
Introduction MD&A Context and Standards This MD&A, prepared under IFRS and reported in US dollars, presents the Company's financial results for the year ended March 31, 2025, highlighting material information - The MD&A is dated July 30, 2025, and should be read in conjunction with the audited consolidated financial statements for the year ended March 31, 20251 - Financial results are reported in US dollars and prepared using accounting policies consistent with IFRS Accounting Standards1 - Information is considered material if it significantly impacts the market price or value of common shares, influences investment decisions, or alters the total mix of available information2 Cautionary Note Regarding Forward-Looking Information This MD&A includes forward-looking statements subject to inherent risks and uncertainties, cautioning against undue reliance as actual results may differ materially - Forward-looking statements are identified by terms such as 'believe', 'expect', 'intend', 'plan', and similar expressions4 - These statements are based on assumptions and subject to inherent risks and uncertainties, indicating that expectations or conclusions may not be accurate4 - Readers are cautioned against undue reliance on these statements, as risk factors could cause actual results to differ materially from projections4 Non-IFRS Measures and Other Supplementary Performance Metrics This section defines non-IFRS measures and supplementary metrics, provided to complement IFRS information but not as substitutes or isolated comparisons - Non-IFRS measures and supplementary performance metrics are not standardized by IFRS and may not be comparable to those reported by other companies5 - Adjusted EBITDA is defined as loss for the period/year, plus depreciation, interest and accretion, share-based payments, allowance/(recovery) for credit losses, and increase/(decrease) in warranty liability, plus taxes, used by management as a profitability indicator7 - Total Cash Expenses is defined as sales, general and administrative costs plus interest and accretion, plus/(less) foreign exchange loss/(gain), less depreciation, less share-based payments, less amortization of deferred financing fees, plus/(less) the decrease/(increase) in warranty liability, plus/(less) the (allowance)/recovery for credit losses, indicating cash expenses from operations8 - Vehicle Deliveries is a supplementary metric representing vehicles sold or leased to customers, with comparability potentially varying due to changing vehicle models9 Business Overview Description of Business GreenPower is an OEM designing, building, and distributing all-electric medium and heavy-duty vehicles with facilities in California and West Virginia, listed on TSX Venture and NASDAQ - GreenPower designs, builds, and distributes a full range of all-electric medium and heavy-duty vehicles, including transit buses, school buses, shuttles, cargo vans, and cab and chassis10 - The company utilizes a clean-sheet design for purpose-built, battery-powered, zero-emission vehicles, integrating global suppliers for key components10 - GreenPower operates primary facilities in southern California and a manufacturing facility in West Virginia, and is listed on TSX Venture Exchange and NASDAQ10 Operations In FY2025, GreenPower delivered 84 vehicles, saw a 49.5% revenue decline to $19.8 million, shifted sales to school buses, consolidated California operations, and accessed capital markets Vehicle Deliveries and Revenue (Year Ended March 31, 2025) | Metric | Value | | :--------------------- | :------------------- | | Total Vehicles Delivered | 84 | | Annual Revenue | $19.8 million | | Revenue Change (YoY) | -49.5% | - The sales mix is transitioning towards all-electric school buses, with 34 BEASTs and 2 Nano BEASTs delivered, and an anticipated shift to Nano BEASTs due to expected tariff-driven cost increases13 - GreenPower is reducing operating costs by consolidating California operations into a new Riverside facility, anticipating immediate rent reductions and future savings in transportation, travel, and administrative expenses16 - The Company completed two securities offerings and an ATM filing in March 2025 for up to $850,000 of equity through open market sales15 Trends No material trends, commitments, events, or uncertainties are expected to significantly affect the Company's business, financial condition, or operations beyond disclosed risk factors - No material trends, commitments, events, or uncertainties are expected to have a significant effect on the Company's business, financial condition, or results of operations, other than those disclosed under 'Risk Factors'18 Financial Performance - Annual Annual Results of Operations GreenPower's FY2025 revenue declined 49.5% to $19.8 million, yielding a $2.2 million gross profit (11.1% margin), with net losses persisting across all three years Annual Financial Highlights (Years Ended March 31) | Metric | 2025 ($) | 2024 ($) | 2023 ($) | | :--------------- | :----------- | :----------- | :----------- | | 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 | | Gross Profit % | 11.1% | 13.6% | 18.3% | | Net Loss | (18,663,448) | (18,342,796) | (15,043,857) | - FY2025 revenue