Q3 2022 GreenPower Motor Company Inc Earnings Call

[music].

Speaker 1: Good day and welcome to.

Good day and welcome to.

Speaker 1: the Green Power Motor Company third quarter earnings call. All participants will be in listen-only mode.

The Green power Motor Company third quarter earnings call, all participants will be in listen only mode.

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Speaker 1: After today's presentation, there will be an opportunity to ask questions.

After today's presentation there'll be an opportunity to ask questions.

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Speaker 1: I would now like to turn the conference over to Michael Fisher, Chief Financial Officer. Please go ahead.

I would now like to turn the conference over to Michael Sheaffer, Chief Financial Officer. Please go ahead.

Speaker 2: Thank you. This is Michael Siefert, the Chief Financial Officer of Green Power Motor Company. I would like to welcome everyone to our call to discuss Green Power's financial results for the period ended December 31st, 2021. I'm here today with our Chief Executive Officer, Fraser Atkinson, our President, Brendan Riley, and our VP of Sales and Marketing, Ryan Shetterly.

Thank you. This is Michael <unk>, Chief Financial Officer of Green Power Motor Company I would like to welcome everyone to our call to discuss our financial results for the period ended December 31 2021.

I'm here today, with our Chief Executive Officer, Frazer Atkinson, our President Brendan Wiley.

<unk> sales and marketing line.

Speaker 2: During today's call, we may make comments or statements about our future expectations, plans, and prospects, which may constitute forward-looking statements for the purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities law.

During today's call, we may make comments or statements about our future expectations plans and prospects constitute forward looking statements for the purposes of the safe Harbor provisions under the private Securities Litigation Reform Act.

95.

Copel Canadian Securities laws.

Speaker 2: Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including those discussed in our quarterly interim results

<unk> results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in our quarterly interim results.

Speaker 2: and MDNA filed on CDAR and on EDGAR. In addition, these four looking statements relate to the date on which they are made.

N DNA filed on SEDAR and Edgar.

In addition, these forward looking statements relate to the date on which they are made.

Speaker 2: We anticipate that subsequent events and developments may cause the company's views to change.

We anticipate that subsequent events and developments may cause the company's views to change.

Speaker 2: Green Power disclaims any intention or obligation to update or revise any forward-looking statement.

Repower disclaims any intention or obligation to update or revise any forward looking statements.

Speaker 2: whether as a result of new information, future events, or otherwise.

Whether as a result of new information future events or otherwise.

Speaker 2: Also, during the course of today's call, we may refer to certain non-IFRS financial measures. Reconciliation of these non-IFRS measures can be found in our MD&A on CDAR and on EDGAR and is also located on our website at www.greenpowermotor.com.

Also during the course of today's call, we may refer to certain non <unk>.

The financial measures reconciliation of these non <unk> measures can be found in our MD&A on SEDAR and Edgar and there's also located on our website at Www Dot Green power.

Speaker 2: I will now pass the call over to Green Power's CEO , Fraser Ackerman.

Paul.

I will now pass the call over to our CEO Fraser Atkinson.

Speaker 2: Thanks, Michael. Over the years, we've talked about money and mandates being drivers for adoption of electric vehicles and growth drivers for companies like ours.

Thanks, Michael.

Over the years, we've talked about money and mandates being drivers for adoption of electric vehicles and growth drivers for companies like ours.

Speaker 2: Recent developments on the West Coast include the state of California stepping up with proposed funding of $400 million over three years for the purchase of zero-emission school buses with $130 million being allocated this year alone.

Recent developments on the West Coast include the state of California, stepping up with proposed funding of $400 million over three years for the purchase of zero emission school buses with $130 million being allocated this year alone.

Speaker 2: along with $200 million over three years for a transit bus set-aside fund with $60 million for this year. On the east coast, we have the state of New York announcing a mandate for zero-emission school buses by 2035.

Along with 200 million over three years for a transit bus set aside fund with $60 million for this year.

On the East Coast, we have the state of New York announcing a mandate for zero emission school buses by 2035.

Speaker 2: The federal level recently announced an unprecedented level of funding of $5 billion over five years for the purchase of zero-emission buses.

The federal level recently announced an unprecedented level of funding of $5 billion over five years for the purchase of zero emission buses.

Speaker 2: Earlier this week, Secretary of Energy Jennifer Granholm stated this could be available as early as April this year.

Earlier this week Secretary of energy, Jennifer Granholm stated this could be available as early as April this year.

Speaker 2: We are well positioned to take advantage of these programs with our BEAST all-electric school bus introduced at the end of last August , and our family of transit vehicles. Our EVSTAR products can satisfy a number of requirements for transit properties, including Buy America.

We are well positioned to take advantage of these programs with our Beast All Electric school bus introduced at the end of last August and.

And our family of transit vehicles are EV star products can satisfy a number of requirements for transit properties, including by America.

Speaker 2: Now I want to talk about our recently announced plans to manufacture all electric school buses in the state of West Virginia.

I want to talk about our recently announced plans to manufacture all electric school buses in the state of West Virginia.

Speaker 2: When we were exploring our options on how to expand our business, Brennan and I determined that we needed to find a factory-ready property and develop a partnership with the local community and state. We found that in South Charleston,

When we were exploring our options on how to expand our business Brendan and I determined that we needed to find a factory ready property and develop a partnership with the local community and state.

We found that in South Charleston, West Virginia.

Speaker 2: The building is only a few years old, so instead of spending time and resources on a teardown or a new build, we will have a nominal capex so we can start the more important work of building all electric school buses right away.

The building is only a few years old so instead of spending time and resources on a tear down or a new build we will have a nominal capex. So we can start the more important work of building all electric school buses right away.

Speaker 2: Our goal is to be producing upward of 1,000 all-electric school bus or purpose-built school buses in the state annually in three to four years' time.

Our goal is to be producing upward of 1000 Electric school bus or purpose built school buses in the state annually and three to four years' time.

Speaker 2: The original plan was to take occupancy on September 1st, 2022, but we've been working with the state to move this up to May of 2022.

The original plan was to take occupancy on September one 2022.

We've been working with the state to move this up to May of 2022 .

Speaker 2: In terms of the partnership we were seeking, the state of West Virginia is purchasing the property and giving us a rent-free holiday until next year.

In terms of the partnership we were seeking the state of West Virginia is purchasing the property and giving us a rent pre holiday until next year.

Speaker 2: And when we do start paying the monthly lease payments, these will be applied to the purchase price of the property.

And when we do start paying the monthly lease payments these will be applied to the purchase price of the property.

Speaker 2: We can also earn incentives for up to $3.5 million if we hit various employment levels.

We can also learn and incentives for up to $3 5 million, if we hit various employment levels.

Speaker 2: Finally, the state of West Virginia has committed to provide funding of $15 million for the purchase of green power vehicles manufactured in the state.

Finally, the state of West Virginia has committed to provide funding for <unk>.

$15 million for the purchase of Green power vehicles manufactured in this state.

Speaker 2: The City of South Charleston has been extremely supportive. On February 1st, we announced a partnership with Bridge Valley Community.

The city itself Charleston has been extremely supportive.

On February 1st we announced a partnership with bridge Valley community.

Speaker 2: and Technical College and the Workforce Development Board of Kanawha County to provide workforce development and training opportunities for potential employees at our new manufacturing facility.

And technical College, and the workforce development board of kind of walk county to provide workforce development and training opportunities for potential employees at our new manufacturing facility.

Speaker 2: In summary, this will give us a dedicated facility for manufacturing our all-electric school buses, extends our footprint across the nation, and importantly, frees up space at our facility in Southern California. So we'll be able to increase the throughput of various EVSTAR models and low-floor transit vehicles.

In summary, this will give us a dedicated facility for manufacturing are all electric school buses.

Extends our footprint across the nation, and importantly, frees up space at our facility in Southern California.

So we'll be able to increase the throughput up various EV star models and low floor transit vehicles next I'll turn it over to Michael Seaford Green power CFO , who will cover the quarterly financials.

Speaker 2: Next, I'll turn it over to Michael Siefert, Green Power's CFO , who will cover the quarterly financial.

