News Details

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¹  Adjusted EBITDA is a non-IFRS financial measure. See "Non-IFRS Measures and Other Performance Metrics" section of this press release.

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²  See "Non-IFRS Measures and Other Performance Metrics" section of this press release. The Company's vehicle and charging stations order book is determined by management based on purchase orders that have been signed, orders that have been formally confirmed by clients or products in respect of which formal joint applications for governmental subsidies or economic incentives have been made by the applicable clients and the Company. The order book is expressed as a number of units or a total dollar value, which dollar value is determined based on the pricing of each unit included in the order book. The vehicles included in the vehicle order book as of May 8, 2023 provided for a delivery period ranging from a few months to the end of the year ending December 31, 2026. Substantially all deliveries are subject to the granting of subsidies and incentives with processing times that are subject to important variations, and there has been in the past and the Company expects there will continue to be variances between the expected delivery periods of orders and the actual delivery times, and certain delays could be significant. Such variances or delays could result in the loss of a subsidy or incentive and/or in the cancellation of certain orders, in whole or in part. The Company's presentation of the order book should not be construed as a representation by the Company that the vehicles and charging stations included in its order book will translate into actual sales. 

Mar 31, 2023

Dec 31, 2022

$

$

ASSETS

Current

Cash

35,972,482

88,266,985

Accounts receivable

89,167,678

62,971,542

Inventories

174,906,519

167,191,935

Prepaid expenses and other current assets

5,861,024

5,067,513

Current assets

305,907,703

323,497,975

Non-current

Other non-current assets

988,638

1,073,226

Property, plant and equipment

159,242,923

160,756,328

Right-of-use assets

81,940,220

60,508,354

Intangible assets

166,956,149

151,364,023

Contract asset

13,221,745

13,211,006

Non-current assets

422,349,675

386,912,937

Total assets

728,257,378

710,410,912

LIABILITIES

Current

Trade and other payables

77,676,788

75,857,013

Current portion of long-term debt and other debts

22,346

24,713

Current portion of lease liabilities

5,420,223

5,210,183

Current liabilities

83,119,357

81,091,909

Non-current

Long-term debt and other debts

114,871,113

110,648,635

Lease liabilities

77,307,586

58,310,032

Share warrant obligations

20,383,842

23,243,563

Non-current liabilities

212,562,541

192,202,230

Total liabilities

295,681,898

273,294,139

SHAREHOLDERS' EQUITY

Share capital

485,114,827

475,950,194

Contributed surplus

135,779,507

134,365,664

Deficit

(167,563,406)

(151,979,960)

Cumulative translation adjustment

(20,755,448)

(21,219,125)

Total shareholders' equity

432,575,480

437,116,773

Total shareholders' equity and liabilities

728,257,378

710,410,912

(Unaudited)

Three months ended

Mar 31,
2023

Mar 31,
2022

$

$

Revenue

54,703,405

22,646,793

Cost of sales

56,960,693

23,558,565

Gross loss

(2,257,288)

(911,772)

Administrative expenses

13,002,685

10,977,409

Selling expenses

5,859,660

5,375,502

Operating loss

(21,119,633)

(17,264,683)

Finance costs

1,420,354

1,178,408

Foreign exchange (gain) loss

(1,211,645)

910,642

Change in fair value of share warrant obligations

(5,744,896)

(21,456,170)

Net income (loss)

(15,583,446)

2,102,437

Other comprehensive income (loss)

Item that will be subsequently reclassified to net earnings (loss)

Foreign currency translation adjustment

463,677

3,249,085

Comprehensive earnings (loss) for the period

(15,119,769)

5,351,522

Earnings (loss) per share

Basic earnings (loss) per share

(0.07)

0.01

Diluted earnings (loss) per share

(0.07)

0.01

(Unaudited)

Three months ended

Mar 31, 2023

Mar 31, 2022

$

$

OPERATING ACTIVITIES

Net earnings (loss)

(15,583,446)

2,102,437

Non-cash items:

Depreciation and amortization

4,913,657

1,983,254

Share-based compensation

1,413,843

3,794,558

Accretion and revaluation expense on balance of purchase price payable related to the acquisition of the dealership rights

—

56,336

Change in fair value of share warrant obligations

(5,744,896)

(21,456,170)

Unrealized foreign exchange loss (gain)

616,474

(207,744)

Net change in non-cash working capital items

(23,216,385)

(20,745,672)

Cash flows used in operating activities

(37,600,753)

(34,473,001)

INVESTING ACTIVITIES

Acquisition of property, plant and equipment

(27,584,447)

(35,794,350)

Addition to intangible assets

(21,709,070)

(14,782,510)

Proceeds from Mirabel battery building sale-leaseback

20,506,589

—

Cash flows used in investing activities

(28,786,928)

(50,576,860)

FINANCING ACTIVITIES

Increase in long-term debt and other debts

26,166,466

—

Repayment of long-term debt and other debts

(22,489,772)

(303,778)

Payment of lease liabilities

(1,361,347)

(1,216,817)

