Vicinity Motor Corp.

As a reminder, this conference is being recorded. Before we begin the formal presentation, I'd like to remind everyone that statements made on today's call and webcast, including those regarding future financial results and industry prospects, are forward-looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. Please refer to the company's regulatory fillings for a list of associated risks, and we would also refer you to the company's website for more supporting industry information. I would like now to hand the call over to William Treanor, founder and chief executive officer of the Semitic Motor Corp. William, the floor is yours.

Thank you, Operator. And good afternoon, everybody. I'm pleased to welcome you to today's second quarter 2022 Corporate Update Conference Call. The second quarter of 2022 was marked by additional sales and distribution wins for our portfolio of electric vehicles, further validating our transition to electric vehicles. This traction is a testament to the incredible interest and support we're receiving from enterprise customers and government agencies. From new government incentives for EV adoptions to new financing strategies such as the Sustainability Partners electric vehicle as a service program, the market is quickly optimizing for an electrified future. Taken together, our backlog grew to over 90 million U.S. dollars, the majority of which are for electric vehicles. We delivered 34 vehicles in the second quarter, surmounting supply chain issues in some areas while facing new obstacles in others. The global automotive industry supply chain continues to be stretched. Until such time that it catches up to demand, we'll continue to work to engineer creative new solutions to address new problems as they arise. Our goal is to continue to provide vehicles to our customers despite this environment, and we will continue to do so to the greatest extent possible. That being said, given the pressures we are seeing, we are suspending our prior financial guidance as a current supply chain environment makes it difficult to forecast, and it appears many orders may be pushed from 2022 to 2023. Our Ferndale, Washington facility is nearing completion, helping us to meet customer demand and capture market share in the U.S. with an American-built, Buy America-compliant product. We also plan on making this the new home to support our electric industrial truck line starting with the VMC-1200. We continue to expand our distribution across the United States during the second quarter as well, adding strategic dealers in Hawaii, the Pacific Islands, Alaska, Washington, Oregon, Idaho, Michigan, Indiana, Ohio, and the entire central region of the U.S. The expanded territory will help us build additional traction from established dealers to offer customers on all electric options that mitigate exposure to energy and carbon costs while providing the range, speeds, and gradability required in daily real-world operation. Now with that, I'll turn it over to Dan to review the financial results for our quarter-ended June 30, 2022. Dan?

Thank you, William. Good afternoon, everyone. I will constrain my portion to a brief review of our financial results. Full breakdown is available in our regulatory filings and in the press release across the wire after market closed today. Please note I'll refer to adjusted EBITDA and other non-GAAP measures. For the calculation of adjusted EBITDA and other non-GAAP measures, please refer to the Q2 MD&A, which is available on CDAR. In addition, all figures are in U.S. dollars unless stated otherwise. Revenue totaled $11.7 million in the second quarter of 2022. as compared to $15.5 million in the second quarter of 2021. The decrease in revenue was primarily driven by the delivery of 34 vehicles in the quarter, compared to 46 deliveries in the second quarter of 2021. Revenue totaled $14.9 million for the six months ended June 30, 2022, as compared to $37.1 million in the six months ended June 30, 2021. Company delivered 40 vehicles in the first half of 2022, as compared to 113 deliveries for the first half of 2021, with the decrease primarily a result of global supply chain disruptions. Gross profit in the quarter ended June 30, 2022, totaled $1 million, or 8.7% of revenue, as compared to $1.7 million, or 11.1% of revenue, for the quarter ended June 30, 2021. Gross profit totaled $1.2 million, or 8.3% of revenue, for the six months ended June 30, 2022, as compared to gross profit of $5.1 million, or 13.8% of revenue, for the six months ended June 30, 2021. Gross margins were affected by product mix and the low volume of buses delivered. Shipping difficulties and global supply chain disruptions and the availability of chassis for our VMC Optimal products and certain bus components continue to delay deliveries. Cash provided by operating activities in the six months ended June 30th, 2022 totalled 0.2 million as compared to cash provided by operating activities of 12 million in the first half of 2021. Net loss in the quarter ended June 30th, 2022 was $3.8 million or 10 cents per share. As compared to a net loss of $0.3 million, or one cent per share, in the second quarter of 2021. Net loss for the six months ended June 30, 2022, was $6.7 million, as compared to net income of $1.3 million for the six months ended June 30, 2021. Adjusted EBITDA loss for the three months ended June 30, 2022, totaled $1.3 million, as compared to an adjusted EBITDA of $0.2 million in the same year ago quarter. Adjusted EBITDA loss for the six months ended June 30th, 2022 was $3.3 million as compared to an adjusted EBITDA of 2.3 million for the six months ended June 30th, 2021. Cash and cash equivalents as of June 30th, 2022 totaled $9.4 million as compared to $4.4 million as at December 31st, 2021. We have a strong balance sheet, are well positioned to execute, and the fundamentals of our operations remain strong. While we have suspended guidance for the full year 2022, given an uncertain supply chain environment, demand remains very strong, and we are well positioned for a high level of operational execution in 2023. I'd now like to pass it back to William to offer some closing remarks, after which we will begin our question and answer session.