Speaker 2: Thank you, Fraser. For the third quarter ended December 31st, 2021, Green Power recorded revenues of $5.3 million, which was an increase of 121% over the revenue of $2.4 million for the comparable quarter in the previous fiscal year.

Thank you Fraser for the third quarter ended December 31, 2021, Green power reported revenues of $5 3 million, which was an increase of 121% over the revenue of $2 4 million for the comparable quarter in the first fiscal year.

Previous fiscal year.

Speaker 2: Revenue for the third quarter included the delivery of eight EAST school buses, a follow-on delivery of four EVSTARS to a Fortune 500 company.

For the third quarter included the delivery of eight East School buses a follow on deliberate before you can start to a fortune 500 company <unk>.

Speaker 2: three eVSTAR Plus for shuttle services at Vancouver International Airport, and deliveries of various eVSTARs and eVSTAR CCs to several other customers.

<unk> start plus for shuttle services, Vancouver International Airport and deliveries various television stars and E V Starr Ccs to several other customers.

Speaker 2: Gross profit for the quarter was $1.5 million, or 27.8%.

Gross profit for the quarter was $1 5 million or 27, 8%.

Speaker 2: which was an increase from the gross profit margin of 21.5% during the last quarter.

Which was an increase from the gross profit margin of 21, 5% during the last quarter.

Speaker 2: The gross profit this quarter was slightly below our 30% target due to the sale of B-School buses at a lower margin, which was partially offset by sales of other products at a gross margin above 30%.

The gross profit this quarter was slightly below our 30% target due to the sale of the school buses that are lower margin, which was partially offset by sales of other products had a gross margin above 30%.

Speaker 2: We continue to target a gross margin of up to 30%, which may vary from quarter to quarter based on product and customer.

We continue to target a gross margin of up to 30%, which may vary from quarter to quarter based on product and customer mix.

Speaker 2: We saw an increase in our cash expenses to $3 million this quarter, which was attributable to continued investments in our business, including sales activities, expanding our team of production and operations professionals, and professional fees and product development as we expanded into new markets and developed new products.

We saw an increase in our cash expenses to 3 million this quarter, which was attributable to continued investments in our business, including sales activities.

Our team of production and operations professionals and professional fees and product development as we expanded into new markets and develop new products.

Speaker 2: We finished the quarter with $29.4 million in working capital, plus approximately $4 million in available equity.

We finished the quarter with $29 4 million in working capital plus approximately $4 million in available liquidity.

Speaker 2: Working capital included $5.4 million in accounts receivable, the majority of which was current at quarter end, and $28.6 million in inventory, which is comprised of over $10.7 million in finished goods and $17.9 million in working profit.

Working capital included $5 4 million in accounts receivable the majority of which was current at quarter end and $28 6 million in inventory, which is comprised of over $10 7 million in finished goods and $17 9 million in work in process.

Speaker 2: We have completed work in process inventory since quarter end and have over 100 EV stars and 30 V school buses that we expect to be driving near-term sales growth. I'll now hand it over to Brendan for some operational details.

We've completed work in process inventory since quarter end and have over 100 D. V stars and 30, New school buses that we expect to be driving near term sales growth.

Now I'll hand, it over to Brendan for some operational details.

Thank you Michael.

Speaker 3: On the product front, we're very excited to introduce our 22-foot cargo van. It's called our.

On the product front.

We're very excited to introduce our 22 foot cargo van.

It's called R E V Starr cargo.

Speaker 3: This battery electric van is ideally sized and options for commercial use in urban markets and mid-mile delivery space.

This battery electric van is ideally size and options for commercial use in urban markets and the mid mile delivery space.

Speaker 3: The EVstar Cargo is the only battery electric vehicle.

The easy start cargo is the only battery electric vehicle.

Speaker 3: currently available with this high payload range.

Currently available with this high payload range payload and large range category, giving it a massive and diverse addressable market.

Speaker 3: payload and large range category, giving it a massive and diverse addressable market.

Speaker 3: We expect deliveries to begin later in the current quarter with a strong initial order backlog for this unit in place that's also growing.

We expect deliveries to begin later in the current quarter.

Strong initial order backlog for this unit in.

In place.

Also growing.

We also have accelerated.

Speaker 3: the rollout of our very popular Beast all-electric school bus.

The rollout of our very popular Beast, All electric school bus.

Speaker 3: Initial deliveries began during the quarter and will continue to ramp up throughout the year.

Initial deliveries began during the quarter and we will continue to ramp up throughout the year.

Cannot emphasize enough.

Speaker 3: how much the beast is truly in a class of its own when compared to the competition that's out there.

How much the beef is truly in a class of its own when compared to the competition that's out there.

It is the most feature packed.

Speaker 3: all-electric school bus on the market, and it incorporates a very advanced Concellium EcoRange body, which is lighter, stronger, safer, and offers a smoother ride and a longer lifespan than any other school bus ever made.

All electric school bus on the market.

And it incorporates a very advanced can stallion.

<unk> range body, which is lighter stronger safer and offers a smoother ride had a longer lifespan than any other school bus ever made.

Speaker 3: Initial customer feedback has been exceptional, and we have high expectations for this product in 2022 and beyond.

Initial customer feedback has been exceptional and we had high expectations for this product in 2022.

And beyond.

We've also made a great progress.

Speaker 3: in positioning green power for future growth, despite some minorly relative, excuse me, despite some minorly relative.

And positioning green power for future growth.

Despite some minor league relative excuse me despite.

Spite some minor Lee relative.

Speaker 3: relatively minor headwinds from Omicron last year and early this year, we continue to accelerate deliveries while building our sales reach both internally and externally.

Relatively minor.

Headwinds from Omicron last year.

And early this year, we continue to accelerate deliveries while building our sales reach both internally and externally.

Speaker 3: These recent expansions provide green power with tremendously greater reach on a national level.

These recent expansions provide green power with tremendously greater reach on a national level.

Speaker 3: In closing, Green Power has demonstrated that we have the products, the market demand, and are now tirelessly working to solidify strategic relationships necessary to catapult our growth.

In closing Green power has demonstrated that we have the products the market demand and are now tirelessly working to solidify strategic relationships necessary to catapult our growth.

To the next level.

Speaker 3: We are optimistic that 2022 will provide, will prove to be a transformative year, and I look forward to providing additional details on our progress when approved.

We are optimistic that 2022 will provide will prove to be a transformative year and I look forward to providing additional details on our progress when prudent.

Speaker 3: With that being said, Operator, please open up the call for questions.

But that being said our operator, please open up the call for questions.

Thank you we will now.

Speaker 1: Thank you. We will now begin the question and answer session.

I will begin the question and answer session.

Speaker 1: To ask a question, you may press star, then 1 on your telephone keypad.

I'll ask a question you May press Star then one on your telephone keypad.

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Speaker 1: At this time, we will pause momentarily to assemble our roctor.

At this time, we will pause momentarily to assemble our roster.

Speaker 1: Our first question comes from Kate Sullivan with Maxim Group. Please go ahead.

Our first question comes from Tate Sullivan with Maxim Group. Please go ahead.

Speaker 4: Well, thank you. Good morning. I'm starting with inventory.

Thank you good morning, I, starting with inventory.

Speaker 4: If I may, and you noted in the press release you're near a targeted level of inventory, but I think you said that you've built inventory since the quarter-ender, I'd expect. How do you measure your targeted level, or how do you look at that longer term, please?

If I may and you noted in the press release you in Europe .

Targeted level of inventory, but I think you said that you've you've built inventory since the quarter, Andrew I'd expect how do you measure your targeted leverage level or how do you look at that longer term. Please.

Speaker 2: Oh, hi, Kate. This is Fraser. So we've.

Oh, Hi, Tate this is Fraser so we've.

Speaker 2: With the close to 30 million inventory we reported at year-end, the mix was...

With the close to $30 million inventory, we reported at year end the mix was.

Speaker 2: one-third, two-thirds or 40-60. On a longer term basis, we're looking at maximizing our throughput with more of a 50-50 in terms of 50% finished goods and 50% related to various stages of production.

One third two thirds are 40, 60 and on a longer term basis.

We're looking at you know having you know.

