Li-Cycle Holdings Corp (LICY) 2024 Q1 法說會逐字稿

Good day. My name is Madison, and I will be your conference operator today. (Operator Instructions) Thank you. I will now turn the call over to Louis DS. VP Corporate Affairs. Please go ahead.

再會。我叫麥迪遜，今天我將擔任你們的會議操作員。 （操作員說明）謝謝。我現在將把電話轉給 Louis DS。公司事務副總裁。請繼續。

Thank you. Good morning, and thank you, everyone, for joining us for Li-cycle business update and review of financial results for the interim period ended March 31, 2024. We will start today with formal remarks from IG Coach, our Co-Founder, President and Chief Executive Officer, and Craig Cunningham, Interim Chief Financial Officer. We will then follow with a Q&A session ahead of this call, Li-cycle issued a press release and a presentation which can be found on the Investor Relations section of our website at investors.li-cycle.com.

謝謝。早安，謝謝大家參加我們的 Li-cycle 業務更新和截至 2024 年 3 月 31 日的中期財務業績回顧。以及臨時財務長Craig Cunningham。然後，我們將在本次電話會議之前進行問答環節，Li-cycle 發布了新聞稿和演示文稿，您可以在我們網站 Investors.li-cycle.com 的投資者關係部分找到這些內容。

On this call, management will be making statements based on current expectations, plans, estimates and assumptions which are subject to significant risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Li-cycle. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect, including because of factors discussed in today's press release during this conference call and in our past reports and filings with the US Securities and Exchange Commission and Ontario Securities Commissions in Canada.

在這次電話會議上，管理層將根據當前的預期、計劃、估計和假設做出聲明，這些預期、計劃、估計和假設受到重大風險和不確定性的影響，其中大多數難以預測，而且許多風險和不確定性超出了Li-cycle 的控制範圍。如果我們的任何關鍵假設不正確，實際結果可能與我們的前瞻性陳述有重大差異，包括由於今天的新聞稿中本次電話會議期間討論的因素以及我們過去向美國證券交易委員會和安大略證券提交的報告和文件中討論的因素加拿大的佣金。

These documents can be found on our website at investors.li-cycle.com. We do not undertake any duty to update any forward-looking statements, whether written or oral may during this call or from time to time to reflect new information, future events or otherwise except as required

這些文件可以在我們的網站 Investors.li-cycle.com 上找到。我們不承擔在本次電話會議期間或不時更新任何前瞻性陳述（無論是書面或口頭）的義務，以反映新資訊、未來事件或其他情況，除非有要求

These forward-looking statements should not be relied upon as representing lifecycle assessment as of any date subsequent to the date of this call.

這些前瞻性陳述不應被視為代表本次電話會議之後任何日期的生命週期評估。

With that, I'm pleased to turn the call to Ajay.

至此，我很高興將電話轉給 Ajay。

Thank you, Lou. And good morning, everyone. Lou has been with Li-cycle for nearly two years. In addition to heading up marketing, communications is also ticking on leading Regulatory Affairs and Investor Relations. [Nahal] asked him to moving on to pursue other opportunities. We want to thank her for her contributions to Li-cycle and wish her well in her future endeavors.

謝謝你，盧。大家早安。樓先生在Li-cycle工作已近兩年。除了領導行銷之外，溝通還負責領導監管事務和投資者關係。 [納哈爾]要求他繼續尋找其他機會。我們要感謝她對 Li-cycle 的貢獻，並祝福她未來一切順利。

Now I'd like to introduce Craig Cunningham as Li-cycle, Interim CFO. We're excited added to the team and are confident that it is a strong addition to the company. Craig has extensive background in executive level leadership and brings more than 17 years of accounting finance, operational and capital markets experience for Li-cycle.

現在我想介紹 Craig Cunningham，擔任 Li-cycle 臨時財務長。我們很高興加入這個團隊，並相信它對公司來說是一個強有力的補充。 Craig 在高階主管領導方面擁有豐富的背景，為 Li-cycle 帶來了超過 17 年的會計財務、營運和資本市場經驗。

In his previous roles as CFO and Executive, he's been a key contributor to the formulation of Corporate Strategy and providing key financial oversight and controls on major projects. Yet has broad experience overseeing a key supply chain, logistics and administrative functions.

在擔任財務長和執行長之前，他一直是製定公司策略以及對重大專案提供關鍵財務監督和控制的關鍵貢獻者。但在監督關鍵供應鏈、物流和行政職能方面擁有豐富的經驗。

Welcome, Craig. We look forward to your contributions. On our most recent call in March, we provided an update on the progress made since pausing construction at the Rochester hub in October 2023 and initiated a comprehensive review. Today We are pleased to share additional updates on the steps we've taken towards achieving the key objectives from this review, providing an overview of our commercial highlights, I'll also discuss our first quarter financial and operating results.