decreased by 49.5% due to 138 fewer vehicle deliveries, primarily from no sales of EV Star CC's to Workhorse1924 - FY2024 revenue decreased by 1.1% due to 77 fewer vehicle deliveries, largely offset by sales of higher-priced vehicles like BEAST and Nano BEAST2025 - FY2023 revenue increased by 130.3% from the prior year, driven by significant vehicle deliveries including 226 EV Star CC's21 Comparison of Annual Results Annual results for FY2025, FY2024, and FY2023 show significant fluctuations in revenue, gross profit, and operating costs, with FY2025 net loss slightly increasing due to reduced gross profit Key Financial Metrics Comparison (Years Ended March 31) | Metric | 2025 ($) | 2024 ($) | 2023 ($) | 2025 to 2024 (%) | 2024 to 2023 (%) | | :---------------------------------------- | :----------- | :----------- | :----------- | :--------------- | :--------------- | | Revenue | 19,847,279 | 39,271,839 | 39,695,890 | -49.5% | -1.1% | | 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% | | Salaries and administration | 9,912,495 | 8,814,561 | 7,394,085 | 12.5% | 19.2% | | Product development costs | 1,339,200 | 1,811,472 | 2,090,338 | -26.1% | -13.3% | | Share-based payments | 897,468 | 1,502,112 | 3,645,893 | -40.3% | -58.8% | | Interest and accretion | 2,176,337 | 1,554,858 | 1,549,769 | 40.0% | 0.3% | | Other Income | 1,391,746 | 306,288 | 72,867 | 354.4% | 320.3% | | Loss for the year | (18,663,448) | (18,342,796) | (15,043,857) | 1.7% | 21.9% | | Loss per common share, basic and diluted | (0.68) | (0.74) | (0.64) | -8.1% | 15.6% | Change in Revenue Revenue significantly decreased in FY2025 due to fewer vehicle deliveries, particularly the absence of EV Star CC sales to Workhorse, following a slight decline in FY2024 - Revenue decreased by $19,424,560 (49.5%) in FY2025 compared to FY2024, primarily due to 138 fewer vehicle deliveries, specifically no sales of EV Star CC's to Workhorse24 - Revenue decreased by $424,051 (1.1%) in FY2024 compared to FY2023, resulting from 77 fewer vehicle deliveries, largely offset by sales of higher-priced vehicles like Type D BEAST and Type A Nano BEAST25 Change in Cost of Sales and Gross Profit and Gross Profit Margin Cost of sales decreased in FY2025, but gross profit declined significantly due to fewer deliveries, inventory writedowns, and underutilized production capacity, leading to a continuous drop in gross profit margin across all three years - Cost of sales decreased by $16,263,576 (48.0%) in FY2025, leading to a $3,160,984 (59.0%) decrease in gross profit, primarily due to 138 fewer vehicle deliveries, negative gross profit at GP Truck Body, an inventory writedown of $530,675, and low gross profit margin at GreenPower West Virginia26 - Cost of sales increased by $1,468,401 (4.5%) in FY2024, resulting in a $1,892,452 (26.1%) decrease in gross profit, despite 77 fewer vehicle deliveries, due to an $886,854 increase in inventory writedowns and overhead costs from the West Virginia facility operating below capacity27 - Gross profit margin declined from 18.3% in FY2023 to 13.6% in FY2024 and further to 11.1% in FY2025, primarily due to inventory writedowns, negative gross profit at GP Truck Body, and underutilized production capacity at GreenPower West Virginia28 Change in Salaries and Administration Salaries and administration expenses increased in both FY2025 and FY2024, driven by salary increases for existing employees and higher labor costs due to increased headcount, particularly in the West Virginia subsidiary - Salaries and administration expense increased by $1,097,934 (12.5%) in FY2025, driven by salary increases for existing employees and higher labor costs in the West Virginia subsidiary due to increased headcount29 - Salaries and administration expense increased by $1,420,476 (19.2%) in FY2024, due to salary increases for executive officers and existing employees, and an increase in total employees from 112 to 11629 Change in Depreciation Depreciation expense decreased in FY2025 due to reclassified leases and fully depreciated assets, contrasting with a significant increase in FY2024 from new property, plant, and equipment acquisitions - Depreciation expense decreased by $196,345 (10.6%) in FY2025, mainly due to reclassification of property leases to short-term leases with no depreciation and certain fixed assets becoming fully depreciated30 - Depreciation expense increased by $639,235 (52.4%) in FY2024, with approximately $210,000 from right-of-use assets and the remainder from new property, plant, and equipment acquisitions and transfers from inventory31 Change in Product Development Costs Product development costs declined in both FY2025 and FY2024, primarily due to reduced warranty accruals linked to lower sales and decreased expenses for vehicle parts and related development activities - Product development costs declined by $472,272 (26.1%) in FY2025, primarily due to a significant reduction in warranty accrual (linked to lower sales) and decreased vehicle parts and related development expenses32 - Product development costs declined by $278,866 (13.3%) in FY2024, mainly due to reduced vehicle parts and related expenses used in development activities and a small reduction in