Q1 2021 Romeo Power Inc Earnings Call

May 13, 2021

[music].

Ladies and gentlemen, and welcome to the Romeo power first quarter, 2021 and so I'm not sure the adult and what Costco.

My name is Charlie and I will be coordinating equally each day.

He would like to ask a question during the presentation and they registered T shirts, and stuff and they buy one and your telephone keypad.

Now how did your highest some done day obese P P and strategic finance to begin some please go ahead.

Thank you operator, and good afternoon, everyone and thank you for joining us today for Romeo power is Q1 earnings call before.

Before we begin I want to remind everybody that this conference call will contain forward looking statements and cleaning our expectations of future results sales cost of input market dynamics et cetera.

Our actual results may differ materially from those projected in these forward looking statements.

Additional information concerning factors that could cause the results to differ materially from those forward looking statements include macroeconomic conditions demand for our commercial electric vehicles regulatory policy decisions and the continued impact on supply change caused by COVID-19, and others contained in our press release as well as our public filings with the SEC.

Today's call will also include a discussion of non-GAAP financial measures as that term is defined in regulation G. non-GAAP financial measures should not be considered in isolation from or as a substitute for financial information presented in compliance with GAAP.

Accordingly at the end of today's press release, we have provided a reconciliation of these non-GAAP financial measures to the company's financial results prepared in accordance with GAAP.

With that I'll turn the call over to <unk>, President and CEO of Romeo power.

Thank you Sam and good afternoon to all.

With me today, and <unk> Webb Chief Financial Officer as it has only been about six weeks since our last earnings call will focus today's call and our latest update since then.

Start up and I'm sure. It wont surprise anyone on this call per head at the demand for vehicle electrification continues to grow.

Vehicle Oems and are subject to regulatory and consumer pressures to reduce <unk> emissions.

Columbia power is well positioned to capitalize on that growth.

We're continuing to leverage our advanced engineering expertise and the partnerships. We have established with key industry leaders like <unk> heritage and Republic, among other to develop and commercialize safe durable cost effective <unk> solutions. We are proud to have earned the trust of leaders like these who faced one of the most day.

Electrification challenges electrify and long haul trucking and a cost effective manner.

Our technology advantages make us well positioned to execute our long term agreements with leading Oems and fleet managers and our technological mode remains second to none as evidenced by the continued diversification and quality of our order book customers are realizing that the most effective path.

Forward to and ultra competitive long range and electrified commercial vehicle goes through Romeo power. However.

However, the near term challenge is the limited number of battery cell provide us producing sales high performance sales suitable for the commercial electric vehicle market.

We are attacking this problem head on by broaden and our engagement with battery cell providers, we have taken key strategic steps to reduce the risk over the medium and long term.

This has become one of the most critical issues facing our industry and we are doing everything and our power to help ease supply constraints and improve the number of qualified sales for our sales and for the industry broadly.

We are driving our global and holistic strategy to secure our future.

We have made significant progress since our last update towards securing adequate sales supplies.

As we noted on our last call, we have Jive and to secure sales supply over the short medium and long call. We have made great strides since our last update.

We are well positioned to sign an agreement shortly for multiple gigawatt hours to a long term supply agreement with a top tier partner.

We're also in active negotiations with two other battery cell partners and we expect to begin negotiations with a fourth in the summer.

Each partnership has its unique elements, but some consistent themes are structured allocation pricing mechanisms and access and next generation technology, such as $46 <unk> when available.

If executed successfully in aggregate these agreements should ultimately provide us with access to a sufficient supply of battery sales to meet our long term production targets.

And as the CEO and I wanted to assure shareholders that I and personal lead and all of these negotiations and I am committed to bringing them over the finish line. Throughout 2021, we are confident that our technology will continue enabling us to gain market share and thus we have taken steps necessary to support our custom.

<unk> include and finalized in 2021 and 2022 allocations.

We will provide an update as we bring these partnerships to the finish line over the coming months.

And we know we and the whole industry need more sales.

So we are in discussions with both the established players and new entrants to assess and overtime enhance their readiness to meet our rigorous requirements for use and heavy duty class six seven and eight trucks.

