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spk00: Good morning. Welcome to TIGA's third quarter 2021 conference call. Joining us today are TIGA's CEO, Sam Bruno, and CFO, Mark Orsmond. Following their remarks, we will open the call for your questions. Then, before we conclude, I'll provide you the necessary cautions regarding the forward-looking statements made by management during this call. I would like to remind everyone that this call will be recorded and made available for replay via a link available at the investor relations section of the company's website, at ir.tigamotors.ca. Now, I would like to turn the call over to TIGA's CEO, Sam Bruno. Sir, please proceed.
spk03: Thank you. Welcome, everyone, and thank you for joining today. Before the market opened, we issued a press release announcing our results for the third quarter ended September 30th, 2021. A copy of the press release is available in the investor relations section of our website. I encourage all listeners to view our release for additional information on what we'll be discussing today. And with that, we'll get started. Before we begin, I do have a quick note. Earlier this week, we announced via press release that we'd be making a transition on the CFO position. Effective next week, Derek Bouchard will be joining Tiger as our new CFO. Eric will be taking over from our current CFO, Mark Orsman, who has agreed to remain on board as an advisor through November to ensure a smooth transition. I'd like to take a moment to recognize Mark for as many contributions since joining us this past year. His hard work and dedication has helped guide us on our journey from a startup to becoming a publicly traded company, and we wish him the best in his new pursuit. Now, understanding that many of you might be used to the entire story, I'd like to begin with a brief overview of our business. After that, I'll discuss operations from the quarter, and then I'll turn the call over to Mark to discuss financial results for the period. Following Mark's commentary, I'll come back on to provide closing remarks before turning the call over to questions. Let's get started. Since the company's inception in 2015, Tyga has been leading off-road power sport electrification by taking on the challenge of engineering electric powertrains and vehicles from a clean sheet up to deliver performance, reliability, and cost in vehicles operating on some of the harshest terrains on the planet. What sets us apart is our thousands of proprietary parts designed from the ground up, including our motors, inverters, battery modules, packs, electronics, thermal management systems, chassis, and software, all optimized together to offer leading power to weight ratios and durability in extreme off-road conditions. And it is that technology and our ability to innovate unconstrained from legacy combustion products that continues to create a significant pioneering advantage for Tyga in leading power sport electrification. As a reminder of our business strategy, today we are currently focused on ramping up production for both electric snowmobiles and personal watercraft that share the same Tiger powertrain. To get these products to market, we employ a four-pillar approach. The first two pillars are the core of our business and are, first, the direct sales of our snowmobiles and personal watercraft to recreational customers. Second, the sales of our vehicles to fleet operators, such as ski resorts, tour operators, commercial fleet operators, and the energy, resource, and transportation industry. The other two pillars of our business business. Certainly, the third pillar revolves around supplying our modular powertrain assemblies to OEMs and adjacent industries. Our multi-generation powertrain is a modular hardware and software platform that is designed to simplify production and assembly and decrease development time for both Tyga and our OEM partners. This approach broadens the scope of Tyga's efforts to electrify off-road vehicles. And lastly, we engage in aftermarket sales of parts, upgrades, apparel, and other accessories. With that overview completed, I'll now get into recent updates from the quarter. I'll begin by saying that the third quarter of 2021 was marked by transformational growth and several milestone achievements for Tyga. We officially passed 2,600 pre-orders across product lines as of October 31st, continued to build our fleet customer base, and added several key leadership positions and made continued progress as we look to ramp up our production capacity with a goal of beginning initial customer deliveries in the coming months. A standout moment for the quarter was being able to offer ORCA carbon test rides to customers and media on the St. Lawrence River on the shores of Montreal. Feedback was overwhelmingly positive. ORCA was highlighted as a new category of watercraft, one that is 100% electric, powerful, quiet, and fun to drive, reinforcing it has been in a class of its own. While we are moving quickly to take advantage of our first mover status in a new product category, Significant time and resources are being deployed to ensure we have the proper infrastructure, processes, and leadership to scale, create and fulfill worldwide demand. In support of our deliberate approach to growth, we have chosen to predominantly focus on three key areas of our business for the foreseeable future. The first is product and manufacturing innovation. Our teams have been working hard to ramp up production, navigating the current global supply shortage with agility and keeping us on track to begin initial deliveries in the next few months. Our second point of focus is on continuing to build a world-class team to deliver on our ambitious roadmap, pioneering