could start to see that ramp? Or how are you kind of thinking about things playing out over the next, call it, nine to 12 months?

I don't think people are waiting for the infrastructure bill because there is already quite a bit of planning available, and we see just a activity. I think for us we talked a little bit about it. We see very large opportunities that we are working on right now. And it's just a question of -- we talked about our qualified pipeline -- and it's just a question of bringing those large opportunity to close. And as you know, right, we get the opportunity, the more time it takes to close it. But it's -- we're very, very excited about the opportunity that we are facing. And we don't think that people are just waiting for the infrastructure money to come out in order to make those decisions.

And I would say, Eric, clearly, the supply chain is a factor. So it is taking longer to get supply of finished vehicles and components that go in it. So it's just -- it's a short-term issue, not a long-term issue.

Okay. And maybe I don't want to put words in your mouth, but just curious if you agree that the – as you said, you've got to get through the process, but third-party funding from Levo or the other sources that are out there? I mean, would you agree that, that is more important than the infrastructure funding in terms of starting the adoption going forward?

Yes. Yes, absolutely. The infrastructure bill, I mean one in general is paying for the first one two three four five pluses. But like the commitment from Troy, is really about doing the whole fleet. -- and they understand that the infrastructure bill is not going to be for all of this. That's why they are coming and they are working with Levo.

Yes. Got it. Just sticking with Levo a little bit, I know that the main focus of it is school buses. But just curious one other end markets, whether it's commercial vehicles, other fleets, I mean, do you see that as being a meaningful part of the portfolio once Levo is really up and running? Or do you expect it to really be largely school bus?

I think the baseline is school bus, a lot of the expertise from the team is around the school buses. But I think that they have operating -- opportunities, many opportunity outside of just the pure school bus business.

All right.

I mean we're seeing those opportunities. So Gregory said school bus leads our focus. But we're also seeing opportunities. We're talking to customers who have interest beyond school buses through Levo.

Okay. Got you. Maybe last one from me, just an update on DYB. I mean I know you have a number of collaborations and partners. That one was a pretty noteworthy one that goes back a few quarters, but maybe just an update on that.

Yes. I mean we are executing on integration as a little bit of work to get done there and that's underway. And then we are with them on series of opportunities, but we have not been able to share yet, but we hope we'll be able to share some of that very soon.

Okay. Thanks a lot.

Thank you.

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

Thank you very much for listening to us today, and we look forward to sharing more about our progress over the next quarter. Thank you.

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