You may know that one of the hallmarks of Romeo power technology is our ability to enhance the performance of our sales to efficient and adaptable pack design, which is driven at least in part by a rigorous integrated testing protocol and have flexibility to modify and adapt our patent.

And <unk> technology from.

And I found in we have been committed to ensuring safety while pursuing high performance. We have built a very sophisticated testing capability that is a key advantage, enabling us to deliver safe and durable cost effective <unk> solutions.

Systems testing is far more accurate and faster when for instance, the dermal and vibration testing done in one second data from each of these test areas is being leveraged quickly to refine the system design and iterations and executed faster and.

In parallel the telemetry from the test and process and forms the design of the battery management system that will ultimately elevate value performance and the systems engineer myself I cannot overstate how important this design philosophy is to build and better systems simply stated it makes.

And any sell better we.

We are committed to leveraging our testing capabilities and broad exposure to various vehicle applications to support the qualification of additional battery cells for use and these complex applications.

Our expertise also enables us to match the appropriate sales for a particular customer and or use case applications utilizing our proprietary approach to overall systems design and has enabled us to home and on the appropriate value sub partners to support our long term business plan.

For your attention to that level of detail I wanted to take a minute to describe that key differentiator because it is important to us and to the industry as a whole. This is obviously a very fast moving technology. So we are also constantly evaluate and strategic partnerships and other opportunities for collaboration.

And to drive innovation and the battery cell level.

We're all about team market Romeo power and we are pleased with the number of esteem industry participants we have had the opportunity to engage with in fact, many of our engagements with Oems featured deep collaborations. We believe this is an important validation of our technology and team.

While we're on the subject of the enrollment power team. We were pleased to announce yesterday, Dr. Hung key one of the foremost mines and lithium battery engineer and has joined Romeo power and Dr. <unk> is a 30 year veteran and a battery technology trenches, who studied and a world renowned battery technology restructure docker.

Jeff Dunn and has founded and served as CEO and CTO of several key innovators and a few.

We could not be more pleased to welcome him to lead our battery cell Engineering group and we consider him joining the Romeo power team to be a major validation of our technology and opportunity.

Romeo power Dr. <unk> will evaluate novel cell design, and Chemistries with external partners as well as the viability of new cell technology.

He will also be responsible for prototyping and Romeo power proprietary chemistry agnostic distributed sales design and leading commercial cell supply quality audits, we expected that Ashish will also help drive our process to secure quantified self supply.

Oems and fleet managers, who are serious about electrification recognize that Romeo power has the team and the solutions to deliver superior uptime profit per mile and return on investment.

This is why we win.

In early April we were proud to announce our long term agreement with lead and commercial vehicle maker per car. The global makeup of light medium and heavy duty trucks under the Peterbilt Kenworth and da F nameplates for.

For those of you unfamiliar and this is a company that produced over 130000 trucks in 2020 alone and is also a leader in zero emission commercial vehicles as well.

The trust they have placed in us to help them achieve their ambitious electrification goals is an important milestone for Romeo power, we announced in early April that we had entered into a long term supply agreement, whereby <unk> will purchase power battery packs and value management software for use and heavy duty battery electric Peterbilt 500.

<unk> hundred nine Evs, and Peterbilt 520, EV refuse trucks and North America.

Folks on this call can appreciate how important this engagement is.

Industry Watchers have applied conservative growth and pricing assumptions to estimate the impact of Romeo power being designed into just the 579 and 520 models. These two models alone have around a 10% market share of the total market for class eight trucks, we have seen estimates we.

Makes sense that demonstrates this engagement alone has the potential to add significantly to Romeo power revenue by 2025.

And the lots will change and five years, but we are excited to embark on this journey with <unk> and other SD and players and the heavy duty space, who have made carbon emissions reduction our priority.

Also as previously announced heritage and its affiliates and subsidiaries intend to purchase 500 battery electric vehicles equipped with Romeo power battery systems for fleet deployment.

We had not announced was which Oems.

We announced and today that Romeo power and heritage Environmental services and selected <unk> for 400 trucks. The Lion electric co for 100, and Nikola Corporation for one to participate and our heritage Romeo Power Fleet electrification program. These tax will be supplied under existing contracts and are subject to successful validation and the <unk>.

