GreenPower Motor (NASDAQ:GP) Q1 2021 Earnings Call

0:00 Good evening and welcome to the Green Power Motor Company first quarter earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Michael Sieffert, CFO. Please go ahead.

0:37 Thank you. This is Michael Sieffert, the Chief Financial Officer of Green Power Motor Company. I would like to welcome everyone to our call to discuss Green Power's first quarter financial results for the period ended June 30, 2020. I'm here today with our Chief Executive Officer, Fraser Atkinson, and our President, Brendan Riley. 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 purpose of safe harbor provision under the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. 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 and in our MD&A filed on CDAR.

1:27 In addition, these forward-looking statements relate to the date on which they are made. We anticipate that subsequent events and developments may cause the company's views to change. Green Power disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 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 filed on CDAR, which is located on our website at www.greenpowerbus.com. I will now pass the call over to Fraser Atkinson.

2:10 Thank you, Michael. A lot has happened recently, so before we get into the quarter, I'm going to talk about NASDAQ and the share consolidation, among other things. This past Friday, August 28th, the company completed a consolidation of its common shares on the basis of seven pre-consolidation or pre-split common shares for one post-consolidation or post-split shares. So if you held 7,000 shares pre-split, you now own 1,000 shares post-split. The reason for going through this exercise was to achieve a number of objectives, which I'll talk about shortly. but in the context of several other activities undertaken at this time.

2:56 The second one is that on that same date, August 28th, the company shares commenced trading on the NASDAQ capital market under the symbol GEP. Our shares continued to be listed for trading on the TSX Venture Exchange under the symbol GPV. The shares of the company that were traded on the OTCQB under the symbol GPVR ads as of August 28th were no longer quoted for trading on the OTCQB. And NASDAQ had worked to effectively port over those shares. And if there is any shareholders that are encountering difficulties or problems, please contact us at our office.

3:42 As previously announced on August 28, 2020 and filed with the SEC and on CDAR, the company priced its U.S. initial public offering for 1,860,000 post-consolidation common shares of the company at a price of $20 per share. In addition, the company granted the underwriters a 30-day option to purchase up to an additional 279,000 shares at the initial public offering price. The gross proceeds from the offering before deducting underwriting discounts and commissions and estimated offering expenses payable by the company are expected to be approximately $37.2 million. Both of the figures I've just quoted are all in U.S.

4:30 dollars. Excluding any exercise of the underwriter's option to purchase additional common shares, the offering is expected to close on September 1, 2020, subject to the satisfaction of Customary Closing Conditions. The company intends to use the net proceeds from this offering for the production of all electric vehicles, including EV stars, EV star plus, EV star cabin chassis, our school bus, and our 30-foot low-floor transit-style bus, as well as product development and geographic expansion, with the remainder, if any, for working capital. NASDAQ has, in terms of my earlier comment about the objectives that we were seeking, NASDAQ has a minimum listing requirement which we have been tracking or we had been tracking below.

5:25 At our pre-split levels or prices, we're also below the majority of the thresholds that ETFs, index funds, and CSG funds require in order to buy a stock that would otherwise qualify for their fund. So whereas our Green Power stock may meet all the criteria, requirement, and even the objectives set by the management of these funds, simply our stock price was a limiting factor in terms of these funds acquiring our stock. And to illustrate the impact of these, We understand there are 21 ETFs that own more than 5 million shares of Workhorse. So our view is a great example of how these funds can be an effective participant in a company's stock and went a long way in our determination of the metrics for our various activities of last week.

6:27 So at this point, I'd like to introduce Michael Sieffert, the CFO of Green Power, who spoke at the beginning of this call.

