AYRO, Inc.

Ladies and gentlemen, thank you for standing by. Good morning and welcome to the ARO Inc. First Quarter 2023 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw from the question queue, please press star then two. Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call through August 9th, 2023. I would now like to turn the call over to Joey Delahousie of CoreIR, the company's investor relations firm. Please go ahead, sir.

Thank you, Kate. Good morning, and thank you for participating in today's conference call. Joining me from ARO's leadership team are Tom Wittenschlager, Chief Executive Officer, and Dave Hollingsworth, Chief Financial Officer. During this call, management will be making forward-looking statements, including statements that address ARO's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in ARO's most recently filed annual report on Form 10-K and subsequent periodic reports filed with the SEC in ARO's press release that accompanies this call, particularly the cautionary statements in it. Today's conference call includes adjusted EBITDA, a non-GAAP financial measure that ARO believes can be useful in evaluating its performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. For a reconciliation of this non-GAAP financial measure to net loss, this most directly comparable GAAP financial measure, please see the reconciliation table located in ARO's earnings press release, which is available on its website at www.aro.com under the Investors tab. The content of this call contains time-sensitive information that is accurate only as of today, May 9th, 2023. Except as required by law, NRO disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to CEO Tom Wittenspotter.

Thank you, Joey, and good morning to everyone on the call. We believe we've made important strides in the first quarter of 2023 that bring us ever closer to launching the AeroVanish, a lightweight, low-speed electric vehicle, or LSEV, with adaptable and reconfigurable payloads that will serve the stadium, arena, campus, resort, and last-mile delivery environments, both indoors and out. In the last few earnings calls, we have gone to considerable lengths to lay out the business case for our product roadmap, and to provide some context to our corporate strategy. From the outset, we recognize that while an 18-month design and manufacturing scale-up process is actually remarkably short in the automotive world, to many investors, it may as well be four years. Our team is enthusiastic about what we've already accomplished, and even more so at the significant opportunities that we believe lie just ahead of us. We've made real progress on the dealer front, and we've had encouraging discussions with potential fleet dealers. We believe our participation in a recent large trade show where many potential customers were able to see the Vantage firsthand for the first time has been very productive for us, and we hope to be in a position to share some developments arising from those marketing efforts. We believe we can establish new fleet relationships that could provide meaningful sales opportunities. The benefit of fleet partnerships is the high unit order volumes they can potentially provide us from the recurring fleet refresh cycle within their respective customer bases. A strong fleet partner can potentially equal dozens of standalone dealers without regard to territory exclusivity. That said, we're certainly focusing on signing up dealers under our dealership program. Earlier in 2023, we announced our first dealer indication of interest with Masters Golf and Utility Vehicles in Ontario, Canada. Since that announcement, we have signed many more dealers under our dealer program. And while we won't provide specific dealer counts, I will provide some context for this topic. Under our former relationship with Club Car for the Club Car current vehicle, Club Car had the potential to generate sales of the current from all of its approximately 450 dealerships. However, the reality was that only 42 dealerships out of this 450 ever generated a sale of the current throughout our multi-year relationship. For comparison, the number of locations operated by dealers with whom we are in discussions already exceeds 42, and we're in various stages of negotiation with many more potential future dealers. I hope that is helpful in terms of outlook on the dealer and fleet channels. On the direct-to-consumer, or DTC, channel, we're working to finish our e-commerce site and an on-site location in Florida to support our DTC efforts for customers to be able to customize and order the Vanish directly from Arrow in those states that allow DTC vehicle sales. Florida happens to be one of those states, and we believe it is a large potential market for the Vanish and our follow-on products, the PeopleMover we call the Valet, and what we believe is the world's most attractive golf cart called the Vapor. We expect our DTC capability to be ready to launch in the third quarter of 2023. Now I would like to talk about the status of the VANISH vehicle and just where we are in the process of bringing it to market. The VANISH will enter the homologation phase this week as we are just recently successfully completed a series of internal tests at a test track in Houston, Texas. The homologation process is a series of safety assessment tests on the vehicle can take up to 12 weeks depending on the queue of other vehicles also waiting on homologation. However, while homologation is occurring with the VANISH and in parallel with that certification process, we plan to enter low rate initial production or LRIP by early June to begin building the first 50 VANISH units. These units are largely