GreenPower Motor Co(GP) - 2025 Q4 - Annual Report

Explanatory Note This section clarifies GreenPower's status as a Canadian foreign private issuer and standardizes financial reporting to U.S. dollars - GreenPower is a Canadian foreign private issuer, with common shares listed on Nasdaq (GP) and Toronto Stock Exchange (GPV). All financial amounts are presented in United States dollars unless otherwise indicated[22][23] Forward-Looking Statements This section outlines the inherent risks and uncertainties associated with forward-looking statements, emphasizing potential divergence from actual results - This Annual Report contains forward-looking statements subject to inherent risks and uncertainties, which may cause actual results to differ materially from expectations[25] - Assumptions include maintaining projected production deliveries, expanding production capacity, consistent labor and material costs, and the ability to obtain financing on reasonable terms[26] - The company does not intend to update forward-looking statements to conform to actual results, except as required by applicable law[27] PART I ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS This item is not applicable to GreenPower Motor Company Inc - This item is explicitly stated as 'Not applicable'[29] ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE This item is not applicable to GreenPower Motor Company Inc - This item is explicitly stated as 'Not applicable'[30] ITEM 3. KEY INFORMATION This section provides critical information for investors, including a detailed discussion of significant risk factors related to the company's business, financial condition, and common shares. It also notes that certain sub-items regarding capitalization, indebtedness, reasons for the offer, and use of proceeds are not applicable ITEM 3.A. Reserved This sub-item is reserved and explicitly noted as not applicable - This sub-item is reserved and explicitly stated as 'Not Applicable'[31] ITEM 3.B. Capitalization and Indebtedness This sub-item is explicitly noted as not applicable - This sub-item is explicitly stated as 'Not applicable'[31] ITEM 3.C. Reasons for the offer and use of proceeds This sub-item is explicitly noted as not applicable - This sub-item is explicitly stated as 'Not applicable'[32] ITEM 3.D. Risk Factors This section details significant risks including unprofitability, going concern uncertainty, capital intensity, and supply chain dependencies - The company has not reached profitability, generated a loss of $18.7 million for FY2025, and has an accumulated deficit of $97.4 million, raising substantial doubt about its ability to continue as a going concern[35][36][39] - Operations are capital-intensive, requiring significant capital, which may not be available on acceptable terms, potentially forcing reduced spending or operational changes[37][38] - Reduction or elimination of government subsidies and economic incentives (e.g., California HVIP) could materially adversely affect demand for electric vehicles and the company's financial performance[41][43] - Dependence on third-party manufacturers in Asia for the majority of vehicle production exposes the company to risks related to quality, cost, timely delivery, and shipping[47] - The company is exposed to significant import tariffs, which have increased costs and caused delays, negatively impacting financial performance[66] - The operating line of credit is a demand facility, and the lender reduced the credit limit during FY2025, posing repayment risk and potential need for alternative financing or asset sales[71] - The market price of common shares may be volatile due to factors unrelated to operating performance, and a prolonged decline could hinder capital raising efforts[84][85][86] - The company does not intend to pay cash dividends in the near future, meaning shareholders will only realize a return through share sales[88] - There is a risk of being classified as a 'passive foreign investment company' (PFIC), which could have adverse U.S. federal income tax consequences for U.S. shareholders[89][90] ITEM 4. INFORMATION ON THE COMPANY This section provides an overview of GreenPower Motor Company Inc, detailing its history, business operations, product lines, technological approach, and facilities. It highlights the company's evolution from a capital pool company to an all-electric vehicle manufacturer, its current product offerings in school, commercial goods, and passenger transport, and its strategic focus on purpose-built electric vehicles ITEM 4.A. History and Development of Our Company This section traces GreenPower's corporate evolution, key milestones, and fluctuating vehicle deliveries and revenue - GreenPower was incorporated in 2010, underwent a reverse takeover in 2014 to focus on electric vehicles, and listed on Nasdaq in August 2020[94][96][105] - The EV Star passed the Altoona Bus Test in April 2020 with a score of 92.2, making it the highest-scoring medium/heavy-duty vehicle at the time and the only all-electric Class 4 vehicle to pass[104] - In FY2022, GreenPower partnered with West Virginia for an 80,000 sq ft school bus manufacturing facility, including employment incentives and vehicle purchase commitments[108] - Vehicle deliveries and revenue have fluctuated, with FY2025 seeing 84 vehicles delivered and $19.8 million in revenue, a 49.5% decline from FY2024, while school bus sales increased[111] Annual Vehicle Deliveries and Revenue: | Fiscal Year Ended March 31 | Vehicles Delivered | Annual Revenue ($M) | | :------------------------- | :----------------- | :------------------ | | 2023 | 299 | 39.7 | | 2024 | 222 | 39.3 | | 2025 | 84 | 19.8 | ITEM 4.B. Business Overview This section describes GreenPower's core business of designing and distributing purpose-built electric vehicles, highlighting product lines and market drivers - GreenPower designs, builds, and distributes purpose-built, all-electric medium and heavy-duty vehicles, including transit, school, shuttles, cargo vans, and cab & chassis, using a clean-sheet design and global suppliers[115] - The company's vehicles offer benefits