Q2 2024 Canoo Inc Earnings Call

Speaker Change: Thank you very much.

Unknown Speaker: John Wolf, John Wolf, John Wolf, John Wolf, John Wolf, John Wolf, John Wolf, Ruh, Ruh, Ruh, Ruh, Ruh, Ruh, Ruh, John Wolf, John Wolf, John Wolf, John Wolf, John Wolf, John Wolf, John Wolf, Ives, John Wolf, John Wolf, Murthy Murthy, John Wolf, John Wolf, John Wolf, Pavel Molchanov, M-M-M-M-M-M-M-M Ha-ha-ha-ha, E. E. E. E. E. E. E. Ha, Ha, Ha, Ha, Ha, Ha, Ha, Ha, Ives, John Wolf, John Wolf, Ives, John Wolf, Ives, John Wolf, John Wolf, Ladies and gentlemen, we thank you for your patience. Please stand by.

Unknown Executive: Ladies and gentlemen, thank you for your patience. Please stand by. The canoe event will begin shortly. Again, we thank you for your patience. Please continue to stand by. The canoe event will begin shortly.

Speaker Change: Ladies and gentlemen, we thank you for your patience. Please stand by. The Canoo event will begin shortly.

Unknown Speaker: The canoe event will begin shortly. Again, we thank you for your patience. Please continue to stand by. The canoe event will begin shortly. John Wolf, John Wolf, John, John Wolf, John Wolf, John Wolf, John Wolf, [music] E. E. E. E. E. E. E. E. E. E. E. E. Once again, ladies and gentlemen, we thank you for your patience.

Speaker Change: [music]

Unknown Speaker: Please continue to stand by. The canoe event will start shortly. [inaudible]. .. [inaudible].

Speaker Change: Once again, ladies and gentlemen, we thank you for your patience. Please continue to stand by. The canoe event will start shortly.

Speaker Change: Until Next Time

Speaker Change: [inaudible]

Unknown Speaker: .. Django Reinhart, Pre-quel In The Bird of Concealed Presence, Bye!

Speaker Change: guaranteed that these folks are four of a kind. And if you think that when these folks proved in the arms of the Lord they might have come to you with princesses, they became a ruler. So it was a very excellent thanks to Jesus that those people flourished. And there is no word on there but it seems as though you may have found peace of mind as you came since they're persona retrospective.

Unknown Speaker: Subs by www.zeoranger.co.uk, John Wolf, John Wolf, John Wolf, Check out more videos! Ruh, Ruh, Ruh, Ruh, Ruh, Ruh, Ruh, John Wolf, John Wolf, John Wolf, John Wolf, The End, [inaudible] E. E. E. E. E. E. E. John Wolf, John Wolf, John Wolf, Greetings and welcome to the Canoo second quarter 2024 earnings call. At this time, all participants are in a listen only mode.

Speaker Change: [music]

John Wolf: Greetings and welcome to the Canoo second quarter 2024 earnings call. At this time, all participants are in a listen-only mode. If anyone should require operator's assistance during the conference, please press star zero on your telephone keypad.

Unknown Speaker: If anyone should require operator assistance during the conference, please press star zero on your telephone key. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the call over to John Wolf, Vice President, Capital Markets and Investor Relations. Thank you, John. You may begin. Thank you, Paul.

Speaker Change: Greetings and welcome to the Canoo second quarter 2024 earnings call. At this time all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. A brief question and answer session will follow the formal presentation.

Unknown Executive: A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded.

John Wolf: I would now like to turn the call over to John Wolf by presenting Capital Markets and Investor Relations.

Speaker Change: As a reminder, this conference is being recorded.

Speaker Change: I would now like to turn the call over to John Wolf, Vice President, Capital Markets and Investor Relations. Thank you, John. You may begin.

Unknown Executive: Thank you, John. You may begin.

Unknown Executive: Thank you, Paul. Thanks everyone for joining us.

Unknown Speaker: Thanks, everyone, for joining us. Welcome to our Q2 2024 earnings call. During the call today, Tony will update you on our business and strategy, Greg will provide an update on our financing activities, and Ramesh will go over the Q2 financial results and discuss the OPEX and capital efficiencies we continue to generate. Please be advised that we may make forward-looking statements, based on current expectations. These are subject to significant risks and uncertainties, and our actual results may differ materially.

Anthony Aquila: Welcome to our Q2 2024 earnings call. During the holiday, voting will update you on our business and strategy. Greg will provide an update on our financing activities.

John Wolf: Thank you, Paul. Thanks, everyone, for joining us.

Speaker Change: Welcome to our Q2 2020 Floor Earnings Call.

Speaker Change: During the call today, Tony will update you on our business and strategy.

Anthony Aquila: And Ramesh will go over the Q2 financial results and discuss the optics and capital efficiencies we continue to generate. Please be advised that we may make forward-looking statements based on current expectations. These are subject to significant risks and uncertainties, and our actual results may differ materially.

Speaker Change: Greg will provide an update on our financing activities.

Speaker Change: Please be advised that we may make forward-looking statements.

Speaker Change: Based on current expectations.

Speaker Change: These are subject to significant risks and uncertainties, and our actual results may differ materially.

Unknown Speaker: For discussion of factors that could affect our future financial results and business, please refer to the disclosure in today's earnings release and on our most recent Form 10-Q and 10-K, and other reports that we may file with the SEC, including Form 8-K. All of our statements are made as of today and are based on information currently available to us. Except as required by law, we assume no obligation to update any such statement.

Anthony Aquila: The discussion of factors that could affect our future financial results and business, please refer to the disclosure in today's earnings release and on our most recent Form 10-Q and 10-K, and other reports that we may file with the SEC, including Form 8-Ks. All of our statements are made as of today and are based on information currently available to us. Except as required by law, we assume no obligation to update any such statements.

Speaker Change: for discussion of factors that could affect our future financial results and business.

Speaker Change: Please refer to the disclosure in today's earnings release and on our most recent Form 10-Q and 10-K, and other reports that we may file with the SEC, including Form 8-K's.

Speaker Change: All of our statements are made as of today and are based on information currently available to us. Except as required by law, we assume no obligation to update any such statements.

Anthony Aquila: During this call, we'll discuss non-GAAP financial measures. You can find a reconciliation of these non-GAAP financial measures to GAAP financial measures in today's earnings release, which can be found in the IR section of our website.

Unknown Speaker: During this call, we'll discuss non-GAAP financial measures. You can find a reconciliation of these non-GAAP financial measures to GAAP financial measures in today's earnings release, which can be found in the Investor Relations section of our website. With that, I'll hand it over to Tony.

Speaker Change: During this call, we'll discuss non-GAAP financial measures. You can find a reconciliation of these non-GAAP financial measures to GAAP financial measures in today's earnings release.

Unknown Executive: With that, I'll hand it over to you.

Speaker Change: which can be found in the IR section of our website. With that, I'll hand it over to Tony.

Anthony Aquila: Thanks, John. And thanks, everyone, for joining us today. We will review our recent achievements and give some insights into announcements we expect to conclude in the coming quarter. As we advance into manufacturing, we are finalizing build specs and configurations with our most significant customers. Once complete, we will align our supply chain and announce our projected delivery and allocation schedules for 2025 and into 2026.

Unknown Speaker: Thanks, John. And thanks, everyone, for joining us today. We will review our recent achievements and give some insights into announcements we expect to conclude in the coming quarter. As we advance into manufacturing, we are finalizing build specs and configurations with our most significant fleet customers. Once complete, we will align our supply chain and announce our projected delivery and allocation schedules for 2025 and into 2026. Now, turning to the quarter.

John Wolf: Thanks, John .

Me: And thanks, everyone, for joining us today.

Speaker Change: We will review our recent achievements and give some insights into announcements we expect to conclude in the coming quarter.

Speaker Change: As we advance into manufacturing, we are finalizing build specs and configurations with our most significant fleet customers.

Speaker Change: Once complete, we will align our supply chain and announce our projected delivery and allocation schedules for 2025 and into 2026.

Anthony Aquila: Turning to the quarter, Q224 was our largest revenue quarter, $605,000. Our lowest cash outflow was approximately 50% lower than Q223. On May 24th, we delivered our first right-hand drive, configured LDB 190s to the USPS. Approximately 75 days of male delivery in Atlanta, Georgia, and some of its seasonally wet, hot, and humid weather conditions. We recognize revenue from Phase 3 of our DOD-DIU, Battery Testing Program, awarded to us earlier this year. Our customers have logged over 34,000 miles of real-world industrial use cases. This team is called QRF, a quick reaction force, which functions similarly to military and aviation and has resonated well with our fleet government and military customers.

Unknown Speaker: Q2-24 was our largest revenue quarter, $605,000. Our Lowest Cash Outflow was approximately 50% lower than Q2-23. On May 24th, we delivered our first right-hand drive configured LBV190s to the USPS for approximately 75 days of mail delivery in Atlanta, Georgia, in some of its seasonally wet, hot, and humid weather conditions.

Speaker Change: Turning to the quarter.

Speaker Change: Q224 was our largest revenue quarter, $605,000.

Speaker Change: Our lowest cash outflow

Speaker Change: was approximately 50% lower than Q2-23.

Speaker Change: On May 24th we delivered our first right-hand drive configured LDB 190s to the USPS.

Speaker Change: Approximately 75 days of mail delivery in Atlanta, Georgia in some of its seasonally wet, hot and humid weather conditions.

Unknown Speaker: We recognized revenue from Phase 3 of our DOD-DIU, Battery Testing Program awarded to us earlier this year. Our customers have logged over 34,000 miles of real-world industrial use cases. The platform's stability is attributed to our extensive partnership testing with our customers over the past few years. Our SM model took its first step, service maintenance and repair. This team is called QRF, a quick reaction force, which functions similarly to military and aviation and has resonated well with our fleet, government and military customers.

Speaker Change: We recognized revenue from Phase 3 of our DOD-DIU Battery Testing Program awarded to us earlier this year.

Speaker Change: Our customers have logged over 34,000 miles of real-world industrial use cases. The platform's stability is attributed to our extensive partnership testing with our customers over the past few years.

Speaker Change: Our SM model took its first step, service maintenance and repair.

Speaker Change: This team is called QRF, a quick reaction force, which functions similarly to military and aviation, and has resonated well with our fleet, government, and military customers.

Anthony Aquila: We also successfully deployed our first OTA updates to customers to enhance functionality and benefits to client workflows, often within 48 hours from request. On June 24th, we received advanced manufacturing assets of the rival UK in Oklahoma, 44 containers, announced in the last quarter, with an additional six arriving this quarter for a total of 50 containers. We are in the process of commissioning these assets, which advances our focus on vertical integration. On July 29th, our OKC facilities, foreign trade zone designation was approved for full activation after inspection and approvals from U.S. Customs and Builder personnel. On the international front, we announced a 20 vehicle purchase agreement with Jazeera Paints, with the option to expand the 200 initial deliveries expected in late 2nd quarter of 24 and 1st quarter of 25.

Unknown Speaker: We also successfully deployed our first OTA updates to customers to enhance functionality and benefits to client workflows, often within 48 hours from request to update. On June 24th, we received advanced manufacturing assets of Arrival UK in Oklahoma, 44 containers announced in the last quarter, with an additional six arriving this quarter, for a total of 50 containers. We are in the process of commissioning these assets, which advances our focus on vertical integration. On July 29, our OKC Facility foreign trade zone designation was approved for full activation after inspection and approvals from U.S. Customs and Border Personnel.

Speaker Change: We also successfully deployed our first OTA updates to customers to enhance functionality and benefits to client workflows, often within 48 hours from request to update.

Speaker Change: On June 24th, we received Advanced Manufacturing Assets of Arrival UK.

Speaker Change: In Oklahoma, 44 containers announced in the last quarter, with an additional 6 arriving this quarter, for a total of 50 containers. We are in the process of commissioning these assets, which advances our focus on vertical integration.

Speaker Change: On July 29th, our OKC Facilities Foreign Trade Zone designation was approved for full activation after inspection and approvals from U.S. Customs and Border Personnel.

Unknown Speaker: On the International Front, we announced a 20 vehicle purchase agreement with Jazeera Ping, with the option to expand 200 initial deliveries expected in the late second quarter of 24 and first quarter of 25, with the quarter.

Speaker Change: On the international front, we announced a 20-vehicle purchase agreement with Gizehda Paints.

Speaker Change: with the option to expand to 200 initial deliveries expected in late 2020.

Speaker Change: second quarter of 24 and first quarter of 25.

Anthony Aquila: With the quarter, we had multiple debuts in the UK of our 130 and 190 LDBs of our right hand drive commercial platform and we hosted and attended numerous free shows and customer rides and drives on test tracks. On July 3rd, Red Sea Global concluded intense on-location testing in multiple environments. The pilot lasted 45 days in peak temperatures and conditions.

Unknown Speaker: We had multiple debuts in the UK of our 130 and 190 LDBs, our right-hand drive commercial platforms. And we hosted and attended numerous fleet shows and customer rides and drives on Test Track. On July 3rd, Red Sea Global concluded intense on-location testing in multiple environments. The pilot lasted 45 days in peak temperatures and conditions.

Speaker Change: With the quarter, we had multiple debuts in the UK.

Speaker Change: of our 130 and 190 LBVs of our right-hand drive commercial platform.

Speaker Change: And we hosted and attended numerous fleet shows and customer rides and drives.

Speaker Change: on test tracks.

Speaker Change: On July 3rd, Red Sea Global concluded intense on-location testing in multiple environments. The pilot lasted 45 days in peak temperatures and conditions.

Anthony Aquila: We received numerous design awards in the quarter, including the prestigious Red Dot Award, the Green Good Award, and the One to Watch at the Great British Fleet Show in the UK.

Unknown Speaker: We received numerous design awards in the quarter, including the prestigious Red Dot Award, the Green Good Award, and the One to Watch at the Great British Fleet Show in the UK. Now, let me give you a preview of what to expect from us in the coming quarter, finalizing customer configuration. We have been focused on locking down specifications with our large fleet customers, which will inform our production and allocations in 25 and visibility into 26.

Speaker Change: We received numerous design awards in the quarter, including the prestigious Red Dot Award, the Green Good Award, and the One to Watch at the Great British Fleet Show in the UK.

Anthony Aquila: Now, let me give you a preview of what to expect from us in the coming years. Finalizing customer configurations. We have been focused on locking down specifications with our large fleet customers, which will inform our production and allocations in 25 and visibility into 26. We continue refining our customer acquisition, partnership, fulfillment, and post delivery services model. which includes customer deployment and testing of vehicles configured for specific use cases and commercial terms and conditions expected by our clients. Walmart is an example. It was July of 2022 when we announced Walmart's order. We partnered with the Walmart team and completed two years of extensive testing and refining of specifications and use cases for our customers' workflow.

Speaker Change: Now, let me give you a preview of what to expect from us in the coming quarters.

Speaker Change: Finalizing Customer Configurations

Speaker Change: We have been focused on locking down specifications with our large fleet customers, which will inform our production and allocations in 25 and visibility into 26.

Unknown Speaker: We continue refining our customer acquisition, partnership fulfillment, and post-delivery services model, which includes customer deployment and testing of vehicles configured for specific use cases, and commercial terms and conditions expected by our clients. Walmart is an example.

Speaker Change: We continue refining our customer acquisition, partnership fulfillment, and post-delivery services model.

Speaker Change: which includes customer deployment and testing of vehicles configurated for specific use cases.

Speaker Change: and commercial terms and conditions expected by our clients.

