Mr. William Trainer reports

VICINITY MOTOR CORP. REPORTS FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS

Vicinity Motor Corp. has released its financial and operational results for the fourth quarter and full year ended Dec. 31, 2023. All figures stated in this press release are in U.S. dollars unless stated otherwise.

Fourth quarter 2023 and subsequent operational highlights:

• Order backlog as of Dec. 31, 2023, exceeded $125-million, of which electric vehicles accounted for over 75 per cent.
• Revenue increased to $5.1-million in the fourth quarter of 2023, primarily driven by the sale of 11 Vicinity Classic transit buses.
• Invoiced 71 electric vehicle trucks to dealers in December of 2023, which were not recognized as revenue in 2023 results, with upfitting of boxes and delivery of trucks scheduled in 2024.
• Secured four new VMC 1200 distribution agreements to establish new dealerships in strategic markets across Canada, including two new dealerships in Ontario, one new dealership in Quebec and one new dealership in Alberta.
• Secured new orders for 20 Vicinity Classic clean-diesel buses from Autobus La Quebecoise for delivery in 2024 in Quebec, Canada.
• Partnered with automated driving software platform provider Adastec to create an SAE Level-4 automated Vicinity Lighting EV transit bus (the Vicinity Autonomous Lightning EV) for the North American market, signing agreements to deploy a vehicle at both Michigan State University and the Buffalo Niagara Medical Campus in mid-2024.

Management commentary

"The fourth quarter of 2023 demonstrated an increasing pace of operational execution and a growing cadence of sales momentum across all of our product lines with the invoicing of 71 VMC 1200 electric trucks for delivery in 2024 and the successful delivery of 11 Vicinity Classic transit buses to our eager customer base," said William Trainer, founder and chief executive officer of Vicinity Motor. "To enable this growth, we remain highly focused on the ongoing buildout of our North American VMC 1200 dealer network, adding four new partners in recent months. Each partner has exceptional experience and expertise in their respective regions, making them well suited to help fleet operators seamlessly transition to an all-electric future and expand VMC 1200 sales and service coverage in strategic markets across Canada.

"The VMC 1200 provides an ideal entry into the underserved commercial EV market for dealerships, with an extremely attractive price point that is further reduced through Canadian federal and provincial rebates. For example, we were recently approved by the Quebec Ministry of Transport and Sustainable Mobility in Canada for the VMC 1200 to be included in its Ecocamionnage Program to incentivize the electrification of the commercial freight and heavy vehicle transportation industry. This $85,000 incentive represents an exciting opportunity to attract attention and lower costs for new buyers who are considering making the transition to EVs.

"We also continued to seek new partners and opportunities for the forthcoming Vicinity Lighting EV transit bus. During the fourth quarter of 2023 we partnered with automated driving software platform provider Adastec to create an SAE Level-4 automated Vicinity Lighting EV transit bus -- the Vicinity Autonomous Lightning EV -- for the North American market. This innovative new commercial partnership brings together our expertise in transit buses with ADASTEC's SAE Level-4 automated driving software platform. The collaboration is set to be the first of its kind in North America, marking a substantial leap in the realm of transportation, with a strong emphasis on automated, connected and shared solutions -- driving innovation, accessibility and sustainability. We have signed agreements with Michigan State University and the Buffalo Niagara Medical Campus to deploy initial Vicinity Autonomous Lightning electric transit buses in the second quarter of 2024.

"During the fourth quarter, our transit bus business continued to provide a solid recurring customer base, with strong order momentum for the Vicinity Classic transit bus. A new purchase order from Autobus La Quebecoise for Vicinity Classic buses to service the city of Joliette, Que., and a follow-on purchase order to service the cities of La Prairie, Candiac, Saint-Philippe, Delson, Saint-Constant and Sainte-Catherine in Quebec once again demonstrated our position as the market leader in the Canadian mid-sized heavy-duty segment. Our transit buses will continue to play an important role in our backlog, providing an important pillar while we concurrently grow our electric vehicle business.

"Looking ahead, with a growing sales funnel and strong backlog -- which exceeded $125-million as of Dec. 31, 2023 -- we are laying the foundation for future success. The increasing adoption of commercial EVs is being driven by government incentives, corporate sustainability goals and declining cost of ownership -- with our EV lineup and growing dealer network capitalizing on this transition to be the commercial EV supplier of choice for many. I look forward to providing additional updates in the months to come as we strive to create sustainable, long-term value for my fellow shareholders," concluded Mr. Trainer.

Fourth quarter 2023 financial results

Revenue in the fourth quarter of 2023 increased to $5.1-million, as compared with $2-million in the fourth quarter of 2022. Revenue totalled $19.1-million for the year ended Dec. 31, 2023, as compared with $18.5-million for the year ended Dec. 31, 2022. The increase in revenue was primarily driven by the sale of 11 bus deliveries in the fourth quarter, as compared with 11 trucks in the same year-ago quarter.

Gross loss in the fourth quarter of 2023 improved to $400,000, or (9 per cent) of revenue, as compared with a gross loss of $600,000, or (28 per cent) of revenue, in the fourth quarter of 2022. Gross profit totalled $2.1-million, or 11 per cent of revenue, for the year ended Dec. 31, 2023, as compared with $400,000, or 2 per cent of revenue, in the year ended Dec. 31, 2022. The higher margins realized in 2023 are mainly a result of a product mix that has increasingly shifted toward electric trucks, which generally have a higher margin profile as compared with transit buses.

Cash used in operating activities for the fourth quarter of 2023 totalled $5.7-million, as compared with $3.9-million in 2022. Cash used in operating activities for the year ended Dec. 31, 2023, totalled $24.7-million, as compared with $9.1-million in 2022.

Net loss in the fourth quarter of 2023 totalled $9.1-million, or (20 cents) per basic and diluted share, as compared with $3.8-million, or (eight cents) per basic and diluted share, in the fourth quarter of 2022. Net loss for the year ended Dec. 31, 2023, improved to $16.6-million, or (36 cents) per basic and diluted share, as compared with $18-million, or (45 cents) per basic and diluted share, in the year ended Dec. 31, 2022.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss in the fourth quarter of 2023 totalled $3.2-million, as compared with $1.4-million in the fourth quarter of 2022. Adjusted EBITDA loss for the year ended Dec. 31, 2023, totalled $6.9-million, as compared with $7.4-million in the year ended Dec. 31, 2022.

Cash and cash equivalents as of Dec, 31, 2023, totalled $2-million, as compared with $1.6-million as of Dec. 31, 2022.

Fourth quarter and full-year 2023 results conference call

Date: Tuesday, April 2, 2024

Time: 4:30 p.m. Eastern Time

United States/Canada dial-in: 1-877-407-3982

International dial-in: 1-201-493-6780

Conference ID: 13745184

Webcast: Vicinity Motor Q4 and FY 2023 webcast

Please dial in at least 10 minutes before the start of the call to ensure timely participation.

A playback of the call will be available through Wednesday, May 1, 2024. To listen, call 1-844-512-2921 within the United States and Canada or 1-412-317-6671 when calling internationally, using replay No. 13745184.

About Vicinity Motor Corp.

Vicinity Motor is a North American supplier of electric vehicles for both public and commercial enterprise use. The company leverages a dealer network and close relationships with world-class manufacturing partners to supply its flagship electric, compressed natural gas and clean-diesel Vicinity buses, as well as the VMC 1200 electric truck to the transit and industrial markets.

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