6:39 Thank you, Fraser. For the three-month period of June 30, 2020, the company recorded revenues of $2.3 million and cost of revenues of $1.7 million, generating a gross profit of $618,583 or 27.2% of revenues. Revenue was generated from the sale of 18 EV stars for which the company provided lease financing and which were accounted for as finance leases, as well as revenue from other finance and operating leases and other sources. After this delivery, Green Commuter had approved California HVIP vouchers totaling $4.5 million that will be used towards their remaining order for 52 green power EV stars which excludes the 100 EV star order that Green Commuter made subsequent to the quarter. As at June 30th, 2020, Green Power had finished goods inventory of approximately 2.9 million comprised of nine EV stars, two EV star cabin chassis, two school buses, one EV 350 and charging stations, as well as work and process inventory of 3.2 million including 14 EV stars, 10 EVStar Plus, 5 EV250s, as well as initial deposits for the 100 EVStar project and parts inventory.

8:08 At June 30, 2020, the company had a cash and restricted cash balance of $310,000 and available funds on our line of credit of just under $10,000. Since the end of the quarter, there have been a significant number of warrants exercised delivering cash to the company as well as the conversion of several convertible debentures which has reduced our liabilities as well as our interest costs. Cash costs for the quarter were $1.45 million. This was the lowest level in the past four quarters as management took several steps during the quarter to reduce costs in response to the COVID-19 pandemic including reductions in salary, reductions in marketing costs as well as others. At this point, I'd like to pass the call over to Brendan Riley, the president of Green Power.

8:57 Thank you, Michael, and thank you, Fraser. My name is Brendan Riley, and I am the president of Green Power Motor Company, and it is really a distinct pleasure to be here today. I'm also very proud of our team's performance as we continue to put vehicles on the road and build our sales channel despite the pandemic-constrained economic backdrop. The team has done an exceptional job, and I applaud them for their efforts. We use the phrase purpose-built here at Green Power, and it's used in the industry also, frequently to describe the full line of Green Power vehicles. For those of you who may be new to the story, that simply means our vehicle was designed, engineered, and manufactured from day one as an all-electric vehicle and not a regular combustion vehicle that was retrofit like some others in the industry.

9:55 We are seeing this differentiation become more and more significant recently as we continue to build our sales channels. Quite simply, purpose-built is better and customers increasingly appreciate and understand that. They want to buy a purpose-built vehicle that has a proven track record that has been tested by federally sponsored independent third parties such as Altoona and comes with sales and service support that they expect. And Green Power is the only vehicle in its class that satisfies those demands. We recently performed numerous sales demonstrations for electric school buses and had an amazing response. The domestic school bus market includes approximately 480,000 buses.

10:46 The very vast majority of which are traditional vehicles, mostly being diesel. While the uncertainty around school reopening casts somewhat of a shadow on the immediate term, in some cases, we have seen a campaign pledge from people, even a Democratic candidate running for president, where he would like to see the full electrification of all 480,000 buses by the year 2030. Safe to say that regardless of who wins in November, the future stimulus programs are highly likely to support this market, and we have the best EV bus in the battery electric space. This is not just our opinion. We're hearing that echoed repeatedly during our sales tours, and we expect additional orders to materialize that result.

11:39 While our green power platform affords us not only the ability to provide an excellent finished product, we also have the ability to deliver either a cabin chassis or the EV star full body itself. This represents an enormous opportunity for green power in the quarters ahead as we see many corporate buyers now seeking to accelerate their adoption to all electric vehicles and making their entire fleets all electric. We had considerable interest during recent sales tours and discussions remain ongoing with a lot of those corporate customers. While the economic backdrop becomes difficult to forecast, what's clear is that Green Power has first mover advantage with our EVStar platform.

12:27 We have units on the ground and we have many units to... We have units on the ground and the roads for a transformative shift to EV on a global basis is underway. We will get to that end by the calendar year 2020, and we will now have the production volume to keep ahead of the production demand and address the emerging opportunity. With that, I will return the call back to Fraser Atkinson. Thank you.

12:59 Thank you, Brendan. In anticipation of the Q&A, we're asked about guidance fairly often. So in anticipation of this, the company has not provided any guidance or forecast, in part due to the uncertainty of dealing with customers and the like during the pandemic. But as the economy reopens, we feel that we need to get a quarter under our belt. So this is something we will be revisiting later in the year. and it's certainly our hope and objective to be in a position to provide guidance on both vehicle deliveries and the related metrics within the P&L so that shareholders and the like can have an understanding of what we'll be doing in the future.

