Investor News

Transcription of Investor Call 0001

By September 28, 2017 No Comments

Held at 10:00am EDT on Thursday, September 28, 2017.

 

Good morning, I’m Mark Frohnmayer, Founder and President of Arcimoto. Before we dive into the good stuff, I want to cover two housekeeping details.

First, we’ll be doing a Q & A following the planned remarks.  If you’d like to ask a question, you need to be logged in via the zoom.us link available in the announcement of this call at http://arcimoto.com/investor. You can request a question slot via the chat window in the zoom interface. When I’m ready for you to ask your question, I’ll call you out and unmute your line.

Second, on this call I plan to make forward-looking statements relating to, among other things, Arcimoto, Inc., our business plan and strategy, and our industry. These forward-looking statements are based on the beliefs of, assumptions made by, and information currently available to the company’s management. Statements including words like “estimate,” “project,” “believe,” “anticipate,” “intend,” “expect” and other similar expressions, identify and constitute forward-looking statements. These statements reflect Arcimoto management’s current views with respect to future events and are subject to risks and uncertainties that could cause the company’s actual results to differ materially from those contained in the forward-looking statements. We caution investors not to place undue reliance on these forward-looking statements, which speak only as of today, the date on which they are made. We do not undertake any obligation to revise or update these forward-looking statements to reflect events or circumstances after today or to reflect the occurrence of unanticipated events.

And with that I’d like to welcome you all to Arcimoto’s first ever public investor call.

Arcimoto’s mission is to catalyze the shift to a sustainable transportation system. We started in 2007, exactly 10 years, to the day, before we closed our Reg A+ public offering. Over those ten years we’ve designed and built 8 generations of prototypes, garnered thousands of preorder customers and tens of thousands of online fans, and launched the world’s first Fun Utility Vehicle: the first affordable pure electric vehicle that breaks the tradeoff between utility and rightsized efficiency for the daily driver while delivering an incredibly fun ride.

Last week we closed, to our knowledge, the most successful vehicle company crowdfunding campaign in the history of the world, and listed our stock on Nasdaq, the world’s premier exchange for forward-looking technology companies.

The proceeds of this round exceeded our original goal for this raise nearly by a factor of two, and in the last week, we’ve hit the ground running.

The next critical step in the execution of Arcimoto’s goal of bringing everyday electric vehicles to the masses is to begin actually producing vehicles for real customers. Aside from a bankroll and an awesome product, there are two critical dimensions to building a successful production venture.

The first dimension is people: our team is our foundation, and we’ve added two very key members of that team to help drive the next stage of the venture.

Arcimoto Director Terry Becker has joined the Company as Chief Operations Officer and starts full time on Monday. Terry most recently served as Director of Engineering and Global Product Support at Peterson Pacific Corp, responsible for product development of forestry and recycling heavy equipment as well as the worldwide service network. Prior to Peterson, Terry held operations and executive engineering leadership roles at JBT AeroTech in the US and China, Country Coach Corp. and Arneson Marine. He will be responsible for all aspects of Arcimoto operations, including manufacturing, quality, supply chain, logistics, and inventory for Arcimoto’s new U.S factory in Eugene, Oregon. The role also oversees Arcimoto engineering, R&D, and lean enterprise functions. He will report directly to me.

I’d like to add a little context of of the long term commitment Terry has already made to Arcimoto. As a director of the Company since we formalized our initial board, Terry has already helped shape Arcimoto’s key product and go-to-production plan. He’s a known quantity, has followed the company closely for years and understands the people, culture, and manufacturing needs of Arcimoto like no one else.

I’m also thrilled to welcome Patrick West as Materials Director at Arcimoto, who will come on full time in mid-October. In his most recent executive post, West served as Materials Manager for FCC Commercial Furniture, where he led the company’s demand management, supply chain development and sourcing functions. Prior to FCC, West served as the Vice President of Materials at Country Coach, as well as in executive positions at Westport Axle and Safari Motor Coach Corp. He will be responsible for all aspects of procurement logistics, supply chain development, production planning and inventory control for Arcimoto’s new U.S. factory in Eugene. He will report directly to COO Terry Becker.

