Good morning, and welcome to the GreenPower Motor Company third 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 now like to turn the conference over to Michael Sieffert, Chief Financial Officer. 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 period ended December 31, 2022. 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 future expectations, plans and prospects, which may constitute forward-looking statements for the purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our quarterly interim results and MD&A filed on SEDAR and on EDGAR. In addition, these forward-looking statements relate to the date on which they're made.
We anticipate that 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 measures can be found in our MD&A filed on SEDAR and on EDGAR, and is also located on our website at www.greenpowermotor.com. I'll now pass the call over to GreenPower CEO, Fraser Atkinson.
Thank you, Michael. This was a record-setting quarter for GreenPower. We generated record revenues of $12.8 million in the third quarter, a year-over-year increase of 140% over the revenue of $5.3 million for the third quarter in the previous year. We delivered 101 GreenPower vehicles in the third quarter. With our extensive inventory, the deliveries this quarter are on track to exceed the third quarter. We reported deferred revenue of $12.5 million at the end of the third quarter, an increase of more than 92% from the beginning of the fiscal year. The majority of this we expect to recognize over the next 12 months, further accelerating our revenue growth. One of GreenPower's strengths and competitive advantage is that we have our own cabin chassis, and we manage our supply chain.
We refer to the EV Star Cab & Chassis or CC as our EV Star platform, which has allowed us to build a range of models for the passenger and cargo markets, as well as sell our CC to other manufacturers. Our commercial vehicle group have the EV Star Cargo, EV Star Cargo Plus, and CC. EV Star and EV Star Passengers are for the shuttle and transit sector. These represented the majority of the sales this quarter. Another model utilized in the EV Star platform is GreenPower's Nano BEAST Type A all-electric purpose-built school bus with an all-aluminum body that is stronger than any other body used for the Type A school buses on the market today. In September, GreenPower's Nano BEAST won the Innovation Award for Best Green Bus Technology from School Transportation News. This market for all of the Type A school buses is 8,000-9,000 per annum.
We are well-positioned to help operators electrify their school bus fleets with our BEAST and Nano BEAST, and are presently working on more than 30 school bus deals in eight states where our first deliveries will utilize our current inventory. During the quarter, the EPA announced the selectees for the school bus program with almost $1 billion of funding. GreenPower worked with dealers and school districts across a number of states who were selected to acquire the Type D for $375,000, or Type A school bus for $285,000. These deliveries must be completed by October thirty-first, 2024. GreenPower also has a significant number of opportunities for our all electric school buses in California, utilizing the Standard HVIP vouchers, which has $250 million of new funding this year.
School bus set aside funding with $135 million, as well as the CEC Air Quality Management District and VW Trust funding for the purchase of all-electric school buses. These school bus sales will help further accelerate our growth with deliveries commencing over the next couple of quarters. I'll now hand it over to Brendan Riley, GreenPower's President, for discussion on our operations.
Thank you, Fraser. Good morning everyone on the call. At GreenPower, we continue to demonstrate our winning strategy that focuses on our core business, purpose-built Class 4 EVs, leveraging our best in market EV Star family of vehicle and our best in class school buses.
We delivered 84 EV Star Cab & Chassis to Workhorse during the third quarter as we continue to optimize the run rate of deliveries to them. We are currently in the process of delivering an additional tranche of EV Star CCs to Workhorse. Our dealer network has been growing nationally during the quarter for both commercial vehicles and school buses. This reflects the tireless work of our school bus VP, Michael Perez, and that we've added recently Claus Tritt to head our commercial vehicle group product and sales efforts. Claus has many years of experience in deploying proven sales strategies and building winning sales teams for the light and medium-duty commercial vehicle sector. Claus is also completing the full integration of selling the Lion Truck Body components and bodies nationally through our dealer and direct sales network.
Our new refrigerated EV Star Cargo Plus has been completed, and this is the first of its kind vehicle to run the refrigeration system directly from the high voltage battery. This creates a more efficient vehicle which saves cost and weight while improving reliability. This newest member of the GreenPower product line is also eligible for the $40,000 IRS tax credit, as are all of GreenPower EV products. With this new deduction that is part of the Biden administration Inflation Reduction Act, many of our zero emission vehicles can now be bought across the country at price parity with legacy polluting internal combustion vehicles. Our West Virginia facility in South Charleston, West Virginia is almost ready to produce our BEAST. That's our battery electric Type D school bus.
