Green Automotive Company Update: Case Closed, It’s A $0.04 Stock At Best

By Contributing Editor: Jay Thompson

 

Green Automotive Company (OTCQB:GACR) is a $100 million company that operates a very small and likely failing electric car repair shop, along with a tiny electric car dealership in the United Kingdom and an alternative fuels bus manufacturer in the U.S. It has not proven it's special vs. any other alternative fuels bus manufacturer, and has been unable to deliver on its promises to its one and only distributor. In our initial article discussing Green Automotive, we offered a variety of facts to explain why GACR's business is not what it appears to be and why GACR's stock price is likely to decrease dramatically in the near future. One investor responded to our initial article, stating that "it's a new market where logic is irrelevant and whispers and executive mystique win every time over fundamentals."

GACR is a penny stock -- that means it can be manipulated. Both Ironridge and Kodiak, and likely many others, are motivated to help the stock stay in its current trading range. But they know they can not keep the stock in this range for very long and also sell the shares they hold. Ironridge is likely to try to sell out of their shares before the S-1 for Kodiak is approved, which could be any day now. At some point soon they will sell into the bid. That will be an ugly trading day for GACR. We trust in fundamentals, but we don't trust the market to react and price stocks accordingly or timely -- especially penny stocks.

Management appears to have attempted a response to our article with a press release that we believe does little to disprove our statements and answer our concerns. More importantly, it serves to prove that GACR has no interest in being transparent with investors. Management's unwillingness to discuss profits of each business segment suggest that each of its business segments could be unprofitable. This article is meant to outline certain new information we have obtained from GACR shareholders and additional research we have completed. We will also continue the discussion, in summary, of the facts we previously addressed, and respond to management's comments regarding our initial article.

