OFFER BACKGROUND

UBCO is seeking a minimum of USD5m and up to USD15m, from wholesale investors as part of a Convertible Note bridging round. 

If approximately USD5m in new investment is raised then UBCO has a commitment from an undisclosed party to match the investment up to a maximum of USD10m. 

For new investors, this is an opportunity to support the company on its pathway to being the dominant player in the lightweight electric adventure vehicle segment. 

Over the last few months the market has quickly moved to a position where UBCO believes that a convertible note is now the most logical instrument to use for this funding round, and is consistent with what many other high growth companies are currently doing. 

Because UBCO is offering a convertible note, under New Zealand securities law UBCO is unable to make this offer available to investors who do not qualify as 'wholesale' investors (retail investors). UBCO appreciates that this will be disappointing for some of you, as the original plans had been to make the offer available to everyone through a share rather than a note issue. 

If you are unsure if you meet one of various 'wholesale' investor criteria you can read more about this here. The minimum investment in this round is $5,000. 

EXECUTIVE SUMMARY

In this decisive decade, UBCO is opening up adventure to more people than ever before. Since its launch in 2015, UBCO has developed into a go-anywhere, intelligent, electric adventure vehicle (EAV) platform that's safe, fun, versatile both on and off the road, and easy to ride and to own.

The passenger, public transit, and even aviation industries have all seen electrification. Now, UBCO is electrifying the off-road and heavy-duty end of the utility vehicle market, making it well-aligned to feed the world's rising hunger for adventure, and for versatile micromobility.

The iconic UBCO 2X2 is the world's toughest, safest, most versatile and intelligent utility vehicle. Now in its fifth generation, the 2X2 has evolved as an intelligent platform combining software (App and cloud system), hardware and a global community to deliver a connected customer experience. The 2X2 can extend any adventure, having a diverse range of riders from campers, surfers and trail riders to delivery drivers, commuters, and last-minute shoppers enjoying its functionality and excitement.

UBCO has sold over 3,000 vehicles in key markets including the US, NZ, UK, Australia, and Europe, and has 67 vehicles under a long-standing subscription trial or purchased for Domino's Pizza delivery in New Zealand. UBCO employs a multichannel sales approach via its growing distribution and dealer network, retail chain partnerships, and the unique direct online sales channel where customers can literally have a road registrable vehicle delivered in a box.

UBCO AT A GLANCE

UBCO has global networks for supply chain and servicing, and like many in the EV space, has had to innovate quickly to navigate market pressures to meet rising demand. UBCO's strong and equity-backed partnership with Taiwanese-based TPK is a serious competitive advantage. A leading global manufacturer of touch screen displays, TPK has extensive relationships throughout the global supply chain.

UBCO has more than quadrupled its staff from ~20 a year ago, with the majority of recruitment having been done in NZ and on the US West Coast. Executive leadership is centred across those two regions to enable an agile approach to managing the business and associated decision making.

By leaning into the growing hunger for adventure, and for versatile micromobility, UBCO is helping to extend the current powersports (off and on-road) market from a US$50bn to US$150bn vertical market by 2040. The aim is to take a broader view of the total addressable market, beyond just powersports, extending it to everyday accessible adventure. In doing this, the company will reach significant numbers of new consumers who are currently underserved – those with adventure potential.

UBCO is targeting revenue of US$20m in FY23 and US$100m in FY24, 3-4x YoY growth relative to FY22. Through a combination of margin improvements and expense containment, the business is focused on achieving an EBITDA positive position by Q4 FY24.

Through an open convertible note, UBCO is raising bridging capital of up to US$15m with a minimum of US$5m being sought. If the company achieves an investment of approximately US$5m or more from existing and new investors, it has a commitment of new investment up to a maximum of US$10m. This is likely to be closely followed by a pre-IPO round as it is currently evaluating listing on the ASX in a 12-18 month time frame.

PROGRESS SINCE 2021 ROUND

• Almost 3x sales increase, taking the company to 3,000 units sold to date in key markets.
• In a very challenging environment, grew production and supply chain capacity from 60 to 600 units per month, targeting 1,000 units per month capacity by the close of FY23.
• Exceeded NZ$1m revenue per month for the first three months of the new financial year.
• Signed milestone TPK agreement for significant expansion of supply chain support and production capacity.
• New Tucker Powersports purchase order lodged for 1,500 units through to March 31st 2023.
• Increased vehicle subscription long-term trial with Domino's to almost 67 vehicles under subscription or purchased.
• Good Design Award Gold Accolade, Finalist for Hi-Tech Emerging Company of the Year Award due August, Matchstiq top 100 tech employer.
• Signed on more than 20 dealers in the US.
• Commenced partnership with US-based Chemix to develop Cobalt-free battery technology.
• Launched UBCO Hubs with its London Hub opened for Northern Hemisphere Summer, and US west coast sites on the way.
• Hosted 50 global diplomats, joined NZ PM's US trade mission, hosted NZ MPs, showcased the 2X2 on PM's London mission.