electric power sports. This quarter, we made key additions to our executive team and continue to increase headcount across various departments to support our long-term growth goals. And the third area of focus is on growing worldwide pre-orders. Confirming public earlier this year, we've seen an increased awareness and interest in our products from fleets and individuals alike. The demand for electric power support solutions continues to grow. By executing in these three areas, we believe we can fulfill our mission to accelerate electrification of the off-road power support industry. I'll take a minute now to discuss updates within these initiatives more fully, beginning with manufacturing. Wrapping up operations towards production remains the main focal point this quarter, and we made meaningful progress. Currently, we remain laser focused on delivering the first watercraft and snowmobiles by end of this year. Production capabilities have been progressing as planned in Montreal at our 133,000 square foot facility as pilot vehicles, battery packs, and tractive unit lines have been installed. In response to global supply chain shortage, we have accelerated strategic insourcing and automation to decrease cost of goods and increase throughput to ramp up and meet Tyga delivery targets. This production-dedicated facility is situated near Tyga's secondary advanced R&D building for rapid manufacturing integrations during its initial ramp-up phase. In service of our expanded manufacturing plans, in July, we announced having received $50 million in government funding for our future mass production assembly facility in Chevalier, Quebec. Once fully operational, we expect this factory will allow Tiger to become the first Canadian EV manufacturer to integrate both automated electric powertrain assemblies, electric vehicle platforms under one roof, which we anticipate will increase efficiency and flexibility. The facility is planned to have a capacity to produce up to 60,000 vehicles and 20,000 powertrain assemblies per year, representing over three gigawatt hours of battery pack per year by 2025. Moving to our current production effort. Our engineering groups have been hard at work navigating the challenges associated with global supply shortages, and we have managed capability through a challenging period. Because we take full ownership in developing our integrated powertrain platform, we have been able to make iterative design improvements to both our hardware and software components. More specifically, we've introduced proactive enhancements to our software, enabling us to fully operate in a hardware-agnostic environment, which better insulates us from dependency on specific parts, which might be in high demand. The upgrades we've made to our modular technology system this quarter simplify the production assembly process and decrease development time for new vehicle models. Through rigorous testing and implementation, our team have demonstrated incredible flexibility, responsiveness to make this vision and reality in such a short time. During the quarter, we also introduced our next-generation integrated motor inverter tractive units to be used in production of our snowmobiles and watercraft. This next-gen technology achieves approximately 3% higher efficiency and approximately 11% higher power density than the previous generation. As we lay the groundwork for scaling our operations, We're continuing to target best-in-class hires to execute our business plan, which is our third area of focus. This quarter, we made additions to our executive management team that positioned Tyga for success in its next phase of growth. Earlier this week, we announced the appointment of Eric Bichir as chief financial officer. Eric joins Tyga with nearly three decades of experience in finance and M&A, most recently serving as executive vice president and CFO of Uniselect, a $1.7 billion corporation with over 4,000 employees. Previously, he spent over 10 years with CAE, a global leader in aviation security and healthcare services, where he held various roles that culminated in the position of vice president of finance, simulation products, civil training, and services. Having served in an executive management position since 2005, Eric has built a successful track record as an executive at publicly traded companies with global operations, making him an ideal fit to lead Tigard's finance and strategic planning efforts that drive our mission to accelerate electrification of off-road vehicles. In September, we welcome Doug Braswell as Vice President of Electrification Operations. Doug is a senior leader who has held several global engineering and R&D management positions at John Deere, Articat, and most recently led EV product development at CNH Industries. In addition to overseeing the build-out of the mass production assembly facility, he is responsible for overseeing Tiger's strategic growth in new vehicle platform launches and the acceleration of third-party vehicle platform electrification with their powertrain supply business. Doug's expertise in the power sport industry and decades of experience leading innovative teams and already proven to be effective in designing our manufacturing processes for long-term agility and scalability. Moving to our final area of focus, which is expanding pre-orders, during the quarter we saw sustained growth across geographies and customer segments. As of October 31st, we've grown our combined pre-order book to 2,632 units, a more than 100% increase from the beginning of the year. We now have Over 130 multi-unit fleet pre-orders from over 80 unique fleet customers across the world. Corporate prospects include ski hill operators, search and rescue, and tourism organizations. Our