UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2023

Commission File Number 001-39476

GreenPower Motor Company Inc.

(Translation of registrant's name into English)

#240 - 209 Carrall Street, Vancouver, British Columbia  V6B 2J2

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.    Form 20-F  [X]  Form 40-F  [  ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1)  [  ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [  ]


SUBMITTED HEREWITH

EXHIBITS 99.1 THROUGH 99.6 INCLUDED WITH THIS REPORT ARE HEREBY INCORPORATED BY REFERENCE AS EXHIBITS TO THE REGISTRANT'S REGISTRATION STATEMENT ON FORM S-8 (NO. 333-261422) AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS SUBMITTED.

99.1 Financial Statements for September 30, 2023
   
99.2 Management's Discussion and Analysis for September 30, 2023
   
99.3 CEO Certification for September 30, 2023
   
99.4 CFO Certification for September 30, 2023


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GreenPower Motors Inc.

/s/ Michael Sieffert
_________________________________________________
Michael Sieffert, Chief Financial Officer

Date:  November 13, 2023



 

GREENPOWER MOTOR COMPANY INC.

CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

 

For the Three and Six Months Ended September 30, 2023 and September 30, 2022

(Expressed in US dollars)

(Unaudited)



GREENPOWER MOTOR COMPANY INC.

Consolidated Condensed Interim Financial Statements

(Expressed in US Dollars)

(Unaudited)

 

 

September 30, 2023

Unaudited Consolidated Condensed Interim Statements of Financial Position 3
   
Unaudited Consolidated Condensed Interim Statements of Operations and Comprehensive Loss 4
   
Unaudited Consolidated Condensed Interim Statements of Changes in Equity 5
   
Unaudited Consolidated Condensed Interim Statements of Cash Flows 6
   
Notes to the Unaudited Consolidated Condensed Interim Financial Statements 7 - 22


GREENPOWER MOTOR COMPANY INC.

Consolidated Condensed Interim Statements of Financial Position
As at September 30, 2023 and March 31, 2023

(Expressed in US Dollars)
(Unaudited)

 

    September 30, 2023     March 31, 2023  
Assets            
Current            
Cash (Note 3) $ 1,987,875   $ 600,402  
Accounts receivable, net of allowances (Note 4)   8,039,997     10,273,376  
Sales tax receivable   53,443     133,530  
Current portion of finance lease receivables (Note 5)   182,161     1,051,873  
Promissory note receivable   145,177     159,171  
Inventory (Note 6)   35,261,715     41,609,234  
Prepaids and deposits   1,191,036     328,584  
    46,861,404     54,156,170  
Non-current            
Finance lease receivables (Note 5)   1,352,338     1,918,483  
Right of use assets (Note 7)   4,443,869     4,845,738  
Property and equipment (Note 8)   2,319,838     2,604,791  
Restricted deposit (Note 9)   405,158     -  
Other assets   1     1  
  $ 55,382,608   $ 63,525,183  
             
Liabilities            
Current            
Line of credit (Note 10) $ 6,562,204   $ 6,612,232  
Accounts payable and accrued liabilities (Note 15)   3,963,171     7,316,267  
Current portion of deferred revenue (Note 13)   7,859,965     8,059,769  
Loans payable to related parties (Note 15)   2,838,245     3,287,645  
Current portion of lease liabilities (Note 7)   676,650     669,040  
Current portion of warranty liability (Note 18)   701,573     535,484  
Sales tax payable   27,117     -  
Current portion of deferred benefit of government assistance (Note 17)   18,780     18,374  
Current portion of term loan (Note 17)   1,572     1,467  
    22,649,277     26,500,278  
Non-current            
Deferred revenue (Note 13)   2,935,680     1,938,840  
Lease liabilities (Note 7)   4,229,778     4,570,811  
Other liabilities   29,982     34,265  
Term loan (Note 17)   607,936     608,751  
Deferred benefit of government assistance (Note 17)   658,476     667,967  
Warranty liability (Note 18)   1,921,494     1,542,265  
    33,032,623     35,863,177  
             
Equity            
Share capital (Note 11)   76,239,963     75,528,238  
Reserves   14,049,178     13,066,183  
Accumulated other comprehensive loss   (126,725 )   (141,443 )
Accumulated deficit   (67,812,431 )   (60,790,972 )
    22,349,985     27,662,006  
  $ 55,382,608   $ 63,525,183  

Nature and Continuance of Operations and Going Concern - Note 1
Subsequent Events - Note 20

Approved on behalf of the Board on November 13, 2023

 /s/ Fraser Atkinson   /s/ Mark Achtemichuk
Director   Director

(The accompanying notes are an integral part of these consolidated condensed interim financial statements) 


 
GREENPOWER MOTOR COMPANY INC.
Consolidated Condensed Interim Statements of Operations and Comprehensive Loss
For the Three and Six Months Ended September 30, 2023 and 2022
(Expressed in US Dollars)
(Unaudited)

    For the three months ended       For the six months ended  
     September 30,       September 30,         September 30,       September 30,   
    2023     2022       2023     2022  
                           
Revenue (Note 16) $ 8,440,010   $ 7,737,459     $ 26,021,018   $ 11,588,564  
Cost of Sales (Note 7)   7,210,641     6,112,596       22,000,873     8,912,697  
Gross Profit   1,229,369     1,624,863       4,020,145     2,675,867  
                           
Sales, general and administrative costs                          
Salaries and administration (Note 15)   2,238,200     1,776,068       4,081,026     3,379,959  
Depreciation (Notes 7 and 8)   444,703     290,420       887,470     486,028  
Product development costs   322,200     509,555       1,135,099     754,673  
Office expense   353,671     103,426       720,327     221,102  
Insurance    399,005     321,664       819,186     672,198  
Professional fees   569,068     374,475       893,218     687,315  
Sales and marketing   155,257     235,725       291,940     602,596  
Share-based payments (Notes 12 and 15)   405,470     967,341       1,118,697     2,676,516  
Transportation costs   70,109     39,105       123,173     63,840  
Travel, accomodation, meals and entertainment   65,207     154,472       270,935     317,077  
Allowance / (recovery) for credit losses (Note 4)   193,004     (53,994 )     193,013     (25,037 )
Total sales, general and administrative costs   5,215,894     4,718,257       10,534,084     9,836,267  
                           
Loss from operations before interest, accretion and foreign exchange   (3,986,525 )   (3,093,394 )     (6,513,939 )   (7,160,400 )
                           
Interest and accretion   (266,035 )   (387,661 )     (543,986 )   (647,297 )
Foreign exchange (loss) / gain   (5,083 )   (1,108 )     (11,574 )   (36 )
                           
Loss for the period   (4,257,643 )   (3,482,163 )     (7,069,499 )   (7,807,733 )
                           
Other comprehensive income / (loss)                          
Cumulative translation reserve   (9,205 )   (73,086 )     14,718     (151,186 )
                           
Total comprehensive loss for the period $ (4,266,848 ) $ (3,555,249 )   $ (7,054,781 ) $ (7,958,919 )
                           
Loss per common share, basic and diluted $ (0.17 ) $ (0.15 )   $ (0.28 ) $ (0.34 )
Weighted average number of common shares outstanding, basic and diluted   24,949,310     23,151,360       24,925,880     23,150,859  

(The accompanying notes are an integral part of these consolidated condensed interim financial statements)


GREENPOWER MOTOR COMPANY INC.
Consolidated Condensed Interim Statements of Changes in Equity
For the Six Months ended September 30, 2023 and 2022
(Expressed in US Dollars)
(Unaudited)


    Share Capital                          
    Number of               Accumulated other     Accumulated        
    Common shares     Amount     Reserves   comprehensive loss     Deficit     Total  
                                     
Balance, March 31, 2022   23,148,038   $ 70,834,121   $ 10,038,816   $ (128,436 ) $ (46,359,308 ) $ 34,385,193  
                                     
Share issuance costs   -     (6,881 )   -     -     -     (6,881 )
                                     
Shares issued for exercise of options   3,322     15,094     (6,333 )   -     -     8,761  
                                     
Share based payments   -     -     2,676,516     -     -     2,676,516  
                                     
Fair value of stock options forfeited   -     -     (593,818 )   -     593,818     -  
                                     
Cumulative translation reserve   -     -     -     (151,186 )   -     (151,186 )
                                     
Net loss for the period   -     -     -     -     (7,807,733 )   (7,807,733 )
                                     
Balance, September 30, 2022   23,151,360   $ 70,842,334   $ 12,115,181   $ (279,622 ) $ (53,573,223 ) $ 29,104,670  
                                     
Balance, March 31, 2023   24,716,628   $ 75,528,238   $ 13,066,183   $ (141,443 ) $ (60,790,972 ) $ 27,662,006  
                                     
Shares issued for cash   188,819     520,892     -     -     -     520,892  
                                     
Share issuance costs   -     (14,904 )   -     -     -     (14,904 )
                                     
Shares issued for exercise of options   45,358     205,737     (87,662 )   -     -     118,075  
                                     
Fair value of stock options forfeited   -     -     (48,040 )   -     48,040     -  
                                     
Share based payments   -     -     1,118,697     -     -     1,118,697  
                                     
Cumulative translation reserve   -     -     -     14,718     -     14,718  
                                     
Net loss for the period   -     -     -     -     (7,069,499 )   (7,069,499 )
                                     
Balance, September 30, 2023   24,950,805   $ 76,239,963   $ 14,049,178   $ (126,725 ) $ (67,812,431 ) $ 22,349,985  

(The accompanying notes are an integral part of these consolidated condensed interim financial statements) 


GREENPOWER MOTOR COMPANY INC.

Consolidated Condensed Interim Statements of Cash Flows

For the Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited)

 

    September 30     September 30  
    2023     2022  
             
Cash flows from (used in) operating activities            
Loss for the period $ (7,069,499 ) $ (7,807,733 )
Items not affecting cash            
Allowance for credit losses   193,013     (25,037 )
Depreciation   887,470     486,028  
Share-based payments   1,118,697     2,676,516  
Accretion and accrued interest   382,330     355,477  
Foreign exchange loss (gain)   11,574     36  
Cash flow used in operating activities before changes in working capital   (4,476,415 )   (4,314,713 )
             
Changes in working capital:            
Accounts receivable   2,233,379     (1,155,789 )
Sales tax receivable   80,087     (1,220 )
Inventory   7,543,303     (11,158,056 )
Prepaids and deposits   (862,452 )   85,416  
Finance lease receivables   99,290     96,763  
Accounts payable and accrued liabilities   (3,353,096 )   863,994  
Sales tax payable   27,117     -  
Deferred revenue   565,621     5,979,401  
Warranty liability   545,318     337,081  
    2,402,152     (9,267,123 )
             
Cash flows from (used in) investing activities            
Purchase of property and equipment   (139,104 )   (181,851 )
Restricted deposit   (400,000 )   -  
Acquisition of assets from Lion Truck Body Inc.   -     (215,000 )
    (539,104 )   (396,851 )
             
Cash flows from (used in) financing activities            
(Repayment of) / loans from related parties   (421,166 )   2,534,696  
Proceeds from (repayment of) line of credit   (50,028 )   1,530,811  
Payments on lease liabilities   (533,338 )   (207,612 )
Promissory note receivable   13,994     -  
Repayment of other liabilities   (4,282 )   -  
Proceeds from issuance of common shares   520,892     -  
Equity offering costs   (14,904 )   (6,881 )
Proceeds from exercise of stock options   118,075     8,761  
    (370,757 )   3,859,775  
             
Foreign exchange on cash   (104,818 )   40,730  
             
Net increase (decrease) in cash   1,387,473     (5,763,469 )
Cash, beginning of period   600,402     6,888,322  
Cash, end of period $ 1,987,875   $ 1,124,853  

(The accompanying notes are an integral part of these consolidated condensed interim financial statements)


GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

1. Nature and Continuance of Operations and Going Concern

GreenPower Motor Company Inc. ("GreenPower" or the "Company") was incorporated in the Province of British Columbia on September 18, 2007. The Company manufacturer and distributor of purpose-built, all-electric, zero-emission medium and heavy-duty vehicles serving the cargo and delivery market, shuttle and transit space and school bus sector.

The corporate office is located at Suite 240 - 209 Carrall St., Vancouver, Canada.

These consolidated condensed interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the IASB. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with our audited financial statements for the year ended March 31, 2023.

