Q2 2022 Embark Technology Inc Earnings Call
Good afternoon, and welcome to the Embarq technologies second quarter 2022 earnings Conference call.
Today's call is being recorded and all lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer session.
I will now turn the call over to belong head of Investor Relations. Please go ahead. Thank you operator, and thank you everyone for joining US today joining me on today's call are co founder and CEO , Alex Rodriguez, and CFO , which is power and.
Bulk issue its second quarter, 2022 press release and presentation, which we will refer to today.
Be found on the Investor Relations section of our website at investors starting to bulk trucks Dot com. Please note. This call will include forward looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representing our views as of any subsequent date, we undertake no obligation device all public at least.
Also any revision to these forward looking statements in light of new information or future events. These statements are subject to a variety of risks and uncertainties that can cause actual results to differ materially from expectations.
Please refer to our filings with the SEC, including our annual report on Form 10-K filed on March 21, 2022 form S. One filed on June one 2022, and other documents filed with the SEC from time to time, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of the box performance. These non-GAAP measures should be considered in addition to.
And not as a substitute for or in isolation from GAAP results. These additional disclosures regarding non-GAAP financial measures in today's press release, and all filings with the FCC are posted on the company's Investor website. Finally, we already call on today's call. We will make the recording available. This evening on our website I would now like to turn the call over to Alex.
Thank you Bill good afternoon, everyone I'm going to begin on slide three I'll provide some key business updates since our last call first with respect to commercial and operation the operational and technological milestones for our truck transfer program continued to remain on track and we're on schedule to deliver the first check Tonight with by the end of the year.
Some more detail later in the call, but we are excited about the continued collaborative work with our carrier partners in developing an operating framework and key procedures. They cover all facets of running embark equipped trucks within the carrier fleet, our partner development program or PDP continues to expand both in breadth of partners and depth of engagement. Most recently we had.
And a top 10 less than truckload, otherwise known as LPL carrier with a nationwide footprint of terminal as our newest PDP partner, we're excited to onboard this leading LPL player as we see the defined terminal network.
Providers, do especially well suited to rapidly adopt autonomy.
We continue to emphasize quality over quantity when selecting PDP partners with a focus on organizations equipped to implement autonomous technology at scale also on the PDP front, we will be speaking with our existing partner DHL great waves future Afraid festival in early November and Tennessee, Please come check it out.
We continue to methodically expand the <unk> coverage map in the second quarter, we worked with Alterra to add four new strategic sites across the sunbelt.
<unk> and Altera teams have worked collaboratively to help secure optimal sites fehrenbach in a variety of wing Tuesday to resource and acquired bio terror once I with security on Alterra intro to an existing owner and one site wasn't already owned Alterra site, which is well suited for autonomous operation. We have been impressed with the resources and flexibility at Alterra has brought to the table and we look forward to continuing.
A strategic partnership embark also continues to make meaningful progress on the development of our embark a universal interface a standard set of sensors and compute that had been designed to integrate with all four of the major OEM platform by way of a set of flexible digital and physical interfaces. We believe this approach across OEM compatibility, which has had is planning for early production too.
Now positions embark well to navigate the ecosystem complexity as we begin to see delays across the manufacturing landscape.
Now embark is not immune to the delays experienced by Oems and tier one however.
However, we do expect the strategic decisions, we made with embark a universal interface over 18 months ago provide us flexibility in navigating the ecosystem over the coming quarters as we prepare for commercial deployment as our team looks forward in our commercialization plan. We're taking these new manufacturing conditions into consideration and continuing to adapt our staged rollout plan.
Fit the realities of available capacity and production efficiency at the end of today's presentation, we'll share a bit more detail about this outlook finally on the policy side of things I, along with other leaders in the autonomous industry collectively coauthored a letter to governor Gavin Newsom to directly California, DMV to move forward on a rulemaking process to create a pathway for legal testing and dipped.
<unk> of level four autonomous trucks in the states. We believe this unified action will help drive support for <unk> testing in California, and ultimately help improve road safety and the supply chain crisis hampered by truck driver shortages.
I want to touch on safety.
