Taiga Announces Fourth Quarter and Full Year 2022 Results

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  • 51 personal watercrafts produced during the fourth quarter, resulting in 133 vehicles produced during the full year 2022
  • Recorded $1.4 million revenue in the fourth quarter of 2022 and $3.2 million during the full year 2022
  • Taiga’s Nomad snowmobile and Orca personal watercraft were both included in the prestigious TIME’s Best Inventions of 2022 and Taiga’s Orca personal watercraft was awarded Popular Science 2022 Best of What’s New
  • Successfully closed on the issuance of $40.15 million aggregate principal amount of secured convertible debentures on March 24 2023

MONTREAL, March 30, 2023 /CNW/ – Taiga Motors Corporation (TSX: TAIG) (“Taiga” or the “Company“), a leading electric off-road vehicle manufacturer, today reported its financial and operating results for the fourth quarter and full year 2022 ending December 31, 2022.

Taiga's Nomad snowmobiles on the production line (CNW Group/Taiga Motors Corporation)

Management Commentary

Taiga reported revenue of $1.4 million from the sale of 36 vehicles during the fourth quarter ending December 31, 2022. For the full year ended December 31, 2022, the Company reported revenue of $3.2 million from the sale of 104 vehicles. During the fourth quarter, the Company initiated deliveries of the Orca Carbon in Florida and is continuing deliveries of the Orca Carbon and the Nomad Snowmobile in select provinces and states in Canada and the United States, respectively. Taiga expanded its Taiga Service Provider (“TSP”) program during the quarter and as of December 31, 2022, has signed on 11 TSPs to provide customers service and deliveries across 15 locations in Canada and the United States. Taiga expects to scale its TSP network in line with its vehicle delivery schedule in the upcoming months.

“The fourth quarter wraps up a historic year at Taiga. Despite the challenges during the year, we successfully delivered the world’s first certified production electric snowmobiles and personal watercrafts, won multiple coveted awards, launched our hybrid direct-to-consumer model and concluded the year with over 100 vehicles delivered. Our accomplishments are not only a testament to the technology behind our products, but to the team at Taiga.” said Sam Bruneau, CEO of Taiga. “Over the past year, Taiga has been laser focused on shifting to mass production on all fronts, from fortifying its supply chain, to enhancing product manufacturability. We are now seeing our year long efforts starting to build strong momentum.”

“We also recently announced $40 million in funding from two investors that have been strong partners to Taiga. With their continued support, we are confident that we have the resources to continue our mission of revolutionizing powersports with advanced electric off-road vehicles.”

On November 10, 2022, Taiga’s Nomad snowmobile and Orca personal watercraft were both included in the prestigious TIME’s Best Inventions of 2022 in the Outdoors category. On December 2, 2022, Taiga’s Orca personal watercraft was awarded Popular Science 2022 Best of What’s New. Both of these awards, along with the Fast Company 2022 World Changing Ideas award in May 2022 are proof of the technological breakthrough Taiga has made in revolutionizing powersports.

Taiga’s pre-ordersi remained stable at 3,222 pre-orders during the fourth quarter as the company continues to focus on production and deliveries of current pre-orders. Taiga is now looking to maintain a pre-order level that’s in line with its production and delivery plan.

Taiga announced on March 24, 2023, that it had completed its previously announced private placement of $40.15 million aggregate principal amount of 10% secured convertible debentures due March 31, 2028 (the “Private Placement”). The Private Placement, the terms and use of proceeds, of which were described in detail in the Company’s press release issued on March 17, 2023, should enable the Company to operate its business in the ordinary course and execute on its 2023 business plan.

As part of the Private Placement, Taiga has agreed to reconstitute its Board of Directors. Taiga’s Board of Directors will add the following four Directors: Andrew Lapham and Michael Fizzell from Northern Private Capital; Marc Fortin from Investissement Quebec; and, Francis Séguin, as an independent director designated by Northern Private Capital and brings over 30 years’ experience in automotive manufacturing, including executive roles at Magna International. As a result of the Board reconstitution, Kent Farrell, Nadia Martel, François R. Roy and Gabriel Bernatchez have confirmed that they will be resigning from the Board of Directors. Taiga would like to thank them for their important contribution and service as Directors on Taiga’s Board.

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i Pre-orders for new Taiga vehicles are cancelable and the deposit fully refundable, and there can be no assurance that such pre-orders will be converted into sales.


Fourth Quarter Financial Highlights (All amounts in Canadian dollars unless otherwise indicated)

  • Revenue of $1.4 million recorded during the fourth quarter of 2022. Taiga reported its initial revenue of $141,461 during the first quarter of 2022.
  • Cash and cash equivalents of $22.8 million as at December 31, 2022, compared to $31.2 million as at September 30, 2022.
  • Cost of Sales of $17.1 million recorded during the fourth quarter of 2022. Taiga reported its initial Cost of Sales of $2.2 million during the first quarter of 2022.
  • Research & Development (R&D) expense (net of tax credits) decreased to $2.0 million from $2.2 million compared to the fourth quarter of 2021.
  • General & Administration (G&A) expense decreased to $4.9 million from $8.0 million compared to the fourth quarter of 2021.
  • Sales & Marketing (S&M) expense decreased to $1.0 million from $1.5 million compared to the fourth quarter of 2021.
  • Net loss before other expenses for the period increased to $23.8 million compared to $11.3 million in the fourth quarter of 2021.

