Envirotech Vehicles, Inc.

Good day, ladies and gentlemen, and welcome to your EnviroTech Vehicle Incorporated second quarter 2022 earnings call. All lines have been placed in the listen-only mode, and the floor will be open for your questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to Ms. Jen Belladeau, VP of IMS Investor Relations. Ms. Belladeau, the floor is yours.

Thank you, Operator. And once again, good day and welcome to EnviroTech Vehicles' second quarter 2022 earnings call. Let me begin the call by reading the Safe Harbor Statement. All statements made on this call, with the exception of historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although EnviroTech believes that the expectations reflected in such forward-looking statements are reasonable on the basis of current expectations, Envirotech can make no assurances that such expectations will prove to be correct. Also, these forward-looking statements are subject to a number of risks, uncertainties, assumptions, and other factors that could cause actual results to differ considerably from Envirotech's current expectations due to changes in operating performance, technical and economic factors, and other risks and uncertainties disclosed in Envirotech's annual report on Form 10-K, quarterly reports on Form 10-Q, and other reports filed by Envirotech from time to time with the Securities and Exchange Commission. Any forward-looking statements included in this earnings call are made only as of the date of this call. Envirotech does not undertake any obligation to update or supplement any forward-looking statements to reflect new information, subsequent events, or circumstances, except as required by law. Envirotech cannot assure you that projected results or events will be achieved. Now I'll turn the call over to Christian Rodage, Chief Financial Officer of Envirotech. Please go ahead.

Thank you, Jennifer. Phil is with us today. He is on the call, but he is with his terminally ill mother right now in Canada, and our hearts, thoughts, and prayers go out to him and his family today, and we wish him nothing but the best, and I will begin. Second quarter was truly a breakout quarter for Envirotech vehicles. As we saw a significant uptick in vehicle deliveries, which drove the substantial increase in Revenue, both year over year as well as sequentially, when compared to first quarter of 2022. During the second quarter, we delivered 21 vehicles compared to just two vehicles delivered in the same period of the last year. And to date in 2022, we've delivered 33 vehicles. So we're seeing strong momentum, which we intend to build upon. To give you some more color around our shipment activity, as we mentioned on our last call, during the first quarter, we ordered 100 Class 5 cabs, and chassis trucks and 100 Class 4 vans with deliveries beginning in Q3. We anticipate deliveries will continue through the end of the year with final assembly at our new facility in Osceola, Arkansas. The Class 5 trucks are in high demand, and we are pleased to have the ability to provide those to the marketplace. We're seeing increasingly strong order volume for our electric trucks and vans across the board. as more businesses and municipalities look to begin transitioning their fleets to a cleaner alternative. For several months now, we've seen the benefits in the form of heightened interest and voucher approvals from our status as an approved vendor for state incentive programs like the New Jersey Zero Emission Incentive Program, or NJZIP. With the Senate's passage of the Inflation Reduction Act last week, with provisions including a new commercial clean vehicle credit, we believe the industry will see a game-changing acceleration in the switch to clean energy fleets. We are very optimistic about the ongoing evaluation, I mean evolution, from combustion engine fleets to electric trucks and vans and believe that EVT is extremely well positioned to continue to benefit as the pace of transformation gains speed. Renovations continue at the Osceola facility and we're excited about the progress we're seeing every day. As we've mentioned, We chose Osceola for its proximity to highly capable regional workforce, as well as its favorable location close to the Mississippi River, as well as several interstates, which provide us flexible shipping alternatives. In addition to these attributes, we've received strong support from the state, and we recently announced our partnership with the Arkansas Economic Development Commission and will provide EVT, with an economic incentive package valued at up to $27 million. With our operations in Osceola, we're only a licensed vehicle manufacturer in the state. We've also recently expanded our sales presence by adding Jonesboro-based DaVinci Innovations as our first commercial electric vehicle dealer. Our goal is to continue adding strong partners to create a robust dealer network for the sale and distribution of our heavy-duty electric trucks and vans to fleets across the state of Arkansas. Finally, in early July, EVT uplisted to the NASDAQ capital market, a milestone achievement for the company. And this uplisting has been a very long time in the coming ambition of many of our founders and Phil himself. He was very thrilled for this opportunity to ring the NASDAQ opening bell with other members of the team. and the board, the uplisting is a culmination of heavy lifting and hard work that has driven our considerable growth over the past year, highlighted by exceptional increased sales numbers, multiple completed deliveries, and construction of our new manufacturing facility, and our successful efforts to attract new customers. We believe our presence on NASDAQ will enhance our visibility and brand recognition in a marketplace and introduce EVT to a broader audience of investors. concluding this section of the presentation. As we move through the back half of 2022, we're energized about the opportunities we're seeing and remain focused on driving operational execution to ramp production and get more of our commercial EVs on the road to our customers. This is an exciting time for our industry and our company, and we look forward to growing our leadership position as a premier provider of zero-emission trucks and vans and as a facilitator of the evolution of a greener commercial transport. And now I will go into the financials. Sales for the quarter were $2,087,700 for the three months ended June 30th, 2022, compared to only $188,266 for the three months ended June 30th, 2021. The sales increase was primarily related to the sale of the 21 vehicles noted earlier versus the two vehicles in prior year. For the six months ended June 30th, 22, sales were $3,196,200 compared to the $659,059 in the same prior year period. Total net operating expenses for the second quarter of 22 increased by approximately $902,000 compared to the second quarter of 21. The increase in expenses during the quarter is primarily related to our sales and marketing efforts as well as ramped up research and development and engineering costs related to our new school bus offering and Class 5 truck, which we expect will be available by the end of the year. We also added headcount in the second quarter as we continue to ramp up production and operations. For the first six months of 22, total net operating expenses were $4,780,714 compared to $1,527,507 in the first six months of 21. This includes approximately $1.65 million of non-cash charges related to stock-based compensation expense and depreciation expense here in 2022. Net loss in the second quarter for 22 was approximately $1 million, or a loss of 7 cents per basic and diluted share, compared to a net loss of approximately $900,000, or a loss of 6 cents per basic and diluted share in the second quarter of 21. For the first half of the year, net loss was approximately $3.5 million or a loss of $0.24 per basic and diluted share compared to a net loss of $1.6 million or a loss of $0.19 per basic and diluted share in the first half of 2021. As of June 30th, the company had cash, cash equivalents, restricted cash, and marketable securities of approximately $6.4 million. Total liabilities approximated $1.1 million. and working capital was approximately $20 million. This concludes my remarks on the financials, and we can now open up for questions. Thank you.