Over the next months, we expect to manufacture the first built in West Virginia buses, ready to bring children to school safely and without polluting the environment. In September, GreenPower began a pilot project with the state of West Virginia to demonstrate our Type D school buses to districts across the state and test the buses in a wide range of conditions. West Virginia purchased 3 BEASTs, those are the Type D school buses, in the second quarter. In November, the pilot project started the second round with a slate of new districts, along with a Nano BEAST Type A school bus that was purchased in the third quarter. In January, we launched the third round, bringing the total coverage to 25% of all of the school districts in the state. We have demonstrated that our buses can work throughout the state in different regions, different temperatures.
This pilot project has also given us valuable data on where we can improve our vehicles for a myriad of customers and applications. I'd like to turn it back over to Michael Sieffert, GreenPower CFO, who will cover the quarterly financial highlights.
Thank you, Brendan. GreenPower achieved its highest ever quarterly revenue of $12.8 million, which is an increase of 140 over the revenue of $5.3 million from the third quarter of last year. Revenue was generated from the sale of one Nano BEAST, 10 EV Star 22-foot cargo, five EV Stars, and 85 EV Star Cab & Chassis. It was also from recognition of revenue under finance and operating leases and from our truck body manufacturing business line, Lion Truck Body. Cost of revenues in the quarter was $9.9 million, which generated a gross profit of $2.9 million, or 22.5% of revenue, compared to a gross profit of $27.8 in the prior year.
Gross profit for the quarter was lower than our historical range of 30%, primarily due to deliveries under a high volume contract and from sales of our EV Star 22-foot cargo, which are both at lower margins. We expect that our gross profit margin will be at similar levels in the coming quarters due to our expected sales mix. We've seen a continued improvement in our quarterly adjusted EBITDA since the beginning of this calendar year, driven by these higher sales. We saw an increase in our quarterly cash expenses to $4.8 million during the quarter, which was an increase of approximately $1.2 million compared to the prior quarter. Approximately 50% of this increase was attributable to higher transportation costs related to a significant increase in vehicle shipments to customers across the United States during the quarter.
In addition, we saw a step cost increase in our general administrative costs as we continue to expand our business in different regions and into new product lines through our acquisition of Lion Truck Body, as well as higher professional fees and product development as we expanded into new markets and developed new products. We finished the quarter with $25.6 million in working capital and approximately $0.6 million in available liquidity. Working capital included $7.9 million in AR, the majority of which was current at quarter end, and $46.2 million in inventory, which was comprised of over $34.6 million of finished goods inventory, primarily representing EV Star Cab & Chassis, EV Stars, EV Star Cargo, and both BEAST and Nano BEAST school buses.
Since the quarter end, we've collected a significant portion of the AR that was outstanding at the end of the year, we've raised approximately $3.5 million in equity through our ATM program. We've used the proceeds from these sources to continue to invest in our business platform, in working capital investments for our upcoming deliveries, our current available liquidity remains well above the level that it was at quarter end after these investments. Finally, we finished the quarter with deferred revenue of $12.5 million, the majority of which we expect to recognize within the next 12 months. I'll now turn it back to Fraser for a final word before the Q&A.
Yes. Thank you, Michael. To conclude, we've generated a significant sales in our past quarter with our commercial vehicles, and we expect that with our passenger as well as the school bus sales kicking in over the next several quarters to help further accelerate that, along with the organic growth within the commercial vehicle group. Consequently, we are expecting very solid growth over the next several quarters. With that, operator, please open up the call for questions.
We will now begin the question and answer session. To ask a question, please press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Craig Irwin of Roth Capital. Please go ahead.
