GreenPower Motor Company Inc.

Good day and welcome to the Green Power Motor Company third 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 telephone keypad. 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 Seifert, Chief Financial Officer. Please go ahead.

Thank you. This is Michael Seifert, 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. 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 a 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 MD&A filed on CDAR and on EDGAR. 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 just claims 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 on CDAR and on EDGAR and is also located on our website at www.greenpowermotor.com. I will now pass the call over to GreenPower CEO, Fraser Atkinson.

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. 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, 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. The federal level recently announced an unprecedented level of funding of $5 billion over five years for the purchase of zero-emission buses. Earlier this week, Secretary of Energy Jennifer Granholm stated this could be available as early as April this year. 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 EV Star products can satisfy a number of requirements for transit properties, including Buy America. Now I want to talk about our recently announced plans to manufacture all electric school buses in the state of West Virginia. 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, 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. 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. The original plan was to take occupancy on September 1, 2022, but we've been working with the state to move this up to May of 2022. 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. And when we do start paying the monthly lease payments, these will be applied to the purchase price of the property. We can also earn incentives for up to 3.5 million if we hit various employment levels. 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. The city of South Charleston has been extremely supportive. On February 1st, we announced a partnership with Bridge Valley Community and Technical College and the Workforce Development Board of Kanawa County to provide workforce development and training opportunities for potential employees at our new manufacturing facility. 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 EV star models and low floor transit vehicles. Next, I'll turn it over to Michael Seifert, GreenPower CFO, who will cover the quarterly financials.

Thank you, Fraser. For the third quarter ended December 31st, 2021, GreenPower 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. 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, three EVStar Plus for shuttle services at Vancouver International Airport, and deliveries of various EVStars and EVStar CCs to several other customers. Gross profit for the quarter was $1.5 million, or 27.8%, which was an increase from the gross profit margin of 21.5% during the last quarter. 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%. We continue to target a gross margin of up to 30%, which may vary from quarter to quarter based on product and customer mix. 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 finished the quarter with $29.4 million in working capital, plus approximately $4 million in available liquidity. 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. We have completed work in process inventory since quarter end and have over 100 EV stars and 30 B school buses that we expect to be driving near-term sales growth. Now I hand it over to Brendan for some operational details.

Thank you, Michael. On the product front, we're very excited to introduce our 22-foot cargo van. It's called our EV Star Cargo. This battery electric van is ideally sized and optioned for commercial use in urban markets and the mid-mile delivery space. The EV Star Cargo is the only battery electric vehicle currently available with this high payload and large range category, giving it a massive and diverse addressable market. 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 also have accelerated the rollout of our very popular Beast all-electric school bus. Initial deliveries began during the quarter will continue to ramp up throughout the year i cannot emphasize enough how much the beast is truly in a class of its own when compared to the competition that's out there it is the most feature-packed all-electric school bus on the market and it incorporates a very advanced constellium eco-range body which is lighter stronger safer and offers a smoother ride and a longer lifespan than any other school bus ever made. Initial customer feedback has been exceptional, and we have high expectations for this product in 2022 and beyond. We've also made a great progress in positioning Green Power for future growth. Despite some minorly relative, excuse me, despite some minorly, 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. These recent expansions provide GreenPower with tremendously greater reach on a national level. In closing, GreenPower has demonstrated that we have the products, the market demands, and are now tirelessly working to solidify strategic relationships necessary to catapult our growth to the next level. We are optimistic that 2022 will prove to be a transformative year, and I look forward to providing additional details on our progress when prudent. With that being said, operator, please open up the call for questions.

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then Q. At this time, we will pause momentarily to assemble our roster. Our first question comes from Tate Sullivan with Maxim Group. Please go ahead.

Thank you. Good morning. Starting with inventory, 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 you've built inventory since the quarter end or i'd expect uh how do you measure your targeted level level or how do you look at that longer term please oh hi tate uh this is fraser so uh we've uh with the close to 30 million uh inventory we reported at year end uh the mix was you know uh know one-third two-thirds or 40 60 and on a longer term basis uh 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 i'd say uh the previous and a quarter end we're probably closer to a 20 80 And so we made great progress in getting to that target and would expect to be there in the next number of months.

Thank you, Fraser. 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?

Actually a lot of them, at the year end for example, we had a number of vehicles that were sitting and waiting for a particular component of the package. 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, we move and work on another vehicle while we wait for the barriers, receive them, move back to that vehicle, complete and deliver. So there has been some disruptions related to activities like that, and they're not common to just green power but common to the automotive industry as a whole. 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 and a quarter. So that's been a bit of a learning experience and we've really, I believe, dialed it in so that we can manage you know, multiple model deliveries all at the same time. And as I noted, with 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.

Thank you, Fraser. Turn it over.

Our next question comes from Chris Souther with C. Reilly. 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 1,000-year? You know, 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?