warranty accrual33 Change in Share-Based Payments Share-based payment expense significantly decreased in both FY2025 and FY2024, primarily due to lower recognized stock option expense and forfeited stock options in both periods - Share-based payment expense decreased by $604,644 (40.2%) in FY2025 and by $2,143,781 (58.8%) in FY2024, primarily due to lower stock option expense recognized and forfeited stock options in both periods3435 Change in Transportation Costs Transportation costs increased in FY2025 due to relocation expenses, contrasting with a decrease in FY2024 driven by reduced non-sales-related shipping activities - Transportation costs increased by $52,081 (24.5%) in FY2025, mainly due to additional non-sales-related transportation expenses incurred during the company's relocation to the Riverside facility36 - Transportation costs decreased by $112,510 (34.6%) in FY2024, due to a reduction in costs related to shipping vehicles for non-sales purposes37 Change in Interest and Accretion Interest and accretion expense increased significantly in FY2025 due to higher related party loan interest and increased line of credit utilization, while FY2024 saw only a slight increase - Interest and accretion expense increased by $621,479 (40.0%) in FY2025, primarily due to higher interest on related party loans and increased utilization of the line of credit facility38 - Interest and accretion expense increased slightly by $5,089 (0.3%) in FY2024, as a reduction in related party loan interest was largely offset by interest incurred on the term loan facility3839 Change in Other Income Other income in FY2025 primarily resulted from the derecognition of a contingent liability related to the dissolution of Lion Truck Body, contrasting with a non-cash gain from related party loans in FY2024 - Other income of $1,391,746 in FY2025 resulted from the derecognition of a contingent liability related to the dissolution of Lion Truck Body40 - Other income of $306,288 in FY2024 was a non-cash gain from loans from related parties40 Change in Office Expense Office expense decreased in FY2025 due to cost-saving initiatives and stabilized West Virginia operations, following a significant increase in FY2024 driven by inflation and full-year expenses for the West Virginia property - Office expense decreased by $350,960 (21.8%) in FY2025 due to cost-saving initiatives, reduced maintenance and utility expenses, and lower spending as the West Virginia office stabilized41 - Office expense increased by $686,991 (74.6%) in FY2024 due to general inflation in maintenance and utilities, and a full year of expense associated with the West Virginia property41 Change in Insurance Expense Insurance expense slightly increased in FY2025 due to higher premiums, following a decrease in FY2024 from reduced premiums - Insurance expense increased by $11,674 (0.7%) in FY2025 due to slightly higher premiums on renewed policies42 - Insurance expense decreased by $85,508 (4.7%) in FY2024 due to a reduction in premiums42 Change in Professional Fees Professional fees decreased in FY2025 due to reduced legal and other services, partially offset by a legal judgment accrual, following a significant increase in FY2024 from higher legal costs - Professional fees decreased by $253,000 (13.1%) in FY2025, mainly due to reduced legal fees and other professional services, partially offset by a $310,000 accrual for potential legal judgments43 - Professional fees increased by $448,844 (30.4%) in FY2024, primarily due to increased legal costs associated with general corporate matters and litigation43 Change in Sales and Marketing and Travel, Accommodation, Meals and Entertainment Sales and marketing expenses increased in FY2025 due to promotional activities, while travel-related expenses decreased due to fewer events and cost control, contrasting with general reductions in both categories in FY2024 - Sales and marketing expense increased by $336,346 (50.9%) in FY2025 due to greater investment in promotional activities, while travel-related expenses decreased by $201,420 (33.6%) due to fewer in-person events and cost control44 - Both sales and marketing expense and travel-related expenses decreased in FY2024 (by 19.2% and 19.9% respectively) due to a general reduction in the Company's attendance at trade shows and sales and marketing events45 Change in Other Costs The allowance for credit losses significantly decreased in FY2025 due to collections, following a substantial increase in FY2024 for overdue accounts, with foreign exchange fluctuations also impacting annual changes - 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 overdue customer accounts46 - The allowance for credit losses increased by $1,355,809 (1,424.9%) in FY2024, mainly due to allowances for accounts receivable and a promissory note from a single lease customer, and other accounts receivable over 90 days past due46 - Annual changes in foreign exchange gain/loss are caused by the Company's exposure to fluctuations in foreign currency exchange rates, particularly with CDN dollars46 Change in Write Down of Assets The Company recorded no asset writedowns in FY2025, contrasting with a $423,267 writedown in FY2024 from finance lease receivables