earmarked for dealer floors as demo vehicles. The LRIP phase is used to ensure the supply chain is flowing smoothly and allows our manufacturing team to scale that learning curve of assembling the components and subsystems. Following LRIP, which we anticipate may take a month, we'd expect to begin full-scale production where we are targeting nine vehicles per day, five days per week under a single shift scenario. This would equate to over 2,000 vehicles per year of capacity under the guidelines mentioned above. Until homologation is complete, we anticipate holding back any finished inventory of VANISH units. We believe any delays or deferrals in customer shipments of the VANISH should homologation take longer than we would prefer are rather trivial in the big picture and would be unlikely to lead to order cancellations. As is always the case in first model year production, we expect and plan for supply chain uncertainties until all component suppliers are flowing in their product smoothly. Once in full production, we do have the ability and likely the intent, given some early signs of demand, to move to a second shift that can help us produce more output advantage units from our own manufacturing floor. Based on our current forecast, we anticipate moving to that production cadence as fast as possible post-LRIP. Even more significant than adding a second shift is our potential ability to source additional production of the entire VANISH vehicle from an OEM automotive component supplier that currently serves the big three automakers. That supplier also happens to be our chassis component supplier for the VANISH. Fortunately, they have production capacity at their facility to be able to handle the assembly of the entire VANISH vehicle should we choose to route any excess surge demand to them down the road. While this decision would likely come with initial startup issues, and a learning period from all parties that we would just need to accept, it does offer the potential for us to ramp our total production of units in a much faster fashion than a greenfield construction of a new manufacturing facility, at least at this point in time. So, we anticipate addressing any excess demand initially with a second shift, and then likely by resorting to our relationship with this OEM component supplier for any true surge in demand that would otherwise overwhelm our manufacturing facility. Needless to say, these would be very nice problems to encounter and address this early in the commercial launch of the Vantage. These so-called problems, and I use that term tongue-in-cheek, that we are now facing are simply the result of what we feel are the perceived quality and value proposition of the Vantage and advancements in a category that we feel has been quite stagnant for much too long. But you don't have to take my word for it, and certainly the market isn't appreciating this aspect either, apparently. Thus far in 2023, we've won two prominent awards for design from two separate market research companies. The first was in January of 2023 when Frost and Sullivan awarded us the 2023 North American New Product Innovation Award in the low-speed vehicle industry for the Vanish's design. And as if that were not enough, in April, we were named as a 2023 Red Dot Award recipient for product design for The Vantage based on its principles of good design and its sociocultural character, technical focus area, and design expertise. Many engineers and designers can go their entire career without winning either a Frost and Sullivan or a Red Dot Award. We won it on our first design after pivoting the company 18 months ago. That is a remarkable achievement, and I'm very proud of all our employees here at Arrow. One would expect that these validations of the design and value-add merits of the Vanish to translate into appreciable unit sales, and that is definitely what we're viewing this opportunity that is finally right in front of us. On the intellectual property or IP front, we continue to grow our portfolio, both in the rate of patent and trademark filings, as well as in the rate of grants by the USPTO. We believe the combination of our anticipated future sales and sales growth together with our growing IP portfolio should add sustainable shareholder stockholder value and provide numerous opportunities in this segment that otherwise hasn't evolved with prevailing technologies nor with market opportunities. In our 2022 year-end earnings discussion, I provided explicit guidance that revenue of the legacy Club Car current vehicle would be minimal in the first half of 2023, given the runoff of current inventory and the sunset phase of that vehicle. That was certainly the case in the first quarter, given our revenue of approximately $100,000. Quite simply, that phase of Arrow is in the past. and I've maintained all along that I believe future sustainable stockholder value will come from the future adoption of our new LSCV products, not from revenue of our legacy products. Hopefully, my comments this morning have painted a picture for Arrow that is as bright as ever. We continue to manage costs as effectively as possible, all while ramping our internal activities for the benefit of the Vantage and subsequently the valet in the vapor. Our net loss in the quarter, even with considerably lower sales of the current, was roughly the same as it has been over the last year. We believe our cash and equivalents balance of nearly $42 million will be sufficient for us to reach breakeven, according to our current forecast. That concludes my opening remarks. Now I'd like to turn the call over to Dave Hollingsworth, who will review our financial results in more detail. David?