<unk> sales of the program. We believe it is critical for major fleet owners to understand that we have essential technology to help them meet their electrification goals and we have made building relationships with fleet owners one of our go to market priorities.

Ill and we are proud of the progress we are making and excited for what's to come as we look at the share size of the North American heavy duty commercial vehicle opportunity. It has been important for us to focus our efforts as we transitioned from the prototype phase to commercialization phase our success can be measured by continued.

Execution, and five key vectors first attracting and retaining top tier industry talent, which we have been doing and both our engineering organization and our business infrastructure.

Second secure and engagements with selected heavy duty commercial truck and Oems with the Packer engagement being a major milestone and and enormous potential opportunity as we described earlier.

Third deepening partnerships with fleet managers that provide a direct line to Oems.

Relationship with Heritage is a great example of how this is working.

For secure and an adequate supply of sales suited to our target applications and complex heavy duty trucks with total cost of ownership is key.

And finally of course, none of these efforts matter unless we are simultaneously put and our talent and funding to work to scale up for our manufacturing capabilities. We are firmly committed to ensuring we are scaled and ready to deliver a self supply constraints ease.

Laura will provide a bit more detail on this but be assured we invest and to maintain and extend the competitive advantages our partners have come to recognize and expect.

I would now like to turn the call over to Laura and web our Chief financial officer to discuss our first quarter results in greater detail.

Thanks Lionel.

And for the many reasons final just articulated 2021 is expected to be a very heavily backend loaded year for us we posted first quarter revenue of $1 54000, which compares to $2 million 522000, and in the year ago quarter.

Approximately another $1 million and revenue for prototypes shipped in Q1 is deferred and in accordance with our accounting policy to recognize revenue at the point and time delivery of the final prototype occurs.

Despite the delay and our revenue generating capabilities caused by current constraints on sales supply we've continued to optimize our product for large scale manufacturing and build out our manufacturing capability as a result, our cost of sales and the first quarter were $4 8 million.

We are managing expenses as prudently as possible without risking our ability to be prepared for a smooth production ramp when the time is right.

In addition to scaling up the Labor force, we have refined our raw materials inventory, which resulted in some adjustments and increases in reserves.

We are keenly focused on optimizing solutions for this specific Oems, we have chosen to supply to date and we are working closely with their internal team could be and are positioned to deliver the safe durable power solutions they need as soon as possible.

Moving to the financials.

The total operating loss and the quarter was $25 5 million. Please note that the SG&A line include $6 $3 7 million of noncash items, primarily stock based compensation.

The change and the fair value of the warrants added back $116 million, bringing our net income to $90 million.

On a weighted average share count of 129 million shares our GAAP basic EPS was <unk> 70 per share.

We now have $287 million of cash cash equivalents and investments, having used about $5 million and the quarter.

As it was at the time of our last call six weeks ago, our backlog under contract stands at $555 million.

<unk> highlighted our newest production agreements. We are excited to have been chosen to supply. These Oems and as I noted we are increasing our capital investment to ensure we are ready to deliver the wildcard remains sales, including availability quality pricing and other cost and secure them for.

And final noted we're in the midst of active dialogue with multiple cell suppliers that give us confidence we can deliver on current customer commitments.

And we're still working through final term, thus we cannot announce specific details at this time, we expect we will have more detail to share over the summer.

You have heard from other industry players that capital commitments may be required to secure supply. We are pleased to have strong relationships with our suppliers and solid funding to enable us to navigate this landscape successfully.

As we negotiate long term supply agreements with pricing in part dependent on fluctuations in raw material indices. We are taking a very disciplined approach to the pricing construct and new customer contract.

Similar pricing protection already exist in some of our current agreement and we are committed to working collaboratively with suppliers customers and all members of the battery cell ecosystem to find the right balance to mitigate risk for all.

And why don't noted we are laser focused on utilizing our unique validation process and expertise to increase our own sales supply and to optimize performance for our customers as well and.

Necessary activity to do so we will take some time, yet and any length of time is longer than we'd like.

And the meantime are active discussions with new cell suppliers give us a good line of sight to robust supply from both the quantity and quality standpoint over the medium and long term.

We have named a number of key relationships and I want to underscore that collaboration is a top priority for Romeo power and all our customers have made commitments to electrify and are deeply engaged with us.