People need a place, which brings me to our second announcement. I’m beyond stoked that yesterday we received the necessary building permits from the City of Eugene Planning Department for leasehold improvements to our manufacturing plant. In order to produce vehicles at scale, we need a factory, and because we executed our site selection process in parallel with our public offering, we signed a lease on a suitable production space for our next stage in the final week of our public offering window. We take delivery of the 30,000 square foot building in West Eugene on October 1st. We have a permitted plan of modest improvements, and we’ll begin the move-in before November. Stay tuned for the announcement of our factory opening and Signature Series launch celebration.

Now, I understand that lofty visions are well and good, but I want to address, head-on, what has prompted some of the high-performing members of our selling group to wake me up with 6 AM phone calls several times over the last several days, which has been all about numbers – stock price, volume, and so on. I’m guessing more than a few of those listening are numbers folks, so, since it’s been 5 trading days since we went public on the exchange, I’d like you all to consider 5 key numbers:

0 – to date Arcimoto as a company has had a number of zeros, beyond just how many vehicles we’ve delivered to actual customers. First, Zero is the number of Arcimoto insiders, employees, former employees, angel investors and, critically, new investors who came in on the Arcimoto.com site who have sold their stock holdings. Our online portal was the single largest syndicate member in the IPO and included the single largest investor in our IPO, and of them all, zero have sold shares. Zero.

Zero is also the number of dollars of debt that the company carries into Q4.

Zero is the number of down rounds we’ve raised to date throughout 10 years of development.

Finally, we are delivering Signature Series vehicle #0 to our founder, our first paying customer, in the next quarter.

1 – at least one new syndicate investor has voiced the concern that Arcimoto’s stock could be headed straight towards one dollar a share. Let’s put that in perspective. Should Arcimoto’s stock price hit one dollar, that would mean that our market cap is equal to the cash sitting in our bank account. That would entirely neglect the 10 years of development, intellectual property portfolio, 1,821 customer preorders and counting, tens of thousands of fans, strategic relationships, exuberant press coverage, and unique position as the world’s first producer of the most affordable pure electric vehicle suitable for daily driving.

24 – is the number of months of runway we expect this round has provided Arcimoto. We’ve built the company over a decade with just $10M invested, and we owe that to two factors: first, this is Oregon – we are lean by philosophy and by necessity. And equally responsible is that we have a founder who put in the first 2 million, and I’ve shepherded every subsequent dollar in as if it were my own. Driving focus on what must be done, and more importantly, what we can look to others to provide. My commitment to you is that we will treat your investment with the same care,

The last two numbers are 103 million and 63,000 million. The market caps of the only two pure electric vehicle plays on Nasdaq as of the moment we filed our Form 8A. We see significantly more headroom above than downside below.

You can expect more numbers when we file our first 10Q.

When an entire life has led up to a venture it sets the tenor of the purpose of the venture. Arcimoto is about saving our one planet and providing a solution that consumers didn’t necessarily know they needed.  

We are on the cusp of full production, are building arguably the most efficient everyday electric vehicle company in human history and will begin delivering Fun Utility Vehicles to paying customers, some who’ve waited for many years, next quarter.  

We believe this is a long hold investment if ever there has been one. Our commitment to quality, our focus on the Fun Utility Vehicle, our passion for putting the planet first, and our dedication to those who truly believe in us is what Arcimoto has stood for from day one.

We intend to be here tomorrow, next week, next year, next decade as we become the vehicle company you say, “I believed in Arcimoto from the beginning”.

We are deeply grateful to all of you who’ve helped lift us to where we are today and we are excited beyond measure to deliver on what we have promised.