Unknown Speaker: It was July of 2022 when we announced Walmart's order. We partnered with the Walmart team and completed two years of extensive testing and refining of specifications and use cases for our customer's workflow. And there are other examples of large customers in varying phases of how we work hand-in-hand to finalize specifications and schedules. With USPS, our modular platform, we believe is a good match with their need for a commercially available right-hand drive vehicle built for purpose. We are focused on the upcoming USPS RFP for electric vehicles expected later this year or in early Q1 of 25 for an estimated.

Speaker Change: Wal-Mart is an example. It was July of 2022 when we announced Wal-Mart's order. We partnered with the Wal-Mart team and completed two years of extensive testing and refining of specifications and use cases.

Anthony Aquila: And there are other examples of large customers in varying phases of how we work hand in hand to finalize specs and schedule. With USPS, our modular platform, we believe is a good match with their need for a commercially available right-hand drive vehicle built for purpose. We are focused on the upcoming USPS RFP for electric vehicles expected later this year or in early Q1 of 25 for an estimated 10,000 to 12,000 units in that RFP. More on international expansion targeting large fleet customers in our targeted geographies, the UK. They viewed at three commercial fleet shows in the quarter, engaged with eight of the 15 largest fleets.

Speaker Change: for our customers' workflows.

Speaker Change: And there are other examples of large customers in varying phases of how we work hand-in-hand to finalize specs and schedule.

Speaker Change: With USPS, our modular platform, we believe is a good match with their need for a commercially available right-hand drive vehicle built for purpose.

Speaker Change: We are focused on the upcoming USPS RFP for electric vehicles expected later this year or in early Q1 of 2025 for an estimated 10,000 to 12,000 units in that RFP.

Unknown Speaker: 10,000 to 12,000 units in that RFP. More on international expansion, targeting large fleet customers in our targeted geography. The U.K, debuted at three commercial fleet shows in the quarter, engaged with eight of the 15 largest fleets.

Speaker Change: More on international expansion, targeting large fleet customers in our targeted geographies.

Speaker Change: The U.K.

Speaker Change: debuted at three commercial fleet shows in the quarter, engaged with eight of the 15 largest fleets.

Unknown Speaker: Mandated EV adoption creates substantial tailwinds, and positive initial feedback, on RLDB 130 and LDB 190 vehicles as a unique fit for the UK LCD market. Configurations, Specifications, and Discussions for Expected Pilots to Start in Q4. Red Sea Global, Pilot Concluded Successfully; it was 45 days and over 3,000 miles in rigorous desert conditions, sand, and rock for 80% of the models, HEAT. 50% of the days were over 100 degrees with a max of 120 degrees Fahrenheit, and an average ambient temperature of 99 degrees.

Anthony Aquila: Man-dated EV adoption creates substantial tailwinds; positive initial feedback on our LBV 130 and LBV 190 vehicles as a unique fit for the UK LCD market. Configuration specifications, discussions for expected pilots to start in Q4. Red C Global pilot concluded successfully. It was 45 days over 3,000 miles in rigorous desert conditions. Sand rock for 80% of the models heat 50% of the days were over 100 degrees, with max of 120 degrees Fahrenheit and average Indian temperature of 99 degrees. We are focused on next steps as we outlined above about our customer engagement model. We continue to make targeted progress in our supply chain harmonization.

Speaker Change: Mandated EV adoption creates substantial tailwinds, positive initial feedback,

Speaker Change: on our LDB-130 and LDB-190 vehicles as a unique fit for the UK LCB market.

Speaker Change: Configurations, Specifications, Discussions for Expected Pilots to Start in Q4.

Speaker Change: Red Sea Global. Pilot concluded successfully. It was 45 days.

Speaker Change: Over 3,000 miles in rigorous desert conditions, sand, rock, for 80% of the miles, heat,

Speaker Change: 50% of the days were over 100 degrees, with max of 120 degrees Fahrenheit, and average ambient temperature of 99 degrees.

Unknown Speaker: We are focused on next steps as we outline above about our personal engagement mode. We continue to make targeted progress in our supply chain harmonization. During the week of August 5th, we held our inaugural supplier engagement event at our OKC facility. We hosted representatives from approximately half of our BOM, Suppliers. The suppliers were able to connect with our long-term vision through vehicle drives and factory tours. It was the first time we've been able to open up the factory for their visits.

Speaker Change: We are focused on next steps as we outlined above about our customer engagement model.

Anthony Aquila: During the week of August 5th, we held our inaugural supplier engagement event at our OKC facility. We hosted the representatives from approximately half of our bomb suppliers. The suppliers were able to connect with our long-term vision through vehicle drives and factory tours. It was the first time we've been able to open up the factory for their visits. We aligned on a path forward and continued to refine this as we ran production together in manufacturing phase. We continue to work on harmonizing our supply chain and finalizing our capital and debt instruments, including PO financing, especially since...

Speaker Change: We continue to make targeted progress in our supply chain harmonization. During the week of August 5th, we held our inaugural supplier engagement event at our OKC facility.

Speaker Change: We hosted representatives from approximately half of our BOM,

Speaker Change: Suppliers,

Speaker Change: The suppliers were able to connect with our long-term vision through vehicle drives and factory tours. It was the first time we've been able to open up the factory for their visits.

Unknown Speaker: We agreed on a path forward and continue to refine this as we ramp production together in the manufacturing phase. We continue to work on harmonizing our supply chain and finalizing our capital and debt instruments, including PO financing, especially since we only build and sell units for grade A, triple B, credit-worthy clients for 2025 and 2026. We expect this to reduce the cost of capital and maximize our flexibility to access other sources of capital, including incentives and non-diluted sources.

Speaker Change: We aligned on a path forward and continue to refine this as we ramp production together in the manufacturing phase.

Speaker Change: We continue to work on harmonizing our supply chain and finalizing our capital and debt instruments, including PO financing, especially since

Anthony Aquila: Chris, our only build, we only build sold units for great a triple B credit worthy clients for 2025 and 2026. We expect this to reduce the cost of capital and maximize our flexibility to access other sources of capital, including incentives and non-deludive sources. We are in discussions with multiple tier one financing partners. We expect more to follow at the appropriate time. Ramping up Oklahoma's workforce. As we accelerate the manufacturing phase, we are continuing the migration of our workforce to our Oklahoma and Texas facilities.

Speaker Change: We only build sold units for grade A, triple B, credit worthy clients.

Speaker Change: for 2025 and 2026. We expect this to reduce the cost of capital and maximize our flexibility to access other sources of capital, including incentives and non-diluted sources.

Unknown Speaker: We are in discussions with multiple Tier 1 financing partners, more to follow at the appropriate time. Building Oklahoma's workforce As we accelerate the manufacturing phase, we are continuing the migration of our workforce to our Oklahoma and Texas facilities. With that, I will now turn it over to Greg and look forward to answering questions after Ramesh's death.

Speaker Change: We are in discussions with multiple Tier 1 financing partners, more to follow at the appropriate time.

Speaker Change: Ramping Up Oklahoma's Workforce. As we accelerate the manufacturing phase, we are continuing the migration of our workforce to our Oklahoma and Texas facilities.

Greg Ethridge: With that, I will now turn it over to Greg and look forward to answering questions after your message is set.

Speaker Change: With that, I will now turn it over to Greg and look forward to answering questions.

Greg Ethridge: Thank you, Tony. I spend a lot of time with our team on the road with investors, customers, and suppliers. It's been gratifying to see our model play out despite a difficult macro environment, and I'm proud to see the progress we made every day and week with our team at Canoo.

Unknown Speaker: Thank you, Tony. I spend a lot of time with our team on the road with investors, customers, and suppliers. It's been gratifying to see our model play out despite a difficult macro environment, and I'm proud to see the progress made every day and week with our team at Canoo.

Speaker Change: after Ramesh's session.

Greg: Thank you, Tony.

Greg: I spend a lot of time with our team on the road with investors, customers, and suppliers. It's been gratifying to see our model play out despite a difficult macro environment and I'm proud to see the progress we made every day and week with our team at Canoo. I'm proud to see the progress we made every day and week with our team at Canoo.

Greg Ethridge: It's not always evident from the outside, but it's a lot of work to build a dynamic company that is positioned to win in the long term. It's important to be in the trenches with a dedicated team you trust that produces results. We have a lot of great things happening at Canoo, and as you can tell, we're excited to share them. Remember, our team is not focused on the short term, month to month or quarter to quarter, but is instead focused on the long game, putting the building blocks together for long term success and value appreciation.

Greg: It's not always evident from the outside, but it's a lot of work to build a dynamic company that is positioned to win in the long term, and it's important to be in the trenches with a dedicated team you trust that produces results.

Unknown Speaker: It's not always evident from the outside, but it's a lot of work to build a dynamic company that is positioned to win in the long term. And it's important to be in the trenches with a dedicated team you trust that produces results. And it's a lot of work to build a dynamic company that is positioned to win in the long term. We have a lot of great things happening at Canoo, and as you can tell, we're excited to share them.

Unknown Speaker: Remember, our team is not focused on the short-term month-to-month or quarter-to-quarter, but are instead focused on the long game, putting the building blocks together for long-term success and value appreciation. And it's been volatile. We appreciate our supporters, customers, suppliers, investors, and other partners. Shifting to capital and resources. Not every team has a chance to work with a visionary CEO like Tony that has built global businesses in the past and is also a large funding partner. We're fortunate to have him leading our team.

Speaker Change: We have a lot of great things happening at Canoe, and as you can tell, we're excited to share them. Remember, our team is not focused on the short-term month-to-month or quarter-to-quarter, but are instead focused on the long game, putting the building blocks together for long-term success and value appreciation.

Greg Ethridge: It's been volatile. We appreciate our supporters, customers, suppliers, investors, and other partners. Shifting the capital and resources, not every team has a chance to work with a visionary CEO like Tony that has built global businesses in the past and is also a large funding partner. We're fortunate to have him leading our team.

Speaker Change: And it's been volatile. We appreciate our supporters, customers, suppliers, investors, and other partners.

Speaker Change: Shifting to capital and resources. Not every team has a chance to work with a visionary CEO like Tony that has built global businesses in the past and is also a large funding partner. We're fortunate to have him leading our team.

Unknown Speaker: Growth doesn't take place in a straight line and we need to be nimble and make tough choices at each phase. As you've heard from us before, our capital-raising efforts are designed to carefully match the needs of our business while minimizing dilution. During the quarter, we raised $40 million of capital, which purposefully matched our cash outflows.

Greg Ethridge: Growth doesn't take place in a straight line, and we need to be nimble and make tough choices at each phase. As you've heard from us before, our capital raising efforts are designed to carefully match the needs of our business while minimizing dilution. During the quarter, we raised 40 million of capital, which purposely matched our cash outflows. The funding allowed us to progress on manufacturing to pursue significant testing and to engage new customer deployments.

Speaker Change: Growth doesn't take place in a straight line, and we need to be nimble and make tough choices at each phase.

Speaker Change: As you've heard from us before, our capital raising efforts are designed to carefully match the needs of our business while minimizing delusion. During the quarter, we raised 40 million of capital, which purposely match our cash outflows. We are now at the end of the quarter. We are now at the end of the quarter. We are now at the end of the quarter.

Unknown Speaker: The funding allowed us to progress our manufacturing, to pursue significant testing, and to engage new customer deployments. The capital markets remain choppy, but the company has been creative and scrappy. Our funding success reflects consistent access to capital from a wide variety of sources, but it is a careful balance as we navigate the landscape. During Q2, we were able to secure financing, which was 35% prepaid advance, 40% from our partners at AFBP Partners, Preferred Convert, and 25% creatively structured as an advance on a tax refund. This quarter represents the first time we've raised a material amount of capital from non-dilutive sources, and we are pursuing others.

Speaker Change: The funding allowed us to progress our manufacturing, to pursue significant testing, and to engage new customer deployments.

Greg Ethridge: The capital markets remain choppy, but the company has been creative and scrappy. Our funding success reflects the consistent access to capital from a wide variety of sources, but it's carefully balanced, but it is a careful balance as we navigate the landscape. During Q2, we were able to secure financing, which was 35% prepaid advance, 40% from our partners, the AFVP partners, preferred convert, and 25% creatively structured as an advance on a tax refund. This quarter represents the first time we've raised a material amount of capital from non-delutive sources, and we are pursuing others. Thus far in Q3, we have access funding from the PPA to bring total year-to-date capital raised of 104 million.

Speaker Change: The capital markets remain choppy, but the company has been creative and scrappy. Our funding success reflects the consistent access to capital from a wide variety of sources.

Speaker Change: But it is a careful balance as we navigate the landscape. During Q2, we were able to secure financing, which was 35%

Speaker Change: Prepaid advance.

Speaker Change: 40% from our partners at AFVP Partners, Preferred Convert, and 25% Creatively Structured as an Advance on a Tax Refund.

Speaker Change: This quarter represents the first time we've raised a material amount of capital from non-dilutive sources, and we are pursuing others. Thus far in Q3, we have accessed funding from the PPA to bring total year-to-date capital raised of $104 million.

Unknown Speaker: Thus far in Q3, we have accessed funding from the PPA to bring total year-to-date capital raised of $104 million. We are continually evaluating financing opportunities that best limit shareholder dilution and we have been actively marketing Canoo with funds and family offices with a range of financial flexibility to continually diversify our shareholder base. We have been pleased with the significant number of financing opportunities we have been able to evaluate.

Greg Ethridge: We are continually evaluating financing opportunities that best limit shareholder delusion, but we have been actively marketing community with funds and family offices with a range of financial flexibility to continually diversify our shareholder base. We have been pleased with a significant number of financing opportunities we have been able to evaluate.

Speaker Change: We are continually evaluating financing opportunities that best limit shareholder dilution, and we have been actively marketing Canoo with funds and family offices with a range of financial flexibility to continually diversify our shareholder base.

Unknown Speaker: Additionally, the substantial daily dollar volume of our shares of around $6 to $7 million a day enhances options in accessing equity capital markets. But we do need to take a balanced approach. And as Ramesh will share, we have been very focused on managing our capital and outflow. Further, we recently were added to the Russell Indexes, and we believe this makes us an attractive option for institutional investors as we move forward. We will continue to manage the finances with our broader team in a disciplined way and raise incremental capital that meets the needs of the business advancing into manufacturing. Now I will hand it over to Ramesh to cover the financial section. Thank you, Greg.

Greg Ethridge: Additionally, the substantial daily dollar volume of our shares of around 6 to 7 million a day enhances options in accessing equity capital markets.

Speaker Change: We have been pleased with the significant number of financing opportunities we have been able to evaluate. Additionally, the substantial daily dollar volume of our shares of around $6 to $7 million a day enhances options in accessing equity capital markets.

Greg Ethridge: Ives. But we do need to take a balanced approach. And as Ramesh will share, we have been very focused on managing our capital and outflows. Further, we recently were added to the Russell Indexes, and we believe this makes us an attractive option for institutional investors as we move forward. We will continue to manage the finances with our broader team in a disciplined way and raise incremental capital that meets the needs of the business advancing in the manufacturing.

Speaker Change: But we do need to take a balanced approach. And as Ramesh will share, we have been very focused on managing our capital and outflows.

Ramesh: Further, we recently were added to the Russell Indexes, and we believe this makes us an attractive option for institutional investors as we move forward.

Speaker Change: We will continue to manage the finances with our broader team in a disciplined way and raise incremental capital that meets the needs of the business advancing into manufacturing. Now I will hand it over to Ramesh to cover the financial section.

Ramesh Murthy: Now we will hand it over to Ramesh to cover the financial section.

Ramesh Murthy: Thank you, Greg.

Unknown Speaker: Now let me walk you through the results for the second quarter of fiscal year 2024. We continue to focus on our financial discipline. Key accomplishments include the following. As Tony mentioned, we had a record revenue of $605,000 in this portal, derived from our USPS delivery and the Defense Innovation Unit's contract. Moving to the income statement.