The Company's continuing operations are dependent upon its ability to raise capital and generate cash flows. As at September 30, 2023, the Company had a cash balance of $1,987,875 working capital, defined as current assets less current liabilities, of $24,212,127 accumulated deficit of $(67,812,431) and shareholder's equity of $22,349,985. These consolidated condensed interim financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. The continuation of the Company as a going concern is dependent on future cash flows from operations including the successful sale and manufacture of electric buses to achieve a profitable level of operations and obtaining necessary financing to fund ongoing operations. The Company's ability to achieve its business objectives is subject to material uncertainty which casts substantial doubt upon the Company's ability to continue as a going concern. Management plans to address this material uncertainty by selling vehicles in inventory, collecting accounts receivable, utilizing the Company's operating line of credit and by seeking potential new sources of financing.

These consolidated condensed interim financial statements were approved by the Board of Directors on November 13, 2023.

2. Significant Accounting Policies

Basis of presentation

GreenPower has applied the same accounting policies and methods of computation in its Consolidated Condensed Interim Financial Statements as in the annual audited financial statements for the year ended March 31, 2023, except for the following which either did not apply to the prior year or are amendments which apply for the current fiscal year.


GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

2.  Significant Accounting Policies (Continued)

Adoption of accounting standards

Certain new accounting standards have been published by the IASB that are effective for annual reporting periods beginning on or after January 1, 2023, as follows:

  •  IFRS 17 - Insurance Contracts
  •  IAS 1 - Presentation of Financial Statements and IFRS Practice Statement 2 (Disclosure of Accounting Policies)
  •  IAS 8 - Accounting policies, Changes in Accounting Estimates and Errors (Definition of Accounting Estimates)
  •  IAS 12 - Income taxes (Deferred tax related to assets and liabilities arising from a single transaction)

Amendments to these standards did not cause a change to the Company's financial statements.

Future accounting pronouncements

Certain new accounting standards and interpretations have been published by the IASB that are not mandatory for the September 30, 2023 reporting period. The Company has reviewed new and revised accounting pronouncements that have been issued but are not yet effective. The Company has not early adopted any of these standards and is currently evaluating the impact, if any, that these standards might have on its consolidated condensed interim financial statements.

3. Cash

As at September 30, 2023 the Company has a cash balance of $1,987,875 (March 31, 2023 - $600,402) which is on deposit at major financial institutions in North America. The Company has no cash equivalents as at September 30, 2023 or at March 31, 2023.

4. Accounts Receivable

The Company has evaluated the carrying value of accounts receivable as at September 30, 2023 in accordance with IFRS 9 and has determined that an allowance against accounts receivable of $331,129 as at September 30, 2023 (March 31, 2023 - $139,370) is warranted.

5. Finance Lease Receivable

Greenpower's wholly owned subsidiaries San Joaquin Valley Equipment Leasing Inc. ("SJVEL") and 0939181 BC Ltd. lease vehicles to several customers, and as at September 30, 2023, the Company had a total of 6 (March 31, 2023 - 45) vehicles on lease that were determined to be finance leases and the Company had a total of 1 (March 31, 2023 - 1) vehicle on lease that was determined to be an operating lease. The reduction of 39 finance leases between March 31, 2023 and September 30, 2023 was due to the repossession of 37 vehicles previously under finance lease (Note 6, Note 19), and due to 2 finance leases that reached maturity. During the three and six months ended September 30, 2023, the Company entered into nil finance leases (three and six months ended September 30, 2022 - nil).


GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

5. Finance Lease Receivables (Continued)

As at September 30, 2023, the remaining payments to be received on Finance Lease Receivables are as follows:

    30-Sep-23  
Year 1 $ 323,759  
Year 2   326,612  
Year 3   339,231  
Year 4   309,000  
Year 5   731,750  
less: amount representing interest income   (495,853 )
Finance Lease Receivable $ 1,534,499  
Current Portion of Finance Lease Receivable $ 182,161  
Long Term Portion of Finance Lease Receivable $ 1,352,338  

6. Inventory

The following is a listing of inventory as at September 30, 2023 and March 31, 2023:

  September 30, 2023   March 31, 2023  
Work in Process and Parts $ 19,333,132   $ 9,737,474  
Finished Goods   15,928,583     31,871,760  
Total $ 35,261,715   $ 41,609,234  

The Company's finished goods inventory is primarily comprised of EV Stars, EV Star Cab and Chassis, BEAST Type D school buses, and Nano BEAST Type A school buses.

During the three months ended September 30, 2023, $6,562,846 of inventory was included in cost of sales (September 30, 2022 - $6,095,657), and there were no writedowns of inventory in either period. During the six months ended September 30, 2023, a total of 37 vehicles that were previously under finance lease were repossessed and the estimated fair value of the vehicles of $1,256,567 is included in finished goods inventory. During the six months ended September 30, 2023, $20,761,114 of inventory was included in cost of sales (September 30, 2022 - $8,839,088), and there were no writedowns of inventory in either period.


GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

7. Right of Use Assets and Lease Liabilities

The Company has recorded Right of Use Assets and Lease Liabilities in its consolidated statement of financial position related to properties for which the Company has entered into lease agreements that expire in more than one year at the inception of the leases. These leases are in a single class of Right of Use Assets, whose carrying value at September 30, 2023 was $4,443,869 (March 31, 2023 - $4,845,738). Rental payments on the Right of Use Assets are discounted using an 8.0% rate of interest and capitalized on the Consolidated Statement of Financial Position as Lease Liabilities. The value of the Right of Use Assets is determined at lease inception and include the capitalized lease liabilities, incorporate upfront costs incurred and incentives received, and  the value is depreciated over the term of the lease. For the three months ended September 30, 2023 the Company incurred interest expense of $95,904 (2022 - $36,745) on the Lease Liabilities, recognized depreciation expense of $195,177 (2022 - $139,203) on the Right of Use Assets and made total rental payments of $260,419 (2022 - $125,042). For the six months ended September 30, 2023, the Company incurred interest expense of $194,087 (2022 - $39,274) on the Lease Liabilities, recognized depreciation expense of $396,871 (2022 - $202,135) on the Right of Use Assets and made total rental payments of $533,338 (2022 - $207,612).

GreenPower entered into a Contract of Lease-Purchase with the South Charleston Development Authority for a property located in South Charleston, West Virginia during the year ended March 31, 2023. The terms of the lease required no cash up front and monthly lease payments that start May 1, 2023. GreenPower is eligible for up to $1,300,000 forgiveness on the lease, calculated on a pro-rata basis for the employment of up to 200 employees by December 31, 2024. GreenPower is also eligible for additional forgiveness of $500,000 for every 100 employees above the first 200. Title to the property will be transferred to GreenPower once total lease payments and the amount of the forgiveness reach $6.7 million. The lease liability recorded for this lease at lease inception was not reduced to reflect contingently forgivable amounts due to the uncertainty of the attainment of employment levels required to realize these lease liability reduction benefits as at the inception of the lease.

The following table summarizes changes in Right of Use Assets between March 31, 2023 and September 30, 2023:

Right of Use Assets, March 31, 2023 $ 4,845,738  
Depreciation   (402,423 )
Transfer to deposit   (5,000 )
Additions during the period   5,554  
       
Right of Use Assets, September 30, 2023 $ 4,443,869  


GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

7. Right of Use Assets and Lease Liabilities (continued)

The following table summarizes changes in Right of Use Assets between March 31, 2022 and March 31, 2023:

Right of Use Assets, March 31, 2022 $ 116,678  
Additions   4,968,446  
Additions in acquisition   448,512  
Depreciation   (571,793 )
Removal   (101,105 )
Transfer to deposit   (15,000 )
       
Right of Use Assets, March 31, 2023 $ 4,845,738  

The following table shows the remaining undiscounted payments on lease liabilities, interest on lease liabilities and the carrying value of lease liabilities.

    September 30, 2023  
1 year $ 1,026,306  
thereafter $ 5,927,352  
less amount representing interest expense $ (2,047,230 )
Lease liabilities $ 4,906,428  
Current Portion of Lease Liabilities $ 676,650  
Long Term Portion of Lease Liabilities $ 4,229,778  
Lease Liabilities $ 4,906,428  

8. Property and Equipment

The following is a summary of changes in Property and Equipment for the six months ended September 30, 2023: 

Property and Equipment, March 31, 2023 $ 2,604,791  
plus: purchases   139,104  
plus: transferred from inventory   60,783  
less: depreciation   (485,092 )
plus: foreign exchange translation   252  
Property and Equipment, September 30, 2023 $ 2,319,838  


GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

8. Property and Equipment (continued)

The following is a summary of changes in Property and Equipment for the twelve months ended March 31, 2023:

Property and Equipment, March 31, 2022 $ 3,443,317  
plus: purchases   355,992  
plus: acquired in acquisition   268,252  
less: sold   (801,317 )
less: depreciation   (662,152 )
plus: foreign exchange translation   699  
Property and Equipment, March 31, 2023 $ 2,604,791  

9. Restricted deposit

On June 23, 2023 the Company agreed to pledge a $400,000 term deposit as security for an irrevocable standby letter of credit issued by the commercial bank to an insurance company that is providing the Company with a surety bond to support the Company's importation of goods to the United States. The term deposit has a term of one year and earns interest at a fixed rate of 4.9%. The surety bond was issued on June 28, 2023, has a term of one year and is automatically renewable for successive one-year terms unless cancelled by the bank with 45 days' notice or cancelled by the surety bond provider. The Company expects that the restricted deposit will be held as security for the standby letter of credit for a period of greater than one year.

10. Line of Credit

The Company's primary bank account denominated in US dollars is linked to its Line of Credit such that funds deposited to the bank account reduce the outstanding balance on the Line of Credit. As at September 30, 2023 the Company's Line of Credit had a credit limit of up to $8,000,000 (March 31, 2023 - $8,000,000). The Line of Credit bears interest at the bank's US Base Rate (September 30, 2023 - 9.0% plus 2.0% margin, March 31, 2023 - 8.0% plus 1.5% margin).

The Line of Credit is secured by a general floating charge on the Company's assets and the assets of one of its subsidiaries, and one of the Company's subsidiaries has provided a corporate guarantee. Two directors of the Company have provided personal guarantees for a total of $5,020,000. The Line of Credit contains customary business covenants such as maintenance of security, maintenance of corporate existence, and other covenants typical for a corporate operating line of credit, and the Line of Credit has one financial covenant, to maintain a current ratio greater than 1.2:1, for which the Company is in compliance as at September 30, 2023 and March 31, 2023. In addition, the availability of the credit limit over $5,000,000 is subject to margin requirements of a percentage of finished goods inventory and accounts receivable. As of September 30, 2023 the Company had a drawn balance of $6,562,204 (March 31, 2023 - $6,612,232) on the Line of Credit.


GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

11. Share Capital

Authorized

Unlimited number of common shares without par value

Unlimited number of preferred shares without par value

Issued

During the six months ended September 30, 2023 the Company issued a total of 45,358 shares pursuant to the exercise of stock options, and 188,819 shares through the Company's ATM. During the six months ended September 30, 2022, the Company issued a total of 3,322 common shares from the exercise of options.  As at September 30, 2023 and March 31, 2023 the Company had no shares held in escrow. During the six months ended September 30, 2023, and 2022 the Company recorded $14,904, and $6,881 respectively, in share issuance costs on its Consolidated Condensed Interim Statements of Changes in Equity in regards to the issuance of shares.

At the Market Offering

In September 2022, the Company filed a prospectus supplement to its short form base shelf prospectus, pursuant to which the Company may, at its discretion and from time to time, sell common shares of the Company for aggregate gross proceeds of up to US$20,000,000. The base shelf prospectus was filed in October 2021, and was effective for a period of 25 months until November 2023.

The sale of common shares under the prospectus supplement is to be made through ATM distributions on the NASDAQ stock exchange. During the six months ended September 30, 2023, the Company sold 188,819 common shares under the ATM program for gross proceeds of $520,892 before transaction fees.

The Company incurred approximately $15,000 in professional fees and other direct expenses in connection with the ATM, which was included in share issuance costs for the six months ended September 30, 2023 ($6,881 - September 30, 2022).

12. Stock Options

The Company has two incentive stock option plans whereby it grants options to directors, officers, employees, and consultants of the Company, the 2023 Equity Incentive Plan (the "2023 Plan") which was adopted in order to grant awards to people in the United States, and the 2022 Equity Incentive Plan (the "2022 Plan").

2023 Plan

Effective February 21, 2023, GreenPower adopted the 2023 Plan which was approved by shareholders at our AGM on March 28, 2023 in order to grant stock options or non-stock option awards to people in the United States. Under the 2023 Plan GreenPower can issue stock options that are considered incentive stock options, which are stock options that qualify for certain favorable tax treatment under U.S. tax laws. Nonqualified stock options are stock options that are not incentive stock options.


GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

12. Stock options (continued)

The aggregate fair market value on the date of grant of Shares with respect to which incentive stock options are exercisable for the first time by an optionee subject to tax in the United States during any calendar year must not exceed US$100,000, or such other limit as may be prescribed by the Internal Revenue Code. Non-stock option awards mean a right granted to an award recipient under the 2023 Plan, which may include the grant of stock appreciation rights, restricted awards or other equity-based awards. No stock options have been issued under the 2023 Plan as at September 30, 2023.

2022 Plan

Effective April 19, 2022 GreenPower adopted the 2022 Equity Incentive Plan (the "2022 Plan"), which was further ratified on February 21, 2023, and which replaced the 2019 Plan. Under the 2022 Plan the Company can grant equity-based incentive awards in the form of stock options ("Options"), restricted share units ("RSUs"), performance share units ("PSUs") and deferred share units ("DSUs"). RSU's, DSU's and PSU's are collectively referred to as "Performance Based Awards". The 2022 Plan is a Rolling Plan for Options and a fixed-plan for Performance-Based Awards such that the aggregate number of Shares that: (i) may be issued upon the exercise or settlement of Options granted under the 2022 Plan (and all of the Company's other Security-Based Compensation Arrangements), shall not exceed 10% of the Company's issued and outstanding Shares from time to time, and (ii) may be issued in respect of Performance-Based Awards granted under the 2022 Plan (and all of the Company's other Security-Based Compensation Arrangements) shall not exceed 2,467,595. No performance-based awards have been issued as at September 30, 2023 or as at September 30, 2022. The 2022 Plan is considered an "evergreen" plan, since Options which have been exercised, cancelled, terminated, surrendered, forfeited or expired without being exercised shall be available for subsequent grants under the 2022 Plan and the number of awards available to grant increases as the number of issued and outstanding Shares increases.

Stock Option Plans from Prior Periods

On May 14, 2019, the Company replaced the 2016 Plan with a Rolling Stock Option Plan (the "2019 Plan"). Under the terms of the 2019 Plan, the aggregate number of Options that can be granted under the 2019 Plan cannot exceed ten (10%) of the total number of issued and outstanding Shares, calculated on a non-diluted basis. The exercise price of options granted under the 2019 Plan may not be less than the minimum prevailing price permitted by the TSXV policies with a maximum term of 10 years. On March 9, 2016, the shareholders approved the previous stock option plan which initially allowed for the issuance of up to 1,491,541 shares and which was subsequently further increased to allow up to 2,129,999 shares to be issued under the plan (the "2016 Plan"). Prior to the adoption of the 2016 Plan, the Company had adopted an incentive stock option plan (the "Plan"), whereby it could grant options to directors, officers, employees, and consultants of the Company.


GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

12. Stock options (continued)

The Company had the following incentive stock options granted under the 2022 Plan, the 2019 Plan, and 2016 Plan that are issued and outstanding as at September 30, 2023:

      Exercise     Balance                 Forfeited     Balance  
Expiry Date     Price     March 31, 2023     Granted     Exercised     or Expired     September 30, 2023  
May 4, 2023 CDN $ 3.50     57,144     -     (42,858 )   (14,286 )   -  
November 30, 2023 CDN $ 3.01     50,000     -     -     -     50,000  
February 12, 2024 CDN $ 3.50     71,787     -     -     -     71,787  
January 30, 2025 CDN $ 2.59     254,640     -     -     (5,714 )   248,926  
February 11, 2025 CDN $ 8.32     50,000     -     -     -     50,000  
July 3, 2025 CDN $ 4.90     16,071     -     -     (1,072 )   14,999  
November 19, 2025 US $ 20.00     300,000     -     -     -     300,000  
December 4, 2025 US $ 20.00     20,000     -     -     -     20,000  
May 18, 2026 CDN $ 19.62     73,275     -     -     (8,825 )   64,450  
December 10, 2026 CDN $ 16.45     553,500     -     -     (26,500 )   527,000  
July 4, 2027 CDN $ 4.25     15,000     -     -     -     15,000  
November 2, 2027 US $ 2.46     10,000     -     -     -     10,000  
February 14, 2028 CDN $ 3.80     645,000     -     (2,500 )   (5,000 )   637,500  
March 28, 2028 CDN $ 2.85     100,000     -     -     (50,000 )   50,000  
Total outstanding           2,216,417     -     (45,358 )   (111,397 )   2,059,662  
Total exercisable           1,265,128                       1,476,299  
Weighted Average                                      
Exercise Price (CDN$)         $ 10.72   $     $ 3.52   $ 7.55   $ 11.05  
Weighted Average Remaining Life       3.4 years                       3.0 years  

As at September 30, 2023, there were 435,419 stock options available for issuance under the 2023 Plan and 2022 Plan, and 2,467,595 performance based awards available for issuance under the 2023 Plan and the 2022 Plan. During the six months ended September 30, 2023:

  •  the Company issued 45,358 common shares pursuant to the exercise of stock options at a weighted average exercise price of CDN$3.52 per share for gross proceeds of CDN$159,503.
  •  14,286 stock options exercisable at CDN$3.50 per share expired unexercised.
  •  97,111 stock options exercisable at a weighted average share price of $8.14 were forfeited.
  •  During the six months ended September 30, 2023, the Company incurred share-based compensation expense with a measured fair value of $1,118,697 (September 30, 2022 - $2,676,516). The fair value of the options granted and vested were recorded as share-based payments on the Consolidated Condensed Interim Statements of Operations and Comprehensive Profit and Loss.

GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

13. Deferred Revenue

The Company recorded Deferred Revenue of $10,795,645 for deposits received from customers for the sale of all-electric vehicles and parts which were not delivered as at September 30, 2023 (March 31, 2023 - $9,998,609).

    Six months ended     Year ended  
    September 30, 2023     March 31, 2023  
Deferred Revenue, beginning balance $ 9,998,609   $ 6,514,712  
Additions to deferred revenue during the period   3,777,143     11,576,344  
Deposits returned   (231,415 )   (302,298 )
Revenue recognized from deferred revenue   (2,748,692 )   (7,790,149 )
             
Deferred Revenue, end of period $ 10,795,645   $ 9,998,609  
Current portion of deferred revenue $ 7,859,965   $ 8,059,769  
Long term portion of deferred revenue $ 2,935,680     1,938,840  
Total $ 10,795,645   $ 9,998,609  

14. Financial Instruments

The Company's financial instruments consist of cash, accounts receivable, promissory note receivable, finance lease receivables, restricted deposit, line of credit, loans payable to related parties, term loan, accounts payable and accrued liabilities, other liabilities and lease liabilities.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities;

Level 2: Inputs other than quoted prices that are observable for the asset or liabilities either directly or indirectly; and

Level 3: Inputs that are not based on observable market data

The fair value of the Company's financial instruments approximates their carrying value, unless otherwise noted.

The Company has exposure to the following financial instrument-related risks.

Credit risk

The Company's exposure to credit risk is on its cash, accounts receivable, promissory note receivable, and on its finance lease receivables and restricted deposit. The maximum exposure to credit risk is their carrying amounts in the consolidated statement of Financial Position. 

The Company's cash is comprised of cash bank balances. The Company's restricted deposit is an interest-bearing term deposit. Both cash and the restricted deposit are held in major financial institutions in Canada and the United States with a high credit quality and therefore the Company is exposed to minimal credit risk on these assets. The Company assesses the credit risk of its


GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

14. Financial Instruments (continued)

account receivable and finance lease receivables and promissory note receivable at each reporting period end and on an annual basis. As at September 30, 2023 three customers (September 30, 2022 - two) had accounts receivable balances that were more than 10% of the company's total accounts receivable balance, and collectively these customers represented 63.3% (September 30, 2022 - 87.7%) of the Company's AR balance. As at September 30, 2023 the Company recognized an allowance for credit losses of $331,129, against its accounts receivable (March 31, 2023 - $139,370) (Note 4).

Liquidity risk

The Company tries to ensure that there is sufficient capital in order to meet short-term business requirements, after taking into account the Company's cash balances and available liquidity on the Company's $8 million operating line of credit. The Company's cash is invested in bank accounts at major financial institutions in Canada and the United States and is available on demand. The continuation of the Company as a going concern is dependent on future cash flows from operations including the successful sale and manufacture of electric vehicles to achieve a profitable level of operations and obtaining necessary financing to fund ongoing operations.  The Company's ability to achieve its business objectives is subject to material uncertainty which casts substantial doubt upon the Company's ability to continue as a going concern (Note 1). The Company will continue to rely on additional financings to further its operations and meet its capital requirements.

Market risks

Market risk is the risk of loss that may arise from changes in market factors such as interest rates and foreign exchange. The Company is exposed to interest rate risk with respect to its Line of Credit (Note 10). The Company is exposed to foreign exchange risk as it conducts business in both the United States and Canada. Management monitors its foreign currency balances, but the Company does not engage in any hedging activities to reduce its foreign currency risk.

At September 30, 2023, the Company was exposed to currency risk through the following financial assets and liabilities in CDN Dollars:

Cash $ 70,089  
Accounts Receivable $ 151,357  
Sales tax receivable $ 169,228  
Prepaids and deposits $ 73,184  
Finance lease receivable $ 73,856  
Accounts payable and accrued liabilities $ (469,658 )
Related party loan and interest payable $ (3,837,541 )

The CDN/USD exchange rate as at September 30, 2023 was $0.7396 (March 31, 2023 - $0.7389). Based on the net exposure and assuming all other variables remain constant, a 10% change in the appreciation or depreciation of the Canadian dollar relative to the US dollar would result in a change of approximately $279,000 to net income/(loss).


GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

15. Related Party Transactions

A summary of compensation and other amounts paid to directors, officers and key management personnel is as follows:

    For the Three Months Ended  
    Sept 30, 2023     Sept 30, 2022  
Salaries and Benefits (1) $ 175,722   $ 148,647  
Consulting fees (2)   185,814     141,250  
Non-cash Options Vested (3)   254,087     563,771  
Total $ 615,623   $ 853,668  

    For the Six Months Ended  
    Sept 30, 2023     Sept 30, 2022  
Salaries and Benefits (1) $ 288,957   $ 272,757  
Consulting fees (2)   270,814     226,250  
Non-cash Options Vested (3)   705,779     1,569,373  
Total $ 1,265,550   $ 2,068,380  

1) Salaries and benefits incurred with directors and officers are included in Salaries and administration on the Consolidated Condensed Interim Statements of Operations and Comprehensive Loss.

2) Consulting fees included in Salaries and administration on the Consolidated Condensed Interim Statements of Operations and Comprehensive Loss are paid to the Chairman and CEO for management consulting services, as well as Director's Fees paid to GreenPower's four independent directors.

3) Amounts recognized for related party stock-based compensation are included in Share-based payments on the Consolidated Condensed Interim Statements of Operations and Comprehensive Loss.

Accounts payable and accrued liabilities at September 30, 2023 included $252,581 (March 31, 2023 - $208,215)  owed to officers, directors, and companies controlled by officers and directors, and shareholders, which is non-interest bearing, unsecured and has no fixed terms of repayment.

During the year ended March 31, 2023, the Company received loans totaling CAD$3,670,000 and US$25,000 from a company that is beneficially owned by the CEO and Chairman of the Company, and CAD$250,000 was loaned to the Company from a company beneficially owned by a Director of the Company. The loans bear interest at 12.0% per annum plus such additional bonus interest, if any, as may be agreed to and approved by GreenPower's Board of Directors at a later date.


GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

15. Related Party Transactions (continued)

During the six months ended September 30, 2023 no additional related party loans were received by the Company, and the CAD $250,000 loan plus accrued interest from a company beneficially owned by a Director of the Company was repaid, and the US$25,000 loan from a company that is beneficially owned by the CEO and Chairman of the Company was repaid.

The remaining loans from a company that is beneficially owned by the CEO and Chairman of the Company matured on March 31, 2023, however the principal balance is outstanding as at September 30, 2023. During the six months ended September 30, 2023, $194,276 of interest was expensed on related party loans (September 30, 2022 - $76,972). The Company has agreed to grant the lenders a general security assignment on the assets of GreenPower Motor Company Inc., which will be subordinated to any security assignment of senior lenders.

A director of the Company and the Company's CEO and Chairman have each provided personal guarantees of $2,510,000, or $5,020,000 in total to support the Company's $8 million operating line of credit (Note 10).

