Grande West Transportation Inc. Investor Presentation
 

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Grande West Transportation Inc. (Grande West) was formed in 2008 to design and develop a 27.5 foot bus, known as the “Vicinity” following a Request for Information (“RFI”) by BC Transit (“BC ...

Grande West Transportation Inc. (Grande West) was formed in 2008 to design and develop a 27.5 foot bus, known as the “Vicinity” following a Request for Information (“RFI”) by BC Transit (“BC Transit”), a crown agency of the Province of British Columbia.

The Vicinity bus is a Canadian designed, innovative community shuttle bus conceived to meet the demand for a greener compact bus that is easily accessible and customizable to meet each customer’s unique needs, capacity requirements and seating configuration.

Initial deliveries to B.C. Transit of 15 Vicinity buses occurred in August 2013. The Company subsequently secured new orders for 10 Vicinity buses for Quebec and for 3 Vicinity buses for a Nova Scotia transit authority and is focused on securing significant orders across Canada and ultimately, the United States.

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Grande West Transportation Inc. Investor Presentation Presentation Transcript

  • 1. Delivering Innovative Transportation Solutions TSX.V: BUS August 2014
  • 2. Forward-Looking Statements This presentation contains ''forward-looking statements'', which reflect the expectations of management regarding Grande West Transportation Group Inc.’s (the “Company”) future growth, results of operations, performance and business prospects and opportunities. The words ''believes'', ''anticipates'', ''plans'', ''expects'', ''intends'', ''projects'', ''estimates'' and similar expressions are intended to identify forward-looking statements. These forward-looking statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this presentation. Such forward-looking statements are based on a number of material factors and assumptions, including, but not limited in any manner to the availability of sufficient working capital to market the Company's products and provide after-sales maintenance and support services to the Company's customers, access to adequate services and supplies to operate the Company's business, economic conditions, commodity prices, foreign currency exchange rates, interest rates, access to capital and debt markets and associated costs of funds, availability of a qualified work force, and the ultimate ability to develop, manufacture and sell the Company's products on economically favourable terms. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not or the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under ''Risk Factors'' in the prospectus dated November 27, 2013 of the Company on SEDAR at www.sedar.com. Although the forward-looking statements contained in this presentation are based upon what management believes to be reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward-looking statements, and the differences may be material. These forward-looking statements relate only to events or information as of the date on which the statements are made and, except as required by securities legislation, the Company assumes no obligation to update or revise them to reflect new events or circumstances. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this cautionary statement. Disclaimer This presentation does not form part of any offer of securities, or constitute a solicitation of any offer to purchase or subscribe for securities. The sole purpose of this presentation, in paper or electronic form, is strictly for information. TSX.V: BUS 2
  • 3. Public Transit in Canada Canadian transit agencies are seeking to modernize transit fleets by replacing traditional 40 foot, and smaller cutaway buses with compact, low emission, accessible vehicles. TSX.V: BUS 3
  • 4. Introducing a New Kind of Bus TSX.V: BUS 4
  • 5. Introducing a New Kind of Bus Fuel Efficient Tested Safety Certified Kneeling Economical TSX.V: BUS 5 Accessible 27.5 Feet Compact Non-Cutaway Durable Canadian Green Recommended Delivered Ordered Open Floor Easy Handling Available Innovative Proven Customized
  • 6. We’ve Hit the Road Running TSX.V: BUS 6 15 Vicinity’s Delivered to BC Transit. $3.8 Million Revenues from initial order.
  • 7. Money and Time Well Spent 3 Years R&D Designed and developed based upon critical input and feedback by BC Transit. Over $3.0 Million Raised by Grande West’s 5 original TSX.V: BUS 7 partners, which funded engineering, design and testing.