New Information - The Deeper We Dig, the Uglier This Gets

  1. On Dec. 11, 2013, GACR announced by press release "Green Automotive Company Subsidiary Launches Brand New Electric Vehicle." The press release was about the Mia. There are two alarming issues with this press release. First, according to this website, the Mia was created in July 2010. It is now almost 2014. This is not a "brand new electric vehicle." Second, the press release states that GACR "launched" the Mia. Well, the Mia is manufactured by Mia Electric, which does not appear to be a subsidiary of GACR. Mia Electric is a French company. The Mia is for sale on Mia Electric's website for approximately $36,000 (estimated for currency differences). Given that information, it appears GACR is simply reselling the Mia and not actually manufacturing it. Mr. Hobday stated in GACR's most recent press release that GACR has sold 10 Mias and they were delivered on Dec. 19, 2013. This is great but instead of this meaning that GACR has sold 10 Mias at a sales price of around $360,000 in total, it means that GACR has sold 10 Mias to generate a sales commission of some unknown amount that management appears unwilling to disclose. If we assume a fair commission is approximately 10%, which we believe is likely higher than the actual commission, then Mr. Hobday and GACR has spent a lot of effort to excite investors about $36,000 in revenues -- at best. Considering that Mr. Hobday probably didn't sell those Mias himself, and the salesmen are paid on commission as well, and they probably have a sales office, it seems likely GACR probably didn't even profit $10,000 from the sale of those 10 Mias. We are unsure why this should be considered newsworthy other than to mislead investors into buying GACR stock. But we may never know as GACR does not appear willing to discuss revenues per unit car or bus sales or per unit car profits relating to any of their business segments.
  2. The Mia electric car costs approximately $36,000. The Mia is expensive. We are very sure a car buyer would select a cheaper electric car or perhaps even a BMW or Mercedes gasoline or diesel-powered car before they will select a Mia. A review of the Mia by autocar.com fully supports these conclusions. The Mia, in any reasonable person's view, is not a bargain and is unlikely to be sold in large quantities.
  3. Mr. Hobday refers to the Mia as the "amazing Mia." Yet, in an interview, Tesla's (NASDAQ:TSLA) CEO, Elon Musk, states that an electric vehicle that Tesla plans to develop will cost $35,000 and double the range of today's electric vehicles to 200 miles. So according to Mr. Musk, who we believe has plenty of credibility in this regard, most EVs have a range of about 100 miles today. Mr. Hobday states in the most recent GACR press release that the Mia has a range of 80 miles. It is unclear why Mr. Hobday believes the Mia is "amazing." In our opinion, Mr. Hobday is misleading investors at the very least. We are now unsure of how far Mr. Hobday will go to build interest in GACR's stock. There must be a shortage of good news if GACR has chosen to focus his sales pitch to investors on the Mia -- an electric car GACR didn't even design or manufacture themselves.
  4. Management has avoided numerous chances to discuss the profitability of any of their business segments. This is a level of transparency that is so basic. This is information that should be included in GACR's SEC filings. We have provided the SEC with a copy of this article to assist them in their review of GACR, which is likely currently underway given the pending S-1 filing for Kodiak. As of now, there is ABSOLUTELY no information about profitability of the products or services GACR is selling in any of GACR's SEC filings. This is a huge red flag that can not be ignored. A public company could grow revenues forever, and possibly grow its market capitalization significantly, if profits were not a concern.
  5. Subsequent to our initial article on GACR, we became aware of some additional information that should add to further downward pressure on the stock. It appears that GACR's management have been delaying the release of a large number of shares of GACR for the last few years. On December 24, 2013, these shares became officially eligible to be resold into the market. This is just one of the numerous examples of short term downward pressure that exists in GACR's stock or will soon exist. If there are many old shareholders who feel similar to the one who filed a report at ripoffreport.com, then the 1,000,000+ additional shares of GACR that are now eligible to be sold into the market, along with Kodiak and Ironridge, will possibly push the stock price of GACR downward in dramatic fashion.
  6. Mr. Hobday referenced in the most recent GACR press release that Newport was currently "building bus number 41." That statement does not mean anything to an investor. Newport could be building the first 41 buses still and not delivered even the first bus and that statement would still be OK -- but the way it is presented leaves a lot of room for manipulation of the facts. Newport contractually agreed to deliver 70 buses by Sept. 30, 2013. That was three months ago. Investors want to know how many buses Newport has delivered, and accepted by Don Brown, and what the revised timeline is given that Newport breached the original terms of the contract with Don Brown. Also, it would be great to explain to the investors what the average sales price of the buses will be and if these buses are being sold at a profit or not, and how much that profit was. GACR should know these figures or have a very good idea of them given that the buses are supposedly pre-sold. On that note, if they are pre-sold, as Mr. Hobday contends, it would be great if GACR disclosed the quantity of each bus model that was pre-sold, the average sales price of each order, the expected delivery date, the anticipated profit on each sale, the payment terms, the payments that have been made thus far to GACR, the credit terms given to customers, GACR's policies with regard to the extending of credit to customers, and perhaps most importantly, fully explain the relationship with Don Brown. Is Don Brown a shareholder of GACR? Is Don Brown being compensated in any way for placing orders for Newport buses? What is the commission structure? How does that impact profitability?
  7. Mr. Hobday seems to have referenced a process that takes 90 labor hours per week to complete. We do know what that process actually is and what he is inferring. The statement is extremely confusing and seems as if it could mislead investors that a bus can be manufactured in 90 labor hours. We doubt very much that a bus can be manufactured by Newport that quickly. We refer to the production delays and breach of contract terms that occurred in 2013 thus far.
  8. Mr. Hobday states that Liberty has been in business for over seven years and that it "continues to grow." Liberty generated $126,086 in revenues in the nine months ended Sept. 30, 2013. After being in business for seven years and only being able to generate just over $100,000 in revenues from one customer in that reporting period, we would hardly consider this a successful venture. Yet GACR states that Liberty is "one of the leading EV technology businesses." Mr. Hobday's qualifications as a successful entrepreneur, investor or executive in the EV space continue to be questionable.
  9. GACR points to their development of an electric 4x4 Range Rover that was estimated to cost $261,000 per unit in 2008 in a failed transaction with a potential buyer, and participation in "major projects" associated with Epsilon and refers to relationships with Volkswagen, Fiat and Michelin to create the perception of credibility within the EV space. We doubt very much that there are many buyers that want to pay $261,000 for an electric Range Rover. If profits are not a concern I'm sure Liberty is not the only company in the world that can be build an electric Range Rover. Creating an electric vehicle that no one wants to buy is not impressive. Also, these global automotive leaders do not need assistance from GACR in any way. We doubt very much that these global leaders would also share technology with GACR. GACR does not reference any licensing or other formal business relationships with any major global automotive company in any of its SEC filings. None of these supposed successes or relationships have produced any meaningful revenues or sales of electric vehicles. Information about these relationships is very limited. Management has used the references to hype GACR's stock but has failed to quantify or explain with any detail, what the participation in Epsilon means for GACR going forward.
  10. GACR refers to the G-Wiz as "ever popular" yet does not reference anything other than the 1,000+ G-Wiz cars that were sold by GoinGreen prior to GACR's acquisition of GoinGreen. Mr. Hobday, if GoinGreen sold 1,400 G-Wiz cars prior to 2011 and now almost in 2014 there are still only 1,000+ G-Wiz cars on the road in the U.K., how could you possibly refer to the G-Wiz as being popular?
  11. GACR states that Newport's first electric bus will be presented at a tradeshow in Las Vegas in February 2014. It appears as though we were correct and Newport has yet to sell any electric buses.