Good morning, and thank you for taking my questions. Fraser, one of the most exciting things going on right now in the macro is the opportunity for your customers to take vehicles at parity, at cost parity versus conventional vehicles with the Inflation Reduction Act, you know, President Biden's commitment to the electrification of medium-duty trucks and heavy-duty trucks. Can you maybe talk us through some of the mechanics of how customers would apply for those available grants and subsidies? You know, do you expect sales of any of your vehicles this year to qualify? You know, is there anything else you would share to help us understand the near and longer-term impact?
Well, I think a lot of our activity that we were describing is based on programs that have been in place and are better known and better understood in terms of the whole process, you know, whether it's on the commercial vehicle side with various incentive programs. Our plans don't count or expect that that will have a significant impact in the first couple of quarters for our business. We're just being cautiously optimistic that it'll take a few quarters to really to really promulgate in the marketplace and have an impact in terms of the sales. As far as the process goes, we've certainly seen a significant uptick in inquiries and interest now that the funding is available in the current year.
Understood. Understood. Shifting gears a little bit, the gross margins this quarter were again, very healthy. You know, everybody expects that your large customer today, is getting an attractive price given that they give you a very healthy upfront payment, and you have a strong collaboration there. Your margins are coming through slightly stronger than what we thought. Can you talk about the opportunity for leverage? Is this really part of what's coming through? Do we maybe see leverage, you know, over the next number of quarters as we see diversification in the buying groups? How should we think about sort of short and longer term implications for gross margins as revenue ramps?
Well, short term will be, the greatest impact will be on product mix. You know, thank goodness for all of the rest of our product sales and that, you know, the ones and the twos, we benefit from, you know, higher gross profit margin, which helps offset the higher volume, lower margin type sales that you're referring to. That's short term, it'll be product mix, getting our school bus sales, dialed in, to the ongoing revenue stream, as well as a few of our passenger vehicles, increasing the sales of those. That'll be the combination in the short term.
Longer term is that, what we are seeing in the marketplace is with some of our peer group members that have had or have been reporting gross profit losses, you know, where the cost of goods sold actually exceeds the revenue is that, they're looking at price increases. We see that as the more likely scenario as opposed to trying to wring out additional cost savings through the supply chain. In the long term, that's where certainly scale and repeatable contracts and repeatable invoices is going to benefit us from savings in that regard.
Okay, excellent. You know, you mentioned the progress at your West Virginia facility for producing the BEAST. You know, congratulations there. I know there's been a tremendous amount of effort into getting that up and running. Can you help us understand sort of the approximate timeline for initial deliveries out of that facility? You know, what should we look for in the first weeks and months? And what do you see as a theoretical or potential deliveries number out of that facility, if you could possibly share that?
Well, initially we were looking at doing our Nano BEAST Type A school bus, in terms of the longer term production plan. Right now, the longer term production plan, as Brendan said in his remarks, it was to focus on the Type D school bus. That is, you know, the product that we are most engaged with the market today and certainly can benefit from an East Coast presence with that product. That takes a little longer to build than the Nano BEAST. We're looking at, you know, the first of those being later in the year, in terms of production out of the West Virginia facility. As far as the numbers, as we've said in the past, our...
You know, this facility does give us, capability of a run rate, you know, upwards of 50 to 60 per month, which would, be a capacity that, would likely exceed the short term market requirements or the short term market needs.
Okay. Would you expect many or most of those vehicles to be supported by vouchers from the infrastructure bill, the, you know, the $1 billion in funding that was handed out in vouchers several months back? You know, is this something that's tracking well for the BEAST and your sales expectations out of the West Virginia facility?
Certainly a part of it over the next couple of years would be that would be a key driver, but not the only one. One of the wild cards that really the industry as a whole is dealing with is the State of New York contract that we had, you know, completed our process last summer, you know, is still working through, you know, final details before we're able to actively pursue transactions on the on this particular activity. What we're looking at is really taking advantage of each of the opportunities that on a state by state basis, but not spreading ourselves too thin by trying to go after all 50 states.
What I mean by that is that there's a number of states that have state contracts that have, you know, almost like buying groups, whereas others, you know, like California are, you know, there's just a whole slate of different funding programs for school buses. You know, if you're not able to get EPA funding, you know, there's CEC or Air Quality Management District funding of a similar amount. We're able to pursue those programs as they become available and as new funding hits a particular year.