Ramesh Murthy: Now let me walk you through the results for the second quarter of fiscal year 2024. We continue to focus on our financial discipline. Key accomplishments include the following.

rematch: Thank you Greg. Now let me walk you through the results for the second quarter of fiscal year 2024. We continue to focus on our financial discipline.

Ramesh Murthy: As Tony mentioned, we had a record revenue of $605,000 in this quarter, derived from our USPS delivery and the Defense Innovation Units contract.

rematch: Key accomplishments include the following.

rematch: As Tony mentioned, we had a record revenue of $605,000 in this portal, derived from our USPS delivery and the Defense Innovation Unit's contract.

Ramesh Murthy: Moving to the income statement, our second quarter 2024 results are as follows. Research and development expenses total 16.8 million for the quarter, primarily compared to 38.6 million in the prior year period, a 56% reduction from Q2 of 2023. Our expenses were primarily driven by final engineering improvements, support for our pilot programs, and testing as well. SG&A expenses excluding stock base compensation total 20 million dollars for the quarter compared to 23.9 million in the prior year period, a 16% reduction from Q2 of 2024. The Q2 of 2024 also reflects a 11% sequential reduction when compared to the prior quarter of Q1 24.

Unknown Speaker: Our second quarter 2024 results are as follows. Research and development expenses totaled $16.8 million for the quarter, primarily compared to $38.6 million in the prior year period, a 56% reduction from Q2 of 2023. Our expenses were primarily driven by final engineering improvements, support for our pilot programs, and testing as well. SG&A expenses, excluding stock-based compensation, totaled $20 million for the quarter, compared to $23.9 million in the prior year period, a 16% reduction from Q2 of 2025.

Speaker Change: Moving to the income statement.

Speaker Change: Our second quarter 2024 results are as follows. Research and development expenses totaled $16.8 million for the quarter, primarily compared to $38.6 million in the prior year period, a 56% reduction from Q2 of 2023.

Speaker Change: Our expenses were primarily driven by final engineering improvements, support for our pilot programs, and testing as well.

Speaker Change: SG&A expenses, excluding stock-based compensation, total $20 million for the quarter, compared to $23.9 million in the prior year period, a 16% reduction from Q2 of 2024.

Unknown Speaker: The Q2-24 also reflects an 11% sequential reduction when compared to the prior quarter of Q1-24. As it relates to our key non-gap metrics, here is the summary. 38% or a $23.7 million negative quarterly adjusted EBITDA improvement from negative $62.3 million in Q2 of 2023 to negative $38.6 million in Q2 of 2024. 20.1% or a $9.7 million quarterly adjusted EBITDA improvement from negative $48.3 million in Q1 of 2024 to negative $38.6 million in Q2 of 2024.

Speaker Change: The Q2-24 also reflects a 11% sequential reduction when compared to the prior quarter of Q1-24.

Ramesh Murthy: As it relates to our key non-GAAP metrics, here is a summary. 80.6% or negative 2.5% adjusted net loss per share improvement from negative 3.14 per share in Q2 of 2023 to negative 0.61 per share in Q2 of 2024.

Speaker Change: As it relates to our key non-GAAP metrics, here is a summary.

Speaker Change: 38% or a $23.7 million negative quarterly adjusted EBITDA improvement from $-62.3 million in Q2 of 2023 to $-38.6 million in Q2 of 2024.

Speaker Change: 20.1% or $9.7 million quarterly adjusted EBITDA improvement from negative $48.3 million in Q1 of 2024 to negative $38.6 million in Q2 of 2024.

Speaker Change: 80.6% or negative 2.5% adjusted net loss per share improvement from negative 3.14 per share and Q2 of 23, the negative 0.61 per share and Q2 of 2024.

Ramesh Murthy: Now, turning to the cash flow statement, we ended the quarter with cash, cash equivalents, and restrictive cash of 19.1 million. Net cash provided by financing activities for the three months ended June 30 at 2024 was 38.7 million compared to 76.2 million in the prior year period. Cash used in operations for the three months ended June 30 at 2024 was 35.9 million compared to 62.3 million in the prior year period. 35.9 million cash outflow for the quarter is towards the lower end of the previous guidance provided in April of 2024. We will continue to optimize our working capital needs now and in future courts.

Unknown Speaker: 80.6% or negative 2.53 adjusted net loss per share improvement from negative 3.14 per share in Q2 of 2023 to negative 0.61 per share in Q2 of 2024. Now, turning to the cash flow statement. We ended the quarter with cash, cash equivalents, and restricted cash of $19.1 million. Net cash provided by financing activities for the three months ended June 30th, 2024 was 38.7 million compared to 76.2 million in the prior year period. Cash used in operations for the three months ended June 30, 2024 was $35.9 million, compared to $62.3 million in the prior year period.

Speaker Change: Now, turning to the cash flow statement.

Speaker Change: We ended the quarter with cash, cash equivalents, and restricted cash of $19.1 million.

Speaker Change: Net cash provided by financing activities for the three months ended June 30, 2024 was $38.7 million, compared to $76.2 million in the prior year period.

Speaker Change: Cash used in operations for the three months ended June 30, 2024 was $35.9 million compared to $62.3 million in the prior year period.

Unknown Speaker: 35.9 million cash outflow for the quarter is towards the lower end of the previous guidance provided in April of 2024. We will continue to optimize our working capital needs, now and in future court. Akash Outflows from Investing Activities was two million for the three months ended June 30, 2024, compared to 15.5 million in the prior period.

Speaker Change: 35.9 million cash outflow for the quarter is towards the lower end of the previous guidance provided in April of 2024. We will continue to optimize our working capital needs now and in future courts. We will continue to optimize our working capital needs now and in future courts.

Speaker Change: A cash outflows from investing activities was 2 million for the three months ended June 30, 2024, compared to 15.5 million in the prior period.

Unknown Speaker: We reaffirm our cash guidance as we have come in the lower range of the spend. As we continue to focus on manufacturing, as well as move into our Oklahoma facility. These, additionally, based on our current projections, due to the pacing of capital and supply chain harmonization, we expect our adjusted EBITDA to be between negative $120 million to negative $140 million for the second half of 2024. Let me turn it back to Tony for closing remarks. Tony?

Ramesh Murthy: Our cash guidance, as we have come in the lower range of the spend, as we continue to focus on manufacturing, as well as move into our Oklahoma facilities.

Speaker Change: We reaffirm our cash guidance as we have come in the lower range of the spend.

Speaker Change: As we continue to focus on manufacturing, as well as move into our Oklahoma facilities.

Ramesh Murthy: These additionally, based on our current projections due to the pacing of capital and supply chain harmonization, we expect our adjusted EBITDA to be between negative 120 million to negative 140 million.

Speaker Change: Additionally, based on our current projections,

Speaker Change: Due to the pacing of capital and supply chain harmonization, we expect our adjusted EBITDA to be between negative $120 million to negative $140 million for the second half of 2024.

Anthony Aquila: For the second half of 2024, let's be toned back to Tony for closing remarks.

Anthony Aquila: Tony. Thank you, everyone, for joining us today, and we look forward to answering some questions. I would like to do a special thanks out to the teams that worked incredibly hard during our tests in the United Kingdom, Saudi Arabia. These were extensive long deployments and often put in use cases in weather conditions that were extreme. We love testing our vehicle in the worst conditions possible. This is the best way to build the character of the vehicle, and it's a tribute to the perseverance, innovation, and creativity coupled with the scrappiness of a hungry team.

Speaker Change: Let me turn it back to Tony for closing remarks. Tony?

Unknown Speaker: [inaudible] Thank you everyone for joining us today and we look forward to answering some questions. I would like to do a special thanks out to the teams that worked incredibly hard during our test and, United Kingdom, Saudi Arabia, these were extensive long deployments and often put in use cases in weather conditions that were extreme. We love testing our vehicle in the worst conditions possible.

Speaker Change: Thank you, everyone, for joining us today, and we look forward to answering some questions. I would like to do a special thanks out to the teams that worked incredibly hard during our testing.

Speaker Change: United Kingdom.

Speaker Change: Saudi Arabia. These were extensive, long deployments.

Speaker Change: and often put in use cases in weather conditions that were extreme. We love testing our vehicle in the worst conditions possible. This is the best way to build the character of the vehicle. And it's a tribute to the perseverance, innovation, and creativity.

Unknown Speaker: This is the best way to build the character of the vehicle. This is the best way to build the vehicle. And it's a tribute to the perseverance, innovation and creativity, coupled with the scrappiness of a hungry team. And therefore, on behalf of the executive team, we thank all of you. And in addition to that, we'd like to give our thanks to the supporters. It's been great, and across multiple continents, we look forward to advancing in the quarter and bringing some more. Progressive and Meaningful and Value Creating News, ahead, with that. Turn it back to John's question. Paul, we've made the poll for questions now.

Anthony Aquila: And therefore, on behalf of the executive team, we thank all of you. And in addition to that, we'd like to give our thanks to the supporters who have been great and across multiple continents. We look forward to advancing in the quarter and bringing to more progressive and meaningful and value creating news ahead.

Speaker Change: coupled with the scrappiness of a hungry team and therefore on behalf of the executive team we thank all of you

Speaker Change: And in addition to that, we'd like to give our thanks to the supporters.

Speaker Change: have been great and across multiple continents. We look forward to advancing in the quarter and bringing some more.

Speaker Change: Progressive and Meaningful and Value-Creating News, ahead.

Speaker Change: Get back, turn it back to John's questions.

Unknown Executive: Paul, we'd like to pull for questions now. Thank you. Well, now we can do a question and answer session. If you'd like to ask questions, please press star one on your telephone keypad. The confirmation tone will indicate your line is in the question to you. You may press star two to remove your question from the queue.

John Wolf: Paul, we'd like to hold for questions now. Thank you.

Unknown Speaker: Thank you. We will now 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 to remove your question from the queue.

Speaker Change: We will now 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 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.

Unknown Executive: For participants using speaker equipment and maybe necessary to pick up your hand step before crossing the start keys. One moment, please, while we pull for questions. Thank you.

Unknown Speaker: For participants using speaker equipment, it may be necessary to pick up your hand step before crossing the start [inaudible] One moment, please, while we poll for questions. Thank you. Our first question is from Dan Ives with Wedbush Securities. Please proceed with your question. Yeah, thanks, and good job on the progress. Porter.

Michael Legg: Our first question is from Dan is with Wed Bush Securities. Please proceed with your question. Yeah, thanks. And the good job in the progress this quarter.

Speaker Change: Thank you. Our first question is from Dan Ives with Wedbush Securities. Please proceed with your question.

Unknown Speaker: So could you just like in terms of the capital rate, do you expect it's going to be the same? Every quarter, given the needs. Whatever the capital, you'll be able to read.

Dan I: Yeah, thanks, and good job on the progress.

Anthony Aquila: So could you just like in terms of the capital rate, do you expect it's going to be the scene at recorder, given the needs, whatever the capital you'll be able to raise. And sort of that philosophy will continue from next to you at least you quarter. Yeah, I think that's a great question, Dan. So, you know, to kind of dig deeper into that. So, as you know, Dan, I've been criticized for raising, you know, incremental capital. You know, I do believe, as you know, we've discussed that, you know, the more money a company has that we've seen from some of the others that have fallen, if the bone right gets too high.

Dan I: this quarter. So could you just like in terms of the capital rate, do you expect it's going to be the same?

Speaker Change: Every quarter, given the needs, whatever the capital you'll be able to raise. And sort of that philosophy will continue for the next at least few quarters.

Unknown Speaker: And sort of that philosophy will continue for the next, at least a few quarters. Yeah, I think that's a great question, Dan. So, you know, to kind of dig deeper into that. So, as you know, Dan.

Speaker Change: [inaudible]

Unknown Speaker: I think that's a great question, Dan. I've been criticized for raising incremental capital. I do believe, as you know, we've discussed that. You know, the more money a company has, if we've seen from some of the others that have fallen, if the bonerick gets too high. You know, we focused on being scrappy, funding the company based on milestones. [inaudible] and Key Events.

Speaker Change: I've been criticized for raising, you know, incremental capital. You know, I do believe, as you know, we've discussed that...

Speaker Change: You know, the more money a company has, as we've seen from some of the others that have fallen, the burn rate gets too high. You know, we focused on being scrappy, funding the company based on milestones.

Anthony Aquila: You know, we've focused on being scrappy, funding the company based on milestones and key events. And I think that is really actually started to turn to the favor of how the business is learned to operate. And we'll continue to do that because, you know, right now, from my personal perspective and perspective of our executive team, you know, we're way under par. And so therefore, you know, it makes no sense to do anything other than to do exactly as we're doing during these volatile capital markets. Right.

Unknown Speaker: And I think that is where we actually started to turn things around in favor of how the business is going to operate. And we'll continue to do that because, you know, right now, from my personal perspective and the perspective of our executive team, you know, we're way under par. And so, therefore, you know, it makes no sense to do anything other than to do exactly as we're doing in these volatile capital markets. All right, and um, in terms of just, when you think about order, flow, and demand... It just depends on customers that are coming through Oklahoma. Does it feel like...

Speaker Change: and Key Events. And I think that is where we actually started to turn to the favor of how the business is learned to operate.

Speaker Change: And we'll continue to do that because, you know, right now, from my personal perspective and perspective of our executive team, you know, we're way under par.

Speaker Change: And so therefore, you know, it makes no sense to do anything other than to do exactly as we're doing during these volatile capital markets.

Anthony Aquila: And in terms of just what when you think my order flow and demand and, you know, just depends on customers that better come in through Oklahoma and it doesn't feel like the conversations are changing like they're the relative to what they like six months ago, to where they are today. I think when you sign up for a test with a customer, like we won't even write an order unless we've actually, you know, had our wheels on the ground with the customer and their workflow. So I think that has changed the conversation. Our conversations have steadily progressed.

Speaker Change: All right. And in terms of just...

Speaker Change: When you think about order, flow, and demand,

Speaker Change: It just depends on the customers that are coming through Oklahoma.

Unknown Speaker: Conversations are changing like they're like relative to it's like six months, to where they are. I think when you sign up for a test with a customer like we won't even write an order unless we we've actually, You know, had our wheels on the ground, with the customer and their work. So I think that has changed the conversation.

Speaker Change: Does it feel like...

Speaker Change: The conversations are changing relative to what they were six months ago to where they are today.

Speaker Change: I think when you sign up for a test with a customer, like we won't even write in order unless we've actually...

Speaker Change: you know, had our wheels on the ground.

Speaker Change: with the customer and their workflow.

Unknown Speaker: Our conversations have steadily progressed. And I think also, you know, going back to being criticized in the beginning heavily about shifting to just fleets and government and military focus, these are the mandated markets. They are resistant to the economic because the policy-driven activities is those deep institutional coupled with the fact that we built a platform that gives a return on capital for our clients. So the conversations have been advancing right down to the specifications because our platform allows for some built for purpose. [inaudible] modifications on the assembly line. So, that has... Sounded really well.

Speaker Change: So I think that has changed the conversation. Our conversations have steadily progressed.

Anthony Aquila: And, and I think also, you know, going back to being criticized in the beginning, heavily about shifting to just fleets and government military focus. These are the mandated markets. They are resistant to the economic because the policy driven activities is those deconstitutional coupled with the fact that we built a platform that gets a return on capital for our clients. So the conversations have been advancing right down to the specifications because our platform allows for some built-for-purpose modifications on the assembly line. So that has done really well. People like things like our quick, you know, reaction force, you know, 86% of all the activities over the quarter was over the air, you know, only having to deploy advanced teams. And I think focusing in on customers that we can domino into markets like the US Post Office, helping us launch into the UK and another right hand drive markets so that we can get in, you know, with getting our, our, our FTC approval actives now and the ability to build a couple of millions more square feet on our site.