strategy of selling vehicles solely through own channels has allowed us to better understand our customers' needs and implement feedback. We are currently in active dialogue with an additional 200 global fleet operators, with several expressing interest for pre-order sizes north of 500 units. Given the environmental impact and electrification of commercial operators and the greater ROI we can derive from this customer segment in the near term. To continue driving pre-orders and the adoption of electric off-road vehicles, we believe that it's vital that we have infrastructure in place to support customers, not just during the purchase process, but also for the life of our vehicles. An industry-leading charging network and access to maintenance are essential services we need to be able to provide at scale in order for our products to be viable. In service of that mission, this fall we officially launched our off-road charging network in North America, with the first on-water charging locations completed in Ontario and Quebec, and on-land sites set to launch in Quebec soon. Matching the regional demand I noted earlier, we have thousands of charging locations targeted throughout North America first, with the goal of unlocking 75,000 kilometers of off-road trails and waterways by 2025. The charging network will Mine fully harnessed renewable energy in hard-to-reach Arctic locations, high mountain peaks, and undisturbed natural waterways, giving Tiger customers the freedom to explore the outdoors while limiting their impact on the environment. The launch of Tiger's charging network marks a meaningful step towards large-scale adoption of electric vehicles, as access to charging in remote locations mitigates range anxiety among those considering the switch from traditional combustion engines. Lastly, this fall we launched our Ride the Current Tour, which is taking place across the United States. These multi-city events give reservation holders the public and media chance to experience the ORCA, our electric personal watercraft, firsthand. And with that, I'd like to turn the call over to our CFO, Mark Orvman, to go over the financial results for the quarter. Mark.
spk04: Thanks, Sam. Firstly, I just want to say that I highly appreciate your kind words, and I'm very grateful for the opportunity to have contributed to target success and growth and maturity into a public company. Tiger currently is in its strongest financial position it's ever been, and I'm very confident that the team that's been put in place is going to lead this company to the next phase of evolution. With that, this morning we issued a press release which discussed the results of operations for the third quarter, and additionally our financial statements included and those filings included our MD&A statements. We strongly recommend that you read both of those materials in more detail for any additional information that's not being discussed on this call. Now to our results. As a note, the following amounts are in Canadian dollars unless otherwise indicated. Tyga is in the final stages now of transitioning to commercial production. Of its next generation snowmobile and personal watercraft products and the absence of significant revenues primary due to this transition. These financial results should not be treated as long-term indicator of the financial health and future performance of the business. In search and development, our R&D expenses increased to $1.1 million and a further $2.2 million approximately was capitalized. So our overall spend was around $3.2 million as we put a lot of effort into our R&D to stay ahead of this curve. And that was in comparison $551,000 for the same period last time. The increase in R&D expenses will accelerate the number of employees that we are able to retain and attract and dedicate to staying ahead of this curve. And it will also put an increase in the company's production output, shifting from a small number of proof-of-concept units to really production-ready prototypes. General and administration or G&A expenses increased to 2.7 million from 163,000 the same period last year. This increase in G&A expenses were primarily attributed to the increase in the number of employees for administration purposes, as well as the production manufacturing. G&A saw an important increase in professional fees to help the company support its growth efforts. Sales and marketing expenses were approximately 1.1 million, which is a massive increase over the $32,000 for the same period last time. The increase in sales and marketing expenses was primarily attributed to the increase in the number of employees in this department, and they've done a fantastic job in positioning the company as it moves forward towards an aggressive digital marketing strategy that has upgraded its website, streamlined more robust e-commerce capabilities, And if anybody is following the company on LinkedIn and social media, you can just see how evidence that how well this department is working. Our net loss was at $5.1 million compared to $2.7 million for the same period last year. An increase in the net loss primarily related to the increase in expenses, as we noted previously. As of September 30, 2021, the company had approximately $110 million in cash and cash equivalents compared with $7.8 million at December 31, 2020. So, you know, really strong financial position we are in, and we've been very prudent in what we've been spending our money on. We believe our current cash is sufficient to go forward, and we do not see any additional funds needed to execute our current operational strategy. With this, it concludes my financial review. I'll turn back the call to Sam to discuss the further operations and outlook. Thanks, Sam.
