Envirotech Vehicles, Inc.

Good day, ladies and gentlemen, and welcome to EnviroTech Vehicles Incorporated's third quarter 2022 earnings call. All lines have been placed in a listen-only mode, and the floor will be open for questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to Mr. Eduardo Royes, Managing Director, ICR. Eduardo, the floor is yours.

Thank you, Jenny. Welcome to Envirotech Vehicles Third Quarter 2022 Earnings Call. With me on the call are Philip Oldridge, Chief Executive Officer, Susan Emery, Executive Vice President, and Christian Rodich, Chief Financial Officer. I would like to 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 at the date of this call. Envirotech does not take 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 the projected results or events will be achieved. So with that, I will turn the call over to Phil Aldridge, Chief Executive Officer of EnviroTech. Mr. Aldridge, please proceed.

Thank you, Eduardo, and welcome everybody. As we look to build greater awareness in the public markets following our July uplisting to the NASDAQ capital market, I will begin with a few words about EnviroTech vehicles and what makes us special before I view the highlights from the quarter. At EVT, we provide zero emissions purpose-built vehicles for light and heavy-duty commercial fleets. Our vehicles are competitive in the marketplace. We are building vehicles for the everyday worker and the company that simply wants to get the job done. These folks don't want a bunch of bells and whistles. They want a safe, durable vehicle for a seamless transition from internal combustion engines into vehicles, EV vehicles. Our fleet today is comprised of class three through five urban trucks, a logistics van available in both traditional left-hand drive and right-hand drive configuration, and a cutaway van. As we look ahead, our portfolio continues to expand. Our Class 6 truck should be coming to the market in the next few months. And we have an electric school bus that is also on track to be in the market in the first half of 2023. Our first five school bus chassis are complete and in the final stages of testing at this time. We have soft orders for these vehicles, including from school districts in Arkansas, that we are awarded funds as part of the EPA's $1 billion clean bus grant round announced just last month, which Sue will talk about more. We are also seeing interest from school districts and numerous other states as well. Our vehicles are 100% homologated to the National Highway Transportation Safety Administration, or NHTSA. Our business model from day to day has revolved. around targeting small business and fleet owners and selling through a dealer network. We currently have several factory authorized reps across the United States with Arkansas' own DaVinci Innovations or DVI as our in-state dealer. DVI has ordered 100 vehicles this past summer and is seeing strong customer interest. Other states to note include California, New Jersey, and Florida as we leverage in-state voucher programs. Turning to an overview of our operations in February, we entered into a lease with a purchase option for our 580,000 square foot manufacturing facility in Oakland in Osceola, AR, which is where we are based. The facility is being refurbished and upfitted for a full EV manufacturing production assembly. Today the facility is set up for final assembly with our first vehicles to complete final assembly in the facility rolling out. In the in the second quarter at the end of the second or third quarter of 2023. We expect to begin manufacturing vehicles at our facility by mid 2024 with the potential to eventually produce at least 10,000 EVs per year. Once we begin to manufacture vehicles at facility in 2024, Envirotech will begin generating EPA carbon offset credits in 2025 and beyond. We believe our Arkansas land location and facility is strategically advantageous for several reasons, including one, Significantly better than average access to an experienced manufacturing workforce. Two, proximity to critical suppliers. For example, we have the largest steel mill less than Enterprises, big and small, ramp up their electrification plans to meet the increased societal and governmental pressures in the battle against climate change. Now turning to the highlights from the third quarter. In support of our bullish view of our business, we saw momentum and continued to build during the third quarter. After delivering 21 vehicles during Q2, we delivered 37 vehicles during Q3, falling modestly short of our expectations due to only shipping delays. This compares to only eight deliveries in the third quarter of 2021 and brings our total year to date deliveries to 70. As of the end of the third quarter, we had 108 units and backlog comprised of 57 vans and 51 trucks and with an estimated total value of 9.7 million. We are proud to have generated a profit in the quarter, the first in our company's history. In our view, this is an impressive feat for our size, and given the various operating headwinds we are seeing across the industry, our ability to generate a profit not only reflects the increase in volumes, but is also a testament to the strength of our supplier and partner relationships, and to the fact that we run a lean, cost-focused operation, which starts at the top with myself and the leadership team. Further, since our last quarter earnings call on August 15th, we have some exciting wins. This includes a, or one, a purchase order from San Diego-based Coastline Marine Services for three zero-emissions high-roof logistics vans for use in the shipyard and port operations, of which we delivered two vehicles in October, and two, the deployment of of what we understand to be the first electric prisoner transport van in the United States via our partnership in the greater Atlanta, Georgia metropolitan area. This use cases our vehicles is seemingly limitless. We continue to see wins such as these generate more and more inquiries. For example, we've seen and have had several other sheriffs, departments, and offices expressing interest in our prisoner transport van. There is nothing like having vehicles on the road to demonstrate our value proposition. It creates a snowball effect that we believe can only be led to ratcheting up interest and demand for our vehicles. I am truly excited about what we are doing at this company, and there is nobody better place to provide more color on our secular tailwinds and strategic initiatives than Susan Emery, our Executive Vice President. So with that said, the floor is yours, Susan.