If these are the "major achievements" of GACR for 2013, then it seems there were no actual major achievements at all. In fact, there was just a lot of bad news in 2013. GACR declined providing specifics on any successful startups or M&A transactions that its CEO or CFO have previously participated in. Management does not seem to understand that their credibility is a major reason why investors would buy or sell GACR. We are going to provide some specifics about Mr. West below, including his his LinkedIn profile below.

 

The following is a quick summary of the status each of these companies has today. Mr. West has disclosed three companies he was previously associated with that are failures and no longer operating. Perhaps GACR will be his fourth. He appears to hardly be an "invaluable" resource as Mr. Hobday suggests in the most recent press release. On Dec. 30, 2013, Mr. West seems to have completed the third restatement of GACR's 2012 financials. There are more adjustments and restatements in the filing that was made with the SEC than we have ever seen before. After completing our due diligence on him and seeing this latest restatement, Mr. West does not have credibility in our eyes.

  1. Farmright was in administration. Administration is a form of bankruptcy in the U.K. defined and explained here.
  2. Last Mile was in liquidation. Liquidation is also a form of bankruptcy in the U.K. and is defined and explained here.
  3. Green Energy Technology appears to have been a failure. Its CEO, Luke Dowell, is now employed by Jaguar Land Rover according to his LinkedIn bio.

Information Previously Discussed

The following is a summary of the facts we stated in the initial article that management has not responded to. As a result, we believe management agrees with these statements.

  • GACR is massively overvalued, with a price-to-sales ratio of approximately 600% that of Tesla and 9,800% of the other 13 electric car manufacturers we identified in our initial article.
  • GACR has never generated a profit from operations or reported net income.
  • GACR has spent only approximately $7,000 on research and development in the 33 months ended Sept. 30, 2013, yet it claims GACR is an innovator.
  • The CEO and CFO of GACR have no specific experience or success within either the electric vehicle or automotive sector.
  • Powabyke is a failing $335,895 acquisition.
  • The Ironridge transaction was not a long-term investment. Ironridge was issued 7,700,000 shares of GACR at a cost basis of $0.07 on Dec. 4, 2013. In our initial article we noted this was a 77% discount to the current market price. Ironridge can sell all of these shares at any time. Investors should expect Ironridge to continue selling these shares even when GACR's stock is already declining.
  • GACR's bus manufacturing subsidiary, Newport, refers to Don Brown as a customer. Don Brown is a distributor and is under no obligation to actually purchase 432 buses from Newport.
  • Newport delivered approximately 10 buses to Don Brown between January and September 2013. A total of 70 buses were scheduled to be delivered during this time period. This is a breach of the contract with Don Brown that has not been previously disclosed to GACR investors.
  • Don Brown has also breached the agreement with GACR by not maintaining 12 buses in its inventory at all times.
  • Management continues to overhype its stock every chance it gets.
  • Newport has yet to deliver an electric-powered bus and has no orders for an electric-powered bus yet it refers to itself as "America's EV Specialist" on its website.
  • Liberty has just one customer.
  • The pressure on GACR's shares should mount if and as soon as the SEC approves the 25 million shares being registered for Kodiak.
  • An additional issuance of 361 million common shares to the holders of the Series A Shares was possible as of Sept. 30, 2013. This represents dilution to the current common stock shareholders of 91%.
  • Upon an issuance of common shares to the holders of the Series A Shares, GACR's stock declined 68%.

