Good morning. If I could ask everyone to take a seat, we'll get started. Welcome. Good morning. I'm Ron Edmonds, Chairman of NOVONIX, and I'd like to welcome our shareholders and guests to NOVONIX 2026 Annual General Meeting. We acknowledge the Jagera people and the Turrbal people as the traditional custodians of the land on which we meet today. We pay our respects to Jagera and Turrbal elders, past, present, and emerging. Today, we're very pleased to welcome those of you at the meeting in person and those who are attending online through our virtual meeting platform provided by our share registrar, MUFG Corporate Markets Limited. I'll introduce Michael O'Kronley, Tony Bellas, Bob Natter, and Sharan Burrow, and also introduce the Directors who have joined us virtually, which is Suresh Vaidyanathan, and Jean Oelwang, and Nick Liveris.
I'd also like to introduce Robert Long, our CFO, and Suzanne Yeates, our Corporate Secretary. Joining us virtually today from our management team is Ms. Kimberly Heimert, our Chief Legal and Risk Officer, and Mr. Dwayne Johnson, our Chief Operating Officer. We also have with us today Mr. Michael Crowe. Mr. Crowe is available to answer questions relevant to the conduct of the audit and the preparation and content of the independent external auditor's report, and Ms. Chelsey Drake of Allens, our legal advisors. It's past 9:00 A.M. and a quorum is present. I declare the meeting open. Notice of the Meeting was duly given and the meeting has been properly convened. Please note that only shareholders, proxy holders, or shareholder company representatives may vote and ask questions.
The minutes of the previous general meeting of shareholders held on September 8th, 2025, have been approved by directors and signed by the Chairman as a true and correct record. Members may request a copy of the minutes if they wish. I will provide my perspective on the company's progress over the past year, which has been an important period of operational progress, as well as opportunities and challenges facing NOVONIX and the sector more broadly. 2025 was marked by geopolitical instability and risk-off positioning by investors. Electrification of transportation and the greater need for battery energy storage systems re-emerged as major energy security issues, as well as key climate response mechanisms. This has been amplified by the more recent turmoil in the Middle East, exposing global vulnerability to supply chain disruptions for oil and gas.
It's also emphasized the need among nation-states to achieve greater self-sufficiency in production of critical minerals such as synthetic graphite, which is vital for EV-grade batteries and battery energy storage systems, as well as reduced reliance on energy. For our company, 2025 marked the achievement of a key milestone with the delivery of its first mass production commercial-grade sample of synthetic graphite for industrial applications. This demonstrates that the company's proprietary continuous graphitization furnace technology, that's a mouthful, is capable of producing material at scale and represents an important step toward broader commercialization. At our Riverside facility in Chattanooga, we completed the installation and commissioning of the mass production equipment required to support qualification of our lead customer, Panasonic Energy. With four graphitization furnaces installed, the company's progressed furnace calibration and raw material testing as part of its transition toward large-scale production.
We've continued to engage closely with customers and potential customers across battery, energy storage, and samples for qualification, and progressing discussions with a range of counterparties. The company's indicated that mass production of industrial-grade synthetic graphite is expected to commence in 2026, reflecting the shorter qualification pathway for these materials. At the same time, we updated the market on the expected timing for commencement of mass production of battery-grade anode material for Panasonic Energy, which is now anticipated in the second half of 2027. Processes required for anode-grade synthetic graphite for EVs and battery energy storage systems. In July, NOVONIX strengthened its financial position through the execution of a funding agreement with Yorkville Advisors that provided access to $100 million in convertible debentures through multiple tranches drawn during the second half of 2025.
During the year, the company completed the sale of its Mt Dromedary natural graphite project, and more recently, also entered into a binding term sheet for the proposed divestment of its NOVONIX Battery Technology Solutions business. These two actions show a sharpened focus by NOVONIX on its core strategy of developing and scaling synthetic graphite production in the United States. This focus will continue to enable the company to concentrate its resources on a single high-priority opportunity aligned with evolving supply chain and policy dynamics. The proposed BTS transaction remains subject to final documentation and customer conditions. At the corporate level, we strengthened our leadership team with the appointment of Michael O'Kronley as Chief Executive Officer and Managing Director, Kimberly Heimert as Chief Legal and Risk Officer, and Dwayne Johnson as Chief Operating Officer, supporting the next phase of operational execution.
While the company has made solid progress, we continue to operate in a complex and evolving environment. The qualification of battery-grade material, manufacturing processes, and broader market dynamics remain key areas of focus. Notwithstanding these challenges, NOVONIX remains well-positioned with advanced technology, strategic customer engagement, and a clear focus on establishing a United States domestic supply of anode-grade synthetic graphite. I'd like to thank Nick Liveris, who has taken the decision to retire from our Board, effective at the conclusion of this AGM, to focus on his other commitments. Nick was previously the company's Chief Financial Officer and is transitioning to a Non-Executive Director role in 2024. We thank Nick for his significant contribution to the company and wish him well and the best in all his future endeavors. The Board remains sharply focused on its disciplined execution of the company strategy and on delivering long-term value to shareholders.