Maximizing our throughput with more of a 50 50 in terms of 50% finished goods and 50%.

Related to various stages of production so we're.

Speaker 2: I'd say the previous quarter end, we were probably closer to a 2080. We made great progress in getting to that target and would expect to be there in the next number of months.

I would say are the previous end of quarter end, we were probably closer to 2080, and so we've made great progress in getting to that target and would expect to be there.

Oh in the next number of months.

Speaker 4: Thank you, Frasier. And then just to confirm, the timing of delivery of that finished goods inventory to customers, is it dependent mostly on when the customers receive their government funding?

Thank you Peter and then just to confirm the timing of delivery of that finished goods inventory to customers is it dependent mostly on when the customers received government funding.

Uh huh.

Speaker 2: Actually, a lot of them, you know, at the year end, for example, we had a number of vehicles that were sitting and waiting for a particular component of the package.

Actually a lot of them all at the at the year end. For example, we had a number of vehicles that are.

We're sitting and waiting for a particular component of the package.

Speaker 2: So, for example, we would order a seat package for a vehicle and it would arrive with all of the seats but not the barriers that were part of the overall installation of that seat package. So, the vehicle would have to be set aside, be moved and work on another vehicle while we wait for the barriers, receive them, move back to that vehicle, complete and deliver.

For example, we are.

You know, where we would order a seat package for a vehicle and it would arrive with all of the seats, but not the barriers that were part of the the overall installation of that seat package. So the vehicle. We were you know would have to be set aside and they move and work on another.

Vehicle, while we wait for the barriers received them move back to that vehicle complete to deliver.

Speaker 2: So there has been some disruptions related to activities like that, and they're not common to.

So there there has been some.

Disruptions related to activities like that and they are not common to just green power, but common for to the automotive industry as a whole.

Speaker 2: just green power, but common to the automotive industry as a whole.

Speaker 2: and then the management of different types of models as we're now having to deliver across our product catalog as opposed to just one or two in a quarter.

And then the you know the management of a different.

Level of or different types of models.

As we're now having to deliver across our product catalog as opposed to just one or two in a quarter. So that's.

Speaker 2: being a bit of a learning experience and we've really, I believe, dialed it in so that we can manage multiple model deliveries all at the same time. And as I noted,

Being a bit of a learning experience and we've we've really I believe dialed it in so that we can manage.

Multiple model deliveries all at the same time and as I noted with the.

Speaker 2: the upcoming West Virginia manufacturing facility will give us the ability to really free up some additional capacity or flow-through or throughput in our California facility.

The upcoming west.

West, Virginia manufacturing facility will give us the ability to really free up.

Some additional capacity or flow through our throughput.

Our California facility.

Thank you Christian.

Turn it over.

Speaker 1: Our next question comes from Chris Shutter with C. Reilly. Please go ahead. Hey, guys. Thanks for taking my questions here. Let me start off on West Virginia plans. Could you walk through the cadence of production timing to get to the 1,000 a year?

Our next question comes from Chris <unk> with B Riley. Please go ahead.

Hey, guys. Thanks for taking my questions here.

Maybe start off on West, Virginia plans could you walk through the cadence of production timing to get to the 1000 a year.

Speaker 5: When do we start kind of deploying vehicles from that facility and then any timing on the large order obviously from the state on how many vehicles that includes would be helpful.

When do we start kind of deploying vehicles from that facility and then.

Any timing on the large order obviously from the state.

How many vehicles.

That includes it would be helpful.

Speaker 2: Well, I'll start on the state and then just give a high level and Brendan can provide a lot more detail in terms of the, you know, what we are.

Well I'll start on the state and then just give a high level and I'm I'm and Brendan can provide a lot more detail in terms of the you know what we are.

Speaker 2: doing to ramp up the production. In terms of the state funding, they were very helpful in crafting a plan to provide funding that can be leveraged. Often, when you have funding programs,

Doing to ramp up the production, but in terms of the state funding.

They were very very helpful and crafting a plan to provide funding that can be leveraged. So often you know when you have funding programs.

Speaker 2: they're specific to an organizational goal or similar things and such that you can't stack them. So, if there's other funding available, such as this impending federal funding that is ... ... ... ... ... ... ... ...

There are specific to our P&L and.

On the organizational GOR or similar things in such that you can't stack. So if theres other funding available such as this impending federal funding that is.

Speaker 2: expected to be released in April , May of this year or other forms of funding.

Expect it to be released in April may of this year or other forms of funding is.

Speaker 2: is we're able to stack all of those as well as what the end operator or fleet operator would pay as well. We see the ability to leverage this in the magnitude of $30 to $40 million of sales from the $15 million of revenue.

Is we're able to stack all of those as well as you know what the end operator or a fleet operator.

Pay as well so we see the ability to leverage us into in the magnitude of $30 million to $40 million of sales from the $15 million of revenue.

Speaker 2: So that's sort of first off on the $15 million funding. And I should also point out that's a minimum. So there's an opportunity to certainly be above that. And the team is already being through, you know, South Charleston, Ryan.

So that's sort of first off on the.

The $15 million funding and I should also point out that's a minimum so theres an opportunity to certainly be above that.

And the team has already been through you.

You know South Charleston, Ryan was out doing some demonstrations with RBC type D. All electric school bus. So you know by the time, we opened the facility will will have a bit of a running start in terms of.

Speaker 2: out doing some demonstrations with our BEAST Type D electric school bus. By the time we open the facility, we will have a bit of a running start in terms of the expectations and the knowledge set in the marketplace of our product and the desire to look at an adoption or electrification strategy.

The expectations and the <unk>.

The knowledge sat in the marketplace of our product and the desire to to.

Look at it and adoption of our electrification strategy.

Speaker 2: As far as the manufacturing facility goes, as a point of reference,

As far as the manufacturing facility goes.

As a point of reference when post NASDAQ when we announced that we were now moving towards a producing product and producing yet to inventory and in the case of the Beast type D School bus that means building it up to where we then.

Speaker 2: when post-NASDAQ, when we announced that we were now moving towards producing product and producing it to inventory. In the case of the BEAST Type D school bus, that means

Speaker 2: building it up to where we then would finish it pursuant to the customer order, as opposed to historically where we would just build pursuant to the customer order from the start.

You know what finish it pursuant to the customer order as opposed to.

Historically, where we would just build to pursuant to the customer order from the start.

Speaker 2: And so, you know, that enabled us initially to do five a month. Last year, we increased that.

And so that enabled us initially to do five a month.

Last year, we increased at 10 a month.

Speaker 2: And part of the West Virginia strategy was, well, you know, just going incrementally from 5 to 10 to 15, we felt wasn't going to meet the potential opportunities in the marketplace. And we needed a different strategy in terms of really wrapping up production. And that's having a dedicated facility and having a facility that could

And part of the West Virginia strategy was well you know just going incrementally from five to 10 to 15, we felt wasn't going to meet the potential opportunities in the marketplace and we needed a different strategy in terms of really ramping up production and that's having a dedicated.

<unk> and having a facility that could.

Speaker 2: uh you know producing volumes we felt would accomplish that. So in terms of

Producing volumes, while we felt would accomplish that so in terms of the first.

Speaker 2: first tranche. If we can get into the facility in May instead of having to wait till September and start to build this summer, then we're confident that the first vehicles would be rolling off this fall.

First tranche, if we can get into the facility in may instead of having to wait till September and start to build this summer than we.

We're confident that the first vehicles would be rolling off this fall and as far as the numbers go.

Speaker 2: And as far as the numbers go, just on a one shift and a regular production cycle, we're looking at in the magnitude of 20, 30 plus a month.

Just on a one shift.

And our regular production cycle. We're looking at are in the magnitude of 2030 plus a month.

Speaker 2: just on that sort of initial production level.

Just on that sort of initial production level.

Speaker 2: And I'll turn it over to Brendan to sort of add to that. Yeah, thank you, Frazier.

And I'll turn it over to Brendan to sort of a bad to that.

Yes, Thank you Fraser and good morning, Chris. Thank you for the question.

I would say that Frazier answered that question pretty pretty completely a week the facility as it sits right now with our existing.