13:50 Our strategy for the past few years has been focused on our EV star platform and the six models leveraging this platform. We now have been expanding that focus or strategy to include school buses that we see a lot of opportunities in 2021-2022. And that's certainly illustrated by our recent announcement for an order of 10 school buses and as well the activity that Brendan was referring to earlier. Production capacity. As the schools in our filings with the SEC and MD&A for this quarter. Our Buy America compliant domestic production capability, we expect to double this from the current 15 EV stars a month to 80 by the end of this calendar year. Combined with our contract manufacturing partners of 50 additional EV stars and 100 cabin chassis per month by the end of this calendar year, This will give us production capacity well north of $200 million at current prices.

15:00 And I emphasize this is production capacity. This is not forecasted revenue, but it gives you a sense of the scope in terms of our capabilities that we've built up. So as Brendan talked about, our orders are growing. We're enjoying robust sales activities. So what is the weak link or what are we missing here? and it is about the production of our vehicles. The steps your management team have taken over the past six to 12 months has allowed us to substantially increase our production across multiple products, which we believe will lead to exponential revenue growth. It's important to note that there is a lag from the start of production to delivery and revenue recognition. In the case of EVStars, we're looking at a couple of quarters. For school buses, more in the magnitude of three to four quarters.

15:55 Finally, we are very excited with the NASDAQ listing as we see this increase in the exposure for Green Power and its products. And we also believe that this will help Green Power move to a leadership position with additional opportunities in particular in those areas that we have first market or first mover advantage. Lastly, or I guess this is the final point, I'd like to point out that we have a short video that we uploaded a week or so ago on our website. It's under the Investor Center on the left-hand column, and it features many of our vehicles, including various models utilizing our EVSTAR platform.

16:42 And so I'd encourage you to go and have a look. and likewise on our channel on YouTube, we have many other videos on products that have been deployed with various customers. So on that note, I would like to turn it over to questions and answers. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. Our first question will come from Craig Irwin with Roth Capital Partners.

17:25 Good evening, and thanks for taking my question. Fraser, it's been a couple weeks now since the bus and bus facilities money was awarded by the FTA here in the U.S., and then a couple months now since The low no awards were made. Can you maybe frame out for us the approximate number of opportunities that you're looking at there? Have you seen multiple of these potential customers come in and start active discussions with you about potentially ordering EV stars for delivery in the back end of this calendar year and the next fiscal federal year?

18:13 So I was going to let Brendan start this, and I'm going to finish this question or the response.

18:19 Yeah, thank you, Craig. This is Brendan Riley speaking. So, Craig, since we haven't been given official notice to exactly what the quantity of vehicles we're getting on the NOLA award, we haven't mentioned that yet. I can't really give you real guidance here or any sort of – If those orders were to materialize, would they likely materialize before the end of this calendar year? So typically, I have trouble really predicting when these orders are going to come in.

19:19 We've been given dates. They should be here within the next 30 days. But with COVID and with some of these people remote working, I honestly can't give you any date. We do anticipate them well before the end of the calendar year, though, Craig.

19:34 Excellent. That's very helpful. Thank you. Craig, thank you for the question. The next question I have is... production capacity, right? So a lot of investors are asking, you know, what the realistic number of EV stars you could deliver on a quarterly basis might be for your fiscal 2022. You did discuss that a little bit in the prepared remarks, but where would you see the high end of potential deliveries and what would you need to increase the capacity if you wanted to maybe double that?

20:17 So I'll take this first and then I can give it to Fraser afterwards. Right now we are capable of building a certain number of Buy America compliant vehicles and then we have a larger capacity for the non-Buy America compliant vehicles which are currently being assembled by our contract manufacturing partners. It really depends on the mix of those vehicles, what our capacity is, because it really would have to be a blend. But what we're capable of doing now is 15 units per month of the standard EV star. And what we're capable of doing by the end of this year will be 30. We will be able to increase that, and we believe the orders will dictate that level of uptick in production capacity for Buy America compliant vehicles.