I think safety is one of them in box core company values, which we've highlighted many of our corporate reports, including our recent ESG report in June the National Highway traffic safety administration or NHTSA issued its inaugural report on crash data collected from automated driving companies understanding General order. The report identified embarks perfect safety record, having never been any.
<unk> and NHTSA or FMC S. A reportable crash since its founding in 2016. This perfect safety record is made possible by an box high operational standards and unique technical capabilities such as vision map vision. This report highlights the industry's focus on safety and embark as a leader prioritizing safety within the industry now turning to Archie.
Acknowledging roadmap in 2022, we committed to achieving two of the five remaining technological capabilities. We believe are required to commercialize embark driver.
I'm proud to report that embargo successfully demonstrated autonomous emergency vehicle interaction, leaving just evasive maneuvers remaining this year will discuss the emergency vehicle interaction milestone in more detail later in the call. We're excited about both the demonstration of technical capabilities and the government collaboration required to successfully achieve this milestone and finally I'm pleased to highlight two engineers.
So my World Class Engineering organization tailored, England Arena Lu co invented simulation evaluation pipeline and recently filed a patent which adds to our growing intellectual property portfolio.
This cross functional invention connect embarks catalog of scenarios, which we captured during years of on road testing directly to our simulation environment.
By connecting our extensive scenario database seamlessly toolbox of simulator with a robust querying tool. Our engineers can quickly find the most valuable and relevant on road data and pull it directly into our re simulation environment. There. They can further parameterized the data, allowing for a targeted and rapid feedback loop between development and testing which results in new features on the road sooner.
And with even higher confidence you're going to be more about the process in a medium blase wrote on the topic, which is linked on this page in the earnings presentation and can also be found on our Investor Relations website Lastly, I want to address how embark is adapting to the current market conditions and asset light business model focuses on partnering with major constituents within the trucking ecosystem, including carriers shippers real estate.
Date partners and tier one manufacturers. This strategy allows embark to be highly capital efficient by leveraging the resources and Knowhow of our partners. This is something we've been consistently doing since our founding and we are especially realizing the benefits of this strategy today, given the current macro environment I'll speak to this in more detail a bit later, if theres one key takeaway about how we operate our business and why we built.
We've we are set up for success in a challenging macro environment.
We are focused and we are efficient and as we've consistently said this provides flexibility to refine key initiatives key partners and the resources required to execute upon them as the macro environment rapidly changed during Q2. We also adapted to ensure we can continue to be positioned for long term commercial success as you know.
<unk> head count as the primary driver of our free cash flow spent and we implemented a more focused hiring effort during the quarter Richard will speak in more detail on the implications for our free cash flow spend guidance for the remainder of 2022 as a result of this initiative what focused hiring means is we're continuing to ensure that we manage head count growth to identify until key roles on that.
Without compromising our ability to commercialize our technology. Fortunately, we feel very good about the current team that is in place today to continue to advance the technology towards commercialization, while extending the runway in that vein. There are three key recent hires that we're excited to welcome to the team that I wanted to highlight today head of manufacturing branding Conners ran has deep experience in the <unk>.
Sector, most recently as head of manufacturing at Marinette, focusing on autonomous drone delivery and before that spent four years at <unk> as head of manufacturing and supplier quality and before that worked in manufacturing engineering at Apple and that's how the sensors even o'keefe. Jim also worked at <unk>, where he spent five years as the camera sensor program manager. He is an electrical engineer who began his career at NASA.
Developing data acquisition systems for space Mission finally head of business development, Josh Raycroft, Josh previously led business strategy and partnerships average in hybrid loop for seven years prior to that Josh spent six years in engineering at GE Aviation Lastly in mid July we filed a proxy statement announcing a special meeting of shareholders on August 15th to vote.
And our proposal to implement a reverse stock split.
Disclosed in the proxy statement the board will approve the exact ratio just after the shareholder vote. The exchange ratio will be sat between 15% to 1% to 30%, we expect embark share price to begin trading with the effect of the reverse stock split as of August 17. The objective of the reverse stock split is to ensure we need the listing requirements for NASDAQ as well as effectuate the share price and float to meet them.