Speaker Change: And I think also, you know, going back to being criticized in the beginning heavily about shifting to just fleets and government and military focus, these are the mandated markets.

Speaker Change: They are resistant to the economic because they're policy-driven activities, as well as deep institutional, coupled with the fact that we built a platform that gives a return on capital for our clients.

Speaker Change: So the conversations have been advancing right down to the specifications, because our platform allows for some built-for-purpose.

Speaker Change: Modifications on the assembly line

Unknown Speaker: People like things like our quick, you know, reaction force. You know, 86% of all the activities over the quarter was over the air, with you know only having to deploy advanced teams and I think focusing in on customers that we can domino into markets like the US Post Office helping us launch into the UK, and other right-hand drive markets, so that we can get in, you know, getting our, Our FTZ approval actives now and the ability to build a couple of millions more square feet on our site.

Speaker Change: So that has done really well. People like things like our quick, you know, reaction force, you know, 86% of all the activities over the quarter was over the air.

Speaker Change: yet, you know, only having to deploy advanced teams. And I think focusing in on customers that we can domino into markets like the U.S. Post Office, helping us launch into the UK.

Speaker Change: and other right-hand drive markets so that we can get in, you know, getting our

Speaker Change: are dead

Speaker Change: FPV approval actives now and the ability to build a couple millions more square feet on our site.

Unknown Speaker: You know, we have the ability to entice partners to bring in partners into the area as they become partners in our global expansion and delivery of our platform. And obviously, it reduces our bond costs, which makes it more cost efficient for our customers. We're very focused on having the most affordable and the most durable. And when you sign up for the worst tests, like, we love it, because we learn something, and we often modify something, and it makes our product better. Most people don't like signing up for those things.

Anthony Aquila: You know, we have the ability to entice partners to bring into the area as they become partners to our global expansion and delivery of our platform. And obviously, it reduces our bond costs, which makes it more cost efficient for our customers. We're very focused on having the most affordable and the most durable. And when you sign up for the worst test, like we love it because we learn something, and we often modify something, and it makes our product better. Most people don't like signing up for those things in this industry. You probably heard a few that have, but this is where we like to start.

Speaker Change: You know, we have the ability to entice partners to bring into the area as they become partners to our global expansion and delivery of our platform. And obviously, it reduces our bottom cost, which makes it more cost efficient for our customers. We're very focused.

Speaker Change: on having the most affordable and the most durable.

Speaker Change: and when you sign up for the worst tests like we love it.

Speaker Change: Because we learn something, and we often modify something, and it makes our product better. Most people don't like signing up for those things. In this industry, you probably heard few that have. But this is where we like to start.

Unknown Speaker: In this industry, you probably have heard few that have. But, this is where we like to start. Thank you. Our next question is from Michael Legg with The Benchmark Company. Please proceed with your question. Thanks. Impressive print, guys.

Unknown Executive: Great. Thanks. Thank you.

Speaker Change: Great. Thank you.

Michael Legg: Our next question is from Michael Legg with the Benchmark Company. Please proceed with your question.

Speaker Change: Thanks Gengaro.

Speaker Change: Thank you. Our next question is from Michael Legg with The Benchmark Company. Please proceed with your question.

Anthony Aquila: Thanks. And Professor Frank, guys, nice to see all the progress being made. I wanted to dig down a little bit into the supplier event you had and understand the supply chain where it's positioned today. How are we, you know, with suppliers moving forward with this? You know, it obviously appears that a lot of the fleet orders soon to be on the horizon. It's kind of give us a walk through where we are supply chain wise, please.

Michael Lange: Thanks. Impressive print, guys. It's nice to see all the progress being made. I wanted to dig down a little bit into the supplier event you had and understand the supply chain, where it's positioned today.

Unknown Speaker: It's nice to see all the progress being made. Wanted to dig down a little bit into the supplier event you had and understand the supply chain, where it's positioned today. How are we, you know, with suppliers, moving forward with this? You know, it obviously appears that a lot of the fleet orders seem to be on the horizon.

Speaker Change: How are we?

Speaker Change: With suppliers moving forward, it obviously appears that a lot of the fleet orders seem to be on the horizon. So just kind of give us a walkthrough of where we are supply chain-wise, please.

Anthony Aquila: Yeah, so look, I think, you know, we have a debt to pay to our suppliers for their patience. You know, because when I took over the business, I changed the direction of the company, which, which, which had an implication to, you know, many of our supporting suppliers. You know, we went to a military grade product, industrial grade, repair ability, redesign, you know, so we threw a lot of shock into the system, completely different customer base. And, you know, we have to kind of reharmonize all of that. You know, we are at a place now, and that's why we have the event, which, which about 52% of the, of the bomb was represented at the event.

Unknown Speaker: So just kind of give us a walkthrough of where we are supply chain wise, please. Yeah, so look, I think, you know, we, we have a debt to pay to our suppliers for their patience, you know, because when I took over the business I changed the direction of the company, which had an implication to, you know, many of our supporting suppliers. You know, we went to a military grade product.

Speaker Change: yeah so look I think you know we we have a debt to pay to our suppliers for their patience you know when I took over the business I changed the direction of the company

Speaker Change: which had an implication to, you know, many of our supporting suppliers.

Unknown Speaker: Industrial Grade, Repairability, Redesign, you know, so we threw a lot of shock into the system. Completely different customer base, and, you know, We have to kind of reharmonize all of that. You know, we are at a place now, and that's why we had the event, where about 52% of the bomb was represented at the event.

Speaker Change: We went to a military-grade product, industrial-grade, repairability, redesign, so we threw a lot of shock into the system, completely different customer base.

Speaker Change: Um...

Speaker Change: and, you know,

Speaker Change: We have to kind of re-harmonize all of that. You know, we are at a place now, and that's why we had the event, which about 52% of the bomb was represented at the event.

Anthony Aquila: They got to see the factory, how it's coming together, how we're doing it in phases, how we're scaling, according, you know, to volume and capex, so we don't get ahead of ourselves, like others. And, and, you know, then we put the people behind the wheel and put them in aggressive driving conditions, which they had a blast. And, you know, that really created a connection for them with what the pieces they've been supplying or the pieces we've been changing on them; they got to see the why, because we put them in an aggressive, you know, test track environment.

Unknown Speaker: They got to see the factory, how it's coming together, how we're doing it in phases, how we're scaling according, you know, to volume and capex so we don't get ahead of ourselves like others, and then we put the people behind the wheel and put them in aggressive driving conditions, which they had a blast. And, you know, that really created a connection for them with what the pieces they've been supplying or the pieces we've been changing on them. They got to see the why, because we put them in an aggressive, you know, test track and bars.

Speaker Change: They got to see the factory, how it's coming together, how we're doing it in phases, how we're scaling according to volume and capex so we don't get ahead of ourselves like others.

Speaker Change: Then we put the people behind the wheel and put them in aggressive driving conditions, which they had a blast.

Speaker Change: And, you know, that really created a connection for them with what the pieces they've been supplying or the pieces we've been changing on them, they got to see the why, because we put them in an aggressive, you know, test track environment.

Unknown Executive: Ladies and gentlemen, thank you for your patience. Please stand by. The canoe event will begin shortly. Again, we thank you for your patience. Please continue to stand by. The canoe event will begin shortly.

Unknown Speaker: Similar to the way we tested with our customers, and they walked away proud. And that means a lot. We now need to harmonize our capital into our supply chain. But we won't do that until we lock our high volume customers' specs down. So we can actually, because remember, our model is we only build sold units. I want to get out of the business of building to sell, and I want to be very tightly integrated on multiple levels with our clients on a multi-year basis.

Anthony Aquila: Similar to the way we tested with our customers, and they walked away proud, and that means a lot.

Speaker Change: similar to the way we tested with our customers and they walked away proud and that means a lot. We now need to harmonize our capital into our supply chain but we won't do that until we lock

Anthony Aquila: We, we now need to harmonize our capital into our supply chain, but we won't do that until we lock our high volume customers' specs down. So we can actually, because remember our model is we only build sold units. I want to get out of the business of building to sell. And, and I want to be very tightly integrated on multiple levels with our clients on a multi-year basis. And, and that, that is what we're focused on every single day with our supply chain now.

Speaker Change: are our high volume customers, specs down. So we can actually, because remember our model is we only build sold units.

Speaker Change: I want to get out of the business of building to sell, and I want to be very tightly integrated on multiple levels with our clients on a multi-year basis.

Unknown Speaker: And that is what we're focused on every single day with our supply chain now. We had put them on a bit of a holding cycle until we could get to this phase. You know, we got lucky in being able to buy a lot of equipment at all-time lows when we entered this industry when it was at all-time highs. So, you know, look, it's going to take us a while to continue to prove ourselves, but hopefully, you know, the things that are being seen are.

Speaker Change: And that is what we're focused on every single day. With our supply chain now, we had to put them on a bit of a hold cycle until we could get to this phase.

Anthony Aquila: We had defend one a bit of a whole cycle until we could get to this phase. You know, we got lucky in being able to buy, you know, a lot of equipment at all time rolls when we entered this industry where we've got all time highs. So, you know, look, it's going to take us a while to continue to prove ourselves. But, hopefully, you know, the things that are being seen are will be eventually recognized in the value of the company.

Speaker Change: You know, we got lucky in being able to buy, you know, a lot of equipment at all-time lows when we entered this industry where it was at all-time highs.

Speaker Change: So, you know, look, it's going to take us a while to continue to prove ourselves, but hopefully, you know, the things that are being seen will be eventually recognized in the value of the company.

Unknown Speaker: [inaudible] will eventually be recognized in the value of the company. And it's just on the customer side, you're a red tea girl boy, you have a favorable test there. The Jazeera paints, obviously, the order looks like it's coming through.

Speaker Change: and it's just on the customer's side, you have Red Sea Global, you have the favorable test there, the G0 paints obviously, where it looks like it's coming through, working with Walmart for two years.

Unknown Speaker: We've been working with Walmart for two years. You mentioned putting together a delivery schedule at some point and communicating that with us. What do you think the timing of that baby will be?

Anthony Aquila: Delivery is scheduled at some point in communicating that with us. What do you think the timing of that may be? Yeah, it's a good question. So, we are, we work like a tech company with our customers. We don't say a lot. You know, we don't, you know, this we're not out dragging about any of the things we've done with Walmart in the last two years or what we've been doing for, frankly, over a year with the Red Sea. We, you know, we, we let our clients decide what they communicate. We see ourselves as a part of their competitive advantage.

Speaker Change: You mentioned about, you know, putting together a delivery schedule at some point and communicating that with us. Yes. What do you think the timing of that may be?

Unknown Speaker: [inaudible] Yeah, it's a good question. So we are, we work like a tech company with our customers. We don't say a lot.

Speaker Change: Yeah, it's a good question. So we work like a tech company with our customers. We don't say a lot.

Unknown Speaker: You know, we don't, you notice we're not out bragging about any of the things we've done with Walmart in the last two years or what we've been doing for, frankly, over a year with the Red Seat. We let our clients decide what they communicate. We see ourselves as a part of their competitive advantage. And so, you know, eventually this will become super surprising information, but it'll be because we respect our customers, we function like a TGM, not an OEM, and these things are deeply integrated into their strategy. You know, in the quarter, we anticipate a few of those to fully bake through.

Speaker Change: You know, we don't, you notice we're not out bragging about any of the things we've done with Walmart in the last two years or what we've been doing for frankly over a year with the Red Sea.

Speaker Change: We let our clients decide what they communicate. We see ourselves as a part of their competitive advantage.

Anthony Aquila: And, and so, you know, eventually this will become super surprising information. But, it'll be because we respect our customers. We function like a TDM, not an OEM. And, and, and these things are deeply integrated into their strategy.

Speaker Change: and and so you know eventually this will become super surprising information but it'll be because we respect our custom we function like a TEM not an OEM and and and these things are deeply integrated into their strategy so

Anthony Aquila: So, you know, in the quarter, we anticipate a few of those to fully bake through. And, of course, we have indications that they would like to make them public. And, we will follow up accordingly.

Speaker Change: In the quarter, we anticipate a few of those to fully bake through, and of course, we have indications that they would like to make them public.

Unknown Speaker: And of course, we have indications that they would like to make them public, and we will follow up to the recording. I hope that answers your question as well as our discussion. Yep, that's great.

Unknown Executive: The COVID-19 answers your question as well as our discipline. Yes, it does look great. Look forward to hearing them as they come through.

Speaker Change: and we will follow through accordingly.

Unknown Speaker: I look forward to hearing them as they come through. And then just the last question, the R&D and the SG&A were very well controlled this quarter, much better than I had modeled, and EBITDA guidance is much better than I had modeled. So I assume the SG&A and R&D levels going forward should remain somewhat similar here, or can you just comment on that please? Yeah, you know, look, we're pacing ourselves right now. I think we're entering a phase.

Speaker Change: We hope that answers your question as well as our discipline.

Anthony Aquila: I mean, just the last question: the R&D, the SG&A, we're very well controlled. This quarter much better than I had bottled. So, I assume the SG&A on D levels going forward to remain somewhat similar. Here for this comment on that, please. Yeah, you know, we're pacing ourselves right now. I think we're entering a phase. And that's why we talked about, you know, that we made it known that we're talking to the capital partners for this next phase. You know, we're going to be very disciplined about how we deploy capital. You know, I think, you know, it's, it's, it's, it's, it's going to be key to the survival of those as the industry emerges here.

Speaker Change: Yep, it does. It's great. I look forward to hearing them as they come through. And then just the last question, the R&D and the SG&A were very well controlled this quarter, much better than I had modeled, and the EBITDA guidance is much better than I had modeled.

Speaker Change: So I assume the SG&A and R&D levels going forward should remain somewhat similar here, or can you just comment on that, please?

Unknown Speaker: And that's why we talked about, you know, that we made it known that we're talking to capital partners for this next phase. You know, we're going to be very disciplined about how we deploy capital. You know, I think it's going to be key to the survival of those as the industry emerges here. And in addition to that, depending on how capital terms and conditions flow, obviously, we're focused on as much managing dilution as much as we can, which is difficult.

Speaker Change: Yeah, you know, look, we're pacing ourselves right now. I think we're entering a phase, and that's why we talked about, you know, that we made it known that we're talking to the capital partners for this next phase.

Speaker Change: You know, we're going to be very disciplined about how we deploy capital.

John Wolf: Greetings and welcome to the Canoo Second Quarter 2024 Earnings Call. At this time, all participants are in a listen only mode. If anyone should require operators assistance during the conference, please press star zero on your telephone keypad.

Speaker Change: You know, I think you know, it's it's it's

Speaker Change: It's going to be key to the survival of those as the industry emerges here.

Anthony Aquila: And in addition to that, you know, depending on how that capital turns and conditions flow, obviously the focus on as much managing delusions, as much as we can, which is difficult at this time. But over the long run, you know, we're building a big company here. So, you know, we understand. And, and that may vary a little bit based on capital inflows, but they're not a lot because, you know, one thing I talked to the team about all the time is it's not how much money you have. It's how effectively you can deploy it. And, and in this phase of the company's life, you do not get a hundred cents on the dollar of the fish.

Speaker Change: And in addition to that, you know, depending on how that capital turns and conditions flow, obviously we'll focus on as much managing dilution as much as we can, which is difficult at this time.

Unknown Executive: A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.

John Wolf: I would now like to turn the call over to John Wolf by presenting capital markets and investor relations. Thank you, John. You may begin.