16. Segmented information and supplemental cash flow disclosure

The Company operates in one reportable operating segment, being the manufacture and distribution of all-electric medium and heavy-duty vehicles serving the cargo and delivery market, shuttle and transit space and school bus sector.

The Company's revenues allocated by geography for the three months ended September 30, 2023 and 2022 are as follows:

    For the Three Months Ended  
    September 30, 2023     September 30, 2022  
             
United States of America $ 7,775,988   $ 7,729,141  
Canada   664,022     8,318  
             
Total $ 8,440,010   $ 7,737,459  

The Company's revenues allocated by geography for the six months ended September 30, 2023 and 2022 are as follows:

    For the Six Months Ended  
    September 30, 2023     September 30, 2022  
             
United States of America $ 25,083,663   $ 11,418,796  
Canada   937,355     169,768  
             
Total $ 26,021,018   $ 11,588,564  


GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

16. Segmented Information and Supplemental Cash Flow Disclosure (continued)

As at September 30, 2023 and March 31, 2023, over 95% of the of the Company's consolidated non-current assets, being property and equipment and right of use assets, are located in the United States.

The Company's cash payments of interest and taxes during the six months ended September 30, 2023 and 2022 are as follows:

    For the six months ended  
    September 30, 2023     September 30, 2022  
Interest paid $ 276,542   $ 250,123  
Taxes paid $ -   $ -  

17. Term Loan and Deferred Benefit of Government Assistance

As part of the acquisition of Lion Truck Body Inc. that closed on July 7, 2022, the Company agreed to assume a term loan from the seller, with principal outstanding of approximately $1.5 million as at June 30, 2023, an interest rate of 3.75%, a maturity in May 2050, and fixed monthly payments. The carrying value of the term loan is determined by discounting the remaining payments at a market rate of interest. The carrying value of the term loan as at September 30, 2023 is $609,508 (March 31, 2023 - $610,218). The below market rate of interest on the loan represents the deferred benefit of government assistance, the carrying value of which is $677,256 as at September 30, 2023 (March 31, 2023 - $686,341).

18. Warranty Liability

The Company generally provides its customers with a base warranty on its vehicles including those covering brake systems, lower-level components, fleet defect provisions and battery-related components. The majority of warranties cover periods of five years, with some variation depending on the contract. Management estimates the related provision for future warranty claims based on historical warranty claim information as well as recent trends that might suggest past cost information may differ from future claims. This assessment relies on estimates and assumptions about expenditures on future warranty claims.

Actual warranty disbursements are inherently uncertain, and differences may impact cash expenditures on these claims. It is expected that the Company will incur approximately $701,573 in warranty costs within the next twelve months, with disbursements for the remaining warranty liability incurred after this date. An accrual for expected future warranty expenditures is recognized in the period when the revenue is recognized from the associated vehicle sale, and is expensed in Product Development Costs in the Company's Sales, general and administrative costs.


GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

18. Warranty Liability (continued)

The following table summarizes changes in the warranty liability over the six months ended September 30, 2023 and the year ended March 31, 2023:

    Six Months Ended     Year Ended  
    September 30, 2023     March 31, 2023  
             
Opening balance $ 2,077,750   $ 1,042,983  
Warranty additions   867,770     1,375,673  
Warranty disbursements   (322,517 )   (339,349 )
Warranty expiry   -     -  
Foreign exchange translation   64     (1,557 )
Total $ 2,623,067   $ 2,077,750  
             
Current portion $ 701,573   $ 535,484  
Long term portion   1,921,494     1,542,265  
Total $ 2,623,067   $ 2,077,749  

19. Litigation and Legal Matters

The Company has filed a civil claim against the prior CEO and Director of the Company in the Province of British Columbia, and the prior CEO and Director of the Company has filed a response with a counterclaim for wrongful dismissal in the Province of British Columbia. The prior CEO and Director of the Company also filed a similar claim in the state of California in regards to this matter, and this claim has been stayed pending the outcome of the claim in British Columbia. There has not been a resolution on the British Columbia claim or counterclaim, or the California claim as at September 30, 2023.

In addition, a company owned and controlled by a former employee who provided services to a subsidiary company of GreenPower until August 2013 filed a claim for breach of confidence against GreenPower in July 2020, and this claim has not been resolved as at September 30, 2023. The Company has not booked a provision for the claims or the counterclaim as it does not believe there is a remote or estimable material financial impact as at September 30, 2023.

During April 2023 the Company repossessed 27 EV Stars and 10 EV Star CC's which were previously on lease, after the leases were terminated following a notice of default that was not cured. In addition, the Company repossessed 1 EV Star from the same customer due to non-payment. During May 2023 this customer filed a claim in the state of California against the Company and a subsidiary of the Company, to which GreenPower has filed a response which will be heard by the court in January 2024.


GREENPOWER MOTOR COMPANY INC.

Notes to the Unaudited Consolidated Condensed Interim Financial

Statements for the Three and Six Months Ended September 30, 2023 and 2022

(Expressed in US Dollars)

(Unaudited – Prepared by Management)

20. Subsequent Events

On October 3, 2023, 3,571 common shares were issued at CAD$2.59 per share for gross proceeds of CAD$9,249 pursuant to the exercise of stock options.



GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

Introduction

This Management's Discussion and Analysis ("MD&A") is dated as of November 13, 2023 unless otherwise indicated and should be read in conjunction with the unaudited consolidated condensed interim financial statements of GreenPower Motor Company Inc. ("GreenPower", "the Company", "we", "our" or "us") for the three and six months ended September 30, 2023 and the related notes. This MD&A was written to comply with the requirements of National Instrument 51-102 - Continuous Disclosure Obligations. Results are reported in US dollars, unless otherwise noted. In the opinion of management, all adjustments (which consist only of normal recurring adjustments) considered necessary for a fair presentation have been included. The results presented for the three and six months ended September 30, 2023 are not necessarily indicative of the results that may be expected for any future period. The consolidated condensed interim financial statements are prepared in compliance with IAS 34 Interim Financial Reporting as issued by the IASB.

For the purposes of preparing this MD&A, management, in conjunction with the Board of Directors, considers the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of the Company's common shares; or (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) if it would significantly alter the total mix of information available to investors. Management, in conjunction with the Board of Directors, evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.

Further information about the Company and its operations can be obtained from the offices of the Company or from www.sedar.com.

Cautionary Note Regarding Forward-Looking Information

Certain statements contained in the following MD&A may contain forward-looking statements within the meaning of certain securities laws, including the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements in this MD&A may include, but are not limited to statements involving estimates, assumptions or judgements, and these statements may be identified by words such as "believe", "expect", "expectation", "aim", "achieve", "intend", "commit", "goal", "plan", "strive" and "objective", and similar expressions of future or conditional verbs such as "will", "may", "might", "should", "could" or "would". By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our expectations or conclusions will not prove to be accurate, that our assumptions may not be correct, and that our plans, goals, expectations and objectives will not be achieved. We caution readers not to place undue reliance on these statements as a number of risk factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements.

Non-IFRS Measures and Other Supplementary Performance Metrics

This MD&A includes certain non-IFRS measures and other supplementary performance metrics, which are defined below. These measures do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS") and are therefore unlikely to be comparable to similar measures presented by other companies. Investors are cautioned that non-IFRS financial measures should not be construed as an alternative to IFRS measures. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS. Readers should not rely on any single financial measure to evaluate GreenPower's business.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

This MD&A refers to Adjusted EBITDA "Adjusted EBITDA", a non-IFRS measure, which is defined as loss for the year (for annual periods) or loss for the period (for quarterly periods), plus depreciation, plus interest and accretion, plus share-based payments, plus / (less) the allowance / (recovery) for credit losses, plus / (less) the increase / (decrease) in the warranty liability, plus taxes. Adjusted EBITDA is a measure used by management as an indicator of profitability since it excludes the impact of movements in working capital items, certain non-cash charges, and financing costs. Therefore, Adjusted EBITDA gives the investor information as to the profitability of the business. However, Adjusted EBITDA is not a measure of financial performance under IFRS and should not be considered a substitute for other financial measures of performance. Adjusted EBITDA as calculated by GreenPower may not be comparable to Adjusted EBITDA as calculated and reported by other companies. The most comparable IFRS measure to Adjusted EBITDA is net income.

This MD&A also makes reference to "Total Cash Expenses", a non-IFRS measure, which is defined as sales, general and administrative costs plus interest and accretion, plus/(less) foreign exchange loss/(gain), less depreciation, less share-based payments, less amortization of deferred financing fees, plus/(less) the decrease/(increase) in warranty liability, plus / (less) the (allowance) / recovery for credit losses. Total Cash Expenses is a measure used by management as an indicator of sales, general and administrative, interest and accretion, and foreign exchange costs that excludes the impact of certain non-cash charges. Management believes that Total Cash Expenses provides a measure of cash expenses from the operations of the business. However, Total Cash Expenses is not a measure of financial performance under IFRS and should not be considered a substitute for other financial measures of performance. Total Cash Expenses as calculated by GreenPower may not be comparable to Total Cash Expenses as calculated and reported by other companies.

This MD&A also makes reference to "Vehicle Deliveries", a supplementary performance metric, that management believes provides useful information regarding the business activity of the Company during a quarter or year. Vehicle Deliveries is vehicles that have been sold or leased to a customer during a quarter or a year, as determined by management. The models of vehicles included in Vehicle Deliveries will vary over time, such that Vehicle Deliveries in one period may not be comparable to Vehicle Deliveries in another period. Vehicle Deliveries is not a financial metric, and vehicle deliveries is not an indication of the Company's financial performance in a given period. While management considers Vehicle Deliveries to be a useful supplementary performance metric, users are cautioned to consider other factors to evaluate GreenPower's business.

Description of Business

GreenPower designs, builds and distributes a full suite of high-floor and low-floor all-electric medium and heavy-duty vehicles, including transit buses, school buses, shuttles, cargo vans and a cab and chassis.  GreenPower employs a clean-sheet design to manufacture all-electric buses that are purpose built to be battery powered with zero emissions while integrating global suppliers for key components. This OEM platform allows GreenPower to meet the specifications of various operators while providing standard parts for ease of maintenance and accessibility for warranty requirements. GreenPower was founded in Vancouver, British Columbia, Canada with primary operational facilities in southern California. Listed on the TSX Venture Exchange since November 2015, GreenPower completed its U.S. IPO and NASDAQ listing in August 2020. For further information go to  www.greenpowermotor.com. This website does not constitute part of this MD&A and is not incorporated by reference.

Operations

The following is a description of GreenPower's business activities during the three months ended September 30, 2023. During the quarter, GreenPower completed the sale of 13 BEAST Type D all-electric school buses, 3 Nano BEAST Type A all-electric school buses, 12 EV Stars 2 EV Star Cargo and 1 EV Star specialty vehicle, and recognized revenue from finance and operating leases, as well as from the sale of parts, and from the operations of Lion Truck Body, GreenPower's truck body manufacturer.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

GreenPower did not deliver any EV Star Cab and Chassis during the quarter, and currently has over 50 EV Star CC's ready for delivery.

During the quarter GreenPower continued production of four Nano BEAST Type A school buses at the South Charleston, WV facility for the order from the state of West Virginia. In addition, the Company continued to provision the facility for the BEAST Type D School Bus production line, which is nearing completion. The preparation of the facility for production is a significant area of focus for the Company and management continues to focus its efforts on growing the plant's capabilities over time. GreenPower has collaborated with Bridge Valley College, a community college located in South Charleston, on curriculum to help train GreenPower production staff, and there are currently 20 production employees enrolled and attending classes at the college.

GreenPower sold 13 BEAST Type D school buses and 3 Type A Nano BEAST school buses during the three months ended September 30, 2023, a record number of quarterly school bus deliveries. These vehicles will be operating at school districts in California and GreenPower is continuing production of school buses to satisfy orders in multiple states across the country. These orders include an order for 15 BEAST school buses from Clark County in Nevada, which operates the country's largest owned and operated school bus fleet with over 1,900 buses, an order for 41 Type D BEAST school buses from the state of West Virginia, which was announced in April 2023, and additional orders for school buses from school districts in California.

There is strong interest in bringing zero emission vehicles to the operations side of airports in both the US and Canada where most of the aircraft ground support equipment is aging and polluting. GreenPower delivered its first airport ground support vehicle during the quarter, the EV Star hydrant truck, which is a purpose built, all electric, large aircraft refueling vehicle. This vehicle is configured to pump fuel from either inground fuel plumbing or underground tanks and has an integrated lift for the fuel line and fueling technician to reach the plane's wing re-fueling inlet. This vehicle is operating at Vancouver International airport (YVR) in Vancouver, Canada, and is being evaluated by the customer for potential follow-on orders.