21:08 but just for your numbers too, right now we can build about 30 non-BioAmerica compliant EV stars and about 50 non-BioAmerica cabin chassis in parallel. By the end of the year, we'll be at an additional 50 EV stars capacity that are non-BioAmerica compliant and a fully an additional 100 EV star capacity that are not by America. And all of those were monthly production numbers. And I'll pass it to Fraser to continue.

21:45 Well, the only thing to add is that we, once again, we're not in a position to provide guidance for a variety of different reasons, but the way to think about this is that with what Brendan is talking about in terms of bringing up production, if the mix is more geared towards demand with the cabin chassis or the CC, which has the greatest opportunity in terms of outright production capacity, then we can ramp that up to a much bigger number, and that has the shortest build cycle. So two quarters from now, the expectation would be that those would be being delivered and revenue recognition with customer deployments.

22:34 in the case of the Buy America EV Star or the Buy America compliant that takes longer than the sort of just a regular EV Star passenger vehicles. So that would be at least two quarters out from when we get into the production. So rather than looking ahead at where we might be in 2022, what is critically important is really twofold in over the next 30 to 60 days in terms of what What we are ramping up in terms of production and we will provide updates from time to time on that front and the order book as it grows with announced orders. So those will really be the two key ingredients in the near term that will dictate what we're able to realize on that ramp up on production and ultimately deliveries and revenue recognition.

23:32 Okay, and then my last question before I jump back into the queue. The cabin chassis product, you know, I know you started marketing that a little later than you would have wanted to start because of COVID and the complications around seeing customers. Can you maybe update us on the momentum of those sales discussions today Is it rational to see a material revenue contribution in the next six months or for us to expect it? And are we really looking at a six-month to one-year sales cycle for some of these chunky orders the way that, you know, the truck market usually delivers things in the 50s to 100s versus the shuttle bus market where the sales are often on the smaller side?

24:27 So Craig, setting aside the guidance component of your question, and I applaud your persistence, is slide nine on our investor deck on our site lists all six models on our EV Star platform. The vehicle in the bottom right-hand corner is a vehicle that we haven't delivered to the end customer, but is one that we built on the cabin chassis. and it's got a 1600 pound lift gate, it's got a cube that has an 86 inch height which is absolutely unheard of for this height of vehicle and it's got a 5,000 pound load for an all electric vehicle that is rated with that capacity load to doing 150 miles on a single charge.

25:22 you know, we've gone from announcing the fact that the EV Star cabin chassis, which is ultimately we are directing it towards bodybuilders, upfitters, and so on, but it's also important to note that the EV Star Cargo Plus, as shown on the bottom right-hand corner, is our build on our own EV Star cabin chassis. So until that's deployed with the ultimate customer, and we've done trials with customers related to that product and demos will have a much, much better sense of what the uptake is on really both the Cargo Plus and the cabin chassis.

26:06 Great. Thank you so much for that additional color. I'll hop back in the queue now. Congratulations on the progress.

26:13 Thank you, Craig. Our next question comes from Christopher Souther with B. Riley FBR.

26:23 Hey, guys. Thanks for taking my question. I mentioned in the release that you commenced production of those 10B school buses. And in the prepared marks, you talked about a three to four quarter time frame, which we should expect for deliveries. I just wanted to get a sense on kind of, you know, seasonality for that market. Should we expect, you know, This is Brendan, Chris, and that's a really good question. And with conventional school buses, that is the case. But with battery electrics, we find that the orders are delivered.

27:15 whenever they're ready throughout the year. And they're placed pretty consistently through the year. So the school buses, I would expect a three to four quarter lead time for the delivery of those to our customers. And I think that your comments were exactly spot on. It'll take three quarters for us to deliver those and recognize the revenue on those.

27:42 Got it. But generally, you know, it wouldn't be kind of all the orders coming in, you know, three, four quarters in advance of, you know, the summertime. It could be kind of throughout the year where you get kind of expansion with those customers or potential other customers, you think?