Unknown Speaker: But over the long run, you know, we're building a big company here. So, you know, we understand and that may vary a little bit based on capital inflows, but then not a lot because, you know, one thing I talk to the team about all the time is it's not how much money you have. It's how effectively you can deploy it. And in this phase of a company's life, you do not get 100 cents on the dollar of efficiency. You have to humbly look at what your leakage is, and continuously be tightening your belt in your system.

Speaker Change: But over the long run, you know, we're building a big company here. So, you know, we understand. And that may vary a little bit based on capital inflows, but not a lot because.

Unknown Executive: Thank you, Paul. Thanks everyone for joining us.

Unknown Executive: Welcome to our Q2 2024 Earnings Call. During the holiday, voting will update you on our business and strategy.

Greg Ethridge: Greg will provide an update on our financing activities.

Speaker Change: You know, one thing I talk to the team about all the time is it's not how much money you have. It's how effectively you can deploy it. And in this phase of a company's life, you do not get a hundred cents on the dollar of efficiency.

Ramesh Murthy: And Ramesh will go over the Q2 financial results and discuss the optics and capital efficiencies we continue to generate.

Unknown Speaker: And I think the team is finally maturing in this area and understanding. And, you know, every $100,000, $150,000 is a software engineer. Every, you know. [inaudible] $70,000 is advanced manufacturing personnel.

Unknown Executive: Please be advised that we may make forward-looking statements based on current expectations. These are subject to significant risks and uncertainties and our actual results may differ materially.

Speaker Change: You have to humbly look at what your leakage is and continuously be tightening your belt in your system. And I think the team is finally maturing in this area.

Speaker Change: and Understanding, and, you know, every $100,000, $150,000 in the...

Anthony Aquila: The discussion of factors that could affect our future financial results and business, please refer to the disclosure in today's earnings release and on our most recent form, 10Q and 10K, and other reports that we may file with the SEC, including form 8Ks. All of our statements are made as of today and are based on information currently available to us, except as required by law, we assume no obligation to update any such statements.

Anthony Aquila: Thank you. You know, $70,000 is the advanced manufacturing personnel. So, you know, it's starting to resonate as a culture; you know, it's a re-founding in this company. And I think, you know, I'm pretty proud of how they were very disciplined in the quarter, although we still had leakage that, you know, I'm constantly on their case about it.

Speaker Change: is a software engineer, every, you know.

Speaker Change: $70,000 is advanced manufacturing personnel. So, you know, it's starting to resonate as a culture, you know, it's a re-founding in this company. And I think, you know, I'm pretty proud of how

Unknown Speaker: So, you know, it's starting to resonate as a culture. It's a re-founding in this company. And I think, you know, I'm pretty proud of how they were very disciplined in the quarter, although we still had leakage that I'm constantly on their case about.

Speaker Change: How they were very disciplined in the quarter, although we still had leakage that, you know, I'm constantly on their case about.

Unknown Executive: All right. Well, thank you. Congrats on the progress. We look forward to continuing progress over the year. Thanks. Thank you.

Unknown Speaker: Thank you, congratulations on the progress and look forward to continued progress over the year. Thanks. Thank you. Thank you. Our next question is from Craig Irwin with Roth MKM. Please proceed with your question. Good evening.

Anthony Aquila: During this call, we'll discuss non-gap financial measures. You can find a reconciliation of these non-gap financial measures to gap financial measures in today's earnings release, which can be found in the IR section of our website. With that, I'll hand it over to you. Thanks, John. And thanks everyone for joining us today. We will review our recent achievements and give some insights into announcements we expect to conclude in the coming quarter. As we advance into manufacturing, we are finalizing build specs and configurations with our most significantly customers. Once complete, we will align our supply chain and announce our projected delivery and allocation schedules for 2025 and into 2026.

Speaker Change: Thank you, congrats on the process and look forward to the continued progress of the year.

Craig Irwin: Our next question is from Craig Irwin with RAWMKO. Please proceed with your question. I get anything. Thanks. Thanks for taking my questions.

Speaker Change: Thanks. Thank you.

Speaker Change: Thank you. Our next question is from Craig Irwin with Roth MKM. Please proceed with your question.

Unknown Speaker: Thanks for taking my question. I wanted to ask a little bit about the characteristics of the customers that you look to support with your early deliveries in 2025. Are there any specific things that you're highlighting or you're prioritizing as you look to allocate production in 2025? And would you be looking to primarily serve a small handful of strong, well-established long-term adopters or to see the market with many opportunities where some can end up being larger than others over the next few years? Yeah, so to, Ian, that's a good question. Sorry, Craig.

Anthony Aquila: So, Tony, I wanted to ask a little bit about the characteristics of the customers that you look to support with your early deliveries in 2025. Are there any specific things that you're highlighting or you're prioritizing as you look to allocate production in 2025? And would you be looking to primarily serve a small handful of strong, well-established long-term adopters, or to see the market with many opportunities where some can end up being larger than others over the next few years? Yeah, so, so, that's a good question. Sorry, Craig. It's a good question. What we've done is we focused on a few customers that have high volume multi-year requirements and an implementation schedule in their internal system, often because of infrastructure charging that aligns with our ability to scale.

Craig Irwin: Good evening. Thanks for taking my questions.

Craig Irwin: So, Tony, I wanted to ask a little bit about the characteristics of the customers.

Craig Irwin: that you'd look to support with your early deliveries in 2025.

Speaker Change: Are there any specific.

Speaker Change: things that you're highlighting or you're prioritizing.

Speaker Change: As you look to allocate production in 2025 and would you be looking to primarily serve a small handful of

Anthony Aquila: Turning to the quarter, Q224 was our largest revenue quarter, $605,000. Our lowest cash outflow was approximately 50% lower than Q223.

Speaker Change: Strong, well-established, long-term adopters, or to seed the market with many opportunities where some can end up being larger than others over the next few years.

Unknown Speaker: It's a good question. What we've done is we focused on a few customers that have high volume, multi-year requirements, and an implementation schedule in their internal system, often because of infrastructure charging that aligns with our ability to scale. So we're really trying to pair off all these things so we're in harmony. [inaudible] In addition to that, you know, it takes time, you know, when you work with sophisticated customers like Walmart, the post office, the Red Sea, these are these people are, these airplanes, they're very focused on what these vehicles do, and the return on capital on every mile.

Speaker Change: Yeah, so, so...

Speaker Change: And that's a good question.

Anthony Aquila: On May 24th, we delivered our first right-hand drive, configured LDB 190s to the USPS. Approximately 75 days of male delivery in Atlanta, Georgia, and some of its seasonally wet, hot, and humid weather conditions.

Craig Irwin: I'm sorry, Craig.

Speaker Change: It's a good question. What we've done is we've focused on a few customers that have high-volume, multi-year requirements.

Speaker Change: and an implementation schedule in their internal system, often because of infrastructure charging, that aligns with our ability to scale. So we're really trying to pair off all these things so we're in harmony.

Anthony Aquila: So, we're really trying to pair off all these things so we're in harmony. In addition to that, you know, it takes time. You know, when you work with sophisticated customers like Walmart, the post office, the red seed, these are, these people are in the Europeans, they're very focused on what these vehicles do and the return on capital and every mile. So, you know, from, you know, from our perspective, we will always, as long as we can focus on the few. That allows us to sell the many. It's much more the judo model than a boxing model.

Anthony Aquila: We recognize revenue from Phase 3 of our DOD-DIU, Battery Testing Program, awarded to us earlier this year. Our customers have logged over 34,000 miles of real world industrial use cases.

Speaker Change: In addition to that, you know, it takes time, you know, when you work with sophisticated customers like Wal-Mart, the Post Office, the Red Sea, these are, these people are, Desire Paints, they're very focused on what these vehicles do.

Unknown Speaker: So, you know, from. You know, from our perspective, we will always, as long as we can, focus on the few that allow us to sell the many. It's much more of a judo model than a boxing model.

Speaker Change: and The Return on Capital in Every Mile.

Unknown Speaker: And that's one of the ways we keep our costs under control. You know, we look at the United States like 50 countries under a flag and a currency. We are rolling out methodically through the US in alignment with our customers. And so we're not scattered; we're not weakened. We're not burning capital, you know, and we're really focused on being profitable, starting to break through at 24,000 units. Uh-uh, production.

Speaker Change: So, you know, from

Speaker Change: You know, from our perspective, we will always...

Speaker Change: As long as we can, focus on the few that allow us to sell the many. It's much more of a judo model than a boxing model, and that's one of the ways we keep our cost under control.

Anthony Aquila: And that's one of the ways we keep our cost to under control. You know, we look at the United States like 50 countries under a flag and a currency. We are rolling out methodically through the US in alignment with our customers. And so we're not scattered, we're not weakened, we're not burning capital; you know, we're really focused on being profitable, you know, starting to break through the 24,000 units. Production. So, you know, in that exclude software revenue and accessories. So.

Anthony Aquila: This team is called QRF, a quick reaction force, which functions similarly to military and aviation and has resonated well with our fleet government and military customers. We also successfully deployed our first OTA updates to customers to enhance functionality and benefits to client workflows, often within 48 hours from request.

Speaker Change: We look at the United States like 50 countries under a flag and a currency. We are rolling out methodically through the U.S. in alignment with our customers.

Speaker Change: And so we're not scattered, we're not weakened, we're not burning capital, you know.

Speaker Change: And we're really focused on being profitable, you know, starting to break through at 24,000 units.

Unknown Speaker: So, you know, this is, and that excludes software revenue and, and, and accessories. So. I hope that answers your question on, you know, we're just focused on the grade A, triple B credit spread, high volume, multi-year buyers that align with us, and we can deliver it for a putt. That makes a lot of sense.

Anthony Aquila: On June 24th, we received advanced manufacturing assets of the rival UK in Oklahoma, 44 containers, announced in the last quarter with an additional six arriving this quarter for a total of 50 containers.

Speaker Change: Production

Speaker Change: So, you know, this is in that exclude software revenue and and and accessories. So.

Craig Irwin: I hope that answers your question on, you know, we're just focused on the great A triple B credit spread, high volume multi-year buyers that align with us and we can deliver it for purpose. That makes a lot of sense.

Speaker Change: I hope that answers your question on, you know, we're just focused on the grade A, triple B credit spread, high volume, multi-year buyers that align with us.

Anthony Aquila: We are in the process of commissioning these assets, which advances our focus on vertical integration.

Speaker Change: and we can deliver it for a purpose.

Craig Irwin: So, as we look towards this production, can you maybe help us unpack what some of these announceable milestones could be that we could see from Canoo, you know, as sort of external observers of your progress. You know, will there be an announceable order commitments that we should expect, you know, exiting the year? Are there other commitments to the factory that will learn about publicly? What else should we be possibly looking for? Yeah, so, you know, again, I'll come back to being a tech company. So just like the tech companies you cover, Craig, you know, they, they're much more IP guarded, you know, roll out, boarded. You know, like I said, we see ourselves as a competitive extension with our partners at their business.

Unknown Speaker: So, as we look towards this production, can you maybe help us unpack what some of these announceable milestones could be that we could see from Canoo, you know, as sort of external observers of your progress? Will there be announceable order commitments that we should expect, you know, exiting the year? Are there other... Commitments to the factory that we'll learn about publicly. What else should we be possibly looking for?

Anthony Aquila: On July 29th, our OKC facilities, foreign trade zone designation was approved for full activation after inspection and approvals from US Customs and Builder personnel.

Speaker Change: That makes a lot of sense.

Speaker Change: So, as we look towards this production, can you maybe help us unpack what some of these announceable milestones could be that we could see from Canoo, you know, as sort of external

Anthony Aquila: On the international front, we announced a 20 vehicle purchase agreement with Jazeera Paints with the option to expand the 200 initial deliveries expected in late 2nd quarter of 24 and 1st quarter of 25.

Speaker Change: observers of your progress. You know, will there be announceable order commitments that we should expect, you know, exiting the year? Are there other...

Speaker Change: Commitments to the factory that that we'll learn about publicly. What else should we be possibly looking for?

Anthony Aquila: With the quarter, we had multiple debuts in the UK of our 130 and 190 LDBs of our right hand drive commercial platform and and we hosted and attended numerous free shows and customer rides and drives on test tracks.

Unknown Speaker: Yeah, so, you know, again, I'll come back to being a tech company. So just like the tech companies you cover, Craig, you know, they, they, they're much more IP guarded, you know, rollout guarded. Like I said, we see ourselves as a competitive extension with our partners at their business. And so, I think we'll enter an era where you'll start to see those customers that want to announce what they're gonna do. You know, being announcing it and, you know, we do anticipate some of that coming through. Greg, we're congratulations on the progress here. I'll go ahead and jump back in the queue.

Speaker Change: Yeah, so, you know, again, I'll come back to being a tech company, so just like the tech companies you cover, Craig, you know, they're much more IP-guarded.

Speaker Change: You know, Rollout Guarded.

Speaker Change: You know, like I said, we see ourselves as a competitive extension with our partners at their business. And so, you know, I think we'll enter an era where you'll start to see those customers that want to announce what they're going to do.

Anthony Aquila: On July 3rd, Red Sea Global concluded intense on location testing in multiple environments, the pilot lasted 45 days in peak temperatures and conditions. We received numerous design awards in the quarter, including the prestigious Red Dot Award, the Green Good Award and the one to watch at the Great British Fleet Show in the UK.

Craig Irwin: And so, you know, I think, I think we'll enter an era where you'll start to see those customers that want to announce what they're going to do. You know, be in announcing it and, you know, we do anticipate some of that coming through. Great.

Speaker Change: being announcing it, and we do anticipate some of that coming through in the court.

Craig Irwin: Well, congratulations on the progress here. I'll go ahead and jump back to the queue. Thanks, Craig. Thanks for doing it. Thank you.

Speaker Change: Great. Well, congratulations on the progress here. I'll go ahead and jump back in the queue.

Unknown Speaker: Thanks, Craig, for today. Thank you. Our next question is from Stephen Gengaro with CFO. Please proceed with your question. Thanks, good afternoon everybody. Can you, can you talk a little bit about... You know, just from an update perspective, the relationship, with with Walmart and kind of where things stand and kind of how we should think about like deliveries over time. I know this is longer term, but just any changes to relationship and actually be thinking about that.

Anthony Aquila: Now, let me give you a preview of what to expect from us in the coming years. Finalizing customer configurations. We have been focused on locking down specifications with our large fleet customers, which will inform our production and allocations in 25 and visibility into 26. We continue refining our customer acquisition, partnership, fulfillment and post delivery services model, which includes customer deployment and testing of vehicles configured for specific use cases and commercial terms and conditions expected by our clients.

Stephen Gengaro: Our next question is from Stephen Gingaro. Let's see. Please proceed with their question. Thanks. Good afternoon, everybody. Can you, can you talk a little bit about just, you know, just from an update perspective, the relationship with Walmart and kind of where things stand and kind of how we think about. Like deliveries over time. I know it's a longer term, but just any changes to relationship and actually be thinking about that. You know, one of the great things about our customer base is they actually appreciate no BS, right? And they understand supply chain problems in quantum beyond ours.

Speaker Change: Thanks, Craig. Appreciate it.

Speaker Change: Thank you. Our next question is from Stephen Gengaro with Stiefel. Please proceed with your question.

Stephen Gengaro: Thanks. Good afternoon, everybody. Can you can you talk a little bit about just.

Stephen Gengaro: Just from an update perspective, the relationship with Walmart and where things stand and how we should think about deliveries over time. I know this is longer term, but just any changes to relationship and how should we be thinking about that?

Unknown Speaker: You know, one of the great things about our customer base is they actually appreciate no BS, right? I mean, in the end, and they understand supply chain problems in, in, in quantums beyond ours. Um, Um, You know, we have. 180 so suppliers, you know, many of our customers have hundreds of thousands, and and so we've learned a lot from them but but they've actually really appreciated one the fact that we wanted real testing before we signed up. Two, we wanted to make sure they had a multi-year view of what they needed for us so we did not get whipsawed either, in Requirements and Specifications.

