Good day, ladies and gentlemen, and welcome to ADOMANI’s Second Quarter 2019 Earnings Call. All lines have been placed in a listen-only mode and the floor will be open for your questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to Ms. [Asia Lockheed Morris]. Please go ahead, ma'am.

Thank you, Tom. And once again, good day and welcome to ADOMANI’s second quarter 2019 earnings call. With me on the call are Jim Reynolds, President and Chief Executive Officer; and Mike Menerey, Chief Financial Officer. I would like to begin the call by reading the Safe Harbor statement. All statements made on this call with the exception of historical facts may be considered Forward-Looking Statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although ADOMANI believes that the expectations reflected in such forward-looking statements are reasonable on the basis of current expectations, ADOMANI can make no assurances that such expectations will prove to be correct. Also these forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results to differ considerably from ADOMANI’s current expectations due to changes in operating performance, technical and economic factors, and other risks and uncertainties disclosed in ADOMANI’s annual report on Form 10-K, quarterly reports on Form 10-Q and other reports filed by ADOMANI from time-to-time with the Securities and Exchange Commission. Any forward-looking statements included in this earnings call are made only as of the date of this call. ADOMANI does not undertake any obligation to update or supplement any forward-looking statements to reflect new information, subsequent events or circumstances, except as required by law. ADOMANI cannot assure you that projected results or events will be achieved. Now, I will turn the call over to Jim Reynolds, President and CEO of ADOMANI. Mr. Reynolds, please proceed.

Thanks [Asia], and welcome everybody. I would like to begin by providing overview of our sales and operations for the second quarter of 2019 and our outlook for the remainder of 2019, and then pass it over to our CFO, Mike Manerey, for additional context and greater detail on our financials. After that, we will open it up for questions. We are pleased with the second quarter sales revenue which came in at 82% of the total sales revenue for 2018 and with the six month sales revenue total which was 96% of the full year 2018 sales revenue. We remain confident that we will be able to convert majority of the existing backlog to shift to customers in 2019 which will position us to meet analyst consensus revenue estimates for the full year. Sales revenue for the second quarter of 2019 were approximately $4.4 million that compared to 744,000 in the same period last year. Sales revenue for the six month ending June 30, 2019 was approximately 4.8 million compared to 1.2 million in 2018. Our backlog at June 30, 2019 was 10.7 million which compares to 6.3 in the same period last year. Let's get start with some of the highlights for the second quarter. We participated in a statewide bid and we're successful in being awarded the purchase order for four electric cargo vans from the county of Santa Clara. This order is included in the June 30, 2019 backlog number. We continue to mark our electric trucks and vans and we expect necessary certification shortly. We believe we will then be able to convert the many enthusiastic responses we have received from showcasing our vehicles at recent demos and ride-and-drives and the purchase orders. We've received a number of verbal purchase contents that once the HVIP…

Thank you, Jim, good afternoon everyone. Hopefully many of you've seen our earnings release that went out shortly before the call started. So, I'll be brief and get through this and we will see what we have for questions. As Jim mentioned despite the supplier issues that we discussed, sales were approximately 4.4 million for the second quarter and 4.8 million for the six months ended June 30, compared to 722,000 for the second quarter of 2018 and 1.2 million for the six months ended June 30, 2018. As also mentioned, the second quarter sales of 4.4 million were 82% of full-year 2018 revenue, and the year-to-date total of 4.8 million is 96% of that 2018 full year total. Cost to sales were approximately 4.1 million for the quarter and 4.5 million for the six months ended June 30, 2019 respectively, again compared to 722,000 for the three months ended June 30, '18 and 1.2 million for the six months ended June 30, '18. General and administrative expenses for the three months ended June 30, 2019 were approximately 1.5 million, compared to approximately 3.9 million for the corresponding six month period of 2018. That decrease of 2.4 million was primarily related to a $2.5 million decrease in non-cash stock-based compensation, expense in 19 versus 18, and the reasons for that have been previously disclosed and discussed. The decrease was partially offset by some increases in legal professional and insurance expenses but overall our general and administrative expenses remained flat. The second quarter of 2019, general and administrative expenses did include approximately 300,000 of non-cash charges, including 275,000 for stock-based compensation. The general administrative expenses for the six months ended June 30, 2019 were approximately 2.9 million, compared to approximately 7.8 million a year ago. That decrease of 4.9 million is…

Tom, please open the floor for questions.

Thank you. [Operator instructions] We will take our first question from Amit Dayal with H.C. Wainwright.

Just a couple of questions for me and then I will follow up offline. The 4.4 million in revenue is -- could you provide any color on what was delivered and to whom?

It was primarily drivetrain deliveries to Blue Bird and virtually all of it.

And a clarification on the backlog number, Mike. The 10.7 million is this the backlog we should be using, as what you have on hand after adjusting for the cancel orders and deliveries complete so far in 2019?

Yes, it was up to almost 19 million before the cancellation on those orders.

So essentially you are looking to filling majority of this remainder, you know, I’m just trying to get a sense of how the next two quarters will look like from Q, perspective. So, if 10.7 is, what is remaining and you hope to fill majority of it then we should see flat to higher quarters related to the second quarter, right?

That’s pretty accurate.

And then just one final one for me on the supplier chain issues, were these primarily stunning from Cummins? Do you have that relationship with them on going? Any color on gaps from Cummins just there are? Who is filling those for you? Just how are these issues are going to be resolved from here on?