Proceeds from issuance of shares through "at-the-market" equity program, net of issuance costs

4,625,234

—

Proceeds from the issuance of units through the December 2022 Offering - Warrants

2,907,226

—

Proceeds from the issuance of units through the December 2022 Offering - Common Shares, net of issuance costs

4,175,836

—

Cash flows from (used in) financing activities

(1,520,595)

Effect of exchange rate changes on cash held in foreign currency

69,535

328,066

Net decrease in cash

(52,294,503)

(86,242,390)

Cash, beginning of year

88,266,985

241,702,030

Cash, end of period

35,972,482

155,459,640

Other information on cash flows related to operating activities:

Income taxes paid

—

—

Interest paid

1,741,339

349,986

Interest paid under lease liabilities

998,903

772,087

Delivery Periods:

The Company's order book refers to products that have not yet been delivered but which are reasonably expected by management to be delivered within a time period that can be reasonably estimated and includes, in the case of charging stations, services that have not been completed but which are reasonably expected by management to be completed in connection with the delivery of the product.

Purchase orders and applications relating to vehicles of Lion generally provide for a time period during which the client expects delivery of the vehicles. Such period can vary from a specific date, a number or range of months after the issuance of the order or application, or a calendar year. The vehicles included in the vehicle order book as of May 8, 2023 provided for a delivery period, subject to the satisfaction of the conditions set forth in each order (which, in substantially all cases as further discussed herein, relate to the approval of governmental subsidies and grants), ranging from a few months to the end of the year ending December 31, 2026, with substantially all of such vehicles currently providing for deliveries before the end of the year ending December 31, 2025 (which  corresponds to the latest date by which claims are required to be made according to the current eligibility criteria of the Federal's Infrastructure Canada's Zero-Emission Transit Fund ("ZETF"), unless otherwise agreed by Infrastructure Canada). Delivery periods are disclosed from time to time by the Company when available in respect of material orders. Delivery periods should not be construed as a representation or a guarantee by the Company that the actual delivery time will take place as scheduled. Given the nature of the business and the products of the Company, the implied lead time for the production and delivery of a vehicle (which may be impacted, among other things, by supply chain challenges or changes in specifications), the nature of certain customers of the Company (in many cases, fleet owners operating capital intensive operations which require financing and ongoing scheduling flexibility), and the fact that, as further described herein, substantially all of the vehicle orders included in the order book are subject to the granting of governmental subsidies and incentives, actual delivery times may be subject to important variations or delays. Please refer to the section entitled "Ongoing Evaluation; Risk Factors" below regarding the potential impact of variations or delays in deliveries.

Pricing:

When the Company's order book is expressed as an amount of sales, such amount has been determined by management based on the current specifications or requirements of the applicable order, assumes no changes to such specifications or requirements and, in cases where the pricing of a product or service may vary in the future, represents management's reasonable estimate of the prospective pricing as of the time such estimate is reported. A small number of vehicles included in the order book have a pricing that remains subject to confirmation based on specifications and other options to be agreed upon in the future between the applicable client and the Company. For purposes of the determination of the order book and the value allocated to such orders, management has estimated the pricing based on its current price lists and certain other assumptions relating to specifications and requirements deemed reasonable in the circumstances.

Performance Metric:

The order book is intended as a supplemental measure of performance that is neither required by, nor presented in accordance with, IFRS, and is neither disclosed in nor derived from the financial statements of the Company. The Company believes that the disclosure of its order book provides an additional tool for investors to use in evaluating the Company's performance, market penetration for its products, and the cadence of capital expenditures and tooling.

The Company's computation of its order book is subject to the specific methodology described herein and may not be comparable to other similarly entitled measures computed by other companies, because all companies may not calculate their order book in the same fashion. Other companies also sometimes refer to or use "order backlog" or "order intake" as performance metrics, which are most likely not calculated on the same basis as the Company's order book. In addition, as explained above, the Company's presentation of the order book is calculated based on the orders and the applications made as of the time that the information is presented, and it is not based on the Company's assessment of future events and should not be construed as a representation by the Company that the vehicles and charging stations included in its order book will translate into actual sales.

Ongoing Evaluation; Risk Factors:

A portion of the vehicles or charging stations included in the Company's order book may be cancellable in certain circumstances (whether by reason of a delivery delay, unavailability of a subsidy or incentive or otherwise) within a certain period. Management reviews the composition of the order book every time it is reported in order to determine whether any orders should be removed from the order book. For purposes of such exercise, management identifies orders that have been or are reasonably likely to be cancelled and examines, among other things, whether conditions attaching to the order are reasonably likely to result in a cancellation of the order in future periods as well as any other available information deemed relevant, including ongoing dialogue with clients. Such exercise may result from time to time in orders that have previously been included in the order book being removed even if they have not been formally canceled by the client.