And is not trivial to change out a battery system and we appreciate the trust and investment our partners have put into incorporating our battery packs into their truck. They recognize the performance of our systems is unmatched and we will work tirelessly to make sure we don't disappoint them.

And look forward for your question.

Operator, you May now open the line for questions.

Ladies and gentlemen, if you would like to ask a question. Please press star followed by one on your telephone keypad now if you change your mind it can stall followed by Kay.

Our first question comes from Gabe Daoud of Cowen. Your line is open. Please go ahead.

Thank you good afternoon, Lino and Lauren and everyone.

Thanks for taking my question maybe.

And with our with the Honeywell.

Hey, Ryan.

Good day and start with the.

And so on the supply side of the equation I understand you're still in negotiation last quarter and.

You mentioned, maybe you would have an update to give you and maybe a little bit of confidence on hitting the $80 million number for revenue for this year, just there'll be some good visibility into that number and you have sales on hand, I could that could help you achieve that number just curious how we should think about revenue for the rest of the year.

Sure I will have a long and can you give some color on the revenue outlook and then I'll give some color around where we at with our negotiations sure Hi, Gabe Thanks for the question.

Are not making any changes to the numbers that we provided previously we are optimistic that we will be and the range of 18 to 40 as communicated until final allocations are announced and our final agreements are done with the cell supply we won't provide more specifics, but we are very optimistic and arrange them again.

And then Gabe and the important thing to note as I said and the opening remarks is that we're well positioned to enter a long term agreement for multiple gigawatt hours with one of our key partners, our and active negotiations with another two and we expect to start negotiations with the fourth and.

And this summer so in aggregate, if we're able to execute upon what we have in front of US we will be able to have adequate supply to satisfy our long term production goals.

Okay. Thank you guys that's helpful.

And then maybe just.

Following up on the demand side of the equation and obviously, a nice announcements and April with Pac are.

Could you maybe shed a little bit of light on.

And the agreement and the revenue potential through 2025.

And I know, it's restricted to just the true peterbilt trucks, but.

And I think there's been some and we had put out some numbers that could suggest it could be a nice revenue opportunity for you.

Any color around I guess for first revenue from the contract when you expect meaningful revenue to show up and then just total revenue potential from.

From the opportunity.

And can you give some color there and of course so.

As you know we define backlog very specifically for <unk> is not in our backlog, but we believe that the revenue potential from this agreement and how it could.

Be very significant to our long term revenue plan, especially given the fact that the $5 79, and $5 20 trucks together have about 10% of the market share for the class eight truck market. So we do not have specific numbers to provide but we see this as a very significant development and we expect it.

To start generating revenue gradually and hit its stride around 2023.

Got it thanks, Loren and then just finally.

And for Borgwarner.

And that could fall and they were pretty complementary and back to saw on their conference call and just.

Curious if there's just any update on the partnership there and.

And just just ways to work together and you kind of coexist for that as well is there any update on the partnership generally.

Hey, Gabe our joint venture remains in place with with Borgwarner Nothing has changed on that front, we're heads down and drive into good order book and our joint venture with them and we value the partnership net and module to announce at this point.

Yeah.

Okay. Thanks, Michael.

Youre welcome Gaye. Thank you so much for other questions.

Our next question comes from Steven Fox of Fox Advisors. Your line is open. Please go ahead.

Thanks, Good afternoon.

First question I was just curious and based on what you said about your cost of goods sold and building out the manufacturing can you give us a sense for the pace you're building out capacity right. Now is it is it is.

In line with the 18% to $40 million and revenue is doing are you trying to get ahead of the equipment side relative to your optimism around sales supply just any color on how the manufacturing has been affected by some of the other delays and then I had a follow up.

Sure.

The manufacturing capacity build out that we're doing is in line with what we had originally planned and a sense that we always knew that this year's revenue would be heavily backend loaded and we are spending carefully as we are waiting to finalize negotiations and see what the final details of the sell agreements are but theres not a subs.

Cancel slowdown and our preparations because our objective is to be prepared to meet the production ramp as soon as the time is right and not to have any delay at that point in time. So we're spending very methodically we have already brought in some additional labor to be prepared and smoothed out the manufacturing process as well as per <unk>.