Management's Responses

Management has argued just a few of the facts we stated in our article. We outline our current thoughts below.

  1. If the G-Wiz was an expensive car then perhaps a car repair shop could generate significant profits. It is not. It is listed on GoinGreen's website for resale at between $2,700 and $4,200. If any substantial repairs are needed for the G-Wiz, the car will simply be considered totaled and the owner would not spend anything more than the current value in order to make repairs. Mr. Hobday states that there are 1,000 G-Wiz's "under GACR's care" in a recent press release. Even if every G-Wiz Mr. Hobday claims his company takes care of were to undergo repairs each year that matched the value of the cars (i.e., they were totaled), and assuming they were all valued at the high end, the revenues for GACR would be $4.2 million. We have no idea what the profitability of a repair shop is. We have no interest in an investment in a car repair shop of any kind. We doubt GoinGreen has actually served anywhere near 1,000 G-Wiz's in any recent fiscal year. GACR's SEC reporting suggests this is true. It seems more likely that low-end unwanted G-Wiz cars will just simply be considered totaled and will be scrapped when repairs of any significance become necessary. In our opinion, the GoinGreen repair shop is highly unlikely to generate any substantial revenues or profits. Further, we estimate net profits on the resale of the 1,000 G-Wiz vehicles would max out at $500 per G-Wiz, just over 10% of the high end of the price range on the website. This net profit is estimated after commissions are paid to the salesman, which we assume are generally 30% of the gross profit on the sales. This suggests that GoinGreen's revenues from sales of used G-Wiz cars could not exceed $500,000 in any fiscal year. Profits would be miniscule. However, since the business began deteriorating in 2010, we believe GoinGreen has sold just a small number of used G-Wiz vehicles. The actual revenue figure is far less than $500,000 and the resale of G-Wiz cars, which likely have very little demand in the U.K.
  2. GoinGreen is a failing acquisition. Management responded to this statement by suggesting that GoinGreen, for which GACR purchased for $565,290, is now a repair shop and resells an outdated, unwanted, first generation electric vehicle, the G-Wiz. It is interesting to us that GACR provides no sales figures in its SEC filings and when questioned for details, GACR has refused to provide further details. This is simple. GACR should tell investors the following information:
  3. How many cars GoinGreen has sold during each reporting period?
  4. Which cars were actually sold?
  5. What type of propulsion each car sold relied on?
  6. What is the sales commission GoinGreen earned on each car sold, by model number?
  7. What is the net profit GoinGreen earned on each car sold, by model number?
  8. How many salesmen are employed by GoinGreen?
  9. Does GoinGreen have a sales office?
  10. How many cars, and which models, has GoinGreen provided maintenance on, for each reporting period?
  11. What are the revenues, gross profit, and net profit for GoinGreen's repair shop for each reporting period?
  12. The fact that this information is not provided is alarming. GACR seems as if the management know how to talk and get by within the electric vehicle sector in order to conduct some business but they are far from adequate in executing a business plan and tracking the success of that execution.
Summary: 

We plan to continue our research, including looking into why why Mr. Hobday, who is British, moved to France. We are unsure of why he is no longer employed with Arch Chemicals or BASF. We plan to investigate who the actual owners of each of GACR's acquired entities are and if they are related to GACR management in any way. Either way, we believe our case is strong. We believe no investor should put their money at risk by investing in GACR. In our initial article we determined significant downside existed in GACR of at least 84% downside from the then-current price of $0.26. Our analysis in that article suggests a fair price for GACR is $0.04 per share.