with overdue payments - The Company had no write down of assets in FY202547 - In FY2024, the Company recorded a write down of assets of $423,267 from finance lease receivables with overdue lease payments47 Change in Loss for the Year and Loss per Common Share The net loss for FY2025 slightly increased due to reduced gross profit, while FY2024's net loss increased significantly from lower gross profit and higher SG&A, and FY2023's net loss saw a minor increase - The net loss for FY2025 increased by $320,652 (1.7%) compared to FY2024, primarily due to a $3,160,984 reduction in gross profit, partially offset by decreased SG&A costs and increased other income48 - The net loss for FY2024 increased by $3,298,939 (21.9%) compared to FY2023, mainly due to a $1,892,452 reduction in gross profit and increased SG&A costs, partially offset by reduced interest and accretion49 - The net loss for FY2023 increased by $33,937 (0.2%) compared to the prior year, as an increase in gross profit more than offset increases in SG&A and other expenses50 Financial Position Changes in Consolidated Statements of Financial Position As of March 31, 2025, total assets decreased by $10.1 million to $35.1 million, driven by reductions in cash, receivables, and inventory, while total liabilities increased by $3.0 million to $36.7 million, leading to a $(1.6) million shareholder's equity deficit Changes in Selected Financial Position Components (March 31, 2025 vs 2024) | Item | March 31, 2025 ($) | March 31, 2024 ($) | Annual Change ($) | | :---------------------------- | :----------------- | :----------------- | :---------------- | | Cash and restricted 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) | | 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 | | 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 | | Total liabilities | 36,677,691 | 33,636,465 | 3,041,226 | | Shareholder's equity | (1,605,966) | 11,566,819 | (13,172,785) | - The decrease in accounts receivable was due to collections and lower sales, while inventory reduction resulted from sales of finished goods, a writedown, and lower work in process52 - The increase in lease liabilities and right-of-use assets was due to a new lease for a production facility in Riverside, CA52 - Shareholder's equity decreased significantly due to an increase in accumulated deficit, partially offset by share capital increases from equity offerings and stock options52 Cash Flow Analysis Summary of Cash Flows GreenPower experienced a net decrease in cash and restricted cash of $806,647 in FY2025, reversing from a net increase in FY2024, with operating activities consistently using cash and financing activities providing cash across all three years Summary of Cash Flows (Years Ended March 31) | Cash Flow Category | 2025 ($) | 2024 ($) | 2023 ($) | | :---------------------------------- | :----------- | :----------- | :------------ | | 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) | Operating Activities Cash flow used in operating activities was $6.0 million in FY2025, driven by a net loss, partially offset by non-cash items and working capital changes, following similar patterns in FY2024 and FY2023 - Cash flow used in operating activities was $6.0 million in FY2025, stemming from a $18.7 million net loss, partially offset by $1.8 million in non-cash items and cash generated from inventory ($7.9 million) and accounts receivable ($2.3 million)54 - Cash flow used in operating activities was $1.1 million in FY2024, from an $18.3 million net loss, offset by $6.6 million in non-cash items and cash generated from inventory ($8.8 million) and accounts receivable ($6.3 million)55 - Cash flow used in operating activities was $14.8 million in FY2023, from a $15.0 million net loss, offset by $5.5 million in non-cash items, but impacted by investments in inventory ($8.9 million) and accounts receivable ($7.3 million)56 Investing Activities Cash flow used in investing activities significantly decreased to $83,172 in FY2025, primarily for property, plant, and equipment, a substantial reduction from $761,533 used in FY2024, while FY2023 generated cash from property disposal - Cash flow used in investing activities was $83,172 in FY2025, resulting from $72,892 investments in property, plant, and equipment57 - Cash flow used in investing activities was $761,533 in FY2024, including a $400,000 restricted deposit for a surety bond and $361,533 for property, plant, and equipment57 - Cash flow from investing activities was $303,191 in FY2023, driven by $874,184 in proceeds from property disposal, offset by $355,993 in PPE purchases and a $215,000 cash investment in Lion Truck Body acquisition58 Financing Activities Cash flow from financing activities was $5.1 million in FY2025, primarily from common share issuances and related party loans, partially offset by line of credit repayments, following similar capital generation in FY2024 and FY2023 - Cash flow from financing activities was $5.1 million in FY2025, including $5.3 million from common share issuance and $1.4 million from related party loans, offset by $1.5 million line of credit repayment and $0.9 million equity issuance costs59 - Cash flow from financing activities was $2.3 