spk03: Thanks, Mark. Since closing our SPAC transaction in April, we've been focused on getting our units into production. To that end, through the first three quarters of this year, we've increased headcount to 134 total employees with 30% growth in engineering since last quarter. Agility at scale has been our main consideration as we lay the foundations for our future. The recently announced launch of our North American charging network and the ongoing work to build our 80,000-unit facility in Schoeningen are prime examples of this plan in action. We've also continued to make good progress in both our personal watercraft and snowmobiles, despite global microprocessor shortages, which serves as a testament to the creativity and resourcefulness of our R&D and engineering teams. Looking ahead, we believe we have all the necessary resources to execute on our expanded production effort and will continue to be capital efficient as we make material long-term investments in our new mass production facility and scale up production over the coming months. The future of off-road is electric, and the work we're doing today directly supports our belief and mission to provide greater access to the outdoors for all. And with that, we are ready to open the call for your questions. Operator.
spk00: Thank you. At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Derek DeLay with Canaccord Genuity. Please proceed with your question.
spk02: Hi, thanks, and good morning, everyone. Sam, just wanted to talk a little bit about the new production facility in Shewinigan. Are you still comfortable with the previously announced timeline of commissioning the new facility, at least phase one, you know, within the second half of 2022?
spk03: Currently kind of finishing final planning, ordering materials for construction on the facility. I think overall our timeline on go-to production in 2022 remains the same. The Schoeningen facility might be starting construction a bit later than anticipated. but completing on schedule and bridging the gap with the Montreal facility to meet our 2022 targets.
spk02: Yeah, okay. That makes sense. And you're not seeing any – we're going to talk about supply chains in a second, but in terms of building out the production facility semiconductors aside, are you seeing any issues on the supply chain, or are you comfortable with everything there?
spk03: Built outside, we've done a careful job of reserving necessary materials to meet our timeline. So on that end, I think we're safe.
spk02: Okay, great. As it relates to the production of the units, are you and some others in the combustion power sports side of the business have talked about how they're able to go and build a product, get most of it done, and they're just sort of waiting for the semiconductors to come in, at which point they can put them into the product and get it to market or get it to their customers. Are you guys taking a similar approach, or how are you trying to sort of manage, obviously, this challenging environment as it relates to the semiconductor shortage?
spk03: Yeah, the teams are working hard across the board on kind of continuous redesign throughout components to be able to secure production on a go-forward basis. We have a significant higher amount of integrated circuits in the electric vehicles than on a comparable combustion one. So for us, it's much more difficult to pre-build a unit. It's not efficient because the electronics are really integrated at the system level rather than just a final ECU that's mounted externally on the vehicle.
spk02: Okay. Got it. Understood. Can you, obviously you had some really strong growth in your order book, you know, up another almost 350 units from the last update and 100% year over year. What is the demand split roughly between the snowmobile and the PWC?
spk03: Roughly, I'm slightly higher than 50% on the PwC at the moment and just lower than 50% on the snowmobile.
spk02: So it's quite even still. Great. And the PwC, is that predominantly a recreational customer or are you getting some fleet orders on that as well?
spk03: In the last quarter, we've seen some strong growth on the fleet side of PwC, but still predominantly recreational.
spk02: Okay. Great. And then last one for me. Just in terms of when you guys did the SPAC transaction, you mentioned the potential down the road of broadening into adjacent markets, potentially with third-party OEM partners. Are these conversations or plans that you're still looking at or still evaluating?
spk03: Yes, definitely. So we're in active discussions with several OEM partners. One of the big reasons for hiring Doug was his deep experience in OEM electrification across the off-road industry. So that is something we'll be moving forward to in 2022 and hopefully delivering on some first few projects.