We appreciate your continued support and look forward to providing further updates on our progress. Thank you, and I will now outline the procedural matters of this meeting. Procedures for asking questions. All shareholders will have the opportunity to comment on and ask questions in relation to the resolution questions until the item of business has been introduced and shareholders have been invited to then do so. Shareholders will be able to ask questions in person and online during the meeting. For those participating online, we have published on our website the meeting online guide, which explains how to participate in the AGM virtually. I confirm you can start submitting questions via the online platform now. You do not need to wait until we get to the relevant item of business. We encourage you to start submitting questions now.
In order to ensure that all shareholders have a reasonable opportunity to comment and ask questions, I request that shareholders do not ask more than two questions at a time, questions from the shareholders during today's meeting. However, I reserve the right as Chair to rule questions as not pertaining to the AGM out of order and to take questions on notice. I propose that the order of taking questions will be as follows. Firstly, from any shareholders in the room with us today, secondly, from any shareholders online who have asked an audio question, and thirdly, from any shareholders who have asked a question via online text. Now onto voting, I would like to briefly summarize the voting procedures which will apply to the meeting. Each resolution will be conducted by a poll. As shareholders are aware, no formal vote is required on Item one of the agenda.
A poll will be conducted on Resolutions 1 to 13. All members and appointed proxies attending the meeting in person and entitled to vote were given a voting card upon admission to the building. If you have a green voting card, you are a voting shareholder, proxy, and have chosen to vote using a paper voting card. You are also entitled to speak at the meeting. If you have a yellow card, you are a non-voting shareholder. While you are entitled to ask questions and make comments, you are not entitled to vote at this meeting. If you have a white card, you are a visitor and not entitled to speak or vote at this meeting. For shareholders participating virtually in this meeting, click on the Get a Voting Card or Ask a Question box at the top or bottom of the webpage in order to obtain a voting card.
The share registry has sent the relevant proxy numbers to proxy holders validly appointed by shareholders prior to the meeting. For appointed proxies participating virtually in this meeting, please click on the Get a Voting Card or Ask a Question box at the top or bottom of the webpage. Key in your proxy number under proxy details in the pop-up box on your screen in order to obtain a voting card or to lodge a question. If you have misplaced your proxy number, please ring the helpline number displayed at the top of your screen for assistance. You may submit your votes via the online platform at any time during the meeting. Shareholders and appointed proxies will be able to submit their votes on Resolutions 1 to 13 via the online portal anytime from now until all these resolutions have been put to the meeting and discussed.
Where undirected proxies have been given in favor of the Chairman, I will vote in favor of the resolution to the extent permitted. On each resolution will be displayed in the side view section of your web browser as we move through the resolutions. Your votes will be counted by personnel from our share registrar, MUFG Corporate Markets Limited. The results of each poll will be announced via the ASX as soon as possible after this meeting and will also be displayed on our website. If you experience any difficulties using the online platform, top of the page. You can also refer to the online meeting guide, which is accessible via the online platform. We will now move to the formal items of business for the meeting.
The first item of business in the notice of meeting is to consider the financial statements and the reports of the directors and auditors for the financial year ended 31 December 2025. I table for discussion the Annual Report for the year ended 31 December 2025, setting out these reports, which has been made available to all shareholders on the ASX. There is no voting on this item of business. This item gives security holders the opportunity to ask questions about the company and its operational performance. The company's auditor, Mr. Michael Crowe from PwC, is present and available to answer any questions in respect. We will start with questions from shareholders attending in person. Are there any questions in respect to the Annual Report? Okay. Are there any audio questions with respect to the annual report?
Chair, we have no.
Thank you. I will now take questions from shareholders watching online who have sent in their questions via online text.
There are no questions online.
Okay. Thank you, Suzanne. Okay. Moving on. Resolution 1 concerns the approval of the 31 December 2025. It is a non-binding resolution to adopt the Remuneration Report. Please note that the vote on this resolution is advisory only and does not bind the directors or the company. However, the Board and the company will take into account any feedback that we receive in developing our future remuneration frame. Voting exclusions apply to this resolution as set out in the Notice of Meeting. Are there any questions in respect to Resolution 1 holders in attendance at the AGM here today? Are there any audio questions from online participants on Resolution 1?
Chair, there are no audio questions at this time.
Okay. Thank you. Okay, I'll now take questions from shareholders watching online who have sent in their questions online.
There are no questions received online.
Okay. The proxy votes received in relation to this resolution are now shown on the presentation slides on your screen. I would like to remind shareholders who haven't yet cast their votes on this resolution to do so now. We'll move on to the next item of business. With the exception of Admiral Robert Natter, who's abstaining from this resolution, the election of Robert Natter has unanimous support of the NOVONIX Board, and the Board recommends that you vote in favor of this resolution. Are there any from shareholders in attendance here today? Are there any audio questions from online participants on Resolution 2?
Chair, there are no audio questions at this time.
Thank you. I'll take questions from shareholders watching online who've sent in their questions online text.
No questions online.
