Arcimoto, Inc.

Good afternoon, everyone, and welcome to Arcimoto's Q1 2022 Stakeholder Update webinar. To start, I want to call your attention to our Safe Harbor disclaimer regarding forward-looking statements. This note identifies risk factors that may cause our actual results to differ materially from the content of our forward-looking statements for the reasons we cite in our SEC filings. Today's format is going to be a bit different from prior webinars, as we have a lot of ground to cover, including the introduction of the two newest members of the executive team. So we are going to save the analyst panel for the Q2 webinar. We've folded answers to many of the questions that came in over the SAI platform, and we'll take a few more at the end of the call as time permits. So here we go. While we usually start with a long-form video update, in the interest of time, I asked Carl to compress the last decade and a half into 30 seconds of video narrative. After that short intro, I'm going to give a little bit of founder's perspective, talk about the leadership growth, financing, and the focus of our many shots on goal strategy into our first shot for the win plan for scale. followed by a factory update from Terry, the introduction of Dwayne Lum, Arcimoto's chief product officer, Lynn Yeager, Arcimoto's chief experience officer, and a Q1 financing and future look update from Doug. Arcimoto, we build light footprint, outrageously fun electric rides to transform how we live and move. Two platforms, many shots on goal. Daily driving and rentals, delivery and security, and the most advanced e-bike class vehicle in the world. A quad motor tilting trike that flies the road like no other and can be recharged while stationary. We've been producing for two years, and it's time to ramp it up to mass production and deliver on the Arcimoto endgame of the robo-valet and a sustainable transportation system for the world. All right. Short and sweet. So I just want to give you all a little bit of founder's perspective. I said it ramp it up and I'll say it again. ArcAuto is an ultra marathon being run by a 270 strong team who wear the brand and a whole host of critical industry partners powered by a community of stakeholders with whom we share the vision of a truly sustainable transportation system. Our pace continues to accelerate, and I want to start by thanking each and every one of you for all of your hard work and support over these last 14 and a half years, and for your continued commitment to finishing the run. I have been asked on a number of occasions, what is the biggest challenge for Arcimoto? And to be clear, building an EV endeavor from prototyping to get the right idea through product development, regulatory compliance, and initial production to constructing the right business models and scaling approach is an incredibly difficult and complex undertaking. And while each of those elements provides a significant challenge, perhaps the biggest challenge from my vantage point is one of leadership, making sure that all of us are rowing in the same right direction, even as we take on more in parallel and dramatically expand the team. And that's why, just as an anecdote, I am pleased to report that Friday, I had the best executive meeting in the history of Arcimoto. And I believe that we now have the right top-level leadership in place to accelerate through the next big steps of the company's growth. See, this is a result of a few things. our focus on building a winning culture, defining and enhancing our shared values, paired with a deep focus on process, how we communicate and work together across the organization, and the recruitment of incredibly talented veteran industry executives focused on each of the key initiatives that are driving the path forward. We introduced Kevin O'Rourke, our new VP of Commercial Operations and Strategy on the last call, and we'll be introducing the new Tuas members of our executive team during this call. So before I get to that, a lot of the questions that came in were related to the financing of the venture. And so I want to clarify and further expand on some of what we talked about last call. A number of you have been looking for more answers. So I thought I would further clarify the approach. So with partners, Arcimoto has put in place a multi-pronged financing strategy for growth. The foundation of this approach is the at-the-market facility we put in place with Canaccord Genuity at the beginning of the year. This ATM allows the company to sell shares into the market at the current market price. This foundation allows us to access liquidity at will at times we think are favorable to the company and to our stakeholders, as well as avoid the toxic financing structures that are endemic to the microcap market. The next piece is the long-term convertible structure we put in place last month that allowed the company to onboard additional capital on terms we believe are favorable to the company and to our stakeholders, and that introduced no near-term dilution to shareholders. The final piece of our near-term capital formation strategy is a program we call Project Ascent in collaboration with Ducera Partners. Ducera is a leading investment banking advisory practice that has advised more than $750 billion in transactions since its founding in 2015. Arcimoto's lead director and Ducera partner Josh Scherer has been on the Arcimoto board since 2018 and has helped guide the company through incredibly turbulent times and growth from a pre-production vehicle startup to where we stand today. Members of the Ducera team have been long-term investors in the company with real skin in the game. Newstera will be leading the approach we articulated on the last call to put in place the right funding mechanisms for the long-term growth of the company. Specifically, we're aiming for the right tools for the job. Debt financing for real estate, real estate improvements and capital equipment, fleet financing for Arcimoto-owned vehicles, and long-term equity with strategically aligned partners. Longer term, as most of you know, we are further targeting the federal government's advanced technology vehicle manufacturing loan program for additional financing of the mass production of the fully enclosed two-seat consumer Arcimoto vehicle and are in the pre-application process for what we believe will be our final application to this program. As we discussed on the last call, we see the ATVM funding as being appropriate for the acceleration of scale starting next year. The preparation for this overall capital formation strategy has involved an incredible amount of work on the development of the mass production plan for the company, as well as market research and our commercialization approach. And I'm very excited about the opportunity we have crystallized. One aside related to the capital structure of the company, as a matter of best practices, Arcimoto has engaged a compliance driven SaaS provider to track and monitor its shareholder ownership and trade settlement. We wanna make stakeholders aware that ownership and settlement analysis over nine months suggests there are sizable and persistent settlement fails and imbalances in Arcimoto stock. We have identified a handful of banks, broker dealer and clearing firm participants that feature the most persistent and significant settlement imbalances and we've begun a communication strategy to both alert these firms and request explanations for and resolution of these imbalances moving on as many of you are aware Arcimoto's core product strategy revolves around our unique EV platform that packs significant carrying capacity on a lightweight small footprint foundation that shares the vast majority of its parts with every variant of that platform. As we laid out earlier this year, The key to achieving platform scale, first and foremost, is to make the platform itself more scalable, an initiative we call 1.X. We are on track to have the first 1.X prototypes on the road later this spring, focusing first on ride, suspension, and steering. I want to acknowledge all of the hard work done by the Arcimoto team and our critical industry partners, Monroe & Associates, Stoffel Systems, DW Fritz, and our many supplier partners to help us hone in on this winning scale three wheeled EV platform for the future. The second piece. of the push to the next big step up in scale is a focusing of our many shots into a first shot for the win approach. The discussions we are presently engaged in with leading fleet management companies and large scale commercial clients that are operating with global footprints lead us to believe that the Deliverator is the correct focus for this first shot. The rapid growth of the last mile delivery market coupled with the fleet mandate for environmentally responsible products and the unique characteristics of our product further confirm this approach. To that end, I'm very pleased to welcome and introduce Duane Lum, Arcimoto's Chief Product Officer, who is driving this first shot on win effort to bring the Deliverator to scale production on platform 1.x. Duane.