Anthony Aquila: Walmart is an example. It was July of 2022 when we announced Walmart's order. We partnered with the Walmart team and completed two years of extensive testing and refining of specifications and use cases for our customers workflow.

Anthony Aquila: You know, we have 180 suppliers; you know, many of our customers have hundreds of thousands. And so we've learned a lot from them, but they've actually really appreciated one. The fact that we wanted real testing before we signed up to, we wanted to make sure they had a multi-year view of what they needed for us. So we did not get what we saw either in requirements and specifications. And so, you know, we concentrated on people who were really, who really had a long-term view of their business like we did. And, and I think that, you know, those, those elements have aligned well for us.

Speaker Change: You know we have

Speaker Change: 180-so suppliers, you know, many of our customers have hundreds of thousands.

Speaker Change: And so we've learned a lot from them, but they've actually really appreciated, one, the fact that we wanted real testing before we signed up. Two, we wanted to make sure they had a multi-year view of what they needed for us so we did not get whipsawed either.

Anthony Aquila: And there are other examples of large customers in varying phases of how we work hand in hand to finalize specs and schedule. With USPS, our modular platform, we believe is a good match with their need for a commercially available right hand drive vehicle built for purpose.

Unknown Speaker: And so, you know, we concentrated on people who really had a long-term view of their business like we do. And... And I think that those elements have aligned well for us, and these are customers that get a high return on capital by moving to an electric platform. They're also very targeted on customers that have, you don't have any range anxiety or charging issues for auxiliary charging until they're full infrastructures in place.

Speaker Change: in requirements and specifications.

Speaker Change: And so, you know, we concentrated on people who really had a long-term view of their business like we did.

Anthony Aquila: We are focused on the upcoming USPS RFP for electric vehicles expected later this year or in early Q1 of 25 for an estimated 10 to 12,000 units in that RFP.

Speaker Change: and...

Speaker Change: And I think that...

Anthony Aquila: And these are customers that get a high return on capital by moving to an electric platform. They're also very targeted on customers that have; you don't have any range anxiety or charging issues for auxiliary charging until they're full infrastructures in place. Thanks.

Speaker Change: These are customers that get a high return on capital by moving to an electric platform. We're also very targeted on customers that don't have any range anxiety or charging issues.

Anthony Aquila: More on international expansion targeting large fleet customers in our targeted geographies, the UK. They viewed at three commercial fleet shows in the quarter engaged with eight of the 15 largest fleets. Man-dated EV adoption creates substantial tailwinds positive initial feedback on our LBV 130 and LBV 190 vehicles as a unique fit for the UK LCD market.

Speaker Change: for auxiliary charging until their full infrastructure is in place.

Unknown Speaker: So, you know, balancing all those things out, we've targeted, you know, if you take Saudi Arabia, it's not only, you know, The content of the Saudi Arabia has not only done some amazing things for the environment, but he's also, you know, liberated the environment so that everyone can drive, so you'll get multiple expansions per rooftop vehicle per household, you know, as well as their commitment to ecological distribution and They're very progressive in this way, as you probably know, and, you know, just in the Red Sea Global Project, I believe $30 billion has been invested so far. They are also very focused on return on capital and demonstrating to their guests, you know, a very cost-efficient ecological experience. Same thing we see with our other customers.

Anthony Aquila: So, you know, balancing all those things out, we've targeted, you know, if you take Saudi Arabia, it's not only, you know, the Crown Prince is not only found some amazing things for the environment, but he's also, you know, liberated the environment so that everyone can drive, so you get multiple expansion per rooftop, vehicles per household, you know, as well as their commitment to ecological distribution and service maintenance and repair activities and their sites. They're very progressive in this way, as you probably know, and, you know, just in the Red Sea Global Project, I believe 30 billion has been invested so far.

Speaker Change: So, you know, balancing all those things out, we've targeted, you know, if you take Saudi Arabia, it's not only, you know,

Speaker Change: The Grand Tense is not only... [inaudible]

Speaker Change: done some amazing things for the environment.

Speaker Change: But he's also, you know, liberated the environment so that everyone can drive, so you get multiple expansion per rooftop, vehicles per household.

Anthony Aquila: Configuration specifications, discussions for expected pilots to start in Q4. Red C global pilot concluded successfully. It was 45 days over 3,000 miles in rigorous desert conditions. Sand rock for 80% of the models heat 50% of the days were over 100 degrees with max of 120 degrees Fahrenheit and average Indian temperature of 99 degrees. We are focused on next steps as we outlined above about our customer engagement model. We continue to make targeted progress in our supply chain harmonization.

Speaker Change: You know, as well as their commitment to ecological distribution and service maintenance and repair activities on their sites.

Speaker Change: They're very progressive in this way, as you probably know, and you know, just in the Red Sea Global Project, I believe $30 billion has been invested so far.

Anthony Aquila: They are also very focused on return on capital and demonstrating to their guests, you know, a very cost-efficient ecological experience. Same thing we see with our other customers, and so, you know, we've been able to be insulated.

Speaker Change: They are also very focused on return on capital and and and demonstrating to their guests

Speaker Change: you know, a very cost-efficient ecological experience. Same thing we see with our other customers.

Unknown Speaker: And so, you know, we've been able to be insulated. I think targeting in the UK, which I give credit to Ramesh for leading the charge for us in opening the market and, you know, great thanks to many of the people who worked with me in the other companies that I built in the UK for joining us and helping us get integrated with the top customers. And, you know, we'll be in testing, and, again, we signed up to test in their specific use cases in Q4 in the wet, cold, and difficult weather in the United Kingdom.

Anthony Aquila: I think targeting in the UK, which I give credit to Ramesh for leading the charge for us in opening the market, and, you know, great thanks to many of the people who work with me in another company that I built in the UK, and joining us, and helping us get integrated with the top customers. And you know, we'll be in testing, and again, we signed up to test in their specific use cases in Q4, in the wet, cold, and difficult weather in the United Kingdom. We're trying to cover it again, and I think that's one of the things electric vehicles have failed to do is to get, if you will, muddy and bloody with the product, and really test it, because if you don't do that, the anxiety with the customers is too hot.

Speaker Change: And so, you know, we've been able to be insulated.

Speaker Change: I think Targeting in the UK, which I give credit to.

Anthony Aquila: During the week of August 5th, we held our inaugural supplier engagement event at our OKC facility. We hosted the representatives from approximately half of our bomb suppliers. The suppliers were able to connect with our long-term vision through vehicle drives and factory tours was the first time we've been able to open up the factory for their visits. We aligned on a path forward and continued to refine this as we ran production together in manufacturing phase.

Speaker Change: to Ramesh for leading the charge.

Speaker Change: for us in opening the market and, you know, great thanks to many of the people who worked with me in the other companies that I built in the UK.

Speaker Change: and joining us and helping us get integrated with the top customers and you know we'll be in testing and again we're we we signed up to test

Speaker Change: in their specific use cases in Q4 in the wet, cold.

Speaker Change: and and and difficult weather in the United Kingdom. We're trying to cover the game and I think that's one of the things electric vehicles have failed to do is to get

Unknown Speaker: We're trying to cover the gamut. I think one of the things electric vehicles have failed to do is to get, if you will, muddy and bloody with the problem and really test it because if we don't do that, the anxiety level with the customers is too high, and you also get surprised.

Anthony Aquila: We continue to work on harmonizing our supply chain and finalizing our capital and debt instruments, including PO financing, especially since... Chris, our only build, we only build sold units for great a triple B credit worthy clients for 2025 and 2026. We expect this to reduce the cost of capital and maximize our flexibility to access other sources of capital, including incentives and non-deludive sources.

Murthy: If you will, muddy and bloody with the product, and really test it, because if you don't do that, the anxiety with the customers is too high, and you also get surprised.

Stephen Gengaro: And as you also get surprised, so, you know, these vehicles take a licking, and they're built for it, so, and they were parable, and, you know, we've learned a lot. This testing has saved our shareholders a tremendous amount of money, because I have been around multiple vehicle launches for 40 years in the data side of this. And I would say this is one of the toughest products for its specific market use case at the best return on capital out there. Great. Now, thank you for all the details. That's helpful. You guys know. Thank you.

Unknown Speaker: So, you know, these vehicles. Take a licking and and and they're built for it. So and they're repairable. And, you know, we learned a lot. These testing has saved our shareholders a tremendous amount of money because I have been around multiple vehicle launches for four years in the data side of this. And I would say this is one of the toughest products for its specific market use case at the best return on capital out there.

Murthy: So, you know, these vehicles.

Murthy: Take a licking and they're built for it.

Murthy: So, and they're repairable and, you know,

Speaker Change: We learned a lot. This testing has saved our shareholders a tremendous amount of money because I have been around multiple vehicle launches for four years in the data side of this.

Anthony Aquila: We are in discussions with multiple tier one financing partners.

Anthony Aquila: We expect more to follow at the appropriate time. Ramping up Oklahoma's workforce. As we accelerate the manufacturing phase, we are continuing the migration of our workforce to our Oklahoma and Texas facilities.

Speaker Change: And I would say this is one of the toughest products for its specific market use case at the best return on capital out there.

Unknown Speaker: Great. Now, thank you for all the detail. That's helpful. Thank you. Our next question is from Amit Dayal, with HC Wainwright.

Speaker Change: Great. Now, thank you for all the detail. That's helpful.

Greg Ethridge: With that, I will now turn it over to Greg and look forward to answering questions after your message is set. Thank you, Tony. I spend a lot of time with our team on the road with investors, customers and suppliers.

Speaker Change: Dada,

Amit Dayal: Our next question is from Amit Dial with HC Wainwright. Please proceed with your question. Thank you, Grafner. So Tony, with respect to, you know, the equipment that is now needed to complete the production setup, you know, outside of the rival assets. Are there any other sort of critical equipment that you need to, you know, get ready for production? Yeah, so look, you know, we continue to, you know, I hate to say it, but be, you know. Either guys that are visiting every garage sale in the industry, and in fact we have a team that just specializes on it, and that's great dividends.

Speaker Change: Thank you. Our next question is from Amit Dayal with HC Wainwright. Please proceed with your question.

Unknown Speaker: Please proceed with your question. Thank you. Good afternoon, everyone.

Greg Ethridge: It's been gratifying to see our model play out despite a difficult macro environment and I'm proud to see the progress we made every day and week with our team at Canoo. It's not always evident from the outside, but it's a lot of work to build a dynamic company that is positioned to win in the long term. It's important to be in the trenches with a dedicated team you trust that produces results.

Amit Dayal: Thank you. Good afternoon, everyone. So, Tony, with respect to, you know,

Unknown Speaker: So, Tony, with respect to, you know, The equipment that is now needed to complete the production setup, you know, outside of the arrival assets, are there any other sort of critical equipment that you need to, you know, get ready for production? Yeah, so look, you know, we continue to, you know, I hate to say it, but be, you know, be the guys that you know, kind of in visiting every garage sale in the industry.

Speaker Change #101: The equipment that is now needed to complete the production setup, you know, outside of the arrival assets, are there any other sort of critical equipment that you need to, you know, get ready for production?

Speaker Change #102: Yeah, so look, you know, we continue to, you know, I hate to say it, but be, you know.

Greg Ethridge: We have a lot of great things happening at Canoo and as you can tell, we're excited to share them. Remember, our team is not focused on the short term month to month or quarter to quarter, but are instead focused on the long game, putting the building blocks together for long term success and value appreciation. It's been volatile. We appreciate our supporters, customers, suppliers, investors and other partners. Shifting the capital and resources, not every team has a chance to work with a visionary CEO like Tony that has built global businesses in the past and is also a large funding partner.

Speaker Change #102: See the guys that you know kind of in visiting every garage sale in the industry and in fact we have a team that just specializes on it.

Unknown Speaker: And in fact, we have a team that just specializes on it. And, and you know, that's paid dividends, we have, you know, some some pink areas, you know, that we currently have more costly manual steps, that, you know, as we move into more automation level. Those are about the only things, plus a few little gap pieces of equipment, but we have everything else that we need in Oklahoma City to do that, and the workforce that we've been hiring there.

Anthony Aquila: We have some pink areas that we currently have more costly manual steps that, as we move into more automation level. Those are about the only things, plus a few little gap pieces of equipment, but we have everything else that we need in Oklahoma City to do that, and the workforce that we've been hiring there, really impressed. We've been relocating a lot of people. They really love the cross-grading, the environment, the tax that isn't so on. That's coming together.

Speaker Change #103: And, you know, that's paid dividends. We have, you know, some paint areas, you know, that we currently have more costly manual steps.

Speaker Change #103: that, you know, as we move into more automation level.

Greg Ethridge: We're fortunate to have him leading our team. Growth doesn't take place in a straight line and we need to be nimble and make tough choices at each phase. As you've heard from us before, our capital raising efforts are designed to carefully match the needs of our business while minimizing delusion during the quarter we raised 40 million of capital, which purposely matched our cash outflows. The funding allowed us to progress on manufacturing to pursue significant testing and to engage new customer deployments.

Speaker Change #103: Those are the those are about the only things plus a few you know little gap pieces of equipment.

Speaker Change #103: But, we have everything else that we need in Oklahoma City to do that, and the workforce that we've been hiring there. We're really impressed. We've been relocating a lot of people, they really love the cost of living, the environment.

Unknown Speaker: We're really impressed. We've been relocating a lot of people. They really love the cost of living, the environment, you know, the taxes and so on.

Unknown Speaker: So, you know, it's coming together. It takes time to build a great company and, you know, and to do it in a tough market. You've got to be very disciplined about it.

Anthony Aquila: It takes time to build a great company, and to do it in a tough market, we've got to be very disciplined about it. Understood.

Speaker Change #103: You know the taxes and so on so yeah, it's coming together It's you know it takes time to build a great company, and you know and to do it in a tough market You got to be very disciplined about it

Greg Ethridge: The capital markets remain choppy, but the company has been creative and scrappy. Our funding success reflects the consistent access to capital from a wide variety of sources, but it's carefully balanced, but it is a careful balance as we navigate the landscape. During Q2, we were able to secure financing, which was 35% prepaid advance, 40% from our partners, the AFVP partners, preferred convert and 25% creatively structured as an advance on a tax refund.

Unknown Speaker: Understandable. The approval for the, you know, the free trade zone, um... How should we think about you guys benefiting from that? In the long term, obviously, the benefits are clear, but in the near term, is there any... Advantage is that we may not have sort of considered previously with this approval. Yeah, so it's a good question.

Anthony Aquila: The approval for the free trade zone, how should we think about you guys benefiting from that? On the long term, obviously the benefits are clear, but in the near term, is there any advantages that we may not have considered previously with this approval? That's a good question. With us being able to, the UK has been an amazing; the government has been an amazing engagement with us, because we have a track record there for many, many years, and the work with the government in the past. They understand we're serious. They love the fact that we're focused on a few customers that benefit the government, because almost all the customers are government-assisted funding.

Speaker Change #103: Understood. The approval for the, you know, the free trade zone, um...

Speaker Change #104: How should we think about, you know, you guys benefiting from that, in the long term, obviously, the benefits are clear, but in the near term, is there any...

Speaker Change #105: Advantages that we may not have sort of considered previously with this approval.

Unknown Speaker: So with us being able to, you know, the UK has, you know, been an amazing, the government has been amazing engagement with us. We've, you know, because we have a track record there for many, many years, and at work with the government in the past. So we, we, you know, they understand we're serious. They love the fact that we're focused on a few customers that benefit the government, and because almost all the customers are government-assisted funding. And in addition to that, they have stringent mandates that the new party, which is elected, is reinforced.