such as low total cost-of-ownership, lower maintenance, reduced fuel expenses, and compliance with zero-emission mandates[116] - GreenPower vehicles are eligible for various government funding programs and incentives, including California HVIP, EPA's Clean School Bus Program, and Transport Canada iMHZEV[116] - The school bus line includes the Type-D BEAST (150-mile range, 193.5-kWh battery), Mega-BEAST (300-mile range, 387-kWh battery with V2G), and Type A Nano BEAST (150-mile range, 118-kWh battery)[117][118][119][120] - The commercial goods line, built on the EV Star platform, offers various models (Cab & Chassis, Cargo, Reefer) with up to 150-mile range, Buy America compliance, and Altoona testing[121] - The commercial passenger line includes the EV Star Passenger Van, EV Star Mobility Plus, 30-ft EV250, 40-ft EV350, and 45-ft double-decker EV550, all featuring low center of gravity and easy battery maintenance[122][124][125][126][127][128] - GreenPower consolidated its California operations into a new Riverside, CA facility in Q4 FY2025, expecting immediate rent reduction and future savings in transportation, travel, and administrative expenses[132][163] - The company maintains a network of dealers across the US and Canada and has a significant partnership with West Virginia for school bus manufacturing, including employment incentives and vehicle purchase commitments[136][137] - Government regulations, particularly in California, are driving the transition to zero-emission vehicles, with mandates for public transit agencies (100% ZEB by 2040) and airport shuttles (100% ZEV by 2035)[143][144][145] ITEM 4.C. Organizational Structure This section outlines GreenPower's corporate structure, detailing its incorporation in Canada and its network of wholly-owned subsidiaries across multiple countries - GreenPower Motor Company Inc. is incorporated in British Columbia, Canada, and operates through several wholly-owned subsidiaries across Canada, the United States (Delaware, Utah, Nevada, West Virginia, California), India, and China[165][167][414] ITEM 4.D. Property, Plant and Equipment This section details GreenPower's leased corporate and operational facilities, including its West Virginia manufacturing plant and capital expenditures - The corporate office is leased in Vancouver, BC, Canada, with the current lease expiring on April 30, 2026[165] - The U.S. operations, manufacturing, sales, marketing, and support office is leased in Riverside, CA, with the current lease expiring in December 2029[166] - An 80,000 square foot manufacturing facility in South Charleston, West Virginia, is used for North American school bus manufacturing, with title transferring to GreenPower once lease and incentive payments total $6.7 million[168] - Principal capital expenditures are in the manufacturing of electric vehicles, EV equipment, automobiles, and tools, with a carrying value of $1.3 million as at March 31, 2025[169] ITEM 4.A. UNRESOLVED STAFF COMMENTS This item is explicitly noted as not applicable - This item is explicitly stated as 'N/A'[170] ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS This section provides a detailed analysis of GreenPower's financial condition and operational results, highlighting a significant decline in revenue and gross profit for FY2025, ongoing losses, and substantial doubt about its going concern ability. It also covers liquidity, capital resources, and product development investments ITEM 5.A. Operating Results This section analyzes GreenPower's financial performance, detailing significant declines in revenue and gross profit, alongside changes in expenses and other income Key Financial Performance (FY2023-FY2025): | Metric | FY2025 ($) | FY2024 ($) | FY2023 ($) | YoY Change (2025 vs 2024) | YoY Change (2024 vs 2023) | | :---------------------- | :----------- | :----------- | :----------- | :------------------------ | :------------------------ | | Revenue | 19,847,279 | 39,271,839 | 39,695,890 | -49.5% | -1.1% | | Cost of Sales | 17,650,661 | 33,914,237 | 32,445,836 | -48.0% | 4.5% | | Gross Profit | 2,196,618 | 5,357,602 | 7,250,054 | -59.0% | -26.1% | | Gross Profit Margin | 11.1% | 13.6% | 18.3% | -2.6% | -4.6% | | Loss from Operations | (17,919,514) | (16,802,375) | (13,285,226) | 6.6% | 26.5% | | Net Loss for the Year | (18,663,448) | (18,342,796) | (15,043,857) | 1.7% | 21.9% | | Loss per Common Share | (0.68) | (0.74) | (0.64) | -8.1% | 15.6% | | Weighted Avg. Shares | 27,580,203 | 24,950,961 | 23,522,755 | 10.5% | 6.1% | - Revenue decreased by 49.5% in FY2025 due to 138 fewer vehicle deliveries, primarily from no EV Star CC sales to Workhorse, compared to 105 units in the prior year[180] - Gross profit margin declined to 11.1% in FY2025 from 13.6% in FY2024, attributed to lower sales, negative gross profit at GP Truck Body, an inventory writedown of $530,675, and low gross profit margin at GreenPower West Virginia[182][184] - Salaries and administration expenses increased by 12.5% in FY2025 due to salary increases for existing employees and increased labor costs in the West Virginia subsidiary[185] - Product development costs declined by 26.1% in FY2025, primarily due to a significant reduction in warranty accrual (resulting from lower sales) and lower other product development costs[189] - Interest and accretion expense increased by 40.0% in FY2025, primarily attributable to higher interest incurred on related party loans and increased utilization of the line of credit facility[195] - Other income of $1,391,746 in FY2025 resulted from the derecognition of a contingent liability related to the dissolution of Lion Truck Body[197] - The allowance for credit losses decreased by $1,463,239 (100.8%) in FY2025, primarily due to the collection of prior year allowances related to certain overdue customer accounts[203] ITEM 5.B. Liquidity and capital resources This section assesses GreenPower's financial liquidity and capital resources, highlighting its cash position, working capital, and ongoing need for additional financing - As of March 31, 2025, the company had a cash balance of $344,244 and working capital of $8.1 million, but an accumulated deficit of $97.4 million and a shareholders' deficit of $1.6 million, indicating substantial doubt about its ability to continue as a going concern[176][210][573] - The operating line of credit had a drawn balance of $5,983,572 against a $6,000,000 limit, and a revolving term loan facility of up to $5 million was available for working capital[210] - Subsequent to March 31, 2025, the company received loans totaling $1.75 million in aggregate from related parties, issuing warrants and common shares as inducements[215][229] - Cash flow used in operating activities amounted to $6.0 million for FY2025, primarily due to the net loss, partially offset by non-cash items and changes in working capital (inventory and accounts receivable)[231] - Cash flow from financing activities amounted to $5.1 million for FY2025, driven by $5.3 million from common share issuance and $1.4 million from related party loans, partially offset by line of credit repayments and lease liability payments[236] - The company anticipates needing to raise additional capital in the near-term to meet growth objectives, including for working capital investments, business expansion, and hiring[164][211] ITEM 5.C. Research and development, patents and licenses, etc. This section outlines GreenPower's research and development activities, including in-house efforts, external validation, and intellectual property protection - The majority of research and development is conducted in-house, with external engineering firms assisting with validation and certification[139] - The company has a patent on a proprietary designed parking pawl for electric vehicles and may seek further intellectual property protection[239] Product Development Costs: | Fiscal Year Ended March 31 | Product Development Costs ($) | | :------------------------- | :---------------------------- | | 2025 | 1,339,200 | | 2024 | 1,811,472 | | 2023 | 2,090,338 | ITEM 5.D. Trend information This section states that no new material trends or uncertainties are identified beyond those already disclosed in other report sections - The company is not aware of any trends, commitments, events, or uncertainties expected to materially affect its business, financial condition, or results of operations, beyond those already disclosed in the 'Risk Factors' and 'Quantitative and Qualitative Disclosures About Market Risk' sections[240] ITEM 5.E. Critical Accounting Estimates This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[241] ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES This section details the composition of GreenPower's board of directors and senior management, their compensation, board practices, employee numbers, and share ownership. It highlights the experience of key personnel, the company's compensation structure including stock options, and the governance framework ITEM 6.A. Directors and Senior Management This section identifies GreenPower's key directors and senior management, highlighting their experience and recent personnel changes - Key management includes Fraser Atkinson (CEO, Chairman), Brendan Riley (President), Michael Sieffert (CFO, Secretary), and Yanyan Zhang (VP Program Management)[242][243] - Directors and senior management possess significant experience in the electric vehicle industry, corporate finance, and business development[244][245][246][247][248][249][250][251][252] - Claus Tritt, Vice President of Medium Duty and Commercial Vehicle Sales, resigned from GreenPower on April 18, 2025[243][252] - There are no family relationships between any of the directors and senior management[253] ITEM 6.B. Compensation This section details the compensation structure for GreenPower's management and directors, including salaries, bonuses, and stock option grants Management and Director Compensation (FY2025): | Name and Position | Year | Salary, Consulting Fee, Retainer or Commission ($) | Bonus ($) | Committee or Meeting Fees ($) | Value of All Other Compensation ($) | Total Compensation ($) | | :---------------------------- | :--- | :------------------------------------------------- | :-------- | :---------------------------- | :---------------------------------- | :--------------------- | | Fraser Atkinson (CEO, Chairman & Director) | 2025 | 450,000 | Nil | Nil | Nil | 450,000 | | Brendan Riley (President & Director) | 2025 | 350,000 | Nil | Nil | 2,000 | 352,000 | | Michael Sieffert (CFO & Secretary) | 2025 | 215,730 | Nil | Nil | 2,797 | 218,527 | | Mark Achtemichuk (Director) | 2025 | 26,250 | Nil | Nil | Nil | 26,250 | | Malcolm Clay (Director) | 2025 | 33,750 | Nil | Nil | Nil | 33,750 | | David Richardson (Director) | 2025 | 26,250 | Nil | Nil | Nil | 26,250 | | Sebastian Giordano (Director) | 2025 | 7,292 | Nil | Nil | Nil | 7,292 | | Cathy McLay (Director) | 2025 | 22,500 | Nil | Nil | Nil | 22,500 | | Yanyan Zhang (VP Program Management) | 2025 | 175,000 | Nil | Nil | 2,115 | 177,115 | | Claus Tritt (VP Medium Duty and Commercial Vehicle Sales) | 2025 | 150,020 | Nil | Nil | 115 | 150,135 | - Employment agreements for the CEO, President, and CFO include annual base fees (US$450,000, US$350,000, and CDN$300,000 respectively) and eligibility for cash bonuses and stock option grants[260][261][262] - On March 14, 2025, 800,000 stock options were granted to officers, directors, employees, and consultants with a five-year term and an exercise price of CDN$0.78 per share, vesting over four months to one year[225][226][267][268] - Claus Tritt's unvested stock options issued on March 14, 2025, expired upon his resignation on April 18, 2025[270] - The company has no contracts or arrangements providing benefits to directors or management upon termination of employment[266] ITEM 6.C. Board Practices This section describes GreenPower's board governance, including director terms, officer appointments, and the composition of its key committees - Directors hold office until the next annual general meeting, and officers are appointed at the discretion of the board of directors[272] - The company has a Nominating Committee, a Compensation Committee, and an Audit Committee[274] - All