歡迎，克雷格。我們期待您的貢獻。在 3 月的最近一次電話會議中，我們介紹了自 2023 年 10 月暫停羅徹斯特樞紐建設以來所取得的最新進展，並啟動了全面審查。今天，我們很高興分享我們為實現本次審查的主要目標而採取的步驟的更多最新信息，概述我們的商業亮點，我還將討論我們第一季度的財務和運營業績。

Starting on slide 3. We continue to make progress on the key strategic priorities that we outlined on our last call. First, as part of our comprehensive review of the Rochester hub. We have events work with the local market to refine cost estimates for the project. Since we confirmed the technical viability of the mixed hydroxide precipitate or MHP process.

從幻燈片 3 開始。首先，作為我們對羅徹斯特樞紐進行全面審查的一部分。我們與當地市場進行活動合作，以完善專案的成本估算。因為我們確認了混合氫氧化物沉澱或 MHP 製程的技術可行性。

Second, with respect to financing, we closed on the strategic investment of $75 million by Glencore on March 25, strengthening our long-term partnership and enhancing our liquidity.

其次，在融資方面，我們於3月25日完成了嘉能可7,500萬美元的策略投資，加強了我們的長期合作關係，增強了我們的流動性。

Additionally, in parallel with a comprehensive review, we are working closely with the DOE Loan Programs Office on key financial, technical and legal work streams towards close of the conditional commitment for a loan for gross proceeds of up to [$375 million].

此外，在進行全面審查的同時，我們正在與能源部貸款計劃辦公室在關鍵的財務、技術和法律工作流程上密切合作，以期完成總收益高達[3.75億美元]的貸款的有條件承諾。

Third, regarding liquidity as part of our cash preservation plan and in conjunction with our plan to rightsize and reshape our organization. We transitioned from a regional management model to a centralized model to better position lifecycle for future success. This strategic decision is expected to generate approximately $10 million in annualized savings from lower payroll costs.

第三，將流動性視為我們現金保存計畫的一部分，並與我們的組織規模調整和重塑計畫結合。我們從區域管理模式轉變為集中管理模式，以便更好地定位生命週期，以實現未來的成功。這項策略決策預計將透過降低工資成本每年節省約 1000 萬美元。

Finally, we continue to optimize our spoke network to reduce cost and improve efficiencies remain focused on prioritizing our generations policies as we align with EV and battery OEM customers. We continue to execute on growth plans in North America in Europe.

最後，我們繼續優化我們的輻條網絡，以降低成本並提高效率，當我們與電動車和電池 OEM 客戶保持一致時，我們仍然專注於優先考慮我們的世代政策。我們繼續執行北美和歐洲的成長計劃。

Turning to slide 4 for an update on the comprehensive review for the restart of the Rochester Hub project. On our last call, we reported that we completed an internal technical review, confirming the viability of the MHP process as part of the potential change in our product development strategy for the Rochester hub,

請參閱投影片 4，以了解有關重啟羅徹斯特樞紐計畫的全面審查的最新情況。在上次電話會議中，我們報告說我們完成了內部技術審查，確認了 MHP 流程的可行性，作為我們羅徹斯特中心產品開發策略潛在變化的一部分，

FinCEN, another work stream that has significantly progressed. It is work with the local market regarding major construction contracts to refine our capital estimates for the project. Our current estimated cost to complete the Rochester Hub project is approximately $504 million for the MHP scope, which includes the total cash spend as of March 31, 2024. We note This estimate is subject to a number of assumptions and is likely to change as we continue to complete our comprehensive review of our near-term priorities for the restart of the project includes completing the technical and economic review, which dub tails with the new remote closing process.

FinCEN，另一個取得顯著進展的工作流程。我們正在與當地市場就重大建設合約進行合作，以完善我們對該專案的資本估算。我們目前完成羅徹斯特樞紐專案的MHP 範圍估計成本約為5.04 億美元，其中包括截至2024 年3 月31 日的總現金支出。隨著我們的需要而改變。

Turning to slide 5, which highlights key initiatives we completed to enhance liquidity First, regarding financing, in late March, we were pleased to announce that we closed on the previously announced $75 million investment for Glencore, strengthening our long-term partnership and enhancing our liquidity position.

轉向幻燈片5，其中強調了我們為增強流動性而完成的關鍵舉措 首先，關於融資，3 月底，我們很高興地宣布，我們完成了之前宣布的對嘉能可7500 萬美元的投資，加強了我們的長期合作夥伴關係，並增強了我們的合作夥伴關係。

In late April, we received approximately $5.8 million as a first tranche of a total grant for up to $6.9 million from the German state of Saxony and hold for our Germany. So this is another example of the positive support we continue to receive from our local stakeholders. We remain committed to diligently exploring strategic alternatives and financing options to natural liquidity.

4 月下旬，我們從德國薩克森州收到了大約 580 萬美元，作為第一筆撥款，總額高達 690 萬美元，並為德國保留。這是我們繼續從當地利害關係人那裡獲得積極支持的另一個例子。我們仍然致力於努力探索自然流動性的策略替代方案和融資方案。

Second, we are strategically managing our cash to support our liquidity needs as part of the cash preservation plan. In March, we made a strategic decision to pivot from a regional business model to centralize one. Reorganizing life cycle to drive increased efficiencies. This decision is expected to generate approximately $10 million in annualized cost savings through workforce reductions. In addition, we've been actively engaged with certain contractors and suppliers to the Rochester Hub and now have agreements in place providing for extended payment cycles.