Excellent. Well, congratulations on a strong execution this quarter and, you know, we're looking forward to an exciting growth trajectory. Thank you, Fraser.
Thank you, Craig.
Bye.
The next question comes from Greg Lewis of BTIG. Please go ahead.
Yeah. Hey, thank you, and good morning, everybody, and thanks for taking my question. You know, Fraser or Mike, I was hoping you could maybe give a little bit of color or guidance in how you're thinking about, you know, the realization of inventory. I know you kinda mentioned that, you know, you expect it, you know, to really be realized over the next year. Is there, you know, is there any way in terms of thinking about timing where, you know, maybe it could be a little bit more chunkier in any specific quarters?
Well, that is the I won't say $64,000 question because it's a lot more than that, but that is one of the most impactful questions financially for Green Power because, you know, we have segments of our inventory fully paid for and except and save for, you know, the final completion, PDI testing and delivery. We're, you know, ready to go and monetize. A really good example is within the school bus space. You know, we had this quarter was a, you know, was a single school bus sale, and yet we have this very substantial near in sales pipeline. The early deliveries, those will all be out of inventory for our school buses.
If, you know, not to set an excuse or anything, but in the school bus space, it's a little bit of a unique proposition that it, unlike the commercial, there are more parties that need to be engaged in terms of getting infrastructure in place, getting contracts completed and signed and approved. So there's a multitude of decision makers in the school bus space, whereas in the commercial, you know, generally speaking, we're dealing with one or two decision makers that are involved in the process from start to the delivery and so on.
You know, we're dealing with a number of properties where, you know, they've decided, you know, that they're going with our platform, who the charging company they're going to utilize. The utility engagement is being completed in terms of the infrastructure. They still have other, you know, contractual arrangements to sort out with their board of trustees or their board as the case might be. It just takes a little longer to get those completed. You know, the funding also has deadlines, which helps us in that these organizations have to get busy and get their deals completed so we can get our vehicles delivered to them. That is a good example of a significant part of our inventory.
It's ready to go. We have deals, in many cases, earmarked to specific orders. As those kick in, then the initial deliveries are going to be all out of our current inventory.
Yeah. That's good to hear. Thanks. Thanks for the color, Fraser. Just I did want to follow up on that, you know, as you have these, you know, as you're working with your customers to get these vehicles, and you mentioned that, you know, it could be, you know, dotting the I's and crossing the T's at the customer level. You know, is how much of that, how much of the potential, I don't know, slowdown or the delaying of those deliveries do you kind of get the sense for?
Is it infrastructure, i.e., lack of charging related, or is it more, you know, just really at the, you know, the decision level to get the, you know, the government entities, you know, approving? Or is it really just an infrastructure issue that, you know, is probably being worked on as we speak?
I think it's a combination, but infrastructure is certainly one of. You know, it's less of an issue on the commercial side for in that, you know, it's a simpler approach in some cases compared to school buses where the infrastructure, you know, they're looking at everything and anything that, you know, we're well into, you know, the particular vehicle that is going to meet their duty cycle requirements and the combination of payload and what they want to achieve. When you start looking at the infrastructure, it's not practical to be charging between the morning and the afternoon run because they're on peak rates.
They're now looking in that instance at, okay, we need, you know, we need load management, we need scheduling, we need this and this. That isn't all dialed in at the front end. You know, you don't want to be making changes on the fly. That's, you know, a big part within school buses is managing all of that. You know, we're, you know, in the past year, we've become intimately involved with the charging. And we're not, you know, today we don't have a charger as a solution. You know, we need to be involved with that in order to reduce the amount of time that is spent on sorting out infrastructure issues. That's number one, the biggest.
The second is just getting, you know, the platform nailed down and committed to without, you know, without scope creep, where they decide, "Oh, let's have a look at V2G." You know, that's something that you don't want to be adding on or making a decision at the back end in terms of integrating your vehicle on a V2G solution. That needs to be part of the initial dialogue in scoping out the platform. You know, that does enter into into the process with that particular sector and does cause some additional delays. I think, you know, the key is that programs all have, you know, they all have requirements.