Audit Committee members (Malcolm Clay, Mark Achtemichuk, Sebastian Giordano) are independent and financially literate, with Malcolm Clay designated as an audit committee financial expert[277][278][440] - The Audit Committee reviews the performance of external auditors, approves non-audit services, and considers auditor independence[280] ITEM 6.D. Employees This section provides an overview of GreenPower's employee count, non-unionized workforce, and geographical distribution of its offices Employee Count (FY2023-FY2025): | Fiscal Year Ended March 31 | Number of Employees | | :------------------------- | :------------------ | | 2025 | 113 | | 2024 | 116 | | 2023 | 112 | - The company's employees are not members of a labor union[281] - The workforce is based out of corporate, sales, manufacturing, and service offices in Vancouver (Canada), Riverside (CA), Porterville (CA), and South Charleston (WV)[281] ITEM 6.E. Share Ownership This section details the share ownership of major shareholders and outlines the company's equity incentive plans for directors, officers, and employees Major Shareholders and Share Ownership (as of July 23, 2025): | Name and Office Held | Number of Common Shares Owned | % of Total Outstanding Common Shares | Common Shares that the individual has the right to acquire within 60 days (Stock Options) | | :---------------------------- | :---------------------------- | :----------------------------------- | :-------------------------------------------------------------------------------------- | | Fraser Atkinson (CEO, Chairman and Director) | 3,271,724 | 10.9% | 288,750 | | Brendan Riley (President and Director) | 81,716 | * | 288,750 | | Michael Sieffert (CFO and Secretary) | 23,587 | * | 288,750 | | Mark Achtemichuk (Director) | 82,078 | * | 193,750 | | Malcolm Clay (Director) | 605,915 | 2.0% | 193,750 | | Sebastian Giordano (Director) | * | * | 193,750 | | David Richardson (Director) | 2,873,097 | 9.6% | 193,750 | | Yanyan Zhang (VP Program Management) | 12,073 | * | 74,107 | | Claus Tritt (VP of Sales) | * | * | Nil | (* denotes less than 1% of class of shares owned) - The company has two incentive stock option plans (2023 and 2022 Equity Incentive Plans) for granting equity-based awards to directors, officers, employees, and consultants[288][289][290] - The 2022 Plan is a 'Rolling Plan' for options (up to 10% of outstanding shares) and a fixed-plan for Performance-Based Awards (up to 2,949,116 shares)[290] ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS This section identifies major shareholders, primarily Fraser Atkinson and David Richardson, and details significant related party transactions. These include loans from entities beneficially owned by the CEO and Chairman, personal guarantees for the company's line of credit, and recent term loan offerings with related party lenders involving warrants and common shares ITEM 7.A. Major Shareholders This section identifies GreenPower's major shareholders, Fraser Atkinson and David Richardson, detailing their respective ownership percentages Major Shareholders (as of July 8, 2025): | Name of Shareholder | Number of Common Shares Owned | % of Total Outstanding Common Shares | Common Shares that the individual has the right to acquire within 60 days (Stock Options) | | :------------------ | :---------------------------- | :----------------------------------- | :-------------------------------------------------------------------------------------- | | Fraser Atkinson | 3,271,724 | 10.9% | 288,750 | | David Richardson | 2,873,097 | 9.6% | 193,750 | - Fraser Atkinson's ownership includes direct holdings and shares held through various private companies he owns or controls[294] - David Richardson's ownership includes direct holdings and shares held indirectly through Countryman Investments Ltd[295] - The voting rights of major shareholders do not differ from the voting rights of other common share holders[295] ITEM 7.B. Related Party Transactions This section details GreenPower's related party transactions, including loans from entities controlled by the CEO and personal guarantees for the line of credit Related Party Compensation (FY2023-FY2025): | Category | FY2025 ($) | FY2024 ($) | FY2023 ($) | | :------------------------ | :--------- | :--------- | :--------- | | Salaries and Benefits | 551,410 | 562,160 | 580,774 | | Consulting fees | 566,042 | 541,623 | 396,250 | | Non-cash Options Vested | 632,493 | 874,321 | 2,100,717 | | Total | 1,749,945 | 1,978,104 | 3,077,741 | - As of March 31, 2025, $454,894 was owed to officers, directors, and companies controlled by officers and directors, which is non-interest bearing, unsecured, and has no fixed terms of repayment[300][575] - During FY2025, the company received loans totaling CAD$475,000 and US$250,000 from entities beneficially owned by the CEO and Chairman, bearing 12.0% interest[301][576] - Loans from FWP Holdings (beneficially owned by the CEO) with a principal balance of CAD$3,670,000 matured on March 31, 2023, but remain outstanding and are considered non-current liabilities due to a subordination agreement[301][576] - Fraser Atkinson (CEO) and David Richardson (Director) have each provided personal guarantees of $2,510,000, totaling $5,020,000, to support the company's operating line of credit[304][580] - Subsequent to FY2025, the company secured a $1.75 million term loan offering from related parties, involving the issuance of warrants and common shares as inducements[305][310][581] ITEM 8. FINANCIAL INFORMATION This section confirms the preparation of consolidated financial statements in accordance with IFRS, includes the auditor's report, and states that no significant changes have occurred since the financial statement date, other than those disclosed in the report ITEM 8.A. Consolidated Statements and Other Financial Information This section confirms the preparation of consolidated financial statements under IFRS and details ongoing legal proceedings and contingent liabilities - Consolidated financial statements for FY2023-2025 are prepared in accordance with International Financial Reporting Standards (IFRS) and audited by BDO Canada LLP[308] - The company has not paid any dividends on its common shares since incorporation and does not intend to declare or pay any cash dividends in the foreseeable future[312] - Ongoing legal proceedings include a civil claim against a prior CEO/Director and a claim from a customer following vehicle repossession due to non-payment[311][597][599] - As of March 31, 2025, a contingent liability of $310,000 was booked for potential legal judgments, with an additional potential liability of $437,500 related to other legal matters[311][600][601] ITEM 8.B. Significant Changes This section states that no significant changes have occurred since the financial statement date, beyond those already disclosed - No significant changes have occurred since the date of the consolidated financial statements, except as disclosed elsewhere in this Annual Report[313] ITEM 9. THE OFFER AND LISTING This section details the listing history of GreenPower's common shares on the TSX Venture Exchange and Nasdaq Capital Market. It also notes that sub-items regarding plan of distribution, selling shareholders, dilution, and expenses of the issue are not applicable ITEM 9.A. Offer and Listing This section outlines the listing history of GreenPower's common shares on the TSX Venture Exchange and Nasdaq Capital Market - GreenPower's common shares have been listed for trading on the TSX Venture Exchange under the symbol 'GPV' since December 30, 2014[314] - On August 28, 2020, the company's shares began trading on the Nasdaq Capital Market under the symbol 'GP' and ceased trading on the OTCQB[314] - Computershare Investor Services Inc. is the transfer agent for the common shares[315] ITEM 9.B. Plan of Distribution This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[316] ITEM 9.C. Markets This section refers to Item 9.A for information regarding markets - Information regarding markets is provided under Item 9.A.[317] ITEM 9.D. Selling Shareholders This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[318] ITEM 9.E. Dilution This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[319] ITEM 9.F. Expenses of the Issue This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[320] ITEM 10. ADDITIONAL INFORMATION This section provides supplementary information about GreenPower, including its corporate governance documents, share structure, borrowing powers, and details on Canadian exchange controls and taxation for U.S. residents. It also lists material contracts and subsidiary information ITEM 10.A. Share Capital This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[321] ITEM 10.B. Memorandum and Articles of Association This section details GreenPower's corporate governance, including share structure, voting rights, and directors' borrowing powers - GreenPower is incorporated under the Business Corporations Act (British Columbia) with an authorized capital of an unlimited number of common shares and preferred shares without par value[322][327] - Holders of common shares are entitled to one vote per share, dividends, and remaining property upon dissolution, with no call, assessment, pre-emptive, or conversion rights[328] - Preferred shares have preferential rights on liquidation but generally no voting rights, except for such rights relating to the election of directors on a default in payment of dividends[329][330] - Directors have broad powers to borrow money, issue debt obligations, and mortgage or charge company assets[325][331] - There is no mandatory retirement age for directors, and they are not required to own company securities[326] - The quorum for shareholder meetings is two persons representing at least 5% of issued voting shares, or one person if only one shareholder is entitled to vote[336] ITEM 10.C. Material Contracts This section states that no material contracts, beyond ordinary course business and employment agreements, have been entered into in the last two years - The company has not entered into any material contracts during the last two years, except for those in the ordinary course of business and employment/consulting agreements with directors and senior management[341] ITEM 10.D. Exchange Controls This section outlines Canadian exchange control regulations, including capital movement, remittances, and the Investment Canada Act's review thresholds - Canadian law does not restrict the export or import of capital, or the remittance of dividends, interest, or other payments to non-resident holders, other than withholding tax requirements[343] - The Investment Canada Act regulates non-Canadian acquisitions of Canadian businesses, with review thresholds varying based on the value of acquired assets and the investor's WTO status[346][349][350][351] - The Act includes national security provisions for investments deemed injurious to national security, which may trigger a review regardless of other thresholds[353] ITEM 10.E. Taxation This section details Canadian and U.S. tax implications for shareholders, including withholding taxes and potential Passive Foreign Investment Company (PFIC) status - Dividends paid to U.S. Holders are subject to Canadian withholding tax, generally 15%, or 5% for corporate beneficial owners holding at least 10% of voting stock, under the Canada-U.S. Tax Convention[359] - U.S. Holders are generally not subject to Canadian tax on capital gains from dispositions unless the security is 'taxable Canadian property' and they are not entitled to relief under the Tax Treaty[360] - The company may be classified as a 'passive foreign investment company' (PFIC) if 75% or more of its gross income is passive or 50% or more of its assets produce passive income[378] - PFIC status is determined annually and can significantly increase U.S. income tax on excess distributions and gains, with complex rules and potential burdensome reporting requirements[381][382][383][384] - U.S. Holders may be able to mitigate PFIC adverse effects through 'mark-to-market' or 'purging' elections, but the company does not intend to provide information for a 'qualified electing fund' election[386][390][391] - U.S. Holders