  • 8. Quality & Cost Savings TSX.V: BUS 8 Canadian designed & engineered. High quality North American equipment. Cost-effectively assembled in China. Yaxing Motor Coach • Large-scale bus manufacturer in China. • Listed on Shanghai Stock Exchange (SHA:600213). • Subsidiary of Weichai Group, a $10-12 billion dollar company Quality controls by Grande West.
  • 9. Why Assemble in China? - Turned away by the North American bus manufacturers as their production lines were too busy - Canvassed Asian manufacturers and found Yaxing who has a highly skilled workforce who previously manufactured Mercedes Benz buses in a joint venture - Do similar as what Apple proudly states on the back of their iPhones “Designed and engineered by Grande West in Canada, assembled in China” - Utilize the high quality skills in China for labour intensive work to build the frame, fit the body parts and assemble the North American components TSX.V: BUS 9
  • 10. 21 Month Beta Tour and Results Launched February 2010 by BC Transit. Began during Winter Olympics & Paralympics. Accessibility demands, high volume. One Vicinity prototype driven over 90,000 km. Variety of terrains and weather conditions. Completed October 2011. Positive test results shown. Substantial long-term cost savings. Improved visibility and maneuverability, smoother ride. Safety certifications granted. Canadian Motor Vehicle Safety Standards. Cummins EPA Engine Compliance Approval. Commercial Vehicle Safety Inspection. Initial order secured October 2011. TSX.V: BUS 10
  • 11. Market Opportunity Public Transit • Essential service with predictable funding. • Budgets approved years in advance. • Replaceable product. Small Sized Buses • Ability to match capacity with demand. • Higher maneuverability on narrow streets and within communities. • Lower capital costs. • Lower maintenance costs. • Minimizes emissions harmful to the environment.  2010 = 18,000 transit buses  Avg. bus service life = 10 years  Rate of replacement/year = 10% ~1,800 buses in need of replacing each year in Canada TSX.V: BUS 11
  • 12. Additional Market Opportunities Airport Shuttles Senior Centres TSX.V: BUS 12 Tour Groups School Buses Disability Services Public Transit
  • 13. 13 Market Competition Motivation to build a competing product is low. • Already successfully building larger sized bus models. • Most companies are much larger in size with production backlogs for 40 foot buses. Production of a new bus model would take ~3 years. • Corporate constraints. • Government certification process. TSX.V: BUS
  • 14. 14 Standard Sized 40 Foot Buses Do not address market need for compact, cost-efficient, easily maneuverd bus. Smaller Buses On A Cutaway Chassis Do not address market need for lower emission, easily accessible, longer lasting bus. • Only 60% capacity of the Vicinity. • Built upon incomplete truck chassis by second stage manufacturers. • High floor, wheelchair lifts, ramp issues. TSX.V: BUS
  • 15. The Grande West Difference Affordable Accessible Innovative TSX.V: BUS 15
  • 16. Affordable Accessible Innovative Affordable Half the price of a 40 foot bus, over twice the lifespan of a cutaway bus, and lower operating costs than both a 40 foot bus and cutaway bus. $280,000 compared to $330,000+. 2 year bumper to bumper warranty, 10 year life span. TSX.V: BUS 16 Cleaner burning and improved fuel efficiencies.
  • 17. Affordable Accessible Innovative Accessible Accessibility features to accommodate Canada’s aging population and mobility challenged individuals. Tiered theatre forward facing seating and open floor concept. Easy access, stable ramp. TSX.V: BUS 17 Full accessibility for wheelchairs, strollers and walkers.
  • 18. Affordable Accessible Innovative Offers the working features of a 40 foot bus with the compact packaging of a cutaway bus. TSX.V: BUS 18 Innovative Extremely low decibel rating. Interior dehumidifier. Tight turning, easy handling and maneuverability.
  • 19. Sales Process Sales Model: $280,000 paid in two installments. 25% Deposit paid to Grande West at date of order - 25% cost to manufacture advanced to Yaxing that carries work-in-process cost. 75% Payment on delivery acceptance date – Yaxing paid remaining assembly costs with the balance to Grande West. Grande West does not use its own capital for the cost to manufacture and carries a minimal inventory of buses. TSX.V: BUS 19 Opening of bid to delivery acceptance is approximately 9 to 12 months.
  • 20. Business Model High Gross Margins TSX.V: BUS 20 Low Inventory Costs Low Overhead Costs Grande West - 20%* *Estimated for fiscal year-end Aug 31/15 Buses manufactured to order upon confirmation of a purchase order. Less than 23 people required to handle $50 million in sales.