Disclaimer: 

 

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Comments

I'm neither friend nor foe of GACR and I've read both recent articles on GACR. The first article was very informative, appears to be factually and objectively written. The tone of this second article has turned subjective and clearly personal which can take a way from the content and makes one wonder if the author has a personal agenda against GACR and/or its CEO Mr. Hobday. By the way, who is the founder of SkyTides and is he the author of these 2 articles?

as a reader final decision is yours,to draw final conclusion. It was absolutely informative article.I do not care its in the favor or against the company. Its a good info you can use it any way. for me i tracked the articles about penny stocks,70%of the time they are right on spot to track down shady company,and it did save me lot of money because i see their prediction comes out to be right on spot most of the time? wish you good luck

Hello SkyTides, I hope this new year thus far has found your work productive and your finances prosperous. I just want to briefly pick up on a comment and response we shared a couple of weeks ago. First and foremost, I am a neophyte investor and someone who is new to the investment arena and I was/am considering investing in GACR. Therefore, I am truly appreciative of the research and due diligence you have done on GACR. It helps someone like me out tremendously and gives me many points of reference and places to start in doing my own due diligence. So again, I thank you for providing such a great service. Your knowledge, abilities and vast experience is evident and can't be ignored by any objective reader. I just wanted to establish that first before I move on to a particular question you asked me and then I'll respectfully have a couple more follow up questions relative to GACR. In my initial comment I asked "By the way, who is the founder of SkyTides and is he the author of these 2 articles?" Your direct response to that question was "The founder of SkyTides is anonymous, much like plenty of other SA authors. You are welcome to review the profile of SkyTides provided by SA. May we ask what that matters to you, as someone who is neither a friend or foe of GACR?" My answer, it doesn't matter one way or the other but as someone who is doing there own due diligence when I receive some information I first like to consider the source of that information for reasons to obvious to mention. No matter what the arena I never automatically discount anonymous writers or speakers, but when there is a well-respected name (in the field/industry) attached to that article or that statement, that name can give that article/statement greater credibility. Moving on, there was a report recently done on GACR by Alan Stone and WallStreet Research. My question, have you read the report yet, if so, your thoughts? Again, I'm new to this arena so I'm not familiar with Mr. Stone. What is your thoughts on my Mr. Stone? For reasons of convenience I've attached the link below, once you get there just click on the article for GACR. http://bit.ly/1eKwMwF website. There was another article recently written on GACR. I attached that link also. Have you read that article (by "SmallCapStock") yet, if so, your thoughts? http://bit.ly/1eKwNRj Thanks SkyTide and until the next time...

Groundtides-Can you give me any information on David Knight and David Bryant (David & David aka Scammer Boyz), specifically the criminal and civil lawsuits which resulted in adverse judgments? I'm doing some research (unrelated to GACR) and those names came up and I will be more then happy to share that research with you if something relevant comes to light. Thanks in advance.

I do not know anything about GACR but I do think the article is rather too harsh on the Mia Electric which is actually the best value EV in Europe at present (the price in the UK is £13595 - including the batteries - so a good £6000 less than, for example, the VW e-up!). It is not useful to compare it with the Tesla - the Mia is a small (think not much bigger than a Smart car) urban/suburban vehicle that meets a particular need common the European cities and has both the speed and reliability appropriate for 95% of commutes. It contains a lot of innovative design features and its LiFePo4 batteries really are excellent, and the whole machine extremely recyclable. I cannot say anything about the rest of the article but I do think that it was unnecessary to criticse the Mia Electric in your article.

Justin, is the Mia amazing? Thats what GACR has to say about it. It is worth comparing the Mia to a Tesla when someone says the Mia is amazing. Investors would probably like to know why your Mia is "amazing." Can you help? Also, that price is lower than our research suggested. So that means that GACR may have made even less on the Mia sales commissions than we had estimated. Still GACR promotes GACR stock using the Mia - which GACR did not design or manufacture.

Thanks SkyTide. It is a very good car but EV drivers have different needs and expectations so I think judgments will vary about how 'amazing' it is (though it is distinctive in the market; the manufacturer's website does a good job of detailing its various design innovations - http://bit.ly/19Rf1qu). I certainly don't want to criticise your comprehensive comments on GACR - it is all news to me - and clearly these are vital when it comes to a realistic stock valuation - but just wanted to say that the Mia itself is a good car, at least from this buyer's perspective. However, as you rightly note, it is not a GACR product but designed and manufactured by Mia Electric in France and has been on sale in France for, I believe, the last three years (part of its appeal to me, as it has demonstrated itself to be reliable and economical).