Shipment on orders to have those lines in place and yes. It is in line with 18 point.

Great. That's helpful. And then just in terms of the negotiations.

<unk>.

Thanks for all the detail and then and obviously you don't want and sacrifice quality, but can you give us a sense for just the ability to close some of these and the current environment and it seems like your suppliers have a bigger pencil.

Huge opportunities in from you, but how do you manage that with the idea of just sort of maybe sacrificing a little bit upfront to sort of get that revenue stream going versus cutting.

Cut and the like perfect deal.

Hello, Steven.

And good afternoon, and nice to talk to you again.

And from from a value partner standpoint, quite frankly gladly sell providers want to work with windows and enrollment of power to clear leader and provider of leading edge value technology and class six seven and eight trucks.

But what we've been doing is just ensuring our long term outlook locking down the supply as we talked about last time true 2028. This shows our vigor and conviction and our long term outlook and quite frankly, our order book, especially the last deal that we announced is very very impressive for battery partners from her.

Highly confident and our ability to bring these deals over the line. So that's what I'm, saying the first deal we're right there will be given updates and the summer as well as we have the other two.

That's right behind it and afford to start negotiation and the summer and let me be clear, we will not sacrifice safety or quality to make numbers. That's not who we are what we've done is we've leaned on our extensive library of body sales test data to identify and prioritize the top for partners that will get us to.

Execute on our long term business plan.

That's really helpful color and then real quick just clarification on the backlog.

It doesn't include heritage or how much is included with the heritage since you've now announced.

For the Oems Sir.

There is nothing for the heritage electrification program included in there now.

Our.

And there is a pilot program in advance of the orders. So that's not included.

Okay, that's what I thought thank you very much.

Sure and welcome Steve Thanks for the questions.

Our next question comes from Greg Lewis of <unk>.

Your line is open. Please go ahead.

Yes, a day, thank you and good afternoon, Lino Lauren and thanks for taking my question.

I was hoping for a little bit more color.

And how we should be thinking about the backlog I mean, you mentioned net flow.

And the car is not and the backlog and it is.

Current as we think about our hurdle rate.

Condoms.

Going forward.

Should we be thinking about new customers getting signed off and.

And building off of that backlog or is it going to be a mix, where some customers go into backlog and backlog and others just fund that purchase agreements that kind of <unk>.

<unk> and just kind of curious just as we think that number should be building.

You spoke about.

And what I can give some color and then I'll follow up share.

Again, we are defining backlog very specifically in accordance with SEC guidelines and with GAAP. So there will be agreements that we signed that don't go directly into backlog, but the important thing that we will continue to highlight there is the duration of the agreement and the number of trucks or the number of vehicles.

Those that are included there because the important thing to understand is the size that they have and the market as well as the validation of our technology that customers are showing as they agree as they execute these agreements with us so wherever possible. We would of course loves to have minimum commitments and add directly to our backlog but.

That won't always be the case.

And.

And the important thing there is volume.

Explained is just way it we're going after that trial and to restructure the SEC definition of what backlog is but the key thing to notice is we are delivering and what we said we wouldn't be doing which is continuing to diversify our order book with high quality customers and you'll see trials and the rest of 2021, we're highly confident that we'll be announcing additional deals.

So really and truly a may vary from customer to customer, but rest assured our order book continues to grow and is extremely impressive and again a major validation of the solutions that we're putting out and road today and in the future.

Okay, Great and then and then as we think about the new hire for XI.

Equally.

Very well renowned sell engineer.

<unk>.

Just as we think about that opportunity.

And for him and for him and the company is this something more wear and.

It's about.

Using existing supply chains to source sales or is it potentially about creating new supply chains.

Source cells for Romeo.

Hey, Greg Great question look it's all a day above like I've said before we're committed to driving innovation along all the value technology pillars and this includes down at the cell level. So again I'm excited for Dr. <unk> to start anything from validate and are evaluating our novel technology partners externally.

What is validating and driving the sales specific items that we have and our innovation roadmap or even and taken a heavy hand and continuing to add additional suppliers enter the demand pillar. If you will as well as just making sure from a quality standpoint manufacturing standpoint, et cetera that we have adequate supply to support.