Criteria for many institutional investors now turning to slide four as we have done throughout the year I want to reiterate the objectives that we laid out during our Q4 earnings call in March and we plan to deliver on in 2022 first to deliver the first truck into the fleets of carrier customers through our tech transfer program.
To accomplish two of the remaining five capabilities in our technological roadmap, bringing the total capabilities accomplished to 13 of 16 by the end of 2022 and third to launch the backbone of the Embarq coverage map across the Sunbelt region.
<unk> touched on the continued expansion of the Embarq coverage map and will provide a more in depth review of our emergency vehicle interaction accomplishment as well as the progress we've made across our TTP initiatives in the next few slides turning to slide five embarrass partnership with Knight with and our joint work through the transfer program is paving the way for the industry's first deployment of autonomous trucks within our fleet's operation works.
Cited to report that the program is currently on track to begin delivering embark equipped trucks are starting in December we're on pace to have nights of drivers maintenance personnel and dispatch operators trained and ready to deploy the trucks within their regular operation supported by the Embarq Guardian software and associated support center to date, we've made significant progress across both technology and <unk>.
Operational milestones for TTP on the technology front, we've refined our MRC universal interface or <unk> to optimize the uptime requirements of daily in fleet operation.
Specifically, we've hardened our compute stack to ensure sufficient reliability under the range of environmental conditions, we expect the trucks to encountered as well as simplifying our sensor packaging to optimize for serviceability by minimizing mounting point to the trucks. We're currently running these updated trucks through the latest preproduction testing on.
On the operations front embark and nightwear have completed a detailed 40 page concept of operation outlining the intricacies of how embark equipped autonomous trucks will operate within nights with operations alongside this detailed plan. We've jointly finalized a set of standard operating procedures for pre trip inspection truck dispatching and remote monitoring through Guardian.
Teachers will have embark and nitro staff working together to ensure the consistent and safe dispatch of embargoes lift trucks.
In an effort to prepare nitrous sites to receive store and launch embark trucks. The two parties have defined requirements for facilities that will have an automated trucks overnight looking ahead as we progressed towards project completion embark and next week, we'll focus on final I think tech integration.
<unk> training for relevant drivers maintenance and personnel and executing the handover of trucks beginning in late Q4. We believe these key real world learning will allow us to support being able to deploy our technology at scale in the near future next we'll move on to slide six we successfully demonstrated our emergency vehicle interaction milestone through collaboration efforts with the.
Texas Department of public safety, and the Travis County Sheriff's Office I'm sure. Many of you have seen the videos of self driving cars in San Francisco, appearing to be pulled over and then unexpectedly started driving again, they sometimes resulted in situations that we're surprising and even potentially dangerous for authorities.
To commercially deploy self driving trucks, we need to operate safely not just in day to day driving but in all of these long tail road situations with other road users and that's why margins are working closely with law enforcement to ensure our trucks react in a safe and predictable wafer authorities.
I want to highlight two key components of our emergency vehicle work first embarks engineering team built the technical functionality, allowing embarked powered truck to identify emergency vehicles by our lights and other acute and then respond accordingly by pulling over safely under highway shoulders second embark developed an interaction protocol with input from law enforcement. They can enable any law enforced.
Officer to safely stop approach and receive information from an autonomous truck intuitively by utilizing a scalable process, including communication with a remote guardians of our technician and a built in lock box on the truck importantly, this process is safe and allows for seamless interaction with law enforcement without the presence of a driver. This represents the first ever public demonstrates.
<unk> of an autonomous truck participating in a routine traffic stop on a public highway with engineering breakthrough embark has now achieved 12 technical milestones on our roadmap and as a step closer to commercial deployment a video of the capability in action and more detail on the accomplishment can be viewed on <unk> investor relations website, and with that I will turn it over to Richard to discuss the financial details. Thanks, Alex.
On slide seven and I'll highlight some of the key financial metrics that support our business progress our cash and cash equivalents were approximately $224 million as of June 32022 are.
Our free cash flow spend for the quarter was $24 $7 million versus last quarter at $19 $9 million.
This brings our total free cash flow spend to $44 7 million for the first half of the year. We continue to feel very good about managing our free cash flow spend continuing to grow the business, while working to find efficiencies that can help continue to extend our runway under the presumption we could be in a prolonged challenging macro environment.
