Taiga Announces First Quarter 2023 Results

• Significant ramp up with 96 vehicles produced in the first quarter of 2023 and 222 vehicles produced year-to-date as of May 12, 2023.
• Continued revenue growth with $1.7 million revenue generated in the first quarter of 2023.
• Successfully closed on the issuance of $40.15 million aggregate principal amount of secured convertible debentures on March 24, 2023, with an additional $6.6 million issued on April 27, 2023, for a total of $46.75 million raised.

MONTREAL, May 15, 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 first quarter ending March 31, 2023.

Management Commentary

Taiga reported revenue of $1.7 million from the sale of 59 vehicles during the first quarter ending March 31, 2023. Taiga is steadily ramping up its manufacturing capabilities and continues its positive sequential trajectory with a total of 96 vehicles produced, enabled by the ramp up from new suppliers coming online in the second half of the first quarter. Additionally, Taiga initiated deliveries in British Columbia and Texas, and expanded its Taiga Service Provider ("TSP") network during the quarter. As of March 31, 2023, had signed on 14 TSPs to provide deliveries and after-sales service across 18 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 first quarter marked an important milestone for Taiga as we begin to see tangible operational results from the supply chain foundations enabling volume production that we built over the past year."  said Sam Bruneau, CEO of Taiga. "During the first quarter of 2023, we were able to materially ramp-up our production levels and produced 222 vehicles by May 12, 2023, with a significant throughput increase in April. We are laser-focused on building upon this momentum as we remain on track on our 2023 plan."

"We have raised an additional $6.6 million following the end of the first quarter and have seen a total of $46.75 million invested this year. This investment by strong partners is a testament to their continued confidence in Taiga's technology and will help us secure our 2023 business plan and maintain our leadership position in powersport electrification."

Taiga's pre-ordersⁱ remained stable at 3,185 pre-orders during the first quarter as the company focuses on maintaining a pre-order level and sales pipeline 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") entirely subscribed to by two investors, Northern Private Capital and Investissement Québec. Under the terms of the Private Placement, the option to raise additional capital was granted and as at April 27, 2023, the two investors had collectively raised an additional $6.6 million, bringing the total amount to $46.75 million. 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.

Following the Private Placement, Taiga's Board of Directors has now onboarded the following four Directors: Andrew Lapham and Michael Fizzell from Northern Private Capital; Marc Fortin from Investissement Québec; and, Francis Séguin, as an independent director designated by Northern Private Capital and brings with him over 30 years of experience in automotive manufacturing, including executive roles at Magna International.

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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.

First Quarter 2023 Financial Highlights (All amounts in Canadian dollars unless indicated otherwise)

• Revenue of $1.7 million recorded during the first quarter of 2023, compared to $141,461 recorded in the first quarter of 2022. The 1,123% increase in revenue is associated with the delivery ramp up with 59 vehicles delivered in the first quarter of 2023 compared to 7 vehicles delivered in the prior year quarter.
• Cost of Sales of $5.8 million recorded during the first quarter of 2023, compared to $2.2 million reported in the first quarter of 2022. The increase in Cost of Sales is associated with the increased production output.
• Research & Development (R&D) expense (net of tax credits) increased to $3.9 million from $1.4 million compared to the first quarter of 2022.
• General & Administration (G&A) expense increased to $5.0 million from $4.8 million compared to the first quarter of 2022.
• Sales & Marketing (S&M) expense maintained at $1.0 million, in line with the first quarter of 2022.
• Net loss before other expenses for the period increased to $14.0 million compared to $9.2 million in the first quarter of 2022.
• Cash and cash equivalents of $40.5 million as at March 31, 2023, compared to $22.8 million as at December 31, 2022. The increase in cash and cash equivalents is due to the private placement of $40.15 million of convertible debentures closed on March 24, 2023.
• Inventory increased to $24.3 million as at March 31, 2023, compared to $20.8 million as at December 31, 2022.

First Quarter Operational Updates

• Delivered 59 vehicles, including 34 personal watercrafts and 25 snowmobiles during the first quarter of 2023. Produced 96 vehicles, including 51 personal watercrafts and 45 snowmobiles during the first quarter of 2023. As of May 12, 2023, Taiga has produced 222 vehicles for the year.
• Pre-orders remain stable with 3,185 pre-orders as of March 31, 2023, net of deliveries during the quarter. Management continues to manage pre-order levels in line with expected deliveries.
• Beta testing over-the-air Fast Charging software updates on previously sold vehicles.
• Taiga's engineers completed the longest known one-day ride on an electric snowmobile, with 330 kilometers ridden on the 2023 Nomad snowmobile while Beta testing Taiga's DC Fast Charging capabilities on existing Québec snowmobile trail network and public charging infrastructure.
• Expanded the TSP network with a total of 14 TSPs across 18 locations in Canada and the United States as of March 31, 2023.
• Headcount at 276 full time employees at the end of the first quarter of 2023, 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

Taiga continues to expect deliveries of 1,700-1,900 vehicles in 2023. The company is steadily ramping up production and expects annual production to be weighed to the second half of 2023. See "Forward-Looking Statements" below and "Business Risks" sections of the accompanying first quarter 2023 MD&A.

Conference Call

Taiga management will hold a conference call today (May 15, 2023) at 9:00 a.m. Eastern time (6:00 a.m. Pacific time) to discuss these results.

Toll-Free Dial-In: [phone]
International Dial-In: [phone]

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 May 22, 2023.

Toll-free replay number: [phone]
International replay number: [phone]
Replay ID: 0149

About Taiga

Taiga (TSX: TAIG) is 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-month periods ended March 31, 2023, 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"). An option for additional convertible debenture with the same terms was exercised and resulted in an additional $6.6 million, totalling $46.75 million in capital raised through the private placement. The entirety of the Debentures was subscribed for by two institutional investors see "Highlights of the Three-Month Period ended March 31, 2023 - 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, de-listing of Taiga's securities by the TSX following the placement of Taiga under the remedial delisting review of the TSX and those described in the Company's management's discussion and analysis for the three-month periods ended March 31, 2023, 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.

SOURCE Taiga Motors Corporation

Investor Relations, Shahroz Hussain, [email protected]