And last one business plan that we have so we're not taking anything off for the table and like you said is that he is a total year veteran and we are so excited for them to get started we're committed to being the Premier North America and provider of long range battery technology for years to come.

Okay. Thank you very much for the time.

Youre welcome. Thank you so much Greg.

Our next question comes from Jon Lopez of vertical group. Your line is <unk>. Please go ahead.

Hey, guys.

Hey, John and after.

And how are you and.

And do you.

And I look.

And again I'm, sorry, I have a couple of I guess like clarification.

Patients are cleanups, and then kind of a main question for.

First of all Lawrence I think you had mentioned a couple of add backs on the sales and marketing side outside of the stock comp or was there anything else and there.

So one of the big drivers for our SG&A in Q1 of the and.

And that we're making into improving our infrastructure and <unk>.

Looking at our IP systems, and just adding to some of our efficiencies and infrastructure as a newly public company and that does include some legal and accounting fees as well as consulting et cetera. So I would expect that there may be another.

And another quarter or two of continued spend in SG&A that is outside of what may otherwise be normal.

Okay. I got you that was actually my follow up for the first one is just on the on the reconciling items I think you mentioned, there was like $6 million and some change.

Most of which sounded like it was stock comp is there anything else from like the GAAP number that you would adjust to get to a non-GAAP number.

No there is nothing material there.

Just the stock comp just to talk about okay. Okay I got you.

And then my second one just for the R&D side.

Are you.

You've given us a range.

Last quarter by 20% to 30 for the year does that still hold as well because things have to ramp up quite a bit to get to that number.

It does clear at this point continuing to spend and invest and the R&D, but while we've been negotiating the sales supply agreements, we've been planning carefully and spending carefully just as there have been a lot of variables at play, but our intent is to continue ramping to that R&D number as well as the many.

Factoring capacity ramp and then John I'll, just like to add some color there.

We've talked before we refuse to yield and lead to anyone okay. So from a research and development standpoint, we will continue to be aggressive debt to ensure that our technology and won't continues to be wide and actually expect cash. So we'll continue to give you updates in that regard.

Got it that's really helpful.

Mickey and <unk> I thought the backlog when you guys updated as last time was still $5 40 for I thought you said $5 55 today do I for one of those two numbers wrong and.

It could change like what was that little marginal change.

It is five years.

And $5 55, and that is from some changes in pricing and a couple of our contracts a couple of small additional orders, but no other customers to announce because theyre, just some immaterial changes and existing contracts.

Okay I got you and then sorry just.

Just to come back to the slope for the year here.

I guess finally I want to frame this is.

Do you guys feel like you've got the sort of like and regard regardless of the wrong word, but do you feel like you have comfort and at least doing the 18, and then depending on how and the negotiation shakeout, perhaps going above that or I guess asked differently is there a chance that the 18 doesn't come to fruition and depending on how these new.

And <unk> and shake out could you just talk through those dynamics.

We can yes. So we are very confident and 18% to $40 million, we built that range for our last call based on information available at the time and that is still the number that we intend to achieve and expect to achieve for this year.

And John one thing and I appreciate with focus on a shot so I'll share by one to reiterate these negotiations that we're talking about and highly confident to bring over the finish line, our short medium and long term in nature and I just wanted to be clear about that point.

And maybe if I got you I just wanted to get a little bit better sense for the cadence for the year, but I think I got it okay. That's it for me and thanks very much guys.

Hey, Thank you so much John.

Our next question comes from Adam Jonas of Morgan Stanley. Your line is open. Please go ahead.

Hey, everybody.

Lauren can you remind us.

Your company's targeted minimum cash balance.

We didn't provide a minimum cash balance and it's too early.

Early to do that based on where we stand with the sales negotiations that we have now.

Okay, I respect that and.

And I'm just thinking.

Yeah.

Given the capital commitments and.

And the kind of arms race nature.

And.

Of battery supply.

For carrying and procurement and.

And what seems to be ever ever larger.

Players getting into the business I mean, it's a sign that you are and the right business clearly.

And how would you Lionel and how would you say.

And your company.

Let's say contemplate strategic alternatives to give the company ballast.

So that again, if the if youre trying to optimize secure production medium and longer term.

So you can really eliminate.

The big and the potential.