Fourth Quarter Operational Updates

  • Produced 51 personal watercraft and Delivered 36 units in the fourth quarter of 2022. Taiga initiated deliveries for its electric vehicles on March 18, 2022 and has sold 104 vehicles in 2022.
  • Pre-order book remains stable with 3,222 pre-orders as of December 31, 2022, marking a 37% growth compared to 2,356 units as of December 31, 2021.
  • Remotely updated vehicles sold in 2022 and leveraged real-world data from connected fleet vehicles to develop a new snowmobile platform with improved manufacturability and vehicle performance.
  • Further optimized its factory layout for increased productivity at the Montreal production facility. The Company expects to begin realizing productivity gains, including increased production flexibility in 2023.
  • Progressed the TSP program with 11 TSP’s in total across 15 locations in Canada and the United States as of December 31, 2022.
  • Headcount at 269 full time employees at the end of the fourth quarter of 2022, with approximately 40% of the workforce employed in engineering.
2023 Priorities

For 2023, Taiga is focused on three key areas of the business, which include ramping up production, establishing a world-class customer experience, and furthering our technology advantage in off-road electrification. The future of off-road is electric, and Taiga is committed to strategically investing in and manufacturing the next generation of off-road vehicles to accelerate no-compromise access to the outdoors.

Outlook

In 2022, production remained limited by various factors, such as, supply chain pressures, availability of raw materials and other components, manufacturing process optimization and volume related cost efficiencies. Taiga has invested in its supply chain, manufacturing capabilities and inventory in order to de-risk certain key components and has also revised its snowmobile and personal watercraft platforms for improved production efficiency. Management now has better visibility of the drivers in the 2023 production program and is cautiously reducing its guidance to 1,700-1,900 vehicles deliveries in 2023. Production is expected to scale throughout the year and will be weighed to the second half of 2023. See “Forward-Looking Statements” below and “Business Risks” sections of the accompanying fourth quarter 2022 MD&A.

Conference Call

Taiga management will hold a conference call today (March 30, 2023) at 9:00 a.m. Eastern time (6:00 a.m. Pacific time) to discuss these results.

Toll-Free Dial-In: +1 855-658-2585

International Dial-In: +1 514-375-0364

The conference call will be broadcast live and available for replay here and via the Investor Relations section of Taiga’s website.

A telephonic replay of the conference call will be available after 12:00 p.m. Eastern time on the same day through April 6, 2023.

Toll-free replay number: +1 800-319-6413

International replay number: +1 604-638-9010

Replay ID: 9959

About Taiga

A Canadian company reinventing the powersports landscape with breakthrough electric off-road vehicles. Through a clean-sheet engineering approach, Taiga has pushed the frontiers of electric technology to achieve extreme power-to-weight ratios and thermal specifications required to outperform comparable high-performance combustion powersports vehicles. The first models released include a lineup of electric snowmobiles and personal watercraft to deliver on a rapidly growing demand from recreational and commercial customers who are seeking better ways to explore the great outdoors without compromise. For more information visit www.taigamotors.com.

Forward-Looking Statements

This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking information includes, but is not limited to, information with respect to our objectives and the strategies to achieve these objectives, the expected operations, financial results and condition of the Company, expectations regarding market trends, the Company’s growth rates, the Company’s future objectives and strategies to achieve those objectives, including, without limitation, organic growth and future acquisitions, expected timelines for achieving mass production capabilities, the ramp-up of its current facility and development of its second facility, expected deliveries, the ability to obtain sufficient financing, the ability to advance the Taiga Service Providers program in a measured manner and the associated manufacturing benefits in respect thereof, including increased capacity as well as information with respect to our beliefs, plans, expectations, anticipations, estimates and intentions.

This forward-looking information is identified by the use of terms and phrases such as “may”, “would”, “should”, “could”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”, and “continue”, as well as the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking information contains these terms and phrases. Forward-looking information is provided for the purposes of assisting the reader in understanding the Company and its business, operations, prospects and risks at a point in time in the context of historical and possible future developments and therefore the reader is cautioned that such information may not be appropriate for other purposes.

We draw your attention to the “Key Factors Affecting Taiga’s Performance” section of the Company’s management’s discussion and analysis for the three and twelve-month periods ended December 31, 2022 and to note 2 of our consolidated financial statements which indicate the existence of material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern for the next twelve months involves significant judgment and is dependent on, among other things, its ability to obtain necessary financing, either through a combination of public or private equity or debt financing or other sources. On March 24, 2023, the Company successfully closed a private placement of $40.15 million aggregate principal amount of 10% convertible debentures due March 31, 2028 (the “Debentures”). The entirety of the Debentures was subscribed for by two institutional investors see “Highlights of the Three-Month Period ended December 31, 2022 – Update on Financing” and “Subsequent Events” in the accompanying fourth quarter and full year 2022 MD&A for additional details.

Management is committed to secure additional sources of funds for the Company working capital needs. While the Company has been successful in securing financing in the past and believes it will be able to obtain sufficient funds in the future and ultimately achieve profitability and positive cash flows from operations, raising additional funds is dependent on a number of factors outside the Company’s control, as such there is no assurance that it will be able to do so in the future.

Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those that are disclosed in, or implied by, such forward-looking information. These risks and uncertainties include, but are not limited to, the effective further supply chain disruptions, and the impact of such disruptions on ability to fulfil orders, pre-orders for the Company’s vehicles being cancelled and those described in the Company’s management’s discussion and analysis for the three and twelve-month periods ended December 31, 2022, and under the “Risk Factors” section of the Company’s annual information form filed on March 30, 2023 on the Company’s SEDAR profile at sedar.com. Forward-looking statements reflect management’s current beliefs, expectations and assumptions and are based on information currently available to management. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated or implied by such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve known and unknown risks and uncertainties and other factors that could cause actual results to differ materially from those contemplated by such statements.

All of the forward-looking information contained in this press release is qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained herein is provided as of the date hereof, and we do not undertake to update or amend such forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law.

Taiga Motors Logo (CNW Group/Taiga Motors Corporation)

SOURCE Taiga Motors Corporation

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