Okay. Thank you, Suzie. Okay. The proxy votes received in relation to this resolution are now shown on the presentation slides on your screen. I'd like to remind shareholders who haven't yet cast their votes on this resolution to do so now. We'll move on to the next item of business. Resolution 3 concerns the election of Ron Edmonds. With the exception of Ron Edmonds, myself, who has abstained from this resolution, the election of Ron Edmonds has unanimous support of the NOVONIX Board, and the Board recommends that you vote in favor of this resolution. Are there any questions in respect to Resolution 3 from holders in attendance today? Are there any questions from online participants on this resolution?
Chair, there are no audio questions at this time.
Okay. Thank you. Any questions from the online people that have sent in text questions, Suzie?
No questions online.
Okay. Thank you. Okay. The proxy votes received in relation to this resolution are now shown on the presentation slides on your screen. I'd like to remind shareholders who haven't yet cast their votes on this resolution to do so now. We'll move on to the next item of business. Resolution 4 concerns the Performance Rights Plans. The approval of the Performance Rights Plans has unanimous support of the NOVONIX Board, and the Board recommends that you vote in favor of this resolution. Are there any questions in respect of Resolution 4 of holders in attendance at the AGM today? Are there any audio questions from online participants?
Chair, there are no audio questions at this time.
Thank you. Are there any questions from shareholders watching online who've sent in their questions via text?
Yes, I have a couple of questions online. The first one is, there was a 20% proxy protest vote against the Remuneration Report. What was the issue? Were there concerns about the structure of the Performance Rights Plan?
I'm sorry, could you repeat it one more time, Suzie? I'm sorry.
There was a 20% proxy protest vote against the Remuneration Report. What was the issue? Were there concerns about the structure of the Performance Rights Plan?
I don't think there were any.
Yeah.
There were no reasons given.
Yeah, I don't believe we saw any reasons given, so we can't really express vote. Any other questions, Suzie?
Panasonic mass production delayed to 2H 2027. Third delay. Will Performance Rights be forfeited if delayed again?
Well, I believe the requirements that have to be met for Performance Rights to be given will be adhered to. If that's one of the metrics, then we will adhere to that. Okay. Any other questions, Suzie?
That's all.
Okay. Thank you. The proxy votes received in relation to this resolution are now shown on the presentation slides on your screen. Votes on this resolution to do so now, and we'll move on to the next item of business. Resolution 5 concerns the issuance of fiscal year 2026 Performance Rights to Michael O'Kronley. The Director who have a special interest in the resolution recommend that you vote in favor of this resolution. Voting exclusions apply to this resolution as set out in the Notice of Meeting. Are there any questions in respect to Resolution 5 from holders in attendance at the AGM today? Okay. Are there any audio questions from any of the online participants?
Chair, there are no audio questions at this time.
Thank you. Any questions from shareholders watching online?
No questions online.
Thank you, Suzie. The proxy votes received in relation to this resolution are now shown on the presentation slides on your screen. I'd like to remind shareholders on this resolution to do so now. We'll move on to the next item of business. 12 concern the issue of FY 2026 Share Rights to Phillips 66 Company, to Mr. Nick Liveris, Mr. Tony Bellas, Ms. Sharan Burrow, Mr. Ron Edmonds, Admiral Robert Natter, and Ms. Jean Oelwang. The directors, other than the directors who have a special interest in this resolution, recommend that you vote in favor of these resolutions. Voting exclusions apply to each resolution as set out in the notice of meeting. Are there any questions in respect to Resolutions 6 to 12 here at the AGM today? Are there any audio questions?
Chair, there are no audio questions at this time.
Thank you. Are there any questions from shareholders watching online who have sent in their questions?
Yes, we've got one question, and it regards Nick Liveris' share rights. Why did we prepare a share right grant to Nick Liveris given his decision to resign from the company and finish up today?
Yeah. Mr. Liveris's share rights will be prorated based on his service for the Board, so he will get through today. Thank you. Any other questions, Susie? Okay. The proxy votes received in relation to these resolutions on your screen. I'd like to remind shareholders who haven't yet cast their votes on these resolutions to do so now. We'll move on to Resolution 13, concerns the additional 10% placement 7.1A. The directors recommend that you vote in favor of this resolution. Voting exclusions apply to each resolution as set out in the Notice of Meeting. Are there any from holders here in attendance today? Okay. Any audio questions from participants on this Resolution?
Chair, there are no audio questions at this time.
Thank you. Any questions from shareholders watching online?
Some online questions. What is the cash runway? Will you issue more dilutive convertibles?
Maybe I'll ask. Maybe Robert, do you want to?
Sure.
Talk to that?
We assess the capital needs of the business and the ultimate capital structure. That would be a consideration, but there's no guarantee to which form of capital instrument we would issue.
Thank you, Robert.
Another question, how much will this dilute the current shareholders and share price? Also, when do you foresee the share price recovery to reasonable levels?
I'm sorry. Can you repeat the first part of that, Suzie?
How much will this dilute the current shareholders and share price?
Well, sorry, but you say, how much will this dilute? What is this?
The 10% placement capacity.
Robert, you want to handle that?