are urged to consult their own tax advisors regarding the complex PFIC rules and other U.S. federal income tax considerations[393][402] ITEM 10.F. Dividends and Paying Agents This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[402] ITEM 10.G. Statement by Experts This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[403] ITEM 10.H. Documents on Display This section indicates where the Annual Report's referenced documents can be inspected and found online - Documents referred to in this Annual Report may be inspected at the company's offices in Vancouver, BC[404] - The company's filings can also be found on the SEC's Internet site at **http://www.sec.gov**[405](index=405&type=chunk) ITEM 10.I. Subsidiary Information This section lists GreenPower's wholly-owned subsidiaries across Canada, the United States, India, and China - GreenPower Motor Company Inc. has wholly-owned subsidiaries incorporated in Canada, the United States (Delaware, Utah, Nevada, West Virginia), India, and China[406][407][414] ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK GreenPower is exposed to credit risk (minimal for cash, assessed for receivables), liquidity risk (dependent on capital raising and cash flow from operations due to going concern uncertainty), interest rate risk (affecting line of credit and term loan), and foreign exchange risk (due to operations in US and Canada) - The company's exposure to credit risk is on its cash, accounts receivable, promissory note receivable, and finance lease receivables, with minimal risk for cash held in major financial institutions[408][409] - Liquidity risk is significant, as the company's continuation as a going concern is dependent on future cash flows from operations and obtaining necessary financing[410] Undiscounted Financial Commitments (as of March 31, 2025): | Category | Less than 3 months ($) | 3 to 12 months ($) | One to five years ($) | Thereafter ($) | | :------------------------------------- | :--------------------- | :----------------- | :-------------------- | :------------- | | Line of credit | 5,983,572 | - | - | - | | Accounts payable and accrued liabilities | 3,719,716 | - | - | - | | Loans payable to related parties | - | 1,334,720 | 2,849,325 | - | | Lease liabilities | 127,105 | 597,248 | 3,952,393 | 2,000,901 | | Term loan facility | - | 3,591,354 | - | - | | Other liabilities | - | - | 17,133 | - | | Total | 9,830,393 | 5,523,322 | 6,818,851 | 2,000,901 | - A 1% change in the base rate or prime rate applicable to the line of credit and term loan facility would result in a change of approximately $97,000 to comprehensive income/loss[412] - The company is exposed to foreign exchange risk, particularly with CDN dollars, and a 10% change in the CDN/USD exchange rate would result in a change of approximately $396,800 to comprehensive income/loss[415][416] ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[417] PART II ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES There have been no defaults with respect to dividends, arrearages, or delinquencies since the company's amalgamation on December 23, 2014 - There have been no defaults with respect to dividends, arrearages, or delinquencies since the amalgamation of Oakmont Minerals Corp. and GreenPower Motor Company Inc. on December 23, 2014[419] ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS There have been no material modifications to security holder rights since December 2014. The company raised $3.0 million in October 2024 and $2.3 million in May 2024 through common share and unit offerings, respectively, with proceeds used for production of electric vehicles, product development, and general corporate purposes - There have been no material modifications to the rights of security holders since the amalgamation on December 23, 2014[420] - In October 2024, the company issued 3,000,000 common shares in an underwritten offering for gross proceeds of $3,000,000, and also issued 150,000 warrants to the underwriter[422] - In May 2024, the company issued 1,500,000 units (common shares and warrants) in an underwritten offering for gross proceeds of $2,325,750[424] - Proceeds from ATM offerings in FY2023 and FY2024 were used for the production of all-electric vehicles (EV Star cab and chassis, EV Star cargo, EV Stars, and school buses), product development, and general corporate purposes[425] - A new 2025 ATM filing allows for the issuance of up to $850,000 of equity, with $97,964 raised subsequent to March 31, 2025[426] ITEM 15. CONTROLS AND PROCEDURES Management concluded that GreenPower's disclosure controls and procedures were not effective as of March 31, 2025, due to material weaknesses in internal control over financial reporting. These weaknesses include ineffective controls for inventory accounting, revenue recognition, complex/unusual transactions, and error prevention/detection. Remediation efforts are underway, involving external consultants and hiring additional accounting resources - Management determined that disclosure controls and procedures were not effective as of March 31, 2025, due to material weaknesses in internal control over financial reporting[428][432] - Material weaknesses include ineffective controls for inventory accounting (costing, existence, verification), revenue recognition (supporting documentation), complex/unusual transactions, and preventing/detecting accounting errors[432][436] - Remediation efforts include retaining an external financial controls consultant to review and enhance control design, and hiring additional qualified accounting resources[434][437] - This Annual Report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting[435] ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT Malcolm Clay has been designated as an audit committee financial expert, and all Audit Committee members (Malcolm Clay, Mark Achtemichuk, Sebastian Giordano) meet independence standards and are financially literate - Malcolm Clay qualifies as an audit committee financial expert pursuant to Items 16A(b) and (c) of Form 20-F[440] - All Audit Committee members meet the independence standards under