27:56 Yeah, my experience and what we anticipate is for them to be fairly consistent throughout the year. And that's the way the RFPs and these awards have been set up in the EV space is to try to flatten out the delivery so they're not so lumpy, and deliveries and integration into fleet. So they'd really like them to be more constant at a regular run rate than lumpy.

28:28 Understood. That's great. And can you talk a bit about the customer mix for the 40 EV stars that are in production? What portion of these are going to green commuter versus kind of other channels? and I can't talk about guidance at this point. Maybe just the cadence of the rest of the 150 Green Commuter orders over the next year and a half or so.

28:53 The beauty of the EV Star is going to Green Commuter in that big order is that we can deliver those. I mean, it's a nice thing. They've given us a very generous delivery schedule. So we will be able to deliver some of those to Green Commuter for their fleet integration. And they do have these van pools that are constantly running. But we have some limited flexibility there. Those are predominantly for Green Commuter and some other orders that we've got for units for creative bus sales. All that being said, those are predominantly for Green Commuter. And some of them will be going to other customers, but we haven't let the market know who those customers are yet.

29:46 Understood.

29:47 And then as far as what you guys are seeing in the transit markets, as far as activity and visibility, could you just speak about that and whether there's been any uptick in interest for smaller buses trying to adapt in COVID social distancing? or is the transit market activity pretty consistent between large and small buses?

30:09 So now that the transit market appears to be getting its feet back under it, we are receiving more inquiry for vehicles. But our experience with our transit customers has been that the smaller bus market and their microtransit service have not changed at all. So if they're running microtransit, that has not been affected. It's the larger bus service that's been affected. So we haven't really seen, we've only seen the fact that they're not operationally, they might not operationally be able to receive the units, but they're still on the roadmap for the smaller buses. For the larger buses, there has been a kind of a rollback, and we'll see what happens with that market.

31:06 But we expect the EV star smaller market not only to reemerge, but reemerge stronger than ever due to the fact that the transit properties do seem to want to operate smaller buses and do want to start leveraging a more compelling level of service such as microtransit, which typically speaking is a service that you would hail from your app, an app on a mobility device, and it would pick you up exactly where you are and drop you off where you need to go door to door, you know, taking care of the first and last mile mobility. Again, those typically cover a smaller geographic space.

31:51 But unlike scheduled service that runs at bus stops, microtransit utilizes smaller vehicles, and they operate in like a swarm and similar to a ride-sharing version of Lyft and Uber. That's what we see the most interest in from transit properties.

32:14 So just to add what Brendan was saying on slide six in our deck, there's a picture of six vehicles with Sacramento Regional Transit and on the back of those vehicles, the app is prominently displayed. It's called SmartRap. SmartRide On-Demand Transit, and as Brendan was alluding to, it's similar to UberPool and LiftLine in terms of ride sharing, or similar to that app. But also on that slide is noted that our EVStars are, with the Altoona test and Buy America compliance, is eligible for up to 80% of the purchase price for those vehicles from the FTA. as a combination for those properties that are looking for new or additional revenue streams and as well downsizing from a 40 or a 35-foot bus that is largely running empty.

33:13 We're seeing this as a great market opportunity in terms of those transit properties that are looking at pivoting. and then the other thing to add to that is that you jump ahead a few slides back to sort of the EV Star platform on nine and the picture on the bottom there is the on the third over the EV Star ADA that Sacramento Regional Transit took three of those and those have a curbside mounted door with a wheelchair left so you know we can provide you know various types of configurations for the overall deployment and combined with the eight EV stars that Antelope Valley has you know with just two properties we already have 17 of these vehicles deployed for micro transit services so these properties are considered to be thought leaders in the industry and a lot of other transit properties look to them for what they're doing and what they're predicting.

34:22 And so we're really excited about pursuing these this fall with transit properties across the United States.

34:36 That's very helpful details. Thanks, guys. Just a last one. On the EVSTAR Cargo Plus and the cabin chassis variants, Can you talk about the types of customers that you're showing that to now and kind of going through your testing with and just a little bit about kind of the process of those tests? Any kind of clarity you could provide there would be very helpful.