GreenPower's revenue of $8.4 million during the quarter was 9.1% higher than the same quarter in the prior year, and finished the quarter with over $24.2 million in working capital, including a cash balance of over $1.9 million and over $1.4 million in available liquidity on its line of credit. GreenPower continues to diversify its sales mix and end markets and expects that school bus sales will continue to make up a meaningful portion of revenue for the remainder of the year. 

Inventory, Property and Equipment

As at September 30, 2023 the Company had:

  • Property and equipment on the balance sheet totaling $2.3 million, comprised of several models of GreenPower vehicles used for demonstration and other purposes, company vehicles used for sales, service and operations, tools and equipment, and other business property and equipment;
  • Work in process and parts inventory totaling approximately $19.3 million representing EV Star's, BEAST Type D school buses, Nano BEAST Type A school buses and parts inventory, and;
  • Finished goods inventory totaling approximately $15.9 million, comprised of EV Star cab and chassis and other EV Star models, EV 250's, BEAST Type D and Nano BEAST Type A models.

Trends

The Company does not know of any trends, commitments, events, or uncertainty that are expected to have a material effect on the Company's business, financial condition, or results of operations other than as disclosed herein under "Risk Factors".


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

Results of Operations

For the three-month period ended September 30, 2023

For the three-month period ended September 30, 2023 the Company recorded revenues of $8,440,010 and cost of sales of $7,210,641 generating a gross profit of $1,229,369 or 14.6% of revenues. Revenue was generated from the sale of 13 BEAST Type D all-electric school buses, 3 Nano BEAST Type A all-electric school bus, 2 EV Star Cargo, 12 EV Stars, 1 EV Star specialty vehicle, and recognized revenue from finance and operating leases, from the sale of parts, and from the operations of Lion Truck Body. Operating costs  consisted  of  administrative fees of $2,238,200 relating to salaries, project management, accounting, and administrative services; transportation costs of $70,109 which relate to the use of trucks, trailers, contractors as well as other operational costs needed to transport Company products around North America; travel, accommodation, meals and entertainment costs of $65,207 related to travel for project management, demonstration of Company products, and trade shows; product development costs of $322,200; sales and marketing costs of $155,257; insurance expense of $399,005; professional fees of $569,068 consisting of legal and audit fees; and office expense of $353,671 consisting of rent and other office expenses, as well as non-cash expenses including $405,470 of share-based compensation expense and depreciation of $444,703, generating a loss from operations before interest, accretion and foreign exchange of $3,986,525. Interest and accretion of $266,035 and a foreign exchange loss of $5,083 resulted in a loss for the three-month period of $4,257,643.

The consolidated total comprehensive loss for the three-month period was impacted by $9,205 of other comprehensive loss as a result of the translation of the entities with a different functional currency than presentation currency.

For the three-month period ended September 30, 2022

For the three-month period ended September 30, 2022 the Company recorded revenues of $7,737,459 and cost of sales of $6,112,596 generating a gross profit of $1,624,863 or 21.0% of revenues. Revenue was generated from the sale of 3 BEAST Type D all-electric school buses, 1 Nano BEAST Type A all-electric school bus, 21 EV Star 22-foot cargo, 3 EV Stars and 29 EV Star Cab and Chassis, and recognized revenue from finance and operating leases and Lion Truck Body since the July 7, 2022 acquisition date. Operating costs  consisted  of  administrative  fees of $1,776,068 relating to salaries, project management, accounting, and administrative services; transportation costs of $39,105 which relate to the use of trucks, trailers, contractors as well as other operational costs needed to transport Company products around North America; travel, accommodation, meals and entertainment costs of $154,472 related to travel for project management, demonstration of Company products, and trade shows; product development costs of $509,555; sales and marketing costs of $235,725; insurance expense of $321,664; professional fees of $374,475 consisting of legal and audit fees; and office expense of $103,426 consisting of rent and other office expenses, as well as non-cash expenses including $967,341 of share-based compensation expense and depreciation of $290,420, generating a loss from operations before interest, accretion and foreign exchange of $3,093,394. Interest and accretion of $387,661 and a foreign exchange loss of $1,108 resulted in a loss for the period of $3,482,163.

The consolidated total comprehensive loss for the three-month period was impacted by $73,086 of other comprehensive loss as a result of the translation of the entities with a different functional currency than presentation currency.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

For the six-month period ended September 30, 2023

For the six-month period ended September 30, 2023 the Company recorded revenues of $26,021,018 and cost of sales of $22,000,873 generating a gross profit of $4,020,145 or 15.4% of revenues. Revenue was generated from the sale of 99 EV Star Cab and Chassis ("CC"), 19 BEAST Type D all-electric school buses, 5 Nano BEAST Type A all-electric school buses, 14 EV Star 22 foot cargo,  2 EV Star Cargo, 22 EV Stars, 1 EV Star specialty vehicle, and recognized revenue from the sale of parts, from finance and operating leases and from the operations of Lion Truck Body. Operating costs  consisted  of  administrative  fees of $4,081,026 relating to salaries, project management, accounting, and administrative services; transportation costs of $123,173 which relate to the use of trucks, trailers, contractors as well as other operational costs needed to transport Company products around North America; travel, accommodation, meals and entertainment costs of $270,935 related to travel for project management, demonstration of Company products, and trade shows; product development costs of $1,135,099; sales and marketing costs of $291,940; insurance expense of $819,186; professional fees of $893,218 consisting of legal and audit fees; and office expense of $720,327 consisting of rent and other office expenses, as well as non-cash expenses including $1,118,697 of share-based compensation expense and depreciation of $887,470, generating a loss from operations before interest, accretion and foreign exchange of $6,513,939. Interest and accretion of $543,986 and a foreign exchange loss of $11,574 resulted in a loss for the period of $7,069,499.

The consolidated total comprehensive loss for the six-month period was impacted by $14,718 of other comprehensive income as a result of the translation of the entities with a different functional currency than presentation currency.

For the six-month period ended September 30, 2022

For the six-month period ended September 30, 2022 the Company recorded revenues of $11,588,564 and cost of sales of $8,912,697 generating a gross profit of $2,675,867 or 23.1% of revenues. Revenue was generated from the sale of 6 BEAST Type D all-electric school buses, 2 EV Star Plus, 1 EV Star Cargo +, 1 Nano BEAST Type A all-electric school bus, 26 EV Star 22-foot cargo, 9 EV Stars and 33 EV Star Cab and Chassis, and recognized revenue from finance and operating leases and other sources. Operating costs  consisted  of  administrative  fees of $3,379,959 relating to salaries, project management, accounting, and administrative services; transportation costs of $63,840 which relate to the use of trucks, trailers, contractors as well as other operational costs needed to transport Company products around North America; travel, accommodation, meals and entertainment costs of $317,077 related to travel for project management, demonstration of Company products, and trade shows; product development costs of $754,673; sales and marketing costs of $602,596; insurance expense of $672,198; professional fees of $687,315 consisting of legal and audit fees; and office expense of $221,102 consisting of rent and other office expenses, as well as non-cash expenses including $2,676,516 of share-based compensation expense and depreciation of $486,028, generating a loss from operations before interest, accretion and foreign exchange of $7,160,400. Interest and accretion of $647,297 and a foreign exchange loss of $36 resulted in a loss for the period of $7,807,733.

The consolidated total comprehensive loss for the six-month period was impacted by $151,186 of other comprehensive loss as a result of the translation of the entities with a different functional currency than presentation currency.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

Comparison of Quarterly Results

The following table compares the results of the quarter ended September 30, 2023 with the quarter ended September 30, 2022:

    For the three months ended     Quarter over Quarter Change  
     September 30,
2023 
     September 30,
2022 
    $     %  
                         
Revenue $ 8,440,010   $ 7,737,459   $ 702,551     9.1%  
Cost of sales   7,210,641     6,112,596     1,098,045     18.0%  
Gross Profit   1,229,369     1,624,863     (395,494 )   -24.3%  
Gross profit margin (Note 1)   14.6%     21.0%           -6.4%  
                         
Sales, general and administrative costs                        
Salaries and administration    2,238,200     1,776,068     462,132     26.0%  
Depreciation   444,703     290,420     154,283     53.1%  
Product development costs   322,200     509,555     (187,355 )   -36.8%  
Office expense   353,671     103,426     250,245     242.0%  
Insurance    399,005     321,664     77,341     24.0%  
Professional fees   569,068     374,475     194,593     52.0%  
Sales and marketing   155,257     235,725     (80,468 )   -34.1%  
Share-based payments   405,470     967,341     (561,871 )   -58.1%  
Transportation costs   70,109     39,105     31,004     79.3%  
Travel, accomodation, meals and entertainment    65,207     154,472     (89,265 )   -57.8%  
Allowance for credit losses   193,004     (53,994 )   246,998     NM  
Total sales, general  and administrative costs   5,215,894     4,718,257     497,637     10.5%  
Loss from operations before interest, accretion and foreign exchange   (3,986,525 )   (3,093,394 )   (893,131 )   28.9%  
                         
Interest and accretion   (266,035 )   (387,661 )   121,626     -31.4%  
Foreign exchange (loss)/gain   (5,083 )   (1,108 )   (3,975 )   NM  
                         
Loss for the period   (4,257,643 )   (3,482,163 )   (775,480 )   22.3%  
Other comprehensive income / (loss)                        
Cumulative translation reserve   (9,205 )   (73,086 )   63,881     -87.4%  
                         
Total comprehensive loss for the period $ (4,266,848 ) $ (3,555,249 ) $ (711,599 )   20.0%  
Loss per common share, basic and diluted $ (0.17 ) $ (0.15 ) $ (0.02 )   13.3%  
Weighted average number of common shares outstanding, basic and diluted   24,949,310     23,151,360     1,797,950     7.8%  
                         
Adjusted EBITDA (Note 2) $ (2,959,136 ) $ (1,650,888 ) $ (1,308,248 )   79.2%  

(1) - Gross profit margin, a supplementary financial metric, is calculated as gross profit divided by revenue. Gross profit margin is not a defined term under IFRS.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

(2) - "Adjusted EBITDA", as reflected above, is a non-IFRS measure, which is defined as loss for the period (for quarterly periods), or loss for the year (for annual periods) plus depreciation, plus interest and accretion, plus share-based payments, plus / (less) the allowance / (recovery) for credit losses, plus / (less) the increase / (decrease) in the warranty liability, plus taxes. Adjusted EBITDA is a measure used by management as an indicator of profitability since it excludes the impact of movements in working capital items, certain non-cash charges, and financing costs. Therefore, Adjusted EBITDA gives the investor information as to the cash generated from the operations of a business. However, Adjusted EBITDA is not a measure of financial performance under IFRS and should not be considered a substitute for other financial measures of performance. Adjusted EBITDA as calculated by GreenPower may not be comparable to Adjusted EBITDA as calculated and reported by other companies. The most comparable IFRS measure to Adjusted EBITDA is net income. See page 12 and 13 for the calculation of Adjusted EBITDA for the quarters ended September 30, 2023 and September 30, 2022.

Change in Revenue, Gross Profit, and Gross Profit Margin

The increase in revenue for the quarter ended September 30, 2023 compared to the quarter ended September 30, 2022 was $702,551, or 9.1%, and was due to the sales of 16 school buses in the quarter, which have a higher sales price than GreenPower's EV Star product line, compared to the sale of 4 school buses in the same quarter in the prior period. The higher revenue from sales of school buses in the current quarter was partially offset by higher revenue generated from sales of 50 EV Stars in the prior period, compared to 15 in the current period.

Gross profit for the quarter ended September 30, 2023 compared to the quarter ended September 30, 2022 declined by $395,494, or 24.3%. This resulted in a gross profit margin of 14.6% for the quarter ended September 30, 2023 compared to a gross profit margin of 21.0% for the quarter ended September 30, 2022. The reduction in gross profit and gross profit margin was primarily due to higher parts inventory costs, and lower margins at Lion Truck Body compared to the same quarter in the prior period.   

Change in sales, general and administrative costs

For the quarter ended September 30, 2023 compared to the quarter ended September 30, 2022, sales, general and administrative costs increased by $497,637 or 10.5%. The cost increase was largely driven by an expansion in the Company's operations and workforce, which drove increases in salaries and administration, depreciation, insurance, office expense, professional fees and transportation costs, as well as an increase in an allowance for credit losses associated with an increase in accounts receivable outstanding for more than 60 days. Increases in these costs were partially offset by a reduction in share-based payments expense associated with employee stock options, as well as a reduction in product development costs in the current quarter compared to the prior year.