Speaker 3: processes, and using very readily available tooling and the equipment that's out there. We anticipate to be at a run rate of 30 to 40 a month.

The processes and using a very readily available tooling and the equipment that's out there.

We anticipate to be at a run rate of a 30 to 40 a month.

Of.

Speaker 3: of combined school bus products out of that facility by the end of 2022. So, by the end of this year, we will be at a run rate of that. So, you can expect about, you know, after we build out the facility more, that quantity will increase. But until that quantity increases, we won't, you know,

Of combined school bus products out of that facility.

By the end of two.

2022.

By the end of this year, we will be at a run rate of that so.

You can expect about a you know after we build out the facility more.

That quantity will increase but until that quantity increases we won't.

You know we're really not.

Speaker 3: giving estimates. I mean the thousand buses a month, excuse me, a year coming out of that facility is really a number that we've got.

Giving estimates I mean, the 1000 buses a month excuse me a year coming out of that facility is really a number that we've got.

Speaker 3: you know, on the capacity of that entire facility filled out running multiple shifts.

On the capacity of that entire facility filled out running multiple shifts. So we're very comfortable with saying that that facility is capable of producing.

Speaker 3: So we're very comfortable with saying that that facility is capable of producing, you know, with slight modifications, about 30 units a month.

You know with slight modifications.

30 units a month.

Speaker 5: Okay, got it. Now that's very helpful. Maybe just talk a little bit about the cash needs here. We've got, you know, about $4 million on the line of credit at quarter end.

Okay got it that's very helpful and maybe just talk a little bit about the cash needs here.

About $4 million on the line of credit at quarter end.

Speaker 5: And, you know, we're talking about kind of expanding here just, you know, between, you know, help from the state as far as, you know, timing of some of the payments and the like obviously will be helpful. But, you know, as you guys look to kind of build inventory there as well, I'd imagine, you know, what are kind of the cash needs, you know?

And you know, we're talking about kind of extending here just you know between yeah.

How help from the state as far as timing of some of the payments and the like obviously what will be helpful. But you know if you guys looked at kind of gold inventory there as one.

I'd imagine you know what what are kind of the cash need.

The next.

Speaker 5: a year or so as you get up to production and start to get deliveries coming off the line in West Virginia between the two facilities.

A year or so as you as you get up to the up to production.

Start to get deliveries coming coming off the line.

West Virginia between kind of the two facilities here.

Speaker 2: Well, the overall inventory is such that the West Virginia, which will be later this – if we're in in May, then a lot of that will be kicking in in the summer. But in the meantime, we're finally at a point where – and I think Brendan talked about this in his quote in our press release – I mean, right now we're working on

While the overall inventory is such that the.

The West, Virginia, which will be later this year.

In in May then a lot of that will be kicking in in the summer, but in the meantime.

We're finally at a point, where you know and I think Brendan talked about this in our and there's a quote in our press release I mean right now we're working on.

Speaker 2: 30 BEAST school buses, we're working on even double that in terms of EV stars and cabin chassis just to name three of our models or products.

All 30 Beast School buses were working on.

Hey, even double that in terms of movie stars and cabin chassis is just to name three of our models our products.

Speaker 2: in terms of getting them organized for deliveries. We've got significant revenue coming in on the books and the vast majority of that is pursuant to customer orders that is backed by vouchers, rebates or various levels of government financing or actual cash payments were on direct sales to customers.

In terms of getting them organized for deliveries. So we've we've got a significant revenue on coming in on the books and the <unk>.

Majority of that is pursuant to.

Customer orders that is backed by vouchers rebates or various levels of government financing or <unk>.

Actual cash.

Cash payments were on direct sales to customers. So yeah.

Speaker 2: As a mix, that's at a level that we haven't had the opportunity to enjoy before and is really changing the dynamic in our working capital.

As a mix that is that's at a level that we haven't enjoyed you all had the opportunity to enjoy before.

And are you all it is is really changing the dynamic in our working capital so.

Getting to that you know that that.

Speaker 4: a proper mix in terms of finished goods to, you know, our, the balance of our

Proper mix in terms of finished goods to our the balance of R.

Speaker 4: Our working capital and inventory for the vehicles in production is a critical part of really driving a working capital that is got nearing cash deliveries for us as opposed to that amount that is sitting in production has a ways to go before we can monetize that.

Our working capital and inventory for the vehicles are in production is a critical part of really driving our working capital that is.

Nearing cash deliveries for us as opposed to you know that amount that are sitting in AR.

In production has a ways to go before we can monetize that.

Speaker 5: Okay. No, understood. That makes a lot of sense. So, you know, can you just, last one here for me, talk about near-term visibility for, you know, EVstar and Beasts over, you know, this quarter, kind of, you know, next quarter. How should we think about, you know, the timing of deliveries, you know, any way, you know, any ways you guys can talk about...

Okay, no understood that that makes a lot of sense.

Just last one here for me talk about near term visibility for what you just RMB.

Over this quarter kind of next quarter, how should we think about that.

The timing of deliveries anyway any ways you guys can talk about.

Speaker 5: You know, how many different vouchers between New Jersey, California, you know, orders, you know, when you exclude the 15 from West Virginia, which is obviously coming from that facility. I'm just curious, how do we think about, you know, visibility, you know, for this quarter and for the next couple quarters as we start to get, you know, you know, kind of shift that finished inventory into sales would be helpful.

You know how many different vouchers between New Jersey, California orders you know when you exclude the <unk> from from West, Virginia, which is obviously coming from that facility I'm. Just curious so how do we think about your visibility for this quarter and for the next couple of quarters as we start to get you know.

Kind of ship that finished inventory into sales would be helpful.

Speaker 2: Well, on firm orders that we have announced, or that is in the public domain, we have 10 based school buses. We have, and I'm just pinning this off the end of the December 31st quarter.

Well on firm orders that we have announced or that is in the public domain. We have 10 based school buses.

We have and I'm just opinion that saw us off the end of the December 31st quarter.

Speaker 2: We've got over, or I'm going to say approximately

We've got over or I'm going to say approximately 60 approved.

Speaker 4: approved HVIP vouchers that principally relate to the EV-STARS as well as some EV-STAR Cabin Chassis.

H vouchers.

Principally relate to the EV stars and as well some EV star cabin chassis.

Speaker 2: We have, as well, the 22-foot EVstar cargo that Brennan was talking about.

We have as well the EV the 22 foot TV star cargo that Brendan was talking about.

Speaker 2: And apparently this is information that was released by the New Jersey program, but we have one of the highest, if not the highest number of approved vouchers there. So we have over 20 of our cargo vans that are targeted.

And apparently this is information that was released by the New Jersey program, but where we have one of the highest if not the highest number of approved vouchers are so we have over 20 of our cargo vans that are targeted to existing approved vouchers and as Brendan alluded.

Speaker 4: to existing approved vouchers. And as Brendan alluded to, there's a number of pending orders. Well, that's a good example of a number of customers that are engaged with us saying, well, as soon as you've got those delivered, we wanna be in the queue for the next round of 22 foot cargo vans that you can deliver pursuant to this program.

Two there's a number of pending orders well that's a good example of that.

Number of customers that are engaged with us, saying Wow you know as soon as you got those delivered.

We want to be in the Q4. The next round of 22 foot cargo vans or you can deliver pursuant to this program. So yes.

Speaker 2: You know, there's, you know, that just gives you an idea of a number of the different models and the different funding mechanisms, all, all pursuant to firm orders.

There's you know that just gives you a an idea of a number of the different models and the different funding mechanisms all all pursuant to firm orders.

Okay.

Thanks Scott.

Speaker 4: Thank you. Our next question comes from Craig or win withdwal capital partners sleeps ahead. Good morning and thanks.

Thank you.

Our next question comes from Craig Irwin with Roth Capital Partners. Please go ahead.

Yeah.

Hi, good morning, and thanks for taking my questions.

Speaker 6: Frazier, you know, congratulations on the on the improving sales out there at the beast. And it sounds like you're pretty well teed up.

Fraser you know congratulations on the on the improving sales out there east and it sounds like you're pretty well teed up.

Speaker 6: for the money when EPA starts to disperse it.

For the money when when EPA starts to disperse it.