Welcome to Arcimoto. Thanks, Mark. And thanks to all of the stakeholders for your continued support. In my many years of product development across a number of industries and customer segments, I've learned that ideation and innovation are not synonyms. The former deals with the generation of ideas, while the latter deals with their implementation. And the object of innovation is success. Whatever the goals of a business may be, it must make money. To do that, it must get things done. Ideas do not implement themselves. People do. And it takes an organization with know-how, energy, daring, and staying power to implement those ideas. I believe at Arcimoto, we have these ingredients and it's incumbent upon us to deliver the right mix to the company, to take the company to the next level. And we are. My colleague, Kevin O'Rourke mentioned on the last earnings call and Mark just called the first shot for the win by tailoring our products to suit the needs of business customers. We can offer commercial customers substantially lower vehicle acquisition costs, decrease in annual vehicle maintenance, eliminate expensive fossil fuels, and increase their bottom line. For many of our current owners, this is also true. And as we enhance our product mix, add capabilities, reduce the cost, and develop new platforms, we will intensify the use of our product lifecycle thinking. We'll leverage market-based instruments and improve professional service reliance, as well as enable other key strategies. Arcimoto set forth on a journey to change the way the world views sustainable transportation. Let's revisit something from our ramp it up event. With the same material and in some cases cost, consumed to produce one conventional vehicle, we can produce eight FUVs or 100 mean lean machines. So we're not only materially benefiting customers bottom line, we're right-sizing the footprint of transportation while doing so. So how can we build on this? Well, without disclosing future product plans, that is. No matter the business, there's common critical factors in the most successful product development processes. One, product development is a team game. We're leveraging interdisciplinary teams to focus on our development efforts. Two, process is key. We're applying the use of structure to order and discipline the ascension from ideation to development and launch. Three, speed to market. Agile practices help us produce new and marketable products more rapidly, often making the difference between profitable and non-profitable activity. And lastly, number four, listening to the market. During all stages of development, we will engage directly with those who can influence our direction the most. And at the moment, we're actually acting on some of those key inputs with a strategic cost down initiative, enabling us to offer our products at a new price point and serve even more customers. Taken together, these four disciplines will help Arcimoto deliver great product experiences to the variety of customers we can serve. I appreciate your time today. We look forward to expanding on our drive to innovate in the future venues that we have. Thank you.

Thank you, Duane, and very glad to have you on board. In just the short time that you've been here, we've continued to see an acceleration on the product development front, and I think we've got great things ahead. I want to shift gears from the future to the present moment and our current product family, specifically focused around our maturing fun utility vehicle and the push to really hone in and streamline the customer experience from when you first hear about an Arcimoto all the way through all of the touch points to trying it, buying it, and taking care of it over time. And I'm very pleased to introduce Lynn Yeager, who comes to us again with deep industry background and expertise. Lynn is now, I see behind you, our San Diego Rental and Experience Center. And Lynn, in just a couple of short weeks, has already made a significant impact on our customer experience processes. And we expect that pace of awesomeness to continue. So Lynn, say hello to our stakeholders.