其次，作為現金保存計劃的一部分，我們正在策略性地管理我們的現金，以支持我們的流動性需求。三月份，我們做出了策略決策，從區域業務模式轉向集中化業務模式。重組生命週期以提高效率。這項決定預計將透過減少勞動力每年節省約 1000 萬美元的成本。此外，我們也積極與羅徹斯特樞紐的某些承包商和供應商合作，現在已達成協議，延長付款週期。

Looking forward, we're exploring further opportunities to increase efficiency across the organization, including realizing cost savings from our spoke operations and implementing additional adjustments to non-core SG&A expenditures Finally, we continue to evaluate further pauses or slowdowns that were stopped operations, the only currency now in lockstep with commercial demand.

展望未來，我們正在探索進一步提高整個組織效率的機會，包括透過輻條營運實現成本節約，並對非核心 SG&A 支出實施額外調整。唯一與商業需求同步的貨幣。

Turning to slide 6 for an overview of lifecycles. Commercial agreements. Our capability to process all types of lithium-ion batteries, independent of form factor and chemistry, coupled with our operational capacity, has led to the establishment of a broadly diversified global base of battery supply customers spanning the entire battery supply chain.

請參閱投影片 6 以了解生命週期的概述。商業協議。我們有能力處理所有類型的鋰離子電池，不受形狀因素和化學成分的影響，再加上我們的營運能力，已經建立了涵蓋整個電池供應鏈的廣泛多元化的全球電池供應客戶群。

Some left of the slide, we are pleased to report that during the first quarter, we continued to attract new customers while extending and amending existing grid. We signed a new reseller agreements with some of the largest EV OEMs in the world as well as leading battery cell manufacturers in both Europe and North America for battery material intake. In Europe this included signing new agreements or spending and amending current agreements with three of the largest EV OEMs.

在投影片的左側，我們很高興地報告，在第一季度，我們繼續吸引新客戶，同時擴展和修改現有網格。我們與全球一些最大的電動車原始設備製造商以及歐洲和北美領先的電池製造商簽署了新的經銷商協議，以獲取電池材料。在歐洲，這包括與三大電動車原始設備製造商簽署新協議或支出以及修改現有協議。

With the concept we now have agreements in place with four of the largest IDNs in Europe to recycle modules and full direction. We continue to see broad-based support for our differentiated technologies across both continents, reflected in our position as a preferred for second partner for leading global batteries, EV and energy storage OEMs.

有了這個概念，我們現在與歐洲四家最大的 IDN 達成了回收模組和全面指導的協議。我們的差異化技術繼續在兩大洲獲得廣泛的支持，這反映在我們作為全球領先電池、電動車和儲能原始設備製造商的第二合作夥伴的首選地位。

Turning to slide 7 for some highlights of our spokes technology and operations. As a reminder, lifecycle developed a patented method for processing all forms of lithium batteries, regardless of chemistry form factor or state of charge. This environmentally friendly process does not rely on any thermal treatment and is highly scalable for the growing EV battery market.

請參閱投影片 7，以了解我們輻條技術和營運的一些亮點。提醒一下，lifecycle 開發了一種專利方法，用於處理所有形式的鋰電池，無論化學形狀因素或充電狀態如何。這種環保工藝不依賴任何熱處理，對於不斷增長的電動車電池市場具有高度可擴展性。

We are prioritizing our Generation three spokes, which can process full battery packs without the need to dismantle and aligning with EV and battery OEM partners who comprise a large share of our global battery feed intake.It is worth highlighting that four of our top five partners repeat intake during Q1, our EV OEMs.

我們正在優先考慮我們的第三代輻條，它可以處理完整的電池組，無需拆卸並與電動車和電池原始設備製造商合作夥伴進行協調，這些合作夥伴在我們的全球電池供應量中佔有很大份額。

With respect to our salt operations, we continue to see a higher composition of EV battery packs in our input feed with approximately 41% biomass of the total battery materials processed at our service being EV battery. We believe we're in a strategic position to receive the feedstock material through the enhanced capabilities of our Gen three spokes, which can efficiently process full ladder.

就我們的鹽業務而言，我們繼續看到我們的輸入原料中電動汽車電池組的成分較高，在我們服務中加工的總電池材料中，約 41% 的生物質是電動汽車電池。我們相信，我們處於戰略地位，可以透過第三代輻條的增強功能來接收原料，該輻條可以有效地處理整個梯子。

Turning to slide 8, providing an overview of our sustainability performance. As we expect to issue our 2023 sustainability report in the coming weeks, our report has been aligned with SAS B standards and builds on the interim report we issued last year. In 2023, we strengthened our data tracking and reporting capabilities for greater transparency, ultimately better data will help us to enhance our performance in this important area of our business.