The resolution only approves a placement capacity. It's not the issuance of shares. It allows the company certain flexibility from a capital raise perspective, but there is no dilution with the approval.
Yeah. Regarding the expectation around the share price, that's extremely difficult to comment on that. I think I can speak for the Board. We all feel the pain that our shareholders have felt in this regard. I can assure you that the Management Team and the Board are working diligently to address the issues that need to be taken care of to take us to the next level.
ASX notes that there's substantial protest votes against resolutions like this at recent AGMs, history of doing selective placements. Why are we asking for this authority, and has there been a substantial protest vote against this resolution?
Well, I don't think we've had a substantial vote against it, so I think that's a fair statement. I think it's about maintaining our financial flexibility. Robert, please feel free to add anything you'd like.
No, I agree with you, Ron. The reason for the additional capacity is for flexibility as we pursue capital structure alternatives. It's just to provide the business more flexibility as we look to finance the business going forward.
Any more questions? That's it? Okay, good. Thank you. Okay, the proxy votes received in relation to these resolutions are now shown on the presentation slides of your screen. I'd like to remind shareholders who haven't yet cast their votes on these resolutions to do so now. This concludes the formal part of the meeting, and I'd like to now hand it over to Michael O'Kronley for the CEO presentation. Mike? Great.
Thanks, Ron. Just by way of introduction, I'm Michael O'Kronley. I'm the CEO of NOVONIX. I've been with the company just about over 10 months now, relatively new to the company, but not new to the battery industry, to the battery materials industry, and certainly not high-volume manufacturing. I spent the majority of my career launching new products, new plants, new divisions, and that's bringing that expertise to NOVONIX, and then also strengthening the team to launch and go into high-volume production of synthetic graphite. That's some of the background. What I wanted to do here is talk a little bit about where NOVONIX is at to remind a lot of investors what we actually are. The last couple of days, we've been traveling around Australia talking to institutional investors, and it still surprises me a little bit.
There's confusion in the investor market of who we actually are. The first slide is to talk a little bit about who we are and what we're doing. We are a synthetic graphite manufacturer. As it comes as a surprise to some investors, we are not a company. We are converting a byproduct of petroleum refining, petroleum coke, into an engineered material that is used in lithium-ion batteries, or it's used largely in lithium-ion batteries. Synthetic graphite is a critical mineral. Critical minerals are very important, I'll get into this in just a moment, of the geopolitical impact of this particular material, problem in the market with this particular material, and NOVONIX is solving this particular problem with our innovative technology and our launch into production. Talking a little bit about that in the future.
We are very much a U.S.-based company, and so our employees, our assets, our technology is all U.S.-based. Our supply chain is U.S.-based. Our customers are U.S.-based. Thinking about that is essentially a nice framework of where we're going. When we talk about the support, really from the U.S. government, it's very important that we're based in the U.S. and that we're also supplying and solving a problem in the U.S. I'll start talking a little bit about the battery market, but more specifically about graphite. Not all graphites are the same. There are two primary sources of graphite. One is one that you mine out of the ground, thus some of the natural confusion that comes with certain investors. When they think graphite, a lot of people think about graphite that is mined. That's not what we do.
That was the basis of the company many years ago, where we had some mining rights to mine natural graphite. We are focused on synthetic graphite. It's this conversion to this engineered material. The reason why we're focused on synthetic graphite rather than natural is because it is the majority of the market. As you can see on this graph that's over on the right-hand side, this year it's percent of the market. Natural is actually very small. It's a material that we can make, and it's even more important when we think about certain applications. The application is energy storage. When you think about or you read about data centers, energy storage, batteries with renewables, these are batteries that require 100% synthetic graphite. It's not so much an EV story of where you need graphite.
That's why you see more and more growth that's happening on the synthetic side than on the natural. When we look at the positioning, the product that NOVONIX is making, it's really in support of the growth that we're forecasting, and it's not just NOVONIX, it's really these are market forecasts of how much this is going to grow. One of the things that, while we're on this slide, if you look at size of the market that's forecast in North America is going to be around 500 kilotons. When NOVONIX is talking about how we're going to grow and how we're going to expand, it's really about a number of 50 kilotons. In 2032, when we're scheduled to have the full build-out of our facilities in Tennessee, that will represent approximately 10% of the market or market share.
We also feel that's a pretty good position to be in. You don't want to be oversupplying and overdominant in a particular market, a little bit of scarcity. The fundamental problem that NOVONIX is solving here is a super highly concentrated supply chain, and largely supplied out of China. 99% of this material is either produced in China or produced by Chinese-controlled companies, and that's a problem. That's a problem for battery manufacturers. That's a problem for governments that are worried about the criticality of these particular materials. Can we get this material? This particular material is also subject to export controls that the Chinese government already has in place. A lot of you that are following our stock and our stock performance, you can see the impact it has.