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 what we are doing to ramp up the production. But in terms of the state funding, they were very, very helpful in crafting a plan to provide funding that can be leveraged. So often when you have funding programs, 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 expected to be released in April, May of this year or other forms of funding, we're able to stack all of those as well as what the end operator or fleet operator would pay as well so we see the ability to leverage this into you know in the magnitude of 30 to 40 million of sales from the 15 million of revenue 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 was out doing some demonstrations with our Beast Type D electric school bus. So, you know, by the time we open the facility, we'll have a bit of a running start in terms of, you know, the expectations and the knowledge set in the marketplace of our product and the desire to look at an adoption or electrification strategy. As far as the manufacturing facility goes, as a point of reference, when post-NASDAQ, when we announced that we were now moving towards producing product and producing it to inventory, and in the case of the Beast Type D school bus, that means building it up to where we then would 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 and so you know that enabled us initially to do five a month last year we increased that ten a month and part of the West Virginia strategy was well you know just going incrementally from five to ten to fifteen we felt wasn't going to meet the potential opportunities in the marketplace and And we needed a different strategy in terms of really wrapping up production. And that having a dedicated facility and having a facility that could produce in volumes, we felt would accomplish that. So in terms of the 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. 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 that sort of initial production level. And I'll turn it over to Brendan to sort of add to that. Yeah, thank you, Frazier, and good morning, Chris.

Thank you for the question. I would say that Frazier answered that question pretty completely. The facility as it sits right now with our existing 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 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, we're really not giving estimates. I mean, the 1,000 buses a month, excuse me, a year coming out of that facility is really a number that we've got, you know, 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, you know, with slight modifications, about 30 units a month.

Okay, got it. Now that's very helpful. And 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. 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, if you guys look to kind of build inventory there as well, I'd imagine, what are kind of the cash needs over the next year or so as you get up to production and start to get deliveries coming off the line in West Virginia between kind of the two facilities here?

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 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. in terms of getting them organized for deliveries. So 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 on direct sales to customers. As a mix, that's at a level that we haven't enjoyed, had the opportunity to enjoy before, and is really changing the dynamic in our working capital. So getting to that proper mix in terms of finished goods to the balance of our working capital and inventory for the vehicles in production is a critical part of really driving a working capital that has got nearing cash deliveries for us as opposed to, you know, that amount that is sitting in production, you know, has a ways to go before we can monetize that.

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, EV Star and Beast, 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, 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.

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, we've got over, or I'm going to say approximately 60 approved HVIP vouchers that principally relate to the EV stars and as well some EV star cabin chassis. We have as well the 22 foot EV star cargo that Brennan was talking about. 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 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 want to be in the queue for the next round of 22-foot cargo vans that you can deliver pursuant to this program. So there's... You know, that just gives you an idea of a number of the different models and the different funding mechanisms, all pursuant to firm orders.

Okay. That's helpful. Thanks, guys.

Thank you.

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

Good morning, and thanks for taking my questions. Frazier, you know, congratulations on improving sales out there at the Beast. And it sounds like you're pretty well teed up for the money when EPA starts to disperse it. 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 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?

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 school bus so ryan do you want to start with this and then yeah back to me and talking about milestones absolutely frazier and good morning craig uh man the process here has been very exciting uh especially over the last couple of months in terms of demonstrations on the beast school bus right now we're doing a lot of demos With some school districts that had previously seen our 36-foot variant of the Synapse 72, and as you know, we've rebranded 40-foot vehicle, 90-passenger, 194-kilowatt-hour battery pack. 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 side. the technical part all comes together with the grants, right? And that's where we're helping our local dealer, whether it's Creative Buzz Sales here in California and some of the other partnerships that are on the horizon. 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 training pitches on the front end just to make sure everybody's comfortable with how to present a purpose-built Type D electric school bus. Once they've decided that this project is something that's going to meet their needs, 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 process sale. And once they've determined that the vehicle is the right fit, that we turn it over to our grants team and our dealer's grants team, and then they work together on getting it all processed, Deals are coming together very quickly. Just this week alone, I did nine demonstrations in Northern California. I've got next week in San Joaquin Valley, I'm 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. And these are the types of things, these are the grassroots efforts that are gonna 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, 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. And with that, I'll turn it over to Craig, or to Frasier for the milestones.

So, Frazier, this is Brendan real quick. If I may just add to Craig's 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. So we anticipate a very similar mechanism for how that funding is going to work. And basically, the school 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 anticipate it to roll out.

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 Loano 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. uh, 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, uh, the FTA low, no program, which, you know, you pay 50 grand to put the proposal together and, uh, you know, it takes a year or two to get a notification back. It's just not going to be like that. Understood.

And Fraser, the, uh, the catalyst on the, on the awards, if you could help with that.