Speaker Change #106: Yeah, so it's a good question. So with us being able to, you know, the UK has, you know, been an amazing, the government has been amazing engagement with us.

Greg Ethridge: This quarter represents the first time we've raised a material amount of capital from non-delutive sources and we are pursuing others. Thus far in Q3, we have access funding from the PPA to bring total year-to-day capital raised of 104 million. We are continually evaluating financing opportunities that best limit shareholder delusion, but we have been actively marketing community with funds and family offices with a range of financial flexibility to continually diversify our shareholder base.

Speaker Change #106: We've, you know, because we have a track record there for many, many years.

Speaker Change #106: and have worked with this government in the past. So we, you know, they understand we're serious. They love the fact that we're focused on a few customers that benefit the government.

Speaker Change #106: because almost all the customers are government-assisted funding and in addition to that they have stringent mandates that the new party which has been elected is reinforced.

Anthony Aquila: In addition to that, they have stringent mandates that the new party, which has been elected, is reinforced. They've lost all of their manufacturing in this category, just recently in India; took Jaguar out of the United Kingdom. And we believe that with the free trade zone, we will be able to supply our MPP One and create assembly jobs within the United Kingdom, and eventually part of our supply chain that makes no sense to ship there, but we could bring those partners into the free trade zone, give them space in our building. So they're looking to build a long-term integrated model that is financially profitable for our customers, as well as it is for our suppliers, and keeping the cost of capital and the advantage of geographic expansion at the lowest possible cost.

Greg Ethridge: We have been pleased with a significant number of financing opportunities we have been able to evaluate. Additionally, the substantial daily dollar volume of our shares of around 6 to 7 million a day enhances options in accessing equity capital markets. Ives. But we do need to take a balanced approach. And as Ramesh will share, we have been very focused on managing our capital and outflows.

Unknown Speaker: And they've lost all of their manufacturing in this category. You know, just recently, you know, India, you know, took took Jaguar out of out of the United, And we believe that with the free trade zone, we will be able to supply our MPP-1 and create assembly jobs, within the United Kingdom, and eventually, part of our supply chain makes no sense to ship there, but we could bring those partners into the free trade zone, give them space in our building, so they're looking to build a long-term integrated model that is financially profitable for our customers as well as it is for our supply.

Speaker Change #106: and they've lost all of their manufacturing in this category you know just recently you know India you know took took Jaguar out of the United Kingdom

Speaker Change #106: And we believe that with the free trade zone, we will be able to supply our MPP-1 and create assembly jobs.

Greg Ethridge: Further, we recently were added to the Russell Indexes, and we believe this makes us an attractive option for institutional investors as we move forward. We will continue to manage the finances with our broader team in a disciplined way and raise incremental capital that meets the needs of the business advancing in the manufacturing.

Speaker Change #106: with in the United Kingdom, and eventually, you know, part of our supply chain that makes no sense to tune to Pavel.

Speaker Change #106: to ship there, but we could bring those partners into the free trade zone, give them space in our building. So we're looking to build a long-term integrated model that is financially profitable for our customers as well as it is for our suppliers.

Ramesh Murthy: Now we will hand it over to Ramesh to cover the financial section. Thank you, Greg. Now let me walk you through the results for the second quarter of fiscal year 2024. We continue to focus on our financial discipline. Key accomplishments include the following.

Unknown Speaker: and keeping the Cost of Capital and the Advantage of Geographic Expansion at the Lowest Possible Cost. So, you know, we move together. And this gives us the ability to kind of migrate into those markets. So the free trade zone is very, very important.

Speaker Change #106: and keeping the cost of capital and the advantage of geographic expansion at the lowest possible cost.

Anthony Aquila: So we move together, and this gives us the ability to kind of migrate into those markets. So the free trade zone is very, very important, and we have 125 acres to work with directly on the I-40. If you've been there.

Speaker Change #106: So, you know, we move together.

Ramesh Murthy: As Tony mentioned, we had a record revenue of $605,000 in this quarter, derived from our USPS delivery and the defense innovation units contract. Moving to the income statement, our second quarter 2024 results are as follows. Research and development expenses total 16.8 million for the quarter primarily compared to 38.6 million in the prior year period, a 56% reduction from Q2 of 2023. Our expenses were primarily driven by final engineering improvements, support for our pilot programs and testing as well.

Speaker Change #106: And this gives us the ability to kind of migrate into those markets. So the free trade zone is very, very important. And, you know, we have 125 acres to work with directly on the I-40 if you've been there.

Unknown Speaker: And, you know, we have 125 acres to work with directly on the I-40 if you've been there. Go ahead. Thank you. Also, it was interesting to note that, you know, you are sort of now, You've kind of activated the OTA update. Capabilities. Can you talk a little bit about, you know, how...

Anthony Aquila: Thank you. Also, it was interesting to note that you are sort of now... And you've kind of activated the OTA update capabilities. Can you talk a little bit about, you know, how complete this aspect of the, you know, customer experience is and, you know, what needs to be done to, you know, finish. So this feature. Yeah, we have an amazing. You know, I'm a software guy. So I'm absolutely proud of our software. And they're really, I mean, to actually get customer requests in 48 hours, turn around the workflows. Pretty, pretty awesome. You know, you got a young, very creative team and, you know, they're very engaged.

Speaker Change #107: Go ahead. Thank you. Also, it was interesting to note that, you know, you are sort of now

Speaker Change #108: You've kind of activated the OTA update capabilities. Can you talk a little bit about, you know, how...

Unknown Speaker: Complete this aspect of the customer experience, you know. Customer Experience is, and you know what needs to be done to finish sort of this feature. Yeah, we have an amazing, you know, I'm a software guy. So, I'm absolutely proud of our software team, and their ability to actually get customer requests in 48 hours is pretty, pretty awesome. You know, we've got a young, very creative team, and, you know, they're very engaged.

Speaker Change #109: Complete this aspect of the, you know, customer experience is and, you know, what needs to be done to, you know, finish sort of this feature.

Ramesh Murthy: SGNA expenses excluding stock base compensation total 20 million dollars for the quarter compared to 23.9 million in the prior year period, a 16% reduction from Q2 of 2024. The Q2 of 2024 also reflects a 11% sequential reduction when compared to the prior quarter of Q124. As it relates to our key non-gap metrics, here is a summary. 80.6% or negative 2.5% adjusted net loss per share improvement from negative 3.14 per share in Q2 of 2023 to negative 0.61 per share in Q2 of 2024.

Speaker Change #110: Yeah, we have an amazing, you know, I'm a software guy, so I'm absolutely proud of our software team and their ability, I mean, to actually get customer requests in 48 hours turnaround of workflow is pretty awesome.

Speaker Change #110: We've got a young, very creative team, and they're very engaged. They love what they're doing, and we successfully are deploying.

Unknown Speaker: They love what they're doing, you know, and, and, and. We successfully are deploying, and, you know, pulling data for testing because of these rigorous, mild tests. You know, these customers help us refine our engineering and understand the longevity and the underwriting model of our warranty schedule because the post office is starting and stopping the vehicle every 50 feet, right? I mean, if you will, it's idling out. And so it's gotta be kept at a certain temperature. You gotta optimize speed.

Anthony Aquila: They love what they're doing, you know, and we successfully are deploying and, you know, pulling data for testing because these rigorous mild tests, you know, with these customers. They're helping us refine our engineering and understand the longevity and the underwriting model of our warranty schedules. So because, you know, the post office is starting and stopping the vehicle every 50 feet, right? I mean, you know, if you will, it's idling out. And so, you know, it's got to be kept on temperature; you got optimized speed, you got optimized breaking, torque, you know, integrated workflows. You know, like I said earlier, we do keep that stuff guarded because that belongs to our customer as well.

Speaker Change #110: And pulling data for testing because these rigorous mild tests with these customers help us refine our engineering and understand the longevity and the underwriting model of our warranty schedules.

Speaker Change #110: So, because, you know.

Speaker Change #111: The post office is starting and stopping the vehicle every 50 feet, right? I mean, you know, if you will, it's idling out. And so

Unknown Speaker: You gotta optimize braking, torque, integrated workflows. Like I said earlier, we do keep that stuff guarded because that belongs to our customers as well, you know. You know, we just. They're getting about it, and, you know, we'll be building them and deploying them. And the vehicles get a lot of attention when the customers deploy them, the US Post Office, you know. Some of the people commented that they had literally been delivering the mail for X number of years and met few people, but driving these vehicles, many people, many of their customers come out and ask about it.

Speaker Change #111: You know, it's got to be kept on temperature, you've got to optimize speed, you've got to optimize braking, torque, you know, integrated workflows.

Speaker Change #111: You know.

Speaker Change #112: Like I said earlier, we do keep that stuff guarded because that belongs to our customer as well. And, you know, you know, we just...

Anthony Aquila: And, you know, you know, we just are getting about it and, you know, we'll be building them and deploying them. And the vehicles get a lot of attention when the customers deploy them. The US Post Office, you know, some of the people commented that they, you know, had literally been delivering the mail for a number of years and that few people, but driving these vehicles, many people, many of their customers come out and ask about it. So, it's cool to be able to do that, especially the vehicle that's bringing the astronauts to the arenas. I think we put together the right things and vehicle have the right ergonomics that the drivers are respecting the vehicles a lot.

Speaker Change #112: are getting about it and, you know, we'll be building them and deploying them. And the vehicles get a lot of attention when the customers deploy them. The U.S. Post Office, you know.

Ramesh Murthy: Now, turning to the cash flow statement, we ended the quarter with cash, cash equivalence and restrictive cash of 19.1 million. Net cash provided by financing activities for the three months ended June 30 at 2024 was 38.7 million compared to 76.2 million in the prior year period. Cash used in operations for the three months ended June 30 at 2024 was 35.9 million compared to 62.3 million in the prior year period. 35.9 million cash outflow for the quarter is towards the lower end of the previous guidance provided in April of 2024.

Unknown Speaker: So it's cool to be able to do that, especially the vehicle that's bringing the astronauts to the Artemis. I think we put together the right thing and vehicle has the right ergonomics that the drivers are respecting the vehicles a lot. We had virtually no accidents, and which is insane in these use cases, because the drivers, one, the vehicle has great situational awareness.

Speaker Change #113: Some of the people commented.

Speaker Change #113: that they had literally been delivering the mail for X number of years and met few people, but driving these vehicles, many of their customers come out.

Speaker Change #113: Ask about it. So it's cool to be able to do that, especially the vehicle that's bringing the astronauts to the Artemis. I think we put together the right things.

Speaker Change #113: And the vehicle has the right ergonomics that the drivers are respecting the vehicles a lot. We've had virtually no accidents.

Anthony Aquila: We have virtually no accidents in which is insane in these use cases because the drivers, one, the vehicle has great situation awareness and two, when you respect them, they respect you. That's all I have to thank you. Thank you.

Speaker Change #113: which is insane in these use cases because the drivers, one, the vehicle has great situational awareness and two, when you respect them, they respect you.

Ramesh Murthy: We will continue to optimize our working capital needs now and in future courts. Our cash guidance as we have come in the lower range of the spend as we continue to focus on manufacturing as well as move into our Oklahoma facilities. These additionally based on our current projections due to the pacing of capital and supply chain harmonization, we expect our adjusted EBITDA to be between negative 120 million to negative 140 million.

Unknown Speaker: And two, when you respect them, they respect you. That's all I have, Tony. Thank you. Thank you. There are no further questions at this time. I would like to hand the floor back over to Tony Aquila for any closing comments. We'd like to thank everyone again, especially our supporters, our believers. And for those of you that are haters. You know, we'll, we'll, we'll prove ourselves piece by piece, and hopefully can vote you.

Speaker Change #114: That's all I have to say. Thank you.

Unknown Speaker: And with that, we look forward to updating you in the quarter, and the team will have follow-up calls with those of you. Everyone, have a great rest of the quarter. [inaudible] This concludes today's conference call. You may now disconnect your lines. Thank you for your participation.

Unknown Executive: There are no further questions at this time.

Speaker Change #115: Be back.

Anthony Aquila: I would like to hand the floor back over to Tony Aquila for any closing comments. We'd like to thank everyone again, you know, especially our supporters, our believers. And for those of you that are our haters, you know, we'll, we'll prove ourselves these parties and hopefully can vote you.

Speaker Change #116: Thank you. There are no further questions at this time. I would like to hand the floor back over to Tony Aquila for any closing comments.

Tony Aquila: We'd like to thank everyone again, especially our supporters, our believers.

Tony Aquila: And for those of you that are our haters, you know, we'll, we'll, we'll prove ourselves these parties.

Unknown Executive: And with that, you know, we look forward to updating even the quarter, and the team will have to all call with those of you. And. Everyone, have a great rest of the quarter.

Speaker Change #118: and hopefully convert you. And with that...

Anthony Aquila: For the second half of 2024, let's be toned back to Tony for closing remarks. Tony. Thank you everyone for joining us today and we look forward to answering some questions.

Speaker Change #118: Yeah,

Speaker Change #119: We look forward to updating you in the quarter, and the team will have follow-up calls with those of you.

Speaker Change #119: Everyone have a great rest of the quarter.

Unknown Executive: This concludes today's conference call. You may now disconnect your lines. Thank you for your participation.

Anthony Aquila: I would like to do a special thanks out to the teams that worked incredibly hard during our tests in United Kingdom, Saudi Arabia. These were extensive long deployments and often put in use cases in weather conditions that were extreme. We love testing our vehicle in the worst conditions possible. This is the best way to build the character of the vehicle and it's a tribute to the perseverance, innovation and creativity coupled with the scrappiness of a hungry team.

Speaker Change #120: This concludes today's conference call. You may now disconnect your lines. Thank you for your participation.

Anthony Aquila: And therefore on behalf of the executive team, we thank all of you. And in addition to that, we'd like to give our thanks to the supporters who have been great and across multiple continents. We look forward to advancing in the quarter and bringing to more progressive and meaningful and value creating news ahead. With that, turn it back to join the questions.

Unknown Executive: Paul, we'd like to pull for questions now. Thank you.

Unknown Executive: Well, now we can do a question and answer session. If you'd like to ask questions, please press star one on your telephone keypad. The confirmation tone will indicate your line is in the question to you. You may press star two to remove your question from the queue. For participants using speaker equipment and maybe necessary to pick up your hand step before crossing the start keys. One moment, please, while we pull for questions.

Unknown Executive: Thank you.

Daniel Ives: Our first question is from Dan is with wed bush securities. Please proceed with your question. Yeah, thanks. And the good job in the progress this quarter. So could you just like in terms of the capital rate, do you expect it's going to be the scene at recorder, given the needs, whatever the capital you'll be able to raise. And sort of that philosophy will continue from next to you at least you quarter.

Anthony Aquila: Yeah, I think that's a great question, Dan. So, you know, to kind of dig deeper into that. So, as you know, Dan, I've been criticized for raising, you know, incremental capital. You know, I do believe as you know, we've discussed that, you know, the more money a company has that we've seen from some of the others that have fallen, if the bone right gets too high. You know, we've focused on being scrappy, funding the company based on milestones and key events.

Anthony Aquila: And I think that is really actually started to turn to the favor of how the business is learned to operate. And we'll continue to do that because, you know, right now, from my personal perspective and perspective of our executive team, you know, we're way under par. And so therefore, you know, it makes no sense to do anything other than to do exactly as we're doing during these volatile capital markets. Right.

Anthony Aquila: And in terms of just what when you think my order flow and demand and, you know, just depends on customers that better come in through Oklahoma and it doesn't feel like the conversations are changing like they're the relative to what they like six months ago, to where they are today. I think when you sign up for a test with a customer like we won't even write in order unless we we've actually, you know, had our wheels on the ground with the customer and their workflow.