Speaker 6: Can you maybe describe for us in a little bit more detail the process by which you expect school districts and school bus operators to get funded and, you know, I understand this March is a very important time point, can you maybe give us key milestones we should look for that would...

Can you maybe describe for us and a little bit more detail the process by which you expect.

School districts and school bus operators to get funded and you know I understand this March is a very important time point.

Can you maybe give us key milestones, we should look for that would.

Speaker 3: help with confidence and visibility on that money materializing? And do you expect this to be a significant impact before the end of the calendar year?

Help with confidence and visibility on that money materializing and do you expect this to be a significant impact before the end of the calendar year.

Speaker 2: Well, I'm going, you know, Ryan, who's on our call here, I'm going to let Ryan start because he spent the better part of this week out demonstrating our beast type D scuba. So Ryan, do you want to start with this and then come back to me and talking about milestones?

Well I'm going you know Ryan who's on our call here I'm going to start and I'll, let Brian start because he spent the better part of this week out demonstrating our Beast a type D School bus. So Ryan do you want to start with this and then yeah in the back I am talking about milestones absence.

Speaker 7: Absolutely, Frazier and good morning, Craig man. The process here has been very exciting, especially over the last couple of months in terms of demonstrations on the school bus. Right now. We're doing a lot of demos.

Frazier and got good morning, Craig.

Man the process here has been very exciting.

Especially over the last couple of months in terms of demonstrations on the B School bus right now we're doing a lot of demos.

Speaker 7: Uh, with with some school districts that had previously seen our 36 foot variant of the, uh, the synapse 72. and as, you know, we've rebranded 40 foot vehicle, 90 passenger 194 kilowatt hour.

With some school districts that had previously seen our 36 foot variant of the spin up 72, and as you know we've rebranded 40 foot vehicle 90 passenger.

194 kilowatt hour battery pack.

Speaker 7: The reviews that we're getting back, people's eyes are absolutely lighting up. They're very excited about what we've done, what we've accomplished up to this point. People rant and rave about the fit and finish, and that's only a part of it, building the sizzle on the sales.

The reviews that we're getting back People's lives. Our eyes are absolutely lightening up are they were very excited about what we've done what we've accomplished up to this point people renting rave about fit and finish and that's only a part of building the sizzle on the sales side.

Speaker 7: The technical part all comes together with the grants, right? And that's where we're helping our local dealer, whether it's Creative Bus Sells here in California and some of the other partnerships that are on the horizon.

The the technical part all comes together with the the grants right and that's where we're helping our local dealer whether its a creative bus out here in California, and some of the other partnerships that are on the horizon, we basically take that we'd do the demo we get their sell team.

Speaker 7: We basically take them, we do the demo, we get their sales team trained up, familiar with the product. And then even with that, I'm still joining them and doing the initial.

Trained up are familiar with the product and then even with that I'm still joining them in doing the initial pitches on the front end just to make sure everybody's comfortable with how to present a purpose built electric school bus once they've decided that this project is something that's going to meet their needs.

Speaker 7: pitches on the front and just to make sure everybody's comfortable with how to present, you know, a purpose-built type D electric school bus.

Speaker 7: once they decided that this project is something that's going to meet their needs.

Speaker 7: The sales process in the school bus arena is a lot shorter, it's a lot more relationship-based than it is in transit. Transit is a much more processed sale.

Sales process in the school bus Arena is a lot shorter it's a lot more relationship based and it is in transit transit is a much more process L.

Speaker 7: Uh, and once they've determined that the vehicle is the right fit, um, that we turn it over to our grant team, uh, and our dealer's grant team, and then they work together on getting it all processed, deals are coming together very

And once they determine that the vehicle was the right fit that we turn it over to our grant team and our dealers Grant team and then they work together on getting it all processed deals are coming together very quickly.

Speaker 7: Just this week alone, I did nine demonstrations in Northern California. I've got next week in San Joaquin Valley, doing a ride and drive with Creative Bus Sales where they expect, they have somewhere in the neighborhood of 50 RSVPs for that event in Reedley, California and in Salinas, California.

Just this week alone I did nine demonstrations in Northern California, I've got next week in San Joaquin Valley doing a ride and drive with creative bus sales, where they expect they have you know somewhere in the neighborhood of 50 Rsvp's.

For that event, and really California, and in Salinas, California.

Speaker 7: And these are the types of things, these are the grassroots efforts that are going to propel us to the next level.

And.

These are the types of things. These are the grass roots efforts that are going to propel us to the next level and to add to that we are duplicating those efforts out of state we haven't made those announcements yet.

Speaker 7: And to add to that, we are duplicating those efforts out of state. We haven't made those announcements yet, but there's a lot of exciting activity behind the scenes that we know will pay dividends in this calendar year. So to answer your question, Craig, yes.

But there's a lot of exciting activity behind the scenes.

That we know will pay dividends in this calendar year. So to answer your question, Craig, Yes, I and with that I'll turn it over to Craig for our to our Frazier for the milestones.

Speaker 7: And with that, I'll turn it over to Craig for, or to Frazier for the milestones. And Frazier, this is Brendan real quick, if I may just add to Craig's.

This is Brendan real quick if I may.

Just add to Craigs.

Speaker 3: the response to Craig. Craig, the EPA appears to be the one that's going to be administering the largest, the $5 billion that we're looking at for this sector. And it's going to be tailored. They're saying it's going to be tailored after the DERA grant, which was a very successful diesel emission reduction grant that has been out for years and years.

In response to Craig Craig B E.

P a.

It appears to be the one that's going to be.

Stirring the largest of the 5 billion that we're looking at for this sector.

And it's gonna be tailored are there, they're saying, it's going be tailored after the DRAM grant, which was a very successful.

Diesel emission reduction.

The reduction.

Grants that has been out for years and years. So we anticipate a very similar mechanism.

Speaker 3: So, we anticipate a very similar mechanism for how that funding is going to work.

For how that that funding is going to work.

Speaker 3: and basically the school.

And basically the school.

Speaker 3: boards or the school systems themselves will apply for the DERA funding, they'll get approval right away and then they can go out and buy the vehicle very quickly and very efficiently. So Ryan is exactly right. We anticipate it to be a very straightforward, they'll have money in the bank ready to spend on vehicles, approved vehicles, and that's how we

Boards are the school systems themselves will.

<unk> apply for the deer funding they'll get approval right away and then they can go out and buy the vehicle very quickly and very efficiently. So it Ryan is exactly right. It was.

We anticipate it to be a very straightforward.

Have money in the bank ready to spend on vehicles approved vehicles and.

And that's our that's how we anticipate it to rollout.

Speaker 7: In other words, Craig, it's not going to, and I know what you're asking, it's not going to be like the FTA low-no grant where they're going to, it's going to be a, we expect the first come, first serve. A lot of people have seen the California HVIP program or the VW mitigation program here in California to be a success, and we believe that it's going to be a very simple, straightforward process, just to echo what Brendan said, but the fact of the matter is it's not going to be anything like the FTA low-no program, which

In other words.

Craig, it's not going to and I know, what you're asking it's not going to be like the FTA low no grant where they're gonna. It's gonna be at we expect the first come first serve a lot of people have seen the California Atria program a or.

Or the VW mitigation program here in California.

To be a success and we believe that it's going to be a very simple straightforward process just to echo what Brendan said, but the fact of the matter he's not going to be anything like a the FTA.

Hello, No program, which.

Speaker 7: You pay 50 grand to put the proposal together and it takes a year or two to get a notification back. It's just not going to be like that.

You know you paid 50 Grand to put the proposal together and you know it takes a year or two to get a notification back it's just not going to be like that.

Speaker 6: I understand, and Frazier, the catalyst on the awards.

Understood and Fraser.

Catalysts on the on the awards.

Speaker 4: if you could help with that. Sure, and just to note that as a company, we did have some input on.

You can help with that.

Sure and just to note that are as a company. We did have some input on that.

Speaker 4: process and so the rules that are being issued aren't a surprise to us at all and fortunately have a few tweaks that

The process and so the the rules that are being issued arent a surprise to us at all and Fortunately have a few tweaks that.

Speaker 4: not just for us, but for the industry as a whole, hopefully do make it as seamless as possible so that.