Change in loss for the period, loss per common share, and Adjusted EBITDA

The loss for the quarter ended September 30, 2023 increased by $775,480 or 22.3% compared to the same quarter in the prior year due to a reduction in gross profit and due to an increase in sales, general and administrative costs.

Loss per common share for the quarter ended September 30, 2023 increased by $0.02 per share, or 13.3%, due to the increased loss for the period.

The Adjusted EBITDA loss for the quarter ended September 30, 2023 increased by $1,308,248, or 79.2% compared to the same quarter in the prior year. The decrease was primarily due to the increased loss for the current quarter compared to the same quarter in the prior year, as well as due to lower interest and accretion expense and lower share-based payments in the current quarter.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

Comparison of Six-Month Results

The following table compares the results of the six-months ended September 30, 2023 with the six-months ended September 30, 2022:

    For the Six months ended     Six Months over Six Months Change  
     September 30,
2023 
     September 30,
2022 
    $     %  
                         
Revenue $ 26,021,018   $ 11,588,564   $ 14,432,454     124.5%  
Cost of sales   22,000,873     8,912,697     13,088,176     146.8%  
Gross Profit   4,020,145     2,675,867     1,344,278     50.2%  
Gross profit margin (Note 1)   15.4%     23.1%           -7.6%  
                         
Sales, general and administrative costs                        
Salaries and administration    4,081,026     3,379,959     701,067     20.7%  
Depreciation   887,470     486,028     401,442     82.6%  
Product development costs   1,135,099     754,673     380,426     50.4%  
Office expense   720,327     221,102     499,225     225.8%  
Insurance    819,186     672,198     146,988     21.9%  
Professional fees   893,218     687,315     205,903     30.0%  
Sales and marketing   291,940     602,596     (310,656 )   -51.6%  
Share-based payments   1,118,697     2,676,516     (1,557,819 )   -58.2%  
Transportation costs   123,173     63,840     59,333     92.9%  
Travel, accomodation, meals and entertainment    270,935     317,077     (46,142 )   -14.6%  
Allowance for credit losses   193,013     (25,037 )   218,050     -870.9%  
Total sales, general  and administrative costs   10,534,084     9,836,267     697,817     7.1%  
Loss from operations before interest, accretion and  foreign exchange   (6,513,939 )   (7,160,400 )   646,461     -9.0%  
                         
Interest and accretion   (543,986 )   (647,297 )   103,311     -16.0%  
Foreign exchange (loss)/gain   (11,574 )   (36 )   (11,538 )   32050.0%  
                         
Loss for the period   (7,069,499 )   (7,807,733 )   738,234     -9.5%  
Other comprehensive income / (loss)                        
Cumulative translation reserve   14,718     (151,186 )   165,904     -109.7%  
                         
Total comprehensive loss for the period $ (7,054,781 ) $ (7,958,919 ) $ 904,138     -11.4%  
Loss per common share, basic and diluted $ (0.28 ) $ (0.34 ) $ 0.06     -17.6%  
Weighted average number of common shares outstanding, basic and diluted   24,925,880     23,150,859     1,775,021     7.7%  
                         
Adjusted EBITDA (Note 2)   (3,781,015 )   (3,683,444 ) $ (97,571 )   2.6%  

(1) - Gross profit margin, a supplementary financial metric, is calculated as gross profit divided by revenue. Gross profit margin is not a defined term under IFRS.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

(2) - "Adjusted EBITDA", as reflected above, is a non-IFRS measure, which is defined as loss for the period (for quarterly periods), or loss for the year (for annual periods) plus depreciation, plus interest and accretion, plus share-based payments, plus / (less) the allowance / (recovery) for credit losses, plus / (less) the increase / (decrease) in the warranty liability, plus taxes. Adjusted EBITDA is a measure used by management as an indicator of profitability since it excludes the impact of movements in working capital items, certain non-cash charges, and financing costs. Therefore, Adjusted EBITDA gives the investor information as to the cash generated from the operations of a business. However, Adjusted EBITDA is not a measure of financial performance under IFRS and should not be considered a substitute for other financial measures of performance. Adjusted EBITDA as calculated by GreenPower may not be comparable to Adjusted EBITDA as calculated and reported by other companies. The most comparable IFRS measure to Adjusted EBITDA is net income. See pages 12 and 13 for the calculation of Adjusted EBITDA.

Change in Revenue, Gross Profit, and Gross Profit Margin

The increase in revenue for the six-months ended September 30, 2023 compared to the six-months ended September 30, 2022 was $14,432,454 or 124.5%, and was due to the sales of 162 vehicles in the current period compared to the sale of 75 vehicles in the prior period.

Gross profit for the six-months ended September 30, 2023 compared to the six-months ended September 30, 2022 increased by $1,344,278, or 50.2%. This resulted in a gross profit margin of 15.4% for the six-months ended September 30, 2023 compared to a gross profit margin of 23.1% for the six-months ended September 30, 2022. The reduction in gross profit and gross profit margin was primarily due to higher parts inventory costs, and lower margins at Lion Truck Body compared to the same period in the prior year.

Change in sales, general and administrative costs

For the six-months ended September 30, 2023 compared to the six-months ended September 30, 2022, sales, general and administrative costs increased by $697,817 or 7.1%. The cost increase was largely driven by an expansion in the Company's operations and workforce, which drove increases in salaries and administration, depreciation, product development costs, insurance, office expense, professional fees and transportation costs, as well as an increase in an allowance for credit losses associated with an increase in accounts receivable outstanding for more than 60 days. Increases in these costs were partially offset by a reduction in share-based payments expense associated with employee stock options, as well as a reduction in sales and marketing costs in the current period compared to the prior year.

Change in loss for the period, loss per common share, and Adjusted EBITDA

The loss for the six-months ended September 30, 2023 decreased by $738,234 or 9.5% compared to the same period in the prior year due to an increase in gross profit which was partially offset by an increase in sales, general and administrative costs.

Loss per common share for the six-months ended September 30, 2023 decreased by $0.06 per share, or 17.6%, due to the reduction in the loss for the period.

The Adjusted EBITDA loss for the six-months ended September 30, 2023 increased by $97,571, or 2.6% compared to the same period in the prior year. The decrease was primarily due to the add-back of higher share-based compensation expense in the prior period compared to the current year, which more than offset the reduction in loss in the current period compared to the prior year.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

Summary of Quarterly Results

A summary of selected information for each of the last eight quarters is presented below:

    Three Months Ended  
    September 30,     June 30,     March 31,     December 31,  
    2023     2023     2023     2022  
Financial results                         
Revenues $ 8,440,010   $ 17,581,008   $ 15,304,288   $ 12,803,038  
Loss for the period   (4,257,643 )   (2,811,856 )   (3,859,919 )   (3,376,204 )
Basic and diluted earnings/(loss) per share  $ (0.17 ) $ (0.11 ) $ (0.16 ) $ (0.14 )
Balance sheet data                        
Working capital (Note 1)   24,212,127     26,452,106     27,655,892     25,660,309  
Total assets   55,382,608     54,059,697     63,525,183     65,936,534  
Shareholders' equity   22,349,985     26,204,408     27,662,006     27,302,791  

    Three Months Ended  
    September 30,     June 30,     March 31,     December 31,  
    2022     2022     2022     2021  
Financial results                        
Revenues $ 7,737,459   $ 3,851,105   $ 4,313,964   $ 5,313,352  
Loss for the period   (3,482,163 )   (4,325,570 )   (7,076,553 )   (2,958,456 )
Basic and diluted earnings/(loss) per share $ (0.15 ) $ (0.19 ) $ (0.32 ) $ (0.13 )
Balance sheet data                        
Working capital (Note 1)   26,643,011     28,331,760     31,581,470     29,385,551  
Total assets   61,920,873     56,671,910     49,606,932     42,244,573  
Shareholders' equity   29,104,670     31,699,459     34,385,193     35,372,237  

1) - Working capital defined as Total Current Assets minus Total Current Liabilities

Changes in Quarterly Results

GreenPower's revenue declined in the quarter ended September 30, 2023 compared to the quarter ended June 30, 2023, due to 31 Vehicle Deliveries in the current quarter compared to 131 Vehicle Deliveries in the prior quarter, and this reduction was almost entirely comprised of EV Star CC deliveries. Quarterly increases in revenues in the 4 quarters ended June 30, 2023 was largely driven by quarter over quarter increases in Vehicle Deliveries, specifically EV Star CC's, and was also impacted by the acquisition of Lion Truck Body during the quarter ended September 30, 2022.

During the eight quarters ended September 30, 2023 GreenPower's loss ranged between ($2,811,856) and ($7,076,553) and loss per share ranged from ($0.11) to ($0.32). Improvements in these two metrics was largely driven by increases in gross profit and reductions in these metrics often occurred during quarters with high non-cash share-based payments costs, which can vary significantly from quarter to quarter due to the Black Scholes valuation of employee stock options and the associated recognition of these costs according to employee stock option vesting.

GreenPower's total assets declined from $63.5 million as at March 31, 2023 to $55.4 million as at September 30, 2023. The reduction in assets over the period was primarily due to the collection of Accounts Receivable and sales of Inventory. The increase in assets in the quarters ending at March 31, 2023 was largely the result of increases in inventory and accounts receivable, both of which were driven by higher vehicle production and revenues over the same period.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

During the four quarters ended September 30, 2023 GreenPower's working capital ranged between a low of $24.2 million as at September 30, 2023 and a high of $27.7 million as at March 31, 2023, which is lower than the prior year. The lower working capital levels in the current year compared to the prior year was largely the result of higher current liabilities in the current year compared to the prior year, which more than offset increases in current assets in the current year compared to the prior year.

The following table summarizes vehicle deliveries pursuant to vehicle sales for the last eight quarters:

  For the three months ended
  September 30, June 30, March 31, December 31,
  2023 2023 2023 2022
Vehicle Deliveries        
EV Star (Note 1) 15 123 120 100
Nano BEAST and BEAST school bus 16 8 1 1
EV 250 0 0 2 0
         
Vehicle Deliveries (Note 2) 31 131 123 101

  For the three months ended
  September 30, June 30, March 31, December 31,
  2022 2022 2022 2021
Vehicle Deliveries        
EV Star (Note 1) 50 18 11 15
Nano BEAST and BEAST school bus 4 3 8 8
EV 250 0 0 0 0
         
Vehicle Deliveries (Note 2) 54 21 19 23

1)  Includes various models of EV Stars

2) "Vehicle Deliveries", as reflected above, is a supplementary performance metric, that management believes provides useful information regarding the business activity of the Company during a quarter or year. Vehicle Deliveries is vehicles that have been sold or leased to a customer during a quarter or a year, as determined by management. The models of vehicles included in Vehicle Deliveries will vary over time, such that Vehicle Deliveries in one period may not be comparable to Vehicle Deliveries in another period. Vehicle Deliveries is not a financial metric, and vehicle deliveries is not an indication of the Company's financial performance in a given period. While management considers Vehicle Deliveries to be a useful supplementary performance metric, users are cautioned to consider other factors to evaluate GreenPower's business.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

The following table summarizes cash expenses for the last eight quarters:

    For the three months ended  
    September 30,     June 30,     March 31,     December 31,  
    2023     2023     2023     2022  
                         
Total sales, general and administrative costs $ 5,215,894   $ 5,318,190   $ 5,490,422   $ 5,208,592  
Plus:                        
Interest and accretion   266,035     277,951     437,284     465,188  
Foreign exchange loss/(gain)   5,083     6,491     30,861     -  
Less:                        
Depreciation   (444,703 )   (442,767 )   (402,673 )   (330,522 )
Share-based payments   (405,470 )   (713,227 )   (468,444 )   (500,933 )
(Increase)/decrease in warranty liability   10,705     (556,023 )   (318,063 )   (377,218 )
(Allowance) / recovery for credit losses   (193,004 )   (9 )   114,842     (235,032 )
                         
Total Cash Expenses (Note 1) $ 4,454,540   $ 3,890,606   $ 4,884,229   $ 4,230,075  

    For the three months ended  
    September 30,     June 30,     March 31,     December 31,  
    2022     2022     2022     2021  
                         