Anthony Aquila: So I think that has changed the conversation. Our conversations have steadily progressed. And, and I think also, you know, going back to being criticized in the beginning, heavily about shifting to just fleets and government military focus. These are the mandated markets. They are resistant to the economic because the policy driven activities is those deconstitutional coupled with the fact that we built a platform that gets a return on capital for our clients.

Anthony Aquila: So the conversations have been advancing right down to the specifications because our platform allows for some built for purpose modifications on the assembly line. So that has done really well. People like things like our quick, you know, reaction force, you know, 86% of all the activities over the quarter was over the air, you know, only having to deploy advanced teams. And I think focusing in on customers that we can domino into markets like the US Post Office, helping us launch into the UK and another right hand drive markets so that we can get in, you know, with getting our our, our FTC approval actives now and the ability to build a couple of millions more square feet on our site.

Anthony Aquila: You know, we have the ability to entice partners to bring into the area as they become partners to our global expansion and delivery of our platform. And obviously it reduces our bond costs, which makes it more cost efficient for our customers. We're very focused on having the most affordable and the most durable. And when you sign up for the worst test, like we love it because we learn something and we often modify something and it makes our product better. Most people don't like signing up for those things in this industry. You probably heard a few that have, but this is where we like to start.

Unknown Executive: Great. Thanks. Thank you.

Michael Legg: Our next question is from Michael Legg with the benchmark company, please proceed with your question. Thanks. And Professor Frank, guys, nice to see all the progress being made. I wanted to dig down a little bit into the supplier event you had and understand the supply chain where it's positioned today. How are we, you know, with suppliers moving forward with this, you know, it obviously appears that a lot of the fleet orders soon to be on the horizon. It's kind of give us a walk through where we are supply chain wise, please.

Anthony Aquila: Yeah, so look, I think, you know, we, we have a debt to pay to our suppliers for their patience, you know, because when I took over the business, I changed the direction of the company, which, which, which had an implication to, you know, many of our supporting suppliers. You know, we went to a military grade product, industrial grade, repair ability, redesign, you know, so we threw a lot of shock into the system, completely different customer base.

Anthony Aquila: And, you know, we, we have to kind of reharmonize all of that. You know, we are at a place now, and that's why we have the event, which, which about 52% of the, of the bomb was represented at the event. They got to see the factory, how it's coming together, how we're doing it in phases, how we're scaling, according, you know, to volume and capex so we don't get ahead of ourselves, like others.

Anthony Aquila: And, and, you know, then we put the people behind the wheel and put them in aggressive driving conditions, which they had a blast. And, you know, that really created a connection for them with what the pieces they've been supplying or the pieces we've been changing on them, they got to see the why, because we put them in an aggressive, you know, test track environment. Similar to the way we tested with our customers, and they walked away proud, and that means a lot.

Anthony Aquila: We, we now need to harmonize our capital into our supply chain, but we won't do that until we lock our high volume customers specs down. So we can actually, because remember our model is we only build sold units. I want to get out of the business of building to sell. And, and I want to be very tightly integrated on multiple levels with our clients on a multi year basis. And, and that, that is what we're focused on every single day with our supply chain now.

Anthony Aquila: We had defend one a bit of a whole cycle until we could get to this phase. You know, we got lucky in being able to buy, you know, a lot of equipment at all time rolls when we entered this industry where we've got all time highs. So, you know, look, it's going to take us a while to continue to prove ourselves. But, hopefully, you know, the things that are being seen are will be eventually recognized in the value of the company.

Anthony Aquila: Delivery is scheduled at some point in communicating that with us. What do you think the timing of that may be? Yeah, it's a good question. So, we are, we work like a tech company with our customers. We don't say a lot. You know, we don't, you know, this we're not out dragging about any of the things we've done with Walmart in the last two years or what we've been doing for, frankly, over a year with the Red Sea.

Anthony Aquila: We, you know, we, we let our clients decide what they communicate. We see ourselves as a part of their competitive advantage. And, and so, you know, eventually this will become super surprising information. But, it'll be because we respect our customers. We function like a TDM not an OEM. And, and, and these things are deeply integrated into their strategy. So, you know, in the quarter, we anticipate a few of those to fully bake through.

Anthony Aquila: And, of course, we have indications that they would like to make them public. And, we will follow up accordingly. The COVID-19 answers your question as well as our discipline. Yes, it does look great. Look forward to hearing them as they come through. I mean, just the last question, the R&D, the SG&A, we're very well controlled. This quarter much better than I had bottled. So, I assume the SG&A on D levels going forward to remain somewhat similar here for this comment on that, please.

Anthony Aquila: Yeah, you know, we're pacing ourselves right now. I think we're entering a phase. And that's why we talked about, you know, that we made it known that we're talking to, to the capital partners for this next phase. You know, we're going to be very disciplined about how we deploy capital. You know, I think, you know, it's, it's, it's, it's, it's going to be key to the survival of those as the industry emerges here.

Anthony Aquila: And in addition to that, you know, depending on how that capital turns and conditions flow, obviously the focus on as much managing delusions, as much as we can, which is difficult at this time. But over the long run, you know, we're building a big company here. So, you know, we understand. And, and that may vary a little bit based on capital inflows, but they're not a lot because, you know, one thing I talked to the team about all the time is it's not how much money you have.

Anthony Aquila: It's how effectively you can deploy it. And, and in this phase of the company's life, you do not get a hundred cents on the dollar of the fish. Thank you. You know, $70,000 is the advanced manufacturing personnel. So, you know, it's starting to resonate as a culture, you know, it's a re-founding in this company. And I think, you know, I'm pretty proud of how they were very disciplined in the quarter, although we still had leakage that, you know, I'm constantly on their case about it. All right.

Unknown Executive: Well, thank you. Congrats on the progress. We look forward to continuing progress over the year. Thanks. Thank you.

Craig Irwin: Our next question is from Craig Irwin with RAWMKO. Please proceed with your question. I get anything. Thanks. Thanks for taking my questions.

Anthony Aquila: So, Tony, I wanted to ask a little bit about the characteristics of the customers that you look to support with your early deliveries in 2025. Are there any specific things that you're highlighting or you're prioritizing as you look to allocate production in 2025? And would you be looking to primarily serve a small handful of strong, well-established long-term adopters or to see the market with many opportunities where some can end up being larger than others over the next few years?

Anthony Aquila: Yeah, so, so, that's a good question. Sorry, Craig. It's a good question. What we've done is we focused on a few customers that have high volume multi-year requirements and an implementation schedule in their internal system, often because of infrastructure charging that aligns with our ability to scale. So, we're really trying to pair off all these things so we're in harmony. In addition to that, you know, it takes time, you know, when you work with sophisticated customers like Walmart, the post office, the red seed, these are, these people are in the Europeans, they're very focused on what these vehicles do and the return on capital and every mile.

Anthony Aquila: So, you know, from, you know, from our perspective, we will always, as long as we can focus on the few. That allows us to sell the many. It's much more the judo model than a boxing model. And that's one of the ways we keep our cost to under control. You know, we look at the United States like 50 countries under a flag and a currency. We are rolling out methodically through the US in alignment with our customers.

Anthony Aquila: And so we're not scattered, we're not weakened, we're not burning capital, you know, we're really focused on being profitable, you know, starting to break through the 24,000 units. Production. So, you know, in that exclude software revenue and accessories. So. I hope that answers your question on, you know, we're just focused on the great A triple B credit spread, high volume multi-year buyers that align with us and we can deliver it for purpose.

Craig Irwin: That makes a lot of sense.

Anthony Aquila: So as we look towards this production, can you maybe help us unpack what some of these announceable milestones could be that we could see from Canoo, you know, as sort of external observers of your progress. You know, will there be an announceable order commitments that we should expect, you know, exiting the year? Are there other commitments to the factory that will learn about publicly? What else should we be possibly looking for?

Anthony Aquila: Yeah, so, you know, again, I'll come back to being a tech company. So just like the tech companies you cover Craig, you know, they, they're much more IP guarded, you know, roll out, boarded, you know, like I said, we, we see ourselves as a competitive extension with our partners at their business. And so, you know, I think, I think we'll enter an era where you'll start to see those customers that want to announce what they're going to do. You know, be in announcing it and, you know, we do anticipate some of that coming through.

Unknown Executive: Great.

Unknown Executive: Well, congratulations on the progress here. I'll go ahead and jump back to the queue. Thanks, Craig. Thanks for doing it. Thank you.

Stephen Gengaro: Our next question is from Stephen Gingaro. Let's see.

Anthony Aquila: Please proceed with their question. Thanks. Good afternoon, everybody. Can you, can you talk a little bit about just, you know, just from an update perspective, the relationship with Walmart and kind of where things stand and kind of how we think about. Like deliveries over time. I know it's a longer term, but just any changes to relationship and actually be thinking about that. You know, one of the great things about our customer base is they actually appreciate no BS, right?

Anthony Aquila: And they understand supply chain problems in in in quantum beyond ours. You know, we have 180 so suppliers, you know, many of our customers have hundreds of thousands. And so we've learned a lot from them, but they've actually really appreciated one. The fact that we wanted real testing before we signed up to we wanted to make sure they had a multi year view of what they needed for us. So we did not get what saw either in requirements and specifications.

Anthony Aquila: And so, you know, we concentrated on people who were really, who really had a long term view of their business like we did. And, and I think that, you know, those, those elements have have aligned well for us. And these are customers that get a high return on capital by moving to an electric platform. They're also very targeted on customers that have, you don't have any range anxiety or charging issues for auxiliary charging until they're full infrastructures in place.

Anthony Aquila: Thanks. So, you know, balancing all those things out, we've targeted, you know, if you take Saudi Arabia, it's not only, you know, the Crown Prince is not only found some amazing things for the environment, but he's also, you know, liberated the environment so that everyone can drive so you get multiple expansion per rooftop, vehicles per household, you know, as well as their commitment to ecological distribution and service maintenance and repair activities and their sites, they're very progressive in this way, as you probably know, and, you know, just in the Red Sea Global Project, I believe 30 billion has been invested so far.

Anthony Aquila: They are also very focused on return on capital and demonstrating to their guests, you know, a very cost-efficient ecological experience. Same thing we see with our other customers, and so, you know, we've been able to be insulated. I think targeting in the UK, which I give credit to Ramesh for leading the charge for us in opening the market, and, you know, great thanks to many of the people who work with me in another company that I built in the UK, and joining us, and helping us get integrated with the top customers.

Anthony Aquila: And you know, we'll be in testing, and again, we signed up to test in their specific use cases in Q4, in the wet, cold, and difficult weather in the United Kingdom. We're trying to cover it again, and I think that's one of the things electric vehicles have failed to do is to get, if you will, muddy and bloody with the product, and really test it, because if you don't do that, the anxiety with the customers is too hot.

Anthony Aquila: And as you also get surprised, so, you know, these vehicles take a licking, and they're built for it, so, and they were parable, and, you know, we've learned a lot. This testing has saved our shareholders, or tremendous amount of money, because I have been around multiple vehicle launches for 40 years in the data side of this. And I would say this is one of the toughest products for its specific market use case at the best return on capital out there.

Unknown Executive: Great. Now, thank you for all the details. That's helpful. You guys know. Thank you.

Anthony Aquila: Our next question is from Amit Dial with HC Wainwright. Please proceed with your question. Thank you, Grafner. So Tony, with respect to, you know, the equipment that is now needed to complete the production setup, you know, outside of the rival assets. Are there any other sort of critical equipment that you need to, you know, get ready for production? Yeah, so look, you know, we continue to, you know, I hate to say it, but be, you know.

Anthony Aquila: Either guys that are visiting every garage sale in the industry, and in fact we have a team that just specializes on it, and that's great dividends. We have some pink areas that we currently have more costly manual steps that as we move into more automation level. Those are about the only things, plus a few little gap pieces of equipment, but we have everything else that we need in Oklahoma City to do that, and the workforce that we've been hiring there, really impressed. We've been relocating a lot of people. They really love the cross-grading, the environment, the tax that isn't so on. That's coming together.

Anthony Aquila: It takes time to build a great company, and to do it in a tough market, we've got to be very disciplined about it. Understood. The approval for the free trade zone, how should we think about you guys benefiting from that? On the long term obviously the benefits are clear, but in the near term, is there any advantages that we may not have considered previously with this approval? That's a good question. With us being able to, the UK has been an amazing, the government has been an amazing engagement with us, because we have a track record there for many, many years, and the work with the government in the past.

Anthony Aquila: They understand we're serious. They love the fact that we're focused on a few customers that benefit the government, because almost all the customers are government assisted funding. In addition to that, they have stringent mandates that the new party, which has been elected, is reinforced. They've lost all of their manufacturing in this category, just recently in India, took Jaguar out of the United Kingdom. And we believe that with the free trade zone, we will be able to supply our MPP one and create assembly jobs within the United Kingdom, and eventually part of our supply chain that makes no sense to ship there, but we could bring those partners into the free trade zone, give them space in our building.

Anthony Aquila: So they're looking to build a long-term integrated model that is financially profitable for our customers, as well as it is for our suppliers, and keeping the cost of capital and the advantage of geographic expansion at the lowest possible cost. So we move together, and this gives us the ability to kind of migrate into those markets. So the free trade zone is very, very important, and we have 125 acres to work with directly on the I-40 if you've been there.

Anthony Aquila: Thank you. Also, it was interesting to note that you are sort of now... And you've kind of activated the OTA update capabilities. Can you talk a little bit about, you know, how complete this aspect of the, you know, customer experience is and, you know, what needs to be done to, you know, finish. So this feature. Yeah, we have an amazing, you know, I'm a software guy. So I'm absolutely proud of our software.

Anthony Aquila: And they're really, I mean, to actually get customer requests in 48 hours, turn around the workflows. Pretty, pretty awesome. You know, you got a young, very creative team and, you know, they're very engaged. They love what they're doing, you know, and, and, and we successfully are deploying and, you know, pulling data for, for, for testing because these rigorous mild tests, you know, with these customers. They're helping us refine our engineering and understand the longevity and the underwriting model of our warranty schedules.

Anthony Aquila: So because, you know, the post office is starting and stopping the vehicle every 50 feet, right? I mean, you know, if you will, it's idling out. And so, you know, it's got to be kept on temperature, you got optimized speed, you got optimized breaking, torque, you know, integrated workflows. You know, like I said earlier, we do keep that stuff guarded because that's belongs to our customer as well. And, you know, you know, we just are getting about it and, you know, we'll be building them and deploying them.

Anthony Aquila: And the vehicles get a lot of attention when the customers deploy them. The US post office, you know, some of the people commented that they, you know, had literally been delivering the mail for a number of years and that few people, but driving these vehicles, many people, many of their customers come out and ask about it. So, it's cool to be able to do that, especially the vehicle that's bringing the astronauts to the arenas.

Anthony Aquila: I think we put together the right things and vehicle have the right ergonomics that the drivers are respecting the vehicles a lot. We have virtually no accidents in which is insane in these use cases because the drivers, one, the vehicle has great situation awareness and two, when you respect them, they respect you.

Unknown Executive: That's all I have to thank you. Thank you.

Anthony Aquila: There are no further questions at this time. I would like to hand the floor back over to Tony Aquila for any closing comments. We'd like to thank everyone again, you know, especially our supporters, our believers. And for those of you that are our haters, you know, we'll, we'll, we'll prove ourselves these parties and hopefully can vote you. And with that, you know, we look forward to updating even the quarter and the team will have to all call with those of you. And. Everyone, have a great rest of the quarter.

Unknown Executive: This concludes today's conference call.

Unknown Executive: You may now disconnect your lines.

Unknown Executive: Thank you for your participation.