As Alex mentioned earlier and as we've consistently spoken about one of the benefits of having an asset light business model as we are able to be highly capital efficient and in this current macro environment is proving to really be beneficial.
Some additional detail on this point a bit later.
With that backdrop, we are revising our full year free cash flow spend guidance from $125 million to $140 million to a $100 million to $150 million.
We're also revising our stock based compensation expense guidance for full year from $70 million to $75 million to $60 to $65 million.
I'll provide some additional detail on the next slide as it relates to the revised guidance as we stated head count is the primary driver of free cash flow spend even in a focused hiring environment. We did see sequential increase in our head count by 30 team members in Q2 to end the quarter with 340 team members.
Our staffing remains engineering focus where our R&D employees at the end of June represent about 80% of the overall head count.
Going through the rest of the P&L second quarter net loss was $14 3 million.
Second quarter, adjusted EBITDA loss was $23 9 million compared with adjusted EBITDA loss of $13 million in the prior year period, and $23 1 million for Q1 2022, we provided a non-GAAP reconciliation in the appendix for your reference turning to slide eight.
I want to provide a deeper dive as it relates to our updated free cash flow spend in stock based compensation expense guidance for 2022 as you can see on the left hand side of this slide.
In addition to identifying process improvements by continuing to focus on finding efficiencies, we were able to manage the free cash flow spend accordingly.
As Alex mentioned earlier, we do not believe this reduced level of spend will impact our ability to commercialize or achieve our objectives for 2022, but rather ensure we have flexibility to extend the runway and commercialize in a focused manner, while de risking the business plan as we've said and barks business model is differentiated from other avion companies as.
We are an asset light software as a service company.
As such we have the ability to define and refine our key initiatives key partners and the resources required to execute upon them.
Coupled with our ability to flex the operating expense structure.
Reflects our disciplined approach to direct our efforts in developing a leading technology that can be utilized commercially in a capital efficient manner. As you know during the last quarter, we had already guided that we'd be at the lower end of the initial range of free cash flow spend of $125 million to $140 million with six months behind us cumulative free cash flow spend of 44.
7 million, thus far in 2022 and with the implementation of focused hiring we feel this revised guidance of $100 million to $150 million is a better reflection of where we expect to end the year.
Can see on the right hand side of the page. The carriers. We expect savings are related personnel expense, primarily as a result of focused hiring effort related process efficiencies and additional cash savings as a result of the head count we expect for 2022.
We continued favorable net working capital we anticipate.
With respect to stock based compensation, we had expenses of 29.0 million for the first six months of the year.
Our revised guidance is better aligned with focused hiring over the remainder of 2022, taking into account the methodology for stock based compensation expenses calculated depending on the type of award and lastly, incorporating the impact on the fair market value as a result of stock price volatility I will now turn the call back over to Alex to reinforce how we are able to.
To deliver our technology in conjunction with the actions taken to extend our operating runway. Thank.
Thank you Richard moving on to slide nine one of the things I want to highlight in this call is how we've been able to be much more capital efficient relative to our competitors executing an asset light business model to achieve our objectives in our company DNA early on in AAV industry. It was less clear if hardware development would accelerate quickly enough to be able to support the software and as such many come.
And it became dependent on in house solutions for certain components, which is more costly and much less capital efficient and embarks founding we had the hypothesis that by focusing on world class software development and partnering with industry leaders for various complementary hardware component, we could accomplish a lot more with a lot less resources when you fast forward five years to today.
There are industry partners, who are able to provide those complementary components that meet or exceed embark system requirements and because of embark decision to partner with best in class component suppliers and focus solely on software development. We believe that we have done more while spending less than anyone in the AAV industry carriers and investors are usually quite impressed when they do a ride along and one of our true.
And one of the most common questions I get afterwards, if someone who's been in multiple EV trucks is how is embark able to deliver such an industry leading software stack. When some of our competitors are outspending us by $1 billion or more the answer I always give is that most of our competitors are trying to do a lot of different things at the same time when you zoom in on <unk> one area of focus.
Building the software layer of the stack specifically for heavy truck, we have a very competitive level of investments what has allowed us to be so efficient is that unlike our inhouse focused competitors. In addition to the hundreds of millions of dollars that we're spending directly.