轉向投影片 8，概述我們的永續發展績效。我們預計在未來幾週內發布 2023 年永續發展報告，因此我們的報告已符合 SAS B 標準，並以我們去年發布的中期報告為基礎。 2023 年，我們加強了數據追蹤和報告能力，以提高透明度，最終更好的數據將幫助我們提高在這一重要業務領域的績效。

A few key takeaways from our 2023's performance include 0% of our scope, one and air emissions are from motorcycle boxes, which is reflective of our environmentally friendly non-thermal recycling technologies are Jenimage both procured all of its electricity from renewable sources, and we continue to prioritize safety and about zero critical safety, environmental and community as it fits our company's recession.

我們 2023 年業績的一些關鍵要點包括我們的範圍為 0%、一和空氣排放來自摩托車箱，這反映了我們環保的非熱回收技術，Jenimage 的所有電力均來自可再生能源，並且我們繼續優先考慮安全和零關鍵安全、環境和社區，因為這適合我們公司的經濟衰退。

Sustainability is core to our business and believe it is a value differentiator for our company. Not only found the issue from good for the world community, but it also supports our position as a preferred global perspective.

永續發展是我們業務的核心，並相信這是我們公司的價值差異化因素。不僅從對國際社會有利的角度發現了這個問題，也支持了我們作為首選全球視角的立場。

But with that, I'll turn over to Craig to review the financials, Koji.

但接下來，我將交給克雷格來審查財務狀況，Koji。

Before getting into the financial results, I'd like to start by saying how pleased I am to be joining lifecycle. Ajay and team have built a truly differentiated business model with the capacity to make meaningful contributions to the future of clean energy. I look forward to the opportunity to help execute on this mission and create value for our shareholders.

在討論財務表現之前，我想先說一下我對加入生命週期感到多麼高興。 Ajay 和團隊建立了真正差異化的商業模式，有能力為清潔能源的未來做出有意義的貢獻。我期待有機會幫助執行這項使命並為我們的股東創造價值。

Turning to slide 9 for a review of our 2024. Our first quarter financial results highlights include improved revenue, cost of sales, adjusted EBITDA and cash position for the first quarter of 2024 versus 2023, starting with the sales of black mass, which were 946 tonnes, a 7% increase versus 881 tons sold in 2023. Product sales and recycling service revenues before non-cash fair value pricing adjustments decreased to $4.6 million compared to $7.7 million in 2023.

轉向幻燈片9 回顧我們的2024 年。 ，為946噸，較 2023 年的 881 噸銷售量成長 7%。

The decrease was largely driven by reduced market prices for cobalt nickel and partially offset by higher recycling service revenue and an increase in products sold. Total revenue increased 17% to $4.2 million, reflecting a lower unfavorable noncash fair value pricing adjustments of $0.4 million versus an unfavorable adjustment of $4.1 million in 2023.

這一下降主要是由於鈷鎳市場價格下降造成的，但部分被回收服務收入增加和銷售產品增加所抵消。總營收成長 17%，達到 420 萬美元，反映出不利的非現金公允價值定價調整減少了 40 萬美元，而 2023 年的不利調整為 410 萬美元。

Moving to cost of sales, which decreased 12% to $16.8 million versus $19.1 million in 2023 cost of sales attributable to product revenue decreased by $3.2 million or 17% compared to last year as a result of lower production levels, partially offset by increased operational costs associated with repairs and maintenance activities.

轉向銷售成本，與2023 年的1,910 萬美元相比，下降12% 至1,680 萬美元由於生產水準下降，產品收入的銷售成本比去年減少了320 萬美元，即17%，但部分被營運成本增加所抵消與維修和保養活動有關。

Cost of sales attributable to service revenue increased by $0.9 million compared to last year due to new service contracts entered with an existing customer that commenced October 2023.

由於 2023 年 10 月開始與現有客戶簽訂新服務合同，服務收入的銷售成本比去年增加了 90 萬美元。

SG&A expenses were $31.7 million versus $22.7 million in 2023, primarily driven by higher professional fees and legal fees related to the Rochester hub construction pause as well as severance costs stemming from the March workforce reduction.

SG&A 費用為 3,170 萬美元，而 2023 年為 2,270 萬美元，主要是由於與羅徹斯特樞紐建設暫停相關的專業費用和法律費用增加，以及 3 月份勞動力減少導致的遣散費。

I would like to note that these expenses are onetime in nature. This increase was partially offset by lower recurring personnel and other administrative costs of $3.7 million.

我想指出的是，這些費用都是一次性的。這一增長被經常性人員和其他行政費用減少 370 萬美元部分抵消。

Other expenses were $92.5 million compared to other income of $2.7 million in the prior year, primarily due to the debt extinguishment loss of $58.9 million, an unrealized fair value loss on financial instruments of $23.8 million relating to the amendment and restatement of the terms of the convertible notes issued by life cycle. Adjusted EBITDA loss was $27.4 million compared to a loss of $37.9 million in the first quarter of 2023. This was largely driven by higher revenue, lower cost of sales, partially offset by the increase in SG&A.