The Company cannot guarantee that its order book will be realized in full, in a timely manner, or at all, or that, even if realized, revenues generated will result in profits or cash generation as expected, and any shortfall may be significant. The Company's conversion of its order into actual sales is dependent on various factors, including those described below and under section 23.0 entitled "Risk Factors" of the Company's MD&A for the years ended December 31, 2022 and 2021. For instance, a customer may voluntarily or involuntarily default on an order, may become subject to bankruptcy or insolvency or cease its business operations. In addition, substantially all of the vehicle orders included in the order book are subject to conditions relating to the granting of governmental subsidies or incentives or a specified timing for the delivery of the vehicle and, in a limited number of cases, the availability of certain specifications and options or the renewal of certain routes by governmental or school authorities. As a result, the Company's ability to convert its order book into actual sales is highly dependent on the granting and timing of governmental subsidies and incentives, most notably subsidies and incentives under the Quebec government's 2030 Plan for a Green Economy (the "Quebec Green Economy Plan"), under the Federal's Infrastructure ZETF, the Government of Canada Incentives for Medium- and Heavy-Duty Zero-Emission Vehicles (iMHZEV) Program, the U.S. Environmental Protection Agency Clean School Bus Program and California's Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP). Approximately half of the vehicles included in the order book are contingent upon grants under the ZETF, in respect of which applications relating to vehicles of Lion have not yet been fully processed to date and December 31, 2025 is the latest date by which claims are required to be made according to the current eligibility criteria of the program, unless otherwise agreed by Infrastructure Canada. In addition, a total of 289 purchase orders were obtained in connection with the first round of funding under the EPA Clean School Bus Program, which requires, among other things, that vehicles be delivered on or prior to October 2024.

Any termination, modification, delay or suspension of any governmental subsidies and incentives, including, most importantly as of the date hereof, the ZETF, the Quebec Green Economy Plan or the EPA Clean School Bus Program could result in delayed deliveries or the cancellation of all or any portion of orders, which, in turn, could have a material and adverse effect on the Company's business, results of operations or financial condition.

The Company's conversion of its order book into actual sales is also dependent on its ability to economically and timely manufacture its vehicles, at scale. The Company delivered 196 vehicles during the year ended December 31, 2021, 519 vehicles during the year ended December 31, 2022, and 220 vehicles during the three months ended March 31, 2023. As of May 8, 2023, the Company's vehicle order book stood at 2,565 vehicles. The execution of the Company's growth strategy and the conversion of its order book, which currently provides for deliveries ranging from a few months to the end of the year ending December 31, 2026, will therefore require significant ramp-up in its production. The Company's Saint-Jerome facility currently has an estimated annual production capacity of 2,500 vehicles at full scale and the Company is in the process of ramping up its operations at the Joliet Facility and the Lion Campus (see section 8.0 entitled "Operational Highlights" and "Product Development and Manufacturing" under section 11.0 entitled "Key Factors Affecting Lion's Performance" of the Company's MD&A for the three months ended March 31, 2023 for further details), the Company has limited experience to date in high volume manufacturing of its vehicles. In addition, as of May 8, 2023, 450 units included in the order book, consisting mainly of LionA and LionD buses and Lion8T trucks and representing a combined total order value of approximately $160 million, related to products which had been developed and were being sold, but that were not currently in commercial production. See "Products and Solutions" in section 6.2 of the Company's Annual Information Form for the year ended December 31, 2022 entitled "Business of the Company". Any failure by the Company to successfully develop its vehicles, source its key components, and scale its manufacturing processes within projected costs and timelines could have a material adverse effect on its business, results of operations or financial condition. As a result, the Company's realization of its order book is subject to a number of risks and uncertainties, including the risks described in sections 3.0 of the Company's MD&A for the three months ended March 31, 2023 entitled "Caution Regarding Forward-Looking Statements" and section 23.0 entitled "Risk Factors" of the Company's MD&A for the years ended December 31, 2022 and 2021, and there can be no assurance that the Company will be successful in converting all or a significant portion of its order book into actual sales.

Unaudited - Three months
ended, March 31,

2023

2022

(in thousands)

Revenue

$54,703

$22,647

Net earnings (loss)

($15,583)

$2,102

Finance costs

$1,420

$1,178

Depreciation and amortization

$4,914

$1,983

Share-based compensation(1)

$1,414

$3,795

Change in fair value of share warrant obligations(2)

($5,745)

($21,456)

Foreign exchange (gain) loss(3)

($1,212)

$911

Transaction and other non-recurring expenses(4)

$320

$169

Income taxes

–

–

Adjusted EBITDA

($14,472)

($11,318)

(1)

Represents non-cash expenses recognized in connection with the issuance of stock options, restricted share units, and deferred share units issued under Lion's omnibus incentive and stock option plans as described in note 8 to the condensed interim consolidated financial statements as at and for three months ended March 31, 2023  and 2022.

(2)

Represents non-cash change in the fair value of the share warrant obligations as described in note 7 to the condensed interim consolidated financial statements as at and for three months ended March 31, 2023  and 2022.

(3)

Represents (gains) losses relating to foreign exchange translation.

(4)

For the three months ended March 31, 2023 and 2022, represents non-recurring professional fees related mostly to process optimization initiatives.