Last October, when the NOVONIX stock price had jumped, it was because of the export controls that China put in place. They put in additional export controls. All of a sudden, battery manufacturers would have been limited at their ability to get this material out of China. Again, 99% of it comes from China or Chinese-controlled companies. That presents a huge problem for the industry, and we're very sensitive to that problem by manufacturing this product in North America for the North American market to help manufacturers navigate around this supply pinch. It's a huge issue, and it's also the major reason why NOVONIX has received approximately just under $1 billion worth of support and, more recently, a tax credit that was recently certified just last week.
A is going into this supply chain, and it's to solve this problem of just a hyper-concentration of supply coming out of China. There is also another incentive for a battery manufacturer in North America to source NOVONIX graphite, and it has to do with a tax credit regime that is in place already on the books in North America. It's called a 45X Production Tax Credit. This tax credit is massive. Just to give you a scale here, on the upper right-hand side of this particular chart, shows that a tax credit is around $35 per kilowatt hour . The price of a typical battery cell is around $74 a kilowatt hour. Almost half of the price, the selling price of that battery, can be claimed back in a tax credit. That's just massive.
You have to do two things in order to get this tax credit, however. The United States, and number two, you have to put materials into that battery that are a prohibited foreign entity, and it can't be from a prohibited foreign entity. Think China. China is one of those entities or any Chinese-controlled company is a PFE. As a result, battery manufacturers are going to be non-PFE materials in their battery to claim this massive tax credit. In the lower right-hand side of this chart, you can see that between 2028 and 2029, it's going to be virtually impossible to receive this tax have graphite sourced. The value of a graphite in a typical battery is around 20%-22%. In that timeframe, you'd need to have non-PFE materials going in there that are between 70% and 80%.
By 2029, really you're going to need PFE-free materials going into this battery to get this massive tax credit. This sourcing decisions at battery manufacturers to look for alternatives that are non-Chinese graphite. Talking a little bit about what NOVONIX has been doing, of course, over the last 10 years, this type of thing doesn't happen overnight. A lot of you that have been invested in the company for the long term have seen this. You've seen the development. We're making this material with an environmentally friendly process. This is a lot of new intellectual property that has been developed, and we're commercializing that now. It's not something that you can just turn on. It needs a lot of development time. We appreciate the patience of the investors.
We appreciate the patience with even our customers of developing this new process, this new technology. I'll get into a comparison and also a variable cost comparison in just another slide. It takes a lot of time to develop a new technology when you're going to disrupt the market. We've also, in the past year, we've focused the business. We focused it, as Ron had mentioned, around synthetic graphite. Some of the non-core assets that we've recently divested, whether it's the Mt Dromedary mining rights sale or Battery Technology Solutions, where they're doing very good work, however, it's not core to synthetic graphite. We wanted to focus what it is we're doing, focus from a management time perspective, from an investment and capital perspective to grow and solve the problem that exists in the United States.
It's where we're getting the majority of our support from the U.S. government is on synthetic graphite manufacturing. We publish some pictures from time to time reports. This is some recent pictures of the equipment that has been going into our Riverside facility for this facility right now, and it is enough equipment to go into production with Panasonic. They are going to be our lead customer next year, and all of that equipment, all of that CapEx is already in place. This is just a quick comparison, but on a lot of different metrics technology that NOVONIX is putting in is less expensive than the alternative process which is the Acheson process. Once we get to scale, we will be at a lower dollar per kilowatt hour or a dollar per kilogram basis than the state-of-the-art technology that's utilized in China.
A lot of questions have come up recently, and hopefully this slide will address it. It's a very busy slide, but what it's trying to do is it's trying to describe the qualification process of what it takes in order to qualify this material for a battery application. And when you add up all of the time on this chart from initial engagement to start of production, the timeframe is certainly measured in years. It's not measured in quarters. Anywhere from two and a half to five years it takes to develop a product, to co-develop a product with a battery manufacturer and get it into production. Now some of these customers are very advanced, which they've already gone to contract, which are Panasonic and then PowerCo.
Fairly large pipeline of new customers, new applications that are behind it that we're not public with yet, but they're right behind these announced contracts. Do I anticipate being able to announce new customer contracts in the next six to 12 months? Absolutely. This chart on the right-hand side gives you just a little bit of context of the volumes we're talking about. The two initial contracts that we have, Panasonic and PowerCo, are represented in the green line around 10 kilotons- 11 kilotons of total need, total capacity. We are in discussions with a lot more customers, more than just those two initial customers, that essentially is 3x what our planned capacity is. We have a very large pipeline in there. Of course, we're not going to land all of those contracts, but we certainly by 2030-2032.
Just looking forward a little bit, two final slides here. Little bit of confusion, and trying to put a little context around why is NOVONIX looking at expanding, when we haven't even started production with our first customer yet. There's quite a few reasons for this. Those of you that have been following all of the announcements, we have two sites planned. One is the initial site, our Riverside site. The second site was an Enterprise South site, which was a separate geographical location. Recently, we've had the opportunity to acquire land that is right adjacent to us. The reason why this is attractive is it's going to have certainly a lot of synergies with operational effectiveness, as well as there'll be significant capital savings. There's already a building on site. The land is already leveled and flat and ready to build.