其他支出為 9,250 萬美元，而前一年的其他收入為 270 萬美元，主要是由於債務清償損失 5,890 萬美元，以及與修訂和重述條款條款相關的金融工具未實現公允價值損失 2,380 萬美元。按生命週期發行的可轉換票據。調整後 EBITDA 損失為 2,740 萬美元，而 2023 年第一季的損失為 3,790 萬美元。

As of March 31, 2024 lifecycle has cash and cash equivalents of $109.1 million versus $70.6 million at the end of 2023, which includes the gross proceeds from the Glencore financing that closed during the first quarter.

截至 2024 年 3 月 31 日，生命週期的現金和現金等價物為 1.091 億美元，而 2023 年底為 7,060 萬美元，其中包括第一季結束的嘉能可融資的總收益。

I will now turn it back to Ajay.

現在我將把它轉回給 Ajay。

Thank you, Craig.

謝謝你，克雷格。

Turning to slide 10. We continue to see favorable long-term industry demand trends in both North America and Europe. The chart on the left illustrates the rising adoption of electric vehicles with sales achieving a kegger of approximately 45% from 2019 through 2023.

轉向投影片 10。左圖顯示電動車的採用率不斷上升，2019 年至 2023 年銷量將成長約 45%。

Notably, third party sources are projecting a robust 25% categor office space middle of the decade. If you do the right, the growth dynamics support the robust demand for an expanding market for recycling of all forms of lift by batteries near to mid-term the increase in recycled material is largely being driven by manufacturing scrap from giga factory growth supplemented by end-of-life batteries end of the decade you saw through

值得注意的是，第三方消息來源預計，到本世紀中期，此類辦公空間將佔 25%。如果你做得正確，成長動力將支持不斷擴大的市場對各種形式的電池升力回收的強勁需求，在接近中期的情況下，回收材料的增加主要是由千兆工廠增長產生的製造廢料推動的，並由終端補充您所經歷的十年末的電池壽命

It is projected that by 2030, demand for recycling materials will increase by up to six times in 2023. Well, turning to slide 11 and concluding on lifecycles, go-forward strategy and key objectives. First, we continue to work closely with a view towards closing of a loan for gross proceeds of up to $375 million.

預計到 2030 年，對回收材料的需求將增加至 2023 年的六倍。首先，我們繼續密切合作，以期完成一筆總收益高達 3.75 億美元的貸款。

Second, we continue to evaluate a range of further financing and strategic alternatives to bolster liquidity and facilitate the restart of the Rochester hub projects.

其次，我們繼續評估一系列進一步融資和策略替代方案，以增強流動性並促進羅徹斯特樞紐計畫的重啟。

Third, we remain focused on completing our technical and economic analysis of our go-forward approach for the Rochester hub.

第三，我們仍然專注於完成對羅徹斯特樞紐的前進方法的技術和經濟分析。

And finally, regarding the spoken hub network, we are evaluating our spoke network to identify further opportunities to drive down costs while focusing our production on our Gen three spokes to support our key EV and battery OEM customers.

最後，關於語音中心網絡，我們正在評估我們的輻條網絡，以確定進一步降低成本的機會，同時將我們的生產重點放在第三代輻條上，以支援我們的主要電動車和電池 OEM 客戶。

Operator, we're now ready for questions in queue at this time.

接線員，我們現在已經準備好回答隊列中的問題了。

(Operator Instructions)

（操作員說明）

Jeff Rossetti. It's TD. Cohen.

傑夫·羅塞蒂。這是TD。科恩。

Hi, good morning. Tom, I just wanted to start with the overview for the hub and then see if you could provide any more detail on the I'm on the kind of work you're doing to refining costs there, Tom, what's what kind of steps have been are left in the process? And is there any kind of time line on when you expect to complete the review?

早安.湯姆，我只是想從該中心的概述開始，然後看看您是否可以提供更多詳細信息，了解您正在為優化成本所做的工作，湯姆，採取了哪些步驟在此過程中留下了什麼？您預計完成審核的時間是否有規定？

Hey, good morning, Joe. Yes. So as I mentioned in our markets, it's really dovetail it dovetails with the JV profit. So I think the key thing that we're working on right now is working in the local market to refine the capital cost estimate. Obviously, what we've put out there and that's reiterated today is our best and latest information, but we're doing some additional work with the local market to get there and effectively to validate and refine the extra effectively.

嘿，早上好，喬。是的。正如我在我們的市場中提到的，它確實與合資企業的利潤相吻合。因此，我認為我們現在正在做的關鍵事情是在當地市場上努力完善資本成本估算。顯然，我們在那裡發布的以及今天重申的是我們最好和最新的信息，但我們正在與當地市場進行一些額外的工作，以實現這一目標並有效地驗證和完善額外的有效信息。

So that's important, obviously, because it drives some of the support for the work you're doing. But it is also important obviously to be a working towards a restart in terms of timing, I'd say it's again, very intertwined. It dovetails with the DRE. So the priority and my top priority is closing the JV loan, and that's really the enabler to our restart.

顯然，這很重要，因為它為你正在做的工作帶來了一些支持。但顯然，在時間上努力重啟也很重要，我想說，這又是非常交織在一起的。它與 DRE 相符。因此，我的首要任務是結束合資企業貸款，這確實是我們重新啟動的推動因素。

Got you. Okay. And then just regarding a restart on, is there any kind of CapEx needed this this year to preserve the hump at all.