You know, the EPA funding and the selectees that have been awarded, funding under that program. You know, the way the rules are set is they need to have their vehicles delivered by October 31st, 2024. That seems like it's out there. A property that has, you know, has, up to the 25 max that is, that some properties were, awarded, you don't deliver 25 in a month. That's spread out over several quarters. All of that means that, you know, we believe that the whole process will be compressed over the next 6 to 9 months in terms of what we have seen.
Wow. That's great to hear. Okay. Hey, thank you very much for taking my questions, and have a great day.
Thanks, Craig.
Next question comes from Christopher Souther of B. Riley. Please go ahead.
Hey, guys. Thanks for taking my question here. Maybe on the Class D school bus side, it looks like just the one delivery of school buses was a Nano, and it sounded like the pipeline's certainly picking up on the school bus side. I just wanted to see if you could give any color on how many wins you think you're gonna have on the EPA program side. Do you have any, you know, firm orders yet through that program? Then, just wanted to get a sense of like the inventory strategy for the school bus size, you know, flat with 35 and kind of finished goods. You know, we're putting this kind of ramp in West Virginia.
I just wanted to get a sense of, you know, kind of the cadence over the next couple quarters, if you could provide a little more color.
Well, that's a great combination of questions and thanks for that. You know, starting off with our most recent quarter, the, you know, the selectees for the EPA program were literally announced during our most recent quarter that we've just announced. You know, it was given that you have to get your contract signed and deliveries, I don't think anybody was in a position to be, you know, that they delivered product by December 31, 2022.
Sure
under that EPA program. It was an interesting anomaly in that people that had submitted or were eligible for other forms of funding, you know, their, you know, in terms of VW Trust funding in a number of states or in California, all their various programs, were often waiting to see, well, can we do better? You know, we got $340,000 under this Air Quality Management District, but maybe we can get $375,000 under the EPA program plus $20,000 for our chargers. We saw that a lot in the fall of last year. Now we're at a point where, you know, the everybody has got their best shot and you know, they do have their mandate. We're now, you know, in a position we're able to move forward on those.
In terms of, you know, what our success rate is or what our expectations, you know, we will be announcing the deals as we go. There's, you know, there's a number that, we fully expect to get announced and be delivering over the next couple quarters, as I say, out of current inventory. Both for the Type D as well as the Type A, Nano BEAST and, you know, which will certainly be incremental to, the sales growth that we enjoy.
Okay. Are most of the, you know, pipeline customers you talked about, you know, frankly other programs that are, you know, now potentially kind of moving forward after they didn't get, you know, EPA or? How many kind of EPA customers are in that, you know, mix of pipeline customers you called out?
It's, it's pretty, you know, the over 30 deals that we referenced, they're spread out. They're, you know, they're various, you know, California has a big chunk of those. EPA is significant as well as other state programs or other state contracts. It's a pretty good cross. You know, we're, we have a pretty good cross-representation of deals and, you know, certainly no one program is the dominant player within that pipeline.
Got it. Okay. Maybe just the cadence of the Workhorse deliveries. You know, it sounded like some of the logistic challenges are improving here, and their commentary is sort of suggesting they'll take as many as they can get. I think your MD&A had 100 that were in process in delivery and another 100 that have been completed by a contract manufacturer in Asia. Should we think about, you know, quarterly run rate as, you know, approaching 100 and staying around there? Or, you know, are you know, saying, "Hey, we might be able to do 200 a quarter," you know, over the next, you know, if not March, you know, kind of the next quarter after that?
Well, I think, you know, we'll be sticking to a quarter-by-quarter communication or, and not getting ahead of ourselves, and that's in part because of supply chain and shipping and logistical issues and moving larger volumes. That's been, you know, that's been on us, not Workhorse in terms of, you know, getting the numbers up. That, you know, going from 10 to 100 is a whole different proposition as an organization. That's, you know, we're building our systems and our processes and our team in order to accommodate and to be able to do that and then repeat that on, you know, not just quarterly, but monthly and in terms of the regular delivery.
No, we're not, we're not in a position to be, you know, laying out on a quarter-by-quarter basis what those anticipated or expected deliveries are. I would agree with their commentary that, you know, this is on GreenPower in terms of ramping that up to meet the demand.