To build on top of technology partners with a lifetime technology investment estimated to be over $1 2 billion.
I wanted to talk about three of these key technology partners in more detail. These all represent components that one or more of our competitors develops in house today, and where embark has been able to be much more efficient by leveraging the hundreds of dedicated R&D employees from our partners.
Lidar.
Said of designing or building a custom lidar embark has chosen to work with an industry, leading partner who has nine years of experience in developing a high quality lidar product that is designed to be automotive grade and meets embarks performance requirements. There's a lot of the small number of embark machine learning engineers to deliver differentiated value by developing industry, leading segmentation algorithm on.
Top of proven hardware.
Economists domain controllers on the compute side instead of designing and building our own compute board in house embark has partnered with a leading supplier was 24 years of experience and has developed these types of boards for others, while meeting exacting military grade hardware reliability and performance standards by collaborating with an experienced partner a small team of embark engineering.
<unk> is able to develop the qualifications and specifications for an autonomous domain controller that meets our needs at a fraction of the cost third stimulation simulation is known to be a resource intensive part of the self driving problem. One of the ways that embark has been able to achieve significant efficiencies relative to our competitors is by working with a partner that can provide based simulation and infrastructure.
Her perception planning and control. These are the types of resource intensive physics engines. The other 80 companies have hundreds of engineers working on because they choose to do everything in house, even though this doesn't create differentiated value by partnering on simulation infrastructure embark is able to have a smaller stimulation team that focuses on truly value added stimulation IP like the patent pending.
Recorded data accumulation pipeline, we talked about earlier in the call in each of these examples the results speak for themselves, we have been able to leverage significant technology investments by others and benefit from years of Knowhow from hundreds of specialized engineering outside our organization, which represents an estimated lifetime technology investment of more than $1 2 billion.
This allows us to be flexible in how we deploy embarks resources to align against our initiatives in a capital efficient manner.
I would like to conclude on slide 10 by taking a closer look at the $730 billion U S trucking market and how end markets planning our commercial rollout within this larger ecosystem, we often think about the trucking market at 53 foot dry vans moving consumer goods in a truckload model. However in reality. This market is far more diverse and is composed of many different segments. For example, you can think about it by cargo types.
While we commonly think of consumer goods being shipped Theres also agriculture mining logging and oil and gas products being transported afternoon, rather remote location. Similarly for trailer type. There are also reefer flatbed car hole and so on each with their own complexities and for the operating model, while we hear a lot about single truckload. Good there moved through many operating models.
Including dedicated LPL and relate with each of these operating models, providing differing levels of control over where the truck my scope for each of these various sub segments and applications within the broader market the opportunity to utilize AI technology is driven by simplicity of OTT value created per truck end market side, focusing on the high ROI chucking subs.
Segment that possess a simple ODT high value per truck and sufficient size will serve as an effective starting point for our rapid scaling one of our key insights when we found it embarked in 2016, but to simplify the problem, leading us and later much of AAV industry to trucking, we're now doubling down on this insight to deeply assess the submarkets within trucking to identify opportunities.
These to pull forward commercialization in a capital efficient manner and demonstrate our technology working in a commercial setting by focusing the problem I'll now turn the call over to bill. Thank.
Thank you Alex as we turn to slide 11, and bulk will hold a special meeting with shareholders on August 15th to build upon the reverse stock split will be participating at the Cowen Global transportation and sustainable mobility conference virtually on September 8th ball.
The bulk is also presenting during the September 27 to 28 at the move American Conference in Austin and on November 1st two that we will have a joint presentation with DHL at future Afraid festival in Chattanooga, Tennessee.
Once your earnings call, we announced our second annual embark day event to be held in September which was to take place on a new 50000 square foot headquarters in San Francisco, However, due to construction delays beyond our control we will pushback. This late summer time event. Once we have an updated timeline, we will provide more details operator, let's begin the question answer session.
Thank you we will now begin the question and answer session.
A question you May press Star then one on those lumps on phone.
Is there sort of a speaker phone.
Please remember handset before pressing the keys.
To withdraw your question. Please first of all of them too.
