AYRO, Inc.

Ladies and gentlemen, thank you for standing by. Good morning, and welcome to ARO Incorporated third 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 your question, 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 February 21st, 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, Jason. 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 these 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 and 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 an isolation or as a substitute for results prepared in accordance with GAAP. For a reconciliation of this non-GAAP financial measure to net loss, its 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, November 21st, 2023. Except as required by law, AERO 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 Wittenschlager.

Thanks, Joey, and good morning. to everyone on the call. The third quarter's milestones have marked the beginning of manufacturing and sales of the initial AeroVanish units. At the time of our last earnings call in August, we were waiting on final testing and homologation results. Well, I'm happy to say that we successfully completed all elements of testing involving product safety and emissions. Since then, I've received all requisite certifications that allowed us to transition into low-rate initial production, or LRIP, of the AeroVantage with full confidence in the third quarter. We've already placed the first handful of units from LRIP with potential customers, distributors, upfitters, and potential strategic partners, and will continue to do so for the remainder of 2023 with additional units produced in the LRIP. The purpose of these strategic placements is to leverage the initial advantage advantage units produced with potential customers that have what we deem to be the highest potential for purchased orders in early 2024 and beyond. We firmly believe that the best way to see and appreciate the advantages of advantage over competing low-speed electric vehicles is to have access to one or more advantage units and to immerse it in a working environment for a sufficient length of time. We believe The Vantage drives and handles in a manner unlike competing vehicles with technological and ergonomic advantages and has unparalleled payload flexibility in the class. Prospective partners, customers, and regional business executives that participated in our test drive event held here in October at our Round Rock headquarters were able to get a sense of the Vantage's unique advantages, and our team is following up on those interactions. It is important to realize that the VANISH units being produced in LRIP fall under what's called prototype pricing. This means that select machinery and equipment currently being used to produce the VANISH components are different than what will be used once we enter full-scale production. Generally speaking, tooling and methods used in prototype production are less expensive than those used in full production, as the purpose is not necessarily to produce units in a cost-effective manner. It is to produce a minimal quantity of the finished units with minimal upfront equipment or tooling costs. This also means that the components being used in our LRIP phase generally cost more than what's expected for full production. This two-stage approach to manufacturing is quite typical in the automotive industry in order to defer the cost to tool-up dyes and molds and so forth in preparation for full production. In our case, the transition from prototype equipment components and cost structures to full production equipment components and cost structure is expected to happen near the end of 2023 and into the first quarter of 2024. This means that the underlying cost of goods sold for each managed unit should decline substantially from the current prototype cost structure to a more appropriate and more profitable cost structure as production ramps. Gains from the use of production tooling, along with volume leverage and manufacturing learning curve improvements, should allow us to produce more profitable vehicles in each subsequent quarter as we progress with production. Under this general roadmap, and assuming no major disruptions in our supply chain, we believe we can reach breakeven during the second half of 2024. In addition to completing homologation and entering LRIP, we also reached another major corporate milestone in the third quarter with the recognition of first revenue from the AeroVantage. Cruising Kitchens, one of our food and hospitality upfitters, officially took delivery of a few of the very first Vantage units towards the end of the third quarter. As I've discussed for quite some time, the ability to install hot and or cold boxes as a payload option opens up a very large market in the hospitality industry. We believe we will receive more orders targeted for the hospitality industry to go along with the orders targeting the campus, arena, and last mile environments. Whether it be with our standard flatbed configuration that is the base option of the Vantage, a traditional encapsulated pickup bed, or a powered or unpowered box configuration as typically seen in the hospitality industry, The VANISH addresses a very, very wide range of applications across many industries. In addition to offering traditional purchase options of the VANISH units, we're also receiving inquiries about lease options. Notably, these inquiries are coming from corporations that may want a fleet of VANISH units on their campuses for a myriad of uses. Thus, we're trying to accommodate such potential customers with acceptable lease structures for all parties. At Arrow, flexibility doesn't just apply to our payload ability, as we are more than happy to help corporate clients find ways to buy a fleet of vanished units. We expect to have more to say about corporate interests down the road. On the intellectual property front, we continue to be awarded design and utility patents, including four that were awarded in the last 90 days. Our team's innovation and creative foresight continues to be exemplified through these patent awards. And we believe our growing IP portfolio will ultimately create a sustainable advantage over our peers in the LSEV space, as well as adding enterprise value to Aero's core business. With respect to our product roadmap, we expect to resume the development of our next vehicle offering, the people mover we call the Valet, and the sleek personal transport vehicle, or golf cart if you want to call it, called the Vapor, in 2024. Turning to the financial results for the third quarter of 2024, as I mentioned previously, we recognized our first revenue from our new common core chassis platform, the Vantage. Furthermore, all revenue moving forward will be from the Vantage, its modular payloads, and any subsequent vehicle designs based on that new platform as the company's club car current inventory has been depleted. The cash burn in the third quarter was consistent with the prior couple of quarters, and given the financing in August, our cash balance at the end of the third quarter was $47.9 million. We consider the current cash balance to be more than sufficient for us to reach breakeven, which is anticipated in the second half of 2024. This 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.