35:00 This is Brendan speaking. So we're showing actually, like, for instance, the cargo. That's often showed to end users. We've shown that to utilities. We've brought that to... OEMs that build garbage trucks, street sweepers. that operate fleets that would be interested in putting their own box on the back of the vehicle to their exacting specs. We've brought that vehicle to the small school bus manufacturers that make the little school buses.

35:51 We've also brought that vehicle to RV manufacturers and even shuttle bus companies that make shuttle buses. The interest in that vehicle – I just got off a call before this call – with a potential customer for those vehicles has been incredibly high. And Green Power is also ramping up our team that's specifically directed to sell, engineer, support, supply those vehicles. So we're attracting some very good talent. And I really think it's not just having the vehicle, having the best vehicle, it's having the best team in place. to really understand the customer's needs, making sure those are met, and also selling it properly, answering the questions in a timely and a compelling way. So you see the two ends of that vehicle. The cabin chassis or the CC is basically a naked vehicle, and then the Cargo Plus would be a vehicle that's dressed and ready for a vocation, ready for work.

37:03 and one would be more to an end user and the other one would be more to an OEM or an upfitter. But those are very good questions and those we consider our truck products, not our bus products. They move goods or provide a work, a vocation rather than just moving people. But thank you, Chris. That was a very good question.

37:26 That's helpful. Thanks, guys. I'll hop into the queue. Our next question comes from Ashok Kumar with Zinc Equity.

37:37 Great. Thank you, Brendan, Fraser, and Michael. The first is a big picture without getting into specifics. Using fiscal 2068 units that were delivered as a baseline, can we look at fiscal 22 as the right time frame where you'd be able to double the number of deliveries without getting into specifics? Would that be the right time frame to look at?

38:02 Hi, Ashok. As Fraser said at the outset of the call, we're not in a position to be able to provide guidance right now for a variety of reasons. So it's a good question, but we're not in a position to answer that right now.

38:15 Understood. Now, in terms of product specifics on the all-electric synapse school buses, some of your demonstration vehicles in the past to create a bus sales that are sold at no margin. So in terms of looking forward, is it fair to assume that those sales or transactions would be at corporate average margins?

38:41 So I believe what you're referring to here are some of the original demos of the school bus units that were sold. Yes, that's correct that those were sold at no margin. However, going forward, that model has been redesigned, and that is now being marketed under the name The Beast. And we do anticipate that these units going forward of The Beast units will be sold at a margin.

39:13 Got it. And in terms of when a customer, to the extent you can disclose, you had delivered some of – the demonstration vehicles to some key school districts, including VLTO. I was wondering, did that translate into any commitments, or you're not in a position to provide customer-level granularity?

39:32 Well, we did recently announce an order from three school districts in the greater Los Angeles area for ten vehicles, so each of those represent collectively multiple orders. and that was leveraging the previous experience. So the way we kind of addressed the market, and Brendan can sort of provide some additional clarity or visibility, is that we didn't necessarily want a product that just was on par or similar to several of the other offerings. Our vehicle is a Type D, so it has the front and Michael Sieffert.

40:22 We have air ride, suspension, ABS, disc brakes, pass-through storage. So for those schools that need it for sporting events or things like that, it's a very functional vehicle and it seats up to 90 seated passengers on a 40-foot vehicle. So it's a very functional vehicle. there's a lot that we've packed into that vehicle and as such the sales approach that we have taken with it in part because our sales strategy the last couple years and through this calendar year is very much focused on the six models on the EVSTAR platform but we see some strong demand in 2021-2022 with school buses in part because you have parents that through COVID in particular are now realizing that their children are hopping on vehicles with these old diesel emitting vehicles that are emitting not so much the carbon dioxide but the NOx emissions are very harmful for the children's lung development.

41:31 So they're demanding change and they're pushing for school districts to you'll find a way to electrify these older school bus plates.

41:41 Okay, and also the 292 CHP certification also recognizes the quality and standards established by this platform.