First question comes from Chris Wetherbee of Citi. Please go ahead.
Hey, great. Thanks, Good afternoon, guys. Thanks for taking the question.
I wanted to maybe start with the free cash flow guidance for the free cash spend guidance.
Wanted to get a sense of as you see the landscape now and some of the efficiencies that you've been able to generate on the cash burn side. What do you think you should have a runway of cash is from here and maybe if you can help sort of put that in context of your path to commercialization.
Yes.
Oh go ahead Alex.
I'm just curious so.
We obviously haven't given the 'twenty 'twenty three guidance yet.
We'll be going through the budgeting process for next year.
So again, we will look forward to sharing those specific numbers. When we have them that said I think you can look at the spend that we're forecasting for this year and expect that we're going to be on a.
Where we feel like we have most of the pieces in place to be able to get to commercialization and we're going to be really having a pretty focused level of growth between here and there and so I think what youll see this year is relatively reflective of what youll see next year, although we haven't given the guidance yet.
And the way that we see that fitting into the bigger picture.
Is that we think that this level of spending really is sufficient to deliver.
The things that we've planned out for this year, but also the rest of the capability roadmap and then ultimately.
To be able to get that commercialization started with our partners.
Okay. That's helpful and then on the truck transfer program could you just sort of walk us through what are the next sort of key steps. It sounds like there's the potential to sort of begin to delivery trucks to tonight. It later in the fourth quarter. So you'll have a few months ahead of you before that happens. So what are the key milestones keeping you need to get done you are ready to do that.
Any sense of what the scale of truck count moving over to night sort of towards the end of the year would look like.
Yeah. So the focus this program's been going quite well so far the focus between here and the end of the year is really on finalizing a lot of the integration pieces. So I think what's really exciting about this program is that it's.
It's taking trucks out of the lab and really putting them into our fleet and.
And that's something that we haven't really seen before in the industry and so what we've been doing is going through all the little snag that you had as you try to actually do that.
How do we train all the relevant maintenance staff now that they no longer work at embark how do we get the systems to be dispatched by dispatchers as part of regular fleet daily operation and so we're really excited about that because these are clearly necessary steps and we think that it is really laying the groundwork for embark to be able to deploy trucks at scale.
<unk> and have all of these problems solved already.
The size of the initial TDP deliveries is going to be relatively modest.
The way that.
And our partners have been talking about TDP is it's very similar to.
The early deployments that you see sometimes with new technologies, whether that evs.
Evs or its new brake components, we're really fleets want to take a small number of trucks be able to actually have their hands on them kick the tires, so to speak and do that for six to 12 months before they really start to take large deliveries and so we had the sequencing here to be able to do that.
Okay, and just one follow up on that is there any anything you mentioned supply chain earlier in the prepared remarks I just want to make sure is there anything from a supply chain perspective that might either limited or sort of potentially reduce the amount of vehicles or the timing in terms of transferring those over tonight.
Yeah, we have.
Certainly had the engineering team hard at work dealing with our fair share of our suppliers that they had trouble over the last couple of quarters, but we still feel like we're on track for the PDP program.
Okay. Thanks, very much for the time appreciate it.
Our next question comes from Todd Fowler Keybanc capital markets. Please go ahead.
Hey, great. Thanks, and good afternoon, I mean, maybe sticking a little bit with what Chris was just asking about.
Think about kind of the path to revenue generation, Alex is the PDP and the truck transfer with Knight is that the first step of that and does that lead to a revenue generation event into 'twenty three and then can you maybe speak to just how quickly once you've gone through that process, you can start to ramp and scale additional vehicles.
Yeah. So.
Really I think you should think about the bulk of the revenue starting in 'twenty four.
The as I mentioned these TEP things are really about making sure that there is readiness in the fleet acceptance as opposed to being of themselves a huge source of revenue and.
So I really think that the bulk of that ramp is going to be in 'twenty four.
And then just what about the scalability, so if youre able to put a handful of vehicles into service.
Once youre kind of you know.
Standing the requirements can it ramp pretty quickly after you're through kind of the initial phase with a handful of vehicles.
Supply chain constraints aside I guess.
Yeah.
I was going to say.