It already has a building on the site. It already has a lot of significant electrical infrastructure. There'll be a massive amount of capital savings associated with this. The reason that we need to be planning here is really it's with how we're receiving government funding. On the first site, we have received a grant and a tax credit. On the second site, we've received a loan. When we combine those two into one project, what that effectively allows us to do is to bring in all of those funding sources onto one project, and it also would allow us potentially to bring forward some of the loan financing that we get from the U.S. government. Really it's to give us a little bit more flexibility in how we're going to finance the growth here. That's important.
Also, when we're out talking to customers, and we're looking at volumes, and you saw those lines of the projected volumes with the potential customers that we're looking at. Some customer applications are looking at 20 kilotons-25 kilotons per year, which is already the ability, which was only at 20 kilotons. We need something, and we need to have a plan and to be able to show that we have a growth plan and a capacity that we can build upon. This is the reason behind making this investigation. It's not a complete investigation. There's still before we finally pull the trigger on it, but that will be happening later this summer. Finally, this is just a summary of where we're at. We are continuing every day to scale our operations. We are running that equipment that you saw in those pictures.
We are making samples virtually every week and sending out new samples to new customers. This is a weekly activity that's happening. We are looking at lots of different financing options. Certainly, I touched on the financing through the U.S. government. They're a very helpful source of financing. We also need to bring a certain amount of matching capital along with that. The last resolution to give the company a certain amount of flexibility and what are different structures, what makes sense? Is there some strategic financing that would also come in? This is something that we're very engaged with, bringing along some additional financing. Of course, at the very bottom here, customers, we're going to be increasing our customer order book. We are very engaged with lots of different customers, sending out samples, like I said, every week or every other week.
New applications, new projects here, and, like I said, we'll be bringing that to the market and announcing that. I think with that, we can take some questions.
I have a question. Thank you.
Let me just give you a microphone.
Oh, okay.
Mm-hmm.
Yes, good morning. Thank you for your presentation. You mentioned on one of your earlier slides, you're the world's most advanced synthetic graphite producer. How much as samples to various clients? Is it kilograms? Is it 1,000 kg?
Yep, just to clarify, we are North America's most advanced synthetic graphite producer, not the world's. There are certainly Chinese companies. Most of this material comes from China. For as far as North America, with the plant that we already have built, the capacity that we already have built, kilotons of capacity that we can make today, what we are doing today is continuing to make sample materials out to various customers, including Panasonic, but also PowerCo and that whole customer pipeline. Those pictures that I showed, we are making the material today, just in kilograms as measured in tons. On a particular run in a particular week, we will go through and make tons of material in a particular week. We're still going through the final qualification and delivering of some of those samples.
We'll have some announcements soon about that when that's getting delivered. Last fall, we talked about different applications, not just battery customers. We're again making some samples for that. We have a pilot-scale facility as well as a larger-scale facility, the mass-production equipment that you saw. We're utilizing all of those assets to deliver materials to different customers for different applications.
Thank you. If I could please ask my second question, no doubt regarding the $1 limit.
Mm-hmm.
That is cause for concern for us. What's the Board's intention regarding that? Will there be a consolidation?
Yeah, I can answer that, or Robert, if you want to go ahead and answer that one.
Sure. Thank you for the question. A broad consolidation is an option to cure the Nasdaq matter as well as just organic growth in the stock price. There's also another option where one can increase the ratio of ADRs to ASX shares instead of 4/1, say to 5/1 or 6/1. We're exploring those options, but most likely not a share consolidation.
Okay. That expires in, is it three months or two months?
There's 180-day period. Yeah.
Mm-hmm.
Could I ask what your view on risks to the business are? Competition, especially if they're more allowed into the market with a different president.
Mm-hmm.
What do you see as the risk profile for what's going on?
I see lots of different risks for the business. Certainly, scaling is one thing. That's, right? I'm very confident that we've put the right team in place to scale. Individuals as well as teams, they're scaling the business, scaling the operations. They've done this time and time again. I'm confident in that because that is something that we can control. When it comes to other risks, the geopolitical risks, certainly, China is dominant with this material, barring anything else, that China is going to continue to be dominant until NOVONIX is able to get to scale and to get to a price point of where we're able to compete with the Chinese. Long term, we will be able to get there. In the short term, we need to get started.
That's where at least the U.S. government has been very consistent in, through funding, through policy, to provide an environment that is going to allow a supply chain to diversify away from China. Right now, and I even look back over several different administrations in the U.S., the problem with critical minerals has been known for decades. It started really with some action and change during the first Trump administration. When continued the policies and even strengthened them, and now when we see in the second Trump administration, we see even an acceleration of urgency be very supportive of a North American supply chain of critical minerals. That is certainly going very well in our direction, in our favor. We don't necessarily need new tariffs and/or policies. We can look at the policies that are already in place.
This tax credit that I mentioned for battery manufacturers in North America, this 45X Production Tax Credit, that was put in place in the Biden era. Now, when Trump came in with his administration, that was strengthened and actually lengthened. I look at that and those are all signals and all signs saying that regardless of political party, regardless of who's in the White House, this is essentially a national priority for the United States that they want to solve this critical mineral problem. We've already seen direct evidence where underneath the Biden administration, NOVONIX was granted a significant amount of support with loans, grants, and tax credits in the Trump administration. Everything there is telling me that that is a very consistent level of support. Other questions?