spk02: Okay, great. Thank you very much. Thanks, Eric.
spk00: Thank you. As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad. Our next question comes from Cameron Dorkson with National Bank Financial. Please proceed with your question.
spk01: Yeah, thanks very much. Good morning. I wanted to dig a little bit into the, I guess, the sort of near-term production outlook. I mean, it sounds like you're still reasonably confident that we're going to have first unit deliveries by the end of the year. I guess maybe you can talk a little bit more about the visibility you have on that outlook. I mean, obviously, we've heard some timelines before, and I know it's largely out of your control, but, you know, do you have I guess, the chips in hand and the other components in hand where you actually have some confidence you're going to deliver vehicles this quarter?
spk03: Yeah. So the team's worked very hard to secure some of the necessary materials to start deliveries. So we have a high-level confidence we can start delivering really the first few units by the end of the year and then steadily ramping up in Q1 of 2022 with the snowmobile and watercraft platforms.
spk01: Okay. And as we look ahead to next year, what is your expectation for unit deliveries for the full year? And have you secured, I guess, the necessary components, chips especially, to get to that level?
spk03: I guess at the moment, we're not giving forward guidance across 2022, just due to supply chain volatility and what we've experienced in the past few months. So we prefer to key projections on a shorter-term basis once we have inventories fully secured, but we've made really good progress in that regard to be able to meet 2022 delivery targets.
spk01: Okay, fair enough. Just a question on the cash burn or the cost per quarter. How is that going to trend in the next few quarters? Are we sort of going to be at a similar rate to what we saw in Q3, or I guess you're still hiring people, so maybe we should expect that to go up in the next few quarters?
spk03: I think we can expect a slight increase in the next few quarters, especially as we invest into heavier tooling in the production ramp-up.
spk01: Okay, that's good. And then maybe just a last one from me. You had the announcement, I guess, recently with the starting of the installation of the chargers. Can you just talk about the economics, I guess, longer term for Tyga on that? I mean, is this all a capex for you or is there going to be some way to recapture that cost? Just wondering if you can just talk a little bit about the business strategy there.
spk03: Yeah, I think there's a really interesting opportunity that we've identified with this charger network in really deploying some of the best locations across North America. You know, the best trailheads, marinas, hotels, places where people want to go adventure. And with that, we're going to be deploying significant amount of chargers as disclosed. But the play on the business standpoint is, you know, Tiger's deploying and owning the charging network. it's going to have the ability to be monetized in the future as EVs become mass adopted in this off-road segment. So the goal here is to initially provide an acceleration for electrification with greater access to the trails and lakes, and then long-term beginning monetizing it to pay to further accelerate the installation of future charging networks.
spk01: Okay, so if I understand, it's sort of initially, you know, these will be sort of offered as I guess a quote-unquote a free service, and then once there are a lot more users out there, you'll have the ability to start charging for that electricity.
spk03: Yeah, correct.
spk01: Okay, understood. Okay, that was all for me. I appreciate the time.
spk03: Thanks, Cameron.
spk00: Thank you. At this time, this concludes our question and answer session. I'd now like to turn the call back over to Mr. Bruno for his closing remarks.
spk03: Thank you. Thank you for joining us on the call today. I especially want to thank our employees, partners, and investors for their continued support. Operators.
spk00: Thank you. Before we conclude today's call, I would like to provide Tyga's safe harbor statement that includes important cautions regarding forward-looking statements made during this call. This call may contain forward-looking information within the meaning of applicable securities laws. Although the corporation believes that the expectations and assumptions on which this forward-looking information is based are reasonable under the current circumstances, listeners are cautioned not to rely unduly on this forward-looking information as no assurance can be given that it will provide to be correct. Forward-looking information contained herein is made as the date of this call and the corporation does not undertake any obligation to update or revise any forward-looking information, whether as a result of events or circumstances occurring after the date hereof, unless so required by law. please refer to the forward-looking statement section of our latest MD&A for more information. Thank you for joining us today for TIGA's third quarter 2021 conference call. You may now disconnect.
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