Our view and really the way that embark has been approaching this problem is to get all of the pieces ready to go so that at the time that you are starting to scale. It you are able to really stamp out a large number of vehicles.
That's why you see us talking about things like emergency vehicle interaction on a capability roadmap stuff that you haven't really seen from competitors and it's a little bit of a different approach and so I would definitely agree.
With what you said there that that the objective is to have the system at the point that we're starting to hand, it over it's really ready to be stamped out in a scalable way.
I do think that.
As we look into 'twenty four.
The ability to get your hands on the components of that will be a factor in how how big you can ramp it how quickly, but I do think that embarking or Atlanta face positions us well to manage that way, we're working with our fleet partners to determine.
Which platform, they're making individual orders on and making sure that there is some diversification there.
Got it.
One last one on the PDP side are you currently working with any other carriers, where you can do a close follow on after night or is this something that we should expect to see kind of the results and the transfer with night and then there's going to be a period, where there would be.
You're kind of working with another carrier to go through all the things that you want with night I'm, just kind of trying to get an understanding of how quickly you can dual track with other carriers to get trucks into their hands.
Yes, so we have an.
A number of top carriers in the PDP there five of the top 25 truckload carriers in the country that work with us in the PDP.
And each carrier.
We spend time really focusing on specific areas with them with the idea that the collective work across the PDP program ends up creating that master a playbook that can be used by everybody and so.
The work that we're doing with with Knight Swift I think it's really important work and particularly unique work in this space.
The goal is that thats being done in a way.
That can be.
It can be cross compatible where we're not needing to redo a bunch of work.
When you started sitting down with the next fleet.
Great good.
One last one and I'll turn it over.
Richard I don't know from the listing requirement standpoint is the only thing that really needs to happen is the shareholder vote on August 15th or is there anything else from a listing standpoint.
From the exchanges.
Yes, that's correct and Youll see by the end of the month upon a fluctuation we will receive a notice knowing that we've cleared and remedies.
The potential delisting.
Considerations with NASDAQ, we don't anticipate any issues.
Yeah, Okay, that's what I thought I just wanted to make sure. Thanks for the time Tonight.
And ladies and gentlemen, as a brief homeowners.
Question. Please first of all going along all of those.
Question comes from Jeff Kauffman of vertical research partners. Please go ahead.
Hi, guys.
Now, what's going on and congratulations.
So two questions Rich you gave guidance on.
This lower level of.
Free cash burn.
Tribute a lot of it to some operating efficiencies, but also being more selective with personnel is this.
A newer level of spend that we should think about as more of a go forward rate or is this.
Something where when we get to the end of the year you may have some of those expenses come back a little more aggressively in 2023.
Yes, good question.
So I think as Alex mentioned earlier, we obviously havent finalized our twenty-three budgeting process, but I do think looking at the current level of spend is probably a fair barometer of how we see more of a constant or a run rate on a go forward basis.
Okay, great. Thank you and just a detailed question can you break out the stock based comp between G&A and R&D.
Okay.
Yeah. So we haven't broken out in our filing which will be filed tomorrow. So maybe.
You'll see that disclosure when our 10-Q is filed.
Maybe that's probably the best way to all pointing to that for now until we have that finalized and in our SEC.
SEC filings.
Fine. Thank you and then.
One question for Alex Alex So there's three remaining technology.
Milestones that were still looking to solve do you have any.
Thoughts about the timeline in 2023 to approach the remaining three items.
Yeah. So so there is one more item for this year evasive maneuvers and then there's three phase so that we have scheduled for 2023.
We havent given additional guidance beyond the 'twenty three time line, but I will say that.
I actually had been on a number of calls this weekend.
There's a lot of work already underway to get some of these things off the ground. So.
We'll share more of that as we get into sort of laying out our plan for 'twenty three.
But there is a lot of work can actually wouldn't be surprised if you guys saw some stuff.
At least in terms of progress.
Additionally, before the end of the year.
Alright, well congratulations and thank you.
Thank you there are no further questions at this time, so I'd like to turn the conference back over to Ross for closing remarks.
Thank you operator this concludes our earnings call for today. Thank you everyone.
Thank you. This concludes today's call and have a wonderful day.