Lack of capital limiting your ability to really thrive and the market that youre addressing I mean, and you've seen again Borg is an example of what they've done with ACA saw there seems to be you know you're in a hot area and I would imagine there would be at the right price strategic interests and your company. So obviously without announcing.

And anything on the call I'm not trying to get you to do that but just how should we think about strategic alternatives from a fiduciary.

And at context for it.

Context.

Hey, it's lots of other assets and I'd like to talk to you again again and what you should think about it and we're focused on being a premier provider of Lea and Eddy battery technology to the class six seven and eight realm and K. So from from the customer standpoint, that's what we're focused on bringing additional customers and board.

High quality customers to continue building and qualifying the order book again from a battery sales standpoint side. The strategy there is lacking and supply short medium and long term and which will give you updates on and in summer as well as the high end of that she gives us a lot of different and around and arenas that we can plan for Florida diversify ways to ensure supply.

And in case I don't want to speculate our strategy remains the same which is to become one of the largest green energy companies that was ever seen.

Great and if I could just sneak one more and.

You said, you're continuing your hiring rate I don't know if you could tell us how many employees you have.

Right now, but again between your your roles and important high Tech manufacturer.

And and important part of our country and important industry that seems to be and increasing priority with the new administration.

Could you update us on the landscape of other opportunity of any possible.

Grants or government loans.

And that could help.

You, even be even and better position of having the capital and ballast to execute on your strategy and good environments and in a difficult environment. Thank you.

Sure, Thanks, and let me wrap that a little bit. So we're currently above 200, 200 and dedicate the team members and growing.

Clearly weekly we're moving.

And we focused on expanding not only our engineering team, but our operations technicians team.

Everybody loves what we are about that Romeo and and we really have lines out the door interviewing and bringing people and now.

Now from the incentive standpoint, and as you and I have talked about and the past we're not we're not forecast on bill and a business with incentives with focus on actually making sure that we deliver products and make our customers business plans makes sense, what I will say, though is as you know the government incentives will accelerate demand and and we.

What I would say positive position to really capitalize on that accelerated demand and so on that front. We've had accelerated discussions accelerated interest with some pretty cool partnerships that we'll be announcing throughout 2021, where romeo will be a benefactor because again, we're a leader and etch provider and will provide the <unk> profit from.

Roy and uptime.

Thank you Lionel Thanks Lauren.

Thank you Adam.

Our next question comes from Noel Parks of Tuohy Brothers. Your line is open and please go ahead.

Good afternoon.

Sure.

Hello, Good afternoon.

Just had a couple of things and.

One thing that you had.

<unk> been talking about for some time is that.

<unk> been more inbound inquiries from potential customers kind of above and beyond the.

Established base you already have and.

And I noticed of course waste management seems to be sort of like a sweet spot.

As an entry point and.

And then intuit and value proposition and just curious if you could go over the last for.

For our call if you could kind of characterize.

What sort of inquiries you're getting.

Kind of what sort of.

Time frame size or verticals great.

You might be hearing more from.

Yeah.

Sure and good afternoon and again.

And so you're absolutely right there the inbound inquiries have been a phenomenon not only from the OEM standpoint, but as you pointed out from the fleet manager standpoint.

And actually get and anyone that is serious about electrification for anywhere from.

Again, <unk> duty vehicles over the road vehicles.

Medium duty vehicles school buses et cetera, so for.

All of the above really people are coming in the door because they know that Romeo gave them the best path forward to bring that electrification and plans to life. So that's what we're focused on and will focus on just translate and those engagements into actual contracts, which we're highly confident we'll be able to announce that.

Additional production deals throughout 2021, as well is really continuing to solidify our fleet manager partnerships as push and pull from a demand standpoint, I think that the heritage program is a perfect example of this and now.

And the participants there that's an awesome program, where we're starting with 500 vehicles and as a potential to expand so our OEM partners and that.

Congratulations to them. We're so excited to continue partnering with them on a fleet manager side, but what I'll say is additional fleets I can't call. The names now, but our fleet and chess and sweet partnerships are growing and Youll see us short medium and long term and leveraging those fleet management and partners just to continue on board and additional Oems.

Great and.

And just talking about those different.

Business lines and severe.

The.

Over the road et cetera.

And any of those you have a sense Mike.

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