Good morning and welcome to the GreenPower Motor Company Second Quarter Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would like now to turn the conference over to Mr. Michael Sieffert, Chief Financial Officer of GreenPower. Please go ahead.
Thank you. This is Michael Sieffert, the Chief Financial Officer of GreenPower Motor Company. I would like to welcome everyone to our call to discuss GreenPower's financial results for the three and six months ended September 30th, 2024, and to provide an update on GreenPower's operations and manufacturing. I'm here today with our Chief Executive Officer, Fraser Atkinson, and our President, Brendan Riley. During today's call, we may make comments or statements about our future expectations, plans, and prospects, which may constitute forward-looking statements for the purposes of the Safe Harbor Provisions under the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our quarterly interim results and MD&A filed on SEDAR+ and on EDGAR.
In addition, these forward-looking statements relate to the date on which they are made. We anticipate subsequent events and developments may cause the company's views to change. GreenPower disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Also, during the course of today's call, we may refer to certain non-IFRS financial measures. Reconciliation of these non-IFRS financial measures can be found in our MD&A. For additional information on the results of operations for the period ended September 30, 2024, you can access the financial statements and MD&A posted on GreenPower's website as well as on www.sedarplus.com or filed on EDGAR. I will now pass the call over to GreenPower CEO, Fraser Atkinson.
Thank you, Michael. I'm going to start with GreenPower's strategy in the recent election. We still don't know the extent of changes that will be made to federal programs. However, it's safe to say that it won't be the status quo. We are expecting changes with the EPA Clean School Bus Program and the $40,000 IRA tax credit, to name a few. The perception of many is that the change in the administration in the Senate doesn't bode well for the EV sector. While that might be true for some EV OEMs, that's not the case with GreenPower. For over a year, our strategy has been to be opportunistic with federal programs in the short term, but the longer-term focus has been on states that have put policies and plans in place to provide a cleaner, healthier ride for students through the deployment of electric school buses.
States like California and New York and regions like the Southwest. Many of these states have already indicated that they will continue to push for the electrification of school buses and commercial vehicles. GreenPower has over 300 live orders and qualified leads for our all-electric school buses and are well-positioned to add to these. Next, I want to give you a quick snapshot of our current quarter. Earlier today, we announced that we had shipped eight of our EV Star to WashU in St. Louis. There will be two more EV Star delivered to WashU for a total of 10, which is a follow-on order to the five EV Star that we delivered around two years ago. A great testament to our EV Star with the follow-on order.
Combined with the deliveries of nine Type D BEAST all-electric school buses, one Type A Nano BEAST, and two EV Star Passenger Vans in the first half of this quarter, we are close to surpassing the total number of vehicles delivered during the September 30th quarter. Lastly, we have talked recently about our tradable credits. California's Advanced Clean Truck Regulation, the EPA's Phase Three GHG Regulation, and NHTSA's Fuel Consumption Credit Program, along with other state-level mandates, each include credit trading programs that provide manufacturers enhanced compliance flexibility and the opportunity for reduced compliance costs through the acquisition of credits. Being a manufacturer of all-electric vehicles, GreenPower has no internal deficits and is thus positioned to credit trade every credit it generates. The medium- and heavy-duty, or as it's referred to, the MHD market is new.
According to the California Air Resources Board, only two trades have been completed to date, as opposed to the light-duty sector where companies like Tesla have been trading credits for years. In their most recent quarter, they reported revenue of $739 million. Close to 25% of Tesla's gross profit is due to the sale of their credits. GreenPower has generated hundreds of tradable credits and will continue to generate significant numbers of tradable credits. We have signed several NDAs with OEMs and have engaged a broker who is a seasoned veteran with trading credits with manufacturers of light-duty vehicles. So we are working on monetizing these credits. I'll now turn it over to Brendan to discuss our operations.
Thank you, Fraser. I'd like to remind the listeners on this call that our mantra at GreenPower is creating compelling EV products offered at compelling prices, all while generating a gross profit. This past quarter, we've been developing a path so that our products are made in a timely manner. We have added a new large-volume paint booth and have been busy doing a re-layout of our production floor, which has added space for more simultaneous school buses on the line. While you don't see it in our deliveries yet, we have been increasing the number of units on the factory floor. This increase in production, coupled with manufacturing process improvements, is expected to result in higher gross profit margins and cost reductions on a per-unit basis as the throughput improves.
Throughout the last quarter, we have held multiple job fairs that have yielded excellent production talent, and we have added all of these to our ranks. We have seen seasoned production staff graduate from BridgeValley College with certificates leveraging a program that we at GreenPower helped develop. Our goal is to increase production so that we are consistently building and shipping 20 units per month. Steady, measured growth, a foundation of GreenPower's model, is critical for maintaining quality throughout the production process. This has to be done profitably and efficiently, and here at GP, our goal is to lower production and material costs while increasing volume and maintaining quality. Now I'd like to hand it over to Michael to discuss financial highlights.