明白你了。好的。然後，就重啟而言，今年是否需要任何類型的資本支出來維持駝峰。

And would you plan to build any black mass inventory at all this year or M.? And you mentioned that you may focus on just the Gen three spokes. So Pam, maybe you Ita reduce your black mass production or on at some point this year. Just anything on kind of what you're seeing on the inventory side and maybe any kind of incremental CapEx spend that you might need this year?

你會計劃今年或M.建立任何黑色大規模庫存嗎？您提到您可能只專注於第三代輻條。所以帕姆，也許你會在今年的某個時候減少黑色大規模生產。您在庫存方面看到的任何內容，以及您今年可能需要的任何增量資本支出支出？

Yes, for sure. So in general, I would say Q1 is relatively indicative of the run rate on that. So we don't expect anything significant incremental around CapEx during Q1. We can jump to the first part around the maintenance of the assets at the hub. So we're very focused on ensuring that these assets are preserved. There is some level of spend, but it's not very material.

是肯定的。所以總的來說，我認為第一季相對表明了運行率。因此，我們預期第一季資本支出不會出現任何顯著增量。我們可以跳到關於中心資產維護的第一部分。因此，我們非常注重確保這些資產受到保護。有一定程度的支出，但不是很實質。

So that is included in the financials that you saw. Q1 will continue of course, that's a priority and around the block has inventory builds to our party right now as we continue to focus on managing liquidity is going to continue to be to sell the black mass that we produce. Again, I'd say Q1 is relatively indicative of the run rate of where we are after further changes. We'll see what the market now, but where we stand right now, the key focus is on Germany, Arizona, Alabama.

所以這包含在您看到的財務數據中。當然，第一季將繼續，這是一個優先事項，隨著我們繼續專注於管理流動性，我們的黨現在已經建立了庫存，將繼續出售我們生產的黑色物質。我再說一遍，第一季相對表明了我們在進一步更改後的運行率。我們將看看現在的市場狀況，但我們目前的立場是，重點關注德國、亞利桑那州和阿拉巴馬州。

Thanks very much.

非常感謝。

Thank you.

謝謝。

Brian Dobson, Chardan Capital Markets.

布萊恩·多布森，查丹資本市場。

Hi, good morning. Thanks very much for taking my question. And you know, if I could a quick follow-up question, if I may. On the Rochester hub, there's been a lot of talk recently about PFAS chemicals were in battery production and I suppose also within battery recycling, I guess given recent regulations put in place by the EPA on how does your recycling process deal with PFAS chemicals and are they, I guess, mitigated prior to prior to the raw materials being shipped for sale bid we wanted to highlight if we can have hub capability?

早安.非常感謝您提出我的問題。你知道，如果可以的話，我可以快速跟進一個問題嗎？在羅徹斯特中心，最近有很多關於電池生產中 PFAS 化學品的討論，我想電池回收中也有這種情況，我想考慮到 EPA 最近制定的關於回收過程如何處理 PFAS 化學品的規定，以及我想，在原材料被運送出售之前，他們會減少投標，我們想強調我們是否可以擁有樞紐能力？

Yes, no worries. No worries. And yes, very good question. So it's a very hot topic, and that should actually happen for a couple of years. So the key thing on that so people are in a flooring containing a pollutant. And the issue with it is it gets into people's bodies and it can be quite harmful through the ecosystem, essentially even so that's the big focus on key parts of Mike's been such a hot topic that we get certain rents kind of grounding.

是的，不用擔心。不用擔心。是的，非常好的問題。所以這是一個非常熱門的話題，而且實際上應該會持續幾年。關鍵在於人們所處的地板含有污染物。它的問題是它進入人們的身體，並且通過生態系統可能相當有害，本質上即使如此，邁克的關鍵部分的重點仍然是一個熱門話題，我們得到了某些租金的基礎。

And the big thing, though with regulators and where the Florence contained is at the end of the day. If you're not treating the batteries thermally, you keep the flooring. And basically on cash, it's non-admitted form again in more depth, but there's different types of flooring and they go different places in the process. But the bottom line is we do not admit like PFS, for example. And here this is one of the challenges actually with the traditional process for cycling with one battery.

但最重要的是，儘管監管機構和佛羅倫斯號所包含的地方最終還是如此。如果您不對電池進行熱處理，則可以保留地板。基本上是現金，這又是更深入的非承認形式，但地板有不同類型，並且在這個過程中它們去往不同的地方。但底線是我們不承認像 PFS 這樣的例子。這是使用一顆電池進行循環的傳統工藝實際上面臨的挑戰之一。

So where you heat up the batteries and really trying to do in simple terms is degrade that binder the glue that keeps the cathode and the anode on their respective sales. That's a Florida-based binder, and that's one of the common places where you emit flooring. So in our case, the flooring goes into solid products and as a result doesn't get admitted to amateur. And that's also and a part of the permitting that we did for the Rochester.