Based on SEC filings, the cost for ~500 buses for the Don Brown order (presuming diesel or CNG) runs up to $750k a year according to Carter Read. Anyway, you have some valid points here, but based on what I've read so far outside of SA, via SEC filings, and other industry content, it looks like GACR is legit -- although not necessarily very transparent about it. I'm just surprised Mr. Ian Hobday hasn't personally responded to you as he has for other posts on the net. I'm in long at around 4¢ so I can afford to hang out and see if it goes out post 2014 and any additional sales expected from the e-PATRIOT line and others through the Don Brown Bus Sales distribution or whatever you want to call it. Definitely not as profitable as the ~$50 call I made on Tesla a few years ago... but hey, I can't complain at my entry point. Sorry for anyone else who got in much higher. I did have some concerns about possible affiliation or ties to David Knight and David Bryant of David and David, aka Scammer Boyz from the 1980's and their various failed micro caps that resulted in criminal and civil lawsuits and a $217 M verdict against them, but can't find any data to confirm this. The closest tie is Mr. Luke. Second concern is around dilution of share. It seems like millions and millions of shares are being doled out left and right to everyone for funding or just to pay bills and employees. Hopefully, this stops once revenues pick up with the e-Patriot sales and other sales expected for 2014. This could be the breakout year. We'll see. Last point I wanted to make was around Mr. Read's and Mr. West's employment agreement. It specifies that they are to assist in listing on AMEX or NASDAQ within years, so I would presume they are expecting to get listed? Or is that just fluff? @ian_hobday, could you please chime in to clarify the concerns around Dave & Dave and AMEX/NASDAQ listing?

GACR is now .013 cent . so what is the status ?

And the share price is now..........04 cents!

I have no position here. But can you look into the minority ownership they have in Veridian Motor Corporation. VMC webiste barely has more than a page to it but their Facebook page does show more than a few vehicles for sale - though not exactly TSLA to say the least. Curious on your thoughts. Thanks.

Wow - great comments. . . Will wait and see. If it is true - then the positive would be them making various partners in the industry both in Europe, USA and China (VMC I think has some threads over there from what I can gather). . . Not saying it is a buy but then I could see a direction for the company - if they make it that long to play out this direction without a revenue stream is definitely not looking great . . .But at least a sense of direction. Thank you and please keep me updated. Really enjoy your research and opinion right now. No position.

Skytide, So still no word on Veridian. Do you have any? I keep looking on their Facebook website and it seem legitimate. Any opinion yet? Also looked at the article by Mr. Stone - the pictures of the buses that have to be delivered to Mr. Brown also seem to be in assembly. What is your take on this? Would like to give the company some benefit of the doubt as it does seem like they are spreading their wings and making some connections in the industry. Thanks G_E

Awesome - great assessment. In the future I may take a flyer on this based on the Newport news - not just yet and will watch what Newport does carefully. . . I do like their idea of branching out into the market in different venues but not sure what the end goal is yet. . . If they are going to be a distribution hub for different types of EV vehicles I can see that happening. But as of right now the idea is not explained clearly. What holds me back even more is that they have 396 Million shares out there. Holy Jesus. Talk about dilution. Any idea though why it doesn't trade more shares on a daily basis then? That is a lot of shares. Thanks.

Is this evaluation still valid giving the sky rocketing revenues? Revenue: 2013 – $3,025,850 2012 – $320,648 2011 – $0 Revenue per Quarter: Q1 2013 – $218 thousand Q2 2013 – $429 thousand Q3 2013 – $1 million Q4 2013 – $1.4 million Additionally, a summary of the 10-K filing is available online here: http://on.wsj.com/1r1Jzhm

As we said in our previous comment "we do not trust Mr. Hobday and do not believe investors should consider this stock as a real investment" and "There are clearly better investments to choose from then GACR." We will add to those comments and suggest that in the past 8 months GACR has announced several acquisitions and investments. We have yet to see any clarity on those transactions and have a lot of questions about them. We will also suggest that GACR's toxic financing, namely the Series A preferred stock, will continue to block any upward price movement in the stock. At this point, we do not think GACR is a good investment at any price.