And now I’d like to open it up to questions. I’m joined by Vice President Jesse Fittipaldi and Skyaa, our PR Agency of record. We are here for the next ten minutes to answer your questions, and then, we gotta get to work.

 

The following Q&A was reconstructed from our notes from this morning, and edited for clarity and correctness. Next time we’ll actually push the record button on the meeting controls.

 

Q: Can you talk about international partnerships for distribution or production?

A: As we discussed in our offering circular, we have multiple ongoing discussions about the world market, but nothing we are making public at this time. [edit: Partnerships implied by the question would constitute material disclosures we would cover in a formal filing and discuss in the planned remarks portion of an investor briefing.]

 

Q: Are you going to be on CNBC soon?

A: We were scheduled to be on CNBC the morning our stock first listed on Nasdaq, but were bumped at the last minute because Arcimoto doesn’t yet meet the $250M market capitalization minimum required for broadcast financial news.

 

Q: Can you talk about customer demographics?

A: From a geographic point of view, we have customers in every state, though these are clustered in electric vehicle early adopter states like Oregon, California, Florida, New York, Texas, New Jersey, Washington. From a demographic point of view our customers run full spectrum, though there is definitely a cluster in the 45-65 age range that tilts male.

 

Q: Are you planning to do more road shows like you did before the IPO?

A: Yes. Once we have the Signature Series vehicles on the road, we intend to tour extensively to reach more of our preorder customers who want to kick the tires, as well as increase overall familiarity and interest in the product and brand.

 

Q: What is the most difficult staffing problem you see during the scale up process?

A: The biggest challenge we see is to build up an awesome production team to meet our current and projected unit demand. We have a phenomenal core team, but we’ll need to add quite a few quality builders in a short period of time to meet our goals.

 

Q: Are you working actively to get research coverage for the stock? Will you be attending conferences?

A: Yes and yes. We are working on a comprehensive IR [investor relations] strategy that we’ll be rolling out over the coming weeks.

 

Q: I’m an analyst with _______. Interesting story here. How do I get in touch with the company to learn more?

A: All investor-related inquiries should be directed to investor@arcimoto.com.

 

Q: I want to transfer my stock purchased on the web site to my brokerage account. How can I do that?

A: Send and email to investor@arcimoto.com and we’ll walk you through the process.

 

Q: How many shares are there total?

A: 15.8M

 

Q: What percentage of the company is owned by insiders?

A: [edit: From the offering circular, prior to the offering, officers and directors owned 60.8% of the company on a fully diluted basis. We compute a 51.5% current, given the dilution from the raise.]

 

Q: Can you talk about any fleet partnerships or developments in the works with the likes of Amazon or Uber Eats?

A: Not that we can talk about right now. We continue to surface new vertical market opportunities from first responders to delivery to vacation rentals. [edit: Partnerships implied by the question would constitute material disclosures we would cover in a formal filing and discuss in the planned remarks portion of an investor briefing.]

 

Q: How can I find out what number my reservation is in the production queue, and how can I choose options?

A: One of our near-term high-level goals is the rollout of a new web front end for customers that will allow you to configure your vehicle options as well as see your place in the production queue and estimated time frame for delivery. Until then you can email info@arcimoto.com and we’ll let you know where you stand.

 

Q: Are you using the new Panasonic 21700 cells in the battery system?

A: Not currently. We are sourcing our cells from Farasis, the same manufacturer who makes cells for the Brammo/Polaris Empulse and the Zero Electric Motorcycles. They make an awesome pouch cell that will power our initial production vehicles.

 

Q: What is the SRK’s drag coefficient?

A: We have not determined this yet. The Signature Series body panels are being tooled currently. We plan to measure this directly once the signature vehicles are on the road.

 

As we stated above, if you have other investor-related questions please feel free to email investor@arcimoto.com. Because Arcimoto is now a publicly-traded company, we cannot answer any question that would constitute a material disclosure without sharing that information publicly in a formal disclosure filing.