Thank you, Brendan. For the three months ended September 30th, 2024, GreenPower generated revenue of $5.3 million, which was a 78% increase over revenue generated in the first quarter. Our cost of sales for the quarter was $4.9 million, and we generated a gross profit of approximately $460,000, or 8.6% of revenues. Our revenue was generated from the sale of 11 BEAST Type D all-electric school buses, six EV Star Cargo Plus, and five EV Stars, as well as revenue from leases, from the sale of parts, and from our truck body division. Our lower-than-anticipated gross profit margin this quarter was primarily due to negative gross profit margins at the company's truck body division, and this was caused by lower throughput compared to prior periods in this division. Management expects gross profit margins to increase as throughput at the truck body division increases.
For the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023, our SG&A costs declined by $630,000, or 12.1%. The reduction in these expenses was primarily due to reductions in professional fees and share-based payments and salaries administration costs, as well as from recoveries and allowance for credit losses, and these were partially offset by increases in other expenses. We continued to utilize the EDC revolving credit facility during the quarter to fund production, and we finished the quarter with approximately $850,000 remaining in available liquidity on the facility. This facility, along with EDC letter of credit guarantees, continues to be an important source of capital for our company, and they allow us to fund investments and inventory over time. In October, we completed an underwritten offering of 3 million shares, raising gross proceeds of $3 million.
The net proceeds from this offering are intended for the production of all-electric vehicles, including our BEAST school buses and EV Star commercial vehicles, for product development, with the remainder, if any, for general corporate purposes. Finally, we continue to receive important and much-needed financial support from GreenPower's directors and officers during and after the quarter. I'll now pass the call back over to Fraser.
At this time, we'll open it up for any questions that our listeners have.
We will now begin the question-and-answer session. To ask a question, you may press star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. We will pause momentarily to assemble our roster. The first question comes from Mr. Tate Sullivan of the Maxim Group. Please go ahead.
Thank you. And to start, I'm looking at the October 28th press release with the update on the EPA funding for 50 electric school buses. What are the logistics of getting that funding? Does it go to the districts buying the buses? Is there any way to get that funding in the door before delivery of the buses, or is it still a work in progress or a negotiation, please?
Well, it's a state that we have a dealer in, and so the EPA contract is with the dealer, and our arrangement is with our dealer. So we're one step removed, if you will, from the EPA contract. And then as far as the timing of funding and so on, I think your characterization of work in process would be quite appropriate.
Okay. Understood. And can you update on the cab and chassis units and inventory? Are these still potentially going to a certain number of customers or a single customer? How should we look at that unit delivery opportunity going forward?
So we have a tranche of cab and chassis that we have put through for production of both Nano BEAST and our EV Star Mobility Plus or Mobility Access, which is the shuttle vehicle that uses a very similar build and body as our Type A Nano BEAST. So we are utilizing them for that purpose. And then with a number of the qualified leads that we have, and when we say qualified leads, we're talking about an order that is up to a point where we're sorting out infrastructure. We're getting the funding may already be in place for it, but there's other logistical issues or approvals required. So for some of those, these are also for Type A Nano BEAST, so we would need to increase production in order to fulfill.
Okay. And the tradable credit effort, and I mean, they're obvious. They're within. I mean, Tesla does a good job breaking them out in the growth and that revenue stream for Tesla. Have you seen other companies recognized, or would you be one of the few companies besides Tesla that could monetize this effort?
Well, to the best of our knowledge, and to give you context, there's 24 manufacturers that are listed by California for the medium and heavy-duty sales that would give rise to either a deficit or a credit that would potentially offset a deficit. And these include companies like Isuzu, Stellantis, Daimler, PACCAR, and so on. So some traditional, as well as a number of pure EV players. But in the medium and heavy-duty space, for all of those, we haven't encountered any that have disclosed either the purchase of tradable credits or the sale of tradable credits. But at the light-duty, not just Tesla, but Rivian has certainly they have made trades or have disclosed trades and reported them on their financials, just like Tesla. So the light-duty space is, I would characterize as fairly advanced. There's a market.
There's hundreds of millions of dollars trade on a quarterly basis, not even just an annual basis anymore. Whereas on the medium and heavy-duty, according to CARB, there have only ever been just two trades, and those were earlier this year for tradable credits.
Okay. Well, it sounds like a good opportunity. Thank you, Fraser.
This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Fraser Atkinson for any closing remarks.
In closing, as we stated earlier this fiscal year, we expected to see a step up in our deliveries each quarter. Halfway through our current quarter, we're close to surpassing the total deliveries in our most recent September 30th quarter. As you heard today, we're also making advancements with our manufacturing process in West Virginia. While there have been headwinds in the EV sector, we are uniquely positioned to take advantage of numerous opportunities in the medium and heavy-duty EV sector. Brendan, Michael, and I are available for any follow-up questions you might have. Thank you for your support. This ends today's call.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.