Michael, your comment is solely based on fundamental analysis that begins with possibly flawed and definitely inadequate public disclosure of financial results. You should always consider the management who run a public company and the likelihood they succeed with their business plan. Lets take a closer look: 1. This management team is not transparent and routinely attempts to mislead investors. We reference the press release about the "new Mia" whihc was actually released several years ago and was not and is not manufactured by GACR. 2. The management team refuses to identify and discuss profitability in each of its business segments leading us to believe some of the business segments are entirely unprofitable and exist only to boost the sex appeal of the stock. The word "profit" shows up just 10 times in their 2013 10-K that likely has 10,000+ words in it. That suggests an obvious attempt to avoid the discussion on profitability. There is no business segment disclosure in this 10-K - which is perhaps a violation of SEC Regulation S-X which guides the disclosure requirements of SEC filings. 3. Management issues pump press releases about acquisitions and other topics with no specific details of the accretive or nonaccretive impact of those acquisitions. 4. Management pays for third parties to pump their stock. Real companies do not do this. 5. Management can not get an S-1 approved by the SEC (see the S-1/A filed on 12/9/2013 that has neither been declared effective or withdrawn)...what are the SEC's issues? Is there a pending restatement (it would not be the first) or an SEC inquiry the company is not telling investors about? 6. Sadly, the CFO recently passed away. The company has not hired a new CFO yet the company appears to have multiple complex cross-border acquisitions to account for and possibly release acquisition audits for. These do not appear to be simple acquisitions. There is no chance that Mr. Hobday, as CFO, can complete the accounting related to these acquisitions. So who will do this work? Is the person competent? 7. Are the acquisitions that have been announced over the past 4 months even still pending? We have not heard anything about these acquisitions aside from just the initial announcements. 8. Mr. Hobday has a lot on his plate. We see no evidence in his background that suggests he has any chance of handling the M&A, public company issues in general, and business operations in multiple countries in a fast-moving dynamic industry. As you can see from our comments here and in our published articles...we do not trust Mr. Hobday and do not believe investors should consider this stock as a real investment. We also are fearful for investors in GACR that the reasoning behind GACR's inability to receive the SEC's approval of the S-1/A filed for Kodiak is more than just an "administrative issue." We have a simple comment to leave you with. There are clearly better investments to choose from then GACR. If that is not clear than you need to actually read the two articles we have published.

We have no specific knowledge of those two individuals. If you have a message like this in the future you should send it directly to us. This article is meant to discuss topics on GACR only.

Additional comments on $GACR by SkyTides available on Twitter account, see http://bit.ly/1efopLg