因此，在加熱電池時，簡單來說，真正要做的就是降解使陰極和陽極保持各自狀態的黏合劑。那是佛羅裡達州的黏合劑，也是釋放地板的常見地方之一。因此，在我們的案例中，地板進入了固體產品，因此不被業餘愛好者接受。這也是我們為羅徹斯特酒店所做的許可的一部分。

Yes, excellent. And do you think that this gives us a competitive advantage, the type of recycling that you do versus the pyro based recycling and with those with those players need to stop that type of recycling under these new regulations?

是的，非常好。您認為這會為我們帶來競爭優勢嗎？

Yes, we do think it gives us a big advantage that customers have been focused on it for a while on the very traditional the non-like-for-like or dual approach. As I mentioned, there's basically some sort of pretreatment remake, Jeff Hart batteries and then very commonly some sort of what's called calcination set. That's the thermal step that is the step that is of a concern for flooring emissions.

是的，我們確實認為這給我們帶來了很大的優勢，因為客戶已經在非常傳統的非同類或雙重方法上關注它一段時間了。正如我所提到的，基本上有某種預處理改造、傑夫哈特電池，然後是非常常見的某種所謂的煅燒裝置。這是熱步驟，也是地板排放所關注的步驟。

And we see that as a very common approach. It comes from Asia actually has been installed in North America and Europe. So would be needed to stop operations, not sure. But yes, it's a very hot topic and of course, getting it renewed interest.

我們認為這是一種非常常見的方法。它來自亞洲，實際上已在北美和歐洲安裝。因此是否需要停止運營，不確定。但是，是的，這是一個非常熱門的話題，當然，它又重新引起了人們的興趣。

Great. Thanks very much.

偉大的。非常感謝。

Greg and Kim, once again, if you would like to ask a question, please press star and one on your telephone keypad now. And we will take our next question from Matthew O'Keefe with Cantor Fitzgerald.

Greg 和 Kim，如果您想提問，請立即按下電話鍵盤上的星號和一。我們將回答馬修·奧基夫和康托·菲茨杰拉德提出的下一個問題。

Thanks. Thanks for taking my call. Good morning. And first question for me is just on the hub operations, you've got four operating hubs and you did 1,300 tons of black mass, but what's the capacity of those four hubs, um, would nameplate capacity. It's over 10,000 business within that range of namely.

謝謝。感謝您接聽我的電話。早安.我的第一個問題是關於樞紐運營，你有四個運營樞紐，並且處理了 1,300 噸黑色物質，但這四個樞紐的容量是多少，嗯，銘牌容量。該範圍內有超過 10,000 家企業。

Good morning, Matt. Yes. So that's the input capacity curve. So like the. Yes, yes. But in terms of batteries to get to the Black Mountain, it really depends on like the form factor of the material on, let's say, roughly half. So that's not like full family, but obviously mindful shifts, right? So really the way that we operate is it's very focused on really prioritizing the shifts around where the commercial demand is and it does move around over time, right. So the merchants we have theatricals resonate, but actually so

早安，馬特。是的。這就是輸入容量曲線。所以喜歡。是的是的。但就到達黑山的電池而言，它實際上取決於材料的形狀因素，比如說，大約一半。所以這不像完整的家庭，但顯然是有意識的轉變，對吧？因此，我們的運作方式實際上非常注重圍繞商業需求的變化進行優先排序，而且它確實會隨著時間的推移而變化，對吧。所以我們戲劇裡的商人產生了共鳴，但實際上是這樣

I guess was what I was getting at is like what kind of, I guess what some what capacity are you running at right now? And because you've got four hub joining United full capacity, you may have been $1.9 million in revenue on $15.9 million of costs wiring, you just running one spoke and shipping everything. There were two one in Europe, one in North America.

我猜我想表達的是什麼樣的，我猜你現在正在以什麼容量運行？由於您有四個樞紐加入美聯航的全部運力，您可能會以 1590 萬美元的佈線成本獲得 190 萬美元的收入，您只需運行一個輻條並運送所有東西。有兩個，一個在歐洲，一個在北美洲。

Yes. So we're talking about optimizing the store network of that. That's part of the focus, right? So there's a balance there. So part of the reason to have numerous folks as you're closer to the batteries are and it is tough to ship batteries on the world side, as we look at the Gen three spokes, that is a big focus, right, is basically driving through throughput where it makes sense, which then drives down unit costs, which then makes it much more efficient.

是的。所以我們正在討論優化其商店網路。這是焦點的一部分，對嗎？所以那裡有一個平衡。因此，當你距離電池更近時，有很多人的部分原因是，很難在世界範圍內運輸電池，當我們看到第三代輻條時，這是一個重點，對吧，基本上是駕駛通過有意義的吞吐量，從而降低單位成本，從而提高效率。

But we'll just continue to be thoughtful around that.There is a bit of working capital consideration there, too. So it's about right and to what degree we want to be pushing. So we're always looking at that and we'll continue to update assess S6 Edge.

但我們將繼續對此進行深思熟慮。所以這關乎正確以及我們想要推動到什麼程度。因此，我們一直在關注這一點，並將繼續更新評估 S6 Edge。

Okay. All right. So you but you didn't say you don't really have a number of us.