INCLUSIVE ADVENTURE

Electrification is coming for the off-road segment. Invest in the leading company expanding powersports with an inclusive electric product range that appeals to the broadest audience yet.

MARKET POTENTIAL

Through its strong New Zealand heritage and testing in some of the toughest local terrains and heavy use cases, UBCO has rapidly developed into a globally used, intelligent, electric adventure vehicle platform that's well-aligned to feed the world's rising hunger for adventure and versatile micromobility.

Approximately 145 million people participate in the US Outdoor and Adventure segment annually, with almost US$900bn in annual consumer spending and more than 7% year on year growth (Outdoor Industry).

This covers everything from camping, fishing, hunting, motorcycling, off-roading, snow sports, trail sports, to water sports, wheel sports and wildlife viewing – and RVs & van life.

A NEW, EXPANSIVE CATEGORY

UBCO is looking to help extend the current powersports (on and off-road) market from a US$50bn to US$150bn US vertical market by 2040.

The powersports category is a key means for adventure, but has a way to go in terms of electrification, particularly off road, and in meeting an increasingly diverse customer base. For many, powersports conjures feelings of being complicated, dangerous, noisy, dirty, and smelly - and while this is the thrill of it for many, it is also the reason why so many don't even consider it.

UBCO believes in adventure for all, whether nipping to the store for groceries or hitting the trails and exploring the backcountry. This is why it has intentionally positioned the 2X2 as the most approachable, fun and versatile electric motorbike in the category. Taking a broader view of the total addressable powersports market, beyond just powersports, to everyday accessible adventure, UBCO is reaching significant numbers of new consumers who are currently underserved.

MARKET GEOGRAPHIES

UBCO has an existing footprint across New Zealand, Australia, the UK, Europe and the US. The company is working to focus its efforts in areas with aligned opportunity. NZ is the global R&D centre, where test and validation of new market verticals and business models occurs. UBCO's EU HQ is in Copenhagen, with a small commercial and technical team based there. The company is running a summer trial in partnership with REEF Technologies, the World's largest operator in the world of multi-purpose, neighbourhood spaces, and has a container Hub set up in central London for test rides and sales.

However, the US provides the greatest market opportunity. It is a huge driver of key trends with accelerating adventure segments, and is one of the largest powersports markets globally. UBCO has a fast-growing US presence in sales, engineering and distribution networks, with staff linked to key offices in Oregon and California as well as a number of remote team members. UBCO's US sales have almost tripled over this past year through channel partnerships - securing over 60 US dealers, alongside a recent deal with Tucker Powersports to add 200 dealers under their banner in 2022 (with more coming online every week). Also in the US, an exclusive partnership with Camping World gives UBCO access to its 5 million active adventure-loving customers.

Alongside the channel partners, UBCO is growing direct online sales within the US which essentially means a vehicle is delivered to homes in a box (or click and collect from a physical location). To create access to test rides, servicing and to teach people how to maintain and make repairs, UBCO is rolling out UBCO Hubs, which are unique containerised hubs that can be moved to hot spot locations. To that end UBCO is looking to align with areas of significant demand - for example the West Coast US where there are areas with a lot of natural playgrounds, a groundswell for electric mobility, and users with utility needs.

COMPETITIVE ENVIRONMENT

The only intelligent EV platform aimed primarily at the adventure vehicle market.

With a strong trend away from combustion vehicles in all sectors, UBCO is uniquely positioned in a large expanding market of electric mobility. UBCO has differentiated itself by developing an Intelligent Electric Vehicle Platform that will extend from 2- to 4-wheel adventure vehicles.

GENERAL COMPETITIVE DIFFERENTIATORS

UBCO's 2X2 has the highest versatility across its competitor set, being both road legal but also durable with 2-wheel drive for most demanding environments. This means riders can use it for a range of activities across urban and nature environments. Current competitor models focus on either urban riding (e.g. models like Cake OSA, Zero) or off road riding (e.g. models like Volcon, which is not road registrable, and Segway).

It is the most approachable vehicle for the broadest range of riders, providing the largest addressable market. This is because it is easy to use, i.e. step through (not over) with twist and go throttle (no clutch), and it is distinctly lighter than most motorbikes, with a lower centre of gravity for better balance, along with two hub motors for greater traction.

Compared to competitors, UBCO has a simple modular design for its 2X2 that invites customer customisation either through in-built attachment and cargo options, as well as UBCO accessories and packages. Its simplicity also means there are less parts to repair and maintain, and when needed, owners can do minor repairs and maintenance themselves.

COMPANY ADVANTAGES

UBCO is the only company in its competitor set with a strong adventure and utility product market fit. Through several years of R&D, real-world consumer testing and design improvement for the 2X2 under its belt, UBCO is now selling at higher volumes than its closest competitors, such as Cake, which has lower capacity and smaller runs.