JSK - thank you for your comments. We are glad you found our work helpful. Regarding the use of an anonymous pen name, we’ll further add that if the founder’s name was known it would potentially disrupt other business interests he has. Those interests, to be very honest, are more important to him than what he and the team do here on SA. Writing for SA and speaking with other investors is enjoyable. We do not do it because of the compensation – which is minimal. First, any company that refuses to discuss profits in each of its business segments within its SEC filings is super suspect to us. We are very surprised the SEC has not picked up on the lack of disclosure about profits in GACR’s filings. We would not be surprised if additional amendments and possibly restatements are filed with the SEC to correct the glaring absence of this info. Re: Alan Stone, first, it is always a bad sign when a company is paying for research. This is really sloppy, all over the place research that is full of words but no substance. It is painful to read. Public companies that can stand on their own do not pay for research. If GACR is paying for research it essentially means they have run out of good things to say/pump about. Stone’s disclosure is in the fine print on page 1 “The featured company paid a fee to Alan Stone & Company LLC (ASC) for preparation and distribution of this profile, as well as other potential fees for consulting and investor relations services. ASC and its associates may own restricted common stock of the featured company earned for such services, shares of which may be sold at any time without notice.” So essentially, this is tainted research because the people writing it have been paid to do so and hold shares of GACR so they are not motivated to be objective and possibly never would write about GACR if GACR hadn’t already paid for the research. Since they are long they also stand to directly benefit potentially from saying good things about GACR. Stone refers to the $20M Don Brown contract that we have already shown GACR breached. This is not a contract at all really. It appears as though it is just an open-ended agreement designed by GACR for use in pumping GACR’s stock. Don Brown is not under any legal commitment to buy 432 vehicles from GACR. Based on what we have inferred from management’s responses to our initial article and from the SEC filings, Liberty is not a successful business. GoinGreen is less than that. GACR just loves to pump without any details that matter. A contract with Navistar is great but no terms of any importance are disclosed. A one-stop-shop…another way to say this is a car repair shop and car sales office. That does not sound investment-worthy to us at all. Ironridge is not an investor. They acquire shares and trade them for profit/fees. Their involvement in GACR is in no way a good thing. The E-Range Rover is a useless endeavor. GACR built it but can’t sell it. But they continue to pump the stock about it. We think the accounting for GACR’s Powabyke investment is messed up since their appears to be no “equity in the earnings of minority interest” line item in the GACR P&L in recent quarters and there is no disclosure about Powabyke revenues, profits etc. anywhere else in the financials. This should be equity method accounting and it is not being applied correctly by the CFO. The 2014 projections by WallStreet Research are insane. Perhaps management should be asked what their thoughts are on the bus sale figures (which seem impossibly high to us). Can someone ask Carter Read about these projections? If GoinGreen can get sales commissions of $1M that infers sales of the Mia and maybe other products would be over 1,000 units. We think that is impossible as well. Smallcapnetwork is a slimy pump by an un-informed car salesman it seems. This was even harder to read. The E-Range Rover is called Liberty’s flagship model…yet as far as we know no units have ever been sold. The Modec truck…well Modec was a UK EV company that went bankrupt according to our research – hardly something to reference in a pump article but like we said, this guy is un-informed. The mia did not make GoinGreen’s sales go crazy…we are just guessing on this one for now…based on what management said in response to our initial article and our research. Lastly, we like the quote “That's the situation with GACR right now; it's been beaten down pretty severely over the past few days, for no particular reason.” The stock is down because of the downward pressure on the stock from Kodiak, Ironridge, and older shareholders that were locked up for several years and just recently could get out of the stock is taking its toll. Also, there were some articles written by SkyTides that outlined quite a few disturbing facts about GACR. Maybe someone should clue this guy in but he probably doesn't care as he was already paid by GACR - it appears.

G_E, the short story from what we can see so far is Viridian is a very small company. It is highly unlikely the company's revenues were in excess of GACR's revenues in 2012 which were $321K. If we were to guess we think revenues were likely below 20% of GACR's 2012 revenues, which means less than $64K. Its hardly worth getting too excited about. If Viridian was a super fantastic acquisition then there would be more details released about the company's financials by GACR management - who are never shy about releasing good news. But that hasn't happened so we presume there isn't much to say about Viridian's financials. A team member of ours may be speaking with a contact associated with Viridian in the next few days and will release that info as soon as we have it - assuming it is verifiable and news worthy. Regarding photos of buses being assembled...well we never said Newport was a fake company or anything like that. Of all three business segments (or four if you include Viridian), we think Newport is the most legitimate by far. We just don't see their buses as being all that innovative which means they probably won't sell at ridiculous growth rates that Stone suggests. This is a key reason why GACR is not "investment worthy" at this time. If they really do get the electric bus launched next month then perhaps we would change our minds. But a letdown is possible as the electric bus was supposed to be launched last November. They could miss again on their proposed launch date. But its still not impressive to us to just build one electric bus. GACR built an E-Range and it got them nowhere. Its all about the specs. Can Newport build a bus that is clearly better than other alternatives? We're not so sure they can. In the end we still believe this company at a $100M market cap was overvalued...and it still is today, at $40M.

Well, our first thought is that GACR has not filed an 8-K to announce the acquisition. It would be required if VMC was a significant acquisition. Maybe it isn't? We don't know the exact date the acquisition of the ownership occurred...how GACR paid for it...if they paid for it...what it means to GACR etc. Management just used the news to pump the stock. At least they are consistent. We may look into VMC but we have a few other topics we're more interested in at the moment. Lets see if they file an 8-K tomorrow. Tomorrow might be the end of the mandated 4 day filing period when an 8-K would be required. But we really have no idea at this point.

I reside in UK and as yet have not seen one Mia on sale or even a Dealership for in UK. Most electric vehicles come in price range of £25000+ after government rebate. At present stock price GACR is a non progressive company and I do not a rescue bid coming in;Tesla is better bet plus BMW,Renault,Citreon etc

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