million in FY2024, including $0.5 million from ATM share issuance, $0.85 million line of credit draw, and $2.2 million term loan facility draw, partially offset by related party loan repayments60 - Cash flow from financing activities was $8.2 million in FY2023, including $4.9 million from ATM share issuance, $3.0 million from related party loans, and $0.85 million line of credit draw61 Financial Performance - Quarterly Quarterly Results Overview GreenPower's FY2025 quarterly revenues peaked at $7.2 million in Q3, driven by school bus deliveries, while losses decreased towards Q4 due to lower SG&A and other income, contrasting with FY2024's Q1 revenue peak of $17.6 million from EV Star CC sales Selected Quarterly Financial Results | Metric | Mar 31, 2025 ($) | Dec 31, 2024 ($) | Sep 30, 2024 ($) | Jun 30, 2024 ($) | | :-------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Revenues | 4,284,134 | 7,218,897 | 5,347,190 | 2,997,058 | | Loss for the period | (3,833,914) | (4,739,022) | (4,701,864) | (5,388,648) | | Basic and diluted EPS | (0.13) | (0.17) | (0.18) | (0.21) | | | | | | | | Metric | Mar 31, 2024 ($) | Dec 31, 2023 ($) | Sep 30, 2023 ($) | Jun 30, 2023 ($) | | :-------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Revenues | 5,092,890 | 8,157,931 | 8,440,010 | 17,581,008 | | Loss for the period | (6,631,577) | (4,641,720) | (4,257,643) | (2,811,856) | | Basic and diluted EPS | (0.27) | (0.19) | (0.17) | (0.11) | - FY2025 quarterly revenues peaked in Q3 (December 31, 2024) at $7.2 million due to 28 vehicle deliveries, including 14 BEAST and Nano BEAST school buses67 - FY2025 quarterly losses reduced from $5.4 million in Q1 to $3.8 million in Q4, driven by lower SG&A expenses and a $1.4 million other income from contingent liability derecognition67 - FY2024 quarterly revenues peaked in Q1 (June 30, 2023) at $17.6 million, largely due to 131 vehicle deliveries, including 95 EV Star CC's to Workhorse, then declined in subsequent quarters68 Vehicle Deliveries GreenPower's FY2025 vehicle deliveries totaled 84, a significant decrease from 222 in FY2024, primarily due to the absence of EV Star CC sales to Workhorse in FY2025 Quarterly Vehicle Deliveries | Vehicle Type | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :---------------------------- | :----------- | :----------- | :----------- | :----------- | | EV Star | 14 | 14 | 11 | 9 | | EV Star CC's Sold to Workhorse | 0 | 0 | 0 | 0 | | Nano BEAST and BEAST school bus | 8 | 14 | 11 | 3 | | Total Vehicle Deliveries | 22 | 28 | 22 | 12 | | | | | | | | Vehicle Type | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | | :---------------------------- | :----------- | :----------- | :----------- | :----------- | | EV Star | 12 | 19 | 15 | 28 | | EV Star CC's Sold to Workhorse | 10 | 0 | 0 | 95 | | Nano BEAST and BEAST school bus | 4 | 13 | 16 | 8 | | EV 250 | 0 | 2 | 0 | 0 | | Total Vehicle Deliveries | 26 | 34 | 31 | 131 | - Total vehicle deliveries for the year ended March 31, 2025, were 84, a decrease from 222 in the prior year69 - The absence of EV Star CC sales to Workhorse in FY2025 significantly impacted total deliveries compared to FY2024, which included 95 EV Star CC's in Q169 Total Cash Expenses (Non-IFRS) Total Cash Expenses, a non-IFRS measure, fluctuated quarterly, ranging from $4.49 million to $5.35 million in FY2025 and $3.89 million to $5.06 million in FY2024, providing insight into cash operating costs Quarterly Total Cash Expenses | Item | Mar 31, 2025 ($) | Dec 31, 2024 ($) | Sep 30, 2024 ($) | Jun 30, 2024 ($) | | :------------------------ | :--------------- | :--------------- | :--------------- | :--------------- | | Total Cash Expenses | 5,351,700 | 4,844,550 | 4,485,669 | 4,957,050 | | | | | | | | Item | Mar 31, 2024 ($) | Dec 31, 2023 ($) | Sep 30, 2023 ($) | Jun 30, 2023 ($) | | :------------------------ | :--------------- | :--------------- | :--------------- | :--------------- | | Total Cash Expenses | 5,061,691 | 4,942,909 | 4,454,540 | 3,890,606 | - Total Cash Expenses for the three months ended March 31, 2025, was $5,351,700, an increase from $4,957,050 in the quarter ended June 30, 202471 - Total Cash Expenses for the three months ended March 31, 2024, was $5,061,691, an increase from $3,890,606 in the quarter ended June 30, 202371 Adjusted EBITDA (Non-IFRS) Adjusted EBITDA, a non-IFRS profitability measure, remained negative across all reported quarters, ranging from $(2.98) million to $(4.21) million in FY2025 and $(0.82) million to $(4.10) million in FY2024 Quarterly Adjusted EBITDA | Item | Mar 31, 2025 ($) | Dec 31, 2024 ($) | Sep 30, 2024 ($) | Jun 30, 2024 ($) | | :-------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Adjusted EBITDA | (2,980,120) | (3,228,153) | (3,453,562) | (4,212,433) | | | | | | | | Item | Mar 31, 2024 ($) | Dec 31, 2023 ($) | Sep 30, 2023 ($) | Jun 30, 2023 ($) | | :-------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Adjusted EBITDA | (4,104,630) | (3,245,353) | (2,937,726) | (821,879) | - Adjusted EBITDA for the three months ended March 31, 2025, was $(2,980,120), showing an improvement from $(4,212,433) in the quarter ended June 30, 202472 - Adjusted EBITDA for the three months ended March 31, 2024, was $(4,104,630), a significant decline from $(821,879) in the quarter ended June 30, 202372 Liquidity and Capital Resources Liquidity Overview As of March 31, 2025, GreenPower had a cash balance of $344,244 and working capital of $8,106,809, utilizing a $6 million line of credit and a $5 million term loan, with its going concern status subject to material uncertainty Liquidity Position (March 31, 2025) | Metric | Amount ($) | | :--------------- | :--------- | | Cash Balance | 344,244 | | Working Capital | 8,106,809 | | Line of Credit (drawn) | 5,983,572 | | Term Loan Facility | Up to 5 million | - The Company's ability to continue as a going concern is subject to material uncertainty, necessitating reliance on additional financings and inventory sales76 Capital Resources (Offerings, Loans, Warrants) GreenPower raised capital through an October 2024 offering of 3 million common shares for $3 million, a May 2024 unit offering for $2.3 million, $1.75 million in related party loans, and subsequent ATM sales, issuing warrants and common shares as inducements - In October 2024, the Company issued 3,000,000 common shares for gross proceeds of $3,000,000 and 150,000 warrants to the underwriter77 - In May 2024, a unit offering generated gross proceeds of $2,325,750 from 1,500,000 common shares and warrants to purchase 1,575,000 common shares78 - The Company received $1.75 million in related party loans, issuing 1,086,956 warrants (at $0.46), 909,090 warrants (at $0.44), 304,878 warrants (at $0.41), 263,157 warrants (at $0.38), and 295,422 common shares as inducements7994 - Subsequent to March 31, 2025, the Company sold 216,007 common shares under the 2025 ATM for gross proceeds of $97,964798182 At the Market Offering (ATM) GreenPower established a $850,000 2025 ATM on March 7, 2025, with 216,007 shares sold for $97,964 post-year-end, following the expiration of the $20 million 2022 ATM in November 2023 - On March 7, 2025, the Company filed for a 2025 ATM to sell up to $850,000 of common shares on NASDAQ82 - No shares were sold under the 2025 ATM during the year ended March 31, 2025; however, 216,007 common shares were sold for $97,964 subsequent to year-end82 - The 2022 ATM, which allowed for up to $20,000,000, expired in November 2023, with 188,819 common shares sold in FY2024 for gross proceeds of $520,8928384 Stock Option Plans GreenPower operates under the 2023 Plan (limit 2,467,595 shares) and the 2022 Equity Incentive Plan (rolling 10% options, fixed 2,949,116 shares for awards), with 2,582,628 stock options and 1,725,000 warrants outstanding as of March 31, 2025 - The 2023 Plan, approved in March 2023, allows for incentive and nonqualified stock options and non-stock option awards, with an aggregate limit of 2,467,595 shares85 - The 2022 Plan, ratified in May 2025, 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), replacing the 2019 Plan87 Stock Options and Warrants Outstanding (March 31, 2025) | Item | Balance March 31, 2025 | | :-------------------- | :--------------------- | | Stock Options Outstanding | 2,582,628 | | Warrants Outstanding | 1,725,000 | - During FY2025, 800,000 options were granted, and 710,033 options were forfeited or expired, with share-based compensation expense totaling $897,4689091 Related Party Transactions Compensation and Payables Total compensation for directors, officers, and key management decreased to $1,749,945 in FY2025, primarily due to reduced non-cash options, while accounts payable to related parties significantly increased to $454,894 Related Party Compensation Summary | Compensation Type | March 31, 2025 ($) | March 31, 2024 ($) | March 31, 2023 ($) | | :-------------------- | :----------------- | :----------------- | :----------------- | | 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 | - Accounts payable and accrued liabilities owed to officers, directors, and related companies increased from $105,676 in FY2024 to $454,894 in FY2025, which are non-interest bearing, unsecured, and have no fixed repayment terms98 Related Party Loans and Guarantees In FY2025, GreenPower received new related party loans totaling CAD $475,000 and USD $250,000, bearing 12.0% interest, with existing loans remaining outstanding and CEO/director providing $5,020,000 in personal guarantees for the operating line of credit - In FY2025, the Company received new loans totaling CAD $475,000 from FWP Holdings, USD $250,000 from Koko, and CAD $675,000 from 0851433 BC Ltd., all related parties, bearing 12.0% interest99 - Loans from FWP Holdings totaling CAD $3,670,000 remained outstanding and are subordinated to senior lenders, resulting in a non-cash gain of $306,288 in FY2024 due to revaluation99102 - Subsequent to March 31, 2025, the Company announced a $2 million term loan offering from related parties, with $1.5 million already advanced in tranches, involving the issuance of warrants and common shares as inducements106107110 - The Company's CEO and Chairman, Fraser Atkinson, and director David Richardson, have each provided personal guarantees of $2,510,000, totaling $5,020,000, to support the Company's operating line of credit105 Accounting Policies and Controls New and Amended Standards GreenPower reviewed new accounting