Total sales, general and administrative costs $ 4,718,257   $ 5,118,011   $ 6,916,671   $ 4,277,630  
Plus:                        
Interest and accretion   387,661     259,636     150,083     94,103  
Foreign exchange loss/(gain)   1,108     (1,072 )   371     62,772  
Less:                        
Depreciation   (290,420 )   (195,608 )   (269,273 )   (127,210 )
Share-based payments   (967,341 )   (1,709,175 )   (2,983,653 )   (1,109,505 )
Amortization of deferred financing fees               (78,113 )   (80,808 )
(Increase)/decrease in warranty liability   (239,847 )   (99,639 )   20,970     13,817  
(Allowance) / recovery for credit losses   53,994     (28,957 )   91,176     (87,644 )
                         
Total Cash Expenses (Note 1) $ 3,663,412   $ 3,343,196   $ 3,848,232   $ 3,043,155  

1) "Total Cash Expenses", as reflected above, is a non-IFRS measure which is defined as sales, general and administrative costs plus interest and accretion, plus/(less) foreign exchange loss/(gain), less depreciation, less share-based payments less amortization of deferred financing fees, plus/(less) the decrease/(increase) in warranty liability, plus / (less) the (allowance) / recovery for credit losses. Total Cash Expenses is a measure used by management as an indicator of sales, general and administrative, interest and accretion, and foreign exchange costs that excludes the impact of certain non-cash charges. Management believes that Total Cash Expenses provides a measure of cash expenses from the operations of the business. However, Total Cash Expenses is not a measure of financial performance under IFRS and should not be considered a substitute for other financial measures of performance. Total Cash Expenses as calculated by GreenPower may not be comparable to Total Cash Expenses as calculated and reported by other companies.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

The following table summarizes Adjusted EBITDA for the last eight quarters:

    For the three months ended   
    September 30,     June 30,     March 31,     December 31,  
    2023     2023     2023     2022  
                         
Loss for the period $ (4,257,643 ) $ (2,811,856 ) $ (3,859,919 ) $ (3,376,204 )
Plus:                        
Depreciation   444,703     442,767     402,673     330,522  
Interest and accretion   266,035     277,951     437,284     465,188  
Share-based payments   405,470     713,227     468,444     500,933  
Allowance / (recovery) for credit losses   193,004     9     (114,842 )   235,032  
Increase/(decrease) in warranty liability   (10,705 )   556,023     318,063     377,218  
                         
Adjusted EBITDA (Note 1) $ (2,959,136 ) $ (821,879 ) $ (2,348,297 ) $ (1,467,311 )

    For the three months ended   
    September 30,     June 30,     March 31,     December 31,  
    2022     2022     2022     2021  
                         
Loss for the period $ (3,482,163 ) $ (4,325,571 ) $ (7,076,553 ) $ (2,958,456 )
Plus:                        
Depreciation   290,420     195,608     269,273     127,210  
Interest and accretion   387,661     259,636     150,083     94,103  
Share-based payments   967,341     1,709,175     2,983,653     1,109,505  
Allowance / (recovery) for credit losses   (53,994 )   28,957     (91,176 )   87,644  
Increase/(decrease) in warranty liability   239,847     99,639     (20,970 )   (13,817 )
                         
Adjusted EBITDA (Note 1) $ (1,650,888 ) $ (2,032,556 ) $ (3,785,690 ) $ (1,553,811 )

1) "Adjusted EBITDA", as reflected above, is a non-IFRS measure, which is defined as loss for the period (for quarterly periods), or loss for the year (for annual periods) plus depreciation, plus interest and accretion, plus share-based payments, plus / (less) the allowance / (recovery) for credit losses, plus / (less) the increase / (decrease) in the warranty liability, plus taxes. Adjusted EBITDA is a measure used by management as an indicator of profitability since it excludes the impact of movements in working capital items, certain non-cash charges, and financing costs. Therefore, Adjusted EBITDA gives the investor information as to the cash generated from the operations of a business. However, Adjusted EBITDA is not a measure of financial performance under IFRS and should not be considered a substitute for other financial measures of performance. Adjusted EBITDA as calculated by GreenPower may not be comparable to Adjusted EBITDA as calculated and reported by other companies. The most comparable IFRS measure to Adjusted EBITDA is net income.

Liquidity and Capital Resources

At September 30, 2023, the Company had a cash balance of $1,987,875 working capital, defined as current assets less current liabilities, of $24,212,127. The Company's line of credit has a maximum credit limit of up to $8,000,000 and amounts available on the line of credit in excess of $5,000,000 are subject to margining requirements, and as at September 30, 2023 the Line of Credit had a drawn balance of $6,562,204. The Company manages its capital structure and makes adjustments to it based on available funds to the Company. The Company may continue to rely on additional financings and the sale of its inventory to further its operations and meet its capital requirements to manufacture EV vehicles, expand its production capacity and further develop its sales, marketing, engineering, and technical resources. The Company's ability to achieve its business objectives is subject to material uncertainty which casts substantial doubt upon the Company's ability to continue as a going concern. The Company will continue to rely on additional financings to further its operations and meet its capital requirements.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

Off-Balance Sheet Arrangements

As of the date of this filing, the Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Company including, without limitation, such considerations as liquidity and capital resources that have not previously been discussed.

Related Party Transactions

A summary of compensation and other amounts paid to directors, officers and key management personnel is as follows:

    For the Three Months Ended  
    Sept 30, 2023     Sept 30, 2022  
Salaries and Benefits (1) $ 175,722   $ 148,647  
Consulting fees (2)   185,814     141,250  
Non-cash Options Vested (3)   254,087     563,771  
Total $ 615,623   $ 853,668  

    For the Six Months Ended  
    Sept 30, 2023     Sept 30, 2022  
Salaries and Benefits (1) $ 288,957   $ 272,757  
Consulting fees (2)   270,814     226,250  
Non-cash Options Vested (3)   705,779     1,569,373  
Total $ 1,265,550   $ 2,068,380  

1) Salaries and benefits incurred with directors and officers are included in Salaries and administration on the Consolidated Condensed Interim Statements of Operations and Comprehensive Loss.

2) Consulting fees included in Salaries and administration on the Consolidated Condensed Interim Statements of Operations and Comprehensive Loss are paid to the Chairman and CEO for management consulting services, as well as Director's Fees paid to GreenPower's four independent directors.

3) Amounts recognized for related party stock-based compensation are included in Share-based payments on the Consolidated Condensed Interim Statements of Operations and Comprehensive Loss.

Accounts payable and accrued liabilities at September 30, 2023 included $252,581 (March 31, 2023 - $208,215)  owed to officers, directors, and companies controlled by officers and directors, and shareholders, which is non-interest bearing, unsecured and has no fixed terms of repayment.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

During the year ended March 31, 2023, the Company received loans totaling CAD$3,670,000 and US$25,000 from a company that is beneficially owned by the CEO and Chairman of the Company, and CAD$250,000 was loaned to the Company from a company beneficially owned by a Director of the Company. The loans bear interest at 12.0% per annum plus such additional bonus interest, if any, as may be agreed to and approved by GreenPower's Board of Directors at a later date.

During the six months ended September 30, 2023 no additional related party loans were received by the Company, and the CAD $250,000 loan plus accrued interest from a company beneficially owned by a Director of the Company was repaid, and the US$25,000 loan from a company that is beneficially owned by the CEO and Chairman of the Company was repaid.

The remaining loans from a company that is beneficially owned by the CEO and Chairman of the Company matured on March 31, 2023, however the principal balance is outstanding as at September 30, 2023. During the six months ended September 30, 2023, $194,276 of interest was expensed on related party loans (September 30, 2022 - $76,972). The Company has agreed to grant the lenders a general security assignment on the assets of GreenPower Motor Company Inc., which will be subordinated to any security assignment of senior lenders.

A director of the Company and the Company's CEO and Chairman have each provided personal guarantees of $2,510,000, or $5,020,000 in total to support the Company's $8 million operating line of credit.

New and Amended Standards

Adoption of accounting standards

Certain new accounting standards have been published by the IASB or the IFRS Interpretations Committee that are effective for annual reporting periods beginning on or after January 1, 2023, as follows:

  • IFRS 17 - Insurance Contracts
  • IAS 1 - Presentation of Financial Statements and IFRS Practice Statement 2 (Disclosure of Accounting Policies)
  • IAS 8 - Accounting policies, Changes in Accounting Estimates and Errors (Definition of Accounting Estimates)
  • IAS 12 - Income taxes (Deferred tax related to assets and liabilities arising from a single transaction)

Amendments to these standards did not cause a change to the Company's financial statements.

Future accounting pronouncements

Certain new accounting standards and interpretations have been published by the IASB or the IFRS Interpretations Committee that are not mandatory for the September 30, 2023 reporting period. The Company has reviewed new and revised accounting pronouncements that have been issued but are not yet effective. The Company has not early adopted any of these standards and is currently evaluating the impact, if any, that these standards might have on its consolidated condensed interim financial statements.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

Critical Accounting Estimates

Management has made certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period. Actual outcomes could differ from these estimates. The impacts of such estimates may require accounting adjustments based on future occurrences. Revisions to critical accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions, and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting judgements

i. The determination of the functional currency the Company and of each entity within the consolidated Company

ii. The Company's ability to achieve its business objectives is subject to material uncertainty which casts substantial doubt upon the Company's ability to continue as a going concern

Critical accounting estimates and assumptions

i. The determination of the discount rates used to discount the promissory note receivable, term loan, the deferred benefit of government assistance, finance  lease receivable and lease liabilities

ii. The estimated accrual rate for the warranty provision on the sale of all-electric vehicles

iii. The classification of leases as either financial leases or operating leases

iv. The determination that the Company is not involved in any legal matters that require a provision

v. The determination of an allowance for doubtful accounts on the Company's trade receivables

vi. The valuation of tangible assets and financial liabilities acquired in the Lion Truck Body (LTB) Inc. transaction

vii. The estimate of the useful life of equipment

viii. The estimate of the net realizable value of inventory

ix. The estimated value of the deferred benefit of government assistance

x. Estimates underlying the recognition of proceeds from government vouchers and grants

xi. Estimates underlying the determination of the carrying value of the West Virginia lease liability and right of use asset

xii. Estimates underlying the calculation of deferred income tax assets and deferred income tax recovery

xiii. The determination of overheads to be allocated to inventory and charged to cost of sales


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

Financial Instruments

The Company's financial instruments consist of cash, accounts receivable, promissory note receivable, finance lease receivables, restricted deposit, line of credit, loans payable to related parties, term loan, accounts payable and accrued liabilities, other liabilities and lease liabilities.

The Company has exposure to the following financial instrument related risks.

Credit risk

The Company's exposure to credit risk is on its cash, accounts receivable, promissory note receivable, and on its finance lease receivables and restricted deposit. The maximum exposure to credit risk is their carrying amounts in the consolidated statement of Financial Position. 

The Company's cash is comprised of cash bank balances, and the Company's restricted deposit is an interest-bearing term deposit, all of which is held in major financial institutions in Canada and the United States with a high credit quality and therefore the Company is exposed to minimal credit risk on these assets. The Company assesses the credit risk of its account receivable and finance lease receivables and promissory note receivable at each reporting period end and on an annual basis. As at September 30, 2023 the Company recognized an allowance for credit losses of $331,129, against its accounts receivable (March 31, 2023 - $139,370).

Liquidity risk

The Company tries to ensure that there is sufficient capital in order to meet short-term business requirements, after taking into account the Company's cash balances and available liquidity on the Company's $8 million operating line of credit. The Company's cash is invested in bank accounts at major financial institutions in Canada and the United States and is available on demand. The continuation of the Company as a going concern is dependent on future cash flows from operations including the successful sale and manufacture of electric vehicles to achieve a profitable level of operations and obtaining necessary financing to fund ongoing operations.  The Company's ability to achieve its business objectives is subject to material uncertainty which casts substantial doubt upon the Company's ability to continue as a going concern. The Company will continue to rely on additional financings to further its operations and meet its capital requirements.

Market risks

Market risk is the risk of loss that may arise from changes in market factors such as interest rates and foreign exchange. The Company is exposed to interest rate risk with respect to its Line of Credit.

The Company is exposed to foreign exchange risk as it conducts business in both the United States and Canada. Management monitors its foreign currency balances, but the Company does not engage in any hedging activities to reduce its foreign currency risk.

At September 30, 2023, the Company was exposed to currency risk through the following financial assets and liabilities in CDN Dollars:

Cash $ 70,089  
Accounts Receivable $ 151,357  
Sales tax receivable $ 169,228  
Prepaids and deposits $ 73,184  
Finance lease receivable $ 73,856  
Accounts payable and accrued liabilities $ (469,658 )
Related party loan and interest payable $ (3,837,541 )


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

The CDN/USD exchange rate as at September 30, 2023 was $0.7396 (March 31, 2023 - $0.7389). Based on the net exposure and assuming all other variables remain constant, a 10% change in the appreciation or depreciation of the Canadian dollar relative to the US dollar would result in a change of approximately $279,000 to net income/loss.