41:51 And Ashok, this is Brendan and Fraser is absolutely right on his comments. But those customers are Santa Maria USD Unified School District, Anaheim U.S. School District and Houston HUGHSON Thank you very much.

42:11 Shifting to the EE Star and I think if you could reaffirm that this is the only class 4 all electric vehicle right to pass the L2 now and then when combined with the Buy America build that positions you uniquely to address the opportunities with the U.S. transit authorities including the are especially eligible for FTA funding.

42:41 Yes, this is the only purpose-built, zero-emission, all-electric school bus that's actually past Altoona and is eligible for the Buy America compliance for FTA. That's correct.

42:57 Got it. Now, shifting to this, I think in the past you'd mentioned about this fully autonomous EV Star. I was wondering, is there any timeline for delivery to Jacksonville Transit Authority in terms of that would establish a revenue timeline for this particular new opportunity with this platform.

43:18 So that vehicle that's being automated with our partner Peron Robotics is in validation right now. It's slated to be delivered before the end of this calendar year. to Jacksonville Transportation Authority. Again, these are schedules, but we're anticipating a date sooner than that, as early as October, but the schedule is before the end of this calendar year, and everybody seems to be working, and we don't have any information that shows that schedule slipping in any way. Got it.

43:58 Congratulations, and thank you very much.

44:00 Ashok, thank you for the questions.

45:06 There's Fraser. We're just looking for our operator. Hopefully, it hasn't taken a five-minute break yet. Sorry about that. Again, if you did have a question, please press star and then 1 to join the queue. We're just having technical difficulties for a moment.

45:28 Yeah, in the meantime, if I may, this is Brendan Riley. And operator, please interrupt as soon as you have a question. Fraser was touching on the fact, and Ashok asked about the Buy America compliance and the Altoona portion. Just for Altoona testing, it can take a year just to get in the queue for Altoona, and then you have to run the test. And I've had those tests at a previous company take over a year, and at Green Power we finished it in a shorter period of time than that. But It can take a long time to get that compliance under your belt with the score and everything in place so you can start delivering vehicles into transit properties.

46:17 That we think is a pretty strong competitive advantage in at least the transit market for the EV star as there is no vehicle that we're competing against that really has that certification. And can actually leverage those FTA funds. 10 quarter lead times just before you get delivery on those vehicles from the time the order is received. So it's a much shorter delivery cycle and it's also a shorter sales cycle but the delivery cycle is really the long pole in the tent and the EV Star at least for the transit market is such a compelling product on top of everything because of that. I mean it really is a for the industry, it's unheard of.

47:36 And we do have another question. And now we'll take a question from Taylor Ogan with Snowball Capital.

47:45 Hi, thanks for taking my question and congratulations on the NASDAQ listing. With the UCLA purchase, you mentioned incentives are no longer the driving force for demand. Are you starting to see the total cost of ownership savings being a more compelling selling point? and how does range play into that? I know EV Star has significantly more range than competitors in its class, but now the overall demand for electric and transit vehicles has surged this year. What do you see driving demand? Is it range, is it price, chassis, versatility or what? And then I have a follow-up, thanks.

48:22 Yeah, this is Brendan. My first response to that is the The driving factor for the transit space is, I mean, you've got the carrot and the stick. The stick would be the regulations, the requirements to electrify your fleet in our case, and the carrot would be the incentives. And we still have a blend of both right now. We do see that the mandates are coming, and they're rolling into place. The largest properties will have to make the move first. but the requirements are now moving over into the airline shuttle space, the airport shuttle space, and we'll see if it goes into other spaces.

49:08 We are also having additional states adopt the California policies. What I was referring to are some California policies. Now it's brought into eight other states with another 15 states considering making these requirements. In California, we have a very compelling program called HVIP, which pays up to 50%, in some cases, maybe even a little bit more of the cost of the vehicle. School buses, even more than that. And in New York, you're seeing the New York City program, the New York HVIP program, that's more localized in the city, not in the whole state. But that's another very compelling program. But there's a combination of sticks and carrots, and Fraser likes to call it money and mandates.