  • 21. Cross-Country Sales and Marketing Western Canada Jean-Marc Landry – VP, Business Development Eastern Canada City View Sales & Service appointed as agent Sales Pipeline Pending potential sales following extensive discussions and current product testing Sales and Marketing strategies planned for additional transit authorities across Canada TSX.V: BUS 21
  • 22. Capitalization Table Shares % of Company (Fully Diluted) Founding Directors & Officers 10,650,000 24.2% Other Founders 7,350,000 16.7% Private Placement ($1,410,000 at $0.25 – April 2013) 5,973,600 13.6% IPO, concurrent PP and Loans settlement ($6,100,000 at $0.50 – December 2013) 12,370,900 28.2% Private Placement ($1,037,000 at $0.50 – August 2014) 2,074,000 4.7% Total Issued & Outstanding Shares 38,418,500 87.4% Agents’ Options Outstanding (8% on IPO Shares, 7% on PP shares at $0.50) 914,280 2.1% Warrants (at $0.65 with conversion if traded at $0.95) 1,037,000 2.4% Stock Options (priced at $0.50, vesting, five year term) 3,573,400 8.1% Fully Diluted 43,943,180 100.0% TSX.V: BUS 22
  • 23. Initial Public Offering President’s List, 9.70% Institutional, 33% Completed December 2013 • Initial target $3 to 4M • Raised $5.3M • Oversubscribed Retail, 57.30% TSX.V: BUS 23
  • 24. Designed, produced and received 5 Year Achievements certifications for the Vicinity. Successfully completed 21 month beta tour. Oversubscribed IPO and successful completion of public listing. Awarded and completed initial order from BC Transit. Secured manufacturing arrangement with Yaxing Motor Coach. Secured Eastern Canadian Distribution Agreement and new orders. TSX.V: BUS 24
  • 25. Improve gross margins through efficiencies. Actively market and demonstrate the Vicinity. Obtain safety certifications for the Vicinity in the U.S. Increase sales, marketing and operational staff. 2014 Objectives Secure purchase orders in jurisdictions across Canada. Provide highest level of customer satisfaction TSX.V: BUS 25
  • 26. $3.8 million in revenues from BC Transit’s initial order of 15 buses (delivered). Increasing sales opportunities as Vicinity’s now on the road. Summary Growing market demand for compact, fuel efficient, easy accessible transit vehicles. Experienced, committed and invested management team. Quality built, Canadian product. Focused on targeted sales across Canada. TSX.V: BUS 26
  • 27. Management William Trainer – Chief Executive Officer / President • 25 years of business leadership with extensive import and export experience. • Successfully pioneered and brought new products to Canada from Asia for 20 years. • Owned and managed heavy construction dealerships across Western Canada. • Extensive knowledge in business dealing with major manufacturers in Japan and Korea. John Sutherland – Chief Financial Officer • Held executive positions in a number of public companies, including President, CFO, Corporate Secretary, Vice President, and Treasurer. • Director of numerous public companies with over 20 years of experience. • Co-founded Tekion, Inc. and served as its Vice President and CFO. • Certified General Accountant with an Engineering Diploma. John Wang – Vice President, Chief Engineer • Certified Engineer with previous positions as mechanical engineer and designer and project manager for various companies in China and Canada. • Extensive knowledge of the import and export business in the construction attachment industry and Chinese business practices. Jean-Marc Landry – Vice President, Business Development • Senior manager with over 20 years of experience in business development, focused on TSX.V: BUS 27 the public transit industry • Instrumental knowledge in sales, marketing and growth within transportation industry
  • 28. Board of Directors – Independent Members Joe Miller – Director + Chairman • Global businessman with over 30 years in the construction field. • Manages a large diverse construction company in the Greater Vancouver area with TSX.V: BUS 28 projects across North America. • Brings vast knowledge in negotiation skills and customer relationship building. Yves Devin– Director • Former CEO of Montreal Transit System, second largest transit system in Canada. • Instrumental in improving Montreal Transit System to win the APTA award for being the Best Transportation Company in North America. • Mr. Devin serves or has served on every major transportation association in Canada and the USA. Don Siemens– Director • Independent financial advisor and corporate director with over 30 years experience. • Chartered Accountant and audit committee chair for six public companies and well experienced in corporate governance matters. • Expertise in corporate finance, take-overs, negotiations and strategic planning.
  • 29. Thank-You Contact: William Trainer wtrainer@grandewest.com 604-607-4000