Not just for us, but for the industry as a whole are hopefully do make it as seamless as possible so that.

Speaker 2: we can see a significant rollout of the funding which will lead to the faster adoption. In terms of where do we expect to be at the end of March?

We can see a significant rollout of the funding and which will lead to the faster adoption in terms of a really good question in terms of you know where.

Where do we expect to be at the end of March.

And.

Speaker 2: You know, number one, I'd say on the school buses, you know, we went from

Number one I'd say on the school buses we went from.

Speaker 2: uh two in the September 30 quarter to eight in the December 31st if we get the 10 pursuant to the customer orders and another half dozen from the pending order box.

Two in the September 30 quarter to aid in the December 31st.

If we get the Tam pursuant to the customer orders and another half dozen for them.

The pending order box.

Speaker 2: then that represents doubling a gain, Q over Q, and I believe is completely doable and sets us up to continue to accelerate the deployment further from there in terms of Q over Q going forward.

And that represents a doubling again Q over Q and I believe is completely doable and sets us up to continue to accelerate the deployment further from there in terms of Q over Q going forward. So I think that's what that's all from current with no.

Speaker 2: So I think that's what, and that's all from current with no impact whatsoever from West Virginia. We don't see West Virginia impacting the September .

No impact whatsoever from West Virginia.

We don't see West Virginia impacting the September .

Speaker 2: September 30 quarter, but if we get in in May, we certainly believe that we can be delivering products in the fall that would be then kicking in on the December 31st quarter.

The September 30 quarter, but.

If we get in and May we certainly believe that we can be delivering products in the fall that would be then kicking in on the December 31st quarter.

So that.

Speaker 2: is sort of the landscape for the calendar year for the B school buses and then on with the other products.

Is sort of the landscape for the calendar year for the B School buses and then on with the other products.

Speaker 2: You know, we're now really set up for, you know, hitting each of the different categories in terms of passengers, our own cargo delivery logistics vehicles, and the CC, which we haven't talked a lot about on the call, but we have.

We're now really set up for you know hitting each of the different categories in terms of passengers are own cargo delivery logistics vehicles and.

The C C, which we haven't talked a lot about on the call, but we have.

Speaker 2: you'll be working with partnerships where we see, you know, increases in the CC coming down the road as well as fulfilling existing customer orders with both on the cargo side and on the passenger side on the EV stars. So.

Being working with partnerships, where we see increases in the <unk> coming down the road.

As well as fulfilling existing customer orders with Paul on the cargo side and on the passenger side on the EV stars. So.

Speaker 4: You can expect to see additional press releases on specifics or, in general, partnerships that help drive larger volumes than what we've had to date.

You can expect to see.

Additional press releases on specifics or in general partnerships that help drive.

Our larger volumes than what we've had to date.

Understood understood. Thank you.

Speaker 6: So the next thing I wanted to ask about is the six BEAST units for Thermolito. So I might have missed this in the beginning of the call, but I wanted to just ask and confirm that they were recognized as revenue in the quarter. And then, you know, as a second part of the question, January 6th, the press release, has me think maybe the receivables, the cash, that came in from this roughly $2 million

So the next thing I wanted to ask about is the <unk> units for a thermal laid out so I might have I might've missed this in the beginning of the call, but I wanted to just ask and confirmed that they were recognized as revenue in the quarter.

And then you know as a second part of the question January six the press release has me think maybe the the receivables to cash.

Came in from this roughly $2 million.

Speaker 6: customer delivery, most likely landed after the end of the calendar year. Can you comment about the roughly $2 million in cash inflow? Is that really a first quarter event here?

Customer delivery.

Most likely landed after the end of the calendar year can you can you comment about the you know roughly $2 million in cash inflow.

Is that really first quarter event here.

Yeah.

Speaker 4: Yes, and yes would be the short answer, but yes, we did recognize the revenue those vehicles of the.

Yes, and yes would be the short answer, but yes, we did recognize the revenue those vehicles have been.

Speaker 2: They've passed the California Highway Patrol inspection, they've received their 292 cards, they are good to go. The receivable was booked at December 31st, so the cash comes in in our current quarter, as opposed to cash that was realized, which in fact wasn't realized, at December 31st as it was sitting in our accounts receivable.

They pass the California Highway patrol inspection they've received their $2 92 cards. There. They are good to go.

The receivable was booked at December 31st So the cash comes in in our current quarter.

As opposed to cash that was realized which are in fact wasn't realized at December 31st as it was sitting in our accounts receivable.

Speaker 6: Understood. That's good to hear because it kind of indicates that the cash position was understated. So, thank you for taking my questions. Congratulations on the progress. I'll hop back in the queue.

Understood. That's good to hear because it kind of indicates that the the cash position was I understand it. So thank you for taking my questions. Congratulations on the progress I'll hop back in the queue.

Thank you Craig.

Speaker 1: Our next question comes from Tyler DiMatteo with DTIG. Please go ahead.

Our next question comes from Tyler, Dean Matan, which D. T. I gene. Please go ahead.

Speaker 2: Hi, and good morning, everybody. So I just kind of wanted to dive a little bit deeper into the customer mix. You know, I know that pre-COVID corporations looked to be a nice little driver of demand. And I know, I guess in the prior quarter, you also said you had deliveries.

Hi, and good morning, everybody. So I, just kind of wanted to dive a little bit deeper into the customer mix I know that pre COVID-19 corp's corporations look to be a nice driver of demand and I know I guess in the prior quarter. You also said you had deliveries.

Speaker 2: to a Fortune 500 company and then a follow-up delivery of another four vehicles, you know, like are there any signs or just what are the signs of those potential customers, you know, returning? And I know you alluded to it a little bit, but I just kind of, can we just add some more color to that if you don't mind?

A fortune 500 company and then a follow up delivery of another four vehicles. You know like are there any signs or I guess, what are the signs of those potential customers.

Returning and I know you alluded to it a little bit, but I just kind of can we just add some more color to that if you don't mind.

Speaker 4: As a lead-in to Ryan, I'll just say Ryan is waiting for all of the corporations to have their employees returning to their campuses.

Yes. This is Paul all right I'll lead into Ryan I'll, just say Ryan is waiting for all of the corporations to have their employees returning to their campuses.

Speaker 4: So, with that as an introductory comment, over to you, Ryan.

With that as an introductory comment over to you Ryan.

Speaker 7: Waiting at their doorstep. Yes, exactly. We've had, you know, every time, I'm getting reluctant to answer these questions, right, because

Waiting at their doorstep, yes exactly.

We've had Ah.

You know every time I'm, a little I'm getting reluctant to answer these questions right because.

Speaker 7: Every time we think we're out of the COVID fog, there's a new variant, and it's more this and more that, which has definitely created some headwinds.

Every time, we think were you know out of the Covid hard there's a there's a new variant and it's more of this and more of that.

Definitely created some headwinds.

Speaker 7: But with that, it's actually given us some time to develop our relationship with these customers before they're full-blown back in service.

With that it's actually given us some time to develop our relationships with these customers before their full full blown back in service.

Speaker 7: We're supporting them, we're working through some of their technology needs on our products that we may not have done before in the past, so we're growing and maturing there.

Where we're supporting them we're working through.

Some of their technology.

Needs on our products that we may not have done before in the past so we're growing and maturing there.

On.

Speaker 7: But the big thing is them getting back to work. I can remember a year and a half ago when the reopening was in three months, and here we are a year and a half later, and a lot of these tech campuses are still talking about springtime now. It does look, you know, you do get some grumblings.

But the big thing is them getting back to work I can remember a year and a half ago. When there you know the reopening was in three months and here, we are a year and a half later and a lot of these tech campuses are still talking about spring time now. It does look you did you get some grumblings.

Speaker 7: of, you know, orders getting ready to finally materialize.

No orders getting ready to finally materialize.

Speaker 7: With that, we're keeping our fingers crossed. We're optimistic. We're maintaining these relationships and making sure that these folks have all the information they need to make the best decision. And once they do, we've got the product on hand to deliver quickly, meet their needs, meet their spec, and more importantly, start building some revenue-generating activities all across the country.