standards effective January 1, 2025, finding no impact on financial statements, and is evaluating future pronouncements, including IFRS 7, IFRS 9, IFRS 18, and IFRS 19, effective in 2026 or 2027 - New accounting standards effective January 1, 2025 (e.g., IAS 21), did not cause a change to the Company's financial statements108 Future Accounting Pronouncements | Mandatorily Effective Date | Standard/Amendment | | :------------------------- | :------------------------------------------------------ | | January 1, 2025 | IAS 21 - The effect of changes in Foreign Exchange Rates | | January 1, 2026 | IFRS 7 and IFRS 9 - Amendments to Classification and Measurement of Financial Instruments | | January 1, 2026 | IFRS 1, IFRS 7, IFRS 9, IFRS 10, IAS 7 - Annual improvements to IFRS accounting standards | | January 1, 2026 | IFRS 7 and IFRS 9 - Contracts referencing nature-dependent electricity | | January 1, 2027 | IFRS 19 - Subsidiaries without Public Disclosures | | January 1, 2027 | IFRS 18 - Presentation and Disclosure in Financial Statements | - The Company has not early adopted any new standards and is evaluating their potential impact on consolidated financial statements109 Internal Controls over Financial Reporting As of March 31, 2025, GreenPower's management concluded that internal controls over financial reporting were ineffective due to material weaknesses in inventory, revenue, and complex transactions, with remediation efforts underway - As of March 31, 2025, the CEO and CFO determined that disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting112 - Management concluded that the Company did not maintain effective internal control over financial reporting as of March 31, 2025, based on the COSO framework116 - Material weaknesses identified include ineffective controls for inventory accounting (costing, existence, verification), revenue recognition (supporting documentation), complex/unusual transactions, and preventing/detecting accounting errors123 - Remediation efforts include retaining an external financial controls consultant to review and enhance control design and implementation, and hiring additional qualified accounting resources124 Critical Accounting Estimates and Judgements GreenPower's financial statements require critical judgments on functional currency, going concern, contingent liabilities, and related party loan classification, alongside key estimates for leases, warranties, legal provisions, doubtful accounts, inventory, and deferred taxes - Critical accounting judgments include determining functional currency, assessing going concern ability, derecognizing contingent liability from Lion Truck Body dissolution, and classifying related party loans as non-current128 - Critical accounting estimates and assumptions include discount rates for leases, warranty provision accrual rates, classification of leases, provision for potential legal judgments ($310,000), allowance for doubtful accounts, useful life of equipment, net realizable value of inventory, government vouchers, West Virginia lease valuation, deferred income taxes, and overhead allocation to inventory128 - Revisions to critical accounting estimates are recognized in the period the estimate is revised and future periods if applicable125 Financial Instruments and Risk Management GreenPower's financial instruments expose it to credit risk on receivables ($563,153 allowance), significant liquidity risk impacting going concern, and market risk from interest rates and foreign exchange, with a 10% CAD/USD change potentially impacting comprehensive income by $396,800 - The Company's financial instruments include cash, accounts receivable, promissory note receivable, finance lease receivables, line of credit, loans payable to related parties, term loan, accounts payable and accrued liabilities, other liabilities, and lease liabilities129 - Credit risk exposure is on cash and receivables, with the allowance for doubtful accounts at $563,153 as of March 31, 2025, a decrease from $1,459,243 in the prior year132133 - Liquidity risk is high, with the Company's continuation as a going concern dependent on future cash flows from operations and obtaining necessary financing134 - Market risk includes interest rate risk on the line of credit and foreign exchange risk from CDN dollar assets and liabilities, where a 10% change in the CAD/USD exchange rate could result in an approximate $396,800 change to comprehensive income/loss136138 Undiscounted Financial Commitments by Maturity (March 31, 2025) | March 31, 2025 | Less than 3 months ($) | 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 | Outlook GreenPower's outlook focuses on completing production and delivery of EV Stars and BEAST school buses, delivering finished goods, exploring new financing, and implementing cost reduction and tariff mitigation strategies - The Company intends to complete production and delivery of EV Stars and BEAST school buses and deliver remaining finished goods inventory139 - GreenPower plans to evaluate and consider new sources of financing to fund the business and search for ways to reduce operational costs139 - The Company will evaluate the impact of tariffs on its business and product lines