好的。好的。所以你但你沒有說你實際上沒有我們的人數。

Are that percentage of capacity you're running and

您正在運行的容量的百分比是？

yes, we don't really like usually gets codes by spoken kind of look on a network-wide, but it does depend on the network. We are looking at worldwide network-wide.

是的，我們通常不喜歡在網路範圍內以口頭方式取得程式碼，但這確實取決於網路。我們正在關注全球網路範圍。

I mean, you can you can do the math right?

我的意思是，你能算對嗎？

If you take 10,000 tons of paper capacity through biomass for so we're producing. So yes, you'll see that we did disclose right last quarter that we slowed for book and this is reflective of that. And now the pressure really is combined though the commercial demand and the working capital needs, what's the best choice around to your question, right. Where do you consolidate that demand potentially or not, et cetera?

如果透過生物質生產 10,000 噸造紙能力，那麼我們正在生產。所以，是的，你會看到我們確實在上個季度披露了我們放緩了書籍出版速度，這反映了這一點。現在，壓力確實是商業需求和營運資金需求結合在一起的，對於你的問題來說，最好的選擇是什麼，對吧。您可能會或不會在哪裡整合該需求等等？

Yes, because that's a pretty hefty burn.

是的，因為這是一個相當嚴重的燒傷。

Okay. And then if I may ask one other thing. I didn't it didn't have a ton of time to go through the full 10K. But the young on the debt side, there's one of the things you do with Glencore here was the you renegotiated some of that those converts right and to sign the checks and reduce your restructured these unsecured converts and a portion of that is now interest secured converts, is that correct?

好的。然後我可以問另一件事嗎？我沒有，因為沒有太多時間跑完全程 10K。但債務方面的年輕人，你與嘉能可所做的一件事是，你對其中一些轉換者進行了重新談判，簽署支票並減少重組後的這些無擔保轉換者，其中一部分現在是有利息擔保的轉換者， 那是對的嗎？

Senior secured and congrats to you on that again.

高級安全並再次祝賀你。

Yes, sure. No problem from. So yes, so there's two components. There's the new investment, the Sony Family Dollar investments about the senior secured convert right here right now from that closed. And they were asking about the space that are restructuring that recycling of the old converts, the $20 million convert from 2022.

是的，當然。從沒有問題。是的，所以有兩個組成部分。這是一項新的投資，即索尼家族美元對高級擔保轉換者的投資，現在就從交易結束開始。他們詢問正在重組舊改造回收的空間，也就是從 2022 年開始耗資 2,000 萬美元的改造。

So there are two triggers for that convert, and this is back to the March on 25 stocks. So basically have just at a very high level, it will reprice based on the walk of 30 days, plus 25% are months after key milestones or a Saturday earlier of a date. So the two milestones are the closing or the completion of definitive documentation around the DOE loan. And so that's the first one or the end of this year.

因此，轉換有兩個觸發因素，這又回到了 3 月的 25 隻股票。因此，基本上處於非常高的水平，它將根據 30 天的步行重新定價，加上 25% 是在關鍵里程碑之後的幾個月或某個日期之前的星期六。因此，這兩個里程碑是結束或完成有關能源部貸款的明確文件。這是今年底的第一個。

So that's the first milestone, half of it. And the second is associated with a few different trigger points, but it's focused on commercial production from the Rochester hub for a future date. So that's effectively how it's going to be repriced. And part of that yes, is addition of security for that original loan that was part of the totality of the transaction that we did with Glencore.

這是第一個里程碑，一半。第二個與幾個不同的觸發點相關，但它專注於羅徹斯特中心未來日期的商業生產。這實際上就是重新定價的方式。是的，其中一部分是為原始貸款增加擔保，這是我們與嘉能可進行的全部交易的一部分。

Okay. The benefit there just to make clear benefit there just to be clear is we're getting an extended maturity associated with that original note. So we five years for those two tranches from the point where they get repriced effectively and that has a good amount of time relative to the original maturity date. So that line of products.

好的。需要明確的是，我們得到了與原始票據相關的延長期限。因此，從有效重新定價的那一刻起，我們為這兩部分提供了五年的時間，並且相對於原始到期日有很長的時間。所以該系列產品。

Okay, that's important. Thank you.

好吧，這很重要。謝謝。

Thank you for that. Thanks for clearing that up for me for now.

謝謝你。感謝您現在為我解決了這個問題。

Thanks, Rob.

謝謝，羅布。

Thank here. It appears there are no further questions in the queue. I will now turn the call over to RJ for his closing comments.

在此謝過了。隊列中似乎沒有其他問題了。我現在將把電話轉給 RJ，聽取他的總結意見。

That you. So thanks, everybody, again for joining. As we mentioned, we're laser focused on the key objectives of airline. We look forward to continuing to update the market, and we'll speak again soon.

那個你。再次感謝大家的加入。正如我們所提到的，我們專注於航空公司的關鍵目標。我們期待繼續更新市場狀況，很快我們就會再次發言。

This does conclude today's program. Thank you for your participation. You may disconnect at any time.

今天的節目到此結束。感謝您的參與。您可以隨時斷開連線。