Company Overview

Nxu, Inc. is a US technology company building energy and infrastructure products to help transition to electric vehicles (EVs). They design charging stations, battery cells, battery packs, and related software to allow diesel vehicles to switch to electric.

Nxu was previously called Atlis Motor Vehicles Inc. before a merger in May 2023. As a new company, Nxu has incurred losses and negative cash flows since starting up. They continue pursuing more funding through stock offerings or debt to sustain operations.

Company and Industry Outlook

Nxu aims to serve commercial and industrial customers that need EV solutions comparable to existing diesel vehicles. Main EV adoption challenges include limited battery life, range anxiety, and long charge times.

Nxu’s products (current and planned) address these issues:

• Proprietary megawatt charging stations
• Energy storage solutions
• Proprietary battery cells
• Modular electric vehicle platform
• Electric pickup truck

Recent progress includes developing the NxuOneTM charging station. As of March 2024, first stations are launched and multiple units produced. Production costs have declined each round as scale and efficiency improves.

However, Q1 2024 charging station operations ran at a loss due to discounted customer pricing to drive interest and utilization. Losses expected until production scales up and more stations deployed.

Most operations so far financed through securities sales. In Q1 2024, raised ~$10.7 million net through “At-The-Market” stock offering. Intend to keep obtaining capital to sustain growth plans, although success not guaranteed.

Revenue and Profitability

Focus on Megawatt Charging

• Q1 2024 revenue: $4,000 from NxuOneTM charging station electricity sales

• Losses so far due to discounted customer pricing and depreciation

• Goal is to drive customer interest while improving profitability through utilization, pricing, and more station deployments

• 2023 revenue: $500,000 from battery system/component sales

• Halted battery production to focus on charging stations

Production Investment and Cost Management

• Doubled NxuOneTM production versus prior quarter
• Reduced materials and labor costs through enhancements
• Expect continued progress through sustained investments in design, efficiency, supplier relations, and team engagement
• Aims to drive shareholder value and future earnings

Capital Funding

• Operating expenses expected to remain high as company scales up
• Continued focus on financing through stock offerings, debt, partnerships
• Success not guaranteed in realizing desired returns

Three Months Ended March 31	2024	2023	Change
Revenue	$4,000	$0	$4,000
Operating Loss	$(6,585,000)	$(13,484,000)	$6,899,000
Net Loss	$(6,541,000)	$(12,170,000)	$5,629,000

Revenue: Q1 2024 revenue from charging stations. Prior periods had no revenue.

Operating Expenses: Dropped by $6.9 million due to less R&D with battery production halted. Also lower general costs like stock compensation and payroll.

Net Loss: Improved by $5.6 million. Also had lower other gains versus 2023.

Liquidity and Capital Resources

• Q1 2024 net loss of $6.5 million and cash used in operations of $3.5 million

• March 31, 2024: $9.2 million cash on hand but $266.2 million accumulated deficit

• Q1 2024 raised ~$10.7 million net through ATM stock offering

• Reached max available funds through current stock registration

• Immediate additional financing needed to continue operations

• Access to capital not guaranteed when needed

• Raises substantial doubt about ability to continue as a going concern

Pursuing all options to raise necessary capital, including secondary offerings, debt financing, partnerships, and strategic alternatives. Success dependent on getting financing and achieving revenue goals.

Cash Flows	Q1 2024	Q1 2023
Operating Activities	$(3,487,000)	$(9,370,000)
Investing Activities	$(850,000)	$(94,000)
Financing Activities	$10,672,000	$19,662,000

Operating: Q1 2024 cash usage primarily from $6.5 million net loss, offset by gains like $2.7 million stock compensation.

Investing: Spending related to more NxuOneTM production and equipment purchases.

Financing: Q1 2024 included $10.7 million from ATM stock sales. Q1 2023 had stock/debt proceeds offset by debt repayments.

The report summarizes the company’s current situation, industry outlook, recent financials and operations, capital position, and risks to ongoing operations. Key details are presented in simple terms for a general audience. Tables help highlight financial metrics and changes between periods. The tone remains objective without overly technical language. The goal is to communicate the most salient points to readers lacking a finance background.