and develop mitigation strategies140 Capitalization and Outstanding Security Data As of March 31, 2025, GreenPower had 29,491,162 common shares, 2,582,628 stock options, and 1,725,000 warrants outstanding, with subsequent changes by July 30, 2025, increasing shares and warrants while decreasing options Outstanding Security Data | Security Type | As of March 31, 2025 | As of July 30, 2025 | | :------------------------ | :------------------- | :------------------ | | Common Shares Issued & Outstanding | 29,491,162 | 30,002,591 | | Preferred Shares | 0 | 0 | | Stock Options Outstanding | 2,582,628 | 2,458,000 | | Common Share Warrants Outstanding | 1,725,000 | 4,289,081 | Risk Factors Operational Risks GreenPower faces inherent operational risks including losses from inadequate internal processes, human error, system failures, misconduct, product liability, regulatory non-compliance, and business disruptions across all activities - Operational risks include losses from inadequate or failed internal processes, people, and systems, encompassing fiduciary breaches, product liability, regulatory failures, legal disputes, business disruption, and technology failures144 - Risks also include misconduct, theft, fraud by employees or others, unauthorized transactions, and insufficient staffing, which could materially adversely affect the Company144 Management and Competition Risks The Company's success is highly dependent on its key personnel, and it operates in a competitive market for all-electric medium and heavy-duty vehicles, facing well-capitalized existing competitors and potential new entrants - The Company's success is dependent on the efforts and abilities of its directors, officers, and employees, and the loss of any could have a material adverse effect145 - GreenPower faces competition from existing manufacturers of all-electric and traditional medium/heavy-duty vehicles, including well-capitalized public and private companies, with potential for new market entrants146 Supply Chain and External Factor Risks GreenPower faces supply chain risks from reliance on global, often single-source, suppliers, increased costs and delays from tariffs, and uncertainties regarding the availability and timing of crucial government grants and subsidies - Reliance on key suppliers, some single-source, poses risks of production delays if additional or alternate sources for components cannot be secured in a timely manner147 - Increased tariffs on imported electric vehicles and components, coupled with lack of clarity, have raised costs and caused delays, negatively impacting financial results149 - The ability of purchasers to receive government grants and subsidies, which offset higher EV prices, is subject to funding approval and timely disbursement, and any delays or cancellations could materially affect the business150 - Volatility in shipping costs and delays in global shipping for vehicles and components could negatively impact financial results and business growth155 Legal and Regulatory Risks GreenPower is involved in legal proceedings with a $310,000 contingent liability for potential judgments, faces evolving regulatory compliance and cybersecurity risks, and actual warranty expenses may differ materially from estimates - The Company is involved in civil claims against a prior CEO and a former employee, and a claim from a lease customer, with no resolutions as of March 31, 2025151 - A contingent liability of $310,000 has been booked for potential legal judgments, with an additional potential liability of $437,500 not provisioned as management considers successful defense probable151 - Compliance with local regulatory and safety requirements is crucial, and changes in these requirements could become more onerous152 - Cybersecurity risks, including system failures or data breaches, could adversely affect the business, despite no incidents to date153 - Actual warranty expenses may differ materially from management's estimates, potentially negatively impacting financial results and position154 Events After the Reporting Period Subsequent to March 31, 2025, GreenPower saw 124,628 stock options forfeited, repaid $200,000 in advances, received $1.75 million in new related party loans with warrants and shares as inducements, obtained a $125,000 short-term loan, and sold 216,007 common shares for $97,964 under the 2025 ATM - Between April 1, 2025, and July 30, 2025, 124,628 stock options with a weighted average exercise price of CDN $3.24 were forfeited156 - Between May 21, 2025, and June 4, 2025, the Company repaid $50,000 and CAD $50,000 advances from FWP Acquisition and a $150,000 advance from Koko156 - Between May 15, 2025, and July 4, 2025, the Company received $1.75 million in loans from related parties (Countryman, Koko, FWP Acquisition, FWP Holdings), issuing 1,086,956 warrants ($0.46), 909,090 warrants ($0.44), 263,157 warrants ($0.38), 304,878 warrants ($0.41), and 234,447 common shares as inducements156 - On July 21, 2025, the Company received a short-term loan of $125,000 from Countryman, intended for repayment within 30 days156 - Subsequent to March 31, 2025, the Company sold 216,007 common shares under the 2025 ATM for gross proceeds of $97,964156