Can we get the microphone here?
All right. Are we there?
Yep.
Welcome, everyone. Obviously, the share price is a reflection of confidence and pseudo-performance. The shareholders, I think you can feel that we have questioned performance. We don't see it in our bank balance, the deferral of the Panasonic supply in the price, because that deferral.
Mm-hmm.
Adds suspicion that we're not where we need to be. Can you clarify that? We don't see a grade of quality of specification coming out of the publications.
Mm-hmm.
How are you going to be able to get the confidence back from this point, because we want to see some changes soon?
Yep. No, I fully appreciate that. Also, I think virtually everyone on the Board, as well as the Management Team, also want to see the exact same thing. We're in a position to make this happen and to change it. There's been a lot of activity that's happened of recent. Let me just go back to what Panasonic is needing and requiring, so really to fully understand that. The final step of the qualification process isn't to make the material that works in a battery. That has already been done. That has already been proven. They need to see that same material that we've already made, that we've already demonstrated that we can make. They need to see it on the final large mass production equipment that's already installed.
The first step needed to be, you have to have the equipment, you have to have it installed, and you have to have it running. The of producing that same material, that same quality level, on that mass production furnace. What had happened back in January when we announced this pushback or the delay, when this was installed, and this was a much larger furnace than all of the previous versions of the furnace that we had installed, it wasn't operating quite as we had expected. A certain amount of the material flowing through the furnace, it didn't work, again, as expected. It required some modifications to this first-of-a-kind furnace. That has measured in a delay. We needed to order some different parts, some different modifications, and we expect that to be happening very soon.
Those parts are coming in, and we're now running the furnace and making sure to schedule. Panasonic has been very close with this entire process. They come on site. We speak with them at least every other week on the progress of what's happening. I can assure you, there's a lot of urgency with the entire team at NOVONIX, with the Board, that we're very focused on getting this deliverable done and complete. Panasonic is also eager to see this material. They've been very patient with us. They do understand that this is new technology that is far more efficient and environmentally friendly, but sometimes new innovation and technology takes a little bit of time. Close. In the future, in the next time period here, I think you'll start to see some announcements of when this material was shipped out.
Now, I will comment, once we make this final mass production sample to Panasonic, up to a year to go through their full validation. Again, it's going to take some time. When we announced back in January that we're expecting to go into mass production at the back end of 2027, okay, that was reflected in the confidence and also in the share price, and it did drop. I think that's the inflection point that a lot of investors are really focused on. When are we going to move forward into starting to generate revenue and starting to generate some profits? That's really what's needed and required. The first step before that, and I think the step that we really need to key on is this next step of delivering this final mass production qualification sample. Panasonic is the product. We know what the product is.
We know what the product needs to look like. It's just a matter of manufacturing that out of this high-volume furnace. Now, we have been doing a lot of work and a lot of testing, and so the team is confident that we will get there in short order. I do think the real value inflection point will come when we deliver the sample, but then also when we go into production and we start generating revenue.
This isn't the first continuous flow graphitization furnace that Panasonic has. It's a bigger, newer one. Is that right?
Yeah.
Can you repeat the question?
Yeah. The question was this isn't the first continuous-flow graphitization furnace that NOVONIX, but it is the large production-scale furnace. We do have three other furnaces that are installed and operating. They're at a smaller scale. They are continuous-flow, they are induction, and they do produce the Panasonic material. We have confidence that the process is going to work. We have confidence that this furnace technology is going to work. Panasonic's requirement, however, is to have it on this large-scale furnace that's about 1.6x-1.7x the size of our previous furnaces. It is scaled up to be more efficient. That's the furnace that Panasonic wants to have that final sample from. That was just recently a completed installation at the end of last year and was running at the beginning of this year.
That's also when we recognized that it wasn't working quite as intended, so a few modifications need to be made, and that's what has qualification sample. Other questions from the floor?
Can I be greedy and ask another one? Where does the equipment, the main furnaces, where are they made?
The main furnaces, all of the technology in the furnace, I think we've talked about is designed and made in the United States. Harper International is centered in Buffalo, New York. There's no Chinese technology that's involved at all or technology that's subject to Chinese export controls. We're completely independent of that.
The current oil price or situation, affecting is a product or a byproduct of oil, a composition of this synthetic graphite.
Yes. We use as a feedstock in our overall process a byproduct of petroleum refining. The cost of our input material does fluctuate with the price of oil. The input material does go up. However, the contracts we have in place today with Panasonic and PowerCo do provide for a direct 100% pass-through for any variability in that feedstock cost. As the oil price goes up, we pass through that adder directly to the customer.
Thank you.
Just something about power costs in the production, if it's induction thing, is that electricity cost? How is that flowing through? Is that something where it's pretty stable in the U.S.?
Yep.
Is it fluctuating?