I think the issue with Cummins for now has been changed the manufacturing from the West Coast to Indiana, and moving that production across the country, we establish it. There are assumptions where the things would get done a lot quicker and better at large facility with more experience people, but the technology transfers of how things went together and how they were delivered, a bit low longer than everybody plan. So, it's really not an issue with wiring or high voltage systems. It's really once those come in, putting those together, making sure they are put together correctly. They're tested, ship to the customer if they're installed that in. So, there is -- has been some logistics that they have as you know from the first quarter, which most of backlog that they are working from right now was an existing in the first quarter. And when we delivered $400,000 unchanged and they were able to do 10 times that in the second quarter. So, we see the problems lessening but we don’t see them going away completely yet. And our relationship with Cummins is good as always, it's fine.

And we will take our next question from Jeremy King with Phoenix House.

Hi, everyone. Thanks so much for the call. I have -- hi, how are you. Two quick questions, you mentioned the expansion of your sales capacity. And then I wanted to discuss that expansion of your sales capacity, as it relates to executing on your current orders. Can you just speak to balancing execution on your current orders and that sort of focus on increase sales capacity? How are you going to balance those things to ensure that we do execute on our current orders?

Sure. When we first started receiving orders on drivetrains, that was 95% my involvement in that, once we develop that drive train ahead of delivery and sort of received an ongoing order. It was primarily an operational issue from our side of the Company. So our sales that we have added and we currently have are all geared today towards the electric vehicles whether it'd be the truck, the van, the NEV, the chase, what they were might be. So, our sales activities in the field today are all geared toward that. We do attend some deliveries for customers or school districts and hearing their first electric vehicles to make sure everything works well. We're available for calls for that, but primarily sales is working on the new products we've developed and operations is working on the drivetrains.

And I appreciate that I do and I just wanted to ask a question about your new leased property, I believe it's in California. How much initial expense do you anticipate associated with the new property? And what exactly will you be doing with new property?

The expense is less than $10,000 a month. We have a very favorable agreement there. And as of part of what we doing there today, we're doing a few things, we're doing storing the vehicles, completed vehicles that are being used for demonstration. So we storm there, load them up on a truck, take them out either account school district, fleet owner and demonstrate the product, have them drive around, bring them back to that location, do any repairs, update the vehicles. We do some breakup dates on some of the older vehicles. The first one we received in to make sure they are compliant. As time goes on, we will store more of the finish goods inventory there which will be vehicles and we will also store parts. We will do R&D work there to develop the product we have a pretty good size facility to do that and equipment there. So, it will be little bit of everything, it will be storing vehicles, it would be demonstrating vehicles, doing R&D work. Down the road, we very little could bring in SKD kits or CKD kits and do subassemblies of components there to installment vehicles or do complete assembly of vehicles from headlights to windows to doors, everything.

[Operator instructions] We will next to Ed Woo with Ascendiant Capital.

My question is your relationship you've mentioned that commented yet, how would you characterize your relationship with Blue Bird?

Our relationship with Blue Bird is good. I mean there is nothing that has happened except they have moved on to the ability to purchase directly from Cummins, which will help them, be more competitive. I don’t know if you saw the California Energy Commissions' latest release. They have $89 million that they put out. Lion out of Canada was recipient of most of that, early funding. Now all of that has been given out. There is early funding and there is also the ability to some menu bid or some [indiscernible] what are product they want to. But because of the price of the drivetrain and the installation at Blue Bird, they were not as competitive as they thought they should be in which we agreed to. That’s one of the reasons we have emphasized and concentrated more on completed vehicles rather than drivetrains because the drivetrain that was being built was not as competitive. We think we can build one, down the growth as more competitive and we do. We talked to Blue Bird about presenting to the ADOMANI show and then what it looks like, whether they all accepted or not. Different matter completely, but certainly, they are open to see what's available to them out there and at a variable costs.

Great and we'll ask a difference question. What do you see also in terms of the competitive of landscape? I know you're in the lot more different markets. Do you see just a lot of different competitors now that you're more focused on all these other type of vehicles?

Well, there is certainly are a lot more companies in this space. And by virtue they're being in the space, we consider them competitors. But we do have inventory, we do have product in production now. We can deliver inventory while some of our competitors are still showing prototypes and demo units that they have built one-offs and not be able to deliver yet. So, I think the market is huge out there. It's -- you look at the Class III to Class VII, we talked about it. It's 0.5 million a year replacement or addition. It does take much of that market as a percentage or a piece of percentage to be very successful in this marketplace. So, there is plenty of market available to everybody out there. We don't have a specific competitor. Most of the Company started off as we did years ago, doing conversion, taking existing vehicles and converting them to electric. And they've moved on from that to buy new vehicles, de-content them, taken out the engine transmission, fuel tanks and then install an electric drivetrain system. We skipped that approach and decided to go directly to purpose built clean sheet of paper to design. So, we think that's what the future is. There will be a market for conversions. We have several quotes out right now on conversions, but the large part of the market we see are going to be for brand new units. And in that area, we don't have a lot of competition.

[Operator instructions] And there appear to be no further questions at this time. Ladies and gentlemen, this concludes today's teleconference. We thank you for your participation. You may disconnect your lines at this time and have a great day.