UBCO's intelligent platform ecosystem creates digital benefits for riders - as well as a competitive advantage in having internal capability across the entire technology stack - hardware, software and firmware. This is a differentiator relative to other potential competitors like Volcon, Surron and Zero.

UBCO's omni-channel approach to go-to-market provides the ability for end users to test-ride at a range of locations including dealer and retail outlets, as well as UBCO's own locations. These locations provide a footprint that support vehicle configuration and servicing that other companies are unable to do.

UBCO uses customer-centric design thinking methodology to deliver unique solutions that are tailored to the needs of the customer. The company's design and engineering teams work in sync to ensure customer need and utility is at the centre of all product development work.

UBCO's partnership with TPK allows the company to leverage working capital, operational footprint, buying power, as well as manufacturing capability which will enable UBCO to expand production capacity over time. Given current global supply challenges and long lead times for delivery of many vehicles, the ability to forward order materials and leverage TPK's ability to source timely and cost-effective freight options is a real advantage. With this support, UBCO is able to have products readily available for customers.

CUSTOMER-CENTRIC GO-TO-MARKET STRATEGY

UBCO has found strong product-market-fit in the adventure and recreation market in North America and our home market of New Zealand. The outdoor industry in the US alone represents over $US880bn in consumer spending each year and that number is growing, somewhat accelerated by the desire for people to get outdoors following COVID lock downs.

Building on strong foundations in New Zealand agriculture, the 2X2 thrives in a range of customer applications from hunting and fishing to RV'ing, ranching, camping, commuting and overlanding. Currently UBCO's typical demographic is older, with higher disposable income, often lapsed motorcycle riders or folks that always wanted to ride but never felt there was a vehicle that met their needs. It is increasingly seeing partners or entire families purchasing 2X2s so they can ride together, given the approachability.

Refreshed branding and marketing launching in October, new product releases and special editions will increasingly attract a younger demographic, building on the 2X2 success to date.

CUSTOMER CHANNELS

In order to reach the widest possible audience, generate test rides and drive awareness, UBCO is executing an omni-channel strategy focused on dealers, retailers and online sales, enabled by UBCO owned Hubs. The aim is to make it easy for customers to find a 2X2 and get a test ride.

UBCO's direct to consumer 'vehicle in a box' model is unique – selling road registrable vehicles shipped directly to customers, that are so simple they can be assembled and ready to go in 10 minutes. Direct to consumer (D2C) sales as a proportion of revenue will grow this year and play a stronger role, driven by our refreshed branding and online marketing pipeline. These have a key focus on driving test rides which correlate to a higher sales conversion rate - either in person at events and dealers, or virtually online. This baseline provides strong foundations from which to build direct sales, as awareness grows and our marketing engine steadily picks up pace.

In terms of retail sales, UBCO's global distribution network includes dealers across its key regions, with a US growth emphasis. Its initial focus has been supporting dealers with new leads and test ride requests, expanding its network steadily towards a goal of 250 locations by the end of FY23. A significant partnership with Tucker Powersports, a world class powersports leader with an over 1,000-strong dealer network across the US, will add 200 dealerships alone to UBCO's sales network this year, and from this UBCO has already received purchase orders for a total 1,500 units through 31 March 2023. To provide fuel for its growth into the adventure market, UBCO also has an exclusive arrangement with Camping World, which has over 5 million active customers and more than 20 key US locations.

There is strong enterprise demand for UBCO's products, driven by country and state carbon reduction policies, alongside the general move toward corporate sustainability reporting. UBCO's corporate customers to date include food delivery, regional councils such as Auckland Council, tourism providers across all markets, and conservation and land custodians with strong Iwi interest. The company is also undertaking a long term subscription pilot with Domino's Pizza NZ, seeing 67 UBCO 2X2s servicing franchises across the country. Thanks to this foundational trial it is building the key infrastructure and systems needed to broaden this approach across both corporate consumer and customer segments.

To deepen and complement current customer channels, UBCO is in the early stages of introducing community-based Hubs which will nurture ongoing customer relationships, boost test rides, and foster a care and repair culture for its products. This is a containerised, footloose, and scalable Hub network offering test rides, daily rentals, servicing, tips and tricks, and lessons on how to perform simple maintenance and repairs on UBCO vehicles. For now it is focused on its recently launched London pilot Hub, and rolling out several US West Coast locations, currently being confirmed.

Opportunities for continued customer engagement and revenue include model upgrades and accessorising the 2X2 based on new adventures. This year the company will launch UBCO Club with a focus on customer engagement both pre and post sale. In addition to referral offers, UBCO Club will serve up content and useful tips that inspire new adventures, suggesting UBCO accessories and packs to enable riders to explore new adventures and uses for their UBCOs such as fishing, hunting, surfing, and camping. These efforts will be boosted by partnerships and collaborations with well-aligned and globally popular adventure brands.