Rule 10A-3 and are financially literate under applicable Canadian laws[440] ITEM 16B. CODE OF ETHICS GreenPower has adopted a Code of Ethics and Business Conduct that applies to all its directors, senior officers, and employees, meeting the requirements of Item 16B of Form 20-F - The company has adopted a Code of Ethics and Business Conduct that applies to all directors, senior officers, and employees, meeting the requirements for a 'code of ethics' in Item 16B of Form 20-F[441] ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES BDO Canada LLP served as the principal accountant for the audit of GreenPower's consolidated financial statements. Audit fees increased from $267,450 in FY2023 to $429,789 in FY2025. The Audit Committee pre-approves all audit and permissible non-audit services - BDO Canada LLP was the principal accountant for the audit of GreenPower's consolidated financial statements during the years ended March 31, 2025, 2024, and 2023[442] Principal Accountant Fees: | Fiscal Year Ended March 31 | Audit Fees ($) | Audit Related Fees ($) | Total ($) | | :------------------------- | :------------- | :--------------------- | :-------- | | 2025 | 429,789 | 18,618 | 448,407 | | 2024 | 361,211 | 57,276 | 418,487 | | 2023 | 267,450 | - | 267,450 | - The Audit Committee's policy is to pre-approve all audit and permissible non-audit services to be performed by the independent auditors[446] ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[447] ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[448] ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[449] ITEM 16G. CORPORATE GOVERNANCE This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[450] ITEM 16H. MINE SAFETY DISCLOSURE This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[451] ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[452] ITEM 16J. INSIDER TRADING POLICIES GreenPower has not adopted formal insider trading policies, as neither Nasdaq nor TSX Venture Exchange requires them - GreenPower has not adopted insider trading policies or procedures that govern the purchase, sale, and other dispositions of its securities by directors, senior management, and employees[453] - Neither the Nasdaq Stock Exchange nor the TSX Venture Exchange requires its listed companies to adopt an insider trading policy[453] ITEM 16K. CYBERSECURITY GreenPower has not adopted a formal cybersecurity policy due to its size and limited resources, but it employs measures like anti-virus software, cloud-based systems, and an IT supervisor. The company is not aware of any material cybersecurity incidents to date but acknowledges future risks - GreenPower has not adopted a formal cybersecurity policy due to its relatively small size and limited resources[454] - Cybersecurity risk management includes utilizing commercially available anti-virus software, cloud-based systems, and engaging a technical IT supervisor[454] - The company is not aware of any existing or previous cybersecurity incidents that have materially affected its business, strategy, operations, or financial condition, but acknowledges potential future risks[455] PART III ITEM 17. FINANCIAL STATEMENTS This item is explicitly noted as not applicable - This item is explicitly stated as 'Not applicable'[457] ITEM 18. FINANCIAL STATEMENTS This section presents GreenPower's consolidated financial statements for the years ended March 31, 2025, 2024, and 2023, prepared in accordance with IFRS and audited by BDO Canada LLP. It includes the statements of financial position, operations and comprehensive loss, changes in equity, cash flows, and extensive notes detailing accounting policies, estimates, and specific financial items Report of Independent Registered Public Accounting Firm This section presents the auditor's unqualified opinion on GreenPower's IFRS-compliant financial statements, highlighting going concern uncertainty - BDO Canada LLP issued an unqualified opinion on GreenPower's consolidated financial statements for the periods ended March 31, 2025, 2024, and 2023, confirming conformity with International Financial Reporting Standards (IFRS)[462] - The report highlights a 'Going Concern Uncertainty' due to recurring losses from operations and an accumulated deficit, raising substantial doubt about the company's ability to continue as a going concern[463] - The audit did not include an opinion on the effectiveness of the company's internal control over financial reporting[465] Consolidated Statements of Financial Position This section presents GreenPower's financial position, detailing assets, liabilities, and equity, with a shift to a shareholder's deficit in FY2025 Consolidated Statements of Financial Position (as of March 31): | Item | 2025 ($) | 2024 ($) | Annual Change ($) | | :------------------------ | :----------- | :----------- | :---------------- | | Cash | 344,244 | 1,150,891 | (806,647) | | Accounts receivable, net | 541,793 | 2,831,942 | (2,290,149) | | Inventory | 25,601,888 | 32,010,631 | (6,408,743) | | Current assets | 27,775,068 | 36,853,355 | (9,078,287) | | Finance lease receivables | 136,928 | 1,158,384 | (1,021,456) | | Right of use assets | 5,479,555 | 4,124,563 | 1,354,992 | | Property and equipment | 1,310,581 | 2,763,525 | (1,452,944) | | Total assets | 35,071,725 | 45,203,284 | (10,131,559) | | Line of credit | 5,983,572 | 7,463,206 | (1,479,634) | | Accounts payable and accrued liabilities | 3,719,716 | 2,977,251 | 742,465 | | Deferred revenue | 10,138,356 | 9,942,385 | 195,971 | | Loans payable to related parties | 4,184,045 | 2,432,180 | 1,751,865 | | Term loan facility | 3,591,354 | 2,267,897 | 1,323,457 | | Current liabilities | 19,668,259 | 21,291,590 | (1,623,331) | | Lease liabilities | 6,168,086 | 4,636,211 | 1,531,875 | | Contingent liability | 310,000 | 1,391,746 | (1,081,746) | | Warranty liability | 2,565,429 | 2,499,890 | 65,539 | | Total liabilities | 36,677,691 | 33,636,465 | 3,041,226 | | Shareholder's equity | (1,605,966) | 11,566,819 | (13,172,785) | - The company's shareholders' equity shifted from a positive $11.6 million in FY2024 to a deficit of $1.6 million in FY2025, primarily