Got it. Okay. That, that all makes sense. Maybe just my last one. You know, it's great seeing the revenue start to ramp here. I wanted to see if you could just talk a little bit about, you know, the margin front. You know, it makes sense the kind of mix is gonna be the key driver for gross margins. You know, can you give us any sense of what EBITDA breakeven looks like? You know, given it seems like you guys are, you know, beefing up some of the OpEx lines, you know, to kind of help with the growth here. Is, you know, should we expect, you know, kind of flattish gross margins, you know, as Workhorse continues to be kind of a big chunk?
Do we get, you know, where do we get kind of more leverage to hit positive EBITDA? Is that kind of calendar year 2023?
Well, I'll start at a high level, and then I'll turn it over to Michael for a more granularity on your question. At a high level, it's important to note that the expenses that were reported in our December 31st, 2022 quarter, they include some of the initial startup for our West Virginia facility, which we're not even in, into the manufacturing, let alone delivery and revenue recognition out of that.
We also have a, you know, with Michael Perez, and his group with the school bus team, you know, that we've been incurring costs to get our dealer network in place, to get our team out and engaged with the extent of our sales pipeline, as well as the delivery team for the near-in sales that, you know, that we're pushing at the front end of that sales pipeline. All of that we've incurred without any of the requisite revenue that will flow from that activity. Likewise with Claus, stepping in with the commercial group or the commercial vehicle group, is that he has undertaken a number of initiatives as well as building out a dealer network.
Some of those early expenses aren't represented by any sales now, but will be realized down the road. At a high level, you know, we are, you know, continuing to invest in the capacity and the capability of a company that is a whole lot bigger than 100 vehicles in a quarter. That's, you know, represented in what we most recently reported. On that, I'll turn it over to Michael for any additional comments.
Thanks, Fraser. You know, I think Fraser described this very well is that, you know, we are investing in our business. We're building out a platform, and as we do that, you're gonna have quarters like we've just experienced where, you know, you have an increase in those step costs and you don't yet have the, we'll call it operating leverage from the, you know, the gross profit margin sort of trickling down through those cash expenses. However, you know, that being said, we're certainly happy with the trajectory. I mean, this is our highest revenue quarter ever. You know, at this run rate we're approaching, you know, on a quarterly basis, you know, annualized $50 million of revenue, which I think is a big step for us.
You know, as we absorb some of these, you know, new investments and, you know, build out the business across the country, I think, you know, we're really, you know, potentially just getting started here. We're optimistic about reaching those, you know, higher sales levels that will allow us to generate positive EBITDA. At this point, we're not in a position to, you know, talk about when that may be, although we're certainly happy with how this is progressing.
Got it. Okay, maybe just the last follow-up here and then I'll hop in the queue. Just, you know, the unabsorbed, you know, investments we're making today, you know, how much more of that do you think we need over the next, you know, call it, you know, six months, year, you know, two years in order to, you know, be able to hit the growth, you know, plans that you guys are hoping, would be kind of a way to think about?
Well, you know, the commercial sales, which represented the predominant activity for our most recent quarter didn't have, you know, essentially didn't have any school bus sales. We also have opportunities with our passenger vehicles, both the EV Star, the EV Star Plus, and our EV250. Those also would be incremental. That's all of what I think in Michael's comments, you know, with those.
Yeah, I was trying to just get to.
That's.
The cost side.
We feel that's the next two, three quarters.
Would there be...
Sorry, go ahead.
Yeah, I was trying to get to the cost side. Like, you know, you've made some of these additional investments. There's probably still some more ramp-up in West Virginia. I just wanted to get a sense of, you know, with the plans, like how much more OpEx do we think we need, you know, to invest, you know, on a quarterly basis, you know, to reach some of these plans? Or are there, you know, expectations that there will be kind of additional kind of step function changes in OpEx was really what I was trying to get at. Sorry.
Oh, I'm sorry. Yes. That's the December 31st quarter represents probably the bulk of that step up.
Okay.
You know, going forward, it's, there'll be some tweaking. We have probably a couple positions that we'd like to fill, but otherwise the majority, you know, being 75%, 80% as, you know, in our numbers and represented in our business model.