Sure and just to note that as a company we did have some input on the process and so the rules that have been issued aren't a surprise to us at all and fortunately have a few tweaks that not just for us but for the industry as a whole hopefully do make it as seamless as possible so that you know, we can see, you know, a significant rollout of the funding and which will lead to the, you know, the faster adoption. In terms of, you know, a really good question in terms of, you know, where do we expect to be at the end of March? And, you know, number one, I'd say on the school buses, you know, we went from 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, then that represents a doubling again, queue over queue, and I believe is completely doable and sets us up to continue to accelerate the deployments further from there in terms of queue over queue going forward. So I think that's all from current with no impact whatsoever from West Virginia. We don't see West Virginia impacting the 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. So that is sort of the landscape for the calendar year for the B school buses. And then with the other products, we're now really set up for 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 you'll be working with partnerships where we see 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 you can expect to see additional price releases on specifics or in general partnerships that help drive you know, larger volumes than what we've had to date.

Understood.

Understood. Thank you.

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 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?

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

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.

Thank you, Craig.

Our next question comes from Tyler DiMatteo with BTIG. Please go ahead.

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 look to be a nice little driver of demand. And I know, I guess, in the prior quarter, you also said you had deliveries to a Fortune 500 company and then a follow-up delivery of another four vehicles. Are there any signs or I guess what are the signs of those potential customers returning? I know you alluded to it a little bit, but can we just add some more color to that if you don't mind?

Yeah, this is Ryan. 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. So with that as an introductory comment, over to you, Ryan.

Waiting at their doorstep. Yes, exactly. We've had, you know, every time I'm getting reluctant to answer these questions, right, because every time we think we're, you know, out of the COVID fog, there's a new variant and it's more this and more that, which has definitely, you know, created some headwinds. But with that, it's actually given us some time to develop our relationships with these customers before they're full blown back in service. 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. 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 of, you know, orders getting ready to finally materialize. 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.

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

Well, that has changed. 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 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 homologation And, uh, 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. Uh, it has to be carefully integrated and all of that. And, uh, you know, we're unlike an ice. vehicle, all of our secondary systems, like air conditioner, for example, all run on motors. So there's 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, you know, there isn't a next step in that relationship.

Okay, great. Thank you. Really appreciate the time, guys. I'll turn it back to the queue here. Thanks for the questions.

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

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, what is the maturity of that current facility, please?

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.

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 within those metrics.

Exactly, yeah, we're well within those limits, and so there's no concern there.

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

Great, okay. And then just one more, if I may, on the facility opening process for May 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 getting equipment delivered, hiring people? Can you just a little more background on that?

This is Brendan. It's in West Virginia, South Charleston, West Virginia. The biggest hurdle in a facility like that building vehicles is getting the facility staffed up. We can have the tooling, the jigs, fixtures, that stuff 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. So I would say the biggest hurdle is finding the right employees, having them trained and having them in place. And with our partnership with Bridge Valley and the Kanawha Workforce Development folks, Uh, we really believe we're gonna be ahead of, uh, of the curve there. And, uh, you know, as Frazier said, we anticipate vehicles running off the line there by fall. So we're expecting, uh, you know, three to five months window before we take, uh, 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 basically moved in and we're rolling products out the door of that facility within 90 to 120 days. Thank you, Brandon. Thank you all.

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

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 process?

Some of those processes – good morning, Barry. Thanks for the question. 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. And some of – 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, seat belts. Whereas California, it's a requirement. So for many of the folks, they walked into the bus and they said, wow, this bus has seat belts, that's great, but it's not part of their certification process, right? So it's gonna be a lot of things like that, black wheels versus black bumpers versus green. It's very small things. We've recently brought a resource on board That's been in the school bus industry for 25 years, and this individual is going to be helping dial in our school bus specs state by state. So we are mobilizing, and we're definitely preparing to make a big push coast to coast.

Sorry, Barry, you might be on mute. Yeah, can you hear me? It can hear you now.

Okay. What is the list price on the Beast?

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

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. Climate change is a fairly significant crisis, earth and 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 sped up a little bit.

Well, we're not waiting for 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 tied into a particular rebate or voucher and an approved voucher. 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 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 HVIP program. Actually, one of them is. And the rest are all from various air quality management district funding. So those are all, you know, those are all pursuant to both the firm order and funding in place.

So just to 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 it be, why can't you deliver it almost immediately from the time it's finished?

Barry, this is Brendan. Really quick, there are 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 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, the acceptance process of a vehicle, that means like when a customer received the vehicle to when 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's training, experience, green power, getting better at walking customers through all those different things. We don't find it to be so much of getting the voucher redeemed or getting paid on the voucher. The folks have been pretty good at 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. Very much so, yeah. Okay, fantastic. Those are my questions. Thank you. Thank you, Barry.

This concludes our question and answer session. I would like to turn the conference back over to Frasier Atkinson for any closing remarks.

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 or commentary on our business. as our next cycle is our year end at March 31st and as a result our annual filing 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 so the company will be endeavoring to to keep very timely updates. And as we indicated on this call, there's a lot to follow in terms of our deliveries and our continued rollout of our BEAST school bus, as well as our family of EV Star products getting into additional markets from the traditional markets that we've been serving. So we appreciate your support and everyone have a great day. Thank you.

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