With that we're keeping our fingers crossed we're optimistic we're maintaining these relationships and making sure that.

Folks have all the information they need to make the best decision and once they deal. We've got the the you know the product on hand to deliver quickly meet their needs meet their stack and more importantly start building some revenue generating activity all across the country.

Yeah.

Speaker 2: Okay, great. Thank you. And I guess kind of shifting gears here just a little bit, you know, do we have any update on the Forest River contract or anything going on there?

Okay, great. Thank you and I guess kind of shifting gears here just a little bit you know do we have any update on the forest river contract or anything going on there.

Well they that has take that when we originally announced it we.

Speaker 4: Well, when we originally announced it, we did indicate that the parties intended to get the first tranche of cabin chassis configured with their StarCraft cutaway body and

Did indicate that the parties intended to get the first tranche of cabin chassis configured with their.

Starcraft.

Well your body and.

Speaker 4: And even in our last quarterly update, we said, okay, we're not even going to come close to that September 30. And when I say the we, we're waiting for Forest River to complete the ammoligation.

And are even in our last quarterly update we said, okay that we're not even going to come close to that September 30, and when I say that we were waiting for forest River to complete the Homologation.

Speaker 4: And, you know, as where we sit today, they are still not done with the five. And I think what that does speak to is that it's not easy, is that I think when they, when they jumped into this, their expectation was, well, you know, we'll just slap our body on and away we go. Well, it's not that simple. And, you know, we've got a high voltage system, it has to be carefully integrated and all of that, and, you know, we're unlike an ice.

And Oh, as where we sit today they are still not done with the five and I think what that does speak to is that it's not easy is that I think when they when they jumped into this their expectation was well you know, we're just slap our body on and away. We go well, it's not that simple and you know we've got a.

High voltage system has to be carefully integrated and all of that and.

Unlike in ice.

Speaker 4: vehicle, you know, all of our

Our vehicle.

All of our our secondary systems, you know like Air Conditioner for example, all run on motors. So there there.

Speaker 4: our secondary systems like air conditioner, for example, all run on motors. There is a huge learning curve on their part and we've just adopted a process that we've got a lot of other great business to work on. We'll be patient with them to get this done, but as we sit today, until they're done those five, there isn't a next step in that relationship.

There are a huge learning curve on their part and we've just adopted a process that we've got a lot of other great business to work on and we'll be patient with them too you'll get this done but as we as we sit today.

Until they're done are those five.

There isn't a next step in that relationship.

Speaker 2: Okay. Great. Thank you. Really appreciate the time, guys. I'll turn it back to the queue here.

Okay, great. Thank you really appreciate the time guys I'll turn it back to the queue here.

Thanks for the questions.

Speaker 1: Our next question is a follow-up from Kate Sullivan with Maxim Group. Please go ahead.

Our next question is a follow up from Tate Sullivan with Maxim Group. Please go ahead.

Speaker 4: I thank you for taking a follow-up and you answered one of my earlier questions on the accounts receivable timing of that collection and then also on the available liquidity on your credit facility of about $4 million. Michael, can you just remind me, what is the term, what is the maturity of that current facility, please?

Hi, Thank you for taking a follow up and you answered one of my earlier questions on the accounts receivable timing of that collection and then also on the available liquidity on your credit facility of about $4 million. Michael can you just remind me what is the term when is the maturity of that current facility. Please.

Speaker 6: So, it's a facility actually that we are in discussions with on a regular basis with our bank that we will maintain over time, so there's not a set maturity on that.

So it's a facility actually that we.

Are in discussions with on a regular basis with their bank that we will maintain overtime.

So theres not as that maturity on that.

Speaker 4: Great. And just reviewing the documents, it looks like, I mean, there's some metrics in there, percent of finished goods to accounts receivable, current ratio metric, but I think you're well, well within those, those metrics. Exactly. Yeah, we're well within those limits.

Great and just reviewing the documents it looks like I mean, theres some metrics and their percent of finished goods to accounts receivable current ratio metric, but I think youre well well within those those metrics exactly yes, we're well within those limits.

So there's no concern there.

Speaker 4: Or put another way, they would give us more if it was just applied based.

Or put another way the they would give us more if it was just applied based on those.

Great Okay.

Speaker 4: And then just one more, if I may, on the facility opening process for May, is it, or April , I think you said, in South Carolina, in terms of, is it more the supply chain management, getting the inventory, starting to get inventory to the facility, is it building, is it getting equipment delivered, hiring the people, can you just a little more background?

And then just one more if I may on the facility opening process for May is it or April I think you said in South Carolina.

In terms of is it more supply chain management getting the inventory starting to get inventory to the facilities that are building or is it getting equipment delivered hiring of people can you just a little more background on that.

Speaker 3: Tate, this is Brendan, it's in West Virginia, South Charleston, West Virginia, excuse me.

Tate This is Brendan it's in West, Virginia, South Charleston, West, Virginia excuse me.

The lead.

Speaker 3: The biggest hurdle in a facility like that building vehicles is getting the facility staffed up.

The biggest.

Hurdle and a facility like that building vehicles is getting the facility staffed up.

Speaker 3: We can have the tooling, the jigs, fixtures set up in position relatively quickly. The facility is really world-class facility, one of the nicest we've seen really anywhere. So, we don't anticipate a lot of upgrades to the facility as requirements for rolling vehicles down the line and out the door.

We can have the tooling the jigs fixtures that stuff and position relatively quickly.

The facility is really world class facility.

One of the nicest we've seen.

Really anywhere so we don't anticipate a lot of.

Upgrades to the facility as requirements for rolling vehicles down the line and out the door.

Speaker 3: Uh, so we would, I would say the, the biggest hurdle is, is finding the right, uh, employees, having them trained and having them in place. And with our partnership with bridge Valley. And the workforce development, uh, folks.

So we would I would say the biggest hurdle is is finding the right <unk>.

<unk> having them trained.

And having them in place and with our partnership with Bridge Valley and the canal workforce development.

Speaker 3: uh... we really believe we're going to be ahead of uh...

Okay.

We really believe we're gonna be head of.

Speaker 3: of the curve there. And, you know, as Frazier said, we anticipate vehicles running off the line there by fall. So, we're expecting, you know, three to five month window before we take, from the time when we take possession of the building to where we're actually rolling product out the door. And we've actually done this before in Porterville when we moved into our current facility that we have right now. We

Of the curve there and <unk>.

Frazier said, we anticipate vehicles running off the line there by fall. So we're expecting a three to five months window before we take from the time when we take possession of the building to where we're actually rolling products out the door and we've actually done this before.

Bill when we moved into our current facility that we have right now are we.

Speaker 8: basically moved in and we're rolling products out the door of that facility within 90 to 120 days.

Basically moved in and we're rolling products out the door in that facility.

Within 90 to 120 days.

Okay. Thank you Brandon Thank you all.

Speaker 1: Our next question comes from Barry Sine with Spartan Capital Securities. Please go ahead.

Our next question comes from Barry Sine with Spartan Capital Securities. Please go ahead.

Speaker 9: Hey, good morning. First question on the BEAST. Could you update us what the ASP is on that? And then one other question. I think I saw Ryan in a video where you showed that vehicle off in West Virginia. And in the video, you mentioned that was a California spec vehicle. And I guess each state needs to be slightly different. Is that an onerous process? Is that a long process? Are there a lot of adjustments, or is it a fairly minor?

Hey, Yeah. Good morning first.

First question on the Beast.

Could you update us on what the ASP is on that and then one other question I think I saw Ryan in a video where you showed that vehicle off in West Virginia and in the video you mentioned that was a California spec vehicle and I guess each state needs to be slightly different is that an onerous process.

Is that a long process or there are a lot of adjustments or is that a fairly minor process.

Speaker 7: Some of those processes are more in-depth than others. There are some states that replicate California specs, so obviously we'd go in there and be very seamless. In West Virginia, it's actually very minor differences. For instance, the West Virginia school bus specification does not allow for, believe it or not, seatbelts.

Some of those processes are good morning, Barry. Thanks for the question some of those processes are more in depth than others. There's some states that replicate California's backfill Avi said, we'd go in there would be very seamless.