Energy costs, electricity, are one of the significant drivers in our cost of goods. We are located in Chattanooga, Tennessee, as it's in an area that is serviced by the Tennessee Valley Authority. TVA is the local utility there that generates their electricity primarily from hydro and nuclear. Because of that, it's clean from a CO2 perspective, but they're very efficient once the capital's in place. The U.S. federal government put these assets in place a long time ago. They invested in that. If we were to map out the power cost everywhere across the United States, TVA has the lowest electrical costs anywhere in the United States. When you think of electricity being one of our significant cost drivers, we couldn't be in a better spot geographically because of the utility costs. I think next we move on to online questions.
Thank you. Currently, no online questions at this time.
All right. Thank you. Again, any written online questions?
I do have a couple of online questions. The first one is regarding the DOE loan. The $750 million DOE loan has been in con- What is the final hurdle preventing the official closing and funding?
Yeah, Robert, do you want to go ahead and take this one?
Yeah, sure. The conditional commitment loan has various conditions precedent, CPs. These CPs relate to technical, financial modeling matters, environmental matters. We talk with the-- I personally talk to the Department of Energy at least weekly or multiple times per week. Those are moving forward, and so it's a typical CPs to close a loan that are in place, and we're working through those.
I've got one more question.
Mm-hmm.
Could you please explain how the board assessed the risk of an ITC negative determination before the Department of Commerce announced its final duties? Given that the 160% tariff expectation was a key part of our investment thesis, how should shareholders trust the company's policy risk analysis going forward? Without that tariff protection, what specific measures will NOVONIX take against Chinese graphite producers?
Yeah. A comment on the ITC ruling that came out last month. This is something that actually came as a surprise to not only NOVONIX, but really the entire industry as well as our battery customers. Most everyone was expecting it to go through because it was very much in line with the policies that had been set out by the U.S. government, whether it was the Department of Commerce, Department of Energy, through the White House. That's why it came as a surprise. There is a replacement for that, something that might even be a little bit stronger. One day before the ITC, March 11th, the U.S. Trade Representative, the USTR, had launched a trade investigation into lots of different products that are affected by or forced labor.
This is something that we believe is just a different policy that the U.S. federal government is using to identify and to combat any type of excess capacity. What was determined by the U.S. Department of Commerce, which is different than the ITC, was they found excess capacity. They found that the Chinese graphite producers were being supported by the Chinese government, creating non-market conditions. We already have positive indications from the U.S. government for this. What I see is essentially the federal government and putting different, essentially, protections in place to allow critical mineral manufacturing, graphite. This is something that we're watching and participating in very closely. We anticipate this summer or late summer for some of this investigation to wrap up. We'll be able to see what happens there.
Fundamentally, as I mentioned on some of the slide material, the process that NOVONIX is putting in place is more economic. From an energy perspective, from a consumables perspective, from a yield loss perspective, it is more efficient. The problem is you need to get up and running. You need to get to scale to spread your fixed costs. That's where some of these policies will be helpful to us. What I can also tell you is the contracts that we have in place from our battery manufacturers, they recognize that there's a security of supply problem with the supply being so highly concentrated in China. The pricing that we have in place today with these contracts is at a premium over what the typical Chinese price. That gives us certainly some relief.
When you look at the premium that's embedded into this 45X Tax Credit, as we're discussing with battery manufacturers, they recognize that there's a significant financial advantage to sourcing non-Chinese material. That's also giving us room for price premiums as we move forward and as we launch.
The technology license agreement with Harper expired on 1 January 2026 because the initial payment was not made. Could you please explain why the payment was missed and whether this affects the operation of your existing graphitization furnaces? More importantly, for future expansion, such as Enterprise South, underlying intellectual property, or will you need to renegotiate with Harper or find an alternative technology provider?
Yeah. With Harper, they are our furnace provider. Back in 2020, we do have an agreement that's still in place and still effective. It's an exclusivity agreement. Harper effectively is not allowed to sell this type of furnace or furnace technology. Still in place, we also are working with Harper as we build out furnaces and furnace technology. As we have installed these furnaces, as we run these furnaces, we are learning more about them and how to make them more efficient. A lot of this IP, a lot of this process IP and know-how is being developed by NOVONIX. It's not specifically the property and ownership of Harper. We do still have an agreement in place, an exclusivity agreement. The license agreement that was negotiated and put in place was, quite frankly, a very expensive agreement.
Point. Utilizing cash to make a licensing agreement for some future expansion wasn't the best use of cash. It's still a very collaborative, and we're going to continue to do that. If we need to, in the future, open that back up again and it makes financial sense to go out and license it for whatever reason, what we're looking at is taking the cash that we have, putting it towards equipment that's going to fundamentally get us to start of production rather than put that cash towards licensing. That's why we elected.
No further questions.
All right. Thank you.
Thanks, Mike. In will be released through the ASX as soon as possible and will also be displayed on our website. On behalf of the Board and Management, thank you to everyone who attended the AGM and to all those who engaged with us by submitting questions in advance and during the meeting. Thank you all for attending this AGM. We hope you and your family stay safe and well. This concludes the official business of the meeting. I declare the 2026 AGM closed. Thank you very much.