due to the accumulated deficit[209][469] - Inventory decreased by $6.4 million, and accounts receivable decreased by $2.3 million, reflecting sales of finished goods and collections[209] - Right of use assets increased by $1.35 million due to a new production facility lease in Riverside, CA, leading to a corresponding increase in lease liabilities[209] Consolidated Statements of Operations and Comprehensive Loss This section details GreenPower's operational performance, showing significant declines in revenue and gross profit, resulting in increased net losses Consolidated Statements of Operations and Comprehensive Loss (FY2023-FY2025): | Metric | FY2025 ($) | FY2024 ($) | FY2023 ($) | | :-------------------------------------------------------- | :----------- | :----------- | :----------- | | Revenue | 19,847,279 | 39,271,839 | 39,695,890 | | Cost of Sales | 17,650,661 | 33,914,237 | 32,445,836 | | Gross Profit | 2,196,618 | 5,357,602 | 7,250,054 | | Total sales, general and administrative costs | 20,116,132 | 22,159,977 | 20,535,280 | | Loss from operations before interest, accretion and foreign exchange | (17,919,514) | (16,802,375) | (13,285,226) | | Interest and accretion | (2,176,337) | (1,554,858) | (1,549,769) | | Other Income / loss | 1,391,746 | 306,288 | 72,867 | | Foreign exchange gain / (loss) | 40,657 | 131,416 | (30,897) | | Loss from operations for the year | (18,663,448) | (17,919,529) | (14,793,025) | | Write down of assets | - | (423,267) | (250,832) | | Loss for the year | (18,663,448) | (18,342,796) | (15,043,857) | | Total comprehensive loss for the period | (18,511,895) | (18,313,249) | (15,056,864) | | Loss per common share, basic and diluted | (0.68) | (0.74) | (0.64) | - Revenue decreased by 49.5% in FY2025, leading to a 59.0% decrease in gross profit, primarily due to fewer vehicle deliveries[180][182][470] - Total sales, general, and administrative costs decreased by 9.2% in FY2025, mainly due to reduced product development costs and a significant decrease in allowance for credit losses[179][189][203] - Interest and accretion expenses increased by 40.0% in FY2025, contributing to the higher overall loss[195][470] Consolidated Statements of Changes in Equity / (Deficit) This section outlines changes in GreenPower's equity, reflecting an increased accumulated deficit due to ongoing losses and capital raising activities Consolidated Statements of Changes in Equity / (Deficit) (FY2023-FY2025): | Item | March 31, 2025 ($) | March 31, 2024 ($) | March 31, 2023 ($) | | :---------------------------------- | :----------------- | :----------------- | :----------------- | | Balance, beginning of year | 11,566,819 | 27,662,006 | 34,385,193 | | Shares issued for cash | 4,967,645 | 520,892 | 4,895,826 | | Share issuance costs | (823,376) | (14,904) | (216,803) | | Warrants issued | 358,205 | - | - | | Warrant issuance costs | (60,832) | - | - | | Shares issued for exercise of options | - | 209,962 | 8,761 | | Fair value of stock options forfeited | (260,861) | (112,848) | (612,193) | | Share-based payments | 897,468 | 1,502,112 | 3,645,893 | | Cumulative translation reserve | 151,553 | 29,547 | (13,007) | | Net loss for the year | (18,663,448) | (18,342,796) | (15,043,857) | | Balance, end of year | (1,605,966) | 11,566,819 | 27,662,006 | - Accumulated deficit increased to $97.4 million in FY2025 from $79.0 million in FY2024, reflecting ongoing losses[471] - Share capital increased by $4.1 million in FY2025 due to new share and unit offerings, partially offset by issuance costs[471] - Share-based payments expense decreased significantly from $3.6 million in FY2023 to $0.9 million in FY2025[471] Consolidated Statements of Cash Flows This section presents GreenPower's cash flow activities, highlighting increased cash used in operations and cash generated from financing activities Consolidated Statements of Cash Flows (FY2023-FY2025): | Cash Flow Category | FY2025 ($) | FY2024 ($) | FY2023 ($) | | :-------------------------------------- | :----------- | :----------- | :----------- | | Cash flow (used in) operations | (5,988,173) | (1,132,248) | (14,757,939) | | Cash flow from (used in) investing | (83,172) | (761,533) | 303,191 | | Cash flow from financing | 5,100,272 | 2,323,833 | 8,189,280 | | Foreign exchange on cash | 164,426 | 120,437 | (22,452) | | Net (decrease) increase in cash | (806,647) | 550,489 | (6,287,920) | | Cash, end of period | 344,244 | 1,150,891 | 600,402 | - Cash flow used in operating activities increased to $6.0 million in FY2025 from $1.1 million in FY2024, primarily due to the net loss, despite positive contributions from changes in inventory and accounts receivable[231][472] - Cash flow from financing activities was $5.1 million in FY2025, driven by $5.3 million from common share and warrant issuances and $1.4 million from related party loans, partially offset by line of credit repayments[236][472] - Investing activities used $83,172 in FY2025, mainly for property, plant, and equipment purchases[234][472] Notes to the Consolidated Financial Statements This section provides detailed explanations of GreenPower's accounting policies, estimates, and specific financial items, including going concern uncertainty and related party transactions - The company's ability to continue as a going concern is subject to material uncertainty due to recurring losses and dependence on capital raising and cash flows from operations[476] - Revenue is recognized when customers obtain control of goods or services, with a significant financing component adjusted for when the period between consideration and recognition exceeds one year[487] - Inventory is valued at the lower of average cost and net realizable value, with a write-down of $530,675 in FY2025 included in Cost of Sales[494][522] - The company repossessed 6 vehicles under lease in FY2025 due to non-payment, derecognizing $971,226 in finance lease receivables and recording the vehicles in inventory[519][520] - Right of Use Assets increased due to a new lease for a Riverside, CA production facility, while lease liabilities reflect discounted future payments[523