Some of them had west Virginia, It's a it's actually very minor differences for instance, Ah.

The West Virginia School bus specification does not allow for I believe it or not seatbelts.

Speaker 7: Whereas California, it's a requirement. So, for many of the folks, they walked into the bus and they said, wow, this bus has seatbelts, that's great. But it's not part of their certification process, right? So, it's going to be a lot of things like that, you know, move, black wheels versus black bumpers versus green. But it's very small things. We've brought, we've recently brought a resource on board that's been in the school bus industry for 25 years.

Whereas California, it's a requirement for many of the folks they walked into the bus and they said Wow. This is such as seatbelt, that's great, but it's not part of their certification process right. So it's gonna be a lot of things like that.

Blackwill versus black bumpers versus green, but it's very small things. We brought we recently bought a resource on board.

And that's been in the school bus industry for 25 years and this individual is going to be helping.

Speaker 7: and this individual is going to be helping dial in our school bus specs.

While in our school, but our school bus specs state by state. So we are mobilizing and we are definitely preparing to make a big push.

Speaker 7: uh... state-by-state so we are mobilizing and uh... we're we're definitely preparing uh... to make a big push uh... uh... coast-to-coast

Coast to coast.

At least.

Sorry, Barry you might be on mute.

Yeah can you hear me.

Can hear you now.

Oh what is.

A list price on the Beast.

Speaker 7: So, the list price is going to go, you know, dealer by dealer, state by state. I mean, you could take an average, right, of between $375,000 and, you know, $400,000. That's the dealer pricing. That is not our pricing to the dealer. But that gives you an idea of what these vehicles are coming to market at.

So the list prices are its going to go a dealer by dealer a state by state.

Yeah, I mean, you can take an.

On average right.

I mean, 375000 and 400000, that's the dealer pricing.

That is not our pricing to the dealer.

But that gives you an idea of what these vehicles are coming to market at.

Speaker 3: Okay, and I want to shift gears and ask about something else, and I may mischaracterize this, but you have an issue where sometimes you'll have finished inventory, but you'll be waiting for a government entity to approve vouchers. You know, when I hear that, I kind of roll my eyes.

Okay, and I wanted to shift gears and ask about something else.

I may Miss characterize this but you have an issue where sometimes you'll have finished inventory, but you'll be waiting for a government entity to approve vouchers when I hear that I kind of roll my eyes.

Speaker 3: Climate change is a fairly significant crisis, earthen the balance and all that. How can we be waiting for bureaucrats to approve vouchers? Is there any hope that we see progress on that? And if that were to happen, presumably that would improve your working capital situation if we could get that voucher process.

Climate change is a fairly significant crisis earth and the balance in all of that how can be we'd be waiting for bureaucrats grew vouchers is there any hope that we see progress on that and if that were to happen, presumably that would improve your working capital situation. If we could get that voucher process that are a little bit.

Speaker 4: Well, we're not waiting for any vouchers and our earlier comments, any of the orders pursuant to customers, we're talking about firm order and if it is tied into a particular rebate or voucher and an approved voucher.

While we have not we're not waiting for any of any vouchers and all of the in our earlier comments any of the orders pursuant to customers.

We're talking about firm order.

And if it is it is.

Tied into a particular rebate or voucher and unapproved voucher.

Speaker 4: So there isn't any of the finished goods that we're talking about that we're, quote, waiting for something to happen. Is that in.

There isn't any any of the finished goods that we're talking about that were quote waiting for something to happen is that are in.

Speaker 4: In our case, and for example, the BEAST school buses, the 10 that are going out, I don't believe any of them are off of the HDIP program. Actually, one of them is, and the rest are all from various air quality management district funding. So, those are all pursuant to both the firm order and funding in place.

In our case and and for example, the Beast.

School buses. The 10 that are going out I don't believe any of them are off of the HD program actually one of the Mezz and the rest are all from various air quality management district funded so those are all the those.

Those are all pursuant to both the firm order and funding in place.

Speaker 3: So just ask another way. How do you get products out of finished goods faster so they don't sit on your balance sheet? What is the impediment to why can't you deliver it almost immediately from the time it's finished?

So just asked another way how do you.

<unk> products out of finished goods faster. So they don't sit on your balance sheet. What is the impediment to why can't it be why can't you deliberate almost immediately from the time it's finished.

Speaker 3: Barry, this is Brendan. Really quick, there are

Barry This is Brendan really quick they're there.

Speaker 3: several issues with getting the bus delivered, but often it's having the customer ready for delivery, infrastructure in place, and it can even be, you know, waiting for CHP to come out and sign off on a vehicle. But all that gets better with time. We are improving. Most of it's...

Several issues with getting the bus delivered but often it's having the customer ready for delivery infrastructure in place and and it can even be waiting for CHP to come out and sign off on a vehicle.

But all of that.

It gets better with time, we are.

We're improving most of it.

<unk>.

Speaker 3: Basically, having the customer go through their learning curve and understand what they're accepting and training and all the things that go along with vehicles, especially that are disruptive and of a new nature. I can tell you when I first got into this space over 10 years ago.

Basically having the customer goes through their learning curve and understand what they are accepting and training and all the things that go along with the vehicles.

Especially that are disruptive and other new nature.

I can tell you when I first.

Got into the space over 10 years ago.

Speaker 3: The acceptance process of a vehicle that means like when you a customer received the vehicle to when they accepted it And signed off on it and released the funds used to take you know up to four five months in some cases That's down drastically and the school buses are really accelerating that

The acceptance process of the vehicle I mean like when you have customer received the vehicle.

To win they accepted it.

And signed off on it and released the funds used to take up to four five months in some cases.

That's down drastically and the school buses are really accelerating that so we believe a lot of that is training experience.

Speaker 3: So, we believe a lot of that's training, experience, green power, getting better at, you know, walking customers through all those different things. We don't find it to be so much of a, you know, getting the voucher redeemed or getting paid on the voucher. Those, the folks have been pretty good at getting those, getting that funding out as soon as the customer accepts it. Okay, so that sounds positive for working capital going forward. Yes. We believe it.

Green power getting better right at walking customers through all those different things, we don't find it to be so much of a.

Getting the voucher redeemed or getting paid out in the voucher that those folks have been pretty good at getting those getting that funding out as soon as the customer accepts it.

Okay, so that sounds positive for our working capital going forward.

Yes, we believe it very much so yeah.

Okay Fantastic those are my questions. Thank you.

Thank you Barry.

Speaker 1: This concludes our question-and-answer session. I would like to turn the conference back over to Fraser Atkinson for any closing remarks.

This concludes our question and answer session.

Like to turn the conference back over to Frazer Atkinson for any closing remarks.

Speaker 4: Thank you everyone for participating on today's earnings calls and we appreciate the questions. We can't anticipate all of the questions that our stakeholders have so it's great to be able to provide additional colour commentary on our business.

Thank you everyone for participating on today's earnings calls and we appreciate the questions as.

We can't anticipate all of the questions that our stakeholders have so.

Great to be able to provide additional color or commentary on.

On our business.

Speaker 4: As our next cycle is our year-end at March 31st, and as a result, our annual filing is

As our next cycle is our year end at March 31st and as a result.

Our annual filing as.

Speaker 10: is a little later than the 45 days that our quarterly follows would be an extended period of time out in terms of our next call and we have a lot going on. The company will be endeavouring to keep very timely updates and as we indicated on this call, there's a lot to follow in terms of.

Is a little later than the 45 days at a quarterly falls.

<unk> would be.

It would be an extended period of time out in terms of our next call and we have a lot going on so you know the company will be endeavoring to to keep very timely updates and as we indicated on this call. There's you know there's a lot to follow in term.

Job.

Speaker 4: our deliveries and our continued rollout of our BEAST school bus.

Our deliveries and our continued.

Our continued rollout of our Beast School bus.

Speaker 4: as well as our family of EVstar products getting into additional markets from the traditional markets that we've been serving.

As well as our family of EV Star products.

Getting into additional markets from the traditional markets that we've been serving so.

Speaker 4: So we appreciate your support and everyone have a great day. Thank you.

So we appreciate your support and everyone have a great day. Thank you.

Speaker 1: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.