Perfect. I'll hop in the queue. Thanks so much for the color.
Thank you.
Once again, if you would like to ask a question, please press star then one. Our next question will come from Tate Sullivan of Maxim Group. Please go ahead.
Thank you. Good morning. Fraser, you mentioned 30 school bus deals in 8 states. Are those deals that you are currently in the process of bidding on or have been awarded or where are you in that process with those 30 deals?
They all represent deals that, you know, we can see a path to getting, you know, not just signed contract, but deliveries. So, you know, the bulk of them are where we are the primary or sole platform in terms of the OEM provider. Yeah, that sort of is the representation. It's, as we said, it's more than the 30.
You mentioned some price points or maybe I misheard. Is it the rebate through the EPA program, the $375,000 for the Type D bus, or is that roughly the sales price for average sales price for those vehicles?
Well, the EPA program provides for the Type C or D. We of course, just have the Type D, but the Type C or D all electric is $375,000. That is what they provide. To be priced at anything other than that, to be priced higher, you know, creates a very different dynamic in the marketplace. It is somewhat level set the field on that product. On the Nano BEAST Type A, we're looking at EPA funding of $285,000, and that was higher than where, you know, we, with our various dealers had been targeting where, you know, prior to the EPA program coming out, it was more typically in the $260,000-$270,000 type ballpark.
265 tended to be a number where some of the other Type A all-electric school bus manufacturers had also priced their products. That side, we've seen a bit of an uptick as a result of the funding from the EPA program.
Thank you. Shifting gears to the deferred revenue, and it was the first time it was flat on a quarter to quarter basis in three quarters. Does this, and maybe Michael, is this going to stay flat or are there scheduled additional upfront deposits, or is this account for the near term amount of deferred revenue? If you can address that.
Deferred revenue isn't a metric that we, you know, try to predict. I think the way we look at this, though, is that it's something that does represent future sales. I think what we communicated was that, over $12 million of that, represents current deferred revenue, which is, you know, effectively what we anticipate will be converted into... Or sorry, over $11 million is what we anticipate will be converted into sales over the coming year. That number will certainly be replenished throughout the year. It's a difficult one for us to forecast.
Okay.
It's important to note that it's unlike some of, you know, like accounts payable, are represent liabilities or obligations to pay and directly affect our cash flow. In the case of deferred revenue, it has a, obviously a different impact in terms of our liquidity. It's worth highlighting in the context that, you know, if one tracks this, separate and apart from our working capital that, you know, that, one can see, you know, less of an impact on our, cash requirements from, the balance of our working capital requirements.
Thank you. Last for you, Michael, you mentioned, I believe that you collected a bulk of accounts receivable already this quarter. I mean, does it bring it back down to the $3 million or $4 million level or can you comment on that?
Again, it's not something that we want to comment on mid-quarter. I mean, we're certainly, you know, anticipating, you know, a good solid sales number again this quarter. Of course as you're collecting AR, you're creating more AR, which is not a bad thing. We're, you know, we're comfortable with our current liquidity. I think that that's the key message that we've collected a number of those receivables that were outstanding at quarter end. We're, you know, actively pursuing other business and generating sales. We have a healthy liquidity given, you know, what our current needs are.
Okay. Thank you all.
Thank you.
This concludes our question and answer session. I would like to turn the conference back over to Fraser Atkinson for any closing remarks.
Thank you. Thanks for everyone being on the call and for those that dial in for our prerecorded version of our earnings call. We appreciate your support and appreciate your patience with our company as we build our business. We've been consistently reporting a gross profit in the twenties along with operating expenses that are a fraction of our peers. As Michael noted, since the end of the quarter, we've raised over $3.5 million off of our ATM on a very opportunistic basis.
As well as the finished goods inventory where we are expecting to complete deliveries over the next several quarters, is going to help accelerate the growth and the record revenues that we reported in the most recent quarter as we dial in the school bus and expand our commercial vehicle group as well as opportunities with shuttle and passenger vehicles. With that, we thank you for your support and look forward to chatting to you in the near future.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.