Capital Management

The Company's capital management objective is to obtain sufficient capital to develop new business opportunities for the benefit of its shareholders. To meet these objectives, management monitors the Company's ongoing capital requirements on specific business opportunities on a case-by-case basis. The capital structure of the Company consists of cash, operating line of credit, the term loan, loans from related parties and equity attributable to common shareholders, consisting of issued share capital and deficit. The line of credit has one financial covenant, to maintain a current ratio greater than 1.2:1, for which the Company is currently in compliance. In September 2022 filed a prospectus supplement to its short form base shelf prospectus, pursuant to which the Company may, at its discretion and from time to time, sell common shares of the Company for aggregate gross proceeds of up to $20 million through the Nasdaq stock exchange. The base shelf prospectus was filed in October 2021, and was effective for a period of 25 months until November 2023. During the six months ended September 30, 2023, the Company sold 188,819 common shares of the Company under the ATM program raising gross proceeds of $520,892. As at September 30, 2023, the Company had a cash balance of $1,987,875, working capital, defined as current assets less current liabilities, of $24,212,127 accumulated deficit of ($67,812,431) and shareholder's equity of $22,349,985. Subject to market conditions and other factors the Company may raise additional capital in the future to fund and grow its business for the benefit of shareholders. There has been no change to the Company's approach to financial management during the quarter.

Outlook

For the immediate future, the Company plans to:

  • Complete production and delivery of several models of EV Stars and BEAST school buses currently in various stages of production;

  • Deliver the remaining vehicles in finished goods inventory;

  • Continue production of all-electric school buses in the West Virginia facility;

  • Continue to develop and expand its dealer network in order to generate new sales opportunities and increase sales backlog;

  • Evaluate and consider entering into new sources of financing to fund the business;

  • Further develop its sales and marketing, engineering and technical resources and capabilities.

Capitalization and Outstanding Security Data

The total number of common shares issued and outstanding is 24,950,805 as of September 30, 2023. There are no preferred shares issued and outstanding.

An incentive stock option plan was established for the benefit of directors, officers, employees and consultants of the Company. As of September 30, 2023, there are 2,059,662 options granted and outstanding.

As at November 13, 2023 the Company had 24,954,376 issued shares and 2,056,091 options outstanding.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

Disclosure of Internal Controls

Management is responsible for establishing and maintaining disclosure controls and procedures in order to provide reasonable assurance that material information relating to the Company is made known to them in a timely manner and that information required to be disclosed is reported within time periods prescribed by applicable securities legislation. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

As previously reported in our annual MD&A, in preparing our consolidated financial statements as of March 31, 2023 and 2022 and for the fiscal years ended March 31, 2023, 2022 and 2021 we determined that the ineffectiveness of the Company's internal control over financial reporting was due to the following material weaknesses in internal control over financial reporting:

  • We did not design and maintain effective controls over revenues or the bank reconciliation process.
  • We did not design and maintain effective controls to account for transactions related to inventory and capital asset assets and to ensure that transactions were recorded in the correct period.
  • We did not design and maintain effective controls over the accounting treatment relating to complex transactions and for business combinations.

Management is in the process of implementing changes and controls to ensure the control deficiencies contributing to the material weaknesses will be remediated. The remediation actions will include designing, implementing and improving internal controls over the areas identified. The Company has engaged an external financial controls consultant to assist in this process and is in the process of hiring additional qualified accounting resources and professionals to manage the implementation of improved controls over financial reporting. During the quarter ended September 30, 2023, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Risk Factors

Investing in the common shares of the Company involves risk. Prospective investors should carefully consider the risks described below, together with all of the other information included in this MD&A before making an investment decision. If any of the following risks actually occurs, the business, financial condition or results of operations of the Company could be harmed. In such an event, the trading price of the common shares could decline and prospective investors may lose part or all of their investment.

Operational Risk

The Company is exposed to many types of operational risks that affect all companies. Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and/or systems. Operational risk is present in all of the Company's business activities, and incorporates exposure relating to fiduciary breaches, product liability claims, product recalls, regulatory compliance failures, legal disputes, business disruption, technology failures, business integration, damage to physical assets, employee safety, dependence on suppliers, foreign exchange fluctuations, insurance coverage and rising insurance costs.  Such risks also include the risk of misconduct, theft or fraud by employees or others, unauthorized transactions by employees, operational or human error or not having sufficient levels or quality of staffing resources to successfully achieve the Company's strategic or operational objectives. The occurrence of an event caused by an operational risk that is material could have a material adverse effect on the Company's business, financial condition, liquidity and operating results.

Reliance on Management

The Company is relying solely on the past business success of its directors and officers. The success of the Company is dependent upon the efforts and abilities of its directors, officers and employees. The loss of any of its directors, officers or employees could have a material adverse effect upon the business and prospects of the Company.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

Competition in the industry

The Company faces competition from a number of existing manufacturers of all-electric medium and heavy-duty vehicles and buses, as well as manufacturers of traditional medium and heavy-duty vehicles. The Company competes in the zero-emission, or alternative fuel segment of this market. Several of the company's competitors, both publicly listed and privately owned, have raised or have access to a significant amount of capital to invest in the growth and development of their businesses which has increased the competitive threat from several well-capitalized competitors. In addition to existing competitors in various market segments, there is the potential for future competitors to enter the market.

No Dividend Payment History

The Company has not paid any dividends and may not produce earnings or pay dividends in the immediate or foreseeable future.

Reliance on Key Suppliers

Our products contain numerous purchased parts which we source globally directly from suppliers, some of which are single-source suppliers, although we attempt to qualify and obtain components from multiple sources whenever feasible. Any significant increases in our production may require us to procure additional components in a short amount of time, and in the past we have also replaced certain suppliers because of their failure to provide components that met our quality control standards or our timing requirements. There is no assurance that we will be able to secure additional or alternate sources of supply for our components or develop our own replacements in a timely manner, if at all. If we encounter unexpected difficulties with key suppliers, and if we are unable to fill these needs from other suppliers, we could experience production delays and potential loss of access to important technology and parts for producing, servicing and supporting our products.

Provision for Warranty Costs

The Company offers warranties on the medium and heavy duty vehicles and buses it sells. Management estimates the related provision for future warranty claims based on historical warranty claim information as well as recent trends that might suggest past cost information may differ from future claims. Factors that could

impact future warranty claims include the success of the Company's productivity and quality initiatives as well as parts and labour costs. Actual warranty expense could differ from the provisions which are estimated by management, and these differences could be material and may negatively impact the company's financial results and financial position.

Sales, Marketing, Government Grants and Subsidies

Presently, the initial price of the Company's products are higher than a traditional diesel bus and certain grants and subsidies are available to offset these higher prices. These grants and subsidies include but are not limited to the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project ("HVIP") from the California Air Resources Board ("CARB") in partnership with Calstart, the New Jersey Zero Emission Incentive Program ("NJZIP") operated by the New Jersey Economic Development Authority (NJEDA), the Specialty-Use Vehicle Incentive ("SUVI") Program funded by the Province of British Columbia, Canada, the Incentives for Medium and Heavy Duty Zero Emission Vehicles ("iMHZEV") program operated by the Canadian federal government, the clean trucks NYSERDA program and the New York Voucher Incentive Program in the state of New York, the South Coast AQMD funding in California, Federal Transit Authority funding for eligible transit properties across the US, and VW Mitigation Trust Funds allocated to programs throughout the US. The ability for potential purchasers to receive funding from these programs is subject to the risk of the programs being funded by governments, and the risk of the delay in the timing of advancing funds to the specific programs. To the extent that program funding is not approved, or if the funding is approved but timing of advancing of funds is delayed, subject to cancellation, or is otherwise uncertain, this could have a material adverse effect on our business, financial condition, operating results and prospects.

Current requirements and regulations may change or become more onerous

The Company's products must comply with local regulatory and safety requirements in order to be allowed to operate within the relevant jurisdiction or to qualify for funding. These requirements are subject to change and one regulatory environment is not indicative of another.


GreenPower Motor Company Inc.

Management’s Discussion and  Analysis

For the period ended September 30, 2023

Discussion dated: as of November 13, 2023

 

Litigation and Legal Proceedings

As of the date of this report the Company is not currently a party to any litigation or legal proceedings which  are material, either individually or in the aggregate. The Company has filed a civil claim against the prior CEO and Director of the Company in the Province of British Columbia, and the prior CEO and Director of the Company has filed a response with a counterclaim for wrongful dismissal in the Province of British Columbia. The prior CEO and Director of the Company also filed a similar claim in the state of California in regards to this matter, and this claim has been stayed pending the outcome of the claim in British Columbia. There has not been a resolution on the British Columbia claim or counterclaim, or the California claim as at September 30, 2023. In addition, a company owned and controlled by a former employee who provided services to a  subsidiary company of GreenPower until August 2013 filed a claim for breach of confidence against GreenPower in July 2020, and this claim has not been resolved as at September 30, 2023. The Company has not booked a provision for the claims or the counterclaim as it does not believe there is a probable or estimable material financial impact as at September 30, 2023. During April 2023 the Company repossessed 27 EV Stars and 10 EV Star CC's which were previously on lease, after the leases were terminated following a notice of default that was not cured. In addition, the Company repossessed 1 EV Star from the same customer due to non-payment. During May 2023 this customer filed a claim in the state of California against the Company and a subsidiary of the Company,to which GreenPower has filed a response which will be heard by the court in January 2024.

Reliance on Shipping

We rely on global shipping for vehicles that we produce at contract manufacturers, and for certain parts and components sourced from our global network of suppliers. We have experienced an increase in shipping costs and have experienced delays of deliveries of parts and components from our global suppliers, and on vehicles arriving from our contract manufacturers. While these delays and cost increases are not currently at a level that they have caused a material disruption or negative impact to our profitability, these delays and costs may increase to a point that they may negatively impact our financial results and ability to grow our business. 

Events after the reporting period

On October 3, 2023 3,571, common shares were issued at CAD$2.59 per share for gross proceeds of CAD$9,249 pursuant to the exercise of stock options.



Form 52-109F2 - Certification of interim filings (full interim certificate)

I, Fraser Atkinson, Chief Executive Officer of GreenPower Motor Company Inc. certify that:

1. Review: I have reviewed the issuer's interim financial statements and interim MD&A (together the interim filings) of GreenPower Motor Company Inc. (the issuer) for the interim period    ended September 30, 2023.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility: The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR) for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings:

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that:

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.

5.1 Control framework: The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is Internal Control - Integrated Framework Issued by the Committee of Sponsoring Organization of the Treadway Commission in 2013.


5.2 ICFR - reportable deficiency relating to design: The issuer has disclosed in its interim MD&A each material weakness relating to design existing at September 30, 2023.

(a) a description of the material weakness;

(b) the impact of the material weakness on the issuer's financial reporting and its ICFR; and

(c) the issuer's current plans, if any, or any actions already undertaken, for remediating the material weakness.

5.3 Limitation on scope of design: N/A

6. Reporting of changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on July 1, 2023 and ended on September 30, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.

 

Date: November 13, 2023

 

/s/ Fraser Atkinson
Fraser Atkinson
Chief Executive Officer



Form 52-109F2 - Certification of interim filings (full interim certificate)

I, Michael Sieffert, Chief Financial Officer of GreenPower Motor Company Inc. certify that:

1. Review: I have reviewed the issuer's interim financial statements and interim MD&A (together the interim filings) of GreenPower Motor Company Inc. (the issuer) for the interim period    ended September 30, 2023.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility: The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR) for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings:

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that:

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.

5.1 Control framework: The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is Internal Control - Integrated Framework Issued by the Committee of Sponsoring Organization of the Treadway Commission in 2013.


5.2 ICFR - reportable deficiency relating to design: The issuer has disclosed in its interim MD&A each material weakness relating to design existing at September 30, 2023.

(a) a description of the material weakness;

(b) the impact of the material weakness on the issuer's financial reporting and its ICFR; and

(c) the issuer's current plans, if any, or any actions already undertaken, for remediating the material weakness.

5.3 Limitation on scope of design: N/A

6. Reporting of changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on July 1, 2023 and ended on September 30, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.

 

Date: November 13, 2023

 

/s/ Michael Sieffert
Michael Sieffert
Chief Financial Officer



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