50:00 Those are things that we look at when we consider a market. But keep this in mind. If you just took a vehicle like the EV Star, and now we've got independent third-party information on fuel economy, maintenance costs, Life Span of a Vehicle, and you take that vehicle and you finance it. You do a lease, some form of financing. That vehicle saves you money from day one because if you blend OPEX and CAPEX together and you look at those together, you look at what it costs to operate a vehicle and purchase a vehicle together as one lump, and you compare them head-to-head, our EV – position is our EV star, comes out ahead of even a gasoline or a diesel vehicle that it would be replacing.

50:55 So that's my position. I'll let Fraser add some color to that comment also.

51:02 No, I'm waiting for the next, the follow-up.

51:06 Okay, yeah, just the follow-up. Thanks for answering that. The follow-up is just if you have an update on the wireless charging partnership with Momentum. Thanks.

51:16 That's a very compelling product and thanks for bringing that up. We're very pleased with that. We are completed on the technical aspect of the integration with Momentum and right now we are anxiously awaiting our first deployment. So we're going to be looking for a first customer that actually has that as part of their requirement and I don't have any announcements for that yet, but I'm very optimistic we should have something very soon. Thank you. Again, for those who don't know what wireless charging is, you don't have to plug it in. There's no human contact with the charger.

52:07 Think of a charging plate in the ground, just a plate that transmits power, almost like a radio signal. It transmits power just through the air, and the power is collected by an antenna on the vehicle, and it collects that electricity in form of a radio signal, and it converts it to electricity and puts it right into the battery. This has been around for a long time. Early electric vehicles were charged. Inductively, toothbrushes are charged like this, and iPhones and iWatches and things are often charged this way. It's not new technology, but the fact that it's super efficient and the cost has come down a lot, and now it allows us to basically charge our vehicles without ever even touching anything.

53:02 You just drive over it, and the vehicle automatically starts charging. Never forget to charge the vehicle again. and you can pick up charges on route without the driver having to get out and plug in. Very compelling for, I mean, it almost gives you unlimited range if you've got enough of these wireless charging stations along the route.

53:22 Yeah, and that's a great lead-in to sort of what we see in terms of the strategic direction of our company down the road in that you take a couple of these disparate components that we're working on the Jacksonville Transit Authority that Brendan was talking about earlier is a level five autonomous meaning no driver is where that's ultimately headed and that's on a passenger vehicle. So if you can imagine in the logistics and utilities and transportation space where you're trying to move goods or people for that matter is that and in particular on the goods side if they're dealing with a pick and place automated warehouse You can have a vehicle drive up to the back of that warehouse and induction wireless charging underneath charges that vehicle and gets it back up in terms of its state of charge.

54:16 And the vehicle then is deployed without a driver and does its routes with lockers that are app driven so the customer can access their goods in a safe and secure manner. Well, you can now run that vehicle 24 hours a day, seven days a week. and in our particular vehicle we have a you know it's set up to you know be very very low on maintenance our traction motor is rated maintenance free for 600,000 miles and just to name one of the many aspects of you know the ease of use for that vehicle so you know a number of these initiatives in of themselves they may look interesting but we see a broader picture where the sum of these components or disparate pieces will deliver a product into a service requirement that we see coming sooner than later.

55:17 This concludes our question and answer session and I would like to turn the call back over to Fraser Atkinson for any closing remarks.

55:32 Well, thank you everyone for attending. If you did have any other questions, our telephone numbers are available at the bottom of our press release. So feel free to reach out to Brendan, Michael, or myself if you have any follow-up questions. I'd also like to thank the team. We've had a very, very productive summer in terms of setting up our company for this fall and winter in terms of Our products, our sales activity, and we really, or personally I view the, when we commence trading on NASDAQ is really the beginning of Green Power. We're starting a new chapter in Green Power's life, and we're very, very excited about what we're focused and targeted on over the course of the next year.

56:26 So thanks for your participation on this call. And once again, if you have any questions, feel free to reach out and call any of the three of us. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.